The mRNA Revolution

Hopes Are High for the Technology that Is Leading Us Out of the Pandemic

The vaccine success stories at BioNTech and Moderna may only be the beginning. Doctors and researchers want to use the revolutionary mRNA technology to fight the world's worst scourges: from cancer to dementia.

By Jörg Blech und Claus Hecking


Once the sternum is split and the heart has ceased beating, the doctors deploy the medical treatment of the future. 

They interrupt the bypass operation and then, using extremely fine needles, deliver 30 injections to the patient’s heart muscle, each containing 200 microliters of medicine.

They have about 10 minutes to carry out the injections before then completing the more standard open-heart procedure, and the heart resumes beating. 

The bypass ensures that more blood flows through the heart than before, but the heart disease itself cannot be cured using this conventional method. 

The 30 injections, by contrast, contain the miracle potion designed to heal the heart – a biotechnology substance that can trigger the production of new coronary blood vessels.

Most people first heard of mRNA technology as a result of the coronavirus pandemic. 

The vaccines against COVID-19 produced by BioNTech in Mainz, Germany, and Moderna in Cambridge, Massachusetts, were developed and approved in record time and have demonstrated 90 percent efficacy against the SARS-CoV-2 virus – a huge success.

If all goes well, the vaccine miracle will be just the beginning. 

The new high-tech medicine has the potential to cure a number of maladies afflicting us humans. 

MRNA researchers have developed therapeutic approaches to AIDS, the flu, tuberculosis, multiple sclerosis, rheumatism, all kinds of allergies, Alzheimer’s, cystic fibrosis, knee arthritis, slipped discs, and many different kinds of cancer, including of the breast, colon, skin, lung and prostate.

The attempt to heal ailing hearts is one that researchers have been preparing for some time. 

The first test subjects were recruited in Finland, though doctors in Munich are also taking part in the trial. A total of 24 heart patients are to receive the injections. 

Funded by the British-Swedish pharmaceutical company AstraZeneca, the study has apparently made significant strides and could even be completed this summer.

BioNTech co-founder Uğur Şahin predicts that new mRNA-based medical treatments will hit the market one after the other in the next several years. 

"I predict that in 15 years, one-third of all newly approved drugs will be based on mRNA technology," he says. 

The market could grow to be worth more than $300 billion – per year. 

Furthermore, the new miracle drugs may go beyond merely revolutionizing medicine and treating ailments that patients have thus far had to simply accept as their fate. 

The technology could also turn the pharmaceutical industry inside out.

Excitement about the technology, after all, has spread beyond just the researchers themselves. 

Pharmaceutical executives and investors have likewise begun taking a closer look, eager to get in on the profits that are sure to result. 

But where will those profits come from? 

Will they be produced by small startups with a clever idea, or by the huge firms with their vast resources?

For a long time, the potential of mRNA was underestimated, even by industry experts. 

Those pursuing the technology faced huge challenges when it came to raising money for their experiments.

Then, the coronavirus pandemic arrived, which presented the mRNA technology with a practical test in real-life conditions. 

And the triumph of the vaccines developed by BioNTech and Moderna changed everything: The two companies proved to the world that their technology actually does work. 

BioNTech developed its vaccine by itself before testing it in clinical studies and producing it with the help of the U.S. pharmaceutical giant Pfizer. 

By the end of this year, the companies plan on having produced at least 2.5 billion doses of the vaccine, with revenues being shared among them.

The infant industry now finds itself in the grips of a whirlwind of activity. 

The Japanese pharmaceutical company Takeda has paid $120 million to form a cooperation with Anima Biotech in New Jersey. 

The French company Sanofi bought Tidal Therapeutics for $470 million. 

Researchers at the German chemistry firm Evonik Industries have set up a cooperation with researchers at Stanford University in California.

"The industry is experiencing a tsunami of euphoria,” says Gaurav Sahay, an associate professor in the Department of Pharmaceutical Sciences at Oregon State University who advises startups and venture capitalists. 

"This technology is going to transform how you look at diseases and treat them."

A Difficult Beginning for the Pioneers

Many biologists used to focus their attentions on the genetic material DNA in the cell nucleus. 

That, after all, is where the genes are to be found – essentially the construction manual for necessary proteins. 

For a DNA manual to be implemented, however, a blueprint must be produced – the mRNA. 

The "m” in mRNA stands for "messenger,” because it transports the DNA instructions to those parts of the cell where proteins are produced.

Molecules of mRNA, though, are extremely unstable and degrade quickly, particularly when researchers fiddle with them in the laboratory. 

They are also easily destroyed as soon as they are injected into the body. 

Which isn’t surprising: Evolution has taught our immune systems that foreign mRNA can only belong to viruses or other pathogens. 

For that reason, our bodies immediately attack mRNA molecules and break them down into their component parts.

As such, mRNA was seen for a long time as unsuitable as a possible therapeutic pathway. 

But some researchers nevertheless began trying to figure out how to use the messengers to treat disease. 

Would it be technically possible to synthesize a certain mRNA in a laboratory to trigger the production of the desired protein? 

Would it be possible to smuggle such an mRNA molecule into cells? 

And would the cells then produce a significant amount of the desired proteins?

Researchers hoped that the method could be used to program cells to produce therapeutic proteins to fight cancer, to recognize and combat viral illnesses or to produce growth hormones.

CureVac co-founder Hoerr: "I was the first who saw the potential." Foto: Sebastian Lock / Die Zeit / laif


It was the U.S. geneticist Jon A. Wolff who published an article in the journal Science in 1990 indicating that all of that might indeed be possible. 

In one experiment, his team had injected a certain mRNA into the muscles of mice and then discovered that the targeted protein had actually been produced. 

Wolff, though, went on to focus on other approaches that he felt were more promising. 

Three years later, French researchers reported similar results, but they, too, opted not to follow through with their mRNA research.

But biologist Ingmar Hoerr, a Ph.D. candidate at the University of Tübingen in Germany, did elect to pursue the technology. 

In some of his experiments, he injected a certain mRNA into mice and found that it remained active in the cells for at least a short time, and led to the production of the desired protein.

"I was the first who saw the potential,” Hoerr says. 

And in 2000, he founded a company together with some laboratory colleagues that hoped to produce mRNA products as medicinal therapies. 

The company is called CureVac, a combination of the English words "cure” and "vaccine.”

Hoerr and his co-founders received funding from a program for young innovators in the German state of Baden-Württemberg, but it wasn’t enough. 

CureVac quickly found itself facing the problem that hardly anyone in Germany is willing to invest in unproven biotechnologies.

"The venture capitalists were the worst. 

On one occasion, an adviser just stood up and left right in the middle of the meeting. 

I had never seen such a thing,” Hoer says. 

