46
Final Presentation May 14 th 2014

Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

  • Upload
    others

  • View
    2

  • Download
    0

Embed Size (px)

Citation preview

Page 1: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Final Presentation May 14th 2014

Page 2: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

• Project Scope

• Executive Summary

• Market Access

• Valuation

• Deal Structures

• Final Recommendations

Agenda

Page 3: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Project Scope

Come up with strategies to take anti-CTLA4 through FDA approval

Sell or License Market Access Valuation

• Unmet needs • Driver and barriers for

breast cancer biological therapy

• Oncologists survey

• Identify big Pharma companies to sell or license the new therapy

• Identify an optimal deal structure

• Determine risk adjusted net present value

Page 4: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

• We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval.

• Methods of analysis include literature review, primary research, economic modeling and identification of deal structures using business databases.

• Our research have shown that

1. there are significant unmet needs in metastatic breast cancer.

2. once in the market anti-CTLA4 could have a maximum annual revenue of $1.9B.

3. The best deal structures for Premier Biomedical are a) venture capital funding followed by selling to a big pharmaceutical company b) out-licensing.

Executive Summary

Page 5: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Market Access Unmet needs, drivers and barriers for adoption of biological therapy for breast cancer

Page 6: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Market Access- guidelines for breast cancer therapy

Mode of therapy Unmet needs

Hormone Receptor Positive

Primary therapy - hormonal therapy (HT) • Additional line of HT until refractory

Efficacy, 50 % refraction, resistance

Secondary therapy - chemotherapy • Visceral metastasis • Refractory to HT

Efficacy, toxicity, resistance

Hormone Receptor Negative

Her2 positive – chemotherapy plus monoclonal antibody for Her2

Side effects, very high cost

Her2 negative- chemotherapy (combination or sequential single-agent)

Efficacy, toxicity

Page 7: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Oncologist Survey Challenges of existing drugs: 1. What are the biggest challenges oncologists face when treating breast cancer? – In what ways can the drug industry help to alleviate this issue? 2. What instances or subclasses of breast cancer are most lacking effective treatment strategies? – What obstacles do you foresee for novel therapeutics to address these concerns? Potential of new therapy: 3. What if any concerns do you have about biologics-based therapies? – What existing biologics do you currently prescribe regularly? – What types of complications have you run into with these biologics – Do you have any insights into cause (e.g. target-specific reaction or immune reaction to biologic agent)? – In what ways are biologics an improvement over alternative therapies? – In what ways are they still inferior? 4. What information is critical to convince you of the safety and efficacy of a new breast cancer drug? – How are you informed of a novel therapy? – What details go into your decision to adopt its use? – How does your previous criteria change, if at all, when the therapy is a biologic?

Page 8: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Unmet needs and market access for breast cancer therapy

• Early prediction • Survival vs. Tumor

Stage/Grade

Drug resistance • Triple-negative

• Adaptation to single-target Rx

Metastatic disease • Bone, brain, liver, lung

• Leptomeningeal disease

Cancer recurrence • Rate: disease type, treatment

type

• Treatment: location, profile of recurrence

Therapeutic side effects • Quality of life

• Cost of treatment

Page 9: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Drivers for anti-CTLA4 success

1. Ipilimumab (anti-CTLA4) precedent in metastatic melanoma.

2. Shows potential against triple negative and metastatic disease.

3. Potential combination therapy with current standard therapy.

4. Clinician’s openness to biologics.

• Ease of patient enrollment

• Notification of new trials

5. Crossing the blood-brain barrier with T-cell targeted biologics.

6. Less likelihood of immunosuppression and alopecia.

Page 10: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Barriers for adopting anti-CTLA4

• Higher costs of development.

• Limited Bioavailability.

• Government regulations (current and projected).

• Evaluating products that don’t have enough precedent in the system.

• Could be required to demonstrate cost-effectiveness measured in cost per

quality adjusted life year.

• Immune reactions.

• Skin rashes, stomatitis, diarrhea.

• Cardiac Toxicity (trastuzumab/Herceptin).

• HER2 dimerization inhibitors (Pertuzumab).

• Competition: anti-proliferative biologics in clinical trial for metastatic breast

cancer in combination with aromatase inhibitors.

Page 11: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Valuation Valuation of a novel biological therapy for breast cancer

Page 12: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Valuation: Risk adjusted Discounted Cash Flows

DCF have to be corrected to take into account the probabilities of success in each stage:

𝑟𝑁𝑃𝑉 = 𝐶𝐹𝑖(1 + 𝑟)𝑖

𝑅0𝑅𝑖 ,

𝑖

• 𝐶𝐹𝑖 is the CF at time 𝑖.

