·1· · · · UNITED STATES PATENT AND TRADEMARK OFFICE
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`·2· · · · ·BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`·4· ·- - - - - - - - - - - - - - - +
`· · · · · · · · · · · · · · · · · ·|
`·5· ·MYLAN PHARMACEUTICALS, INC., |
`· · ·TEVA PHARMACEUTICALS USA,· · ·|
`·6· ·INC., and AKORN INC.,· · · · ·|
`· · · · · · · · · · · · · · · · · ·|
`·7· · · · · · Petitioners,· · · · ·|
`· · · · · · · · · · · · · · · · · ·|
`·8· · ·vs.· · · · · · · · · · · · ·|
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`·9· · · · · · · · · · · · · · · · ·|
`· · ·ALLERGAN, INC.,· · · · · · · ·|
`10· · · · · · · · · · · · · · · · ·|
`· · · · · · · Patent Owner.· · · · |
`11· · · · · · · · · · · · · · · · ·|
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`12
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`13· · · · · Case IPR2016-01127 (U.S. 8,685,930 B2)
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`14· · · · · Case IPR2016-01128 (U.S. 8,629,111 B2)
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`15· · · · · Case IPR2016-01129 (U.S. 8,642,556 B2)
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`16· · · · · Case IPR2016-01130 (U.S. 8,633,162 B2)
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`17· · · · · Case IPR2016-01131 (U.S. 8,648,048 B2)
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`18· · · · · Case IPR2016-01132 (U.S. 9,248,191 B2)
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`19· · · · Deposition of IVAN T. HOFMANN, CPA/CFF, CLP
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`20· · · · · · · · · · ·Washington, D.C.
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`21· · · · · · · · · · · ·July 14, 2017
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`22· · · · · · · · · · · · ·9:02 a.m.
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`23· ·Job No. LA-133840
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`24· ·Pages 1 - 102
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`25· ·Reported by:· Michele E. Eddy, RPR, CRR, CLR
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`1
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`ALL 2084
`MYLAN PHARMACEUTICALS V. ALLERGAN
`IPR2016-01128
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`Page 2
`·1· · · Deposition of IVAN T. HOFMANN, CPA/CFF, CLP, held
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`·1· · · · · · · · · · ·EXAMINATION INDEX
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`·2· ·at the offices of:
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`·3· · · · · · ·WILSON SONSINI GOODRICH & ROSATI
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`·2· · · · · · · · · · · · · · · · · · · · · · · · · · ·PAGE
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`·3· ·EXAMINATION BY MR. OAKES· · · · · · · · · · · · · · ·5
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`· · · · · · · ·1700 K Street, Northwest
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`·4· · · · · · ·Fifth Floor
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`· · · · · · · ·Washington, D.C.· 20006
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`·5· · · · · · ·(202) 973-8800
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`·6· · · · · · ·Pursuant to Notice, before Michele E.
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`·7· ·Eddy, Registered Professional Reporter, Certified
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`·8· ·Realtime Reporter, and Notary Public in and for
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`·9· ·the District of Columbia.
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`·8· · · · · · · · · · · E X H I B I T S
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`·9· · · · · · (Previously marked and referred to)
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`10· ·ALLERGAN EXHIBIT· · · · · · · · · · · · · · · · · PAGE
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`11· ·Exhibit 2028· ·Declaration of Robert· · · · · · · · 25
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`12· · · · · · · · · S. Maness, Ph.D.
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`13· ·Exhibit 2044· ·NDA 208073 - Xiidra· · · · · · · · · 21
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`15· ·MYLAN EXHIBIT
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`16· ·Exhibit 1007· ·Sall article· · · · · · · · · · · · ·68
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`17· ·Exhibit 1041· ·Reply Declaration of Ivan· · · · · · 10
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`18· · · · · · · · · T. Hofmann
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`·1· · · · · · · · · ·A P P E A R A N C E S
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`·3· ·ON BEHALF OF PETITIONER MYLAN PHARMACEUTICALS, INC.,
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`·4· ·AND MYLAN, INC.:
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`·5· · · · · · ·ANNA G. PHILLIPS, ESQUIRE
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`·6· · · · · · ·Wilson Sonsini Goodrich & Rosati
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`·7· · · · · · ·900 South Capital of Texas Highway
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`·8· · · · · · ·Las Cimas IV, Fifth Floor
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`·9· · · · · · ·Austin, Texas· 78746
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`10· · · · · · ·Telephone:· (512) 338-5400
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`11· · · · · · ·anphillips@wsgr.com
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`13· ·ON BEHALF OF THE PATENT OWNER:
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`14· · · · · · ·ROBERT M. OAKES, ESQUIRE
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`15· · · · · · ·CASEY KRANING-RUSH, Ph.D., ESQUIRE
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`16· · · · · · ·Fish & Richardson, P.C.
