Case 1:13-cv—OO421—SLR Document 143 Filed 07/27/15 Page 1 of 71 PageID #: 5882
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF DELAWARE
`
`INTENDIS GMBH, INTRASERV GMBH
`& CO. KG and BAYER HEALTHCARE
`
`PHARMACEUTICALS INC.,
`
`Plaintiffs,
`
`v.
`
`GLENMARK PHARMACEUTICALS
`LIMITED and GLENMARK
`
`PHARMACEUTICALS lNC., USA.,
`
`Defendants.
`
`\./\.r*~./s/\/\/-J\./&/\_/\/\./\/
`
`Civ. No. 13-421 (SLR)
`
`Rodger Dallery Smith, ll, Esquire of Morris, Nichols, Arsht & Tunnel! LLP, Wilmington,
`Delaware. Counsel for Plaintiffs. Of Counsel for Plaintiffs: Bradford J. Badke, Esquire,
`Sona De, Esquire, Crystal L Parker, Esquire, and Michael P. Kahn, Esquire of Ropes &
`Gray, LLP.
`
`Jeffrey Thomas Castellano, Esquire, David M. Fry, Esquire, and Karen Elizabeth Keller,
`Esquire of Shaw Keller LLP, Wilmington, Delaware. Counsel for Defendants. Of
`Counsel for Defendants: Linnea P. Cipriano, Esquire, Wyatt J. Delfino, Esquire, and
`Huiya Wu, Esquire of Goodwin Proctor LLP.
`
`MEMORANDUM OPINION
`
`Dated: Julyg-“l, 2015
`Wilmington, Delaware
`
`NPS EX. 2167
`CFAD V. NPS
`
`IPR2015-00990
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`Page 1
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`Page 1
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`NPS Ex. 2167
`CFAD v. NPS
`IPR2015-00990
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`Case 1:13—cv—O042l—SLR Document 143 Filed 07/27/15 Page 2 of 71 PagelD #: 5883
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`R dge
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`I.
`
`INTRODUCTION
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`This action arises out of the filing of an Abbreviated New Drug Application
`
`(“ANDA”) by defendant Glenmark Pharmaceuticals Limited‘ (“Glenmark
`
`Pharmaceuticals”) seeking to market a generic azelaic acid hydrogel. Plaintiff Bayer
`
`Healthcare Pharmaceuticals lnc. (“Bayer”) is the holder of approved New Drug
`
`Application (“NDA”) No. 21-470 for Finacea® Gel, 15%, indicated for topical treatment
`
`of inflammatory papules and pustules of mild to moderate rosacea. Plaintiff lntraserv
`
`GmbH & Co., KG (“lntraserv”) is the assignee of U.S. Patent No. 6,534,070 (“the ‘G70
`
`patent”) (“the patent-in-suit”) entitled “Composition with Azelaic Acid.” (D.l, 118, ex. 1 at
`
`1] 13) The ‘O70 patent is listed in the Food and Drug Administration’s (“FDA’s")
`
`publication titled “Approved Drug Products with Therapeutic Equivalence Evaluations"
`
`(known as the “Orange Book”) for Finacea®.2 (Id. at 1) 16) Plaintiff intendis GmbH
`
`(“lntendis”) (together with Bayer and lntraserv, “plaintiffs”) holds an exclusive license
`
`under the ‘O70 patent.
`
`(Id. at 11 14) Bayer is the exclusive distributor of Finacea®.
`
`(Id.
`
`at 11 22)
`
`On July 27, 2012, pursuant to 21 USC. § 3550), Glenmark Pharmaceuticals
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`submitted ANDA No. 204637, seeking approval to commercially manufacture, use, sell,
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`offer for sale and/or import a generic Azelaic Acid Gel, 15% formulation with a
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`paragraph lV certification stating that the ‘O70 patent is not infringed and is invalid.
`
`(D.l.
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`1 Formerly Glenmark Generics Limited.
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`2 The expiration date of the ‘070 patent, as listed in the Orange Book, is November
`18, 2018.
`(D.l. 118, ex. 1 at1I17)
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`Case 1:13-cv-00421-SLR Document 143 Filed 07/27/15 Page 3 of 71 PagelD #: 5884
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`1 at ‘mi 18-20) On January 30, 2013, defendant Glenmark Pharmaceuticals lnc.,
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`U.S.A.3 (together with Glenmark Pharmaceuticals, “defendants”) informed plaintiffs that
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`an ANDA had been filed and alleged that the ANDA product would not infringe the ‘O70
`
`patent.
