New Dimensions, New Challenges; Diversifying IP

Management in the Transforming Pharmaceutical Business

IP Law Asia Summit 2016

Takeda Pharmaceutical Company Limited

Head of Operations (IP), Intellectual Property

Seiji Mori

October 24, 2016,

1

Menu

1. Introduction

2. Pharma Industry and Patent

3. Challenges

New technology

Open Innovation

Repositioning / Re-invention

Access to Medicine

Trademark for patient support services / programs

Introduction of Takeda Pharmaceutical

2

3

Business Overview

Sales(2015)：\1,807.4 bn

R&D (2015) : \325. 0 bn（19.1% of Sales）

Presence in over 70 countries

Employee: 31,168 (as of 2016 March)

R&D Presence

4

5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Med

icin

e’s

con

trib

ution to

th

e tre

atm

en

t

Satisfaction with treatment

Herpesvirus infection

Tuberculosis

Dermatophytosis

MRSA infection

Chlamydial infection

Candidiasis

Stomach cancer

AIDS

Colon cancer Liver cancer Lung cancer

Breast cancer

Uterine cancer

Prostate cancer

Leukemia

Uterine fibroid

Diabetes

Diabetic(al) neuropathy

Diabetic(al) retinopathy Diabetic(al) nephropathy

Hyperlipemia

Schizophrenic

Depression

Anxiety neurosis

Parkinson's disease

Alzheimer's Disease

Senile dementia

Multiple sclerosis

Epilepsy

Autonomic disturbance

Neuromuscular disturbance and myopathy

Hypertension

Angina

Myocardial infarction

Irregular heartbeat

Hemorrhage (including subarachnoid hemorrhage) Cerebral infarction

Allergic rhinitis

Bronchial asthma

Atopic dermatitis

Decubitus ulcer Chronic rheumatoid arthritis

Degenerative arthritis

SLE

Spondylopathy

Lumbago

Osteoporosis

Gout

Peptic ulcer

Liver cirrhosis Chronic hepatitis B

Chronic hepatitis C

Nephrosis syndrome

Chronic glomerulonephritis

Chronic renal failure

Benign prostatic hypertrophy

Urinary incontinence/pollakiuria

Endometriosis Glaucoma

Cataract

Source: questionnaire survey by mail

Survey period: October 15 to December 22, 1999

Target: medical doctors (128 respondents)

Source : The Japan Health Sciences Foundation: “Report on Key Domestic Technologies 2000 – Outlook of medical needs in 2010 –”

Unmet medical needs

Strive to develop and

provide new therapies

to Patients

Pharma Industry and Patent Unmet Medical Needs

6

Number of compounds for preclinical trial

Application

for approval

Approval

2–3 years 3–5 years 3–7 years 1–2 years

Number of synthetic (extracted) compounds

Number of compounds for clinical trial

9 to 17 years

2005 to 2009 Survey by JPMA

• Extremely low success rate

• R & D costs : several 10 billions~ over100 billions yen （JPMA)

1,300 millions $ （PhRMA)

Number of

compounds

Cumulative

success rate

652,336 203 75 26 21

1：3,213 1：8,698 1：25,090 1：31,064

High Risk and Huge R&D cost on Drug Discovery

Lowering of PTS for Drug Development

2005-2009 ： 1/31,064

2004-2008 ： 1/25,482

2003-2007 ： 1/21,677

1999-2003 ： 1/12,324

1989-1993 ： 1/ 3,700

7

Ratio of compounds made to a drug

New Drug Generation in World

8

Japan is rated as the third capable country to generate new

drugs in the world

USA：44

Switzerland

：16

Japan：13

UK ： 9

France ： 5

Denmark： 5

Germany: 4 Others: 3

Origin: The JPMA's Office of Pharmaceutical Industry Research Pharmaprojects, ＠2013 IMS Health. IMS World Review

9

Patent for Pharma Products Patent for Automobiles, IT

Substance Patent

Formulation

patent

Formulation

patent

Use patent

Use patent

• One basic patent for one product.

• Licenses generally not available for

substance patent.

• Not rare for a third party patent to

cause others to avoid development of

a product.

• Hundreds of patents for one product

• Licenses generally available

• International standards not uncommon

where one core technology is made

publicly available.

