The Financial Times has published a fairly critical article against Cambridge, Massachussets-based biotech Moderna Therapeutics, developer of a technology based on “messenger RNAs”, likely to mean a breakthrough in the treatment approach to many rare conditions for which no cure exists.
Moderna is still a private company, and rumors about a record listing have been circulating for years. Its management over the years has raised private funds for as much as $2.6bn , which has boosted its value to a record $7.5bn, an amount never reached by any other private company. The major funders include Merck & Co., which has entered into a $125m funding agreement with Moderna. According to analysts, if Moderna decided in favor of a listing now, it could reach a value of $8bn. However, many experts are skeptical about the biotech, because it has always been reluctant to share details about its own technology and its efficacy. This increases perplexity over a technology that has never received clinical confirmation. A representative example for this is biotech Translate Bio, which has developed a RNA technology very similar to Moderna’s one and was listed last June. The IPO wasn’t successful, indeed Translate’s shares are now worth almost half their placement value.
Besides, the company is down and, worryingly, it apparently doesn’t plan to reach a break-even over the next few years. Revenues were $100m in 2017, but losses were $240m. This, however, doesn’t rise too much concern among the top management, as Moderna has approximately $1.2bn available in cash, which would allow it to survive for 4 years even without revenues. The FT’s article closes with strong criticism about the top management’s salaries: the top three officers earned as much as $40m in 2017, that is 15% of the company’s whole R&D spending. Specifically, the CEO in 2017 earned $7m, the CFO $9m and the President as much as $24m.