GTX: An Opportunity Not to be Missed?

1. GTX: An Opportunity Not to be Missed? Team Veritas Reuben Estrada MBA Candidate Fang FangPhD Candidate Stan Guthrie PhD Candidate Minlee Kim PhD Candidate Hiromi Yoshida MD/MBA Candidate

2. Two IBD diseases Symptoms Crohn’s Disease Ulcerative Colitis Targets colon and rectum Inflammation and ulceration in mucosal and submucosal layer of the colon and rectum Continuous involvement Abdominal pain, diarrhea, and blood stools • Targets small intestine and colon • Extensive transmural inflammation and ulceration • “Skip lesions” • Abdominal pain, diarrhea, and rectal bleeding

3. affect many people Market Analysis Ulcerative Colitis (UC) Crohn’s Disease (CD) • Prevalence and incidence peak in the 20-29 year age group • Prevalence highest in the US, and Northern Europe • Prevalence and incidence peak in two groups: • 15-30 and 55-80 year of age • Prevalence highest in the US and UK

4. who have some options Market Analysis No Treatment Topical 5-ASA 5-ASA/Sulfasalazine Antibiotics Oral Corticosteroids IV Corticosteroids 6-Mercaptopurine/Azathioprine Methotrexate Cyclosporine Infliximab Experimental Therapies… (20% UC received colectomy) Mild Severe

5. but not manyUnmet Needs Crohn’s Disease Ulcerative Colitis Maintenance drug Minimal side effects Different from anti-TNF-αtherapy

6. We can address this needIdeal Drug Profile • Longer acting • Convenient delivery mechanism • Minimal side effects • Humanized drug • Excellent value • Faster onset of action • Synergy with existing drugs • Attacks disease through a different pathway

7. and have two ways to do itGTX-001 and GTX-002 GTX-001 • Biologic • IV (6mg/kg) in vivo • Significantly reduces inflammation with 2mg/kg, every other day, after 4-6 weeks GTX-002 • Immunomodulator • Oral (50mg/kg) or IV (5mg/kg) • Liver/kidney toxicities • Bacterial infection • Synergistic if combined with 5-ASA/steroid TNF-α collagen MEKK3 VLA-1 IKKs Inhibits leukocyte migration and accumulation in gut mucosa Inhibits activation of pro-survival pathway and induces T-cell apoptosis

8. The processrequires Drug Trials Preclinical R&D ($50MM) Clinical R&D ($350MM) • Dosing • Efficacy • Toxicity • Pharmacokinetics • Synergies with existing drugs • Effects on refractory IBD cases • Long-term side effects

9. making a choice Drug Selection MARKET SIZE GTX-002 PROFIT Annual Figures UC disease Synergies 100% of market Price of $400 CD 147.36MM X DISEASE 159MM + 10% Sales UC X GTX-001 MARKET SIZE PROFIT Annual Figures CD and UC disease Refractory 50% of market Price of $21,000 CD 1.522B 1.21B DISEASE 159MM + 10% Sales UC

10. running with the numbers Calculations INCOME STATEMENT: Growth rate- 3% Discounting rate- 10% Price- $21,000 52.5 thousand people 13 year period EXPECTED VALUE IF SUCCESSFULADJUSTING FOR RISK Total Actual Value: 20.1B Total Actual Value: 1.4B Total Present Value: 10.5B Total Present Value: 738MM Costs: 710MM Costs: 710MM Project Value: 9.83B Project Value: 28MM 7% - success rate

11. and developing a plan Proposal

12. Acknowledgements

13. Additional Information References J.A. DiMasiet al. “The Price of Innovation: New Estimates of Drug Development Costs.” Journal of Health Economics 22 (2003): 151-185. Marianne Moody Jennings. Business Ethics: Case Studies and Selected Readings. Mason: South-Western Cengage Learning. 2009. P.M. Matthews. “The Long, Sometimes Bumpy Road of Drug Development.” The Dana Foundation. 2006. <http://www.dana.org/news/cerebrum/detail.aspx?id=5 486&p=2>. John Hopkins Medicine Gastroenterology & Hepatology <http://www.hopkins-gi.org/>

14. Current Treatment

15. Population Predictions • Assumptions: • Consider a 4% constant death rate. • using the market segment provided predict each medicine sector. • - For CD, prevalence and incidence increase linearly every year. • For UC, prevalence remain stable through out the whole period; • incidence and death rate balance out.