Amerigen Pharm. Ltd. v. UCB Pharma GmbH United States Court of Appeals of the Federal Circuit,2019 913 F.3d 1076

A.

UCB Pharma GmbH (“UCB”) owns the '650 patent, which covers certain chemical derivatives of 3,3-diphenylpropylamines, including a compound called fesoterodine. Fesoterodine is an antimuscarinic drug marketed as Toviaz^® to treat urinary incontinence.

Fesoterodine is a prodrug. Unlike a typical drug, a prodrug is an inactive molecule as-delivered and requires transformation within the body into its active therapeutic form. A prodrug may be employed when administering the active molecule itself is infeasible because of poor bioavailability (i.e., the fraction of a drug dose that is absorbed into the bloodstream) or other drug delivery problems.

Fesoterodine is a prodrug of the active compound 5-hydroxymethyl tolterodine (“5-HMT”). 5-HMT is a metabolite of the compound tolterodine, an older antimuscarinic drug sold under the trade name Detrol^® to treat overactive bladder. In the body, tolterodine is converted to 5-HMT by cytochrome P450 2D6 (“CYP2D6”). The metabolite 5-HMT, like tolterodine, has antimuscarinic activity and thus contributes to the therapeutic effect of tolterodine. Such metabolites are known as active metabolites.

CYP2D6 converts the methyl group at the 5-position of tolterodine to a hydroxymethyl group in 5-HMT. Fesoterodine, on the other hand, differs from 5-HMT at the 2-position: 5-HMT has a hydroxy group, while fesoterodine has an isobutyryl ester. The issue before us is whether it would have been obvious to modify the 2-position hydroxy group of 5-HMT to an alkyl ester of six carbons or less as in fesoterodine.

B.

Mylan Pharmaceuticals Inc. petitioned for IPR of the '650 patent, and the Board instituted review of claims 1–5 and 21–24 for obviousness. After institution, Amerigen and two other companies were joined as parties to the proceeding. Only Amerigen has appealed.

In its obviousness analysis, the Board accepted that a person of ordinary skill would have chosen 5-HMT as a lead compound for development in order to reduce the number of potential metabolic steps and to avoid CYP2D6-related drug-drug interactions. However, after considering expert testimony from both the petitioners and UCB, the Board found that a person of ordinary skill would not have been motivated to modify 5-HMT to make a prodrug by replacing the 2-position hydroxy group with an alkyl ester of six or fewer carbons. This factual determination was premised on several subsidiary findings that Amerigen challenges on appeal. We summarize these findings here.

The Board found that a person of ordinary skill would not have been motivated to modify 5-HMT to improve its bioavailability. Petitioners' expert, Dr. Patterson, testified that 5-HMT was insufficiently lipophilic because of its two hydroxy groups, and that its lipophilicity would cause bioavailability problems. In support, Dr. Patterson pointed to Brynne's statement that tolterodine is 10-fold more lipophilic than 5-HMT and could penetrate cell membranes more rapidly. UCB responded that no prior art reference suggested that 5-HMT would not be well-absorbed, and that the lipophilicity of 5-HMT relative to tolterodine, a known, well-absorbed drug, did not show that 5-HMT had a bioavailability problem.

Furthermore, UCB's expert, Dr. Roush, conducted an analysis of 5-HMT using the “Rule of 5” discussed in a research article on drug delivery by Lipinski. Dr. Patterson agreed that a person of ordinary skill would consider the Rule of 5. The Rule of 5 assesses four inherent properties of a compound that may help to predict whether it will have a bioavailability problem. Dr. Roush considered these properties as they pertained to 5-HMT and concluded that none of them indicated that 5-HMT had a bioavailability problem. Dr. Patterson did not rebut this analysis. The Board thus credited Dr. Roush and determined that a person of ordinary skill would not have been motivated to modify 5-HMT because of bioavailability concerns.

