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`THE UNITED STATES PATENT AND TRADEMARK OFFICE
`______________________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________________________
`
`PHIGENIX INC.,
`Petitioner
`v.
`IMMUNOGEN, INC.
`Patent Owner
`______________________________________
`
`Case IPR2014-00676
`U.S. Patent No. 8,337,856
`______________________________________
`
`
`
`
`
`
`
`DECLARATION OF JOHN C. JAROSZ
`
`
`IMMUNOGEN 2131, pg. 1
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`B.
`
`
`B.
`
`
`I.
`
`II.
`
`TABLE OF CONTENTS
`INTRODUCTION ...........................................................................................1
`A.
` Assignment ............................................................................................ 1
`B.
`Qualifications ........................................................................................ 2
`
`C.
`Compensation ........................................................................................ 3
`
`D.
`Evidence Considered ............................................................................. 3
`
`E.
`Summary of Opinions ......................................................................... 17
`
`BACKGROUND .......................................................................................... 20
`Parties to the Inter Partes Review ...................................................... 20
`A.
`
`1.
`Phigenix, Inc. ........................................................................... 20
`
`2.
`ImmunoGen, Inc. ..................................................................... 20
`
`3.
`Genentech, Inc. ........................................................................ 21
`
`Human Epidermal Growth Factor Receptor 2 (“HER2”)
`Positive Breast Cancer ........................................................................ 21
`1.
`Various Treatments of HER2-Positive Metastatic
`
`Breast Cancer ........................................................................... 23
`(a) Herceptin® ...................................................................... 23
`Perjeta® .......................................................................... 24
`(b)
`(c) Xeloda® .......................................................................... 25
`Tykerb® .......................................................................... 26
`(d)
`Ixempra® ........................................................................ 26
`(e)
`Relevant Marketplace: HER2-Positive Metastatic Breast
`Cancer .................................................................................................. 27
`1.
`Therapy for HER2-Positive Metastatic Breast Cancer ............ 27
`
`(a)
`First-Line Therapy ......................................................... 27
`(b)
`Second-Line Therapy .................................................... 28
`(c)
`Third-Line Therapy ....................................................... 28
`D.
`The ’856 Patent ................................................................................... 29
`
`FRAMEWORK OF ANALYSIS ................................................................. 31
`III.
`IV. COMMERCIAL SUCCESS OF THE PATENTED PRODUCT
`KADCYLA .................................................................................................. 32
`A.
` Marketplace Success ........................................................................... 33
`1.
`Sales ......................................................................................... 33
`
`Relative Success of Kadcyla ............................................................... 36
`i
`
`C.
`
`
`IMMUNOGEN 2131, pg. 2
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
`
`
`
`3.
`
`
`
`1.
`2.
`3.
`4.
`
`Relative Sales of Kadcyla ........................................................ 36
`Relative Performance ............................................................... 38
`Third-Party Views .................................................................... 42
`Licensing Activity .................................................................... 45
`(a) Genentech/ImmunoGen License Agreements ............... 45
`Nexus Between Marketplace Success and Patented
`Invention .............................................................................................. 49
`1.
`Kadcyla and the Claims of the ’856 Patent ............................. 49
`
`2.
` Medical Benefits of the Patented Invention/Kadcyla .............. 50
`(a)
`Importance of the Benefits of the ’856 Patent
`Including Benefits Over Prior Available
`Treatments ..................................................................... 51
`(b) Marketing and Promotion of the Benefits of the
`Claimed Invention ......................................................... 52
`(i)
`First Antibody-Drug Conjugate for
`HER2-Positive MBC ............................................ 53
`(ii) Multiple Antitumor Activities from a
`Single Agent ......................................................... 54
`(iii) Extended Median OS and PFS ............................. 59
`Product Promotion and Commercial Success .......................... 61
`(a)
`Informative and Persuasive Advertising ....................... 61
`(b)
`Pharmaceutical Demand Factors ................................... 63
`(i)
`Impact of Product Characteristics ........................ 64
`(ii)
`Impact of Product Quality .................................... 66
`Impact of Promotional Efforts ....................................... 67
`(c)
`Impact of Pricing ........................................................... 68
`(d)
`4.
