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`By:
`
`
`
`Jeffrey D. Blake, Esq.
`Matthew L. Fedowitz, Esq.
`MERCHANT & GOULD P.C.
`191 Peachtree Street N.E., Suite 4300
`Atlanta, GA 30303
`jblake@merchantgould.com
`mfedowitz@merchantgould.com
`Main Telephone: (404) 954-5100
`Main Facsimile: (404) 954-5099
`
`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 IPR 2015-01093
`U.S. Patent No. 7,056,886
`
`____________________________
`
`DECLARATION OF IVAN T. HOFMANN, CPA/CFF, CLP
`
`CFAD Exhibit 1042
`CFAD v. NPS
`IPR2015-01093
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`TABLE OF CONTENTS
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`Introduction ...................................................................................................... 1
`
`
`
`I.
`
`II. Qualifications ................................................................................................... 2
`
`III. Documents Considered .................................................................................... 6
`
`IV. Compensation .................................................................................................. 6
`
`V.
`
`Summary Of Opinions ..................................................................................... 7
`
`VI. Case Background ........................................................................................... 11
`
`VII. The Requirements Of Objective Indicia Of Nonobviousness ....................... 13
`
`VIII. NPS and the Rausser Declaration Have Not Established That Gattex®
`Satisfied a Long-Felt But Unmet Need ......................................................... 14
`
`A. The Rausser Declaration Does Not Argue That a Nexus Exists Between
`the Claimed Inventions of the ’886 Patent and the Fulfillment of a
`Purported Long-Felt But Unmet Need………………………………….14
`
`B. The Rausser Declaration Fails to Show That Any Purported Long-Felt
`But Unmet Need Is Met By Gattex®……………………….…………...16
`
`
`IX. There Is No Nexus Between the Performance of Gattex® and the Claimed
`Inventions of the ’886 Patent ......................................................................... 20
`
`A. The Rausser Declaration Fails to Demonstrate How the Particular
`Ingredients Recited in the Claims of the ’886 Patent Led to the
`Purported Commercial Success of Gattex® ........................................... 20
`B. The Rausser Declaration Fails to Apportion the Performance of Gattex®
`to the Patents Which Purportedly Cover Gattex® .................................. 21
`C. The Rausser Declaration Fails to Demonstrate that the ’886 Patent
`Drives Sales of Gattex® ......................................................................... 23
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`D. The Rausser Declaration Conflates FDA Approval with Commercial
`Success and Nexus ................................................................................. 25
`E. The Rausser Declaration Fails to Address the Importance of Marketing
`of Gattex® ............................................................................................... 27
`F. The Rausser Declaration Inappropriately Dismisses the Impact of
`Patient Assistance Programs on the Performance of Gattex® ............... 30
`G. ODE/NCE Exclusivity ........................................................................... 36
`
`X. NPS And Dr. Rausser Have Not Established Commercial Success Of
`Gattex® ........................................................................................................... 38
`
`A. The Performance of Gattex® .................................................................. 38
`B. The Analysis of Pricing in the Rausser Declaration is Misleading ....... 39
`C. The Rausser Declaration’s Analysis of Forecasts Fails to Provide
`Evidence of Commercial Success .......................................................... 42
`D. The Discussion of NPS’s Stock Price in the Rausser Declaration is
`Flawed and Misleading .......................................................................... 43
`E. The Discussion of Shire’s Acquisition of NPS in the Rausser
`Declaration is Flawed and Does Not Establish Commercial Success of
`Gattex® ................................................................................................... 49
`1.
`Future Desired Sales and Profits Do Not Reflect Commercial
`Success of a Product ....................................................................... 49
`2. The Rausser Declaration Fails to Appropriately Apportion Any
`Purported Commercial Success Related to the NPS Acquisition to
`the ’886 Patent ................................................................................ 52
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`I, Ivan T. Hofmann, hereby declare as follows:
`I.
`INTRODUCTION
`1.