Given its determination that 5-HMT did not have a bioavailability problem, the Board found that a person of ordinary skill would not have made a 5-HMT prodrug to solve a bioavailability problem that did not exist. Designing a prodrug was a complex endeavor, the Board found, as toxicity, bioavailability, and other drug characteristics must be monitored for two compounds rather than just one. The Board also found that Bundgaard defined the prodrug form of a compound as inactive, but the petitioners did not demonstrate that esters of 5-HMT would be inactive. Moreover, the petitioners did not point to any prodrugs analogous to fesoterodine, for example, prodrugs in the same chemical class, with the same mechanism of action, or in the same field of treatment. The Board thus found that a person of ordinary skill would not have been motivated to develop a prodrug of 5-HMT.

Even assuming that a person of ordinary skill would have been motivated to modify 5-HMT, the Board found that producing the specific claimed compounds would not have been a matter of routine optimization. No prior art reference disclosed the molecule fesoterodine. Considering competing expert testimony, the Board determined that there were many possible molecular modifications of 5-HMT consistent with a prodrug design. The Board credited Dr. Roush's testimony that a person of ordinary skill would have considered esterifying the hydroxy groups at both the 2- and 5-positions. And even if a person of ordinary skill only considered esterifying the 2-position hydroxy group, the Board credited Dr. Roush's testimony that there was no scientific justification to limit the ester to six carbons or fewer. Finally, even if the universe of possible esters was limited to alkyl esters of six carbons or fewer at the 2-position, that still left 86 possible monoesters. The Board found that it would not have been routine to test each one. Altogether, the Board held that the prior art did not suggest modifying 5-HMT to make the specific claimed compounds.

Amerigen appealed.

A. Standing

UCB argues that Amerigen lacks standing to appeal from the Board's decision because the Food and Drug Administration (“FDA”) will not approve Amerigen's abbreviated new drug application (“ANDA”) until the expiration of the '650 patent, previously upheld in a separate suit in the District of Delaware, in 2022. Accordingly, UCB contends that Amerigen is foreclosed from infringing the '650 patent, and without a possibility of infringement there can be no justiciable dispute.

Amerigen responds that its ANDA product has already secured tentative approval from the FDA, that the '650 patent delays entry of its competing product, and that invalidating the claims of the '650 patent would advance the launch of its product. By blocking its release of a competing drug, Amerigen argues that the '650 patent imposes a concrete injury sufficient for Article III standing.

Although we have jurisdiction to review final decisions of the Board under 28 U.S.C. § 1295(a)(4)(A), an appellant must meet “the irreducible constitutional minimum of standing,” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992), even if there is no such requirement in order to appear before the administrative agency being reviewed, Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014). Standing requires an appellant to have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016). As the party seeking judicial review, the appellant bears the burden of proving that it has standing. Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1171 (Fed. Cir. 2017).

We agree with Amerigen that it has standing to appeal from the Board's decision because the launch of its tentatively approved drug is blocked by the '650 patent, and invalidation of the patent would advance its drug's launch. The '650 patent is listed in the FDA's “Orange Book” entry for Toviaz^®. Amerigen has a Paragraph III certification for the '650 patent, which means that the FDA will only approve Amerigen's ANDA after the '650 patent has expired. 21 U.S.C. § 355(j)(5)(B)(ii). However, if the '650 patent is held unpatentable through reversal of the Board's decision, then the New Drug Application (“NDA”) holder must “promptly notify” the FDA that the patent “no longer meet[s] the statutory requirements for listing.” 21 C.F.R. § 314.53(f)(2)(i). And § 314.53 expressly states that a patent does not meet the requirements for listing “if there has been a judicial finding of invalidity for a listed patent, from which no appeal has been or can be taken.” After a notification from the NDA holder that a patent may no longer be listed, the FDA “will remove a patent … from the list if there is no first applicant eligible for 180-day exclusivity based on a paragraph IV certification to that patent or after the 180-day exclusivity period of a first applicant based on that patent has expired or has been extinguished.”

Amerigen has represented that its “ANDA has already received tentative approval and would be able to obtain final approval for launch in 2019 if the '650 patent is invalidated.” The '650 patent expires on July 3, 2022. UCB's other earlier-expiring patents listed in the Orange Book, which are not at issue in this appeal, expire on May 11, 2019. Consequently, there would be a roughly three-year period beginning in May 2019 during which Amerigen's sales would be blocked by the '650 patent. The record is unclear whether a different company's generic product is eligible for the 180-day exclusivity period. However, even assuming that another generic product is entitled to 180-day exclusivity, a conclusion from this court that the instituted claims of the '650 patent are unpatentable and the FDA's consequent delisting of the patent would enable Amerigen to launch its competing product substantially earlier than it otherwise could upon the patent's expiration. We thus conclude that Amerigen has a concrete, economic interest in the sales of its tentatively approved drug obstructed by the listing of the '650 patent, and has thereby demonstrated a controversy “of sufficient immediacy and reality” for Article III standing. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007).

