Biogen pays $1.25 billion
 to protect a blockbuster drug | January 23, 2017 Issue - Vol. 95 Issue 4 | Chemical & Engineering News
Volume 95 Issue 4 | p. 9 | News of The Week
Issue Date: January 23, 2017 | Web Date: January 18, 2017

Biogen pays $1.25 billion to protect a blockbuster drug

Licensing agreement with Forward Pharma will ensure rights to the multiple sclerosis drug Tecfidera
Department: Business
Keywords: intellectual property, pharmaceuticals, licensing, royalties

Biogen has agreed to pay the Danish biotech firm Forward Pharma $1.25 billion to settle a patent dispute over dimethyl fumarate, the active ingredient in its multiple sclerosis drug Tecfidera. The settlement and licensing agreement will afford Biogen intellectual property rights to the drug until at least 2023.

Tecfidera, Biogen’s best-selling drug, notched sales of approximately $4 billion in 2016. Its patent currently expires in 2028, but that protection is challenged in suits brought in the U.S. and Europe by Forward, which claims to have an earlier patent on the compound. Decisions in these cases are expected early this year.

As a result of the patent challenges, which continue in spite of the payment, Biogen faced the prospect of paying royalties of 10%. Under the licensing agreement, those royalties will be deferred until 2021. Without the protection afforded by the agreement, Biogen may have been required to make back payments as well as royalties from September 2014.

John Scotti, a biotech analyst at the research firm Evercore ISI, told clients that he sees the settlement as “effectively a $1.25 billion insurance policy” that provides Biogen with intellectual property for Tecfidera beyond 2023, regardless of the outcome of the patent dispute.

Biogen acquired its rights to dimethyl fumarate in 2006 with the purchase of Fumapharm, a Swiss developer of therapeutics derived from fumaric acid esters.

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