1. Analysis Of Licensing GTX-001 And GTX-002 and Gastrex Team 7 - Animal Pharm Jason Dwyer Scott Gleim Ph.D. Samantha Kennedy Xin Li M.S. Robert Lindner John Nelson Ph.D. Candidate, BBS Internal Medicine MBA/MPH Candidate, 2012 M. A Statistics Candidate M.S. Mol. Biotech Candidate MBA Candidate, 2011

2. YBPS Healthcare Case Competition, 2009 Agenda Inflammatory Bowel Disease (IBD): Crohn’s Disease (CD) Ulcerative Colitis (UC) Gastrex GTX-001 and GTX-002: Unmet Needs, Target Product Profile Signals For Success Future Clinical Trial Timeline Market Analysis Financial Projection Licensing Recommendation GTX-001 (Biological)(Small Molecule)

3. YBPS Healthcare Case Competition, 2009 Inflammatory Bowel Disease What is IBD? Inflammatory disorder of the intestinal mucosa Crohn‘s Disease (CD) : small & large intestine Ulcerative Colitis (UC): colon, rectum Symptoms Diarrhea, abdominal pain Anemia, bleeding Multifactorial and multigenic etiology Mucosal integrity Hypersensitivity to intestinal microbes Aberrant T H -Cell mediated immune activation CD UC

4. YBPS Healthcare Case Competition, 2009 GTX-002: Unmet Needs 5-ASAs Steroids Immuno- modulators Treatment of mild-moderate CD/UC relies on combinations of 5-ASAs, steroids and immunomodulators:

5. YBPS Healthcare Case Competition, 2009 GTX-002 Target Product Profile 5-ASAs Steroids IM’s GTX-002 Competitive Advantage

6. YBPS Healthcare Case Competition, 2009 Problems with anti-TNF Drugs: - All require black box warning for fungal infection - Potential for serious/fatal infections - Solid-tissue cancers - Liver injury GTX-001: Unmet Needs 45-70% of severe patients never respond or stop responding to anti- TNF treatment Biologics used for treating severe CD/UC:

7. YBPS Healthcare Case Competition, 2009 GTX-001 Target Product Profile GTX-001 Competitive Advantage GTX-001

8. YBPS Healthcare Case Competition, 2009 Signals and Clinical Trial Timeline PharmacokineticsSafetyEfficacy GTX-001SC administration t 1/2 ≥ 4 wks Antigenicity Immunosuppression ≥ infliximab Refractory population GTX-002Oral administration OAD or BID Liver toxicity Kidney toxicity Rapid onset Concomitant Tx

9. YBPS Healthcare Case Competition, 2009 Market Analysis IBD Severity Rates Mild46% Moderate38% Severe16% IBD Severity Rates Mild46% Moderate38% Severe16% GTX-001GTX-002  High Price, Low Volume  Includes treatment refractory segment  Generic biologics more challenging  3 major competitors  Low Price, High Volume  Established generics  5+ major competitors  Potential to change market?

10. YBPS Healthcare Case Competition, 2009 Assumptions (per yr) - Discount Rate: 10% - GTX-001 Price: $15k - GTX-002 Price: $2.5k - CD Market Growth: 0.61% - UC Market Growth: 0% Net Income Sensitivity Analysis

11. YBPS Healthcare Case Competition, 2009 Licensing and Contract Recommendations License GTX-001  Positive NPV  Attractive Target Profile  Strong Market Opportunity  Important therapy for patients Do not license GTX-002 under current agreement……… Contract Renegotiation Options  Decrease milestone payments for GTX-002 or both -001 and -002  More indications for use: Rheumatoid Arthritis, Psoriasis  Profit sharing vs. royalties

12. YBPS Healthcare Case Competition, 2009 THANK YOU! Team 7 - Animal Pharm Jason Dwyer Scott Gleim Ph.D. Samantha Kennedy Xin Li M.S. Robert Lindner John Nelson Ph.D. Candidate, BBS Internal Medicine MBA/MPH Candidate, 2012 M. A Statistics Candidate M.S. Mol. Biotech Candidate MBA Candidate, 2011

