Reliable technology or programed failure ? Anne-Sophie Berteloot Marie Crétal Julienne Gombet Marion Stylemans 1 Safe Harbor This is an independent study performed by students from the Faculté des Sciences Pharmaceutiques de Lille The opinions expressed are our own and not necessarily those of NicOx 2 I) II) III) IV) V) NicOx company overview Successes and failures Naproxcinod: the last hope? What about the financial health of NicOx? Do we want to work at NicOx? 3 4 NicOx in brief …  French Biotechnology Business company (Private placements: 8,3 M€)  Location : Italian subsidiary US Headquarters Head office : Sofia Antipolis Core expertise : nitric oxide-donating technology Application : Drug discovery in the cardiometabolic and inflammatory domain  NicOx’s products don’t target a « niche » but compete with drugs existing in huge markets. 5 NicOx in brief …  Corporate statut :  Founded in 1996 in France by Piero Del Soldato, Elizabeth Robinson and Michele Garufi  Chief Executive Officer : Michele Garufi  Public company IPO date : November 3, 1999; 33 million euros Listed on Euronext  117 employees  Aim : « build itself into a fully integrated bio-pharmaceutical company »  Strategy of development : Partnerships and co-development agreements with pharmaceutical companies 6 An idea … .N « NO-donating technology can bring clear medical and market benefits » « NO-donating drugs are more effective and tolerable than existing compounds » O …A technology concept Established drug + linker + -ONO2 = Novel Chemical Entity Ester linkage 7 Protects from Gastrointestinal injury  Maintains mucosal blood flow  Inhibits platelet adhesion Autoimmune system Anti-inflammatory Cardiovascular system  Reduces blood pressure  Vasodilatation Protects against oxidative damage Neurotransmitter 8 Endogenous production  NO synthase (NOS) enzymes 3 isoforms: • • Inductible form (iNOS) “Constitutive” forms - Endothelium (eNOS) - Neurons (nNOS) 9 NO= key relaxing factor 10  When production of NO is impaired, or its bioavailability reduced, the following can result: • vasoconstriction inflammation • vascular hypertrophy and thrombosis stenosis These effects can lead to diseases and conditions such as:  hypertension  heart failure  obesity  atherosclerosis  dyslipidemias  diabetes (I+II)  Commercial interest 11 Discovery of NO 1772 NO is nominated « Molecule of the Year » 1987 1996 1992 NO is identified as endotheliumderived relaxing factor (EDFR) Nobel Prize in Medicine for « NO as a signaling molecule in the CV system » 2005 1998 Naproxcinod Phase III Translation of basic knowledge of NO into new medicines 12 INDUSTRIAL STRATEGY OF NICOX AND PARTNERSHIP 13 Strong intellectual property Strong scientific « idea » License and codevelopment agreements with Pharma companies Development through CROs and contract scale-up / manufacturing The company : • minimal structure • high outsourcing level Research collaboration with world leading experts Strong management team “Focussed” and “lean” internal research structure 14 Industrial strategy of NicOx … …To a fully integrated biopharmaceutical company In-house R&D programmes Fully integrated biopharmaceutical company Selective acquisitions In-licensing 15 Great and attractive communication Lien Nitric Oxid Knowledge Center 16 1996 1998 2002 2003 2004 2005 2006 1st agreement License agreement with Pfizer and Merck 17 18 Phase I HCT1026 (Alzheimer) 2002 2005 2003 Phase II AZD3582 NicOx Astra-Zeneca Phase III ongoing by NicOx Phase II NCX100 (Portal hypertension) NicOx Axcan Phase II NCX4016 (AOMI) NicOx Bayer Phase II ongoing by NicOx (Type 2 diabetes) Phase IIa NCX1020 (COPD) NicOx Topigen 2008 2007 Phase IIa PF-03187207 NicOx Pfizer 19 NICOX PARTNERSHIPS Overview of the clinical studies 20 Collaborations with Pfizer in ophthalmology PF-03187207 a nitric oxide-donating prostaglandin analog Glaucoma - Phase 2 Partnered with Pfizer Inc First agreement signed in August 2004 for glaucoma New agreement signed on March 2, 2006 21 Elevated intraocular pressure is a risk factor for glaucoma which can lead to vision loss Xalatan® Latanoprost vs PF-03187207 (Pfizer, 2011) (NicOx) 22 NicOx/Pfizer sign Research, Development and Licensing Agreement 2004 Financial terms 24 august, 2004 NicOx will receive:  €1 million in upfront +  €1 million six month later +  €32 million in future milestones +  royalties Pfizer should reveive:  A worldwide license on NO-Donating compounds 23 2006 agreement in ophtamology Exclusive rights to NO-donating technology in ophthalmology in multiple compound classes and indications NicOx €5 million upfront technology license fee €23 million in 2006 €15 million as equity investment €3 million as research funding €3 million in 2007 & 2008 Pfizer as research funding Option of a worldwilde exclusive licence “Total potential milestones >€300 million” 24 PF-03187207 in phase 2 clinical development March’07: First phase 2 PoC study initiated in the U.S NAME PF-03187207 NO-donating prostaglandin F2α analogs for glaucoma OBJECTIVES Compare the safety and efficacy of PF’7207 versus Xalatan 0,005% PRIMARY END-POINTS change in diurnal intraocular pressure (IOP) at day 28 In 215 patients with primary open angle glaucoma or ocular hypertension 28day randomized Dose-finding double-masked trial Parallel group STRUCTURE RESULTS highest dose of PF-03187207 showed ↘ 12% (1 mmHg) … BUT non significant results!! 