Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1311 Page 1 of 41
`
`PAUL D. TRIPODI II
`State Bar No. 162380
`ptripodi@wsgr.com
`Wilson Sonsini Goodrich & Rosati P.C.
`633 West Fifth Street, Suite 1550
`Los Angeles, CA 90071
`Telephone: 323-210-2900
`Fax: 866-974-7329
`
`NATALIE J. MORGAN
`State Bar No. 211143
`nmorgan@wsgr.com
`Wilson Sonsini Goodrich & Rosati P.C.
`12235 El Camino Real
`San Diego, CA 92130
`Telephone: 858-350-2300
`Fax: 858-350-2399
`
`WENDY L. DEVINE
`State Bar No. 246337
`wdevine@wsgr.com
`Wilson Sonsini Goodrich & Rosati P.C.
`One Market Plaza
`Spear Tower, Suite 3300
`San Francisco, California 94105-1126
`Telephone: 415-947-2000
`Fax: 415-947-2099
`
`Attorneys for Plaintiff NuVasive, Inc.
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`SAN DIEGO DIVISION
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`CASE NO. 3:18-cv-00347-CAB-
`MDD
`DECLARATION OF
`MATTHEW LINK IN SUPPORT
`OF MOTION FOR
`PRELIMINARY INJUNCTION
`Judge: Hon. Cathy Ann Bencivengo
`Courtroom: 4C
`Hearing Date: April 30, 2018
`Jury Trial Demanded
`REDACTED VERSION
`
`)))))))))))))))
`
`3:18-CV-00347-CAB-MDD
`
`NUVASIVE, INC., a Delaware
`corporation,
`
` Plaintiff,
`
`v.
`ALPHATEC HOLDINGS, INC. and
`ALPHATEC SPINE, INC., a Delaware
`corporation,
` Defendants.
`
`
`
`
`27 27
`28 DECLARATION OF MATTHEW LINK 28
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
`
`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 1 of 9
`
`

`

`Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1319 Page 9 of 41
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`18. Each of the above described components – neuromonitoring
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`capabilities, specialized access tools, and specialized implants – were essential in
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`enabling NuVasive to become the first company to provide a safe, effective, and
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`reproducible minimally invasive lateral trans-psoas approach to the lumbar spine.
`19. NuVasive debuted the XLIF procedure in October 2003 at the North
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`American Spine Society (“NASS”) Annual Meeting. Doc. No. 1-2 (IPR2014-
`
`00075, July 8, 2014, Declaration of Patrick Miles) at 9. Despite the time, effort,
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`and cost NuVasive had put into developing the XLIF procedure, the majority of the
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`spinal surgery community was immediately skeptical. From the beginning, and
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`even during my first few years at the company, many surgeons did not believe that
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`spinal fusion surgery via a lateral, trans-psoas approach could be done safely and
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`reproducibly.
`20. Members of the spinal community published their doubts regarding
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`the safety and efficacy of XLIF in the literature. For example, a 2003 article
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`explained that while surgeons recognized advantages to a lateral approach through
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`the psoas muscle, they “have not felt comfortable with dissecting the psoas because
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`of the presence of the lumbar plexus.” Ex. 5 (T. Moro, M.D., et al., An Anatomic
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`Study of the Lumbar Plexus with Respect to Retroperitoneal Endoscopic Surgery,
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`Spine Vol. 28, No. 5, pp. 423-428 (2003)) at 428. These misgivings regarding the
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`safety of traversing the psoas persisted through at least the 2009 timeframe, when
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`NuVasive’s internal market research demonstrated that some surgeons were still
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`concerned about “the perceived complications associated with XLIF (e.g., psoas
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`pain/weakness, dysthesias, numbness, and quad weaknesses).” Ex. 6 (S. Craig
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`Meyer, M.D., From the Proctor’s Perspective, SOLAS News, Issue 10 (Apr.
`
`2010)) at 3.
`21. Other factors also hampered the initial adoption of XLIF, including
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`the fact that surgeons are generally reluctant to adopt new surgical techniques,
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`
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`-8-
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`3:18-CV-00347-CAB-MDD
`
`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 2 of 9
`
`

