GUNVALSON et al v. PTC THERAPEUTICS, INC.

Filing 23

LETTER OPINION (Preliminary Injunction). Signed by Judge William J. Martini on 8/21/08. (gh, )

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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
M A R T I N LU T H E R KIN G JR . FED E R A L BLD G . & U . S . C O U R T H O U S E 5 0 W A L N U T ST R E E T , P.O . BO X 419 N E W A R K , N J 07101-0419

[phone]

WILLIAM J. MARTINI JUDGE

LETTER OPINION

A u g u s t 21, 2008

M a rc E. Wolin S aib e r LLC O n e Gateway Center 1 3 th Floor N e w a rk , NJ 07102-5311 Jak o b Benjamin Halpern S aib e r LLC O n e Gateway Center 1 3 th Floor N e w a rk , NJ 07102-5311 (C o u n se l for Plaintiffs) K e n n e th R. Meyer P o rz io , Bromberg & Newman, PC 1 0 0 Southgate Parkway P O Box 1997 M o rris to w n , NJ 07962-1997 (C o u n s e l for Defendant)

RE:

G u n v a l s o n v. PTC Therapeutics, Inc. C iv . No. 08-3559 (WJM)

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D e a r Counsel: P la in tif f s, a terminally ill boy named Jacob Gunvalson and his parents, file a M O T I O N FOR A PRELIMINARY INJUNCTION requiring Defendant, a p h arm ac eu tica l company named PTC, to provide Jacob with access to one of PTC's F D A -u n a p p ro v e d drugs, PTC124. Plaintiffs argue that PTC is obligated to provide Jacob th e drug because PTC promised Jacob access to it, causing him to forgo opportunities to re c e iv e the drug in clinical trials. Plaintiffs also argue that FDA regulations allow PTC to p ro v id e Jacob with PTC124 even though the FDA has not approved it for general use. The Court finds that these arguments have a reasonable likelihood of success on the m e rits, which favors preliminary relief. The Court also finds that a balancing of interests a n d hardships, those of both the public and the parties, also favors preliminary relief. Accordingly, Plaintiffs' motion for a preliminary injunction is GRANTED. I. F A C T S AND PROCEEDINGS

T h e parties have declined the Court's invitation to request an evidentiary hearing, s o the Court decides this matter on the written submissions. P la in tif f s are Jacob Gunvalson, a teenaged boy with Duchenne Muscular D ystro p h y ("DMD"), and his parents. DMD causes muscles, including the heart, to d e g e n e ra te, and its sufferers usually die by age twenty-five. There is no currently a v a ilab le medication for DMD that provides any meaningful treatment. D e f en d a n t PTC, a drug company, is the creator of a drug called PTC124. PTC124 sh o w s promise as a treatment for DMD. PTC124 is currently in a Phase 2 clinical trial. T h e dispute in this case is whether PTC induced Jacob to forgo entering a clinical tria l by promising him eventual access to PTC124. In early 2006, PTC was to begin a " P h a se 2a" clinical trial for PTC124. The trial was to last twenty-eight days, during w h ic h time PTC would provide its participants with PTC124.1 At this time, Jacob was ta k in g Gentamicin, another DMD medication. Jacob's mother, Cherie Gunvalson, asked P T C whether Jacob should enroll in the clinical tests. Enrollment would have required J a c o b to stop taking Gentamicin and to obtain a muscle biopsy. According to Plaintiffs, P T C -- m o st notably its Vice President Claudia Hirawat--told Plaintiffs that Jacob should

PTC actually conducted two twenty-eight day Phase 2a trials, the second being n e c es s a ry to give subjects a more appropriate dosage of PTC124, but the distinction b e t w e e n these two trials does not bear on the Court's analysis. 2

