Moderna's Financials(littlebitofeverything.substack.com)
littlebitofeverything.substack.com
Moderna's Financials
https://littlebitofeverything.substack.com/p/moderna-financials
69 comments
You must be new here. I think you’ll be quite disappointed by the rest of HN posts - rarely are they earth shattering.
And this, for me, is one of the reasons why I keep coming back to HN. In a word were sensational news are the norm, and clickbait titles are everywhere, HN stands out as one of the most reliable and accurate places to find information
Actually plenty of HN posts are pretty interesting and offer perspectives that you don’t come across everyday. Not earth shattering, but more than maybe an obvious observation.
I’m quite tired of reading comments on HN that boil down to “nothing new to see here, why was this posted,…”
It’s reductive, boring, and not the goal of a discussion forum. There’s always interesting points to be made, as can be seen from the other comments that tried harder.
It’s reductive, boring, and not the goal of a discussion forum. There’s always interesting points to be made, as can be seen from the other comments that tried harder.
I never said it shouldn't be posted, I provided direct criticisms of the blog post content itself. The topic is still interesting, the author's conclusions not so much.
>> “A company that made a massive, risky investment that was successful has very high margins"
> Is this really earth shattering?
Here’s your comment in full. What were your “direct criticisms of the blog post content”?
> Is this really earth shattering?
Here’s your comment in full. What were your “direct criticisms of the blog post content”?
From the blog post (I was summarizing).
"Moderna grew at a rapid pace while maintaining these huge profit margins"..."Moderna is risky in true sense of the word."
I'm not arguing that Moderna isn't an interesting topic, but rather commenting on this part of the blog post.
Edit: clearly you can't support your point since you have no rebuttal and just called me a troll?
"Moderna grew at a rapid pace while maintaining these huge profit margins"..."Moderna is risky in true sense of the word."
I'm not arguing that Moderna isn't an interesting topic, but rather commenting on this part of the blog post.
Edit: clearly you can't support your point since you have no rebuttal and just called me a troll?
Either you’re being dense, or trolling here. Regardless, I have a long standing policy of not feeding trolls, so I’ll stop replying now.
As mentioned in the article, pharma is high-risk high-reward long term investment. Many companies tried and failed to produce an effective COVID vaccine (CureVac, Merck). Those companies invested R&D dollars well before the pandemic and further invested in recent trials. When a pharma company finds a winner, of course the margin will be great, the raw materials for most medicines are cheap relative to the value they bring. But the margin doesn't account for the 10+ years of R&D spend that put Moderna into the position it is in today.
Is there any good/better way to derisk this process? It's always seemed quite inefficient to me
It seems that at some level, that is exactly the purpose of (publicly-funded) basic research on the academic side. For example, the idea of messenger RNA therapy has been around for decades in the academic literature, and of course this idea was only possible with preceding advancements in general biology.
totally off topic, but can't resist.
on their careers page, under Software Engineers there is this listing:
> Developer, Force Fields
haha, yes, the scifi nerd dream job. :)
on their careers page, under Software Engineers there is this listing:
> Developer, Force Fields
haha, yes, the scifi nerd dream job. :)
I assume it's referring to this:
https://en.wikipedia.org/wiki/Force_field_(chemistry)
And developing software similar to: https://openforcefield.org/software/
And developing software similar to: https://openforcefield.org/software/
Protein folding helps some. Genomics help some. Computer models help with pharmacokinetics.
But all these things help you get to the expensive part more easily: testing safety and efficacy.
https://www.science.org/content/blog-post/big-problems
https://www.science.org/content/blog-post/ai-and-drug-discov...
https://www.science.org/content/blog-post/another-ai-generat...
But all these things help you get to the expensive part more easily: testing safety and efficacy.
https://www.science.org/content/blog-post/big-problems
https://www.science.org/content/blog-post/ai-and-drug-discov...
https://www.science.org/content/blog-post/another-ai-generat...
Or to put it in other terms, "better" ways mean billions of dollars of avoided loss / additional profit to pharma companies doing drug development.
