Moderna Billionaire Set to Score 3,000% Gain on Tiny Biotech

(Bloomberg) — Noubar Afeyan became a billionaire backing Moderna Inc., the dark horse biotech firm that became a household name due to its lifesaving Covid vaccine. He just added to his fortune after another one of his long-shot bets quintupled in value.

Most Read from Bloomberg

Sigilon Therapeutics Inc. soared 438% to $21.15 Thursday after Eli Lilly agreed to buy the biotech. Funds of Afeyan’s venture capital firm, Flagship Pioneering, own 31.9% of Sigilon, according to the company’s latest proxy filing.

Afeyan could potentially receive an even larger payout if Sigilon hits certain benchmarks. If all the criteria are met, it would boost Lilly’s offer as high as $126.56 per share and bump his firm’s windfall to $101 million.

To be sure, the hurdles Sigilon must surmount to achieve the full price are high. At the close of the deal, Sigilon shareholders will receive a total of $34.6 million, equal to $14.92 per share.

To get the rest, Sigilon’s product — non-viral engineered cell-based therapies targeting diseases such as diabetes — will need to complete three steps, with the final and largest payout contingent on regulatory approval of a specified product.

“There can be no assurance that any payments will be made” with respect to the contingencies, the company stated in a filing Thursday. BTIG analyst Thomas Shrader said the conditions of the first payout are very likely to be met, while he gave the second payout a “no better than 50/50 shot.”

The stock’s closing price Thursday was above Lilly’s initial $14.92 payment, indicating investors believe at least some of the hurdles will be met.

Just last month Sigilon was at risk of being delisted because its shares were priced so low. It underwent a one-for-13 reverse stock split, which boosted its shares enough to satisfy the minimum price requirement for continued listing on Nasdaq.

Like Moderna, Sigilon is based in Cambridge, Massachusetts. It also shares a co-founder: MIT professor Robert Langer, who also became a billionaire through the vaccine maker.

A biochemical engineer, Afeyan holds more than 100 patents and has been involved in building over 70 startups in the life sciences industry, according to his bio. Born in Lebanon, his family moved to Canada in 1975 to flee the civil war. He came to the US to attend graduate school at MIT and has lived in the Boston area ever since.

–With assistance from Tom Maloney, Jameelah Robinson and Angel Adegbesan.

(Adds analyst comment in 6th paragraph and stock-split details in 8th paragraph. A previous version of this story corrected Afeyan’s potential payout in 3rd paragraph.)