Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 2: I'm Tracy Alloway and I'm Joe.
Speaker 3: Why isn't thal Joe?
Speaker 2: Do you know much about MODERNA?
Speaker 4: Well, I had.
Speaker 3: Heard the name for maybe a few years, and then
Speaker 3: they became household name some point in twenty twenty when
Speaker 3: they were ahead of the race to develop a COVID vaccine.
Speaker 3: Then it became massive, and then I don't know much
Speaker 3: beyond that.
Speaker 2: Yeah, for me, this is a company that kind of
Speaker 2: came out of nowhere during the pandemic, and as you're right,
Speaker 2: it kind of shot into household name territory. Here's my
Speaker 2: other question. Do you know what a CFO does?
Speaker 5: What?
Speaker 3: That is a great question, actually, because I mean, I
Speaker 3: guess I would say yes in this sense that I
Speaker 3: think they're the ones who are sort of watching the financing,
Speaker 3: helping to make capital allocation decisions, although I imagine that
Speaker 3: the CEO also has that. I think the CFO is
Speaker 3: the one primarily involved in putting together the earnings and
Speaker 3: you know, communicating the finance side, specifically the analyst. But
Speaker 3: I guess I only partly know what a CFO does
Speaker 3: to me.
Speaker 2: The thing I always think when I hear CFO I
Speaker 2: always think they're the hard ones. Sorry, They're the ones
Speaker 2: that answer the hard questions on the on the earnings calls.
Speaker 2: That's what they do.
Speaker 4: I love that. I think that, yes, that's right.
Speaker 3: The CEO is like, oh, we get to these great
Speaker 3: products and blah blah. And then like someone asked a
Speaker 3: really technical question about like well if your borrow will
Speaker 3: get this above so far and margins and they're like,
Speaker 3: I'm going to bring the CFO in the answer this.
Speaker 2: Then yeah, exactly. Well, I'm pleased to say today we do,
Speaker 2: in fact have the perfect guest to answer the question
Speaker 2: of what is modern and also what does a CFO
Speaker 2: actually do. We are going to be speaking to the
Speaker 2: CFO of MODERNA, Jamie Mack. Jamie, thank you so much
Speaker 2: for coming on on thoughts.
Speaker 5: Hi, Tracy and Joe, thank you for having me. It's
Speaker 5: a pleasure to be here with you.
Speaker 2: So maybe just to begin, can you give us the
Speaker 2: sort of elevator pitch summary of what it is that
Speaker 2: MODERNA does and full disclosure, I was in Hong Kong
Speaker 2: for a few years of the pandemic, so I missed
Speaker 2: a lot of the vaccine conversation here in the US.
Speaker 2: There was a very different vaccine conversation that was happening
Speaker 2: in Hong Kong and in mainland China at the time.
Speaker 2: But what is it that you actually do and how
Speaker 2: is it that you have become a household name in
Speaker 2: a relatively few short years.
Speaker 5: Well sure, so, first I found your introduction quite entertaining.
Speaker 5: The CFO actually in our business because we are very
Speaker 5: much a science business, which I'll get into.
Speaker 4: It's actually our president and CEO.
Speaker 5: That get the really tough questions. But I get to
Speaker 5: my own share as well, which we can get into.
Speaker 3: But the CEO has to answer the tough biology questions.
Speaker 4: Well, he's quite good at it. He's he was part
Speaker 4: you employee number one and.
Speaker 5: Has been here and built this business for thirteen years
Speaker 5: so and he's got a science background, so he's quite
Speaker 5: good at it. And then our president, Stephen Hoague is
Speaker 5: a doctor by trade, so obviously they answered most of
Speaker 5: the scientific questions.
Speaker 4: But so Maderna is obviously known.
Speaker 5: Due to how we help the global community with COVID,
Speaker 5: but it's really much more than that. It is a
Speaker 5: platform company revolving around MR and a which really makes
Speaker 5: the proteins in a body, and those proteins can help
Speaker 5: either fight infectious diseases and prevent against any kind of
Speaker 5: infectious disease, or be a therapy, and we can get
Speaker 5: into the segments that we're in, but it can be
Speaker 5: in oncology, it can be a rare disease. And we
Speaker 5: actually believed, and that was the principal belief in the
Speaker 5: company is if this platform can work, it's going to
Speaker 5: be able. Since it's part of your natural body, it's
Speaker 5: going to be able to help solve many different therapeutic
Speaker 5: areas in the body.
Speaker 4: And so that's a little bit about Maderna.
Speaker 5: In over the last thirteen years, we've built a pipeline
Speaker 5: of forty five drug candidates. Obviously we're known for covid,
Speaker 5: but also in other respiratory diseases. We hope to launch
Speaker 5: our second drug this year, RSV, which became pretty well
Speaker 5: known last year as it had a pretty significant spike,
Speaker 5: but also in flu and other respiratory diseases. And then
Speaker 5: in oncology we've got an exciting cancer therapy that we
Speaker 5: are excited about rare diseases and other latent diseases. So
Speaker 5: that's a little bit about Maderna. We've been around since
Speaker 5: twenty eleven. We've got almost six thousand employees. We're based
Speaker 5: out of Cambridge, Massachusetts, but have.
Speaker 4: Some facilities all across the globe, and we've got quite
Speaker 4: an exciting pipeline ahead of us. That was excellent.
Speaker 3: All right, Now, what does the CFO or you specifically?
Speaker 3: What is your job within the company?
Speaker 5: So my CFO role is really not that different than
Speaker 5: many other CFOs. It's just you know, in a different space.
Speaker 5: And I think there's principally four different areas. One is
Speaker 5: the foundation, which is controllership, so that's accurate books and records.
Speaker 5: That's safeguarding our assets, and that's got to be foundational and.
Speaker 4: An absolute given.
Speaker 5: The second is allocating capital, and we can talk about
Speaker 5: that some more, but what is the envelope where we
Speaker 5: going to spend it? How much goes into our investment
Speaker 5: in our R and D pipeline, how much goes into capital.
Speaker 4: Expenditure and S G and A.
Speaker 5: The third is to support decision making across the company
Speaker 5: and train our teams to understand how to measure return
Speaker 5: on investment and how to think through decisions that are
Speaker 5: made every single day, thousands of decisions across the company
Speaker 5: every single day. And then the last is stakeholder management
Speaker 5: and with whether it's investors, employees, the board of directors, customers, partners, suppliers.
Speaker 4: You know.
Speaker 5: That's how I think about it, which really isn't too
Speaker 5: different from my prior role. Is it's a CFO of
Speaker 5: a different company or in my opinion, and many of
Speaker 5: the CFOs that are out there, how they operate every day.
