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Visiting Moderna: Stéphane Bancel on Redefining Medicine

May. 20, 2019

Part 2 of a two-part interview series featuring Stéphane Bancel, Chief Executive Officer at Moderna.

Earlier this year, the Cancer Immunotherapy ETF (Nasdaq: CNCR) team traveled to Norwood, Massachusetts and toured a manufacturing plant of one of CNCR’s holdings, Moderna. (View all holdings of the CNCR ETF). Moderna is trying to develop a new class of medicine by harnessing the power of messenger RNA (mRNA). In addition to the tour, we had the opportunity to interview senior executives of the company in order to learn more about how they are using mRNA against cancer.

In Part 1 of our two part Moderna series that was published in April, we interviewed the company’s Chief Medical Officer, Tal Zaks. We encourage you to read it if you have not already because this informative discussion describes how mRNA potentially represents an entirely new approach to immunotherapy. Dr. Zaks walks us through how Moderna is using mRNA against cancer via two different methods: 1) as a personalized cancer vaccine and 2) through a program where mRNA is injected directly into tumors in order to elicit an immune response and memory.


In Part 2 of our series today, we are publishing an interview with the company’s Chief Executive Officer, Stéphane Bancel. Mr. Bancel walks us through the idea behind mRNA and covers the company’s journey from being a small startup eight years ago to having multiple programs in clinical trials today. He also describes why the design of the Norwood facility was important to him so that it matched mRNA’s role as an information molecule. Below is a transcript of the wide-ranging interview, which has been edited for clarity and length.

CNCR ETF: First can you please introduce yourself and tell us a little about your background?

Stéphane Bancel: My name is Stéphane Bancel and I am the CEO of Moderna. I joined nearly eight years ago when the company was being formed. Before that I was the CEO of bioMérieux, a diagnostics company, for five years and worked at Lilly in various roles in the UK, US, and Belgium.

CNCR ETF: Moderna is based on a technology called messenger RNA or mRNA. For someone who has maybe never heard that term before, at a very high level what does it mean?

Stéphane Bancel: mRNA transfers the instructions stored in DNA to make the proteins required in every living cell. Our approach is to use mRNA medicines to instruct a patient’s own cells to produce proteins that could prevent, treat, or cure disease. We believe mRNA therapeutics and vaccines have the potential to work beyond what’s possible with today’s small molecules (or pills), biologics and vaccines. As of April 2019, we have 20 development candidates in our pipeline - with 11 in clinical studies - across infectious diseases, immuno-oncology, rare diseases and cardiovascular diseases.


Stéphane Bancel joined Moderna as CEO in 2011.

CNCR ETF: How long have people been working on this? You mentioned that Moderna was founded eight years ago. How long have people been thinking about mRNA and why did you found Moderna when you did? What was it then that made you think it was the right time to start a company based on this technology?

Stéphane Bancel: Let me start with the field and then I’ll talk about Moderna and my decision to join. mRNA was discovered almost around the same time that DNA was discovered. When people understood the dogma of biology – DNA to mRNA to protein – they thought that the right way to make proteins for treatments was by using mRNA. If you go back to academic papers from the 1960’s and 1970’s you’ll see that researchers around the world were trying to make mRNA medicines. These efforts didn’t succeed because at the time all the experiments they were running in animals were showing high immunogenicity. They also believed that mRNA was only stable for a few seconds.

In 2010, there was a discovery made at Harvard at the Immune Disease Institute by a professor named Derrick Rossi who was researching stem cell biology. Dr. Rossi used mRNA instead of DNA in his experiments because he thought that over a long period that DNA plasmids in the human body might induce cancer. He was able to make mRNA work in the experiment without the immune response and published this work in the journal Cell. These findings informed a broader effort to use mRNA as a therapeutic.

Moderna’s early platform technology was conceived and launched by Flagship Pioneering’s VentureLabs innovation team, led by Noubar Afeyan (Moderna’s founding and current Chairman – who had worked on recombinant engineering at the Massachusetts Institute of Technology (MIT) for years) working together with Dr. Rossi and two other academic co-founders, Robert Langer (MIT) and Kenneth Chien (Harvard Medical School). Flagship Pioneering founded the company based on the promise of mRNA and the impact it could one day have on human health. They were looking for a CEO so they called me and I came onboard as employee number two.

In terms of what got me excited and kept me thinking about this opportunity – first, I saw the potential for mRNA to become a new class of medicines. Despite all of the wonderful advances made possible by recombinant proteins (or biologics), these treatments can only address proteins that are made in the cell and then secreted into the bloodstream -- like insulin from the pancreas. Two thirds of human proteins that are encoded in DNA are coded to be intracellular (inside the cell) or transmembrane (on the membrane of a cell). Even if you make them using recombinant technology, you cannot use them as drugs because they do not go where they need to go if injected in the body. As a result, two thirds of human proteins cannot be drugged using recombinant technology. When I first saw mRNA technology, I realized the potential to help many more people.

