GTX: An opportunity not to be missed?

1. GTX: An opportunity not to be missed? Carlos Stahlhut ● Elana Fishman ● Dorothy Kwok Juliana Tolles ● Vipender Singh Lucky 13

2. 1. Breach of intestinal wall causes abnormal interaction between local immune cells and intestinal bacteria. 2. Inflammatory cytokines attract leukocytes from bloodstream. Crohn’s Disease and Ulcerative Colitis VLA-1 3. Activated T cells escalate inflammation via cytokine signals to other cells. 4. Neutrophils, macrophages, and antibodies attack the intestinal mucosa. CD TH1 TNFα, IL-2, IL-3 TH Neutrophil ROS TH2 IL-3, IL-4, IL-5 B cells UC

3. Epidemiology

4. Treatment Options • Efficacy • High cost • Long term safety Severe Symptom Severity Moderate • Low cost • Side effects Mild • Low cost • Limited efficacy The current drug options fail to meet the need for an effective and safe treatment

5. Treatment Limitations Crohn’s Disease Ulcerative Colitis • Moderate unmet need • Resistance to treatment • Safety risks • Moderate-high unmet need • Resistance to treatment • Limited remission sustenance Severe • Moderate unmet need • Side effects • Limited efficacy • Moderate unmet need • Side effects • Limited efficacy Symptom Severity Moderate • Low unmet need • Low efficacy • Very low unmet need • Effective and safe Mild

6. GTX-001: Monoclonal Antibody Against VLA-1 Antigen • Different mechanism; Most Biologics Target TNF- • Not T-cell specific; Broad Immune Response • Competition: biologics and immunomodulators • Target Groups: Moderate to severe forms of Crohn’s Disease and Ulcerative Colitis GTX-001 Targets VLA-1 Biologics & IMs for Crohn’s Disease Biologics & IMs for Ulcerative Colitis Tysabri $15 MM Cost $20,000-30,000 Administered SC Immunomodulators $ 57 MM Cost $100-700 Administered Oral Immunomodulators $ 44 MM Cost $100-700 Administered Oral Cimizia $80 MM Cost $12,000-17,000 Administered SC Humira $ 420 MM Cost $15,000-20,000 Administered SC Remicade $ 940 MM Cost $10,000-15,000 Administered IV Remicade $ 660 MM Cost $10,000-15,000 Administered IV US & EU Market (2008) = $ 1,512 MM US &EU Market (2008) = $ 704 MM

7. GTX-002: Small Molecule Inhibitor TH UC CD • Kinase inhibitor that targets NF-kB pathway in T-cells • Kills stimulated T-cells • Potential be effective against all forms of disease • Combination therapy: For mild and moderate forms • Potential to replace biologics TH2 TH1 IL-3, IL-4, IL-5 B cells TNFα, IL-2, IL-3 Cytotoxic T cells Crohn’s Disease Market Landscape Ulcerative Colitis Market Landscape 5-ASA Sales $ 516 MM Biologics Sales $ 1,455 MM Biologics Sales $ 865 MM 5-ASA Sales $ 807 MM Steroids Sales $ 33 MM Immunomodulators Sales $ 57 MM Immunomodulators Sales $ 27 MM Steroids< $ 1.1 MM US & EU Market (2008) = $2,060 MM US & EU Market (2008) = $1,516 MM

8. Achieving Desired Target Profile Preclinical studies • Demonstrate lower inflammation scores with • Alternative delivery method • Lower frequency of administration (compared with IV every other day) • Demonstrate sustained remission Clinical studies • Efficacy in humans • Acceptable levels of toxicity and safety given non-humanized Ab • Equivalence/superiority to standard of care Preclinical studies • Demonstrate lower inflammation scores • Alone • In combination with existing treatment options • Acceptable induction time • Demonstrate sustained remission • Comparable or superior performance to biologics Clinical studies • Efficacy in humans • Acceptable levels of toxicity and safety • Equivalence/superiority to standard of care • GTX-001 • GTX-002

9. GTX001: Financials Upside Case • Licensing Agreement • Licensing Fee: $10mm • Total Development: $300mm • Milestone Payments: $100 Phase I, $100 Phase II, $200 Phase III • Royalty to Gastrex: 10% of sales • Sales Assumptions • Price per year: $17,000 • Peak penetration (both CD and UC) • Operating Assumptions • Sales and marketing: $100mm in 2019 and 2020, 20% of sales through 2032 • Cost of goods sold: 40% of sales • Tax rate: 35% Base Case Downside Case

10. GTX002: Financials Upside Case • Same Licensing Agreement • Sales Assumptions • Price per year: $5,000 • Peak penetration (Crohn’s Disease) • Peak penetration (Ulcerative Colitis) • Operating Assumptions • Sales and marketing: $100mm in 2019 and 2020, 20% of sales through 2032 • Cost of goods sold: 20% of sales • Tax rate: 35% Base Case Downside Case

11. Recommendations • License GTX-002 under proposed structure • Captures broader segment of market (all levels of disease severity) • Small molecule offers more convenient delivery option at lower cost • High level of return with low downside risk • Offer $2mm per year for 2 years to maintain licensing option for GTX-001 contingent on preclinical performance • Safety concern regarding immune response • Demonstrate effectiveness with lower frequency of administration • Investigate other delivery routes GTX-001 and GTX-002 represent novel and exciting treatments for IBD

12. Thank You & Questions

13. Appendix

14. Summary of Clinical Trials Source: Makuch, R (2009 October) Phase of Clinical Trials Clinical Trials. Lecture conducted from Yale University, New Haven, CT

15. Top Products by Sales in 2014 Source: FierceBiotech 18 Jun 2009, courtesy of Pfizer.

16. Calculations to support drug pricing assumptions for GTX-001

17. Non-case sources • Pfizer Annual Report 2008 • Roche Annual Report 2008 • Novartis Annual Report 2008 • www.uptodate.com (evidence-based, peer reviewed website) • www.fda.gov • www.cdc.gov