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`17· · · · · · ·222 Delaware Avenue, 17th Floor
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`18· · · · · · ·Wilmington, Delaware 19801
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`19· · · · · · ·Telephone:· (302) 652-5070
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`20· · · · · · ·oakes@fr.com
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`21· · · · · · ·cmk@fr.com
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`·1· · · · · · · · · ·P R O C E E D I N G S
`·2· · · · · · · · · · ·Washington, D.C.
`·3· · · · · · · · · · · ·July 14, 2017
`·4· · · · · · · · · · · · · ·- - -
`·5· · · · · · · IVAN T. HOFMANN, CPA/CFF, CLP,
`·6· ·having been duly sworn, testified as follows:
`·7· · ·EXAMINATION BY COUNSEL FOR PATENT OWNER ALLERGAN
`·8· ·BY MR. OAKES:
`·9· · · · Q· · Good morning.
`10· · · · A· · Good morning.
`11· · · · Q· · Would you please state your full name
`12· ·for the record.
`13· · · · A· · Ivan T. Hofmann.
`14· · · · Q· · Can you please provide your current job
`15· ·title, Mr. Hofmann.
`16· · · · A· · I'm a vice president and managing
`17· ·director at Gleason IP.
`18· · · · Q· · You understand the testimony you give
`19· ·today is under oath?
`20· · · · A· · I do.
`21· · · · Q· · You understand that the testimony that
`22· ·you provide today can be submitted to the PTAB?
`23· · · · A· · I do.
`24· · · · Q· · You'll provide honest and truthful
`25· ·answers today, right?
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`·1· · · · A· · Yes.
`·2· · · · Q· · If you answer any of my questions, I'm
`·3· ·going to assume that you understood the question.
`·4· ·Is that fair?
`·5· · · · A· · Yes, I'll do my best.
`·6· · · · Q· · Is there any reason, either medical or
`·7· ·otherwise, that would prevent you from giving
`·8· ·complete and accurate testimony today?
`·9· · · · A· · No, sir.
`10· · · · Q· · Mr. Hofmann, you understand that Mylan
`11· ·has filed IPR petitions challenging the validity
`12· ·of the six patents listed in the Orange Book as
`13· ·covering Restasis, right?
`14· · · · A· · Correct.
`15· · · · Q· · And you understand that Mylan filed
`16· ·those petitions because Mylan seeks to make a
`17· ·generic version of Restasis, correct?
`18· · · · A· · Correct.
`19· · · · Q· · Do you believe that the issue of
`20· ·commercial success is relevant to Mylan's
`21· ·arguments that the patents are obvious?
`22· · · · A· · I mean, I'm not a lawyer or legal
`23· ·expert.· My understanding is that the issue of
`24· ·commercial success does come up as one of the
`25· ·potential objective indicia of nonobviousness with
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`Page 7
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`·1· ·respect to validity of patents.
`·2· · · · Q· · You were not asked to submit a
`·3· ·declaration discussing commercial success in the
`·4· ·initial IPR petitions Mylan filed.· Right?
`·5· · · · A· · I was not.
`·6· · · · Q· · And you, in fact, did not submit any
`·7· ·declarations regarding commercial success with the
`·8· ·initial IPR petitions Mylan filed.· Right?
`·9· · · · A· · And I'm typically not.· It's usually in
`10· ·response to the patent holder asserting commercial
`11· ·success.
`12· · · · Q· · You did not submit a declaration with
`13· ·the initial -- let me withdraw that.
`14· · · · · · ·You did not prepare a declaration to be
`15· ·submitted along with Mylan's initial IPR petition.
`16· ·Correct?
`17· · · · A· · No, sir.
`18· · · · Q· · When were you first contacted to provide
`19· ·testimony in this proceeding?
`20· · · · A· · It would have been very late May, early
`21· ·June of this year.
`22· · · · Q· · Late May, early June of 2017.
`23· · · · A· · Correct.
`24· · · · Q· · You have provided an opinion in this
`25· ·proceeding that the commercial performance of
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`Page 8
`·1· ·Restasis does not provide objective indicia of
`·2· ·nonobviousness in this case.· Correct?
`·3· · · · A· · Correct.
`·4· · · · Q· · And that is because, in your view, there
`·5· ·is not a nexus between the commercial performance
`·6· ·of Restasis and the features recited in the
`·7· ·claims.· Correct?
`·8· · · · A· · Well, I mean, I defer to the entirety of
`·9· ·my declaration.· I think there are many reasons I
`10· ·feel that way, including, you know, the blocking
`11· ·patents, and I'm sure we'll get into everything,
`12· ·but among them is the lack of nexus.
