BIOTECH’S CONUNDRUM IN IMMUNO- ONCOLOGY ......BIOTECH’S CONUNDRUM IN IMMUNO-ONCOLOGY: WEIGHING HOT VERSUS COLD TUMORS, CPI-NAÏVE VERSUS CPI-EXPERIENCED PATIENTS Jeffrey M. Bockman,

BIOTECH’S CONUNDRUM IN IMMUNO-ONCOLOGY: WEIGHING HOT VERSUS COLD TUMORS, CPI-NAÏVE VERSUS CPI-EXPERIENCED PATIENTS

Jeffrey M. Bockman, PhDExecutive Vice PresidentOncology Practice HeadDecember 4th, 2019

PANELISTS

MODERATOR

3CHBC-CRI Immuno-Oncology Webinar© Cello Health BioConsulting 2019

Background on Cello Health BioConsulting, Previously Defined Health

We consult with the world’s most innovative biopharma companies, applying our strategic insight to early-stage platforms and programs. Our advice reduces development and commercial risk and increases stakeholder value.

Our Strategic Advice, given early in development (pre-PoC), drives value along the development continuum and influences ultimate outcome.

5

Introductory Slides on Immuno-Oncology


0

50

100

150

200

250

Sale

s ($B

)

WW Oncology Products Sales:IO vs. Non-IO

Non-IO IO

Non-IO CAGR (2013-2024): 8%

020406080

100120140160180

Sale

s ($B

)

US Oncology Products Sales:IO vs. Non-IO

Non-IO IO

Non-IO CAGR (2013-2024): 11%IO CAGR (2013-2024): 29%

IO CAGR (2013-2024): 30%Total Oncology CAGR (2013-2024): 14%Total Oncology CAGR (2013-2022): 11%

♦ Not just growth off a small base but tremendous uptake due to the clinical value being provided.♦ Total sales of IO assets in 2024 are estimated at $37B in US and $63B WW.

EvaluatePharma; DH Analysis

Immuno-Oncology Products Still Represent a Minority of the Overall Branded Cancer Market, but They Are Forecasted to Grow Strongly with US CAGR of 29% Through 2024


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Phase 1 Phase 2 Phase 3 Pre-registered Registered Marketed

Num

ber o

f Age

nts

Phase of Development

US IO Pipeline by Highest WW Phase and Mechanism

Viral vaccine and/or oncolytic

Other IO (ADC)

Other Cell Therapy

Innate Immunity (antagonist)

Innate Immunity (agonist)

Immuno-metabolism

Cytokine

Costim

Checkpoint

CAR-T cells

Cancer vaccine

Bispecific (IO Redirecting)

Adis R&D Insight; Clarivate Analytics Cortellis; company websites; clinicaltrials.gov; CHBC Analysis

The Clinical Pipeline Reflects a Diverse Set of MOAs & Therapeutic Modalities: Reflecting a Richness of Targets But Perhaps Insufficient Translational Insights


Clinical Development Activity Across Liquid and Solid Tumors Varies by Therapeutic Modality, CPIss Cluster in Solid Tumors and ACT in Liquid Ones

Adis R&D Insight, Clarivate Analytics Cortellis, CHBC Insight, *NOTE: Assets designated for multiple indications are double-counted.

Indication Distribution – Top 20 Pharma Clinical Activity in Cell Tx, CPI, and OV by Count of Assets

