IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________________
`
`
`ARGENTUM PHARMACEUTICALS LLC
`Petitioner
`v.
`CIPLA LTD.
`Patent Owner
`
`_____________________
`
`Case IPR2017-00807
`U.S. Patent No. 8,168,620
`_____________________
`
`SECOND DECLARATION OF JOHN C. JAROSZ
`
`
`
`CIP2149
`Argentum Pharmaceuticals v. Cipla Ltd.
`IPR2017-00807
`
`

`

`I.
`
`II.
`
`B.
`
`Introduction ........................................................................................................................2
`A.
`Assignment ..............................................................................................................2
`B.
`Qualifications ...........................................................................................................3
`C.
`Evidence Considered ...............................................................................................5
`D.
`Compensation ..........................................................................................................9
`Background ......................................................................................................................10
`A.
`Dymista® ................................................................................................................10
`B.
`Duonase..................................................................................................................12
`C.
`Allergic Rhinitis Marketplace ................................................................................13
`1.
`Generic Products ........................................................................................15
`2.
`OTC Products.............................................................................................18
`III. Commercial Success Analysis .........................................................................................21
`A.
`Dymista® ................................................................................................................22
`1.
`Absolute Success .......................................................................................22
`2.
`Relative Success.........................................................................................22
`Duonase (and Imitator Products) ...........................................................................27
`1.
`Absolute Success .......................................................................................27
`2.
`Relative Success.........................................................................................29
`Nexus of Patent to Dymista® Success ....................................................................30
`Nexus of Patent to Duonase Success .....................................................................37
`Third Party Assessments ........................................................................................39
`Importance of Non-Patented Contributions ...........................................................42
`1.
`Pricing ........................................................................................................43
`2.
`Marketing and Promotion of Dymista® .....................................................46
`3.
`Reputation of Cipla ....................................................................................50
`4.
`Reformulation of Duonase .........................................................................51
`Revealed Preferences .............................................................................................52
`G.
`Cipla-Meda License Agreement ............................................................................54
`H.
`IV. Response To Argentum’s Petition ..................................................................................55
`V.
`Conclusion ........................................................................................................................57
`
`
`
`
`C.
`D.
`E.
`F.
`
`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`
`TABLE OF CONTENTS
`
`
`
`1
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`I, John C. Jarosz, do hereby declare, under penalty of perjury, as follows:
`
`I.
`
`Introduction
`
`1.
`
`
`
`I am over the age of eighteen (18) and otherwise competent to make
`
`this declaration.
`
`A. Assignment
`
`2.
`
`
`
`I and my firm have been retained by Cipla, Ltd. (“Cipla”) to provide
`
`expert analysis and testimony, if necessary, in connection with the above
`
`captioned inter partes review proceeding. I understand that certain claims of
`
`U.S. Patent No. 8,168,620 (“the ’620 Patent”)—claims 1, 4-6, 24-26, 29, 42-
`
`44 (“the challenged claims”)—have been challenged as being unpatentable by
`
`Argentum Pharmaceuticals LLC. (“Argentum”) on the ground that those
`
`claims are obvious.
`
`3.
`
`
`
`I have been asked by counsel for Cipla to assess whether 1) Mylan
`
`Specialty LP’s (“Mylan’s”) Dymista® (“Dymista”) commercial product in the
`
`U.S.1, 2) Cipla’s Duonase (“Duonase”) commercial product in India, and 3) a
`
`number of imitator products launched by Cipla’s competitors in India
`
`
`
`1 As stated below, Mylan’s predecessor-in-interest to the Dymista® product was
`
`Meda Pharmaceuticals, Inc. (“Meda”).
`
`2
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`(“Imitator Products”) are marketplace successes, and whether their success is
`
`attributable to the inventions described in the challenged claims of the ’620
`
`Patent.
`
`4.
`
`
`
`Based upon my review of the available evidence, it is my opinion that
`
`Dymista® and Duonase (and its imitator products) are marketplace successes,
`
`and that the success of these products is due, in large part, to the benefits and
`
`advantages of the challenged claims. As a result, the challenged claims of the
`
`patent at issue have been a commercial success.
`
`B. Qualifications
`
`5.
