AstraZeneca cashes in on Moderna, collecting $1B-plus as COVID-19 added rocket fuel to the mRNA biotech's shares

Hand reaching into or pulling out of cash register
AstraZeneca has sold its entire 7.65% stake in COVID-19 vaccine maker Moderna despite ongoing collaborations on mRNA technology. (ToTo Label / Shutterstock)

Moderna executives aren’t the only ones who have benefited from the mRNA specialist’s surging stock price during its work on the COVID-19 vaccine.

AstraZeneca cashed in its entire 7.65% take in Moderna for about $1 billion, the British pharma disclosed in its annual report (PDF). It wasn’t clear exactly when in 2020 AZ made the sale.

The revelation came weeks after Merck & Co. disclosed that it had sold off its direct Moderna holdings in the first half of the fourth quarter.

Over the years, AstraZeneca invested $290 million in Moderna equity amid a slew of strategic collaborations, the U.S. biotech said in its own annual report.

At whatever point AstraZeneca sold out last year, the company made quite a fortune. From slimming down its equity portfolio in 2020, AZ collected $1.38 billion, “a large proportion of which related to the disposal of its full holding in Moderna,” the British drugmaker said in its annual report.

In 2020, Moderna’s share price surged from just below $20 apiece to about $95 in July when it published encouraging early results from a phase 1 study of its mRNA vaccine against COVID-19, mRNA-1273. And it further jumped to nearly $160 toward the end of the year based on positive phase 3 readouts and a subsequent FDA emergency use authorization.

RELATED: Merck cashes in on Moderna COVID-19 vaccine enthusiasm with sale of equity stake

As for Merck, the New Jersey pharma had previously invested about $183 million in Moderna mostly in connection with a cancer vaccine collaboration between the two firms.

Despite the stock selloff, AZ retains two collaborative R&D programs with Moderna dating back to as early as 2013. One centers on MEDI1191, an mRNA for proinflammatory cytokine IL-12 designed to be delivered directly into a tumor. A phase 1 trial is testing the drug in combination with AZ’s PD-L1 inhibitor Imfinzi.

The other features AZD8601, which produces VEGF-A as a way to promote cardiac tissue regeneration. A phase 1a/b trial has shown promising results, and AZ just moved it into a phase 2a test in coronary artery bypass patients.

RELATED: Moderna has sewn up $18B in COVID-19 vaccine orders—and it's negotiating more

The two previously had a third collaboration focused on mRNA encoding for a relaxin protein, which is known to have cardiovascular protective effects. But AZ returned rights to that potential heart failure candidate at the end of 2020.

Had AZ and Merck waited slightly longer, they might have been able to reap even bigger returns on their Moderna investments. Moderna’s stock hit a high of nearly $190 per share at news of an additional purchase of 100 million doses of mRNA-1273 from the U.S. government. All told, the company has signed procurement agreements worth $18.4 billion for the COVID-19 shot for deliveries in 2021, and the number could further increase as supply talks are underway, the company said last week.