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Bio Pharm Collaborations 9 09

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CBI Conference on Collaborations

CBI Conference on Collaborations


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  • Possible 3rd blue background
  • Message is we have negotiated very favorable deals. In addition to substantial upfront and development funding from our collaborators, we own 50% of potential profits in the US in the sanofi deals; 100% of US and 50% ROW in the Bayer deal; and we own 100% of ARCALYST.
  • VelociSuite is a suite of technologies for quickly and cost-effectively identifying and validating novel drug targets and then developing highly specific human antibodies against those targets. We are proud that the NIH selected the target ID and validation technologies, VelociGene and VelociMouse, for its Knockout Mouse Project. In our own labs, we have identified and validated new targets in one year – work that often takes HOW LONG using more conventional approaches.
  • The value of our human antibody technology has been recognized – and monetized – by sanofi-aventis, which in 2007 entered into a global collaboration with us to discover, develop, and commercialize therapeutic human antibodies. [Continue talking through the slide.]
  • Transcript

    • 1. CBI’s 3 rd Annual Bio/Pharmaceutical Collaboration and Transaction Accounting Conference September 22, 2009 Joint Finance Committee Perspectives on How to Best Work with Collaborators and Manage Expectations
    • 2. Our Panelists:
      • Christian Blin, Vice President, sanofi-aventis
      • Christopher Fenimore, Director of Finance, Regeneron Pharmaceuticals
      • Dominic Piscatelli, Sr. Director Finance, OSI Pharmaceuticals
      • Thomas Hess, Chief Financial Officer, Yaupon Therapeutics
      • Christopher Lindblom, Controller, Infinity Pharmaceuticals
      • Susan Melle, Finance Director, GlaxoSmithKline
      • Alan Esenstad, Controller, Human Genome Sciences
    • 3. Lessons Learned – JFC Perspective Keys to a Successful Collaboration
      • Understand and be transparent with your partners
        • Take into account the differences in your partner’s culture, size and objectives
        • Results in a stronger relationship
        • Develops a level of trust and confidence
      • Know your collaboration agreement (the “contract”) and determine how the contract would address particular issues
        • Provide “real-world” instances where a deviation from the contract may be warranted
        • Use the “spirit” of the agreement to determine how issues should be handled that are not specifically defined
    • 4. Lessons Learned – JFC Perspective Keys to a Successful Collaboration
      • Attempt to resolve disputes internally and at the finance level without having to refer to higher governing body
        • Be aware of your partner’s alternative views; negotiate collaboratively, be flexible where prudent
      • Clear and frequent communication
        • Develop formal meeting schedules and establish the principles for how the partners will work together
        • Develop absolute clarity on plans, accountability and status
        • Don’t let key items wait until the next meeting (set the stage via email or phone)
        • Set meeting agendas and take great minutes
    • 5. 3rd Annual Bio/Pharmaceutical Collaboration and Transaction Accounting Conference September 22, 2009 Christian Blin, Vice President, sanofi-aventis Christopher Fenimore, Director of Finance, Regeneron
    • 6. Overview of sanofi-aventis
      • Sanofi-aventis is a global healthcare company engaged in the research, development, manufacture and marketing of healthcare products
        • Business is diversified and includes pharmaceuticals comprising Rx (prescription) drugs, OTC/OTX (over-the-counter / combined OTC and Rx drugs) and generics; vaccines and animal health
      • 2008 net sales: €27.8 B; H1 2009 net sales: €14.5B
      • Pharmaceuticals business focuses on six therapeutic areas: thrombosis, cardiovascular diseases, diabetes, oncology, central nervous system (CNS) and internal medicine
      • Sanofi-aventis has a commercial presence in approximately 100 countries, and our products are available in more than 170 countries.
    • 7.
