`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________________
`
`ARGENTUM PHARMACEUTICALS LLC
`Petitioner
`v.
`CIPLA LIMITED
`Patent Owner
`
`_____________________
`Case No. IPR2017-00807
`U.S. Patent No. 8,168,620
`_____________________
`
`DECLARATION OF JOHN C. JAROSZ
`
`
`
`
`
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`CIP2005
`Argentum Pharmaceuticals LLC v. Cipla Ltd.
`IPR2017-00807
`
`1
`
`CIPLA LTD. EXHIBIT 2035 PAGE 1
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`

`

`I.
`
`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`TABLE OF CONTENTS
`
`INTRODUCTION ......................................................................................... 2
`A. Assignment ............................................................................................ 2
`B. Qualifications ........................................................................................ 3
`C.
`Evidence Considered............................................................................. 5
`D.
`Compensation ........................................................................................ 9
`II. BACKGROUND .......................................................................................... 10
`A. Dymista® ............................................................................................ 10
`B. Duonase ............................................................................................... 11
`C. Allergic Rhinitis Marketplace ............................................................. 12
`1.
`Generic Products ....................................................................... 13
`2.
`OTC Products ........................................................................... 15
`III. COMMERCIAL SUCCESS ANALYSIS ................................................. 17
`A. Dymista® ............................................................................................ 18
`1.
`Absolute Success ...................................................................... 18
`2.
`Relative Success ....................................................................... 19
`B. Duonase (and Imitator Products) ........................................................ 24
`1.
`Absolute Success ...................................................................... 24
`2.
`Relative Success ....................................................................... 25
`C. Nexus of Patent to Dymista® Success ................................................ 26
`D. Nexus of Patent to Duonase Success .................................................. 33
`E.
`Third Party Assessments ..................................................................... 35
`F.
`Importance of Non-Patented Contributions ........................................ 38
`1.
`Pricing ....................................................................................... 38
`2. Marketing and Promotion of Dymista® ................................... 41
`3.
`Reputation of Cipla ................................................................... 44
`4.
`Reformulation of Duonase ........................................................ 45
`Revealed Preferences .......................................................................... 46
`G.
`Cipla-Meda License Agreement ......................................................... 48
`H.
`IV. RESPONSE TO ARGENTUM’S PETITION .......................................... 49
`V. CONCLUSION ............................................................................................ 51
`
`
`
`
`
`
`1
`
`
`
`2
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`CIPLA LTD. EXHIBIT 2035 PAGE 2
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`I, John C. Jarosz, do hereby declare, under penalty of perjury, as follows:
`
`I.
`
`INTRODUCTION
`
`1.
`
`
`
`I am over the age of eighteen (18) and otherwise competent to make
`
`this declaration.
`
`A. Assignment
`
`2.
`
`
`
`I and my firm have been retained by Cipla, Ltd. (“Cipla”) to provide
`
`expert analysis and testimony, if necessary, in connection with the above
`
`captioned inter partes review proceeding. I understand that certain claims of
`
`U.S. Patent No. 8,168,620 (“the ’620 Patent”)—claims 1, 4-6, 24-26, 29, 42-
`
`44 (“the challenged claims”)—have been challenged as being unpatentable
`
`by Argentum Pharmaceuticals LLC. (“Argentum”) on the ground that those
`
`claims are obvious.
`
`3.
`
`
`
`I have been asked by counsel for Cipla to assess whether 1) Mylan
`
`Specialty LP’s (“Mylan’s”) Dymista® (“Dymista”) commercial product in
`
`the U.S.1, 2) Cipla’s Duonase (“Duonase”) commercial product in India, and
`
`3) a number of imitator products launched by Cipla’s competitors in India
`
`
`
`1
`
`As stated below, Mylan’s predecessor-in-interest to the Dymista® product
`
`was Meda Pharmaceuticals, Inc. (“Meda”).
`
`2
`
`
`
`3
`
`CIPLA LTD. EXHIBIT 2035 PAGE 3
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`(“Imitator Products”) are marketplace successes, and whether their success
`
`is attributable to the inventions described in the challenged claims of the
`
`’620 Patent.
