On the Intellectual Property Battle Behind the COVID-19 Vaccine

Brendan Borrell Breaks Down How a Lifesaving Technology Almost Didn’t Happen

The path from a scientific hunch to a lifesaving product is rarely a linear one. A decade before the coronavirus pandemic began, a new professor at the Harvard Medical School named Derrick Rossi stepped out of his laboratory at the Immune Disease Institute and carried his laptop to another building on campus. Rossi was a mellow Canadian with a mop of curly hair and a soul patch. It was late in the afternoon on April 27, 2010. Rossi had no idea about the adventure he was about to embark on, but the man he was talking to that day, Timothy Springer, could probably help him out.

Springer was, far and away, the wealthiest scientist that Rossi had ever met. Springer’s first company, born out of one of his discoveries in the late 1990s, had led to three FDA-approved drugs. He had been embarrassed by his riches at first, but he eventually embraced his predicament and decided that if he wanted, say, a twenty-three-ton rock in his backyard, he should get it. “I had gone to a presentation on the Chinese  tradition of scholars’ rock collecting,” Springer said. “And Isaid, ‘Aw, that’s what I have to have: a rock that is of the same scale as my house.’” In Springer’s office, Rossi presented slides showing a still-unpublished breakthrough that his laboratory had achieved. Using messenger RNA, Rossi and his team had transformed normal cells into stem cells. Stem cells represented the next frontier in medicine. They were like cellular Silly Putty and had the potential to restore a person’s vision or heal an injured heart. But the field had been held back because the most potent stem cells came, controversially, from human embryonic tissue, and alternative sources were not ideal. Rossi and his institute had already filed a patent application on their transformational mRNA strategy.

Every time Rossi started to talk about it, however, Springer would stop him with another question. “You expect scientists to be skeptical, but it was a little bit overboard,” Rossi said. Despite the interruptions, Rossi continued clicking through his presentation and explained that the potential of mRNA went beyond stem cells. It could turn the body’s cells into drug-delivery factories. Once inside the cell, an mRNA sequence would be translated into a protein that could, for instance, counteract a rare genetic disease like cystic fibrosis.

When Rossi finished, he looked over at Springer, whose face had softened. “This is fantastic. I want to invest,” he told Rossi. He thought Rossi shouldn’t try to do this alone, however. He needed a cofounder, a proven quantity. “Let’s call Bob Langer,” Springer said.

Langer was a professor at the Massachusetts Institute of Technology and a grand old man of biotech who had founded or been involved in dozens of companies. He had nearly a thousand patents to his name. On May 25, Langer said he was in. Langer, Springer, and  Rossi headed to the offices of Flagship Ventures, where venture capitalist Noubar Afeyan became so excited when he heard about the project that he didn’t simply want to bankroll the thing, he wanted to be a cofounder. Screw stem cells, Afeyan said. Let’s focus first on making protein therapies for rare diseases. That’s the low-hanging fruit and an $80 billion market. Rossi’s institute was willing to let the four license the mRNA technology described in Rossi’s stem-cell patent application. The nascent company operated in stealth mode at first, waiting for the media blitz that would come when Rossi’s results were published in a scientific journal. Rossi mentioned to Flagship’s lawyers that his lab’s    discoveries wouldn’t have been possible without the groundwork laid by another biologist, a researcher at the University of Pennsylvania in Philadelphia named Katalin Karikó.

“He’s telling me, ‘I want the patent,’” Karikó recalled. “He was out of his mind.”

Karikó’s unrestrained smile concealed a lifetime of disappointment. She had been working for more than twenty years toward her dream of putting RNA to use as a drug. She was hardly the first to have that dream, but what set her apart was her unwillingness to abandon it. Year after year, she applied for funding from the National Institutes of Health to further her research, and year after year, she was rejected. In January 1995, as Karikó was recuperating from a surgery, she learned that she was no longer eligible for tenure. She was demoted to a research scientist. She would have to obtain grants to support herself or find other professors to put her on their projects. For Karikó, it was more proof that a woman with a foreign accent could never make it in America. “People always asked me, ‘Who is your boss?’” she recalled. “‘Who is the head of the lab who you are working for?’” At the Xerox machine on her floor one day, the effusive Karikó struck up a friendship with a new professor, an earnest if reserved immunologist named Drew Weissman. Weissman had come from Tony Fauci’s lab at the NIH, and he told Karikó he had  been working on a DNA-based HIV vaccine but wasn’t having much   success.

