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  • The biotech Moderna has skyrocketed to global prominence, leading the world’s race for a coronavirus vaccine.
  • The Cambridge, Massachusetts-based biotech was founded in 2010 with the ambitious goal to develop a new type of medicine. While its platform remains unproven, it is now being tested under the brightest possible spotlight of a pandemic. 
  • Here’s the inside story of Moderna’s rise, from an offshoot of stem cell research to routinely shattering funding records on its way to biotech’s top ranks. 
  • The biotech has spent a decade working to meet this moment, and investors have sent its stock soaring to a valuation of almost $30 billion. The next few months will be a defining period for the future of Moderna. 
  • Visit Business Insider’s homepage for more stories.

In its short corporate history, Moderna has grown accustomed to breaking records.

A $450 million funding round in 2015 was a record for the biotech industry. Moderna raised even more the next year. And its 2018 initial public offering was the largest ever for a biotech.

Then, this year, the coronavirus struck. Moderna lapped the drug industry in crafting a coronavirus vaccine candidate, zooming past Big Pharma competitors that dwarf the company in size and resources.

Moderna’s experimental serum was the first to begin human testing in mid-March. Now, the biotech is aiming to be ready this fall for emergency use, a development timeline without precedent.

In the process, Moderna has continued to do what it’s excelled at since its founding: woo investors with an ambitious narrative of creating a new class of medicines. The company’s vision can threaten to outpace the business fundamentals, particularly now, as the hopes of a coronavirus vaccine have swelled Moderna’s valuation to $30 billion.

This week alone, the company put out preliminary, yet seemingly positive data on its coronavirus vaccine. Then, it raised more than $1.3 billion by selling new shares to investors.

Moderna still has no approved drugs on the market. Instead, Moderna has pitched the world on the promise of its unproven technology as a new class of medicine — messenger RNA.

The technology could still prove to be a flop in humans. Moderna’s preliminary data left many questions unanswered, including whether the vaccine can actually prevent people from getting the coronavirus. And it was provided in a press release, not published in a scientific journal.

The next few months will transform Moderna, for better or worse, as the vaccine goes through additional rounds of human testing. As the world waits on a vaccine to save itself from this pandemic, the biotech has become a household name and a leading hope. Moderna has long been one of the buzziest startups in the wonky world of biotech.

Now, in taking on the coronavirus, it has gone mainstream and become of the most consequential startups of all time. Is it ready for the moment?

In 2007, the Japanese researcher Shinya Yamanaka found a breakthrough in medical research. He turned regular human skin cells into stem cells, which can grow into a wide range of cells.

Yamanaka envisioned his work could be the basis for transformative treatments for a wide range of ailments, from Parkinson’s to diabetes. It won him a share of the 2012 Nobel Prize in medicine.

There was a major limitation that flummoxed Yamanaka and the field of stem cell researchers. The method of reprogramming cells required using a virus that could cause DNA mutations. 

Derrick Rossi had an idea for Yamanaka’s predicament: avoid the DNA entirely. A group of his researchers at Harvard found messenger RNA solved this quandary — allowing cells to be altered without the risk of mutations

Rossi wanted to take his research further. Another Harvard researcher named Timothy Springer recommended he contact Robert Langer, an MIT professor who has helped start dozens of biotechs. A legend in the industry, it’s well-known in Cambridge that academics who want to take the leap into industry should talk to Langer.

Robert Langer moderna

Portrait of Robert Langer in his Cape Cod residence in North Falmouth, MA on April 25, 2020.

Barry Chin/The Boston Globe/Getty Images


Rossi came to Langer’s office, pitching him on his research and the idea that it could revolutionize tissue engineering. 

Langer said he thought the findings could go much further, he recalled in a recent interview with Business Insider. 

“What you could probably do is make this a whole new way of making drugs, vaccines, almost anything,” Langer said. 

Rossi asked Langer to help him start a company. The young Harvard scientist also pitched another legend in biotech: Noubar Afeyan.

Afeyan founded and runs Flagship Pioneering, a firm that straddles the line between venture capital and startup incubator. Flagship specializes in big bets, hunting through scientific literature for cutting-edge ideas that could be built into new types of medicines. Often, these ideas fail. But when they hit, they can carry huge impact. 