`

`Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1320 Page 10 of 41
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`especially those for which they have had little training and require tools they are
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`not used to using.
`22. NuVasive undertook considerable efforts to overcome these hurdles,
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`establishing a new lateral market in the process.
`23. NuVasive initially focused on educating the spinal community that
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`XLIF was actually safe and effective, and training inexperienced surgeons how to
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`perform the XLIF procedure. At first, NuVasive partnered with the pioneers and
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`early adopters of XLIF to have them demonstrate the procedure and specialized
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`equipment in their own operating rooms to various inexperienced and skeptical
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`surgeons. One such surgeon was Dr. Luiz Pimenta in Brazil. Dr. Pimenta was the
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`surgeon who initially demonstrated a minimally invasive endoscopic lateral, trans-
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`psoas approach for spinal fusion to NuVasive in Brazil. He then worked with
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`NuVasive to develop its unique surgical tools and neuromonitoring that enabled
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`reproducible minimally invasive lateral, trans-psoas fusion surgery. Once the
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`inexperienced surgeons saw the XLIF technology in action, including in the
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`operating room of Dr. Pimenta himself, they felt far more comfortable using XLIF
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`in their own practices.
`24. NuVasive also began utilizing the cadaver lab in its San Diego,
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`California headquarters as an XLIF surgeon training center. This facility, which
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`had been used to develop and clinically validate the viability of the XLIF solution,
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`now allowed NuVasive to demonstrate the benefits of XLIF to surgeons in a
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`hands-on environment. Facilitated by a team of experts, since 2005 through today,
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`the six-suite operating room and training facility is available for surgeons on
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`virtually a “24/7” basis. NuVasive also implemented the “Marquis Visit Program,”
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`or “MVP,” at the training center, where visiting surgeons have the opportunity to
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`be trained in the XLIF technique by proctors. Having a central facility for
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`demonstrating and teaching the XLIF technique to surgeons has been instrumental
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`-9-
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`3:18-CV-00347-CAB-MDD
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`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 3 of 9
`
`

`

`Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1321 Page 11 of 41
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`in allowing for the safe and reproducible execution of the XLIF procedure by
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`surgeons across the country. NuVasive also began to provide local lab training for
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`surgeons without convenient access to the San Diego facilities and began to
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`facilitate peer-to-peer interaction through many different venues for surgeons to
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`discuss and observe the XLIF technique.
`25. NuVasive also came to recognize that surgeons would be far more
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`likely to adopt XLIF if their interface with the company came from personnel that
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`not only had exhaustive knowledge of the XLIF procedure and its benefits, but
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`were also highly attuned to the unique needs and preferences of individual
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`surgeons. NuVasive first instituted a culture of “absolute responsiveness” and
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`innovation at “cheetah speed” at all levels of the company, which is still in place
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`today. This culture led to NuVasive’s unique sales representative model.
`26. When I joined NuVasive in 2006, the company utilized mostly (if not
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`entirely) third-party, non-exclusive distributors to sell its XLIF offerings. This
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`model was widely followed by most small players in the spinal market whose
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`business was based on a limited number of customers and surgical offerings.
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`However, as more and more surgeons began seeing XLIF’s proven results and
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`adopting the procedure, NuVasive realized that it needed a different approach
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`aligned with its corporate culture of innovation and responsiveness to interface
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`with these new surgeon customers. Thus, NuVasive began using direct sales
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`representatives in conjunction with third-party sales representatives employed by
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`exclusive distributors; each was exhaustively trained regarding XLIF products and
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`procedure. From the beginning, this training has been intensive, and
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`3:18-CV-00347-CAB-MDD
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`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 4 of 9
`
`

`

`Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1322 Page 12 of 41
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`NuVasive requires each and every member of the on-the-ground sales team
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`(including third party sales representatives) to demonstrate their clinical capability
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`and fluency by scoring at least 90% in a comprehensive exam. Each individual
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`trainee representative requires NuVasive to spend
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`. Since the beginning of its intensive sales
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`representative training efforts, NuVasive has made sure to provide surgeons with
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`easy and comprehensive access to these knowledgeable and highly-trained sales
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`people, resulting in deep relationships between surgeons in the lateral market and
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`NuVasive.
`27.
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`In addition, NuVasive realized it could even more effectively address
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`surgeons’ skepticism if it also collected and produced data showing XLIF’s
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`superiority to previous surgical procedures. To that end, NuVasive invested
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`substantial time and cost in quantifying exactly how XLIF was better than previous
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`procedures. The data showed XLIF obtained equally effective results as previous
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`procedures, but resulted in minimal loss of blood, shorter hospital stays (in some
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`cases going from three or four days in the hospital to outpatient surgery), fewer and
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`less severe complications, less post-operative pain, and quicker recovery times for
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`the patient; hospitals also incurred significantly fewer costs.
`28. NuVasive then, and still today, made sure these results were published
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`in academic journals, presented at industry conferences, included in public filings,
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`and incorporated in marketing materials to hospitals, surgeons, and patients. Ex. 7
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`(Excerpt from 2013 NuVasive Investor Morning Transcript, Nov. 14, 2013) at 6 (“I
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`think there is no doubt that we have committed a ton of time and effort with regard
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`to clinical evidence, and so if you look at the volume of effort that has been put
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`into this, 142 journal articles, greater than 60 book chapters, 26 white papers, I
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`would tell you through – we have made a market through the publication of
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`clinical evidence that suggests that what we are doing is real.”). The following are
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`-11-
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`3:18-CV-00347-CAB-MDD
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`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 5 of 9
`
`