`
`4.
`
`
`
`Based upon my review of the available evidence, it is my opinion that
`
`Dymista® and Duonase (and its imitator products) are marketplace
`
`successes, and that the success of these products is due, in large part, to the
`
`benefits and advantages of the challenged claims. As a result, the
`
`challenged claims of the patent at issue have been a commercial success.
`
`B. Qualifications
`
`5.
`
`
`
`I am a Managing Principal of Analysis Group, Inc. (“AG”) and
`
`Director of the firm’s Washington, D.C. office. AG is an economic,
`
`financial, strategy, and healthcare consulting firm with offices in Beijing,
`
`China; Boston, MA; Chicago, IL; Dallas, TX; Denver, CO; Los Angeles,
`
`Menlo Park, and San Francisco, CA; Montreal, Canada; New York, NY; 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,
`
`Nebraska. Thereafter, I was a fellowship student in the Ph.D. program in
`
`3
`
`
`
`4
`
`CIPLA LTD. EXHIBIT 2035 PAGE 4
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`Economics at Washington University in St. Louis, Missouri. I completed
`
`most of the requirements for my Ph.D., but left before finishing my degree. I
`
`ultimately was awarded an M.A. in Economics. I worked for some period
`
`after that and then enrolled in law school at the University of Wisconsin in
`
`Madison, Wisconsin, from which I received a J.D. I am a member of the
`
`State Bar of Wisconsin, but have been on inactive status for the past 32
`
`years.
`
`7.
`
`
`
`I have spent my entire professional career as a practicing economist.
`
`Almost all of my work has involved evaluating the economics of intellectual
`
`property (“IP”) protection. The bulk of that work has dealt with issues of
`
`damages estimation, commercial success, FRAND compliance, irreparable
`
`harm, and allegations of antitrust violations. I have testified in hundreds of
`
`such matters.
`
`8.
`
`
`
`Among other things, I have published articles in academic and
`
`professional journals, edited a treatise on IP licensing, given presentations
`
`and speeches to a wide variety of groups, and taught classes at various law
`
`schools.
`
`9.
`
`
`
`Though my firm and I have been engaged in a wide range of
`
`industries, the largest amount of my work has been in pharmaceutical
`
`4
`
`
`
`5
`
`CIPLA LTD. EXHIBIT 2035 PAGE 5
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`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 CIP2006. It describes all of my testimony
`
`(either in deposition or at trial), publications, and presentations.
`
`11.
`
`
`
`In addition, I was previously an expert and trial witness for Cipla in
`
`the related district court litigation concerning the ’620 patent against Apotex
`
`Inc. and Apotex Corp. (collectively, “Apotex”).
`
`C. Evidence Considered
`
`12.
`
`
`
`In undertaking my study, I considered information from a variety of
`
`sources, each of which is a type that is reasonably relied upon by experts in
`
`my field. In the table below, I have listed the documents that I and/or people
`
`working with me at AG reviewed in preparing this report.
`
`Cipla’s
`Exhibit #2
`2001
`2003
`
`Description
`Warner Carr, M.D. Declaration
`Alexander Dominic D’Addio, Ph.D. Declaration
`
`
`
`2 Throughout this declaration, I will refer to these exhibits as “[Exhibit Number],
`
`[paragraph/page number(s)].”.
`
`5
`
`
`
`6
`
`CIPLA LTD. EXHIBIT 2035 PAGE 6
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`John C. Jarosz Curriculum Vitae
`Hugh David Charles Smyth, Ph.D. Declaration
`Redacted Proposed Joint Pretrial Order, November 10, 2016, Meda
`Pharmaceuticals Inc. and Cipla Ltd., v. Apotex Inc. and Apotex
`Corp., Case No. 1:14-cv-01453-LPS (D.I.137)
`Bench Trial Transcript, Volume D, December 16, 2016, Meda
`Pharmaceuticals Inc. and Cipla Ltd., v. Apotex Inc. and Apotex
`Corp., Case No. 1:14-cv-01453-LPS (D. Del.)
