In OSI Pharmaceuticals, LLC v. Apotex Inc.[1] the Federal Circuit reversed the Patent Trial and Appeal Board’s inter partes review decision that claims 44-46 and 53 of OSI’s patent U.S. 6,900,221 (‘221 Patent) were unpatentable as obvious.[2]  It is a noteworthy case because it squarely addresses obviousness and reasonable expectation of success in a pharmaceutical case, and highlights the importance of predictability.

It is perhaps the case in 2019 that a cancer diagnosis and the word “chemotherapy” does not carry the chilling effect that it once had.  That is a mercy, because the mere recitation of the clinical side effects of chemotherapy: nausea, vomiting, and hair loss, simply do not capture the experience of watching a friend resignedly stagger from one chemo treatment to the next.  Nor does it prepare you to watch a once-robust loved one slowly melt away, looking at you with eyes that never quite hide their fear.  Such was the case in years past for many who suffered non-small cell lung cancer (NSCLC), fortunately however, work continued to find an alternative to chemotherapy.  Eventually, OSI obtained FDA approval for N-(3-ethynylphenyl)-6,7-bis(2-methoyethoxy)-4-quinazolinamine (erlotinib).[3] It functioned by inhibiting the epidermal growth factor receptor (EGFR). OSI applied for and finally obtained the ‘221 patent on May 31, 2005 covering the use of erlotinib for treatment of NSCLS.  Claim 44 of the patent is as follows:

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.

An IPR was instituted on the ‘221 patent by Apotex, and the Board found that claims 44-46 and 53 would have been obvious over Schnur in view of Gibbs or 10-K.[4]  Schnur teaches a class of compounds for treating hyperproliferative diseases, such as cancer, which inhibit oncogenic and protooncogenic protein tyrosine kinases, such as EGFR.[5]  Erlotinib is listed as a preferred compound.[6]  Schnur teaches that its compounds can treat tumors, such as lung tumors, and may treat lung cancer, however, it does not discuss NSCLC.[7]

Gibbs is a review article related to signaling mechanisms in the cell associated with tumor malignancy.[8]  Gibbs states that erlotinib is in clinical trials (citing two references) and has good anti-cancer activity in preclinical models, especially in small cell lung cancer.[9]  One of the references cited by Gibbs relates to anti-tumor effects of several compounds on cancers, including NSCLC, however, erlotinib is not mentioned.[10]  The other reference teaches erlotinib inhibiting EGFR in mice and humans, but does not discuss NSCLC at all.[11]

The 10-K reference is OSI’s submission to the SEC disclosing that erlotinib targeted a variety of cancers, that it had finished Phase I safety trials and had begun Phase II trials in cancer patients, and that it was an active inhibitor of epidermal growth factor receptor.[12]  However, the 10-K did not disclose any data on erlotinib’s effect with NSCLC.[13]

On appeal, the Federal Circuit found that the Board’s findings were not supported by substantial evidence.[14]  The foundation of their reasoning rested on the incredibly high unpredictability of cancer treatment with drugs.

But the asserted references do not disclose any data or other information about erlotinib’s efficacy in treating NSCLC.  The record does not contain any clinical (human) data or pre-clinical (animal) data.  It does not even include in vitro (test tube) data regarding erlotinib’s effect on NSCLC.  At the same time, it is undisputed that NSCLC treatment was highly unpredictable with an over 99.5% rate of failure for drugs entering Phase II clinical studies.[15]

Phase II studies typically involve specific patient groups and are directed to better understanding possible adverse effects, optimal dosage, efficacy, and safety risks, however, for NSCLC treatment in the years 1990 to 2005, only 7 of 1631 new drugs gained FDA approval.[16]  Erlotinib was one of the seven.  Complicating matters is the challenge that simply because a drug is effective in treating a particular type of cancer, does not necessarily translate to success in treating a different type.[17]

In addressing the flaws of the Board’s analysis of the Gibbs reference, the Federal Circuit noted that it was a review article commenting on two other studies.  However, the first of these studies, while discussing compounds for the treatment of tumors (including NSCLC), did not mention erlotinib at all.[18]  The second study disclosed treatment of cancer with erlotinib, but there was no mention of NSCLC.[19]  Based on this, there simply was no support for the Board’s finding that there was a clear inference in Gibbs of teaching anti-cancer activity for NSCLC.

In addressing reasonable expectation of success, the Federal Circuit noted that Schnur discloses 105 compounds for treating cancer, but failed to disclose any in vitro or in vivo effectiveness data for erlotinib, or to otherwise suggest the use of erlotinib to treat NSCLC.[20]  As for Gibbs, as discussed above, it teaches that erlotinib has good anti-cancer activity against some cancers but not specifically NSCLC, so that the combination of references did not contain data or other positive information about erlotinib’s effectiveness against NSCLC.[21]  The Federal Circuit highlighted the interaction between efficacy data and predictability.

The lack of erlotinib-NSCLC efficacy data or other indication of success here is significant because of the highly unpredictable nature of treating NSCLC, which is illustrated by the over 99.5% failure rate of drugs entering Phase II. *** Indeed, this failure rate includes only drug candidates that were promising enough to make it to Phase II trials, and does not even take into account all of the drug candidates that failed in the preclinical stage and in Phase I studies.[22]


Thus, there is not only a complete absence of data regarding the effect of erlotinib on NSCLC, but also a complete absence of an indicator or mechanism on which a person of ordinary skill could rely to reasonably expect success.[23]

Turning to the combination of Schnur and 10-K, the Federal Circuit criticized the Board’s reliance upon the fact that erlotinib had completed Phase I clinical trials, and that an IND had been filed, meaning that preclinical animal efficacy data had been obtained.[24]  However, there was no information on erlotinib’s effect on NSCLC, much less preclinical efficacy data of erlotinib specific to NSCLC.[25]  Once again, the Federal Circuit referenced cancer drug failure rate.

The Board did not properly consider OSI’s 10-K statement in light of the 99.5% failure rate of the other 1,630 drugs entering Phase II trials for the treatment of NSCLC.  Given this high failure rate, a fact finder could not reasonably find that the 10-K statement combined with Schnur would have been sufficient to create a reasonable expectation of success.  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. *** the only reasonable expectation at the time of the invention was failure, not success.[26] (emphasis added)

The takeaway from this case is that high failure rates of compounds in a particular research area (such as cancer drug development), place a loftier requirement of specificity on the references cited by the patent office against an application having successful trials in the same research area.  The 99.5% failure rate here appears to have given rise to a specificity requirement approaching that of a §102 rejection.  But while hope is no standard for an obviousness determination before the Patent Office, it is the mainstay of those whose lives have been touched by cancer.

[1] 2018-1925 (Fed. Cir. October 4, 2019).
[2] Slip Op. at 2.  A second issue raised (and lost) by OSI in the appeal was the constitutionality of IPR’s.
[3] Slip Op. at 4.
[4] Slip Op. at 6.
[5] Id.
[6] Id.
[7] Slip Op. at 6-7.
[8] Slip Op. at 7.
[9] Id.
[10] Id.
[11] Id.
[12] Slip Op. at 8-9
[13] Slip Op. at 9.
[14] Slip Op. at 13.
[15] Id.
[16] Slip. Op. at 4.
[17] Slip Op. at 16.
[18] Slip Op. at 14.
[19] Id.
[20] Slip Op. at 15-16.
[21] Slip Op. at 16.
[22] Id.
[23] Slip Op. at 16-17.
[24] Slip Op. at 17.
[25] Id.
[26] Slip Op. at 18.

-William Reid

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