IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`In the Inter Partes Review (IPR) of
`
`U.S. Patent Nos. 6,858,650, 7,384,980, 7,855,230, 7,985,772, and 8,338,478
`
`DECLARATION OF DEFOREST MCDUFF, Ph.D.
`
`I, DeForest McDuff, Ph.D., declare as follows:
`
`I.
`
`Introduction
`
`Qualifications
`
`1.
`
`I am a Vice President of Intensity Corporation and an expert in
`
`applied business economics, with more than ten years of experience in consulting,
`
`finance, and economic research. I provide expert witness testimony and consulting
`
`in a variety of areas, including lost profits, reasonable royalties, unjust enrichment,
`
`commercial success, finance, statistics, valuation, and business optimization.
`
`2.
`
`My expertise and experience span a variety of topics, including
`
`intellectual property, competition, antitrust, finance, labor, employment, and class
`
`action. My work in intellectual property spans the life sciences (including
`
`pharmaceuticals, biotechnology, diagnostics, and medical devices), electronics
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 1
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`In the Inter Partes Review (IPR) of
`
`U.S. Patent Nos. 6,858,650, 7,384,980, 7,855,230, 7,985,772, and 8,338,478
`
`DECLARATION OF DEFOREST MCDUFF, Ph.D.
`
`I, DeForest McDuff, Ph.D., declare as follows:
`
`I.
`
`Introduction
`
`Qualifications
`
`1.
`
`I am a Vice President of Intensity Corporation and an expert in
`
`applied business economics, with more than ten years of experience in consulting,
`
`finance, and economic research. I provide expert witness testimony and consulting
`
`in a variety of areas, including lost profits, reasonable royalties, unjust enrichment,
`
`commercial success, finance, statistics, valuation, and business optimization.
`
`2.
`
`My expertise and experience span a variety of topics, including
`
`intellectual property, competition, antitrust, finance, labor, employment, and class
`
`action. My work in intellectual property spans the life sciences (including
`
`pharmaceuticals, biotechnology, diagnostics, and medical devices), electronics
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 1
`
`
`
`(including consumer electronics, semiconductors, computers, and
`
`telecommunications), and has included projects on a diverse range of other
`
`industries (such as scuba diving equipment, golf clubs, and contact lenses). I
`
`frequently provide expertise and analysis in evaluating commercial success in the
`
`pharmaceutical industry.
`
`3.
`
`I earned my Ph.D. in economics from Princeton University. At
`
`Princeton, I received a National Science Foundation Graduate Research Fellowship
`
`for academic research studying economic and statistical properties of housing
`
`markets and financial derivatives. I have published research in several peer-
`
`reviewed academic journals. I graduated summa cum laude with undergraduate
`
`degrees in economics and mathematics from the University of Maryland.
`
`4.
`
`My curriculum vitae, provided in Exhibit 1034, contains more details
`
`on my background, experience, publications, and prior expert testimony.
`
`Scope of work
`
`5.
`
`Intensity Corporation has been retained by Kilpatrick Townsend &
`
`Stockton LLP on behalf of Mylan Pharmaceuticals Inc. (“Mylan”) in connection
`
`with my work in this matter. Intensity Corporation is being compensated at a rate
`
`of $725 per hour for my work and at lower rates for time spent by others on my
`
`team. The compensation of Intensity Corporation is not dependent on the
`
`substance of my testimony or the outcome of this matter.
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 2
`
`
`
`6.
`
`For this declaration, I was asked to evaluate aspects of commercial
`
`success, from an economic perspective, as it pertains to Toviaz (fesoterodine) and
`
`U.S. Patent Nos. 6,858,650, 7,384,980, 7,855,230, 7,985,772, and 8,338,478
`
`(collectively, “the patents at issue”). This declaration is a statement of my
`
`opinions in this matter and the 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 subjects discussed. In connection with my work
`
`in this matter, I interviewed Steven E. Patterson, Ph.D., Professor and Associate
`
`Director at the Center for Drug Design, University of Minnesota, on January 22,
`
`2016, including discussion of: (1) the patents at issue, and (2) similarities and
`
`differences between Toviaz and Detrol/Detrol LA (tolterodine). I have also
`
`reviewed and relied upon documents and other materials that are cited herein.
