BioNTech hit with 'notice of default' from NIH in COVID-19 vaccine royalty dispute

Even as Germany's BioNTech deals with ongoing declines of its revenue and share price, it's facing another serious concern: U.S. officials are pressing the company to pay royalties linked to the commercialization of its lucrative Pfizer-partnered COVID-19 vaccine.

In a Monday filing, BioNTech said the U.S. National Institutes of Health (NIH) has sent a "notice of default" on funds that BioNTech allegedly owes the U.S. agency under their prior licensing agreement.

BioNTech says it "disagrees with the positions being taken by the NIH, and intends to vigorously defend against all allegations of breach."

In an annual filing a few days earlier, on March 20, BioNTech said it was in "ongoing discussions" with the NIH "concerning royalties and other related amounts allegedly owed on sales of our COVID-19 vaccine since commercialization."

At that point, the NIH had only threatened to send a notice of default, according to BioNTech.

BioNTech has generated around 40.5 billion euros ($43.9 billion) since starting its COVID-19 vaccine rollout with partner Pfizer in late 2020, so any amount owed could be quite substantial for the company.

Last week, BioNTech said it entered this year with cash, cash equivalents and security investments totaling 17.7 billion euros ($19.2 billion).

In a 2021 report (PDF), the NIH provided some background behind the BioNTech arrangement. After government and academic researchers published an engineered version of the the SARS-CoV-2 spike protein in early 2020, the National Institute of Allergy and Infectious Diseases began receiving a "significant amount of interest" from companies looking to incorporate the research into their vaccine development, the NIH said. Multiple government agencies worked together and determined that because of the urgency of the situation, they would allow for nonexclusive licenses.

A licensing deal with BioNTech in 2020, and the company's subsequent partnership with Pfizer, yielded the successful Comirnaty vaccine, the NIH said.

Besides the NIH alleging missed royalty payments, BioNTech is in similar discussions with the University of Pennsylvania, according to the company's annual filing.

BioNTech's COVID-19 partner Pfizer didn't mention any ongoing NIH discussions in its own recent annual filing.