Christopher A. Vellturo , Ph.D.
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`April 5, 2017
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`Page 1
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` UNITED STATES PATENT AND TRADEMARK OFFICE
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` BEFORE THE PATENT TRIAL AND APPEAL BOARD
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` MYLAN PHARMACEUTICALS, INC.,
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` Petitioner,
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` v.
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` JANSSEN ONCOLOGY, INC.
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` Patent Owner.
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` Case IPR2016-01332
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` Patent 8,822,438
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` ____________and________________
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` WOCKHARDT BIO AG
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` Petitioner,
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` v.
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` JANSSEN ONCOLOGY, INC.
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` Patent Owner.
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` Case IPR2016-01582
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` Patent 8,822,438 B2
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` ___________________________
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` DEPOSITION OF
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` CHRISTOPHER A. VELLTURO, Ph.D
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` Wednesday, April 5, 2017
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` 10:07 a.m.
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`VERITEXT LEGAL SOLUTIONS
`202-803-8830
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`WCK1099
`Wockhardt Bio AG v. Janssen Oncology, Inc.
`IPR2016-01582
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`Christopher A. Vellturo , Ph.D.
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`Page 2
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`1 APPEARANCES: (Continued)
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`April 5, 2017
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`Page 4
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`ON BEHALF OF PETITIONER WOCKHARDT BIO AG:
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`4 STERNE KESSLER GOLDSTEIN FOX
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`5 BY: CHRISTOPHER M. GALLO, Ph.D., ESQUIRE
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`1 JOB NO.: 2587712
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`2 PAGES: 1 - 148
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`3 REPORTER: Donna M. Lewis, RPR, CSR (HI)
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`4 5 6
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` Deposition of CHRISTOPHER A.
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`6 1100 New York Avenue, N.W.
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`7 VELLTURO,Ph.D, held at Sidley Austin, 1501
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`7 Washington, D C 20005
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`8 K Street, N.W., Washington, D C pursuant to
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`8 Telephone: (202) 772-8868
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`9 Notice, before Donna Marie Lewis, Registered
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`9 Email: cgallo@skgf.com
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`10 Professional Reporter and Notary Public of and for
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`11 the District of Columbia.
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`11 STERNE KESSLER GOLDSTEIN FOX
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`12 BY: KRISHAN THAKKER, ESQUIRE
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`13 1100 New York Avenue, N.W.
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`14 Washington, D C 20005
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`15 Telephone: (202) 772-8643
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`16 Email: kthakker@skgf.com
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`1 A P P E A R A N C E S
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`1 APPEARANCES: (Continued)
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`ON BEHALF OF PATENT OWNER JANSSEN ONCOLOGY, INC.:
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`2 3
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`4 SIDLEY AUSTIN, LLP
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`2 ON BEHALF OF PETITIONER MYLAN PHARMACEUTICALS
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`3 INC.:
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`4 PERKINS COIE
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`5 BY: ROBERT D. SWANSON, ESQUIRE
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`5 BY: PAUL J. ZEGGER, ESQUIRE
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`6 700 13th Street, N.W.
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`7 Suite 600
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`8 Washington, D C 20005
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`9 Telephone: (202) 654-1729
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`6 1501 K Street, N.W.
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`7 Washington, D C 20005
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`8 Telephone: (202) 736-8060
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`9 Email: pzegger@sidley.com
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`10 Email: RSwanson@perkinscoie.com
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`11
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`12 PERKINS COIE
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`11 ALSO PRESENT:
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`12 GRAHAM DAVIS, LEGAL VIDEOGRAPHER
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`13 BY: SHANNON M. BLOODWORTH, ESQUIRE
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`14 700 13th Street, N.W.
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`15 Suite 600
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`16 Washington, D C 20005
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`17 Telephone: (202) 654-6204
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`18 Email: SBloodworth@perkinscoie.com
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`Christopher A. Vellturo , Ph.D.
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`Page 6
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`April 5, 2017
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`Page 8
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`1 of Mylan. I'm with Perkins Coie. With me is
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`2 Shannon Bloodworth also with Perkins Coie.
