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Industry primer
Whats inside . . .
The basics
History, industry statistics, segmentation, technologies, key products, FDA approval process,
evaluation of clinical trials and reimbursement.
The valuation metrics
P/E, PEG, intrinsic value, discounted earnings, price to cash, and sales multiples.
The diseases
Markets, treatment and new drugs for six diseases with multibillion potential each: AIDS,
age-related macular degeneration, cancer, diabetes, hepatitis C, and rheumatoid arthritis.
Amritha Kasturirangan
More resources
Terms for diseases, selected medical conferences and list of useful websites.
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United States
Table of contents
1 Industry profile
27 Acquired Immune Deficiency Syndrome (AIDS)
43 Age-related macular degeneration
55 Cancer: blood cancers non-Hodgkins lymphoma, multiple myeloma and leukemia
59
Non-Hodgkins lymphoma
69
Multiple myeloma
81
Leukemia
Lung cancer
107
Colorectal cancer
115
Breast cancer
125 Diabetes
145 Hepatitis C
159 Rheumatoid arthritis
177 Regional research team
183 Disclosures
United States
Industry profile
United States
United States
Industry profile
The biotechnology industry uses biologic processes to make products, such as
drugs, diagnostic tests and vaccines. Other applications of biotechnology include
crop improvement, animal health, industrial processing and environmental
protection.
The industry is relatively young, with the founding of the first company in the United
States in 1971 (see Exhibit 1). Since then, the industry has grown rapidly. In 2004, there
were about 4,400 biotechnology companies worldwide, about 640 (15%) of which were
publicly traded. Among the 640 public biotechnology companies, 64% were in North
America, 15% in Europe and 20% in Asia (see Exhibits 2-3). Over 70% of the companies
are involved with human health (see Exhibit 4). These companies will be the focus of this
report.
Exhibit 1:
Year
Milestone
1953
Double helical structure of DNA published (James Watson & Francis Crick)
1971
1973
DNA cloning techniques perfected for producing recombinant DNA (Stanley Cohen & Herbert Boyer)
1975
1978
1980
1982
FDA approved first biotech human insulin discovered by Genentech and sold by Eli Lilly
1983
Amgen IPO
Polymerase chain reaction (PCR) technique conceived
1986
1988
First U.S. patent for a genetically altered animal, a transgenic mouse, awarded
1990
1992
1997
First animal cloned from an adult cell: a sheep named Dolly in Scotland.
2000
Exhibit 2:
United States
N. America
Europe
Asia
Pfizer
Revenues, $MM
54,612
44,831
7,729
2,052
50,816
20,887
16,483
4,151
253
7,638
(5,303)
(4,725)
(94)
14,751
Number of employees
183,820
144,770
25,640
13,410
115,000
641
412
98
131
3,775
1,504
1,717
554
(484)
1995
350
260
1,250
1,051
494
41
Revenue $B
50
13
Sales $B
37
9.3
203
46
1,035
400
191
108
Public companies
Private companies
Market capitalization $B
Source: Biotechnology Industry Organization, Ernst & Young biotechnology reports, Goldman Sachs
Research.
United States
Human health,
73%
Other, 11%
Agriculture/
Animal health,
9%
Industrial/
Environment,
6%
Market capitalization in $B
$600
$494
$500
$400
$353
$300
$311
$225
$200
$100
$331
$206
$138
$45 $41 $52
$83 $93
$0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
United States
$0.5-1.0B, 12%
$1 - 5B, 16%
In the last decade, the US biotechnology industry achieved over 15% CAGR each in
revenues and sales. In 2004, revenues were $46 billion and sales approximated $33
billion (see Exhibit 7). The top selling products are summarized in Exhibit 8, with the
sales on products for anemia reaching $7.5 billion.
Exhibit 7:
CAGR
1994-2004
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Sales $B
$7.7
$9.3
$10.8
$13.0
$14.5
$16.1
$19.3
$21.4
$24.3
$28.4
$33.3
15.8%
Revenues $B
11.2
12.7
14.6
17.4
20.2
22.3
26.7
29.6
29.6
39.2
46.0
15.2%
7.7
7.9
10.6
10.7
14.2
15.7
20.5
17.9
19.8
11.0%
Net loss $B
3.6
4.1
4.6
4.5
4.1
4.4
5.6
4.6
9.4
5.4
6.4
5.9%
265
260
294
317
316
300
339
342
318
314
330
2.2%
1,311
1,308
1,287
1,274
1,311
1,273
1,379
1,457
1,466
1,473
1,444
1.0%
103
108
118
141
155
162
174
191
195
198
188
6.2%
63%
61%
54%
52%
52%
48%
53%
53%
69%
46%
43%
75
86
92
92
94
99
111
112
125
143
178
R&D expense $B
No. of companies
No. of employees (thousands)
R&D as % of Revenues
Revenue per employee ($ thousands)
9.0%
United States
Product
Epogen/Procrit/Eprex
Neupogen/Neulasta
Aranesp
Enbrel
Remicade
Rituxan
NeoRecormon/Epogin
Avonex
Humira
Viread/Emtriva/Truvada
Pegasys/Copegus
Rebif
Avastin
Synagis
Betaferon
Ceredase/Cerezyme
Herceptin
Company
Amgen/JNJ
Amgen
Amgen
Amgen/Wyeth
JNJ
Genentech/Roche/Chugai *
Roche/Chugai
Biogen IDEC
Abbott
Gilead
Roche
Serono
Genentech/Roche/Chugai *
MedImmune
Schering AG
Genzyme
Genentech/Roche/Chugai *
WW Sales ($MM)
5,779
3,476
3,273
2,573
2,535
1,989
1,714
1,543
1,400
1,394
1,377
1,271
1,182
1,171
1,040
932
764
* Sold by Roche the EU, Genentech in the United States, and Chugai in Japan.
The sales of the industry have been driven by a growing pipeline. More than 200 products
have been approved for commercialization in the United States, up from 33 in 1994 (see
Exhibit 9). In 2005, the number of clinical trials exceeded 1,000, four times the number
in 1994 (see Exhibit 10). However, the risk of product development remains high, with
only about a 50-60% success rate in Phase 3 studies over the last several years, and 6070% positive FDA actions on applications for new products or indications.
United States
203
225
193
200
176
153
175
140
126
150
113
100
125
83
100
62
75
46
33
50
24
25
0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
1,006
1000
872
915
1,035
960
811
750
800
660
600
505
400
400
250
200
130
153
165
180
192
203
190
197
208
217
74
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Phase III or II/III (late stage)
generally large proteins. Because proteins are digested in the stomach, biotech drugs are
usually not effective when taken orally. They are given by injection, inhalation or other
United States
routes (see Exhibit 11). Therefore, most biotech drugs are used for late-stage patients.
Manufacturing of traditional pharmaceuticals involves relatively well defined chemical
steps. For manufacturing of biotechnology drugs, DNA, cells, enzymes, and sometimes
animals are involved. These manufacturing processes are more difficult to control than
chemical processes.
Exhibit 11: Differences between pharmaceuticals and biotech drugs
Pharmaceutical
Biotechnology
Manufacturing
Chemical processes
Size of molecules
Small
Large
Product composition
Chemical
Route of administration
Oral
With evolution of the industry, some biotechnology companies have developed expertise
in both chemical and biological drugs. Many pharmaceutical companies have also
increased their focus on biotech drugs. Therefore, there is often considerable overlap
between pharmaceutical and biotechnology companies with respect to their technologies
and product offerings.
United States
Valuation
Given the early commercial stage of most biotechnology companies, traditional
valuation metrics can be difficult to apply. The following are some metrics to
consider for valuation.
3.5
Nasdaq rally,
Genomics fervor
70
3.0
2.5
50
2.0
40
1.5
Relative PE*
60
30
Concern about
patent reform
1.0
20
Series of product
failures
Clinton healthcare
reform
10
Sept 11,
2001
0.5
PE
6/05
10/05
2/05
6/04
10/04
2/04
6/03
10/03
2/03
6/02
10/02
2/02
6/01
10/01
2/01
6/00
10/00
2/00
6/99
10/99
2/99
6/98
10/98
2/98
6/97
10/97
2/97
6/96
10/96
2/96
6/95
10/95
2/95
6/94
10/94
2/94
6/93
10/93
0.0
2/93
10
United States
2.5
2.0
1.5
1.0
0.5
PEG
6/05
10/05
2/05
6/04
10/04
2/04
6/03
10/03
2/03
6/02
10/02
2/02
6/01
10/01
2/01
6/00
10/00
2/00
6/99
10/99
2/99
6/98
10/98
2/98
6/97
10/97
2/97
6/96
10/96
2/96
6/95
10/95
2/95
6/94
10/94
2/94
6/93
10/93
2/93
0.0
Median PEG
Intrinsic value
For each company, we also calculate its intrinsic value, which we have defined as net
cash plus the estimated net present value of marketed products based on 10-year
projections. We believe the intrinsic value suggests a trough valuation for the stock. The
difference between the current share price and intrinsic value is the implied pipeline
value.
Discounted earnings
For small, unprofitable companies, which constitute most of the industry, we use the
following approach:
1. Project earnings from products in clinical trials;
2. Estimate three-year earnings growth rates for operating income and earnings after
product launch;
3. Calculate a price/earning multiple based on average growth rate (40% cap); and
4. Establish a future stock price after launch and discount back at 30%-40% to yield a
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United States
Price to cash
In the absence of reliable earnings projections, some investors also use the price to cash
ratio as a screen for valuation. We have observed that small companies with strong
fundamentals have historically not traded below 1.5X price/cash for extended time
periods.
Multiple of sales
There is a wide range of sales multiples in the industry (3X-10X). We sometimes use 5X
sales as a back of the envelope assessment of valuation.
Qualitative evaluations
For early stage companies, qualitative assessment of key factors can be helpful in
evaluating the company fundamentals. Some of the key factors we use are listed in
Exhibit 14.
Exhibit 14: Qualitative factors for assessment of biotechnology companies
1. Technologies
Quality
Broad applications
Validation by corporate partners
4. Management
Track record
Governance
Compensation
2. Market
5. Financials
Market potential
Cash position versus spending rate
Competition
Efficiency of spending
Ease of market entry by small company
Track record in raising capital
Retained rights
Other sources of support,
e.g. corporate partners
3. Development
Predictability of preclinical work
Complexity of clinical trials
Aggressive development strategies
Ease of manufacturing
Strength and depth of management
and scientific team
12
United States
Replacement proteins
The first biotechnology successes were replacement proteins to treat deficiencies. In
1978, Genentech developed recombinant human insulin by inserting the gene for
human insulin into bacteria, which then served as miniature factories for insulin
production. Other examples of protein replacement therapies include Genentechs human
growth hormone, Amgens Epogen for anemia, and Genzymes Cerezyme for Gauchers
disease (see Exhibit 15).
Exhibit 15: Selected replacement proteins for therapy
Product
Company
Human insulin
Genentech/Lilly
1982
Diabetes
Genentech/Lilly
1985/86
Short stature
Epogen
Amgen
1989
Anemia
Neupogen
Amgen
1990
Neutropenia
Adagen
Enzon
1990
Factor VIII
Genetics Institute*
1991
Hemophilia
*acquired by Wyeth
Therapeutic proteins
In contrast to earlier treatments that replaced missing or flawed proteins, therapeutic
doses of naturally-occurring proteins have also been used to treat diseases (see Exhibit
16). For example, in 1987, Genentech launched recombinant tissue plasminogen
activator (tPA), or Activase, to treat heart attacks and stroke. Activase is an enzyme that
dissolves clots in the artery, restoring blood flow in blocked vessels.
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United States
Protein
Company
Launch year
Indication
IntronA
Interferon alpha
Biogen IDEC/Schering-Plough
1986
Leukemia
Activase
tPA
Genentech
1987
Cardiovascular disease
Proleukin
Interleukin-2
Chiron
1992
Kidney cancer
Pulmozyme
DNase
Genentech
1993
Cystic fibrosis
Betaseron
Interferon beta
Chiron
1993
Multiple sclerosis
Avonex
Interferon beta
Biogen IDEC
1996
Multiple sclerosis
Gonal-F
Serono
1997
Infertility
Enbrel
Amgen*
1998
Rheumatoid arthritis
Monoclonal antibodies
Antibodies are special proteins of the immune system that counteract foreign substances
called antigens. They are produced by a type of white blood cell called B lymphocytes. In
the early 1970s, technologies were developed to grow clones of B lymphocytes, thus
creating many cells that produce large numbers of the same antibody. An antibody from a
single clone of cells is termed a monoclonal antibody (MAb).
Each antibody is a Y-shaped protein made up of two regions. The variable region
(short arms of the Y) recognizes antigens, while the constant region (the long arm)
affects the way the antibody summons other immune components to respond (see
Exhibit 17).
The first monoclonal antibodies were derived from mouse lymphocytes. One significant
disadvantage of mouse or other non-human antibodies is that the immune system of the
patient might recognize them as foreign elements. The patient can produce a human
antibody against the mouse antibody, potentially neutralizing the benefit or causing
severe reactions.
As a result of the sub-optimal side effect profile of mouse antibodies, there was a shift to
chimeric antibodies generated from two species. Typically, a portion of the variable
region is derived from mice or rats, while some of the variable region and the entire
constant region are produced with human antibody components.
Over the last 10 years, there has been a shift to humanized antibodies with 90-100%
human composition. All but one segment of the variable region of humanized antibodies
are human. Recently, Abgenix and Medarex have developed technology platforms to
create fully human antibodies. The technology involves transgenic mice in which the
genes for mouse antibodies are replaced by the genes of human antibodies.
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United States
Fully Human
Humanized
Chimeric
CDR1
CDR2
CDR3
Mouse
Human
Human
Mouse
Mouse
Human
Monoclonal antibodies can be used to supplement the natural immune response, block
receptors, bind proteins, or target specific cells for destruction. For example, Genentechs
Rituxan is a monoclonal antibody that targets CD20, a protein on the surface of
cancerous B cells, and marks them for destruction by the immune system. MedImmunes
Synagis is a monoclonal antibody for counteracting the respiratory syncytial virus that
can cause severe illness in premature infants. See Exhibit 18.
Exhibit 18: Selected monoclonal antibodies for therapy
Product
Company
Launch year
Indication
ReoPro
1995
Cardiovascular disease
Rituxan
Genentech
1997
Non-Hodgkin's lymphoma
Remicade
1998
Herceptin
Genentech
1998
Breast cancer
Synagis
MedImmune
1998
Humira
Abbott
2002
Rheumatoid arthritis
Avastin
Genentech
2004
Colorectal cancer
Erbitux
ImClone/Bristol-Myers Squibb
2004
Colorectal cancer
15
United States
Purpose
Preclinical Testing
2-3 years
CBER: Center for Biological Evaluation and Research, CDER: Center for Drug Evaluation and Research.
target is identified, drug candidates are tested for activity against that target. Thousands
of candidates may be tested before finding a lead candidate. Once a lead candidate is
selected, it may be chemically or biologically altered to increase the potency and reduce
side effects.
An optimized drug candidate is moved to preclinical testing in the laboratory and
animals. These experiments evaluate the pharmacology (how the drug behaves in the
16
United States
if the FDA does not disapprove it within 30 days. The IND must also be reviewed and
approved by the Institutional Review Board (IRB) of the clinic/hospital where the human
studies will be conducted. The IRB is a committee which evaluates the risks and benefits
of clinical trials and advocates for the safety of patients and adherence to ethical
standards. The IRB is local to each institution.
In Phase I trials, the safety of the drug candidate is assessed in a small number
of healthy human volunteers, usually between about 20 and 100 people. The
studies determine how a drug is distributed, metabolized and excreted, and the
duration of its action. The drugs efficacy is not usually tested at this stage. Phase I
trials last for approximately 6 to 12 months and may be combined with Phase II trials
to accelerate the development process.
preliminary efficacy. Phase II trials can take one to two years to complete and
include approximately 100-300 patients.
Phase III trials evaluate safety and efficacy in a large number of patients. They
usually involve 500 to over 5,000 patients in clinics and hospitals. The purpose is to
determine the safety and effectiveness of the drug when compared with a placebo
and/or another product. Phase III clinical trials take approximately two to three years
to complete and can cost $20 to $200 million.
Phase IV trials are undertaken after the drug has been launched in the market.
These studies may answer questions posed by the FDA, usually to evaluate long-term
effects. More commonly, they are used to position the product in the marketplace
and facilitate acceptance of the new drug among the medical community.
17
United States
Final approval for commercialization depends upon satisfactory review of the preclinical,
clinical, and manufacturing issues by the FDA. Most of the time, the FDA will ask an
Advisory Committee (AC) comprised of independent experts to review the clinical
results before making a decision on approval. However, the FDA does not have to follow
the recommendation of the AC.
Fast-track status allows companies to submit a rolling application for approval. The FDA
then expedites the review of these products with the target of completing review in six
months as opposed to 10 months for routine products.
The timeline for review by the FDA was set by the Prescription Drug User Fee Act
(PDUFA), enacted in 1992 and renewed in 1997 and 2002. Drug manufacturers often cite
the PDUFA date as the deadline for FDA review. The FDA usually tries to achieve a
decision by this date, although decisions may be delayed due to issues internal to the
FDA or problems with the application.
rare diseases. Drugs developed to treat diseases that affect fewer than 200,000 people are
eligible for orphan-drug status, which provides an additional seven years of patent
exclusivity for the product. Similar drugs are only allowed to enter the market if they
better efficacy or fewer side effects than the original orphan drug.
18
United States
evaluating the effectiveness and side effects of new therapies. Patients are randomly
assigned to receive the drug candidate or a control treatment. Randomization minimizes
differences between groups. In a double-blind study, neither the patients nor the
investigators know who is receiving the drug candidate versus the control.
control subjects can either receive a placebo (an inert substance that looks like the drug
candidate) or currently available treatment. Head-to-head comparisons against the
best currently available treatment are informative in guiding therapy because they
allow for direct comparisons of efficacy and side effects.
Patient selection
The inclusion/exclusion criteria outline the reasons why individuals may or may
not qualify for participation in the trial. Common criteria include age, prior treatment,
family history, stage of disease, and other medications. These criteria determine the
extent to which the trial results are generalizable to the population at large. In addition,
trials should be conducted at multiple centers due to the potential variations in patient
care and selection.
Endpoints
Endpoints are the results against which the drug candidate and the control are
compared. Ideal end points are those that can be measured easily, objectively, and
reproducibly. They should also be clinically relevant. Because the goals of therapy vary
by disease, endpoints are specific and vary for different diseases. Overall survival is
generally considered to be the most meaningful endpoint in life-threatening disorders.
However, large and long clinical studies may be required to study survival. In cases
where clinical benefit is hard to define or quantify, surrogate endpoints may be used. For
example, the amount of HIV in the blood is often used as a surrogate marker for disease
progression in AIDS.
Intent-to-treat analysis
Over the course of the trial, patients may switch between treatment groups or drop out of
the study altogether. In a per-protocol analysis, subjects are analyzed according to the
treatment they actually received, regardless of their initial assignment group. This type
of analysis disrupts randomization. People who switch groups or drop out of a study are
likely to do so for non-random reasons. Therefore, the subjects who remain in the original
treatment arms are also no longer random. In contrast, in an intent-to-treat analysis,
subjects are analyzed based on the group to which they were originally assigned,
19
United States
regardless of whether they ultimately remained in that group. Intent-to-treat analyses are
considered the most rigorous.
Statistical significance
Statistical significance is the probability that a difference between groups in the
trial occurred as a result of the intervention rather than by chance alone. Analyses of
clinical trials must account for chance or the variability of data around the true value.
When chance cannot be eliminated, statistical analysis, such as p value, can help
determine the robustness of the results. The p value is defined as the probability that the
observed results could have arisen by chance alone, and that this difference between
groups does not in fact reflect any true difference between therapies. The FDA requires
that criteria for defining statistical significance and the methodologies for analyzing the
results be specified before the clinical study begins. Statistical significance is generally
defined as p <0.05, meaning that there is less than a 5% chance that the observed results
are due to chance rather than due to the treatment.
Power
Power is the probability of detecting a difference between the drug candidate and
the control when a difference actually exists. Power depends on the sample size and
magnitude of the difference to be detected between treatment arms. Larger sample sizes
are required to detect small effects, such as rare side effects. The minimally accepted
power is generally 80%, meaning that the trial has enrolled enough people to be 80%
likely to detect a difference between the groups.
20
United States
Reimbursement
Partly due to the high development risk and complex manufacturing cost, most
biotechnology products are relatively expensive. Many biotech drugs cost $10,000
per year; some may cost over $100,000 annually. Because of the high costs, most
patients rely on private or government-sponsored insurance plans to help defray
drug costs. The following is a summary of Medicare, Medicaid, and private
insurance plans.
Medicare
Medicare is an insurance plan sponsored by the federal government and supported by
payroll and income taxes, and beneficiary premiums. The plan covers people over 65 or
who have become disabled earlier in life, such as dialysis patients. Medicare is the largest
payer of medical services and products in the country. It is administered by the Center for
Medicare and Medicaid Services (CMS). Different parts of Medicare cover different
services.
Part A
Part A covers services that are administered by hospitals and other inpatient and postacute care. Most patients do not pay any premium for Part A coverage because it is paid
out of payroll taxes.
Part B
Part B covers outpatient services, mainly those delivered in a physicians office or
outpatient clinic. Under Part B, patients pay 20% of all costs incurred, and the
government covers the other 80%. Patients generally pay a monthly premium for
coverage under Part B. Medicare usually reimburses at a lower rate than private insurers,
although Medicares reimbursement levels may be used as a benchmark by insurers.
Medications that are injected or infused in a physicians office, such as Remicade for
rheumatoid arthritis, are covered under Medicare Part B. However, medicines injected by
the patients themselves at home, such as Enbrel for rheumatoid arthritis, were not
covered prior to 2006. With the Medicare drug benefit implemented January 2006, self
injected medicines are covered.
Under Part B, the physician purchases the medication from a drug distributor, and then
administers it to the patient. The office bills Medicare for the drug at 106% average sales
price (ASP), as well as a separate fee for the administration of the drug. If Medicare pays
more for the drug than the physician paid to acquire it, the physician keeps the difference
as profit. Reimbursement under this mechanism gives some physicians the incentive to
administer drugs in the office, and possibly one drug more than another. High volume
users may profit by purchasing the drug at a lower price from the manufacturer than
reimbursed by the insurance plan (Exhibit 20).
