Moderna

Moderna is an American biotech company focused on drug discovery and drug development based exclusively on messenger RNA (mRNA).[4][5] Moderna is attempting to insert synthetic mRNA into the living cells of patients that would reprogram their cells to create their own therapies and vaccines, rather than being created externally and injected as with conventional medicines. It is a novel technique abandoned by several large pharmaceutical and biotech companies which were unable to overcome the dangerous side-effects of getting RNA into cells.[6][7][8] As of May 2020, no mRNA drug has been approved for human use.[9][10]

Moderna, Inc.
Formerly
ModeRNA Therapeutics
Public
Traded as
IndustryBiotechnology
FoundedSeptember 2010 (2010-09)
Founders
Headquarters200 Technology Square, Cambridge, Massachusetts.[1]
Key people
Productsnone
Number of employees
820 (Dec 2019)[1]
WebsiteModernatx.com

Moderna conducted mostly unsuccessful trials in traditional high-margin chronic therapeutic areas with AstraZeneca, and in orphan diseases with Alexion Pharmaceuticals. In 2014, Moderna moved to focus on lower-margin vaccines, given that an mRNA vaccine – efficacy issues aside – will always stimulate a level of antibody development in subjects.[5][8] The strategic change led industry experts, and Moderna employees, to question the financial viability of the company.[5][8]

In December 2018, Moderna became the largest biotech initial public offering (IPO) in history, raising $600 million for 8% of its shares, implying an overall valuation of $7.5 billion, and with cumulative losses of $1.5 billion and equity raised of $3.2 billion, since inception.[5][11] The company has a reputation for secrecy and little of its work has ever been published, and none peer-reviewed or scientifically validated,[6][7] an approach that was compared to Theranos by Nature.[12][5] In May 2020, Moderna was valued at $30 billion but none of its mRNA molecules had reached large clinical trials, and several had failed due to side-effects.[5]

History

In 2010, ModeRNA Therapeutics was formed to commercialize the research of stem cell biologist Derrick Rossi, who developed a method for modifying mRNA, transfecting it into human cells, then dedifferentiating it into stem cells that could then be further dedifferentiated into desired target cell types.[13][14] Rossi approached fellow Harvard faculty member Tim Springer, who called on Kenneth Chien, Bob Langer, and venture capital firm Flagship Ventures, to co-invest.[14][15]

In 2011, the CEO of Flagship Ventures (now Flagship Pioneering), Noubar Afeyan, brought in European pharma sales and operations executive Stéphane Bancel as CEO.[14][6] Afeyan personally owned 19.5% of Moderna and was the largest single shareholder, while his fund, Flagship Pioneering, owned 18%.[16]

In March 2013, Moderna and AstraZeneca signed a five-year exclusive option agreement to discover, develop, and commercialize mRNA for treatments in the thereputic areas of cardiovascular, metabolic and renal diseases, and selected targets for cancer.[6][17][18] The agreement included a $240 million upfront payment to Moderna, a payment that was "one of the largest ever initial payments in a pharmaceutical industry licensing deal that does not involve a drug already being tested in clinical trials",[17] and an 8% share in Moderna.[16] As of May 2020, only one candidate has passed Phase 1 trials, a treatment for Myocardial ischemia, labelled AZD8601.[lower-alpha 1][20]

In January 2014, Moderna and Alexion Pharmaceuticals entered a $125 million deal for orphan diseases in need of therapies. Alexion paid Moderna $100 million for 10 product options to develop rare-disease treatments, including for Crigler-Najjar syndrome, using Moderna's mRNA therapeutics platform [21] By 2016, Bancel told an audience of J.P. Morgan investors that the work with Alexion would shortly enter human trials. However, by 2017, the program with Alexion had been scrapped as the animal trials showed that Moderna's treatment would never be safe enough for use in humans.[6][8]

Most of the biotech community did not value vaccines. It was very hard to move that stuff forward. Because people said, "Oh, vaccines, nobody's going to pay for that."

Jeff Ellsworth, Former Senior Director of Preclinical Pharmacology and Head of Rare Genetic Diseases, Moderna (2020)[5]

In 2014, after disappointing standalone therapeutic trials,[lower-alpha 2] Moderna moved to focus on mRNA vaccines given that, efficacy issues aside, mRNA will always stimulate a level of antibody development in subjects.[5][8] The change in strategy had risk given the materially lower margins of vaccine development (called "loss-leaders" by some Moderna employees),[5] with some senior employees and industry experts questioning the future viability of the company.[5][8] Rossi left the company.[5]

In February 2016, an op-ed in Nature, criticized Moderna for not publishing any peer-reviewed papers on its technology, unlike most other emerging and established biotech companies, and compared its approach to that of the controversially failed Theranos.[12] In September 2018, Thrillist published article titled, "Why This Secretive Tech Start-Up Could Be The Next Theranos",[23] criticizing its reputation for secrecy and the absence of scientific validation or independent peer-review of its research, though having the highest valuation of any U.S. private biotech company at more than $5 billion.[6][7] A former Moderna scientist told Stat: "It's a case of the emperor's new clothes. They're running an investment firm, and then hopefully it also develops a drug that's successful".[6]

