Biogen has agreed to a settlement and license agreement with Forward Pharma, a Copenhagen, Denmark-headquartered biopharmaceutical company, with respect to a patent dispute over intellectual property covering dimethyl fumarate, the active ingredient in Biogen’s multiple sclerosis (MS) drug, Tecfidera.

Under the proposed settlement, Biogen will pay Forward Pharma $1.25 billion for an irrevocable license to all intellectual property owned by Forward Pharma. Under certain circumstances outlined in the agreement, Biogen will pay Forward Pharma royalties on net sales of Biogen products for the treatment of MS that are covered by a Forward Pharma patent and have dimethyl fumarate as an active pharmaceutical ingredient.

The settlement and license agreement, which are subject to the approval of Forward Pharma’s shareholders and other customary conditions, was reached through Biogen’s wholly owned subsidiaries, Biogen Swiss Manufacturing GmbH and Biogen International Holding Ltd. The license agreement will have a perpetual term and will grant Biogen an irrevocable, co-exclusive license to all intellectual property owned by Forward Pharma in the US. The co-exclusive US license may be converted into an irrevocable exclusive license subject to the conditions in the license agreement, which include the absence of legal restraints and the receipt of all necessary regulatory approvals. The license agreement will also grant Biogen an irrevocable, exclusive license to all intellectual property owned by Forward Pharma anywhere else in the world.

The conditions outlining US royalties to Forward Pharma are as follows: Biogen will only be obligated to pay Forward Pharma royalties in the US if Forward Pharma obtains patent rights covering treatment of a human for MS by orally administering 480 mg per day of dimethyl fumarate arising from an interference proceeding between Biogen and Forward Pharma that is currently pending at the Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office. If royalties are payable in the US and Biogen holds a co-exclusive license, a 1% royalty will be payable from January 1, 2023 until the earlier of the expiration, unenforceability, or invalidation of the patents included in the US licensed intellectual property. If Biogen holds an exclusive license, a 10% royalty will be payable from January 1, 2021 to December 31, 2028 and a 20% royalty will be payable from January 1, 2029 until the earlier of the expiration, unenforceability, or invalidation of the patents included in the US licensed intellectual property.

Outside the US, the conditions outlining royalties to Forward Pharma are as follows: Biogen will only be obligated to pay Forward Pharma royalties in countries other than the US if Forward Pharma obtains patent rights covering treatment of a human for MS by orally administering 480 mg per day of dimethyl fumarate in an opposition proceeding against Forward Pharma’s European patent, EP2801355, which relates to controlled-release pharmaceutical compositions comprising a fumaric acid ester(s) as active substances. If royalties are payable in countries other than the US, a 10% royalty on net sales of applicable infringing products will be payable on a country-by-country basis from January 1, 2021 to December 31, 2028, and a 20% royalty will be payable on a country-by-country basis from January 1, 2029 until the earlier of the expiration, unenforceability, or invalidation of the patents included in the designated countries licensed intellectual property in each country.

This settlement and license agreement does not resolve issues pending in the ongoing interference proceeding in the US or the opposition proceeding in the European Union. Biogen and Forward Pharma intend to permit the PTAB, the US Court of Appeals for the Federal Circuit, the European Patent Office, and the Technical Board of Appeal and the Enlarged Board of Appeal, make a final determination in the proceedings before them.

Source: Biogen