The news is likely to come as a relief to many investors, Citi told investors in a research note.
- Citi kept a ‘Neutral’ rating on Moderna with a $41 price target.
- BofA contends that Moderna's settlement takes "a meaningful chunk of the litigation overhang off the table," but adds that the agreement is "also not the walk-away outcome we expect some bulls were hoping for."
- Under the settlement, Moderna will pay Arbutus and Genevant $950 million in the third quarter of 2026.
Shares of vaccine maker Moderna (MRNA) rallied 16% on Wednesday after the company announced that it has entered into an up to $2.25 billion settlement with Genevant Sciences and Arbutus Biopharma over a vaccine patent row which has left analysts divided.
Under the settlement, Moderna will pay Arbutus and Genevant $950 million in the third quarter of 2026. The remaining $1.3 billion is subject to further litigation, the company said on Tuesday. If Moderna prevails in the litigation, no further payments will be due but if it doesn't, it will have to make an additional payment of up to $1.3 billion.
Analyst Take
Citi analyst Geoff Meacham views Moderna's settlement with Arbutus as not the best-case scenario of an outright win but better than feared. The news is likely to come as a relief to many investors, the analyst told investors in a research note, while adding that it thinks the settlement removes an overhang for the stock. Citi kept a ‘Neutral’ rating on Moderna with a $41 price target.
BofA, likewise, contends that Moderna's settlement takes "a meaningful chunk of the litigation overhang off the table," but adds that the agreement is "also not the walk-away outcome we expect some bulls were hoping for."
The structure leaves "a contingent tail" as Moderna could owe an additional payment of up to $1.3 billion if further litigation affirms liability, noted the analyst, who reiterated an ‘Underperform’ rating and $31 price target on Moderna shares.
Settlement Deal
The settlement announced on Tuesday resolves all enforcement actions involving Moderna’s use of Genevant’s and Arbutus’ Lipid Nanoparticle (LNP) delivery technology in its COVID-19 vaccine Spikevax as well as respiratory syncytial virus (RSV) vaccine mRESVIA. The company said that the settlement provides certainty going forward for the company’s entire infectious disease portfolio and its future vaccine pipeline with no future royalties owed.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around MRNA rose from ‘bearish’ to ‘bullish’ territory over the past 24 hours, while message volume rose from ‘low’ to ‘high’ levels.
MRNA shares have gained nearly 90% over the past 12 months.
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