Generations of scientists have known that messenger RNA plays a key role in carrying genetic information in cells, but thought the molecules themselves could never be drugs.
Merck, the pharmaceutical giant, just bet they can become drugs after all.
Moderna Therapeutics, the Cambridge, Mass.-based company that has taken the biotech industry by storm with a radical idea for messenger RNA therapies, is announcing today it has secured a big vote of confidence from a company with a reputation for doing rigorous science. Merck has agreed to make a $50 million upfront cash payment to Moderna for the rights to use its mRNA technology to develop as many as five vaccines and treatments against infectious diseases over the next three years. Merck is also making a $50 million equity investment in closely held Moderna. That new shot of $100 million means Moderna has raised a stunning $500 million in private investment this month alone, and it has scooped up a grand total of more than $1 billion from investors and partners in less than five years.
All that money has arrived before Moderna has put its first drug candidate to the ultimate test in clinical trials. It's an unprecedented amount of money for a new drug technology at such an early stage of development.
The idea at Moderna is to essentially make the body into its own drugmaking factory. The company uses injectable messenger RNA molecules to trigger production of protein drugs. Those messenger RNA molecules, which carry the genetic instructions for making proteins, are modified so they can navigate their way into the cell and produce, at least in theory, any kind of protein. For years, scientists have believed the immune system would surely strike down mRNA molecules before they could get into cells and start churning out valuable proteins. But if they could become drugs, they could work on a wide variety of diseases and negate much of the expense and difficulty of manufacturing protein drugs. The rewards for such a new class of treatment are potentially huge, given that some of the most successful drugs today are proteins such as Genentech’s Herceptin for breast cancer and AbbVie’s Humira for rheumatoid arthritis and other autoimmune diseases.
AstraZeneca was the first major pharma company to jump on the mRNA idea about two years ago, when it paid $240 million upfront for the right to use Moderna’s technology on 40 different drug candidates, mainly for cardiovascular, metabolic, and kidney diseases. Other collaborations followed with the Defense Advanced Research Projects Agency, the Karolinska Institute of Sweden, and Cheshire, Conn.-based Alexion Pharmaceuticals. Moderna has also spun out companies to focus on opportunities for mRNA drugs against cancer (Onkaido Therapeutics) and for infectious diseases (Valera).
Roger Perlmutter, the president of Merck Research Laboratories, told Forbes colleague Matthew Herper that he and his team have been keeping a close eye on the Moderna technology. The technology has only been tested in animals, but Perlmutter, an immunologist by training, said he has seen enough from the animal tests to suggest that mRNA could be the basis for new kinds of vaccines and treatments for infectious diseases.
"We had the opportunity to really get in under the hood,” Perlmutter said. “This is a company that we’ve talked with and known for quite a long time. So we had the opportunity to look at them very carefully and to look at the data that they’ve produced preclinically, and frankly it’s enormously impressive. The translation to humans, of course, will have its challenges but it’s something that we felt we were in a relatively unique position to pursue and so did they. I have to tell you the nature of those interactions has been extremely positive."
Moderna hasn’t published its preclinical work in peer-reviewed scientific journals, and, as a private company, it hasn’t been forced to disclose many details of its business to public shareholders. But CEO Stephane Bancel, in an interview at the JP Morgan Healthcare Conference in San Francisco, said Moderna has experimental data from multiple species—mice, monkeys, and ferrets—which showed that its mRNA molecules could produce protective levels of antibodies in the blood with a single shot, after one week. That’s compared to traditional vaccines, which can take several weeks to build up protective levels of antibodies. The company has also run "challenge" experiments, in which its experimental mRNA vaccines protected all the animals that were exposed to otherwise lethal pathogens.
The Moderna approach is flexible, in that the company can essentially can plug in any antigen—a substance that provokes an immune reaction—into its chemically modified messenger RNA vehicle. The new vaccines can be manufactured quickly and cheaply with automated systems, which often isn’t the case with existing vaccines.
The Moderna technology has also shown an ability to produce not just antibodies secreted from B-cells, but it has also been shown to stimulate T-cells of the immune system, Bancel said.
One of the biggest challenges facing Moderna, Bancel said, is hiring enough people to keep up with all the opportunities it sees. The company, founded by Flagship Ventures in 2010 with a team of scientific advisors from Harvard University and MIT, has grown to about 155 employees. It plans to hire another 100 people this year, Bancel said. It has encountered many skeptics, although Bancel said that's starting to change. “I think people are starting now to get it,” he said.
AstraZeneca, for one, has sent an important validating signal to outsiders by continuing to invest in 29 Moderna drug candidates at last count. The financial community can’t get enough. As ambitious as Moderna has been with a dream to disrupt conventional small molecule drugs and protein therapies, it recognizes it can only do so much. Moderna turned away an extra $200 million of investment that would have made its $500 million round a $700 million round. The company didn’t need that much. “It’s bizarre,” Bancel said. “I used to spend my time begging for money. Now I had to go to my board and say ‘We’re going to turn down $200 million.”
Moderna’s work will technically be performed by its new infectious disease spinoff, Valera. The new drug and vaccine candidates will be aimed at four undisclosed viruses. Merck will lead the discovery, development and marketing, while Moderna will design and manufacture the mRNA drug candidates at its automated facility in Cambridge, Mass.
