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FTR #1131 Bio-Psy-Op Apocalypse Now, Part 7: Moderna Uber Alles

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FTR #1131 This pro­gram was record­ed in one, 60-minute seg­ment [6]

[7]

Intro­duc­tion: This pro­gram con­tin­ues dis­cus­sion of Mod­er­na from FTR #1130 [8]. The fir­m’s mRNA (mes­sen­ger RNA) vac­cine that was high­light­ed in that pro­gram is a major top­ic of dis­cus­sion in this one as well.

Do note that DARPA sup­port for Mod­er­na and their work on “gene dri­ving” tech­nol­o­gy in the con­text of that vac­cine.

Intro­duc­ing the top­ic of Mod­er­na’s SARS Cov‑2 vac­cine as a mon­ey mak­er [9] for both Mod­er­na and as a dri­ver for the mar­ket as a whole, we note last Mon­day’s announce­ment which gen­er­at­ed a major boost in the val­ue of Mod­er­na’s stock and a strong, gen­er­al ral­ly. The lat­ter appar­ent­ly stems from opti­mism that a suc­cess­ful vac­cine will alle­vi­ate the eco­nom­ic dam­age from Covid-19.

A Mar­ket­Watch piece [10] about the rapid fluc­tu­a­tion of Mod­er­na’s stock under­scores the sig­nif­i­cance of the tim­ing of an announce­ment cast­ing Mod­er­na’s vac­cine tri­al in over­ly opti­mistic light:

  1. Mod­er­na’s CEO (Stephen Ban­cel) and CFO (Lorence Kim) both sold stock on Fri­day, in accor­dance with pre­arranged trans­ac­tions. Bear in mind, that (as dis­cussed in FTR #1130 [8]), Mod­er­na’s stock was trad­ing at $23.46 at the begin­ning of the year, and the company–which has nev­er mar­ket­ed a vaccine–was the ben­e­fi­cia­ry of $483 mil­lion dol­lars [11] in fed­er­al fund­ing ear­li­er in the year.) ” . . . . On Fri­day, Ban­cel sold 11,046 shares at a weight­ed aver­age price of $65.56 for about $724,200, as part of a pre­de­ter­mined trad­ing plan adopt­ed Dec. 28, 2018, accord­ing to a Form 4 fil­ing [12] with the Secu­ri­ties and Exchange Com­mis­sion. He also dis­posed of 1,577 shares as part of a ‘bona fide’ gift. . . . Also, on Fri­day, Kim sold 20,000 shares at a weight­ed aver­age price of $65.53 for about $1.31 mil­lion, as part of a pre­de­ter­mined trad­ing plan [13]. . . .”
  2. Kim also simul­ta­ne­ous­ly bought and sold shares of his firm for a net prof­it of $16.79 mil­lion on Mon­day, the day of an over­ly opti­mistic announce­ment by Mod­er­na. The for­tu­itous­ly timed Mod­er­na announce­ment made the fir­m’s CFO rough­ly $4 mil­lion: ” . . . . On Mon­day, he [Kim] exer­cised options to buy 241,000 shares at a weight­ed aver­age price of $12.45 for about $3 mil­lion, also as part of a pre­de­ter­mined plan. At the same time, Kim exe­cut­ed sales of 241,000 shares, at a weight­ed aver­age price of $82.12 for about $19.79 mil­lion. That means Kim net­ted about $16.79 mil­lion on the simul­ta­ne­ous buy and sale of shares. . . . with Monday’s stock price surge fol­low­ing the announce­ment of ear­ly data on its vac­cine can­di­date poten­tial­ly adding $4 mil­lion to Kim’s cof­fers. . . .”
  3. The above-ref­er­enced announce­ment by Mod­er­na led to a dra­mat­ic increase in Mod­er­na’s stock and boost­ed the mar­ket as a whole. Mod­er­na announced that evening that it would sell $1.34 bil­lion in stock to help its vac­cine oper­a­tion: ” . . . . Shares of Mod­er­na closed at a record high of $80.00 on Mon­day after the com­pa­ny released a slice of pos­i­tive inter­im clin­i­cal data from the first phase of its COVID-19 vac­cine tri­al. That night it announced it would sell $1.34 bil­lion in stock to help fund man­u­fac­tur­ing costs asso­ci­at­ed with the exper­i­men­tal COVID-19 vac­cine. . . .”
  4. Mod­er­na’s stock nose­dived at the end of the trad­ing day on Tues­day, due to a crit­i­cal arti­cle from Stat News” . . . . The stock took a nose dive on Tues­day, clos­ing at $71.67, like­ly due in some degree to a Stat News sto­ry [14] that ques­tioned a lack of clin­i­cal clar­i­ty in the data it pro­vid­ed to investors. . . .”
  5. Mod­er­na’s announce­ment was crit­i­cal­ly assessed by Stat News, which point­ed out that the results were incom­plete at best: ” . . . . In a clin­i­cal-tri­al data dis­clo­sure on Mon­day, Mod­er­na shared that eight out of 45 par­tic­i­pants in its COVID-19 vac­cine study devel­oped neu­tral­iz­ing anti­bod­ies, a deci­sion that Stat’s Helen Bran­swell described as a ‘rea­son for cau­tion.’ It didn’t share infor­ma­tion about the immune response to the exper­i­men­tal vac­cine in the remain­ing 37 par­tic­i­pants. . . .”
  6. Nonethe­less, Mod­er­na’s stock–bolstered by gov­ern­ment investment–has been on a dra­mat­ic upward swing: ” . . . . The company’s stock was up 3.8% in trad­ing on Wednes­day. Year-to-date, it has soared 270.2%, even though the com­pa­ny has no approved prod­ucts. . . .”

There are seri­ous ques­tions about the sub­stance of Mod­er­na’s state­ment [15]:

  1. Moderna’s much tout­ed report on its vaccine—which trig­gered an upsurge in the mar­kets on Monday—appears to have been incom­plete, at best, and pur­pose­ful­ly decep­tive, at worst. “ . . . . While Mod­er­na blitzed the media, it revealed very lit­tle infor­ma­tion — and most of what it did dis­close were words, not data.. . . . If you ask sci­en­tists to read a jour­nal arti­cle, they will scour data tables, not cor­po­rate state­ments. With sci­ence, num­bers speak much loud­er than words. Even the fig­ures the com­pa­ny did release don’t mean much on their own, because crit­i­cal infor­ma­tion — effec­tive­ly the key to inter­pret­ing them — was with­held. . . .
  2. Part of the rea­son for alarm and skep­ti­cism con­cerns the behav­ior of the NIAID—whose direc­tor is Antho­ny Fau­ci: “ . . . . The Nation­al Insti­tute for Aller­gy and Infec­tious Dis­eases has part­nered with Mod­er­na on this vac­cine. Sci­en­tists at NIAID made the vaccine’s con­struct, or pro­to­type, and the agency is run­ning the Phase 1 tri­al. This week’s Mod­er­na read­out came from the ear­li­est of data from the NIAID-led Phase 1. NIAID doesn’t hide its light under a bushel. The insti­tute gen­er­al­ly trum­pets its find­ings, often offer­ing direc­tor Antho­ny Fau­ci . . . or oth­er senior per­son­nel for inter­views. But NIAID did not put out a press release Mon­day and declined to pro­vide com­ment on Moderna’s announce­ment. . . .”
  3. To begin with, Moderna’s announce­ment was only sta­tis­ti­cal­ly sub­stan­tive for 8 of the 45 vol­un­teer sub­jects: “ . . . . The company’s state­ment led with the fact that all 45 sub­jects (in this analy­sis) who received dos­es of 25 micro­grams (two dos­es each), 100 micro­grams (two dos­es each), or a 250 micro­grams (one dose) devel­oped bind­ing anti­bod­ies. Lat­er, the state­ment indi­cat­ed that eight vol­un­teers — four each from the 25-micro­gram and 100-micro­gram arms — devel­oped neu­tral­iz­ing anti­bod­ies. Of the two types, these are the ones you’d real­ly want to see. We don’t know results from the oth­er 37 tri­al par­tic­i­pants. . . .”
  4. It is pos­si­ble that neu­tral­iz­ing anti­bod­ies may have been devel­oped in the 37 test sub­jects whose data was not released because the test­ing process is exact­ing. Still the state­ment war­rants cau­tion, at the least. “ . . . . This doesn’t mean that they didn’t devel­op neu­tral­iz­ing anti­bod­ies.Test­ing for neu­tral­iz­ing anti­bod­ies is more time-con­sum­ing than oth­er anti­body tests and must be done in a biose­cu­ri­ty lev­el 3 lab­o­ra­to­ry [16]. Mod­er­na dis­closed the find­ings from eight sub­jects because that’s all it had at that point. Still, it’s a rea­son for cau­tion . . . .”
  5. In addi­tion, the age of the sub­jects was not released and that is rel­e­vant. “ . . . . Sep­a­rate­ly, while the Phase 1 tri­al includ­ed healthy vol­un­teers ages 18 to 55 years, the exact ages of these eight peo­ple are unknown. If, by chance, they most­ly clus­tered around the younger end of the age spec­trum, you might expect a bet­ter response to the vac­cine than if they were most­ly from the senior end of it. And giv­en who is at high­est risk from the SARS-CoV­‑2 coro­n­avirus, pro­tect­ing old­er adults is what Covid-19 vac­cines need to do. . . .”
  6. In addi­tion, there was no data released as to the dura­bil­i­ty of the neu­tral­iz­ing anti­bod­ies. If, for the sake of argu­ment, they are not long-last­ing, the util­i­ty of the vac­cine is neg­li­gi­ble. “ . . . . The report of neu­tral­iz­ing anti­bod­ies in sub­jects who were vac­ci­nat­ed comes from blood drawn two weeks after they received their sec­ond dose of vac­cine. Two weeks. ‘That’s very ear­ly. We don’t know if those anti­bod­ies are durable,’ said Anna Durbin, a vac­cine researcher at Johns Hop­kins Uni­ver­si­ty. . . .”
  7. Still anoth­er point of contention/alarm con­cerns the vari­abil­i­ty in neu­tral­iz­ing anti­bod­ies among recov­ered patients: “ . . . . But stud­ies have shown anti­body lev­els among peo­ple who have recov­ered from the ill­ness vary enor­mous­ly; the range that may be influ­enced by the sever­i­ty of a person’s dis­ease. John ‘Jack’ Rose, a vac­cine researcher from Yale Uni­ver­si­ty, point­ed STAT to a study from Chi­na that showed that, among 175 recov­ered Covid-19 patients stud­ied, 10 had no detectable neu­tral­iz­ing anti­bod­ies. Recov­ered patients at the oth­er end of the spec­trum had real­ly high anti­body lev­els. So though the com­pa­ny said the anti­body lev­els induced by vac­cine were as good as those gen­er­at­ed by infec­tion, there’s no real way to know what that com­par­i­son means. . . .”
  8. It is less than encour­ag­ing that Mod­er­na dis­closed that more rel­e­vant data will be dis­closed in a report to be released in con­junc­tion with NIAID: “ . . . . STAT asked Mod­er­na for infor­ma­tion on the anti­body lev­els it used as a com­para­tor. The response: That will be dis­closed in an even­tu­al jour­nal arti­cle from NIAID, which is part of the Nation­al Insti­tutes of Health. . . .”
  9. Ann Durbin was struck by the word­ing of Moderna’s release: “ . . . . Durbin was struck by the word­ing of the company’s state­ment, point­ing to this sen­tence: ‘The lev­els of neu­tral­iz­ing anti­bod­ies at day 43 were at or above lev­els gen­er­al­ly seen in con­va­les­cent sera.’ ‘I thought: Gen­er­al­ly? What does that mean?’ Durbin said. Her ques­tion, for the time being, can’t be answered. . . .”
  10. Jack Rose com­ment­ed on the opaque nature of Moderna’s release: “. . . . Rose said the com­pa­ny should dis­close the infor­ma­tion. ‘When a com­pa­ny like Mod­er­na with such incred­i­bly vast resources says they have gen­er­at­ed SARS‑2 neu­tral­iz­ing anti­bod­ies in a human tri­al, I would real­ly like to see num­bers from what­ev­er assay they are using,’ he said. . . .”
  11. To date, Mod­er­na issues press releas­es, not papers that can be vet­ted by the sci­en­tif­ic com­mu­ni­ty: “ . . . . It doesn’t pub­lish on its work in sci­en­tif­ic jour­nals. What is known has been dis­closed through press releas­es. That’s not enough to gen­er­ate con­fi­dence with­in the sci­en­tif­ic com­mu­ni­ty. ‘My guess is that their num­bers are mar­gin­al or they would say more,’ Rose said about the company’s SARS‑2 vac­cine, echo­ing a sus­pi­cion that oth­ers have about some of the company’s oth­er work. ‘I do think it’s a bit of a con­cern that they haven’t pub­lished the results of any of their ongo­ing tri­als that they men­tion in their press release. They have not pub­lished any of that,’ Durbin not­ed. . . .”

After sum­ma­riz­ing [17] a high­ly tech­ni­cal arti­cle warn­ing that of the pos­si­ble con­se­quences of intro­duc­ing a SARS Cov‑2 vac­cine that gen­er­ates inad­e­quate­ly high lev­els of anti­bod­ies, we detail a 2016 STAT News arti­cle [18] about Mod­er­na high­lights a num­ber of areas of con­cern, giv­en the speed and rel­a­tive­ly opaque nature of the poten­tial intro­duc­tion of its Covid-19 vac­cine.

The financ­ing of the com­pa­ny by DARPA, and Mon­cef Slaoui’s join­ing with Four Star Gen­er­al Per­na (ele­vat­ed by the Chair­man of the Joint Chiefs of Staff, Gen­er­al Mark A. Mil­ley) are of addi­tion­al con­cern.

