BioNTech Reaches $1.26 Billion Settlement Over COVID-19 Vaccine Royalties

Washington, U.S. – BioNTech (22UAy.DE), the German biotech firm that developed a COVID-19 vaccine in partnership with Pfizer (PFE.N), has resolved royalty disputes with the U.S. National Institutes of Health (NIH) and the University of Pennsylvania (Penn).

The company announced two separate settlement agreements totalling $1.26 billion to address allegations of underpaid royalties related to its vaccine sales.

NIH Settlement

BioNTech will pay $791.5 million to the NIH to settle a default notice concerning royalties owed under a license agreement. The payments cover vaccine sales from 2020 to 2023 and include royalties owed under U.S. government-held patents. Pfizer, as BioNTech’s partner, will reimburse the German company for $364.5 million of the amount owed to the NIH.

University of Pennsylvania Settlement

BioNTech also agreed to pay $467 million to Penn, resolving a lawsuit that claimed the company underpaid royalties for using foundational messenger RNA (mRNA) technology developed by Penn professors and Nobel Prize winners Katalin Kariko and Drew Weissman. Pfizer will reimburse BioNTech for up to $170 million of this settlement.

The settlement terms include amendments to BioNTech’s licensing agreements with both entities. The company will now pay a low single-digit percentage of vaccine net sales as royalties to the NIH and Penn, ensuring compensation for their contributions to mRNA technology.

Broader Implications

Both settlements provide BioNTech with licenses to use NIH and Penn’s patents in combination products, paving the way for future collaborations and innovations. The company emphasized that the agreements do not constitute an admission of liability.

Background and Dispute

The University of Pennsylvania’s lawsuit alleged that BioNTech owed the institution a larger share of vaccine sales, citing the groundbreaking mRNA research that underpinned the vaccine’s development. Meanwhile, the NIH sought royalties as part of licensing agreements for patents crucial to the vaccine’s creation.

The settlements mark a significant step in resolving disputes surrounding intellectual property and revenue sharing for COVID-19 vaccines, which have generated billions of dollars in global sales. Neither NIH nor Penn has commented on the agreements at this time.

These resolutions highlight the importance of clear licensing agreements in the biotech industry, especially as innovative technologies like mRNA become central to combating public health crises.