Moderna and Flagship Pioneering: Noubar Afeyan

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From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Noubar Afeyan's understanding of risk led to a life-saving vaccine and to the spectacular rise of Moderna, now one of the biggest biotech companies in the world.

Innovation and risk are inextricably linked. You can't innovate without taking a risk. The calculation any entrepreneur has to make, of course, is how much of a risk to take. One of the greatest risk-takers in American history was Thomas Edison. His team of engineers invented the lightbulb, the phonograph, the motion-picture camera, and Edison held more than a thousand patents. But, to create these world-changing inventions, Edison's team had to fail more than it succeeded. Edison famously once said, "I have not failed 10,000 times. I've successfully found 10,000 ways that will not work." It's why we don't talk about Edison's talking doll, or his electric pen, or the electrographic vote recorder, because despite massive investments of time and capital, those ideas failed. But, the risk was necessary, and those failures often led Edison's engineers down paths that would lead to totally different ideas. It's an approach that's helped to make Flagship Pioneering among the most successful biotech venture firms in the world. And let me just pause to explain all this for a moment because this episode is largely about the founding of Moderna and the man behind it, Noubar Afeyan. Moderna, as many of you know, created one of the major and most important COVID vaccines. But Moderna, the company, came out of that larger organization called Flagship. Noubar Afeyan founded Flagship Pioneering back in 1999, and the idea was to do three things all under one roof. The first, to raise lots of money to invest in innovative biotech and life sciences research. The second, to identify promising researchers and help to incubate new companies. And the third, to help manage and grow those companies. Flagship Pioneering has incubated more than 100 companies. Some of them are no longer operating, but many are thriving, including, best known, Moderna. Moderna was founded in 2010, and it's already one of the largest biotech companies on Earth. Much of that success, of course, has to do with the breakthrough technology that led to the COVID vaccine. But Moderna didn't intend to become a vaccine maker. In fact, in December of 2020, it was not equipped to mass produce vaccines. But the company had already spent billions of dollars on research around a new type of technology using mRNA molecules. And it just so happened that because of the research Moderna had been doing, it was perfectly placed to come up with a vaccine to fight the coronavirus. The story of how Noubar helped to build Moderna is also the story of how he co-founded dozens of other innovative biotech companies and the huge risks he took along the way. Noubar was born in Beirut in Lebanon. Both of his parents are Armenian by descent. His father had a thriving business importing plastics in Beirut. His mother was a trained concert pianist. But by 1975, sectarian violence had broken out in Lebanon and the country was soon to be engulfed in a long civil war.

Yeah. And I know, Noubar, that your dad had this thriving business. He would import plastic products into Beirut. But I guess around this time in 1975, you were about 13, the family left. You fled from Lebanon to Montreal in Canada. That was a huge, risky decision for your dad. So, what did he do when you got to Montreal? And what did the family leave behind?

That's amazing because your dad must have been in his 40s by then. When you got to Montreal, I'm assuming you were not fluent in French. So, you probably had to go to school. Presumably it was taught in French.

Did you grow up going to church every Sunday? Obviously the Armenian Orthodox Church is an ancient church. It goes back to Byzantine times. Did you grow up going to church every Sunday?

All right. So you are in Montreal and I know that you went on to study chemical engineering at McGill in Montreal. But then you went to graduate school in the US. You went to MIT in Boston. And from what I read, that is where you began to focus on biochemical engineering, right?

All right. So, you've got this PhD in biochemical engineering and you can probably go work for a huge chemical company. I'm sure there were a lot of offers out there, but you decided that you wanted to maybe start your own thing and I have to assume that comes from your dad who was an entrepreneur, right? I mean, you thought, 'Yeah, well, let me. Why don't I start my own business?'

We're just going to start something in biotech and we'll kind of figure it out. But it is amazing to me that that meeting with David Packard because he was, of course, everybody knows that name now, right? Hewlett-Packard. But it really sounds like that encounter kind of started to get the gears in your head turning.

I mean he started that business with like 550 bucks. Well, it was 1939 or whatever, but still wasn't that much money.

You would have been guaranteed riches and financially secure and all those things, yeah.

So, the story I've read and it's just a bare-bones version is that you decided to go seek funding for your venture. You didn't quite know what it was going to be, but it's going to be a biotech company and you started to reach out to venture capitalists at the time in '87 and that you didn't really know what that meant, but you knew that you had to raise some money. And how did those meetings go?

So, how did you find the money to start a business? Because biotech is cash intensive. Where did you get the capital?

Yeah. And how did you get it?

Wow. This company you founded was called PerSeptive Biosystems. And I'm going to sort of butcher this but I'm going to try to explain this in a way that hopefully most of us can understand but basically you produced equipment that separated and identified proteins which is the basis of most biotechnology drugs. This is what you need to separate these proteins and they need to be intact in order for the research to be engaged.

