UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________
`
`MYLAN PHARMACEUTICALS INC.,
`Petitioner,
`
`v.
`
`BIOGEN MA INC.,
`Patent Owner.
`
`______________________________________________________
`
`Case IPR2018-01403
`Patent 8,399,514 B2
`______________________________________________________
`
`DECLARATION OF JOHN C. JAROSZ
`
`Biogen Exhibit 2202
`Mylan v. Biogen
`IPR 2018-01403
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`Page 1 of 112
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`TABLE OF CONTENTS
`INTRODUCTION ........................................................................................... 1
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`A. Assignment ............................................................................................ 1
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`B.
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`C.
`
`Qualifications ........................................................................................ 2
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`Compensation ........................................................................................ 3
`
`D.
`
`Evidence Considered ............................................................................. 4
`
`E.
`
`Summary of Opinions ........................................................................... 5
`
`
`
`BACKGROUND ............................................................................................. 5
`
`A.
`
`Tecfidera® .............................................................................................. 5
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`B. Marketplace ........................................................................................... 6
`
`1. Multiple Sclerosis ....................................................................... 6
`
`2. Multiple Sclerosis Treatment Options ........................................ 7
`
`3.
`
`Summary ...................................................................................13
`
`C.
`
`Patented Technology ...........................................................................13
`
` COMMERCIAL SUCCESS ANALYSIS .....................................................14
`
`A.
`
`Framework ...........................................................................................14
`
`1.
`
`2.
`
`Obviousness ..............................................................................14
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`Elements of Commercial Success .............................................15
`
`B.
`
`Analysis ...............................................................................................17
`
`1. Marketplace Performance .........................................................17
`
`2.
`
`Causal Nexus .............................................................................30
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` CONCLUSION ..............................................................................................36
`
`
`
`
`
`
`
`i
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`I, John C. Jarosz, hereby declare:
`
`
`
`INTRODUCTION
`
`A. Assignment
`
`1.
`
`I have been retained as an expert on behalf of Biogen MA Inc.
`
`(“Biogen”) in connection with the above-captioned inter partes review (“IPR”)
`
`proceeding before the U.S. Patent and Trademark Office Patent Trial and Appeal
`
`Board (“PTAB”).
`
`2.
`
`I understand that this IPR proceeding concerns claims 1-20 of
`
`Biogen’s U.S. Patent No. 8,399,514 (Ex. 1001, “the ’514 patent”). I understand
`
`that the claims of the ’514 patent are embodied in Tecfidera®, a product that
`
`Biogen markets and sells in the U.S. (Ex. 2061, ¶26.)
`
`3.
`
`I understand that the PTAB has instituted a trial on the petition of
`
`Mylan Pharmaceuticals Inc. (“Mylan”). I have been asked by counsel for Biogen to
`
`assess whether Tecfidera® has been a marketplace success, and whether such
`
`success is attributable to the inventions claimed in the ’514 patent. According to
`
`Daniel R. Wynn, M.D., whose opinions I have reviewed and considered, the
`
`current clinical use of Tecfidera is covered by the claims of the ’514 patent. (Ex.
`
`2061, ¶26.) Further, I understand that the ’514 patent is listed in the U.S. Food and
`
`Drug Administration’s (“FDA’s”) Orange Book in connection with Tecfidera®.
`
`(Ex. 2130.)
`
`4.
`
`This declaration summarizes the opinions that I have formed to date. I
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`may modify my opinions, if necessary and allowed, based on further review and
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`analysis of information provided to me subsequent to the filing of this declaration,
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`including that contained in or referenced by any testimony offered by Mylan.
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`B. Qualifications
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`5.
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`I am a Managing Principal of Analysis Group, Inc. (“AG”) and
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`Director of the firm’s Washington, DC office. AG is an economic, financial,
`
`strategy, and health care consulting firm with offices in Beijing, China; Boston,
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`MA; Brussels, Belgium; Chicago, IL; Dallas, TX; Denver, CO; London, UK; Los
`
`Angeles, CA; Menlo Park, CA; Montreal, Quebec; New York, NY; Paris, France;
`
`San Francisco, CA; and Washington, DC. AG provides research and analysis in a
`
`variety of business, litigation, and regulatory settings.
