Arbutus Shares Are Soaring As Moderna Loses Appeal Of Board Ruling On COVID-19 Vaccine Delivery Technology Patent

Shares of small-cap biotech Arbutus Biopharma Corporation ABUS are advancing strongly on above-average volume on Wednesday.

What Happened: The Patent Trial and Appeals Board has turned down Moderna, Inc.'s MRNA appeal to invalidate two of Arbutus' patents on drug-delivery technology used in the former's COVID-19 vaccine.

"We have considered the parties' remaining arguments but we find them unpersuasive. Accordingly, we dismiss Moderna's appeal for lack of standing," the board said in a filing on Wednesday.

Moderna's vaccine uses liquid nanoparticles, which are tiny balls of fat that protect the mRNA as it travels through the body to enter specific cells.

The board's decision leaves Moderna facing the risk of an infringement lawsuit.

Related Link: Moderna Is Now More Valued Than Gilead, GlaxoSmithKline: How Long Did COVID-19 Vaccine Maker Take To Hit $100B?

Why It's Important: Moderna's fortunes are highly tied to its vaccine program. From being a clinical-stage biopharma working on mRNA technology, Moderna transitioned to a commercial-stage company following Food and Drug Administration's authorization of its COVID-19 vaccine in late December 2020.

Moderna's third-quarter results released in early November showed the company rang in revenues of $5 billion, comprised almost entirely of vaccine sales.

The company guided to fiscal year 2021 product sales of $15 billion to $18 billion.

Arbutus is "heavily favored" to win the appeals, which could lead to an infringement suit against Moderna, and the most likely outcome is some sort of agreement that would bring in royalties in the "low single digits," Bloomberg reported in October, citing Jefferies analysts.

ABUS, MRNA Price Action: At last check, Arbutus shares were jumping 44.84% to $4.64, while Moderna was sliding 7.21% to $327.03. 

Related Link: Pfizer's COVID-19 Franchise Could Push Revenue Past $100B In 2022: Analyst