‘Why did you guys sell everything?’ Inside the life-and-death struggle to fund
Moderna Inc.
MRNA,
was launched in 2010 by Noubar Afeyan, a Lebanese-born bioengineer running a biotech-venture firm called Flagship Pioneering. He recruited Stéphane Bancel, a Harvard Business School graduate and native of Marseilles, as Moderna’s CEO. Almost immediately, Bancel felt self-imposed pressure to raise enough money so his company could develop drugs and vaccines based on messenger RNA molecules before rivals caught up. In a few short years, he raised billions of dollars in private sales of the company’s shares and Bancel had emerged as the biotech industry’s smoothest and most effective fundraiser.
But there was something about Bancel that raised concerns in parts of the biotech and investment communities. Bancel and Moderna were super-secretive, avoiding conferences and refraining from publishing in scientific journals. Bancel wasn’t a scientist, raising some eyebrows. Some snickered that Moderna was a “VC creation.” These skeptics suggested the company was merely an effort by its founding backers, including Afeyan, to create some hype and bring the company public before exiting with big profits.
In 2015, The Wall Street Journal began a series of investigative stories raising serious questions about a high-flying blood-testing start-up, Theranos Inc., and its chief executive, Elizabeth Holmes. Eventually, Theranos would be exposed as a fraud.
Soon, many on Wall Street and elsewhere were on the lookout for the next Theranos. Some pointed a finger at Bancel and Moderna. Holmes and Bancel were both smooth and telegenic salespeople who had raised shocking amounts of cash, sometimes from investors with limited scientific backgrounds. They ran secretive companies. And weirdly, Holmes and Bancel both favored turtlenecks, à la Apple founder Steve Jobs. It wasn’t a good look.
Safe and effective Covid-19 vaccines are modern science’s greatest achievement. Developed in less than a year, these shots have saved hundreds of thousands of lives and averted more than 1.25 million hospitalizations. The shots, based on revolutionary, new technologies, also represent modern finance’s most important accomplishment. Companies including BioNTech SE
BNTX,
based in Germany, relied on the steadfast backing of global investors as they spent years honing vaccine approaches that finally paid off in 2020 with effective shots to protect against Covid-19.
Cambridge, Ma.-based Moderna received crucial funding from venture-capital firms, sovereign wealth funds, hedge funds and individual investors as it pursued its own work with mRNA molecules in the decade leading up to 2020. The relationship between investors and Moderna was rocky, however. By the time the new coronavirus emerged in late 2019, many on Wall Street had lost patience with the company and its chief executive. The souring investor sentiment, which occurred over a number of years, raised questions about whether Moderna could raise enough money to produce vaccines to stem the pandemic.
‘I felt so bad for him’
Back in January 2017, Moderna CEO Stéphane Bancel flew to San Francisco to speak at a mega…
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