`DataMonitor, “Pipeline and Commercial Insight: Allergic Rhinitis,”
`July 2010 (PTX0396)
`2006 Cipla-Meda License Agreement with Quality Agreement
`(PTX1016)
`2011 First Amendment to Cipla-Meda Agreement (PTX0282)
`GlobalData, “Allergic Rhinitis - Global Drug Forecast and Market
`Analysis to 2024,” September 2015 (PTX0397)
`IMS data for U.S. allergic rhinitis products, 01.2012-04.2016
`(PTX0929)
`2011.11.02 Email and attachment from Ashwini Dumaswala to
`Bryan Roecklein re: 2012 Dymista® Strategic Plan (PTX1118)
`Apotex Website, “All Products - Apotex Products: United States,”
`http://www.apotex.com/us/en/products/
`search.asp?qt=All&qs=&t=All%20Products (accessed June 22,
`2016) (PTX0420)
`Dymista® Prescribing Information 2015 (PTX0024)
`Drug Approval Package: Dymista® (PTX0392)
`Meda AB Interim Report, Jan.-Sept. 2012 (PTX0393)
`Cipla Website, “At a Glance” http://www.cipla.com/en/corporate-
`information/at-a-glance.html (accessed June 28, 2016) (PTX0379)
`Duonase Nasal Spray – Prescribing Information (PTX0134)
`Cipla Website, “Respiratory,” http://www.cipla.com/en/our-
`businesses/strategic-business-units/respiratory.html (accessed June
`28, 2016) (PTX0380)
`Duonase competitor products, February MAT Nasal Sprays, 2005-
`2016 (PTX0816)
`
`2006
`2007
`
`2017
`
`2021
`
`2048
`
`2049
`2050
`2053
`
`2062
`
`2064
`
`2065
`
`2066
`2067
`2068
`2069
`2070
`
`2071
`
`2072
`
`6
`
`
`
`7
`
`CIPLA LTD. EXHIBIT 2035 PAGE 7
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`2014.11.14 Email and attachment from Stuart Loeschto Betsy
`Orrison re: Dymista® US Marketing Plan 2015 (PTX0271)
`Dymista® Competitor Benchmarking Presentation 2012 (PTX0926)
`Meda – 2016 Dymista® Brand Plan (PTX0406)
`FDA Website, “Prescription to Over-the-Counter (OTC) Switch
`List,”
`http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedical
`ProductsandTobacco/CDER/ucm106378.htm (accessed June 28,
`2016) (PTX0407)
`Johnson & Johnson Press Release, “RHINOCORT ® Allergy Spray
`Now Available Over The Counter Nationally,” February 8, 2016,
`http://www.jnj.com/news/all/RHINOCORT-Allergy-Spray-Now-
`Available-Over-The-Counter-Nationally (accessed June 30, 2016)
`(PTX0408)
`2011.11.02 Email and attachment from Ashwini Dumaswala to
`Bryan Roecklein re: 2012 Dymista® Strategy Plan (PTX0267)
`MEDA Presentation re: staffing, timelines for expansion, price
`comparisons (2011) (PTX0871)
`FDA Website, “First-Time Generic Drug Approvals - March 2016,”
`http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugs
`areDevelopedandApproved/DrugandBiologicApprovalReports/AND
`AGenericDrugApprovals/ucm489688.htm (accessed June 28, 2016)
`(PTX0424)
`Renavatio Presentation & Meda Presentation - Dymista® Phase II
`Positioning Exploration (PTX0426)
`Transmittal of Advertisements and Promotional Labeling for Drugs
`and Biologics for Human Use to the U.S. Food and Drug
`Administration for Dymista®, June 17, 2015 (PTX0914)
`Transmittal of Advertisements and Promotional Labeling for Drugs
`and Biologics for Human Use to the U.S. Food and Drug
`Administration for Dymista®, June 16, 2015 (PTX0916)
`Transmittal of Advertisements and Promotional Labeling for Drugs
`and Biologics for Human Use to the U.S. Food and Drug
