With a successful mRNA coronavirus vaccine, 24 products in the pipeline, and a tenfold increase in its stock price since January 2020, Boston-based Moderna gives new meaning to lightning-speed innovation. Employing just 1,500, the company was able to tap into public-private partnerships to play a major role in what has been nothing less than a vaccine revolution—navigating a complex path and rolling out millions of vaccine doses less than a year after the start of a global pandemic. University of Chicago alum David Meline, MBA’86, joined what was then a development-stage biotech firm as its CFO in June 2020. Previously, he served as the CFO at the biotech Amgen and at 3M, and also spent 20 years with General Motors. A constant in his career has been an appreciation for “data and hard facts”—something that traces back to his incoming student orientation at the Booth School of Business. Last month, Meline joined Randall S. Kroszner, deputy dean for executive programs and the Norman R. Bobins Professor of Economics, for a virtual chat as part of Chicago Booth’s Road to Economic Recovery series. They discussed Moderna’s meteoric rise, why the company felt it was essential to make vaccine doses prior to FDA approval, and what Meline has learned as a senior leader in this historic moment.
Randall S. Kroszner: Prior to the COVID-19 vaccine, Moderna had a promising pipeline using mRNA technology, but its first product was not expected to come to market for another four or five years. How did you personally decide to make the career leap to Moderna after having been at some of the largest and most established firms in the world? David Meline: When the company reached out to me, I had just finished six years as CFO of Amgen, so I knew the biotech industry. Moderna was planning for the Phase 3 clinical trial for its coronavirus vaccine, a trial that would include 30,000 people and could allow it to get FDA approval. I understood that there would not be a more interesting, exciting, and impactful challenge, so I decided to join. And they understood that I knew how to build global businesses. Kroszner: What was it like to build out an international manufacturing network for coronavirus vaccine production from the ground up? Meline: When I joined Moderna, we started to build out a largely external network, partnering with capable manufacturers. We got contracting in place, we lined up raw materials to the tune of hundreds of millions of dollars, and we had committed suppliers. Then we were in discussions with governments around the world that—by last summer—were anxious to start contracting with us, even though the technology was not yet proven at the time. In the middle of the pandemic, there was a huge amount of interest in contracting. Recently, we announced the signed contracts—for a total of $18.4 billion—that we have in place for 2021 deliveries. We’ve delivered 67 million doses and are on the way to 100 million in the first quarter. So far so good. Kroszner: The U.S. government, through Operation Warp Speed, took a risk in supporting companies, including Moderna, to develop COVID-19 vaccines more quickly. What role did this ultimately play in vaccine development? Meline: The U.S. government made a decision to place bets on three different technologies, investing in and contracting with two producers for each type of vaccine. In our case, we were a startup biotech company without a history of products. We didn’t have the benefit of a global network, we didn’t have the infrastructure in place, and we didn’t have a credit rating. The support we got in the partnership with the U.S. government was critical to our ability to get to market quickly. We also benefited from the government’s recognition that this mRNA technology, which had never been brought to the world, was likely to be well matched for the challenge. Kroszner: In retrospect, Moderna took on a new approach to investing risks, making the vaccine prior to regulatory approval. What have you learned? — Moderna CFO David Meline, MBA’86 Meline: If you look at the investment thesis, we were taking investing risks in advance of when you traditionally would. Normally when you develop a product like this, you go through a series of trials and take on incremental investment and scientific risks as you go along. In this case, because of the urgency of the pandemic situation, we did these steps in parallel. On the scientific side, it was in close cooperation with the FDA in the U.S. and with health agencies around the world, because you’re monitoring safety and can’t compromise in any way. At the same time, we were investing in lining up the commercial supply, and started producing product as early as summer 2020. If it was not approved and launched, we would have had a loss on those investments. Fortunately, the product came through with efficacy rates of 94%, which is among the best for vaccines that we’ve seen in history. We were able to launch the product successfully and ramp up quickly because we’d taken the risks to invest. Kroszner: Some of my Booth colleagues published a paper on how to accelerate vaccine availability through market forces for a social purpose and have been involved with COVAX, the global initiative to get vaccines to the world’s more vulnerable populations in emerging markets. What is your take on it? Meline: The questions of access, equity, and equitable distribution are important. We’ve continued to have a dialogue with COVAX around supply and we’re interested in that mechanism. As a startup company, we do not have existing commercial infrastructure, including in the United States, Western Europe, or Japan, let alone in the developing markets around the world. We are interested in how we can provide access to our product to potentially all citizens and we recognize our responsibility to do this. COVAX is clearly a mechanism by which we can access areas of the world that otherwise would be inaccessible to us. Recently, we’ve seen some of the countries that are COVAX participants come to us directly. For example, within the past few weeks, we announced contracts with the Philippines and Colombia. Mutations arise from infected people who haven’t been vaccinated, so until you have broad dissemination of vaccines, you’ll continue to see active evolution of the virus. So, there are some strong reasons to broaden access from a public-health perspective. Kroszner: Will vaccines be open to private market participants as the pandemic enters its next stage? Meline: Until now, our customers have been governments and health authorities around the world. We have two supply chains that we’ve set up: One is U.S.-based production for distribution within the U.S. borders. The other was set up in collaboration with our Swiss-based manufacturing partner, Lonza, to fill our international contracts. As we get past the pandemic phase to a more stable, endemic phase, you will likely see a transition to a private market, at least in some countries. It’s reasonable to expect that this process will eventually be similar to what you see with vaccines for other diseases. Kroszner: Can you share more about the possibility of a COVID-19 booster, and what else is in the works at Moderna? Meline: We’ve started some additional trials in the past couple of weeks, and there’s a reasonable likelihood that you’ll see a booster-shot recommendation, perhaps as soon as by the end of this year. In general, we believe this mRNA technology will be effective in terms of its adaptability to accompany the evolution of this virus, which we think will continue. Beyond coronavirus, we have 24 programs for other diseases in the pipeline, and 13 of those are already in clinical trials. They cover a diverse set of conditions, including a cancer vaccine that we’re working on and a set of activities around autoimmune diseases. We have another effort in the cardiovascular area. And then finally, we also have an effort underway against rare diseases that occur in small sets of the population that we think we can go after with mRNA technology. Kroszner: You had to quickly collaborate with diverse teams that included scientists, researchers, and data analysts to bring this to market. What was the work environment like and how were you able to make this work successfully? Meline: One of the critical aspects is that all of this was being done over Zoom. Indeed, I have never met most of my fellow employees. We’re not the only company that is dealing with this situation, and certainly it’s a real challenge for everybody. Sometimes the urgency of this mission does break down the barriers that would otherwise hold us back. It’s not unusual that we will be conducting a meeting and there will be people on the call who will be contributing actively to the discussion and the problem-solving, and then at the end of the meeting, we will all introduce ourselves because they’ve just joined the company. We’ve tended to seek people out with a high level of experience and expertise in their particular specialty area to come in and help us to build out the business. Obviously, the mission that we’re on and the opportunity to contribute has attracted some of the best and brightest in the world in their areas of specialty. My role of course is to also understand the risk-reward trade-offs financially. I depend heavily on my colleagues to make similar types of trade-off decisions scientifically. When you put those together, you can see success. Kroszner: How has your Booth MBA contributed to your accomplishments? Meline: Having a preference for data and hard facts is something that I learned at Booth and that I have carried with me ever since. Even during orientation as an incoming student, I learned about the need for building a framework of analytics. Once you do the analysis, you can understand the alternatives, assumptions, and inputs. The strategy is pretty easy once you’ve done that analysis—more often than not, the answers clarify themselves. Today, I always tell my people I get a seat at the strategic table because I bring the data—and I may have an opinion.
