Protecting Psychedelic Innovation: IP, Patents and Defensibility

Speaker 1:
Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Ritu Baral:
Hi, everyone. I am TD Cowen Senior Analyst, Ritu Baral, with the biotech team, and welcome to Preparing for the Trip, episode four, Protecting Psychedelic Innovation, IP, Patents, and Defensibility. With us today is our guest speaker, Linnea Cipriano. She is a partner in Goodwin's intellectual property and litigation practice, specializing in patent litigation in federal courts, and the USPTO and Appeal Board. Linnea's federal court practice focuses on clients in the life sciences industry. So hi, Linnea. Welcome, and thank you so much for joining us on this episode of the podcast series, Preparing for the Trip. So we're excited to have you with us today to discuss one of the most important, and often misunderstood, and frankly complicated topics in psychedelic drug development, which is intellectual property.
Given that many classic psychedelics are decades old compounds occurring naturally, and therefore with IP limitations around that, we'd love to unpack the challenges of patenting these therapies. What types of claims are the most defensible and can be made, and how companies can build protection around formulations, method of use, delivery, and second gen compounds, and best protect those first gen naturally occurring compounds that can't get composition of matter, or investors assume they can't get any sort of composition of matter. So Linnea, maybe stepping back, why is IP protection especially challenging in psychedelics compared to traditional drug development?
Linnea Cipriano:
Absolutely. Happy to be here, and thanks for inviting me. It's a tall order to unpack everything, all the complications here, but really, the complications in this field stem from, like you're saying, the fact that these compounds are decades old, and have been studied, and have high interest in both the scientific field and the medical field for a long time. And if we contrast that with normal drug development, normal typical drug development starts with a brand new compound that's synthesized from scratch, or pulled out of a library that hasn't been published, and the full scope of IP protections are available because there's no, what we call prior art. There's nothing published in the field, or used in the field for that particular compound, and the world is their oyster. They can develop claims around the product that they're trying to develop. Here, the compounds were either isolated from naturally occurring substances in the '50s and '60s, or synthesized even earlier, and really, that causes a problem in IP protection.
Ritu Baral:
How much of that challenge stems from the fact that the classic psychedelics are naturally occurring? So beyond that prior art with, I guess, historical use, or is there any special aspect to something being naturally occurring that is independent of the prior art argument that you just made?
Linnea Cipriano:
The patent law prevents claims from issuing that are directed to naturally occurring substances. So you can't just isolate something from nature and patent it. It's only an issue for psilocybin, isolated from mushrooms, and long known to be in naturally occurring substance that has been administered. LSD, MDMA, those were all synthesized compounds, so we don't fall into the troubles... Or we don't have the troubles with the naturally occurring substances with a lot of the other psychedelic drugs that are being discussed.
Ritu Baral:
Does that also apply for 5-MeO-DMT? Is that identical to... Or non-identical rather to the naturally occurring frog, toad venom as psilocybin?
Linnea Cipriano:
That's going to be in the same boat as psilocybin. So if you can find it in nature, it's typically not patentable. There are some caveats to that as with most things with law, the answer is usually it depends. Potentially a claim directed to an isolated form of a particular compound or something that doesn't actually occur in nature could be patented, but I'll put a big asterisk on that. More than likely, the fact that these are so old is going to be a bigger problem than the naturally occurring aspects of these compounds.
Ritu Baral:
Understood. So given that backdrop, what have you seen that could be the strongest forms of patent protection for these first gens? You talked about that very specific non-naturally occurring form. Is that like a polymorph, or crystalline form, or what strategies have you seen for those first gen, before we get into challenging those claims?
Linnea Cipriano:
The patent playbook in the pharmaceutical industry is very well-developed and very sophisticated. The gold standard for any pharmaceutical is going to be a compound patent, which in these cases, for the first generation, the classic psychedelics are likely not available. Beyond that, we're going to look at, like you said, polymorphs or crystalline forms, salts. Now, all of these come with caveat that it's going to be dependent on what's been published, what's already out there, what's the natural crystalline form, if there is one, if there's a natural... If you isolate it, and it's always in this form, that's probably not protected. So again, that's my asterisks with all of these things, but polymorphs and salts can be protected. Formulation, so take formulation patents, taking a drug and making it into an administerable dose. Most people don't just administer powder or purified compounds, it's going to be packaged in a tablet, in a capsule, in a liquid, injectable.
