~~A~0oo9.P~ 03&q ~ GRACEWAY" PHARMACEUTICALS ,,LL30 r2.11. July 30 ; 2009

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1 ~ GRACEWAY" PHARMACEUTICALS ,,LL30 r2.11 July 30 ; 2009 Graceway Pharmaceuticals, LLC 222 Valley Creek Boulevard, Suite 300 Exlon, Pennsylvania Phone: Fax : Corporate Headquarters Bristol, Tennessee Commissioner of Food and Drugs Division of Dockets Management (HFA-305) Food and Drug Administration 5630 Fishers Lane, Room 1061 Rockville, Maryland CITIZEN PETITION Graceway Pharmaceuticals, LLC ("Graceway"), respectfully submits this citizen petition under 21 USC 355 and 21 CFR 10.30, among other provisions of law, to request that the Commissioner of Food and Drugs take the actions described below with respect to any abbreviated new drug application ("ANDA") that references Graceway's topical drug product, Aldara (imiquimod) Cream, 5%. Aldara, which has proven to be a safe and effective therapy for more than a decade, is a locally acting drug product approved to treat three distinct dermatological conditions : External genital and perianal warts/condyloma acuminata ("EGW'D in individuals 12 years old or older; clinically typical, nonhyperkeratotic, nonhypertrophic actinic keratoses ("AK") on the face or scalp ; and primary superficial basal cell carcinoma ("sbcc") located on the trunk (excluding anogenital skin), neck, or extremities (excluding the hands and feet). When an applicant seeks to submit an ANDA for a locally acting drug approved to treat such different conditions at different sites of action, the Food and Drag Administration ("FDA" or "the agency") must determine in which conditions and at what sites of action the applicant must conduct clinical bioequivalence studies. In response to a citizen petition concerning Efudex (fluorouracil (or "5-FU")) Cream, the agency identified the factors to be evaluated in making that determination and the logic underlying any such decision. The straightforward application of FDA's reasoning in the Efudex matter mandates that an ANDA for a generic version of Aldara contain data from a bioequivalence study in patients with EGW and a separate study in patients with sbcc. Additionally, consistent with principles enunciated during the course of the Efudex matter and the agency's longstanding practice, an ANDA for a generic version of Aldara must contain the results of pharmacokinetic ("PK") studies of the proposed product under "maximal use" conditions per the approved labeling. For imiquimod products, such PK data are a necessary part of demonstrating bioequivalence, because systemic exposure may affect the product's safety. The results of additional testing may also be needed, depending on whether and to what extent the generic product's formulation differs from that approved for Aldara. ~~A~0oo9.P~ 03&q

2 Re: Aldara0 (imiquimod) Cream, 5% Page 2 of 18 ACTIONS REQUESTED Graceway respectfully requests that FDA refuse to approve any ANDA for a generic imiquimod cream product that seeks to rely on FDA's prior approval of Aldara, unless the application contains data from : (1) a comparative clinical bioequivalence study in patients with EGW; (2) a similar bioequivalence study in patients with sbcc ; (3) a PK study, conducted under maximal use conditions per the approved labeling, in patients with EGW; and (4) a similar PK study in patients with AK. STATEMENT OF GROUNDS I. PRODUCTBACKGROUND Aldara was first approved under new drug application ("NDA") on February 27, The product is supplied in single use packets, each of which contains 250 mg of cream, including 12.5 mg (or 5%) of imiquimod. Aldara is currently approved for the treatment of three distinct conditions. Each of these conditions is associated with a unique treatment regimen, with specific dosing intervals, amounts of drug applied, and lengths of treatment, as follows. " The treatment of external genital and perianal warts/condyloma acuminata inpatients 12 years or older. In the treatment of EGW, Aldara is applied three times per week, until there is total clearance of the genital/perianal warts, or for a maximum of 16 weeks. The cream is applied prior to normal sleeping hours and left on for six to 10 hours, after which time it is removed by washing the area with mild soap and water.. The topical treatment of clinically typical, nonhyperkeratotic, nonhypertrophic actinic keratoses on theface or scalp in immunocompetent adults. In the treatment of AK, Aldara is applied twice weekly for a full 16 weeks to a defined treatment area on the face or scalp (but not both concurrently). The treatment area is defined as one contiguous area of approximately 25 cm2 (e.g., 5 cm by 5 cm) on the face (e.g., on the forehead or one cheek) or on the scalp. The cream is applied prior to normal sleeping hours and left on for approximately eight hours, after which time it is removed by washing the area with mild soap and water., " The topical treatment of biopsy-confirmed, primary superficial basal cell carcinoma in immunocompetent adults, with a maximum tumor diameter of 2.0 cm, located on the trunk (excluding anogenital skin), neck, or extremities (excluding the hands andfeet), only when surgical methods are medically less appropriate and patientfollow-up can be reasonably assured In the treatment of sbcc, Aldara is applied five times per week for a full six weeks to a biopsy-confirmed sbcc. The treatment area is defined to include a 1 em margin of skin around the