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c o n tin u e taking Gentamicin, which appeared to have some beneficial effect, and wait for la te r PTC124 clinical trials. According to Plaintiffs, PTC assured Plaintiffs that Jacob w o u ld be able to receive PTC124 at a later date. PTC disputes that it made such sta tem e n ts, as discussed below. PTC also disputes that Jacob would have been eligible f o r these initial clinical trials, also as discussed below. Jacob thus remained on his m e d i c a tio n and did not enter the clinical trials. T h e trial was a success, and PTC initiated efforts to conduct an expanded Phase 2a trial. This trial was to last two years, again during which PTC would provide its p a rtic ip a n ts with PTC124. Jacob, whose condition had severely deteriorated by this point, requested to p a rtic ip a te in the clinical trials. However, these trials were limited to participants in the in itia l Phase 2a trial, so Jacob could not participate.2 J a c o b , growing desperate, sought to convince PTC to provide him PTC124 th ro u g h an FDA-regulated "compassionate use" exception to the normal rule that drug c o m p a n ie s may not distribute FDA-unapproved drugs. PTC refused. P la in tif f s then filed this suit against PTC. Plaintiffs generally allege that PTC in d u c e d Jacob to forgo his opportunity to participate in the Phase 2a trials with its false p ro m is e s of PTC124. Plaintiffs sue for promissory estoppel, fraudulent m is re p re se n ta tio n , and negligent misrepresentation. P lain tiff s now seek a preliminary injunction requiring PTC to provide Jacob with PT C 124. III. D IS C U S S IO N

T h e Court must consider four factors before granting a preliminary injunction: (1) the moving party's likelihood of ultimate success on the merits, (2) the irreparable harm to the moving party absent the injunction, (3) the hardship to the non-moving party an in ju n c tio n would cause, and (4) the public interest. See, e.g., Bennington Foods LLC v. S t. Croix Renaissance, Group, LLP, 528 F.3d 176, 179 (3d Cir. 2008). Here, these f a cto rs all favor granting the preliminary injunction.

PTC also at this time began a Phase 2b clinical trial, but it is undisputed that Jacob w a s not eligible for this trial. The trial required its participants to be ambulatory, and J a c o b was not by the time the trial started. 3

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A.

T h e Merit of the Plaintiffs' Claims

A s just mentioned, the Court will issue a preliminary injunction only if it is r e a so n a b l y likely that Plaintiffs will ultimately prevail on the merits. Id. Plaintiffs, h o w e v e r, need not show anything approaching a certainty of success. Highmark, Inc. v. U P M C Health Plan, Inc., 276 F.3d 160, 173 (3d Cir. 2001) ("Morever, on an application f o r preliminary injunction, the plaintiff need only prove a prima facie case, not a certainty th a t he or she will win."). Analysis of Plaintiffs' claims is in two parts.3 First, Plaintiffs must show that P T C 1 2 4 comports with the requirements of the FDA's "compassionate use" exception, w h ic h allows drug companies to provide experimental drugs to sick persons. Second, P la in tif f s must show that PTC had some legal obligation to provide Jacob with PTC124. 1. P T C 1 2 4 Satisfies the "Compassionate Use" Requirements

A lth o u g h the FDA generally prohibits drug companies from distributing FDAu n a p p ro v e d drugs, FDA regulations provide for a "compassionate use" exception. Under th is exception, the FDA will allow a drug company to distribute an FDA-unapproved d ru g if four conditions are met: (1) the drug is for a serious or life-threatening disease, (2) th e re is no good alternative, (3) the drug is currently under investigation in a clinical trial, a n d (4) the sponsor is actively pursuing marketing approval. 21 C.F.R. § 312.34. Also, e v e n if the drug meets these criteria, the FDA may still deny the compassionate use if th e re is insufficient evidence of the drug's safety. Id. H e re , PTC124 meets all of these requirements. It clearly and undisputedly meets th e first four conditions: (1) PTC124 is for a serious or life-threatening disease, DMD, (2) th e re is no good alternative to PTC124 for DMD, (3) PTC124 is currently in the midst of P T C 's Phase 2 clinical trials, and (4) PTC is actively pursuing market approval. Also, all re p o rts from the clinical trials indicate that PTC is safe to use--and there is no evidence to the contrary. See Dahl, 7 F.3d at 1404 (holding that a drug satisfied the compassionate

The framework for this analysis comes from Dahl v. HEM Pharmaceuticals Corp., 7 F.3d 1399, 1401 (9th Cir. 1993). The facts of Dahl are quite similar to the facts here: th e plaintiffs there sought to compel a drug company to provide them with experimental d ru g s through a "compassionate use" exception claiming that the drug company had made a n enforceable promise to provide those drugs. Id. Also, the parties here appear to accept th e legal framework set forth in Dahl. Accordingly, the Court applies the Dahl f ra m e w o rk . 4

