ERAD Therapeutics Inc. · 2016-08-30 · Most common; does not impact the Central Nervous System,...

ERAD Therapeutics Inc.

AN ORPHAN DRUG COMPANY FOCUSING ON GAUCHER DISEASE

© ERAD 2016 - CONFIDENTIAL 1

All content in this slide presentation is confidential and the property of ERAD Therapeutics Inc.

August 2016

ERAD Overview


Gaucher and other lysosomal storage diseases are orphan designated diseases

Large and profitable market opportunity

�  Type 1 Gaucher market currently exceeds $1.6 billion per year and is growing

Experienced management team and Board of Directors

Tremendous unmet clinical need

� No therapeutic options for Type 3 Gaucher patients

�  Existing Type 1 therapy’s do not address the neurological aspects of Gaucher

� Our drug can cross the blood brain barrier and will address the neurological and non-neurological manifestations of Type 3 and Type 1 Gaucher

We create novel biological agents to treat orphan diseases with an initial focus on Gaucher disease, a lysosomal storage disease

Private pre-clinical drug company

Our Technology


In-licensed from Hospital for Sick Children, Toronto, Canada (SickKids)

� World-wide exclusive rights

� Supported by data in animals and cell lines

Platform technology

� Based on the Endoplasmic Reticulum Associated Degradation (ERAD) pathway

� Portfolio of related but distinct compounds

� Potential for both intravenous (IV) and oral (pill) formulations

�  Initial focus on Type 3 Gaucher with applicability for Type 1 patients

Entering manufacturing development stage for parenteral formulation preliminary to additional trials

Key patents at national phase covering both use and composition of matter

Advanced discussions around unique production, formulation, and oral delivery

Orphan Drug Overview


The Orphan Drug Act (ODA), a federal law established in 1983, aims to encourage pharmaceutical companies to develop drugs for rare diseases with small markets:

� Focused on rare diseases affecting less than 200,000 patients in the U.S.

� Over 55 million people are estimated to suffer from a rare disease in the U.S. and Europe

� Global estimates are between 5,000 and 7,000 rare diseases

� ODA provides multiple financial incentives for orphan drug development

� Although the patient population is small orphan drugs have the highest per patient cost; Average drug cost per patient is 13.8x higher for orphan drugs versus non-orphan1

� Since 1983, over 2,800 orphan drug designations have been assigned

� More than 400 products have received U.S. market authorization

� Japan and Europe have enacted similar legislation

Sources: 1. FDA; 2. EvaluatePharma: Orphan Drug Report, 2015

Advantages of Orphan Drug Development


Key Advantages

� Shorter timeline to market

� Requires significantly less resources

� <100 patients for Gaucher Phase III clinical trials

� <550 patients for all orphan drug Phase II/III studies

�  Tax credits (<50% of R&D costs & clinical trial incentives)

� Phase III up to 50-75% cheaper than non-orphan drugs

� Waived FDA fees and protocol assistance

�  FDA is often more flexible with approvals

� Marketing exclusivity (7 years from approval in the U.S.)

�  Lower marketing costs as patients are easily located

� Higher drug prices

�  Faster uptake and market acceptance

� Generally well reimbursed

Orphan drugs are often brought to market quickly, yield impressive sales in small, targeted patient populations increasing the potential for strategic partnerships and/or sale with large Pharma

Large Pharma is Active in Orphans


Key Market Statistics:

� Worldwide orphan drug sales forecast to grow to $178 billion by 2020 with a CAGR

of +11.7% (2015 to 2020); almost double overall prescription market growth

� Orphan drugs set to be 20% of worldwide prescription sales by 2020 (excluding

generics)

�  7 of top 10 companies by orphan drug sales in 2020 will be Large Pharma

Sources: 1.Nature Biotechnology: Acquiring orphans, 2014; 2. EvaluatePharma: Orphan Drug Report, 2015

Large Pharma is extremely active in the orphan drug space:

�  40% of acquired biotechs between 2008-2012 had an orphan drug in development

� Novartis, GSK, Roche and Pfizer are largest orphan drug companies

� Pfizer, Gilead, Roche, Shire, BMY and Celgene are leading orphan drug acquirers

�  50% of top 20 orphan drugs were either acquired or in-licensed by Large Pharma

Gaucher & Lysosomal Storage Diseases


Gaucher and other lysosomal storage diseases originate from genetic mutations that result in “mis-folded” or mutated enzymes

