Defending its blockbuster multiple sclerosis drug Tecfidera from generics hasn’t been easy for Biogen lately, and the painful trend continued this week with a court ruling that clears the way for more copycat drugs to launch.
After the Delaware patent court loss this week, multiple generics will likely roll out soon, Bernstein analyst Ronny Gal predicts—and when they do, they’ll siphon off most of Tecfidera’s $3 billion-plus in U.S. sales.
Biogen’s multibillion-dollar drug could have fared reasonably well against one or two generics, Gal wrote this week, but “the launch of several generics simultaneously will likely turn this market into a commodity generic,” causing prices to fall steeply.
The Delaware decision comes after a West Virginia court ruled against Biogen in June. After Mylan won a full generic approval from the FDA, the generic drugmaker launched its copycat despite the risk that BIogen might win on appeal.
Already, four or five other companies have tentative generic approvals and could launch after securing final FDA nods, Gal pointed out. Tecfidera pulled in $3.3 billion in the U.S. last year, the majority of which will now “probably be lost,” Gal wrote.
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Cost cuts at Biogen could follow. In court documents, the company laid out plans to make “painful” cuts if it lost the case, Gal wrote. But because Tecfidera has a high margin and limited direct R&D spending, the analyst said any direct cost cuts should be “modest” and that the company “will cut marginal costs elsewhere.”
A Biogen spokesman said the company is “disappointed” and will appeal. The company has “transformed” MS treatment over the span of more than two decades, he added, and “remains committed to advancing” treatment.
The Tecfidera losses will also prompt the company to pivot to follow-up multiple drug Vumerity. That drug has yet to take off, generating just $11 million in the U.S. during the first half of the year.
RELATED: Mylan’s Tecfidera generic launch jolts Biogen, putting billions at stake
In ruling against Biogen in Delaware, the judge largely relied on that prior decision from West Virginia because she felt that court in did a thorough job, Gal said in a synopsis. Biogen is appealing the loss in West Virginia, but Gal notes the rate of reversals is about 20%. His team sees “no reason for deviation here.”
Looking forward, Biogen now has even more on the line with aducanumab, its controversial Alzheimer’s disease drug candidate. The drugmaker last year cancelled a phase 3 trial on the drug, but later said a larger data analysis warranted an FDA application. The FDA accepted the company’s application last month and set a decision date for March 7, 2021.