One investor even demanded his money back after it had already been spent. 

The local savings bank jumped in to provide the company with a loan.

It was around this time that two large investors decided to make a huge bet on German biotech startups. 

One of them was the billionaire co-founder of the software giant SAP, Dietmar Hopp. 

He invested 22 million euros in CureVac and followed that up with millions more. 

Today, he holds an almost 50 percent stake in the company. 

Still, the case of CureVac also serves to show the risks inherent in the new technology. 

After the company reported recently that its COVID-19 vaccine candidate demonstrated just 47 percent efficacy in clinical trials, its stock price plunged last Thursday by up to 50 percent.


The other significant investors in the industry are the twins Andreas and Thomas Strüngmann. 

They are the founders of the company Hexal, which produces generic versions of well-known medicines. 

With the sale of their stake in the company, the two raised 5.6 billion euros, and they now want to show that they can do more than just copy others.

In an October 2008 interview with the DER SPIEGEL subsidiary manager magazin, Thomas Strüngmann said that he and his brother had "an enormous urge to be part of an innovative product from development all the way to its introduction to the market." 

His brother Andreas added: "The development of a cancer therapy that doesn’t just extend the life of patients, but also defeats the tumor."

They chose to focus their financial attentions on Özlem Türeci and Uğur Şahin, the founders of BioNTech, both of whom have medical degrees and are the children of Turkish immigrants in Germany. 

They met at the Saarland University Hospital in Homburg and went on to get married. 

Soon, they began focusing their attentions on developing a completely new approach to treating cancer with the help of mRNA technology. 

The Strüngmann brothers were impressed by their concept and went on to invest some 200 million euros in the couple’s company over the years.

These investments were vital in enabling the company to pursue its research. 

They were able to modify the two ends of the mRNA strands, thus making them more durable. 

They packed them inside extremely thin fatty sheaths, making it possible to inject them into cells without destroying them. 

But how can one ensure that the patient’s immune system refrains from attacking the foreign mRNA?

This is where Katalin Karikó, a biochemist from the University of Pennsylvania, made her impact. 

She was interested in developing a cure for strokes and decided to focus her attentions on mRNA technology. 

That decision made her into something of an outsider in her field.

              Biontech researcher Katalin Karikó Foto: Dina Litovsky / Redux / laif


"No one was interested in mRNA," she says. 

"I didn’t get any research funding." 

She had originally been given the prospects of getting promoted to become a professor, but that was withdrawn and she continued her work under a contract as a normal researcher.

The people at the university "were surprised when I said that I was staying," Karikó says. 

But she continued to look for partners, and standing at the copy machine one day, she spoke with researcher Drew Weissman and ultimately convinced him to join her.

Together, they solved the mRNA riddle: Apparently, one specific mRNA building block (the nucleoside uridine) triggers the immune system’s aggressive response. 

The two researchers replaced uridine with a different, yet similar nucleoside. 

And it worked: In experiments with animals, the mRNA was no longer rejected by its recipient.

Moderna and BioNTech (where Karikó now works) continued their research with this variant. 

CureVac, by contrast, deliberately chose a different approach, opting instead for the nucleosides guanosine and cytidine to stabilize the mRNA. 

By this point, however, none of the companies conducting mRNA research had yet introduced a product to the market.

But then, the world found itself confronted by a novel coronavirus. 

And once its genome was sequenced in January 2020, each of the companies produced an mRNA containing building instructions for a specific coronavirus protein. 

Once injected, the human body would produce significant amounts of that protein and the immune system would recognize it as "foreign” – and establish an immunological memory against that virus.

That procedure led both BioNTech and Moderna to develop COVID-19 vaccines in record time. 

CureVac’s vaccine, by contrast, still hasn’t been approved. 

The company could very well have focused on the wrong mRNA variant, thus losing the race for a COVID-19 vaccine.

A New Weapon against Incurable Contagions

Classic vaccines are made up of weakened or inactivated viruses or viral material. 

But this method has proven ineffective against many infectious diseases, such as AIDS and Dengue fever.

It has also proven to be no match for malaria. 

The disease, common in tropical and subtropical regions, is caused by parasites that are transmitted by the Anopheles mosquito. 

The parasite produces a certain protein (PMIF), with which it suppresses the human immune system. 

As a result, people can fall ill to the disease multiple times, even after overcoming an initial infection. 

Each year, over 400,000 people die of malaria, most of them children.

Dr. Richard Bucala, of the Yale School of Medicine in New Haven, CT, is currently working on an mRNA vaccine against the PMIF protein and was recently able to protect mice against infection from malaria.

For a long time, his work went unrecognized. 

But now, world-renowned malaria researchers are joining him. 

A clinical study to test the vaccine is currently being planned at the University of Oxford.

The first experiments involving humans could begin in two years, says Bucala, who seems relieved that his approach is finally being taken seriously. 

"RNA is now recognized as a viable vaccine technology, by public, and regulatory agencies, opening the field of vaccines to many global scourges not previously approachable by vaccines," he says.

BioNTech, meanwhile, with support from the Bill & Melinda Gates Foundation, hopes to develop a vaccine against HIV and against tuberculosis, which claims the lives of 1.5 million people a year. 

Moderna hopes soon to launch a Phase 3 trial of an mRNA vaccine against the cytomegalovirus, which can lead to severe disabilities in children should their mothers become infected with this pathogen during pregnancy.

BioNTech founders Uğur Şahin and Özlem Türeci: A vision to create an individualized cancer care Foto: Dina Litovsky / REDUXPICTURES / laif


Furthermore, mRNA technology could also help to defeat the seasonal flu, which kills up to 650,000 people each year. 

For the flu vaccines used thus far, the influenza viruses must be multiplied in around 500,000 million chicken eggs and processed in a procedure that takes several months. 

But flu viruses are constantly producing new strains, which makes the vaccines less reliable.

A team of three Austrian researchers at the Icahn School of Medicine at Mount Sinai Hospital in New York has developed a new vaccine candidate that helps immune systems attack a strain of influenza at different sites at the same time. 

Vaccinated mice proved immune to H1N1 despite being exposed to a viral load in the experiment that was 500 times larger than a deadly amount.

The researchers are now planning on repeating the experiment with other influenza strains. 

Ultimately, they may be able to produce a vaccine that triggers immunity to all known strains of influenza.

Vaccines against Cancer?

The human body is made up of around 100 trillion cells, and each day, many of them transform into cancerous cells. 

They do so not just because of cigarette smoke, UV rays or harmful chemicals. 

Random mishaps during cell division can also lead to genetic mutations, through which a cell can lose control of its own growth. 

Continual multiplication – and a cancerous tumor – is the result. 