`
`7.
`
`This declaration summarizes only my current opinions, which are
`
`subject to change depending upon additional information and/or analysis. I and
`
`others working under my direction prepared the exhibits as summaries of the
`
`information I reviewed and relied upon. The entirety of my declaration, including
`
`exhibits 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 other considerations overlap, I
`
`generally discuss such issues only once for the sake of brevity. Neither the specific
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 3
`
`
`
`order in which each issue is addressed nor the organization of my declaration or
`
`exhibits affects the ultimate outcome of my analysis.
`
`II. Background
`
`Overactive bladder
`
`8.
`
`Overactive bladder (“OAB”) is a condition primarily characterized by
`
`the sudden urge to urinate.1 Additional symptoms of OAB include a high
`
`frequency of urination throughout the day, awakening multiple times to urinate at
`
`night, and urge incontinence, the involuntary loss of urine following an urgent
`
`need to urinate.2 According to the Urology Care Foundation, approximately 33
`
`1
`
`Mayo Clinic Website, Overactive Bladder, Definition,
`
`http://www.mayoclinic.org/diseases-conditions/overactive-
`
`bladder/basics/definition/con-20027632 (accessed 1/15/2016).
`
`Urology Care Foundation Website, What Is Overactive Bladder (OAB)?,
`
`http://www.urologyhealth.org/urologic-conditions/overactive-bladder-
`
`%28oab%29 (accessed 1/15/2016).
`
`2
`
`Mayo Clinic Website, Overactive Bladder, Symptoms,
`
`http://www.mayoclinic.org/diseases-conditions/overactive-
`
`bladder/basics/symptoms/con-20027632 (accessed 1/15/2016).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 4
`
`
`
`million Americans are afflicted with OAB, including as many as 30% of men and
`
`40% of women.3
`
`9.
`
`There are various treatment options for OAB, including behavioral
`
`interventions, medications, Botox bladder injections, nerve stimulation, and in
`
`severe cases, surgery.4 Behavioral interventions include exercises to strengthen the
`
`pelvic floor muscle, maintaining a healthy weight, limiting fluid consumption, and
`
`wearing absorbent pads, among others.5 As of January 2016, nine branded
`
`prescription drugs are approved by the FDA to treat OAB, including: Botox
`
`(onabotulinumtoxina), Detrol (tolterodine tartrate), Detrol LA (tolterodine tartrate),
`
`Ditropan XL (oxybutynin chloride), Enablex (darifenacin), Gelnique (oxybutynin
`
`3
`
`4
`
`5
`
`Urology Care Foundation Website, What Is Overactive Bladder (OAB)?,
`
`http://www.urologyhealth.org/urologic-conditions/overactive-bladder-
`
`%28oab%29 (accessed 1/15/2016).
`
`Mayo Clinic Website, Overactive Bladder, Treatments and Drugs,
`
`http://www.mayoclinic.org/diseases-conditions/overactive-
`
`bladder/basics/treatment/con-20027632 (accessed 1/15/2016).
`
`Mayo Clinic Website, Overactive Bladder, Treatments and Drugs,
`
`http://www.mayoclinic.org/diseases-conditions/overactive-
`
`bladder/basics/treatment/con-20027632 (accessed 1/15/2016).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 5
`
`
`
`chloride), Myrbetriq (mirabegron), Oxytrol (oxybutynin), Toviaz (fesoterodine
`
`fumarate), and Vesicare (solifenacin succinate).6 At this time, available generic
`
`drugs include: oxybutynin chloride, oxybutynin chloride extended release,
`
`tolterodine tartrate, tolterodine tartrate extended release, trospium chloride, and
`
`trospium chloride extended release.7
`
`6
`
`NIH Website, DailyMed Label Search Results for Overactive Bladder,
`
`http://dailymed.nlm.nih.gov/dailymed/search.cfm?adv=1&query=34067-
`
`9%3A%28overactive+bladder%29&searchdb=all&labeltype=all&pagesize=
`
`200&audience=professional&page=1&sortby=alphabetically (accessed
`
`1/20/2016).
