UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`
`NALOX-1 PHARMACEUTICALS, LLC,
`Petitioner,
`
`v.
`
`ADAPT PHARMA OPERATIONS LIMITED, and
`OPIANT PHARMACEUTICALS, INC.,
`Patent Owners.
`__________________
`
`Case IPR2019-00694
`U.S. Patent No. 9,629,965
`__________________
`
`DECLARATION OF ROBERT L. VIGIL, PH.D.
`
`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 1
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`

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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`
`
`TABLE OF CONTENTS
`
`I. 
`
`II. 
`
`INTRODUCTION ........................................................................................... 4 
`A.  Assignment ............................................................................................ 4 
`B. 
`Summary of Conclusions ...................................................................... 5 
`C. 
`Qualifications ........................................................................................ 6 
`D. 
`Compensation ........................................................................................ 8 
`E. 
`Evidence Considered ............................................................................. 8 
`BACKGROUND ........................................................................................... 17 
`A. 
`The Challenged Patents ....................................................................... 17 
`B. 
`The Naloxone Marketplace ................................................................. 18 
`C. 
`Naloxone Products .............................................................................. 20 
`1. 
`Vials and Pre-Filled Syringes for Injection .............................. 21 
`2. 
`Unapproved and Off-Label Intranasal “Kits” ........................... 22 
`3. 
`Evzio® Auto-Injector ............................................................... 23 
`4. 
`Narcan® Nasal Spray ................................................................ 27 
`D.  Naloxone Distribution and Reimbursement ........................................ 30 
`1. 
`Retail Segment .......................................................................... 30 
`2. 
`Public Interest Segment ............................................................ 34 
`III.  LEGAL FRAMEWORK ............................................................................... 35 
`IV.  MARKETPLACE SUCCESS OF NARCAN® NASAL SPRAY ................ 36 
`A. 
`Sales Revenue and Units ..................................................................... 37 
`B.  Market Expansion ................................................................................ 40 
`C.  Market Share ....................................................................................... 43 
`1. 
`Retail Segment .......................................................................... 43 
`2. 
`Public Interest Segment ............................................................ 45 
`Contribution to Acquisition of Adapt ................................................. 46 
`Generic Entry ...................................................................................... 47 
`
`D. 
`E. 
`
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`2
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 2
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`V. 
`
`DECLARATION OF ROBERT L. VIGIL PH.D.
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`CAUSAL NEXUS ......................................................................................... 49 
`A.  Overview of Patented Features ........................................................... 49 
`B. 
`Contribution of Patented Features to Consumer Demand .................. 50 
`1. 
`Patented Features Emphasized in Marketing Materials ............ 50 
`2. 
`Patented Features Praised by Third Parties ............................... 54 
`Non-Patented Features ........................................................................ 61 
`1. 
`Adapt’s Sales and Marketing Efforts ........................................ 62 
`2. 
`FDA Approval ........................................................................... 72 
`3. 
`Pricing ....................................................................................... 78 
`
`C. 
`
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`
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`3
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 3
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`
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`I, Robert L. Vigil, Ph.D., hereby declare as follows:
`
`I.
`
`INTRODUCTION
`A. Assignment
`
`1.
`
`This declaration is being submitted on behalf of Adapt Pharma
`
`Operations Limited (“Adapt”) and Opiant Pharmaceuticals, Inc. (“Opiant”)
`
`(collectively, “Patent Owners”) in three inter partes review (“IPR”) proceedings
`
`filed by Nalox-1 Pharmaceuticals, LLC (“Nalox-1”), Case Nos. IPR2019-00685,
`
`IPR2019-00688, and IPR2019-00694. Because there are a number of common
`
`issues in these IPR proceedings, I am providing a single declaration across all three
`
`IPR proceedings.
`
`2.
`
`I have been retained to provide expert analysis and testimony
`
`regarding the commercial success of the invention described and claimed in U.S.
