1© Astex Therapeutics Limited

Freedom to Operate from a SME’s perspective

RSC FTO Seminar

Dr. Michelle Jones

2© Astex Therapeutics Limited

Astex Therapeutics• Established in December 1999

(Founders & Founding Director) Prof. Sir Tom Blundell, Harren Jhoti, Prof. Chris Abell, Roberto Solari

• Internally generated pipeline of novel molecularly targeted oncology drugs– Three drug candidates in Phase I and Phase IIa

clinical trials– Further drug candidates in pre-clinical development

• Multiple strategic alliances (>$1 billion bio dollars) with leading pharmaceutical companies

– Partnerships in multiple therapeutic areas– Milestones and royalties on partnered programs

• Based in Cambridge (UK) with ~75 employees– Structural Biology & Biophysics– Computational Chemistry & Informatics– Medicinal Chemistry– Biology & DMPK– Pre-clinical & Clinical Development

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Astex Facilities

Protein production

X-ray crystallography

Protein NMR

Medicinal chemistry

Computational chemistry

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• Assets a mixture of in-house projects & strategic alliances with pharmaceutical partners

• >150 Patent Family filings in last 6 years

• Searching to support pre- and post-filing activities e.g. FTO

Astex Therapeutics

• IP Team - 2 Patent Attorneys + Information Manager

• Pyramid™ platform aims to generate at least one small molecule IND per year

• Current focus - oncology and virology

• Industry-leading platform

• < 100 Staff, single UK site

UK Biotech Company, Founded 1999

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IP, FTO and Astex Therapeutics

• Founded based on IP from Cambridge University • 2 Founders from the University of Cambridge

• As part of investment decisions • Astex VC funding 1999, 2001 & 2003 & GSK, J&J, Novartis, Schering

equity investments• Prior to merger & acquisition

• Astex/metaGen 2003• Prior to Collaboration & Licensing deals

• Collaborations with GSK, J&J, Novartis, AZ, Schering, BoehringerIngelheim, Sanofi-aventis, Mitsubishi Pharma & Astellas

• Venture Debt• Astex 2007

• IPO • IPO ready 2007

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IP Rights for Consideration

• Patents• Trade Secrets• Regulatory• Copyright• Trade Marks

• Domain names

• Plant Breeders Rights• Agreements

• MTAs

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Freedom to Operate/Commercialise

• The ability to experiment, manufacture and/or commercialise your invention without the impermissive use of a third parties patented inventions

• No relevant unexpired, enforceable patents in locations targeted

• No relevant patent applications that could become a barrier

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Freedom to Operate Analyses

• Professional searcher • Patent attorney• Never 100% certainty• Time consuming• Expensive• Third parties still require

– warranties– indemnities– stacking royalties

SO WHY BOTHER!

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Why Bother?

• Quantifying and Managing Risk

• Hot Button for potential investors, collaborators, acquirers, IPO

• Risks of infringement• Cost of defending the suit • Injunction = loss of sunk cost, removal from market• Allowed to proceed but with royalty bearing license• Damages (potentially punitive if infringement wilful)

• Guide for internal scientific & business activities

• Policy should be to endeavour not knowingly to infringe valid third party rights

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Small Company - Check Early, Check Often

• Credibility• Prepared for ‘Tricky’ Questions• Speed up Due Diligence• Influence scope of Warranties & Indemnities• Know risks for stacking royalties• Monitor third party IP & manage licensing strategy• Third parties FTO analysis• Opinions – Privilege• Drive licensing/business strategy

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Before embarking…

• Need to understand the key drivers right from the start • When you do it depends on the company and business strategy• You can’t do everything so what level of risk are you prepared to

accept• What can be done in budget and timescale• Short and Long term business objectives• Management understands what is being done and what is not being

done and risk in not doing it

Determines the requirements for FTO search and analysis

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Check When

• Prior to embarking on research• Prior to foreign filing• Check at key transition points in development of a

product• Before key publications?• Periodically prior to introduction • Whenever parameters change• Monitor relevant patents, reassess & up date

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We all have the same search needs, but…

• Biotech Sector

• Search for own benefit plus benefit of others

• Due Diligence• Venture Capital & Debt• Out-licensing• In-licensing• Collaborations• External scrutiny

• Search earlier• No surprises during Due

Diligence!