`
`7
`
`NIH Website, DailyMed Label Search Results for Overactive Bladder,
`
`http://dailymed.nlm.nih.gov/dailymed/search.cfm?adv=1&query=34067-
`
`9%3A%28overactive+bladder%29&searchdb=all&labeltype=all&pagesize=
`
`200&audience=professional&page=1&sortby=alphabetically (accessed
`
`1/20/2016).
`
`Flavoxate is also used to treat symptoms of OAB, though it is not indicated
`
`for the treatment of OAB. See:
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 6
`
`
`
`Toviaz (fesoterodine)
`
`10.
`
`Toviaz is an extended-release tablet containing fesoterodine
`
`fumarate.8 Fesoterodine transforms in the body to release the active metabolite 5-
`
`hydroxymethyl tolterodine (“5-HMT”), which is a muscarinic receptor antagonist.9
`
`Muscarinic receptors play a role in contractions of urinary bladder smooth
`
`muscle.10 The effects of fesoterodine are the result of the inhibition of these
`
`receptors in the bladder.11 Fesoterodine is chemically similar to tolterodine, the
`
`active ingredient in Detrol and Detrol LA.12 Like fesoterodine, tolterodine
`
`Hesch, Kristen (2007), “Agents for Treatment of Overactive Bladder: A
`
`Therapeutic Class Review,” Proceedings (Baylor University Medical
`
`8
`
`9
`
`10
`
`11
`
`12
`
`Center) 20(3): 307–314, at 307.
`
`Toviaz Label, 10/31/2008, at 1.
`
`Toviaz Label, 10/31/2008, at 1.
`
`Toviaz Label, 10/31/2008, at 1.
`
`Toviaz Label, 10/31/2008, at 1.
`
`Consumer Reports, “Evaluating Drugs Used to Treat: Overactive Bladder,”
`
`10/2013, at 5.
`
`Toviaz Label, 10/31/2008, at 1.
`
`Detrol LA Prescribing Information, 8/2012, at 8–9.
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 7
`
`
`
`transforms in the body to form the active metabolite 5-HMT and its therapeutic
`
`effects are the result of antimuscarinic activity.13
`
`11.
`
`The Food and Drug Administration (“FDA”) approved Toviaz for
`
`treatment of OAB in October 2008.14 Toviaz is available in 4 mg and 8 mg tablets,
`
`taken once per day.15 Toviaz is manufactured by Pfizer Inc. (“Pfizer”) and became
`
`available in the U.S. in March 2009.16
`
`13
`
`14
`
`Detrol LA Prescribing Information, 8/2012, at 8–9.
`
`FDA Drug Details Website, Toviaz,
`
`https://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fuseactio
`
`n=Search.DrugDetails (accessed 1/15/2016).
`
`FDA Approval Letter, NDA 22-030, 10/31/2008.
`
`15
`
`Consumer Reports, “Evaluating Drugs Used to Treat: Overactive Bladder,”
`
`10/2013, at 12.
`
`FDA Drug Details Website, Toviaz,
`
`https://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fuseactio
`
`n=Search.DrugDetails (accessed 1/15/2016).
`
`Toviaz Label, 10/31/2008, at 14.
`
`16
`
`IMS Health Presentation, “DTC Investment in the Pharmaceutical Industry -
`
`Current Trends,” 4/2011, at 12.
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 8
`
`
`
`Patents at issue
`
`12. U.S. Patent No. 6,858,650 (“the ’650 patent”), entitled “Stable Salts of
`
`Novel Derivatives of 3,3-Diphenylpropylamines,” was filed on November 15,
`
`2000 and issued on February 22, 2005.17 The ’650 patent lists Claus Meese as the
`
`inventor and Schwarz Pharma AG (currently known as UCB Pharma GmbH18) as
`
`the assignee.19 The abstract reads as follows:20
`
`The present invention concerns highly pure, crystalline, stable
`
`compounds of novel derivatives of 3,3-diphenylpropylamines in the
`
`form of their salts, a method for the manufacture and highly pure,
`
`stable intermediate products.