`
`Patent Nos. 9,211,253 (“the ’253 patent”); 9,468,747 (“the ’747 patent”); and
`
`9,629,965 (“the ’965 patent”) (collectively, “the Adapt patents” or “the challenged
`
`patents”). I understand that Nalox-1 has challenged claims 1–29 of the ’253
`
`patent, claims 1–45 of the’747 patent, and claims 1–30 of the ’965 patent (“the
`
`challenged claims”) as being unpatentable as obvious.
`
`3.
`
`Specifically, I have been asked to evaluate whether Narcan® Nasal
`
`Spray is a success in the marketplace, and whether there is a nexus between that
`
`product’s success, if any, and the invention described in the challenged patents. As
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`
`
`4
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`
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 4
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`part of this assignment, I have been asked to consider whether Narcan® Nasal
`
`Spray’s marketplace success reflects the product’s fulfillment of long-felt need, as
`
`well as third-party praise for the invention described in the challenged patents.
`
`4.
`
`I understand that each of the three IPR proceedings at issue has its
`
`own set of exhibit numbers. I will therefore refer to the exhibits by name; a chart
`
`of the relevant exhibit numbers in each proceeding and the short names I use to
`
`refer to different documents is attached to the end of this declaration.
`
`5.
`
`For the purpose of my analysis, I have relied on the opinions of Dr.
`
`Stuart Jones expressed in his declaration (“Jones Decl.”) that Narcan® Nasal Spray
`
`and/or the use of the Narcan® Nasal Spray embodies the challenged claims of the
`
`Adapt patents. I have not conducted an independent analysis of whether Narcan®
`
`Nasal Spray embodies every element of those claims.
`
`B.
`
`6.
`
`Summary of Conclusions
`
`Based upon my review and analysis of the evidence, it is my opinion
`
`that the commercial embodiment of the challenged patents and claims, Narcan®
`
`Nasal Spray, has been a marketplace success in the United States. Moreover, the
`
`challenged patents and claims have enabled key features and benefits of Narcan®
`
`Nasal Spray that have contributed to its success in the marketplace. As a result, I
`
`conclude that the invention described in the challenged patents and claims has been
`
`a commercial success. I also conclude that these features and benefits of Narcan®
`
`
`
`5
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`
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 5
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`Nasal Spray satisfied a long-felt need for a safe, effective, needle-free, easy-to-use
`
`naloxone product suitable for use by an untrained individual to treat a person
`
`experiencing an opioid overdose, and these features and benefits have been the
`
`subject of extensive third-party praise.
`
`C. Qualifications
`
`7.
`
`I am a Managing Principal at Analysis Group, Inc. (“Analysis
`
`Group”). Analysis Group provides economic and financial analysis for complex
`
`litigation, regulatory proceedings, and corporate strategic planning. Analysis
`
`Group maintains offices in Boston, Massachusetts; Chicago, Illinois; Dallas,
`
`Texas; Denver, Colorado; Los Angeles, California; Menlo Park, California; New
`
`York, New York; San Francisco, California; and Washington, D.C.; as well as
`
`international offices in Beijing, China; Brussels, Belgium; London, U.K.;
`
`Montreal, Quebec; and Paris, France.
`
`8.
`
`I specialize in the application of economics and finance to intellectual
`
`property and general commercial litigation matters. Among other cases, I have
`
`substantial experience in matters involving patent infringement, trade secret
`
`misappropriation, breach of contract, tortious interference, and unfair business
`
`practices. Although my work spans multiple industries, I have been involved in
`
`many matters involving the pharmaceutical industry with respect to pharmaceutical
`
`
`
`6
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`
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 6
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`drugs, devices, and diagnostic equipment. A fair amount of my work also involves
`
`the consumer products, electronics, and telecommunications industries.
`
`9. My work includes assessment of damages in complex litigation cases,
`
`including analyses of lost profits, reasonable royalties, price erosion, and unjust
`
`enrichment. I have also examined whether patented inventions qualify as
`
`commercial successes in their respective industries, and provided expert analysis
`
`and/or testified on numerous occasions on both sides of this question. I have
`
`testified as an expert economist at trial approximately 15 times.
`
`10.
