Transcript Dr. Roland E. Dolle - IGMORIS - Indian GMO Research Information

Elements of a Profitable
Biopharmacutical Company
Roland E. Dolle
September 24, 2003
August 2003
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Outline
• Evolution of biotech business models
• Adolor Corporation
August 2003
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Business model evolution
• 1980s: Product-based
August 2003
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Business model evolution
• 1980s: Product-based
• R&D + Sales & Marketing
• Some big success stories - Amgen, Genentec
• More companies failed than succeeded
• Many unfulfilled promises
August 2003
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Business model evolution
• Project risks
• Failure to optimize a lead into a clinical candidate
• Clinical candidate failure on safety, PK
• Failure of mechanism to treat disease
• Failure to differentiate over existing treatments
• Failure to make a return on investment if launched
August 2003
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Business model evolution
• Attrition prior to Phase II
• Biggest problem as a percent
• >80% loss prior to NDA
• Attrition in Phase II and later
• Biggest problem in cost
• Target validation issue
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Business model evolution
• 1980s: Product-based companies
• 1990s: Technology-based companies
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Business model evolution
• 1990s: Technology-based
• Genomic platforms
• Combinatorial chemistry platforms
• Miscellaneous drug discovery services
• Investor rationale
• Product-based model seen as too risky
• Enabling technology will accelerate R
• Instant revenue stream ($$)
August 2003
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Business model evolution
• Reality
• Genomic and combichem platforms did not live up to
expectation (over sold)
• More targets - but not validated
• More compounds - but not drug-like
• Drugs to market have been declining while
expenditures escalating
• Profit margins slim
• Tech-based companies can’t “hit the home-run”
• Little up-side potential for shareholders
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Business model evolution
• 1980s: Product-based
• 1990s: Technology-based
• 2000s: Product-based
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Business model evolution
• 2000s: Product-based
• Pure technology service platforms - out of favor
• Technology companies transforming themselves into
product-based companies
• Miscellaneous drug discovery services - moving
outside of U.S.
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Business model evolution
• Example: Millennium Pharmaceuticals (Boston, MA)
• 1993: Genomic screening platform (target validation)
• 1997: ChemGenics acquired for library screening and lead
optimization
• 1999: LeukoSite acquired for clinical development and product
pipeline
• 2000: Cambridge Discovery acquired for chemistry/screening
• 2001: CorTherapeutics acquired for clinical product including
sales and marketing infrastructure
• 2003: Restructuring initiative shuttered R&D in San Francisco,
Cambridge, England
• 2004: Plans to cut staff by 26% to focus on drug development
and commercialization
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Product-based Business Model of the 2000s
Target ID
Validation
Drug
Discovery
Development
• Must build profitable business
• Build the company in stages
• Corporate alliances/partnerships
August 2003
Sales &
Marketing
• Technology
• Management expertise
• Finance
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Mission
Build a profitable pharmaceutical company
specializing in the discovery, licensing,
acquisition, development and commercialization
of prescription pain management products.
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Forward-Looking Statements
This presentation and the questions and answers that follow contain forward-looking statements including but not limited to
statements about the following:
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Our ability to submit, if positive confirming results are achieved in our other studies, our alvimopan clinical study 302 in an NDA
Our ability to achieve positive confirming results in the other alvimopan Phase 3 clinical studies
Our target dates for completing accrual and announcing results in our alvimopan clinical studies 308 and 313
Our target date to submit an NDA for alvimopan in the first half of 2004
Our alvimopan clinical study 304 results and plans for further development of alvimopan in opioid bowel dysfunction
Our ability to complete a Phase 2 study for ADL 08-7223 in late 2004
Our ability to submit an NDA for ADL 08-7223 in 2006
Our product development efforts, including results from clinical trials
Anticipated dates of clinical trial initiation, completion, and announcement of trial results
Anticipated trial results and regulatory filing dates for our product candidates
Analysis and interpretation of data by regulatory authorities; the status and anticipated timing of regulatory approval for our product candidates
Anticipated operating losses and capital expenditures
Our intentions regarding the establishment of collaborations
Anticipated efforts of our collaborators, including initiation of clinical studies of alvimopan in opioid bowel dysfunction in 2003
Our intention to rely on third parties for manufacturing
Our plans to build a hospital-focused sales force
Estimates of the market opportunity and the commercialization plans for our product candidates, including our plans for the establishment of a
sales force
Our forward-looking statements are subject to risks and uncertainties, known and unknown, that could cause actual results and developments to differ materially
from those expressed or implied in such statements. Further information about these and other relevant risks and uncertainties may be found in Adolor’s filings
with the SEC, available in its EDGAR database at http://www.sec.gov and from Adolor at www.adolor.com. Given the uncertainties affecting pharmaceutical
companies in the development stage, you are cautioned not to place undue reliance on any such forward-looking statements, any of which may turn out to be
wrong due to inaccurate assumptions, unknown risks, uncertainties or other factors. Adolor undertakes no obligation to publicly update or revise the statements
made herein or the risk factors that may relate thereto.
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Profile
Capabilities