Noubar, I've interviewed lots of people from the creative arts world, from the scientific community, different spaces where they weren't sort of entrepreneurs or business people, and had to really figure out how to structure a business. And sometimes they made mistakes. How did you know how to do that? I mean, you had partners and people involved, and even with your investors, you're 24, 25. If they were like, 'Yeah, we'll give you $100,000 for 10% of the business.' Like, how did you know what it was worth and how to structure it? And did you go to anybody for help?

And as you were developing more products for PerSeptive Biosystems, who were your customers? I mean, obviously most of the people I talk to are making consumer products, so they're like today it's social media marketing and going on Instagram to find influencers, but this is not what you did then, obviously. Who were you selling your equipment to?

As the company grew, because I think within 10 years it was acquired, right? It was a stock swap. It was a $360 million stock acquisition. And often times an acquisition means that the founders who are acquired join the parent company now and you did. I think the company was called Applera. This was the late '90s and if people remember, this was a time when there was an obsessive race to map the human genome and you were right there at ground zero of that.

So this would be like a Bloomberg terminal for biotech companies. The idea would be like every finance firm had a Bloomberg terminal, every biotech company would have these terminals and you could access this proprietary information.

It's amazing because you now spent a year being involved in one of the most groundbreaking projects in the 20th century, mapping the human genome, which clearly you knew was going to have a huge impact on medicine. Did that experience once again get the gears turning in your head thinking there's an opportunity from this for me to pursue?

When we come back in just a moment, how the new era of molecular biology just happened to match up with Noubar's idea for an entirely new type of biotech company. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.

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Hey, welcome back to How I Built This. I'm Guy Raz. So, it's the late 1990s and Noubar Afeyan is working at a biotech company called Alnylam and he's involved in lots of different projects. But over time, Noubar is getting more and more interested in promoting a whole range of new promising molecular biology, research that doesn't necessarily have immediate commercial value. And so, eventually, he leaves Alnylam to try to reimagine the way biotech companies are created.

All right. So, this was Flagship Ventures, now called Flagship Pioneering. This is what you really launch in 2000. And this was, to be clear, very different from and still is very different from what incubators are. Usually, incubators are incubators and venture capital is venture capital. And this idea was different. I mean, the idea was that everything would happen under one roof.

The research, the development, the teams, the businesses, almost like an MIT Media Lab, but that was a private business.

Mhm.

Sure.

Yeah.

Noubar, obviously by this point when you started Flagship, you were a known entity. People knew the story of your previous businesses. But how did you recruit talent to come to Flagship and to take that leap that you guys would have their back.

You had a huge advantage in that you were in one of the biotech capitals of the world, which is the Boston area. But I imagine you were recruiting probably promising graduate students and scientists. Do I have this right that you would basically pair them up with people who could help to navigate their businesses? So, presumably people with science backgrounds, but who could do the business side of it?

From little company to company and kind of help them?

Help guide them. Yeah.

And just to be clear, most of these companies that you were hatching and forming, they were focused on biomedical research mainly?

Got it. So there are a lot of origin stories around mRNA research that go back to the 70s and the 80s and Bob Langer who is one of the best biotechnologists in the world and he would go on to become a Moderna co-founder. He was doing all kinds of research. And in the early 2000s, I read a story about some researchers from University of Pennsylvania who were doing some pretty groundbreaking work around mRNA. They went to a scientific conference and almost nobody, this is 20 years ago, almost nobody in the scientific community was taking this seriously. When did you first, what did mRNA research first come onto your radar?

It's amazing. I mean, the idea was that you had was could we basically make medicines where you would inject them in order for the body to develop the proteins, right? To combat the ailment or whatever it is. That was the question that was being asked at the time.

And the answer to that question generally was no, that's ridiculous. Is that right? More or less?

I wanted to ask you about doubt. I mean, I understand that Flagship was really designed to do exactly this kind of work, to take on something risky and kind of weird, and maybe the scientific consensus was not, there was no consensus, the community was skeptical of this research. I understand that Flagship was designed for this very reason, in order to take some risks that might fail. But I'm curious, this was going to require a lot of money, a lot of time, and a lot of uncertainty. And most, I mean, you had great researchers and scientists, didn't anybody in Flagship that you talked to say, 'This is not what we should pursue.' Didn't anybody push back? Didn't you have doubts?

But, what I'm trying to understand, Noubar, is this could have been a very different story, right? The story of Moderna could have been a story of folly. Of a bunch of well-funded scientists who just spent all of this money, and it was a disaster. And we could have been telling that story at business schools. I mean, there's always a possibility that would have been the story. And by green-lighting Moderna, you had to consider certain factors. But if most of the scientific community was saying, 'This is not worth doing,' why did you and your team think differently?

How many of those other Modernas didn't make it? You said we launched 100.

Yeah.