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u s e exception because studies showed it was generally safe, even if the FDA expressed c o n c ern to the contrary). Accordingly, PTC124 satisfies the requirements for c o m p a s s io n a te use. 2. It Is Reasonably Likely That PTC Has a Legal Obligation to P r o v id e PTC124 to Jacob

P T C 's contacts with Plaintiffs are reasonably likely to constitute an enforceable p ro m ise to provide Jacob with PTC124. Promises without consideration are enforceable if the promisee reasonably relied on them to his detriment. See, e.g., Lobiondo v. O 'C a lla g h a n , 815 A.2d 1013, 1020 (N.J. Super. Ct. App. Div. 2003) ("There are four e le m e n ts to the doctrine of promissory estoppel: 1) a clear and definite promise, 2) made w ith the expectation that the promisee will rely upon it, 3) reasonable reliance upon the p ro m is e , 4) which results in definite and substantial detriment."). Here, it is reasonably likely that PTC promised Plaintiffs to provide Jacob with P T C 1 2 4 , causing them to forgo enrolling him in the initial Phase 2a trials to their d e trim e n t, as Jacob is foreclosed from entering the current clinical trials as a result. Cherie Gunvalson's affidavit evidences many statements from PTC that are reasonably lik e ly to constitute parts of such a promise. For example, Cherie states that she asked P T C Vice President Claudia Hirawat if Jacob should be enrolled in the initial Phase 2a tria ls , and Hirawat responded that "it was not worth taking Jacob off of Gentamicin for o n ly a 28-day dosage of PTC124." (Aff. of Cherie Gunvalson ¶ 17.) Cherie also stated th a t she "asked Ms. Hirawat if there were any adverse effects on Jacob for not p a rtic ip a tin g in the trial, and she told me there were none." (Cherie Aff. ¶ 17.) In another e n c o u n ter shortly after, Hirawat told Cherie "that Jacob had no better or worse chance to b e treated in the future based on his non-enrollment in the Phase IIa trial." (Cherie Aff. ¶ 2 5 .) In yet another encounter shortly after, Hirawat "assured [Cherie] that Jacob would g e t access to PTC124."(Cheri Aff. ¶ 26.) Hirawat's affidavit confirms these assurances. For example, Hirawat states she told Cherie that "I informed Mrs. Gunvalson that Jacob's n o n -e n ro llm e n t in Phase 2a trials would not by itself preclude him from participating in a ll of PTC's anticipated future clinical trials, for PTC124, assuming he satisfied the e lig ib ility requirements for those trials." (Aff. of Claudia Hirawat ¶ 16.) Cherie alleges th a t other PTC officers made similar statements. For example, Cherie states that PTC C h ie f Medical Officer Dr. Langdon Miller told Cherie in July 2006 that "once positive resu lts were back from the [Phase 2a] trial, Jacob will get PTC124." (Cherie Aff. ¶ 24.) The Court finds it reasonably likely that Plaintiffs relied on these and other similar sta tem e n ts made by PTC in declining to enroll Jacob in the Phase 2a clinical trials. This f a ilu re to enroll Jacob worked to Plaintiffs' detriment, as Jacob is now not eligible for the e x te n d e d Phase 2a trials. In summary, the Court finds it reasonably likely that Plaintiffs 5

