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CNS Orphans and Disease Subsegments: The Road Less Traveled Ginger S. Johnson, PhD Vice President Vice President Defined Health Otb 24 2012 October 24, 2012 © Defined Health, 2012 CNS Orphan/Subsegmenting Insight Briefing © Defined Health, 2012 1
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CNS Orphans and Disease Subsegments: gThe Road Less Traveled

Ginger S. Johnson, PhDVice PresidentVice PresidentDefined Health

O t b 24 2012October 24, 2012

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

© Defined Health, 2012 1

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Defined Health is pleased to present:

BioEurope Spring | March 11 – 13, 2013Barcelona, Spain

www.therapeuticinsight.com

24th Annual Cancer Progress ConferenceMarch 5 – 6, 2013 | Conrad New York

www.cancerprogressbyDH.com

Defined Health will also be participating in the following industry events:

CPRIT conference | October 24 - 26, 2012 - Austin | http://dfndhlth.com/CPRIT-2012 Life Sciences Summit | October 31 - November 1 2012 - New York | http://dfndhlth com/LSS-2012Life Sciences Summit | October 31 - November 1, 2012 - New York | http://dfndhlth.com/LSS-2012

US Japan Health Sciences Dialogue 2012 | November 27 - 28, 2012 - Philadelphia | http://dfndhlth.com/usjpn-hsd12

Current Trends in Biosimilars Development and Regulatory Pathways in the Global Marketplace 2012 | December 4 - 5, 2012 - Philadelphia | http://dfndhlth.com/CTBDRPGM-2012

ASH | December 8 11 2012 Atlanta | http://dfndhlth com/ASH 2012

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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ASH | December 8 - 11, 2012 - Atlanta | http://dfndhlth.com/ASH-2012JPM & Biotech Showcase | January 7 - 13, 2013 - San Francisco | http://dfndhlth.com/bts-2013

BioEurope Spring 2013 | March 11 - 13, 2013 - Barcelona | http://www.ebdgroup.com/bes/index.php

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Our Disclaimer

The information in this presentation has been obtained from what are b li d t b li bl d h b ifi d h iblbelieved to be reliable sources and has been verified whenever possible. Nevertheless, we cannot guarantee the information contained herein as to accuracy or completeness.

All expressions of opinion are the responsibility of Defined Health andAll expressions of opinion are the responsibility of Defined Health and, though current as of the date of this report, are subject to change.

The contents of this presentation are not meant to be comprehensive, but to encourage a spirited dialogue. Feedback, comments and corrections are welcome.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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In CNS Broadly, The Balance has Tipped Toward Too Much Risk

• I th t t f i i l i t d d f th i l• In the context of an increasingly generic standard of care, the commercial risk now associated with many of the major CNS diseases (e.g., depression, epilepsy, migraine, schizophrenia, ADHD) has become too big for many big and specialty pharma companiesand specialty pharma companies.

Generic SoCNovel MOAsSubjective endpointsPlacebo response

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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The Pharma Brain Drain

• Bi d i lt h i h illi t t k th• Big and specialty pharma companies, who were once willing to take on the clinical risk inherent to CNS drug development to realize the commercial reward, are now exiting the space en masse.

AstraZeneca cutting 2,200 R&D jobs, slashing neuroscience in restructuringslashing neuroscience in restructuringFierceBiotech Feb. 2012

GSK cuts neuroscience R&D staff in RTPGSK cuts neuroscience R&D staff in RTPFierceBiotech Feb. 2011

Novartis to shut brain research facilityNature Dec. 2011

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Opportunities to Balance the Risk in CNS• Those companies who are not ready to give us up on CNS see an• Those companies who are not ready to give us up on CNS see an

opportunity to balance the risk by targeting orphan diseases and high unmet need market subsegments.

Orphan Diseases

Subsegments

Orphan Diseases

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Opportunities to Balance the Risk in CNS

Orphan Diseases

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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The Orphan Promise

Th O h P i l t/ h t ti li d l tThe Orphan Promise: low cost/short timeline development program, friendly regulatory process, pricing flexibility, minimal commercialization costs and market exclusivity.

• Development Pros

Potential Fast track, priority review

• Commercialization Pros

7-year market exclusivitypriority review

Tax credits and fee waivers

Motivated patients

Advocacy support

Grants

Advocacy support

Pricing flexibility

Minimal competition

Targeted sales forceEnthusiastic clinical investigators

Higher than average

Targeted sales force

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Higher than average clinical success rates

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Orphan Exclusivity Not a Guarantee

Another Orphan Drug Battle; Depomed Sues FDA Over GRALISE Orphan Drug Exclusivity Public turmoil over FDA decisions involving orphan drug exclusivity has been relatively rare in recent years. That has changed over the past several months.• First there was the lawsuit brought against FDA by K-V Pharmaceutical Company to• First there was the lawsuit brought against FDA by K-V Pharmaceutical Company to

“restore” orphan drug exclusivity for the pre-term birth drug MAKENA (hydroxyprogesterone caproate) Injection.

• Then there was FDA’s decision – the first ever – to rescind Octapharma USA, Inc.’s orphan drug exclusivity for WILATE (von Willebrand Factor/Coagulation Factor VIII Complex (Human)).

• And earlier this week, Depomed, Inc. filed a Complaint in the U.S. District Court for the District of Columbia challenging FDA’s denial of orphan drug exclusivity for GRALISE (once-District of Columbia challenging FDA s denial of orphan drug exclusivity for GRALISE (oncedaily gabapentin) Tablets.

FDA designated GRALISE as an orphan drug in November 2010 for the management of postherpetic neuralgia (“PHN”), and approved the drug product on January 28, 2011 under NDA N 022544 f th d i t d i di ti D it h i d i t d GRALISENo. 022544 for the designated indication. Despite having designated GRALISE as an orphan drug for the approved indication, however, FDA did not grant orphan drug exclusivity. Why? Because of issues surrounding what constitutes an “orphan drug” and under what circumstances “clinical superiority” must be shown.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Karst, K.R. (2012) FDA Law Blog, Sept. 26 9

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Still, Pharma is Embracing the Orphan Strategy

Our research priorities are not determined by potential market size. Our research organization,

GSK Rare Diseases was set up in February 2010 to discover, develop and deliver new and innovative medicines to treat rare diseases. Our ambition is to create a sustainable portfolio of affordable

potential market size. Our research organization, the Novartis Institutes for BioMedical Research (NIBR), is to actively target rare diseases where we have clear understanding of the disease’s underlying cause and where there is real unmet medical need.p

medicines that can make a real difference patients living with often devastating and life-threatening conditions. At the beginning of 2012 we had three potential new medicines in late-stage development.