The tumor takes up more and more space, may metastasize, and takes up vital resources until ultimately, the body can no longer survive the strain.

In most cases, though, the situation doesn’t progress that far, since mutations also produce novel tumor proteins on the cancerous cells, substances that the body’s immune system recognizes as being foreign. 

In most cases, such cells are destroyed immediately.

But the cancer defense system is far from perfect. 

In Germany alone, 500,000 new cases of cancer are diagnosed each year. 

The immune systems of each patient with a tumor at some point overlooked a cancerous cell and allowed it to continue dividing. 

This disruption is what researchers are hoping to eliminate.

"Thanks to modern sequencing machines, it is possible to examine the genetic makeup of a tumor and compare its sequence with that of healthy tissue. 

This allows us to see where the tumor made changes,” says tumor immunologist Niels Halama, who heads up the department of translational immunotherapy at the German Cancer Research Center in Heidelberg. 

"For each individual patient, it is possible to identify the peculiarities and to choose unique points of attack to target. 

That is a huge step forward.”

With the help of mRNA technology, large numbers of tumor proteins are to be developed inside the patient’s body so that their immune systems can recognize those proteins, and the tumor, as foreign. 

The hope is that such a vaccination will result in the body destroying both tumors and metastases, without the need for chemotherapy and radiation.

And it looks as though those hopes might actually come to fruition. 

For a study published in 2017, for example, 13 people suffering from black skin cancer each received a personalized preparation from BioNTech. 

Eight patients did not suffer a relapse for 12 to 23 months and in two of five trial participants, the compound actually worked, though for one of them, the effect didn’t last long. 

Şahin and Türeci say that the immune systems of all the patients, though, reacted with easily verifiable responses. 

"Each patient developed strong T cell reactivity against several of their tumor mutations."

Science Photo Library


The next step is the development of personalized mRNA preparations for colon cancer patients. 

The normal procedure for such patients involves the surgical removal of the affected area followed up by chemotherapy to destroy any cancerous cells that may have remained behind. 

The treatment doesn’t always work, with around 20 percent of patients suffering a relapse.

For the study, patients are to receive a personalized mRNA preparation in addition to the standard therapy. 

"Hopefully, the immune system will be stimulated to find and destroy all remaining cancerous cells,” says Dirk Arnold, chief oncology physician at the Asklepios Clinic Altona and head of the Asklepios Tumor Center Hamburg, which will take part in the clinical trials. 

The first test subjects could be treated by the end of this year.

Many additional cancer treatments are also set for testing soon. 

In Germany alone, the Paul Ehrlich Institute, Germany’s medical regulatory body, has approved 29 applications for clinical tests involving mRNA cancer therapies. 

Globally, the focus isn’t just on skin and colon cancer, but also against malignant growths in the pancreas, lungs, breasts, prostate, brain and ovaries. 

Should a product make it to market, it would almost certainly be a hit. 

According to forecasts, the cancer treatment market will be worth more than $200 billion in 2022.

Coaching for the Immune System

In the fight against pathogens or cancer cells, mRNA preparations are designed to activate the immune system. 

But in other instances, the opposite effect is the goal: that of slowing the immune reaction. 

That is an outcome that people suffering from autoimmune disorders could benefit from.

In juvenile diabetes, for example, the islet cells produced in the pancreas are attacked by the patient’s own immune system, limiting their ability to produce insulin, which results in dangerously high blood-sugar levels. 

With Crohn’s disease and ulcerative colitis, meanwhile, patients suffer from chronic inflammation of the intestine. 

Psoriasis, for its part, produces itchy skin and can also affect the joints. 

Rheumatoid arthritis is also a product of the immune system attacking structures that belong to the patient’s body: joints, tendons, skin or even internal organs.

Around 8 percent of all people suffer from an autoimmune disorder, and there have thus far been no cures in sight. 

To eliminate such disorders, the body’s immune system would have to learn to tolerate the structures that it has erroneously identified as foreign.

That is exactly what BioNTech founders Türeci and Şahin, in combination with other researchers, have been trying to do for quite some time, using multiple sclerosis as their target. 

With MS, immune cells attack proteins in the central nervous system, which then loses its ability to correctly control the arms and legs. 

Patients often experience exhaustion along with numbness or tingling of the skin and they can even suffer paralysis. 

The optic nerve is also frequently attacked, such that patients can no longer see clearly.

Researchers have now reached the stage where they can stop multiple sclerosis, at least in mice, as they reported in Science early this year. 

According to the paper, they were able to restore motor control.

This success was made possible with an mRNA that was modified and packaged in such a way that it found its way to the spleen, where immune cells learn to tolerate the body’s own structures. 

The attacks on the nerve-cell sheaths were reduced.

In the coming years, the approach may not just be helpful in the battle against autoimmune maladies, but also against allergies. 

According to the Robert Koch Institute, Germany’s center for disease control, more than 20 percent of children and 30 percent of adults suffer from allergies.

A team of immunologists led by Richard Weiss, from the University of Salzburg, developed an mRNA preparation not long ago that contains the blueprint for the hay fever allergy and injected it into mice. 

The result was a lasting protection in the animals against the allergy.

BioNTech has purchased the rights to the method, says Weiss. 

"Given the enormous resources that BioNTech now has at its disposal, I think that the chances for an mRNA vaccine against allergies aren’t bad.”

Renewable Cartilage

The mRNA approach could also be useful in the fight of another widespread affliction. 

Chondrocytes are roundish cells in our joints out of which our cartilage is built. 

When these cells cease to effectively fulfill their purpose, arthritis is the result, a malady that is both painful and incurable.

An mRNA therapy is likely the only chance to alleviate the problem, says Dr. Keiji Itaka from the Institute of Biomaterials and Bioengineering at the Tokyo Medical and Dental University. 

Together with his team, he is developing a method for packaging mRNA in particularly tiny globules. 

With a diameter off just 50 nanometers, they can penetrate deep into tissue and reach the innermost layer of cartilage in a joint.


The Japanese researchers hope their method will strengthen the chondrocytes in knee-joint cartilage. 

They require a certain protein to work properly. 

The scientists have managed to inject an mRNA with the necessary blueprint into the knee joints of mice, whose medial meniscus had been removed and an important tendon severed.

Such a handicap normally leads to arthritis, but the mRNA injection was able to noticeably slow the expected wear on the knee. 

The protein smuggled in with the mRNA approach actually triggered an increased production of chondrocytes and the cartilage lasted longer.

The Japanese group recently received state funding for their arthritis project and are now planning human trials together with the Japanese company Axcelead Drug Discovery Partners. 

Those trials are expected to start in two years, Itaka says. 

"I hope this would be the first case of mRNA therapeutics in the field of regenerative medicine."

The researchers in Japan have also tried out their method to treat slipped discs. 