r e a so n a b l y relied to their detriment on PTC's promises to provide PTC124 to Jacob, so th e Court prevents PTC from denying Plaintiffs that promise. P T C argues that it never promised Jacob such access to PTC124 or advised him n o t to participate in the clinical trials. It highlights affidavits from its officers, including C la u d ia Hirawat and Dr. Miller, denying making such statements.4 According to these a f f id a v its , many communications between Plaintiffs and PTC's officers and employees su g g e ste d that PTC often may have stopped short of making any actual promises to p ro v id e PTC124 and instead may have only suggested that Plaintiffs decide on their own w h a t is best. The evidence is somewhat contradictory on this point. Nevertheless, the Court finds that there is a reasonable likelihood that PTC made a n enforceable promise to Plaintiffs to provide PTC124 to Jacob. As an initial matter, all c o m m u n ic a tio n s between PTC and Plaintiffs must be viewed in light of the unique re la tio n s h ip between Jacob's mother, Cherie, and PTC. Cherie worked at length to lobby f u n d s from Congress for DMD research. In this capacity, she had relationships with PTC e m p lo ye e s and officers that transcended the typical relationship that PTC had with p a re n ts of children with DMD. Of most relevance to this Court, Cherie appears to have h a d extensive communications on both a professional and social level with PTC Vice P r e sid e n t Claudia Hirawat. Indeed, it is undisputed that Cherie and Jacob have even s ta ye d overnight at Hirawat's home on at least one occasion. Because of these extended c o n n e c tio n s alone, it seems to the Court that PTC would be more likely to communicate to Plaintiffs more compassionately and less formally than with other parents of DMD c h ild re n . Upon examination of the content of these communications, the Court finds it re a so n a b ly likely that PTC promised to provide Jacob with PTC. Most persuasive to the C o u rt, as mentioned above, is the affidavit of Claudia Hirawat, in which Hirawat d e s c rib e s many statements to Cherie that appear tantamount to promises to treat Jacob.

Claudia Hirawat's affidavit is contradictory on this point. At points, Hirawat a p p e ars to have accurately conveyed to Plaintiffs the consequences of not enrolling Jacob in the Phase 2a trials. For example, Hirawat states she told Cherie Gunvalson that " p a rtic ip a n ts in the initial 2a trials would likely have a preference over others in terms of f u tu re studies." (Hirawat Aff. ¶ 16.) But at other points, Hirawat appears to have c o n tra d ic te d this statement, for example, when she told Cherie that "Jacob's none n ro llm e n t in Phase 2a trials would not by itself preclude him from participating in all of P T C 's anticipated future clinical trials for PTC124, assuming he satisfied the eligibility re q u ire m e n ts for those trials." (Hirawat Aff. ¶ 16.) 6

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F o r example, Hirawat states that "I informed Mrs. Gunvalson that Jacob's non-enrollment in Phase 2a trials would not by itself preclude him from participating in all of PTC's a n ticip a ted future clinical trials, for PTC124, assuming he satisfied the eligibility re q u ire m e n ts for those trials." This statement alone--but particularly when combined w ith PTC's other statements and conduct--is reasonably likely to constitute a promise th a t Jacob's non-enrollment in early Phase 2a trials would not preclude his participation in later trials. M o re generally, while Plaintiffs' and PTC's evidence might at first blush appear in c o n sis te n t, the Court finds that on deeper inspection they may not be. While PTC may n o t have intended to promise PTC124 to Plaintiffs, it appears to the Court that the totality o f the circumstances of PTC's speech and conduct objectively communicated something d i f f e re n t . Accordingly, the Court finds it reasonably likely that PTC did promise P la in tif f s to provide Jacob with PTC124, causing him to forgo participation in the initial P h a s e 2a trial, which ultimately prevented him from participating in the current expanded P h a s e 2a trial. PTC also argues that Plaintiffs suffered no detriment from any reliance on PTC's s ta te m e n ts since Jacob was not eligible to participate in the initial Phase 2a trial anyway. To evidence this, PTC points to the declaration of Dr. Richard Finkel, a principal in v e stig a to r in the Phase 2a clinical trial. In 2006, after the initial Phase 2a clinical trial h ad begun, Dr. Finkel examined Jacob's medical files and determined that Jacob didn't h a v e Duchenne Muscular Dystrophy, or "DMD," but rather had Becker Muscular D ys tro p h y, or "BMD." Dr. Finkel notes that this would have disqualified Jacob from p a rtic ip a tin g in the initial Phase 2a trial anyway.5 H o w e v e r, the evidence suggests that Jacob actually does have DMD, not BMD. This was the conclusion of Dr. Brenda Wong, another primary investigator in the PTC124 s tu d y. And Dr. Wong based her conclusion that Jacob has DMD on multiple physical e x a m in a tio n s of Jacob whereas Dr. Finkel based his contrary conclusion on a single e v a lu a tio n of Jacob's medical record. In light of Dr. Wong's superior opportunity to e x a m in e Jacob, the Court finds it reasonably likely that Jacob would have qualified for th e initial Phase 2a trial.

