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March 4 (Reuters) – Moderna shares rose 10% on Wednesday after the company settled a long-running legal battle over the \u200ctechnology that made its COVID-19 vaccine possible, removing an overhang and \u200callowing it to focus on its pipeline.<\/p>\n
Analysts noted the settlement, which involves paying up to $2.25 billion \u200bto a Roivant Sciences’ Genevant subsidiary, and Arbutus Biopharma, would shift investor focus back to Moderna’s cancer vaccines that are under development. This resolves all U.S. and international legal actions accusing Moderna of unauthorized use of lipid nanoparticle (LNP) technology owned \u200cby Genevant and Arbutus in \u2060its COVID vaccine.<\/p>\n
“The company (now) has certainty it is well funded through multiple late-stage oncology readouts expected in 2026 that represent \u2060new long-term growth drivers,” said William Blair analyst Myles Minter.<\/p>\n
Moderna will pay $950 million upfront in July 2026, with an additional $1.3 billion contingent on the outcome of \u200ba separate \u200blegal appeal, while not owing royalties for \u200bthe technology in its future \u200cvaccines, which is seen as a significant win for the company.<\/p>\n
The payments are not as substantial as Wall Street had feared to be more than $3 billion, said Citi analyst Geoffrey Meacham.<\/p>\n
Bernstein analyst Courtney Breen said, however, if the payment does become necessary, it could reduce the company’s cash reserves to as \u200clow as $3.2 billion by 2026. Moderna expects \u200bits reserves to be between $4.5 billion to $5 billion \u200bthis year.<\/p>\n
Breen added this “narrows the \u200btightrope” for the company, as timing and scale of its \u200clawsuit against Pfizer and BioNTech for \u200binfringing patents related \u200bto mRNA technology is unknown, and its management has been known to be too optimistic in the past.<\/p>\n
In 2022, Moderna sued Pfizer and BioNTech \u200bfor infringing patents related \u200cto mRNA technology. BioNTech countersued Moderna in February, arguing Moderna’s next-generation \u200bCOVID-19 shot, MNEXSPIKE, infringes one of its patents.<\/p>\n
(Reporting by Puyaan Singh \u200bin Bengaluru; Editing by Vijay Kishore)<\/p>\n<\/p><\/div>\n