`
`(D.l. 118, ex. 1 at 1] 39) Plaintiffs responded on March 14, 2013 by filing this
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`suit for infringement of the ‘G70 patent. The court held a Markman hearing and a final
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`pretrial conference on January 21, 2015. The court held a five-day bench trial from
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`February 5 - 11, 2015 on the issues of infringement and validity, and the parties have
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`since completed their post—trial briefing. The 30-month stay of FDA final approval on
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`Glenmark Pharmaceuticals ANDA expires on July 31, 2015. The court has jurisdiction
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`overthis matter pursuant to 28 U.S.C. §§ 1331, 1338(a), and 1400(b). Having
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`considered the documentary evidence and testimony, the court makes the following
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`findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure
`
`52(3).
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`ll. FINDINGS OF FACT AND CONCLUSIONS OF LAW
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`A. The Technology at issue
`
`1. Azelaic acid
`
`Azelaic acid has the following chemical structure:
`
`By the year 1998, azelaic acid formulations were being used as topical treatments for
`
`various skin disorders, including acne vulgaris, melisma, and rosacea. (D.l. 126 at
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`3 Glenmark Pharmaceuticals, formerly named Glenmark Generics lnc., U.S.A., is a
`wholly—owned subsidiary of Glenmark Generics.
`(D.l. 118, ex. 1 at ‘if 6)
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`2
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`Case l:l3—cv-00421-SLR Document 143 Filed 07/27/15 Page 4 of 71 PagelD #: 5885
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`300:17—301:4; D.l. 127 at 524:18-20, 525:1-8; D.l. 128 at 695123-696:1; D.l. 125 at 60:5-
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`13; ‘070 patent, col. 1:24-26) Prior to Finacea®, Bayer marketed and sold a topical
`
`20% azelaic acid cream, marketed abroad as Skinoren®“ and in the United States as
`
`Azelex,
`
`(D.l. 125 at 6022-10; D.l. 127 at 525:1-8; D.l. 128 at 76117-18)
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`2. Bayer’s Finacea® Gel
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`Finacea® Gel is a composition that contains azelaic acid as the therapeutically
`
`active ingredient as well as at least one triacylglyceride, propylene glycol, at least one
`
`polysorbate,5 at least one polyacrylic acid,5 lecithin, purified water, edetate disodium
`
`and benzoic acid.
`
`(D.l. 118, ex. 1 at W 24-37) Bayer’s development of Finacea® Gel
`
`unfolded as follows:
`
`a. Skinoren® Cream
`
`Prior to developing Finacea® Gel, Schering7 marketed and sold azelaic acid in
`
`the form of Skinoren®, a facial cream containing 20% azelaic acid. 8
`
`(D1. 125 at 59:20-
`
`60:13) Dr. Patrick Franke (“Dr. Franke”), one of the named inventors on the ‘O70
`
`patent, testified that Skinoren® cream suffered from unwanted agglomeration and
`
`phase separation.
`
`(D.l. 125 at 60:22-25) Because the “cream formulation has a pretty
`
`4 Skinoren®, Azelex, and Fenevin creams all have the same formulation.
`at 466219-23)
`
`(D.l. 127
`
`5 The azelaic acid, triacylglyceride, propylene glycol, and polysorbate are in an
`aqueous phase that further comprises water and salts.
`(D.l. 118, ex. 1 at 1) 28)
`
`5 Carbopol® 980, which acts as a gelling agent.
`
`(D.l. 118, ex. 1 at ml 29, 33)
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`7 Schering is a “German-based international pharma company that was [later] taken
`over by Bayer." (D.l. 125 at 57:14-16)
`
`(1) 20% azelaic acid; (2)
`8 Skinoren® cream is a topical formulation containing:
`triacylglycerides; (3) propylene glycol; (4) polysorbates; and (5) water and salts. (‘070
`patent, col. 1:16-26)
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`Case 1:13-cv-00421-SLR Document 143 Filed 07/27/15 Page 5 of 71 PagelD #: 5886
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`high load of azelaic acid, 20 percent, there was a risk and a problem that certain
`
`particles concentrated in so—called agglomerates, so there was .
`
`.
`
`. an inhomogeneity
`
`within th[e] cream emulsion” that caused a patient to “feel particles or agglomerates on
`
`the skin." (D.l. 125 at 61 :4-18) Dr. Franke testified that the agglomeration “caused
`
`some stability problems due to .
`
`.
`
`. liquid separation .
`
`.
`
`. so we had to reject batches.”
`
`(D.l. 125 at 61:14-18) As for phase separation, Dr. Franke explained that it “may occur
`
`when you have an emulsion and one of the phases separates, so liquid may not
`
`disperse anymore and it’s what we saw partly connected with the agglomeration.” (D.l.