`
`In addition my experience in complex litigation, I have experience in
`
`technology valuation and licensing negotiation and strategy in prospective non-
`
`litigation licensing matters. Examples of my work in valuation include valuing
`
`intellectual property covering different pharmaceutical drugs for the treatment of
`
`cancer, mental illness, and epilepsy. I have taught classes and given presentations
`
`on numerous intellectual property valuation and damages-related topics.
`
`11.
`
`I graduated from Pepperdine University in 1990 with a Bachelor of
`
`Arts degree in Economics. I also received a Ph.D. in economics from the
`
`University of Maryland in 1998. In 2008, I was granted the Certified Licensing
`
`Professional (“CLP”) designation by the Licensing Executive Society. My résumé
`
`is Appendix A. It describes all of my testimony, publications, and speeches,
`
`including those related to intellectual property damages.
`
`
`
`7
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`
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 7
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`
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`D. Compensation
`
`12. Analysis Group is compensated at the rate of $675 per hour for my
`
`time spent working on this matter. I have been assisted in my work by staff at
`
`Analysis Group working under my direction with hourly billing rates ranging from
`
`$330 to $575. My compensation is not contingent on my findings, testimony
`
`rendered, or on the outcome of this proceeding.
`
`E.
`
`13.
`
`Evidence Considered
`
`In undertaking my analyses, I have considered the information from
`
`the petitions for IPR and exhibits filed by Nalox-1, including the declarations of
`
`Drs. Maureen Donovan and Günther Hochhaus. I have also considered the
`
`materials cited herein, including the declarations submitted by Dr. Jones and Dr.
`
`Kenneth Williams (“Williams Decl.”). I have also considered declarations from
`
`the following employees of Adapt or its corporate parent, Emergent BioSolutions,
`
`Inc. (“Emergent”), as well as the exhibits they have cited therein: Declan Brides,
`
`Adapt’s Vice President, Finance (“Brides Decl.”); Eric Karas, a Vice President and
`
`General Manager of U.S. Commercial at Emergent (“Karas Decl.”); and Thomas
`
`Begres, a Senior Director of Clinical and Medical Affairs at Emergent (“Begres
`
`Decl.”). I have also relied upon my professional judgment and expertise.
`
`14. Among the materials cited herein are publicly available documents
`
`from internet sources or publications, which are summarized below:
`
`
`
`8
`
`
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 13
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`Opiant Exhibit 2206
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`
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`Health and Capital IQ, both of which are reliable sources that are routinely and
`
`reasonably relied on by experts in my field.
`
`II. BACKGROUND
`A. The Challenged Patents
`
`17. The challenged patents are part of the same patent family, with the
`
`’747 and ’965 patents each resulting from applications that are continuations or
`
`continuations-in-part of the application that resulted in the ’253 patent.
`
`18.
`
`I understand that the challenged patents are generally directed to:
`
`(1) single-use, pre-primed devices adapted for nasal delivery of pharmaceutical
`
`compositions comprising an opioid antagonist—in particular, naloxone;
`
`(2) pharmaceutical formulations for intranasal administration of naloxone; and
`
`(3) methods of treating opioid overdose and symptoms thereof by nasally
`
`administering naloxone using those methods and devices.
`
`19. As discussed above, I understand that Dr. Jones has opined that
`
`Narcan® Nasal Spray and/or the use of the Narcan® Nasal Spray embodies the
`
`claims of the challenged patents.1 I understand that, generally speaking, Narcan®
`
`Nasal Spray embodies the invention claimed in the challenged patents through its
`
`combination of a single-use spray device with a 0.1 mL (100 microliter) aqueous
`
`
`1 Jones Decl. Part IX.E.
`
`
`
`17
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`
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`solution nasal spray formulation containing 4 mg of naloxone hydrochloride and
`
`other excipients.2 I understand that the combination of this formulation and device
`
`makes Narcan® Nasal Spray an effective, stable, needle-free, and easy-to-use
`
`intranasal naloxone product.3
`
`B.
`
`The Naloxone Marketplace
`
`20. Opioids are a class of drugs derived from the opium poppy (or their
`
`synthetic analogues). Because opioids produce euphoria in addition to pain relief,
`
`they can be misused, leading to overdose. Opioid overdose can be reversed
`
`through the timely administration of naloxone.