Involved in biotech since the industry’s early days in the 1980s, Afeyan has helped launch dozens of companies and advised hundreds more. In an interview with Business Insider, he recalled meeting with Rossi in Langer’s MIT office. 

Afeyan said he and Langer mused about what it would take to see if these findings, which worked in a culture of cells, could actually work in animals and humans. “It was pretty clear to us no one had done such work before,” Afeyan said. Flagship decided to start testing the concept in-house in 2010.

One early hurdle was the human body’s immune response. The body would typically identify mRNA as a virus and dispatch virus-fighting proteins to destroy it.

With months of tinkering, the cadre of researchers found a way to overcome this response. Around that time, Afeyan said, he had enough confidence that it was a “matter of engineering” to get mRNA to work. Moderna was formed in late 2010.

That name would come later — Moderna was incorporated as LS18, Inc., named in Flagship’s typical style of creating numbered companies until they are ready to take a leap forward. (Flagship is now working on company numbers 74 and 75, Afeyan added.) 

Unlike most biotechs, Moderna wasn’t taking a concept from an academic lab and translating it to humans. It was still doing much of the basic research and discovery work.

“From day one, we were absolutely hellbent on building a platform which could give rise to dozens and dozens of drugs,” Afeyan said.

From the first days, Langer saw the potential for Moderna to follow the path of some of biotech’s giants, like Genentech. The California biotech developed several revolutionary cancer drugs, eventually being bought by Swiss pharma company Roche in 2009 for $47 billion. 

“I thought this is a technology, like Genentech’s at the time, that could change the world,” Langer said.

By that point, Afeyan had been trying — and failing — to recruit the young CEO of a French diagnostics firm to run the company.

Stephane Bancel had joined the board of one of Flagship’s testing companies a few years prior, and Afeyan said he noticed his intensity and creativity.

“Even more importantly, perhaps for me the most, is the combination of paranoia and optimism, which I call paranoid optimism,” Afeyan said, comparing it to a car having both gas and brake pedals. “That duality I could see in him.” 

With the vision of Moderna, Bancel agreed to join, starting off as a board member and becoming the company’s first CEO in 2011. 

Noubar Afeyan, Flagship Pioneering CEO and Moderna cofounder and chairman

Flagship Pioneering CEO Noubar Afeyan

Flagship Pioneering


The initial team was set, and Moderna aimed for the highest ranks of biotechs: creating a new class of medicines that can help treat previously untouchable diseases.

A decade into the Moderna experiment, Bancel remains CEO, Afeyan is chairman and Langer still sits on the board. Rossi eventually left to launch other biotech startups. 

“I feel certain that modified mRNA therapeutics will be used to treat many dozens of disease in the future,” Rossi said in a 2014 interview. “Ten years from now, there will be several modified RNA drugs in patients. In twenty years there’ll be tens of them.” 

The first few years of its existence Bancel has called ‘Moderna 1.0.’

“Every biotech company ends up being discussed as a romantic struggle-against-the-odds,” Afeyan said. “I think it would be a stretch to say it was cash-strapped … I would say it was really rather more strapped for talent.”

STAT’s Damian Garde reported in 2016 on high levels of turnover and a “caustic work environment,” describing Bancel as a demanding CEO expecting too much from early science, where failures are commonplace.

The early years of Moderna were also shrouded in secrecy. As mystery and hype built around the company, so did investor cash that jolted Moderna into a mode of aggressive growth that continues to this day. 

Afeyan and Langer dispute the characterization of Moderna’s secrecy and difficult work environment. Afeyan said Moderna was an easy target because it had massive ambitions, and the reporting mistook secrecy for a lack of science. Langer said jealousy drives many of Moderna’s critics.  Moderna has consistently ranked as a top biopharma company to work for, according to an annual employee survey conducted by the publication Science. 

In 2013, Moderna’s technology was still only being tested in labs, not people. Still, AstraZeneca, one of the biggest drugmakers in the world, agreed to invest as much as $420 million, providing crucial public validation for the young biotech.

The escalation in cash raises from there is breathtaking, from a $110 million round completed in 2013, $450 million in 2015, and $474 million more in 2016. In the later rounds, Moderna brought in new investors such as Fidelity and Viking.

