UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`COALITION FOR AFFORDABLE DRUGS II LLC,
`Petitioner,
`v.
`NPS PHARMACEUTICALS, INC.,
`Patent Owner.
`____________
`Case IPR2015-01093
`Patent 7,056,886
`____________
`
`DECLARATION OF GORDON RAUSSER, Ph.D. UNDER 37 C.F.R. § 1.68
`IN SUPPORT OF PATENT OWNER’S RESPONSE TO THE PETITION
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`TABLE OF CONTENTS
`I. Qualifications ................................................................................................. 1
`II. Scope of Work ................................................................................................ 4
`A. Assignment............................................................................................... 4
`B. Data and documents considered .............................................................. 6
`C. Compensation .......................................................................................... 7
`III. Summary of Opinions .................................................................................... 7
`IV. Background..................................................................................................... 9
`A. Short bowel syndrome and SBS-IF .......................................................10
`1. Treatment with parenteral nutrition ..................................................13
`2. Drugs to increase absorptive capacity of the intestines ....................19
`3. Incidence and prevalence of SBS-IF ................................................22
`4. Prognosis for SBS-IF patients ..........................................................23
`B. Gattex® ...................................................................................................25
`V. Opinion 1: Gattex® addressed a long-felt, unresolved need for
`an SBS drug that could reduce patients’ dependence on PN .......................27
`A. There was a long-felt need .....................................................................27
`1. Medical costs of PN dependence ......................................................31
`2. Cost of inability to work ...................................................................32
`3. Reducing reliance on PN can increase life-expectancy
`and greatly improve quality of life and economic well-
`being ..................................................................................................34
`B. Before Gattex®, no medication successfully reduced
`SBS-IF patients’ dependence on PN......................................................34
`C. Gattex® addressed this long-felt need by reducing SBS-IF
`patient dependence on PN .....................................................................37
`VI. Opinion 2: Gattex® has been a commercial success ....................................40
`A. Gattex® has steadily grown its base of SBS patients .............................41
`B. Gattex’s® ability to command a strong price in the market
`is further evidence of commercial success ............................................43
`C. Gattex® has had high sales and rapid sales growth ................................45
`D. Gattex® exceeded the pre-launch sales expectations of NPS ................48
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`E. Gattex’s value contributed to a quadrupling of NPS’s stock
`price ........................................................................................................49
`F. Gattex® was a key value driver in Shire’s $5.2 billion
`acquisition of NPS .................................................................................55
`VII. Opinion 3. There is a clear nexus between Gattex®’s
`commercial success and the claims of the ‘886 patent ................................56
`A. Gattex® would not have been commercially viable if it had
`not been stable; therefore, all sales of Gattex® have a nexus
`to the ‘886 patent ...................................................................................57
`B. Gattex®’s commercial success cannot be attributed to
`factors unrelated to its patented properties ............................................62
`C. Gattex® patient support program is consistent with
`programs offered for other similarly positioned drugs ..........................65
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`1.
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`I am an economist with expertise in intellectual property valuation and
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`the commercial performance of pharmaceutical products. I was retained by
`
`counsel for NPS Pharmaceuticals, Inc. (“NPS”) to evaluate, from an economic
`
`perspective, objective evidence regarding the non-obviousness of U.S. Patent No.
`
`7,056,886. The claims of this patent are directed to stable formulations of GLP-2
`
`or analogs thereof, and encompass the formulation for Gattex®,1 a drug product
`
`used to treat patients suffering from short bowel syndrome who are dependent
`
`upon parenteral (intravenous) nutrition. This declaration addresses three types of
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`objective evidence: 1) long-felt unmet need, 2) commercial success, and 3) nexus
`
`between commercial success and the invention claimed by the challenged patent.
`
`I.
`I am the Robert Gordon Sproul Distinguished Professor at the
`
`QUALIFICATIONS
`
`2.
