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transcript
Company OverviewJefferies 2017 Global Healthcare Conference
Forward-Looking Statements
This presentation contains forward-looking statements. All statements other than statements of historical facts included in this presentation are forward-looking statements that are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such statements. These risks, trends and uncertainties are in some instances beyond our control.
Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will” and other similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. In particular, any statements regarding clinical trial results, potential regulatory approval and expected commercial results for Envarsus® (formerly LCP-Tacro™) are considered forward-looking statements. These forward-looking statements involve substantial risks and uncertainties and are based on our assessment and interpretation of the currently available data and information, current expectations, assumptions, estimates and projections about our business and the biopharmaceutical and specialty pharmaceutical industries in which we operate.
Important factors that may affect our ability to achieve the matters addressed in these forward-looking statements include, but are not limited to; our ability to complete the development of, obtain regulatory approval for, and commercialize, Envarsus®; our ability to hire and retain personnel in a competitive industry; our reliance on third parties to manufacture Envarsus® and to conduct clinical trials for Envarsus®; competition from existing therapies and therapies that are currently under development, including Prograf® (tacrolimus), Advagraf® / Astagraf XL® (tacrolimus), and Nulojix® (belatacept); whether we are able to obtain additional financing, if needed; risks of maintaining protection for our intellectual property; risks of an adverse determination in intellectual property litigation; and risks associated with stringent government regulation of the biopharmaceutical industry. The foregoing is not an exhaustive list of risks that may impact the forward-looking statements used herein.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements, which speak only as of the date hereof. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. We do not have a policy of updating or revising forward-looking statements and, except as required by law, assume no obligation to update any forward-looking statements.
The material presented in this document is not intended for product promotion
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Veloxis Pharmaceuticals: Our Competitive Advantage
• Envarsus XR is an orphan drug with peak potential of $250M-$400M in the US alone
– Orphan Drug Exclusivity through July 2022, patents to 2028
– Highly specialized market
– Robust, broadly applicable clinical data
– Clinically-meaningful differentiation and value message
– Reimbursement and Price
• Led by an established management team with a proven track-record for:
– Commercializing orphan assets with inherent challenges
– Maintaining a high frequency for acquiring, launching and maximizing value of strategic assets
– Rapid turnaround or realization of full value of distressed assets
– Ensuring management process and operational efficiency
Veloxis is an orphan therapeutics company focused on driving worldwide access and
growth of Envarsus XR in organ transplantation and creating value through M&A
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Company Structure & Ownership
Major institutional shareholders:
– Lundbeckfond invest A/S (42%)
– Novo A/S (42%)
Market Cap. ~$270M
Veloxis Pharmaceuticals A/S
Veloxis Pharmaceuticals, Inc.
• Parent company
• Formerly LifeCycle Pharma A/S
• Public Limited Company
• NASDAQ OMX:VELO
• Level 1 ADR NASDAQ USA
• Accessible $250M NOLs
• Wholly owned US subsidiary
• Arm’s length licenses
• APA class transfer price validation
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Management Team
Craig A. Collard
President & Chief Executive Officer
• 23 Years in Industry
• Broad commercial experience
• Founder, Chairman & CEO, Cornerstone Therapeutics
• Board member: BioMarck Pharmaceuticals, Hilltop Home Foundation
Alastair McEwan
EVP & Chief Operating Officer
• 30 Years in Industry
• Broad experience including financial, M&A, GM roles and board appointments in
private and public companies
• Chairman & CEO, Ocean Therapeutics
• Formerly Chairman, CFO, Cornerstone Therapeutics; President, Inveresk
Research; Interim CEO, Averion
Mark Tengler
Chief Technical Officer
• 27 years in the pharmaceutical industry
• Broad experience in Drug Delivery, CMC, Operations, Quality, Regulatory, R&D,
Intellectual Property and fund raising including, IPO
• Former positions include President, Chief Technology Officer, Co-President and
CTO, VP of Business Development and CTO.