Medicare sets the ASP quarterly based on data submitted by the manufacturers. It is the
weighted average of all non-federal sales of a drug, net of all rebates and discounts. Use
of the ASP model creates some issues for physicians and drug manufacturers: 1)
21
United States
Dr. Smith, a solo practitioner, purchases AnyAb for $1,200 from a distributor. Based
on data submitted to CMS by LS Biotech, the ASP for AnyAb is determined to be
$1,100. (Dr. Smith was paying a higher price than many larger group practices.)
Beginning in 2005, CMS reimburses AnyAb at 106% of ASP, or $1,166. Therefore,
Dr. Smith loses $34 per vial administered.
Across the street, a major oncology group has negotiated discounts based on high
volume. The group pays only $1,000 per vial of AnyAb, and generates a profit of
$166.
Source: Goldman Sachs Research.
22
United States
Total Expenses
$0 - $250
Payment
Patient
Medicare
100%
0%
$250 - $2,250
25%
$2,250 - $5,100
100%
0%
5%
95%
>$5,100
75%
Medicaid
Medicaid is a state-administered program for low-income individuals and families. The
federal government sets broad guidelines regarding eligibility, benefits and
administration, and reimburses states for roughly 57% of the programs spending. If a
patient qualifies for Medicaid, the government will reimburse physicians and hospitals
directly for care. The patient pays little or no out of pocket expense. Medicaid generally
accounts for <20% of revenue for biotech companies, partly due to the low
reimbursement levels and the absolute number of patients enrolled.
Medicaid reimbursement policies for drugs vary by state. For products purchased in a
pharmacy, reimbursement is typically set at a percentage of wholesale acquisition cost
23
United States
(WAC) or average wholesale price (AWP). Physician administered products often fall
under service payment schedules, which are usually based on Medicare payment rates.
Medicaid laws require that manufacturers pay a rebate of the greater of 15.1% or the
difference between the best price available in the private market and the Average
Manufacturer Price (AMP).
Private insurers
Patients may have one of two primary forms of insurance: an HMO or preferred provider
organization (PPO). The HMO plans are generally more restrictive and cost less then
PPO plans.
With respect to drug reimbursement, insurance plans generally divide their coverage into
tiers. Patients pay a lower co-payment for lower tiered drugs, and vice-versa. In this way,
patients may shift to less expensive drugs for the same disease. Copayments can be as
low as $2 to $5 for generic drugs and be over $1,000 per month for some biotech drugs.
Insurance plans may also restrict access to higher-priced biotechnology products by
requiring prior authorization. Before prescribing the drug for a patient, the physician must
first discuss the case with the insurance carrier. The patient must meet certain
requirements to be authorized. The additional work to the physician is unreimbursed, and
so may act as a deterrent to prescribing.
24
United States
Conference*
Location
Feb 5-9
Denver, CO
Feb 16-18
Kissimmee, FL
Mar 3-7
Miami Beach, FL
Mar 3-7
San Francisco, CA
Mar 11-14
Atlanta, GA
Mar 17-26
Chicago, IL
Apr 1-5
Washington, DC
Apr 1-8
San Diego, CA
Apr 5-8
Paris, France
Apr 19-23
Chicago, IL
Apr 26-30
Vienna, Austria
Apr 29-May 2
San Francisco, CA
Apr 30-May 4
Fort Lauderdale, FL
May 10-13
Glasgow, UK
May 16-20
New York, NY
Mar 20-23
Washington, DC
May 20-25
Atlanta, GA
May 20-25
Los Angeles, CA
May 27-31
Lausanne, Switzerland
Jun 2-6
Atlanta, GA
Jun 9-13
Washington, DC
Jun 12-15
Madrid, Spain
Jun 15-18
Amsterdam, Netherlands
Jun 21-24
Amsterdam, Netherlands
Jul 22-27
Boston, MA
Aug 13-18
Toronto, Canada
Sep 1-6
Glasgow, UK
Sep 2-6
Barcelona, Spain
Sep 2-6
Munich, Germany
Sept 15-19
Philadelphia, PA
Sep 27-30
San Francisco, CA
Sep 27-30
Madrid, Spain
Sep 29-Oct 3
Istanbul, Turkey
Oct 8-11
Chicago, IL
Oct 12-15
Toronto, Canada
Oct 21-25
New Orleans, LA
Oct 21-26
Oct 27-31
Boston, MA
Nov 10-15
Washington, DC
Nov 11-14
American Academy of Ophthalmology (AAO)/Asia Pacific Academy of Ophthalmology (APA Las Vegas, NV
Nov 12-15
Chicago, IL
Nov 14-19
San Diego, CA
Dec 9-12
Orlando, FL
25
United States
Description
www.cancer.gov
www.cdc.gov
www.fda.gov
www.guideline.gov
www.nih.gov
www.pubmed.gov
www.biology-online.org/dictionary.asp
Biology dictionary
www.medicalconferences.com
26
United States
27
28
United States
United States
Therapy
Patients are typically treated with a multi-drug regimen. Because the HIV virus replicates
and mutates rapidly, the development of viral resistance must be managed. The goal is to
keep viral levels as low as possible to impede the infection and lower the likelihood of
resistance. This is accomplished by using drugs from different classes.
New Agents
A number of new therapies are currently under development, including new agents in
existing classes and agents that work by very different mechanisms. Newer agents tend to
be tested and used in patients who have failed other treatment regimens. Advanced agents
include:
Gileads new single pill combining Truvada (2 NRTIs) with Bristol-Myers Squibbs
Sustiva (NNRTI). This would enable a once-daily, fixed-dose regimen in a single
pill. The companies intend to file an NDA in 2Q2006.
Both Gilead and Merck have integrase inhibitors slated for Phase 2 studies.
29
United States
Events to watch
30
Gilead: Truvada rollout in Europe, Truvada and Viread label expansion and potential
share gains, Phase 2 studies with integrase inhibitor GS9137.
Pfizer is targeting an NDA submission for Maraviroc, their novel CCR5 or entry
inhibitor currently in Phase 3 trials, in treatment-experienced patients in 2006.
Conferences:
United States
U.S.
Prevalence of HIV in the U.S.
Number of patients on antiretroviral therapy
1,200
> 400
$1,347
1,014
1,006
696
680
$4,742
$2,644
1,669
648
116
$5,078
31
United States
NNRTIs
NRTIs
PIs
Fusion inhibitor
Total
2003
1,258
4,591
1,572
8
7,429
2005
1,258
4,050
2,202
46
7,556
NNRTIs
NRTIs
PIs
Fusion inhibitor
Total
2003
384
1,434
522
2
2,342
2005
371
1,241
721
14
2,347
NNRTIs
NRTIs
PIs
Fusion inhibitor
Total
2003
0.57
2.34
1.04
0.03
3.98
Sales $BN
2004
0.62
2.54
1.48
0.08
4.72
2005
0.65
2.64
1.67
0.12
5.08
NNRTIs
NRTIs
PIs
Fusion inhibitor
14%
59%
26%
1%
2005
13%
52%
33%
2%
6.00
70%
5.00
60%
50%
4.00
2003
2004
2005
3.00
2.00
% Market Share
Sales in $ billions
40%
30%
20%
1.00
10%
0.00
NNRTIs
NRTIs
PIs
Fusion inhibitor
Total
0%
2003
NNRTIs
2004
NRTIs
2005
PIs
Fusion inhibitor
32
United States
drug market by sales (see Exhibits 28-30). Overall, NRTI sales grew by 8% in 2004 and
by 4% in 2005. Tenofovir is the most commonly prescribed NRTI, when prescriptions
for both Viread (Tenofovir) and Truvada (Tenofovir/emtriva) combination are
considered. Combivir (GlaxoSmithKline) is the second most frequently prescribed
agent.
Exhibit 28: NRTI prescriptions and sales
Total Prescriptions (000s)
2003
2004
857
23
930
0
12
109
378
0
446
784
662
390
4,591
COMBIVIR
EMTRIVA
EPIVIR
EPZICOM
HIVID
RETROVIR
TRIZIVIR
TRUVADA
VIDEX
VIREAD
ZERIT
ZIAGEN
Total NRTIs
858
145
852
27
7
103
337
66
435
965
479
335
4,609
Sales ($ in millions)
% change from
04 - '05
2005
778
71
581
195
5
90
289
566
158
745
334
239
4,050
2003
-9%
-51%
-32%
622%
-35%
-12%
-14%
754%
-64%
-23%
-30%
-28%
-12%
2004
610
9
307
0
3
38
426
0
132
395
244
175
2,339
2005
643
51
303
26
2
37
412
63
131
518
186
165
2,537
% change from
04 - '05
612
25
208
173
1
34
373
506
48
407
134
122
2,644
-5%
-50%
-32%
568%
-33%
-10%
-9%
706%
-63%
-21%
-28%
-26%
4%
40%
700
35%
600
30%
500
400
300
200
25%
20%
15%
10%
100
5%
0%
COMBIVIR
EPIVIR
EPZICOM
2003
TRIZIVIR
2004
TRUVADA
VIREAD
2003
COMBIVIR
2005
EPIVIR
2004
EPZICOM
2005
TRIZIVIR
TRUVADA
VIREAD
33
United States
Total NNRTIs
2004
19
795
444
1,258
16
834
403
1,252
2005
12
882
363
1,258
% change from
04 - '05
-21%
6%
-10%
0%
Sales ($ in millions)
2003
6
388
175
569
2004
2005
5
437
177
618
4
477
167
648
% change from
04 - '05
-20%
9%
-6%
5%
Total PIs
80
0
184
59
572
3
222
82
371
1,572
2004
32
0
127
54
581
102
399
351
284
1,930
2005
6
9
90
62
568
174
557
493
243
2,202
% change from
04 - '05
-82%
NM
-29%
15%
-2%
69%
40%
40%
-14%
14%
Sales ($ in millions)
2003
40
0
94
37
425
5
69
84
290
1,044
2004
16
0
69
36
439
86
264
337
233
1,479
2005
2
13
49
46
453
148
278
481
201
1,669
% change from
04 - '05
-89%
NM
-29%
28%
3%
71%
5%
43%
-14%
13%
34
United States
45%
600
40%
500
35%
400
300
200
30%
25%
20%
15%
10%
100
5%
0%
APTIVUS
KALETRA
LEXIVA
2003
NORVIR
2004
REYATAZ
VIRACEPT
2005
2003
APTIVUS
KALETRA
2004
LEXIVA
NORVIR
2005
REYATAZ
VIRACEPT
35
United States
Treatment
Currently there are twenty-five FDA approved drugs which fall into four broad
mechanism-related categories. Of these, NRTIs form the backbone of therapy, with
preferred regimens consisting of NRTIs combined with either NNRTIs or with PIs.
Fuzeon, a fusion inhibitor, is an option for salvage therapy. New agents, either in
existing or in new classes, are currently under development.
Disease overview
AIDS was first observed in 1981 and the virus responsible for the disease, HIV, was
identified in 1984 (see Exhibit 35). There are two types of HIV virus, HIV-1 and HIV-2.
The HIV-1 virus is the most common cause of AIDS globally. The virus is transmitted in
three primary ways: sexual contact, blood exposure (including injected drugs and
transfusions) and transmission from infected mothers to their infants.
The HIV virus predominantly infects certain types of infection fighting cells, primarily Tcells, which have a specific type of receptor on their surface, called the CD4 receptor.
The T-cells and other infected cells play a critical role in mounting an immune defense
against the infection, mainly by stimulating the immune system to directly kill the virus
via T-cells and by triggering antibodies to form.
AIDS is typically manifest in several stages. The first stage is characterized as the acute
viremia stage, which typically lasts several weeks. At this stage, the immune system is
intact and aggressively attacks the virus. The virus is effectively sequestered to the
lymphatic system, where it insidiously destroys the immune system. This latency period
following the initial acute infection is long, often exceeding ten years. While the disease
is often asymptomatic at this stage, the patients immune system becomes steadily and
substantially depleted as the virus replicates in the lymphatic system and wipes out
immune cells.
Exhibit 35: AIDS key terms
Term
Genetics
RNA
DNA
Retrovirus
Explanation
Mutation
Resistance
Nucleotides
Process by which the virus fuses with the host cell in order to insert its genetic material into the cell
A viral enzyme that transcribes HIV RNA into DNA, which can then be integrated into the host cell's DNA
A viral enzyme that integrates the newly transcribed proviral DNA into the DNA of the infected (human) cell
An enzyme that breaks down proteins; necessary for viral replication
A type of protease enzyme; necessary for normal cell death
Therapy
Viral load
Reduction in viral load
36
United States
Standard treatment
In the United States, roughly 400,000 patients are on anti-retroviral therapy. As
discussed, this therapy typically involves three classes of retroviral drugs (see Exhibits
36-38): (1) nucleoside/nucleotide reverse transcriptase inhibitors (NRTIs); (2) nonnucleoside reverse transcriptase inhibitors (NNRTIs); and (3) protease inhibitors (PIs).
Several generations of product have been developed in each of these three classes (see
Exhibit 15). The 2003 introduction of Roche/Trimeriss Fuzeon marked the launch of the
first viral entry inhibitor.
Exhibit 36: Mechanisms of AIDS therapies
Nucleoside/Nucleotide reverse transcriptase inhibitors (NRTIs)
Block the enzyme reverse transcriptase
Incorporate into viral DNA to block replication
Non-Nucleoside reverse transcriptase inhibitors (NNRTIs)
Block the enzyme reverse transcriptase
Bind to the reverse transcriptase enzyme directly and block viral RNA from becoming DNA
Protease inhibitor (PIs)
Block the enzyme protease, which is necessary for the production and release of viral particles
Viral entry inhibitors
Block the virus from entering the cell
ENTRY
INHIBITORS
WORK HERE
INTEGRASE INHIBITORS
WORK HERE
37
United States
Generic name
Abbreviation
Brand name
Year
launched
WW 2004
sales ($MM)
WW 2005E
sales ($MM)
1 tab bid or 2
caps tid
76
N/A
274
174
Company
Daily dosing
GlaxoSmithKline
Didanosine
ddI
Videx, Videx EC
Bristol-Myers Squibb
Stavudine
d4T
Zerit
Bristol-Myers Squibb
1994
1 cap bid
272
216
Lamivudine
3TC
Epivir
GlaxoSmithKline/Shire
1995
1 or 2 tabs qd
522
471
Combivir
GlaxoSmithKline
1997
1 tab bid
1,012
1,034
275
N/A
572
783
58
N/A
535
779
48
N/A
Lamivudine/ Zidovudine
1987
Abacavir
ABC
Ziagen
GlaxoSmithKline
1999
TRZ
TDF, TDV
FTC
Trizivir
Viread
Emtriva
Epzicom
GlaxoSmithKline
Gilead
Gilead
GlaxoSmithKline
2000
2001
2003
2004
1 tab bid or 2
tabs qd
1 tab bid
1 tab qd
1 tab qd
1 tab qd
Truvada
Gilead
2004
1 tab qd
68
568
Boehringer Ingelheim
Pfizer
1996
1997
1 tab bid
4 or 2 tabs tid
341
N/A
N/A
N/A
Efavirenz
EFV
Sustiva
Bristol-Myers Squibb
1998
1 tab qd
621
680
SQV
5 caps bid or 2
caps bid
N/A
N/A
Indinavir
Nelfinavir
IDV
NFV
Crixivan
Viracept
Merck
Pfizer (US) / Roche (EU)
255
206
328
N/A
Ritonavir
RTV
Norvir
Abbott
2 caps tid
5 tabs tid or 3
caps tid; 2 caps
bid
1996
2-4 caps bid
194
211
Ritonavir/ lopinavir
RTV / LPV
Kaletra
Abbott
2000
3 caps bid or 6
caps qd; 2 tabs
bid or 4 tabs qd
897
1,007
Atazanavir
ATV
Reyataz
Bristol-Myers Squibb
2003
2 caps qd
414
696
Fosamprenavir
908
Lexiva
GlaxoSmithKline
2003
2 tabs qd/bid
112
716
Tipranavir
TPV
Aptivus
Boehringer Ingelheim
2005
2 caps bid
N/A
N/A
Fusion inhibitor
Enfuvirtide
T-20
Fuzeon
Trimeris / Roche
2003
1 injection bid
135
199
Emtricitabine/ Tenofovir
1995 / 1997
1996
1997
(qd = 1X day, bid = 2X day, tid = 3X day, tab = tablet, cap = capsule; daily dosing depends on pill strength).
Treatment
The US Department of Health and Human Services (DHSS) routinely issues guidelines
for treating HIV-1 infected patients. Eradication of HIV cannot be achieved with
available antiretroviral therapies. As reflected in the DHHS guidelines, the goals of
retroviral therapy are: maximal and durable suppression of viral load, restoration and/or
preservation of immunologic function, improved quality of life, and improved morbidity
and mortality.
38
United States
Due to a high mutation rate of the HIV virus and the resulting emergence of resistance,
several classes of drugs are typically used simultaneously. For treatment-inexperienced
patients there are three different types of combination regimens (See Exhibit 39): (1)
NNRTI-based (1 NNRTI +2 NRTIs); (2) PI-based (1-2 PIs + 2 NRTIs); and (3) tripleNRTI regimens (the latter being recommended only when the first two regimens cannot
be used). Genotypic testing for the presence of mutations that confer resistance to drugs
is necessary (even in treatment-nave patients), to enable optimized treatment. Over time,
many patients experience virologic failure, which necessitates drug regimen switching.
Analysis of compliance and resistance, among other factors, is necessary to determine
optimum next regimens. The goal is to select two new agents likely to be active against
the virus, although this is not always an option because of cross resistance within drug
classes. Newer agents have the best response when used with other new agents,
preferably in different classes. For example, the newest protease inhibitor, tipranavir, has
had the best response when used with Fuzeon, a fusion inhibitor from Roche and
Trimeris.
Exhibit 39: Treatment regimen for treatment-inexperienced patients
NNRTI-based
PI-based
Triple NRTI
NNRTI
1
0
0
PI
0
1-2
0
NRTI
2
2
3
When to start therapy, which drugs to use, and when to switch therapies has been an
evolving paradigm. Clinicians and patients have had to balance potency, side effects, pill
burden, and resistance. Data from the first protease inhibitors, which became
commercially available in 1996, suggested that treating early and aggressively was the
preferred route. However, a growing resistance problem and prolonged serious side
effects resulted for a while in treatment options evolving towards class-sparing regimens,
which delay the use of one class so that there is still a viable therapeutic option if the
patient fails initial treatment. The newer protease inhibitors have better enabled
aggressive treatment sooner. Structured treatment interruptions are sometimes used to
manage toxicity.
39
United States
a high incidence of injection site reactions. Needle-less delivery may help to address the
injection site reaction problem to a certain extent.
40
United States
Lead Company
Partner
Phase
Existing classes
Nucleotide reverse transcriptase inhibitors
AVX754 (formerly known as SPD-754)
MIV-210
Amdoxovir (DAPD)
Elvucitabine (ACH-126)
Racivir
Reverset (Dexelvucitabine, D-D4FC)
KP-1461
Avexa
Medivir
RFS Pharma
Achillion (private)
Pharmasset (private)
Pharmasset (private)
Koronis
Shire
GlaxoSmithKline
IIB
IIA
II
II
II
II
IB
Incyte
Chiron
III
IIB
I
I
I
I
GlaxoSmithKline
IIB / III
IIB
Protease inhibitors
Darunavir (TMC-114)
Brecanavir (GSK-640385)
New classes
Entry Inhibitors
UK-427 (Maraviroc)
TNX-355
SP01A
Vicriviroc
AMD-070
BMS-488043
PRO 140
Pfizer
Tanox
Samaritan Pharma
Schering-Plough
AnorMED
Bristol-Myers Squibb
Progenics
Maturation inhibitors
PA-457
Panacos
Integrase inhibitors
MK-0518
GS-9137
GS-9160
Merck
Gilead
Gilead
Japan Tobacco
II
I
PC
Fusion inhibitors
TR-291144
TR-290999
Trimeris
Trimeris
Roche
Roche
PC
PC
Biogen IDEC
III
IIB
IIB
II
IB / IIA
I/II
IB
II
AIDS virus into the host cell. Inhibitors of integrase represent a potential new therapeutic
class. Two companies with the most advanced candidates in this area are Gilead and
41
United States
Merck, both positioned for Phase 2 studies with lead candidates. Early clinical data
suggest strong potency, but there has been little safety or resistance data.
Maturation inhibitors
Panacos is conducting early clinical studies with maturation inhibitor PA-457, which
blocks viral replication by precluding viral particles released from HIV-infected cells
from becoming infectious.
42
United States
43
44
United States
United States
Market opportunity
In the United States, there are about 1.8 million new cases per year of AMD. With the
rapidly aging population, the US number of people with AMD per year is expected to rise
to nearly 3 million by 2020.
Of the 1.8 million total cases, there are about 200,000 US cases of wet AMD per
year.
The two marketed biotech products for wet AMD, Visudyne (QLT/Novartis) and
Macugen (OSI Pharmaceuticals), achieved 2005 US sales of about $370 million.
With the expected launch of Genentechs Lucentis in 2006, we believe the sales
potential of drugs for wet AMD exceeds $1 billion in the United States and $2 billion
worldwide.
In 1990s, treatment was limited to photocoagulation (laser therapy) to seal the blood
vessels. However, mixed long-term efficacy, safety issues and the advent of newer
therapies has limited its use.
Therapy
New agents
Treatments on the horizon include biologics such as Lucentis and other VEGF
blockers to inhibit the growth of new blood vessels as well as drug-delivery devices
implanted at the back of the eye.
Lucentis (Genentech) is the only drug in late stage trials which has shown a
significant improvement in vision. Macugen and Visudyne only slow the decline in
vision.
Events to watch
45
United States
biotechnology given the unmet need, increasing disease prevalence and low penetration
of current treatments. For example, the two marketed biotech products for wet AMD,
Visudyne (QLT/Novartis) and Macugen (OSI Pharmaceuticals), achieved 2005 sales of
about $370 million in the United States. With the expected launch of Genentechs
Lucentis in 2006 and an increasingly visible pipeline of new products, we believe the
sales potential of drugs for wet AMD exceeds $1 billion in the United States and $2
billion worldwide.
In the United States, there are about 1.8 million new cases per year of AMD, which is the
leading cause of blindness in people over 50 (see Exhibit 41). The National Eye Institute
estimates that with the rapidly aging population, the US number of people with AMD per
year is expected to rise by 50% to nearly 3 million by 2020.