“Can you make RNA?” he asked.

“Of course I can,” Karikó said. Karikó was a confident problem-solver who had grown up behind the Iron Curtain in the dusty farm town of Kisújszállás on the Great Hungarian Plain. Her childhood home hadn’t even had running water, much less a television. Her father was a butcher, and his shop was where she first encountered biology; when she was five years old, she learned how blood clots.

Hungary’s educational system was stellar, though materials were in short supply during the Cold War. When her experiments required ethyl acetate, a solvent in nail polish remover, Karikó synthesized it by mixing grain alcohol and vinegar and then distilling the combination. In the early 1980s, during her postdoctoral work at the Hungarian Academy of Sciences, she needed small bubbles of fat, known as liposomes, to deliver DNA to cells. To make those, she followed a recipe from the 1940s that included a raw ingredient she knew well from her childhood: cow brains.

With the rise of molecular biology in the 1980s, the concept of gene-based vaccines began to take shape. The biggest hurdle was that DNA on its own didn’t generate much of an immune response. One approach sought to package bits of DNA from whatever troublesome virus you wanted to vaccinate people against inside a much less dangerous virus. This was the viral vector vaccine strategy. An alternative strategy—using RNA rather than DNA—didn’t seem viable because RNA was considered a relatively unstable molecule. Moreover, as the enzymes needed to make it in the lab didn’t become commercially available until 1984, RNA remained challenging to synthesize and challenging to work with—at least if your name wasn’t Katalin Karikó.

When Weissman tested Karikó’s mRNA in his lab, he found it had the opposite problem that DNA did: It caused too much of a reaction. His cell cultures looked like the aftermath of a bombing raid. He had a hunch about what was happening. To a cell, a strand of foreign mRNA is indistinguishable from an RNA virus. The cell will issue a red alert and stop expressing any and all RNA. A cell that senses it is under attack for long enough will self-destruct. Weissman told Karikó that her mRNA produced such an overwhelming immune reaction, it would not only be challenging as a vaccine, it might never work as a therapy either.

Over the next several years, however, Karikó and Weissman persisted, attempting to circumvent the innate cellular defenses. Organisms of all types generally make mRNA in the same manner, but once that mRNA is released into the cell, the cell will modify it in small ways, adding a new chemical bond here or there. Biochemists have identified over a hundred different types of modified mRNA. For instance, the nucleotide base uracil normally has a sugar stuck to it, forming the mRNA building block known as uridine. One of the most common modifications transforms uridine into pseudouridine. It is the smallest of tweaks, like the way an old-fashioned calculator will add a horizontal bar to the middle of a 0 to turn it into an 8. But in 2004, when Karikó and Weissman tested various types of modified mRNA, they realized they were onto something. The cells no longer blew themselves up. This was huge. Vaccines and drugs using mRNA seemed within reach. They wanted to make a company.

But first, they needed to patent their discovery. Intellectual property is the lifeblood of the biotechnology industry. It is the core of any business plan and the foundation on which to raise money from investors. researchers at universities in the United States are typically required to hand over the rights to their patents to their employers. Under the terms of their employment agreements, researchers are often granted a share of the proceeds if their technology gets licensed, but their institution gets to make the call on how to commercialize it. Does the university license it out to multiple parties or only one? Should the inventor be encouraged to commercialize the technology independently or is it better to offer it to an established company? Sometimes the goal is to eke out as much profit as possible; other times, it may simply be to do the greatest good for society.

The University of Pennsylvania filed a provisional patent application on Karikó and Weissman’s modified mRNA in August 2005. Karikó wanted to develop drugs and thought it would be easy to convince UPenn that the company she and Weissman founded, called RNArx, should be granted a license to the technology. She would finally be able to pay herself a decent salary. UPenn, however, was skeptical. The only way the university would license the patent to RNArx was if the two founders gave the university a majority stake. For every dollar that came in, Karikó and Weissman would be required to turn over fifty cents to the university. Their lawyers told them the company could never survive under such conditions.

