Ferring Pharm. Inc. v. Serenity Pharm., LLC

• Decision Date: 21 August 2020
• Docket Number: Case No. 1:17-cv-09922 (CM) (SDA)
• Parties: FERRING PHARMACEUTICALS INC., FERRING B.V., and FERRING INTERNATIONAL CENTER S.A., Plaintiffs, v. SERENITY PHARMACEUTICALS, LLC, and REPRISE BIOPHARMACEUTICS, LLC, Defendants. SERENITY PHARMACEUTICALS, LLC, REPRISE BIOPHARMACEUTICS, LLC, and AVADEL SPECIALTY PHARMACEUTICALS, LLC, Counterclaim-Plaintiffs, v. FERRING B.V., FERRING INTERNATIONAL CENTER S.A., and FERRING PHARMACEUTICALS INC., Counterclaim-Defendants.
• Court: U.S. District Court — Southern District of New York

FERRING PHARMACEUTICALS INC.,
FERRING B.V., and
FERRING INTERNATIONAL CENTER S.A., Plaintiffs,
v.
SERENITY PHARMACEUTICALS, LLC, and
REPRISE BIOPHARMACEUTICS, LLC, Defendants.

SERENITY PHARMACEUTICALS, LLC,
REPRISE BIOPHARMACEUTICS, LLC, and
AVADEL SPECIALTY PHARMACEUTICALS, LLC, Counterclaim-Plaintiffs,
v.
FERRING B.V., FERRING INTERNATIONAL CENTER S.A.,
and FERRING PHARMACEUTICALS INC., Counterclaim-Defendants.

Case No. 1:17-cv-09922 (CM) (SDA)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

August 21, 2020

FINDINGS OF FACT, CONCLUSIONS OF LAW AND VERDICT

McMahon, C.J.:

The court, for its findings of fact after trial, conclusions of law and verdict:

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I. FINDINGS OF FACT

A. The Parties

1. Serenity and Reprise

FF1. Reprise is a corporation organized under the laws of the State of New York, having its principal place of business at 120 North Main Street, Suite 400, New City, New York 10956. [Fein Affidavit ¶ 61.]¹ Dr. Fein and Dr. Nardi are principals and equity partners in Reprise; Linda and Maria Cheng are also Reprise partners. Dr. Fein has a 44% ownership stake, and he gave Dr. Nardi an 18% interest in Reprise as his business partner. Reprise, in turn, holds a 10-11% ownership stake in Serenity. [Trial Tr. 421:9-24.]

FF2. Serenity is a corporation organized under the laws of the State of Delaware and has its principal place of business at 480 NE 30th Street, Unit 1807, Miami, FL 33137, and maintains a location at 122 Willow Street, Brooklyn, New York 11201. [Fein Affidavit ¶ 65.]

FF3. Serenity is the exclusive licensee of Reprise's intellectual property rights in desmopressin, including the patents at issue here. [PX-3², at Non-AGN0098020.] Serenity was formed to develop desmopressin products in conjunction with Reprise. [Fein Affidavit ¶ 59.]

FF4. Together, Serenity and Reprise are the owners of any intellectual property rights Dr. Seymour Fein - the Chief Medical Officer of Serenity, founding principal and controlling shareholder of Reprise, and the sole listed inventor of the patents-in-suit - has in the patents at

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issue in this case. [PX-1, at ASR-FER000193133-36; PX-2, at ASR-FER000193150-51; Fein Affidavit ¶ 66.]

FF5. At the time of the original complaint, Allergan, a commercial partner of Serenity and Reprise, held all rights to the patents at issue in this lawsuit, which had been assigned to them by Reprise and Serenity. [PX-4, at AGN-FER000005051-56; PX-5, at AGN-FER000004984.] In 2017, Allergan terminated the parties' License, Transfer, and Development Agreement. [PX-7, at AGN-TM000001.]

FF6. Counterclaimants then entered into a commercial development agreement with Avadel. [PX-8, at ASR-FER00000514-92.] Through that agreement, Avadel became an exclusive sublicensee to the patents-in-suit. [Id.]

FF7. Avadel filed for Chapter 11 bankruptcy in February 2019. (See In re: Avadel Specialty Pharmaceuticals LLC, 1:19-BK-10248 (D. Del.).) Ferring reached a settlement with Avadel in May 2019, at which point Avadel was dismissed from this case and Ferring confirmed it would seek no discovery or testimony from Avadel. [D.I.³ 500.]

2. Ferring

FF8. Ferring Pharmaceuticals Inc. is a privately held Delaware corporation with its principal place of business located in Parsippany, New Jersey. Ferring Pharmaceuticals Inc. is owned by Ferring Holding, Inc., which is owned by Ferring B.V. [D.I. 18 ¶ 1.]

FF9. Ferring B.V. is a Dutch private limited liability company having its registered office in the Netherlands. [Id. ¶ 2.]

FF10. Ferring International Center S.A. is a Swiss private company with its principal place of business in Saint-Prex, Switzerland. [Id. ¶ 3.]

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FF11. Ferring (a term that will be used to refer to all Defendants collectively) engages in pharmaceutical research and development activities. [Id. at 4.]