`I have been retained by Petitioner Coalition for Affordable Drugs II,
`
`LLC (“CFAD”) to provide analysis in the above-captioned inter partes review
`
`(“IPR”) concerning U.S. Patent No. 7,056,886 (“the ’886 Patent”). The ’886
`
`Patent is entitled “GLP-2 Formulations,” and the challenged claims of the ’886
`
`Patent are directed to stabilized formulations of glucagon-like peptide 2 (“GLP-2”)
`
`or analogs thereof. [EX. 1003.] The ’886 Patent is assigned on its face to NPS
`
`Allelix, Corp., a subsidiary of NPS Pharmaceuticals, Inc. (“NPS”). [EXS. 1003;
`
`1075.]
`
`2.
`
`I have been asked by counsel for CFAD to review and respond to
`
`assertions regarding alleged objective indicia of nonobviousness relating to the
`
`’886 Patent that were raised in NPS’s Patent Owner Response (the “POR”), and in
`
`the Declaration of Gordon Rausser, Ph.D. under 37 C.F.R §1.68 in Support of
`
`Patent Owner’s Response to the Petition (the “Rausser Declaration”). My
`
`declaration specifically focuses on the asserted objective indicia known as (1)
`
`long-felt but unmet need and (2) commercial success as they relate to the
`
`pharmaceutical product Gattex®, which I understand NPS alleges is the
`
`commercial embodiment of certain claims of the ’886 Patent. [POR, p. 59.]
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`II. QUALIFICATIONS
`3.
`I am a Managing Director at Gleason IP, a division of Gleason &
`
`Associates, P.C. (“Gleason”). Gleason is an economic, accounting, and financial
`
`consulting firm which provides services primarily in the areas of Valuation,
`
`Litigation Support, Intellectual Property, Forensic Accounting and Financial
`
`Reorganization. I am the leader of the Intellectual Property Practice. Prior to
`
`joining Gleason, I worked for the global firm of Deloitte & Touche, LLP.
`
`4.
`
`I graduated magna cum laude from the University of Notre Dame in
`
`1994, with a Bachelor of Business Administration degree and a double major in
`
`Economics and Accounting. I am a Certified Public Accountant (“CPA”). I am
`
`also Certified in Financial Forensics (“CFF”). I am a member of the Licensing
`
`Executives Society (“LES”) and have received my Certified Licensing Professional
`
`(“CLP”) designation, which is granted by the LES to professionals with
`
`demonstrated knowledge and experience in the areas of intellectual property and
`
`licensing. I have attended and instructed numerous continuing education seminars
`
`since the completion of my formal education and have been a speaker on numerous
`
`occasions on a variety of financial, economic, accounting, intellectual property,
`
`and valuation topics.
`
` I have presented to various bar associations and
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`organizations on the issues of intellectual property, financial damages, valuation,
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`financial statement analysis, and other topics.
`
`5.
`
`I have extensive knowledge and experience in the areas of economic
`
`and market analysis as it relates to litigation matters. My intellectual property
`
`experience includes valuation of intellectual property, analysis of objective indicia
`
`of nonobviousness, market analysis
`
`involving product performance,
`
`the
`
`determination of damages associated with patent
`
`infringement and other
`
`intellectual property (including lost profits, disgorgement, and reasonable royalties,
`
`as applicable), consideration of irreparable harm, analysis of Panduit Factors
`
`related to demand for patented features, and market analysis of non-infringing
`
`alternatives. I have experience in a broad range of industries, including
`
`pharmaceuticals, manufacturing,
`
`technology, healthcare,
`
`communications,
`
`construction, extractive, and other industries.
`
`6. My work experience includes litigation support and consulting
`
`engagements with a variety of pharmaceutical and biologics companies. In my
`
`work in the pharmaceutical industry, I have performed financial and economic
`
`analysis for over one hundred prescription pharmaceutical products, including
`
`virtually every major therapeutic class of drugs. I have been asked to study and
`
`analyze objective indicia of nonobviousness, consider claims of irreparable harm,
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`determine and quantify damages, perform product pipeline consulting, and assist
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`with licensing and settlement discussions.
`
`7.
`
`In the course of my work in providing consulting and expert services,
`
`I regularly analyze and review data for the pharmaceutical industry, including data
`
`from IMS Health Services, Inc. (“IMS”), Symphony Health Solutions, and other
`
`information service providers. I am knowledgeable regarding the role of
`
`pharmaceutical databases such as First Databank, Medispan, Gold Standard, and
`
`other information sources in the fulfillment of prescriptions. I am also
`
`knowledgeable regarding the process of prescription writing, fulfillment, and
`
`generic substitution in the pharmaceutical industry. I have analyzed data and
`
`information and testified as an expert witness numerous times in matters involving
`
`the pharmaceutical industry and the role of brand versus generic competition. I
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`have been qualified as an expert witness in pharmaceutical economics and
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`specifically
`
`to address economic
`
`issues
`
`regarding objective
`
`indicia of
`
`nonobviousness by various federal courts and institutions.