Speaker 2: So you mentioned that the CFO role is kind of
Speaker 2: uniform across companies, but I have to imagine there are
Speaker 2: some aspects of the pharma industry that make it a
Speaker 2: little bit different, and one of them has to be
Speaker 2: I guess the lead times in developing new treatments and
Speaker 2: new medicines, and perhaps the risk as well. So you
Speaker 2: might spend ten years developing this one thing and then
Speaker 2: you find out at the very end that it has
Speaker 2: an awful side effect or that the regulators aren't going
Speaker 2: to approve it. How does that aspect of the business,
Speaker 2: that uniqueness, feed into the CFO role.
Speaker 5: Yeah, you're absolutely right, And maybe just to talk about
Speaker 5: that process we call it, you know, we take a
Speaker 5: drug from pure research to kind of pre clinical which
Speaker 5: doesn't go into a human body, and you're kind of
Speaker 5: testing how it works in the animals, and then it
Speaker 5: gets into an IMD process or a new drug candidate,
Speaker 5: and there are phase one, phase two, phase three, and
Speaker 5: you're right, I mean, the probability is success from basic
Speaker 5: research all the way through not only getting it launched
Speaker 5: with the FDA in the United States as an example,
Speaker 5: but there's healthcare regulators all across the globe, and.
Speaker 4: Then commercial success as well.
Speaker 5: So there's a ton of risk that goes into it,
Speaker 5: and that's what we spend our time doing. And we
Speaker 5: as a platform company believe that. You know, we've been
Speaker 5: studying the science of mr anda in different verticals. A
Speaker 5: vertical might be respiratory vaccines, as I mentioned, and if
Speaker 5: we know that our mr and a platform can work
Speaker 5: with COVID, then we have a high conviction that it
Speaker 5: can work with RSP and a high conviction that it
Speaker 5: can work with through another.
Speaker 4: Respiratory and so we derisk that throughout the process.
Speaker 5: We do it in basic research, we do it in
Speaker 5: pre clinical, we do it in phase one trials, phase
Speaker 5: two trials, and all those trials are just more patients.
Speaker 5: So you might start with literally ten to fifteen patients
Speaker 5: in phase one and then.
Speaker 4: A respiratory trial.
Speaker 5: Our RSP trial for phase three was thirty seven thousand patients.
Speaker 5: And you just continue to assess what is the risk
Speaker 5: and what is the capabilities, And so that's what we
Speaker 5: spend a ton of time doing when we think about
Speaker 5: allocating capital to our pipeline and our next drug candidates.
Speaker 3: Talk to us a little bit more about that. I
Speaker 3: think you said you had forty or forty something various
Speaker 3: candidates in the pipeline. Obviously it'd be nice to have
Speaker 3: unlimited money and work on all of them. You know,
Speaker 3: when you are thinking about capital allocation, R and D allocation,
Speaker 3: et cetera, Like, what are the factors that go into
Speaker 3: making these decisions?
Speaker 5: Sure, yeah, there's a lot, but I'll kind of summarize
Speaker 5: it into a few, which is getting back to that
Speaker 5: sense of risk and comparing it to our capabilities. So
Speaker 5: I mentioned we have higher conviction and respiratory vaccines, so
Speaker 5: therefore it's much easier to place bets and further dollars
Speaker 5: behind respiratory vaccines. We are currently hoping to de risk
Speaker 5: our latent vaccine therapeutic area. We've recently de risked our
Speaker 5: oncology area, which we call individualized antigen therapy, which is
Speaker 5: a mouthful, but in essence it helps stimulate key.
Speaker 4: Sales to attack cancer.
Speaker 5: And so when we look through it, we say, okay,
Speaker 5: what is the mRNA capabilities? Have we derisked this area?
Speaker 5: And therefore, you know, every step of the way, allocate
Speaker 5: more dollars.
Speaker 4: So that's number one. Number two is we look at
Speaker 4: the size of the opportunity.
Speaker 5: So this really isn't any different than any business case
Speaker 5: for any company in any industry.
Speaker 4: You know, respiratory vaccines is a very large market.
Speaker 5: We think it's a thirty billion dollar market between flue, covid,
Speaker 5: rsv SO, and there's only a few players, and there's
Speaker 5: a very high barrier to entry because you have to
Speaker 5: test so many patients and those trials are quite expensive.
Speaker 5: Third is what's the competition and what's our commercial capabilities?
Speaker 5: Will we be successful? Will we have something that differentiates
Speaker 5: our product versus another product? And then the fourth is timing,
Speaker 5: particularly when you're we're still a relatively young biotech company.
Speaker 4: Thirteen years old is not that old in the grand
Speaker 4: scheme of.
Speaker 5: Things, and so therefore we have to understand Okay, what's
Speaker 5: our cash balance? You know, how much revenue and profit
Speaker 5: are we going to be generating in the next few years.
Speaker 5: And therefore we want to turn over the portfolio to
Speaker 5: not just be a COVID company, but to be a
Speaker 5: multi drug company in various different areas. And so therefore
Speaker 5: we look at, well, is this going to start generating
Speaker 5: revenue in twenty twenty five, twenty twenty six, or some
Speaker 5: of these won't be till twenty thirty five. So we
Speaker 5: have to kind of balance all those things to make
Speaker 5: sure that we have a sustainable company and bring the
Speaker 5: most drugs to market with the highest probability of success.
Speaker 2: So one thing that always interests me in these types
Speaker 2: of conversations is the decision on allocating resources. And we're
Speaker 2: talking about okay, thirteen years old, still relatively small in
Speaker 2: the grand scheme of large pharma companies. But you have
Speaker 2: a lot of people, you have a decent amount of money,
Speaker 2: it seems, how do you decide where to put that
Speaker 2: money to work? And I guess how granular do those
Speaker 2: decisions actually get. Is there like a line item for
Speaker 2: R and D expenses every year and it's just like
Speaker 2: a big bundle and then there are people who are
Speaker 2: specifically dedicated to dividing that up or would you, as CFO,
Speaker 2: be like, I'm going to give X amount to this
Speaker 2: project and why amount to this other developmental treatment.
Speaker 5: Yeah, So at the high level, we work with the
Speaker 5: executive team and the board to understand what is the
Speaker 5: envelope of capital will give to R and D in
Speaker 5: that example, because we also have to give capital to SGNA,
Speaker 5: We have to give capital to capital expenditures, and historically
Speaker 5: over the last couple of years, we had bought back shares,
Speaker 5: although we've stopped buying backshares at this point because we
Speaker 5: primarily want to.
Speaker 4: Invest in this pipeline.
Speaker 5: So after that, so once you size the envelope in
Speaker 5: terms of, Okay, here's how much I'm willing to spend.
Speaker 5: As an example, in twenty twenty four, we think we'll
Speaker 5: spend approximately four and a half billion dollars. So then
Speaker 5: the next step is, Okay, you have forty five drug candidates,
Speaker 5: which ones why? Which is what I just kind of
Speaker 5: talked through in terms of capabilities and the size of opportunities.
