Page 1
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF NEW JERSEY
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`CIVIL ACTION NOS.:
`
`l5—335(JBS);
`
`l4~667(JBS);
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`l4—4l49(JBS); 14—5l44(JBS)
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`SENJU PHARMACEUTICAL CO., LTD.,
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`BAUSCH & LOMB INCORPORATED, and
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`BAUSCH & LOMB PHARMA HOLDINGS
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`CORP.
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`Plaintiffs,
`
`vs.
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`LUPIN, LTD. AND LUPIN
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`PHARMACEUTICALS,
`
`INC.,
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`Defendants.
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`SENJU PHARMACEUTICAL CO., LTD.,
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`BAUSCH & LOMB INCORPORATED, and
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`BAUSCH & LOMB PHARMA HOLDINGS
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`CORP.,
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`Plaintiffs,
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`VS.
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`INNOPHARMA LICENSING,
`
`INC.,
`
`INNOPHARMA LICENSING, LCC,
`
`INNOPHARMA,
`
`INC., and
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`INNOPHARMA, LLC,
`
`Defendants.
`
`Job NO. NJ 2238413
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`800-227-8440
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`973~410-4040
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`Veritext Legal Soiutions
`
`SENJU EXHIBIT 2334
`Lupin v Scnju,
`IPRZOIS-01097, IPRZUIS-01099,
`Il’R20I5-0110!) & IPR2015.n::n_-.
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF NEW JERSEY
`
`CIVIL ACTION NOS.:
`
`l5—335(JBS);
`
`l4~667(JBS);
`
`l4—4l49(JBS); 14—5l44(JBS)
`
`SENJU PHARMACEUTICAL CO., LTD.,
`
`BAUSCH & LOMB INCORPORATED, and
`
`BAUSCH & LOMB PHARMA HOLDINGS
`
`CORP.
`
`Plaintiffs,
`
`vs.
`
`LUPIN, LTD. AND LUPIN
`
`PHARMACEUTICALS,
`
`INC.,
`
`Defendants.
`
`SENJU PHARMACEUTICAL CO., LTD.,
`
`BAUSCH & LOMB INCORPORATED, and
`
`BAUSCH & LOMB PHARMA HOLDINGS
`
`CORP.,
`
`Plaintiffs,
`
`VS.
`
`INNOPHARMA LICENSING,
`
`INC.,
`
`INNOPHARMA LICENSING, LCC,
`
`INNOPHARMA,
`
`INC., and
`
`INNOPHARMA, LLC,
`
`Defendants.
`
`Job NO. NJ 2238413
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`973~410-4040
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`Veritext Legal Soiutions
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`SENJU EXHIBIT 2334
`Lupin v Scnju,
`IPRZOIS-01097, IPRZUIS-01099,
`Il’R20I5-0110!) & IPR2015.n::n_-.
`
`
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`Page 2
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`Transcript of deposition taken
`
`by and before Lisa Forlano, CCR, CRR, RMR,
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`Certificate No. XIO1l43, at the offices of Goodwin
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`Procter LLP,
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`620 Eighth Avenue, New York, New York
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`on Wednesday, February 24, 2016, commencing at 10:05
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`a.m.
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`A P P E A R A N C E S:
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`Page 3
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`FINNEGAN, HENDERSON, FARABOW,
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`GARRETT & DUNNER, LLP
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`BY:
`
`BRYAN C. DINER, ESQUIRE
`
`TERRENCE KIM, ESQUIRE
`
`901 NEW YORK AVENUE, NW
`
`WASHINGTON, DC
`
`2000l~4413
`
`(202) 408~4l16
`
`bryan.diner@finnegan.OOm
`
`terrence.kim@finnegan.com
`ATTORNEYS FOR PLAINTIFFS
`
`GOODWIN PROCTER LLP
`
`BY:
`
`SARAH FINK, ESQUIRE
`
`THE NEW YORK TIMES BUILDING
`
`620 EIGHTH AVENUE
`
`NEW YORK, NEW YORK
`
`10018-1405
`
`(212) 813-8800
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`sfink@goOdwinprOcter.cOm
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`ATTORNEYS FOR DEFENDANT,
`LUPIN
`
`ALSTON & BIRD LLP
`
`BY:
`
`EVAN W. WOOLLEY, ESQUIRE (via
`
`teleconference)
`
`333 SOUTH HOPE STREET
`
`16th FLOOR
`
`LOS ANGELES, CALIFORNIA
`
`90071-3004
`
`(213) 576-1000
`
`evan.woOlley@alstOn.cOm
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`ATTORNEYS FOR DEFENDANT,
`
`INNOPHARMA
`
`KEVIN GALLAGHER, VIDEOGRAPHER
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`973-410-4040
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`Veritext Legal Solutions
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`|—‘<3KO0D--.30“\LJ‘lrJhL».J£\Jl—‘
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`I N D E X
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`WITNESS
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`IVAN T. HOFMANN
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`By Mr. Diner
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`E X H I B I T S
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`Hofmann—l Responsive Expert Report of Ivan
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`T. Hofmann, CPA/CFF, CLP
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`Page 4
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`PAGE
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`7
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`9
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`Hofmann—2 Deloitte 2015 Global Life Sciences
`
`34
`
`Outlook — Adapting in an era of transformation
`PROLO339506 — PROL0339525
`
`Hofmann—3 Deloitte document
`
`— Measuring the
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`41
`
`return from pharmaceutical innovation 2014 —
`a corner, PROLO339526 — PROLO339561
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`turning
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`Hofmann—4
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`American Marketing Association
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`52
`
`article — Early Marketing Matters:
`
`A Time—Varying
`
`Parameter Approach to Persistence Modeling,
`PROL0339663 — PROLO339676
`
`Hofmann—5 Reply Expert Report of John C.
