Moderna has refused to hand over to China the key intellectual property behind the development of its breakthrough Covid-19 vaccine, leading to a breakdown in talks to sell it there, according to multiple people familiar with the matter.
The Massachusetts-based pharmaceutical company rejected Beijing’s request to hand over the recipe for its messenger RNA vaccine due to commercial and safety concerns, said two people involved in the talks, which took place between 2020 and 2021. The vaccine maker says it still is “eager” to sell the product in China.
The mRNA vaccine technology used by Moderna and BioNTech/Pfizer provides longer-lasting and higher levels of protection than the inactivated vaccine technology used by the Chinese manufacturers. Several Chinese drug companies are racing to develop a homegrown alternative to mRNA, but are struggling with the emergence of more infectious variants.
One person close to Moderna’s Greater China team said the company had “given up” on its previous efforts to access the Chinese market because of Beijing’s demand to hand over the technology as a prerequisite for sales in the country.
To date, Beijing has proposed two routes for foreign manufacturers of Covid-19 vaccines to distribute in China, depending on regulatory approval: making a full technology transfer to a local drugmaker or setting up a manufacturing base in China with a local partner. while maintaining control of the underlying technology. Moderna was pressured to accept the first option.
German group BioNTech struck a deal with Shanghai Fosun Pharmaceutical to conduct clinical trials and commercialize its vaccine in 2020, which meant it retained control of the intellectual property. Under the partnership, Fosun has agreed to provide a factory that will produce up to 1 billion doses a year.
In contrast, Shanghai-based group Everest Medicines has struck a deal to access Canadian biotech company Providence Therapeutics’ mRNA vaccine candidate, which involves a full technology transfer.
Beijing has not given regulatory approval to either vaccine.
Moderna’s management did not want to hand over the vaccine recipe to a Chinese partner because of reputational damage if the local partner botched production, two people familiar with the matter said.
Moderna fiercely defends its intellectual property around the world, saying that handing over patents will do little to address supply constraints. Talks in Italy to transfer technology to local manufacturing sites have also failed, but Moderna cited the lack of capacity to oversee it as the reason.
China has not approved any mRNA products for therapeutic purposes, and the mass production of this type of vaccine is more complicated than the existing inactivated vaccines produced in China by Sinopharm and Sinovac.
In recent weeks, Moderna has signaled that it is ready to resume talks with China. Its chief medical officer, Paul Burton, said this month: “We would certainly be very keen to work with China if they think there is a need for a vaccine there.”
Burton’s comments came days after US President Joe Biden declared the “pandemic is over,” wiping more than $10 billion off the market value of major vaccine makers, including Moderna.
Moderna told the Financial Times: “We are not currently in supply negotiations with China. We are open to talking to countries about their Covid-19 vaccine supply needs.”
Industry insiders noted that the company’s desire to renew talks with China, the last remaining major economy without an mRNA injection, was prompted by weak demand for vaccines in the wealthier countries where it initially targeted sales.
According to Airfinity, a data firm that tracks vaccine supplies, Moderna has shipped a greater share of its vaccines to high-income countries than the other three major vaccine makers, a strategy that has brought it billions of dollars in profits. More than 86 percent of Moderna’s drugs are supplied to high-income countries, compared with 74 percent for BioNTech/Pfizer, 63 percent for Johnson & Johnson and 19 percent for AstraZeneca.
The demand slowdown has affected all major coronavirus vaccine makers, but because the Covid-19 injection is the only product approved, the pressure on Moderna’s management is particularly acute, according to people familiar with the matter.
Additional reporting by Jamie Smith in New York