`
`125 at 62:5-8)
`
`b. Formulation of Finacea® Get
`
`Dr. Karin Hoffman (“Dr. Hoffman”), defendants’ non-infringement and invalidity
`
`expert, testified that Schering opted to develop a gel formulation because it “had
`
`Skinoren® cream on the market and a gel formulation was a line extension.” (D.l. 128
`
`at 760:24—761 :4) Dr. Hoffman explained that “[t]o develop the brand further [through a
`
`line extension], it’s usual to come up with a second formulation on the market” in order
`
`“to increase sales.” (D.l. 128 at 76113-6) in contrast, Dr. Franke opined that the
`
`decision to reformulate Skinoren® was based on a desire to solve the "agglomerate
`
`instability problem” and to cure “disadvantages of the cream regarding the .
`
`.
`
`.
`
`application properties and cosmetic properties” such as a whitening effect, while still
`
`“maintain.[ing] the same efficacy of the cream.” (D.l. 125 at 6328-15, 77:4-10)
`
`Because an azelaic acid concentration of 20 percent carried a risk of
`
`agglomeration, Dr. Franke and his colleagues first “thought of reducing the azelaic acid
`
`in content” to 15 percent.
`
`(Id. at 61:4-7, 63:19-64:6) Dr. Franke testified that the
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`Case 1:l3—cv—OO421-SLR Document 143 Filed 07/27/15 Page 6 of 71 PagelD #: 5887
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`researchers “discussed on the one hand to keep close to the cream emulsion,
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`Skinoren® cream, and reformulate the cream in terms of thinking of how we can modify
`
`ingredients in quantity or quality, and on the other side we also thought about a
`
`hydrogel formulation type.” (Id. at 64:18-22) Between the cream emulsion and the
`
`hydrogel, “[t]here was certainly preference towards the cream formulation.” (Id. at
`
`65:13-17) The clinicians on the team “were afraid .
`
`.
`
`. that reformulated or new
`
`formulation would lose efficacy,” and the team “thought that we might have to cope with
`
`an efficacy problem.” (Id. at 66:2-9) Specifically, “there [was] the possibility that active
`
`ingredients are held back through this {hydrogel} matrix and interact.” (D.l. 125 at
`
`66:12-18) Dr. Franke testified that the team ultimately selected the hydrogel formulation
`
`for further testing because the hydrogel solved the “agglomeration problem and phase
`
`separation” and it also offered “an improvement of the cosmetic properties” regarding
`
`the “whitening effect and spreadability problems with the cream.” (id. at 66:19-21)
`
`After settling on a hydrogel formulation, the researchers initially “concentrated on
`
`being very similar to the cream” and later “switched to other ingredients and left out
`
`ingredients from the cream composition.” (Id. at 6824-21) in order to narrow down the
`
`list of potential formulations, the team began “characterizing and analyzing the stability
`
`of the compounds .
`
`.
`
`. also taking care ofthe rheological behavior” and additionally
`
`“assess[ing] the [cosmetic] application properties.” (Id. at 70:21-71 :5) According to
`
`Schering’s formulation development report, “[a] framework recipe based on a
`
`polyacrylate gel was available from an earlier acne therapeutic development using a
`
`related active ingredient," and “[t]he gel has already been clinically tested as placebo
`
`control in the indication acne and should be changed as little as possible .
`
`.
`
`. because of
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`Case 1:13-cv-OO421—Sl_R Document 143 Filed 07/27/15 Page 7 of 71 PagelD #: 5888
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`its high acceptance and tolerance.” (JTX 20 at BAYERO434130) The report stated that
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`“[f]urther development work concentrated on the choice and optimization of the
`
`moisture-retaining/regreasing complex.” (Id.) Dr. Franke explained that after “we saw
`
`that we {were} successfully on the track of solving the problems," the question remained
`
`of whether “there [was] still efficacy having now reduced azelaic acid and taken care of
`
`all other formulation parameters.” (D.l. 125 at 71 :8-12) Eventually, the researchers
`
`selected two 15% azelaic acid hydrogels, hydrogel A and hydrogel B, for further testing
`
`“[b]ased on the results in our lab.” (Id. at 71:13-20, 72:17-22)
`
`Dr. Franke agreed that the two gel formulations “were based on the same
`
`formulation concept” and they differed only in the kind of moisture-retaining/regreasing
`
`complex that was used.
`
`(D.l. 125 at 97:2-7; JTX 20 at BAYERO434141) Dr. Franke
`
`further agreed that hydrogel A “took .
`
`.
`
`. ingredients from the cream formulation but
`
`made it into a gel.” (D.l. 125 at 97:2-5) Specifically, the moisture-retainingiregreasing
`
`complex of the hydrogel A formulation included arlatone and cetearyl octonoate while
`
`the hydrogel B formulation — which would later become Finacea® — contained lecithin,
`
`triglycerides and polysorbate 80.
