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Biogen loses patent dispute with Mylan, putting its top drug’s future in doubt

A West Virginia District Court ruled that a key patent covering Biogen’s top-selling drug, the multiple sclerosis medicine Tecfidera, is invalid, a win for the generics company Mylan.  Biogen has successfully defended its Tecfidera patents several times — from challenges from Hyman Capital, Danish biotech Forward Pharma, and most recently Mylan in a separate U.S. Patent and Trade Office dispute earlier this year. The District Court ruling marks its first loss, making it more likely that a generic Tecfide could emerge next year. Though Biogen will appeal the ruling, it marks a potentially stinging setback for the company, which derives nearly 40% of its revenue from Tecfidera sales. Biogen’s spinal muscular atrophy drug Spinraza is facing increasing competition and its pipeline is filled with high-risk neurology drugs, led by the Alzheimer’s drug aducanumab, which has uncertain prospects.

Heading into 2020, Biogen faced two crucial questions. The biggest one is whether the Food and Drug Administration would review, and ultimately approve, aducanumab despite the mixed results it has produced in clinical testing. The other is whether a key patent covering Tecfidera, which generated $4.4 billion of its $14.4 billion in 2019 sales, would remain secure.

The two questions have significant implications for the future of Biogen. Its second top seller, the spinal muscular atrophy drug Spinraza, already faces a threat from the Novartis gene therapy Zolgensma and, likely soon, will see another rival emerge from Roche. Behind Spinraza, Biogen is largely relying on a pipeline full of risky neuroscience-focused drugs to supplement its core MS franchise. Under previous CEO George Scangos, the company jettisoned a growing hemophilia drug business in an effort to focus on that work.

As of today, both questions remain unanswered. Biogen has yet to complete an approval application for aducanumab, recently disclosing that it expects to do so later this year. And now a District Court judge has sided with Mylan and deemed its Tecfidera patents invalid, reversing what had been a string of past victories for Biogen — most recently from a challenge, also from Mylan, before the Patent Trial and Appeal Board.

Mylan has “asserted clear and convincing evidence” that the patent is invalid “for lack of written description,” judge Irene Keeley wrote, adding that Biogen failed to “adequately describe the claimed invention.” The so-called ‘514 patent is set to expire in 2028. The only other patent covering Tecfidera will expire in two days.

In an e-mailed statement to BioPharma Dive, Biogen said it is disappointed and plans to appeal the ruling.

Yet “Biogen themselves seem to acknowledge that a loss here would likely mark the beginning of the end for Tecfidera’s exclusivity,” wrote Piper Sandler analyst Christopher Raymond in a note Thursday morning.

Mylan indicated that it plans to aggressively pursue a launch as soon as possible, despite the coming appeal from Biogen. In a statement Monday afternoon, Mylan CEO Heather Bresch said the company is working with the Food and Drug Administration to speed up the targeted Nov. 16 date for potential approval of its generic Tecfidera.

Even if Biogen’s appeal delays Mylan — and it could conceivably lead to a reversal — the biotech faces multiple other patent challenges in a Delaware court. If Biogen loses those challenges, Wall Street investors will “assume very high odds” of generics emerging by mid-2021, wrote Evercore ISI analyst Umer Raffat.

That ratchets up the pressure not just on aducanumab, but Vumerity, a drug Biogen co-developed with Alkermes that is meant to be a more tolerable version of Tecfidera. It has much to prove, however: the drug, approved by the Food and Drug Administration last October, has generated just $7 million for Biogen in its first two quarters on the market. Vumerity “really isn’t all that differentiated from Tecfidera,” Stifel analyst Paul Matteis wrote.

“Given this dynamic, as well as what we see as little more than a lottery ticket with respect to the aducanumab Alzheimer’s filing/FDA review, we are hard pressed to articulate a bullish thesis,” wrote Piper analyst Raymond.

Biogen shares had fallen 5% by late Thursday morning.