`833
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`IN THE UNITED STATES DISTRICT COURT
`IN AND FOR THE DISTRICT OF DELAWARE
`- - -
`:
`:
`:
`
`CIVIL ACTION
`
`NO. 14-1453-LPS
`
`::
`
`::
`
`BEFORE:
`APPEARANCES:
`
`- - -
`Wilmington, Delaware
`Tuesday, March 21, 2017
`Bench Trial (Closing Arguments) - Volume E
`- - -
`HONORABLE LEONARD A. STARK, Chief Judge
`- - -
`
`RICHARDS LAYTON & FINGER, P.A.
`BY: FREDERICK L. COTTRELL, III, ESQ., and
`SELENA E. MOLINA, ESQ.
`and
`STERNE KESSLER GOLDSTEIN & FOX, LLP
`BY: UMA N. EVERETT, ESQ.,
`DENNIES VARUGHESE, ESQ.,
`ADAM C. LaROCK, ESQ.,
`JOSHUA I. MILLER, ESQ.,
`JOSEPHINE J. KIM, ESQ.,
`STEPHANIE NGUYEN, ESQ., and
`MARK FOX EVENS, ESQ.
`(Washington, District of Columbia)
`Counsel for Plaintiffs
`
`Brian P. Gaffigan
`Official Court Reporter
`
`MEDA PHARMACEUTICALS, INC.,
`and CIPLA LTD.,
`Plaintiffs,
`
`v.
`APOTEX INC. and APOTEX CORP.,
`Defendants.
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`APPEARANCES: (Continued)
`
`HEYMAN ENERIO GATTUSO & HIRZEL, LLP
`BY: DOMINICK GATTUSO, ESQ.
`and
`WINSTON & STRAWN, LLP
`BY:
`GEORGE C. LOMBARDI, ESQ.,
`SAMUEL S. PARK, ESQ.,
`KEVIN E. WARNER, ESQ., and
`RYAN B. HAUER, ESQ.
`(Chicago, Illinois)
`and
`WINSTON & STRAWN, LLP
`BY: CHARLES B. KLEIN, ESQ., and
`ILAN WURMAN, ESQ.
`(Washington, District of Columbia)
`Counsel on behalf of Defendants
`
`- oOo -
`P R O C E E D I N G S
`(REPORTER'S NOTE: Bench trial closing arguments
`were held in open court, beginning at 2:07 p.m.)
`THE COURT: Good afternoon, everyone.
`(The attorneys respond, "Good afternoon, Your
`
`Honor.")
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`THE COURT: Welcome back and welcome upstairs.
`Let me have you put your appearances on the record for us.
`MS. MOLINA: Hello, Your Honor. Selena Molina
`from Richards Layton & Finger here on behalf of plaintiffs
`Meda and Cipla. I have with me from my office, Fred Cottrell.
`And from Sterne Kessler, we have Dennies
`
`Varughese.
`
`MR. VARUGHESE: Good afternoon, Your Honor.
`MS. MOLINA: Uma Everett.
`MS. EVERETT: Good afternoon, Your Honor.
`MS. MOLINA: Adam LaRock.
`MR. LaROCK: Good afternoon, Your Honor.
`MS. MOLINA: Josh Miller.
`MR. MILLER: Good afternoon, Your Honor.
`MS. MOLINA: And we have Bill Goodwin who will
`be our hot-seat operator for the day.
`THE COURT: Good afternoon to all of you.
`MR. GATTUSO: Good afternoon, Your Honor.
`THE COURT: Good afternoon.
`MR. GATTUSO: Dominick Gattuso from Heyman
`Enerio Gattuso & Hirzel on behalf of defendant Apotex.
`I have with me today, George Lombardi.
`MR. LOMBARDI: Good afternoon, Your Honor.
`MR. GATTUSO: Chuck Klein.
`MR. KLEIN: Good afternoon.
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`MR. GATTUSO: And Ilan Wurman from Winston &
`
`THE COURT: Thank you. Good afternoon again to
`
`Strawn.