`
`(Id. at 95:11-17, 153:2-3; D.l. 128 at 75'/:4—10; JTX 20
`
`at 9) Dr. Franke testified that lecithin was chosen for the hydrogel B formulation
`
`because of its “amphiphilic structure” that allowed it to “interact in the skin layers,” and
`
`because it “fit in” with “oils and active ingredients.” (D.l. 125 at 6923-23) Triglycerides
`
`were seiected because they have “a caring effect on the skin” and “in terms of its
`
`polarity as an oil, [it is] very suitable being together with lecithin.” (Id. at 7014-10)
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`c. Franz diffusion cell test
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`Case 1:13-cv—OO421—SLR Document 143 Filed 07/27/15 Page 8 of 71 PagelD #: 5889
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`In the next phase of Finacea® development, Dr. Clemens Gunther (“Dr.
`
`Gunther), a named inventor on the ‘O70 patent, “performed in vitro percutaneous
`
`penetration studies,” otherwise referred to as Franz diffusion cell tests or Franz cell
`
`tests.
`
`(D.l. 125 at 142:16-21; D.l. 127 at 518:2-519:18; JTX 16 at BAYERO384907)
`
`Defendants’ expert, Dr. Bozena Michniak-Kohn (“Dr. Michniak-Kohn”), testified that
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`Franz cell tests are popular for ethical reasons as well as for the reason that
`
`researchers “don’t want a complicated screening method" in the initial stages of testing.
`
`(D.l. 127 at 518:21-519:16) insofar as the goal is to ultimately use the product on living
`
`human skin, Franz cell testing is “just a model” that is “used to predict what might
`
`happen when a drug is given to humans.” (D.l. 125 at 18320-25; see also id. at
`
`184:24-185:5; D.|. 127 at 516118-518:19; D.l. 128 at 764:22—765:10) The ability to use
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`Franz cell testing to predict the efficacy in vivo on human skin is limited by the fact that
`
`in vitro skin is dead, it is “treated in some way” such as cutting the fat layer, and “there's
`
`no blood supply.” (D.l. 127 at 517:13-518:8; see also D.l. 129 at 998125-999:5)
`
`The goal of the Franz cell test was to assess the “distribution of azelaic acid in
`
`the skin and the absorption across the skin" after treatment with the two hydrogel
`
`formulations and Skinoren® cream.
`
`(D.l. 125 at 142:24—143:1, 143217-20) To measure
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`absorption, Dr. Gtinther used a “Franz diffusion cell consistfing] of a donor chamber and
`
`a receptor chamber, which both are separated by the [mouse] skin sample acting as a
`
`membrane.” (Id. at 145:17—20) Mouse skin was the “established routine skin” used in
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`the laboratory, and they “did not have access at that time to human skin vivo,” the “gold
`
`standard” for Franz cell testing.
`
`(D.l. 125 at 146:1—8, 156120-24; D.l. 127 at 515:14)
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`Because “hairless mouse skin is much thinner than human skin .
`
`.
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`. [it] overexaggerates
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`Case 1:13-cv-00421-SLR Document 143 Filed 07/27/15 Page 9 of 71 PagelD #: 5890
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`the numbers you see when you use chemical penetration enhancers.” (D.l. 127 at
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`51618-51719; see also D.l. 125 at 146:9-13)
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`After selecting skin type and assembling the apparatus, “a thin layer of
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`formulation [is] placed on the skin" and “the drug enters the stratum comeum9 and
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`diffuses across the skin” then “partitions .
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`.
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`. into the receptor chamber” and “excess
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`f|ow—through” is captured and studied.“ (D.l. 125 at 148:1-149:4) Dr. Gunther
`
`explained that “[t]he concentrations in the receptor fluid resembled systemic absorption
`
`and thus might correlate or indicate systemic side effects.” (Id. at 156220-24) At the
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`end of the 24-hour period, Dr. Gunther measured “the distribution of azelaic acid in
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`various skin layers” including the stratum corneum and the underiying layers.
`
`(D.l. 125
`
`at 151 :10-16; JTX 16 at BAYER384907, -23)
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`Dr. Giinther performed two experiments for the Skinoren® cream and two
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`experiments for each of the hydrogel formulations, with four samples apiece for a total
`
`of eight data points per formulation.
`
`(D.|. 125 at 178:9-17; JTX 16 at BAYERO384916)
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`However, Dr. Gunther decided to only “use the results of the second [hydrogel]
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`experiment" as the “results of both experiments were not in agreement." (D.l. 125 at
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`1792125) Dr. Gunther “did not perform any statistical analysis of the results of [the]
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`study,” although he testified that it is not “standard practice in this type of
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`pharmacokinetic investigation” to perform statistical analysis.
