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Moderna executives cashing in on COVID-19 vaccine stock speculation – The Globe and Mail



A sign marks the headquarters of Moderna Inc, which is developing a vaccine against COVID-19, in Cambridge, Mass. on May 18, 2020.

Brian Snyder/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.

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 (£17 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.

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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 signalled 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.

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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.

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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 front-runner 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.


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

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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.

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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.

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Manitoba processing plant with COVID-19 should learn from Alberta facilities and shut down, union leaders urge –



Union leaders who witnessed a devastating COVID-19 outbreak at meat-packing facilities in Alberta are calling on a Brandon, Man., plant to shut down before its four cases of the novel coronavirus become many more.

There’s no time to waste, said Alexander Shevalier, president of the Calgary and District Labour Council.

He’s speaking from experience: In Alberta, 900 plus employees at a Cargill meat-packing plant tested positive for the virus and two died, while 600 employees were infected at a JBS plant.

“How many infections before the company takes it seriously? How many infections before the Manitoba government takes this seriously? Is it 10? Is it 100? Is it 1,000?” Shevalier asked.

“I would suggest that at four [cases] they can get a handle on it quite easily, and I would suggest at four it should prompt some sort of trigger testing to make sure that this is dealt with.”

In Brandon, United Food and Commercial Workers Local 832, which represents 2,000 employees at the processor, are calling on the company to temporarily cease production until at least Aug. 10, after four employees contracted the virus.

Outbreak rampant at Alberta meat processors

The union is asking to suspend operations until more information is known about the 60 outstanding tests among workers.

Their concerns are heightened by what happened at slaughterhouses to the west of them.

It took weeks for Cargill to succumb to pressure and close its plant near High River, Alta., but it was already well on its way to becoming the largest outbreak tied to a single facility in North America.

Only days before the plant was temporarily shuttered on Apr. 20, a provincial inspection by video concluded the plant could keep operating, while politicians held a telephone town hall to assure staff that their workplace was safe.

Several workers accused their employer of disregarding physical distancing rules and trying to lure people back to work from self-isolation.

Cargill, an Alberta meat-packing plant, reopened in May after more than 900 employees contracted COVID-19. (Jeff McIntosh/The Canadian Press)

But meat-packing outbreaks aren’t exclusive to Alberta. Across the continent, these businesses have emerged as dangerous hot spots for COVID-19, linked partially to employees’ inability to stay apart while standing shoulder to shoulder on the processing line.

Shevalier urged officials in Manitoba to act before it’s too late.

“It’s better if you get a handle on the outbreak early, so that you don’t have to close a plant for two weeks and create a lot of anxiety in the community.”

Although four employees at the Brandon plant are confirmed COVID-19 cases, Manitoba’s top doctor said Thursday there’s no evidence the virus has spread within the plant. 

“If we see evidence of transmission within a facility, [that] would be concerning to us,” Dr. Brent Roussin said.

Maple Leaf said it is reviewing the four cases while each of the employees recovers at home. The company does not plan to cease production in the meantime.

“We will continue to operate our Brandon plant as long as we believe we can provide an environment that will protect the safety of our people while working,” the statement says. 

One worker, who wasn’t on the production line, tested positive late last week and the three cases from Wednesday aren’t involved in production, UFCW Local 832 said.

Though the case numbers are low, it doesn’t allay the fears of Thomas Hesse, the union head representing workers at the Cargill plant in southern Alberta.

Union members in High River, Alta., protested the reopening of the Cargill meat-packing plant in May after a COVID-19 outbreak. (Dan McGarvey/CBC)

“The Cargill circumstance also started with a handful of employees and early on, it was hard to sort out what the origin of the outbreak was and what its connection was to the community,” said the president of UFCW Local 401, which is embroiled in a legal fight stemming from the union’s efforts to prevent the plant from reopening.

From what he’s heard from his counterparts in Manitoba, Maple Leaf worked diligently to acquire personal protective equipment, stagger breaks for workers and mandate temperature checks.

The company’s efforts should be applauded, Hesse said, but now, “Maple Leaf is at an intersection.” The right call is to shut down the plant temporarily, he said.

Experts are studying how meat-packing facilities became virus incubators. It’s believed the proximity of employees have played a role, and maybe the ventilation systems designed to control odours and prevent meat from spoiling.

“We’re seeing outbreaks related to a very specific industry. We should look hard at those and learn from industries where we don’t see outbreaks,” said Cynthia Carr, a Winnipeg epidemiologist and founder of EPI Research Inc.

Hesse said he doesn’t want another community to go through what happened at Cargill.

He’s spoken to families who’ve lost a loved one because they went to work. He knows of workers, who didn’t exhibit symptoms, living with the guilt they spread the disease to someone else. He’s talked with a young mother who was forced to isolate in her garage, while her kids cried inside her house.

