Shares of the Cambridge, Mass., company at last check were down 2.5% to $264.13.
Analyst Carter Gould, who also slashed his Biogen price target to $280 from $370, said in a note to investors that the decision raises the likely prospect that generics will launch in 2021, threatening a third of Biogen's free cash flow
"The invalidation of the ‘514 patent by the West Virginia District Court will be appealed," Gould said. But "the decision raises the odds of another adverse ruling from a pending Delaware case involving multiple [Abbreviated New Drug Application] filers.
"Biogen may ultimately dodge these challengers, but we think it’s more likely an at-risk launch emerges between now and mid-2021, and we’re skeptical Biogen can deflect the impact meaningfully."
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.
Gould also said his conviction about aducanumab, a human monoclonal antibody that treats Alzheimer's disease, "has waned in the wake of delays, a lack of clarity around points of discussion with [the] FDA, and a seemingly less confident stance" on the drug.
Separately, RBC Capital analyst Brian Abrahams lowered the firm's price target on Biogen to $273 from $303, while keeping a sector perform rating on the shares.
Abrahams said the company will be able to do little to stop generic Tecfidera from entering the market in the near term, "perhaps even by 2021."