Moderna Abruptly Delays Phase 3 Clinical Trial of COVID-19 Vaccine... "Doubts Over Development Capability"

After 10 Years Since Establishment, Over 20 Therapeutics and Vaccines Developed but All Commercialization Attempts Failed
Stock Price Drops 4.9%, Executives Face Criticism for $200 Million Insider Trading and Moral Hazard

[Image source=EPA Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Moderna, the American pharmaceutical company that had raised expectations for the development of a novel coronavirus (COVID-19) vaccine through 'antibody formation,' suddenly postponed its Phase 3 clinical trial. Concerns have arisen about potential problems in the vaccine development process, along with controversy over possible 'scam' accusations, as there is a risk of losing the funding it has received so far.

On the 2nd (local time), the American medical media outlet Stat News reported that Moderna's COVID-19 vaccine 'mRNA-1273' Phase 3 clinical trial was abruptly postponed. Citing multiple anonymous investigators, Stat News stated that Moderna delayed the clinical trial schedule and that the start date is unknown. Additionally, Stat News reported that they inquired with Moderna about the resumption timing of the clinical trial, the vaccine's safety, and whether there were any issues in the manufacturing process, but received no response.

Immediately after the report of the clinical trial postponement, Moderna's stock price plummeted on the New York Stock Exchange (NYSE). On that day, the stock price fell 4.9% compared to the previous day, closing at $58.57. However, Moderna CEO St?phane Bancel somewhat mitigated the decline by stating in an interview with CNBC that "Phase 3 clinical trials will proceed in July. We have always said July."

Moderna began to attract attention after the U.S. National Institutes of Health (NIH) announced in January that it would jointly research a COVID-19 vaccine. In April, the U.S. Biomedical Advanced Research and Development Authority (BARDA) announced it would support Moderna's vaccine development with $438 million (approximately 526.2 billion KRW). Particularly, the news in May that antibodies were formed in all 45 participants of the Phase 1 clinical trial of the COVID-19 vaccine became a turning point in enhancing Moderna's reputation. The stock price also surged, reaching an all-time high of $80 on May 18, more than four times the early-year price of $19.23.

As Moderna has not fixed a specific date for the Phase 3 trial, doubts about its vaccine development capability have emerged. According to The Wall Street Journal (WSJ), Moderna is a U.S. pharmaceutical startup founded in 2010 that has developed over 20 vaccines and therapeutics since its establishment but has not succeeded in commercializing a single one. WSJ reported that skepticism about Moderna's actual vaccine manufacturing capability has always followed since its founding in 2010.

In particular, since funds have been secured for vaccine development, there is a high possibility that issues of moral hazard will be raised. Moderna's executives have been criticized for selling stocks amid the stock price surge and making huge capital gains. The Washington Post (WP), citing analysis data from Equilar, a company specializing in executive compensation analysis, reported that Moderna CEO St?phane Bancel and other executives have earned over $200 million from stock option sales since January. Earlier in May, Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), advised in an interview with CNBC that "even if there is no legal problem, they cannot avoid criticism for exploiting the COVID-19 disaster for profit," recommending that no further stock sales be made.

Interest in vaccine development is now focused on other pharmaceutical companies preparing for Phase 3 trials. According to CNN, U.S. Pfizer and Germany's BioNTech plan to start Phase 3 trials with 30,000 participants from the end of this month. The UK’s AstraZeneca, together with researchers from Oxford University, is expected to begin Phase 3 trials next month.