Update (2100)ET: Moderna priced its stock offering at $76 per share, Bloomberg reported. The price represents a 5.0% discount to Monday’s last sale, and took place on the same day shares jumped 20% after the company revealed positive early results from its experimental vaccine for Covid-19, capping off a 309% rally this year.
Morgan Stanley had initially offered the shares at $75 to $77.50 each. Moderna said it was raising $1.25 billion through the stock sale, and would use the proceeds to fund manufacturing of a coronavirus vaccine.
Insiders did not sell shares in the offering, but judging by their history of selling, we doubt they will wait long before resuming their dumping.
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Update (1625ET): Shortly after the close - following its massive intraday surge on the back of what, at best, were extremely limited and extremely early results of its COVID-19 vaccine - Moderna has announced that it has commenced an underwritten public offering of $1.25 billion in shares of common stock.
Moderna expects to use the net proceeds of the offering to fund working capital needs related to the manufacturing of mRNA-1273, its vaccine candidate against the novel coronavirus (SARS-CoV-2), for distribution in the United States and outside the United States, assuming necessary regulatory approvals are obtained, and the remainder, if any, to fund clinical development and drug discovery in existing and new therapeutic areas; to fund further development of its mRNA technology platform and the creation of new modalities; or to fund working capital and other general corporate purposes.
Morgan Stanley is acting as sole book-running manager for the offering.
The shares are reportedly offered between $75 and $77.50 each, and MRNA shares are sliding after hours...
So MRNA manages to raise equity capital at a price 15-20% above its Friday close... Can anyone say "pump'n'dump"...
If it walks like a stock promotion, if it quacks like a stock promotion... https://t.co/UTiWka8rRd— Jin SEO (@JTSEO9) May 18, 2020
And jumping quickly on the bandwagon, several other biotech stocks immediately offered shares in secondaries:
*KRYSTAL BIOTECH SHARES ARE SAID TO BE OFFERED AT $55 TO $56
*CLOVIS SHARES ARE SAID TO BE OFFERED AT $8.05 TO $8.50
*BELLEROPHON SHARES ARE SAID TO BE OFFERED AT $13 EACH
*NOVAVAX FILES TO SELL UP TO $250M OF SHARES
*HEXO ANNOUNCES PROPOSED OFFERING
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This morning, drug company Moderna shouted from the mountaintops that the first study of its experimental COVID-19 vaccine candidate - an early clinical human trial - showed "promising results". But as analysts later pointed out, the details - for example, the study's focus was 'safety', and vaccine was only tested in two low doses on 8 patients.
Well, one twitter user @TESLACharts who has obtained a large following for their incisive tweets about Tesla (and other valuation-related absurdities) tweeted a surprisingly detailed explanation of why investors should take today's announcement with a massive grain of salt, and why - going forward - they should be wary of the company and any results from the trial, which is being carried out in partnership with NIAID.
As it turns out, not only has Moderna CEO Stephane Bancel (whose Moderna stake has made him a billionaire) been selling a surprising amount of Moderna stock, but a mysterious company called "Flagship Pioneer" that also happens to be Moderna's largest shareholder has been selling large blocks of shares as well. That company, as @TeslaCharts explains, is controlled by Bancel.
2/ Mr. Bancel is a prolific seller of his own company stock, with an aggressive 10b5 plan. He basically sells every week. What's that green flag you say? Let's have a look. $MRNA pic.twitter.com/vuWwIIIrTR— TeslaCharts (@TESLAcharts) May 18, 2020
Though he's not well known to the wider public, Bancel was once compared to Elizabeth Holmes - and that was after the WSJ published its series of reports exposing Theranos as a fraud.
6/ It wasn't that long ago that Mr. Bancel was being compared to Elizabeth Holmes. That's nice. https://t.co/9Z2rhkAV2e— TeslaCharts (@TESLAcharts) May 18, 2020
Another thing: Trump's own Vaccine Czar owns a large slug of Moderna call options. Some have called for him to sell them because of the obvious conflict. But the fact hasn't been widely discussed on Monday is surprising.
7/ Naturally, Trump's vaccine czar owns 156,000 options in $MRNA. There are loud calls for him to divest these options because of obvious conflicts of interest. I'm sure he'll be more than happy to do so at these prices. https://t.co/ycrZDHDABu— TeslaCharts (@TESLAcharts) May 18, 2020
The Twitter user suspects that Bancel will continue selling tomorrow, guaranteeing that "whether or not his vaccine works" Bancel will be "quite rich either way."
8/ As sure as the sun will rise tomorrow, Mr. Bancel will be selling $MRNA stock again very soon at even higher prices. I sure hope his vaccine works. Mr. Bancel will be quite rich either way.— TeslaCharts (@TESLAcharts) May 18, 2020
Basically, while the results released today seemed to suggest that the vaccine can create COVID-19 antibodies in patients, there's still some doubt about how long COVID-19 antibodies can keep patient's immune, or whether COVID-19 might end up evolving like the flu, requiring repeated immunizations to maintain its protective effects. In other words, while this is indeed a promising development, whether or not the vaccine will ultimately be effective remains uncertain.
Meanwhile, readers can watch this mornig's "Squawk Box" interview with Bancel below: