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` UNITED STATES DISTRICT COURT
` FOR THE DISTRICT OF NEW JERSEY
` HORIZON PHARMA, INC., and
` POZEN, INC., Civil Action Nos:
` Plaintiffs, 3:11-02317 (JAP) (DEA)
` vs. 3:13-00091 (JAP) (DEA)
` DR. REDDY'S LABORATORIES, (Consolidated for
` INC., AND DR. REDDY'S discovery purposes
` LABORATORIES, LTD., with Civ. A. Nos.
` Defendants. 3:11-cv-04275 (JAP)
` (DEA), 3:11-cv-04022
` (JAP)(DEA) and
` 3:13-cv-03038
` (JAP)(DEA)
`(Caption Continued on Page 2)
`_______________________________
`
` Confidential
`
` Video Deposition of Dr. John R. Plachetka
`
` Wednesday, January 24, 2018
`
` At 9:15 a.m.
`
` Chapel Hill, North Carolina
`
`Reported by LeShaunda Cass-Byrd, CSR, RPR
`TSG Job No. 135843
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` UNITED STATES DISTRICT COURT
` FOR THE DISTRICT OF NEW JERSEY
` HORIZON PHARMA, INC., and
` POZEN, INC., Civil Action Nos:
` Plaintiffs, 3:11-02317 (JAP) (DEA)
` vs. 3:13-00091 (JAP) (DEA)
` DR. REDDY'S LABORATORIES, (Consolidated for
` INC., AND DR. REDDY'S discovery purposes
` LABORATORIES, LTD., with Civ. A. Nos.
` Defendants. 3:11-cv-04275 (JAP)
` (DEA), 3:11-cv-04022
` (JAP)(DEA) and
` 3:13-cv-03038
` (JAP)(DEA)
`(Caption Continued on Page 2)
`_______________________________
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` Confidential
`
` Video Deposition of Dr. John R. Plachetka
`
` Wednesday, January 24, 2018
`
` At 9:15 a.m.
`
` Chapel Hill, North Carolina
`
`Reported by LeShaunda Cass-Byrd, CSR, RPR
`TSG Job No. 135843
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`TSG Reporting 877-702-9580
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`(Caption Continued)
`HORIZON PHARMA, INC.,
`And POZEN, INC, Civil Action No.
` Plaintiffs 3:13-cv-04022 (JAP) (DEA)
`Vs.
`MYLAN PHARMACEUTICALS INC.,
`MYLAN LABORATORIES LTD.
`And MYLAN INC.,
` Defendants.
`HORIZON PHARMA, INC., and Civil Action No.
`POZEN, INC., 3:13-cv-03038 (JAP)(DEA)
` Plaintiffs,
`Vs.
`ACTAVIS LABORATORIES FL, INC.
`And ACTAVIS PHARMA, INC.,
` Defendants
`HORIZON PHARMA, INC., and Civil Action No:
`POZEN, INC., 3:11-cv-04275 (JAP) (DEA)
` Plaintiffs
`Vs.
`LUPIN LTD AND LUPIN
`PHARMACEUTICALS, INC.,
` Defendants
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` APPEARANCES OF COUNSEL:
`
` On behalf of Plaintiff Horizon Pharma, Inc. And
` Horizon Pharma USA, Inc.
` SUSAN KRUMPLITSCH, Esq.
` Cooley
` 3175 Hanover Street
` Palo Alto, California 94304
`
` NELSON ALEXANDER, Esq.
` HorizonPharma
` 150 South Saunders Road
` Lake Forest, Illinois 60045
` On behalf of Dr. Reddy's Laboratories, Inc.:
` DMITRY SHELHOFF PH.D., Esq.
` Budd Larner
` 150 John F. Kennedy Parkway
` Short Hills, New Jersey 07078
`
` On behalf of Mylan Laboratories;
` MELODY GLAZER, Esq.
` Perkins Coie
` One East Main Street
` Madison, Wisconsin 53703
`
` Also Present: Julius Bolton
` Videographer
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` I N D E X
` By Mr. Shelhoff 7
` DEPOSITION EXHIBITS
` EXHIBIT DESCRIPTION PAGE
` Exhibit 22 Results of Search in US Patent
` Collection db for: IN/Plachetka and
` IN/John 34
` Exhibit 23 Subpoena to Produce Documents,
` Information or Objects or to Permit
` Inspection of Premises in a Civil
` Action, dated December 19th, 2017 40
` Exhibit 24 Form 8K from Aralez Pharmaceuticals,
` Inc., to the United States Securities
` And Exchange Commission 47
` Exhibit 25 Assignment, Bates Numbers PZC_00021021
` Through PZC-00021022 117
` Exhibit 26 Dr. Plachetka's Privilege Log 119
` Exhibit 27 U.S. Patent Number 8,206,741 134
` Exhibit 28 Declaration filed in the persecution
` Application Number 12/553,107, Bates
` Number PZC_00013279 to PZC_00013299 174
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` Exhibit 29 Declaration (37 CFR 1,63) for Utility
` Or Design Application using an
` Application Data Sheet (37 CFR 1,76),
` Bates Numbers HZ 209246 to HZ 209249 212
` Exhibit 30 Publication in Gastroenterology,
` April 2008, Volume 134, No. 4,
` Supplement 1 214
` Exhibit 31 E-mail from John Plachetka and others,
` Dated Friday, March 30th, 2001 219
` Exhibit 32 Frequently Asked Questions about
` PN-40020, Bates Numbers PZ 00013488
` Through PZ 00013495 220
` Exhibit 33 Poster 231
`
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` Dr. John R. Plachetka
` THE VIDEOGRAPHER: This is the start
` of tape labelled number 1 of the videotaped
` deposition of Dr. John R. Plachetka in the
` matter of Horizon Pharma, Inc., and Pozen,
` Inc., verus Dr. Reddy's Laboratories, Inc.,
` et al.
` This deposition is being held in
` Chapel Hill, North Carolina, on January
` 24th, 2018, at approximately 9:15 a.m. My
` name is Julius Bolton. I'm the
` videographer. The court reporter is
` LeShaunda Byrd.
` Will counsel please introduce
` yourself for the record.
` MS. KRUMPLITSCH: Susan Krumplitsch,
` Cooley, representing Dr. Plachetka and
` Horizon Pharmaceuticals. With me is Nelson
` Alexander also of Horizon Pharmaceuticals.
` MR. SHELHOFF: Dmitry Shelhoff from
` the law firm of Budd Larner representing
` Dr. Reddy's Laboratories and Dr. Reddy's
` Laboratories, LTD.
` MS. GLAZER: Melody Glazer of the
` firm Perkins Coie on behalf of Mylan
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` Dr. John R. Plachetka
` defendants.
` DR. JOHN R. PLACHETKA,
` having been first duly sworn, was examined and
` testified as follows:
` EXAMINATION
` BY MR. SHELHOFF:
` Q. Hello, Dr. Plachetka.
` A. Good to see you again.
` Q. So is there anything today that would
` prevent you from giving truthful testimony?
` A. No.
` Q. Okay. And just let's go over a briefly
` your background. You have a PharmD, correct?
` A. Yes.
` Q. And you worked for a number of years at
` Glaxo Pharmaceuticals, correct?
` A. Correct.
` Q. And at Glaxo Pharmaceuticals, you worked in
` decision development, correct?
` A. Yes.
` Q. What kind of productions did you work on at
` Glaxo?
` A. The very first product that I was involved
` with was a product to prevent or treat ulcers. It was
`
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` Dr. John R. Plachetka
` called Zantex, and then I worked in the cardiovascular
` section on a drug called Labetalol, which was the
` generic name. The trade name is Trandate.
` And another one that I don't remember the
` code name -- we had letters that didn't make it
` through commercialization -- but it was a calcium
` channel blocker and a thromboxane receptor antagonist,
` which was called GR 32191.
` I did a rotation through the commercial
` side of the business for a year. And then I came to
` head up the cardiovascular group again and developed a
` drug called Imitrex, which is a treatment for migraine
` headaches.
` Q. So would it be correct to say that the two
` main areas on which you focussed that Glaxo, in your
` research, was the gastrointestinal diseases and
` cardiovascular area?
` A. Yes, that is probably fair. Yes.
` Q. Okay. So and the last drug, Imitrex, does
` that contain Sumatriptan?
` A. It does contain Sumatriptan.
` Q. And that is a drug against migraine,
` correct?
` A. Right.
`
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` Dr. John R. Plachetka
` Q. What is the active pharmaceutical
` ingredient of Zantex?
` A. Ranitidine, R-A-N-I-T-I-D-I-N-E.
` Q. And does this belong to the class of the H2
` antagonist?
` A. It does.
` Q. When you left Glaxo, did you form Pozen as
` your company?
` A. No, I did not.
` Q. Can you -- can you explain what happens
` when you left Glaxo.
` A. I went to Kansas City to take on the
` responsibility of president and CEO for a contract
` research organization. And that -- the name of that
` company was Quincy Laboratories, and I did that for
` several years. And the activities that I undertook in
` that capacity were essentially a corporate turnaround.
` So the company, at the end of my time there, had a new
` facility and a new name. It was called Clinical
` Research Foundation of America.
` Q. In what role did you join Quincy?
` A. I'm sorry?
` Q. In what role did you join the clinical
` association in Kansas City that you just mentioned?
`
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` Dr. John R. Plachetka
` A. As president and CEO.
` Q. And did that organization engage in any
` research?
` A. Yes.
` Q. What kind of research?
` A. All types of research. We were a contract
` research organization. And so in the course of the
` time that I was there, we had experience with probably
` 50, 60 different compounds. Phase 1, Phase 2, Phase 3
` studies, laboratories studies, analytical work,
` laboratory analyses, statistical analyses.
` Essentially, everything that a pharmaceutical company
` needed on an outsource basis we delivered.
` Q. Can you name some of your clients?
` A. No.
` Q. Is it because of confidentiality?
` A. No. It's because it's, what, 27 years ago.
` I don't remember.
` Q. Okay. Well -- but any of the major names
` of pharmaceutical companies that you might be familiar
` with today, were any of those your clients?
` A. Very likely.
` Q. So you basically have no recollection about
` any of the -- of the clients that you had at that
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` Dr. John R. Plachetka
` time?
` A. I have no specific recollection.
` Q. Okay. Was Glaxo one of your clients?
` A. Very likely.
` Q. And what -- what did you do after the
` Kansas City association?
` A. I went to a company called Texas
` Biotechnology in Houston as the head of pharmaceutical
` development.
` Q. And what did you do there?
` A. Coordinated all of the pharmaceutical
` development for that company and administrative work.
` Participated in the initial public offering. I think
` that is it.
` Q. Do you recall what year Texas Biotech in
` Houston made a public offering?
` A. I don't know the year exactly.
` Q. Okay. How many years have you been there?
` A. I was there from, I think it was '93 until
` either late '95 or early '96.
` Q. Okay. Would you characterize some of the
` social activities that were going on in the direction
` at Texas Biotech as related to clinical research?
` A. Yes.
`
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` Dr. John R. Plachetka
` Q. Okay. And is it related to
` pharmacokinetics?
` A. Yes.
` Q. Okay. And what were the therapeutic areas
` in which Texas Biotech focussed on, the direction?
` A. Cardiovascular medicine.
` Q. And what did do you after Texas Biotech?
` A. Then I consulted for approximately a year
` while I was preparing the business plan to start up
` Pozen.
` Q. Was there anyone else who helped you
` prepare a business plan to start up Pozen?
` A. I had two individuals that I asked to come
` in, and they would read drafts of the business plan.
` But I was primarily the one who was drafting it.
` Q. And who were those individuals?
` A. One is deceased. His name is Joseph
` Ruvane. And the other gentleman is Dr. Peter Weiss.
` Q. Did they become -- was Pozen formed at that
` time, or not yet?
` A. You know, it's a tricky question because
` I'm not sure what you mean by formed.
` Q. Well, that -- that business plan
` development was the groundwork leading to subsequent
`
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` Dr. John R. Plachetka
` establishment of Pozen as a company, correct?
` A. Right.
` Q. Okay. So in those individuals that you
` just mentioned, when you said that you invited them,
` were they compensated at all for this work?
` A. Not initially, no.
` Q. Okay. So it was kind of like sweat equity?
` A. Uh-huh (affirmative).
` Q. Was it -- was there intention on your part
` to make them employees or partners in -- in Pozen,
` should that company be eventually formed?
` A. I was never intending to pay them. But for
` their contribution in helping me sort through the
` ideas, I gave them some of the founder stock.
` Q. And you gave them this stock after Pozen
` was formed?
` A. Again, what do you mean by formed?
` Q. Okay. At which -- who helped you as the
` financials of your company?
` A. I don't understand the question.
` Q. Well, the issue -- I guess the issue of
` founder stock, you have to have the instruments, the
` stock to give. How did you get that?
` A. We incorporated.
`
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` Dr. John R. Plachetka
` Q. Okay. And when you completed the business
` plan, what year was that approximately?
` A. It was probably '96.
` Q. And what year did you incorporate Pozen as
` a company?
` A. It was 1996.
` Q. And did you incorporate it here in North
` Carolina?
` A. No.
` Q. Where did you incorporate it?
` A. Delaware.
` Q. Okay. But the first offices were here in
` North Carolina?
` A. No.
` Q. Where were they?
` A. Texas.
` Q. Okay. And where -- where were they in
` Texas?
` A. They were in my house.
` Q. Okay. Which is what city?
` A. The Woodlands, Texas.
` Q. So who was the first employee of Pozen?
` A. I was.
` Q. I knew you would say that. But you were
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` Dr. John R. Plachetka
` kind of --
` A. Why would you ask me?
` Q. Weren't you like the CEO, though, and the
` owner and all of that?
` A. Well, I am not sure that we were -- we are
` all on the same page here. You know, starting up a
` company, when you start it in your house, you are
` watching your nickels and your dimes, right?
` Q. Right.
` A. So if -- if I could answer the phone or
` take out the trash, I got paid the same. It didn't
` matter.
` Q. Okay. When -- when -- who was the first
` employee of Pozen other than yourself?
` A. It was John Barnhardt.
` Q. And who was he?
` A. John Barnhardt was our administrative
` officer. I think he was -- I don't remember his
` initial title, VP of administration or something of
` that nature, VP of finance. John was a wonderful
` employee who helped get facilities here in North
` Carolina and do all the detail things to actuate the
` company run successful from a business perspective.
` Q. So how soon after 1996 you moved from Texas
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` Dr. John R. Plachetka
` to North Carolina?
` A. We moved in 1997.
` Q. Okay. And where did you get the offices?
` A. Initially, we camped out in some extra
` space that a company offered us. They had more space
` than they needed, so we were in their back room,
` basically. And I don't remember exactly how long we
` stayed. It was a typical startup store, though. We
` were there three or four months, and then we found
` some space eventually -- a small space and took over
` that space. But I -- I'm not recollecting the exact
` time frame. But we were only in the camp-out space
` probably for five or six months at the most.
` Q. Why did you decide to move from Texas to
` North Carolina?
` A. Because there were very talented people
` here in North Carolina, and it was going to be a
` business that depended for its success on talented
` scientific people in the pharmaceutical industry. The
` choices that we had were Boston, San Francisco, San
` Diego. We are a typical biotech startup and research
` triangle. And since I had already been here and knew
` a number of people in this area, this was a good
` choice for us as opposed to staying in Texas. My
`
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` Dr. John R. Plachetka
` experience at Texas Biotechnology was that it was
` quite difficult to get pharmaceutically-qualified
` people to go into the Houston area to work for a
` biotech company.
` Q. When you worked at Glaxo, you worked in the
` North Carolina campus?
` A. I did.
` Q. And it was here in this research triangle
` area?
` A. It was.
` Q. So the first offices of Pozen, were they in
` Chapel Hill?
` A. No.
` Q. Where were they?
` A. They were in Durham.
` Q. Okay. And after that, did you stay in
` Durham generally, or stayed in Chapel Hill? Like how
` many times did you move?
` A. Once.
` Q. Okay. And what was the final location for
` Pozen?
` A. Chapel Hill.
` Q. Chapel Hill.
` So was your first -- was Pozen's employee
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` getting a salary when he joined?
` A. I'm sorry?
` Q. Was -- was -- you mentioned a name of the
` first Pozen employee who was an administrative
` officer. Was -- did you pay him?
` A. Yes.
` Q. You paid him a salary?
` A. Yes.
` Q. And what -- what was the source of funds in
` which you could pay him a salary?
` A. I -- I don't recall. I think that Peter
` and Joe and I loaned the company money, maybe $100,000
` total. When I hired John, I had already talked to
` investors in Europe about funding the company, and I
` had commitments from them that they were going to fund
` the company. And so it was really just a matter of
` time before I felt confident enough that we were going
` to bring them in.
` I mean, it's a long time ago, so I could be
` confused on the dates. John may have been hired only
` after we got the commitments for the money. But it's
` very -- they are very closely related.
` Q. And do you recall who those investors,
` prospective investors in Europe were? What country
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` were they from?
` A. Some from Switzerland, some from France.
` Mostly from Switzerland. Several from the UK.
` Q. So how did you come upon them?
` A. I had a connection with an individual who
` introduced me to these particular investors, and I
` took a trip then to Europe to meet with these
` potential investors and described the business. And I
` guess they liked the idea because they committed to
` supply startup funds for the business.
` Q. And do you know what is the -- what was the
` background of those investors?
` And I mean, are they people connected to
` the pharmaceutical industry or --
` A. I think that at least one of them was, but
` some of the people who invested I never met. They
` were -- the money came through Swiss Banks, and the
` Swiss Banks protected the identity of the clients.
` And so I knew that it came from an account. And I met
` the person who managed the account, but I did not know
` whose money it really was.
` Q. So when you met with investors in Europe,
` was it more than one meeting?
` A. Yes. It was probably eight meetings,
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` eight, ten meetings. Something like that.
` Q. And the people with whom you met, what --
` how did they present themselves in terms of
` background? Was it from the pharmaceutical industry
` or you didn't?
` MS. KRUMPLITSCH: Objection to form.
` BY MR. SHELHOFF:
` Q. Yeah. Can you just describe those --
` how -- what did you -- what did you gather from
` meeting those people about their background?
` A. I don't recall a lot about -- one
` individual in particular had been connected with
` Sandoz, but in a financial capacity. Another
` individual had been connected to Sandoz in an
` administrative capacity. But I would say that the
` majority of the people were just bankers or money
` managers, people who I didn't know what their
` background was other than that they were potential
` investors.
` Q. When you speak of Sandoz, was that the
` Swiss division of Sandoz?
` Sandoz is a Swiss company?
` A. Well, again, I -- I can't characterize that
` accurately, because I don't know all of their
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` Dr. John R. Plachetka
` background. What was described to me is that they
` were -- they had a career at Sandoz.
` Q. So at the time, it was Sandoz in
` Switzerland?
` A. Well, Sandoz is a multinational. So I
` can't tell you that they were based in Switzerland or
` not.
` Q. Oh, okay.
` And did you give -- did you give any
` presentations -- I know you did, but let me rephrase
` the question.
` What is it that you told to those
` prospective investors upon meeting them about the
` business of Pozen and your business plan generally?
` A. The -- the typical presentation would be an
` overall high-level description of the way that I
` intended to create the business, run the business,
` develop the products and market the products.
` Q. Did you describe the -- the core ideas
` which would underline the products you were going to
` market?
` A. It would depend on the meeting. If I was
` talking to people who weren't technically adept or
` interested, then I wouldn't describe that. The
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` Dr. John R. Plachetka
` majority of the -- of the financial investor people
` were more interested in how much money we were going
` to need, how much money we were going to make and the
` return and when they were going to get liquidity.
` Q. Okay. So in terms of underlying
` technology, was it Pozen's business plan at the time
` to work in the area of combination formulations?
` A. No.
` Q. And what was the area?
` A. I'm sorry?
` Q. What was the area in which -- the
` technology area in which Pozen started developing at
` that time?
` MS. KRUMPLITSCH: Objection to the
` form.
` BY MR. SHELHOFF:
` Q. You can answer.
` A. Can you ask it again, please?
` Q. What -- what did you tell them you were
` going to do for them in terms of technology? What
` product were you going to sell?
` A. We were not going to sell any product.
` Q. What were you going to do?
