how patent and regulatory exclusivity can protect your medical device business
TRANSCRIPT
HOW PATENT AND REGULATORY EXCLUSIVITY CAN PROTECT YOUR BUSINESS
Michael J. Weickert, Ph.D.9/15/2016
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What I care about for a new product
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Cost to market Speed
Regulatory path Total return: Market size and duration
Product superiority Exclusivity
Patent Regulatory
Business value of exclusivity Creates monopoly
Pricing Market share ROI
No exclusivity = compete on price not value
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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
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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 issuance9/15/2016
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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
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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?
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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
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Case study: alternatives emerged
Rapid (seconds) Cheap ($1-3)
UV/Vis chip Hand-held
Raman
Impedance sensor Alternatives Emerged
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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
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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
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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
$
$
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Combination products
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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)
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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
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EpiPen PMOA PMOA: Drug (Epinephrine): emergency treatment
of life-threatening allergic reactions (anaphylaxis) Secondary MOA: Device (Injector Pen): provides
drug access to patient (injection).
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Leverage of drug designation for Epipen
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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 markethttp://www.bloomberg.com/news/articles/2015-09-23
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)
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>300 Combination products submitted for review each year
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
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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
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Regulatory market exclusivity Orphan designation (US and EU)
Hatch/Waxman exclusivity QDIP (Qualified Infectious Disease Products)
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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
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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
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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
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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 qualify9/15/2016
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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
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Transferrable Priority Review Vouchers are worth big bucks
Year Buyer Seller Price2014 Sanofi and
RegeneronBioMarin $67 million
2014 Gilead Sciences* Knight Therapeutics $125 million2015 Sanofi Asklepion Pharma $245 million2015 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-About-FDA%E2%80%99s-Priority-Review-Vouchers/#sthash.Wrj11b9A.dpuf
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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
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Why was EpiPen so successful in maintaining a market monopoly?
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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
Make Patent and Regulatory strategy work for your business
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Product/
Invention
Work-arounds
Alternatives
Business applicationsPatent RegulatorySpeed to Market
Market Protection
Direct exclusivity
(orphan etc.)
Competitor Approval Difficulty