Speaker 5: But just to maybe give a little bit more flavor,
Speaker 5: a drug is not so simple, even COVID as an example,
Speaker 5: you know, there's different patient populations. So there's the immunal compromised,
Speaker 5: there's age sixty plus, there's age fifty to fifty nine,
Speaker 5: there's age eighteen to forty nine, there's you know, I
Speaker 5: think six to eighteen. And then there's pediatrics as well,
Speaker 5: which all take a different level of testing and regulatory
Speaker 5: oversight because there are different types of patients and the
Speaker 5: bodies react in different ways, and the regulators want you
Speaker 5: to study different things. So a lot of the actual
Speaker 5: details is under Okay, yes, we've said we're going to
Speaker 5: go with an RSV vaccine, where are we going to
Speaker 5: start and how much will that cost?
Speaker 4: And right now we've said age is sixty and over.
Speaker 5: But then we might look at pediatrics because RSPA is
Speaker 5: often hitting quite materially or significantly younger population. And so
Speaker 5: that's kind of the next level of allocation, which is
Speaker 5: you size the envelope, You then pick a program the
Speaker 5: You then say which patient populations or indications are you
Speaker 5: going to go after. Another example is oncology. So I
Speaker 5: talked about this product that we have and we are
Speaker 5: starting with adjuvant melanoma, and because adjuvant melanoma really in
Speaker 5: immunooncology really seems to work quite well, and we are
Speaker 5: kind of bundled with immunooncology and stimulating it even more.
Speaker 4: And so we started there and it's you know, right now.
Speaker 5: The data that we've released is quite positive over three
Speaker 5: years and improves the life of a patient's success in
Speaker 5: terms of recurrence or death by fifty percent, which is
Speaker 5: outstanding in terms of cancer. And then you've got to
Speaker 5: figure out, well, there's you know, loads of different cancer types,
Speaker 5: where will this product work best? And that's what we
Speaker 5: try to determine every single day as we get more
Speaker 5: and more specific underneath that envelope the capital.
Speaker 3: What is the process by which I mean I have
Speaker 3: to imagine that with e within each internal candidate, the
Speaker 3: various scientists, the various teams, like they probably want more
Speaker 3: for their the specific thing that they're working on. What
Speaker 3: is this sort of internal process? Is it a sort
Speaker 3: of is it an internal lobbying process? That's sort of
Speaker 3: what I imagine my head where they come to you
Speaker 3: and they're like, look, we believe that we can do this,
Speaker 3: and if we could increase the R and D on
Speaker 3: this thing, then we believe that we can maybe get
Speaker 3: it to market or get to the next stage of
Speaker 3: trials faster than X. Like, what is sort of your
Speaker 3: internal process for working with the various champions of different
Speaker 3: potential products where they make the case that they could
Speaker 3: use money in a productive way.
Speaker 4: Yeah.
Speaker 5: So, first and I tell every industry, we could certainly
Speaker 5: spend a lot more than four and a half billion dollars,
Speaker 5: and that is a wonderful thing, because the minute we
Speaker 5: run out of ideas and pipelines, we're in trouble and
Speaker 5: we'll stop growing.
Speaker 4: So it is definitely a hot debate, I would say,
Speaker 4: in terms of where we're going to allocate our capital.
Speaker 4: But let me just give you maybe I'd say three
Speaker 4: processes that we run. Great.
Speaker 5: So, first off, we have twice a year a look
Speaker 5: at our entire portfolio and we call it a strategy
Speaker 5: review to understand, Okay, let's make these decisions, given the envelope,
Speaker 5: the capital we have, let's prioritize these things and we
Speaker 5: pull together.
Speaker 4: It's extremely cross functional. It is even within R and D.
Speaker 5: There are many different functions within R and D, and
Speaker 5: we bring in all of those people that are product
Speaker 5: specialists or epidemiologists or development specialists, et cetera. We bring
Speaker 5: in the finance team to obviously run the financials and
Speaker 5: understand the reward, the commercial team to understand the size
Speaker 5: of the opportunity, and we debate and say, okay, strategically,
Speaker 5: as a company, if we want to be this year,
Speaker 5: we think we'll be four billion in sales. If we
Speaker 5: want to get to I'll just make it up a number,
Speaker 5: say ten billion dollars in sales by twenty twenty seven.
Speaker 5: And if that's a priority, that's not the only priority,
Speaker 5: but that is a priority to say, okay, let's have
Speaker 5: that lens on it.
Speaker 4: Number one. Number two, here's another lens.
Speaker 5: We want to diversify our revenue streams, so we don't
Speaker 5: want to be solely a respiratory business. So we've got
Speaker 5: to make sure we are investing in other latent areas,
Speaker 5: latent disease areas or oncology that we also want to
Speaker 5: bring to market, and we have those strategic and that
Speaker 5: kind of sets the foundation.
Speaker 4: Then. So that's process one that happens twice.
Speaker 5: A year, and we figure out which products we want
Speaker 5: to fund in theory, and that's what we start co
Speaker 5: operating too. But then there's underlying research and clinical trials
Speaker 5: that are going on every single day, and there's report
Speaker 5: outs and you might get different data, different answers that
Speaker 5: actually changes that and that is a very well governed
Speaker 5: process that we call a stage gay process. And as
Speaker 5: an example, you know, I myself have to approve whether
Speaker 5: we go to a phase three trial because those are
Speaker 5: very expensive, as I mentioned earlier, so you know, but
Speaker 5: there are gates into even before it gets into the
Speaker 5: clinical there's gates in the research area, in pre clinical area,
Speaker 5: and then there's gates before you go to phase one,
Speaker 5: phase two, phase three, and those you know, we have
Speaker 5: a theory based on the strategy of what we wanted
Speaker 5: to invest in, but new data.
Speaker 4: Comes out and you have to adjust to it.
Speaker 5: So I'd say that's kind of the second process that
Speaker 5: is highly governed. So you have this top level strategy,
Speaker 5: then you have actual data that's coming through that is
Speaker 5: well governed. And then the last thing is particularly on
Speaker 5: how much we're going to spend and whether we go
Speaker 5: and spend more on these phase three trials. We actually
Speaker 5: take it to a subcommittee of the board, so the
Speaker 5: Board of Directors, which we have some scientists and doctors
Speaker 5: that are on our board and oversee it and have
Speaker 5: a lot of experience also govern Yeah, we think it's worse.
Speaker 5: We get it, we get the strategy. If it's into
Speaker 5: our strategy, we understand the risks, and we think you
Speaker 5: should move forward. So those are kind of three different
Speaker 5: processes in terms of how we govern our product strategies.
