Annual Report 200
`
`22153419
`
`PROCESSED
`
`APR 14 2003
`THOMSON
`FINANCIAL
`
`ACTELIION
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 1 of 58
`
`

`

`essage to 'Shareholders
`rod uct Status
`P
`Development
`qDru Discoverv Racaarph
`PP.r]nlo
`
`Part i
`o,
`06
`10
`, .
`
`16
`
`I
`
`CFO's Lett
`er
`Corporate Governance
`Consolidated Financial
`3LaEements
`Holding Company Statements
`Shareholder Information
`Year 2002 Highlights
`
`Part 2
`
`20
`22
`
`28
`
`47
`52
`54
`
`Actelion is on track for growth and profitability .,. Tracleer®, a breakthrough in
`treating pulmonary arterial hypertension (PAH) and our first product on the market,
`is off to a dynamic start. Revenues are rising with over CHF 120 million in sales in
`-- its first year on the market. Our global sales and marketing organization is growing
`to ca tp ure the full potential in PAH - estimated at USD 400 million to 500 million at
`peak. Our scientists are exploring new indications for Tracleero and develo
`P!n9
`new molecules that are advancing into human trials
`at a.record-breaking pace.
`We are preparing to launch Zavescao, an innovative therapy that we have licensed
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 2 of 58
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`

`

`I'
`
`.
`
`Jean-Pauf Clozel
`Uie(f <ecuiive Officer
`
`Dear Shareholders,
`we can look back on 2002 with a sense of
`accomplishment. The successful launch of our
`first product, Tracleere (bosentangained
`additional momentum. With more than 3,000
`patients already on the drug in the United
`States, Canada, the European Union and
`Switzerland by the end of the year, Tracleer®
`generated revenue of CHF 121.8 million -
`making it one of the most successful
`biopharmaceutical product launches ever.
`This puts Actelion on track for long-term
`growth that should result in full-year profitabi-
`lity for the company in 2004.
`Tracleer®, the only endothelin receptor antag-
`onist (ERA) on the market, has been approved
`for the treatment of pulmonary arterial hyper-
`tension (PAH) in key markets worldwide.
`
`We have also made substantial progress in both drug discovery and drug
`
`Clinical trials for new indications for Tracleer are underway and an initial
`study in digital ulceration has shown. very promising results. Following a
`successful dose-optimization study with Ve{etri`. this intravenous ERA has
`been moved into a Phase III registration program in acute heart failure
`(AHF).
`In early 2003, Actelion started clinical trials with the first orally avaiLble
`urotenin 11 receptor antagonist, a breakthrough from our own research
`program. This milestone is indicative of the innovative potential of oui drug
`discovery efforts, as it has taken Actelion only three years to move from
`basic ideas to human testing.
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 3 of 58
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`

`

``` h easape to Shareholders os .. .
`06
`Produ::t Status
`Development
`__1o
`14
`Drug Discovery Researth
`People
`16
`'financ-al Review
`-- 1$
`
`--
`
`committed shareholder basa that
`provided the company with the
`necessary liquidity in spring 2000.
`We will continue to do our utmost
`to maintain and strengthen the
`trust you have placed in all of us
`here at Actelion. We will stay in
`close touch with you, our share-
`holders, to ensure that you remain
`fully informed about the company's
`progress.
`
`Robert E. Cawthorn
`Chairman of the Board
`
`Jean-Paul Clozel
`Chief Executive Officer
`
`Expanding marketing
`and sales
`Rapid s iccess in the marketplace
`has also be:m the result of the
`substantial investment Actelion
`has made in building up its pres-
`ence in <ey markets worldwide. At
`the end of 2002, more than half of
`our emp loyees in over 20 countries
`either marketed the drug or, as in
`the case of Australia, were prepar-
`ing for t`le full commercial intro-
`duction of Tracleer'. In Japan, the
`Actelion affiliate prepared a regis-
`tration f ling.
`
`Despite the relatively small size of
`we have a truly glob-
`our corn
`al outloci irfrastructure and capa-
`bilities tc discover, develop and
`market di ugs such as Tracleer® on
`our own. Our unique pharrnacovigi-
`lance system. which supports the
`safe and appropriate use of
`Tracleer° around the world, is a
`significar t competitive advantage
`for Acteli,ln, his international
`strength i> reflected in Actelion
`obtaining marketing and develop
`ment righ s fr-rm Oxford Glyco-
`Sciences .:oncerning Zavesca's, the
`first oral t eatment for type 1
`Gaucher's disease and, potentially,
`for other I pid storage diseases.
