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Moderna Just Eliminated This 1 Risk

By Adria Cimino - Jun 16, 2021 at 6:00AM

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It has to do with leadership in a key area.

Moderna (MRNA 3.27%) delivered one piece of bad news to investors a few months ago: Chief medical officer (CMO) Tal Zaks will depart in September. The news came during the initial rollout of Moderna's very first product: its coronavirus vaccine. Zaks has been with the company for six years, and shepherded the vaccine from early-stage development through authorization. So, Moderna was about to lose a key character in its coronavirus vaccine story.

Moderna allayed investor fears this week, however. The company announced its new hire -- but not just any new hire. This individual comes to Moderna right from fellow coronavirus-vaccine maker Johnson & Johnson (JNJ 0.48%). Let's take a closer look at how the news eliminates a risk for the biotech company.

Two colleagues in business-casual dress sit at a bank of computer screens; one smiles and points at a specific screen.

Image source: Getty Images.

Two worries

The impending loss of Zaks spurred two worries: First, the search to replace him might extend past the time of his departure. And second, Moderna might have trouble finding just the right person for the job. Finding CMOs is often a challenge, because they must have strengths in a broad range of business and management areas beyond medicine.

The risks of not having a permanent CMO, or the right CMO, are poor or disjointed clinical development strategy and regulatory strategy. Two of this executive's biggest responsibilities are overseeing clinical development and regulatory affairs. And these are two key areas -- especially for Moderna right now.

CMOs are involved in the interpretation of clinical trial data and communication with health authorities, for example. Moderna recently submitted its vaccine to the Food and Drug Administration for full approval in adults. And the company has also submitted it for authorization in the teen population in various countries including the U.S. That's not all. Moderna is now testing the vaccine in children, and is developing a booster candidate to better handle variants. Those files will be next to hit regulators' desks.

As for clinical development, Moderna has plenty to keep the new CMO busy: Its pipeline includes more than 20 candidates. The new CMO will lead the way when it comes to strategy for conducting trials and heading down the regulatory path. Next up is Moderna's cytomegalovirus vaccine candidate. That potential product, aimed at a common virus, is set to begin a pivotal phase 3 trial this year. Also of note are Moderna's launch earlier this year of an HIV vaccine program and an influenza vaccine program. The new CMO will play a significant role in the development of those potential products.

And the new CMO is...

Dr. Paul Burton will join Moderna as of July 6. Burton earned his M.D. from the University of London and his Ph.D. in cardiovascular molecular and cellular biology from Imperial College in London.

He's worked at pharma giant J&J for 16 years. But here's why Burton may be particularly well suited to the Moderna job. He's held the position of chief global medical affairs officer at J&J's Janssen Pharmaceuticals since March of last year. Janssen developed the J&J coronavirus vaccine and commercialized it earlier this year.

Of course, Burton handled Janssen's overall medical affairs strategy -- not just work pertaining to the coronavirus vaccine. But Burton clearly will be particularly familiar with the coronavirus vaccine landscape. And that's a big plus for Moderna. After all, its coronavirus vaccine and potential booster shots make up a major part of Moderna's business right now -- and will continue to do so for the next couple of years.

I don't think many investors expected Moderna to choose the wrong person for the job. But it wasn't necessarily guaranteed that the new CMO would have coronavirus-vaccine experience -- or that this person would be found so quickly.

If Moderna spent a few months in limbo -- without a permanent CMO -- the company's programs could have faced slowdowns along their development and regulatory paths. With Burton arriving in July and Zaks leaving in September, that won't happen; the transition may very well be seamless. That's great news for all of Moderna's programs -- and therefore, good news for its investors too.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and Moderna. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$176.78 (3.27%) $5.60
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