Moderna CEO Stephane Bancel sold more than $400 million in company stock during the pandemic

Moderna’s chief executive, Stephane Bancel, has sold $408 million of the company’s stock since the start of the pandemic — about $3.6 million a week on average — as the company’s stock skyrocketed thanks to the expansion. develop and launch a Covid vaccine, according to a CNBC analysis of the company’s stock filings.

The Cambridge, Massachusetts biotech company and its French CEO were not widely known outside of biotech circles before the pandemic. However, both became groundbreaking success stories as Moderna quickly developed a two-dose Covid vaccine in partnership with the National Institutes of Health and with taxpayer support Operation Warp Speed.

Moderna’s shots are now the second most commonly used Covid vaccine in the US after Pfizer, with more than 209 million doses given, according to the Centers for Disease Control and Prevention.

Courtney Yu, Equilar’s director of research, said the value of Bancel’s sales speaks volumes about how well the company is doing to the success of the vaccine. Equilar, which provides executive compensation data, independently verified the value of Bancel’s revenue.

Shares of Moderna are up 614% since First announcement on January 23, 2020 that it received funding from the Coalition of Epidemic Preparedness Initiatives to develop a coronavirus vaccine. The FDA granted emergency approval for Moderna’s vaccine in December 2020.

Moderna’s Covid vaccine remains the biotech company’s only commercial product. Photos made Bancel a billionaire with an estimated net worth of over $5.3 billion in corporate equity alone – based on his reported holdings as of March 1 and Wednesday’s closing price – and created a windfall for investors. 12-year-old company, listed in December 2018, recorded its first profit last year – $12.2 billion – on $17.7 billion in sales of Covid vaccines. It projects a minimum of $19 billion in sales from its autographed photos this year.

The $408 million that Bancel has withdrawn since January 2020 is made through the so-called 10b5-1 stock plans passed before the 2018 pandemic. These plans allow executives to The practice of selling a predetermined number of shares, conducted by a broker, at regular intervals to avoid the possibility of insider trading. The Securities and Exchange Commission passed rule 10b5-1 more than 20 years ago to give executives a way to cash out some of their stock without facing charges. about insider trading and potential legal action.

Moderna executives are required to trade under the 10b5-1 plan, in which shares are sold during open trading in accordance with the company’s internal trading policy, according to the company’s 2022 proxy report. Moderna.

“It’s seen as a safe harbor against being sued,” said David Larcker, a professor of accounting at the Stanford Graduate School of Business who has studied 10b5-1 plans.

completely, Bancel has sold more than 2.8 million shares since the end of January 2020 under a trading plan adopted before the pandemic. From Moderna’s IPO to the announcement of CEPI’s funding for the vaccine, he sold about $3.2 million in stock.

The SEC has several rules governing 10b5-1 plans, in addition to the requirement that they cannot be passed or modified in the possession of material non-public information. Because there are so few rules, plans are flexible and vary from company to company.

“The SEC rules are pretty lax around plans right now,” said Daniel Taylor, an accounting professor at the Wharton School. Taylor said that although some companies, such as Moderna, require executives to trade under 10b5-1 plans as a form of “good corporate hygiene,” others let executives decide whether they adopt such a plan.

Although 10b5-1 plans are supposed to prevent insider trading, they are controversial due to lack of transparency. Companies with executives who trade under 10b5-1 plans are not required to disclose to the SEC the contents of those plans.

Moderna declined to comment on whether it would publicly disclose details of Bancel’s 10b5-1 plan, although his stock sale filings provide the date his trading plan was approved. all in December 2018 with revisions made in September 2019 and May 2020. Moderna says Bancel’s 10b5-1 Trading Program was last revised in May 2021 to increase activity his philanthropy. Bancel has donated hundreds of thousands of shares to charity.

“There are no mandatory disclosure requirements for 10b5-1 plans of any kind,” Taylor said.

Bancel typically sells 19,000 shares per week under its 10b5-1 plan, averaging about $3.6 million every seven days, according to a CNBC analysis of the company’s stock filings. Common shares were sold in two tranches, 9,000 shares directly owned by Bancel and 10,000 shares owned indirectly through OCHA limited liability company. Bancel has sold approximately 861,000 shares he directly owns for a total value of approximately $153 million since the end of January 2020.

Bancel is the majority equity owner and sole managing member of OCHA, according to SEC filings. He has sold about 972,000 shares of Moderna shares that he owns indirectly through OCHA for a total of about $170 million since late January 2020. OCHA is an investment company, according to company filings in Massachusetts, where it have branches.

OCHA is registered in Delaware, does not require companies to disclose the nature of their business upon incorporation, and registers with the state. Bancel declined to provide any further details about the company through a Moderna spokesperson.

Bancel has also sold more than 191,000 shares of stock he owns indirectly through Boston Biotech Ventures for a total value of approximately $13 million as of January 2020. Boston Biotech Ventures is an investment offering limited liability company. angels for Boston-area startups and patent filings for new companies, according to company filings in Massachusetts. Bancel is the majority equity holder and sole managing member of Boston Biotech Ventures, according to SEC filings.

Bancel also has an independent trust for its children, which has sold about 752,000 Moderna shares for a total value of about $67 million since the end of January 2020.

In February 2021, Democratic Sentiments Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland and Sherrod Brown of Ohio called for the SEC to reform rule 10b5-1 to provide more transparency. Last December, the SEC suggest some changes such as requiring companies to disclose in their quarterly reports the adoption or termination of 10b5-1 plans and the terms of stock purchase agreements. Those changes have yet to be approved.

“The reason people are so concerned is because this lack of transparency is mandated by the SEC,” Taylor said. “If [Bancel] revealed his plans in 2018, are we really interested in his stuff? I think the answer is probably no. “