`
`6.
`
`I received my B.A. in Economics and Organizational
`
`Communications, summa cum laude, from Creighton University in Omaha, NE.
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`Thereafter, I was a fellowship student in the Ph.D. program in Economics at
`
`Washington University in St. Louis, MO. I completed most of the degree
`
`requirements, but left before finishing my Ph.D. degree. I ultimately was awarded
`
`an M.A. in Economics. I worked for some period after that and then enrolled in
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`law school at the University of Wisconsin in Madison, WI. From there, I received a
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`J.D. I am a member of the State Bar of Wisconsin, but have been on inactive status
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`for the past 33 years.
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`7.
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`I have spent my entire professional career as a practicing economist.
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`Almost all of my work has involved evaluating the economics of intellectual
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`property (“IP”) protection. The bulk of that work has dealt with issues of damages
`
`estimation, commercial success, FRAND compliance, injunctive relief, and
`
`antitrust violations. I have testified in over one hundred such matters.
`
`8.
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`Among other things, I have published articles in academic and
`
`professional journals, edited a treatise on IP licensing, given presentations and
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`speeches to a wide variety of groups, and taught classes at various graduate schools.
`
`9.
`
`Though our firm and I have been engaged in a wide range of
`
`industries, the largest amount of my work has been in pharmaceutical settings,
`
`where I have been involved in scores of matters. Those matters often deal with
`
`patient, physician, and payer decision-making, as well as supplier actions and
`
`reactions to competitive conditions.
`
`10. My resume is attached as Appendix 1. It describes all of my testimony
`
`(either in deposition or at trial), publications, and presentations.
`
`C. Compensation
`
`11. My firm bills Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`
`on a time-and-materials basis for my work and that of my colleagues. My
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`customary and usual hourly billing rate for the time spent consulting, which
`
`includes my study of pertinent issues and materials and which applies in this
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`3
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`matter, and any testimony I may give, is $800. I also have directed the efforts of
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`other staff members of AG, whose customary and usual hourly billing rates range
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`from $330 to $550. Our reasonable expenses are being compensated, and our
`
`compensation is not, in any way, dependent on the outcome of this proceeding or
`
`on the substance of my opinion.
`
`D. Evidence Considered
`
`12.
`
`In undertaking my study, I have considered information from a variety
`
`of sources, each of which is a type that is reasonably relied upon by experts in my
`
`field. Among other things, and critically, I have considered the Declaration of
`
`Daniel R. Wynn, M.D., and I had a conversation with Dr. Wynn on April 9, 2019.
`
`Further, I have relied upon my professional judgment and expertise, gathered and
`
`developed in many years of estimating damages, valuing/evaluating technology,
`
`and assessing commercial success and injunctive relief in intellectual property
`
`contexts.
`
`13.
`
`In connection with the opinions and conclusions contained in this
`
`declaration, I also considered pharmaceutical sales data provided by Symphony
`
`Health (“Symphony”). (Ex. 2108; Ex. 2109; Ex. 2111; Ex. 2112.) The dollar and
`
`unit sales that Symphony reports allows for comparisons across competing drugs
`
`and across time. This comparative information is extraordinarily useful to
`
`pharmaceutical companies in the real world, and to courts and panels in litigations
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`
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`4
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`addressing commercial success.
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`14. Appendices 2 through 16 provide a summary of the voluminous
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`Symphony data relating to Tecfidera® that I considered. I and others working under
`
`my direction prepared these appendices.
`
`E.
`
`Summary of Opinions
`
`15. Based upon review and analysis of the evidence that I have received to
`
`date, it is my opinion that the commercial embodiment of the ’514 patent in this
`
`proceeding, Tecfidera®, has been a marketplace success. Moreover, it is my
`
`opinion that this success, in large part, has been driven by the benefits of the
`
`inventions of the ’514 patent. As a result, the inventions of the ’514 patent have
`
`been a commercial success.
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`
`
`BACKGROUND
`
`A. Tecfidera®
`
`16.