`
`Promising results from
`clinical trials
`Since its foundation in late 1997,
`Actelion h, is worked and invested
`diligently t become a biopharma-
`coutical ccmpa 1y with core com-
`petencies ii drug discovery, drug
`developrne it arid marketing. We
`are glad to report that we have
`made rapid and substantial
`progress toward achieving these
`goals.
`
`In drug devifloprnent, the company
`in 2002 successfully concluded the
`clinical trials Breathe,2 covering
`the use of T aclcer' in patients
`with concornitart intravenous ther-
`apy and Breithe 3 for pediatric
`cases, In au umii of 2002, a first
`study evalw ting Tracleer° for use
`
`4 Actelion Ann_Irll Roport 2(X)2
`
`in scleroderma -related digital
`ulceration showed a significant
`reduction in the occurrence of
`these painful lesions on fingers
`and toes and, consequently, an
`improvement in hand functionality.
`
`Throughout 2002, Actel ion added
`development programs to further
`define the potential benefits of
`endothelin receptor antagonism,
`evaluating Tracleer' in idiopathic
`pulmonary fibrosis, pulmonary
`fibrosis due to scleroderma and
`metastatic melanoma.
`
`Veletri", our intravenous endothe-
`Iin receptor antagonist, demon-
`strated significant promise in a
`dose-optimization trial in treating
`acute heart failure. A registration
`study program was initiate.] in late
`2002, which is expected to enroll
`up to 2,000 patients over the corn-
`ing two years.
`
`Advances in drug
`discovery
`Our successful efforts in the clini-
`cal area have been matched by our
`achievements in drug discovery.
`Several projects, including the
`areas of renin inhibition arid orexin
`antagonism, are in an advanced
`stage. Our urotensin receptor
`antagonist project has moved par-
`ticularly fast. In early 2003, we will
`initiate human clinical studies with
`an orally active urotensin receptor
`antagonist. To the best of our
`knowledge, Actelion is the first
`company worldwide to have dis-
`covered a compound and moved it
`into the development phase in this
`field, This represents an entirely
`novel therapeutic principle, with
`potential indications especially in,
`but not limited to, the cardiovascu-
`lar area.
`
`Generating revenue,
`containing costs
`With the success of Tracleer',
`Actelion is generating the neces-
`sary revenues to sustain such
`strong and far-reaching clinical
`
`and preclinical programs. Through-
`out the year 2002, Actelion man-
`agement renewed our commitment
`to expand the company through
`internal efforts, We believe that
`the potential of endothelin recep-
`tor antagonism in general and the
`compounds Tracleer° and Veletri'
`in particular possess the necessary
`potential for further breakthroughs
`beyond those already achieved in
`the treatment of PAR
`
`This decision has also been made
`in view of Actelion's commitment
`to reach profitability in 2004 and
`maintain it thereafter. Throughout
`the year, while investing appropri-
`ately in future growth opportuni-
`ties, management has made every
`effort to ensure that expenses are
`controlled in this important expan-
`sion phase, both by strengthening
`our internal budgeting and
`accounting systems as well as by
`fostering cost consciousness
`throughout the company. As a con-
`sequence, Actelion reduced its net
`loss to CHf 40.8 million in 2002.
`Barring unforeseen eve-its, the
`company will start reporting prof-
`itable quarters during the year
`2003.
`
`Actelion represents a new breed of
`biopharmaceutical company that
`marries the best attributes of the
`biotechnology and pharmaceutical
`industries - employing biotech
`innovation, speed and flexibiii'y in
`concert with pharma disciplines in
`drug development and marketing.
`
`Together with our bottom-line ori-
`ented approach, this has made
`Actelion an attractive employer for
`professionals from both worlds.
`We continue to attract motivated
`and highly talented people due to
`our stable organizational structure
`and innovation driven corporate
`culture, which encourages scientif-
`ic progress and commercial
`prowess.