Unique nature of pharma patent

10

5 10 15 20 25 30 （year） R&D Investment (A)

Sales Revenue(B)

Sales Revenue（B)－R&D Investment (A)⇒ Investment for new drug

Launch New Drug

Patent expiration

R&D Period

10～20 years

Exclusive period

10～15 years

Patent Term Extension

Investment for new drug

Investm

ent

Recovery

Generic Drug

Patent secures investment to develop new drug

11

New Technology

Chemistry

Biology Pharmacology

Pharmaceutical Innovation 2012年5月 JPMA

Genetics

Model

formation

Pharmaco-

genomics Molecular

design Toxico-

genomics

Ethology Pharmacy

Biotechnology

Chemical

Informatics

Genomics

Proteomics

Biostructure

Measurement

techniques

Physics

Chemistry

Biology

Biophysics

Physical

Chemistry

Biochemical

Analytics

Information

Science Computer

Chemistry

Bioinformatics

Toxicology

Pharmacokinetic

pharmacology

Metabolism

Many areas are connected by advanced networks

12

New Technology

Pharmaceutical Innovation 2012年5月 JPMA

12

Pharmacology

Changes in R&D

13

Unmet Medical Needs

Increasing Healthcare Costs

Mass Small

Molecule

New

Compound

Reposition

Re-Invention Personal

Diversified

Approaches

Advanced Medical Technology and Patent Eligibility

2016年5月17日 14

Personalized Medicine

Regenerative Therapy,

Gene Diagnostics, etc.

Increasing cross-over of medical practice, medicine

and business

Patent Eligibility of

Medical Practice (surgery, therapy, diagnostics)

JP ＵＳ ＥＵ

Medical practice for humans × ○ ×

Medical practice for animal ○ ○ ×

Method of diagnosis utilizing tissues

extracted from livings

○ ○ ○

15

＜Examination guideline of JPO＞

Inventions of medical practice (inventions of methods of surgery, therapy or diagnosis for

humans) are not patent eligible.

Method of extracting samples and data from human body （e.g. blood, cell, tissues）, or

analyzing them are patent eligible.

If the samples extracted from human body are supposed to be returned to the same

body, the method of extracting or analyzing is deemed "medical practice for humans" -

NOT patent eligible.

Even when returned to the same body, method of manufacturing medicine (e.g. vaccine,

genetically modified preparation, cell medicine) or medical material (e.g. artificial

substitute of human body) is patent eligible.

｜IP Operations | 2015年9月

Immunological Cell Therapy

Disease

R&D

Clinical

Approval

Manufacture

Sale

Traditional Business

Cell Therapy Business Model

Patient Activating

Agents

Activate

Cleaning &

Screening

Patient

Put in

Patent Eligibility of

Things in Nature ⇒ Cell, DNA, etc)

日本 ＵＳ ＥＵ

Things in Nature ○

If isolated

artificially

× ○

If a technical

effect is revealed

17

＜Examination Guideline of JPO＞

If things in nature such as chemical substances or microorganisms have been isolated

artificially from their surroundings, those are creations and considered as a statutory

"invention".

(US) 2 steps test

1) Process, Machine, Manufacture or Composition?

2)-a Law of Nature or Natural Phenomenon?

2)-b "Significantly more" than judicial exceptions

(EU)

To find a previously unrecognised substance occurring in nature is also mere discovery

and therefore unpatentable. However, if a substance found in nature can be shown to

produce a technical effect, it may be patentable. e.g. antibiotics, gene

｜IP Operations | 2015年9月

Regenerative Therapy - ES cell and iPS cell

18

＜Patent Eligibility＞

ES cell (Embryonic Stem) cell is not patentable in Europe.

iPS cell (induced pluripotent stem) is patentable.

iPS cell itself is patented by way of product-by-process claim in JP

Patented as a nuclear reprogramming factor in US and Europe

Could patent be granted on iPS cell, which has same structure as existing ES cell?

Could patent be granted on internal organ created from iPS cell?

