Moderna Financial Model

• Core technology: mRNA is treated as programmable "software of life" - only the coding region (ORF) changes per drug; formulation, 5' and 3' regions are identical across programs within a modality.
• Key advantages over small molecules and biologics: (1) product abundance - hundreds of previously undruggable intracellular and membrane-bound targets; (2) speed - idea to DC nomination in 7–12 months; (3) lower COGS potential - cell-free manufacturing, single manufacturing infrastructure serves entire pipeline.
• Platform generates "modalities" (therapeutic toolkits): Prophylactic Vaccines, Therapeutic Vaccines, Intratumoral I/O, Localized Therapeutics - plus research-stage modalities (Secreted, Liver Intracellular, Lung).
• Research engine: >1,000 novel mRNA deliveries per month; supports parallel multi-arm partner trials.

• Total pharma/biotech global revenues (2017E): ~$1 trillion for small molecules + biologics combined.
• Small molecules: $165bn (1994) → $425bn (2004) → $600bn (2014).
• Biologics: $10bn (1994) → $55bn (2004) → $180bn (2014).
• Source: Evaluate Ltd., 01-Nov-2016.
• No SAM or SOM figures provided; no mRNA-specific market sizing given.
• Addressable indication breadth illustrated via bubble chart (bubble = market opportunity): prophylactic vaccines (low biology risk), therapeutic/personalized vaccines, intratumoral oncology, localized cardio, secreted therapeutics, liver intracellular, and longer-term CNS/ophthalmology - no dollar figures per segment.
• CMV annual US cost: $2bn (Cannon et al., BMC, 2005).

Three revenue streams - all B2B / institutional; no consumer product sales:

1. Partnership upfronts & technical milestones - large pharma/biotech pays Moderna upfront + milestones for access to modalities/programs. Partners as of May 2017: Merck ($65mm prophylactic vx + $200mm therapeutic vx), AstraZeneca ($370mm intratumoral I/O + localized), Bill & Melinda Gates Foundation ($100mm potential, secreted), Alexion ($100mm, liver intracellular), Vertex ($20mm, lung).
2. Reimbursement & product milestones - R&D cost reimbursement and clinical/regulatory milestone payments from partners.
3. Government grants - DARPA, BARDA (non-dilutive).

No royalty or commercial revenue stream disclosed; deck is pre-commercialization.

Pipeline breadth:

• 12 development candidates (DCs) nominated; 5 in clinical trials (Phase I) as of May 2017; 2 additional INDs opened by FDA; 5 DCs in pre-clinical.
• DC count at year-end: 0 (2012) → 1 (2014) → 7 (2015) → 12 (today).
• Drugs in clinical trials: 0 (2012–2014) → 1 (2015) → 5 (today).

Financing sources (cumulative through 2016): | Line | Founding–2012 | 2013 | 2014 | 2015 | 2016 | Total | | -- | -- | -- | -- | -- | -- | -- | | Partnership upfronts & tech milestones | - | $240mm | $100mm | $110mm | $290mm | $740mm | | Reimbursement & product milestones | - | $2mm | $6mm | $12mm | $36mm | $56mm | | Equity issuance | $39mm | $110mm | $471mm | $56mm | $474mm | $1,150mm | | Total sources of cash | $39mm | $352mm | $577mm | $178mm | $800mm | $1,946mm | | Potential total grant | - | $22mm | - | - | $225mm | $247mm | | Grand total potential | $39mm | $374mm | $577mm | $178mm | $1,025mm | $2,193mm | | Year-end cash | $22mm | $330mm | $796mm | $802mm | $1,307mm | - |

Cash position: $1.22bn at end of Q1 2017; >$200mm of grants available.

Cash burn / outflows: | Line | Founding–2012 | 2013 | 2014 | 2015 | 2016E | 2017E Budget | | -- | -- | -- | -- | -- | -- | -- | | R&D | $(8mm) | $(24mm) | $(61mm) | $(124mm) | $(225mm) | - | | G&A | $(7mm) | $(13mm) | $(18mm) | $(20mm) | $(32mm) | - | | CapEx | $(2mm) | $(4mm) | $(17mm) | $(28mm) | $(39mm) | - | | Gross outflows (OpEx + CapEx) | $(17mm) | $(41mm) | $(96mm) | $(172mm) | $(296mm) | >($300mm) | | Year-end cash | $22mm | $330mm | $796mm | $802mm | $1,307mm | ~$1,000mm |

Team: 500 employees, including 300+ scientists and engineers on platform R&D. Platform investment: $100mm annual investment in mRNA platform.

Clinical data (H10N8 flu vaccine, mRNA-1440): 100% seroprotection (HAI ≥1:40) in 23/23 subjects at 100µg dose; 87% MN seroprotection; 0% in placebo.