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`3 MR. GALLO: I'm Christopher Gallo from
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`4 Sterne, Kessler, Goldstein & Fox representing
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`5 petitioner Wockhardt.
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`6 MR. THAKKER: I'm Krishan Thakker from
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`7 Sterne, Kessler, Goldstein & Fox also representing
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`8 petitioner Wockhardt.
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`9 MR. ZEGGER: Paul Zegger with Sidley
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`10 Austin for the patent owner.
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`11 THE VIDEOGRAPHER: Our court reporter,
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`12 Donna Lewis representing Veritext will swear in
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`13 the witness and we can proceed.
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`14 Whereupon,
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`15 C H R I S T O P H E R A. V E L L T U R O, Ph.D.
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`16 after having been first duly sworn by the Notary
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`17 Public was examined and testified as follows:
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`18 EXAMINATION ON BEHALF OF PETITIONER MYLAN
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`19 PHARMACEUTICALS INC.
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`20 BY MR. SWANSON:
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`21 Q Good morning, Dr. Vellturo.
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`22 A Good morning.
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`1 I N D E X
`2 WITNESS:
`3 CHRISTOPHER A. VELLTURO, PhD
`4 EXAMINATION BY: PAGE
`5 BY MR. SWANSON
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`6 7
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` E X H I B I T S
` (Attached)
`8 VELLTURO
`EXHIBITS: DESCRIPTION PAGE
`9 No. 1088 BTG Website Printout 17
`10 No. 1089 Zytiga Website Printout 57
`11
`12 EXHIBITS PREVIOUSLY MARKED
`(Not Attached)
`13 No. 2044 Declaration of C Vellturo 10
`14 No. 2028 Declaration of I Judson 11
`15 No. 1065 Zytiga's Label 72
`16 No. 2134 Market Share Document 78
`17 No. 2110 Johnson & Johnson 2012 Reports 111
`18 No. 2092 Survey of Urologists 128
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`Page 7
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`Page 9
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`1 P-R-O-C-E-E-D-I-N-G-S
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`1 Q I know you have done this a few times
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`2 THE VIDEOGRAPHER: So we are now on the
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`2 before so I hope I don't need to go over all of
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`3 record. Please note that the microphones are
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`3 the ground rules, but I do want to mention a
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`4 sensitive and may pick up whispering and private
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`4 couple especially because this is an IPR. It's
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`5 conversations. Please turn off all cell phones or
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`5 really important to -- you know, this is always
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`6 place them away for the microphones as they can
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`6 true. But given it's an IPR it's always important
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`7 interfere with the deposition audio. Recording
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`7 to say yes or no versus uh huh or huh uh just to
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`8 will continue until all parties have agreed to go
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`8 provide a clear record since we are making a trial
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`9 off of the record. My name is Graham Davis
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`9 record in this proceeding. Does that work for
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`10 representing Veritext. And today's date is
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`10 you?
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`11 April 5, 2017. And the time is approximately
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`11 A That's fine.
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`12 a.m. This deposition is being held at Sidley
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`12 Q And feel free to let me know if you need
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`13 Austin and is being taken by counsel for the
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`13 to take a break or anything and we can finish
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`14 plaintiffs. This caption of the case is Mylan
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`14 whatever question is currently pending and then we
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`15 Pharmaceuticals Incorporated v. Janssen Oncology.
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`15 can take a break. Sounds good?
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`16 This case is filed in the United States Patent and
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`16 A Understood.
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`17 Trademark Office. The name of the witness is
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`17 Q So you understand that the priority date
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`18 Christopher A. Vellturo, Ph.D.
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`18 of the patent at issue in this proceeding is
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`19 At this time the attorneys present in
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`19 August 25, 2006?
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`20 the room and attending remotely will identify
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`20 A My recollection is it's August 2006.
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`21 themselves and the parties that they represent.
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`21 25th sounds right.
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`22 MR. SWANSON: Robert Swanson on behalf
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`22 MR. SWANSON: Okay. That's good enough.
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`Christopher A. Vellturo , Ph.D.
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`Page 10
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`April 5, 2017
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`Page 12
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`1 I will give you your report which is Exhibit 2044.