`
`
`
`I am a Managing Principal of Analysis Group, Inc. (“AG”) and Director
`
`of the firm’s Washington, D.C. office. AG is an economic, financial, strategy,
`
`and healthcare consulting firm with offices in Beijing, China; Boston, MA;
`
`Chicago, IL; Dallas, TX; Denver, CO; Los Angeles, Menlo Park, and San
`
`Francisco, CA; Montreal, Canada; New York, NY; and Washington, DC. AG
`
`provides research and analysis in a variety of business, litigation, and
`
`regulatory settings.
`
`
`
`6.
`
`
`
`I received my B.A. in Economics and Organizational Communications,
`
`summa cum laude, from Creighton University in Omaha, Nebraska.
`
`Thereafter, I was a fellowship student in the Ph.D. program in Economics at
`
`3
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Washington University in St. Louis, Missouri. I completed most of the
`
`requirements for my Ph.D., but left before finishing my degree. I ultimately
`
`was awarded an M.A. in Economics. I worked for some period after that and
`
`then enrolled in law school at the University of Wisconsin in Madison,
`
`Wisconsin, from which I received a J.D. I am a member of the State Bar of
`
`Wisconsin, but have been on inactive status for the past 32 years.
`
`7.
`
`
`
`I have spent my entire professional career as a practicing economist.
`
`Almost all of my work has involved evaluating the economics of intellectual
`
`property (“IP”) protection. The bulk of that work has dealt with issues of
`
`damages estimation, commercial success, FRAND compliance, irreparable
`
`harm, and allegations of antitrust violations. I have testified in hundreds of
`
`such matters.
`
`8.
`
`
`
`Among other things, I have published articles in academic and
`
`professional journals, edited a treatise on IP licensing, given presentations and
`
`speeches to a wide variety of groups, and taught classes at various law schools.
`
`9.
`
`
`
`Though my firm and I have been engaged in a wide range of industries,
`
`the largest amount of my work has been in pharmaceutical settings, where I
`
`have been involved in scores of matters. Those matters often deal with patient,
`
`physician, and payer decision-making, as well as supplier actions and
`
`4
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`reactions to competitive conditions.
`
`10.
`
`
`
`My resume is attached as CIP2168. It describes all of my testimony
`
`(either in deposition or at trial), publications, and presentations.
`
`11.
`
`
`
`In addition, I was previously an expert and trial witness for Cipla in the
`
`related district court litigation concerning the ’620 patent against Apotex Inc.
`
`and Apotex Corp. (collectively, “Apotex”).
`
`C. Evidence Considered
`
`12.
`
`
`
`In undertaking my study, I considered information from a variety of
`
`sources, each of which is a type that is reasonably relied upon by experts in
`
`my field. In the table below, I have listed the documents that I and/or people
`
`working with me at AG reviewed in preparing this report.
`
`Cipla’s
`Exhibit #2
`2017
`
`Description
`Redacted Proposed Joint Pretrial Order, November 10, 2016, Meda
`Pharmaceuticals Inc. and Cipla Ltd., v. Apotex Inc. and Apotex
`Corp., Case No. 1:14-cv-01453-LPS (D.I.137)
`Bench Trial Transcript, Volume D, December 16, 2016, Meda
`Pharmaceuticals Inc. and Cipla Ltd., v. Apotex Inc. and Apotex
`Corp., Case No. 1:14-cv-01453-LPS (D. Del.)
`DataMonitor – “Pipeline and Commercial Insight: Allergic Rhinitis,”
`July 2010 (PTX0396)
`
`
`2021
`
`2048
`
`2 Throughout this declaration, I will refer to these exhibits as “[Exhibit Number],
`
`[paragraph/page number(s)].”.
