Case IPR2022-00142
`Declaration of John C. Jarosz
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________
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`SLAYBACK PHARMA LLC,
`Petitioner,
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`v.
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`EYE THERAPIES, LLC,
`Patent Owner.
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`______________________________________________________
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`Case IPR2022-00142
`Patent 8,293,742
`______________________________________________________
`
`DECLARATION OF JOHN C. JAROSZ
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`I.
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`II.
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`TABLE OF CONTENTS
`INTRODUCTION ........................................................................................... 1
`A. Assignment ............................................................................................ 1
`B.
`Qualifications ........................................................................................ 2
`C.
`Compensation ........................................................................................ 4
`D.
`Evidence Considered ............................................................................. 4
`E.
`Summary of Opinions ........................................................................... 5
`BACKGROUND ............................................................................................. 5
`A.
`Parties .................................................................................................... 5
`1.
`Petitioner ..................................................................................... 5
`2.
`Patent Owner ............................................................................... 6
`Lumify ................................................................................................... 7
`B.
`C. Marketplace ........................................................................................... 8
`1.
`Eye Redness ................................................................................ 8
`2.
`Eye Redness Relievers ................................................................ 9
`Patented Technology ...........................................................................14
`D.
`III. COMMERCIAL SUCCESS ANALYSIS .....................................................15
`A.
`Framework ...........................................................................................15
`1.
`Obviousness ..............................................................................15
`2.
`Elements of Commercial Success .............................................17
`Analysis ...............................................................................................18
`1. Marketplace Success .................................................................18
`2.
`Causal Nexus .............................................................................47
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`B.
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`i
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`Declaration of John C. Jarosz
`IV. CONCLUSION ..............................................................................................65
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`ii
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`I.
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`1.
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`I, John C. Jarosz, hereby declare:
`INTRODUCTION
`A. Assignment
`I have been retained as an expert on behalf of Eye Therapies, LLC (“Eye
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`Therapies” or “Patent Owner”) as well as Bausch & Lomb, Inc. and Bausch
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`& Lomb Ireland Limited (collectively, “Bausch & Lomb”) in connection with
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`the above-captioned inter partes review (“IPR”) proceeding before the U.S.
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`Patent and Trademark Office Patent Trial and Appeal Board (“PTAB”).
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`2.
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`I understand that this IPR proceeding concerns claims 1–6 of U.S. Patent No.
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`8,293,742 B2 (“the ’742 patent”). (EX-1001.) I understand that the Lumify
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`(brimonidine tartrate ophthalmic solution, 0.025%) product that Bausch &
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`Lomb markets and sells in the U.S is an embodiment of certain claims of the
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`’742 patent. (EX-2020, ¶¶266, 301, 311; Patent Owner’s Preliminary
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`Response (IPR2022-00142) at 31-32.)
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`3.
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`I understand that the PTAB has instituted a trial in response to Slayback
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`Pharma LLC’s (“Slayback”) petition. I have been asked by counsel for Patent
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`Owner and Bausch & Lomb to assess whether Lumify has been a marketplace
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`success, and whether such success is attributable to the inventions claimed in
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`the ’742 patent. According to Dr. Robert J. Noecker (“Dr. Noecker”), whose
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`opinions I have reviewed and considered, the use of Lumify is covered by
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`certain of the claims of the ’742 patent. Further, I understand that the ’742
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`1
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`patent is listed in the U.S. Food and Drug Administration’s (“FDA’s”) Orange
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`Book in connection with Lumify. (EX-2079.)
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`4.
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`This declaration summarizes the opinions that I have formed to date. I may
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`modify or supplement my opinions, if necessary and allowed, based on my
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`review and analysis of information provided to me subsequent to the filing of
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`this declaration.
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`B. Qualifications
`I am a Managing Principal of Analysis Group, Inc. (“AG”) and Director of
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`5.