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`1 BY MR. SWANSON:
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`2 (Whereupon, Exhibit No. 2044 previously
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`2 Q And does paragraph seven say when BTG
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`3 marked was introduced.)
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`4 BY MR. SWANSON:
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`3 began actively trying to license the '213 Patent?
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`4 A The phrase in paragraph seven is, in the
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`5 Q And if you could turn to paragraph 30 of
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`5 years following 2000.
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`6 your report, Exhibit 2044. Let me know when you
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`6 Q And so you don't have any evidence
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`7 are there?
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`7 between 1999 and 2002 specifically that BTG was
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`8 A Paragraph 30. Is that what you said?
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`8 actively trying to license the '213 Patent, right?
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`9 Q Yes.
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`9 A Well, the qualifier here is in the years
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`10 A I'm at paragraph 30.
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`10 following 2000. That would include 2001.
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`11 Q Boehringer suspended its involvement
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`11 Q But it doesn't necessarily say 2000 or
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`12 with abiraterone acetate development in 1999,
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`12 2001, does it?
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`13 right?
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`13 A The number 2001 doesn't appear in
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`14 A Yes. That's my recollection.
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`14 paragraph seven.
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`15 Q And the first evidence that you present
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`15 Q And there is no citation to any evidence
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`16 of BTG trying to license the '213 Patent was in
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`16 in paragraph seven of Exhibit 2028, is there?
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`17 2002. Is that correct?
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`17 A I'm not a lawyer. Isn't this evidence?
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`18 A That's where the search of the Wayback
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`18 This is an affidavit by a fact witness.
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`19 Machine was undertaken, back in 2002. I'm not
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`19 Q Sure.
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`20 sure whether something happened before that. But
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`20 A Okay.
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`21 I certainly found evidence as of 2002.
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`21 Q But in paragraph seven of Exhibit 2028
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`22 Q And you didn't present any other
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`22 Judson does not cite to any other document other
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`Page 11
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`Page 13
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`1 evidence between 1999 and 2002 that BTG was
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`1 than his own recollection as he is proclaiming his
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`2 actively trying to license the '213 Patent.
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`2 declaration. Right?
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`3 Correct?
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`3 A I don't see any references or footnotes
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`4 A I would have to see the Judson
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`4 to documents in paragraph seven.
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`5 declaration again.
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`6 Q Sure.
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`5 Q And so you are relying entirely on
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`6 Dr. Judson's statement in paragraph seven.
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`7 A I seem to recall that there wasn't a
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`7 Correct?
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`8 date stamp on his affidavit in terms of when they
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`8 A No.
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`9 were trying to relicense or license again the
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`9 MR. ZEGGER: Object to the form.
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`10 technology.
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`10 THE WITNESS: No, that's not correct.
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`11 MR. SWANSON: So I will hand you what
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`11 BY MR. SWANSON:
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`12 has already been marked as Exhibit 2028, which is
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`12 Q For any potential evidence before 2002
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`13 the Judson declaration. And I believe the
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`13 that BTG was actively trying to license the
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`14 paragraph you are looking for is paragraph seven.
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`14 '213 Patent you are relying solely on Dr. Judson's
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`15 You already have the first one. These
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`15 statement in his declaration, not any other
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`16 have already been marked. These have already been
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`16 external evidence. Correct?
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`17 marked. I will let you know if I need to mark
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`17 A I wouldn't agree with that
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`18 something else.
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`18 characterization.
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`19 (Whereupon, Exhibit No. 2028 previously
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`19 Q What's wrong with that characterization?
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`20 marked was introduced.)
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`20 A Well, I see that the Judson declaration
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`21 THE WITNESS: I see paragraph seven.
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`21 indicates that following 2000 efforts were
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`22 Oh, I'm sorry. I said I see paragraph seven.
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`22 undertaken. I observed efforts from the Wayback
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`Christopher A. Vellturo , Ph.D.
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`Page 14
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`April 5, 2017
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`Page 16
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`1 Machine in 2002. Consistent with that would be
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`1 2002.
