Introduction: A Biotech Unicorn Is Born

Moderna Therapeutics (Moderna) seeks to transform drug development with messenger RNA therapeutics. Developing a next generation in vivo platform that produces human proteins or antibodies inside patient cells, the company just went public-floating an IPO raising $600 million at $23 per share.

The Cambridge, Massachusetts-based firm also develops various patent applications with various claims ranging from novel therapeutic chemistries to specific drug compositions. Focus disease areas include inherited genetic disorders, hemophilic and blood factors, and oncology. The firm has formed strategic option deals with AstraZeneca and Alexion Pharmaceuticals and strategic collaborations with Karolinska Institute Sweden, Institute Pasteur, Karolinska University Hospital, and Merck. The firm was founded by Noubar Afevan, Rogert Langer, and Stéphane Bancel in 2010.

Moderna accomplished an impressive feat—making it this far in drug development is not easy—in the process raising approximately $1.8 billion in investment capital according to website Crunchbase. Moreover, with volatile stock markets as of late, even more impressive was the fact that the IPO was completed, and 26 million shares were sold—and in the process setting biotech history making the biggest such offering in history. The result—a firm that is just under 9 years old in an incredibly risky business now has a $7.5 billion valuation—all on approximately on $200 million in revenues with approximately $475 million in operating expenses.

From one point of view, any participant in the world of drug development should be in awe of what the founders and management of Moderna have pulled of thus far—truly impressive. But drug development is a risky business. Investors are making big bets with even bigger potential returns should Moderna deliver on its promise of a messenger RNA technology platform. TrialSite News will provide a summary of their clinical research pipeline in keeping with our mission of creating one site to track clinical trial transparency. One of the first biotech ventures to have a multi-billion-dollar public valuation with no actual approved products (or for that matter sufficient accumulation of clinical data to back the high value momentum), the value of Moderna all comes down to the future value of its clinical trials pipeline. But the future is not driven by the risk-averse but those that are willing to make calculated bets on innovative approaches, methods; technologies and platforms that can solve healthcare problems better; more efficiently and ultimately more economically given our society’s move to value-based care.

History

Founded in 2010, it was originally written “ModeRNA” and was based on basic research work by Derrick Rossi of Harvard. The latter’s lab formulated an approach for modifying mRNA, transfecting into human cells, and dedifferentiating them into stem cells thereby triggering them to differentiate into targeted cell types. Rossi connected with Kenneth Chien and Tim Springer, a Harvard faculty at the time with startup experience, and thereafter included Robert Langer to discuss a new venture. The group met with Noubar Afeyan, a venture capitalist at the time. After a business venture was formed, they recruited bioMerieux CEO Stéphane Bancel to take the leadership helm. It operated in stealth mode for the first couple years till it emerged with a $40 million from a group of investors including Mr. Afeyan’s venture capital group Flagship Ventures.

Moderna’s first big pharma deal included a five-year exclusive option agreement to discover, develop and commercialize mRNA therapeutics for the treatment of serious cardiovascular, metabolic, and renal diseases in addition to oncology targets. The agreement included a $240 million upfront payment—one of the larger upfront big pharma negotiated deals in history at the time centering on a transaction not including drugs in clinical trials.

Moderna inked a deal with the federal government’s Defense Advanced Research Projects Agency (DARPA) valued at $24.6 million for research and development work associated with its mRNA platform to combat infectious diseases and biological weapons. By the end of 2013, the New England venture was on a tear securing $110 million more in financing. Early in 2014 they negotiated and closed a $125 million orphan disease deal with biotech Alexion—involving $100 million in exchange for 10 product options for the development of rare-disease treatments using their mRNA platform, in addition to a $25 million equity infusion. Moderna kept the deal making pace fast and furious with clinical partnerships with Swedish Karolinska Institutet and Karolinska University Hospital which included expansion to Sweden. By 2015 the firm had raised a total of $950 million. Into 2015 and beyond the firm launched a new company Valera (advancement of vaccines and therapeutics for prevention of vaccines et al). They also put a collaborative deal together with Merck in 2015 centering on the development and commercialization of vaccines against viral diseases which included an upfront $50 million equity infusion. Other deals included Vertex (mRNA therapeutics for cystic fibrosis) which included $40 million upfront payment including $20 million convertible note investment and up to $275 million milestone payments. The AstraZeneca alliance yielded results in 2016 as the two announced the filing of a clinical trial application for investigational cardiometabolic mRNA AZD8601. More rounds of investment occurred in 2016–$474 million –the ownership of Moderna by institutional investors and big pharma grew considerably—a public offering had to be imminent. The company’s valuation by 2017 approached $5 billion.

