NVS - Will Biogen's Big Patent Victory Ease Investor Worries About Its Alzheimer's Drug?
Biogen (NASDAQ: BIIB) shares surged as much as 32% on Wednesday after the company won a patent challenge to its billion-dollar multiple sclerosis (MS) drug, Tecfidera. The stock finally closed 18% higher and has since gained 1.5%. The U.S. Patent and Trademark Office's patent trial and appeal board ruled in favor of Biogen in the case brought by generic-drug maker Mylan (NASDAQ: MYL). Unless an appeal by Mylan or other ongoing patent challenges results in a different ruling, this means Biogen can stave off Tecfidera competition until patent expiration in 2028.
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Any patent victory is good news, but this one is particularly significant since Tecfidera, generating $1.2 billion in revenue in the latest quarter, made up 40% of total product revenue. Though Tecfidera is a leader, the MS market is crowded, with the drug facing competition from Roche's (OTC: RHHBY) Ocrevus and Novartis's (NYSE: NVS) Gilenya, among others. Tecfidera generates $4.4 billion per year, while those two competitors generate $3.8 billion and $3.2 billion, respectively. Though this patent win lifts one gray cloud that was hanging over Biogen, others remain: Mylan reportedly plans to appeal the decision. The generic-drug maker also is currently challenging Tecfidera in a West Virginia federal court, and other companies are challenging the patent in Delaware.