A V E X A Investor Presentation Dr. Julian Chick, CEO Dr. Jonathan Coates, CSO January 2005 Forward-looking Statements This presentation includes forward-looking statements that are subject to risks and uncertainties. Such statements involve known and unknown risks and important factors that may cause the actual results, performance or achievements of Avexa to be materially different from the statements in this presentation. Actual results could differ materially depending on factors such as the availability of resources, the results of pre-clinical proof-of-concept studies, the timing and effects of regulatory actions, the strength of competition and the effectiveness of patent protection. Additional information regarding risks and uncertainties is set out in the Information Memorandum dated 5 July 2004 available from Avexa on request. Avexa • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa • ASX listed in September 2004 • Focus on significant markets of unmet medical need in infectious diseases – HIV, Hep B and antibiotic resistance (all pre-clinical) • 12 employees – Plus 20 external consultants via collaborations • AUD $10M in cash – Two years funding – Dedicated to existing programs • 3 products in pipeline Avexa – Overview Avexa – Current Product Pipeline Disease Indication Research Lead Compound Pre-clinical Phase I Phase II Non nucleoside HIV integrase Antibiotic Hepatitis B HIV VRI Q1 2005 Q1 2006 Q1 2006 Q4 2005 Q4 2006 Q1 2007 Q4 2006 • Large market potential – 350-400 million carriers of hepatitis B worldwide – Major causes of liver failure and cancer requiring transplant – Market expected to grow to >US$1B by 2008 (Source: Datamonitor) • Avexa’s project is focused on non-nucleoside compounds – target a different step in the replication of HBV to other drugs • Pre-clinical toxicology results expected in 2nd Qtr 2005 • Aim to be in Phase I clinical trials in 2006 Avexa Current Products – Hepatitis B • Avexa has a window of opportunity to develop one of the first HIV integrase inhibitors to reach the market, as: – there is no drug currently marketed that is active against HIV integrase; and – there is only one HIV integrase inhibitor currently known to be in clinical trials • A lead series has been chosen • Aim to be in Phase I clinical trials in 2007 Avexa Current Products - HIV Integrase • Vancomycin treats methicillin resistant Staphylococcus aureus (MRSA); – Vancomycin is generally the last line of defence against drugresistant bacteria – Resistance to vancomycin is becoming more frequent • Avexa targeting inhibition of bacterial cell wall synthesis – Looking to replace vancomycin by targeting vancomycin sensitive and resistant bacteria • In the next 12 months – determine the spectrum of activity – progress optimised molecule into animal models Avexa Current Products – New Antibiotic R&D Collaborations • Victorian College of Pharmacy – HIV & HBV • Shanghai Institute of Organic Chemistry – HIV & VRI • St Vincent’s Institute of Medical Research – HIV • Wollongong University – HIV & VRI • Rega Institute on Integrase (Belgium) – HIV Avexa – Overview To build a competitive biotechnology company we must… • Build a portfolio of early and late stage products • Advance projects to human clinical trials as fast as possible • Get a product on the market and generate cashflows Avexa – Business Strategy • An effective strategy to pursue these objectives and maximise gains from our existing early stage product portfolio is to secure a later stage clinical trial product which complements our existing project pipeline. • Consistent with this strategy, Avexa has licensed OXARA (SPD754), a Phase II drug from Shire Pharmaceuticals plc. Avexa – Transformation Avexa – New Product Pipeline Disease Indication Research Lead Compound Pre-clinical Phase I Phase II Non nucleoside HIV integrase Antibiotic Hepatitis B HIV VRI Q1 2005 Q1 2006 Q1 2006 Q4 2005 Q4 2006 Q1 2007 Q4 2006 HIV HIV OXARA - SPD754 - NRTI SPD756 – backup compound (option) Phase III