UCB's arguments that Amerigen lacks standing are largely premised on the theory that under the Hatch-Waxman Act, 21 U.S.C. §§ 355, 360 (2012), a “Paragraph IV certification is the fundamental, jurisdictional basis enabling parties to litigate Orange Book-listed patents in the Article III courts,” and without that basis there can be no injury in fact. But this case does not arise under the Hatch-Waxman Act, and the causes of action available under that Act do not necessarily control the standing inquiry in an appeal from an IPR decision. They do not control here because Amerigen does not rely on a risk of infringement liability as a basis for injury in fact; rather, it contends that the mere listing of the '650 patent in the Orange Book inflicts a concrete commercial injury redressable by this court.

We have previously recognized that listing a patent in the Orange Book may create a cognizable injury independent of the prospect of infringement liability. In Apotex, Inc. v. Daiichi Sankyo, Inc., one generic company, Apotex, sought to cause the forfeiture of a third-party generic company's 180-day exclusivity period by securing a declaratory judgment of noninfringement of Daiichi's patent that had been disclaimed. 781 F.3d 1356, 1359–61 (Fed. Cir. 2015). Apotex could not show harm via infringement because the disclaimed patent could not be infringed. But Apotex could show harm from the fact that the patent was still listed in the Orange Book, because the listing delayed the start of the third party's 180-day exclusivity period, which in turn delayed the date on which Apotex could market its drug. Apotex argued that a declaratory judgment of noninfringement, in accelerating the end of the third party's exclusivity period, “would allow it to enter the market earlier than it could without the judgment.” We agreed that Apotex demonstrated a controversy “of sufficient immediacy and reality” for Article III standing. That controversy originated from the “listing of [a] patent, with its current consequence of preventing FDA approval” of Apotex's proposed drug during the other generic company's exclusivity period.

This case presents the same essential scenario, where the listing of a drug company's patent delays the launch of a competing generic product. If Amerigen succeeds in invalidating the '650 patent here and having the patent delisted, then it, like Apotex, could launch its proposed drug substantially earlier than it otherwise could. Consequently, “by any common-sense measure,” Amerigen has a “substantial, concrete stake [ ] in whether” it succeeds in proving the invalidity of the '650 patent.

UCB contends that this case is controlled by Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2008), not Daiichi. Similar to Daiichi, Janssen involved one generic company, coincidentally also Apotex, seeking a declaratory judgment of noninfringement of Janssen's listed patent in order to trigger another generic company's 180-day exclusivity period, thereby advancing the launch of Apotex's drug. However, unlike Daiichi, Janssen applied the pre-MMA version of the Hatch-Waxman Act that did not provide an express path for one generic firm to trigger the forfeiture of the first filer's 180-day exclusivity period. Janssen thus concluded that the inability of the later filing generic company “to promptly launch its generic [product] because of [the first filer's] 180-day exclusivity period is not a cognizable Article III controversy, but a result envisioned by the Hatch-Waxman Act.”

The America Invents Act (“AIA”) and its provisions governing IPRs do not support an analogous statutory implication. Congress granted parties broad access to challenge patents through the IPR procedure. Any “person who is not the owner of a patent may file with the [Patent] Office a petition to institute an [IPR] of the patent.” 35 U.S.C. § 311. Likewise, any “party dissatisfied with the final written decision of the [Board] … may appeal the decision . … ” Id. § 319. The AIA thus provides no basis for us to premise standing in an appeal from an IPR decision on the availability of particular causes of action under the Hatch-Waxman Act. Rather, an appellant must demonstrate an injury consistent with the generally applicable requirements of Article III, i.e., a controversy “of sufficient immediacy and reality” to warrant the requested judicial relief. Because Amerigen has demonstrated such a controversy traceable to UCB's '650 patent and redressable by this court, it has standing to appeal from the Board's decision even though it may be incapable (as a Paragraph III filer) of maintaining a parallel Hatch-Waxman suit.

