Interesting Deposition Testimony
While we wait for the Court to rule on the parties' cross-motions for summary judgment and exclusion of evidence -- we've been waiting three weeks so far -- I thought we might pass the time by reviewing some of the evidence that is before the Court. So much came in so quickly that some items might have been overlooked, or not gotten the attention that they ought.
Below I have gathered several depositions and an email.
We haven't looked at the Guarente deposition before. ChromaDex is offering it to refute the proposition that Elysium used the research of Leonard Guarente in the creation of Basis.
You'll see Guarente say that NR is not an NAD precursor in yeast or in humans. He is possibly making a very technical point that NMN is the precursor of NAD and NR is the precursor to NMN, not to NAD, but it appears to be very prickly testimony, and he seems awfully guarded about giving Dr. Brenner credit. Also of note, Dr. Guarente says that he has done no research to assess the bioavailability of NR, which strikes me as curious, given that NR is the main ingredient in Basis.
Q. Do you agree that -- that the research by Dr. Brenner showed that NR boosts NAD in humans?
A. Not in this paper.
Q. Okay. Do you agree that Dr. Brenner's work showed that NR works by something called the NRK pathway?
A. I think this paper would -- would say it does in yeast.
Q. What is the NRK pathway?
A. It's a -- you want to get to NAD because NAD is what activates sirtuins. Okay? So at the start of the pathway, you have one way to get to NAD, which is niacin. And niacin goes through a series of steps and it will -- eventually the cells will make NAD from it. Okay? A step intermediate in the pathway, or fairly late in the pathway, has an intermediate called NMN. And NMN is nicotinamide mononucleotide. And -- nicotinamide mononucleotide. So NAD -- NAD stands for nicotinamide adenine dinucleotide. So it's two nucleotides connected by a bridge. Okay? One of the nucleotides is nicotinamide. So nicotinamide, or niacin, which is nicotinamide or nicotinic acid, are early in the pathway. As it gets modified, it gets the ribose and a phosphate attached to it. Okay. So then it's nicotin -- then it's NMN, nicotinamide mononucleotide, and then the adenine gets put on at the end to form NAD. Nicotinamide riboside is not an intermediate in the pathway of NAD synthesis. It is NMN without the phosphate. So, as such, it could not lead to NAD synthesis unless something put a phosphate on it. And so it needs an enzyme to put the phosphate on it to create NMN. And the kinase that does that is called NR kinase, or NRK.
Q. Okay. Who figured that out? Dr. Brenner?
A. I believe so.
Q. Thank you. Before you read Dr. Brenner's 2004 paper that we're looking at, Exhibit 67, did you know that NR is an NAD precursor in yeast?
A. It's not.
Q. Okay. NR is not an NAD precursor in yeast?
Q. Before you read Dr. Brenner's 2004 paper, did you know that NR is an NAD precursor in humans?
A. It's not, because NR -- the natural intermediate is NMN, not NR. NR has to be added exogenously.
Q. Before you read Dr. Brenner's 2004 paper, were you aware of a connection between NR and NAD?
Q. Before you read Dr. Brenner's 2004 paper, did you know of a connection between NR and NAD as it affects yeast?
Q. And did you know of a connection between NR and NAD as it affects humans before you read Dr. Brenner's paper in 2014?
A. No, not before and not after.
Q. You disagree with the framework of that question, is that right?
A. This paper has nothing to do with humans.
Q. Okay. Did you read the paper in 2004 or did you read it some later time?
A. I believe I read it then.
Q. You would have been following this issue so you would have read it, the research in this topic?
Q. What was your reaction, if you remember, to the breakthroughs in this paper, Exhibit 67?
A. I didn't have much of a reaction.
Q. Did you think it was a significant step forward in the research in the anti-aging field or --
Q. Why not?
A. Because it hadn't been -- been demonstrated that NR would do anything to a mammal and I was already thinking about mammals at that point.
Q. Did you read a second paper by Dr. Brenner in 2007 regarding NR?
A. I don't recall what paper you're referring
Q. Fair enough.
MR. ATTANASIO:· Let's mark this as Exhibit 68, please.
(Whereupon, exhibit is received and marked Guarente Deposition Exhibit 68 for identification.)
THE REPORTER:· Exhibit 68.