  1. As of 2016, Mod­er­na had the largest val­u­a­tion of any pri­vate biotech firm and for­mer employ­ees felt that Mod­er­na prized mon­ey over sci­ence. Note that, as will be reviewed lat­er in the pro­gram, its stock has risen expo­nen­tial­ly as a result of the injec­tion of hun­dreds of mil­lions of dol­lars. Bear in mind that Mod­er­na has also been under­writ­ten by DARPA. “ . . . . Mod­er­na is worth more than any oth­er pri­vate biotech in the US, and for­mer employ­ees said they felt that Ban­cel prized the company’s ever-increas­ing val­u­a­tion, now approach­ing $5 bil­lion, over its sci­ence. . . .”
  2. Mod­er­na has main­tained a cul­ture of secre­cy, which in 2016, applied to the first two prod­ucts under­go­ing phase 1 tri­als: “ . . . . Mod­er­na just moved its first two poten­tial treat­ments — both vac­cines — into human tri­als. In keep­ing with the cul­ture of secre­cy, though, exec­u­tives won’t say which dis­eases the vac­cines tar­get, and they have not list­ed the stud­ies on the pub­lic fed­er­al reg­istry, ClinicalTrials.gov. List­ing is option­al for Phase 1 tri­als, which are meant to deter­mine if a drug is safe, but most com­pa­nies vol­un­tar­i­ly dis­close their work. . . .”
  3. Pro­tein ther­a­py has been a dri­ving eco­nom­ic and ther­a­peu­tic fac­tor in the phar­ma­ceu­ti­cal busi­ness: “ . . . . For decades, com­pa­nies have endeav­ored to craft bet­ter and bet­ter pro­tein ther­a­pies, lead­ing to new treat­ments for can­cer, autoim­mune dis­or­ders, and rare dis­eases. Such ther­a­pies are cost­ly to pro­duce and have many lim­i­ta­tions, but they’ve giv­en rise to a multi­bil­lion-dol­lar indus­try. The anti-inflam­ma­to­ry Humi­ra, the world’s top drug at $14 bil­lion in sales a year, is a shin­ing exam­ple of pro­tein ther­a­py. . . .”
  4. Mod­er­na aims at doing an end run around that tech­nol­o­gy with the injec­tion of mRNA (mes­sen­ger RNA) or DNA. This is a risky tech­nol­o­gy: “ . . . . Moderna’s tech­nol­o­gy promised to sub­vert the whole field, cre­at­ing ther­a­peu­tic pro­teins inside the body instead of in man­u­fac­tur­ing plants. The key: har­ness­ing mes­sen­ger RNA, or mRNA. . . . . It’s high­ly risky. Big phar­ma com­pa­nies had tried sim­i­lar work and aban­doned it because it’s exceed­ing­ly hard to get RNA into cells with­out trig­ger­ing nasty side effects. . . . .”
  5. CEO Ban­cel has main­tained the company’s opaque pro­fes­sion­al cul­ture, mixed with high-pro­file media pro­mo­tion: “ . . . . Under Ban­cel, Mod­er­na has been loath to pub­lish its work in Sci­ence or Nature, but enthu­si­as­tic to her­ald its poten­tial on CNBC and CNN, tak­ing part in seg­ments on the world’s most dis­rup­tive com­pa­nies [19]and the poten­tial ‘cure for can­cer.’ [20] . . .”
  6. Mod­er­na had dra­con­ian atti­tude toward employ­ees from its incep­tion: “ . . . . From the begin­ning, Ban­cel made clear that Moderna’s sci­ence sim­ply had to work. And that any­one who couldn’t make it work didn’t belong. The ear­ly Mod­er­na was a chaot­ic, unpre­dictable work­place, accord­ing to for­mer employ­ees. One recalls find­ing him­self out of a job when a quick-turn­around exper­i­ment failed to pan out. Anoth­er helped train a group of new hires only to real­ize they were his replace­ments. . . .”
  7. Joe Bolen exem­pli­fied the treat­ment Mod­er­na met­ed out: “ . . . . Most stun­ning to employ­ees was the abrupt depar­ture of Joseph Bolen, who came aboard in 2013 to lead Moderna’s R&D efforts. Bolen was a big-name hire in biotech cir­cles, an expe­ri­enced chief sci­en­tif­ic offi­cer who had guid­ed Mil­len­ni­um Phar­ma­ceu­ti­cals to FDA approval for a block­buster can­cer drug. . . ‘No sci­en­tist in his right mind would leave that job unless there was some­thing wrong with the sci­ence or the per­son­nel,’ said a per­son close to the com­pa­ny at the time.’ . . .”
  8. Bolen had com­pa­ny: “ . . . . Bolen wasn’t alone. Chief Infor­ma­tion Offi­cer John Reyn­ders joined in 2013 to make Mod­er­na what he called the world’s ‘first ful­ly dig­i­tal biotech,‘ [21]only to step down a year lat­er. Michael Morin, brought in to lead Moderna’s sci­en­tif­ic efforts in can­cer in 2014, last­ed less than 18 months. As did Greg Licholai, hired in 2015 to direct the company’s projects in rare dis­eases. The lat­ter two key lead­er­ship posi­tions remain unfilled. . . .”
  9. The expla­na­tion of CFO Lorence Kim is less than reas­sur­ing from the stand­point of prod­uct safe­ty and reli­a­bil­i­ty: “ . . . . ‘We force every­one to grow with the com­pa­ny at unprece­dent­ed speed,’ Mod­er­na Chief Finan­cial Offi­cer Lorence Kim said. ‘Some peo­ple grow with the com­pa­ny; oth­ers don’t.’ . . .”
  10. Begin­ning in 2013, Mod­er­na part­nered with a series of phar­ma­ceu­ti­cal giants, includ­ing AstraZeneca, which has been select­ed to devel­op a Covid-19 vac­cine: “ . . . . That’s when Mod­er­na — which had just 25 employ­ees — signed a stag­ger­ing $240 mil­lion part­ner­ship with UK phar­ma­ceu­ti­cal giant AstraZeneca. It was the most mon­ey phar­ma had ever spent on drugs that had not yet been test­ed in humans. . . .”
  11. The firm has been lav­ish­ly cap­i­tal­ized: “ . . . . In ear­ly 2015, Mod­er­na dis­closed a $450 mil­lion financ­ing round, the largest ever for a pri­vate biotech com­pa­ny. This month, the com­pa­ny broke its own record, rais­ing anoth­er $474 mil­lion. . . . Though it has yet to reveal data from a sin­gle clin­i­cal tri­al, Mod­er­na is now val­ued at $4.7 bil­lion, accord­ing to Pitch­book. . . .”
  12. Ini­tial­ly, Mod­er­na aimed at devel­op­ing prod­ucts that would be admin­is­tered for a peri­od of years: “ . . . . From the start, Mod­er­na her­ald­ed its abil­i­ty to pro­duce pro­teins with­in cells, which could open up a world of ther­a­peu­tic tar­gets unreach­able by con­ven­tion­al drugs. The most rev­o­lu­tion­ary treat­ments, which could chal­lenge the multi­bil­lion-dol­lar mar­ket for pro­tein ther­a­py, would involve repeat­ed dos­es of mRNA over many years, so a patient’s body con­tin­ued to pro­duce pro­teins to keep dis­ease at bay. . . .”
  13. Instead of pro­duc­ing treat­ments that would be admin­is­tered over a peri­od of years, the com­pa­ny focused on vac­cines: “ . . . . But Moderna’s first human tri­als aren’t so ambi­tious, focus­ing instead on the crowd­ed field of vac­cines, where the com­pa­ny has only been work­ing since 2014. . . . The choice to pri­or­i­tize vac­cines came as a dis­ap­point­ment to many in the com­pa­ny, accord­ing to a for­mer man­ag­er. The plan had been to rad­i­cal­ly dis­rupt the biotech indus­try, the man­ag­er said, so ‘why would you start with a clin­i­cal pro­gram that has very lim­it­ed upside and lots of com­pe­ti­tion?’” . . . .”
  14. The answer to Moderna’s focus on vac­cines may be due to issues of prod­uct safe­ty: “ . . . Deliv­ery — actu­al­ly get­ting RNA into cells — has long bedev­iled the whole field. On their own, RNA mol­e­cules have a hard time reach­ing their tar­gets. They work bet­ter if they’re wrapped up in a deliv­ery mech­a­nism, such as nanopar­ti­cles made of lipids. But those nanopar­ti­cles can lead to dan­ger­ous side effects, espe­cial­ly if a patient has to take repeat­ed dos­es over months or years. . . .”
  15. Vac­cines will only admin­is­ter mRNA at the time of vac­ci­na­tion, rather than over a long peri­od of time: “ . . . . ‘I would say that mRNA is bet­ter suit­ed for dis­eases where treat­ment for short dura­tion is suf­fi­cient­ly cura­tive, so the tox­i­c­i­ties caused by deliv­ery mate­ri­als are less like­ly to occur,’ said Katal­in Karikó, a pio­neer in the field who serves as a vice pres­i­dent at BioN­Tech. . . That makes vac­cines the low­est hang­ing fruit in mRNA, said Franz-Wern­er Haas, CureVac’s chief cor­po­rate offi­cer. ‘From our point of view, it’s obvi­ous why [Mod­er­na] start­ed there,’ he said.’ . . .”
  16. Moderna’s expla­na­tion for its focus on vac­cines is not reassuring—the speed with which it can pro­ceed to human tri­als. The firm’s secre­cy has gen­er­at­ed alarm: “ . . . . Mod­er­na said it pri­or­i­tized vac­cines because they pre­sent­ed the fastest path to human tri­als, not because of set­backs with oth­er projects. ‘The notion that [Mod­er­na] ran into dif­fi­cul­ties isn’t borne in real­i­ty,’ said [Chair­man of the board Noubar] Afeyan. But this is where Moderna’s secre­cy comes into play: Until there’s pub­lished data, only the com­pa­ny and its part­ners know what the data show. Every­one out­side is left guess­ing — and, in some cas­es, wor­ry­ing that Mod­er­na won’t live up to its hype. . . .”
  17. Mod­er­na applies soft­ware and a busi­ness mod­el derived from Tes­la, Ama­zon and Uber: “ . . . . Mod­er­na has pio­neered an auto­mat­ed sys­tem mod­eled on the soft­ware Tes­la uses to man­age orders, Ban­cel said: Sci­en­tists sim­ply enter the pro­tein they want a cell to express, and testable mRNA arrives with­in weeks. . . . That has always been part of the plan, for­mer employ­ees said, point­ing to Bancel’s fas­ci­na­tion with the tech indus­try. Uber and Ama­zon were not the first to come up with their respec­tive busi­ness ideas, but they were the ones that built enough scale to ward off com­pe­ti­tion. And Mod­er­na is posi­tion­ing itself to do the same in mRNA. . . .”
[22]

Mon­cef Slaoui

Mon­cef Slaoui’s  opti­mistic state­ment on the Fri­day [23] before the Mon­day announce­ment, presents impor­tant con­text for Moderna’s Mon­day announce­ment. That announce­ment moved mar­kets based on inad­e­quate data. “Oper­a­tion Warp Speed” (head­ed by Slaoui) sug­gests that can­di­date Trump  is very inter­est­ed in those pre­lim­i­nary results as well. 

Eliz­a­beth War­ren scored Slaoui’s con­flict of interest–a con­sid­er­a­tion that will be dis­cussed at length: ” . . . . Fol­low­ing Mon­cef Slaoui’s Fri­day appoint­ment as a co-leader of the Warp Speed pro­gram, he’s set to sell about 155,000 shares in Mod­er­na, accord­ing to press reports. They were worth an esti­mat­ed $10 mil­lion Fri­day, but after Monday’s stock run-up on pos­i­tive ear­ly data, they’re now val­ued at about $12.4 mil­lion. . . . Fol­low­ing Slaoui’s selec­tion, Sen. Eliz­a­beth War­ren tweet­ed [24] that it’s a ‘huge con­flict of inter­est’ for him to keep the Mod­er­na stock as he assumes the new role. She said he should ‘divest imme­di­ate­ly.’ In a now-delet­ed tweet, Slaoui respond­ed that there ‘is no con­flict of inter­est, and there nev­er has been,’ Busi­ness Insid­er reports [25]. . . .”

Even after agree­ing to sell his Mod­er­na stock, Slaoui’s invest­ments raise alarm­ing ques­tions [26]–note that he is a “ven­ture cap­i­tal­ist” and a long­time for­mer exec­u­tive at Glaxo-Smithk­line:

  1. The cir­cum­stances of his appoint­ment will per­mit him to avoid scruti­ny: ” . . . . In agree­ing to accept the posi­tion, Dr. Slaoui did not come on board as a gov­ern­ment employ­ee. Instead, he is on a con­tract, receiv­ing $1 for his ser­vice. That leaves him exempt from fed­er­al dis­clo­sure rules that would require him to list his out­side posi­tions, stock hold­ings and oth­er poten­tial con­flicts. And the con­tract posi­tion is not sub­ject to the same con­flict-of-inter­est laws and reg­u­la­tions that exec­u­tive branch employ­ees must fol­low. . . .”
  2. He will retain a great deal of Glaxo-Smithk­line stock: ” . . . . He did not say how much his GSK shares were worth. When he left the com­pa­ny in 2017, he held about [500,000 in West­ern Print Edi­tion] 240,000 shares and share equiv­a­lents, accord­ing to the drug company’s annu­al report and an analy­sis by the exec­u­tive com­pen­sa­tion firm Equi­lar. . . .”
  3. Fur­ther analy­sis of Slaoui’s posi­tion deep­ens con­cern about the integri­ty of the process: ” . . . . ‘This is basi­cal­ly absurd,’ said Vir­ginia Can­ter, who is chief ethics coun­sel for Cit­i­zens for Respon­si­bil­i­ty and Ethics in Wash­ing­ton. ‘It allows for no pub­lic scruti­ny of his con­flicts of inter­est.’ Ms. Can­ter also said fed­er­al law barred gov­ern­ment con­trac­tors from super­vis­ing gov­ern­ment employ­ees. . . . Ms. Can­ter, a for­mer ethics lawyer in the Oba­ma and Clin­ton admin­is­tra­tions, the Secu­ri­ties and Exchange Com­mis­sion and oth­er agen­cies, point­ed out that GSK’s vac­cine can­di­date with Sanofi could wind up com­pet­ing with oth­er man­u­fac­tur­ers vying for gov­ern­ment approval and sup­port. ‘If he retains stock in com­pa­nies that are invest­ing in the devel­op­ment of a vac­cine, and he’s involved in over­see­ing this process to select the safest vac­cine to com­bat Covid-19, regard­less of how won­der­ful a per­son he is, we can’t be con­fi­dent of the integri­ty of any process in which he is involved,’ Ms. Can­ter said. In addi­tion, his affil­i­a­tion with Medicxi could com­pli­cate mat­ters: Two of its investors [27] are GSK and a divi­sion of John­son & John­son, which is also devel­op­ing a poten­tial vac­cine. . . .”

Mod­er­na stands to make bil­lions of dol­lars [28] if their vac­cine goes to mar­ket:

  1. ” . . . . What investors are bet­ting on, for Mod­er­na and oth­ers devel­op­ing vac­cines against the SARS-CoV­‑2 virus, is that a third of the devel­oped world’s pop­u­la­tion will get vac­ci­nat­ed every year. That could amount to a $10 bil­lion annu­al busi­ness, at an esti­mat­ed price of $30 per vac­ci­na­tion. . . .”
  2. ” . . . . Mor­gan Stan­ley ana­lysts this past week­end sug­gest­ed that pric­ing might start at $5 to $10 a dose dur­ing this first pan­dem­ic cri­sis, then rise to a range of $13 to $30 for pre­ven­tive dos­es in future years. But at BMO Cap­i­tal Mar­kets, ana­lyst George Farmer spec­u­lat­ed that Mod­er­na could start charg­ing $125 per treat­ment in the U.S. mar­ket and raise that price over time to $200. . . . ”

We close the pro­gram with a reminder of the extent to which fed­er­al fund­ing [29] dri­ves the val­ue of Mod­er­na: ” . . . . ‘Instead of wait­ing for the data and then scal­ing up with man­u­fac­tur­ing process … we can make as many dos­es as we can. We are doing both in par­al­lel,’ he said. The com­pa­ny plans to hire [30] up to 150 peo­ple to sup­port the effort. Ban­cel said the com­pa­ny ‘couldn’t have done this’ with­out the fund­ing com­mit­ment from the Bio­med­ical Advanced Research and Devel­op­ment Author­i­ty, which is part of the Depart­ment of Health and Human Ser­vices. . . .”

1a. We begin by Intro­duc­ing the top­ic of Mod­er­na’s SARS Cov‑2 vac­cine as a mon­ey mak­er [9] for both Mod­er­na and as a dri­ver for the mar­ket as a whole, we note last Mon­day’s announce­ment which gen­er­at­ed a major boost in the val­ue of Mod­er­na’s stock and a strong, gen­er­al ral­ly. The lat­ter appar­ent­ly stems from opti­mism that a sucess­ful vac­cine will alle­vi­ate the eco­nom­ic dam­age from Covid-19:

“Vaccine’s Ear­ly Test Result Ele­vates Hopes and Stocks” by Denise Grady; The New York Times; 5/19/2020; pp. A1-A9 [West­ern Edi­tion]. [9]

. . . . The promis­ing ear­ly news sent Moderna’s stock soar­ing by more than 25 per­cent on Mon­day after­noon and helped dri­ve Wall Street to its best day in six weeks. . . . Trad­ing on Mon­day had all of the char­ac­ter­is­tics of a ral­ly focused on prospects for a return to nor­mal: The S&P 500 rose more than 3 per­cent; stock bench­marks in Europe were 4 per­cent to 6 per­cent high­er; and oil prices also jumped. Among the best per­form­ers in the S&P 500 were trav­el-relat­ed com­pa­nies, like Unit­ed Air­lines, Expe­dia Group and Mar­riott Inter­na­tion­al. . . .