Exhibit 41: AMD at a glance in the United States
1.8MM
3MM
10-15 : 85-90
200,000
80%
10%
39%
Current biologics
2005 U.S. sales of Visudyne and Macugen
$367MM
(1)
$5,080
(2)
$8,955
138,000 (3)
Patient characteristics
Average age of patient
Above 50
Men:Women
Ethnicity
About equal
More common in Caucasians
Source: Company data, National Eye Institute and Goldman Sachs Research.
46
United States
AMD affects mainly Caucasians and the elderly. More than 15% of Caucasian women
older than 80 years have neovascular AMD. See Exhibit 42.
Exhibit 42: Age and Caucasians increase risk for age-related macular degeneration
14%
12%
10%
8%
6%
4%
2%
White
Black
85
+
80
-8
4
75
-7
9
70
-7
4
65
-6
9
60
-6
4
55
-5
9
M
al
e
50
-5
4
85
+
80
-8
4
75
-7
9
70
-7
4
65
-6
9
60
-6
4
55
-5
9
Fe
m
al
e
50
-5
4
0%
Hispanic
Term
Definition
Retina
Seven layers of alternating cells at the back of the eye which convert a light
signal into a neural signal
Macula
Fovea
Central most part of the macula that produces the sharpest vision
Choroidal neovascularization
(CNV)
VEGF stimulates growth of endothelial cells which form the walls of blood
vessels, thus increasing the transport nutrients and oxygen to tissue
Visual acuity
47
United States
The disease is diagnosed by imaging of the eye after intravenous injections of dyes, such
as fluorescein or indocyanine green. These imaging techniques allow the retinal specialist
to assess the location and pattern of new blood vessel growth. It can also assist in guiding
laser photocoagulation if recommended. Optical coherence tomography (OCT) is a
new imaging procedure for assessing the thickness of the retina in order to determine
treatment strategies.
when waste products block transport of nutrients to the retina, leading to inflammation
and growth of new blood vessels beneath the retina (choroidal neo-vascularization or
CNV). These blood vessels can break, leak or bleed, causing swelling of the retina,
scarring of the macula and deterioration of vision. Wet AMD can progress rapidly,
leading to blindness in 80-90% of the affected individuals.
There are about 200,000 new cases of wet AMD each year. Over 80% of the cases are
considered subfoveal (involving blood vessel growth under the fovea). About 30% of the
patients will be affected in both eyes.
Subfoveal CNV represents about 80-85% of all wet AMD cases and leads to severe
vision loss because it affects the area under the fovea. Subfoveal CNV can be
classified as either classic or occult based on the pattern of leakage seen by
fluorescein angiography. Classic CNV progresses more rapidly than occult CNV, but
is easier to diagnose because the blood vessels are well defined. The leakage in
occult CNV is less obvious. Many patients will have both forms of CNV. About 50%
of occult CNV will develop into classic CNV within a year.
48
United States
Extrafoveal/
Juxtafoveal (15-20%)
Photocoagulation
recommended
Subfoveal
(80-85%)
Predominantly
Classic (25%)
Visudyne
Visudyne/Kenalog
Macugen
(1)
Lucentis
Minimally
Classic (35%)
Lesions
(2)
4 discs
Visudyne
Visudyne/Kenalog
Macugen
(1)
Lucentis
Occult
Form (40%)
Macugen
(1)
Lucentis
Lesions
(2)
> 4 discs
Macugen
(1)
Lucentis
Photocoagulation
Photocoagulation involves using a high energy light beam to seal the leaking blood
vessels. Photocoagulation is used when the affected area is small, and does not involve
the center of the macula (about 15-20% of cases). However, photocoagulation is not
selective. Therefore, normal retinal tissue may be damaged, potentially leading to some
initial loss of vision. While short-term results showed 50% reduction in risk of severe
vision loss, five-year data were less impressive, mainly due to re-growth of blood vessels.
49
United States
with a non-thermal red light, leading to local damage and sealing of the blood vessels.
Repeat treatment as frequently as every three months may be necessary. Visudyne is
commonly used in combination with corticosteroids such as a Kenalog (triamcinolone),
which is not indicated for AMD. In Phase 3 trials of predominantly classic AMD, 67% of
Visudyne versus 40% of the placebo patients lost less than three lines of visual acuity.
Side effects for Visudyne were related to photosensitivity reactions, injection site
reactions and visual disturbances.
50
United States
Mechanism of action:
Delivery:
Treatment frequency:
Visudyne
QLT
Novartis
Launched 12/99
Macugen
Eyetech
Pfizer
Launched 1/05
Lucentis
Genentech
Novartis (ex-U.S.)
FDA decision 6/06
Predominantly Classic
Intravitreal injection
Intravitreal injection
Every 3 months
Every 6 weeks
Every 4 weeks
Efficacy at 1 year:
67% of patients lost less than 15 70% of patients treated with 0.3mg For minimally classic/occult: 95%
letters vs. 40% in placebo
lost less than 15 letters vs. 55% in of patients had stable or improved
vision vs. 62% for sham injection.
sham injection
For predominantly classic: 9496% has stable or improved vision
vs. 64% for sham injection
46% of patients lost less than 15 Study 1: 57% of patients lost less
letters (3 lines) vs. 33% in
than 15 letters vs 56% for sham
placebo at 2 years
injection at 2 years
Study 2: 61% of Macugen patients
lost less than 15 letters vs 34% for
sham at 2 years
Safety:
List Price
Doses per year
Cost per year
N/A
13
$5,180
$8,995
N/A
from the dogfish shark. It seems to have multiple mechanisms of action, including
inhibition of several angiogenic growth factors such as VEGF, integrin expression, and
reversal of the cytoskeletal formation. Evizon is injected intravenously. In June 2005,
Genaera initiated one of two Phase 3 trials (Study 301) of intravenous Evizon in patients
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United States
with all AMD subtypes, comparing Evizon versus control for two years. Patients will
receive Evizon weekly for four weeks followed by maintenance doses every four weeks
until week 48, and further follow up of 12 months. The primary endpoint is visual acuity
at one year. We expect one-year data in late 2007/early 2008. The second Phase 3 trial
(Study 302) with identical design to study 301 should start in 2H2006. Genaera could
potentially increase the dose of Evizon in study 302 based on an additional dose ranging
efficacy study (Study 212) with data expected by 2H2006. Genaera may seek a corporate
partnership for Evizon.
Retaane (Phase 3, Alcon): Retaane, an anecortave acetate (a steroid derivative), can
reduce the production of matrix metalloprotease (MMP), an enzyme that can help
infiltration of new blood vessels. Retaane is delivered to the outer surface of the eye
every six months via a curved, blunt-tipped tube that does not pierce the eyeball. In
October 2004, Alcon announced that a Phase 3 study comparing Retaane to Visudyne did
not meet the primary endpoint of non-inferiority versus PDT at one year. In May 2005,
Alcon received an approvable letter from the FDA on Retaane for wet AMD. In October
2005, Alcon announced that Retaane was safe and demonstrated clinical equivalence to
Visudyne at 24 months. The company is in discussions with the FDA concerning next
steps. Alcon has also initiated a study of Retaane in combination with Avastin.
Photrex (Phase 3; Miravant Medical Technologies): Photrex, in Phase 3 trials for
classic and occult AMD, involves an intravenous infusion followed by light therapy to
seal blood vessels related to wet AMD. In September 2004, the FDA issued an
approvable letter on Photrex asking for another Phase 3 trial which Miravant started in
mid-2005. Visudyne involves the use of a non-thermal red light which has a longer
wavelength (689 nanometers) as compared to the light for Photrex (664 nanometers).
Longer wavelength might lead to deeper penetration of retinal tissues. Additionally,
Visudyne therapy seems to have a shorter period of photosensitivity (sensitivity to bright
light) of 5 days compared to 30 days for Photrex.
Avastin (off-label use, Genentech): There is increasing use of Avastin, a humanized
MAb against VEGF approved for colorectal cancer, for AMD. Avastin has been used
intravenously or intravitreally in small, physician-sponsored trials with good results.
Owing to the low dose for intravitreal injection, the cost of Avastin may be less than $15
per injection. Therefore, physicians are generally not billing for Avastin. However, they
can obtain a reimbursement of about $250 for each injection. We expect off-label use of
Avastin to decrease after the launch of Lucentis due to the lack of long-term safety and
efficacy from randomized studies, potential liability for physicians, and the availability of
an approved, potent therapy (Lucentis).
See Exhibit 46 for a summary of other VEGF inhibitors currently under study.
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United States
Exhibit 46: Selected other VEGF inhibitors in clinical studies for AMD
Drugs
Company
Combretastatin
A4 Prodrug (CA4P)
Oxigene
Mechanism
of Action
Phase
Delivery
Indications
Intravenous infusion
Myopic
macular
degeneration
1/2
Intravenous infusion
AMD
PC
AMD
Intra-ocular injection
AMD
Retro-ocular injection
AMD
Cand5
Acuity
AG-013958
Pfizer
1/2
Sirna-027
Sirna Therapeutics
AMD
AdPEDF
Genvec
AMD
VEGF-trap
Regeneron
Intra-ocular injection
AMD
JSM-6427
Jerini AG
Systemic infusion
AMD
PC
PC = preclinical
53
54
United States
United States
55
56
United States
United States
Therapy
Aggressive blood cancers may be treated with chemotherapy followed by stem cell
transplant, while a watch and wait approach may be used for slow-growing cancers.
The use of monoclonal antibodies and targeted small molecules, employed alone or in
combination with chemotherapy, has increased significantly in recent years.
Sales of therapies for leukemia and lymphoma are dominated by Rituxan
(DNA/BIIB/Roche) and Gleevec (NOV). Rituxan, a monoclonal antibody to CD20, a
cell surface receptor specific to B-lymphocytes, is used in treating NHL and chronic
lymphocytic leukemia (CLL). Gleevec is an oral drug targeting an enzyme unique to
certain types of leukemia. The myeloma market is currently split between two targeted
therapies, with a third entrant expected in 2006.
New agents
Velcade may be submitted for FDA approval for a subtype of NHL in 2006.
Events to watch
FDA action on dasatinib (Bristol-Myers Squibb) for chronic and acute myeloid
leukemia in 2006.
57
58
United States
United States
Non-Hodgkin's lymphoma
59
60
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United States
Non-Hodgkin's lymphoma
Market and opportunity
We estimate that sales of biologics to treat non-Hodgkins lymphoma (NHL) exceeded $3
billion in 2005 (see Exhibit 47). Three biologics are approved for use in NHL, with 99%
market share for Rituxan and <1% each for Zevalin (Biogen IDEC) and Bexxar
(GlaxoSmithKline). The market should continue to grow, driven by additional FDA
approvals and more retreatments.
Exhibit 47: Non-Hodgkins lymphoma at a glance
Number of patients in U.S. (prevalence)
New cases in 2005 in U.S. (incidence)
Worldwide biotech sales (2005)
Number of approved biologics
Average patient age
5 year survival
347,000
56,000
>$3B
3
50-60
37%
Approximately 350,000 patients are living with NHL in the United States, with about
56,000 new cases each year. NHL occurs more frequently with age. The average patient
is 50-60 years old.
Disease overview
Immune cells begin as stem cells in the bone marrow. Stem cells can differentiate and
mature into B-cells, T-cells, macrophages, and other functional immune cells (see Exhibit
48). T-cells, B-cells, and macrophages are the most common white blood cells that give
rise to lymphoma. Both T-cells and macrophages can fight infection and cancer by
releasing cytokines that attract other immune cells, as well as by directly attacking other
cells. B-cells are unique in their ability to produce antibodies that bind to foreign bodies.
About 80-85% of NHL cases are of B-cell origin, and the remainder are derived from Tcells. Macrophages are implicated in Hodgkins disease.
Exhibit 48: Lineage of blood cell lines
Stem cells in bone
marrow
Platelets
Neutrophils
Erythrocytes (red
blood cells)
Macrophages
Lymphocytes (white
blood cells)
T lymphocytes
B lymphocytes
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United States
Hodgkins disease
Hodgkins disease accounts for about 8% of lymphomas. It is diagnosed based on the
presence of distinctive cancerous cells called Reed-Sternberg (RS) cells. The RS cell is
a cancerous macrophage with a characteristically large or bi-lobed nucleus. Hodgkins
disease usually arises in one lymph node and spreads to anatomically adjacent nodes.
This is in contrast to other lymphomas, which spread throughout the body.
Partly because of the way Hodgkins disease spreads, the disease is one of the most
curable types of cancer, with cure rates greater than 80%. The treatment of Hodgkins
disease is chemotherapy and radiation to the affected area. For the rest of the chapter, we
shall focus exclusively on non-Hodgkins lymphomas.
Non-Hodgkins lymphoma
NHL comprises over 20 different subsets of cancers of the lymph nodes and related
tissues. The lymphomas (see Exhibit 49) are categorized by the type of cell involved (B
cell or T cell are the most common types), and the architecture of the lymph node upon
biopsy. The most common lymphomas are diffuse large B-cell (DLBCL, 31% of all
NHL), follicular lymphoma (22%), marginal zone (5%), small lymphocytic (6%), mantle
cell (6%) and peripheral T-cell lymphoma (6%). NHL can also be characterized as low
(indolent), intermediate, and high grade (aggressive), depending on the rate of growth of
the cancer.
Exhibit 49: Lymphoma classification and treatment
Lymphoma
Prevalence
500,000
New cases/yr
65,000
Non-Hodgkin's Lymphoma
Prevalence
350,000
New cases/yr
56,000
5-yr survival
37%
B-cell/T-cell
85%/15%
Aggressive NHL
median survival
1-2 yrs
5-yr survival
50%
Treatment goal is cure
Indolent NHL
median survival >6yrs
Treatment goal is symptom relief
% Total NHL:
Follicular
22%
Marginal Zone
5%
10%
Small Lymphocytic
6%
Mantle Cell
6%
85%
Hodgkin's Lymphoma
Prevalence
145,000
New cases/yr
7,350
5-yr survival
88%
5%
Chemotherapy
Rituxan
Radiation
100%
50-60%
100%
Peripheral T-cell
6%
CHOP-R
Cyclophosphamide
Doxorubicin (Hydroxydaunomycin)
Vincristine (Oncovin)
Prednisone
Rituxan
40-50%
Relapse
Cure
Combination
therapy
Stem cell
transplant
Radio-immuno
therapy
Zevalin
Bexxar
Experimental
therapy
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Cancers derived from the cells early in the maturation pathway tend to grow faster and be
more aggressive. An example of these cancers is diffuse large B-cell lymphoma. Other
cancers, such as follicular lymphoma, derived from more mature cells, tend to be
indolent (develop slowly). If untreated, patients with aggressive lymphomas generally
have a life expectancy measured in months. In contrast, patients with indolent
lymphomas can have a median survival of 6-10 years.
Cells in the immune system can be identified by certain proteins or receptors on the
surface of the cell. These proteins are important modulators of the complex interactions
among cells. They can also serve as markers for different types of cells.
For example, CD20 (see Exhibit 50) is not found on blood stem cells or 70-80% of
plasma cells, but is found on all B-cells starting early in development. The selective
occurrence of CD20 makes it an attractive and effective target for biologic therapies.
Exhibit 50: B lymphocyte development and related cancers
Aggressive
NHL
ALL
Indolent
NHL
CLL
Multiple
Myeloma
Antibody
Immature
B cell
Stem Cell
Mature B cell
CD19
CD10
CD20
Plasma B cell
CD22
CD19
CD20
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Area of involvement
One lymph node region
IE
II
Two or more lymph node regions on the same side of the diaphragm
IIE
III
IIIS
IIISE
IV
Treatment
The goal of treatment for NHL is complete remission (no remaining evidence of disease).
The specific treatment algorithm used depends on the patients health and the type of
lymphoma.
Patients with indolent NHL are rarely diagnosed at an early stage. If they are, radiation
therapy is effective in curing about 50% of patients. For advanced patients without
symptoms, earlier therapy does not seem to prolong survival. Therefore, a watch and
wait approach is often used, especially for older patients. If symptoms occur, the tumor
starts to affect other organs, or turns aggressive, CHOP chemotherapy (see Exhibit 52)
and Rituxan are commonly used in sequence or combination. Rituxan is given as an
intravenous infusion weekly for four to six weeks during induction therapy. Essentially
all patients will relapse. Therapies for relapse include combinations of drugs that are
different than those used initially, and radioimmunotherapy (radioactive antibodies) such
as Zevalin and Bexxar. In addition to CHOP, fludarabine alone or CVP combination
therapy are also used for indolent NHL.
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CVP
Cyclophosphamide
Vincristine
Prednisone
Patients with aggressive lymphomas need to be treated aggressively to cure the disease.
Chemotherapy plus Rituxan for six to eight cycles has become the standard of therapy for
induction, especially for patients with large or advanced tumors. To prolong remission,
Rituxan maintenance therapy has been shown to be effective for patients who had
induction therapy with CHOP, but not with CHOP + Rituxan. The choice of therapies for
relapsed patients includes: (1) combination therapy with drugs not used initially,
sometimes at high doses; (2) stem cell transplantation; and (3) experimental therapies,
including radioimmunotherapy.
Zevalin
BiogenIdec
$21M
Chimeric MAb to CD20 (Rituxan) bound to
radioactive Y-90
Bexxar
GlaxoSmithKline
approx $10-20M
Chimeric MAb to CD20 (tositumomab)
bound to radioactive I-131
Indication
Treatment protocol
wkly x 4 or 8 doses
Administration
Side effects
oncologist
myelosuppression
severe infusion reactions
severe skin reactions
allergic reaction
kidney and heart damage
Step 1: Rituxan infusion and radioimaging Two steps separated by 7-14 days. Each
with Indium. Step 2 (7-9 days later): Rituxan step consists of an infusion of nonradioactive tositumomab followed by
infusion followed by Zevalin injection
Bexxar. The first step is to determine the
proper dose, which can vary among
patients.
radiation oncologist
radiation oncologist
myelosuppression
myelosuppression
myelodysplasias/cancer
myelodysplasias/cancer
mucositis
hypothyroidism
fatal infusion reactions
severe allergic reactions
severe skin reaction
Company
Sales 2005
Mechanism of action
Rituxan (DNA/BIIB/Roche)
Rituxan is a mouse-human chimeric monoclonal antibody that binds to the CD20 antigen
on B-lymphocytes. CD20 is expressed on over 90% of B-cell NHL. Rituxan is delivered
as an IV infusion once weekly for four or eight doses on an outpatient basis.
Rituxan is the standard of care for both aggressive and indolent B-cell NHL. The FDA
approved Rituxan in 1997 to treat relapsed or refractory, low-grade or follicular, CD20-
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positive, B-cell NHL. In February 2006, the indication for front line treatment of
aggressive B-cell NHL was granted.
In the United States, Genentech sells Rituxan and splits its profits with BiogenIDEC. In
Europe, Roche sells the product under the brand name MabThera and pays a royalty
(20% of sales) to Genentech, which in turn splits this royalty with BiogenIDEC.
Zevalin (BIIB)
Zevalin is an MAb to CD20 (Rituxan) bound to a radioactive isotope, yttrium-90. It was
designed to kill CD20-bearing cancer cells by radiation. It is mainly used in patients who
are not responsive to Rituxan. Zevalin is the first radioimmunotherapy approved by the
FDA.
Unlike Rituxan, which is administered by a cancer specialist, Zevalin is radioactive and
requires administration by nuclear medicine specialists or radiation oncologists. Zevalin
is administered in two steps: (1) one infusion of Rituxan to clear circulating lymphocytes
before infusion of Zevalin bound to Indium-111; and (2) seven to nine days later, one
infusion of Rituxan followed by Y-90 Zevalin. This multi-step process minimizes the
dose of radioactivity to the body.
Bexxar (GSK)
GlaxoSmithKlines Bexxar is a chimeric MAb to CD20 bound to radioactive Iodine-13.
Use of Bexxar also requires two steps, as with Zevalin. However, calculation of the
optimal dose (dosimetry) is necessary for Bexxar, but not Zevalin. The need for
dosimetry is one reason for Bexxar to be used less frequently than Zevalin. We believe
that Zevalin and Bexaar are unlikely to compete effectively against Rituxan as first-line
therapy owing to bone marrow toxicity, logistical issues associated with radioactive
MAbs, and limited potential for use in combination with chemotherapy.
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Interaction of histones with the DNA determines whether the DNA remains tightly
wound in its inert state or whether it is loosely bound and ready for transcription. Histone
deacetylase inhibitors promote the inactive state of histone/DNA in tightly wound
chromosomes. When DNA cannot be transcribed, oncogenic proteins cannot be produced
and the cell may have difficulty dividing. Phase 2 trials by multiple companies are
ongoing in multiple cancers, including NHL. We expect data in 2006/7.
MyVAX (Genitope)
MyVax is a treatment that recruits the patients own immune system to attack the cancer.
Specific proteins expressed by the tumor are isolated and combined with a carrier protein.
The tumor protein/carrier protein complex is then injected into the patient along with an
adjuvant. The body then creates an immune response which, primed by the protein
exposure, targets the tumor. Genitope has demonstrated positive responses in small
numbers of patients in Phase 2 trials.
See Exhibit 54 for a summary of selected late-stage drug candidates for NHL.
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United States
Ticker
ACEL
Product
AC RN-321
Mechanism of action
ribonuclease conjugated to MAb to CD22
Boehringer
Ingelheim
private
BI 2536
enzyme inhibitor
Coley
Pharmaceutical
Group
COLY
CPG-7909
Genentech,
BiogenIDEC, Roche
Genitope
GlaxoSmithKline,
Cytokinetics
DNA/BIIB PRO70769
ROG.VX
GTOP
MYVAX
GSK/CYTK Ispinesib
Phase
2
Comments
P2 trials ongoing
P1 trials ongoing in
relapsed/refractory
aggressive NHL
1/2
1/2
immune stimulator
1/2
2
Gloucester Pharma
private
FK228
P2 trials ongoing
Immunomedics
IMMU
epratuzumab
1/2
Immunomedics
IMMU
hA20
1/2
Zarnestra
JNJ
Kosan Biosciences
KOSN
17-AAG
Medarex
MEDX
MDX-010
1/2
Medarex
MEDX
MDX-060
MAb to CD30
P2 data on Hodgkin's
disease/anaplastic lg cell
lymphoma 1H/06
MRK
Vorinostat
P2 trials for
follicular/mantle
cell/marginal zone
ongoing
Merck
Millennium
Pharmacyclics
MLNM
PCYC
Velcade
proteosome inhibitor
Motexafin gadolinium thioredoxin reductase inhibitor
3
2
Seattle Genetics
SGEN
SGN-30
MAb to CD30
Wyeth
WYE
temsirolimus
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Multiple myeloma
69
70
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United States
Multiple myeloma
Market and opportunity
Multiple myeloma is a relatively small but growing market for biologics (see Exhibit
55). Only one product biotech product is approved for multiple myeloma, but two others
are used off label. We believe that the multiple myeloma market will expand in the next
few years, driven by launch of new products, increasing use of combination therapy, and
use of new agents in earlier stage patients.