• 𝑟 is the cost of capital.

• 𝑅0 is the likelihood that the drug gets to the market.

• 𝑅𝑖 is the probability after 𝑖 years being successful.

• 𝑅0/𝑅𝑖 is the likelihood of the cash flow actually materializing.

[1] Stewart JJ, Allison PN, Johnson RS. Putting a price on biotechnology. Nature Biotechonology 2001; 19. [2] Bogdan B, Villiger R. Valuation in Life Sciences. Springer-Verlag 2008.

Page 13: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Preclinical

Clinical I

Clinical II

Clnical III

FDA Review

Revenues

IND Submission NDA Filing

Patent

Expires

Timeline

Page 14: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Failure rate Likelihood of reaching

revenue

Preclinical Passed 18%

Clinical I 13% 18%

Clinical II 60% 21%

Clinical III 43% 51%

Filing 10% 90%

Projected failure rates for developing anti-CTLA4

[1] Monoclonal Antibodies Market in Breast Cancer to 2019, GBI market research report. [2] Oncology Clinical trials: Drug Development Resources and Case Studies. Cutting edge reports.

Page 15: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Phase I Phase II Phase II

Cost per patient $45200 $69700 $74800

Number of Patients

75 155 1300

Overhead 500k 1M 1.5M

Total 3.89M 11.8 M 97.2M

Cost of clinical trial

Page 16: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Name of the drug Price Description

Herceptin $7430 Very expensive

Avastin $8333 Little not worthy

Kadcyla $2954 Expensive

Perjeta $4337 HER2 receptor antagonists

Xgeva $1793 Also used for giant cell tumor of

bone

Range: $1793~$8333

Revenue: Pricing

Page 17: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Low High

Patient Distribution Range 150,000 160,000

Monthly Drug Price Range $1,793 $8,333 Expected Treatment Range

(months) 12 12

Market Share Range (%) 5 35

Revenue: $1,886,851,945

Revenue: Monte Carlo Simulation

Page 18: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

0 2 4 6 8 10 12

rNp

v($

1,0

00

s)

Year

Start of Phase III

Start of Phase II

Summary: rNPV

Page 19: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Deal Structures Trends in M&A and Alliances Deals and Proposed Exit Strategy

Page 20: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Deals and strategic alliances in oncology

Thomson Reuters Therapeutic Area Insights – Oncology Deal Making & Development Trends, 2008 – 2012

• Oncology is one of the largest and fastest growing therapeutic areas in terms of drug development activity

• 131 oncology M&A transactions worth a total disclosed value of $92 billion

• 569 oncology license and joint venture deals worth a total of $44.7 billion

• Phase II oncology assets earned the largest step-up in committed cash for license and joint venture deals: Phase II assets earned a median upfront fee of $31.5 million for Sellers, a 142% jump from the $13 million paid for Phase I assets. Thomson Reuter’s data suggested that no other stage confers a comparable premium.

Page 21: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Oncology remains to be the perennial licensing favorite

Strategic Transactions; Data set includes all deals by major acquirers (large pharma and biotech companies with marketed products)

Page 22: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

There are two main strategic options to keep in mind

Venture capital

funding and acquisition

Out-licensing

Page 23: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Venture Capital How venture capitals have adopted to newer trends

Page 24: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Venture Capital flow of money is disconnected

Quaker Partners

Page 25: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

How VCs decide on picking a portfolio to invest

Quaker Partners

Page 26: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Venture fund investment criteria “Operate according to the Rule of Threes: Invest in Phase III drugs and target a 3x return in three years”

- Jim Healy, General Partner of Sofinnova Ventures -

Superior Technology • Breakthrough technology, product or services

• Solid intellectual property

Large Market(s) or Clearly Defined Specialty Market • Attractive to wide range of potential co-development and marketing partners

• Attractive to multiple acquirers

• Clear strategy of product and company development

Capital Efficient • Clear development and regulatory milestones

• Reasonable clinical trial and manufacturing costs

Financially Attractive • Appropriate valuation

• Ability to form strong investment syndicate

• Multiple exit possibilities

Quaker Partners

Page 27: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Venture capitals are hanging on longer until the trade sale

HBM Pharma, Biotech M&A Report

Page 28: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Avalon Ventures: Discovery-Deal-as-Exit

• Afraxis Pharmaceuticals (January 2013) • Alliance with Genentech – undisclosed upfront plus up to $187.5 million in

milestones for kinase-inhibitor discovery program

• Zacharon Pharmaceuticals (January 2013) • $10 million plus undisclosed earn-outs to buy glycosylation technology

biotech

• RQx Pharmaceuticals (February 2013) • Alliance with Genentech to discover novel antibiotics

• Undisclosed upfront plus $111 million in potential milestones

Page 29: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Avalon/GSK: scaling the model

• Pharma needs innovative pipeline candidates. VCs need faster, cheaper and easier exits.

