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Moderna sets up clash with Pfizer and BioNTech with patent lawsuits in the U.S. and Germany

Moderna Inc. on Friday filed lawsuits against Pfizer Inc. and German partner BioNTech SE, alleging the pair infringed patents relating to its mRNA platform, a key technology behind all of their COVID vaccines.

The suits were filed Friday in the U.S. District Court for the District of Massachusetts and the Regional Court of Düsseldorf in Germany and related to patents that were filed between 2010 and 2016.

“This groundbreaking technology was critical to the development of Moderna’s own mRNA COVID-19 vaccine, Spikevax,” the company said in a statement.

“Pfizer and BioNTech copied this technology, without Moderna’s permission, to make Comirnaty,” said the statement, referring to the Pfizer/BioNTech vaccine.

Pfizer and BioNTech responded by saying they had not yet fully reviewed Moderna’s complaint, “but we are surprised by the litigation given the Pfizer/BioNTech COVID-19 Vaccine was based on BioNTech’s proprietary mRNA technology and developed by both BioNTech and Pfizer.

“We remain confident in our intellectual property supporting the Pfizer/BioNTech vaccine and will vigorously defend against the allegations of the lawsuit,” they said in a statement.

See now: Polio and monkeypox demonstrate a ‘heightened focus’ on viruses

Moderna
MRNA,
-3.77%

CEO Stéphane Bancel said the company was seeking to protect the technology that cost billions of dollars in investments in the decade leading up to the pandemic.

The company said Pfizer
PFE,
-2.25%

and BioNTech
BNTX,
-4.01%

originally took four different vaccine candidates into testing, but eventually decided to move forward with a vaccine that had the same mRNA chemical modification as the Moderna one.

Moderna researchers had introduced mRNA into the body in 2010 and were first to validate it in human trials back in 2015, said the company.

Then Pfizer and BioNTech copied Moderna’s approach to encode for the full-length spike protein in a lipid nanoparticle formulation for a coronavirus. That approach was developed when Moderna created a vaccine for the virus that causes Middle East Respiratory Syndrome, or MERS, years before COVID emerged.

Moderna said in 2020 that it would not enforce its patents while the pandemic continued, but updated its pledge in March of 2022, once vaccines became widely available.

Read also: What will insurance coverage of COVID-19 vaccines and treatments look like? The Biden administration is trying to figure that out

The company said it would not pursue patents for vaccines used in the 92 low- and middle-income countries in the GAVI COVAX Advance Market commitment, but expects Pfizer and BioNTech to respect its IP rights now. 

Moderna would consider a “commercially reasonable license,’ should Pfizer and BioNTech request one for other markets, but the pair have not done so. It is not attempting to have Corminraty removed from the market, but is seeking monetary damages for sales since March of this year.

“We believe that Pfizer and BioNTech unlawfully copied Moderna’s inventions, and they have continued to use them without permission,” said Moderna Chief Legal Officer Shannon Thyme Klinger. 

 Mitchell Ng, managing director and founding partner at Thessalus Capital, said the case may have some merit, given that all new drugs — and ones using novel technology like mRNA — use some crossover knowledge from previous drug development.

However, he agreed that Moderna can make the case regarding the two aspects of its previous work that Pfizer and BioNTech copied, or at least unfairly benefited from.

“Pfizer/BioNTech could argue mRNA technology was already advancing and Moderna does not hold a monopoly on all applications of this technology, and the spike protein formulation is knowledge that does not belong to Moderna,” he said.

Still, he expects the suit is an opening bid for a negotiation, and doubts it will end in trial.

“Most of these legal actions don’t end up in court, it’s usually corporate positioning for an eventual settlement,” said Ng. “Similar to the current suit between Elon Musk and Twitter
TWTR,
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,
mostly positioning for an eventual settlement/renegotiation of Twitter’s sale price. 

“Bottom line is Moderna made a big bet on mRNA being a game changer back in the early 2010s, back when many people said it was a very risky if not foolhardy move, and is now is looking to fully cash on its investment through all possible avenues, which is understandable,” he said.

Moderna’s COVID vaccine was its first product to be granted approval by the U.S. Food and Drug Administration in January of 2022. That was after it was granted emergency use authorization in late 2020.

The company chalked up $18.5 billion in sales in 2021, up from $803 million in 2020. Product sales came to $17.7 billion due to the sale of 807 million doses of its COVID vaccine.

In its recent second quarter, revenue came to $4.7 billion, or $10.8 billion for the six-month period, up from $44.4 billion and $6.3 billion in the year-earlier periods.

The company is now working to develop other treatments based on mRNA technology and has 43 candidates, 31 of which are in active clinical trials.

All three stocks were lower Friday, with Moderna and BioNTech off 2%, while Pfizer was down 1%.

Moderna shares have fallen 45% in the year to date, while the SPDR S&P Biotech ETF
XBI,
-4.85%

has fallen 22% and the S&P 500
SPX,
-3.37%

has fallen 13%.

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