`13· · · · Q· · You have not provided an opinion that
`14· ·the Restasis sales and revenues indicate a lack of
`15· ·commercial success.· Right?
`16· · · · A· · Well, I think I have provided an
`17· ·opinion -- when you use the term "commercial
`18· ·success," that has a certain meaning in a patent
`19· ·case.· I don't disagree that the product has
`20· ·experienced significant sales and profits, and I
`21· ·haven't said otherwise.
`22· · · · Q· · You don't disagree that the product has
`23· ·experienced significant sales and profits.
`24· ·Correct?
`25· · · · A· · Correct.
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`Page 9
`·1· · · · Q· · You're aware that Restasis' gross sales
`·2· ·were over 1.7 billion dollars in 2015?
`·3· · · · · · ·MS. PHILLIPS:· Objection.· Foundation.
`·4· · · · A· · I don't have the numbers in front of me.
`·5· ·And, like I've said, I think gross sales isn't a
`·6· ·good metric.· I think looking at net sales and
`·7· ·some other metrics, after accounting for other
`·8· ·things, are more appropriate.
`·9· · · · Q· · Did you review the Restasis profit and
`10· ·loss statements as part of your testimony in this
`11· ·proceeding?
`12· · · · A· · I did.
`13· · · · Q· · You understand that Restasis has been a
`14· ·profitable product for Allergan every year since
`15· ·it launched in 2003?
`16· · · · A· · According to the product P&L that they
`17· ·produced, that's so, yes.
`18· · · · Q· · Do you dispute that Allergan -- withdraw
`19· ·that.
`20· · · · · · ·Do you dispute Dr. Maness' opinion that
`21· ·Restasis has provided a positive net present
`22· ·value?
`23· · · · A· · Again, all of these positive metrics, I
`24· ·haven't -- I don't have evidence that says
`25· ·otherwise.· However, I have opinions that are
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`·1· ·explained in my declaration.
`·2· · · · Q· · Why don't we -- I don't want to -- I'll
`·3· ·just give this to you now so you're free to refer
`·4· ·to it.
`·5· · · · A· · Okay.
`·6· · · · Q· · This is Exhibit 1041, I believe, in each
`·7· ·of the respective IPR petitions.· It's the reply
`·8· ·declaration of Ivan T. Hofmann.
`·9· · · · · · ·(Exhibit 1041 was previously marked and
`10· ·referred to.)
`11· · · · Q· · Mr. Hofmann, can you confirm that the
`12· ·declaration we handed you that's been submitted as
`13· ·Exhibit 1041 is, in fact, the reply declaration
`14· ·you submitted in these proceedings?
`15· · · · A· · Just quickly flipping through it, it
`16· ·does appear to be.
`17· · · · Q· · If you look at the front page of your
`18· ·declaration, you see there's six IPR cases listed
`19· ·there?
`20· · · · A· · Yes.
`21· · · · Q· · Is it your understanding that the
`22· ·identical declaration from you is submitted in
`23· ·each of the six proceedings?
`24· · · · A· · That's my understanding.
`25· · · · Q· · I'm going to not make a distinction
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`·1· · · · A· · No.
`·2· · · · Q· · Has -- does the declaration which we
`·3· ·have -- that's been submitted as Exhibit 1041
`·4· ·contain all of the opinions -- all of your
`·5· ·opinions regarding commercial success?
`·6· · · · A· · It's my best effort to bring together
`·7· ·all of my opinions on this issue, yes.
`·8· · · · Q· · I want to look on the front page of your
`·9· ·declaration.· Under -- the last sentence of the
`10· ·footnote, it states that "The word-for-word
`11· ·identical papers filed in each proceeding
`12· ·identified in the caption pursuant to the Board's
`13· ·scheduling order."
`14· · · · · · ·Do you see that?
`15· · · · A· · Yes.
`16· · · · Q· · You understand that to mean that this
`17· ·identical declaration was filed in each of the six
`18· ·proceedings?
`19· · · · A· · That's my understanding.
`20· · · · Q· · If you could turn, please, Mr. Hofmann,
`21· ·to page 7 of your declaration.· I want to focus
`22· ·you in particular on footnote 6.
`23· · · · A· · Okay.
`24· · · · Q· · You are not a medical doctor, correct?
`25· · · · A· · Yes.
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`·1· ·today between the various proceedings, the actual
`·2· ·IPRs.· If you feel that there needs to be a
`·3· ·distinction, please let me know.· Okay?
`·4· · · · A· · Will do.
`·5· · · · Q· · Were you asked to provide an opinion
`·6· ·that Restasis hasn't experienced significant sales
`·7· ·and profits?
`·8· · · · · · ·MS. PHILLIPS:· Objection.· Form.
`·9· · · · A· · I don't -- I mean, I was asked to
`10· ·analyze and respond to the Maness declaration and
`11· ·provide my independent objective opinions.