Suffice to say, there are a lot of people always looking at this, and a lot of money being spent on it.
It's just hard.
Suffice to say, there are a lot of people always looking at this, and a lot of money being spent on it.
It's just hard.
Read up on Andrew Lo. He used his background in finance to develop better biotech financing models.
https://www.bloomberg.com/news/articles/2021-02-05/out-of-gr...
https://www.bloomberg.com/news/articles/2021-02-05/out-of-gr...
Currently, no. Bringing a new drug to market takes several years and a billion dollars. And I haven't seen any compelling evidence that anyone is working on a "solution".
A large part of the cost and complexity is the clinical trials, of which several stages of increasing complexity are required to get FDA approval. While it might seem inefficient, it's also the reason why vaccines work so well and have such small side effects - about half of Phase 3 candidates either fail the clinical trial or are rejected by the government for some other reason.
Each round of clinical trials requires significantly more money than the one before it, but it's also arguably easier to get investors on board in the later rounds as risk is lower. Smaller pharma companies often aim to get bought outright before their product is brought to market because it makes more sense for everyone involved.
Maybe someone will come up with an algorithm that lets us simulate clinical trials with sufficient precision, but that seems like a far-off sci fi fantasy to me.
A large part of the cost and complexity is the clinical trials, of which several stages of increasing complexity are required to get FDA approval. While it might seem inefficient, it's also the reason why vaccines work so well and have such small side effects - about half of Phase 3 candidates either fail the clinical trial or are rejected by the government for some other reason.
Each round of clinical trials requires significantly more money than the one before it, but it's also arguably easier to get investors on board in the later rounds as risk is lower. Smaller pharma companies often aim to get bought outright before their product is brought to market because it makes more sense for everyone involved.
Maybe someone will come up with an algorithm that lets us simulate clinical trials with sufficient precision, but that seems like a far-off sci fi fantasy to me.
> But the margin doesn't account for the 10+ years of R&D spend that put Moderna into the position it is in today.
This and the associated economics seem like the central problem with biotechnology funding.
The timescales and likelihood of success preclude anything under the size of government investment. Even Gates can only nibble around the edges.
This and the associated economics seem like the central problem with biotechnology funding.
The timescales and likelihood of success preclude anything under the size of government investment. Even Gates can only nibble around the edges.
Private investment in biotech dwarfs what the US puts in right now.
US gov't (NIH) = $41.6B (not all is for biotech) Biggest pharma (PhRMA members) R&D = $83B VC biotech funding + follow-on rounds = $62B
So private funding is ~3.5x what the gov't spends today.
US gov't (NIH) = $41.6B (not all is for biotech) Biggest pharma (PhRMA members) R&D = $83B VC biotech funding + follow-on rounds = $62B
So private funding is ~3.5x what the gov't spends today.
The Gov't is often the earliest and most risk tolerant investor. I'm mainly thinking of DARPA (who funded Moderna to the tune of $25M if my memory serves) here, I have much less knowledge of how risk tolerant NIH is.
As the article points out, Modern was spending 500M a year on research before becoming profitable. Do you think a one time payment of 25M from DARPA was in any way relevant to their success?
If it happened at the very beginning when they had exactly $0 then yes it would be highly relevant. (I am not at all familiar with how Moderna got started)
An interesting economics exercise would be to evaluate the perverse incentives that could be created when the existence of a company is tied to turning one-time vaccine purchases into subscription revenue, and how to prevent/control them.
For sure. Its rather convenient for Moderna that the vaccines will probably need to be re-administered every year. Which isn't to say that it could be better, just that it isn't, and that's very convenient for them; I bet the creators of the once-and-done MMR vaccine are shooting themselves in the foot, think of how much money they're missing out on.
Or, jeeze, even one dose every year isn't enough! That's very convenient for Moderna. You need two, maybe even three of them. Why not four? Well, hold on there, the science says its two. Until you start digging in to why, precisely, its "two" at "Xmcg dosage" spaced "Y weeks" apart and you realize that the "science" was really only a byproduct of their phase 3 trials, which were rushed, encountered different variants of COVID, and all sorts of other variables. The paperwork was justified with science; science does not justify the paperwork.
