Moderna execs raise eyebrows for selling stocks after vax announcement

May 27, 2020

Just two days after announcing encouraging early results from a trial of its coronavirus vaccine candidate, four of Moderna’s top executives raked in $29 million in gains from selling some of their company shares.

The sell-offs were legal under the Securities and Exchange Commission rule 10b5-1, which allows executives to pre-plan sales of their shares. Often the goal of executives is to diversify their holdings and create liquidity, and pre-planning the sales helps shield them from accusations of insider trading. But analysts have questioned Moderna’s timing of the vaccine trial announcement, which boosted the price of Moderna’s stocks ahead of the sales.

Skeptics were already weary of Moderna’s announcement last week, given the thin data used to promote positive results. In the announcement, Moderna reported on the outcome for a trial with just 45 volunteers and said that the vaccine was successful in creating antibodies in eight of the participants. The company said, however, that the primary aim of the study was to see if the drug triggered negative side effects, and only minor side effects were observed in its 45 participants. Yet, the announcement increased the value of Moderna’s stock price by nearly 20 percent in one day. 

There are also now concerns that the sell-off could indicate that the executives don’t have confidence in the company’s prospects. Moderna has never had a product approved by the FDA and its coronavirus vaccine candidate is based on mRNA technology, which has also never been approved by regulators for human use.

All told, StatNews reports that the company’s top five executives have sold off $89 million in stocks this year so far. But despite those sales, many of the executives still hold sizable shares of the company.