Exhibit 55: Multiple myeloma at a glance
63,000
16,000
$550M
65
3 years
Multiple myeloma is incurable and fatal, with an estimated survival of about three years
for untreated patients. At diagnosis, the average age of patients is 65, and only 2% of
patients are under 45. Blacks are twice as commonly affected as whites, and men slightly
more than women. According to the American Cancer Society, there were 15,980 new
cases of multiple myeloma in the United States in 2005. The prevalence in the United
States is approximately 63,000 people.
Disease overview
Multiple myeloma (see Exhibit 50) is a cancer of plasma cells which are late-stage cells
in the B-lymphocyte pathway. Plasma cells are the major cell type to produce antibodies
(immunoglobulins). Plasma cells are usually found in the bone marrow and lymphoid
organs. In normal individuals, plasma cells are generally not free-floating in the
bloodstream.
Exhibit 56: Multiple myeloma key terms to know
Antibody
M protein
Monoclonal antibodies
Multiple myeloma
Osteoblasts
Osteoclasts
Plasma cell
Plasmacytoma
Complex protein designed on one end to attach to foreign particles and on the other to activate immune cells
Monoclonal antibody formed by a cancerous (multiple myeloma) plasma cell
Group of antibodies that are all derived from the same plasma cell or clone of plasma cells
Cancer of plasma cells
Cells designed to create bone
Cells designed to destroy bone
Mature immune cell that produces antibodies
Tumor made up of plasma cells, usually located outside the bone marrow
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large numbers of plasma cells (>10% of total white cells) in the bone marrow.
Sometimes plasma cells can spread outside the bone marrow and form tumors
elsewhere in the body, called plasmacytomas;
anemia;
The high levels of plasma cells and M protein are responsible for other
complications:
Anemia
Plasma cells normally comprise about 0.2% to 2.8% of the white blood cells in the bone
marrow, but this proportion can exceed 30% in patients with multiple myeloma. As the
bone marrow is stretched to produce the cancer cells, there is less ability to produce other
blood cells, such as red blood cells, leading to anemia. Another cause of anemia is low
production of erythropoietin by the kidneys (see below).
72
Osteoclasts express a receptor on the cell surface called RANK (receptor activator of
NFkB). When this receptor is activated by RANKL (RANK ligand), the osteoclast is
turned on and begins to degrade bone. RANK is inhibited by osteoprotegerin, which
is a soluble receptor that competes for RANKL, taking it out of circulation. The
activity of osteoclasts is regulated by the ratio of RANKL (activator) and
osteoprotegerin (de-activator). MM cells over-express RANKL, leading to a high
RANKL/osteoprotegerin ratio and increased osteoclast activity.
United States
Smoldering myeloma
Multiple myeloma
Definition
M protein
Earliest stage of multiple myeloma, usually
<3g/dL
detected by accident
More plasma cells and myeloma protein in
>3g/dL
blood, but no organ damage
High numbers of plasma cells and
>3g/dL
myeloma protein, end-organ failure
Plasma cells
<10%
Symptoms
none
>10%
none
>10%
Patients usually begin treatment when they start to have signs of organ damage. Patients
with earlier stage, asymptomatic disease are rarely treated.
Treatment
Patients with multiple myeloma are stratified to either stem cell transplantation or no
transplant (see Exhibit 58). The former is usually reserved for younger patients, who are
better able to tolerate the procedure. The goal is to achieve complete response, or
eradication of any identifiable disease. Complete response rates correlate well with
improvement in overall survival. Most physicians will treat first-line patients with
Thalomid plus dexamethasone (a steroid), although a number of other combination
therapies may be used.
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70%
Pre-induction therapy
Dexamethasone (Dex)
Thalomid (Thal)
Thal/Dex
VAD
Low-dose Therapy
Melphalan and Prednisone (MP)
Thalomid + MP or Dex
Dexamethasone
VAD
Revlimid or
Velcade on protocol
Relapse
Transplant of cells
Relapse
15%
85%
100%
Relapse
100%
Retreatment
Velcade
Velcade + Thal
Velcade + Revlimid
Thal + Dex
Rev + Dex
Relapse
Palliative Care or
Experimental Protocols
For transplant patients, therapy usually starts with low doses of Thalomid,
dexamethasone, VAD (vincristine + Adriamycin + dexamethasone) or other
combinations. Dexamethasone monotherapy is nearly as effective as many combinations,
and is considered to be the standard comparator for novel agents. After the multiple
myeloma cells are reduced/eliminated, stem cells from the bone marrow or blood are
collected and reserved for transplantation. Patients are then treated with high-dose
chemotherapy, usually melphalan and prednisone, to eradicate any remaining disease.
Stem cells are then infused to repopulate the bone marrow.
Some patients are treated with tandem stem cell transplants in order to improve long term
outcomes. Enough stem cells are collected to perform two transplants. Within six months,
if a complete or near-complete response is not seen with the first transplant, a second
round of high-dose chemotherapy and full-body irradiation is given, followed by a
second transplant. The success of transplantation depends largely on whether the stem
cells collected for transplant are contaminated with multiple myeloma cells. This is why
more aggressive first-line regimens are being pursued to reduce the contamination.
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Patients who are not candidates for stem cell transplantation will generally receive
chemotherapy in the form of melphalan and prednisone (MP), or MP plus Thalomid.
Melphalan is a potent drug, but one that spoils the bone marrow for stem cell
mobilization; therefore it is best suited for treatment after stem cells are collected, or in
patients unable to receive transplant.
Velcade
$214
2nd/3rd line treatment of multiple myeloma
Revlimid
NA
Myelodysplastic syndrome
Thalidomide
$388
Erythema nodusum leprosum
NA
Data on 1st line treatment (2H/06)
proteosome inhibitor
IV infusion
weekly x 6-8 cycles
Filed 1/06
FDA approval for MM (2H/06)
immune modulator
Oral
daily
$4,000
NA
$3,000
thrombocytopenia
anemia
peripheral neuropathy
Source: Centers for Medicare and Medicaid, package inserts, Goldman Sachs Research.
is used off-label in both first and second line therapy of multiple myeloma. Celgene
submitted an sNDA for the treatment of refractory multiple myeloma in 2004. In
November 2005, the FDA issued an approvable letter requesting revised product labeling,
updated safety information, and additional patient information. We expect FDA action in
1H2006.
The mechanism of action of Thalomid is not well-defined, but may relate to suppression
of TNF- production, migration of white blood cells as well as inhibition of angiogenesis.
Thalomid has a potent anti-myeloma effect without limiting the effect of stem cell
transplantation. According to company reports, over 40% of patients receive Thalomid
first line, either alone or in combination.
The Phase 3 pivotal trial (MM-003) randomized 470 patients with newly diagnosed
multiple myeloma performed to thalidomide + dexamethasone vs dexamethasone alone.
The median time to progression in the Thal/Dex group was 75.7 months vs 27.9 months
for the Dex alone group. Progression free survival was 55.7 months vs 24.3 months.
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refractory multiple myeloma in May 2003. Velcade works by inhibiting the 26S
proteosome (an enzyme that cleaves cellular proteins, activating or deactivating them).
Inhibition of the proteosome reduces the formation of NFkB, a promoter of cell growth
and division. Velcade is given intravenously on days 1, 4, 8, and 11 every three weeks
per cycle. Patients generally receive an average of 5.5 cycles.
In March 2005, Velcade was approved for second line multiple myeloma based on data
from the Phase 3 APEX trial. Velcade was more effective than dexamethasone in
improving time to progression, responses and survival in patients who had already
received one or more prior therapies. One-year survival was 80% for Velcade +
dexamethasone versus 66% for dexamethasone alone.
Millennium is studying Velcade alone and in combination with other therapies for firstline as well as relapsed multiple myeloma. There are currently several Phase 2 trials and
three Phase 3 trials ongoing to evaluate Velcade in first-line therapy. We estimate that at
the end of 4Q2005, Velcade had achieved approximately 10%, 45%, and 40-50%
penetration in first-, second-, and third-line therapy, respectively. For 2006-2008, we
project worldwide Velcade sales of $268 million, $303 million, and $333 million, up
27%, 13%, and 10%, respectively year over year.
The side effects of Velcade include peripheral neuropathy and lower blood cell counts.
Peripheral neuropathy can manifest as numbness, pain, tingling, or discomfort. This is
generally limited to the palms and soles of the feet, and is the most common reason to
reduce the dose of therapy or stop therapy. The neuropathy is reversible, and most
physicians advocate either dose reduction or a short break in therapy when symptoms
become a problem.
the treatment of myelodysplastic syndrome. The FDA included three black-box warnings
on the label of Revlimid: (1) neutropenia and thrombocytopenia; (2) deep vein
thrombosis; and (3) fetal malformations. In clinical trials, about 17% of treated patients
developed grade-3 or -4 neutropenia, although there was no significant increase in serious
infections. Thrombosis occurred in 8.5% of treated patients. Patients in these trials did
not receive anticoagulation. We expect most physicians to recommend blood thinners
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United States
to stress. Cells that have deficiency of HSP-90 tend to die easily when in hot laboratory
conditions, hence the name. In animals, HSP-90 inhibition makes cells more fragile when
presented with stress, such as chemotherapy. Overexpression of HSP-90 has been
postulated as one way that cancer cells have extended survival and the capacity to
overwhelm the body. HSP-90 inhibitors may therefore have synergy with current
treatments, allowing more effective results from chemotherapy. Kosan Biosciences and
Infinity Pharmaceuticals (private) both are conducting early clinical trials of HSP-90
inhibitors in multiple myeloma. We expect data from these trials in 2006.
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United States
Their interaction with the DNA determines whether DNA is tightly wound in its inert
state or whether it is loosely bound and ready for transcription. Histone deacetylase
inhibitors promote the inactive state of histone/DNA in tightly wound chromosomes.
When DNA cannot be transcribed, oncogenic proteins cannot be produced and the cell
may have difficulty dividing. Multiple companies, including Merck and privately-held
Gloucester Pharmaceuticals, are in early clinical trials. We expect data in 2006.
See Exhibit 60 for a list of selected drug candidates for treating multiple myeloma.
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United States
Ticker
ACEL
Product
AC RN-321
Mechanism of action
ribonuclease conjugated to MAb to CD22
Boehringer
Ingelheim
private
BI 2536
enzyme inhibitor
Coley
Pharmaceutical
Group
COLY
CPG-7909
Genentech,
BiogenIDEC, Roche
Genitope
GlaxoSmithKline,
Cytokinetics
DNA/BIIB PRO70769
ROG.VX
GTOP
MYVAX
GSK/CYTK Ispinesib
Phase
2
Comments
P2 trials ongoing
P1 trials ongoing in
relapsed/refractory
aggressive NHL
1/2
1/2
immune stimulator
1/2
2
Gloucester Pharma
private
FK228
P2 trials ongoing
Immunomedics
IMMU
epratuzumab
1/2
Immunomedics
IMMU
hA20
1/2
Zarnestra
P2 monotherapy and
comb. w/Velcade in
refractory lymphoma
P1 trials in NHL ongoing
JNJ
Kosan Biosciences
KOSN
17-AAG
Medarex
MEDX
MDX-010
1/2
Medarex
MEDX
MDX-060
MAb to CD30
P2 data on Hodgkin's
disease/anaplastic lg cell
lymphoma 1H/06
MRK
Vorinostat
P2 trials for
follicular/mantle
cell/marginal zone
ongoing
proteosome inhibitor
Merck
Millenium
MLNM
Velcade
Pharmacyclics
PCYC
P2 trials ongoing
Seattle Genetics
SGEN
SGN-30
MAb to CD30
Wyeth
WYE
temsirolimus
positive P2 results in
relapsed/refractory
mantle cell lymphoma
79
80
United States
United States
Leukemia
81
82
United States
United States
Leukemia
Market and opportunity
We estimate the sales for leukemia treatments to be about $2 billion in 2005. Novartiss
Gleevec, a small molecule inhibitor of tyrosine kinase, is the market leader. There are
multiple product candidates under development. If effective, these agents should expand
the market.
There are approximately 150,000 patients with leukemia in the United States, with about
30,000 new cases each year (see Exhibit 61). Patients generally develop leukemia in midlife; however, acute lymphoblastic leukemia, which is usually curable with
chemotherapy, is more common in children. In this chapter, we focus primarily on adult
leukemia.
Exhibit 61: Leukemia at a glance
150,000
30,000
$2B
50-60
Disease overview
Leukemia, similar to lymphoma, is a cancer of the bone marrow, which includes the
precursors of white blood cells. The primary clinical difference between lymphoma and
leukemia is that leukemia cells are floating freely in the bloodstream, rather than
concentrating in lymph nodes and other tissues.
As a result of bone marrow destruction, virtually all leukemia patients develop anemia (a
deficiency of red blood cells), leukopenia (a shortage of normal white blood cells leading
to increased susceptibility to infection), and thrombocytopenia (a deficiency of platelets
resulting in bruising and easy bleeding).
The major cells affected in leukemia are the lymphocytic (B and T-lymphocytes) and the
myeloid (macrophages and neutrophils) cell lines.The acute leukemias are aggressive
cancer derived from cells early in cell development. In acute leukemias, the bone marrow
is replaced by very immature cells called blasts. Acute leukemia has a very rapidly fatal
course in untreated patients. Leukemia derived from cells later in cell maturity are
chronic leukemias, and tend to have longer courses with greater life expectancy.
Leukemia is thus classified into four main categories (see Exhibit 62): chronic
lymphocytic leukemia (CLL), chronic myelogenous leukemia (CML), acute lymphocytic
leukemia (ALL), and acute myelogenous leukemia (AML).
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Acute
Immature, blast cells
Rapid progression
44,000
4,000
40%
Lymphocytic
Lymphocyte precursors
CLL
Prevalence
70,000
Incidence
9,700
5-yr survival
71%
Median survival 10yrs
Myeloid
Granulocyte precursors
Chronic
Mature cells
Slower course
AML
Prevalence
Incidence
5-yr survival
age<60
age>60
CML
Prevalence
Incidence
5-yr survival
Median survival
22,400
12,000
30%
<10%
17,000
4,600
32%
5yrs
There are few known disease mechanisms in leukemia. The best characterized is the bcrabl mutation of chromosome 22, commonly referred to as the Philadelphia
chromosome. This abnormality is found in 95% of CML and 25% of adult ALL. The
genetic translocation codes for a specific tyrosine kinase, an enzyme which can promote
DNA replication and cell division. Like lymphoma cells, leukemia cells may have
characteristic proteins on the cell surface. CD52 and CD33 have been associated with
ALL and CML, respectively.
Diagnosis
Up to 50% of patients with chronic leukemia may not have symptoms, and are diagnosed
on the basis of blood tests. Patients may present with systemic symptoms of fatigue,
malaise, weight loss, and sweating. Abdominal swelling may occur as the spleen enlarges
with cancer cells. Approximately 10% of patients with CLL will have classic B
symptoms (fever, weight loss, drenching night sweats). Patients may also have symptoms
related to pancytopenia, or failure of the bone marrow to generate cell lines. Loss of red
blood cells (anemia) causes fatigue and shortness of breath. Loss of white blood cells can
cause fevers and infection. A deficiency of platelets causes easy bruising or bleeding.
The acute leukemias, ALL and AML, tend to progress rapidly with escalating symptoms.
CML starts with an indolent course, but usually within three to five years of diagnosis
patients develop blasts indicative of AML. Once blast transformation occurs, CML has a
similar prognosis to AML. CLL is a truly indolent leukemia, and may progress for years
with few symptoms and little need for aggressive therapy.
Diagnosis of leukemia is based on blood tests, most importantly the number of various
cells in the blood. CLL can be diagnosed on the basis of high numbers of lymphocytes
(often >10X normal). Most patients with a suspected diagnosis of leukemia will receive a
bone marrow biopsy to quantify the degree of bone marrow involvement. Patients with
acute leukemia can also be diagnosed on microscopic examination of peripheral blood for
the presence of blasts.
Treatment
Treatment depends on the type of leukemia, patients age and functional status, and the
stage of disease (see Exhibit 63). The most important guide to treatment is cytogenetic
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analysis for the Philadelphia chromosome. ALL and CML patients with this genetic
mutation are likely to respond to treatment with Gleevec. Other patients will generally
receive either low dose chemotherapy (CLL) or high-dose chemotherapy followed by
stem cell transplant (ALL, CML, AML).
Exhibit 63: Selected treatment options for leukemia
AML
CLL
ALL
CML
Chemotherapy
Chlorambucil
Cyclophosphamide
Fludarabine
Cladribine
Corticosteroids
+ Philadelphia chromosome
Gleevec
+ Philadelphia chromosome
Gleevec
Elderly patients
Mylotarg
Salvage chemotherapy
Cytarabine
Daunorubicin
Mitoxantrone
Biologics
Rituxan (off-label)
Campath
Alternative therapies
Splenectomy
Radiation
Leukapheresis
Maintenance
6MP/MTX/Vincristine/prednisone
Relapse
Cytarabine
Idarubicin
Chemotherapy
Hydroxyurea
Busulfan
Interferon alpha
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United States
Gleevac
Mylotarg
Enzon
Cephalon
Campath
Company
Novartis
Wyeth/UCB Celltech
Oncaspar
Trisenox
Genzyme/Schering AG
Mechanism of Action
tyrosine kinase inhibitor
MAb to CD33 bound to calicheamicin
pegylated L-asparaginase
arsenic trioxide, induces apoptosis
MAb to CD52
Comment
Philadelphia chromosome +ve
relapsed CD33+ve, >60yo
refractory to native asparaginase
APML accts. for about 20% of AML
B-cell CLL refractory to alkylating
agents and fludarabine
Indication
ALL/CML
AML
ALL
APML
CLL
2005 sales
$2B
<$40M
$24M
<$20M
$38M
Gleevec (Novartis)
Patients with CML and ALL may have a specific mutation that can be targeted with
biologic therapy. Gleevec is an oral tyrosine kinase inhibitor that is selective for plateletderived growth factor. This tyrosine kinase is associated with the bcr-abl mutation
(Philadelphia chromosome) found in 95% of CML and 25% of adult ALL. Gleevecs
efficacy is unmatched in drug therapies of these leukemias in Phase 2 studies, 60% of
CML patients had a major cytogenetic response (elimination of cells exhibiting bcr-abl)
and 95% had a complete hematologic response (no clinical evidence of disease). As a
result of these impressive response rates, Gleevec is now the standard of care in treating
CML and Philadelphia chromosome-positive ALL. Gleevec is FDA approved for firstline treatment of Philadelphia chromosome-positive CML patients in chronic phase; Ph+
CML in accelerated phase, blast crisis, and non-responders to interferon therapy; and
gastrointestinal stromal tumors (GIST). Gleevec sales totaled $2 billion in 2005.
Campath is approved for the treatment of B-cell CLL in patients who have been treated
with alkylating agents (chemotherapy) and have failed fludarabine. Campath causes
myelosuppression and severe infusion reactions. Sales in 2005 were approximately $38
million.
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87
United States
Company
Bristol Myers Squibb
Genta
Novartis
Genta
SuperGen/MGI Pharma
DNA/BIIB/Roche
J&J
Vion Pharma
Maxim Pharma
Cephalon
Zeltia
Pharmacyclics
Cephalon
Millenium
Immunomedics
Phase
filed
filed
3
3
3
3
3
3
3
2
2
2
2
1/2
1/2
Mechanism of action
Abl-Src tyrosine kinase receptor antagonist
antisense to Bcl-2
Bcr-Abl tyrosine kinase receptor antagonist
antisense to Bcl-2
hypomethylating agent
MAb to CD20
farnesyl protein transferase
alkylating agent
reduces free radical formation
arsenic trioxide, induces apoptosis
peptide derived from Aplidum albicans, inhibits VEGF
thioredoxin reductase inhibitor
tyrosine kinase receptor antagonist
tyrosine kinase receptor antagonist
MAb to CD22
Indication
CML/ALL
CLL
CML/ALL
AML
AML
CLL
AML
AML
AML
APML (a variant of AML)
ALL
CLL
AML
AML
ALL
6/2-6/6
12/9-12/12
1/06
1H/06
2H/06
2H/06
2H/06
1H/06
1H/06
mid 2006
2H/06
2H/06
2006
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Inclusion and exclusion criteria. Patients with early- or late-stage disease, or those
with prior therapies, background therapies, or comorbidities cannot be compared
with one another across trials.
each trial. Use of >75% instead of >90% reduction in M protein as a definition for
very good partial response in multiple myeloma, for example, can significantly affect
the number of patients responding. The duration of response is also important. Please
see Exhibit 67 for some commonly used definitions.
Use of surrogate endpoints. Many drugs are tested in multiple myeloma, partly
trial is the most effective way to evaluate the true response to a drug. Results from
open-label, single-arm trials are less compelling.
