Sales & Marketing

Moderna to pay $400m to US government over new COVID-19 vaccine licence

Moderna, a leader in the development of COVID-19 vaccines, announced that it has paid the National Institute of Allergy and Infectious Diseases (NIAID) $400m in a “catch-up payment”, under a new royalty-bearing licence agreement between the organisations.
The deal surrounds Moderna’s use of a molecular stabilising technique developed by NIAID and collaborators from Dartmouth and the Scripps Research Institute, which was published in a 2017 study. The mRNA-based vaccine delivers genetic code for the spike protein, which is then translated by human cells into protein. NIAID’s method made it so that, when translated, the spike protein would stay locked in a specific formation best for generating an immune response. The method was developed using a spike protein from MERS-CoV.
Moderna is paying NIAID the $400m in regards to accessing “certain patent rights concerning stabilising prefusion coronavirus spike proteins,” stated Moderna’s CFO Jamie Mock. Moderna also agreed to pay NIAID “low, singledigit royalties” on COVID-19 vaccine sales, according to Mock. NIAID has reported that it will share the payment with Dartmouth and Scripps.
Moderna posted around $36bn in COVID-19 sales across 2021 and 2022, meaning the $400m payment only represents 1% of the company’s total vaccine sales over that span. However, the company recently recorded around $2.8bn in charges related to decreased demand ‒ including a $1.3bn charge for inventory write-downs, plus $725m for contract cancellations. Moderna also paid $776m for unused manufacturing capacity and CDMO charges.
The deal with NIAID is just one of many that Moderna face. Both Pfizer and BioNTech, mRNA rivals of Moderna, have brought patent suits against it, and a separate case is being pursued by Arbutus and Roivant’s Genevant Sciences.