`
`17
`
`18
`
`19
`
`20
`
`Stable Salts of Novel Derivatives of 3,3-Diphenylpropylamines, U.S. Patent
`
`No. 6,858,650 (filed 11/15/2000, issued 2/22/2005).
`
`Bloomberg Website, Company Overview of UCB Pharma GmbH,
`
`http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=
`
`882300 (accessed 1/19/2016).
`
`Stable Salts of Novel Derivatives of 3,3-Diphenylpropylamines, U.S. Patent
`
`No. 6,858,650 (filed 11/15/2000, issued 2/22/2005).
`
`Stable Salts of Novel Derivatives of 3,3-Diphenylpropylamines, U.S. Patent
`
`No. 6,858,650 (filed 11/15/2000, issued 2/22/2005).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 9
`
`
`
`The method
`
`is
`
`in particular characterized by
`
`regio- and
`
`chemoselectivity and high yield. Salts of phenolic monoesters of 3,3-
`
`diphenylpropylamines are provided, that are particularly well-suited
`
`for use in pharmaceutical formulations. Preferred compounds are R-
`
`(+)-2-(3-diisopropylamino-1-phenyl-propyl)-4-
`
`hydroxymethylphenylisobutyrate ester hydrogen fumarate and R-(+)-
`
`2-(3-diisopropylamino-1-phenylpropyl)-4-
`
`hydroxymethylphenylisobutyrate
`
`ester
`
`hydrochloride
`
`hydrate.
`
`Furthermore, stable, crystalline
`
`intermediate products
`
`that are
`
`essential for obtaining the abovementioned salts are provided. A
`
`preferred
`
`intermediate product
`
`is R-(−)-3-(3-diisopropylamino-
`
`phenyl-propyl)-4-hydroxy-benzoic acid methyl ester.
`
`13. U.S. Patent No. 7,384,980 (“the ’980 patent”), entitled “Derivatives of
`
`3,3-Diphenylpropylamines,” was filed on August 10, 2005 and issued on June 10,
`
`2008.21 The ’980 patent lists Claus Meese and Bengt Sparf as the inventors and
`
`21
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,384,980 (filed
`
`8/10/2005, issued 6/10/2008).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 10
`
`
`
`Schwarz Pharma AG (currently known as UCB Pharma GmbH22) as the assignee.23
`
`The abstract reads as follows:24
`
`The
`
`invention
`
`concerns
`
`novel
`
`derivatives
`
`of
`
`3,3-
`
`diphenylpropylamines, methods for their preparation, pharmaceutical
`
`compositions containing the novel compounds, and the use of the
`
`compounds for preparing drugs. More particularly, the invention
`
`relates to novel prodrugs of antimuscarinic agents with superior
`
`pharmacokinetic properties compared to existing drugs such as
`
`oxybutynin and
`
`tolterodine, methods
`
`for
`
`their preparation,
`
`pharmaceutical compositions containing them, a method of using said
`
`compounds and compositions
`
`for
`
`the
`
`treatment of urinary
`
`22
`
`Bloomberg Website, Company Overview of UCB Pharma GmbH,
`
`http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=
`
`882300 (accessed 1/19/2016).
`
`23
`
`24
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,384,980 (filed
`
`8/10/2005, issued 6/10/2008).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,384,980 (filed
`
`8/10/2005, issued 6/10/2008).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 11
`
`
`
`incontinence, gastrointestinal hyperactivity (irritable bowel syndrome)
`
`and other smooth muscle contractile conditions.
