Welcome to The Long Run. This is a podcast for biotech adventurers. I'm your host, Luke Timberman.
Today's guest is Stéphane Bancel. He's the CEO of Cambridge, Massachusetts-based Moderna Therapeutics.
The company and the man are somewhat controversial. Google Bancel's name and the People Also Search For window shows famous entrepreneurs like Jeff Bezos, Elon Musk, and Elizabeth Holmes of Theranos infamy.
Each situation for those entrepreneurs is different and the comparisons don't hold much water, but a few common themes do stand out. These are people with big technology ideas. They've attracted big investment, have lofty rhetoric, and a penchant for keeping a lot of crucial technology details secret. They are all lightning rods for critics.
Now, the idea at Moderna is to turn messenger RNA molecules into drugs themselves. Inject the mRNA code, allow it to get inside cells to produce fully functioning proteins, and voilà. As Bancel likes to say, it's like software code that enables humans to become their own protein drug factories. Dazzling, right?
Fantasizing as the concept is, it has long been dismissed as sci-fi. mRNA, for starters, can't get into cells and make fully functioning proteins without triggering autoimmune reactions, to raise one common objection. Yet, Moderna has been able to convince enough investors and partners to throw $2 billion behind its efforts over the last 8 years to create this new modality of treatment. Most of the money arrived before Moderna had any data in humans. And for years, it divulged little about its technology or its preclinical data at scientific conferences. That naturally bred suspicion and, truth be told, some envy.
In this episode, I talk a lot with Bancel about his life, career arc, and influences that shape the way he thinks about Moderna. In the latter part of the show, we talk about some of the particular ups and downs and lessons learned at the company. This episode was recorded at the recent J.P. Morgan Healthcare Conference in San Francisco. And I'll say Bancel has a French accent and I occasionally misunderstand a word he says here or there, but I don't think you'll have any trouble listening and understanding what he says. Before we dive in, a word from the sponsor of The Long Run, Preage Biosciences.
Subscribers to the Timberman Report newsletter know that I write a lot about cancer R&D. All of the CEOs I talk to are under pressure to get clinical data as soon as humanly possible. Investors demand it and patients deserve it. Phase one clinical trials have traditionally been the very first time that data from patients becomes available and we all know data from patients is what really matters.
Preage is working to improve this approach. I've covered the company since its early days. They have been working on creating a way for researchers to obtain human data on investigational therapies a year or two before they could with a traditional phase one trial. The business is simple. They're working with biopharma companies to use Preage's patented device that enables intratumoral microdosing of experimental cancer drugs. And here's the thing, it lets researchers assess several drugs at once against a single tumor while the tumor is still in the patient. The device is being used in a clinical trial right now. To learn more, go to preagebio.com.
Lastly, thanks to you for listening. If you work in biotech and like this show, tell your friends. Please leave a comment on iTunes, your favorite podcast app, or on social media. If you like these interviews, you'll also love reading the Timberman Report. Individuals can subscribe there for $149 a year to get original, analytical, thought-provoking articles that I produce year-round. Groups that would like to obtain internal sharing rights can also get a group discount. Go to timbermanreport.com/subscribe to learn more. Now, join me and Stéphane Bancel for The Long Run.
So, I'm here at the J.P. Morgan Healthcare Conference with Stéphane Bancel, the co-founder and CEO of Moderna Therapeutics, a messenger RNA therapeutics developer. Welcome to The Long Run.
Thank you. Thank you for having me.
So, Stéphane, you and I have been at this conference, I think we've met informally over the years, probably four or five years now. It's a tradition, I guess.
And this is always an opportunity for companies like yours to kind of lay out some goals for the year, but also reflect a bit on, you know, what you accomplished in the past year. So what's your story here at J.P. Morgan in 2018?
