Moderna's Financials

https://littlebitofeverything.substack.com/p/moderna-financials

by currio • 5 years ago

74 64 5 years ago

littlebitofeverything.substack.com

axg11• 5 years ago

As mentioned in the article, pharma is high-risk high-reward long term investment. Many companies tried and failed to produce an effective COVID vaccine (CureVac, Merck). Those companies invested R&D dollars well before the pandemic and further invested in recent trials. When a pharma company finds a winner, of course the margin will be great, the raw materials for most medicines are cheap relative to the value they bring. But the margin doesn't account for the 10+ years of R&D spend that put Moderna into the position it is in today.

ackbar03• 5 years ago

Is there any good/better way to derisk this process? It's always seemed quite inefficient to me

cshimmin4• 5 years ago

It seems that at some level, that is exactly the purpose of (publicly-funded) basic research on the academic side. For example, the idea of messenger RNA therapy has been around for decades in the academic literature, and of course this idea was only possible with preceding advancements in general biology.

osigurdson• 5 years ago

https://www.schrodinger.com/

csours• 5 years ago

Protein folding helps some. Genomics help some. Computer models help with pharmacokinetics.

But all these things help you get to the expensive part more easily: testing safety and efficacy.

https://www.science.org/content/blog-post/big-problems

https://www.science.org/content/blog-post/ai-and-drug-discov...

https://www.science.org/content/blog-post/another-ai-generat...

giarc• 5 years ago

Read up on Andrew Lo. He used his background in finance to develop better biotech financing models.

https://www.bloomberg.com/news/articles/2021-02-05/out-of-gr...

cehrlich• 5 years ago

Currently, no. Bringing a new drug to market takes several years and a billion dollars. And I haven't seen any compelling evidence that anyone is working on a "solution".

A large part of the cost and complexity is the clinical trials, of which several stages of increasing complexity are required to get FDA approval. While it might seem inefficient, it's also the reason why vaccines work so well and have such small side effects - about half of Phase 3 candidates either fail the clinical trial or are rejected by the government for some other reason.

Each round of clinical trials requires significantly more money than the one before it, but it's also arguably easier to get investors on board in the later rounds as risk is lower. Smaller pharma companies often aim to get bought outright before their product is brought to market because it makes more sense for everyone involved.

Maybe someone will come up with an algorithm that lets us simulate clinical trials with sufficient precision, but that seems like a far-off sci fi fantasy to me.

ethbr07• 5 years ago

But the margin doesn't account for the 10+ years of R&D spend that put Moderna into the position it is in today.

This and the associated economics seem like the central problem with biotechnology funding.

The timescales and likelihood of success preclude anything under the size of government investment. Even Gates can only nibble around the edges.

refurb5• 5 years ago

Private investment in biotech dwarfs what the US puts in right now.

US gov't (NIH) = $41.6B (not all is for biotech) Biggest pharma (PhRMA members) R&D = $83B VC biotech funding + follow-on rounds = $62B

So private funding is ~3.5x what the gov't spends today.

refurb5• 5 years ago

"A company that made a massive, risky investment that was successful has very high margins"

Is this really earth shattering?

yunohn4• 5 years ago

You must be new here. I think you’ll be quite disappointed by the rest of HN posts - rarely are they earth shattering.

ghego1• 5 years ago

And this, for me, is one of the reasons why I keep coming back to HN. In a word were sensational news are the norm, and clickbait titles are everywhere, HN stands out as one of the most reliable and accurate places to find information

refurb5• 5 years ago

Actually plenty of HN posts are pretty interesting and offer perspectives that you don’t come across everyday. Not earth shattering, but more than maybe an obvious observation.

mehrdada• 5 years ago

An interesting economics exercise would be to evaluate the perverse incentives that could be created when the existence of a company is tied to turning one-time vaccine purchases into subscription revenue, and how to prevent/control them.

015a• 5 years ago

For sure. Its rather convenient for Moderna that the vaccines will probably need to be re-administered every year. Which isn't to say that it could be better, just that it isn't, and that's very convenient for them; I bet the creators of the once-and-done MMR vaccine are shooting themselves in the foot, think of how much money they're missing out on.

Or, jeeze, even one dose every year isn't enough! That's very convenient for Moderna. You need two, maybe even three of them. Why not four? Well, hold on there, the science says its two. Until you start digging in to why, precisely, its "two" at "Xmcg dosage" spaced "Y weeks" apart and you realize that the "science" was really only a byproduct of their phase 3 trials, which were rushed, encountered different variants of COVID, and all sorts of other variables. The paperwork was justified with science; science does not justify the paperwork.

Incredibly convenient for Moderna's shareholders how the Federal government is now mandating that everyone in the United States who, I don't know, wants to, you know, work, now has to get vaccinated. Well, Moderna and Pfizer. You get two choices, really, and that means there's competition. Apple or Google. AT&T or Verizon. Moderna or Pfizer. Take your pick.

