SALT interview with Rachel Pether

Hello all,

I recorded the interview above with Rachel Pether from SALT (the alternative investment conference/forum founded by Anthony Scaramucci).

Yilan Yu at the Australian National University, who interns with us focusing on our life sciences investments, wrote a blog post summarizing recent articles (referenced below) regarding the development of mRNA vaccines. This is well-worn ground and borrows heavily from the sources, but still worth a read if you’re interested in this kind of thing.

Best wishes

mRNA therapeutics (Part I)

The following is Part I in a series of posts about mRNA therapeutics where we review its origins, why they’re better than conventional therapeutics in certain applications, and the challenges that they have historically faced in being used clinically. In this post, I review its role in the Covid pandemic, and look back to its roots 30 years ago, on the lab bench of Hungarian immigrant and biochemist Katalin Karikó.


As little as a year and a half ago, mRNA vaccines and the broader applications of mRNA as a class of drugs garnered scant attention. The technology had flown under the radar of both academia and the general public, whilst being developed and refined by a handful of ambitious biotech companies and laboratories.

Covid-19 changed all this. And it demonstrated some important advantages to mRNA technology:

1. mRNA vaccine development can be fast, really fast

Moderna’s first clinical batch was made on February 7th 2020, 25 days after they selected the target sequence for the coronavirus spike protein (which took 2 days). After the relevant regulatory approvals, the company administered the vaccine to a human in its first clinical trial, a total of 63 days after target selection. In contrast, a typical flu vaccine takes 9 months to make a batch, and overall development for novel disease targets can take years, up to a decade.

2. mRNA vaccines can work well

Phase III trials in Moderna and BioNTech’s candidates showed over 90% reductions in symptomatic Covid compared to control. This level of efficacy against a respiratory virus is practically unheard of. To put this in perspective, typical flu vaccines struggle to have efficacies over 50%.

3. mRNA vaccines are quickly adaptable

As new variants emerge (named after exotic Greek letters), the protection offered by the first generation of vaccines are being challenged – it’s like continuously firing at a target that’s slowly moving, without adjusting your aim. By sequencing the genome of new variants, mRNA vaccines can be readily reprogrammed to provide better targeted protection.

Out of all this, the leading companies behind mRNA vaccines – Moderna and BioNTech – have become multi-bagger wins for investors. Forecasted 2021 sales are $19.6 billion for Moderna and $21.5 billion for BioNTech (which would be split 50:50 with Pfizer).[2] This is roughly equal to AbbVie’s Humira (an antirheumatic antibody), which until this point in time, had the largest annual peak sales of any drug.[3]

The speed, ease and adaptability of mRNA as a vaccine is only a small part of mRNA’s potential – we will go into more detail about both vaccines and other indications in a future post. For now, I want to wind the clock back 30 years and look at where the seeds for these innovations were planted.

Lost in translation – mRNA’s origin story

Kariko’s mRNA obsession

Katalin Karikó was born in 1955 in Hungary, the daughter of a butcher. Despite not having met one, Katalin wanted to be a scientist from a young age. Karikó earned her PhD at the University of Szeged and worked as a postdoctoral fellow there. In 1985, the university’s research program ran out of money and Karikó, then in her 20s, moved to the US with her husband and a two-year-old daughter. After studying as a post-doctoral student at Temple University in Philadelphia, Karikó landed a low-level position in 1989 as a research assistant to cardiologist Elliot Barnathan at the University of Pennsylvania. There she became interested in messenger RNA.

Science Interlude: What is messenger RNA?

Messenger RNA (mRNA) is the intermediary (or messenger) between our genomes (which contains instructions for proteins) and the ribosome (where proteins are made).

Every protein in our body is coded for by deoxyribonucleic acids (DNA), a 4 letter code (A,T,G,C) stored in the nucleus of all our cells. It consists of two complementary strands that makes the iconic double helix and is wound and compacted onto chromosomes.

