The company that raised $8billion and didn’t deliver a single product for 10 years?

14 Apr 2022

Moderna is one of the most interesting stories of perseverance and determination that I have ever seen. The company was founded on the belief that mRNA technologies have the potential to revolutionise the drug industry. It wasn’t until the COVID-19 pandemic that Moderna released its first product to market after being in business for 10 years.

Its mRNA Covid vaccine turned out to be a lifesaver, literally. 

Let’s start with the history of mRNA.

mRNA or Messenger RNA has been around since the 1970s. Scientists have always known the potential of mRNA but have made little progress in commercialising the technology.

The initial problem with MRNA was that scientists could not figure out how to deliver it effectively. When the body recognised that the substance was foreign it would crush it, stopping the body from building any sort of immunity.

Another problem was how long it would take to test different mRNA molecules.

Typically, a scientist would use a pipette to suck up one colourless liquid and drop it into another colourless liquid. This process is painful and took a long time. The worst bit is, you can’t see what’s going on because everything is microscopic.

These problems were so difficult to solve that it nearly caused the death of MRNA research. That was until two scientists Katalin Kariko and Drew Weissman paired up. 

The pair spent 7 years figuring out how to deliver mRNA without killing the mice they were using for testing. When the mice received the vaccine, the immune response would be so great that it would kill the mice. During the 7 years, they didn’t experience a lot of success and we’re just about ready to forget mRNA.

One day, Kariko was leafing through an immunology journal when she came across a paper on Uridine. Uridine is one of the 4 building blocks of RNA.

The study showed that Uridine triggers an immune response when delivered into the body. This set off a light bulb moment for Kariko. She had found the molecule responsible for causing her problems.

She and Weissman created a new recipe that replaced Uridine with a substitute molecule. The idea was that with Uridine out of the picture there would be nothing left to trigger an immune response.
This worked! Kariko and Wisemen had figured out how to deliver mRNA to the body successfully.

Kariko and Wiseman published the study and patented the method with the hopes to start a company. Unfortunately, it didn’t go anywhere.

Then came two scientists from Stanford named Derick Rossi and Robert Langer. Robert Langer is a modern-day Thomas Edison. He has secured over 100 patents and started over 20 companies to back his work.

Langer had seen Wiseman and Kariko’s paper using Uridine for the delivery of mRNA. He had set out to build on Kariko’s and Wiseman’s results.

Langer figured out how to deliver mRNA precisely to specific cells in the body. He paired up with Derick Rossi to start Moderna. The company was originally named modRNA which got renamed to Moderna.

Langer and Rossi were academics and did not have an interest in running the company. They had secured patents for the technology and been able to raise seed funding. The pair knew they needed an experienced CEO to run the company.

Langer knew just the man for the job. That was Stephane Bancel.

Bancel grew up in France, he has two master’s degrees from the University of École Centrale Paris and the University of Minnesota, he also holds an MBA from Harvard. Bancel joined Moderna in 2011 after serving as the CEO of French Diagnostics company BioMerieux.

At the time, Moderna had just $2million of investment and 1 employee.

Bancel liked Moderna’s technology but he thought the company had a 5% chance of success. He didn’t take the offer seriously until his wife asked him over dinner:

“Can you think of a better way to spend the next year 10 years of your life”?

He didn’t have a good answer. The next day he resigned from BioMerieux and joined Moderna.

So, what actually Is mRNA?

Inside every human cell, there is digital code in the form of DNA. This code is made up of A, T, C, and G. 

DNA is made from the same 4 molecules. Which means you can print and read this code. If you put these cells into a machine, you can actually see the A, T, C, and G molecules on the screen.

This also means that you can print this DNA.

Simply write the code and get the lab to print the DNA.

Yes, that is literally how it happens. Hewett Packard took printer ink technology and figured out how to repurpose the technology to print at a microscopic level.

So, the idea is that a scientist receives a sequence (Print out) of a virus. They write the code of a molecule to counteract the virus. They send this code to the lab which prints out the mRNA molecule.

The scientist could then test this molecule on animals.

This process would usually take months or years, now with mRNA technology, this can be done in days.

This technology drastically reduced the time required to test different DNA sequences. Allowing the scientist to spend most of the time testing rather than creating.

What Actually Happens When mRNA is Entered into The Body?

When you receive an mRNA vaccine you are receiving synthetic DNA into the body.
The mRNA is basically a set of instructions for the cell.