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`the firm’s Washington, DC office. AG is an economic, financial, strategy, and
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`health care consulting firm with offices in Beijing, China; Boston, MA;
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`Brussels, Belgium; Chicago, IL; Dallas, TX; Denver, CO; London, UK; Los
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`Angeles, CA; Menlo Park, CA; Montreal, Quebec; New York, NY; Paris,
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`France; San Francisco, CA; and Washington, DC. AG provides research and
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`analysis in a variety of business, litigation, and regulatory settings.
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`6.
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`I received my B.A. in Economics and Organizational Communications,
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`summa cum laude, from Creighton University in Omaha, NE. Thereafter, I
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`was a fellowship student in the Ph.D. program in Economics at Washington
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`University in St. Louis, MO. I completed most of the degree requirements but
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`left before finishing my Ph.D. degree. I ultimately was awarded an M.A. in
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`Economics. I worked for some period after that and then enrolled in law
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`2
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`school at the University of Wisconsin in Madison, WI. From there, I received
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`a J.D., focusing much of my study on courses examining the intersection
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`between law and economics. I am a member of the State Bar of Wisconsin but
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`have been on inactive status for the past 37 years.
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`7. My resume, which describes all my
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`testimony, publications, and
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`presentations, is attached as Appendix 1. To briefly summarize, I have spent
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`my entire professional career as a practicing economist. Almost all of my work
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`has involved evaluating the economics of intellectual property (“IP”)
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`protection. The bulk of that work has dealt with issues of damages estimation,
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`commercial success, FRAND compliance, injunctive relief, and antitrust
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`violations. I have testified at trial or arbitration in over 100 such matters.
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`8.
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`Among other things, I have published articles in academic and professional
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`journals, edited a treatise on IP licensing, given presentations and speeches to
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`a wide variety of groups, and taught classes at various graduate schools.
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`9.
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`Though our firm and I have been engaged in a wide range of industries, the
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`largest amount of my work has been in pharmaceutical settings, where I have
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`been involved in scores of matters. Those matters often deal with patient,
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`physician, and payer decision-making, as well as supplier actions and
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`reactions to competitive conditions.
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`3
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`C. Compensation
`10. My firm bills Finnegan, Henderson, Farabow, Garrett & Dunner, LLP on a
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`time-and-materials basis for my work and that of my colleagues. My
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`customary and usual hourly billing rate for the time spent consulting, which
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`includes my study of pertinent issues and materials, and which applies in this
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`matter, and any testimony I may give, is $900. I also have directed the efforts
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`of other staff members of AG, whose customary and usual hourly billing rates
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`range from $375 to $630. Our reasonable expenses are being compensated,
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`and our compensation is not, in any way, dependent on the outcome of this
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`proceeding or on the substance of my opinion.
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`D. Evidence Considered
`In undertaking my study, I have considered information from a variety of
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`11.
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`sources, each of which is a type that is reasonably relied upon by experts in
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`my field. Among other things, I have considered the declaration of Mr. John
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`Ferris (“Mr. Ferris”), Senior Vice President of Global Consumer at Bausch +
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`Lomb Corporation, and the declaration of Dr. Robert J. Noecker. In
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`connection with the opinions and conclusions contained in this declaration, I
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`also considered pharmaceutical sales data and marketing materials provided
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`by Bausch & Lomb, as well as academic articles, medical websites, and other
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`publicly-available materials. The materials that I considered are identified in
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`4
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`12. Moreover, I have relied upon my professional judgment and expertise,
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`gathered and developed
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`in many years of estimating damages,
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`valuing/evaluating technology, and assessing commercial success and
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`injunctive relief in intellectual property contexts.
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`E. Summary of Opinions
`13. Based upon my review and analysis of the evidence that I have received to date,
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`it is my opinion that the commercial embodiment of certain claims of the ’742
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`patent, Lumify, has been a marketplace success. Moreover, it is my opinion
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`that this success, in large part, has been driven by the benefits attributable to
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`the inventions claimed in the ’742 patent. As a result, the inventions claimed
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`in the ’742 patent have been a commercial success.
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`II.
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`BACKGROUND
`A. Parties
`Petitioner
`1.