When our cells want to make a protein, the DNA sequence must be unwound and one strand is copied as ribonucleic acid (RNA). This strand then leaves the nucleus, and enters the cytoplasm where it is ‘translated’ into an amino acid sequence by the ribosome. This amino acid chain then folds into the right shape either independently or with help from proteins called chaperones. The cell can then modify the protein as needed and deliver it to where it has to do its job.

So mRNA is essentially a transcript that gets passed around. Once it does its job, it gets destroyed by enzymes called RNAses.

Now, theoretically if you wanted to get a cell to make a protein of interest, say the coronavirus spike protein, you could intercept the pathway at several points:

First, you could edit the genome to insert the spike gene into your DNA. The gene would make mRNA that would make the spike protein. This was next to impossible before CRISPR was discovered in the 2010s, but it’s also a bad idea because it means you would be permanently generating spike proteins. There’s also little to no control over the levels of protein you would generate. For a vaccine, you want something transient and dose-controlled.

So instead, you could go one step down and feed cells mRNA directly, and you could use it to make virtually any protein you want, harnessing the power of the cell’s native machinery.

Back to the story…

This was the focus of Karikó’s career and initially, things were promising. In one of her early experiments with Dr. Barnathan, the pair inserted mRNA into cells to make a protein called a urokinase receptor. Since urokinase receptors binds specifically to urokinase, the experiment involved using a radioactive version of urokinase and then measuring how much of the molecule stuck to the cells with a gamma counter.

It was a success – the detector indicated these cells were making proteins that they weren’t able supposedly to make. The pair dreamt of using mRNA to improve blood vessels for heart bypass surgery or extend the lifespan of human cells.

“I felt like a god,” Dr. Karikó recalled.

However, Dr. Barnathan was soon offered a place at a biotech firm and Karikó was left without a lab. At the time, mRNA as a drug was such a nascent concept that almost nobody took it seriously or was willing to fund it.

“Most people laughed at us,” Dr. Barnathan said.

Katalin Kariko (middle) with her husband Bela and two-year-old daughter, Susan.

It didn’t help that Dr. Kariko “was not a great grant writer,” with an immigrant background.

Neurosurgeon Dr. David Langer, who knew Dr. Karikó from his years as a medical resident at Dr. Barnathan’s lab, urged the head of the neurosurgery department to keep Dr. Karikó. With Katalin (‘Kate’), Dr. Langer hoped to use mRNA to treat patients who developed blood clots following brain surgery, often resulting in strokes. His idea was to get cells in blood vessels to make nitric oxide, a substance that dilates blood vessels. Doctors couldn’t just inject nitrous oxide because it had a half-life of milliseconds – the effect was too short-lived.

Unfortunately, their experiments with mRNA had little success. Later on, David Langer would reflect that Dr. Karikó taught him that one key to real scientific understanding is to design experiments that always tell you something, even if it is something you don’t want to hear.

“There’s a tendency when scientists are looking at data to try to validate their own idea,” Dr. Langer said. “The best scientists try to prove themselves wrong. Kate’s genius was a willingness to accept failure and keep trying, and her ability to answer questions people were not smart enough to ask.”

Throughout her career, Dr. Karikó had clung to the fringes of academia, migrating from lab to lab and never making more than $60,000 per year. After a few years, Dr. Langer left the university as well, and again Dr. Karikó was without a lab or funds.

“Every night I was working: grant, grant, grant,” Karikó remembered, referring to her efforts to obtain funding. “And it came back always no, no, no.”

But 1995 was a particularly tough year for Dr. Karikó – after 6 years at the University of Pennsylvania, Karikó was demoted, diagnosed with cancer and her husband was stuck in Hungary sorting out a visa issue. She had been on the path to full professorship, but with no money coming in to support her work on mRNA, her bosses saw no point in pressing on. Fortunately, the cancer diagnosis was just a scare – a false positive – but the work she had devoted her career to was again at stake.

