`
`
`UNITED THERAPEUTICS CORP
`
`FORM 10-K
`(Annual Report)
`
`Filed 2/28/2007 For Period Ending 12/31/2006
`
`Address
`
`Telephone
`CIK
`Industry
`Sector
`Fiscal Year
`
`1110 SPRING ST
`SILVER SPRING, Maryland 20910
`301-608-9292
`0001082554
`Biotechnology & Drugs
`Healthcare
`12/31
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`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`WASHINGTON, D.C. 20549
`
`FORM 10-K
`
`(Mark One)
`    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934.
`For the fiscal year ended December 31, 2006
`OR
` TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934.
`For the transition period from to
`Commission file number 0-26301
`United Therapeutics Corporation
`(Exact Name of Registrant as Specified in Its Charter)
`
`Delaware
`(State or Other Jurisdiction of
`Incorporation or Organization)
`1110 Spring Street, Silver Spring, MD
`(Address of Principal Executive Offices)
`
`
`
`
`
`
`(301) 608-9292
`Registrant’s Telephone Number, Including Area Code
`Securities registered pursuant to Section 12(b) of the Act:
`
`52-1984749
`(I.R.S. Employer
`Identification No.)
`20910
`(Zip Code)
`
`Title of each class
`Common Stock, par value $.01 per share
`and associated preferred stock purchase rights
`
`
`
`
`
`Name of each exchange on which registered
`Nasdaq Global Select Market
`
`
`
`
`
`
`Securities registered pursuant to Section 12(g) of the Act:
`None
`(Title of Class)
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No 
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
`12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No
`
`
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained,
`to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
`
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large
`accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
`Large accelerated filer  Accelerated filer Non-accelerated filer
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No 
`The aggregate market value of the Common Stock held by non-affiliates of the registrant, based on the closing price on June 30, 2006, as reported by the NASDAQ National
`Market was approximately $1,201,000.
`The number of shares outstanding of the issuer’s common stock, par value $0.01 per share, as of February 20, 2007, was 21,314,670
`
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the registrant’s definitive proxy statement for the registrant’s 2007 annual shareholders meeting are incorporated by reference in Part III of this Form 10-K.
`
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`TABLE OF CONTENTS
`
`PART I
`
`
` Business
`Item 1.
` Risk Factors
`Item 1A.
` Unresolved Staff Comments
`Item 1B.
` Properties
`Item 2.
` Legal Proceedings
`Item 3.
` Submission of Matters to a Vote of Security Holders
`Item 4.
`PART II
`
`
` Market for Regitrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Item 5.
` Selected Financial Data
`Item 6.
` Management’ Discussion and Analysis of Financial Condition and Results of Operations
`Item 7.
` Quantitative and Qualitative Disclosure About Market Risk
`Item 7A.
` Financial Statements and Supplementary Data
`Item 8.
` Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
`Item 9.
` Controls and Procedures
`Item 9A.
` Other Information
`Item 9B.
`PART III
`
`
` Directors, Executive Officers and Corporate Governance
`Item 10.
` Executive Compensation
`Item 11.
` Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Item 12.
` Certain Relationships and Related Transactions, and Director Independence
`Item 13.
` Principal Accounting Fees and Services
`Item 14.
`PART IV
`
`
` Exhibits, Financial Statement Schedules
`Item 15.
