Moderna CEO Stephan Bancel has sold more than $400 million of company stock during the pandemic

Moderna CEO Stefan Bansel

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Moderna CEO Stefan Bancel has sold $408 million in company stock since the pandemic began — an average of about $3.6 million in a week — as the company’s stock in developing and deploying a Covid vaccine has soared, according to a CNBC analysis of the company’s securities filing.

The Cambridge, Massachusetts-based biotech company and French CEO were not widely known outside biotech circles before the pandemic. However, both have been so successful that Moderna rapidly developed a two-dose Covid vaccine in collaboration with the National Institutes of Health and with taxpayer support through Operation Warp Speed.

Moderna vaccines are now the second most widely used Covid vaccine in the United States after Pfizer, with more than 209 million doses, according to the Centers for Disease Control and Prevention.

Courtney Yu, Equilar’s director of research, said Bancel’s sales value speaks volumes for how well the company’s stock has performed in the success of its vaccine. Equilar, which provides data on executive compensation, has independently verified Bancel’s sales value.

Moderna’s stock is up 614% since then first ad On January 23, 2020, it received funding from the Coalition for Epidemic Preparedness Innovations to develop a vaccine against the coronavirus. The US Food and Drug Administration (FDA) granted emergency authorization for Moderna’s vaccine in December 2020.

Moderna’s Covid vaccine is still the biotech company’s only commercially available product. shots Made Bancel a billionaire With an estimated net worth of more than $5.3 billion in company stock alone — based on his stated holdings as of March 1 and closing price on Wednesday — and Create unexpected gains for investors. The 12-year-old company, which went public in December 2018And the It booked its first profit last year – $12.2 billion – on $17.7 billion in sales of the Covid vaccine. She expects sales of at least $19 billion from her autograph shots this year.

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Bancel’s $408 million has been disbursed since January 2020 through so-called 10b5-1 stock plans approved before the pandemic in 2018. These plans allow executives to sell a predetermined number of shares, executed by a broker, at regular intervals to avoid the possibility of trading based on on inside information. The Securities and Exchange Commission adopted the 10b5-1 rule more than 20 years ago to give executives a way to liquidate some of their stocks without facing allegations of insider trading and potential legal action.

Moderna executives are required to trade under 10b5-1 plans, in which shares are sold during an open trading window under the company’s insider trading policy, according to Moderna’s 2022 agent report.

“It’s supposed to be a kind of safe haven against litigation,” said David Larker, an accounting professor at Stanford Graduate School of Business who has conducted research on the 10b5-1 plans.

entirelyAnd the Bancel has sold more than 2.8 million shares since late January 2020 under its pre-pandemic trading plans. From Moderna’s initial public offering until the announcement of CEPI’s funding for a vaccine, he sold approximately $3.2 million in stock.

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The Securities and Exchange Commission has quite a few rules that govern 10b5-1 plans, other than the requirement that they cannot be adopted or modified while possessing material non-public information. Since there are very few rules, the plans are flexible and vary across companies.

“The SEC rules are completely lax about the plans,” said Daniel Taylor, a professor of accounting at the Wharton School. Taylor said although some companies, such as Moderna, require CEOs to trade under 10b5-1 plans as a form of “corporate good hygiene,” other companies leave it to the CEO’s discretion if they adopt such a plan.

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Although the 10b5-1 plans are supposed to prevent insider trading, they are controversial due to their lack of transparency. Companies whose CEOs trade under 10b5-1 plans are not required to make any disclosures to the Securities and Exchange Commission about the content of these plans.

Moderna declined to comment on whether it would publicly reveal the details of Bancel 10b5-1’s plans, though its stock sale filings give the dates its trading plans were approved, all in December 2018 with adjustments made in September 2019 and May 2020. Moderna said Bancel’s 10b5-1 trading platform was revised in May 2021 to increase its charitable giving. Bancel has donated hundreds of thousands of shares to charity.

“No disclosure is required for 10b5-1 plans of any kind,” Taylor said.

Bancel typically sells about 19,000 shares each week under his 10b5-1 plans, averaging about $3.6 million every seven days, according to a CNBC analysis of the company’s stock filings. Shares are typically sold in two tranches, 9,000 owned directly by Bancel and 10,000 owned indirectly through an LLC called OCHA. Bancel has sold approximately 861,000 shares he directly owns, with a total value of approximately $153 million since late January 2020.

Bancel is the majority shareholder and the only managing member of OCHA, according to SEC filings. He has sold about 972,000 shares of Moderna stock held indirectly through OCHA for a total value of about $170 million since late January 2020. OCHA is an investment firm, according to corporate filings in Massachusetts where it has a branch.

The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) is registered in Delaware, which does not require companies to disclose the nature of their business upon incorporation and registration with the state. Bancel declined to provide any further details about the company through a Moderna spokeswoman.

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Bancel has also sold more than 191,000 shares he owns indirectly through Boston Biotech Ventures totaling approximately $13 million since January 2020. Boston Biotech Ventures is an LLC that provides angel investment to Boston-area startups and files patents for starting new companies, According to corporate filings in Massachusetts. Bancel is the majority shareholder and the only managing member of Boston Biotech Ventures, according to SEC filings.

Bancel also has an independent trust for his children, which has sold approximately 752,000 shares of Moderna for a total value of nearly $67 million since late January 2020.

In February 2021, Democratic Senators Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland and Sherrod Brown of Ohio called for the Securities and Exchange Commission to reform the 10b5-1 rule to provide greater transparency. Last December, the Securities and Exchange Commission Suggest several changes Such as requiring companies to disclose in their quarterly reports the adoption or termination of 10b5-1 plans and the terms of stock trading arrangements. These changes have not yet been approved.

“The reason why people are so concerned is that there is a lack of transparency that is mandated by the SEC,” Taylor said. “if [Bancel] He had revealed his plan in 2018, so would we be too concerned about his stuff? I think the answer might be no.”

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