`
`In 2011, Biogen Idec Inc. reported positive results from the first phase
`
`III (“DEFINE”) clinical trial and announced that “BG-12 [the drug that became
`
`Tecfidera®] has the potential to offer MS [multiple sclerosis] patients a highly
`
`effective oral treatment option with a strong safety profile.” (Ex. 2131 at 1.) In
`
`2012, Biogen Idec Inc. also announced positive results from a second phase III
`
`(“CONFIRM”) clinical trial. (Ex. 2061, ¶¶129, 131.)
`
`17.
`
`In February 2012, Biogen Idec Inc. submitted New Drug Application
`
`(“NDA”) No. 204063 to the FDA for marketing approval of Tecfidera®. (Ex. 2132
`
`
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`5
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`at 1.)
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`
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`18. Tecfidera®, a delayed-release capsule, received FDA approval on
`
`March 27, 2013 to treat patients with relapsing forms of multiple sclerosis (“MS”).
`
`(Ex. 2132 at 1, 8; Ex. 2133 at 1.) Tecfidera® was launched commercially in the
`
`U.S. in April 2013. (Ex. 2134 at 1.)
`
`19. Biogen markets Tecfidera® capsules in two strengths: a starting dose of
`
`120 mg twice a day, and a maintenance dose of 240 mg twice a day. (Ex. 2133
`
`at 1.)
`
`B. Marketplace
`
`20.
`
`I am not a medical doctor. Among other things, and importantly, I
`
`have considered the Declaration of Daniel R. Wynn, M.D. I provide the description
`
`below as background.
`
`1. Multiple Sclerosis
`
`21.
`
`I understand that MS is a progressive neurological disease affecting
`
`more than 2 million people worldwide and approximately 950,000 people in the
`
`U.S. (Ex. 2061, ¶10.) MS is a disease in which the body’s immune system attacks
`
`the central nervous system, which is made up of the brain, spinal cord, and optic
`
`nerves. (Ex. 2061, ¶11.) Common symptoms of MS include fatigue, loss of
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`balance, spasticity, numbness and tingling in the extremities, weakness, visual
`
`impairments, bowel and bladder dysfunction, sexual dysfunction, cognitive
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`
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`6
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`dysfunction, tremors, depression, problems with memory and concentration, and
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`anxiety. (Ex. 2061, ¶10.)
`
`22.
`
`I understand that the most common type of MS is relapsing-remitting
`
`MS (“RRMS”), which affects approximately 85 percent of people diagnosed with
`
`MS. (Ex. 2061, ¶15.) RRMS is characterized by clearly defined attacks (also
`
`called “relapses”) of new or increasing neurological symptoms, which are
`
`followed by periods of partial or complete recovery (remissions). (Ex. 2061,
`
`¶15.)
`
`2. Multiple Sclerosis Treatment Options
`
`23.
`
`I understand that disease-modifying therapies (“DMTs”) are
`
`medications that modify the course of MS by reducing the number of relapses and
`
`delaying progression of disability. (Ex. 2061, ¶23.) I understand that these
`
`therapies fall broadly into three categories: oral medications, self-injected
`
`medications, and infused (i.e., intravenous) medications. (Ex. 2061, ¶25.)
`
`a. Oral Medications
`
`24. Current oral medications approved to treat MS as DMTs include
`
`Tecfidera®, Gilenya®, and Aubagio®.
`
`25.
`
`In addition, the FDA approved Mayzent® (siponimod) and
`
`Mavenclad® (cladribine) on March 26 and March 29, 2019, respectively. (Ex.
`
`2135 at 1, 10; Ex. 2136 at 1, 7.) Due to their recent approvals, I do not include
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`Mayzent® and Mavenclad® in my data analysis below, because there are no
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`quarterly data available to me yet on their performance.
`
`(i) Dimethyl Fumarate (Tecfidera®)
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`26. As discussed above, Tecfidera® was approved by the FDA in 2013 to
`
`treat “patients with relapsing forms of multiple sclerosis.” (Ex. 2132 at 1, 8; Ex.
`
`2133 at 1.)