3 Re : Aldara (imiquimod) Cream, 5% Page 3 of 18 tumor. The cream is applied prior to normal sleeping hours and left on for approximately eight hours, after which time it is removed by washing the area with mild soap and water. See Aldara Approved Labeling. II. STATUTORY/REGULATORY STANDARDS A. Demonstrating Bioeauivalence in Locally Acting Drugs To be approved under the Food, Drug, and Cosmetic Act ("FDCA"), a proposed generic drug must be shown to be bioequivalent to the reference listed drug ("RLD"). See 21 USC 355(j)(4)(F) ; 21 CFR (a)(6). A generic drug is considered bioequivalent to the RLD if "the rate and extent of absorption of the [generic] drug do not show a significant difference from the rate and extent of absorption of the [reference] drug when administered at the same molar dose of the therapeutic ingredient under similar experimental conditions in either a single dose or multiple doses[.]" 21 USC 355(j)(8)(B)(i). For a drug product that is intended to deliver the active moiety to the bloodstream for systemic distribution within the body, those parameters can be measured directly in the bloodstreams of healthy human subjects. See 21 CFR (b)(1)(i). However, such measurements are not appropriate for drug products intended to deliver the active moiety locally, such as topical preparations for the skin. For such products, FDA has long relied on comparative clinical studies to demonstrate bioequivalence. See id at (b)(4) (describing comparative clinical bioequivalence studies and noting their appropriateness for "dosage forms intended to deliver the active moiety locally, e.g., topical preparations for the skin"); see also Citizen Petition Response, Docket No. 2004P-0557 (Apr. 11, 2008) ("Efudex Petition Response") at 5-6. This is consistent with FDA's authority to rely on alternate approaches to establish bioequivalence, if they are "scientifically valid" and able "to detect a significant difference between the [generic] drug and the [reference] drug in safety and therapeutic effect." 21 USC 355(j)(8)(C) ; see 21 CFR (a) (requiring use of "the most accurate, sensitive, and reproducible approach available").' B. Comparative Clinical Studies in Drugs with Multiple Indications When an applicant seeks to submit an ANDA for a locally acting drug approved to treat multiple conditions, the agency must determine in how many of those conditions and at how many sites of action the generic product must be shown to be bioequivalent to the RLD. FDA must decide, in the words of the statute, what study or studies would constitute scientifically valid methods that would "detect a significant difference between the [generic] drug and the [reference] drug in safety and therapeutic effect" 21 USC 355(j)(8)(C). In this context, FDA 1 In addition, although a comparative clinical trial based solely on evaluation of clinical endpoints may be sufficient to assess local bioequivalence, such a study would not necessarily detect potentially important differences in systemic exposure, which might be due to any number of factors, including different inactive ingredients, amounts of ingredients, or manufacturing conditions.

4 Re : Aldara (imiquimod) Cream, 5% Page 4 of 18 has allowed a comparative clinical study in one indication to suffice as proof of bioequivalence in another, but only in the following circumstances: " The indications must be "related" and involve the "same site of action." Citizen Petition Response, Docket 95P-0379 (May 22, 2002) ("Wesrwood Squibb Petition Response") at 4 (`If the generic drug product is shown to be bioequivalent for one indication, it is expected to be bioequivalent for ail related indications with the same site of action."). " There must be "reasonable scientific information to establish that there is no significant difference in the availability of the active ingredient or moiety at the site or sites of activity" in each condition. Memorandum from D. Throckmorton, Deputy Director of the Center for Drug Evaluation and Research ("CDER") to J. Woodcock, Director of CDER (May 30, 2008) ("CDER Deputy Director Memorandum") at 3 (attached at Tab A). " If the first two criteria are met, the comparative study must be conducted in the condition that is "most sensitive in discriminating formulation differences," which is "often, but not necessarily, the most difficult-totreat condition." Efudex Petition Response at 10. A recently-published article by several FDA experts in this area sums up the agency's policy and precedent: For a drug with more than one indication, if there is reasonable scientific evidence that the site of action is the same, or that delivery of the drugs at the same rate and extent to one site of action will predict delivery at the same rate and extent to the other site(s) of action, then only one study is needed, using the indication that will provide the greatest sensitivity to detect product differences. Topical antifungal drugs, for example, have a number of different specific indications for different fungal infections, based on clinical safety and efficacy studies of each labeled indication. For a generic topical antifungal, a single clinical end point study is required in the indication (usually tinea pedis) that will be the most sensitive for detecting differences in delivery of the active ingredient to the site of action. Once [bioequivalence] is established in that study, the product is considered to be bioequivalent for all related indications. Peters JR, et al., Generic Drugs - Safe, Effective, and Affordable, 22 Dermatologic Therapy 2009 : at 234 (emphases added) ("Peters, Generic Drugs ") (attached at Tab B). In responding to the citizen petition regarding proposed generic versions of Efudex Cream, a locally acting topical product approved to treat certain forms of AK and sbcc the agency concluded that those two conditions are related and occur at the same site of action. See Efudex Petition Response at 7. FDA also identified the factors to be considered in determining which condition is the more sensitive and therefore should be the subject of a comparative