`SIGNATURES
`EXHIBITS
`
`
`EX-21
` Subsidiaries of the Registrant
`EX-23.1
` Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
` Rule 13a-14(a) Certification of CEO
`EX-31.1
` Rule 13a-14(a) Certification of CFO
`EX-31.2
` Section 1350 Certification of CEO
`EX-32.1
` Section 1350 Certification of CFO
`EX-32.2
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`3
`23
`40
`40
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`40
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`41
`43
`44
`67
`F-1
`68
`68
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`ITEM 1. BUSINESS
`
`PART I
`
`We are a biotechnology company focused on the development and commercialization of innovative therapeutic products for patients with
`chronic and life-threatening diseases. We are active in three therapeutic areas—cardiovascular, cancer and infectious diseases. Our key
`therapeutic platforms include:
`• Prostacyclin Analogs , which are stable synthetic forms of prostacyclin, an important molecule produced by the body that has powerful
`®
`effects on blood vessel health and function. Our drug Remodulin
` has been approved by the U.S. Food and Drug Administration, or
`FDA, for the treatment of pulmonary arterial hypertension, or PAH, in patients with New York Heart Association (NYHA) Class II-IV
`(moderate to severe) symptoms to diminish symptoms associated with exercise, and in other countries for similar use, and in most of
`Europe for the treatment of NYHA Class III patients with PAH;
`• Immunotherapeutic Monoclonal Antibodies , which are antibodies that activate patients’ immune systems to treat cancer. This platform
`®
`includes OvaRex
`, which is being developed for the treatment of metastatic ovarian cancer; and
`• Glycobiology Antiviral Agents , which are a class of small molecules that have shown pre-clinical indications of efficacy against a
`broad range of viruses.
`
`Most of our resources are focused on our prostacyclin analogs for the treatment of cardiovascular disease and immunotherapeutic
`monoclonal antibodies for the treatment of cancer. Our other principal focus area is the development of glycobiology antiviral agents for the
`treatment of hepatitis and other diseases. We also devote resources to the commercialization and further development of telemedicine products
`and services, principally for the detection of cardiac arrhythmias, as well as to arginine supplementation therapy for cardiovascular health.
`
`Revenues from the sales of Remodulin for PAH commenced following its May 2002 FDA approval, and we have also generated revenues
`from sales of arginine products and telemedicine products and services. We field a sales and marketing organization that supports the
`commercial availability of Remodulin in the United States, Canada, Europe and other countries, aided by chronic-care specialty pharmaceutical
`distributors.
`
`United Therapeutics was incorporated in Delaware in June 1996. United Therapeutics’ principal executive offices are located at 1110
`Spring Street, Silver Spring, Maryland 20910.
`
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`United Therapeutics’ Products
`
`Our product portfolio includes the following:
`
`Mode of Delivery
`
`Continuous subcutaneous
`
`Product
`Remodulin
`
`
`Indication/Market
`
`Pulmonary arterial hypertension
`
`Our Products
`
`Remodulin
`
`®
`
`®
`
`Arginine Formulations
`CardioPAL
` and Decipher
` Recorders
`OvaRex
`Viveta™ (Treprostinil for
`Inhalation)
`UT-15C Sustained Release
`UT-15C Sustained Release
`
`
`
`
`
`
`
`
`
`
`
`
`Continuous intravenous
`
`Oral dietary supplement
`Telemedicine
`
`Intravenous
`Inhaled
`
`Oral
`Oral
`
`®
`
`
`Remodulin
`
` SR
`Beraprost
`
`®
`BrevaRex
`Glycobiology Antiviral Agents
`
`®
`OncoRex
`
`®
`ProstaRex
`
`®
`GivaRex
`
`Intravenous
`Oral
`Intravenous
`Oral
`
`Intravenous
`Intravenous
`Intravenous
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`Pulmonary arterial hypertension
`
`Vascular function
`Arrhythmias and ischemic heart disease
`
`Ovarian cancer
`Pulmonary arterial hypertension
`
`Pulmonary arterial hypertension
`Peripheral vascular disease/critical limb
`ischemia
`Improved transplant outcome
`Pulmonary arterial hypertension
`Pancreatic cancer
`Hepatitis B/C, dengue fever and Japanese
`encephalitis
`Various cancers
`Prostate cancer
`Gastrointestinal cancer
`
`
`Current Status
`
`Commercial in U.S., and
`32 countries including most
`of the European Union,
`Canada, Israel, and Australia*
`
`Commercial in U.S., Canada,
`Israel, Mexico, Argentina and
`Peru. European reviews are
`ongoing
`Commercial
`Commercial
`
`
`
`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`Phase III
`Phase III
`
`Phase II/III
`Phase II
`
`Phase II
`Phase I
`Preclinical
`Preclinical
`
`Preclinical
`Preclinical
`Preclinical
`
`
`
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`
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`
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`
`
`
`
`
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` Our Territory
`
`Worldwide
`
`
`
`
`Worldwide
`
`Worldwide
`Worldwide
`
`Worldwide**
`Worldwide
`
`Worldwide
`Worldwide
`
`Worldwide
`U.S./Canada
`Worldwide**
`Worldwide
`
`Worldwide**
`Worldwide**
`Worldwide**
`
`* We have obtained approval in 23 member countries of the European Union (Austria, Belgium, Czech Republic, Denmark, Estonia, France, Germany, Greece, Iceland, Italy,
`Luxembourg, Netherlands, Portugal, Cyprus, Finland, Hungary, Latvia, Lithuania, Norway, Poland, Slovakia, Slovenia, and Serbia), and have received formal approval
`letters and pricing approvals in most of them.