`
`(ii) Fingolimod (Gilenya®)
`
`27. Gilenya®, from Novartis, was approved by the FDA in 2010 to treat
`
`adult patients with “relapsing forms of multiple sclerosis.” (Ex. 2137 at 1.) In
`
`2018, Gilenya®’s label indication was expanded to include children and
`
`adolescents ages 10 years and older. (Ex. 2138 at 1.) No generic equivalent of
`
`Gilenya® is currently available in the U.S. (Ex. 2139.)
`
`(iii) Teriflunomide (Aubagio®)
`
`28. Aubagio®, from Sanofi, was approved by the FDA in 2012 to treat
`
`“patients with relapsing forms of multiple sclerosis.” (Ex. 2140 at 1, 27.) The FDA
`
`approved four generic equivalents to Aubagio® in late 2018 and early 2019,
`
`although none are yet offered for sale. (Ex. 2141 at 1; Ex. 2142 at 12, 25, 61.)
`
`(iv) Siponimod (Mayzent®)
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`29. Mayzent®, from Novartis, was approved by the FDA in 2019 to treat
`
`adult patients with “relapsing forms of multiple sclerosis.” (Ex. 2143 at 1.) No
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`generic equivalent of Mayzent® is currently available in the U.S. (Ex. 2144.)
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`(v) Cladribine (Mavenclad®)
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`30. Mavenclad®, from EMD Serono, was approved by the FDA in 2019 to
`
`treat adult patients with “relapsing forms of multiple sclerosis.” (Ex. 2145 at 1; Ex.
`
`2146 at 1.) No generic equivalent of Mavenclad® is currently available in the U.S.
`
`(Ex. 2147.)
`
`b.
`
`Self-Injected Medications
`
`31.
`
`I understand that self-injected medications require regular
`
`intramuscular or subcutaneous injections. (Ex. 2061, ¶25.) These self-injected
`
`medications include interferon beta-1a, interferon beta-1b, and glatiramer acetate.
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`32. A fourth self-injected medication, daclizumab (Zinbryta®), was
`
`approved by the FDA in 2016, but was withdrawn in March 2018 due to safety
`
`concerns. (Ex. 2148 at 1; Ex. 2149 at 1.) To be comprehensive and conservative, I
`
`include daclizumab (Zinbryta®) in my data analysis below.
`
`(i)
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`Interferon Beta-1a
`
`33.
`
`I understand that interferon beta-1a products include Avonex®,
`
`Rebif®, and Plegridy®.
`
`34. Avonex®, from Biogen, was approved by the FDA in 1996 to treat
`
`“patients with relapsing forms of multiple sclerosis” and “to slow the accumulation
`
`of physical disability and decrease the frequency of clinical exacerbations.” (Ex.
`
`2150 at 1.) No biosimilar version of Avonex® is currently available in the U.S.
`
`(Ex. 2151.)
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`35. Rebif®, from EMD Serono, was approved by the FDA in 2002 for the
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`“treatment of patients with relapsing forms of multiple sclerosis to decrease the
`
`frequency of clinical exacerbations and delay the accumulation of physical
`
`disability.” (Ex. 2152 at 8, 19.) No biosimilar version of Rebif® is currently
`
`available in the U.S. (Ex. 2153.)
`
`36. Plegridy®, from Biogen, was approved by the FDA in 2014 to treat
`
`“patients with relapsing forms of multiple sclerosis.” (Ex. 2154 at 1.) No
`
`biosimilar version of Plegridy® is currently available in the U.S. (Ex. 2155.)
`
`(ii)
`
`Interferon Beta-1b
`
`37.
`
`I understand that interferon beta-1b products include Betaseron® and
`
`Extavia®.
`
`38. Betaseron®, from Bayer, was approved by the FDA in 1993 to treat
`
`“relapsing forms of multiple sclerosis” and to decrease “the frequency of clinical
`
`exacerbations.” (Ex. 2156 at 1.) No biosimilar version of Betaseron® is currently
`
`available in the U.S. (Ex. 2157.)
`
`39. Extavia®, from Novartis, was approved by the FDA in 1993 to treat
`
`“relapsing forms of multiple sclerosis” and to decrease “the frequency of clinical
`
`exacerbations.” (Ex. 2158 at 1.) No biosimilar version of Extavia® is currently
`
`available in the U.S. (Ex. 2159.)
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`(iii) Glatiramer Acetate
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`40.