PTC also highlights emails from Cherie relaying Dr. Finkel's findings, but the C o u rt affords these emails no weight. Cherie is not a medical expert and has no firsthand k n o w le d g e of whether Jacob has DMD or BMD. 7

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In summary, the Court finds it reasonably likely that Plaintiffs will succeed at trial o n their promissory estoppel claim. The Court reiterates again that it does not find, nor n e e d it find, that Plaintiffs are certain to succeed. Rather, the Court finds it reasonably lik ely that PTC did make such a promise. Accordingly, this factor favors preliminary re lie f . I will now consider the remaining factors. B. T h e Remaining Factors in a Preliminary Injunction Analysis Favor P l a i n t i f fs

T h e remaining three factors in a preliminary injunction analysis all favor Plaintiffs. Without an injunction mandating that PTC give Jacob PTC124--the only treatment o ste n sib ly offering Jacob any hope for his fatal disease--he is likely to suffer irreparable h a rm . In contrast, PTC suffers little harm if forced to give Jacob PTC124. While PTC a rg u e s that providing Jacob PTC124 would require time-consuming and potentially e x p e n siv e applications to the FDA under the compassionate use exception, this burden is triv ia l compared to the potential harm to Jacob without the medication. Indeed, according to PTC, the process of applying to the FDA for a compassionate use exception takes only a period of weeks and appears to be largely a matter of preparing and filing a proper a p p lic a tio n . Finally, the public has an interest in the provision of possibly life-saving e x p e rim e n ta l drugs to terminally ill persons, as evidenced by the FDA's enactment of the c o m p a s s io n a te use exception. PTC argues unpersuasively that an injunction would harm it and the public by o p e n in g the floodgates to all DMD sufferers who might use litigation to obtain PTC124 w ith o u t participating in clinical trials. PTC reasons that the development of safe, e f f e c tiv e drugs requires clinical testing in which not all may participate or in which some p a rtic ip a n ts may receive placebos. This argument fails for two reasons. First, the FDA h a s provided and promoted a compassionate use exception, so clearly the FDA has d e te rm in e d that the public interest lies with providing unapproved drugs in situations such a s this one. Second, this is a unique case in that PTC appears to have promised this drug to Plaintiffs; an injunction here will not have implications beyond this case. T h e Court wishes to take a moment to focus on this final point and reiterate that P la in tif f s appear to be in a unique situation. Cherie's involvement with PTC was e x te n siv e and naturally blended between a professional and social relationship, p a rtic u la rly with Claudia Hirawat. The Court strongly doubts that many--if any--other p a re n ts of DMD children have this kind of relationship with PTC (or other drug c o m p a n ies ). While the Court believes PTC's claim that it normally takes care to refrain f ro m promising any parent access to PTC124 and that it attempted to do so in this case, th e Court also finds that Plaintiffs' unusually close relationship with PTC likely muddied 8

th is otherwise clear message. And as explained above, it is reasonably likely that P la in tif f s' reliance on this promise is the reason that Jacob is not currently enrolled in the e x p a n d ed clinical trial for PTC124. Thus, the Court's ruling today should not in any way s u g g e st that PTC has a general obligation to provide PTC124--or any experimental d ru g -- to sick persons. Indeed, the Court appreciates that sound scientific and medicinal p ra c tice s may disfavor a drug company doing so. Nevertheless, the Court finds it re a so n a b ly likely that PTC made a promise to Plaintiffs to provide Jacob with PTC124, a n d the Court preliminarily enjoins PTC from breaking that promise. III. C O N C L U SIO N

In conclusion, it appears reasonably likely that PTC is legally permitted and indeed o b lig a ted to attempt to provide Jacob with PTC124. Accordingly, the Court GRANTS P la in tif f s' motion for a preliminary injunction.6

s/ William J. Martini William J. Martini, U.S.D.J.

PTC has moved for a stay of this injunction pending its appeal. The Court denies th is motion. The standards for granting a stay of an injunction are quite similar to the s ta n d a rd s for granting the injunction itself, see Hilton v. Braunskill, 481 U.S. 770, 776 (1 9 8 7 ), which the Court has already discussed above. Here the same considerations that f a v o r granting Plaintiffs' motion for a preliminary injunction also disfavor granting a stay o f that injunction pending appeal. Most notably, the injunction does not impose a great b u rd e n upon PTC whereas without an injunction Plaintiffs are likely to suffer irreparable h a rm . 9

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