`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________
`
`WOCKHARDT BIO AG,
`Petitioner
`v.
`JANSSEN ONCOLOGY, INC.,
`Patent Owner
`____________________________
`
`Case IPR: 2016-01582
`U.S. Patent No. 8,822,438
`____________________________
`
`
`
`
`REPLY DECLARATION OF ROBERT D. STONER, Ph.D.
`
`WCK1122
`Wockhardt Bio AG v. Janssen Oncology, Inc.
`IPR2016-01582
`
`
`
`
`
`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`I, Robert D. Stoner, Ph.D., declare as follows:
`
`I.
`
`Introduction
`A. Qualifications
`1. My background and qualifications are generally described in Section
`
`I.A. of my initial declaration submitted in the proceeding on August 10, 2016
`
`(“initial declaration”) (WCK1077.) I incorporate those qualifications by reference
`
`here. I have also provided an updated curriculum vitae with this declaration
`
`(WCK1098), which contains more details on my background, experience,
`
`publications, and prior testimony.
`
`B.
`2.
`
`Scope of Work
`
`I have been retained on behalf of Wockhardt Bio AG (“Wockhardt” or
`
`“Petitioner”) in connection with the above-captioned inter partes review (“IPR”). I
`
`am being compensated at a rate of $595 per hour for my work. My compensation is
`
`not dependent on the substance of my testimony or the outcome of this matter.
`
`3.
`
`For this declaration, I was asked to review and discuss the declaration
`
`of Dr. Christopher Vellturo in Support of Patent Owner Response (“Vellturo
`
`Declaration”) (JSN2115) relating to the alleged commercial success of Zytiga®
`
`(abiraterone acetate) and U.S. Patent No. 8,822,438 (“the ’438 patent”)
`
`(WCK1001). This declaration is a statement of my opinions in this matter and the
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`basis and reasons for those opinions. In forming the opinions expressed in this
`
`declaration, I have relied upon my education, experience, and knowledge of the
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`
`
`2
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`subject matter discussed. For this declaration, I have also reviewed, considered, or
`
`relied upon documents and other materials which are cited herein as well as in the
`
`table below1:
`
`Wockhardt/Janssen
`Exhibit #
`
`Description
`
`WCK1001
`
`WCK1002
`
`WCK1030
`
`WCK1034
`
`WCK1063
`
`WCK1077
`
`WCK1087
`
`WCK1088
`
`WCK1099
`
`Auerbauch, A. H. & Belldegrum, A. S., U.S. Patent No.
`8,822,438 (filed Feb. 24, 2011; issued Sep. 2, 2014) ("the
`'438 patent")
`
`Declaration of Paul A. Godley, MD, Ph.D., MPP
`Barrie, S. E. et al, U.S. Patent No. 5,604,213 (filed Sep. 30,
`1994; issued Feb. 18, 1997)
`Taxotere Prescribing Information (2004),
`http://www.accessdata.fda.gov/drugsatfda_docs/label/2004/
`020449s028lbl.pdf (last accessed 8/8/2016)
`Jevtana Website, Dosing and Administration,
`http://www.jevtana.com/hcp/dosing/default.aspx (accessed
`Aug. 8, 2016)
`Declaration of Robert D. Stoner, Ph.D.
`"BTG Licenses New Prostate Cancer Drug to Cougar
`Biotechnology," April 20, 2004, 2 pages (last accessed on
`April 3, 2017)
`Deposition Transcript of Ian Judson, M.D., Friday, April 7,
`2017
`Deposition Transcript of Christopher A. Vellturo, Ph.D.,
`Wednesday, April 5, 2017
`
`
`1 This table includes materials considered in my initial declaration only if they are
`specifically cited in my reply declaration.
