Penn expecting $467M windfall from COVID-19 vaccine royalty dispute

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The University of Pennsylvania expects to receive $467 million from a German COVID-19 vaccine manufacturer after the pair settled a lawsuit out of court in late December 2024.

The university filed a lawsuit against BioNTech four months ago, claiming that the company licensed vaccine technology developed by its Nobel Prize-winning researchers, but did not remit the full value of the royalties owed after selling $75 billion worth of vaccines worldwide.

Instead, the university asserted that BioNTech only paid royalties for vaccines sold in countries where it holds patents, instead of global sales, because the vaccine was manufactured in countries where the university has existing patents – something covered in the contract’s fine print.

The COVID-19 vaccines are manufactured in both Puurs, Belgium and Kalamazoo, Michigan.

“BioNTech must pay royalties as a percentage of its entire worldwide sales and not as it has done to date, only a portion of its worldwide sales,” wrote Leslie Miller Greenspan, attorney at Tucker Law Group in Philadelphia and an attorney for the university in August 2024. “BioNTech is failing to meet its royalty obligation because it applies an inappropriate deduction for supposed royalties to third parties.”

BioNTech also owes the National Institutes of Health $791.5 million for the same issue, to be paid no later than Feb. 18, according to its U.S. Securities and Exchange Commission filings.

That’s more than $1.2 billion in unpaid royalties BioNTech is expected to pay for the Pfizer-BioNTech COVID-19 vaccine sales.

BioNTech is not admitting fault in the case as part of the settlements.

The University of Pennsylvania and BioNTech declined to comment for this news story.

BioNTech agreed to pay $400 million in royalties owed from between 2020 and 2023 to the university, plus another $15 million to fund BioNTech and University of Pennsylvania vaccine alliance research for another three years as part of the settlement. Finally, the company will contribute $52 million to a jointly managed research and development investment fund.

The university also changed the contract terms to ensure it would be paid what it considers the full value of the deal since the product is still being sold on the market, and added a side letter for a “low-single-digit percentage” royalty on the net sales of its licensed products in 2024 and beyond.

Penn Medicine researchers Katalin Karikó Ph.D., and Dr. Drew Weisman Ph.D., won the 2023 Nobel Prize in Medicine for their work on mRNA technology that contributed to the COVID-19 vaccine research.

Patents typically last about 20 years. The university holds at least four patents for its mRNA technology across the United States and Europe.

Researcher Karikó, an adjunct professor at Penn Medicine for 36 years, worked as a senior vice president for BioNTech between November 2013 and October 2022, according to her LinkedIn profile. She is considered an external consultant for the company as of Jan. 2, according to its website.

The COVID-19 vaccine, also known as Comirnaty, generated about $5 billion in sales in 2024.

As part of the deal, pharmaceutical giant Pfizer is expected to chip in $170 million for the Penn royalties and $364 million towards the NIH royalties owed.

As a company, BioNTech generated about $3.9 billion in revenue during 2023, down from $17.7 billion in 2022. BioNTech estimated 2024 revenue to be between $2.7 billion and $3.3 billion.

The university licensed its mRNA patents to several companies between April 2010 and August 2020, including Epicentre Technologies Corp., mRNA Biotherapeutics Inc. and Cellscript.

In 2017, BioNTech sublicensed the university mRNA technology from Cellscript and expects to keep developing more pharmaceutical medications, such as cancer treatments and flu vaccines, using the university patented technology.

Licensing revenue at the University of Pennsylvania has been a substantial revenue stream for the Philadelphia institution since the COVID-19 pandemic began.

In fiscal 2021, the university collected $300 million in license revenue. In fiscal years 2022 and 2023, the university garnered $1 billion each year. During fiscal year 2024, it reported $466 million in licensing revenue.

In May 2024, Penn Medicine researchers developed an mRNA vaccine for the H5N1 avian flu, leveraging prior COVID-19 vaccine research. The research was funded by the National Institute of Allergy and Infectious Diseases, National Institutes of Health and the Department of Health and Human Services.

The Duke University Human Vaccine Institute was awarded $7 million from the federal health agencies to conduct clinical trials in early 2025.

But for the commercialization of such research, the university relies on pharmaceutical manufacturers to license such patents and take the drug to market.

It was not immediately clear which companies, if any, have licensed the experimental avian flu technology.