(Bloomberg) – Noubar Afeyan has become a billionaire backing Moderna Inc., the dark horse biotech company that became a household name thanks to its life-saving Covid vaccine. He has just added to his fortune after another of his long-term bets quintupled in value.
Bloomberg’s Most Read
Sigilon Therapeutics Inc. climbed 438% to $21.15 on Thursday after Eli Lilly agreed to buy the biotech. Funds from 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 bigger payout if Sigilon hits certain benchmarks. If all the criteria are met, that would increase Lilly’s offer to $126.56 per share and raise his company’s windfall to $101 million.
Admittedly, the hurdles that Sigilon must overcome to reach the full price are high. Upon closing, Sigilon shareholders will receive a total of $34.6 million, or $14.92 per share.
To obtain the remainder, Sigilon’s product – non-viral cell therapies designed to target diseases such as diabetes – will have to go through three stages, with the final and most important payment contingent upon regulatory approval of a specified product.
“There can be no assurance that any payments will be made” regarding contingencies, the company said in a filing Thursday. BTIG analyst Thomas Shrader said the conditions for the first payout would most likely be met, while he gave the second payout a “no better than 50/50”.
The stock’s closing price on Thursday was above Lilly’s $14.92 initial payout, indicating that investors believe at least some of the hurdles will be met.
Just last month, Sigilon was at risk of delisting because its shares were priced so low. It underwent a one-for-13 reverse stock split, which increased its stock enough to satisfy the minimum price requirement for continued listing on the Nasdaq.
Like Moderna, Sigilon is based in Cambridge, Massachusetts. It also shares a co-founder: MIT professor Robert Langer, who also became a billionaire thanks to the vaccine maker.
A biochemical engineer, Afeyan holds more than 100 patents and has been involved in the creation of more than 70 startups in the life sciences industry, according to his biography. Born in Lebanon, his family moved to Canada in 1975 to escape the civil war. He came to the United States for graduate studies at MIT and has lived in the Boston area ever since.
–With help 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.)
Bloomberg Businessweek’s Most Read
©2023 Bloomberg LP