Moderna drops, Arbutus pops after patent ruling means vaccine maker could owe royalties on billions in COVID shot revenue

Despite being cheered by earnings, traders are still concerned about inflation.

Brendan McDermid.

Moderna stock fell after the vaccine maker lost a patent fight.
The ruling could lead to royalty payments from Moderna.
Moderna's COVID-19 vaccine is expected to bring in about $20 billion this year and next.

Moderna stock fell as much as 11% on Wednesday after the drugmaker lost a patent fight against Arbutus Biopharma, a small-cap biotech company that patented a technology essential to the success of mRNA COVID-19 vaccines.

Moderna had no standing to appeal the decision of the US Patent and Trademark Office to not invalidate patents held by Arbutus, according to the federal appeals court. Moderna had appealed.

After Wednesday's ruling, Arbutus' shares soared as investors bet that Moderna would pay royalties for its vaccines. According to analyst estimates, Moderna's vaccine is expected to bring in about $20 billion in revenue this year and next.
The patents that are subject to the court's ruling are for a new type of delivery. The lipids help protect the therapies as they travel through the body. Moderna has argued in the past that if the claims in Arbutus' patents were upheld they would be subject to patent lawsuits.

Dennis said that it could drag on for years with Arbutus likely to settle for a small royalty.
Moderna doesn't care about a small royalty because it's immaterial to the revenue opportunity from the vaccine, which is $10 billion to $20 billion annually.

Arbutus would benefit from those royalty streams. The company has a market cap of less than $1 billion and is on track to make $10 million in revenue.
Markets Insider.

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