My friend sent the following message to Thero this evening. Thoughts or comments anyone?
John,
While I am extremely disappointed with the way that you, the board, and senior legal and business management have approached the Hikma/Reddy suit, and do believe that there needs to be material consequences for the incompetence displayed, and full explanations to shareholders, I will focus these comments on mitigating this avoidable disaster. My view is that you need to:
Proceed with En Banc Application
While under the circumstances this is a 'lottery ticket' at best, the potential rewards far exceed the cost or risk.
This submission, in arguing for an exception to rule 36, needs to be in very plain language with emphasis on the problems with the 'obviousness' issue and flawed evidence in the District Court decision. Among others, these matters include:
For Mori, that due to the size, lack of statistical significance, study design and analysis errors (discussed by Bhatt) and that a POSA would consider the results only hypothesis generating at best, the study does not rise above the 'clear and convincing standard'. With nothing to loose, contact Trevor Mori?
For Kurabayashi, the cut off footnotes would have significantly strengthened Amarin's case.
Judge Du's convoluted conclusions between triglycerides and Apo B cannot remain unchallenged. And then, with the MARINE patents actually granted on the basis of Apo B, how can the deliberations pertaining to triglycerides be used as a basis for invalidation?
Singer's response to Judge Dyk regarding Novo was incredibly unfortunate when one would have expected that he should know the case 'cold'. Singer should have been able to point out that the evidence for obviousness was flawed or wrong and in such instances the actual wording of the Novo decision should have been used to Amarin's advantage for a win. For a case and over $3 billion of shareholder value to be lost in such a lapse is unforgivable.
En Banc is warranted because of the mistakes discussed above, that the judicial system cannot be allowed to stand on mistakes; and the chilling effect that this case will have on innovation and the pharmaceutical industry.
Furthermore, there are other factors including the inconsistent views regarding Graham Factors among judges and the strong possibility that a different panel may have resulted in a victory for Amarin. Some may wonder if Judge Dyke had a full understanding of the case.
As a final comment, Amarin can make a legitimate argument that some of the issues above were not pursued because there was a belief that they would not have been allowed to 'get as far as they did'.
Develop More Forceful Messaging of Remedies for Inducement
By now, shareholders have brought to your attention (or I hope that your legal team has knowledge of them) a number of past cases that set precedent or provide guidance as to how Amarin might take legal action for remedies or injuctions against inducemt. The MARINE market is very small compared to REDUCE IT and other potential uses and these cases and remedies could be based upon generics (collectively) exceeding certain thresholds of production or prescription. Existing data from 'Symphony' and other organizations is well suited for such use. Other monitoring methods could be contracted or developed.
Now is the time to 'message' such threats, develop specific strategies and control mechanisms and, more importantly, 'educate' (lobby) the public, regulatory and trade bodies and judiciary/law makers in such regard given what has transpired.
I believe that it is highly unlikely that generics would have filed ANDAs if their intent was to be 'satisfied' with the MARINE market.
Communicate More Robust Messaging of Gap Between Current Share Price and True Value
The current share price of less than $5 (down from $26) is vastly undervalued given that, with diligent enforcement, and based on the prior cases/judicial decisions, the market for which generics should be able to approach and capture (people with triglycerides >500 mg/dL) is arguably less than 5% of the overall market. Let's take an overly simplistic approach: If Amarin was worth ~$26 before, and even if 20% of the market were conceeded to generics, the share price should still be worth more like $21.
On top of the above, the market and analysts have largely lost sight of other pending developments such as Europe, China, NASH, EVAPORATE and/or COVID that should add considerable value.
As part of your responsibility to shareholders, you need to find a balance to more forcefully support the share price and limit how I (strongly) believe that you have allowed some to exploit the current situation. A significant open market purchase of shares by each senior manager and board member might be a good start in this regard.
Other Actions
Both the FDA and 'patent office' are not without fault for how this situation has resulted. At minimum, you have a duty to compel a) the patent office to 'stand up' , possibly at en banc, to the reasons for issuing the patents and refuting the actions/decisions of others without a technical basis, and b) the FDA to develop improvements ( as others have noted) such as coding, Orange Book policies or other checks that will limit problems similar to those of this matter in the future.
Got it Alone for Europe
Excuse me for being crude but let's 'get real'. Management has been a laughing stock for adhering to this stance and it has been a significant drag on the share price. I appreciate that you have wanted to buy time or wait until certain matters have clarified. However with what has transpired, and how it has affected strategy, at least message to the effect that all options in concert with a modified US strategy are in play.
Final Comments
With the time available for this note, and information available to me, it is likely that I may have overlooked matters or could have provided more detailed discussion or citations for others. My hope is that my comments will help to focus the efforts of management and consultants.
I have copied this note to Lars Ekman who in addition to being Chairman is the Lead Independent Director and point man for shareholder concerns. I, like any other shareholder, have a right to contact him and would not expect to be chastised as in the past for so doing. Like many others, in the 13 years that I have been a shareholder, I am very disappointed with the perceived lack of transparency and accountability by the board of directors. My expectation is for full accountability from the board for this fiasco ( including answers for the business and legal negotiations and strategies); and a decision to suspend bonuses or stock options until the share price is restored.
If I can help in any way, I would be pleased to accommodate.
Sincerely,