`All of these achievement,, would
`not have been possible without a
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 4 of 58
`
`

`

`Quality in research, development
`and marketing
`
`Actelion Annual Report ?002 5
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 5 of 58
`
`

`

`Messase to Shareholders
`status
`Development
`Drug D scovery Research
`People
`_- Financial Review
`
`..
`
`03
`os ,
`10
`
`jj
`
`14
`16
`-T8
`
`h-1
`
`Foundation for
`long-term growth
`
`The successful launch of Tracleer",
`which began in the United States
`and Canada in December 2001 and
`expanded to Europe in 2002, has
`established Actelion as the world
`leader in endothelin science.
`Tracleer® (bosentan), the first oral.
`ly available dual endothelin recep-
`tor antagonist, is already being
`used by 5,000 patients for treat-
`ment of pulmonary arterial hyper-
`tension (PAH) - a rare disease that
`has an "orphan drug" designation.
`With sales revenues of CHF 121.8
`million, Tracleer° has become one
`of the most successful drug
`launches ever from a biopharma-
`ceutical company, a mere five
`years after Actelion's founding.
`The rapid growth in sales also
`highlights the long-term potential
`of Tracleer' in PAH
`
`This remarkable achievement is
`based on Actelion's simple but
`effective approach - great people
`bringing a great product to patients
`and physicians who desperately
`need it. Actelion has played a
`major role in increasing awareness
`of PAH in the medical community,
`assisting physicians in understand-
`ing the complexity of its diagnosis,
`and educating prescribers and
`patients on the effective and
`appropriate use of Tracleer",
`
`Actelion has made substantial
`progress in making Tracleer" avail-
`able in all key markets worldwide.
`In Australia, approval for Tracleer"
`was obtained in late 2002 and
`reimbursement discussions initiat.
`ed, with launch planned for 2003.
`In Japan the enrollment of an effi-
`cacy-bridging study was completed
`and preparations were made for a
`New Drug Application MA) to be
`filed in spring 2003.
`
`New clinical trials initiated in the
`past year have broadened
`Actelion's medical experience with
`
`Tracleer". These studies are
`expected to become the basis for
`new indications for the use of
`
`Tracleer Actelion has also gener-
`ated and reported to regulatory
`authorities worldwide data about
`the use of the drug in the market.
`place. Both clinical trials and post-
`marketing surveillance have fur-
`ther strengthened the body of evi-
`dence indicating that Tracle?r" -
`with appropriate monitoring of
`liver enzymes and pregnancy
`avoidance messaging - is an
`effective medicine for the treat.
`ment of PAH,
`
`Actelion's success as a company is
`also the result of its decision to
`keep full marketing rights for
`Tracleer' in key countries. While
`the brand name, the logo an9 the
`medical information about the
`product are the same worldwide,
`the marketing strategy is imple-
`mented locally according to local
`standards and customs. The suc-
`cess of this business model
`allowed Actel ion to license in
`Zavesca® (miglustat), an "orphan
`drug" developed by Oxford Glyco-
`Sciences (OGS) for the treatment
`of lipid-storage disorders,
`
`_
`
`i racae-er--'s worldwide
`-
`6a L_21--_arketing_
`__
`44
`Z United States
`;:Tracleer" first introduced i.1 this
`v market in December 2001
`Actelion US successfully
`reached out to physicians as
`.Joel! as patients
`-
`b: _e...
