In May 2020, the U.S. unemployment rate was 13.3%,1 which means 21 million Americans were unemployed. Not surprisingly, financial stress is a major concern, with 88% of Americans surveyed by the National Endowment for Financial Education (NEFE) saying that the COVID-19 pandemic is creating stress for their personal financial situation.2
Fifty-four percent were particularly worried about having enough money saved for emergency savings or retirement, while another 48% were worried about paying bills.
A report by the Well Being Trust (WBT) and the Robert Graham Center for Policy Studies in Family Medicine and Primary Care that up to 75,000 people may die during the COVID-19 pandemic from drug or alcohol misuse and suicide, which they deemed “deaths of despair” caused, in part, by unprecedented economic failure paired with massive unemployment.3
This experience of scarcity and financial uncertainty is not being felt by all, however. In stark contrast, many of the richest among us — particularly health care and biotech billionaires — have gotten even richer due to COVID-19, profiting handsomely off the pandemic that’s left the general public financially reeling.
Pandemic Propels Moderna CEO to the Billionaire’s Club
Forbes compiled a list of 10 health care billionaires who collectively raked in more than $7 billion since March 11, 2020 — the day the World Health Organization (WHO) declared COVID-19 a global pandemic.4 Topping the list is Stéphane Bancel, CEO of Moderna, the biotech firm that’s seen as the frontrunner for developing a COVID-19 vaccine. According to Forbes:5
“When the WHO declared a pandemic, Bancel’s estimated net worth was some $720 million. Since then, Moderna’s stock has rallied more than 103%, lifting his fortune to an estimated $1.5 billion. A French citizen, Bancel first joined the billionaire ranks on April 2, when Moderna’s stock rose on the news that the firm was planning to begin phase two trials of its vaccine.”
Moderna partnered with the National Institute of Allergy and Infectious Diseases (NIAID) headed by Dr. Anthony Fauci to create the vaccine. In February 2020, its stock price increased 78.1% when it announced that its messenger RNA vaccine was ready for clinical trials.6 “The company’s CEO has become a new billionaire overnight,” wrote Barbara Loe Fisher, co-founder and president of the National Vaccine Information Center (NVIC).7
Moderna began human trials of its experimental mRNA vaccine in March 2020, and its stock soared again in May, hitting $29 billion, even though the company currently doesn’t sell any products,8when it released early results from its Phase 1 study of 45 healthy volunteers between the ages of 18 and 55 — the first released from a study involving human volunteers.
Moderna’s press release9 stated that 25 participants who received two doses of its low or medium dose vaccine had levels of binding antibodies — the type that are used by the immune system to fight the virus but do not prevent viral infections — at levels approximating or exceeding those found in the blood of patients who recovered from COVID-19.10
Data for the more significant neutralizing antibodies, which stop viruses from entering cells, was reported for only eight people, with Moderna stating that levels in each of these initial participants met or exceeded antibody levels seen in recovered COVID-19 patients.
Four study subjects experienced a “Grade 3” adverse event, which is described by the U.S. Department of Health and Human Services as “severe or medically significant but not immediately life-threatening; hospitalization or prolongation of hospitalization indicated; limiting self-care” such as “bathing, dressing and undressing, feeding self, using the toilet, taking medications.”11
During Phase 2 trials, 600 people will receive the vaccine, while a Phase 3 trial is expected to start in July 2020 — an unprecedented move in terms of typical vaccine development timelines. Bancel owns a 9% stake in the company, which received a grant of up to $483 million from the U.S. Department of Health and Human Services to accelerate its COVID-19 vaccine development.12
Nine More COVID-19 Billionaires
Making up the rest of Forbes’ list is a mix of entrepreneurs, biotech executives and diagnostic test makers, which come from seven different countries:13
1. Gustavo Denegri — With a net worth of $4.5 billion, which is up 32% since the beginning of the pandemic, Denegri has a 45% stake in DiaSorin, a biotech company based in Italy. DiaSorin makes swab-based diagnostic tests for COVID-19 as well as antibody blood testing kits for the virus.
2. Seo Jung-Jin — Jung-Jin co-founded Celltrion, a biopharma company in Seoul. Jung-Jin’s net worth is $8.4 billion, up 22% thanks to the company’s experimental antiviral treatment for COVID-19, along with a self-administered diagnostic test that gives results in 15 minutes, which is expected to come to the market this summer.
3. Alain Mérieux — Mérieux’s $7.6 billion net worth is tied to BioMérieux, the diagnostic testing company he founded in 1963. It’s a branch of Institut Mérieux, a medical company founded by his grandfather in 1897. BioMérieux developed a faster version of a COVID-19 diagnostic test kit that was released in March 2020.
4. Maja Oeri — Oeri is a descendent of Fritz Hoffmann-La Roche, the founder of pharmaceutical giant Roche. She owns about 5% of Roche’s shares, with a net worth of $3.2 billion; Roche has clinical trials ongoing for its arthritis drug tocilizumab, which it is hoping to transition to a COVID-19 treatment, as well as a serology test to detect antibodies in people who have had COVID-19.
