Since 2016, Moderna Inc. (NASDAQ:MRNA) has been struggling with the invalidation of a U.S. patent owned by Arbutus Biopharma. The company moved to court, but that has not made things any better. It has lost bid even after arguing that Arbutus was different and overlapping patents to extend its patent protection. According to a U.S. Patent and Trademark Office administrative court, Moderna failed to justify its arguments. Hence ‘069 patent will not be annulled.
The ‘069 patent is related to lipid nanoparticle (LNP) technology, which plays a crucial role in Moderna’s vaccine development efforts. The company has been pursuing the cancellation of the patent since 2016.
The Lost Bid Could Be a Hindrance to Moderna’s Development Efforts
LNP technology is crucial to Moderna’s vaccine development efforts. According to a New York patent attorney, Zachary Silbersher, who is not in any way involved in the matter. Hence the ruling was a “disappointing turn” and has continued to raise so many questions across many quarters.
According to the analyst at SVB Leerink, Mani Foroohar, the ruling is likely to bring controversy among investors as they question the potential infringement of Arbutus’ claims. At the same time, it may expose Moderna to debate around its entire pipeline. This includes the COVID-19 vaccine, whose Phase III clinical trials are expected to begin soon.
Nonetheless, Silbersher says that he does not understand how the patent is an obstacle to Modern and why it should be invalidated.
What Next For Moderna after the Ruling?
The company is yet to comment on the issue. However, despite the court’s decision, the Cambridge, Massachusetts-based firm can still appeal the ruling to the U.S. Court of Appeals for the Federal Circuit. The only setback with appealing is that the Appeals court is known to sustain the patent office’s decisions often.
Meanwhile, its shares fell 10%, and the ruling is likely to affect the coronavirus vaccine’s revenue concentration. If Arbutus puts up a claim of royalty in the vaccine, Modern will have to bear the burden of altering its pricing flexibility and margin profile against other players.