Mis-folded enzymes are naturally destroyed via Endoplasmic Reticulum Associated Degradation (ERAD), which results in critical enzyme deficiencies

By temporarily blocking ERAD we can restore critical enzyme activity

Lysosomal storage diseases, including Gaucher, are orphan drug designated diseases

Lysosomal storage diseases are a group of approximately 50 rare inherited metabolic disorders that are characterized by an abnormal build-up of various toxic materials in the body's cells as a result of enzyme deficiencies

Even though these enzymes are mis-folded, many, including Glucocerebrosidase (the enzyme deficiency responsible for Gaucher), are functional

Gaucher Disease


Type 1

Most common; does not impact the Central Nervous System, and usually presents in adulthood with an enlarged liver, enlarged spleen, anemia, and bone disease

�  6,000 – 7,000 U.S. patients

�  5 therapies on the market with $1.6 billion in sales per year

Type 2

Exceedingly rare; involves the CNS, affects infants and is uniformly fatal by 2 years of age

� ~250 U.S. patients

�  There are no therapies for Type 2

Type 3

Begins at any time in childhood, involves the CNS, and is characterized by slowly progressive neurological deterioration and premature death

�  750-1,000 U.S. patients

�  There are no therapies for Type 3

There are ~8,000 total U.S. cases with a predominance in Ashkenazi Jews. Gaucher is classified into 3 types according to neurological deterioration, age and progression rate:

Our Unique Therapeutic Approach


� Our principal discovery gives us the ability to prevent destruction of mutated or mis-folded enzymes

� Some bacterial toxins can block the ERAD pathway; we have engineered novel molecules that lack toxicity but retain this activity

� Our engineered constructs have 2 distinct proteins, (A and B subunits) joined together

�  The B subunit is the targeting vector that attaches to the cell surface of virtually every cell in the body and has been shown to cross the Blood Brain Barrier

�  The A subunit temporarily blocks normal ERAD and effectively prevents the degradation of mis-folded enzymes

� Our drug restores enzymatic activity to functional levels thereby reversing disease states and can treat the neurological deterioration that accompanies Type 3 disease

�  Ability to treat Type 1 Gaucher patients and other lysosomal storage disease indications with IV and oral administration

Our approach is unique and may also be complementary to existing Type 1 treatments

FDA Approved Treatments


FDA approved treatments for Type 1 Gaucher revolve around two approaches.

Neither of these approaches address the fatal neurological deterioration that accompany Type 2 and Type 3 disease. These patients have no therapeutic options

Enzyme Replacement

Therapy

(ERT)

(intravenous)

Biologics aimed to replace the critical enzyme deficiency; administered through IV infusion every 2 to 4 weeks

�  3 drugs: Marketed by Sanofi (Genzyme), Pfizer, and Shire

�  Avg. Price of $405,000 / year/ patient

�  ~$1.5 billion in total annual sales

Substrate Reduction Therapy

(SRT)

(oral)

Small molecule drugs aimed to decrease the accumulation of harmful storage material; administered through daily pills

�  2 drugs: Marketed by Sanofi (Genzyme) and Acetelion Pharma

�  Avg. Price of $302,000 /year/patient

�  Significant side effects restricting adoption

�  ~$150 million in total annual sales

Tremendous Initial Type 3 Market Opportunity


Type 3 Gaucher Market Opportunity

� Initial Opportunity - $325 million U.S. Market

� No existing therapies on market or under development

� We address the fatal neurological deterioration of Type 3 disease

� All Type 3 patients should be treated

� ~800 addressable U.S. patient population (100%)

� Premium pricing: We assume $405,000 /year/ which is the average of ERT drug price

� Although small market, successful companies such as Alexion has focused on diseases with less than 500 patients

Demonstrated ability to address an UNMET CLINICAL NEED In Type 3 Gaucher patients

Initial $325 million Type 3 Gaucher market opportunity without competition

Expanding Type 1 Market Opportunity


Type 1 Gaucher Market Opportunity

� Current $1.5 billion U.S. market for intravenous administered ERT therapy; Only 50-60% of Type 1 patients are treated

�  ERAD plans to introduce an oral formulation of our drug

� We believe newly diagnosed Type 1 patients will be preferentially started on our oral formulation and existing Type 1 patients may switch to our oral formulation

