Shareholders have been pleased with the company’s mRNA vaccine, but some, including the company’s cofounder, are cashing in on their stock gains.
Adam Glanzman/Getty Images
Shares of Moderna, Inc. have grown exponentially since the start of the global pandemic. The stock has quadrupled in price from $51.20 in April 2020 to this morning’s price of $173.52. Shareholders have been pleased with the company’s mRNA vaccine, but some large stakeholders, including company executives, are cashing in on their stock gains.
According to Forbes, Flagship Pioneering, which launched Moderna, sold more than $1.5 billion worth of Moderna shares since the start of the global pandemic last year. Two of Flagship’s funds, Flagship Ventures Fund IV, L.P. and Flagship Ventures Fund IV-Rx, L.P. sold 53% of their Moderna holdings for more than $1.4 billion over multiple transactions in February and March of this year. Last year, the funds also sold 1 million shares for $68.2 million, Forbes said. According to SEC filings, Noubar Afeyan, founder and chief executive officer of Flagship and chairman of Moderna, owns at least 75% of Flagship, and the firm directly owns 4% of Flagship Ventures Fund IV but doesn’t own any of Flagship Ventures Fund IV-Rx, according to Forbes.
“Our sales over recent weeks and months were pursuant to a 10b5-1 plan put in place last December and executed in two installments following the passage of 60 days from the original filing. As per our Form 4 filing, this program covered 10 million shares, and is now concluded. At the time Moderna spun out from Flagship ten years ago, Flagship held roughly 60 million shares, and since 2019 it has periodically made distributions of roughly half that sum to its investors. We currently retain 20 million shares of Moderna stock,” Flagship Pioneering told BioSpace.
Flagship Pioneering isn’t the only shareholder at Moderna to capitalize on the company’s stock growth. Several of its executives have as well. Chief Executive Officer Stephane Bancel has sold off about 7% of his stake in the company since last year. Chief Medical Officer Tal Zaks and President Stephen Hoge have also sold off significant chunks of stock. Collectively, Moderna executives and Flagship funds have sold nearly $1.9 billion of Moderna stock since March 2020, Forbes said.
It’s not just happening at Moderna. Forbes noted that executives at Pfizer and Maryland-based Novavax have sold off shares for a combined $400 million. Both of those companies have seen a boost in stock prices due to the development of COVID-19 vaccine candidates and therapies. Last year, BioSpace noted that executives at Novavax were awarded stock options worth tens of millions of dollars for achieving regulatory milestones with the development of a vaccine candidate, a vaccine that could see Emergency Use Authorization in the U.S. and U.K. later this year. Also last year, the company awarded 2.5 million stock options to all of its employees in April.
The executives who have opted to cash out some of their holdings may be doing so at the right time. According to a The Wall Street Journal, many biotech and pharma stocks are falling due to clinical setbacks and other factors. The article notes that the Nasdaq Biotechnology Index has fallen 10%. The decline has left the biotech index up a slight 2.2% for the year, according to the article. In 2020, the Nasdaq Biotechnology Index gained 26%, largely based on the promise of vaccines and therapeutics aimed at COVID-19.
The Nasdaq Biotechnology Index has fared worse than the S&P 500 and the Nasdaq Composite. Investors are often drawn to the significant gains a company can make following the announcement of a clinical breakthrough or collaboration. However, the market can be volatile, particularly if a company reports negative news. As an example, Forbes pointed to a 78% drop in share prices for Frequency Therapeutics on March 23 after the company revealed its lead drug failed to reach endpoints. In its analysis, Forbes suggests the “disparity illustrates the heightened riskiness of biotech investing, where clinical trials and regulatory decisions can make or break a company’s value.”
