Moderna’s mRNA dreams meet reality with first post-COVID shot

Investors have taken notice. Moderna’s stock dropped 45 percent last year, making it the worst-performing large biotech in the United States. It’s also a popular target for short sellers. Moderna chief executive Stéphane Bancel swats away the skepticism, portraying a seemingly unshakable belief in what he calls the mRNA “platform.”

“The platform is working,” he said at the company’s Vaccines Day, a presentation to investors in late March. “The platform has not only helped already hundreds of millions of people around the world — because billions of people got a vaccine during COVID — but this is just the beginning.” As for Moderna’s RSV shot, it has never gone through head-to-head clinical trials against competitors, so it’s not fair to compare them, according to the company. “We have a very strong efficacy profile,” Bancel said.

Moderna is all in on mRNA. Each of the more than 40 drugs in its pipeline relies on the technology. The company’s new Cambridge headquarters welcomes visitors with a giant screen featuring a rotating mRNA molecule. “Everybody that works here wakes up in the morning thinking about mRNA,” said Kyle Holen, Moderna’s head of development for oncology and therapeutics.

The biotech’s most ambitious goal is to develop personalized cancer vaccines that teach the immune system to fight off the disease. That would indeed be both a scientific breakthrough and could bring in more than $10 billion in annual sales, depending on how many tumors they work in, according to JPMorgan Securities analyst Jessica Fye. Though, in the notoriously fickle world of drug development, these treatments could be years away — if they come to fruition at all.

“We want to stay very focused on mRNA,” Bancel says in an interview.

Most drug makers don’t stake their business on a single scientific approach. Even BioNTech, which developed with Pfizer an mRNA-powered COVID shot, has bulked up its pipeline with other types of treatments. Its first non-COVID product will likely be one that doesn’t use mRNA, BioNTech says.

Bancel’s “maniacal focus” — as former Moderna chief medical officer Tal Zaks puts it — paid off during the pandemic. But it has at times come at the expense of the practicalities of running a company, according to people who’ve worked with him. Some former employees say they grew frustrated with his unrealistic expectations, unwillingness to accept alternatives, and blunt demeanor. Bancel’s demanding leadership style has also led to high executive turnover. The company has gone through two chief commercial officers in three years. In December, Bancel made the unusual move to put himself in the job.

Moderna is bleeding money. COVID vaccine sales have evaporated from almost $20 billion a year to about a third of that. Meanwhile, the company’s nearly $5 billion research and development budget ate up about 70 percent of its 2023 revenue. The company is expected to lose about $3 billion this year and doesn’t expect to break even until 2026.

Bancel’s long-term vision has some investors hanging on — the stock is up about 20 percent so far this year on high hopes for its cancer treatments.

In the short-term, the biotech doesn’t have much new to offer. Eight months ago, Moderna president Stephen Hoge said the company’s goal was to file “very quickly” for accelerated approval for its flu vaccine. It has yet to do so. Meanwhile, a combination COVID, flu, and RSV shot has faded into the background, only mentioned briefly at the end of Vaccines Day.

Moderna spokesperson Chris Ridley said the goal is to seek regulatory approval for the flu shot this year. The triple shot is “still a goal,” he said, but the company is prioritizing the individual components and dual combination shots.

Moderna could scale back its large pipeline to appease those who are restless for a return to profits. Bancel says he’d rather take outside investment than limit his ambitions, even if it means less upside for Moderna. In March, Moderna said Blackstone Life Sciences agreed to provide funding of up to $750 million for its flu program. If a vaccine does make it to the market, Blackstone will get a return based on undisclosed commercial milestones and “low-single digit” royalties.

“We think it’s better for society and for shareholders to partner with somebody rather than leave an asset on the shelf if you can’t afford it,” Bancel says.

In the meantime, he faces an uphill battle in winning RSV contracts. Pfizer and GSK have had a year to establish relationships with pharmacy chains that make up most of the RSV market. Last year, GSK’s RSV vaccine drove about $1.5 billion in sales and Pfizer’s about $900 million. For Moderna, a lot rides on how often public health officials recommend people get the shots. Preliminary data suggests competitors’ jabs may only have to be taken every other year.

Bancel hopes to outmaneuver his rivals through what he calls “customer intimacy.” It’s a strategy he used after the US government stopped buying COVID shots for all Americans in 2023 and Moderna actually had to go out and sell its vaccine commercially for the first time. It helped the company go from 37 percent of the US retail market for COVID in 2022 to almost half last year.