`
`
`
`3
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`
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`
`Wockhardt/Janssen
`Exhibit #
`
`Description
`
`WCK1100
`
`WCK1101
`
`WCK1102
`
`WCK1104
`WCK1107
`
`WCK1108
`
`WCK1109
`
`WCK1110
`
`WCK1111
`
`WCK1112
`
`Cancer Research UK, "Our milestones: the birth of a new
`prostate cancer drug," September 21, 2015 (last accessed
`April 17, 2017)
`Mohler, J.L., et al., "The Androgen Axis in Recurrent
`Prostate Cancer," Clin Can Res 10:440-447 (2004)
`The Institute of Cancer Research, "Abiraterone: a story of
`scientific innovation and commercial partnership," May 11,
`2014 (last accessed April 17, 2017)
`Second Declaration of Paul A. Godley, MD, Ph.D., MPP
`Mestre-Ferrandiz, J., et al., “The R&D Cost of a New
`Medicine,” Office of Health Economics, London UK, 1–86
`(2012)
`DiMasi, J.A., et al., "Innovation in the pharmaceutical
`industry: New estimates of R&D costs," Journal of Health
`Economics 47: 20–33 (2016)
`NCT0205010, Phase II Clinical Trial of Abiraterone Acetate
`Without Exogenous Glucocorticoids in Men with
`Castration-resistant Prostate Cancer with Correlative
`Assessment of Hormone Intermediates, Clinicaltrials.gov
`Zytiga® Approved in the EU for Use in the Treatment of
`Metastatic Castration-Resistant Prostate Cancer Before
`Chemotherapy, https://www.jnj.com/media-center/press-
`releases/zytiga-approved-in-the-eu-for-use-in-the-treatment-
`of-metastatic-castration-resistant-prostate-cancer-before-
`chemotherapy (last accessed 4/18/17)
`Dizdar, O., “Is Dexamethasone a Better Partner for
`Abiraterone than Prednisolone?,” The Oncologist 20: e13
`(2015)
`EMA – Zytiga Product Information,
`http://www.ema.europa.eu/docs/en_GB/document_library/E
`PAR_Product_Information/human/002321/WC500112858.p
`df (last accessed 4/18/17)
`
`
`
`4
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`
`Description
`
`Storlie, J.A,. et al., “Prostate Specific Antigen Levels and
`Clinical Response to Low Dose Dexamethasone for
`Hormone=Refractory Metastatic Prostate Carcinoma,”
`Cancer 76:96–100 (1995)
`David, Jesse and Stewart (2005), “Commercial Success:
`Economic Principles Applied to Patent Litigation,” in
`Gregory K. Leonard and Lauren J. Stiroh, ed., Economic
`Approaches to Intellectual Property Policy, Litigation, and
`Management, White Plains, NY: National Economic
`Research Associates, Inc.
`Auerbauch, A. H. & Belldegrum, A. S., U.S. Pat. Appl.
`Publ. No. 2015/0005268 (filed September 12,2014; issued
`January 1, 2015)
`Deposition Transcript of Christopher A. Vellturo, Ph.D.,
`Tuesday, December 20, 2016 (IPR2016-00286)
`Declaration of Professor Ian Judson, M.D.
`Declaration of Matthew Rettig, M.D.
`Declaration of Christopher A. Vellturo, Ph.D.
`
`Zytiga Usage – prednisone information
`Hotte and Saad, "Current Management of castrate-resistant
`prostate cancer," Current Oncology, 17(2):S72-S79 (2010)
`Zytiga Market Share data
`Truven Commercial and Medicare data
`Deposition Transcript of Robert D. Stoner, taken by Patent
`Owner on February 10, 2017
`Deposition Transcript of Paul A. Godley, taken by Patent
`Owner on March 7, 2017
`All Exhibits listed in Appendix A to the Declaration of
`Christopher A. Vellturo, Ph.D. in Support of Patent Owner
`Response
`
`
`
`
`
`Wockhardt/Janssen
`Exhibit #
`
`WCK1113
`
`WCK1114
`
`WCK1117
`
`WCK1120
`
`JSN2028
`JSN2038
`JSN2115
`
`
`JSN2095
`JSN2109
`
`JSN2134
`JSN2135
`JSN2160
`
`JSN2162
`
`
`
`
`
`
`
`5
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`This declaration summarizes only my current opinions, which are
`
`4.
