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Moderna Preparing For Largest Biotech Debut Ever

By Alex NewmanStock MarketsDec 01, 2018 10:08PM ET
Moderna Preparing For Largest Biotech Debut Ever
By Alex Newman   |  Dec 01, 2018 10:08PM ET
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Investors around the world are waiting with bated breath for more news about the biotechnology company Moderna, which recently announced its intentions for an IPO that could be the largest in its industry’s history. The company could easily reap upwards to half a billion dollars or more during its exciting market debut, which is already beginning to generate chatter across markets as investors prepare themselves to scoop up some shares.
Here’s everything you need to know about Moderna, and how its IPO is set to reshape the contemporary biotech market as we know it.

A real biotech unicorn

Moderna (NASDAQ: MRNA) has already garnered an impressive reputation for itself amongst biotech investors because the company is that most rare of all breeds – a true unicorn. The well-funded company enjoys a private valuation of about $7 billion, a whopping figure that sets Moderna apart from many smaller fish vying for success in the pond. The biotech company focuses on messenger RNA (mRNA), but it has no marketable products right now, which could give some investors pause until they learn a little bit more about Moderna’s daily operations.

Moderna is currently developing a series of therapies that it hopes will revolutionize how mRNA transports important genetic information around the body, with some of its endeavors having already advanced to the point where human trials are underway. As many investors familiar with the biotech landscape will know, Moderna could still be developing these costly therapies for years to come, but their potential for profit is immense if the company can perfect and begin churning out a marketable product.

The company has already enjoyed considerable success when it comes to developing a reputation for itself, and it’s also secured plenty of funding without the help of the open market. Moderna recently scooped up an impressive $125 million in funding by deftly expanding its partnership with Merck around a cancer vaccine, for instance, which should help convince some investors that money isn’t a problem for the aspiring biotech behemoth. The company was originally considering a dual listing in Hong Kong and New York, but the former will be dropped when the company eventually makes its market debut in The Big Apple (NASDAQ:AAPL).

According to filings made with the SEC, the company is actually raising its standards for its forthcoming market debut; Moderna was originally aiming to vacuum up around $500 million in its IPO, but the company is now ambitious enough that it’s shooting for a larger $600 million.

Therapies must keep moving forward

It’s looking like Moderna will ultimately offer investors some 21 million or so shares at an initial price range of $22-24 per share. The vast majority of the money that the company makes from its IPO will be put towards the further development of its many therapies, which should be comforting to investors who are concerned about marketable progress being made. Right now, Moderna intends to take roughly half of its proceeds, likely something in the $300-350 million range, and put it towards further clinical development trials. The company will also be using some of its cash to keep an eye open for future drug opportunities.

Moderna is also drawing investor interest because the company has made it clear that it’s possibly interested in acquiring other biotech firms, especially if it finds itself with some extra cash on hand after its market debut. The risky market debut could be a massive cash cow for investors themselves, although the historic figures being floated right now are giving some investors worries about Moderna’s sustainability and caution. Without any FDA-approved drugs and with late-stage human trials still lingering off in the distance, the company will have to work to woo over investors despite its impressive reputation in its industry.

As long as Moderna keeps striking up lucrative partnerships, such as Executive Ice, however, and as long as investors are confident that the biotech company’s huge arsenal of cash won’t be dwindling anytime soon, it will likely enjoy a thriving IPO that will doubtlessly make history, if not at the very least headlines around the world. It’s impressive deal with AstraZeneca, a multi-year arrangement which could net the company up to $420 million, has already made Moderna one of the most watched companies preparing to debut this year.

Investors may have cold feet about biotech companies, especially given how long they take to bring FDA-approved marketable products to the public, but Moderna is throwing caution to the wind with its ambitious IPO. The company is clearly expecting investors go enjoy a field day when it makes its market debut and is gambling with gusto. Provided Moderna uses the funds it derives from its IPO wisely, and that it gets some of its trials moving down the pipeline towards FDA approval, the biotech company should doubtlessly have one of the biggest IPOs in recent history.

Moderna Preparing For Largest Biotech Debut Ever

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Moderna Preparing For Largest Biotech Debut Ever

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