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Moderna’s Race for a Covid Vaccine: A Fireside Chat with Lavina Talukdar, Head of Investor Relations11 min read

On November 4th, Stern Healthcare Association (SHA) hosted a fireside chat with Moderna’s Head of Investor Relations, Lavina Talukdar. Ms.Talukdar joined Moderna in April 2019 after 20 years as a biotech and healthcare investor. She is an expert in the niche market of investment procurement for mRNA development. Professor Viral Acharya moderated the discussion. Professor Acharya is the C.V. Starr Professor of Economics in the Department of Finance at Stern and an Academic Advisor to the Federal Reserve Banks of New York and Philadelphia. The week of the event, he published a paper on the economic value a SARS-CoV-2 vaccine would bring to society. 

Moderna, a biotechnology company based in Cambridge, MA, was founded in 2010. The company focuses on developing medicines and vaccines based on mRNA, the molecule that relays genetic instructions from DNA to the cell’s protein making machinery.  The company’s technology sends synthetic mRNA into cells to make proteins, which, in the case of Moderna’s SARS-CoV-2 vaccine, mRNA-1273, makes the viral Spike S protein.  In turn, the immune system’s recognition of the Spike S protein as a foreign entity elicits an immune response that causes the body to develop antibodies against the virus that will ultimately protect an individual from future infection. Since its founding, the biotech has not created a treatment or vaccine that has been approved for human use. However, it currently has 21 development candidates, 11 of which are in active clinical trials. The company is worth more than $30 billion and its IPO in 2018 set the record as the biggest biotech IPO at that time.

The discussion started with Talukdar giving a brief history of Moderna, explaining mRNA technology and how their vaccines are different from others on the market. The purpose of all vaccines is to elicit an immune response, i.e. to have the body recognize there is a foreign antigen and to develop antibodies against it. Most biotech companies focus on the biologic aspect of vaccine formulation, which can be found in the flu, hepatitis, and varicella vaccines. The fundamental difference between an mRNA vaccine and a traditional biologic vaccine is that biologic vaccines use a weakened or dead virus or viral proteins to elicit an immune response while mRNA vaccines consist not of the actual virus or viral proteins, but the mRNA sequence – a copy of a part of the virus’ genetic code – to instruct the body to make a viral protein. Although the way that the response is elicited is different, the end result is the same. However, the unanswered question is whether the strength of the immune response is different between mRNA and traditional vaccines. Hopefully, this question will be answered when Phase III trials are complete.

mRNA is a potential new class of medicine. It has four key characteristics that differentiate it from other biotechnology modalities:

1) It can address illnesses and infections that traditional biopharma medicines and vaccines typically cannot.

2) It has a higher probability for success due to its platform and the use of the same “ingredients” and technologies for all mRNA medicines and vaccines.  Success established from one medicine or vaccine can be extrapolated to others in the pipeline.

3) It has the ability to accelerate research and development, again due to the platform.

4) Capital efficiency is much higher than biologic agents.

Moderna had a first-mover advantage in developing a SARS-CoV-2 vaccine, due to the company’s expertise in mRNA. Their strategy is different from other biotech companies because it is solely focused on producing vaccines that employ mRNA technology. Since no actual virus elements are used in the making of vaccines, the recipient is not at risk of being infected. Each vaccine is made of the same four mRNA components, which vary by sequence and length of sequence, plus a delivery technology known as a lipid nanoparticle. There is nothing permanent about mRNA. In fact, the mRNA vaccine itself degrades over a 48-hour time window. It will never integrate within the body; rather, the recognition of mRNA in the body drives the immune response and subsequent production of antibodies.

Talukdar gave us a timeline of the production of Moderna’s SARS-CoV-2 vaccine. After seeing the virus’ DNA sequence, which was released by the Chinese government in January, Moderna was able to formulate a vaccine sequence in only two days (on Jan 13th). Phase I clinical trials started two months later, when the vaccine was administered to its first trial participant on March 16. The FDA allowed Phase II trials to start prior to the completion of Phase I as part of Operation Warp Speed (OWS). The preliminary results of Phase I were released on May 18. The Phase I trial subjects initially consisted of healthy individuals, aged 18 – 55, and then additional individuals aged 56 – 71+.  Full Phase I results, which included the older adults, were released in mid-August and showed positive results. Specifically, the Phase I study revealed that all individuals vaccinated with Moderna’s Covid-19 vaccine produced levels of neutralizing antibodies on the higher end of those who were infected by Covid-19 and eventually recovered. Currently, Moderna is in Phase III of clinical trials with more than 30,000 participants enrolled.  Interim analyses will be released from Phase III in the second half of November.

Talukdar gave us some examples of the regulatory and operational risks Moderna faces, and how its technology platform has some advantages over traditional vaccines. The firm utilizes the same plant and processes for all their vaccines. This is not the norm, since most biotech companies have to use specific plants for specific medications. Moderna has started stockpiling inventory and has begun manufacturing vaccines in case it is given Emergency Use Authorization (EUA) and, ultimately, Biologics License Approval (BLA) by the FDA. If approval is given, it is hoping to manufacture 500 million to a billion doses in 2021 – a monumental task with high risk. The executive team at Moderna is working tirelessly to mitigate risks.  For example, there is currently a shortage of glass vials, so Moderna will distribute the vaccine in multidose vials. The biotech is cautiously optimistic despite its operational risks, while also understanding the amount of risk that must be taken to be a forerunner in Covid vaccine development.

