Biogen (BIIB) - Get Report shares fell and Mylan (MYL) - Get Report shares rose Thursday after a U.S. district court judge ruled in favor of the generic drugmaker regarding the patent for Biogen’s booming multiple sclerosis drug Tecfidera.
The court in West Virginia determined that Mylan proved claims for Biogen’s patent are invalid for “lack of written description.”
Tecfidera has powered much of Biogen’s growth since its launch seven years ago. The drug produced sales of $4.43 billion last year, making up almost one-third of the company’s revenue, Reuters reported.
Just last week, Sanford Bernstein analyst Ronny Gal downgraded Biogen to market perform from outperform, predicting Biogen would lose the court battle. He estimated that competition from generic drugmakers on Tecfidera could bite into Biogen’s total revenue to the tune of 20% in 2021.
A victory by Mylan in the court case could lead it to start a generic as soon as the Food and Drug Administration approves its pending application, Gal said.
Morningstar analyst Soo Romanoff wrote last month that Mylan was stuck in a holding pattern.“
Mylan reported first-quarter results that were largely "noneventful,” he said.
"Barring large industry fluctuations, we anticipate much of the same until the company closes its proposed merger with Pfizer’s generic arm in the second half of the fiscal year.”
Biogen shares recently traded at $267.28, down 5.04%. They have sunk 12% over the last three months, compared to a 23% gain for the S&P.
Mylan shares trade at $16.62, up 4.07%, and have risen 7% over the last three months.