In 2018 the company rebranded as "Moderna Inc." with the ticker symbol MRNA, and further increased its portfolio of vaccine development.[5] In December 2018, Moderna became the largest biotech initial public offering in history, raising $621 million (27 million shares at $23 per share) on the NASDAQ, and implying an overall valuation of $7.5 billion for the entire company.[11][24] The year-end 2019 SEC filings showed that Moderna had accumulated losses of $1.5 billion since inception, with a loss of $514 million in 2019 alone, and had raised $3.2 billion in equity since 2010.[5][16]

In March 2020, CNN reported on a meeting in the White House, recorded on C-SPAN, between the Trump Administration and pharmaceutical executives, where Bancel told the President that Moderna could have a vaccine ready in a few months, materially undercutting the next fastest projection in the room. On the basis of Bancel's verbal commitment to Trump, Moderna received funding of $483 million from the Trump Administration. CNN reported that medical authorities including Dr. Anthony Fauci tried to rationally curb the enthusiasm toward any unproven technologies in this meeting, which Trump ran "like an episode of Shark Tank". In April 2020, Trump appointed Moderna board member Moncef Slaoui to "Operation Warp Speed".[5]

Leadership

Executive

Since 2011, Moderna has been led by CEO Stéphane Bancel, a French businessman who is not a scientist and comes from a pharma sales and operations background.[6][5] Bancel has been described as having a secretive approach to Moderna, and of being a tough operator.[6][5] Though never having worked with RNA before, Stat noted that Bancel "is listed as a co-inventor on more than 100 of Moderna's early patent applications, unusual for a CEO who is not a PhD scientist".[6] After Noubar Afeyan and Robert Langer, Bancel is the largest individual shareholder in the company.[25]

Stephen Hoge is President and a former McKinsey & Company management consultant who joined in 2012; he is the fourth-largest individual shareholder in the company.[25][3]

Lorence Kim is CFO and a former Goldman Sachs biotech investment banking managing director who joined in 2014; he is the fifth-largest individual shareholder in the company.[25][3]

Stock sales

On 18 May 2020, when Moderna announced it was making progress with its coronavirus vaccine, company stock rose 30%. That day, CFO Lorence Kim bought stock for $3 million and immediately sold it for $19.8 million. The next day, chief medical officer Tal Zaks bought stock for $1.5 million and immediately sold it for $9.77 million. Both of these executives were using automated insider trading plans known as 10b5-1 plans.[26]

On 21 and 22 May, Moderna's leading shareholder, the venture capital firm Flagship Pioneering, made $69.5 million by selling Moderna stock. Flagship is listed as a Moderna "insider" but did not use an automated 10b5-1 plan for these sales.[27]

Board

Since 2011, the Chairman of Moderna has been the CEO of Flagship Pioneering, businessman Noubar Afeyan.[28] Afeyan holds his interest in Moderna through various Flagship Pioneering vehicles, however, at the 2018 IPO, documents filed stated that Afeyan owned 19.5% of the company, while Flagship owned 18%, thus giving Afeyan control over 37.5% of the company.[16]

In May 2020, board member Dr. Moncef Slaoui resigned from the company to become Chief Scientist for the Trump administration's "Operation Warp Speed", a group designed to accelerate the development of a vaccine for the coronavirus. Slaoui continued to hold more than $10 million in stock options in the company in his new role while the Federal government invested $483 million in the company to assist in coronavirus vaccine trials. Senator Elizabeth Warren called the holding a conflict of interest and that Slaoui should have divested his options.[29]

Platform

The Moderna platform develops mRNA therapeutic candidates which are delivered in liposomes, using mRNA with modified uridine nucleosides to improve folding and translation efficiency, and mRNA drug candidates targeted to specific cell types.[30] mRNA vaccine work is considered risky, and the main pharmaceutical companies abandoned their mRNA development because of dangerous side effects that can arise in getting the RNA into the living cell.[6][5] As of May 2020, no RNA (or RNA vaccine) has been approved for use in humans, and it remains a theoretical concept.[9][10]

COVID-19 vaccine
See also: COVID-19 vaccine § Clinical trials started in 2020

In January 2020, Moderna announced development of a vaccine to inhibit COVID-19 coronavirus, in competition with other biotechnology companies, such as Gilead Sciences, Vaxart, Inovio Pharmaceuticals, and Novavax.[31][32][33] Moderna's technology is a messenger RNA (mRNA) compound named mRNA-1273, providing inhibition against SARS-CoV-2 that encodes for a form of the spike (S) protein on the virus.[34] From the announcement, Moderna's shares rose dramatically, and the CEO and other corporate executives began large program sales of their shareholdings.[35]

