Forward Pharma Loses Patent Appeal Trial

Forward Pharma (NASDAQ:FWP) announced on Wednesday (October 24) that it has lost a patent court appeal and will lose out on royalty payments.

The appeal was against Biogen’s (NASDAQ:BIIB) drug Tecfidera, which Forward claims was breaking the term of its patent for the active ingredient dimethyl fumarate (DMF). Forward will lose out future royalty payments for Biogen’s commercial product in the US. Biogen agreed to pay this in January 2017, had the patent been settled in Forward’s favor.

The decision from the US Court of Appeals for the Federal Circuit, which was ruled on Wednesday, had appealed the Patent Trial and Appeal Board’s decision (PTAB) from March 2017.

Forward’s CEO Dr. Claus Bo Svendsen said he is disappointed with the Federal Circuit’s decision to affirm the previous ruling. The company is exploring options for cost optimisation to continue with its current financing strategy.

“A positive outcome from the Interference after exhaustion of all appeals is among the conditions that must be satisfied for future royalties from the net sales of Tecfidera in the United States to be payable to Forward,” Svendsen said in the release.

The company’s appeal for its ongoing European patent is continuing as planned.

Forward began developing its DMF product for inflammation and neurological indications. The company’s patent covers the method of treating multiple sclerosis (MS) with a 480 mg per day dose of the drug. This is the approved dose of Tecfidera treating the indication.

Tecfidera is Biogen’s leading oral therapy for MS in the US. For the full year 2017, Tecfidera’s revenue was US$4.2 billion, which increased six percent from 2016.

Though this leaves Forward missing out on the US-based royalty payments, there’s still room for EU royalty payments, depending on how the decision of the patent plays out.

Biogen is a multinational biotech company which develops therapies for neurological, autoimmune and rare diseases. The company has leading products in MS, and hemophilia therapies.

Forward is a Denmark-based pharmaceutical company with DMF as the company’s proprietary formulation and intellectual property.

Investor takeaway

Forward’s stock price decreased over 11 percent throughout the trading period Wednesday, leaving it at US$1.90.

Biogen’s share price also decreased, by 4.46 percent, to close at US$302.05 over the same trading period.

According to TipRanks, five analysts have issued notes to investors on Wednesday. While price targets are similar for the company, the positions vary from “Buy” to “Hold” from the analysts. Most analysts based their recommendations on Biogen releasing its Q3 2018 financial results on Tuesday (October 23).

Looking ahead, investors can hear from Forward’s appeal of its European patent opposition through the company’s press releases.

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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.