On February 5, 2010, the director of UPenn’s tech transfer office sent Karikó and Weissman a letter putting an end to their dream. “As we have been unable to reach agreement with RNArx, we have determined to speak with EPICENTRE Technologies Corporation concerning a possible license to the RNA technologies you have developed at Penn,” he wrote. “If you are in agreement, please countersign this letter.” Karikó was on the verge of tears as she signed it. Epicentre was a small company in Wisconsin that was known for making reagents, not therapeutics. For $300,000, UPenn granted Epicentre an exclusive license. Karikó’s initial earnings, after the university deducted its expenses, amounted to $38,250. The university also offered her an adjunct professor position—a job with no path to tenure. She would earn about $50,000 a year.

A few months later, she received a desperate call from a guy in Cambridge, Massachusetts, who said he worked at Flagship Ventures, the firm that was helping bankroll Derrick Rossi’s company. “He’s telling me, ‘I want the patent,’” Karikó recalled. “He was out of his mind,” she said. Intellectual property was a Jenga tower—removing a single piece could cause the whole thing to topple. Flagship feared that Rossi’s technology—the one Flagship had a license to—likely wouldn’t work without Karikó’s discovery of modified mRNA. Flagship’s start-up, after all, was going to be much bigger than stem cells. It was going to be called ModeRNA, a portmanteau of modified and RNA.

But Karikó didn’t know much about that yet. All she knew was that there wasn’t a lot she could do for this man. Or for herself, for that matter.

*

Derrick Rossi was about to be put in a difficult position.

The researcher in his lab in Boston who had actually come up with the idea for making stem cells with modified mRNA was a Brit named Luigi Warren. A decade older than the typical postdoc, Warren cut a distinctive figure on the Harvard Medical School campus. He dressed every day in the uniform of a punk-rock producer: black shirt, black blazer, and black jeans. He stood out in other ways as well. For instance, he believed he was being surveilled by the U.S. government and had once warned Rossi that the feds might come after him too. On his blog, Warren championed a convoluted theory that Saddam Hussein had been behind both the 9/11 attack and the 2001 anthrax letters and said that the U.S. government was trying to conceal that “unvoiceable strategic reality.” When Rossi told colleagues that he was hiring Warren, their responses were all pretty much the same: That’s the first guy you hired? The open-minded Rossi brushed off the skepticism.

Next thing Rossi knew, one of the coauthors on the paper, George Daley, a powerful member of the Harvard Medical School faculty, threatened to yank the data that his staff had contributed.

Warren was frustrated that his paper on stem cells that he hoped would make his academic career was languishing in the editorial pipeline of a peer-reviewed journal called Cell Stem Cell. He had been working on the project for over a year and feared that he was going to be scooped by competitors or that someone might steal his idea. Then the  editors at Cell Stem Cell requested that Warren and Rossi run some additional experiments over the summer. “I’m the one on the frontlines,” Warren said. “I’m working my ass off here, and I’ll lose everything.” Rossi was more experienced in the world of scientific publishing. “Guess what,  to get it published in a journal, we’ve got to do this shit,” he told Warren.  Warren stormed out of the lab. Rossi had always been able to walk Warren away from the edge when his temper flared up, but this time Warren wasn’t coming back. Rossi asked a technician to bring the study across the finish line. After months of work, on August 11, 2010, Rossi learned the good news: the paper was officially accepted. The sweet smell of success dissipated fairly quickly, however. The journal’s editor, Deborah Sweet, reached out to Rossi to say that she was putting a pause on the publication because an informant was claiming that Warren’s results could not be reproduced. Who the fuck is replicating our protocol? Rossi thought. The research was still under wraps, so it had to be an insider.

Next thing Rossi knew, one of the coauthors on the paper, George Daley, a powerful member of the Harvard Medical School faculty, threatened to yank the data that his staff had contributed. Without it, the paper would fall apart. Moderna would be dead in the water. Rossi  called Daley and told him he had no right to do that, but Daley refused to budge. Daley’s reputation was now on the line. “What a day from hell I have just had,” Rossi emailed a friend late on the evening of August 26. “Well, can only be uphill from here.” Little did he know.

