Moderna Settles Patent Dispute for $2.25 Billion, Stock Rallies Over 10%
Moderna will pay $2.25 billion to settle patent disputes with Arbutus Biopharma and Genevant Sciences over lipid nanoparticle technology used in its COVID-19 vaccine. The settlement removes uncertainty for Moderna's vaccine pipeline and sent the stock surging over 11%. The company expects to end 2026 with $4.5-$5 billion in cash and return to revenue growth by year-end.
Moderna has reached a $2.25 billion settlement to resolve a patent dispute related to its COVID-19 vaccine, sending its stock surging more than 11% in extended trading. The company agreed to pay biotech companies Arbutus Biopharma and Genevant Sciences $950 million upfront and an additional $1.3 billion to end their patent disputes over lipid nanoparticle delivery technology used in Moderna's mRNA vaccine.
The pending resolution "provides certainty going forward for Moderna's full infectious-disease portfolio," the company said, including its newer COVID vaccine, its combination COVID-and-flu shot, and "its future vaccine pipeline, with no future royalties owed." The settlement would be the largest disclosed patent settlement paid in the pharmaceutical industry and the second-largest in any industry. The two companies had sued Moderna for allegedly infringing on their patents related to the lipid nanoparticle delivery technology, which is key to developing mRNA-based medicines and vaccines.
Under the terms of the agreement, Moderna will make the $950 million payment in a lump sum in the third quarter. Moderna said it expects to end 2026 with $4.5 billion to $5 billion in cash and equivalents as a result of the agreement, retaining access to up to $900 million under an existing credit facility. It projected total liquidity available between $5.4 billion and $5.9 billion at the end of 2026.
"Resolving this legacy matter from our pandemic response removes uncertainty and allows us to turn our full focus to Moderna's exciting near-term future," the CEO stated. Moderna will return to revenue growth by the end of the year, according to the CEO. The company also expects the approval of the flu-plus-COVID vaccine and its standalone flu vaccines in addition to announcing "several highly anticipated" clinical-trial results in cancer and rare diseases.
Moderna's stock is up more than 60% in the past 12 months, far outstripping gains of about 17% for the S&P 500 index. The company's shares had previously risen 5.3% on February 13 as investors showed renewed interest in large-cap biotech names. Moderna stock traded down $4.01 during mid-day trading on Friday, reaching $49.56, with a trading volume of 7,085,134 shares compared to its average volume of 11,327,604.
The company reported ($2.11) earnings per share for the quarter ending February 13th, topping the consensus estimate of ($2.79) by $0.68. Moderna had a negative return on equity of 30.15% and a negative net margin of 145.16%. The business had revenue of $678.00 million for the quarter, compared to analysts' expectations of $611.14 million. The business's revenue for the quarter was down 33.2% compared to the same quarter last year.
In other news, the company's president sold 160,009 shares of Moderna stock in a transaction dated Monday, February 23rd. The shares were sold at an average price of $48.84, for a total value of $7,814,839.56. Following the sale, the president owned 1,457,427 shares in the company, valued at $71,180,734.68. This trade represents a 9.89% decrease in their ownership of the stock.