• Avalon Ventures spends up to $30mm and GSK up to $465mm to fund up to 10 single-asset biotech companies.

• GSK can exercise an option to acquire each company at IND stage.

• Each acquisition would return 3-4x to Avalon, and earn-outs could take returns to 14x.

Page 30: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Most active life science venture capital firms in 2013 • Domain Associates

• HealthCare Ventures

• Polaris Venture Partners

• MPM Capital

• Alta Partners

• ARCH Venture Partners

• Flagship Ventures

• SV Life Sciences Advisers

• Sanderling Ventures

• Kleiner Perkins Caufield & Byers

• InterWest Partners

• Sofinnova Ventures

• Burrill & Company

• New Enterprise Associates

• OrbiMed Advisors

• Quaker BioVentures

• Venrock Associates*

National Venture Capital Association, FierceBiotech

Page 31: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Corporate Venture Capital The investment of corporate funds directly in external start-up companies

Page 32: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

The Impact of CVC on the Atlas Venture Portfolio

Bruce Booth, Atlas Venture; Blue in pie chart represents percentage of portfolio companies with corporate venture investors.

Page 33: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

CVC may be an another option

Impact on acquisition prices • Building relationships, accessing technology early • Filling the void left by traditional VC

START-UP, October 2012; Acquisitions of VC-backed biotechs from Jan 2006-Aug 2012

Page 34: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Pharma As Strategic LP

Lilly Mirror Portfolio Merck Research Venture Fund

venBIo Index Life IV

Page 35: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Previous Alliances and Acquisition Transactions

Date Big Pharma Revenue

(million $) Startup

(location) Stage of the

product Product name, lab code

or generic name Deal Value

Upfront (million)

Details on the deal

Mar012010 Novartis $58,831.00mm Institut Merieux Phase II TG4010; MVAMUC1IL2 $10.00mm $10.00mm Total Milestones (pre and postsales): $955.90mm

Jul012011 Roche $52,531.70mm mtm Laboratories AG $265.00mm $180.00mm

Dec012011 Amgen Inc. $18,676,000,000 Watson Pharmaceuticals Inc. N/A Biosimilars to Herceptin, Avastin, Rituxan, and Erbitux 400,000,000 N/A

Apr012012 Celgene Corp. $6,493,900,000 Epizyme Inc. Pre-Clinical DOT1L HMT Inhibitor 90,000,000 90,000,000

Development Milestones = $25,000,000; Milestones = $160,000,000

Jul012012 Eisai Co. Ltd. $8,035,180,000 Verastem Inc. Pre-Clinical Salinomycin (VS507) N/A N/A

Verastem owns the analogs generated in the 12-month collaboration. Eisai receives royalties on commerical sales of identified products. During the term of the agreement, Eisai has a right of first negotiation for products that are created through the collaboration.

Jun012013 Amgen Inc. $18,676,000,000 Onyx Pharmaceuticals Inc. Phase III Nexavar (sorafenib) 9,167,350,000 9,167,350,000

Jun012013 Johnson & Johnson $71,312,00mm Arnolherapeutlcs Inc.

Research, Preclinical

Onapristone N/A N/A

Jun012013 Johnson & Johnson $71,312,00mm Aragon Pharmaceutlcals Inc. Phase II ARN509 $1,000.00mm $650mm

Aug012013 Bayer HealthCare LLC $10,143.50mm Compugen Ltd. Research; Preclinical N/A, "Immune checkpoint inhibitor" $40.00mm $10.00mm

Total Milestones (pre and postsales): $500.00mm

Page 36: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Date Big Pharma Revenue

(million $) Startup

(location) Stage of the

product Product name, lab code

or generic name Deal Value

Upfront (million)

Details on the deal

Sep012013 Novartis $58,831.00mm Regenerex LLC Research; Discovery Facilitating Cell Therapy N/A N/A