13. YBPS Healthcare Case Competition, 2009 Competitive Drugs in Development

14. YBPS Healthcare Case Competition, 2009 DRUG 1DRUG 2, ADRUG 2, B CDUCCDUCCDUC Market Size Segment 1000000 Segment 2001420000 352000 Segment 300155000135000155000135000 Segment 400245000259000245000259000 Segment 5145000990000014500099000 Segment 66500040000006500040000 TOTAL210000139000542000394000752000885000 Drug 1Drug 2 Selling Price150002500 Profit Margin, Initial20% Market Share18% Market Share growth3% CD Market Growth0.61% Milestone payment 400,000,000.00 UC Market Growth0%

15. YBPS Healthcare Case Competition, 2009 DRUG 11/1/20101/1/20201/1/20211/1/20221/1/20231/1/20241/1/20251/1/20261/1/20271/1/20281/1/20291/1/20301/1/20311/1/2032 Market Size349000362120.434363459.3057364803.1277366151.9182367505.6957368864.4784370228.285371597.134372971.0441374350.0339375734.1223377123.3281378517.6703 Market Share %18%19% 20% 21% 22%23% 24%25%26% Total Patients 65,181.68 67,385.36 69,663.53 72,018.74 74,453.56 76,970.70 79,572.95 82,263.17 85,044.34 87,919.54 90,891.94 93,964.84 97,141.62 Sales $ 977,725,171.71 $ 1,010,780,329. 24 $ 1,044,953,023. 15 $ 1,080,281,035.3 5 $ 1,116,803,425.1 2 $ 1,154,560,572.2 4 $ 1,193,594,221.6 8 $ 1,233,947,529.7 2 $ 1,275,665,111.6 8 $ 1,318,793,091.2 5 $ 1,363,379,151.4 7 $ 1,409,472,587.4 7 $ 1,457,124,360. 97 Less 10% to Gastrex $ (97,772,517.17) $ (101,078,032. 92) $ (104,495,302. 31) $ (108,028,103.54 ) $ (111,680,342.51 ) $ (115,456,057.22 ) $ (119,359,422.17 ) $ (123,394,752.97 ) $ (127,566,511.17 ) $ (131,879,309.12 ) $ (136,337,915.15 ) $ (140,947,258.75 ) $ (145,712,436. 10) Upfront Licensing agreement $ (10,000,000.00) Late Stage development Costs Milestone Cost $ (40,000,000.00) Promotional Costs $ (100,000,000.00) NET INCOME $ (50,000,000.00) $ 155,990,530.91 $ 161,940,459.2 6 $ 168,091,544.1 7 $ 174,450,586.36 $ 181,024,616.52 $ 187,820,903.00 $ 194,846,959.90 $ 202,110,555.35 $ 209,619,720.10 $ 217,382,756.42 $ 225,408,247.26 $ 233,705,065.75 $ 242,282,384.9 7 NPV $ 127,981,673.63 discount rate10% 13% DRUG 2, A1/1/20101/1/20201/1/20211/1/20221/1/20231/1/20241/1/20251/1/20261/1/20271/1/20281/1/20291/1/20301/1/20311/1/2032 Market Size936000971188.3272974779.1122978383.1735982000.5601985631.3213989275.5066992933.1655996604.3481000289.1041003987.4841007699.5371011425.3161015164.869 Market Share %18%19% 20% 21% 22%23% 24%25%26% Total Patients174813.8989180724.0474186834.0076193150.5347199680.6124206431.4605213410.5428220625.5755228084.5357235795.6702243767.5044252008.8523260528.8256 Sales437034747.2451810118.5467085018.9482876336.7499201531516078651.2533526357551563938.8570211339.3589489175.5609418761.1630022130.8651322063.9 Less 10% to Gastrex-43703474.72-45181011.85-46708501.89-48287633.67-49920153.1-51607865.12-53352635.7-55156393.88-57021133.93-58948917.55-60941876.11-63002213.08-65132206.39 Upfront Licensing agreement (1,000,000.00) Late Stage development Costs Milestone Cost $ (40,000,000.00) Promotional Costs-100000000 NET INCOME (41,000,000.00) 58,666,254.50 61,325,821.33 64,075,303.41 66,917,740.61 69,856,275.58 72,894,157.22 76,034,744.25 79,281,508.98 82,638,041.08 86,108,051.58 89,695,377.00 93,403,983.54 97,237,971.51