GTX: AN OPPORTUNITY NOT TO BE MISSED?

Carlos Stahlhut ● Elana Fishman ● Dorothy Kwok

Juliana Tolles ● Vipender SinghLucky 13

3. Activated T cells escalate inflammation via cytokine signals to other cells.

TH

2

TH

1

1. Breach of intestinal wall causes abnormal interaction between local immune cells and intestinal bacteria.

2. Inflammatory cytokines attract leukocytes from bloodstream.

Crohn’s Disease and Ulcerative

Colitis

TH

4. Neutrophils, macrophages, and antibodies attack the intestinal mucosa.

UC

CDTNFα, IL-2, IL-3

IL-3, IL-4, IL-5B cells

NeutrophilROS

VLA-1

Epidemiology

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000 Market for Ulcerative Colitis

Mild

Mod-erate

Severe# A

ffe

cte

d

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000 Market for Crohn’s Disease

Mild

Mod-erate

Severe

# A

ffecte

d

519,000 55%

293,000 31%

138,000 14% Market for UC

382,000 46%311,000

38%

135,000 16%

Market for CD

Treatment Options

Biologics

Steroids and Immunomodul

ators

AminosalicylatesAnd

Steroids

Mild

Mod

erat

eSe

vere

Sym

ptom

Sev

erity

Efficacy High cost Long term safety

Low cost Side effects

Low cost Limited

efficacy

The current drug options fail to meet the need for an effective and safe treatment

Treatment Limitations

Biologics

Steroids and Immunomodul

ators

AminosalicylatesAnd

Topical Steroids

Mild

Mod

erat

eSe

vere

Sym

ptom

Sev

erity

Moderate-high unmet need

Resistance to treatment Limited remission

sustenance

Moderate unmet need Side effects Limited efficacy

Very low unmet need

Effective and safe

Moderate unmet need Resistance to

treatment Safety risks

Moderate unmet need Side effects Limited efficacy

Low unmet need Low efficacy

Crohn’s Disease Ulcerative Colitis

GTX-001: Monoclonal Antibody Against VLA-1 Antigen

Different mechanism; Most Biologics Target TNF-

Not T-cell specific; Broad Immune Response Competition: biologics and immunomodulators Target Groups: Moderate to severe forms of

Crohn’s Disease and Ulcerative Colitis

VLA-1

GTX-001Targets

Biologics & IMs for Crohn’s DiseaseImmunomodulators

$ 57 MMCost $100-700

Administered Oral

Tysabri$15 MM

Cost $20,000-30,000Administered SC

Humira$ 420 MM

Cost $15,000-20,000Administered SC

Cimizia$80 MM

Cost $12,000-17,000Administered SC

Remicade$ 940 MM

Cost $10,000-15,000 Administered IV

Remicade$ 660 MM

Cost $10,000-15,000 Administered IV

Immunomodulators$ 44 MM

Cost $100-700Administered Oral

US & EU Market (2008) = $ 1,512 MM US &EU Market (2008) = $ 704 MM

Biologics & IMs for Ulcerative Colitis

GTX-002: Small Molecule Inhibitor

Kinase inhibitor that targets NF-kB pathway in T-cells

Kills stimulated T-cells

Potential be effective against all forms of disease

Combination therapy: For mild and moderate forms

Potential to replace biologics

TH

2TH

1

THUC CD

TNFα, IL-2, IL-3Cytotoxic T cells

IL-3, IL-4, IL-5B cells

US & EU Market (2008) = $2,060 MM US & EU Market (2008) = $1,516 MM

BiologicsSales $ 865 MM

5-ASASales $ 807 MM

ImmunomodulatorsSales $ 27 MM

Steroids < $ 1.1 MM

BiologicsSales $ 1,455 MM

5-ASASales $ 516 MM

ImmunomodulatorsSales $ 57 MM

Steroids Sales $ 33 MM

Crohn’s Disease Market Landscape

Ulcerative Colitis Market Landscape

Achieving Desired Target Profile

Preclinical studies Demonstrate lower

inflammation scores with Alternative delivery method Lower frequency of

administration (compared with IV every other day)

Demonstrate sustained remission

Clinical studies Efficacy in humans Acceptable levels of toxicity

and safety given non-humanized Ab

Equivalence/superiority to standard of care

Preclinical studies Demonstrate lower

inflammation scores Alone In combination with existing

treatment options Acceptable induction time Demonstrate sustained

remission Comparable or superior

performance to biologicsClinical studies Efficacy in humans Acceptable levels of toxicity and

safety Equivalence/superiority to

standard of care

GTX-001 GTX-002

GTX001: Financials

Licensing Agreement Licensing Fee: $10mm Total Development: $300mm Milestone Payments: $100 Phase I,

$100 Phase II, $200 Phase III Royalty to Gastrex: 10% of sales

Sales Assumptions Price per year: $17,000 Peak penetration (both CD and UC)

Operating Assumptions Sales and marketing: $100mm in 2019 and

2020, 20% of sales through 2032 Cost of goods sold: 40% of sales Tax rate: 35%

Upside Case

Base Case

Downside Case

% of Prevalence / % of Incidence (Years to Peak Penetration)Upside Base Downside

Mild 0% / 0% 0% / 0% 0% / 0%NA NA NA

Moderate 25% / 40% 15% / 30% 10% / 15%(6 years) (6 years) (6 years)

