Kendall Square has found its newest biotech incubator. Moderna Therapeutics just had no idea it’d be the one running it.
Moderna, the high-flying, privately held startup that raised more than $400 million through a string of deals and financings over the few years without even having a drug in the clinic yet, is moving into a big new headquarters today at 320 Bent Street in Cambridge, MA. That’ll add a lot more office, lab, and manufacturing space for Moderna, a company that now has some 170 employees just over three years after its inception, and plans to add another 20 to 40 more jobs by the end of the year, according to CEO Stephane Bancel.
But more importantly, Moderna is revealing what’s been a seismic shift in its strategy over the past year. Whereas Moderna’s initial plan was to create both a messenger RNA (mRNA) platform and develop its own mRNA drugs when it started up a few years ago, it has quietly changed that focus.
Now, Moderna aims to conceptualize and manufacture those drug prospects in-house, and then hive groups of them off into individual spinout companies that will leave the Moderna nest and develop the drugs—the first example being Onkaido Therapeutics, the cancer drug spinoff created in January. This will be done through what the company is calling “Moderna Venture Incubator Laboratories,” a unit that will be set up in its new headquarters with lab and office space and a small team of scientists “whose only job is to think of crazy ideas” and test them, according to Bancel.
“Moderna will most probably never develop and sell a drug,” Bancel says.
Rather, the mRNA drugs will either be licensed out to strategic partners, or turned over to incubated startups, to do the dirty work.
If you take a look at Moderna’s website, for instance, you’ll see a group of preclinical programs for inherited genetic disorders, hemophilic and blood factors, and a separate group that is being developed as part of its alliance with the Defense Advanced Research Products Agency. All of those will be funneled into startups, Bancel says.
As Xconomy readers well know, Moderna was launched by Flagship Ventures in 2010, stayed quiet for a few years, and then burst into the limelight last year by amassing a monster war chest through a string of deals with the likes of AstraZeneca (NYSE: [[ticker:AZN]]), Alexion Pharmaceuticals (NASDAQ: [[ticker:ALXN]]), and DARPA, and closing a big private financing. All told, those moves have left Moderna with $413 million in the bank right now, Bancel says, to plow forward with its audacious plan to make injectable mRNA molecules that trigger the production of protein drugs within the body—a completely new drug modality, if it works in humans.
Moderna has been using its status as a private company to keep many of the details behind its technology close to the vest, such as how it can deliver these mRNA molecules into the body without setting off alarm bells in the immune system. And Bancel has told Xconomy previously that the company wanted to make sure to optimize its technology, rather than rush into clinical trials before it was ready.
It’s also been very quiet about what its strategy is. Sure, the deals it signed with AstraZeneca and Alexion gave it over $300 million in combined up-front cash and a whole lot of work to do—the two deals cover up to 50 potential drug programs combined, and Bancel says that eight AstraZeneca programs in cancer and cardiovascular disease are underway, with 15 more in the same two fields coming at the end of June.
But that cash has given Moderna many strategic possibilities, and ultimately, forced it to make a decision on its identity. Would it use the cash, and more partnerships, to finance its own pipeline? Or would it stay out of development, and the massive financial commitments that come with it, altogether?
Bancel says he came to a realization after the company inked the AstraZeneca partnership: Moderna would stretch itself too thin if it tried to work on both its platform and its drugs. If Bancel drove his team hard on both, both would suffer. Before the AstraZeneca deal, Moderna was “mostly” working on its platform, he says, and just had a few drug programs it was kicking around, really to establish proof of concept rather than take those forward into development. Afterwards, both efforts kicked into high gear as the pressure of living up to the AstraZeneca deal set in.
“We had a lot of tension within the company—very positive tension, not a crisis—but there was a time where we were just struggling as a team,” he says. “It was really hard on everybody to have to think about those two things that are very different, very orthogonal.”
So Bancel talked it over with the board, and decided that the best approach would be to create a venture unit, use it to start up a bunch of companies, and hire some “black belt drug developers”—people who have lived and breathed drug development—to lead them, and take some Moderna drug prospects with them when they’re ready to be tested. That, in turn, would
