Biogen to pay out $1.25 billion to settle Tecfidera patent dispute

Danish biopharma a company Forward Pharma (Nasdaq: FWP) has entered into a binding agreement with two wholly-owned subsidiaries of Biogen (Nasdaq: BIIB) on a settlement and license agreement, with the news sending Forward’s sharing surged 61% to $29.59 in premarket trading on Tuesday.

US biotech major Biogen will pay Forward a non-refundable cash fee of $1.25 billion in connection with the execution and delivery of the license agreement. Under certain circumstances, Biogen will also be obligated to pay Forward royalties of up to 10%-20% of net sales of Biogen products, including Tecfidera (dimethyl fumarate), approved for the treatment of multiple sclerosis that are covered by a Forward patent and have dimethyl fumarate (DMF) as an active pharmaceutical ingredient.

Tecfidera generated sales of $1.03 billion in the third quarter of 2016, accounting for about a third of Biogen's sales in the period.