`
`I understand that glatiramer acetate products include Copaxone®, a
`
`generic version called Glatopa®, and another generic version called glatiramer
`
`acetate.
`
`41. Copaxone®, from Teva, was approved by the FDA in 1996 to treat
`
`“relapsing-forms of multiple sclerosis.” (Ex. 2160 at 1.) The FDA approved a
`
`therapeutically equivalent generic version of Copaxone®, Glatopa® (from Sandoz),
`
`in 2015, and another generic version, glatiramer acetate (from Mylan), in 2017.
`
`(Ex. 2161 at 1, 3; Ex. 2162 at 1, 4.)
`
`(iv) Daclizumab (Zinbryta®)
`
`42. Zinbryta®, from Biogen and AbbVie, was approved by the FDA in
`
`2016 to treat adult patients with “relapsing forms of multiple sclerosis.” (Ex. 2163
`
`at 1, 24.) In March 2018, Biogen and AbbVie voluntarily withdrew Zinbryta® due
`
`to concerns about the drug’s evolving benefit/risk profile. (Ex. 2148.) To be
`
`comprehensive and conservative, I include Zinbryta® in my data analysis below. No
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`biosimilar version of Zinbryta® is currently available in the U.S. (Ex. 2165.)
`
`c.
`
`Infused Medications
`
`43.
`
`I understand that infused medications are administered intravenously
`
`by a medical professional. (Ex. 2061, ¶25.)
`
`(i) Mitoxantrone (Novantrone®)
`
`44. Novantrone®, from EMD Serono, was approved by the FDA in 2000
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`as a treatment that “[reduces] neurologic disability and/or the frequency of clinical
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`relapses in patients with secondary (chronic) progressive, progressive relapsing,
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`or worsening relapsing-remitting multiple sclerosis.” (Ex. 2166 at 2.)
`
`Novantrone® was discontinued in approximately 2011. (Ex. 2167 at 1.) The FDA
`
`has approved five therapeutically-equivalent generic versions as of May 2019.
`
`(Ex. 2168 at 1-3.)
`
`(ii) Alemtuzumab (Lemtrada®)
`
`45. Lemtrada®, from Genzyme, was approved by the FDA in 2001 for the
`
`“treatment of patients with relapsing forms of multiple sclerosis.” (Ex. 2169 at 1.)
`
`No biosimilar version of Lemtrada® is currently available in the U.S. (Ex. 2170.)
`
`(iii) Natalizumab (Tysabri®)
`
`46. Tysabri®, from Biogen, was approved by the FDA in 2004 for the
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`“treatment of patients with relapsing forms of multiple sclerosis to reduce the
`
`frequency of clinical exacerbations.” (Ex. 2171 at 1, 4, 11.) No biosimilar version
`
`of Tysabri® is currently available in the U.S. (Ex. 2172.)
`
`(iv) Ocrelizumab (Ocrevus®)
`
`47. Ocrevus®, from Genentech, was approved by the FDA in 2017 for the
`
`“treatment of patients with relapsing or primary progressive forms of multiple
`
`sclerosis.” (Ex. 2173 at 1.) No biosimilar version of Ocrevus® is currently
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`available in the U.S. (Ex. 2174.)
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`3.
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`Summary
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`48. Tecfidera® competes in the MS DMTs marketplace with other oral
`
`medications, self-injected medications, and infused medications. My analysis
`
`below focuses on Tecfidera®’s absolute and relative performance in this
`
`marketplace.
`
`C.
`
`Patented Technology
`
`49.
`
`I understand that Tecfidera® is a commercial embodiment of the ’514
`
`patent. (Ex. 2061, ¶26.) According to Daniel R. Wynn, M.D., whose opinions I
`
`have reviewed and considered, the current clinical use of Tecfidera® is covered by
`
`the ’514 patent. (Ex. 2061, ¶26.)
`
`50. Claim 1 of the ’514 patent recites “[a] method of treating a subject in
`
`need of treatment for multiple sclerosis comprising orally administering to the
`
`subject in need thereof a pharmaceutical composition consisting essentially of (a)
`
`a therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or
`
`a combination thereof, and (b) one or more pharmaceutically acceptable
`
`excipients, wherein the therapeutically effective amount of dimethyl fumarate,
`
`monomethyl fumarate, or a combination thereof is about 480 mg per day.” (Ex.