5 Re : Aldara (imiquimod) Cream, 5% Page 5 of 18 clinical trial, if a trial in one condition is to be extrapolated to demonstrate bioequivalence in another : Id at 10. The ideal clinical endpoint bioequivalence study should be conducted in the indication which will be the most sensitive in discriminating formulation differences. The optimal indication is generally one with the least variability in the disease state and expected course of disease and for which the recommended duration of treatment is the same for all patients. This is often, but not necessarily, the most difficult-to-treat condition. Furthermore, the shortest duration of treatment for which a significant treatment effect is expected is likely to be the most discriminatory, since extending the duration of therapy may result in a higher probability of success for all study groups and less ability to differentiate between products. The agency ultimately concluded that the type of AK treated by Efudex is a more sensitive condition in which to conduct a bioequivalence study than the type of sbcc treated by the drug, and therefore a comparative clinical trial in AK could be relied on to demonstrate bioequivalence in sbcc. See id. FDA recognized that its decision as to Efudex was "based on the specific characteristics of [that] topical product and the indications at issue. Factors involved in the assessment of other topical products may warrant a different result." Id, at 9 n. 31. That is the case here. As discussed below, the facts surrounding Aldara are materially different, such that consideration of the factors FDA identified as relevant to these decisions leads to a different outcome with regard to Aldara. C. Establishing Product Safety and Efficacy It is well recognized that inactive ingredients, especially those affecting absorption, can have an effect on the safety and effectiveness of topical drug products.2 That is why a proposed generic version of a topical product generally must contain not only the same active ingredient as the RLD (a requirement of all generic drugs), but also the same inactive ingredients as the reference product. If there are any formulation differences, the generic applicant has the burden of characterizing those differences and demonstrating that they do not affect the safety or efficacy of the proposed product. See 21 CFR (a)(9)(v).' 'See Citizen Petition Response, Docket No. FDA-2004-P-0215 (Mar. 25, 2009) at 22 n. 73 ("The Agency acknowledges that differences in formulation can affect drug delivery to the site of action."), 24 ("The Agency agrees... that changes in an inactive vehicle for a topical drug product can affect potency and bioavailability and, therefore, could affect the generic product's safety and effectiveness."); see also Peters, Generic Drugs at 234 (giving examples of proposed generic topical products that required PK studies and explaining that, for some locally acting products, "systemic exposure may impact the safety or effectiveness of the product"). ' This would include inactive ingredients that are not fully qualified by existing safety data with respect to the amount of the ingredient used, duration of exposure, or route of administration. See Guidance for Industry : Nonclinical Studies for the Safety Evaluation of Pharmaceutical Excipients (May 2005) at 1. In

6 Re : Aldara (imiquimod) Cream, 5% Page 6 of 18 The agency must refuse to approve an ANDA for a topical drug product if "the composition of the drug is unsafe under [the proposed conditions of use] because of the type or quantity of inactive ingredients included or the manner in which the inactive ingredients are included." 21 USC 355(j)(4)(H); 21 CFR (a)(8)(i)(B). Accordingly, an ANDA will not be approved if the agency has a reasonable basis to conclude that one or more of the inactive ingredients or the proposed product's composition raises serious safety or efficacy questions. See 21 CFR (a)(8)(ii)(A). And a proposed generic product's inactive ingredients or composition are considered to raise such questions if, among other things, the product includes "a significantly greater content of one or more inactive ingredients than previously used" in the drug product or there is a change to the vehicle of a topical product that may increase absorption of potentially toxic active ingredients. 21 CFR (a)(8)(ii)(A)(6), (7). Since at least 1999, FDA has also required the sponsors of all new topical drug product formulations to fully characterize the safety of their products, including by documenting the systemic absorption of the drugs when applied under maximal use conditions. See CDER Deputy Director Memorandum at 9 ("In the mid-1990's, [the Office of New Drugs] began requesting PK information be collected for all topical drugs during product development."). The agency has recognized that such testing is particularly important when a sponsor seeks to reformulate an existing product, and the formulation raises the possibility of new toxicities, adverse events, or other safety concerns. See id at Graceway has itself been required by FDA to conduct such testing in support of its clinical development program for an imiquimod cream product with a lower strength than Aldara. As discussed below, FDA instructed Graceway to conduct maximal use PK testing in patients with AK and EGW, "due to differences in the disease states, dosing regimens and site of application proposed for each disease state." Official Minutes of FDA Guidance Meeting with Graceway (July 27, 2007) ("FDA Meeting Minutes") at 3 (attached at Tab C. IIl. ARGUMENT A. ANDA Apolicants for Generic Imiguimod Cream Must Conduct Bioeauivalence Studies in EGW and sbcc FDA has allowed a comparative clinical study in one condition to suffice as a demonstration of bioequivalence in another condition, but only under carefully defined circumstances. First, the conditions must be related and must require delivery of drug to the same site of action. Second, there must be "reasonable scientific information" establishing no significant difference in the availability of the active ingredient or moiety at the site or sites of activity in each condition. Third, if these criteria are met, the comparative study must be conducted in the condition that is the most able to detect differences between the performances of the tested products. The agency has said the most sensitive study generally will be in the such instances, the necessary testing may include preclinical tests on the ingredient, as well as skin irritation and sensitization testing and photo safety testing of the proposed formulation. See id., at 6-8 ; Guidance for Industry : Photosafery Testing (May 2003).