`
`21. The naloxone market overall has grown significantly in recent years.
`
`For example, in Q3 2014, total retail prescriptions were approximately 9,100,
`
`while in Q3 2019 they had grown to approximately 297,000, an increase of over 30
`
`times over an approximately 5-year period.4 While there is no reliable and
`
`comprehensive data on the size of the public interest marketplace,5 I understand
`
`
`2 Jones Decl. Parts IX.D–E.
`
`3 Jones Decl. Part IX.D.
`
`4 Appendix I. Calculated as 296,956 / 9,148 – 1 = 31.5.
`
`5 Karas Decl. ¶ 26.
`
`
`
`18
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`IPR2019-00694
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`that Adapt’s commercial experience indicates that the public interest market
`
`segment has also undergone significant growth in recent years.6
`
`22. Although several factors have contributed to the recent growth in the
`
`naloxone marketplace, much of this significant growth has coincided with the
`
`FDA’s approval of Narcan® Nasal Spray and its commercial availability. This
`
`timing is significant because it indicates that Narcan® Nasal Spray’s market entry
`
`tapped a previously unrecognized and underserved market by supplying a product
`
`with features and benefits desired by consumers. Although other factors have also
`
`contributed to the market’s expansion—such as rising levels of opioid use and
`
`efforts by federal and state governments to increase access to naloxone generally
`
`through actions like standing orders7—these factors predate Narcan® Nasal Spray,
`
`and the dramatic increase in naloxone sales did not occur until after Narcan®
`
`Nasal Spray’s commercial launch. For this reason, growth in the naloxone
`
`marketplace is the result of the features and benefits of Narcan® Nasal Spray,
`
`which are attributable to the claimed invention.
`
`
`6 Karas Decl. ¶ 27.
`
`7 A standing order allows the distribution of a prescription pharmaceutical product
`
`to designated people who meet the criteria established by the order without the
`
`need for those people to present a prescription for the product. Karas Decl. ¶ 58.
`
`
`
`19
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`
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`C. Naloxone Products
`
`23. There are several types of naloxone products currently available in the
`
`United States: (1) vials and pre-filled syringes for intravenous, intramuscular, or
`
`subcutaneous injection; (2) unapproved and off-label intranasal “kits” that combine
`
`a pre-filled syringe for injection with a mucosal atomizer device (“MAD”); (3) the
`
`Evzio® auto-injector; and (4) Narcan® Nasal Spray.8
`
`24. One or more forms of naloxone are covered by most major insurance
`
`plans, commonly with copays of zero to $10, and various products are available at
`
`a discounted price through community public health programs and manufacturer
`
`discount programs for those without insurance.9 The FDA has approved two of
`
`these products, Evzio® and Narcan® Nasal Spray, for community use.10
`
`
`8 Karas Decl. ¶¶ 13–16; Prescribe to Prevent.
`
`9 Surgeon General Advisory; Narcan® Nasal Spray Consumer FAQ; Kaléo
`
`Evzio2You.
`
`10 FDA Evzio® 2 mg Summary Review at 3–4.
`
`
`
`20
`
`
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`Vials and Pre-Filled Syringes for Injection
`
`1.
`
`25.
`
`Injectable naloxone was approved by the FDA in 1971.11 For over 40
`
`years, injectable naloxone was the only FDA approved formulation of naloxone.12
`
`At present, generic brands of injectable naloxone are commercially available from
`
`several companies as indicated by the manufacturers listed in the FDA’s Approved
`
`Drug Products with Therapeutic Equivalence Evaluations publication, more
`
`commonly known as the “Orange Book.”
`
`26.
`
`In Mr. Karas’s experience, the price for two doses of generic naloxone
`
`injections is approximately between $5 and $10.13 Mr. Karas’s values are close to
`
`the values reported in a January 2019 guide prepared by the University of
`
`Massachusetts Medical School (“UMass Naloxone Pricing Guide”), which
`
`indicates that the cash prices for generic naloxone injections were approximately
`
`$13 to $21 per dose.14 Many insurance plans cover generic naloxone with minimal
`
`or no co-pay required.15
`
`
`11 Williams Decl. ¶ 68.