Almost everyone’s spine begins deteriorating at some point, with discs shriveling and even slipping out of place, causing terrible pain for many patients.

Again, Itaka and his team turned to mRNA to produce the necessary protein, injecting it directly into the spines of rats. 

The rodents apparently benefited from the experimental therapy: In comparison with control animals, their spinal discs remained thicker.

A Fountain of Youth for the Brain

The team in Japan is also planning on stopping the degradation of the brain through aging. 

In the case of Alzheimer’s, for example, plaque deposits made up of a protein called beta amyloid develop on nerve-cell tissue, which is harmful to both memory and other faculties of the brain. 

But there is a protein called neprilysin that can remove such plaque buildups. 

The researchers used RNA technology to introduce neprilysin into the brain cells of mice, which did, in fact, lead to a lower beta amyloid concentration.

In a new experiment, Itaka and his team focused on circulatory disturbances in the brain. 

When the brain is no longer sufficiently supplied with oxygen, such as is the case following a stroke, for example, entire regions can be destroyed. 

A protein called BDNF could represent a potential antidote. 

It works a bit like brain fertilizer, promoting the growth of new cells. 

The Japanese team produced a corresponding mRNA and injected it into the brains of rats – with success. 

"This allows us to save brain cells that would otherwise die,” says Itaka.

Biologist Martin Fussenegger, from the Department of Biosystems Science and Engineering at the Swiss Federal Institute of Technology in Zurich, is pursuing a similar goal. 

He would like to help people suffering from Parkinson’s disease. 

Such patients suffer from trembling and have problems walking because the cells in their brain that produce dopamine are dying off.

Recently, Fussenegger and his team developed an mRNA technique that at least slows the process in mice. 

"Interest is exploding at the moment,” says Fussenegger. 

"Most of the inquiries are coming from other researchers, but companies have also got in touch.”


Combating Heart Disease

Coronary arteries wind like a wreath around the heart, supplying it with both nutrients and oxygen. 

But in around 18 percent of women and 28 percent of men, the coronary artery permanently constricts, limiting or even eliminating the blood supply, causing heart attacks, arrhythmia or heart failure – a leading cause of death in Germany as elsewhere. 

Many people do, in fact, survive acute heart problems, but the loss of millions of cells in the heart muscle are often the consequence.

For the last eight years, Dr. Lior Zangi at the Icahn School of Medicine in New York’s Mount Sinai Hospital has been conducting research into ways of repairing such damage. 

"Our goal is to promote and reactivate cardiac regeneration after myocardial infraction," he says.

In pursuit of that goal, his team has produced an mRNA that promotes the growth of new blood vessels. 

When the team injected the mRNA into the hearts of mice immediately following a heart attack, new vessels apparently formed, and the hearts of the animals began beating strongly again.

Researchers from both Moderna and AstraZeneca learned of the results and conducted similar experiments on domestic pigs – with success. 

It was the results of that experiment that led AstraZeneca to invest millions and begin testing the procedure on humans – in the study mentioned earlier involving 24 patients who are receiving 30 injections into their hearts during bypass operations.

Globally, 27 million people suffer from chronic cardiac insufficiency and mRNA could save their lives. 

The results of the study are expected by the end of this year.

Will Germany Become the World’s Pharmacy?

According to market observers, mRNA technology is turning into a multibillion-dollar business. 

The U.S. investment bank Berenberg Capital Markets predicts that the market for mRNA drugs will grow to $88 billion a year by 2030 and also generate total revenues of $460 billion by the end of the 2020s.

According to the forecast, manufacturers will generate just under a fifth of sales in 2030 from COVID vaccines and another fifth from other mRNA vaccines. 

The manufacturers will generate more than half of the future income from mRNA applications against cancer, autoimmune diseases and protein therapies, Zhiqiang Shu, the study's author, told DER SPIEGEL. 

"This technology is disruptive in many areas," and will replace conventional methods.

Shu expects that today’s pioneers will continue to dominate the market for the time being. 

"BioNTech, Moderna and maybe CureVac will lead the revolution," she says. 

"The mRNA technology is novel and difficult to develop; only a few studied it intensively before the pandemic. 

And if you look at the history of medicine, it often takes decades for other companies to catch up with such new developments."

One of the two German pioneers should have the best chances, says Shu. 

"BioNTech could play a similar role in the pharmaceutical industry as Tesla or Apple in their industries," says Shu: a relatively small company that asserts itself against the established large corporations on the global market.

A year and a half ago it was hard to imagine. 

The company from Mainz was virtually unknown outside of the industry. 

At the end of 2019, BioNTech had just 1,339 employees, and revenues that year had fallen from 127 to 108 million euros, with losses skyrocketing from 48 to 179 million euros.

Back then, Şahin and Türeci were primarily focused on the development of mRNA preparations to fight cancer – until they began concentrating on the development of a COVID-19 vaccine in January 2020. 

Still, they have continued with their cancer research, and that is now paying off.

Moderna CEO Stéphane Bancel: The company has a market capitalization on the stock market of $80 billion. Foto: Cody O'Loughlin / The New York Times / REDUXPICTURES / laif


"BioNTech has always had its sights on cancer treatments, and that has given them a head start," says Elmar Kraus. 

The analyst spent years working in the pharmaceutical and biotechnology industry, where he conducted research into RNA. 

Today, he works as an analyst focusing on the sector for Germany’s DZ Bank. 

Kraus says that if the BioNTech trials produce good results, an mRNA cancer drug could possibly reach the market as early as 2023 or 2024.

Kraus also believes that the company, a pioneer in the field, has a good chance of maintaining its lead over the pharmaceutical giants. 

"They have patented some of their technologies – not only the drugs, but also the processes." 

Both of those factors will make life difficult for potential copycats.

It also helps that BioNTech is no longer short of the money it needs to advance its research. 

This year, the company is expecting revenues of more than 12 billion euros, a hundredfold increase in turnover compared to 2019. 

The company has also concluded a long-term supply contract with the European Union for up to 1.8 billion doses. 

The expected booster shots could provide a steady stream of money for years to come.

"The BioNTech vaccine is comparable to an iPhone from Apple,” says analyst Kraus. 

"It’s a product that many people absolutely want and are accordingly willing to pay more for it.”

Still, isn’t there a danger of BioNTech being swallowed up by a big pharmaceutical company? 

Analysts consider that to be unlikely, saying that the former startup has now likely become too expensive. 

Last week, the company had a market capitalization on the stock exchange of around $53 billion. 

Any buyer would have to offer existing shareholders significantly more in the event of a takeover attempt – assuming the current shareholders want to sell at all.

So far, BioNTech’s major shareholders, the Strüngmann brothers, have shown no interest in selling off their stake, even though it has a value of more than 20 billion euros. 