We are not persuaded by UCB's remaining arguments. UCB contends that any delisting-based relief would be too speculative to support standing. However, as Amerigen has already been granted tentative approval for its proposed drug, the only uncertainty is whether Amerigen would have to wait for another generic company's potential 180-day exclusivity period to expire. As we have explained, Amerigen's launch would be substantially advanced even if another generic company has 180 days of exclusivity.

UCB additionally disputes whether Amerigen's alleged injury is traceable to UCB. The injury plainly is caused by UCB's listing of the '650 patent; absent that entry barrier, approval of Amerigen's proposed drug would be advanced.

For the foregoing reasons, we conclude that Amerigen has standing to appeal from the Board's decision. We therefore proceed to the merits.

B. Obviousness

Amerigen argues that the Board did not properly consider the evidence in support of obviousness. In particular, Amerigen alleges that: (1) the Board misunderstood Amerigen's arguments concerning lipophilicity, and it should have recognized that a person of ordinary skill would have increased the lipophilicity of 5-HMT for its own sake; (2) the Board placed an excessive burden on Amerigen to show a motivation to make a 5-HMT prodrug; and (3) the Board failed to recognize that arriving at the specific claimed compounds would have been routine optimization. Amerigen additionally contends that the Board ignored its argument concerning the effect of the patent covering 5-HMT.

UCB responds that Amerigen points to no legal error and that substantial evidence supports the Board's findings.

Our review of a Board decision is limited. In re Baxter Int'l, Inc. 678 F.3d 1357, 1361 (Fed. Cir. 2012). While we review the Board's legal determinations de novo, In re Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004), we review the Board's factual findings underlying those determinations for substantial evidence, In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000). A finding is supported by substantial evidence if a reasonable mind might accept the evidence as adequate to support the finding.

We agree with UCB that the Board did not legally err and that substantial evidence supports the Board's findings. We address Amerigen's arguments in turn.

Amerigen argues that a person of ordinary skill would have been motivated to modify 5-HMT to increase its lipophilicity. Based on the analysis of UCB's expert, Dr. Roush, the Board disagreed. Petitioners argued that 5-HMT's lower lipophilicity compared to tolterodine suggested that 5-HMT had a bioavailability problem. Dr. Roush, however, testified that since 5-HMT did not violate any of the Lipinski rules, a person of ordinary skill would not have thought 5-HMT had a bioavailability problem. Specifically, Dr. Roush testified that Lipinski predicts a potential bioavailability problem if a compound meets two of the following four factors: (1) more than 5 hydrogen bond donors; (2) a molecular weight over 500; (3) a logP over 5; and (4) more than 10 hydrogen bond acceptors. According to Dr. Roush, 5-HMT had: (1) 2 hydrogen bond donors; (2) a molecular weight of 341.5; (3) a logP of 3.7; and (4) 3 hydrogen bond acceptors. As 5-HMT satisfied none of the Lipinski factors, Dr. Roush found that “there would have been no reason to suspect that 5-HMT would possess poor oral absorption.” Petitioners' expert, Dr. Patterson, agreed that a person of ordinary skill would have considered Lipinski in assessing bioavailability and did not rebut Dr. Roush's analysis.

The Board weighed the unrebutted testimony of Dr. Roush against petitioners' argument based on the relative lipophilicity of 5-HMT to tolterodine and Dr. Patterson's testimony that 5-HMT's two hydroxy groups suggested a bioavailability problem. The Board found that Dr. Roush better addressed the bioavailability issue and that the lipophilicity of 5-HMT relative to tolterodine did not demonstrate a bioavailability problem. We agree with UCB that a reasonable fact finder could have weighed Dr. Roush's testimony over Dr. Patterson's. Based on the record before us, we conclude that substantial evidence supports the Board's finding that a person of ordinary skill would not have been motivated to modify 5-HMT to increase its lipophilicity.