His message to Maple Leaf: “When you see a lot of [COVID-19 case] numbers, you’ve got to step back and you’ve got to do the right thing.”

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Union wants production halt at Manitoba Maple Leaf plant over COVID-19 cases – Preeceville Progress



BRANDON, Man. — Manitoba’s largest increase in positive COVID-19 cases in months has prompted a union representing employees at Maple Leaf Food Inc.’s pork processing plant in Brandon to call for it to cease production.

Thirty new cases were announced Thursday in the province, 18 of which are connected to a cluster in Brandon.

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The cluster includes four workers who tested positive at the pork plant.

There are 34 active cases in the Prairie Mountain Health Region, which includes the city about 200 kilometres west of Winnipeg.

“Today’s case number is a reminder that COVID-19 is not done with us, that we still need to take those fundamental precautions,” said Dr. Brent Roussin, the chief provincial public health officer.

Roussin said there was no indication of workplace spread at Maple Leaf.

He said the Brandon cluster is linked to a person who travelled from Eastern Canada and didn’t self isolate “perfectly” upon arrival in Manitoba.

While Roussin would not confirm where the traveller came from the province cautioned about possible exposure on a Montreal to Winnipeg flight on July 29.

Until Thursday, there had not been a major single-day increase in the province since 40 cases were announced on April 2.

Jeff Traeger, president of United Food and Commercial Workers Local 832, said in a memo Thursday that the union wants the company to stop work at the Brandon plant until Aug. 10 at the earliest.

“Until we have more results from the outstanding tests among our members at Maple Leaf,” Traeger said.

One worker at the plant tested positive over the weekend and the union said three new cases Wednesday are non-production staff.

The union represents nearly 2,000 people at the pork plant.

Meat-processing plants were the epicentre of some of the largest COVID-19 outbreaks in Canada outside of care homes. Hundreds of people tested positive during outbreaks at two southern Alberta beef-processing plants this spring.

There were three deaths linked to the Cargill plant in High River, Alta. It shut down for two weeks before reopening at reduced capacity. The JBS Canada plant in Brooks, Alta., operated with just a single shift each day for a full month.

Maple Leaf said in an email that a response plan was immediately implemented following the positive tests at the Brandon facility. The company said it appears likely the employees contracted COVID-19 in the community.

However, several employees were asked to self-quarantine.

All employees are given a daily health screening and have their temperatures monitored, the company said. Employees are also supplied personal protective equipment and are required to social distance.

“We will continue to operate our Brandon plant as long as we believe we can provide an environment that will protect the safety of our people while working,” the email from Maple Leaf said.

COVID-19 cases in Manitoba had remained relatively low, with a current total of 474, but there has recently been an increase in infections.

Health Minister Cameron Friesen said the union had sent him a letter requesting the government conduct a full health inspection of the Brandon plant. He said it will be left to public health experts to make determinations about safety.

“We are not there in this case yet.”

This report by The Canadian Press was first published Aug. 6, 2020

— By Kelly Geraldine Malone in Winnipeg

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Opposition leaders back call to shut down Brandon Maple Leaf plant after 4 COVID-19 cases –



The leaders of Manitoba’s opposition parties are backing a union’s call to shut down the Maple Leaf Foods plant in Brandon, Man., after four cases of COVID-19 involving workers at the plant.

“We want them to shut the plant down,” Jeff Traeger, president of United Food and Commercial Workers Local 832, told CBC News on Thursday morning. 

The union said in a memo to workers early Thursday that three more cases had been identified among non-production unionized employees at the pork processing facility.

That came after one other worker in the plant tested positive for COVID-19, which prompted more than 70 employees who may have been exposed to go into self-isolation.

The first worker who tested positive, who also wasn’t on the production line, hasn’t been at work since July 28, the union said Wednesday.

The UFCW was alerted about the three new cases around 10 p.m. on Wednesday, Traeger said. Now the union, which represents nearly 2,000 workers at the plant, wants Maple Leaf to stop production until at least Aug. 10, until more information is known about any of the 60 outstanding tests among workers.

“We’re looking for Maple Leaf to shut the plant down until all of those test results come back, have a proper deep-cleaning of the plant done, make sure people have time to self-isolate and then start up production again after … they can say with confidence that they have it under control,” Traeger said.

Later Thursday, the leader of Manitoba’s Opposition NDP backed that call.

“[If] the union is saying there’s an issue and we have to hit the pause button, then we support that,” Wab Kinew told reporters during a scrum at the Manitoba Legislature. 

“This isn’t necessarily just about the workers in the plant, as important as they are,” said Kinew. “If the situation there gets worse, it could potentially pose a threat to the broader community.”