Speaker 2: Where does the money actually come from? And I realized
Speaker 2: like maybe maybe there's some obvious answers here. You are
Speaker 2: a publicly traded company, but this is a really capital
Speaker 2: intensive business. And I was looking on the Bloomberg terminal earlier.
Speaker 2: It doesn't seem like you have any bonds, which is
Speaker 2: kind of unusual nowadays. Where does that like funding mix
Speaker 2: actually come from.
Speaker 5: Yeah, so I'll chase the answer that question in the industry,
Speaker 5: but also the specific to us because we're a little
Speaker 5: bit different. Sure, so specific to us, we actually, because
Speaker 5: of COVID and how successful our vaccine was to help
Speaker 5: support the global population, we're actually sitting on thirteen billion
Speaker 5: dollars in cash. That is very unique to a biotech company.
Speaker 5: So we are quite fortunate. And as an example, we
Speaker 5: said this year we're going to actually burn through four
Speaker 5: billion dollars in cash. So we believe in this platform
Speaker 5: so much that we need to advance the next set
Speaker 5: of pipeline of drug candidates.
Speaker 4: And we have a plan all the way for the
Speaker 4: next three.
Speaker 5: To five years that we're actually going to go from
Speaker 5: thirteen billion to nine billion in the year twenty twenty
Speaker 5: four because we think it's the right thing to do.
Speaker 5: And then we said we're going to do it a
Speaker 5: little bit again, that we're going to burn another two
Speaker 5: to three billion in twenty twenty five before breaking even
Speaker 5: in twenty twenty six as we'd launch new drugs. So
Speaker 5: that's a bit unique in the biotech world, I would
Speaker 5: say broadly though for the sector, there are various avenues
Speaker 5: that obviously public investors, capital markets, like you said, there
Speaker 5: are some government projects with Barta Covid as an example,
Speaker 5: the US government helped fund some of the COVID research
Speaker 5: and development of our product, and so there are different
Speaker 5: government agencies across the globe that you can tap into.
Speaker 4: There are other companies.
Speaker 5: So before we were you know, before Covid, we had
Speaker 5: no we had no products that had ever been approved,
Speaker 5: and so we started in twenty eleven and in twenty
Speaker 5: sixteen we actually went to a different company, company called Merk.
Speaker 5: I'm sure you've heard of them, and they actually helped
Speaker 5: fund our oncology product because it is in conjunction with
Speaker 5: their product k Trudea. So that's another outlet for capital
Speaker 5: that you can part with a collaboration where you know,
Speaker 5: a company like Mark gave us I think two hundred
Speaker 5: and fifty million dollars back in twenty sixteen to launch
Speaker 5: this product and advance the science that is now so
Speaker 5: fruitful come twenty twenty four. And then the last one
Speaker 5: is just foundations, and we tap into foundations as well,
Speaker 5: not as much now that we have a fair amount
Speaker 5: of funding ourselves, but Bell and Melinda Gates as an example,
Speaker 5: we were working with them on certain infectious disease vaccines.
Speaker 5: So those are kind of the areas. So it's capital markets,
Speaker 5: it's the government, it's other companies and collaborations that might
Speaker 5: fund it, and then there's foundations as well.
Speaker 3: Let's talk about the role of the government. One of
Speaker 3: the extraordinary things, and you know, Operation Warp Speed was
Speaker 3: sort of this incredible endeavor that involved upfront money and
Speaker 3: also advanced purchasing agreement so that once you got the
Speaker 3: vaccine to market that you had guaranteed sales talk to
Speaker 3: us just about the math of Operation Warp Speed, what
Speaker 3: it meant for Maderi NA, and then specifically the power
Speaker 3: of the advanced purchase agreements and whether that is a
Speaker 3: model that you see being replicated going forwards, like a
Speaker 3: sort of a way of de risking the entire process.
Speaker 4: Sure.
Speaker 5: Yeah, as you and I spoke beforehand, Joe, I wasn't
Speaker 5: here during COVID. I joined the company at the end
Speaker 5: of twenty twenty two, in September of twenty two, so
Speaker 5: I've been here for eighteen months, so I obviously am
Speaker 5: aware of what went on, but I don't know all
Speaker 5: the intimate details. So I'll give you my general opinion
Speaker 5: and impression, and you know it works. Me. I forget
Speaker 5: the exact money, but I think it might be in
Speaker 5: the range of a billion dollars. Don't quote me on that.
Speaker 5: It's in our disclosures. You can actually pull it up
Speaker 5: and get the exact numbers. But it was not insignificant.
Speaker 5: And I think this is an example of a terrific
Speaker 5: public private partnership that actually did great for the world.
Speaker 5: And to put that into perspective, and it wasn't just
Speaker 5: the funding. By the way, we can get into it.
Speaker 5: There was so much help throughout the entire process in
Speaker 5: twenty twenty in many different areas, shippings, et cetera. A
Speaker 5: lot of red tape to cut through, but it actually
Speaker 5: proves that in one year we went from COVID that
Speaker 5: came out, we identified the vaccine in two days, and.
Speaker 4: We got it approved from market in eleven months.
Speaker 5: That is unparalleled in the pharmaceutical biotech industry. And so
Speaker 5: it shows you the art of the possible. There is
Speaker 5: good reason why things are regulated because there's safety concerns
Speaker 5: and we have to do that, but it also shows
Speaker 5: you that you can accelerate this timeline if you cut
Speaker 5: through some red tape for something that has been very powerful,
Speaker 5: very safe and effective and really has changed the world
Speaker 5: in a very rapid way. So I'm a huge believer
Speaker 5: in the success of that. In terms of the APA SEAH,
Speaker 5: I mean to think about our situation. We had zero
Speaker 5: revenue and we were asked to go invest literally hundreds
Speaker 5: and billions of dollars to get this over the hump.
Speaker 5: It was a make or break decision for us. I mean,
Speaker 5: we were sitting there going we were public company. You
Speaker 5: could run out of cash and a heartbeat, and so
Speaker 5: we you know, we needed a partner to help take
Speaker 5: that risk, and ultimately it worked out and worked very well.
Speaker 4: So the APAs to your second part of your question
Speaker 4: there were.
Speaker 5: Very important because we had to know that if we're
Speaker 5: going to go invest all this money and in our infrastructure,
Speaker 5: forget about the research and development, we have to bring
Speaker 5: on six different manufacturing partners across the globe. We had
Speaker 5: to go make purchase commitments for inventory in the billions
Speaker 5: of dollars with part you know, to say, hey, we
Speaker 5: need we need to make a lot of COVID doses
Speaker 5: over a billion on that time period that we made
Speaker 5: a billion doses as this and we had that was a.
Speaker 4: Lot of risk.
Speaker 5: We needed to know that we were going to get
Speaker 5: some return otherwise, you know, we were going to turn
Speaker 5: upside down.