`12· · · · Q· · Have you reviewed Mylan's reply brief,
`13· ·which cites to your declaration?
`14· · · · A· · I don't believe I have.· That would have
`15· ·been filed the same day?
`16· · · · Q· · Correct.
`17· · · · A· · No, I have not.
`18· · · · Q· · Have you spoken with Dr. Andrew Calman
`19· ·regarding your opinions in this proceeding?
`20· · · · A· · Not in this proceeding.
`21· · · · Q· · Have you spoken with Dr. Amiji with
`22· ·respect to your opinions in this proceeding?
`23· · · · A· · No, sir.
`24· · · · Q· · Have you spoken with Dr. Bloch with
`25· ·respect to your opinions in this proceeding?
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`·1· · · · Q· · You're not an ophthalmologist?
`·2· · · · A· · Correct.
`·3· · · · Q· · You're not an optometrist?
`·4· · · · A· · Correct.
`·5· · · · Q· · You are not a clinician.· Correct?
`·6· · · · A· · Correct.
`·7· · · · Q· · You are not -- withdraw that.
`·8· · · · · · ·Are you aware of the definition of a
`·9· ·person of ordinary skill in the art that has been
`10· ·proffered by the technical experts in these
`11· ·proceedings?
`12· · · · A· · I've reviewed it.· I don't have it
`13· ·memorized.
`14· · · · Q· · You're not a person of ordinary skill
`15· ·pursuant to the definition that's been offered by
`16· ·the technical experts in these proceedings, right?
`17· · · · A· · No, sir.
`18· · · · Q· · You are not an expert in formulation
`19· ·pharmaceuticals.· Right?
`20· · · · A· · Correct.
`21· · · · Q· · You are not an expert in the formulation
`22· ·of ophthalmic drugs.· Right?
`23· · · · A· · No, sir.
`24· · · · Q· · You are not an expert in dry eye
`25· ·disease.· Right?
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`·1· · · · A· · No.
`·2· · · · Q· · And you're not an expert in the
`·3· ·treatment of dry eye disease.
`·4· · · · A· · No, sir.
`·5· · · · Q· · You're not an expert in interpreting
`·6· ·patent claims related to pharmaceutical
`·7· ·formulations, right?
`·8· · · · A· · No.
`·9· · · · Q· · You are not an expert in interpreting
`10· ·patent claims related to clinical features of
`11· ·pharmaceutical formulations, right?
`12· · · · A· · No, I'm not.
`13· · · · Q· · In footnote 6, you say that -- you cite
`14· ·your understanding of technical issues to various
`15· ·sources for those technical understandings as
`16· ·identified throughout this declaration.· Is that
`17· ·correct?
`18· · · · A· · Yes.
`19· · · · Q· · So it is fair, for purposes of today and
`20· ·it's fair for the board to consider the -- your
`21· ·sources of statements and opinions you give in the
`22· ·reports to be what's cited in the footnotes.
`23· ·Right?
`24· · · · A· · I've done my best effort there, sure.
`25· · · · Q· · Where you rely on Dr. Calman for
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`·1· ·information, you've cited to him in the footnotes?
`·2· · · · A· · That's why I say I've done my best
`·3· ·effort.· I do cite to Dr. Calman in many
`·4· ·instances.
`·5· · · · Q· · When you rely on Dr. Amiji for
`·6· ·information, you likewise would cite to his report
`·7· ·or testimony for that proposition?
`·8· · · · A· · Yes.· I mean, like I said, I've done my
`·9· ·best efforts.· Maybe we'll go through examples.
`10· · · · Q· · When the Board is reviewing your
`11· ·testimony, can they -- let me withdraw that.
`12· · · · · · ·When the Board is reviewing your
`13· ·testimony, is it fair for them to look to the
`14· ·footnotes for the sources of the information
`15· ·you're relying on for particular opinions?
`16· · · · A· · Of course.
`17· · · · Q· · If we could turn to paragraph 12, which
`18· ·is on the same -- which is on page 7.· The last
`19· ·sentence on that page, you state that "Restasis is
`20· ·a topical immunomodulator indicated to increase
`21· ·tear production in patients whose tear production
`22· ·is presumed to be suppressed due to ocular
`23· ·inflammation" -- continuing to the next page --
`24· ·"associated with keratoconjunctivitis sicca
`25· ·(KCS)."· Is that correct?
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`·1· · · · A· · Yes.
`·2· · · · Q· · Your understanding is that Restasis
`·3· ·increases the production of natural tears?
`·4· · · · A· · Again, I'm not a technical expert or
`·5· ·clinician, but that's my understanding.
`·6· · · · Q· · And you're aware that Restasis is the
`·7· ·only product approved to increase natural tear
`·8· ·production, correct?