      • Approved product with $15-20MM in projected annual sales
      • 9 Ph 3 trials underway … Many shots on goal
      • Ph 3 data coming in 2010
      • 3 human mAbs in clinic today; target 2-3 new mAbs to enter clinic each year, 2009-2012; balance of novel and validated targets
      • Cash of $466MM (at 6/30/09) and no debt; resources expected to support operations through 2012
      • Manufacturing expertise; expanding to 50k liters capacity
      • Current market cap of approximately $1.7B – among the 20 largest biotechs
      Regeneron Today Aflibercept (VEGF Trap) cancer VEGF Trap-Eye wet AMD ARCALYST ® (rilonacept) gout
    • 8. Collaboration Agreements * 50% repayment from profits ** plus $475MM of research funding over 5 years Oncology Eye Disease Antibodies Inflammation sanofi-aventis Bayer HealthCare sanofi-aventis – Upfront/milestone payments $130MM $115MM $85MM – Development costs paid by partner * 100% ~ 50% ~ 100%** – Profit split — Regeneron share US 50% 100% 50% 100% Japan ~ 35% royalty 50% 35-45% 100% ROW 50% 50% 35-45% 100% Milestones remaining Regulatory $400MM $70MM – – Sales – $135MM $250MM –
    • 9. Aflibercept (VEGF Trap)
    • 10. Aflibercept (VEGF Trap) Phase 3 Oncology Program
      • Patients randomized to standard of care chemotherapy +/- aflibercept
      • Each study more than 60% enrolled; total of  2,500 patients to date
      • Studies monitored by Independent Data Monitoring Committees (IDMC)
      • Results expected starting in 2010
      Total # of Patients VELOUR study: 2 nd line metastatic colorectal cancer (+ leucovorin, fluorouracil & irinotecan) 1200 VANILLA study: 1 st line metastatic pancreatic cancer (+ gemcitabine) 630 VITAL study: 2 nd line non-small cell lung cancer (+ docetaxel ) 900 VENICE study: 1 st line metastatic hormone resistant prostate cancer (+ docetaxel and prednisone ) 1240
    • 11. Human Antibodies
    • 12. Sanofi-Aventis Antibody Collaboration
      • Global collaboration to discover, develop, and commercialize therapeutic human antibodies
      • Sanofi-aventis funds $475 million of discovery research over five years through 2012
      • Sanofi-aventis funds 100% of development costs for collaboration antibodies
      • Goal is to bring average of 2 to 3 new antibodies into clinical development each year
      • Three antibodies in Ph 1
      • Two more INDs planned for 2009
    • 13. Shaping Medicine, Changing Lives Dominic Piscitelli Sr. Director Finance September 2009
    • 14. An Historical Update Evolution From a Technology Platform to a Cancer Company
      • Tarceva Jointly Discovered in Oncology Partnership With Pfizer
      • 2000: Tarceva Rights Returned to OSI as an FTC Requirement for Pfizer’s Acquisition of Warner-Lambert
      • 2000-2004: Established Oncology Franchise to Ensure Tarceva Success
        • Acquired Oncology Development & Regulatory Capabilities and Built Commercial Organization
        • Established Alliance With Genentech/Roche to Ensure Global Competitiveness
        • Successfully Managed Phase III Trials and FDA Approval of Tarceva in NSCLC & Pancreatic Cancer
      • 2005-2008: Began to Build Framework for a Premier Biotech
        • Increased Investment in Diabetes/Obesity pipeline
        • Continued Investment in Oncology Pipeline
    • 15. Tarceva Collaboration Agreements Highlights
      • Co-Developer of Tarceva
      • Exclusive Marketing Rights for Tarceva in the US
        • OSI has Co-Promotion Rights
      • Operating Losses and Profits are Shared Equally
      • OSI is Responsible for Manufacturing of the Product
      • OSI is Entitled to Certain Milestone Payments
      • Co-Developer of Tarceva
      • Exclusive Marketing Rights for Tarceva in the World Excluding the US
      • OSI receives a 21% Royalty on Net Sales
      • Roche has Exclusive Manufacturing Capabilities for the World ex-US
      • OSI is Entitled to Certain Milestone Payments
      • Three Parties have a Comprehensive Ongoing Clinical Development
      • Program to Support the Long-Term Growth of Tarceva
        • - Tri-Partite R&D Expenses Shared Three Ways
    • 16. Tarceva Sales in the US and Related Revenue Recognition
      • Sales of Tarceva recorded by Genentech
      • 50/50 net profit split recorded as Revenue by OSI on a quarterly basis
      • OSI also records Revenue relating to reimbursement for Manufacturing and Commercial costs
      • Total US Revenue recorded by OSI as a percentage of Tarceva Sales is referred to by OSI as the Conversion Factor
    • 17. Key Committees
      • Global Development Committee (GDC)
        • Responsible for directing the clinical development of the product
        • Review and approve development proposals and budgets
      • Joint Steering Committee (JSC)
        • Approve overall strategy of collaboration
        • Oversee and manage the product development and commercialization
        • Manufacturing related activities
        • Review and approve annual marketing and sales budgets
      • Joint Finance Team
        • Work under direction of JSC
        • Financial, budgetary and accounting issues
      • Joint Project Teams
        • Clinical, Marketing, Sales, etc
    • 18. Adolor/Pfizer Delta Collaboration Thomas Hess Former Chief Financial Officer of Adolor Corporation (currently CFO of Yaupon Therapeutics) © 2008 Adolor Corporation. All rights reserved.
    • 19.