`
`8.
`
`Among the projects on which I have worked involving objective
`
`indicia of nonobviousness, I have been engaged by the United States Patent and
`
`Trademark Office (“USPTO”) and Office of the Solicitor as an expert to analyze
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`and testify on issues involving objective indicia of nonobviousness, including
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`commercial success and nexus in proceedings in which both the Honorable David
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`Kappos, Under Secretary of Commerce for Intellectual Property and former
`
`Director of the USPTO, and the Honorable Michelle Lee, in her official capacity as
`
`Under Secretary of Commerce for Intellectual Property and Director of the
`
`USPTO, were defending the USPTO’s denial of certain patent applications.
`
`9.
`
`I also have extensive experience in analyzing, calculating and
`
`determining damages and other financial and economic issues in various dispute
`
`settings. I have been designated as a testifying expert in federal and state courts,
`
`Chancery Court, the United States International Trade Commission, the PTAB, and
`
`on matters before various domestic and international arbitration panels. I have
`
`analyzed damages involving intellectual property disputes, breach of contract
`
`claims, shareholder disputes, insurance recovery, class actions, and others. I also
`
`have experience assessing claims of irreparable harm in connection with temporary
`
`restraining order and preliminary injunction hearings, and determining whether
`
`financial damages are calculable. My full curriculum vitae, including a listing of
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`expert testimony provided in the past four years, is included as EX. 1071.
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`10.
`
`I am over the age of eighteen and am otherwise competent to make
`
`this declaration.
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`III. DOCUMENTS CONSIDERED
`11. The bases for my opinions herein are: (i) the materials and
`
`independent research identified throughout this declaration; (ii) the Exhibits set
`
`forth in Appendix A to this declaration; (iii) the exhibits attached to the Rausser
`
`declaration; and (iv) my knowledge, education, and experience. Throughout this
`
`declaration, I cite portions of certain documents. These citations are intended only
`
`as examples, however, and I reserve the right to rely on all portions of the
`
`documents cited herein.
`
`12. This declaration is based on information currently available to me. I
`
`further reserve the right to expand or otherwise modify my opinions and
`
`conclusions, or to supplement my opinions and conclusions, in response to any
`
`additional information that becomes available.
`
`IV. COMPENSATION
`13. Gleason is being compensated for the work performed on this
`
`engagement based on the time incurred by me at a rate of $435 per hour and by
`
`other Gleason personnel, working at my direction and under my supervision, at
`
`rates ranging from $95 to $275 per hour. Our compensation is not affected by or
`
`contingent on the outcome of this IPR proceeding.
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`SUMMARY OF OPINIONS
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`V.
`
`14. For the reasons set forth below, it is my opinion that the market
`
`performance of Gattex® does not provide objective indicia of nonobviousness of
`
`the claims of the ’886 Patent:
`
`Long-Felt But Unmet Need
`
` The analysis of claimed long-felt but unmet need in the Rausser Declaration
`
`is flawed and deficient. As an initial matter, the Rausser Declaration is
`
`deficient because it does not address purported nexus between the alleged
`
`fulfillment of a long-felt but unmet need and the allegedly novel elements of
`
`the claims of the ’886 Patent. Furthermore, any purported fulfillment of
`
`long-felt but unmet need is not attributable to the use of L-histidine and
`
`mannitol or sucrose in the formulation of Gattex®.
`
` Further, the Rausser Declaration fails to provide evidence that any long-felt
`
`but unmet need was met by Gattex®. Dr. Rausser’s long-felt but unmet need
`
`opinions are contradicted by the fact that (1) Gattex® is taken by less than 20
`
`percent of eligible short bowel syndrome (“SBS”) patients, (2) most patients
`
`taking Gattex® will not be able to fully wean themselves from parenteral
`
`nutrition, and (3) Dr. Rausser did not point to information showing that the
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`complications that SBS patients suffer from parenteral nutrition will be
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`
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`eliminated by the use of Gattex®.