`** Including Germany, but excluding most of the rest of Europe and the Middle East.
`
`Remodulin
`
`We obtained worldwide rights for all indications to Remodulin, a prostacyclin analog, from Glaxo Wellcome, Inc. (now GlaxoSmithKline
`PLC) in January 1997 and Pharmacia & Upjohn Company (now Pfizer, Inc.) in December 1996. In May 2002, Remodulin was approved by the
`FDA as a continuous subcutaneous (under the skin) infusion. In November 2004, our FDA approval was expanded to permit continuous
`intravenous (through a vein or artery) infusion in patients who cannot tolerate subcutaneous infusion. In March 2006, our FDA approval was
`®
`expanded to allow transition from Flolan
` (epoprostinil), the first FDA-approved prostacyclin for PAH. Remodulin is also approved as a
`continuous subcutaneous infusion in 32 countries throughout the world and as a continuous intravenous infusion in Canada, Israel,
`
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`Mexico, Peru and Argentina. Applications for approval for both subcutaneous and intravenous Remodulin infusion are under review in many
`other countries. In addition, we are continuing work on expanding commercialization to new territories such as Japan and South Korea.
`
`Pulmonary Arterial Hypertension (PAH)
`
`We are focused primarily on developing Remodulin as our lead product for treating PAH. PAH is a life-threatening vascular disease that
`affects the blood vessels between the heart and lungs, known as the pulmonary blood vessels. PAH is characterized by the degradation of the
`blood vessel wall lining, the aggregation of platelets and the disruption of smooth muscle cell function. These conditions cause blockages and
`affect the ability of the blood vessels to dilate and then constrict as blood flows to the lungs. The resulting elevated pulmonary blood pressure
`causes increasing strain on the right side of the heart as it tries to pump blood to the lungs. It is estimated that there are between 100,000 and
`200,000 individuals with PAH worldwide. With the introduction of new oral therapies and marketing efforts by the manufacturers of PAH
`drugs, we have seen an increase in the number of people diagnosed with the disease. However, due to the rareness of PAH and the complexities
`of diagnosing it, only a small fraction of these patients are being treated.
`
`The complexity of PAH is due in part to the numerous causes associated with the disease. The three main disease pathways currently
`being treated are an increase in endothelin, an increase in the PDE5 enzyme and a reduction of prostacyclin in the PAH patient. A PAH patient
`could be affected by one, two or all three of these associated conditions. Endothelin and the PDE5 enzyme can cause the blood vessels to
`constrict. Prostacyclin, a naturally occurring hormone, appears to dilate blood vessels, prevent platelet aggregation, and prevent proliferation of
`smooth muscle cells surrounding the vessels. Endothelin antagonists (drugs that block endothelin) and PDE5 inhibitors (drugs that block the
`PDE5 enzyme) may be used in combination with prostacyclins. Together, these drugs provide symptomatic relief along different pathways and
`can complement each other to treat seriously ill patients.
