UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`AMNEAL PHARMACEUTICALS, LLC
`
`Petitioner
`
`V.
`
`SUPERNUS PHARMACEUTICALS, INC.
`Patent Owner
`
`US Patent No. 8,206,740
`
`Case No. IPR2013-00368
`
`
`DECLARATION OF PHILIP GREEN
`
`Amneal 1113
`
`Amneal v. Supernus
`|PR2013-00368
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`Table of Contents
`
`Overview .......................................................................................................... 1
`
`II.
`
`III.
`
`IV.
`
`VI.
`
`Summary of Opinions ...................................................................................... 2
`
`Professional Background and Qualifications .................................................. 4
`
`List of documents I considered in formulating my opinions........................... 5
`
`Basis of My Analysis With Respect to Commercial Success ......................... 9
`
`Background .................................................................................................... 11
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`The Market for Rosacea Treatments ................................................... 1 l
`
`CollaGenex, Periostat®, and Oracea® ............................................... 12
`
`Galderma ............................................................................................. 13
`
`Sales and Profitability ......................................................................... 14
`
`The ’740 Patent ................................................................................... 15
`
`VII.
`
`Opinions and Related Support ....................................................................... 19
`
`Opinion 1: Oracea®’s sales are not due to the ’740 patent. .......................... 19
`
`A.
`
`B.
`
`The only features of Oracea® that are pertinent to establish nexus are
`arguably its once-daily dosing regimen and underlying IR/DR
`configuration ....................................................................................... 19
`
`There is no nexus between any novel features of the ’740 patent and
`Oracea®’s sales ................................................................................... 23
`
`Opinion 11: Oracea®’s status as the only FDA-approved oral treatment for
`rosacea has substantially contributed to its sales. ............................... 30
`
`Opinion 111: Oracea®’s Sales are being driven by Galderma’s marketing,
`rather than any novel features of the ’740 patent claims. ................... 32
`
`A.
`
`Overall Effect of Galderma’s Marketing Power ................................. 32
`
`B. Managed care and patient rebates and discounts ................................ 36
`
`C.
`
`D.
`
`Oracea®’s marketing expenses are higher than other orally-
`administered drugs that are used in the treatment of rosacea ............. 39
`
`Galderma’s non-branded disease awareness marketing efforts were
`designed to increase sales, not as a “public service” ..........................42
`
`E.
`
`Galdenna’s free-samples program is also driving sales of Oracea®..44
`
`

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`Case [PR2013-00368 / Declaration ofPhilip Green
`
`Opinion IV: Dr. Grabowski’s Internal Rate of Return analysis is not
`probative of commercial success .........................................................46
`
`VIII. Summary of Comparison to other Doxycycline Products .............................47
`
`ii
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`

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`Case [PR2013-00368 / Declaration ofPhilip Green
`
`1, Philip Green, declare as follows:
`
`I.
`
`Overview
`
`1.
`
`I am over the age of eighteen (18) and otherwise competent to make
`
`this declaration.
`
`2.
`
`I have been retained by Sterne, Kessler, Goldstein & Fox on behalf
`
`AMNEAL PHARMACEUTICALS, L.L.C and AMNEAL PHARMACEUTICALS COMPANY
`
`PVT. LTD. (together “AMNEAL”) for the above-captioned inter partes review
`
`(“IPR”). My firm, Hoffman Alvary & Company LLC, is being compensated at the
`
`rate of $495 per hour for my work on this engagement. My firm’s compensation is
`
`not affected by the outcome of this matter.
`
`3.
`
`I understand that the petition for inferpartes review involves U.S.
`
`Patent No. 8,206,740 (“the ”740 patent”), [Ex1001|, which resulted from U.S.
`
`Application No. 12/155,676 (“the ’676 application”), filed on June 6, 2008,
`
`naming Rong—Kun Chang, Arash Raoufmia, and Niraj Shah as inventors. I further
`
`understand that, according to the USPTO records, the ’740 patent is currently
`
`assigned to Supernus Pharmaceuticals, Inc. (“the patentee”). For purposes of my
`
`analysis, I have been asked to assume that Oracea® (doxycycline, USP) is a
`
`commercial embodiment of the ’740 patent.
`
`

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`Case [PR2013-00368 / Declaration ofPhilip Green
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`II.
`
`Sammary of Opinions
`
`4.
