Post on 19-Dec-2015
GTX: An Opportunity Not to be Missed?
Team VeritasReuben Estrada MBA Candidate
Fang Fang PhD Candidate
Stan Guthrie PhD Candidate
Minlee Kim PhD Candidate
Hiromi Yoshida MD/MBA Candidate
Crohn’s Disease• Targets small intestine and colon• Extensive transmural
inflammation and ulceration• “Skip lesions”• Abdominal pain, diarrhea, and
rectal bleeding
Ulcerative Colitis• Targets colon and rectum• Inflammation and ulceration in
mucosal and submucosal layer of the colon and rectum
• Continuous involvement• Abdominal pain, diarrhea, and
blood stools
Two IBD diseases Symptoms
Ulcerative Colitis (UC)• Prevalence and incidence peak in the 20-
29 year age group • Prevalence highest in the US, and
Northern Europe
Crohn’s Disease (CD)• Prevalence and incidence peak in two groups:15-30 and 55-80 year of age• Prevalence highest in the US and UK
CD594,300
UC525,000
CD479,000
UC525,000
CD440,700
UC442,500
CD356,000
UC442,500
CD55,770
UC250,000CD
45,000
UC250,000
affect many people Market Analysis
Crohn’s Disease Ulcerative Colitis
Primary Goals• Induce remission of acute flares• Maintain remission• Try to substitute steroids
TreatmentProgression
CurrentMarket Share
No Treatment Topical 5-ASA 5-ASA/Sulfasalazine Antibiotics Oral Corticosteroids IV Corticosteroids 6-Mercaptopurine/Azathioprine Methotrexate Cyclosporine Infliximab Experimental Therapies… (20% UC received colectomy)
Severe
Mild
who have some options Market Analysis
Crohn’s DiseaseSeverity Unmet Need
Mild (46%) Oral agent for maintenance
Moderate (38%)Maintenance drug with better side-
effect profile
Severe (16%)Maintenance drug different from anti-
TNF-α therapy Remission Maintenance drug
Ulcerative ColitisSeverity Unmet Need
Mild (55%) Current therapies effective
Moderate (30%)Maintenance drug that is fast-acting
and safe
Severe (15%)Maintenance drug
with better response rates
Remission Maintenance drug
Maintenance drugMinimal side effectsDifferent from anti-TNF-α therapy
but not many Unmet Needs
• Longer acting• Convenient delivery mechanism• Minimal side effects• Humanized drug• Excellent value• Faster onset of action• Synergy with existing drugs• Attacks disease through a different pathway
We can address this need Ideal Drug Profile
GTX-001• Biologic• IV (6mg/kg) in vivo• Significantly reduces
inflammation with 2mg/kg, every other day, after 4-6 weeks
GTX-002• Immunomodulator• Oral (50mg/kg) or IV (5mg/kg)• Liver/kidney toxicities• Bacterial infection• Synergistic if combined with 5-
ASA/steroid
Inhibits activation of pro-survival pathway and induces T-cell apoptosis
Inhibits leukocyte migration and accumulation in gut mucosa
collagen
VLA-1MEKK3
IKKs
TNF-α
and have two ways to do it GTX-001 and GTX-002
Phase 1($42MM)
•Initial Safety•Dosing and delivery
Phase 2($67MM)
•Safety and efficacy
Phase 3($241MM)
•New Drug vs. Existing Drug
Phase 4 •Long-term safety and effectiveness•Post-marketing surveillance
Clinical R&D ($350MM)Preclinical R&D ($50MM)
• Dosing• Efficacy• Toxicity• Pharmacokinetics• Synergies with existing drugs• Effects on refractory IBD
cases• Long-term side effects
The process requires Drug Trials
DISEASE
CD
UC X
• 206,4005ASA• 40,000Steroid
• 122,000IM
MARKET SIZE PROFITGTX-002
GTX-001
147.36MM X
Annual Figures
UC diseaseSynergies100% of marketPrice of $400
159MM + 10% Sales
DISEASE
CD
UC
MARKET SIZE PROFIT
159MM + 10% Sales
• 32,500Refractory
• ?Biologic
• 20,000Refractory
• ?Biologic
1.522B
Annual Figures
CD and UC diseaseRefractory50% of marketPrice of $21,000
1.21B
making a choice Drug Selection
Revenue 1,522,500,000Cost of Sales: Selling, informational and administrative expenses 100,000,000 Acquisition-related in-process R&D charges: Licensing Fee 833,333 Late stage development costs 25,000,000 R&D Milestone 33,333,333Royalty Costs 152,250,000
Net Income 1,211,083,334
INCOME STATEMENT:
Phase 1 70%
Phase 2 33%
Phase 3 30%
Growth rate- 3%Discounting rate- 10%Price- $21,00052.5 thousand people13 year period
EXPECTED VALUE
7% - success rate
Total Actual Value: 20.1B Total Actual Value: 1.4BTotal Present Value: 10.5B Total Present Value: 738MMCosts: 710MM Costs: 710MMProject Value: 9.83B Project Value: 28MM
IF SUCCESSFUL ADJUSTING FOR RISK
running with the numbers Calculations
Product
• GTX 001•Maintenance drug for both CD and UC
Price
• $21,000
Target Market
• Refractory patients• Moderate and severe patients
Future Direction
• Expansion into international markets• Development and commercialization for other diseases• Extension of patent – orphan drug patent• Re-negotiation of contract• License exclusivity• Decrease production costs
and developing a plan Proposal
Acknowledgements
J.A. DiMasi et al. “The Price of Innovation: New Estimates of Drug Development Costs.” Journal of Health Economics 22 (2003): 151-185.