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`2 that there would be efforts in 2001. Did I
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`2 Q And then if you can look at paragraph 31
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`3 explicitly find those? No. But given that as of
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`3 of your declaration you cite to two annual reports
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`4 late 1999 Boehringer Ingelheim had suspended its
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`4 from BTG. In the three statements that you quote
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`5 involvement, and that in 2002 there is active
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`5 in paragraph 31 of your declaration none of those
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`6 marketing of the license or the potential license,
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`6 statements refer to abiraterone acetate
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`7 and given Mr. Judson's statement that after 2000
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`7 specifically. Correct?
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`8 they were seeking licensees, all of that indicates
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`8 A Well, those three quotes, the phrase
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`9 to me that in 2001 it's highly likely they were
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`9 abiraterone acetate does not appear in those
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`10 also actively seeking licensees.
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`10 quotes, but I think if we go back and look at
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`11 Q So you state that in 1999 Boehringer
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`11 those pages I believe it's discussed.
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`12 suspended its involvement with abiraterone acetate
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`12 Q And the '213 Patent was licensed to
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`13 development. Right?
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`13 Cougar in April 2004. Correct?
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`14 A Well, if you read Mr. Judson's language
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`14 A That's my recollection, yes.
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`15 carefully it says that there was a report right at
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`15 Q And that was an exclusive license?
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`16 the end of 1999. And subsequently Boehringer
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`16 A I believe it had exclusivity in it under
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`17 Ingelheim decided not to continue. So that is
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`17 certain conditions. I would have to see the
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`18 either late 1999 or early 2000.
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`18 license again. But to some degree, yes, there was
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`19 Q And then you rely on Dr. Judson's
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`19 exclusivity associated --
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`20 statement that in the years following 2000 a
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`20 Q -- And you have seen the license?
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`21 number of major multinational pharmaceutical
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`21 A Yes, I believe I have.
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`22 companies were approached. Right?
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`22 Q Is there a reason you don't list the
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`Page 15
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`Page 17
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`1 A In part I rely on that statement, yes.
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`1 license on your list of materials considered in
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`2 Q And then you don't find any evidence
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`2 appendix 8 of your declaration?
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`3 that you cite of BTG trying to license the
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`3 A Well, I think, as you appreciate, this
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`4 '213 Patent until 2002. Correct?
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`4 is a fairly unusual set of circumstances. There
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`5 A Right. The -- the information that we
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`5 are actually four distinct cases in which I'm
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`6 located through the Wayback Machine was from 2002.
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`6 involved with respect to this patent and this
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`7 I don't remember whether we looked for 2001 or
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`7 product.
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`8 not. I just don't recall.
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`8 And have I seen the license? I believe
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`9 Q So the only documentary evidence that
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`9 so. Did I see it in conjunction with preparing
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`10 you cite -- the earliest -- I will start over.
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`10 this report? I may not have.
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`11 The earliest documentary evidence that
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`11 Q And the license is confidential.
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`12 you cite of BTG trying to actively license the
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`12 Correct?
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`13 '213 Patent following Boehringer's suspension of
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`13 A I don't recall. They usually are, but I
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`14 involvement with abiraterone acetate was in 2002.
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`14 don't have it memorized.
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`15 Correct?
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`15 MR. SWANSON: I'm going to mark a
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`16 A In your definition of documentary
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`16 document as Exhibit 1088. It's a -- sorry. I'll
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`17 evidence you are excluding Mr. Judson's affidavit?
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`17 let you mark it.
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`18 Q Correct.
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`18 (Whereupon, Exhibit No. 1088 was marked
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`19 A All right. The first documents that I
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`19 for identification.)
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`20 cite other than the Judson declaration with
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`20 BY MR. SWANSON:
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`21 respect to activity associated with BTG's
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`21 Q And Exhibit 1088 is a printout from
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`22 licensing efforts from this time period is from
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`22 BTG's website and specifically it's a press
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`Christopher A. Vellturo , Ph.D.
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`Page 18
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`April 5, 2017
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`Page 20
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`1 release titled: BTG licenses new prostrate cancer
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`1 Q So after April 2004 BTG was prohibited
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`2 drug to Cougar Biotechnology.
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`2 from giving rights to third parties who could
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`3 Do you see that?
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`4 A I see that title, yes.
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`3 contribute to the technology's development.
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`4 Right?
