Moderna jumps after settling Covid vaccine patent dispute

Moderna is up 4.8% at 5 a.m. ET in premarket trading after the pharma giant said on Tuesday that it had reached a deal to resolve a patent dispute related to the technology behind its key Covid vaccine models.

Moderna will pay $950 million up front and a further $1.3 billion down the line, depending on the result of a separate appeal, to Arbutus Biopharma and Genevant Sciences to resolve all related disputes across its Spikevax^® and mRESVIA^® models. The settlement comes with no further royalties, which the company said in a press release would provide “certainty going forward for Moderna’s full infectious disease portfolio.” That said, if Moderna’s appeal, based on its government contractor immunity defense limits, ultimately prevails, the two biotech companies will refund the payment in full, including interest.

The $950 million charge is expected to be recorded in Q1 2026, per the company’s press release, leading Moderna to adjust its cash and cash equivalents expectations in the current calendar year to fall between $4.5 billion and $5 billion. Still, as analysts at William Blair observed late Tuesday, the total settlement amount is “better than feared” — a take investors seem to be getting onboard with.

Noting that Moderna is driving toward its goal to break even in 2028, CEO Stéphane Bancel commented, “Resolving this legacy matter from our pandemic response removes uncertainty and allows us to turn our full focus to Moderna’s exciting near-term future.”