`
`all of you.
`
`I think we have allocated an hour per side for
`closing argument. You can each use some of that for
`rebuttal to the extent you save your time for it and we'll
`begin with defendants.
`MR. LOMBARDI: Good afternoon, Your Honor.
`THE COURT: Good afternoon.
`MR. LOMBARDI: For the record, George Lombardi
`on behalf of Apotex. And from the start here, Your Honor, I
`just remind everybody of what the issues are we're dealing
`with.
`
`If you can go to the next slide please.
`We're talking about two patents, the '428 and
`the '620 patent. They both cover essentially the same basic
`idea, the same basic idea of being that they deal with two
`known FDA approved drugs, azelastine hydrochloride and
`fluticasone propionate. They deal with known excipients.
`That's the second thing they deal with.
`They operate for their known functions. In
`other words, they are known how they operate in formulations
`and they operate exactly in that way with this formulation;
`and the claims cover the known use, which is allergic
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`837
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`rhinitis, which Your Honor knows from the trial is
`essentially a hayfever type of situation.
`The fundamental idea here, Your Honor -- if we
`can go to the next slide, I guess I'll get to the fundamental
`idea.
`
`I'll tell you first what I'm going to talk about.
`I'll talk about, first, the combination of fluticasone and
`azelastine.
`
`Secondly, about how to make the formulation and
`what the additional excipients are. And,
`Third, about the secondary considerations.
`So now let's go to fundamental idea is that
`they took two popular nasal sprays, the inventors did,
`azelastine hydrochloride, which is an antihistamine, acts
`on the histamine receptor, and fluticasone which is a
`steroid, a corticosteroid, both were known treatments for
`this condition, allergic rhinitis, and put them together in
`the claims and then in a product which embodies the claims
`called Dymista. And Dymista, of course, is a nasal spray
`that is there to treat allergic rhinitis.
`Now --
`THE COURT: The dose of the azelastine in
`Dymista is different than the dose of azelastine in Astelin;
`correct?
`
`MR. LOMBARDI: That is correct, Your Honor. It
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`838
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`is the same as the way Astelin is dosed in Europe but it is
`different than the way it is dosed literally in the Astelin
`product in the United States.
`THE COURT: In fact, less, maybe half as much.
`MR. LOMBARDI: It is exactly half as much which
`is exactly what the dosage is in Europe.
`THE COURT: Now, might that therefore support a
`finding that the benefits or the success of the combined
`product is unexpected given that the dose is lower and yet
`we see some successful results?
`MR. LOMBARDI: I don't think so, Your Honor, for
`
`this reason.
`
`One is that the steroid in these combinations is
`the backbone really of the treatment here. It is what does
`the lion's share of the treatment. What happens with the
`antihistamine in the treatment is that it fills the gap
`between the time when you start administration of the drug
`and when the steroid can take effect.
`And so the whole purpose of the antihistamine
`here is to fill that gap. You might remember that we had
`some slides with the experts about early phase and late
`phase of allergic rhinitis. Well, the antihistamine jumps
`in during the early phase. The steroid comes in at the
`late phase.
`
`So I don't think it's -- I think the evidence is
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`that it wasn't surprising that it would succeed because both
`operate exactly how you expect them to operate under these
`circumstances.
`Significantly, Your Honor -- if we can go to the
`next slide -- this is a case where there really isn't much
`dispute at least among the experts and among the documents,
`putting aside the parties because there is a dispute among
`the parties, as to the logic of putting these two drugs,
`these two active ingredients together in the same formulation.
`Every single testifying physician in this case,
`whether on our side or their side co-prescribed these two
`drugs before 2002. And I wanted to make -- just to be
`clear, Your Honor. I'm not saying they were prescribed in
`the same bottle. I'm saying that they were co-prescribed,
`meaning they were prescribed to the same patients at the
`same time to treat the same disease. But every single
`testifying physician in this case said that.