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`5 Q And the date is April 20, 2004?
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`5 A I think that's an overstatement. So I
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`6 A That's the date listed, yes.
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`6 don't agree with that statement.
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`7 Q And in the first paragraph, the second
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`7 Q Well, BTG would have been required to
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`8 to the third line this document states: Cougar
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`8 refuse to make rights to the '213 Patent available
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`9 Biotechnology today announced that they have
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`9 to others. Right?
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`10 signed a license agreement in which Cougar is
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`10 MR. ZEGGER: Object to the form.
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`11 granted worldwide exclusive rights to develop and
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`11 THE WITNESS: Well, I don't have the
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`12 commercialize abiraterone acetate.
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`12 license in front of me, but there are commonly
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`13 Do you see that?
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`13 terms even in exclusive licenses under which the
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`14 A I see that language, yes.
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`14 license can be terminated by either side,
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`15 Q And so this license between BTG and
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`15 subsequently which would mean it would become
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`16 Cougar in April 2004 was a worldwide exclusive
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`16 available again. And then usually, though not
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`17 license. Correct?
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`17 always, there are terms that additional licenses
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`18 A I believe under certain conditions it
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`18 can be granted as long as both parties agree.
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`19 was, yes.
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`19 BY MR. SWANSON:
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`20 Q It was exclusive to the public. Right?
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`20 Q And in this proceeding in your
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`21 A I don't know what that means.
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`21 declaration you don't present any evidence that
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`22 Q In other words, another company could
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`22 BTG was actively licensing the '213 Patent after
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`Page 19
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`Page 21
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`1 not license the abiraterone acetate technology
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`1 this agreement with Cougar in April 2004. Right?
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`2 from BTG besides Cougar?
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`2 A That's correct.
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`3 MR. ZEGGER: Object to the form.
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`3 Q And so according to your evidence BTG --
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`4 THE WITNESS: As I said -- well, as I
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`4 strike that.
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`5 recall there were exclusivity aspects to the
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`5 So in fact in the two full years
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`6 agreement while the agreement was in force.
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`6 immediately preceding the priority date for the
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`7 Whether those were unconditional or not I can't
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`7 '438 Patent, the patent at issue here, the
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`8 remember specifically. But there certainly were
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`8 blocking patents were in place. Correct?
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`9 elements of exclusivity.
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`10 BY MR. SWANSON:
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`9 MR. ZEGGER: Object to the form.
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`10 THE WITNESS: I'm sorry. Blocking
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`11 Q And BTG tells the public in 2004 that
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`11 patents plural?
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`12 this license between BTG and Cougar is an
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`12 BY MR. SWANSON:
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`13 exclusive license. Correct?
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`13 Q The -- the '213 Patent. The '213
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`14 A Yeah, I see that in the press release.
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`14 blocking patent was in place for two full years
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`15 I see that language.
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`15 immediately preceding the priority date for the
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`16 Q And so at least as of April 20, 2004 BTG
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`16 '438 Patent?
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`17 was no longer telling the public that it was
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`17 (Court reporter requested
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`18 actively licensing the abiraterone acetate
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`18 clarification.)
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`19 technology. Right?
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`19 BY MR. SWANSON:
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`20 A On a going forward basis it would not
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`20 Q Preceding the priority date for the '438
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`21 subsequently be marketing additional licenses for
`21 Patent. I apologize. I'll slow down.
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`22 abiraterone acetate.
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`22 A My understanding is that as a result of
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`Christopher A. Vellturo , Ph.D.
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`Page 22
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`April 5, 2017
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`1 the license between BTG and Cougar after April
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`1 Q And so to the public, in other words
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`2 2004 Cougar had the exclusive rights to practice
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`2 anyone besides Cougar, they would not have thought
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`3 the '213 Patent in the United States. That's my
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`3 that they could gain a license to the '213 Patent.
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`4 understanding.
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`4 Right?
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`5 Q So BTG used its patent rights as of
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`5 MR. ZEGGER: Object to the form.
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`6 April 2004 and through the priority date to block
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`6 THE WITNESS: See, I would not agree
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`7 the incentives relevant to the commercial success
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`7 with that characterization. One could always
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`8 inquiry. Right?
