Two pharmaceutical companies—Acorda Therapeutics and Forward Pharma—recently saw their stocks drop by 20% each after they notified investors that they had lost their respective patent cases.
Forward Pharma loses case against Biogen Inc.
Forward Pharma had been embroiled in a patent interference case with Biogen Inc. for quite some time. The case centered on the drug Tecfidera, a multiple sclerosis treatment marketed by Biogen. Forward Pharma alleged that Tecfidera infringed on its patents for dimethyl fumarate, a key active ingredient in Biogen’s drug.
Biogen had apparently not been overconfident in the merits of its case—back in January, Biogen agreed to pay Forward Pharma an upfront fee of $1.25 billion. In addition, the company agreed to pay a royalty of 10% between 2021 and 2028, and a royalty of 20% from 2029 until the date of the patent expiration. However, this licensing agreement was contingent upon Biogen losing the case.
But much to the dismay of Forward Pharma, the US Patent Trial and Appeal board (PTAB) ruled that Biogen’s patents were valid and didn’t infringe upon Forward Pharma’s patents, invalidating the agreement.
Acorda Therapeutics has four of five patents for flagship drug invalidated.
On the same day that Forward Pharma’s investors got the bad news, Acorda Therapeutics had an even more disappointing day in court.
Acorda had sued several competitors—Teva Pharmaceuticals, Mylan Pharmaceuticals, and Roxane Laboratories—that sought to release a generic version of Acorda’s Ampyra, a multiple sclerosis treatment that accounted for 95% of Acorda’s revenue in 2016. Ten companies had expressed interest in marketing generic versions of Ampyra, and seven had entered into licensing agreements. However, Teva, Mylan, and Roxane refused to do so, and instead chose to challenge Acorda’s patents, prompting the lawsuit.
Ultimately, a federal judge ruled that four of the five patents—which covered methods of administration, a common means of extending the lifespan of a drug patents—were invalid. The nullified patents would have protected Ampyra until 2027. Instead, the sole surviving patent, which covers an extended-release formulation of Ampyra, will only protect Acorda against generic competition until 2018.
How Forward Pharma and Acorda Therapeutics will appeal, but also have patent options.
Forward and Acorda will almost certainly appeal the rulings on legal grounds. However, it’s worthwhile to consider what options the USPTO may have to offer for the two embattled companies.
In the case of Acorda, if they implemented a well-planned patent strategy, then they will also have continuation patent applications pending that will allow for other options. Continuation patent applications are essentially arguments filed with the USPTO which make claims for broader patent protections than those granted by the original patent examiner. With a pending continuation patent claim, Acorda could essentially move the goalposts, working around the court rulings to find newly patentable aspects of the drugs.
However, the way forward for Forward Pharma is a bit more challenging. In 2015, the PTAB declared an interference between Forward’s and Biogen’s patents for MS drugs based on dimethyl fumarate. As the linked press release explains, an interference (also known as a priority contest) is a proceeding that occurs when multiple parties have patents covering the same product or process, and the USPTO must determine which party has true claim to the invention.
As of 2013, priority is determined by which party files their patent application first. However, prior to the United States’ adoption of the first-to-file system, the USPTO relied on a first-to-invent system. Because Forward’s and Biogen’s patents originated before 2013, the USPTO determined priority by virtue of which party invented the drug first, regardless of the filing dates. Ultimately, the USPTO determined that Biogen was the first to create the drug, and thus that its patents were valid.
In this case, Forward Pharma would not have benefitted from filing a continuation patent application, as they simply weren’t the first to create the drug. But, this case does illustrate why it’s critical for pharmaceutical companies and other inventors—under the current first-to-file system—to file a provisional patent application as soon as possible.