Moderna unveiled encouraging coronavirus vaccine results. Then top execs dumped nearly $30 million of stock

Moderna's stock price skyrocketed as much as 30% on Monday after the biotech company announced promising early results for its coronavirus vaccine. As ordinary investors piled in, two insiders were quietly heading for the exits

5/23/2020 10:23:00 AM

Moderna's stock price skyrocketed as much as 30% on Monday after the biotech company announced promising early results for its coronavirus vaccine. As ordinary investors piled in, two insiders were quietly heading for the exits

Moderna's stock price skyrocketed as much as 30% on Monday after the biotech company announced promising early results for its coronavirus vaccine. As ordinary investors piled in, two insiders were quietly heading for the exits.

The sales occurred after Moderna excited Wall Street before markets opened Monday by announcing encouraging vaccine trial results. Moderna's market value swelled to $29 billion -- even though the company has no marketed products.After spiking to as high as $87 on Monday, Moderna's stock price has since retreated below $70 as medical experts have debated the importance of the early findings.

'Stay engaged, our voices count': Catriona Gray urges followers to research amid #JunkTerrorBillNow movement Baby Kobe, Philippines' youngest COVID-19 survivor, dies 6 nagprotestang jeepney driver ikukulong 'hanggang makapagpiyansa' - pulisya

The securities transactions were done through automated insider trading plans, known as 10b5-1 plans, that lay out future stock trades at set prices or on set dates.Lorence Kim, Moderna's chief financial officer, exercised 241,000 options for $3 million on Monday, filings show. He then immediately sold them for $19.8 million, creating a profit of $16.8 million.

The next day, Tal Zaks, Moderna's chief medical officer, spent $1.5 million to exercise options. He immediately sold the shares for $9.77 million, triggering a profit of $8.2 million.Moderna said the sales were executed under 10b5-1 trading plans that were established in advance."These transactions are executing automatically pursuant to these trading plans," the company said.

Although the fortuitous timing of the transactions may raise eyebrows, Charles Whitehead, professor at Cornell Law School, said the stock sales did not appear to raise any legal red flags."On its face, there is nothing wrong with these trades," Whitehead said."It's what a 10b5-1 plan is intended for, assuming the requirements are met."

These plans regulate when and how many shares company insiders, including directors and executives, are allowed to sell. The transactions are typically executed automatically, without the insiders taking any action.Kim, the CFO, also made stock sales prior to the vaccine news. On May 15, just days before the results were announced, Kim sold 20,000 shares of stock worth $1.3 million.

Moderna's stock has since retreatedAndrew Gordon, director of research services at Equilar, said there would only be a"legal issue if they created or modified their 10b5-1 plan while in possession of material insider information.""It's not uncommon for insiders to sell shares they own, nor is it bad for them to capitalize on the current stock price," Gordon said in an email.

Moderna's share price fell 10% to $71.67 on Tuesday after health website STAT reported that vaccine experts concluded the company did not release enough information to know how significant the Phase 1 findings are.By Thursday, Moderna finished at $67.05, down 16% from its Monday close.

UNHRC: PH rights violations stem from govt ‘heavy-handed approach’ vs security threats, drugs Withdrawal of Anti-Terror Bill authorship ‘not a face-saving move’ — Biazon UP ranked No. 65 among top Asian universities

"It'll look bad from a PR perspective if Moderna's stock price starts to fall dramatically after all this trading," Gordon said.Moderna shares did rebound 2% to $68.60 on Friday after Dr. Anthony Fauci, the nation's top infectious disease expert, cheered the vaccine trial findings.

"Although the numbers were limited, it was quite good news because it reached and went over an important hurdle in the development of vaccines," Fauci said during a CNN town hall. That's the reason why I'm cautiously optimistic about it."

'Optics are terrible'Moderna is one of the early frontrunners to develop a vaccine for Covid-19, which has killed more than 90,000 Americans. The biotech company's vaccine produces neutralizing antibodies that bind to the virus and disable it from attacking human cells.

Moderna said its trial vaccinated dozens of participants and measured antibodies in eight of them. All eight developed neutralizing antibodies to the virus at levels reaching or exceeding the levels seen in people who have naturally recovered from Covid-19, the company said.

If future studies go well, Moderna has said its vaccine could be available to the public as early as January.Charles Elson, a corporate governance expert at the University of Delaware, said the Moderna stock sales underscore why he has always believed executives should not sell stock while they are at the company.

"Even if it can be done legally, the optics are terrible because it shows you have a better place to put your money," said Elson."It shows a lack of confidence in your company going forward." Read more: CNN Philippines »

Results are more than promising with minimal side effect. Its efficacy is quite high. I bet on this!

At least 80 million babies missing out on vaccines worldwide, WHO saysAs many as 80 million babies worldwide are missing out on vaccines because of the coronavirus pandemic, the World Health Organization said Кто с этим согласен?

Coronavirus infections top 5 million worldwideFlu infections 35 million

AstraZeneca obtains $1 billion from US to help fund coronavirus vaccine

Individuals tested positive using rapid test kits urged to submit swab samplesCEBU CITY, Philippines - The Department of Health in Central Visayas (DOH - 7) is encouraging persons who tested positive under rapid antibody tests to submit their swab samples for coronavirus

#ReliefPH: Help badly-hit towns recover from Typhoon AmboWith their disaster funds already nearly depleted by coronavirus-related preparations, local governments and groups appeal to the public to help their towns recover from Typhoon Ambo. AmboPH ReliefPH In your dreams..u lock us all up..take away our income,starve our families and ask us to give u money just Because it's all been stolen by officials?.. fantasy life u lead..

Filipinos in Canada meat plant being scapegoated for Covid spreadFilipinos say they are being scapegoated for the spread of the coronavirus because nearly 70 percent of the workers at the Cargill meat plant in High River, the site of Canada’s largest outbreak of COVID-19, are of Filipino descent. | INQdotnetUSA INQdotnetUSA What Fil-Can Associations doing to help them? Kababayan nyo yan hoy!