Yeah. So I think the big story for Moderna is the company transformed tremendously in 2017. We put six new drugs in clinical trial. So today we have 10 drugs in clinical trial, which is a great number and represents, I think, amazing work that the team has done. And we have nine additional drugs, so a total of 19, nine additional drugs that are on the way to move to the clinic. And so the big story is around therapeutics. I think, as you know, we built Moderna going one vertical after the other. We started in vaccines back in 2015, our first vertical to move to a clinic, but '17 was really a big year for therapeutics. We had our first phase one for therapeutics that was successful with AstraZeneca for VEGF in the heart, met primary secondary endpoint. This is moving to phase two any week now. We had our first oncology therapeutics moving to the clinic. We had our personalized cancer vaccine moving to a clinic, and we enabled drugs to be delivered inside the liver, which allowed us to do a lot of genetic, you know, disease that are enabled today. And so that's really therapeutics is a big world for Moderna in 2017.
Okay. So, before we get into some more of the specifics of the Moderna story, you know, you're high profile, you've got some controversy, you've had some ups and downs. We'll cover that. But first I want to ask just a little bit about you.
Where, you know, people may tell the accent, you're from France.
Tell me about where you come from. What did your parents do when you were a kid?
Yes. So, I was born and raised in the south of France in Marseille. So, on the sea. So, I literally, the first photo of me after the clinic is on a sailing boat in a little bassinet, you know, in the cockpit of a sailing boat because my dad is a sailing junkie. And so I grew up, you know, my mom is a doctor. She's retired now. My dad was an engineer, also retired now. They both are cancer survivors. And so I just had a great childhood, you know, super fun to live in the south of France. You know, you can go sailing anytime you want or to a beach, you know, windsurfing. You get in the car two hours and you're in the Alps. So like you can ski really nicely. And close to Italy and Spain. So a lot of kind of long weekends in Italy and Spain. So, so, so great.
Yeah, I have a younger brother. He's actually here too this week. He's running a biotech company in Paris.
Okay. Okay. So, it runs in the family.
He doesn't. He just happened to be like this.
So, how did you get excited about science or the pharmaceutical business?
So, it's interesting because I took a very strange road in the sense I really fell into it as a kid. I used to code when I was 12, 13 years old.
So, we should say how old you are here. You're mid-40s, right?
Okay. So that puts your childhood in the '80s.
In the '80s, exactly. So, you know, I had an Apple IIc as one of my first computers, which was a big deal because it was super expensive. And so I already got into, I would say, technology with a capital T through the door of it. And I think because my mom is an MD, I kind of didn't really study biology much in high school. I had pretty bad grades actually in biology in high school.
You were a bit rebellious, kind of.
Yes. And so I went to engineering school and I loved chemistry. I just loved chemistry. And so I loved biochemistry. And when you do a lot of biochemistry and you do that in the early '90s, you do a lot of genetics. And so I went back into biology through genetics, through molecular biology. So on the side, I was in engineering school in Paris for undergrad. On the side, I took a lot of classes in genetics at the University of Biology and Medicine next to my engineering school in Paris. And then I came to the US to do a Master of Science at Minnesota in biochemical engineering. So basically, I grew antibodies in CHO cells, E. coli, yeast systems, you know, at the bench. I realized I was not made to do research. It was just the cycle time, the speed clock was not really made for me. And so I just went for a master's and then I went to work.
So you got your master's and then what?
So then, in the meantime, I had been to Japan for an internship and I fell in love with Japan. And so I found a job in Japan and so I went from Minnesota straight to Tokyo and I lived in Tokyo for almost four years. So I started for a company, a diagnostic company called bioMérieux, which later on, I'm sure we'll get to that, I ended up being CEO of. But so I started to work for that company as a sales rep in Japan selling medical equipment to food and pharma companies in the QC labs to make sure you don't get, you know, bacteria in the food you eat or in pharmaceutical products.
Selling in Japan, do you speak Japanese?