Pfizer's Orphan and Genetic Disease Research Unit (OGD) is adopting an innovative and collaborative approach to the development of new medicines whereby it looks to develop strategic partnerships with academic and commercial enterprises to create novel therapeutics across the spectrum ofcommercial enterprises to create novel therapeutics across the spectrum of rare diseases. A key mission is to create next generation medicines by exploring pathogenic mechanisms that apply to clusters of monogenic diseases. Many orphan diseases are caused by protein misfolding, mistrafficking, and/or accumulation, and OGD is focusing on building

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

capabilities to explore and address these aspects of proteinopathy.

Company websites

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Orphan Disease: A Multibillion Dollar Category, and Growing• Looking at a subset of orphan diseases Cowen estimates the global market to beLooking at a subset of orphan diseases, Cowen estimates the global market to be

$5.7 billion dollars in 2011; expected to reach over $13 billion by 2017.• Via its lysosomal disorder franchise (Cerezyme, Fabrazyme, Myozyme,

Aldurazyme), Genzyme, now a wholly owned subsidiary of Sanofi, had the greatest dollar share (55%) in 2011. Shire had the second largest franchise in 2011, supported by sales of Replagal, Elaprase and Vpriv. Other companies with strong orphan disorder franchises include Alexion, BioMarin, Viropharma, Dyax, Amicus Corcept Raptor and CSL BehringAmicus, Corcept, Raptor and CSL Behring.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

SG Cowen Therapeutic Category Outlook, Oct. 2012

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Orphan Disease: A Multibillion Dollar Category, and Growing

• A new Thomson Reuters report shows that all orphan drugs generated over $50 billion in 2011, and have the potential to generate as much lifetime revenue as drugs used for more common health conditions.

• The compound annual growth rate (CAGR) of the orphan drug market between 2001 and 2010 25 82010 was 25.8 percent, compared to 20.1 percent for a matched control group of non-orphan drugs. According to the p g gReuters report, “this data, combined with the increasing number of orphan drug approvals suggests that theapprovals, suggests that the CAGR of launched orphan drugs will outshine that of the non-orphan control drugs over

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

The Economic Power of Orphan Drugs, Thomson Reuters 2012

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the next 30 years.”

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Of the ~60 Orphan Drug Approvals (2006-2011), 17% are for CNS Disorders

• Oncology therapeutics dominate orphan drug approvals, accounting for 33% of the marketing authorizations from 2006 to 2011.

Orphan Drug Approvals by Therapeutic Area (2006-2011)

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

13NATURE REVIEWS | DRUG DISCOVERY VOLUME 11 | APRIL 2012

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The CNS Gap is Widening

• Of h 460 d i li i l i l f h di l 3 f C S

Orphan Drug Clinical Pipeline

• Of the 460 drugs in clinical trials for orphan diseases, only 37 are for CNS indications. And those cluster around a few disease types.

Orphan Drug Clinical Pipeline

Neurodegenerative Disease (e.g., ALS, HD, PSP)Developmental/Learning Disabilities (e.g., Fragile X)Spinal Cord InjuryIntractable/Refractory EpilepsyIntractable/Refractory Epilepsy

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

14NATURE REVIEWS | DRUG DISCOVERY VOLUME 11 | APRIL 2012; PhRMA

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CNS Orphan* Pipeline: Phase III

Drug Highest Phase Indication Company

Mercaptaminebitartrate delayed-

l

Pre-registration CystinosisHuntington's disease (II/III)

l h l h ( )

Raptor Pharmaceutical Corp

release Non-alcoholic steatohepatitis (II)Arbaclofen Phase III Fragile X syndrome

Autistic disorder (II)Seaside Therapeutics

Dexpramipexole Phase III ALS Knopp Biosciences / Biogen IdecDexpramipexole Phase III ALS Knopp Biosciences / Biogen Idec

Midazolam intranasal Phase III Seizures Intranasal Therapeutics

Pridopidine/Huntexil Phase III Huntington's disease NeuroSearch Sweden AB / Teva

Arimoclomol Phase II/III ALS Biorex, Orphazyme

Davunetide Phase II/III Progressive supranuclear palsy Allon Therapeuticsintranasal Schizophrenia (II)

Alzheimer's disease (II)Mild cognitive impairment (II)

*C d h b t d h d i ti

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Adis R&D Insight

*Compounds have been granted orphan designation

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CNS Orphan* Pipeline: Phase II

Drug Highest Phase Indication Company

ADX N05 Phase II NarcolepsyDepressive disorders (I)

Shionogi Pharma

Apomorphine Phase II Parkinson's disease VecturaApomorphineinhalation

Phase II Parkinson s disease Vectura

Autologousmacrophage therapy

Phase II Spinal cord injuries Proneuron Biotechnologies

BA 210 Phase II Spinal cord injuries BioAxone Therapeutic (Originator)Alseres Pharmaceuticals (Licensee)Alseres Pharmaceuticals (Licensee)

Clonazepam intranasal Phase II Epilepsy Jazz PharmaceuticalsEcopipam Phase II Gambling (II), Gilles de la Tourette's

syndrome (I/II), Lesch-Nyhan syndrome (I)Schering-Plough (Originator)Psyadon Pharmaceuticals (Licensee)

EX 527 Phase II Huntington's disease Elixir Pharmaceuticals (Originator)EX 527 Phase II Huntington s disease Elixir Pharmaceuticals (Originator)Siena Biotech (Licensee)

Ganaxolone Phase II Infantile spasms, Partial epilepsiesPTSD

Purdue Pharma (Originator)Marinus Pharmaceuticals (Licensee)

Goat serum-derived polyclonal antibodies

Phase II ALS, MS,Systemic scleroderma

Daval Internationalpolyclonal antibodies Systemic scleroderma

Olesoxime Phase II Spinal muscular atrophy Trophos

Tirasemtiv Phase II Amyotrophic lateral sclerosisMyasthenia gravis

Cytokinetics

V l i id Ph II F il X d N h

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Valproic acid Phase II Fragile X syndrome NeuropharmAutism therapeutics

Adis R&D Insight *Compounds have been granted orphan designation

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CNS Orphan* Pipeline: Phase I

Drug Highest Phase Indication Company

Fenobam Phase I/II Fragile X syndrome Neuropharm (Originator)

GDNF-producing adult stem cell therapy

Phase I/II ALS Tel Aviv University (Originator)Brainstorm Cell Therapeutics (Licensee)

sNN 0029 Phase I/II ALS NeuroNova AB

ATI 355 Phase I Spinal cord injuries Novartis

CPP 115 Phase I Infantile spasms Catalyst Pharmaceutical Partners

ISIS SMNRx Phase I Spinal muscular atrophy Genzyme CorporationIsis Pharmaceuticals

ISIS SOD1Rx Phase I ALS Isis Pharmaceuticals

Neurological disorder stem cell therapies

Phase I ALS Neuralstem (Originator)Biomedical Research Models (Licensee)

RG 2833 Phase I Friedreich's ataxia Repligen Corporation

RG 3039 Phase I Spinal muscular atrophy Repligen Corporation

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Adis R&D Insight *Compounds have been granted orphan designation

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CNS Challenges Still Hold for Orphan Disease

• Disease biology?

