Moderna Therapeutics: The Next Big Biotech?

Moderna - Biotech IPO

Moderna Therapeutics: The Next Big Biotech?

Moderna Therapeutics is a startup that was founded in 2010 and is based in Cambridge, Massachusetts. CEO and Director Stéphane Bancel has been with the firm since 2011 and was previously the CEO for bioMérieux. Moderna plans to revolutionize drug manufacturing by developing a messenger RNA (mRNA)-based platform to deliver vaccines and other therapeutic agents for a range of human diseases.

Moderna filed for what could be the largest Initial Public Offering (IPO) for a biotech startup on November 9, 2018. This firm is attempting to raise $500 million by December 6, 2018, which is the expected IPO pricing date. However, this is a difficult time to be seeking public capital in the IPO market due to the current overall volatility of stock markets.


mRNA transfers the instructions stored in DNA for synthesizing the proteins needed in living cells. Each cell uses mRNA in a variety of processes to produce many proteins, which are found in cell membranes, intracellular spaces and secreted by cellular components. The combinations, locations and quantities of these proteins are extremely large.

Moderna specializes in the following six therapeutic modalities:

  • Cancer vaccines
  • Intratumoral immuno-oncology
  • Localized regenerative therapeutics

  • Prophylactic vaccines
  • Systemic intracellular therapeutics
  • Systemic secreted therapeutics

The company continues to develop its platforms, which it calls the Research Engine and Early Development Engine, to advance the technology of mRNA medicines. This company’s portfolio currently includes 21 programs, of which 10 have entered clinical studies and another are three are Investigational New Drugs (INDs). AZD8601 is Moderna’s most advanced drug candidate, which is a localized regenerative medicine for patients with Myocardial ischemia.

Market and Finances

Each of Moderna’s drug development programs represents a distinct market opportunity. The firm’s market size and competitors are therefore a result of the combination of these programs. Major competitors in mRNA-based technologies include the following:

  • Arcturus Therapeutics
  • BioNTech
  • CureVac
  • eTheRNA Immunotherapies

  • Ethris
  • Genevant Sciences
  • GlaxoSmithKline
  • Translate Bio

Modern reported approximately $100 million in revenue for the first nine months of 2018, with a net loss of $243 million. It has raised almost $2 billion in venture capital funding and had $1.1 billion in cash with $412.7 million in total liabilities as of September 30, 2018. Moderna’s worth was estimated at $7.5 billion at its last valuation.


Moderna expects to trade on the NASDAQ under the ticker symbol MRNA. The firm plans to sell 21.7 million shares of common stock at a midpoint price of $23.00 per share, resulting in gross proceeds of about $500 million. However, this total doesn’t include the sale of customary underwriter options. Morgan Stanley is the lead underwriter, but the IPO also lists the following investment banks as underwriters:

  • Barclays
  • BofA Merrill Lynch
  • Bryan Garnier
  • Piper Jaffray

  • Chardan
  • Goldman Sachs
  • J.P. Morgan

  • Needham & Company
  • Oddo BHF
  • Oppenheimer & Co

Major shareholders in the Moderna IPO include the following:

  • Abu Dhabi Investment Authority
  • Alexandria Venture Investments
  • ArrowMark Partners
  • AstraZeneca

  • BB Biotech
  • EDBI
  • Fidelity
  • Flagship Pioneering

  • Julius Baer
  • Pictet
  • Sequoia Capital China
  • Viking Global Investors

None of these shareholders have indicated an interest in purchase shares at the IPO price, which is typical of IPOs in the biopharma sector. Prospective investors would likely interpret such interest as a signal not to purchase shares in Moderna. The company’s enterprise value at the time of the IPO would be approximately $6.2 billion, assuming the IPO is successful at the midpoint of its proposed price range. The ratio of floating to outstanding shares will be approximately 6.7 percent, excluding the effects of underwriter options and any private placement shares or restricted stock.

Moderna’s most recent regulatory filing indicates it plans to use $315 to $345 million of the net proceeds from the IPO for pharmaceutical research, including the discovery of new drugs and their clinical development. This portion of the net proceeds will also fund the expansion of Moderna’s manufacturing platform and infrastructure in support of its delivery pipeline. The company will use another $75 to $85 million to continue developing its mRNA technology platform, including the creation of new modalities. The remainder of the net proceeds from the IPO will serve as working capital and other corporate purposes.