`
` Dr. Rausser’s arguments about long-felt but unmet need are further
`
`undermined by the blocking nature of the ’379 Patent, which covers a broad
`
`genus of GLP-2 analogs, including the active teduglutide compound in
`
`Gattex®. As Dr. Rausser admits, the existence of the ’379 Patent created
`
`economic disincentives for other companies to research and develop GLP-2
`
`products, since those companies could not commercialize such products
`
`until the expiration of the ’379 Patent. Thus, the ’379 Patent limited the
`
`possibilities for other products to meet the purported need identified by Dr.
`
`Rausser.
`
` Dr. Rausser unnecessarily downplays that there was another product,
`
`Zorbtive®, available to treat SBS patients prior to the launch of Gattex®.
`
`Commercial Success
`
` Dr. Rausser’s commercial success opinions are flawed because he does not
`
`establish a nexus between the sales of Gattex® and any allegedly novel
`
`element of the claims of the ’886 Patent. As the PTAB noted in its
`
`institution decision, there is insufficient evidence as to whether the asserted
`
`commercial success of Gattex is due to “the sale of a buffered formulation
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`comprising GLP-2 generally, as compared to a buffered GLP-2 formulation
`
`comprising L-histidine, and mannitol or sucrose, as recited in the challenged
`
`claims.” [Paper 26, p. 18.]
`
` Dr. Rausser’s commercial success opinions also fail to establish a nexus
`
`because they do not apportion the performance of Gattex® between the ’886
`
`Patent and other patents listed in the Orange Book as covering Gattex®,
`
`including the blocking ’379 Patent, which claims the underlying active
`
`teduglutide compound that I understand provides the efficacy of Gattex®.
`
`By failing to isolate any purported value of the ’886 Patent compared to
`
`other Orange Book listed patents (or any specific claims of the ’886 Patent at
`
`issue in this IPR matter), the analysis in the Rausser Declaration fails to
`
`demonstrate a nexus between the performance of Gattex® and the claims of
`
`the ’886 Patent.
`
` The nexus opinions in the Rausser Declaration are further deficient because
`
`they neglect to appropriately address the fact that the performance of
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`Gattex® is also driven by marketing and patient assistance programs
`
`developed by NPS (now a part of Shire PLC (“Shire”)1).
`
` Even if evidence of nexus existed, the purported success of Gattex® in the
`
`market is not sufficient to demonstrate nonobviousness. The use of Gattex®
`
`in eligible SBS patients is less than 20 percent, the pricing of Gattex® is
`
`inflated due to the orphan drug market in which Gattex® operates, and the
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`Rausser Declaration’s comparison to market forecasts fails to provide
`
`evidence of any purported commercial success. Moreover, NPS’s share
`
`price increase and Shire’s acquisition of NPS fail to provide evidence of any
`
`commercial success of Gattex® that demonstrates nonobviousness.
`
` In addition, the blocking ’379 Patent and various exclusivities for Gattex®
`
`provide disincentives for competitors to market products for the treatment of
`
`SBS, which further prevents the performance of Gattex® from providing
`
`objective evidence of nonobviousness.
`
`
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` 1
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` I understand Shire PLC completed its acquisition of NPS on February 21, 2015.
`
`[EX. 1062, Shire 2014 Annual Report, p. 37.]
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`VI. CASE BACKGROUND
`15.
`I understand that NPS is the owner of New Drug Application
`
`(“NDA”) No. 20-3441 for Gattex®. [EX. 1039.] Gattex® is delivered by
`
`subcutaneous injection and used for treating adult patients with SBS who are
`
`dependent on parenteral support. [EX. 2088.] The United States Food and Drug
`
`Administration (“FDA”) approved Gattex® on December 21, 2012, and Gattex®
`
`has been sold by NPS in the United States since February 2013. [POR, p.11.]
`
`16. The ’886 Patent is one of four patents listed in the FDA’s Approved
`
`Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) for
`
`Gattex®. [EX. 1076.] The table below summarizes these patents:
`
`Patent No.
