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The top five executives at the biotech company Moderna have sold more than $89 million of stock so far this year — initiating nearly three times as many stock transactions than in all of 2019 — as the company’s share price has soared on hopes for its Covid-19 vaccine.

The trades, which led to about $80 million in profits, were prescheduled through a legal program that allows company insiders to buy and sell shares at a later date.

But the volume and timing might prove alarming to Moderna’s shareholders, especially in light of the company’s May decision to raise more than $1 billion in a stock offering. If Moderna’s early-stage vaccine can one day prevent coronavirus infection and the company’s best days lay ahead, why are insiders selling?


Jay Clayton, the chairman of the Securities and Exchange Commission, has cautioned companies against selling stock during the coronavirus pandemic, which has led to market volatility and inflated the valuations of biotech companies like Moderna. There may be “idiosyncratic circumstances” that might lead executives to sell shares during the crisis, Clayton said on CNBC last week, but doing so risks an optical nightmare.

“We’ve said for a long time in this volatile time, please practice good corporate hygiene,” he said. “… Why would you want to even raise the question that you were doing something that was inappropriate?”


Moderna did not respond to a request for comment. CNN reported on sale of stock by two of the executives last week.

Damian Garde/STAT Source: Nasdaq, Securities and Exchange Commission

The idea behind programmed trades, initiated under an SEC rule called 10b5-1, is to allow executives to diversify their holdings. Leaders of public companies often have most of their wealth tied up in stock. Selling shares under 10b5-1 plans allows them to get some liquidity. And for a company like Moderna, whose valuation hinges on the unpredictable process of drug development, selling some stock is probably a prudent financial decision, said Thomas Lys, a professor of accounting at Northwestern University’s Kellogg School of Management.

“There’s always that other possibility — that these guys really know this whole thing is bogus and they’re selling while the selling is good,” Lys said. “But you can’t tell from the data which one it is, and they certainly have plausible deniability.”

Tal Zaks, Moderna’s chief medical officer, began the year with nearly 100,000 shares of the company. In late February, days before Moderna announced that its coronavirus vaccine was ready for human testing, he began dumping 10,000 shares a week. Over the next 11 weeks, as the pandemic pushed Moderna’s share price from $18 to $50, Zaks liquidated his entire position, making $3.4 million in the process. Once he ran out of stock, he began exercising options priced at $12.21 per share. Over the next two weeks, he sold more than 250,000 more Moderna shares at an average price of $67. Zaks profited more than $18 million from his 2020 trades. He currently holds zero shares of Moderna stock.

Juan Andres, Moderna’s chief technical officer, employed a similar plan. Beginning on Feb. 27, when Moderna’s share price was around $34, he executed weekly trades in which he exercised options and immediately sold stock. Over the course of 10 transactions, he sold more than $12 million worth of shares for a profit of roughly $9.3 million. As of his most recent trade, when Moderna was worth $67, Andres holds no shares of the company.

Other Moderna executives still have sizable stakes in the company. Chief Financial Officer Lorence Kim, who made about $37 million selling stock in 2020, retains about 1.2 million shares. Moderna President Stephen Hoge, who has sold $2.4 million in stock this year, holds more than 2 million shares. Stéphane Bancel, Moderna’s CEO, sold more than 400,000 shares for a $13.6 million profit, but that represents a minute fraction of his roughly 9% stake in the company, which puts his personal net worth at more than $1 billion.

To Nejat Seyhun, a professor of finance at the University of Michigan’s Ross School of Business, the Moderna trades “do not represent a worrisome trend.” The majority of the sales were at prices below Moderna’s current value, suggesting the executives were more concerned with liquidity than profit, Seyhun said. And each transaction was done through a 10b5-1 plan, meaning the executives weren’t trading on inside information.

But a closer look at 10b5-1 trades offers some cause for alarm about the practice in general. A 2006 study from Stanford University analyzed more than 3,000 planned insider trades and found that executives’ stock sales reliably came just before bad news and right after good, maximizing returns and minimizing losses. A 2012 study from Harvard University looked at two decades of irregularly timed trades — subtracting the ones pegged to the calendar — and found a similarly concerning result. Those transactions beat the market by as much as 25% each year, researchers found, suggesting insiders have a demonstrable edge over outside investors.

“Unfortunately we will never be able to separate liquidity trades from information-based trades, because we cannot easily look into the mind of the insider,” said Andrew Lo, a professor of finance at the Massachusetts Institute of Technology Sloan School of Management. “That’s part of the challenge of these 10b5-1 sales: There is no right answer for all circumstances. And that’s one of the reasons we have the SEC.”

  • The SEC lawyer also stated that the SEC could freeze or delist the stock while it’s investigated. He stated that since February the SEC has delisted 33 companies already for pumping it’s stock with fake Coronavirus vaccine / treatment news.

  • A former SEC lawyer on CNBC stated the SEC would likely be investigating the timing of the insider trades, news release and sudden offering on the stock pump.

    Sure, some of the stock sales were preplanned sales. But Moderna insiders specifically chose to release the news to coincide which obviously would have raised it’s stock price. Not only that, they were in possession of material information (4 subjects had severe adverse reactions) which they withheld. Furthermore the options exercised and then sold immediately were not preplanned and were done after the stock was pumped. This whole debacle doesn’t pass the stress test.

    Then let’s not forget this company has been around for years, has never had a successful product, never made any money off a product and has many similarities to Theranos. Nobody is allowed to look at its miraculous mRNA “technology” and has never been published in any scientific journal. But it’s CEO sure likes to go on CNBC, Bloomberg and CNN to pump the stock non-stop.