`
`(D.I. 125 at 174:25—175:2;
`
`D.l. 126 at371:5-372121)
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`the stratum comeum, the epidermis and the dermis.
`9 Skin consists of three layers:
`(D.l. 126 at 290110-292:4) The site of action for the active ingredient is “somewhere in
`the living skin past the stratum corneum.” (D.l. 126 at 2922-11)
`
`1° The diffusion test was run for 24 hours, with sampling of the flow-through taken at
`2-hour time intervals.
`(D.l. 125 at 149:12-29)
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`Dr. Franke was “surprised to see such a good penetration behavior into living
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`skin tissue with one of our gel candidates” containing lecithin and triglycerides (hydrogel
`
`B).
`
`(D.l. 125 at 732-21) Dr. Franke testified that they did not “see similar results with
`
`the hydrogel formulation containing the ariatone and cetearyl octonoate ingredients
`
`[hydrogel A] that had been carried over from the cream.” (D.l. 125 and 73:22-5, 95:1-
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`17, 152:9-153:4; JTX 16 at BAYER384923) More specifically, Dr. Gunther explained
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`that, “after account[ing] for the fact that there was only 15 percent azelaic acid in the
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`hydrogels and 20 percent in the cream to begin with," the azelaic acid remaining in the
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`skin after treatment with hydrogel B was five times higher than compared to Skinoren®
`
`cream.
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`(D.l. 125 at 154:16-155:16; 174:15-22) Dr. Gunther “expected that the
`
`concentration in the skin and receptor fluid would point in the same .
`
`.
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`. direction,” but
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`“[i]n this case, it appeared to be vice-versa, meaning that the fraction of dose present at
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`the end of experiment in the skin was lower for Skinoren® cream versus the hydrogel
`
`B.” (D.|. 125 at 158114-19)
`
`in the words of plaintiffs‘ expert, Dr. Norman Weiner (“Dr.
`
`Weiner”), “the inventive formulation had more of the .
`
`.
`
`. azelaic acid going into the skin,
`
`but the prior art had more formulation going out of the siqin." (DJ. 128 at 917:2?»-918213)
`
`Dr. Franke testified that, following the Franz diffusion cell test, “we again
`
`collected our data from the pharmaceutical technology lab and took the results of Dr.
`
`Gunther, and .
`
`.
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`. proposed this new candidate” for clinical trials.
`
`(D.l. 125 at 74:3—7)
`
`Defendants propose that finances were the true motivator behind the decision to pursue
`
`hydrogel B, citing Schering’s formulation development report which stated that the
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`“decisive” difference leading to a preference for hydrogel B over hydrogel A was that
`
`“[t]he components of the moisture-retaining/regreasing complex in [hydrogel B] can be
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`processed cold, melting is unnecessary and makes large—scale production cheaper.”
`
`(JTX 20 at BAYER0434146)
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`d. Clinical tests
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`Next, a double-blind scarification test was performed “to detect small differences
`
`in irritation potential,” wherein hydrogel A and hydrogel B and Skinoren® cream “were
`
`applied once daily for 4 days in 20 [healthy human] subjects“ and skin reactions were
`
`assessed (hereinafter “the scarification test”).
`
`(DTX 92; DTX 111 at BAYER0384619)
`
`Prior to application, the subjects skin is “predamaged” by scarification to “mlmic[] the
`
`situation found in lesional skin.” (DTX 111 at BAYERO384630) The reaction score for
`
`hydrogel B was significantly higher than that for Skinoren® (DTX 111 at BAYER384644;
`
`DTX 93; D.l. 129 at 1037:17-103928), thus “confirm[ing] the results of the hairless
`
`mouse Franz flow-through diffusion cell study” (D.l. 129 at 1038:23—1039:3).
`
`Following the scarification test, an 8-week double-blind pilot study measuring
`
`percutaneous absorption was conducted to directly compare the initial clinical effect of
`
`hydrogel B to Skinoren®.
`
`(D.l. 125 at 162222-25; D.l. 129 at 1003:14-17; JTX 11 at
`
`BAYER154358) According to the Schering clinical study report, “[t]he aim of this
`
`exploratory pilot study was to investigate the effect of [hydrogel B} on acne lesions
`
`during an 8-week treatment period, as compared with that of [Skinoren®].” (JTX 11 at
`
`BAYERO154358) The study looked at “the relative decrease in the sum of facial
`
`papules and pustules,” as well as “the amounts of [azelaic acid] excreted with the urine.”