`
`Patent Issue
`
`Patent Expiration
`
`Claimed
`Invention
`
`5,789,379
`(the “’379 Patent”) August 4, 1998
`
`April 14, 2020
`
`Composition of
`teduglutide
`
`The ’886 Patent
`
`June 6, 2006
`
`September 18,
`2022
`
`7,847,061
`(the “’061 Patent”) December 7, 2010 November 1, 2025
`
`Formulations of
`GLP-2 peptides
`and analogs
`thereof
`
`Method of using
`teduglutide to
`treat SBS
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`Patent No.
`
`Patent Issue
`
`Patent Expiration
`
`9,060,992
`(the “’992 Patent”)
`
`June 23, 2015
`
`November 1, 2025
`
`Claimed
`Invention
`
`Method of using
`teduglutide to
`treat SBS
`
`[EX. 1076; EX. 1003; EX. 1029; EX. 1072; EX. 1078.]
`
`17. CFAD filed a Petition seeking institution of an IPR to review the
`
`validity of claims 1-45 of the ’886 Patent on April 23, 2015. [Paper 1.] CFAD
`
`asserted that claims 1-45 of the ’886 Patent are obvious in light of the prior art.
`
`[Paper 1, p. 3.] Upon consideration of the Petition and the accompanying evidence
`
`in support, the United States Patent Trial and Appeal Board (“PTAB”) instituted
`
`this IPR for claims 1-27, 31-40, and 44-45 of the ’886 Patent, finding a reasonable
`
`likelihood that CFAD will prevail on its assertions that those claims are invalid as
`
`obvious. [Paper 26.]
`
`18. As part of its institution analysis, the PTAB rejected a similar
`
`argument by NPS that objective indicia of long-felt but unmet need and
`
`commercial success support a finding of nonobviousness. [Paper 26 at 16-18.]
`
`The PTAB found that NPS did not present sufficient evidence of long-felt but
`
`unmet need. [Paper 26 at 16-17.] The PTAB explained that NPS “does not
`
`provide evidence sufficient to permit a determination as to whether the long-felt
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`need was met by the discovery of GLP-2 analogs having the necessary activity
`
`(disclosed in the prior art), or the use of L-histidine and mannitol or sucrose in a
`
`stabilized GLP-2 analog formulation.” [Paper 26 at 17.] The PTAB also found
`
`NPS had not established a nexus between the purported commercial success and
`
`any novel elements of the claims of the ’886 Patent. [Paper 26 at 17-18.]
`
`VII. THE REQUIREMENTS OF OBJECTIVE INDICIA OF
`NONOBVIOUSNESS
`19.
`I understand that objective indicia of nonobviousness must be taken
`
`into account as part of the evaluation of the obviousness of a patent claim. I
`
`further understand that any alleged objective indicia must be driven by and
`
`attributable to the purported merits of the patented invention, and not by other
`
`factors unrelated to the allegedly novel features of the claimed invention. In other
`
`words, there must be a causal correlation, or “nexus,” between the unique merit of
`
`the claimed invention and the purported evidence of nonobviousness. I understand
`
`that all types of objective indicia, including long-felt but unmet need and
`
`commercial success, must be shown to have this nexus. I am informed by counsel
`
`that if the purported fulfillment of a long-felt but unmet need or the alleged
`
`commercial success is due to an element in the prior art, no nexus exists.
`
`20.
`
`I also understand that courts have found that commercial success may
`
`not provide objective indicia of nonobviousness when the underlying product is
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`protected by a patent that precludes competition (referred to as a “blocking
`
`patent”).
`
`VIII. NPS AND THE RAUSSER DECLARATION HAVE NOT
`ESTABLISHED THAT GATTEX® SATISFIED A LONG-FELT BUT
`UNMET NEED
`21. The Rausser Declaration claims that Gattex® satisfies a long-felt but
`
`unmet need for an SBS drug that could reduce patients’ dependence on parenteral
`
`nutrition. [EX. 2041, ¶¶ 33-47.] However, the Rausser Declaration does not
`
`establish the required nexus for this purported objective indicia, nor does it
`
`demonstrate that any long-felt but unmet need was met by Gattex®.
`
`A.
`
`The Rausser Declaration Does Not Argue That a Nexus Exists
`Between the Claimed Inventions of the ’886 Patent and the
`Fulfillment of a Purported Long-Felt but Unmet Need
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`B.
