Reprogramming cells to fight disease: Rewriting the rules of biopharma R&D
Moderna is a pioneer in the revolutionary new field of RNA therapetutics – a technology which allows the human body to help heal itself. No only are they delivering a new technology, but they're doing it in a novel way. Remember Wyeth Pharmaceuticals? They took 4-7 years to discover a new drug target and begin preclinical testing. Moderna does it in a matter of weeks.
Intro
Earlier this year, CNBC recognized Moderna Therapeutics (Moderna) as the country’s most ambitious and innovative private company changing the economy and overall business landscape.[1] The accolade speaks not only to the potential of Moderna’s new technology, which allows the human body to help heal itself, but also to Moderna’s unique business and operating models that are revolutionizing drug R&D.
The Technology: Moderna is a pioneer in the revolutionary new field of RNA Therapeutics. Moderna is specifically developing messenger RNA (mRNA) therapies which reprogram cells to produce proteins and antibodies.[2] In the future, instead of being injected with a drug, your body’s cells could produce the medicine for you.
The Business and Operating Models: Wyeth Pharmaceuticals took 4-7 years to discover a new drug target and begin preclinical testing.[3] Moderna does it in a matter of weeks.[4] Rather than developing their own therapies, Moderna has created a network of partners who will leverage the Moderna mRNA platform for development of new products. This business model is combined with a highly automated, standardized manufacturing capability that allows them to create and test new therapies rapidly.
A Quick Primer on mRNA
DNA contains genes that provide cells with the instructions for making specific proteins. To make a protein, a gene is transcribed from the DNA into messenger RNA (mRNA) which carriers the instructions to ribosomes that translate the mRNA into a protein. MRNA therapies go directly to ribosomes for translation and do not interact with DNA, so the effects are not permanent and don’t alter a patient’s genes.[5]
These new therapeutics are particularly promising from two reasons:
- They can require much less frequent dosing (in clinical trials some drugs that are injected every two weeks can be replaced with one injection every 6 months)[6]
- They can produce proteins within cells (i.e., intracellular proteins). Current technologies only allow for transmembrane and secreted protein-based therapies which act on the exterior of cells.
https://youtu.be/q8qqAkaPGqo [7]
Business Model
Moderna’s business model is designed to rapidly bring mRNA therapies to patients. Traditional pharmaceutical companies (like Wyeth) have business and operating models designed to identify drug targets for a specific disease. Discovery research alone can take 4-7 years,[8] with another several years before the drugs are approved for use. Moderna, rather than developing individual drugs, “is creating a technology ‘platform,’ akin to an operating system, that can help multiple business partners develop medicines,” according to CEO Stephane Bancel.[9] A platform-based business model is key to achieving Moderna’s stated mission and vision:
Our Mission: To deliver on the promise of transformative messenger RNA (mRNA) science to bring new medicines to patients.
Our Vision: To unlock the potential of mRNA Therapeutics™ by establishing an ecosystem of teams and partners that will work together to develop the broadest possible array of drugs, across diverse therapeutic areas and routes of administration, for serious diseases that are not treatable today.[10]
A universal platform allows partners to work on drug targets they already know a lot about and replace protein-based therapies they’ve already had approved by the FDA with an mRNA version. Moderna sources initial discovery through partnerships with research institutes and traditional pharma companies. In fact, Merck, AstraZeneca and Alexion have each paid tens of millions of dollars to have Moderna develop therapies for specific drug targets (DTs).[11] Since their founding in 2011, they’ve already got more than 60 DTs in preclinical testing and one drug in clinical trials.[12]
This business model also allows them to build their platform using partner money. While they’re very well financed (~$1Bn in financing), they continue to have $900Mn in cash on hand,[13] preferring instead to use money from partnership contracts to fund development of their platform and run tests on particular targets.
Operating Model
Moderna’s operating model seeks to “flatten the mRNA learning curve across the full breadth of competencies needed to drive the platform forward.” In particular, Moderna is building highly automated production and manufacturing capabilities through advanced robotics technology and first-in-class drug discovery software which enables scientists working with Moderna to design, order, and optimize a drug in a matter of minutes, for delivery in weeks, from a cloud-based portal.[15]
https://youtu.be/vR3nauEkiuI [16]
Their operating model gives them opportunities to work on many DTs simultaneously, scale production quickly and rapidly innovate. Combined with their partnership-based business model this allows them to deliver on their mission and vision of quickly bringing the promise of new mRNA therapeutics to patients with a variety of medical needs from infections, to cancer and rare disease.