• Validated targets?

• D fi i i di i ?• Definitive diagnosis?

• Trial design?

• Subjective clinical endpoints?• Subjective clinical endpoints?

• Outcome measures?

• Placebo response?Placebo response?

• Validated biomarkers?

• Time of intervention?

However, progress is finally being made!

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Orphan CNS Today: Range of Price (and Value)

Fabrazyme

n MS Drugs Sabril

Acthar

ue P

ropo

sitio

n

Banzel

Xyrem

MS Drugs

Xenazine

Sabril

Valu

Cuvposa

Rilutek

Ampyra

Nuedexta

$5,000 - $20,000 $25,000 - $40,000 $50,000 - $130,000 $150,000 - $400,000+

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Redbook; DH Analysis 19Average Annual Cost of Therapy (WAC)

CNSCNS Non-CNSNon-CNS

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Orphan CNS Today: Range of Price (and Value)• MS disease-modifying drugs set the bar.y g g

Sabril

Acthar

n MS Drugs

Xyrem Xenazine

Sabril

ue P

ropo

sitio

n

Banzel

MS Drugs

Valu

Cuvposa

Rilutek

Ampyra

Nuedexta

$5,000 - $20,000 $25,000 - $40,000 $50,000 - $130,000 $xxxx$150,000 - $400,000+

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Redbook: DH AnalysisAverage Annual Cost of Therapy (WAC)

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CNSCNS Non-CNSNon-CNS

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MS Disease Modifying Drugs: Set the Bar and Price

• Disease-modifying MS drugs target a medically relevant subsegment of the overall patient population (relapsing-remitting disease), qualifying them as orphan drugs.

• The value proposition is clear: delay of disease progression.• The $12+ billion dollar MS market (worldwide), dominated by big pharma and

specialty companies, continues to grow at a significant pace, driven by aggressive US price hikes (but only mid-single-digit patient growth).

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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Orphan CNS Today: Range of Price (and Value)• Incremental improvement over SoC limits pricing flexibility.p p g y

n MS Drugs Sabril

Acthar

ue P

ropo

sitio

n

Banzel

Xyrem

Ampyra

MS Drugs

Xenazine

Sabril

Valu

Cuvposa

RilutekCuvposa

Rilutek

Ampyra

$5,000 - $20,000 $25,000 - $40,000 $50,000 - $130,000 $150,000 - $400,000+

NuedextaNuedexta

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Redbook; DH Analysis Average Annual Cost of Therapy (WAC)

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CNSCNS Non-CNSNon-CNS

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Nuedexta: Struggling to Define the Value (and the Disease)

• Nuedexta (combination of dextromethorphan hydrobromide and quinidine sulfate Avanir• Nuedexta (combination of dextromethorphan hydrobromide and quinidine sulfate, AvanirPharmaceuticals) was approved in Oct. 2010 for the treatment of pseudobulbar affect (PBA), a condition associated with multiple neurological conditions including Alzheimer’s disease, stroke, TBI, PD, MS and ALS. Despite Phase III data (STAR trial, 326 patients) which showed a significant reduction in episodes of laughing or crying (~47% reduction vs placebo) ph sicians patients andreduction in episodes of laughing or crying (~47% reduction vs placebo), physicians, patients and caregivers have difficulty recognizing and distinguishing the disorder.

• In addition, payers are pushing back on the ~$6,000 a year price for the combination of two generically available drugs.

Maybe it’s not depression Maybe it’s PBAMaybe it s not depression. Maybe it s PBA.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Avanir website 23

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Cuvposa: The Right Value to the Right Patient• Cuvposa (glycopyrrolate) Oral Solution (Shionogi Pharma Inc) was approved by the FDA in July,

2010 to treat chronic severe drooling caused by neurologic disorders in children ages 3 years to 16 years, a condition that affects QoL and can impact the ability to swallow.

• Glycopyrrolate was approved decades ago to treat peptic ulcers and reduce salivation in patients under anesthesia.patients under anesthesia.

• When used off label, oral tablets had to be crushed to treat drooling in children with neurological disorders. Cuvposa is a flavored oral solution that is easier to administer and provides the optimal dose for each patient.

Merz, Inc. Announces the Acquisition of CUVPOSA® (glycopyrrolate) Oral Solution, First and Only FDA-Approved Treatment for Pediatric Chronic Severe Drooling Associated With Neurologic Conditions

• In clinical trials, 78% of children on the drug reached clinical improvement in drooling (vs. 19% with placebo).

Approved Treatment for Pediatric Chronic Severe Drooling Associated With Neurologic Conditions Aug. 27, 2012

The addition of CUVPOSA® reflects Merz's commitment to neurology"The FDA has classified CUVPOSA® as an orphan drug since sialorrhea is a rare disorder in pediatric patients with neurologic conditions " said Kapil D Sethi MD FRCP Professor of Neurology and Directorpatients with neurologic conditions, said Kapil D. Sethi, MD, FRCP, Professor of Neurology and Director of the Movement Disorders Program at Georgia Health Sciences University and Senior Medical Expert of Neurology at Merz Pharmaceuticals, LLC. "Due to the limited treatment options available, sialorrhea is an all-too-often poorly managed condition in pediatric patients suffering from neurologic disorders such as cerebral palsy. CUVPOSA®, the only FDA-approved treatment on the market, is an important

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

advancement in the treatment of chronic severe drooling in children with neurologic disorders."

PR Newswire; FDA News Release 24

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AMPYRA / FAMPYRA: The Challenge to Establish Value to All Stakeholders• Ampyra (Acorda/Biogen Idec), an extended-release oral agent that blocks axonal potassium

channels, was approved in Jan. 2010 with an indication to improve walking in patients with MS.• After an initial rejection in the EU, the CHMP of the EMA recommended conditional marketing

authorization of Ampyra (Fampyra in Europe) in May 2011. The CHMP was not convinced that py ( py p ) yFampyra’s small effect on the walking speed was a meaningful benefit for patients. The effect on speed could not be linked to meaningful improvements such as better coordination, balance or stamina or increased range of action.

