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`CIVIL ACTION NUMBER:
` 11-3962
`
` TRIAL
`
` UNITED STATES DISTRICT COURT
` FOR THE DISTRICT OF NEW JERSEY
`__________________________________
`HELSINN HEALTHCARE, S.A. and
`ROCHE PALO ALTO, LLC,
` Plaintiffs,
` -vs-
`DR. REDDY'S LABORATORIES, LTD.,
`DR. REDDY'S LABORATORIES, INC.,
`TEVA PHARMACEUTICALS USA, INC.,
`and TEVA PHARMACEUTICAL
`INDUSTRIES, LTD.
` Defendants.
`__________________________________
` Clarkson S. Fisher United States Courthouse
` 402 East State Street
` Trenton, New Jersey 08608
` June 3, 2015
`B E F O R E: THE HONORABLE MARY L. COOPER
`
`UNITED STATES DISTRICT JUDGE
`
`Certified as True and Correct as required by Title 28, U.S.C.,
`Section 753
`
`/S/ Regina A. Berenato-Tell, CCR, CRR, RMR, RPR
`/S/ Carol Farrell, CCR, CRR, RMR, CCP, RPR, RSA
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`Trenton, New Jersey
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`Helsinn Healthcare Exhibit 2002
`Dr. Reddy's Laboratories, Ltd., et al. v. Helsinn Healthcare S.A.
`Trial PGR2016-00007
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`Page 1 of 13
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`A P P E A R A N C E S:
`
`PAUL HASTINGS
`BY: JOSEPH O'MALLEY, ESQUIRE
` ERIC W. DITTMANN, ESQUIRE
` ISAAC S. ASHKENAZI, ESQUIRE
`SAUL EWING
`BY: CHARLES M. LIZZA, ESQUIRE
`Attorneys for the Plaintiffs
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`BUDD LARNER
`BY: STUART D. SENDER, ESQUIRE
` MICHAEL H. IMBACUAN, ESQUIRE
` HUA HOWARD WANG, ESQUIRE
` CONSTANCE S. HUTTNER, ESQUIRE
` KENNETH E. CROWELL, ESQUIRE
`Attorneys for the Defendant, Dr. Reddy's Laboratories
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`WINSTON & STRAWN
`BY: JOVIAL WONG, ESQUIRE
` GEORGE LOMBARDI, ESQUIRE
` JULIA MANO JOHNSON, ESQUIRE
` BRENDAN F. BARKER, ESQUIRE
`LITE DePALMA, GREENBERG, LLC
` BY: MAYRA V. TARANTINO, ESQUIRE
`Attorneys for the Defendant, Teva
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`United States District Court
`Trenton, New Jersey
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`I N D E X
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`WITNESS DIRECT CROSS REDIRECT RECROSS
`
`GIORGIO CALDERARI
`By Mr. Lombardi 9 143
`By Mr. O'Malley 76 169
`By Mr. Sender 158
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`EXHIBITS DESCRIPTION ID. EVID.
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`DTX-1023 174
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`(Both Plaintiffs' and Defendants' exhibit lists to be
`supplied)
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`Colloquy
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`(In open court. June 3, 2015, 9:30 a.m.)
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`THE COURT: Good morning, everyone.
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`ALL: Good morning, your Honor.
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`THE COURT: Ready to proceed?
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`I just had one procedural note as we begin today.
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`Yesterday, of course -- and please be seated -- we started the
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`testimony, and there was reference to exhibits as we went
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`along.
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`MR. LOMBARDI: Yes.
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`THE COURT: Could you place a statement on the record
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`about the admission of exhibits into evidence and what you've
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`agreed?
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`MR. LOMBARDI: Well, the way I had anticipated this
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`would work, your Honor, obviously, we exchanged exhibits as
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`part of the pretrial process. I don't think we put any
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`exhibits up about which there is any dispute, but what I was
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`going to do, I have kept a running list of the exhibit numbers
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`that we have used, and I was, at the end of this witness'
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`testimony, would approach the podium and read into the record
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`the exhibits that we had -- we had used, formally offer them.
