This document summarizes key points about interchangeable follow-on biologics from a webinar presentation. It discusses the regulatory pathway for biosimilar and interchangeable biologics under the Biologics Price Competition and Innovation Act. The challenges of developing interchangeable versions of complex biologics are also addressed. Reasons provided for why the FDA may approve interchangeable versions of biologically complex drugs include their willingness to approve similar drugs in the past and evidence that distinct biologics can be safely used interchangeably.

1. Scientific and Intellectual Property Issues of Interchangeable Follow-On Biologics Robert Bakin, Ph.D., USPTO Patent Agent Bernard Rhee, R.Ph., Esq. Technology & Business Law Advisors, llc December 14, 2011 BioPharm® Insight Webinar www.tblawadvisors.com Adapted from “The Inevitability of Interchangeability” and “Business Implications of the 2011 Leahy-Smith America Invents Act”, Fall 2011, Robert Bakin, Ph.D. and Bernard Rhee, R.Ph., J.D.

2. Background: Interchangeable FOBs March 2010 enactment of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) established a legal framework for approval of copycat versions of “biological products”. The BPCIA is similar in spirit to the 1984 Hatch-Waxman amendments. Both acts provide for a legal/regulatory abbreviated pathway (e.g.., ABLA or ANDA) for copycat versions of biological product. ABLA (a.k.a §351(k)) biologics are best characterized as “follow-on biologics” (e.g., FOBs) rather than “generic biologics” due to distinct chemical differences in the follow-on biologic relative to the reference listed biologic (RLB). Compare to traditional ANDA (a.k.a. §505(j)) generics that are chemically identical. The BPCIA provides for “biosimilar” and/or “interchangeable” FOBs compared to a RLB. A “biosimilar” FOB is analogous to a §505(b)(2) drug. An “Interchangeable” FOB is analogous to an §505(j) drug. Similar to ANDA generic small molecule drugs - interchangeable FOBs may be automatically substituted for the reference biologic without physician approval. Unlike generic ANDA drug applications, filing an ABLA application is not assumed to be infringing. Complex FOB pre-litigation pathway (i.e., §351(l)) will determine litigated BLA patents. www.tblawadvisors.com Technology & Business Law Advisors, llc

3. Background: The Science of FOBs www.tblawadvisors.com Technology & Business Law Advisors, llc Since 1984, interchangeable versions of drugs like this have been approved. Atorvastatin (< 1kDa, very low complexity)

4. Background: The Science of FOBs www.tblawadvisors.com Technology & Business Law Advisors, llc Enoxaparin (~ 5 kDa, Moderate Complexity, “pseudo” biologic.) (Comprised of sugar polymers, not amino acid polymers like true biologicals) (FDA Docket No. FDA-2003-P-0273) “ For the reasons stated above, we conclude that the following five criteria are sufficient to demonstrate sameness of the enoxaparin active ingredient: #1. Equivalence of physicochemical properties #2. Equivalence of heparin source material and mode of depolymerization #3. Equivalence in disaccharide building blocks, sequence of oligosaccharide species, and fragment mapping #4. Equivalence in biochemical and biological assays #5. Equivalence of in vivo pharmacodynamic profile” Since 2010, interchangeable versions of drugs like this have been marketed.

5. Question: Can we make interchangeable versions of these complex biologics ? www.tblawadvisors.com Technology & Business Law Advisors, llc Background: The Science of FOBs Agalsidase  (~55 kDa, High Complexity) etanercept mAb (~150 kDa, Highest Complexity) enoxaparin ( (

6. www.tblawadvisors.com Technology & Business Law Advisors, llc Background: Composition of Biological Products Every approved Reference Listed Biologic is a genus of distinct, yet nearly identical subspecies of biologics. Marketed Biologic Marketed Silkscreen

7. 42 U.S.C. §262 (as amended by the BPCIA) §351(k)(4) A biosimilar is considered to be interchangeable with the reference product if the FOB application is: “ sufficient to show that biological product is: (i) biosimilar to the reference product, and (ii) can be expected to produce the same clinical result in any given patient. For a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch . §351(k)(5) GENERAL RULES.- (A) ONE REFERENCE PRODUCT PER APPLICATION. -A biological product, in an application submitted under this subsection, may not be evaluated against more than 1 reference product. www.tblawadvisors.com Technology & Business Law Advisors, llc