Marianne Moody Jennings. Business Ethics: Case Studies and Selected Readings. Mason: South-Western Cengage Learning. 2009.P.M. Matthews. “The Long, Sometimes Bumpy Road of Drug Development.” The Dana Foundation. 2006. <http://www.dana.org/news/cerebrum/detail.aspx?id=5486&p=2>.John Hopkins Medicine Gastroenterology & Hepatology <http://www.hopkins-gi.org/>
Additional Information References
Current TreatmentCrohn’s Disease Ulcerative Colitis
Goals- Induce remission of acute flares - Maintain remission -Try to substitute steroid
Market ShareUS EU US EU
5-ASA- Pros: Oral; Cheap- Cons: Few have robust efficacy data
- Pros: Oral; Cheap; Lower dosing; Well developed- Cons: Ineffective for severe form; Poor retention
Steroids- Pros: Effective; Rapid-acting for acute flares- Cons: Long-term side effects
- Pros: Oral; Effective induction; Rapid onset- Cons: Long-term side effects; Infection;
Immuno-modulator
- Pros: Oral; Effective for severe condition; Cheaper than biologic- Cons: Harmful when combine with TNF-a
- Pros: Oral; Highly effective- Cons: Toxic; Potential tremors/infections; Slow onset; Not for pregnant women
Biologic
- Pros: Robust clinical data (eg. Infliximab) Higher comfort level; Possibility of SC Choice of non-anti-TNF-a approach-Cons: IV; Not fully humanized; Infections
- Pros: Effective; Reduce surgery-Cons: IV; Can’t stop once started; Infection Long-term safety
Others No treatment or Refractory 20% undergoes Colectomy
8.78%
20.34%
20.99%
21.41%
19.27%9.21%
No Treatment ATA ATA+Steroid Steroid+IM Biologic Refractory
3.77%
12.81%
18.83%16.01%
42% 6.59%
6.65%
13.85%
40.72%
15.24%
14.4%9.14%
4.77%
7.4%
36.75%
11.93%
30.79%8.35%
Population Predictions
CDPopulation
US EU
Prevalence Incidence Biologic Refractory Other Treat Prevalence Incidence Biologic Refractory Other Treat
2007 479,000 20,212 101,540 43,831 307,864 355,200 14,988 51,271 24,618 260,464
2008 481,526 20,327 102,077 44,063 309,493 357,074 15,073 51,542 24,748 261,842
2017 505,873 21,246 107,216 46,281 325,074 375,127 15,754 54,137 25,994 275,024
2020 516,897 21,590 109,528 47,279 332,085 383,303 16,010 55,305 26,554 280,956
2021 520,802 21,705 110,346 47,632 334,564 386,198 16,095 55,718 26,752 283,053
2022 524,821 21,820 111,187 47,995 337,114 389,179 16,180 56,142 26,956 285,211
2023 528,956 21,935 112,051 48,368 339,734 392,244 16,265 56,579 27,166 287,427
2024 533,205 22,049 112,939 48,751 342,425 395,395 16,351 57,027 27,381 289,704
2025 537,569 22,164 113,850 49,145 345,187 398,631 16,436 57,487 27,602 292,041
2026 542,047 22,279 114,784 49,548 348,020 401,953 16,521 57,959 27,828 294,438
2027 546,641 22,394 115,742 49,961 350,924 405,359 16,606 58,442 28,061 296,895
2028 551,350 22,509 116,723 50,385 353,898 408,850 16,691 58,938 28,299 299,411
2029 556,173 22,624 117,727 50,818 356,944 412,427 16,776 59,445 28,542 301,988
2030 561,111 22,738 118,755 51,262 360,060 416,089 16,862 59,964 28,791 304,624
2031 566,164 22,853 119,806 51,716 363,247 419,836 16,947 60,494 29,046 307,320
2032 571,332 22,968 120,881 52,180 366,505 423,668 17,032 61,037 29,307 310,077
UC Prevalence Incidence Biologic Refractory Other Treat Prevalence Incidence Biologic Refractory Other Treat
Every year 525,000 21,000 67,253 19,793 403,410 442,500 17,700 32,745 21,107 248,154
- For CD, prevalence and incidence increase linearly every year.- For UC, prevalence remain stable through out the whole
period; incidence and death rate balance out.
Assumptions:- Consider a 4% constant death rate.- using the market segment provided predict each medicine sector.