• Pharmaceutical sector

• Search for own benefit

• Risk management• Internal projects• In-licensing• Pre-launch

• Search later?

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FTO Due Diligence

• FTO Due diligence lists are fairly standardised

• For a Platform, full analysis of every step is required

• Research Program clearance needs to be better than many pharma’s would do for their internal research

• For Products (compounds/antibodies/nucleic acids) the timing of the clearance might be earlier than the corresponding in-house clearances

Third party is buying in solutions not problems

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Research Tools

• Promoters – T7

• Markers– Green Fluorescent Protein

• Transgenic Animals– Cre-lox– Oncomouse

• Targets– Target– Anti-target

• Cells, methods, antibodies etc….

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Targets

• All filed on same target Galanin 2 receptor within a year• All got something granted in US or EP

– Who do you need a license from?– Lack of certainty

• Keep good lab book records!!!

University of Toronto/ University of TexasMerck & Co.

27.12.96WO 98/29441

Astra Pharma Inc.19.07.96WO 98/03548

Bayer Corp.05.06.96WO 97/46681

Synaptic Pharmaceutical Corp.

24.01.96 – 27.09.96WO 97/26853

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Small Molecules - Check What?

Lead Identification/optimisation- Target e.g. screening tool- Other research tools e.g. expression systems, crystal structures, assays- Compounds (generically or specifically covered in patents)

Post-candidate nomination/development- Salts, polymorphs, enantiomers, prodrugs- Synthetic methods- Intermediates- Uses/Dosages- Formulation- Combinations- Delivery systems

Launch/Post Launch - Line extensions

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• Types of search request• Patentability• Validity• Infringement & FTO

• Search focused on:• Chemical Genus/species• Synthetic Intermediates• Synthetic Processes• Biological Target• Assays – methods, tools• Medical uses• Combinations…..

• Search strategies and output reviewed in line with strategic goal• When you search that important

Searching Approaches

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Searching

• Professional searcher• Know the resources available• Know the value add of Pay Databases• Know the limitations of Databases including Pay

Databases• Keep a good record of searches• PIUG (Patent Information User Group) List http://wiki.piug.org/display/PIUG/Patent+Databases

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• Compounds• CAS MARPAT, REGISTRTY databases• DERWENT databases

• Intermediates in preparation• Chemical Abstracts, Beilstein, PCD• If known, when? If not, Markush searches

• Processes / conversions• CASREACT, Beilstein, PCD

• Prodrugs and derivatives• Markush searches

• Formulations, Combinations, Uses• Keyword searches

What can searchers do?

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Third Party Document of interest:• Family checks• Legal status checks• Searches around claims of document found• Divisions & continuations found (and keep looking!)

Make use of other people’s work!• Information Disclosure Statements submitted by Applicant to USPTO• International Search Reports and Opinions from WIPO• Supplementary Search Reports from the EPO• Internal citations in the application and during prosecution• Authors, inventors – own publications• Prosecution File histories – Examiner citations

What else do? –Post-searching checks

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FTO Issue Identified – What next?

• Location/Country specific issues • Research exemption, Bolar exemption• Biotech Directive implementation

• Design Around - avoid equivalents• Switch or discontinue • Attack

• Third Party Observations• Opposition• Re-examination• Declaratory Judgement• Revocation

• Obtain a licence• Acquire patent portfolio/company• Ignore - with or without opinion

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What then?

• Opinions• Patentability• Validity/enforceability of Own or Third party IP• Freedom to operate

• Privilege available• Varies on a country to country basis• In-house v External lawyers

• Privilege lost• To Disclose or not to Disclose during Due Diligence

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Due Diligence and Licensing Benefits

• Decide what to search at what time• Risks managed• Can tick the FTO boxes• Raise the comfort level of potential collaborator• Accelerate the process• Know your limits with regard to Warranties, Indemnities &

Stacking Royalties• Disclosure Letters• Fix an issue• Deal price management

Thank youwww.astex-therapeutics.com