Within each cell, there are little things called ribosomes that read the DNA.

A small piece of mRNA is injected into the cell, which is not in your DNA. The ribosomes are going to read it and make a protein to protect your body from the virus.

The mRNA can induce cells to produce spike proteins that you find on the surface of a virus. Then the immune system will learn to destroy the proteins before the real virus shows up. So, when the real virus shows up the body will be prepared.

This is like computer software for the body, you write the code and the body will execute it.
Different mRNA drugs are used on the same production lines, so one company can make any kind of mRNA medicine. This will save hundreds of billions in manufacturing costs.

Typically, each drug needs its own manufacturing plant which costs billions of dollars. This high cost makes creating drugs for exceptionally rare diseases unviable. These diseases don’t have a big enough market to create a drug for.

mRNA will make creating these drugs a lot cheaper and even more profitable.

Now we can begin to see the potential of this technology. mRNA allows scientists to design drugs for different diseases far more effectively and at a speed that has not been possible in the industry.

So Why Has Moderna Not Been Able to Produce Any Drugs?

Since 2010, the Moderna team was struggling to find a vaccine that they could go to market with. The team has invested millions in developing a Zika vaccine but the virus fizzled out before the company could sell any.

In January 2019, Stephen Bancel heard about the Covid virus in Wuhan. By Jan 25th, 2020, he called an emergency all-hands meeting with his team to discuss what they were going to do about COVID-19 with 19 projects in the pipeline and only $800million in the bank (this sounds like a lot of money but it’s not for a drug company).

They would have to ax all the projects and use the rest of the funds to scale manufacturing in order to deliver a COVID-19 vaccine.

The team decided that they were the most well-placed company on the planet to solve this problem. But they had to make a tough call.

The team axed the 19 projects and started working 7 days a week. Long working hours continued for the better part of 2020.

There is a story of an old engineering manager who received a delivery for a new machine. The new machine could not fit through the door. Whilst everyone was figuring out what to do, the old man walked into the tool shed and grabbed a sledgehammer. He started knocking down the door to fit the machine in.

Bancel describes this time as a period of relentless focus and dedication from the team in order to achieve an extraordinary outcome.

Only 42 days after that meeting in January, Moderna had produced a COVID-19 vaccine that was ready to be tested on humans.

In the financial year of 2021/2022 Moderna has sold 800 million doses of the Moderna vaccine which equates to about $18billion in revenue. What a bet.

So, what can we learn about Moderna?

Eyes on the prize:

From the outset Moderna did not want to be a one drug company. They wanted to have one platform in which they could produce multiple drugs from. Now this was a harder goal to achieve but it has an even bigger prize.
Bancel would not approve any projects that didn’t add to the overall benefit of the platform. He didn’t want to take the company public too early as the market would force him to produce products when the platform wasn’t ready.
His focus was on the science and the technology first. Then he would work towards making money later. This requires a certain focus and belief in the long-term goal rather than short term outcomes. 

Risk is something that you Take:

Most people don’t know the risk they are taking and thus get surprised by the result when it goes against them.
Bancel estimated that there was a 95% chance of failure and a 5% chance of success. Most people would never take this risk. Because most people would never take this risk you get a rare opportunity to see a world that not many people get to see.
You gain a unique skillset and a perspective that allows you to spot these opportunities that other people would never even consider.
This, for me, is the biggest learning from Moderna. Spend time quantifying the level of risk that you are taking. Learn to spot when the chances are against you, seek these challenges in order to develop a unique skillset. Who knows one of these bets might change your life.

Laser Focus When the Pressure is On.

Just imagine being in the team during this period. The company had not produced one product. They had 19 projects on the go. They have never brought a vaccine to market.
The team knew if they could not deliver this vaccine that there probably would not be a company to come back to.
They also knew that they had a moral obligation to try save the world from a disaster.
During these periods of time, Bancel recalls giving people freedom to make decisions on there own accord as long as it helped deliverability and execution. The team was constantly being reminded about what they needed to achieve in order to make this happen.

This is a crazy story to follow and I am so glad that people like this exist in our world! Thank you to the Moderna team for giving us the chance to get our normal lives back.

My Dear Readers, I am going to reduce the number of articles to 1 per month as I am working on multiple projects at the moment.

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Shows great faith from investors, and obviously the product was worth the wait!
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