Secondly, I believed that recent advances in biology and technology made it the right time to build a company like Moderna. The timing was essential given the scope of the challenge and resources and capabilities that would be required to climb this mountain. I thought actively managing key risk areas appropriately – particularly technology, biology, execution and financing – would be essential to our success. I got excited about the opportunity to fully integrate digital into how the company would be built and function. I’d say the challenge of the opportunity combined with the importance of the mission is what motivated me to join.

CNCR ETF: That is a big change. You had an important and steady job, and you left it all to run a startup.

Stéphane Bancel: Yes, and I am even more excited today than I was eight years ago because of what the team has accomplished and all the new discoveries that we’ve made along the way.

CNCR ETF: So the whole idea behind the company is that you are trying to redefine how medicine is practiced and how drugs are created with this information technology you have that is mRNA.

Stéphane Bancel: Exactly. We’re trying to create a new class of medicines based on mRNA and help people with a wide range of diseases. We believe this is a journey and know we need time – I’m talking 10 or 20 years – to figure the technology components out and continue generating clinical data to get there.


One of the highly-configurable cGMP development suites at Moderna’s Norwood manufacturing site.

CNCR ETF: People are talking a lot about gene editing right now but one of the potential dangers is that if you make a change to the DNA structure itself, you can have off target problems and that can be permanent. With mRNA, you are still working with the information of life but in a way that is non-permanent, correct?

Stéphane Bancel: That’s correct - mRNA’s role is transient and drug-like, delivering the instructions to create a protein in a specific part of the body and then going away within 48 hours. mRNA does not get into the nucleus and does not attempt to create permanent changes in a person’s genome.

It’s an exciting time to be working in biotech and like everyone, I look forward to seeing data emerge across new technologies so we can better understand the roles they may play in the future – including mRNA, gene therapy and gene editing. We’re proud to be part of an industry driven to help patients and advance science.

CNCR ETF: One thing people wonder about is delivery. How do you get the mRNA into cells so that they start making the protein? For a lot of your programs you are using something called the lipid nanoparticle (LNP). What is that, and why is it a good approach for getting mRNA into cells? How difficult was it to develop that?

“I am even more excited today than I was eight years ago because of what the team has accomplished and all the new discoveries that we’ve made along the way.”
—Stéphane Bancel, Chief Executive Officer, Moderna

Stéphane Bancel: They are all very good questions. The LNP basically for a non-scientist is a big ball of cholesterol and fat in which we put the mRNA. Of course, that is over-simplified. Because you have different pathways into cells and different mechanisms for cells to communicate through their membrane, you have a lot of cells that take up cholesterol. The liver is a good example of this but other cells will also do it. This approach has been used before in other nucleic acids. In fact, Alnylam’s first drug (approved by the FDA last year) for a rare disease uses a similar delivery concept.

It has not been easy – like everything with science. We had a lot of false starts. What I think has been remarkable about what Stephen Hoge (our President, who leads research) and his team have done over the years – and they continue to amaze me – is they have this very unique culture focused on mechanistically understanding what effect the molecule is having in the cell. When they observe something they do not understand, they go and ask the best people in the company and our scientific advisors what they think about the finding and what could have led to it. Then they do controlled experiments to rule out all of those things to determine the real drivers. Sometimes it is several factors, of course. And once they understand it, they engineer it out of the drug and then do the experiment again. If it comes out the with the same result that means they were wrong – and if it is better that means they were right and they move on to the next step. They are very disciplined and very deliberate in how many things they test. We are always learning.

The other piece where I give kudos to the team, the board, and the investors who have backed us is an understanding that we are not going to take shortcuts in the clinic. A few years ago we had a setback where the formulation we were using with our partner Alexion was not sufficient in toxicology studies. We could have taken a program a step further into testing and it might have looked like it was going to work, but the therapeutic window was small. This means we were seeing efficacy at doses in animals where we were seeing toxicity as well. But we knew we had to get this right, not just because quality and patient safety are of the utmost importance to us, but also because we have a platform and the opportunity to deliver dozens of development candidates in the future. We went back to the drawing board and did not take it into the clinic. We spent quite a lot time and money because the team then went into overdrive to address what they were observing. They ultimately developed two different solutions. We then did the GMP (Good Manufacturing Practices) toxicology study for our chikungunya antibody program and showed that even at 10 times the therapeutic dose level there were no adverse events in non-human primates and rats. We then submitted an MMA (methylmalonic acidemia, a rare disease) IND (regulatory application to start a clinical trial) to the FDA with exactly the same technology, the Agency opened the IND, and now we are gearing up for our first Phase 1/2 study in a rare disease.

Formulation involves very complicated science and takes a lot of capital. It is a lot of two steps forward and one step back. But if we are deliberate, and have the right scientific team and the right amount of capital, I believe over time we will be able to get mRNA to more cells. We already have six different modalities - or applications - of our technology that use different approaches. The team is working on more. We are always working on two to three new modalities that we have not disclosed publicly. Why two to three? Because we think that working on only one new one would be too risky. It might take too long to get there. Working on 10 would be a stretch. So we came to the decision that 2 to 3 sounded like a good balance. Stephen and his team are always working on 2 to 3 new approaches. We will communicate them publicly when they are ready to go into the development phase. We are very committed to building new modalities. We think it is part of the core mission and strategy of the company so that we can help more patients over time.


