Biogen Sheds $5 Billion of Value as Drug Challenge Vexes Street

(Bloomberg) -- Biogen Inc. shares just posted their biggest one-day plunge since late July as investors weigh the intellectual property risks to the company’s top-selling drug Tecfidera.

A 7.4 percent decline erased about $5 billion of Biogen’s market value Thursday. Almost 2.8 million shares changed hands, more than twice the average daily trading volume of the past three months.

The decline was triggered by a Patent Trial and Appeal Board (PTAB) decision late Wednesday to consider Mylan NV’s challenge to a Biogen patent covering Biogen’s multiple sclerosis drug. The patent is critical in extending the medicine’s exclusivity into the next decade, and the PTAB’s ruling raises concerns about Tecfidera estimates, UBS analyst Carter Gould wrote in a note.

Other analysts have rushed to Biogen’s defense, however, pointing out that the company has previously prevailed in two similar cases.

“I get a sense Biogen actually has a good shot at winning” the review, which will take about a year to resolve, Evercore’s Umer Raffat wrote in a note.

The update doesn’t help investor sentiment as Wall Street remains nervous about the company’s key Alzheimer’s data. “Given Roche’s crenezumab stopped, investors have not increased their odds that aducanumab will work,” Jefferies analyst Michael Yee wrote in a research note. “The market is unsure what to do” in the first half of 2019 amid a lack of upside catalysts.

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer

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