1b. A Mar­ket­Watch piece [10] about the rapid fluc­tu­a­tion of Mod­er­na’s stock under­scores the sig­nif­i­cance of the tim­ing of an announce­ment cast­ing Mod­er­na’s vac­cine tri­al in over­ly opti­mistic light:

  1. Mod­er­na’s CEO (Stephen Ban­cel) and CFO (Lorence Kim) both sold stock on Fri­day, in accor­dance with pre­arranged trans­ac­tions. Bear in mind, that (as dis­cussed in FTR #1130 [8]), Mod­er­na’s stock was trad­ing at $23.46 at the begin­ning of the year, and the company–which has nev­er mar­ket­ed a vaccine–was the ben­e­fi­cia­ry of $483 mil­lion dol­lars [11] in fed­er­al fund­ing ear­li­er in the year.) ” . . . . On Fri­day, Ban­cel sold 11,046 shares at a weight­ed aver­age price of $65.56 for about $724,200, as part of a pre­de­ter­mined trad­ing plan adopt­ed Dec. 28, 2018, accord­ing to a Form 4 fil­ing [12] with the Secu­ri­ties and Exchange Com­mis­sion. He also dis­posed of 1,577 shares as part of a ‘bona fide’ gift. . . . Also, on Fri­day, Kim sold 20,000 shares at a weight­ed aver­age price of $65.53 for about $1.31 mil­lion, as part of a pre­de­ter­mined trad­ing plan [13]. . . .”
  2. Kim also simul­ta­ne­ous­ly bought and sold shares of his firm for a net prof­it of $16.79 mil­lion on Mon­day, the day of an over­ly opti­mistic announce­ment by Mod­er­na. The for­tu­itous­ly timed Mod­er­na announce­ment made the fir­m’s CFO rough­ly $4 mil­lion: ” . . . . On Mon­day, he [Kim] exer­cised options to buy 241,000 shares at a weight­ed aver­age price of $12.45 for about $3 mil­lion, also as part of a pre­de­ter­mined plan. At the same time, Kim exe­cut­ed sales of 241,000 shares, at a weight­ed aver­age price of $82.12 for about $19.79 mil­lion. That means Kim net­ted about $16.79 mil­lion on the simul­ta­ne­ous buy and sale of shares. . . . with Monday’s stock price surge fol­low­ing the announce­ment of ear­ly data on its vac­cine can­di­date poten­tial­ly adding $4 mil­lion to Kim’s cof­fers. . . .”
  3. The above-ref­er­enced announce­ment by Mod­er­na led to a dra­mat­ic increase in Mod­er­na’s stock and boost­ed the mar­ket as a whole. Mod­er­na announced that evening that it would sell $1.34 bil­lion in stock to help its vac­cine oper­a­tion: ” . . . . Shares of Mod­er­na closed at a record high of $80.00 on Mon­day after the com­pa­ny released a slice of pos­i­tive inter­im clin­i­cal data from the first phase of its COVID-19 vac­cine tri­al. That night it announced it would sell $1.34 bil­lion in stock to help fund man­u­fac­tur­ing costs asso­ci­at­ed with the exper­i­men­tal COVID-19 vac­cine. . . .”
  4. Mod­er­na’s stock nose­dived at the end of the trad­ing day on Tues­day, due to a crit­i­cal arti­cle from Stat News” . . . . The stock took a nose dive on Tues­day, clos­ing at $71.67, like­ly due in some degree to a Stat News sto­ry [14] that ques­tioned a lack of clin­i­cal clar­i­ty in the data it pro­vid­ed to investors. . . .”
  5. Mod­er­na’s announce­ment was crit­i­cal­ly assessed by Stat News, which point­ed out that the results were incom­plete at best: ” . . . . In a clin­i­cal-tri­al data dis­clo­sure on Mon­day, Mod­er­na shared that eight out of 45 par­tic­i­pants in its COVID-19 vac­cine study devel­oped neu­tral­iz­ing anti­bod­ies, a deci­sion that Stat’s Helen Bran­swell described as a ‘rea­son for cau­tion.’ It didn’t share infor­ma­tion about the immune response to the exper­i­men­tal vac­cine in the remain­ing 37 par­tic­i­pants. . . .”
  6. Nonethe­less, Mod­er­na’s stock–bolstered by gov­ern­ment investment–has been on a dra­mat­ic upward swing: ” . . . . The company’s stock was up 3.8% in trad­ing on Wednes­day. Year-to-date, it has soared 270.2%, even though the com­pa­ny has no approved prod­ucts. . . .”

“Moderna’s stock soars, then dips, after ques­tions arise around the lim­it­ed data shared about its COVID-19 vac­cine” by Tomi Kil­go­re and Jaimy Lee; Mar­ket­Watch; 05/20/2020 [10]

Wall Street ana­lysts large­ly view the clin­i­cal-tri­al data released by Mod­er­na, how­ev­er lim­it­ed, as a pos­i­tive

Investors in Mod­er­na Inc., the pre­clin­i­cal biotech­nol­o­gy com­pa­ny devel­op­ing one of the front-run­ning COVID-19 vac­cine can­di­dates in the U.S., may be fac­ing a volatile ride through the clin­i­cal tri­al process.

Shares of Mod­er­na closed at a record high of $80.00 on Mon­day after the com­pa­ny released a slice of pos­i­tive inter­im clin­i­cal data from the first phase of its COVID-19 vac­cine tri­al. That night it announced it would sell $1.34 bil­lion in stock to help fund man­u­fac­tur­ing costs asso­ci­at­ed with the exper­i­men­tal COVID-19 vac­cine. The stock took a nose dive on Tues­day, clos­ing at $71.67, like­ly due in some degree to a Stat News sto­ry [14] that ques­tioned a lack of clin­i­cal clar­i­ty in the data it pro­vid­ed to investors.

The company’s stock was up 3.8% in trad­ing on Wednes­day. Year-to-date, it has soared 270.2%, even though the com­pa­ny has no approved prod­ucts. In 2019, it had $60 mil­lion in rev­enue that came from col­lab­o­ra­tions and grants.

In a clin­i­cal-tri­al data dis­clo­sure on Mon­day, Mod­er­na shared that eight out of 45 par­tic­i­pants in its COVID-19 vac­cine study devel­oped neu­tral­iz­ing anti­bod­ies, a deci­sion that Stat’s Helen Bran­swell described as a “rea­son for cau­tion.” It didn’t share infor­ma­tion about the immune response to the exper­i­men­tal vac­cine in the remain­ing 37 par­tic­i­pants.

Mod­er­na, how­ev­er, said that the full data from the tri­al will be pub­lished by the Nation­al Insti­tute for Aller­gy and Infec­tious Dis­eases (NIAID), its spon­sor for the study.

The com­pa­ny had also already dis­closed that the Food and Drug Admin­is­tra­tion (FDA) has giv­en the go-ahead for the com­pa­ny to pro­ceed with the sec­ond phase of the clin­i­cal tri­al for its mRNA vac­cine can­di­date, set to begin before the end of June.

Despite the crit­ics cit­ed in the Stat News arti­cle, Wall Street ana­lysts large­ly view the clin­i­cal-tri­al data released by Mod­er­na, how­ev­er lim­it­ed, as a pos­i­tive.

“While sam­ples are not yet avail­able for remain­ing par­tic­i­pants, and we lack specifics on the exact lev­els of bind­ing anti­bod­ies, we view this data as demon­stra­tive of ear­ly signs of effi­ca­cy,” Gold­man Sachs ana­lysts wrote in an investor note on Mon­day.

Med­ical experts and ana­lysts have also raised ques­tions about the lack of com­plete data from Gilead Sci­ences Inc.’s late-stage study for remde­sivir, which was also con­duct­ed with the NIAID.) So far, only the topline results from that tri­al have been shared pub­licly, though that was enough to inform the emer­gency use autho­riza­tion [31] grant­ed by the FDA ear­li­er this month, at least accord­ing to the FDA’s let­ter announc­ing the EUA.

“We need to see all that data, the pub­li­ca­tion,” Dr. Eric Topol, a car­di­ol­o­gist and direc­tor of the Scripps Research Trans­la­tion­al Insti­tute, said by email on May 1. “But I do believe the drug has effi­ca­cy based on what we now know, it’s just not that potent.”

Beyond lin­ger­ing ques­tions about access to the com­plete Phase 1 clin­i­cal tri­al data set for the inves­ti­ga­tion­al vac­cine, Moderna’s splashy offer­ing on Mon­day night aim­ing to sell about $1.3 bil­lion in stock may also have con­tributed to the dive on Tues­day.

The com­pa­ny dis­closed late Tues­day that Chief Exec­u­tive Stéphane Ban­cel and Chief Finan­cial Offi­cer Lorence Kim sold stock recent­ly, with Monday’s stock price surge fol­low­ing the announce­ment of ear­ly data on its vac­cine can­di­date poten­tial­ly adding $4 mil­lion to Kim’s cof­fers.

On Fri­day, Ban­cel sold 11,046 shares at a weight­ed aver­age price of $65.56 for about $724,200, as part of a pre­de­ter­mined trad­ing plan adopt­ed Dec. 28, 2018, accord­ing to a Form 4 fil­ing [12] with the Secu­ri­ties and Exchange Com­mis­sion. He also dis­posed of 1,577 shares as part of a “bona fide” gift.

Also, on Fri­day, Kim sold 20,000 shares at a weight­ed aver­age price of $65.53 for about $1.31 mil­lion, as part of a pre­de­ter­mined trad­ing plan [13]On Mon­day, he exer­cised options to buy 241,000 shares at a weight­ed aver­age price of $12.45 for about $3 mil­lion, also as part of a pre­de­ter­mined plan. At the same time, Kim exe­cut­ed sales of 241,000 shares, at a weight­ed aver­age price of $82.12 for about $19.79 mil­lion. That means Kim net­ted about $16.79 mil­lion on the simul­ta­ne­ous buy and sale of shares.

If Kim had exe­cut­ed Monday’s trades on Fri­day, before the coro­n­avirus vac­cine-relat­ed stock ral­ly, he might have net­ted $12.79 mil­lion, or about $4 mil­lion less.

Mor­gan Stan­ley ana­lysts on Wednes­day set a price tar­get of $90.00 for Mod­er­na, not­ing that they expect the com­pa­ny will sell an esti­mat­ed 1.5 bil­lion dos­es dur­ing the pan­dem­ic and about 150 mil­lion dos­es each year after that. “We are pos­i­tive on the ear­ly data,” they wrote.

Moderna’s mar­ket cap­i­tal­iza­tion is rough­ly $27.4 bil­lion, up from about $6.4 bil­lion on Jan. 2.

The S&P 500 is down 9.3% year-to-date.

2a. There are seri­ous ques­tions about the sub­stance of Mod­er­na’s state­ment [15]:

  1. Moderna’s much tout­ed report on its vaccine—which trig­gered an upsurge in the mar­kets on Monday—appears to have been incom­plete, at best, and pur­pose­ful­ly decep­tive, at worst. “ . . . . While Mod­er­na blitzed the media, it revealed very lit­tle infor­ma­tion — and most of what it did dis­close were words, not data.. . . . If you ask sci­en­tists to read a jour­nal arti­cle, they will scour data tables, not cor­po­rate state­ments. With sci­ence, num­bers speak much loud­er than words. Even the fig­ures the com­pa­ny did release don’t mean much on their own, because crit­i­cal infor­ma­tion — effec­tive­ly the key to inter­pret­ing them — was with­held. . . .
  2. Part of the rea­son for alarm and skep­ti­cism con­cerns the behav­ior of the NIAID—whose direc­tor is Antho­ny Fau­ci: “ . . . . The Nation­al Insti­tute for Aller­gy and Infec­tious Dis­eases has part­nered with Mod­er­na on this vac­cine. Sci­en­tists at NIAID made the vaccine’s con­struct, or pro­to­type, and the agency is run­ning the Phase 1 tri­al. This week’s Mod­er­na read­out came from the ear­li­est of data from the NIAID-led Phase 1. NIAID doesn’t hide its light under a bushel. The insti­tute gen­er­al­ly trum­pets its find­ings, often offer­ing direc­tor Antho­ny Fau­ci . . . or oth­er senior per­son­nel for inter­views. But NIAID did not put out a press release Mon­day and declined to pro­vide com­ment on Moderna’s announce­ment. . . .”
  3. To begin with, Moderna’s announce­ment was only sta­tis­ti­cal­ly sub­stan­tive for 8 of the 45 vol­un­teer sub­jects: “ . . . . The company’s state­ment led with the fact that all 45 sub­jects (in this analy­sis) who received dos­es of 25 micro­grams (two dos­es each), 100 micro­grams (two dos­es each), or a 250 micro­grams (one dose) devel­oped bind­ing anti­bod­ies. Lat­er, the state­ment indi­cat­ed that eight vol­un­teers — four each from the 25-micro­gram and 100-micro­gram arms — devel­oped neu­tral­iz­ing anti­bod­ies. Of the two types, these are the ones you’d real­ly want to see. We don’t know results from the oth­er 37 tri­al par­tic­i­pants. . . .”
  4. It is pos­si­ble that neu­tral­iz­ing anti­bod­ies may have been devel­oped in the 37 test sub­jects whose data was not released because the test­ing process is exact­ing. Still the state­ment war­rants cau­tion, at the least. “ . . . . This doesn’t mean that they didn’t devel­op neu­tral­iz­ing anti­bod­ies.Test­ing for neu­tral­iz­ing anti­bod­ies is more time-con­sum­ing than oth­er anti­body tests and must be done in a biose­cu­ri­ty lev­el 3 lab­o­ra­to­ry [16]. Mod­er­na dis­closed the find­ings from eight sub­jects because that’s all it had at that point. Still, it’s a rea­son for cau­tion . . . .”
  5. In addi­tion, the age of the sub­jects was not released and that is rel­e­vant. “ . . . . Sep­a­rate­ly, while the Phase 1 tri­al includ­ed healthy vol­un­teers ages 18 to 55 years, the exact ages of these eight peo­ple are unknown. If, by chance, they most­ly clus­tered around the younger end of the age spec­trum, you might expect a bet­ter response to the vac­cine than if they were most­ly from the senior end of it. And giv­en who is at high­est risk from the SARS-CoV­‑2 coro­n­avirus, pro­tect­ing old­er adults is what Covid-19 vac­cines need to do. . . .”
  6. In addi­tion, there was no data released as to the dura­bil­i­ty of the neu­tral­iz­ing anti­bod­ies. If, for the sake of argu­ment, they are not long-last­ing, the util­i­ty of the vac­cine is neg­li­gi­ble. “ . . . . The report of neu­tral­iz­ing anti­bod­ies in sub­jects who were vac­ci­nat­ed comes from blood drawn two weeks after they received their sec­ond dose of vac­cine. Two weeks. ‘That’s very ear­ly. We don’t know if those anti­bod­ies are durable,’ said Anna Durbin, a vac­cine researcher at Johns Hop­kins Uni­ver­si­ty. . . .”
  7. Still anoth­er point of contention/alarm con­cerns the vari­abil­i­ty in neu­tral­iz­ing anti­bod­ies among recov­ered patients: “ . . . . But stud­ies have shown anti­body lev­els among peo­ple who have recov­ered from the ill­ness vary enor­mous­ly; the range that may be influ­enced by the sever­i­ty of a person’s dis­ease. John ‘Jack’ Rose, a vac­cine researcher from Yale Uni­ver­si­ty, point­ed STAT to a study from Chi­na that showed that, among 175 recov­ered Covid-19 patients stud­ied, 10 had no detectable neu­tral­iz­ing anti­bod­ies. Recov­ered patients at the oth­er end of the spec­trum had real­ly high anti­body lev­els. So though the com­pa­ny said the anti­body lev­els induced by vac­cine were as good as those gen­er­at­ed by infec­tion, there’s no real way to know what that com­par­i­son means. . . .”
  8. It is less than encour­ag­ing that Mod­er­na dis­closed that more rel­e­vant data will be dis­closed in a report to be released in con­junc­tion with NIAID: “ . . . . STAT asked Mod­er­na for infor­ma­tion on the anti­body lev­els it used as a com­para­tor. The response: That will be dis­closed in an even­tu­al jour­nal arti­cle from NIAID, which is part of the Nation­al Insti­tutes of Health. . . .”
  9. Ann Durbin was struck by the word­ing of Moderna’s release: “ . . . . Durbin was struck by the word­ing of the company’s state­ment, point­ing to this sen­tence: ‘The lev­els of neu­tral­iz­ing anti­bod­ies at day 43 were at or above lev­els gen­er­al­ly seen in con­va­les­cent sera.’ ‘I thought: Gen­er­al­ly? What does that mean?’ Durbin said. Her ques­tion, for the time being, can’t be answered. . . .”
  10. Jack Rose com­ment­ed on the opaque nature of Moderna’s release: “. . . . Rose said the com­pa­ny should dis­close the infor­ma­tion. ‘When a com­pa­ny like Mod­er­na with such incred­i­bly vast resources says they have gen­er­at­ed SARS‑2 neu­tral­iz­ing anti­bod­ies in a human tri­al, I would real­ly like to see num­bers from what­ev­er assay they are using,’ he said. . . .”
  11. To date, Mod­er­na issues press releas­es, not papers that can be vet­ted by the sci­en­tif­ic com­mu­ni­ty: “ . . . . It doesn’t pub­lish on its work in sci­en­tif­ic jour­nals. What is known has been dis­closed through press releas­es. That’s not enough to gen­er­ate con­fi­dence with­in the sci­en­tif­ic com­mu­ni­ty. ‘My guess is that their num­bers are mar­gin­al or they would say more,’ Rose said about the company’s SARS‑2 vac­cine, echo­ing a sus­pi­cion that oth­ers have about some of the company’s oth­er work. ‘I do think it’s a bit of a con­cern that they haven’t pub­lished the results of any of their ongo­ing tri­als that they men­tion in their press release. They have not pub­lished any of that,’ Durbin not­ed. . . .”