Citations:
[1] “CNBC Disruptor 50 List.” CNBC. <http://www.cnbc.com/2015/05/12/cnbc-disruptor-50.html>
[2] Moderna Therapeutics Company Website, “mRNA Expression Platform.” Accessed on December 5, 2015. <http://www.modernatx.com/mrna-expression-platform>
[3] Huckman et al. “Wyeth Pharmaceuticals: Spurring Scientific Creativity with Metrics.” Harvard Business School. April 6, 2010. Page 5.
[4] Moderna Therapeutics Company Website, “mRNA Expression Platform.” Accessed on December 5, 2015. <http://www.modernatx.com/mrna-expression-platform>
[5] Alnylam Company Website. “About RNAi.” Accessed on December 6, 2015. <http://www.alnylam.com/our-approach/about-rnai/>
[6] Reuters, “Alnylam, Medicines Co Cholesterol Drug Effective for Six Months: Study.” November 11, 2015. < http://reut.rs/1OEnCWn>
[7] YouTube, “A Quick Primer on mRNA.” <https://youtu.be/q8qqAkaPGqo>
[8] Huckman et al. “Wyeth Pharmaceuticals: Spurring Scientific Creativity with Metrics.” Harvard Business School. April 6, 2010. Page 5.
[9] Weisman, Robert. “Boston Area is Leading RNA Renaissance.” Boston Globe. February 5, 2015. <https://www.bostonglobe.com/business/2014/02/05/companies-developing-rna-therapeutics-are-suddenly-upswing-biomedical-world/CmN09T59A6qu7nteLhzIjP/story.html>
[10] Moderna Therapeutics Company Website, “Mission and Vision.” Accessed on 12/3/2015. <http://www.modernatx.com/about-us/about-us>
[11] Moderna Company Presenation at HBS. October 20, 2015.
[12] Ibid.
[13] Moderna Therapeutics Company Website, “Corporate Facts.” Accessed on 12/3/2015. <http://www.modernatx.com/about-us/corporate-facts>
[14] Moderna Therapeutics Company Website, “Our Business Model.” Accessed on 12/3/2015. <http://www.modernatx.com/our-business-model>
[15] Moderna Therapeutics Company Website, “Manufacturing and Automation.” Accessed on 12/3/2015. <http://www.modernatx.com/our-mrna-platform/manufacturing-and-automation>
[16] YouTube, “Moderna Therapeutics: Drug Design Studio.” <https://youtu.be/vR3nauEkiuI>
The future of medicine.
Truly fantastic company (and post), Mike! This technology can be used in so many fields of medicine. If they are successful at delivering their RNAs to specific cells, Moderna might be able to lead the way to personal medicine, which everyone is excited about. They might even be able to touch other applications, such as animal health – just saying. The IF I mentioned is, however, a serious condition: drug delivery has always been a challenge. Do you think it will be a bottleneck? Finally, with gene editing becoming easier than ever (CRISPR), do you think gene therapy is a competitor to RNA therapeutics?
This technology Moderna is working on clearly has the ability to revolutionize the practice of medicine if it works, but that “if” is still pretty large. Part of the difference between Moderna and other biotech/pharm companies is that Moderna is working on developing a novel therapeutics with technology that is also new; biotech and pharma companies may be developing novel small molecules and proteins, but they are doing it on tried-and-true technology that has existed for decades. As a result, it seems to me that Moderna is a huge gamble – if the technology they are developing is effective, then they are faced with a massive range of therapeutics that could conceivably be developed. If, however, the technology they are developing does not work, then their therapeutic capacity is effectively zero. Do you find it troubling that so many drug companies are investing in Moderna when it still is at such an unproven, largely theoretical, stage?
Assuming mRNA therapeutics and Moderna’s technology is effective and approved, it raises concerns in the future as to whether their operational model will be able to handle the increased personalization and volume that physicians would call for. The drug design studio in the video appears to be set up with a research focus – “scientists” can order a set of custom mRNA, presumably for study. However, as more research is conducted, physicians would presumably want to tailor-make mRNA treatments that are designed specifically for an individual patient’s genome and disease in question. How is Moderna planning to accommodate such limitations in economies of scale? Or do you see mRNA production as being so increasingly simple that this is a non-issue?
Furthermore, I would guess that the fields of medicine that are going to be radically altered within our lifetimes (and as such will generate potentially enormous cash flows) are neurology, oncology, and rheumatology. I expect them to undergo massive development over the next 50 years the same way cardiology, orthopedics, and (again) oncology have changed in the past decades. However, it does not appear that we know how to direct mRNA therapeutics to central nervous tissue. Again, this is a roadblock that diligent science will undoubtedly crack at some point the future, but do you find it problematic that it removes one of the largest potential markets for Moderna in the present time?