Large scale manufacture of vaccine: Fred Woolhouse and Bill Foster. Credit: Wellcome Collection.

Drug Money | The Race for a Vaccine

Noah Kulwin

Speaking at a biotechnology conference on June 9 via livestream, Anthony Fauci told the virtually assembled audience that the novel coronavirus pandemic had turned out to be his worst nightmare. Among the few bright spots, America’s best-known immunologist observed, was the pharmaceutical industry’s commitment to developing a vaccine: “The industry is not stupid.”

After all, Fauci reasoned, “there’s going to be more than one winner in the vaccine field because we’re going to need vaccines for the entire world.” The unlikely best-case scenario would be five winners among the five American companies granted federal funding to continue their vaccine trials. 

Although the announcement hasn’t yet been officially made, The New York Times reported on June 3rd that the Trump administration had selected its five grantees as part of the “Operation Warp Speed” project. Four are familiar faces in American pharmaceuticals: Merck, Pfizer, AstraZeneca (which has licensed the work of Oxford University researchers), and Johnson & Johnson. The fifth company, the comparatively small-fry biotech startup Moderna Therapeutics, is both the leader, having advanced its vaccine trial the farthest so far, and the outlier. 

The Cambridge, Massachusetts-based company was founded in 2010 as a drug developer pursuing a high-risk, experimental strategy. By manipulating “messenger RNA” in patients, the research indicates, it’s possible to insert RNA molecules into the human body, which can then produce proteins that can treat a wide variety of diseases. Though other large pharmaceutical companies are also developing mRNA-based vaccines, Moderna is generally regarded as the most significant player in the space. 

The idea of using mRNA to treat disease has been batted around since at least the early 1990s. But the risk posed to patients and the high cost of developing treatments have long made it more of a theoretical than a practical path for drug development. Moderna has published little public data about its work over the course of its existence, but it raised billions of dollars in the private market before its record-setting stock offering in 2018. Despite having never brought a product to market, Moderna had earned itself a $7 billion valuation before going public; its market capitalization is now at $25 billion. The company does not publish its findings in scientific journals, and has released a limited amount of information about its other ongoing vaccine trials. Naturally, it draws frequent comparisons to Theranos, but these are somewhat misleading. 

That Moderna has not yet fully brought a vaccine to market is not as much of a red flag as it might at first appear; drug research normally happens on the scale of decades, not years. And scientists for the most part seem to trust the limited data that Moderna has released so far, even if they are suspicious of how it operates. The Theranos comparisons aren’t totally off-base, though—there is something scandalous happening, just beneath the surface.


By all accounts, Anthony Fauci was absolutely correct when identifying the coronavirus pandemic as having reached the worst-case, nightmare scenario. For example, Fauci now says that he and the U.S. government downplayed the need to wear masks, in spite of the reams of evidence testifying to their efficacy in reducing transmission, out of fear that a run on PPE would leave health care workers without proper gear (never mind that cloth masks are sufficient for most people’s everyday use). 

The fuck-ups are far-reaching. Florida infamously fired a government scientist for refusing to falsify case data, and Utah spent millions on contact-tracing technology that is unable to trace patient contact. Texas Governor Greg Abbott declared that no county or municipal government could mandate mask-wearing, only to backtrack, claiming that a Bexar County executive had “figured out” what he had really meant, which was that Texas governments could only mandate businesses to mandate mask-wearing. Although the number of new deaths from the coronavirus is decreasing, the number of new cases is inching upward; the new truism is that there will not be a second “wave” of Covid-19 in America because the first one never ended. Meanwhile, many federal and state emergency relief measures are set to expire within the next couple of months. Though many Americans do not yet know someone who has died from the coronavirus, they probably know someone who does. 

