disease state primer: type ii diabetes,...

Disease State Primer: Type II Diabetes, Non-Insulins

Q3 2013 Update

2

Table of Contents

Slide Number

I. Introduction • Who is Lumleian and what is a disease state primer?

• What is our perspective on Type II Diabetes?

• 3 – 6

• 7 – 9

II. Disease Overview and Care Paradigm • What is Type II Diabetes?

• Presentation, diagnosis, classification

• Epidemiology by geography and patient segment

• Current care paradigm and clinical evidence

• Emerging care paradigm

11

• 12

• 13

• 14

• 15 – 21

• 22

III. Clinical Development Pipeline • Disease mechanism overview

• Clinical development pipeline mapping

• DPP-IV Inhibitors

• GLP-1 Agonists

• SGLT2 Inhibitors

• PPAR Modulators

• SIRT-1 Activators

• NF-kB Inhibitors

• Glucokinase Activators

• GPCR Agonists

• 11-β-HSD1 inhibitors

• Non-PPAR Insulin Sensitizers


• The Future of T2DM: A Summary

24

• 25

• 26 – 29

• 30 - 31

• 32 - 35

• 36 - 37

• 38 – 39

• 40

• 41 - 42

• 43

• 44

• 45

• 46

• 47

• 48-50

IV. Commercial Landscape • Global, US, EU, Japan market size and growth by brand

• Wall Street consensus forecasts for pipeline assets

• US growth decomposition: Rx volume, pricing, product mix

• US promotional spending, marketing mix, and brand messaging

52

• 53 – 57

• 58

• 59 – 61

• 62 – 64

V. Appendix • Table of Acronyms

• Lumleian Team

• 66 – 67

• 68 – 69

3

• Data Mining

- Regulatory filings

- Scientific literature

- Patent filings

- Company filings

and press releases

• Secondary Data

- Industry pipelines

- Wall Street analysis

- US TRx, pricing,

promotional spend

• Primary Research

- Key opinion leaders

- Practicing physicians

- Reimbursement

Expertise Based

Teams

• Experience

- Academic faculty

- Bio-pharmaceutical

- Equity research

- Strategy consulting

• Expertise

- 30+ clinicians

and Ph.D. scientists

• Analytics

- 5 Ph.D. economists

and statisticians

Universal

Information

Real-Time

Knowledge

• Disease State Primers

- Disease overview

and care paradigm

- Clinical development pipeline

- Commercial landscape

• Functional Drill Downs

- In licensing assessments

- Early and late stage

- Preliminary due dilligence

- Real-time clinical data

• Proprietary Analytics

- Asset valuation

- Epidemiologic forecasts

- Industry benchmarks

• Drug Development

and commercial

- Patient segment valuations

- Promotional response models

• Healthcare professional

and direct to consumer

• Academic and

Research Institutions

- Portfolio optimization

• Early stage

- Out licensing strategy

• Asset valuation

• Transaction support

• Royalty monetization

• Bio-pharmaceutical Companies

- Asset valuation

- Clinical strategy

- In licensing strategy

• Early and late stage

- Portfolio optimization

• Early and late stage

- Preliminary due dilligence

• Life Science Investors

- Asset valuation

- Clinical strategy

- In licensing strategy

Life Science

Client Base

Decision

Support

Lumleian offers the requisite scale and depth of life science expertise required for our client’s

most critical investment decisions; We offer universal information and real time knowledge.

4 Notes: 1These are a representative sub-set of the publicly available data sources

To ensure real-time knowledge, across disease states, our team of 30+ clinicians and Ph.D.

scientists maintain a comprehensive knowledge management platform, leveraging novel data

mining technology and proprietary analytics.

Data Mining

and Analytics

• Company presentations

• Earnings announcements

• Equity research coverage

• Investor relations transcripts

• Clinical trials

• Conference presentations

• Gene ontology

• Industry pipeline databases

• NIH grants

• Scientific literature & citations

• Business development transactions

• Venture capital investments

• Disease profiles

• Industry publications

• Sales and Rx data

• Treatment algorithms

• Advisory committee transcripts

• FDA and EMA filings

Scientific

& Clinical:

Financial:

Academic

Tech Transfer:

Competitive

Landscape:

• Early stage technologies

• Intellectual property filings

Business

Development:

Regulatory:

• Leverage data mining

technology to access

novel data sources

• Standardize, collate,

and link data sources

• Execute Lumleian’s

proprietary analytical

models

Universe of Public

Information1

• 30+ clinicians and

Ph.D. scientists

- Focused by area

of expertise

• 5 Ph.D. economists

and statisticians

Expert Validation

and Decision Support

5

Our efficient platform and our expertise based teams enable us to both deliver the highest

quality product and tailor our offer, to specific client needs: Either custom decision support or

more standardized research and analytics, e.g. disease state primers.

Decision

Support

• Clinical strategy

• Portfolio optimization

- Pre-Clinical

- Clinical

• Transaction support

- In licensing

- Out licensing Disease

State Primers

Proprietary

Analytics

• Asset valuation

• Epidemiologic forecasts

• Industry benchmarks

- Commercial

- Clinical Development

• Patient segment

valuations

• Promotional

response models

- Healthcare professional

- Direct to consumer

• Royalty monetization

Functional

Drill Downs

• Real-time clinical

data

- Trial strategies

- Results

• In-licensing

assessments

- Pre-clinical

- Clinical

• Preliminary

due dilligence

- Scientific

- Clinical

- Commercial

• Disease overview

and care paradigm

• Clinical development

pipeline

• Commercial

landscape Customized

Standardized

7

6

What is Lumleian’s disease state primer?

What information is included in a disease state primer?

• Lumleian’s objective and fact-based perspective on the relative attractiveness of investing in a given disease state • Disease overview and care paradigm

- Etiology, Diagnosis and patient segmentation, Global epidemiology, Treatment algorithm, Clinical evidence, Emerging care paradigm • Clinical Development Pipeline

- Validated industry pipeline for all assets in clinical development, Select mechanism of action profiles, trial designs and evidence • Commercial landscape

- Global, US, EU, Japan market and brand revenue, Pipeline forecasts, US growth decomposition, Promotional spend and messaging

What disease states are planned for 2013? • Autoimmune: Inflammatory Bowel Disease, Lupus, Multiple Sclerosis, Psoriasis, Rheumatoid Arthritis • Cardiovascular: Hyperlipidemia • Central Nervous System: Alzheimer’s Disease, Depression, Pain, Schizophrenia • Endocrine: Type II Diabetes, Obesity • Infectious Disease: Gram-Negative Bacteria, Hepatitis C Virus • Oncology: Breast, Colorectal, Leukemia(s), Lung, Lymphoma(s), Melanoma, Ovarian, Pancreatic, Prostate • Pulmonary: Chronic Obstructive Pulmonary Disease, Idiopathic Pulmonary Fibrosis

Are disease state primers real-time, based on the latest validated scientific, clinical, and commercial data? • Quarterly primers are validated by our team: 30+ clinicians and Ph.D. scientists, 5 Ph.D. economists and statisticians • Primers are available at the end of quarter, incorporating new commercial and clinical data from the previous quarter

- Particulary dynamic disease states are updated around key medical conferences, e.g. HCV post-EASL in April and post-AASLD in November

Do we create specific disease state primers and provide more in-depth functional information? • Yes, we plan to add disease states throughout ’13, per client interest • Yes, we are developing deep drills by function, e.g. Discovery, Clinical development, Business development, Commercial

Why did we create our disease state primers? • We were frustrated by having to repeatedly validate, standardize, and collate pipeline and commercial data • Portfolio optimization requires a standard framework to compare “apples to apples” investment decisions across disease states • Our primers began as a training tool; We require every decision scientist create one from scratch before supporting clients

7

Source: Lumleian perspective

Executive Summary: Type II Diabetes falls at the intersection of many conditions, and is

associated with a number of serious co-morbidities; Substantial need exists for agents able to

provide additional benefits, including weight loss and cardio-protection.

• The global

Disease

Overview and

Care Paradigm

• Type II Diabetes is a chronic, multifactorial condition with a number of serious comorbidities, including hypertension, dyslipidemia

and hyperglycemia; Type II Diabetes accounts for >90% of the total diabetes patient population

• Type II Diabetes necessitates a wide variety of treatments to adequately control the core hyperglycemic condition and the host of

comorbidities and complications - Many therapeutic options are available for Type II Diabetes, including three key classes considered first and second line treatments

(Biguanides, Sulfonylureas, Glitazones)

- Subsequently, four classes of anti-diabetic agents are commonly used in third line prior to Insulin (DPP-IV Inhibitors, GLP-1 Agonists, α-

Glucosidase Inhibitors, and Glinides), although use earlier in the paradigm is growing

- DPP-IV fixed-dose combinations have also become an important treatment option and are providing branded agents with a foothold in

earlier lines of treatment

Clinical

Development

Pipeline

• Lumleian validated 107 assets in clinical development, the majority of which have MoAs similar to those of currently marketed agents: - DPP-IVs, GLP-1s (as mono therapy and in combination with Long-Acting Insulin), and Glitazones are the most common mechanisms in the

clinic, but we believe pipeline assets will likely offer only incremental “clinical” benefit over marketed products

- That said, new formulations will likely provide significant patient benefit; e.g., once-weekly GLP-1 Agonists (e.g. Bydureon, Dulaglutide, and

Syncria) and combination DPP-IV/statin therapies (e.g., MK-0431E) which offer a single co-pay and likely improved real-world

control/compliance

• Although novel approaches to treat Type II Diabetes are in clinical development, limited knowledge exists about their side effects and

efficacy attributes over recently launched agents - Canagliflozin’s Complete Response Letter in January has increased vigilance regarding the follow-on SGLT2 Inhibitors (Empagliflozin,

Dapagliflozin) and the first SGLT1/2 dual inhibitor (LX4211)

• Avandia-related safety concerns, leading to changes in trial design to permit evaluation of macro-vascular event risk, has resulted in

longer, larger, and more costly clinical trials and post-marketing requirements

• Substantial need exists for agents able to provide additional benefits, including weight loss, cardio-protection, reduced micro-vascular

complications, and durability; these agents will need clean profiles as has been made clear by recent FDA decisions, e.g. Galvus,

Bydureon, Dapagliflozin

Commercial

Landscape

• Global ‘12 brand revenue for non-Insulin drugs in this class was $13.9B and is forecast to grow by ~3.1% annually through ‘15 driven by

strong market growth outside of the United States and new launches globally, including follow-on DPP-IV Inhibitors, once-weekly GLP-1

Agonists and potentially, follow-on SGLT2 Inhibitors, e.g. Empagliflozin and Canagliflozin - Cost pressure will continue to drive generic (Biguanides and Sulfonylureas) use in the future, reinforcing the need for differentiation; This

will be felt most acutely in the US with the Actos LoE

- DPP-IV Inhibitors (fixed-dose combinations) have gained share significantly in the US given the label change to Actos (bladder cancer

warning), the reduction in DTP advertising associated with Actos LoE, and Dapagliflozin’s FDA Complete Response Letter last year

- GLP-1 Agonists will also gain share, and the approval of the first once-weekly formulation marketed by a large pharma (e.g. Syncria and

Dulaglutide) may be a game changer, particularly with an indication for use in combination with Long-Acting Insulin

8

Key

Questions

• Commercial Opportunity - How will late-stage pipeline agents with established mechanisms be able to achieve clinical and commercial differentiation in

a crowded market, particularly with payers and patients? Will patient convenience continue to be a key driver of market uptake?

- What will be the uptake in the US of the first once-weekly GLP-1 Agonist, and how will it compete with the DPP-IV inhibitors,

given their superior HbA1c control, safety concerns, and more convenient formulation?

- How will loss of patent exclusivity for key branded agents, e.g. Actos, impact the opportunity and entry point in the treatment

paradigm for future innovative approaches? What will be the positive spillover impact on DPP-IV Inhibitors?

• Clinical Development and Regulatory Risks - How will the global efficacy and safety requirements for novel therapies change? What will be the requirements for demonstrating outcomes

benefits and a favorable safety profile?

- What additional challenges exist that could pose trial and regulatory risks for sponsors looking to develop novel agents in this space?

Lumleian’s

Perspective

• Commercial Opportunity: The Type II Diabetes market represents an attractive long-term opportunity for companies willing

to dedicate resources to satisfy regulatory requirements and compete in a crowded market increasingly driven by patients and payors - The Type II Diabetes market will continue to grow, particularly in the mid-to-long-term, given the likelihood that large pipelines will support

future innovation; In the near term, growth will be driven largely outside of the United States

- In the US, significant opportunity exists for the DDP-IVs to gain share absent Actos marketing post-LoE; further, Actos safety concerns (e.g.

bladder cancer) put payors in check and near-term we see the US as highly attractive for Januvia, Onglyza and Tradjenta • United States ‘12 brand revenue was ~$8.0B and is forecast to decline in ’13 due to Actos LoE; Thereafter, the market is forecast to grow by an

~5.8% CAGR driven by the uptake of marketed and pipeline DPP-IV Inhibitors and GLP-1 Agonists

• We posit this uptake (consensus Wall Street estimates) is understated and believe DPP-IV share gains will be more aggressive given substantial

marketing investment, Actos LoE and safety concerns, and Dapagliflozin’s Complete Response Letter

- Guidelines will continue to influence payer coverage, enabling entry of new premium-priced agents able to drive guideline

acceptance through clinically meaningful differentiation

- Payers are increasingly looking for relevant cost-benefit metrics (e.g., long-term mortality) over surrogate markers (e.g. HbA1c), placing a

premium on clinical outcomes data from trials

• Clinical Development and Regulatory Risk: FDA will necessitate long-term safety requirements and strong clinical trial design - Inclusion of more high-risk and better-controlled patients with lower baseline HbA1c levels will also make it more challenging to

demonstrate significant benefits for novel agents

- The majority of future market growth in 2020 and beyond will be dependent upon successful development of novel classes able to achieve

significant differentiation beyond HbA1c with clean safety profiles

- Leaders in Type II Diabetes need to pursue multiple clinical development programs, including established and innovative mechanisms, to

ensure continued presence and significant future market share; We see the market as particularly attractive for entrenched players

What are the key questions for 2013?

9

0

1

2

3

4

5

Level of Unmet Need Likelihood of Technical Success Regulatory Impetus Commerical Attractiveness Required Investment

Source: Lumleian perspective

Type II Diabetes may offer significant returns for a company willing to make multiple high-risk/reward

investments – given generic availability, the regulatory environment, and need to invest heavily in

clinical development and marketing; We see it as particularly attractive for entrenched players to

invest in marketing and Phase IV studies; Strong regulatory capabilities are a requisite.