Şahin, whose shares are now likely to be worth around 7 billion euros, has completely different plans. 

He and the Strüngmanns want to develop Germany into a global player.

The only rival that could possibly take on BioNTech is Pfizer, the very company the German firm has partnered with for the production, sales and distribution of its COVID-19 vaccine. 

The U.S. multinational has its sights set on creating its own mRNA products for other illnesses in the future.

Pfizer CEO Bourla: "There is a technology that has proven dramatic impact and dramatic potential." Foto: Bryan Derballa / The New York Times / REDUXPICTURES / laif


Pfizer’s own scientists have learned a lot from the COVID-19 partnership, says CEO Albert Bourla. 

"There is a technology that has proven dramatic impact and dramatic potential,” Bourla told the Wall Street Journal in March. 

"We are the best-positioned company right now to take it to the next step because of our size and our expertise.”

With total a total value of around $80 billion, the U.S. company Moderna has even higher market capitalization than BioNTech. 

The company’s largest shareholder is Noubar Afeyan, a 58-year-old with Armenian-Lebanese roots who has been investing in biotechnology companies for around two decades with his venture capital fund Flagship Pioneering. 

Thanks to its own coronavirus vaccine proceeds, Moderna will also have enough fresh capital for years to come to advance the development of new mRNA drugs.

In contrast to BioNTech, Moderna has so far largely concentrated on vaccines, says industry expert Kraus. 

The Americans are nowhere near as advanced as the Germans in cancer drugs.

It is likely to be even more difficult for CureVac to keep up with BioNTech. 

The second German mRNA pioneer has considerable expertise in cancer research, but the flop of its coronavirus vaccine has slammed the breaks on the company for now. 

Interim research results released by the company last Wednesday night showed that the vaccine doesn’t even show 50 percent effectiveness.

Whether the vaccine will even be approved is an open question. 

And even if its use is authorized, it is unlikely to make much of a difference at this point. 

German Health Minister Jens Spahn has already factored CureVac out of the current vaccine campaign in Germany.

It’s possible that the contract the company closed with the EU for 225 million doses, plus an option for a further 180 million doses, will no longer be valid. 

"If it turns out that the European Medicines Agency doesn’t give the green light, then the product cannot be put on the market, and then member states will not pay for the purchase,” a spokesman for the European Commission told DER SPIEGEL.

For CureVac, that would mean that, with a rumored sale price of 10 euros per dose, the company would lose billions of euros in liquid funds that could go toward the research and development of new drugs. 

It would be a tough blow because the company generates few other revenues right now. 

In 2020, the company had turnover of less than 50 million euros.

The company’s share price plummeted by almost 50 percent within hours of the announcement about the vaccine’s weak effectiveness. 

CureVac’s market capitalization of less than 8 billion euros is much lower than that of BioNTech and Moderna.

But that doesn’t necessarily mean that the company will be the subject of a takeover. 

Nothing can happen without the consent of the main shareholders. 

One is SAP co-founder Dietmar Hopp, who holds around 43 percent of the shares through his holding company Dievini. 

Another is Germany’s KfW federal investment bank, which holds a 16 percent stake in the company.

So far, Hopp hasn’t had any outstanding success with his biotech investments. 

He generally keeps out of the everyday business of his holdings, with many of the important decisions being made by Friedrich von Bohlen und Halbach, the CEO of Hopp’s biotech holding Dievini.


Von Bohlen und Halbach, the nephew of the former owner of steel company Krupps, has a doctorate in neurobiology, knows his way around the topic of mRNA and is said to be enthusiastic about the medical technology. 

But he often shies away from partnering with corporations and other investors, instead preferring to try things on his own. 

But that can also come back to haunt you, as it did with the COVID-19 vaccine flop.

Multi-billionaire Hopp has been investing a lot of money in biotech for years now. 

According to his own statements, he had already invested around 1.4 billion euros in the sector by 2018. 

In the time since then, he has invested in at least 16 companies. 

Some of those investments have been a flop, but so far, CureVac has not been one of them. 

Even with the current share price, Hopp’s stake in the company is worth more than 6 billion euros. 

But the 81-year-old is unlikely to spend any more money on research and development.

Many other investors are now lining up to invest in biotech startups, part of a gold rush in the industry since the successes with the coronavirus vaccines. 

The possibilities of mRNA technology seem endless.

The German chemicals company Evonik is a key supplier of the lipids needed to deliver the mRNA agents into the cells. 

Evonik’s market potential for these lipid systems is estimated to be more than $5 billion by 2026. 

In a joint project with Stanford University, the company wants to develop a method for the targeted administration of mRNA to different tissues and organs.

More than 150 different mRNA-based treatments and vaccines are currently in development worldwide, with small teams often driving the innovation. 

Meanwhile, pharmaceutical companies are on the lookout for partners. 

Around half of the studies are being prepared in North America. 

Houston Methodist, a hospital at the Texas Medical Center, for example, has its own dedicated department where researchers at the hospital can order custom mRNA for their patients.

Competition is thus likely to increase, and the focus now should be on building up a new industry around mRNA, says Uğur Şahin. 

"Of course, the state can support that," he adds.

But the industry is still having a tough time in Germany, where it can take many months to get permits for necessary manufacturing facilities.

Still, approval procedures have been accelerated considerably in recent years. 

In the case of drugs for serious diseases, the authorities are often involved in the conception of the studies – and are constantly supplied with interim results during the course of those studies.

This rolling review process, which has proven successful for the COVID-19 vaccines, is also now used for some cancer drugs. 

The likelihood is growing that this will become the standard for life-threatening diseases.

"The following must apply to new technologies: Innovation needs to be given the right of way. 

There need to be more incentives and fewer prohibitions. 

More competition and less state control," says Christian Kullmann, the CEO of Evonik. 

New production capacities would make Germany and other countries in Europe less dependent on global supply chains. 

"It’s a good strategic goal to be the 'world’s pharmacy’ again. 

That was always good for the world and good for Germany."

In any case, there is no shortage of ideas. Scientists at CureVac are currently developing a printer that would spit out mRNA at the touch a button. 

The prototype is located in a clean room in the German college town of Tübingen and has already delivered the first molecule samples. 

That kind of device would be comparably easy to transport and would make it possible to manufacture each patient’s personal medication on the spot.

There are no limits to what can be done, says CureVac co-founder Hoerr. 

"In 10 years, it’s going to be very normal that a lot of the things you get from the pharmacy are going to consist of mRNA." 

House of pain

Someone has to foot the bill for empty offices

Even small drops in occupancy rates will have a big effect on rents and prices


In recent weeks diversity at work has taken on a new meaning. 