• FAMPYRA is now approved across the entire EU Norway Iceland Canada Australia and New• FAMPYRA is now approved across the entire EU, Norway, Iceland, Canada, Australia and New Zealand. Acorda expects regulatory filings in 30 additional countries in 2012 and has planned launches in many EU countries.

• In the US, Ampyra is priced at ~$13,000 a year (WAC); pricing negotiations are ongoing in the

Ron Cohen, CEO of Acorda Therapeutics, regrets not consulting insurers early about its AMPYRA h fi d h l l i l

EU.

AMPYRA, the first drug to help multiple sclerosis patients walk better.CHEManger Europe Dec. 2011

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

http://www.chemanager-online.com/en/news-opinions/headlines/pharma-asks-money-question-earlier-new-drugs25

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Rilutek: Minimal Value for a Desperate Disease• Rilutek (riluzole, Sanofi) is the only drug indicated for the treatment of amyotrophic lateral

sclerosis (ALS), a persistent and progressive disease that causes muscle weakness, disability, and eventual death (typically within 3-4 years of diagnosis). While its exact mechanism of action is unknown, Rilutek is believed to modulate glutamate signaling.

• Rilutek was approved in 1995 based on the results of two Phase III studies which showed anRilutek was approved in 1995 based on the results of two Phase III studies which showed an average 3 month increase in survival (or time to tracheostomy). Current sales of ~$200M ww.

• Although Rilutek improved early survival in both studies, measures of muscle strength and neurological function did not show a benefit for patients taking Rilutek over patients on placebo

Living for Today, Locked in a Paralyzed Body

placebo.

ALS patients and their families are forced, on a daily basis, to take stock of the meaning and quality of their lives and to makeand quality of their lives and to make repeated decisions about how much is too much. Patients with the illness, Dr. Ganzini said, are 25 times as likely to die by doctor-assisted suicide as people with other diseases.Dr. McCluskey, a neurologist in Philadelphia, said that at least 90 percent of patients with ALS decided to die when they could no longer breathe on their own, although

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

The New York Times (2004); Rilutek product label 26

longer breathe on their own, although medical science can extend their lives much longer (i.e., tracheostomy).

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ALS: For Many, A Fate Worse than Death

• A lit dj t d lif (QALY) t k i t t b th th tit d lit f lif• A quality-adjusted life-year (QALY) takes into account both the quantity and quality of life generated by healthcare interventions. It is the arithmetic product of life expectancy and a measure of the quality of the remaining life-years.

• QALYs provide a common currency to assess the extent of the benefits gained from a variety p y g yof interventions in terms of health-related quality of life and survival for the patient.

• A QALY places a weight on time in different health states. A year of perfect health is worth 1 and a year of less than perfect health is worth less than 1. Death is considered to be

i l t t 0 h h lth t t b id d th d th d hequivalent to 0; however, some health states may be considered worse than death and have negative scores.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Phillips, C. (2009), What is a QALY, www.whatisseries.co.uk 27

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The Growing Importance of Value-Based Pricing

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The Next Generation Therapies for ALS• After nearly two decades since the launch of the first drug indicated for ALS y g

(Rilutek), we are now poised to have two new therapies for this devastating disease – one a neuroprotective (dexpramipexole), the other addressing muscle strength and function (tirasemtiv).

Mitochondrial DysfunctionMitochondrial Dysfunction

dexpramipexole

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Rodman & Renshaw Annual Global Investment Conference, Sept. 2012; Company websites

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Dexpramipexole: Neuroprotection

• Dexpramipexole (KNS-760704) exhibits neuroprotective capabilities comparable to pramipexole (Mirapex) (potentially mediated through the modulation of aberrant mitochondrial ion channel conductance), but with significantly reduced affinity toward dopamine receptors and less associated side effects (e.g., somnolence,toward dopamine receptors and less associated side effects (e.g., somnolence, vivid dreams, loss of impulse control).

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

30Cowen and Company report (2012); Biogen Idec

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Dexpramipexole: Neuroprotection• Knopp completed a two-part double-blind Phase II trial and published the resultsKnopp completed a two part, double blind Phase II trial and published the results

in Nature Medicine in December 2011. Part 1 analyzed multiple BID doses versus placebo over 12 weeks. In part 2, following a 4-week placebo washout, patient were re-randomized to either 50 mg/day or 300 mg/day dexpramipexole and treated for 24 weeks.

• Phase II data are considered “better than any other ALS Phase II trial”.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

31Cowen and Company report (2012); Biogen Idec

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Dexpramipexole: Neuroprotection• Dexpramipexole is currently being studied in the Phase III EMPOWER trial (943-p p y g (

patients; 12-18 month study). The primary endpoint is the Combined Assessment of Function and Survival (CAFS), a joint ranking score that combines ALSFRS-R and survival designed to take into account the impact of mortality on changes in functional performance Background Rilutek therapy is permitted Data anticipatedfunctional performance. Background Rilutek therapy is permitted. Data anticipated in late 2012.

• Despite the enthusiasm around the Phase IIaround the Phase II data, clinicians are skeptical with respect to the ultimate prospects for dexpramipexole’ssuccess, mostly stemming from questions about thequestions about the mechanism of action and relevance to the biology of the disease.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

32Cowen and Company report (2012); Biogen Idec

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Tirasemtiv: Increasing Muscle Strength•Tirasemtiv is a Phase IIb-ready compound in development for symptoms of ALS byTirasemtiv is a Phase IIb ready compound in development for symptoms of ALS by

Cytokinetics, a biotech company with focused expertise the cytoskeleton and biology of muscle function.

•Tirasemtiv is a novel small molecule that aims to impact skeletal muscle contraction by l ti l ti ti th f t k l t l l t i l d i i itselectively activating the fast skeletal muscle troponin complex and increasing its

sensitivity to calcium. This effect has the potential to result in increased skeletal muscle force and delaying the time to muscle fatigue.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Cowen and Company report (2012); Cytokinetics website33

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Tirasemtiv: Increasing Muscle Strength

• PoC was established in three Phase IIa trials (CY 4021, n=67, CY 4024, n=49 and CY 4025, n=27); total of approximately 140 ALS patients. These trials were primarily designed to test the compound’s safety and tolerability, in addition to looking for signs of its efficacysigns of its efficacy.

• Data were reported at the 63rd (2011) and 64th (2012)American Academy of Neurology Annual Meeting.

