Moderna (MRNA) has successfully resolved a long-standing patent dispute with Arbutus Biopharma (ABUS) and a subsidiary of Roivant Sciences (ROIV), marking a significant milestone for the company in its battle over COVID vaccine technologies. This development resulted in a modest uptick in Moderna’s stock following the announcement.
As part of the settlement, Moderna will pay a one-time fee of $950 million to both Arbutus and Genevant Sciences. Furthermore, the company plans to seek immunity from the Federal Circuit court on the grounds of being a government contractor. Should this appeal fail, Moderna could incur an additional liability of up to $1.3 billion within a 90-day window.
This agreement puts to rest all pending litigation globally, and notably allows Moderna to forgo any future royalty obligations for its current vaccines, including Spikevax, the original COVID vaccine, and mResvia, a vaccine targeting respiratory syncytial virus (RSV). It also sets a clear path regarding potential legal challenges related to its upcoming vaccines, such as mNexspike and mCombriax.
With these legal clouds now lifted, Moderna anticipates finishing the year with cash reserves between $4.5 billion and $5 billion, offering it a robust financial cushion for future endeavors.
In after-hours trading, Moderna’s stock saw a notable increase of nearly 9%, climbing to $54.29. The stock has experienced considerable volatility this year, rising by as much as 87% before experiencing a 34% pullback in early February. After rebounding off its 50-day moving average, the stock is now on a potential upward trajectory, approaching its January peak of $55.20.
Moderna’s stock has been performing well, indicated by a high relative strength rating, showcasing its competitive edge in the market. However, the response from Arbutus’s stock was less favorable, experiencing a decline of 10.5%, whereas Roivant’s shares edged slightly higher.
This settlement paves the way not just for Moderna’s existing products but also positions it favorably for future innovations in the fast-evolving biotech landscape. It highlights the complexities and financial implications of patent rights in the pharmaceutical industry, particularly amidst a global pandemic where intellectual property has become more contentious than ever.
