Patent Interference a 'Binary Event' for Forward Pharma (FWP) But Next Update 13 Months Away, Jefferies Says

Jefferies analyst Thomas Wei reiterated a Buy rating and $40 price target on Forward Pharma (NASDAQ: FWP) after the USPTO has formally declared a patent interference between FWP and Biogen (NASDAQ: BIIB) over first inventorship of a critical Tecfidera dosing claim covering 480 mg per day for the treatment of multiple sclerosis.

"As expected, FWP has been initially given senior party status based on its earlier filing date," Wei said. "We estimate that it takes an average of 13 months to reach the next critical and interpretable decision point in the interference proceeding."

He added, "The process of preliminary motions takes an average of 13 months, at which time, either FWP will be confirmed as senior party or BIIB will be confirmed as senior party. This will be a highly binary event for FWP, as it will likely be interpreted by investors as a leading indicator of the final outcome. The interference then enters the priority phase (assuming both parties are still standing after the motions phase), which typically takes an additional year, but can vary significantly in duration. After the priority phase, a final determination is made on first-to-invent and senior status is awarded. After a decision, there can be another six month period for an appeal argument, followed by six months for a decision. We expect the companies will go into preliminary motions by 1H15 and we could know the outcome of the motions phase in 1H16."

For an analyst ratings summary and ratings history on Forward Pharma click here. For more ratings news on Forward Pharma click here.

Shares of Forward Pharma closed at $32.05 yesterday.

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