to pay Forward Pharma $1.25 billion to protect MS drug
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[January 18, 2017]
(Reuters) - Biogen Inc said on
Tuesday it would pay Forward Pharma A/S $1.25 billion to license the
Danish company's patents covering multiple sclerosis drugs, providing
Biogen an insurance policy on future sales of Tecfidera, its blockbuster
oral treatment for the disease.
Biogen and Forward Pharma have been locked in a dispute over the
patents for dimethyl fumarate, the key active ingredient in
Tecfidera, which had sales of about $4 billion in 2016. While the
deal gives Biogen a share of Forward's intellectual property, the
legal cases are ongoing.
Forward Pharma, whose shares were up 51 percent, said it was looking
to return a substantial portion of its cash windfall to
shareholders. It said it was considering both stock buybacks and
The agreement does not resolve ongoing U.S. and E.U. patent disputes
between the two companies, Biogen said. The U.S. biotech could still
be on the hook for royalty payments on future Tecfidera sales if it
loses those challenges.
If Biogen patents on Tecfidera are ruled valid and enforceable the
company will owe no future royalty payments.
If a Forward Pharma patent ultimately keeps Tecfidera on the market
and free of generic rivals, Biogen said it will pay a 10 percent
royalty from 2021 through the end of 2028, and a 20 percent royalty
beginning in 2029.
Biogen can still appeal any patent ruling it might lose.
"We believe this agreement will clarify and strengthen our
intellectual property for Tecfidera," Biogen's new Chief Executive
Michel Vounatsos said in a statement.
Third-quarter Tecfidera sales of $1.03 billion accounted for about a
third of Biogen revenue in the period. It is the market leader for
oral MS treatments.
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Analysts said the agreement removes a major uncertainty that had
been hanging over Biogen.
The deal is important in the long term as a patent cliff on
Tecfidera could have curbed the company's growth after 2020 and
weighed on investors, RBC Capital Markets analyst Michael Yee said.
Forward Pharma shares rose $9.36 to $27.21, while Biogen edged up 48
cents at $285.23.
(Reporting Bill Berkrot in New York and Natalie Grover and Ankur
Banerjee in Bengaluru; Editing by Ted Kerr and Tom Brown)
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