NIH Issues Notice of Default to BioNTech Over Alleged Royalty Payments

The National Institutes of Health (NIH) has taken legal action against BioNTech (NASDAQ: BNTX) for alleged failure to fulfill royalty payment obligations related to the sales of its Pfizer (NYSE: PFE)-partnered COVID-19 vaccine, Comirnaty. This move comes as outlined in BioNTech’s recent filing with the Securities and Exchange Commission.

According to the SEC filing, BioNTech disclosed that it has been served with a notice of default by the NIH, indicating that the biotech company has breached its license agreement with the agency. The agreement entitles NIH to receive certain royalty payments from BioNTech for revenues generated by Comirnaty since its commercialization.

In response to the notice of default, BioNTech expressed its disagreement with NIH’s position and stated its intention to vigorously defend against the allegations of breach.

“We cannot guarantee that our interpretation of these license agreements will prevail, or that we will not ultimately need to pay some or all of the royalty and other related amounts in dispute,” said the company in its report.

The development of Comirnaty, an mRNA vaccine utilizing lipid particles to deliver modified messenger RNA, involved a non-exclusive license from NIH. This license allowed BioNTech and Pfizer to utilize specific technology related to the spike protein of SARS-CoV-2 and certain mutations associated with it.

Aside from the dispute with NIH, BioNTech is embroiled in a patent conflict with Moderna concerning betacoronavirus vaccine technology. The dispute revolves around RNA polynucleotides encoding betacoronavirus antigenic peptides.

The European Patent Office ruled against Moderna in November 2023, declaring a particular claim invalid.

This episode of disagreement over COVID-19 vaccine payments isn’t isolated. In February 2024, Novavax resolved its ongoing dispute with the public-private partnership Gavi regarding the NVX-CoV2373 vaccine. To put an end to the litigation, Novavax agreed to an upfront payment of $75 million and committed to deferred payments totaling $80 million annually through 2028.

Information for this briefing was found via Biospace and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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