`
`(JTX 11 at BAYER0154358) Dr. Gunther testified that “there was no significant
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`treatment difference between the Skinoren® cream and Finacea® or later on Finacea®
`
`hydrogel with regard to the efficacy in reducing the number of acne lesions.” (D.l. 125
`
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`at 167219-22; D1. 126 at 193:19-24, 373223-37421; JTX 11 at BAYER154393)
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`Additionally, Dr. Weiner admitted that “the progression of the efficacy over time was
`
`similarfor both treatments." (D.l. 127 at 443:23—444:4) According to Dr. Gunther, there
`
`was also “no statistical significance in urinary excretion of azelaic acid .
`
`.
`
`. and this is
`
`certainly positive in terms of the point that this does not give rise to concerns related to
`
`systemic safety.” (D.l. 125 at 166:2-6; JTX 11 at BAYERO154360) Dr. Gunther opined
`
`that a study with only 30 patients (15 per treatment group) means it is “likely that such
`
`[a] study does not bring statistical power.” (D.l. 125 at 165:4-7; JTX 11 at
`
`BAYER0154370)
`
`The company proceeded with full-scale clinical trials comparing Finacea® to
`
`placebo formulations as “required by regulator purpose for submission.” (D.l. 126 at
`
`20823-8) in 2002, Dr. Franke gave a presentation to the marketing and management
`
`members of the project team detailing the benefits of Finacea® over Skinoren®. (JTX
`
`3)
`
`In the presentation, Dr. Franke identified three benefits of hydrogel B:
`
`(1) no
`
`agglomeration or phase separation; (2) good results in the clinics and maintenance of
`
`efficacy; and (3) cosmetic benefits.
`
`(D.l. 125 at 7622-22; JTX 3 at BAYER6527-530)
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`Eventually, FDA approval was sought and Finacea® gel was approved and indicated for
`
`treating rosacea.
`
`(D.l. 125 at 7428-15, 168218-25)
`
`3. The asserted patent
`
`The ‘070 patent issued on March 18, 2003, and claims priority to U.S. Provisional
`
`Application No. 60/074,850 (“the ‘850 provisional”), filed on February 12, 1998.
`
`Plaintiffs assert independent claim 1 and dependent claims 2-12. The ‘O70 patent
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`Case 1:13—cv-OO421—SLR Document 143 Filed 07/27/15 Page 13 of 71 PagelD #: 5894
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`claims azelaic hydrogel compositions, including Finacea®, as well as methods for
`
`treating rosacea and other skin conditions.
`
`(‘O70 patent, cols. 6:27-8:59)
`
`Independent claim 1 reads:
`
`1. A composition that comprises:
`
`(i) azelaic acid as a therapeutically active ingredient in a concentration of 5
`to 20% by weight,
`
`(ill) at least one triacylglycerideil” in a concentration of 0.5 to 5% by
`weight,
`
`(iv) propylene glycol, and
`
`(v) at least one polysorbate, in an aqueous phase that further comprises
`water and salts, and the composition further comprises
`
`(ii) at least one polyacrylic acid, and
`
`(vi) lecithin,
`
`wherein the composition is in the form of a hydrogel.
`
`(Id. at col. 6:28-38)
`
`The specification of the ‘D70 patent identifies Skinoren® cream and EP 0 336
`
`880 as relevant prior art cream formulations that contain azelaic acid.
`
`(‘O07 patent, col.
`
`1 at 16—36) Skinoren® cream is described as “the closest prior art.” (Id. at col. 1:36)
`
`The specification also identifies non-azelaic acid prior art “emulsions” or
`
`“nanoemulsions” such as the composition disclosed in international Application WO
`
`96/11700.
`
`(‘O70 patent, col. 1:37-49)
`
`“ The term “triacylglyceride” means “triglyceride.” (D.l. 118, ex. 1 atfl 18)
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`Case 1:13-cv-00421-SLR Document 143 Filed 07/27/15 Page 14 of 71 PagelD #: 5895
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`Example 1 describes the formulation and processing steps for producing the
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`claimed hydroge|.‘2 (‘070 patent, col. 5:20-39) Specifically, a “pre-emulsion” is formed
`
`from a mixture of benzoic acid, EDTA, triglycerides, polysorbate 80, lecithin, and
`
`propylene glycol.
`
`(Id. at col. 5:20-32) The “pre-emulsion” is homogenized, and then
`
`polyacrylic acid and azelaic acid are added.
`
`(‘O70 patent, col. 5:32-34) Finally, a gel is
`
`formed by adding sodium hydroxide, which raises the pH of the solution.
`
`(Id. at col.