7 Re: Aldara (imiquimod) Cream, 5% Page 7 of 18 condition : (1) with the least variability in the disease state and expected course of disease ; (2) for which the recommended duration of treatment is the same for all patients ; and (3) with the shortest duration of treatment for which a significant treatment effect is expected. FDA has also said that such a condition often is the most difficult to treat. As discussed below, EGW is a condition that is wholly unrelated to AK or sbcc - it has a fundamentally different pathophysiology -and that occurs at a different anatomical location and in different types of skin than AK or sbcc. Moreover, there is no established body of evidence demonstrating that the availability of imiquimod at the site of action for AK or sbcc is similar to, or predictive of, the active ingredient's availability at the site of action for EGW. For those reasons, no study in AK or sbcc may be relied upon for reaching a conclusion about bioequivalenoe in EGW, and an ANDA for generic version of Aldara must contain data from a comparative clinical trial in patients with EGW.a With regard to sbcc and AK, consideration of the enumerated factors leads to the conclusion that sbcc is the condition in which a comparative clinical study is more likely to discern differences between imiquimod products. In the context of Efudex, FDA concluded that a comparative clinical study in AK could be relied on to assume bioequivalence in sbcc. Evaluation of the same characteristics yields a different outcome with regard to Aldara, which is not surprising, given the differences between Aldara and Efudex. Although both products are indicated for the treatment of AK and sbcc, the approved uses of the two products are significantly different in a number of important ways, including the types of lesions treated, the locations of those lesions on the body, and the treatment regimens. In addition, the clinical data supporting approval involve different endpoints. Accordingly, a comparative clinical trial in sbcc is necessary to demonstrate the bioequivalence of a proposed generic imiquimod cream that references Aldara. 1. Studies in EGW Patients are Required Because EGW is Unrelated to AK or sbcc and Occurs at Different Anatomical Locations with Different Types of Skin than AK or sbcc Aldara was first approved for the treatment of external genital and perianal warts/ condyloma acuminata. EGW is a condition that is unrelated to, and occurs at a different site of action than, AK or sbcc. Consistent with FDA's articulated policies and the sound science underlying them, a comparative clinical trial demonstrating bioequivalence in sbcc or AK cannot be relied on to infer bioequivalence in EGW. Any ANDA for a generic version of Aldara must contain data from a separate trial comparing the proposed product and the RLD in treating patients with EGW. a Nor is failure to show bioequivalence in any of Aldara's approved indications a permissible reason for an applicant to seek to omit an indication from its proposed labeling. Any applicant seeking to alter Aldara's approved labeling in this manner must proceed under section 505(b) of the FDCA. See 21 USC 355(j)(2)(A)(v) ; 21 CFR (a)(8)(iv) ; see also Efudex Petition Response at 9.

8 Re: Aldara (imiquimod) Cream, 5% Page 8 of 18 The characteristics that distinguish EGW are material. First, it has a completely different pathophysiology than AK or sbcc. EGW is a sexually-transmitted disease caused by infection with certain strains of the human papillomavirus ("HPV"), while AK and sbcc are precancerous and cancerous lesions, respectively, associated with overexposure to ultraviolet light.' Second, EGW occurs at a different location on the body than either AK or sbcc and in several different types of skin that may be expected to have meaningfully different absorption rates.' It is well recognized that multiple physiologic factors affect topical drug delivery, including anatomical location, skin thickness and structure, and hydration. 7 In its recent response to a citizen petition submitted by Hill Detmaceuticals, for example, the agency described how skin that is penetrated by coarse, thick, "terminal" hairs -e.g., the pubic region, where genital warts are often located - may have different absorption properties than skin that is penetrated by the thinner, finer, "vellus" hairs - e.g., the face, neck, trunk, and extremities, where AK and sbcc lesions often occur. See Citizen Petition Response, Docket No. FDA-2004-P (Mar. 25, 2009) at 20. In addition, EGW - in contrast to the types of AK and sbcc Aldara is approved to treat, as discussed below - essentially consists of "hyperkeratinized" lesions that may occur on many different types of skin, including skin that is virtually mucosal.8 With regard to Aldara, the impact of these variations in EGW can be seen in the striking differences in cure rates, depending on the location of a wart and a patient's gender. According to Aldara's labeling, approximately two thirds of women treated with Aldara in clinical trials experienced complete clearance of EGW, which is about twice the rate in men. See Aidara Approved Labeling. Such gender differences are not seen in AK or sbcc ; most clinicians and researchers attribute the disparity within EGW to differences in the types of skin on which the warts were located." ' See Mayeaux EJ and Dunton C, Modern Management of External Genital Warts, 12 Journal of Lower Genital Tract Disease 2008 : (attached at Tab D) ; Wagstaff AJ and Perry CM, Topical Intiquimod: A Review of its Use in the Management ofanogenital Warts, Actinic Keratosis, Basal Cell Carcinoma and Other Skin Lesions, 67 Drugs 2007 : (attached at Tab E); Czelusta AJ, et al., A Guide to Immunotherapy of Genital Warts : Focus on Interferon and Imiguimod, i I BioDrugs 1999 : (attached at Tab F). See id. ; see also Beutner KR, et al., External Genital Warts: Report of the American Medical Association Consensus Conference, 27 Clinical Infectious Diseases 1998 : ("Beumer, External Genital Warts") (attached at Tab G). In these regards, Aldara is very different from topical antifungals, discussed in the recently published article by Peters, et al. See Peters, Generic Drugs. Although topical antifungals often have multiple indications, the different conditions being treated typically are caused by the same or a similar fungus, and occur in the same types of skin (i.e., fully keratinized skin). 'See Feldmann RJ and Maibach HI, Regional Variation in Percutaneous Penetration of "C Cortisol in Man, 48 Journal of Investigative Dermatology 1967 : (attached at Tab H) ; Cronin E and Stoughton RB, Percutaneus Absorption : Regional Variations and the Effect ofhydration and Epidermal Stripping, 74 British Journal of Dermatology 1962 : (attached at Tab 1). 'See Beumer, External Genital Warts. See Sauder DN, et al., Topical Imiquimod 5% Cream as an Effective Treatment for External Genital and Perianal Warts in Different Patient Populations, 30 Sexually Transmitted Diseases 2003 :