`14. Founded in 2011, Petitioner Slayback is a pharmaceutical company based in
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`Princeton, New Jersey with operations in the U.S., India, and Europe. (EX-
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`2140.) Slayback sells complex generic and specialty pharmaceutical products,
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`including medications for genetic disorders, infectious diseases, and
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`contraception. (EX-2126; EX-2127; EX-2128; EX-2129; EX-2142.)
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`5
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`Patent Owner
`2.
`15. Established in 2010 by Lee Nordan, Robert Rowlett, and Gerald Horn, Patent
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`Owner Eye Therapies is a pharmaceutical company headquartered in Dana
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`Point, California. (EX-2122.) Eye Therapies partnered with Ora, Inc., a
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`private research company, to develop an eye redness reliever. (EX-2124.)
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`16.
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`In 2013, Eye Therapies granted Bausch & Lomb Ireland Limited, an affiliate
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`of Bausch & Lomb, Inc., an exclusive global license to, among other things,
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`the ’742 patent and the application that later issued as the ’425 patent (the
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`“Lumify Patents”). (EX-2118; EX-2124.)
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`17. Bausch & Lomb began as an optical goods store located in New York in 1853.
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`(EX-2083.) Since then, Bausch & Lomb and its subsidiaries have expanded
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`to over 30 commercial locations and over 10 manufacturing locations across
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`North America, South America, Europe, Asia and Oceania, and Africa. (EX-
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`2082.) In May 2013, Valeant Pharmaceuticals International, Inc. acquired
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`Bausch + Lomb Holdings Incorporated and subsequently changed the name
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`to Bausch Health Companies Inc. (“Bausch Health”).1 (EX-2105; EX-2106.)
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`Bausch Health’s portfolio comprises over 400 products, including contact
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`1
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`lenses, lens and eye care products, ophthalmic pharmaceuticals, and
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`ophthalmic surgical devices and instruments. (EX-2083.)
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`Declaration of John C. Jarosz
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`In May 2022, Bausch Health separated its eye-health business into an
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`independent publicly-traded entity, Bausch + Lomb Corporation. (EX-2067
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`at 6.)
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`18. For the fiscal year ending December 31, 2021, Bausch Health reported
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`approximately $8.43 billion in revenues. (EX-2074 at 3.) For the same time
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`period, Bausch + Lomb Corporation reported $3.77 billion in revenues, $2.34
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`billion of which was associated with the Vision Care/Consumer Health Care
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`segment. (EX-2070 at 5.)
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`B. Lumify
`19. On February 27, 2017, Bausch & Lomb submitted New Drug Application
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`(“NDA”) No. 208144 to the FDA for marketing approval of Lumify
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`(brimonidine tartrate ophthalmic solution, 0.025%). (EX-2065.) Lumify is an
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`over-the-counter (“OTC”) eye drop and is approved for relieving redness of
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`the eye due to minor eye irritations. (EX-2065; EX-2103.) Lumify was
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`launched commercially in the U.S. on May 7, 2018. (EX-2103.)
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`20. Bausch & Lomb subsequently submitted supplemental NDAs and received
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`five supplemental approvals in February 2019, April 2019, March 2020,
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`September 2020, and November 2021
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`to market new packaging
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`configurations and fill sizes, as well as make regular updates to labeling.
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`Lumify has been approved to be sold as a single-dose sample (0.4 milliliters),
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`in a 2.5 milliliter bottle, in a 5.0 milliliter bottle, in a 7.5 milliliter bottle, and
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`in a pack with two 7.5 milliliter bottles. (EX-2060; EX-2061; EX-2062; EX-
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`2063; EX-2064.)
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`21. The Lumify carton label indicates that adults and children five years and older
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`should apply one drop per affected eye, and it may be applied no more than
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`four times daily (every 6–8 hours). (EX-2108; EX-2151.) Lumify is sold
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`online and in physical stores at major drugstores and big-box retailers,
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`including Walmart, Target, and CVS. (EX-2094; EX-2143; EX-2149.)
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`Lumify is also available for online purchase at Amazon.com. (EX-2081.)