`
`12 Williams Decl. ¶ 68.
`
`13 Karas Decl. ¶¶ 20, 30.
`
`14 UMass Naloxone Pricing Guide.
`
`15 UMass Naloxone Pricing Guide.
`
`
`
`21
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`
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`Unapproved and Off-Label Intranasal “Kits”
`
`2.
`
`27. Administering an injection can be challenging or undesirable for
`
`people without proper medical training, and carries the risk of unintended needle
`
`exposure.16 In recognition of these challenges, and the growing incidence of
`
`opioid abuse and associated overdose, development of an improvised intranasal
`
`delivery system using a MAD began in the early 2000s.17 The improvised device
`
`is used by spraying one-half of the syringe volume (approximately 1 mL) into each
`
`nostril.18 Use of such improvised emergency atomizer kits is not FDA approved
`
`and requires training on assembly and administration.19
`
`28. By the mid-2000s, Amphastar began selling a needleless prefilled
`
`syringe of naloxone that is compatible with the MAD device produced separately
`
`by Teleflex.20 The Amphastar injectable naloxone (including a cartridge/vial and a
`
`syringe) and the Teleflex MAD are often packaged into an off-label “kit” by first
`
`responders (law enforcement, emergency medical services (“EMS”), etc.), harm
`
`
`16 Williams Decl. ¶¶ 69–75.
`
`17 Williams Decl. ¶¶ 76–83.
`
`18 Williams Decl. ¶ 29; Begres Decl. ¶ 29.
`
`19 Williams POPR Decl. ¶ 24; Williams Decl. ¶¶ 91–92; Begres Decl. ¶¶ 25–30.
`
`20 Karas ¶ 15; Prescribe to Prevent.
`
`
`
`22
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`reduction clinics, and some retail pharmacists for distribution as an intranasal
`
`naloxone product.21
`
`29.
`
`In Mr. Karas’s experience, the price for a naloxone kit, including a
`
`pre-filled syringe of generic injectable naloxone and a MAD, is approximately $70
`
`for two doses.22 Mr. Karas’s values are close to the values reported in the UMass
`
`Naloxone Pricing Guide, which indicates that cash prices for generic naloxone kits
`
`(including a MAD) were approximately $21 to $40 per dose.23 Additionally, many
`
`insurance plans cover generic naloxone kits with minimal or no co-pay required.24
`
`3.
`
`Evzio® Auto-Injector
`
`30.
`
`In April 2014, the FDA approved 0.4 mg Evzio®, an auto-injector
`
`formulation of naloxone developed and marketed by Kaléo, Inc. (“Kaléo”).25
`
`Evzio® was granted fast-track approval and received priority review by the FDA.26
`
`Evzio® is a pre-filled, single-use, handheld auto-injector designed for
`
`
`21 Karas Decl. ¶ 15.
`
`22 Karas Decl. ¶ 20.
`
`23 UMass Naloxone Pricing Guide.
`
`24 UMass Naloxone Pricing Guide.
`
`25 Kaléo Evzio® Approved.
`
`26 Kaléo Evzio® Approved.
`
`
`
`23
`
`
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`administration into the outer thigh, either directly or through clothing, and provides
`
`voice and visual guidance to help with administration.27 The 0.4 mg Evzio®
`
`product was commercially launched in the U.S. in July 2014.28
`
`31.
`
`In October 2016, after the commercial launch of Narcan® Nasal
`
`Spray, Kaléo sought and obtained FDA approval for a 2 mg formulation of
`
`Evzio®.29 Kaléo subsequently discontinued sales of the 0.4 mg version of its
`
`product.30 In its present incarnation, Evzio® delivers 2 mg of naloxone in 0.4 mL
`
`of solution.31
`
`32. The price of Evzio® has increased significantly in the past five-and-a-
`
`half years since its commercial launch. The wholesale acquisition cost (“WAC”)
`
`for a carton of Evzio® (which includes two doses) was initially set at $575 in July
`
`2014, and subsequently increased to $750 in November 2015 (the month that the
`
`
`27 Kaléo About Evzio®.
