Hi, friends. 👋🏻👋🏻
I missed the beat last week, but now I’m back. Had some personal issues to attend to as I learned a college friend passed away. Moments like these remind me that life is short. There is never a better time than now (or now + 1) to get started on something that you’ve always wanted to do. Because sometimes life ends up being a lot shorter than you expect.
Anyway…as always, thanks for reading!
And, wow, is a lot going on. I think 2020 broke the world. It’s like 2020 showed everyone that the rules don’t make sense and all the rules exist only because we say it exists. 2021 feels a lot like everyone coming out of 2020 and deciding that everything is just going to be different.
Yes, let’s just beach a ship sideways in the Suez Canal like a beached whale…🤯🤯 Last I heard, it was blamed on weather, but the authorities don’t think that’s the reason.
The global economy is quite an amazing thing. It’s incredibly complex and brings together businesses from around the world. Even simple products can involve suppliers and merchants working thousands of miles apart.
Yet, despite the complexity of the system, it remains incredibly fragile with limited fall-backs.
We saw it with COVID-19 and how it threatened to unravel the whole world’s supply chains. And now we’re seeing even more of it with the Suez Canal (and the slow-burning issues and supply shortages around semiconductors).
What’s clear is that digitizing the economy has not led to greater flexibility and control over our supply chains (yet). It has only created more flexibility for consumers / buyers and the very-front-end that interfaces and sells to them. Supply chains, unfortunately, remain analog and inflexible.
There’s probably a business opportunity there. In the next 10 years, whoever can bring greater flexibility to supply chains will likely create the next $1 trillion+ business.
🤑 Economics
#1 Why the Suez Canal is so important — and why its blockage could be so damaging
Since it was completed in 1869, the Suez Canal has been one of the world’s most important bodies of water; a portal between East and West that has been controlled by multiple countries, threatened to ignite war, and become a bedrock of the global economy.
But the mammoth container ship that has lodged itself across the waterway poses a very modern problem: About a tenth of global trade passes through the Suez Canal, and it could be facing a weeks-long blockage.
Source: CNN
I’m sure you’re all meme’d out on the Suez Canal blockage…but it’s important to dig deeper (pun intended).
This CNN piece does a decent job at highlighting the history and context of the canal and is a very quick read.
While this disruption seems very far away from our own personal troubles here in the developed word, it will likely have an impact on trade and trading costs later this year. And that impact on trade could easily lead to visible impacts on inflation. Even if the impact is temporary, it may further stoke the fears of higher inflation and higher interest rates on top of the fears that we have already seen with rising interest rates since the start of the year.
It’s really a marvel how unbelievably coincidental that two of the world’s most important arteries (goods trade through Suez Canal and oil trade through the Arabian Sea) both converge in on the Arabian Peninsula. Surely, if God exists, God has a sense of humor in creating such a vexing bottleneck. Not only is this region devoid of almost any resources (except oil) and hence has low potential for stability, the rest of the world is arranged in such a way where everyone else must run a meaningful portion of their affairs through this tiny bottleneck.
#2 Federal Reserve’s Digital Dollar Push Worries Wall Street
Banks, credit card companies and digital payments processors are nervously watching the push to create an electronic alternative to the paper bills Americans carry in their wallets, or what some call a digital dollar and others call a Fedcoin.
As soon as July, officials at the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology, which have been developing prototypes for a digital dollar platform, plan to unveil their research, said James Cunha, who leads the project for the Boston Fed.
A digital currency could fundamentally change the way Americans use money, leading some financial firms to lobby the Fed and Congress to slow its creation — or at least ensure they’re not cut out.
Seeing the threat to their profits, the banks’ main trade group has told Congress a digital dollar isn’t needed, while payment companies like Visa Inc. and Mastercard Inc. are trying to work with central banks to make sure the new currencies can be used on their networks.
What counts as money may change very soon. And with that, the financial system.
Obviously, the existing financial system would prefer things to remain as-is since it works well for them.
