Please ensure Javascript is enabled for purposes of website accessibility

Why Acorda Therapeutics Inc and Forward Pharma A/S Got Crushed Today

By Brian Orelli, PhD - Updated Mar 31, 2017 at 5:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Patent battles end poorly for both companies.

What happened

Forward Pharma (FWP 8.25%) ended the day down 19.9% while Acorda Therapeutics (ACOR 13.64%) didn't fare any better, down 21.5%, after investors received word that the companies had lost separate patent battles.

So what

A U.S. patent board ruled against Forward Pharma's claim that Biogen's (BIIB 2.46%) multiple sclerosis drug Tecfidera infringed on patents held by Forward Pharma.

In January, Forward Pharma and Biogen agreed to a settlement with a twist. Biogen agreed to pay Forward Pharma $1.25 billion upfront and to pay a royalty of 10% from January 1, 2021 to December 31, 2028, and a royalty of 20% from January 1, 2029 until the patent expired, assuming it had an exclusive right to Forward Pharma's patent.

Courthouse building

Image source: Getty Images.

But -- and here's the twist -- rather than the settlement ending the matter, the companies agreed to allow the patent dispute to continue, and the royalties only have to be paid if Forward Pharma wins the dispute.

Separately, Acorda Therapeutics announced that the U.S. District Court invalidated four of its patents covering its multiple sclerosis drug Ampyra. The court upheld one patent, but it expires in July of next year, leading to the potential for a generic launch at that point instead of 2027, when the last patent would have expired.

Now what

While these news items were big blows to Forward Pharma and Acorda Therapeutics, the fight isn't over. Acorda said in a statement that it plans to appeal the decision, and presumably, Forward Pharma will do the same.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Forward Pharma A/S Stock Quote
Forward Pharma A/S
$5.41 (8.25%) $0.41
Biogen Inc. Stock Quote
Biogen Inc.
$199.11 (2.46%) $4.79
Acorda Therapeutics, Inc. Stock Quote
Acorda Therapeutics, Inc.
$0.74 (13.64%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.