Skip to main content

Business and Markets

Formulating RNA – And Owning It

Headlines appeared last night about Moderna losing a patent case that affects its coronavirus vaccine work. I know from long experience on this blog that any discussion of patent and IP issues has an effect on my readership traffic numbers that looks like I’m paying folks not to click on my links that day, but I’m going to brave this one. What’s going on?

For starters, it’s worth realizing that this dispute has been going on for quite a while. To an excellent approximation, all patent disputes have been going on for quite a while. The smattering of new ones are more than averaged out by the ones that have been Jarndycing their way through hearing after hearing. Here’s an article from 2016 and a followup in 2017 that go into some of the details in Moderna’s case. The issue is not about their coronavirus vaccine per se, nor is it quite about their own mRNA technology. It’s about what one has to do to get things like mRNA constructs to survive in the bloodstream so they can even be contemplated as drugs in the first place.

That takes you into modified RNA bases (for one thing) and very much into formulations, for another. Formulation science is one of those things that people outside drug development tend to not think much about (if they even know that it exists), but it’s really important. Getting an orally dosed drug out of the gut (or even just past the stomach) and into the bloodstream, and getting an injected one to circulate around in said bloodstream instead of being destroyed on contact – those can be big deals. It’s definitely a big deal for something like a small bundle of RNA.

Oral delivery is right out for those things – I don’t know what kind of wizardry you’d need to give someone an “mRNA pill” and have it be usefully absorbed into the circulation, but we sure don’t have anything like it yet. Nope, this is an injection from the very start, and even there you have serious problems. Here’s a paper that notes that if you add plain RNA to plasma samples, none of it is intact enough to be amplified after a wait of fifteen seconds. There are “cell-free” RNA species floating around in the blood, but your mRNA therapy is unlikely to share their characteristics, because there are a lot of different forms of RNA. Even those degrade easily enough.

And once into the bloodstream, whatever oligonucleotide species you’ve injected (be they mRNA, antisense DNA oligos, RNA interference species, etc.) that survive are highly likely to end up in the liver anyway, so you’d better be OK with that. Wherever they go, they are probably going to have to be taken up into cells and find their way to the right compartments once inside, and those can be rather high hurdles as well. It’s no accident that all of the neat ideas for dosing RNA and DNA-based therapeutics have taken so many years (and so many dollars) to be realized in practice – a huge amount of thought and experimentation has gone into getting us this far, and we’re still finding out new things.

Moderna, for its part, decided years ago that lipid nanoparticles (LNPs) looked like the way to go. This technique places the RNA constructs inside small lipid bubbles of lipid to protect them, and there’s an ever-growing list of variations on the idea and how to realize such species in practice. Moderna did a deal with a small company called Acuitas for access to this sort of thing, but Acuitas in turn had licensed it from another company, Arbutus. Whereupon Arbutus terminated their agreement with Acuitas, saying that they had no legal right to sublicense the technology to Moderna. They sued Acuitas in Canada in 2016, and ended up with a settlement in 2018 that allowed the Acuitas/Moderna sublicenses to stand (but no others). But. . .at just around the same time, Moderna launched an offensive at the USPTO to try to invalidate two Arbutus patents entirely. Earlier this year they asked for another review on a third Arbutus patent.

Moderna had been spending a lot of time talking about how well, you know, that Arbutus stuff was just OK, not really all that good, and how they’s moved so far past it that it really wasn’t a concern any more, etc. But the move to asking for inter partes review at the PTO is an example of what we call revealed preference, rather than stated preference. A general rule: always watch what people and companies actually do, rather than paying so much attention to what they say they’re doingSpeculation is that the 2018 settlement would have only covered uses in Canada, and that the far-more-lucrative US situation was therefore unresolved, so Moderna opened fire.

Inter partes review has been around since 2012, and it’s fair to say that overall it’s not a popular provision of US intellectual property law if you ask biopharma companies. Many of them consider the process as leaving too low a bar to initiate patent validity challenges – or at least they consider it so until it’s time for them to challenge someone else’s patent, and then it’s any weapon to hand. A big factor is that the IPR process doesn’t take place in the good ol’ Court of Appeals for the Federal Circuit, like such things used to, but rather goes before a Patent Trial and Appeal Board, the PTAB. This speeds things up and makes such challenges much less expensive, which as you’d imagine are only appealing features if you’re playing offense. Inter partes review last reared its shaggy head here during the 2017 Allergan/Mohawk fiasco – the entire purpose of that ridiculous strategy was, in fact, to make some of Allergan’s patents completely impossible to be touched by IPR at all because now (ta-daa) they were owned by a sovereign Indian tribe.

