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How Moderna executives are cashing in on COVID-19 vaccine stock speculation – Reuters

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(Reuters) – Biotech firm Moderna Inc could reap tens of billions of dollars in sales and stock appreciation if it wins the race for a COVID-19 vaccine. If it loses, the early-stage company’s value could crash.

FILE PHOTO: A sign marks the headquarters of Moderna Inc, which is developing a vaccine against the coronavirus disease (COVID-19), in Cambridge, Massachusetts, U.S., May 18, 2020. REUTERS/Brian Snyde

In the meantime, the firm’s chief executive is pocketing millions of dollars every month by selling shares that have tripled in price on news of Moderna’s development progress, a Reuters analysis of corporate filings shows. The sales – by CEO Stéphane Bancel, his childrens’ trust and companies he owns – amount to about $21 million between January 1 and June 26, including $6 million in May.

The company’s chief medical officer, Tal Zaks, has cashed out the majority of his available stock and options, netting over $35 million since January, the filings show.

The lucrative liquidations highlight the unusually powerful incentives for biotech executives to highlight development milestones for drugs that often never get approved or sold, according to interviews with seven executive-compensation experts. Optimistic corporate statements on coronavirus vaccines, they said, could cause investors to overpay for company shares or create false hope among the public and health officials seeking new weapons to fight the pandemic.

Bancel set a fixed schedule for his share sales – known as a 10b5-1 plan – long before the pandemic hit. Such executive share-sale plans are meant to guard against insider trading, avoiding the potential for executives to sell in advance of bad news they know is coming, or to put off selling until after a positive announcement.

Zaks sharply increased the pace of his sales with a new plan he put in place on March 13. That was three days before Moderna announced it had dosed the first human with a vaccine candidate, news that sent its stock price up 24% and signaled that future development milestones might push the shares higher.

The sales give the firm’s executives an unusual opportunity to lock in big profits on what could be fleeting market optimism, said Jesse Fried, a Harvard Law School professor who wrote a book about executive compensation.

“This may be their one shot at making a boatload of money if the vaccine doesn’t work out,” Fried said. Executives have wide discretion in releasing information, he said, and Moderna’s chiefs have a powerful motivation to “keep the stock price up.”

Reuters found no evidence that Bancel, Zaks or Moderna has exaggerated the company’s vaccine progress.

Many news outlets have reported sales by Moderna executives in the wake of positive news on its vaccine efforts. Reuters is the first to report that Bancel and affiliated entities are selling 90,000 shares every month and that Zaks moved to sharply increase his sales in March, three days before Moderna released market-moving news.

A Moderna spokesman said that Bancel is liquidating only a small portion of his holdings and that “substantially all of his family’s assets remain invested in Moderna.” This stakeholding reflected Bancel’s “long-term commitment” to the firm, the spokesman said. Bancel, his companies and his children’s trust own more than 24 million Moderna shares, making him the second largest stockholder, owning about 8% of the firm, down slightly from the beginning of the year.

Zaks did not respond to requests for comment, and Moderna did not comment on his share sales.

The high frequency, volume and profits of Bancel’s transactions – at about 90,000 shares monthly – are unique among the CEOs of 26 companies identified by Reuters as developing COVID-19 vaccines or treatments and that regularly publish information on executive trades of company shares.

Twenty-one of the firms have seen their stock rise since the end of January, just before coronavirus spread globally, and ten of those, including Moderna, have seen share prices at least double. But just four of the CEOs of those firms, including Bancel, have sold company stock. Only one – Chad Robins of Adaptive Biotech – made substantial, regular sales under a 10b5-1 plan, like Moderna’s Bancel. Adaptive Biotech, however, has seen a far smaller recent stock-price increase – about 50% – than Moderna. During May and June, Robins sold about $12 million in stock after Adaptive’s stock price rose on news that it is researching antibody therapies and a coronavirus test that delivers faster results.

Adaptive Biotech declined to comment and referred to a company filing that said Robins sold the stock to diversify his investments.

