GTX: FILLING THE GAP

A recommendation to Cure on Gastrex drug license

opportunities

YBPS Marketing Case Competition

Richard Hernandez, MBA

Liying Jin, MS Statistics

Selina Tirtajana, MPH

Mike Ran Zou, PhD Pathology

* Candidates

Biotechnology & Pharmaceutical Solutions

PROBLEM STATEMENT

IBD is a chronic inflammation of the gastrointestinal

tract. Two major types of IBD are Crohn’s Disease

(CD) and Ulcerative Colitis (UC) – which affect

different parts of the GI tract.

Currently, there are unmet needs in IBD therapy

and Cure has been presented with licensing

opportunities (GTX-001 & GTX-002) from Gastrex

that can potentially fulfill these needs.

Based on pre-clinical studies results and market

analysis of these two drugs, we will provide

recommendation for Cure.

IBD PATH PHYSIOLOGYAntigen

GI Flora

1

1Antigen Processing & Presentation, Activation of Macrophages

Activated

Macrophage

Activated

T-Cell

TNFα IFNγTh1 Cell

Th2 Cell

IL-4IL-12

IFNγ

IL-10

Intestinal Lumen

2

2

Antigen Recognition & Activation of CD4+T Cell

Recruitment, Migration, and Adhesion

5

Generation of

Th1/Th2 Response3

3

Production of Proinflammatory Cytokines

4

4

5

Macrophage

Macrophage

Monocytes

Epithelium

Neutrophils

TNFα

IFNγ

IL-10

PREVALENCE ESTIMATES OF CD & UC IN

2008479,000

88,000

23,000 35,000

120,00090,000

26,000 19,000

US UK Italy Spain France Germany Japan China

CD Prevalence Estimate

525,000

148,000

70,00044,500

80,000100,000 96,000

154,000

US UK Italy Spain France Germany Japan China

UC Prevalence Estimate

GTX-001 SHOWS PROMISING RESULTS IN

PRE-CLINICAL STUDIES

GTX-001 is a Monoclonal Antibody that targets VLA-1

Blocks immune cell trafficking/activation

Pre-clinical (animal studies) results

Improved inflammation score within 4-6 wks

Dose of 2mg/kg intravenously (IV) every 48 hours

Drug tolerated up to 6 mg/kg

Good substitute of existing biologicsin the market

VLA-1

GTX-001

GTX-002 SHOWS PROMISING RESULTS IN

PRE-CLINICAL STUDIES

GTX-002 is a small molecule compound used to induce T-cell death by targeting IκB Kinase

Effectiveness confirmed by cell-based assays

Pre-clinical (animal studies) results

Remodeling of GI commensal flora indicates altered pathology

Susceptibility to bacterial infection demonstrates immunosuppresion

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

Good remission, but not induction, agent

Dosage above threshold limit causes liver and kidney toxicity

50 mg/kg orally or 5 mg/kg IV

GTX-002

cell

death

Type of treatment Pros & Cons

5-ASA (Asacol, Lialda,

Pentasa, Colazal,

Sulfasalazine)

-Reliable & effective for mild CD/UC cases

-Relatively affordable

-Used to maintain remission in moderate cases (but

lack efficacy in more severe cases)

Steroids (Budesonide,

Prednisone,

Methylprednisolone)

-Effective for induction of remission

-Cheap

-Long term side effects make it a poor agent to

maintain remission

Immunomodulators

(Azathioprine, 6-MP)

-Effective maintenance therapy for moderate to severe

cases (up to 60% response rate)

-Slow onset & high rate of toxicity

Biologics (Infliximab,

Adalimumab,

Natalizumab,

Certolizumab)

-Effective in severe cases

-Expensive, relatively inconvenient to administer

-Few clinical data in UC cases

-Patients don’t respond / lose response to TNF-α

inhibitor over time.

CURRENT TREATMENT

UNMET NEEDS IN IBD THERAPY

Mild

(5-ASA)

Moderate

(5-ASA, Steroids,

IM)

Severe

(Steroids, IM,

Biologics)

Crohn’s Disease/Ulcerative Colitis

NONE 1. Induction agent safer than steroid

2. Remission agent that is more effective

than 5-ASA and/or has faster onset &

safer than IM

3. Substitute to anti-TNF with safer

profile

4. Biologics with better sustained remission rates

Mild IBD cases are well served by 5-ASA

Severe patients failed to respond to anti-TNF therapy, which

dominates the current market to treat moderate to severe IBD

5-ASA

5-ASA

Steroid

5-ASAMild

Moderate

Severe

Steroid

IM1

Biologic

Biologic2

Treatment

Refractory

Treatment

Refractory

No

TreatmentNo

Treatment

1 2 3 4

5 6

Maintenance

Induction

Maintenance

Induction

5-ASA

5-ASA

Steroid

5-ASA

Steroid

IM1

Biologic

Biologic2

5-ASA

5-ASA

Steroid

5-ASA

Steroid

IM1

Biologic

Biologic2

Patient Segments in Crohn’s Disease

POTENTIAL TARGET MARKET FOR GTX001

AND GTX002

Choice of market segments based on

pre-clinical findings

GTX002

GTX001

DRUG VALUATION ON THE MARKET

Assess net value at the present day by discounting cash flow of future revenue and subtracting license fees and other associated payouts.

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

Generic biologics are not competitive

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

GTX-002 fails to meet a positive NPV

Growth Rate NPV (discount rate

at 11%)

-1% -16.38

-0.9% 0

0% 105.98

0.6% 188.97

3% 609.27

5% 1099.33

Growth Rate NPV (discount rate

at 9%)

-1.8% 0

-0.9% 118.00

0% 283.04

1% 476.03

3% 965.43

5% 1633.84

RECOMMENDATION: FILL THE GAP!

Purchase license for GTX-001

There is a demonstrated market need

Added advantage of being a biologic in the US because

barriers of entry

NPV is positive and therefore a profitable drug

Do not purchase license for GTX-002 under the

current agreements.

Market is well served by other available agents

56% of market share is required in order to break even

in the licensing investment

Consider renegotiating license fee or changing payout

structure to delay payment

Q&A

CITATION

Title slide image

http://www.scumdoctor.com/images/How-Much-Does-

Enbrel-Suppress-The-Immune-System.jpg

Biologics cannot have generic synthetic

http://www.businessweek.com/bwdaily/dnflash/content/

mar2007/db20070314_175878.htm

Decision tree for pharmaceutical acquisition.

http://www.springerlink.com/content/j28414r31p013

331/fulltext.pdf

Sands, Bruce E. Therapy of Inflammatory Bowel

Disease, GASTROENTEROLOGY 2000;118:S68–

S82

INTERNATIONAL MARKET FOR CD?

Prevalence Market Share Potential Market Share

US54%

UK10%

Italy3%

Spain4%

France14%

Germany10%

Japan3%

China2%

US70%

UK8%

Italy1%

Spain2%

France13%

Germany6%

Japan0%

China0%

INTERNATIONAL MARKET FOR UC?

Prevalence Market Share Potential Market Share

US63%

UK16%

Italy4%

Spain2%

France5%

Germany6%

Japan3%

China1%

US43%

UK12%

Italy6%Spain

4%

France6%

Germany8%

Japan8%

China13%