Heme Malignancies Solid Tumors GC

MOA –Asset Count AL

L

AML

BPDC

N

CLL

CML

CTCL

/PTC

L

DLBC

L

Hem

e M

alig

nanc

ies

HL Lym

phom

a

Mul

tiple

mye

lom

a

NHL

Bilia

ry C

ance

r

Blad

der C

ance

r

Brea

st C

ance

r

Canc

er M

etas

tase

s

Cerv

ical

Can

cer

Colo

rect

al C

ance

r

Esop

hage

al C

ance

r

Fallo

pian

Tub

e Ca

ncer

Gal

lbla

dder

Can

cer

Gas

tric

Can

cer

Gas

troi

ntes

tinal

Can

cer

GBM

/Glio

ma

HCC/

Live

r Can

cer

Head

And

Nec

k Ca

ncer

Mel

anom

a

Mer

kel C

ell C

arci

nom

a

Mes

othe

liom

a

NSC

LC

Ost

eosa

rcom

a

Ova

rian

Canc

er

Panc

reat

ic C

ance

r

Peni

s Tum

or

Perit

onea

l Can

cer

Pros

tate

Can

cer

RCC/

Rena

l Can

cer

Sarc

oma

SCLC

Soft

Tis

sue

Sarc

oma

Solid

Tum

or

Squa

mou

s Cel

l Car

cino

ma

Gen

eral

Can

cer

TOTA

L

Cell Tx 10 10 1 2 1 2 6 1 16 7 1 1 1 3 1 3 2 1 3 3 2 1 1 2 1 8 27 117

CPI 1 2 1 2 2 4 4 3 2 16 4 1 3 9 3 1 3 8 10 24 3 17 2 2 1 2 12 1 6 29 4 19 201

OV 1 1 1 1 1 2 2 1 6 6 22

TOTAL 10 11 1 4 1 1 4 8 4 5 19 7 2 17 4 1 4 10 3 1 1 4 1 4 9 11 26 3 3 21 1 5 5 1 2 4 13 1 8 1 43 4 52 340

Asset Count Key

15 301

Legend


CRI Analysis - Nature Reviews Drug Discovery, 04 November 2019

Hence the Rapid Increase in Combination Studies of Anti-PDx Agents With a Diverse Range of IO and Non-IO Approaches as Shown by the Most Recent CRI Analysis


CRI, Nature Reviews Drug Discovery Sept 27, 2019

CRI’s Analysis Also Shows the IO Pipeline Growth Is Driven Mostly by Approaches That Are Well-Trodden

Fig. 1 | Overview of all 3,876 active IO agents in the current global drug development pipeline. In the past 2 years, 1,846 new agents have been added to the immuno-oncology (IO) pipeline, an increase of 91%.


HOTTER TUMORS

COLDER TUMORS

Source: CHBC Analysis: ESMO, ASCO, AACR, ASH abstracts; prescribing information; company press releases; N Engl J Med 2017; 377:2500-2501*Efficacy data is weighted by the number of patients per trial, total number of patients across all trials and number of trials represented are in y-axis label

Advances with CPIs, While Dramatic in Selected Settings, Remain Incremental and/or Limited in Many Others, But Nevertheless Are Raising the Bar Across an Increasingly Diverse Set of Indications & Settings


BCIQ; CHBC Analysis; FierceBiotech *Note: All counts include undisclosed and missing deal values

129 117 129

47

117

95107

51

0

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2016 2017 2018 2019

No.

of D

eals

Non-IO vs IO Licensing and M&A Deals: 2016 to 2019Q3 (n=792)

Non-IO

IO

IO Deals Slowing with Less Than 50% in 2019 IO – Is This Maturing Understanding and a Higher Bar, or Just Fatigue Along with a Rise of New Non-IO Options?

RISKY again?

Overall Licensing and M&A deals have decreased 63% from 2018 to 2019Q3

Oncology has decreased 58% from 2018 to 2019Q3, suggesting oncology is still holding strong even with the global deals decreasing.

Expected Q4 deals


BCIQ; CHBC Analysis

*Note Left graph = All counts include undisclosed and missing deal values, while right graph excludes them

75 Bn

48 Bn

0 Bn

10 Bn

20 Bn

30 Bn

40 Bn

50 Bn

60 Bn

70 Bn

80 Bn

IO Non-IO

USD

($Bn

)

Total Combined Licensing Deal Values: 2016-2019Q3(n= 182)

IO

Non-IO

But While the Number of Deals Are Slowing, the Dollars Going into IO Is Still Phenomenal

3943

IO Vs Non-IO Licensing Deals Distribution: 2019Q3 (n=82)

IO Non-IO


70%

30%

2018 Venture (Seed & Series A) Financing Distribution

$2.23B Total Raised in 2018

IO Non-IO

24%

76%

2019 To-Date Venture (Seed & Series A) Financing Distribution

$0.73B Total Raised in 2019

IO Non-IO

BCIQ; CHBC Analysis.

