Biogen, Inc. (BIIB) - Overview of the Appellate Cases in Advance of the Telephonic Oral Arguments.

On December 8, 2020, Telephonic Oral Arguments are currently scheduled to commence at 10:00 AM ET in the Appellate Cases of: “Mylan Pharmaceuticals Inc. v. Biogen MA Inc.” (Case #20-1673 at the Court of Appeals for the Federal Circuit) and “Biogen International GmbH v. Mylan Pharmaceuticals Inc.” (Case #20-1933 at the Court of Appeals for the Federal Circuit).  This email provides an overview of these Cases in advance of these upcoming Oral Arguments at the Court of Appeals for the Federal Circuit (“CAFC”).  

Please note that Case #20-1673 is Mylan’s Appeal of Inter Partes Review Case Number: IPR2018-01403, and Appellate Case #20-1933 is Biogen’s Appeal of Case #17-00116 in the Northern District of West Virginia.  More information on these Cases is provided below.

With regards to the potential impact of the upcoming Oral Arguments and eventual Decisions, shares of Biogen, Inc. (BIIB) sank about 7% on June 18, 2020, when the Northern District of West Virginia issued its Decision finding Biogen’s U.S. Patent Number 8,399,514 Invalid for Lack of Written Description.  Additionally, in Biogen’s Form 10-Q for the period ending September 30, 2020, Biogen indicates that U.S. Revenues from its Fumarate drug products, which includes Tecfidera (the drug at issue in these Appeals) and Vumerity (launched in November 2019), decreased 18.7% when comparing Q3-2020 to Q3-2019.  Biogen writes that “ … U.S. Fumarate revenues were primarily due to a decrease in TECFIDERA demand and pricing as a result of multiple TECFIDERA generic entrants entering the U.S. market during the third quarter of 2020. Decreases were also due to unfavorable pricing, driven by discounts and allowances.”  Given the above, we currently believe that if the Court of Appeals were to hypothetically Reverse the finding of Invalidity from the District Court, then we would expect shares of Biogen, Inc. (BIIB) to gain somewhere between 10% – 20%.  On the opposite side, we currently believe that the Market may be expecting a negative outcome for Biogen, and therefore negative comments from the Court during Oral Arguments or an ultimate Decision affirming the Invalidity of Biogen’s Patent may elicit a much smaller move than a hypothetical Reversal.

By way of background, Biogen filed Case #17-00116 against Mylan on June 30, 2017 in the Northern District of West Virginia.  In its Complaint, Biogen alleged that the Defendants’ Abbreviated New Drug Application (“ANDA”) #210531, which sought approval to market a generic form of Biogen’s Tecfidera® product (indicated for the treatment of relapsing forms of multiple sclerosis) is Infringing U.S. Patent Numbers: 6,509,376; 7,320,999; 7,619,001; 7,803,840; 8,759,393; and 8,399,514.  Multiple Patents were subsequently Dismissed (or expired) in this Case, leaving only Claims relating to the ‘514 Patent at issue.  On October 8, 2019, Mylan stipulated to Infringement of the ‘514 Patent; leaving only the question of Validity remaining.  The Bench Trial then concluded on February 10, 2020, and on June 18, 2020, the District Court issued its Decision finding the ‘514 Patent INVALID for Lack of Written Description under § 112.  

With regards to IPR2018-01403 at the USPTO’s Patent Trial and Appeal Board, Mylan filed this Inter Partes Review challenging Biogen’s ‘514 Patent on July 13, 2018.  This IPR was instituted on February 6, 2019, and on February 5, 2020, the PTAB issued its Final Written Decision finding the challenged Claims of the ‘514 Patent VALID.  (Please note that IPRs only adjudicate the issues of Obviousness and/or Anticipation under § 102 and § 103, and this IPR did not examine the issue of Lack of Written Description under § 112, which is the reason that the District Court found Invalidity.) 

The Table below presents a quick view of the issues on Appeal and the differences between these two Appellate Cases.

Given that these Appeals concern differing Validity outcomes of the same Patent under different theories, we believe that it is important to highlight the differences between the two Appeals in an effort to understand how the potential outcomes could impact the underlying share-price movement of Biogen, Inc. (BIIB).  We currently believe that the Appeal of the Northern District of West Virginia’s Decision finding the Patent Invalid remains the more important of these two Appeals.  We currently believe that the importance of Mylan’s Appeal of the PTAB’s Final Written Decision is contingent upon the CAFC hypothetically reversing the District Court’s finding of Invalidity based on Lack of Written Description.  Additionally, it is worth noting that we currently believe, based solely on the briefing and our experience with the CAFC, that Biogen may have a tough road ahead of it.  We currently believe that Mylan appears to have presented the better arguments in its brief as to why the CAFC should Affirm the Invalidity of the ‘514 Patent.  As should become apparent below, we currently believe that Biogen’s “Blaze Marks” arguments does not effectively (or efficiently) lead a Person of Ordinary Skill in the Art (“POSA”) specifically to treatment of MS at 480mg.  To us, it appears to be an attempt by Biogen at taking a very broad Patent and narrowing it down with multiple confusing assumptions. 