Most of Bancel’s sales have been carried out through plans in place since December 2018, the filings show. The transactions started in November 2019, when a trust belonging to his children began selling 11,046 shares each week. This January, Bancel and two companies he controls started selling stock regularly. Since then, they have collectively sold about 90,000 Moderna shares each month.

HIGH RISKS, REWARDS

Such scheduled sales are more common at early-stage biotech companies such as Moderna – which face intense risk-reward scenarios – than at more established and diversified drug firms, where executives frequently hold their equity until they leave the company.

Executives’ ongoing sales are an effective hedge against the bigger downside risk faced by companies like Moderna. Based in Cambridge, Massachusetts, the firm has more than 20 therapies and vaccines in development – but none near approval. Investors view the firm as a frontrunner in creating a COVID-19 vaccine, but it faces 17 serious competitors with candidates in clinical evaluations and 129 others in earlier development stages, according to the World Health Organization. Only a very small number of companies are expected to get vaccines to market, biotech executives and health experts say.

If Moderna successfully launches its coronavirus vaccine and a dozen other of its most promising trial medicines, its stock price could rise to $279 based on the new revenues, according to Morgan Stanley analysts. That would yield Bancel a fortune of about $10 billion including currently unvested share options, the Reuters analysis shows.

The firm’s stock has soared from $18 in late February – just before it announced it had shipped its vaccine candidate to the U.S. government for trials – to close at $56.57 on July 2, down 5%, after a report that the start of its large vaccine trial would be delayed. That gives the company a market capitalization of nearly $23 billion. The stock hit a high of $80 in May.

But Morgan Stanley also has a “bear case,” in which the company would be worth only as much as the cash on its balance sheet if all of its vaccine and drug candidates don’t make it to market.

‘SCIENCE BY PRESS RELEASE’

Bancel and Zaks have been bullish on Moderna’s prospects in public statements.

Bancel calls the mRNA technology the company uses for all vaccine development the “software of life,” with potential to create “a new class of medicines.” He has also said Moderna’s process can create vaccines much faster and with a better chance of “technical success” – and, by implication, regulatory approval – than other firms.

“We are not aware of anybody else who can do this at this scale, with this focus, at this speed,” he told investors on June 2. Earlier, in a May 7 earnings call, Bancel said he had “never been as excited and optimistic about the future of Moderna.”

Many investors and analysts are optimistic as well but say it is difficult to evaluate Moderna’s prospects given the early stages of trials.

The company drew criticism from scientists for releasing incomplete data from a trial being conducted by the U.S. National Institutes of Health (NIH). On May 18, Moderna announced that its vaccine candidate had produced protective antibodies in a small subset of healthy trial volunteers. The news pushed Moderna stock up 20% to its peak of $80.

Some scientists suggested Moderna should have held off publishing until it had all test subjects’ results. “This was science by press release,” said Paul Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia. Without complete data, he said, “you’re left to read the tea leaves.”

Dr. Anthony Fauci – the nation’s top infectious disease expert – shared the test results with U.S. governors, Vice President Mike Pence said in a Twitter post the day of Moderna’s announcement. But Fauci – who is running the Moderna trial – later said he didn’t like the company’s early release of incomplete data, according to an interview published by the STAT health news service. A spokeswoman for Fauci’s agency, the National Institute of Allergy and Infectious Diseases, did not comment beyond what Fauci said in the interview.

Bancel told investors at a June conference that Moderna’s leadership worried the information had been seen by too many people, including at the NIH. He said the company made the partial findings public because it worried the data would get leaked – and it considered the incomplete results material information that all investors should receive at the same time. A company spokesman told Reuters the company believed it needed to release the information to comply with Securities and Exchange Commission rules.

The day after the May 18 announcement, Zaks sold 125,000 shares – netting him nearly $10 million – at a price of $78, up from $66 on the Friday before the Monday press release. Company filings show the sale was executed in accordance with the plan that Zaks put in place on March 13.