You can ask for such a review only on the patentability criteria of novelty and/or non-obviousness, sections 102 and 103, which come down in many cases to showing that some prior art exists that makes the patent under dispute either not novel or “obvious to one skilled in the art”. Relevant prior art can found in all sorts of stuff – other patents and patent applications, journal articles, public disclosures at scientific meetings, and so on. Moderna actually won their first patent challenge before the PTAB, getting all the Arbutus claims in it invalidated via such arguments. They had a partial win on the next one – some claims were tossed, but some stood. But yesterday they completely whiffed on their third challenge: all 22 claims in that Arbutus patent were upheld.

So what does this tell us? It seems clear that Moderna was worried about Arbutus waiting until such time as the coronavirus mRNA vaccine looked ready to take off, and then getting hit with a filing for infringement. The IPR challenges were an attempt at pre-empting that – can’t claim infringement of invalid claims, can you now? The situation now is unclear. I don’t know which of the upheld claims is the biggest threat to Moderna, and it would take me about a month of study to even have an informed opinion. Patent litigation is excruciating stuff. Neither do I know how much money Arbutus would come after them for, but clearly it was enough of a concern for Moderna to launch their own first strike (remember, Arbutus has never taken Modern to court directly at all).

This latest decision is expected by many to be appealed. That would take it to the Court of Appeals for the Federal Circuit, and that’s a much lengthier process. Moderna certainly seems to have standing for such an appeal (as that link will show, that issue has been the subject of much combat in the last few years), but the question is whether they want to do that now or wait until Arbutus comes after them.Or do they want to approach Arbutus directly and see if they can come to an agreement, rather than continuing to tango in the current fashion? Rather highly-paid lawyers are no doubt considering these questions right now.

You’d have to pay me an awful lot to to work it out, I can tell you right now. What seems certain is that Moderna will be pushing ahead with their vaccine, and that this issue will be hanging over them while they do. I don’t see this slowing down the vaccine development itself, since none of the lawyers are working in the labs. But it is a distraction for the higher-ups and perhaps a weight on the company’s stock price. But hey, Moderna’s executives seem to have unloaded plenty of their positions already, right?

26 comments on “Formulating RNA – And Owning It”

  1. DTI says:

    I 100% appreciate your occasional deep dives into the weeds of patent and IP law (and even copyright law regarding journal articles!) since it’s got rather a lot to do with the price of pharmaceutical tea.

    More to the point, it indirectly and directly affects avenues for drug development. Which for us non-chemists is rather the point.

    Thanks again!

    1. Anonymous says:

      Rather important for us chemists, too.

  2. Dr. Seymour Tushi says:

    The amount of time I’ve now spent imagining a Moderna lawyer walking into the court and yelling “These RNA patent claims are baseless!” while winking and looking around for a reaction tells me all I need to know about my inability to succeed in corporate law.

    1. Orange says:

      Not much reaction will happen when you try to dissolve RNA patents without base.

    2. Churlish says:

      Dr Tushi, your comment cracked me up so much. I guess I’m also not suitable for a life of corporate law….

  3. Pterin says:

    Lil typo here: “You’d have to pay me an awful to to work it out, I can tell you right now. “

  4. confused says:

    Off topic – but has there been any news on monoclonal antibodies recently? It seems like much more is being said about vaccine development…

    1. Barry says:

      As far as I know, monoclonal efforts have all been gamma globulins. What we’d need for an infection on the surfaces of the respiratory tract would be an alpha globulin. I haven’t heard that anyone has done that yet, but I’d be excited to see it.

      1. David E. Young, MD says:

        Intravenous IgA, when given before, tends to always cause infusion reactions…. severe ones at that. People who have selective IgA deficiency can get IVIG and tolerate it but if you give pure IgA intravenously to replenish their IgA levels, they cannot tolerate it. Not at all.

        So, I am not sure that it is possible to make an IgA antibody against Covid and give it intravenously. I suspect that everyone will react badly to it.

        1. Barry says:

          The most recent I’ve seen (2012) seems to leave this unresolved
          “The role of anti-IgA antibodies in causing anaphylaxis in IgA-deficient patients receiving gamma globulin therapy is still controversial.”

          But maybe a clearer understanding has emerged since then?

        2. Riah says:

          Intravenous immunoglobulin was successful in this study but I am not sure what type of immunoglobbulin they used:

          Thanks Derek, I have been wondering how they get the RNA into cells without it degrading. Is there any more info on what the lipid nanoparticls are made of exactly? And are other RNA vaccines using different formulations or the same? ie. are they equally effective at getting the payload inside cells?

      2. Marko says:

        It seems like the Vaxart oral vaccine would be the one to watch for IgA stimulation , but I don’t think their trials are very far along. I’ve been watching for news on it but it’s very thin , aside from the stock-jockey banter.

  5. Eli Barnett says:

    Very helpful coverage here, Derek. Exactly the kind of content that keeps me coming back to this blog. Patent law is an absolute mess, for sure, but it’s crucial that we understand at least the outline of how it functions in situations such as these.