“Vac­cine experts say Mod­er­na didn’t pro­duce data crit­i­cal to assess­ing Covid-19 vac­cine” by Helen Bran­swell; Stat News; 05/19/2020 [15]

Heavy hearts soared Mon­day with news that Moderna’s Covid-19 vac­cine can­di­date — the fron­trun­ner in the Amer­i­can mar­ket — seemed to be gen­er­at­ing an immune response [32] in Phase 1 tri­al sub­jects. The company’s stock val­u­a­tion also surged [33], hit­ting $29 bil­lion, an aston­ish­ing feat for a com­pa­ny that cur­rent­ly sells zero prod­ucts.

But was there good rea­son for so much enthu­si­asm? Sev­er­al vac­cine experts asked by STAT con­clud­ed that, based on the infor­ma­tion made avail­able by the Cam­bridge, Mass.-based com­pa­ny, there’s real­ly no way to know how impres­sive — or not — the vac­cine may be.

While Mod­er­na blitzed the media, it revealed very lit­tle infor­ma­tion — and most of what it did dis­close were words, not data. That’s impor­tant: If you ask sci­en­tists to read a jour­nal arti­cle, they will scour data tables, not cor­po­rate state­ments. With sci­ence, num­bers speak much loud­er than words.

Even the fig­ures the com­pa­ny did release don’t mean much on their own, because crit­i­cal infor­ma­tion — effec­tive­ly the key to inter­pret­ing them — was with­held.

The silence of the NIAID

The Nation­al Insti­tute for Aller­gy and Infec­tious Dis­eases has part­nered with Mod­er­na on this vac­cine. Sci­en­tists at NIAID made the vaccine’s con­struct, or pro­to­type, and the agency is run­ning the Phase 1 tri­al. This week’s Mod­er­na read­out came from the ear­li­est of data from the NIAID-led Phase 1.

NIAID doesn’t hide its light under a bushel. The insti­tute gen­er­al­ly trum­pets its find­ings, often offer­ing direc­tor Antho­ny Fau­ci — who, fair enough, is pret­ty busy these days — or oth­er senior per­son­nel for inter­views.

But NIAID did not put out a press release Mon­day and declined to pro­vide com­ment on Moderna’s announce­ment.

The n = 8 thing

The company’s state­ment led with the fact that all 45 sub­jects (in this analy­sis) who received dos­es of 25 micro­grams (two dos­es each), 100 micro­grams (two dos­es each), or a 250 micro­grams (one dose) devel­oped bind­ing anti­bod­ies.

Lat­er, the state­ment indi­cat­ed that eight vol­un­teers — four each from the 25-micro­gram and 100-micro­gram arms — devel­oped neu­tral­iz­ing anti­bod­ies. Of the two types, these are the ones you’d real­ly want to see.

We don’t know results from the oth­er 37 tri­al par­tic­i­pants. This doesn’t mean that they didn’t devel­op neu­tral­iz­ing anti­bod­ies. Test­ing for neu­tral­iz­ing anti­bod­ies is more time-con­sum­ing than oth­er anti­body tests and must be done in a biose­cu­ri­ty lev­el 3 lab­o­ra­to­ry [16]. Mod­er­na dis­closed the find­ings from eight sub­jects because that’s all it had at that point. Still, it’s a rea­son for cau­tion.

Sep­a­rate­ly, while the Phase 1 tri­al includ­ed healthy vol­un­teers ages 18 to 55 years, the exact ages of these eight peo­ple are unknown. If, by chance, they most­ly clus­tered around the younger end of the age spec­trum, you might expect a bet­ter response to the vac­cine than if they were most­ly from the senior end of it. And giv­en who is at high­est risk from the SARS-CoV­‑2 coro­n­avirus, pro­tect­ing old­er adults is what Covid-19 vac­cines need to do.

There’s no way to know how durable the response will be

The report of neu­tral­iz­ing anti­bod­ies in sub­jects who were vac­ci­nat­ed comes from blood drawn two weeks after they received their sec­ond dose of vac­cine.

Two weeks.

“That’s very ear­ly. We don’t know if those anti­bod­ies are durable,” said Anna Durbin, a vac­cine researcher at Johns Hop­kins Uni­ver­si­ty.

There’s no real way to con­tex­tu­al­ize the find­ings

Mod­er­na stat­ed that the anti­body lev­els seen were on a par with — or greater than, in the case of the 100-micro­gram dose — those seen in peo­ple who have recov­ered from Covid-19 infec­tion.

But stud­ies have shown anti­body lev­els among peo­ple who have recov­ered from the ill­ness vary enor­mous­ly; the range that may be influ­enced by the sever­i­ty of a person’s dis­ease. John “Jack” Rose, a vac­cine researcher from Yale Uni­ver­si­ty, point­ed STAT to a study from Chi­na that showed that, among 175 recov­ered Covid-19 patients stud­ied, 10 had no detectable neu­tral­iz­ing anti­bod­ies. Recov­ered patients at the oth­er end of the spec­trum had real­ly high anti­body lev­els.

So though the com­pa­ny said the anti­body lev­els induced by vac­cine were as good as those gen­er­at­ed by infec­tion, there’s no real way to know what that com­par­i­son means.

STAT asked Mod­er­na for infor­ma­tion on the anti­body lev­els it used as a com­para­tor. The response: That will be dis­closed in an even­tu­al jour­nal arti­cle from NIAID, which is part of the Nation­al Insti­tutes of Health.

“The con­va­les­cent sera lev­els are not being detailed in our data read­out, but would be expect­ed in a down­stream full data expo­si­tion with NIH and its aca­d­e­m­ic col­lab­o­ra­tors,” Colleen Hussey, the company’s senior man­ag­er for cor­po­rate com­mu­ni­ca­tions, said in an email.

Durbin was struck by the word­ing of the company’s state­ment, point­ing to this sen­tence: “The lev­els of neu­tral­iz­ing anti­bod­ies at day 43 were at or above lev­els gen­er­al­ly seen in con­va­les­cent sera.”

“I thought: Gen­er­al­ly? What does that mean?” Durbin said. Her ques­tion, for the time being, can’t be answered.

Rose said the com­pa­ny should dis­close the infor­ma­tion. “When a com­pa­ny like Mod­er­na with such incred­i­bly vast resources says they have gen­er­at­ed SARS‑2 neu­tral­iz­ing anti­bod­ies in a human tri­al, I would real­ly like to see num­bers from what­ev­er assay they are using,” he said.

Moderna’s approach to dis­clo­sure

The com­pa­ny has not yet brought a vac­cine to mar­ket, but it has a vari­ety of vac­cines for infec­tious dis­eases in its pipeline [34]. It doesn’t pub­lish on its work in sci­en­tif­ic jour­nals. What is known has been dis­closed through press releas­es. That’s not enough to gen­er­ate con­fi­dence with­in the sci­en­tif­ic com­mu­ni­ty.

“My guess is that their num­bers are mar­gin­al or they would say more,” Rose said about the company’s SARS‑2 vac­cine, echo­ing a sus­pi­cion that oth­ers have about some of the company’s oth­er work.

“I do think it’s a bit of a con­cern that they haven’t pub­lished the results of any of their ongo­ing tri­als that they men­tion in their press release. They have not pub­lished any of that,” Durbin not­ed.

Still, she char­ac­ter­ized her­self as “cau­tious­ly opti­mistic” based on what the com­pa­ny has said so far.

“I would like to see the data to make my own inter­pre­ta­tion of the data. But I think it is at least encour­ag­ing that we’ve seen immune respons­es with this RNA vac­cine that we haven’t seen with pre­vi­ous RNA vac­cines for oth­er pathogens. Whether it’s going to be enough, we don’t know,” Durbin said.

Mod­er­na has been more forth­com­ing with data on at least one of its oth­er vac­cine can­di­dates. In a state­ment [35] issued in Jan­u­ary about a Phase 1 tri­al for its cytomegalovirus (CMV) vac­cine, it quan­ti­fied how far over base­line mea­sures anti­body lev­els rose in vac­cines.

2a. The fol­low­ing arti­cle [17] from Nature Reviews Immunol­o­gy warns us of a poten­tial safe­ty issue with the SARS-CoV­‑2 vac­cine: In the orig­i­nal SARS out­break, we learned that if some­one devel­ops antibodies–but not at a high enough lev­el to neu­tral­ize the infec­tion–that can actu­al­ly make that infec­tion more severe. This process is known as anti­body-depen­dent enhance­ment (ADE). This only hap­pens when the neu­tral­iz­ing anti­body lev­els are below some thresh­old.

If a vac­cine induced an immune response that isn’t high enough it could actu­al­ly make the even­tu­al infec­tions even worse. This has been demon­strat­ed in Mice with SARS vac­cines. As the authors also note, there’s some evi­dence aged ani­mals might have a hard­er time gen­er­at­ing the required lev­els of anti­bod­ies after vac­ci­na­tion. So it’s pos­si­ble to have a vac­cine that pro­tects the young and actu­al­ly makes the elder­ly more vul­ner­a­ble [17]:

“The poten­tial dan­ger of sub­op­ti­mal anti­body respons­es in COVID-19” by Akiko Iwasa­ki & Yex­in Yang; Nature Reviews Immunol­o­gy; 04/21/2020 [17]

There is a des­per­ate need for effec­tive ther­a­pies and vac­cines for SARS-CoV­‑2 to mit­i­gate the grow­ing eco­nom­ic cri­sis that has ensued from soci­etal lock­down. Vac­cines are being devel­oped at an unprece­dent­ed speed and are already in clin­i­cal tri­als, with­out pre­clin­i­cal test­ing for safe­ty and effi­ca­cy. Yet, safe­ty eval­u­a­tion of can­di­date vac­cines must not be over­looked.

The qual­i­ty and quan­ti­ty of the anti­body response dic­tates func­tion­al out­comes. High-affin­i­ty anti­bod­ies can elic­it neu­tral­iza­tion by rec­og­niz­ing spe­cif­ic viral epi­topes (Fig.1a [36]). Neu­tral­iz­ing anti­bod­ies are defined in vit­ro by their abil­i­ty to block viral entry, fusion or egress. In vivo, neu­tral­iz­ing anti­bod­ies can func­tion with­out addi­tion­al medi­a­tors, although the Fc region is required for neu­tral­iza­tion of influen­za virus2 [37]. In the case of SARS-CoV, viral dock­ing on ACE2 on host cells is blocked when neu­tral­iz­ing anti­bod­ies, for exam­ple, rec­og­nize the recep­tor-bind­ing domain (RBD) on the spike (S) pro­tein3 [38]. S pro­tein-medi­at­ed viral fusion can be blocked by neu­tral­iz­ing anti­bod­ies tar­get­ing the hep­tad repeat 2 (HR2) domain3 [38]. In addi­tion, neu­tral­iz­ing anti­bod­ies can inter­act with oth­er immune com­po­nents, includ­ing com­ple­ment, phago­cytes and nat­ur­al killer cells. These effec­tor respons­es can aid in pathogen clear­ance, with engage­ment of phago­cytes shown to enhance anti­body-medi­at­ed clear­ance of SARS-CoV4 [39]How­ev­er, in rare cas­es, pathogen-spe­cif­ic anti­bod­ies can pro­mote pathol­o­gy, result­ing in a phe­nom­e­non known as anti­body-depen­dent enhance­ment (ADE).

Fig. 1: Poten­tial out­comes of anti­body response to coro­n­avirus. [40]

Anti­body-depen­dent enhance­ment

Although anti­bod­ies are gen­er­al­ly pro­tec­tive and ben­e­fi­cial, the ADE phe­nom­e­non is doc­u­ment­ed for dengue virus and oth­er virus­es. In SARS-CoV infec­tion, ADE is medi­at­ed by the engage­ment of Fc recep­tors (FcRs) expressed on dif­fer­ent immune cells, includ­ing mono­cytes, macrophages and B cells5 [41],6 [42]Pre-exist­ing SARS-CoV-spe­cif­ic anti­bod­ies may thus pro­mote viral entry into FcR-express­ing cells (Fig. 1b [36]). This process is inde­pen­dent of ACE2 expres­sion and endo­so­mal pH and pro­teas­es, sug­gest­ing dis­tinct cel­lu­lar path­ways of ACE2-medi­at­ed and FcR-medi­at­ed viral entry6 [42]There is no evi­dence that ADE facil­i­tates the spread of SARS-CoV in infect­ed hosts. In fact, infec­tion of macrophages through ADE does not result in pro­duc­tive viral repli­ca­tion and shed­ding7 [43]Instead, inter­nal­iza­tion of virus–antibody immune com­plex­es can pro­mote inflam­ma­tion and tis­sue injury by acti­vat­ing myeloid cells via FcRs5 [41]. Virus intro­duced into the endo­some through this path­way will like­ly engage the RNA-sens­ing Toll-like recep­tors (TLRs) TLR3, TLR7 and TLR8 (Fig. 1c [36]). Uptake of SARS-CoV through ADE in macrophages led to ele­vat­ed pro­duc­tion of TNF and IL‑6 (ref.5 [41]). In mice infect­ed with SARS-CoV, ADE was asso­ci­at­ed with decreased lev­els of the anti-inflam­ma­to­ry cytokines IL-10 and TGFß and increased lev­els of the pro-inflam­ma­to­ry chemokines CCL2 and CCL3 (ref.8 [44]). Fur­ther­more, immu­niza­tion of non-human pri­mates with a mod­i­fied vac­cinia Ankara (MVA) virus encod­ing the full-length S pro­tein of SARS-CoV pro­mot­ed acti­va­tion of alve­o­lar macrophages, lead­ing to acute lung injury9 [45].