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`C. Marketplace
`I am not a medical doctor. Among other things, and importantly, I have
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`22.
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`considered the declaration of Dr. Noecker to inform my opinions here. I
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`provide the description below as background.
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`1. Eye Redness
`I understand from Dr. Noecker that eye redness is a common ophthalmic
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`23.
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`condition caused by vasodilation, which is an increase in the diameter of blood
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`vessels on the eye and the influx of blood that “congests” those vessels. (EX-
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`2020, ¶45.) As explained by Dr. Noecker, eye redness has several potential
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`causes, including conjunctivitis, foreign body, environmental irritation, and
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`dryness. (EX-2020, ¶¶47-51.) I further understand that a common side effect
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`of glaucoma medications is eye redness, which can lead to decreased patient
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`adherence with glaucoma therapy. (EX-2020, ¶46.) I understand that patients
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`affected by eye redness may experience social stigma, as red eyes are often
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`associated with drinking, drug abuse, or lack of sleep. (EX-2020, ¶46.)
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`2. Eye Redness Relievers
`i. Overview
`24. Various active ingredients have been used in redness reliever eye drops for
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`decades, with naphazoline hydrochloride and tetrahydrozoline hydrochloride
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`being common active ingredients used in redness relievers sold today. (EX-
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`2020, ¶58; EX-2066 at 11.) I understand that as of the time of invention here,
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`no brimonidine product had ever been approved by the FDA for the reduction
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`of redness. (EX-2020, ¶¶57, 86-89.)
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`25.
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`In 2018, Lumify’s launch introduced the first and only OTC eye drop
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`developed with low-dose brimonidine tartrate for the treatment of eye redness.
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`(EX-2103.) I understand that brimonidine tartrate was the first new active
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`ingredient to be approved for this indication in decades. (EX-2020, ¶¶56-58,
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`266, 279.)
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`26.
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`I understand that redness reliever eye drops with other active ingredients
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`typically are initially effective but become less effective with repeated use
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`over time, a phenomenon known as tachyphylaxis, which can lead to overuse
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`Case IPR2022-00142
`Declaration of John C. Jarosz
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`and ultimately chronic red eye that persists even after discontinuing the eye
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`drops. (EX-2020, ¶¶52, 59-60.) Those redness relievers also are associated
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`with rebound hyperemia, i.e., a rebound of worse redness symptoms upon
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`treatment discontinuation. (EX-2020, ¶¶51-52, 59-60.) I further understand
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`that redness relievers with active ingredients other than naphazoline
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`hydrochloride, tetrahydrozoline hydrochloride, and brimonidine tartrate are
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`available but account for a relatively small share of the marketplace today.
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`(See, e.g., EX-2058; EX-2139.) Below, I provide brief summaries of OTC eye
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`drops that are included in the “redness reliever” category in data from
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`Information Resources, Inc. (“IRI”) that Bausch & Lomb uses in the normal
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`course of business.2 (EX-2023, ¶¶27-28, 30; EX-2057; EX-2058.)
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`ii. Naphazoline Hydrochloride and Tetrahydrozoline
`Hydrochloride
`27. Several companies sell eye redness relievers containing naphazoline
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`hydrochloride or tetrahydrozoline hydrochloride as the active ingredient.
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`I understand that the “redness reliever” category in the IRI data obtained by
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`2
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`Bausch & Lomb includes products
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`Declaration of John C. Jarosz
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`a. Advanced Eye Relief®
`28. The Advanced Eye Relief® product line, launched in 2010 by Bausch &
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`Lomb, includes the “Redness” and “Maximum Redness” products, which are
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`marketed as eye redness relievers. (EX-2084; EX-2098.) Advanced Eye
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`Relief®’s active ingredient is naphazoline hydrochloride at concentrations of
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`0.012 percent and 0.03 percent for the “Redness” and “Maximum Redness”
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`products, respectively. Advanced Eye Relief®’s recommended dosage is one
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`to two drops per affected eye up to four times per day. (EX-2119; EX-2120.)
