Biogen's Tecfidera faces outside pressure
- Biogen went to court on Wednesday for the oral arguments in a patent interference trial with Forward Pharma, which is challenging the validity of Biogen's '514 patent for its multiple sclerosis drug Tecfidera.
- The decision of the court could determine whether Biogen retains patent exclusivity on the blockbuster drug through 2028.
- Should the court rule against Biogen, Evercore ISI analyst John Scotti expects Forward Pharma would be willing to license its patent to the company, allowing Biogen to retain exclusivity on the drug through 2025. Forward stands to gain a 10% to upwards of 20% royalty on the drug, according to analysts' speculation. Forward has not commented on what a "reasonable royalty" might be.
The court didn't come to any decisions in the Nov. 30 hearing, and analysts don't expect an outcome until the middle of the first quarter.
Yet Tecfidera is a major cornerstone of Biogen's multiple sclerosis franchise and losing exclusivity on the drug could impact future revenues. Sales of Tecfidera brought in just under $3 billion through the first nine months of 2016.
Biogen currently has an uncertain future. Its MS franchise has been under pressure and it has a highly risky pipeline. Recent setbacks in Alzheimer's disease drug development could have a negative read-through for some of Biogen's pipeline focusing on the disease.
The legal battle with Forward is over the 480mg dose of dimethyl fumarate, the active ingredient in Tecfidera. Danish drugmaker Forward claims that Biogen infringed on its patent covering the development of the drug. Biogen says otherwise.
"Recall Biogen claims a 2/04 conception date which predates Forward's conception date. Forward does not argue they've conceived earlier but instead argues the Biogen was not diligent from Forward's patent filing to reduction to practice, which in this case would be required for Biogen to claim first inventor," wrote Jefferies analyst Biren Amin in a Nov. 30 note to investors, who believes Forward has a good chance of invalidating Biogen's patent.
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