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`8 obtain the license by acquiring Cougar, for
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`9 MR. ZEGGER: Object to the form.
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`9 example. And those options are out there. In
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`10 THE WITNESS: I don't know what the
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`10 fact Janssen did just that by acquiring Cougar.
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`11 question means.
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`12 BY MR. SWANSON:
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`11 But that was later. But those are always options.
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`12 I just don't remember the transferability aspects
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`13 Q Well, you used those words in paragraph
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`13 of this license with respect to acquisitions of
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`14 33 of your declaration at the very end of that
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`14 the licensee.
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`15 paragraph. You can take a look at that. You say:
`15 BY MR. SWANSON:
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`16 For significant periods of time immediately
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`16 Q Well, the commercial success inquiry is
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`17 preceding the priority date for the '438 Patent
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`17 based on the premise that a company would know
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`18 the incentives relevant to the commercial success
`18 that it could gain access to developing a drug and
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`19 inquiry were broadly available.
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`19 then would make money off of that. Correct?
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`20 Do you see that?
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`20 That's the economic underpinning of it?
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`21 A I see that language. Your question had
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`21 A That's not how -- I'm not a lawyer,
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`22 the word blocking in it. I don't see blocking
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`22 obviously. That's not quite how I think about the
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`Page 23
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`Page 25
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`1 anywhere in my statement at the end of paragraph
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`1 commercial success exercise.
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`2 33.
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`2 Q Well, you are an economist. Right?
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`3 Q So after 2004 and through the priority
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`3 A Yes, I am.
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`4 date the '213 Patent blocked the incentives
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`4 Q And so how would you think of it as an
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`5 relevant to the commercial success inquiry.
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`5 economist?
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`6 Correct?
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`6 MR. ZEGGER: Object to the form.
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`7 MR. ZEGGER: Object to the form.
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`7 THE WITNESS: Well, commercial success
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`8 THE WITNESS: Again, that question I
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`8 can have a bunch of meanings in a colloquial
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`9 don't understand. With respect to the commercial
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`9 economic sense. And as I said I'm not an
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`10 success inquiry I don't know what you mean by
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`10 attorney, but I have done a number of these cases.
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`11 that. With respect to blocking even if one
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`11 I have an understanding in the context of these
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`12 accepts that argument it can conceivably effect
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`12 cases what commercial success is meant to capture.
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`13 incentives, but it certainly doesn't block or
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`13 So I'm not sure which of those you're asking me.
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`14 negate those incentives. So your question is just
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`14 BY MR. SWANSON:
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`15 mixing a lot of different concepts and that's why
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`15 Q Sure. I'm asking you in this legal
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`16 I can't answer it.
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`17 BY MR. SWANSON:
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`16 context what is your understanding of what the
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`17 commercial success inquiry is trying to capture?
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`18 Q Well, BTG as of -- as of April 2004 was
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`18 A The commercial success inquiry at its
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`19 no longer actively shopping the '213 Patent.
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`19 heart is trying to ascertain or test a
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`20 Correct?
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`20 proposition. And that proposition is, was there a
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`21 A Right. It had found a licensee and was
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`21 demand curve of sufficient magnitude associated
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`22 not seeking licensees. That's my understanding.
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`22 with solving a problem such that entities from the
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`1 time where this invention was discovered would
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`1 Q And if you can look at paragraph 34 of
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`2 have had incentives to search for a solution.
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`2 your declaration on page 17 toward the bottom of
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`3 That is my general understanding.
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`3 the page you say: Thus, presently there was no
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`4 Q And you also understand that if there is
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`4 incentive on the part of the purported blocking
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`5 a blocking patent the incentives to search for the
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`5 patent owner to withhold rights from third parties
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`6 solution are dampened because the broader public
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`6 who could contribute to the technology's
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`7 cannot gain access to the necessary intellectual
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`7 development.
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`8 property to develop the drug?
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`8 Do you see that?
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`9 A I understand that is a proposition that
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`9 A I see that language.
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`10 is put forward in cases where there's multiple
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`10 Q And that sentence is also referring to
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`11 intellectual property associated with a product.
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`11 before April 2004. Correct?
