Moderna Insider Sales Raise Corporate Governance Flags

Moderna Insider Sales Raise Corporate Governance Flags

Over the past year Moderna (ticker: MRNA) insiders have sold equity worth approximately $292 million as of July 27th 2020. This includes CEO St├ęphane Bancel whom has sold equity worth approximately $33 million and Chief Medical Officer Tal Zaks whom has sold equity worth approximately $55 million over the same period.

MRNA insider sales. Click image to expand.

Moderna of course is one of the many companies pursuing a COVID vaccine. It recently announced its Phase III clinical trial. We prefer executive management teams who retain shares over the long-term to those who regularly sell equity. This is especially true when there is news flow concerning a given company.

Per Moderna insider sales have been executed under 10b5-1 plans that were adopted by most insiders around the time Moderna went public in December 2018 (see YouTube clip of CEO Stephane Bancel below):

  • The problem is these plans can be amended as detailed here in footnote 1 where the 10b5-1 plan was adopted on December 28, 2018 but amended on May 21, 2020.
  • Per footnote 2 in the same filing the disposition in question was executed per a 10b5-1 plan adopted on May 21, 2020. There are additional filings that refer to a May 21, 2020 amendment and a May 21, 2020 10b5-1 plan.
  • Mr. Bancel’s equity sales have occurred under an unnamed trust, under OCHA LLC and under Boston Biotech Ventures, LLC.
  • Moderna would be wise to file an 8-K statement detailing the parameters of the various 10b5-1 plans.

Aside from Moderna and corporate governance issues, we are skeptical of these accelerated vaccination programs. It is impossible to know the longer-term health risks given the push to market from the Trump administration.