`
`A long-term outcome study published in the European Respiratory Journal (vol. 28, Number 6; December 2006) demonstrated improved
`survival with Remodulin therapy when compared to predicted survival (NIH registry formula) over a four-year period. One-, two-, three and
`four-year survival was 87%, 78%, 71%, and 68%, respectively, for all 860 patients (including 130 patients who received combination therapy)
`and 88%, 79%, 73%, and 70%, respectively, for patients receiving only treprostinil monotherapy (n=730). In patients with idiopathic PAH for
`whom baseline hemodynamics were available (n=332 patients), survival was 91%, 82%, 76%, and 72% at years 1-4, respectively. This
`compares to respective predicted survival estimates of 69%, 56%, 46%, and 38% over the four-year period based on the NIH registry formula.
`
`The first FDA-approved prostacyclin for PAH was Flolan, a synthetic form of prostacyclin delivered continuously by an external pump
`through a surgically implanted intravenous catheter. Flolan is approved for the treatment of patients with certain subsets of late-stage PAH.
`
`We believe Remodulin provides patients with a less invasive alternative to Flolan. In contrast to Flolan, Remodulin is stable at room
`temperature and has a significantly longer duration inside the human body. These attributes allow for safer and more convenient delivery of
`Remodulin to patients. Unlike Flolan, Remodulin can be delivered by subcutaneous infusion with a pager-sized microinfusion device.
`Subcutaneous delivery of Remodulin also eliminates the risk of central venous catheter infection and related hospitalization associated with an
`IV infusion. Remodulin’s extended duration in the body may also reduce the risk of rebound PAH, and possibly death, if treatment is abruptly
`interrupted. The stability of Remodulin also allows it to be packaged as an aqueous solution, eliminating the need for patients to reconstitute
`the drug one or more times each day, as is required with Flolan. Treprostinil, the active ingredient of Remodulin, is highly soluble in an
`aqueous solution and therefore Remodulin can be
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`manufactured at highly concentrated solutions. This allows therapeutic concentrations of Remodulin to be delivered at low flow rates via
`miniaturized infusion pumps for both subcutaneous and intravenous infusion. Lastly, Remodulin does not require the use of cooling packs or
`refrigeration to keep it stable, as is required with Flolan due to Flolan’s chemical instability.
`
`There are noteworthy adverse events associated with Remodulin infusion. When infused subcutaneously, Remodulin causes infusion site
`pain and infusion site reaction in most patients to varying degrees. Patients who cannot tolerate subcutaneous Remodulin may instead use it
`intravenously. Intravenous Remodulin is delivered continuously by an external pump through a surgically implanted central venous catheter,
`similar to Flolan. When delivered intravenously, Remodulin bears a risk of infection, as does Flolan, but it does not require cooling packs or
`refrigeration and can be continuously infused for up to 48 hours before refilling the infusion pump, unlike Flolan which must be mixed and
`refilled every 24 hours.
`
`Subcutaneous Remodulin
`
`In March 2000, we completed an international, randomized, placebo-controlled, double-blind study of subcutaneous Remodulin involving
`a total of 470 patients with PAH. Half of the patients received Remodulin subcutaneously for 12 weeks, while the other half received a placebo.
`The study data showed that patients who received Remodulin had significant improvement in important clinical endpoints, including a
`composite index that measured exercise capacity and shortness of breath, cardiopulmonary hemodynamics and in the signs and symptoms of
`the disease. Based on the favorable results of this study, we filed a New Drug Application with the FDA in late 2000. On May 21, 2002, the
`FDA approved Remodulin (treprostinil sodium) Injection as a continuous subcutaneous infusion for the treatment of PAH in patients with
`NYHA class II-IV symptoms (with class IV representing the most severely ill patients) to diminish symptoms associated with exercise.
`Remodulin may be prescribed for all forms of PAH and is the only PAH treatment approved for NYHA class II, III and IV patients.
`
`As a condition of Remodulin’s Subpart H approval, we were required to perform a post-marketing Phase IV clinical study to confirm the
`clinical benefits of Remodulin. In August 2005, we performed an interim assessment after 22 patients completed the Phase IV study. The
`results of the interim assessment, as analyzed by an independent statistician, were positive. The p value was 0.0002, meaning the likelihood
`that the achieved result was incorrect was two out of ten thousand. Specifically, 13 of the 14 patients (93%) receiving Remodulin were able to
`successfully transition from Flolan, which they had previously been using to treat their condition. These patients were able to complete the
`eight-week study without the need to reinstitute Flolan therapy. Alternatively, only 1 of the 8 patients (13%) successfully transitioned without
`clinical deterioration during the eight week period from Flolan to a placebo. Based on this positive outcome, in March 2006, the FDA agreed
`that we had satisfied our obligation to perform the post-marketing Phase IV clinical study, that the study confirmed the clinical benefits of
`Remodulin, and expanded the use of Remodulin to specifically allow for transition of Flolan patients directly to Remodulin therapy.
`
`Intravenous Remodulin
`
`In July 2003, the FDA accepted our Investigational New Drug Application for the development of Remodulin by intravenous delivery for
`the treatment of PAH. A bioequivalence study in volunteers was performed in late 2003, which established that intravenous and subcutaneous
`Remodulin are bioequivalent (meaning that both routes of infusion result in comparable levels of Remodulin in the blood). In addition, animal
`toxicology studies were completed and indicated comparable safety of chronic intravenous infusion as compared to chronic subcutaneous
`infusion.
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`On January 30, 2004, a supplemental New Drug Application was filed with the FDA to request approval for intravenous use of Remodulin
`for PAH. On November 24, 2004, based on data establishing intravenous Remodulin’s bioequivalence with the previously approved
`subcutaneous administration of Remodulin, the FDA approved the intravenous use of Remodulin for those not able to tolerate subcutaneous
`infusion.
`
`In March 2005, we commenced a 12-week placebo-controlled trial of intravenous Remodulin in patients with PAH to further assess the
`clinical benefits of Remodulin. The trial was conducted in India and was designed to enroll up to 126 patients. Interim results of this trial were
`to be analyzed after 33, 66 and 99 patients completed the 12-week trial. In August 2005, after enrolling 45 patients, we suspended enrollment
`of new patients, in accordance with the recommendation of the trial’s independent Data Safety Monitoring Board, which is a panel of
`independent experts. Preliminary results from the 45 patients were positive (p=0.008). Specifically, intravenous Remodulin produced an 83-
`meter median improvement in six-minute walk distance compared to placebo after twelve weeks.
`
`Results in a prospective open-label study reported in January 2007 demonstrate that rapid transition from intravenous Flolan to
`intravenous Remodulin was achieved in 12 PAH patients with no serious adverse events and maintenance of baseline clinical status was
`maintained over 12 weeks. The patients were transitioned from Flolan to intravenous Remodulin by a direct switch from a Flolan medication
`cassette to a Remodulin medication cassette. Rapid transition to Remodulin was achieved without serious adverse events and baseline clinical
`status was maintained over 12 weeks. All patients reported fewer prostacyclin-related side effects with Remodulin and remained on Remodulin
`after study completion. The study demonstrated that stable patients with PAH can be safely transitioned from Flolan to intravenous Remodulin
`using a rapid switch protocol.
`
`Although intravenous Remodulin does not possess all the safety and convenience benefits of subcutaneous Remodulin, it has one
`important advantage: it eliminates infusion site pain and reaction, a common side effect of using subcutaneous Remodulin. Many patients are
`unsuccessful in managing such infusion site pain even with using available pain management techniques. Intravenous Remodulin has many
`beneficial characteristics that differentiate it from intravenous Flolan. As Intravenous Remodulin does not require refrigeration, it serves as an
`alternative to Flolan which must be continuously refrigerated, even while being administered to a patient by continuous infusion. Furthermore,
`the active ingredient in Remodulin remains active for a few hours, whereas the active ingredient in Flolan is highly unstable and only remains
`active in the body for a few minutes. Because Remodulin remains active longer, it may reduce the risk of rebound PAH, a severe recurrence of
`the disease in the case of inadvertent therapy interruption. Remodulin can be infused continuously for up to 48 hours while Flolan can only be
`infused for 24 hours. This allows patients to prepare medication solutions every other day as opposed to daily. Also, because Remodulin can be
`made in highly concentrated solutions, a wide variety of pump options, including miniaturized pump platforms, are available to patients.
`
`In February 2007, the Scientific Leadership Committee (SLC) of the Pulmonary Hypertension Association announced new guidance
`relating to the treatment of PAH patients on long-term intravenous therapy. The SLC guidance was issued in response to the release of a slide
`presentation prepared by researchers with the U.S. Centers for Disease Control and Prevention (CDC) entitled “ Bloodstream infections among
`patients treated with intravenous epoprostenol and intravenous treprostinil for pulmonary arterial hypertension, United States 2004—2006 ”.
`These slides accompanied a presentation to the SLC and may subsequently be published as a report in the CDC’s Morbidity and Mortality
`Weekly Report . The slides were prepared in connection with a CDC retrospective inquiry at seven centers into a report of increased blood
`stream infections, particularly gram-negative blood stream infections, among PAH patients treated with intravenous Remodulin as compared to
`intravenous Flolan. The SLC guidance statement noted that the CDC observations were hypothesis-generating and did not permit definitive or
`specific conclusions. The SLC reminded physicians of the need to be aware of the range of possible gram negative and gram
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`positive infectious organisms in patients with long-term central catheters and to treat them appropriately. In response to the SLC guidance
`statement, we are planning to commence a multi-center, multi-national, multi-year and multi-agent prospective study to scientifically test the
`hypothesis of whether there are differences in the risk of sepsis and sepsis sub-types among parenterally-delivered prostanoids. We anticipate
`this study to enroll several hundred patients, which enrollment is expected to commence later this year. We also plan to coordinate a working
`group with the Pulmonary Hypertension Association and physicians and nurses, along with its network of specialty distributors and home
`health care providers, to develop unified best practice recommendations related to the chronic administration of IV prostanoids via central
`venous catheters. The risk of sepsis is already noted in the Remodulin package insert, but we will also revise the package insert to more fully
`describe the known infection risk and appropriate technique that should be practiced when preparing and administering Remodulin
`intravenously. Best practices for increased sterility, which, in turn, leads to lower risk of sepsis, is the over all goal for all of our efforts.
`
`Remodulin Commercialization
`
`Remodulin for subcutaneous use is approved in 32 countries throughout the world. The mutual recognition process to obtain approvals
`from European Union member countries for subcutaneous use of Remodulin was completed in August 2005, with positive decisions received
`from most European Union countries. We withdrew applications in Ireland, Spain and the United Kingdom and are engaged in regulatory
`discussions concerning the timing of resubmission in these three countries, which should occur in 2007. Licenses and pricing approvals have
`been received in most European Union countries, with the remainder expected during 2007. In addition, we have submitted a variation of the
`license for approval of intravenous Remodulin in the European Union through the mutual recognition process. The application is currently
`under review by the host nation, France. In the meantime, we will continue to sell (but not market) Remodulin in European countries where we
`are not licensed under the named-patient system, under which system we are permitted to import and sell Remodulin to hospitals for use in
`specifically named patients.
`
`We are working on expanding our sales of Remodulin into new territories through our existing distributors and new distributors. For
`example, we are negotiating with a potential distributor to enter the Japanese market for subcutaneous and intravenous Remodulin. However,
`certain countries, like Japan, may require that new clinical trials be conducted in order to show the efficacy and safety of the drug in their
`population, called bridging trials. Commercial sales in such countries could therefore be several years from realization.
`
`Peripheral Vascular Disease/Critical Limb Ischemia
`
`We are also developing Remodulin for late-stage peripheral vascular disease known as critical limb ischemia. Peripheral vascular disease
`is a disease that affects the blood vessels in the legs. While the precise causes of peripheral vascular disease are unknown, diabetes, obesity,
`smoking and lack of exercise are associated with the disease. Peripheral vascular disease appears to be similar to PAH in that there is a
`reduction in natural prostacyclin in the affected blood vessels.
`
`In the United States, it is estimated that 750,000 people suffer from critical limb ischemia. The disease is characterized by extreme pain,
`non-healing ulcers in the legs, reduced exercise capacity and severely reduced blood flow in the limbs. There are currently no drugs approved
`to treat critical limb ischemia in the United States. Physicians often perform surgical interventions (such as balloon angioplasty, stents and by-
`passes) to restore or improve blood flow in the limbs. These procedures can provide temporary relief to patients, but do not address the
`underlying causes of peripheral vascular disease. Due to the lack of adequate pharmaceutical treatments, approximately 200,000 limb
`amputations are performed each year on patients with critical limb ischemia.
`
`
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`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1148, p. 9 of 128
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`In September 1998, we completed a Phase II study which assessed the safety and blood flow effects of Remodulin administered
`intravenously to patients with critical limb ischemia. The study demonstrated that Remodulin can be administered safely to patients with
`critical limb ischemia and that Remodulin substantially increased blood flow in the affected areas of the legs. We commenced a 30 patient
`placebo-controlled, pre-pivotal clinical study of Remodulin for critical limb ischemia in 2002. Approximately 19 patients were enrolled. The
`study was ended before becoming fully enrolled due to difficulties in patient recruitment. We believe that more convenient formulations of
`Remodulin, such as an inhaled or oral form, may be more appropriate for patients with peripheral vascular disease. Accordingly, we have
`recently commenced safety and tolerability studies with the sustained-release form of oral treprostinil in patients with peripheral vascular
`disease.
`
`TRIUMPH-1 (proposed to be marketed as Viveta)
`
`During 2004 and 2005, independent clinical investigators in Europe and the United States performed small uncontrolled trials of inhaled
`formulations of treprostinil in patients with PAH. In April 2004, the European Medicines Agency granted an orphan designation for inhaled
`treprostinil for the treatment of both PAH and chronic thromboembolic pulmonary hypertension. In June 2005, Lung Rx, Inc., a wholly-owned
`subsidiary of United Therapeutics, commenced a 12-week placebo-controlled trial of inhaled treprostinil in at least 150 patients with PAH who
`®
`are also being treated with Tracleer
`. During the trial, dosing will be escalated to patient tolerance or a maximum equivalence of 45
`micrograms per session. The primary end point of the trial is the peak six minute walk improvement test, which is a typical benchmark test of
`cardiovascular health. This trial, TRIUMPH-1 ( T r eprostinil I nhalation U sed in the M anagement of P ulmonary H ypertension), is currently
`being conducted at approximately 36 centers in the United States and Europe. Additional centers are being added to the study. In May 2006,
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`the FDA agreed to permit the inclusion in the trial of PAH patients who are also being treated with Revatio
`. The FDA also agreed to expand
`the trial size to at least 200 patients, and to permit the assessment of efficacy after 150 patients have completed the trial. We do not intend to
`conduct the interim efficacy assessment. As a result, the TRIUMPH-1 trial is expected to conclude when 200 evaluable patients have
`completed the study, which is expected upon the enrollment of approximately 220 patients overall. As of December 31, 2006, approximately
`155 patients had been enrolled in this trial. As of February 20, 2007, approximately 175 patients had been enrolled in this trial.
`®
`. Ventavis is marketed by Actelion Ltd. in the United States and by
`Currently, the only FDA approved inhaled prostacyclin is Ventavis
`Schering AG in