`·9· · · · A· · I believe that Xiidra is as well.
`10· · · · Q· · Your understanding is that Xiidra is
`11· ·approved to --
`12· · · · A· · Maybe I'm misremembering the label.
`13· · · · Q· · I think we can get there a little later.
`14· · · · A· · Okay.
`15· · · · Q· · So you have a couple different opinions.
`16· ·I'm going to try to take them in buckets.
`17· · · · A· · Sure.
`18· · · · Q· · One of your opinions is that -- let me
`19· ·back up.
`20· · · · · · ·Your declaration responds to the
`21· ·declaration Dr. Maness submitted with -- in
`22· ·connection with Allergan's opposition to the IPR
`23· ·petitions?
`24· · · · A· · Correct.
`25· · · · Q· · One of your opinions is that -- this
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`·1· ·begins in paragraph 43 of your declaration.· One
`·2· ·of your opinions is that Dr. Maness fails to
`·3· ·analyze Restasis in the relevant market.· Correct?
`·4· · · · A· · Correct.
`·5· · · · Q· · Do you understand Dr. Maness' opinion to
`·6· ·be that Restasis is in its own market?
`·7· · · · A· · That's my understanding of his opinion.
`·8· · · · Q· · And you disagree with that definition.
`·9· ·Right?
`10· · · · A· · Correct.
`11· · · · Q· · You would agree that Dr. Maness does --
`12· ·he does define the relevant market as only
`13· ·Restasis.
`14· · · · A· · Correct.· I disagree with his definition
`15· ·of the relevant market.
`16· · · · Q· · But you agree that he has provided a
`17· ·definition?
`18· · · · A· · Being Restasis only, yes, that's his
`19· ·opinion.
`20· · · · Q· · Now, you in -- beginning in paragraph, I
`21· ·believe, 46 of your declaration and extending
`22· ·through, say, paragraph 53, you list a number of
`23· ·products which you say are used to treat dry eye
`24· ·disease or to treat the symptoms of dry eye
`25· ·disease.· Correct?
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`·1· · · · A· · I think that's fair.
`·2· · · · Q· · You have not undertaken a separate
`·3· ·analysis of defining the relevant markets -- what
`·4· ·you believe is the relevant market for Restasis.
`·5· ·Correct?
`·6· · · · A· · Well, I mean, I think what I've done is
`·7· ·I have identified, based on testimony and Allergan
`·8· ·documents, a variety of products and procedures
`·9· ·and different things that are used for the
`10· ·treatment of dry eye.· I think that these are all
`11· ·things that would be competitors to Restasis, but,
`12· ·no, I haven't -- I haven't done a definitive
`13· ·definition of which products would comprise the
`14· ·relevant market.· I think any and all of these are
`15· ·identified as competing products by experts for
`16· ·Allergan, experts for the petitioners, as well as
`17· ·Allergan documents.
`18· · · · Q· · You have not done a definitive
`19· ·definition of which products would comprise the
`20· ·relevant market for Restasis, correct?
`21· · · · A· · Well, I think I haven't because I don't
`22· ·have a data set to then do anything with it.
`23· · · · Q· · Did you -- have you analyzed in your
`24· ·declaration the extent to which the products
`25· ·identified in paragraphs 46 through 53 of your
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`·1· · · · A· · In terms of my critique of Dr. Maness,
`·2· ·yes, that I don't believe he has applied it to the
`·3· ·relevant market.
`·4· · · · Q· · But you didn't define the relevant
`·5· ·market in response to Dr. Maness' declaration.
`·6· ·Right?
`·7· · · · · · ·MS. PHILLIPS:· Objection.· Asked and
`·8· ·answered.
`·9· · · · A· · He's asserting commercial success.· I'm
`10· ·saying he hasn't done so properly with respect to
`11· ·defining the relevant market.· I don't have a data
`12· ·set to do an alternative calculation, but that
`13· ·doesn't mean just because he did it for the wrong
`14· ·market, that that should stand.
`15· · · · Q· · You -- in discussing the products that
`16· ·you identified in paragraphs 46 through 53 -- and
`17· ·I'm looking at the top of paragraph 45 on page 33
`18· ·here -- you identified these products as products
`19· ·that are used to treat dry eye disease/KCS and/or
`20· ·symptoms of dry eye disease/KCS.· Correct?
`21· · · · A· · Correct.
`22· · · · Q· · You've not separately -- let me withdraw
`23· ·that.
`24· · · · · · ·You do not separately discuss which
`25· ·products are used to treat dry eye disease or KCS
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`Page 19
`·1· ·declaration are used as complementary products to
`·2· ·Restasis?