130 employees: from discovery and clinical research to business development, manufacturing
and marketing
Alvimopan

Peripheral mu opioid receptor antagonist developed to manage negative gastrointestinal (G.I.)
side effects of opioid pain products

Positive results in late-stage clinical trials in two distinct indications

Substantial potential market opportunities in both hospital and out-patient settings

GlaxoSmithKline partner for collaborative development and commercialization
ADL 08-7223

Sterile lidocaine impregnated patch being developed for management of postoperative incisional
pain in North America

Potential customer synergy with alvimopan
Discovery

August 2003
Research focus on cannabinoid, delta, kappa, mixed mu/kappa, peripheral mu and other receptor
targets
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Importance of Pain Management/Treatment
• Pain costs approximately $100 Billion in treatment and lost productivity
 Most common symptom that causes people to seek medical care in the
U.S.
• Recognition and Acceptance
 Pain - “The Fifth Vital Sign” as defined by the American Pain Society
 The Joint Commission on Accreditation of Healthcare Organizations
(JCAHO) developed guidelines in 1999 that mandates hospitals
recognize the rights of patients to appropriate assessment and
management of pain
• Market Potential
 Total U.S. market for pain pharmaceuticals: $15 billion
 Opioids in U.S.: 190 million annual prescriptions; $4.6 billion in sales
 Increasing number of surgeries/aging population
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R & D Pipeline
Program
R&D
Postoperative Ileus
Alvimopan
Chronic Opioid Induced Bowel Dysfunction
Acute Opioid Induced Bowel Dysfunction
Combination Product
(alvimopan + opioid)
ADL 08-7223
Kappa
Peripheral Mu
Delta
Pain
Postoperative Incisional Pain
Post-surgical/Inflammatory/
Visceral Pain
Joint Pain
Neuropathic Pain
Irritable Bowel Syndrome
Mixed Mu/Kappa
Post-surgical/Inflammatory Pain
Cannabinoid Agonist
Post-surgical/Inflammatory Pain
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Phase 1
Phase 2
Phase 3
Alvimopan
Mechanism
Of Action
Central
Mu Opioid
Narcotic Analgesics:
- morphine
- codeine
- oxycodone
Mu Opioid Receptor
Alvimopan Selectively
Antagonizes GI Opioid Receptors
Peripheral Mu Opioid
Receptors in Bowel
Postoperative Ileus
Opioid Bowel Dysfunction
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Postoperative Ileus
• POI is a temporary impairment of gastrointestinal
motility after abdominal or other surgeries
• Severity / duration is associated with type of intraabdominal surgery
• Opioid analgesics used for postoperative pain delay G.I.
recovery
• Patient recovery and recovery of G.I. function is often
rate limiting in patient satisfaction and hospital discharge
• No FDA approved drugs for this indication; current
treatments are not adequate
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Alvimopan for the Management of
Postoperative Ileus - Studies 302, 308, 313
Design
• Double-blind, placebo-controlled, multi-center
• Placebo, 6 mg, 12 mg, equal randomization
• First dose at least two hours prior to surgery, and then twice a day until
hospital discharge or up to 7 days post-surgery
• Postoperative pain management with intravenous Patient Controlled
Analgesia (PCA pump) with opioids
Subjects
• Limited simple hysterectomies
 20% max in Study 302 and 308; none in Study 313
• Radical hysterectomy; large bowel resection
• Small bowel resection (Studies 308 and 313)
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Alvimopan for the Management of Postoperative
Ileus - Studies 302, 308, 313
• Primary Efficacy Endpoint
 Time to recovery of gastrointestinal (G.I.) function (composite
endpoint is upper AND lower G.I. recovery)
• Time to upper G.I. recovery: tolerating solid foods
• Time to lower G.I. recovery: flatus or bowel movement
• Secondary Efficacy Endpoints
 Proportion of Responders
 Time to be Ready for Discharge based solely on Recovery of
Gastrointestinal Function
 Time to First Solid Food
 Time to Hospital Discharge Order Written
 Time to First Flatus
 Time to First Bowel Movement
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Alvimopan for the Management of Postoperative
Ileus – Study 302
Statistical Analysis
Pre-specified primary analysis method
• Cox proportional hazard model
6 mg dose vs. placebo
• Cox hazard ratio = 1.47
• P <0.01
• 5 of 6 secondary endpoints statistically significant (P = 0.033
for other)
12 mg dose vs. placebo
• Positive Trend
 Cox hazard ratio = 1.23
 P = 0.11
• Statistically significant P <0.01 in proportion of responders
(first order secondary endpoint)
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Specified Primary Endpoint Analysis: Time to
Recovery of GI Function - Alvimopan Study 302
6 mg vs. placebo: hazard ratio = 1.47, P<0.01
