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deals with AstraZeneca (NYSE: AZN), Alexion (NASDAQ: ALXN), and DARPA, plus it closed a $110 million financing round. Those deals left Moderna with more than $400 million in cash, and plenty more to accrue in milestones. With the new money in, Bancel says Moderna has raised $625 million in equity funding, with the remaining roughly $325 million via non-dilutive sources.
Delivering RNA-based drugs has been a monumental challenge for the industry, and Moderna still has to prove it can without setting off an immune system attack. None of Moderna’s mRNA drugs have been tested in human clinical trials as of yet; Bancel says the he expects the company to start its first trials over the next 12 to 24 months. Yet with so much money already into Moderna, how can these investors generate meaningful returns?
“The other side of that coin is, ‘What’s the opportunity?’” Bancel responds. “Based on the breadth of the platform we have shown, based on the fact that there are 45 programs, I think people get a sense of the momentum we have and the dynamic, and see the value we can build.”
Moderna has created a certain type of structure to carry this out. As Xconomy reported in June, Moderna shifted its strategy and developed a “venture creation” unit—essentially an in-house incubator. Moderna is using it to start up a bunch of companies, hire teams for them, and hive out the mRNA drug prospects it’s developed when they’re ready to be tested. That means Moderna itself likely won’t be the entity to develop and sell the mRNA drugs it creates. Onkaido, formed around 15 cancer drug candidates, was the first. More are on the way; Bancel says the company’s goal is to create five ventures over the next couple of years.
“It puts structure around the areas in which mRNA is performing very well,” Kim says, and adds that if third parties want to buy or license parts of the portfolio, the separate structures “give us flexibility to create value with transactions.”
Indeed, flipping shares in a venture, taking one public and building its value, or otherwise, are some of the ways Moderna will try to generate those investor returns. Others could be milestone payments from its current partnerships: Bancel notes there are three separate $60 million “technical” milestones in the AstraZeneca deal that could be triggered in the coming quarters, and various “per drug” milestones in both the AstraZeneca and Alexion deals that will start to kick in when the mRNA drugs in those partnerships reach clinical trials (Bancel wouldn’t specify how much per drug Moderna could bring in).
Much of that potential value will depend on whether Moderna can finally produce real, meaningful human clinical data. That time is coming.