Pro­tec­tive ver­sus path­o­gen­ic anti­bod­ies

Mul­ti­ple fac­tors deter­mine whether an anti­body neu­tral­izes a virus and pro­tects the host or caus­es ADE and acute inflam­ma­tion. These include the speci­fici­ty, con­cen­tra­tion, affin­i­ty and iso­type of the anti­body. Viral vec­tor vac­cines encod­ing SARS-CoV S pro­tein and nucle­o­cap­sid (N) pro­tein pro­voke anti‑S and anti‑N IgG in immu­nized mice, respec­tive­ly, to a sim­i­lar extent. How­ev­er, upon re-chal­lenge, N pro­tein-immu­nized mice show sig­nif­i­cant upreg­u­la­tion of pro-inflam­ma­to­ry cytokine secre­tion, increased neu­trophil and eosinophil lung infil­tra­tion, and more severe lung pathol­o­gy8 [44]Sim­i­lar­ly, anti­bod­ies tar­get­ing dif­fer­ent epi­topes on the S pro­tein may vary in their poten­tial to induce neu­tral­iza­tion or ADE. For exam­ple, anti­bod­ies reac­tive to the RBD domain or the HR2 domain of the S pro­tein induce bet­ter pro­tec­tive anti­body respons­es in non-human pri­mates, where­as anti­bod­ies spe­cif­ic for oth­er S pro­tein epi­topes can induce ADE10 [46]In vit­ro data sug­gest that for cells express­ing FcRs, ADE occurs when anti­body is present at a low con­cen­tra­tion but damp­ens at the high-con­cen­tra­tion range. Mean­while, increas­ing anti­body con­cen­tra­tions pro­motes SARS-CoV neu­tral­iza­tion by block­ing viral entry into host cells6 [42]. For oth­er virus­es, high-affin­i­ty anti­bod­ies capa­ble of block­ing recep­tor bind­ing tend to not induce ADE.

In the ‘mul­ti­ple hit’ mod­el of neu­tral­iza­tion, the virus-block­ing effect cor­re­lates with the num­ber of anti­bod­ies coat­ing the viri­on, which is col­lec­tive­ly affect­ed by anti­body con­cen­tra­tion and affin­i­ty11 [47]. Mon­o­clon­al anti­bod­ies with high­er affin­i­ty for the enve­lope (E) pro­tein of West Nile Virus (WNV) induced bet­ter pro­tec­tion in mice receiv­ing a lethal dose of WNV11 [47]. For a giv­en con­cen­tra­tion of anti­body and a spe­cif­ic tar­get­ing domain, the sto­i­chiom­e­try of anti­body engage­ment on a viri­on is depen­dent on the strength of inter­ac­tion between anti­body and anti­gen. ADE is induced when the sto­i­chiom­e­try is below the thresh­old for neu­tral­iza­tion. There­fore, high­er affin­i­ty anti­bod­ies can reach that thresh­old at a low­er con­cen­tra­tion and medi­ate bet­ter pro­tec­tion11 [47].

Anti­body iso­types con­trol their effec­tor func­tions. IgM is con­sid­ered more pro-inflam­ma­to­ry as it acti­vates com­ple­ment effi­cient­ly. IgG sub­class­es mod­u­late immune respons­es via the engage­ment of dif­fer­ent FcRs. Most FcγRs sig­nal through ITA­Ms, but FcγRI­Ib con­tains an ITIM on its cyto­plas­mic tail that medi­ates an anti-inflam­ma­to­ry response. Ectopic expres­sion of FcγRI­Ia and FcγRI­Ib, but not of FcγRI or FcγRI­I­Ia, induced ADE of SARS-CoV infec­tion6 [42]. Allel­ic poly­mor­phisms in FcγRI­Ia are asso­ci­at­ed with SARS pathol­o­gy, and indi­vid­u­als with an FcγRI­Ia iso­form that binds to both IgG1 and IgG2 were found to devel­op more severe dis­ease than indi­vid­u­als with Fcγthat only binds to IgG2 (ref.12 [48]).

Vac­cine approach­es

It is cru­cial to deter­mine which vac­cines and adju­vants can elic­it pro­tec­tive anti­body respons­es to SARS-CoV­‑2. Pre­vi­ous stud­ies have shown that the immu­niza­tion of mice with inac­ti­vat­ed whole SARS-CoV13 [49], the immu­niza­tion of rhe­sus macaques9 [45] with MVA-encod­ed S pro­tein and the immu­niza­tion of mice with DNA vac­cine encod­ing full-length S pro­tein14 [50] could induce ADE or eosinophil-medi­at­ed immunopathol­o­gy to some extent, pos­si­bly owing to low qual­i­ty and quan­ti­ty of anti­body pro­duc­tion. Addi­tion­al­ly, we need to con­sid­er whether a vac­cine is safe and effec­tive in aged hosts. For instance, dou­ble-inac­ti­vat­ed SARS-CoV vac­cine failed to induce neu­tral­iz­ing anti­body respons­es in aged mice13 [49]. Fur­ther­more, although an alum-adju­vant­ed dou­ble-inac­ti­vat­ed SARS-CoV vac­cine elicit­ed high­er anti­body titres in aged mice, it skewed the IgG sub­class toward IgG1 instead of IgG2, which was asso­ci­at­ed with a T helper 2 (TH2)-type immune response, enhanced eosinophil­ia and lung pathol­o­gy13 [49]. By con­trast, stud­ies in mice showed that sub­unit or pep­tide vac­cines that focus the anti­body response against spe­cif­ic epi­topes with­in the RBD of the S pro­tein con­ferred pro­tec­tive anti­body respons­es3 [38]. In addi­tion, live atten­u­at­ed SARS-CoV vac­cine induced pro­tec­tive immune respons­es in aged mice15 [51]. Routes of vac­cine admin­is­tra­tion can fur­ther affect vac­cine effi­ca­cy. Com­pared with the intra­mus­cu­lar route, intranasal admin­is­tra­tion of a recom­bi­nant ade­no-asso­ci­at­ed virus vac­cine encod­ing SARS-CoV RBD induced sig­nif­i­cant­ly high­er titres of mucos­al IgA in the lung and reduced lung pathol­o­gy upon chal­lenge with SARS-CoV3 [38].

Con­clud­ing remarks

There are now mul­ti­ple vac­cine can­di­dates (includ­ing nucle­ic acid vac­cines, viral vec­tor vac­cines and sub­unit vac­cines) in the pre­clin­i­cal and clin­i­cal tri­al stages as researchers and insti­tutes from all over the world come togeth­er to accel­er­ate the devel­op­ment of a SARS-CoV­‑2 vac­cine. Recent stud­ies of anti­body respons­es in patients with COVID-19 have asso­ci­at­ed high­er titres of anti‑N IgM and IgG at all time points fol­low­ing the onset of symp­toms with a worse dis­ease out­come16 [52]. More­over, high­er titres of anti‑S and anti‑N IgG and IgM cor­re­late with worse clin­i­cal read­outs and old­er age17 [53], sug­gest­ing poten­tial­ly detri­men­tal effects of anti­bod­ies in some patients. How­ev­er, 70% of patients who recov­ered from mild COVID-19 had mea­sur­able neu­tral­iz­ing anti­bod­ies that per­sist­ed upon revis­it to the hospital18. Thus, insights gained from study­ing the anti­body fea­tures that cor­re­late with recov­ery as opposed to wors­en­ing of dis­ease will inform the type of anti­bod­ies to assess in vac­cine stud­ies. We argue that ADE should be giv­en full con­sid­er­a­tion in the safe­ty eval­u­a­tion of emerg­ing can­di­date vac­cines for SARS-CoV­‑2. In addi­tion to vac­cine approach­es, mon­o­clon­al anti­bod­ies could be used to tack­le this virus. Unlike vac­cine-induced anti­bod­ies, mon­o­clon­al anti­bod­ies can be engi­neered with mol­e­c­u­lar pre­ci­sion. Safe and effec­tive neu­tral­iz­ing anti­bod­ies could be pro­duced on a mass-scale for deliv­ery to pop­u­la­tions across the world in the com­ing months. . . .

3. A 2016 STAT News arti­cle [18] about Mod­er­na high­lights a num­ber of areas of con­cern, giv­en the speed and rel­a­tive­ly opaque nature of the poten­tial intro­duc­tion of its Covid-19 vac­cine. The financ­ing of the com­pa­ny by DARPA, and Mon­cef Slaoui’s join­ing with Four Star Gen­er­al Per­na (ele­vat­ed by the Chair­man of the Joint Chiefs of Staff, Gen­er­al Mark A. Mil­ley) are of addi­tion­al con­cern.

  1. As of 2016, Mod­er­na had the largest val­u­a­tion of any pri­vate biotech firm and for­mer employ­ees felt that Mod­er­na prized mon­ey over sci­ence. Note that, as will be reviewed lat­er in the pro­gram, its stock has risen expo­nen­tial­ly as a result of the injec­tion of hun­dreds of mil­lions of dol­lars. Bear in mind that Mod­er­na has also been under­writ­ten by DARPA. “ . . . . Mod­er­na is worth more than any oth­er pri­vate biotech in the US, and for­mer employ­ees said they felt that Ban­cel prized the company’s ever-increas­ing val­u­a­tion, now approach­ing $5 bil­lion, over its sci­ence. . . .”
  2. Mod­er­na has main­tained a cul­ture of secre­cy, which in 2016, applied to the first two prod­ucts under­go­ing phase 1 tri­als: “ . . . . Mod­er­na just moved its first two poten­tial treat­ments — both vac­cines — into human tri­als. In keep­ing with the cul­ture of secre­cy, though, exec­u­tives won’t say which dis­eases the vac­cines tar­get, and they have not list­ed the stud­ies on the pub­lic fed­er­al reg­istry, ClinicalTrials.gov. List­ing is option­al for Phase 1 tri­als, which are meant to deter­mine if a drug is safe, but most com­pa­nies vol­un­tar­i­ly dis­close their work. . . .”
  3. Pro­tein ther­a­py has been a dri­ving eco­nom­ic and ther­a­peu­tic fac­tor in the phar­ma­ceu­ti­cal busi­ness: “ . . . . For decades, com­pa­nies have endeav­ored to craft bet­ter and bet­ter pro­tein ther­a­pies, lead­ing to new treat­ments for can­cer, autoim­mune dis­or­ders, and rare dis­eases. Such ther­a­pies are cost­ly to pro­duce and have many lim­i­ta­tions, but they’ve giv­en rise to a multi­bil­lion-dol­lar indus­try. The anti-inflam­ma­to­ry Humi­ra, the world’s top drug at $14 bil­lion in sales a year, is a shin­ing exam­ple of pro­tein ther­a­py. . . .”
  4. Mod­er­na aims at doing an end run around that tech­nol­o­gy with the injec­tion of mRNA (mes­sen­ger RNA) or DNA. This is a risky tech­nol­o­gy: “ . . . . Moderna’s tech­nol­o­gy promised to sub­vert the whole field, cre­at­ing ther­a­peu­tic pro­teins inside the body instead of in man­u­fac­tur­ing plants. The key: har­ness­ing mes­sen­ger RNA, or mRNA. . . . . It’s high­ly risky. Big phar­ma com­pa­nies had tried sim­i­lar work and aban­doned it because it’s exceed­ing­ly hard to get RNA into cells with­out trig­ger­ing nasty side effects. . . . .”
  5. CEO Ban­cel has main­tained the company’s opaque pro­fes­sion­al cul­ture, mixed with high-pro­file media pro­mo­tion: “ . . . . Under Ban­cel, Mod­er­na has been loath to pub­lish its work in Sci­ence or Nature, but enthu­si­as­tic to her­ald its poten­tial on CNBC and CNN, tak­ing part in seg­ments on the world’s most dis­rup­tive com­pa­nies [19]and the poten­tial ‘cure for can­cer. [20]’. . .”
  6. Mod­er­na had dra­con­ian atti­tude toward employ­ees from its incep­tion: “ . . . . From the begin­ning, Ban­cel made clear that Moderna’s sci­ence sim­ply had to work. And that any­one who couldn’t make it work didn’t belong. The ear­ly Mod­er­na was a chaot­ic, unpre­dictable work­place, accord­ing to for­mer employ­ees. One recalls find­ing him­self out of a job when a quick-turn­around exper­i­ment failed to pan out. Anoth­er helped train a group of new hires only to real­ize they were his replace­ments. . . .”
  7. Joe Bolen exem­pli­fied the treat­ment Mod­er­na met­ed out: “ . . . . Most stun­ning to employ­ees was the abrupt depar­ture of Joseph Bolen, who came aboard in 2013 to lead Moderna’s R&D efforts. Bolen was a big-name hire in biotech cir­cles, an expe­ri­enced chief sci­en­tif­ic offi­cer who had guid­ed Mil­len­ni­um Phar­ma­ceu­ti­cals to FDA approval for a block­buster can­cer drug. . . ‘No sci­en­tist in his right mind would leave that job unless there was some­thing wrong with the sci­ence or the per­son­nel,’ said a per­son close to the com­pa­ny at the time.’ . . .”
  8. Bolen had com­pa­ny: “ . . . . Bolen wasn’t alone. Chief Infor­ma­tion Offi­cer John Reyn­ders joined in 2013 to make Mod­er­na what he called the world’s ‘first ful­ly dig­i­tal biotech,‘ [21]only to step down a year lat­er. Michael Morin, brought in to lead Moderna’s sci­en­tif­ic efforts in can­cer in 2014, last­ed less than 18 months. As did Greg Licholai, hired in 2015 to direct the company’s projects in rare dis­eases. The lat­ter two key lead­er­ship posi­tions remain unfilled. . . .”
  9. The expla­na­tion of CFO Lorence Kim is less than reas­sur­ing from the stand­point of prod­uct safe­ty and reli­a­bil­i­ty: “ . . . . ‘We force every­one to grow with the com­pa­ny at unprece­dent­ed speed,’ Mod­er­na Chief Finan­cial Offi­cer Lorence Kim said. ‘Some peo­ple grow with the com­pa­ny; oth­ers don’t.’ . . .”
  10. Begin­ning in 2013, Mod­er­na part­nered with a series of phar­ma­ceu­ti­cal giants, includ­ing AstraZeneca, which has been select­ed to devel­op a Covid-19 vac­cine: “ . . . . That’s when Mod­er­na — which had just 25 employ­ees — signed a stag­ger­ing $240 mil­lion part­ner­ship with UK phar­ma­ceu­ti­cal giant AstraZeneca. It was the most mon­ey phar­ma had ever spent on drugs that had not yet been test­ed in humans. . . .”
  11. The firm has been lav­ish­ly cap­i­tal­ized: “ . . . . In ear­ly 2015, Mod­er­na dis­closed a $450 mil­lion financ­ing round, the largest ever for a pri­vate biotech com­pa­ny. This month, the com­pa­ny broke its own record, rais­ing anoth­er $474 mil­lion. . . . Though it has yet to reveal data from a sin­gle clin­i­cal tri­al, Mod­er­na is now val­ued at $4.7 bil­lion, accord­ing to Pitch­book. . . .”
  12. Ini­tial­ly, Mod­er­na aimed at devel­op­ing prod­ucts that would be admin­is­tered for a peri­od of years: “ . . . . From the start, Mod­er­na her­ald­ed its abil­i­ty to pro­duce pro­teins with­in cells, which could open up a world of ther­a­peu­tic tar­gets unreach­able by con­ven­tion­al drugs. The most rev­o­lu­tion­ary treat­ments, which could chal­lenge the multi­bil­lion-dol­lar mar­ket for pro­tein ther­a­py, would involve repeat­ed dos­es of mRNA over many years, so a patient’s body con­tin­ued to pro­duce pro­teins to keep dis­ease at bay. . . .”
  13. Instead of pro­duc­ing treat­ments that would be admin­is­tered over a peri­od of years, the com­pa­ny focused on vac­cines: “ . . . . But Moderna’s first human tri­als aren’t so ambi­tious, focus­ing instead on the crowd­ed field of vac­cines, where the com­pa­ny has only been work­ing since 2014. . . . The choice to pri­or­i­tize vac­cines came as a dis­ap­point­ment to many in the com­pa­ny, accord­ing to a for­mer man­ag­er. The plan had been to rad­i­cal­ly dis­rupt the biotech indus­try, the man­ag­er said, so ‘why would you start with a clin­i­cal pro­gram that has very lim­it­ed upside and lots of com­pe­ti­tion?’” . . . .”
  14. The answer to Moderna’s focus on vac­cines may be due to issues of prod­uct safe­ty: “ . . . Deliv­ery — actu­al­ly get­ting RNA into cells — has long bedev­iled the whole field. On their own, RNA mol­e­cules have a hard time reach­ing their tar­gets. They work bet­ter if they’re wrapped up in a deliv­ery mech­a­nism, such as nanopar­ti­cles made of lipids. But those nanopar­ti­cles can lead to dan­ger­ous side effects, espe­cial­ly if a patient has to take repeat­ed dos­es over months or years. . . .”
  15. Vac­cines will only admin­is­ter mRNA at the time of vac­ci­na­tion, rather than over a long peri­od of time: “ . . . . ‘I would say that mRNA is bet­ter suit­ed for dis­eases where treat­ment for short dura­tion is suf­fi­cient­ly cura­tive, so the tox­i­c­i­ties caused by deliv­ery mate­ri­als are less like­ly to occur,’ said Katal­in Karikó, a pio­neer in the field who serves as a vice pres­i­dent at BioN­Tech. . . That makes vac­cines the low­est hang­ing fruit in mRNA, said Franz-Wern­er Haas, CureVac’s chief cor­po­rate offi­cer. ‘From our point of view, it’s obvi­ous why [Mod­er­na] start­ed there,’ he said.’ . . .”
  16. Moderna’s expla­na­tion for its focus on vac­cines is not reassuring—the speed with which it can pro­ceed to human tri­als. The firm’s secre­cy has gen­er­at­ed alarm: “ . . . . Mod­er­na said it pri­or­i­tized vac­cines because they pre­sent­ed the fastest path to human tri­als, not because of set­backs with oth­er projects. ‘The notion that [Mod­er­na] ran into dif­fi­cul­ties isn’t borne in real­i­ty,’ said [chair­man of the board Noubar] Afeyan. But this is where Moderna’s secre­cy comes into play: Until there’s pub­lished data, only the com­pa­ny and its part­ners know what the data show. Every­one out­side is left guess­ing — and, in some cas­es, wor­ry­ing that Mod­er­na won’t live up to its hype. . . .”
  17. Mod­er­na applies soft­ware and a busi­ness mod­el derived from Tes­la, Ama­zon and Uber: “ . . . . Mod­er­na has pio­neered an auto­mat­ed sys­tem mod­eled on the soft­ware Tes­la uses to man­age orders, Ban­cel said: Sci­en­tists sim­ply enter the pro­tein they want a cell to express, and testable mRNA arrives with­in weeks. . . . That has always been part of the plan, for­mer employ­ees said, point­ing to Bancel’s fas­ci­na­tion with the tech indus­try. Uber and Ama­zon were not the first to come up with their respec­tive busi­ness ideas, but they were the ones that built enough scale to ward off com­pe­ti­tion. And Mod­er­na is posi­tion­ing itself to do the same in mRNA. . . .”