“I thought of going somewhere else, or doing something else,” Karikó said. “I also thought maybe I’m not good enough, not smart enough. I tried to imagine: Everything is here, and I just have to do better experiments.”

A meeting at a photocopying machine threw a lifeline. Immunologist Dr. Drew Weissman happened by, and she struck up a conversation. “I said, ‘I am an RNA scientist — I can make anything with mRNA,’” Dr. Kariko recalled.

Dr. Weissman told her he wanted to make a vaccine against H.I.V. “I said, ‘Yeah, yeah, I can do it,’” Dr. Kariko said.

At Weissman’s lab, Karikó worked on the problem that had been a stumbling block of mRNA, which Karikó’s many grant rejections pointed out – it could work in cell cultures, but in a living system, synthetic RNA was notoriously vulnerable to the body’s natural defenses, meaning it would likely be destroyed before reaching its target cells.

“Nobody knew why,” Dr. Weissman said. “All we knew was that the mice got sick. Their fur got ruffled, they hunched up, they stopped eating, they stopped running.”

As would later become apparent, the immune system thought that synthetic mRNA looked enough like something from a virus for it to mount an inflammatory response.

But with that answer came another puzzle. Every cell in every person’s body makes mRNA, and the immune system turns a blind eye. “Why is the mRNA I made different?” Dr. Kariko wondered.

A control in an experiment finally provided a clue. Dr. Kariko and Dr. Weissman noticed their mRNA caused an immune overreaction. But the control molecules, another form of RNA in the human body — so-called transfer RNA, or tRNA — did not.

A molecule called pseudouridine in tRNA allowed it to evade the immune response. As it turned out, naturally occurring human mRNA also contains the molecule. The solution, Karikó and Weissman discovered, was the biological equivalent of swapping out a tire.

Added to the mRNA made by Dr. Kariko and Dr. Weissman, their synthetic mRNA not only evaded the immune system, but it also made a lot more protein – 10 times as much protein in each cell.

“That was a key discovery,” said Norbert Pardi, an assistant professor of medicine at Penn and frequent collaborator. “Karikó and Weissman figured out that if you incorporate modified nucleosides into mRNA, you can kill two birds with one stone.”

“We both started writing grants,” Dr. Weissman said. “We didn’t get most of them. People were not interested in mRNA. The people who reviewed the grants said mRNA will not be a good therapeutic, so don’t bother.’”

After a series of rejections from leading scientific journals, their research was finally published[4] in Immunity, but received little attention.

Dr. Weissman and Dr. Kariko then showed they could induce an animal — a monkey — to make a protein they had selected. In this case, they injected monkeys with mRNA for erythropoietin, a protein that stimulates the body to make red blood cells. The animals’ red blood cell counts soared.

The scientists thought the same method could be used to prompt the body to make any protein drug, like insulin or other hormones or some of the new diabetes drugs. Crucially, mRNA also could be used to make vaccines unlike any seen before. Instead of injecting a piece of a virus into the body, doctors could inject mRNA that would instruct cells to briefly make that part of the virus.

“We talked to pharmaceutical companies and venture capitalists. No one cared,” Dr. Weissman said. “We were screaming a lot, but no one would listen.”
However, Karikó and Weissman’s work wasn’t totally ignored. It caught the attention of two key scientists — one in the United States, another abroad — who would later help found Moderna and BioNTech.

Derrick Rossi, future co-founder of Moderna, was a 39-year-old postdoctoral fellow in stem cell biology at Stanford University in 2005 when he read the first paper. Not only did he recognize it as groundbreaking, he now says Karikó and Weissman deserve the Nobel Prize in chemistry.

But Rossi didn’t have vaccines on his mind when he set out to build on their findings in 2007 as a new assistant professor at Harvard Medical School running his own lab. Instead, he was interested in using modified mRNA to reprogram adult cells to act like embryonic stem cells – these are cells that can turn into any cell in the body. However, procuring these cells for research had set off an ethical firestorm because they were normally harvested from discarded embryos. Rossi wanted to use mRNA to produce a new source of embryonic stem cells that would be cheaper and side step this controversy.

