The current score in the Duchenne muscular dystrophy patent battle sits at:

BioMarin Pharmaceuticals (NASDAQ: BMRN): 2

Sarepta Therapeutics (NASDAQ: SRPT): 1

This isn't your typical patent battle between a branded drugmaker and a generic drugmaker trying to make a copycat; both BioMarin and Sarepta are developing branded drugs for Duchenne muscular dystrophy. Instead, the argument is over patents that cover the use of drugs to treat Duchenne muscular dystrophy by skipping exons to partially fix the mutations that cause the disease.

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The mutation in the grey exon is skipped, creating a more-complete protein depicted by the purple circles. Source: Sarepta Therapeutics.

Mutations in different exons have to be treated with different drugs. Both BioMarin and Sarepta are furthest along with drugs that treat patients with exon 51 mutations. BioMarin's drisapersen and Sarepta's eteplirsen are both currently under review by the Food and Drug Administration.

Prosensa Therapeutics, which BioMarin recently purchased, has one set of patents licensed from Academisch Ziekenhuis Leiden, while Sarepta, which used to be called AVI, has another set licensed from the University of Western Australia.

In Europe, Prosensa/BioMarin scored first with a ruling that the patents it licensed, which cover a wide number of exons, superseded Sarpeta's licensed patents. Sarepta fought back, scoring a point when it knocked out some of the claims so the patents only covered treatment of Duchenne muscular dystrophy using drugs that skip exons 51 and 46. Both companies are appealing the most recent decision in Europe.

BioMarin scored its second point yesterday when the U.S. Patent Trial and Appeal Board ruled that BioMarin's patents superseded Sarepta's patents for treating Duchenne muscular dystrophy with exon 51 skipping drugs.

Sarepta hasn't filed for approval in Europe yet, so the U.S. patent battle is arguably more important right now, with both drugs under FDA review. There are three potential scenarios that could happen next:

  1. BioMarin uses the win to block the launch of Sarepta's eteplirsen.
  2. BioMarin and Sarepta negotiate a royalty.
  3. Sarepta pushes this up to an appeals court.

The first one may not be possible since, according to Evercore ISI analyst Mark Schoenebaum, BioMarin's licensed patent hasn't even been issued yet -- the board just agreed that the patent had been filed first -- and the BioMarin apparently can't get a court injunction to block Sarepta's launch without the patent being issued.

Even if BioMarin could block the launch, it would make BioMarin look like a bully, which it probably wants to avoid given the unmet need and that Duchenne muscular dystrophy patients are kids. It's hard to compare the efficacy of the two drugs since they both have less-than-perfect data packages, but BioMarin is in a no win situation if it blocks the launch of eteplirsen: for those that think eteplirsen is best, BioMarin is blocking treatment to the best medication, and if BioMarin's drisapersen is best, then it has nothing to worry about by letting Sarepta launch.

The potential for a royalty versus Sarepta appealing the decision will be based on how high of a royalty BioMarin wants and how Sarepta sees its chance of prevailing in an appeal. I'd guess an appeal is more likely than the two negotiating a royalty at this point, but a royalty is likely to be the long-term solution since it'll make the problem go away for both sides.

Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends BioMarin Pharmaceutical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.