`Kadcyla Marketing Expenditures ............................................ 69
`
`CONCLUSIONS .......................................................................................... 71
`
`C.
`
`
`V.
`
`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`ii
`
`IMMUNOGEN 2131, pg. 3
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`I, John C. Jarosz, do hereby declare as follows:
`
`I.
`
`INTRODUCTION
`
`1.
`
`I am over the age of eighteen (18) and otherwise competent to make
`
`this declaration.
`
`A.
` Assignment
`
`2.
`
`I have been retained as an expert on behalf of ImmunoGen, Inc.
`
`(“ImmunoGen”) in the above-captioned inter partes review (“IPR”).
`
`3.
`
`I understand that the Patent Trial and Appeal Board has granted
`
`Phigenix, Inc.’s petition to institute this IPR regarding claims 1-8 of U.S. Patent
`
`No. 8,337,856 (“the ’856 Patent,” Ex. 1001) on obviousness grounds.
`
`4.
`
`I also understand that ImmunoGen is the assignee of the ’856 Patent
`
`and that Walter Blättler and Ravi V. J. Chari are the named inventors. I further
`
`understand that the ’856 Patent describes and claims, among other things, the
`
`immunoconjugate known as T-DM1, which is marketed under the brand name
`
`Kadcyla®, and its use for the treatment of HER2-positive, metastatic (or “late-
`
`stage”) breast cancer.
`
`5.
`
`I have been asked by counsel to assess whether the sales of Kadcyla
`
`can be deemed a commercial success, and whether such success is attributable to
`
`1
`
`IMMUNOGEN 2131, pg. 4
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`the inventions claimed in the ’856 Patent. For the reasons described below, I have
`
`concluded that Kadcyla is a commercial success, and its sales success is
`
`attributable to the inventions claimed in the ’856 Patent.
`
`B.
` Qualifications
`
`6.
`
`I am a Managing Principal of Analysis Group, Inc. (“AG”) and
`
`Director of the firm’s Washington, DC office. AG is an economic, financial, and
`
`strategy consulting firm with offices in Beijing, China; Boston, MA; Chicago, IL;
`
`Dallas, TX; Denver, CO; Los Angeles, CA; Menlo Park, CA; Montreal, Quebec;
`
`New York, NY; San Francisco, CA; and Washington, DC. We provide research
`
`and analysis in a variety of business, litigation, and regulatory matters, and have
`
`particular expertise in intellectual property (“IP”) matters, having been engaged in
`
`numerous cases involving patents, copyrights, trademarks, trade secrets, and
`
`unfair competition.
`
`7.
`
`I am an economist whose specialty is IP valuation, monetary relief
`
`assessment, and the economics of commercial success. I have been involved in
`
`more than 350 such engagements spanning a broad range of industries, including
`
`pharmaceutical products. I received a J.D. from the University of Wisconsin and
`
`an M.A. in Economics from Washington University in St. Louis. I also hold a
`
`2
`
`IMMUNOGEN 2131, pg. 5
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`B.A. in Economics and Organizational Communication from Creighton University
`
`in Omaha. Additionally, I am a member of several professional associations,
`
`including the Licensing Executives Society. I have also been a speaker on
`
`numerous occasions on a variety of financial, economic, and valuation topics.
`
`8.
`
`A copy of my curriculum vitae is provided as EX 2132, which
`
`includes a more detailed description of my education and professional experience.
`
`C.
` Compensation
`
`9. My firm has billed ImmunoGen, Inc. on a time-and-materials basis
`
`for my work and that of my colleagues. My hourly billing rate, which includes my
`
`study of pertinent issues and materials, and any testimony I may give, is $640. I
`
`also have directed the efforts of other staff members of AG, whose hourly billing
`
`rates range from $190 to $485. My compensation is not, in any way, dependent
`
`on the outcome of this proceeding or on the substance of my opinion.