`
`14. U.S. Patent No. 7,855,230 (“the ’230 patent”), entitled “Derivatives of
`
`3,3-Diphenylpropylamines,” was filed on April 17, 2008 and issued on December
`
`21, 2010.25 The ’230 patent lists Claus Meese and Bengt Sparf as the inventors
`
`and UCB Pharma GmbH as the assignee.26 The abstract reads as follows:27
`
`The
`
`invention
`
`concerns
`
`novel
`
`derivatives
`
`of
`
`3,3-
`
`diphenylpropylamines, methods for their preparation, pharmaceutical
`
`compositions containing the novel compounds, and the use of the
`
`compounds for preparing drugs. More particularly, the invention
`
`relates to novel prodrugs of antimuscarinic agents with superior
`
`pharmacokinetic properties compared to existing drugs such as
`
`oxybutynin and
`
`tolterodine, methods
`
`for
`
`their preparation,
`
`25
`
`26
`
`27
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,855,230 (filed
`
`4/17/2008, issued 12/21/2010).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,855,230 (filed
`
`4/17/2008, issued 12/21/2010).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,855,230 (filed
`
`4/17/2008, issued 12/21/2010).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 12
`
`
`
`pharmaceutical compositions containing them, a method of using said
`
`compounds and compositions
`
`for
`
`the
`
`treatment of urinary
`
`incontinence, gastrointestinal hyperactivity (irritable bowel syndrome)
`
`and other smooth muscle contractile conditions.
`
`15. U.S. Patent No. 7,985,772 (“the ’772 patent”), entitled “Derivatives of
`
`3,3-Diphenylpropylamines,” was filed on June 14, 2010 and issued on July 26,
`
`2011.28 The ’772 patent lists Claus Meese and Bengt Sparf as the inventors and
`
`UCB Pharma GmbH as the assignee.29 The abstract reads as follows:30
`
`The
`
`invention
`
`concerns
`
`novel
`
`derivatives
`
`of
`
`3,3-
`
`diphenylpropylamines, methods for their preparation, pharmaceutical
`
`compositions containing the novel compounds, and the use of the
`
`compounds for preparing drugs. More particularly, the invention
`
`relates to novel prodrugs of antimuscarinic agents with superior
`
`28
`
`29
`
`30
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,985,772 (filed
`
`6/14/2010, issued 7/26/2011).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,985,772 (filed
`
`6/14/2010, issued 7/26/2011).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 7,985,772 (filed
`
`6/14/2010, issued 7/26/2011).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 13
`
`
`
`pharmacokinetic properties compared to existing drugs such as
`
`oxybutynin and
`
`tolterodine, methods
`
`for
`
`their preparation,
`
`pharmaceutical compositions containing them, a method of using said
`
`compounds and compositions
`
`for
`
`the
`
`treatment of urinary
`
`incontinence, gastrointestinal hyperactivity (irritable bowel syndrome)
`
`and other smooth muscle contractile conditions.
`
`16. U.S. Patent No. 8,338,478 (“the ’478 patent”), entitled “Derivatives of
`
`3,3-Diphenylpropylamines,” was filed on June 15, 2011 and issued on December
`
`25, 2012.31 The ’478 patent lists Claus Meese and Bengt Sparf as the inventors
`
`and UCB Pharma GmbH as the assignee.32 The abstract reads as follows:33
`
`The
`
`invention concerns novel derivatives of 3,3-diphenyl-
`
`propylamines, methods
`
`for
`
`their preparation, pharmaceutical
`
`compositions containing the novel compounds, and the use of the
`
`31
`
`32
`
`33
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 8,338,478 (filed
`
`6/15/2011, issued 12/25/2012).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 8,338,478 (filed
`
`6/15/2011, issued 12/25/2012).
`
`Derivatives of 3,3-Diphenylpropylamines, U.S. Patent No. 8,338,478 (filed
`
`6/15/2011, issued 12/25/2012).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 14
`
`
`
`compounds for preparing drugs. More particularly, the invention
`
`relates to novel prodrugs of antimuscarinic agents with superior
`
`pharmacokinetic properties compared to existing drugs such as
`
`oxybutynin and
`
`tolterodine, methods
`
`for
`
`their preparation,
`
`pharmaceutical compositions containing them, a method of using said
`
`compounds and compositions
`
`for
`
`the
`
`treatment of urinary
`
`incontinence, gastrointestinal hyperactivity (irritable bowel syndrome)
`
`and other smooth muscle contractile conditions.