• Tirasemtiv was well-tolerated (some transient dizziness), with no serious AEs ( ),observed.

• While not powered to show significance in

ffi d i tefficacy endpoints, tirasemtiv showed a positive trend in efficacy measures in all three studies.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Cowen and Company report (2012); Cytokinetics website

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Tirasemtiv: Increasing Muscle Strength

• Ph II St d CY 4024 (2 W k )

CY 4024: Change in ALSFRS-R From Baseline

• Phase IIa Study CY 4024 (2-Weeks):• Double-blind, randomized (3:1), placebo-controlled trial

designed to evaluate the safety and tolerability of multiple doses in 49 patients with ALS.

• Part A: 24 patients were enrolled and randomized to• Part A: 24 patients were enrolled and randomized to receive a daily dose of 125 mg, 250 mg, or 375 mg of tirasemtiv or placebo, for two weeks. Patients in Part A did not receive Rilutek.

• Part B: 25 patients were enrolled and randomized to preceive a daily dose of 125 mg, 250 mg, or 375 mg of tirasemtiv or placebo, for two weeks. All patients in Part B received 50mg qd Rilutek for two weeks.

• The primary endpoint of the trial was safety and t l bilit ith l ti f ALSFRS R

CY 4024: Change in MVV From Baseline To Day 15

tolerability, with evaluation of ALSFRS-R score, measurement of muscle fatigue, measurement of pulmonary function (MVV), physician and patient global assessment as secondary endpoints.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Cowen and Company report (2012); Cytokinetics website

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Tirasemtiv: Increasing Muscle Strength

Cytokinetics Prepares to Initiate Registration Program for Tiramsemtiv in Amyotrophic Lateral Sclerosis Following Recent Regulatory InteractionsSouth San Francisco, CA - September 10, 2012, p ,

Cytokinetics, Incorporated (Nasdaq: CYTK) announced that, following interactions with regulatory authorities, the company is proceeding to initiate a Phase IIb, international, randomized, double-blind, placebo-controlled, clinical trial designed to evaluate the safety, tolerability and efficacy of tirasemtiv (formerly CK-2017357) in patients with amyotrophic lateral sclerosis (ALS). The company plans to initiate this clinical trial, known as CY 4026, in the fourth quarter of 2012.

In recent months, Cytokinetics submitted the CY 4026 protocol to the U.S. Food and Drug Administration (FDA) and also met with the European Medicines Agency (EMA) Scientific Advice ( ) p g y ( )Working Party to seek advice and protocol assistance in order to include European countries in CY 4026. Based on feedback from these interactions, the company is now preparing to initiate CY 4026. This clinical trial is designed to enroll approximately 400 patients who are expected to receive tirasemtiv or placebo for three months. The primary analysis of CY 4026 will compare the mean change from baseline in the ALS Functional Rating Scale in its revised form (ALSFRS-R) on tirasemtiv versus placebo. Secondary endpoints will include Maximum Voluntary Ventilation (MVV) and other measures of respiratory and skeletal muscle function. Patients will receive tirasemtiv or placebo dosed twice daily; patients taking riluzole at the time of

ll t d h d i d t i ti ti ill i il l t d d

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

enrollment, and who are randomized to receive tirasemtiv, will receive riluzole at a reduced dose of 50 mg daily, in a blinded manner.

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Tirasemtiv: Increasing Muscle Strength

Cytokinetics Prepares to Initiate Registration Program for Tiramsemtiv in Amyotrophic Lateral Sclerosis Following Recent Regulatory InteractionsSouth San Francisco, CA - September 10, 2012, p ,

Cytokinetics, Incorporated (Nasdaq: CYTK) announced that, following interactions with regulatory authorities, the company is proceeding to initiate a Phase IIb, international, randomized, double-blind, placebo-controlled, clinical trial designed to evaluate the safety, tolerability and efficacy of tirasemtiv (formerly CK-2017357) in patients with amyotrophic lateral sclerosis (ALS). The company plans to initiate this clinical trial, known as CY 4026, in the fourth quarter of 2012.

In recent months, Cytokinetics submitted the CY 4026 protocol to the U.S. Food and Drug Administration (FDA) and also met with the European Medicines Agency (EMA) Scientific Advice Tirasemtiv is also in Phase IIa studies for myasthenia gravis and claudication.

( ) p g y ( )Working Party to seek advice and protocol assistance in order to include European countries in CY 4026. Based on feedback from these interactions, the company is now preparing to initiate CY 4026. This clinical trial is designed to enroll approximately 400 patients who are expected to receive tirasemtiv or placebo for three months. The primary analysis of CY 4026 will compare the mean change from baseline in the ALS Functional Rating Scale in its revised form (ALSFRS-R) on tirasemtiv versus placebo. Secondary endpoints will include Maximum Voluntary Ventilation (MVV) and other measures of respiratory and skeletal muscle function. Patients will receive tirasemtiv or placebo dosed twice daily; patients taking riluzole at the time of

ll t d h d i d t i ti ti ill i il l t d d

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

enrollment, and who are randomized to receive tirasemtiv, will receive riluzole at a reduced dose of 50 mg daily, in a blinded manner.

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Orphan CNS Today: Range of Price (and Value)• Clearly establishing and building value.y g g

n MS Drugs Sabril

Acthar

ue P

ropo

sitio

n

Banzel

Xyrem

Banzel

Xyrem

MS Drugs

Xenazine

Sabril

Valu

Cuvposa

Rilutek

Ampyra

Nuedexta

$5,000 - $20,000 $25,000 - $40,000 $50,000 - $130,000 $150,000 - $400,000+

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Redbook; DH Analysis 38Average Annual Cost of Therapy (WAC)

CNSCNS Non-CNSNon-CNS

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Xyrem: Building Value, Protection and Price

• X ( di b t ) i th l FDA d di ti f l ith• Xyrem (sodium oxybate) is the only FDA-approved medication for narcolepsy with cataplexy and excessive daytime sleepiness (EDS). It was approved on July 17, 2002, based on Phase III studies which showed a decrease in the number of weekly cataplexy attacks vs placebo by ~50-70% within a month of starting therapy and >90% by one year.

– Sodium oxybate is derived from gamma-hydoroxybutyrate (GHB), a DEA Schedule I controlled substance with a high risk of abuse and diversion.

• Current sales on track to reach over $400 M in 2012; industry analysts project US revenues of ~$800 million by 2018revenues of $800 million by 2018.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Jazz website; EvaluatePharma

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Xyrem: Building Value, Protection and Price

• X ( di b t ) i th l FDA d di ti f l ith• Xyrem (sodium oxybate) is the only FDA-approved medication for narcolepsy with cataplexy and excessive daytime sleepiness (EDS). It was approved on July 17, 2002, based on Phase III studies which showed a decrease in the number of weekly cataplexy attacks vs placebo by ~50-70% within a month of starting therapy and >90% by one year.