`rslctlve participation in all major
`"cardiology, pulmonology arid
`rffe-umatology congresses (ACC,
``::ISHL ATS, ACR, CHEST and
`-- AHA) with symposia highlighting
`,Tracleer" in primary PAH arid
`-BAH related to scleroderma
`t,'(dass III and IV)
`` Focused activities on PAH cen-
`ters of excellence, scleroderma
`IOfrters, teaching hospitals and
`mnimunity-based pulmono o-
`,-cardiologists and rheima-
`r:
`:toragists
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 6 of 58
`
`

`

`'r
`
`ctelicn US
`Yiored with
``m ifu "Corporation of
`Year Award" from
`` Me Pulmonary Hypertension
`LssociaUon (PHA) and the "Cor
`On Leadership Award" from
`the National Organization for
`Rae Disorders (NORD) for the
`development of Tracleer'
`x_-,ccessful implementation of
`r
`unique Tracleer' Access Pro-
`-gam (W), which facilitates
``ply rlbing and reimbursement
`-fcs physicians and patients, and
`ensures appropriate safety
`measures are taken
`
`F.urope
`Tracleer'received marketing
`auCiorization in the European
`Union for all 15 EU member
`states, The marketing authoriza-
`Udr was also recognized by Nor-
`way and Iceland
`Market introductions started in
`Jura w-th the launch of Tracleer'
`fn-Fie UK and Germany
`Implementation of the post-mar-
`kethg surveillance project TRAX
`PtvTS to collect demographic
`infc-mation on Tracleer®
`patients
`Launch of the educational web-
`site www.TRAXglobal.com,
`wh1::h gives healthcare profes-
`sfomr ils easy access to important
`Infoi ma _ion about definition,
`diagnosis and treatment of PAH
`By e-id of 2002, Actelion opera-
`tions were marketing and sup-
`porting Tracleer° in Austria,
`Fran.e, Germany, Greece, Ire-
`land Italy, Spain, Sweden,
`Switzerland and the UK
`In early 2003, Tracleer° to be
`marketed in Belgium, Denmark,
`Iceland, Luxembourg, The
`Netherlands, Norway and Portu-
`gal
`
`Canada
`Follonzing regulatory approval in
`December 2001, Tracleer® was
`successfully launched across
`Canada. 3y the end of 2002, all
`
`Canadian provinces had granted
`reimbursement for Tracleer® - a.
`-remarkable achievement by
`industry standards
`
`..Australia
`. In October 2002, Australia's
`,,.-Drug Evaluation Committee
`1ADEC) recommended Tracleer®
`for the treatment of PAH in
`adults and children
`Very strong link established with
`the physician and patient com-
`munity through a well-received
`compassionate-use program
`By end of 2002, there were
`already over 100 Australian
`patients enrolled, including
`many children
`Reimbursement discussions con-
`tinue and launch is planned for
`2003,
`
`.Japan
`Affiliate established
`Tracleer° efficacy-bridging study
`with over 20 patients enrolled
`Tracleer° successfully passed
`the evaluation for designation
`as an "orphan drug" at the First
`Committee on Drugs of Pharma-
`ceutical Affairs Council
`NDA for Tracteer* to be filed in
`spring 2003
`
`Others
`In Israel, where Tracleer' is
`licensed to Neopharm: the prod-
`uct was registered in mid-2002
`and launch is planned for early
`2003 after successful conclusion
`of reimbursement discussions
`Actelion Brazil established
`Other regions such as Eastern
`Europe, Southeast Asia and
`Latin America are under evalua-
`Lion
`
`Endothelin, the molecu-
`lar target of Tracleer
`Tracleer' represents the first and
`only approved drug of a new phar-
`maceutical class that blocks the
`detrimental effects of endothelin
`(ET). Tracleer' is an orally active
`dual endothelin receptor antago-
`nist (ERA), It works cy blocking the
`binding of ET to bot:r of its recep-
`tors, ETA and ETj, thereby prevent-
`ing the deleterious effects of ET.
`Levels of ET are often elevated in
`certain disease sett ngs. ET is pro-
`duced and secreted by the
`endothelium, a single layer of cells
`covering the inner surface of blood
`vessels that regulate blood flow by
`causing blood vessels to narrow
`(vasoconstriction), In addition to
`vasoconstriction ET has other
`deleterious effects, such as stiff-
`ening blood vessels by promoting
`the accumulation of connective tis-
`sue (fibrosis), changing the ves-
`sel's shape (remodeling) and size
`(hyperaophy) and predisposing
`them to inflammation. The over-
`production of ET as a key patho-
`genic mediator prays a critical role
`in chronic diseases such as pul-
`monary arterial hypertension, con-
`nective tissue diseases (e,g.
`scleroderma), pulmonary fibrosis
`and acute heart failure, where it
`has been shown to correlate with
`the disease's severity.
`
`Endothelin (ET) is a key
`pathogenic mediator, which,
`in addition to vasoconstric-
`tion, has direct deleterious
`effects that include fibrosis,
`vascular hypertrophy and
`inflammation. Overexpres-
`sion of ET plays a critical
`role in diseases such as pul-
`monary arterial hypertension
`(PAH). Tracleer', the orally
`active dual endothelin
`receptor antagonist (ERA),
`"loosens the grip" of ET by
`blocking its pathological
`effects.