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`b. Clear Eyes®
`29. The Clear Eyes® product line, launched in 2010 by Prestige Consumer
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`Healthcare, Inc., includes several products marketed as eye redness relievers,
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`such as Clear Eyes® Complete for Sensitive Eyes, Clear Eyes® Redness
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`Relief, and Clear Eyes® Maximum Redness Relief. (EX-2086; EX-2099; EX-
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`2123.) The Clear Eyes® products most commonly use naphazoline
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`hydrochloride at a concentration of 0.012 or 0.03 percent as the active
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`ingredient, with select products instead using 0.05 percent tetrahydrozoline
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`hydrochloride or 0.20 percent phenylephrine hydrochloride. (EX-2087; EX-
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`2088; EX-2089; EX-2091; EX-2092.) Clear Eyes® products’ recommended
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`dosage is one to two drops per affected eye up to four times per day. (EX-
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`2090.)
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`c. Rohto®
`30. The Rohto® product line, launched in the U.S. in 2001 by The Mentholatum
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`Company (a wholly owned subsidiary of Rohto Pharmaceutical Co., Ltd.),
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`includes multiple products marketed as eye redness relievers, including Max
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`Strength Redness Relief Eye Drops, All In One Multi-Symptom Relief Eye
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`Drops, and Cool Relief Eye Drops. (EX-2095; EX-2138; EX-2145.) Rohto®’s
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`active ingredients include naphazoline hydrochloride at concentrations of
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`0.012 or 0.03 percent, with other products using
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`tetrahydrozoline
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`hydrochloride at a concentration of 0.05 percent. (EX-2133; EX-2134; EX-
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`2135; EX-2136; EX-2137.) Rohto®’s recommended dosage is one to two
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`drops per affected eye up to four times per day. (See, e.g., EX-2135.)
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`d. Visine®
`31. Visine®, from Johnson & Johnson, has been available for decades. (EX-2020,
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`¶¶266, 281.) The active ingredient in the original formulation of Visine® is
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`tetrahydrozoline hydrochloride at a concentration of 0.05 percent. (EX-2048.)
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`In 1996, the FDA approved an additional formulation of Visine® (then owned
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`by Pfizer Inc.) with a different active ingredient, naphazoline hydrochloride
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`at a concentration of 0.025 percent.3 (EX-2076 at 67; EX-2080.) Visine®’s
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`Formerly known as Visine-A®. (EX-2059.)
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`12
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`recommended dosage is one to two drops per affected eye up to four times per
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`day. (See, e.g., EX-2096.)
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`e. Private Label
`I am aware of several private label, generic eye redness relievers that are
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`32.
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`available in the marketplace. Walgreens and CVS, for instance, both market
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`redness reliever eye drops under their own store brands using either
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`naphazoline hydrochloride at concentrations of 0.012 or 0.03 percent, or
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`tetrahydrozoline hydrochloride at a concentration of 0.05 percent. (EX-2148;
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`EX-2093.) Rite Aid also offers generic versions of the Clear Eyes® and
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`Visine® eye redness relievers. (EX-2131; EX-2132.)
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`iii. Brimonidine Tartrate
`33. As discussed above, Lumify received FDA approval on December 22, 2017,
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`and became the “first and only over-the-counter (OTC) eye drop developed
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`with low-dose brimonidine tartrate for the treatment of ocular redness.” (EX-
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`2104; EX-2115.)
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`34.
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`I understand that Slayback filed Abbreviated New Drug Application
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`(“ANDA”) No. 216361 with the FDA seeking approval to engage in the
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`commercial manufacture, use, and sale of its generic brimonidine tartrate
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`ophthalmic solution, 0.025%, in the U.S. before the expiration of the Lumify
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`Patents. (EX-2085.) I further understand that on July 29, 2022, Dr. Reddy’s
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`Laboratories Ltd. announced that it had entered into a license agreement with
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`Slayback to acquire the rights regarding its private label equivalent of Lumify.
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`(EX-2097; EX-2085.)
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`35.