– Sodium oxybate is derived from gamma-hydoroxybutyrate (GHB), a DEA Schedule I controlled substance with a high risk of abuse and diversion.

• Current sales on track to reach over $400 M in 2012; industry analysts project US revenues of ~$800 million by 2018

Cataplexy, found in 60-70% of narcoleptics, is characterized by a brief but sudden loss

f l t ft t i d b i trevenues of $800 million by 2018.of muscle tone often triggered by intense emotions. Cataplexy can be focal (i.e., drooping of an eyelid or the jaw) or generalized, causing a patient to collapse. g g p pRecovery of muscle tone is complete and commonly occurs just as quickly. Cataplexy can gravely affect a patient’s quality of life

resulting in an inability to work or study— resulting in an inability to work or study, strained social relationships, and also serious accidents.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Jazz website; EvaluatePharma

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Xyrem: Building Value, Protection and Price• ValueValue

– Specified as “treatment standard” (i.e., first-line) in the American Academy of Sleep Medicine practice parameters in 2007.

– Restricted access program (Xyrem Success Program);Restricted access program (Xyrem Success Program); assistance to physicians (e.g., patient education) and patients (e.g., nursing guidance).

– Post-marketing surveillance data showing very low incidence of abuse, misuse, dependence, 35000

40000

45000

Xyrem Price Increases

drug-facilitated sexual assault, overdose, fatalities, and diversion

– Patient assistance program defrays out-of-pocket costs

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• Protection– Orphan status– Jazz’s IP covers Xyrem’s restricted access program

(Xyrem Success Program), formulation and method of

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• Price– With growing value and protection, Jazz has been

able to increase the price of Xyrem ~8-fold over the

6 11 4 9 2 7 12 5 10 3 8 1 6 11 4

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

able to increase the price of Xyrem 8 fold over the past six yrs.

Jazz Pharmaceuticals website; Brean Murray Carret & Co. Sept. 27, 2012 analyst report41

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Orphan CNS Today: Range of Price (and Value)• The top of the value chain.p

n MS Drugs Sabril

Acthar

ue P

ropo

sitio

n

Banzel

Xyrem

MS Drugs

Xenazine

Sabril

Valu

Cuvposa

Rilutek

Ampyra

Nuedexta

$5,000 - $20,000 $25,000 - $40,000 $50,000 - $130,000 $150,000 - $400,000+

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Redbook; DH Analysis 42Average Annual Cost of Therapy (WAC)

CNSCNS Non-CNSNon-CNS

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For Some Disorders, the Value is Apparent in the Consequences of Inadequate Treatment

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Company websites; Epilepsy Curr. 2006 May; 6(3): 63–69.

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Xenazine: Creating Value Where There Was None• Xenazine is the only FDA approved treatment for chorea associated with• Xenazine is the only FDA-approved treatment for chorea associated with

Huntington's disease. • Chorea is the hallmark symptom of HD and affects about 90% of people who have

HD, and is characterized by involuntary repetitive, jerky, dance-like movements.y y p j y

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Company websites

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Xenazine: Creating Value Where There Was None• Efficacy was established in a 13-week study and open label extension up to 80 weeks.

• Primary endpoint: Chorea was assessed using the Total Maximal Chorea (TMC) score from the UHDRS.

y y p p

• Secondary endpoints: Clinical Global Impression scale and individual sections of the UHDRS.

• At 80 weeks, reduction in mean TMC score by 4 6 (SD 5 5) UHDRS units (p<0 001)4.6 (SD 5.5) UHDRS units (p<0.001).

• Did not impact cognition or global improvement after 2 years of therapy.

The Unified Huntington’s Disease RatingScale (UHDRS) was developed by the Huntington Study Group as a clinical rating scalerating scaleto assess four domains of clinical performance and capacityin HD: motor function, cognitive function, behavioral

f

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Singer, C. July 2012, Cleveland Clin J of Med, Vol 79, Spp 2; Frank, S.2009, BMC Neurol.18;9:62; www.xenazineusa.com

abnormalities, and functional capacity.

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Xenazine: Leaves Plenty of Opportunity to Address Unmet Need

• bli id ff l• Troubling side effects: somnolence, dysphagia and increase in Parkinsonian symptoms.

• Black-box warning for increased risk of depression and suicidal thoughts and behavior (in an already highly

l bl i l i )vulnerable patient population)

• Only addresses one domain of the disease: motor symptoms, and onlydisease: motor symptoms, and only the chorea type movements.

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Roos. R. 2010. Orphanet J of Rare Diseases 5:40; www.xenazineusa.com

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Huntexil: Addressing the Non-Choreic Symptoms

Teva Pharmaceuticals acquires rights to Huntington Disease drug candidates for about $26MThe Associated Press, Sep 27, 2012

T Ph ti l I d t i Ltd id Th d th t it l t d it i iti f dTeva Pharmaceutical Industries Ltd. said Thursday that it completed its acquisition of a drug candidate being developed for the treatment of Huntington disease from NeuroSearch A/S for about $26 million. The Israel-based drug company said the acquisition includes all rights, assets and obligations relating to Huntexil, which is intended to treat hand movement, balance and gait disturbances stemming from Huntington disease. Under the agreement, Teva will pay Denmark-based NeuroSearch $26 million over a period of at least six months. Additional payments also could be made if certain regulatory andleast six months. Additional payments also could be made if certain regulatory and commercialization milestones are met, the company said. Trials in the U.S., Europe and Canada showed significant symptomatic relief for patients with Huntington, including improvements in hand movements, gait and balance. In addition, the improvements occurred without any side effects such as drowsiness or depression whichimprovements occurred without any side effects such as drowsiness or depression, which have been seen with other treatments, the company said. Huntington's is a rare inherited disease that usually strikes people in their late 30s or early 40s. It begins with uncontrollable twitches, and later causes deterioration of mental abilities until

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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patients can barely eat, speak or walk. Death occurs a decade or more after symptoms begin. Teva said it plans to complete new clinical studies to determine Huntexil's potential.

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PBT-2: Addressing Cognitive Symptoms in HD

• PBT 2 (Prana Biotechnology Ltd ) promises to address cognitive decline in HD:• PBT-2 (Prana Biotechnology, Ltd.) promises to address cognitive decline in HD: one of the three major hallmark symptoms of the disease. Cognitive symptoms can be present long before the first motor symptoms appear, and are particularly in relation to executive function.