`
`I have been asked by counsel for Amneal to consider and respond to
`
`the testimony of Supernus’ declarant, Dr. Henry G. Grabowski, concerning
`
`secondary considerations of nonobviousness. Specifically, I have been asked to
`
`evaluate the sales of Oracea® and to what extent, if any, those sales can be
`
`attributed to the invention claimed in the ”740 patent, as opposed to extrinsic
`
`drivers such as marketing and promotion.
`
`5.
`
`It is my opinion that there is no nexus between the sales of Oracea®
`
`and the claims of the ’740 patent. To the extent that any actual scientific features of
`
`Oracea® (or “medical benefits,” as Dr. Grabowski refers to them) are responsible
`
`for any of its sales, those features were readily available in the prior art and,
`
`therefore, are not pertinent to establishing nexus. Instead, Oracea®’s sales are
`
`being driven by (i) its unique status as the only FDA—approved oral treatment for
`
`rosacea and (ii) Galderma’s intense marketing efforts and strong ties in the relevant
`
`dermatology market. In Section VIII below, I provide a summary chart comparing
`
`both unclaimed and claimed features of Oracea® to prior art doxycycline products.
`
`6.
`
`In attempting to establish a nexus, Dr. Grabowski repeatedly states in
`
`his declaration that the sales of Oracea® are attributed to its “unique benefits and
`
`advantages” or “its unique combination of attributes.” [Ex2071, 111] 38-43, 61-65].
`
`However, he fails to establish that the sales are due to any novel elements of the
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`claims of the ’740 patent, as opposed to elements that already existed in the prior
`
`art. In fact, I understand from reviewing his deposition transcript that Dr.
`
`Grabowski did not evaluate whether any novel features of the ”740 patent claims
`
`were driving sales, and did not consider what features may have existed in the prior
`
`art. [Ex1055, 76:18 — 82:17]. I respectfully disagree with Dr. Grabowski that there
`
`is a nexus, and I believe that his opinions are flawed for not applying the proper
`
`analysis.
`
`7.
`
`Dr. Grabowski also contends that neither Oracea®’s status as the only
`
`FDA—approved oral treatment for rosacea nor Galderma’s marketing initiatives are
`
`driving sales [Ex201’7, 1H] 59-60, 66-73]. Again, I respectfully disagree. As
`
`explained in fiirther detail below, Oracea®’s exclusive status as the only FDA-
`
`approved oral treatment for rosacea confers it with a tremendous marketing
`
`advantage in comparison to competing oral treatments. To ignore that advantage in
`
`evaluating commercial success, in my opinion, is a fundamental error. Next, also
`
`as discussed in more detail below, Galderma has deployed a multi—faceted and
`
`aggressive marketing campaign to both create a market for Oracea and to drive its
`
`sales in that market, through promotional programs targeted at prescribers, direct-
`
`to-patient (“DTC”) programs targeting patients, programs targeting insurance
`
`companies, a generous “free samples” program, and various discount and rebate
`
`schemes intending to drive sales.
`
`

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`Case IPRZ013-00368 / Declaration ofPhilip Green
`
`8.
`
`Dr. Grabowski also asserts that—
`
`— and that this is a basis for concluding that the ’740
`
`patent, rather than the marketing campaign, is driving sales. I disagree. Even if Dr.
`
`Grabowski were correct that—
`
`——and in my opinion he is not correct, as discussed below—that
`
`does not mean the marketing is not driving the sales. Galderma is a specialty
`
`pharmaceutical company exclusively focused on the dermatology market. Its broad
`
`presence and deep influence in the dermatology market are driving the sales, not
`
`any novel features of the ’740 patent.
`
`9.
`
`Finally, I disagree with both Dr. Grabowski’s internal rate of return
`
`analysis and his opinion that it is probative of commercial success.
`
`III.
`
`Professional Background and Qualifications
`
`10.
`
`I am one of four founding principals in the consulting firm of
`
`Hoffman Alvary & Company LLC, located in Newton, Massachusetts. Prior to
`
`founding the firm in October 1996, I was a senior manager in the Dispute Analysis
`
`and Corporate Recovery Services practice of Price Waterhouse LLP, an
`
`international accounting and consulting firm.
`
`1 1.
`
`For much of the past twenty years, my practice has focused on matters
`
`involving intellectual property. As part of my work, I am regularly involved in the
`
`valuation and licensing of intellectual properties including patents, copyrights,
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`trademarks, and trade secrets related to pharmaceuticals, consumer products,
`
`electronics, and software, among others. In connection with some of these matters,
`
`I have participated in license negotiations and have performed valuations of
`
`intellectual property assets.