It wasn’t until after the AstraZeneca deal that Moderna contemplated vaccine development. All its work previously centered on disease treatments.

Moderna unveiled its first round of candidates, including Zika and flu vaccines, in January 2017 at the J.P. Morgan Healthcare conference. A few months later, Moderna published the first human data from its platform.

The funding kept pouring in, with Moderna completing a $500 million round in early 2018. Later that year, executives filed paperwork to go public. By that time, the company had raised more than $2.5 billion and gained the attention of the drug industry’s biggest players, inking deals with Merck and Vertex Pharmaceuticals.

The December 2018 IPO was the largest for any biotech: Moderna took in $563 million in net proceeds and was valued at roughly $7.5 billion.

By the end of the decade, Moderna had sprung up from Rossi’s stem cell research into a biotech force. Then the 2020 pandemic launched Moderna into a new stratosphere of attention. 

COVID-19 Vaccine test 1

A pharmacist gives Jennifer Haller, left, the first shot in the first-stage safety study clinical trial of a potential vaccine for COVID-19, the disease caused by the new coronavirus, Monday, March 16, 2020, at the Kaiser Permanente Washington Health Research Institute in Seattle.

AP Photo/Ted S. Warren


At the start of 2020, Bancel mapped out a year focused on a vaccine for CMV, one of the world’s most common viruses. He was counting on that shot to be the company’s first, reaching the market in 2021.

Bancel laid out his ambitions in a letter to shareholders on January 6. That same day, while vacationing in the south of France with his family, Bancel was scrolling through headlines on his iPad when one story caught his attention: Health Officials Work to Solve China’s Mystery Virus Outbreak

The Wall Street Journal story described a “mystery viral pneumonia” that had infected 59 people in China at the time.

After reading the piece, Bancel emailed an NIH vaccine director Moderna works closely with about the virus. Within a few days, NIH researchers had identified it as a new coronavirus and had its genetic sequence.

Moderna CEO Stephane Bancel

Moderna CEO Stephane Bancel attends a meeting with President Donald Trump, members of the Coronavirus Task Force, and pharmaceutical executives in the Cabinet Room of the White House on March 2, 2020.

Andrew Harnik/AP Images


The next few weeks were full of “crazy hours, short nights,” Bancel recalled in a March interview from his office at Moderna’s Cambridge headquarters. Working alongside the NIH, roughly 100 Moderna employees developed a vaccine candidate in record time, becoming the first to start human trials in mid-March. 

In the first lap of a marathon race, Moderna’s technology excelled. Its existing collaborations with US health officials helped it move faster than anyone else, building off research they had already done together on a different coronavirus that causes Middle East Respiratory Syndrome, or MERS.

mRNA vaccines deliver genetic instructions to human cells, providing a blueprint of the vital proteins the body needs. In the case of the coronavirus, Moderna has targeted the spike protein, which the virus uses to latch onto healthy cells and infect them. The vaccine instructs the body to produce this protein and form an immune response to fight the virus and prevent infection.

That’s the theory, as there are no approved mRNA vaccines or drugs. The technology is so new it hasn’t been tried for any disease in a large-scale clinical trial, which would demonstrate if it actually works.

Within the first few months of 2020, Moderna’s fate became clear. If its mRNA technology works, the coronavirus vaccine would be its first real-world use. The biotech could help halt a pandemic. 

Working closely with the US government, Bancel has mapped out a plan to rapidly test the vaccine in hundreds, and potentially thousands, of volunteers by this fall. At the same time, Moderna is ramping up production to have tens of millions of doses by year’s end, eventually scaling to produce 1 billion doses a year.

From the start, Moderna has talked about itself more like a software company than a typical drug company.

Rossi pitched the earliest investors on mRNA as a platform, with diseases becoming its “killer apps.” Bancel refers to the early years as “Moderna 1.0,” like an antiquated version of a computer program. The company has recently emphasized the “plug-and-play” nature of its tech, mimicking the language that drove Microsoft to prominence in the 1990s. Afeyan, recalling the first months of testing the mRNA concept at Flagship, likened it to matter of engineering. 

