The Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office (USPT) has ruled in favor of Biogen in a dispute between Biogen and Forward Pharma A/S, a Copenhagen, Denmark-headquartered biopharmaceutical company, over a patent application for the use of dimethyl fumarate (DMF), the active ingredient in Biogen’s multiple sclerosis (MS) drug, Tecfidera. Tecfidera is Biogen’s top-selling drug with 2016 sales of $3.97 billion and leads Biogen’s MS franchise, which had 2016 sales of $8.82 billion.

The patent application under scrutiny was filed by Forward Pharma, patent application 11/576,871 (the ‘871 application), which covers the method of treating MS with a 480 mg per-day dose of DMF, the approved dose of Biogen’s Tecfidera. Forward Pharma filed the patent application in conjunction with its proprietary DMF formulation, which the company began developing in 2005 for treating inflammatory and neurological indications. The PTAB has ruled that the claims of Forward Pharma’s ’871 application are not patentable due to a lack of adequate written description.

Forward Pharma intends to file an appeal challenging the PTAB’s decision to the US Court of Appeals for the Federal Circuit in Washington, D.C., the company said. The appeal is expected to last twelve months or longer.

On January 17, 2017, Forward Pharma entered into a binding agreement with two wholly owned subsidiaries of Biogen and certain additional parties to enter into a settlement and license agreement. On February 9, 2017, Forward Pharma received a non-refundable cash fee of $1.25 billion from Biogen in connection with the execution and delivery of the license agreement. If Forward Pharma is successful in its anticipated appeal to the US Court of Appeals for the Federal Circuit and the ’871 application issues with claims covering treatment for MS by orally administering 480 mg per day of DMF, Forward Pharma anticipates that Biogen would be obligated to pay future royalties on net sales in the US of Biogen products indicated for treating MS, including Tecfidera, that would infringe a Forward Pharma patent, except for the rights granted under the license agreement and provided that other conditions of the license agreement are satisfied. One of the conditions to be satisfied in order for Forward Pharma to be eligible for any royalty payments from Biogen is the absence of generic entry in a particular country having a particular impact as defined by the companies’ license agreement.

If Forward Pharma is successful in its anticipated appeal and Biogen obtains an exclusive license to all intellectual property in the US that is owned by Forward Pharma under the license agreement and other conditions are satisfied, a royalty of 10% would be payable by Biogen on net sales in the US of applicable infringing products from January 1, 2021 to December 31, 2028 until the earlier of the expiration or invalidation of the patents owned by Forward Pharma in the US. This royalty would increase to 20% from January 1, 2029. If Biogen does not obtain an exclusive license and other conditions of the license agreement are met, Biogen will maintain a co-exclusive license with respect to the US licensed intellectual property, and the royalties payable by Biogen to Forward Pharma on its net sales in the US of applicable infringing products would instead be 1% from January 1, 2023. In the latter scenario, Forward Pharma would retain the right to commercialize in the US or assign its US co-exclusive rights, on one occasion only, to a single third party.

Source: Forward Pharma