Q1 2006 • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa Who is Shire? Shire is: • a global specialty pharmaceutical company • market cap around US$5 billion • worldwide sales US$590 million Shire has: • reduced its R&D spend, hence Avexa collaboration makes sense • closed its anti-viral operations • a product focus on gastrointestinal, renal disease & CNS Avexa – License Terms • SPD754 is a nucleoside reverse transcriptase inhibitor • Inhibits replication of the HIV virus – similar to other NRTIs on the market (ie 3TC) • Avexa: – pays NO upfront or milestones to Shire – licensed back North American marketing rights to Shire for royalty – retains rest of the world marketing rights – reciprocal royalty paid by each party – responsible for Phase II & Phase III trials – able to sub-license all or some rights – has option over HIV backup compound (completed Phase I clinical trials) Avexa – License Terms • Shire to make AUD$2M investment into Avexa – Initial investment escrowed – effectively 2 years – Shire has option to acquire additional 4 million shares in 3 years • Subject to shareholder approval • Working in collaboration with Shire – Joint Development committee • Avexa to access Shire’s regulatory team • Co-develop global marketing strategy – Post marketing trials 50/50 cost share Why Shire chose Avexa? • Looking to out-license anti-viral program – Closed down anti-infectives R&D program in North America – No longer has anti-viral drug development capabilities • Shire confident in Avexa’s ability: – Matthew Emmens, Chief Executive of Shire: “Avexa is an ideal partner for the product, having the skills and expertise to take this program forward and see it through to registration and approval in a timely manner.” (ASX announcement: 18 January 2005) • Existing strong multi-level relationships between Avexa and Shire • Negotiated a mutually beneficial relationship Why in-license SPD754? • Economical way to acquire a later stage product into the Avexa portfolio at no upfront or milestone cost • Expected significant revenue stream for Avexa in 2009 – versus 6 to 8 years from existing portfolio – utilise sales proceeds to self fund existing programs • Expected medium term increase in shareholder value – Phase IIb trial results in next 12-18 months – Creates a platform to build longer term sustainable shareholder value • Can develop SPD754 with 3 additional staff – cost effective • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa • Current >US$6bn market for HIV drugs suggest large market potential – >50% of sales is from NRTIs – HIV treatment market forecast to grow to US$12.2 billion by 2012 (Source: Datamonitor) • Western World (US & Europe) – ~ 950,000 HIV patients with around 30% receiving treatment – 64,000 new HIV infections per year – People living longer due to HIV therapies (HAART) • Ongoing need for new drugs – Side effects – Resistance – approximately 50% of treated patients The HIV Market Current HAART Regime NRTI* •Retrovir (AZT) •Videx •Hivid •Zerit •Epivir •Ziagen •Viread •Emtriva NNRTI* •Viramune •Rescriptor •Sustiva PI* •Invirase •Crixivan •Viracept •Agenerase •Norvir •Reyataz •Kaletra Early treatment 2 NRTIs 1 NNRTI Later treatment 1 or 2 NRTIs 1 NNRTI 1 PI Salvage treatment 1 or 2 NRTIs 1 NNRTI 1 PI or 1 Fusion inhibitor * NNRTI = Non-nucleoside RTI: PI = Protease inhibitor HIV – Current treatment • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa SPD754 Phase IIa Studies Complete • Proof of Concept Trial in 63 HIV-infected individuals – Patients had never taken any drug therapy to treat HIV (ie treatment naïve) – Treated with SPD754 for 10 days – 200 mg, 400 mg, 600 mg, 800 mg, 1200mg – Results: • Reduction in plasma viral loads (-1.18 to -1.65 log) on day 11 - equivalent or greater than that of other NRTIs • No adverse effects reported – Reduction in viral load was statistically significant • Positive clinical result and now need to differentiate product Avexa – planned SPD754 trials • Planning to do a ~ 60 patient