Summary
Biogen Inc. (BIIB) announced on January 17, 2017, the execution of a binding Letter Agreement with Forward Pharma A/S and other parties, paving the way for a definitive Settlement and License Agreement. This agreement grants Biogen perpetual, irrevocable licenses for Forward Pharma's intellectual property related to multiple sclerosis treatments, with the scope of exclusivity varying between the U.S. and other global markets. A significant upfront payment of $1.25 billion will be made by Biogen to Forward Pharma upon the definitive agreement's execution.
Key Highlights
- 1Biogen enters a binding agreement with Forward Pharma to settle intellectual property disputes and secure licenses for MS treatments.
- 2A non-refundable cash payment of $1.25 billion will be made by Biogen to Forward Pharma upon execution of the definitive License Agreement.
- 3Biogen secures perpetual, irrevocable licenses for Forward Pharma's intellectual property related to multiple sclerosis treatments.
- 4The license for U.S. intellectual property is co-exclusive initially but can convert to exclusive under certain conditions.
- 5The license for intellectual property outside the U.S. (Designated Countries) is exclusive.
- 6Royalty payments to Forward Pharma are contingent on the success of Forward Pharma in specific patent proceedings (Interference and Opposition Proceedings) and the use of dimethyl fumarate (DMF) as an active ingredient.
- 7Royalty rates vary based on exclusivity in the U.S. and are tiered over time, ranging from 1% to 20% of Net Sales of applicable products.
Frequently Asked Questions
The primary purpose is to settle ongoing intellectual property disputes and grant Biogen licenses to use Forward Pharma's patents related to multiple sclerosis treatments, specifically those involving dimethyl fumarate (DMF).
Biogen will make an initial non-refundable cash payment of $1.25 billion upon the execution of the definitive License Agreement. Additionally, Biogen may be obligated to pay royalties on future sales of covered products.
No, royalty payments are contingent on Forward Pharma successfully obtaining and maintaining patent rights covering specific multiple sclerosis treatments (oral administration of 480 mg/day of DMF) through ongoing legal proceedings (Interference Proceeding in the U.S. and Opposition Proceeding in Europe).
The licenses are perpetual and irrevocable. For the U.S., it is a co-exclusive license that can become exclusive. For all other countries (Designated Countries), it is an exclusive license.