`
`5:34-36) The specification emphasizes that “[t}he presence of polyacrylic acid” is
`
`essential” and “decisive forthe production of the hydrogel.” (Id. at col. 2:51:52) The
`
`specification defines polyacrylic acid as “an anion-active polymerizate of acrylic acid,
`
`which is only partially water-soluble" where “[t}he one-percent aqueous suspension has
`
`a pH of 3 and approximately the same viscosity as water.” (Id. at col. 3:42-45) The
`
`specification states that “gel formation and the production of highly viscous products”
`
`only occurs during neutralization (raising the pH) of polyacrylic acid.
`
`(Id. at col. 3:46-48)
`
`One named advantage of the claimed composition is that it “allows a larger
`
`amount of pharmaceutical active ingredient to penetrate into living skin layers and/or
`
`cutaneous organs.” (Id. at col. 2:29-40) Dr. Weiner, Dr. Michniak-Kohn and Dr.
`
`Gunther all testified that the claim of “increased bioavailability” is solely supported by
`
`the results from the Franz diffusion cell test, as described in example 2 of the
`
`specification.” (D.l. 125 at 170;21-717:8; D.l. 128 at 932:2-8; D.l. 129 at 1013:4-6; ‘070
`
`patent, 5:40-6:26)
`
`*2 The same processing steps are used to make Finacea®.
`BAYER536793-95; D.l. 126 at 303:2-305:5)
`
`(JTX 25 at
`
`13 The trade name for polyacrylic acid is Carbopol®.
`
`14 The advantage of increased bioavailability was referenced by the patent examiner
`in the “reasons for allowance,” in which the examiner wrote that “[t]he prior art of record
`
`13
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`Case 1:13-cv-OO421—SLR Document 143 Filed 07/27/15 Page 15 of 71 PagelD #: 5896
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`Another named advantage of the claimed composition is that when lecithin is 1%
`
`or less by weight, the composition “does not form any standard nanoemulslon” but
`
`rather forms a gel “that comprises a homogenous mass with virtually no vesicles” as
`
`detected by a scanning electron microscope. (‘070 patent, cois. 2:61—3:3) Dr. Franke
`
`testified that the electron microscopy was performed on Finacea® by Dr. Rolf Schubert
`
`(“Dr. Schubert”) at the Albert Ludwig Universitat.
`
`(D.l. 125 at 111:1-19) in a report
`
`submitted to Dr. Hoffman, Dr. Schubert wrote that “the examinations have proven to be
`
`particularly difficult” as “the processing methods you recommended for us were not
`
`optimally suited to separate and identify structures to a sufficient extent.” (D.l. 125 at
`
`112:22-113:3; DTX 16 at BAYERO524392) Dr. Schubert stated that “[f]urther
`
`examinations will have to be performed,” although no further examinations were
`
`conducted following the initial report.
`
`(D.l. 125 at 113:7—114:4; DTX 16 at
`
`BAYER0524392) Dr. Schubert concluded that, given the heterogeneity of the samples,
`
`“more images must be used for interpretation.” (D.l. 125 at 115:5-9; DTX 16 at
`
`BAYERO524404)
`
`4. The accused ANDA product
`
`a. Overview
`
`Defendants’ ANDA product (“the accused product” or “the accused formulation”)
`
`is a composition for topical administration to treat rosacea that contains azelaic acid as
`
`the therapeutically active ingredient at a concentration of 15% by weight, isopropyl
`
`neither teaches nor suggests an azelaic acid hydrogel composition containing instant
`amount of azelaic acid in the form of a hydrogel and said hydrogel enabling over four
`times higher bioavailability and penetration of azelaic acid .
`.
`. compared to conventional
`creams/emulsions of the prior art.” (JTX 2.2 at BAYER 547)
`
`14
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`Case 1:13-cv-00421-SLR Document 143 Filed 07/27/15 Page 16 of 71 PagelD #: 5897
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`myristate at a concentration of 2% by weight, propylene glycol at a concentration of
`
`12% by weight, at least one polysorbate,‘5~ 15 at least one polyacrylic acid” at a
`
`concentration of 0.85% by weight, purified water, benzoic acid at a concentration of
`
`0.10% by weight, and edetate disodium at a concentration of 0.10% by weight.
`
`(D.l.
`
`118, ex. 1 at ‘ml 44-59)
`
`b. Formulation of the accused product
`
`Mr. Kamal Mehta (“Mehta"), defendants’ corporate witness, testified that
`
`defendants used, inter alia, “details about Finacea® [that] are available in the public
`
`domain” such as the Finacea® label to develop the accused formulation.
