PPT Development


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PPT Development

  1. 1. Forward Looking Statements Statements made in this presentation may pertain to information that is not historical; these statements are essentially forward-looking. The audience should be aware that the Company’s businesses are subject to risks and uncertainties that cannot be predicted or quantified; consequently, future results may differ materially from past results and those that may have been expressed or implied by any forward-looking statements. The audience should refer to a more detailed discussion of risks and uncertainties in the most recently filed MD&A, found on the company website at www.cangene.com or on the SEDAR site at www.sedar.com. The Company undertakes no obligation to publicly make or update any forward-looking statements except as required by applicable law. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the difficulty of predicting the timing of regulatory approvals or outcome of regulatory actions or the Company’s ability to obtain required regulatory approvals on a timely basis; changes in the value of the Canadian dollar; the number and size of new contract manufacturing activities; the quantities of products or services purchased by government organizations; dependence on revenues from a small number of significant customers and products as a significant source of net revenue and net income; market and customer acceptance, and demand for new pharmaceutical products; ability to market products; the impact of competitive products, services or pricing; timing or success of product development or launch including the Company’s ability to successfully develop, license or otherwise acquire and introduce new products on a timely basis in relation to competing product introductions; availability and cost of raw materials, especially the cost and antibody concentration of plasma used; the regulatory environment including the high cost and uncertainty associated with compliance with extensive regulation of the pharmaceutical industry; fluctuations in operating results; progress of clinical trials; dependence on corporate relationships; the loss of business from the Company’s concentrated customer base; government policies or actions; the significant research and development expenditures the Company makes to develop products, the commercial success of which is uncertain; the costs and product introduction delays that may result from use of legal, regulatory and legislative strategies by the Company’s competitors; uncertainties regarding patent, intellectual and other proprietary property protections; the expending of substantial resources associated with litigation involving patent and other intellectual property protection of products; the Company’s exposure to lawsuits and contingencies associated with its business; uncertainties and matters beyond the control of management, which could affect the Company’s earnings, as well as the subjectivity inherent in any probability weighted analysis underlying the Company’s assumptions and estimates with respect to the future; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements in accordance with GAAP and related standards; the effects of consolidation of the Company’s customer base. Scientific information that relates to unapproved products or unapproved uses of products is preliminary and investigative. No conclusions can or should be drawn regarding the safety or efficacy of such products. Only regulatory authorities can determine whether products are safe and effective for the uses being investigated. Healthcare professionals are directed to refer to approved labelling for products and not rely on information contained in oral or written presentations. The cautionary statements referred to above should be considered in connection with all written or oral statements, especially forward-looking statements, that are made by the Company or by persons acting on its behalf and in conjunction with its periodic filings with the Ontario Securities Commission, including those contained in the Company’s news releases and most recently filed Annual Information Form. Forward-looking statements can be identified by the use of words such as “expects”, “plans”, “will”, “believes”, “estimates”, “intends”, “may”, “bodes”, and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should management’s assumptions prove inaccurate, actual results could vary materially from those anticipated.
  2. 2. Cangene – Strength in Numbers 22 year operating history 4 approved products producing stable revenue 12 products in development supporting growth and managing risk $750 million (incl. optional orders) awarded in recent biodefense contracts
  3. 3. Cangene is fully integrated  Develop from concept to commercialization  Manufacture process sensitive biopharmaceuticals  Sell niche marketing team for biodefense products and commercial partnerships
  4. 4. Hyperimmunes Peptides Monoclonal antibodies Recombinant proteins Viruses Toxins Bacteria Autoimmune / immune modulation Products Applications Developing Niche Biopharmaceuticals
  5. 5. Supporting a focus on the treatment of infectious disease Approved Hyperimmunes
  6. 6. Approved Hyperimmunes PRODUCT STATUS Research/Preclinical Phase I Phase II Phase III Approved WinRho® SDF (licensed indications) VariZIG™ HepaGam B™ Vaccinia immune globulin
  7. 7. Hyperimmunes What are hyperimmunes? – Natural antibodies concentrated from purified plasma – Confer passive immunity – Immediate clinical benefit Why hyperimmunes? – Shorter development timelines – Economical development and manufacture – Broad applicability to infectious disease
  8. 8. WinRho SDF – Cangene’s First Product Two approved indications Hemolytic disease of the newborn (HDN) • Used in millions of at-risk pregnancies Immune thrombocytopenic purpura (ITP) • Includes ITP associated with HIV Expanding the Franchise – Targeting 10% annual growth through: Entering new markets • Under MRP in Europe • ROW Aggressively marketing FDA-approved liquid formulation in U.S. Long-term growth through: New patient populations with thrombocytopenia (low platelet count) • Dengue Hemorrhagic Fever (DHF) • Side effects associated with Hepatitis C therapy • Potential in other viral, bacterial, protazoal infections
  9. 9. WinRho® SDF Sold/Licensed in 47 Countries Awaiting licensure HDN and ITP HDN only MRP approval, awaiting launch Marketed by Baxter in U.S., Europe and Australia
  10. 10. HepaGam B™  Hepatitis B immune globulin  Health Canada approved for prevention of reinfection following liver transplant  FDA approved for treatment of acute exposure to Hepatitis B – Birth to Hep B positive mothers (90% of infants develop chronic infection) – Healthcare worker exposure  Marketed in the U.S. by Apotex  Worldwide market for Hepatitis B immune globulin products is approximately $115 million
  11. 11. VariZIG™  Varicella zoster (the virus that causes chickenpox) immune globulin  Approved in Canada for treating exposure to chickenpox during pregnancy  Expanded access IND protocol approved in U.S.  Granted orphan drug designation in U.S.