`
`University of California, Berkeley, where I teach both Economics and Statistics at
`
`the graduate and undergraduate levels. I received a Ph.D. with Highest Honors
`
`from the University of California at Davis in 1971, and in 1973 I was awarded a
`
`Postdoctoral Fellowship in Economics and Statistics at the University of Chicago. I
`
`am an elected Fellow of the American Association for the Advancement of Science
`
`(1994), the American Statistical Association (1991), and the Agricultural &
`
`
`1 Gattex® is a registered trademark.
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`Applied Economics Association (1990). In 1987, I was a Fulbright Scholar in
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`Australia.
`
`3.
`
`In my academic career, I have held positions teaching economics and
`
`statistics at many universities including the University of Chicago, Harvard
`
`University, the University of California at Berkeley, University of Illinois, Iowa
`
`State University, the University of California at Davis, and Hebrew University. I
`
`served as Dean of the College of Natural Resources at the University of California,
`
`Berkeley from 1994–2000, and have three times been selected by my colleagues as
`
`Chair of my academic department. I have won 18 national awards and honors for
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`my teaching and research.
`
`4.
`
`I have published extensively in academic and professional journals on
`
`the application of statistical methods, market dynamics, industrial organization,
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`environmental and resource economics, public policy, and futures and options.
`
`During my academic career, I have published more than 250 articles, books and
`
`book chapters. In addition, I have written more than 100 commissioned papers,
`
`governmental reports, and working papers. My upcoming book, entitled
`
`Structuring Public-Private Research Partnerships for Success: Empowering
`
`University Partners, is devoted to the topic of research partnerships and how they
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`can best enhance the value of intellectual property. I am currently the Editor of the
`
`Annual Review of Resource Economics. I am a past Associate Editor of the
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`2
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`Journal of the American Statistical Association and the Journal of Economic
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`Dynamics and Control, and a past Editor of the American Journal of Agricultural
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`Economics.
`
`5.
`
`From 1986 to 1987, I was Senior Economist at the President’s Council
`
`of Economic Advisors with responsibility for finance, trade, and agriculture. While
`
`on leave from the University of California at Berkeley, I served as the Chief
`
`Economist at the Agency for International Development in Washington, D.C. from
`
`1988 to 1990. A true and correct copy of my curriculum vitae is attached hereto as
`
`Exhibit 2044.
`
`6.
`
`In addition to my academic and public sector experience, I have
`
`served as an economic consultant to government agencies and private clients for
`
`more than thirty years. My work has focused on the application of economics and
`
`finance to complex legal and public policy disputes. I have extensive consulting
`
`experience in issues associated with economic damage determination, economic
`
`feasibility studies, unfair competition, market analysis, risk valuation, and
`
`statistical and econometric modeling. I often provide expert testimony in matters
`
`involving pharmaceutical products, patent infringement, commercial success, new
`
`product introduction, and damages flowing from delayed entry, or anticompetitive
`
`barriers to market entry. These engagements have included analyses of
`
`pharmaceutical pricing structures and practices, factors influencing sales success,
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`and competition between pharmaceutical products. My work has required me to
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`examine the economic operation of virtually every major class of drugs, including
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`analgesics, anti-infectives, antidepressants, anti-hypertensives, behavioral
`
`medications, cancer therapies, anti-secretory drugs, diabetes treatments, hormone
`
`replacement therapies and others.
`
`II.
`
`SCOPE OF WORK
`
`A. Assignment
`I understand that this inter partes review involves a challenge to the
`7.
`
`validity of U.S. Patent No. 7,056,886 (“the ‘886 patent”). For purposes of this
`
`declaration, I have assumed that the challenged claims of the ‘886 patent cover
`
`Shire’s branded drug Gattex®,2 which is used to treat intestinal failure in patients
`
`with short bowel syndrome (“SBS”) who are dependent upon parenteral nutrition.
