Biogen and Forward Pharma agree to enter into settlement and license agreement.
Biogen Inc. announced that it has agreed to enter into a settlement and license agreement with Forward Pharma, subject to the approval of Forward Pharma’s shareholders and other customary conditions. The license agreement will provide Biogen an irrevocable license to all intellectual property owned by Forward Pharma.
Upon the effectiveness of the settlement and license agreement, Biogen will provide Forward Pharma a cash payment of $1.25 billion. Under certain circumstances outlined in the agreement, Biogen will pay Forward Pharma royalties on net sales of Biogen products for the treatment of multiple sclerosis that are covered by a Forward Pharma patent and have dimethyl fumarate (DMF) as an active pharmaceutical ingredient.
“We are very pleased to have reached this settlement with Forward Pharma. We believe this agreement will clarify and strengthen our intellectual property for TECFIDERA, the leading oral therapy for multiple sclerosis,” said Michel Vounatsos, chief executive officer of Biogen.
The settlement and license agreement does not resolve the issues pending in the ongoing Interference Proceeding in the U.S. or the Opposition Proceeding in the EU. Biogen and Forward Pharma intend to permit the Patent Trial and Appeal Board (PTAB), the U.S. 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.
Summary of Details and Conditions of the Agreement
The agreement to enter into a settlement and license agreement was reached between Biogen’s wholly owned subsidiaries, Biogen Swiss Manufacturing GmbH and Biogen International Holding Ltd., and Forward Pharma A/S, a Danish limited liability company and additional related parties and is subject to the approval of Forward Pharma’s shareholders and other customary conditions.
The approval of two-thirds of Forward Pharma’s voting share capital is required to approve the License Agreement. Shareholders representing approximately 77% of Forward Pharma’s voting share capital have irrevocably agreed to vote in favor of the License Agreement. Forward Pharma has agreed to convene an extraordinary general meeting on February 1, 2017 to obtain the approval of its shareholders.
The license agreement will have a perpetual term and provide for the grant to Biogen of an irrevocable, co-exclusive license to all intellectual property owned by Forward Pharma in the U.S. . The co-exclusive U.S. 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 provide for the grant to Biogen of an irrevocable, exclusive license to all intellectual owned by Forward Pharma anywhere else in the world.
Upon the execution and delivery of the license agreement, Biogen will pay Forward Pharma a non-refundable cash payment of $1.25 billion which will not affect Biogen’s 2016 Non-GAAP financial results. Under certain circumstances, Biogen will also be obligated to pay Forward Pharma future royalties on net sales of Biogen products for the treatment of multiple sclerosis that are covered by a Forward Pharma patent and have dimethyl fumarate as an active pharmaceutical ingredient.
Biogen will only be obligated to pay Forward Pharma royalties in the U.S. if Forward Pharma obtains patent rights covering treatment of a human for multiple sclerosis by orally administering 480 mg per day of DMF arising from the interference proceeding between the company and Forward Pharma that is currently pending at the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (interference proceeding).
If royalties are payable in the U.S. and Biogen holds a co-exclusive license, a royalty of 1% will be payable from January 1, 2023 until the earlier of the expiration, unenforceability or invalidation of the patents included in the U.S. Licensed Intellectual Property. If Biogen holds an exclusive license, a royalty of 10% will be payable from January 1, 2021 to December 31, 2028 and a royalty of 20% will be payable from January 1, 2029 until the earlier of the expiration, unenforceability or invalidation of the patents included in the U.S. Licensed Intellectual Property.
Biogen will only be obligated to pay Forward Pharma royalties in countries other than the U.S. if Forward Pharma obtains patent rights covering treatment of a human for multiple sclerosis by orally administering 480 mg per day of DMF in the opposition proceeding against Forward Pharma’s European patent EP 2801355 (opposition proceeding). If royalties are payable in countries other than the U.S., a royalty of 10% of 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 royalty of 20% 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.
The license agreement does not resolve the issues pending in the interference proceeding or the opposition proceeding. Biogen and Forward Pharma intend to permit the PTAB and the U.S. Court of Appeals for the Federal Circuit, as applicable, and the European Patent Office and the Technical Board of Appeal and the Enlarged Board of Appeal, as applicable, to make a final determination in the proceedings before them.
(Source: Business Wire)