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`Plaintiffs can then make their objections to any of
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`them. I don't believe there would be any, but they can make
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`whatever objections, and then they would be offered to your
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`Honor that way.
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`MR. O'MALLEY: And I guess this is as good a time to
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`bring this up as any: This has been -- they have taken, the
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`defendants have taken a position that this is
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`cross-examination.
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`THE COURT: Some of it is. I mean, some of it is
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`just foundational direct, but certainly they have the right to
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`approach as if the doctor were an adverse witness.
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`MR. O'MALLEY: Right. Consistent with that approach,
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`we weren't given notice of any of the exhibits they would use.
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`We asked why not, you know, the evening before, and they said,
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`well, this is cross-examination.
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`So, that being the case, these exhibits -- our
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`perspective is -- aren't being offered as evidence, they're
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`impeachment, and we would argue that they're not admissible as
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`evidence. There hasn't been evidentiary foundations laid for
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`them as they go, such that we could evaluate them one at a
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`time in case there's exceptions to that.
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`So we would object to the admission of these exhibits.
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`MR. LOMBARDI: Well, I would say, your Honor, first,
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`that I would be surprised if there's a legitimate objection to
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`any of these exhibits, given that they are all -- I believe I
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`have used all Helsinn documents. There may be an exception or
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`two there.
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`But putting that aside, I know of no limitation -- just
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`the fact that you use an exhibit on cross-examination doesn't
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`mean it's solely an impeachment document and doesn't mean it
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`doesn't come into evidence.
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`Colloquy
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`THE COURT: All right. Let me just cut through this.
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`If a witness is going to be asked about an exhibit,
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`it's either for impeachment purposes and isn't going to be
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`offered into evidence; or if it's going to be offered into
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`evidence, it must be offered into evidence before the witness
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`is questioned further about it. You lay the foundation. You
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`say now I offer this exhibit in evidence. There's an
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`opportunity -- that is the formal way, as you all know, that
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`documents come into evidence, and they should come into
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`evidence before any substantial testimony about the document
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`is elicited from any witness.
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`It sounds to me as if we should go through the formal
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`process, or there should be a stipulation about the documents.
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`And let me just say to defendants that this is not a
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`jury trial, and I do believe that it would be appropriate for
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`defendants to give notice of -- as best they can -- their list
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`of interrogation exhibits in advance.
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`MR. LOMBARDI: And, your Honor, that's fine, and
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`we'll do that. I just -- so your Honor understands, under the
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`procedure that we all agreed to, cross-examination exhibits
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`were not to be disclosed in advance.
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`So if that's your Honor's rule, then it will be
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`changing the rule. And what your Honor wants is fine, but it
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`will be changing the rule, as I understand it, as to all
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`forward.
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`Colloquy
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`THE COURT: I'm making up a procedure. Other than
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`that, we follow the formal Rules of Evidence procedure, which
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`I think is cumbersome and unnecessary here. I just want to
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`know -- at the end of the day I want to know what documents
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`are in evidence and which are not. And for any substantial
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`testimony from a witness I think the document should be in
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`evidence even if it is on cross-examination.
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`MR. LOMBARDI: Well, my intention is to offer
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`everything that I have used with this witness, and if we need
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`to at the end of the testimony I can go through and indicate
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`that the document there's no authenticity objection, there's
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`no hearsay objection and offer it that way. And if they want
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`to state an objection, I suppose they can. But I guess rather
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`than go back right here at the start I'll do it at the end of
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`the witness' testimony, and we'll see where it takes us.
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`THE COURT: Let's do this at the end of Dr. Calderari
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`being the first witness up to bat. When you think you're
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`finished with all of your questions for him, both sides, or
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`even at the end of your direct, Mr. Lombardi, then take a
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`recess, hand your adversary a list, go through the list
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`together, and don't burden the record with unnecessary
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`colloquy.