`
`Tracleer' - The new
`cornerstone of PAN
`treatment
`Pulmonary arterial hypertension
`(PAH) is a chronic, life-threatening
`disorder characterized by abnor-
`mally high blood pressure in the
`arteries between the heart and
`lungs of an affected individual. The
`function of the heart and lungs is
`severely compromised, manifested
`by a limited exercise capacity, and,
`ultimately, a reduced life eypectan-
`cy. Approximately 100,000 people
`in Europe and the United States
`are afflicted with either primary
`PAH or secondary forms of the
`disease related to conditiors or
`tissue disorders that affect the
`lungs, such as scleroderma, lupus,
`HIV/AIDS or congenital heat dis-
`ease.
`
`Actelion Annual Report 100217
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 7 of 58
`
`

`

`'.
`
`Message to Shareholders
`ct Sta_t_us,
`Pr,_o
`Development
`2scovery Rese
`D
`pen re
`-: Financial Review
`
`h
`
`w.,....... w--.`
`
`Af.telion Annoal Report 2002
`
`03
`
`10
`14
`16
`18
`
`Actelion offers patients like
`Claudia Wochner and their
`physicians an effective treat-
`ment in PAN.
`
`The first signs of PAH, such as mild
`shortness of breath (dyspnea),
`fatigue and difficulty exercising,
`are so subtle that the disease is
`often either misdiagnosed or not
`diagnosed at all until the patient's
`condition is far advanced. Amil-
`able studies show that, if the dis-
`ease is left untreated, between
`45% and 60% of PAH patients
`will die within two years of diag-
`nosis.
`
`Tracleer® is the only oral ERA
`approved for the treatment of PAH.
`Prior to the availability of
`Tracleer'", patients who had
`reached more advanced stags of
`PAN often had no choice but to go
`on prostacyclin therapy. This
`requires a 24-hour infusion pump
`and an intravenous line implanted
`through the chest directly into the
`patient's pulmonary vein, Ultimate-
`ly, many patients require lung
`transplantation.
`
`Unique competitive
`situation
`Since endothelin (ET) plays a lun-
`damental role in the development
`of several diseases, other compa-
`nies are continuing or starting the
`development of endothelin recep-
`tor antagonists. These are eitl er in
`the early stages of development or
`have faced setbacks during the
`year under review. Actelion's
`Tracleer° has been developed as
`the first oral ERA, specifically lar.
`geting ET receptors as pathogenic
`mediators. As a dual ERA, blocking
`both ET receptors, ETA and ETe,
`Tracleer® has a unique potential
`compared to selective agents cur-
`rently in development, which only
`block receptor type ETA.
`
`The use of prostacyclin
`(epoprostenol), a potent endoge-
`nous vasodilator, as a treatment. of
`PAN is supported by a decreased
`level of prostacyclin in the pul-
`monary arteries of patients with
`PAH. Epoprostenol, an agent with
`a very short half-life, has to be
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 8 of 58
`
`

`

`Improving the quality of life
`
`giver by continuous intravenous
`infus on. In the past few years,
`efforts have been made to simplify
`the administration of prostacyclins.
`In 2002, a continuous subcuta-
`neous infusion of Treprostind
`(Remtdulrn") by mini-pump
`became available in the United
`States. ana Canada. In Europe,
`effort,, ha,4e begun to register an
`inhale J form of prostacyclin (Ilo-
`prost) Also in 2002, development
`in PAH was initiated for the PDE-5
`inhibitir s ldenafil (Viagra").
`
`Raising awareness
`about the disease
`Since Actelion began preparations
`for the launch of Tracleer" in 2001,
`the awareness of PAH has grown
`enormr usly among the medical
`commrnity and media. Our market
`ing messages have focused on
`early identification and treatment
`of PAI-I Tra-leer was immediately
`accepted by experienced PAH
`physicians as first-line therapy for
`symptomatic PAN patients. Since
`then, the referral and prescriber
`base coitinues to expand, sug-
`gesting long-term growth for
`Tracleer" in the marketplace in the
`years tc come. In 2002, we suc-
`cessfulfr increased our educational
`efforts worldwide, reaching out to
`the manl physicians who are car-
`ing for patients at high risk of PAH
`and emphasizing the need for
`screenir g, e-rrly diagnosis and
`effective treatment.
