As Covid-19 started to spread across China in early 2020, Noubar Afeyan, chair of Moderna, received a telephone call. It was his chief executive telling him that senior public health officials had asked if the biotech’s experimental vaccine delivery technology could help fight the virus.
The request came at an awkward time for the decade-old pharmaceutical and biotechnology company, which only days before had outlined to investors its intended work programme focusing on a number of other drugs. It still had no approved products or meaningful revenues — $8.4mn for the three months to March 31, 2020, half that for the same period the previous year. Diverting resources towards a virus that was not yet considered a global threat was a calculated risk. But the prospect intrigued Afeyan and his CEO Stéphane Bancel. They agreed on the call that they would join what became a global race to develop a Covid vaccine.
“We didn’t know Covid was going to be a big deal but we knew our mRNA platform was uniquely tailored for very rapid execution,” says Afeyan. The phone call “was an intense discussion”.
Moderna’s pivot to tackle Covid paid off. Within 11 months it had developed and manufactured a vaccine called Spikevax, which saved millions of lives, helped the world emerge from lockdown and transformed the US company into a $60bn biopharma group.
This success, and similar efforts by German rival BioNTech and Pfizer, proved the potential of messenger RNA — a genetic material that transports messages from our DNA to protein-making cells within the body — to deliver vaccines. Moderna is now developing dozens of others, targeting illnesses from HIV to cancer.
The breakthrough made Afeyan a billionaire and encouraged the 59-year-old entrepreneur to scale up Flagship Pioneering — a unique biotech incubator that invents, funds and develops its own technology.
Founded in 1999 by Afeyan, Flagship has helped launch more than 70 companies. Some investors believe it is revolutionising the entrepreneurial process in biotech, linking fundamental research with business expertise and investment. Moderna is the most famous Flagship success but Afeyan has founded dozens of companies. Twelve of Flagship’s current crop of 41 are publicly listed, including Denali Therapeutics, a biotech developing drugs to treat neurodegenerative diseases such as Parkinson’s.
Afeyan says Flagship focuses on many different ideas at once rather than a single project, in a similar way to venture capital investors. To achieve this, Afeyan and Flagship’s team of 300 scientists, bankers, executives and other staff begin the process by asking a series of “what if” questions related to basic science. When they strike on an idea that could become a viable business they secure intellectual property rights — last year Flagship filed 400-plus patents — and invest between $1mn to $2mn to prove the business model before establishing a company.
Indigo Agriculture, for example, which is developing technology to boost crop yields and profitability, started as a simple hypothesis that putting microbes on plants could affect their health, says Afeyan. Many Flagship start-ups do not progress before they are killed by the team in a “Darwinian evolutionary process” to select winners, he says. But the companies that survive can draw on the pool of capital amassed following a $3.4bn fundraising in June 2021.
Afeyan says this centralised fundraising enables Flagship to retain control of portfolio companies and it typically owns between 50-60 per cent of shares when they go public. This financial firepower can sustain companies during cyclical downturns — currently Nasdaq’s biotech index is down 27 per cent over the past year, precipitated by the rise in interest rates pushing speculative investors out of the sector.
During a tour of Flagship’s offices in Cambridge, Massachusetts — not far from MIT, where he earned a PhD in biochemical engineering in 1987 — Afeyan says a key part of Flagship’s success can be attributed to its unique culture, which focuses around the team rather than the individual.
“Entrepreneurship is often about hero-making rather than the glorification of the process . . . But you have a higher chance of success, can achieve things faster and by spending less money as an organisation, rather than as a bunch of individuals doing heroic things,” he says.
CEO Bancel, who Afeyan persuaded to join Moderna as chief executive a decade ago, describes his chair as a “renaissance man”: a “unique blend” of scientist, businessman and entrepreneur. “Most people think of Noubar as a venture capitalist but first and foremost he is an entrepreneur.”
Afeyan says his Armenian heritage, growing up as a boy in war-torn Beirut, and immigrant status in the US — where he came to live in 1983 and obtained citizenship in 2008 — honed his entrepreneurial spirit. His great aunt was one of the most significant influences in his life. “[She] lived through the [Armenian] genocide and her brothers [one of whom is Afeyan’s paternal grandfather] were taken away to be killed, not once but twice . . . The reason I’m here is they escaped that second time,” says Afeyan. “These experiences motivated me to dare to go to the edges of stuff.”
He credits a chance meeting with David Packard, the co-founder of Hewlett-Packard, in the mid-1980s for inspiring him to set up a company making instruments for the biotech industry. A few years later Afeyan founded PerSeptive Biosystems, which he sold for $360mn in 1997, providing the capital to found what is now Flagship.
Afeyan describes steering Moderna’s board during the race to develop a Covid vaccine as a succession of “big challenges”. However, the science of mRNA, which is the aspect most people get excited about, is not, he says, in the top three challenges because of the decade of research conducted by the company’s scientists.
Setting up and running clinical trials of 30,000 people in lightning-fast time was a far greater test. The company had never conducted a trial with more than a couple of hundred subjects, he says. The other challenges were producing more than 1bn doses of the vaccine when you haven’t made more than a few thousand before, and ensuring that other work programmes were not shut down.
“There is the issue of how you govern with that level of uncertainty and when making decisions involves hundreds of millions of dollars,” adds Afeyan.
There have also been other hiccups. In May Moderna’s chief financial officer Jorge Gomez left after just one day in the job, as it emerged that his former employer, dental equipment manufacturer Dentsply Sirona, was investigating former senior managers over financial reporting.
Three questions for Noubar Afeyan
Who is your leadership hero?
Lee Kuan Yew, the father of modern Singapore, who embodied the notion of thinking future backwards as opposed to present forwards. He had to paint a vision and insist it was reachable.
If you were not a founder, what would you be?
I would make movies — from screenwriting right through to producing. Imagination and creativity are what fuel me, and I love seeing an imagined story brought to life. I also love complex projects and solving the problems along the way that allow them to reach fruition.
What was the first leadership lesson you learnt?
Hiring the best people is important, but getting the best out of people is the difference maker at great companies. When I first started, I was very focused on intelligence, education and experience, as opposed to innate qualities like creativity, bravery, curiosity, team spirit. You need both, obviously, but inspiring people to lead and perform in ways they didn’t know they were capable of leads to great teams, and big breakthroughs.
Critics believe Moderna should have undertaken better due diligence before appointing Gomez. They have also suggested other recent senior departures could be linked to past allegations of a “caustic” work environment, a claim vigorously denied by Afeyan.
“I can’t think of a different approach that we could have used,” Afeyan says, when asked about the appointment of Gomez. He says non-disclosure rules prevented Gomez or Dentsply from revealing the investigation before his appointment. He says it is wrong to conflate the departure of Gomez with claims of a problematic work culture, first reported by Stat, a health news website, in 2016, adding that many of the people who reported such allegations never believed the company’s vaccine would work.
“The leadership changes . . . are completely commensurate with the rapid growth and scale that Moderna has undergone during the pandemic, going from a relatively unknown company before Covid, employing about 700 people, to 3,500 people today,” he says.
Moderna’s challenges are not over as it still must prove to investors that it can use its mRNA platform to develop other drugs. Asked if Moderna should remain a one product company? “Nonsense,” he says.
“We have 46 programmes and fortunately we now have the financial resources to prosecute them all.
“I can’t tell you which drugs in our mRNA platform are going to be approved first . . . but I’m very confident some of the 46 drug candidates in our pipeline will be successful.”