25 PF-03187207 in phase 2 clinical development January’08: Second phase 2 PoC study initiated in Japan CODE PF-03187207 NAME NO-donating prostaglandin F2α analogs for glaucoma OBJECTIVES Compare the safety and efficacy of PF’7207 versus Xalatan change in diurnal intraocular pressure (IOP) at day 28 120 Japanese patients to be enrolled Primary End-points Structure Similar design to U.S. study August 2008 Pfizer won’t continue PF-03187207 development to phaseIII 26 Collaboration with Topigen in COPD TPI-1020 novel anti-inflammatory respiratory drug candidate Respiratory disorders - Phase 2 Partnered with TOPIGEN Pharmaceuticals Inc. 27 COPD Chronic Obstructive Pulmonary Disease 28 Agreements details Canadian-based TOPIGEN • • the North American rights develop and market NCX 1020 NicOx would receive - a 2 million Euros upfront payment + - Up to 52.9 million Euros in milestones + - Commercial success fees in addition to a share in future revenues 29 Safety, Tolerability and PD Activity of Inhaled TPI 1020 Versus Inhaled Budesonide in COPD Patients CODE TPI 1020 NO-donating anti-inflammatory STRUCTURE 61 patients with Chronic Obstructive Pulmonary Disease Primary Outcome Measures: To determine general safety and the tolerability of inhaled TPI 1020 administered via Aerolizer™ in COPD patients. Secondary Outcomes Measures: To assess the effects of TPI 1020 versus those of budesonide on sputum neutrophil counts on Days 0 and 42 Results Reduction of neutrophils in patients expectorations Primary outcome on Safety and torerability is achieved No additional efficacity effects observed!! 30 Major license, development and co-promotion agreement with Merck in the antihypertensive field Agreement signed on March 21, 2006 Nitric oxide-donating antihypertensives Hypertension - phase 1b Partnered with Merck & Co., Inc. 31 Prototype compound NCX 899 - Significantly better Blood Pressure lowering in a validated model of hypertension 32 Merck agreement details €9.2 million in up front €279 million potential milestone In 2006 • January 2007: €5 million milestone • Initiation of toxicology studies development candidate selected • July 2007: €5 million milestone • A series trials on the first drug candidate which is a phase 1 • dose escalating study in healthy volunteers on first 33 NicOx pipeline ?? 34 NicOx future blockbuster? Will it come in the market without a hitch? 35 Code Derived from AZD 3582 / HCT 3012 Naproxen Non-steroidal anti-inflammatory drug (NSAID) Mechanism: COX-1 and COX-2 inhibitor Indications: To moderate pain, inflammation and fever in Osteoarthritis, rheumatoid arthritis, ankylosing spondylitis, tendinitis, bursitis… Side effects: - Raise blood pressure in hypertensive patients - Gastroduodenal ulcers now generics, market = 13,3 billion $ 36 Code AZD 3582 / HCT 3012 Derived from Naproxen Structure: NO-Naproxen NO-donating group Naproxen Class Indication Ester linkage Leading drug of a new class: CINOD (COX Inhibiting Nitric Oxid Donators)   Phase III clinical trials completed Treatment of the signs and symptoms of osteoarthritis 37 Expected benefits - At least as effective as Naproxen - No negative effects on blood pressure different from all NSAIDs - Better gastrointestinal safety Commercial - Future blockbuster: potential sales > $ 1 billion - Opportunity of the market in osteoarthitis benefits treatment … expected 38  Osteoarthritis: > 70 M Patients in the US and in Europe  NSAIDs market > $ 12 billion / year  40 % of people suffering from osteoarthritis are hypertensive  Significant opportunity for Naproxcinod since the withdrawal of Cox-2 inhibitor Vioxx® (Rofecoxib) from the market in 2004. Celebrex is now the only one NSAIDs promoted in the US  Most of NSAIDs raise blood pressure  End of patents for most NSAIDs: generics A need of an effective NSAID without negative effects on blood pressure 39 Naproxcinod’s history Positive results from phase III annonced by NicOx Co-development with Astra-Zeneca $ 37 M 2003 mid2009 2005 2010 Different partnerships 1998 Naproxcinod Phase III Naproxcinod phase II: Disappointing results Astra-Zeneca cancels the deal NicOx wants to pursue a phase III study 2007 2008 Planned filling in Europe Planned NDA filling in the US Search for Partnering activities 40 Pharmacokinetics datas Esterases Ester