In March 2020, the Phase I human study of the vaccine candidate began in partnership with the US National Institute of Allergy and Infectious Diseases.[36] In April, the U.S. Biomedical Advanced Research and Development Authority (BARDA) allocated up to $483 million for Moderna's vaccine development.[37] Plans for a Phase II dosing and efficacy trial to begin in May were approved by the FDA.[34] In preparation for manufacturing as many as a billion doses of the vaccine should it have proof of safety and efficacy in its human studies, Moderna signed a partnership with the Swiss vaccine producer, Lonza Group, who will begin batch manufacturing by July.[38]

In May 2020, after releasing partial and non-peer reviewed results for only 8 of 45 candidates in a preliminary pre-Phase 1 stage human trial direct to stock markets, the CEO announced on CNBC an immediate $1.25 billion rights issue to raise funds for the company, at a $30 billion valuation.[39] Former FDA commissioner Scott Gottlieb tempered the CNBC audience by saying that there would be a "long road ahead for Moderna".[40] The Wall Street Journal followed up with "Be Careful Handling White-Hot Moderna Stock",[41] while Stat said, "Vaccine experts say Moderna didn't produce data critical to assessing Covid-19 vaccine".[42][43] William A. Haseltine in a Washington Post opinion piece called it: "publication by press release".[44]

On May 25, Moderna began a Phase IIa clinical trial recruiting 600 adult participants to assess safety and differences in antibody response to two doses of its candidate vaccine, mRNA-1273, a study expected to complete in 2021.[45]

See also

Notes
  1. The relative success of AZD8601 is attributed to the fact that Moderna has been able to inject mRNA direct into the heart muscle without needing a drug delivery system. However, only the heart and some skin areas are capable of absorbing "naked mRNA".[19]
  2. Competitor mRNA biotech CureVac had a more spectacular experience in 2017 with the Phase II failure of its prostate cancer therapy, CV9104, which led CEO Ingmar Hoerr to say that "CureVac no longer sees mRNA as a stand-alone therapy", and "What we've learned here is that mRNA is not enough on its own ..".[22]

References
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  2. Alspach, Kyle (May 22, 2013). "Moderna CEO Bancel joins Flagship Ventures as senior partner". Boston Business Journal (Blog). American City Business Journals. Retrieved March 12, 2020.
  3. "Executive Committee & Leadership". Retrieved 19 May 2020.
  4. Catherine Shaffer (December 6, 2013). "Moderna Makes Entrance with $40M Round for mRNA Work". BioWorld. Retrieved Dec 11, 2013.
  5. Kuznia, Robert; Polglase, Katie; Mezzofiore, Gianluca (1 May 2020). "In quest for vaccine, US makes 'big bet' on company with unproven technology". CNN Investigates. Retrieved 1 May 2020.
  6. Garade, Damien (13 September 2016). "Ego, ambition, and turmoil: Inside one of biotech's most secretive startups". Stat. Retrieved 18 May 2020.
  7. Crow, David (6 September 2017). "Secretive Moderna yet to convince on $5bn valuation". Financial Times. Retrieved 18 May 2020.
  8. Garde, Damien (10 January 2017). "Lavishly funded Moderna hits safety problems in bold bid to revolutionize medicine". Stat. Retrieved 19 May 2020.
  9. Cross, Ryan (3 April 2020). "Will the coronavirus help mRNA and DNA vaccines prove their worth?". Chemical & Engineering News. 98 (14). Retrieved 19 May 2020.
  10. Peccould, Jean (14 May 2020). "Labs are experimenting with new – but unproven – methods to create a coronavirus vaccine fast". The Conversation. Retrieved 19 May 2020.
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  12. "Research not fit to print". Nature. 34 (115). 5 February 2016. Retrieved 19 May 2020.
  13. Erin Kutz (4 October 2010). "ModeRNA, Stealth Startup Backed By Flagship, Unveils New Way to Make Stem Cells". Xconomy.
  14. Gregory Huang (December 6, 2012). "Moderna, $40M in Tow, Hopes to Reinvent Biotech with "Make Your Own Drug"". Xconomy.
  15. Catherine Elton (March 2013). "The NEXT Next Big Thing". Boston Magazine. Retrieved Dec 11, 2013.
  16. Terry, Mark (29 November 2018). "Can Moderna Live up to the Hype? mRNA Company Increases IPO Goal to $600 Million". BioSpace. Retrieved 19 May 2020. The filings with the U.S. Securities and Exchange Commission (SEC) not only updated the proposed IPO but disclosed the size of the company’s largest investors’ stakes. Noubar B. Afeyan, company chairman, holds 19.5 percent, or 58,882,696 shares. Flagship Pioneering holds 18 percent of Moderna shares
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  29. Corcoran, Kieran (16 May 2020). "The ex-pharma exec leading Trump's COVID-19 vaccine program has $10 million in stock options for a company getting federal funding". Business Insider. Retrieved 18 May 2020.
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