Moderna (MRNA) stock fell on August 26, the day the company announced that it was suing its rival Pfizer (PFE) together with its partner BioNTech (BNTX). Moderna’s move also seemed to spark a sell-off in other COVID-19 vaccine stocks, as shares of Johnson & Johnson (JNJ) and AstraZeneca (AZN) also dropped.
Massachusetts-based Moderna was among the first companies to come out with COVID-19 vaccines. The Moderna vaccine is marketed under the Spikevax brand. The company has developed a special booster vaccine targeted at the Omicron virus variant.
Moderna Sues Pfizer in Patent Dispute
Moderna has decided to sue Pfizer and BioNTech for allegedly infringing its patents. Pfizer and BioNTech collaborated to develop their COVID-19 vaccine that sells under the Comirnaty brand. Moderna’s Spikevax and Pfizer-BioNTech’s Comirnaty vaccines are both based on the messenger RNA technology (mRNA technology).
According to Moderna, Pfizer and BioNTech copied its mRNA technology without permission to develop Comirnaty. It is suing its rivals in the U.S. and Germany. Moderna is seeking damages in the lawsuit, though it is limiting its claims to Comirnaty sales made after March 8, 2022. Moreover, Moderna will not seek damages for Comirnaty sales in situations where the U.S. government would be liable.
A win could see Moderna walk away with a large sum of money. However, Pfizer has said it plans to defend itself vigorously against Moderna’s patent infringement allegations, suggesting this could be a long-drawn legal fight. The dispute could distract the attention of Moderna’s management team. Moreover, if Pfizer prevails in the lawsuit, Moderna’s stock could take a major hit.
Moderna shares dropped 3.8% to $136.70 on August 26, the day it announced the Pfizer patent lawsuit. Pfizer stock fell 2.3%, while BioNTech stock was down 4%. Moderna stock has plunged more than 40% year-to-date.
What is the Prediction for Moderna Stock?
Wall Street is cautiously optimistic on Moderna stock. According to TipRanks’ analyst rating consensus, MRNA stock is a Moderate Buy based on four Buys, five Holds, and one Sell. The average Moderna stock prediction of $217.89 implies over 59% upside potential.
TipRanks’ Stock Investors tool shows that retail investor sentiment is currently Very Positive on Moderna. In the past 30 days, 7.8% of the top-performing retail portfolios tracked by TipRanks increased their exposure to MRNA stock.
Final Thoughts
Moderna seems to be making a high-stakes gamble. If the patent lawsuit against Pfizer and its partner BioNTech succeeds, Moderna could pocket huge amounts of money in compensation. However, Moderna stock could sink if the rivals prevail in the lawsuit. Moreover, the lawsuit coming at a time when the world is still battling the COVID-19 pandemic could also present a public relations challenge for Moderna.
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