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

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

Ulcerative Colitis (UC) Prevalence and incidence peak in the year age group Prevalence highest in the US, and Northern Europe Crohn’s Disease (CD) Prevalence and incidence peak in two groups: and year of age Prevalence highest in the US and UK affect many people Market Analysis

Crohn’s DiseaseUlcerative Colitis Primary Goals Induce remission of acute flares Maintain remission Try to substitute steroids Treatment Progression Current Market Share No Treatment Topical 5-ASA 5-ASA/Sulfasalazine Antibiotics Oral Corticosteroids IV Corticosteroids 6-Mercaptopurine/Azathioprine Methotrexate Cyclosporine Infliximab Experimental Therapies… (20% UC received colectomy) Severe Mild who have some options Market Analysis

Crohn’s Disease SeverityUnmet Need Mild (46%) Oral agent for maintenance Moderate (38%) Maintenance drug with better side- effect profile Severe (16%) Maintenance drug different from anti- TNF-α therapy RemissionMaintenance drug Ulcerative Colitis SeverityUnmet Need Mild (55%) Current therapies effective Moderate (30%) Maintenance drug that is fast-acting and safe Severe (15%) Maintenance drug with better response rates RemissionMaintenance drug Minimal side effects Different from anti-TNF-α therapy but not many Unmet Needs

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

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

Phase 1 ($42MM) Initial Safety Dosing and delivery Phase 2 ($67MM) Safety and efficacy Phase 3 ($241MM) New Drug vs. Existing Drug Phase 4 Long-term safety and effectiveness Post-marketing surveillance Clinical R&D ($350MM)Preclinical R&D ($50MM) Dosing Efficacy Toxicity Pharmacokinetics Synergies with existing drugs Effects on refractory IBD cases Long-term side effects The process requires Drug Trials

DISEASE CD UC X 206,400 5ASA 40,000 Steroid 122,000 IM MARKET SIZE PROFIT GTX-002 GTX MM X Annual Figures UC disease Synergies 100% of market Price of $ MM + 10% Sales DISEASE CD UC MARKET SIZE PROFIT 159MM + 10% Sales 32,500 Refractory ? Biologic 20,000 Refractory ? Biologic 1.522B Annual Figures CD and UC disease Refractory 50% of market Price of $21, B making a choice Drug Selection

Revenue1,522,500,000 Cost of Sales: Selling, informational and administrative expenses100,000,000 Acquisition-related in-process R&D charges: Licensing Fee833,333 Late stage development costs25,000,000 R&D Milestone33,333,333 Royalty Costs152,250,000 Net Income1,211,083,334 INCOME STATEMENT: Phase 1 70% Phase 2 33% Phase 3 30% Growth rate- 3% Discounting rate- 10% Price- $21, thousand people 13 year period EXPECTED VALUE 7% - success rate Total Actual Value: 20.1B Total Actual Value: 1.4B Total Present Value: 10.5B Total Present Value: 738MM Costs: 710MM Project Value: 9.83B Project Value: 28MM IF SUCCESSFUL ADJUSTING FOR RISK running with the numbers Calculations

GTX 001 Maintenance drug for both CD and UC Product $21,000 Price Refractory patients Moderate and severe patients Target Market Expansion into international markets Development and commercialization for other diseases Extension of patent – orphan drug patent Re-negotiation of contract License exclusivity Decrease production costs Future Direction and developing a plan Proposal

Acknowledgements

J.A. DiMasi et al. “The Price of Innovation: New Estimates of Drug Development Costs.” Journal of Health Economics 22 (2003): Marianne Moody Jennings. Business Ethics: Case Studies and Selected Readings. Mason: South-Western Cengage Learning P.M. Matthews. “The Long, Sometimes Bumpy Road of Drug Development.” The Dana Foundation John Hopkins Medicine Gastroenterology & Hepatology Additional Information References

Current Treatment Crohn’s DiseaseUlcerative Colitis Goals - Induce remission of acute flares - Maintain remission -Try to substitute steroid Market Share US EU 5-ASA - Pros: Oral; Cheap - Cons: Few have robust efficacy data - Pros: Oral; Cheap; Lower dosing; Well developed - Cons: Ineffective for severe form; Poor retention Steroids - Pros: Effective; Rapid-acting for acute flares - Cons: Long-term side effects - Pros: Oral; Effective induction; Rapid onset - Cons: Long-term side effects; Infection; Immuno- modulator - Pros: Oral; Effective for severe condition; Cheaper than biologic - Cons: Harmful when combine with TNF-a - Pros: Oral; Highly effective - Cons: Toxic; Potential tremors/infections; Slow onset; Not for pregnant women Biologic - Pros: Robust clinical data (eg. Infliximab) Higher comfort level; Possibility of SC Choice of non-anti-TNF-a approach -Cons: IV; Not fully humanized; Infections - Pros: Effective; Reduce surgery -Cons: IV; Can’t stop once started; Infection Long-term safety Others No treatment or Refractory20% undergoes Colectomy

Population Predictions CD Population USEU PrevalenceIncidenceBiologicRefractoryOther TreatPrevalenceIncidenceBiologicRefractoryOther Treat ,00020,212101,54043,831307,864355,20014,98851,27124,618260, ,52620,327102,07744,063309,493357,07415,07351,54224,748261, ,87321,246107,21646,281325,074375,12715,75454,13725,994275, ,897 21, ,528 47, , ,303 16,010 55,305 26, , ,802 21, ,346 47, , ,198 16,095 55,718 26, , ,821 21, ,187 47, , ,179 16,180 56,142 26, , ,956 21, ,051 48, , ,244 16,265 56,579 27, , ,205 22, ,939 48, , ,395 16,351 57,027 27, , ,569 22, ,850 49, , ,631 16,436 57,487 27, , ,047 22, ,784 49, , ,953 16,521 57,959 27, , ,641 22, ,742 49, , ,359 16,606 58,442 28, , ,350 22, ,723 50, , ,850 16,691 58,938 28, , ,173 22, ,727 50, , ,427 16,776 59,445 28, , ,111 22, ,755 51, , ,089 16,862 59,964 28, , ,164 22, ,806 51, , ,836 16,947 60,494 29, , ,332 22, ,881 52, , ,668 17,032 61,037 29, ,077 UCPrevalenceIncidenceBiologicRefractoryOther TreatPrevalenceIncidenceBiologicRefractoryOther Treat Every year525,00021,00067,25319,793403,410442,50017,70032,74521,107248,154 - For CD, prevalence and incidence increase linearly every year. - For UC, prevalence remain stable through out the whole period; incidence and death rate balance out. Assumptions: -Consider a 4% constant death rate. - using the market segment provided predict each medicine sector.