• Named Inventor of 12 issued patents
Brett Fleshman
VP, Strategy & Corporate Development
• 17 Years in Industry
• Broad commercial & BD experience in pharma, biotech and medical devices at
companies including Genzyme, Chiesi, Cornerstone Therapeutics and Ther-Rx
Corp.
• Formerly Sr. Director Strategy & Corporate Development, Chiesi USA; Sr.
Director of Marketing, Cornerstone Therapeutics
Ira DuarteVP, Finance and Controller
• 25 years in Accounting and Finance, including 8 years in the Pharma Industry
• Broad experience in SEC regulatory compliance, internal controls/Sarbanes-Oxley,
mergers and acquisitions and financial budgeting, forecasting and analysis
• Formerly Sr Director, Corporate Finance, Chiesi USA; Sr Director, Accounting and
FP&A, Cornerstone Therapeutics; Sr Assurance Manager with Ernst & Young LLP
Stacy WheelerVP, Operations
• 16 Years in Industry
• Global Pharmaceutical Supply Chain, Logistics, Distribution, and Trade Relations
experience at companies including Chiesi, Cornerstone Therapeutics, and Biovail
Pharmaceuticals.
• Formerly Sr. Director, Supply Chain, Chiesi USA; Director, National Accounts &
Supply Chain, Cornerstone Therapeutics
Rob PhiloVP, Market Access
• 22 Years in BioPharm Industry
• Broad sales, Marketing and Managed Care experience in the pharma and biotech
industries at companies including Dura/Elan, Schwarz, HealthPoint and Reckitt
Benckiser (Indivior)
• Former Head of Managed Care and State Government Affairs and Head of Pricing
and Market Access at Indivior, Director of Medicare Part D./Managed Care at
HealthPoint, Director of Sales Training at Dura/Elan
Mark HensleyNational Sales Director
• 10 Years in Industry
• Broad commercial experience in pharma at companies including Chiesi USA and
Cornerstone Therapeutics.
• Formerly Sr. Regional Business Manager, Chiesi USA; National Account Manager,
Cornerstone Therapeutics
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Veloxis management team has proven track record for building
value through company and asset acquisitions
2008
October 2008
Cornerstone BioPharma Holdings
merges with Critical Therapeutics
and changes name to Cornerstone
Therapeutics
May 2009
Announced ~$70M strategic
alliance with Chiesi and gained
U.S. marketing rights for
Curosurf (poractant alfa)
July 2009
Announced agreement to
acquire rights to Factive from
Oscient Pharmaceuticals
December 2011
Announced acquisition of
Cardiokine Inc. and received WW
rights to CRTX080
March 2012
Divested certain product rights
for Factive and Spectracef
2010 2011 20122009
June 2012
Acquired EKR Therapeutics
for approximately $150M
November 2012
Licensed U.S. marketing
rights for Bethkis
(Tobramycin Inhalation
Solution) from Chiesi
2013
May 2013
Licensed U.S. marketing
rights for Pertzye
(pancrelipase) from
Digestive Care, Inc.
2014
February 2014
CRTX Stockholders
Approve Merger with
Chiesi
$25MM investment $300MM sale value6 years of organic and inorganic growth
Timeline for Development and Sale of Cornerstone Therapeutics to Chiesi Farmaceutici
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Product Profile
Novel Transplant Immunosuppressant Growing in Large, Established Markets
Approvals, Orphan Exclusivity & Patents
Progress Towards Global Access
• Once-daily formulation of tacrolimus: the gold-
standard immunosuppressant for transplant
• Proprietary MeltDoseTM technology provides
controlled release over 24 hours throughout the
gastro-intestinal tract
• Effective immunosuppression without toxic peak
blood concentrations from IR-Tac
• FDA approved with Orphan Drug Exclusivity for
conversion from Prograf for prophylaxis against
kidney transplant rejections
• Orphan Drug Exclusivity through July 2022
• EMA approved for de novo and conversion
prophylaxis against both kidney and liver transplant
rejections
• Orange-book listed patents to 2028
Low Risk due to Robust Development
• US Market: $1.9B, EU Market: >$500M
• Competition:
• Prograf® (Astellas): BID, Generics since 2009
• Generics to Prograf®
• Astagraf® (Astellas): QD, Patents to 2019
• Partnered in 43 Countries: EU (Chiesi), China
(Chiesi), MENA (Taiba), and Canada (EVL/Paladin
Labs)
Astagraf XL and Prograf are registered trademarks of Astellas Pharma, Inc.
