leave Moderna free to focus on making its technology platform better, and executing on its partnerships.
“If you really want to make drugs, which we do, and if you want to be the best mRNA technology platform in the world, which we do, trying to do those with the same people is almost impossible,” he says. “Those two things are very, very different from an execution and culture standpoint.”
On one hand, this means that Moderna would never reap all the financial rewards from its mRNA drug creation work. On the other hand, it can keep focused, it won’t have to pay big money to run expensive clinical trials, and it can spread out the technology risk among its ventures. And Bancel says that the company has “a lot of means” to finance itself without, say, the full revenue stream of a big mRNA drug down the road. The AstraZeneca partnership alone has three technical milestones worth $60 million apiece that aren’t related to any of the drug programs. And AstraZeneca has options to 40 programs that each come with their own set of milestones (Alexion has 10). Moderna plans to ink more partnership deals, and could theoretically flip shares in some of its ventures for cash if necessary. The new ventures would be funded by the partnerships and financing dollars Moderna has raised.
That being said, “Moderna, just by cash flow from the drugs the partners have, can be financed for many, many years,” according to Bancel.
Bancel says the venture creation unit will work through both a “top down and bottom up” approach. Sometimes Moderna’s board will take some of the things it’s learned about the technology and feed ideas to the incubator. Other times the unit’s small team of scientists will just work through a backlog of ideas to test—and if one fails, they’ll just move on to the next one. If an idea leads to a drug prospect that proves itself in vitro, then in healthy animals, and then in diseased animals, Moderna might form a company around it, hire some people, finance it, and spin it out. Scientists coming up with those ideas could stay with Moderna, or leave with the idea if they’re intrigued. Then, once the company is ready to move out, it’ll set up shop somewhere else in Kendall Square.
Moderna’s ownership plan for each spinout will evolve over time. As of today, it’s financing these startups completely, giving them each a portfolio of intellectual property. Moderna poured $20 million into Onkaido, for instance, gave it IP to some 15 programs, and owns 100 percent of the company’s stock. And it could do a variety of things with Onkaido—assuming the company progresses, of course—such as try to bring in other investors, form a partnership, sell it, take it public, or just keep ownership. Those types of decisions are fluid, and will vary from company to company, according to Bancel.
“We’re trying to stay very nimble and not lock ourselves in any model,” he says. (Onkaido, he adds, will soon announce a new president— a “very experienced oncology drug hunter” from the West Coast who Bancel declined to identify.)
Bancel wouldn’t divulge the specifics behind the spinouts, either—how many Moderna plans to reveal, for example, or which types of diseases they’d be going after. But he did say that others aside from Onkaido have already been created—just not announced yet—and that Moderna hopes to form a few more. Each one is working on things in different practice areas, different modalities, and different routes of administration; some are developing drug prospects that would be injected just under the skin, others intravenously. Further, Moderna has committed to spending about 40 percent of the $100 million it plans to invest in its technology this year on venture creation (with the rest going into the platform). The ventures will account for the majority of Moderna’s investment dollars next year, however, Bancel says.
Of course, Moderna is still a ways away from proving itself, and showing that mRNA drugs can really work. Bancel still isn’t saying, for instance, when the first Moderna drug would enter its first human clinical trial. But Moderna has already forged one of the most unusual biotech paths: from fledgling startup to company creator in the span of just over three years, all without getting a drug into the clinic.
“There’s still a long way to go,” Bancel says. “It’s only the end of the first inning, but the first inning’s not so bad. And given the talented people we have, given we have more than $413 million in the bank as we speak, I like our chances.”