Ritu Baral:
Inhalable, or intranasal in the case of 5-MeO-DMT. So those are patentable formulations for aspiration, or intranasal?
Linnea Cipriano:
Potentially. Yes. And even something like that, not only is it going to be the formulation that is potentially patentable, but also the combination and the device that is used to administer. A lot of the inhalers have patents associated with them, and the specific combination of the drug in a particular inhaler, that's going to be potentially claims that can be filed and obtained if the priority is right.
Ritu Baral:
If I asked you to rank order polymorph formulation, and use patents in order of strength, like those strategies, what order would you put them in?
Linnea Cipriano:
I'm going to give you a typical lawyer answer and say it depends. If we think about it as outside of your protectability and enforceability, I think a formulation patent probably can hit the balance of enforceability and obtainability better than the other two. I think that polymorph patents and crystalline form patents typically are obtainable. You can usually get a polymorph patent issued in most circumstances if it's based on stability, or isolation, or some sort of novelty that's in that polymorph. The problem is they're easy to design around, that if a potential competitor, potential generic could create a version of the compound that is not exactly that polymorph, and still meet the stability and other qualifications of the drug, polymorph patents are generally easy to design around.
Ritu Baral:
And then use patents, and use claims, which leads me to my next question, how do developers see, and how do you see the potential strengths of use claims maybe specifically around, say, specific indications, because you do have developers going into a wide variety of indications? There's treatment resistant depression versus major depressive disorder, which is the earlier line, possibly less severe... Sometimes less severe, sometimes not, but less severe version of depression. Then you have generalized anxiety disorder, which is different but related. You have PTSD, which is somewhat separate, eating disorders, many, many indications. So how do use patents fall into strength, and... What's the word? Workaroundability, there's a real word for it. You know what I mean?
Linnea Cipriano:
Yeah, design around.
Ritu Baral:
Yeah. Design around. There you go.
Linnea Cipriano:
Yeah. And carve-outs are also critical. That's a term that we'll throw around here. So let me step back and try to break it down in smaller chunks. So method of use patents are very, very common, widely used in the pharmaceutical industry. The strongest method of use patents are going to match pretty much word for word what's in the indication on the label of the drug. That's critical, because if you think about it, a pharmaceutical company doesn't actually use a drug. So infringement, the actual infringement happens by the doctors and by the patients. As everybody knows, these litigations and these fights are not had between pharmaceutical companies and individuals, or prescribing doctors. The infringement that we go after for the manufacturer is called inducing infringement. So pharmaceutical company is telling doctors how to use their product, and that use is infringing. So as long as the indication, how the pharmaceutical company is telling doctors to prescribe the medication matches a claim in a patent, that leads to a fairly 1:1 straightforward infringement case of-
Ritu Baral:
And the telling how to use is the language in the label, is that correct?
Linnea Cipriano:
Yes, the indication. The indication is the instruction how to use, and that's how courts have seen it. And if there's an instruction in a label, an indication in a label that matches a claim, that's a straightforward infringement allegation. I'm going to put two caveats to this. One, because these, particularly the classic psychedelics, have been studied, and people have been curious about these drugs for a very long time, there's a lot of literature that speculates how these-
Ritu Baral:
Across all the indications I mentioned, and then some. Yeah.
Linnea Cipriano:
Yes. So that is going to be difficult prior art to overcome, but I'm sure there's space for patents to issue, and I'm sure there's a way to get around that prior art with precisely designed claims, and precisely worded indications that allow some protection there. The other thing is that a lot of these drugs... I mean, this is a little bit of speculation now, but I'm assuming that these are going to come out with many indications. So if a drug has, we'll say five indications, it can be used for all of the different types of depression that you were listing. Part of the statute for generic competition allows for generic drugs to be put on the market with a limited set of indications, and it's called a carve-out label, or a skinny label. That's a term that's been thrown around a lot lately. And those skinny labels can avoid infringement if the indication they choose to put on the generic label is one that is not patented.