＜Freedom to Operate＞

Many and diversified approaches /steps are taken for industrialization （producing

cells, induction of differentiation of cells, delivery system of cells, etc）

• Difficult to count on one or just a few patent right(s) like small molecule compound

• Difficult to specify which third-party patents are relevant, and then make a solution

Modest profile in producing pancreatic

hormone, but better in engrafting

Better profile in producing pancreatic

hormone

Human pancreatic β cell

Human iPS Cell Intermediate

Mesodarm

Robert Kneller , Nature Reviews Drug Discovery 9, 867-882, 2010

Impact of Open Innovation

New drug seeds from academia or bio-venture （1998－2007）

US：60％ from Academia or biotechs

Open innovation looks the mainstream.

Large

Pharma

Japan： Less than 20％ from academia

or biotechs

19

20

Academia - Pharma

• Kyoto Univ. - Takeda :T-CIRA

Pharma – Pharma

• Daiichi-Sankyo – Astellas: Co-use of Compound Library

Public offer by Pharma

• Shionogi : FINDS

• Daiichi-Sankyo: TaNeDS

• Astellas: a-cube

• Takeda: Cockpi-T, RINGO-T

Academia – Academia

• Tokyo Univ.: Drug Discovery Open Innovation Center

• Kyoto Univ. Center for Innovation in Immunoregulative

Technologies and Therapeutics

Government Driven

• Drug Discovery Supporting Network

Open Innovation for drug development in Japan

21

1. Long term (10 years) commitment

2. "Open Innovation": Housed in the center of a drug company's research headquarter. Over 100 researchers at one site.

3. Public Contribution: After filing patents, CiRA and Takeda encourage publication of outcomes that will accelerate public research.

4. Internationality: The Program will recruit scientists from all over the world.

RINGO-T

• Invite academia to present new assay systems.

• Takeda will put its compound libraries into screenings, using the assay system.

• Takeda reports back to the presenter the findings gained by the screenings.

• The presenter can freely disclose and utilize the outcome.

• The outcome may lead to breakthrough to new drug discovery by academia, industries or Takeda.

22

23

Traditional Model

・Small Molecule

・Lifestyle Disease

・Blockbuster

Closed - all things

done in house –

Patent Strategy to

protect in-house R&D

fruits

Diversified, Complicated ・Large molecule, Molecularly

targeted drug, biologics,

regenerative medicine

Open Innovation for

innovative therapy /

medicine

Diversifying IP

Management

Shift into More "Open Innovation"

1 Team in 1 company

discovers and advances

drug independently

Multiple teams at multiple

players advances drug

collaboratively

IP Management in Open Innovation

24

100% 0%

Blended Research

Target

Validation

Clinical

Screening

Formulation

Corporate Sponsored

Research

Med.

Chem.

Internal Role

• Disclosure of invention

• Co-Managing IP with

partner

a. Filing strategy

b. Claim coverage

c. Publication

d. Timing of filing

e. Searching

f. Quality

• Control

a. Prosecution

b. 3rd party license

c. Enforcement

? ?

• Open Innovation with

academia

a. Publishing

b. Only right to negotiate

Managing IP by picking

what work is outsourced

and what is internal

Try to do internally what

will get patented that

covers commercial

product

Reposition / Re-invention

25 25

eg. thalidomide;

sales halted due to side

effects

⇒Myeloma treatment

eg. Lansoprazole

（anti-ulcers）;

Capsule

⇒Orally disintegrated

tablet

eg. Colerectal cancer

FOLFIRI Therapy; Folinic acid ＋Fluorouracil

＋ Irinotecan

Ｉ New Indication

eg. Avigan®；

anti-influenza

⇒anti- ebola

eg. Viagra ® ；

Intended for angina

pectoris

⇒ED

Ⅱ New Formulation, Administration, Dose

eg. Abilify ®

（Schizophrenia）；

Oral⇒ 1/ 4w Injection

(sustainable)

eg. Enbrel®

（rheumatics）；

Syringe ⇒ Pen type

injection

Ⅲ Combination use

eg. Hepatitis C

Protease inhibitors ＋ Peginterferon＋ Ribavirin

Core

Lansoprazole layer

Intermediate layer

1st enteric layer

2nd enteric layer

Over coating layer

3rd enteric layer

Lansoprazole oral disintegrating (OD) tablets and

microgranules

Enteric-coated microgranules

Inactive granules

Enteric-coated microgranules comprised of seven

layers Comparison of granules of between capsules and OD tablets

Formulation Capsules OD tablets

particle granules microgranules

particle size ca. 1,000μm ca. 300μm

number of particles ca. 200 ca. 10,000

（30mg products)

Cross-Section

Easy for patients to take without water because of adherence improvement!