Moderna was able to raise $5 billion in capital early in its history from private investors, at a time when risk was high because data wasn’t available. The US federal government granted Moderna ~$1 billion to help hasten the development process of its Covid-19 vaccine. Later phases of vaccine testing will consume the grant. As part of OWS, the government has given funding to six biopharma firms to promote vaccine development. This is almost a game theory technique: the six firms receiving funding have three different approaches. There are two mRNA vaccines in clinical trials, from Moderna and Pfizer; two in the viral vector of vaccines, from Johnson & Johnson and AstraZeneca; and two that are the more traditional vaccine modality, from Novavax and Sanofi.  This private-public partnership is important in the context of a pandemic because government financial incentives promote vaccine development and innovation.

Moderna’s vaccine will be given in two parts through what is known as a prime-boost regimen. The first dose primes the immune system and the second dose, a booster vaccine given 28 later, increases the number of neutralizing antibodies. Moderna’s vaccine requires storage in an environment that is -20 degrees Celsius, which is akin to home freezer temperatures. The vaccine is stable for about six months in that environment and for about a week at regular refrigerated temperatures. Once it’s taken out of the refrigerator, the vaccine is stable for 12 hours at room temperature. Moderna’s vaccine would be able to utilize infrastructure that’s already widely available and standard in developed countries. From a logistics standpoint, there should not be any issues with distributing the vaccine.

When discussing the cost of Moderna’s vaccine, mRNA-1273, Talukdar shared that the vaccine is priced at $25 a dose, $50 a full course in the US. This is much lower than its economic value, which is around $300-350 a dose. Vaccines will not only differ in cost and how they need to be administered and stored, but also in efficacy. Moderna’s vaccine elicits a strong result in older adults as evidenced by high neutralizing antibody production. Preliminary results from Pfizer’s clinical trials indicate its vaccine can only get up to 40% of the results seen in younger patients in an older population. 

In regard to regulatory changes related to OWS, Talukdar explained that the standards of the FDA, and many other regulatory bodies around the world, are just as high as they would be if there was not an ongoing pandemic. One of the regulations the FDA loosened is that they allowed for parallel trial phases. So, prior to the final results of a Phase I trial, biotech companies were allowed to move into Phase II. This did not come at any safety risk to trial subjects receiving the vaccine. As these biotech firms were waiting for Phase II immunogenicity results, they were able to share early safety data from Phase II trials with regulators, who gave permission to then move into Phase III – again, without subjecting participants in the trial to any risks. 

That said, Moderna and other biotech firms are taking on massive business risk because they are investing in Phase III before the results of previous trials are finalized. No corners were cut, the process was just truncated in that the trials could happen in parallel. In terms of the approval process, despite being in the midst of a horrible pandemic, the role of the FDA is to continue to evaluate any vaccine through a benefit-risk analysis. There needs to be two months of additional safety data after the final results of a Phase III trial are complete before Moderna can apply for EUA. The benefit-risk profile will be assessed by the FDA at that time. EUA is not a full approval. It’ll only grant use for certain subsets of populations, i.e. the elderly, health care workers, and other vulnerable individuals. 

An important question asked during the SHA event was when the vaccine would be widely available. This will depend on FDA authorization. As mentioned, the FDA wants to see at least two months of additional safety data for each participant after the last vaccination. Moderna’s safety data matures at the end of November. Therefore, the very earliest it can apply for EUA would be sometime in late November or early December. Then, the FDA requires at least six months of safety data for full approval. This would bring Moderna to the spring of 2021, a timeline that is more or less consistent with the one publicly given by Dr. Anthony Fauci. While that timeline is remarkably fast relative to previous vaccines and, if all goes well, it will still be some time before the United States achieves herd immunity.

There are two phases in the Covid-19 vaccine market place: the pandemic and endemic phase. The pandemic phase focuses on herd immunization through vaccination to mitigate the virus’ spread. The question then is: how long does the immunity from the vaccine last? The efficacy of any vaccine is not yet known. This leads to the endemic phase, where more information will be found regarding how long antibodies last and if further vaccinations are needed. As time passes and the durability of the vaccines are understood, biotech companies such as Moderna will be better equipped to speak to the booster market.

When asked about competition between biotech firms developing SARS-CoV-2 vaccines, Talukdar responded, “I do think that the world needs more than one winner. When we think about a race with our COVID-19 vaccine, we’re not really thinking about it as a race against any other vaccine, but a race against the virus itself. With the sheer volume required in terms of the number of vaccines, there will need to be more than one player.” Moderna has patented its Intellectual property (IP) on the use of mRNA through its firm’s innovations. However, the firm has stated that it is not looking to enforce this IP during the pandemic and it will allow use of its patents to advance other vaccines.

One last important question asked from a classmate at the discussion was if Moderna is hiring. Talukdar responded that Moderna is actively hiring at all levels of the organization.

SHA’s virtual event with Talukdar was an enlightening and informative event for those in attendance, but the story of Moderna’s Covid vaccine has not yet come to an end. SHA is hoping to organize another fireside chat with Talukdar in the spring when more about Moderna’s SARS-CoV-2 vaccine, mRNA-1273, is known.

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