Considering $ 500 million, Moderna presents plans for Biotech's largest IPO

Xconomy
Boston –

One of the biggest bets in the history of biotechnology is about to be tested on Wall Street.

Moderna, the high-flying but secretive developer of messenger RNAs, filed Friday afternoon documents describing his long-awaited IPO. In its prospectus, Moderna set an initial target of $ 500 million, making it the largest stock market IPO in the history of biotechnology. This figure is subject to change as the company approaches its beginnings.

Moderna will trade on the Nasdaq under the symbol "mRNA", if this completes the offer.

The IPO of Moderna is expected for years. Founded in 2010 by Flagship Pioneerering, Moderna, based in Cambridge, Massachusetts, is developing synthetic messenger RNA-based drugs to help the body produce protein that fights the disease. The potential could be huge, paving the way for a whole new way to treat diseases. But the method has not been proven in humans, and Moderna is not the only company to work on it – others like CureVac, Translate Bio (NASDAQ: TBIO) and BioNTech are too.

What made Moderna so unusual is that, while remaining a privately held company with little clinical data, the company had $ 1.8 billion in risk funding and about $ 800 million Partnerships with Merck (NYSE: MRK), Vertex Pharmaceuticals (NASDAQ: VRTX), AstraZeneca (NYSE: AZN) and Alexion Pharmaceuticals were valued more than $ 7 billion earlier this year.

At the time of its IPO, Moderna had $ 1.2 billion. However, while its partnerships and grants had generated revenues of about $ 205 million in 2017, it had suffered a net loss of about $ 256 million. The company has invested a lot in its technology. In 2017 alone, it has spent $ 410 million on research and development and has spent $ 865 million since its inception, says the prospectus.

All of this is part of a high-stakes strategy of Moderna and its sponsors. The company has collected all this money and has remained private for years, even in the longest and most successful IPO in its history. This allowed Moderna to set up a massive organization of 680 employees and change its strategy – for example, to create a group of short-term drug companies' affiliates – without having to watch every move in the public markets closely.

The idea is to pay a large group of investors by achieving large scale. For example, Lorne Kim, Moderna's CFO, told Xconomy earlier this year that she was selling investors on a large scale. Unlike an ordinary biotechnology company, Moderna has a portfolio of 21 programs, of which 10 are intended for testing. Kim said at the time that Moderna was aiming to become a company worth more than $ 50 billion. Only four biotechs – Amgen (NASDAQ: AMGN), Gilead Sciences (NASDAQ: GILD), Celgene (NASDAQ: CELG) and Biogen (NASDAQ: BIIB) – are currently worth it.

"We say that we can draw an image that articulates a disproportionate return over time, and that this disproportionate return does not come from a single medication that passes from its side to the approval, but rather from A technology that is advanced over time, "said Kim on time. "What matters to investors is: can we offer this type of improvement? We believe we can. "

However, this strategy has reinforced the anticipation of what is really under the hood of Moderna, given its substantial success in recent years. This goes against the typical story of biotechnology nowadays, when it is common for companies to become public after a series B or C round of financing, even without evidence that their drugs work in tests on humans. And this has made Moderna the target of much envy and skepticism. "If all this is played, it will be great and brilliant," Alexis Borisy, partner of Third Rock Ventures, who is not part of Moderna, told Xconomy. "If that's not the case, there will be a lot of people with schadenfreude."

There are many challenges to overcome. It is unclear whether the manufacture of mRNA-based drugs is safe and working well, and the FDA has never evaluated these types of drugs before, which has made the evolution of the regulation uncertain. Moderna in his prospectus. In addition, although Modern's most advanced program is for some form of heart disease, many of its other programs are vaccines, a lower-margin activity than other types of drugs. In its prospectus, Moderna says it has "observed an activity" in the Phase 1 trials of six of the seven clinical programs – four of which are vaccines against influenza, chikungunya and respiratory syncytial virus. An experimental vaccine against Zika did not work. Other experimental vaccines against cancer, drugs against phenylketonuria, Fabry disease, etc., still have to produce data on human volunteers.

Flagship and AstraZeneca are cited as the main shareholders of Moderna, although the prospectus did not specify their stakes.

Here's more about Moderna, its evolutionary strategy over time, and mRNA therapies.