3. The patents-in-suit and Person of Ordinary Skill in the Art

FF12. The patents-in-suit in this action are U.S. patents 7,405,203 (the '203 patent) and 7,579,321 (the '321 patent). The patents-in-suit are generally directed to the use of the drug desmopressin to treat various voiding disorders while reducing the risk that the patient develops hyponatremia, a potentially harmful side effect. The methods of treatment involve administering to a patient a pharmaceutical composition comprising a dose of desmopressin sufficient to achieve and maintain certain plasma/serum concentrations and/or urine osmolalities over a defined period of time. [Mayersohn Affidavit ¶ 32; Murray Affidavit ¶ 108.] The '321 patent is a continuation of the '203 patent. The sole inventor listed on the patents in suit is Dr. Fein.

FF13. A Person of Ordinary Skill in the Art ("POSITA") at the time of the invention would include an individual or a team of individuals, having, as his/her/their minimum qualifications, an M.D. or Pharm.D or Ph.D. degree in pharmacology, pharmaceutics, or other related discipline, with knowledge in the field of pharmacokinetics and pharmacodynamics, or an MD with experience in diagnosing and treating patients with voiding disorders.

B. Background Information: Pharmacology

FF14. At a broad level, pharmacology is the study of chemical substances, such as drugs, that interact with the human body through chemical and biological processes. [Spaans Invalidity Affidavit ¶ 32.] It has two branches: pharmacokinetics and pharmacodynamics.

1. Pharmacokinetics

FF15. Pharmacokinetics is one branch of pharmacology that seeks to analyze the actions of the human body on a pharmaceutical drug compound. [Stipulated Fact ¶ 4.]

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FF16. The time course of absorption of the drug into the bloodstream and the eventual clearance of the drug from the body is a pharmacokinetic measurement. [Stipulated Fact ¶ 5.]

FF17. In pharmaceutical drug development, researchers analyze many different pharmacokinetic parameters, including but not limited to the blood plasma concentration of the pharmaceutical drug absorbed into the bloodstream at different time intervals. This information can then be graphed as a function of time, as shown below:

Image materials not available for display.

Spaans Invalidity Affidavit ¶ 34.

FF18. As shown above, after a drug is administered to a subject, it is gradually absorbed into the bloodstream and the plasma concentration increases, reaches a maximum, and then returns towards the baseline. [Id. ¶¶ 35-36.]

FF19. The maximum plasma concentration achieved after administration of a drug to a subject is known as the C_max. [Stipulated Fact ¶ 6.] The time it takes to reach the C_max is known as the T_max. [Stipulated Fact ¶ 7.]

FF20. Total exposure is shown by the AUC, which is the total "area under the curve" of the plasma concentration graph. [Spaans Invalidity Affidavit ¶ 37.]

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FF21. Bioavailability is defined as the fraction of the administered dose of a drug that is absorbed into the bloodstream. Bioavailability, like other pharmacokinetic parameters, may depend on the formulation, dosage form, and the route of administration. [Stipulated Fact ¶ 8; Spaans Invalidity Affidavit ¶ 37.]

FF22. Intravenous ("i.v.") administration of a drug is typically assumed to have 100% bioavailability because the drug is administered directly into the bloodstream. Other routes of administration, which rely on absorption into the bloodstream rather than direct injection, will have lower bioavailability. [Id.; Mayersohn Rebuttal Affidavit ¶ 36.]

2. Pharmacodynamics

FF23. Pharmacodynamics is another branch of pharmacology. It analyzes the pharmacological effect of a pharmaceutical drug on the body. [Stipulated Fact ¶ 9.]

FF24. With respect to the graph below, the pharmacodynamic parameters are represented by the "duration of action," the minimum effective concentration ("MEC"), and the minimum toxic concentration ("MTC").

Image materials not available for display.

Spaans Invalidity Affidavit ¶¶ 41-42.

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FF25. The therapeutic range for a drug lies between the MEC and MTC, and the time that the blood plasma concentration remains within that therapeutic range (and thus is producing an effect) is known as the duration of action. [Id. ¶ 42.]

3. The relationship between pharmacokinetics and pharmacodynamics

FF26. Pharmacokinetic and pharmacodynamic events overlap, and the concentration of drug in the blood (or plasma) and the rate at which that concentration changes over time are driving forces for pharmacodynamic events following drug dosing. [Stipulated Fact ¶ 10.]

FF27. While the absolute dose administered affects the plasma concentrations, it is the plasma concentrations that determine the pharmacological response to the drug. [Stipulated Fact ¶ 11.]

FF28. With an understanding of the pharmacokinetics and pharmacodynamics of a particular formulation, drug developers can develop a dose response relationship and use this relationship to select doses and potential formulations, and target plasma concentrations to produce the desired effect to treat patients. Generally, in order for the dose response relationship to be useful in predicting how different formulations or routes of administration for a particular drug will behave, the underlying pharmacokinetic and pharmacodynamic data must be robust and accurate. [Spaans Invalidity Affidavit ¶ 44.]

FF29. An example of a dose response curve is shown below:

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Image materials not available for display.

As can be seen above, the dose-response curve begins at zero plasma concentration and zero pharmacodynamic effect. As the plasma concentration of the drug increases, the pharmacodynamic effect also increases. [Id. ¶¶ 45-46.]

FF30. Typically, the relationship between the plasma concentration and pharmacodynamic effect is nonlinear. In other words, small changes to plasma concentrations at the lower end of the spectrum produce larger changes in pharmacodynamic effect, but small changes to higher plasma concentrations result in smaller changes in pharmacodynamic effect. This is because, at higher plasma concentrations, the drug is reaching its maximum effect...