Moderna (NASDAQ:MRNA) has agreed to pay US$950 million to resolve a long-running patent dispute tied to the technology used in its COVID-19 vaccine.
The pharmaceuticals giant announced it has reached a global settlement with Arbutus Biopharma (NASDAQ:ABUS) and Genevant Sciences GmbH over claims that Moderna’s vaccines infringed patents related to lipid nanoparticle (LNP) delivery technology.
The tiny fat-based particles are used to transport mRNA vaccines into human cells.
Under the agreement, Moderna will make a lump-sum payment of US$950 million in the third quarter of 2026 and will not owe royalties on existing or future vaccines. The settlement resolves all litigation worldwide involving the companies.
The case had centered on allegations that Moderna used LNP technology owned by Arbutus and Genevant in its COVID-19 shot without authorization.
Moderna CEO Stéphane Bancel said the settlement clears the path for the company to focus on its pipeline.
“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,” Bancel said in a company statement.
Moderna also said it will continue pursuing an appeal related to its claim of government-contractor immunity under US law, which could further limit its liability.
If the Federal Circuit Court ultimately rules against the company on that issue, Moderna could be required to make an additional payment of up to US$1.3 billion within 90 days of the decision. The company said it has not recorded any additional charge tied to that possibility because it does not consider the loss probable.
The company expects to record a US$950 million charge in the first quarter of 2026 tied to the settlement payment.
Despite the payout, Moderna said it expects to end 2026 with between US$4.5 billion and US$5 billion in cash and cash equivalents. Including access to its credit facility, the company estimates total available liquidity of between US$5.4 billion and US$5.9 billion.
Investors responded positively to the resolution of the dispute, which analysts said removes a major uncertainty hanging over the company. Shares of Moderna rose by as much as 10 percent in premarket trading after the announcement, while Arbutus shares declined
While the agreement resolves Moderna’s dispute with Arbutus and Genevant, the company remains involved in other intellectual property litigation.
Moderna has ongoing legal claims against Pfizer (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX) related to mRNA technology used in competing COVID-19 vaccines.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.