As vaccination progresses in the rich world and restrictions ease, some huge office tenants, such as Goldman Sachs, a bank, want staff back full-time, while others, like Citigroup, a rival, expect some employees never to set foot in a central business district again. 

Behind the posturing, a consensus is slowly emerging that white-collar desk-warriors should be allowed to stay at home more often post covid-19—and that many probably will. 

Office landlords, however, and those who bankroll them, continue to pretend that no storm is coming. 

With billions of dollars sunk in undesirable buildings, they face a reckoning.

Office bulls rest their case on two pillars. 

One is to argue that recent evidence shows pandemic-induced disruptions are superficial and temporary. 

Offices have been spared the carnage that lockdowns have inflicted on other kinds of commercial property, such as restaurants and shops. 

Even as rent collections plummeted elsewhere, most corporate tenants have continued to pay on time. 

Debt delinquencies remain a rarity, and prices paid for floor space in global cities have held up. 

No matter that most open spaces remain eerily silent. 

Developers report rises in viewings and lettings, and investors have already pledged billions of dollars to new projects.

The other strut of the bulls’ argument involves heroic predictions about the future of work. 

Workers have missed water coolers so much, they say, that most are bound to flock back. 

Die-hard sofa-surfers can be persuaded back to the office with new rooftop pools, pet-friendly concierges and Michelin-starred canteens. 

Even if some skip a few days a week, the need to space out desks in an era of pandemics, and rising appetite for brainstorming pods after a year of dreary Zoom calls, should keep demand for office space constant. 

And even if it does not, unwanted space can always be salvaged by, for instance, converting it into industrial-chic lofts or logistics centres.

Such optimism is at best deluded, at worst dishonest. 

It is too early to tell if offices have avoided the pain that months of social distancing have caused in other industries. 

Government help, lenient banks and central-bank largesse may have postponed delinquencies and distressed sales. 

Corporate tenants are locked into long-term leases which have yet to expire, and may not be renewed. 

Transaction prices are a poor gauge of the market’s health: because buyers and sellers cannot agree on terms there have been few sales. 

In some countries new covid-19 variants may prompt restrictions, delaying a full reopening.

Even small drops in long-run occupancy rates will have a big effect on rents and prices. 

The imf reckons a rise in vacancy rates of five percentage points in all commercial property would cause valuations to fall by 15% over five years. 

Fitch, a rating agency, says that if workers in America do not commute at least three days a week, valuations could tumble by over half.

Given that Moody’s, a rival, predicts a fifth of the country’s offices will be empty by 2022, landlords may have to brace themselves for worse. 

Uncertainty is compounded by the indecision of many firms. 

Many still have to make their mind up about hybrid working, which may yet become a new norm.

Abstract debates about aggregate demand hide the fact that property pain will not be evenly shared. 

As firms seek to lure talent and foster teamwork by revamping their hqs, snazzy offices in city centres will remain in demand (though making them fancier, healthier and greener will cost the landlords dearly).

Yet they are outnumbered by old and poorly ventilated blocks which will struggle to lure staff and therefore tenants. 

Upgrading or converting them will often cost a fortune. 

At best, their owners face falling rents or sales at marked-down prices. 

At worst, they risk having capital tied up in stranded assets.

Cheaper office rents will help some firms. 

But the financial costs are immediate. 

Banks have lent $2.4trn to commercial property in America alone. 

But they have brought loan-to-value ratios down from the dizzying heights of the financial crisis. 

A market correction would probably slap them in the face without knocking them out. 

Instead, more of the bill will fall on equity holders, not least pension funds and insurers which, in their hunt for returns in an era of low interest rates, have been loading up on property for years. 

The sooner they admit that losses are coming, the sooner they can try to limit the damage.

The U.S. Midwest Is Foreign Oligarchs’ New Playground

Forget Manhattan or Monaco; it’s cities like Cleveland that are now attracting ill-gotten money from abroad.

By Casey Michel, Paul Massaro

Workers take down the LeBron James banner from the Sherwin-Williams building on the corner of Ontario and West Huron in Cleveland, Ohio, on July 3, 2018. ANGELO MERENDINO/GETTY IMAGES


For many in the West, the notion of kleptocracy—of transnational money laundering tied to oligarchs and authoritarians bent on washing billions of dollars in dirty money—remains a foreign concept. 

It conjures images of oligarchs purchasing penthouses in Manhattan or regime insiders floating aboard yachts along the French Riviera or maybe even the children of despots racing luxury cars down the streets of Paris. 

With pockets bulging with billions of dollars in illicit wealth, it makes a certain sense why these kleptocrats would gravitate toward other deep-pocketed areas.

But these kleptocrats are no longer just laundering and parking their dirty money in places like Miami, Malibu, and Monaco. 

Instead, they’ve begun targeting new areas for their laundering sprees, places few would suspect: from declining, second-tier cities like Cleveland, Ohio, to small factory and steel towns across the American Midwest. 

In so doing, these kleptocratic figures are no longer simply keeping luxury condos on standby or collecting fleets of private jets and high-end automobiles. 

Instead, they’re increasingly leaving a trail of destruction in their wake, demolishing the economies of working-class towns and leaving behind empty, sagging downtowns as relics of better times.

Take, for instance, the ongoing story of Ukrainian billionaire Ihor Kolomoisky. 

Recently sanctioned by the United States for his rank corruption, Kolomoisky stands accused by Ukrainian and U.S. authorities of overseeing one of the greatest Ponzi schemes the world has ever seen. 

Running PrivatBank, one of Ukraine’s leading retail banks, for years, Kolomoisky crafted an image of a successful entrepreneur devoted to Ukraine’s growing middle class. 

However, not long after Ukraine’s successful anti-authoritarian revolution in 2014, Ukrainian authorities began poking around the ledgers of Kolomoisky’s bank. 

Their findings were staggering. 

Ukrainian investigators—led by Valeria Gontareva, then-reformist head of Ukraine’s banking governing body—discovered a $5.5-billion hole in the middle of PrivatBank’s books.

The hole forced Kyiv to nationalize the bank, plugging an institution that was too big to fail and sending Kolomoisky on the run. 

When it came to Ukrainian banks transforming into money laundering machines, “PrivatBank wasn’t an exception,” Gontareva told Foreign Policy. 

“The problem was that it was the biggest one.”

The immediate question was an obvious one: Where had the money gone? 

As journalists discovered, and as the U.S. Justice Department has alleged in a series of filings in recent months, Kolomoisky didn’t direct the missing billions of dollars into London flats or mansions on the Italian coastline. 

Instead, as U.S. and Ukrainian investigators discovered, Kolomoisky and a network of enablers plowed much of the money into commercial real estate in places like Cleveland and Louisville, Kentucky—and into small towns reliant on manufacturing plants and steel factories in Illinois, West Virginia, and Michigan. 

