1 Lawsuit That Could Destroy Biogen’s Stock


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Biogen's (NASDAQ: BIIB) Tecfidera launched a year ago and has already become a blockbuster likely to notch more than $2 billion in sales this year. Much of Tecfidera's success is coming at the expense of recently launched oral multiple sclerosis drugs from Novartis (NYSE: NVS) and Sanofi (NYSE: SNY), which market Gilenya and Aubagio, respectively. As Tecfidera rolls out globally, Novartis and Sanofi are likely to lose additional market share over the coming year, but neither company is sitting still. Both are among a slate of generic drug makers that have filed opposition to a key EU patent on Tecfidera that gives Tecfidera exclusivity until 2028. In the following slideshow, you'll learn more about the patent threat to Biogen's fast growing drug and what the impact on Biogen may be if the EU's patent office sides with Novartis and Sanofi.

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1 Lawsuit That Could Destroy Biogen’s Stock

  1. 1. 1 Lawsuit That Could Destroy Biogen’s Stock
  2. 2. Biogen’s Tecfidera: Under Fire • Actavis, Mylan, Synthon, Novartis’ Hexal, and Sanofi’s Zentiva are among those challenging the validity of a Tecfidera dosing patent. – Patent covers the 240 mg 2x daily dose. – Patent extends Tecfidera’s EU patent from 2019 to 2028. – Oppositions can result in revoking or amending the patent. – Decisions typically take two to three years and are subject to appeal. Oppositions to a key EU patent have been filed.
  3. 3. What’s at stake? • Tecfidera won FDA approval in March 2013. • Tecfidera is launching in the EU this year. • Q1 sales of Tecfidera totaled more than $500 million. • Up from $192 million in Q2, 2013. • Tecfidera is already No. 1 in the U.S. among oral MS drugs. • 70% of patients on Tecfidera switched from other MS therapies.
  4. 4. What’s at stake? • $460 million of Tecfidera’s Q1 sales were in the U.S. • EU sales will be ramping through 2015. • Peak sales of Tecfidera could exceed $3 billion annually. • Express Scripts estimates MS drug spending will grow ~12% annually through 2016.
  5. 5. Competitive landscape • Tecfidera is the 3rd oral MS drug to win approval. • Novartis’ Gilenya is the global oral MS drug leader. • Q2 sales of $606 million, up 28% ex-currency. • Novartis’ dominance will erode as Tecfidera wins EU market share. • Sanofi’s Aubagio also competes for oral MS market share. • Q1 sales of $78 million, up 290%.
  6. 6. Challenging Tecfidera • Hexal is Novartis’ generic unit.  Invalidating Tecfidera’s patent could allow for generic launches sooner.  A generic would help protect Novartis’ overall oral MS market share over time. • Zentiva is Sanofi’s generic unit.  3rd largest generic maker in Europe.  Opposition to Tecfidera’s patent was filed on February 14th.
  7. 7. Defending Tecfidera Biogen will need to answer these oppositions within four to six months in an oral hearing, during which all those in opposition will attend. • Opposition claims that 240 mg 2x daily dosing was disclosed in documents prior to Biogen filing for the 2028 patent. • Opposition challenges that the scope of invention warrants the patent extension. • Industry expects EU generic threat in 2024 (10 years post- launch) if patent is invalidated.
  8. 8. Fool-worthy thoughts •Biogen’s reply to opposition should come by this fall. •Decision from the EU patent office could take years. •Any decision can be appealed. •Even if repealed, Tecfidera’s product patent doesn’t expire until 2019 and would likely remain protected until 2024. •New MS drug launches could ultimately minimize the impact to Biogen if Biogen wins approval for more effective, next-generation MS treatments. • Studying daclizumab for relapsing MS in phase 3 trials. • Studying ANTI-LINGO for the treatment of MS in phase 2 trials.
  9. 9. .Leaked: This coming blockbuster will make Biogen jealous.