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`MR. LOMBARDI: We can do that, your Honor.
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`THE COURT: Is that acceptable, Mr. O'Malley?
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`witnesses, and then all cross-examination witnesses must be
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`disclosed -- exhibits, I apologize, must be disclosed in
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`advance. That's what your Honor --
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`THE COURT: I would prefer that. It would make for a
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`much smoother presentation.
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`MR. O'MALLEY: I would just offer a possible caveat.
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`I mean, most of our cross-examinations are going to be
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`impeachment, and I know I don't plan to offer most of the
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`exhibits I use into evidence, and, therefore, it's not like
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`what we're seeing today, so...THE COURT: Well, I mean, I'm
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`the trier of fact, and if I'm shown a snippet during
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`cross-examination, and I can't go back and look at it later to
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`see what it said, that places the trier of fact in a non-jury
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`presentation at a disadvantage. So, please think it over.
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`MR. LOMBARDI: We can do that and we can talk after
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`this witness about procedures going forward. The one thing on
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`the exhibits generally, your Honor -- just to the extent it
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`gives you some comfort -- the parties in the pretrial order
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`agreed to the authenticity of all documents on the exhibit
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`list that we have used. They agreed that all documents are
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`within the business record exception to the hearsay rule. I
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`don't think there is any relevance objections to any of them,
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`and, so, I don't think that there's a legitimate basis to
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`object to any of the documents that we have used, but I
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`understand your Honor's procedure, and I will use that going
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`MR. O'MALLEY: Yes, your Honor.
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`THE COURT: Okay. Thank you.
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`You can proceed.
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`BY MR. LOMBARDI:
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`Q.
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`A.
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`Q.
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`Good morning, Doctor.
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`Good morning, Mr. Lombardi.
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`Doctor -- and please just answer this question yes or
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`no -- did you talk to your attorneys yesterday about your
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`testimony?
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`THE COURT: Yesterday evening after court or this
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`morning.
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`THE WITNESS: Yes.
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`BY MR. LOMBARDI:
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`Q.
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`And did you talk to your attorneys about the testimony
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`you're going to give today this morning? Again, a yes-or-no
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`answer.
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`A.
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`Q.
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`No.
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`Did you talk to your attorneys last night about the
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`testimony you were going to give today?
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`A.
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`Q.
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`No.
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`Thank you. Now, Doctor, yesterday -- just to orient you
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`to where I'm going so that we're on the same page -- we talked
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`about Phase II studies that were conducted by the scientists
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`at Syntex concerning the formulations -- concerning
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`palonosetron; is that right?
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`Right.
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`Okay. So, I want to ask you a little bit about the Phase
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`A.
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`Q.
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`II studies. I think you mentioned -- just confirm for me if I
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`have this right -- that the studies, the Phase II clinical
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`studies that were done by Syntex...
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`First of all, those were done before 1995; is that
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`right?
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`A.
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`Q.
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`That is right, yes.
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`And you said, I believe, that the Syntex Phase II study
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`was done with palonosetron in a saline solution; is that
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`right?
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`A.
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`Q.
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`Right.
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`And the saline solution formulation with palonosetron is
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`different than the formulation that is -- appears in the
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`patents that we're here talking about today; is that right?
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`A.
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`Q.
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`Right.
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`Okay. Now, you know from your review back at the time
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`Helsinn became involved that Syntex suggested changes in the
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`formulation to be used with palonosetron to go into the Phase
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`III clinical studies and, ultimately, into commercial batches;
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`is that right?
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`A.
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`Q.
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`Right.
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`Okay. And, so, let's look at the -- we looked yesterday
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`at something called the Formulation Book. Do you remember
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`that?
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`A.
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`I remember, yes.
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`Calderari - Direct
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`exhibits are going to be offered and accepted into evidence at
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`the conclusion of this.
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`THE COURT: Is that acceptable to you?