Average

Type II Diabetes: Relative Attractiveness of Greenfield Investment in Late Stage Clinical Development

High

Low

Type II

Diabetes

Required

Investment

Phase III Investment

• ~3,000 patients in 2 trials

• 3-5 years duration

• Show CV events including

CV mortality

Commercial Spend

• In 2012, the average brand

spent ~$20 M a month on

promotion - Healthcare professional

(86% of spend)

- Direct to consumer

(14% of spend)

• DTC investment will likely

be important to educate

patients on HbA1c control,

e.g. once weekly GLP-1s

Phase IV Investment

• Current and future trials

will need to show CV

events and mortality - Trial and regulatory costs

could exceed $500 M for

a single asset

Level of

Unmet Need

Clinical Unmet Need

• High, focused on targeting

weight loss, specific

physiology, durability, and

greater standalone

efficacy

Global Epidemiology

• ~312 M prevalence ‘13

• ~2.1% CAGR ‘12-’17

Disease Burden

• Economic cost of $150-

$200B annually (US)

• Type II Diabetes is a major

cause of mortality and

results in 240,000 deaths

(US)

Significant Co-morbidities

• Type II Diabetes falls at

the intersection of many

conditions

Commercial

Attractiveness

Market Size

• ~$21.0 B market in ’12

Global Epidemiology

• ~312 M prevalence ‘13

• ~2.1% CAGR ‘13-’18

Market Expansion

• Significant opportunity

to penetrate globally,

e.g. DPP-IVs and GLP-1s

Generic Penetration

• ~70% TRx in US

• US/EU LoEs through ’15

- Actos (10/12)

• This creates a significant

opportunity for the DDP-

IVs absent Actos

marketing

- Actos safety concerns

put payors in check

Competitive Launches

• 20 Ph. III /US Reg. assets

• Dapagliflozin Complete

Response creates

opportunity for DPP-IVs

Likelihood of

Technical Success

Etiology

• Improved understanding

of complex physiology

Historic Phase III Failures

• Taspoglutide (Roche)

• Dutogliptin (Forest)

- Terminated

Clinical Challenges

• Improved HbA1c is

closely tied to

increased cases of

hypoglycemia

Differentiation vs. Existing

Therapies

• Syncria vs. Victoza in

its first Phase III trial

Target Patient

Populations

• Need to target patients

with lower baseline

HbA1c that are better

controlled

Regulatory

Environment

Clinical Unmet Need

• Significant interest in

targeting co-morbidities

such as weight loss and

CV disease

Historical Precedents

• Intense focus on long-

term safety and CV risks

post-Avandia

withdrawal

• Approval delays

resulting in new, longer

safety studies to satisfy

FDA concerns (e.g.,

Galvus, Bydureon,

Dapagliflozin)

• Challenging to show

significant and durable

efficacy improvements

Advocacy

• Highly active advocacy

but less-involved

patient population

10

Table of Contents

Slide Number



• 3 – 6

• 7 – 9






11

• 12

• 13

• 14

• 15 – 21

• 22




• GLP-1 Agonists


• PPAR Modulators




• GPCR Agonists





24

• 25

• 26 – 29

• 30 - 31

• 32 - 35

• 36 - 37

• 38 – 39

• 40

• 41 - 42

• 43

• 44

• 45

• 46

• 47

• 48-50





52

• 53 – 57

• 58

• 59 – 61

• 62 – 64


• Lumleian Team

• 66 – 67

• 68 – 69

11

Executive Summary: Disease Overview and Care Paradigm

• The global

What is Type II

Diabetes?

• Type II Diabetes is a chronic, multifactorial condition, with a number of serious comorbidities,

including hypertension, dyslipidemia, and hyperglycemia

- Type II Diabetes accounts for >90% of the total diabetes patient population

What is the

disease burden?

• Type II Diabetes is a major cause of mortality and resulted in 240,000 deaths in the US in 2007

• Type II Diabetes is a monumental public health problem, costing $150-200 B annually in the US

- A significant portion of costs are related to treating serious co-morbidities and complications, as well as poor

management of the underlying condition that can lead to emergency hospitalization

What is today’s

care paradigm?

• Many therapeutic options are available for Type II Diabetes, including three key classes that constitute

the first and second line standard of care treatments: Biguanides, Sulfonylureas, and Glitazones

• Four additional classes of anti-diabetic agents constitute most third line treatments prior to Insulin:

GLP-1 Agonists, DPP-IV Inhibitors, α-Glucosidase Inhibitors, and Glinides

• Treatment is typically conducted in a step-wise fashion, with later lines of therapy added to earlier

treatments in order to maintain HbA1c control

- Although there is general consensus regarding the basic treatment paradigm, physicians exhibit varying willingness

to prescribe more advanced therapies in earlier lines of therapy

- Insulin use in earlier lines of therapy is increasing; This is more common in Europe vs. the US

What is the

emerging care

paradigm?

• Prescribers are likely to initiate proven generics; however, novel agents with clean safety profiles

will continue to gain traction earlier in the treatment paradigm

- Novel combination drugs, such as Janumet and Kombiglyze XR, offer relatively safe options for patients whose

HbA1c is inadequately controlled with Metformin alone and will continue to gain market share

• Combination formulations with agents treating comorbid conditions (e.g. Juvisync) offer patient convenience

and lower co-pays to patients filling multiple prescriptions

• Uptake of follow-on GLP-1 Agonists with once-weekly formulations will be increasingly driven by consumers, and

penetration of follow-on GLP-1 Agonists is a “wild card”

- Physicians will tend to be less aggressive with HbA1c targets in accordance with the outcomes in the ADVANCE

trials, which suggest that achieving near-normal blood glucose did not alter risk for major CV outcomes

12

Yes No Sources: American Diabetes Association, Practice guideline for the treatment of Type II Diabetes (2008)

What is Type II Diabetes?

Description

• Type II Diabetes is a metabolic disorder that is characterized by high

blood glucose in the context of Insulin resistance and relative Insulin

deficiency

- Common comorbidities include: Heart attack(~12%), obesity(~35%), kidney failure

(~4%), diabetic retinopathy (7%)

Etiology

• Tissue cells not responding appropriately to Insulin

- Genetic linkages exist via Insulin receptor-mediated facilitation of glucose

absorption and metabolism

- Trauma, infections or effects of certain drugs may also induce Type II Diabetes

- Unhealthy diet and obesity are the primary risk factors

Symptom

Progression

• Classic symptoms are polyuria (frequent urination), polydipsia

(increased thirst), polyphagia (increased hunger), fatigue and weight

loss

• Associated with an increased risk of cognitive dysfunction and dementia

• Complications of Type II Diabetes can happen in the eyes (glaucoma,

retinopathy), foot (neuropathy, ulcers), kidney (kidney failure) and skin

(skin infections)

Disease

Burden

• Type II Diabetes is a major cause of mortality and resulted in 240,000

deaths in the US in 2007

• Type II Diabetes is a significant public health problem, and costs are

estimated to be $150-200B annually in the US

- Costs are associated with the numerous severe complications and comorbidities

associated with the disease, as well as inadequate management leading to the

need for emergency hospitalization

2. Is Type II Diabetes a primary cause of mortality?

7. Where is Type II Diabetes treated, commonly?

Yes No

Out

Patient

Inpatient

Hospital

Long Term

Care

Symptom

Relief

Disease

Treatment

Disease

Cure

3. Is Type II Diabetes an acute or chronic disease?

Acute Chronic

6. Which specialties treat Type II Diabetes,

commonly?

5. What is Type II Diabetes’ s treatment goal?

8. Who pays for Type II Diabetes care (Rx),

commonly?

3rd party Cash CMS

PCP Endocrine Nephrology

4. Is Type II Diabetes a communicable disease?

Yes No

1. Is Type II Diabetes’s etiology well understood?

Yes No

9. Does Type II Diabetes impact a special

population?

13

Sources: American Diabetes Association

Currently, Type II diabetics are diagnosed by primary care physicians and treated in the primary

care setting or by an endocrinologist; Nurse educators and lifestyle trainers help patients with

daily management, while other specialists are involved when complications arise.

Diagnosis and Referral Pathway

Key:

Specialists for complications

Chronic management

Patient

Primary Care

Physician

Nurse Educator

Lifestyle Program

Endo- crinologist

Other

Specialist

Diagnosis (Current)

• Patients present with frequent urination, excessive thirst, and

blurred vision; most, however, present no symptoms in early

stages

Referral Pathway (Current)

• Primary Care Physician: primary in diagnosis and patient

management

• Nurse Educator:

- Registered nurse (RN) with special training and background

in caring for and educating patients on diabetes daily

management

• Endocrinologist:

- Specialized training and experience in pharmacological

diabetes treatment, teaching patients with lifestyle program

and guiding nurse educators for daily care

- Endocrinologists also refer patients to other specialists for

the treatments of diabetic complications

• Other Specialist:

- Podiatrist: trained to treat feet and problems of the lower

legs for anyone with diabetes, which can cause nerve

damage in the extremities (neuropathy)

- Nephrologist: trained to treat end-stage renal disease,

associated with diabetic nephropathy

- Ophthalmologist/Optometrist: trained to treat eye

complications resulted from diabetic blood vessel damage

1

2

3

14

25.6 35.2 52.8 64.2 8.9

11.7

204.3

315.5

291.6

426.6

0

100

200

300

400

500

600

2010 2030

Sources: IDF Diabetes Atlas, fifth edition, 2011, International Diabetes Federations; American Diabetes Association, Practice guideline for the

treatment of Type II Diabetes (2008)

Notes: Global incidence and prevalence estimates exclude undiagnosed Type II Diabetes

Global Type II Diabetes prevalence was ~290M in ‘10, with an incidence of ~12.9M; Prevalence

is forecast to grow by ~2.1% to ~536M in ’30; US ’10 prevalence was ~25.6M in ‘10, with

incidence of ~1.9M; Obesity and aging are primary risk factors.

Moderate

Type II Diabetes Global Prevalence (M) Type II Diabetes US Prevalence by Patient Segment (M)

5.2 7.1

13.4

18.5

7.0

9.6 25.6

35.2

0

10

20

30

40

2010 2030

CAGR

(‘11-’30)

Mild:

1.5%

Severe:

Epidemiologic Studies: Solid bars Lumleian Estimate: Hashed bars

2010 Type II Diabetes Global Incidence (M)

Total=12.9M

• Weight: Obesity is the dominant risk factor with BMI over 30

• Age: Risk doubles every 5 years after the age of 45

• HDL cholesterol level: lower than 35 mg/dl will double the risk

of diabetes

• Blood pressure: Greater than or equal to 140/90 mmHg

• Genetics: Risk significant increase with a Type II Diabetes family

history

- Strong correlation with many metabolism-related genes

• Sedentary lifestyle: Exercising fewer than three times a week

• Race: Diabetes occurs more often in Hispanic/Latino

Americans, African-Americans, Native Americans, Asian-

Americans, Pacific Islanders, and Alaska natives

• Gestational Diabetes: Women who are diagnosed with

gestational diabetes have a higher risk of developing Type II

Diabetes later in life

Primary Risk Factors

EU:

1.6%

JP

RW:

CAGR

(’11-’30)

2.1%

US:

1.0%

1.3%

2.3%

WW:

1.2%

Moder

ate:

2.0%

Secondary Risk Factors

1.9 2.1

0.3

8.6

0.0

1.5

3.0

4.5

6.0

7.5

9.0

10.5

US EU JP RW

15

Diagnosis:

Treatment:

First line:

Second line:

Third line:

Screening and Diagnosis (Current)

• Screening is based on blood tests of glycated hemoglobin (HbA1c)

level, a reading of greater than 6.5% is indicative of Type II

Diabetes

• Frequent HbA1c tests, in a fasting state, are used as a diagnostic

to evaluate disease control, progression and severity

Treatment (Current)

• Existing treatments provide symptomatic relief by improving

Insulin function and sensitivity

• First line: Metformin and Sulfonylureas are the first line choices

for moderate diabetic patients - Biguanides improve hyperglycemia primarily by suppressing glucose

production in the liver, e.g. Glucophage (Metformin)

- Sulfonylureas lower blood sugar by stimulating the release of Insulin

from pancreatic beta cells and by inducing increased activity of

intracellular Insulin receptors, e.g. Amaryl (Glimepiride), Prandin

(Repaglinide)

• Second line: DPP-IV Inhibitors, GLP-1 Agonists, and Glitazones are

used as second line agents for severe diabetic patients and

moderate patients; DPP-IVs work by increasing the secretion of

Insulin and suppress the release of glucagon in the pancreas - DPP-IV Inhibitors: Januvia (Sitagliptin), Onglyza (Saxagliptin), Tradjenta

(Linagliptin), Nesina (Alogliptin), and Galvus (Vildagliptin) in EU

- GLP-1 Agonists: Byetta (Exenatide), Bydureon (Exenatide ER), Victoza

(Liraglutide)

- Glitazones activate PPARγ to increase Insulin sensitivity, e.g. Avandia

(Rosiglitazone), Actos (Pioglitazone)

• Third line: Insulin is used for severe diabetic patients either as

mono therapy or in combination with orals or GLP-1 Agonists

• Prognosis (Current) - Type II Diabetes is a life-long chronic disease

- Improper management leads to complications including non-traumatic

blindness and kidney failure

Mild 100<FPG<125

Severe FPG>300

Moderate 126<FPG<300

Biguanides

Sulfonylureas

Initiate

DPP-IV Inhibitors

GLP-1 Agonists

Glitazone

Add /

Switch

HbA1c >6.5%

Sources: American Diabetes Association, Practice guideline for the treatment of Type II Diabetes (2008)

Treatment selection is guided by a number of factors; Standard of care is a step-wise treatment

approach, using a variety of therapeutic options; The clinical focus is primarily on getting

patient blood glucose (i.e. HbA1c) to goal.

Insulin +/-

Oral anti-

diabetics

Diet control

Exercise

Disease Progression

16

Source: Product prescription information; Company press release

Generic Metformin continues to be the mainstay treatment in the first line setting; Glitazones

rebounded slightly following safety concerns over CV risk, but in have faced significant

headwinds over increased bladder cancer risk.

• Activates liver enzyme

AMPK, which suppresses

hepatic gluconeogenesis

• Also increases Insulin

sensitivity

• QD or BID oral

• Mediates closure of ATP-

dependent K+ channels on

β-cell membranes,

stimulating Insulin

secretion

• QD or BID oral

• Activates transcription of

genes involved in glucose

and lipid metabolism

• Also decreases Insulin

resistance

• QD oral Dosing

Safety

Mechanism

of Action

Biguanides Sulfonylureas Glitazones

(PPAR-γ Modulators)

Efficacy

• 1-2% reduction

in HbA1c

• 1-2% reduction

in HbA1c

• 0.5-1.5% reduction

in HbA1c

• No appreciable CV/

hypoglycemia risk and

mild GI side effects

• Significant concerns with

hypoglycemia and mild

weight gain

• Class stigmatized by CV

safety concerns and now

bladder cancer risks

Brands

Generic

Availability

• Glucophage (Metformin) • Amaryl (Glimepiride)

• Glucotrol (Glipizide)

• Avandia (Rosiglitazone) - Avandamet

- Avandaryl

• Actos (Pioglitazone) - ActoPlus/ActoPlus XR

- DuetAct

• Yes • Yes • Avandia (LoE 09/11)

• Actos (LoE 08/12)

17

Glitazones are still used, although the ADA downgraded them to second-line in Nov. 2008;

Avandia has been found to increase congestive heart failure rates and is not recommended in

patients with symptomatic heart failure; Actos is being investigated for increased cancer risk.

Glitazones (PPAR-γ Modulators)

Actos / Plus / XR (Pioglitazone) Avandia / Avandamet / Avandaryl (Rosiglitazone)

Sponsor • Takeda • GSK

Formulation • Tablet (15 mg, 30 mg, 45 mg) • Tablet (2 mg, 4 mg, 8 mg)

Dosing • Tablet: QD • Tablet: QD

Indications • Adjunct to diet and exercise to improve glycemic

control in adults with Type II Diabetes – 15, 30 mg QD had SSD vs. placebo on HbA1c at Week 16

(N=1,345)

– 15 mg QD in combination with Metformin or Insulin had

SSD vs. Metformin or Insulin on HbA1c at Week 16

(N=1,387, 1,214)

• Adjunct to diet and exercise to improve glycemic

control in adults with Type II Diabetes – 8 mg QD had SSD vs. placebo on HbA1c at Week 24

(N=2,315)

– 4 mg QD in combination with Metformin or

Sulfonylureas had SSD vs. Metformin or Sulfonylureas

on HbA1c at Week 24 (N=670, 4,214)

Adverse Events • Respiratory tract infection (13.2%)

• Headache (9.1%)

• Myalgia (5.4%)

• dizziness (1.7%)

• Respiratory tract infection (9.9%)

• Headache (5.9%)

• Back pain (4%)

Lumleian

Commentary

• Glitazones, including rosiglitazone, cause or exacerbate congestive heart failure in some patients

• Concerns around bladder cancer have resonated with prescribers since 2011

• Since November 2011, the REMS program for rosiglitazone has sharply restricted access to the drug.

Rosglitazone may only be dispensed in specially certified pharmacies, and may only be dispensed to

patients with evidence or documentation of safe-use conditions. Pioglitazone does not have similar safe-

use restrictions.