`
`The Rausser Declaration Fails to Show That Any Purported Long-
`Felt But Unmet Need Is Met By Gattex®
`
`24. Beyond the lack of a nexus, the Rausser Declaration has not
`
`
`
`
`
`established that any long-felt but unmet need is met by Gattex®. Dr. Rausser is not
`
`a medical doctor, and he does not rely on information provided by a medical doctor
`
`to argue that Gattex® meets a long-felt need for the treatment of patients with SBS.
`
`Indeed, Dr. Rausser testified during his deposition that a member of his staff talked
`
`to a medical doctor to get “general information” on Gattex® in the course of
`
`preparing the Rausser Declaration, yet the declaration does not rely on any
`
`information provided by this unnamed doctor in arguing that a long-felt need was
`
`met. [EX. 1077, pp. 19-21.]
`
`25. The Rausser Declaration discusses the cost burden of parenteral
`
`nutrition, including the actual cost of parenteral nutrition and other financial
`
`burdens resulting from the parenteral nutrition treatment. [EX. 2041, ¶¶ 37-39.]
`
`According to the Rausser Declaration, these costs establish the need for a therapy
`
`that can reduce dependence on parenteral nutrition and Gattex® purportedly fulfills
`
`this need. [EX. 2041, ¶¶ 37-39.]
`
`26. However, the Rausser Declaration fails to reconcile this opinion with
`
`the fact that less than 20 percent of the SBS patients eligible to use Gattex®
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`actually do so.2 Furthermore, only one out of seven SBS patients using Gattex®
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`achieved independence from parenteral nutrition support. [EX. 2091.] Indeed, Dr.
`
`Rausser testified that the vast majority of Gattex® users still require parenteral
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`nutrition [EX. 1077, p. 82.] and that some Gattex® users see no reduction in their
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`parenteral nutrition needs. [EX. 1077, p. 90.]
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`27. Moreover, the Rausser Declaration identifies certain “complications”
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`that Dr. Rausser claims arise from long-term use of parenteral nutrition, including
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`“chronic dehydration, central vein thrombosis (blood clots), gall stones, sepsis
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`(blood infections) originating from the IV insertion point, liver abnormalities, and
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`overt liver failure.” [EX. 2041, ¶ 34.] However, the Rausser Declaration fails to
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`identify information that shows these complications will be reduced or eliminated
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`with the use of Gattex® by SBS patients, particularly since the vast majority of
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`patients using Gattex® will still have to use parenteral nutrition long-term. [For
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`example, see EXS. 2091 and 1077, p. 82.] Likewise, the Rausser Declaration fails
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`to provide evidence that the “restrictions in lifestyle” identified in paragraph 35
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` 2
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` According to the Rausser Declaration, only approximately 550 of 3,000 to 5,000
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`patients eligible to use Gattex® in the U.S in 2015 were actively using Gattex®.
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`[EX. 2041, ¶ 28, ¶ 49; Figure 4.]
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`will be eliminated for patients using parenteral nutrition while taking Gattex®. [EX.
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`2041, ¶ 35.]
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`28. Moreover, the opinions in the Rausser Declaration of a purported
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`long-felt but unmet need fail to address the fact that other companies did not have
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`the economic incentive or ability to commercialize a GLP-2 analog product as a
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`result of the blocking nature of the ’379 Patent that covers Gattex®.3 [EX. 1029.]
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`Other companies would have understood that at least as of August 4, 1998 (when
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`the ’379 Patent issued), the ’379 Patent blocked them from bringing a teduglutide
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`product to market until no earlier than the expiration of that patent.4 Therefore, the
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`’379 Patent effectively prevented other companies from fulfilling any unmet need
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`for GLP-2 analog products that could be used to treat SBS, since I understand that
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` 3
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` My understanding of the scope of the ’379 Patent is based on discussions with
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`counsel.
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`4 The current Orange Book listing for the ’379 Patent shows a patent expiration of
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`April 14, 2020. [EX. 1076]. The Orange Book previously identified the expiration
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`date as April 14, 2016. [EX. 2094]. This change does not affect my analysis of the
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`blocking nature of the ’379 Patent and rather extends the period for which the ’379
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`Patent provides a disincentive to other companies.