`
`17. UCB Pharma GmbH granted Pfizer an exclusive, worldwide license to
`
`the above patents at issue.34 I understand that the patents at issue, among others,
`
`are represented to cover Pfizer’s Toviaz drug.35
`
`34
`
`35
`
`Pfizer Inc., Form 10-K, 2015, at Exhibit 13, p. 107.
`
`FDA Website, Orange Book, Toviaz 4MG (NDA 022030),
`
`https://www.accessdata.fda.gov/scripts/cder/ob/docs/patexclnew.cfm?Appl_
`
`No=022030&Product_No=001&table1=OB_Rx (accessed 1/13/2016).
`
`FDA Website, Orange Book, Toviaz 8MG (NDA 022030),
`
`https://www.accessdata.fda.gov/scripts/cder/ob/docs/patexclnew.cfm?Appl_
`
`No=022030&Product_No=002&table1=OB_Rx (accessed 1/13/2016).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 15
`
`
`
`III. Analysis of Commercial Success
`
`Economic relevance of commercial success
`
`18. Commercial success is a secondary consideration that a patent owner
`
`may use to argue that its patent is not obvious based on the alleged commercial
`
`success of an invention embodying that patent. I understand that commercial
`
`success may be relevant to the determination of a patent’s obviousness since the
`
`law 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. I further
`
`understand that evidence of commercial success is only relevant if there is a nexus
`
`between the alleged commercial success and the patentable features of the asserted
`
`claims. In other words, the patent owner must show that the commercial success is
`
`attributable to the novel parts of a patent claim, and not on factors that are
`
`unrelated or were already known.
`
`19.
`
`From an economic perspective, commercial success presumes that if
`
`an idea were obvious to market participants, then others would have brought that
`
`idea to market sooner had there been economic incentives to do so. A finding of
`
`commercial success can, in some circumstances, support the notion that a patent
`
`was not obvious to those skilled in the art if those incentives for development
`
`existed. Accordingly, analysis of commercial success frequently includes
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 16
`
`
`
`evaluation of sales, profits, market shares, prices, and other metrics to draw
`
`inferences on potential economic incentives for development.
`
`Toviaz’s market share, pricing, and sales have been relatively low
`
`20.
`
`Toviaz’s commercial performance in the OAB market does not
`
`demonstrate commercial success. To the contrary, several factors indicate that
`
`Toviaz’s commercial performance has been relatively low: (1) Toviaz’s market
`
`share has been low, despite substantial marketing and promotion efforts, (2) Toviaz
`
`has not commanded a price premium, and instead has been heavily discounted, (3)
`
`Toviaz sales have been low compared to other OAB drugs, despite Pfizer’s express
`
`efforts to switch Detrol patients to Toviaz, and (4) Toviaz sales have been low
`
`compared to average drugs.
`
`21.
`
`First, Toviaz’s market share has been relatively low. Toviaz’s share
`
`of total U.S. prescriptions in the OAB market was 0.6% in 2009, 2.6% in 2010,
`
`3.9% in 2011, 4.5% in 2012, 5.4% at its peak in 2013, and 5.3% in 2014. See
`
`Exhibit 1037. Toviaz’s share of total U.S. revenue in the OAB market was 0.7% in
`
`2009, 3.9% in 2010, 7.7% in 2011, 9.1% in 2012, 7.2% in 2013, and 7.4% in 2014.
`
`See Exhibit 1038. Prescription shares are more representative of share of use and
`
`are thus more informative here, since revenue shares are impacted by low-priced
`
`generic alternatives and reflect higher branded prices rather than share of use.
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 17
`
`
`
`Nevertheless, neither of these market shares demonstrate Toviaz filling a
`
`substantial market gap or indicate commercial success of Toviaz.
`
`22.
