A Tale of Two(?) IBDsCYMMBiosis for CureColleen Feriod, PhD candidateYujie Wang, MBA candidateMatthew Fleming, PhD candidateMichael Coggins, PhDBrian Cope, MBA/MEM candidate

Executive SummaryThe CYMMBiosis Team Recommends:

• High Unmet Need: For patients with severe conditions, roughly 50% fail to respond to current biologics.

• High Revenue Potential: Annual Price of Biologics = $10,000 - $15,000• Barren Competitive Landscape, especially in the

EU where few biologics are approved

• Greater Market Size, but Higher Consumer Elasticity

• Small Molecule: Lower Science and Safety Risks• Ultimately Unprofitable due to Lower

Willingness-to-Pay; Negative Expected Value• Breakeven Price Exceeds Market Potential

License GTX-001 “Gastrolux”

Pass on GTX-002

IBD Landscape

Crohn’s Disease• Disease mechanism unknown: genetic,

environment, pathogenic factors• Highest incidence and prevalence in age

group 20-29

Ulcerative Colitis• Disease mechanism unknown:

genetic, environment, pathogenic factors

• Highest incidence and prevalence in age group 15-30

Crohn’s DiseaseLines ofTherapy

% of PatientPopulation Current treatment

5-ASA Only 16.69% 5-ASAs are rarely effective, mainly for very mild cases

Steroids + 5-ASA 18.21%Steroids are the most effective, rapid-acting therapies; NOT suitable for long-term use because safety concerns

Steroids + IM 28.79% IMs are first-line choice for maintenance because lower cost than biologics; high toxicity for long-term use

Biologics 17.04%

More doctors prescribe biologics as first-line treatment.Infliximab most prescribed, high efficacy but high side effects.

TreatmentRefractory 10.34% 45-70% patients lose response over time to anti-TNF

biologics therapy

Current Treatment

Ulcerative ColitisLines ofTherapy

% of PatientPopulation Current treatment

5-ASA Only 37.05% Effective induction and maintenance for mild to moderate UC; considered safest

Steroids + 5-ASA 14.21% Steroids are the most rapid-acting therapies; NOT suitable for long-term use because safety concerns

Steroids + IM 26.74% IMs are primary choice for maintenance because lower cost than biologics; HIGH toxicity for long-term use

Biologics 10.42%More doctors prescribe biologics as first-line treatment.Infliximab is the only biologics approved for UC

TreatmentRefractory 4.21% 50-60% patients lose response over time to Infliximab

Target product profileTarget product profile

Criteria• Is it medically plausible?• Is there a penetrable

market?• Is this financially viable?• Is it safe?• Does it perform better

than SOC?

Gastrolux GTX-002

Pathophysiology of IBD

Crohn’s DiseaseUnknown (genetic, environment, pathogenic) Initiation

Visible and invisible symptoms Immune response

Diagnosis of severity: Mild, moderate, severe

Treatment depends on: Incident vs. recurrent Severity of diagnosis

Ulcerative ColitisUnknown (genetic, environment, pathogenic)

Initiation11111

Visible and invisible symptoms Immune 1111

Response1111

Diagnosis of severity:Mild, moderate,111

severe111

Treatment depends on: Incident vs. recurrent111

Severity of diagnosis111

Market Analysis

Crohn’s Disease Ulcerative Colitis

GTX-002GastroluxCompetitors

Key Assumptions of Financial ModelingDiscount Rate: 10% Average WACC for comparable Pharma Cos = 7.2%

Probability of Regulatory Success: 12%

Science and Safety Risks based on historical drug approval data. Individual Phase hurdles based on professional experience.

Cost of Goods Sold: 20% Industry Average = 15%

Annual Price: $12,000 Based on Comparable Drug Costs: Infliximab, Natalizumab, Adalimumab, etc

Rx Price Growth: 3% Roughly the rate of inflation: very conservative estimate.

Potential Customers (treatment population)

Growth Stable Relative to National Expected Population Growth

Low Initial Market Penetrations

1-2% depending on relevance in treatment category.

Growth Plateau Market Share capped at levels previously discussed.

Shift in Treatment Modeled trend of earlier ‘top-down’ maintenance regime.

Financial Analysis

• NPV most sensitive to changes in discount rate and price growth• The breakeven values: discount rate = 13.9%; price = $7,554•Expected Value of Average Scenario = $46,793, 384

Critical Signals in Development

Specifics

Pre-Clinical

-In vitro and in vivo studies on animal IBD models

-Dosage

-Gastrolux vs. SOC

Phase I

-Safety assessment

-Single ascending dose and/ormultiple ascending dose studies

-Food effect study

Phase II

-IIA: Assess dosing requirements

-IIB: Study drug efficacy

Phase III

-Gastrolux efficacy vs. SOC

-Submit for approval to FDA and EMEA

*Efficacy is defined as decrease in symptom severity, increase in time between flares, reduction in disease severity progression, and/or inducing remission during acute flares

MedicalMedicalMarketMarketFinancialFinancialSafetySafetyImproved treatmentImproved treatmentLegislativeLegislativeLong-term surveillanceLong-term surveillance

Signal RisksGastrolux is a viable target Gastrolux is a viable target productproduct•High unmet needHigh unmet need•High revenue potentialHigh revenue potential•Barren competitive landscapeBarren competitive landscape

GTX-002 is not viableGTX-002 is not viable•Greater market size but higher consumer Greater market size but higher consumer elasticityelasticity•Breakeven price exceeds market Breakeven price exceeds market potentialpotential

Reward > Risk?

Evaluation

Biological Risk

Gastrolux– Able to safely and effectively

block VLA-1 in humans and in appropriate patient subset?

– Is VLA-1 present on T2 cells allowing UC as viable market?

GTX-002– Able to safely and effectively

block NFκB in appropriate T cells only?

General– Recent science suggests T17 cells

are a point of convergence for CD and UC.

– Is VLA-1 present on T17 cells?– Can NFκB be targeted in this T

cell subset?

Scenario Assumptions

Realized Market Potential NPV US EU 2032

Best 100% 100% 3.29E+09Ave 50% 33% 9.98E+08

Worse 33% 0% 4.09E+07Failure 0% 0% -3.4E+08

Sensitivity Analysis