`
`In addition, I have been retained as an expert on
`
`numerous occasions to address the appropriate measure of damages resulting from
`
`patent, copyright, and trademark infringement and from trade secret
`
`misappropriation.
`
`12.
`
`I obtained my undergraduate degree in history from Rutgers College
`
`and received a Masters of Business Administration degree with a concentration in
`
`accounting from Rutgers Graduate School of Management. I am a Certified Public
`
`Accountant (“CPA”) licensed to practice by the State of New York. I am also a
`
`Certified Management Accountant, have earned the Accredited in Business
`
`Valuation (“ABV”) designation from the American Institute of Certified Public
`
`Accountants, and have been designated an Accredited Senior Appraiser (“ASA”)
`
`by the American Society of Appraisers. Ex1072 is my curriculum vitae, including
`
`a list of my publications and cases in which I have given testimony either in
`
`deposition or at trial in the past four years.
`
`IV.
`
`List of documents I considered in formulating my opinions
`
`13.
`
`In formulating my opinions, I considered the following documents :
`
`

`

`Case IPRZ013-00368 / Declaration ofPhilip Green
`
`Exhibit
`
`or Paper
`
`Description
`
`Paper 2 Amneal’s petition for interpartes review of US Patent No. 8,206,740
`
`Amneal’s petition for interpartes review of US Patent No. 8,394,405
`
`Amneal’s etition for inter artes review of US Patent No. 8,394,406
`
`Patent Trial & Appeal Board, Decision to Institute, Case IPR2013-
`00368;
`
`Patent Trial & Appeal Board, Decision to Institute, Case IPR2013-
`00371;
`
`tetracyclines” (filed December 17, 2010; issued March 12, 2013) (“the
`
`Patent Trial & Appeal Board, Decision to Institute, Case IPR2013-
`00372;
`
`Paper 39 Supernus’ Patent Owner Response, Case IPR2013-00368;
`
`Paper 40 Supernus’ Patent Owner Response, Case IPR2013-00371;
`
`Paer 38 Su-ernus’ Patent Owner Res-onse, Case IPR2013-00372;
`
`Chang et al., US. Patent No. 8,206,740, “Once daily formulations of
`tetracyclines” (filed June 6, 2008; issued June 26, 2012) (“the ’740
`
`Ashley, WO 02/080932, “Methods of treating acne” (filed April 5,
`2002; ublished October 17, 2002
`“the ’932 ublication”
`
`Chang et (11., US. Patent No. 8,394,405, “Once daily formulations of
`
`Physician’s Desk Reference pp. 1208-1210, 2442-2444, 2735-2736
`and 3357-3358, 56‘" ed. (2002)
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`Exhibit
`
`or Paper
`
`Description
`
`No
`
`1012
`
`1022
`
`1043
`
`1046
`
`1047
`
`1048
`
`Skidmore er al., “Effects of Sub-antimicrobial-Dose Doxycycline in
`the Treatment of Moderate Acne” Arch. Dermatol. 139:459-464
`
`Declaration of Glenn A. Van Buskirk, Ph.D. and cited exhibits
`
`GP. Webster, “Acne vul_aris,” British Med. J. 325:475-479 2002
`
`Galderma Strategic Planning Presentation 2009-2011
`
`Galderma Rosacea ATU Wave 4 — Market Vision Study May 2010
`
`Galderma Rosacea Brand Factored Study — June 17, 2009
`
`1054
`
`Transcript of Deposition of Guy Webster, M.D., Ph.D., Cases
`
`IPR2013-00368; IPR2013-00371; and IPR2013-00372, May 9, 2014
`
`and exhibits
`
`Transcript of Deposition of Henry G. Grabowski, Ph.D., Cases
`
`IPR2013-00368; IPR2013—0037l; and IPR2013-00372, May 13, 2014
`
`and exhibits
`
`1056
`
`1060
`
`Declaration of Elaine S. Gilmore, M.D., Ph.D. and cited exhibits
`
`Bikowski J .B., “Subantimicrobial dose of doxycycline for acne and
`
`rosacea” SKINmed 2003; 2:234-245 2003
`
`1061
`
`Hurley er al, “Characterizing the Relationship Between Free Drug
`
`Samples and Prescription Patterns for Acne Vulgaris and Rosacea”
`
`
`
`1067
`
`1072
`
`1073
`
`1074
`
`1075
`
`1076
`
`1077
`
`1078
`
`1079
`
`JAMA Dermatol. Aril l6, El-E7 2014
`
`Galderma’s Rosacea Franchise 3—Year Plan
`
`Curriculum Vitae of Phili Green
`
`CollaGenex Annual Re ort 2001
`
`Pascoe, “Galderma wants to own the Rosacea Market,” available at
`
`http://rosacea-support.org/galderma-wants-to-own-the-rosacea-
`markethtml, downloaded on Ari] 17, 2014
`
`MetroGel Month] Prescri ntion Count
`
`Oracea Marketin_—to-Sales Ratio
`
`Do
`
`x Marketin_-to-Sales Ratio
`
`Solod n Marketin_-to-Sales Ratio
`
`Adoxa Marketin_—to-Sales Ratio
`
`1080
`
`Oracea Gross Revenues
`
`

`

`Case IPRZ013-00368 / Declaration ofPhilip Green
`
`Exhibit
`
`or Paper
`
`Description
`
`No.