`
`subject to change depending upon additional information and/or analysis. The
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`entirety of my declaration, including attachments and referenced materials,
`
`supplies the basis for my analysis and conclusions. The organizational structure of
`
`the declaration is for convenience. To the extent that facts, economic analysis, and
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`other considerations overlap, I generally discuss such issues only once for the sake
`
`of brevity. Neither the specific order in which each issue is addressed nor the
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`organization of my declaration or attachments affects the ultimate outcome of my
`
`analysis.
`
`II. Analysis of the Vellturo Declaration
`A. Overview
`Commercial success is a secondary consideration that a patent owner
`5.
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`may use to argue that its patent is not obvious based on the alleged commercial
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`success of an invention embodying that patent. I understand that commercial
`
`success is relevant to the determination of a patent’s obviousness since the law
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`presumes that an idea would have been brought to market sooner in response to
`
`market forces had it been obvious to persons skilled in the art.
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`6.
`
`I understand that to show that commercial success demonstrates non-
`
`obviousness, the patent owner must establish that: (1) a product embodying the
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`patented invention is commercially successful (i.e., it achieved marketplace
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`
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`6
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`success); and (2) that the marketplace success was driven by the advantages of the
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`claimed invention (i.e., there must be proof of a causal nexus). I further understand
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`that to establish a proper nexus between a claimed invention and the commercial
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`success of a product, a patent owner must offer proof that the sales were a direct
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`result of the unique characteristics of the claimed invention, and not a result of
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`economic and commercial factors unrelated to the quality of the patented subject
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`matter. Finally, I understand that if commercial success is due to an element in the
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`prior art, no nexus exists.
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`7.
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`In my opinion, the Vellturo Declaration has a number of shortcomings
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`and does not establish that Zytiga® in combination with prednisone has been a
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`commercial success, nor that there is a strong connection or nexus to the alleged
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`innovations of the ’438 patent. Importantly, it is my opinion that Dr. Vellturo
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`applies an incorrect analysis in his theory of nexus since he testified that various
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`unclaimed features relative to the ’438 patent improved anti-tumor effects and
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`hence were key drivers of sales, and that he had not attempted to apportion the
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`degree of Zytiga® demand that was attributable to such unclaimed features.
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`(WCK1099 at 70:14-72:3; 134:7-144:18) (stating, for example “I wouldn’t say that
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`the benefits of having access to an oral form of abiraterone acetate here are
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`dependent on the patented claims.”)
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`7
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
` In addition, Dr. Vellturo’s claim that there was a
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`widespread incentive to develop the claimed invention in the period immediately
`
`preceding the priority date of the ’438 patent is misleading and incompletely
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`evidenced, ignoring the role of the ’213 patent, the prior art, as well as the
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`scientific consensus at the time. Finally, Dr. Vellturo does not consider
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`profitability/return on investment to be relevant in evaluating commercial success,
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`a curious position for an economist. (WCK1099 at 121:1-121:10; 30:17-32:15.)
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`8.
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`In addition, none of the opinions or evidence I have reviewed from the
`
`Vellturo Declaration or Dr. Vellturo’s deposition transcript has caused me to
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`change my primary opinions from my initial declaration. These opinions are
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`discussed in more detail below.
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`
`
`B.
`
`9.