`
`New hope for patients
`Tracleer offers PAH patients, for
`whom even routine breathing is a
`challenge, an efficacious treat-
`ment in a convenient oral form.
`Tracleer" improves exercise capac-
`ity, increiisinr the ability to per
`form daily activities without
`becornim, short of breath - which
`means a, Iramatic improvement in
`the patient's quality of life.
`
`Thirty nin) year-old Claudia
`Wochner Nas a passionate skier
`until she Wdoenly recognized that
`
`she became short of breath very
`quickly during her downhill runs.
`from then on, her physical condi-
`tion worsened rapidly. "It was
`frightening to see that I wasn't
`able to perform even minor house-
`hold activities. When my little
`daughter romped around the
`house, I couldn't keep up with her
`anymore. I was completely out of
`breath."
`
`Claudia was lucky that her family
`doctor was quick to refer her to a
`lung specialist, who diagnosed
`PAH and started to treat her with
`Tracleer'. Since then, her exercise
`capacity has improved step by
`step. "Although my doctor tells me
`that I still have to take it easy
`because of my health, I already
`dream about skiing together with
`my family."
`
`Adding valuable clinical
`data
`The approval of Tracleer" has been
`supported by two successful clini-
`cal studies, both of which were
`published in The Lancet and The
`New England Journal of &Aedione.
`Actelion has continued during the
`year under review to add to this
`important body of clinical informa-
`tion to support the use of Tracleer'°
`in the marketplace,
`
`In 2002, the results of a preliminary
`analysis of the clinical trial
`BREATHE-2 (Bosentan: Randomized
`Trial of Endothelin Receptor Antag
`onist THErapy) were disclosed. The
`study evaluated the safety and effi-
`cacy of oral Tracleer" in adult
`patients suffering from PAH in com-
`bination with the initiation of intra-
`venous epoprostenol. The combina
`tion of Tracleer" and the initiation
`of intravenous therapy with
`epoprostenol was well tolerated
`and showed a strong trend toward
`a greater improvement in car-
`diopulmonary hemodynamic
`parameters, compared to those
`receiving epoprostenol alone.
`These data are important for all
`
`patients on intravenous therapy
`and physicians considering addi-
`tional therapeutic options.
`
`The BREATHE-3 trial involved chil-
`dren with PAH receiving either
`Tracleer" alone or in combination
`with long-term epoprostenol thera-
`py. BREATHE-3 was designed to
`evaluate the pharmacokinetics,
`hemodynamics and tolerability of
`Tracleer" in children under the age
`of 17 suffering from PAN, either
`primary pulmonary hypertension or
`related to congenital heart dis-
`ease. Results from BREATHE 3,
`disclosed in 2002, indicated that
`treatment with Tracleer" alone,
`and in combination with intra-
`venous epoprosteno , was well tol-
`erated and improved important
`hemodynamic parameters in chil-
`dren with PAH.
`
`The company has also initiated
`BREATHE 4, an open label study to
`evaluate how Tracleer" can be best
`used in patients whose PAH is
`related to their infection with the
`human immunodeficiency virus
`(HIV).
`
`Monitoring for drag
`safety
`In clinical trials, approximately
`11 % of PAN patients receiving
`Tracleer® experienced abnormal
`but reversible liver enzyme eleva-
`tions. It is therefore important that
`patients undergo monthly liver
`monitoring. Due to the risk of birth
`defects, women who are pregnant,
`or who are of childbearing age and
`do not use a reliable method of
`contraception, should not lake
`Tracleer
`
`In order to ensure adherence to
`these guidelines, Actelion has
`developed, together with health
`authorities, a closed distrit ution
`system (US) or a post-rnarkating
`surveillance system (EU) to market
`the drug. Both approaches ,allow
`Actelion to continuously remain in
`contact with treating physicians
`and their patients to remind them
`about the importance of adhering
`to these safety guidelines.
