COVID-19 vaccine manufacturer Moderna faces a significant patent infringement lawsuit in the United States over the lipid nanoparticle (LNP) technology that protects the mRNA in its vaccine. Genevant Sciences, a joint venture between Arbutus Biopharma and Roivant Sciences, claims Moderna is infringing technology from six US patents and is seeking royalties for the use of its patented formulations.
The lawsuit will not affect the sale or manufacture of Moderna's COVID-19 vaccine, but the financial implications could be substantial given the vaccine's commercial success. With Moderna's projected 2021 vaccine sales reaching $18 billion, even a small percentage royalty could result in significant payments.
Patent Dispute Background
The current legal battle has roots predating the COVID-19 pandemic. Since 2018, Moderna had been attempting to invalidate several of Arbutus' key LNP patents through legal challenges. While the company succeeded in fully invalidating one patent, a second was partially upheld, and a third was upheld in full. In December 2021, a federal court rejected Moderna's appeals against the latter two decisions, clearing the path for the current infringement case.
The dispute also involves a complex licensing history. In 2013, Arbutus had licensed some of its LNP technology to Canadian company Acuitas Therapeutics, which later sublicensed those rights to Moderna. However, this sublicensing arrangement was contested in Canadian court and settled in February 2018, ending Acuitas' rights to use or license the technology. According to Arbutus, Acuitas' licenses only covered four specific viral targets, not including coronaviruses.
Critical Technology for mRNA Delivery
Lipid nanoparticles represent a crucial component in making mRNA-based medicines viable. As Peter Lutwyche, Genevant's chief executive, explained during a February 28 conference call with industry analysts, "Historically though, these medicines have been challenging to develop." The fundamental challenge lies in the nature of nucleic acids themselves - they are hydrophilic molecules that do not readily cross cells' lipid membranes and are easily degraded in the body.
"The need for a delivery technology capable of delivering RNA cargo intact to its intended target has been one of the most significant challenges in the development of these medicines," Lutwyche noted. The solution came through precise formulations of lipid nanoparticles that can protect and deliver the therapeutic payload.
Patent Infringement Claims
Genevant alleges that Moderna infringed its patented recipe consisting of four specific lipid types: cationic lipids, phospholipids, cholesterol, and polyethylene glycol (PEG)-conjugated lipids. The company claims that during Moderna's phase I trial of its COVID-19 vaccine, the company used a lipid combination that overlapped with those covered by Genevant's patents.
The technology in question has broader applications beyond COVID-19 vaccines. Arbutus, headquartered in Vancouver, Canada, is developing LNP technology to deliver RNA interference therapies for hepatitis B. The technology is already being used commercially in Alnylam Pharmaceuticals' Onpattro (patisiran), which was the first approved therapy to rely on small interfering RNA and treats patients with hereditary transthyretin amyloidosis - a rare, progressive, often fatal disease.
Industry Partnerships and Market Impact
Genevant has established multiple partnership agreements for its LNP technologies, including collaborations with Takeda for liver disease medicines, BioNTech for cancer targets and rare diseases, and Gritstone for a self-amplifying RNA COVID-19 vaccine program. These partnerships demonstrate the broad applicability and commercial value of the disputed technology.
Legal and Financial Implications
According to US patent law, the penalty for patent infringement is "a reasonable royalty." Jacob Sherkow, a biotech intellectual property expert at the University of Illinois at Urbana-Champaign, notes that "a royalty, outside litigation, in the biotech space for a typical license looks something like a single digit percent on net sales."
Even a small percentage of Moderna's substantial vaccine revenues would represent significant financial exposure. Sherkow observes, "If I was Arbutus, I would be asking for the moon. And if you're Moderna, you don't want to give that up. We're going to need a bunch of interim decisions from the court before the parties can get closer."
The litigation timeline is expected to be lengthy. Sherkow predicts the case will take at least three years, noting "It can't get much faster, but boy can it get slower." Despite the prospect of tens of millions of dollars in legal fees, he expects both sides to pursue the case through court rather than settling, stating "To be honest, for both sides it'll be worth it. That's just the economics of patent litigation."
Company Responses
Moderna has denied the allegations and stated it will "vigorously defend itself against Genevant's claims in Court." The company emphasized that "Our Covid-19 vaccine is a product of Moderna's many years of pioneering mRNA platform research and development, including creation of our own proprietary lipid nanoparticle delivery technology."
Sherkow notes that the large financial success of Moderna's vaccine makes patent litigation more attractive, explaining "When you have a big biotech product like this, there's almost always going to be some patent disputes surrounding it." For Genevant, beyond the financial considerations, there is also "the scientific kudos in claiming a contribution to Moderna's highly successful Covid-19 vaccine."