`
`The Vellturo Declaration does not demonstrate that Zytiga® is a
`commercial success
`
`The Vellturo Declaration concludes that Zytiga® in combination with
`
`prednisone is a commercial success based on: (1) a tabulation of abiraterone sales
`
`and calculation of growth without any comparison to prior forecasts of Zytiga®
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`sales; (2) a calculation of market share without defining a relevant market; and (3)
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`a mere statement that Zytiga® is a top 50 drug product without providing other
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`appropriate detail or analysis. (JSN2115, ¶ 61.) However, Dr. Vellturo’s analysis is
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`insufficient to establish the commercial success of the abiraterone-prednisone
`
`combination which is the subject of the ’438 patent claims. Specifically, it has
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`8
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`several shortcomings and fails to show one way or the other whether Zytiga® in
`
`combination with prednisone has been commercially successful.
`
`10.
`
`In general, a commercial success analysis can provide evidence of a
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`product’s absolute success (i.e., its sales and profitability) or its relative success
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`(i.e., its market performance relative to its peers). On both accounts, for the reasons
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`described herein, Dr. Vellturo has failed to meet Patent Owner’s burden to prove
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`Zytiga®’s alleged commercial success.
`
`11. First, at its core, the Vellturo Declaration fails to provide sufficient
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`context for determining whether abiraterone sales and sales growth are actually
`
`substantial relative to the industry or to other potential benchmarks used for
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`evaluating commercial success. Most notably, the Vellturo Declaration provides no
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`benchmarks for success, such as profitability, rate of return on investment, or a
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`comparison with the upfront costs associated with bringing Zytiga® to market (see
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`§ II.C., below). Profitability/rate of return provides a standardized measure of a
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`product’s degree of success, and would be the typical measure an economist would
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`look to in order to measure success or to determine incentives to invest. Unlike a
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`measure such as market share, profitability is not dependent on precisely where
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`one draws the line in terms of products with which Zytiga® purportedly
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`“competes.” Dr. Vellturo chooses to evaluate Zytiga®’s share relative to other
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`mCRPC drugs, without analyzing its overall performance compared to prior
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`
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`9
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`forecasts or profit objectives. Similarly, the Vellturo Declaration notes Zytiga®’s
`
`position among the top 50 drug products in terms of annual sales, but provides no
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`analysis of Zytiga®’s projected lifetime sales and whether those are sufficient to
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`yield a rate of return commensurate with a commercially successful drug product.2
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`(JSN2115, ¶ 61.) In sum, because Dr. Vellturo has not provided a standardized
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`measure of Zytiga®’s success such as profitability/rate of return, and provides only
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`market share and sales data that are arbitrary and incomplete (as discussed below),
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`he has not adequately demonstrated or proven Zytiga®’s alleged commercial
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`success.
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`12. Second, the Vellturo Declaration arbitrarily presents Zytiga® market
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`shares within a mCRPC universe (JSN2115, ¶¶ 56-58), without providing
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`justification for this market universe as a relevant “market” for commercial success
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`analysis beyond the fact that Janssen uses it. (JSN2115, ¶ 56) In addition, the
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`exhibit Dr. Vellturo relies on to show Zytiga®’s alleged substantial share of sales
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`2 Of course, there is the further issue of whether this level of sales is attributable to
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`the patent claims at issue (i.e., the combination of abiraterone acetate and
`
`prednisone) as opposed to other factors, such as the individual anti-cancer effect of
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`abiraterone, the individual anti-cancer effect of prednisone, the effect of
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`prednisone in alleviating side effects, or the oral tablet form of the drug. These
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`issues are discussed in the nexus section below.
`
`
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`10
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`within the mCRPC treatment market, prepared by Janssen, is a patient—not
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`volume—share document (JSN2134), which Dr. Vellturo admitted may not be an
`
`accurate reflection of all relevant drugs as: (i) it is dependent on physicians
`
`reporting the proper indication codes and prescribing Zytiga® for a particular
`
`symptom; and (ii) he does not know how Janssen decided which drugs to
`
`incorporate. (WCK1099 at 108:11-116:16). Finally, the Vellturo Declaration fails
`
`to consider the prostate treatment market more broadly, where Zytiga® represents
`
`a share of only 3% to 6%. (WCK1077, ¶ 69.) Because Dr. Vellturo has not defined
`
`a relevant market (simply accepting Janssen’s market share compilation without
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`further analysis) and because his evidence of market share is otherwise flawed, he
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`again has not adequately demonstrated or proven Zytiga®’s alleged commercial
`
`success.