`
`1081
`
`1082
`
`1083
`
`1084
`
`Form 10-Q for Collagenex Pharmaceuticals, Inc. available at
`htt ://biz. ahoo.com/e/051103/c_i10- .html
`
`Shovlin, “Which Antibiotic for Rosacea?” available at
`www.revo n m.com/content/d/cornea/c/15521/
`
`Wertheimer, “Lifecycle: End Game,” available at http://www.
`pharmexec.com/phannexec/PE + Features/Lifecycle-End-Game/
`Articlestandard/Article/detail/463104, downloaded on Ma 21, 2014
`
`1088
`
`Oracea DTC Exense and Gross Revenue
`
`1091
`
`1093
`
`About the AAD, available at http://www.aad.org/about-aad,
`downloaded on Ma 21, 2014
`
`Li, V.W., et al., Ofl—Label Dermatologie Therapies: Usage, Risks and
`Mechanisms. Arch. Dermatol. 1998 134:1449—1454.
`
`1094
`
`Actress Cynthia Nixon Reveals How Rosacea Has Impacted
`Her Life, available at
`http ://www.westglen.com/reports/NationalRosaceaSociety_l 9348_M
`NR.htm1, downloaded on A ril 13, 2012
`
`
`
`Laboratories
`
`cou on, download on Ma 22, 2014
`
`1097
`
`Profit and Loss data from Galderma Laboratories
`
`1098
`
`1105
`
`Wolters Kluwer raw data re ardin rescri tion trackin_
`
`Top 10 Drugs and Their Genetic Equivalents Prescribed by
`
`Dermatologists Nationally and at an Academic Medical Center (AMC)
`
`at Initial Encounters of Patients with Acne in 2010, Table 2 from
`
`Hurle er a].
`
`Oracea Marketing Expense and Gross Revenue
`
`2017
`
`Declaration of Hen G. Grabowski, Ph.D. and cited exhibits
`
`

`

`Case IPRZ013-00368 / Declaration ofPhilip Green
`
`Exhibit
`
`or Paper
`
`Description
`
`Table of 0 Heratin Income Anal sis of Galderma
`
`National Rosacea Society, Rosacea Review, “Rosacea Now Estimated
`to Affect at Least 16 Million Americans” Winter 2010
`
`CollaGeneX Pharmaceuticals Inc., Press Release entitled “ColIaGenex
`Pharmaceuticals Receives FDA Approval for Oracea,” dated May
`2006, available at
`http://www.drugs.com/news/collagenexpharmaceuticals- receives-fda-
`a o - roval-oracea- 1 8 10.html
`
`No.
`
`2018
`
`2064
`
`2085
`
`2094
`
`2095
`
`2096
`
`2099
`
`2109
`
`
`
`Packa e Insert for Finacea®
`
`MetroGel Prescribin_ Information
`
`Galderma Laboratories, L.P.’s Oracea® website,
`
`htt ://www.oracea.com last visited Airil 9, 2013
`
`Berman, B. et 512., Update on Rosacea and Anti-Inflammatory-Dose
`Dox C Cline, Dru s 0 Toda 43 1
`:27-34 2007
`
`2110
`
`Bikowski, J .B. & Goldman, M., Rosacea: Where Are we Now? J.