Incredibly convenient for Moderna's shareholders how the Federal government is now mandating that everyone in the United States who, I don't know, wants to, you know, work, now has to get vaccinated. Well, Moderna and Pfizer. You get two choices, really, and that means there's competition. Apple or Google. AT&T or Verizon. Moderna or Pfizer. Take your pick.
Its normal to look at this situation and feel an existential dread about our society's future. How its looking more and more likely that we're spiraling toward some dystopian cyberpunk blade-runner judge dredd-esque corporatocracy. Democracy is dying, if not already dead. But, those fears are absolutely unfounded, because they would require that human society be able to survive the next killer virus, global warming, decreasing male fertility, critical supply-chain shortages due to an increasingly global trade network, global nuclear or non-nuclear war, hyper-inflation in an IMF reserve currency, democratic political polarization...
Really looking forward to the new Dune movie though. That should be good.
Or, jeeze, even one dose every year isn't enough! That's very convenient for Moderna. You need two, maybe even three of them. Why not four? Well, hold on there, the science says its two. Until you start digging in to why, precisely, its "two" at "Xmcg dosage" spaced "Y weeks" apart and you realize that the "science" was really only a byproduct of their phase 3 trials, which were rushed, encountered different variants of COVID, and all sorts of other variables. The paperwork was justified with science; science does not justify the paperwork.
Incredibly convenient for Moderna's shareholders how the Federal government is now mandating that everyone in the United States who, I don't know, wants to, you know, work, now has to get vaccinated. Well, Moderna and Pfizer. You get two choices, really, and that means there's competition. Apple or Google. AT&T or Verizon. Moderna or Pfizer. Take your pick.
Its normal to look at this situation and feel an existential dread about our society's future. How its looking more and more likely that we're spiraling toward some dystopian cyberpunk blade-runner judge dredd-esque corporatocracy. Democracy is dying, if not already dead. But, those fears are absolutely unfounded, because they would require that human society be able to survive the next killer virus, global warming, decreasing male fertility, critical supply-chain shortages due to an increasingly global trade network, global nuclear or non-nuclear war, hyper-inflation in an IMF reserve currency, democratic political polarization...
Really looking forward to the new Dune movie though. That should be good.
There are a lot of factors that determine the duration of efficacy of a vaccine. Broadly speaking, you can lump these effects into 1) decaying immune response and 2) mutating disease vectors.
For number 1), what you have to know is that the human immune system is a goofy non-linear Rube Goldberg machine. It's not something that an engineer would come up with. Some vaccines work by promoting an ongoing immune response to certain proteins. You can think of the antibodies as like "wanted" posters, and when a real virus with matching features is detected, it sets off your immune system. But if those proteins are passively introduced, they will decay in your bloodstream over time. Some proteins will hang around longer, others do not, perhaps because it just happens to be structurally similar to some protein that is metabolized by naturally present enzymes. There are also crazy feedback loops that can keep your immune system primed by synthesizing the antibodies from a sort of "memory". Look at the B-cells, they basically pick up any random proteins they think are junk, learn how to synthesize new proteins that stick to it, and then it wears all those proteins around like a hat. And when it's hat sticks to stuff, it tells some other cell to start making lots of party hats for all the other white blood cells to wear so they can sweep up the foreign substances. But these feedback loops are not always stable and can also fade with time. Some antibodies are more stable than others, and some just need a much lower blood concentration to be effective. It's really hard to predict, especially with new diseases.
The best vaccines work by having an actual live virus that lives and replicates inside your body, sometimes for decades. These are your "one-and-done" vaccines, and they're actually really hard to make! You basically have to engineer a virus that lives inside of you, forever, but doesn't hurt you. Instead, it just looks sufficiently similar to a different virus that could hurt you, and it keeps your immune system primed with antibodies to keep the virus in check if you are exposed to it.
