Is Tecfidera’s patent win a pyrrhic victory for Biogen?

Views & Analysis

Shares in Biogen jumped last week after the company successfully defended its blockbuster MS drug Tecfidera from a patent challenge – but will the boost mean much when the company still faces an uncertain future?

Biogen’s Q4 results came in stronger than expected when they were posted at the end of January, buoyed by robust sales for key drugs and falling costs in admin and R&D.

Full year total revenues were $14.4 billion, a 7% increase versus the prior year, driven by growth in all of the company’s core business areas.

Multiple sclerosis (MS) revenues increased 2% versus the prior year to $9.2 billion; revenues for newly-launched spinal muscular atrophy treatment drug Spinraza (nusinersen) increased 22% to $2 billion, and full year biosimilars revenues increased 35% to $738 million.

Just a few days later, there was good news for the company when the US’ Patent Trial and Appeal Board agreed to uphold the validity of the patent on its blockbuster MS drug Tecfidera (dimethyl fumarate), denying a call by Mylan that it should be invalidated on the grounds of obviousness.

“The recent Biogen ruling is a very public display of the strength of a particular patent and the competitor and investor community will see that,” commented Richard Gibbs, managing partner of Marks & Clerk’s Glasgow office. “The jump in share price is a real-life pointer to the fact that investors gain a huge amount of confidence in demonstrably strong and enforceable IP.”

But these boosts come within the context of a more competitive MS market and no clear keystone drug in Biogen’s future – aside from a somewhat hail-mary approach for its revived Alzheimer's medicine aducanumab.

Protecting patents

IP attorney Brian Slater, who previously represented Forward Pharma in its own Tecfidera IP dispute, told pharmaphorum that the outcome of the patent challenge was “not unexpected”.

Mylan had argued that the patent in the dispute lacked novelty because the active ingredient in Tecfidera, fumarate, had been known about for years and the dosage form covered was predictable.

Biogen’s defence hinged on trials showing a variation of the effects of the drug at different dosage levels, which it said showed the effects of the drug were unexpected and far from predictable.

“While Mylan raised some interesting arguments based on the 360 mg/day DMF dose that Biogen had previously tested, ultimately they were unable to persuade the Board that the 360 mg/day dose would have been understood by a skilled person to be efficacious in treating MS,” Slater said.

The ruling means that Biogen should now have protection from generic competition to Tecfidera in the US until 2028, protecting a product that accounted for $4.4 billion out of total sales of $14.4 billion in 2019.

Mylan has said it is considering an appeal, but Slater notes that it is unlikely anything will come of this.

“Based on general statistics in these types of cases, Mylan faces low odds of overturning the decision on appeal and will now have to hope it can invalidate the ‘514 patent in ongoing district court litigation.”

The last patent dispute came in 2017, when Biogen fended off a challenge from Forward Pharma by striking an unusual deal with the Danish firm.

Biogen agreed to pay Denmark’s Forward Pharma $1.25 billion upfront, and under a licence agreement may pay future royalties from Tecfidera dependent on ongoing patent cases in US and EU.

The patents cover sales of Biogen products for MS that are covered by a Forward Pharma patent and have dimethyl fumarate as an active pharmaceutical ingredient.

Shaky ground?

While the protection of Tecfidera is a boon, it may actually mean little in the long run. The drug’s sales were already slowing down as a result of competition from newer MS therapies like Roche’s Ocrevus (ocrelizumab), Novartis’ Mayzent (siponimod) and Merck KGaA’s Mavenclad (cladribine).

Growth last year was 4%, well down on historical highs and propped up by price rises.

The company has a follow-up product, Vumerity (diroximel fumarate), but it has failed to make much impact. Its fourth quarter sales were just $5 million, although Biogen chief executive Michel Vounatsos said initial take-up was encouraging.

Biogen has attracted criticism for its decision to launch the drug at $88,000 per year in the US, with the National MS Society saying it showed a lack of commitment to “affordable access”.

Tecfidera, then, still carries the burden of needing to bring in substantial sales as Biogen tries to launch new products and diversify its revenue mix – a challenge accentuated by the fact that the company’s top near-term prospect is its extremely high-risk Alzheimer's disease candidate aducanumab.

Alzheimer's is a notoriously difficult disease to develop drugs for, and there have been many high-profile R&D failures from big pharma over the last few years.

Aducanumab itself originally had its phase 3 development axed in March 2019, after Biogen decided that it wasn’t working. However, the company stunned markets in October by announcing plans for a filing after seeing what looks like a beneficial effect in certain patients at a high dose.

Many are still sceptical, however, that this drug will really be the one to buck the trend, and there are serious doubts about whether the FDA will approve the drug.

Nevertheless Biogen is gearing up to file it with the regulator and is already looking ahead to a potential launch.

The FDA has even approved a re-dosing study for Alzheimer’s patients formerly enrolled on the abandoned trials, and could start receiving the drug again as early as March.

If aducanumab is rejected, though, Biogen is likely to see its already-volatile share prices crumble further.

It may even make the company a likely candidate for a takeover – perhaps from a bigger firm looking for revenues from its already-approved neurology medicines.