Is Arbutus Biopharma Stock Ready to Fly Again This Week?

For those who are looking to invest in the biotech and pharmaceutical sectors, Arbutus Biopharma Corp (NASDAQ:ABUS) stock has emerged as a potential option. The company had been involved in a patent dispute with fellow biotech firm Moderna Inc but on Friday that the United States Patent and Trademark Office ruled in favor of Arbutus.

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That was a major breakthrough for the company and it was no surprise that the stock market reacted positively as well. After the news broke on Friday, the stock rallied by as much as 25% and the reason behind the really is understandable. 

Since the ruling went in favor of Arbutus, the company will be entitled to royalty payments from Moderna for using its lipid nanoparticle delivery technology. The technology is currently being used by Moderna to create MRNA 1273, a coronavirus vaccine. The patent case had actually been filed by Moderna back in January this year. 

The technology, which helps in delivering RNA to a person’s cells, is not patentable. However, the latest ruling from the authorities has come as a major relief for Arbutus and also for those who are invested in the company. It would be interesting to see if this proves to be a springboard for further gains for the Arbutus stock. 

Moderna had actually licensed the technology from Acuitas, a small company from out of Canada. However, it later emerged, that Acuitas had, in turn, licensed the technology from Arbutus. However, Acuitas did not have the right to sublicense the technology. Following the ruling from the United States Patent and Trademark Office, Arbutus could now sue Moderna for the royalties owed. 

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However, the company has not made any announcement to that effect. The attempt from Moderna to make the patent null and the void was also a clear admission from the company that its delivery system was covered under the said patent. After the ruling came down, Moderna’s shares crashed and it was an indication of what the market actually thought of the situation. 

Mark Murray, the Chief Executive Officer of Arbutus stated that he has seen no evidence that suggests that the delivery system created by Moderna is free of the company’s intellectual property. He went on to add that what is being claimed as Moderna’s creation is actually riddled with intellectual property that belongs to Arbutus. The reaction to the news in the market suggests that investors did not take the news kindle with regards to Moderna’s prospects. 

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The stock sank considerably and it remains to be seen if it can make a recover quickly. In the meantime, there is going to be a significant focus on Arbutus’ actions with regards to its royalty payments. Investors could consider keeping an eye on the developments.

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