Rather than use the illicit money to play alongside the world’s elite, Kolomoisky and his network allegedly buried their money in the heart of Middle America, using a series of shell companies and cash purchases to obscure their trail.

Why would a foreign oligarch decide to hide hundreds of millions of dollars (and potentially more) across overlooked pockets of the United States? 

Kolomoisky’s example offers three possible motivations. 

The first reason lies in the obscurity of smalls town like Warren, Ohio, and Harvard, Illinois. 

Few investigators, journalists, and authorities would have paid any attention to these purchases, let alone asked questions about the source of funds. 

Unlike places like Seattle, Dallas, or New York City, where the United States now effectively bars anonymous real estate purchases, much of the rest of the country remains perfectly open for the kinds of anonymous real estate purchases at the heart of kleptocratic networks.

The second reason appears directly linked to the economic decline of many of these overlooked regions, especially following the Great Recession. 

For many of these assets, the only buyers are often kleptocrats with deep pockets. 

In Cleveland, for instance, Kolomoisky’s network of enablers swooped into town when no one else appeared interested, snapping up numerous massive downtown buildings in the post-2008 world. 

According to a local Cleveland journalist who requested to speak on background, Kolomoisky’s network simply “showed up in Cleveland and started buying when no one else was buying.” 

Eventually, the oligarch and his team became the biggest commercial real estate holders in the entire city. And that dynamic—with kleptocratic money the only game in town—meant those on the receiving end had no incentive to look this foreign gift horse in the mouth, even when the signs of money laundering were clear.

And the ease of entering these markets meant Kolomoisky and his network could do whatever they wanted with these assets—even running them into the ground as they did time and again. 

Indeed, Kolomoisky never appeared interested in turning a profit for any of these U.S. assets but instead using them simply as something of a kleptocratic nest egg, far away from Ukrainian authorities. 

According to court documents, Kolomoisky used his U.S. investments simply as nodes in his laundering network, allowing them to slowly fall apart—but not before, in some cases, these assets’ slow-motion collapse sent Americans to the hospital with debilitating injuries.

This happened time and again across the American Rust Belt and Midwest. 

The steel plant in Warren, now shuttered, looks like something out of a dystopian landscape, with cavernous holes gouged in the siding and walls covered in rust—and with all of its former employees now without jobs. 

A hulking manufacturing plant in the town of Harvard, Illinois—a plant that should have been the economic lifeblood for the town—has been left to rot, with the cash-strapped city left to pick up the tab. 

(“The building is fucking cursed,” Michael Kelly, the town’s mayor, told us.) 

And rather than investments and the dreamed-of revitalization, Cleveland has been left with, as one local paper said, a “gaping hole” in its downtown, courtesy of the investments Kolomoisky and his network let effectively implode. 

As the local journalist familiar with the Kolomoisky-linked purchases added, “They pretty much ruined everything they touched.”

Over and over again, Kolomoisky and his network allegedly turned to Middle America—overlooked towns, forgotten areas, regions that needed an economic lifeline, whatever the source—for their massive laundering needs. 

And in so doing, they revealed kleptocrats no longer simply turn to the coasts or the cultural capitals and beach-front areas traditionally associated with modern kleptocracy. 

Main Street America is now a target for this corrosive, kleptocratic capital, draining these areas of whatever hope or promise remained.

“I like to use the analogy of—if you’ve ever lived out in the far West—a dry streambed,” said former FBI agent Karen Greenaway, who’d been involved in tracking transnational money laundering for years, in 2019 congressional testimony at the Helsinki Commission, an independent U.S. federal agency focusing on human rights and pro-democracy policies. 

“Dirty money is like a rainstorm coming into a dry streambed. 

It comes very quickly, and a lot of it comes very fast, and the stream fills up, and then it gets dry again.” 

Yet the sources of illicit wealth—those behind the dirty money flood—aren’t interested in turning their investments into productive, job-creating engines. 

“What we have is people who don’t live in the United States, who don’t have any intention of really investing in the United States, but they needed a place to put their money,” Greenaway continued. 

“I think it’s hurting small-town America. 

I just don’t think that we’ve come to that realization yet.”

Thankfully, U.S. legislators are finally starting to propose solutions and beginning to center the kind of kleptocracy embodied by Kolomoisky at the heart of proposed reforms. 

Although the polarization of Congress is taken for granted these days, counter-kleptocracy efforts remain an important space where Democrats and Republicans continue to agree. 

As such, a bipartisan slate of legislators will be launching a “Caucus Against Foreign Corruption and Kleptocracy” on June 10, seeking to advance solutions and educate other members on the corrosive effects of kleptocracy, especially as it pertains to its effects on mainstream Americans.

The proposed solutions address three primary prongs of counter-kleptocracy efforts. 

The first of these proposals entails enhancing resiliency at home by building legal and financial systems more resistant to the taint of corruption. 

Congress took a significant step forward last year by banning anonymous shell company formations, long a favorite tool of kleptocrats moving their money around the West. 

But it hasn’t stopped there. 

Congress will soon be debating the Transnational Repression Accountability and Prevention Act, a critical piece of legislation to counter authoritarian regimes increasingly reaching into democratic countries to target dissidents and journalists (such as what we recently saw out of Belarus). 

Kleptocratic regimes do this via things like Interpol, which is itself regularly abused by these governments and figures to harass and silence dissidents and critics, ensuring their stolen money remains hidden elsewhere. 

Among other things, this bill would effectively protect the U.S. judicial system from abuse by kleptocrats and would aid U.S. efforts to reform rule-of-law governance mechanisms within Interpol.

The second prong of proposed reforms targets kleptocrats directly, including the use of sanctions, visa bans, intelligence networks, and law enforcement authorities to disable individual kleptocrats and ensure they cannot corrode democratic institutions.

Congress took another step forward last year with the passage of the Rodchenkov Anti-Doping Act, a rare extraterritorial criminal statute that enables U.S. law enforcement to indict and pursue “doping fraud,” the use of doping regimes to defraud athletes, businesses, and states—a common tactic of authoritarian kleptocracies at international games.

Congress is also now set to debate the Foreign Extortion Prevention Act (FEPA). 

If passed, this bill would serve as a long-awaited complement to the Foreign Corrupt Practices Act (FCPA). Where the FCPA makes it illegal for a company to pay a bribe abroad, FEPA will make it a crime for a foreign official to demand a bribe. 

This creates liability for the kleptocrats who extort law-abiding companies. These kleptocrats can then be arrested and tried when they travel to the West to spend and launder their ill-gotten gains.

Finally, the third prong centers on building the rule of law abroad, including emphasizing more targeted uses of foreign aid to fight corruption as well as working closely with allies to dismantle the broader offshore economy. 