`
`Jarosz on objective indicia of non-obviousness
`
`dated 2/12/16
`
`The
`Hofmann—6 Article — Too Many Drugs?
`Clinical and Economic Value of Incremental
`
`Innovations, PROLO340351 ~ PROL0340392
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`56
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`88
`
`Hofmann—7 Cataract Discussion Groups
`PROLO280867 — PROLO280893
`
`(CDGs},
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`113
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`Hofmann—8 Clinical Ophthalmology — The ocular 123
`
`distribution of C—labeled bromfenac ophthalmic
`
`solution 0.07% in a rabbit model, PROLO08055 —
`PROLOO80512
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`Veritext Legal Solutions
`
`800—227~844O
`
`973-410-4040
`
`
`
`E X H I B I T S
`
`(CONTENUED)
`
`Hofmann«9
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`PROL0080486 — PROL0080492
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`Hofmann—l0 PROLOO80493 —
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`PROLOOBO497
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`Hofmann—11 PROL00802l9 —
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`PROLO080224
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`Hofmann—l2 Ophthalmic NSAIDS Average Selling
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`Price Per Prescription, page 2 of 2
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`Page 5
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`111%
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`800-227-8440
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`Veritext Legal Solutions
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`
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`VIDEO OPERATOR: We're now going on the
`
`record, approximately 10:05 a.m. This is the
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`Page 6
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`beginning of file number one.
`
`My name is Kevin Gallagher,
`
`representing Veritext New York.
`
`The date today is February 24, 2016.
`
`The deposition is being held at Goodwin
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`Procter,
`
`located at 620 Eighth Avenue in New
`
`York, New York.
`
`The caption of the case is Senju
`
`Pharmaceutical Company, Ltd. versus Lupin
`
`Limited and Lupin Pharmaceutical.
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`This case is filed in the US District
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`Court for the District of New Jersey.
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`The
`
`Case No.
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`is 14—CV~O6893—JBS—KMW. And
`
`l5—CV—03240—JBS—KMW.
`
`Our witness this morning is Ivan T.
`
`Hofmann.
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`At this time,
`
`the attorneys present in
`
`the room will identify themselves for the
`
`record.
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`MR. DINER: Bryan Diner with the law
`
`firm of Finnegan Hendersen, counsel for
`
`Plaintiff Senju,
`
`et al.
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`With me is my
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`colleague, Terrence Kim, also from Finnegan
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`Page 7
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`Henderson.
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`MS. FINK:
`
`Sarah Fink for Goodwin &
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`Procter, representing Lupin and the witness.
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`MR. WOOLLEY:
`
`Evan Woolley of Alston &
`
`Bird for the Innopharma Defendant.
`
`VIDEO OPERATOR: Our court reporter
`
`this morning is Lisa Forlano.
`
`She also
`
`represents Veritext.
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`She will now swear the
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`witness and we can proceed.
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`IVAN T. HOFMANN, having been duly
`
`sworn, was examined and testified as follows:
`
`BY MR. DINER:
`
`Q
`
`A
`
`Q
`
`Good morning, Mr. Hofmann.
`
`Good morning, Mr. Diner.
`
`Would you please state your full name
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`and address for the record?
`
`A
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`Sure. My name is Ivan T. Hofmann, and
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`I live at 169 South Ridge Drive, Cranberry Township,
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`Pennsylvania
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`16066.