9 Re : Aldara (imiquimod) Cream, 5% Page 9 of 18 By way of explanation, the stratum corneum of partially keratinized skin is thinner than that of fully keratinized skin, making drug penetration easier. Female patients likely experience higher cure rates because their warts are mostly on the vulva, which is covered primarily by moist, partially keratinized skin. When warts do occur in fully keratinized areas for women, the skin is more likely to be hair-bearing than it is for men, which may increase cutaneous penetration. Male EGW patients are believed to have lower cure rates because their warts tend to occur on the penile shaft, which is predominantly covered by fully keratinized skin. There are even efficacy differences between circumcised and uncircumcised men: the former have lower clearance rates than the latter. The difference is believed to be due to the lower degree of keratinization and the semiocclusive effect of the foreskin.' The wide variance in clearance rates demonstrates the importance of skin type on the effectiveness of topical imiquimod. Because of these material differences in the conditions' pathophysiologies and the types of skin being treated, comparative clinical data regarding effectiveness in treating patients with sbcc or AK cannot provide a basis for concluding that a generic imiquimod cream product is bioequivalent to Aldara in treating patients with EGW. Accordingly, any ANDA for a generic imiquirnod cream must include comparative clinical trial data demonstrating bioequivalence in treating EGW. 2. Studies in Patients with sbcc are Required Because sbcc is the More Discriminating Test Condition In the context of Efudex, FDA concluded that AK and sbcc are related conditions that occur at the same site of action. See Efudex Petition Response at 7-8.' ' We need not revisit that ("Sauder, Topical Imiquimod") (attached at Tab J) ; Fife KH, et al., Treatment of External Genital Warts in Men Using S% Imiquimod Cream Applied Three Times a Week Once Daily, Twice Daily, or Three Times a Day, 28 Sexually Transmitted Diseases 2001 : (attached at Tab K) ; Beutner KR, et al., Imiquimod, a Patient-Applied Irnmune-Response Modifier for Treatment of External Genital Warts, 42 Antimicrobial Agents and Chemotherapy 1998 : (attached at Tab L). " See Gotovtseva EP, et al., Optimal Frequency of Imiquimod (Aldara) S% Cream for the Treatment of External Genital Warts in Immunocompetent Adults: A Meta Analysis, 35 Sexually Transmitted Diseases 2008 : (attached at Tab M) ; Arican O, et al., Topical Imiquimod 5% Cream in External Anogenital Warts : A Randomized, Double-Blind, Placeho-Controlled Study, 31 Journal of Dermatology 2004 : (attached at Tab N); Sander, Topical Imiquimod; Gollnick H, et al., Safety and Efficacy of Imiquinwd S% Cream in the Treatment of Penile Genital Warts in Uncircumcised Men When Applied Three Times Weekly or Once Daily, 12 International Journal of STD and AIDS 2001 : (attached at Tab O). " Based on a review of the publicly available administrative record, it appears that not a single expert inside FDA's Division of Dermatology and Dental Products ("DDDP")-beginning in 1999 with then- Division Director Jonathan Wilkin, through current Division Director Susan Walker- shared this view. As DDDP summarized at one point: "Efficacy in the primary indication may be extrapolated if a secondary indication has similar pathology and is easier to treat. Although both actinic keratosis and superficial basal cell carcinoma may arise in photodamaged skin, their pathologies are not similar. Moreover, it is unlikely that superficial basal cell carcinoma is easier to treat than actinic keratosis."

10 Re : Aldara (imiquimod) Cream, 5% Page 10 of 18 issue in this petition. With regard to Aldara, even if we assume that AK and sbcc are related conditions occurring at the same site of action, the factors identified by the agency require a clinical trial in sbcc to demonstrate bioequivalence. a. sbcc requires a shorter duration of treatment and lower total dose As the agency has recognized, "the shortest duration of treatment for which a significant treatment effect is expected is likely to be the most discriminatory, since extending the duration of therapy may result in a higher probability of success for all study groups and less ability to differentiate between products." Efudex Petition Response at 10. For that reason, the most relevant fact is that Aldara is used for only six weeks in treating sbcc, but must be administered for a full 16 weeks in the treatment of AK. See Aldara Approved Labeling. If the approved indication associated with the shorter duration of treatment yields the more sensitive bioequivalence study, then - for Aldara- sbcc is the appropriate condition in which to study a proposed generic product. Moreover, the cumulative dose of imiquimod in the treatment of sbcc is only a fraction of what is used in treating AK. The recommended dose for the largest sbcc lesion is 40 mg of cream. With 30 total doses (five doses per week for six weeks), this means that a single sbcc treatment site receives approximately 1,200 mg of Aldara cream, which contains approximately 60 mg of imiquimod. By contrast, the full course of AK treatment requires almost seven times that much product (250 mg dose twice a week for sixteen weeks provides 8,000 mg of Aldara cream and 400 mg of imiquimod). Because AK requires treatment over an extended period, with significantly higher doses and cumulative amounts of imiquimod, a comparative clinical trial in sbcc is more likely to detect differences in therapeutic effect between Aldara and a proposed generic imiquimod cream. b. sbcc bas a lower lesion clearance rate Although the clearance rates reported in the Aldara labeling might appear to suggest otherwise, sbcc is a more difficult-to-treat condition than AK. The clinical trial data showed a 45% complete clearance rate for AK and a 75% clearance rate for sbcc, but a simple comparison of those numbers would be highly misleading, for a number of reasons, some of which also serve to distinguish Aldara from Efudex. See Aldara Approved Labeling. Memorandum from J. Beitz, Director of the Office of Drug Evaluation III ("ODE IIP') to G. Buehler, Director of the Office of Generic Drugs ("OGD"), and J. Axelrad, Director of the Office of Regulatory Policy (Dec. 3, 2007) (`ODE III Director Memorandum") at 3 (attached at Tab P). DDDP recommended that the 5-FU ANDA sponsor conduct a bioequivalence study in patients with sbcc, because the "histopathological differences" between sbcc and AK "translate to different requirements in their treatment with regard to depth of penetration and site of drug action." Id. at 5. DDDP concluded that "a demonstration of treatment effect in actinic keratosis cannot be extrapolated to bioequivalence for superficial basal cell carcinoma treatment." Id.