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Our product, Envarsus XR, is the fastest growing product in the $1.9B
tacrolimus marketplace with peak sales potential of $250M-$400M
Adult Kidney Transplant
Tacrolimus Market (US)250
200
150
100
50
020212016 2022 20242023201920182015 2017 20252020
Ad
ult
Tacro
lim
us
Pati
en
ts (
K)
Tacrolimus market opportunity: ~$1.9B
Envarsus XR US market share target range: 10%-15%
Envarsus XR US peak sales potential: $250M-$400M
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17
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19
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2012 2013 2014 2015 2016
New
Kid
ney T
ran
spla
nts
(K
)
New Kidney Transplant Patients (US)
+7%
+5%
+1%+3%
The number of new kidney transplants is
growing at an accelerated rate due to:
• Improved organ allocation system (2015)
• Increased number of deceased donors
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Tacrolimus is the gold standard immunosuppressant in transplant,
but poses challenges as a Narrow Therapeutic Window drug
Overimmunosuppression
can lead to:
• Opportunistic infections
• Nephrotoxicity
• Neurotoxicity
• New onset diabetes
• Impact on long-term graft survival
Underimmunosuppression
can lead to:
• Chronic rejection
• Acute rejection
Unmet need for controlled delivery of tacrolimus
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Envarsus XR is effective once-daily tacrolimus which solves
the critical unmet need
1
• ENVARSUS XR demonstrates an optimal pharmacokinetic profile compared with
standard of care (Prograf® or generic IR-TAC)
– 30% lower peak concentration compared to Prograf
– Eliminates the high initial peak associated with Prograf
– Similar AUC and overall exposure to achieve required efficacy
Envarsus XR PK Profile
30% lower
peak concentration
Prograf is a registered trademark of Astellas Pharma, Inc.
Generic variability is a major concern among prescribers of
tacrolimus, who demonstrated unprecedented resistance to
generic alternatives to Prograf®
0%
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Prograf® Generics
Prograf is a registered trademark of Astellas Pharma, Inc.
27%5 years
after GxLaunch
55%1 year
after GxLaunch
Unmet need for controlled delivery of tacrolimus
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Medication non-adherence is associated with significant
consequences following kidney transplantation
Unmet need for controlled delivery of tacrolimus
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Large Unmet Need for Envarsus XR:
1 in 3 transplant recipients are Rapid Metabolizers of tacrolimus at
higher risk of rejection and treatment failure, $600M opportunity
Carriers of the CYP3A5*1 gene are “Rapid
Metabolizers” of tacrolimus
1. Require higher tacrolimus doses to achieve
therapeutic tacrolimus trough concentrations
2. At risk of underimmunosuppression
Analysis from phase 3 trials in African-American kidney
transplant recipients showed fewer treatment failures
for Envarsus® compared to twice-daily Prograf®
All ethnicities are potential carriers of the CYP3A5*1
allele, with African Americans at the greatest risk:
– Caucasians (5%–15%)
– Asians (15%–35%)
– Hispanics (13%-26%)
– African-Americans (45%–80%)
Envarsus XR solves the unmet need for Rapid
Metabolism of tacrolimus, by providing controlled
release over 24 hours throughout the GI tract
Wh
ole
Blo
od
Co
nc
en
tra
tio
n (
ng
/mL
)
Prograf is a registered trademark of Astellas Pharma, Inc.
