Medical Device patents are the principal asset around which business transactions are structured. They can help establish a monopoly around the invention or product. Patents should be structured to protect the Business; solving the problem, not just the invention. Regulatory barriers can also protect the business by extending the duration a product dominates a market. Some Combination products (drug plus device, like EpiPen or asthma inhalers) may have access to several important Regulatory exclusivity programs like Orphan, Clinical Investigation exclusivity and QDIP. The goal is to have Regulatory and Patents strategies that work together to strengthen your business by protecting your innovative products from competitors.

1. HOW PATENT AND
REGULATORY EXCLUSIVITY CAN
PROTECT YOUR BUSINESS
Michael J. Weickert, Ph.D.9/15/2016
1

2. What I care about for a new product
9/15/2016
2
 Cost to market
 Speed
 Regulatory path
 Total return: Market size and duration
 Product superiority
 Exclusivity
 Patent
 Regulatory

3. Business value of exclusivity
 Creates monopoly
 Pricing
 Market share
 ROI
 No exclusivity =
compete on price
not value
9/15/2016
3

4. Patent exclusivity exchange
 In return for teaching others
your invention
 Receive market exclusivity on invention for 20
years from filing date of US or PCT application
 Right to prevent others from making, using, selling,
disclosed invention
9/15/2016
4

5. Patent considerations
 “First inventor to file”
 U. S. = one year to file patent application after
first public disclosure
 During that year, others can publish or file patents
similar to your disclosure or file patent(s) which
may prevent you from filing your patent
 In most foreign countries, patent application
must be filed prior to any disclosure to the public
 20 years does not include provisional patent
 Design patents filed on or after May 13, 2015 =
15 years from issuance
9/15/2016
5

6. Business impact of patents
 Principal company asset for transactions:
 investors, partners, licensors or acquirers
 Protects your technology and products from
competition using your invention(s)
 Product license terms for
geographies with no patents will
usually be much lower
9/15/2016
6

7. Protect your “business”
 Patent strategy should protect the business of
solving the problem(s) your technology or products
address
 What other solutions are practical?
 Which of those can you also patent or acquire?
 What other problems can your technology solve?
9/15/2016
7

8. Case study: Drug sensing technology
 Rapid (seconds)
 Cheap ($1-3)
 UV/IR/Visible light
 Raman
 NMR
 Refractive Index
 Acoustic Impedance
 Thermal Sensor
 Inductive Sensor
 Chemical Sensor
 All had cost, time, sensitivity
and/ or approvability issues
Impedance sensor Alternatives
9/15/2016
8

9. Case study: alternatives emerged
 Rapid (seconds)
 Cheap ($1-3)
 UV/Vis chip
 Hand-held
Raman
Impedance sensor Alternatives Emerged
9/15/2016
9

10. Build a patent fence
“A patent fence is a series of patents
obtained by a patent owner on near
substitutes for its patent, thereby
blocking follow- on innovators from
designing around the initial patent or
from obtaining improvement patents
that may block the original patent
owner from improving on his original
patented invention.”
http://itlaw.wikia.com/wiki/Patent_fence 9/15/2016
10

11. Patent take-homes
 A principal business asset around which
transactions are built
 Creates monopoly around invention/ product
 Protect the business not just the invention –
 The greater the “fence”, the higher the potential
revenue
9/15/2016
11

12. Regulatory exclusivity
 Programs that extend market
exclusivity
 Regulatory options that increase
product value
 Regulatory strategies that create
higher barriers for competitors
 Regulatory opportunities to increase
business value
Product Life
$
$
9/15/2016
12

13. Combination products
9/15/2016
13

14. Epinephrine auto-injector (injection pen)
 Device (Injector Pen): houses drug (container), helps
provide drug access to patient (needle).
 Drug (Epinephrine): Epinephrine is a drug that can help
stem, stop, or prevent anaphylaxis
 Intended Use/ Indication for Use: EpiPen and EpiPen Jr
Auto-Injectors are for the emergency treatment of life-
threatening allergic reactions (anaphylaxis)
9/15/2016
14

15. Drug or device assignment based on
primary mode of action (PMOA)
 PMOA – stent opens
artery (device)
 Secondary MOA – drug
prevents inflammation
and restenosis
 Assigned to CDRH
 PMOA – chemotherapy
for brain tumor (drug)
 Secondary MOA – local
delivery of drug by the
device
 Assigned to CDER
Drug Eluting Stent Drug Eluting Disk
9/15/2016
15

16. EpiPen PMOA
 PMOA: Drug (Epinephrine): emergency treatment
of life-threatening allergic reactions (anaphylaxis)
 Secondary MOA: Device (Injector Pen): provides
drug access to patient (injection).
9/15/2016
16

17. Leverage of drug designation for Epipen
9/15/2016
17
 Higher barriers to Competition
 differentiated drug product (NDA)
 generic (ANDA) + patent challenge
 not 510(k)
 Mylan purchased EpiPen in 2007 - $200M
product,
 9% margin (2008)
 By 2014, $1B product
 margin = 55%
 2015 sales ~$1.5B, ~90% share US market
http://www.bloomberg.com/news/articles/2015-09-23

18. Combination product examples
 Bandage with antimicrobial coating
 Bandage packaged with tube of antibiotic ointment
 Pre-filled delivery device, e.g., syringe or inhaler that
contains drug or biologic (EpiPen, Advair)
 Antimicrobial coated catheter
 Drug-eluting stent (Taxus, Xience)
 Antibody-drug conjugates (Mylotarg)
 Light source and photo-activated drug (Photofrin)
9/15/2016
18
>300 Combination products submitted for review each year