I used to speak pretty good Japanese. Yeah. I know like anything you do in life, you just need a certain set of vocabulary because it's always the same stuff and the same words you use. So I had to work really hard during my undergrad in France, my engineering school. I actually spent most of my time not studying engineering, but studying genetics and learning Japanese.
So, you're not intimidated by these difficult subjects, I guess, that you know.
Yeah. I'm a believer that if you just work hard at something and you spend the hours, you can get pretty good at it. You don't have to be great at it. You can get pretty good at it. And so what happened when I was in Japan, very quickly because I was generating a lot of sales, I was allowed to hire a couple of reps. So I built a team in Japan. And then because Japan was doing really good, I was allowed by the head of Asia Pacific to actually start operations in South Korea, in Shanghai in the '90s, in Australia, in Singapore. So basically I ended up still running Japan but running then the region still based in Tokyo. And after a few years doing that, I said maybe it might be good to get a bit of business education because I was again still, you know, this south of France Marseille engineer who was doing sales and marketing in a fast growing region because, you know, in the '90s Asia was just, you know, rocking. And so I went to business school.
At Harvard. I wanted to go to the US because as being a European, I thought it was not a lot of value for me or not the same value if you want to do it in Europe. And so I thought it was going to be great to both learn and just to be able to just be back in the US again. And so I applied only to US business schools.
Yeah. So I quit bioMérieux with a great discussion, nice transition because school, it was all planned. So I quit bioMérieux. I went two months traveling in Asia with a backpack and then I went to business school.
So you do that for a couple of years and what's your goal there at HBS?
I think, I mean, my goal at school was just learning. I mean, I felt super privileged to be in an environment where, you know, you have super smart people coming from all industries, all lines of work, from, you know, clinicians to lawyers to bankers to consultants to engineers. I mean, you really had everything. And so I just felt like a kid in a candy store and just learning, learning, learning. I'm a very curious guy, so it was just fun to be able to do that. Sometimes I joke to my wife that I wish I could go back again, just for the fun of spending two years and learning stuff and being with smart people. And so what is interesting is I was at HBS, I graduated in May 2000, which, as you know, is when the NASDAQ peaked. And so what was a very funny time at the business school is that everybody wanted to be an entrepreneur, of course, as they always say in the press, you know, just look where the HBS grads are going and most probably that's the worst place to invest because it just becomes, you know, where everybody goes. And so I thought about it a little bit and then I think it's a contrarian side in me and I love healthcare. I really love my years at BU. I love, you know, what I've learned, you know, in grad school and so on. And so if everybody's going to the tech world and plus I started to build a bit of understanding of the healthcare industry, I said, why don't I stay in healthcare? Nobody's going to healthcare. So it was a very funny time because all the big pharma companies at the time were recruiting on campus, but nobody was going. And so I talked to a few companies like, you know, Pfizer, Medtronic, and Lilly, and I ended up at Lilly just because I loved the people there. I think I had, I don't remember exactly, but I think I had a better offer at Pfizer, but I just loved the people at Lilly. I loved the products they had, and so I joined Lilly.
So were you the only member of the HBS class?
I think we were two. It was two of us.
That's usually like maybe recruit 10 or 15 a year.
I think that year was two of us.
Usually there's investment banking, consulting, those are popular as well as dot-com entrepreneurship. But at that time the human genome project was in the news a lot and coming down the home stretch, but pharma wasn't really using this kind of information.
And the thing that was interesting is I intuitively initially wanted to go to a small company. And then my uncle, my mom's brother, has been my mentor all my career. He made his career in the tech world. He told me, don't go small. He's like, go big. I'm like, why would I go to a big company? Is it going to be boring? You know, bioMérieux still had two or three thousand people at the time when I was in Asia working for them. He was not started but still small. And he said, look, you have a lot of things to learn. You're going to learn a lot of things in big companies. You're going to have, you know, great bosses, going to see big problems, you know, managing scale. And that's something that you're going to use all your career. You can always go small. You just need to decide to go small. And at any stage you can go small. And so I only looked at the end at big companies, which was kind of a bizarre thing for me. Sometimes, you know, with our co-founder and chairman of Moderna, the co-founder, always laugh at me. It's like, I have no idea what you did in big companies for 10 years. Humans must have driven them totally crazy, which I did sometimes.
