Why This Secretive Tech Start-Up Could Be The Next Theranos

CEO of Moderna
Getty Images/Oren Aks/Thrillist
Getty Images/Oren Aks/Thrillist

You've probably heard about Elizabeth Holmes by now, the eccentric CEO of the scandalized medical company Theranos. Once a Venus flytrap for Silicon Valley investors and now the subject of an FBI criminal investigation, Theranos claimed to have developed revolutionary blood-testing technology -- claims that turned out to be total bullshit.

Holmes' spectacular fall from grace has rocked the medical community, raising alarm about other similar companies that have amassed incredible wealth and power, but kept their research under a veil of absolute secrecy. Take Moderna Therapeutics, for example, a six-year-old biotech firm based in Cambridge, MA that was the recent subject of a superb investigative piece by Stat News. The company has attracted a staggering amount of investors' money, boasting a radical new way to treat illnesses by manipulating human cells to fight diseases from within.

The technology sounds promising, but like Theranos, Moderna's ultra-secretive policies prohibit them from publishing any substantial data to prove their work, nor do they disclose information to investors. The Stat piece also reveals eye-opening similarities between Holmes and Moderna's CEO, Stéphane Bancel. The story is really worth a read, but here are some highlights that got me wondering if Moderna could be the next Theranos.

Moderna CEO Stephane Bancel
AFP/AFP/Getty Images

The company keeps investors in the dark

Holmes accepted money from investors but refused to divulge any information about how Theranos' technology actually worked. Moderna similarly maintains an alarming level of secrecy:

"The company has published no data supporting its vaunted technology...Outside venture capitalists said Moderna has so many investors clamoring to get in that it can afford to turn away any who ask too many questions. Some small players have been given only a peek at Moderna's data before committing millions to the company."

The CEO oversees Moderna's scientific strategy, but isn't a scientist

Holmes began her start-up at age 19 after dropping out of Stanford University. While Moderna CEO Stéphane Bancel has his master’s in chemical engineering and an MBA from Harvard, his qualifications to make major scientific decisions at Moderna are also questionable:

"Bancel had no experience running a drug development operation...he'd spent most of his career in sales and operations, not science... He is listed as a co-inventor on more than 100 of Moderna's early patent applications, unusual for a CEO who is not a PhD scientist." 

Like Holmes, he perpetuates a toxic work environment

"...Bancel built a culture of recrimination at Moderna, former employees said. Failed experiments have been met with reprimands and even on-the-spot firings. They recalled abusive emails, dressings down at company meetings, exceedingly long hours, and unexplained terminations." 

High-level executives are quitting in droves

"At least a dozen highly placed executives have quit in the past four years, including heads of finance, technology, manufacturing, and science. In just the past 12 months, respected leaders of Moderna's cancer and rare disease programs both resigned."

Most notable among the resignations was the highly respected and veteran chief scientific officer, Joseph Bolen, who had previously led another Big Pharma company to FDA approval for a hugely successful cancer drug. "'No scientist in his right mind would leave that job unless there was something wrong with the science or the personnel,' said a person close to the company at the time."

The mRNA treatments it's trying to develop are potentially very dangerous

Moderna's research involves introducing synthetic mRNA into our cells. Theoretically, the revolutionary treatments could target and reprogram specific cells, allowing our own bodies to cure themselves of disease with repeated doses over time. A number of Big Pharma companies have attempted to develop similar technologies, but abandoned them over fear that they produced prohibitively dangerous patient side effects.

"Delivery -- actually getting RNA into cells -- has long bedeviled the whole field. On their own, RNA molecules have a hard time reaching their targets. They work better if they're wrapped up in a delivery mechanism, such as nanoparticles made of lipids. But those nanoparticles can lead to dangerous side effects, especially if a patient has to take repeated doses over months or years."

It's dialing back its original plans to focus on "less ambitious" projects...

"Lower-ranking employees, meanwhile, said they've been disappointed and confused by Moderna's pivot to less ambitious -- and less transformative -- treatments. Moderna has pushed off projects meant to upend the drug industry to focus first on the less daunting (and most likely, far less lucrative) field of vaccines -- though it is years behind competitors in that arena."

... but is being unusually secretive about those, too

"Moderna just moved its first two potential treatments -- both vaccines -- into human trials. In keeping with the culture of secrecy, though, executives won't say which diseases the vaccines target, and they have not listed the studies on the public federal registry, ClinicalTrials.gov. Listing is optional for Phase 1 trials... but most companies voluntarily disclose their work."

Perhaps because it's preparing to go public

"With a public listing come required disclosures, and many are eager to see what Moderna's been keeping under wraps all these years. Outsiders and competitors, looking only at Moderna's public statements, have noted a shift in strategy that might signal undisclosed setbacks."

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Joe McGauley is a senior writer for Thrillist and sincerely hopes this isn't all a sham.