Moderna Raises Size of its Largest-Ever Biotech IPO to $600M

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Moderna Therapeutics is raising the size of its planned initial public offering from $500 million to $600 million—increasing the value of what was already the largest-ever IPO for a biotech.[Moderna Therapeutics]

Moderna Therapeutics disclosed today that it is raising the size of its planned initial public offering from $500 million to $600 million—increasing the value of what was already the largest-ever IPO for a biotech when filed earlier this month by the developer of messenger RNA (mRNA) treatments.

In its S-1/A amended registration statement, Moderna also set a price range for the 21,739,131 shares of common stock it intends to sell on the NASDAQ Global Select Market under the symbol MRNA, saying the shares would be sold at between $22 and $24 a share.

At the midpoint of that range, $23 a share, Moderna estimated that its IPO would raise net proceeds of approximately $465.5 million—but could rise to $536.4 million if the underwriters were to exercise in full their option to purchase additional shares.

At the full $24 a share, net proceeds would jump to between $486 million and $556.9 million. However, at the low price of $22 per share, net proceeds would shrink to between $445 million and $515.9 million. The company had not specified its proposed share price range or net proceeds estimates in its initial S-1 registration statement, filed November 9.

Moderna has granted a 30-day option to the IPO underwriters to purchase up to 3,260,869 additional shares of common stock at the public offering price, less underwriting discounts and commissions on the same terms.

Moderna’s amended IPO registration statement also disclosed a breakdown for how it intends to use its net proceeds from the offering.

More than half the net proceeds—approximately $315.0 million to $345.0 million—would fund drug discovery and clinical development, further expansion of Moderna’s manufacturing platform and capabilities, and infrastructure to support its pipeline, the company stated.

Approximately $75 million to $85 million of the proceeds would fund further development of its mRNA technology platform and the creation of new modalities.

The remainder of the proceeds—between $170 million and $210 million—would fund working capital and other unspecified general corporate purposes, Moderna added.

“We may also use a portion of the net proceeds to in-license, acquire, or invest in complementary businesses or technologies to continue to build our pipeline, research and development capabilities, and our intellectual property position, although we currently have no agreements, commitments, or understandings with respect to any such transaction,” Moderna stated in its amended IPO filing—using wording identical to its initial filing.

AstraZeneca Among Shareholders

The amended filing also revealed the individuals and entities that are Modena’s principal shareholders.

Moderna’s three largest shareholders include its chairman Noubar B. Afeyan, Ph.D., with 58,882,696 shares (19.5%); Flagship Pioneering, of which Dr. Afeyan is founder and CEO, and which also commands 58,882,696 shares (19.5%); and CEO Stéphane Bancel with 30,942,575 shares (10%).

The fourth largest shareholder is AstraZeneca and related entities, which command 25,499,325 shares (8.4%). Moderna’s pipeline is led by AZD8601, a localized regenerative therapeutic for vascular endothelial growth factor VEGF-A that is being led through clinical development by AstraZeneca. VEGF-A advanced to a Phase II trial earlier this year.

Moderna and AstraZeneca are co-developing mRNA therapeutics under an up-to-$420-million-plus collaboration launched in 2013.

Localized regenerative therapeutics is one of Moderna’s six “modalities” or groups of programs with common product features and the associated combination of enabling mRNA technologies, delivery technologies, and manufacturing processes.

Details of the rest of Moderna’s pipeline have not changed since the company filed its initial IPO registration on November 9.

Headquartered in Cambridge, MA, Moderna and its collaborators have advanced a development pipeline of 21 programs since the company’ inception in 2010—of which 10 have entered clinical studies and another three have open INDs. The company’s therapeutic and vaccine development programs span infectious diseases, oncology, cardiovascular diseases, and rare genetic diseases.

The proposed IPO surfaced nine months after Moderna raised an additional $500 million in a financing round the company said would help it fund further R&D into its pipeline of messenger RNA (mRNA) treatment candidates.

As of September 30, Moderna had raised more than $2.6 billion in total funding from its strategic collaborators and investors, and had cash, cash equivalents, and investments of $1.2 billion, the company stated in its prospectus.

Through September 30, Moderna added, it has incurred approximately $480 million in expenses to advance its platform technology and intellectual property.

Morgan Stanley, Goldman Sachs, and J.P. Morgan are listed as representatives of the underwriters, which include them as well as Merrill Lynch, Barclays Capital, Piper Jaffray, Bryan Garnier & Co., ODDO BHF SCA, Oppenheimer & CO., Needham & Co., and Chardan Capital Markets.

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