`·3· · · · A· · Well, that's another complicating
`·4· ·factor.· I mean, I certainly understand,
`·5· ·acknowledge, and discuss the fact that they
`·6· ·sometimes are used as a monotherapy, sometimes
`·7· ·used complementary with Restasis.· Again, I don't
`·8· ·have a data set that allows me to parse that out
`·9· ·one way or the other.
`10· · · · Q· · You do agree that these other products
`11· ·are sometimes used as complements to Restasis,
`12· ·used in conjunction with Restasis?
`13· · · · · · ·MS. PHILLIPS:· Objection.· Form.
`14· · · · A· · I mean, I'm not a clinician.· I think at
`15· ·least some of them, that would be so.
`16· · · · Q· · Do you believe, when analyzing
`17· ·commercial success, that sales -- let me withdraw
`18· ·that.
`19· · · · · · ·In analyzing commercial success, sales
`20· ·must be considered in light of the relevant
`21· ·market, correct?
`22· · · · A· · I think that's generally so.
`23· · · · Q· · Is that the -- did you apply that
`24· ·principle in this case, to your opinions in this
`25· ·case?
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`Page 21
`·1· ·and which products are used to treat the symptoms
`·2· ·of dry eye disease or KCS, correct?
`·3· · · · A· · Yes.· As I explain in my declaration and
`·4· ·my understanding from how a patient who presents
`·5· ·with dry eye disease, these are all part of the
`·6· ·toolbox that are used by clinicians without the
`·7· ·distinction your question presupposes.
`·8· · · · Q· · You, in your analysis, did not
`·9· ·distinguish between products which treat the
`10· ·underlying cause of dry eye disease and which
`11· ·products treat symptoms, right?
`12· · · · · · ·MS. PHILLIPS:· Objection.· Form.
`13· · · · A· · In looking at these products, I've
`14· ·looked at the products that experts for Allergan
`15· ·and petitioners have identified, as well as
`16· ·Allergan themselves, as being available for the
`17· ·treatment of and symptoms of dry eye disease. I
`18· ·haven't distinguished in the way that your
`19· ·question asks.
`20· · · · · · ·MR. OAKES:· I'm going to mark what has
`21· ·been submitted in these proceedings as Exhibit
`22· ·2044, which is the prescribing information for
`23· ·Xiidra.
`24· · · · · · ·(Exhibit 2044 was previously marked and
`25· ·referred to.)
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`Page 22
`·1· · · · Q· · Mr. Hofmann, just to go back to our
`·2· ·discussion a few minutes ago, you see the -- on
`·3· ·the first page of Exhibit 2044, on the left-hand
`·4· ·column, there's a notation, "Indications of
`·5· ·Usage"?
`·6· · · · A· · Yes.
`·7· · · · Q· · Does this refresh your memory that
`·8· ·Xiidra is indicated for the treatment of the signs
`·9· ·and symptoms of dry eye disease?
`10· · · · A· · Yes.· Like I said in my earlier answer,
`11· ·maybe I was misremembering, and this refreshes me
`12· ·that I was -- I did remember that I was
`13· ·misremembering.· Sorry.
`14· · · · Q· · So you would agree that Restasis is the
`15· ·only product that has been approved to increase
`16· ·natural tear production.· Right?
`17· · · · A· · I think that's right, on label, on
`18· ·label.
`19· · · · Q· · One other question on the Xiidra label.
`20· ·If you look again at the top, the first page of
`21· ·the document, top left-hand corner, Xiidra was
`22· ·approved for use in the United States in 2016.
`23· ·Correct?
`24· · · · A· · Yes.
`25· · · · Q· · You're aware that Restasis was approved
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`Page 23
`·1· ·in the United States in late 2002.· Correct?
`·2· · · · A· · Right.· Launched in 2003, approved in
`·3· ·late '02.
`·4· · · · Q· · So from the time -- let me withdraw
`·5· ·that.
`·6· · · · · · ·Xiidra was the first prescription drug
`·7· ·that was approved for dry eye disease since the
`·8· ·approval of Restasis in late 2002.· Right?
`·9· · · · · · ·MS. PHILLIPS:· Objection.· Form.
`10· · · · A· · I think in terms of prescription drug on
`11· ·label, I mean, I know there's many
`12· ·corticosteroids, there's many over-the-counter
`13· ·products, et cetera, but I think that's right as
`14· ·your question phrased it.
`15· · · · Q· · Restasis, when it was approved in late
`16· ·2002, was the first prescription drug product that
`17· ·had -- that was approved to treat dry eye.· Right?
`18· · · · A· · Specifically on label, I think that's
`19· ·right.
`20· · · · Q· · You have some opinions on marketing
`21· ·efforts that you provide in this case.
`22· · · · A· · I do.
`23· · · · Q· · Is it your understanding that branded
`24· ·pharmaceutical companies are required by the FDA
`25· ·to only promote their products on label?