Ritu Baral:
Okay.
Linnea Cipriano:
If there are five indications, and three are patented, and have claims that match the indication, but two are broader, maybe it's general anxiety or something that you can't get a claim to because of the prior art, a generic can come in potentially with only those limited indications, and get a product on the market without infringing the method of treatment patents. So that's why I put them a little bit lower on the list, just because it might be difficult to get patent claims that cover all indications of any particular drug.
Ritu Baral:
Understood. So going back to getting around the prior art for some of those use, what are the strategies that developers have used to get around that sort of prior art? Is it patient selection? Can it be disease severity? Are there favorite strategies for enabling in the practical day-to-day use, or enabling a use patent, essentially, that has some prior art?
Linnea Cipriano:
You identified the key aspects, patient selection, so administering particular doses to particular types of patients, potentially patients who have been resistant to other treatments, patients that are of a certain age, or have certain comorbidities. Any way to make your method claims more specific is going to be a way to get a patent. Now, the flip side of that is, the narrower you make it, the more difficult it is to show infringement. But again, that's really critical on what's on the label, and what the FDA approve.
Ritu Baral:
Speaking of the label, one of the things that we're expecting obviously around... Maybe not so obviously, is a pretty tight REMS, the risk management plan around these, which I believe is specified by the label. As we think of medicines that have incredibly strict REMS, does that also feed into the use language to build a stronger wall, higher wall? How should we be thinking about that?
Linnea Cipriano:
Potentially. I think all of these pharmaceuticals companies have learned from what's happened with the traditional drug development, and one of the methods that companies have used to both protect IP, but also create a regulatory exclusivity, and I think you're addressing that with other... But that certainly comes into my practice a lot, is to focus on the FDA requirements, and the testing that must be done, or the analysis that must be done according to the label, and crafting patent claims around that. So the analysis that must be done for the risk management and things like that.
Ritu Baral:
So they could ostensibly develop a risk management plan, or infrastructure patent that, have the FDA buy-in, put that on the label, and then essentially what's described in the label has already previously been patented? Is that a strategy, potential strategy?
Linnea Cipriano:
Yeah, it's certainly a potential strategy, depending on what is required by the label. I think you have to be careful about infringement. Infringement has to be done by a single entity. And if we have a situation where the doctor is doing some of it, and the hospital's doing some of it, there may be a split infringement issue. So I think creative people can certainly come up with claims that can be enforceable. It takes some creativity.
Ritu Baral:
Got it. Okay. That's an important point. So for companies developing classic psychedelics, how would you put this all together? What do you think are the most realistic ways to build an IP moat? It sounds like everybody will need layers, how would you do it on a theoretical level between formulation, polymorph, crystalline, in an ideal world where whatever you wanted to do, the science enabled you to do?
Linnea Cipriano:
Yeah. So I think you're absolutely right. The layers are critical. As I said, the gold standard is going to be a compound claim. So if you have a derivative, a prodrug, an analog, anything that hasn't been studied and published on is going to be super valuable here. It's going to be able to be set apart from the classic molecules. That said, I think the flip side to that is unfortunately, these new drugs are going to take a lot of clinical study. I think the FDA is going to take a very, very close eye on the safety, and the risks associated with all of these types of drugs. So apart from the new chemical entity, and compound claims that would be available, the important part is going to be getting the strongest claims you can, and as many of them as you can. So I think what we've seen, it's very rare these days to have any pharmaceutical company come out with a drug that only has one or two patents that protect it.
Ritu Baral:
And it would be those Orange Book patents that we would... That's the question to ask, which of these patents are listed on the Orange Book, and that is how investors would approach assessing that?
Linnea Cipriano:
Yeah. So the Orange Book patents are going to be those that actually protect the drug product. So that's going to be the formulation patents, polymorphs, method of use, compound pounds, if they exist, those sorts of things. I think that the advice to any pharmaceutical company is going to be to obtain as many of those as you can, and that you can defensively list. Now layered in that is going to be potentially patents on the devices that are used.