`Administration for Dymista®, November 26, 2012 (PTX0917)
`Transmittal of Advertisements and Promotional Labeling for Drugs
`and Biologics for Human Use to the U.S. Food and Drug
`Administration for Dymista®, June 29, 2015 (PTX0915)
`
`2074
`2075
`2076
`
`2077
`
`2078
`
`2079
`
`2080
`
`2081
`
`2082
`
`2083
`
`2084
`
`2085
`
`2086
`
`7
`
`
`
`8
`
`CIPLA LTD. EXHIBIT 2035 PAGE 8
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`Cipla Duonase Marketing Presentation (PTX0315)
`Meda/Cipla Powerpoint – Complete Picture (PTX0412)
`University of Utah Health Sciences Radio Website, “The Differences
`Between Allergic Rhinitis and Sinusitis,”
`https://healthcare.utah.edu/the-scope/shows.php?shows=0_hf3tm0mc
`(accessed June 28, 2016) (PTX0429)
`Family Allergy & Asthma Care of Montana Website, “If one is good,
`2 are better… A new nasal spray containing 2 medications!,”
`http://www.familyallergyasthmacare.com/2013/03/if-one-is-good-2-
`are-better-a-new-nasal-spray-containing-2-medications/ (accessed
`June 28, 2016) (PTX0430)
`Key Opinions in Medicine Website, “Dymista,”
`http://keyopinions.info/downloads/dymista-class-treatment-allergic-
`rhinitis/ (accessed June 28, 2016) (PTX0431)
`Samuelson, Paul A., and Nordhaus, William D. Economics (19th ed.,
`2010), p. 49 (PTX0415)
`Dymista® Marketing Plan 2015 (PTX0438)
`Dymista® Formulary Coverage Powerpoint 2014 (PTX0892)
`Meda Memorandum re: CVS Caremark Formulary Decisions 2015
`(PTX0447)
`Bagwell, K. “The Economic Analysis of Advertising,” Handbook of
`Industrial Organization (2007), eds. M. Armstrong and R. Porter,
`vol. 3, pp. 1703-1706 (PTX0432)
`Ching, A., and Ishihara, M. “Measuring the Informative and
`Persuasive Roles of Detailing on Prescribing Decisions,” April 27,
`2010, Working Paper (PTX0433)
`Berndt, Ernst R. “The U.S. Pharmaceutical Industry: Why Major
`Growth In Times of Cost Containment?” Health Affairs, 20(2): 100-
`114; 2001 (PTX0434)
`Bloomberg Website, “Pharmaceutical Company Overview of Mylan
`Specialty L.P.,”
`https://www.bloomberg.com/research/stocks/private/snapshot.asp?pri
`vcapId=3346320 (accessed May 19, 2017)
`Mylan Press Release, “Mylan Completes Acquisition of Meda,”
`http://newsroom.mylan.com/2016-08-05-Mylan-Completes-
`Acquisition-of-Meda (accessed May 19, 2017)
`
`2087
`2088
`
`2089
`
`2090
`
`2091
`
`2092
`2093
`2094
`2095
`
`2096
`
`2097
`
`2098
`
`2099
`
`2100
`
`8
`
`
`
`9
`
`CIPLA LTD. EXHIBIT 2035 PAGE 9
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`IMS data for Indian allergic rhinitis nasal spray products, 12.2010-
`12.2014 (PTX0823)
`IMS data for Indian allergic rhinitis nasal sprays products, March
`2013 – March 2017
`Duonase competitor products, February MAT Nasal Sprays, 2005-
`2017
`Hitti, Miranda. “FDA Oks Generic Version of Flonase,” WebMD,
`http://www.webmd.com/allergies/news/20060222/fda-oks-generic-
`version-of-flonase (accessed May 26, 2017)
`“What is a Tiered Formulary and What Does it Mean for Me?,”
`Medicare News and Updates,
`https://blog.medicaremadeclear.com/blog/bid/78229/WhatisaTieredF
`ormularyandWhatDoesitMeanforMe (accessed May 26, 2017)
`IMS data for U.S. allergic rhinitis products, May 2011 - April 2017
`
`2123
`
`2124
`
`2126
`
`2130
`
`2131
`
`2132
`
`13.