The supposed bright spot of the American response is its contribution to the worldwide campaigns for a vaccine. A biotech reporter I know covering the “race” for a vaccine told me that while the “end of the year” or “18-month” timeline is patently ridiculous—the familiar sort of lie that Trump White House officials delude themselves into believing, lest they find themselves the bearers of bad news—the actual research seems promising. The fastest-ever turnaround time for a vaccine is four years (the norm is closer to ten), and it’s possible that rushing a vaccine trial increases the likelihood that it will fail. Then again, it’s not like there’s much of an alternative; as Andrew Cuomo put it at one of his near-daily press briefings, “Personal opinion? It’s over when we have a vaccine.”

How fortunate, then, that the American government is spending what it is on vaccine development. The Biomedical Advanced Research and Development Authority (BARDA), created by the Bush administration in the mid-2000s, has already given out Covid-19 vaccine funding grants to AstraZeneca ($1.2 billion), Johnson & Johnson ($500 million), and Moderna ($483 million). Though its dollar amount may be the smallest, it’s Moderna’s grant that has thus far made the biggest waves.

On May 18, Moderna issued a press release declaring that its vaccine candidate data indicated an immune response consistent with that of the actual coronavirus, a potential sign of a vaccine’s efficacy. Experts would later observe that the data set was incomplete; though the disclosure from Moderna may actually have been required by law and technically sound, other pharmaceutical companies might have hedged an announcement like this. (Larger companies would not have publicized the information in the first place, because preliminary data from a single early-stage vaccine trial wouldn’t qualify as material worthy of necessary public financial disclosure.) But Moderna executives practically took a megaphone to the roof. Moderna stock quickly shot up, peaking at around $80 a share in the hours after the announcement. A columnist at the medical news site Stat wrote that Moderna had become “biotech’s Tesla”: a company with promising technology and chief executives bent on juicing stock prices.

Within three hours of the press release, Moderna announced a $1.34 billion equity offering at $76 a share (a 17 percent premium on its current price) that immediately sold out. In the first 48 hours after the announcement was made, Moderna’s two senior-most executives sold off almost $29 million in stock, and three days after that, Moderna’s largest institutional investor dumped nearly $70 million of stock. The company’s five senior-most executives have collectively sold off about $120 million worth of Moderna shares in 2020, according to SEC filings. Moderna has become an increasingly popular holding of biotech-focused Exchange-Traded Funds (ETFs), the passive investment vehicles that now account for nearly half of the stock market. It’s worth recalling here that the company has never brought a single product to market, and that the majority of vaccine trials ultimately fail. 

As the world holds its breath for a vaccine, Moderna executives are pursuing a public relations strategy seemingly designed to boost their personal wealth, backed by government dollars. Should Moderna’s Covid-19 vaccine trial fail, the pandemic will not be any closer to ending, but Moderna executives (and a few investors with a good sense of timing) will be far richer than they were at its beginning. The ploy is not quite as perverse as bankers’ awarding themselves multi-million-dollar bonuses with federal bailout money after the financial crash they helped create, but it certainly rhymes.

A month on, and the Moderna executive stock sales have continued apace. SEC filings show that Moderna’s chief medical officer sold $1.8 million of stock on June 16, exactly a week after he sold $1.6 million of stock. Former SEC officials have told reporters that their ex-employer should mount an investigation of the situation; such probes would have to remain confidential, and the agency’s recent track record is not promising. The day after the Moderna press release, SEC Chairman Jay Clayton pleaded on CNBC for executives at public companies to “please practice good corporate hygiene.”

Meanwhile around the country, lines at food banks grow longer, as do those outside state unemployment offices. Unemployment data suggests that many of the jobs shed at the beginning of the pandemic are not coming back. Congress has not been in session for the bulk of the pandemic, and eviction freezes, expanded unemployment benefits, and stimulus checks are all on track to run out, without any plan for what comes next. And, of course, the virus has not gone away. What Fauci insisted was a bright spot of the pandemic is, in fact, just one of too many black marks to count.

Noah Kulwin is a co-host of Blowback. He lives in Brooklyn.