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The ABCs of mRNA

Chendhore Veerappan, PhD, CFA


With vaccinations for COVID-19 globally underway, there is tremendous enthusiasm (rightfully) about mRNA vaccinations. First proposed in 1990 as a potential drug, mRNA technology is not new. With tremendous success as a vaccine, the platform now shows immense promise in combatting a range of diseases.

What is mRNA? We all know the double-helix DNA stores genetic information. It is the messenger RNA (or mRNA), produced from DNA by a process called transcription, that contain the instructions to produce proteins, which are the key building blocks of all living material. This natural process was first described in the 1960s. For the last 20 years, scientists have been working tirelessly to coopt this phenomenon into a human-made construct and advance this platform to a point where it is now safe, stable and effective enough to use in humans. We now have a system with which we can inject a nanoparticle containing mRNA constructs with instructions for cells to make proteins of our choice. This is a tremendously powerful capability—like gene therapy. However, whereas gene therapy can be thought of as changing our hardware (DNA), mRNA is akin to changing our software (RNA). mRNA drugs are transient in nature with very low probability of causing permanent changes or mutations in our DNA—keeping our “original” hardware safe.

All vaccines follow the same principle—activate our immune system to prepare for battle against a future infection. In general, traditional vaccines work by introducing a killed or inactivated virus into our bodies. After the advent of cloning, scientists were able to introduce a small protein sub-unit from the virus, thus potentially making vaccines safer by making it impossible for the vaccine to cause an infection. This strategy is called recombinant vaccinations. However, recombinant proteins are made in large manufacturing plants that require high levels of safety and are time-consuming and cumbersome.

mRNA vaccines can exponentially speed time to market by cutting out the traditional vaccine manufacturing process as the human body produces the viral proteins itself. This is a paradigm shift that has quickly become mainstream. (There is a related technology called adenoviral vector vaccines. This strategy is the backbone of the AstraZeneca and Johnson & Johnson COVID-19 vaccines and beyond the scope of our discussion for this blog.)

The COVID mRNA vaccines contain a small piece of the mutated “spike protein” mRNA found on the coronavirus surface. Mutations in this spike protein converted a normal coronavirus into the more infectious and deadly strain we are battling today. After injection, the mRNA constructs are taken up by our cells to create the mutated spike protein. These proteins are then detected by our immune system as a foreign entity and the process of immunity against this particle begins to develop. There are rare safety issues to keep a close eye on, but the mRNA will not cause a COVID infection by itself. People may get a mild fever and some achiness as their bodies start producing antibodies—a sign the vaccine is working as it should. Medicine is all about the safety-efficacy tradeoff. In the case of mRNA or other vaccines for that matter, these side effects are much milder compared to an actual infection.

The Pfizer/BioNTech and Moderna COVID-19 vaccines are the first to be authorized for use leveraging mRNA technology, but there are others undergoing trials—for rabies, the flu and Zika, among others. Major players in the vaccine industry are now investing R&D dollars to develop their own mRNA platforms. This is good for society because we are building capacity at a rapid rate. mRNA vaccines are still cost-prohibitive for emerging markets due to supply constraints and the novel nature of this technology. As capacity is scaled up globally, I see mRNA on the forefront in the battle against future infectious disease outbreaks.

The next major area of research with mRNA is in oncology. At Diamond Hill, we’ve been following mRNA technology for some time related to our own pharma holdings. For example, our holding Roche partnered with BioNTech for an mRNA cancer vaccine medicine—what is known as personalized medicine. Cancers get classified together, but cancer is genetically heterogenous—cancer cells in individual people will have their own profiles. We now have the technology to genetically sequence cancer cells in patients to find out, outside of common cancer genes, what the unique proteins are. By isolating those, we know the proteins we need the immune system to recognize, and theoretically we can make an mRNA vaccine with that sequence. If we inject it systemically into a patient’s body, the cancer vaccine would do what the COVID mRNA vaccine does—hone in on the cancer cells and kill them. BioNTech described this technology as individualized neoantigen specific immunotherapy (iNeST). If successful, this will open the floodgates for personalized medicine—a panacea for medicine. Early trial and data readouts suggest it is going to be much tougher to fight cancer than it is to fight COVID-19. This is to be expected since cancer cells are just our own normal cells that have lost the capacity to control their growth. It is more difficult for our immune system to recognize these cells as foreign.

There are variations of this approach and trials are underway. For example, one approach is to determine a set of common cancer-causing genes across the patient population of a certain cancer subtype. These proteins could be introduced to the immune system as mRNA vaccines. In cancer, traditional protein therapies like cytokine therapy to directly stimulate the immune system are toxic and dangerous for the patient. There are efforts to encode the cytokine sequences, for example, into mRNA and directly inject this construct locally into the tumor, thus improving safety. Other traditional antibody therapies could also be delivered through mRNA. The benefit here is the lower cost of skipping protein manufacturing and distribution needs. mRNA can also be used to enhance the effectiveness of cell therapies (like CAR-T drugs).

There are so many other promising applications within cancer and in other diseases. Heart disease is another interesting area. The heart is an organ that is poor in regenerating its tissue after injury. This is a common cause of heart failure. Moderna and AstraZeneca partnered to pursue regenerative therapy with mRNA technology. They are studying a method to introduce a cell growth factor gene directly into the injured tissue with mRNA. If successful, we could see mRNA play a vital role in regenerative medicine.

Rare diseases are those that affect fewer than 200,000 people in the U.S. There are 7,000 rare diseases, and drugs are notoriously expensive to develop given the small patient population. Rare diseases usually involve a genetic mutation (or mutations) and typically result in much shorter lifespans and reduced quality of life. Again, mRNA can be used to deliver the missing gene in a targeted fashion to tissues like the liver where the gene is needed.

The mRNA platform can be used to regulate the genome itself—either causing genes to express or causing genes to shut down—these technologies are being looked to as a less costly, more effective way to combat many diseases. We could even use the mRNA platform to potentially alter the 3D configuration of the genome itself.

We’ve understood the nuts and bolts for how mRNA works for a long time. It has taken a long time to optimize the nanoparticles that surround it, making it stable enough to inject and making changes to the nucleotide so that its response is more robust. With a first mRNA vaccine available, we’re off to the races. The next 5 to 10 years of mRNA development should be very exciting.

The Diamond Hill investment process is based on our long-term focus. In health care, we closely track development of technologies like mRNA. Innovations in the lab today are the drivers of future cash flow. These innovations are part of our research process in estimating the intrinsic value of our current and future holdings.

As of March 31, 2021, Diamond Hill owned equity shares of Roche Holdings AG.

The views expressed are those of the author as of April 2021, are subject to change, and may differ from the views of other portfolio managers or the firm as a whole. These opinions are not intended to be a forecast of future events, a guarantee of future results, or investment advice.

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