`
`Q
`
`And you've been deposed before;
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`is that
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`correct, Mr. Hofmann?
`
`A
`
`Q
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`A
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`1 have.
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`A number of times?
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`Correct.
`
`So you're familiar with the drill?
`Q
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`800-227-8440
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`Veritext Legal Solutions
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`973-410-4040
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`Page 8
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`A
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`Q
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`I am.
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`Okay.
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`I'll just lay a few ground rules
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`so we're on the same page,
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`if that's okay with you.
`
`A
`
`Q
`
`That sounds good.
`
`So I basically just have three I'd like
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`to talk about. One is my questions;
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`the second is
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`your breaks, or our breaks; and then any questions
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`you have.
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`So for my questions,
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`I just —— I'll be
`
`asking questions and your job is to answer the
`
`questions and to do so truthfully and accurately.
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`Does that sound fair?
`
`I understand.
`
`Okay. With regard to breaks, we can
`
`A
`
`Q
`
`take a break whenever you'd like.
`
`Just if I'm in
`
`the middle of a question,
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`I would like you to finish
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`by answering the question and then if you would like
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`to take a break at that time, we can take a break.
`
`Is that okay?
`
`A
`
`Q
`
`Sounds good.
`
`And then with regard to any questions
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`you may have, for example,
`
`if there is something
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`that you don't understand in my question or you need
`
`some clarity,
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`just ask me and I'll be happy to
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`clarify that for you.
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`
`Veritext Legal Solutions
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`800-227-8440
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`973-410-4040
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`Is that okay?
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`Yes, sir.
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`Okay.
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`I guess one final point on that,
`
`A
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`Q
`
`if I ask a question and you answer it, I'll assume
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`that you understood it.
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`Is that fine?
`
`A
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`Q
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`Yes.
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`Okay.
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`Is there any reason that you
`
`cannot truthfully and accurately testify today?
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`A
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`Q
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`No, sir.
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`Okay.
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`MR. DINER:
`
`I'll mark the first
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`exhibit.
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`(Responsive Expert Report of Ivan T.
`
`Hofmann, CPA/CFF, CLP was marked Hofmann~l for
`
`identification.)
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`BY MR. DINER:
`
`Q
`
`Okay.
`
`So the court reporter has handed
`
`you what has been marked as Hofmann Exhibit 1.
`
`Do
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`you recognize this document, sir?
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`A
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`Yeah.
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`It appears to be a
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`black—and—white version of my expert report
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`in this
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`matter.
`
`Q
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`Does it include your exhibits and
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`appendices?
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`A
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`Yes, it does.
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`Page 10
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`Q
`
`Can you turn to the page after page 57?
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`It's not numbered. That's the reason for my
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`description of it.
`
`A
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`Q
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`Sure.
`
`Is that your signature at the top of
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`the page after page 57?
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`A
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`Q
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`It is.
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`Okay. Mr. Hofmann, who prepared your
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`report in this case?
`
`A
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`Q
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`I did, with my team from Gleason IP.
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`I think after Exhibit D in Hofmann
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`Exhibit 1, which you've identified as your expert
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`report, it looks like your CV starts just after
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`Exhibit D, but I don't see an identifier in terms of
`
`an appendix.
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`A
`
`In the upper right~hand corner it says
`
`appendix 1.
`
`Q
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`A
`
`Very good.
`
`Thank you.
`
`Is that your current CV, Mr. Hofmann?
`
`Right.
`
`So this is my current CV.
`
`Appendix 2 reflects my testimony, which is also part
`
`of the CV. And then in the fourth part of the
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`report I've elaborated on the CV to explain some
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`specific things that are relevant to my expertise in
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`pharmaceutical economics.
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`Page 11
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`Q
`
`Okay.
`
`I believe in appendix 3 you've
`
`identified some of the materials that you considered
`
`in preparing your expert report.
`
`Is that correct?
`
`A
`
`Right. As of the date of my report,
`
`these were the materials that I considered.
`
`Q
`
`Okay. Actually,
`
`I want to go back to
`
`your CV for a moment.
`
`I may have asked this, but is
`
`it a current —— current version of your CV?
`
`A
`
`Q
`
`A
`
`Q
`
`It is.
`
`Anything more to add to it?
`
`I don't think so, as of today.
`
`Okay. Okay. Back to appendix 3,
`
`then.
`
`So what's identified in appendix 3, which looks like
`
`it goes on for three pages of materials that you
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`considered in preparation of your report?