`In addition, every guideline that Your Honor had
`before you taught the use of this. And you had guideline, a
`guideline called ARIA, I'm going to look at in more detail
`in just a second, Dykewicz and Cauwenberge, I'm going to
`say. They all recommended this kind of co-prescription of
`the two drugs, the two separate drugs to treat people who
`had allergic rhinitis.
`And here is the ARIA Guideline. And, Your
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`Honor, we saw this with a number of witnesses during the
`trial and put in a box the important parts, but the first
`one is you start with the glucocorticosteroid as a first
`line treatment.
`That goes back to my answer to Your Honor's
`first question. The steroids are the first line treatment
`and No. 4 you see if the patient doesn't improve, then there
`are things that you are given instruction on doing. And one
`of them is to add an antihistamine.
`So right there in the ARIA Guidelines from
`2001 -- our date here is 2002, Your Honor, just to remind
`the Court -- ARIA taught to combine these two types of
`drugs. And there are other guidelines. I'm not going to
`show them all to you now unless Your Honor would like to see
`them at some point.
`And plaintiffs' experts acknowledged that they
`did do that combination.
`So Dr. Kaliner, who was one of two plaintiffs'
`experts that really went to the science, the technology
`here, Dr. Kaliner said: "We did combine azelastine and
`fluticasone among many, many, many other treatment options
`that we did. I'm not saying we didn't do that."
`So plaintiffs' experts were following these
`guidelines, and in fact were using not just the guidelines
`to use antihistamines and steroids but were using the
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`precise drugs, the precise actives that are at issue here.
`So, Your Honor, I don't think there is any
`question that the teaching of the art was to -- (bumping
`against lectern mike) excuse me, I'm sorry -- to combine
`azelastine and fluticasone together.
`Now, plaintiffs obviously had a different view.
`And this is a chart that they put up before Your Honor with
`their experts. And to acclimate Your Honor to this chart,
`the idea of this chart, the critical date is the red dotted
`line, and the idea of this chart was to try to communicate
`that by the critical date there was literature out there
`that indicated that there was no benefit to the combination
`of an antihistamine and a steroid or they say and
`acknowledge in two places that there were weak benefits.
`That was a chart they put up.
`Now, our experts contradicted that and our experts
`said that in five of the seven cases, there was a benefit,
`and where there wasn't a benefit specifically shown, there
`certainly was no teaching away from the combination. And I
`don't think plaintiffs to this day have ever made an argument
`that anything taught away.
`But the easiest way to resolve this -- and, Your
`Honor, I can go back just for a second.
`In our briefs, we do go through each of the
`articles and we talk about what they actually show and we
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`talk about why they actually do show a benefit. And, again,
`I can do that today if that would be helpful and that is
`necessary. But the easiest way to show this is through what
`Dr. Kaliner and what others in the art did during this time.
`Dr. Kaliner being, of course, one of plaintiffs' experts.
`So he testified at trial that his opinion was
`that experts in the field consistently expressed skepticism
`that an antihistamine would add benefit to a nasal
`corticosteroid. He said "yes" to that.
`But what we found out on cross-examination is
`that Dr. Kaliner had actually given a speech in May of 2002,
`one month before the critical date, and in that speech, he
`presented Table III here and Table III, the second bullet,
`specifically teaches a corticosteroid plus nasal
`antihistamine for residual symptoms, specifically taught
`that that is what one should give.
`THE COURT: So there is reference there, of
`course, to oral antihistamine.
`MR. LOMBARDI: That is correct.
`THE COURT: And there is a lot in the briefing
`where essentially I would say the plaintiffs characterize
`your side as not being entirely straight about the
`difference between oral antihistamine and nasal
`antihistamine. Do you want to clarify that?
`MR. LOMBARDI: Well, there is no, certainly no
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`intention not to be straight about it. And I guess the
`easiest way to start, Your Honor, is to talk about this
`particular document; and I can go beyond that if that would
`be helpful.