Moderna’s manufacturing site includes its pre-clinical and Phase 1 and Phase 2 clinical manufacturing operations.

CNCR ETF: Let’s talk about some of the investments you have made in the company. For example, where are we today? Can you tell us about this facility?

Stéphane Bancel: Today we are in our manufacturing plant in Norwood, Massachusetts. We opened the facility in July 2018. We decided to build the plant after we received the first human data from our first vaccine trial. One of the biggest questions was ‘are you going to see something in the clinic that you did not see in animal models?’ Perhaps something that would be a big “unknown unknown” that would make you go back to the drawing board? We were very pleased to see that the animal model predicted the positive results of our first Phase 1 vaccine study. We decided to build the manufacturing plant after these findings, because we all (the management team, the board, early investors) believed this is a platform. We knew that in order to realize our vision that we would need a big engine to make those products to supply our clinical trials.

At the time we made the decision to build Norwood, our supply chain was very complicated and messy, like it is for most startups. We had to outsource many of these items to a number of different contract manufacturing organizations all over the world and it was inefficient. That was the best supply chain we could design at the time because we were so tiny that many companies would not pick up the phone when we called.

We thought about our supply needs 5-10 years out and designed a plant that could be big and scalable. We wanted the plant to be fully integrated. Today we make plasmids here, which is one of the key raw materials for the mRNA. We make the mRNA. We formulate it and we put the lipid nanoparticle around it. We put it in the vials, we apply the labels, and we ship it to clinical trial sites. We do quality control here.

Because we were building the plant to meet Good Manufacturing Practices (GMP) standards, it was a natural fit to produce our personalized cancer vaccine programs (PCV) in Norwood. We used to manufacture all the preclinical materials used in PCV manufacturing in Cambridge to manage costs. But real estate in Cambridge is very expensive, so moving our PCV unit to Norwood is saving us money as well.

Norwood is now a fully integrated strategic manufacturing asset. We will be adding more raw materials, like buffers and enzymes, as we continue to grow our capabilities here. We want to be in full control of our destiny and our clear manufacturing priorities are quality, scalability and speed – in that order.

“We want to be in full control of our destiny and our clear manufacturing priorities are quality, scalability and speed – in that order.”
—Stéphane Bancel, Chief Executive Officer, Moderna

CNCR ETF: One word we heard a lot on our tour is digital. Why is that important to you?

Stéphane Bancel: It’s crucial to us for many reasons. If you think about the state of technology today and the integration you can do around systems, constantly going from computers to paper is nonsense. We told the team let’s try to be digital all the way from a product’s design to its shipping. Humans make mistakes when they do repetitive tasks. So first, we think digital supports our quality objectives.


The Norwood site is fully digital, connecting information systems, robotics and machinery.

And this also relates to compliance, which of course is very important since trainings for our teams and record management are essential to ensure a culture of quality. By building digital technology into our systems from the beginning, everything is automated. We can quickly generate a report from a computer right now for the status of the training record in this facility for every operator. We went further in our commitment to quality and connected the batch to the training system so that if someone has not completed their trainings they cannot get into the room.

Digital also helps improve speed. I am a big believer that if you enable employees to leverage technology that their jobs are much more motivating and exciting because they can spend their time inventing things and solving problems.

Another big reason that digital is such a critical part of our approach is that mRNA is an information molecule. If you think about it, mRNA starts as a drug concept in a scientist’s brain. This is very different from a small molecule where you have to look at the chemical structure. In our case, it starts by thinking about a protein. The scientist will think about many details, including the chemistry needed to build the mRNA and which lipid nanoparticle to use. We wanted to make that process as efficient and accurate as possible for our team.

We designed a software program, which we call the Drug Design Studio, where a scientist can enter “an order” for any human protein (because the human genome has been sequenced). A drop-down menu allows them to pick all the features of the molecule – the chemistry, the manufacturing process, the formulation, and so on – and then they can design another one if they want. When they are done with 10 or 15 molecules for that one disease and gene, they can click order (most of the time they are in Cambridge or at home) and this automatically goes to the robots upstairs in Norwood. The team will make it in a few weeks and then ship back to Cambridge or to strategic collaborators like AstraZeneca or Merck.

CNCR ETF: It sounds like a smart idea. This was something that was very apparent on our tour. Thanks for the tour and thank you for joining us. The Cancer Immunotherapy ETF added Moderna as a holding in December and we wish you the highest success.

Stéphane Bancel: Thank you for that, and thanks for coming today.

Thank you for your interest in the Cancer Immunotherapy ETF. Please be sure sign up for email alerts below if you would like to receive notification of other news, company interviews, and research that we publish from time to time.

Opinions expressed are those of the author, interviewee, or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Alexion, Alnylam, bioMérieux and Lilly are not a holding of the Fund or affiliated with the Fund.

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