As the pandemic began to rage a year ago, the biopharma industry responded in unprecedented fashion. Life sciences companies raced to find a solution to the nightmare virus, and promising vaccine efforts soon emerged. The stocks of the companies with the best vaccine candidates soared, and many of their executives rushed to sell shares with a fury that generated scrutiny.
There has been one huge exception. Uğur Şahin, the CEO and scientist behind the first Covid-19 vaccine authorized in the U.S., has not sold a single share of his company’s booming stock during the pandemic, Securities and Exchange Commission filings show.
Şahin’s decision to not sell any of his BioNTech shares stands in stark contrast to the large stock sales of some of the most prominent scientists and entrepreneurs whose biotechnology companies developed vaccines against the virus, particularly Moderna Therapeutics. It also reflects Şahin’s general approach to life and business. He is a CEO who lives in a modest apartment in the German town of Mainz, rides his bicycle to work and doesn’t own a car. He describes himself on his LinkedIn page first and foremost as a translational oncology professor at University Medical Center Mainz. Şahin accepts the financial edifice that surrounds biotechnology innovation—the venture fundraising, IPOs and merger deals. He reportedly learned the business aspects of biotechnology from online videos and reading a Business Plans for Dummies book. But in the end, Şahin is in it for the science and the patients.
In its hour of greatest need, Şahin emerged from relative obscurity to provide the world with a game-changing vaccine that could save lives and tame the pandemic. As early as January 2020, Şahin became convinced Covid-19 would become a deadly pandemic and pivoted BioNTech to create a messenger RNA vaccine to combat it. He then partnered with U.S. pharmaceutical giant Pfizer PFE +0.3% to develop and supply 3 billion doses of the vaccine to the world by the end of 2021.
The Pfizer-BioNTech vaccine has radically changed Wall Street’s perception of BioNTech. In the months prior to the pandemic, Şahin had come to New York to sell investors on BioNTech’s stock as the company launched its initial public offering by listing on Nasdaq NDAQ +0.7%. At the time, BioNTech was a decade-old company that had yet to develop a single approved product from its mRNA and immunotherapy technologies. Şahin received a cool reception in the stock market, which initially valued BioNTech at $3.4 billion. With the development of the vaccine, however, BioNTech’s stock has risen by 900% since its 2019 IPO and today the company is valued at $37 billion. BioNTech now expects to generate $11.5 billion of revenue under deals for the vaccine that have already been struck. On paper, Şahin’s BioNTech stake is worth $6.1 billion. MORE FOR YOUHow Troubled Trader Bill Hwang Quietly Amassed $10 BillionHow Indiana University Bros Fueled A Hollywood Actor’s $690 Million Ponzi SchemePfizer CEO Albert Bourla Helped Save The World. Can He Save His Company’s Stock?
Filings made to the Securities & Exchange Commission in February and March show that Şahin controls 41.66 million BioNTech shares, a 17% stake, through Medine GmbH, a limited liability company he solely owns. Medine holds a relatively small number of shares for “a former colleague” and transferred 27,540 shares held for other colleagues to their beneficiaries under trust arrangements late last year. But amid this stock transfer, a securities filing in February made sure to point out that “Neither Medine GbmH nor Prof. Ugur Sahin, M.D. has sold any ordinary shares since February 13, 2020,” the eve of the pandemic. Such worded disclosures are not common in securities filings. Şahin, who declined to comment, appears to have wanted people to understand he wasn’t selling any BioNTech stock.
Last year, executives and directors of companies like Moderna, Pfizer and Novavax NVAX -6% realized stock gains linked to investor enthusiasm around the vaccines by selling nearly $500 million of stock, the Wall Street Journal reported. The selling has continued this year. Moderna CEO Stephane Bancel has sold more than $150 million of Moderna stock since the start of the pandemic. He still owns just under 8% of Moderna. Tal Zaks has sold more than $100 million of Moderna stock, nearly all the shares he had accumulated since becoming Moderna’s chief medical officer in 2015.
Moderna has consistently explained that all executive stock sales are made through preset trading plans established under securities regulatory rule 10b5-1, which legally allows corporate insiders to periodically sell a predetermined number of shares, often tied to certain share price targets being attained.
In November, Pfizer CEO Albert Bourla sold about 60% of his stock in the company for about $5.6 million under a preset 10b5-1 plan. The sale came on the same day that Pfizer announced key clinical results showing that its Covid-19 vaccine was more than 90% effective. Bourla’s share sale had been authorized in February 2020 and updated in August. A few days later, Jay Clayton, then chairman of the SEC, suggested corporate executives not trade in their company’s stock immediately after preset trading plans are established. At a Senate hearing, Clayton called for a “cooling-off” period, but did not specify the length of such an interval. “Whether that’s four months so you cover a full quarter, or it’s six months—I can make arguments for either,” Clayton said. There was also some concern the insider stock sales by Moderna and Pfizer might undermine the public perception of their vaccines as crucial public health tools.
For his part, Şahin has not sold any BioNTech stock in the last 18 months. The post-IPO lockup of his BioNTech shares expired around the start of the pandemic, securities filings show, and he was free to sell. As a result of hanging on to all the shares, ironically, he is for now much richer—at least on paper—given the continued surge of BioNTech’s stock price. He certainly believes the company’s cutting-edge technology will lead to the development of therapies and vaccines for other diseases.
“Our way of developing our technologies is not based on the idea of a single-trick pony,” Şahin told investors on a Wall Street call in March. “Rather, our goal from the very beginning was to build a novel industrial approach for precision pharmaceuticals that can address medical need in multiple disease areas.”
By Nathan Vardi, Forbes Staff