Opposition NDP Leader Wab Kinew believes the Maple Leaf processing plant in Brandon, Man,. should be shut down temporarily. (Ron Boileau/CBC)

Manitoba Liberal Leader Dougald Lamont, who also spoke with reporters Thursday, said because meat processing plants have been hot spots for COVID-19 outbreaks elsewhere in North America, the situation in Brandon cannot be taken lightly.

“It’s something that their union has recommended. It should be shut down temporarily because there needs to be a full screen of all the employees done,” said Lamont.

CBC News asked Maple Leaf for an interview, but the company instead sent an emailed statement saying it plans to keep the plant open for now.

“After a careful and detailed review of the circumstances around the cases, it appears very likely that the [employees] contracted COVID-19 in the community,” the company said in a Thursday morning statement.

“We feel confident that our plant environment is safe,” Maple Leaf’s statement said, citing measures such as daily health screening, temperature monitoring and use of personal protective equipment by employees.

Maple Leaf has notified the Canadian Food Inspection Agency, the union and its employees of the positive tests, the statement said.

Despite the plea from the UFCW, Maple Leaf says it will not be closing its plant in Brandon. (CBC)

The first worker at the plant who tested positive passed the medical screening on July 28 before starting work that day, but started feeling sick during the day, UFCW said.

The latest three employees to test positive all work in the same department as each other, but not the same department as the first case, Traeger said.

Maple Leaf says all four employees are recovering at home.

Parts of the plant were deep-cleaned over the long weekend.

One other employee, a security guard at the plant, tested positive for COVID-19 in May.

‘Enormous effort’

Health Minister Cameron Friesen wouldn’t comment on the Maple Leaf cases during a COVID-19 briefing on Thursday, but did say Maple Leaf and many other businesses have been working hard to implement COVID-19 precautions.

“We have employers and workplaces across this province who have put enormous effort into getting this right, into keeping their employees and keeping the public safe,” Friesen said.

“[Maple Leaf] is one of those who has been making incredible efforts to partition, to sequester staff, to be able to know where they’re coming in or where they’re going out in order to be able to respond.”

Health Minister Cameron Friesen would not speak to the Maple Leaf cases, but said a plant shut down won’t happen unless public health officials recommend doing so. (Ron Boileau/CBC)

Traeger’s biggest concern is having an outbreak like those at meat processing plants elsewhere in Canada earlier in the pandemic.

Three Alberta plants — the JBS plant in Brooks, the Harmony Beef plant in Balzac and the Cargill plant in High River — all saw positive cases.

“The nature of the type of work these people do is shoulder to shoulder,” Traeger said. “Once the virus gets into a plant like this, it quite easily spreads, and that’s what we’re worried about.”

In April, the Manitoba Liberals sent letters to the provincial government asking for a plan to prevent COVID-19 outbreaks at meat processing plants, Lamont said Thursday.

“We haven’t seen a plan,” he said.

Chief Provincial Public Health Officer Dr. Brent Roussin, who also wouldn’t comment directly on the Maple Leaf cases, said public health officials here are working with people in the meat processing industry because of the outbreaks elsewhere.

“Something that we would look very carefully for is if we see evidence of transmission within a facility. [That] would be concerning to us,” said Roussin.

Health officials haven’t seen evidence of transmission within the plant so far, he noted.

Health officials haven’t seen evidence of transmission within the Maple Leaf plant so far, which is a good thing, said Roussin. (John Woods/The Canadian Press)

When asked if the province will order the plant to be shut down, Friesen said action will be taken based on advice from public health officials.

That response didn’t satisfy the NDP leader.

“It’s a convenient degree of separation for the elected officials in the Pallister government to say they’re just following public health advice,” said Kinew.

“In this instance, I think that it’s pretty clear that the government should take much more decisive action to address the situation in Brandon.”

Brandon Walmart, Tim Hortons employees test positive

Elsewhere in Brandon, the Tim Hortons location on Middleton Avenue temporarily closed its doors after an employee tested positive for COVID-19, the company said in an emailed statement Thursday afternoon.

The employee last worked at the coffee shop on Aug. 2, and tested positive on Aug. 5.

Employees who worked closely with the positive case are now self-isolating for 14 days. All of the employees will be compensated for lost wages, the company said, and the restaurant will remain closed until it can be sanitized and a separate crew of employees can be brought in.

Meanwhile, Walmart said an employee at its Brandon store recently tested positive for COVID-19 as well. The person last worked in the store on July 26, a spokesperson for the company said.

The store is still open, but the spokesperson said it is taking measures including increased cleaning, wellness checks for all employees, and limiting the number of customers in the store at one time.

The three additional cases are among non-production unionized employees at the Brandon pork processing facility. 2:01

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