“Ego, ambi­tion, and tur­moil: Inside one of biotech’s most secre­tive star­tups” by Dami­an Garde; STAT News; 09/13/2016 [18]

At first glance, Mod­er­na Ther­a­peu­tics looks like the most envi­able biotech start­up in the world. It has smashed fundrais­ing records and teamed up [54] with phar­ma­ceu­ti­cal giants as it pur­sues a rad­i­cal plan to rev­o­lu­tion­ize med­i­cine by trans­form­ing human cells into drug fac­to­ries.

But the real­i­ty is more com­pli­cat­ed.

A STAT inves­ti­ga­tion found that the company’s caus­tic work envi­ron­ment has for years dri­ven away top tal­ent and that behind its obses­sion with secre­cy, there are signs Mod­er­na has run into road­blocks with its most ambi­tious projects.

At the cen­ter of it all is Stéphane Ban­cel, a first-time biotech CEO with an unwa­ver­ing belief that Moderna’s sci­ence will work — and that employ­ees who don’t “live the mis­sion” have no place in the com­pa­ny. Con­fi­dent and intense, Ban­cel told STAT that Moderna’s sci­ence is on track and, when it is final­ly made pub­lic, that it will meet the brash goal he him­self has set: The new drugs will change the world.

But inter­views with more than 20 cur­rent and for­mer employ­ees and asso­ciates sug­gest Ban­cel has ham­pered progress at Mod­er­na because of his ego, his need to assert con­trol and his impa­tience with the set­backs that are an inevitable part of sci­ence [55]Mod­er­na is worth more than any oth­er pri­vate biotech in the US, and for­mer employ­ees said they felt that Ban­cel prized the company’s ever-increas­ing val­u­a­tion, now approach­ing $5 bil­lion, over its sci­ence.

As he pur­sued a com­plex and risky strat­e­gy for drug devel­op­ment, Ban­cel built a cul­ture of recrim­i­na­tion at Mod­er­na, for­mer employ­ees said. Failed exper­i­ments have been met with rep­ri­mands and even on-the-spot fir­ings. They recalled abu­sive emails, dress­ings down at com­pa­ny meet­ings, exceed­ing­ly long hours, and unex­plained ter­mi­na­tions.

At least a dozen high­ly placed exec­u­tives have quit in the past four years, includ­ing heads of finance, tech­nol­o­gy, man­u­fac­tur­ing, and sci­ence. In just the past 12 months, respect­ed lead­ers of Moderna’s can­cer and rare dis­ease pro­grams both resigned, even though the company’s remark­able fundrais­ing had put ample resources at their dis­pos­al. Each had been at the com­pa­ny less than 18 months, and the posi­tions have yet to be filled.

Low­er-rank­ing employ­ees, mean­while, said they’ve been dis­ap­point­ed and con­fused by Moderna’s piv­ot to less ambi­tious — and less trans­for­ma­tive — treat­ments. Mod­er­na has pushed off projects meant to upend the drug indus­try to focus first on the less daunt­ing (and most like­ly, far less lucra­tive) field of vac­cines — though it is years behind com­peti­tors in that are­na.

The com­pa­ny has pub­lished no data sup­port­ing its vaunt­ed tech­nol­o­gy, and it’s so secre­tive that some job can­di­dates have to sign nondis­clo­sure agree­ments before they come in to inter­view. Out­side ven­ture cap­i­tal­ists said Mod­er­na has so many investors clam­or­ing to get in that it can afford to turn away any who ask too many ques­tions. Some small play­ers have been giv­en only a peek at Moderna’s data before com­mit­ting mil­lions to the com­pa­ny, accord­ing to peo­ple famil­iar with the mat­ter.

“It’s a case of the emperor’s new clothes,” said a for­mer Mod­er­na sci­en­tist. “They’re run­ning an invest­ment firm, and then hope­ful­ly it also devel­ops a drug that’s suc­cess­ful.”

Like many employ­ees and for­mer employ­ees, the sci­en­tist request­ed anonymi­ty because of a nondis­clo­sure agree­ment. Oth­ers would not per­mit their names to be pub­lished out of fear that speak­ing can­did­ly about big play­ers in the indus­try would hurt their job prospects down the road.

Mod­er­na just moved its first two poten­tial treat­ments — both vac­cines — into human tri­als. In keep­ing with the cul­ture of secre­cy, though, exec­u­tives won’t say which dis­eases the vac­cines tar­get, and they have not list­ed the stud­ies on the pub­lic fed­er­al reg­istry, ClinicalTrials.gov. List­ing is option­al for Phase 1 tri­als, which are meant to deter­mine if a drug is safe, but most com­pa­nies vol­un­tar­i­ly dis­close their work.

An ambi­tious CEO dreams big

Ban­cel, 44, had no expe­ri­ence run­ning a drug devel­op­ment oper­a­tion when one of biotech’s most suc­cess­ful ven­ture cap­i­tal­ists tapped him to lead Mod­er­na. He’d spent most of his career in sales and oper­a­tions, not sci­ence.

But he had made no secret of his ambi­tion.

A native of France, Ban­cel earned a master’s in chem­i­cal engi­neer­ing from the Uni­ver­si­ty of Min­neso­ta and an MBA from Har­vard in 2000. As Har­vard Busi­ness School class­mates rushed to cash in on the dot-com boom, Ban­cel laid out a plan to play “chess, not check­ers.”

“I was always think­ing, one day, some­body will have to make a deci­sion about me get­ting a CEO job,” he told an audi­ence at his alma mater in April. “… How do I make sure I’m not the brides­maid? How do I make sure that I’m not always the per­son who’s almost select­ed but doesn’t get the role?”

He went into sales and rose through the oper­a­tional ranks at phar­ma­ceu­ti­cal giant Eli Lil­ly, even­tu­al­ly lead­ing the company’s Bel­gian oper­a­tion. And in 2007, at just 34, he achieved his goal, step­ping in as CEO of the French diag­nos­tics firm bio­Mérieux, which employs rough­ly 6,000 peo­ple.

The com­pa­ny improved its mar­gins under Bancel’s tenure, and he devel­oped a rep­u­ta­tion as a stern man­ag­er who got results, accord­ing to an equi­ties ana­lyst who cov­ered bio­Mérieux at the time.

“He doesn’t suf­fer fools light­ly,” the ana­lyst said, speak­ing on con­di­tion of anonymi­ty to com­ply with com­pa­ny pol­i­cy. “I think if you’re under­per­form­ing, you’ll prob­a­bly find your­self look­ing for anoth­er job.”

Bancel’s rise caught the eye of the biotech invest­ment firm Flag­ship Ven­tures, based here in Cam­bridge. Flag­ship CEO Noubar Afeyan repeat­ed­ly tried to entice him to take over one of the firm’s many star­tups, Ban­cel said. But he reject­ed one prospect after anoth­er because the star­tups seemed too nar­row in scope.

Mod­er­na was dif­fer­ent.

The company’s core idea was seduc­tive­ly sim­ple: cut out the mid­dle­man in biotech.

For decades, com­pa­nies have endeav­ored to craft bet­ter and bet­ter pro­tein ther­a­pies, lead­ing to new treat­ments for can­cer, autoim­mune dis­or­ders, and rare dis­eases. Such ther­a­pies are cost­ly to pro­duce and have many lim­i­ta­tions, but they’ve giv­en rise to a multi­bil­lion-dol­lar indus­try. The anti-inflam­ma­to­ry Humi­ra, the world’s top drug at $14 bil­lion in sales a year, is a shin­ing exam­ple of pro­tein ther­a­py.

Moderna’s tech­nol­o­gy promised to sub­vert the whole field, cre­at­ing ther­a­peu­tic pro­teins inside the body instead of in man­u­fac­tur­ing plants. The key: har­ness­ing mes­sen­ger RNA, or mRNA.

In nature, mRNA mol­e­cules func­tion like recipe books, direct­ing cel­lu­lar machin­ery to make spe­cif­ic pro­teins. Mod­er­na believes it can play that sys­tem to its advan­tage by using syn­thet­ic mRNA to com­pel cells to pro­duce whichev­er pro­teins it choos­es. In effect, the mRNA would turn cells into tiny drug fac­to­ries.

It’s high­ly risky. Big phar­ma com­pa­nies had tried sim­i­lar work and aban­doned it because it’s exceed­ing­ly hard to get RNA into cells with­out trig­ger­ing nasty side effects. But if Mod­er­na can get it to work, the process could be used to treat scores of dis­eases, includ­ing can­cers and rare dis­eases that can be death sen­tences for chil­dren.

Under Ban­cel, Mod­er­na has been loath to pub­lish its work in Sci­ence or Nature, but enthu­si­as­tic to her­ald its poten­tial on CNBC and CNN, tak­ing part in seg­ments on the world’s most dis­rup­tive com­pa­nies [19] and the poten­tial “cure for can­cer.” [20]

Res­ig­na­tions, dis­missals, and churn

From the begin­ning, Ban­cel made clear that Moderna’s sci­ence sim­ply had to work. And that any­one who couldn’t make it work didn’t belong.

The ear­ly Mod­er­na was a chaot­ic, unpre­dictable work­place, accord­ing to for­mer employ­ees. One recalls find­ing him­self out of a job when a quick-turn­around exper­i­ment failed to pan out. Anoth­er helped train a group of new hires only to real­ize they were his replace­ments.

“There was a kind of Jack Welch-ian, ‘We fire the bot­tom 10 per­cent’ from the very begin­ning,” said a for­mer Mod­er­na man­ag­er. “That’s prob­a­bly the biggest HR dif­fer­ence between Mod­er­na and vir­tu­al­ly any oth­er biotech, where they talk so much about devel­op­ing their peo­ple.”

Mod­er­na went through two heads of chem­istry in a sin­gle year, accord­ing to for­mer employ­ees, and its chief sci­en­tif­ic offi­cer and head of man­u­fac­tur­ing left short­ly there­after. Those who fell out of favor with Ban­cel would find them­selves exclud­ed from key meet­ings, pushed aside until they resigned or ulti­mate­ly got dis­missed, employ­ees said.

Most stun­ning to employ­ees was the abrupt depar­ture of Joseph Bolen, who came aboard in 2013 to lead Moderna’s R&D efforts.

Bolen was a big-name hire in biotech cir­cles, an expe­ri­enced chief sci­en­tif­ic offi­cer who had guid­ed Mil­len­ni­um Phar­ma­ceu­ti­cals to FDA approval for a block­buster can­cer drug. He’d been pro­filed in The Sci­en­tist, which dubbed him “the people’s CSO” [56] for his abil­i­ty to keep morale high and research focused. Land­ing him was a coup.

But two years into his tenure at Mod­er­na, he abrupt­ly stepped down last Octo­ber, mak­ing no pub­lic state­ment save for chang­ing his LinkedIn sta­tus to “resigned.”

“No sci­en­tist in his right mind would leave that job unless there was some­thing wrong with the sci­ence or the per­son­nel,” said a per­son close to the com­pa­ny at the time.