`
`What Table III shows, Algorithms for Progressive
`Management Approaches. So this is as you proceed through
`the process. We have always said that there would be a
`stepwise approach. In fact, there are more oral
`antihistamines than there are nasal antihistamines at the
`relevant times here. We believe the evidence shows there
`are only two nasal spray antihistamines at this time.
`So, first, you try the oral plus a nasal
`corticosteroid.
`The next step was you continue with the oral
`and the nasal corticosteroid and then you would add a nasal
`antihistamine.
`So our position is, and I think what the
`evidence showed, is that you get to the point of the exact
`combination we're talking about here, a nasal corticosteroid
`plus a nasal antihistamine used at the same time to treat
`the same patient.
`THE COURT: To the extent some of your other
`prior art is only talking about oral antihistamines as
`opposed to nasal antihistamines, what relevance is there to
`it?
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`MR. LOMBARDI: Well, I'm trying to -- I think
`the main art, we talk about, Your Honor, is spray
`antihistamines, I believe. And I think where -- if you
`could go back one slide? I think -- two slides, I guess.
`I think on this chart, a lot of what you see
`there in the prior art, there are oral antihistamines as
`opposed to nasal. And so perhaps you could say, that they
`have less relevance to what is going on here.
`But our art, the art that we primarily rely on
`specifically talks about the nasal antihistamine. So if we
`could skip back up to where we were.
`Table III -- one second -- again talks about the
`nasal corticosteroids plus nasal antihistamines once you
`have already started with the oral plus nasal antihistamine
`corticosteroid, and then adds the nasal antihistamine. So
`that is specifically talking about nasal antihistamines.
`Let's go to the next chart I had which is to
`make the point, Your Honor, that Dr. Kaliner's speech was in
`May 2002 and it was after all the art that plaintiffs are
`talking about here.
`Now, what, the point I was trying to get to here
`is I haven't put it on this chart, but our main prior art
`here are the Cramer patent application and the Segal patent
`application, which both specifically talk about oral and --
`not oral. Excuse me -- antihistamines that are nasal, that
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`are sprays, and steroids that are nasal, that are spray,
`combined. That is Cramer and Segal. Both say that.
`And let me go to the next slide. This is the
`Cramer patent application by Proctor & Gamble back in 1997.
`So on our timeline, this would be closer to the
`critical date than most of the art that the plaintiffs rely
`on, and it specifically talks about nasal administration.
`And then it says, that, A, one of the steroids is fluticasone,
`our steroid here, and B is azelastine, the antihistamine and
`an intranasal carrier.
`So there is Cramer that specifically calls for
`the sprays, the exact combination that has been given here
`is taught in the art, and then there is also Segal, this was
`another patent application, specifically talks about you can
`see at the top, confirming, Your Honor, that we're talking
`about nasal compositions. And it says, one agent for
`topical administration, selected from the group consisting
`of, and antihistamines are included in that group.
`If you skip to the bottom excerpt, it says what
`the suitable antihistamines are, specifically teaches
`azelastine. Then the middle paragraph is about anti-
`inflammatory agents, meaning corticosteroids in this case,
`and specifically calls out fluticasone propionate as the
`corticosteroid.
`So, again, Segal teaches both the antihistamine
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`and the corticosteroid in a nasal administration form, and
`those are the pieces of art that we rely on most prominently
`here.
`
`So if we go to the next slide.
`In summary, Your Honor, what you have here is
`every testifying physician in this case talking about using
`the guidelines to do the antihistamine, the nasal
`antihistamine and the nasal steroid plus prior art that says
`to do it, and virtually all of this came after the art that
`plaintiffs rely on to say that there is no benefit to the
`combination.
`
`So our position is that the most persuasive
`evidence in this case is what people out there actually
`did. And if you are looking for an interpretation of what
`all those articles that plaintiffs cite actually say, well,
`these people were the people that were out there acting
`on what was known in the art and what they did was they
`prescribed them together. So that is why we believe the
`evidence shows that azelastine, fluticasone, it was obvious
`to put them together.