`
`(D.l. 126 at
`
`214211-16; PTX 214 at GMG_710) For the first experimental batch, Mehta agreed that
`
`defendants used “the formulation that was listed in the patent." (DJ. 126 at 220:12-19;
`
`see also JTX 54 at GMG_VP1266—67) Like the procedure described in example 1 of
`
`the ‘070 patent, defendants’ manufacturing process involved dissolving EDTA and
`
`benzoic acid in water, adding additional excipients to create a homogenized “pre-
`
`emulsion,” adding polyacrylic acid and azelaic acid, and finally neutralizing with sodium
`
`hydroxide to achieve “orientation of the gel.” (JTX 39 at GMG__0014878; JTX 53 at
`
`GMG_VP798—800; ‘O70 patent, col. 5:22-39)
`
`in their original ANDA submission, defendants detailed experimental trials in
`
`which triglyceride and lecithin were swapped for alternate excipients, with the goal of
`
`“match[ing] the appearance .
`
`.
`
`. and chemical stability of the [experimental] gel with the
`
`15 Polysorbate 80.
`
`15 The azelaic acid, propylene glycol, and polysorbate are in an aqueous phase that
`further comprises water and salts.
`(D.l. 118, ex. 1 at 11 51)
`
`‘7 Carbopol® 980, which acts as a gelling agent.
`
`(D1. 118, ex. 1 at ml 52, 56)
`
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`Case 1:13-cv—OO421-SLR Document 143 Filed 07/27/15 Page 17 of 71 PagelD #: 5898
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`reference-listed drug Finacea® Gel 15%.” (JTX 53 at GMG_VPOOO776; D.l. 126 at
`
`220121-227210) Defendants’ overall “[o]bjective was to develop a formulation which
`
`doesn‘t fall in the [scope of} the patent claims.” (D.l. 126 at 217:14~23) Defendants
`
`determined that batch 540/O3-O8/O36 (“batch 036'’) and batch 540/O3-O8/O41 (“batch
`
`O41”) were “satisfactory” formulations.
`
`(JTX 53 at GMG_VPO0O776)
`
`ln batch 036,
`
`PPG-20-Methyl glucose ether distearate was substituted for triglyceride and lecithin.
`
`(/d.) in batch O41 - which would later become the accused formulation — isopropyl
`
`myristate was substituted for triglyceride and lecithin “to improve the penetration.” (Id.;
`
`JTX 54 at GMG__VPOO1272; D.l. 126 at 225:14-226:13) In their original ANDA
`
`submission, defendants listed the “function” of isopropyl myristate, lecithin and medium
`
`chain triglyceride as “penetration enhancer.” (JTX 53 at GMG_VP00O775) With the
`
`exception of the substitution of isopropyl myristate for triglyceride and lecithin, all other
`
`excipients in the accused product remained “exactly the same” as those in Finacea®.
`
`(D.|. 126 at 3-13:18-21; JTX 53 at GMG_VPOOO775; JTX 54 at GMG_VPO01266)
`
`c. Franz diffusion cell and clinical testing
`
`Defendants performed Franz diffusion cell tests with human cadaver skin,
`
`comparing the rate of penetration of azelaic acid across the skin layers between batch
`
`036, batch 041 and Finacea® gel.
`
`(D.l. 126 at 233218-2:35:12; JTX 54 at
`
`GMG_VP1271-73; JTX 38 at GMG_12942-45, -949) in the Franz diffusion cell test,
`
`defendants applied a finite dose of product, then measured penetration and absorption
`
`of azelaic acid over a period of 48 hours.
`
`(JTX 38 at GMG__‘i 2942, 44-49) For both
`
`batch 041 and Finacea®, “more azelaic acid stayed in the epidermis skin layer than
`
`what went through to the reservoir." (D.l. 128 at 720:9~12; JTX 38 at GMG_OO‘i2948)
`
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`Case 1:13-cv-00421—SLR Document 143 Filed 07/27/15 Page 18 of 71 PageiD #: 5899
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`Compared to one another, nearly twice as much azelaic acid remained in the epidermis
`
`following treatment with Finacea® than following treatment with batch 041.
`
`(JTX 38 at
`
`BMB__0012947) Both batch 041 and Finacea® reached a peak flux between 1 to 5
`
`hours after application, although the absorption levels declined more rapidly for batch
`
`041 than for Finacea®.
`
`(JTX 38 at BMB__0012947; D.l. 127 at 581 :9-17) Mehta
`
`admitted that defendants selected batch 041 over batch 036 because it was “close[r] to
`
`the reference product, Finacea®.” (D.l. 126 at 214:8-11, 241:8-10)) The study
`
`concluded that “there were no statistically significant differences" across the
`
`parameters, and “the flux profiles suggest that the test formulations are similar to, but
`
`not identical to, the Finacea® reference formulation.” (JTX 38 at GMG_0012949)
`
`Mehta agreed that “once [defendants] got the results from the cadaver study with the
`
`isopropyl-myristate containing formulation, [they] didn’t investigate .
`
`.
`
`. any other
`
`alternative formulations." (D.l. 126 at 227:6—11