It’s not too much of a surprise, given that Bancel, Afeyan and Langer all are engineers by training instead of biologists. Bancel holds a master’s degree in engineering, Afeyan has a Ph.D. in biochemical engineering, and Langer is the most cited engineer in history, according to Google Scholar. 

Like the visionaries behind Facebook, Uber, and Amazon, Moderna’s core idea wasn’t totally novel or impossible to imitate. Several other biotechs are crafting mRNA vaccines, with some companies having worked on the technology for even longer than Moderna.

Bancel’s company is aiming to distance itself from the pack with its growing size and scope. Like Amazon, it isn’t afraid to pour tremendous sums of money into its projects and dream big. By the end of March 2020, Moderna had racked up a deficit of $1.6 billion in its decade of research and experiments.

Most biotechs start with a single project to test out a concept like mRNA. If a drug company can show it works in one disease, it can take that data to investors and argue it should work in others. 

Moderna hasn’t waited around to scale up. From the early years, Moderna executives have outlined dozens, if not more than 100, ongoing preclinical projects. It’s not just crafting vaccines, but also attempting to tackle cancer, therapeutics, and regenerative medicine.

Moderna has further distanced itself by building a state-of-the-art manufacturing facility, repurposing an old Polaroid plant in Norwood, Massachusetts.

Moderna lab facilities biotech

Tablets allow Moderna employees to monitor daily operations.

Moderna


Opened in 2018, the 200,000-square-foot plant is custom-built for the fast-moving firm. Business Insider toured the facility in March, seeing how the coronavirus vaccine candidate was crafted and manufactured.

Nearly all the equipment is on wheels to be quickly reconfigured for the dozens of different ongoing research projects. Lab rooms are paperless, to expedite documentation processes that take typical pharma companies weeks to process.

It’s here where mRNA, which Moderna dubs “the software of life,” has taken shape. It’s here where the coronavirus vaccine candidate was crafted, produced and tested throughout January and February before being shipped off to the NIH for human testing to begin. 

First, Moderna has to prove its coronavirus vaccine works. Then, it’ll face another massive challenge: manufacturing and selling it.

The vaccine market is dominated by a handful of large pharmaceutical giants. GlaxoSmithKline, Merck, Pfizer, and Sanofi accounted for more than 80% of the $35 billion in 2019 vaccine sales, Moderna said in a recent presentation.

To support its research and prepare to pump out millions of vaccine doses, Moderna has raised $1.8 billion in stock sales in the first few months of 2020. It also landed a funding deal with the US government to accelerate its coronavirus vaccine that is worth nearly $500 million. 

Since the start of the year, Moderna’s stock has more than tripled, valuing the company at about $25 billion. Langer owns a stake worth almost $800 million, while Bancel’s holdings are worth about $500 million.

Living up to its lofty valuation will hinge on success in the coming months, as the world watches. Under the spotlight of the pandemic, Moderna is leading the biotech industry in the eyes of the public. Its behavior is now under a heightened level of scrutiny.

When it released preliminary human results on May 18 for its experimental coronavirus vaccine, the biotech didn’t provide any actual data. Instead, it described the results in general terms, such as saying that eight of the first participants all registered some level of virus-fighting antibodies. Executives declined to disclose detailed data for the time being, saying the US National Institutes of Health — which ran the study — would do so later in a scientific publication. 

William Haseltine, a former biotech CEO and Harvard Medical School professor argued in The Washington Post this was “publication by press release,” and that it is “damaging trust in the fundamental methods of science and medicine at a time when we need it most.”

Afeyan said the data is in the hands of the National Institutes of Health, which ran this early study. He defended the Monday release, saying the company had learned about the interim results Thursday night and considered it material information. The company isn’t hiding negative results, Afeyan said, but allowing the NIH to release the data when it wants, as it controls the study — not Moderna.

If Moderna conquers the coronavirus, its mRNA platform will be well on its way to revolutionizing medicine and realizing the potential it first set out to achieve a decade ago.

But the backlash could be equally dramatic if Moderna’s vaccine stumbles. Even with all the confidence of a biotech that has smashed record after record, the billionaires running Moderna are humble in the face of the virus. 

“There’s a lot of things in the full course we don’t know about this disease,” Afeyan said in an April interview. “That may be problematic as we enter advanced clinical trials. We just don’t know what we don’t know.” 

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