a v e x a investor presentation 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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