The Platform

In its recent S-1 SEC filing, Moderna describes its fundamental approach as what amounts to “the software of life:”

“mRNA transfers the instructions stored in DNA to make the proteins required in every living cell. Our approach is to use mRNA medicines to instruct a patient’s own cells to produce proteins that could prevent, treat, or cure disease.”

In 2017, Science published an article articulating Moderna’s platform. It was disclosed that some of the mRNA therapeutic candidates were delivered in liposomes; and that they were utilizing modified uridine nucleosides based on work done by Katalin Karikó on evading immune responses to mRNA drugs; that the firm was capitalizing on mRNA’s with modified sequences to improve folding and translation efficiency; and finally that their mRNA treatment candidates were modified on each end, outside the coding region, to target them to specific cell types.

Moderna Pipeline

The company has 21 drug and vaccine research programs—including ten that have advanced beyond the laboratory—progressed to clinical trials.

A review of the firm’s pipeline includes the following:

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The clinical trial process is lengthy, complex and cumbersome, costly, and can be rife with risk. The company has 10 drugs in Phase 1—the very early stages of the process. Years and lots of work is left to do.

Next, we review the reported trials on ClinicalTrials.gov for additional information. According to the company’s S-1, they plan to compartmentalize risk in part by using modalities-a group of programs that share combinations of technology elements to form a common set of product features. Seeking risk mitigation in a highly-risk prone business, the modality is designed to deliver the correct amount of mRNA to the right correct tissue at the correct time across a suite of applications. Their six modalities include:

  • Prophylactic Vaccines
  • Cancer Vaccines
  • Intratumoral Immuno-Oncology
  • Localized Regenerative Therapeutics
  • System Secreted Therapeutics
  • Systematic Intracellular Therapeutics

Prophylactic Vaccines

Moderna reports that vaccines to prevent infectious diseases are one of the great innovations of modern medicine. The Centers for Disease Control (CDC) reports that given childhood vaccinations over past two decades will prevent 322 million Americans from failing ill, 21 million hospitalizations, 732,000 deaths, #295 billion of direct costs, and $1.3 trillion social costs—truly staggering numbers.  The company reports the commercial opportunity for vaccines sits at more than $35 billion in annual worldwide sales.  They note that presently 16 different vaccines products exist that generate more than $500 million in annual worldwide 2017 sales.

Vaccines to prevent infectious diseases are one of the great innovations of modern medicine. In the United States alone, the Centers for Disease Control and Prevention estimates that childhood vaccinations given in the past two decades will in total prevent 322 million Americans from falling ill, 21 million hospitalizations, 732,000 deaths, $295 billion of direct costs, and $1.3 trillion in social costs. The commercial opportunity for vaccines is significant, with more than $35 billion in annual worldwide sales, including 16 different vaccine products each generating more than $500 million in annual worldwide sales in 2017.

By far their most active modality, Vaccines can be prophylactic in that they are used to prevent or ameliorate the effects of a future infection by a natural or wild pathogen as opposed to therapeutic (e.g. vaccines against cancer are being investigated). We assume that other than milestone-based payment options for various clinical stages, it is this modality that represents the greatest probability of approved, marketable product the soonest. The firm in the S-1 reports risks associated with all their modalities of course. Prophylactic vaccines are no exception. They require clinical testing in thousands to tens of thousands of healthy volunteers to define an approvable benefit-risk profile. Final product needs to be scrutinized heavily during clinical testing process to show a high degree of safety and tolerability—as when dosing healthy subjects may result in rare and even spurious safety finding—negatively impacting a program prior to or after commercial launch. Moderna reports that overall the safety data looks promising— “sufficient to initiate additional trials” however as with all complex drug development with innovative approaches there are considerable risks associated with existing and later stage trials. As per the S-1 a total of 675 patients have been thus far included in this modality.