  • What STAT is hiding from its readers is that Moderna is very high tech and is developing a host of vaccine candidates for several diseases with its technology. Its not all about covid vaccine . Success could bring huge future profits.

  • There’s a special place in HELL for everyone that works at STAT FAKE NEWS MEDIA!! Stop you’re bullshit, let me guess your all a bunch of no-good Dems!

  • Moderna is a scam. The execs there has been fraudulent their whole careers. Just need to review their history. They pumped data on 8 patients when they could’ve waited only 2 weeks to report on all 45. I hope their vaccine succeeds but hard to put trust in hucksters

  • Hi STAT. With due respect, you need to understand that insider trading happen all the times. Compared to millions of shares these exec have, they sold only a fraction of them. You need to report that also along with this sale. It doesn’t like a fair news from an outlet. It is a trivial thing.

    • This is actually a very good and enlightening article into the nature of this scam, doubt you’ll find it on CNN, MSNBC or CNBC. Well done STAT.
      Do not take the vaccine!

  • I understand your intentions. However, your writing is objective and cannot be read maliciously. The more you keep writing this, the more people with stocks lose.

    • It’s not objective writing in the context of all the publications from statnews regarding moderna. And it’s not objective without providing statistics across all moderna insiders with shares sold how when and how many remaining, how many options they hold and can execute in the future. It’s not objective, unless full data is provided, it’s cherrypicking. And before you say it, moderna did not cherry pick 8/45, 8 are sentinel participants injected before everyone else. They’ve said it during web call and it’s stated on trial design page on niaid.

  • You disgust me stat news. You’ve lost your plausible deniability that you are a medical reporting journal or whatever. Yesterday you’ve used “severe reaction” in the headline as an FDA defined word I assume, and now you report on stock market and company insider sales, and cherry picking the ones that sold the most. It’s a young company that went public just 1.5 years ago. Vaccine are not 100% sure thing as you know, and they don’t know the final result and neither do you. Also NIAID is doing the study not them and 8 out 45 were reported because they were the sentinel group, niaid study page says as much.

    You disgust me stat news.

    • Working with the NIAID and Dr. Fauci (who from what I understand is not directly involved with anything other than what he is told by the CEO) are classic appeals to authority.

      If people can recall, Elizabeth Holmes, the now criminally-indicted fraudster CEO of Theranos, which was a scam from day 1 promising to detect hundreds of diseases with a single drop of blood, filled her board of directors with impeccable pedigreed people of authority,

      How Elizabeth Holmes convinced powerful men like Henry Kissinger, James Mattis, and George Shultz to sit on the board of now disgraced blood-testing startup Theranos
      Lydia Ramsey Mar 19, 2019, 9:44 AM

      Henry Kissinger
      Former Secretary of State Henry Kissinger was a member of Theranos’ board. REUTERS/Lucas Jackson
      Theranos at one point had a star-studded board of directors, including military leaders and former secretaries of state.
      In HBO’s “The Inventor: Out for Blood in Silicon Valley,” director Alex Gibney spoke with reporters who wrote the first major profiles of the now disgraced blood-testing company in 2014.
      The reporters spoke with Theranos’ board members, who explained why they were backing Theranos founder Elizabeth Holmes.
      “The Inventor” is available on HBO now.

      Theranos founder Elizabeth Holmes had a knack for getting powerful people on her side.

      Garnering attention from politicians and celebrities, Holmes created a blood-testing company over the course of a little more than a decade that was worth $9 billion on its promise to test for a number of conditions using just a small sample of blood.

      Nowhere was her draw more apparent than in the board she had assembled by 2015.

      At that point, the company was flying high: In July 2015, the Food and Drug Administration approved one of the company’s blood tests, leading to a party at headquarters and excitement about the company’s future. But in October, questions started being raised about how the company’s technology worked, prompted by investigative stories from The Wall Street Journal reporter John Carreyrou. The company had begun its long fall from grace.

      Theranos has since shut down, with Holmes and Sunny Balwani, the company’s former president, facing criminal charges of wire fraud. Balwani’s lawyer, Jeffrey Coopersmith, said in a June statement that Balwani had committed no crimes. The two have pleaded not guilty.

      Read more: The Stanford professor who rejected one of Elizabeth Holmes’ early ideas explains what it was like to watch the rise and fall of Theranos

      Holmes’ board going into the scandal included an unusual roster of names for a healthcare startup, with leaders who had more experience in politics and government than healthcare.

      The list included:

      George Shultz, former US secretary of state

      Gary Roughead, a retired US Navy admiral

      William Perry, former US secretary of defense

      Sam Nunn, a former US senator

      James Mattis, a retired US Marine Corps general who went on to serve as President Donald Trump’s secretary of defense

      Richard Kovacevich, the former CEO of Wells Fargo

      Henry Kissinger, former US secretary of state

      William Frist, a heart and lung transplant surgeon and former US senator

      William H. Foege, former director of the Centers for Disease Control and Prevention

      Riley P. Bechtel, chairman of the board of the Bechtel Group Inc. at the time.

      Moderna appears to be taking a page out of Theranos’ playbook. Elizabeth Holmes had no scientific education and was obsessed with secrecy to how her magic blood testing machine worked, just like Modernas CEO Bancem has no formal scientific education (he’s a Harvard MBA salesman) and he is obsessed with secrecy, keeping everything surrounding his companies magical mRNA technology secret out of public scrutiny.

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