Analysis

Moderna, Pfizer Playing The Long Game With Novel Vaccine IP

By Dani Kass
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Law360 (December 1, 2020, 4:43 PM EST) -- Moderna Inc. and Pfizer Inc. may have changed the game on vaccines. It's not just that they developed seemingly successful COVID-19 vaccines at record-breaking speed, but they did so through a brand new type of vaccine, called mRNA, for which they'll likely win broad patent protection.

While the pandemic persists, the companies are unlikely to aggressively enforce any mRNA patents they secure. However, experts say these patents will give the companies huge leverage as competitors eye mRNA vaccines to target other conditions.

"Prior to the development of their vaccines, [mRNA] was a completely untested, unchartered mechanism of action for a vaccine, so it seems like Moderna and Pfizer are on track to get a bunch of pretty broad patents covering mRNA vaccines generally," said University of Illinois College of Law professor Jacob S. Sherkow. "Some of the intellectual property foundations that are being laid now are going to play an increasingly important role with respect to the development of vaccines in the future."

mRNA: Past, Present and Future

These vaccines use a synthetic version of messenger RNA, which is the genetic material cells read to build proteins. That genetic material is programmed to create proteins that mimic SARS-CoV-2, the virus that causes COVID-19. The body responds to those proteins by creating antibodies, which can then fight off SARS-CoV-2 if the vaccinated individual is exposed.

If mRNA vaccines work, theoretically scientists would be able to program them to make any protein and unlock the answer to a plethora of medical conditions. This method was so incredible that some had originally dismissed the idea of these vaccines as science fiction, although acceptance has been on the rise, Sherkow said.

For years, researchers have struggled with how to ensure people's immune systems don't attack the synthetic mRNA, but now Moderna and Pfizer each say they've made that breakthrough.

Pfizer and its German partner BioNTech on Nov. 20 filed a request for emergency approval at the U.S. Food and Drug Administration, claiming a 95% effective rate. However, Pfizer's vaccine has to be kept at such a low temperature that it has raised concerns it will be hard to effectively distribute.

Ten days later, Moderna filed its emergency approval request. The company said its vaccine, which can be stored in a normal freezer, is 100% effective at preventing severe cases and 94% effective at preventing infection.

AstraZeneca and the University of Oxford are also a front-runner in the COVID-19 vaccine race, with a non-mRNA candidate, which they've said has shown to be 70% effective. There are several other candidates in late-stage testing.

As the pandemic comes under control and more research returns to searching for vaccines for conditions other than COVID-19, mRNA is going to be an extremely attractive choice, experts say.

That's because once researchers have the genome sequence they need, a vaccine could be ready to test in hours or days, rather than months, Sherkow said. For context, Chinese scientists published the genetic sequence for SARS-CoV-2 on Jan. 10, just a few weeks after the virus raised alarms in Wuhan. Moderna had its vaccine ready for testing within days.

"To a certain extent, the promise to these mRNA vaccine technologies is that they're modular," Sherkow said, comparing it to the gene-editing technology CRISPR. "You want to create a new mRNA vaccine, you print out a new mRNA. It may or may not work, and you need to do validation testing to see if it works, but at least you can build a model cheaply, easily and quickly. Now that we have this proof of principle that mRNA vaccines work, I suspect there's going to be a lot of interest in doing this for a bunch of other illnesses in the future."

Alston & Bird LLP partner Matthew W. Howell said the genetic code in the mRNA vaccine likely won't be patent eligible under Section 101 of the Patent Act, but the delivery systems the companies are using should be. The latter is where the companies are likely to cash out in the long run, as any company hoping to use mRNA technology will probably need licenses from Moderna and Pfizer.

In the short term, there is some uncertainty surrounding Moderna's patents. Two federal agencies are investigating whether its patents featured proper funding disclosures. Moderna also recently lost a bid to invalidate an Arbutus Biopharma Corp. patent covering technology allegedly used in its vaccine, although it had won two other patent challenges against Arbutus.

Additionally, Moderna has said it won't enforce its patents during the pandemic. Just how benevolent of a promise that is will depend on the terms of any licensing agreements Moderna may offer, Howell said.

Either way, experts seem to agree the endgame is to profit elsewhere.

"I think that's what Moderna is really concerned about — not what's going on now, but further applications of the platform technology they've developed or co-developed," said Saint Louis University School of Law professor Ana Santos Rutschman. "It's the post-COVID landscape that we're already looking at."

Licensing During COVID-19

During the early days of the pandemic, governments and companies received an array of pressure not to let intellectual property get in the way of accessing treatments and vaccines for COVID-19. The push wasn't entirely in vain.

In Israel, the government reportedly allowed generic versions of AbbVie Inc.'s HIV drug Kaletra to be imported to treat coronavirus patients, even though the drug is still patent protected in the country.

Countries including Ecuador, Chile, Germany, Canada and France all have compulsory licensing on the table. In those situations, the government would allow a company to make the vaccine, without the patent owner's consent, and then set the rate the patent owner would be paid.

"I am guessing [compulsory licensing abroad] is going to happen, because no single company is going to be able to meet global demand for these vaccines, even three companies won't be able to, and we don't know which of these vaccines is going to end up being the preferred choice," said University of Utah's S.J. Quinney College of Law professor Jorge Contreras. "You need rights from the IP holders to produce, and countries are perfectly capable of and prepared to step in to make that happen."

But in the U.S., it's unlikely compulsory licensing would come into play, according to Rutschman. The Bayh-Dole Act has march-in rights, which allow for compulsory licensing when "action is necessary to alleviate health or safety needs" that the patent owner can't meet, but it's not something the government has historically invoked. 

"If [the Biden administration] were to do something fundamentally different from what previous administrations have done, I would be surprised," said Rutschman, who had advised the campaign.

March-in rights are often discussed when drugs developed in part with government funds are priced at unaffordable rates. The fact that there's three potential vaccines — presuming none of the many others in development catch up — creates a certain level of competition-induced price control, which would override the need for forced licensing, Howell said.

Experts also say it's unlikely companies are going to block others from the market, for now.

"Not only would it be a public relations nightmare, it would be political suicide," Sherkow said.

The government has deals worth more than $1.5 billion each with Pfizer and Moderna to manufacture and supply 100 million doses of their respective vaccines.

"If the federal government doesn't like what you do, you're going to have a lot of difficulty distributing your vaccine on the scale that you want to," Sherkow added. "Being sensitive to political realities is important in this context to getting paid. I can't imagine any big company would [aggressively enforce their mRNA patents right now]."

Instead, what society is going to need to decide is whether it'll be OK with the companies profiting off the vaccines, and if so, how much and on whose dime, Howell said. But questions over profit don't necessarily indicate the patent system is failing, he added.

"The system we have set up is really designed to encourage innovation," he said. "That part of it's working, whether it's money or humanitarianism that's driving the companies to make all of these wonderful vaccines, who knows? But whatever it is, we are getting tons and tons of scientific research into helping a real problem."

--Editing by Orlando Lorenzo.

For a reprint of this article, please contact reprints@law360.com.

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