Reporting by Tom Bergin and Robin Respaut; Editing by Tom Lasseter and Brian Thevenot

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Brandon must roll back reopening: Liberals – Winnipeg Free Press

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Manitoba Liberal Leader Dougald Lamont says the public must receive more detailed information about COVID-19 cases in Manitoba. (The Canadian Press files)

Manitoba Liberal Leader Dougald Lamont said the province needs to dial back its reopening strategy in Brandon, which has a cluster of 40 COVID-19 cases, with about half involving workers at the Maple Leaf pork plant.

Currently, Manitoba is in Phase Four of its reopening strategy, which allows for more people to sit in bars and restaurants as long as they can maintain a two-metre distance, and a greater number of people can gather at indoor and outdoor events, for example. There is no mask mandate in the province, but people are advised to wear one in crowded indoor places.

Lamont said Brandon should revert to earlier stages of the phased-in reopening plan because he worries there is a risk of greater community transmission.

On Sunday, chief provincial public health officer Dr. Brent Roussin said a small number of the cases in Brandon may have been transmitted in the community, but most involve people who are close contacts of each other.

Eighteen workers at the Maple Leaf Foods plant in Brandon have tested positive for COVID-19. (Tim Smith / Brandon Sun files)

Eighteen workers at the Maple Leaf Foods plant in Brandon have tested positive for COVID-19. (Tim Smith / Brandon Sun files)

A second cluster is located in the Steinbach area.

Lamont said the government should be willing to roll back the reopening plan in any COVID-19 hot spot in the province, instead of sticking to one plan for such a large geographic area.

He also said the government’s pandemic communications strategy creates confusion and does a disservice to the public when information about outbreaks is not specific. For example, Roussin won’t specifically say the Maple Leaf plant is involved. Instead, he refers to a business in Brandon.

The government argues it doesn’t want to stigmatize groups of people. It refused to be specific even after the media had reported that the outbreak is at the meat plant.

Lamont said safety must be the “paramount concern.”

“People fill in what they don’t know with rumours and speculation,” he said.

Lamont said many of the workers at the Brandon meat plant come from foreign countries such as Mexico and the Philippines, live together in close quarters and cannot self-isolate. He suggested the City of Brandon should look at setting up an isolation centre to help contain the spread of the virus.

 

He said the Tory government all but declared the pandemic over in Manitoba by encouraging people to travel and businesses to reopen quickly. He pointed out that people don’t know where to travel if they are not specifically told by the government where an outbreak is occurring, other than in specific health regions, which are vast places.

On Sunday, Roussin did say changes would be made this week in terms of information posted on the provincial COVID-19 website. Data will be broken down by health districts within each health authority. Currently they are listed under one of the five authorities.

“This will allow us to break down case numbers in more detail while continuing to ensure the privacy of Manitobans,” he said.

 

 

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PMH tallies 32 new COVID cases over the weekend – Brandon Sun

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RUTH BONNEVILLE

Manitoba’s chief provincial health officer, Dr. Brent Roussin, holds a press conference at the Legislative Building on Friday. Roussin hosted a weekend press conference for the first time in a while on Sunday. (RUTH BONNEVILLE / WINNIPEG FREE PRESS)

The province reported 51 new COVID-19 cases in Manitoba over the weekend—16 on Saturday and 35 on Sunday—including a total of 32 in the Prairie Mountain Health region.

The 35 new overall cases revealed on Sunday marks the second-highest one-day jump since the start of the pandemic.

Of the 20 new PMH cases announced on Sunday, Dr. Brent Roussin, the province’s chief public health officer, announced in a rare weekend news conference that at least seven of these cases are connected to a single business in Brandon.

Although Roussin mentioned that the seven affected individuals are self-isolating, and that there was no evidence of workplace transmission, he would not name the specific business in question when asked.

However, this announcement follows a week where at least 10 workers from the Maple Leaf Foods pork processing plant in Brandon have tested positive for the virus.

And as of Sunday evening, UFCW Local 832 president Jeff Traeger told the Sun that eight additional positive cases of COVID-19 were discovered at Maple Leaf Brandon over the weekend, bringing their total amount of known cases up to 18.

