throbber
Filed on behalf of Petitioner COALITION FOR AFFORDABLE DRUGS X LLC
`
`
`By: Jeffrey D. Blake, Esq.
` MERCHANT & GOULD P.C.
`
`191 Peachtree Street N.E., Suite 4300
` Atlanta, GA 30303
`
`jblake@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 X LLC,
`Petitioner,
`
`v.
`
`ANACOR PHARMACEUTICALS, INC.,
`Patent Owner.
`___________________
`Case No.: 2015-01776
`Patent No.: 7,582,621
`________________________________________________________
`
`DECLARATION OF STEPHEN KAHL PH.D. IN SUPPORT OF PETITION
`FOR INTER PARTES REVIEW OF PATENT NO. 7,582,621
`
`CFAD v. Anacor, IPR2015-01776, CFAD EXHIBIT 1043 - Page 1 of 18
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`

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`I, Stephen Kahl, Ph.D., hereby state the following:
`
`I.
`
`INTRODUCTION
`
`1.
`
`In this declaration, I am providing my expert opinions in support of
`
`Petitioner’s Petition For Inter Partes Review of Patent No. 7,582,621 (the “’621
`
`patent”) and in reply to Patent Owner’s Response Pursuant to 37 C.F.R. § 42.120.
`
`2.
`
`I previously provided a declaration dated June 28, 2015, as part of the
`
`petition filed by Coalition for Affordable Drugs X LLC that led to this proceeding.
`
`My previous declaration is Ex. 1006. I also previously provided a declaration in
`
`reply to Patent Owner’s Objections To Petitioner’s Evidence Under 37 C.F.R. §
`
`42.64(b)(1). This previous declaration is Ex. 1039.
`
`3.
`
`I am competent to make this declaration based upon my personal
`
`knowledge and technical expertise.
`
`4.
`
`All the exhibits I have considered and relied on in this proceeding are
`
`the kinds of documents I typically rely on when forming opinions, including the
`
`opinions I have offered in this proceeding.
`
`5.
`
`I reserve the right to supplement my opinions to address any
`
`information obtained, or positions taken, based on any new information that comes
`
`to light throughout this proceeding.
`
`6.
`
`I have read the Declaration of Paul J. Reider, Ph.D. (Ex. 2034). His
`
`CFAD v. Anacor, IPR2015-01776, CFAD EXHIBIT 1043 - Page 2 of 18
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`declaration does not change my previous opinions.
`
`7.
`
`I disagree with Dr. Reider’s opinion that a person of ordinary skill in
`
`the art (POSITA) before February 16, 2005 would not have been aware of Austin
`
`because it “is an entirely different field than ‘the research, development, or
`
`production of pharmaceuticals.’” (Ex. 2034 at ¶ 17.) I have often searched the
`
`patent and chemistry literature for information concerning compounds during my
`
`four decades of pharmaceutical research. My experience is that the patent and
`
`chemistry literature reports information relevant to pharmaceutical development
`
`(e.g., synthesis pathways, activity, and stability) in a variety of applications and
`
`settings. In my experience there is no reason to ignore Austin, and what it reports,
`
`simply because Austin does not discuss pharmaceutical development. Austin’s
`
`disclosure is particularly useful for understanding the antifungal activity of the
`
`boron-containing compounds that it discloses and tests, like tavaborole.
`
`8.
`
`One reason a POSITA searches the patent and chemistry literature
`
`when developing a new pharmaceutical product is to identify potential known
`
`compounds with relevant activity against a target disease. Here that includes
`
`compounds with antifungal activity. It is easier and less time consuming to start
`
`with a known compound that has known activity in most cases. This removes the
`
`trial and error associated with synthesizing and testing a large number of
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`CFAD v. Anacor, IPR2015-01776, CFAD EXHIBIT 1043 - Page 3 of 18
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`compounds to identify a potential target compound. It does not appear that Dr.
`
`Reider addresses this significant reason for why a POSITA would find Austin
`
`relevant.
`
`9.