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`MR. LOMBARDI: That is fine with me. I thought your
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`Honor had wanted -- so I just didn't want to shortcut it if I
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`shouldn't shortcut it.
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`THE COURT: That wasn't off the record, Mr.
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`O'Malley, it was all on the record.
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`MR. O'MALLEY: My apology.
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`THE COURT: If it is agreeable to you then you can
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`defer offering your exhibits into evidence, Mr. Lombardi,
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`until you finish with the direct of Dr. Calderari.
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`MR. O'MALLEY: For the record for this exhibit no
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`objection.
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`THE COURT: Okay. And I'm not going to admit it into
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`evidence yet. I will at the conclusion of the direct of Dr.
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`Calderari. And if there should be any objections then we will
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`still have Dr. Calderari here so that we can iron out the
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`objections and allow the full interrogation by both sides of
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`what he has to say.
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`MR. LOMBARDI: Thank you, your Honor.
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`THE COURT: Okay.
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`BY MR. LOMBARDI:
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`Q.
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`Okay.
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`So, Doctor, within this book do you recall that there
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`is specific discussion of the formulation for Phase III
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`Q.
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`And the Formulation Book is a book you saw at the time
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`that you were doing the due diligence on the transaction with
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`Syntex; is that right?
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`A.
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`Q.
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`Yes.
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`So, let's look at DTX-0254, which you saw yesterday if
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`you recall, and we'll put it up on the screen for you.
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`A.
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`Q.
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`Thank you.
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`And there's the cover page. And do you see it says
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`"Formulation Book for Intravenous Dosage Forms"?
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`A.
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`Q.
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`Yes.
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`And the number at the top RS-25259-197 you understand is
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`Syntex's code name for palonosetron?
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`A.
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`Q.
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`Right.
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`And you see it is prepared by Roger Fu and dated
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`May 1995?
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`A.
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`Q.
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`A.
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`Q.
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`Yes.
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`Can you identify Roger Fu for for the record?
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`He was a scientist working for Syntex.
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`Is this the Formulation Book that you saw during the
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`course of due diligence at Helsinn?
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`A.
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`Yes.
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`MR. LOMBARDI: I offer that, your Honor.
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`MR. O'MALLEY: Your Honor, I thought per our
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`agreement off the record we would try and work out what
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`clinical studies?
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`A.
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`They had proposed theoretical formulation for Phase III
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`studies, yes.
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`Q.
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`And let's go to Page DTX-0254-0018 of the document, and
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`let's show the top of the document so you can see what we're
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`looking at, Doctor. It says, "Proposed Marketed Formulations
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`and Phase III Clinical Formulations." That's the section of
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`the book that you just referred to; is that right?
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`A.
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`Q.
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`Yes.
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`And I believe we looked at this yesterday. But just to
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`remind you, if we blow the page out just a little bit, DJ, so
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`we can see the table, we looked at these formulations
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`yesterday, the 89 and the 90, and we really didn't talk about
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`the 91, but we looked at this table yesterday, correct?
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`A.
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`Q.
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`We did, yes.
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`All right. Now, Syntex talked about its rationale for
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`the formulation it was proposing for the Phase III clinical
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`studies in this book, didn't it?
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`A.
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`Q.
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`Yes, they did.
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`So, let's look at the next page, DTX-0254-0019, and the
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`title is actually "Formulation Rationale," correct?
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`A.
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`Q.
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`Uh-huh.
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`I'm sorry, you have to answer yes or no so the court
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`reporter can get it.
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`coming up with Phase III clinical trial formulation; is that
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`right?
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`A.
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`Q.
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`Sure, yes.
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`But formulation that you decided to use in Phase III
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`clinical trials was not used in the Phase II clinical trials;
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`is that right?
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`A.
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`Q.
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`Right.
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`Because the Phase II clinical trials involved a saline
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`solution, while the Phase III clinical trials involved other
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`excipients that we've been talking about, correct?