Number 2) is the reason we have to get a new flu shot every year. The virus mutates very rapidly and different strains can mix-n-match easily. The Covid virus is already mutating into several variants of concern, and because people are not getting the vaccine which is effective for the strains that are out there now, this will likely become a reason why we have to get regular covid shots.
The upshot of all of this: we had an emergency and needed a vaccine fast. We've come up with two solutions so far: non-replicating adenovirus vaccines (such as AstraZenica, sputnik, etc), and the mRNA ones (Pfizer and Moderna). Both of these work by basically introducing a dead protein into your system, which teaches your immune system how to identify Covid and start attacking it before it can take hold and do damage. But as you can see, it's hard to say how long this can be effective before it needs to be renewed.
Anyone who doesn't like the idea of getting follow-up shots should get to work on making a one-and-done, live, replicating Adenovirus vaccine! But they had better hurry up because if situation 2) takes hold, you're going to need a new shot every year anyways.
For number 1), what you have to know is that the human immune system is a goofy non-linear Rube Goldberg machine. It's not something that an engineer would come up with. Some vaccines work by promoting an ongoing immune response to certain proteins. You can think of the antibodies as like "wanted" posters, and when a real virus with matching features is detected, it sets off your immune system. But if those proteins are passively introduced, they will decay in your bloodstream over time. Some proteins will hang around longer, others do not, perhaps because it just happens to be structurally similar to some protein that is metabolized by naturally present enzymes. There are also crazy feedback loops that can keep your immune system primed by synthesizing the antibodies from a sort of "memory". Look at the B-cells, they basically pick up any random proteins they think are junk, learn how to synthesize new proteins that stick to it, and then it wears all those proteins around like a hat. And when it's hat sticks to stuff, it tells some other cell to start making lots of party hats for all the other white blood cells to wear so they can sweep up the foreign substances. But these feedback loops are not always stable and can also fade with time. Some antibodies are more stable than others, and some just need a much lower blood concentration to be effective. It's really hard to predict, especially with new diseases.
The best vaccines work by having an actual live virus that lives and replicates inside your body, sometimes for decades. These are your "one-and-done" vaccines, and they're actually really hard to make! You basically have to engineer a virus that lives inside of you, forever, but doesn't hurt you. Instead, it just looks sufficiently similar to a different virus that could hurt you, and it keeps your immune system primed with antibodies to keep the virus in check if you are exposed to it.
Number 2) is the reason we have to get a new flu shot every year. The virus mutates very rapidly and different strains can mix-n-match easily. The Covid virus is already mutating into several variants of concern, and because people are not getting the vaccine which is effective for the strains that are out there now, this will likely become a reason why we have to get regular covid shots.
The upshot of all of this: we had an emergency and needed a vaccine fast. We've come up with two solutions so far: non-replicating adenovirus vaccines (such as AstraZenica, sputnik, etc), and the mRNA ones (Pfizer and Moderna). Both of these work by basically introducing a dead protein into your system, which teaches your immune system how to identify Covid and start attacking it before it can take hold and do damage. But as you can see, it's hard to say how long this can be effective before it needs to be renewed.
Anyone who doesn't like the idea of getting follow-up shots should get to work on making a one-and-done, live, replicating Adenovirus vaccine! But they had better hurry up because if situation 2) takes hold, you're going to need a new shot every year anyways.
> But, those fears are absolutely unfounded, because they would require that human society be able to survive the next killer virus, global warming, decreasing male fertility, critical supply-chain shortages due to an increasingly global trade network, global nuclear or non-nuclear war, hyper-inflation in an IMF reserve currency, democratic political polarization...
Growth is a constant and we are not putting the genie back into the bottle. All of these are addressed in some capacity by embracing and enhancing globalism and multilateralism. Working together towards empathic, transnational societies is the only real sustainable way forward. Regression into isolationist fiefdoms with autocratic or monarchic leadership is simply unworkable and not going to happen. I am continually saddened when I see outright or implied support of this kind of thing on HN of all places. The "intellectual dark web" has really done a number.
