GTX: FILLING THE GAPA recommendation to Cure on Gastrex drug license opportunities

YBPS Marketing Case Competition

Richard Hernandez, MBALiying Jin, MS Statistics

Selina Tirtajana, MPHMike Ran Zou, PhD Pathology

* Candidates

Biotechnology & Pharmaceutical Solutions

PROBLEM STATEMENT

IBD is a chronic inflammation of the gastrointestinal tract. Two major types of IBD are Crohn’s Disease (CD) and Ulcerative Colitis (UC) – which affect different parts of the GI tract.

Currently, there are unmet needs in IBD therapy and Cure has been presented with licensing opportunities (GTX-001 & GTX-002) from Gastrex that can potentially fulfill these needs.

Based on pre-clinical studies results and market analysis of these two drugs, we will provide recommendation for Cure.

IBD PATH PHYSIOLOGYAntigen

GI Flora

1

1Antigen Processing & Presentation, Activation of Macrophages

Activated Macrophage

Activated T-Cell

TNFα IFNγTh1 Cell

Th2 Cell

IL-4IL-12

IFNγ

IL-10

Endotheliu

m

Intestinal Lumen

2

2

Antigen Recognition & Activation of CD4+T Cell

Recruitment, Migration, and Adhesion

5

Generation of Th1/Th2 Response3

3

Production of Proinflammatory Cytokines

4

4

5

Macrophage

Macrophage

Monocytes

Epithelium

Neutrophils

TNFα

IFNγ

IL-10

PREVALENCE ESTIMATES OF CD & UC IN 2008

US UK Italy Spain France Germany Japan China

479,000

88,000

23,000 35,000

120,00090,000

26,000 19,000

CD Prevalence Estimate

US UK Italy Spain France Germany Japan China

525,000

148,000

70,00044,500

80,000 100,000 96,000

154,000

UC Prevalence Estimate

GTX-001 SHOWS PROMISING RESULTS IN PRE-CLINICAL STUDIES

GTX-001 is a Monoclonal Antibody that targets VLA-1 Blocks immune cell trafficking/activation Pre-clinical (animal studies) results

Improved inflammation score within 4-6 wks Dose of 2mg/kg intravenously (IV) every 48 hours Drug tolerated up to 6 mg/kg

Good substitute of existing biologicsin the market

VLA-1

GTX-001

GTX-002 SHOWS PROMISING RESULTS IN PRE-CLINICAL STUDIES GTX-002 is a small molecule compound used to

induce T-cell death by targeting IκB Kinase Effectiveness confirmed by cell-based assays Pre-clinical (animal studies) results

Remodeling of GI commensal flora indicates altered pathology

Susceptibility to bacterial infection demonstrates immunosuppresion

Improved clinical scores when used in combination with 5-ASA and/or steroids

Good remission, but not induction, agent Dosage above threshold limit causes liver

and kidney toxicity 50 mg/kg orally or 5 mg/kg IV

GTX-002

cell death

Type of treatment Pros & Cons

5-ASA (Asacol, Lialda, Pentasa, Colazal, Sulfasalazine)

-Reliable & effective for mild CD/UC cases-Relatively affordable-Used to maintain remission in moderate cases (but lack efficacy in more severe cases)

Steroids (Budesonide, Prednisone, Methylprednisolone)

-Effective for induction of remission-Cheap-Long term side effects make it a poor agent to maintain remission

Immunomodulators (Azathioprine, 6-MP)

-Effective maintenance therapy for moderate to severe cases (up to 60% response rate)-Slow onset & high rate of toxicity

Biologics (Infliximab, Adalimumab, Natalizumab, Certolizumab)

-Effective in severe cases-Expensive, relatively inconvenient to administer-Few clinical data in UC cases-Patients don’t respond / lose response to TNF-α inhibitor over time.

CURRENT TREATMENT

UNMET NEEDS IN IBD THERAPY

Mild (5-ASA)

Moderate(5-ASA,

Steroids, IM)

Severe(Steroids, IM,

Biologics)Crohn’s Disease/Ulcerative Colitis

NONE 1. Induction agent safer than steroid

2. Remission agent that is more effective than 5-ASA and/or

has faster onset & safer than IM

3. Substitute to anti-TNF with safer

profile

4. Biologics with better sustained remission rates

Mild IBD cases are well served by 5-ASA Severe patients failed to respond to anti-TNF therapy,

which dominates the current market to treat moderate to severe IBD

5-ASA

5-ASA

Steroid

5-ASAMild

Moderate

Severe

Steroid

IM1

Biologic

Biologic2

Treatment Refractory

Treatment Refractory

No Treatment

No Treatment

1 2 3 4

5 6

Maintenance

Induction

Maintenance

Induction

5-ASA

5-ASA

Steroid

5-ASA

Steroid

IM1

Biologic

Biologic2

5-ASA

5-ASA

Steroid

5-ASA

Steroid

IM1

Biologic

Biologic2

Patient Segments in Crohn’s Disease

POTENTIAL TARGET MARKET FOR GTX001 AND GTX002

Choice of market segments based on pre-clinical findings

GTX002

GTX001

DRUG VALUATION ON THE MARKET Assess net value at the

present day by discounting cash flow of future revenue and subtracting license fees and other associated payouts.

GTX-001 in the moderate to severe market is sufficient to provide positive NPV

Generic biologics are not competitive

Sensitivity analysis shows that NPV is robust across a spread of various growth rates.

GTX-002 fails to meet a positive NPV

Growth Rate NPV (discount rate at 11%)

-1% -16.38

-0.9% 0

0% 105.98

0.6% 188.97

3% 609.27

5% 1099.33

Growth Rate NPV (discount rate at 9%)

-1.8% 0

-0.9% 118.00

0% 283.04

1% 476.03

3% 965.43

5% 1633.84

RECOMMENDATION: FILL THE GAP!

Purchase license for GTX-001 There is a demonstrated market need Added advantage of being a biologic in the US

because barriers of entry NPV is positive and therefore a profitable drug

Do not purchase license for GTX-002 under the current agreements. Market is well served by other available agents 56% of market share is required in order to break

even in the licensing investment Consider renegotiating license fee or changing

payout structure to delay payment

Q&A

CITATION

Title slide image

http://www.scumdoctor.com/images/How-Much-Does-Enbrel-Suppress-The-Immune-System.jpg

Biologics cannot have generic synthetic http://www.businessweek.com/bwdaily/dnflash/co

ntent/mar2007/db20070314_175878.htm Decision tree for pharmaceutical acquisition.

http://www.springerlink.com/content/j28414r31p013331/fulltext.pdf

Sands, Bruce E. Therapy of Inflammatory Bowel Disease, GASTROENTEROLOGY 2000;118:S68–S82

INTERNATIONAL MARKET FOR CD?

Prevalence Market Share Potential Market Share

US54%

UK10%

Italy3%

Spain4%

France14%

Germany

10%

Japan3%

China2%

US70%

UK8%

Italy1%

Spain2% France

13%

Germany6%

Japan0%

China0%

INTERNATIONAL MARKET FOR UC?

Prevalence Market Share Potential Market Share

US63%

UK16%

Italy4%

Spain2%

France5%

Germany5%

Japan3%

China1%

US43%

UK12%Ital

y6%

Spain

4%

France7%

Germany8%

Japan8%

China13%