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`12 In my opinion if it dampens those incentives it
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`12 A That's the time period I'm discussing in
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`13 dampens them mildly, if at all. There are just
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`13 these paragraphs.
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`14 too many examples of people developing inventions
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`14 Q And so to be clear these paragraphs
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`15 that are associated with existing intellectual
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`15 refers to paragraphs 33 and 34. Right?
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`16 property where they didn't have the rights to that
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`16 MR. ZEGGER: Object to the form.
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`17 other property. It happens all of the time.
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`17 THE WITNESS: I'd say that's right.
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`18 Q So after 2004 when BTG licensed the
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`18 BY MR. SWANSON:
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`19 '213 Patent at Cougar exclusively the incentives
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`19 Q Is a blockbuster drug a marketplace
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`20 relevant to the commercial success inquiry were no
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`20 success even if it loses money?
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`21 longer broadly available?
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`22 (Court reporter requested
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`21 A How are you using blockbuster?
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`22 Q How do you understand the term
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`Page 27
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`Page 29
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`1 clarification.)
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`2 BY MR. SWANSON:
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`1 blockbuster drug?
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`2 A Well, I've actually seen it used two
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`3 Q I'm sorry. I'm going to fast.
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`3 different ways in the industry. Sometimes it
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`4 So after 2004 when BTG licensed the
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`4 refers to annual sales of a billion dollars
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`5 '213 Patent to Cougar incentives relevant to the
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`5 worldwide. Sometimes it refers to annual sales of
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`6 commercial success inquiry were no longer broadly
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`6 a billion dollars just in the U S. Sometimes it's
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`7 available. Correct?
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`7 used both ways.
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`8 A I'm not sure what broadly means in your
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`8 Q Which way are you using it when you use
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`9 question. There was an exclusive license that was
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`9 it in your declaration?
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`10 signed as of that date.
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`10 A Well, here you can use it either way
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`11 Q Well, you used the term broadly
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`11 since Zytiga was a blockbuster under both
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`12 available in your declaration in paragraph 33. Do
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`12 definitions.
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`13 you understand what it means when you use it
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`13 Q Okay. So under either definition is a
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`14 there?
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`14 blockbuster drug a marketplace success even if it
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`15 A Well, there I'm referring to the time
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`15 loses money?
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`16 period when the rights to the '213 Patent were
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`16 A As a global statement I'm not sure I
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`17 being actively shopped.
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`17 would agree with that in absolutely all
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`18 Q So you are not referring to the time
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`18 circumstances, but more than likely, yes.
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`19 period after 2004. Right?
`
`19 Blockbuster drugs are typically drugs where the
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`20 A In that sentence, that's correct. I'm
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`20 company who has developed them and brought them to
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`21 not referring to the time period after 2004. And
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`21 market are glad they did from an economic
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`22 just to be clear -- well, after 2004 is fine, yes.
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`22 standpoint.
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`1 Q Even if they've lost money as a result
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`1 margin perspective is very hard to understand.
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`2 of bringing that drug to market?
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`2 Q Well, you never even looked at it, at
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`3 A It's very difficult to imagine a
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`3 whether Zytiga made profits for Janssen in your
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`4 situation where you have a blockbuster drug where
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`4 declaration, did you?
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`5 it would not be earning money in any realistic
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`5 A That was not necessary to understand the
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`6 economic sense.
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`6 nature of the demand curve. That doesn't factor
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`7 Q Well, I'm asking you to assume. And I
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`7 into demand curve assessment profitability.
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`8 can make the question a little bit more specific.
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`8 That's not part of assessing the demand curve.
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`9 A Then you're going to need to make it
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`9 Q So you don't think profitability is
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`10 more specific --
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`11 Q Exactly --
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`10 relevant to the commercial success inquiry?
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`11 A That's my understanding. I'm not a
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`12 A -- because you are taking incentives
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`12 lawyer, but I have done 40, 50 of these kinds of
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`13 that are very difficult to reconcile as an
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`13 cases and profitability in my experience is not
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`14 economist.
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`15 Q Sure.
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`14 one of the factors identified as -- as relevant to
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`15 the commercial success inquiry.
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`16 A So why don't you do that.
