In OSI Pharmaceuticals LLC v. Apotex, Inc., the Federal Circuit reversed the PTAB’s determination that a Tarceva® patent was invalid as obvious because the decision was not supported by a reasonable expectation of success. The court emphasized that it was not creating a rule requiring efficacy data, and seemed swayed by evidence of a 99.5% failure rate of other drugs developed to treat non-small cell lung cancer.

The Patent At Issue 

The patent at issue was OSI’s U.S. Patent 6,900,221, which is listed in the Orange Book for Tarceva®. The court cited claim 44 as representative of the claims at issue.

44. A method for the treatment of NSCLC (non small cell lung cancer), pediatric malignancies, cervical and other tumors caused or promoted by human papilloma virus (H[P]V), Barrett's esophagus (pre-malignant syndrome), or neoplastic cutaneous diseases in a mammal comprising administering to said mammal a therapeutically effective amount of a pharmaceutical composition comprised of at least one of N-(3-ethynylphenyl)-6,7-bis(2-methoxyethoxy)-4-quinazolinamine, or pharmaceutically acceptable salts thereof in anhydrous or hydrate forms, and a carrier.

Tarceva® includes erlotinib hydrochloride as the active ingredient. 

The Asserted Prior Art 

The Federal Circuit opinion summarizes the asserted prior art as follows:

• Schnur relates to a class of compounds “which are useful in the treatment of hyperproliferative diseases, such as cancers, in mammals.” Out of more than 100 compounds disclosed, “[e]rlotinib is listed as a preferred compound, and a method for synthesizing erlotinib is described.” “Schnur states that lung cancer is one of the many conditions that can be treated,” but does not mention NSCLC in particular. 

• Gibbs is a review article that “reviews and discusses the data of over thirty published research studies, including one discussing erlotinib.” Gibbs states that erlotinib “appear[s] to have good anti-cancer activity in preclinical models, with an acceptable therapeutic index, particularly in patients with non-small cell lung cancer.” However, “[t]here is no data regarding the use of erlotinib to treat NSCLC in Gibbs or in any of the references cited in Gibbs.” 

• OSI’s SEC 10-K submission filed for the fiscal year that ended September 30, 1998, which stated that erlotinib “targets a variety of cancers including ovarian, pancreatic, non-small cell lung and head and neck,” and had “achieved a significant milestone with the completion of Phase I safety trials and the initiation of Phase II clinical trials.”

The PTAB Proceeding

The USPTO Patent Trial and Appeal Board (PTAB) granted Apotex’s petition for Inter Partes Review of the ’221 patent based on the assertion that the patent “would have been obvious over Schnur in view of Gibbs or OSI’s 10-K.” The PTAB determined that the claims were obvious because a person of ordinary skill in the art “would have combined Gibbs or OSI 10-K with Schnur and had a reasonable expectation of success of achieving the invention of challenged claims 44 and 53.” In so doing, “the Board concluded that an ordinary artisan would understand from the [10-K’s report of] commencement of Phase I studies that ‘preclinical animal efficacy data’ had been submitted to the FDA,” and also found that Gibbs indicated that preclinical studies had been done, even though the author had submitted a declaration attesting that “his article was not based on any clinical or preclinical data showing the effect of erlotinib on NSCLC.”

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Stoll, and joined by Judges Newman and Taranto.

The Federal Circuit reviewed the PTAB’s finding of a reasonable expectation of success, and determined that it was not supported by substantial evidence.  

At the outset, the court found that the PTAB had overstated what was disclosed in the references. With regard to Gibbs, the court emphasized that Gibb’s statement regarding efficacy against NSCLC was not supported by any data. Thus, the court found “the Board’s finding that there is a ‘clear inference’ in Gibbs that ‘erlotinib has anti-cancer activity against non-small cell lung cancer’ is thus not supported by substantial evidence.” The court noted further that neither Schnur nor the 10-K provided any data (in vitro, pre-clinical or clinical) supporting the efficacy of erlotinib against NSCLC.  

The court cited the “over 95.5% failure rate of [NSCLC] drugs entering Phase II” as indicative of “the highly unpredictable nature of treating NSCLC,” and found no data or proven mechanism of action to overcome that unpredictability and provide a reasonable expectation of success.

The court concluded: 

These references provide no more than hope—and hope that a potentially promising drug will treat a particular cancer is not enough to create a reasonable expectation of success in a highly unpredictable art such as this. Indeed, given a 99.5% failure rate and no efficacy data or any other reliable indicator of success, the only reasonable expectation at the time of the invention was failure, not success. It is only with the benefit of hindsight that a person of skill in the art would have had a reasonable expectation of success in view of the asserted references. 

The court therefore reversed the obviousness determination.

When Is Efficacy Data Required?

The Federal Circuit opinion emphasizes that efficacy data is not always required for a reasonable expectation of success, but how do we know when it is? Here, the court seemed to emphasize the high failure of other drugs developed to treat NSCLC, which seems to evoke the “failure of others” factor of Graham v. John Deere. Evidence of unpredictability also was a factor in another case where the court found a reasonable expectation of success lacking. However, when the prior art is closer, the court may be less likely to reverse an obviousness determination on this basis.