`
`F
`P ZAV ESCA0100mg
`Hard capsules (miglustat)
`
`Launch of Zavesca`
`The worldwide marketing, distribu-
`tion and monitoring capabilities
`that Actelion has created are
`attracting new business opportuni-
`ties. In 2002, the company
`obtained a license to develop the
`exciting commercial potential of
`Zavesca" (m glustat), a small mole-
`cule oral therapy developed by
`Oxford GlycoSciences Plc (OGS) for
`the treatment of type 1 Gaucher's
`disease. This rare lipid storage dis-
`order causes an enlargement of
`spleen and liver, bone disease and
`anemia. Before oral Zavesca", the
`only existing etiologic treatment
`for this debilitating disease was
`
`an intravenous enzyme replace-
`ment therapy, which is unsuitable
`for some patients. In November
`2002, the European Commission
`granted marketing authorization
`for Zavesca". Actelion started the
`market introduction in the Euro-
`pean Union, beginning with tiie UK
`on March 3rd 2003. In the US. OGS
`received a non-approval letter from
`the food and Drug Administration
`(FDA) earlier in 2002. In subs(!
`quent discussions between 0 IS,
`Actelion and the FDA, the compa-
`nies intend to submit an amend-
`ment to the original New Drug
`Application (NDA) for Zavesca" in
`Ql 2003.
`
`Actelion Annual Report 2002 19
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 9 of 58
`
`

`

`Development
`
`io
`
`The determined efforts of our clinical development teams helped
`Tracleer' reach the market in only 26 months.
`
`10 A(telii )n Annual Report 2002
`
`In 2002, Actelion successfully
`strengthened its global reach by
`proving its skills in regulatory
`affairs as well as sales and mar-
`keting. The company expanded its
`development capabilities, capital-
`izing on the company's knowledge
`about the involvement of the
`endothelin system in various dis-
`eases, while simultaneously
`preparing for clinical programs
`with new compounds from
`Actelion's research efforts.
`
`Actelion continues to manage its
`products through life cycle teams
`with the goal of rapidly moving a
`drug from inception to in tial com-
`mercialization and then to global
`sales. New indications for existing
`drugs and new drugs in new indi-
`cations will allow Actelion to grow
`
`above and beyond the significant
`peak-sales potential of Tracleer* in
`PAH, currently estimated at
`between USE) 400 and 500 miVion,
`
`A strong development function is
`key to ensure that a drug's poten-
`tial is appropriately profiled in
`well-defined and executed clinical
`trials that satisfy the highest scan
`dards in the industry. With this in
`mind, Actelion has built up a
`development department staffed
`by professionals with years of
`experience in the pharmaceutical
`industry. Their efforts in the
`BREATHE studies have allowed
`Tracleer" to reach the market in a
`record time of less than 26 months
`after the first of two pivotal stu J-
`ies were initiated.
`
`WATSON LABORATORIES, INC. , IPR2017-01622, Ex. 1063, p. 10 of 58
`
`

`

`Promising clinical data
`
`Actelion s development efforts
`have concentrated on enlarging
`the potential indications for Tra-
`cleer' in other endothelin-related
`diseases (digital ulcerations, pul-
`monary fibrosis, metastatic
`melanoma) as well as evaluating
`the right dosing regimen for the
`company's intravenous dual
`endothelin-receptor antagonist
`Veletr ', which began evaluation in
`a Phase III program as a potential
`agent for the treatment of acute
`heart failure (AHF) in late 2002.
`
`PAH as a complication
`of scleroderma
`Pulmonary arterial hypertension
`(PAH) is a frequent and often fatal
`complication of scleroderma, an
`autoirn-nune disease afflicting up
`to 200,000 patients worldwide. In
`these patients, endothelin acts as
`a pathogenic mediator, not only
`leadine to PAH, but also at least
`two other major complications of
`scleroderrna, pulmonary fibrosis
`and dig tai ulcerations,
`
`In order to address the potential of
`Tracleer® in scleroderma, Actelion
`has cho3on a development pro
`grain to establish the effect of the
`drug in each complication. With
`PAH already approved, Actelion
`has moved its focus to digital
`ulceration, with a first study con-
`cluded in summer 2002. During the
`same year, Actelion began thor-
`ough discussions with key physi-
`cians on its clinical trial plans for
`Tracleer" in pulmonary fibrosis
`related t) scleroderma. First stud-
`ies will Le initiated in early 2003.
`
`Preventing and treating
`digital ulcerations
`Systemic sclerosis (scleroderma),
`an autoir-hmune rheumatic disease,
`is characterized by an increased
`accumult:tion of connective tissue
`in skin ar d internal organs as well
`as vascular it jury and damage.