A year or two ago, the US government would have likely thought the same (since the existing financial system works well for the US, and especially for the US at the expense of foreign nations, both allies and adversaries). But lots of things have changed. And one of the key changes is that a lot of other countries, including China, are moving aggressively ahead with their own digital currency:
Other countries are further along. China is currently piloting a digital yuan in several cities. Lipsky said there’s a chance its currency could be ready for a broader debut at the 2022 Winter Olympics in Beijing, which he said could cause tensions if American athletes are asked to use a currency that the Chinese government can completely track.
Source: Bloomberg
What has protected the USD are the strong network effects, especially around custody. But the introduction of digital currencies could change this because it simultaneously introduces new currencies that have new types of network effects as well as potentially entirely circumventing the network effects created by the need for custody of physical currency. If the currency is not physical, custody of money becomes unimportant.
And banks should be rightfully scared…their entire business model is built on holding your money in one form or another (e.g. custody). In a way, banks have been operating their own version of the “Suez Canal”…your money has to go through this bottleneck of a financial system. And in the future, your money might not have to go through this bottleneck of a system.
On the market side of things, a lot of weirdness continues to percolate…including a lot of questionable behavior in SPACs.
#3 WeWork Agrees to SPAC Deal That Would Take Startup Public
WeWork has agreed to merge with a special-purpose acquisition company in a deal to take the shared-office provider public nearly two years after its high-profile failure to launch a traditional IPO.
The planned merger with the BowX Acquisition Corp. BOWX 20.29% SPAC values WeWork at $9 billion including debt, the companies announced Friday. As part of the deal, WeWork plans to raise $1.3 billion, including $800 million in what is called a private investment in public equity, or PIPE, from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others.
Source: WSJ
WeWork is no longer trying to go public at $100 billion valuation (compared to two years ago), but WeWork likely still would have had a hard time coming to market at the current lower valuation if the SPAC route wasn’t available.
There’s a lot of SPAC money out there (SPACs have raised more money YTD than in all of 2020 and 2020 was no slouch!)…as much as people like to dunk on investment banks, I would assume the hundreds of people working on a deal across all the investment banks have a higher likelihood of doing necessary due-diligence as opposed to a single-person (or small-teamed) SPAC sponsor…
Oh, and that weird market-pocalypse on Friday? Just another HF way over-levered and blowing up. It’s like Melvin Capital / GameStop, but in reverse. Instead of getting blown up on a levered short, this fund was playing the same game as retail investors and going levered long and trying to squeeze highly shorted stocks.
I’m sure it was very fun for them until Friday.
#4 Tiger Cub Hwang’s Family Office Behind Friday Trade Frenzy
The family office of former Tiger Management trader Bill Hwang was behind the unprecedented selling of some U.S. stocks Friday, according to two people directly familiar with the trades.
Archegos Capital Management was forced by its banks to sell more than $20 billion worth of shares after some positions moved against him, said the people, who asked not to be named because the details aren’t public. The companies involved ranged from Chinese technology giants to U.S. media conglomerates.
Source: Bloomberg
đź—ş Geopolitics
Speaking of bottlenecks…surely, if God exists, God’s sense of humor is infinite in creating the mother of bottlenecks for the digital world we now live in.
The digital world, a world which is supposed to free us from the chains of the physical world, has an even worse bottleneck than anything to ever happen in the purely physical world. Everything in our digital world depends on silicon / semiconductor chips, and they all happen to run through an even tinier place than the Arabian Peninsula…it all runs through Taiwan.
And much like how Iran, Saudi Arabia, Iraq, Egypt etc all have immense power over the affairs of the Suez Canal and Arabian Sea, China has enormous power over the affairs of Taiwan (not least because China officially claims Taiwan as its own territory even though it does not currently govern it).
Can money solve this problem?
#5 Money no object as governments race to build chip arsenals
Governments around the world are subsidizing the construction of semiconductor factories as a chip shortage hobbles the auto and electronics industries and highlights the world’s singular dependence on Taiwan for vital supplies.
