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Moderna: Stock of the Week

Why “the software of life” is worth suing for.

Andrew Willis 2 September, 2022 | 4:38AM
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Andrew Willis: A recent lawsuit filed by Moderna (MRNA) against Pfizer (PFE) and BioNTech (BNTX) over patents related to mRNA technology used to develop the COVID-19 vaccine may seem a bit late as the pandemic appears to settle… or perhaps we have yet to see the full potential of what the company calls “the software of life”.

The ability to deliver instructions to a patient’s own body isn’t just useful for vaccines to prevent diseases. It can also be used to combat existing diseases like cancer by triggering an immune reaction. mRNA can also be used in protein replacement therapy which can treat a variety of illnesses.

Just as the opportunities are strong, so is the intellectual property at Moderna, says sector strategist Karen Andersen. ‘Multi-layered’ protection at the firm extends through at least 2033 for patents already issued and beyond 2041 for patents pending. So why didn’t this lawsuit come up earlier if protection already existed?

In a press release related to the lawsuit, Moderna said that around October 2020, the company says it decided to hold off on enforcing patents while the pandemic continued at peak levels. The company now seeks compensation, which could be useful to fund new large scale-manufacturing facilities and help position the firm to accelerate timelines for new drugs. In fairness, we do note that Moderna did just get a cash infusion from the sales of COVID-19 vaccines last year…and the recent order for 12 million doses for Canada should help.

We also note that the mRNA vaccine patent space is highly fragmented with many other firms, large and small with patents in the field. Meanwhile, Moderna’s experience in artificial intelligence and digital technologies could still allow it to produce the best mRNA sequences in the sector.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BioNTech SE ADR130.30 USD2.08Rating
Moderna Inc122.23 USD2.12Rating
Pfizer Inc44.09 USD0.59Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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