Japanese Patent

03746167Z

26

Patentability issue in developing countries

27

Repositioning or Re-invention of existing drugs requires less time and

costs for R&D, and contribute to improve patients' QOL in efficient way.

1. Utility Doctrine

a. Canada; a patent's usefulness must be established, whether by

demonstration or by sound prediction at time of patent application

2. Patentability

a. Argentina; new dose or combination use is not patentable.

b. India; new indication is not patentable, as considered merely

"discovery"

c. Indonesia; new law likely incorporate same article as India

3. Restriction on data submission

a. China; Data submission after patent filing is not allowed

(Art.26(3)/22(3))

Emerging issues on pharma IP

Japan

Supreme court

Decision on

PTE /PBP

Application of

Treatment act

US

Patent

eligibility

Patent troll

Canada

Utility

Doctrine

Brazil

ANVISA/INPI

Double

examination

Australia

Market-Size

Damages

India

Compulsory

License

Section 3(d)

Enforceability of

patent

(A)international organization (green)

(B) not R&D countries（red）

(C) R&D countries（blue）

China

Art.26(3)/22(3)

Counterfeit

28

Korea

Green list

(Market-Size

Damages)

Geneva

UN-HLP

（AtM）

CBD-ABS

WIPO-SCP

2016年5月17日

Compulsory License

WHY?

Trend of anti Pharma IP for Access to Medicine around the world

High drug prices criticized as a barrier of Access to Medicine

Remarkable CLs in oncology area: 8 cases in three countries

2013

CL in India (rejected)

Herceptin®

(Genetech)

Ixempra® (BMS)

Sprycel® (BMS)

2007-2008

CL in Thailand

Taxotere® (Sanofi)

Femara® (Novartis)

Tarceva® (Roche)

2012

CL in India

Nexavar®

(Bayer)

2016

CL in Colombia

under discussion

Glivec®

(Novartis)

Next?

29

Case Study: Colombia

Issue Facts Actions

Healthcare cost

increase

- Colombian universal healthcare

system health insurance to bear

high costs for coverage of Glivec®

- No access issues

Colombian Government might need

CL to lower health insurance costs

WHO backing

activities

- Colombia seek for WHO's advice

- WHO recommended CL for

Imatinib as an essential medicine

- Unsuitable usage of CL

WHO mentioned drug price was a

barrier of AtM and CL is a mean for

affordability (without full IP

understanding)

Failed negotiation (Novartis & Colombian MoH)

Despite Novartis' good faith efforts,

the parties could not reach an

agreement

- Possible direct and discriminatory

price reduction (Colombian gov.)

- Lobbying activities through

industry associations are ongoing

Glivec® (Imatinib) at risk of being warranted with CL

- Cancer drug (oral tablet) for KIT+ gastrointestinal stromal tumors (Novartis)

- Current total patients in Colombia: 2,000 (600 receive Glivec® treatment and 1,400

receive generic treatment)

- Price: lowered twice in the last three years*3

- Patent coverage: expires in 2018; only covers beta polymorph (not infringed by

generic version)

31

Our initiative to improve Access to Medicine

• HIV/ AIDs, Tuberculosis, Malaria, NTDs (Neglected Tropical

Diseases) in developing countries ---> "Unmet Medical Needs"

• Public health care system, health insurance system,

distribution system, pricing system, healthcare professional,

public education and new drug development......

• It is essential to realize Flexible Partnerships between public

sector and private sector as well as other forms of cooperation

within the various stakeholders. >>> Product Partnership.

• Patent drives technology flow and open innovation, and brings

the life to the Technology

• Cases involving Japan

– GHIT

– WIPO Re:Search

Access to Medicine and Innovation

32

GHIT - The Global health Innovation Technology Fund

33

Why products not being provided?

