(Reuters) - Biogen Inc said on Monday it has licensed Alkermes Plc’s multiple sclerosis (MS) drug, further boosting its position in the race for the next treatment amid slowing sales of its own flagship MS drug, Tecfidera.
Biogen’s deal to buy the rights to develop and market Alkermes’ MS drug comes after the drugmaker in January licensed Danish company Forward Pharma A/S’s drug patents covering the same condition for $1.25 billion.
Sales of Tecfidera, Biogen’s bestselling MS drug, has slowed amid stiff competition from Roche AG’s Ocrevus and Sanofi SA’s Aubagio. Multiple sclerosis is a disabling disease of the brain and spinal cord.
Biogen’s deal with Alkermes is a “defensive play” that could better position the Tecfidera franchise in the long term in an increasingly competitive space, and for a relatively modest cost, RBC Capital Markets analyst Brian Abrahams said.
He said he did not view Alkermes’ drug as a major competitive threat to Tecfidera, but it could have the potential to help Biogen retain some market share.
Biogen said it will reimburse Alkermes half of the expenses it incurred this year to develop the drug and will pay all expenses from next year for the drug, which is in late-stage studies.
Alkermes is also eligible to receive milestone-based payments of about $200 million, including an initial $50 million this year, as well as royalties on the drug’s sales.
Alkermes’ drug, ALKS 8700, is also being separately tested for its ability to irritate the gastrointestinal functions less than Tecfidera. Data from this study is expected in the first half of 2018.
Biogen’s shares were little changed in early trading on Monday, while Alkermes dipped 0.7 percent.
Reporting by Divya Grover in Bengaluru; Editing by Savio D'Souza