5. Leonard Schleifer — His net worth is $2.2 billion, a rise of 11% due to the pandemic. He founded Regeneron Pharmaceuticals, which is conducting clinical trials of its rheumatoid arthritis drug sarilumab on COVID-19 patients.
6. George Yancopoulos — Yancopoulos is Regeneron‘s chief scientific officer; his net worth is $1.2 billion (up 14% since the beginning of the pandemic).
7. and 8. Thomas and Andreas Struengmann — The Struengmann twins have a net worth of $6.9 billion. They first made their fortune by selling generic drug company Hexal to Novartis in 2005, and they invest in biotech and health care companies. One of their investments is BioNTech, which partnered with Pfizer and Fosun Pharmaceuticals on a COVID-19 vaccine that’s currently in human trials.
9. Li Xiting — Xiting cofounded Mindray Medical International, China’s largest medical equipment producer. It tripled its production capacity of ventilators since the start of the pandemic. Xiting’s net worth is $12.6 billion, which is up 1% due to COVID-19.
US Billionaires $584 Billion Richer Thanks to COVID-19
The Institute for Policy Studies (IPS), in partnership with Americans for Tax Fairness (ATF), published a report highlighting what they call America’s “pre-existing condition”: extreme wealth inequality.14 IPS is regularly updating U.S. unemployment and billionaire wealth during the pandemic, which shows the great divide among the wealthy and the majority of Americans.
As of June 18, 2020, U.S. billionaire wealth increased $584 billion, or 20%, since the start of the pandemic.15 Meanwhile, since March 18, the number of U.S. billionaires increased from 614 to 643; during the same period, more than 45.5 million Americans filed for unemployment. Other striking inequalities revealed by the report include:16
- Jeff Bezos‘s fortune increased by $25 billion from January 1, 2020, to April 15, 2020; the wealth surge alone is greater than Honduras’ Gross Domestic Product, which was $23.9 billion in 2018
- From January 1, 2020 to April 10, 2020, the wealth of 34 of the richest U.S. billionaires increased tens of millions of dollars; eight of them had their net worth rise by more than $1 billion
- From March 18 to April 10, 2020, U.S. billionaire wealth surged by nearly 10%, rising $282 billion; during the same period, more than 22 million Americans lost their jobs
- U.S. billionaire wealth increased 1,130% from 1990 to 2020; U.S. median wealth grew by 5.37% during the same period
- The tax obligations of U.S. billionaires decreased 79% between 1980 and 2018, when measured as a percentage of wealth
As noted by Inequality.org, IPS’ sister site:
“The top five billionaires — Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and Larry Ellison — saw their wealth grow by a total of $101.7 billion, or 26%. They captured 17.4% of the total wealth growth of all 600-plus billionaires in the last three months. The fortunes of Bezos and Zuckerberg together grew by nearly $76 billion, or 13% of the $584 billion total.
‘This orgy of wealth shows how fundamentally flawed our economic system is,’ said Frank Clemente, ATF’s executive director. ‘In three months about 600 billionaires increased their wealth by far more than the nation’s governors say their states need in fiscal assistance to keep delivering services to 330 million residents.
Their wealth increased twice as much as the federal government paid out in one-time checks to more than 150 million Americans. If this pandemic reveals anything, it’s how unequal our society has become and how drastically it must change.”17
‘One of the Greatest Wealth Transfers of History’
CNBC’s Jim Cramer, host of CNBC’s Mad Money and a former hedge fund manager, said the pandemic and resulting lockdown paved the way for “one of the greatest wealth transfers in history.“18 While many experts are predicting a V-shaped recovery for the stock market, which has been quickly rebounding, “that has almost nothing to do with a V-shaped recovery in the economy,” Cramer said.
While most big businesses are coming out of the state-ordered lockdowns largely unscathed, many small businesses have closed their doors. Already, Chapter 11 bankruptcies are up 48% compared to 2019, and the worst may be yet to come. Even as businesses are increasingly allowed to open for business, lower occupancy limits will continue financial hardships, despite relief funds provided by the government.
“… [I]n the end, the stimulus package probably won’t be enough, for one simple reason,” Cramer said. “It’s not going to work because of social distancing.”19 Meanwhile, big business will continue to thrive. “The bigger the business, the more it moves the major averages, and that matters because this is the first recession where big business … is coming through virtually unscathed, if not going for the gold.”20
The transfer of wealth from average people to the richest through a planned economic collapse is ongoing, and something that’s slated to get even more severe if a COVID-19 vaccine is released. In an article positing the question, “Is It Too Late to Buy Moderna Stock?” The Motley Fool suggested:21
“Let’s assume that Moderna’s COVID-19 vaccine proves to be successful and wins regulatory approvals in the U.S. and other major markets. If the company was able to price its coronavirus vaccine similarly to flu vaccines currently on the market, its list price would probably be in the ballpark of at least $40.
If we also assume at least 2 billion doses of the vaccine would be given per year, Moderna could be looking at annual revenue of $80 billion.”