Moderna's stock rallies as settlement of a patent dispute clears vaccine pipeline

By Claudia Assis

Resolution will provide 'certainty' for Moderna's portfolio, company says

A vial containing Moderna's COVID vaccine. A deal related to the vaccine's patents clears the way for the pharma company's vaccine pipeline.

Shares of Moderna on Wednesday surged to their highest in more than a year after the pharmaceutical company said it reached a deal to resolve a dispute related to its COVID vaccine.

Moderna (MRNA) said late Tuesday it has agreed to pay biotech companies Arbutus Biopharma (ABUS) and Genevant Sciences, which is privately held, $950 million upfront and an additional $1.3 billion if needed to end their patent dispute.

The stock rose 16% on Wednesday, ending at its highest since Oct. 11, 2024, when it closed at $58.29, and notching its largest one-day percentage increase since Jan. 13, when it rose 17%.

The pending resolution "provides certainty going forward for Moderna's full infectious-disease portfolio," the company said, including its newer COVID vaccine, its combination COVID-and-flu shot, and "its future vaccine pipeline, with no future royalties owed."

The settlement amount "was better than feared," analysts at William Blair said in a note late Tuesday. "Investors were contemplating the impact of Moderna being liable for close to $5 billion in projected liability, which would raise potential liquidity concerns if a judgment granting payment of this magnitude" was made at trial or appeal, they said.

Now that the litigation overhang has cleared, Moderna is well-funded through several trial results expected in 2026, which would represent "new long-term growth drivers for the company," the analysts said

The settlement would be the largest disclosed patent settlement paid in the pharmaceutical industry and the second-largest in any industry, Arbutus and Genevant said in a separate statement.

The two companies had sued Moderna for allegedly infringing on their patents related to the lipid nanoparticle delivery technology used in Moderna's COVID vaccine.

That technology is key to developing mRNA-based medicines and vaccines and the dispute had been an overhang for Moderna.

Under the terms of the agreement, Moderna will make the $950 million payment in a lump sum in the third quarter.

Moderna said it expects to end 2026 with $4.5 billion to $5 billion in cash and equivalents as a result of the agreement, retaining access to up to $900 million under an existing credit facility. It projected total liquidity available between $5.4 billion and $5.9 billion at the end of 2026.

"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," CEO Stéphane Bancel said in the statement.

Moderna will return to revenue growth by the end of the year, Bancel said. The company also expects the approval of the flu-plus-COVID vaccine and its standalone flu vaccines in addition to announcing "several highly anticipated" clinical-trial results in cancer and rare diseases, he said.

Moderna's stock has run up 79% over the past 12 months through Tuesday, far outstripping gains of 19% for the S&P 500 index SPX.

-Claudia Assis

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03-04-26 1717ET