Speaker 4: So APAs were important.
Speaker 5: I believe that a partnership can work quite well, and
Speaker 5: in this example, I think it works extremely well. I
Speaker 5: get that there needs to be regulation for many different reasons,
Speaker 5: but I think that shows you the art of the possible,
Speaker 5: both in public private partnerships as well as what can
Speaker 5: happen when you really try to expectegulatory process here's.
Speaker 2: One thing I always wonder when it comes to CFOs
Speaker 2: and their sort of daily life. But Joe has a
Speaker 2: line that I think it actually came from Neil Data
Speaker 2: and you co opted it. But the stock market is
Speaker 2: not the economy. But it's not not the economy. And
Speaker 2: when share prices go up, that means there's more availability
Speaker 2: of funding for companies in general. So first of all,
Speaker 2: how closely do you watch the moderna stock price? Is
Speaker 2: that like the first thing you look at when you
Speaker 2: come into the office every morning.
Speaker 4: I mean I certainly monitor it quite a bit. Yes,
Speaker 4: I do. It's important. I mean it's one of the
Speaker 4: key stakeholders.
Speaker 5: And one that I know most importantly own, which is
Speaker 5: our investors.
Speaker 4: So I have to make sure I'm watching that. And
Speaker 4: so yes, I actually watch it in a fair amount.
Speaker 2: And then okay, what do you think when it starts
Speaker 2: going down? Is there like a thought process in your
Speaker 2: head that says, oh, we need to think about specific
Speaker 2: things that we could be doing to boost shares or
Speaker 2: do you start thinking, well, you know, there are other
Speaker 2: things going on in the economy, interest rates are going up.
Speaker 2: That sort of thing. I just wonder, you know, put
Speaker 2: us inside your mind for a second. As a CFO,
Speaker 2: when you look at a share price, what is happening
Speaker 2: in your head?
Speaker 4: Yeah? I try.
Speaker 5: I try to assess for really rapid movement, what is
Speaker 5: going on? You know, day to day, stock's going to
Speaker 5: jump all that, you know, a little bit up, a
Speaker 5: little bit down, a little bit.
Speaker 4: That happens all the time.
Speaker 5: So I try to assess, Okay, Number one, is it
Speaker 5: a specific event for us? A news item, whether it's
Speaker 5: a regulatory update on a clinical trial, or whether we
Speaker 5: give you know, guidance on financials or whatever it might be.
Speaker 4: Is it a specific event? Did we do it well?
Speaker 4: You know, we take that quite.
Speaker 5: Seriously, and did we communicate it well where we clear
Speaker 5: do people get it to investors get it? And even
Speaker 5: if they get it, you know, if it's bad news,
Speaker 5: the stock may go down, but they understand it and
Speaker 5: there's a natural you know, implication to that. Or if
Speaker 5: the stock goes up, they are clearly understanding the message
Speaker 5: of what we're trying to say.
Speaker 4: So I try to understand Number one, is there a
Speaker 4: specific event for us?
Speaker 5: The everyday events in terms of just the global economy
Speaker 5: and interest rates worry me less. We're fortunate as I
Speaker 5: mentioned to have thirteen billion dollars in cash.
Speaker 4: We don't take it lightly. We try to understand what that.
Speaker 5: Means for us over the coming years in terms of, Okay,
Speaker 5: what's going to happen from a demand perspective, or you know,
Speaker 5: the cash in the bank will return interest, And so
Speaker 5: we obviously are cognizant on the of the implications on
Speaker 5: our company, but overall, we're I think we spend the
Speaker 5: most time focusing on our investors understanding the long term
Speaker 5: opportunity for our company.
Speaker 4: And I think that's what's critical for many companies. And
Speaker 4: it is hard to.
Speaker 5: Have investors really look at the long term, and you know,
Speaker 5: different portfolio managers, investors have a different view on what
Speaker 5: is long term, whether that's twenty four months, five years,
Speaker 5: ten years, And we try to make sure that people.
Speaker 4: Understand what is the opportunity ahead and.
Speaker 5: Actually if they are saying it back to us, then
Speaker 5: at least they understand it and they might make a
Speaker 5: different decision, might wait for it, you know, and we
Speaker 5: try to understand what does that mean in terms of
Speaker 5: their buying behavior.
Speaker 4: But that's what we.
Speaker 5: Spend the most time doing, is to under just make
Speaker 5: sure our investors understand our long term strategy and do
Speaker 5: they believe in where we're going.
Speaker 3: It does seem like for companies in some areas that
Speaker 3: when a stock is moving lower or maybe higher, but
Speaker 3: when this dog is moving lower, that there is an
Speaker 3: impulse to course correct in some way. And so you
Speaker 3: saw this, for example, I think within big tech, where
Speaker 3: we saw this pretty big sell off in twenty twenty
Speaker 3: two and a bunch of companies seem to get the
Speaker 3: message like, oh, you know what, we really need to
Speaker 3: slow our hiring, or maybe we shouldn't bet the entire
Speaker 3: company on virtual reality goggles, and we need to cut
Speaker 3: our research in this area. That there is this message
Speaker 3: about something, and then you see the layoffs and they're like, look,
Speaker 3: we've done much better about reducing our cash burned, et cetera.
Speaker 3: Do you take a signal I mean, I get there
Speaker 3: are certain things that are out of your control that
Speaker 3: you have a long term message that you want to
Speaker 3: tell the shareholders. But do you take a signal from
Speaker 3: larger moves in the market that say, look, the investors
Speaker 3: want to see X, and we need to course correct
Speaker 3: in some way or another in order to align our goals.
Speaker 4: That's a great question.
Speaker 5: So I think, if there's a big move, and we
Speaker 5: should be doing this all the time, but there's something
Speaker 5: to listen to, and so I'll just take myself out
Speaker 5: of Maderna. I mean, if you're a CFO and your
Speaker 5: stock goes down twenty percent, that is a substantial amount
Speaker 5: of investors saying it is less valuable. Something's going on,
Speaker 5: And I think what you have to listen for is
Speaker 5: do we already know that or is it something that
Speaker 5: we really have We got to think differently about. So
Speaker 5: is our revenue line not going to be what we
Speaker 5: think it's going to be? And the investors are ahead
Speaker 5: of us because they see something in the marketplace that
Speaker 5: is changing. And if that's the case, then sometimes I
Speaker 5: mean I take our conversations with investors as a two
Speaker 5: way learning.
Speaker 4: I learned from them.
Speaker 5: They give me their thoughts on what they think that
Speaker 5: where the market's going, where we're positioned, how we're positioned,
Speaker 5: how successful they think we're going to be, just as
Speaker 5: much as I try to tell them our view. And
Speaker 5: so it is a two way learning. And especially when
Speaker 5: there's a huge market move or significant market move, they're.