• HD patients lose the ability to distinguish what is relevant and what can be ignored, the ability to organize h i lif fl ibili f i d d htheir life, flexibility of mind, and the

ability to make mental adjustments. • PBT-2 addresses a critical defect that

leads to aggregation of Huntingtinleads to aggregation of Huntingtinprotein in the PD brain - loss of transition metal homeostasis and their trafficking during neurotransmission.

• PBT2 is now being evaluated in two Phase II trials of HD (and Alzheimer’s disease).

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Prana website; www.xenazineusa.com

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PBT-2: Potential Beyond Huntington’s

• BPT-2 addresses an underlying pathology associated with HD, as well as other neurodegenerative disease - aggregation and formation of intracellular proteins and the formation of neurofibrillary tangles:

A ti f H ti ti i HD– Aggregation of Huntingtin in HD

– Aggregation of amyloid in AD

– Aggregation of α-synuclein in PDgg g y

• In animal models of AD and early stage clinical trials of patients with AD, PBT2 appears to restore transition metal homeostasis in AD (as well as HD), leading to disaggregation of Aβ and improvement of cognitive function and memory.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

49Prana website; ACS Chem. Neurosci. (2012)

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Orphans as Potential Entry Into a Broader Patient Population

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Mundel, T. Novartis presentation (2011) A Paradox in Orphan Drug Development

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Orphans as Potential Entry Into a Broader Patient Population

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Mundel, T. Novartis presentation (2011) A Paradox in Orphan Drug Development

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Orphans as Potential Entry Into a Broader Patient Population

• Companies like Novartis, Roche, Seaside Therapeutics, and Neuropharm are targeting Fragile X, an orphan monogenetic disorder, with clinical stage programs focused on the modulation of glutamate or GABA neurotransmitters with hopes that this research will provide insight that may extend into other developmentalthis research will provide insight that may extend into other developmental disorders such as autism.

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Seasidetherapeutics.com

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Allon’s “Orphan to Bigger Market” Strategy

• All Th ti I (All ) i d ti i t l Ph 2/3 t i l l ti• Allon Therapeutics, Inc. (Allon) is conducting a pivotal Phase 2/3 trial evaluating davunetide (a potentially disease modifying neuroprotective 8 aa peptide), as a potential treatment for Progressive Supranuclear Palsy (PSP), a type of movement disorder & dementia (data expected Q2 2012).p

• This trial is based on statistically significant human efficacy demonstrated in amnestic mild cognitive impairment, cognitive impairment associated with schizophrenia, and positive biomarker data.

• All b li thi t• Allon believes this current clinical trial will not just provide data for a potential approval in PSP, but will also define the ,opportunity in other tau-related diseases, such as Alzheimer’s, schizophrenia, Parkinson’s and several types of frontotemporalseveral types of frontotemporaldementia.

• Allon’s strategy is to seek approval in these larger markets

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in collaboration with a major pharma partner.Allon website

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PSP: An Orphan Disease with HIGH Unmet Need

• Progressive supranuclear palsy (PSP) is a rapidly progressing frontotemporal neurodegenerative• Progressive supranuclear palsy (PSP) is a rapidly progressing frontotemporal neurodegenerative disease that has no known cause, treatment or cure. It affects nerve cells that control walking, balance, mobility, vision, speech, and swallowing. Symptoms begin, on average, when an individual is in the early 60's, but may start as early as in the 40's. Median survival after onset is around 6 yearsaround 6 years.

• The prevalence of PSP is estimated 6 to 7 cases per 100,000, but definitive diagnosis is challenging and prolonged.

At age 66, Terry was diagnosed with progressive supranuclear palsy (PSP). Terry was an avid golfer and loved to dance with his wife, Ileen, but over the past several years he went from falling occasionally to using a cane, then a

lk d h l h i H t h dwalker, and now a wheelchair. He cannot shower, dress himself, or sit up by himself without help. In spite of his challenges, Terry tries to remain active. He works out with a personal trainer two to three times a week and has acupuncture treatments, chiropractic care, and physical

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

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p p p ytherapy, which help prevent stiffening of his body.

The U.S. Food and Drug Administration's photostreamGold, M. et.al. (2012) Neuropsychiatric Disease and Treatment 2012:8 85-93.

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The Tau Connection• Davunetide (currently in development for PSP) affects multiple pathways that have

T P i T thi Cli i l Di

• Davunetide (currently in development for PSP) affects multiple pathways that have potential translation to tauopathy-related neurodegenerative disease .

Tau Protein

• A microtubule associated protein largely localized to neuronal axons

Tauopathies: Clinical Diseases• PSP• Alzheimer’s disease• Dementia pugilistica

• Important biological role in stabilizing microtubules and thereby aiding neuronal structure and axonal transport

• Guam ALS/PD• Pick Disease• Argyrophilic grain dementia• Nieman-Pick type Cp

• Hyperphosphorylation of tau at specific serine & threonine epitopes impairs it normal function; this process either l d l d f i & d h

Nieman Pick, type C• SSPE• MSA• Corticobasoganglionicdegeneration

FTDP 17leads to neuronal dysfunction & death, or is a marker of neuronal death.

• FTDP-17• Postencephalitic PD• Autosomal recessive PD

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

Growden, J. http://content.lib.utah.edu/cdm/singleitem/collection/EHSL-NOVEL/id/105

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A Big Leap from Orphan to Bigger Markets

• I th t h t f th bi l t th t f th di ?• Is there a strong enough support of the biology to the symptoms of the disease?• Does the data in one tau-related disease convincingly suggest efficacy in other

tauopathies?

2012 Frontotemporal Degeneration (FTD) Series

© Defined Health, 2012CNS Orphan/Subsegmenting Insight Briefing

http://www.alzforum.org/new/detail.asp?id=3193

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Opportunities to Balance the Risk in CNS

Subsegments

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Subsegmenting to Balance Risk

• Af i h i I f Y h H W d h i ki• After Fighting It for Years, Pharma Has Warmed up to the De-Risking Benefits of Sub-Segmenting

• Medically relevant subsegments (may or may not be orphan)• Medically relevant subsegments (may or may not be orphan)

• Specialty markets

• Genetic subsegments

• Biomarkers

• Companion diagnostics

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Subsegmenting to Balance Risk

• Af i h i I f Y h H W d h i ki• After Fighting It for Years, Pharma Has Warmed up to the De-Risking Benefits of Sub-Segmenting

• Medically relevant subsegments (may or may not be orphan)• Medically relevant subsegments (may or may not be orphan)

• Specialty markets

• Genetic subsegments

• Biomarkers

• Companion diagnostics

Only a few of these options are realistically viable in CNS disorders – today.