�  $2.35 billion U.S. market opportunity in Type 1

�  6,000 to 7,000 total addressable U.S. patient population (100%)

� Premium pricing: We assume $364,000 /year/ which is the average of cost of all Type 1 therapies

� Potentially applicable in treating the Parkinson-like symptoms associated with both Gaucher patients and disease carriers

Expanding market opportunity to treat Type 1 patients based on oral dosage in an existing large and profitable market

Market opportunity may expand by $2.3 billion for Type 1 Gaucher patients

Gaucher Market


�  The total Type 1 Gaucher market exceeds $1.6 billion dollars

�  All 5 approved Type 1 drugs continue to show year over year growth

�  The indication supports multiple drugs

�  Premium pricing is preserved with average annual drug cost per patient exceeding $360,000

�  Pricing remains strong even as new drugs are introduced

�  Early mover advantage

LifeSci Capital Equity Research Analysis of Orphan Drug Market

February 4, 2016

Near-Term Corporate Objectives


Value-creating milestones for the next 18 months

Create a reliable supply

of drug suitable for parenteral

administration

Initiate additional pre-

clinical and preliminary

toxicity trials utilizing the parenteral

formulation

Submit and obtain Orphan

Drug Designation

Hold Pre-IND meeting with

FDA

Initiate work on oral

formulation of our drug


Production of interim parenteral material

Orphan Drug Designation Application

In-vivo and in-vitro experiments

Initiate work on plant based oral formulation of material

Initiate GMP for parenteral formulation

0 150 300 450

$1 million use of proceeds over 18 months including $300K of working capital

Use of Proceeds for Initial Pre-Clinical Development

$25K

$25K

$150K

$250K

$250K

Days to complete

Aug. 2016 è Jan. 2018

A

B

C

D

E

Use of Proceeds to Clinical Stage


0 250 500 750 1,000

$1.5M

D $500K

C $150K

B $25K

A $25K

J

I $500K

H $50K

G $100K

F $750K

E

Days to complete Production of interim parenteral material

Orphan Drug Designation Application

In-vivo and in-vitro experiments

Complete plant based oral drug manufacturing

Complete GMP manufacturing of parenteral drug

Toxicology studies

Pre-IND meetings with FDA

Neuro studies demonstrating CNS delivery

Submit IND application

Initiate phase 1 trials

Aug. 2016 à Jan. 2019

$4.5 million use of proceeds over ~3 years including $1 million of working capital

Rare disease companies have premium valuations

�  Alexion has a market cap of $29B

�  Biomarin has a market cap of $16B

Multiple $100M+ deals for pre and clinical stage orphan drugs

�  Sanofi/Genzyme: $20B - Lysosomal storage disease

�  Shire/Acceleron: $498M - Duchenne muscular dystrophy

�  Shire/Nimbus Discovery: - Lysosomal storage disease

�  Roche/ISIS: $362M - Huntington’s disease

�  Biogen Idec/KNOPP Neurosciences: $265M - ALS

Large Pharma is extremely active in this space both acquiring and/or partnering with smaller drug development companies

�  50% of top 20 orphan drugs were either acquired or in-licensed by large Pharma

�  ~40% of acquired biotechs between 2008-2012 had an orphan drug in development

Exit Strategy


Acquisition or Partnership

Compelling Valuations

Leadership Team


Oscar Bronsther, M.D., F.A.C.S – Chief Executive Officer

�  Former CEO and current Director at MetaStat, Inc.

�  Clinical Professor at George Washington University

�  Former Chairman, Section of General Surgery at Inova Fairfax Hospital

Robert Bender – Chairman of the Board

�  Serial entrepreneur with 35+ years in biotech and devices

�  Multiple startups with successful exits

�  Private and public offering experience on both sides

George Spitalny, Ph.D. – Chief Scientific Officer, Director

�  25+ years in the biotech and pharmaceutical industry

�  Former Director of Immunology at Bristol-Myers Squibb

�  Former Sr. Vice President, Clinical Development at Kyowa Hakko Kirin Pharma

Craig Sibley, MB, HBSc. – Executive Vice President, Director

�  25+ years in the healthcare and life sciences industry

�  Former companies include AMGEN Canada, Schering Canada, and Ares-Serono

ERAD Therapeutics Inc. · 2016-08-30 · Most common; does not impact the Central Nervous System,...

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