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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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Health Canada approves updated Moderna COVID-19 vaccine

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TORONTO – Health Canada has authorized Moderna’s updated COVID-19 vaccine that protects against currently circulating variants of the virus.

The mRNA vaccine, called Spikevax, has been reformulated to target the KP.2 subvariant of Omicron.

It will replace the previous version of the vaccine that was released a year ago, which targeted the XBB.1.5 subvariant of Omicron.

Health Canada recently asked provinces and territories to get rid of their older COVID-19 vaccines to ensure the most current vaccine will be used during this fall’s respiratory virus season.

Health Canada is also reviewing two other updated COVID-19 vaccines but has not yet authorized them.

They are Pfizer’s Comirnaty, which is also an mRNA vaccine, as well as Novavax’s protein-based vaccine.

This report by The Canadian Press was first published Sept. 17, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

The Canadian Press. All rights reserved.

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These people say they got listeria after drinking recalled plant-based milks

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TORONTO – Sanniah Jabeen holds a sonogram of the unborn baby she lost after contracting listeria last December. Beneath, it says “love at first sight.”

Jabeen says she believes she and her baby were poisoned by a listeria outbreak linked to some plant-based milks and wants answers. An investigation continues into the recall declared July 8 of several Silk and Great Value plant-based beverages.

“I don’t even have the words. I’m still processing that,” Jabeen says of her loss. She was 18 weeks pregnant when she went into preterm labour.

The first infection linked to the recall was traced back to August 2023. One year later on Aug. 12, 2024, the Public Health Agency of Canada said three people had died and 20 were infected.

The number of cases is likely much higher, says Lawrence Goodridge, Canada Research Chair in foodborne pathogen dynamics at the University of Guelph: “For every person known, generally speaking, there’s typically 20 to 25 or maybe 30 people that are unknown.”

The case count has remained unchanged over the last month, but the Public Health Agency of Canada says it won’t declare the outbreak over until early October because of listeria’s 70-day incubation period and the reporting delays that accompany it.

Danone Canada’s head of communications said in an email Wednesday that the company is still investigating the “root cause” of the outbreak, which has been linked to a production line at a Pickering, Ont., packaging facility.

Pregnant people, adults over 60, and those with weakened immune systems are most at risk of becoming sick with severe listeriosis. If the infection spreads to an unborn baby, Health Canada says it can cause miscarriage, stillbirth, premature birth or life-threatening illness in a newborn.

The Canadian Press spoke to 10 people, from the parents of a toddler to an 89-year-old senior, who say they became sick with listeria after drinking from cartons of plant-based milk stamped with the recalled product code. Here’s a look at some of their experiences.

Sanniah Jabeen, 32, Toronto

Jabeen says she regularly drank Silk oat and almond milk in smoothies while pregnant, and began vomiting seven times a day and shivering at night in December 2023. She had “the worst headache of (her) life” when she went to the emergency room on Dec. 15.

“I just wasn’t functioning like a normal human being,” Jabeen says.

Told she was dehydrated, Jabeen was given fluids and a blood test and sent home. Four days later, she returned to hospital.

“They told me that since you’re 18 weeks, there’s nothing you can do to save your baby,” says Jabeen, who moved to Toronto from Pakistan five years ago.

Jabeen later learned she had listeriosis and an autopsy revealed her baby was infected, too.

“It broke my heart to read that report because I was just imagining my baby drinking poisoned amniotic fluid inside of me. The womb is a place where your baby is supposed to be the safest,” Jabeen said.

Jabeen’s case is likely not included in PHAC’s count. Jabeen says she was called by Health Canada and asked what dairy and fresh produce she ate – foods more commonly associated with listeria – but not asked about plant-based beverages.

She’s pregnant again, and is due in several months. At first, she was scared to eat, not knowing what caused the infection during her last pregnancy.

“Ever since I learned about the almond, oat milk situation, I’ve been feeling a bit better knowing that it wasn’t something that I did. It was something else that caused it. It wasn’t my fault,” Jabeen said.

She’s since joined a proposed class action lawsuit launched by LPC Avocates against the manufacturers and sellers of Silk and Great Value plant-based beverages. The lawsuit has not yet been certified by a judge.

Natalie Grant and her seven year-old daughter, Bowmanville, Ont.

Natalie Grant says she was in a hospital waiting room when she saw a television news report about the recall. She wondered if the dark chocolate almond milk her daughter drank daily was contaminated.

She had brought the girl to hospital because she was vomiting every half hour, constantly on the toilet with diarrhea, and had severe pain in her abdomen.

“I’m definitely thinking that this is a pretty solid chance that she’s got listeria at this point because I knew she had all the symptoms,” Grant says of seeing the news report.

Once her daughter could hold fluids, they went home and Grant cross-checked the recalled product code – 7825 – with the one on her carton. They matched.

“I called the emerg and I said I’m pretty confident she’s been exposed,” Grant said. She was told to return to the hospital if her daughter’s symptoms worsened. An hour and a half later, her fever spiked, the vomiting returned, her face flushed and her energy plummeted.

Grant says they were sent to a hospital in Ajax, Ont. and stayed two weeks while her daughter received antibiotics four times a day until she was discharged July 23.

“Knowing that my little one was just so affected and how it affected us as a family alone, there’s a bitterness left behind,” Grant said. She’s also joined the proposed class action.

