by David Reavill
We’ll call it the Moderna Marketing Model, which is the solution every marketer dreams about. A gift that keeps on giving.
Moderna, as you know, is one of the principal producers of the Covid-19 Vaccine. And while you may assume that the Vaccine has been an absolute windfall for Moderna, you may not fully appreciate just how much the Vaccine has meant to Moderna.
Last week, Stephan Bancel, Moderna’s CEO, testified before the Senate Committee on Health, Education, Labor, and Pensions. In his statement before the committee, Mr. Bancel described how Moderna, the company, could not turn a profit in the more than ten years before the Covid Pandemic.
Although the company had dozens of the best and brightest researchers in the field and benefited from millions of dollars in grants and investments, they had yet to find that particular market niche that would make them profitable. In fact, in their fiscal year 2020, the year before Moderna’s vaccine production began, the company lost $747 million—a tremendous loss that is unsustainable by most start-ups. Few, if any, investors would remain with a company that for ten years turned in financial loss after loss and then reports that the losses have grown to a whopping $3/4ers billion. But the investors hung in there for Moderna and were rewarded the very next year.
Over the Christmas Holiday in 2019, Bancel notes that he read about a novel virus unleashed in Wuhan, China. Exactly how he knew, or what he saw in the Novel Corona Virus, he doesn’t say. But somehow, he knew that this might be his ticket to success.
For all of 2020, Moderna apparently went into comprehensive research and production mode. Because by the end of those 12 months, Moderna had not only developed their Vaccine but by using subcontracting companies, Moderna was able to ramp up to full production in 2021.
Just how incredible this transformation between 2020 and 2021 was for Moderna cannot be overstated. The company is on the block for one year, losing so much money that the average financial advisor might recommend throwing in the towel. And the very next year, Moderna jumped to the company that ranked #106 highest revenue in the World. That’s right, Moderna’s $12 billion in revenue ranked in number 106 in worldwide private, non-government companies.
That, at least, is how Forbes and Wikipedia determine their lists of the top revenue-producing companies. They exclude companies partly owned and managed by their governments, such as Saudi Arabia’s Aramco, Mexico’s Pemex, or China’s National Petroleum.
This is because the Government owned and controlled companies have certain advantages over those that are exclusively private enterprises. Government-sponsored companies benefit from unlimited funding, selected marketing advantages, and regulatory advantages as the Government can wave specific regulations controlling their operation.
Wait just a minute! Isn’t that just what our Government did for Moderna? And indeed, all of the Vaccine Makers?
On page 4 of Bancel’s written testimony before the Senate, he reports that BARDA, the Biomedical Advanced Research and Development Authority of the US Government, gave Moderna a $1.7 billion grant. Although Bancel doesn’t provide the exact date of the Grant, it must have occurred sometime in 2020.
In other words, we are to assume that the Grant was given for a vaccine for the Novel Corona Virus, which Bancel first heard about in December of 2019, but before the entire year of production in 2021. This would explain why Moderna investors were more than willing to stay with the company despite its horrendous operational loss. In short, the Federal Government bailed Moderna out.
But the Government’s generosity was far from over. Wall Street analysts estimate that the cost of production for a Moderna vaccine was about $3 or $4 per dose. However, the Fed’s paid more than $25. We have yet to be told precisely how that sum was arrived at. However, that’s a pretty good profit markup.
The year before the Vaccine was rolled out (2020), total product sales for Moderna were a mere $200 million. In 2021 when Moderna first delivered the Vaccine, product sales jumped to $17 billion, and the following year $18 billion. That explains Moderna’s jump in overall income.
And over those two years, 2021 and 2022, Moderna records more than $20 billion in profits. That’s a profit margin of over 50%. And one of the most significant profit markups I’ve ever seen. Through our Government, somebody, namely us taxpayers, was paying a premium price for these shots.
Once again, our Government was not finished providing Moderna with a complete government aid package. There’s that little thing of regulations and approvals. And just like that, the Food and Drug Administration (FDA), a government entity, was able to help. The FDA was able to rush through the Emergency Use Authorization even though the VAERS, the Vaccine Adverse Event Reporting System, was recording numerous reports of Vaccine injury. Currently, VAERS has over 2 million Adverse reports on their system (www.openvaers.com)
The story of Moderna, and all the Vaccine producers, shows just how far our Government is willing to go to support those projects and plans they want to implement. Unfortunately, once this kind of government policy begins, stopping is difficult, if not impossible.
Realize that every major corporation in the country now looks to Moderna as the way to become profitable. Market to the US Government, and you too can have incredible sales, relaxed regulations, and even capital funding if you need financial help.
It’s Moderna’s Marketing Magic, how to make billions from the US Taxpayer… er, I mean Government…