But beyond a consensus that something must be done to diversify supplies, divisions over strategy are emerging along with concerns that free-spending governments could spur over-building in an industry that has historically been highly cyclical.
Governments in the United States, the European Union and Japan are contemplating spending tens of billions of dollars on cutting-edge “fabs,” or chip fabrication plants, as unease grows that more than two-thirds of advanced computing chips are manufactured in Taiwan. Earlier this week, a top U.S. military commander told U.S. lawmakers that a Chinese takeover of the island was the military’s foremost concern in the Pacific.
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“We’re in a situation now where every country is going to want to build their own fab,” Dan Hutcheson, chief executive officer of VLSI Research, told Reuters. “We’re going from this global interconnectedness to vertical silos everywhere.”
In Japan, Canon Inc, Tokyo Electron Ltd and Screen Semiconductor Electron will join a government funded 42 billion yen ($385 million) program that will work with firms such as TSMC to develop advanced 2-nanometer chips. Japan wants to ensure it is able to build advanced semiconductors in the future and aims to build a test line near Tokyo with help from TSMC.
Even India, with little chip manufacturing infrastructure, hopes to build on its strengths as a design center for global chip firms and lure factories with new subsidy programs.
Source: Reuters
So…the US, Japan, India, and Europe are all now trying to build their own fabs to remediate this bottleneck.
The question is whether money is all that is necessary. China has spent an inordinate amount of money over the last 20 years to try to do the same and create fabs on the mainland to limited success. If money is all that is necessary, China would have caught up by now (since they have outspent TSMC by more than 5x already). Good luck to all.
#6 Intel Decides to Engineer Its Fab-Filled Future After All
Newly anointed Intel chief executive officer Pat Gelsinger held the coming out party for his strategy to get the world’s largest chip manufacturer and designer back on track, called “Intel Unleashed: Engineering The Future,” on Tuesday after the market closed.
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No one really believed that Intel was going to open up its foundry, and Intel really didn’t. But this time around, according to Gelsinger, Intel is dead serious, starting with a $20 billion investment in two chip fabs in its Ocotillo campus in Chandler, Arizona. This is where Fab 42, which is shown in the feature image above is located, and also where Intel’s ill-fated 10 nanometer manufacturing processes are operating in production (finally). Intel is not being precise about what these two foundries will be doing, but Gelsinger confirmed that they would be doing extreme ultraviolet, or EUV for short, lithography techniques and that means 7 nanometer or smaller transistor geometries. Gelsinger added that the company would be expanding foundry capacity elsewhere in the United States and in Europe, and would be making announcements about when and where before the end of the year.
Source: The Next Platform
Intel made a lot of noise a few days ago when it officially announced that it would launch foundry services and aim to create leading-edge foundries in the US and Europe. Despite Intel’s failings in recent years (which allowed TSMC to overtake it to assume the pole position in manufacturing process), Intel has a lot of resources and smart people. While dismissing Intel is probably the easy decision, I wouldn’t count Intel out just yet, especially with geopolitics wanting Intel to succeed.
Can Intel close the gap with TSMC, and do it on US soil? Also note that TSMC and Samsung are both in the process of putting up fabs in the US as well (but will be less cutting edge than what they have in Taiwan and Korea, respectively).
#7 Biden Finds a Key Ally Wary of His Bid to Outpace China on Chips
South Korea has long relied on the U.S. for security and on China for trade, seeking to keep politics out of business to avoid picking sides.
That geopolitical balancing act is becoming increasingly untenable as Washington and Beijing square off over technology.
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Yet with chips at the heart of the U.S.-China conflict, Seoul risks serious collateral damage if the superpower rivalry intensifies under presidents Joe Biden and Xi Jinping. Intel Corp.’s announcement that it’s committing to advanced chip fabrication in the U.S. dovetails with the Biden administration’s objectives of regaining the lead in technology, suggesting competition with China will only deepen.