18

Oral DPP-IV Inhibitors have emerged as blockbusters based on their clean safety profiles, oral dosing,

and availability as fixed-dose combinations with Metformin; GLP-1 Agonists offer improved efficacy

but uptake has been hampered by pancreatitis risks and subcutaneous dosing.

Dosing

Mechanism

of Action

Safety

Efficacy

Brands

Generic

Availability

• Decreases blood glucose by

stimulating Insulin

secretion, reducing

glucagon secretion and

gastric emptying

• BID Subcutaneous (Byetta)

• QD Subcutaneous (Victoza)

• Weekly Subcutaneous

(Bydureon)

• Site reactions and nausea

• Pancreatitis

GLP-1 Agonists

• Similar secretagogue

mechanism to

Sulfonylureas, though

with different β-cell

binding site

• Oral administration

• Risk of hypoglycemia

and weight gain

Glinides

• Blocks enzymes which

modulate carbohydrate

digestion, reducing blood

glucose levels

• Oral administration

• No risk of hypoglycemia

• GI side effects

α-Glucosidase

Inhibitors

• Byetta

• Victoza

• Bydureon


in HbA1c

• 0.5-1% reduction in HbA1c • 0.5-1% reduction in HbA1c

• Repaglinide

• Nateglinide

• Acarbose

• Increases circulating

levels of endogenous GLP-

1 by inhibiting its

degradation

• QD oral administration

• Very safe profile

DPP-IV Inhibitors


in HbA1c

• Januvia/Janumet/

Juvisync

• Onglyza/Kombiglyze XR

• Tradjenta/Jentadueto

• Liovel/Nesina

• Galvus in EU

19


The DPP-IV Inhibitor class is crowded with two launched drugs and several awaiting approval;

DPP-IVs have benefitted from a relatively clean safety profile and oral dosing, given their

modest reduction in HbA1c observed in clinical trials, relative to GLP-1 Agonists.

Dipeptidyl Peptidase IV Inhibitors (Approved in the US)

Januvia (Sitagliptin) Onglyza (Saxagliptin) Tradjenta (Linagliptin)

Sponsor • Merck • Bristol-Myers Squibb

• AstraZeneca

• Boerhinger-Ingelheim

• Eli Lilly

Formulation

• Tablet (25 mg, 50 mg, 100 mg) • Tablet (2.5 mg, 5 mg) • Tablet (5 mg)

Dosing • Tablet: QD • Tablet: QD • Tablet: QD

Indications • Adjunct to diet and exercise to

improve glycemic control in adults

with Type II Diabetes – 100 mg daily had SSD vs. placebo on

HbA1c, FPG, and 2-hour PPG

(N=1,262)

– 100 mg daily in combination with

Metformin or Pioglitazone

• Adjunct to diet and exercise to


with Type II Diabetes – 5 mg QD had SSD vs. placebo on

HbA1c at Week 24 (N=1,675)

– 5 mg QD in combination with

Metformin had SSD vs. Metformin on

HbA1c at Week 24 (N=638)



with Type II Diabetes – 5 mg QD had SSD vs. placebo on

HbA1c and FPG at Week 18 (N=873)

– 5 mg QD in combination with

Metformin had SSD vs. Metformin on

HbA1c and FPG at both Week 18 and

24 (N=1,422)

Adverse

Events

• Respiratory tract infection (5.5-

6.3%)

• Nasopharyngitis (5.2-6.3%)

• Headache (5.2%)


• Urinary tract infection (6.8%)

• Headache (6.5%)

• Nasopharyngitis (5.5%)

• Hyperlipidemia (3.7%)

Lumleian

Commentary

• DPP-IV’s clean profile and availability as a fixed-dose combinations with Metformin is driving earlier usage

- Strong growth in the US, will be driven by Actos safety concerns

- Post Actos LoE, we see substantial opportunity for DPP-IVs to grow share absent Actos marketing

• New entrants will need to find clinical and/or economic differentiation to gain share

20


To date the GLP-1 Agonists have experienced slower uptake, relative to DPP-IVs, as second line

anti-diabetics due to subcutaneous dosing and pancreatitis concerns; We believe the potential

for a once weekly formulation marketed by a large pharma is significant.

GLP-1 Agonists

Victoza (Liraglutide) Byetta / Bydureon (Exenatide)

Sponsor • Novo Nordisk • Eli Lilly (Byetta) and Amylin (Bydureon)

Formulation • Subcutaneous (0.6 mg, 1.2mg, 1.8 mg) • Subcutaneous (300 mg/1.2ml, 600 mg/2.4ml, 2 mg)

Dosing • Subcutaneous: QD • Subcutaneous: BID (Byetta)

• Subcutaneous: Once weekly (Bydureon)

Indications • Adjunct to diet and exercise to improve glycemic

control in adults with Type II Diabetes – 1.8 mg QD had SSD vs. Glimepiride and placebo on

HbA1c at Week 26 (N=2,412)

– 1.2 mg QD in combination with Metformin or Insulin

had SSD vs. Metformin or Insulin on HbA1c at Week

26 (N=894)

• Adjunct to diet and exercise to improve glycemic

control in adults with Type II Diabetes – 5, 10 mg QD had SSD vs. placebo on HbA1c from baseline

at Week 24 (N=997)

– 5, 10 mg in combination with Metformin had SSD vs.

Metformin on HbA1c from baseline at Week 24 (N=1,421)

– 5, 10 mg in combination with TDZ BID had SSD vs.

Glitazones on HbA1c from baseline at Week 24 (N=879)

Adverse Events

• Nausea (28.4%)

• Diarrhea (17.1%)

• Vomiting (10.9%)

• Diarrhea (6%)

• Vomiting (2-12%)

• Hypoglycemia (3.8- 5.2%)

Lumleian

Commentary

• Although long-acting formulations will offer greater convenience, the GLP-1 class will likely continue to be

squeezed by oral DPP-IV’s in first line

• We see substantial second line opportunity for once weekly GLP-1 Agonists, before initiating a long-acting,

but uptake will require substantial patient education and we believe GSK (Syncria) and BI/ Lilly

(Dulaglutide) have the marketing heft to capitalize; Absent Lilly it will be challenging for Amylin

• Looking further into the future, we see combination GLP-1s and Long Acting Insulin as attractive, with Lilly,

Sanofi and Novo Nordisk well-positioned to market combo therapies

21


Notes: *Juvisync combines Sitagliptin and Simvastatin; MK-0431E in Phase III trials combines Sitagliptin and Atorvastatin

Fixed dose combinations are rapidly becoming an important and competitive category, enabling

branded agents with clean profiles to gain access to earlier lines of treatment by combining with

generics, e.g. Metformin and Simvastatin; These reduce co-pays and may improve compliance.

Fixed Dose Combinations

Janumet / Janumet XR* Kombiglyze XR Jentadueto

Sponsor • Merck • Bristol-Myers Squibb • Boerhinger-Ingelheim

• Eli Lilly

Formulation • Tablet (50 mg Sitagliptin/500 mg

Metformin, 50 mg Sitagliptin/1000

mg Metformin, 100 mg

Sitagliptin/500 mg Metformin)

• Tablet (5 mg Saxagliptin/500 mg

Metformin, 5 mg Saxagliptin/1000

mg Metformin, 2.5 mg

Saxagliptin/1000 mg Metformin)

• Tablet (2.5 mg Linagliptin/500 mg

Metformin, 2.5 mg/1000 mg

Metformin, 2.5 mg Linagliptin/1000

mg Metformin)

Dosing • Tablet: BID; QD (XR formulation) • Tablet: QD • Tablet: QD

Indications • Adjunct to diet and exercise to


with Type II Diabetes mellitus

when treatment with both

Sitagliptin and Metformin is

appropriate

– Low dose daily had SSD vs.

placebo on HbA1c, FPG, and

2-hour PPG (N=875)



with Type II Diabetes mellitus when

treatment with both Saxagliptin and

Metformin is appropriate

– Low dose QD in combination had

SSD vs. Metformin or Saxagliptin

alone HbA1c at Week 24 (N=638)



with Type II Diabetes mellitus when

treatment with both Linagliptin

and Metformin is appropriate

– Low dose QD in combination had

SSD vs. Metformin or Linagliptin

alone HbA1c at Week 24 (N=791)

Adverse

Events


• Diarrhea (6.2%)

• Headache (5.9%)


• Headache (6.9%)



• Diarrhea (6.3%)

Lumleian

Commentary

• The recognition of the clinical importance of aggressive initial treatment approaches will continue to drive uptake

and support use of these fixed dose combinations earlier in treatment

22

Looking forward Lumleian foresees step-wise improvement in the care paradigm near-term with

launches focused on existing mechanisms; Longer-term we see a shift in focus to poly-pharmacy

aiming to modify disease course earlier without introducing side effects.

Near-term

(1-5 years)

Long-term

(5-10 years)

• Continued dominance of generics in first-line treatment setting - Metformin difficult to displace for patient initiation

- Sulfonylureas still considered in subset of patients as important for HbA1c control

- Impending LoE for Actos will create opportunities for existing brands in combination, e.g. DPP-IV Inhibitors

• Advancement of DPP-IV Inhibitors and fixed-dose combinations vs. Glitazones in second line - Merck’s Januvia, BMS’s Onglyza and BI/Lilly’s Tradjenta continue penetration of earlier lines of therapy

- Emergence of fixed-dose combinations (e.g., Merck’s Janumet XR, BMS/AZ’s Kombiglyze XR, BI/Lilly’s Jentadueto J

• Increased role for and usage of GLP-1 Agonists, given superior HbA1c control, and once weekly

formulations, e.g. Bydureon, Dulaglutide, Syncria

• Late entrants to established classes will struggle to gain formulary placement and physician acceptance - Late entrants will struggle with third party payors who have contracts with established players

- Given the dominant focus on HbA1c, late entrants will struggle to demonstrate clinically meaningful

differentiation in a crowded marketplace

- Patient convenience and pricing will likely be key commercial differentiators for follow on agents

• Cautious uptake of the first-generation SGLT2 Inhibitors (e.g. Empagliflozin, Canagliflozin), assuming

approval, until long term safety studies contextualize increased risks of bladder and breast cancer - Critical to uptake will be the disaggregation of safety concerns as asset specific vs. class effects

• Launch of agents with novel mechanisms and unique clinical attributes and subsequent uptake - Launch of SGLT1/2 class of agents, e.g. LX4211

• Focus on poly-pharmacy as means to modify disease course while managing potential adverse events -Frame shift in patient management based on new clinical endpoints and sustained glucose control over time

-Patient-centric focus based on poly-pharmacy with disease modification as treatment objective

• Potential advent of disruptive technologies - Non-pharmacologic approaches to Type II Diabetes (e.g. beta cell transplantation, artificial pancreas, smart Insulin)

provide interesting possibilities that are the focus of much scientific research currently

23

Table of Contents

Slide Number



• 3 – 6

• 7 – 9






11

• 12

• 13

• 14

• 15 – 21

• 22




• GLP-1 Agonists


• PPAR Modulators




• GPCR Agonists





24

• 25

• 26 – 29

• 30 - 31

• 32 - 35

• 36 - 37

• 38 – 39

• 40

• 41 - 42

• 43

• 44

• 45

• 46

• 47

• 48-50





52

• 53 – 57

• 58

• 59 – 61

• 62 – 64


• Lumleian Team

• 66 – 67

• 68 – 69

24

Executive Summary: Clinical Development Pipeline

What is in the

industry’s

clinical

development

pipeline?

• We believe the robust pathological knowledge base in diabetes will support long-term innovation; The consensus view holds

that effective future treatment will require multiple drugs used in combination to address distinct pathophysiological issues

• Insulin Release Promoters dominate the industry’s late stage pipeline; Glucose Metabolism Targeting MoAs and Glucose

Uptake Targeting MoAs are also being pursued - Insulin Release Promoters include: DPP-IV Inhibitors, GLP-1 Agonists

- Glucose Metabolism Targeting MoAs include: Glucokinase Activators, PPAR Inhibitors, SIRT-1 Activators

- Glucose Uptake Targeting MoAs (SGLT1 and SGLT2 Inhibitors)

• Other approaches being pursued include Immune System Targeting MOAs, e.g. IL-1 Inhibitors, NF-kB Inhibitors and others

• Both current market leaders and potential emerging players appear to be continuing to invest in Type II Diabetes through

multiple early-stage “shots on goal”, e.g. GSK, Lilly, Merck, Novo Nordisk, Roche, Takeda

What is the

evidence for late

stage assets?

• DPP-IV Inhibitors: Nesina, a DPP-IV Inhibitor that was approved by the FDA in January ‘13, hopes to compete with three

marketed agents based on a comparable risk-benefit profile; A key differentiator is the Liovel formulation combining

Alogliptin and Pioglitazone; Actos bladder cancer concerns are a red flag - EXAMINE study (CV safety) and recent bladder cancer concerns with Actos will likely be focal points at Nesina and Liovel’s PDUFA; We are

optimistic regarding approval as mono therapy, but are circumspect regarding combination approval

• GLP-1 Agonists: A number of GLP-1 Agonists are in development, with a key point of differentiation being once a week

dosing, e.g. Syncria (GSK) and Dulaglutide (BI/LLY); Bydureon (LLY/Amylin), a once-a-week formulation of Exenatide, was

approved in January 2012; Combinations with Long-Acting Insulin are in development - Lyxumia (SNY, Zealand) filed for EMA approval in November 2011 as mono and combination therapy; Clinical data to date suggests limited

differentiation vs. marketed GLP-1s products, e.g. longer effect on post-prandial plasma glucose; A combination indication would be a

game change

- Syncria (GSK), an albumin fusion GLP-1 Agonists, failed to demonstrate superior HbA1c reduction vs. Victoza in its first Phase III clinical

trial; That said Syncria’s once weekly formulation is a key point of differentiation

- Dulaglutide (BI/LLY), also a once weekly formulation, is a fusion protein consisting of a DPP-IV protected GLP-1 Agonists linked to a

fragment of immunoglobulin G4; This is believed to increase the duration of its effect potentially creating unique synergies with Long-

Acting Insulin

• SGLT2 Inhibitors: Canagliflozin (JNJ) was approved by the FDA in March ’13; Dapagliflozin (AZ/BMS) received an FDA

Complete Response Letter due to safety issues related to breast and bladder cancer risk; mechanistic linkages underpinning

these cancer risks are not understood nor have they been theoretically substantiated.

25

Source: DeFrozo R., From the Triumvirate to the Ominous Octet: A New Paradigm for the Treatment of Type 2 Diabetes Mellitus, Diabetes, 58, 773-

795, (2009)

We believe the robust pathological knowledge base in diabetes will support long-term

innovation; The consensus view holds that effective future treatment will require multiple drugs

used in combination to address distinct pathophysiological issues.

Emerging

Consensus

• A large number of mechanisms are being investigated that will continue to provide innovation in Type II

Diabetes and drive long-term growth of the market, given the high level of unmet need globally

- Insulin Resistance (Adipokines, Insulin Signaling, Inflammatory Mediators, Nuclear Receptors)

- Adiposity (Lipolysis, Energy Homeostasis, β3-AR Activation, Immunocyte Role, FFA Binding)

- β-Cell Mass/Dysfunction (Insulin Secretion, Genetic Susceptibility, ER Stress, Amyloid Fibrosis)

- Metabolism (Gluconeogenesis, CNS Role in Metabolism, Mitochondrial Metabolism, Growth Factors)

• In his paper on the “Ominous Octet”, Dr. DeFronzo articulates the consensus view:

- First, basic effective future treatment of Type II Diabetes will require multiple drugs used in combination to correct

the multiple pathophysiological defects

- Second, treatment should be based upon known pathogenic abnormalities and not simply on the reduction in HbA1c

- Third, therapy must be started early in the natural history of Type II Diabetes, if progressive cell failure is to be

prevented

• Robust growth of pathological knowledge in diabetes is likely to yield translation of novel targets into

validated agents, in the coming years

• Although non-pharmacologic, disruptive technologies hold substantial promise, they are still in basic

research and will require technology advancement and extensive validation to reach market

- Basic research into the understanding of beta islet cell degeneration has been a major focus in diabetes research

- In order to accept β-cell impact as a significant differentiator in future Type II Diabetes agents, clinicians and

payers will require demonstrable linkages with outcomes

26

Notes: Combination drugs and formulations comprising more than one MoA are counted once in each respective row, but are not counted as more than one

asset in the column totals.