`
`The ’621 patent inventors’ Journal of Medicinal Chemistry paper
`
`from 2006 (Ex. 2157) supports my opinion. In my experience, the medicinal
`
`chemistry community often reports findings in the Journal of Medicinal Chemistry
`
`after filing a patent application. The listed inventors of the ’621 patent appear to
`
`report their discovery of tavaborole for treatment of onychomycosis in their 2006
`
`Journal of Medicinal Chemistry paper entitled “Discovery of a New Boron-
`
`Containing Antifungal Agent, 5-fluoro-1,3-dihydro-1-hyroxy-2,1-benzoxaborole
`
`(AN2690), for the Potential Treatment of Onychomycosis.” (Id.) The listed
`
`inventors relied on Austin, and its disclosure of certain synthesis pathways, to
`
`synthesize the 7-fluoro derivative through directed ortho metalation of 3-
`
`fluorobenzyl alcohol. (Ex. 2157 at 3 (right column).) This is a good example of
`
`medicinal chemists finding references that do not directly discuss pharmaceutical
`
`development relevant to the development of pharmaceutical products.
`
`10.
`
`I also disagree with Dr. Reider’s opinion that tavaborole is not a
`
`preferred compound disclosed in Austin. As I testified during my deposition, when
`
`more than one molecule shares similar activity, I usually select the simplest
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`molecule, as would a POSITA. Austin discloses a preference for 5- and 6- fluoro or
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`bromo 1,3-dihydro-1-hydroxy-2,1-benzoxaborole and O-esters thereof. (Ex. 1002
`
`at Abstract.) Table 9 in Austin discloses antifungal and antibacterial data for
`
`benzoxaboroles, including the benzoxaboroles identified by name in the Abstract.
`
`Table 8 in Austin discloses antifungal and antibacterial data for O-esters of
`
`benzoxaboroles identified by name in the Abstract. The benzoxaboroles disclosed
`
`in Table 9 are simpler compounds (e.g., have lower molecular weights and are
`
`easier to synthesize) than their corresponding O-ester derivatives disclosed in
`
`Table 8.
`
`11. Significantly, of the compounds that had the most potent activity in
`
`the Abstract, Table 8 and Table 9, tavaborole (Example 64 in Table 9) is the
`
`simplest and lowest molecular weight compound with the best activity. This makes
`
`tavaborole the first choice for future development, particularly given the
`
`consideration that a POSITA was developing a topical formulation for nail
`
`penetration. Dr. Reider’s opinions regarding which compounds he believes are
`
`preferred compounds in Austin do not consider that the compound will be used for
`
`topical treatment of onychomycosis. In addition, Dr. Reider does not provide a
`
`reason why a POSITA would choose a larger, more complicated O-ester derivative
`
`when there are simpler, lower molecular weight preferred compounds with the
`
`CFAD v. Anacor, IPR2015-01776, CFAD EXHIBIT 1043 - Page 5 of 18
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`same or better activity.
`
`12.
`
`I disagree with Dr. Reider’s conclusion that a POSITA before
`
`February 16, 2005 would have been concerned about the toxicity of compounds in
`
`Austin, including tavaborole. (Ex. 2034 at ¶ 17.) I agree with Dr. Reider than boron
`
`is an electronic deficient element but this does not make all boron-containing
`
`compounds inherently toxic to humans. Dr. Reider’s opinions on boron toxicity are
`
`misplaced because he relies on irrelevant publications and fails to account for the
`
`method of administration of the compounds.
`
`13. Dr. Reider cites a 1984 article from Grassberger et al. (Ex. 2008), and
`
`later papers that rely on Grassberger’s conclusions, to support his opinions
`
`concerning the alleged toxicity of boron. Grassberger is an exhibit that I
`
`previously reviewed when analyzing the Patent Owner’s preliminary response. At
`
`the time I reviewed Grassberger, I was unaware of the 2009 Baker et al. paper in
`
`Future Med. Chem. (Ex. 1056), which I address below. When I reviewed
`
`Grassberger, and papers citing Grassberger, (e.g., Ex. 2005 at 3 (citing reference 8
`
`in left column)), I concluded that Grassberger’s report of boron toxicity was
`
`unsupported. Grassberger reached his conclusion concerning boron toxicity in
`
`1984 without any data. (Ex. 2008 at 8 (left column).) I explained to Petitioner’s
`
`counsel at this time that Grassberger did not support the conclusion that boron-
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`containing compounds were toxic because there was no data to support such a
`
`conclusion. Grassberger and its progeny do not support the conclusion that boron-
`
`containing compounds are toxic.
