Cells use mRNA as an intermediary step between genes on DNA and the proteins the genes code for. Rather than manufacturing proteins in incubators like traditional biologic drugs, Moderna's drugs take advantage of the natural protein synthesis process within a cell, introducing mRNA's coding for proteins to treat the diseases directly.
The mRNA could code for a protein as a replacement for a defective protein, like those used to treat hemophilia, or it could act as a vaccine, expressing a viral or bacterial protein to elicit an immune response. Additionally, by using mRNAs that encode for antibodies, it's possible to express typical monoclonal antibody drugs within the cell, allowing the technology to also inhibit proteins that facilitate a disease.
With such a large pipeline, Moderna is clearly the leader in the field, but the company isn't the only one developing mRNA drugs, and investors should keep an eye on its competitors.
Endorsements for competitors
Last year, privately held BioNTech secured $270 million in funding from investors in a series A round. While the company has been around for a while, surviving on funding from a seed round and licensing deals, that's still a pretty big venture capital investment. By contrast, Moderna debuted in 2012 with a $40 million investment from venture capital.
It isn't just venture capital that has endorsed BioNTech; the company has partnerships with Roche's Genentech, Eli Lilly (NYSE:LLY), Sanofi (NASDAQ:SNY), Pfizer (NYSE:PFE), Genmab, and Bayer Animal Health.
In August, Pfizer made an equity investment in BioNTech as part of a multiyear research and development deal for mRNA-based flu vaccines. The 2018 deal included $120 million in upfront, equity and near-term research payments and another $305 million in potential development, regulatory, and commercial milestone payments, as well as up to double-digit tiered royalties on sales of drugs that are developed under the partnership.
Earlier this month, Sanofi made an 80 million euro ($91.5 million) equity investment in BioNTech as part of an expansion of their 2015 pact. The first drug from the original deal, a cancer immunotherapy, is ready to enter clinical trials.
Sanofi has also backed another private mRNA company, CureVac, which is licensing an mRNA-based vaccine against an undisclosed pathogen and has options for up to four additional vaccines. CureVac also has additional endorsements of its mRNA technology, sporting deals with Eli Lilly and Boehringer Ingelheim.
FDA taps the brakes
This week, fellow mRNA company Translate Bio (NASDAQ:TBIO) said the Food and Drug Administration put a clinical hold on its investigational new drug (IND) application for MRT5201 as a treatment for a genetic disorder called ornithine transcarbamylase (OTC) deficiency. An IND is the FDA's way of checking that all the necessary preclinical work has been done before companies start clinical trials.
Translate Bio was pretty vague on the details, only noting that the agency "has additional clinical and nonclinical questions." It's entirely possible that the questions are specific to MRT5201 and have nothing to do with the general mechanism of action of the mRNA class of drugs, but Moderna's investors should still be watching the situation carefully until more information is disclosed.
Plenty to go around, yet still they collide
The promise of mRNA is that it can theoretically treat any disease. The biggest challenge is in delivering the mRNA to the right cells so they can express the protein, which has caused companies to gravitate to the lower hanging fruit of vaccines and cancer immunotherapies. Moderna, BioNTech, and CureVac are developing treatments in both classes, setting up a potential clash if they all make it through the clinical development process and past regulators.
Translate Bio is taking its own route to the finish line with a cystic fibrosis drug, MRT5005, designed to express the CFTR protein that's mutated in cystic fibrosis patients. But investing in Translate Bio right now is pretty risky until more is disclosed about the clinical hold for MRT5201, its only other clinical program.
Check out all our earnings call transcripts.