Sources: Lumleian estimates based on publicly available data from bio-pharmaceutical companies (financial statements, investor presentations, pipeline

presentations, analyst day transcripts); 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; CenterWatch

Insulin Release Promoters (e.g. DPP-IV Inhibitors and GLP-1 Agonists) and Glucose Uptake

Targeting SGLT Inhibitors dominate the industry’s late stage pipeline; Glucose Metabolism

Targeting MoAs and newer mechanisms are also being pursued.

Type II Diabetes Pipeline: Recent History

• Multiple MoAs are in the clinic, including: - DPP-IV Inhibitors

- GLP-1 Agonists

- Glucokinase Activators

- GPCR agonists

- NF-kB Inhibitors

• In recent FDA reviews and advisory panels, safety

has received notable emphasis

• Risk vs. benefit concerns have stymied multiple

submissions: - Nesina (Takeda)

- Galvus (NVS)

- Bydureon (Amylin), approved 01/12

- Dapagliflozin (BMS), Complete Response Letter 01/12

• Nesina/Liovel (Takeda) PDUFA (03/12)

• Lyxumia (SNY/Zealand) - FDA NDA filing, Q2 ’12

- Filed for approval with EMA (11/11)

• Syncria (GSK/HGS) - Top line Phase III results (US trials), H2 ’12

• Dulaglutide (BI/LLY) - The AWARD trial reads-out initial Phase III

data in 2H ‘12

Mechanism of Action Regulatory/

Phase III

(N=20)

Phase II

(N=45)

Phase I

(N=42)

Insulin /

Incretin

Modulators

DPP-IV Inhibitors 3 4 2

GLP-1 Agonists 7 6 9

GPCR Agonists 1 2 3

Glucacon Inhibitors 1 3

Others 4 1

SGLT Inhibitors 6 3 2

PPAR-γ Insulin Sensitizers 1 1 3

Non-PPAR-γ

Insulin

Sensitizers

11-β-HSD1 Inhibitors 2 1

Others 2 1

Glucose

Metabolism

Targeting

Biguanides 3 2

Glucokinase

Activators 3 2

Others 2

Immune System Targeting 1 4 1

Triglyceride Modulators 6

Others 1 5 14

Type II Diabetes Pipeline (107 Assets)

27

Mechanism of Action US Regulatory

(N=4)

Phase III

(N=16)

Phase II

(N=45)

Phase I / IND

(N=42)

Insulin /

Incretin

Modulators

Gliptins (DPP-IV

Inhibitors)

(N=8)

• Empagliflozin/Linagliptin (BI) • Omarigliptin (MRK) • SaxaDapa FDC (AstraZeneca)

• KRP-104 (Kyorin) • LEZ763 (Novartis) • SK-0403 (Kowa) • SYR-472 (Takeda)

• ARI-2243 (Arisaph) • Teneligliptin (Mitsubishi)

GLP-1 Agonists

(N=22)

• Albiglutide (GSK) • Lyxumia (Sanofi)

1

• Dulaglutide (Lilly) • Exenatide Suspension

(Weekly) (BMS) • IDegLira (Novo)

1

• ITCA 650 (Intarcia) • Semaglutide (Novo)

• CJC-1134-PC (ConjuChem) • Exenatide Suspension

(Monthly) (BMS) • Glymera (PhaseBio) • HM11260C (Hanmi) • LixiLan (Sanofi)

1

• TTP054 (TransTech)

• GSK-2374697 (GSK) • NN9924 (Novo) • NN9926 (Novo) • NN9927 (Novo) • TT-401 (Lilly)

2

• ViaDor-GLP1 (Syneron) • VRS-859 (Diartis) • ZYD1 (Zydus) • ZP2929 (BI)

2

GPCR Agonists

(N=6)

• Fasiglifam (Takeda)

• MBX-2982 (Metabolex) • Sodium taurocholate

(Satiogen)

• DS-8500 (Daiichi Sankyo) • P11187 (Piramal) • RM-493 (Rhythm)

Glucacon Receptor

Inhibitors (N=4)

• LY2409021 (Lilly)

• ISIS-GCGRRx (Isis) • TT-401 (Lilly)

2

• ZP2929 (BI) 2

Others (N=5)

• GSK2890457 (GSK) • GWP42003 (GW) • GWP42004 (GW) • DM-199 (DiaMedica)

• RG7697 (Roche)

Glucose Uptake

Targeting

SGLT Inhibitors

(N=11)

• Canagliflozin/IR

Metformin FDC (JNJ)3

• Empagliflozin (BI)

• Canagliflozin/XR Metformin

FDC (JNJ) 3

• Dapagliflozin (BMS) • Dapagliflozin/Metformin FDC

(BMS)3

• LX4211 (Lexicon)

• EGT0001442 (Theracos) • Ertugliflozin (MRK) • LIK066 (Novartis)

• EGT0001474 (Theracos) • GSK-1614235 (GSK)

Sources: Lumleian estimates based on publicly available data from bio-pharmaceutical companies (financial statements, investor presentations,

pipeline presentations, analyst day transcripts); 3rd party equity research reports; BioMedTracker; EvaluatePharma; Clinical Trials.gov

Notes: (1) Formulations in clinical trials combining GLP-1 Agonists and Insulins (Assets are listed twice – once in each mechanism); Insulins are not

reviewed in this primer. (2) Formulations in clinical trials combining GLP-1 Agonists and Glucacon Inhibitors (Assets are listed twice). (3)

Formulations in clinical trials combining SGLT Inhibitors and Metformin (Assets are listed twice).

Insulin release promoters and Glucose metabolism targeting MoAs account for the majority

of pipeline assets; Insulin Release Promoters include: DPP-IV Inhibitors, GLP-1 Agonists; Glucose

metabolism targeting MoAs include: Glucokinase Activators, PPAR Inhibitors, SIRT-1 Activators.

28

Notes: (3) Formulations in clinical trials combining SGLT Inhibitors and Metformin (Assets are listed twice – once in each mechanism).

(4) Formulations in clinical trials combining PPAR-y agonists and Insulins (Assets are listed twice – once in each mechanism); Insulins are not

reviewed in this primer.

Other approaches being pursued include Immune System Targeting MOAs (IL-1 Inhibitors, NF-kB

Inhibitors and others) and Glucose Uptake Targeting MoAs (SGLT1 and SGLT2 Inhibitors).


(N=4)

Phase III

(N=16)

Phase II

(N=45)

Phase I / IND

(N=42)

PPAR-γ

Insulin

Sensitizers

Glitazones

(N=5)

• Aleglitazar (Roche) • INT131 (InteKrin) • DS-6930 (Daiichi Sankyo) • DSP-8658 (Dainippon) • PPAR-y agonist (Adamed)

4

Non-PPAR-γ

Insulin

Sensitizers

11-β-HSD1 Inhibitors

(N=3)

• LY2523199 (Lilly) • BMS-770767 (BMS)

• BI 135585 (BI)

Others (N=3) • MSDC-0602 (Metabolic)

• S-707106 (Shionogi)

• ISIS-PTP1BRx (Isis)

Glucose

Metabolism

Targeting

Biguanides (AMPK

Activator) (N=5)

• Canagliflozin/IR Metformin

FDC (JNJ) 3

• Canagliflozin/XR Metformin

FDC (JNJ)3

• Dapagliflozin/Metformin FDC

(BMS)3

• Imeglimin (Poxel) • NewMet (Elcelyx)

Glucocorticoid

Receptor (N=1)

• ISIS-GCCRRx (Isis)

Glucokinase Activators

(N=5)

• AMG 151 (Amgen) • GK1-399 (Forest) • PF-04937319 (Pfizer)

• DS-7309 (Daiichi Sankyo) • ZYGK1 (Zydus)

Others (N=1) • GSK-2330672 (GSK)

Immune

System

Targeting

Interleukin Inhibitors

(N=4)

• Ilaris (Novartis) • AC-201 (TWi) • GSK1070806 (GSK) • T2-18C3 (XBiotech)

NF-κB Inhibitors (N=1) • Triolex (Harbor)

Others (N=1) • CAT-1004 (Catabasis)



29

Other approaches being pursued include Immune System Targeting MOAs (IL-1 Inhibitors, NF-kB

Inhibitors and others) and Glucose Uptake Targeting MoAs (SGLT1 and SGLT2 Inhibitors).


(N=4)

Phase III

(N=16)

Phase II

(N=45)

Phase I / IND

(N=42)

Triglyceride Modulators (N=6)

• BMS-823778 (BMS) • DS-7250 (Daiichi Sankyo) • ISIS-APOIIIRx (Isis) • LIM-0705 (Limerick) • RVX-208 (Resverlogix) • SLx-4090 (Nano)

Others (N=10)

• Ranexa (Gilead)

• Androxal (Repros) • BGP-15 (N-Gene) • PAZ320 (Boston) • Qsymia (Vivus) • Revascor (Teva)

• Cellonis stem cell therapy

(Cellonis) • Daliresp (Forest) • HIP2B (CureDM) • KDT501 (KinDex)

Undeclared (N=10)

• AC165198 (BMS) • AMG 876 (Amgen) • BVS857 (Novartis) • LY2922083 (Lilly) • LY2922470 (Lilly) • LY3009385 (Lilly) • MK-8655 (MRK) • PF-05175157 (Pfizer) • PF-05231023 (Pfizer) • TRI-102 (Tris)



30

Source: May M, Novo awaits green light for diabetes drug, Nature Biotechnology, 27, 682-687, (2009)

Recently approved DPP-IV Inhibitor, Nesina, hopes to compete with three marketed agents

based on a comparable risk-benefit profile; A key differentiator is the Liovel formulation

combining Alogliptin and Pioglitazone; Actos bladder cancer concerns are a red flag.

Physiology • DPP-IV is an enzyme expressed by most cell types that

increases blood glucose and decreases Insulin

secretion through degradation of GLP-1 - In Type II diabetics, over-expression of DPP-IV disrupts

GLP-1, increasing blood glucose level

Hypothesized

Mechanism

• Inhibits DPP-IV function to protect GLP-1 and increase

Insulin secretion

Lumleian

Commentary

- Nesina, which was approved in January ‘13, shows a

comparable efficacy and safety profile vs. marketed

products

- Pioglitazone safety concerns are a red flag for Liovel, and

the FDA issued a warning for Actos in July ‘11; Use has

been suspended in some European countries, e.g. France

and Germany

- Adverse effects, including nasopharyngitis (the common

cold), headache, nausea, hypersensitivity and skin

reactions, have been observed in clinical studies

• In particular skin lesions with blistering observed in

nonhuman primate toxicology were a primary concern

for the FDA in issuing Galvus (NVS) a complete response

US Reg. / Phase III Phase II Phase I

• Omarigliptin (MRK)

• SaxaDapa FDC (AstraZeneca)

• Empagliflozin/Linagliptin (BI)

• SK-0403 (Kowa) • KRP-104 (Kyorin) • SYR-472 (Takeda)

• ARI-2243 (Arisaph) • Teneligliptin (Mitsubishi)

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Clinical Results (Phase III)

Efficacy: • Significant mean change from baseline HbA1c levels (p<0.001), for both 12.5 mg and 25 mg Nesina doses

vs. placebo

• HbA1c was reduced by more than 7% in 47% (12.5 mg) and 44% (25 mg) patients treated with Nesina

• Reduced effectiveness at 12.5mg and 25mg QD is modest and in line with the class

Safety: • In all mono therapy and combination Phase III studies, Nesina was well-tolerated, however CV data did not meet FDA

guidelines, largely due to short Phase III trial length

Lumleian Commentary: • The FDA is requiring five postmarketing studies for Nesina: a cardiovascular outcomes trial; an enhanced

pharmacovigilance program to monitor for liver abnormalities, serious cases of pancreatitis, and severe

hypersensitivity reactions; and three pediatric studies under the Pediatric Research Equity Act (PREA), including a

dose finding study and two safety and efficacy studies, one with Nesina as a mono therapy and one with Nesina and

metformin.

Phase II Program (Completed) Phase III Program (Completed)

Patient Segment: • Moderate Type II Diabetes • Moderate Type II Diabetes

Studies:

(Target Enrollment)

• Single Phase II (N=265) • Two Phase III studies (N=329 and 480) and

EXAMINE study of CV events ongoing (N=5,400)

Comparator: • Placebo • Placebo

Dosing: • 6.25; 12.5; 25; 50; 100 mg QD • 6.25; 12.5; 25 mg QD

Duration: • 12 weeks • 16 weeks (EXAMINE study 5 years)

Primary End-Points: • Efficacy: Change from baseline in HbA1c • Efficacy: Change from baseline in HbA1c

• CV events: Time from randomization to the occurrence

of the primary major adverse cardiac events

Secondary End-Points: • Efficacy: Change from baseline in HbA1c

• Efficacy: Change from baseline in fasting plasma glucose

• Efficacy: Change from baseline in HbA1c


• Efficacy: Change from baseline in body weight

Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; FDA.gov

After a long delay, the FDA approved the oral DPP-IV inhibitor Nesina (Takeda) for the

treatment of adults with Type-2 Diabetes, as well as two products combining Alogliptin with

other anti-diabetic drugs, Metformin and Pioglitazone.

32

Physiology • GLP-1 is a peptide secreted by intestinal L cells that

regulates glucose metabolism in multiple ways: - Increases Insulin secretion

- Increases Insulin sensitivity

- Decreases food intake by increasing satiety

• In Type II diabetics, GLP-1 levels are not sufficient

to maintain normal Insulin and blood glucose levels

Hypothesized

Mechanism

• Activates GLP-1 receptors to stimulate Insulin

secretion and to increase Insulin sensitivity;

Complementary to Long Acting Insulin

Lumleian

Commentary

• In June ‘13, the NIH ran a workshop to examine the

safety of several GLP-1 inhibitors and whether a

definitive link can be established to acute

pancreatitis and pancreatic cancer. Concerns about

this were raised by recent studies which have

generated considerable controversy. The outcome of

the workshop was inconclusive, but the FDA may want

further studies.

Sources: Barnett A. Lixisenatide: evidence for its potential use in the treatment of type 2 diabetes. Core Evid. 2011; 6: 67–79.

Notes: *GLP-1 in combination with Long Acting Insulin is being pursued and Lumleian’s commentary on this synergistic approach is addressed in our

Type 1 Diabetes primer, which focuses primarily on Insulins. Lyxumia’s EMA regulatory package includes a study with Lantus, and both Lilly and

Novo have formulations in late stage trials combining GLP-1 Agonists and Long-Acting Insulins

A number of GLP-1 Agonists are in development, with a key point of differentiation being once-

a-week dosing, e.g. Syncria (GSK) and Dulaglutide (BI/LLY); Bydureon, (Amylin) a once-a-week

formulation of Exenatide, was approved in 2012; Combinations with Insulin are in development.