8. 42 U.S.C. §262 (as amended by the BPCIA) §351(i)(1) The term 'biological product' means a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein (except any chemically synthesized polypeptide ), or analogous product . . . applicable to the prevention, treatment, or cure of disease or condition of human beings . §351(i)(2) The term 'biosimilar' or 'biosimilarity', in reference to a biological product that is the subject of an application under subsection (k), means- (A) that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components ; and (B) there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product §351(i)(3) The term 'interchangeable’ . . . means that the biological product may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product. §351(i)(4) The term 'reference product' means the single biological product licensed under subsection (a) against which a biological product is evaluated in an application submitted under subsection (k). www.tblawadvisors.com Technology & Business Law Advisors, llc

9. www.tblawadvisors.com Technology & Business Law Advisors, llc Goalposts for Biosimilar FOBs “ Active” Biodrift “ Passive” Biodrift 2010 BLA approved biological product (e.g., Myozyme TM ) 2013 Drifted Biosimilar Biologic B 2015 Drifted Biosimilar Biologic A Non-FOB, Alternative Biologic (e.g., Lumizyme TM ) Analytic studies Clinical studies Animal studies Impurities, Excipients, Stablizers, etc.

10. Interchangeable FOB – Time on the clinical use field of play. tblawadvisors.com Technology & Business Law Advisors, llc • Biologics are always changing. The longer you keep your biosimilar FOB in the field of play (i.e., clinical use), the better chances for interchangeability. Approved BLA drug specifications are generally unknown to FOB applicant. FOB applicant generally has access to multiple lots of commercial product. Interchangeable to an approved biological product no longer on the market?

11. Reason 1: FDA Willingness to Approve Biologically Complex Interchangeable Drugs www.tblawadvisors.com Technology & Business Law Advisors, llc 1997: 505(j) ANDA menotropins. Nos. 073598 and 073599 (discontinued). 1999: 505(b)(2) menotropins. Pergonal TM and Repronex TM . 2005: 505(b)(2) hyaluronidases. Wydase TM and Hylenex TM . 2005: 505(b)(2) calcitonins. Miacalcin TM and Fortical TM . 2006: 505(b)(2) human growth hormone. Genotropin TM and Omnitrope TM . 2010 & 2011: Two 505(j) ANDA enoxaparins. 2012 (?): Is 505(j) ANDA glatiramer acetate (Copaxone TM ) next? * One notable exception has been FDAs unwillingness to approve a 505(j) generic version of the incompletely characterized conjugated estrogen product Premarin TM .

12. Reason 2: Distinct Biological Products Are Successfully Being Used Interchangeably www.tblawadvisors.com Technology & Business Law Advisors, llc Fabrazyme TM (BLA) Replagal TM (foreign approvals) Cerezyme TM (NDA) Uplyso TM Vpriv TM NDA (US Approval pending) (FDA approved 2010) switch switch ClinicalTrials.gov Identifiers: NCT00478647, NCT00712348, NCT00705939, NCT00962260 and NCT01268241.

13. www.tblawadvisors.com Technology & Business Law Advisors, llc Reason 3: “Drifted” Interchangeable Biologics Exist on the Market (Aranesp TM , Rituxan TM and Enbrel TM) “ All tested products remained on the market with unaltered labels in the tested time frame, indicating the observed changes were predicted to not result in an altered clinical profile and are therefore acceptable by the health authorities.” M. Schiestl, et al. Nature Biotechnology, April 2011.

14. www.tblawadvisors.com Technology & Business Law Advisors, llc Reason 4: Anticipation of Multiple Interchangeable Follow-On Biologics • US lawmakers must have envisioned the eventual approval of numerous interchangeable biologics as both competing bills allowed for multiple interchangeable biologics. §351(k)(6) EXCLUSIVITY FOR FIRST INTERCHANGEABLE BIOLOGICAL PRODUCT. - Upon review of an application submitted under this subsection relying on the same reference product for which a prior biological product has received a determination of interchangeability for any condition of use, the Secretary shall not make a determination under paragraph (4) that the second or subsequent biological product is interchangeable

15. www.tblawadvisors.com Technology & Business Law Advisors, llc Reason 5: Emergence of “Authorized/Branded” Interchangeable Follow-On Biologics • Under the PPACA, a BLA holder (or even a closely related corporate entity) is ostensibly not precluded from acquiring interchangeability exclusivity after expiration of their own reference BLA product 12-year exclusivity period. • In 1996, FDA approved the biologic Avonex TM (interferon beta-1a) based on clinical trial data transferred from one corporate entity to another. It should be noted that the two corporations were collaborators and the successful manufacture the biological product Bioferon TM occurred only after an initial failed attempt. • Likelihood that corporate collaborations will have advantages in rapidly manufacturing interchangeable versions of their own biologic products.