Speaker 4: Telling you something.
Speaker 5: The question of what you have to sift through is
Speaker 5: did we already know that and therefore just stay the
Speaker 5: course on strategy, or is it something that, hey, we
Speaker 5: might need to think differently about and perhaps we're wrong
Speaker 5: on one of our assumptions. So that's how I deal with,
Speaker 5: you know, particularly significant moves in the share price.
Speaker 2: So in the course of prepping for this interview, I
Speaker 2: was doing, you know, some casual research into MODERNA and
Speaker 2: pharma in general, and I stumbled on this article from
Speaker 2: Science I think it was from March twenty twenty, so
Speaker 2: right in the heart of the pandemic, and it opens
Speaker 2: with a discussion of the gartment hype cycle and this
Speaker 2: idea that you know, people get really excited about a
Speaker 2: new technology. You see share prices of these tech companies
Speaker 2: go through the roof, and then there's some adjustment process
Speaker 2: or reality kind of sets in the shar's fall, and
Speaker 2: then slowly there's a recovery as people kind of enter
Speaker 2: realistic productivity and use of these new technologies. And looking
Speaker 2: at the MODERNA share price since March of twenty twenty,
Speaker 2: it really does look like a gartment hype cycle. Like
Speaker 2: if you're going to choose a textbook example, it's kind
Speaker 2: of this, So I guess my question is, like, how
Speaker 2: do you balance people getting really enthusiastic about new technological
Speaker 2: breakthroughs and all these new treatments we have in the pipeline.
Speaker 2: I mean, I don't think you're working on this specifically,
Speaker 2: but GLP one weight loss drugs are obviously something that's
Speaker 2: kind of burst in to the public consciousness recently. How
Speaker 2: do you balance that excitement and the hype versus like
Speaker 2: the reality of putting these in production and again, going
Speaker 2: back to the timelines that you were discussing the idea
Speaker 2: of long term investment, like, don't get too excited. It's
Speaker 2: going to take a while for these to enter the market,
Speaker 2: and then it's going to potentially take even longer for
Speaker 2: them to filter through in an efficient way.
Speaker 5: I think in those cases, I don't know every single case,
Speaker 5: but I'm a little closer to the Maderna case. Let's say,
Speaker 5: I think it shows the art of the possible, and
Speaker 5: I think people understand what could be from Maderna. And
Speaker 5: to your point, maybe there's a little over exuberance at
Speaker 5: a particular period and time, and I think that's where
Speaker 5: I go to what we should be doing, which is
Speaker 5: to not tell people that that's still not a real
Speaker 5: possibility someday. Well, let's go through the timeline, let's go
Speaker 5: through the risks and opportunities, and let's walk it through
Speaker 5: our you know, as best to our ability in a
Speaker 5: public way.
Speaker 4: Here's what we believe and what.
Speaker 5: Could happen when and after that, investors have to model
Speaker 5: their own cashlowds. That's what a stock price is is
Speaker 5: ultimately what they think the company's worth from.
Speaker 4: A cashloaw perspective. So I think it's a delicate.
Speaker 5: Balance of we still believe what MODERNA can be and
Speaker 5: it should be someday in terms of being able to
Speaker 5: solve so many therapeutic areas as a platform company that
Speaker 5: can run the same technology through a manufacturing plant, and
Speaker 5: so therefore the marginal cost of arguing with drugs should
Speaker 5: go down substantially.
Speaker 4: But there's a timeline for that.
Speaker 5: There are regulators, and there's a timeline, and there's only
Speaker 5: so much in development as expensive, and so we try
Speaker 5: to be as transparent as possible with that, And I
Speaker 5: don't know, I guess that's my belief is we sh
Speaker 5: just to always make sure people understand what could happen someday,
Speaker 5: but also give them the best assumptions possible.
Speaker 4: To the best of your ability over the relative near term.
Speaker 3: Maderna is a according to the Bloomberg right now, I'm
Speaker 3: looking at a thirty seven billion dollar company. But obviously
Speaker 3: this sort of accelerated development of the COVID vaccine, allowing
Speaker 3: life to get back to normal in a maybe a
Speaker 3: period of time that was much shorter than people expected.
Speaker 3: You know, obviously orders of magnitude more valuable to the
Speaker 3: global economy than perhaps what Maderna specifically accrued. And I
Speaker 3: guess that's why you know, we had Operation warp Speed.
Speaker 3: It certainly seems like in theory you could say the
Speaker 3: same thing about other vaccines, other pharma products that are
Speaker 3: in the works. You know, I don't know how much
Speaker 3: money is lost to the flu every year, but it
Speaker 3: would be probably very great for the economy if no
Speaker 3: one got the flu anymore, or colds or any other
Speaker 3: sort of sicknesses that disrupted our life. Do you think
Speaker 3: like I've been a little surprised, you know that after
Speaker 3: the Operation Warp Speed experience, we haven't seen more announcements
Speaker 3: like hey, let's do an operation warp speed for X
Speaker 3: or Y, or maybe they have been and I just
Speaker 3: missed the stories like have you seen any follow up
Speaker 3: on like, Hey, this model did something powerful, Let's do
Speaker 3: it again, let's derisk it, Let's have the government step
Speaker 3: in with this investment and guaranteed purchase agreements. Like have
Speaker 3: people taken lessons from Operation Warp Speed and applied it
Speaker 3: potentially to other areas?
Speaker 5: I think you see some minor examples of that. But
Speaker 5: I also just think that COVID was such a significant
Speaker 5: event that affected the entire global population that it warranted
Speaker 5: both you know, resources from a time perspective as well
Speaker 5: as money perspective. And that's not to say that these
Speaker 5: other ones don't, but it just it was a crisis.
Speaker 5: And so you know, there are areas in oncology that
Speaker 5: I think there's additional funding going behind.
Speaker 4: I think people learning. Okay, rare disease, I hear a
Speaker 4: lot of talk.
Speaker 5: Again, I am not a scientist, I am not a regulator,
Speaker 5: So take it with a grain of salt. But rare
Speaker 5: disease as an example, it's rare by nature, so it's
Speaker 5: difficult to say it's difficult to actually get enough patients
Speaker 5: in data to progress fast because of the regulatory processes,
Speaker 5: and I think the regulators acknowledge that and say, hey,
Speaker 5: if I only have I'm going to make it up
Speaker 5: one hundred patients in the United States. This might take
Speaker 5: ten years, but I can already tell in two years
Speaker 5: in a phase one trial it's making a significant impact
Speaker 5: on fifteen patients. And these are life threatening diseases. It's
Speaker 5: worth taking the risk.
Speaker 4: So it might not be at.