`
`
`
`This declaration refers to several Tabs, which are appended to the end
`
`of this document. Tabs 1-7, and 9-12 represent summaries of IMS Health
`
`(“IMS”) data. IMS is one of the largest vendors of physician-prescribing
`
`data in the world. Among other things, it reports revenue, prescription, and
`
`unit data, and is routinely relied upon by pharmaceutical industry
`
`professionals and researchers. The data obtained from IMS are voluminous
`
`and are not easily reviewed outside of electronic format. These Tabs are
`
`accurate summaries of the IMS data I reviewed.
`
`D. Compensation
`
`14.
`
`
`
`My firm bills Cipla on a time-and-materials basis for my work and
`
`that of my colleagues. My customary and usual hourly billing rate for the
`
`9
`
`
`
`10
`
`CIPLA LTD. EXHIBIT 2035 PAGE 10
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`time spent consulting, which includes my study of pertinent issues and
`
`materials and which applies in this matter, and any testimony I may give, is
`
`$735. I also have directed the efforts of other staff members of AG, whose
`
`customary and usual hourly billing rates range from $295 to $590. Our
`
`reasonable expenses are being compensated. My compensation is not, in any
`
`way, dependent on the outcome of this proceeding or on the substance of my
`
`opinion.
`
`II. BACKGROUND
`
`A. Dymista®
`
`15.
`
`
`
`Mylan Specialty LP (“Mylan”) is a wholly-owned U.S. subsidiary of
`
`Mylan N.V., and focuses on developing prescription pharmaceutical
`
`products. CIP2099, 1. Mylan N.V. acquired Meda in August 2016.
`
`CIP2100, 1. Meda (via its predecessor MedPointe Inc.) is the licensee of
`
`certain intellectual property from Cipla relating to azelastine hydrochloride
`
`(“azelastine”) (an intranasal antihistamine) and fluticasone propionate
`
`(“fluticasone”) (an intranasal corticosteroid) combinations. CIP2049, 1, 3-4.
`
`The agreement granted Meda an exclusive license to manufacture and
`
`market Dymista® in the U.S. CIP2049, 5-6.
`
`16.
`
`
`
`Under the Cipla-Meda license agreement, Meda has manufactured and
`
`10
`
`
`
`11
`
`CIPLA LTD. EXHIBIT 2035 PAGE 11
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`marketed Dymista®, which was approved by the U.S. Food and Drug
`
`Administration (“FDA”) in May 2012, and launched in the U.S. in
`
`September of that year. CIP2066, 1; CIP2067, 1; CIP2068, 2. Dymista®
`
`includes two active ingredients—azelastine and fluticasone. CIP2066, 1.
`
`17.
`
`
`
`I understand from counsel that Mylan took over responsibility for
`
`marketing, advertising, promoting, and selling Dymista® in the U.S. as of
`
`March 31, 2017. In my analysis, however, I have relied upon many Meda
`
`documents, as indicated below, given how recently Mylan took over
`
`commercial responsibility from Meda.
`
`B. Duonase
`
`18.
`
`
`
`Cipla is a global pharmaceutical company headquartered in Mumbai,
`
`India. CIP2069, 2. Cipla develops and markets branded and generic products
`
`in a wide range of areas, with a particular emphasis on respiratory therapies.
`
`CIP2071, 1. According to its website, “Cipla Respiratory products are
`
`available in over 100 countries” and Cipla’s products include “[a] variety of
`
`nasal sprays for treatment of nasal allergy.” CIP2071, 1-2. I understand that
`
`Cipla is listed as the owner of the ’620 patent.
`
`19.
`
`
`
`In April 2004, Cipla launched a combination formulation product in
`
`India that contains azelastine and fluticasone under the brand name Duonase.
`
`11
`
`
`
`12
`
`CIPLA LTD. EXHIBIT 2035 PAGE 12
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`

`

`CIP2072; CIP2070, 1.
`
`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`
`20.