`
`Second, Pfizer has not charged premium prices for Toviaz, despite it
`
`being a branded drug, and in fact, Toviaz is among the least expensive branded
`
`OABs available. For example, Consumer Reports reported that, as of June 2010,
`
`Toviaz was the third least expensive branded OAB drug out of eleven branded
`
`drugs.36 In October 2013, Consumer Reports reported that Toviaz was the second
`
`least expensive branded OAB drug out of ten branded drugs.37
`
`23.
`
`Evidence indicates that Pfizer provides substantial price discounts on
`
`Toviaz. For example, U.S. patients without prescription medication insurance
`
`coverage are eligible to receive Toviaz at a discount of 36% to 75%.38 As another
`
`36
`
`37
`
`38
`
`Consumer Reports, “Evaluating Drugs Used to Treat: Overactive Bladder,”
`
`6/2010, at 11.
`
`Consumer Reports, “Evaluating Drugs Used to Treat: Overactive Bladder,”
`
`10/2013, at 12–13.
`
`Pfizer Pathways Website, Search for Services, Toviaz,
`
`http://www.pfizerrxpathways.com/en/?step=1 (accessed 1/20/2016).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 18
`
`
`
`example, Pfizer offers a discount of $45 per Toviaz prescription, plus one month of
`
`Toviaz free.39 From an economic perspective, if Toviaz was differentiated
`
`compared to other OAB drugs as a result of its patented features, Pfizer should
`
`have been able to charge a premium price compared to competing products. The
`
`fact that Toviaz was competing on price is not indicative of commercial success.
`
`24. Third, Toviaz sales have been low compared to other OAB drugs.
`
`From an economic perspective, sales by themselves do not demonstrate
`
`commercial success; rather, sales must be put into proper context, such as
`
`comparisons with other OAB drugs.40 Indeed, a number of other OAB drugs have
`
`Pfizer Pathways Website, Services for Uninsured and Insured Patients,
`
`http://www.pfizerrxpathways.com/en/see-how-we-
`
`help?program_id=program-18#tabs-0-middle-1 (accessed 1/20/2016).
`
`39
`
`Rx Pharmacy Coupons Website, Toviaz Prescription Discounts,
`
`http://www.rxpharmacycoupons.com/toviaz-manufacturer-coupon-2.html
`
`(accessed 1/20/2016).
`
`40
`
`See, for example: U.S. Patent and Trademark Office, Manual of Patent
`
`Examining Procedure, Eighth Edition, Revision: 7/2010, 716.03(b) IV., at
`
`700-300 (“Gross sales figures do not show commercial success absent
`
`evidence as to market share, Cable Electric Products, Inc. v. Genmark, Inc.,
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 19
`
`
`
`outperformed Toviaz. For example, in 2012, Toviaz had approximately 800,000
`
`total prescriptions, far below market leaders including generic Ditropan at 4.1
`
`million prescriptions, Vesicare at 3.9 million prescriptions, generic Ditropan XL at
`
`3.9 million prescriptions, Detrol LA at 2.7 million prescriptions, and Enablex at 1.3
`
`million prescriptions. See Exhibit 1037. In 2014, Toviaz’s 973,800 total
`
`prescriptions were well below the total prescriptions earned by generic Ditropan
`
`XL with 4.8 million, generic Ditropan with 4.4 million, Vesicare with 3.7 million,
`
`generic Detrol LA with 1.6 million, and Myrbetiq with 1.1 million. See Exhibit
`
`1037. In 2014, Toviaz U.S. revenue ranked only fourth among OAB drugs, with
`
`approximately $133.0 million in revenues, well below the $822.9 million earned
`
`by Vesicare, $237.2 million earned by Myrbetriq, as well as the $262.7 million
`
`earned by the generic version of Detrol LA, despite few competing branded drugs
`
`on the market. See Exhibit 1038.
`
`25.
`
`Similarly, Toviaz prescriptions and revenue in the first six years after
`
`launch were significantly less than other OAB branded drugs normalized for the
`
`770 F.2d 1015, 226 USPQ 881 (Fed. Cir. 1985), or as to the time period
`
`during which the product was sold, or as to what sales would normally be
`
`expected in the market, Ex parte Standish, 10 USPQ2d 1454 (Bd. Pat. App.