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South Korea’s status as a world-leading chipmaker makes its predicament particularly acute, further straining its efforts to maintain good relations with both China, the destination for about a third of its exports, and the U.S., which provides security particularly to defend against North Korea’s nuclear threat.
Source: Bloomberg
Similar to how banks are concerned about the coming changes to the USD, Korea is also rightfully concerned about the coming changes to the semiconductor supply chains. Like Taiwan, Korea is a leading player in semiconductors. Korea depends on the US for protection and China for markets, and the proliferation of leading-edge fabs around the world would be bad on both fronts. The US would be less incentivized to protect Korea (the same can be said for Taiwan…since the relationship would then become purely ideological with limited commercial reasons for protecting either Taiwan or Korea), and there would potentially be more semiconductor competition.
It will be interesting to pay attention to how alliances shift. The old set of (post-World War II) alliances were alliances built partially on ideology but mostly on commercial needs. These commercial needs included access to resources like oil (which the US ensured for allies through a recurring presence in the Middle East) and access to markets (of which the US was the largest for the longest time). However, as economies become more digital, the importance of oil for GDP-generation is declining (quickly being supplanted by semiconductors), and the US is increasingly not the most important market for most trade-oriented countries. China is. A lot may change in the coming years.
đź’¬ Media
#8 Microsoft Is in Exclusive Talks to Acquire Discord
Microsoft Corp. is in advanced talks to acquire messaging platform Discord Inc. for $10 billion or more, according to people familiar with the matter, as the software giant seeks to deepen its consumer offerings.
Microsoft and Discord are in exclusive talks and could complete a deal next month, assuming the negotiations don’t fall apart, the people said.
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Its efforts to gain scale in social media have been halting. In addition to the unsuccessful TikTok talks last year, Microsoft gave up on Mixer, its videogame live-streaming service that struggled to compete with the likes ofAmazon.com Inc.’s Twitch, Alphabet Inc.’sYouTube and Facebook Gaming.
Source: WSJ
Microsoft seems to be really keen on buying something in social media. First TikTok. Then Pinterest. And now Discord. Hasn’t worked with the first two…not sure it will succeed with Discord now, though it may just depend on the price.
I would be disappointed if Discord is sold instead of doing an IPO as I think Discord is one of the more interesting social media assets out there at the moment.
#9 GeForce NOW Gets New Priority Memberships and More
As GeForce NOW enters its second year and rapidly approaches 10 million members, we’re setting our sights on fresh milestones and adding new membership offerings.
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Monthly memberships are available at $9.99 a month. A new annual membership option, at $99.99, provides the best value.
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We also get tons of questions from our community about bringing GeForce NOW to new regions. We just launched with a new partner in Turkey, with Saudia Arabia and Australia on the horizon.
Source: Nvidia
Right at the start of the pandemic last year, Nvidia launched a pretty interesting service called GeForce Now. It’s basically a game subscription service. However, rather than giving you an all-you-can-eat buffet of games, it gives you access to Nvidia’s datacenter / GPU network and allows you to do all your processing in the cloud. This removes the need for high end GPUs for gaming.
I haven’t really paid much attention to it, but after just 1 year, Nvidia now has almost 10 million members. That sounds like music to my ears. When will people start waking up to the fact that Nvidia now has a growing subscription business? Most people still think of Nvidia as a hardware business, but it’s so much more. If 10 million members pay $10 / month, that is $1.2 billion of revenues per year. Many people have poo-poo’d the idea because the concept of not owning your own GPU and relying on the cloud for processing seems almost like heresy to hardcore gamers…but the truth is most people around the world don’t own high-end GPUs and don’t even own a PC. GeForce Now might not be interesting to the 50-100 million hardcore gamers out there, but there are a whole lot more gamers out there these days beyond the hardcore base. And GeForce Now is quite well positioned for that market.
I won’t pass judgment on what a “right” multiple is, but investors are currently paying very healthy double-digit revenue multiples for subscription businesses. Meanwhile, Nvidia trades on 30-40x forward earnings. And has gone sideways for 6 months now while the rest of the semiconductor industry has gone straight up. Looks pretty good to me. Even more so because estimates look way too low. Analysts are assuming Nvidia’s business is maturing very soon, but AI trends are just getting started.