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`A.
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`Q.
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`Right.
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`And you were willing, you made the decision at Helsinn to
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`put those -- that formulation into the Phase III clinical
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`trials without previously running Phase II clinical trials on
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`that formulation; isn't that right?
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`A.
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`Q.
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`Right.
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`Because you did not have concern for the safety of the
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`people in that clinical trial by using a formulation that had
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`not been previously tested, right?
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`THE COURT: Can you rephrase that?
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`BY MR. LOMBARDI:
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`Q.
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`You at the time, at the time you went into Phase III
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`clinical trials, you weren't concerned about the safety of the
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`formulation you were going to put into those clinical trials.
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`A.
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`No. We had no concern about the safety of the
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`rephrase it.
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`A.
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`Q.
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`Maybe yes, thank you.
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`I'll rephrase the term. There -- you said that this was
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`a risky situation?
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`A.
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`Q.
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`A.
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`Q.
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`Right.
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`And you wanted to succeed in this situation.
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`Sure.
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`You wouldn't have put this formulation into Phase III
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`studies unless you felt, you, yourself, and Helsinn felt that
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`it would succeed.
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`A.
`
`Mr. Lombardi, drug development is a risky, a risky
`
`operation by given. There are so many attrition, there are so
`
`many Phase III clinical trials that fail. It's part of the
`
`entrepreneurial risk.
`
`So we accepted several risks, and we thought we might
`
`be able to manage; but we had no assurance that we would be
`
`able at the end of the study to have a formulation with a
`
`given concentration to alone to being stable and to the other
`
`ends to have enough efficacious for treating emesis. We
`
`didn't know at that time; and, therefore, we had to run a
`
`Phase III clinical trial.
`
`Q.
`
`Well, one thing you could have done to reduce your risk
`
`is go back to Phase II clinical trials and use the formulation
`
`that you ultimately used in Phase III. You could have done
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`that, couldn't you?
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`formulation itself.
`
`Q.
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`That's because you were familiar with all the excipients
`
`and with palonosetron, and there were no safety concerns that
`
`came to you at Helsinn; is that right?
`
`A.
`
`Q.
`
`Yes. For testing and phase clinical trial, yes.
`
`And you believed when you put this formulation --
`
`THE COURT: For testing in Phase III clinical trials?
`
`THE WITNESS: Right, yes.
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`BY MR. LOMBARDI:
`
`Q.
`
`And you believed, when you chose this formulation for
`
`Phase III clinical trials, you at Helsinn and you personally
`
`believed that that formulation was going to be successful in
`
`the Phase III clinical trials.
`
`A.
`
`We had a hope that it would work, of course. We were
`
`designing a plan with the hope at the end to have success.
`
`Q.
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`Well, you said yesterday that Phase III clinical trials
`
`are a very important thing.
`
`A.
`
`Q.
`
`A.
`
`Q.
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`A.
`
`Q.
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`A.
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`Q.
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`Yes.
`
`An important commitment for a company.
`
`Right.
`
`A financial commitment for a company.
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`Right.
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`There's a lot at stake.
`
`There is a lot of?
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`There's a lot at stake. Have you heard that term? I can
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`A.
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`I mean, as I sit here now today, I could not speculate
`
`with kind of hypothesis. We could have done others. I mean,
`
`we, for sure, discussed many, many other options.
`
`Q.
`
`A.
`
`Q.
`
`Well, that was an option at the time, wasn't it?
`
`I don't recall.
`
`Well, you know today, based on your experience in
`
`clinical trials, that sometimes companies and sometimes the
`
`FDA insists that you go back to Phase II clinical trials if
`
`you're going to make a change in a formulation.
`
`A.
`
`It can happen. It was not the case here. We got an
`
`agreement with the FDA that we could go to Phase III.
`
`Q.
`
`Exactly. So, I want to talk about two things.
