Executives and Employees of Vaccine Developers Including Moderna Have Already Realized Large-Scale Profits

Insider Selling by Employees of 13 Vaccine Developers Quadrupled Last Year to $496 Million

[Image source= Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] It has been confirmed that employees of COVID-19 vaccine development companies such as Pfizer and Moderna sold large amounts of their shares last year as their stock prices surged due to positive vaccine development news.

According to financial information firm Collidescope, employees of 13 vaccine-related companies sold shares worth $496 million last year. This is about four times the $132 million sold in 2019. The number of shares sold increased about twofold from 4.7 million shares in 2019 to over 8.5 million shares last year.

Since Moderna led vaccine development, its employees sold a large volume of shares. Moderna employees sold shares worth more than $321 million. Merck employees sold $58 million worth of shares, and Novavax employees sold $40 million worth. Merck declared last month that it would abandon vaccine development after failing to achieve satisfactory results in clinical trials. Novavax announced positive results from its Phase 3 clinical trials last month.

Moderna's stock price was around $20 at the beginning of last year but surged due to positive vaccine development news. On the 17th, Moderna's stock closed at $176.76 on the Nasdaq exchange.

Such large-scale stock sales by employees raise concerns about insider trading. Large stock transactions by Pfizer and Moderna employees have also been investigated by authorities.

However, vaccine developers maintain that the stock sales were conducted within the legal framework. They followed the SEC's '10b5-1' rule, which allows insiders of listed companies to sell shares according to pre-set trading conditions. Under the '10b5-1' rule, company insiders can set target prices so that trades are automatically executed when the stock reaches the target price. However, companies are not obligated to disclose detailed trading conditions.

A spokesperson for Moderna stated that all employee trades complied with the '10b5-1' rule.

In November last year, Pfizer CEO Albert Bourla sold $5.6 million worth of shares, about 60% of his holdings. Coincidentally, Pfizer announced positive results from its COVID-19 vaccine clinical trials on the same day Bourla sold his shares. A Pfizer spokesperson said that Bourla's stock sale also complied with the 10b5-1 rule.

Jay Clayton of the Securities and Exchange Commission (SEC) testified before the Senate Banking Committee in November last year, stating that improvements are needed to prevent trades from occurring during certain periods even when companies sell shares under the '10b5-1' rule.