• Albiglutide (GSK) • Lyxumia (Sanofi) • Exenatide Suspension

(Weekly) (BMS) • Dulaglutide (Lilly) • ITCA 650 (Intarcia) • Semaglutide (Novo) • IDegLira (Novo)

• Exenatide Suspension (Monthly)

(BMS) • CJC-1134-PC (ConjuChem) • HM11260C (Hanmi) • Glymera (PhaseBio) • TTP054 (TransTech) • LixiLan (Sanofi)

• VRS-859 (Diartis) • GSK-2374697 (GSK) • NN9924 (Novo) • NN9926 (Novo) • NN9927 (Novo)

• ViaDor-GLP1 (Syneron) • ZYD1 (Zydus) • ZP2929 (BI) • TT-401 (Lilly)

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Efficacy: • Showed non-inferiority in HbA1c reduction from baseline, compared with Byetta twice-daily

• Lyxumia plus Long-Acting Insulin (Lantus) had a significantly greater HbA1c decrease compared with the placebo group

(p<0.0001) after 24 weeks to a mean value of 6.96% - A significantly higher percentage of patients in the Lyxumia arm achieved target HbA1c < 7.0% vs. placebo

- Significantly improved 2-hour post-prandial glucose with a mean difference of -3.16 mmol/L (p<0.0001) vs. placebo

Safety: • The most common adverse events were mild and transient nausea and vomiting, similar to the marketed drugs

• Significantly fewer patients with Lixisenatide reported hypoglycemic events vs. patients with Byetta

Lumleian Commentary: • Sanofi filed an NDA for Lixisenatide in February 2013 - The 11 GetGoal clinical trials supporting the lixisenatide NDA filing studied the benefits and risks related to using lixisenatide

as mono therapy, in combination with oral anti-diabetic medicines, in combination with basal insulin and versus twice-daily

exenatide

• Lyxumia’s profile is marginally differentiated by its longer effect on post-prandial plasma glucose - Approval in combination with Long Acting Insulin would be a point of differentiation, give patients will inevitably be

transitioned to Insulin, and substantial opportunity exists for combination use in patients currently treated with Insulin

Phase II Program (Completed) Phase III Program (Completed)

Patient Segment: • Moderate to severe Type II Diabetes • Moderate to severe Type II Diabetes

Studies:

(Target Enrollment)

• Single Phase II mono therapy (N=148) • 12 completed Phase III of mono therapy (N=639) or combination with

Actos, Metformin and Long-Acting Insulin

Comparator: • Placebo • Placebo; Insulin; Oral anti-diabetics; Byetta

Dosing: • 10; 20 µg QD • 20 µg QD

Duration: • 7 weeks • 24 weeks


Secondary End-Points: • Efficacy: Postprandial plasma glucose (PPG)

• Satiety markers: PYY-36, Oxyntomodulin

and Obestatin



Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; Christensen M, Lixisenatide, an novel

GLP-1 receptor agonist for the treatment of type 2 diabetes, Idrugs, 12(8) 503-13, 2009

Lyxumia (SNY, Zealand) won EU approval in February 2013 as mono and combination therapy;

Clinical data to date suggests limited differentiation vs. marketed GLP-1 products, e.g. longer

effect on post-prandial plasma glucose.

34

Clinical Results (Phase II and III)

Efficacy: • Patients administered Syncria experienced a 0.78% reduction in HbA1c vs. Victoza’s 0.99% reduction and demonstrated

prospectively defined non-inferiority but not superiority over Victoza

• In a Phase II trial vs. Byetta, Syncria produced dose-dependent reductions in HbA1c with 30 mg weekly, 50 mg bi-weekly, and

100 mg monthly reductions of 0.9%, 0.8% and 0.9% respectively (p<0.05) vs. placebo of 0.2% and Byetta of 0.5%

• Weight loss (0.9 to 1.8 kg) was observed across all doses studied

Safety: • Syncria was generally well-tolerated with no significant cardiovascular adverse effects observed

• The most frequently reported adverse events included nausea, vomiting, and headache, in line with class norms

Lumleian Commentary: • Prospective incorporation of FDA guidelines on CV risk into Phase III trial design should enhance the NDA submission

• In a trial in its Phase III Harmony program, Syncria significantly reduced glycated hemoglobin (HbA1c) levels and proved

noninferior to preprandial insulin shots over 26 weeks. Both treatments were given on top of insulin glargine (Lantus).

• We are bullish on Syncria’s (and Dulaglutide’s) commercial prospects, particularly in the EU where GLP-1s play a larger role

in the treatment paradigm - We contend improved HbA1c control, vs. DPP-IV Inhibitors, will resonate with endocrinologists and with substantial patient

education on the importance of maintaining control, a once weekly subcutaneous formulation will be palatable to patients

Phase II Program (Completed) Phase III Program (One Finished, Seven Ongoing)


Studies:

(Target Enrollment)

• Single Phase II (N=356) • One Phase III completed (N=841, Harmony 7)

• Seven Phase III trials ongoing (N=2,965

Comparator: • Placebo, Byetta • Placebo, Victoza

Dosing: • 30; 50; 100 mg weekly • 30; 50; 100 mg weekly vs. Victoza QD



Secondary End-Points: • Efficacy: Change from baseline in fasting plasma

glucose

• Safety: Anti-Albiglutide antibody formation


• Efficacy: Change from Baseline in body weight

Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov

Syncria (GSK), an albumin fusion GLP-1 Agonist, failed to demonstrate superior HbA1c reduction

vs. Victoza in its first Phase III clinical trial; That said, Syncria’s once-weekly formulation is a

key point of differentiation.

35

Clinical Results (Phase II)

Efficacy: • Both 1 mg and 2 mg doses of Dulaglutide were significantly differentiated vs. placebo in HbA1c reduction

- No statistical difference between low-dose and high-dose group in HbA1c control was observed

- 2 mg dosing showed better efficacy in changing fasting plasma glucose level

Safety: • Dulaglutide was generally well-tolerated and the incidence of hypoglycemic episodes was not significantly different

between placebo and the treatment groups

• The most frequently observed treatment-related adverse events were nausea, diarrhea, and abdominal distension

• One patient was diagnosed with clinical pancreatitis, following the eleventh dose of Dulaglutide

Lumleian Commentary: • The AWARD trial provided the first Phase III data in October ’12; Long term cardiovascular risk remains unknown, and in an

effort to meet the new FDA new guidelines, BI/Lilly initiated a Phase III CV events trial in July 2011 with 9,655 patients

enrolling for 8 years

• We see substantial need in the market for a once weekly GLP-1 formulation, and believe BI/Lilly has the marketing muscle

to sufficiently educate patients on the benefits of improved HbA1c control; That said, BI/Lilly will likely be disadvantaged

as the third once weekly to market, behind Amylin’s Bydureon and GSK’s Syncria; Combination data with Lilly’s pipeline

insulin glargine may offer differentiation, but that is premised on a number of factors aligning

Phase II Program (Completed) Phase III Program (Ongoing)

Patient Segment: • Moderate Type II Diabetes • Moderate Type II Diabetes

Studies:

(Target Enrollment)

• Single Phase II (N=262) • Four Phase III AWARD studies (1: N=475; 2: N=755; 3: N=837

and 4: N=835); CV REWIND study (N=9,655)

Comparator: • Placebo • Placebo, Januvia, Insulin

Dosing: • 0.5; 1.0; 2.0 mg weekly • 0.25; 0.5; 0.75; 1.0; 1.5 mg weekly

Duration: • 16 weeks • 52 weeks (REWIND 8 years)


• REWIND CV Events: Time to first occurrence of CV events

Secondary End-Points • Efficacy: Change from baseline in fasting plasma glucose

• Efficacy: Percentage of achieving HbA1c < 7%


• Efficacy: Change from baseline for blood glucose values

Sources: IACD presentation (2008); Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; 2010,

American Diabetes Association's (ADA) 69th Annual Scientific Sessions

Dulaglutide (BI/LLY), also a once weekly formulation, is a fusion protein consisting of a DPP-IV

protected GLP-1 Agonist linked to a fragment of immunoglobulin G4; This is believed to increase

the duration of its effect, potentially enabling synergistic use with Long-Acting Insulin.

36

Source: www.medspace.com

Dapagliflozin received an FDA Complete Response Letter in January ‘12; Increased breast and

bladder cancer risks were core concerns; Despite this, another SGLT2 inhibitor Canagliflozin

(Johnson & Johnson) received FDA approval in March ‘13

Physiology • SGLT2 is a glucose transport enzyme responsible for

the absorption of glucose from the glomerulus, a

structure in the kidneys, into the blood

• In Type II diabetics, SGLT2-mediated glucose

absorption is a primary mechanism for maintaining

blood glucose levels

Hypothesized

Mechanism

• Inhibits SGLT2 function in the kidneys and blocks

reabsorption process to reduce blood glucose levels - Canagliflozin blocks the channel gate of SGLT2 and is

believed to inhibit up to 80% of the glucose reabsorption

- Mechanistic linkages with clinically-observed increases in

bladder cancer risks, are not understood, nor have they

been theoretically substantiated

Lumleian

Commentary

- Canagliflozin also shows significant weight loss (3-4%),

which is an attractive therapeutic benefit in diabetes

treatment, although some experts attribute this weight

loss to dehydration

- Empagliflozin (LLY) appears to improve key diabetes

parameters and also seems to meaningfully reduce weight

- The FDA declined to approve dapagliflozin (AZN/BMS) in

January ‘12, citing concerns with breast and bladder

cancer risks


• Dapagliflozin (AZN/BMS)

• Empagliflozin (BI/LLY)

• Tofogliflozin (Chugai/Roche)

• ASP-1941 (Astellas) • TS-071 (Taisho)

• ISIS-SGLT2Rx (ISIS) • RG-4929 (Roche) • GSK1614235 (GSK)

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Dapagliflozin received an FDA Complete Response Letter in January ‘12; Increased breast and

bladder cancer risks were core concerns; Despite this, another SGLT2 inhibitor Canagliflozin

(Johnson & Johnson) received FDA approval in March ‘13


Efficacy: • Dapagliflozin 2.5 mg, 5 mg and 10 mg demonstrated a statistically significant mean change in HbA1c vs. baseline - Individuals treated with Dapagliflozin also demonstrated a significant decrease in total body weight

• In combination with Metformin XR, a higher proportion of patients achieved the therapeutic glycemic response of

HbA1c < 7% and weight reduction, compared to Dapagliflozin or Metformin XR mono therapy

Safety: • Increased cancer risk (breast and bladder) and observed liver injuries were core concerns for the FDA in issuing a

Compete Response; Next steps have not been publicly disclosed - Genital infections were also more common in the Dapagliflozin treatment groups

- The most frequently reported adverse events included nausea, vomiting, and headache

Lumleian Commentary: • Given the degree of unmet need, the commercial potential in Type II diabetes, and the limited mechanistic rationale

for observed clinical adverse events, AstraZeneca/BMS remain committed to Dapagliflozin and its development.

• That said, it will be a challenge to compete with first in class drug to market Canagliflozin (Johnson & Johnson),

which gained FDA approval in March ‘13

Phase II Program (Completed) Phase III Program (11 Finished, 13 Ongoing)


Studies:

(Target Enrollment)

• 8 Phase II (Major one NCT00263276, N=385) • 11 finished Phase III (Mono therapy N=560; Total enrollment

across finished studies N=5,753)

Comparator: • Placebo, Metformin • Placebo, Metformin

Dosing: • 2.5; 5; 10; 20; 50 mg QD • 2.5; 5; 10 mg QD



Secondary End-Points: • Efficacy: Mean change from baseline in fasting

plasma glucose

• Efficacy: Proportion of subjects who achieve a

therapeutic response


• Efficacy: Change from Baseline in body weight

Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov and FDA response letter to

Dapagliflozin’s NDA application

38

Physiology • PPAR-γ is a transcriptional factor that regulates

metabolism in multiple ways, including: - Decreasing Insulin resistance

- Increasing Insulin secretion

- Decreasing fat release and circulating triglyceride levels

• In Type II diabetics, insufficient activation of PPAR-γ

is associated with increased blood glucose levels and

Insulin dysfunction

Hypothesized

Mechanism

• Activates PPAR-γ, blocking adipocyte differentiation

and NF-kB induced inflammation and increasing

Insulin sensitivity

Lumleian

Commentary

- In clinical trials, PPAR-α and γ activator, saroglitazar, was

significantly better at reducing triglycerides and LDL

cholesterol while increasing HDL cholesterol than

pioglitazone (Actos). It also significantly reduced fasting

plasma glucose and HbA1c.

- Balaglitazone, a second generation Glitazone did not

demonstrate clinical superiority vs. marketed competitors

- New PPAR activator categories, such as PPAR-α and γ

combined activators, non-Thiazolidinediones, and

partial non-Thiazolidinediones families are in clinical

development.

Source: http://ppar.cas.psu.edu/pathways.html

Besides the marketed Glitazones (Actos, Avandia), multiple second-generation PPAR Modulators

are in clinical development; First Glitazar, saroglitazar (Zydus Cadila), OK'd in India


• Aleglitazar (Roche) • INT131 (InteKrin) • DS-6930 (Daiichi Sankyo) • DSP-8658 (Dainippon)

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Efficacy: • Both Balaglitazone 10 and 20 mg showed non-inferior HbA1c and FPG control compared to Pioglitazone.

• Balaglitazone 10 mg demonstrated less water retention, less fat accumulation, lower weight/BMI gain and less bone

loss when compared to the Pioglitazone arm.

• Showed non-inferiority in HbA1c reduction from baseline, compared with Byetta twice-daily

Safety: • The most common adverse events were mild and transient nausea and vomiting, similar to Actos

Dose Response: • Balaglitazone showed similar efficacy effects at 10 and 20 mg level, but improved water retention at 10 mg level

Lumleian Commentary: • Balaglitazone was terminated by Novo Nordisk in 2003, due to its limited risk-benefit profile.

• Balaglitazone’s efficacy profile will likely not be differentiated and it will be challenged to compete

• If it maintains a clean safety profile, given last year’s safety concerns with Actos, it could find a niche



Studies:

(Target Enrollment)

• Single Phase II mono therapy (N=135) • Single Phase III mono therapy (N=409)

Comparator: • Placebo • Placebo; Actos 45 mg (Active Comparator)

Dosing: • 5; 10; 20; 45 mg QD • 10; 20; 45 mg QD



• Efficacy: FGP and 7-point plasma glucose profiles

Secondary End-Points: • Efficacy: Change from baseline in body weight

• Efficacy: FGP and 7-point plasma glucose profiles


• Efficacy: Change of waist and hip circumferences

Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; Henrikensen K, A comparison of

glycemic control, water retention, and musculoskeletal effects of balaglitazone and pioglitazone, European Journal of Pharmacology, 2009,

616(1) 340-345

Balaglitazone failed to demonstrate superior efficacy vs. marketed competitors, e.g. Actos, and

if taken to market would likely be challenged given the LoE for Actos; That said, if it maintains

a clean safety profile, given last year’s safety concerns with Actos it could find a niche.

40

Phase II Phase I

Sources: DeSouza C. et al. Therapeutic targets to reduce cardiovascular disease in type 2 diabetes. Nature Review Drug Discovery. 361–369 (2009)

SIRT-1 Activators are still under early stage clinical development; SRT501 (GSK) was terminated

in 2010, despite showing positive proof of concept; Kidney failures were observed in a multiple

myeloma trial.

Physiology • SIRT-1 is a transcriptional factor that regulates blood

glucose level and metabolism rate

• In Type II diabetics, decreased SIRT-1 expression and

activity reduces metabolism and increases Insulin

resistance

Hypothesized

Mechanism

• Activate SIRT-1 expression and function to increase

metabolism and glucose utilization

Lumleian

Commentary

- GSK has halted clinical trials of SRT501, despite

demonstrating statistically significant lower fasting and

post-prandial blood glucose levels; Dose response was

ambiguous (1.25 mg vs. 2.5 mg)

- Kidney failures were observed in a multiple myeloma

trial, albeit at higher doses, raising red flags

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Sources: Donath, M. et al. Type 2 Diabetes as an inflammatory disease Nature Review Immunology. 8, 101–119 (2011)

NF-kB modulators have strong anti-inflammatory effects; The future of NF-kB modulators as

anti-diabetic therapies is most likely in combination therapy with PPAR-γ modulators, given that

Triolex failed to reduce Hb1Ac levels compared to placebo as a mono therapy.