#10 ByteDance acquires gaming studio Moonton at around $4 billion valuation: sources
ByteDance said on Monday its video games unit Nuverse has agreed to acquire Shanghai-based gaming studio Moonton Technology, as it seeks to further expand into the video games business.
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Moonton Technology, founded by an ex-Tencent employee, is most famous in Southeast Asia for its multiplayer online battle arena (MOBA) game Mobile Legends.
Tencent, China’s biggest video games and social media company, made a bidding for Moonton but the offer was matched by ByteDance last week, two sources familiar with the situation told Reuters.
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The acquisition means ByteDance now has a MOBA game under its belt that could compete with Tencent’s Honor of Kings and League of Legends, both a cash cow for Tencent.
Source: Reuters
Bytedance continues to get serious about games, potentially challenging Tencent.
Will be interesting to watch what Bytedance does with their gaming business and Moonton. This could be about supercharging their China gaming business against Tencent (and Netease). However, this acquisition puts them in direct competition with Sea in Southeast Asia right now.
Sea is incredibly well managed with one of the most effective management teams I have ever seen / met. However, Bytedance is also incredibly well managed with one of the most effective management teams I have ever seen / met.
🛍 Commerce
#11 Snap acquires Berlin company that helps online shoppers pick clothes that fit properly
Snap has acquired a Berlin-based firm that helps consumers pick the right size of clothing when they shop online, the social media company said Wednesday. The companies did not disclose the size of the deal.
Fit Analytics is the maker of a product called Fit Finder, which businesses use to help online customers pick properly fitting clothes in an effort to reduce returns. Fit Finder uses machine learning and customer-provided information to make its recommendations.
Snap is acquiring the company as part of a long-term push to bring more e-commerce and in-app purchases to Snapchat. Snap is making in-app purchases a greater priority partly to balance upcoming privacy changes to Apple’s iOS devices. Those changes will make it harder for companies like Snap to track how well their ads led to purchases, spurring them to find alternative sources of revenue.
Source: CNBC
Snap and Pinterest continue to be the two platforms that seem to have very interesting latent potential in commerce. And both of them realize it and are doing smart things to unlock it.
#12 With Shopify, Small Businesses Strike Back at Amazon
For many small- and medium-size sellers, a third option has emerged, embodied by the rising star of e-commerce, Shopify. This approach gives merchants access to cloud-based third-party services such as payments and fulfillment, but lets them maintain more control of their branding and customer relationships than the biggest marketplaces offer. Shoppers might not even know they’re buying something from a Shopify-powered retailer, and that’s the point.
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For sellers, being on Amazon means giving up vital customer data like email addresses, and ceding control over returns and complaints to Amazon, both nonstarters for Material. “The whole of the customer experience is so important to us as a company,” says Ms. Byun.
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Herein lies the irony of painting Amazon as the Goliath to the David of independent online retailers, as Shopify so often does: Collectively, the world of e-commerce outside of Amazon is still bigger than Amazon. And Shopify, which is fast becoming the glue that binds 1.7 million of these retailers together and would like to be viewed as their champion, is itself a growing giant. Shopify has a valuation around $130 billion, and dwarfs its next-largest competitor, BigCommerce, which is currently valued at about $4 billion.
As it strives to become a one-stop shop for merchants who wish to sell online, it’s apparent that Shopify’s million-headed hydra is already giving Amazon heartburn. The Seattle-based tech giant has even established a secret team, called “Project Santos,” to create its own version of some parts of Shopify, The Wall Street Journal reported in December. In February, Amazon announced it had acquired Selz, an Australian company that, like Shopify and BigCommerce, helps merchants set up their own stores online.
Source: WSJ
The most important message in all that: “Collectively, the world of e-commerce outside of Amazon is still bigger than Amazon.” And Shopify has the potential to unite all the rebels against Amazon.