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`any such companies would be infringing the ’379 Patent if they did so. From an
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`economic perspective, because no other company had an ability to commercialize
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`competing GLP-2 analog products, and specifically teduglutide, the performance
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`of Gattex® fails to provide objective indicia of nonobviousness of fulfilling a long-
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`felt but unmet need.
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`29. Dr. Rausser admitted during his deposition that the ’379 Patent has
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`provided a disincentive for other entities to develop and commercialize a GLP-2
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`product during the term of the ’379 Patent. Dr. Rausser testified that the existence
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`of the ’379 Patent “certainly wouldn’t provide positive incentives…” for others to
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`develop a product that would be covered by the ’379 Patent. [EX. 1077, p. 160.]
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`Dr. Rausser further stated that the ’379 Patent “…would have a chilling effect…”
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`for others to develop a product covered by the claims of the ’379 Patent. [EX.
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`1077, pp. 162-163.]
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`30. The Rausser Declaration, however, did not include any analysis or
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`opinions related to the blocking nature of the ’379 Patent. The failure to address
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`the blocking nature of the ’379 Patent causes the analysis of long-felt but unmet
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`need contained in the Rausser Declaration to be fatally flawed.
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`31. Dr. Rausser also unnecessarily discounts the fact that the medication
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`Zorbtive® was available to physicians to treat SBS patients prior to Gattex®’s entry
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`into the market. [EX. 2041, ¶¶ 25-26.] As Dr. Rausser acknowledges, Zorbtive®
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`was approved by the FDA on December 1, 2003, to treat SBS patients receiving
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`parenteral nutrition. [EX. 2041, ¶ 25.] Thus, prior to the launch of Gattex® in
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`February 2013, there already was a product on the market available to treat SBS
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`patients who were using parenteral nutrition. That product remains on the market,
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`and was not removed from the market with the introduction of Gattex®. [EX.
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`1073].
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`32. The Rausser Declaration attempts to downplay the existence of
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`Zorbtive® by arguing that “Gattex® is significantly more safe, effective, and long-
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`lasting than Zorbtive®” and that Zorbtive® is not approved for use longer than four
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`weeks. [EX. 2041, ¶¶ 25-26.] But, as discussed above, Dr. Rausser is not a
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`medical doctor. He does not know how doctors make choices between prescribing
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`Zorbtive® or Gattex®.
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`IX. THERE IS NO NEXUS BETWEEN THE PERFORMANCE OF
`GATTEX® AND THE CLAIMED INVENTIONS OF THE ’886
`PATENT
`A.
`The Rausser Declaration Fails to Demonstrate How the Particular
`Ingredients Recited in the Claims of the ’886 Patent Led to the
`Purported Commercial Success of Gattex®
`33. The PTAB stated in its institution decision that NPS had not proven a
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`nexus between the asserted commercial success of Gattex® and the claimed
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`inventions of the ’886 Patent because there is no evidence as to whether the
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`asserted commercial success of Gattex® is due to “the sale of a buffered
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`formulation comprising GLP-2 generally, as compared to a buffered GLP-2
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`formulation comprising L-histidine, and mannitol or sucrose, as recited in the
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`challenged claims.” [Paper 26, p. 18.] I agree, and the Rausser Declaration does
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`not prove otherwise. The Rausser Declaration does not explain how the particular
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`ingredients claimed in the ’886 Patent led to the purported commercial success of
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`Gattex®. The Rausser Declaration states only that “absent stability as achieved by
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`the ’886 formulations, Gattex® would never have been approved or marketed.”
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`[EX. 2041, ¶ 64.] But the Rausser Declaration fails to analyze whether other
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`ingredients could have been used to create a stable formulation of Gattex®. Thus,
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`the Rausser Declaration fails to show that the use of L-histidine and mannitol or
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`sucrose in the Gattex® formulation has a nexus to the claimed commercial success
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`of Gattex®.
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`B.
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` The Rausser Declaration Fails to Apportion the Performance of
`Gattex® to the Patents Which Purportedly Cover Gattex®
`34. As discussed above, the Orange Book currently lists four patents as
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`allegedly covering Gattex®. The table below details the four patents currently
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`listed in the Orange Book for Gattex®:
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`Patent
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`At Issue in this
`Matter
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`Claimed Invention
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`’379
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`’886
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`’061
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`’992
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`No
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`Yes
`
`No
`
`No
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`Composition of teduglutide