He asked a postdoctoral fellow in his lab to explore the idea. In 2009, after more than a year of work, the postdoc waved Rossi over to a microscope. Rossi peered through the lens and saw something extraordinary: a plate full of the very cells he had hoped to create.

The founding of Moderna

Rossi excitedly informed his colleague Timothy Springer, another professor at Harvard Medical School and a biotech entrepreneur. Recognizing the commercial potential, Springer contacted Robert Langer, the prolific inventor and biomedical engineering professor at the Massachusetts Institute of Technology.

On a May afternoon in 2010, Rossi and Springer visited Langer at his laboratory in Cambridge. What happened at the two-hour meeting and in the days that followed has become the stuff of legend — and an ego-bruising squabble.

Langer is a towering figure in biotechnology and an expert on drug-delivery technology. At least 400 drug and medical device companies have licensed his patents. His office walls display many of his 250 major awards, including the Charles Stark Draper Prize, considered the equivalent of the Nobel Prize for engineers.

As he listened to Rossi describe his use of modified mRNA, Langer recalled, he realized the young professor had discovered something far bigger than a novel way to create stem cells. Cloaking mRNA so it could slip into cells to produce proteins had a staggering number of applications, Langer thought, and might even save millions of lives.

“I think you can do a lot better than that,” Langer recalled telling Rossi, referring to stem cells. “I think you could make new drugs, new vaccines — everything.”
Langer could barely contain his excitement when he got home to his wife.

“This could be the most successful company in history,” he remembered telling her, even though no company existed yet.

Three days later Rossi made another presentation, to the leaders of Flagship Ventures. Founded and run by Noubar Afeyan, a swaggering entrepreneur, the Cambridge venture capital firm has created dozens of biotech startups. Afeyan had the same enthusiastic reaction as Langer, saying in a 2015 article in Nature that Rossi’s innovation “was intriguing instantaneously.”

Within several months, Rossi, Langer, Afeyan, and another physician-researcher at Harvard formed the firm Moderna — a new word combining modified and RNA.
Springer was the first investor to pledge money, Rossi said. In a 2012 Moderna news release, Afeyan said the firm’s “promise rivals that of the earliest biotechnology companies over 30 years ago — adding an entirely new drug category to the pharmaceutical arsenal.”

The Founding of BioNTech

In Mainz, Germany, situated on the left bank of the Rhine, another new company was being formed by a married team of researchers who would also see the vast potential for the technology, though vaccines for infectious diseases weren’t on top of their list then.

A native of Turkey, Ugur Sahin moved to Germany after his father got a job at a Ford factory in Cologne. His wife, Özlem Türeci had, as a child, followed her father, a surgeon, on his rounds at a Catholic hospital. She and Sahin are physicians who met in 1990 working at a hospital in Saarland.
The couple have long been interested in immunotherapy, which harnesses the immune system to fight cancer and has become one of the most exciting innovations in medicine in recent decades. In particular, they were tantalized by the possibility of creating personalized vaccines that teach the immune system to eliminate cancer cells.

Both see themselves as scientists first and foremost. But they are also formidable entrepreneurs. After they co-founded another biotech, the couple persuaded twin brothers who had invested in that firm, Thomas and Andreas Strungmann, to spin out a new company that would develop cancer vaccines that relied on mRNA.

That became BioNTech, another blended name, derived from Biopharmaceutical New Technologies. Its U.S. headquarters is in Cambridge. Sahin is the CEO, Türeci the chief medical officer.

Like Moderna, BioNTech licensed technology developed by the Pennsylvania scientist whose work was long ignored, Karikó, and her collaborator, Weissman. In fact, in 2013, the company hired Karikó as senior vice president to help oversee its mRNA work.

Two is company

In 2011, Moderna hired CEO Stéphane Bancel, a rising star in the life sciences, a chemical engineer with a Harvard MBA who was known as a businessman, not a scientist. At just 34, he became CEO of the French diagnostics firm BioMérieux in 2007 but was wooed away to Moderna four years later by Afeyan.