`
`Drus Dermatol. 3:251—261 (2004
`
`V.
`
`Basis ofMy Analysis With Respect to Commercial Success
`
`14.
`
`I understand that in considering the obviousness of an invention, one
`
`must also consider whether there are any secondary considerations that support the
`
`non-obviousness of the invention. I understand that commercial success is one
`
`such consideration.
`
`15.
`
`I understand that “commercial success” can be evidence of non-
`
`obviousness. I further understand that a finding of commercial success requires
`
`evidence of substantial sales, which can be deemed a “success,” of the claimed
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`invention and evidence of a nexus between the substantial sales and the claims of
`
`the patent, i.e., proof that the commercial sales were a direct result of the patented
`
`technology. I was informed by counsel that if the sales success is due to an element
`
`in the prior art, no nexus exists. In other words, if the feature that creates the sales
`
`success was known in the prior art, the success is not pertinent. Finally, I
`
`understand that if evidence suggests that extrinsic factors (e.g., regulatory
`
`exclusivities, being the first to enter the market, strong marketing/advertising
`
`efforts, discount programs, or free samples) are driving sales rather than any novel
`
`features of the claims, then there is no nexus to establish commercial success for
`
`purposes of nonobviousness.
`
`16. My discussions pertaining to the technology at issue is based on my
`
`review of the declarations of Amneal’s technical and clinical experts, Drs. Van
`
`Buskirk and Gilmore.
`
`17.
`
`As part of my analysis, 1 generated certain graphical exhibits
`
`reflecting the sales of Oracea®, competing products, and marketing expenditures.
`
`[See Ex1075-Ex1084]. The underlying data for the sales graphs is from the same
`
`Wolters Kluwer source relied upon by Dr. Grabowski and provided by Supernus.
`
`And I agree with Dr. Grabowski that “Wolters Kluwer is one of the leading
`
`providers of information and [Sic] the pharmaceutical industry. Wolters Kluwer
`
`data are relied upon extensively by pharmaceutical industry professionals,
`
`10
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`government agencies, and researchers to determine drug sales, prescriptions, and
`
`promotional expenditures.” [Ex2017, n. 1]. Similarly, in generating graphs relating
`
`to marketing expenditure, I relied on business record data provided by Galderma
`
`Laboratories, e. g, Profit and Loss statements. The Wolters Kluwer raw data and
`
`records received from Galderma are provided as Ex1096-Ex1098. I generated the
`
`graphical exhibits based on this data using standard computer data processing
`
`software.
`
`VI. Background
`
`A.
`
`The Marketfor Rasacea Treatments
`
`18.
`
`I agree with Dr. Grabowski that rosacea is a chronic condition
`
`characterized by facial redness and sometimes pimples affecting approximately 16
`
`million people in the US. [Ex2017, 1] 15]. Treatments for rosacea help to manage
`
`the disease and range from topical creams to oral formulations.
`
`19.
`
`Two topical medications, MetroGel® and Finacea®, are regularly
`
`prescribed for the treatment of rosacea. I understand that MetroGel®
`
`(metronidazole) was initially approved for sale in the US. in 1988. [Ex2096]. I
`
`further understand that since January 2005, a 1% once-daily MetroGel®
`
`formulation has been marketed by Galderma Laboratories (“Galderma”). Prior to
`
`2005, MetroGel® was sold in a 0.75% gel that was applied twice daily. Finacea®
`
`11
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`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`(azelaic acid) was initially approved for sale in the US. in 2002. Finacea® is
`
`applied once or twice daily. [Ex2100].
`
`20.
`
`In addition to topical treatments, oral pharmaceuticals are also
`
`prescribed for patients with rosacea. I understand that Galderma views Solodyn®,
`
`Doryx®, Adoxa®, and generic doxycycline, including 20 mg tablets which are
`
`generic versions of Galderma’s proprietary Periostat®, as competitors to Oracea®
`
`in the marketplace. [Ex2062; Ex2066; Ex2102]. Ex1084, titled “Monthly
`
`Prescriptions for Select Rosacea Drugs,” shows prescription counts for select
`
`competitors to Oracea®.
`
`B.
`
`CollaGenex, Periostat®, and Oracea®
`
`21. According to Dr. Grabowski, CollaGenex Pharmaceuticals, Inc.