Trials (all in Phase I)

mRNA-1777:       Respiratory Syncytial Virus (RSF)

Merck will pay milestones and success-driven royalties. Estimated market size could range from $600 million and above. It is a common and contagious virus that infects the respiratory tract of most children prior to their second birthday. In a substantial majority of cases it only leads to a cold. However, in some cases RSV can lead to severe problems such as bronchitis which can be life threatening. There is no current vaccine.

mRNA-1647:       Cytomegalovirus (CMV)

Moderna maintains worldwide rights to this market worth up to $1 billion per year for a vaccine breakthrough. It is a common virus that can infect nearly everyone. Once infected, an individual retains the virus for life. Most individuals are oblivious to the fact they are carrying the virus due to the fact it rarely causes any health issues. However, those that are pregnant or struggle with a weak immune system it can introduce challenges. The virus can also be carried over due to pregnancy to new born.

mRNA-1653:       hMPV+PIV3 vaccine

As reported in the S-1, Human metapneumovirus, or hMPV, and human parainfluenza virus 3, or PIV3, are important causes of respiratory tract infections in children and have led to increasing rates of hospitalization over the past few years. Despite the substantial impact hMPV and PIV3 have on human health, attention and research on these viruses have lagged relative to RSV. To date, no vaccine to prevent hMPV or PIV3 infections has been approved. Their platform allows them to combine mRNAs encoding antigens for the two pathogens in one combination vaccine, enabling a single vaccine that could protect against both respiratory infections. In their approach, they utilize mRNA sequences encoding for the membrane F proteins for each of the viruses. They have developed experience with the related F protein from our RSV program with Merck. mRNA-1653 is currently being tested in a Phase 1 trial in the United States.

This Moderna trial is reported in Clinicaltrials.gov. The clinical study assesses the safety, reactogenicity and immunogenicity of mRNA-1653, a combined human metapneumovirus and human parainfluenza virus type 3 vaccine in healthy adults. The sponsor plans to include 119 randomized participants. It started December 2017 and the planned completion date is December 2019. Research sites for this trial include Meridian Clinical Research, LLC in Omaha Nebraska and Benchmark Research in Texas (two sites)—only three (3) reported sites. Human metapneumovirus (HMPV), a common respiratory virus, can cause severe disease in pre- and post-hematopoietic cell transplant (HCT) recipients.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3752411/

Moderna is developing a vaccine to address two viruses that are leading causes of respiratory infection

Human metapneumovirus, or hMPV, and human parainfluenza virus 3, or PIV3, are important causes of respiratory tract infections in children and have led to increasing rates of hospitalization over the past few years. Despite the substantial impact hMPV and PIV3 have on human health, attention and research on these viruses has lagged relative to RSV. To date, no vaccine to prevent hMPV or PIV3 infections has been approved. The Moderna platform combines mRNAs encoding antigens for the two pathogens in one combination vaccine, enabling a single vaccine that could protect against both respiratory infections. In their approach, they utilize mRNA sequences encoding for the membrane F proteins for each of the viruses. They have developed experience with the related F protein from their RSV program with Merck. mRNA-1653 is currently being tested in a Phase 1 trial in the United States.

mRNA-1440:       Influenza H10N8 Vaccine

Moderna is sponsoring a Phase I, first-in-human, randomized, double-bind, placebo-controlled dose-ranging study to evaluate the safety and immunogenicity of H10N8 antigen in mRNA in healthy adult subjects. The study was projected to be completed October 2018, but results have not been published. The research occurred in Berlin Germany. According to the Moderna website, any further research will be subject to funding. They report that they do not intend to proceed with mNRA-1440 without government or third-party funding.

