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Biogen Soars on Patent Win for MS Drug Tecfidera Over Mylan

Zacks Equity Research

Shares of Biogen Inc. BIIB rallied 17.5% on Wednesday after the Patent Trial and Appeal Board (PTAB) of the U.S. Patent And Trademark Office (USPTO) gave a favorable ruling to the company over a patent dispute with Mylan MYL for its best-selling multiple sclerosis (MS) drug, Tecfidera.

Mylan in an inter partes review (IPR) was challenging Biogen’s ‘514 patent, which covers the treatment of multiple sclerosis with 480mg dose of dimethyl fumarate (DMF), the active ingredient of Tecfidera. The patent provides market exclusivity in the United States until 2028.

Per the statement from the PTAB, generic drugmaker Mylan failed to demonstrate that some claims were not patentable.

Though Mylan announced its intention to appeal against this decision, the favorable ruling raises hopes for Biogen’s chances of maintaining Tecfidera’s exclusivity until 2028. Tecfidera constituted 39% of the company’s total product revenues in 2019.

The news removes a short-term overhang from the company. Biogen also faces a generic litigation in a court case related to the same patent. The favorable ruling increases the chances of winning the court case.

Shares of Biogen have increased 7.8% in the past year versus the industry’s decrease of 0.1%.

Notably, in 2017, Biogen strengthened its patent position for Tecfidera through a settlement and licensing agreement with Danish biotech Forward Pharma A/S regarding the same patent. Per the settlement, Biogen agreed to pay $1.25 billion for buying the license to Forward Pharma’s intellectual property covering DMF.

Meanwhile, last week, Biogen delivered better-than-expected fourth-quarter 2019 results. The company beat on both earnings and sales in the reported quarter.

Revenue growth in the quarter was principally driven by higher sales of its key MS drugs, continued global growth of its spinal muscular atrophy (SMA) drug Spinraza and expansion of its biosimilar business.

Notably, Tecfidera has been one of the top revenue drivers for Biogen over the years. The drug generated sales worth $4.4 billion in 2019, reflecting an increase of 4% year over year.

Zacks Rank & Stocks to Consider

Biogen currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Xenon Pharmaceuticals Inc. XENE and Kala Pharmaceuticals, Inc. KALA, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Xenon Pharmaceuticals’ loss per share estimates have narrowed 12.04% for 2020 over the past 60 days. The stock has soared 85.7 % in the past year.

Kala Pharmaceuticals’ loss per share estimates have narrowed 0.9% for 2020 over the past 60 days.

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Biogen Inc. (BIIB) : Free Stock Analysis Report
 
Xenon Pharmaceuticals Inc. (XENE) : Free Stock Analysis Report
 
Mylan N.V. (MYL) : Free Stock Analysis Report
 
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