Phase IIb study – Two doses plus placebo for 21 days – Aimed at targeting M184V (3TC generated mutant HIV virus patents) • Positions SPD754 as 1st line 2nd regimen therapy • Looking for > 0.6 Log10 drop in viral load in M184Vs • If successful in Phase IIb enter Phase III – US Bureau of Economics 2003 paper shows that all of the 29 HIV drugs that have entered Phase III have made it to market • These data suggest a high change of success once Phase III clinical trials entered SPD754 – Market position Patient Diagnosed with HIV Infected Early HIV Therapy e.g. AZT and 3TC Patient’s HIV infection is controlled Loss of clinical benefit LATE HIV Therapy Using 3 drugs SALVAGE Therapy Using 4 drugs Use for Rest of Life 30yrs old 31yrs old 31 – 35 yrs old 41 - 45 yrs old Patient’s HIV infection controlled Loses benefit 46 - 50yrs old SPD Rescued EARLY HIV Therapy 35 - 40 yrs old SPD has the potential to prolong life by 3 to 5 yrs replace 3TC or FTC with SPD754 • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa 1st Q • Announced VRI in vitro screening results • Commence Phase IIb trial with OXARA (SPD754) 2nd Q • Complete animal proof of concept with HBV compound 4th Q • Commence animal studies with HIV integrase inhibitor • Commence Phase I clinical trials with HBV compound • Commence animal studies with VRI anti-bacterial compound Avexa - Major milestones for 2005 1st Q • Obtain results of Phase IIb for OXARA 3rd Q • Commence Phase III trials for OXARA 4th Q • Commence Phase I/II clinical trials with HIV integrase inhibitor • Complete Phase I with HBV compound • Commence Phase II with HBV compound • Complete toxicology for VRI lead compound • Commence Phase I with VRI lead compound Avexa - Major milestones for 2006 Avexa – Product Pipeline in 2009 Disease Indication Research Lead Cmpd Preclinical Phase I Phase II Non- nucleoside HIV integrase Antibiotic Hep B HIV VRI HIV OXARA SPD754 - NRTI Phase III Market $$$ Revenues used to advance other Avexa projects 2010 2010 2010 2012 2012 • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa • Dr Jonathan Coates (CSO) – Ex Glaxo & GlaxoWellcome – Discoverer of lamivudine (3TC), Zeffix/Epivir, US$B drug – Worked on Relenza, head several virology projects at Glaxo – >25 years in drug discovery & development • Dr Susan Cox (Head of Virology) – Ex Glaxo, Astra & Medivir – Assoc. Prof. at Karolinska Institutet (Home of Nobel prize) – Development of foscarnet for CMV in HIV – > 16 years in drug development • Dr John Deadman (Head of Chemistry) – Ex-Trigen – 3 projects into clinical trials – >15 years in drug discovery Avexa – Senior Management Board • Dr. Hugh Niall (non-Ex Chairman) • Ms. Helen Cameron (non Ex-Dir) • Dr. Julian Chick (CEO & MD) SAB • Professor David Cooper (Chair) • Mr Mark Sullivan • Professor Roy Jackson • Dr Eric Gowans Avexa - Board • Company overview • The Shire Deal • Market Potential • Development Strategy • Key Milestones • Key Personnel • Summary Avexa ASX valuations of Phase II Projects A$279 •1 in Phase II •1 pre-clinical MBP/ASX Metabolic Pharmaceuticals A$20 •1 Phase II •1 pre-clinical AVX/ASX Avexa A$155 •1 in Phase II •1 in Phase I PGL/ASX Progen Industries •1 in Phase III •1 in Phase II •1 in Phase I •2 in Phase II •1 in Phase III Number of Products US$812 IDIX/Nasdaq Idenix A$90 PXS/ASX Pharmaxis Market Capitalisation ($ M) Code/ Exchange Company Summary • Existing programs progressing on track • In-licensed later stage product – Increased probability of reaching the market – Instant increase in company value – Decreased risk for shareholder – Validation of company skills & capabilities in anti-virals • Late stage product complements existing projects – Revenue will enable Avexa to retain more value from current projects • Looking to grow an anti-infectives company – Marketed product with revenue stream A V E X A www.avexa.com.au Dr Julian Chick Dr Lisa Springer Avexa Wilson HTM Chief Executive Officer Corporate Advisor
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