`
`5
`
`
`
`

`

`2049
`
`2050
`2053
`
`2062
`
`2064
`
`2065
`
`2066
`2067
`2068
`2069
`
`2070
`2071
`
`2072
`
`2074
`
`2075
`2076
`2077
`
`2078
`
`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`2006 Cipla-Meda License Agreement with Quality Agreement
`(PTX1016)
`2011 First Amendment to Cipla-Meda Agreement (PTX0282)
`Allergic Rhinitis - Global Drug Forecast and Market Analysis to
`2024, GlobalData, September 2015 (PTX0397)
`IMS data for U.S. allergic rhinitis products, 01.2012-04.2016
`(PTX0929)
`2011.11.02 Email and attachment from Ashwini Dumaswala to
`Bryan Roecklein re: 2012 Dymista® Strategic Plan (PTX1118)
`“All Products - Apotex Products: United States,”
`http://www.apotex.com/us/en/products/search.asp?qt=All&qs=&t=Al
`l%20Products (accessed June 22, 2016) (PTX0420)
`Dymista® Prescribing Information 2015 (PTX0024)
`Drug Approval Package: Dymista® (PTX0392)
`Meda AB Interim Report, Jan.-Sept. 2012 (PTX0393)
`“At a Glance” Cipla, http://www.cipla.com/en/corporate-
`information/at-a-glance.html (accessed June 28, 2016) (PTX0379)
`Duonase Nasal Spray – Prescribing Information (PTX0134)
`Cipla Website, “Respiratory,” http://www.cipla.com/en/our-
`businesses/strategic-business-units/respiratory.html (accessed June
`28, 2016) (PTX0380)
`Duonase competitor products, February MAT Nasal Sprays, 2005-
`2016 (PTX0816)
`2014.11.14 Email and attachment from Stuart Loeschto Betsy
`Orrison re: Dymista® US Marketing Plan 2015 (PTX0271)
`Dymista® Competitor Benchmarking Presentation 2012 (PTX0926)
`Meda – 2016 Dymista® Brand Plan (PTX0406)
`“Prescription to Over-the-Counter (OTC) Switch List,”
`http:/fwww.fda.gov/AboutFDA/CentersOffices/OfficeofMedical
`ProductsandTobacco/CDER/ucm106378.htm (accessed June 28,
`2016) (PTX0407)
`Johnson & Johnson Press Release, “RHINOCORT ® Allergy Spray
`Now Available Over The Counter Nationally,” February 8, 2016,
`http://www.jnj.com/news/all/RHINOCORT-Allergy-Spray-Now-
`Available-Over-The-Counter-Nationally (accessed June 30, 2016)
`
`6
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`
`(PTX0408)
`2011.11.02 Email and attachment from Ashwini Dumaswala to
`Bryan Roecklein re: 2012 Dymista® Strategy Plan (PTX0267)
`MEDA Presentation re: staffing, timelines for expansion, price
`comparisons (2001) (PTX0871)
`FDA.gov, “First-Time Generic Drug Approvals - March 2016,”
`http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugs
`areDevelopedandApproved/DrugsandBiologicApprovalReports/AN
`DAGenericDrugApproval (accessed June 28, 2016) (PTX0424)
`Renavatio Presentation & Meda Presentation - Dymista® Phase I
`Exploratory Research (PTX0426)
`Transmittal of advertisements and promotional labeling to the U.S.
`Food and Drug Administration for Dymista®, June 17, 2015
`(PTX0914)
`Transmittal of advertisements and promotional labeling to the U.S.
`Food and Drug Administration for Dymista®, June 16, 2015
`(PTX0916)
`Transmittal of advertisements and promotional labeling to the U.S.
`Food and Drug Administration for Dymista®, November 26, 2012
`(PTX0917)
`Transmittal of advertisements and promotional labeling to the U.S.
`Food and Drug Administration for Dymista®, June 29, 2015
`(PTX0915)
`Cipla Duonase Marketing Presentation (PTX0315)
`Meda/Cipla Powerpoint – Complete Picture (PTX0412)
`University of Utah Health Sciences Radio Website, “The Differences
`Between Allergic Rhinitis and Sinusitis,”
`https://healthcare.utah.edu/the-scope/shows.php?shows=0_hf3tm0mc
`(accessed June 28, 2016) (PTX0429)
`Family Allergy & Asthma Care of Montana Website, “If one is good,
`2 are better… A new nasal spray containing 2 medications!,”
`http://www.familyallergyasthmacare.com/2013/03/if-one-is-good-2-
`are-better-a-new-nasal-spray-containing-2-medications/ (accessed
`June 28, 2016) (PTX0430)
`Key Opinions in Medicine Website, “Dymista,”
`http://keyopinions.info/downloads/dymista-class-treatment-allergic-
`rhinitis/ (accessed June 28, 2016) (PTX0431)
`
`2079
`
`2080
`
`2081
`
`2082
`
`2083
`
`2084
`
`2085
`
`2086
`
`2087
`2088
`2089
`
`2090
`
`2091
`
`7