`
`(“CollaGeneX”), is a specialty pharmaceutical company that is focused on dental
`
`markets. [Ex2017, 1] 18]. In 1998, CollaGenex obtained approval from the FDA for
`
`the drug Periostat® (20 mg doxycycline) for use to treat adult periodontal disease.
`
`[EX1011; Ex2016, 1] 66]. I understand Periostat® was typically prescribed twice a
`
`day for a daily total dose of 40 mg [Ex1011, at 3].
`
`22.
`
`Even as early as the 2000-2001 time frame, shortly after Periostat®
`
`was approved, CollaGenex sought to develop a proprietary once-a—day Periostat®
`
`formulation. [Ex1073, p. 15 col. 1 1] 3]. In fact, I understand that CollaGenex,
`
`through its employee Robert Ashley filed patent application no. 60/281,854 (“the
`
`12
`
`

`

`Case [PR2013-00368 / Declaration ofPhilip Green
`
`’854 Application”) on April 5, 2001, directed to a once-daily form of doxycycline.
`
`[Ex1003 at 5:21-22, 6:26-29]. By 2001, CollaGenex had already become aware
`
`that Periostat® showed efficacy in the treatment of acne and reported that it was
`
`conducting clinical studies to investigate dermatological uses for Periostat®.
`
`[Ex1073, p. 15 col. 1 1| 4]. The dermatology community also became aware of
`
`Periostat®’s effectiveness in treating rosacea as an agent that is effective at blood
`
`levels below those reportedly linked to the side effects of traditional antibiotic
`
`doxycycline dosages. [EX1012; Ex1060; EX1056, fiHl 49].
`
`23.
`
`In the face of generic competition for Periostat®, CollaGenex set out
`
`to develop a proprietary once—a-day formulation of doxycycline to extend the
`
`patent life of Periostat®. [Ex1085]. CollaGenex eventually pursued a new drug
`
`application for Oracea® that was approved by the FDA in 2006. [Ex2094].
`
`Oracea® contains 30 mg of immediate release beads and 10 mg of delayed release
`
`beads. It is my understanding that Oracea® represents CollaGenex’s line extension
`
`strategy to recycle Periostat® as a 40 mg once-daily formulation. [Ex1086].
`
`C.
`
`Galderma
`
`24.
`
`In 2008, Galdemia completed its acquisition of CollaGeneX and
`
`Oracea® with it. [Ex2017, 1] 22]. In contrast to the dental-focused CollaGenex,
`
`Galderma is a specialty pharmaceutical company focused on the treatment of
`
`certain dermatological conditions including rosacea and acne. Its products include
`
`13
`
`

`

`Case IPR2013-003 68 / Declaration ofPhilip Green
`
`prescription pharmaceuticals and over-the-counter products. At the time of the
`
`acquisition, Galderma was well—established in the dermatology market, having
`
`significant marketing exposure to dermatologists. Even Dr. Grabowski
`
`acknowledges that Galderma was “an industry leader in the treatment of rosacea.”
`
`[Ex2017, fl 23]. Galderma was also marketing other treatments for rosacea,
`
`including the prescription-strength topical preparation MetroGel®.
`
`D.
`
`Sales and Profitabiligr
`
`25.
`
`Ex1083 shows Oracea®’s monthly prescriptions. CollaGenex began
`
`marketing Oracea in July 2006. By the time of Oracea®’s acquisition by Galderma
`
`in April 2003, Oracea®’s—
`
`.|
`
`26.
`
`Ex1080 also shows a pattern of growth in Oracea®’s-
`
`27.
`
`Ex1081 and Ex1082 present internal Galderma profit and loss
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`statements for Oracea®. In 2008,
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`Case IPR2013-003 68 / Declaration ofPhilip Green
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`—Ex1082 shows that by 2010,
`
`— —
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`-
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`E.
`
`The ’740 Patent
`
`28.
`
`I understand that the ’740 patent generally claims “an oral
`
`pharmaceutical composition which at a once-daily dosage will give steady state
`
`blood levels of doxycycline” within certain limits and having a composition
`
`consisting of immediate and delayed release portions. [EX1001, 1 1:57—64]. I
`
`understand that the ’740 patent also claims “a method for treating rosacea
`
`administering an oral pharmaceutical composition of doxycycline which at a once-
`
`daily dosage will give steady state blood levels of doxycycline” within certain
`
`bounds. [EXIOO], 12:63-67].
`
`29.