For instance, the Countering Russian and Other Overseas Kleptocracy Act, recently introduced in the Senate by Democratic Sen. Ben Cardin and Republican Sen. Roger Wicker, would create an “anti-corruption action fund” that accumulates money via a surcharge on fines from the FCPA. 

These resources can then be surged into countries undergoing significant democratization movements and reforms (such as Ukraine following its successful 2014 revolution), providing increasing resources for investigators in recipient countries to track how these kleptocrats loot, launder, and stash their ill-gotten gains abroad—including in places like small-town America.

A whole host of other ideas are under discussion in Congress, many of which will be spearheaded by the forthcoming “Caucus Against Foreign Corruption and Kleptocracy.” 

And the ideas can’t come a moment too soon. 

As the case of Kolomoisky clearly illustrates, kleptocracy and the regimes that benefit are no longer things that simply happen abroad or in elite, coastal enclaves. 

Until these bills are passed and currently floated ideas are implemented, these kleptocrats will continue to assume they can target any U.S. state, city, or town they’d like—and that they can upend the lives of Americans regardless of profession or political leaning.


Casey Michel is an investigative journalist and the author of the forthcoming book American Kleptocracy: How the U.S. Created the World’s Greatest Money Laundering Scheme in History.

Paul Massaro is the policy advisor for counter-kleptocracy at the Helsinki Commission. Views expressed here do not necessarily reflect those of the Helsinki Commission. 

The Increasing Credit Relevance of Cybersecurity

Firms should seek to learn from past cyberattacks and take active measures to prevent and detect future threats. Given the potential positive impact on their credit ratings, the benefits of robust cybersecurity will likely extend beyond the digital realm.

Simon Ashworth


LONDON – The recent ransomware attack that shut down the Colonial Pipeline in the United States exemplifies the growing sophistication of cyberattacks over the past 12 months. 

Ever since the Colonial attack, there have been attacks involving the insurance sector in Asia, a European truck lease provider, a French distressed debt purchaser, and a global food company. 

All involved ransomware demands and highlighted attackers’ ability to choose targets without regard for geography or sector.

Nor are attacks limited to listed firms: sovereign states and public institutions are acutely vulnerable, too. 

We have seen attacks on the US city of Hartford, numerous Texas school districts, and, more recently, on the Irish health-care system.

Not surprisingly, cyber risk is becoming an increasingly important factor in determining credit ratings. 

At S&P Global Ratings, we have seen more credit-relevant cyber events in the last six months than in the previous six years, and we routinely reflect on recent cyber developments to sharpen our focus. 

Our most recent assessments have reinforced many of our previous views, but our perspective on managing cyber risk continues to evolve.

Many of our rated entities, particularly in information technology and insurance, are seeing more opportunities emerge in cyber services. 

But firms would benefit from taking several steps to help mitigate the potential credit impact of cyberattacks.

First, swift action remains vital – as we saw recently in the wake of the cyberattack on the US insurer CNA. 

The company’s prompt remedial measures – including communicating with employees, customers, brokers and agents, investors, and regulators – helped to limit the extent of the damage and allayed our initial concerns about the potential impact on its brand, reputation, and competitive position.

Second, while active prevention of cyber events is now becoming the norm, many cyberattacks are being structured in a way that makes them ever more difficult to uncover. 

Active detection will therefore become a competitive advantage.

We saw the importance of active detection in the case of SolarWinds Holdings Inc., which is widely reported to have suffered a cyber breach in early 2020 – several months before the firm noticed it. 

The time that elapsed from attack to detection increased the scale and magnitude of the event. 

The impact and cost of the attack contributed in part to S&P’s recent downgrade of SolarWinds to B from B+.

Third, although the COVID-19 pandemic will likely increase senior executives’ propensity to allocate funds to manage their firms’ exposure to cyber risk, this is not enough. 

Given that a large proportion of cyber-related breaches can be traced to a deficient risk culture or human error, even sizeable cyber IT spending is not sufficient. 

Money alone cannot address this risk. 

We therefore expect to see more C-suite support for simulation exercises to gauge and probe preparedness.

Fourth, the credit impact in the wake of a cyberattack remains contingent on the type of attack and its underlying motive. 

Companies may suffer indirectly as a result of centralized, perhaps politically motivated attacks such as the SolarWinds and Microsoft Exchange Server episodes, but these may not always have direct financial and reputational consequences. 

Direct attacks on specific firms or institutions, which combine a balance-sheet event with material operational disruptions, are more likely to have ratings implications, particularly if they are poorly managed.

Fifth, companies are in a virtual arms race with attackers, so they need to get cyber risk basics right even to have a chance of staying one step ahead. 

Those with subpar governance standards will likely have a relatively weaker credit rating prior to any cyberattack. 

We will increasingly watch out for lax cyber governance standards in particular, and especially a lack of basic features such as employee training and software patching. 

Adequate and timely patching reduces firms’ potential exposure to known vulnerabilities that cyber attackers often attempt to exploit.

We regard management of cyber risks as a category of overall operational risk management. Conventional and standard risk management and governance can be easily adapted, so it is important for companies to be aware of their cyber risk appetite and tolerance level. 

If a firm cannot stay one step ahead, it must ensure that it does not fall behind its peers. 

At a minimum, we would expect a company to have a reliable and fully tested data backup and recovery strategy.

Sixth, the next major threat to the global financial system could easily be cyber related, with more correlated risk and more rapid contagion than is currently anticipated. 

Companies and governments should plan accordingly. 

Depending on its magnitude and financial impact, as well as the success of mitigation efforts, such an event could trigger widespread rating actions. 

Companies with weaker balance sheets that lack adequate cyber insurance will more likely face credit rating pressure.

Insurers themselves are learning from pandemic-related ambiguity across their products, and this must remain a focus. 

The August 2020 cyberattack on New Zealand’s stock exchange (NZX) should not have been unexpected, given the role the exchange plays in the financial system. 

NZX subsequently accepted that its technology resources and crisis-management planning needed improvements.

Lastly, events over the past 12 months have highlighted the vulnerability of complex, interdependent production networks, making supply chains an increasing source of cyber risk in the coming years. 

As a number of recent attacks – including those on SolarWinds, the Microsoft Exchange Server, and Codecov – and the 2013 data breach at Target have highlighted, cyber risk governance must focus on the wider supply chain, including cyber standards at third-party providers.

Firms should make it part of their DNA to learn from past cyberattacks and take active measures to prevent and detect future threats. 

Given the importance of cyber-risk governance for credit ratings, the benefits of robust cybersecurity will likely extend beyond the digital realm.


Simon Ashworth is Head of Analytics and Research – Insurance at S&P Global Ratings.