- Biogen's defense of its blockbuster multiple sclerosis treatment Tecfidera (dimethyl fumarate) got a lift Tuesday after the U.S. Patent Trial and Appeal Board rejected a patent challenge by a group affiliated with hedge fund manager Kyle Bass.
- The U.S. Patent Trial and Appeal Board upheld Biogen's '514 patent on the 480 mg dose of Tecfidera, boosting the chances Biogen will be able to maintain patent protection on the top-selling drug for longer.
- Defending Tecfidera, which earned nearly $4 billion in sales last year, is a priority for Biogen. In January, the big biotech paid Danish drugmaker Forward Pharma $1.25 billion to license patents that posed a threat to the franchise.
Despite the positive development, Biogen hasn't fully put to rest the patent challenges surrounding Tecfidera. So-called interference proceedings between the company and Forward Pharma are still ongoing at the Patent Trial and Appeal Board (PTAB), which could force Biogen to pay Forward royalties on sales of Tecfidera.
But Tuesday's decision against Kyle Bass' Coalition for Affordable Drugs eliminates a worst-case scenario for Biogen, according to analysts from Jefferies, an investment bank. With Kyle Bass' challenge dismissed, Biogen is more likely to secure patent protection of Tecfidera through at least 2028, four to five years later than had been expected.
And while a loss in the interference proceedings against Forward would mean royalty payments of 10% from 2021 through 2028, the license agreement defends against a much sharper downside scenario where Biogen would face generic competition sooner.
Biogen stock moved higher during Tuesday trading, but closed only slightly higher after losing ground at the end of the day.
Outside of patent challenges, Biogen is also facing stiffer branded competition in the multiple sclerosis space. Annual sales of Tecfidera rose last year, but only because price increases offset a decline in sales volume of around 1%.
Biogen has its eyes on Roche's multiple sclerosis candidate Ocrevus (ocrelizumab), which could win approval in the U.S. as soon as next week. Ocrevus has shown efficacy in both relapsing multiple sclerosis and the tougher-to-treat primary progressive form of the neurodegenerative disease. Blockbuster sales are predicted for the drug, which could put pressure on Biogen's franchise.