Covid-19 spread rapidly across China in the early 2020s, and Noubar Afeyan (chair of ModernaHe received a phone 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 was made at a very awkward time by the pharmaceutical and biotechnology company that has been around for ten years. Just days prior, it had presented to investors its planned work programme which would focus on a few 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. The calculated risk of diverting resources to a virus that is not considered a global threat was taken. But the prospect intrigued Afeyan and his CEO Stéphane Bancel. They agreed to join the global race for 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. Spikevax was developed and manufactured by Moderna within eleven months. It saved millions of people’s lives and made the US a $60bn biopharma company.
This success, as well as similar efforts by German counterparts, is a great example of what can be done. BioNTech 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 currently developing many more, focusing on cancer and HIV.
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.
Flagship was founded in 1999 by Afeyan and has assisted more than 70 companies launch. Flagship is believed to be revolutionizing the biotech startup process by linking business expertise with fundamental research. Moderna is Flagship’s most well-known success story, but Afeyan also founded numerous 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 claims Flagship is more focused on multiple ideas than one project. This is similar 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 instance, is a company that develops technology to increase crop yields and profitability. It started out as a hypothesis that microbes could harm plants’ health. Many Flagship start-ups do not progress before they are killed by the team in a “Darwinian evolutionary process” to select winners, he says. The companies that survive are able to draw from the capital pool accumulated in June 2021 after a $3.4bn fundraising.
Afeyan claims that Flagship can retain control over portfolio companies through centralised fundraising. It typically holds between 50-60% of shares when the company goes public. This financial firepower can sustain companies during cyclical downturns — currently Nasdaq’s biotech index is down 27 per cent over the past year, The rise in interest rates has led to a dramatic increaseThe sector is being pushed out by speculative investors.
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 an important influence in his childhood. “[She]Lived through the [Armenian]genocide and her brother [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 his inspiration for starting a company to make instruments for the biotech market to David Packard, who he met in the mid-1980s. Afeyan then founded PerSeptive Biosystems a few years later, which he sold in 1997 for $360mn. This gave him the capital to start 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.
The task of setting up and running clinical trials for 30,000 people in lightning fast times was much more difficult. He says that the company had never done a trial with more then a few hundred subjects. 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.
Other hiccups have also occurred. 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 hero in leadership?
Lee Kuan Yew, the father and founder of modern Singapore, believed in the idea of looking backwards rather than forwards. He had to project a vision, and insist that it was possible.
What would you be if you weren’t founder?
I would make movies — from screenwriting right through to producing. I am driven by imagination and creativity. I love to see a story come to life. Complex projects and finding solutions to them are what I enjoy.
What was your first lesson in leadership?
While it is important to hire top talent, getting the best employees is even more important. OutGreat companies are built on the contributions of great people. In my first job, I was more focused on intelligence, education, and experience than on innate talents like creativity, courage, and 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 feel Moderna should have done more research before appointing Gomez. They also suggested that recent senior departures could have been linked to past allegations about a “caustic” work environmentAfeyan strongly denied this claim.
“I can’t think of a different approach that we could have used,” Afeyan says, when asked about the appointment of Gomez. He claims that Gomez and Dentsply did not disclose the investigation in violation of confidentiality rules before his appointment. He claims it is wrong to confound Gomez’s departure with claims of a dysfunctional work culture, first reported in Stat, a news site about health, 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. When Moderna was asked if it should be a one-product company, he replied: “Nonsense.” “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.”