Exhibit 67: Definitions of responses in clinical trials of blood cancers
Multiple Myeloma
Complete response
Near complete response
Very good partial response
Partial response
Minimal response
Stable disease
Progressive disease
Progression-free survival
Time to progression
Overall survival
No detectable M protein in serum and urine and normal percentage of plasma cells in bone marrow
Same as above, but immunofixation is positive
> 90% decrease in M protein
> 50% decrease in M protein
< 50% decrease in M protein
Stable disease parameters
> 25% increase in M protein, new bone lesions, or new plasmacytoma
Time to death or increase in tumor/cancer burden
Time to death or increase in tumor/cancer burden
Time to death
Lymphoma
Progression-free survival
Time to progression
Overall survival
Complete Response**
Partial Response**
Overall response*
Progressive Disease**
50% reduction in sum of diameters of all measurable lesions, objective disease improvement, resolution of B
symptoms
Complete response + partial response
25% or greater increase in at least one lesion, appearance of new lesions or recurrence of B symptoms
*some trials incorporate other categories, such as near complete response (nCR) or very good partial response (VGPR)
**Journal of Clinical Oncology. Lister et al. 7 (11): 1630. (1989)
89
90
United States
United States
91
92
United States
United States
New Cases
Deaths
Lung
172,570
163,510
Colon
104,950
56,290
Rectum
40,340
Colorectal
145,290
Breast
% of Total
New Cases
Deaths
13%
29%
8%
10%
3%
0%
56,290
11%
10%
212,930
40,870
16%
7%
Pancreas
32,180
31,800
2%
6%
Prostate
232,090
30,350
17%
5%
Ovary
22,220
16,210
2%
3%
Bladder
63,210
13,180
5%
2%
Brain / Nerves
18,500
12,760
1%
2%
Kidney
36,160
12,660
3%
2%
29,370
7,320
2%
1%
Larynx
9,880
3,770
1%
1%
39,250
11,090
3%
2%
Melanoma
59,580
7,770
4%
1%
Endometrium
40,880
7,310
3%
1%
Cervix
10,370
3,710
1%
1%
Thyroid
25,690
1,490
2%
0%
Testis
Other (1)
8,010
390
1%
0%
253,980
160,890
18%
28%
All sites
1,372,910
570,280
100%
100%
(1) Other includes blood cancers with 114,000 new cases and 54,000 deaths
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Definition
Adjuvant /
Neoadjuvant therapy
Treatment given after surgical removal of the primary tumor is called adjuvant
therapy. It is intended to reduce the risk of recurrence. Neoadjuvant therapy is
given before the surgical procedure and may facilitate surgical removal.
Angiogenesis
Apoptosis
EGF
Epidermal Growth Factor. Protein that stimulates cell growth and proliferation.
EGFR
Oncogene
Mutant form of a normal gene that directs cell growth and division. An
oncogene promotes the uncontrolled growth of cancer.
Receptor Tyrosine
Kinase (RTK)
Receptor tyrosine kinases (RTKs) are bound to the cell surface. They are
activated when their corresponding "ligand" binds. Examples: EGFR & VEGFR
are activated by EGF and VEGF, respectively.
Tyrosine Kinase
Inhibitor (TKI)
Tumor suppressor
gene
A gene that prevents cell growth. Certain mutations of the tumor suppressor
gene can lead to uncontrolled cell growth.
VEGF
VEGFR
proliferation
3. decrease the function of genes that drive programmed cell death (apoptosis), a
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growth factor (VEGF). VEGF plays a significant role in the growth of many types of
solid tumors.
Traditional chemotherapy acts by killing cancer cells. Biotech drugs generally use
approaches (2)-(4), but (2) and (3) have been more successful to date and will be the
focus of this chapter.
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Class of Agent
Mechanism of action
Drug
Company
Antimetabolites
Methotrexate
5-FU
Xeloda
Gemzar
generic
generic
Roche
Eli Lilly
Alimta
Eli Lilly
X
X
X
X
X
Alkylating agents
Damage DNA
Cyclophosphamide generic
Anthracyclines
Doxorubicin
generic
Epirubicin
Doxil
generic
JNJ
X
X
Platinum compounds
Taxanes
Vinca Alkaloids
Damage DNA
cisplatin
generic
carboplatin
generic
Eloxatin
SNY
paclitaxel
generic
Taxotere
Abraxane
SNY
APPX
X
X
Vincristine
generic
Vinorelbine
generic
Product
Generic Name
(Company)
Aloxi
Palonosetron
(MGI Pharma)
Mechanism
Block receptors that trigger
vomiting (serotonin, 5HT3
receptors)
Symptom
Treated
Comments
Nausea
$249
Neupogen
Filgrastim
(Amgen)
Neutropenia
(low white blood
cells)
$805
Neulasta
Pegfilgrastim
(Amgen)
Neutropenia
(low white blood
cells)
$1,900
Procrit / Eprex
Epoetin alpha
(J&J)
Anemia
(low red blood
cells)
$2,246
Aranesp
Darbopoeitin Alfa
(Amgen)
Anemia
(low red blood
cells)
$2,104
Kepivance
Palifermin
(Amgen)
Oral mucositis
(mouth sores)
$19
Ethyol
Amifostine
(MedImmune)
Kidney toxicity
of cisplatin
$96*
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Antibodies
2005 US
Stage
Sales ($MM)
Targets
Approved
In Development
Genentech
marketed
$1,182
VEGF
Colon
Lung, Breast
Herceptin
Genentech
marketed
$747
HER2
Metastatic Breast
Adjuvant Breast
Erbitux
ImClone / Bristol-Myers
Squibb/ Merck KGaA
marketed
$413
EGFR
Pancreas, Lung
Panitumumab
Abgenix / Amgen
Phase 3
--
EGFR
--
MDX-010
Medarex / Bristol-Myers
Squibb
Phase 3
--
CTLA-4
--
Melanoma
Tarceva
OSI / Genentech /
Roche
marketed
$275
EGFR
Lung, Pancreas
Iressa
AstraZeneca
marketed
NM
EGFR
Lung
Nexavar
(Sorafenib)
Onyx / Bayer
marketed
NM
Kidney
Sutent
Pfizer
marketed
NM
Lapatinib
GlaxoSmithKline
Phase 3
--
Breast
PTK787
Novarts / Schering AG
Phase 3
--
--
Drug
Company
Avastin
Comments
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United States
Cancers are usually divided into four stages. Stage I and II tumors are small and have not
spread. Stage III is more extensive and may involve spread to lymph nodes. Stage IV
tumors have spread to distant parts of the body. Drug therapy is the primary form of
treatment for Stage IV tumors, whereas surgery and radiation may be more appropriate
for earlier stage disease. A combination of techniques is often used.
Issue
Comment
Background
therapy
The type of background therapy to which the investigational drug is added can significantly impact
clinical outcome.
Demographics
Certain demographic factors (e.g., age, gender, ethnicity and smoking status) may have more or less
favorable outcomes.
Inclusion and
exclusion
criteria
Inclusion and exclusion criteria determine which types of patients may enroll in the trial. For example,
the study protocol may specify that patients must have a certain level of performance status, number
of previous therapies or stage of tumor. Narrowly defined study groups may result in narrow product
approvals (smaller market opportunity), although cancer drugs are often used "off-label" by some
physicians.
Primary
endpoint
The success of the clinical trial will be judged based on the outcome with respect to the prespecified
primary endpoint, which is explicitly stated in the study protocol. A study that "misses" its primary
endpoint (e.g., survival), will likely be deemed unsuccessful, even if secondary enpoints (e.g., RR and
PFS) were "hit".
1. Clinical endpoints
Overall survival (OS) the time from patient randomization to death from any cause is
the gold standard measure for evaluating the efficacy of new drugs against solid
tumors. However, a number of other measures, such as progression free survival (PFS),
time to tumor progression (TTP), and response rate (RR) are also evaluated (see
Exhibit 74). Response rates are usually defined using the RECIST (Response Evaluation
Criteria in Solid Tumors) methodology. However, response rate does not always predict
overall survival. PFS and TTP are considered the next best metrics after OS. PFS,
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which includes patients who die from any cause, is considered to be a better measure than
TTP, which does not.
TTP & PFS may improve by only a few weeks by the drug candidate. Therefore,
measurements should be made frequently enough to detect the difference. For drugs that
inhibit, but not kill, cancer cells, TTP should be a better endpoint because it does not
require tumor shrinkage (response rate).
Exhibit 74: RECIST criteria to evaluate response rate and tumor progression in clinical trials
Metrics
Response Rate Metrics
Definition
At least 30% decrease in the sum of the longest diameters of specified tumors
CR + PR
The time from patient randomization until death from any cause. The "gold standard"
endpoint.
The time from patient randomization until tumor recurrence or death. Often used as an
endpoint in adjuvant therapy trials.
The time from patient randomization until tumor recurrence, death or other prespecified
events.
20% increase in the sum of the longest diameters of the specified tumors and / or the
appearance of one or more new lesions
The time from patient randomization until tumor progression or death. Therefore, unexpected
side effects of the drug leading to death will be counted. Differs from TTP, which excludes
patients who die without measured tumor progression. Viewed by FDA as more robust than
TTP.
The time from patient randomization to tumor progression or discontinuation from study due
to toxicity. Excludes patients who die without measured progression, whereas PFS includes
these patients. Viewed by FDA as less robust than PFS.
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3. Health status
One key consideration is the baseline level of health (i.e., performance status) of patients
enrolled. Two scales are commonly used to assess performance status, the ECOG and the
Karnofsky scales (see Exhibits 75 and 76). Most cancer trials generally enroll patients
with relatively good performance status, such as ECOG of better than 2. It is generally
more difficult to show an improvement in sicker patients.
Exhibit 75: ECOG Performance Status criteria
Description
Score
Description
Asymptomatic
80-100
50-70
Bedridden
0-40
Score
100
United States
Lung cancer
101
102
United States
United States
Lung cancer
Market and opportunity
Lung cancer accounted for 173,000 new diagnoses and 163,000 deaths in 2005 more
deaths than colon, breast and prostate cancers combined (see Exhibit 77). Smoking is
believed to be responsible for about 87% of lung cancers. There are two major categories
of the disease: Non-small cell lung cancer (NSCLC, ~80% of cases) and small cell
lung cancer (SCLC, ~20%). The latter is rapidly fatal if untreated. We estimate that each
year about 105,000 and 45,000 patients receive chemotherapy for first-line and relapsed
(second-line or greater) NSCLC, respectively, generating approximately $2 billion in US
sales annually.
Exhibit 77: Lung cancer key facts
173,000
163,000
Tarceva, Iressa
Avastin (H2/06)
Adenocarcinoma (30-50%);
Squamous cell (25-40%)
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United States
Stage
Approx.
5-year
Survival
Description
IA
Tumor is </= 3 cm and has not reached main airway. No nodal involvement.
61%
IB
Tumor >3cm or has reached a main airway or visceral pleura. No nodal involvement.
38%
IIA
Tumor has spread to nearest lymph nodes around airways or within lung and is 3 cm.
34%
IIB
Tumor has spread to nearest lymph nodes around airways or within lung and is > 3 cm.
24%
IIIA
Direct invasion of chest wall / structures or involvement of lymph nodes adjacent to affected lung.
13%
IIIB
Tumor has invaded mediastinum or tumor has spread to lymph nodes in middle of chest adjacent to
opposite lung.
5%
IV
Distant metastasis
1%
Treatment
Exhibit 79 outlines the treatment of NSCLC.
Localized (Stage I and II) tumors: Primary treatment is surgery. Radiation alone is
used for patients who are not surgical candidates but is less effective. Adjuvant
chemotherapy is becoming standard of care after surgery. The chemotherapy usually
involves a platinum based drug plus a non-platinum based drug (platinum-based
doublet).
The standard of care for first-line therapy of metastatic NSCLC (mNSCLC) has
been the platinum-based doublet.
Recent data demonstrated that the addition of a biologic, Avastin (Genentech /
Roche) to a platinum-based doublet could extend survival. We expect FDA
approval in 2H2006.
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Exhibit 79: Treatment algorithm for non-small cell lung cancer (NSCLC)
NSCLC
20%
80%
Stage IIIb/IV
(surgery not possible)
Stage I-IIIa
Stage I-II
(localized)
Surgery +
Adjuvant
chemotherapy
Stage IIIa
(locoregionally
advanced)
Chemotherapy "doublet"
(cisplatin or carboplatin + other drug)
+/Avastin
(expect approval in H2/06)
Relapse
Tarceva
Alimta
Taxotere
NSCLC (and pancreatic cancer). Tarceva is being evaluated in Phase 3 trials for therapy
of earlier stage NSCLC patients in the first-line and adjuvant settings. The US sales
opportunity among first-line and adjuvant patients may exceed $1 billion, versus the
<$0.5 billion potential among relapsed patients. Potential approvals for front line and
adjuvant NSCLC patients may be a few years away. However, Phase 2 data on Tarceva
in first-line patients could be released in 2006. If positive, off-label use may be
stimulated.
Avastin
We expect Avastin (Genentech / Roche), which is approved for colorectal cancer, to be
filed for approval in first-line NSCLC in 2Q2006. Approval may come in 2H2006 and is
largely expected by investors. We believe the US market potential is $1.5 billion.
Erbitux
Erbitux (ImClone, Bristol-Myers Squibb, Merck KGaA) is approved for therapy of
relapsed colorectal cancer and cancer of the head and neck region. It is also being
evaluated in two separate Phase 3 clinical trials of first- and second-line NSCLC, with
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United States
data from both possibly available in 1Q2007. Assuming positive data and regulatory
review, the US sales potential may be > $1.5 billion. However, we view these trials as
high risk and have not assumed substantial sales for Erbitux in NSCLC in our model.
Telcyta
Telcyta (Telik) is a novel chemotherapy agent in Phase 2 trials for first- and second-line
NSCLC. Data from a Phase 3 study (ASSIST-2) comparing Telcyta versus Iressa in thirdline patients are expected in 2H2006. Survival is the primary endpoint. In second/thirdline NSCLC, Telcyta monotherapy has demonstrated encouraging response rate and
survival data in small Phase 2 trials. See Exhibit 80.
Exhibit 80: Selected targeted therapies for non-small cell lung cancer (NSCLC)
Drug
Company
Mechanism of Action
Status
2005 US
Comment
Sales (MM)
Tarceva
OSI Pharmaceuticals,
Genentech, Roche
Marketed
$275
Iressa
AstraZeneca
Marketed
NM
Avastin
Genentech / Roche
antibody to VEGFR
Marketed
$1,182
Erbitux
ImClone / Bristol-Myers
Squibb / Merck KGaA
antibody to EGFR
Marketed
$413
Approved for relapsed colorectal cancer & Head & Neck cancer
Limited use in NSCLC, potential P3 data in Q1/07
Telcyta
Telik
novel chemotherapy
Phase 3
--
Nexavar
Onyx / Bayer
Phase 3
--
Zactima
AstraZeneca
Phase 3
--
30% and 55% shares in 2nd and 3rd line NSCLC, respectively
P3 trials ongoing in 1st and 2nd line NSCLC
106
United States
Colorectal cancer
107
108
United States
United States
Colorectal cancer
Market and opportunity
Colorectal cancer (CRC) is the second-most common cause of cancer-related deaths in
the United States (after lung cancer). There are over 145,000 new cases and over 56,000
deaths per year (see Exhibit 81). Two targeted biotech drugs are approved for CRC:
Avastin (Genentech / Roche) and Erbitux (ImClone / Bristol-Myers Squibb / Merck
KGaA). We estimate that in 2005, the combined US sales in CRC for these two drugs
exceeded $1.3 billion. Avastin is preferred for first-line treatment while Erbitux holds
significant third-line share (see Exhibit 82). A third biologic, Panitumumab (Amgen /
Abgenix), is expected to launch in 2H2006, with estimated peak sales of $0.5 billion in
the initial indication of relapsed CRC.
Exhibit 81: Colorectal cancer key facts
145,000
56,000
Approved biologics
Avastin, Erbitux
>$1.3B
Panitumumab
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United States
Status
Approved
2005 US Sales ($MM)
Avastin
Erbitux
Panitumumab
Market
Market
February, 2004
February, 2004
H2/06 expected
1133
413
--
1295
679
--
~85%
~80%
--
Structure
Approved use(s)
Expected uses
1st and 2nd line colorectal cancer (P3) 3rd line colorectal cancer (H2/06 approval)
1st line colorectal cancer (P3)
Lung cancer (P3)
Pancreatic cancer (P3)
Head & neck cancer (P2), lung cancer (P2)
--
Notes:
MAb = monoclonal antibody
Disease overview
CRC is cancer of the large intestine that typically arises from gland-like polyps. The
cause of CRC is largely unknown. Age is a major risk factor for CRC. The incidence of
CRC begins to increase significantly between the ages of 40 and 50, with 90% of cases
occurring after age 50.
110
United States
Exhibit 83: Stages of colorectal cancer (CRC) by region and 5-year survival
Stage Description
I
Localized tumor
% of initial diagnoses
Colon
Rectum
23%
34%
5-Year survival
Colon
Rectum
93%
72%
II
31%
25%
72-85%
52%
III
26%
26%
44-64%
37%
IV
Distant metastases
20%
15%
8%
4%
100%
100%
Total
Source: SEER database, National Cancer Database, American Cancer Society, Goldman Sachs Research.
Treatment options
Exhibit 85 summarizes the common approaches to treating colorectal cancer.
Stage I-III (locoregional) CRC: The primary therapy is surgery. Over 95% of Stage I
tumors are cured with surgery. For Stage III (and certain high-risk Stage II) colon
cancer, surgery is followed by chemotherapy. For rectal cancer, chemotherapy plus
radiation is common after surgery for Stage II and III disease.
First line. The typical first line treatment regimen involves Avastin in
111
United States
Chemotherapy
Regimens
Chemotherapy Agents
5-flurouracil (5-FU)
Leukovorin (LV)
Irinotecan
Oxaliplatin
5-FU / LV
Bolus
Bolus
--
--
IFL
Bolus
Bolus
Infusion
--
FOLFIRI
Infusion
Infusion
Infusion
--
FOLFOX
Infusion
Infusion
--
Infusion
112
Avastin is approved for first-line CRC. A new indication for relapsed CRC is under
FDA review, with potential approval in 2H2006.
Erbitux is approved for relapsed CRC. Phase 3 trials for first- and second-line CRC
are ongoing.
Based on mixed efficacy data presented to date, we do not view PTK-787 (Novartis /
Schering AG), an oral inhibitor of VEGFR, to be a significant threat to Avastin.
United States
20%
Stage IV
Stage I-III
Stage IIb-III
Stage I-IIa
Chemotherapy +/ Avastin
Surgery
relapse
Surgery +/chemotherapy/radiation
Irinotecan
Erbitux +/- Irinotecan (13% share)
Avastin + Chemotherapy*
Company
Mechanism of Action
Status
2005 US
Sales (MM)
Comment
Avastin
Genentech / Roche
Humanized antibody to
VEGFR
Marketed
$1,182
Erbitux
ImClone / Bristol-Myers
Squibb / Merck KGaA
Chimeric antibody to
EGFR
Marketed
$413
Panitumumab
Amgen / Abgenix
Human antibody to
EGFR
--
PTK-787
Novartis / Schering AG
--
Matuzumab
--
Lapatinib
GlaxoSmithKline
--
Nexavar
Onyx / Bayer
Humanized antibody to
EGFR
Dual kinase inhibitor of
EGFR and HER2
Oral Inhibitor of Raf,
VEGFR
--
To date, P3 data in 1st and 2nd line CRC has not been
impressive
P2 studies ongoing in CRC
Possibly more convenient dosing than Erbitux
P2 studies ongoing in CRC
P3 trials in breast cancer ongoing
Marketed for kidney cancer
P2 trials ongoing in CRC
113
114
United States
United States
Breast cancer
115
116
United States
United States
Breast cancer
Market and opportunity
Breast cancer is the most common female cancer and the second most common cause of
cancer death in women (after lung cancer). In the United States, there are about 2 million
women who have been treated for breast cancer. In 2005, about 270,000 women were
diagnosed with breast cancer with 210,000 cases of invasive disease (stage I to IV) and
60,000 cases of in situ breast cancer (non-invasive). An estimated 40,000 American
women died from breast cancer in 2005. See Exhibit 87.
Exhibit 87: Breast cancer key terms
2,000,000
210,000
40,000
Chemotherapy, hormonal
therapy, biologics
Approved biologics
Herceptin
$747MM
Avastin (2H2006)
Genentechs Herceptin, which is approved for metastatic breast cancer and has shown
positive results in adjuvant breast cancer (expect 2H2006 approval), generated $747
million in US sales in 2005. We expect US sales of Herceptin to be approximately $1.1
billion in 2006, up 50% year-over-year, driven largely by adoption in the adjuvant
setting.
There is some off-label use of Avastin in metastatic breast cancer. This indication should
be added to the Avastin product label in 2H2006, we believe, with a >$1 billion sales
potential. A number of other biotech agents are in clinical trials and may expand the
market further.
family history. However, identified hereditary mutations are rare, with BRCA1 and
BRCA2 being the most common of such mutations. BRCA1 mutations tend to
develop hormone receptor negative tumors, which are more aggressive (see below).
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United States
Hormone receptor status: Breast cancers are dependent upon estrogen and / or
progesterone for growth. Breast cancer cells that over-express estrogen receptors
and/or progesterone receptors are hormone receptor positive (ER+ and / or PR+,
respectively). Conversely, those that lack such receptors are hormone receptor
negative (ER- and PR-). Hormone receptor positive breast cancer tends to grow
more slowly and have more treatment options (see below) and is, therefore,
associated with a better outcome than receptor negative disease.
(1)
Stage Description
0
Cancer cells are located within a duct and have not invaded the surrounding
breast tissue (also called ductal carcinoma in situ, DCIS)
I
5-year
Relative
(2)
Survival
100%
100%
IIA
Tumor is </= 2cm and has spread to 1-3 axillary lymph nodes or the tumor is
between 2-5 cm but has not spread to lymph nodes
92%
IIB
Tumor is between 2-5 cm and has spread to 1-3 axillary lymph nodes or the tumor
is >5cm but has not spread to lymph nodes
81%
IIIA
Tumor is < 5cm and has spread to 4-9 axillary lymph nodes or the tumor is >5 cm
and has spread to 1-9 lymph nodes
67%
IIIB
54%
IIIC
Tumor has spread to >9 axillary nodes or to nodes around the collar bone or to
internal mammary nodes on the same side of the body as the breast cancer
--
The tumor has spread to distant organs (e.g., bone, liver, lung).
20%
IV
(3)
Source: 2003 American Joint Committee on Cancer (AJCC) staging criteria for breast cancer, American
Cancer Society and Goldman Sachs Research.
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United States
Treatment
There are three main types of drug therapies for breast cancer: chemotherapy, hormonal
therapy and biologics. They may be used alone or in combination.
Taxotere) are commonly used agents (Exhibit 89). Traditional chemotherapy is more
likely to be used for ER- / PR- tumors and for patients with aggressive tumors that
have spread to internal organs.