Sep012013 Roche $52,531.70mm Heidelberg Pharma GMBH Research; Preclinical ADC technology N/A N/A

Sep012013 Teva Pharmaceutical Industries Ltd. $20,314.00mm

Cancer Research UK’s Cancer Research Technology Ltd. (CRT)

Research Discovery N/A N/A N/A

Oct012013 AstraZeneca $25,711.00mm Taris Biomedical Inc. Clinical Taris N/A N/A

Oct012013 Johnson & Johnson $71,312,00mm DCPrime BV Pre-Clinical DCOne N/A N/A

Nov012013 Clovis Oncology 0 EOS SPA Phase II Lucitanib 420,510,000 200,500,000

Dec012013 Takeda $18,338.30mm Natrogen Phase II Naturaalpha N/A N/A

Dec012013 Johnson&Johnson $71,312,00mm CSL Ltd. Clinical Development Phase I CSL362 N/A N/A

Jan012014 AriadPharmaceuticalsInc. $45.56mm

Specialised Therapeutics Australia Pty. Ltd. marketed Ponatinib N/A N/A

Jan012014 Johnson & Johnson $71,312,00mm Scholar Rock Inc. Research; Discovery N/A, autoimmune disease and cancer immunotherapies N/A N/A

Jan012014 Johnson & Johnson $71,312,00mm Adaptive Biotechnologies Corp. Research; Preclinical immunoSEQ; The Drug: N/A, for Cancer Immune Disorders N/A N/A

Jan012014 Johnson & Johnson $71,312,00mm BiocerOX Products BV Research; Discovery N/A, for Tumor, Solidtype N/A N/A

Jan012014 AstraZeneca PLC $25,711.00mm Probiodrug AG Research; Preclinical N/A, for Cancer Inflammation N/A N/A

Jan012014 Novartis AG $58,831.00mm Eureka Therapeutics Inc. Research; Discovery N/A, ESK antibodies for all indications N/A N/A

Jan012014 AstraZeneca PLC $25,711.00mm Flanders Institute for Biotechnology Research; Preclinical

N/A, small molecule MALT1 protease inhibitors N/A N/A

Jan012014 Johnson & Johnson $71,312,00mm Nodality Research; Discovery SCNP N/A N/A

Feb012014 Novartis $58,831.00mm CoStim Phamaceuticals Inc N/A, drugs for Cancer Immune Disorders

100% Equity purchase N/A

Feb012014 Pfizer $51,584.00mm Ichor Medical Systems Inc. Research; Preclinical TriGrid intramuscular electroporation technology N/A N/A

Mar012014 Johnson & Johnson $71,312,00mm Genmab AS Phase I Daratumumab $135.03mm $135.03mm Total Milestones (pre and postsales): $1,100.00mm

Mar012014 BristolMyers Squibb Co. $16,385.00mm Five Prime Therapeutics Inc. Research; Discovery N/A, for cancer immunotherapeutics $50.50mm $41.00mm

Total Milestones (pre and postsales): $300.00mm

Apr012014 Roche $52,531.70mm Oryzon Genomics SA Phase II ORY1001 $21.00mm N/A Total Milestones (pre and postsales): $500.00mm

Apr012014 Celgene Corp. $6,493.90mm Forma Therapeutics Holdings LLC Research; Discovery N/A, for cancer $225.00mm $225.00mm

Total Milestones (pre and postsales): $375.00mm

Page 37: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Celgene Corporation An example of an active big pharma in the alliances deals

Page 38: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Celgene deal making strategies

• Shaping of its future pipeline by signing early-stage deals with a variety of innovative biotechnology companies. This is backed by billions of dollars off lenalidomide (Revlimid) for multiple myeloma and its capability to run late-stage clinical trials.

• Structural flexibility by molding a specific deal, in a specific way, for a specific company

“Celgene stands out in my mind as being very willing to say ‘Ok, how do you approach drug discover? Ok, we buy into that. We do it a little bit differently, but let’s let you try your approach”

- Steven Tregay, CEO of Forma Therapeutics -

• Hands-off method by allowing its partners to manage and operate.