  12. 12. $1 billion Cangene has attracted almost in potential funding awarded by the U.S. government under BioShield I legislation
  13. 13. BioDefense: A Core Market for Infectious Disease Products  Paid R&D costs through licensure  Sales prior to licensure (U.S.)  Ongoing replacement of stockpiled product  Opportunity to sell to foreign governments globally  Manufacturing synergies across multiple products improves margins
  14. 14. BioDefense Pipeline Ricin immune globulin Botulinum toxin immune globulin Anthrax immune globulin Burkholderia antibodies Ebola/Marburg antibodies PRODUCT STATUS Research/Preclinical Phase I Phase II Phase III Approved Vaccinia immune globulin
  15. 15. Vaccinia Immune Globulin  First Cangene hyperimmune added to U.S. Strategic National Stockpile  Indicated for certain adverse reactions to smallpox vaccine  Initial contract up to 100,000 doses  FDA approved in May 2005, 32 months following contract award  $16 million sold to U.K. in fiscal 2006  Sales to other governments internationally  Significant ongoing global potential
  16. 16. Botulinum Toxin Immune Globulin  Botulism toxin a Category A bioterrorism threat  Sole sourced for 5-year, 200,000 dose supply agreement by U.S. HHS  Initial value US$362 million  Further US$234 million in optional task orders  Revenue following “usable product” delivery targeted for end of fiscal 2007  Seeking FDA approval  Potential sales to foreign governments globally
  17. 17. Anthrax Immune Globulin  Anthrax a Category A bioterrorism threat  Awarded 10,000 dose, US$143 million contract expansion of previous development and supply agreement  Supply through end of 2009  Revenue following “usable product” delivery targeted for end of fiscal 2007  Seeking FDA approval  Potential sales to foreign governments globally
  18. 18. Other Biodefense Hyperimmunes in Development Ebola/Marburg virus immune globulins – Developing therapy for hemorrhagic fever viruses – Funding from Canadian CRTI program – Ongoing parallel monoclonal antibody program Ricin immune globulin – Potent plant-derived toxin – Often fatal, even in small doses – No antidote – Funding from Canadian CRTI program – Ongoing parallel monoclonal antibody program
  19. 19. $30 billion MRSA costs the U.S. healthcare system up to each year.
  20. 20. Cangene’s Innovative Infectious Disease Treatment  S. aureus most common cause of surgical wound infections in humans  Antibiotic resistance in S. aureus has increased alarmingly in last 30 years  Hyaluronic-acid-binding peptides  May reduce numbers of Staphylococcus aureus and associated inflammation at surgical wound sites  May have similar activity against other bacteria  Development next steps – Toxicology testing – Determine mechanism of action 0 10 20 30 40 50 60 70 1974 1995 2004 Year MRSAinfectionsas%ofstaphinfections Source: CDC
  21. 21. billions in sales Biologics with are coming off patent in the next few years
  22. 22. Recombinant Proteins  Greater focus on managing drug costs, especially biologics  Cangene leveraging proprietary expertise, technology and state-of-the-art manufacturing facilities  Focus on developing commercially successful versions of approved protein therapeutics  Additional focus on developing second-generation biotech products
  23. 23. Recombinant Protein Pipeline Leucotropin® (cancer) Accretropin™ PRODUCT STATUS Research/Preclinical Phase I Phase II Phase III Approved PEG-Leucotropin® (radiation)
  24. 24. Follow-on proteins in development  Leucotropin® – Branded biosimilar version of GM-CSF – Stimulates production of certain white blood cells – Filed in Canada to enhance recovery in patients with Hodgkin’s disease and non-Hodgkin’s lymphoma following stem cell transplantation – Currently only one GM-CSF product available in the U.S. market – Marketing agreement with Apotex for U.S. and Canada – Developing pegylated version with CRTI funding for acute radiation exposure
  25. 25. Follow-on proteins in development  Accretropin™ – Human Growth Hormone – GH deficiency and Turner Syndrome – Existing hGH worldwide sales in excess of $1.3 billion – Accepted for review by FDA – Marketing agreement with Apotex for U.S. and Canada