Thelma Feldman, 89, Toronto

Thelma Feldman says she regularly taught yoga to friends in her condo building before getting sickened by listeria on July 2. Now, she has a walker and her body aches. She has headaches and digestive problems.

“I’m kind of depressed,” she says.

“It’s caused me a lot of physical and emotional pain.”

Much of the early days of her illness are a blur. She knows she boarded an ambulance with profuse diarrhea on July 2 and spent five days at North York General Hospital. Afterwards, she remembers Health Canada officials entering her apartment and removing Silk almond milk from her fridge, and volunteers from a community organization giving her sponge baths.

“At my age, 89, I’m not a kid anymore and healing takes longer,” Feldman says.

“I don’t even feel like being with people. I just sit at home.”

Jasmine Jiles and three-year-old Max, Kahnawake Mohawk Territory, Que.

Jasmine Jiles says her three-year-old son Max came down with flu-like symptoms and cradled his ears in what she interpreted as a sign of pain, like the one pounding in her own head, around early July.

When Jiles heard about the recall soon after, she called Danone Canada, the plant-based milk manufacturer, to find out if their Silk coconut milk was in the contaminated batch. It was, she says.

“My son is very small, he’s very young, so I asked what we do in terms of overall monitoring and she said someone from the company would get in touch within 24 to 48 hours,” Jiles says from a First Nations reserve near Montreal.

“I never got a call back. I never got an email”

At home, her son’s fever broke after three days, but gas pains stuck with him, she says. It took a couple weeks for him to get back to normal.

“In hindsight, I should have taken him (to the hospital) but we just tried to see if we could nurse him at home because wait times are pretty extreme,” Jiles says, “and I don’t have child care at the moment.”

Joseph Desmond, 50, Sydney, N.S.

Joseph Desmond says he suffered a seizure and fell off his sofa on July 9. He went to the emergency room, where they ran an electroencephalogram (EEG) test, and then returned home. Within hours, he had a second seizure and went back to hospital.

His third seizure happened the next morning while walking to the nurse’s station.

In severe cases of listeriosis, bacteria can spread to the central nervous system and cause seizures, according to Health Canada.

“The last two months have really been a nightmare,” says Desmond, who has joined the proposed lawsuit.

When he returned home from the hospital, his daughter took a carton of Silk dark chocolate almond milk out of the fridge and asked if he had heard about the recall. By that point, Desmond says he was on his second two-litre carton after finishing the first in June.

“It was pretty scary. Terrifying. I honestly thought I was going to die.”

Cheryl McCombe, 63, Haliburton, Ont.

The morning after suffering a second episode of vomiting, feverish sweats and diarrhea in the middle of the night in early July, Cheryl McCombe scrolled through the news on her phone and came across the recall.

A few years earlier, McCombe says she started drinking plant-based milks because it seemed like a healthier choice to splash in her morning coffee. On June 30, she bought two cartons of Silk cashew almond milk.

“It was on the (recall) list. I thought, ‘Oh my God, I got listeria,’” McCombe says. She called her doctor’s office and visited an urgent care clinic hoping to get tested and confirm her suspicion, but she says, “I was basically shut down at the door.”

Public Health Ontario does not recommend listeria testing for infected individuals with mild symptoms unless they are at risk of developing severe illness, such as people who are immunocompromised, elderly, pregnant or newborn.

“No wonder they couldn’t connect the dots,” she adds, referencing that it took close to a year for public health officials to find the source of the outbreak.

“I am a woman in my 60s and sometimes these signs are of, you know, when you’re vomiting and things like that, it can be a sign in women of a bigger issue,” McCombe says. She was seeking confirmation that wasn’t the case.

Disappointed, with her stomach still feeling off, she says she decided to boost her gut health with probiotics. After a couple weeks she started to feel like herself.

But since then, McCombe says, “I’m back on Kawartha Dairy cream in my coffee.”

This report by The Canadian Press was first published Sept. 16, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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B.C. mayors seek ‘immediate action’ from federal government on mental health crisis

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VANCOUVER – Mayors and other leaders from several British Columbia communities say the provincial and federal governments need to take “immediate action” to tackle mental health and public safety issues that have reached crisis levels.

Vancouver Mayor Ken Sim says it’s become “abundantly clear” that mental health and addiction issues and public safety have caused crises that are “gripping” Vancouver, and he and other politicians, First Nations leaders and law enforcement officials are pleading for federal and provincial help.

In a letter to Prime Minister Justin Trudeau and Premier David Eby, mayors say there are “three critical fronts” that require action including “mandatory care” for people with severe mental health and addiction issues.

The letter says senior governments also need to bring in “meaningful bail reform” for repeat offenders, and the federal government must improve policing at Metro Vancouver ports to stop illicit drugs from coming in and stolen vehicles from being exported.

Sim says the “current system” has failed British Columbians, and the number of people dealing with severe mental health and addiction issues due to lack of proper care has “reached a critical point.”

Vancouver Police Chief Adam Palmer says repeat violent offenders are too often released on bail due to a “revolving door of justice,” and a new approach is needed to deal with mentally ill people who “pose a serious and immediate danger to themselves and others.”

This report by The Canadian Press was first published Sept. 16, 2024

The Canadian Press. All rights reserved.

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