Its normal to look at this situation and feel an existential dread about our society's future. How its looking more and more likely that we're spiraling toward some dystopian cyberpunk blade-runner judge dredd-esque corporatocracy. Democracy is dying, if not already dead. But, those fears are absolutely unfounded, because they would require that human society be able to survive the next killer virus, global warming, decreasing male fertility, critical supply-chain shortages due to an increasingly global trade network, global nuclear or non-nuclear war, hyper-inflation in an IMF reserve currency, democratic political polarization...

Really looking forward to the new Dune movie though. That should be good.

cshimmin4• 5 years ago

There are a lot of factors that determine the duration of efficacy of a vaccine. Broadly speaking, you can lump these effects into 1) decaying immune response and 2) mutating disease vectors.

For number 1), what you have to know is that the human immune system is a goofy non-linear Rube Goldberg machine. It's not something that an engineer would come up with. Some vaccines work by promoting an ongoing immune response to certain proteins. You can think of the antibodies as like "wanted" posters, and when a real virus with matching features is detected, it sets off your immune system. But if those proteins are passively introduced, they will decay in your bloodstream over time. Some proteins will hang around longer, others do not, perhaps because it just happens to be structurally similar to some protein that is metabolized by naturally present enzymes. There are also crazy feedback loops that can keep your immune system primed by synthesizing the antibodies from a sort of "memory". Look at the B-cells, they basically pick up any random proteins they think are junk, learn how to synthesize new proteins that stick to it, and then it wears all those proteins around like a hat. And when it's hat sticks to stuff, it tells some other cell to start making lots of party hats for all the other white blood cells to wear so they can sweep up the foreign substances. But these feedback loops are not always stable and can also fade with time. Some antibodies are more stable than others, and some just need a much lower blood concentration to be effective. It's really hard to predict, especially with new diseases.

The best vaccines work by having an actual live virus that lives and replicates inside your body, sometimes for decades. These are your "one-and-done" vaccines, and they're actually really hard to make! You basically have to engineer a virus that lives inside of you, forever, but doesn't hurt you. Instead, it just looks sufficiently similar to a different virus that could hurt you, and it keeps your immune system primed with antibodies to keep the virus in check if you are exposed to it.

Number 2) is the reason we have to get a new flu shot every year. The virus mutates very rapidly and different strains can mix-n-match easily. The Covid virus is already mutating into several variants of concern, and because people are not getting the vaccine which is effective for the strains that are out there now, this will likely become a reason why we have to get regular covid shots.

The upshot of all of this: we had an emergency and needed a vaccine fast. We've come up with two solutions so far: non-replicating adenovirus vaccines (such as AstraZenica, sputnik, etc), and the mRNA ones (Pfizer and Moderna). Both of these work by basically introducing a dead protein into your system, which teaches your immune system how to identify Covid and start attacking it before it can take hold and do damage. But as you can see, it's hard to say how long this can be effective before it needs to be renewed.

Anyone who doesn't like the idea of getting follow-up shots should get to work on making a one-and-done, live, replicating Adenovirus vaccine! But they had better hurry up because if situation 2) takes hold, you're going to need a new shot every year anyways.

knownjorbist• 5 years ago

But, those fears are absolutely unfounded, because they would require that human society be able to survive the next killer virus, global warming, decreasing male fertility, critical supply-chain shortages due to an increasingly global trade network, global nuclear or non-nuclear war, hyper-inflation in an IMF reserve currency, democratic political polarization...

Growth is a constant and we are not putting the genie back into the bottle. All of these are addressed in some capacity by embracing and enhancing globalism and multilateralism. Working together towards empathic, transnational societies is the only real sustainable way forward. Regression into isolationist fiefdoms with autocratic or monarchic leadership is simply unworkable and not going to happen. I am continually saddened when I see outright or implied support of this kind of thing on HN of all places. The "intellectual dark web" has really done a number.

bigodbiel2• 5 years ago

This is an important point to make. How aware were they of necessitating boosters, specially on a bi-annual interval? And if so, what were the expected chances of such happening?

zetazzed• 5 years ago

Pirates of the Caribbean: Dead Man's Chest made $1.07bln global revenue. So Moderna made roughly 4 Dad Man's Chest's of revenue this quarter for their incredibly innovative mRNA vaccine, given to tens of millions of people, saving tens of thousands of lives. A truly sweet deal for society at large.