“These new cases strengthen our call on Maple Leaf Brandon to close for a one-week period until all test results are in, and the situation is under control,” Traeger wrote in this email. 

Over the weekend, several other businesses in the Wheat City closed their doors or significantly reduced their services due to concerns that one of their workers might have contracted COVID-19. This includes Marino’s Pizza, the McDonald’s restaurant on Victoria Avenue and the Shoppers Drug Mart also located on Victoria.

Employees from a local Walmart and a Tim Hortons restaurant on Highway 1 also tested positive for COVID-19 last week, prompting the latter establishment to shut down so it can be thoroughly sanitized.

In general, Roussin said on Sunday that this growing cluster in Brandon was approaching and may have exceeded 40 people.

Otherwise, this batch of new cases over the weekend brings Manitoba’s total number of lab-confirmed positive and probable positive cases up to 542.

Sunday’s COVID-19 data also shows that six people are currently hospitalized, with three individuals being in intensive care.

Overall, the province is now contending with 182 active cases in Manitoba, with 352 individuals having recovered from the virus.

Manitoba’s COVID-19 related death rate remains at eight.

While Roussin admits that the recent spike in new cases is discouraging, he implores Manitoba to remain vigilant and stick to the essentials of good social distancing: vigorous hand-washing, avoiding crowded indoor spaces and staying at home if you feel ill.

“Our concern has never gone away,” he said. “We’ve had to find ways to continue to articulate to Manitobans that we have to be careful. And certainly, as we see these numbers go up, we’re going to increase that messaging.”

An additional 756 laboratory tests were completed on Saturday, bringing the total number of tests completed since early February to 100,830.

» kdarbyson@brandonsun.com

» Twitter: @KyleDarbyson

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Manitoba sees 35 new cases of coronavirus Sunday – Winnipeg – Global News

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The province’s top doctor confirmed 35 new cases of COVID-19 in Manitoba Sunday.

Dr. Brent Roussin held the rare Sunday press conference amid a recent spike in COVID-19 cases in Manitoba, including 16 new infections on Saturday.

While many of Sunday’s cases appear linked to known clusters in the Southern Health health region and the city of Brandon or are close contacts of a previously announced case, the province said in its COVID-19 update, there may be a small number of cases of unknown acquisition in those areas.

However, public health officials are still investigating where those cases were contracted.

A total of 542 people have contracted the novel coronavirus in Manitoba. Six people are in hospital — three of them in intensive care. Of the 542 infections, 182 cases are still active, while 352 people have recovered. Eight people have died.

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16 new cases of COVID-19 reported in Manitoba Saturday

The latest data show 20 of the new cases are in the Prairie Mountain Health region, 10 are in the Southern Health, four are in the Winnipeg health region and one is in the Interlake-Eastern health region.

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The current five-day COVID-19 test positivity rate is 1.45 per cent.

Many of the recent cases, including the majority of Saturday’s new infections, are connected to a cluster in Brandon — as of Friday, 34 people have been infected in the city.

Roussin could not provide the exact number of cases linked to the Brandon cluster, but said it is approaching 40 or may have exceeded it.

Those cases are all linked to one person who returned to Brandon from eastern Canada and did not properly self isolate.

The western Manitoba city’s Maple Leaf Foods plant has seen at least 10 workers infected with the virus, but Roussin and the company say the employees were not infected at work.

Seven of the new cases are workers at a business in Brandon, but Roussin would not expand when asked which business.

However, the union that represents workers at the pork plant, United Food and Commercial Workers Local 832, said eight more employees have tested positive for COVID-19 — bringing the total to 18.

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A McDonald’s restaurant in Brandon closed its doors Saturday after an employee tested positive for the virus — the employee had last worked at the 2626 Victoria Avenue location on Friday from 6 a.m. to 2 p.m., McDonald’s Canada said in a statement.

Another restaurant also closed Sunday after a Marino’s Pizza employee was exposed to a person who has since tested positive, but the restaurant employee does not have the virus.

© 2020 Global News, a division of Corus Entertainment Inc.

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