Moderna’s Pain Is Arbutus’s Gain in COVID-19 Patent Ruling

By Chris Lange Published Jul 24, 11:25AM EDT

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Moderna’s Pain Is Arbutus’s Gain in COVID-19 Patent Ruling — © noipornpan / iStock

Arbutus Biopharma Corp. (NASDAQ: ABUS) stock has seen an incredible rise over the past few days after the firm won a patent dispute that could have implications for coronavirus vaccine frontrunner Moderna Inc. (NASDAQ: MRNA | MRNA Price Prediction).

An administrative court run by the U.S. Patent Trademark Office (USPTO) ultimately rejected arguments made by Moderna that an Arbutus patent should be revoked because it described obvious concepts.

The patent, known as patent ‘069, relates to lipid nanoparticle technology that allows the human body to make its own therapeutic proteins.

Here’s the kicker: lipid nanoparticle technology is critical to Moderna’s vaccine development efforts. This ruling increases pressure that Moderna would have to pay for a license to the Arbutus patent. However, at the moment, it is unclear if the vaccines, including the coronavirus vaccine, being developed by Moderna infringe on said patent.

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In terms of the court, Arbutus originally filed the patent citing that the technology is based on a “surprising discovery.” Moderna disputed the novelty of the idea and has since taken Arbutus to court on the grounds that it would have been obvious at the time of the invention.

The Patent Trial and Appeal Board, however, ruled in favor of Arbutus, citing that Moderna had failed to demonstrate the claims made that the patent “would have been anticipated or obvious.”

What normally happens in such patent disputes is that one party agrees to pay an upfront fee and ongoing, potentially time-limited royalties to secure the right to use the intellectual property.

Either way, this is a big payday for Arbutus and its investors, as the stock is up about 150% from the beginning of the week. Shares have posted gains as high as 276%.

Arbutus Biopharma stock traded up just over 1% to $6.27 on Friday, in a 52-week range of $0.82 to $9.02. The consensus price target is $5.00.

Moderna stock was down 5%, at $71.29 in a 52-week range of $11.54 to $95.21. The consensus analyst target is $96.58.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.