BY MR. ATTANASIO:
Q. You can take a minute to review that to yourself, Dr. Guarente. I'm not going to ask you any specific questions about the content. (Pause)
Q. Do you recognize Exhibit 68?
A. It's another of Brenner's papers.
Q. All right. Could you read the title for us, sir?
A. "Nicotinamide Riboside Promotes SIR2 Silencing and Extends Lifespan via NRK and URH1/PNP1/MEU1 Pathways to NAD."
Q. As you know, you see Dr. Brenner there as the lead author, correct?
Q. You look at the lower-right corner in the smaller print, you see the date, May 4th, 2007, is that right?
Q. Do you recall reading this paper, Exhibit 68, at the time it was published, 2007?
A. I must have.
Q. Why do you say that?
A. Because I followed the field.
Q. Do you have any particular memory of this paper?
A. No. I would have -- I would have thought at that point that, given the earlier paper that NR leads to NAD, that this makes sense.
Q. What -- what is the "this" in that sentence, sir?
A. That it extends -- that it would extend lifespan in yeast.
Q. Did you agree -- did that conclusion sound reasonable to you?
Q. Was that a breakthrough? Was that a step forward?
A. I think it follows from prior work.
Q. He also concluded that NR elevates SIR2 activity, correct?
Q. That was your favorite, SIR2, if I'm not mistaken, your debate with Mr. Sinclair, right?
Q. So this would have been pretty notable to you at the time, fair?
A. But expected, yes.
Q. The report here in 2007, Exhibit 68, also showed that NR extends lifespan, is that right?
Q. And did you agree with the findings in this paper as far as you recall?
Q. Have you done any research to test NR's bioavailability?
Q. Are you aware that Dr. Brenner has done that research?
Q. When did you first meet Eric Marcotulli?
A. We met at an airport in San Francisco.
A. I believe it was 2013.
Q. Did you meet Dan Alminana at the same time?
Q. When did you first meet Dan Alminana?
A. It was later, when he was being added to the team.
Q. The Elysium team?
Q. How did it come to pass that you met Mr. Marcotulli in an airport in San Francisco in 2013?
A. Yeah. The antecedents to that were I got a cold call from him months before that to discuss -- I believe -- I believe he wanted -- so he knew I was associated with Sirtris. And I believe he wanted to obtain some resveratrol for his parents and he wanted to know if I had a good source of it. I think that was the very initial discussion. And it involved into -- and, you know, I got to know who he was....
Dan Alminana Deposition:
In his deposition, Elysium COO Dan Alminana recounts how it came about that the big orders Elysium made in June came in at a price less than half what the parties had previously agreed to.
Q. And do you remember the price of that order? A. I do.
Q. What was it? A. Four hundred.
Q. Why did you settle on that price? A. I just threw it out there.
Q. Dartboard stuff? A. Dartboard.
Q. Okay. A. We just -- we needed a spark of realistic conversation of where we should be on pricing.
Q. You didn't have any information from Mr. Morris that informed that? A. Not that I recall and I remember just picking 400.
Q. What was the reaction to that order, Mr. Alminana, at 400? A. Um, not enthusiastic. It's interesting that Dan Alminana testified under oath that the price he offered ChromaDex for NR in June, 2016, was randomly chosen, and was not informed by any information, because there is other evidence suggesting that the proposed $400 price was very specifically chosen for a specific reason, including THIS deposition testimony from Daniel Magida, Elysium's former Product Supply Chain Manager (I am assuming that the redacted number is $400):
Daniel Magida Deposition
Q. Flipping to Version 1 of the document attached to this e-mail, this reflects a cost of $400 for both NR and pterostilbene; is that right?
Q. Did Mr. Alminana instruct you to include a scenario with [redacted] price point? A. Yes.
Q. Did he say why he wanted to look at a [redacted] price point? A. Yes.
Q. Why was that? A. Because we know that's how much ChromaDex was getting NR from their supplier.
Q. And who is ChromaDex's supplier? A. Grace.
Q. How did you know how much ChromaDex was paying for its NR? A. They sent a spreadsheet to I don't know if it was to Dan and to Eric but it was to one of them that showed their pricing that they're sending to other vendors.
Eric Marcotulli's Email to Mark Hyman
One of Elysium's breach of contract claims against ChromaDex alleges that ChromaDex promised not to let any other customer sell in combination both NR + Pterostilbene (PT) -- or any supplement "substantially similar to" PT. Some of ChromaDex's customers combined NR and Resveratrol, and Elysium tells Judge Carney that Resveratrol is "substantially similar" to Pterostilbene.
But that's not always what Elysium says about Resveratrol.