`
`A
`
`Q
`
`It's a total of four pages, but yes.
`
`Thank you. Now, at the bottom of the
`
`first page of appendix 3 you see the section
`
`entitled, Expert Reports?
`
`A
`
`Q
`
`Yes.
`
`Okay.
`
`So in terms of the expert
`
`reports that you considered in preparation of your
`
`report, you identify the expert report of —— opening
`
`expert report of John Jarosz on objective indicia of
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`non-obviousness; is that correct?
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`A
`
`Q
`
`Yes, among others.
`
`Okay. And so you reviewed that opening
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`report of Mr. Jarosz, correct?
`
`A
`
`Q
`
`I did.
`
`And you also reviewed the opening
`
`report of Dr. Williams on infringement and objective
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`indicia of non—obviousness?
`
`A
`
`Q
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`I did.
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`And did you also review the expert
`
`report of William Trattler, M.D., on objective
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`indioia of non—obviousness?
`
`A
`
`Q
`
`I did.
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`Did you —— in preparation for your
`
`deposition today, did you consider any reply reports
`
`that were submitted by Dr. Williams?
`
`A
`
`I believe I have seen the Williams
`
`reply report, yes,
`
`I have.
`
`Q
`
`And have you considered the reply
`
`report of John Jarosz?
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`A
`
`Q
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`I have, yes.
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`And how about the reply report of
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`Q
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`Yes.
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`Did you review the reply report of John
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`Page 13
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`A
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`I did.
`
`I mean,
`
`for completeness.
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`There are several other expert reports I've also
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`reviewed.
`
`Q
`
`A
`
`Okay. What are they?
`
`The expert report of Dr. Cykiert and
`
`the expert report of Dr. Prausnitz.
`
`Q
`
`And did you review the expert report of
`
`Dr. Cykiert in preparation for today's deposition?
`
`A
`
`No. No. No.
`
`Up to and leading to my
`
`issuance of my report,
`
`I had an understanding of
`
`what his opinions were with respect to certain
`
`technical issues that I relied upon in forming my
`
`report, and with the understanding that his report
`
`was going to be filed, you know, effectively
`
`simultaneously with mine. And so my intent all
`
`along was to then review it in connection with once
`
`it was finally issued, but I had an understanding of
`
`what his opinions were prior to the issuance of my
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`report.
`
`Q
`
`And you gained that understanding from
`
`speaking with Dr. Cykiert?
`
`A
`
`Q
`
`A
`
`From counsel.
`
`Through counsel?
`
`Correct.
`
`Q
`Counsel told you what Dr. Cykiert's
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`opinions were?
`
`A
`
`Q
`
`Correct.
`
`There was another report that you
`
`mentioned that you reviewed?
`
`A
`
`Q
`
`Dr. Prausnitz.
`
`Dr. Prausnitz. And did you speak with
`
`Dr. Prausnitz before preparing your report?
`
`A
`
`Similar process,
`
`I did not speak with
`
`him directly.
`
`Q
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`A
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`Could you explain the process?
`
`Again,
`
`I had an understanding from
`
`counsel of what Dr. Prausnitz's opinions were going
`
`to be, at least as they bore on, you know,
`
`the
`
`aspects of my report that I would care about, and
`
`had that understanding, and then fully intended to
`
`review his report, when issued, which was on the
`
`same day as my report.
`
`Q
`
`Mr. Hofmann,
`
`in what areas do you
`
`consider yourself an expert?
`
`A
`
`I consider myself an expert
`
`in the
`
`areas of economics,
`
`finance and accounting.
`
`1
`
`regularly am asked to consult on, broadly, areas
`
`within those spaces, and then,
`
`in particular,
`
`I have
`
`a heavy concentration in pharmaceutical economics.
`
`Probably two-thirds to three—quarters of my time is
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`spent analyzing and addressing issues in
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`pharmaceutical economics.
`
`In addition to those broad categories,
`
`an overarching area of expertise is intellectual
`
`property.
`
`I spend pretty much all of my time
`
`dealing with issues of intellectual property,
`
`primarily economic, financial and accounting issues,
`
`with respect to intellectual property.
`
`Sometimes
`
`those —— the work that I do is in a dispute setting,
`
`such as this, and then it's also regularly
`
`undertaken outside of a dispute setting as well.
`
`Q
`
`A
`
`Q
`
`patents?
`
`A
`
`Q
`
`Are you a patent lawyer?
`
`I'm not a patent lawyer.
`
`Are you a named inventor on any
`
`I‘m not.