(Cox Proportional Hazard Model)
6 mg
Placebo
• 16 hour faster average recovery of
G.I. function
• 14 hour earlier average time of
hospital discharge order written
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Number of Subjects Who Had Hospital
Discharge Order Written- Alvimopan Study 302
45
40
35
30
25
20
15
10
5
0
Hospital Days:
Placebo
6 mg
632
66
1
2
3
4
5
6
7
Post Operative Day
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698
25
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Alvimopan for the Management of
Postoperative Ileus - Study 302
Most frequent adverse events were:
Placebo
6 mg
12 mg
n = 153
n = 150
n = 146
Nausea
67.3%
64.0%
56.8%
Vomiting
32.0%
25.3%
15.1%
Hypotension
15.0%
12.0%
11.6%
6.7%
17.8%
Discontinuations for adverse events:
14.4%
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Alvimopan for the Management of Postoperative
Ileus - Development Targets
Studies
Accrual Completion Targets
Subjects
302
Complete
451
306
Complete
500
308
Q3 – Q4
Enrolling
313
Complete
510
NDA Submission Target
First half 2004
»
August 2003
NDA submission will depend on achieving confirmatory clinical trial results; timing of
any submission is dependent on timing of accrual completion and other factors.
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Chronic Pain Market U.S.
• Approximately 50 million Americans suffer from chronic pain
 Back Pain - 27 million
 Osteoarthritis - 20 million
 Other pain syndromes - 3 million
• 190 million prescriptions for opioids written in the U.S. each
year
 Approximately 30 million of those prescriptions are for 14 or
more days’ medication
• 40% of patients on long term opioid therapy meet the clinical
definition of constipation (< 3 bm / per week)
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Alvimopan for the Management of Chronic
Opioid Bowel Dysfunction (OBD) - Study 304
• Double-blind, randomized, placebo control
• Inclusion Criteria
 On chronic opioid therapy for at least one month
 Have opioid-induced bowel dysfunction
• N = 168 in chronic pain or methadone maintenance
• Alvimopan 0.5 or 1.0 mg or placebo
• 3 weeks (21 days) consecutive daily dosing
• Primary Efficacy Endpoint
 Average proportion of patients having bowel movement within
8 hours following oral medication, measured each day during
the 21- day study
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Alvimopan for the Management of Chronic
Opioid Bowel Dysfunction (OBD) - Study 304
55%
60%
Average
proportion of
patients with
bowel movement
< 8 hours of dose
measured each
day during the
21-day study
43%
50%
40%
29%
30%
20%
10%
0%
Placebo
August 2003
0.5 mg
1.0 mg
P < 0.001
P < 0.001
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Alvimopan for the Management of Chronic
Opioid Bowel Dysfunction (OBD)
• Long-term preclinical toxicity studies initiated
• Two clinical studies in OBD targeted for initiation in 2003
 Will test dosing regimen and extended duration dosing in:
- malignant pain patients
- chronic pain patients
• GlaxoSmithKline is primarily responsible for the completion
of the OBD development program
August 2003
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Adolor/GlaxoSmithKline - Alvimopan
Collaboration
U.S.
Acute Care Hospital
Products
POI, Acute OBD
Additional Products
(Adolor Products)
ROW
Chronic Care Outpatient
Products
Chronic OBD,
Additional Products
(G.I. Products)
GSK Develops &
Sells
Royalty to
Adolor
• $50 million upfront
Co-Development/
Co-Promotion
Profit Split
• $220 million in milestones
• Development expense sharing
for POI, Acute & Chronic
OBD indications in U.S.
• Adolor supplies API
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Adolor R & D Strategy
• Utilize proprietary position in opioid receptors and expertise
in combinatorial chemistry to develop novel small-molecule
therapeutics
• Collaborate at appropriate value points with established
partners for:
 Chronic care in the U.S.
 Opportunities outside the U.S.
• Complement internal development efforts with in-licensing
and M & A
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Discovery and Outsourcing
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August 2003
Established relationship with CiVentiChem in 2002
Expanded relationship in 2003
Supplied critical intermediates for discovery operations
Viewed as an extension of internal research group
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Summary
Target ID
Validation
Drug
Discovery
Development
Sales &
Marketing
• Product platform in pain management
• Alvimopan:
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A potential first-in-class product candidate with substantial potential
market opportunities
ADL 08-7223:
• Multi-target, pain-focused discovery research program
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