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`13. Third, while Dr. Vellturo notes that Zytiga® is a top 50 drug product,
`
`Dr. Vellturo fails to evaluate a number of other relevant factors that put into proper
`
`context Zytiga®’s sales. For example, as discussed in my initial declaration,
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`Zytiga® has been losing market share due to competition from Xtandi®. Evidence
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`indicates that Xtandi® earns premium pricing relative to Zytiga®, and analyst
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`coverage of the prostate cancer market place demonstrates a market perception that
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`Xtandi® is superior to Zytiga® and will likely become the premier treatment (if it
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`11
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`has not already done so). (WCK1077, ¶¶ 54-58) In light of these market
`
`conditions, Zytiga®’s sales are not as impressive as Dr. Vellturo suggests.
`
`14. Fourth, Dr. Vellturo misunderstands why I presented the comparison
`
`of Zytiga® to Xtandi® and discussed Zytiga®’s loss of market share. While many
`
`prostate cancer drugs like Zytiga® must be taken with a steroid, this is a
`
`disadvantage relative to drugs like Xtandi® that are similarly efficacious but do
`
`not need to be accompanied by steroids. Thus, it is my opinion that the need for
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`prednisone (which is not indicated with Xtandi®) is a downside of Zytiga®,
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`making it less commercially successful than it otherwise would have been.
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`The Vellturo Declaration does not evaluate profits or costs
`
`1.
`15. A fundamental consideration of commercial success is whether the
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`sales and profits are large enough that the market would have brought a product or
`
`products to market sooner if the claimed subject matter were obvious. Consistent
`
`with this consideration, an evaluation of commercial success should involve an
`
`assessment of profits in relation to costs of bringing a product to market, over the
`
`entire product life. The Vellturo Declaration tabulates and analyzes Zytiga® sales
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`(JSN2115, ¶¶ 8-9, 44, 51, 54-61, Appendices B and E-3) but provides no
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`information or analysis by which to evaluate profits or costs. An evaluation of
`
`sales alone does not demonstrate commercial success (i.e., that there were
`
`incentives to bring a product to market), since firms seek to maximize profits, not
`
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`12
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`sales, i.e., firms need to recoup their costs (both up-front and operating), including
`
`some profit, in order to have an economic incentive bring a product to market.3 As
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`such, Dr. Vellturo fails to demonstrate “commercial success” as an economist
`
`would evaluate commercial success.
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`16. A fundamental economic question in the pharmaceutical industry (and
`
`more generally) involves evaluating the expected costs of commercialization and
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`FDA approval (i.e., upfront costs) in relation to potential revenues and operating
`
`costs, occurring with uncertainty and many years into the future.4 Published
`
`
`3 See, e.g., standard industrial organization text books, such as WCK1075, F.M.
`Scherer and David Ross, Industrial Market Structure and Economic Performance
`(1990), p. 622. (“To warrant making such investments [in inventions, such as the
`development of new products], an individual inventor or corporation must expect
`that once commercialization occurs, product prices can be held above post
`invention production and marketing costs long enough so that the discounted
`present value of the profits. . . will exceed the value of the front-end investment.”)