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`Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1323 Page 13 of 41
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`quotes from such materials demonstrating the overall performance and benefits of
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`XLIF.
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`• “The cost savings to a hospital when using our XLIF surgical
`approach are measurable. The hospital stay after the procedure is
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`typically one day, compared to 2-3 days with a traditional anterior
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`approach. Time in the operating room is reduced to 70-90 minutes on
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`average, compared to a traditional 120-180 minutes.” Ex. 8 (Excerpt
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`from NuVasive’s 2005 Annual Report) at 4.
`• “Complication rates were halved in the XLIF group in comparison to
`the ALIF [anterior approach] group, which was a large factor in the
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`resulting cost differential in favor of XLIF of about $10,000 (or 10%
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`cost savings) for single-level procedures and about $20,000 (or 13.6%
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`cost savings) for two-level procedures. …Mean total hospital costs
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`were statistically significantly lower for the XLIF group over the PLIF
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`[posterior approach] group, with an average per-patient cost savings
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`of $2,825.37 (10.4%). … The PLIF group experienced significantly
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`greater blood loss, significantly more transfusions, and elevated per-
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`patient transfusion costs than XLIF patients, with higher rates of
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`postoperative residual events and infections than the XLIF patients. …
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`Early indicators of cost-utility analysis are promising, where initial
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`savings on the order of 10% become more meaningful as gains in
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`HRQoL [health-related quality-of-life] demonstrate durability of
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`treatment effect over time.” Ex. 9 (Excerpt from W.B. Rodgers, M.D.,
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`et al., Economics of the Lateral Approach: The Effect of Minimally
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`Invasive Surgery on Health Care Costs, eXtreme Lateral Interbody
`Fusion (XLIF ®) (2nd Ed. 2013)) at 71-72.
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`-12-
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`3:18-CV-00347-CAB-MDD
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`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 6 of 9
`
`

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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 7 of 9
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`

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`Additional marketing and training materials that set forth the benefits of XLIF are
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`attached as Exs. 27-30.
`29. Each of these efforts required significant expenditures. From 1999 to
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`2017, NuVasive spent approximately
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` in research and development of
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`the XLIF products and procedure, representing
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` of NuVasive’s
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`total research and development expenses. In that same time period, NuVasive
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`spent
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` in selling, marketing, and administrative
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`expenses relating to XLIF, which includes expenses related to surgeon education
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`and training.
`30. Over time, surgeons overcame their initial skepticisms and began
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`using XLIF at increasing rates. I personally witnessed
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`
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` come to understand the safety and efficacy of XLIF, and he is
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`still using XLIF to this day. These surgeons,
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`, then told other
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`surgeons and the spinal industry at large about the improved patient outcomes
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`resulting from XLIF. The following are quotes from some of the statements and
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`publications that spine surgeons have made regarding XLIF. NuVasive collects
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`such surgeon statements as part of its sales and marketing efforts:
`• “Since the introduction of the XLIF technique to North America in
`late 2003, a host of advantages for our patients have become apparent:
`o Less tissue damage leads to quicker recovery and decreased
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`narcotic requirements;
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELIMINARY
`INJUNCTION
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`
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`
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`-14-
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`3:18-CV-00347-CAB-MDD
`
`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 8 of 9
`
`

`

`Case 3:18-cv-00347-CAB-MDD Document 27-13 Filed 03/26/18 PageID.1349 Page 39 of 41
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`CONFIDENTIAL - OUTSIDE COUNSEL ONLY
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`I declare under the penalty of perjury under the laws of the United States
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`2
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`that the foregoing is true and correct.
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`3 Executed on March 26, 2018
`4
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`.._____
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`7
`Matthew Link
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`DECLARATION OF MATTHEW LINK
`ISO MOTION FOR PRELI MINAR y
`INJUNCTION
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`-38-
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`3:18-cv-00347-CAB-MDD
`
`ALPHATEC HOLDINGS, INC., ALPHATEC SPINE INC. v. NUVASIVE INC.
`IPR2019-00362, Ex. 1065, p. 9 of 9
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`