`
`The ‘886 patent was issued on June 6, 2006, based on an application filed
`
`December 29, 2000, and claims priority to a Great Britain application filed on
`
`December 30, 2000. The ‘886 patent claims formulations, kits comprising these
`
`formulations, processes of making formulations, and uses of formulations, which
`
`formulations stabilize GLP-2 or an analog thereof, thus allowing the molecule to
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`be safely delivered through subcutaneous injection. The formulations, processes,
`
`
`2 Ex. 2151, ¶¶72–73 (including the following table).
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`4
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`kits and uses were developed by NPS, which obtained FDA approval of Gattex® on
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`December 21, 2012 and launched the product in the U.S. in February 2013.3 NPS
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`was subsequently acquired by Shire PLC (“Shire”) on February 21, 2015.4
`
`8.
`
`This inter partes review was initiated by the “Coalition for Affordable
`
`Drugs II, LLC” (“CFAD”). I understand that CFAD is funded by hedge funds that
`
`seek to make money by shorting the stock of specific pharmaceutical companies
`
`and simultaneously challenging one or more of their patents for valuable drugs.5 A
`
`logic behind this investment strategy is that, if the patents are invalidated, the
`
`company’s stock price will decline and the short position will become profitable.
`
`
`3 U.S. Food and Drug Administration, “FDA Approved Drug Products — Gattex.”
`
`Accessed January 19, 2016 at https://www.accessdata.fda.gov/ (Ex. 2064).
`
`4 Shire, “Shire completes acquisition of NPS Pharma,” February 21, 2015 (Ex.
`
`2065).
`
`5 Engellenner, Tom, “Bass Goes Fishing: Trouble Ahead for Pharma, Or For
`
`Hedge-Fund Trolls?” Forbes July 15, 2015; Walker, Joseph and Rob Copeland,
`
`“New Hedge Fund Strategy: Dispute the Patent, Short the Stock,” Wall Street
`
`Journal April 7, 2015; Wieczner, Jen, “Why Drug Price Controversy Is Great
`
`News for this Hedge Fund Manager,” Fortune September 30, 2015 (Ex. 2066).
`
`5
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`If the drug in question lacked significant commercial value, the loss of its patent
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`protection would be unlikely materially to impact the company’s stock price.
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`Thus, the strategy depends upon targeting drugs that do have significant
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`commercial value.
`
`9.
`
`CFAD argues that the ‘886 patent should be declared invalid because
`
`the invention it claims would have been obvious to one of ordinary skill in the art.
`
`In evaluating such allegations, I am aware that it is appropriate to consider certain
`
`objective, secondary indicia of non-obviousness. These include long-felt but
`
`unresolved need for the invention, commercial success of the product embodying
`
`the invention, and a nexus between that commercial success and the claims of the
`
`asserted patent. The economic logic is that multiple inventors would have been
`
`motivated by these potential commercial rewards, and the fact that the patentee
`
`was the first to claim the patented invention therefore suggests it was not obvious. I
`
`was engaged by counsel for NPS to evaluate these objective manifestations of non-
`
`obviousness, also known as “secondary considerations.”
`
`B. Data and documents considered
`In conducting my analysis, I collected and reviewed numerous sources
`10.
`
`of information, including including academic journal articles, analyst reports,
`
`government documents, and public financial statements and presentations from
`
`NPS and Shire. In addition, I relied upon two different third-party data sets. One
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`was drug pricing data generated by Wolters Kluwer, a leading provider of
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`prescription drug data. The other was stock price data from Yahoo Finance. I have
`
`also reviewed Dr. Carpenter’s January 20, 2016 Declaration submitted in this
`
`matter. Documents and materials relied on in forming my opinion are cited herein.
`
`C. Compensation
`I am being compensated for my services at the rate of $850 per hour.
`11.
`
`I have been supported in my work by the staff of OnPoint Analytics, Inc.