`4 WCK1107, Mestre-Ferrandiz, Jorge, Sussex, and Towse (2012), “The R&D Cost
`of a New Medicine,” Office of Health Economics, London UK, 1–86; WCK1108,
`DiMasi Grabowski, et. al. (2016), "Innovation in the pharmaceutical industry: New
`estimates of R&D costs," Journal of Health Economics 47: 20–33; WCK1114,
`David, Jesse and Stewart (2005), “Commercial Success: Economic Principles
`Applied to Patent Litigation,” in Gregory K. Leonard and Lauren J. Stiroh, ed.,
`Economic Approaches to Intellectual Property Policy, Litigation, and
`Management, White Plains, NY: National Economic Research Associates, Inc., at
`
`
`
`13
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`research shows that the total cost of commercialization and FDA approval are
`
`substantial, and must account for out-of-pocket costs, opportunity cost, and
`
`uncertainty of failed research and development, which are common and expected
`
`in the pharmaceutical industry.5
`
`17. The Vellturo Declaration fails to consider profits of any sort, not only
`
`economic profits more generally but even accounting profits earned over time by
`
`Zytiga® (e.g., no evaluation of Zytiga®’s cost of sales or any other expenditure
`
`aside from marketing costs). (WCK1099 at 38:4-20). Additionally, Dr. Vellturo
`
`fails to mention anything about either the amount of royalties, or the milestone
`
`payments (based on a certain amount of sales), owed under contractual obligations
`
`paid by Janssen to the assignee(s) of the ’213 patent, e.g. BTG, both of which are
`
`directly related to the financial success of Zytiga®. (WCK1099 at 119:8-120:3).
`
`
`196 (“commercial success could in principle be defined by a single criterion: Does
`the patented invention earn a positive net return (risk-adjusted) on invested capital
`after accounting for all relevant costs associated with developing and
`commercializing the patent as well as any alternatives available to the patent
`holder?”).
`5 WCK1107, Mestre-Ferrandiz, Jorge, Sussex, and Towse (2012), “The R&D Cost
`of a New Medicine,” Office of Health Economics, London UK, 1–86 at 5;
`WCK1108, DiMasi Grabowski, et. al. (2016), "Innovation in the pharmaceutical
`industry: New estimates of R&D costs," Journal of Health Economics 47:20–33, at
`20, 28.
`
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`14
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`Rather, he focuses mainly on net sales and reported revenues (as well as market
`
`shares). This is a significant shortcoming of his analysis. And, when questioned
`
`about profit and loss at his deposition, Dr. Vellturo admitted that he did not believe
`
`it is a “factor[] identified as … relevant to the commercial success inquiry,” nor
`
`“necessary to understand the nature of the demand curve,” and stated his belief
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`(albeit incorrect6) that “profitability … [is] not part of assessing the demand
`
`curve.” (WCK1099 at 32:2-32:15; see also 119:8-121:10 (admitting that he only
`
`looked at marketing expenses to assess their role in Zytiga®’s marketplace
`
`success). Therefore, he fails to demonstrate commercial success in an
`
`economically justified manner.
`
`Dr. Vellturo’s analysis of “unexpected success” is incorrect
`
`2.
`18. The Vellturo Declaration claims that the discussion in my initial
`
`declaration concerning the relevance of Zytiga®’s unexpected commercial success
`
`is incorrect, because “even if Zytiga®’s particular success in meeting this demand
`
`was unexpected, once Zytiga® was developed and commercialized as a solution,
`
`expected material demand awaited it.” (JSN2115, ¶ 44.) Here, Dr. Vellturo side-
`
`steps my argument on the relevance of commercial success in the event that the
`
`success was unexpected ex post. I continue to maintain that, to the extent that
`
`
`6 Profitability is clearly relevant to the question of whether demand has been
`sufficient to provide an incentive for a third party to invest in the product.
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`15
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`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`commercial success was “unexpected” (in the words of the USPTO) (WCK1077,
`
`¶¶ 22, 59-62), its inferential usefulness in establishing non-obviousness is
`
`weakened.
