Biogen Inc. (NASDAQ: BIIB) and Alkermes PLC (NASDAQ: ALKS) announced an update from the U.S. Food and Drug Administration on Wednesday morning. The FDA approved Vumerity for the treatment of relapsing forms of multiple sclerosis (MS), to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.

Biogen holds the exclusive, worldwide license to commercialize Vumerity and intends to make it available in the United States in the near future.

The FDA approval of Vumerity was based on a New Drug Application (NDA). It included data from pharmacokinetic bridging studies comparing Vumerity and Tecfidera to establish bioequivalence and relied, in part, on the FDA’s findings of safety and efficacy for Tecfidera.

Under the terms of the license and collaboration agreement between Biogen and Alkermes, Biogen will pay Alkermes $150 million in connection with the FDA’s approval of Vumerity. Biogen plans to account for this milestone payment as an asset that will be amortized over the expected useful life of the product.

Alkermes is also entitled to receive a mid-teens percentage royalty on worldwide net commercial sales of Vumerity, subject, under certain circumstances, to minimum annual payments for the first five years following FDA approval and customary reductions as set forth in the agreement.

Alfred Sandrock, Jr., M.D., Ph.D., executive vice president, research and development, and chief medical officer at Biogen, commented:

The FDA’s approval of Vumerity delivers on Biogen’s commitment to pursue new therapies that may provide meaningful impact for people living with relapsing MS, and we look forward to bringing it to the MS community as an additional treatment option. Vumerity is a novel fumarate that offers the well-characterized efficacy of Tecfidera (dimethyl fumarate) and has been studied for improved patient-reported gastrointestinal tolerability.

Shares of Biogen traded up about 1% on Wednesday to $299.94, in a 52-week range of $215.78 to $344.00. The consensus price target is $297.59.

Alkermes traded at $20.04 a share, in a 52-week range of $17.11 to $42.13. The consensus price target is $25.25.

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