`
`14. Dr. Reider also cites a series of papers concerning neutron capture
`
`therapy to support his opinions concerning the alleged toxicity of boron. Neutron
`
`capture therapy is a specialized technique that is primarily used for treating brain
`
`tumors. Specifically, Boron neutron capture therapy (BNCT) is a binary cancer
`
`therapy requiring the simultaneous presence of 10B atoms and low energy neutrons
`
`(thermal/epithermal). Neutrons of the appropriate energy are readily available from
`
`nuclear reactors and, more recently, particle accelerators. Nonradioactive 10B
`
`nuclei are unique among the stable elements of the lighter elements in having a
`
`very high propensity for absorbing low energy neutrons. 10B makes up only 20% of
`
`natural boron with the remainder being 11B, which does not react with neutrons.
`
`The resulting excited boron nuclei immediately undergo a fission reaction,
`
`producing an alpha particle, a lithium nucleus and a γ-ray. The heavy nuclei have
`
`very short paths within the target cell and deposit massive amounts of energy as
`
`they impact the cellular constituents. Due to their short paths, however, cellular
`
`destruction is confined to only those cells containing boron.
`
`15. The intracellular 10B concentration is extremely important for
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`effective BNCT. It is widely accepted in the field that an exceptionally large
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`concentration of intracellular 10B is necessary for BNCT to be effective. The
`
`intracellular concentrations of 10B necessary for effective BNCT exceeds by many
`
`fold that required for typical pharmaceutical agents.
`
`16. Two boron-containing drugs have been used to date in human clinical
`
`trials of BNCT for treatment of glioblastoma multiform and head and neck cancer.
`
`The first was Na2[B12H11SH], a sulhydryl borane anion commonly known as BSH.
`
`This agent is typically administered intravenously at a dose of 100 mg/kg with no
`
`significant toxic side effects. (Ex. 1072.) Paraboronophenylalanine (BPA) is the
`
`second and can be considered as the 4-dihydroxyboryl derivative of phenylalanine.
`
`This boronated amino acid, commonly administered as its fructose complex (BPA-
`
`F), has been given to humans at doses of 900 mg/kg (Ex. 1074) and 400 mg/kg
`
`(Ex. 1073), all without significant toxicity. This is quite a contrast to Dr. Reider’s
`
`contention that phenyl boronic acid derivatives, which includes BPA, are known to
`
`be very toxic. Thus as Baker and colleagues at Anacor put it in their 2009 review
`
`article: “The overwhelming data for the safety of boron should be noted; we
`
`consume in the range of 0.3-4.2 mg per day and it is considered an essential plant
`
`nutrient. Boric acid has a similar LD50 to regular table salt.” (Ex. 1056 at 8
`
`(Executive Summary).) In short, publications discussing the use of boron-
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`containing compounds for neutron capture therapy do not support the conclusion
`
`that boron-containing compounds are toxic.
`
`17. For example, the Patent Owner continues to cite a BNCT article that I
`
`published in 1990 for the proposition that I believe boron-containing compounds
`
`are toxic. (See Ex. 2002.) My 1990 publication does not support the conclusion
`
`that boron-containing compounds are toxic. My discussion of toxicity (Ex. 2002 at
`
`5 (right column)) specifically states “the majority of compounds synthesized for
`
`possible use in NCT” up to that time (1990) had been found to be unsuitable due to
`
`toxicity. I have noted above that the extremely high relative concentration of target
`
`cellular boron required for BNCT means that potential boron carriers must be
`
`administered intravenously to animals (and ultimately humans) in very high doses,
`
`typically 100,000 to 1,000,000 times that of a “normal” pharmaceutical. Hence, it
`
`is not surprising that many potential BNCT compounds are found to be toxic at
`
`these very high doses; even NaCl (table salt) is toxic at high doses. I believed then,
`
`as I do now, that boron is a generally safe, non-toxic, and a unique component of
`
`the medicinal chemist’s toolbox. It is gratifying that Anacor’s scientific team
`
`agrees. (Ex. 1056; Ex. 1059.)
`
`18. Dr. Reider also relies on publications that are outdated to support his
`
`opinions concerning the alleged toxicity of boron. For example, Ex. 2043, which
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`was published by the EPA in 1975, suggests that the use of boric acid as an
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`externally applied antiseptic should be discouraged because of its toxicity. (Ex.
