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Home / Business / Eyeing $ 500M, Modern outlines plans for Biotech's biggest IPO ever

Eyeing $ 500M, Modern outlines plans for Biotech's biggest IPO ever



Xconomy
Boston

One of the biggest biotechnology players is being tested on Wall Street.

Modern, the high-pitched, yet secret developer of messenger RNA therapy, filed papers on Friday afternoon that outlined its long -awaited IPO. In the prospect, Moderna set an initial target of $ 500 million for the offer, which would make it the largest biotechnological market research in history. This number can change as the company gets closer to its debut.

Modern will trade on Nasdaq under the symbol "MRNA", it should complete the offer.

Mother's IPO has been expected for years. MA-based Modern was formed in 201

0 by Flagship Pioneer, Cambridge, and develops synthetic messenger RNA substances, which are intended to assemble the body to produce disease-fighting proteins. Potential can be enormous, unlocking a whole new way of treating disease. But the method is largely untested in humans, and Moderna is not the only company that is working on it – others like CureVac, Translate Bio (NASDAQ: TBIO) and BioNTech are also.

What has made Modern so unusual is that while remaining private and without much clinical data, the company has secured $ 1.8 billion in venture funding, another around $ 800 million through partnership with Merck (NYSE: MRK), Vertex Pharmaceuticals (NASDAQ: VRTX), AstraZeneca (NYSE: AZN) and Alexion Pharmaceuticals, worth $ 7 billion in addition to valuation earlier this year.

With its IPO filing, Moderna had $ 1.2 billion in the bank. However, while reserving around $ 205 million in revenue from partnership and grants in 2017, it suffered a net net loss of $ 256 million. The company has invested heavily in technology. It spent only $ 410 million on R & D in 2017 alone and has burned up $ 865 million since its inception. The prospect shows.

All of this has been part of a high effort strategy by Moderna and its supporters. The company has raised all that cash and kept itself private for years, even in the midst of the longest and successful biotechnology profile running in history. Doing so has made it possible for Moderna to build a massive organization of 680 employees and tinker with its strategy – for example, a short period of time that forms a group of drug-based subsidiaries – without inspecting all the movements in public markets.

The idea is to pay off a wide group of investors by succeeding in scale. With a spokesman for Xconomy earlier this year, Modern CFO Lorence Kim said that the company collected its war chest by selling investors on "width". Contrary to a typical biotechnology that goes public, Moderna has a pipeline of 21 programs, of which 10 are in human testing. Kim said that Modern aims to become a company worth more than 50 billion dollars. Only four biotechnologies Amgen (NASDAQ: AMGN), Gilead Sciences (NASDAQ: GILD), Celgene (NASDAQ: CELG) and Biogen (NASDAQ: BIIB) – are worth it so much.

"We say that we can draw a picture that articulates an indefinite return over time, and that the indefinite return comes from not a drug that changes itself to approval, but instead of a technology pushed forward over time, said Kim at the time. "The most important thing for investors to wrap their arms around is: can we offer that kind of upside? We think we can. "

However, this strategy has increased the expectation of what has been given its significant success in raising money over the years – is really under the hood of Moderna. It has been against typical biotechnology these days when it's standard for businesses to go publicly after a series of B or C funding rounds, even without evidence, their fabrics appear in human tests, and it has made Modern the goal of much envy and skepticism. "If all plays, it would have been genius and brilliant," says Xconomy earlier this year, Third Rock Ventures partner Alexis Borisy, who is not involved in the Moderna. "If that does not, there will be many people who have harmless."

There are many challenges to overcome. It is unclear about mRNA drug production is safe and functioning, and the FDA has never considered these drugs before, making the regulatory path uncertain, noted modern in the prospect. In addition, while Modern's most advanced program is for a fo rm for heart disease, many of their other programs are vaccines, a lower margin activity than other types of drugs. In the prospect, Modern states that it has "observed activity" in Phase 1 studies for six out of seven clinical programs – four of which are flu vaccines, Chikungunya and respiratory syncytial virus. An experimental Zika vaccine has not worked. Other experimental cancer vaccines, medicines for phenylketonuria, Fabry disease and more have not yet produced data in humans.

Flagg ships and AstraZeneca are listed as Moderna's top shareholders, although the prospect did not specify exact bets.

Here's more on Modern, its development strategy over time, and mRNA therapy.

Ben Fidler is Xconomy's venture business, biotechnology. You can send an email to him at bfidler@xconomy.com Follow @benthefidler

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