`
`& Inter. 1988).”).
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 20
`
`
`
`same timeframe. In the first year after launch, Toviaz had approximately 111,000
`
`total prescriptions, compared to 2.4 million prescriptions for Detrol LA, 459,000
`
`for Vesicare, 385,000 prescriptions for Enablex, and 331,000 prescriptions for
`
`Oxytrol. See Exhibit 1040. Over the first six years of sales, Toviaz prescriptions
`
`totaled approximately 4.0 million, well below 33.7 million for Detrol LA, 12.8
`
`million for Vesicare, and 8.0 million for Enablex. See Exhibit 1040. Similarly,
`
`Toviaz’s total revenue of $527.7 million for the first six years of sales falls below
`
`$3.2 billion for Detrol LA, $902.4 million for Vesicare, and $884.6 million for
`
`Enablex over the same timeframe. See Exhibit 1041.
`
`26.
`
`Toviaz has also had lower sales and use than Myrbetriq (mirabegron),
`
`a drug that entered the OAB market three years after Toviaz.41 Just two years after
`
`its launch, Myrbetriq surpassed Toviaz’s market share, both in terms of total U.S.
`
`prescriptions and total U.S. revenue. See Exhibits 1037 and 1038. In its first three
`
`years of sales, Myrbetriq earned 1.6 million prescriptions and $342.1 million in
`
`41
`
`Astellas Pharma US Press Release, “MYRBETRIQ™ (Mirabegron),
`
`Overactive Bladder Treatment from Astellas, Now Available Through U.S.
`
`Pharmacies,” 10/22/2012,
`
`https://www.astellas.us/docs/us/Myrbetriq_Product_Availability_Press_Rele
`
`ase_FINAL.pdf?v=1.
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 21
`
`
`
`revenue, exceeding the 1.3 million prescriptions and $159.5 million in revenue
`
`earned by Toviaz during its first three years of sales. See Exhibits 1040 and 1041.
`
`27.
`
`Fourth, Toviaz sales have fallen short compared to average drug
`
`sales, which tend to be close to break-even in terms of economic profitability,
`
`taking into account all costs and profits associated with development and
`
`commercialization.42 For example, published research breaks down drugs into
`
`deciles according to the magnitude of sales for products approved in the early
`
`42
`
`Research indicates that, in the pharmaceutical industry, the majority of drugs
`
`are not economically profitable and average drug sales are close to break-
`
`even, from an economic perspective. See:
`
`Saadi, Emily and Greg White (2014), Perspective, “Rewarding Innovation in
`
`Drug Development,” American Health and Drug Benefits 7(7): 373–374, at
`
`373 (“[I]t is estimated that only 3 in 10 approved drugs recover their R&D
`
`costs.”).
`
`PhRMA, 2013 Industry Profile, 7/2013, at 36 (“Only 2 of every 10 brand
`
`name medicines earn sufficient revenues to recoup average R&D costs.”).
`
`Grabowski, Henry, John Vernon, and Joseph A. DiMasi (2002), “Returns on
`
`Research and Development for 1990s New Drug Introductions,”
`
`Pharmacoeconomics 20(3): 11–29, at 17.
`
`Declaration of DeForest McDuff, Ph.D.
`
`In the Inter Partes Review of U.S.
`Patent Nos. 6,858,650, 7,384,980,
`7,855,230, 7,985,772, 8,338,478
`
`Petitioner Alembic Pharmaceuticals Limited - Exhibit 1033 - Page 22
`
`
`
`1990s.43 Compared to these drugs, Toviaz sales in the U.S. in its first six years
`
`have been just 6.7% of sales for top decile drugs (14.1% based on Toviaz
`
`worldwide sales), 14.7% of sales for second decile drugs (31.1% based on Toviaz
`
`worldwide sales), and 27.9% of sales for average drugs (59.0% based on Toviaz
`
`worldwide sales). See Exhibits 1042 to 1044. Given the rapid growth of drug
`
`sales and R&D over the decades, Toviaz sales would be even lower compared to
`
`more contemp
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