Mark Hyman is a celebrity physician who might have been useful in helping to market Elysium's Basis. In August of 2016, David Fialkow at General Catalyst introduced Mark Hyman to Eric Marcotulli via email, noting that Dr. Hyman had a question about a Thorne product, "Resveracel," that contained both NR and Resveratrol. What's the difference between Elylsium's Basis, which contains NR and PT, and the Thorne product containing NR and Resveratrol?
You can see Eric's response in the email reproduced below (Exhibit 56):
"Lenny Guarente...is the pioneer of resveratrol, and he will be the first to tell you it lacks both potency and bioavailability. Pterostilbene, which we have included in Basis, is a natural resveratrol analogue that is far superior along both dimensions...[which means resveratrol] is essentially a non-product..."
So which is it -- "substantially similar," or far inferior, lacking potency and availability, essentially a non-product lacking efficacy, which Thorne can't even sell? The jury may get to hear from Mr. Marcotulli on this issue, via Exhibit 56:
Deposition of Eric Marcotulli
Eric Marcotulli famously is said to have responded in his deposition with some variant of "I don't recall" over 600 times (weirdly, "over 600" is also the number of deposition "I Don't Know's" reportedly tallied by Theranos's Elizabeth Holmes).
In this excerpt, though, Marcotulli is able to answer questions that might explain why Elysium did not just switch to NMN when they lost access to NR. Marcotulli says there was no commercially viable source for NMN, and no assurance of safety.
Q. At any time during the life of Elysium, have you considered using NMN as an ingredient in the product that became ultimately known as Basis? A. Yes.
Q. When was that? A. We have evaluated NMN on multiple occasions, from time to time. The research that we're seeing, while it's still very early for NMN, again still no human data, not something we consider to be a viable or competitive candidate to NR yet. We keep an eye on the research. It's our view that, in the context of the NAD story, NMN may play a different role than NR. And given our belief in the potential health impacts of NAD repletion, it is something that we evaluate on a regular basis.
Q. Do you have a commercial source for it, if you chose to use it? A. To our knowledge, no viable commercial source exists.
Q. It sounds like it's something you're keeping an eye on in terms of research, NMN, correct?
A. That's correct.
Q. Have you ever seriously considered NMN as a candidate for an ingredient that you could source, that you could be assured of its safety and that you could put in a product that Elysium would sell to the public?
Q. When did you consider doing that? A. Again, multiple times in the course of the company's history. I mean, I think it's -- serious consideration is what precedes a market evaluation, when we would go and we would look for commercial sources and evaluate and review the full landscape of the literature, et cetera.
Q. So from time to time you've considered, as a key ingredient in Basis, a product that you cannot source and for which you have no assurances or studies is safe for human consumption; is that fair? A. Yes.
Trademark and Royalty License (Patent Misuse)
Here is an excerpt from ChromaDex's statement of uncontroverted facts. ChromaDex claims that the following account is uncontroverted by Elysium's evidence. Based on this, you can gauge the terrible difficulty that Elysium will have trying to show that it paid money -- or even that it BELIEVED it was paying money -- to license ChromaDex's trademarks, which is the factual underpinning of Elysium's doomed Patent Misuse claim.
For each of these claims, ChromaDex cites to specific evidence in the record:
Elysium sent the first draft of the supply agreement on November 9, 2013. The draft contained provisions for a sublicense to ChromaDex’s patent rights, exclusivity in the direct-to-consumer sale of dietary supplements, the same price in Thorne’s agreement ($1,200 per kilogram), most favored nation (“MFN”) pricing, a cGMP warranty, and terms regarding product safety and latent defects. The draft also contained mandatory minimum purchase commitments for Elysium, royalties paid by Elysium based on its product sales, and a grant of Elysium equity to ChromaDex.
The parties agreed that Elysium would pay royalties in order to compensate for Elysium’s “startup risk.”
On December 13, ChromaDex returned a draft of the agreement that entirely removed the provisions for a patent sublicense, product safety, a cGMP warranty, and latent defects. ChromaDex further edited the draft to make MFN pricing contingent on the “volumes” Elysium ordered, as compared to third parties, and added a limited warranty provision.
Elysium negotiated not to use the NIAGEN trademark on its product label. ChromaDex did not ask for anything in exchange. However, ChromaDex indicated that Elysium would still need to sign a permissive trademark license agreement that would govern in the event Elysium later decided to use ChromaDex’s trademarks.