11 Re : Aldara (imiquimod) Cream, 5% Page 11 of 18 Most significantly, the "complete clearance" rates for the two conditions measure different results. The AK studies employed a dichotomous endpoint (clear, not clear) designed to measure per patient response, which incorporated multiple lesions (the AK patients had four to eight lesions within a 25cmz treatment area at the start of the study), while the Phase III sbcc studies evaluated the clearance of a single lesion. In addition, the AK studies measured efficacy by visual determinations of clearance, an endpoint that has been shown to suffer from high interobserver variability. 12 By contrast, the sbcc clearance rate describes a narrower and more specific circumstance - the visual clearance of an individual, biopsy-confirmed single lesion (maximum diameter 2 cm) confirmed by histological examination. See id " For purposes of determining which condition is more difficult to treat, a comparison of individual lesion clearance rates is more meaningful. If individual lesion clearance is evaluated, the AK studies have a median lesion reduction rate in the overall number of lesions per patient of 83.3%, 14 compared to a 75% lesion clearance rate in the sbcc studies. Accordingly, a more "apples to apples" comparison of clearance rates shows that, for Aldara, sbcc is the more difficult-to-treat condition. c The AK treated by Aldara does not have the same type of thickened stratum corneum In concluding that AK was a more difficult-to-treat condition for Efudex, FDA stressed that the stratum corneum, which is the primary barrier to topical drug delivery, often is thickened in AK, thus increasing the barrier. This led the agency to conclude that, if a study in AK showed that a topical product delivered its active ingredient to the relevant site within the skin, one could assume that the product would similarly deliver the ingredient to the site of action in sbcc, which does not have a thickened stratum corneum and may have a compromised barrier. See Efudex Petition Response at 7-8 ; see also ODE III Director Memorandum at 7, 10. This analysis does not carry over to Aldara. Aldara is approved to treat only clinically typical, nonhyperkeratotic, nonhypertrophic actinic keratoses on the face or scalp. Patients with these lesions do not exhibit the same type of thickened stratum corneum as patients with hyperkeratotic or hypertrophic lesions," and were the only subjects in the Phase III trials supporting Aldara's approval. See Aldara Approved Labeling. 1' See Epstein E, Quantifying Actinic Keratosis: Assessing the Evidence, 5 American Journal of Clinical Dermatology 2004 : (attached at Tab Q). 1' Although this issue was described in detail in the Efudex citizen petition proceeding, see, e.g., Valeant Pharmaceuticals Reply Comment, Docket No. 2004P-0557 (Oct. 21, 2005), the agency's response did not address the subject. 1 See Lebwohl M, et al., Imiquimod 5% Cream for the Treatment ofactinic Keratosis: Results from two Phase 171, Randomized, Double-Blind, Parallel Group, Vehicle-Controlled Trials, 50 Journal of the American Academy of Dermatology 2004: ("Lebwohl, Imiquimod 5% Cream") (attached at Tab R). '' See Aghassi D, et al., Confocal Laser Microscopic Imaging of Actinic Keratoses In Yivo: A Preliminary Report, 43 Journal of the American Academy of Dermatology 2000 : (attached at

12 Re : Aldara (imiquimod) Cream, 5% Page 12 of 18 In addition, Aldara is limited to treating AK and sbcc on specific parts of the body that have skin with significantly different qualifies. Aldara is approved to treat AK only on the face or scalp, and sbcc only on the trunk (excluding anogenital skin), neck, or extremities (excluding the hands and feet). This can be significant, because the skin on various parts of the body exhibits different absorption properties. For instance, the stratum corneum on the trunk is thicker than that on the face, with correspondingly lower drug absorption. I a This also distinguishes Aldara from Efudex, which is approved to treat AK and sbcc generally, with no limitations on anatomical location. For these reasons, a demonstration of imiquimod's efficacy in treating AK would not provide "assurance that the formulation would penetrate the skin sufficiently to treat sbcc," as FDA believed was the case for Efudex. Efudex Petition Response at 8. d. The sbcc dosing regimen is at a more sensitive location on the dose response curve, and therefore more likely to identify differences between products The dose response data from the Aldara clinical development programs indicate that the AK dosing regimen is not at a discriminating location on the dose response curve. In each of two Phase III studies, two different dosing regimens were studied - twice weekly and three times weekly, both for 16 weeks. The efficacy rates observed in the two AK dosing regimens were not significantly different. The average complete clearance rate for twice weekly dosing was 45%, while the average complete clearance rate for three times weekly dosing (which represents a 50% increase in dose) was nearly the same, at 48%.'? Because the available information shows that the AK dosing regimen is not at a sensitive location on the dose response curve, a comparative study in AK is unlikely to detect differences between Aldara and a proposed generic imiquimod cream. In contrast, more extensive dose ranging studies have been conducted on sbcc, and they indicate that the approved sbcc dosing regimen is at a much more sensitive location on the applicable dose response curve. Overall, ten Phase II studies were conducted to evaluate the safety and efficacy of various doses, dosing frequencies, and durations of treatment of 5% imiquimod in treating sbcc. In a dose ranging study of six weeks of therapy (the approved Tab S) ; Moy RL, Clinical Presentation ofactinic Keratoses and Squamous Cell Carcinoma, 42 Journal of the American Academy of Dermatology 2000: S8-10 (attached at Tab T). " See Ya-Xian Z, et al., Number of Cell Layers of the Stratum Corneum in Normal Skin - Relationship to the Anatomical Location on the Body, Age, Sez and Physical Parameters, 291 Archives of Dermatology Research 1999 : (attached at Tab U). " See Lebwohl, Imiquimod 5% Cream. Because the AK studies used a dichotomous endpoint (clear, not clear) designed to measure per patient (as opposed to per lesion) response, Graceway's predecessor also evaluated the percent reduction in the number of AK lesions. This analysis similarly showed very little difference between the two dosing regimens; Aldara administered twice per week had a median percent reduction of 83.3% and three times per week dosing achieved an 86.6% median percent reduction. See id ; see also Korman N, et al., Dosing with 5% Imiquimod Cream 3 Times per Week for the Treatment of Actinic Keratosis, 141 Archives of Dermatology 2005 : (attached at Tab V).