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Medically Relevant Subsets• Medically relevant subsets are discrete areas of unmet need and/or opportunity

Neurology

y / pp ywithin the context of larger patient populations, such as:

Movement Disorders Muscular Disorders Seizure Disorders Cognitive Disorders Chronic Pain

Medically relevant subsets include:– Intractable disease (e.g., refractory epilepsy)– Patient segments with debilitating symptoms (e g migraine with severe nausea & vomiting)Patient segments with debilitating symptoms (e.g., migraine with severe nausea & vomiting)– Early-onset, aggressive disease (e.g., pediatric multiple sclerosis)– Symptoms associated with late-stage, advanced disease (e.g., motor complications associated with

late-stage Parkinson’s disease)– More complicated and/or invasive methods of delivery (e g intrathecal administration infusionMore complicated and/or invasive methods of delivery (e.g., intrathecal administration, infusion

therapy)– Therapy associated with meaningful safety, tolerability issues (e.g., potential for severe allergic

reaction, association with life threatening opportunistic infections)– Novel therapeutic approaches (e.g., cell replacement, gene therapy)

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p pp ( g , p , g py)– Disabling comorbid symptoms (e.g., extreme fatigue in MS patients, cognitive impairment in PD) – i.e.,

supportive neurology

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Neurology Supportive Care: The Size & Magnitude of the Need

• “Neurologists are frustrated, along with their patients and caregivers, and would love to have something to effectively treat depression, cognitive impairments aggression and fatigue ”impairments, aggression and fatigue.

• “The most common cause of disability for the multiple sclerosis (MS) patient is cognition, not motor symptoms.”

• “We can have the best immunomodulator in the world (for the treatment of MS), but patient quality of life will still suffer.”

• “Psychosis is the major reason why patients with Parkinson’s disease (PD) and Alzheimer’s disease are admitted to nursing homes.”

• “Even at the early-stages, PD patients have significant issues with memory and problem solving.”

Poor Quality of Life

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Pimvanserin: A Supportive Neurology Product on the HorizonACADIA Pharmaceuticals Announces Completion of Enrollment in Phase IIIACADIA Pharmaceuticals Announces Completion of Enrollment in Phase III Pimavanserin Trial in Parkinson’s Disease Psychosis. Sep. 5, 2012-- ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD) today announced the completion of enrollment in its ongoing pivotal Phase III trial with pimavanserin in patients

i h P ki ’ di h i (PDP) T li l f hi i l d bwith Parkinson’s disease psychosis (PDP). Top-line results from this trial are expected to be announced by the end of November 2012.

Pimavanserin is ACADIA’s proprietary small molecule that acts selectively as an antagonist/inverse agonist on serotonin 5-HT2A receptors and is in Phase III development as a potential first-in-class treatment for Parkinson’s disease psychosis. Pimavanserin can be taken orally as a tablet once-a-day.

• Parkinson’s disease psychosis, or PDP, is a debilitating disorder that develops in up to 60% of patients with PD.

• PDP is associated with increased caregiver stress and burden nursingPDP is associated with increased caregiver stress and burden, nursing home placement, and increased morbidity and mortality.

• The level of unmet need is evident in the fact that today PDP is largely treated off label with antipsychotics despite the black box warning

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treated off-label with antipsychotics despite the black-box warning related to increased risk of death.

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Conclusions

• h d d d b f l l h h h• Orphan disorders and subsegments of larger patient populations where high unmet need remains offer potential opportunities to balance the risk/reward profile in CNS.

• While disease modification (and better, a cure) is the Holy Grail, many CNS disorders are in desperate need of symptom improvement to improve function and QoL. This holds true for CNS orphans and subsegments.

• The absolute scientific risk remains high for these programs, but the risk-adjusted benefit looks a whole lot better than it does for the traditional, big CNS diseases (smaller, shorter clinical studies; potentially less safety risk in high unmet need

i )patient groups).

• In addition, the cost of failure is significantly lower than for the bigger indications -and the reward can meaningful.

• To realize value, companies must define, measure and quantify clear and meaningful value to all stakeholders: physicians, patients, caregivers and payers.

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Conclusions

• O h / b t t iti i t fl• Orphan/subsegment opportunities come in two flavors:

– Repurposed compounds, now using modern science to better understand how mechanisms address the biology of the disease (e.g., NCAT program).

– While repurposing still may not of interest to big pharma, this strategy can be highly successful for biotech and specialty companies, particularly if they can aggregate several products targeted to a common market segment/call point.gg g p g g / p

– Novelty, with new mechanisms of action that provide multiple options to the innovator. Companies successful in this endeavor can address the orphan market themselves if they chose but will have the added benefit of bigmarket themselves, if they chose, but will have the added benefit of big pharma interest.

• The “orphan as a bridge to the big market” is an alluring strategy, but still lid t d i CNS M ti i ith t t t l ti f thunvalidated in CNS. Many questions remain with respect to translation of the

science and the potential to leverage data from one indication to another. However, these programs are sure to make big pharma sit up and take notice.

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Defined Health is pleased to present:

BioEurope Spring | March 11 – 13, 2013Barcelona, Spain

www.therapeuticinsight.com

24th Annual Cancer Progress ConferenceMarch 5 – 6, 2013 | Conrad New York

www.cancerprogressbyDH.com

Defined Health will also be participating in the following industry events:

CPRIT conference | October 24 - 26, 2012 - Austin | http://dfndhlth.com/CPRIT-2012 Life Sciences Summit | October 31 - November 1 2012 - New York | http://dfndhlth com/LSS-2012Life Sciences Summit | October 31 - November 1, 2012 - New York | http://dfndhlth.com/LSS-2012

US Japan Health Sciences Dialogue 2012 | November 27 - 28, 2012 - Philadelphia | http://dfndhlth.com/usjpn-hsd12

Current Trends in Biosimilars Development and Regulatory Pathways in the Global Marketplace 2012 | December 4 - 5, 2012 - Philadelphia | http://dfndhlth.com/CTBDRPGM-2012

ASH | December 8 11 2012 Atlanta | http://dfndhlth com/ASH 2012

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ASH | December 8 - 11, 2012 - Atlanta | http://dfndhlth.com/ASH-2012JPM & Biotech Showcase | January 7 - 13, 2013 - San Francisco | http://dfndhlth.com/bts-2013

BioEurope Spring 2013 | March 11 - 13, 2013 - Barcelona | http://www.ebdgroup.com/bes/index.php


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