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Samuelson, Paul A., and Nordhaus, William D. Economics (19th ed.,
`2010), p. 49 (PTX0415)
`Dymista® Marketing Plan 2016 (PTX0438)
`Dymista® Formulary Coverage Powerpoint 2014 (PTX0892)
`Meda Memorandum re: CVS Caremark Formulary Decisions 2015
`(PTX0447)
`Bagwell, K. “The Economic Analysis of Advertising,” Handbook of
`Industrial Organization (2007), eds. M. Armstrong and R. Porter,
`vol. 3, pp. 1703-1706 (PTX0432)
`Ching, A., and Ishihara, M. “Measuring the Informative and
`Persuasive Roles of Detailing on Prescribing Decisions,” April 27,
`2010, Working Paper (PTX0433)
`Berndt, Ernst R. “The U.S. Pharmaceutical Industry: Why Major
`Growth In Times of Cost Containment?” Health Affairs, 20(2): 110-
`111; 2001 (PTX0434)
`Bloomberg Website, “Pharmaceutical Company Overview of Mylan
`Specialty L.P.,”
`http://www.bloomberg.com/research/stocks/private/snapshot.asp?pri
`vcapld=3346320 (accessed May 19, 2017)
`Newsroom Website, “Mylan Completes Acquisition of Meda,”
`http://newsroom.mylan.com/2016-08-05-Mylan-Completes-
`Acquisition-of-Meda (accessed May 19, 2017)
`IMS data for Indian allergic rhinitis nasal spray products, 12.2010-
`12.2014 (PTX0823)
`IMS data for Indian allergic rhinitis nasal sprays products, March
`2013 – March 2017
`Duonase competitor products, February MAT Nasal Sprays, 2005-
`2017
`Hitti, Miranda. “FDA Oks Generic Version of Flonase,” WebMD,
`http://www.webmd.com/allergies/news/20060222/fdaoksgenericversi
`onofflonase (accessed May 26, 2017)
`“What is a Tiered Formulary and What Does it Mean for Me?,”
`Medicare News and Updates,
`https://blog.medicaremadeclear.com/blog/bid/78229/WhatisaTieredF
`ormularyandWhatDoesitMeanforMe (accessed May 26, 2017)
`IMS data for U.S. allergic rhinitis products, May 2011 - April 2017
`
`2092
`
`2093
`2094
`2095
`
`2096
`
`2097
`
`2098
`
`2099
`
`2100
`
`2123
`
`2124
`
`2126
`
`2130
`
`2131
`
`2132
`
`8
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Second Declaration of Warner Carr, M.D.
`Second Declaration of Alexander Dominic D’Addio, Ph.D.
`Second Declaration Hugh David Charles Smyth, Ph.D.
`MMIT Dymista Formulary Information
`John C. Jarosz Curriculum Vitae
`
`2147
`2148
`2150
`2163
`2168
`
`
`13.
`
`
`
`This declaration refers to several Tabs, which are appended to the end
`
`of this document. Tabs 1-7, and 9-12 represent summaries of IMS Health
`
`(“IMS”) data. IMS is one of the largest vendors of physician-prescribing data
`
`in the world. Among other things, it reports revenue, prescription, and unit
`
`data, and is routinely relied upon by pharmaceutical industry professionals,
`
`researchers, and economists. The data obtained from IMS are voluminous and
`
`are not easily reviewed outside of electronic format. These Tabs are accurate
`
`summaries of the IMS data I reviewed. Tab 13 represents a summary of
`
`insurance formulary
`
`information from Managed Markets Insight &
`
`Technology (“MMIT”). MMIT is a leader in providing formulary information
`
`in the pharmaceutical space. This information is routinely relied upon by
`
`professionals in the pharmaceutical space and economists.
`
`D. Compensation
`
`14.
`
`
`
`My firm bills Cipla on a time-and-materials basis for my work and that
`
`9
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`of my colleagues. My customary and usual hourly billing rate for the time
`
`spent consulting, which includes my study of pertinent issues and materials
`
`and which applies in this matter, and any testimony I may give, is $735. I also
`
`have directed the efforts of other staff members of AG, whose customary and
`
`usual hourly billing rates range from $295 to $590. Our reasonable expenses
`
`are being compensated. My compensation is not, in any way, dependent on
`
`the outcome of this proceeding or on the substance of my opinion.
`
`II. Background
`
`A. Dymista®
`
`15.
`
`
`
`Mylan Specialty LP (“Mylan”) is a wholly-owned U.S. subsidiary of
`
`Mylan N.V., and focuses on developing prescription pharmaceutical products.
