Biogen to pay $1.25B to de-risk a Tecfidera patent battle, and Forward Pharma’s shares rocket up
Biogen will pay Forward Pharma $1.25 billion in cash to help satisfy the Danish biotech’s claims that its flagship multiple sclerosis drug Tecfidera interfered with its patents.
The pricey settlement comes in exchange for a license agreement on the technology used in the 480 mg daily dose, which was at the center of the IP dispute. And if Forward wins their interference case before the Patent Trial and Appeal Board, Biogen has agreed to pay a royalty on sales.
Forward Pharma’s shares $FWP skyrocketed 63% on the news.
If Forward goes ahead and wins the dispute, Biogen will pay 1% royalties if it winds up sharing the market with a co-exclusive license. That figure rises to 10% on an exclusive license from 2021 to 2028. And the revenue stream for exclusive status jumps to 20% on January 1, 2029.
Brian Abrahams at Jefferies attended the hearing at the end of November, and came away thinking that Biogen had been exposed to the toughest line of questioning. Kyle Bass’s group has been hammering away at the Tecfidera patents as well. And Biogen evidently was persuaded that it was better to settle for a significant sum now rather than take its chances with a major setback.
From the analysts’ perspective, Biogen’s deal has some real upside for the Big Biotech, protecting it from Bass’s assault and any other patent challenge that comes along.
For Biogen, the payout comes as Tecfidera sales have begun to wane, putting extreme pressure on the company to do something dramatic to enhance its pipeline. It also comes after a number of high-profile patent cases, including the big loss Regeneron/Sanofi were exposed to in their dispute with Amgen over the PCSK9 franchise.
“We are very pleased to have reached this settlement with Forward Pharma. We believe this agreement will clarify and strengthen our intellectual property for TECFIDERA, the leading oral therapy for multiple sclerosis,” said Michel Vounatsos, the new CEO of Biogen.