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Biogen wins a key patent ruling for its best-selling MS drug

Biogen Inc. chief executive Michel Vounatsos, in a lighthearted mood earlier this year, outside the biotech’s headquarters in Cambridge.
Biogen Inc. chief executive Michel Vounatsos, in a lighthearted mood earlier this year, outside the biotech’s headquarters in Cambridge.(John Blanding/Globe Staff)

A legal cloud over Biogen Inc.’s best-selling multiple sclerosis drug was dispersed Friday when a federal patent court ruled for the Cambridge company in a long-running intellectual property challenge by a European competitor.

The decision means Biogen, the largest Massachusetts-based biotech company, won’t have to pay royalties sought by Denmark’s Forward Pharma A/S on US revenue from the MS pill Tecfidera, which generated sales of nearly $4 billion last year. Forward Pharma had claimed it owned the rights to the active ingredient in the drug.

Paying royalties to the Danish company could have cost Biogen at least $300 million a year starting in 2021, analysts said. It wasn’t immediately clear whether Forward Pharma will appeal the decision by the US Patent Trial and Appeal Board, which ruled Forward Pharma failed to provide a scientific description sufficient to prove Biogen had infringed on its patent.

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Biogen gained 1.6 percent to $273.42 on the news, while Forward Pharma fell 20 percent to $21.51.

The court ruling means that “Tecfidera can stay on the market with its own patent and does not need to rely on a Forward Pharma patent,” analyst Salim Syed at Mizuho Securities US wrote in a note to investors. Syed predicted that the move would boost Biogen’s annual earnings in the future because it won’t have to pay a 10 percent royalty to Forward Pharma on Tecfidera sales in the United States.

Biogen obtained exclusive rights to sell the drug through 2028. But the company has been battling patent challenges for years. Three developments this year, however, have removed much of the uncertainty around its sales prospects.

In January, Biogen settled part of its patent dispute with Forward Pharma, agreeing to pay $1.2 billion to license intellectual property covering the active ingredient in Tecfidera, called dimethyl fumerate, though that decision didn’t resolve the royalties dispute.

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In mid-March, the US Patent Trial and Appeal Board rejected a separate challenge from Texas hedge fund manager Kyle Bass’s Coalition for Affordable Drugs, which filed multiple suits to invalidate the intellectual property of drug makers.


Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.