Growth is a constant and we are not putting the genie back into the bottle. All of these are addressed in some capacity by embracing and enhancing globalism and multilateralism. Working together towards empathic, transnational societies is the only real sustainable way forward. Regression into isolationist fiefdoms with autocratic or monarchic leadership is simply unworkable and not going to happen. I am continually saddened when I see outright or implied support of this kind of thing on HN of all places. The "intellectual dark web" has really done a number.
This is an important point to make. How aware were they of necessitating boosters, specially on a bi-annual interval? And if so, what were the expected chances of such happening?
Pirates of the Caribbean: Dead Man's Chest made $1.07bln global revenue. So Moderna made roughly 4 Dad Man's Chest's of revenue this quarter for their incredibly innovative mRNA vaccine, given to tens of millions of people, saving tens of thousands of lives. A truly sweet deal for society at large.
Source: https://en.wikipedia.org/wiki/List_of_highest-grossing_films
Source: https://en.wikipedia.org/wiki/List_of_highest-grossing_films
or to look at it another way, how low the reward is for genuinely world changing things vs fluff
It’s not really fluff, it’s circus maximus because when you paralyse the masses with entertainment they won’t have time to realise how terrible their lives are compared to the elite.
fluff has a known good ROI
changing the world is very risky, might not be as much of an upside as you expect
changing the world is very risky, might not be as much of an upside as you expect
The rule is "Cost < Price < Value"
Or, alternatively, the vaccine is worth roughly 2/3 of GTA V
This seems like a very short-sighted take at best. Moderna has been around for over a decade. Their goal from the start was to commercialize mRNA therapy, targeting a variety of therapeutic applications such as heart disease and cancer. I don't know if viral immunization was ever even on their radar before Covid happened. The point is, they have been working for a long time to bring mRNA tech to fruition, and now they have successfully demonstrated they can do it. Their business model going forward isn't going to be just collecting rent on Covid vaccines.
This is spot on. My brother is a candidate for one of their cancer treatments once it makes it to a wider testing phase. They didn’t just come up with that in their spare time this year. That’s a long time in the works.
Wishing him a successful and speedy recovery!
> Their goal from the start was to commercialize mRNA therapy
Somehow I just realized the company's name is derived from "mRNA."
Somehow I just realized the company's name is derived from "mRNA."
Yeah it's awesome! And their stock ticker is MRNA too! So cool... https://www.nyse.com/quote/XNGS:MRNA
Let's see how many companies will rename themselves to add mrna to their title
There's 'modified' in there as well:
> Eventually, he figured he had had a name under his nose since 2008, when his lab’s staff started experimenting with modified mRNA and referring to it, for short, as “mod RNA.” Moderna.
https://qz.com/2001718/modernas-founder-says-mrna-can-treat-...
> Eventually, he figured he had had a name under his nose since 2008, when his lab’s staff started experimenting with modified mRNA and referring to it, for short, as “mod RNA.” Moderna.
https://qz.com/2001718/modernas-founder-says-mrna-can-treat-...
> I don't know if viral immunization was ever even on their radar before Covid happened.
Here is a quote straight out from Moderna's patent:
Here is a quote straight out from Moderna's patent:
Severe acute respiratory syndrome (SARS) emerged in China in 2002 and spread to other countries before brought under control. Because of a concern for reemergence or a deliberate release of the SARS coronavirus, vaccine development was initiated.Cool, I did not know that! What/when is this patent?
Vaccines are among the simpler things they could use the delivery technology for.
However, their key advantage over competitors is development speed.
Until COVID-19 though, that wasn't something we needed. If vaccines took an extra 2, or 4, or 10 years to develop, it was usually okay.
However, their key advantage over competitors is development speed.
Until COVID-19 though, that wasn't something we needed. If vaccines took an extra 2, or 4, or 10 years to develop, it was usually okay.