Source: https://en.wikipedia.org/wiki/List_of_highest-grossing_films

throwaway2048• 5 years ago

or to look at it another way, how low the reward is for genuinely world changing things vs fluff

RosanaAnaDana• 5 years ago

So I'll take it you didn't like 'At Worlds End'

moksly• 5 years ago

It’s not really fluff, it’s circus maximus because when you paralyse the masses with entertainment they won’t have time to realise how terrible their lives are compared to the elite.

jazzyjackson• 5 years ago

fluff has a known good ROI

changing the world is very risky, might not be as much of an upside as you expect

HPsquared• 5 years ago

The rule is "Cost < Price < Value"

TheRealSteel• 5 years ago

Or, alternatively, the vaccine is worth roughly 2/3 of GTA V

cshimmin4• 5 years ago

This seems like a very short-sighted take at best. Moderna has been around for over a decade. Their goal from the start was to commercialize mRNA therapy, targeting a variety of therapeutic applications such as heart disease and cancer. I don't know if viral immunization was ever even on their radar before Covid happened. The point is, they have been working for a long time to bring mRNA tech to fruition, and now they have successfully demonstrated they can do it. Their business model going forward isn't going to be just collecting rent on Covid vaccines.

Moto7451• 5 years ago

This is spot on. My brother is a candidate for one of their cancer treatments once it makes it to a wider testing phase. They didn’t just come up with that in their spare time this year. That’s a long time in the works.

kylehotchkiss• 5 years ago

Wishing him a successful and speedy recovery!

profmonocle• 5 years ago

Their goal from the start was to commercialize mRNA therapy

Somehow I just realized the company's name is derived from "mRNA."

aorth• 5 years ago

Yeah it's awesome! And their stock ticker is MRNA too! So cool... https://www.nyse.com/quote/XNGS:MRNA

BenoitP• 5 years ago

There's 'modified' in there as well:

Eventually, he figured he had had a name under his nose since 2008, when his lab’s staff started experimenting with modified mRNA and referring to it, for short, as “mod RNA.” Moderna.

https://qz.com/2001718/modernas-founder-says-mrna-can-treat-...

andreygrehov• 5 years ago

I don't know if viral immunization was ever even on their radar before Covid happened.

Here is a quote straight out from Moderna's patent:

  Severe acute respiratory syndrome (SARS) emerged in China in 2002 and spread to other countries before brought under control. Because of a concern for reemergence or a deliberate release of the SARS coronavirus, vaccine development was initiated.

cshimmin4• 5 years ago

Cool, I did not know that! What/when is this patent?

ethbr07• 5 years ago

Vaccines are among the simpler things they could use the delivery technology for.

However, their key advantage over competitors is development speed.

Until COVID-19 though, that wasn't something we needed. If vaccines took an extra 2, or 4, or 10 years to develop, it was usually okay.

vnorilo• 5 years ago

Seems like a fairly modest return for creating one of the first top performing vaccines for a global pandemic. Even if you disregard all the other mRNA R&D they do.

buildbot• 5 years ago

I'm very long Moderna - MRNA treatment platforms seem like such a powerful tool to have. They created one of the best COVID vaccines so far using their existing platform, and have dozens of others in the pipeline for things like cancer and HIV. While sure there is a risk that these MRNA treatments don't work as well as the MRNA COVID vaccine, but I think the smart money is on many of them performing well.

ethbr07• 5 years ago

The "smart money"?

Interesting turn of phrase, when we're talking about screwing with one of the most complex, dynamic systems in the world (us, and specifically immune response).

The smart money is probably insider information. Anyone else is guessing about how dice came up for a few million years worth of rolls.

(Edit: Enjoying the knee-jerk reaction that I'm anti-vax(?))

fny2• 5 years ago

Smart money is a well known phrase used to refer to institutional investors. It's not a turn of phrase.

newswasboring• 5 years ago

If you are not anti-vax I have no idea what you are talking about. There is no pro-vax position I can derive from this

dazag• 5 years ago

To say deserved for a group of vaccines (they are prophilactics if you have to take one every few months to get benefits) that don't work, is astonishing by this dates, but nobody mentioning it's crazy. Pharma is a company that makes money from sick people, if that isn't enough for you, is one of many examples of why we are nnot going to make it as a species.

cryptica• 5 years ago

A vaccine so effective, it needs to be taken again every few months.

For treating COVID, it's almost as effective as horse worm medicine.

esalman• 5 years ago

Another way of saying a virus so effective, the best humanity came up with is an antidote that wears off every few months.

selcuka2• 5 years ago

It's a weakness of the human immune system, not that of the vaccine. Even when you are infected with the actual Coronavirus the immunity only lasts for months.

yobbo• 5 years ago

[citation needed]

I'm guessing you have seen reports of antibody levels falling, but that is not an indication of immunity.

So far I have seen no reports of natural immunity (as measured in confirmed reinfections) falling.

bigodbiel2• 5 years ago

Wouldn’t that just raise valuation?

jstummbillig• 5 years ago

Today I learned that Moderna (and maybe Pharma industry?) has better margins than Facebook.

Imagine if a spiked blogging platform that literally makes money by relative demotion of unpromoted content produced better margins than the creation of a life saving vaccine for all humanity. How insane that would be.

beebmam• 5 years ago

Sometimes the business world really feels that way. Glad to see probably one of the greatest breakthroughs in the history of mankind is highly profitable. Maybe modern capitalism isn't completely toxic!

Moderna's Financials

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