When we come back in just a moment, one version of success that Noubar did not anticipate was how Moderna would develop a critical vaccine at a critical time and do it unbelievably fast. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

Hey, welcome back to How I Built This. I'm Guy Raz. So, we're getting to the part of the story where Moderna will go from being a biotech company you probably never heard of to a household name for tens of millions of people. And it's easy to forget that when the company launched in 2010, the idea was to find the best use for the new research around mRNA. And at that time, it wasn't at all clear that the best use would be a vaccine.

Right.

Yeah.

Yeah.

You went public in 2018. You still hadn't sold any products, really. You had an operating loss of almost $400 million. 2019, still you, this is 9 years in to Moderna. You had not, I believe you had not sold anything yet, and you had almost half a billion dollars in losses. But none of that it seems phased you or the team at all. That was not even a concern.

Okay, let's go back to the timeline for a moment because it's almost like it plays out like a movie, like a thriller. From what I understand, I think it was like January 6th, 2020, Stéphane Bancel, who's the CEO of Moderna, he found out about this virus in China and that it was probably a coronavirus. And I think a few days later the first death was publicly announced in China. And at that point, I think that's January 11th, 2020, almost no one in the US was talking about this seriously or in a big way. I mean, probably a few people, but almost nobody. Do you remember this story coming onto your radar around that time?

I mean, I think virtually overnight you and Stéphane decided to pursue this, to try and do this, to manufacture the vaccine.

How long before you had a prototype for the vaccine? Because from what I understand, the fastest time it took to get a vaccine from development to market was the MMR, one of these childhood things, measles. It was like 5 years or something. So in this case, how quickly were you able to develop a prototype?

Of the coronavirus.

Two days from the time that it was published, you basically had a computer model of the vaccine.

I mean, at the time, did you know that if it just got into clinical trials, it would be quickly shown to be effective? Like, did you know that from the computer models?

Yeah.

In March of 2020, you began clinical trials with the NIH. It was I think a nurse in Seattle that same month, March of 2020. Your father-in-law died of COVID.

Yeah, in Easter.

I was devastated because his wife, my mother-in-law, also got quite sick, and we thought we're going to lose her as well. They were both in their early 90s. So, it was very, very tough. Also because we were engaged in this day-to-day battle and on the one hand I was excited by what we were able to do and on the other hand when you see, in his case ultimately a life lost, it's just a... Anyway, it was quite personal to me. Let me just say that I have not lost a family member during the time of iPhones and I can tell you that being on a FaceTime with somebody close to you when they're dying is a miserable experience. So, it was very tough and it certainly brought into sharp focus what this was all about. Certainly many people lost lives and many more are suffering even today with the downstream effects of this disease.

But you knew already from that first clinical trial that the news was good. That the initial results from phase one were good but you had to go through two more phases and the public were not privy to that information for a variety of reasons, right? You could not come out and say, 'Hey, phase one looks great. These are the results.' There are rules against that, right?

Yeah.

By the end of the third trial, phase three end of November, and you announced that the preliminary data showed that the efficacy rate was 94%. Did that surprise you? Even you?

And in parallel to the testing, presumably you had to ramp up your ability to produce this vaccine.

How did you do that? How did you go from a capacity to make a thousand or 10,000 to a billion in less than a year?

What does this mean now? What does it mean for the development of other vaccines or other treatments? I mean, has this at least to the scientific community proved that you can really maybe develop a long-lasting flu vaccine or a malaria vaccine or an HIV vaccine? Is that within the realm of possibility?

It's probably remarkable to younger people today that everybody had the chicken pox not that long ago. And no kids don't get it anymore because there's a vaccine. Is there a potential future where there's no such thing as seasonal flu?

Noubar, when you think about the arc of your career and your life, a chance meeting with David Packard who kind of inspires you to think about maybe you starting your own thing, taking a gamble on mRNA, which would lead to the fastest vaccine ever manufactured in history, to now, Moderna was founded 10 years ago. Its market cap the last I checked was almost $170 billion. And that's just one of the businesses you started. It's a pretty remarkable story. How much of where you are today do you attribute to how hard you worked and how much do you think has to do with just luck?

That's Noubar Afeyan. He's co-founder and chairman of Moderna. He's also the founder and CEO of Flagship Pioneering. Today, Moderna is probably the most famous biotech company Noubar has developed, but since it was founded over 20 years ago, Flagship Pioneering has helped launch more than 100 other companies. And of those, 30 are now publicly traded. Thanks so much for listening to the show this week. If you're not yet a subscriber, please do subscribe wherever you get your podcasts. If you want to write to us, our email address is [email protected]. And if you want to follow us on Twitter, we're @guyraz or @howibuildthis. You can also find us on Instagram. That's @howibuildthisnpr or my personal account @guy.raz. This episode was produced by Casey Herman with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Claire Morishima. Our production staff includes JC Howard, James Delahousie, Rachel Faulkner, Liz Metzger, Julia Carney, Farah Safari, Elaine Coats, Annelise Over, and Harrison V.J. Choy. Jeff Rogers is our executive producer. I'm Guy Raz and you've been listening to How I Built This. This is NPR.