`
`19. As noted in my initial declaration, from an economic perspective, ex-
`
`post unexpected sales (e.g., after the drug is introduced, due, for example to the
`
`fact that other similar drugs were delayed in introduction, or due to some other
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`unexpected ex-post development like an increase in late stage prostate cancer
`
`prevalence) are not as relevant for commercial success because unexpected sales,
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`by definition, would not have incentivized market participants to develop the
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`claimed technology at the time of the alleged invention as they could not have been
`
`forecasted at the time of development (see WCK1077, ¶¶ 59-62.) If expectations
`
`for abiraterone or a product like abiraterone were low (even long after the
`
`invention was known and the product was developed), then there would be little
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`market-wide incentive for developing that product, even if there were a broader
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`market and demand for prostate cancer treatment. In other words, if Zytiga®’s
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`commercial success turned out to be anything other than “expected” after the
`
`product was developed and launched, it would not have contributed to broad
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`incentives for the market to develop the product sooner. A mere showing that the
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`drug performed better ex post than was expected at the time the drug was
`
`introduced does not say anything about the incentives to innovate at the time of the
`
`
`
`16
`
`
`
`
`
`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`invention. In any event, Dr. Vellturo does not perform such an ex-post analysis,
`
`since he presents no comparison of the sales of Zytiga® that were “expected” or
`
`forecast to sales that were actually achieved.
`
`20.
`
`In terms of the clinical and market performance of Zytiga® that was
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`“expected” at the time of launch, it is my understanding that such “expected”
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`performance related mainly to the anti-cancer capabilities of abiraterone and
`
`prednisone’s anti-cancer ability and ability to allay side effects. Notably, Dr.
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`Vellturo provides no analytical basis for an expectation that prednisone alone
`
`would contribute to Zytiga®’s sales (WCK1099 at 51:21-55:9; 65:11-17 (not his
`
`opinion that prednisone is driving sales, but possible abiraterone is a contributor),
`
`which also argues against nexus to the ’438 patented invention. In addition, I
`
`understand that some degree of Zytiga®’s expected clinical and market
`
`performance was due to its oral dosage form (a differentiator relative to existing
`
`treatments) (WCK1104, ¶ 48 )7—but, this benefit also does not derive from the
`
`abiraterone acetate/prednisone combination subject to the ’438 claims.
`
`
`
`
`
`
`7 Dr. Vellturo himself conceded that he did not specifically account for the benefit
`
`of oral dosage forms of Zytiga®—an unpatented feature—in the commercial
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`success analysis in his declaration, despite acknowledging that oral formulations
`
`are preferable to injectables. (WCK1099 at 70:11-72:3; 137:15-138:14.)
`
`
`
`17
`
`
`
`
`
`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`
`
` As discussed below, this preference for an oral
`
`form further illustrates a lack of nexus to the claimed technology. (WCK1104, ¶
`
`48).
`
`
`
`C. The Vellturo Declaration does not establish a nexus to the ’438
`patent
`1.
`
`Dr. Vellturo’s arguments and evidence on the ’213
`“blocking” patent are unpersuasive8
`In Sections III.E and IV.B.1. of my initial declaration, I state that the
`
`21.
`
`’213 patent is a blocking patent that limits the economic relevance of commercial
`
`success. The Vellturo Declaration responds that the ’213 "blocking" patent does
`
`not invalidate a commercial success assessment. (JSN2115, ¶¶ 26-38.) In
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`particular, Dr. Vellturo claims that the ’213 patent “did not serve as a disincentive
`
`to the industry to discover the invention claimed in the ’438 patent, as numerous
`
`
`8 Per my deposition testimony (JSN2160 at 82:21-22), I misstated that "Janssen has
`
`held exclusive rights in the ’213 Patent to commercialize abiraterone acetate for
`
`nearly 20 years since 1997, and will continue to do so through the ’213 Patents’
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`expiration in December 2016." (WCK1077, ¶ 42.) But, this does not change my
`
`analysis and conclusion that the ’213 patent "lessened the incentive or completely
`
`destroyed the incentive of any third party that wasn’t one of those…exclusive
`
`licensees” (JSN2160 at 85:5-10.)