Rossi called the big shots in the department and asked them to broker an agreement with Daley in order to swiftly verify the results. When Luigi Warren heard the news, he marched over to Cell’s offices in Cambridge and demanded to speak with editor Deborah Sweet. This is fucked. I’m going to put a stop to it, Warren recalled thinking. Sweet told her staff to go home, and Warren was escorted out of the building. Daley soon had a police cruiser keeping watch outside his home in Weston, Massachusetts.

Rossi never learned for certain who that initial informant was or what he or she was trying to accomplish. But over the next few weeks, the stem-cell breakthrough was corroborated to Daley’s satisfaction, and on September 30, the article was finally published online. Moderna was covered in the biotech press, and Time magazine called the research one of the top ten medical discoveries of the year. George Daley sent over champagne. But the uncomfortable truth for Moderna was that it was founded on nothing—or close to it. Despite the wow factor of the study, the patent that emerged from it was not enough to provide the company with a solid footing of intellectual property.

After Flagship’s first inquiry with Katalin Karikó, the company began looking into what it would take to sublicense her technology from the founder of Epicentre, a guy named Gary Dahl. As that process was under way, Flagship floated the idea to Karikó and Drew Weissman of them becoming consultants. It became increasingly clear, however, that Flagship wasn’t going to be able to obtain the license for the lowball sum it was offering, a number said to be south of $100,000. The discussions with the UPenn researchers went round and round, and finally Moderna walked away. “The last statement from [Flagship’s] lawyer was that they were going to set up the company and spend all their time and money figuring out how to get around our patent,” Weissman said.

While the academics saw that decision through a lens of frustration, the businesspeople at Flagship were just being pragmatic. The U.S. Patent and Trademark Office was going to take years to vet Karikó’s modified mRNA patent application. Flagship was alert to the possibility that the patent office could narrow its scope, leaving room for Moderna to eke out its own slice of the mRNA patent space. “We didn’t know what the patent office was going to do,” said Jason Schrum, Moderna’s first scientist. The science wasn’t even settled as to whether Karikó’s mRNA modifications—or any mRNA modifications—were absolutely necessary for the molecules to work as a drug. Alone in a basement in Cambridge, over the course of five months, Schrum tested multiple modified mRNA molecules alone and in combination. Eighty of them, by his estimate.

In early 2011, Flagship hired Stéphane Bancel to be Moderna’s first CEO. Bancel, who had trained as an engineer before going to Harvard Business School, was at that time the head of a major French diagnostics company called bioMérieux, but he was eager for something new.

Bancel had grown up in Marseille, France’s rowdy, diverse port city on the Mediterranean. His father had been an engineer and his mother a doctor who advised companies. In his youth, he and his younger brother would head south of the city to the mountainous coastline of Calanques National Park, where they would howl and leap off low cliffs into the turquoise waters below. It was a risk, but a calculated one: They would always check to make sure the water was deep enough. When Bancel heard about Moderna’s strategy, he could see both its promise and its peril. He knew that RNA was only “stable a few seconds in blood,” but he agreed to meet Derrick Rossi at his office to take a look at some of his data.

Bancel came away from the meeting intrigued. For weeks, he weighed the opportunity he was being offered, running it by a number of experts he trusted. During dinner one night at a Beacon Hill restaurant called Bin 26, he and his wife, Brenda, discussed the pros and cons. Bancel was nearing forty and he couldn’t imagine a better way to spend the next decade of his life than running Moderna, but he worried about the possibility of failure. “She told me to stop being French and not to be afraid of taking a risk,” he recalled to a journalist. The next day, he told Flagship he was ready to take the leap.

Bancel envisioned Moderna becoming the next Genentech, a biotech empire that had an impact in multiple therapeutic areas. He was a demanding boss who lost his temper frequently and was frustrated by the limits of his tiny team. In those first months, he initiated something called Project 800. Its goal was to synthesize eight hundred novel mRNAs, a tedious, overwhelming task without the robots used by Big Pharma. One employee working on the project said she passed out in her shower. Another was said to have skipped steps in the mRNA manufacturing process, causing some early animal studies to fail. The first  head of chemistry walked out of the building in the middle of the day and never came back.

Bancel and Derrick Rossi eventually had a falling-out, and there was further acrimony in those early days—Bancel never suffered fools—but as the company matured, it developed a healthier business culture and hired people better able to keep up with Bancel’s demands. “He’s not the kind of person who gives up,” said his brother, Christophe, also a bio-tech entrepreneur. Bancel brought on board Stephen Hoge, a handsome doctor and alum from the prestigious consulting firm McKinsey who became the company president. He also hired Israeli doctor Tal Zaks as the company’s chief medical officer. Bancel excelled at making sure the company’s coffers were fully loaded.

