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Moderna Doesn't Plan to Enforce Coronavirus Vaccine Patents During Pandemic

By Brian Orelli, PhD – Oct 8, 2020 at 7:04PM

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The biotech is in a no-win situation.

Drugmakers live and die by the exclusivity provided by patents on their medications. Generic competition or even a branded competitor can substantially cut a company's market share.

But Moderna (MRNA -1.27%) is putting society ahead of its bottom line. The biotech announced on Thursday that it won't enforce patents for its coronavirus vaccine during the COVID-19 pandemic.

The company noted: "We feel a special obligation under the current circumstances to use our resources to bring this pandemic to an end as quickly as possible. Accordingly, while the pandemic continues, Moderna will not enforce our COVID-19 related patents against those making vaccines intended to combat the pandemic."

Child holding a stuffed animal getting a shot in the arm from a doctor.

Image source: Getty Images.

Moderna has patents on its base technology, which allows for the expression of protein-based vaccines in patients' cells through the use of mRNA. The company also has patents on the delivery of mRNA-based vaccines using its lipid nanoparticles technology.

Investors shrugged off the announcement, with shares closing up 0.8% for the day. That might be because Moderna is in a no-win situation. If it did actually try to enforce patents to keep other drugmakers from launching competing vaccines, the biotech would be seen as a bully given the unprecedented need. At least by saying it won't enforce the patents, Moderna gets a public relations boost.

The company could even make a little money off the situation. Moderna said it's willing to license its intellectual property for coronavirus vaccines in the post-pandemic period. Competitors worried about a patent fight might agree to pay for a license to reduce their risk.

Brian Orelli, PhD and The Motley Fool have no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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