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Moderna Therapeutics, a $5 billion startup that boasts of its potential to change the world, got some bad news on Thursday morning: It’s losing a key partner, imperiling its most advanced drug project and underlining questions as to whether Moderna can live up to the hype it has spent years inflating.

Alexion Pharmaceuticals, a magnate in the field of rare diseases, announced it has cut ties with Moderna, writing off a $100 million partnership cemented in 2014. The pair had joined forces to use Moderna’s daring, unproven technology to treat the rare and debilitating Crigler-Najjar syndrome, but their work repeatedly ran into safety issues and never made it into human trials.


In a statement, Moderna downplayed the implications of Alexion’s decision, saying it had “limited capacity and nascent capabilities” when first it partnered with the company and has since “acquired extensive knowledge” that will allow it to press on by itself. Moderna and Alexion declined to comment further.

Moderna’s stable of big-money partners goes well beyond Alexion. Merck, AstraZeneca, and Vertex are still working with the company. But losing Alexion deals a pointed blow to Moderna’s most ambitious — and potentially lucrative — promises.

The company’s foundational technology hinges on using custom-built strands of messenger RNA, or mRNA, to turn the body’s cells into deputized drug factories, producing the proteins needed to treat an array of diseases. Stéphane Bancel, Moderna’s charismatic and divisive CEO, has promised to craft hundreds of therapies with his company’s technology, touting its potential against cancer, rare diseases, and deadly viruses.


But that hasn’t worked out so far. Moderna’s attempts to make actual drugs from mRNA have been repeatedly hamstrung, proving either too weak or too dangerous to test in clinical trials, former employees and partners said. The company has instead prioritized vaccines, which can be dosed just once and thus avoid the safety problems that have plagued more ambitious projects.

But the market for vaccines has long been commoditized, meaning any new entrant, however revolutionary, is unlikely to reap the profits pocketed by companies in high-margin fields like rare diseases and oncology. That leaves Moderna, which touts its work as a game-changing advance for biotech, betting big on a loss-leader, former employees said.

Alexion’s decision comes weeks after investment giant Fidelity, one Moderna’s biggest backers, slashed its valuation of the fast-growing biotech, suggesting it’s worth about $3.3 billion rather than the $5 billion figure established by other investors.

At the same time, an escalating legal fight is threatening Moderna’s ability to ever make a dollar from its most advanced work. Moderna doesn’t own the technology key to making its mRNA vaccines work, and the company that does claims Moderna is using it illegally. A Canadian judge recently sided against Moderna, setting the stage for a trial this fall that could leave the company with no right to sell its most advanced products.

Each development has chipped away at Moderna’s self-perpetuated image of being biotech’s next big thing, but Bancel’s confidence has never wavered. In April, he told The Wall Street Journal that Moderna’s promise in vaccines was “proven” by a single, small trial. In June, Moderna Chairman Noubar Afeyan invoked Ayn Rand to endorse Bancel’s leadership and affirm the company’s potential in a congratulatory blog post.

As for Alexion, ditching Moderna is part of a large-scale pivot under new CEO Ludwig Hantson, who came aboard in March to clean house in turbulent times for the storied company. Moderna isn’t the the only partner getting left by the wayside: Blueprint Medicines and Arbutus Biopharma each partnered with Alexion in a multimillion-dollar deal, and each, like Moderna, is now on the outside looking in.

The common thread is Martin Mackay, Alexion’s former head of R&D, who left the company in May amid an executive exodus. Hantson, in his early tenure, had expressed displeasure with the company’s pipeline of new therapies, and quickly made that clear by shaking up the Alexion’s C-suite.