Moderna, Still Private, Scoops Up Yet Another $500M

Xconomy Boston — 

Moderna Therapeutics, the secretive messenger RNA drugmaker known in part for its preponderance of massive funding raises, has struck once again.

The Cambridge, MA, company has closed yet another huge round, a $500 million haul from a wide group of domestic and international investors. New backers include the Abu Dhabi Investment Authority, BB Biotech, and Julius Baer, while earlier backers like Fidelity Management & Research, Viking Global Investors, and Alexandria Venture Investments also participated. Pitchbook first published news of the financing on Thursday, which reportedly values the company at $7.5 billion.

The funding gives Moderna a staggering amount—roughly $1.4 billion in cash on its balance sheet—in addition to access to some $250 million in grant money from the Bill & Melinda Gates Foundation. It’s more of the same for Moderna, which has earned both envy and criticism for its ability to haul in cash, close to $2.5 billion now, from a preponderance of sources at an increasingly large valuation despite little evidence so far that its technology works.

Moderna creates synthetic mRNA—the strands of information inside cells that direct the production of proteins. The company’s idea is to inject its synthetic mRNA into patients and prompt their cells to produce their own therapeutic proteins. It would be an entirely new way of making drugs, and since 2017 Moderna has begun to make public its early clinical data.

Other companies such as CureVac, BioNTech, and Translate Bio are in the mRNA drug making race as well—and BioNTech provided recent evidence of the mRNA craze, raising a $270 million round of its own. But Moderna has stood out because of its consistent significant fundraising ability—both from investors and from corporate partnerships—and its rapid growth.

The huge war chest has allowed Moderna to spend years amassing a spate of clinical programs, build a large workforce, and have the freedom to experiment strategically and work through a variety of scientific ups and downs before going public. A setback for a privately held company is much different than one that causes shares of a public company to tank.

“We very consciously decided to stay private to be able to turn on a dime based on what we learn in the labs initially,” Bancel told Xconomy in January. “That has served us well, because over the 6 years the company has been operating, there have been a couple of bumps on the road on the science—and nobody panicked.”

That also applied to Moderna’s corporate strategy. Moderna decided at one point to hatch a group of startups as wholly-owned subsidiaries, all working on different aspects of its technology—and then reversed course and ended the experiment last year.

But Moderna’s public reckoning is coming. It now has 10 programs in clinical testing, largely vaccines for infectious diseases and cancer, though the company’s most advanced therapy is a treatment for heart failure that is part of a deal with AstraZeneca (NYSE: AZN). And eventually as those programs advance it will need the help of the public markets to move them forward.

“We want human data in two or three verticals so that the company is on solid foundation to go public,” Bancel said in January. “We don’t want to have to convince people that it ‘might’ work in the clinic.”

Here’s more on Moderna and the race to develop mRNA drugs.