Speaker 6: The same speed and emphasism as operation warp speed, but
Speaker 6: I have seen a couple areas in oncology and rare disease,
Speaker 6: and maybe that's quite honestly, that's where I am personally
Speaker 6: spending time, so I see those things, and maybe it's
Speaker 6: happening in other areas, but I'm just not as knowledgeable
Speaker 6: as all other therapeutic areas.
Speaker 5: But I do see it a little bit more in
Speaker 5: oncology and rare disease. Again, not the same as operation
Speaker 5: warp speed, but I have seen it change people's minds
Speaker 5: and perspectives a little bit.
Speaker 2: I wanted to ask an operational question, which is how
Speaker 2: important is distribution to the pharma business. And one of
Speaker 2: the reasons I ask is because we recorded an episode
Speaker 2: with the Celsius CEO and energy drinks are clearly a
Speaker 2: very different business to pharma, but one thing maybe they
Speaker 2: have in common is that a lot of your success
Speaker 2: depends on actually getting into stores. And obviously, with medicines,
Speaker 2: we are not talking about getting into stores. We're talking
Speaker 2: about getting into hospitals and pharmacies and doctors' offices, and there,
Speaker 2: I imagine you have to face some pretty stiff competition
Speaker 2: from competitors like Pfizer or a Glaxo Smith Klein. So
Speaker 2: how important is that and how do you how does
Speaker 2: that process actually work? What are the discussions like when
Speaker 2: it comes to distribution.
Speaker 4: Yeah, I would say I think distribution is very important.
Speaker 5: I think there are other important factors in terms of
Speaker 5: making sure that medication reaches a patient, but distribution, I mean,
Speaker 5: when I think about it, number one, it's got to
Speaker 5: be there at the right time. So take walking into
Speaker 5: CBS and wanting a flu shot. If CBS does not
Speaker 5: have the flu shot available, there's a chance that you
Speaker 5: might not go back for it. And so the importance
Speaker 5: of being having the supply in the market when a
Speaker 5: patient wants and needs it is extremely important, and distribution plays.
Speaker 4: A role in that.
Speaker 5: There's also many different things that you have to work
Speaker 5: through in terms of storage. So some products are required
Speaker 5: to be refrigerator stable, some are required to be frozen
Speaker 5: at a certain temperature, some are required to be frozen
Speaker 5: at a very cold temperature, and making sure that the
Speaker 5: distribution network has that as well. So the conversation largely
Speaker 5: revolves around that, what can they do to make sure
Speaker 5: that we have the right amount of products in the
Speaker 5: right channels and buy channels for our industry that means
Speaker 5: pharmacies and or doctor's offices, and there's other places to
Speaker 5: put it as well, you.
Speaker 4: Know, but that's largely what that conversation does. And I would.
Speaker 7: Say there is some differentiation in the marketplace from a
Speaker 7: competitive standpoint, but I wouldn't say different Distribution specifically is
Speaker 7: the number one variable for a differentiation between competition.
Speaker 3: Tracy mentioned earlier. But the hot thing, it seems inform
Speaker 3: right now that people are really excited about is gop
Speaker 3: one drugs and weight loss, and if a company has
Speaker 3: something in that category that investors get really excited and
Speaker 3: bid up the stock. You know, imagine things go in
Speaker 3: and out of style at various times, and people are
Speaker 3: really excited about one particular category. Do you feel that
Speaker 3: pressure that is like, Okay, this is the hot thing
Speaker 3: right now weight loss, and we've you know, suppressed people's
Speaker 3: appetite with an injection. Do you feel that pressure and
Speaker 3: does that come from investors? Like are you playing in
Speaker 3: the space? Do one of your forty products? Is it
Speaker 3: going to be potentially related to this category? And I'm curious, like,
Speaker 3: you know, you mentioned that sort of two way conversation.
Speaker 3: You're telling investors about your pipeline, they're telling you what
Speaker 3: they expect. Does this sort of flavor of the month
Speaker 3: or flavor of the year when it comes to what's
Speaker 3: hot in drugs play into those conversations?
Speaker 4: Not really, not for us, not from what I've heard
Speaker 4: from investors.
Speaker 5: I have seen it in other industries for sure, where
Speaker 5: and maybe it's just because there's a hot new product
Speaker 5: that is really core and central, that could be core
Speaker 5: and central to somebody's strategy, but they're missing it GLP
Speaker 5: versus what we've laid out is not core and central
Speaker 5: to our strategy. And so therefore investors understand that and
Speaker 5: quite frankly, rarely.
Speaker 4: Ask about it. Okay, we're in the same yeah, so
Speaker 4: just not as applicable to our company.
Speaker 2: You worked at GE for a long time before going
Speaker 2: on to Motejarna. I think there was another company in between.
Speaker 2: But one thing I'm really curious about is are there
Speaker 2: overlaps between pharma and something like the aircraft business. I
Speaker 2: have to imagine that both of those industries have really
Speaker 2: long lead times that you have to manage, and as
Speaker 2: part of that, you also have to manage investor expectations.
Speaker 4: They are so similar.
Speaker 5: So let me paint the aviation business that I worked
Speaker 5: in for GE, which was I was in the commercial
Speaker 5: engines division, Commercial Engines and Services. So think of you
Speaker 5: know the seven three seven maps, a partnership with a
Speaker 5: company out of France and GE called CFM. Is the
Speaker 5: is the engine on that aircraft? And so when I
Speaker 5: was a CFO there, you're making bets on product families
Speaker 5: that will be on aircraft for literally forty years. And
Speaker 5: these are substantial investments. We're talking two three billion dollars
Speaker 5: for a company to invest.
Speaker 4: In, and you have to make the right bet. Are
Speaker 4: you on the right.
Speaker 5: Aircraft because you know, you can put an engine on
Speaker 5: a bad aircraft and your engine might be great, but
Speaker 5: if nobody buys aircraft, it's irrelevant. So not only do
Speaker 5: you need to make the best engine, you need to
Speaker 5: put it on the right aircraft, people need to buy it,
Speaker 5: and then you need to obviously do everything else well.
Speaker 5: From an execution standpoint.
Speaker 4: That is no different here.
Speaker 5: I mean, we are making you know, I mentioned our
Speaker 5: RSV product as an example, thirty seven dollars in patients.
Speaker 5: It's in the hundreds of millions of dollars from an
Speaker 5: investment perspective.
Speaker 4: But once it's ready, and if it's there.
Speaker 5: You know that rspeed vac scene probably won't be tweaked
Speaker 5: too much. Maybe a little bit of tweaking over time, but.
Speaker 4: We've just cleared a high barrier of entry. Where as
Speaker 4: of right now there's only two competitors, and in the aviation.