`
`CIP2099, 1. Mylan N.V. acquired Meda in August 2016. CIP2100, 1. Meda
`
`(via its predecessor MedPointe Inc.) is the licensee of certain intellectual
`
`property from Cipla relating to azelastine hydrochloride (“azelastine”) (an
`
`intranasal antihistamine) and fluticasone propionate (“fluticasone”) (an
`
`intranasal corticosteroid) combinations. CIP2049, 1, 3-4. The agreement
`
`granted Meda an exclusive license to manufacture and market Dymista® in
`
`the U.S. CIP2049, 5-6.
`
`16.
`
`
`
`Under the Cipla-Meda license agreement, the Dymista® label shows
`
`10
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`that Meda has manufactured and marketed Dymista® since its approval by the
`
`U.S. Food and Drug Administration (“FDA”) in May 2012. CIP2066, 1;
`
`CIP2067, 1.3 And according to a Meda financial report issued in November
`
`2012, Meda launched Dymista® in the U.S. in September of that year.
`
`CIP2068, 2.4 According to the Dymista® label, it includes two active
`
`ingredients—azelastine and fluticasone. CIP2066, 1.
`
`17.
`
`
`
`I understand from counsel that Mylan took over responsibility for
`
`marketing, advertising, promoting, and selling Dymista® in the U.S. as of
`
`March 31, 2017. In my analysis, however, I have relied upon many Meda
`
`documents, as indicated below, given how recently Mylan took over
`
`
`
`3 CIP2066 (FDA-approved Dymista® label) and CIP2067 (FDA approval listing for
`
`Dymista®) are publicly available product labels and FDA-approval listings which
`
`are generally relied upon by the public and economists to understand what
`
`products are offered by which companies.
`
`4 CIP2068 is a company financial report containing financial and marketplace
`
`information. Such publications are accurate and reliable sources of information of
`
`the type typically relied upon by economists and the public.
`
`11
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`commercial responsibility from Meda.
`
`B. Duonase
`
`18.
`
`
`
`Cipla is a global pharmaceutical company headquartered in Mumbai,
`
`India. CIP2069, 2.5 Cipla develops and markets branded and generic products
`
`in a wide range of areas, with a particular emphasis on respiratory therapies.
`
`CIP2071, 1. According to its website, “Cipla Respiratory products are
`
`available in over 100 countries” and Cipla’s products include “[a] variety of
`
`nasal sprays for treatment of nasal allergy.” CIP2071, 1-2. According to the
`
`’620 patent, Cipla is listed as the assignee.
`
`19.
`
`
`
`In April 2004, Cipla launched Duonase in India. CIP2072.6 From the
`
`
`
`5 CIP2069 and CIP2071 are printouts of Cipla’s publicly available website. Such
`
`information is a reliable authority for company information and is frequently
`
`relied upon by the public and economists.
`
`6 CIP2072 is a select portion of IMS data for the Indian AR marketplace showing
`
`the sales of azelastine/fluticasone combination products. As noted above, IMS is
`
`the gold standard in the pharmaceutical business. IMS data is widely used and
`
`12
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`product label, Duonase is a combination formulation product sold in India that
`
`contains azelastine and fluticasone under the brand name Duonase.; CIP2070,
`
`1.7
`
`20.
`
`
`
`Within two and a half years of Duonase’s introduction in the Indian
`
`marketplace, at least two other azelastine/fluticasone combination products
`
`also launched. Tab 8. Since then, I understand from counsel there have been
`
`at least sixteen other imitation azelastine/fluticasone combination products
`
`launched
`
`in
`
`the
`
`Indian marketplace, but only
`
`six of
`
`those
`
`azelastine/fluticasone products embody the challenged claims. Tabs 5 and 8.
`
`Throughout this declaration, I will refer to these products as “Imitator
`
`Products.”
`
`
`
`C. Allergic Rhinitis Marketplace
`
`21.
`
`
`
`According to Dr. Carr, there is a range of drug classes and dosage forms
`
`
`
`relied upon by the public and economists, and is viewed as the reliable and
`
`authoritative source for sales information.
`
`7 CIP2070 (Duonase product label) is a publicly available product label which is
`
`generally relied upon by the public and economists to understand what products
`
`are offered by which companies.
`
`13
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`available to treat allergic rhinitis (“AR”). CIP2147, ¶¶36-44. The options
`
`include antihistamines (both oral products and intranasal products);
`
`decongestants (both oral and nasal); anticholinergics (primarily nasal, but
`
`occasionally oral); leukotriene receptor antagonists (oral); mast cell inhibitors
`
`(nasal); corticosteroids (primarily nasal, but occasionally oral or parental);
`
`saline (nasal); and allergen-specific immunotherapy (injection).