Below are a few quotes from the Northern District of West Virginia’s Order finding the ‘514 Patent Invalid (as quoted in Biogen’s Opening Brief).  We believe that these quotes provide an idea of the specifics that Biogen will be arguing against in its Appeal of the District Court’s Decision.  

“Here, Mylan contends that the ’514 Patent, when viewed as an integrated whole, fails to satisfy this statutory requirement because it does not demonstrate that, as of February 8, 2007, Dr. Lukashev and Dr. O’Neill “possessed” a method of treating MS with a therapeutically effective amount of DMF, i.e., 480mg/day” (Biogen’s Opening Brief, PDF Page 100).

“Because Methods 1-5 can be used for a plethora of neurological diseases, there are no “blaze marks” in Method 4 that would lead a POSA specifically to MS. Ariad, 598 F.3d at 1348. Nor, as Biogen posits, does Method 4 “link” a therapeutically effective amount of DMF to a dose of 480mg/day” (Biogen’s Opening Brief, PDF Page 105).

“The examples following this broad disclosure also fail to direct a POSA to the conclusion that a therapeutically effective amount of DMF is 480mg/day (BID). Strikingly, 480mg dosing is mentioned only once in three examples: “from about 240 mg to about 720 mg per day; or from about 480 mg to about 720 mg per day; or about 720 mg per day” (JTX 2000 at 23 (emphasis added)). Although Biogen and its expert insist that 480mg to 720mg/day is the narrowest and, therefore, the most preferred range, thereby teaching a 480mg/day dose (Dkt. Nos. 359 at 49-50, 102, 143-44; 377 at 27, 29), this reading is neither credible nor persuasive. … Based on the results of Biogen’s Phase II study, as of the claimed priority date of February 8, 2007, a POSA would have known that 720mg/day of DMF (TID) is a therapeutically effective dose for treating MS, and that lower doses, such as 360mg/day of DMF (TID) and 120mg/day of DMF (QD), are not. …” (Biogen’s Opening Brief, PDF Page 106). 

Below are quotes from the Parties’ respective Briefs in Appellate Case #20-1933 that provide an overview of what we expect the Parties to argue during Oral Arguments on December 8, 2020.

                Biogen’s Opening Brief:

“Whether the district court’s finding that the asserted claims of the ’514 patent were invalid for lack of written description should be reversed where the district court (1) failed to consider the specification as a whole and found no “blaze marks” to direct a skilled artisan to the claimed method of administering a therapeutically effective dose of 480 mg/day of DMF to treat MS, even though the specification describes MS as a disease to be treated with the described methods and defines “therapeutically effective amount” as reducing the hallmark characteristics of MS; (2) misapplied the doctrine of judicial estoppel; (3) disregarded the express disclosure of the claimed dose because the specification allegedly did not flag it as the most preferred dose; and (4) erroneously imposed a heightened written-description requirement based on Biogen’s evidence of nonobviousness, including unexpected results.” (PDF Page 17).

“First, the district court failed to consider the specification as a whole from the perspective of a skilled artisan. Read through that lens, the specification’s disclosures that method 4 comprises “administering … a therapeutically effective amount of … DMF,” Appx67(4:29-32), that an “effective dose of DMF … can be … from about 480 mg to about 720 mg per day,” Appx74(18:58-64), and that “the neurological disease is MS,” Appx67(3:13-14), expressly disclose to a skilled artisan the use of 480 mg/day of DMF to treat MS. Indeed, the specification focuses on MS over all other neurological diseases described, and both method 4 and the patent’s definition of “therapeutically effective amount” refer to slowing or preventing what the patent discloses (and the parties’ experts agree) are MS’s hallmark characteristics: demyelination, axonal loss, and neuronal death. … But Novozymes and this Court’s other “blaze marks” cases do not require that the claimed invention be neatly disclosed in the same words that appear in the claims. They merely prohibit patentees from claiming a newly defined subset of species after disclosing massive genera without any indication as to which species they possess. That is not the case here.” (PDF Page 35 - 36).

“Fourth, the district court erroneously held that the 480 mg/day dose was not adequately described because the patent did not indicate to a skilled artisan that it would be the “most effective” or “preferred” dose. Appx31-32. Written description law does not require that an embodiment be the most preferred to be adequately described; it need only be disclosed so that a skilled artisan can “discern the limitation at issue in the claims.” Purdue Pharma L.P. v. Faulding Inc., 230 F.3d 1320, 1323 (Fed. Cir. 2000); see ScriptPro LLC v. Innovation Assocs., Inc., 833 F.3d 1336, 1341 (Fed. Cir. 2016). The disclosure of 480 mg/day as the lowest endpoint of the narrowest dose range in the specification is sufficient for those purposes.” (PDF Page 37).