On appeal, Amerigen does not point to a specific error in the Board's findings, but generally argues that “there need not be a specific problem with bioavailability of 5-HMT for one of ordinary skill in the art to be motivated to modify 5-HMT to further improve its bioavailability.” While that may be true in some cases, Amerigen's conclusory argument is not sufficient to overcome the substantial evidence to the contrary underpinning the Board's analysis. The Board found that a person of ordinary skill would have considered prodrug development to involve tradeoffs, including having to monitor “the toxicity, bioavailability, receptor affinity, pharmacokinetics, and pharmacodynamics of” two compounds: the prodrug and the active compound. Given such complexities, the Board determined that a person of ordinary skill would not have turned to a prodrug approach “to solve an undefined problem.” We see no reversible error in the Board's findings.

Even assuming that a person of ordinary skill would have had some motivation to modify 5-HMT, the Board additionally found that the petitioners did not prove that a skilled artisan would have made the specific modifications leading to the claimed compounds. Amerigen argues that the Board erred in its findings. We disagree.

The Board held that the petitioners did not sustain their burden of proof for primarily three reasons. First, the Board considered Bundgaard's teaching that the prodrug form of a drug is inactive. Petitioners presented no evidence that an ester of 5-HMT would be inactive, and the Board thus found that this deficiency supported nonobviousness. Amerigen argues that the Board imposed an “insurmountable burden” on petitioners, but we disagree. The Board sensibly found that a skilled artisan would “seek some degree of certainty that a prodrug of a particular molecule would be inactive before embarking on the process of attempting to create the prodrug,” and the petitioners failed to provide any such certainty.

This deficiency is compounded by the Board's second finding that the petitioners did not point to any prodrugs analogous to 5-HMT. Specifically, the Board found no evidence of prodrugs in the same chemical class, with the same mechanism of action, or in the same field of treatment. Again, Amerigen argues that the Board imposed too high a burden on petitioners, effectively a “[r]equirement for a [p]rior [t]eaching of a 5-HMT [a]nalog [p]rodrug.” But the Board did not require such evidence, it just found that the absence of such evidence supported UCB's argument that at the time of the invention skilled artisans had not considered “a prodrug of an antimuscarinic drug or any sort of overactive bladder drug.” Although not dispositive, the Board did not err in inquiring whether there existed at the time of the invention prodrugs similar to the claimed compounds.

Third, the Board found that it would not have been routine to make the claimed molecular modifications to 5-HMT to produce the claimed compounds. Citing Dr. Roush, the Board found: (1) that a skilled artisan would have considered diester substitutions as well as other prodrug moieties taught in Bundgaard; (2) that a person of ordinary skill would have considered modifying the 5-position in addition to the 2-position; and (3) that Bundgaard did not specifically teach the isobutyryl ester of fesoterodine.

Amerigen argues that Bundgaard disclosed esters as prototypical prodrug moieties and that modifying the 2-position alone would have been the most obvious choice. While the Board considered Bundgaard's disclosure of ester prodrugs, the Board also observed, citing Dr. Roush, that Bundgaard taught many other prodrug substitutions that a person of ordinary skill would have considered. Dr. Roush testified that these additional substitutions included ethers, carbamates, carbonates, phosphate esters, Mannich bases, and macromolecular prodrugs. Moreover, the Board also found that a person of ordinary skill would have considered modifications at the 5-position because the prior art did not indicate a preference for either the 2- or 5-position, and the inventors themselves considered modifying the 5-position. The Board did not consider the contrary evidence persuasive: Dr. Patterson argued that modifying only the 5-position would pose a risk of transesterification, but did not sufficiently explain that risk, and petitioners primarily relied on a separate theory altogether regarding possible metabolic complications at the 5-position that was devoid of evidentiary support. Amerigen has demonstrated no discernible error in the Board's technical analysis, and asks this court to reweigh these matters on appeal. We conclude that substantial evidence supports the Board's determination that the prior art did not suggest making the claimed monoester substitutions solely at the 2-position.

Altogether, the Board found that the petitioners neither established a general motivation to make a 5-HMT prodrug nor proved that the specific claimed modifications would have been obvious. We conclude that Amerigen's factual challenges to the Board's decision are without merit and that substantial evidence supports the Board's findings.