Moderna Before the Breakthrough
A real-world valuation lesson from a pre-revenue biotech giant
When a Startup Has No Revenue… Yet Everything Is at Stake
Back in 2019, Moderna was still a classic high-risk biotech company. Despite years of research, advanced mRNA technology, and hundreds of millions of dollars in investment, the company had almost no meaningful revenue. For most traditional valuation methods, especially those based on historical financial data, Moderna was almost impossible to value. Yet investors were willing to fund them because of one crucial element: the possibility of enormous future cash flows.
The Challenge: How Do You Value Something That May Not Work?
Early-stage biotech valuation often looks irrational — until you understand the logic. There is no stable cash flow, no predictable market adoption, and sometimes not even a finished product. But there is one powerful tool that can still give structure: the Discounted Cash Flow (DCF) method. DCF allows investors to model possible future outcomes, discount them with an appropriately high rate (because the risks are huge), and estimate a present value that reflects both uncertainty and potential.
For Moderna in 2019, such a model would have included:
- Uncertain probabilities of vaccine success
- Years of negative cash flow
- Massive R&D expenses
- Potential exponential upside if the technology worked
Then 2020 Happened — And the Model Flipped Overnight
When COVID-19 emerged, Moderna's mRNA platform suddenly moved from theoretical promise to urgent global necessity. By 2022, Moderna generated $19.2 billion in revenue. The company went from “difficult to value” to one of the clearest examples of why early-stage investors rely on DCF: the biggest returns come from rare events that cannot be valued using simple cost-based or comparison methods.
A Personal Note: Seeing mRNA Science Long Before It Worked
Moderna was founded in 2010, so during my own PhD research in the 1990s, I had never heard of Moderna but in those days, I was already coming across early papers on mRNA technology. The concept sounded almost unreal at the time: a simple strand of messenger RNA that could instruct a cell to produce any protein you designed. But the more you read, the clearer it became how many fundamental obstacles still stood in the way. The RNA itself was highly unstable, degrading within seconds; it triggered a strong innate immune response; and reliable delivery systems simply did not exist yet. I remember thinking: the idea is elegant, but it will take years—probably decades—before this ever works in a clinical setting. And that is exactly what happened: nearly thirty years of incremental breakthroughs, optimization, and materials innovation slowly transformed mRNA from a scientific curiosity into a viable therapeutic platform. This is important to keep in mind when valuing a company like Moderna: the vaccin against COVID-19 was not an overnight success, but the moment when decades of groundwork suddenly unlocked extraordinary commercial and scientific momentum.
From a valuation perspective, the Moderna case also highlights the limits of intuition and simple rules of thumb. In 2019, any attempt to value the company required making explicit assumptions about future cash flows, risk, and uncertainty — even though those cash flows were still highly speculative. This is exactly where the Discounted Cash Flow (DCF) method becomes useful. It forces investors to translate expectations into numbers, and to confront how sensitive a valuation is to assumptions about growth and discount rates. In hindsight, Moderna shows how quickly those assumptions can change — and why early-stage biotech valuation is as much about managing uncertainty as it is about mathematics.
Valuation models explain structure, not miracles!
A 2019 DCF would never have predicted the final number precisely — but it would have helped investors understand the structure of the opportunity: high uncertainty, a high discount rate, but a non-zero chance of extreme upside. Even more advanced tools such as Monte Carlo simulation would not have changed that conclusion, because Moderna's eventual value creation lay outside any realistically modellable probability distribution. And sometimes, that understanding alone is enough.
Key Lesson for Founders
If your startup has little or no revenue, you are not alone. Moderna was once in exactly that position. Investors don't just look at what you earn today — they look at what you could earn tomorrow, and whether your technology has the potential to change an industry.
For more on how early-stage valuation works, visit the Startup Valuation pillar page.