Physiology • NF-kB is a protein complex that critical for

metabolism and inflammation response

• In Type II diabetics, NF-kB over activation recruits

immune cells and triggers inflammatory response

Hypothesized

Mechanism

• Blocks NF-kB function, reducing inflammatory

response and protecting beta-cells

Lumleian

Commentary

- Aleglitazar, a dual NF-kB and PPAR-γ modulator, has

demonstrated synergistic effects on HbA1c and FPG, in

combination with a marketed PPAR-γ modulator (Actos)

- Despite its significant anti-inflammatory effects, Triolex

failed to reduce Hb1Ac levels compared to placebo as a

mono therapy

- This set-back for NF-kB modulators suggests that

combination therapy maybe their likely future direction

US Reg. / Phase III Phase II

• Aleglitazar (Roche)

• Triolex (Harbor)

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Clinical Results (Phase II)

Efficacy: • Aleglitazar reduced baseline HbA1c levels vs. placebo in a dose-dependent manner, ranging from a reduction of 0.36%

at a 0.05 mg to 1.35% at a 0.6 mg dose; Aleglitazar in combination was superior to Actos mono therapy

• At the 0.15mg dose, Aleglitazar produced a 43% decrease (minimum) in triglycerides and a 20% increase (maximum) in

HDL cholesterol

Safety: • Edema, hemo-dilution, and weight gain were observed in a dose-dependent manner

• Doses less than 0.3 mg were well tolerated, with fewer patients developing edema than those treated

with placebo, and no reported cases of congestive heart failure

Dose Response: • 0.05 to 0.6 mg showed good dose-response in efficacy study; 0.15 mg dose had the best risk-benefit profile

Lumleian Commentary: • Aleglitazar’s synergistic effect in combination with Actos is likely be due to NF-kB modulation


Patient Segment: • Mild to Moderate Type II Diabetes • Mild to Moderate Type II Diabetes

Studies:

(Target Enrollment)

• Two Phase II (N=332, N=176) • Single Phase III to test anti-diabetic effect and

cardiovascular end-points (N=7,000)

Comparator: • Placebo; Actos 45 mg QD • Placebo

Dosing: • 0.05; 0.15; 0.3 and 0.6 mg QD • 0.15 mg QD

Duration: • 16 weeks • 4.5 years

Primary End-Points: • Efficacy: Absolute change from baseline in HbA1c • Efficacy: Absolute change from baseline in HbA1c

• Safety: Effect on cardiovascular death, non-fatal

myocardial infarction and non-fatal stroke, cardiovascular

events

Secondary End-Points • Efficacy: Absolute change from baseline in FPG

• Safety: AEs, laboratory parameters

• Efficacy: Glycemic control, lipoprotein profile, blood

pressure, biomarkers of cardiovascular risk

• Safety: Tolerability and long-term safety profile

Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; Henry R, Effect of the Aleglitazar on risk

of cardiovascular disease in patients with type 2 diabetes (SYNCHRONY): a Phase II, randomized, dose-ranging study, Lancet, 200941 (1) 126-135

Aleglitazar, a dual NF-kB and PPARγ modulator, demonstrated positive effects on HbA1c

and FPG as a mono therapy and in combination with Actos; It is currently in Phase III trials

as a mono therapy.

43

Physiology • Glucokinase, an enzyme that facilitate

phosphorylation of glucose to glucose-6-phosphate,

plays an important role in glucose control • In Type II diabetics, lower level of Insulin reduce the

function of Glucokinase and reduce metabolism rate

Hypothesized

Mechanism

• Activates Glucokinase function to increase

metabolism rate and reduce blood glucose level

Lumleian

Commentary

- We do not believe Merck is actively pursing

development of its glucokinase activator:

• In patients receiving stable-dose Insulin glargine,

MK-0941 led to improvements in glycemic control

that were not sustained. MK-0941 was associated

with an increased incidence of hypoglycemia and

elevations in triglycerides and blood pressure

- Pfizer reported no safety concerns in its PF-

04991532 trial and has two Phase II trials ongoing

Sources: Al-Hasani. et al. Two Birds with One Stone: Novel Glucokinase Activator Stimulates Glucose-Induced Pancreatic Insulin Secretion and

Augments Hepatic Glucose Metabolism Molecular Intervention. 12 (2), 896–899 (2008)

As the name suggests, Glucokinase (GK) activators activate Glucokinase function to increase

metabolism rate and reduce blood glucose level; We believe Merck is no longer pursuing its

program, leaving Pfizer at the forefront with an asset in Phase II trials.

Phase II Phase I

• AMG 151 (Amgen) • GK1-399 (Forest) • PF-04937319 (Pfizer)

• DS-7309 (Daiichi Sankyo) • ZYGK1 (Zydus)

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Physiology • GPCR can be ubiquitously expressed or found in

specific organs such as the pancreas: - Increases cAMP

- Increases GLP-1

- Decreases food intake by increasing satiety

• In Type II diabetics, the GLP-1 pathway has already

shown to be a valid target for T2DM therapies

Hypothesized

Mechanism

• Activates GPCR receptors to stimulate Insulin

secretion and to increase Insulin sensitivity; also

shown to increase β-cell mass and reduce food intake

• Currently, several GPCR targets are being investigated

as potential therapies - GPR119

- GPR40

- TGR5

Lumleian

Commentary

• Amongst these novel targets, a few candidates from the

GPR agonist class are nearing late stage development.

Ability to directly modulate insulin and GLP-1 secretion

in glucose depended manner is the key trait of this class.

• GPR agonist controls hyperglycemia without

hypoglycemia, and provides weight loss advantage. They

also show complementary action with DPP-IV inhibitors.

A number of GPCR Agonists are in development, with Takeda’s Fasiglifam being the furthest

along in clinical development in Phase III trials, other companies are also developing compounds

that are currently in Phase II development (Metabolex, Satiogen)


• Fasiglifam (Takeda) • MBX-2982 (Metabolex) • Sodium taurocholate (Satiogen)

• DS-8500 (Daiichi Sankyo) • P11187 (Piramal) • RM-493 (Rhythm)

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Physiology • High levels of cortisol decreases metabolism of glucose and

increases mobilization and metabolism of fats. Decreased

metabolism of glucose contributes to increased blood

glucose levels, and increased blood fat levels contributes to

insulin resistance. Increased levels of blood glucose and

blood fats are classic symptoms of diabetes. When blood

cortisol levels are too high, insulin will not lower blood

sugar.

• The liver and kidney are the primary routes of cortisol

clearance, which is mediated by 11ß-hydroxysteroid

dehydrogenase type 2 (11ß-HSD2). Clearance is balanced by

regeneration of cortisone-derived cortisol by means of 11ß-

HSD1.

Hypothesized

Mechanism

• The 11-β-HSD1 target is an enzyme that catalyzes the

conversion of cortisone to cortisol in vivo

• The ability to decrease tissue-specific cortisol production

via inhibition of 11-β-HSD1 might represent a protective

mechanism to improve insulin sensitivity and prevent

diabetes

Lumleian

Commentary

• 11β-HSD1 inhibitors appear to be attractive research and

development products for the treatment of type 2 diabetes

because a large number of major biotechnology and

pharmaceutical companies are involved in their

development, and this pipeline, although very young,

already has 70% of products in clinical stage of

development.

11-β-HSD1 inhibitors are one of the new approaches to treating type 2 diabetes; They are

currently being investigated in Phase I and Phase II clinical trials by Lilly and BI

Pip

eline

Phase II Phase I

• LY2523199 (Lilly) • BI 135585 (BI)

46

Physiology • It is now generally accepted that over-activation of PPARγ

drives the unwanted and often unacceptable side effects

associated with the currently-approved insulin sensitizers,

which are PPARγ agonists, and emerging evidence suggests

that the potent anti-diabetic efficacy can be separated

from the ability to activate PPARγ.

Hypothesized

Mechanism

• MSDC-0602 (Metabolic Solutions) works through a newly

defined mitochondrial target called mTOT, which stands for

mitochondrial Target of Thiazolidinediones (TZDs). mTOT

functions as a molecular “sensor” and “switch” connecting

mitochondrial metabolism to important cellular functions

perturbed in age-related metabolic diseases like type 2

diabetes

• An antisense drug that inhibits the production of PTP-1B

(ISIS), a protein that negatively regulates insulin receptor

signaling. PTP-1B is responsible for turning off the activated

insulin receptor, so reducing PTP-1B enhances insulin

activity.

Lumleian

Commentary

• A 12-week study demonstrated that mTOT modulation can

deliver comparable efficacy without the liabilities of PPAR-γ

agonism that are typically observed in studies of this

duration. Longer-term studies are needed to further define

the potential of this new approach to treating insulin

resistance and to determine whether there will be

significant benefits to the use of this compound or other

mTOT-modulating molecules in the treatment of type 2

diabetes.

Glitazones (PPAR agonists) have many unwanted side effects that have severely limited their

use; There is a significant need for a safe Insulin Sensitizer to replace Glitazones; non-PPAR

insulin sensitizers could replace their use for a large proportion of diabetic patients

Pip

eline Phase II Phase I

• MSDC-0602 (Metabolic) • ISIS-PTP1BRx (ISIS)

47

Physiology • As a counterregulatory hormone for insulin, glucagon plays

a critical role in maintaining glucose homeostasis in vivo in

both animals and humans. To increase blood glucose,

glucagon promotes hepatic glucose output by increasing

glycogenolysis and gluconeogenesis and by decreasing

glycogenesis and glycolysis in a concerted fashion via

multiple mechanisms. Compared with healthy subjects,

diabetic patients and animals have abnormal secretion of

not only insulin but also glucagon. Hyperglucagonemia and

altered insulin-to-glucagon ratios play important roles in

initiating and maintaining pathological hyperglycemic

states.

Hypothesized

Mechanism

• The glucagon receptor (GCGR) is a member of the family B

of the seven transmembrane G-protein–coupled receptor

(GPCR) superfamily. Glucagon signals by binding to the

receptor, which leads to activation of adenylyl cyclase and

an increase in intracellular cAMP levels. In addition, the

GCGR also couples to an intracellular Ca2+-mediated

pathway. Activation of the GCGR results in increased

glycogenolysis and gluconeogenesis, which are responsible

for increased hepatic glucose output.

Lumleian

Commentary

• Given the key role of glucagon in elevating glycemia and

owing to the success of finding small-molecule inhibitors for

many receptors in the GPCR family, the GCGR is a clear

target for the development of small-molecule antagonists. A

number of antagonists with varying degree of potency and

structures have been reported in recent years.

Though glucagon was discovered at the same time as insulin, research on it has languished

compared with that of its cousin, and treatments have almost exclusively targeted the latter. In

the last decade, the success of incretins, has sparked a renaissance in glucagon research.

Pip

eline Phase II Phase I

• LY2409021 (Lilly) • ISIS-GCGRRx (Isis)

48

Lumleian’s opinion of relative timelines to regulatory approval and chance of success through

clinical development

Reduced p

robabilit

y o

f su

ccess

1-2 years

years 5-10 years >10 years

GPR40

Agonist Glucagon

Receptor

Inhibitor

Glucokinase

Activator

11β-HSD1

inhibitor

DGAT1

Inhibitors

SIRT-1

Activator

GPR119

Agonist

TGR5

Agonist

Recent

SGLT2

inhibitors

49

SIRT-1 Activators

• Mimic beneficial effects of calorie restriction, improve insulin sensitivity, improve glucose homeostasis

• GSK has halted clinical trials of SRT501, despite demonstrating statistically significant lower fasting and post-

prandial blood glucose levels; Dose response was ambiguous (1.25 mg vs. 2.5 mg)

• Kidney failures were observed in a multiple myeloma trial, albeit at higher doses, raising red flags

Glucokinase (GK)

activators

• High impact on glucose homeostasis because of GK sensor role in pancreatic β-cells and role in hepatic glucose

clearance and glycogen synthesis

• We do not believe Merck is actively pursing development of its glucokinase activator:

• In patients receiving stable-dose Insulin glargine, MK-0941 led to improvements in glycemic control that were

not sustained. MK-0941 was associated with an increased incidence of hypoglycemia and elevations in

triglycerides and blood pressure

• Pfizer reported no safety concerns in its two PF-04991532 trials that were completed in 2012

GPCR Agonists

• Stimulate GPCR to induce GLP-1 signaling and insulin secretion

• Amongst these novel targets, a few candidates from the GPCR agonist class are in late stage development (TAK-

875). Ability to directly modulate insulin and GLP-1 secretion in glucose depended manner is the key trait of this

class.

• GPR agonist controls hyperglycemia without hypoglycemia, and provides weight loss advantage. They also show

complementary action with DPP-IV inhibitors.

11-β-HSD1

inhibitors

• Reduce the formation of the stress hormone cortisol in the tissue

• 11β-HSD1 inhibitors appear to be attractive research and development products for the treatment of Type 2

Diabetes because a large number of major biotechnology and pharmaceutical companies are involved in their

development, and this pipeline, although very young, already has 70% of products in clinical stage of development.

Summary: Up and coming Mechanisms of Action (MoAs) in the T2DM pipeline

50

GCGR Agonists

• Inhibit the action of insulin’s antagonist, glucagon, via inhibition of the glucacon receptor (GCGR)

• Given the key role of glucagon in elevating glycemia and owing to the success of finding small-molecule inhibitors

for many receptors in the GCGR family, the GCGR is a clear target for the development of small-molecule

antagonists. A number of antagonists with varying degree of potency and structures have been reported in recent

years.

Non-PPAR insulin

sensitizers

• Increase sensitivity of tissues to insulin action without PPAR activation (side effects)

• A 12-week study demonstrated that mTOT modulation can deliver comparable efficacy without the liabilities of

PPAR-γ agonism that are typically observed in studies of this duration. Longer-term studies are needed to further

define the potential of this new approach to treating insulin resistance and to determine whether there will be

significant benefits to the use of this compound or other mTOT-modulating molecules in the treatment of Type 2

Diabetes.

Glucokinase

Activators

• Activate GK, the “glucose sensor” for the pancreas, so that insulin secretion rises with increase in blood glucose

• The massive current effort of at least 15 pharmaceutical companies to develop GKAs shows that expectations for

success in this endeavor are high. Of remaining concern are the dangers of hypoglycemia, fatty liver, and

hyperlipidemia. Available results of preclinical and clinical studies are, however, reassuring in this regard and it is

reasonable to argue that such potential side effects can be managed by designing GKAs, which are less potent than

the currently known prototypes, or by judicious dose regimens. All indications are that several GKAs now in

development will be advanced to Phase II and III trials.

Summary: Up and coming Mechanisms of Action (MoAs) in the T2DM pipeline (cont.)

51

Table of Contents

Slide Number



• 3 – 6

• 7 – 9






11

• 12

• 13

• 14

• 15 – 21

• 22




• GLP-1 Agonists


• PPAR Modulators




• GPCR Agonists





24

• 25

• 26 – 29

• 30 - 31

• 32 - 35

• 36 - 37

• 38 – 39

• 40

• 41 - 42

• 43

• 44

• 45

• 46

• 47

• 48-50





52

• 53 – 57

• 58

• 59 – 61

• 62 – 64


• Lumleian Team

• 66 – 67

• 68 – 69

52

How large is

the global market

and what growth

is forecast?

• Global ‘11 brand revenue for non-Insulin drugs was ~$13.9B and is forecast to grow by ~3.1% annually through ‘15

driven by strong growth outside of the United States and uptake of new products globally, including follow on DPP-

IV Inhibitors, once weekly GLP-1 formulations, and follow-on SGLT2 Inhibitors, e.g. Canagliflozin (JNJ) - US: United States ‘11 brand revenue was ~$8.0B and is forecast to be flat in ’12 and decline in ’13 due to Actos LoE;

Thereafter, the market is forecast to grow by an ~5.8% CAGR, driven by the uptake of marketed and pipeline DPP-IV

Inhibitors and GLP-1 Agonists • We posit this uptake (consensus Wall Street estimates) is understated and believe DPP-IV share gains will be more aggressive

given substantial marketing investment, Actos LoE and safety concerns, and Dapagliflozin’s Complete Response Letter

- EU: In the $3.2B European Union, where the GLP-1 Agonists and DPP-IV Inhibitors are more penetrated, growth in these

classes is forecast to be more moderate; Overall the EU market is forecast to grow annually by ~10.6% through ’15

- JP: In the $1.4B Japanese market, where Takeda’s Actos and Basen have a stronghold, the overall market is forecast to

grow annually by ~7.9% through ’15, with the uptake of newly approved DPP-IVs, e.g. Nesina and Liovel

- RW: Rest of World brand revenue was $1.3B in 2012 and is forecast to grow by ~8.9% between ’13 and ’15; Despite a

global epidemic, generics will likely remain the standard of care for the majority of patients outside western nations

What are launch

forecasts?

