Securities transactions are made through automated domestic trading plans, known as 10b5-1 plans, which determine future stock transactions at specified prices or on specified dates.
Lawrence Kim, Moderna’s chief financial officer, exercised 241,000 options for $ 3 million on Monday, movies show. He then immediately sold them for $ 19.8 million, generating a profit of $ 1
The next day, Tal Sachs, Moderna’s chief physician, spent $ 1.5 million on exercise. He immediately sold the shares for $ 9.77 million, resulting in a profit of $ 8.2 million.
Modern did not respond to a request for comment.
Although a random transaction schedule could raise eyebrows, Charles Whitehead, a professor at Cornell Law School, said stock sales did not appear to have raised legal red flags.
“There’s nothing wrong with him in these deals,” Whitehead said. “Plan 10b5-1 is intended for this, provided that the requirements are met.”
These plans regulate when and how many insiders of companies, including directors and CEOs, can sell. Normally, transactions are executed automatically without any internal action.
Kim, the chief financial officer, also made stock sales ahead of news of the vaccine. On May 15, just days before the results were announced, Kim sold 20,000 shares of shares worth $ 1.3 million.
Moderna’s stocks have since been withdrawn
Andrew Gordon, director of research at Equilar, said “there will only be a legal problem if they create or modify their 10b5-1 plan while they have significant inside information”.
“It’s not uncommon for insiders to sell their shares, and it’s not bad for them to take advantage of the current share price,” Gordon said in an email.
Moderna’s share price fell 10 percent to $ 71.67 on Tuesday after health website STAT said vaccination experts concluded the company had not provided enough information to know how significant Phase 1 results were.
By Thursday, Moderna had finished with $ 67.05, down 16 percent from Monday’s close.
“It will look bad from a PR point of view if Moderna’s share price starts to drop dramatically after all this trading,” Gordon said.
“Although their numbers were limited, this was pretty good news as it reached and overcame an important hurdle in vaccine development,” Foci said during a CNN mayoralty. This is why I am cautiously optimistic about it. ”
“The optics are terrible”
Modern is one of the first participants in the development of a vaccine for Covid-19, which killed more than 90,000 Americans. The biotechnology company’s vaccine produces neutralizing antibodies that bind to the virus and prevent it from attacking human cells.
Moderna said her experience vaccinated dozens of participants and measured antibodies in eight of them. All eight have developed neutralizing antibodies against the virus at levels reaching or exceeding those seen in humans who have naturally recovered from Covid-19, the company said.
If future research goes well, Moderna said her vaccine could be available to the public as early as January.
Charles Elson, a corporate governance expert at the University of Delaware, said the sale of shares in Moderna underscores why he has always believed that executives should not sell shares while they are in the company.
“Even if it can be done legally, the optics are awful because it shows you have a better place to invest your money,” Elson said. “It shows a lack of confidence in your company to move forward.”