`
`(“OnPoint”), a statistical and economic consulting firm, of which I am Chairman
`
`and co-founder, which also provides database services. The hourly billing rates of
`
`the individuals providing services range from $125 to $475, depending upon their
`
`experience and areas of expertise. No part of the compensation due or received by
`
`me or OnPoint is contingent upon the outcome of this matter.
`
`III. SUMMARY OF OPINIONS
`12. Opinion 1: Gattex® addressed a long-felt, unresolved need for an
`
`SBS drug that could reduce patients’ dependence on parenteral nutrition
`
`(“PN”). For patients with severe cases of SBS, PN is a life-extending treatment
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`that comes with a heavy burden: high risk of complications and death, reduction in
`
`quality of life, and substantial economic costs. Before Gattex®, no medication
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`successfully reduced SBS patients’ dependence on PN. Gattex® addressed this
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`long-felt need by reducing SBS patients’ dependence on PN and, in some cases,
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`weaning them off of PN entirely.
`
`13. Opinion 2: Gattex® has been a commercial success. Several factors
`
`support the conclusion that Gattex® has been a commercial success. Since its
`
`launch in February 2013, Gattex® has steadily captured SBS patient share. In
`
`addition, because Gattex® addresses a previously unmet need, doctors, patients and
`
`third party payers recognize that it justifies a high price. As a consequence,
`
`Gattex® has had high dollar sales and rapid sales growth; indeed, those sales have
`
`exceeded the pre-launch expectations of its manufacturer, NPS. Further, Gattex’s®
`
`actual and expected value contributed to NPS’s stock quadrupling in price. Finally,
`
`Gattex® was a key value driver in Shire’s $5.2 billion acquisition of NPS in
`
`February 2015.
`
`14. Opinion 3: There is a clear nexus between Gattex’s® commercial
`
`success and the claims of the challenged patent (the ‘886 patent). Teduglutide,
`
`the active ingredient of Gattex®, is an unstable peptide. Thus, if a stable
`
`formulation of teduglutide had not been developed, Gattex® could not have been
`
`approved by the FDA or sold as a commercial product. Gattex® is a stable drug
`
`formulation and is claimed by the ‘886 patent. Therefore, there is a nexus between
`
`every sale of Gattex® and the claims of the ‘886 patent. Furthermore, Gattex’s®
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`commercial success cannot be attributed to factors unrelated to its patented
`
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`properties such as aggressively low prices, high rebates and discounts, or an
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`unusual patient support program.
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`IV. BACKGROUND
`I am neither a physician nor a pharmacologist, and nothing in this
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`15.
`
`Declaration should be construed as expressing a medical opinion on my part.
`
`However, in analyzing pharmaceutical markets, economists routinely conduct
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`research of the medical and pharmacological literature in order to gather
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`economically relevant information about the drugs being analyzed and other drugs
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`prescribed for the same diagnoses. This makes it possible to identify the
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`characteristics of the targeted market and to evaluate the performance of
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`competitors within that market.
`
`16.
`
`In this section, I present information I have gathered regarding short
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`bowel syndrome (“SBS”) and the drugs used to treat it. This background provides
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`the framework for my analyses and is helpful in properly contextualizing the
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`commercial results for Gattex®. For example, in determining whether Gattex® met
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`a long-felt but unresolved need, it is important to compare it to other products
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`available to the same patient population. In this case, Gattex® is an “orphan drug”
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`and the patient population it treats is quite narrow. Comparing Gattex® to drugs
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`used for more common afflictions such as hyperlipidemia, hypertension, diabetes,
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`nerve pain or others would produce meaningless and misleading results.
