Biontech pays CUREVAC, GSK $740 million, plus royalties to resolve mRNA patent disputes
When Biontech agreed to acquire rival Messenger RNA Company Curevac in a $1.25 billion stock deal earlier this summer, some financial analysts said the acquisition constituted an outside solution to patent litigation between the two companies. As the acquisition is getting closer to completion, Biontech and Curevac have officially resolved the patent issue, a deal that brought the company's respective partners Pfizer and GSK.
Over the past two years, Curevac has accused Biontech and Pfizer vaccines of infringement of Covid-19’s Curevac patents based on its more than two decades of MRNA research. Under the terms of the settlement announced Friday, Curevac will grant Biontech and Pfizer a non-exclusive license to manufacture and sell mRNA-based Covid-19, as well as flu products for the U.S. market. When Biontech's acquisition of Curevac is closed, the license will be expanded to a global license.
In addition to the license, Biontech will pay GSK $370 million, and a 1% royalty on U.S. sales from January 1, 2025. GSK said the payments were due to the company's existing agreement with Curevac. GSK will receive a $320 million upfront settlement in cash. The rest will be paid as $50 million from GSK to Curevac, which Curevac said is part of the product under the 2024 license agreement, monetized product royalties. The deal gives GlaxoSmithKline Global the right to attribute candidates to avian influenza vaccines. GSK also received all rights to the seasonal flu vaccine and the Covid-19-19 vaccine.
After Biontech's acquisition of Curevac is closed, Biontech will pay an additional $130 million to GSK and pay a 1% royalty on 1% sales. These royalties also have a start date of January 1, 2025. Biontech said Pfizer has agreed to repay half of the royalties paid to GSK for $80 million to sell mRNA-based Covid-19 products.
Biontech and Curevac are all German-based companies that started their cancer mRNA research. The 19009 pandemic both shifted their focus to the novel coronavirus vaccine. Their fates differ from there. Although Biontech and partner Pfizer continued to develop the first successful authorization and then approved an MRNA Covid-19 vaccine called Comirnaty, Curevac's efforts in clinical testing were insufficient. With Comirnaty’s revenue, Biontech continues to build a diverse pipeline, including an extensive cancer research and development alliance with Bristol Myers Squibb, which unveiled in June.
Meanwhile, Curevac has no partner, no partner, and has a smaller and advanced pipeline of cancer roots compared to Biontech. Even so, CUREVAC has worked longer in mRNA research than its German counterparts, with its 2022 lawsuit claiming Comirnaty violated several critical Curevac mRNA patents. Although Curevac said it does not want to stop producing and distributing Biontech and Pfizer vaccines, its lawsuit seeks “reasonable compensation.”
The acquisition agreement announced in June comes after a major European court ruling upholding the validity of two Curevac patents. Analysts at Leerink Partners noted that Biontech is at risk of paying about $32 billion in backtrack royalties for Comirnaty Sales. The settlement saves Biontech from most of its financial burden. Both parties also filed paperwork, rejecting the patent infringement case in the Virginia federal court. The settlement frees all claims of Biontech and Pfizer, who violated Curevac's works with GSK. After the acquisition is over, this version will be applicable worldwide.
Biontech said the settlement does not constitute an admission of the allegation that is explicitly denied, in connection with any allegations filed by Curevac or GSK. However, GSK said the settlement did not affect its enforcement of patents against Pfizer and Biontech in the United States and Europe.
“GlaxoSmithKline will continue to litigate Biontech and Pfizer to infringe GSK's patents,” the pharmaceutical giant said in another announcement.
The acquisition agreement requires shareholders to take at least 80% of CUREVAC shares to bid for their shares. Biontech said in June that 36.7% of shareholders representing Curevac stocks agreed to bid for the shares and vote for the agreement. The settlement moves the transaction to the required number of shares. GSK said it has signed a customary tender and support agreement, according to MRNA Company's annual report, which has tendered about 16.6 million shares of Curevac stock in its upcoming offer, which accounts for about 7.4% of the outstanding shares, according to MRNA Company's annual report. The acquisition is expected to end by the end of this year.
Photos: Artist, Getty Images