Insid­ers said Ban­cel had effec­tive­ly pushed Bolen out, hir­ing par­al­lel exec­u­tives until Bolen was in charge of just “a postage stamp” worth of ter­ri­to­ry, as one for­mer Mod­er­na man­ag­er put it. Bolen declined to com­ment.

For his part, Ban­cel acknowl­edged the changes that lim­it­ed Bolen’s pow­er but insist­ed the part­ing was friend­ly. Ban­cel said he tried to con­vince Bolen to stay, but the sci­en­tist “vot­ed him­self off the island.”

Bolen wasn’t alone. Chief Infor­ma­tion Offi­cer John Reyn­ders joined in 2013 to make Mod­er­na what he called the world’s “first ful­ly dig­i­tal biotech,” [21] only to step down a year lat­er. Michael Morin, brought in to lead Moderna’s sci­en­tif­ic efforts in can­cer in 2014, last­ed less than 18 months. As did Greg Licholai, hired in 2015 to direct the company’s projects in rare dis­eases. The lat­ter two key lead­er­ship posi­tions remain unfilled.

“You won­der,” influ­en­tial biotech blog­ger Derek Lowe wrote last year [57], “if Mod­er­na real­ly is a rock­et ship get­ting ready to launch and spray a for­ma­tion of new drugs across the sky, then why are these peo­ple leav­ing?”

The com­pa­ny has a sim­ple expla­na­tion: Mod­er­na lives in dog years com­pared with oth­er biotechs.

“We force every­one to grow with the com­pa­ny at unprece­dent­ed speed,” Mod­er­na Chief Finan­cial Offi­cer Lorence Kim said. “Some peo­ple grow with the com­pa­ny; oth­ers don’t.”

A gold rush for Mod­er­na

Hoge, who joined the com­pa­ny in 2012, describes the ear­ly days of Mod­er­na as “when we were liv­ing in the caves.” The com­pa­ny often had only enough cash to keep the lights on for six months at a time, he said. “The strat­e­gy was just to sur­vive.”

Mod­er­na 1.0, and life in the caves, came to a close in 2013, accord­ing to com­pa­ny lore.

That’s when Mod­er­na — which had just 25 employ­ees — signed a stag­ger­ing $240 mil­lion part­ner­ship with UK phar­ma­ceu­ti­cal giant AstraZeneca. It was the most mon­ey phar­ma had ever spent on drugs that had not yet been test­ed in humans.

The agree­ment is com­mem­o­rat­ed in one of Moderna’s offices by a framed clip­ping from the New York Times. Page B7 of the March 21, 2013 edi­tion: “AstraZeneca Makes a Bet On an Untest­ed Tech­nique.”

For AstraZeneca, the unprece­dent­ed deal came at a time of uncer­tain­ty. A series of clin­i­cal fail­ures had led the firm to fire its head of research and lay off 1,600 sci­en­tists. Pas­cal Sori­ot, just six months into his tenure as CEO, was under pres­sure from investors to chart a new course. And Mod­er­na, with its brash ambi­tion to bring 100 drugs to clin­i­cal tri­als with­in a decade, gave Sori­ot a way for­ward.

The rich deal start­ed a gold rush for Mod­er­na. Every­one, it seemed, want­ed in.

Before the end of 2013, Mod­er­na would turn heads again with a $110 mil­lion invest­ment round, fol­lowed by a high-dol­lar part­ner­ship with biotech giant Alex­ion.

In ear­ly 2015, Mod­er­na dis­closed a $450 mil­lion financ­ing round, the largest ever for a pri­vate biotech com­pa­ny. This month, the com­pa­ny broke its own record, rais­ing anoth­er $474 mil­lion.

The run-up was “biotech fer­vor to the extreme,” accord­ing to a ven­ture cap­i­tal­ist not involved with the com­pa­ny, request­ing anonymi­ty to speak can­did­ly. While big­ger investors got to see all the company’s data from ani­mal exper­i­ments, some of Moderna’s small­er investors put in funds based on just a peek, accord­ing to peo­ple famil­iar with the process. Moderna’s fundrais­ing suc­cess had cre­at­ed a seller’s mar­ket: Why deal with the ques­tions of one poten­tial investor when it had 10 more lined up?

Afeyan, Moderna’s chair­man and cofounder, insists the company’s investors have done their home­work. To say they bought in with­out due dili­gence “would be a bit of an insult to these peo­ple,” he said.

Though it has yet to reveal data from a sin­gle clin­i­cal tri­al, Mod­er­na is now val­ued at $4.7 bil­lion, accord­ing to Pitch­book.

That’s twice as much as Spark Ther­a­peu­tics [58], the com­pa­ny wide­ly expect­ed to mar­ket the Unit­ed States’s first gene ther­a­py, which has shown signs in clin­i­cal tri­als that it can reverse blind­ness caused by a rare genet­ic dis­or­der. Mod­er­na is also worth bil­lions more than Juno Ther­a­peu­tics [59] and Kite Phar­ma, star­tups devel­op­ing nov­el treat­ments for can­cer that have demon­strat­ed promis­ing results in ear­ly human tri­als.

Mod­er­na has long shak­en off rumors that it is soon to mar­ket its shares on Wall Street, with Hoge liken­ing the com­pa­ny to a child star: “You don’t want to go through your ado­les­cence pub­licly,” he told STAT.

But that’s about to change. Moderna’s next planned step is an ini­tial pub­lic offer­ing, accord­ing to a per­son close to the com­pa­ny. Ban­cel declined to say just when Mod­er­na might go pub­lic, but the com­pa­ny has already pre­pared: In its lat­est fil­ings with the Secu­ri­ties and Exchange Com­mis­sion, Mod­er­na changed its busi­ness struc­ture from an LLC to a C cor­po­ra­tion, com­plet­ing a nec­es­sary step before mount­ing an IPO.

A strate­gic shift to less ambi­tious tar­gets

With a pub­lic list­ing come required dis­clo­sures, and many are eager to see what Moderna’s been keep­ing under wraps all these years.

Out­siders and com­peti­tors, look­ing only at Moderna’s pub­lic state­ments, have not­ed a shift in strat­e­gy that might sig­nal undis­closed set­backs.

From the start, Mod­er­na her­ald­ed its abil­i­ty to pro­duce pro­teins with­in cells, which could open up a world of ther­a­peu­tic tar­gets unreach­able by con­ven­tion­al drugs. The most rev­o­lu­tion­ary treat­ments, which could chal­lenge the multi­bil­lion-dol­lar mar­ket for pro­tein ther­a­py, would involve repeat­ed dos­es of mRNA over many years, so a patient’s body con­tin­ued to pro­duce pro­teins to keep dis­ease at bay.

But Moderna’s first human tri­als aren’t so ambi­tious, focus­ing instead on the crowd­ed field of vac­cines, where the com­pa­ny has only been work­ing since 2014.

First are the two vac­cine tri­als for undis­closed infec­tious dis­eases. Com­ing next is a one-time treat­ment for heart fail­ure, devel­oped in part­ner­ship with AstraZeneca, fol­lowed by anoth­er exper­i­men­tal vac­cine, for Zika virus [60], which sev­er­al oth­er phar­ma com­pa­nies are also work­ing to devel­op. And after that, Mod­er­na is plan­ning a human tri­al of a per­son­al­ized can­cer vac­cine [61] using mRNA, some­thing it just came up with last year.

The choice to pri­or­i­tize vac­cines came as a dis­ap­point­ment to many in the com­pa­ny, accord­ing to a for­mer man­ag­er. The plan had been to rad­i­cal­ly dis­rupt the biotech indus­try, the man­ag­er said, so “why would you start with a clin­i­cal pro­gram that has very lim­it­ed upside and lots of com­pe­ti­tion?”

The answer could be the chal­lenge of ensur­ing drug safe­ty, out­siders said.

Deliv­ery — actu­al­ly get­ting RNA into cells — has long bedev­iled the whole field. On their own, RNA mol­e­cules have a hard time reach­ing their tar­gets. They work bet­ter if they’re wrapped up in a deliv­ery mech­a­nism, such as nanopar­ti­cles made of lipids. But those nanopar­ti­cles can lead to dan­ger­ous side effects, espe­cial­ly if a patient has to take repeat­ed dos­es over months or years.

Novar­tis aban­doned the relat­ed realm of RNA inter­fer­ence over con­cerns about tox­i­c­i­ty, as did Mer­ck and Roche.

Moderna’s most advanced com­peti­tors, Cure­Vac and BioN­Tech, have acknowl­edged the same chal­lenge with mRNA. Each is prin­ci­pal­ly focused on vac­cines for infec­tious dis­ease and can­cer, which the com­pa­nies believe can be attacked with just a few dos­es of mRNA. And each has already test­ed its tech­nol­o­gy on hun­dreds of patients.

“I would say that mRNA is bet­ter suit­ed for dis­eases where treat­ment for short dura­tion is suf­fi­cient­ly cura­tive, so the tox­i­c­i­ties caused by deliv­ery mate­ri­als are less like­ly to occur,” said Katal­in Karikó, a pio­neer in the field who serves as a vice pres­i­dent at BioN­Tech.

That makes vac­cines the low­est hang­ing fruit in mRNA, said Franz-Wern­er Haas, CureVac’s chief cor­po­rate offi­cer. “From our point of view, it’s obvi­ous why [Mod­er­na] start­ed there,” he said.

Mod­er­na said it pri­or­i­tized vac­cines because they pre­sent­ed the fastest path to human tri­als, not because of set­backs with oth­er projects. “The notion that [Mod­er­na] ran into dif­fi­cul­ties isn’t borne in real­i­ty,” said Afeyan.

But this is where Moderna’s secre­cy comes into play: Until there’s pub­lished data, only the com­pa­ny and its part­ners know what the data show. Every­one out­side is left guess­ing — and, in some cas­es, wor­ry­ing that Mod­er­na won’t live up to its hype.

“Frankly, I hope that there’s real sub­stance and I hope they solve those chal­lenges, because it’s not going to be good for the broad­er biotech indus­try in gen­er­al if this thing implodes,” said one investor not involved with Mod­er­na.

And it could still go either way, for­mer employ­ees said. If Moderna’s promis­es come to fruition, it could be a pil­lar of the biotech indus­try. If they don’t, it could find a place among a short list of com­pa­nies that have cast a shad­ow over the entire indus­try and left investors dis­il­lu­sioned.

“Either we’ll be talk­ing about it as the next Genen­tech,” a for­mer Mod­er­na man­ag­er said, “or we’ll think, ‘Well, back then, first there was Tur­ing, then there was Valeant, and then there was Mod­er­na.”

Enough cash to absorb some set­backs

Moderna’s man­age­ment and its investors are keep­ing the faith, point­ing to the company’s pipeline of 11 drug can­di­dates and more than 90 pre­clin­i­cal projects.

And with Moderna’s huge cash reserves — esti­mat­ed at $1.5 bil­lion — it can afford a few set­backs, pro­po­nents said. The com­pa­ny said it’s pour­ing mon­ey into its man­u­fac­tur­ing oper­a­tion, plan­ning to spend $100 mil­lion this year on a new plant. Mod­er­na has pio­neered an auto­mat­ed sys­tem mod­eled on the soft­ware Tes­la uses to man­age orders, Ban­cel said: Sci­en­tists sim­ply enter the pro­tein they want a cell to express, and testable mRNA arrives with­in weeks.

“If we have a bump in the road in the clin­ic, we will not have to wait years to go back to the draw­ing board,” Ban­cel said.

That has always been part of the plan, for­mer employ­ees said, point­ing to Bancel’s fas­ci­na­tion with the tech indus­try. Uber and Ama­zon were not the first to come up with their respec­tive busi­ness ideas, but they were the ones that built enough scale to ward off com­pe­ti­tion. And Mod­er­na is posi­tion­ing itself to do the same in mRNA.

“Now, as we’re going to human [tri­als], it’s pret­ty clear no one else is going to catch us,” said Dr. Ken­neth Chien, a pro­fes­sor at Karolin­s­ka Insti­tutet work­ing with Mod­er­na and AstraZeneca.

Dr. Tal Zaks, Moderna’s chief med­ical offi­cer, promis­es that the com­pa­ny will soon break its silence on the pub­lish­ing front. He said next year Mod­er­na will dis­close the ani­mal data that helped get its two vac­cines into the clin­ic. The com­pa­ny has also com­mit­ted to pub­lish­ing full results from all of its human tri­als, start­ing with the vac­cine stud­ies next year.

Moderna’s ret­i­cence to share data ear­li­er is “not because we decid­ed to be secret,” Zaks said. “This is the nat­ur­al evo­lu­tion of a plat­form. As we go into the clin­ic, we will be very trans­par­ent.”

4. Mon­cef Slaoui’s  opti­mistic state­ment on the Fri­day [23] before the Mon­day announce­ment, presents impor­tant con­text for Moderna’s Mon­day announce­ment. That announce­ment moved mar­kets based on inad­e­quate data. “Oper­a­tion Warp Speed” (head­ed by Slaoui) sug­gests that can­di­date Trump  is very inter­est­ed in those pre­lim­i­nary results as well. 

” . . . . Fol­low­ing Mon­cef Slaoui’s Fri­day appoint­ment as a co-leader of the Warp Speed pro­gram, he’s set to sell about 155,000 shares in Mod­er­na, accord­ing to press reports. They were worth an esti­mat­ed $10 mil­lion Fri­day, but after Monday’s stock run-up on pos­i­tive ear­ly data, they’re now val­ued at about $12.4 mil­lion. . . . Fol­low­ing Slaoui’s selec­tion, Sen. Eliz­a­beth War­ren tweet­ed [24] that it’s a ‘huge con­flict of inter­est’ for him to keep the Mod­er­na stock as he assumes the new role. She said he should ‘divest imme­di­ate­ly.’ In a now-delet­ed tweet, Slaoui respond­ed that there ‘is no con­flict of inter­est, and there nev­er has been,’ Busi­ness Insid­er reports [25]. . . .”

“‘Warp Speed’ head Slaoui, chal­lenged for ‘huge con­flict of inter­est,’ sells off $12.4M in Mod­er­na stock” by Eric Sagonowsky; Fier­cePhar­ma; 05/19/2020 [23]

As the Oper­a­tion Warp Speed pro­gram races ahead with COVID-19 vac­cine can­di­dates, one of its new lead­ers kept mil­lions of dol­lars of stock in Mod­er­na, the biotech lead­ing the pack.

But now, after an influ­en­tial sen­a­tor chal­lenged that own­er­ship inter­est, he’s plan­ning to sell.

Fol­low­ing Mon­cef Slaoui’s Fri­day appoint­ment as a co-leader of the Warp Speed pro­gram, he’s set to sell about 155,000 shares in Mod­er­na, accord­ing to press reports. They were worth an esti­mat­ed $10 mil­lion Fri­day, but after Monday’s stock run-up on pos­i­tive ear­ly data, they’re now val­ued at about $12.4 mil­lion.

Slaoui is set to donate to can­cer research the excess pro­ceeds from the sale, or about $2.4 mil­lion, accord­ing [62] to CNBC. Slaoui also resigned [63] as a Mod­er­na board mem­ber with the appoint­ment.

Pres­i­dent Don­ald Trump unveiled the “Warp Speed” project at a Rose Gar­den event on Fri­day. Aside from Slaoui, a Glax­o­SmithK­line vet­er­an, the four-star gen­er­al Gus­tave Per­na will also lead the pro­gram.

Fol­low­ing Slaoui’s selec­tion, Sen. Eliz­a­beth War­ren tweet­ed [24] that it’s a “huge con­flict of inter­est” for him to keep the Mod­er­na stock as he assumes the new role. She said he should “divest imme­di­ate­ly.”

