Earlier this year, Biogen (NASDAQ: BIIB) dodged a bullet when it won a patent challenge to its multiple sclerosis (MS) drug, Tecfidera, in a lawsuit brought before the U.S. Patent Trial and Appeal Board by Mylan (NASDAQ: MYL). Had Biogen lost this lawsuit, it would have meant serious trouble for the company since Tecfidera is currently its best-selling product.
Given this factor, it isn't surprising that Biogen's shares soared by a double-digit percentage on the heels of this significant win. And while the company has given up some of these gains since, Biogen's stock is still up by 7.6% year to date, which compares favorably to the performance of the S&P 500, which is down by 13.4% since the beginning of the year. However, Biogen will keep facing headwinds moving forward, and the company is far from being out of the woods. Is now a good time to buy shares of this company?
During the fourth quarter, Biogen recorded $1.2 billion in revenue from Tecfidera, representing a 5% year-over-year increase. Revenue from Tecfidera accounted for about 40% of the company's total revenue, and its second-best-selling product, spinal muscular atrophy treatment Spinraza, brought in $543 million in revenue. While sales of Spinraza have been increasing at a good clip (they increased by 16% year over year during the fourth quarter), Tecfidera remains Biogen's most lucrative cash cow, hence the importance of keeping the competition at bay.