Stock of the Week: Moderna

Why 'the software of life' is worth suing for

Andrew Willis 5 September, 2022 | 1:44PM
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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, 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…

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 ADR84.64 USD-1.44Rating
Moderna Inc133.40 USD-0.74Rating
Pfizer Inc27.74 USD0.00Rating

About Author

Andrew Willis  is Senior Editor for Morningstar Canada

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