Yes. But it's a learning opportunity. This is something I sometimes say to younger people who ask for advice. I think when you're starting out, you want to go someplace where you can learn a lot and not be pigeonholed. So what was your experience there at Eli Lilly?
I just loved it. Again, company culture was amazing. Very, very people-driven. Sometimes I used to joke that Lilly was not in the drug business. They were in the developing people business. And so I worked in the UK. I had a very quick stint in Indianapolis just to get trained after HBS, and I went to the UK because I wanted to go to manufacturing of all places. And I wanted to go to manufacturing because as I've been reading the journal for, you know, 10, 15 years before business school, I had noticed that every pharma company ends up having manufacturing issues. All of them. And it was the most bizarre thing. And I'm like, this must be preventable. So I wanted to go learn. I wanted to learn about the FDA, about CFR, just to learn, you know, the GMP environment. And so I told Lilly, I say, I'll come, but I need a manufacturing job. And they looked funny at me at the time because they wanted to give me my marketing job. And I said, but I want to be in the plant. I don't want to be in that corporate just looking at files and folders. And so I want to really be at the action where it is. And so they sent me to the UK. It was a great experience. Had a great team there. And then with funny, true, funny story, Lilly had a big issue with FDA when I was in the UK, but in Indianapolis.
And so at the time it was a time where they had a lot of biologics that were ready to launch, great clinical data. And because there was a warning letter on the injectable site that was making insulin, all the biologics needed to be injected as well. So they were planned to be coming out of the same plant. And FDA basically told, until you fix the problem on insulin, because it's a public health matter, because, you know, at the time owning most of the supply of the US market, you won't launch any product.
No biologics. No biologic launch where the CEO had been selling to the street for years and all those cool biologics are coming. FDA, none are launching.
Mm-hmm. And so I was, manufacturing was important.
Fix the brass tacks of how you make insulin first, and then we can talk about this other cool stuff.
Exactly. And it was exactly the right thing to do from a public health standpoint. FDA was taking care of a patient as they should. And so I was asked, like several other people that were posted, you know, in plants around the world, to basically just move to the US and help. And so I moved to Indianapolis. And so it was two years of, you know, craziness helping the team kind of deal with manufacturing issues. I had a great boss who then, it's, you know, small world, biotech and pharma, was brought by Henry Termeer to fix the Genzyme issues after Genzyme, as you know, ran into manufacturing issues, you know, almost 10, 15 years later, a great, great gentleman of the name of Scott Canute. And so I helped the team there. And then I told the time, say, hey, I'm happy to do one more job in manufacturing, but I really want to go back to the business. And so they said, deal, you come, you help. If everything works well, you go back to the business. And so then I ended up becoming country manager for Belgium. And so I moved the family from Indy to Brussels. And it was a great experience. I was very close to, you know, the customers. I was in the field with the reps like a day a week. And we launched new products like Alimta for cancer, Cymbalta for CNS. We launched Cialis, which was a really fun product to launch because Viagra was, of course, the only product at the time on the market. We had a lot of pricing issues with the government. You know, Belgium has very low prices. Spent a lot of time negotiating prices, even like for breast cancer. The indication of Genzyme breast cancer was like a year and a half fight just to get it reimbursed, which was crazy. It was the only country in Europe that was not reimbursed. So a lot of learnings there.