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Envarsus XR launch momentum in US shows deep penetration
into transplant centers, steady growth in unique prescribers and a
critical mass of prescriptions
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63%of US adult transplant centers
have placed patients on
Envarsus XR since launch
prescribers have generated
prescriptions since launch
477 16,140prescriptions have been
generated since launch
patients are estimated to be currently on Envarsus XR
in the US1,850
63% of transplant centers have already utilized Envarsus XR
127 of 198U.S. Adult Transplant Centers have
placed patients on Envarsus XR in the 18
months since launch (December 2015)
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68% of conversions to Envarsus XR are from generic tacrolimus,
and the number of patients switching from once-daily Astagraf XL®
is 8x the incumbent product’s current 1% market share
Astagraf XL®
(Once-Daily
Tacrolimus)
8%
Cyclosporine Drugs
3%
Prograf® (Tacrolimus)
19%
Non-CNI Drugs
(Sirolimus, Everolimus)
2%
Generic Tacrolimus
68%
Sources of Conversions to Envarsus
Astagraf XL and Prograf are registered trademarks of Astellas Pharma, Inc.
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As a transplant immunosuppressant for patients with ESRD,
Envarsus XR benefits from mandatory Medicare coverage
64%
32%
4%
Current Envarsus XR Payer Mix
(Primary Coverage)
Medicaid & Other
MedicareCommercial/
Cash
Payer Access
75%of prescriptions are
approved by payers
J7503Unique HCPCS J Code
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Pharmacy/Distribution
74% of prescriptions are
dispensed through
Specialty Pharmacies &
Transplant Outpatient
Pharmacies
Envarsus EU update: Strong uptake continues
As of Q1 2017, an estimated 4,150 patients are on Envarsus in 18 European/
CIS countries
*Note: Use in de novo patients is included in the Envarsus label in Europe
Patients on Envarsus by European/CIS Country
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Envarsus XR Now Licensed in 43 Countries
Canada
Licensed June 2017 to Endo Ventures
Limited for commercialization by Paladin
Labs Inc.
Upfront payment: $1.25M USD
MENA
Licensed in March 2017 to Taiba Healthcare
for 14 countries in Middle East/North Africa
Upfront payment: $1M USD
Europe/CIS & China
Europe/CIS licensed in October 2012, and
China licensed June 2017 to Chiesi
Farmaceutici S.p.A.
Upfront payment for China: $6M USD
Available regions/countries with active
licensing efforts:
• Latin America
• ASEAN countries
• Japan
• Korea
• Israel
• South Africa19
Veloxis Corporate Strategy
Grow Envarsus &
acquire strategic
products
Transform Veloxis
through a merger,
IPO or large
acquisition
Grow Veloxis through
continued strategic
acquisitions
Acquire for synergy in transplant or
chronic therapy
Maintain operational efficiency
Create sustainable cash positive
business
Large strategic or transformative
acquisition
Access NOLS
Domicile in lower tax jurisdiction
Normalize investor base
Establish liquidity
Grow investor base
Create multiple layers for arbitrage
Continued aggressive M&A execution
Investments in key growth drivers
including pipeline
Broaden Specialty focus
All acquisitions to focus around
Companies Competitive advantage
Grow company value and arbitrage
points
Imp
act
Act
ion
Company
profitable in 2018
20
Financial Highlights
21
Three Months Ending March 31, 2017 USD’000
Revenue
Europe 428
United States 2,572
Licensing (upfront) 1,000
Total revenue 4,000
Gross profit 3,109
Operating result (loss) (5,223)
Net loss (5,891)
Cash and cash equivalents 7,243
Loan facility (22,000)
Summary
• Veloxis is a commercial-stage orphan therapeutics company with all components to
support future growth
– Supported by high-quality major institutional investors
– Led by cohesive management team with a proven track record for growth and M&A
– Well-differentiated lead asset launched in a $1.9B market
– Strong performance demonstrated in both US and EU markets
• Substantial focus on identifying and executing on the best option for company
transformation (e.g. merger, IPO or large transaction) to meet strategic objectives
– Normalize investor base and reach US markets
– Optimize shareholder value from organic growth and future transactions
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