`
`28 Kaléo Evzio® Available.
`
`29 FDA Evzio® 2 mg Summary Review. Unless otherwise specified, references to
`
`“Evzio®” in this report are to the 2 mg formulation (viewed December 14, 2019).
`
`30 FDA Evzio® 2 mg Orange Book.
`
`31 FDA Evzio® 2 mg Summary Review.
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`24
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 24
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`FDA approved Narcan® Nasal Spray), $3,750 in February 2016 (the commercial
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`launch of Narcan® Nasal Spray), and $4,100 in January 2017.32
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`33. As indicated above, the most significant increases in Evzio®’s WAC
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`price coincided with the FDA’s approval of Narcan® Nasal Spray (in November
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`2015) and Narcan® Nasal Spray’s commercial launch (in February 2016). From
`
`an economic perspective, this is significant and suggests that Kaléo raised the
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`price of Evzio® both in response to the entry of Narcan® Nasal Spray and in
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`recognition that Evzio® would not be able to compete with Narcan® Nasal
`
`Spray’s features and benefits. This is so because as a matter of basic economic
`
`theory, the entry of a new competitor (i.e., Narcan® Nasal Spray) would ordinarily
`
`be expected to drive prices for incumbent products (i.e., Evzio®) down, not up, as
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`the new goods or services compete with those offered by the incumbents. An
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`increase in an incumbent’s price, on the other hand, suggests that the incumbent
`
`believes that competing on the merits with the new entrant is not viable. In the
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`case of Evzio® specifically, the dramatic increase in the product’s price appears to
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`reflect a business decision by Kaléo to rely on the few payers willing and/or
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`capable of paying for the product, rather than competing with Narcan® Nasal
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`32 Senate Evzio® Report at 33, 46.
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`25
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 25
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`Spray on the merits of Evzio®’s features and benefits.33 Further supporting this
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`analysis is the fact that Evzio® raised its intramuscular dose from 0.4 mg to 2 mg
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`after the FDA approved Narcan® Nasal Spray, which was the first product to
`
`administer a 4 mg intranasal dose to overdose patients, rather than the 2 mg dose
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`that was, at the time of Narcan® Nasal Spray’s approval by the FDA, widely
`
`accepted.34
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`34. Notwithstanding its WAC pricing, however, Evzio® is available to
`
`any consumer with commercial insurance and many consumers with government
`
`insurance with zero co-pay.35 In addition, in December 2018, Kaléo announced
`
`that it “recognize[s] that more needs to be done to improve access for patients”
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`and, as a result, announced that an authorized generic formulation of Evzio®
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`would be available in mid-2019 at a list price of $178 for a carton of two auto-
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`injectors.36
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`35. Evzio® is also available to public interest purchasers, including
`
`government agencies, health departments, first responders, and other qualifying
`
`
`33 See Senate Evzio® Report at 4–5.
`
`34 Jones Decl. Part IX.C; Williams Decl. ¶¶ 30.
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`35 See Senate Report at 5; see also Kaléo Evzio2You.
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`36 Kaléo Authorized Generic.
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`
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`26
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 26
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`groups, direct from Kaléo at a discounted, “public access” price. The public access
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`price was initially set in April 2018 at $360 per carton or $180 per dose.37 In
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`December 2018, Kaléo reduced Evzio®’s public access price to $178 per carton, or
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`$89 per dose.38
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`4.
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`Narcan® Nasal Spray
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`36. Narcan® Nasal Spray is the first and only FDA-approved nasal spray
`
`formulation of naloxone for the treatment of known or suspected opioid overdose.
`
`The trade name “NARCAN” was introduced by Endo Pharmaceuticals, Inc.
`
`(“Endo”) in the United States in 1971 in connection with the first FDA-approved
`
`naloxone intravenous injection product.39 Adapt acquired the right to use the trade
`
`name “NARCAN” from Endo in May 2015 for a 2 percent royalty. This rate
`
`reflects that although “NARCAN” had some recognition, it was not widely known
`
`outside of medically trained professionals.40
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`37. Adapt submitted a New Drug Application (“NDA”) for 4 mg/0.1 mL
`
`Narcan® Nasal Spray to the FDA on July 27, 2015, and was granted fast-track
`
`
`37 Kaléo Public Access.