`
`D.
` Evidence Considered
`
`10.
`
`In undertaking my study, I have considered information from a
`
`variety of sources—each of which is a type that is reasonably relied upon by
`
`experts in my field—including the following documents:
`
`3
`
`IMMUNOGEN 2131, pg. 6
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`Paper or
`Exhibit #
`
`Description
`
`5
`1001
`1008
`
`2021
`
`2022
`
`2025
`
`2103
`
`2105
`
`2118
`
`2127
`
`2145
`
`2147
`
`Phigenix’s Petition for Inter Partes Review in IPR2014-00676
`U.S. Patent No. 8,337,856 B2
`Herceptin® Label, September 1998
`"FDA Approves New Late-Stage Breast Cancer Drug Kadcyla," pp.
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` (last accessed July 28, 2014)
`cancer-drug-kadcyla/
`"Breast Cancer Drug Targets Tumor Cells, Spares Healthy Ones," pp.
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`
`Kadcyla™ Prescribing Information, pp. 1-21(2013)
`
`Declaration of Linda T. Vahdat, M.D.
`
`Declaration of Joyce Ann O'Shaughnessey, M.D.
`
`Herceptin FDA Approval Letter, mailed September 25, 1998
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`
`4
`
`IMMUNOGEN 2131, pg. 7
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`2161
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`2178
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`2181
`2194
`2195
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`2196
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`2197
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`2198
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`2199
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`2200
`
`2201
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`2202
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`2203
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`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`Phigenix Website, Our Products at http://phigenix.com/our-products/
`(last accessed Dec. 18, 2014)
`FDA Clinical Review of BLA 98-0369, Herceptin, Trastuzumab,
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`
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`250lbl.pdf
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`Period Ending 06/30/14
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`accessed Dec. 8, 2014)
`
`5
`
`IMMUNOGEN 2131, pg. 8
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`Treatment Options for HER2+ Metastatic Breast Cancer: a Back-to-
`Back Presentation of PERJETA and KADCYLA, HPK0001792100
`American Cancer Society. Breast Cancer Facts & Figures 2013-2014
`
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`approves-genentechs-kadcyla-ado-tras (last accessed Dec. 8, 2014)
`
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`
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`approves-perjeta-pertuzumab-for-peop (last accessed Jan. 15, 2015)
`
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`6
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`IMMUNOGEN 2131, pg. 9
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`IPR2014-00676
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`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`Xeloda® FDA Approval Letter, mailed April 30, 1998, available at
`http://www.accessdata.fda.gov/drugsatfda_docs/appletter/1998/20896
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`
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`s10s11ltr.pdf
`
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`7
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`IMMUNOGEN 2131, pg. 10
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`IPR2014-00676
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`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`Bristol-Myers Squibb Press Release entitled “FDA Approves
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`
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`
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`
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`8
`
`IMMUNOGEN 2131, pg. 11
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`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
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`
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`
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`
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`9
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`IMMUNOGEN 2131, pg. 12
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`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
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`2243
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`2244
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`2245
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`2246
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`2247
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`2248
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`2249
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`
`10
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`IMMUNOGEN 2131, pg. 13
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`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
`“FDA Approves First-Of-Its-Kind Breast Cancer Drug,” (2013)
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`IMMUNOGEN 2131, pg. 14
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
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`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
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`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
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`IMMUNOGEN 2131, pg. 17
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
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`15
`
`IMMUNOGEN 2131, pg. 18
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
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`16
`
`IMMUNOGEN 2131, pg. 19
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`IPR2014-00676
`Declaration of John C. Jarosz (Exhibit 2131)
`
`
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`
`11. My analysis and opinions in this case are based on my personal
`
`knowledge, education, and research. In connection with the opinions and
`
`conclusions contai