Biogen to Pay Forward $1.25 Billion in Settlement

Knobbe Martens
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Knobbe Martens Olson & Bear LLP

Forward Pharma A/S (“Forward”) recently announced that a necessary super majority of its shareholders have approved a settlement of various patent disputes with two wholly-owned subsidiaries of Biogen Inc. (“Biogen”) in which Forward will receive USD $1.25 billion cash from Biogen.  77% of the voting shareholders voted in favor of accepting the settlement agreement.

Founded in 2005, Forward, a Danish biopharmaceutical company, develops pharmaceutical treatments for patients with neurological conditions such as multiple sclerosis.  The company reports that it is currently conducting Phase 1 clinical trials for its formulation of dimethyl fumarate (DMF).

Boston, Massachusetts-based Biogen, founded in 1978, is also a biopharmaceutical company specializing in treatments for multiple sclerosis and other neurological conditions and rare genetic disorders.  Biogen developed and now markets an oral multiple sclerosis medication (a DMF therapy) under the trade name TECFIDERA™ for which FDA approval was obtained in early 2013.

Forward and Biogen have been engaged in patent disputes before tribunals in the US and Europe since at least 2014.  As exemplified by its suit for patent infringement brought in Germany, Forward alleges that Biogen infringes certain of Forward’s patents  relating to oral DMF therapies for the treatment of multiple sclerosis.  Forward has also brought an interference proceeding (seeking priority over Biogen’s patent to DMF therapy) in the U.S. Patent and Trademark Office (“USPTO”), and multiple opposition proceedings in the European Patent Office (“EPO”).  Under the terms of the settlement agreement, one of the EPO oppositions and the patent infringement suit will be terminated, but the USPTO interference proceeding and the other EPO opposition will be allowed to continue to a final determination of patentability (appeals included).

In addition to the up-front cash payment it agreed to pay Forward, Biogen will pay royalties (10–20%) on U.S. and non-U.S. sales of its orally administered DMF products, but only if Forward successfully obtains patent rights covering those treatment methods as a result of the USPTO and EPO proceedings referenced above.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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