`
`
`
`Within two and a half years of Duonase’s introduction in the Indian
`
`marketplace, at least two other azelastine/fluticasone combination products
`
`also launched. Tab 8. Since then, I understand from counsel there have been
`
`at least sixteen other imitation azelastine/fluticasone combination products
`
`launched
`
`in
`
`the
`
`Indian marketplace, but only
`
`six of
`
`those
`
`azelastine/fluticasone products embody the challenged claims. Tabs 5 and 8.
`
`Throughout this declaration, I will refer to these products as “Imitator
`
`Products.”
`
`
`
`C. Allergic Rhinitis Marketplace
`
`21.
`
`
`
`According to Dr. Carr, there is a range of drug classes and dosage
`
`forms available to treat allergic rhinitis (“AR”). CIP2001, ¶¶36-44. The
`
`options include antihistamines (both oral products and intranasal products);
`
`decongestants (both oral and nasal); anticholinergics (primarily nasal, but
`
`occasionally oral); leukotriene receptor antagonists (oral); mast cell
`
`inhibitors (nasal); corticosteroids (primarily nasal, but occasionally oral or
`
`parental); saline (nasal); and allergen-specific immunotherapy (injection).
`
`22.
`
`
`
`Patients, both adults and children, exhibit a general preference for oral
`
`treatments over nasal treatments. CIP2048, 126 and 131. According to
`
`12
`
`
`
`13
`
`CIPLA LTD. EXHIBIT 2035 PAGE 13
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`

`

`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`DataMonitor, “[The AR] market [is] dominated by tablets.” CIP2048, 126
`
`and 131. According to GlobalData, that is particularly true for the treatment
`
`of milder forms of AR. CIP2053, 70.
`
`23.
`
`
`
`For those patients suffering from more severe AR symptoms or where
`
`symptoms are not adequately controlled, oral treatments (tablets) are often
`
`deemed to be inadequate. CIP2053, 70-71. For those patients, the best
`
`treatment options are often nasal sprays, like Dymista® and Duonase.
`
`24.
`
`
`
`Over time, the marketplace for nasal sprays has become highly
`
`competitive and challenging. Two specific trends have made it so: 1) the
`
`introduction of generic nasal sprays and 2) the introduction of over-the-
`
`counter (“OTC”) products.
`
`1.
`
`
`
`Generic Products
`
`25.
`
`
`
`In 2007, as shown below in Figure 1, according to a Meda
`
`presentation entitled “Dymista® Marketing Plan 2015,” (CIP2074, 14), the
`
`branded share of the prescription nasal spray marketplace (in terms of total
`
`prescriptions) was approximately 60 percent in 2007. By July 2014, that
`
`share had fallen to less than 20 percent. CIP2074, 14; CIP2075, 2.
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`13
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`14
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`Figure 1
`
`
`
`26.
`
`
`
`Flonase went generic in 2006. CIP2130, 1. Nasonex went generic on
`
`March 22, 2016. CIP2081, 1. The branded share of prescription nasal sprays
`
`has fallen to 3.9 percent as of the first four months of 2017. Tab 1.
`
`27.
`
`
`
`Despite the dramatic shift in the ratio of branded to generic
`
`prescriptions, total revenues for branded products has continued to outpace
`
`generic revenues, according to the Meda presentation entitled “Dymista®
`
`Marketing Plan 2015,” and as shown below in Figure 2. CIP2074, 11.
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`14
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`15
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`Figure 2
`
`
`
`28.
`
`
`
`This phenomenon can also be observed in Tab 2, which shows that
`
`estimated revenues for branded prescription nasal sprays accounted for
`
`approximately 72.8 percent of the total revenues generated by prescription
`
`nasal sprays between 2012 and the first four months of 2016. Tab 2.
`
`29.
`
`
`
`The fact that the share of prescriptions is small and falling for branded
`
`treatments, while the share of revenues generated by branded treatments is
`
`large and has remained quite consistent over time, suggests that the price gap
`
`between branded prescription nasal sprays and generic prescription nasal
`
`sprays is significant and growing. Tabs 1 and 2.
`
`2. OTC Products
`
`30.