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`A. Short bowel syndrome and SBS-IF
`17. Gattex® is a drug product specifically approved by the FDA to treat
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`patients with SBS who are dependent upon parenteral support.6 SBS is a rare,
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`socially incapacitating and often fatal condition characterized by the inability to
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`maintain appropriate fluids, nutrients or electrolytes when on a normal diet.7 SBS
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`is defined clinically as a reduced small intestine with length less than 200cm
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`(275cm to 850 cm is normal for adults).8 SBS may be the result of surgery to
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`remove part of the bowel due to an underlying disease or trauma or as the result of
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`a congenital defect.9 Since nutrients are slowly absorbed while traveling through
`
`
`6 Coalition for Affordable Drugs II, LLC v. NPS Pharmaceuticals. “Patent
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`Owner’s Preliminary Response.” IPR2015–01093, p. 4.
`
`7 Buchman, Alan, “Etiology and Initial Management of Short Bowel Syndrome,”
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`Gastroenterology 130, no. 2 (2006): S5–S15, S5 (hereafter, “Buchman (2006)”)
`
`(Ex. 2069).
`
`8 Pirona, Loris, et al., “Espen endorsed recommendations. Definition and
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`classification of intestinal failure in adults,” Journal of Clinical Nutrition 34
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`(2015):171–180, p. 177 (hereafter, “Pirona (2015)”) (2070).
`
`9 O’Keefe, Stephen, “Short Bowel Syndrome and Intestinal Failure: Consensus
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`Definitions and Overview,” Clinical Gastroenterology and Hepatology 4, no. 1
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`10
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`the intestines, patients with SBS have significantly reduced absorptive capacity.10
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`They very frequently require nutritional support, as a regular oral diet no longer
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`delivers sufficient nutrients to prevent death.
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`18. For these reasons, I understand that the degree of impairment to
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`intestinal function is typically described in terms of energy absorption and loss,
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`rather than the length of residual intestine.11 In more moderate cases, the intestinal
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`lack-of-absorptive capacity is referred to as “intestinal insufficiency” and is treated
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`via enteral support feeding (delivery of nutrients through a tube connected to the
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`gastrointestinal system).12 In more severe cases, the intestinal lack-of-absorptive
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`capacity is referred to as “intestinal failure” and is treated via parenteral support
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`feeding (intravenous delivery of nutrients).13
`
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`(2006): 6–10 (hereafter, “O’Keefe (2006)”) (Ex. 2071); Buchman, Alan, “The
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`Clinical Management of Short Bowel Syndrome: Steps to Avoid Parenteral
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`Nutrition,” Nutrition 13, no. 10 (1997): 907–913 (Ex. 2072).
`
`10 NPS, “Developing orphan products for patients with rare gastrointestinal and
`
`endocrine disorders,” August 2012, p. 7 (Ex. 2073).
`
`11 Buchman (2006) p. S5 (Ex. 2069).
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`12 Pirona (2015) p. 177 (Ex. 2070).
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`13 Pirona (2015) pp. 171–180 (Ex. 2070).
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`19. SBS-associated intestinal failure (“SBS-IF”) is a debilitating and often
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`life-threatening disorder.14 Patients who suffer from SBS-IF require varying
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`volume and frequency of parenteral nutrition (“PN”). SBS-IF is most often caused
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`by Crohn’s disease or an acute event such as a complication from surgery.15
`
`
`
`
`
`
`14 Hofstetter, Steven, Lee Stern and Jacob Willet, “Key issues in addressing the
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`clinical and humanistic burden of short bowel syndrome in the US,” Current
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`Medical Research and Opinion 29, no. 5 (2013)(hereafter, “Hofstetter (2013)”):
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`495–504 (Ex. 2074); O’Keefe (2006) pp. 6–10 (Ex. 2071).
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`15 O’Keefe (2006) pp. 6–10 (Ex. 2071).