` A. We were going to develop a product, license
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` Dr. John R. Plachetka
` that product to another company to sell. It was one
` of the very intriguing parts of the business plan that
` they liked. The nexus of our business was to
` essentially, develop and make money from
` pharmaceutical companies with a minimum amount of
` capital investment. So when we build our business, we
` outsourced virtually everything including marketing
` and sales. That was the plan. We did not plan to
` build factories. We did not plan to build
` laboratories. We did not plan to build toxicology
` facilities, and we did not plan to hire legends of
` people. We did not plan to do marketing and sales.
` And this structure of business was what was very
` intriguing to the investors because it was a highly
` leveraged, very efficient and extremely potentially
` lucrative business for their type of investment.
` Q. Is that -- is that Sandoz nowadays known as
` a paper company?
` MS. KRUMPLITSCH: Objection to form.
` THE WITNESS: Well, I always take an
` objection of that because I don't make
` paper. A lot of companies in Wisconsin
` make paper.
` BY MR. SHELHOFF:
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` Q. Well, let me put it this way. Does -- I
` understand the connotations which may arise from the
` term, but does this term exist now?
` A. I -- I don't agree with that term, and you
` would have to tell me what you mean by paper company.
` Q. Okay. The business model that you had for
` Pozen, is that an original business model that you
` came up with at the time?
` A. Yes.
` Q. Were you aware of any other company which
` followed the same similar business model?
` A. I am aware of some companies that tried to
` follow the business model.
` Q. So the idea to form Pozen came to you when
` you worked at the Glaxo?
` A. No.
` Q. When did it come to you?
` A. It came to me after I left Texas
` Biotechnology.
` Q. Well, what was most specifically the
` initial technology area that -- you described the
` business model. But what was the initial technology
` area that you envisioned for Pozen for -- for drug
` development?
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` A. It was going to be to create a suite of
` migraine products.
` Q. So wasn't Glaxo, though, developing
` Imitrex, Sumatriptan, at about the same time?
` A. No.
` Q. Did they complete their development of
` Sumatriptan?
` A. I'm sorry?
` Q. Did Glaxo complete the development of
` Imitrex in 1997?
` A. I believe it was on the market in all forms
` in that year, yes.
` Q. Okay. So were you going compete with Glaxo
` in the migraine market?
` A. Yes.
` Q. And by doing specifically what?
` MS. KRUMPLITSCH: Objection to form.
` BY MR. SHELHOFF:
` Q. What -- what was the -- what was the
` perceived sort of competitive handle that you thought
` of that would allow you to compete Glaxo's Imitrex,
` which was already on the market?
` A. That is a very good question. Glaxo's
` product, which I had developed for Glaxo, Imitrex, was
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` a wonderful product. It was for treatment of severe
` migraine headaches. It was available in an injectable
` form and oral tablet form and nasal form, but it had
` weaknesses. And although it provided wonderful
` relief, it, in some people, it didn't work and in
` other people it created side effects that were very,
` very troubling. In other people, it provided initial
` relief and an awful relapse syndrome that created a
` headache and a headache complex that was in fact
` described many times as being worse than the initial
` migraine headache, in addition to which it was
` extremely premium priced.
` And so after an analysis of the market and
` the promotional strategy that Glaxo had, I felt that
` there was a very strong opportunity to create products
` that would be available to treat less serious
` migraine, to treat migraines that were on the
` injectable scale, and also a product that was far
` superior to Imitrex by itself. And as -- as we
` developed the business plan, our idea was to create a
` vertically-integrated series of products that would
` treat mild, moderate and severe migraine all under the
` same flag, whereas, Glaxo only had a product for the
` severe end of the -- of the migraine.
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` So if you are looking at a migraine space
` that encompasses 10 percent of the population -- and
` it's generally, 10 percent across all populations
` whether it's European or United States -- Glaxo
` focussed on the severe attacks.
` Now, every migrainer has mild attacks, and
` in fact, every migraine headache starts as a mild
` headache before it gets to be severe. Our strategy
` was to provide something that was less potent than
` Imitrex but would be attractive enough to the patient
` and the physicians that they would use it initially
` and more quickly. One of the problems that Glaxo had
` in marketing Sumatriptan was because it was so
` expensive, people would not use it at the first sign
` of a migraine attack, which is when they should have
` used it because it was -- it was so valuable to them.
` So they would hold onto it, and it was so
` counterproductive because by the time they felt they
` really now needed
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