WIPO Re:Search - Structure

34

Takeda's AtM IP Policy

35

Trademark for Patient support services

https://itunes.apple.com/us/app/ibdata/id1110826244?mt=8

iBData is designed to assist you in tracking symptoms associated

with your inflammatory bowel disease (IBD). iBData allows

patients that are enrolled in the iBData program to better track

their symptoms and communicate their condition to their

healthcare provider. Class 09: Computer application software for smart phones

Class 35: Data management service

Class 44: Providing internet-based healthcare information

Trademark for Patient financial support program (US)

www.entyvio.com/entyvio-connect

Entyvio Connect is a completely confidential patient assistance program that puts you in touch with insurance and financial assistance experts called case managers. You'll have a small case manager team—no more than 3 people—who are personally dedicated to your account.

Trademark for Patient support program (CA)

www.yourvantage.ca

YOURVANTAGE will also provide patients with information about their disease and the treatment, as well as customized advice about securing insurance or other reimbursement, based on their coverage and situation.

Class 35: Business administration of patient reimbursement

Class 36: Providing insurance and insurance reimbursement

information

Class 42: Providing medical and scientific research information

Class 44: Providing medical information to patients relating to ---

Trademark for Patient support program (EU)

https://myvyo.com/portal/Login.aspx The myvyo program is a way for patients with moderately to severely active UC/ CD to receive advice on practical steps and lifestyle changes that they can use to manage their overall wellbeing.

APPENDIX

40

Highlights of the Research Collaboration

1. Center for iPS Cell Research and Application (CiRA) at Kyoto

University and Takeda Pharmaceutical Company Ltd. (Takeda) start a

ten-year-long research collaboration (T-CiRA Joint Program).

2. iPS cell and its related technologies to pharmaceutical R&D activities,

such as drug discovery, cell therapy and drug safety.

3. Professor Shinya Yamanaka, the head of CiRA, directs the Program.

4. Takeda will provide:

i. Total research budget: Approximately 20 billion-yen per over ten

years

ii. Research facility: Dedicated space in Shonan Research Center

(Fujisawa, Japan) of Takeda

iii. In-kind research support: 50 Takeda researchers, drug discovery

technologies and other R&D know-hows.

41

42

Patent Applications

Any existing data owned by a product development partner and/or any new

data obtained through activities invested by the GHIT Fund may be

disclosed by the GHIT Fund to a third party if such data is used in a patent

application for a product which was derived from the activities invested by

the GHIT Fund; provided, however: (1) that the disclosure of such data

shall be limited to the proposed title of the invention, a draft of the abstract,

the international non-proprietary name (INN) where applicable, and an

outline of the specifications of such patent application; and (2) such third

party shall take reasonable measures to keep confidential any such data

received from the GHIT Fund.

GHIT Policy

New Data

Ownership of any and all data and findings that is obtained or created through

activities invested by the GHIT Fund and that can be applied for any intellectual

property rights will be discussed and negotiated between participants and/or

product development partners of a project. All final agreements shall be in

alignment with the licensing and pricing principles outlined below.

GHIT Policy

43

Principle of Product Access Policy

Licenses

When product development partners and/or participants are successfully granted

a patent deriving from projects invested by the GHIT Fund, product development

partners and/or participants will grant royalty-free licenses to users operating

in Least Developed Countries (LDCs) as categorized by the United Nations

classification and Low-Income Countries (LICs) categorized by the World Bank

classification. License-related matters concerning middle income countries will be

reviewed on an individual basis with the goal of ensuring reasonable royalty

licenses.

Pricing

In LDCs, LICs and middle income countries, product development partners

and/or participants will set prices for products on the basis of a no gains/no

loss policy that can improve access to the product for patients and citizens of

LDCs, LICs and middle income countries.

WIPO Re:Search - background

⇒ Takeda joined WIPO Re:Search in Sept. 2015

44

• Founded in 2011 by the World Intellectual Property Organization (WIPO), BIO Ventures for Global Health (BVGH), and several leading pharmaceutical companies

• Global initiative established to encourage and facilitate the sharing of

intellectual property assets to advance drug, vaccine, and diagnostic development for malaria, tuberculosis, and neglected tropical diseases (NTDs)

• Consortium membership includes academic and non-profit research

institutions, governmental and non-governmental organizations, and biopharmaceutical companies

• Any resulting product would be made available royalty free in the least developed countries and at a reasonable cost in other developing countries.