  26. 26. Broad Pipeline WinRho® SDF (licensed indications) WinRho® SDF (new patient populations) VariZIG™ HepaGam B™ Vaccinia immune globulin Ricin immune globulin Botulinum toxin immune globulin Anthrax immune globulin Burkholderia antibodies Ebola/Marburg antibodies Leucotropin® (cancer) Accretropin™ West Nile virus immune globulin SARS immune globulin PEG-Leucotropin® (radiation) PRODUCT STATUS Research/Preclinical Phase I Phase II Phase III Approved Developing for new patient populations
  27. 27. Contract Manufacturing  Broad capabilities – Liposome manufacturing – Growing expertise in mammalian cell manufacturing – Live viral vaccine fill/finishing facility  Focus on process-sensitive biopharmaceuticals  International regulatory compliance  Revenue stream independent of Cangene’s own product development initiatives
  28. 28. State-Of-The-Art Facilities Recent facility expansion approximately $35 million
  29. 29. State-Of-The-Art Facilities New plasma fractionation facility –79,000 cu. ft. cleanroom space –Four purification suites –Modular design for maximum flexibility
  30. 30. Five-Year Financial Review Revenue Net Income RevenueinmillionsCanadian$ 200 180 160 140 120 100 80 60 40 20 0 -20 -10 0 10 20 30 40 50 NetIncomeinmillionsCanadian$ Contract R&D and manufacturing 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Biopharmaceutical operations • 2003 and 2004 VIG contract drove extraordinary sales and profits • 2005 impairment loss on Chesapeake facility
  31. 31. Five-Year Financial Review (in $CDN thousands except per share data) Year ended July 31, 2006 Year ended July 31, 2005 Year ended July 31, 2004 Year ended July 31, 2003 Year ended July 31, 2002 Revenues $ 109,336 $ 102,725 $ 156,903 $ 186,213 $ 88,314 R&D expenses (net of investment Tax credits) 24,952 34,212 25,611 18,070 13,157 Income taxes 9,505 5,606 18,703 22,066 10,214 Net Income (loss) for the year 13,143 (15,463) 2 32,542 40,090 10,4341 Basic earnings (loss) per share 0.20 (0.24)2 0.52 0.67 0.181 Weighted -average number of common shares outstanding 65,746,366 64,563,797 63,016,496 60,186,293 59,580,372 At July 31, 2006 At July 31, 2005 At July 31, 2004 At July 31, 2003 At July 31, 2002 Cash $ 7,691 $ — $ 3,999 $ 6,273 $ 783 Debt 32,528 23,279 8,902 36,715 73,252 Total shareholders’ equity 165,937 149,690 160,132 119,397 78,673 1 In 2002, net income reflects an expense of $5.0 million, or $0.08 per share, related to a charge against goodwill 2 In 2005, net income (loss) and earnings (loss) per share reflect an $18.0-million non-cash impairment loss related to the Chesapeake facility
  32. 32. Q1–07 Selected Financials (in $CDN thousands except per share data) Unaudited Quarter ended October 31, 2006 Quarter ended October 31, 2005 Revenues $ 24,784 $ 24,127 R&D expenses 5,670 6,617 Income taxes 3,117 822 Net Income for the period 4,448 591 Basic earnings per s hare 0.07 0.01 Weighted -average number of outs tanding s hares 65,845,753 65,022,637 At October 31, 2006 At J uly 31, 200 6 Cas h $ 8,556 $ 7,691 Debt 1 31,869 32,528 Total s hareholders’equity 170,65 1 165,937 1 $24 million subsequently repaid using proceeds of recent offering
  33. 33. Market Data Listing: TSX Symbol: CNJ Recent Share Price: $8.51 (Feb 21/07) 52-week range: $7.62 – $11.00 Shares Outstanding: 70,238,270 Market Capitalization: $598 million
  34. 34. Building momentum… Revenue Time WinRho® SDF plus other approved products VIG AIG BTIG Recombinant Proteins New Products
  35. 35. Investment Summary  Fully integrated biopharmaceutical company  Stable and growing revenue base from existing approved products and contract manufacturing  Broad pipeline focused on mitigating risk and driving long-term revenue growth  Ability to leverage upside from: – Leadership positions in biodefense and infectious disease hyperimmunes – Recombinant proteins, including follow-on and 2nd generation products – Contract manufacturing of process-sensitive biopharmaceuticals