Seems like a fairly modest return for creating one of the first top performing vaccines for a global pandemic. Even if you disregard all the other mRNA R&D they do.
I'm very long Moderna - MRNA treatment platforms seem like such a powerful tool to have. They created one of the best COVID vaccines so far using their existing platform, and have dozens of others in the pipeline for things like cancer and HIV. While sure there is a risk that these MRNA treatments don't work as well as the MRNA COVID vaccine, but I think the smart money is on many of them performing well.
The "smart money"?
Interesting turn of phrase, when we're talking about screwing with one of the most complex, dynamic systems in the world (us, and specifically immune response).
The smart money is probably insider information. Anyone else is guessing about how dice came up for a few million years worth of rolls.
(Edit: Enjoying the knee-jerk reaction that I'm anti-vax(?))
Interesting turn of phrase, when we're talking about screwing with one of the most complex, dynamic systems in the world (us, and specifically immune response).
The smart money is probably insider information. Anyone else is guessing about how dice came up for a few million years worth of rolls.
(Edit: Enjoying the knee-jerk reaction that I'm anti-vax(?))
If you are not anti-vax I have no idea what you are talking about. There is no pro-vax position I can derive from this
It's a vaccination-agnostic comment, about how the complexity of immunological processes make the claim that any drug development involving them is "likely" a hilariously reductive statement.
As an analogy, that's kind of like saying the Wright Flyer flew, so smart money is on the Wright Company being successful. (Except if aerodynamics were about 1000x more complex)
Predicting anything in drug discovery from a financial standpoint is laughably imprecise.
As an analogy, that's kind of like saying the Wright Flyer flew, so smart money is on the Wright Company being successful. (Except if aerodynamics were about 1000x more complex)
Predicting anything in drug discovery from a financial standpoint is laughably imprecise.
To say deserved for a group of vaccines (they are prophilactics if you have to take one every few months to get benefits) that don't work, is astonishing by this dates, but nobody mentioning it's crazy. Pharma is a company that makes money from sick people, if that isn't enough for you, is one of many examples of why we are nnot going to make it as a species.
A vaccine so effective, it needs to be taken again every few months.
For treating COVID, it's almost as effective as horse worm medicine.
For treating COVID, it's almost as effective as horse worm medicine.
Another way of saying a virus so effective, the best humanity came up with is an antidote that wears off every few months.
It's a weakness of the human immune system, not that of the vaccine. Even when you are infected with the actual Coronavirus the immunity only lasts for months.
[citation needed]
I'm guessing you have seen reports of antibody levels falling, but that is not an indication of immunity.
So far I have seen no reports of natural immunity (as measured in confirmed reinfections) falling.
I'm guessing you have seen reports of antibody levels falling, but that is not an indication of immunity.
So far I have seen no reports of natural immunity (as measured in confirmed reinfections) falling.
There are many reports of natural immunity waning [1][2] and they are not only about antibody levels but the actual probability of a reinfection. I never said natural immunity is worse (or better) than vaccines, but it definitely gets weaker over time.
[1] https://www.cdc.gov/media/releases/2021/s0806-vaccination-pr...
[2] https://apps.who.int/iris/bitstream/handle/10665/341241/WHO-...
[1] https://www.cdc.gov/media/releases/2021/s0806-vaccination-pr...
[2] https://apps.who.int/iris/bitstream/handle/10665/341241/WHO-...
Wouldn’t that just raise valuation?
> Today I learned that Moderna (and maybe Pharma industry?) has better margins than Facebook.
Imagine if a spiked blogging platform that literally makes money by relative demotion of unpromoted content produced better margins than the creation of a life saving vaccine for all humanity. How insane that would be.
Imagine if a spiked blogging platform that literally makes money by relative demotion of unpromoted content produced better margins than the creation of a life saving vaccine for all humanity. How insane that would be.
Sometimes the business world really feels that way. Glad to see probably one of the greatest breakthroughs in the history of mankind is highly profitable. Maybe modern capitalism isn't completely toxic!
Is this really earth shattering?