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`1. Treatment with parenteral nutrition
`20. Because it has not been possible to treat the intestinal deficiency
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`associated with SBS-IF, parenteral nutrition (PN) has been the mainstay
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`treatment.17 Dependency on PN varies greatly, with some patients achieving
`
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`17 O’Keefe, Stephen, “Nutritional Issues in the Short Bowel Syndrome – Total
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`Parenteral Nutrition, Enteral Nutrition and the Role of Transplantation,” Nestle
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`Nutrition Institute Workshop Series 82 (2015): 75–90, p. 76 (hereafter, “O’Keefe
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`(2015)”) (Ex. 2076); Tee, Cheng, Katharina Wallis and Simon Gabe, “Emerging
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`Treatment Options for Short Bowel Syndrome: Potential Role of Teduglutide,”
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`independence within a few months while others remain dependent on PN for their
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`entire lifetime.18
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`21. Due to the serious complications and high costs associated with PN,
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`there is a significant need to reduce long-term reliance on such therapy. One pre-
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`launch NPS presentation described “the need to be ‘hooked up’ to PN for many
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`hours per day” as the “largest obstacle” for SBS sufferers.19
`
`
`
`
`Clinical and Experimental Gastroenterology 4 (2011): 189–196, p. 189 (hereafter,
`
`“Tee (2011)”) (Ex. 2077).
`
`18Tee (2011) p. 189 (Ex. 2077); Naberhuis, Jane and Kelly Tappenden,
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`“Teduglutide for Safe Reduction of Parenteral Nutrient And/or Fluid Requirements
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`in Adults: A Systematic Review,” Journal of Parenteral and Enteral Nutrition
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`(2015), p. 1 (Ex. 2078).
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`19 NPS, “Developing orphan products for patients with rare gastrointestinal and
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`endocrine disorders,” August 2012, p. 7 (Ex. 2073).
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`22. PN can be a very slow process, with nutrients being delivered
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`intravenously over a period of many hours.
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`patients are confined and largely unable to engage in other activities during these
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` I understand that
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`extended periods when they are hooked up to the IV. This may make it impossible
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`to work or to maintain an acceptable social life.22
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`22 Buchman, Alan, “Teduglutide and Short Bowel Syndrome: Every Night without
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`Parenteral Fluids Is a Good Night,” Gastroenterology 143, no. 6 (October 2012):
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`1416–1420, p. 1416 (hereafter, “Buchman (2012)”) (Ex. 2079); Naberhuis, Jane
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`and Kelly Tappenden, “Teduglutide for Safe Reduction of Parenteral Nutrient
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`And/or Fluid Requirements in Adults: A Systematic Review,” Journal of
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`Parenteral and Enteral Nutrition (2015), p. 8 (Ex. 2078).
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`23. On top of their PN, I understand that SBS-IF patients typically need to
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`use various other pharmaceutical products to improve nutrition and treat their
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`symptoms.24 Supplemental treatments are most often part of the following four
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`pharmaceutical classes: antidiarrheal, antisecretory, antibiotic and anticoagulant.
`
`
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`
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`24 O’Keefe (2015) pp. 78–81; Crohn’s and Colitis Foundation of America, “Short
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`Bowel Syndrome and Crohn’s Disease,” July 2013, p. 6 (Ex. 2076).
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`Unfortunately, none of these therapies, including PN, effectively treats the root
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`problem, i.e., a reduced absorptive capacity of the intestines. Instead, these
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`therapies are simply meant to maintain nutrition and to treat (sometimes
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`prophylactically) the complications frequently arising from PN.
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`24. SBS-IF patients are prone to serious complications such as sepsis,
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`thrombosis and liver disease, and their dependence on PN is at the core of these
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`complications.25 In fact, the most common cause of death among all SBS patients,
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`liver failure, is a side effect of long-term PN.26
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`2. Drugs to increase absorptive capacity of the intestines
`25. As I understand it, there are only two FDA-approved drugs that
`
`increase intestinal absorption in order to compensate for the lost bowel: Zorbtive
`
`and Gattex®. Zorbtive is an insulin-like growth factor that was approved on
`
`
`25 Buchman (2012) p. 1416 (Ex. 2079); Donohoe, Claire and John Reynolds,
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`“Short Bowel Syndrome,” The Surgeon 8 (2010): 270–279, p. 273 (hereafter,
`
`“Donohoe (2010)”) (Ex. 2082); NPS, “Developing orphan products for patients
`
`with rare gastrointestinal and endocrine disorders,” August 2012, p. 21 (Ex. 2073).