Moderna became a patent-filing machine, building up a fortress of intellectual property, but it couldn’t outrun the need for the Karikó and Weissman technology. Their patent was officially approved in October 2012, and it was broad enough that it was going to be hard to build a business on modified mRNA without infringing on it. The following year, Moderna signed a $420 million deal with AstraZeneca to collaborate on an mRNA-based drug to repair damaged heart tissue, along with possible cancer drugs. A breakthrough seemed imminent. With each passing year, the price of the Karikó patent crept upward. The license holder, Gary Dahl, was now unwilling to sublicense the mRNA technology for less than $30 million.

Moderna was unlikely to agree to pay that sum until it had clear path to bring mRNA to the market, and it still didn’t have that. In 2016, the company was forced to abandon a clinical trial on what was going to be the company’s first therapy, a treatment for a rare disease called Crigler-Najjar syndrome. Patients with the disease are missing a single liver enzyme, and in its most severe form, the disorder can lead to brain damage in infants. As a single-gene disorder that could be treated with only a small amount of enzyme, it seemed like the perfect target. Moderna, however, could never find the correct dose during animal studies. Too much of the drug induced liver toxicity; too little of the drug wasn’t potent enough. During Bancel’s presentation about Moderna at the J. P. Morgan Healthcare Conference in January 2017, he didn’t even mention it. He had turned his attention entirely to mRNA vaccines, which before now had been an afterthought at the company. Bancel understood that a vaccine is given once a year, at best, which meant a smaller payday. But that could also be seen as a plus because the toxicity problems they were wrangling with in their drug pipeline would not be as much of a challenge if a patient received only two or three doses of mRNA spread over weeks or months.

That’s not to say the shift to vaccines would be easy. In Moderna’s first two clinical trials of bird flu vaccines, a significant number of people suffered from pain and swelling at the injection site, and the levels of antibodies produced were middling, possibly due to the type of fat Moderna had used to stabilize its mRNA and shuttle it into cells. The company honed its approach, and Bancel did his best in the meantime to keep his shareholders happy, boasting of the company’s latest intellectual-property acquisition or development. Researchers tinkered away at the formulation of the fats that packaged the mRNA in the vaccines.

In the summer of 2017, Moderna returned to Gary Dahl, whose bargaining position had only grown stronger. Not everyone in the scientific community was persuaded that the Katalin Karikó method of modifying mRNA was necessary, but the alternatives had yet to show results. Moderna agreed to pay $75 million for a license to the UPenn patent on top of future royalties.

Karikó earned $2 million from the deal. By that point, she had been working for three years as the vice president of BioNTech, based in Mainz, Germany. In July 2013, she had traveled from Philadelphia to her native Hungary, where she took a road trip to Switzerland to watch her daughter, a U.S. Olympic rower, compete in the FISA World Rowing Championship. At the time she was entertaining a job offer from Moderna, but it wasn’t an executive position.

Karikó stopped in Mainz after the championship to give a talk. There, Uğur Şahin, BioNTech’s CEO, expressed the kind of warmth she had rarely felt in industry or academia. “We need you,” he said. That day, Karikó had a job offer, and BioNTech, like Moderna, gradually changed course from therapeutics to vaccines. It also licensed Karikó’s technology under the same terms as Moderna, netting her another $2 million. At sixty-five, Karikó was grateful for the chance at a comfortable retirement, but the thing she wanted most of all was to see mRNA succeed.

Stéphane Bancel, too, wanted mRNA to succeed. He just wanted to be the first one to do it.

__________________________________

The First Shots

From The First Shots by Brendan Borrell Copyright © 2021 by Brendan Borrell. Reprinted by permission of Mariner Books, an imprint of HarperCollins Publishers.

Brendan Borrell
Brendan Borrell
Brendan Borrell is Outside magazine correspondent and has written on science, health, and business for The Atlantic, Bloomberg Businessweek, National Geographic, Wired, and the New York Times. Borrell lives in Los Angeles, and The First Shots is his first book.





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