`Now, there is another issue in that slide about
`putting them together in one bottle; and we agree that that
`is a separate, an additional issue here. It's not enough
`just to say that you'd administer them to the same patient
`for the same thing because the invention here is they say
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`they put it into the same bottle.
`But, Your Honor, that again has already been
`done by the time of the critical date. Cramer did it, Segal
`did it. They did it, as I said, with the exact same drugs
`in the exact same form as had been done previously.
`So there isn't an issue about whether the art
`teaches one to make that combination. The art actually had
`made that combination before.
`And so what I would say, Your Honor, is there
`was logic to that. There was reason for that.
`I think we don't need to show more than Cramer
`and Segal. Segal actually used them together, but if there
`is a feeling that we need to do that, then there is common
`sense and teachings in the art that would get you to that
`point.
`
`THE COURT: Do you need to show that there was
`an appreciation or an understanding of a problem in the
`prior art that was solved by this combination?
`MR. LOMBARDI: Well, here -- I'm coming to that
`right now. And so the problem was compliance and convenience.
`And so what the person of skill in the art would know is that
`by putting the two forms, the two actives into one bottle, you
`are -- (bumping into mike.) Sorry, Your Honor.
`You are creating more convenience for the person
`who is taking the drug; and when it is more convenient, the
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`odds are they're going to comply with what the prescription
`says are greater.
`So we have a couple of references on that.
`The Spector reference from 1998 is talking about
`nasal sprays, and it's talking about the importance of
`ensuring patient compliance. And so it says that the ideal
`therapy would be a drug, a single drug that possessed not
`only the antihistamine receptor, the antihistamine, that is
`what a H1 receptor antagonist is, but also antiinflammatory
`activity, steroids. So it is teaching for compliance
`purposes it should all be in one bottle, one treatment.
`The Segal reference that we talked about before
`says this right on its face. It says: "The use of multiple
`topical nasal preparations to administer multiple
`therapeutic agents suffers from significant disadvantages."
`So it's talking about the problem of multiple
`agents being administered in multiple preparations.
`And if you go to the second highlighting there, it
`says: "Another disadvantage of the administration of multiple
`topical nasal preparations is patient inconvenience. Patient
`compliance may be compromised by the invention of applying
`multiple spray products or nose drops."
`And so Segal itself teaches to make the
`combination. So it's the same lesson that Segal is teaching
`is applicable here and, in fact, here involves the exact
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`same drugs or some of the exact same drugs that Segal deals
`with.
`
`Now, we also had an admission from
`Dr. Kaliner -- again, this is plaintiffs' expert -- that it
`would have been obvious to include compliance. This was an
`impeachment point, Your Honor. It is not what he said at
`trial but here is the impeaching evidence that is in the
`record:
`
`"Would it have been obvious to a person of skill
`in the art at that point in time that they could improve
`patient compliance by putting those two in one spray bottle?
`"I think you would have improved compliance,"
`said Dr. Kaliner.
`So, again, we think the art clearly teaches,
`clearly teaches that these two actives in this form nasal
`spray should be put together in one bottle. And, in fact,
`Your Honor, this probably would have been an anticipation
`case except for the existence of the excipients that are
`claimed and that makes it different; but I'm just saying
`for purposes of azelastine and fluticasone, it's really all
`there on the four corners of the art.
`And just to make this even more clear, and perhaps
`more, in a more straightforward real-world way, this is a trip
`summary that was created by a man named, I think you pronounce
`it "Fuge," who was a Meda employe who went over to Cipla. You
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`may recall Cipla is actually the inventor on the patent and
`Meda is the exclusive licensee; and during the time they were
`talking about doing this deal, this licensing deal, Fuge,
`Mr. Fuge went over there and he talked to them about how
`did you come up with this idea for selecting azelastine
`fluticasone?
`
`And he said, in his own words -- this is how he
`characterized what the inventor told him: They selected the
`azelastine/fluticasone combo because it was obvious.
