Baillie Gifford is an Edinburgh investment partnership founded in 1908, famous for ultra-long-horizon, high-conviction growth investing — its early stakes in Amazon, Tesla and NIO are classics. Its "actual investors" philosophy holds world-changing companies on 5-10 year views; AUM is around $120bn. The Insights column carries its managers' investment views and thematic research.
This article is about Baillie Gifford's take on Moderna. They admit being too optimistic during COVID, once dreaming Moderna would be a trillion-dollar company, but the stock crashed 95% from its peak. Now they're cautiously optimistic: in August 2026, Moderna's personalized cancer treatment (Intismeran) succeeded in a skin cancer trial, proving the mRNA platform works beyond vaccines. They sold half their Moderna stake (reducing position) the next day to manage risk. Key holdings: Moderna (stock crashed but cancer treatment offers hope), Intismeran (new cancer drug trial success), and Merck (partner).
One-sentence summary of the author’s current market view: Long-term conviction in Moderna remains unchanged, but positions have been actively reduced to manage risk, with a stance of 【cautious optimism】.
Moderna's journey from COVID success to a 95% stock price collapse tests Baillie Gifford's long-term investment thesis. The article opens by acknowledging that the company once delivered over 2,000% returns from its COVID vaccine, only to see its shares plunge 95%, nearly back to the original purchase price. The author states, "Even in our wildest dreams, we could never have predicted what was to come. At one point, its return exceeded 2,000 percent. The shares subsequently fell 95 percent, almost back to our original purchase price."
The author admits to excessive optimism during the COVID period, having envisioned Moderna as a potential trillion-dollar company — "we explored how Moderna might become a trillion-dollar company, such was our optimism about the transformative potential of its mRNA platform." This is characterized as a "behavioural mistake."
After the pandemic demand reversed, Moderna faced a financial black hole and execution missteps, but its technological foundation remained intact. The article notes that COVID created a massive supply-demand shock, which then sharply reversed. Moderna's rapid manufacturing expansion left a financial black hole, with cash reserves shrinking from $18bn. Management cut costs, concentrated resources on the most promising projects, and improved commercial execution. The author believes the company that emerges will be "better-run and more commercially aware," with an extended financial runway.
The author acknowledges that the biggest mistake was poor control over holding size and idiosyncratic risk — "Our mistake was one of holding size and idiosyncratic risk. With hindsight, we should have adjusted the holding size to reflect the evolving balance of risk and reward." This error cost clients as the market cap collapsed from its COVID peak.
Intismeran (Moderna's personalized cancer treatment + Merck's Keytruda) met primary and key secondary endpoints in a Phase III melanoma trial. The article emphasizes that the positive result, announced on August 19, 2026, is a critical test of whether the mRNA platform can move beyond respiratory vaccines. The author states, "The Intismeran result provides crucial evidence that Moderna can move beyond infectious respiratory diseases and play an important role in expanding the mRNA repertoire to treat skin cancer."
Technical details: Moderna sequences the patient's tumor and healthy DNA, identifies mutations unique to that cancer, selects mutations the immune system should target, and encodes these instructions into a personalized mRNA treatment. The entire process relies on artificial intelligence and has been ongoing for a decade. The article notes that while Moderna is not the only company pursuing personalized cancer treatments, this Phase III result is "the strongest late-stage evidence to date for its individualised cancer-treatment platform."
Baillie Gifford reduced its position by 50% the day after the results were announced, reallocating profits to other holdings in the portfolio. The author explains that eight years of experience and the underlying technical factors behind the stock's rise (heavy short interest) prompted a swift adjustment of the position to align with risk assessment. This move "has underlined the need to balance long-term conviction with active risk management."
Institutional perspective bias note: The author is a holder of the position, and the article carries a clear tone of self-justification — attributing the massive drawdown to "behavioural mistakes" and "poor holding size control," while emphasizing that the technological platform remains unchanged. Readers should note that Baillie Gifford has experienced the full cycle with Moderna, and its narrative naturally leans toward justifying the logic of long-term holding.
| Ticker | Direction | Author's One-Sentence View | Key Data |
|---|---|---|---|
| Moderna | Reduce Position | Long-term conviction unchanged, but actively reducing position to balance risk-reward | Stock price down 95% from peak; Intismeran Phase III melanoma trial positive; reduced position by 50% |