16. www.tblawadvisors.com Technology & Business Law Advisors, llc Reason 6: Third Party Payors and Physician Enlightenment • Due to the high cost of biological products, payors will likely encourage FDA approval of interchangeable biologics. Payors have several options to dissuade use of the more expensive reference drug, including: (i) denying coverage to reference biologic, (ii) requiring a higher co-payment for the reference biologic, (iii) requiring authorization for reference biologic, and (iv) mandating “step therapy” where clinical failure of the cheaper interchangeable is a prerequisite to the more expensive reference biologic • With increasing clinical trial safety assurances, physicians will likely (albeit slowly) accept interchangeable biologics – especially for patients not previously administered a branded biologic. For these drug naïve patients, it may be entirely possible that the interchangeable biologic is a better fit than the branded drug without concerns about cross-immunogenicity. Many biologics are administered in a hospital setting.

17. www.tblawadvisors.com Technology & Business Law Advisors, llc Reason 7: Post-Approval Biosimilar Data Accumulation • No less than fourteen non-interchangeable follow-on biologics are on the market in Europe. • European biosimilar applicants are requested to conduct post-approval pharmacovigilance studies for many follow-on biological products. Inevitably, data will begin to accumulate suggesting that at least one European biosimilar is likely to be fully interchangeable (at least scientifically) with the reference product. • European approval of Retacrit TM (an Eprex TM /Erypo TM biosimilar) included Phase III crossover studies demonstrating near “identical” therapeutic equivalence.

18. www.tblawadvisors.com Technology & Business Law Advisors, llc Reason 8: Emergence of Follow-on Biologic “Suitability Petitions”? FDCA §505(j)(2)(C) [21 U.S.C. §355] “ Suitability petitions” are traditionally relevant to the Hatch-Waxman generic drug approval process. Here, a generic drug maker seeks to gain ANDA approval for a fully interchangeable generic drug despite being chemically distinct from the reference drug. Indeed, non-identical, small-molecule ANDA drugs may be approved “because of differences approved in a petition under §314.93 [i.e., Petition to Request a Change from a Listed Drug] or because the new drug and the listed drug are produced or distributed by different manufacturers.” (21 C.F.R. § 314.127(a)(7)).

19. Part 2: Follow-On Biologic Intellectual Property Issues www.tblawadvisors.com Technology & Business Law Advisors, llc 1. On September 16, 2011, the America Invents Act (AIA) was enacted. Major revisions to US patent law. Generally speaking, less patent friendly. 2. Some sections took effect immediately in September 2011. Others to take effect either September 2012 or March 2013 – right around the time many biologic patents begin to expire. The new provisions of the AIA may be used to attack US biotech patents/applications. Interplay between FDA granted 12-year exclusivity and USPTO granted patent exclusivity. Adapted from “Business Implications of the 2011 Leahy-Smith America Invents Act”, Fall 2011 Robert Bakin, Ph.D. and Bernard Rhee, R.Ph., J.D. www.tblawdvisors.com.

20. www.tblawadvisors.com Technology & Business Law Advisors, llc America Invents Act – Effective September 16, 2011 Prior User Defense – Applicable to all new patents, AIA will expand “good faith” prior “commercial use” defenses to presumably all types of patents. The prior user defense cannot be used for most patented subject matter developed at institutions of “higher education”. Corporate entities are now generally immune from infringement allegations if qualifying prior commercial use, including “internal commercial use” (e.g., trade secret use), can be established. Reexamination Standard – The standard for new requests for inter partes reexamination will change to “a reasonable likelihood that the requestor would prevail” with respect to at least one claim challenge. Corporations should realize that the current new standard is a higher burden of proof for inter partes reexamination patent challenges.

21. www.tblawadvisors.com Technology & Business Law Advisors, llc America Invents Act – Effective September 16, 2012 Inter Partes Review – Petitions for inter partes r eview by a person who is not the patent owner shall (i) be based on patents or printed publications for an issue actionable under 35 U.S.C. §102 or §103 and (ii) be filed after the later of 9 months after patent/reissue grant or termination of any post-grant review proceeding. Corporate defendants should begin monitoring third party patent applications in anticipation of making the difficult decision whether to file an inter partes review request or a declaratory judgment claim of invalidity. Corporations should realize that (i) the new standard is a higher burden of proof for patent challengers, (ii) there is no longer the requirement for the question of patentability to be “new”, and (iii) patents subjected to inter partes review may emerge stronger . Post-Grant Review – For patents granted under the first-to-file system (March 16, 2013), any petition for post-grant review by a person who is not the patent owner must be “identified, in writing and with particularity . . .” and filed within 9 months of patent/reissue grant date. Post-grant review may be based on any statutory grounds of invalidity with a final decision to be issued in 1 year (including 35 U.S.C. §112 Written Description and §112 Enablement challenges and §101 subject matter). Corporations should begin monitoring competitor’s pending applications in anticipation of filing a broad array of post-grant review challenges. Stakeholders should realize that patents subjected to post-grant review might emerge stronger. Current patent seekers should file before the effective date to avoid future post-grant review.