`
`And not a named inventor on any pending
`
`applications, correct?
`
`A
`
`Q
`
`marketing?
`
`No, sir.
`
`Are you an expert in pharmaceutical
`
`A
`
`I would consider myself an expert in
`
`the economic implications of pharmaceutical
`
`marketing.
`
`So while not a marketer by training,
`
`given the role of marketing in the distribution of
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`prescription pharmaceutical products, a very natural
`
`extension of the area of work that I‘ve done and the
`
`consulting that I‘ve done has had a heavy
`
`concentration on analyzing and considering issues
`
`with respect to pharmaceutical marketing.
`
`Q
`
`Have you ever actually marketed a
`
`pharmaceutical product for a pharmaceutical company?
`
`A
`
`Q
`
`No. My work has been as a consultant.
`
`Have you ever worked on a marketing
`
`campaign for a pharmaceutical company?
`
`A
`
`Q
`
`No, not directly.
`
`Have you ever consulted for a
`
`pharmaceutical company on a marketing campaign?
`
`A
`
`Well,
`
`one of the areas of work that I
`
`do is product pipeline consulting, and as part of
`
`the product pipeline consulting work that I've done
`
`I analyze markets and I analyze strategic planning
`
`with respect to, you know, budgeting, market
`
`formation, pricing, and as a part of that product
`
`pipeline consulting and consideration of market
`
`formation and strategy, certainly marketing is a
`
`piece of that. Or can be a piece of that.
`
`Q
`
`Okay. Would you consider yourself an
`
`expert in commercialization of intellectual
`
`property?
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`A
`
`I mean,
`
`I definitely consider myself an
`
`expert in analyzing issues surrounding
`
`commercialization of intellectual property,
`
`so I'm
`
`regularly asked to provide expertise and analysis
`
`and opinions with respect to licensing strategy of
`
`intellectual property. Again,
`
`like I said, market,
`
`market formation, market development of intellectual
`
`property.
`
`The actual legwork of the attorneys and
`
`the companies involved in the commercialization and
`
`getting the embodiment commercialized is not
`
`something I personally have done.
`
`Q
`
`Are you an expert in the FDA
`
`regulations regarding pharmaceutical products?
`
`A
`
`I consider myself an expert in the
`
`pharmaceutical economic implications of FDA
`
`regulations.
`
`So what I mean by that is I'm not a,
`
`per se, regulatory expert broadly, but the role of
`
`FDA regulation is so pervasive with respect to,
`
`in
`
`particular, prescription pharmaceutical products, as
`
`well as other medical foods and nutraceuticals and
`
`whatnot that I regularly analyze, consult and
`
`provide expertise with respect to the pharmaceutical
`
`economic implications of FDA regulation. But not
`
`the technical aspects, if you will.
`
`Q
`
`Do you know the applicable standards
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`for listing a pharmaceutical patent in the FDA's
`
`Orange Book?
`
`A
`
`Q
`
`I'm familiar with those.
`
`Do you understand the FDA's
`
`decision—making process with respect to approving
`
`drug product labeling?
`
`A
`
`I mean,
`
`like I said, with the caveat
`
`that I wouldn't consider myself a technical expert
`
`of what must be proven with respect to technical
`
`aspects of the labeling,
`
`I do have familiarity and
`
`have worked regularly on issues involving product
`
`labeling, especially as they relate to
`
`pharmaceutical economics, marketing and things like
`
`that.
`
`Q
`
`Okay. Are you an expert in
`
`ophthalmology?
`
`A
`
`I would say I am not an ophthalmology
`
`expert from any sort of technical or medical
`
`perspective.
`
`I have done work on a number of
`
`ophthalmologic products in the course of my work in
`
`consulting in pharmaceutical economics.
`
`Q
`
`Are you an expert in the field of
`
`pharmacy?
`
`A
`
`Here again, with respect to the role
`
`that pharmacies play in the distribution of
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`prescription pharmaceutical products,
`
`I have a deep
`
`understanding of the role of pharmacies, along with
`
`the other actors within the distribution of
`
`prescription pharmaceutical products from a, you
`
`know, dispensing and technical perspective as far as
`
`what a pharmacist is, you know,
`
`trained to do in the
`
`decision—making process they make, no. And I do
`
`have familiarity,
`
`though, with substitution laws
`
`with respect to the role that pharmacies play in
`
`substituting generics.
`
`Q
`
`You never formulated a pharmaceutical
`
`product yourself, correct?
`
`A
`
`Q
`
`I have not.
`
`And that would include never having
`
`formulated a bromfenac—containing composition,
`
`correct?