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`Page 24
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`·1· · · · A· · Correct.
`·2· · · · Q· · If you could turn to paragraph 55 of
`·3· ·your declaration, please, pages 40 and 41.· On the
`·4· ·top -- paragraph 55, the top of page 41, you say,
`·5· ·"The Maness declaration fails to address many of
`·6· ·the numerous additional available options used to
`·7· ·treat dry eye disease/KCS."
`·8· · · · · · ·Do you see that?
`·9· · · · A· · Correct.
`10· · · · Q· · You understand that Dr. Maness did
`11· ·actually discuss those other products in his
`12· ·declaration, right?
`13· · · · A· · Those other products?
`14· · · · Q· · The numerous additional options that you
`15· ·refer to in paragraph 55.
`16· · · · A· · He discusses certain of them, yes.
`17· · · · Q· · So your dispute with Dr. Maness is that
`18· ·he doesn't define the market to include those
`19· ·products.· Right?
`20· · · · A· · No, what I'm saying here is -- so the
`21· ·first sentence says he says market share has
`22· ·little meaning.· Then he does some analytic that
`23· ·includes some dollar sales information, but that
`24· ·dollar sales information doesn't include certain
`25· ·products, and then I explain the problem with the
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`Page 25
`·1· ·dollar sales analysis that he's undertaken.
`·2· · · · Q· · The next sentence I think is what you
`·3· ·just referred to.· "The Maness declaration
`·4· ·discusses dollar sales only rather than
`·5· ·prescriptions or units sold."· Correct?
`·6· · · · A· · Yes.
`·7· · · · Q· · Then you cite to portions of Dr. Maness'
`·8· ·declaration, in particular, figures 6 and 7?
`·9· · · · A· · Correct.
`10· · · · Q· · So let's mark as -- what's been
`11· ·submitted to the Board as Exhibit 2028.· It's the
`12· ·declaration of Robert Maness.
`13· · · · · · ·(Exhibit 2028 was previously marked and
`14· ·referred to.)
`15· · · · Q· · Mr. Hofmann, I want to direct you to
`16· ·figures 6 and 7, which you cite.· Actually, figure
`17· ·7 is probably better.· That's on page 29.· Are you
`18· ·there, sir?
`19· · · · A· · I am.
`20· · · · Q· · All right.· And so this -- this is
`21· ·the -- one of the figures you're referring to,
`22· ·right, when you take issue with Dr. Maness'
`23· ·presentation of dollar volumes rather than
`24· ·prescriptions?
`25· · · · A· · Correct.· Prescriptions and units.
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`Page 26
`·1· · · · Q· · Okay.· I understand you don't -- you
`·2· ·disagree that dollar values are the appropriate
`·3· ·measure.· Right?· That's fair?
`·4· · · · A· · That's correct.
`·5· · · · Q· · Looking at dollar -- looking at figure
`·6· ·7, if you include the sales of other products,
`·7· ·such as artificial tears, Xiidra, and other --
`·8· ·other products in the relevant market, Restasis
`·9· ·still captures, at least in terms of dollar
`10· ·values, approximately 80 percent of that market.
`11· ·Right?
`12· · · · A· · Well, I mean, that's where I have a
`13· ·whole host of problems.· I mean, as I explain, we
`14· ·know that discounting on Restasis is 40 or 50
`15· ·percent off these dollars.· So that should knock
`16· ·that down dramatically.· We know there's a price
`17· ·difference that greatly skews the percentages in
`18· ·favor of Restasis.· That's why I'm saying
`19· ·prescriptions in units, you know, are what matter.
`20· ·Plus, as I explain in the sentences before,
`21· ·there's products missing from this.
`22· · · · · · ·So I don't disagree that he's aggregated
`23· ·the data in a way that is reflected here, but I
`24· ·disagree with any implication from the way he's
`25· ·aggregated the data for the reasons that I have
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`Page 27
`·1· ·just explained now and I've explained in my
`·2· ·declaration.
`·3· · · · Q· · You have not, in your declaration,
`·4· ·compared units sold of Restasis to units sold of
`·5· ·other products that are used to treat dry eye or
`·6· ·the symptoms of dry eye, right?
`·7· · · · A· · Well, that was what I said several
`·8· ·answers ago.· I don't have a data set -- it has
`·9· ·not been provided -- that would allow me to do
`10· ·that.· But I do have documents.· I think I cite a
`11· ·2012 document that says artificial tears, in terms
`12· ·of unit volume, are far greater than use of
`13· ·Restasis.· We have Dr. Sheppard saying that only
`14· ·20 percent of his patients are even eligible to
`15· ·use Restasis.
`16· · · · · · ·So there's evidence that suggests that
`17· ·if one looked at units and actual prescribing and
`18· ·actual administration use, clearly other products
`19· ·are used far more frequently than Restasis.