`
`1001 at claim 1.)
`
`51. Generally, I understand that Claim 1 of the ’514 patent, embodied by
`
`Tecfidera®, results in a treatment that is efficacious, tolerable, safe, and convenient.
`
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`(Ex. 2061, ¶26.) I understand that the dosing of Tecfidera® (240 mg twice a day,
`
`equaling 480 mg per day) is covered by the ’514 patent. (Ex. 2061, ¶26.)
`
`52. As discussed above, according to Dr. Wynn, the active ingredient in
`
`Tecfidera® is dimethyl fumarate. (Ex. 2061, ¶26.) Tecfidera® is indicated for and
`
`administered to patients with relapsing forms of MS. (Ex. 2061, ¶26.) The FDA-
`
`approved dose of dimethyl fumarate in Tecfidera® is 480 mg per day (240 mg,
`
`twice a day), which the FDA has determined to be safe and effective for the
`
`treatment of MS. (Ex. 2061, ¶26.) Thus, I understand from Dr. Wynn that the
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`current clinical use of Tecfidera® is covered by the ’514 patent. Further, there is no
`
`FDA-approved use of dimethyl fumarate that falls outside of the ’514 patent. (Ex.
`
`2061, ¶26.)
`
` COMMERCIAL SUCCESS ANALYSIS
`
`A.
`
`Framework
`
`1. Obviousness
`
`53.
`
`I understand that the purpose of a commercial success analysis in a
`
`case where the validity of a patent has been challenged is to assist the fact-finder in
`
`determining whether the patented subject matter would have been obvious to a
`
`person of ordinary skill at the time of invention. Evidence of the success of
`
`products that embody the patented technology—where that success is, in part,
`
`attributable to the patented technology—suggests that the patented technology was
`
`not obvious to industry participants during the relevant time period. If it had been
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`obvious, one would have expected economically rational sellers to have adopted
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`the patented technology before patenting occurred.
`
`In theory, if a product that is expected to be commercially
`
`successful was obvious to invent, then other competitors likely
`
`would have already developed it. In that case, the market for
`
`subsequent entrants to achieve commercial success would be
`
`depleted. The potential for achieving commercial success is
`
`thought to drive inventors to formulate solutions to existing
`
`problems to satisfy marketplace demands. If an inventor
`
`develops a product that is commercially successful, presumably
`
`others recognized the product’s potential for commercial
`
`success, attempted to develop a solution to the same problem,
`
`and failed. (Ex. 2175 at 2077-78.)
`
`54.
`
`I also understand that many of the facts underlying a commercial
`
`success analysis may be relevant to determining whether the patented inventions
`
`satisfy a long-felt but unmet need.
`
`2.
`
`Elements of Commercial Success
`
`55.
`
`I understand that, to establish commercial success, the patentee must
`
`show that there is marketplace success and that the thing (product or method) that
`
`is successful are the inventions disclosed and claimed in the patent(s).
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`56.
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`I further understand that the test for commercial success does not
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`require that the patented features of the invention(s) be the only reason for a
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`product’s success. Instead, the patented features must be motivating (or important)
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`factors. Accordingly, the existence of other demand drivers does not negate a
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`showing of commercial success. From an economic perspective, this result makes
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`sense because demand for a product, pharmaceutical or not, is always driven by a
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`host of factors, not just one. (Ex. 2176 at 49.)
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`57. Further, the embodying product need not be the only or the most
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`successful product in a particular marketplace. If that were the case, commercial
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`success would rarely be found.
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`58.
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`In light of this guidance, I performed a two-part analysis to assess the
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`commercial success of the inventions described in the claims of the ’514 patent.
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`59. First, I examined whether Tecfidera® has been successful in the
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`marketplace. For this, I considered the absolute and relative performance of
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`Tecfidera®.
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`60. Second, I evaluated the nexus between the success of Tecfidera®
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`and the benefits made possible by the patented inventions. For this assessment, I
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`identified the primary benefits of the claimed inventions, and examined the
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`extent to which these benefits contributed to the marketplace success of
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`Tecfidera®.