13 Re : Aldare (imiquimod) Cream, 5% Page 13 of 18 treatment duration), dosing twice a day, every day (14 doses per week), was the most effective regimen (producing 100% histological clearance), but was associated with an unacceptable rate of skin reactions. Next, dosing once a day, every day (seven doses per week), produced 88% clearance, followed by dosing twice a day for three days each week (six doses per week), which produced 73% clearance. Finally, a regimen of once a day for three days each week (three doses per week) produced the lowest clearance rate, 70%.1s Ultimately, FDA approved dosing once a day for five days each week - i.e., five doses per week, which is in the middle of the range described above - as providing the optimal benefrtto-risk ratio.' `' Based on these and other clinical trial data, a comparative clinical study conducted with this dosing regimen is much more likely than an AK study to detect differences in product performance, particularly with regard to products that may be less effective than Aldara, which could present a risk to patient safety. e. sbcc is a cancer, and the consequences of under-treatment are serious Basal cell carcinoma (`BCC") is the single most common malignancy currently described in Caucasians worldwide. Although it is a slow growing, locally invasive epidermal malignancy that rarely metastasizes, BCC left untreated can result in extensive local tissue damage and morbidity. The standard of care for most BCCs is surgical or ablative treatment ; in fact, Aldara is indicated only when surgical methods are less appropriate, and FDA required two-year follow up data before it would approve the drug.2 This reflects the agency's recognition of the serious consequences of inadequately treating this cancer. Similarly, a generic product that is not bioequivalent to Aldara in treating sbcc would expose patients to the risks of under-treatment, including progression of the cancer and a greater number and complexity of required surgical procedures. To protect patient safety, therefore, the agency must be particularly confident that a proposed generic imiquimod cream is bioequivalent to Aldara in treating sbcc. Because a " See Marks R, et at., Imiquimod 5% Cream in the Treatment of Superficial Basal Cell Carcinoma : Results of a Multicenter 6-Week Dose-Response Trial, 44 Journal of the American Academy of Dermatology, 2001 : (attached at Tab W) ; see also Gupta A, et al., Viral and Nonviral Use of Imiquimod: A Review, 8 Journal of Cutaneous Medicine and Surgery 2004 : (attached at Tab X); Geisse JK, et al., Imiquimod 5% Cream for the Treatment of Superficial Basal Cell Carcinoma: A Double-Blind Randomized, Vehicle-ControlledStudy, 47 Journal of the American Academy of Dermatology 2002: (attached at Tab Y) (both describirig additional dose ranging studies). " Higher doses, although effective, were not well tolerated, and lower doses were deemed insufficiently effective for treating a malignancy. The Phase III studies included dosing once a day for five days each week (five doses per week) and every day (seven doses per week) over six weeks. Composite (clinical and histological) clearance was 75% for five times per week dosing and 73% for seven doses per week. See Geisse JK, et al., Imiquimod 5% Cream for the Treatment of Superfrcial Basal Cell Carcinoma: Results from Two Phase 111, Randomized, Vehicle-Controlled Studies, 50 Journal of the American Academy of Dermatology 2004 : (attached at Tab Z). 21 See Aldara Approvable Letter, NDA S-016 (Apr. 7, 2004) (attached at Tab AA).

14 Re: Aldara (imiquimod) Cream, 5% Page 14 of 18 comparative clinical trial in AK cannot provide that level of confidence, a study in sbcc must be required. B. ANDA Applicants for Generic lmiguimod Cream Must Conduct PK Studies Under "Maximal Use" Conditions in Patients with EGW and Patients with AK The agency's general practice for more than a decade has been to require sponsors to conduct PK studies on topical drug formulations during product development. The purpose of these studies is to provide "the best information to prescribing physicians and to provide a linkage between animal safety data and dose finding and formulation optimization in humans." CDER Deputy Director Memorandum at 10. Especially for a new formulation of an approved drug substance, PK data are needed to ensure that the systemic safety of the new formulation is fully characterized 2' The agency's recommended in vivo assessment of systemic exposure is performed under "maximal use" conditions, in which the potential for systemic absorption is heightened by enrolling patients with severe cases of the relevant condition and by increasing the frequency and duration of dosing, the total surface area involved, and the amount of drug applied.-z The importance of PK data in characterizing the safety of a topical generic product was made abundantly clear during the litigation that occurred after FDA's denial of the Efudex petition. When it recognized that the subject ANDA, which had been approved, did not contain PK data, the agency suspended its approval of the application. Although FDA ultimately concluded that PK testing was not necessary for generic versions of Efudex, the reasoning behind that decision, when applied to Aldara, does not support similarly excepting generic imiquimod cream products. One expressed reason for not requiring PK data for a generic 5-FU cream was that "[t]he available evidence suggests a wide safety margin for topical 5-FU products." CDER Deputy Director Memorandum at 10. Because 5-FU is approved for intravenous use (as an adjunct to leucovorin, to treat certain types of cancer), there were extensive data about the systemic safety of 5-FU, and FDA was able to compare differences in plasma levels among different topical 5- FU products with the levels achieved for intravenous administration, "where known toxicities occur." Id. The agency concluded that the safety margin with topical 5-FU "is between 1,400 and 22,000-fold." Id. Similar data are not available for imiquimod cream, and the burden is on an ANDA applicant to show that its formulation does not render its product less safe than Aldara. See 21 CFR (a)(9)(v), (a)(8)(i), (ii). -1 See Guidance for Industry and Review Staff: Nonclinical Safety Evaluation of Reformulated Drug Products and Products Intended for Admfnistration by an Alternate Route (Mar. 2008) at 3 ("For example, alterations in absorption or the dosing frequency can produce significantly different concentrations/time profiles that might lead to different toxicological effects. Changes in the vehicle composition or form also can alter the PK of active ingredients."). '`' See Bashaw ED, The Development and Use of Topical Bioavailability Data: A Regulatory View, Slide Presentation (attached at Tab BB).

