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| Moderna CEO Stéphane Bancel |
Pharma giant Merck ($MRK) is buying into the allure of Moderna Therapeutics and its radical promise to transform patients' cells into drug factories, committing $100 million and joining a host of collaborators and investors betting the early-stage biotech is sitting on transformational technology.
Under the deal, Merck will pay $50 million in cash to partner up on 5 antiviral treatments in preclinical development, promising undisclosed milestone payments and royalties down the line. In tandem, the company is making a $50 million equity investment in Moderna, piling onto the $450 million round the biotech closed earlier this month.
The big draw is Moderna's flagship technology, which uses messenger RNA (mRNA) to spur the production of human proteins or antibodies within patient cells, effectively creating an in vivo factory for targeted therapies. The company believes its proprietary approach to mRNA has the potential to treat previously undruggable targets in a wide range of disease areas, touting 45 preclinical programs in its pipeline.
Merck and Moderna are now in a three-year collaboration in which the pair will craft mRNA vaccines that spur the production of antibodies against viruses and other infectious ailments, fighting the spread of disease from within the body.
"Given the tremendous potential for messenger RNA therapeutics across a wide range of therapeutic applications, establishing long-term strategic relationships with world leaders in their fields will accelerate our ability to bring mRNA products to patients in need," Moderna CEO Stéphane Bancel. "Merck's worldwide leadership in vaccines and anti-infective treatments make them an ideal collaborator for us, particularly given their strong commitment to innovation and new approaches to prevent and treat serious viral diseases."
Merck's interest is a valuable co-sign for Moderna, which, despite raising unprecedented sums of money, has yet to get any of its candidates into the clinic and faces some skepticism around the industry. After wrapping its latest funding round, the biotech pledged to buckle down and start marshaling its pipeline assets toward Phase I, and Bancel told Xconomy the company expects to begin its first human trials in the next 12 to 24 months. In the meantime, Moderna is looking to hire more than 100 scientists and researchers to bolster its existing staff of 145.
The Merck deal is Moderna's third major industry partnership, following a $420 million deal with AstraZeneca ($AZN), signed in 2013, in which a whopping $240 million of that total came in up-front cash, among the largest down payments in industry history. Months later, rare disease specialist Alexion ($ALXN) stepped in with a $125 million deal to get its hands on 10 mRNA candidates. In total, Moderna has banked more than $950 million in venture and collaboration cash since its 2011 foundation by Flagship Ventures.
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