`
`26 O’Keefe (2015) pp. 85–87 (Ex. 2076)..
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`December 1, 2003, to treat SBS in patients receiving nutritional support.27
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`
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` Nor has
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`Zorbtive achieved industry recognition or high market share. In 2005, Zorbtive’s
`
`second year on the market, it made only $1.1 million in sales globally.29
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`Thereafter, Zorbtive’s manufacturer, Serono, was acquired by Merck. Merck did
`
`
`27 U.S. Food and Drug Administration, “Zorbtive — somatropin (rDNA origin) for
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`injection,” December 1, 2003 (hereafter “Zorbtive label”) (Ex. 2083); U.S. Food
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`and Drug Administration, “FDA Approved Drug Products — Zorbtive.” Accessed
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`January 19, 2016 at https://www.accessdata.fda.gov (Ex. 2080).
`
`
`
` Donohoe (2010) p. 275 (Ex. 2082); Wales, P., et al., “Human Growth
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`Hormone and Glutamine for Patients with Short Bowel Syndrome (Review),” The
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`Cochrane Library, 6 (2010): 1–30, p. 2 (hereafter, “Wales (2010)”) (Ex. 2084).
`
`29 Serono 2005 Annual Report, p. 43 (Ex. 2085).
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`not subsequently mention Zorbtive sales in any of its annual reports (although it
`
`did mention other products acquired with Serono).30
`
`26. One of the major reasons for distinguishing the two products is that
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`Zorbtive is not approved for use longer than four weeks31 and apparently has no
`
`lasting benefits after its discontinuance.32 Gattex®, by contrast, can be used
`
`indefinitely, has been tested over periods of 30 months, and its use has been
`
`associated with weaning off of PN and reduced dependence on PN.33
`
`
`30 Merck KGaA Annual Reports for 2006 through 2014 (Ex. 2086; Ex. 2131; Ex.
`
`2140; Ex. 2141; Ex. 2142; Ex. 2143; Ex. 2143; Ex. 2144; Ex. 2145; Ex. 2146; Ex.
`
`2147).
`
`31 Zorbtive label (Ex. 2083).
`
`32 Keller, Jutta, Heidi Panter, and Peter Layer, “Management of the Short Bowel
`
`Syndrome after Extensive Small Bowel Resection,” Best Practice and Research
`
`Clinical Gastroenterology 18, no. 5 (2004): 977-992, p. 983 (Ex. 2087); O’Keefe
`
`(2015) p. 82 (Ex. 2076); Donohoe (2010) p. 275 (Ex. 2082); Wales (2010) p. 2
`
`(Ex. 2084).
`
`33 U.S. Food and Drug Administration, “Highlights of Prescribing Information —
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`Gattex” June 26, 2014 (hereafter “Gattex label”) (Ex. 2088).
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`3. Incidence and prevalence of SBS-IF
`27. Academic sources have estimated that there are 10,000 to 15,000
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`patients in the U.S. with SBS-IF. These estimates first identify approximately
`
`40,000 patients on parenteral support using data from the Oley Foundation Home
`
`Parenteral and Enteral Nutrition Registry.34 These are patients suffering from
`
`intestinal failure (as opposed to the less severe intestinal insufficiency). It has been
`
`estimated that 35% of patients in the Oley registry also have SBS, thus producing
`
`an estimate of 10,000 to 15,000 patients with SBS–IF.35 In assessing the market for
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`Gattex®, NPS began with this same estimate of 10,000 to 15,000 SBS-IF patients
`
`in the United States.36
`
`
`34 The Oley Foundation, “North American Home Parenteral and Enteral Patient
`
`Registry: Annual Report,” 1994, p. 6 (Ex. 2089).