  6. Marko says:

    “…I know from long experience on this blog that any discussion of patent and IP issues has an effect on my readership traffic numbers that looks like I’m paying folks not to click on my links that day….”

    Derek , if you want to draw more clicks for this article , I suggest changing the title to ” Person Woman Man Camera TV “. It would make no sense , I know , but it would capture audience :

  7. loupgarous says:

    Thanks for the coverage of a very complex story, Derek. It’s good to have understandable explanations of what’s going on.

    I wonder, if Arbutus sets the price so high for their piece of the IP in the Moderna vaccine that a good, working vaccine costs more than the Federal government is willing to pay, if compulsory licensing might come into play.

      1. drsnowboard says:

        Probably best to prove it works before the compulsory licensing gets invoked. After all, if it’s not a product / therapy, there is no point – as far as I can see there is no compulsion to finance development and what state wants to finance drug development?
        In my limited experience, sleeping royalty sharks wait until the costs have been borne by the developer, then throw their hat into ring for a royalty. It’s not usually in absolutes, usually a percentage royalty. 20% of something for no ‘effort’ is better than 100% of a discarded approach.

        1. loupgarous says:

          Moderna’s CEO and Chief Medical Officer cashing out to the tune of USD 21-35 million (according to this CNBC report) might make future investors wary (of, well, we won’t call it a “pump-and-dump” move, in which monies notionally raised for an Arbutus buyout might not make it that far). Just how well-capitalized IS Moderna? Enough for a stock deal with Arbutus?

  8. former_student says:

    I appreciate the coverage as well! As useful as constant COVID coverage is in a general sense, topics like this are much more professionally relevant (for me at least).

  9. Chris h says:

    Great content. Minor nit, the lower cost of patent reviews/ligitation is in general a good thing for parties more likely to win and parties with smaller pockets. Not only appealing if “you’re playing offense”.

    Terrifying defenders into submission due to the expensiveness of the process has long been a tactic of people on “patent offense”.

    1. Some idiot says:

      True, but it also makes the business case a lot better for those few of the generic producers who are very parasitic, and who’s business case runs along the lines of for every 10 patents they challenge, they get lucky with one. Makes rolling the dice a lot cheaper, and therefore more expensive for true originators.
      Note that I am _not_ having a go at the majority of the decent generics. I have a lot of respect for vary many of them, with very good process chemists. I have just seen enough of the other variety to last me a lifetime…

      1. Med(iocre) Chemist says:

        I know practically nothing about patent law, but it seems to me that some kind of punitive measure for frivolous patent challenges (similar to anti-SLAPP laws) would balance out the system. Does that exist or are there reasons it doesn’t?

        1. Doug says:

          No, it doesn’t exist. Why not? In part because patents, while snazzy and valuable, are not things of core value to democracy, like, say, free speech is. Patent-holders are typically sophisticated commercial actors. They don’t need the solicitude of state and local governments to help them uphold their commercial rights.

  10. Colby says:

    Would it not be in the best interest of Moderna to simply buyout Arbutus at this point? If Moderna is truly confident in their ability to deliver a vaccine by EOY 2020 – the royalties to Arbutus some say could be close to 2% of projected annual revenue in the $10B – $20B range. Not to mention a means to end all the bad PR and stock sell-offs…

  11. Topscientistantitrump says:

    No one has proven RNA to be important. I’d rate it as the scientific equivalent of a conspiracy theory. Sells sequencers for illumina and virologists, but I dont think it’s any different than dna with a water molecule bound to it.

  12. bill s says:

    Ive followed Arbutus since the were Tekmira and their patent litigation against Alynylam who in a partnership tried to run around Tekmira and patent behind their back but Tekmira had already filed. I know i went and read the patents and realized Alynylam was screwed. The problem is like the Chief medical officer these companies take the money and run. Arbutus also moved the LNP mRNA into a new company with Roivant called Genevant which ultimately will be on the receiving end of the royalties and or damages. Most Tekmira deals from what i can see only have single digit royalties with tiers being put in place depending. Because of the value of these vaccines and wealth generated they should seek higher in my opinion. Even Pfizer Biontech from what i can see doesnt have a deal.. Biontech had a deal with Arbutus for up to 5 things they were working on..but this came after. Letting the vacciens roll out is the right thing to do..but shady business practices shouldnt be condoned and this shouldnt tie up courts for years..but they will because they have billions and thats what they do. The system is corrupt through and through.. someone I know was suing tech cos.. turns out the head of the Patent agency still held shares in one they had worked for.. this is the kind of garbage you deal with. One person mentioned 2% royalties but you can google and see royalties start at 5% typically and rise an 8-14% wouldnt be unrealistic. considering the value generated this year i think Arbutus should seek higher royalties. But Im just going to say..its probably a management issue…
    I have more info..i did deep dive

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.

This site uses Akismet to reduce spam. Learn how your comment data is processed.