• Wall Street consensus estimates forecast that new products will generate ~$1.5B in global revenue in ‘15, driven

largely by anticipated launches for Roche’s NF-kB Modulator Aleglitazar, Sanofi’s GLP-1 Agonist Lyxumia, and Lilly’s

once weekly GLP agonist, Dulaglutide

What trends

are driving the

US market?

• In Q4 ’11 US Type II Diabetes retail revenue rose ~2.7% driven by a ~10% increase in average prices, and a shift in

product mix towards DPP-IV Inhibitors and Biguanides vs. “more costly” Glitazones; Days of therapy grew slightly

faster than total Rx volume

- Mix: The DPP-IV Inhibitors and GLP-1 Agonists now command ~12.6% share, lead by the Januvia franchise and Victoza; Share gains came at the expense of the Glitazones (Actos bladder label warning); Biguanides/Sulfonylureas

continue to outgrow the overall market

- Price: The average cost per a day of therapy is $1.78 and increased marginally by ~1.8% in Q4; That said the cost per

day of newer branded agents increased in Q4 lead by a ~8 to ~12% increase in GLP-1 Agonists and follow on DPP-IV

Inhibitors, e.g. Onglyza and Tradjenta

- Promotion: In the three months ending October 2011 total promotional spend grew ~14.9%; Healthcare professional

spend grew ~11.6% with DPP-4 Inhibitors accounting for ~60% of spend; Direct to Consumer spending grew in October

with Januvia launching its first campaign since Q1 ‘11

Executive Summary: Commercial Landscape

53


analyst day transcripts); 3rd party equity research reports; Bio-Pharma Insight

Notes: Branded sales excludes generic revenues and Insulins; Pipeline includes: Aleglitazar, Canagliflozin, Lyxumia, and Nesina; *Includes pipeline

revenues

Global ‘11 brand revenue for non-Insulin drugs was ~$13.9B and is forecast to grow by ~3.1%

annually through ‘15 driven by strong growth outside of the United States and new product

launches, including follow on DPP-IV inhibitors and once weekly GLP-1 Agonists.

$10.4 $12.1

$13.9 $15.1 $14.7

$15.7 $16.6

$0.0

$10.0

$20.0

09A 10A 11A 12F 13F 14F 15F

’11 Revenue

($B)

’10–’11A

CAGR

’11-’12F

CAGR

’12–’15F

CAGR

Global &

Pipeline $13.9 15.7% 8.5% 3.1%

US* $8.0 10.6% -0.4% -2.2%

EU* $3.2 52.6% 20.7% 8.7%

JP* $1.4 -5.1% 19.8% 7.9%

RW* $1.3 6.9% 21.1% 8.9%

EU

US

JP

RW

Type II Diabetes Global Brand Revenue ($B)

Updated: 02/15/12

Actual: Solid bars Consensus Wall Street Forecast: Hashed bars

Global

Pipeline

Baseline Epidemiological Growth (Prevalence)

• US: 1.6% • EU: 1.0% • JP: 1.3%

Recent and Anticipated New Product Launches - Global

• Novo Nordisk: Victoza (03/11)

• Eli Lilly/BI: Tradjenta (08/11)

• Takeda: Nesina (’12)

• Sanofi/Zealand: Lyxumia (‘13)

• Roche: Aleglitazar (’13)

Recent and Anticipated New Product Launches - Japan

• Takeda: Liovel, Alogliptin and Pioglitazone (09/11)

• Takeda: Nesina (04/10)

• JNJ/Mitsubishi Tanabe: Canagliflozin (’13)

Recent and Anticipated Line Extensions

• Merck: Janumet XR, Sitagliptin and Metformin QD (02/12)

• Amylin: Bydureon, Exenatide ER (01/12)

• Eli Lilly/BI: Jentadueto, Tradjenta and Metformin (01/12)

• Merck: Juvisync, Sitagliptin and Simvastatin (10/11)

Recent and Anticipated Loss of Exclusivity

• US: Avandia (09/11), Actos (08/12)

54



Notes: Branded sales excludes generic revenues and Insulins; Pipeline includes: Aleglitazar, Canagliflozin, Lyxumia, and Nesina

US ‘11 brand revenue was ~$8.0B and is forecast to be flat in ’12 and decline in ’13 due to Actos

LoE; Thereafter, the market is forecast to grow by a ~5.8% CAGR driven by the uptake of

marketed and pipeline DPP-IV Inhibitors and GLP-1 Agonists.

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR

United States $8.0 10.6% -0.4% -2.2%

Glitazones $3.5 -7.0% -13.5% -65.6%

Actos/Plus/XR $3.4 -1.3% -11.1% -67.5%

Avandia/Met $0.1 -60.2% -69.7% -22.3%

GLP-1 Agonists $1.1 40.8% 2.3% 15.8%

Byetta $0.5 -5.2% 0.5% 19.1%

Victoza $0.6 160.2% 4.0% 12.7%

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR

DPP-IV Inhibitors $3.0 31.7% 11.0% 10.2%

Januvia/ Janume/

Juvisync $2.5 18.6% 7.3% 9.3%

Onglyza/

Kombiglyze XR $0.5 186.1% 7.1% 5.1%

Tradjenta/

Jentadueto $0.0 443.1% 62.8%

Other $0.3 -3.3% -4.0% 0.4%

$7.1 $7.3 $8.0 $8.0

$6.7 $6.9 $7.5

$0.0

$5.0

$10.0

09A 10A 11A 12F 13F 14F 15F

s

Actual: Solid bars Wall Street Consensus Forecast: Hashed bars

US

Pipeline

Updated: 02/15/12

55




Type II Diabetes European Union Brand Revenue ($B)

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR

European Union $3.2 52.6% 20.7% 8.7%

Glitazones $0.4 -17.3% -40.0% -28.1%

Actos/Plus/XR $0.4 14.9% -40.0% -28.1%

Avandia/Met $0.0

GLP-1 Agonists $0.4 123.9% 8.1% 11.1%

Byetta $0.1 20.9% 33.6% 2.9%

Victoza $0.3 160.2% 4.0% 12.7%

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR


Januvia/

Janume/Juvisync $1.5 79.1% 26.9% 8.6%

Onglyza/

Kombiglyze XR $0.1 173.5% 244.8% 9.9%

Tradjenta/

Jentadueto $0.0 316.7% 75.9%

Galvus $0.6 73.1% 3.4% 1.7%

Other $0.2 -12.4% -13.2% -14.3%

$1.1

$2.1

$3.2

$3.9 $4.4

$4.8 $5.0

$0.0

$3.0

$6.0

09A 10A 11A 12F 13F 14F 15F

s


EU

Pipeline

In the ~$3.2B European Union market, where the GLP-1 Agonists and DPP-IV Inhibitors have

greater penetration, growth in these classes is forecast to be more moderate; Overall the EU

market is forecast to grow annually by ~8.7% through ’15.

Updated: 02/15/12

56




Type II Diabetes Japan Brand Revenue ($B)

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR

Japan $1.4 -5.1% 19.8% 7.9%

Glitazones $0.5 -20.9% -2.8% -0.7%

Actos/Plus/XR $0.5 -20.9% -2.8% -0.7%

Avandia/Met

GLP-1 Agonists $0.1 132.6% 16.3% 18.4%

Byetta

Victoza $0.1 132.6% 16.3% 12.7%

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR

DPP-IV Inhibitors $0.2 119.3% 17.9%

Januvia/

Janumet/Juvisync $0.2 50.0% 17.8%

Onglyza/

Kombiglyze XR $0.0 9.9%

Tradjenta/

Jentadueto $0.0

Other

(e.g. Basen) $0.7 -22.9% 3.1% -1.6%


JP

Pipeline

$1.5 $1.5 $1.4

$1.7 $1.9

$2.1 $2.1

$0.0

$1.5

$3.0

09A 10A 11A 12F 13F 14F 15F

s In the ~$1.4B Japan market, where Takeda’s Actos and Basen have a stronghold, the overall

market is forecast to grow annually by ~7.9% through ’15, with the uptake of newly approved

DPP-IVs, Nesina and Liovel.

Updated: 02/15/12

57

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR


Januvia/

Janumet/Juvisync $0.4 25.5% 16.6% 2.5%

Onglyza/

Kombiglyze XR $0.1 397.1% 16.2%

Tradjenta/

Jentadueto $0.0 56.2%

Galvus $0.1 73.1% -61.6% 30.6%

Other $0.3 -7.2% 16.2% 5.5%



Type II Diabetes Rest of World Brand Revenue ($B)

’11 Revenue ($B)

’10–’11A CAGR

’11-’12F

CAGR ’12–’15F

CAGR

Rest of World $1.3 6.9% 21.1% 8.9%

Glitazones $0.1 -60.7% -19.4% -16.2%

Actos/Plus/XR $0.1 -50.1% -15.7% -13.2%

Avandia/Met $0.1 -70.8% -25.5% -22.3%

GLP-1 Agonists $0.2 160.5% -16.7% 5.9%

Byetta $0.1 136.7% -31.8% -8.7%

Victoza $0.1 183.3% -4.5% 12.7%

$0.7

$1.2 $1.3

$1.6 $1.7

$2.0 $2.1

$0.0

$1.5

$3.0

09A 10A 11A 12F 13F 14F 15F

s


RW

Pipeline

Rest of World brand revenue was ~$1.3B in 2011 and is forecast to grow by ~8.9% between ’12

and ’15; Despite a global epidemic, generics will likely remain the standard of care for the

majority of patients outside the major markets.

Updated: 02/15/12


58

Sources: Consensus estimates based on publicly available equity research forecasts that have been updated in the past 12 months (since 1/1/11);

Consensus estimate is the ‘straight line’ average with each bank’s forecast weighted equally

Notes: These forecasts are not representative of Lumleian’s viewpoint; Ad-hoc Lumleian develops its own forecasts

for clients based on its proprietary analytics and research; Pipeline includes: Aleglitazar, Canagliflozin, Lyxumia, and Nesina

Global Pipeline Assets Wall Street Consensus Forecast ($B)

Wall Street consensus estimates forecast that new products will generate ~$1.5B in global

revenue in ‘15, driven largely by anticipated launches for Takeda’s DPP-IV Inhibitor Nesina

outside Japan, Roche’s NF-kB Modulator Aleglitazar, and Sanofi’s GLP-1 Agonist Lyxumia.

Wall Street Consensus Forecast: Hashed bars

$0.2

$0.7

$1.1

$1.5

$0.0

$1.0

$2.0

09A 10A 11A/F 12F 13F 14F 15F

Canagliflozin (JNJ)

Aleglitazar (Roche)

Lyxumia (SNY)

Nesina (Takeda)

Updated: 02/15/12

Nota Bene: Dapagliflozin forecast omitted, premised

on recent FDA Complete Response

Global Aleglitazar (Roche)

Equity Research Forecasts ($B)

Global Nesina (Takeda)


Global Lyxumia (SNY)


$0.0

$0.5

$1.0

12F 13F 14F 15F

Th

ou

san

ds

0

0.5

1

12F 13F 14F 15F

Th

ou

san

ds

0

0.3

0.6

12F 13F 14F 15F

Th

ou

san

ds

15F Consensus: $0.3B 15F Consensus: $0.8B 15F Consensus: $0.3B

59

0%

10%

20%

Sources: SDI (IMS) retail sales and prescription data

Notes: Revenues include both branded and generic products; YTD growth compares the 12 months 1/11-12/11 vs.12 months 1/10-12/10; QTD

growth compares the 3 months 9/11-12/11 vs. the 3 months 9/10-12/11; MTD compares the month 12/11 vs. the month 12/10

In Q4 ’11 US Type II Diabetes retail revenue rose ~2.7% driven by a ~10% increase in average

prices, and a shift in product mix towards DPP-IV Inhibitors and Biguanides vs. “more costly”

Glitazones; Days of therapy grew slightly faster than total Rx volume.

Decomposition of ’11 Q4 US Type II Diabetes Retail Revenue Growth (over ’10 Q3)

Days of

Therapy Price per day

(Independent of Mix)

Product

Mix

Retail

Revenue

MTD

’11-Dec vs. ’10-Dec 4.0% 9.6% -12.6% 1.0%

YTD

2011 vs. 2010 6.8% 8.9% -8.7% 7.0%

+10.0% -11.9%

+2.7%

+4.6%

Shift away from the

highest cost class of

drugs (Glitazones)

towards lower cost

classes (e.g. DPP-IV

and Biguanides)

Updated: 02/15/12

60 Sources: SDI (IMS) retail sales and prescription data

The DPP-IV Inhibitors and GLP-1 Agonists now command ~12.6% share, lead by the Januvia

franchise and Victoza; Share gains came at the expense of the Glitazones (Actos bladder label

warning); Biguanides/Sulfonylureas continue to outgrow the overall market.

0%

25%

50%

75%

100%

US Type II Diabetes Prescription Share (TRx)

Januvia/Janumet/Juvisync

Onglyza/Kombiglyze XR

Actos/ActoPlus/ActoPlus XR

Victoza

Byetta

Share Share Change

(% points) CAGR

Dec-11 1MR 3MR 12MR QTD YTD

Total TRx 2.7% 5.0%

Glitazones 6.9% -0.5 -4.3 -3.4 -35.0% -22.7%

Actos/Plus/XR 6.9% -0.4 -3.4 -2.1 -29.8% -14.6%

Avandia/Met 0.0% 0.0 -0.9 -1.3 -90.2% -74.5%

GLP-1 Agonists 2.3% 0.0 0.2 0.3 14.2% 22.6%

Byetta 1.0% 0.0 -0.2 -0.3 -16.1% -20.1%

Victoza 1.3% 0.0 0.5 0.7 61.1% 159.3%

DPP-IV Inhibitors 10.3% 0.3 1.9 1.4 27.2% 24.8%

Januvia/

Janumet/

Juvisync 8.2% 0.1 0.8 0.5 14.2% 11.9%

Onglyza/

Kombiglyze XR 1.9% 0.1 0.9 0.9 108.7% 177.1%

Tradjenta/

Jentadueto 0.3% 0.1 0.2 0.1

Biguanides/Sulfonyl

ureas 79.0% 0.2 2.4 2.0 5.9% 7.7%

Other 1.4% 0.0 -0.2 -0.3 -12.1% -14.5%

Avandia/Avandamet

Updated: 02/15/12

(Graph excludes Biguanides/Sulfonylureas/Other)

Notes: Prescription includes both branded and generic products; Share Change compares the share for 12/11 vs. 1 month, 3 months, and 12 months ago;

YTD growth compares TRx for 2011 vs. the TRx for 2010; QTD growth compares TRx for the 3months 10/11-12/11 vs. the 3 months 10/10-12/10; MTD

compares TRx for the month 12/11 vs. the month 12/10

61

$0

$2

$4

$6

$8

$10

$12

$14

GLP-1Agonists

Glitazones DPP-IVInhibitors

Generics

Sources: SDI (IMS) retail sales and prescription data

Note: Average price per day of therapy is the weighted average price per day of therapy, weighting a given product’s retail cost (the cost paid to

pharmacies) by its retail TRx volume for each month; QTD compares average price for the 3 months 10/11-12/11 vs. the 3 months 7/11-9/11

The average cost per day of therapy is ~$1.78, and this increased marginally by 1.8% in Q4;

That said, the cost per day for newer branded agents increased in Q4, led by an 8 to 12%

increase in GLP-1 Agonists and the follow-on DPP-IV Inhibitors, Onglyza and Tradjenta.

