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Moderna Analysis: Inside The Largest Biotech IPO In History

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Source: Motley Fool

Biotech company Moderna just went public last week, raising $604M in what was the largest biotech IPO of all time.

At a price of $23 per share, Moderna [MRNA] sold over 26M shares, putting their valuation at $7.5B. Even though they hit a rough patch shortly after, the IPO is the latest in a string of record-breaking biotech public offerings this year.

Moderna specializes in so-called messenger RNA therapy, which is a form of treatment that uses a patient’s own cells to fight diseases. Assuming Moderna’s medicine works, the world now has “revolutionary” and new treatments for cancer.

So far in 2018, investors have pumped $7.1B into 60 biotech companies this year. That makes 2018 the 2nd biggest year ever for biotech, just behind 2014.

Moderna’s funding history

The other biotech companies that banked on IPOs this year were Solid Biosciences (valuation of $546.4M), ARMA Biosciences ($497.7M), Homology Medicines ($577.3M) and Allogene Therapeutics ($2.2B).

The $7.5B valuation was higher than the $7.1B reached by the company earlier in May 2010 when it raised $125M from Merck. Other investors include Sequoia Capital China, EDBI and ArrowMark Partners.

Moderna was founded in 2010 and was valued at $10.5M by the end of that year.

In the last eight years, the company’s valuation has risen by a whopping 679x. The above chart by Pitchbook shows the astonishing rise in Moderna’s valuation over the years.

In January 2014 Moderna raised $135M at a valuation of $880M and was a unicorn within the next twelve months. Till date the company has raised around $1.7B.

What’s Moderna all about?

As mentioned, Moderna is in early stage development of creating medicine using messenger RNA. In less layman’s terms, this transports genetic information from DNA to body cells enabling the production of proteins to express these genes.

Moderna aims to engineer messenger RNA with patients that have genetic diseases. This will communication with cells and produce potentially life-changing proteins.

As for the stock dropping…

Post-IPO, MRNA lost 19% in the first day of trading, dropping to $18.8 per share.

However, CNBC’s stock expert Jim Cramer wasn’t too worried about the drop, citing the upside of the technology and overall investor bullishness.

“It’s recession-proof at a time when many investors are now worried about a slowdown,” Cramer said. “It’s got an exciting concept and you can argue that messenger-RNA-based medicine could revolutionize health care.”

There are still some concerns raised over investing in Moderna shares. Like several other biotech companies, Moderna is also years away from a marketable product.

So what say we? Well, the WealthLAB verdict says, sure there’s upside. But investors need to have a larger risk appetite to enter this stock.

Business

This Mogul Became America’s 1st Black Billion-Dollar Businesswoman

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Sheila Johnson.

Where to start?

She’s the first black billion-dollar businesswoman. Before Oprah Winfrey.

She started as a TV executive, founding Black Entertainment Television (BET), the first TV network targeting African Americans. She then became a real estate mogul.

Oh, she also owns a stake in three major sports franchises, the NBA Wizards, NHL Capitals and the WNBA Mystics, the African American, period, to boast that claim.

In honor of Black History Month, let’s dive into her remarkable career.

FAST FACTS:

  • Born Sheila Crump in McKeesport, Pennsylvania, Johnson co-founded BET in 1979 with then-husband Robert Johnson. The couple sold it to Viacom in 2000 for $2.9B
  • Sheila Crump Johnson became the first African American woman on the Forbes’ Billionaire list in 2000—beating Oprah Winfrey to the distinction.
  • Per Forbes, Johnson has an $820M net worth as of 2019

 GIPHY

Foray into real estate…

After closing the sale to Viacom, Robert and Sheila pocketed around $1.5B each. Johnson used that windfall as seed money to build a hospitality real estate empire in 2005.

“There’s a disparity in paychecks between whites and blacks,” she told the Wall Street Journal. “I will never forget that.”

As CEO of Salamander Hotels and Resorts, Sheila controls a spectacular portfolio of six luxury hotels in Florida, Virginia and South Carolina. And she’s built it from the ground up—literally—in her own spirit.

“I’ve been to many hotels, not only in the US, but all over the world,” she told Forbes last year. “And I wanted to find something that was going to really make Salamander stand out beyond all of these hotels.”

So what does that mean?

“You have to understand, there are a lot of people, investment companies, with very deep pockets,” she says. “They can do it, but they don’t have the experiences that we’re able to bring. I am constantly trying to find a way to help Salamander Resort & Spa stand out head over heels above any other hotel — not only in the area, but in the nation.