Moderna made a splash in 2012 with the announcement that it had raised $40 million from venture capitalists despite being years away from testing its science in humans. Four months later, the British pharmaceutical giant AstraZeneca agreed to pay Moderna a staggering $240 million for the rights to dozens of mRNA drugs that did not yet exist.

Moderna’s promise — and the more than $2 billion it raised before going public in 2018 — hinged on creating a fleet of mRNA medicines that could be safely dosed over and over. But behind the scenes the company’s scientists were running into a familiar problem. In animal studies, the ideal dose of their leading mRNA therapy was triggering dangerous immune reactions — the kind for which Karikó had improvised a major workaround under some conditions — but a lower dose had proved too weak to show any benefits.

Moderna had to pivot. If repeated doses of mRNA were too toxic to test in human beings, the company would have to rely on something that takes only one or two injections to show an effect. Gradually, biotech’s self-proclaimed disruptor became a vaccines company, putting its experimental drugs on the back burner and talking up the potential of a field long considered a loss-leader by the drug industry. Soon clinical trials of an mRNA flu vaccine were underway, and there were efforts to build new vaccines against cytomegalovirus and the Zika virus, among others.

Meanwhile, BioNTech initially lay low and garnered little attention. Unlike Moderna, BioNTech took to mRNA more from an academic approach, publishing research from the start – about 150 scientific papers in the past 8 years.

In 2013, the firm began disclosing its ambitions to transform the treatment of cancer and soon announced a series of eight partnerships with major drug makers. BioNTech has 13 compounds in clinical trials for a variety of illnesses but, like Moderna, has yet to get a product approved.

When BioNTech went public last October, it raised $150 million, and closed with a market value of $3.4 billion — less than half of Moderna’s when it went public in 2018.

Despite his role as CEO, Sahin has largely maintained the air of an academic. He still uses his university email address and rides a 20-year-old mountain bicycle from his home to the office because he doesn’t have a driver’s license.

New year’s 2019

Shortly before midnight, on December 30th, the International Society for Infectious Diseases, a Massachusetts-based nonprofit, posted an alarming report online. A number of people in Wuhan, a city of more than 11 million people in central China, had been diagnosed with “unexplained pneumonia.”

Chinese researchers soon identified 41 hospitalized patients with the disease. Most had visited the Wuhan South China Seafood Market. Vendors sold live wild animals, from bamboo rats to ostriches, in crowded stalls. That raised concerns that the virus might have leaped from an animal, possibly a bat, to humans.

After isolating the virus from patients, Chinese scientists on Jan. 10 posted online its genetic sequence. Because companies that work with messenger RNA don’t need the virus itself to create a vaccine, just a computer that tells scientists what chemicals to put together and in what order, researchers at Moderna and BioNTech jumped into action…

A Life’s Dream

On November 8th, after positive Phase III results of the Pfizer-BioNTech study came in, Dr. Kariko turned to her husband Bela. “Oh, it works,” she said. “I thought so.” To celebrate, she ate an entire box of Goobers chocolate-covered peanuts. By herself.
Dr. Weissman celebrated with his family, ordering takeout dinner from an Italian restaurant, “with wine,” he said. Deep down, he was awed.
“My dream was always that we develop something in the lab that helps people,” Dr. Weissman said. “I’ve satisfied my life’s dream.”
Dr. Kariko and Dr. Weissman were vaccinated on Dec. 18 at the University of Pennsylvania. Their inoculations turned into a press event, and as the cameras flashed, she began to feel uncharacteristically overwhelmed.
A senior administrator told the doctors and nurses rolling up their sleeves for shots that the scientists whose research made the vaccine possible were present, and they all clapped. Dr. Kariko wept.
Things could have gone so differently, for the scientists and for the world, Dr. Langer said. “There are probably many people like her who failed,” he said.

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