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`16 Q Janssen was required via its license
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`17 Q So assume Janssen has negative profits
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`17 with BTG to put Zytiga on the market. Is that
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`18 on Zytiga in the time period that you are
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`18 right?
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`19 analyzing in your declaration. In that scenario
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`19 A I don't recall the license literally
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`20 is Zytiga still a marketplace success?
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`20 requiring that.
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`21 A How are you defining negative profits?
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`21 Q You don't know, or?
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`22 Q They have lost more -- they have lost
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`22 A I don't have the license memorized.
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`Page 31
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`Page 33
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`1 money on Zytiga. In other words their expenditures
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`1 That's -- that would surprise me. That's fairly
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`2 on Zytiga are greater than their revenues.
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`2 restrictive language. But I don't have it
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`3 A I can't reconcile that with the fact
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`3 memorized as I sit here.
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`4 that they continue to actively promote and sell
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`4 Q So it's possible that the license
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`5 the product. So I'm not sure how to answer your
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`5 requires that Janssen develop Zytiga and keep it
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`6 question with the fact that I observe economic
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`6 on the market. Correct?
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`7 outcomes that are inconsistent with your
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`7 A I mean, is it possible? I guess
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`8 hypothetical. It's hard as an economist to answer
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`8 conceivably that's possible. I would find that
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`9 a hypothetical where your conditions are in -- are
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`9 highly unlikely. But I don't have the license
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`10 inconsistent with other market facts. That's the
`
`10 memorized.
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`11 problem.
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`11 Q Post FDA approval of Zytiga do you think
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`12 Q So no company will ever have a product
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`12 the license may require -- do you think it's
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`13 on the market that's losing money?
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`13 possible that the license would require Janssen
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`14 A Are you talking pharmaceuticals now or
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`14 putting Zytiga on the market?
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`15 generally?
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`15 A As I -- as I just testified I'd find
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`16 Q Let's go with pharmaceuticals for now?
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`16 that extremely unlikely, but I can't say it's
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`17 A Pharmaceuticals are somewhat unique in
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`17 literally impossible.
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`18 that they have very high -- well, let me be more
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`18 Q You didn't look at it. Right?
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`19 precise. Small molecule pharmaceuticals are very
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`19 MR. ZEGGER: Object to the form.
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`20 unique in that they have very high gross profit
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`20 THE WITNESS: In the context of this
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`21 margins. And so the idea that in a given year
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`21 declaration I didn't rely upon the license.
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`22 they would actually be losing money on a gross
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`22
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`Christopher A. Vellturo , Ph.D.
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`1 BY MR. SWANSON:
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`1 Q But you didn't disclose that in your
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`2 Q So you didn't rely upon the license for
`
`2 declaration. Right?
`
`3 anything in the context of this declaration,
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`3 A As I said I don't recall whether it
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`4 right?
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`4 specifically appears in here or not. But given
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`5 MR. ZEGGER: Object to the form.
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`5 the propositions I was testing finding that there
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`6 THE WITNESS: Let's be clear. I rely on
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`6 was adequate access to the intellectual property
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`7 the existence of the license, I consider the
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`7 regardless of whether it was exclusive or not
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`8 existence of the license. But in terms of relying
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`8 establishes a fortiori that it would have been
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`9 on the sheets of paper that are the license, that
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`9 even more widely available if it had not been
`
`
`
`10 was not something I relied upon in preparing this10 exclusive. So it was a limiting case.
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`11 declaration.
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`12 BY MR. SWANSON:
`
`11 Q And you testified earlier that you in
`
`12 your materials considered never disclosed your
`
`13 Q Did you deem the terms of the license
`
`13 reliance on the license. Correct?
`
`
`
`14 irrelevant to the commercial success analysis that14 A Well again, in my materials considered I
`
`15 you performed in your declaration?
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`15 don't identify the license itself. I was aware of
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`16 A There were certain terms that were
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`16 and discussed the license. But I don't rely
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`17 relevant and I did take those into consideration
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`17 specifically on the sheets of paper that are the
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`18 in this declaration.
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`18 license in this declaration.
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`19 (Discussion between counsel and court
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`19 Q Or for example, you don't