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`B. Analysis
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`1. Marketplace Performance
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`61. Tecfidera® has been successful in the marketplace, enjoying both
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`absolute and relative success. Its immediate and continuing success, moreover,
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`likely indicates that it satisfied a long-felt but unmet need in the MS DMTs
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`marketplace.
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`a.
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`Absolute Performance
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`62. Tecfidera® units sold and revenues since its April 2013 launch
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`demonstrate enthusiastic acceptance by the marketplace, according to data from
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`Symphony Health (a health care consulting firm).1
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`1 Symphony Health gathers data from a wide variety of claims resources, including
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`medical, hospital, and prescription claims, with data on demographics, point-of-
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`sale prescriptions, and institutional invoices. (Ex. 2177 at 1-2.) Symphony Health
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`data commonly are relied upon for research purposes. (See, e.g., Ex. 2178 at 1; Ex.
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`2179 at 1; Ex. 2180 at 2.) Furthermore, a number of investment banks, including
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`J.P. Morgan, BMO, and Morgan Stanley have all used Symphony Health data in
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`their analyst coverage. (See, e.g., Ex. 2181 at 1; Ex. 2182 at 1; Ex. 2183 at 2.) For
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`the purposes of my analysis, I used the “Integrated” data from Symphony, which
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`represent the combined metric for both retail and institutional channels. (Ex. 2184
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`(i) Units
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`63. Since its launch in April 2013, more than 170 million units of
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`Tecfidera® have been sold in the U.S. (Appendix 10.) Quarterly unit sales
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`increased from 4.0 million in Q3 2013 (the first full quarter after launch) to 7.9
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`million in Q4 2018, representing a compound annual growth rate (“CAGR”) of
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`13.6 percent.2 (Appendix 10.) In its first year after launch, Tecfidera® rapidly
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`gained marketplace acceptance. From Q3 2013 to Q3 2014, Tecfidera®’s quarterly
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`unit sales nearly doubled, from 4.0 million to 7.7 million. (Appendix 10.) The
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`performance is shown below in Figure 1 (and Appendix 11).
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`at 1-2.)
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`2 Calculated as (7,875,000 / 4,025,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = 0.136.
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`The difference in years between Q4 2018 and Q3 2013, (Q4 2018 – Q3 2013), is
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`5.25.
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`Figure 1
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`64. Tecfidera® unit sales in 2018 correspond to approximately 16
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`million daily doses, or 44,000 patients per day for a full year.3 (Appendix 14.)
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`Tecfidera® cumulative unit sales since its launch correspond to more than 85
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`million daily doses, or approximately 41,000 patients per day over the entire 69-
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`
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`month period.4 (Appendix 14.)
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`3 Calculated as 16,041,000 / 365 = 43,948.
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`4 Calculated as 85,382,000 / (365 x 5.75) = 40,682. The 69-month (or 5.75-year)
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`period corresponds to April 2013 through December 2018.
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`(ii) Revenues
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`65. Pharmaceutical industry observers generally define a “blockbuster”
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`drug as one that generates more than $1 billion in sales per year. (Ex. 2185 at 1.)
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`Blockbuster drugs “are the holy grail of drug development.” (Ex. 2185 at 1.)
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`Tecfidera® is a blockbuster drug many times over.
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`66. Tecfidera® received FDA approval on March 27, 2013. (Ex. 2132
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`at 1, 8.) In its nine months in the U.S. marketplace that calendar year, Tecfidera®
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`generated roughly $961.3 million in revenues, or approximately $1.3 billion on an
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`annualized basis.5 (Appendix 2.) The next year—its first full year after launch—
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`Tecfidera® generated roughly $2.8 billion in revenues. (Appendix 2.) Tecfidera®
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`revenues have grown each year since, to roughly $4.5 billion in 2018.
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`(Appendix 2.) Since its launch, Tecfidera® has generated roughly $20.0 billion in
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`cumulative revenues, according to Symphony data. (Appendix 2.)
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`67. The revenue performance is shown below in Figure 2 (and
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`Appendix 3).