15 Re: Aldarao (imiquimod) Cream, 5% Page 15 of 18 FDA also concluded that, with regard to Efudex, the formulation differences at issue were minor and did not raise safety concerns, and there was no "toxicity of concern for the new formulation." CDER Deputy Director Memorandum at 10 ("[t]he differences between the formulation in the... ANDA product and [Efudex] are in the presence of excipients that are commonly used in other formulations - the [ANDAj product does not contain new molecules that would raise safety concerns"). Graceway has no reason to believe that a similar conclusion can reasonably be reached with regard to generic imiquimod products, particularly in light of the patented nature of Aldara's formulation. The agency has also acknowledged that even robust clinical trials may not pick up safety issues unique to the generic formulation, which is why PK data under maximal use conditions are necessary, to ensure that the generic product is as safe as the reference drug. See id at i 1 (noting that, for applications where systemic absorption of the product has been linked to adverse events, OGD generally requires a PK study "in addition to the clinical bioequivalence testing, in order to assess the equivalence of the new formulation for safety related to systemic absorption"). Moreover, because the systemic exposure risks vary with the conditions of use, maximal use PK studies should be required in both EGW and AK. PK in EGW should be evaluated because, as discussed above, EGW is so materially different from AK and sbcc : The anogenital area includes skin that is different with respect to the degree of keratinization, potential for or-elusion, and anatomical differences between males and females. A PK study in AK, rather than sbcc, should also be required, because the dosing regimen for AK exposes patients to significantly more drug (400 mg v. 60 mg) over a much larger treatment area and longer treatment period (16 weeks v. 6 weeks) than the regimen for treating sbcc. To be sure, the absorption of a topical drug product can be affected by the product's formulation, but it also can vary with differences in the site of application, skin condition, dosing regimen (including frequency of application and amount applied), the patient's age, and duration of use.-3 The following chart summarizes the substantial differences in various factors potentially affecting absorption, based on the condition being treated. 2' For example, lesions or other inflammatory activity can weaken the integrity of the skin barrier and increase absorption. See Thong HY, et al., Systemic Toxicity Caused hy Ahsorption of Drugs and Chemicals Through Skin, DERMAL ABSORPTION AND ToxtCITY ASSESSMENT 405 (M.S. Roberts and K.A. Walters eds., 2008) (attached at Tab CC).

16 Re : Aldara (imiquimod) Cream, 5% Page 16 of 18 External genital and perianal area A 25 cm' area on the face or scalp Trunk (excluding anogenital skin), neck, or extremities (excluding hands and feet) Sklp Conditioi Entire wart area Lesions, including healthy tissue in surrounding area Tumors, with a maximum 2 cm diameter, plus a 1 cm margin Until wart clearance, or a maximum of 16 weeks ; 6-10 hours per application 16 weeks; 8 hours per application 6 weeks; 8 hours per application Dqsmg ~tegiin~ 3 times/week 2 times/week 5 times/week i packet sufficient to cover 20 cm ; 48 packets total; 600 mg of imiquimod total i packet containing 250 mg of cream; 32 packets total; 400 mg of imiquimod total A 7 nnn droplet containing 40 mg of cream ; 30 doses total ; 60 mg of imiquimod total The systemic impact of these differences is seen in data reported in the Aldara labeling. In a PK study in 58 AK patients, with a dosing interval of three times per week for 16 weeks, mean serum peak drug concentrations at the end of the study ranged from 0.1 nglml to 3.5 ng/ml, depending whether one packet (12.5 mg of imiquimod) was applied to the face, two packets (25 mg of imiquimod) were applied to the scalp, or six packets (75 mg of imiquimod) were applied to the hands/arms. Systemic absorption was not dose proportional, but appeared to be more closely related to the surface area to which the drug was administered. Urinary recovery of the drug and its metabolites was nearly double for women than they were for men in the 75 mg group. See Aldara Approved Labeling. In another PK study, an average dose of only 4.6 mg of imiquimod in 12 subjects with EGW resulted in mean peak drug concentrations of approximately 0.4 ng/ml, which is twice the concentration seen with a dose that was more than five times greater (25 mg) applied to AK patients' scalps in the previous PK study. And in this study, urinary recovery was 0.11 % for males and 2.41% for females over the course of treatment. See id. The data from these two PK studies indicate that systemic absorption varies significantly, depending on a variety of factors, which is why maximal use PK studies must be done in more than one condition. Finally, this is consistent with Graceway's recent experience in developing a lower strength imiquimod cream. Even though the new product contains the same active ingredient and inactive ingredients as Aldara, FDA has insisted that the company conduct PK studies in AK and EGW, "due to differences in disease states, dosing regimens and site of application proposed for each disease state." FDA Meeting Minutes at 3. According to FDA: