More Green For Moderna as Merck Makes $50M Equity Grab, mRNA Deal

Xconomy Boston — 

Even a week after a $450 million round, the cash keeps flowing into Moderna Therapeutics.

The Cambridge, MA-based company announced this morning that Merck has become the latest company angling for a piece of Moderna’s messenger RNA therapeutics. The pharma giant is signing on for a three-year research collaboration to develop mRNA-based treatments and vaccines against four unspecified viruses. Those potential products would be developed through Valera, the infectious disease venture unit Moderna created last week.

Merck is paying Moderna $50 million up front, and making a $50 million equity investment in the company. That’ll give Merck the chance to commercialize up to five products coming out of the collaboration; Moderna would get a variety of development and commercialization milestones and royalties for each product, though the terms for each of those weren’t specified.

Merck will handle the discovery, development, and ultimately—if the partnership leads to something that wins regulatory approval—commercialization. Moderna, meanwhile, will design and synthesize the mRNA candidates through Valera.

Merck is the third pharmaceutical or biotech company to cut a deal with Moderna. AstraZeneca paid $240 million up front as part of a wide-ranging deal with the company in cardiovascular diseases and cancer. Alexion Pharmaceuticals followed up with an agreement to develop mRNA therapies for rare diseases. That, and the preponderance of cash Moderna has raised—the company has some $800 million in the bank, including the whopping $450 million round it raised last week, the largest private biotech financing ever—has led Moderna to become something of a startup incubator, hatching nascent companies to take groups of mRNA therapies it’s designed and develop them. The first two of these so-called “ventures” are Onkaido Therapeutics, developing cancer drugs, and Valera, for infectious diseases.

The idea behind Moderna is to turn the body into its own drugmaking factory, injecting synthetic mRNA strands into the body so patients’ cells can make their own therapeutic proteins. Its a novel way of making drugs that is also completely unproven in humans.

In the case of Valera, Moderna says it has developed mRNA molecules that have shown an ability in preclinical animal studies to produce either antigens that spur an immune system response, or antibodies that can bind to viruses or other targets. The big advantage in infectious diseases, if this approach is proven to work, would be speed and convenience. It’s expensive and time-consuming to make monoclonal antibodies and vaccines. The mRNA molecules Moderna is developing can be designed and manufactured in a matter of weeks through a common chemical process.

The still-private Moderna has the luxury of keeping what its work has shown from the public eye. Clearly, however, Merck is intrigued.

“By combining Merck’s strength in vaccine and antiviral therapeutic development with Moderna’s mRNA Therapeutics technology we are well positioned to develop differentiated candidates with the potential to provide meaningful benefit to patients,” Merck’s R&D chief Roger Perlmutter said in a statement. “We look forward to working with the scientific and technical teams at Moderna.”