`
`One is from your point of view at Helsinn, you didn't
`
`think it was necessary to go back to the Phase II clinical
`
`trials with this formulation; is that right?
`
`A.
`
`Yeah. We decided to take entrepreneurial risk to go
`
`directly to Phase III.
`
`Q.
`
`And the FDA also was comfortable with you going forward
`
`with this formulation in Phase III despite the fact that it
`
`hadn't been tested in Phase II.
`
`MR. O'MALLEY: Objection as to "this."
`
`THE WITNESS: You know the FDA, when it give --
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`THE COURT: It's all right.
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`THE WITNESS: I'm sorry.
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`THE COURT: There were two formulations, but go
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`result of the Phase II clinical trials, they did not see
`
`particular advantages in term of efficacy compared to existing
`
`5-HT
`
`3
`
` setrons that were already on the -- 5-HT
`
` compound, other
`
`3
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`setrons, that were already on the market. And so, they didn't
`
`saw those advantages to them of efficacy and, of course, also
`
`in term of market potential. And in our industry, those kind
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`of product, which show similar efficacy, we tend to name that
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`"me-too" compound.
`
`MR. LOMBARDI: And, Your Honor, having heard the
`
`answer, I move to strike it because I believe that in the
`
`answer itself, he indicated he received this -- I don't think
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`he even indicated how he received the information that he's
`
`just disclosed. So I think it's no foundation for this and I
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`suspect that any of the information is still hearsay.
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`Again, I have no objection if there's a document that
`
`shows this, but to have him testify as to what he learned
`
`through conversations I think is hearsay.
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`THE COURT: Can you find out the basis though?
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`Because if there is a conversation or conversations that he
`
`can recall, they may overcome the objection.
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`BY MR. O'MALLEY:
`
`Q.
`
`Do you -- I mean, we're actually going to get to this,
`
`but are there documents that you recall reviewing that
`
`indicate the reasons why Roche abandoned the project?
`
`A.
`
`I recall having seen documents.
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`THE COURT: They kept going with 5-HT
`
`s?
`
`3
`
`THE WITNESS: They kept going with 5-HT
`
`.
`
`3
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`And to answer your second question is that some years
`
`after that, they acquired a product, another 5-HT
`
` antagonist
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`called granisetron which was already marketed in the U.S.
`
`BY MR. O'MALLEY:
`
`Q.
`
`A.
`
`And how do you know that fact?
`
`Well, it was a big deal at that time. There was press
`
`releases and, of course, we were following the market, what
`
`was happening in the field of research that we were
`
`researching.
`
`Q.
`
`From those press releases and the like, do you know how
`
`much Roche reportedly paid to acquire the rights to
`
`granisetron?
`
`A.
`
`Q.
`
`It was over 1 billion U.S. dollar.
`
`Now, by contrast, do you know how much Helsinn paid for
`
`the rights to palonosetron?
`
`A.
`
`Q.
`
`A.
`
`Yes.
`
`How much?
`
`We paid 10 million U.S. dollar from the first upfront
`
`till to the launch of the product.
`
`Q.
`
`Beyond the 5-HT
`
` --
`
`3
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`THE COURT: I'm not sure that I understood the answer
`
`because they acquired it, the license and whatever came along
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`with it, at the end of Phase II clinical trials, and his
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`Q.
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`A.
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`Q.
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`And is that the basis for your understanding?
`
`Yes.
`
`Do you -- you recalled various documents you've testified
`
`during the due diligence program that you reviewed from Roche
`
`and Syntex; is that correct?
`
`A.
`
`Q.
`
`Yes.
`
`Did any of those documents you reviewed from Roche or
`
`Syntex, do you recall, did they have any sales projections for
`
`palonosetron?
`
`A.
`
`Q.
`
`A.
`
`I recall, yes.
`
`And do you recall what those sale projections are?
`
`I recall a sales projection of 25 million U.S. dollar per
`
`year.
`
`Q.