mRNA-1851:       Influenza H7N9 Vaccine

This study was completed last year according to Clinicaltrials.gov and any future work is contingent upon funding.  The trial focused on the safety, tolerability and immunogenicity of VAL-339851 in healthy adult subjects.  As with other studies dependent on additional funding the recent massive IPO windfall should trigger some of these trials to continue. They report that they do not intend to proceed with mNRA-1851 without government or third-party funding.

mRNA-1325:       Zika Vaccine

For the Zika vaccine Moderna reports that although the Phase I safety and tolerability data generated would permit additional dose escalations of mRNA-1325, their current development efforts are focused on their next generation vaccine, mRNA 1893—shown to be 20X more potent in non-human primate Zika challenge studies.  Note 1893 still in preclinical and hence not included here.

mRNA-1388:       Chikungunya vaccine

Chikungunya is a mosquito-borne RNA alphavirus posing a significant public health problem in tropical and subtropical regions. While Chikungunya has been present in Africa for centuries, recent outbreaks and epidemics in new regions have arisen due to the expanding distribution of the Aedesmosquito. A Chikungunya epidemic began in 2004 in Kenya, spread to India and was exported to nearly all regions of the world and brought Chikungunya to the attention of the western world. As of April 2016, Chikungunya cases had been reported in over 100 countries and territories around the world, including more than 45 countries and territories throughout the Americas. Chikungunya virus infection causes disease, characterized by an acute onset of fever, rash, myalgia, and sometimes debilitating polyarthralgia, giving the virus its name, which means “that which bends up” when translated from Makonde. It is rarely fatal, but neurological sequelae such as Guillain-Barre syndrome and chronic arthralgia have been associated with infection.

Moderna is partnered with Defense Advanced Research Projects Agency for this clinical trial. The research site reported is Optimal Research and the study was projected to end July 2018. Moderna notes future development contingent on funding. And in their S-1 they report that they do not intend to proceed with mNRA-1388 without government or third-party funding.

Cancer Vaccines

Moderna is seeking to design cancer vaccines modality to treat or cure cancer by enhancing immune responses to tumor neoantigens. There are two current programs and TrialSite News will report on the one that has made it to clinical trials.  As they report in the S-1 their cancer vaccines modality is focused on the use of mRNA to express neoantigens found in a tumor to elicit an immune response via T cells that recognize those neoantigens and hence the tumor. According to their S-1 23 patients have thus far been involved in this modality.

mRNA-4157:       PCV Solid Tumors

Moderna entered into a personalized mRNAcancer vaccines (PCV) collaboration and license agreement with Merck as we discussed previously. The goal is to develop and commercialize PCVs for individual patients using their mRNA vaccine and formulation technology. Under the Merck strategic alliance, Moderna identifies genetic mutations present in a patient’s tumor cells, synthesize mRNA for these mutations, encapsulate the mRNA in one of their proprietary LNPs and administer to each patient a unique mRNA cancer vaccine designed to specifically activate the patient’s immune system against his or her own cancer cells! A powerful technology if it can work.

Moderna is conducting a Phase I trial to test this technology with Merck. Known as KEYNOTE-603-they are testing the safety, tolerability, and immunogenicity of mRNA-4157 in subjects with resected solid tumors and in combination with Pembrolizumab (Merck’s Keytruda) in subjects with unresectable solid tumors. The trial was planned to end September 2018.  Thus far no results have been published. We include a video upon first dosing in 2017. Again the concept of “one medicine for one patient—a personalized cancer vaccine” is a powerful one if it makes it through the clinical trials lifecycle to commercialization.  The market could be quite large. Merck and Moderna plan on a 50-50 profit sharing model should they be successful. In fact, when Merck invested in Moderna some sources based the valuation at $18 billion.

