Danish biopharmaceutical company, Forward Pharma, has settled with Biogen and certain other parties, and will receive $1.25 billion related to a license agreement.
The agreement, which included two Biogen’s subsidiaries, will have to pass Forward’s shareholders’ approval and certain other limited customary conditions.
Besides a non-refundable cash fee of $1.25 billion, Biogen will, under certain circumstances, also pay Forward royalties of up to 10-20% of net sales of Biogen products. One of the products is a multiple-sclerosis drug Tecfidera, the company said in Thusday’s press release.
The License Agreement does not cover the issues between Forward and Biogen that is currently pending at the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office or the opposition proceeding against Forward’s European patent EP 2801355. Biogen and Forward intend to permit the PTAB and the U.S. Court of Appeals for the Federal Circuit, as applicable, and the European Patent Office and the Technical Board of Appeal and the Enlarged Board of Appeal, as applicable, to make final determinations in the proceedings before them. The non-refundable fee of $1.25 billion to be paid by Biogen is not conditional on the outcome of either proceeding.
If Forward obtains patent rights in the U.S. for Tecfidera, Biogen will pay Forward royalties in the U.S. If royalties are payable in the U.S. and Biogen holds an exclusive license, a royalty of 10% will be payable from January 1, 2021 to December 31, 2028 and a royalty of 20% will be payable from January 1, 2029 until the earlier of the expiration.
If Forward secures similar patent rights in other countries for the product, Biogen will pay Forward royalties in countries other than the U.S. If royalties are payable in countries other than the U.S., a royalty of 10% of Net Sales of applicable infringing products will be payable on a country-by-country basis, from January 1, 2021 to December 31, 2028, and a royalty of 20% will be payable on a country-by-country basis from January 1, 2029 until the earlier of the expiration.
“We are excited to enter into this agreement with Biogen and believe it is in the best interests of Forward shareholders. This agreement limits our downside risk should we not be successful in either the US or European proceedings and it provides clarity as to our royalty stream should we be successful in either or both of those proceedings. We continue to believe in the strength of Forward’s positions in the pending proceedings and this settlement allows those cases to continue to move forward to final decisions while delivering Forward an immediate cash payment of $1.25 billion”, said Florian Schönharting, Chairman of the Board of Directors of Forward.
Also, the $1.25 billion cash payment made to Forward by Biogen will be subject to a Danish corporate tax of 22%.