• Approaches • Build-to-Buy: Upfront payment to collaborate on certain programs and gaining of the exclusive option to buy the

company down the road. (Quanticel Pharmaceuticals, VentiRx Pharmaceuticals)

• Large per-drug check tied to various milestones (Concert Pharmaceuticals)

• Extendable option to license and develop any of the pipeline drugs (Agios Pharmaceuticals)

Page 39: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Celgene in preclinical testings

Company Location Date of Deal Scientific Niche Size of Upfront Payment

GlobeImmune Louisville, CO May, 2009 Cancer immunotherapy $40m

Agios Pharmaceuticals Cambridge, MA April, 2010 Cancer metabolism $130m

Foundation Medicine Cambridge, MA May, 2011 Cancer diagnostics, patient stratification Undisclosed

Acceleron Pharma Cambridge, MA August, 2011 Anemia drug development $25m

Quanticel Pharmaceuticals San Francisco, CA November, 2011 Identifies biomarkers for drug discovery $45m over three years

Epizyme Cambridge, MA April, 2012 Epigenetics $90m

AnaptysBio San Diego, CA April, 2012 Antibodies for cancer & inflammation Undisclosed

Inhibrx San Diego June, 2012 Undisclosed antibody drug candidate undisclosed

VentiRx Pharmaceuticals Seattle Oct., 2012 Immunotherapy $35m

PharmAria San Diego Oct., 2012 Small molecules for cancer, fibrotic disease undisclosed

Sutro Biopharma South San Francisco Dec., 2012 Antibody-drug conjugates, bispecific antibodies

undisclosed

Bluebird Bio Cambridge, MA Mar., 2013 Gene Therapy $75m

Presage Biosciences Seattle Mar., 2013 Cancer drug discovery technology $13m

Forma Therapeutics Watertown, MA April, 2013 Small-molecule drug discovery $200m (includes research payments)

Concert Pharmaceuticals Lexington, MA May, 2013 Deuterium-modified drug candidates undisclosed

Morphosys Germany June, 2013 Antibodies for myeloma, leukemia $92m

Tengion Winston-Salem, NC July, 2013 Regenerative medicine for kidney disease $15m equity investment

Acetylon Pharmaceuticals Boston July, 2013 Histone deacetylase inhibitors $100m

Array Biopharma Boulder, CO July, 2013 Inflammation drug discovery $11m

Source: Company reports, Celgene regulartory filings

Big

gest

Bio

tech

IPO

s o

f 2

01

3

Page 40: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Recommendation Potential Exit Strategies

Page 41: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Royalties Sales

Milestones (Go/No go) Phase III NDA Filing FDA Approval

Sold post-Phase II for >5x to Large Pharma

$ 16 M raised for Early Development Phase I and Phase II

Financing by Early Stage Venture Capital Firm

Royalties

Sales

Milestones (Go/No go)

Phase III NDA Filing FDA Approval

Financing by out-licensing

Strategy to take anti-CTLA4 to FDA approval

A B

Page 42: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

0 2 4 6 8 10 12

rNp

v($

1,0

00

s)

Year

Start of Phase III

Start of Phase II

Venture Capital

Sell to Big Pharma

A. Strategy to take anti-CTLA4 to FDA approval

Page 43: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

0 2 4 6 8 10 12

rNp

v($

1,0

00

s)

Year

Start of Phase III

Start of Phase II

Outlicensing

B. Strategy to take anti-CTLA4 to FDA approval

Page 44: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

Recap

Come up with strategies to take anti-CTLA4 through FDA approval

Sell or License Market Access Valuation

• Huge unmet needs in metastatic breast cancer

• Venture capital entry followed by acquisition

• Out-licensing

• At the end of Phase II, anti-CTLA4 has a value of $400 M

Page 46: Final Presentation€¦ · •We provided analysis of market access as well as valuation for anti-CTLA4, and recommended strategies to finance the cost to FDA approval. •Methods

1. Monoclonal Antibodies Market in Breast Cancer to 2019, GBI market research report 2. Bogdan B, Villiger R. Valuation in Life Sciences. Springer-Verlag 2008. 3. Drug prices: http://www.goodrx.com/breast-cancer/drugs 4. MBC statistics: http://mbcn.org/developing-awareness/ 5. MBC statistics: http://ww5.komen.org/BreastCancer/MetastaticBreastCancerHome.html 6. Metastatic Breast Cancer - Statistics, Diagnosis, Treatment Options:

http://breastcancer.about.com/od/types/a/mets_bc_gradish.htm 7. Valuation model uses the rNPV method developed by Jeffrey J. Stewart (J. Stewart. Biotechnology

Valuations for the 21st Century. Milken Institute Policy Brief 2002. In press; J. Stewart et al. Putting a Price on Biotechnology. Nature Biotechnology 2001. 19:813).

8. Strategic transaction database

Appendix