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Patent wars: Moderna’s battle for the spoils of Covid vaccines

In autumn 2020, as drugmakers raced to get vaccines to market in the face of the biggest public health crisis in a generation, Moderna made a bold pledge: it would not enforce its patents against rivals developing Covid-19 jabs.

This year, however, almost two years after Pfizer and BioNTech beat it to the first approved mRNA jab, Moderna fired back with a lawsuit over patents for a technology that could open the door to many more vaccines.

If Moderna wins, it could gain a slice of billions of dollars in revenues from the BioNTech/Pfizer Covid jab. Perhaps more importantly, it would also signal to investors and Big Pharma that the Massachusetts-based company is primed to dominate the future mRNA market.

Stephen Reese, an intellectual property lawyer with Clifford Chance who advised Pfizer on its deal with BioNTech, said Moderna’s pledge had been made in the “heat” of the pandemic.

“The Rubicon has been crossed, in a way, now that Moderna has gone out to sue over a Covid-19 vaccine,” he said. “Fundamentally, this is not a fight about Covid-19 vaccines, this is a fight and ongoing litigation about mRNA platforms.” 

Sales of coronavirus shots are falling and forecast to slump further. Moderna and BioNTech are investing their proceeds in looking at ways to use messengerRNA, which delivers genetic codes into the body, in vaccines for other infectious diseases, including HIV, and in medicines such as personalised cancer treatments. However, they are still far from market.

Vaccine makers are likely to increase the price of the shots significantly as US commercial payers take over buying the jabs, which have previously been bought on government contracts.

Moderna first signalled it was preparing a lawsuit in March, announcing it was “updating its patent pledge never to enforce its patents for Covid-19”. With plentiful supply of vaccines in middle- and high-income countries, the company said it now expected those outside the poorest 92 nations “using Moderna-patented technology” to respect its intellectual property.

In August, it filed its suit against Pfizer and BioNTech in the US and Germany, saying it would seek damages for the infringement of three patents.

One covers a key modification made to reduce side effects that allows for larger doses, which is thought to be why the Pfizer and Moderna jabs were more successful than German mRNA company CureVac’s first-generation vaccine, which did not include the tweak.

Sales of Covid-19 vaccines are forecast to fall*

Others cover the design of the spike protein, which teaches the immune system to recognise the virus, based on Moderna’s previous work on another coronavirus that caused Middle East Respiratory Syndrome.

But Moderna’s lawsuit was not the first in what promises to be a many-party fight over who owns which patents in the world’s most lucrative vaccine.

CureVac had already sued BioNTech in July, with its chief executive Franz Werner Haas claiming BioNTech was “standing a bit on our shoulders”, referring to patents including one related to manufacturing and one to how you mRNA is delivered into the body.

BioNTech declined to comment. Pfizer said: “We remain confident in our intellectual property supporting the BioNTech/Pfizer vaccine and will vigorously defend against the allegations of the lawsuit.”

Moderna has been sued by Alnylam Pharmaceuticals, Arbutus Biopharma and Genevant Sciences, which also lay claim to the delivery mechanism used on the jab. Moderna said the companies’ claims were “unfounded” because its vaccine does not infringe any “valid patents”. 

Aziz Burgy, a US patent litigator at Axinn Partners, said companies were looking at their intellectual property to figure out if they had any claims. “The lawsuits have popped up recently in large part because of the potential damages at stake here, with these vaccines being distributed to billions of people.”

If Moderna wins, legal experts estimate it could be awarded damages worth anywhere from 1 per cent to 10 per cent of sales.

But Ana Santos Rutschman, a professor of law at Villanova University who has written a book on Covid vaccines, said the royalties would probably only count after the expiry of the pledge not to enforce patents, thereby excluding the vast majority of sales so far.

“If Moderna prevails, Pfizer will pay royalties, probably under 10 per cent of sales, and that’s the worst that could happen to them.”

The three companies’ share prices barely budged when Moderna filed its lawsuit.

Moderna has moved carefully, aware the battle will also play out in the court of public opinion, and has not sought an injunction to stop Pfizer and BioNTech selling their vaccine.

Covid-19 vaccine revenues

It has also excluded many of the sales to the US government, which gave Moderna a helping hand worth at least $2.5bn, and is not pursuing a slice of sales to the poorest countries.

Santos Rutschman said Moderna appeared to have a “fairly persuasive case”, pointing in particular to the patent covering the spike protein.

“The full-length spike protein that was developed before the pandemic, when Moderna was working on MERS . . . that’s what enabled it to quickly produce the mRNA vaccine for Covid-19. There are some similarities in the technology there so I think the case is relatively powerful,” she said.

The patent could still be invalidated if it is too broad, or if someone else holds a similar patent that was filed even earlier.

Jacob Sherkow, a patent attorney at the University of Illinois College of Law, also thinks Moderna has a good chance of winning. But he warns that the more potential inventors, the more complicated the case could be. While mRNA has only recently become a success, scientists have been working on its development for so long that many of the earliest patents may have expired.

“All things being equal, it probably favours Moderna but things could change in a hurry,” he said.

Jorge Contreras, a law professor and director of the programme on intellectual property and technology law at the University of Utah, said a common approach in pharma patent suits was “the best defence is a strong offence”.

He said it would not be surprising if Pfizer or BioNTech “found patents that could be applied to Moderna’s products, and thus countersued Moderna for infringement”.

But one person close to BioNTech said the founders would be reluctant to sue back — though may find they have to as a public company accountable to investors.

Another possibility is that Pfizer and BioNTech argue the pandemic is still ongoing, because the World Health Organization has not yet declared it over, so Moderna’s pledge should still stand.

Or, Contreras argued, the US government could step in to facilitate a settlement to avoid potential barriers to preparations for future pandemics.

Most legal experts expect the battles to eventually conclude in a web of cross-licences, which should ensure new vaccines and therapeutics get to patients.

Large pharmaceutical companies that lagged behind in the race for the vaccine are now investing heavily in mRNA, including Sanofi, which bought Translate Bio for $3.2bn in 2021, and GSK, which is partnering with CureVac. They may have to cough up royalties to whoever wins these battles, or be more likely to partner with the mRNA leaders.

Santos Rutschman said the battle was primarily “reputational”, enabling Moderna and Pfizer and BioNTech to stake their claim in this new market. “We’re going to see a winner and the loser in the news. But I think both companies actually are going to win at the end of the day.”

Additional reporting by Jamie Smyth in New York

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