`
`2043 at I-91.) The inaccuracy of this conclusion, and similar conclusions from this
`
`time period, was determined as researchers spent more time investigating boron
`
`and boron-containing compounds. For example, two related reports by Dr.
`
`Maibach in 1998 directly rebut the 1975 publication by the EPA. (Ex. 1050; Ex.
`
`1061.) After reviewing the literature, Dr. Maibach concludes that “there are no
`
`reliable scientific studies quantifying the skin absorbability of boric acid or
`
`inorganic borates.” (Ex. 1050 at 2 (left column).) Based on his studies, Dr.
`
`Maibach reports that boric acid (and other tested boron-containing compounds)
`
`have “very low” skin absorption and do not pose a toxicity threat. (Id. at 9 (right
`
`column).)
`
`19. By the late 1990s and early 2000s, research related to boron and
`
`boron-containing molecules for therapeutic applications had increased
`
`dramatically, which resulted in the understanding that boron-containing molecules
`
`generally did not present a threat of toxicity. This general belief is captured by Dr.
`
`Groziak’s 2001 paper entitled “Boron Therapeutics on the Horizon,” which I relied
`
`on in my original declaration. (Ex. 1027.) Dr. Groziak concludes that no boronic
`
`acids “to date ha[ve] been found to be unusually toxic,” “[b]oric acid (LD50 of
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`3450 mg/kg orally in the mouse and 2660 mg/kg orally in the rat) and its simple
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`borate salts like borax have been studied in great detail and pose no significant
`
`toxicity threat” and that:
`
`The novel classes of boron-based compounds described above are
`rapidly maturing into potent therapeutics in their own right, and
`prescribing clinicians need to be aware that they are coming on line.
`The fact that they are based on the unusual element boron is no cause
`for concern because it is only toward the end of the past millennium
`that organic chemists have learned to construct useful platforms with
`it and medicinal chemists have learned to appreciate its value.
`
`(Id. at 322, 325.) Dr. Groziak’s above opinions concerning toxicity accurately
`
`reflect the consensus of a POSITA concerning the use of boron for pharmaceutical
`
`applications in 2001.
`
`20. Dr. Reider also cites papers that report boron toxicity following
`
`administration of large amounts of boron-containing compounds either orally or
`
`intravenously to support his opinions concerning the alleged toxicity of boron. For
`
`example, Dr. Reider relies on a 1994 publication from Heindel et al. entitled “The
`
`Developmental Toxicity of Boric Acid in Mice, Rats, and Rabbits.” (Ex. 2010.)
`
`Heindel investigated the potential for boric acid to cause developmental toxicity in
`
`mice, rats, and rabbits. (Id. at Abstract.) Heindel reported that boric acid caused
`
`development toxicity with oral doses of boric acid in the range of 80-
`
`400mg/kg/day. (Id. at 1-2 (materials and methods), 5 (right column). 80-400
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`mg/kg/day equates to an oral dose in a 150lb human of roughly 5.4 to 27.2 grams
`
`per day, which is far greater than a human would ever be exposed to when
`
`applying topical formulation for the treatment of onychomycosis. Notably, the
`
`authors of Heindel recognize that their toxicity reports must be considered in the
`
`proper context of human exposure: “These data must be interpreted with respect to
`
`the level of human exposure and sensitivity in order [to] assess potential risk to
`
`human health. In this regard, recent studies have shown that the highest exposures
`
`to boron achieved as a result of dietary intake plus worker exposure were 0.38 mg
`
`boron/kg/day or approximately 1.9 mg/kg/day of boric acid.” (Id. at 5 (right
`
`column).)