Exhibit 89: Selected chemotherapy regimens for metastatic and adjuvant breast cancer
Biologics
Selected breast
cancer regimens
Metastatic
Avastin / Taxol
Herceptin / Taxane (3)
CMF
CAF / FAC
FEC
Gemzar / Taxol
Avastin (1)
Herceptin (2)
Anthracyclines
Taxane
(Doxorubicin or (Taxol or
or Epirubicin) Taxotere)
Other Chemotherapy
CTX
MTX Gem
5-FU
+/- LV
X
X
X
X
X
X
X
X
X
X
X
Xeloda / Taxotere
Anthracycline alone
Taxane alone
Xel
X
X
X
X
X
X
X
Adjuvant
AC-T, Herceptin
AC (+/- T)
CMF
FAC / CAF
FEC
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Biologics in bold
(1) Expect approval of Avastin in 1st line metastatic breast cancer in combination with Taxol in H2/06.
(2) Herceptin is only effective in breast tumors that overexpress HER2 (~20-30%).
(3) Herceptin + Taxane can be used with or without Carboplatin
CTX = cyclophosphamide; Gem = Gemzar; MTX = methotrexate; Xel = Xeloda;
5-FU +/- LV = 5-fluorouracil with or without leucovorin
Source: National Comprehensive Cancer Network, American Cancer Society and Goldman Sachs Research.
Biologics: Herceptin (Genentech / Roche), the only biologic approved for breast
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United States
breast cancer. There is an increase in side effects for the heart, especially when used
in combination with an anthracycline and cyclophosphamide. Based on recent strong
data, Herceptin has rapidly become a standard treatment for early stage disease after
surgery (adjuvant). We expect approval of this indication in 2H2006.
Exhibit 90: Selected hormonal therapies for breast cancer
Hormonal
Therapies
Antiestrogens
Examples
Comment
Faslodex
Aromatase
Inhibitors (AIs)
Arimidex, Femara,
Aromasin
LHRH agonists
Zoladex, Lupron
Peptide analogs of LHRH (luteinizing hormone releasing hormone) that suppress the
pituitary-ovarian axis, leading to a fall in estrogen levels.
Surgical removal of ovaries.
Ovariectomy
SERMs
Tamoxifen, Evista
Sex steroid
therapies
Progestins,
androgens, estrogens
120
United States
Exhibit 91: Selected approaches to treat hormone receptor positive metastatic breast cancer
Hormone receptor
positive
Hormonal therapy
Yes ~75%
No ~25%
Yes
25%
Avastin(1) + Taxol/Taxotere
or
other chemotherapy
Herceptin(2) + Taxol/Taxotere
Second line
Chemotherapy not yet attempted
Herceptin (2)
Third line
Chemotherapy not yet attempted
Liposomal doxorubicin
Experimental therapy
(1) Expect approval of Avastin + Taxol in H2/06.
(2) Herceptin is approved as a single agent in relapsed patients and in combination with Taxol in 1st line patients.
Source: American Cancer Society, National Comprehensive Cancer Network and Goldman Sachs Research.
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United States
Exhibit 92: Selected approaches to treat breast cancer after surgery (adjuvant therapy)
Node Negative,
low risk*
HRHR-
No
Therapy
HR+
HR+
Chemotherapy
+/- Herceptin**
Premeno.
Tamoxifen
or
Ovarian suppression
or
No therapy
Postmeno.
Premeno.
Postmeno.
AI
or
Tamoxifen -> AI
or
No therapy
Chemotherapy -> AI
or
Tamoxifen -> AI
* Lower risk: smaller tumor size (e.g., <2cm), no adverse histologic features; no lymph node involvement.
Higher risk: larger tumor size (e.g., >2cm), adverse histologic features; lymph node spread
** If HER2-positive (20-30% of cases), Herceptin may be beneficial
HR +/- = hormone receptor positive /negative; AI = Aromatase Inhibitor; ovarian suppression = ovariectomy or
LHRH antagonists; Premeno = premenopausal; Postmeno = postmenopausal
Source: Journal of Clinical Oncology, September 2003, & Goldman Sachs Research.
122
United States
Company
Mechanism of Action
Status
2005 US
Comment
Sales (MM)
Avastin
Genentech / Roche
humanized antibody to
VEGFR
Marketed
$1,182
Herceptin
Genentech / Roche
humanized antibody to
HER2
Marketed
$747
Lapatinib
GlaxoSmithKline
Phase 3
Everolimus
Novartis
mTOR inhibitor
Phase 2
Iressa
AstraZeneca
Phase 2
Lonafarnib
Schering Plough
Farnesyl Transferase
Inhibitor
Phase 2
PTK-787
Novartis / Schering AG
Inhibitor of VEGFR-1, 2
and 3
Phase 2
To date, P3 data in 1st and 2nd line colon cancer has not been
impressive
Nexavar
Onyx / Bayer
Phase 2
Sutent
Pfizer
Phase 2
Tarceva
OSI Pharmaceuticals,
Genentech, Roche
Phase 2
$275
123
124
United States
United States
Diabetes
125
126
United States
United States
Diabetes
Diabetes can broadly be defined as an insulin disorder. In Type 1 diabetes (about
10% of all diabetes), patients cannot produce insulin. In Type 2 diabetes, patients
do not adequately respond to insulin. Type 1 diabetes is typically diagnosed in
childhood, while Type 2 diabetes is more frequently diagnosed in adulthood.
Serious complications include cardiovascular and kidney disease and blindness.
Therapy
The primary treatment for Type 1 diabetes is insulin therapy. A second option became
available in 2005, with the introduction of Amylin Pharmaceuticals Symlin. There are
several classes of oral drugs for treating Type 2 diabetes. As patients progress, many
eventually also require insulin therapy.
Top-selling oral agents include the thiazolidinediones, Takedas Actos and Glaxos
Avandia, each with 2005 US sales of over $2 billion.
New Agents
Inhaled insulin is a new area of focus with the recent FDA approval of Pfizer/sanofi
Aventis/Nektars Exubera. Other companies including Eli Lilly, Alkermes,
Mannkind and others, are in clinical studies with inhaled insulin.
Events to watch
Phase III data and regulatory path for new thiazolidinediones and DPP4 inhibitors.
127
128
United States
United States
Market opportunity
Disease prevalence
According to the Centers for Disease Control and Prevention (CDC), there were
approximately 20.8 million people with diabetes in the United States in 2005, of whom
about 70% had been diagnosed (see Exhibit 94). Of these, between 90-95% have Type 2
diabetes and between 5-10% have Type 1 diabetes. The prevalence of diabetes has been
on the rise, driven in part by the growing global obesity epidemic. Between 1997-2003,
the number of new patients diagnosed with diabetes in the United States grew by 52%.
Globally, it is estimated that just under 200 million people have diabetes.
The primary treatment for Type 1 diabetes is insulin therapy. Type 2 diabetes is first
treated with diet and exercise, and then a series of oral medications, and as the disease
progresses, insulin therapy for many patients.
Exhibit 94: Diabetes key facts
Figures in millions
U.S. estimated prevalence statistics for 2005
Number of people with pre-diabetes
Number of people with diabetes
Diagnosed patients
41
21
Type 1
1.5 - 2
$3,454
5,643
4,167
629
562
$2,259
1,908
Type 2
14
Market
The US market for insulin was approximately $3.5 billion in 2005 (latest twelve months,
from Feb 2004 Jan 2005). The insulin market is dominated by Eli Lilly, Novo Nordisk
and sanofi-aventis (see Exhibit 95). The US market for oral diabetes medications was
approximately $5.6 billion over the same period. Among the larger oral products are the
thiozolidenediones, including Actos and Avandia.
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United States
Price per
1000 units
Humulin
(LLY)
Novolin
(NVO)
Humalog
(LLY)
Novolog
(NVO)
Lantus
(SNY)
LLY
Franchise
NVO
Franchise
Market
$21.07
n.a.
$71.88
$74.88
$66.85
--
--
$58.67
Lantus
33.9%
26.4%
30.2%
LLY
-12.3%
-8.3%
-4.6%
NVO
27.3%
22.2%
26.3%
Market
5.9%
8.7%
13.9%
Prescription growth
Humalog + Novolog +
Combo
Combo
-7.7%
90.3%
-0.3%
49.9%
2.5%
47.6%
2004
2005
2006 YTD
Humulin
-14.8%
-12.9%
-9.0%
Novolin
10.7%
9.7%
15.2%
November
December
January
-15.2%
-14.6%
-9.0%
8.1%
7.3%
15.2%
-0.1%
-0.7%
2.5%
41.9%
40.3%
47.6%
25.3%
21.2%
30.2%
-9.5%
-9.3%
-4.6%
19.6%
18.8%
26.3%
8.1%
7.1%
13.9%
Humulin
23.2%
22.9%
22.3%
21.9%
21.6%
21.5%
Novolin
19.1%
19.4%
19.4%
19.5%
19.5%
19.9%
Humalog
15.9%
15.6%
15.6%
15.4%
15.5%
15.1%
Novolog
12.4%
12.8%
13.0%
13.3%
13.5%
13.3%
Lantus
29.4%
29.3%
29.8%
29.9%
30.0%
30.3%
LLY
39.2%
38.5%
37.9%
37.3%
37.1%
36.5%
NVO
31.5%
32.2%
32.4%
32.7%
33.0%
33.2%
Market
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Market share
August
September
October
November
December
January
Market share
50.0%
40.0%
30.0%
20.0%
10.0%
Novolin
Humalog+Combo
Novolog+Combo
Jan-06
Nov-05
Jul-05
Sep-05
May-05
Jan-05
Mar-05
Nov-04
Jul-04
Sep-04
May-04
Jan-04
Mar-04
Nov-03
Jul-03
Sep-03
May-03
Jan-03
Mar-03
Nov-02
Jul-02
Humulin
Sep-02
May-02
Jan-02
Mar-02
Nov-01
0.0%
Lantus
Actos and Avandia are class leaders among oral agents. While the biguanide class
(metformin) is among the most frequently prescribed, the entry of generics has impacted
market dynamics (see Exhibits 96 and 97).
130
United States
$4,995
$5,062
% of total
74%
10%
11%
3%
1%
2%
0%
100%
Glucovance
(BMY)
Gluco Franchise
Actos
(BMY)
(LLY/Takeda)
Avandia
(GSK)
Other
Market
$3.02
$1.82
$2.16
--
$5.43
$4.80
--
$3.45
Most recent
increase
Jan-06
Jan-06
Jan-06
--
Sep-05
Nov-05
--
--
Prescription growth
Glucophage Glucophage XR
Glucovance
Gluco Franchise
Actos
Avandia1
Other2
Market
2004
2005
2006 YTD
-43.9%
-41.1%
-24.2%
-81.6%
-57.8%
-45.4%
-53.3%
-83.6%
-54.3%
-64.0%
-64.8%
-46.6%
5.6%
17.2%
28.5%
23.6%
25.2%
22.4%
23.1%
17.4%
24.2%
5.9%
13.4%
22.6%
November
December
January
-23.2%
-22.5%
-24.2%
-51.0%
-43.9%
-45.4%
-52.6%
-48.6%
-54.3%
-40.0%
-40.4%
-46.6%
16.4%
16.4%
28.5%
12.5%
16.1%
22.4%
22.1%
18.4%
24.2%
18.4%
16.3%
22.6%
Glucovance
Gluco Franchise
Actos
Avandia
Other
Market
0.4%
0.4%
0.3%
0.3%
0.3%
0.3%
1.8%
1.8%
1.6%
1.5%
1.4%
1.1%
10.4%
10.5%
9.9%
9.8%
10.1%
10.5%
14.1%
13.8%
13.3%
13.0%
13.7%
13.9%
73.6%
73.9%
75.1%
75.8%
74.9%
74.5%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Market share
Glucophage Glucophage XR
August
September
October
November
December
January
0.5%
0.4%
0.4%
0.4%
0.4%
0.3%
0.5%
0.5%
0.4%
0.4%
0.4%
0.3%
Market share
35%
30%
25%
20%
15%
10%
5%
Glucophage
Actos
Nov-05
Aug-05
Feb-05
May-05
Nov-04
Aug-04
Feb-04
May-04
Nov-03
Aug-03
Feb-03
Glucovance
May-03
Nov-02
Aug-02
Feb-02
Glucophage XR
May-02
Nov-01
Aug-01
Feb-01
May-01
Nov-00
Aug-00
Feb-00
May-00
Nov-99
Aug-99
Feb-99
May-99
Nov-98
Aug-98
0%
Avandia
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United States
Disease overview
General mechanics of glucose control
Insulin, a hormone produced in the beta cells of the pancreas, is required for the
metabolism of glucose (see Exhibit 98). Glucose is the primary energy source for the
brain. Insufficient blood glucose levels can result in coma and/or death. Consequently,
blood glucose levels are tightly regulated. Glucose metabolism is predominantly
controlled by the pancreas, the liver and the brain. When glucose rises in the bloodstream
following a meal, the pancreas secretes insulin. Insulin enables cells to use glucose. The
liver supplies glucose between meals, primarily by converting glycogen stores to glucose,
a process mediated by the hormone glucagon. When blood sugar is too low, the liver
converts glycogen stores to glucose. Too much sugar and too much insulin over a
protracted period are damaging.
Exhibit 98: Diabetes key terms
Term
Glucose
Glycogen
HbA1C
Hyperglycemia
Hypoglycemia
Insulin
Description
Simple sugar; chief energy source for the body
Main form in which carbohydrates are stored in the body
Metric used for measuring the level of glucose in the blood.
Refers to the level of glycated hemoglobin.
Abnormally high concentration of glucose in the blood
Abnormally low concentration of glucose in the blood
Hormone that enables glucose to be used
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United States
Account for ~ 65% of deaths in diabetics. Adults with diabetes have heart
disease death rates about 2-4 times higher than adults without diabetes. The
risk for stroke is 2-4 times higher.
~ 73% of diabetic adults have high blood pressure or use medication for
hypertension.
Diabetic retinopathy causes 12,000-24,000 new cases of blindness each year.
Leading cause of new cases of blindness in adults aged 20-74 years.
Kidney disease
Leading cause of kidney failure; accounted for 44% of new cases in 2002.
Source: Center for Disease Control; National Diabetes Fact Sheet, 2005.
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United States
Treatment
Diagnosis
There are three primary tests used to diagnose diabetes (see Exhibit 100), of which the
oral glucose tolerance test (OGTT) is the most sensitive.
Exhibit 100:
Test
Casual plasma glucose
Fasting plasma glucose (FPG)
Oral glucose tolerance test
Description
Blood glucose at any time of day without regard to time
since last meal
Fasting => no caloric intake for at least 8 hours
Adults fast overnight and then receive a bolus of 75g
glucose in oral solution. Blood glucose is measured at
< 2hours after ingestion and at 2 hours after ingestion.
Source: American Diabetes Association. Diagnosis and classification of Diabetes mellitus. Diabetes Care;
29: S43-S48.
Treatment goals
The main goal of diabetes Type 1 and Type 2 therapy is to attain blood sugar or glycemic
control. The primary means of assessing long-term glucose is a measure called glycated
hemoglobin A1c (HbA1c). Typically it takes three to four months to obtain the full
impact of agents on HbA1c levels. This is so because it is based on the glucose carried on
the hemoglobin of red blood cells. Red blood cells turn over every 120 days on average.
Long-term studies in both Type 1 and Type 2 patients have demonstrated that reductions
in HbA1c are associated with reductions in a broad range of co-morbid conditions.
Without aggressive management, HbA1c levels tend to increase with time. And as longterm follow-up studies show, even with intensive management, HbA1c levels increase,
but more modestly, over time. Fasting and post-meal or post-prandial glucose levels are
also an important measure of underlying diabetes.
According to the American Diabetes Association (ADA), the HbA1c goal for patients in
general is to get to HbA1c levels at or below 7%. Based largely on the results of two
landmark studies, the DCCT study and follow-on EDIC study in Type 1 patients and the
UKPDS study in Type 2 patients, the trend has been toward more aggressive insulin use
among insulin-using patients. Data from these studies and others suggest that an
approximate 1% reduction in HbA1C translates to roughly a 40% reduction in diabetic
complications. While impacting HbA1c levels, the cost of intensive insulin management
has been increased weight gain and an elevated risk of hypoglycemia.
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United States
(following a meal) hyperglycemia. Insulin pumps are also used. For all patients, good
glucose monitoring is key.
Symlin (Amylin) is approved for use with insulin in Type 1 and Type 2 patients. A
synthetic form of the natural hormone amylin, Symlin works in concert with insulin to
regulate glucose. Clinical data indicate that Symlin can improve blood sugar control with
lower insulin levels. Symlin also promotes weight loss. However, because it increases the
risk of hypoglycemia and engenders 2-3 injections on top of a similar number of insulin
injections plus intensive glucose monitoring, its use has been limited.
Exubera (Pfizer, Aventis) was approved by the FDA in January 2006, as the first inhaled
form of insulin (rapid-acting) for the treatment of Type 1 and Type 2 diabetes. Uptake is
likely to be strong, particularly among patients in need of insulin therapy who are averse
to more needle-intensive regimens. Commercial launch is anticipated in mid-2006.
Sulfonylureas
The oldest class, the sulfonylureas, work by increasing insulin secretion. These agents
work only when there are sufficient insulin-producing B-cells in the pancreas.
Sulfonylureas are indicated in patients who have failed diet and exercise therapy alone.
Commonly used sulfonylureas include short acting agent, Tolbutamide, intermediate
acting agents, Glipizide and Glicazide, and long-acting agents, Chlorpropamide,
Glyburide and Glimepiride.
Meglitinides
The meglitinides act like the sulfonylureas in that they stimulate insulin secretion.
However, they bind to different receptors and are generally more rapidly absorbed and
cleared. There are only two commercially available meglitinides: Novo Nordisks
Repaglinide (Prandin) and Novartis Nateglinide (Starlix). Repaglinide can be used in
treating patients with renal impairment.
Biguanides
The biguanide class features one main compound, Metformin, sold by Bristol-Myers
Squibb, and is now available in generic form by a range of suppliers. Metformin
increases insulin activity but does not impact pancreatic beta cells. A central activity of
metformin is to lower glucose production by the liver by potentiating insulin activity.
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(alpha)-glucosidase inhibitors
Acarbose is the main agent in this category. The (alpha)-glucosidase inhibitors work by
breaking down oligosaccharides into monosaccharides in the small intestine, thereby
lowering post-meal (prandial) glucose and delaying glucose absorption. While acarbose
is effective, it is difficult for some patients to tolerate because of flatulence.
Thiazolidinediones (TZDs)
The thiazolidinediones are the newest class of oral diabetic drugs and are broadly
thought of as insulin potentiating agents or insulin sensitizers. This class of agents
includes GlaxoSmithKline's rosiglitazone (Avandia) and Takedas pioglitazone (Actos).
The thiazolidinediones work through a receptor called the peroxisome proliferation
activated receptor gamma (PPARy), which regulates transcription factors for genes
involved in insulin action and lipid metabolism. These agents are thought to enhance
insulins ability to cause glucose uptake in muscle tissue. Some thiazolidinediones have
also demonstrated positive effects on plasma lipids, including raising HDL and lowering
LDL cholesterol. Side effects common to the class include weight gain, fluid retention
and mild general swelling.
Insulins
Insulins are used to treat type-2 diabetes patients who have failed oral agents. The
advantages of insulin are that that it produces a profound blood sugar lowering effect, has
a long safety profile, and with the advent of long- and short-acting forms, has become
easier to use. The disadvantages are that it is injectable (or requires insulin pumps),
dosing must be titrated to meals, there is risk of hypoglycemia and insulin causes weight
gain. Despite the drawbacks, clinical studies suggest that earlier and more aggressive use
of insulin is warranted. However, intensive insulin management comes at a cost: obesity
and hypoglycemia risk.
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Pre-diabetics
Type 2 diabetics
3 million
Stage 2: Monotherapy with oral
medications:
Sulfonylureas (common)
Biguanides (common)
Thiazolidinediones (TZDs)
Alpha-glucosidase inhibitors
Failure to meet
A1C goal
Failure to meet
A1C goal
Failure to meet
A1C goal
Failure to meet
A1C goal
Stage 4b: Insulin therapy +/oral medications
>3 million
Source: Clinical literature, American Diabetes Association, Goldman Sachs Research estimates.
137
Exhibit 102:
United States
Generic name
Brand name
Company
Thiazolidinediones (TZDs) - Increase the sensitivity of the body to insulin
Pioglitazone
Actos
Takeda
Rosiglitazone
Avandia
GlaxoSmithKline
Biguanides - Increase the action of insulin
Metformin
Glucophage
Metformin
Glucophage XR
Metformin
Generic
Bristol-Myers Squibb
Bristol-Myers Squibb
Teva, Andrx
Date introduced
1999
1999
1995
2000
2001
2005
2005
Mylan
Barr Labs
Pfizer
Pfizer
Pfizer
Aventis
Pfizer
Pfizer
Aventis
Novo Nordisk
Novartis
1950s
1990s
1995
1950s
1980s
1980s
1980s
1995
1997
2000
1997
2000
Combinations:
Pioglitazone + Metformin
Rosiglitazone + Metformin
Rosiglitazone + glimepiride
Metformin + Glyburide
Metformin + Glipizide
2005
2002
2006
2000
2002
Actoplus
Avandamet
Avandaryl
Glucovance
Metaglip
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Class
Established mechanisms
Mechanism
Advantage
Disadvantage
Sulfonylureas
Biguanides
Inexpensive
No weight gain, reasonable safety profile
except rare occurance of lactic acidosis,
relatively inexpensive with generics
Thiazolidinediones (TZDs)
Insulin
Agents/companies
United States
Symlin (Amylin)
Inhaled insulin
Agents in the pipeline
Enhanced TZDs dual/pan (PPARS)
DPP4 inhibitors
Long-acting GLP-1s
Still injectable
Exubera (Pfizer/sanofi-aventis/Nektar)
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Pipeline
A pipeline of selected new agents currently in development is shown in Exhibit 104
Exhibit 104: Select new agents in development for Type 2 diabetes
Candidate
Phase
Company
DUAL/PAN PPARS
Galida
LY519818
R483
Naveglitazar
677954
625019
LY 929
III
II
II
II
II
I
I
AstraZeneca
Eli Lilly
Roche
Ligand
GlaxoSmithKline
GlaxoSmithKline
Ligand / Eli Lilly
DPP4 Inhibitors
Galvus (LAF 237)
Januvia (MK-431)
Denagliptin
III
III
II
Novartis
Merck
GlaxoSmithKline
GLP-1
Liraglutide (NN2211)
Exenatide LAR
PC-DACTM: Exendin-4
716155
III (1)
II
I/II
I
Novo Nordisk
Amylin / Alkermes / Eli Lilly
Conjuchem / Amylin / Alkermes / Eli Lilly
GlaxoSmithKline / Human Genome Sciences
II
GlaxoSmithKline
II
GlaxoSmithKline
Novo Nordisk
Footnotes:
Phase III to start in Feb 2006.