`
`
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`In addition to a shift toward generic treatments, the marketplace,
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`15
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`16
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`particularly in the U.S., has experienced a marked shift from the use of
`
`prescription products to the use of OTC products.
`
`31.
`
`
`
`Nasacort was approved for OTC in October 2013. CIP2076, 3;
`
`CIP2077, 1; CIP2074, 24. Flonase was approved for OTC in June 2014.
`
`CIP2076, 3; CIP2077, 1. Rhinocort was approved for OTC in March 2015,
`
`and launched in February 2016. CIP2076, 3; CIP2077, 1; CIP2078.
`
`32.
`
`
`
`As a result, before seeing a physician, over the last several years, AR
`
`sufferers generally have used at least one of the available OTC treatments.
`
`CIP2053, 67. This is reflected below in Figure 3 (which is contained in a
`
`2012 Dymista® strategic plan). CIP2064, 5.
`
`Figure 3
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`
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`
`
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`
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`16
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`33.
`
`
`
`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`According to GlobalData, the “transition of many prescription AR
`
`drugs to OTC status has resulted in many patients being able to access
`
`previously prescribed treatments from the local pharmacy.” CIP2053, 67. In
`
`fact, according to GlobalData, “mild, intermittent AR [is] mostly treated
`
`with OTC therapies.” CIP2053, 70-71.
`
`34.
`
`
`
` The easy access to OTC options has increased the prevalence of self-
`
`diagnosis among AR patients, thereby enhancing marketplace competition.
`
`CIP2053, 23.
`
`35.
`
`
`
`Dymista® launched (and Duonase has competed) in a marketplace
`
`with multiple nasal prescription drug products, and in which a substantial
`
`number of lower-priced alternative treatments have become available.
`
`III. COMMERCIAL SUCCESS ANALYSIS
`
`As informed by counsel, I understand that, to establish commercial
`36.
`
`success of a patented invention, the patentee must show that there is
`
`marketplace success and that the thing (product or method) that is successful
`
`is the invention disclosed and claimed in the patent.
`
`37.
`
`
`
`Based on the evidence I have seen, it is my opinion that Dymista® is a
`
`marketplace success having 1) achieved a significant level of prescriptions
`
`and revenues, and 2) achieved a strong share of the marketplace when the
`
`17
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`shares of its closest competitors stagnated or shrank. Further, it is my
`
`opinion that Duonase and its Imitator Products are a marketplace success
`
`having 1) achieved a significant and growing level of units sold and
`
`revenues and 2) captured approximately 25 percent of nasal spray units sold
`
`and revenues in India.
`
`38.
`
`
`
`Based on the evidence I have seen, it is also my opinion that the
`
`success of Dymista®, Duonase, and the Imitator Products has a nexus to the
`
`’620 patent because 1) those products embody the entirety of the challenged
`
`claims, 2) the success of Dymista®, Duonase, and the Imitator Products is
`
`largely attributable to the benefits of the patented invention, and 3) non-
`
`patented features, like pricing, marketing, promotion, company recognition,
`
`and reformulation are not the predominant drivers of success for Dymista®,
`
`Duonase, and the Imitator Products.
`
`A. Dymista®
`
`1.
`
`Absolute Success
`
`39.
`
`
`
`Since its launch in the U.S. in September 2012, Dymista® has realized
`
`substantial and growing success.
`
`40.
`
`
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`According to IMS Americas data, total prescriptions of Dymista®
`
`increased from approximately 641,212 in 2013 (the first full year that
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`18
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`Dymista® was sold in the U.S.) to 963,299 in 2016 – a compound annual
`
`growth rate (“CAGR”) of 14.5 percent. Tab 1.
`
`41.
`
`
`
`For revenues, IMS Americas reported Dymista® U.S. revenues of
`
`almost $92 million in 2013 and more than $157 million in 2015. Tab 2. This
`
`corresponds to a CAGR of 30.9 percent. Tab 2.
`
`2.
`
`Relative Success
`
`42.
`
`
`
`Dymista® also has been a success relative to other treatments with
`
`which it competes.
`
`a.
`
`Competitive Environment
`
`43.