22. www.tblawadvisors.com Technology & Business Law Advisors, llc America Invents Act – Effective September 2012 (cont.) Supplemental Examination – Retroactively effective September 16, 2012, patent owners may be granted “supplemental examination” if the request “raises a substantial new question of patentability”. Corporations are encouraged to promptly request supplemental examination to “cleanse” any patent that may arguably have a defective prosecution history (e.g., due to inequitable conduct). Preissuance Submissions – Applicable to any pending application, any third party may submit any printed publication “of potential relevance” with a “concise description” of relevance before the earlier of: (i) the date of Notice of Allowance or (ii) the later of (a) 6 months after date of publication or (b) the date of the first Office Action. While submissions with commentary may be used to prevent issuance of a patent, surviving patents will emerge stronger.

23. www.tblawadvisors.com Technology & Business Law Advisors, llc America Invents Act – Effective March 16, 2013 First-Inventor-to-File (Disclose/Publish/Announce/etc.) – Effective March 16, 2013, priority will be calculated from the first inventor’s effective filing date with the PTO. Foreign public knowledge, foreign public use or art “otherwise available to the public” is now available as prior art if they predate the effective filing date. Corporations should consider (i) expanding the scope of prior art searches and (ii) filing fully enabled patent applications (including provisional applications) as early as possible to avoid the expanded pool of prior art. U.S. patents will be able to rely on a foreign filing date for priority purposes and to defeat later-filed applications. 35 U.S.C. §103 obviousness will be analyzed as of the effective filing date (and not the date of invention). Businesses should realize that strategic pre-filing disclosures might substantially negate foreign patent rights. True inventors are afforded a one-year grace period from disclosure to file US patent application (e.g. at day 366 post-disclosure, patent rights are lost).

24. www.tblawadvisors.com Technology & Business Law Advisors, llc FDA Market Exclusivity vs. Patent Exclusivity • Approved BLAs now afforded 12 years of market exclusivity (12.5 years if pediatric studies conducted). Similar to the 5 years of exclusivity for NDA drugs. Highly unlikely to ever be forfeited. 12 years is a pretty good deal – especially if patent is “weak” or invalid. -VS- • Issued US patents (post-1995) afforded 20 years exclusivity from “priority date” (often patent application filing date). Validity is highly likely to be challenged by third parties. Patent rights may be lost at any time. Particularly after Sept. 16, 2012 when novel patent challenging sections of America Invents Act become effective.

25. www.tblawadvisors.com Technology & Business Law Advisors, llc FDA Market Exclusivity vs. Patent Exclusivity

26. www.tblawadvisors.com Technology & Business Law Advisors, llc 1. Is it possible to manufacture a non-infringing “design-around” interchangeable FOB? In other words, FDA says scientifically identical while USPTO says legally different. Will all “ biobetters ” be patentable? 2. Will the new Enbrel “submarine patent” US 8,063,182 be the first to be challenged under §351 of the BPCIA? Will the “Prior User” defense of the 2011 AIA ever get used? 3. Seek Patent protection or Maintain as Trade Secret? “Prior User rights” of the 2011 AIA enhances the value of biotech Trade Secrets. Will an inventor forgo patent protection, knowing that any subsequent efforts to enforce a patent could be stymied by another inventor who happens to be secretly using the same invention? Rely on 12-year market exclusivity only? 4. Biotech patent applications have §112 WD and §112 Enablement challenges. These weaknesses will likely be exploited by the new patent validity challenges described in the America Invents Act. What is the likelihood of being able to subsequently patent biotechnology drug manufacturing trade after new prior art laws take effect March 16, 2013? Does secret commercialization remain a bar to patentability? Is secret commercialization within the meaning of “public use”? Overseas advantage, there is no time limit on length of Trade Secret before filing patent application. No Orange Book equivalent exists for patented BLA approved biological products – no automatic 30-month stay. Only “composition of matter” and “method of use” patents – no “process patents” listed in Orange Book. Requirements for OB patent listing and/or maintenance are “flexible” and “paragraph vii carve out” possible ( See Caraco v. Novo Nordisk, SCOTUS 2011). Role of biological product injection devices for product differentiation of interchangeables (maybe biosimilars). Future issues: FOBs and the 2011 America Invents Act

27. www.tblawadvisors.com Thank You Technology & Business Law Advisors, llc