Severe 35% / 50% 25% / 40% 10% / 20%(5 years) (5 years) (5 years)

Program Value Sensitivity

Discount Rate / Probability of Approval

#### 25% 35% 50% 75% 100%

12% $31 $96 $194 $358 $522

15% ($23) $16 $75 $172 $270

18% ($51) ($28) $7 $66 $124

Program Value Sensitivity

Discount Rate / Probability of Approval

#### 25% 35% 50% 75% 100%

12% ($54) ($22) $26 $105 $185

15% ($75) ($57) ($30) $15 $61

18% ($84) ($74) ($59) ($33) ($8)

Program Value Sensitivity

Discount Rate / Probability of Approval

#### 25% 35% 50% 75% 100%

12% $356 $551 $844 $1,333 $1,822

15% $182 $303 $484 $787 $1,089

18% $80 $156 $270 $460 $649

GTX002: Financials

Same Licensing Agreement Sales Assumptions

Price per year: $5,000 Peak penetration (Crohn’s Disease)

Peak penetration (Ulcerative Colitis)

Operating Assumptions Sales and marketing: $100mm in 2019

and 2020, 20% of sales through 2032 Cost of goods sold: 20% of sales Tax rate: 35%

Upside Case

Base Case

Downside Case

% of Prevalence / % of Incidence (Years to Peak Penetration)Upside Base Downside

Mild 30% / 30% 15% / 15% 5% / 5%(4 years) (4 years) (4 years)

Moderate 65% / 65% 45% / 45% 20% / 20%(5 years) (5 years) (5 years)

Severe 40% / 40% 25% / 30% 10% / 10%(6 years) (6 years) (6 years)

% of Prevalence / % of Incidence (Years to Peak Penetration) % of Prevalence / % of Incidence (Years to Peak Penetration)Upside Base Downside

Mild 80% / 80% 50% / 50% 5% / 5%(4 years) (4 years) (4 years)

Moderate 35% / 35% 25% / 25% 20% / 20%(5 years) (5 years) (5 years)

Severe 60% / 65% 35% / 40% 10% / 10%(6 years) (6 years) (6 years)

Program Value Sensitivity

Discount Rate / Probability of Approval

#### 25% 35% 50% 75% 100%

12% $161 $279 $455 $750 $1,044

15% $62 $135 $245 $428 $611

18% $6 $52 $121 $236 $351

Program Value Sensitivity

Discount Rate / Probability of Approval

#### 25% 35% 50% 75% 100%

12% ($3) $50 $128 $259 $389

15% ($42) ($10) $37 $115 $194

18% ($62) ($43) ($15) $33 $80

Program Value Sensitivity

Discount Rate / Probability of Approval

#### 25% 35% 50% 75% 100%

12% $327 $511 $787 $1,247 $1,707

15% $168 $283 $456 $744 $1,033

18% $74 $147 $257 $441 $624

Recommendations

License GTX-002 under proposed structure Captures broader segment of market (all levels of disease severity)

Small molecule offers more convenient delivery option at lower cost

High level of return with low downside risk

Offer $2mm per year for 2 years to maintain licensing option for GTX-001 contingent on preclinical performance Safety concern regarding immune response

Demonstrate effectiveness with lower frequency of administration

Investigate other delivery routes

GTX-001 and GTX-002 represent novel and exciting treatments for IBD

Thank You & Questions

Appendix

Summary of Clinical Trials

Preclinical Clinical

Animal Phase 1 Phase II Phase III

Feasibility Initial dose Identify dose-response

Confirm dose-response

Safety profile Dose escalation Safety profile Safety profile

Pharmacokinetics Maximum tolerated dose

Drug efficacy Confirm drug efficacy

Pharmacodynamics Toxicity Patient population Risk/benefit relationship

Source: Makuch, R (2009 October) Phase of Clinical Trials Clinical Trials. Lecture conducted from Yale University, New Haven, CT

Top Products by Sales in 2014Product Company Technology WW Sales

($mm)

Avastin Roche Monoclonal antibody

9,232

Humira Abott + Eisai Monoclonal antibody

9,134

Rituxan Roche Monoclonal antibody

7,815

Enbrel Wyeth + Amgen + Takeda

Recombinant product

6,583

Lantus Sanofi-Aventis Recombinant product

6,386

Herceptin Roche Monoclonal antibody

5,796

Crestor AstraZeneca Small molecule chemistry

5,739

Spiriva Boehringer Ingelheim

Small molecule chemistry

5,552

Remicade SGP + J&J + MT Monoclonal antibody

5,220

Gleevev / Glivec

Novartis Small molecule chemistry

5,136

Source: FierceBiotech 18 Jun 2009, courtesy of Pfizer.

Drug Dosing Recommendations

70 kg adult Total drug

GTX-1 2 mg/kg every other day for 6 weeks

140 mg x 22 doses

= 3080 mg

Remicade 3 doses 5 mg/kg 350 mg x 3 doses

= 1050 mg

Humira 4 doses of 160 mg; 1 dose 80 mg;1 dose 40 mg

(at left) = 760 mg

Calculations to support drug pricing assumptions for GTX-001

Non-case sources

Pfizer Annual Report 2008 Roche Annual Report 2008 Novartis Annual Report 2008 www.uptodate.com (evidence-based,

peer reviewed website) www.fda.gov www.cdc.gov