`20· · · · Q· · Artificial tears are over-the-counter
`21· ·products, correct?
`22· · · · A· · Yes.
`23· · · · Q· · So you don't need a prescription for
`24· ·those?
`25· · · · A· · No.· That's why I said prescribed or
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`Page 28
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`·1· ·administered.
`·2· · · · Q· · If we -- if we go to figure 1 in
`·3· ·Dr. Maness' report.· That's on page 16.
`·4· · · · A· · When you're doing pages, you're doing
`·5· ·bottom right?
`·6· · · · Q· · Yes, the bottom right.· I just noticed
`·7· ·there's two.
`·8· · · · A· · Yes.
`·9· · · · Q· · So you would agree that it's not
`10· ·surprising to see growth in total prescriptions
`11· ·shortly after the launch of a product.· Right?
`12· · · · A· · I think that's right.
`13· · · · Q· · Okay.· It would be relatively unusual to
`14· ·see continued growth of a -- in prescriptions of a
`15· ·pharmaceutical product ten-plus years after
`16· ·launch.· Right?
`17· · · · A· · I think it depends.· I mean, here we
`18· ·have a lot of -- well, you're asking generally.
`19· ·It depends.· It is not unusual or usual.
`20· · · · Q· · You can set the Maness report aside.· We
`21· ·might come back to it later.
`22· · · · A· · Okay.
`23· · · · Q· · I want to go back to your declaration,
`24· ·in particular, paragraph 57.· You discuss what you
`25· ·refer to as a churn rate in prescriptions of
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`Page 29
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`·1· ·Restasis?
`·2· · · · A· · I do.
`·3· · · · Q· · When you say that, you're referring to
`·4· ·the number of new prescriptions at a given time.
`·5· ·Is that fair?
`·6· · · · A· · As a percentage of total prescriptions.
`·7· · · · Q· · Okay.· And so for that opinion, you're
`·8· ·relying on the NRx or new prescription data from
`·9· ·IMS?
`10· · · · A· · Correct.
`11· · · · Q· · Now, the new prescription data from
`12· ·IMS -- withdraw that.
`13· · · · · · ·Do you understand that the new
`14· ·prescription data from IMS counts as a new
`15· ·prescription in an instance where a patient's
`16· ·prescription has expired and they have to go get a
`17· ·new prescription from their doctor?
`18· · · · A· · I think it's slightly different than
`19· ·that.· I think it's if someone hasn't -- or if
`20· ·someone has only refilled -- let me back up.· It's
`21· ·a sixth-month window.· Basically -- so it's not as
`22· ·narrow as your question was.· But it's if I got a
`23· ·prescription in January and I'm on Restasis and
`24· ·it's a 90-day prescription and I don't fill it
`25· ·again until August, I'm counted as a new
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`Page 30
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`·1· ·prescription in August.
`·2· · · · Q· · Right.· So you would agree that the new
`·3· ·prescription data from IMS does not necessarily
`·4· ·mean that each one of those new prescriptions is a
`·5· ·new patient.· Right?
`·6· · · · A· · There is some component of that NRx data
`·7· ·that is a patient that has lapsed in terms of a
`·8· ·six-month period.
`·9· · · · Q· · So not all new prescriptions as recorded
`10· ·by IMS are new patients on Restasis?
`11· · · · A· · Well, and that's true in general.· We
`12· ·know that Allergan was targeting old patients to
`13· ·come back, but the churn rate and the use of NRx
`14· ·to identify churn rate is generally accepted as
`15· ·the best method one has to qualitatively -- or
`16· ·quantitatively consider churn.
`17· · · · Q· · If we go to, I think in figure 2 of
`18· ·Dr. Maness' report.· That's page 17 in the bottom
`19· ·right.
`20· · · · A· · Okay.
`21· · · · Q· · So you see Dr. Maness has plotted
`22· ·Restasis NRx or new prescriptions over time?
`23· · · · A· · Yes.
`24· · · · Q· · And the source of that is IMS data?
`25· · · · A· · Correct.
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`Page 32
`·1· ·objective evidence of the commercial performance
`·2· ·of Restasis.
`·3· · · · Q· · Does your opinions on marketing driving
`·4· ·performance, in your mind, support a lack of nexus
`·5· ·between Restasis sales and revenues and these
`·6· ·pending claims?
`·7· · · · A· · Yes.
`·8· · · · Q· · Does your opinions on marketing driving
`·9· ·performance support the opinion that Restasis
`10· ·sales and revenues don't provide objective indicia
`11· ·of nonobviousness in any other way other than as
`12· ·it relates to nexus?
`13· · · · · · ·MS. PHILLIPS:· Objection.· Form.
`14· · · · A· · I guess that