`
`From documents you've personally reviewed, do you know
`
`whether Roche decided to stop pursuing 5-HT
`
`s altogether after
`
`3
`
`it licensed palonosetron to Helsinn?
`
`A.
`
`Q.
`
`A.
`
`No, they didn't.
`
`How do you know that?
`
`I know because --
`
`THE COURT: They didn't do what?
`
`THE WITNESS: They -- should I explain or --
`
`THE COURT: I'm not sure that the question was clear.
`
`BY MR. O'MALLEY:
`
`Q.
`
`How do you know of this fact that they did not stop
`
`pursuing 5-HT
`
`s?
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`answer just said to the date of launch.
`
`MR. O'MALLEY: Right.
`
`BY MR. O'MALLEY:
`
`Q.
`
`Could you please explain what -- how those payments were
`
`made?
`
`A.
`
`Sure. In the licensing agreement that we had with Roche,
`
`we had to pay several installment, depending on the progress
`
`of the development. So, for example, the first installment
`
`would have been 6 million, at the signature, and then I don't
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`recall exactly, but another one could have been an
`
`anniversary, that may be when we submitted the filing, and the
`
`last one when the product has been launched. So the total was
`
`10 million.
`
`Q.
`
`Beyond the acquisition of the 5-HT
`
` antiemetic
`
`3
`
`granisetron, do you know if Roche was developing any other
`
`antiemetics after palonosetron?
`
`A.
`
`Q.
`
`A.
`
`Yes.
`
`And how do you know that?
`
`Well, again, we were in this field of research, and we
`
`saw from a scientific publication that Roche were development
`
`or looking to another class of antiemetic product called NK-1
`
`that many company was researching during the beginning of the
`
`year 2000, late '90s, and more than that, year after, we had
`
`the opportunity to in-licence one NK-1 --
`
`THE COURT: Was the word in-license?
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`THE WITNESS: In-license. We took again a license on
`
`one of these NK-1 called netupitant, N-E-T-U-P-I-T-A-N-T, and
`
`we acquired the license from Roche again, and it was an end of
`
`Phase I and we made all the clinical trials and we submitted
`
`to the FDA and we launched the product last year in the United
`
`States.
`
`BY MR. O'MALLEY:
`
`Q.
`
`When did Helsinn acquire the rights to that Roche NK-1
`
`antagonist?
`
`A.
`
`Q.
`
`I would say around 2005.
`
`Okay. I want to focus now on Helsinn's decision to
`
`acquire the rights to palonosetron. How did Helsinn find out
`
`about this opportunity?
`
`A.
`
`Yeah. Of course, Roche is one of our big neighbor in
`
`Switzerland, and we had already contact with them. We had
`
`already business contact with them. And we had -- we would
`
`have periodically visit between the business development, and
`
`the palonosetron opportunity came on the table.
`
`Q.
`
`And I believe you testified already that you were part of
`
`the team that was responsible for evaluating that opportunity?
`
`A.
`
`Q.
`
`Yes.
`
`What was the team's view of the palonosetron project at
`
`the time it was evaluating the opportunity to license-in
`
`palonosetron?
`
`A.
`
`Yeah. From the point of view of scientific and
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`management of the company to his sons, Enrico and Riccardo
`
`Braglia.
`
`Q.
`
`When Helsinn acquired the rights to palonosetron, did it
`
`have any estimate of how much it would cost to develop
`
`palonosetron through FDA approval?
`
`A.
`
`Q.
`
`A.
`
`Yes, we had, yes.
`
`And what was that estimated cost?
`
`We were estimating something around 25 million U.S.
`
`dollar.
`
`Q.
`
`And how much, if you know, did the development of
`
`palonosetron actually end up costing Helsinn?
`
`A.
`
`It cost, I would say, much more than that. Just for the
`
`CINV indication, it cost us between 50 and 60 million, but
`
`then adding the PONV indication that, by the way, when we made
`
`the estimate --
`
`THE COURT: The PONV?
