Oxfam Files SEC Complaint Against Moderna for Deceiving Investors Over Patent Dispute

Oxfam America filed a complaint Tuesday with the Securities and Exchange Commission that accuses vaccine maker Moderna of making "deceptive and ambiguous statements" that "were designed to hide damaging information from investors," in violation of disclosure laws.

Those alleged "misleading statements" center on Moderna's ongoing dispute with the U.S. government regarding intellectual property rights to the mRNA Covid-19 vaccine developed in collaboration with the National Institutes of Health, and the language the company used to convey that fight in reports to shareholders.

"The fact that Moderna relies so heavily upon this disputed product as the exclusive source of its profits, that its vaccine is subject to intense public and governmental scrutiny, and that an average reasonable investor would have found the U.S. government-Moderna dispute a critical element in determining the stock's value all indicate the company failed to disclose a material risk," the whistleblower complaint, seen by Common Dreams, states.

The filing comes amid sustained criticism of Big Pharma's control over life-saving Covid-19 vaccines--including Moderna's--and demands that pharmaceutical companies share their vaccine technology with the world to help counter stark and ongoing global vaccine inequity. That call has only become more urgent in light of the highly transmissible Omicron variant.

The complaint comes just days after Moderna put at least a temporary pause on its fight with the National Institutes of Health (NIH) over patent rights, because the company put a hold on acquiring the patent. As the Washington Post reported:

Moderna had disputed some claims by NIH that federal scientists were responsible for the invention of the company's mRNA coronavirus vaccine, complicating the government's ability to license the patent and share it with vaccine makers around the world. Government scientists worked with Moderna in January 2020 to rapidly develop the spike protein technology that underpins the vaccine.

While Moderna had acknowledged NIH-funded scientists' role in devising the vaccine, some of its patent applications excluded the government's contributions, advocacy group Public Citizen told reporters last month.

"Moderna believes that its scientists invented the specific mRNA sequence at the heart of the patent in question," according to the company's statement. "The company acknowledges that NIH feels equally strongly that its scientists should be listed as co-inventors for their contemporaneous work on the protein sequence."

"Patent holders could seek a cut of the shot's billions of dollars in sales," the Wall Street Journalnoted, "though NIH hasn't said whether it is interested in royalties."

Last week's development, according to the filing, doesn't eliminate the threat of litigation with the federal government but simply "kicks the can down the road."

It's also evidence Moderna "is likely aware that this patent dispute is taking a reputational toll and could lead to a costly lawsuit," the filing states.

Moderna did not, however, clearly convey this information in its recent reports to shareholders.

Instead, the company says it "may be subject to legal proceedings" and as such concealed the fact that "the NIH is openly contemplating litigation because of the company's refusal to share inventorship credit" and hid "damaging information from investors."

Diana Kearney, senior legal advisor for legal and shareholder advocacy at Oxfam America, said Moderna must be held accountable.

"Instead of being transparent and using its life-saving technology to help curb the pandemic," Kearney said in a statement, "Moderna is doing the opposite, obfuscating its patent dispute with the U.S. government, ignoring the death and suffering of millions worldwide, and declining to share their technology to help alleviate the stranglehold that Covid-19 has placed on the global economy."

"Few times in history has a single corporation exercised such a massive influence on the world's trajectory, impacting nearly all of humankind's physical, mental, and financial health," she added, calling Moderna "uniquely positioned to speed the end of the pandemic if it is transparent and shares its technology."

"In light of the company's misguided pursuit of short-term profit over transparency for its investors, and the deadly consequences this may have for millions," said Kearney, "Oxfam is calling on the SEC to investigate and help hold the company to account."