linkage The lenght and chemical nature of the ester linkage can influence the rate of release of NO from the molecule 41 Intracellular Release of NO from NO-aspirin Method: Confocal microscopy 1)Human endothelial cells were loaded with a dye that becomes fluorescent on reaction with NO 2)Cells were exposed to NO-aspirin Results: POTENTIAL CARDIOPROTECTIVE ACTIONS OF NO-RELEASING ASPIRIN NATURE REVIEWS/DRUG DISCOVERY, volume 1, May 2002 42 Phase 2 study: AZD3582 vs naproxen in osteoarthritis Objective Primary endpoints To evaluate the gastrointestinal safety and efficacy of AZD3582 in patients with hip or knee osteoarthritis. The six week incidence of endoscopic gastroduodenal ulcers (diameter >3 mm) Design AZD3582 750 mg n=970 Naproxen 500mg a six week double blind randomised trial Placebo 43 Gastrointestinal safety    Placebo: 0 AZD3582: 9,7% Naproxen: 13,7% But the results didn’t achieve statistical significance (p=0,07) 44    02/2003: Disappointing phase II results for Naproxcinod NicOx’s action is incotable for 2 days NicOx’s action collapse: - 85 %    NicOx is convinced of the efficacy and safety of naproxcinod and critizes the methodology used 09/2003: Astra-Zeneca ends the partnership NicOx wants to pursue a phase III study (2005) 45 Objective To evaluate safety and efficacy of Naproxcinod Primary endpoints - WOMAC* pain and WOMAC function subscales and patient’s global assessment - Safety focused on adverse effects and blood pressure *WOMAC = index assessing pain, disability and joint stiffness using a battery of 24 questions Design In patients with OA of the knee Naproxcinod 375 mg Naproxcinod 750 mg n = 918 Naproxen 500 mg 13-week double-blind randomized trial Placebo 46 § High statistical significance for superiority to placebo (p<0.001) Naproxcinod > Placebo But… Naproxcinod ≡ Naproxen Yes but…. For gastrointestinal safety: Naproxcinod ≡ Naproxen 47 Objective To evaluate the profile of Naproxcinod on blood pressure, compared to placebo and naproxen (13 weeks) Primary endpoints OBPMs = Office blood pressure measurements collected at each visit to the treatment centers from the 3 studies 48  Yes but…  A significantly proportion of patients on Naproxcinod experienced an increase in SBP of 5mmHg or more, compared to Naproxen  Interesting for hypertensive patients but the others ??? Is reduction of blood pressure sufficient to be a good commercial argument? 49 50 STRENGHTS • Reduces blood pressure OPPORTUNITIES • Interesting for hypertensive patients WEAKNESSES • Not more effective than Naproxen • No scientific communication on study results: credibility? • No direct confrontation Naproxen/Naproxcinod • Decrease in blood pressure not really convincing • Nicox cannot cope with commercialisation fees • Time of development • SMR evaluation: weak • No Economic interest compare to generics THREATS •FDA is reluctant to approve NSAID since CV problems with Vioxx, COX inhibitor as well 51 52  Market revenues:     Initial Public Offering on Euronext Paris: € 33,2 M((November 1999) Follow-on public offerings: September 2004( € 26 M), May 2006 (€ 45,5 M), February 2007 (€ 130 M). Increase of capital € 15 M reserved to its partner Pfizer (June 2006) Private placements (€ 8,3 M) % of shares 2006 Co-funders 53 Operational revenues  Payments received under collaboration agreements with pharmaceutical partners ( € 52,1 M) Agreements with Pfizer and Merck End of the collaboration agreements 54 86,4 Increase +++ in R&D expenses results mainly from the cost related to the phase 3 development of Naproxcinod 61,3 24,2 20,9 16,6 21,4 36,3 55 56 57 AstraZeneca deal Pfizer and Merck deals Naproxcinod results and share offer Termination of AstraZeneca deal 58 Historic chart : 1 year + 70%: agreement signed with Archimica for the production of naproxcinod Positive treasury New positive results for naproxcinod Financial crisis Less attraction for investors 59 In thousand euros In 2010 ??? « We currently believe that we have sufficient cash to finance the activities of the commpany until the end of 2010 » Eric Castaldi, Chief Financial Officer of NicOx 60  Positive approbation for naproxcinod Takeover bid Partnership Is it realistic?  Setback of naproxcinod Failure 61 If I were a pharmacist, I would / would not like to work in NicOx and why ? Strenghts •Biotech = opportunity of quick progression •One product well-advanced in the clinical trials •No liabilities Opportunities • positive approbation for the naproxcinod  reflation of partnerships and takeover bid Weaknesses • credibility of NO technology? • loss of €74 million in 2008 •A lot of failures in NicOx pipeline Threats • no scientific support • cessation of the partnerships 62 CONCLUSION 63 64 Special thanks We especially want to thank Guy Dausque, Ms Gras, Mr Tartar and Julien Samier for their help and the time they gave us Any questions? 65