• Moat framing: platform de-risking (if mRNA works once, it works many times); proprietary integrated platform (chemistry, bioinformatics, mRNA engineering, formulation, process, raw materials).
• vs. small molecules: conventional drug discovery increasingly risky (low-hanging targets gone; N=1 per molecule).
• vs. recombinant biologics: mRNA can reach intracellular and membrane-bound proteins that biologics cannot.
• No named competitors identified in the deck; competition discussed only in abstract vs. incumbent modalities.
• IP / defensibility: forward-looking statements mention IP enforcement capability; no patent specifics disclosed.

• Team: 500 people total; 300+ scientists/engineers on platform; industry-leading talent stated as a key asset.
• Leadership named in deck: implied Tal Zaks (CMO, named in publication credit on slide 22); Giuseppe Ciaramella (also named in publication); no CEO/CFO slide.
• Funding ask: Not explicitly stated (no "Use of Proceeds" slide; no round size or valuation disclosed).
• Implied use of funds: sustain $300mm+ annual cash burn (2017E); scale manufacturing (Norwood GMP site); advance 12 DCs through clinic; build platform.
• Existing investors / grants: DARPA, BARDA, Bill & Melinda Gates Foundation (non-dilutive). Equity investors not named.

• Archetype + why: Pre-revenue biotech pipeline / cash-burn model with milestone revenue waterfall. Moderna has no product sales; revenue is entirely event-driven (partner milestones, grants). The correct archetype is a biotech pipeline cash-burn + milestone revenue model - not a standard 3-statement operating model. Model tracks: (a) milestone payments by program/partner triggered by clinical events, (b) cash runway vs. burn escalation, (c) optionality value of pipeline programs reaching NDA/commercialization in the 5–10 year window.

• Forecast horizon & granularity: 2017–2027 (10 years); annual for milestones and burn; semi-annual or quarterly for cash runway to show when next capital raise is needed. 2017E budget is the anchor year.

• Key drivers & assumptions:

*Revenue / Inflows:*

• R&D reimbursement growth rate: $36mm (2016) → scale with partnership count; assume ~15–20% annual growth
• Partnership milestone payments per program per stage (IND, Ph I, Ph II, NDA, approval): provides total upfronts by partner but no per-stage breakdown; assume clinical milestone tranches typical for mid-pharma deals ($10–50mm per Ph I readout)
• New partnership probability and upfront size: 2–3 new partners per year at $50–200mm upfront
• Grant income: ~$47mm/year average (2016: $225mm was exceptional/BARDA); normalize to $30–50mm/year

*Outflows / Burn:*

• R&D spend: $225mm (2016E); 2017E >$300mm gross outflows stated; assume ~$275mm R&D component of that growing 20–25% annually as pipeline expands
• G&A: $32mm (2016E); grow ~15% annually
• CapEx: $39mm (2016E); ramp to ~$60–80mm by 2019 for Norwood GMP scale-up, then normalise
• Net burn: ~($260mm) in 2016; 2017E >($300mm)

*Cash & Runway:*

• Starting cash: $1,220mm (Q1 2017)
• Runway at current burn: ~4 years without additional fundraising
• Runway toggle: model equity raise triggers (e.g., when cash falls below $500mm floor)

*Pipeline progression (binary event schedule):*

• mRNA-1440, mRNA-1851: Phase I ongoing (Dec 2015, May 2016) → Ph II readout assumed 2018–2019
• mRNA-1325 (Zika): Ph I started Dec 2016 → readout 2018; DARPA/BARDA grant-funded
• mRNA-1647 (CMV): IND filing 2017 → Ph I start 2017–2018
• mRNA-4157 (PCV, Merck): IND filed → Ph I 2017–2018
• mRNA AZD-8601 (VEGF-A, AZ): Ph I started Jan 2017 → readout 2018–2019
• Assume 1 NDA filing in the 5-year window (most likely mRNA-1647 CMV or mRNA-1325 pandemic vaccine given urgency)

• Scenarios (Base / Bull / Bear):
• *Base:* 2 programs reach Ph II, 1 reaches NDA by 2027; burn grows 20%/year; 1 new equity raise ($500mm) in 2020; year-end cash never falls below $300mm.
• *Bull:* 4 programs reach Ph II, 2 reach NDA; 2–3 additional major partnership deals ($200mm+ each); IPO 2018–2019 raises $600mm+.
• *Bear:* 1–2 Phase I failures trigger partner pullback; burn continues; cash runway exhausted by 2021 without additional raise; no NDA before 2028.
• Key flexed variables: program success rate, partnership upfront size, R&D burn rate, timing to NDA.

• Required sheets / outputs:

1. Assumptions - all drivers in one place, toggleable by scenario
2. Pipeline tracker - 12 DCs by program, stage gate, milestone trigger, partner, milestone amount
3. P&L / Burn statement - annual R&D, G&A, CapEx, net cash burn (mirrors slide 37 structure)
4. Cash flow & runway - starting cash, inflows (milestones + grants + equity), outflows, year-end cash; runway in months
5. Milestone waterfall - probability-weighted milestone revenue by program by year (expected value)
6. Sensitivity table - burn rate × milestone timing; runway months as output
7. Summary dashboard - year-end cash, active programs in clinic, cumulative milestones received, runway