`
`
`
`18
`
`
`
`
`
`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`opportunities arose that provided access to the ’213 patent.” (JSN2115, ¶ 28.)
`
`However, Dr. Vellturo’s claims are largely unsupported and do not sustain a notion
`
`of the ’213 patent being broadly available or accessible. In particular, he provides
`
`little or no evidence that other parties were able to access the ’213 patent and then
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`had the incentive to develop the claimed technology in the ’438 patent. For the
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`reasons discussed in more detail below, the existence of the ’213 blocking patent,
`
`which covers abiraterone acetate, indicates limited, if any, relevance to non-
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`obviousness of any alleged commercial success of the ’438 patent.
`
`22. First, Dr. Vellturo acknowledged that in preparation of his
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`declaration, he did not study nor rely on any terms of any proposed partnering,
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`development, or license agreements involving the ’213 patent, has seen no
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`evidence of the identities of the parties approached in the alleged “numerous
`
`opportunities” that arose to access the ’213 patent, and hence did not see a need to
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`consider any such proposed license. (WCK1120 at 126:7–131:17, 134:9–24.)
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`(WCK1099 at 16:20-17:14; 27:5-31:6). As such, there is no direct evidence
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`indicating that the ’213 patent was "actively shopped," at least up through April
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`2004 (WCK1099 at 23:18-22; 27:4-22). In fact, for Dr. Vellturo’s claims regarding
`
`the patent owner’s search for a commercial partner through 2004, Dr. Vellturo
`
`relies solely on the Judson Declaration, to the extent he cites anything at all.
`
`(WCK1099 at 10:22-16:1.) (JSN2115, ¶¶ 29-38) (JSN2028, ¶¶ 3, 5-7.) In fact, Dr.
`
`
`
`19
`
`
`
`
`
`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`Judson admitted during his deposition that such alleged licensing attempts over the
`
`’213 patent were not licensing attempts, but discussions to solicit a development
`
`partner to take the drug through Phase II FDA clinical trials (WCK1088, 26:2-15).
`
`And, Dr. Vellturo does not mention anything about the amount of royalties that a
`
`potential licensee would have to pay to the original assignee of the ’213 patent,
`
`British Technology Group, Ltd. (“BTG”) or the terms that BTG might have been
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`seeking.
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`23. Second, even Dr. Vellturo’s claims taken at face value do not support
`
`a notion of the ’213 patent being broadly available or accessible. Between the
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`patent owner’s alleged search for a commercial partner beginning in 1999 and
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`BTG’s decision to execute a worldwide exclusive license with Cougar in April
`
`2004 (WCK1087), I am aware only of the limited claims discussed above made by
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`Professor Ian Judson and cited by Dr. Vellturo, without any information on
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`specific terms of any license offer or the specific circumstances surrounding any
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`licensing negotiation. (JSN2028, ¶ 3, 5-7.)9 I am also unaware of any specific
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`evidence that BTG was trying to license out the ’213 patent between 1999 and
`
`
`9 For instance, if the ’213 patent was licensed on exclusive terms and with strict
`field-of-use provisions, it would still "block" numerous third parties from
`developing and commercializing the invention covered by the ’438 patent.
`(WCK1077, ¶ 42; WCK1099 at 18:7-24:14; 26:18-28:17.)
`
`
`
`20
`
`
`
`
`
`Inter Partes Review of U.S. Patent No. 8,822,438
`Reply Declaration of Robert D. Stoner, Ph.D. (Exhibit 1122)
`2002, since Boehringer Ingelheim suspended involvement with abiraterone acetate
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`in around 1999. (JSN2028, ¶ 7) (WCK1099 at 10:11-16:1.)
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`24. Notably, around this time there is evidence that there was likely a
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`significant “asymmetry” between the potential licensor (BTG) of the ’213 patent
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`and any potential licensee. Th
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