“I want them to leave that resort wanting to come back and not just say, ‘I’ll be back in six months.’ I want them to come back all the time.”

And so far it’s worked. In fact, on Forbes Travel Guide’s 61st list of Star-Rated hotels, Johnson’s Salamander Resort & Spa outside of Washington, DC earned a Five-Star distinction.

Image Credit: Salamander Resort & Spa

Forbes: “Everything [she] touches turns to gold.”

That’s a real quote. From Forbes. Last year. It’s also true.

BET? Billion-dollar exit. Washington Capitals? Stanley Cup.

And Roma. Won 10 Oscars. Who showed it before a single soul started caring? Johnson’s Middleburg Film Festival. (Which, by the way, has 32 films and counting in Academy Award contention.)

Remember her golf resort at Innisbrook? Oh, yeah. Hosts the Valspar Championship, one of the PGA calendar’s most-anticipated tournaments.

Becoming a billionaire comes with a new level of clout as well. “When you don’t have money, you’re not invited to special events; you really don’t matter,” she told WSJ. “It’s a society thing.”

So instead, she’s turned to giving back. Her Sheila Johnson Fellowship’s paid for more then 40 scholarships at Harvard University for students who otherwise wouldn’t afford to attend.

Image result for sheila johnson"

Breaking glass ceilings. 

There’s an alarming statistic in business and diversity—especially as it pertains to women. According to research by investor Richard Kerby, 18% of all VCs are women—and only 3% are black. In addition, less than 50 black women ever have raised $1M in funding.

“When I got started,” Johnson says, “I couldn’t get a loan. I had to use my own money to get Salamander Resort and Spa.”

She explained to WSJ last year that men can go to any bank with a bank proposal. And no matter how “wacky” the idea is, she said, “they’re going to get the financing. Women do not have that ability.”

Johnson’s taken it upon herself to do something about that, becoming one of the founding partners of WE Capital, an investment firm that invests in female entrepreneurs.

“I started out in a very unique position where I had my own capital to be able to get started,” she says. “But there have got to be banks and investors that believe in helping women who want to be entrepreneurs in the hospitality business.

“And it’s just really, really important that they really take a look at this.”

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Money

5 Quick Ways To Get Rid Of Your Student Loans

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Student debts have hit a whopping $1.5 trillion. To put that into perspective, you could buy the two biggest tech giants – Apple and Facebook, and still have money left to splurge. Nearly half the students who head to college take out student loans, and despite the worries on how you’re going to meet the interest and repay it all back, it’s doable if done right.

1. Consolidate Your Student Loans

You might have opted for multiple student loan options, all with with different payment dates, repayment terms, and interest rates. If you bunch them together, the perks could be significant – anything from extending your terms to decades, to enrolling in debt forgiveness programs.

2. Refinancing Your Old Loans

Some borrowers are given the option to refinance their loans by taking out a loan to pay down the old loan. The best bet is to refinance your older loans with a new loan at a lower interest rate. Here’s a great post that compares both loan consolidation and refinancing.

3. Gradually Increase Your Repayments

Paying off your debts right out of university might work out tough. But after you’ve settled into a stable job, raise your repayment levels every year and you can scratch months of repayment off your debt.

4. Check Out Employers Who Offer Assistance

While this should not be the only criteria to filter out your employer, an added incentive to finance your student loans could be a big bonus.

5. Use Your Lender’s Autopay Plan

Most loan programs come with an autopay program that gives a small discount of 0.25%. Does this help at all? If you look at repayments of small amounts over a short period, it might not be significant. This can be used to chip away at bigger payments you owe.

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Money

[VIDEO] ETF, Explained

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Stocks, bonds, mutual funds, hedge funds, REITs, S&P, indices…there’s a lot of jargon that goes with investing. Lucky for you, #wealthgang, we have all the breakdowns here, in a non-boring way that’s easy to understand.

So what’s an ETF? Well, ETF stands for exchange-traded fund, which basically is a fund that owns various stocks. Giving you the luxury of diversifying your investment dollars into several stocks vs. just one.

Or as wikipedia puts it, an “ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.”

There are now over 6,000 ETFs on 60 exchanges and ETFs exist for everything from corporate bonds to gold bars to oil futures.

If that doesn’t make sense, just check out this Bloomberg video.

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