And at that time, it was one of those funny things that happened in life where Alain Mérieux, who was at the time the chairman of bioMérieux and the founder of Institut Mérieux, called me out of the blue one day. We just kept in contact, you know, like Christmas letter, you know. And he said, I'm coming to Brussels to see my family. I mean, can we have lunch? I'm like, sure. So we have lunch and literally, very French, you know, we talk about politics and business and what's happening in the world and so on. The world lunch and literally between cheese and dessert, he just dropped, hey, we are looking for a new CEO. I've been advised to, you know, throw a very wide net. Of course, you are way too young to have a chance. I was 32 at the time, 32 to have a chance.
And all you were at this point was sort of the bright young French sales guy who had some success over there in Japan, man. I mean, it was kind of a strange, it stood out, I'm sure.
Yeah. In his mind, but, you know, I got an HBS degree, did some Lilly work.
So it's interesting because so I went through a process. I mean, of course, history just to work fast. I ended up getting the job. And when I got the job, I asked him, I said, why are you giving me the job? Because I'm sure you had much more experience, you know, senior candidates for the job. And he said, you guys have very similar skills on most things like, you know, business, finance, sales, and so on. The thing that stood out was manufacturing. You were the only candidate that had manufacturing experience, and we're making medical devices. By the way, at the time that I joined, I was aware bioMérieux had a warning letter on the US site. So I had the chance to read the warning letter on the FDA website before saying yes for a job because I wanted to know how bad it was. Because sometimes, you know, it's so bad that it's going to take you five years to dig yourself out of a hole. And so it was bad, but not too bad. And so I took the job and week two in the job, I was in a plane to the US to the site because I wanted to see for myself. And I surprised the team because I went to see the utility room, you know, on the roofs everywhere. Tim was surprised like the new CEO is in utility room of a plant. What is he doing?
Yeah, I mean, manufacturing. I mean, there, I'm sure there's a reason why there weren't a lot of candidates with that in their background. It's not a glamorous set of tasks that, you know, I don't think a lot of people raised their hand early in their career to try to, you know, roll, get into the nitty-gritty of this.
Yeah. And it's funny because again, at the end of the day, we're all here to make medicines. And of course, you have to invent the medicine, which is, you know, super hard. It's research and you have to, you know, develop it in the clinic and so on. But to be able to make consistently a high-quality medicine for a long time, that you really build the process and the infrastructure and the culture is really important. And most organizations don't understand it.
Preage Biosciences has a microinjector device that enables intratumoral microdosing of experimental cancer drugs. Why does this matter? It enables researchers to evaluate several drugs at once against a single tumor while the tumor is still in the patient. It's in clinical trials now. To learn more, go to preagebio.com.
Okay. So you go to bioMérieux and it's, you're there for a number of years. You're the CEO. It grows a lot. From what to what?
Oh, I don't remember numbers now. Look, what I remember is we grew 10% excluding foreign exchange rates every year for five years.
And in terms of like global operation?
Yeah. So it was a global company. We had four presence in 42 countries. So we had bioMérieux teams in 42 countries. I think 10 plants around the world, 10 or 11 labs in the labs around the world. So really global company, publicly traded. So it was kind of a big jump.
Yeah. So you're in the deep end of the pool. You start this job at 32, you end up in, you know, 37, your late 30s. How did you make your next step?
So it's interesting. So when I was at bioMérieux, one of the things we did is we did a lot of acquisition of technology companies, like early stage, kind of trying to plug the holes to complement our internal R&D. bioMérieux was investing a lot in R&D and that's what I learned from the mayor. I always think about bioMérieux very similar from a culture standpoint to Roche. You know, family, you know, majority shareholder, several generation, long-term view on things, has been in science for several generations before. So I've learned kind of the hard way that science takes time and biology is hard. Mim used to joke, yeah, all the projects they ended up taking twice as long and costing twice as much as what we were told at the beginning of a project. Like that's just like this bioMérieux, Stéphane, you just have to get used to it. And so what was interesting is, so this Mr. Mérieux, he would have been like the chairman of the board.