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`38 Kaléo Authorized Generic.
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`39 Karas Decl. ¶ 53.
`
`40 Karas Decl. ¶ 54.
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`27
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 27
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`designation as well as priority review.41 At the time of this NDA submission, the
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`FDA had approved naloxone only in injectable formulations.42 Narcan® Nasal
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`Spray received FDA approval on November 18, 2015.43 Commercial availability
`
`of 4 mg Narcan® Nasal Spray in the United States began on February 25, 2016.44
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`38. Narcan® Nasal Spray is administered to individuals having a known
`
`or suspected opioid overdose through a three-step process: (1) open the package,
`
`(2) place the tip of the device in either of the patient’s nostrils, and (3) press the
`
`plunger to release the dose into the patient’s nasal cavity.45 Each single-use dose
`
`of 4 mg Narcan® Nasal Spray delivers 4 mg of naloxone in a 0.1 mL (100
`
`microliters) nasal spray.46
`
`
`41 Adapt Fast Track; Adapt Priority Review.
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`42 Adapt Fast Track.
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`
`
`43 Adapt Narcan® Nasal Spray Approved.
`
`44 Adapt Narcan® Nasal Spray Available. I understand that the FDA subsequently
`
`approved a 2 mg/0.1 mL version of Narcan® Nasal Spray, but that it has never
`
`been marketed or commercialized. Karas Decl. ¶ 10.
`
`45 Narcan® Nasal Spray Label.
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`46 Karas Decl. ¶¶ 8; 41.
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`
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`28
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 28
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`39. Narcan® Nasal Spray is sold in cartons containing two single-use
`
`dispensers.47 The WAC of Narcan® Nasal Spray is $125 per carton of two
`
`devices, which is the price Adapt charges to traditional commercial wholesalers.48
`
`Narcan® Nasal Spray is also available to public interest buyers at a discounted
`
`price of $75 per carton of two devices when purchased directly from Adapt.49
`
`40. Both the WAC and the public interest price of Narcan® Nasal Spray
`
`have not changed since its commercial launch of in February 2016.50 According to
`
`Mr. Karas, the relatively low price of Narcan® Nasal Spray and the decision not to
`
`increase that price reflect Adapt’s goal of ensuring that the product remains
`
`affordable and accessible to all patients and consumers in both the retail and public
`
`interest market segments.51
`
`41. Between the commercial launch in February 2016 and Q3 2019,
`
`Adapt has sold approximately
`
`f Narcan® Nasal Spray
`
`
`47 Karas Decl. ¶ 8.
`
`48 Karas Decl. ¶ 19.
`
`49 Karas Decl. ¶ 29.
`
`50 Karas Decl. ¶¶ 19, 29.
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`51 Karas Decl. ¶¶ 19, 29; see also Narcan® Nasal Spray Consumer FAQs at 6.
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`
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`29
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`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00694
`Page 29
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`DECLARATION OF ROBERT L. VIGIL PH.D.
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`worldwide, generating approximately
`
` in gross sales revenue and
`
` in net sales revenue.52
`
`D. Naloxone Distribution and Reimbursement
`
`42. Narcan® Nasal Spray and other naloxone products are distributed to
`
`both retail pharmacies and public interest entities such as EMS, law enforcement,
`
`and community-based programs.53 The retail segment comprises the traditional
`
`pharmacy and prescription segment, including retail pharmacies such as CVS and
`
`Walgreens that sell naloxone to consumers who have a prescription from a
`
`physician or under a state standing order.54 The public interest segment includes
`
`government agencies, first responders (law enforcement, EMS, etc.), community
`
`organizations, treatment centers, prisons, and other public entities that purchase
`
`naloxone for administration or distribution to members of the community.55
`
`1.
`
`Retail Segment
`
`43. The retail segment includes sales to consumers through traditional
`
`retail pharmacies. In this segment, pharmaceutical manufacturers typically sell
`
`