Judge wipes out Biogen's Tecfidera patent protections in suit against Mylan

In the high-stakes patent fight between Biogen and Mylan over Tecfidera’s main remaining patent, Mylan has scored a major win in federal court.

U.S. District Judge Irene Keeley said Mylan “demonstrated by clear and convincing evidence” that certain claims of Biogen’s '514 patent are invalid for “lack of written description.”

The decision threatens Biogen’s bestselling medicine with early generics; Tecfidera, a multiple sclerosis drug, generated $3.3 billion in the U.S. last year. The company's '514 patent is set to expire in 2028, meaning the decision, if upheld, could wipe out years of monopoly sales.

Biogen’s shares were down about 6% on Thursday morning on the news. A spokesman said the company is disappointed with the decision and will appeal.

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The decision comes about a week after Bernstein analyst Ronny Gal predicted Mylan would prevail after reading a transcript of post-trial arguments. Gal and his team pointed out that Judge Keeley had told Biogen’s lawyer she “has a problem” with the company’s arguments, and that she seemed to favor Mylan’s stance.  

As for next steps, RBC Capital Markets analyst Brian Abrahams sees an appeal taking about 12 months. In a note to clients before the decision, his team predicted a "clear advantage" in appeals for the winner in District Court.

Meanwhile, Biogen is also facing patent challenges in Delaware federal court. That court's decision will also factor into the ongoing efforts by generics companies to launch copycats.

RELATED: Biogen wins Tecfidera patent challenge from Mylan, sending shares way up

The decision follows a win for Biogen at the U.S. Patent & Trademark Office under the agency’s inter partes review process. On the company’s first-quarter conference call back in April, CFO Jeffrey Capello said that even if Biogen is unsuccessful defending the drug in federal court, the company has new launch Vumerity to fall back on.  

Biogen has “growth opportunities around the world,” he added, including spinal muscular atrophy drug Spinraza. The drugmaker is also looking to file controversial Alzheimer’s drug aducanumab in the third quarter.

“I think we've got a pretty strong franchise and we'll grow around it,” Capello said of a potential patent loss in court.