Ritu Baral:
Within the Orange Book patents?
Linnea Cipriano:
Now, some of those can be listed in the Orange Book, and some of those can't. That's a recent decision that came out. So purely device claims typically can't be listed in the Orange Book. Now again, it depends. It doesn't mean they can't be patented. It doesn't mean they can't be asserted. It's just not in the Orange Book, and wouldn't trigger a 30-month stay, and the exclusivity for the litigation. But also in that bucket is going to be manufacturing patents. Again, those process and manufacturing patents could still be valuable. They can be asserted in litigation, and can potentially extend exclusivity in the patent sense, that you have claims that extend further into later expiry, but they aren't going to be able to be listed in the Orange Book for the most part.
If you have an orange book patent, you bring a suit on the Orange Book patents, that does trigger the... If you follow the statute, it would trigger the 30-month stay. You can also assert additional patents in that litigation related to the drug. If you're only asserting manufacturing patents, then you probably wouldn't be able to get the benefit of the 30-month stay in the Hatch-Waxman statute.
Ritu Baral:
Understood. Going back to use patents for a second. So one of the unique aspects of psychedelic therapies is that for some compounds... I think the field is sort of moving away from this, but still, for some of the early stage compounds, there's a certain amount of, again, monitoring, safety monitoring that will be heavily regulated and required, and that's part of the REMS, but not the only part of the REMS. And then this idea of psychological support, in the sense that physicians want to prepare patients for, especially psychedelic-naive patients, about what's going to happen so it doesn't spike the very anxiety they're trying to treat, or the mood they're trying to treat. And oftentimes, we hear repeatedly that clinicians and developers want this consolidation session afterwards, where in this period of induced neuroplasticity, that patients can come back and talk about their experience. It's also partially safety, to make sure everything's okay with the patient.
But as you think about that pre-session, and the post-session, and potentially that monitoring in the session, all still part of the REMS, do we have precedent for very specific protocols that could help strengthen IP in that? Or do you think that that's more too standardized, and too at the physician's discretion to be part of the moat?
Linnea Cipriano:
There's a lot of layers there. I think that absolutely, that is one potential way to craft claims that would cover these specific methods of treatment, that could be differentiated from the prior art, potentially. Couple of caveats again. So the one thing that you're going to run into when thinking about the assessment of those patients is eligibility, patent eligibility, 101 issues. You can't patent the process that happens in a physician's brain. So the checklist that a physician would go through to assess a patient, or the questions they would ask and things like that, that is not in itself typically patent eligible. Now, the combination of assessing something... Making a patient assessment, dosing them with a particular dosing regimen, and then following up, that's certainly a claim that I would think would be obtainable subject to the prior art. I think the question is going to be how mandatory all of those steps are. The more the label requires all of these steps to happen, the more likely it is that these claims are going to be enforceable.
Ritu Baral:
Understood.
Linnea Cipriano:
Because if a doctor has the option of doing a pre-visit, has the option of doing a post-visit, proving that there are a set of patients that get all of the steps of the method may prove difficult in an infringement setting.
Ritu Baral:
Got it. Does DEA scheduling factor into this? I mean, is more strict scheduling likely to add to the patentability of... Or the strength of the moat, so to speak, or does it not make a difference?
Linnea Cipriano:
So I think in reality, it will create a bigger sense of exclusivity, but not on an IP basis. These contracts are going to be harder to obtain, there are fewer competitors that can manufacture, that can handle the drugs, that can distribute them. I think that is going to be a bigger issue, and a bigger player in the exclusivity.
Ritu Baral:
It'll contribute to real world exclusivity-
Linnea Cipriano:
Yeah, exactly.
Ritu Baral:
... rather than de jourre exclusivity? Got it. And then as we think about second gen, second gen psychedelics from an IP perspective, obviously composition of matter is probably on the table at this point, but as we think about second gens that don't have a completely novel backbone, in other words, analogs, deuterated compounds, prodrugs, are there things that investors should watch to make sure that the argued strength of the composition of matter is truly as strong as a novel, novel backbone?