(1)
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retention) and weight gain have been side effects that have plagued the class. The most
advanced agent, Bristol-Myers Squibbs Pargluva, received an approvable letter from the
FDA requesting additional cardiovascular safety data because of concern over potential
cardiovascular risks in October 2005.
AstraZeneca: Galida
Galida (tesaglitazar) is currently in Phase III trials. The GALLANT program comprises
10 ongoing studies. AstraZeneca announced that data from these trials would be
presented at its Business Review Day on June 8, 2006. Assuming positive data, the
company plans to file an NDA in 2007. Discussions remain ongoing with the regulatory
authorities; early 2007 safety data will be key to further development.
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(versus twice-daily for Byetta). Novo Nordisk announced positive top-line results from a
165-patient, 14-week, Phase IIb monotherapy study in November, 2005. Patients had
previously been treated with either diet/exercise or with a single, oral antibiotic. The data
indicated that HbA1c was reduced by 1.5 2.0% versus placebo from a baseline of
around 8.5%. At the highest dose, over 45% of patients achieved the target of HbA1c
7%, versus less than 8% for the placebo group. Furthermore, at the highest dose, body
weight was reduced by approximately 3kg from a baseline of around 90kg. The
incidence of nausea was 5-10%, versus 30-40% in various Byetta studies.
The detailed results from the trial may be expected at a scientific meeting in 2006 and
potential launch may occur in the 2009 timeframe. Based on this preliminary data from a
relatively short, small study, Liraglutide appears to be at least as effective as Amylins
Byetta and has a once-daily versus twice-daily dosing schedule. However, given that
Amylins long-acting release (LAR) formulation of Byetta, which is currently in Phase II
trials, is expected to launch around the same time period, this may negatively affect the
sales outlook for Liraglutide.
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The disadvantages may be lack of effect on weight (GLP-1s induce weight loss) and
importantly, concern about more systemic side effects, as the DPP4 enzyme is
ubiquitous.
announced that it expects FDA action on its NDA for Januvia by mid-October. To date,
the company has not disclosed much about the extend of its Phase III program, likely
indications or side effects, possibly due to the competitive nature of this market. Results
from the Phase III trials are anticipated at the American Diabetes Association conference
in June.
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United States
United States
Hepatitis C
145
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United States
Hepatitis C
The hepatitis C virus (HCV) infects about 4 million people in the United States and
is thought to have infected over 170 million people worldwide. Chronic infection
occurs in 54 80% of cases and, over a 20 year period, leads to cirrhosis in about
10-20% of cases and liver cancer in a small fragment of patients. Despite broad
disease prevalence, there are limited treatments available.
Therapy
The approved therapies for hepatitis C are alpha interferon and ribavirin. Pegylated (long
acting alpha interferon) and combination alpha interferon/ribavirin therapies are also
available. US sales of pegylated interferons amounted to $724 million in 2005 (include
sales for non-hepatitis C indications). Treatment results in viral cure in only about 4050% of patients. Treatment uptake has been limited because of severe side-effects.
New Agents
For the first time, new agents that directly attack the hepatitis C virus (as opposed to
modifying the immune response to it) are in development. It is hoped that hepatitis C can
be better treated by directly attacking the virus and precluding its ability to replicate and
infect other cells. Companies are also developing novel immunomodulatory treatments.
Vertexs hepatitis C protease inhibitor, VX-950, looks to be among the most potent
viral inhibitors in development, based on early clinical data. Other companies
developing hepatitis C protease inhibitors include Schering Plough and
Gilead/Achillion.
Events to watch
Clinical and medical data from Vertex, Idenix, ViroPharma, Schering-Plough and
others.
Key meetings: Digestive Disease Week meeting in April, American Association for
the Study of Liver Disease (AASLD) in October 2006.
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Market opportunity
Fewer than half the patients with chronic hepatitis C infection are effectively treated,
partly due to limited therapeutic choices, lack of therapeutic specificity (no direct antivirals) and high side-effects (see Exhibit 105).
New direct anti-viral therapies and/or better immunomodulatory therapies may
significantly expand treatment options and the market over time. As with other viral
disorders such as AIDS, we think it likely that a multi-therapy approach would be
adopted. Several agents could address a multi-billion dollar commercial market.
Exhibit 105: Hepatitis C at a glance
Hepatitis C at a glance*
Number of infected patients (U.S.)
U.S. sales of top agents (alpha interferon, ribavirin)**
3.9 million
$1.1 billion
Estimated patients with chronic hepatitis C infection (54 - 80% of those infected)
Patients estimated to progress to cirrhosis over an average of 20 years (~ 20% of chronically infected)
Annual new patients progressing to decompensated liver disease (2-5% of cirrhosis patients)
Base population with decompensated liver disease (10-20% of cirrhosis patients)
2.1-3.1 million
420,000-620,000
8,400-31,000
42,000-124,000
Annual new patients progressing to liver cancer (0.5 - 3.0% of cirrhosis patients)
2,100-18,600
8,000-13,000
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Disease overview
Hepatitis C Virus
The hepatitis C virus is a blood-borne virus. The most common modes of infection are
through intravenous drug use, blood or organ transplant prior to 1992, occupational
hazard and less commonly, through sexual intercourse and via maternal transmission.
The rate of new infection has decreased dramatically since the early 1990s, with effective
blood screening tests. Given the roughly 20 year period over which the infection becomes
overtly manifest as liver disease, there is concern about identifying individuals who have
been infected in prior decades. The prevalence of patients with overt liver disease is
expected to increase in the coming decades.
There are six different genotypes of the hepatitis C virus (see Exhibit 106). The most
common, and the most difficult to treat is genotype 1, which is thought to account for
roughly 70-75% of cases in the United States. Other common genotypes include
genotypes 2 and 3. These genotypes are typically more amenable to treatment. Several
additional factors are associated with a more positive prognosis following infection,
including a younger age at infection, female gender, Caucasian race and intact immune
function at infection.
Exhibit 106: Key terms to know in Hepatitis C
Term
Cirrhoris
HCV RNA testing
HCV genotype
Hepatocytes
Seroconversion
Sustained viral response (SVR)
Early virologic response (EVR)
Viral reduction
Description
Liver disease (characterized by fibrotic tissue and dysfunctional hepatocytes)
Method of quantifying viral levels
1 of 6 main variations in HCV RNA (genetic) sequence
Liver cells
Development of antibodies to HCV in the serum
Absence of HCV RNA 6 months after treatment ends
2 log drop in viral load 12 weeks into treatment, good predictor of SVR
Degree of reduced virus, typically expressed in logs (1 log = a tenfold decrease)
Diagnosis
Hepatitis C is diagnosed by the presence of hepatitis C RNA, or HCV RNA (genetic
material) in a patients blood serum. HCV RNA is measured in logs (a log-10 change is a
10-fold increase or decrease). At-risk, or symptomatic patients, are typically first tested
for antibodies to the hepatitis C virus, which are typically detectable within 7-12 weeks
of initial infection. If antibodies are present, patients are then tested to quantify the
amount of virus present.
New diagnostic assays have significantly increased the level of viral quantification. In
patients with chronic infection, viral loads typically range from 103 to 107genomes per ml
of serum. Patients are also tested for the genotype of virus present, as the genotype will
influence treatment decisions.
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Elevated serum aminotransferase liver enzymes (ALT) levels are indicative of liver
damage, but this marker varies significantly among patients. Moreover, several factors
in addition to hepatitis can cause enzyme elevations. Liver biopsies are the only definitive
way to assess the extent of liver fibrosis and inflammatory damage. Liver biopsies are
frequently not done early because they are invasive and involve some sampling error.
Disease course
Infection with HCV results in acute hepatitis, which is typically asymptomatic. Clinical
data suggest that between 55 80% of patients with acute hepatitis C develop chronic
infection (see Exhibit 107). Chronic infection is defined as the persistence of HCV RNA
for 6 months.
Typically, it takes roughly two decades for the infection to become manifest as overt liver
disease, and progression varies significantly among patients. Even where liver disease
eventually develops, most patients are typically asymptomatic during the process.
However, the disease can also become manifest during this period as hematological or
autoimmune dysfunction. Over a period of roughly 20 years, an estimated 10-20% of
infected patients will develop cirrhosis of the liver. Cirrhosis is characterized by the loss
of functional liver cells and the emergence of fibrous tissue in the liver. Decompensated
cirrhosis is advanced liver disease, which has a five-year survival rate of around 50%.
Liver transplantation is the only effective therapy at this stage; however, recurrent
infection is frequent. Approximately 1-3% of patients with hepatitis C infection develop
liver cancer each year. The Center for Disease Control estimates that 8,000 to 13,000
deaths occur each year from chronic HCV infection.
Exhibit 107:
Patients who progress to cirrhosis over avg. of 20 yrs: 420 620,000 (~ 20%)
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Treatment
Treatment goals sustained viral response
Treatment guidelines are provided by the American Association for the Study of Liver
Disease (AASLD). The primary goal of treatment is to prevent complications of the virus
by eradicating it. Simply put, the goal of therapy is to achieve a sustained viral response
or SVR, defined as the absence of HCV RNA during, and six months after, the end of
treatment.
Several clinical studies have indicated that an early virologic response (EVR) is often
predictive of ultimately achieving a sustained virologic response. An EVR is defined in
some studies as a 2-log drop 12 weeks into therapy. As mentioned, a log-10 change is a
10-fold increase or decrease. Patients whose HCV RNA levels stabilize on treatment are
referred to as non-responders. Partial responders are patients whose viral levels
decline but never become undetectable.
Recommended dose
180 mcg SQ once weekly, regardless of weight
1.5mcg/kg SQ once weekly
800-1200mg PO daily (in 2 divided doses), dose depending on infection, genotype, weight
Interferon:
alfa-2a (Roferon-A, Roche)
alfa-2b (Intron-A, Schering-Plough)
consensus (Infergen, InterMune)
3mU SQ t.i.w.
3mU SQ t.i.w.
9mcg SQ t.i.w.; 15mcg t.i.w. in non-responders
Abbreviations: kd, kilodaltons; mcg, micrograms; SQ, subcutaneously; kg, kilograms; mU, million units; t.i.w. three times a week; PO, by mouth; mg, milligrams
Choice of therapy, dosing and duration of administration are determined in large part by
the hepatitis C genotype, level of liver fibrosis, drug tolerability and compliance. For
genotype 1, the standard of care is a combination of weekly subcutaneous injections of
either Pegasys or Peg-Intron, and oral ribavirin. An estimated 40-50% of genotype-1
patients are able to achieve a sustained viral response. The rates are higher (60-80%) for
genotypes 2 and 3.
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For genotype-1 HCV infection, treatment should be planned for 48 weeks, using 180
mcg of Pegasys or 1.5mcg/kg of Peg-Intron, both administered subcutaneously once
weekly, along with ribavirin doses of either 1,000 mg for those 75kg in weight, or
of 1,200 mg for those > 75kg in weight.
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Pipeline
A number of potential first in class agents are in development for hepatitis C (see
Exhibit 109). New direct anti-viral therapies targeting different viral enzymes that
are necessary for viral replication have shown early evidence of efficacy. Improved
formulations of alpha interferon and other new immunomodulatory approaches are
also in development.
Exhibit 109:
PRODUCT CANDIDATES
COMPANY
PARTNER
POLYMERASE INHIBITORS
Valopicitabine (NM283)
Idenix
Novartis (option) II
Polymerase inhibitor
HCV-796
XTL-2125
ViroPharma
XTL-Biopharmaceuticals
Wyeth
Ib
I
PROTEASE INHIBITORS
SCH 503034
VX-950
GS9132
Schering-Plough
Vertex
Gilead
II
II
I
Protease inhibitor
Protease inhibitor
Protease inhibitor
CASPASE INHIBITORS
IDN-6556
Pfizer
Achillion
II
Caspase inhibitor
II
GLUCOSIDASE INHIBITORS
Celgosivir (MX-3253)
Migenix
II
Glucosidase I inhibitor
IMMUNOMODULATORS
r-interferon beta
Zadaxin (thymosin alpha 1)
Serono
SciClone Pharmaceuticals
III
III
Immunomodulator
Immunomodulator
II
II
II
II
I
I
I
I
I
I
Immunomodulator
Immunomodulator
Immunomodulator
Immunomodulator
Immunomodulator
Immunomodulator
Immunomodulator
Immunomodulator
Immunomodulator
IFN alpha-2b XL
HCV ANTIBODIES
Civacir
XTL-6865
NABI biopharmaceuticals
XTL-Biopharmaceuticals
II
I
Valeant
Endo Pharmaceuticals
United Therapeutics
Bioenvision
AVI BioPharma
Transition Therapeutics
Romark
Peregrine Pharmaceuticals
III
II
II
II
I/II
I/II
I
I
Ribavirin prodrug
Entry inhibitor
Inhibits viral ion channel formation
Replication inihibitor
Protein synthesis inhibitor
Inteferon enhancer
Thiazolide; replication inhibitor
Replication inihibitor
HCV VACCINES
IC41
INNO101
GI-5005
HCV/MF59 vaccine
Intercell
Innogenetics
GlobeImmune
Chiron
II
II
I
I
Vaccine
Vaccine
Vaccine
Vaccine
Sigma-Tau in
Europe
Novartis
OctoPlus
Solvay
CSL
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155
Company
Peg-Intron + Rebetol
ScheringPlough
Marketed 72 weeks(1)
1530
Pegasys + Ribavirin
Roche
Marketed 72 weeks(1)
453 (2)
Albuferon + Ribavirin
Human
Genome
Sciences
Vertex
II
72 weeks(3)
71 (4)
IB
14 days
34
Undetectable HCV
RNA at 24 weeks
post-treatment
Undetectable HCV
RNA < 50IU/mL on or
after week 68
Undetectable virus at
24 weeks after the
end of therapy
Viral load reduction
VX-950 + pegylated
interferon
Vertex
IB
14 days
20
ScheringPlough
14 days
ScheringPlough
Valopicitabine
(polymerase inhibitor) +
pegylated interferon
HCV-796 (polymerase
inhibitor)
Idenix
ViroPharma
VX-950 (protease
inhibitor)
Phase
Duration
Number Endpoint
patients
Drug
Select dose
Select results
Interferon-nave
1.5mcg/kg
Interferon-nave
750mg every 8h
61
14 days
32
IIB
48 weeks
175
800mg (6)
IB
14 days
96
Treatment-nave
1000 mg (6)
(1)
United States
Multiple doses
Failed to respond to
interferon alpha-based
treatment
All genotype 1; mix of 750mg every 8h (6)
treatment-nave and
failures to interferonbased regimes(5)
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Exhibit 110: Summary of select clinical trials for selected Hepatitis C agents
Results not shown for all dose cohorts; Pegyasys and Peg-Intron represent current standard-of-care
United States
Enrollment criteria
Key considerations include genotype and prior treatment experience. Patients who have
previously failed interferon therapy are typically harder to treat. Patients with genotype-1
HCV have historically been harder to treat. Patients co-infected with HIV are more
challenging.
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had been measured in number of copies of virus per milliliter (mL) of blood. There is no
standard conversion formula for converting IU/mL to and from viral copies/mL. The
most sensitive qualitative PCR assays currently can measure up to 50 IU/mL. Newer
technology, transcription mediated amplification, can measure up to 5-10 IU/mL.
Endpoints
The primary endpoint of clinical studies will be an assessment of patients who get to
sustained viral suppression during and at six months after treatment. Treatment durations
may vary between trials. Alpha interferon in genotype-1 patients is typically administered
for 48 weeks with follow up 26 weeks after that. Anti-viral agents in clinical studies, such
as VX-950, may assess shorter treatment durations.
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Rheumatoid arthritis
159
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United States
Rheumatoid arthritis
Rheumatoid arthritis (RA) is an immune-mediated inflammatory disease that
primarily affects the joints. RA usually strikes persons between 20-50 years of age,
and affects women three times as often as men. Patients have redness, pain and
swelling primarily of the hands and wrists, which can lead to disability and
deformity.
Therapy
Patients with RA are treated with drugs to reduce inflammation, which primarily relieve
pain and swelling. Disease modifying anti-rheumatic drugs (DMARDs) are also
prescribed to slow or stop disease progression. DMARDs can be small molecules or
biologics. The most common biologic DMARDs for RA are inhibitors of tumor necrosis
factor (TNF), an important inflammatory mediator. Three TNF blockers are available
commercially, Enbrel (AMGN), Remicade (JNJ) and Humira (ABT), with combined
worldwide sales of approximately $6.5B in 2005.
New Agents
Events to watch
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Penetration of new agents (Orencia vs. Rituxan) and impact on market size
and sales of TNF-blockers
$6.5 billion WW
2MM U.S./5MM WW
1.6MM
0.4-0.5MM
6
3:1
20s - 50s
Rheumatology is the study of inflammatory joint and muscle disease. RA is the most
common rheumatologic condition (see Exhibit 115). It occurs in approximately 0.8% of
the worldwide population. Approximately 2.1 million Americans and over 5 million
patients globally have the disease. Approximately 1.6 million people in the United States
have been diagnosed with the disease and are undergoing treatment. The combined direct
and indirect cost of RA in the United States is estimated to be $20 billion per year.
However, the physician market is fairly concentrated, with fewer than 5,000 US
rheumatologists writing the majority of prescriptions.
RA most commonly develops in the third to fifth decades of life. Approximately 80% of
total cases occur between the ages of 35 and 50. The incidence is higher among women
than men (3:1 ratio) and increases with age. At age 65, nearly 5% of women and 2% of
men have the disease. Thirty-four percent of the patients seeking treatment are 65 years
of age or older.
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Inflammation of joints
B lymphocytes
CRP
Cytokines
DMARDs
(Disease Modifying Anti-Rheumatic Drugs) - any drug that slows disease progression in RA
ESR
Metalloprotease
Enzyme that cleaves other proteins, characterized by a metal ion at its active site.
NSAIDs
(Non-Steroidal Anti-Inflammatory Drugs) - drugs that inhibit inflammation by interfering with production of
prostaglandins
Prostaglandins
Rheumatology
Synovium
T lymphocytes
White blood cells that fight infection by directly attacking cells and releasing cytokines
Disease overview
RA is a chronic, immune-mediated disorder that primarily involves the joints. The
disease typically starts with stiffness, pain and swelling of the small joints of the hands
and feet. However, any other joint of the body may be affected. Sometimes, other organs,
such as eyes, heart, lungs, and blood vessels may be involved. RA can evolve over years,
but joint damage can occur as early as three to six months after onset. Approximately
30% of patients have radiographic bone lesions at the time of diagnosis, increasing to
60% at two years. Active inflammation of the joints that lasts for a year or more after
onset can lead to irreversible damage. Therefore, early and aggressive therapy is
important.
Patients typically present to a primary care physician complaining of joint pain and
swelling. Diagnosis is based on criteria established by the American College of
Rheumatology (see Exhibit 113). A patient must have at least four of the six criteria, with
symptoms lasting at least six weeks. This excludes certain patients who may have an
acute arthritis due to other causes.
Exhibit 113: American College of Rheumatology criteria for RA
Characteristics
Morning stiffness
Arthritis of three joint areas
Arthritis of hand joints
Symmetric arthritis
Positive rheumatoid factor
Radiographic changes
Description
lasting at least one hour
fingers, wrist, elbow, knee, ankle or foot; assoc with swelling
fingers or wrist
has to be bilateral (both hands or both knees, etc)
a blood marker for RA
bony erosions around joints
Certain blood tests can be helpful in establishing the diagnosis of RA. The erythrocyte
sedimentation rate (ESR) and C-reactive protein (CRP) are non-specific measures of
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inflammation in the body, and are often elevated in RA. Another, more specific test for
RA is the rheumatoid factor (RF). RF is an antibody that is produced in several
rheumatologic diseases, but most commonly in RA.
The cause of RA is not known. However, it involves complex interactions of various
cells, cytokines and enzymes, many of which can be targets for drug development (see
Exhibit 114). It is believed that the disease begins when an inciting antigen gains access
to the joint, triggering an immune response. The antigen could be either an exogenous
substance, such as a bacterial or viral protein, or one of the patients own proteins. The
antigenic stimulus activates a type of white blood cell, CD4+ T-lymphocytes (T-cells),
which causes inflammation in the synovium (tissue that lines joint space). (selected
biologic targets in bold)
Exhibit 114:
Target
CCR1
Mechanism
Attract cells to sites of inflammation
Complement C5a
Interleukin 1 (IL1)
Interleukin 8 (IL8)
Interleukin 10 (IL10)
Interleukin 12 (IL12)
Interleukin 15 (IL15)
Interleukin 16 (IL16)
Interleukin 17 (IL17)
Interleukin 18 (IL18)
Interleukin 18 (IL18)
Leukotriennes
RANK ligand
Activates osteoclasts
Signaling pathways
P3 MAP kinase
Nuclear factor kappa B (NFB)
Tumor necrosis factor alpha (TNF) Activate T cells, trigger production of cytokines (including IL-1), stimulate
fibroblasts/macrophages to release destructive enzymes, stimulate
development of osteoclasts which destroy bone
TNF
Once the CD4+ T-cells become activated, a complex and poorly understood cascade of
biological events take place. Antigen-activated T-cells stimulate numerous cell types,
including macrophages, B-lymphocytes, fibroblasts, chondrocytes and osteoclasts.
Activated macrophages secrete cytokines (inflammatory mediators), such as interleukin1 (IL-1), IL-6, IL-15 and Tumor necrosis factor-alpha (TNF-). T-cells directly secrete
164
United States
many of the same cytokines. IL-1 and TNF- probably have a primary role in the disease
process and are found abundantly in inflamed synovial tissue of RA patients. Cytokines
trigger other cells, such as fibroblasts, chondrocytes and osteoclasts, to release
degradative enzymes (e.g., metalloproteinases and collagenases) into the joint space.