`
`THE WITNESS: PONV. So the estimation of the $25
`
`million was for developing the CINV and the PONV indication.
`
`Then we run first the CINV, and only the CINV costed us around
`
`50, 60 million, but then with the PONV, with an oral
`
`formulation that we developed afterward, we -- an oral
`
`indication that we developed --
`
`THE COURT: Oral?
`
`THE WITNESS: Oral, and then the pediatric studies,
`
`that, by the way, we had to run according to the FDA,
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`technically, we look at that as an opportunity to enter in a
`
`new field of research, but we were also aware that there was
`
`some risk that we would have to overcome in order to arrive to
`
`a successful product.
`
`Q.
`
`And when you say there was some risk, what did you mean
`
`by that?
`
`A.
`
`Well, first of all, of course, we were aware about all
`
`the analysis run by Roche, and, as I said before, the market
`
`was already crowded, and there was a reason that they would
`
`arrive at the end with the so­called "me­too" product, but, of
`
`course, we were able to accept modest sale for entering in the
`
`U.S. market that for us was strategically at that time.
`
`Q.
`
`Did the company accept taking on those risks at some
`
`point in time?
`
`A.
`
`Q.
`
`A.
`
`Yes.
`
`Why was Helsinn willing to take those risks?
`
`I think that the driving force, the most driving force
`
`was exactly because we wanted absolutely to have, first of
`
`all, a new product entering in a new area of market, and
`
`but -- this area of research, but more than that, we wanted to
`
`enter into the U.S. market.
`
`Q.
`
`Was -- what was the management structure at Helsinn at
`
`that time? Was it undergoing any changes?
`
`A.
`
`Yes. At that time the founder, Mr. Gabriele Braglia -- I
`
`mean, there was a transition period where he was giving the
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`pediatric studies, all that costed more than 150 million U.S.
`
`dollar.
`
`BY MR. O'MALLEY:
`
`Q.
`
`A.
`
`And why was Helsinn's original estimate so far off?
`
`Well, I have to admit that at that time we were a bit
`
`naive, I would say. We didn't know exactly what -- what kind
`
`of hurdle that we would find in developing such an important
`
`product, especially on having to cope with FDA standards.
`
`Q.
`
`Now, when you talked about the risks that the management
`
`team evaluating the opportunity saw, you mentioned that there
`
`was a crowded market at that time. What did you mean by that?
`
`A.
`
`Yeah, there were -- at that time there was three setrons
`
`on the market.
`
`Q.
`
`A.
`
`Q.
`
`And do you recall what those three setrons were?
`
`Yeah. Ondansetron, dolasetron, and granisetron.
`
`Now --
`
`THE COURT: And it was that last one that Roche then
`
`later purchased?
`
`THE WITNESS: You are correct, Your Honor.
`
`BY MR. O'MALLEY:
`
`Q.
`
`And when your team was considering the palonosetron
`
`opportunity, did you have any estimate of what the sales might
`
`be, did Helsinn estimate?
`
`A.
`
`I must say that we never run really a big marketing
`
`analysis, as probably we would do now.
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`on the other page.
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`That's that ten time --
`
`Right.
`
`Okay.
`
`So 0.05 mg/ml, if you multiply by 2 ml, you come up with
`
`the dose of 0.1 milligram.
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`0.1 milligram dose was recommended by Syntex for PONV?
`
`This is correct.
`
`And is that the dose of Aloxi®?
`
`No.
`
`What is the dose of Aloxi®?
`
`The dose of Aloxi® is 0.25 milligram.
`
`THE COURT: There isn't a .75 milligram dose in the
`
`Aloxi®?
`
`THE WITNESS: No. In the clinical trial, we have
`
`used two doses, but then the approved one was 0.25 milligram.
`
`BY MR. O'MALLEY:
`
`Q.
`
`Now, you've testified that they had recommended -- they
`
`being Syntex -- had recommended a specific dose for -- or a
`
`concentration for