In the most recent loss for Kyle Bass’ hedge fund in IPR proceedings, the Board denied institution of an IPR based on a petition filed by Coalition for Affordable Drugs V LLC (CFAD) against Biogen MA Inc. IPR2015-01136, Paper 23 (Sept. 2, 2015).  The Board (per Judge McKelvey) held that two of the references relied upon by CFAD, which described a pilot study and anticipated Phase 2 studies, did not render obvious the claims directed to a method of treating multiple sclerosis because they described a mere “hope” of efficacy.  Asserting clinical trials as prior art in an IPR can be challenging because the scope of printed documentation that is publicly accessible may be limited.

The claims at issue were generally directed to a method of treating multiple sclerosis comprising administering dimethyl fumarate, monomethyl fumarate, or a combination thereof. IPR2015-01136, Paper 23 at 6. One of CFAD’s obviousness challenges was based, in part, on an article describing a pilot study and an anticipated Phase 2, including study design (Kappos). IPR2015-01136, Paper 23 at 7-9. The referenced pilot study was not made of record. IPR2015-01136, Paper 23 at 9. Another of CFAD’s obviousness challenges was based, in part, on a disclosure from ClininicalTrials.gov describing a pilot study and an anticipated proof of concept study (ClinicalTrials). IPR2015-01136, Paper 23 at 12-13. Both references generally relate to investigating dimethyl fumarate (DMF) – one of the compounds recites in the challenged claims – as a potential therapy for multiple sclerosis.[1] IPR2015-01136, Paper 23 at 7-8, 12. For example, Kappos stated that the anticipated study “will determine the efficacy of [DMF]” in multiple sclerosis. IPR2015-01136, Paper 23 at 12. Likewise, ClinicalTrials stated that “DMF … is an immunomodulator demonstrating definite therapeutic efficacy in psoriasis … and possible therapeutic efficacy in [multiple sclerosis]…..” IPR2015-01136, Paper 23 at 12.

A “Hope” That The Drug Will Be Useful Is Not Enough For Unpatentability

The Board rejected the challenge based on Kappos for a variety of reasons. Notably, the Board explained that Kappos does not contain “a description that DMF is useful for treating MS; rather, at best it is a ‘hope’ that DMF will turn out to be useful for treating MS. A hope may or may not come true and does not establish that DMF is useful for treating MS.” IPR2015-01136, Paper 23 at 12-13. The Board went on to explain that a Phase 2 study was needed to demonstrate efficacy: “Phase II may or may not establish that DMF is useful for treating MS. However, prior to completion and evaluation of Phase II, one skilled in the art would not necessarily understand from Kappos that DMF is useful for treating MS.” IPR2015-01136, Paper 23 at 10-11 (emphasis added).

PTAB Declined To Decide Whether The Document Was A Printed Publication

The Board assumed, without deciding, that Clinical Trials is a printed publication and rejected the challenge based on ClinicalTrials because “ClinicalTrials is deficient as a prior art teaching of DMF being useful to treat MS for many of the same reasons that Kappos is deficient.” IPR2015-01136, Paper 23 at 13. “ClinicalTrials, at best, describes a ‘possible therapeutic efficacy in MS,’ citing a 2001 article by Schimrigk et al. (not of record).” Thus, “ClinicalTrials might support a finding that one skilled in the art ‘hopes’ DMF will be useful in treating MS. However, as noted in our discussion of Kappos, a ‘hope’ may or may not come to pass.” IPR2015-01136, Paper 23 at 14.

While the Board based its decision on a limited record, e.g., the underlying pilot studies were not made of record, the reasoning may make it difficult to challenge method of treatment claims in the absence of clinical evidence of efficacy.  A “hope” of efficacy is not good enough.

So far, no CFAD petition has been granted by PTAB, and one other CFAD petition has been denied based on lack of public accessibility of the asserted prior art documents (see “Kyle Bass Loses Round 1 of IPR Attack Against Pharma/Biotech Patents”).  For a discussion of other pending petitions filed by CFAD, see “Will New PTAB Rules Impact IPRs Filed By Kyle Bass Hedge Fund?”.  In at least one other CFAD IPR proceeding, the PTAB has requested additional briefing on questions relating to whether it is proper for IPR petitions to be filed by entities like CFAD.  See “PTAB Requests Additional Briefing On Hedge Fund IPR Questions:  A Decision May Be Near.”

^{[1] Biogen argued that the references did not disclose that the agent referenced, BG00012, was, in fact, DMF.}