`
`A
`
`Q
`
`Correct.
`
`And that would also include never
`
`having formulated a pharmaceutical composition
`
`containing tyloxapol, correct?
`
`A
`
`Q
`
`Correct.
`
`Is it fair to say you've never
`
`conducted any scientific research on a bromfenac
`
`product?
`
`A
`
`I have not. That's what I was
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`referring to earlier on, all of these things.
`
`That's where I rely on technical experts for those
`
`types of issues.
`
`Q
`
`You're not an expert in any field of
`
`medicine, correct?
`
`A
`
`Q
`
`No.
`
`And have never prescribed any
`
`medication to a patient, correct?
`
`A
`
`Q
`
`I have not.
`
`You've never treated an inflammatory
`
`disease of an eye in a patient, have you?
`
`A
`
`Q
`
`No, sir.
`
`Never administered any bromfenac
`
`product to a patient, correct?
`
`A
`
`No. Again,
`
`this is where I rely on the
`
`technical experts for where I've incorporated those
`
`types of issues in my report.
`
`Q
`
`And you're not an expert in chemistry,
`
`either, correct?
`
`A
`
`Q
`
`No, sir.
`
`In connection with your opinions in
`
`this matter, did you do any laboratory testing of
`
`any pharmaceutical formulations?
`
`A
`
`I did not.
`
`On something like that I
`
`would rely on technical experts.
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`Q
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`So you never considered or conducted
`
`any testing to assess Prolensa's ocular penetration,
`
`have you?
`
`A
`
`I did not.
`
`I relied on technical
`
`experts for those types of issues.
`
`Q
`
`Okay. We can turn to your report.
`
`If you turn to page 106 your report,
`
`paragraph 18.
`
`It's Hofmann Exhibit 1.
`
`A
`
`Q
`
`I‘m there.
`
`The information provided in the table
`
`in paragraph 18, where did you obtain that
`
`information from?
`
`A
`
`You can see footnote 17, which lists
`
`the citation, which is the FDA website.
`
`Q
`
`Did you look that information up
`
`yourself?
`
`A
`
`Someone on my team did the actual
`
`looking of it up, but I reviewed all the citations
`
`in my report prior to issuance.
`
`Q
`
`Okay.
`
`Now, I'd like to turn to pages
`
`14 and 15 of your report, Hofmann Exhibit 1.
`
`A
`
`Q
`
`Okay.
`
`Now,
`
`in the sentence bridging pages 14
`
`and 15, you state that any alleged commercial
`
`success must be driven primarily by and attributable
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`to the purported merits of the claimed invention.
`
`Do you see that?
`
`Yes.
`
`Your use of the term or phrase
`
`A
`
`Q
`
`"primarily by,“ does that imply that there could be
`
`other factors that could contribute to the
`
`commercial success of a product?
`
`A
`
`Q
`
`A
`
`Of course.
`
`And what are those factors?
`
`Well, it's, I think,
`
`the question --
`
`you know,
`
`this is the definition of nexus and the
`
`question of nexus is a very facts and
`
`circumstances—based inquiry depending on the
`
`particular product at issue,
`
`the market at issue,
`
`the competitive landscape.
`
`So it varies product by
`
`product.
`
`Q
`
`Are there factors, such as marketing,
`
`that could contribute to the commercial success of a
`
`product?
`
`A
`
`Q
`
`A
`
`Q
`
`Absolutely.
`
`Financing?
`
`Sure.
`
`Yeah.
`
`So these are factors outside of
`
`what you would consider the merits of the claimed
`
`invention, correct?
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`Q
`
`Yes,
`
`those are examples.
`
`And they could contribute to commercial
`
`success;
`
`is that your view?
`
`A
`
`Q
`
`A
`
`success.
`
`Yes. And sometimes explain it.
`
`I'm sorry?
`
`And sometimes explain the commercial
`
`Q
`
`But so long as the commercial success
`
`is driven primarily by the merits of the claimed
`
`invention,
`
`those other factors, such as marketing
`
`and financing, will not distract from or detract
`
`from the commercial success of the product, correct?
`
`A
`
`Well, that's again a very facts and
`
`circumstances—based inquiry.
`
`I think that to the
`
`extent that those examples you gave play a, you
`
`know, a diminished role, but a role that doesn't
`
`necessarily inhibit the ability to find that the
`
`patent played the primary role in the performance of
`
`a product. But you'd have to analyze the specific
`
`facts and circumstances of the case you're looking
`
`at.
`
`Q
`
`It's not your position,
`
`is it,
`
`that the
`
`proponent of commercial success has to show that no
`
`other factors besides the merits of the invention
`
`contributed to the commercial success of the
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`product?
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`Page 24
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`A
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`No, that's not my position.
`
`MS. FINK: Mr. Hofmann, I'll just ask
`
`if you wait a second after the question to
`
`give me a chance to object.
`
`THE WITNESS: Certainly.
`
`MS. FINK:
`
`Thank you.
`
`MR. WOOLLEY:
`
`Evan Woolley for
`
`Innopharma here,
`
`I just want to note that any
`
`objections by Lupin will be preserved to
`
`Innopharma as well so that I don't have to,
`
`you know, ditto every time. Thanks.
`
`BY MR. DINER:
`
`Q
`
`Mr. Hofmann, did you conduct a
`
`profitability analysis on the product Prolensa in
`
`preparation of your expert report?
`
`A
`
`Right.
`
`I did an analysis and rebuttal
`
`and in response to the opening report of Mr. Jarosz
`
`that included consideration of profitability based
`
`on the information available to me.
`
`Q
`
`And that was a look at profitability
`
`over a 30-month period;
`
`is that correct?
`
`A
`
`Right.
`
`From launch to the date most
`
`recently available, which was about 30 months.
`
`Q
`
`I believe that was about August of
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`2015. Does that sound right?
`
`A
`
`August 2015?
`
`I thought
`
`I had through
`
`the third quarter of 2015. Yeah, so it would be
`
`through September 30.
`
`Q
`
`A
`
`Q
`
`period?
`
`A
`
`Q
`
`September 30, 2015?
`
`Correct.
`
`Okay.
`
`So a little over a 30-month
`
`Correct.
`
`Okay.
`
`Now,
`
`I believe you noted in your
`
`report that Mr. Jarosz did not analyze the
`
`profitability for Prolensa, correct?
`
`A
`
`Q
`
`Correct.
`
`Did you know that Mr. Jarosz did not
`
`have the profitability data available for Prolensa?
`
`MS. FINK: Objection, calls for
`
`speculation.
`
`THE WITNESS:
`
`I mean, he didn't —- he
`
`didn't discuss it one way or the other.
`
`I
`
`understand from his deposition transcript,
`
`which I have since reviewed,
`
`that his position
`
`is that that information was unavailable.
`
`As I explained in my report,
`
`there was
`
`information available, at least with respect
`
`I find
`to gross to net for certain periods.
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`it somewhat unimaginable that cost of goods
`
`sold information would be unavailable. And I
`
`guess I have to accept that, you know,
`
`the
`
`other expense components may be art tracked or
`
`available, but that didn't mean that there
`
`wasn't adequate data to look at something
`
`other than just gross sales, which is all that
`
`Jarosz‘s report contained.
`
`BY MR. DINER:
`
`3.0
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`Q
`
`And the other data you're referring to,
`
`is that publicly available data that you're
`
`referring to?
`
`A
`
`Well,
`
`the particular gross—to«net
`
`information, no. There were certain periods that
`
`were included in the production that contained
`
`gross—to—net information of both Prolensa and
`
`Bromday that he didn't address in his report. And
`
`then, as I explained in my report,
`
`I did use certain
`
`publicly available information where I didn't have
`
`internal information to develop my analysis —~ my
`
`analysis of profitability or lack of profitability.
`
`Q
`
`Were you aware that the company Bausch
`
`+ Lomb does not track profitability for its
`
`individual products?
`
`MS. FINK: Objection, calls for
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`speculation.
`
`THE WITNESS:
`
`I have been —— you know,
`
`my understanding is that,
`
`through counsel, we
`
`requested profitability information, and the
`
`position was that Bausch + Lomb doesn't, you
`
`know,
`
`track a fully—loaded product P&L, but
`
`based on the production they clearly do track
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`gross to net, and I think are required to
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`track gross to net.
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`They didn't produce it at
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`all periods. And like I said a few answers
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`ago,
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`I also —— I‘ve never seen a company that
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`doesn't track cost of goods sold.
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`It doesn't
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`surprise me necessarily that they don't have a
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`fully—loaded product P&L for their expenses
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`below that, but it certainly seemed like there
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`was deficiencies in what was produced with
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`respect to the actual performance of Prolensa.
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`BY MR. DENER:
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`Q
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`So if there's no actual profitability
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`numbers for Prolensa, as kept by the company,
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`there's no actual data against which to judge the
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`accuracy of your profitability analysis, correct?
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`A
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`I totally disagree with that.
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`I think
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`that the purpose of my profitability analysis is a
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`critique that the approach in the Jarosz's report is
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`to just take gross IMS sales and say that's all I
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`have, that's the only way E'm going to look at the
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`absolute performance of this franchise. My analysis
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`is a qualitative analysis which includes some
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`quantitative consideration of, okay, well, what do
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`we know about whether gross sales is an accurate
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`representation of the performance of this product?
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`And what we know from some of the data produced is
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`there are significant gross—to—net adjustments that
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`are made that the Jarosz's report fails to consider.
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`And I think anybody who studies pharmaceutical
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`economics also knows that a product has cost of
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`goods sold that are associated with it, sales and
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`marketing costs and other costs.
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`And so, you know,
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`the purpose of my
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`analysis is not to quantify like lost profits in a
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`damages case or something like that, which requires,
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`you know, a certain level of precision.
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`It's to
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`support my qualitative view that,
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`look, you know, we
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`can't just stop the inquiry here at sales. We've
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`gotta look at what's available with respect to other
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`deductions that are known to occur for
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`pharmaceutical products.
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`It sounds like, no,
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`there
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`isn‘t an actual fully—loaded Bausch + Lomb product
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`P&L that exist, or certainly there wasn't one in the
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`Page 29
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`production, but
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`I think that my profitability
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`analysis provides a much more thorough and
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`thoughtful consideration of the actual financial
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`performance of Prolensa than just, you know, pulling
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`gross IMS data, as the Jarosz report does.
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`Q
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`It's built on a number of different
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`assumptions from different companies and different
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`products; is that correct?
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`A
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`Well,
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`I think it's best to take them
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`one at a time.
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`I mean,
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`I think that it is —— again,
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`I do this all the time, and regularly the brand
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`company will produce product P&Ls, and I can use
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`those actual information. Here they did produce
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`certain actual information, and I did use the actual
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`information, where available. Where it wasn’t
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`available I think I made reasonable determination of
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`estimates to reflect the lack of profitability,
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`based not only on the public filings of companies
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`that include the sales of Prolensa, but also my, you
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`know, many years experience in analyzing hundreds of
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`pharmaceutical products and the types of expenses
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`and costs that roll into the typical product P&Ls of
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`pharmaceutical products.
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`Q
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`Let's talk about profitability of
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`pharmaceutical products for a moment.
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`I believe
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`back on,
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`I think it was paragraph 18 of your report,
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`you had tabulated some information with regard to
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`the patents—in—suit, correct?
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`A
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`Q
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`Yes.
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`And there you've indicated that one of
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`the patents—in—suit, which I will refer to as the
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`'431 patent is the latest expiring patent;
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`is that
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`right?
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`A
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`Q
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`That's my understanding.
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`And that patent expires in
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`September 2025, right?
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`A
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`Q
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`Correct.
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`Now, pharmaceutical companies, as a
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`general matter,
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`invest in products for the long run;
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`is that correct?
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`MS. FINK: Objection, calls for
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`speculation.
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`THE WITNESS:
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`I think that's a facts
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`and circumstances—based inquiry. There's lots
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`of times that pharmaceutical products have a
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`short—term plan and there are occasions where
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`they have a long—term view.
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`BY MR. DINER:
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`Q
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`A
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`And there are —— strike that for now.
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`I don't think Bromday was on the market
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`any longer than Prolensa has been on the market.
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`Q
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`But you have no idea how long Prolensa
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`may be on the market, correct?
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`A
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`Well,
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`I mean,
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`I think that's kind of my
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`whole point is that all we have in terms of
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`objective evidence of its performance is what its
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`done so far.
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`The pharmaceutical market is very
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`dynamic and things can happen all the time.
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`I think
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`Dr. Cykiert talked about the change in the AAO
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`guidance with respect to NSAID that came out in late
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`2015. That can materially impact the future
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`direction of what happens with respect to a product
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`like Prolensa.
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`So I think when you're looking at an
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`obviousness inquiry with respect to, you know,
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`the
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`commercial performance of a product you really have
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`to look at what has happened. There's a real hazard
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`to try and predicting, hey,
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`this might be on another
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`three months,
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`five years, or ten years.
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`Q
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`But it could be on for as long as the
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`patent is in existence,
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`in terms of its expiring,
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`correct?
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`A
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`That's theoretically possible, but, you
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`know,
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`E don't think that speculating on whether it's
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`going to be provides any objective evidence of its
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`actual commercial performance in the marketplace.
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`Q
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`You speculated a moment ago that based
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`on some repor
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