`
`35 Hofstetter(2013) p. 497 (Ex. 2074).
`
`36 NPS, “Developing orphan products for patients with rare gastrointestinal and
`
`endocrine disorders,” slide presentation, August 2012, slide 21 (Ex. 2073); NPS,
`
`“NPS Pharmaceuticals Announces Completion of Treatment Phase in STEPS
`
`Registration Study of GATTEX in Short Bowel Syndrome,” (January 10, 2011)
`
`22
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`(Ex. 2090).
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`28. Not all patients with SBS-IF are eligible or suitable to use Gattex®. In
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`the U.S., the FDA-approved indication for Gattex® excludes children and
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`adolescents, patients who are not dependent on parenteral nutrition and patients
`
`with current or recent intestinal malignancy.37 Further, the clinical trials cited in
`
`the FDA-approved label are all limited to patients who were dependent on
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`parenteral nutrition for at least one year.38 NPS estimated the number of SBS
`
`patients suitable to take Gattex® in the United States to be consist of 3,000 to 5,000
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`patients.39
`
`4. Prognosis for SBS-IF patients
`I understand that the likelihood of a patient with SBS-IF returning to
`29.
`
`an oral diet depends on a variety of factors, including residual bowel length,
`
`presence of liver disease, presence of bacterial overgrowth and the underlying
`
`cause of the SBS-IF.40 For patients who remain on PN, long-term life expectancy is
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`dramatically shortened. Among patients who remain dependent on PN and have
`
`
`37 Gattex label ( Ex. 2088).
`
`38 Gattex label (Ex. 2088).
`
`39 NPS, “NPS Pharmaceuticals' CEO Discusses Q1 2013 Results Earnings Call
`
`Transcript” (May 9, 2013) (Ex. 2091).
`
`40 Donohoe (2010) p. 272 (Ex. 2082).
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`non-malignant SBS, 59% are expected to die within 10 years (approximately a
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`41% survival rate).41 By contrast, the 10-year survival rate for patients who were
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`able to be weaned off PN is estimated to be 67%.42 As one review article noted:
`
` “The adaptation process means that up to 70% of those with SBS
`initially requiring total parenteral nutrition can be successfully weaned
`off and converted to complete enteral nutrition. However, after two
`years of parenteral nutrition the probability of intestinal failure is
`94%.
`The reason it is critical to try to wean patients back onto enteral
`nutrition is due to the high complication rate associated with long-
`term parenteral nutrition use. In a series of 68 patients with intestinal
`insufficiency 32.4% died—half due to the consequences of intestinal
`failure or home parenteral nutrition. Those with lower survival tended
`to be those on total parenteral nutrition, those with less than 50 cm of
`intact bowel, those with an end enterostomy or those in whom the
`aetiology of short bowel syndrome was radiation enteritis or
`ischaemia. In this series of patients the survival rate was 88% at 3
`years and 78% at five years. However, it must be noted that the
`majority of these patients died from their underlying condition rather
`than directly due to complications of parenteral nutrition.”43
`
`
`41 Amiot, Aurelien, Bernard Messing, Olivier Corcos, Yves Panis, and Francisca
`
`Joly, “Determinants of Home Parenteral Nutrition Dependence and Survival of 268
`
`Patients with Non-malignant Short Bowel Syndrome,” Clinical Nutrition 20, no.
`
`12 (2014): 368–74, p. 371 (Ex. 2092).
`
`42 Ibid.
`
`43 Donohoe (2010) p. 272 (Ex. 2082).
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`30.
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`In short, the benefits of being able to discontinue or reduce reliance on
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`PN are enormous as measured by longevity, reduced medical complications and
`
`improved quality of life. These are the very benefits targeted by Gattex®.
`
`B. Gattex®
`31. Gattex® is a targeted therapy for SBS-IF which contains teduglutide,
`
`an analog of GLP-2, which is a protein involved with intestinal growth and
`
`function.44 I understand that Gattex®