`So our position is that that is the logic of
`what the art teaches. It's what the art teaches. It's what
`people in the real world were doing. It's what Cipla said
`about their invention. So, therefore, we think that this
`part of the obviousness case has clearly been established.
`Now, Meda obviously makes some arguments to the
`contrary and they talk about being discouraged. People in
`the art would be discouraged from a fixed-dose regimen
`because a fixed dose regimen would not be as flexible. It
`would be, it would be fixed obviously. You couldn't tell
`the patient to take a specific amount of azelastine that
`might be different from what is in the bottle and a
`different amount of fluticasone than what is in the bottle.
`They say that reduced flexibility would have
`been a problem, and it would have been dosing differences
`which you and I, Your Honor, have talked about already.
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`The problem with what they're saying, again,
`comes back to the fact that it was already done in the art.
`If there was discouragement, if the art
`discouraged people from doing a fixed-dose regimen, then
`you wouldn't have ended up with Cramer or Segal, the two
`prior art references that use the exact drugs in the exact
`form that we're talking about. They use exactly what we're
`talking about here.
`So any issues that plaintiffs are trying to
`create about dosing differences or reduced flexibility or
`side effects, anything like that, have already been overcome
`in the art because there is art that teaches these things.
`Now --
`THE COURT: They pointed to I think it was
`Shenfield as calling out flexibility, loss of flexibility
`being a real problem. Is it your contention that I couldn't
`even find that that would be a consideration that might
`discourage a person of skill in the art?
`MR. LOMBARDI: The way I would characterize it,
`Your Honor, it is clearly a consideration that you take into
`account.
`
`The reason -- and you might even think that
`without knowing more, it could discourage. But the fact is
`that it doesn't discourage because of Cramer and Segal going
`forward. But if you look at it from a logical standpoint,
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`this gives -- it doesn't prevent doctors from prescribing
`more fluticasone or more likely more of the antihistamine
`azelastine if they wanted to. They could, they could have
`the bottle with whatever dose is in the bottle and they
`could supplement it with other things.
`So it is not something that would prevent one
`from going with this type of fixed regimen. And that is
`what the art establishes and Segal and Cramer has established.
`Now, what -- if you could move on back to 33,
`
`please.
`
`Now, what we end up discussing with Cramer and
`Segal but particularly with Cramer was plaintiffs tried to
`convince Your Honor that Cramer wasn't applicable here or
`wouldn't teach to use the combination here because they said
`it was inoperable.
`And so let's just start at the beginning, Your
`Honor. What is relevant here for the obviousness analysis,
`particularly the prima facie obviousness analysis, is what
`is in the prior art? What does the art say?
`And the art is Cramer on this point. And Cramer
`teaches that the combination would work and would work for
`its intended purpose.
`There is nothing in Cramer that teaches
`inoperability. And, in fact, we cite the Duramed case, Your
`Honor. The Duramed case says that for obviousness purposes,
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`you don't have to have proof that it will be successful, and
`there are cases that even say that even something that says
`on its face it's inoperable can be a prior art reference and
`you take it for as much as it actually teaches.
`Well, here, Cramer doesn't teach that there is
`anything inoperable. And so the art is undisputed that
`Cramer teaches this combination.
`Now, a few notes about the inoperability
`evidence here. The only evidence that we have in this case
`about inoperability was done after the fact by people who
`frankly had an interest in the outcome. One was the Meda --
`excuse me, the Cipla inventor was trying to get the patent
`from the Patent Office and did some testing, and then was
`Meda's expert in this case who did some testing. But
`neither did the kind of testing that a person of skill in
`the art would have done.
`Maureen Donovan, Dr. Maureen Donovan was our
`expert on formulation. She said that those formulations and
`that testing came out the way first stabs at formulations
`always come out. And there are always things to tweak. In
`that instance, in both instances of the testing that was
`done, they were found to be, there was concern that they
`were too acidic, the formula was, and not isotonic, but
`those are the kind of things that Dr. Donovan said can be
`fixed and fixed