`
`The ’740 patent is included in the FDA’s Approved Drug Products
`
`with Therapeutic Equivalence Evaluations (also known as the “Orange Book”) for
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`Oracea®, which is formulated to be a once—daily capsule that contains 30 mg of
`
`immediate-release doxycycline and 10 mg of delayed—release doxycycline. Dr.
`
`Grabowski has asserted that Oracea® is a commercial embodiment of the ’740
`
`patent, and l have assumed that to be the case for purposes of my analysis.
`
`30. However, I understand that the “740 patent does not claim the
`
`invention of doxycycline—a well-known active pharmaceutical ingredient that has
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`been commercially available for decades—nor does it claim the inventions of
`
`doxycycline pellets, powders, granules, etc, that are recited elements in other
`
`claims of the ”740 patent as being included in the claimed compositions. [Ex1056,
`
`11 20-23]. Moreover, I also understand that the ’740 patent does not claim the
`
`invention of using low-dose doxycycline to treat rosacea, periodontal disease, acne
`
`or other ailments. [Ex1056, fiI 20-23].
`
`31.
`
`Rather, it is my understanding that these features already existed and
`
`were readily available in the prior art as embodied in Periostat®, as well as other
`
`prior art references identified by Amneal’s declarant, Dr. Van Buskirk. [Ex1022,
`
`1M 35-63]. Accordingly, it is my understanding that the claims at issue are limited
`
`to specific formulations of doxycycline for once-daily oral administration,
`
`configured with immediate release and delayed release components (at a ratio of
`
`30:10 for Oracea®), and to methods of treating rosacea with these specific claimed
`
`formulations. It is further my understanding that only these two features—once-
`
`daily dosing and IR/DR configuration—even arguably may be considered
`
`distinguishable features of the claims at issue in view of the prior art discussed by
`
`Dr. Van Buskirk. I understand that all other features were present in Periostat®
`
`tablets. [Ex1056, 1H] 5, 35].
`
`32.
`
`In reviewing Dr. Grabowski’s declaration, I found no discussion or
`
`analysis showing that he considered features of Oracea® that existed in the prior
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`art. In fact, Dr. Grabowski testified at his deposition that he did not consider the
`
`prior art and that apportioning the success of Oracea®’s sales that are attributable
`
`to the novel features of the claims were outside the scope of his analysis. [Ex1055,
`
`76:18 — 82:17] For example, Dr. Grabowski testified as follows:
`
`Q.
`
`So you didn’t consider prior art in forming your
`
`conclusions for purposes of your declaration?
`
`[Objection]
`
`A.
`
`I haven’t considered that. I think Dr. Rudnic, that’s
`
`in his area or other experts.
`
`Q.
`
`Do you understand that Amneal has contended that
`
`Periostat® is prior art to the Chang patents at issue in this
`
`IPR?
`
`[Objection]
`
`A.
`
`I don’t have that understanding.
`
`Q.
`
`So you didn’t consider that fact in forming your
`
`opinions?
`
`[Objection]
`
`A.
`
`I did not consider that fact. I analyzed Periostat as
`
`a competitive alternative. It’s in some of my figures what
`
`its performance has been in the use of rosacea, but
`
`I
`
`didn’t consider the issue of prior art.
`
`Q.
`
`You
`
`didn’t
`
`consider
`
`that
`
`in
`
`the
`
`issue of
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`determining nexus either?
`
`[Objection]
`
`A.
`
`I did not consider that. I relied on Dr. Rudnic that
`
`the product I did analyze is covered by the claims.
`
`***
`
`Q.
`
`But you don’t
`
`think that you should have
`
`undertaken to see if features of Oracea existed in the
`
`prior art to see if the claims were pertinent?
`
`MS. YEN: Object to form. Objection, outside the scope.
`
`Q.
`
`You think that’s outside the scope of your
`
`testimony?
`
`A.
`
`Yes, I do.
`
`[Ex1055, 76:24 — 82:7].
`
`33. Moreover, I understand that there are five other patents listed in the
`
`Orange Book that are not in the same family of patents as the ’740 patent: U.S.
`
`Patent Nos: 5,789,395; 5,919,775; 7,211,267; 7,232,572; and 8,603,506.
`
`[Ex2098]. Dr. Grabowski makes no attempt to consider what effects, if any, these
`
`other patents have in contributing to Oracea® sales. In my opinion, these
`
`omissions and his failure to consider the prior art are fundamental errors that
`
`render his conclusions unreliable.