In a December 13 email attaching a new draft of the supply agreement, Frank Jaksch—ChromaDex’s then-CEO—noted that the parties would “need to split [the deal] into two separate agreements” and that the “royalty and equity section will transfer over to the brand license agreement.” That transfer was to simplify the supply agreement, although Elysium understood that it would still be paying the royalty for “the supply of NR.”
The parties had a phone call on December 16, 2013. The next draft following that phone call, sent on December 20, 2013, no longer granted ChromaDex equity in Elysium or granted Elysium exclusivity.
On December 27, 2013, ChromaDex sent a draft of the supply agreement, which removed the royalty provisions from the supply agreement and copied the same provisions into the trademark license and royalty agreement (“TLRA”).
Elysium's claim that it thought it was paying money for trademarks looks like a post-hoc justification to try to assert a patent misuse claim; the undisputed facts -- at least as ChromaDex tells it, and I have seen nothing contrary -- don't provide any evidence at all that Elysium was paying money for trademarks or had any reason to believe it was paying money for trademarks. Instead, it looks for all the world like they were paying royalties for NR, and that Elysium knew that.
Deposition of Eric Marcotulli
New Patent Strategy
In the following deposition excerpt you will see some of the reportedly-more-than-600 "I don't recall's" that Elysium CEO Eric Marcotulli offered at his deposition. ChromaDex has suggested that Elysium's principals committed perjury, but we don't what testimony ChromaDex might be referring to, because we haven't seen the video clips that ChromaDex gave to the Court. Could this be a part of it? There are a lot of things I don't remember, but there are some things that I do remember, and some things that I won't ever forget:
Q. In the next row you say to Mr. Alminana, "Disregard. I am just ultrasensitive to this new patent strategy." What did you mean by that?
A. I do not know.
Q. Well you were ultrasensitive to something, so it must have been important; what was it?
A. I don't recall.
Q. What was the new patent strategy?
A. I don't know.
Q. In the next row you add, "Not only was it ultrasensitive, but it's also so game changing." Do you see that?
A. I do see that, yes.
Q. This ultrasensative, game-changing patent strategy, what was it, sir?
A. I do not recall.
Q. Was it to try to undermine ChromaDex's patents?
A. I do not recall.
Q. Did the new patent strategy lead you and Mr. Alminana to have meetings with both Dartmouth and Grace in the weeks and months after the texts we're looking at here?
A. I do not know.
Q. You and Mr. Alminana, after the texts we're looking at here, went out and met a woman at Dartmouth, didn't you?
A. We did meet with Dartmouth, yes.
Q. And when you met with Dartmouth, you tried to undermine ChromaDex's rights to the licenses it had with Dartmouth, correct?
A. I do not recall that.
Q. Do you think it's a coincidence that on June 22nd, Mr. Morris, from his private email account, sends you information about the NAD positive patent, and on June 24th, in your own private messaging with Mr. Aminana, you're talking about a new patent strategy; is that a coincidence?
A. I do not know.
Q. Do you remember sending [Dartmouth] over a pile of PDFs and a pile of articles and a pile of public reports about ChromaDex? A. I do not recall.
Q. Do you remember sending that over to his colleague, the woman we talked about before, Ms. Bhakuni? A. I do not recall.
Q. Well, what did you send to Dartmouth? A. Again, I do not recall.
Q. How did the new patent strategy work out that you texted Mr. Alminana about in Exhibit 142, the one that was ultrasensitive? Mr. Sacca: Object to the form of the question Q: How did that turn out? A. I do not know.
Q. You said it was game-changing and ultra-sensitive. What was the outcome? A. I do not know.
Q. Did you also approach Grace?
A. We did speak with Grace, yes.
Q. Did you trash ChromaDex to Grace like you did to Dartmouth?
A. I don't recall the specifics of our meetings with Grace.
Q. Do you remember writing to Mr. Alminana that "Grace is the big key here"? Do you see that?
A. I see that. I do not recall.
Q. Why did you write that?
A. I do not know.
Q. What does "big key" mean?
A. I do not know.
Q. Why is Grace the big key?
A. I do not know.
Q. The next line you write to -- you follow up and write again to Mr. Alminana, "The Dartmouth was is icing." What did you mean by that?
A. I do not know.
Q. Did you mean like icing on the cake?
A. I do not know.
Q. Or did you mean, like, icing in hockey?
A. I do not know.
Q. What did you mean?
A. Again, I do not know.
I don't think it will take a sophisticated jury to understand what is going on here.