`
`21. Dr. Reider’s reliance on oral and intravenous toxicity studies to
`
`support his opinions is misplaced because he does not account for the method of
`
`administration or the large quantities of boron-containing molecules that are
`
`administered in order to identify when toxicity occurs. For example, a 1998 article
`
`entitled Comparative Toxicology of Borates by Susan Hubbard discusses
`
`previously reported toxicity studies (for example, Heindel’s related 1992 paper
`
`(reference 99)) and concludes that the “doses that cause these effects are far higher
`
`than any levels to which the human population could be exposed. Humans would
`
`need to consume daily some 3.3 g of boric acid (or 5.0 g borax) to ingest the same
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`dose level as the lowest animal NOAEL [no adverse effect level].” (Ex. 1054 at 8
`
`(Abstract), 17.) Hubbard concludes “[t]he inorganic borates have low acute
`
`toxicity . . . They are not skin irritants or skin sensitizer . . . they are not
`
`carcinogenic or mutagenic.” (Id. at 17.) Hubbard appropriately evaluates the
`
`toxicity studies in view of real world applications to conclude there is no real
`
`concern regarding toxicity.
`
`22. Dr. Groziak published a chapter entitled Boron Heterocycles as
`
`Platforms for Building New Bioactive Agents within the book Progress In
`
`Heterocyclic Chemistry (Volume 12) in 2000. (Ex. 1049.) Dr. Groziak recognizes
`
`the “relative low toxicity” of studied boron compounds. (Id. at 15 (1.1.6 Relative
`
`Low Toxicity).) In particular, Dr. Groziak explains that “[m]ost of the boronic
`
`acids and other low molecular-weight synthetic boron compounds that have been
`
`examined have been found to be relatively nontoxic” and that “[b]oric acid and
`
`borates have been studied in great detail and post no toxicity threat.” (Id.) I agree.
`
`23. Dr. Reider’s opinions concerning the alleged toxicity of boron
`
`compounds also fail to account for the method of administration. It is well
`
`accepted in the pharmaceutical industry that topical formulations for delivery of a
`
`compound significantly reduce concerns related to systemic toxicity. (Ex. 1028 at 2
`
`(left column).)
`
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`24. Dr. Reider’s opinions concerning selectivity and promiscuity are also
`
`misplaced.1 The location of boron within a molecule will affect the ability of boron
`
`to interact with proteins and other molecules. For example, Phenylboronic acid has
`
`the following structure:
`
`
`
`The single boron-carbon bond allows the boron to rotate freely about the carbon
`
`bond. The ability of the B(OH)2 group to rotate freely around the boron-carbon
`
`bond allows the boron to take a greater number of potential configurations and
`
`therefor interact with a greater number of other molecules. In contrast, the boron
`
`within the oxaboroles disclosed by Austin is confined within the 5-membered ring.
`
`For example, tavaborole has the following structure:
`
`OH
`B
`
`O
`
`
`
`F
`
`In tavaborole, boron is confined by a boron-carbon bond and a boron-oxygen bond
`
`1 I did not see any toxicity or selectivity data in the ’621 patent.
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`within the 5-membered ring. This decreases the “promiscuity” of boron because
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`the number of configurations boron can adopt is reduced by its location within the
`
`ring, which is of particular interest here because Austin already demonstrated that
`
`tavaborole had strong antifungal activity. This reduction in the availability of
`
`boron to interact with other molecules undermines Dr. Reider’s alleged concerns of
`
`non-selective binding.
`
`25.
`
`I previously testified:
`
`In my opinion, as of February 16, 2005, a POSITA would consider the
`preferred compound of Austin, which is the exact same compound
`claimed in claims 1-12 of the ‘621 Patent, obvious to try to
`successfully treat onychomycosis in humans based on it disclosed
`anti-fungal activity and structural similarities, e.g., boron-based cyclic
`compounds.
`
`(Ex. 1006 at ¶ 43.) Dr. Reider’s opinions concerning my previous testimony about
`
`structural similarity between the boron-containing compounds of Austin, Brehove,
`
`and Freeman are also misplaced. Obviously, there are differences between the
`
`compounds of Austin, Brehove, and Freeman. As my previous testimony indicated,
`
`the compounds of Austin, Brehove, and Freeman share structural similarities,
`
`namely, they all include cyclic compounds with boron as the “business end” of the
`
`molecule. (Ex. 2033 at 188:12 – 189:18.) In other words, the compounds of Austin,
`
`Brehove, and Freeman all share known anti-fungal activity, which a POSITA
`
`would have attributed to the presence and availability of boron in the molecules.
`
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`26.
`
`In contrast to the outdated oral and intravenous toxicity studies that
`
`Dr. Reider cites, the two papers I mentioned earlier by Dr. Maibach are much more
`
`relevant to understanding any potential toxicity concerns for the topical
`
`administration of tavaborole to a human to treat onychomycosis. And Dr. Maibach
`
`concludes in 1998 that a person could literally bathe in a 5% solution of boric acid
`
`for 24 hours and percutaneously absorb “significantly less [boron] than the average
`
`daily dietary intake.” (Ex. 1050 at 9 (right column).)
`
`27.
`
`I have also reviewed the 2009 Baker et al. paper entitled “Therapeutic
`
`potential of boron-containing compounds” and the 2011 Baker et al. paper entitled
`
`“Boron-containing inhibitors of synthetases.” (Ex. 1056; Ex. 1059.) Baker 2009
`
`and Baker 2011 both discuss boron’s lack of toxicity based almost exclusively on
`
`information that I was aware of before 2005. The conclusions concerning the lack
`
`of boron toxicity in Baker 2009 and Baker 2011 are conclusions that boron
`
`chemists made before 2005.
`
`28. For example, Baker 2009 concludes “[f]rom all this data, we have
`
`concluded that boron is not an inherently toxic element, such as mercury, and can
`
`be considered by medicinal chemists for use in therapeutics.” (Ex 1056 at 1 (right
`
`column).) But almost all the information Baker 2009 relies on is information that I
`
`was aware of before 2005. For example, the similarity of LD50 values between
`
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`boric acid and table salt was known before 2005. (Id. (left column).) The
`
`ubiquitous use of boric acid in toys, as a preservative in eye wash and vaginal
`
`creams, and as a buffer in biological solutions was known before 2005. (Id.) The
`
`high concentration of boron in fruit, vegetables, and nuts was known before 2005.
`
`(Id.) The consideration of boron as an essential plant nutrient was known before
`
`2005. (Id. (right column).) The safe and effective use of boron-containing
`
`molecules for boron neutron capture therapy was known before 2005. (Id.) The
`
`LD50 value of paraboronophenylalanine and its subcutaneous administration to rats
`
`was known before 2005. (Id.)
`
`29. Baker 2009 cites Groziak’s 2001 review as a “[v]aluable review of
`
`boronic acids in medicine. (Id. at 2 (right column, reference 9).) I relied on this
`
`same Groziak review in my initial declaration. (Ex. 1006 at ¶ 29.) And Baker 2009
`
`also recognizes that the line of Grassberger papers does not support the conclusion
`
`that boron is toxic. (Ex. 1056 at 3 (bottom of left column to top of right column).)
`
`This is the same analysis I performed after reading Patent Owner’s preliminary
`
`response and before I was aware of Baker 2009.
`
`30. Baker 2011 explains “Boron’s ubiquitous occurrence in nature and the
`
`recent success of a boronic acid drug (Velcade®) in the clinic have alleviated
`
`many concerns over its use in pharmaceuticals.” (Ex. 1059 at Abstract.) I was
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`aware of boron’s ubiquitous occurrence in nature and of the proof of boron’s
`
`promise as a therapeutic as evidenced by bortezomib (Velcade®) before 2005, as
`
`was Anacor. (Ex. 1055 at Col. 2:39-3:15. (“The most notable boron containing
`
`therapeutic is the boronic acid bortezomib which was recently launched for the
`
`treatment of multiple myeloma. This breakthrough demonstrates the feasibility of
`
`using boron containing compounds as pharmaceutical agents.”).) With only a few
`
`exceptions, the two Baker papers recap information that was known before 2005 to
`
`reach the same conclusion a POSITA knew before 2005.
`
`31.
`
`In signing this Declaration, I understand that it will be filed as
`
`evidence in a contested case before the Patent Trial and Appeal Board of the
`
`USPTO.
`
`32.
`
`I hereby declare that all statements made herein of my own
`
`knowledge are true and that all statements made on information and belief are
`
`believed to be true; and that these statements were made with the knowledge that
`
`willful false statements and the like so made are punishable by fine or
`
`imprisonment, or both, under Section 1001 of Title 18 of the United States Code.
`
`August __, 2016
`
`Dated:
`
`___________________
`Stephen Kahl, Ph.D.
`
`22
`
`CFAD v. Anacor, IPR2015-01776, CFAD EXHIBIT 1043 - Page 18 of 18

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