“… The patent discloses that “an effective dose of DMF or MM[F] to be administered to a subject orally can be … from about 480 mg to about 720 mg per day.” Appx74(18:58-64). A skilled artisan would understand that this dosing information refers to method 4, the only monotherapy treatment method described in the patent. Moreover, a skilled artisan would know that column 18, by describing the dose of DMF as “effective,” is directed to MS because the definition of “therapeutically effective dose” means one effective to slow or prevent demyelination, axonal loss, and/or neuronal death, which are the characteristics of MS. Appx1510-1511(488:1-489:12). The specification, when read as a whole, thus ties these disclosures together and guides a skilled artisan to the claimed invention. Appx1516-1517(494:22-495:20). If that were not enough, it is undisputed that a skilled artisan would know that 720 mg/day of DMF was effective to treat MS, and the patent’s disclosure of a narrowest range connecting the 480 mg/day dose to this known effective dose provides yet another reason for a skilled artisan to know that the patent is disclosing doses effective to treat MS.” (PDF Pages 44 – 45).

Mylan’s Response Brief:

“The ʼ514 specification describes five methods falling into two basic categories: three methods for screening or evaluating compounds for potential use against neurological diseases (Methods 1 through 3), and two for treating such diseases (Methods 4 and 5). … The specification devotes less discussion to using such compounds for disease treatment (Methods 4 and 5). Method 4 is described generically as including “methods of treating a neurological disease by administering to the subject in need thereof at least one compound that is partially structurally similar to DMF or MMF.” (PDF Pages 17 - 18).

“… the specification mentions potential dosage levels for DMF in a single paragraph in column 18 that makes no mention of its use in the treatment of any specific disease. Appx74 (18:52-64). That passage teaches that an appropriate DMF dose will vary depending on multiple factors, and it provides a series of exemplary “effective dose” ranges falling between 100 and 1,000 mg per day … That paragraph includes the specification’s sole reference to 480 mg/day of DMF, which appears as one endpoint in one of multiple exemplary ranges provided without reference to the treatment of any particular disease.” (PDF Page 19).

“… since 2007 Biogen had been prosecuting an unrelated family of applications directed to screening of Nrf2 activators that ultimately produced the ʼ514 patent. Soon after receiving the Phase III trial results and filing the ʼ373 application, Biogen made substantial changes to then-pending Application No. 12/526,296 from that older, unrelated family. As modified, that application ultimately led to the ʼ514 patent through a continuation application. In June 2011, Biogen altered the title of the ʼ296 application to refer to MS treatment rather than Nrf2 screening assays … It replaced the pending claims with new claims directed to treating MS by administering 480 mg/day of DMF, the subject matter of the claims in its ’373 application. Appx3481-3484; Appx3480. Biogen also altered the inventorship. Until then, the sole named inventor for each application in the priority chain had been Matvey Lukashev, a laboratory scientist whose work focused on the Nrf2 pathway rather than treatment of particular diseases. Biogen added Gilmore O’Neill as an inventor. Appx3437-3438. Dr. O’Neill was a clinician who had been involved with the Tecfidera® clinical trials and had nothing to do with Dr. Lukashev’s Nrf2 work.” (PDF Pages 23 – 24).

“The district court closely followed this Court’s written description precedent, which looks for “blaze marks” in the specification to demonstrate possession when a claimed invention is not expressly described. No such blaze marks in the ’514 patent would have led a POSA to the claimed invention. Biogen seeks to piece together its case from three separate parts of the specification: a discussion of MS in column 1 that mentions neither DMF treatment nor 480 mg/day dosing; a definition of “therapeutically effective amount” in column 5 that mentions neither DMF nor 480 mg/day, and a passing mention of 480 mg/day in column 18 that does not refer to MS and is directed to a method that the ’514 patent associates with more than 30 different diseases. Those are not blaze marks indicating a path; they are scattered trees in a forest.” (PDF Page 32).

“The court further found that among the various DMF doses described in column 18 of the specification, a POSA in 2007 would have believed that 720 mg/day was effective to treat MS and that lower doses mentioned in the patent were not. Id. Dr. Greenberg testified that 720 mg/day was known as an effective dose of DMF for treating MS. Appx1450 (Tr.428:3-6). Dr. Wynn agreed and added that a POSA’s baseline view at the time would have been that there was no reason for a POSA even to investigate a lower dose of 480 mg/day.” (PDF Page 36).

“As an alternative route from the doses in column 18 to MS, Biogen turns away from the list of diseases discussed in the patent and instead argues a POSA would connect three widely spaced dots: (i) the word “effective” in column 18; (ii) the definition of “therapeutically effective dose” in column 5, which mentions demyelination, axonal loss, and neuronal death; and (iii) the reference to those effects in column 1 as features of MS. Putting them all together, Biogen completes the puzzle as follows: [A] skilled artisan would know that column 18, by describing the dose of DMF as “effective,” is directed to MS because the definition of “therapeutically effective dose” means one effective to slow or prevent demyelination, axonal loss, and/or neuronal death, which are the characteristics of MS.” (PDF Page 46).

The Parties’ Opening Briefs in Appellate Case #2020-1933 are attached as two PDF files.  Please let us know if you are interested in receiving copies of the Parties’ briefing in Appellate Case #2020-1673 (the Appeal of the IPR).