US Diabetes Cost per Day of Therapy ($) Cost per Day Change in Cost per Day

Dec-11 QTD

Average TRx $1.78 1.8%

Glitazones $7.98 5.7%

Actos /Plus / XR $7.95 4.8%

Avandia / Met $6.11 7.5%

GLP-1 Agonists $11.26 11.7%

Byetta $10.03 8.9%

Victoza $12.24 12.7%

DPP-IV Inhibitors $6.90 3.5%

Januvia/

Janumet/

Juvisync

$7.05 2.7%

Onglyza/

Kombiglyze XR $6.86 8.5%

Tradjenta $6.35 9.1%

Biguanides/Sulfonyl

ureas $0.39

$1.78

Updated: 02/15/12

62

Others

DPP-4

GLP-1

Glitazone

Sources: SDI (IMS) Promotion Audits, Kantar Media Research 2010 - 2011

Note: Insulins are excluded; Healthcare Professional (HCP) spend includes marketing to physicians, nurse practitioners, physician assistants through marketing

& event promotions, journals, and online promotions; Direct to Consumer (DTC) includes marketing channels in television, radio, newspapers, magazines,

outdoor advertisements, and internet; 3MR (3 months rolling) compares avg. monthly spend for the 3 months 10/11-8/11 vs. the 3 months 7/11-5/11

In the three months ending October ’11, total promotional spend grew ~14.9%; Healthcare

professional spend grew ~11.6% with DPP-IV Inhibitors accounting for ~60% of spend; Direct to

Consumer spend grew in October, with Januvia launching the first campaign since Q1 ‘11.

$0

$50

$100

N D J F M A M J J A S O

Millions

HCP DTC

$0

$50

$100


Others Glitazone

GLP-1 DPP-IV

$0

$15

$30


Others

Glitazones

GLP-1

DPP-IV

• $105.3M was spent on total promotion in October, a 14.7%

increase (3 month rolling), with ~86% of the expenditure

focused on health care professionals

– DPP-IV Inhibitors accounted for ~61% of HCP spend, and the average

brand (Januvia, Onglyza, and Tradjenta) spent $18.5M in October

• Class DTP spending rose in parallel with Tradjenta approval (08/11)

– GLP-1 Agonists (Byetta, Victoza) spent on average $10.2M in October

• After two quarters of inactivity, Januvia launched a DTC

campaign in September, spending ~$13M in October

- Onglyza did not pursue DTC advertising, nor did either of the two

GLP-1 Agonists

$105.3M

(10/11)

$91.6M

(10/11)

Exelon

$13.8M

(10/11)

2010 2011

Total Promotional Spend ($M)

Healthcare Professional Spend ($M) Direct to Consumer Spend ($M)

2010 2011

2010 2011

Share of

Wallet CAGR

(Oct-11) (3MR)

HCP 86.9% 11.6%

DTC 13.1% 84.1%

Share of

Voice CAGR

(Oct-11) (3MR)

DPP-IV 60.8% 12.2%

GLP-1 22.3% -4.5%

Glitazones 10.0% 33.9%

Others 5.7% 17.2%

Share of

Voice CAGR

(Oct-11) (3MR)

DPP-IV 95.1% 165.5%

GLP-1 3.0% -18.8%

Glitazones 0.1%

Others 1.9%

14.9% (3MR)

CAGR

11.6% (3MR) CAGR 84.1% (3MR) CAGR

Updated: 02/15/12

63

Share

of

Voice:

HCP 47.5% 43.3% 55.0% 51.5% 51.1% 48.0% 54.0% 58.5% 59.5% 60.1% 52.5% 60.8%

DTC 54.3% 77.7% 74.6% 83.1% 82.8% 43.5% 44.1% 65.1% 74.3% 57.9% 52.5% 95.1%

$0

$40

$80


DPP-IV Inhibitors Total Promotional Spend ($M)

Tradjenta (LLY/BI) Januvia (MRK)Janumet (MRK) Juvisync (MRK)Onglyza (AZ/BMS) Kombiglyze XR (AZ/BMS)

DPP-IV Inhibitor brands spent ~$68.7M on advertising in October, with ~61% focused on HCP and

Tradjenta accounting for ~37% of spend vs. Januvia (33%) and Onglyza (30%); Januvia launched

the only DTC campaign in September, with spend at a monthly run rate of ~$13M.

2010 2011

JANUVIA

Power up

with

Januvia

$68.7M CAGR

(Oct-11) (3MR)

HCP $55.7M 12.2%

DTC $13.1M 165.5%

HCP: Solid bars; DTC: Hashed bars

JANUVIA. More than 90% of patients in

commercial plans are covered at the

lowest branded copay without prior

authorization. Januvia: Reducing HbA1c

Expanding formulary coverage

ONGLYZA

Partnering to improve

glycemic control

TRADJENTA

New Tradjenta

tablets

JANUMET

Clinical update,

Janumet vs. Actos

KOMBIGLYZE XR

The first and only once-a-

day Metformin XR + DPP-4

inhibitor combination

tablet. One daily dose

KOMBIGLYZE

XR

Now

Approved

JANUVIA-DTC

Today, I took steps to

balance my Type II

Diabetes, a balanced diet

and a talk. Januvia works

to lower blood sugar in 2

ways. If Januvia is right

for you, start today with

a free 30-day trial supply

JANUVIA-DTC

National Diabetes Month

is a great time to take

control. If you have

Type II Diabetes, take

steps to help control

your blood sugar. If

Januvia is right for you,

start today with a free

30-day trial supply $68.7M (10/11) 19.2% (3MR) CAGR

Updated: 02/15/12

Note: 3MR (3 months rolling) compares avg. monthly spend for the 3 months 10/11-8/11 vs. the 3 months 7/11-5/11

Sources: SDI Promotion Audits, Kantar Media Research

64

$0

$15

$30


GLP-1 Agonists Total Promotional Spend ($M)

Victoza (NVO) Byetta (LLY)

GLP-1 Agonist brands spent ~$20.8M on advertising in October, exclusively focused on HCP;

Victoza, which was second-to-market but is the market leader as a QD, accounts for ~70% of

HCP spend (e.g. “Roots” campaign) and continues to outspend Byetta by over a 2:1 margin.

2010 2011

HCP: Solid bars; DTC: Hashed bars

VICTOZA-DTC

For Type II Diabetes. Victoza

helped me take my blood

sugar down...and changed

how I manage my Type II

Diabetes. Victoza is an

injectable prescription

medicine that may improve

blood sugar in adults. Non-

Insulin - once daily

VICTOZA-DTC

Sign up for more information and get a free diabetes care

journal to help you track your progress. Year diagnosed

with Type II Diabetes. Currently treat your Type II Diabetes

how? If you use Victoza, please tell us about your

treatment

BYETTA

It's time to think twice about

how patients with Type II

Diabetes could benefit from

Byetta

BYETTA

Alicia needed

a Type II

Diabetes

treatment

that offers

glycemic

control with

potential

weight loss.

Byetta worked

for her

BYETTA

It's time to think twice about how

patients with Type II Diabetes

could benefit from Byetta

VICTOZA

Do more than

lower blood

glucose. Grab

Type II Diabetes

by the roots

VICTOZA

With the power of a GLP-1 therapy,

do more than lower blood glucose.

Grab Type II Diabetes by the roots

VICTOZA

For your

residents with

Type II

Diabetes, once-

daily Victoza is

a safe and

effective

treatment

option

VICTOZA

Victoza made a deep

impact in its first year.

Over 30,000 health care

professionals prescribed

Victoza. VictozaCare

offers support to help

patients manage their

Type II Diabetes

Share

of

Voice:

HCP 29.7% 33.6% 27.9% 29.2% 32.5% 33.0% 28.6% 27.3% 27.7% 26.2% 23.2% 22.3%

DTC 23.7% 11.4% 21.7% 16.2% 8.8% 7.5% 45.0% 27.9% 10.5% 38.5% 36.0% 3.0%

$20.8M CAGR

(Oct-11) (3MR)

HCP $20.4M -4.5%

DTC $0.4M -18.8%

$20.8M (10/11) -6.4% (3MR) CAGR

Updated: 02/15/12

Note: 3MR (3 months rolling) compares avg. monthly spend for the 3 months 10/11-8/11 vs. the 3 months 7/11-5/11

Sources: SDI Promotion Audits, Kantar Media Research

65

Table of Contents

Slide Number



• 3 – 6

• 7 – 9






11

• 12

• 13

• 14

• 15 – 21

• 22




• GLP-1 Agonists


• PPAR Modulators




• GPCR Agonists





24

• 25

• 26 – 29

• 30 - 31

• 32 - 35

• 36 - 37

• 38 – 39

• 40

• 41 - 42

• 43

• 44

• 45

• 46

• 47

• 48-50





52

• 53 – 57

• 58

• 59 – 61

• 62 – 64


• Lumleian Team

• 66 – 67

• 68 – 69

66

Table of Acronyms (1 of 2)

11A 2011 Actual

12F 2012 Forecast

2H Second Half

3MR Three Months Rolling

ABT Abbott

ANLG-B Analog-B

AMG Amgen

AMPK Adenosine Monophosphate-Activated

Protein Kinase

AZN AstraZeneca

B Billions

BI Boerhinger-Ingelheim

BID Bis in Die (Twice daily)

BMS Bristol-Myers Squibb

CAGR Compound Annual Growth Rate

CCL2 Chemokine (C-C Motif) Ligand 2

CCR2 chemokine (C-C Motif) Receptor 2

CHF Congestive Heart Failure

CMS Centers for Medicare & Medicaid

Services

CV Cardiovascular

dL Deciliter

DPP-IV Dipeptidyl peptidase-4

DTC Direct to Consumer

EU European Union

FDA US Food and Drug Administration

FPG Fasting Plasma Glucose

GI Gastrointestinal

GLP-1 Glucagon-Like Peptide-1

GPR119 G Protein-Coupled Receptor 119

GSK GlaxoSmithKline

HbA1c Glycosylated Hemoglobin

HCP Health Care Professional

HDL High-Density Lipoprotein

IDF International Diabetes Federation

IgG2 Immunoglobulin G 2

IL-1 Interleukin-1

JNJ Johnson and Johnson

JP Japan

kg Kilogram

LLY Eli Lilly

LoE Loss of Exclusivity

LT Long Term

M Millions

mg Milligrams

µg Microgram

mmHG millimeters of Mercury

MoA Mechanism of Action

MRK Merck

MTD Month to Date

N Number

NDA New Drug Application

NF-kB Nuclear factor Kappa-Light-Chain-

Enhancer of Activated B Cells

NOVO Novo Nordisk

NVS Novartis

PCP Primary Care Physician

PFE Pfizer

Ph. Phase

Ph.D. Doctor of Philosophy

PPAR Peroxisome Proliferator-Activated

Receptors

PPARγ Peroxisome Proliferator-Activated

Receptors Gamma

PPG Postprandial Plasma Glucose

Q1 First Quarter

Q2 Second Quarter

Q3 Third Quarter

Q4 Fourth Quarter

QD Quaque Die (Once Daily)

QTD Quarter To Date

67

Table of Acronyms (2 of 2)

Reg. Reglatory

REMS Risk Evaluation and Mitigation Strategy

RN Registered Nurse

ROCH Roche

RW Rest of World

Rx Prescription

SGLT Sodium-Dependent Glucose

Cotransporter

SIRT Sirtuin (Silent Mating Type Information

Regulation 2 Homolog)

SNY Sanofi-Aventis

SOC Standard of Care

SS Statistically Significant

SSD Statistically Significant Difference

T2D Type II Diabetes

TRx Total Prescriptions

US United States

WW World Wide

Yrs. Years

YTD Year to date

68

• Frank Deane, Ph.D. is a Director of Decision Science and Founder of Lumleian. Frank has over ten years of

experience working with life science companies and concurrently holds an appointment in the department of

strategy at the Carroll School of Management, Boston College, where he teaches ‘Strategic Issues in Pharma and Bio-

Tech,’ to MBA students. Prior to founding Lumleian, Frank was a director with Leerink Swann and a case team

leader with Bain, where he gained substantial operational experience growing and operating a diverse set of

businesses. Frank entered consulting after spending three years in the bio-pharmaceutical industry with Eli Lilly,

supporting portfolio optimization and business unit strategic planning. He began his career, as a quantitative risk

analyst working at BlackRock. Frank earned a Ph.D. in econometrics from the Krannert School of Management at

Purdue University, where his dissertation focused on applying game theory and statistical modeling to optimize

pharmaceutical sales and marketing resources. Frank has a bachelor of arts in economics from Princeton University.

As a leadership team, we designed Lumleian’s business model based on our collective

experience in: academic R&D, bio-pharmaceutical industry, equity research and strategy

consulting …

• Mark Hochstetler, MBA is a Director of Decision Science at Lumleian. Mark has over ten years of experience

working with life science companies. Prior to joining Lumleian, Mark served as the CFO at OPK Biotech, which

focuses on developing oxygen therapeutics for the treatment of anemia, ischemia, and trauma. Before segueing

to industry, Mark spent 5 years as a strategy consultant and equity research analyst at Leerink Swann, where he

covered: Array, Arqule, Ariad, Celgene, Chelsea, Cougar, Cubist, Genentech, GTx, Hana, Idenix, InterMune,

Kosan, Millennium, MGI Pharma, Onyx, Poniard and Vertex. Mark earned an MBA from Duke University’s Fuqua

School of Business with a concentration in health sector management. Mark has a bachelor of arts in political

science from Stanford University.

• Sarah Haigh Molina, Ph.D. is a Manager of Decision Science at Lumleian, where she leads the Academia and Non-

profit practice. Sarah has over ten years experience working and researching in the life sciences. Prior to joining

Lumleian, Sarah was an Assistant Professor of Medicine at Boston University School of Medicine where she served

as the Director of High-throughput Screening. Before returning to academia, Sarah was US Operations Manager at

Molecular Cytomics. Sarah earned a Ph.D. in biology from York University, an MBA from Boston University with a

concentration in entrepreneurship, and a bachelors of science in biochemistry from Dundee University.

69

… Having lived the client experience, we know quality is paramount, and pioneered our

approach with quality and process efficiency as dual mantras.

• Jean Kung, M.Eng., MBA as Manager of Process Efficiency and Quality Control oversees day-to-day operations and

finances at Lumleian and has over five years experience working in the life sciences. Jean designed the process

by which Lumleian efficiently and effectively creates and quarterly updates its disease state primers and serves as

the final point of quality control. Prior to joining Lumleian, Jean served as a contract project manager to various

life science clients. Before entrepreneurship, Jean was a clinical research associate at Health Policy Associates

and a researcher at the Harris Orthopedic Biomaterials and Biomechanics Laboratory, Massachusetts General

Hospital. Jean earned a masters of engineering in biological engineering from Cornell University and an MBA in

the Health Sector Management Program from Boston University with a concentration in operations and technology

management. Jean has a bachelor of science in biological engineering, also from Cornell University.

• Morgen Caroll, MBA as Manager of the Customer Experience at Lumleian, aspires to provide Lumleian's clients with

superior care and service based on their particular needs. Morgen brings over five years life science experience

and has a background in Marketing, Sales, and Public Relations. Prior to joining Lumleian, Morgen worked at

GlaxoSmithKline, with responsibility for the company’s flagship cardiology and endocrinology products. At

GlaxoSmithKline, Morgen was a primary care and specialty care sales representative while serving as a liaison

between product management teams and field sales. As a representative, Morgen consistently ranked in the top

10% of GSK’s sales force, despite working in an inner city territory with significant access challenges. Prior to

entering the life sciences Morgen worked on the sales and marketing staff at Philadelphia Magazine and Food &

Wine Magazine. Morgen earned an MBA from the Villanova School of Business with a concentration in marketing,

and a bachelor of arts in English from Gettysburg College.

• Qingwei Sun, M.Eng., MS as a Decision Science Analyst oversees secondary data collection, synthesis and analysis

and designed analytical methodologies fundamental to Lumleian’s knowledge management platform. KM

database. Using meta-analysis method, he aggregates the clinical and commercial data required to generate

Lumleian’s disease state primers. His work has wide application in product development, portfolio management,

and investment strategy for both large pharmaceutical companies and emerging bio-techs. Qingwei, who is fluent

in Chinese and Japanese, leads our work with Asian clients. Qingwei joined Lumleian after obtaining a Master of

Science degree from Harvard School of Public Health. He earned both Bachelor and Master of Engineering degrees

from Kyoto University, Japan, concentrating in materials science.

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