`Endotheln, as a pathogenic media-
`tor, is imflicared in the vascular
`damage. Complications in sclero-
`
`derma, including pulmonary arteri-
`al hypertension (PAH) and digital
`ulcers, are the result of vasculopa-
`thy (vascular dysfunction).
`
`Digital ulcerations are a common
`complication of scleroderma,
`occurring in 25% or more of
`patients, with approximately 5,000
`severe cases worldwide. A result
`of the blockage of small blood ves-
`sels (obliterative vasculopathy),
`digital ulcers are very painful and
`difficult-to-heal open sores that
`occur on fingers and toes. They
`often lead to infections, leave
`depressed scars and adversely
`impact the ability to perform work
`and daily activities. In severe
`cases, gangrene develops, which
`requires surgery and even amputa-
`tion.
`
`In 2002, Actelion conducted an
`international, multi-center, double-
`blind, placebo-controlled clinical
`trial called RAPIDS-1 (RAndomized
`Placebo-controlled investigation of
`Digital ulcers in scleroderma). The
`study evaluated whether treatment
`with Tracleer0 could prevent the
`occurrence of new ischemic digital
`ulcers in patients with scleroder-
`ma.
`
`The results of RAPIDS-1, present-
`ed in the late breaking session of
`the American College of Rheurna
`tology in New Orleans, showed
`that patients with existing ulcers
`taking Tracleer' developed half as
`many new digital ulcers per
`patient as those treated with
`placebo. In this high-risk group,
`the proportion of patients that did
`not develop new ulcers during the
`trial was also greater in the treat-
`ment group. In addition, the
`patients treated with Tracleer'
`had a significant improvement in
`hand functionality such as their
`ability to dress and to wash their
`hands and hair.
`
`Actelion is currently engaged in
`discussions with regulatory author.
`
`ities worldwide to decide on the
`appropriate design of the next trial
`in digital ulcerations. The new
`study, called RAPIDS-2, is expect-
`ed to commence in the second half
`of 2003. In the meantime, Actelion
`has initiated the process of apply-
`ing for "orphan drug" status in this
`indication in both the United
`States and Europe.
`
`Tracleer°' in other fibrot-
`ic diseases
`In 2002, Actelion also focused on
`development opportunities for
`Tracleer' in other endothelin-relat
`ed diseases such as pulmonary
`fibrosis, a progressive lung disease
`that is usually fatal. The idiopathic
`form (no known cause) of pul-
`monary fibrosis (IPF) afflicts some
`100,000 patients worldwide.
`
`In early 2003, as part of its clinical
`trial program to expand the use of
`Tracleer'", Actelion initiated two
`studies, BUILD-1 and 2 (Bosentan
`Use in interstitial Lung Disease),
`One study addresses the idiopathic
`form of the disease and the other
`study addresses pulmonary fibrosis
`related to systemic sclerosis
`(scleroderrna). Actelion has chosen
`an innovative trial design, using a
`walking test as the primary end-
`point of the studies. First results
`are expected in 2005.
`
`Endothelin in interstitial
`lung diseases
`Many acute and chronic lung disor.
`ders with variable degree; of pul-
`monary inflammation and fibrosis
`are collectively referred Lo as inter-
`stitial lung diseases (ILD). These
`diseases can be associated with
`underlying conditions such as sys-
`temic sclerosis. More thar 75% of
`these patients develop pulmonary
`fibrosis, with one million cases
`worldwide.
`
`In IPF and in ILD caused by sclero-
`derma, inflammation and accumu-
`lation of connective tissue (fibro.
`sis) in the lungs destroys structure
`and function of the respiratory sys-
`tem. Endothelin has major pro.
`fibrotic and pro-inflammatory
`effects. Since endothelin concen
`trations are strongly elevated in
`1LD, there is solid evidence that
`endothelin might be involved in
`these diseases as well. Encothelin
`receptor antagonism, therefore,
`may be an effective therapeutic
`strategy.
`
`Tracleer" in cancer
`In the first quarter of 2003, Actelion
`will initiate a first series of studies
`with Tracleer' in malignant
`(metastatic) melanoma. Several
`pre-clinical experiments have
`shown that in malignant
`
`Growing Actel