These enzymes digest local bone and connective tissues, eroding the architecture of the
joint. Neutrophils, recruited under the influence of chemokines, also secrete damaging
proteolytic (protein-degrading) enzymes into the joint space. The net effect of this
cascade is inflammation of the joint followed by its destruction.
T-cells also activate B-cells which develop into plasma cells that secrete high numbers of
antibodies. The B-cells can have a direct effect on the synovium (thin layer of tissue that
lines the joint space) and the abnormal antibodies can cross-react with the synovium. Bcells may secrete a characteristic antibody known as rheumatoid factor (RF). The role of
rheumatoid factor in the disease process is not fully understood; however, it appears to
act, in part, through activation of complement proteins. Other antibodies, including
Immunoglobulin G and M (IgG and IgM) subtypes are elevated. Complement proteins
have multiple pro-inflammatory effects on blood vessels and leukocytes (e.g.,
macrophages), thereby causing release of inflammatory prostaglandins and cytokines.
Complement factor C5, a central component of the complement pathway, has a critical
role in sustaining inflammation. Biologics on the market and in development target many
of these intermediate steps of the inflammatory cascade.
Description
Autoimmune arthritis, typically affects spine and hips
Autoimmune inflammatory diseases of colon (Crohn's disease and Ulcerative colitis)
Similar symptoms, early onset (<18yrs old)
Similar to RA, associated with typical skin lesions of psoriasis
Autoimmune arthritis, typically affects hands, wrists, knees, feet and ankles
Autoimmune disease with rash, joint and other symptoms, usually affects young women
Ankylosing spondylitis (AS) is an auto-immune disease that primarily affects the spine,
hips, shoulders and knees. Unlike RA, AS is a disease not of joints but of the tendons and
ligaments that surround the joints. AS primarily affects patients in their 20s, and affects
men three times as often as women. Approximately 400,000 patients are affected in the
United States.
Crohns disease and ulcerative colitis are auto-immune diseases that affect the
intestines. Patients have erosions in the surface layers of the colon, leading to poor
absorption of nutrients and bloody diarrhea. Approximately 0.5-1 million patients in the
United States are affected.
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Juvenile RA, or juvenile idiopathic arthritis, has similar features to RA and occurs in
patients under 18 years old. About half of patients will have inflammatory arthritis
affecting five or fewer joints, about 30-40% have involvement of more than five joints,
and the remainder have a systemic version of the disease with arthritis, fever, and a
diffuse rash. About 50,000 to 300,000 people have the disease in the United States.
Psoriatic arthritis, like RA, is a disease of adulthood. In addition to the skin lesions of
affects the skin, joints, kidneys, and the nervous system. Women age 20-40 are most
commonly affected. There are approximately 0.5 to 2.0 million patients in the United
States.
Treatment
Because there is no cure for RA, the goals of drug therapy are to control symptoms (e.g.,
joint pain, swelling and immobility) and slow/halt the progression of joint destruction.
As a last resort, reconstructive surgery may be considered for paitnets with end-stage
joint damage who fail to respond to available therapies. There are several basic categories
of drugs used (see Exhibits 116-117):
166
Immunosuppressants;
United States
Efficacy
Onset of Action
Administration
$/year*
<2wks
oral, daily
$100-200
<2wks
heart, kidney
oral, daily
$1,100
3+
2+
2+
6-8 wks
2-6 wks
2-3 months
$170
$1,000
$280
2+
3-6 months
Arava (leflunomide)
2+
Immunosuppressants/Steroids
Azathioprine
2+
2-3 months
oral, weekly
oral, twice daily
oral, 2-3x/day
IM weekly x
6mo,or oral daily
oral, daily
Gold salts
Prednisone
Biologics
Enbrel
Remicade
2-3 months
oral, daily
oral, daily
2-4 weeks
2-4 weeks
SQ, 1-2x/wk
IV, 4-8 weeks
3+
4-8 weeks
1-2+
3+
3+
1-3 months
2-4 weeks
4-8 weeks
3+
<1 week
3+
3+
Humira
Kineret
Orencia
Rituxan
SQ, daily
IV, 8 weeks
IV x 2 doses
$2,800
$4,860
$730
$190
$14,000
$18,000
$14,000
$12,000
NA
$9,500
* end-user pricing for all except biologics, which are estimated manufacturer prices
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United States
Inadequate Response
Refractory Disease, Deformity
Surgery
Biologic DMARDs
TNF Blockers
Enbrel
Remicade
Humira
Alternative Biologics
Kineret
Orencia
Rituxan
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United States
can cause gastrointestinal problems (abdominal pain, ulcers and bleeding) and reduce
kidney function. Use of NSAIDs is the most common cause of gastrointestinal ulcers in
the United States. COX-2 generates prostaglandins (PGs) that promote inflammation,
pain, and fever and, therefore, is the intended target of NSAIDs. Commonly prescribed
NSAIDs include aspirin, Advil, Motrin, Aleve, Voltaren and Lodine.
COX-2 Inhibitors
The latest generation of NSAIDs, the COX-2 inhibitors, selectively inhibit the COX-2
enzyme, with little binding to COX-1. These drugs are designed to reduce pain and
inflammation (COX-2) but avoid the gastrointestinal side effects (COX-1) of traditional
NSAIDS. Physicians generally believe that COX-2 inhibitors provide a gastrointestinal
benefit versus nonspecific NSAIDs. However, COX-2 drugs have been associated with
cardiovascular risks (heart attacks and strokes), which led to the withdrawal of Mercks
Vioxx and Pfizers Bextra from the market. Pfizers Celebrex is the only COX-2 inhibitor
currently available in the United States.
Traditional DMARDs
Traditional DMARDs are small-molecule, as opposed to protein-based, agents. They are
heterogeneous in their chemical structures and mechanisms of action, although the latter
are generally poorly understood. The small-molecule DMARDs inhibit the proliferation
of inflammatory cells such as T and B cells at the site of disease. They also can interfere
with cell signaling, and the migration of cells to the joint itself. Due to their ability to
stop cells from dividing, many of these agents are also used to treat cancer. DMARDs do
not relieve pain and in many cases, patients must be treated simultaneously with NSAIDs
and corticosteroids. In general, these drugs have a slow onset of action, with a delay of
one to six months before there is a noticeable clinical benefit.
Methotrexate has become the favored first-line DMARD agent. The popularity of
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United States
Biologic DMARDs
Biologics are therapies that are specifically targeted at key processes in RA (see Exhibit
118). Six biologics have been approved in the United States for moderate to severe RA.
Three TNF-inhibitors (Enbrel, Remicade, and Humira) are approved for first-line
treatments in patients with early RA (typically defined as disease duration less than
three years), whereas Kineret and Orencia are approved only for second or greater line
therapy, that is moderate to severe RA patients who have failed one or more DMARDs.
Rituxan is approved only for patients who have failed one of the TNF inhibitors.
Exhibit 118: Biologic treatments for RA
Trade name
Generic name
Description
Enbrel
Humira
Etanercept
Adalimumab
Fusion protein consisting of the Human IgG1 MAb to TNF
extracellular portion of the tumor
necrosis factor (TNF) receptor
and Fc portion of human IgG1
Remicade
Infliximab
Chimeric IgG1 MAb to TNF
Orencia
Abatacept
Fusion protein consisting of the
extracellular portion of the
cytotoxic T-lymphocyte
associated antigen 4 (CTLA4)
and the Fc region of human
IgG1
NA
2005 Sales
$2.6B
$1.4B
$2.5B
Company
Partner
Target
Approved
indication(s)
Amgen
Wyeth
TNF
Moderate to severe RA
Juvenile RA
Psoriatic arthritis
Ankylosing spondylitis
Psoriasis
Abbott Laboratories
None
TNF
Moderate to severe RA
Psoriatic arthritis
Bristol-Myers Squibb
None
T lymphocytes
Moderate to severe RA failing
DMARDs
Other indication(s)
Subcutaneous dosing in RA
(Phase I/II)
Systemic lupus
erythematosus (Phase II)
Early RA (Phase IIIb)
Approved dosing
regimen
Warnings
Rituxan
Rituximab
Chimeric MAb to CD20
Kineret
Anakinra
Human Interleukin-1 (IL1)
receptor antagonist
$0.05B
Amgen
NPS Pharmaceuticals
IL-1 receptor
Moderate to severe RA failing
DMARDs
170
United States
given its first-mover advantage (in all indications, except Crohns Disease), broad
indications, long safety record, and lack of any black-box warning. The first indication of
Enbrel was for RA patients failing DMARDs, approved in 1998.
Enbrel is a fusion protein consisting of the extracellular ligand-binding portion of the
TNF receptor linked to the Fc portion of a human antibody. Enbrel serves as a free
floating receptor to mop up TNF so that there is less free TNF available to bind its
functional receptor. Enbrel is fully human, and therefore does not have a high incidence
of infusion reactions. Amgen manufactures the product and distributes it in the United
States, while Wyeth is responsible for ex-US sales.
Enbrel is approved for moderate to severe stage RA, juvenile RA, psoriasis, psoriatic
arthritis and ankylosing spondylitis. Among these conditions, RA is the most common.
antibody against TNF. By binding to TNF, Remicade prevents it from interacting with its
receptor. Remicade is approved for psoriatic arthritis and ankylosing spondylitis, and is
the only biologic approved for inflammatory bowel disease. Juvenile RA and psoriasis
may be approved in 2006.
Remicade is given by intravenous infusion, whereas Enbrel and Humira are selfadministered subcutaneous injections. This has implications for reimbursement and
patient convenience. Patients who are afraid or incapable of self-injections may prefer
therapy with Remicade at infusion centers.
Intravenous infusions also have implications for reimbursement. Rheumatologists may
have a financial incentive to administer Remicade. Prior to 2006, Medicare reimbursed
drugs delivered by infusion, but not those given by self-administration. Therefore,
Remicade was preferred by Medicare patients. Under the new drug benefit plan in 2006,
self-injections are covered by Medicare. Therefore, Enbrel and Humira may gain share
among Medicare patients, which represent about 35% of RA patients.
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United States
1Ra). The drug works by blocking the interaction of IL-1 with its receptor. Kineret is
approved for patients who have failed one or more DMARDs. Sales are minimal ($49
million in 2005), largely because Kineret is dosed daily and appears to be less effective
than other biologics. These drawbacks have limited its use to patients who fail to respond
adequately to TNF blockers. As other agents are approved, we expect Kineret to maintain
a niche role in the treatment of RA.
December 2005 and launched in February 2006. Orencia is consisted of the extracellular
portion of CTLA4 (cytotoxic T-Lymphocyte-associated antigen 4) fused to the Fc portion
of human immunoglobulin. Natural CTLA4 suppresses the activation of T-cells by
blocking the interaction of CD28 on the surface of T-cells with B7 on the surface of
antigen-presenting cells. By blocking the CD28-B7 interaction that is necessary for Tcell activation, Orencia prevents T cells from being activated.
Orencia has a similar route of administration as Remicade (intravenous infusions on days
1, 15, 29); however, maintenance therapy is every four weeks instead of eight weeks for
Remicade.
Orencia was effective in Phase 3 trials of patients failing traditional DMARDs or TNF
inhibitors. Due to the shorter safety record, we patients who have failed on TNF blockers
(TNF failures) will be the earliest adopters. That said, Orencia's label does not restrict
it to TNF failures and we expect Bristol-Myers to actively pursue a broad patient group.
We estimate 2010 sales of $875 million.
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United States
(e.g., IL-1, TNF, IL-6 and IL-8) and prostaglandins. They exert both an antiinflammatory and an immunosuppressive effect. These agents may often be the second
line of defense in RA therapy, as when they are given to a patient on NSAIDs who
suffers an acute episode of pain and inflammation. Corticosteroids can also be useful as a
temporary therapy while waiting for DMARDs to exert their effects. Less commonly,
corticosteroids may be prescribed chronically as supplemental treatment for patients not
adequately controlled on NSAIDs and DMARDs. There are many undesirable side
effects of corticosteroids that discourage chronic use at high doses. Therefore, they are
generally prescribed to relieve acute symptoms and then gradually tapered off. Side
effects include weight gain, osteoporosis, high blood pressure and diabetes. Systemic
dosing and intra-articular injections are possible routes of administration.
See Exhibit 119 for market share data for RA treatments. See Exhibit 120 for a selection
of compounds in clinical trials for RA.
Exhibit 119:
60%
50%
46%
40%
Market share
38%
30%
20%
16%
10%
1%
Dec-05
Oct-05
Nov-05
Sep-05
Aug-05
Jul-05
Jun-05
Apr-05
May-05
Mar-05
Jan-05
Feb-05
Dec-04
Oct-04
Nov-04
Sep-04
Jul-04
Aug-04
Jun-04
Apr-04
May-04
Mar-04
Jan-04
Feb-04
Dec-03
0%
3 months ended
Enbrel
Remicade
Humira
Kineret
Source: IMS.
173
Exhibit 120:
Candidate
BR3 soluble receptor
HuMax
PRO70769
VX-702
SCIO-469
Vitaxin
HuZAF
Pralnacasan
Tysabri
AMG-714
Eculizumab
Paxceed
LymphoStat-B
MLN 1202
Denosumab
Golimumab
IL-1 Trap
Actemra
Cimzia
United States
Phase
1
1/2
1/2
2
2
2
2
2
2
2
2
2
2
2
2
2
3
3
3
Mechanism of action
B-cell activating factor soluble receptor
human MAb to CD20
humanized MAb to CD20
p38 kinase inhibitor
p38 kinase inhibitor
MAb to alpha v beta 3 integrin
humanized MAb to interferon gamma
Inhibitor of IL-1 converting enzyme (ICE)
MAb to alpha 4 integrin
MAb to IL-15
inhibitor of complement C5a
inhibitor of metalloproteinase
MAb to B-lymphocyte stimulator (BLys)
T-cell and macrophage inhibitor
MAb to RANKL
MAb to TNF-alpha
IL-1 receptor fusion protein
MAb to IL-6
pegylated humanized MAb to TNF
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United States
VX-702 (Vertex/Kissei)
VX-702 is an oral inhibitor of P38 MAP kinase, an enzyme that mediates cellular
responses to inflammation. In March 2006, Vertex released supportive data from the
VeRA study, an international 315 patient randomized double-blind Phase 2 trial of VX702 + methotrexate vs. methotrexate alone in moderate to severe RA. At 12 weeks, 40%
of patients in the high dose VX-702 group reached ACR20, compared to 30% for
placebo. We expect Vertex to begin an international Phase 2 dose ranging study and file
an IND to begin U.S. trials in 2006.
The ACR 50 (50% improvement) and ACR 70 (70% improvement) are defined similarly
and are also frequently reported in clinical trials. Other outcome measures used in
clinical studies include indices of radiographic joint damage, such as the Sharp Score.
The DAS 28 is another commonly-cited metric for the assessment of disease activity. The
Disease Activity Score was developed by the European League against Rheumatism
(EULAR) and is more commonly used in Europe than in the United States. The DAS
score (or DAS28 score) differs from the ACR scoring in that the score is based on only
four variables: tender joint count, swollen joint count, ESR, and the patients own
assessment of disease activity. A score of <2.6 indicates disease remission, and an
increase of >0.6 suggests disease progression.
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United States
Scores based on X-ray studies. The Sharp score is a quantitative assessment of the
degree of joint space narrowing and bone erosions. In clinical trials, the change in Sharp
score is often reported to reflect radiographic outcome. The Sharp method assigns
separate scores for erosions and joint space narrowing, which are combined to obtain a
total score. The scoring range for the Sharp method is from 0 to 314 or 448, depending on
which modified version of the method is used. In some trials, scores obtained from hand
radiographs are included, whereas in other studies, radiographs of both the hands and feet
are used. Importantly, ACR scores and Sharp scores are limited to use in clinical trials.
These metrics are used infrequently in the clinical setting.
Quality of life metrics. There are two quality of life metrics that are also commonly
reported in clinical trials. Quality of life is important because RA is a chronic progressive
disease that leads to disability rather than death. Most clinical trials report at least one
quality of life metric. The HAQ is a Health Assessment Questionnaire which is used to
measure how much help the patient needs in his activities of daily living. The
questionnaire is completely subjective, and is usually used either in combination with
objective measures such as ACR response, or alone to estimate the impact of disease on
quality of life. (Sample HAQ at
http://patienteducation.stanford.edu/research/haq20.html).
Early versus late disease. Patients with newly diagnosed disease are likely to be
History of treatment with one or more biologics or DMARDS. Patients who have
or steroids, for example, is likely to demonstrate better results than biologics alone
when compared to placebo.
Placebo control. Patients treated with placebo in most arthritis and pain studies show a
176
United States
177
178
United States
United States
Maykin is the biotechnology analyst and head of Healthcare for Global Investment
Research. Maykin joined the firm in 1992. She became a managing director in 1998.
Previously, she was with Dupont-Merck Pharmaceuticals and Dupont De Nemours &
Company. Maykin serves on the board of The Aaron Diamond AIDS Research Center
and the Investment Committee of the Society for Neuroscience. Maykin was a
postdoctoral fellow at Harvard Medical School from 1980 to 1982.
Meg Malloy, vice president, joined Goldman Sachs in September 2000. She works in the
Healthcare Group covering the biotechnology industry. Prior to joining Goldman Sachs,
Meg was a senior biotechnology analyst at Chase H&Q for three years. She has been
following the biotechnology sector for the last ten years. Previously, Meg worked at
Needham & Co and PaineWebber. She is a CFA. Meg has an A.B. from the University of
Chicago.
Jeff Comisarow, Associate, joined Goldman, Sachs & Co. in April 2004. He works in the
Healthcare sector covering Biotechnology with May-Kin Ho. Jeff has a B.A. in
Biopsychology from The University of British Columbia, and an M.D. and MBA from
UCLA. Prior to joining Goldman, Sachs & Co, Jeff was an Associate in the Healthcare
Investment Banking Group of SalomonSmithBarney / Citigroup for 2 years.
David Clayton, Associate, joined Goldman, Sachs & Co. in October 2005. He works on
the Biotechnology team in New York. Prior to joining the firm, David worked as an
Equity Research Analyst covering the Medical Devices and Technology sector for SG
Cowen & Company. David is board certified in internal medicine, and trained at the
Scripps Clinic and Research Institute and Boston University. David graduated from
Columbia Business School with an MBA, from UMDNJ New Jersey Medical School
with an MD, and from Stevens Institute of Technology with a BS in Chemical Biology.
Charles Thuan Nguyen, CFA, Associate, joined Goldman Sachs & Co. in July 2003. He
works with May-Kin Ho, Ph.D. covering the biotechnology industry. Charles has a
B.A/B.S. in Finance and International Business, from Georgetown University, and is a
Chartered Financial Analyst. Prior to joining the firm, Charles was an analyst in the
healthcare investment banking group at Merrill Lynch & Co.
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United States
Amritha Kasturirangan
New York: 212-902-5306
amritha.kasturirangan@gs
.com
Amritha Kasturirangan, Associate, joined Goldman, Sachs & Co. in July 2005. She
works in the Healthcare sector, covering Biotechnology with Meg Malloy. Prior to
joining the firm, Amritha was an analyst in the investment banking division at Dresdner
Kleinwort Wasserstein and a consultant at PriceWaterhouseCoopers. Amritha earned her
MBA from the Wharton Business School and her BA from the University of Cambridge,
United Kingdom.
180
United States
Disclosures
181
182
United States
United States
Global
OP/Buy
IL/Hold
U/Sell
OP/Buy
IL/Hold
U/Sell
26%
59%
15%
59%
53%
43%
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183
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Definitions
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Co-Directors of US Research
David Tenney 1-212-902-6791
Anthony Carpet 1-212-902-6758
Accounting
Michael A. Moran, CFA
Enterprise hardware
1-212-357-3512
Economics
Jan Hatzius
PC hardware
1-212-902-5926
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1-212-357-1849
1-212-902-5926
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Pharmaceuticals, specialty
Equity derivatives
1-212-902-4095
1-212-902-6781
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Pharmaceuticals, major
Entertainment
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Portfolio strategy
Abby Joseph Cohen, CFA
David J. Kostin
Laura Conigliaro
1-212-855-0070
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1-212-357-4706
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1-212-357-3292
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1-212-902-6753
Airlines
Glenn Engel, CFA
Judy E. Hong
Global themes
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Banks, large-cap
Lori B. Appelbaum
1-212-902-6846
1-212-902-6846
1-212-902-0490
1-212-902-6723
1-212-902-7839
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Restaurants
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Semiconductor devices
Integrated oil
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REITs
1-212-357-1986
Retail, hardlines
1-212-357-0136
Insurance/nonlife
Biotechnology
May-Kin Ho, Ph.D.
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Insurance/life
Beverages
Judy E. Hong
1-212-902-7158
Imaging technology
Banks, mid-cap
Lori B. Appelbaum
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Healthcare facilities
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1-415-249-7480
Asset managers
James Fotheringham
1-212-902-0490
1-212-902-6753
Food
1-212-357-0931
Simona Jankowski
Seogju Lee
1-212-357-1849
Small companies
1-415-249-7437
1-212-902-6785
1-212-902-9091
Internet
Anthony Noto
Chemicals, commodity
Robert Koort, CFA
Jonathan Shapiro
1-212-357-4333
1-212-902-8458
Managed care
Matthew Borsch, CFA
Chemicals, specialty
Robert Koort, CFA
1-212-902-6784
1-212-357-4333
1-212-902-7564
Commodities
Steven Strongin
1-617-204-2051
1-212-357-4706
Storage networking
Laura Conigliaro
1-212-902-5926
1-212-902-7771
1-415-249-7464
Alberto Arias
Aldo Mazzaferro, CFA
1-212-902-9884
1-212-902-9916
Technology strategy
1-212-902-6764
1-212-902-2451
Laura Conigliaro
Rick G. Sherlund
1-212-902-5926
1-212-902-6790
Multi-industry
Cosmetic, household, & personal care products
Amy Low Chasen
1-212-902-6748
Electric utilities
Michael Lapides
1-212-357-6307
1-713-654-8481
1-212-357-0931
Terry Darling
1-212-902-8156
Tobacco
1-212-357-0379
Rick G. Sherlund
Sarah Friar
E-mail: firstname.lastname@gs.com
1-212-902-9823
Arjun N. Murti
Brantley Thompson
Energy MLPs
David Chiaro
Judy E. Hong
1-212-902-0490
Washington research
1-212-357-5509
Alec Phillips
1-202-637-3746