`
`
`
`As discussed above, Dymista® competes in a crowded marketplace in
`
`which there are many alternatives for the treatment of AR. See ¶¶21, 25-35
`
`above. For the purposes of assessing Dymista®’s performance relative to its
`
`direct competitors, I have compared Dymista®’s performance with the
`
`performance of two sets of competitors used in the treatment of AR: 1) all
`
`branded prescription nasal sprays and 2) all prescription nasal sprays. The
`
`difference between the two sets is that the latter set includes generic
`
`prescription nasal sprays, while the former does not.
`
`44.
`
`
`
`Neither competitive set includes OTC treatments. OTC treatments do
`
`not require a prescription from a physician, unlike Dymista®. As noted
`
`19
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`above (¶32), AR sufferers will typically only visit a doctor as a last resort
`
`after having tried OTC options and found them inadequate. The treatment
`
`alternatives considered by physicians focus on prescription treatments, rather
`
`than medications that can be obtained over-the-counter. CIP2064, 5. And
`
`prescription treatments are consistent with the competitors against whom
`
`Meda compares Dymista®’s performance in its normal course of business.
`
`CIP2079, 36; CIP2074, 15; CIP2080, 12-13 and 20; CIP2075, 3.
`
`b.
`
`Relative Performance
`
`45.
`
`
`
`Since its launch in 2012, Dymista® has established itself as a very
`
`successful drug used in the treatment of AR. Its performance in the
`
`marketplace – in terms of total prescriptions and revenues – has outpaced the
`
`performance of most of its competitors. It now is often perceived as the
`
`option with the highest efficacy. CIP2076, 20.
`
`i.
`
`Branded Marketplace
`
`46.
`
`
`
`Dymista® was notable among branded nasal sprays between 2013 and
`
`2016 as the virtually the only branded nasal spray whose share of
`
`prescriptions increased every year. Tab 1. In fact, between 2013 and 2016,
`
`Dymista®’s share of branded prescription nasal sprays increased from 5.3
`
`percent to 27.3 percent. Tab 3. For the first four months of 2017, its share is
`
`20
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`40.0 percent. Tab 3.
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`
`47.
`
`
`
`Moreover, by 2014, its second full year, Dymista® became the second
`
`most-prescribed branded prescription nasal spray, following only Nasonex
`
`(which accounted for more than 60 percent of all prescriptions of branded
`
`prescription nasal sprays) and currently Dymista® is the most prescribed
`
`branded nasal spray for the treatment of AR in the United States. Tab 3. The
`
`above trends are shown in Figure 4. Tab 11.
`
`Figure 4
`
`
`
`
`
`48.
`
`
`
`On a revenue basis, it has been very successful as well. Dymista®
`
`more than doubled its share of IMS-reported revenues generated by branded
`
`prescription nasal sprays between 2013 and 2015 – increasing from 5.6
`
`21
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`percent to 11.9 percent of such revenues. Tab 4. By its second full year
`
`(2014), Dymista® became the second highest revenue-generating branded
`
`prescription nasal spray, following only Nasonex (which accounted for
`
`between 65.6 and 73.1 percent of all revenues generated by branded
`
`prescription nasal sprays). Tab 4. In the first four months of 2016,
`
`Dymista®’s share of such branded prescription nasal sprays rose to 15.6
`
`percent. Tab 4. These trends are shown in Figure 5. Tab 12.
`
`Figure 5
`
`
`
`
`
`ii.
`
`Branded Plus Generic Marketplace
`
`49.
`
`
`
`Among all prescription nasal sprays, Dymista®’s share of
`
`22
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`23
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`Inter Partes Review of U.S. Patent No. 8,168,620
`Declaration of John C. Jarosz (Exhibit 2005)
`prescriptions has been less than 2 percent. Tab 1. However, Dymista® was
`
`virtually the only branded prescription nasal spray whose share of
`
`prescriptions in this larger marketplace increased every year through 2016.
`
`Tab 1. The share of prescriptions accounted for by generic Flonase increased
`
`from 65.9 percent in 2012 to 77.9 percent in the first four months of 2017.
`
`Ta