Moderna makes its first-ever acquisition, buying Japanese DNA manufacturer OriCiro for $85M

After a game-changing two years for Moderna—both in terms of growth and therapeutic impact—2022 could be seen as a critical inflection point for the company. The race to develop and administer COVID-19 vaccines had significantly slowed, and discussions about what’s next for the Flagship-founded mRNA behemoth began to permeate to the top of investor calls. High up the list of questions: With the company flush with cash and biotech valuations low, will Moderna turn to M&A?

Now, we have an answer, albeit a sample size. Moderna is buying Japanese DNA supplier OriCiro Genomics K.K. for $85 million, the U.S. company’s first acquisition since launching in 2010. It’s not the major splash that some may have expected, or even hoped for, but in many ways it fits the tea leaves executives had teased all last year.

In an interview with Fierce Biotech this morning, Moderna CEO Stéphane Bancel said OriCiro’s technology is a critical upgrade in the conveyor-beltlike path that is Moderna's clinical development. 

“It's faster product to clinic, faster product to market,” he said. “And then the research part is: We can iterate much faster.” 

Scooping up OriCiro is a tactical corporate upgrade versus a gargantuan upheaval, adding on cell-free assembly and amplification of DNA rather than relying on E. coli. Whereas E. coli cloning can take several days, OriCiro’s amplification process takes hours—which Bancel says could reduce large-scale manufacturing time by up to 30%. 

The move follows quarterly hints from Bancel about the company’s business development effort. In May, the CEO said his team had “never been as busy” with respect to M&A considerations. Throughout the year, Bancel said Moderna was focused on other targets that could expand the company’s budding nucleic capabilities, rather than, in his words, “doing a large acquisition for the sake of large acquisition.” 

And while OriCiro is Moderna’s first acquisition, the almost 13-year-old company has been bullish in its licensing strategy. Moderna's joint collaboration with Merck combining the former’s cancer immunotherapy with Keytruda just passed a phase 2 test, improving recurrence-free survival in melanoma patients compared to Keytruda alone. Merck had opted into the deal two months earlier, handing Moderna $250 million. 

The OriCiro buy doesn't eliminate the prospect of Moderna acquiring a therapeutics company, but its focus on nucleic acid is unchanged. Bancel says that would include gene therapy and gene editing companies, but not, for example, biotechs focused on small molecules.

“They might be helpful for the sales next year or stuff like that, but we're not solving for that,” he said. “We’re solving for [the] best RNA company because we believe that science is going to generate, for this platform, so many medicines.”