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`VII. Opinions and Related Sapport
`
`Opinion 1: Oracea®’s sales are not due to the ’740 patent.
`
`34.
`
`It is my opinion that there is no nexus between the sales of Oracea®
`
`and the claims of the ’740 patent.
`
`35.
`
`I understand that commercial success supports a conclusion that a
`
`patented invention was not obvious because it suggests that an economic incentive
`
`existed to produce the invention. The concept is that if the invention were obvious,
`
`it would have been brought to market sooner by some other party in response to
`
`that incentive. As discussed below, most of Oracea®°s features existed in the prior
`
`art and, therefore, they are not pertinent to the commercial success analysis.
`
`A.
`
`The onlyfeatures 0f0racea® that are pertinent to establish nexus
`are arguably its once-daily dosing regimen and underlying IR/DR
`configuration
`
`36. Analysis of commercial success is dependent on the facts and
`
`circumstances surrounding the claimed inventions. As noted above, I understand
`
`that the claims of the ’740 patent are limited to compositions and methods of a
`
`once—daily doxycycline formulation, with an IR/DR configuration, and methods of
`
`treatment using the same. As discussed above, I understand that doxycycline and
`
`its use for the treatment of rosacea were apparently well—known, and that the ”740
`
`patent does not lay claim to having made that discovery. [Ex1001|.
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`37.
`
`I also understand, as discussed above, that the prior art Periostat®
`
`tablets were successfully used by dermatologists to treat rosacea. I understand from
`
`a clinical perspective that Oracea® materially differs from Periostat® only in that
`
`it is dosed once-daily instead of twice-daily. In all other respects, I understand that
`
`they are essentially the same, most notably in that both deliver 40 mg total
`
`doxycycline per day. In fact, Dr. Grabowski admits as much in his declaration,
`
`stating: “Like Periostat® (currently available in generic form as 20 mg
`
`doxycycline hyclate), Oracea® provides a treatment for rosacea that is effective at
`
`blood levels below those reportedly linked to the side effects of traditional
`
`antibiotic doxycycline dosages.” [Ex2017, 1] 21]. His only basis for trying to
`
`distinguish Oracea® from the prior art Periostat® tablets could be his statement
`
`that “Oracea®’s once-daily closing is more convenient than Periostat®’s twice-
`
`daily dosing.” [Id.] But as discussed below, other than the unsupported opinions of
`
`Dr. Webster, another of Supernus’ declarations, Dr. Grabowski has no evidence to
`
`assert that any “convenience” attributed to once-daily versus twice—daily is a driver
`
`of sales in the rosacea treatment market. In contrast, I have reviewed documents
`
`that group once-daily and twice-daily as both being convenient. [Ex1003, at 6:26-
`
`31].
`
`38.
`
`Thus, in considering whether the technology claimed by the ’740
`
`patent drives the sales of Oracea®, I understand that any such success must be
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`derived from a market need or demand for a once-daily 40 mg formulation of
`
`doxycycline instead of, e.g., twice—daily dosing achieving the same dosage amount
`
`per day, and the underlying IR/DR configuration claimed by the ”740 patent as
`
`driver of sales. To the extent that Oracea®’s sales are driven by other properties,
`
`such as its efficacy or tolerability, then I understand that there can be no nexus and
`
`that its sales are not pertinent to the secondary consideration of commercial
`
`success under prevailing law.
`
`39.
`
`To date, I have not seen any evidence that physicians and patients
`
`prefer Oracea® over other competing oral treatments because of its once-daily
`
`dosing instead of twice—daily. And Dr. Grabowski’s declaration does not provide
`
`such evidence either. Instead, I understand that during his deposition, Dr.
`
`Grabowski repeatedly maintained that Oracea®’s once-daily feature was not the
`
`exclusive driver of sales and that a substantial part of Oracea®’s popularity was
`
`being driven by its efficacy and tolerability—two features that were readily
`
`available in the prior art, particularly in Periostat®. [Ex1055, 72:7 — 74:24]. For
`
`example, Dr. Grabowski testified as follows:
`
`Q.
`
`If I told you that Oracea’s feature as being a once-
`
`daily regimen is the most important to sales, would you
`
`agree with me?
`
`[Objection]
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`Case [PR2013-00368 / Declaration ofPhilip Green
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`A.
`
`No, I wouldn’t agree with that.
`
`***
`
`Q.
`
`How does its performance against alternatives in
`
`the market answer my question as to why you don