In a now-delet­ed tweet, Slaoui respond­ed that there “is no con­flict of inter­est, and there nev­er has been,” Busi­ness Insid­er reports [25].

Slaoui spent near­ly three decades at Glax­o­SmithK­line and retired in 2017. Then, he joined the boards of Mod­er­na and oth­er life sci­ences com­pa­nies.

Oper­a­tion Warp Speed is aim­ing to deliv­er a COVID-19 vac­cine by the end of the year. At Friday’s event, Slaoui said he was “con­fi­dent” in that goal after view­ing ear­ly data from an undis­closed pro­gram. Mod­er­na announced its promis­ing data, from eight patients in a phase 1 study, ear­ly Mon­day morn­ing. . . .

5. Even after agree­ing to sell his Mod­er­na stock, Slaoui’s invest­ments raise alarm­ing ques­tions [26]–note that he is a “ven­ture cap­i­tal­ist” and a long­time for­mer exec­u­tive at Glaxo-Smithk­line:

  1. The cir­cum­stances of his appoint­ment will per­mit him to avoid scruti­ny: ” . . . . In agree­ing to accept the posi­tion, Dr. Slaoui did not come on board as a gov­ern­ment employ­ee. Instead, he is on a con­tract, receiv­ing $1 for his ser­vice. That leaves him exempt from fed­er­al dis­clo­sure rules that would require him to list his out­side posi­tions, stock hold­ings and oth­er poten­tial con­flicts. And the con­tract posi­tion is not sub­ject to the same con­flict-of-inter­est laws and reg­u­la­tions that exec­u­tive branch employ­ees must fol­low. . . .”
  2. He will retain a great deal of Glaxo-Smithk­line stock: ” . . . . He did not say how much his GSK shares were worth. When he left the com­pa­ny in 2017, he held about [500,000 in West­ern Print Edi­tion] 240,000 shares and share equiv­a­lents, accord­ing to the drug company’s annu­al report and an analy­sis by the exec­u­tive com­pen­sa­tion firm Equi­lar. . . .”
  3. Fur­ther analy­sis of Slaoui’s posi­tion deep­ens con­cern about the integri­ty of the process: ” . . . . ‘This is basi­cal­ly absurd,’ said Vir­ginia Can­ter, who is chief ethics coun­sel for Cit­i­zens for Respon­si­bil­i­ty and Ethics in Wash­ing­ton. ‘It allows for no pub­lic scruti­ny of his con­flicts of inter­est.’ Ms. Can­ter also said fed­er­al law barred gov­ern­ment con­trac­tors from super­vis­ing gov­ern­ment employ­ees. . . . Ms. Can­ter, a for­mer ethics lawyer in the Oba­ma and Clin­ton admin­is­tra­tions, the Secu­ri­ties and Exchange Com­mis­sion and oth­er agen­cies, point­ed out that GSK’s vac­cine can­di­date with Sanofi could wind up com­pet­ing with oth­er man­u­fac­tur­ers vying for gov­ern­ment approval and sup­port. ‘If he retains stock in com­pa­nies that are invest­ing in the devel­op­ment of a vac­cine, and he’s involved in over­see­ing this process to select the safest vac­cine to com­bat Covid-19, regard­less of how won­der­ful a per­son he is, we can’t be con­fi­dent of the integri­ty of any process in which he is involved,’ Ms. Can­ter said.In addi­tion, his affil­i­a­tion with Medicxi could com­pli­cate mat­ters: Two of its investors [27] are GSK and a divi­sion of John­son & John­son, which is also devel­op­ing a poten­tial vac­cine. . . .”

“Trump’s Vac­cine Chief Has Vast Ties to Drug Indus­try, Pos­ing Pos­si­ble Con­flicts” by Sheila Kaplan, Matthew Gold­stein and Alexan­dra Steven­son; The New York Times; 5/21/2020. [26]

. . . . The sci­en­tist, Mocef Slaoui, is a ven­ture cap­i­tal­ist and a for­mer long­time exec­u­tive at Glaxo-Smithk­line . . .

. . . . In agree­ing to accept the posi­tion, Dr. Slaoui did not come on board as a gov­ern­ment employ­ee. Instead, he is on a con­tract, receiv­ing $1 for his ser­vice. That leaves him exempt from fed­er­al dis­clo­sure rules that would require him to list his out­side posi­tions, stock hold­ings and oth­er poten­tial con­flicts. And the con­tract posi­tion is not sub­ject to the same con­flict-of-inter­est laws and reg­u­la­tions that exec­u­tive branch employ­ees must fol­low. . . .

. . . . He did not say how much his GSK shares were worth. When he left the com­pa­ny in 2017, he held about [500,000 in West­ern Edi­tion] 240,000 shares and share equiv­a­lents, accord­ing to the drug company’s annu­al report and an analy­sis by the exec­u­tive com­pen­sa­tion firm Equi­lar.

He said he told admin­is­tra­tion offi­cials that he did not want to sell his com­pa­ny stock.

‘I have worked for 29 years for GSK,’ Dr. Slaoui said. ‘I have nev­er sold a sin­gle share of any com­pa­ny in my life. This is my retire­ment. What I said regard­ing the GSK shares, I said I can­not take the job if I have to sell them.’ . . .

. . . . With­out pub­lic dis­clo­sure, some ethics experts called his con­tract an end-run around the rules.

“This is basi­cal­ly absurd,” said Vir­ginia Can­ter, who is chief ethics coun­sel for Cit­i­zens for Respon­si­bil­i­ty and Ethics in Wash­ing­ton. “It allows for no pub­lic scruti­ny of his con­flicts of inter­est.”

Ms. Can­ter also said fed­er­al law barred gov­ern­ment con­trac­tors from super­vis­ing gov­ern­ment employ­ees. . . .

. . . . Ms. Can­ter, a for­mer ethics lawyer in the Oba­ma and Clin­ton admin­is­tra­tions, the Secu­ri­ties and Exchange Com­mis­sion and oth­er agen­cies, point­ed out that GSK’s vac­cine can­di­date with Sanofi could wind up com­pet­ing with oth­er man­u­fac­tur­ers vying for gov­ern­ment approval and sup­port.

“If he retains stock in com­pa­nies that are invest­ing in the devel­op­ment of a vac­cine, and he’s involved in over­see­ing this process to select the safest vac­cine to com­bat Covid-19, regard­less of how won­der­ful a per­son he is, we can’t be con­fi­dent of the integri­ty of any process in which he is involved,” Ms. Can­ter said.

In addi­tion, his affil­i­a­tion with Medicxi could com­pli­cate mat­ters: Two of its investors [27] are GSK and a divi­sion of John­son & John­son, which is also devel­op­ing a poten­tial vac­cine. . . .

6. Mod­er­na stands to make bil­lions of dol­lars [28] if their vac­cine goes to mar­ket:

  1. ” . . . . What investors are bet­ting on, for Mod­er­na and oth­ers devel­op­ing vac­cines against the SARS-CoV­‑2 virus, is that a third of the devel­oped world’s pop­u­la­tion will get vac­ci­nat­ed every year. That could amount to a $10 bil­lion annu­al busi­ness, at an esti­mat­ed price of $30 per vac­ci­na­tion. . . .”
  2. ” . . . . Mor­gan Stan­ley ana­lysts this past week­end sug­gest­ed that pric­ing might start at $5 to $10 a dose dur­ing this first pan­dem­ic cri­sis, then rise to a range of $13 to $30 for pre­ven­tive dos­es in future years. But at BMO Cap­i­tal Mar­kets, ana­lyst George Farmer spec­u­lat­ed that Mod­er­na could start charg­ing $125 per treat­ment in the U.S. mar­ket and raise that price over time to $200. . . . ”

“A Covid-19 Vac­cine Could Be Worth Bil­lions for Mod­er­na and Its Rivals” by Bill Alpert; Barron’s; 05/19/2020 [28]

Fresh on the heels of the first data from human tests of its Covid-19 vac­cine, Mod­er­na sold $1.3 bil­lion worth of stock on Mon­day at a price of $76 a share. That’s a four­fold rise from price where the biotech’s stock start­ed the year, and a mar­ket val­ue of $30 bil­lion for a com­pa­ny that has yet to sell its first prod­uct.

What investors are bet­ting on, for Mod­er­na and oth­ers devel­op­ing vac­cines against the SARS-CoV­‑2 virus, is that a third of the devel­oped world’s pop­u­la­tion will get vac­ci­nat­ed every year. That could amount to a $10 bil­lion annu­al busi­ness, at an esti­mat­ed price of $30 per vac­ci­na­tion. At high­er prices, Covid vac­cine rev­enue would be big­ger still.

In Tues­day morn­ing trad­ing, Mod­er­na stock was down 5% from Monday’s close, at $76.

On a Mon­day con­fer­ence call, Mod­er­na CEO Stéphane Ban­cel said the Cam­bridge, Mass., com­pa­ny had not yet decid­ed on a price [64] , in the event that their mRNA-1273 vac­cine proves effec­tive in the Phase 2 and 3 tri­als it will run this year. He said that Mod­er­na was think­ing about what Covid-19 ill­ness costs the health-care sys­tem.

Covid’s cost obvi­ous­ly goes beyond the hos­pi­tal, and it’s already been gigan­tic [65] . In the U.S. alone, near­ly 90,000 have died in a few months’ time. The scale of the coro­n­avirus’ impact explains why there’s such a range of esti­mates on Wall Street for what vac­cine mak­ers will charge. Mor­gan Stan­ley ana­lysts this past week­end sug­gest­ed that pric­ing might start at $5 to $10 a dose dur­ing this first pan­dem­ic cri­sis, then rise to a range of $13 to $30 for pre­ven­tive dos­es in future years.

But at BMO Cap­i­tal Mar­kets, ana­lyst George Farmer spec­u­lat­ed that Mod­er­na could start charg­ing $125 per treat­ment in the U.S. mar­ket and raise that price over time to $200. Most of the world’s health-care sys­tems are gov­ern­ment-run, so Farmer’s mod­el assumes that pric­ing abroad will be a frac­tion of America’s gen­er­ous pric­ing.

Vac­ci­na­tions will like­ly con­sist of a first shot and then a boost­er one month lat­er. After clin­i­cal tri­als answer the first cru­cial ques­tion of whether vac­cine can­di­dates like Moderna’s pre­vent Covid in humans, the next ques­tion will be how long immu­ni­ty lasts. Assum­ing some­what less muta­bil­i­ty than is the case with the flu virus, researchers are guess­ing that peo­ple might need a SARS-CoV­‑2 vac­ci­na­tion every few years. That’s how ana­lysts like BMO’s Farmer arrive at a count of rough­ly a third of the pop­u­la­tion need­ing a vac­ci­na­tion per year.

The U.S. pop­u­la­tion could rise from about 330 mil­lion today to more than 360 mil­lion by the decade’s end, depend­ing on a bunch of social and eco­nom­ic fac­tors, such as future immi­gra­tion lev­els. Dif­fer­ent age groups will get vac­ci­nat­ed at dif­fer­ing rates—hopefully unim­ped­ed by anti­vac­ci­na­tion sen­ti­ments [66]BMO esti­mates that will work out to about 30% of America’s head count get­ting vac­ci­nat­ed each year, or some 100 mil­lion treat­ments a year by the sec­ond half of this decade. Put a price from $30 to $130 on those num­bers, and you get $3 bil­lion to $13 bil­lion in U.S. sales.

Glob­al sales are hard­er to fore­cast, with prices and vac­ci­na­tion rates like­ly to vary wide­ly through­out the devel­oped and devel­op­ing coun­tries. BMO’s Farmer guessti­mates that sales in the devel­oped world will amount to half or two-thirds the dol­lar lev­els of the U.S. Poor­er nations will only be able to chip in around 5%. Still, he sees Covid vac­cines exceed­ing $30 bil­lion in sales by the end of the decade. That mar­ket size embold­ened him to raise his price tar­get on Mod­er­na stock to $112 from $83, after yesterday’s encour­ag­ing news on the first hand­ful of patients in Moderna’s Phase 1 tri­al.

Even if Moderna’s vac­cine becomes the first one available—perhaps this fall, for front-line workers—it won’t be the only one. Pfiz­er (PFE) and its part­ner BioN­Tech (BNTX) are also in the clin­ic with a vac­cine that uses tech­nol­o­gy sim­i­lar to Moderna’s. And oth­er vac­cine approach­es are being test­ed by the likes of John­son & John­son (JNJ) and the vac­cine mar­ket incum­bents Sanofi (SNY) and Glax­o­SmithK­line (GSK). . . .

7. We close the dis­cus­sion with a reminder of the extent to which fed­er­al fund­ing [29] dri­ves the val­ue of Mod­er­na: ” . . . . ‘Instead of wait­ing for the data and then scal­ing up with man­u­fac­tur­ing process … we can make as many dos­es as we can. We are doing both in par­al­lel,’ he said. The com­pa­ny plans to hire [30] up to 150 peo­ple to sup­port the effort. Ban­cel said the com­pa­ny ‘couldn’t have done this’ with­out the fund­ing com­mit­ment from the Bio­med­ical Advanced Research and Devel­op­ment Author­i­ty, which is part of the Depart­ment of Health and Human Ser­vices. . . .”

“Mod­er­na soars after get­ting $483 mil­lion in fed­er­al fund­ing for coro­n­avirus vac­cine devel­op­ment” by Kevin Stankiewicz; CNBC; 04/17/2020 [29]

Moderna’s stock was surg­ing Fri­day after the biotech com­pa­ny announced it has received as much as $483 mil­lion in fed­er­al fund­ing to accel­er­ate devel­op­ment of a coro­n­avirus vac­cine.

Shares of the Cam­bridge, Mass­a­chu­setts-based firm closed 15.4% high­er to $46.85. Dur­ing Friday’s ses­sion, the stock hit an intra­day all-time high of $49.

Mod­er­na CEO Stephane Ban­cel [67] said Fri­day on CNBC’s “Squawk Box [68]” that the fund­ing is par­tic­u­lar­ly crit­i­cal in aid­ing man­u­fac­tur­ing efforts.

“Instead of wait­ing for the data and then scal­ing up with man­u­fac­tur­ing process … we can make as many dos­es as we can. We are doing both in par­al­lel,” he said. The com­pa­ny plans to hire [30] up to 150 peo­ple to sup­port the effort.

Ban­cel said the com­pa­ny “couldn’t have done this” with­out the fund­ing com­mit­ment from the Bio­med­ical Advanced Research and Devel­op­ment Author­i­ty, which is part of the Depart­ment of Health and Human Ser­vices.

Mod­er­na has part­nered with the Nation­al Insti­tutes of Health on devel­op­ment of its Covid-19 vac­cine. Phase 1 human tri­als [69] of the poten­tial vac­cine began in the Seat­tle area in mid-March.

The tri­al was launched in “record speed,” White House health advi­sor Dr. Antho­ny Fau­ci said at the time.

Ban­cel on Fri­day reit­er­at­ed Moderna’s time­line for vac­cine devel­op­ment. He said he hopes to have safe­ty data from the phase 1 tri­al this spring, which could allow it to advance to the next stage in the sec­ond quar­ter of this year.

The phase 1 tri­al is being con­duct­ed with 45 peo­ple, while phase 2 would involve an expan­sion into “hun­dreds of healthy sub­jects,” Ban­cel said.

Devel­op­ment also needs to include a large effec­tive­ness study involv­ing thou­sands of peo­ple, Ban­cel said. Mod­er­na hopes to start that phase in the fall, depend­ing on results from all the pre­ced­ing stages. . . .