Linnea Cipriano:
Yeah. I think that's a great question, and certainly something that's going to be very interesting as we see these cases come up. The first thing that comes to mind for the strength of a patent is going to be, what's the specificity of the disclosure? There's been a lot of case law recently about the written description that is contained in a patent. I'm going to geek out for a moment on a patent, but the patent specification is the jargon that happens that describes the invention before you get to the actual claims. And a lot of times that specification is filed very early in the process. We can see particularly with composition of matter patents, compound patents, they describe very broad genuses. That's probably not the right word.
Ritu Baral:
I got you.
Linnea Cipriano:
Very broad scope of compounds, and potential compounds that would fall under a generic structure. Courts right now are not looking favorably on picking and choosing specific compounds that are broadly... If you disclose 10,000, 100,000 compounds potentially in your specification, and then you pick one later in a very specific structure claim, that's going to be criticized. You really have to do more with your specification under the current federal circuit law than just disclose very, very broad aspects of compounds. So that is one thing that developers need to be aware of, just to make sure that your written description matches the specificity of your claims.
The second point, I think, is historically, obviousness claims, or obviousness arguments haven't been successful for compound claims. There's only been a handful of cases that have really pushed this issue. I believe there's still only one case that has found a structure, a chemical structure obvious, but I think this particular field may be a very fertile ground for those arguments, because the structure activity, the amount of research that has gone into why these compounds act the way they do is so extensive, and it's been around for decades, that potentially, because we know so much about how these compounds, bind receptors impact the brain, minor modifications on the structure may be susceptible to obvious disarguments if the backbone, as you said, is very close to the existing classic psychedelics. So those are the two areas where I think could be interesting. I think there's still going to be very difficult invalidity challenges there, because compound claims are historically difficult to overcome.
Ritu Baral:
That's very helpful. That's actually pretty helpful, I think, broadly as we think about prodrugs and pharmaceuticals. So if I asked you to take the investor side, or the VC side in this case, or in any case, what are maybe the top three IP questions you would ask a developer that came to an investor, or VC asking for funding? What are the three first diligence questions?
Linnea Cipriano:
I think expected loss of exclusivity is on top of everyone's mind. And I think the way that we often look at this is not purely, "When does your last patent expire?" It's going to be, "When does your strongest patent expire?" Then, "What's next? When does the next family expire?" And then, "Where is your negotiation point in those reach patents that are your latest to expire?" I mean, if you're an ideal situation, they're all ironclad, and you can think about your patent landscape as a fortress, that's typically not how it is in reality, that the later filed claims are really stretches, and building up your power to negotiating your settlement leverage when it comes to a loss of exclusivity, realistic loss. That's kind of my assessment of where the patents really stand.
And then, I think critical to that is going to be patent term extensions, and patent term adjustments. So the extra time on patent exclusivity you get from regulatory... The time spent in regulatory filing, and then also the time spent at the patent office. So those two things are very critical when you look at expiration. That's a lot of questions bundled into one category. I think the other issue that I would think about is what it took to get those patents, and how narrow the claims are. Is a design around-
Ritu Baral:
The narrower, the better?
Linnea Cipriano:
The broader, the better typically in enforcement. Broader is harder in validity, but better for enforcement. They usually are two sides of the same coin. But striking a balance between, you need enforceable claims that will withstand challenge. So if they're easy to design around, they may not be enforceable. If you had to overcome significant prior art and narrow your claims during prosecution of the patents, that is certainly not... I wouldn't go as far as say it's a red flag, but it's something to consider in the enforceability and the narrowness of the claims, and the indications that are on the label can... Is a scheming label situation going to cut short your exclusivity?
Ritu Baral:
Linnea, this has been incredibly helpful. I think that IP has never been a huge strength in the average investor's diligence process in these sorts of naturally occurring, or even second gen compounds. So we really appreciate your insight, and thanks, everyone, for joining us.
Linnea Cipriano:
Yeah, thanks for having me.
Speaker 1:
Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.