Recently, Zuckerberg, Daniel Ek (Spotify founder), and Tobi Lutke (Shopify founder) held an interesting podcast session together. The whole thing is worth listening to, but I found the sections around audio and commerce to be most interesting.
#13 PressClub with Mark Zuckerberg, Daniel Ek, and Tobi LĂĽtke
Zuckerberg: And and I think the progress on that — it’s still obviously early — is that we now have more than a million active shops. And more than 250 million people actively interacting with those shops every month. I think the progress in terms of being able to ramp up some of the stuff and just all the different tools that now exist,
[00:18:38]it’s really amazing. I think that the next five years are going to be really explosive in terms of the potential across a lot of these verticals. And by the way, the numbers that I shared, I don’t actually think I’ve shared them before. But I’m really proud of the progress that we’ve made there.
Source: PressClub
Not sure how much of the progress in Facebook Shops is due to Shopify, but 1 million active shops is a huge milestone given that Facebook Shops is less than a year old!
Every time I think about Facebook, I am amazed at how much potential there is for commerce. But every time I think about Facebook, all I can think about is how worried I should be about politics and regulations. The faster Facebook moves away from the political deathtraps they are wandering aimlessly about, the better for everyone.
👨‍💻 Technology
#14 China Considers Creating State-Backed Company to Oversee Tech Data
China’s government has proposed establishing a joint venture with local technology giants that would oversee the lucrative data they collect from hundreds of millions of consumers, according to people familiar with the matter.
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The online firms would be initial shareholders in the joint venture, though top executives would need to be approved by the regulator, the people said. The central bank didn’t immediately respond to a request for comment.
The proposal is among a slate of options being considered to crystallize Beijing’s goal of gaining greater control over the data amassed by online behemoths from Alibaba Group Holding Ltd. and Tencent Holdings Ltd. to up-and-comers like ByteDance Ltd. and Meituan. Companies were encouraged this month to open up data in areas from e-commerce to social media to promote healthy development of the sharing and online economies in a report that outlined the Communist Party’s priorities.
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President Xi Jinping warned this month that his government would go after so-called “platform” companies that have amassed increasing power through the data and patronage of hundreds of millions of consumers. The strongly-worded comments signaled China plans to amplify a campaign to curb the influence of its most powerful private corporations, which has so far centered mainly on Jack Ma’s Alibaba and its affiliate Ant Group Co.
Source: Bloomberg
Chinese tech stocks have been in a rut recently. While it’s hard to pinpoint a specific driver (there are many), the noise continues to ramp up.
From an investing perspective, the most benign interpretation would simply be the government wanting more control over data.
The more commercially-challenging interpretation would be that the government is concerned about lack of competition and deciding that the easiest way to create competition is to nationalize the data that currently acts as barriers to entry.
And these are not just Chinese tech company problems…these are questions that every government is asking right now. I wouldn’t be so sure to assume that whatever happens in China, stays in China. Governments around the world pay attention to what other governments do (especially if it is the US or China). If China’s decisions lead to beneficial outcomes (for the government and society), other governments may adopt similar measures (even if it is not necessarily good for the leading tech companies).
These are hard questions but could make or break companies…and Capital Flywheels has been very concerned about how this will play out because the geopolitical competitions of the 21st century is not country vs country, but country vs tech.
#15 Inside Facebook Reality Labs: Wrist-based interaction for the next computing platform
At Facebook Reality Labs (FRL) Research, we’re building an interface for AR that won’t force us to choose between interacting with our devices and the world around us. We’re developing natural, intuitive ways to interact with always-available AR glasses because we believe this will transform the way we connect with people near and far.
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The future of HCI demands an exceptionally easy-to-use, reliable, and private interface that lets us remain completely present in the real world at all times. That interface will require many innovations in order to become the primary way we interact with the digital world. Two of the most critical elements are contextually-aware AI that understands your commands and actions as well as the context and environment around you, and technology to let you communicate with the system effortlessly — an approach we call ultra-low-friction input. The AI will make deep inferences about what information you might need or things you might want to do in various contexts, based on an understanding of you and your surroundings, and will present you with a tailored set of choices. The input will make selecting a choice effortless — using it will be as easy as clicking a virtual, always-available button through a slight movement of your finger.
