[Ip-health] Stat: Ruling threatens to upend patents on Moderna’s Covid-19 vaccine
thiru at keionline.org
Fri Jul 24 04:09:30 PDT 2020
Ruling threatens to upend patents on Moderna’s Covid-19 vaccine
By DAMIAN GARDE @damiangarde
JULY 23, 2020
Moderna, racing to develop a vaccine for Covid-19, lost a key patent
decision Thursday, one that could delay the company’s progress or force it
to hand over a cut of profits.
The U.S. Patent and Trademark Office denied Moderna’s claim that a patent
held by a rival company was invalid. The patent, which covers technology
used to deliver messenger RNA treatments, is held by the Canadian firm
That sets up a situation in which Arbutus might file for an injunction
that, if successful, would block Moderna from selling its Covid-19 vaccine,
which is expected to enter a Phase 3 trial this month. It might also lead
Moderna to negotiate a license agreement in exchange for royalties, which,
if the company’s vaccine becomes the multibillion-dollar product Wall
Street expects, could bring in hundreds of millions of dollars for Arbutus.
Moderna’s share price fell about 10% on the news Thursday, losing roughly
$3 billion in value. Arbutus, a small-cap company, nearly doubled.
In a statement, Moderna said it “may further pursue” the question of
whether Arbutus’s patents are valid, adding that the company is “not aware
of any significant intellectual property impediments for any products we
intend to commercialize,” including its vaccine for Covid-19. Arbutus did
not immediately respond to a request for comment.
On the one side is Arbutus, which could sue to block Moderna’s vaccine,
called mRNA-1273, in hopes of getting a royalty. But that would mean taking
the substantial risk that it would be perceived as the company holding up a
desperately needed medicine out of concern for its bottom line.
On the other side is Moderna, which could preemptively pay Arbutus for a
license to the patent, knowing that its negotiating power is weakened
considering the immediacy of mRNA-1273. Conversely the company could take
its chances in court, betting that it can either win outright or negotiate
for a modest royalty years down the road, once it has already established a
revenue stream from the vaccine. But that risks being on the losing side of
an injunction that would let Moderna’s many Covid-19 rivals get to the
“In our view, this decision opens the door to a fascinating (and likely
protracted) period of investor controversy and debate around the
implications of any potential infringement of claims” from Arbutus by
Moderna, SVB Leerink analyst Mani Foroohar wrote in a note to clients.
What’s clear from the legal proceedings is that Moderna takes seriously the
potential threat of Arbutus’s intellectual property. Thursday’s ruling
concluded one of three patent challenges mounted by Moderna against
Arbutus. The first, decided in September, was a unanimous victory for
Moderna. The second was split between the two companies, invalidating some
of Arbutus’s claims but leaving others be.
Moderna’s legal entanglement with Arbutus dates back to at least 2016, when
the companies got into a proxy fight over the same intellectual property.
Moderna got access to Arbutus’s nanoparticles by taking out a sublicense
with a third firm, called Acuitas. Arbutus got wind of that and
successfully sued to have Acuitas’s license revoked, leaving Moderna in the
Moderna later said that it had invented lipid nanoparticles of its own and
no longer needed Arbutus’s technology. Arbutus has maintained that nothing
Moderna has patented is free of infringement.
The answer may yet be decided in court.
This story has been updated to include a statement from Moderna.
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