Gilead, Biogen Down On Patent Rulings; Ionis, Merck, Forward Rise
Big biotechs Gilead Sciences ( GILD ) and Biogen ( BIIB ) were both trading down Wednesday morning after receiving unfavorable patent news. Late Tuesday, Ionis Pharmaceuticals ( IONS ) said that it and its big pharma partner Merck ( MRK ) had won a case alleging that Gilead’s hepatitis C virus (HCV) drug sofosbuvir, which is sold individually as Sovaldi and as an ingredient in Harvoni, infringed on patents that Ionis and Merck had obtained from earlier research. “We used our expertise in a 1998 collaboration with Merck to discover and develop modified nucleosides that benefit patients with HCV,” said Ionis CEO Stanley Crooke in the press release . The case goes back to 2013, when sofosbuvir was on the verge of FDA approval and Merck sought a 10% royalty on sales from Gilead. Gilead sought a judgment invalidating the patents, though it conceded that it had infringed them. The case went to a jury, which ruled Tuesday that the patents were in fact valid. There was no word on damages, though Ionis said that it’s entitled to 20% of the damages. Leerink analyst Geoffrey Porges said that the awards won’t be huge and that more litigating would delay them. “We continue to expect that any damages awarded in this case will be relatively modest, the equivalent of a single-digit royalty, significantly less than the 10% Merck was seeking,” Porges wrote in a research note. “In spite of whatever damages the jury awards Merck, Gilead has already indicated that it will appeal.” Ionis stock popped to an eight-week high of 46.05 early on the stock market today , though midday it was down a fraction, near 41.50. Gilead stock, though, was down more than 3% near 90, while Merck was up a fraction near 53. Patent Office Will Review Biogen’s Tecfidera Biogen stock, meanwhile, was off 1.2%, near 257, in midday trading Wednesday, after the U.S. Patent and Trademark Office (USPTO) reversed an earlier decision and decided to review a patent on Biogen’s top-selling drug, Tecfidera. Hedge-fund manager Kyle Bass filed the request for a review; last year, he launched an unusual short-selling strategy by filing such requests on a number of blockbuster drugs, which he said had “BS patents.” The USPTO initially denied his request in September, but on Tuesday it changed its tune. Coincidentally or not, European Union authorities earlier this month invalidated the European equivalent of the same patent , which expires in 2028. In addition, Forward Pharma ( FWP ) is separately challenging the patent; its stock was up 4% near 17 in midday trading Wednesday. “Today’s decision is just a first step in the (review) process, and nothing happens yet in the USA, and as of today Tecfidera still enjoys 10-year exclusivity in EU (would protect it to 2024 in EU),” wrote RBC Capital Markets analyst Michael Yee in a research note. “Even though the … patent expires in February 2028, consensus did not assume this would get full protection and already assumed/expected generics to launch at some point.”