Intratumoral Immuno-Oncology

Moderna has filed multiple patents to protect this program—featuring claims to mRNA encoding immune-stimulatory proteins and methods of treating cancer using such composition.   These programs are designed to be administered intratumorally to alter the tumor microenvironment in favor of mounting an immune response against tumors.  Their OX40L mRNA therapeutic and the mRNA program includes mRNA’s that encode OX40L, IL23 and IL36 gare covered by three pending U.S. patent applications, two of which are recently allowed and soon to be issued as U.S. patents; a pending European patent application and three pending PCT applications, featuring claims to the mRNA therapeutics as compositions of matter, formulations that include such mRNAs and methods of reducing tumors and treating cancer featuring these development candidates.  Moderna maintains worldwide rights. According to their S-1 26 patients have thus far been involved in this modality.

mRNA-2416:       OX40L

A current study is described as a first-in-human, open-label, multicenter, dose escalation study designed to determine the safety and tolerability of repeated intratumoral injections of mRNA 2416 in patients with advanced relapsed/refractory solid tumor malignancies or lymphoma. The study will include two dosing periods; 75 participants and is scheduled to be completed in June 2019. Several elite academic medical centers are involved with this study including: Mayo Clinic, University of Colorado, Massachusetts General Hospital, Henry Ford Hospital, University of Minnesota Medical Center, Huntsman Cancer Institute, Utah and research center and CRO Sarah Cannon.

Localized Regenerative Therapeutics

Moderna has designed the localized regenerative therapeutics modality to develop mRNA medicines to address injured or diseased tissues. Their mRNA technology platform enables the local production of proteins that provide a therapeutic benefit in targeted tissue. Moderna has partnered with AstraZeneca—which is leading the effort. Moderna reports in their S-1 that this program recently completed a Phase 1a/b clinical trial in which they observed in patient’s dose-dependent protein production and a pharmacologic effect, as measured by changes in local blood flow. They believe this data provides clinical proof of mechanism for our mRNA technology outside of the vaccine setting.

As reported in the S-1 Moderna reports that no safety findings observed that met the study pause criteria although there were three suspected unexpected serious adverse reactions (SUSARs) reported. 26 patients were dosed with mRNA-2416 in a Phase I trial. According to their S-1 overall 34 patients have thus far been involved in this modality.

Risk Factors

In many respects Moderna faces an uphill battle. As the Wall Street Journal recently reported many investors are holding back—awaiting more success. They very well could miss out. But as Moderna reports in its S-1, it faces many considerable risks including those delineated starting page #16 of the S-1.

Conclusion

Moderna is developing the software of life itself. The development and execution of this early stage clinical company has been staggeringly successful. One of the largest biotech IPOs of its type to date it can be considered a biotech “unicorn.”  It was founded by a brilliant team that although has been through the natural rollercoaster ride of such a venture, finds itself in an enviable position. It has just raised $600 million in public cash which enables it to live not just another day—but many. Its’ pipeline is based on an innovative life science technology known as mRNA. If they can successfully drive the required proof during the clinical trials process over the next couple of years, they will demonstrate truly what developing the software of life means:  essentially to turn the body’s own cells into drug making factories that can then tackle a portfolio of diseases including cancer, infectious disease, cardiovascular disease, and many other ailments. With over 20 pipeline candidates and one entering phase II, they represent a new wave of biotech investment—one where the technology platform evolution is to such a point of providing personalized medicine backed by a wide-ranging biological platform or as recently reported in Fortune  “that is, underlying tech that can be used to produce an eclectic mix of drugs across the disease spectrum.” Regardless, each modality, program, and ultimately product will need to go through rigorous clinical trials and only if multiple modalities come out the other side with approvals will the true potential of this exciting company come true.

 

Author

Daniel O’Connor https://www.linkedin.com/in/oconnordaniel/

Mr. O’Connor has spent nearly 20 years providing technology and services to the clinical trials and health technology industry. An entrepreneur, he has been instrumental in building a few different ventures focusing on FDA 21 Part 11 enterprise document management, technology-enabled patient recruitment services, clinical document and safety data exchange, as well as population health and community care coordination for at-risk populations. Mr. O’Connor has built a comprehensive research site data base and intelligent clinical research site news curation engine with TrialSite News. He earned his combined MA and JD from the University of California (Los Angeles and Hastings College of the Law).

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