Shares in Danish drugs group Forward Pharma A/S (NASDAQ:FWP) skyrocketed in early deals on Tuesday after it announced a massive licensing deal with fellow drug developer Biogen Inc (NASDAQ:BIIB).
Biogen will pay US$1.25bn in cash to license Forward’s patents, which cover various multiple sclerosis drugs including Biogen’s flagship drug, Tecfidera.
Tecfidera generated more than US$1bn in sales on its own in the latest quarter – roughly a third of Biogen’s total sales in the period.
"We believe this agreement will clarify and strengthen our intellectual property for Tecfidera," said Biogen chief executive Michel Vounatsos in a statement.
The two parties have recently been locked in a dispute over the patents for dimethyl fumarate, which is a key ingredient in several MS drugs.
Biogen said today’s agreement would not resolve the dispute, although a decision on the matter is expected by the middle of this year.
The result of the patent cases will affect whether or not Biogen has to pay Forward royalties, Biogen said.
Shares in Biogen posted a modest gain of US$0.42c to US$285.17, while Forward shares boomed more than 53% higher to US$28.12.