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`I understand that brimonidine tartrate was first approved in 1996 for lowering
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`intraocular pressure in patients with open-angle glaucoma or ocular
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`hypertension. (EX-2020, ¶¶66, 81.) I also understand that as of the time of the
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`invention, four brimonidine products had been approved by the FDA, but they
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`were all prescription products and none were approved for the reduction of
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`eye redness. (EX-2020, ¶¶66, 70.)
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`iv. Others
`I am aware of additional eye redness relievers, though they all have a small
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`36.
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`presence in the marketplace. Those eye redness relievers include Similasan®,
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`which is a non-FDA-approved eye redness reliever using “natural active
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`ingredients,” as well as Colirio®, Ocusan®, ProMex Colirio®, CVP®,
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`Genomma®, Medic’s Choice®, Murine®, Refresh®, Solutina®, and Valet®.
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`(See EX-2058; EX-2139.)
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`D. Patented Technology
`I understand that Lumify is a commercial embodiment of certain claims of the
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`37.
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`’742 patent. (EX-2020, ¶¶266, 301, 311; Patent Owner’s Preliminary
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`Response (IPR2022-00142) at 31-32.) According to Dr. Noecker, whose
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`opinions I have reviewed and considered, the use of Lumify is covered by
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`certain claims of the ’742 patent.
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`38. The ’742 patent, titled “Preferential Vasoconstriction Compositions and
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`Methods of Use,” was filed on July 27, 2009, was issued on October 23, 2012,
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`and will expire on August 16, 2030. Claim 1 of the ’742 patent recites “[a]
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`method for reducing eye redness consisting essentially of administering
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`brimonidine to a patient having an ocular condition, wherein brimonidine is
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`present at a concentration between about 0.001% weight by volume and about
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`0.05% weight by volume.” (EX-1001, at Claim 1.)
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`39. Generally, I understand that Claim 1 of the ’742 patent, embodied by Lumify,
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`results in a treatment that is well tolerated, safe (i.e., minimal side effects,
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`including lack of rebound redness), and efficacious, and does not result in
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`tachyphylaxis even after repeated use over time. (EX-2020, ¶¶93, 311.)
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`40. As discussed above, the active ingredient in Lumify is brimonidine tartrate at
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`a concentration of 0.025 percent. Lumify is indicated for relief of redness of
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`the eye due to minor eye irritations. (EX-2065.)
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`COMMERCIAL SUCCESS ANALYSIS
`A. Framework
`1. Obviousness
`I understand that the purpose of a commercial success analysis in a case where
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`the validity of a patent has been challenged is to assist the fact-finder in
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`III.
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`41.
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`determining whether the patented subject matter would have been obvious to
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`a person of ordinary skill at the time of invention. Evidence of the success of
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`products that embody the patented technology—where that success is, in part,
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`attributable to the patented technology—suggests that the patented technology
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`was not obvious to industry participants during the relevant time period. If it
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`had been obvious, one would have expected economically rational sellers to
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`have adopted the patented technology before patenting occurred.
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`42.
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`In theory, if a product that is expected to be commercially successful was
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`obvious to invent, then other competitors likely would have already developed
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`it. In that case, the market for subsequent entrants to achieve commercial
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`success would be depleted. The potential for achieving commercial success is
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`thought to drive inventors to formulate solutions to existing problems to
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`satisfy marketplace demands. If an inventor develops a product that is
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`commercially successful, presumably others recognized the product’s
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`potential for commercial success, attempted to develop a solution to the same
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`problem, and failed. (EX-2049 at 2077-78.)
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`43.
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`I also understand that many of the facts underlying a commercial success
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`analysis may be relevant to determining whether the patented inventions
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`satisfy a long-felt but unmet need.
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`44.
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`2. Elements of Commercial Success
`I understand that, to establish commercial success, the patentee must show
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`that there is marketplace success of the embodying product or method, and
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`that success is due, in part, to the inventions disclosed and claimed in the
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`patent(s).
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`45.