`
`22.
`
`
`
`Competitive marketplace analysis research by DataMonitor shows that
`
`the oral route of administration was preferred in the pediatric and adult allergic
`
`rhinitis markets. CIP2048, 131.8 And for those patients suffering from severe
`
`AR symptoms or where symptoms are not adequately controlled, competitive
`
`marketplace analysis research by GlobalData shows that oral treatments
`
`
`
`8 DataMonitor provides competitive intelligence and analysis of therapeutic
`
`marketplaces. DataMonitor, and the information it provides, is the type of
`
`publication and information upon which economists typically rely for accurate
`
`marketplace analysis and intelligence.
`
`14
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`(tablets) were often deemed to be inadequate. CIP2053, 70-71.9
`
`23.
`
`
`
`Over time, the marketplace for nasal sprays has become highly
`
`competitive and challenging. Two specific trends have made it so: 1) the
`
`introduction of generic nasal sprays and 2) the introduction of over-the-
`
`counter (“OTC”) products.
`
`1.
`
`
`
`Generic Products
`
`24.
`
`
`
`In 2007, as shown below in Figure 1, according to a Meda presentation
`
`entitled “Dymista® Marketing Plan 2015,” (CIP2074, 14), the branded share
`
`of the prescription nasal spray marketplace (in terms of total prescriptions)
`
`was approximately 60 percent in 2007. By July 2014, that share had fallen to
`
`less than 20 percent. CIP2074, 14; CIP2075, 2.
`
`
`
`9 GlobalData provides competitive intelligence and analysis of therapeutic
`
`marketplaces. GlobalData, and the information it provides, is the type of
`
`publication and information upon which economists typically rely for accurate
`
`marketplace analysis and intelligence.
`
`15
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Figure 1
`
`25.
`
`
`
`Flonase went generic in 2006. CIP2130, 1.10 Nasonex went generic,
`
`
`
`
`
`10 CIP2130 is a publicly available publication regarding the release of generic
`
`Flonase. Such a publication is generally relied upon by the public and economists
`
`to understand what products are offered by which companies, and is a reliable
`
`authority upon which the public and economists rely to understand what products
`
`are offered by which companies.
`
`16
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`according to FDA approval records, on March 22, 2016. CIP2081, 1.11 The
`
`branded share of prescription nasal sprays has fallen to 3.9 percent as of the
`
`first four months of 2017. Tab 1.
`
`26.
`
`
`
`Despite the dramatic shift in the ratio of branded to generic
`
`prescriptions, total revenues for branded products has continued to outpace
`
`generic revenues, according to the Meda presentation entitled “Dymista®
`
`Marketing Plan 2015,” and as shown below in Figure 2. CIP2074, 11.
`
`
`
`11 CIP2081 is a publicly available listing of FDA approvals of generic drugs. Such
`
`a listing is generally relied upon by the public and economists to understand what
`
`products are offered by which companies.
`
`17
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Figure 2
`
`
`
`27.
`
`
`
`This phenomenon can also be observed in Tab 2, which shows that
`
`estimated revenues for branded prescription nasal sprays accounted for
`
`approximately 72.8 percent of the total revenues generated by prescription
`
`nasal sprays between 2012 and the first four months of 2016. Tab 2.
`
`28.
`
`
`
`The fact that the share of prescriptions is small and falling for branded
`
`treatments, while the share of revenues generated by branded treatments is
`
`large and has remained quite consistent over time, suggests that the price gap
`
`between branded prescription nasal sprays and generic prescription nasal
`
`sprays is significant and growing. Tabs 1 and 2.
`
`2. OTC Products
`
`29.
`
`
`
`In addition to a shift toward generic treatments, the marketplace,
`
`18
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`particularly in the U.S., has experienced a marked shift from the use of
`
`prescription products to the use of OTC products.
`
`30.
`
`
`
`According to FDA approval records, Nasacort was approved for OTC
`
`in October 2013. CIP2076, 3; CIP2077, 112; CIP2074, 24. Flonase was
`
`approved for OTC in June 2014 according to FDA records. CIP2076, 3;
`
`CIP2077, 1. And Rhinocort was approved for OTC in March 2015, and
`
`launched in February 2016, again according to FDA approval records.
`
`CIP2076, 3; CIP2077, 1; CIP2078.13
`
`31.
`
`
`
`As a result, the GlobalData study demonstrates a paradigm where,
`
`before seeing a physician, over the last several years AR sufferers have
`
`
`
`12 CIP2077 is a publicly available listing of products from 2001-2016 that switched
`
`from prescription drugs to over-the-counter drugs. Such a listing is generally
`
`relied upon by the public and economists to understand what products are offered
`
`by which companies.
`
`13 CIP2078 is a publicly available press release from Johnson & Johnson. Such a
`
`document is generally relied upon by the public and economists to understand
`
`what products are offered by which companies, and is viewed as a reliable
`
`authority for understanding the same.
`
`19
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`generally used at least one of the available OTC treatments first. CIP2053, 67.
`
`This is reflected below in Figure 3 (which is contained in a 2012 Dymista®
`
`strategic plan). CIP2064, 5.
`
`Figure 3
`
`
`
`32.
`
`
`
`According to GlobalData, the “transition of many prescription AR
`
`
`
`drugs to OTC status has resulted in many patients being able to access
`
`previously prescribed treatments from the local pharmacy.” CIP2053, 67. In
`
`fact, according to GlobalData, “mild, intermittent AR [is] mostly treated with
`
`OTC therapies.” CIP2053, 70-71. And according to GlobalData, the easy
`
`access to OTC options has increased the prevalence of self-diagnosis among
`
`AR patients, thereby enhancing marketplace competition. CIP2053, 23.
`
`20
`
`
`
`

`

`33.
`
`
`
`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Dymista® launched (and Duonase has competed) in a marketplace with
`
`multiple branded nasal prescription drug products, and in which a substantial
`
`number of lower-priced alternative treatments have become available.
`
`III. Commercial Success Analysis
`
`As informed by counsel, I understand that, to establish commercial
`34.
`
`success of a patented invention, the patentee must show that there is
`
`marketplace success and that the thing (product or method) that is successful
`
`is the invention disclosed and claimed in the patent.
`
`35.
`
`
`
`Based on the evidence I have seen, it is my opinion that Dymista® is a
`
`marketplace success having 1) achieved a significant level of prescriptions
`
`and revenues, and 2) achieved a strong share of the marketplace when the
`
`shares of its closest competitors stagnated or shrank. Further, it is my opinion
`
`that Duonase and its Imitator Products are a marketplace success having 1)
`
`achieved a significant and growing level of units sold and revenues and 2)
`
`captured approximately 25 percent of nasal spray units sold and revenues in
`
`India.
`
`36.
`
`
`
`Based on the evidence I have seen, it is also my opinion that the success
`
`of Dymista®, Duonase, and the Imitator Products has a nexus to the ’620
`
`patent because 1) those products embody the entirety of the challenged claims,
`
`21
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`2) the success of Dymista®, Duonase, and the Imitator Products is largely
`
`attributable to the benefits of the patented invention, and 3) non-patented
`
`features, like pricing, marketing, promotion, company recognition, and
`
`reformulation are not the predominant drivers of success for Dymista®,
`
`Duonase, and the Imitator Products.
`
`A. Dymista®
`
`1.
`
`Absolute Success
`
`37.
`
`
`
`Since its launch in the U.S. in September 2012, Dymista® has realized
`
`substantial and growing success.
`
`38.
`
`
`
`According to IMS Americas data, total prescriptions of Dymista®
`
`increased from approximately 641,212 in 2013 (the first full year that
`
`Dymista® was sold in the U.S.) to 963,299 in 2016 – a compound annual
`
`growth rate (“CAGR”) of 14.5 percent. Tab 1.
`
`39.
`
`
`
`For revenues, IMS Americas reported Dymista® U.S. revenues of
`
`almost $92 million in 2013 and more than $157 million in 2015. Tab 2. This
`
`corresponds to a CAGR of 30.9 percent. Tab 2.
`
`2.
`
`Relative Success
`
`40.
`
`
`
`Dymista® also has been a success relative to other treatments with
`
`which it competes.
`
`22
`
`
`
`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Second Declaration of John C. Jarosz (Exhibit 2149)
`Competitive Environment
`
`a.
`
`41.
`
`
`
`As discussed above, Dymista® competes in a crowded marketplace in
`
`which there are many alternatives for the treatment of AR. See ¶¶21, 25-35
`
`above. For the purposes of assessing Dymista®’s performance relative