Moderna CEO Stephane Bancel has sold over $400 million in company stock since the beginning of the Pandemic, as the company's stock soared on the development and launch of its Covid vaccine.
Prior to the swine flu, the Cambridge, Massachusetts company and its French CEO weren't well known outside of the industry. Moderna rapidly developed its two-dose Covid vaccine in cooperation with the National Institutes of Health and with taxpayer backing, becoming a breakthrough success story.
According to the Centers for Disease Control and Prevention, Moderna's shots are the second most used vaccine in the US after Pfizer.
The value of Bancel's sales shows how well the company has done with its vaccine, according to the director of research at Equilar. The value of Bancel's sales was verified by Equilar.
Moderna received funding from the Coalition for Epidemic Preparedness Innovations to develop a coronaviruses vaccine and its stock has soared 614%. Emergency authorization was granted by the FDA for Moderna's vaccine.
Moderna's only commercially available product is the Covid vaccine. The shots have made Bancel a billionaire with an estimated net worth of more than $5.3 billion in company equity alone, based on his reported holdings as of March 1 and Wednesday's closing price. The company made its first profit last year after going public in December. The company expects to sell a minimum of $19 billion of its signature shots this year.
The Bancel cash out was done through stock plans adopted before the Pandemic. The plans allow executives to sell a pre-determined number of shares at regular intervals to avoid the possibility of insider trading. The 10b5-1 rule was adopted by the SEC more than 20 years ago to give executives a way to cash in some of their shares without facing allegations of insider trading and potential legal action.
Moderna's 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.
It is meant to be a safe harbor against being sued, according to a professor of accounting.
Bancel has sold more than two million shares since January 2020. He sold approximately $3.2 million in shares after the announcement of funding for the vaccine.
The SEC requires that 10b5-1 plans cannot be adopted or amended while in possession of nonpublic information. The plans are flexible because there are so few rules.
Daniel Taylor, a professor of accounting at the Wharton School, said that the SEC rules are very loose around the plans. Some companies, such as Moderna, require executives to trade under 10b5-1 plans as form of good corporate hygiene, but other companies leave it up to the executive.
10b5-1 plans are controversial due to their lack of transparency. The SEC doesn't have to make any disclosures about the content of 10b5-1 plans if the executives trade under them.
Moderna declined to comment on whether it would publicly disclose the details of Bancel's 10b5-1 plans, though his stock sale filings do provide the dates his trading plans were adopted, all in December. Moderna said Bancel's 10b5-1 trading program was last amended in May 2021. Bancel donated hundreds of thousands of shares.
There is no disclosure for 10b5-1 plans.
According to CNBC's analysis of the company's securities filings, Bancel typically sells 19,000 shares every week under his 10b5-1 plans. The shares are usually sold in two phases, one directly owned by Bancel and the other indirectly owned by OCHA. Bancel has sold around 861,000 shares of his own stock, which has a total value of over $150 million.
According to the SEC filings, Bancel is the majority equity holder and sole managing member of OCHA. He has sold about 972,000 Moderna shares that were indirectly owned by OCHA. OCHA is an investment company that has a branch in Massachusetts.
Delaware does not require companies to reveal the nature of their business when they register with the state. Bancel didn't give any more information through a spokeswoman at Moderna.
Since January 2020, Bancel has sold more than 191,000 shares that he owns indirectly through Boston Biotech Ventures for a total value of about $13 million. According to corporate filings in Massachusetts, Boston Biotech Ventures is a limited liability company that provides angel investing to start-ups in the Boston area and files patents to start new companies. According to SEC filings, Bancel is the majority equity holder and sole managing member.
Bancel has an independent trust fund for his children, which has sold about 752,000 Moderna shares for a total value of about $65 million.
The SEC reform the 10b5-1 rule to provide greater transparency was called for by Democratic senators in February of 2021. In December of last year, the SEC proposed a number of changes, including requiring companies to disclose in their quarterly reports the terms of stock trading arrangements and the adoption of 10b5-1 plans. The changes haven't been adopted yet.
The lack of transparency mandated by the SEC is the reason people are interested. I think the answer is probably no.
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