Biogen Inc. Buys Its Way Out of Competition

Biogen Inc. Buys Its Way Out of Competition

Biogen (NASDAQ: BIIB) is following the old saying, "If you can't beat 'em, join 'em" for its multibillion drug Tecfidera or, more accurately, "If you might not be able to beat 'em later, license 'em now."

Today, the big biotech announced a licensing deal with Alkermes (NASDAQ: ALKS) for ALKS 8700, a monomethyl fumarate to treat the relapsing forms of multiple sclerosis. Biogen is paying for half of the 2017 development costs for ALKS 8700 -- $28 million so far -- and will pick up all the costs starting Jan. 1, 2018. Alkermes is due an initial $50 million milestone payment that should be paid in 2017 and $150 million if the drug is approved in the U.S. before the end of 2021. If ALKS 8700 is approved, Biogen will pay Alkermes a mid-teens royalty on worldwide net sales of the drug, including minimum annual payments for the first five years following Food and Drug Administration approval, and be responsible for all marketing activities.

Image source: Getty Images.

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Source: Fool.com