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Cure’s GTX Licensing Opportunity One Opportunity Too Good to Miss.

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Presentation on theme: "Cure’s GTX Licensing Opportunity One Opportunity Too Good to Miss."— Presentation transcript:

1 Cure’s GTX Licensing Opportunity One Opportunity Too Good to Miss

2 Summary Cure is considering licensing from Gastrex two potential new drugs to treat Crohn’s Disease and Ulcerative Colitis GTX-001 is a biologic that may be easier to administer and have fewer side effects than biologics currently in use If successful in trials, GTX- 001 is likely to be preferred over existing treatments at a price point making licensing profitable GTX-002 is a small molecule kinase inhibitor that may be effective in combination with steroids and/or 5-ASAs, and may replace immuno- modulators for Crohn’s If successful in trials, GTX-002 is likely to be preferred over existing treatments, but at a price too low to make licensing profitable November 2009J, P, Morgan and Associates2 Recommendation: Cure should license GTX-001, but not GTX-002 from Gastrex

3 Bowel disease has unmet need Steroids unsafe for long-term use 5-ASAs not always effective with Crohn’s Immuno-modulators have side effects Biologics hard to administer (IV) and can have severe side effects No effective drugs November 2009J, P, Morgan and Associates3 Mild/Moderate Severe Refractory GTX-001 Target GTX-002 Target

4 Ulcerative colitis: Unmet needs 40,000 severe cases fail to respond to Remicade (TNF-  inhibitor). No current alternatives. High need 99,000 severe cases respond to Remicade would benefit from drug that provides longer remission rates and remains effective over time. Moderate need 150,000 mild to severe cases treated with steroids for induction. Moderate need to diminish amount used to minimize side-effects 155,000 mild to severe cases treated with immunomodulators for maintenance. Moderate need for safer alternatives November 2009J, P, Morgan and Associates4 GTX-002 targetGTX-001 target

5 November 2009J, P, Morgan and Associates5 65,000 severe cases fail to respond to current TNF-  inhibitors. Tysabri presents safety concerns. High need 145,000 severe cases respond to TNF-  inhibitors. Moderate need for drug with longer remission rates administered subcutaneously 180,000 mild to severe cases treated with steroids for induction. Moderate need to diminish amount used to minimize side-effects 227,000 mild to moderate cases treated with 5-ASAs. Moderate need for drug that increases remission rates 135,000 mild to severe cases treated with immunomodulators for maintenance. Moderate need for safer drug Crohn’s disease: Unmet needs GTX-002 targetGTX-001 target

6 Market size is sufficient for development GTX-001 could serve 30% of Biologics; 50% of Refractory patients GTX-002 could serve 80% of 5-ASA Crohn’s; 80% of Steroids and IM patients November 2009J, P, Morgan and Associates6

7 Comparison of GTX-001 to competitors November 2009J, P, Morgan and Associates7 Key + Favorable for patients - Harmful to patients

8 Comparison of GTX-002 competitors November 2009J, P, Morgan and Associates8 Key + Favorable for patients - Harmful to patients

9 Delayed milestone payments lowers cost Phase IV post- market safety tests (86% success) FDA Approval (80% success) Phase III: Expanded human efficacy (55% success) Phase II: Limited human efficacy/ adverse drug reactions (40% success) Phase I: Human safety/ dosage (63% success) Start Option to licenseSafe Continue testing: Effective Continue testing: Effective, Favored, Affordable FDA Approval Successful marketing Late-stage withdrawal No FDA Approval Continue testing: Not effective, not favored, or cost- prohibitive Continue testing: Not effective or not favored Unsafe November 2009J, P, Morgan and Associates9 Milestone Payment

10 Milestones Specified Successful in trials on primates No physical harm evident Human derived biologic Adverse reactions less severe Dose Response Rates equally promising or better than Remicade Compare to Remicade on other metrics Clinical Remission rates Fistula Rates of Recovery – CD FDA approves or drug qualifies for Fast Track Positive post- market study results supporting earlier data $20 Million Payment $50 Million Payment $150 Million Payment $180 Million in overall Payments

11 Conclusion/Results: NPV of licensing option Considering only US and EU November 2009J, P, Morgan and Associates11 GTX- 001 NPV: $94 million through 2032 Capital recovery by 2026 Conservative assumptions GTX-002 NPV: -$13 million through 2032 Best case scenario

12 Sensitivity Analysis Discounted Cash Flows over Time Positive NPV for GTX-001 Robust with Changing Assumptions November 2009J, P, Morgan and Associates12

13 Appendix A: Assumptions Price=average price of competitors 5 years to maximum adoption rate Population growth rates.5% for UC; for Crohn’s population growth rates in document 50% operating margin Tax percentage = 21.2% from comparables WACC = 6.06% from comparables Clinical trial phase lengths No cannibalization (we are not current producer) Trial success probabilities Cure has ready access to capital for investment Cure has operating profits against which to apply tax credits November 2009J, P, Morgan and Associates13

14 Appendix B: Remicade Clinical Trials Data DrugDifferen t Dose respons e rates Clinical remission rates at week 8 Clinical remission rates at week 30 Mucosal healing rates at week 8, at week 30 Rate of discontinu ing corticoste roid therapy at week 30 Patien ts with fistula s recove r (CD) GTX-001 Studies ?????? Remicade (Infliximab) 5mg- 69% 10mg- 62% compare d to 37% of placebo group 5mg/kg compared to 34%, 37% vs 18% in placebo group 62%, 59% vs 34% in placebo group 24%, 19% vs 10% in placebo group 68% vs 28% in placeb o group Source:http://www.cigna.com/customer_care/healthcare_professional/coverage_positions/pharmacy/ph_5112_covera gepositioncriteria_infliximab_remicade.pdf

15 Appendix C.1: Financial Model November 2009J, P, Morgan and Associates15

16 Appendix C.2: Financial Model November 2009J, P, Morgan and Associates16

17 Appendix E: Comparables November 2009J, P, Morgan and Associates17


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