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`5 Calculated as $961,347,000 / 0.75 = $1.282 billion. Revenues based on average
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`wholesale price.
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`Figure 2
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`68. Tecfidera® quarterly revenues increased from $348.2 million in Q3
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`2013 (the first full quarter after launch) to $1.1 billion in Q4 2018, representing a
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`CAGR of 24.4 percent.6 (Appendix 2.) From Q3 2013 to Q3 2014, Tecfidera®
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`revenues more than doubled, from $348.2 million to $747.9 million. (Appendix 2.)
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`6 Calculated as ($1,095,981,000 / $348,209,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 =
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`0.244. The difference in years between Q4 2018 and Q3 2013, (Q4 2018 – Q3
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`2013), is 5.25.
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`b.
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`Relative Performance
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`69. Comparing the performance of Tecfidera® with that of other MS
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`DMTs indicates that Tecfidera® is the preferred choice of a substantial proportion
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`of patients and providers.
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`(i) Units
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`70. Because of differences in dosing frequency and units per dose, it can be
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`difficult to compare unit sales across treatments. Examinations of trends over time
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`can be useful, provided that there are no changes in recommended dosing over
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`time, because they may reflect changes in different drugs’ relative marketplace
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`acceptance. And unit sales of drugs that have similar dosing regimens (e.g., tablets
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`or capsules consumed daily) can be useful, provided that differences in
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`recommended units per dose are accounted for.
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`71. As discussed above, Tecfidera®’s quarterly unit sales increased at a
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`CAGR of 13.6 percent from Q3 2013 through Q4 2018.7 (Appendix 10.) During
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`that same time, the CAGRs of the other six top-selling MS drugs were: Aubagio®,
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`29.7 percent; Gilenya®, 5.5 percent; Avonex®, -16.3 percent; Rebif®, -9.1 percent;
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`7 Calculated as (7,875,000 / 4,025,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = 0.136.
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`The difference in years between Q4 2018 and Q3 2013, (Q4 2018 – Q3 2013), is
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`5.25.
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`Copaxone®, -19.5 percent; and Tysabri®, -4.3 percent.8 (Appendix 10.)
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`72. The higher CAGR for Aubagio® appears to be driven by Aubagio®’s
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`extremely low sales immediately following its launch, which may overstate its
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`growth rate. Indeed, approximately one year after it launched, Aubagio® sold only
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`419,000 units in Q3 2013. (Appendix 10.) Aubagio®, despite having a relative
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`advantage based on its longer time in the marketplace, fell about ten times short
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`of Tecfidera®’s Q3 2013 sales of 4,025,000 units—only one quarter after
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`Tecfidera®’s launch. (Appendix 10.) Overall, these data show that Tecfidera®
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`vastly outperformed Aubagio® once Tecfidera® launched, and Tecfidera®
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`8 Top-selling drugs by Q4 2018 revenues, excluding drugs with less than $250
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`million in sales in Q4 2018. Ocrevus is excluded from the calculation below
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`because Ocrevus did not launch until 2017. (Appendix 2; Appendix 3.) Calculated
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`as: Aubagio: (1,640,000 / 419,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = 0.297;
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`Gilenya: (2,144,000 / 1,619,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = 0.055;
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`Avonex: (219,000 / 557,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = -0.163; Rebif:
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`(528,000 / 872,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = -0.091; Copaxone:
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`(1,766,000 / 5,528,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = -0.195; and Tysabri:
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`(633,000 / 799,000) ^ (1 / (Q4 2018 – Q3 2013)) – 1 = -0.043. The difference in
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`years between Q4 2018 and Q3 2013, (Q4 2018 – Q3 2013), is 5.25.
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`continued to enjoy increasing unit sales, outpacing the CAGRs of other top-selling
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`MS drugs over subsequent years. (Appendix 10.)
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`73. Appendices 14, 15, and 16 show sales of oral MS treatments on a daily
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`dosage basis, i.e., adjusted for the number of units per recommended daily dose. As
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`seen in Appendix 14, by its second quarter in the marketplace (Q3 2013),
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`Tecfidera® was the best-selling oral MS treatment on a daily dosage basis. The
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`relative performance is also shown below in Figure 3