But this system is many years off. So today, we’re taking a closer look at a version that may be possible much sooner: wrist-based input combined with usable but limited contextualized AI, which dynamically adapts to you and your environment.
Source: Facebook
Incredible.
Many people are rightfully excited about AR / VR, but many people seem to be missing the bigger concept of AR / VR. AR and VR are not just for the eyes. Vision is important, but AR and VR are fundamentally about transforming our entire realities. And our realities are made up of more than just our vision. It includes sound and touch / movement as well.
This is why Apple and Facebook remain the two that are likely closest to bringing true AR / VR to the market. Because the promise of AR and VR requires more than just a solution for the eyes. Facebook’s work on the wrist illustrates the wider tech that is necessary to make AR and VR truly transformative. And Apple has it quite well covered – Eyes (glasses – which everyone is already exploring), ears (AirPods with augmented audio), and movement (through the wrist / Apple Watch).
đź’‰ Health
#16 What’s Next For Moderna Post-Covid-19: CEO Stéphane Bancel Details mRNA Pipeline
Today, millions of people have been vaccinated with Moderna’s vaccine — the first product that the company ever brought to market — thanks to mRNA technology that enabled vaccines to be prepared, tested and manufactured in just a few months. Until the year 2020, the fastest anyone had ever developed a new vaccine was four years. “I’ve had no life for the past 12 months,” Bancel says with a small laugh. “I dream of a day when I can take a vacation.”
Bancel says that Moderna is continuing to charge forward with creating new mRNA vaccines and therapies. “In 2021 and 2022 Moderna is going to scale at a pace that has never happened before in biotech,” Bancel says. From new vaccines for infectious disease to new cancer treatments and cures for genetic disorders like cystic fibrosis, here’s what Bancel says is on deck:
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Moderna currently has five therapeutic cancer vaccines, injections that train the immune system to attack cancerous cells in the body, in clinical trials. There are two current vaccines on the market that treat existing cancers (as opposed to preventing them, like the HPV vaccine), but both are only used for advanced cancers and are expensive to produce. mRNA cancer vaccines could have the advantage of being safe, easy to develop and relatively cheap — though there are some hurdles to overcome including limited clinical data and the inherently fragile nature of mRNA. Bancel is enthusiastic about the applications here, “In the future, I think a lot of vaccines and therapeutics will be based on mRNA technology,” he says. One big advantage over existing drugs, he says, is safety. “It’s very very low biology risk. It’s a human protein made in a human cell in your body.”
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The versatility of the mRNA technology means it can be used to treat a variety of diseases, says Bancel. “mRNA is code,” he says. In vaccines, mRNA encodes proteins that are intended to provoke an immune response, but there’s nothing stopping the technology from producing proteins that could heal the body in other ways. For example, one of the therapies Bancel is most excited about is a treatment that Moderna is studying in partnership with AstraZeneca that uses injected mRNA to create new blood vessels. This could mean that damage caused to the cardiovascular system by heart failure could be repaired and heart tissue could even be regenerated, helping patients lead healthier lives.
Source: Forbes
The 2000s is most likely the Century of Biology. CRISPR is one of those things that has the power to transform what we can do by controlling our own DNA like how we control computers through code. But as excited as I’ve been about CRISPR, it’s still likely a while away from commercialization.
But Modern and mRNA technology is just as compelling and it’s commercialized right now. Moderna may seem like just a COVID-19 vaccine company, but it’s so much more because Moderna is fundamentally a platform company. What they solved for in COVID-19 is not a specific solution, but a generalizable solution that can be used to solve a whole lot of things. I have never felt as optimistic about science as I do now. The world of biology is about to embark on an incredible journey in the next 50 years.
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