Speaker 5: Space there's there's largely three competitors. So they're very similar
Speaker 5: and so the funding. So let's just give an example,
Speaker 5: maybe give you a specific example. When I was at Aviation,
Speaker 5: you think through that three billion dollar program, and we
Speaker 5: had what we called risk and revenue share partners, which
Speaker 5: was somebody to say, hey, we can't invest in six
Speaker 5: product families times three billion dollars each. We're going to
Speaker 5: have to have some partners that they'll make part of
Speaker 5: the engine and they'll help invest in the technology and
Speaker 5: they can share in the commercial rewards. That can be
Speaker 5: very similar in pharmabiotech. So I mentioned Mark in our partnership.
Speaker 5: They funded two hundred and fifty million dollars back in
Speaker 5: twenty sixteen and additional moneys since thereafter, and.
Speaker 4: They owned fifty percent of that program. So when you're.
Speaker 5: Thinking about pulling together this entire pipeline across many different
Speaker 5: therapeutic areas and they all cost a lot of money
Speaker 5: to develop, you need partnerships, and then you know that
Speaker 5: that partnership can provide more than just money.
Speaker 4: In the case of Merk, they are great from a
Speaker 4: commercial perspective.
Speaker 5: They sell the leading oncology drug and the planet, and
Speaker 5: the same in the aviation plant world. You've got to
Speaker 5: have people that might make the best part of the
Speaker 5: engine that you're talking about to improve fuel consumption. So
Speaker 5: they're very similar models one that I think about quite
Speaker 5: a bit. And on top of that, maybe the last
Speaker 5: thing I'd say is they're both highly regulated. I already
Speaker 5: mentioned the biotech space, but aviation, as you know, the
Speaker 5: FAA and other agencies across the globe highly regulate the
Speaker 5: aviation space to make sure that it is very safe
Speaker 5: to fly aircraft across the globe.
Speaker 3: I just have one last question, and I get you know,
Speaker 3: for a sort of young company, growth company, you know,
Speaker 3: macro may not affect you as it may affect a
Speaker 3: more mature company. But I'm just curious, like, when the
Speaker 3: FED raises rates dramatically, what does that mean for company
Speaker 3: like ours?
Speaker 5: Well, for us, again, we're a bit unique because we
Speaker 5: have thirteen billion dollars solid into it our way and
Speaker 5: maybe how I think about it for other companies ways,
Speaker 5: but that might not have be fortunate to thirteen billion.
Speaker 5: Thirteen billion we have I forget the exact number invested
Speaker 5: in bonds, but primarily invested in bonds, and so we
Speaker 5: look at duration, We look.
Speaker 4: At you know, what does that investment portfolio want to
Speaker 4: look like. We're not there to make money on that asset.
Speaker 5: We are there to preserve capital to invest in what
Speaker 5: is core to us, which is our R and D
Speaker 5: and everything that we've spoken about today. But we look at, okay,
Speaker 5: what's that mean? And you know, what's the duration we
Speaker 5: should be taking out? Which is a happy problem to
Speaker 5: have for us. I would say, I would say, you know,
Speaker 5: for a company that is sitting on you know, one
Speaker 5: and a half years of cash burn, and you're just
Speaker 5: sitting there saying, Okay, you know, I'm about chech. I'm
Speaker 5: not revenue yet, I'm not revenue generating yet. I've got
Speaker 5: one and a half years of cash burn, you know,
Speaker 5: in terms of cash on my balance sheet? What does
Speaker 5: this mean? And what do I need to do? You know,
Speaker 5: am I going to make it? You know how interest
Speaker 5: rates affect me? Should I reposition myself?
Speaker 4: Do I What do I need from a death perspective?
Speaker 5: You know, it's just such a different animal in terms
Speaker 5: of surviving that time period in a different way.
Speaker 2: All Right, Jamie Mock, CFO of Moderna, thank you so
Speaker 2: much for coming on all thoughts. That was a really
Speaker 2: interesting conversation. I feel like I understand MODERNA now and
Speaker 2: also the role of CFO a little bit better.
Speaker 4: Well, thank you, Tracy angel I really enjoyed it and
Speaker 4: it was a pleasure. Amazing you both.
Speaker 2: So, Joe, that was really interesting and kind of surprisingly
Speaker 2: thematic in a lot of ways. It seemed to touch
Speaker 2: on a bunch of recent things we've been talking about,
Speaker 2: like aviation.
Speaker 3: Mike, Yeah, I wasn't expecting that.
Speaker 2: Yeah, Like distribution, although I take his point that that
Speaker 2: isn't I guess, a main source of competitive differentiation. But
Speaker 2: I'm glad I've finally got the chance to ask a
Speaker 2: CFO what he thinks when he sees the share price
Speaker 2: going down. I always wanted to ask that.
Speaker 3: Yeah, No, I mean I think it's really interesting. I mean,
Speaker 3: at the end of the day, like, right, any company
Speaker 3: can talk about their vision or their roadmap, et cetera,
Speaker 3: But when investors are selling your stock. I think I
Speaker 3: appreciated his fourth rightness that like you have to take
Speaker 3: that seriously on some level, like it seems like there's
Speaker 3: only so far any company can go in terms of
Speaker 3: staying on one path if investors don't like the path.
Speaker 2: Yeah, And just on that note, I also thought it
Speaker 2: was really interesting his discussion of I guess encouraging investors
Speaker 2: to think over the long term, and also the idea
Speaker 2: that everyone has a different definition of what the long
Speaker 2: term actually is. And I suspect those definitions have been
Speaker 2: getting shorter in recent years. But you know, it can
Speaker 2: range for twenty four months to like ten years, And
Speaker 2: how do you actually convince people to stay with the company,
Speaker 2: be excited about the product offering and the pipeline, but
Speaker 2: not get too excited and expect that immediacy for things
Speaker 2: that take a particularly long time to develop.
Speaker 3: Totally, you know, the I was not expecting him to
Speaker 3: like draw those analogies between pharma development and commercial engines,
Speaker 3: but it makes so much sense because obviously you have this,
Speaker 3: you know, this huge runway, no pun intended, and then
Speaker 3: you're locked in for a long time and the product
Speaker 3: isn't going to change after that until you're really taking
Speaker 3: this sort of like extremely long uncertain bet. I also
Speaker 3: really like to description of the processes that they have
Speaker 3: in place for internal capital allocation. You know, you have
Speaker 3: like forty different processes and that like competition element between
Speaker 3: the different subject areas.
Speaker 2: Yeah, absolutely, shall we leave it there.
Speaker 3: Let's leave it there, all right.
Speaker 2: This has been another episode of the Audlots podcast. I'm
Speaker 2: Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 3: I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 3: Follow our producers Kerman Rodriguez at Kerman Arman, Dashel Bennett
Speaker 3: at Dashbot, and Kilbrooks at Kelbrooks. Thank you to our
Speaker 3: producer Moses Ondem from our Oddlots content. Go to Bloomberg
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