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`I further understand that the test for commercial success does not require that
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`the patented features of the invention(s) be the only reason for a product’s
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`success. Instead, the patented features must be motivating (or important)
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`factors. Accordingly, the existence of other demand drivers does not negate a
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`showing of commercial success. From an economic perspective, this result
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`makes sense because demand for a product, pharmaceutical or not, is always
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`driven by a host of factors, not just one. (EX-2047 at 48.)
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`46. Further, the embodying product need not be the only or the most successful
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`product in a particular marketplace. If that were the case, commercial success
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`would rarely be found.
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`47.
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`In light of this guidance, I performed a two-part analysis to assess the
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`commercial success of the inventions described in the claims of the ’742
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`patent.
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`48. First, I examined whether Lumify has been successful in the marketplace. For
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`this, I considered the actions of marketplace participants as well as the absolute
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`and relative performance of Lumify.
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`49. Second, I evaluated the nexus between the success of Lumify and the benefits
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`made possible by the patented inventions. For this assessment, I identified
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`the primary benefits of the claimed inventions, and examined the extent to
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`which these benefits contributed to the marketplace success of Lumify.
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`B. Analysis
`1. Marketplace Success
`i. Revealed Preference
`In assessing whether a product has been successful, a useful starting point is
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`50.
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`considering whether the economic decisions and behavior of the participants
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`in the business are consistent with a belief that the product will be or has been
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`a marketplace success.
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`51. The foundation of such an inquiry is the fact that a decision to commit, and
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`continue to commit, resources to the development and sale of any product is
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`an economic/financial choice. No party is compelled to pursue or continue
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`such activities, and all parties involved have the option to deploy or reallocate
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`their resources to other, presumably higher-value, endeavors at any time, if
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`such endeavors exist. In fact, economic theory regarding rational economic
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`decision-making and corporate profit-maximizing behavior suggests that
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`responsible economic decision-makers should allocate resources to activities
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`that are expected to generate the highest net return (i.e., benefits minus costs)
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`that are available, given the opportunities and constraints facing the decision-
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`makers.4
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`52. The decisions and behavior of Slayback, Eye Therapies, and Bausch & Lomb
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`strongly suggest that these companies regarded and continue to regard Lumify
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`as a marketplace success.
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`a. Petitioner
`53. As reflected in this current proceeding, Slayback is interested in marketing a
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`generic version of Lumify. In fact, Slayback has committed substantial
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`resources to pursuing this opportunity, including not only the cost of
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`submitting an ANDA and developing its generic product, but also the cost of
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`litigating to secure the ability to introduce a generic version of Lumify. (EX-
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`2085; EX-2097.)
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`54. The potential pay-off to Slayback from introducing a generic version of
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`Lumify derives from the fact that a generic manufacturer likely can expect to
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`capture a substantial portion of Lumify sales at a discount to the prices
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`charged for Lumify, and still generate substantial profits.
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`The economics literature regards firms as profit-maximizing entities that
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`make decisions to maximize profits subject to constraints. (See, e.g., EX-2046
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`at 35.)
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`55. From an economic perspective, the fact that Slayback has demonstrated its
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`desire and intent to offer a generic version of Lumify is very strong, though
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`not dispositive, evidence that it believes Lumify to be a marketplace success.
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`56.
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`It would make little business sense for Slayback to invest substantial resources
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`into the development of a generic version of Lumify, as well as pursue
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`regulatory approval and participate in this proceeding, unless it believed that
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`the underlying product has been, and will continue to be, a marketplace
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`success. If, in fact, Slayback did not consider Lumify to be a successful
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`product, one would not expect it to spend the time, money, and effort required
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`to introduce a generic version of the product into a marketplace with numerous
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`well-established competitors, many of which have been marketed for decades.
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`(See, e.g., EX-2077; EX-2078; EX-2080.)
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`57. Slayback’s expected returns on generic Lumify must be higher than
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`alternative investment opportunities in order for this decision to be
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`economically rational. Slayback’s portfolio includes products across a range
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`of therapeutic areas and, according to Slayback, it has a “record of numerous
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`sole first-to-file ANDAs, 505(b)(2)s and complex generic filings, approvals
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`and launches” (EX-2140; EX-2141.) Slayback