What happened

Shares of Arbutus Biopharma (NASDAQ:ABUS) rocketed higher on Wednesday morning in response to a court ruling in its favor. The stock was up 70.2% at 11:41 a.m. on Wednesday.

So what 

Moderna's (NASDAQ:MRNA) attempt to avoid paying royalties on the lipid nanoparticle (LNP) technology that its COVID vaccine relies upon took another turn for the worse. A court of appeals decision filed today affirms the U.S. Patent and Trademark Office's previous decision not to invalidate Arbutus Biopharma's patents covering LNPs.

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LNPs are the tiny fat bubbles that encase RNA-based vaccines and therapies, allowing them to travel through the bloodstream to their destination. Licensing the technology has long been part of Arbutus Biopharma's business plan. The company currently receives royalties from Alnylam (NASDAQ:ALNY) on sales of Onpattro at a rate of up to 2.33% of global net sales.

Now what

Moderna's claim that Arbutus Biopharma's LNP technology was too obvious to be patentable is a hard line to swallow. Years ago, Moderna thought Arbutus' LNP technology was important enough to license it for a handful of vaccine targets, none of which were COVID-19.

Figuring out exactly how much revenue Arbutus can expect from Moderna is going to be tricky. In 2018, Arbutus spun out its LNP technology into a separate company it still owns 16% of, called Genevant.

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