BioNTech enters settlement with US agency, UPenn over COVID vaccine royalties

(Reuters) -BioNTech has entered into two separate settlement agreements with the U.S. National Institutes of Health and the University of Pennsylvania over the payment of royalties related to its COVID-19 vaccine, the company said in filings.

The German company, which partners with U.S. drugmaker Pfizer (NYSE:) for its COVID-19 vaccine, said on Friday it would pay $791.5 million to the U.S. agency to resolve a default notice.

Separately, the company will pay $467 million to the University of Pennsylvania (Penn), which has agreed to dismiss a lawsuit brought against the vaccine maker accusing it of underpaying royalties.

BioNTech (NASDAQ:) said partner Pfizer will reimburse it for up to $170 million of the royalties payable to Penn and $364.5 million of the royalties paid to the National Institutes of Health (NIH)for 2020-2023 vaccine sales.

NIH and Penn did not immediately respond to requests for comment.

The U.S. government is owed royalty payments under the terms of the license BioNTech has taken for certain patents owned by the NIH, among other entities.

Penn’s lawsuit had said BioNTech owes the school a greater share of its worldwide vaccine sales for using “foundational” messenger RNA (mRNA) inventions developed by Penn professors and Nobel Prize winners Katalin Kariko and Drew Weissman.

The company also amended its license agreements with both NIH and Penn, agreeing to pay a low single-digit percentage of its vaccine net sales to both the entities.

Both settlements include a framework for a license to use NIH and Penn’s patents in combination products.

The agreements do not constitute an admission of liability in either case, the company said.