      • Date: December 2007
      • Focus: Delta opioid agonists for pain
      • Lead Compound: ADL5859
      • Upfront Payment: $30M + $1.9M reimbursement for Phase 2a studies
      • Milestones: $232.5MM
      Adolor/Pfizer Collaboration – Highlights
    • 20.
      • Back End
      • United States
      • Profits/Losses shared 60% to Pfizer and 40% to Adolor
      • - US development expenses (external) to be shared in same proportion
      • Rest of World
      • Adolor to receive royalties on Pfizer net sales
      • - ROW development expenses – 100% Pfizer
      • Provisions for adding compounds and indications
      • Development Collaboration
        • Adolor: IND filings and clinical program through Phase 2a
        • Pfizer: Subsequent worldwide development and regulatory approvals
      Adolor/Pfizer Collaboration – Highlights
    • 21.
      • Adolor had the “option” to attend all JSC meetings!
      • Adolor is not obligated to attend collaboration meetings.
      • Two compounds in the clinic as of the collaboration date.
      • Adolor responsible for the development of each compound through Phase 2a and then Pfizer assumes all responsibility.
      • Adolor’s project management projected that compound I & II would be completed in February 2010 (26 months from collaboration inception). Therefore, amortize upfront payment over 26 months. Adjust if Phase II takes more/less time.
      Revenue Recognition Considerations
    • 22. Purdue Alliance: $500M potential over 5 years Hedgehog inhibitor program and discovery pipeline Economics Independence
      • $75 million equity purchase at avg. price of $12.50
      • $50 million line of credit, 10 year balloon note at prime
      • ~$400 million R&D funding over 5 years
      • Up to $200 million in warrant purchases at $15 - $40/share
      • Up to 20% royalties on all ex-U.S. sales
      • Infinity leadership of worldwide discovery and development
      • Infinity to commercialize oncology products in the U.S.
    • 23.
      • Worldwide collaboration : R&D and commercial
      • Compelling economics : Control INFI cash burn, significant downstream participation
        • $70M upfront ; $215M potential milestones
        • R&D cost share and 50/50 WW profit split
        • Co-promotion rights in US
      • Provided global oncology infrastructure and reach
      MedImmune/AstraZeneca alliance on Hsp90
    • 24. HGS / GSK Collaboration
    • 25. GSK / HGS Historical Collaborations
      • GSK is a global pharmaceutical company, with annual sales in excess of US$38B (£24B), arising from pharmaceutical and consumer products over 8 major therapeutic areas. These sales and much of our R&D efforts arise in part from a diverse range of collaborations.
      • HGS is a late-stage biotech company, with three products in Phase 3 development, one of which is being co-developed with GSK.
      • Ground breaking HGS/SB Genomic collaborative agreement signed in 1993
        • Shared access to HGS’ sequence dB for target discovery
      • GSK exercised option to co-develop and co-promote BENLYSTA TM in 2005.
        • Agreement signed in 2006.
    • 26. GSK / HGS BENLYSTA Collaboration
      • HGS wrapping up Phase 3 development
      • 50 50 cost sharing of development costs since 2006 (Clinical expenses, FTEs, drug supply, certain outside services)
      • Global commercialization
        • HGS GSK share U.S. and ex-U.S. commercialization
    • 27. Roles & Responsibilities
    • 28. HGSGSK Governance Structure Joint Steering Committee
        • Joint Manufacturing
        • Committee
      Joint Development Committee Global Joint Marketing Committee Joint Finance Committee & Sub-teams
    • 29. Joint Finance Committee
        • Lead representative from each partner, with additional financial personnel on team
        • Participation from project management, operations and other areas (either ongoing or ad-hoc)
    • 30. Joint Finance Committee Role
      • Role:
        • Prepare and monitor budgets and forecasts and changes to plan
        • Participate in operational team meetings
        • Support collaboration governance committees
        • Support analysis and evaluation of program changes
      • Establish and maintain effective financial oversight
        • Monthly or ad-hoc meetings, facilitated by standard financial reviews and templates
        • Review and approval process through governance structure for life cycle plans or annual budgets, actual expenses, changes or other key items
    • 31. Panelist Q&A
    • 32. JFC Panel Contact Information
      • Doug McCorkle (Regeneron): [email_address]
      • Christian Blin (sanofi aventis): [email_address]
      • Christopher Fenimore (Regeneron): [email_address]
      • Dominic Piscatelli (OSI): [email_address]
      • Thomas Hess (Yaupon): [email_address]
      • Christopher Lindblom (Infinity): [email_address]
      • Susan Melle (GlaxoSmithKline): [email_address]
      • Alan Esenstad (Humane Genome Sciences): [email_address]