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Peter Loftus, the author of , is a Wall Street Journal reporter who covers the pharmaceutical and medical device industries.

In this exclusive video, Loftus discusses the outlook on Moderna Therapeutics prior to the pandemic, its pivot to vaccines, and some of the difficult decisions the company had to make during the pandemic.

The following is a transcript of his remarks:

Right before the pandemic, in late 2019, Moderna had been in existence for nearly 10 years. It was a time of uncertainty for Moderna and for what investors thought of it.

About a year before that they had had an IPO [initial public offering] and sold their stock on the public markets for the first time, and the stock price a year later was still very much stuck in this range near the IPO price, and actually a little bit below it. So that reflected some degree of skepticism -- that this whole new way of making drugs, this messenger RNA [mRNA] technology drugs and vaccines, skepticism that it was really gonna pan out. Because at that point, Moderna was still what they call a "development stage company," and they didn't have any products on the market and no real definitive proof that using mRNA to make a drug or a vaccine was going to be effective.

So at that time, you know, the company's plan was to kind of soldier on and continue to develop some of the vaccines that it already had in its R&D [research and development] pipeline, and other products, and to introduce new ones into the pipeline. That's really where Moderna stood going into the pandemic. They believed in their potential and the promise of mRNA, but the investment community didn't seem entirely convinced.

A Biotech Is Born

In 2010, one of the co-founders [of Moderna] was a stem cell scientist at Harvard named . Derrick Rossi did some research and experiments that showed that mRNA, this genetic material, could actually be a useful tool to sort of change the fate of cells. Once he did that, he saw the potential that, well, maybe there's some commercial potential and medical potential for this mRNA.

So he started to sort of begin the process of starting a new company and looking for people to help him out. Those other people, who also became the co-founders, included the MIT professor who has a lot of experience with drug delivery technology and is just very influential in biotech circles. Once he got Bob on board, that was a big help. Then there was another cardiovascular doctor and researcher at Harvard [now at the Karolinska Institutet in Stockholm], named , who got involved.

They each brought a few different things. Derrick Rossi brought that academic lab and molecular biology expertise to the table, Bob Langer had drug delivery and also just being very well connected in biotech, and Ken Chien was an MD, unlike the other two [PhD and ScD, respectively], and had this expertise in cardiovascular research. The fourth leg of the table, so to speak -- and this is critical -- is Flagship, a venture capital firm that's in Cambridge that got interested, and they're led by .

So then you had that combination of the scientific expertise, the medical expertise, the money, and experience of actually starting companies and getting them off the ground, and all the mundane things that go into that, like getting office and lab space. It was a series of connections during the year 2010 that led to, by the end of the year, this new company called Moderna.

Pivot to Vaccines

They knew that introducing mRNA in a lipid nanoparticle into the body could have an immunogenic effect. They started to see the potential for using it for vaccines, partly because of this issue with repeated dosing. With a vaccine, you're only talking one, two, three doses -- of course, right now that's kind of an open question with the COVID vaccines -- and so they began to think that that might make more sense and be more suitable for mRNA and this lipid nanoparticle coating.

Around the same time, they got Merck's attention -- the heads of research at Merck -- because Merck was a long-time traditional vaccine powerhouse. Even Merck had tried to develop vaccines against certain diseases over the years, like RSV [respiratory syncytial virus], and just didn't have success using traditional vaccine technologies. So, I think Merck saw an opportunity to partner up with Moderna; invest in it, collaborate scientifically, because they saw, even though they didn't know for sure, they thought there was potential for mRNA to be a new and effective way to develop vaccines that could potentially address some of the diseases that older vaccine technologies couldn't.

I think it was in around 2016 that Moderna received a significant grant from [Biomedical Advanced Research and Development Authority] to come up with a Zika [virus] vaccine. At the same time, they were in touch with the vaccine research center at NIH to collaborate scientifically on things like the design of vaccines, picking the best antigen, but also for help with running clinical trials. NIH started to do some of the testing on the Moderna Zika vaccine, and so that sort of just continued from that time period on, and did set the stage for 2020.

Difficult Decisions

Moderna spoke very confidently about mRNA, and what they thought was its potential to turn into a COVID vaccine that would work, but you could see moments where they were human.

During some of the critical data releases during 2020, when [Moderna CEO] would get the news that it worked in this trial, he would break down in tears. Clearly, to me, you see that that's a sign that he wasn't 100% sure it was going to work.

And you see it in others, the chief scientific officer of the company during 2020 and others, that the company would have moments of just not being sure that they made the right decision about something, but they had to make it on very quick timetables because the clock was ticking as the [COVID] virus spread.

The chief scientific officer, at one point early on, woke up in the middle of the night wondering whether they picked the right genetic sequence to include in the vaccine that would make the spike protein of the virus once it got into the body and set off what they hoped was the desired immune response. He had this fear of if they picked the wrong sequence and it didn't work, and they'd have to go back to the drawing board.

Later in the year, the president of the company was struggling with what was the right dose level to pick for the vaccine to bring into clinical testing. They kind of had to balance it out between wanting a higher dose to ensure efficacy of the vaccine, or to maximize that possibility, but if they were going to pick a higher dose, they only had so much manufacturing capacity. So that would mean perhaps fewer doses once it was available. They had to wrestle these questions as the year went on.

I think those were some of the more interesting aspects of it, sort of that mix of confidence, and maybe even a little bit of bravado at times, and yet seeing these moments of humanity where they either had their doubts or they weren't sure they made the right decision.

The Right System?

I really tried to present various viewpoints on this [in the book]. There have been critics of what has happened. Anti-poverty groups like Oxfam and Public Citizen, which is a sort of government watchdog but also a watchdog of industry, have real concerns about the fact that a lot of government support and taxpayer money went into helping to develop these COVID vaccines. Not just from Moderna, but from others too. And scientific insight, like I mentioned with the NIH.

By being helped by that government support, these companies did see their stock prices go up quite a bit throughout 2020, even now they're kind of up and down, but mostly up. That has had the effect of really boosting the wealth of the executives who have ownership stakes in the companies, and in some cases have also been selling shares all along the way for tens of millions of dollars, and then they're still owning stakes that are worth in the billions. I think there's some discomfort among critics about that.

Now, on the other side, there are people who are very much defenders of what has happened, and they see this as, depending on how you want to look at it, as a byproduct, or even as a just reward, for an ecosystem that really supports a vibrant biotech sector in this country, who say that the way to get the best innovation is to really attract investors who are willing to invest a lot of money in the hopes of big returns down the line. Because, you know, these ideas that started out as someone in the lab 10 years ago could turn into something like hundreds of millions of doses being injected into people's arms to control the pandemic.

[They think] the people who did put in all that work in the years leading up to the pandemic to get the science to a certain point, and to get other aspects like manufacturing infrastructure, at a certain point that they do deserve to be rewarded. And they don't necessarily control the stock price. So if they have a certain stake in a company and it goes up because the market sees that this company looks like it might contribute a lot to ending a pandemic -- or at least getting it under control -- and in the process raking in a lot of sales and profits, that's sort of the way it has to be.

I try to present both of those viewpoints in the book, and I wouldn't say that I come to a strong conclusion. I'd rather just put that out there for people to think about.

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