19. Drug Delivery - drug versus device
 TOBI® is a tobramycin solution
for inhalation. TOBI is indicated
for the management of cystic
fibrosis patients with P.
aeruginosa. TOBI is specifically
formulated for inhalation using a
PARI LC PLUS™ Reusable
Nebulizer.
 “...handheld nebulizer that will
be used with patients for whom
doctors have prescribed
medication for nebulization. It is
intended for adult and pediatric
patients…”
TOBI + PARI Nebulizer PARI Nebulizer
19

20. Drug versus device trade-offs
 NDA – 4 yrs, $80M to
approval (Pathogenesis)
 ~$300M annual revenue
 High barrier to
competition
 Orphan (expired)
 High margin
 510(k) – faster & lower
cost approval
 ~$300M annual revenue
 Low barriers to
competition
 Lower margin
TOBI + PARI Nebulizer PARI Nebulizer
9/15/2016
20

21. Regulatory market exclusivity
 Orphan designation (US and EU)
 Hatch/Waxman exclusivity
 QDIP (Qualified Infectious Disease Products)
9/15/2016
21

22. Orphan designation
 treatment, diagnosis or prevention of rare
diseases/disorders (< 200,000 people in the U.S.), or
 that affect > 200,000 persons but are not expected to
recover the costs of developing and marketing a
treatment drug.
 The first sponsor to receive marketing approval for
that drug for that indication = 7 years of exclusivity
9/15/2016
22

23. Orphan applies to combination products
 FDA and EMEA will grant Orphan designation
to diagnostic and combination products with
a qualifying Orphan indication
 Ex: amphotericin B inhalation powder for
prevention of pulmonary fungal
infections in patients at risk for
aspergillosis due to
immunosuppressive therapy
9/15/2016
23

24. Hatch/Waxman exclusivity
 Clinical Investigation exclusivity
 “A 3-year period of exclusivity is granted for a drug product that
…has been previously approved, when … new clinical investigations
…conducted or sponsored by the sponsor … were essential to
approval of the application. For example, the changes in an
approved drug product that affect its active ingredient(s), strength,
dosage form, route of administration or conditions of use may be
granted exclusivity if clinical investigations were essential to
approval of the application containing those changes.”
 505(b)(2) or sNDA filing
9/15/2016
24

25. QDIP: Qualified Infectious Disease Products
 A QIDP is defined as “an antibacterial or antifungal drug for human
use intended to treat serious or life threatening infections”
including those caused by antibiotic or antifungal resistant
pathogens, novel or emerging infectious pathogens, or “qualifying
pathogens”.
 The GAIN act of 2012 (GENERATING ANTIBIOTIC INCENTIVES NOW)
 QDIP products receive 5 additional years of market exclusivity:
 With Clinical Investigation Exclusivity: 8 years
 With Orphan Drug Exclusivity: 12 years
 Pediatric Exclusivity: Extends exclusivity by 6 months
 Ex. Drug delivery of antibiotics may qualify
9/15/2016
25

26. Monetizing Priority Review Vouchers
 Section 1102 of FDAAA, "Priority Review to Encourage Treatments
for Tropical Diseases," created Neglected Tropical Disease Priority
Review Voucher system.
 Rare pediatric diseases added in 2012.
 Any new drug intended to treat a specific list of tropical diseases or
rare pediatric diseases is eligible to receive a transferrable voucher
for priority review
 Allows recipient to expedite the review of any one of its new drug
products
 Can be sold or transferred to another company
 Since 2009, 9 transferable "priority review" vouchers issued
9/15/2016
26

27. Transferrable Priority Review Vouchers are
worth big bucks
Year Buyer Seller Price
2014 Sanofi and
Regeneron
BioMarin $67 million
2014 Gilead Sciences* Knight Therapeutics $125 million
2015 Sanofi Asklepion Pharma $245 million
2015 AbbVie United Therapeutics $350 million
*Used for HIV drug Odefsey: FDA approved the drug in six months on 1 March
2016.
http://www.raps.org/Regulatory-Focus/News/2015/07/02/21722/Regulatory-Explainer-Everything-You-Need-to-Know-
9/15/2016
27

28. Regulatory take-homes
 Combination products regulated as “drugs” or “biologics”
have:
 Regulatory exclusivity options
 Orphan = 7 years
 Clinical Investigation exclusivity = 3 years
 QDIP = 5 years
 Higher barriers to competition and higher margins
 Rare products qualifying for Priority Review vouchers can
be worth $ hundred of millions even before product launch
9/15/2016
28

29. Why was EpiPen so successful in
maintaining a market monopoly?
9/15/2016
29
 Interaction of patent and regulatory strategy
 NDA - Epinephrine = PMOA for product
 Protection from device patents (# 7,449,012, filed 2005)
 Alternative injector: Sanofi's Auvi-Q (Allerject)
 Approved 2012
 Recalled 2015 (potential device dosing issues)
 Sanofi reportedly terminating product partnership with Kaléo
 Generics: TEVA filed ANDA 2009 (Antares Pharma device)
 Settled with Mylan in 2012 for 2015 launch
 Trouble getting generic approved – delayed until 2017
 ~4,000 generic product backlog at FDA

30. Make Patent and Regulatory strategy
work for your business
9/15/2016
30
Product
/
Inventio
n
Work-arounds
Alternatives
Business
applications
Patent Regulatory
Speed to Market
Market
Protection
Direct
exclusivity
(orphan etc.)
Competitor
Approval
Difficulty

31. mweickert@gmail.com
www.witcreek.com
650-218-1840
Michael J. Weickert, Ph.D.
9/15/2016
31