Funding for IO Newcos Dropped This Year, With Non-IO Fundings Taking a Larger Share


In Fact There Were Significantly Less Early Investments into IO Companies this Year Compared to 2018

BCIQ; CHBC Analysis.

3831

2018 Venture (Seed & Series A) Financing Distribution by IO vs. Non-IO Companies

(n=69)

IO Non-IO

1417

2019 To-Date Venture (Seed & Series A) Financing Distribution by IO vs. Non-IO

Companies(n=31)

IO Non-IO

1.9B

0.8B

IO Non-IO

2018 Distribution by Amount Raised ($)

0.2B

0.6B

IO Non-IO

2019 Distribution by Amount Raised ($)

50M

26M

IO Non-IO

2018 Distribution by Financing Average per

Company ($)

13M

33M

IO Non-IO

2019 Distribution by Financing Average per

Company ($)


One Third of Biotech Pipeline in Companies <$100 mm Essentially Worthless Regardless of Development Phase

BCIQ, Reuters

Cash Higher vs Market

Cap33%Cash Lower

vs Market Cap67%

Cash vs Market Cap for Small Public US Biotech Companies (MC <$100M, n=203)

8

3

22

4

13

5

13

16

11

5

41

3

24

10

25

0

5

10

15

20

25

30

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40

45

DR/PC P1 P1/2 P2 P2/3 P3 Reg MRKT

Number of Small Public US Biotech Companies By Lead Product Status (MC <$100M, n=203)

Cash Higher vs Market Cap Cash Lower vs Market Cap


Nearly 3 of 4 Companies From IPO Class of 2014 Have Lost Value

Current Share Price Below IPO

Share Price71%

Current SharePrice Above IPO

Share Price29%

Active 2014 IPO Companies (n=50)*Share Price Comparison – IPO Share Price vs Current Share Price

BCIQ

* Companies that had an IPO in 2014, but are currently inactive, were removed from this analysis (n=23)


Platform DevelopmentEven Spectacular Science Requires Early-Stage Strategy to Manage Risk and Drive Valuation

There is inherent value in early science or platform technology that promises to generate multiple clinical programs, often targeting a ranging of opportunities from large patient groups with an established SOC to orphan populations with high unmet need.The decision to enter the clinic and how is of paramount importance as cash burn and risk increase exponentially.Strategic vision/thinking needs to see the product through to the market, not just to a partnering event mid-stage, to drive valuation and create optionality for the company.

• The first and most critical decision: Which disease(s) do you choose as your first target?• What are subsequent indications, and when is enough, enough (i.e., unfocused deployment of capital)? • What factors drive these decisions (e.g., strength of biological rationale/competitive differentiation; trial duration/

time to value inflection, size of patient population/expected commercial spend)?• Does your choice de-risk the program from a scientific, clinical/regulatory, and commercial perspective?

Key Questions at

this Stage


Pre-Clinical & Early Clinical ProgramsDefining a Target Product Profile that Passes the Proof-of-Relevance Test (Early Relevance Profile)

The ultimate goal of developing a drug through the clinical/regulatory process is maximizing value, not just FDA approval. Clinical failure cannot always be predicted or prevented, but commercial failure often can and should be considered at an early stage with critical decisions are made to de-risk and drive value.It is imperative that R&D and Commercial objectives are aligned and that early-stage product profiles focus on value (Early Relevance Profile), outlining attributes that meaningfully differentiate the product in the future competitive landscape to all key stakeholders.

Value and Relevance Drivers:• What specific patient segment will derive the most value?• What product label will define competitive positioning in the treatment algorithm?• Which clinical endpoints will clearly establish clinical value and clearly differentiate from the competition?• How do these factors change as intrinsic (product-related) and extrinsic (market-related) factors evolve over time?• What are the key market access issues and barriers that will influence level of access to product?

Key Questions at

this Stage


Early Relevance ProfileTPP for an Early-Stage Program that Focuses on Value to Key Stakeholders

Early Relevance Profiles focus on key considerations associated with key stakeholders

Physician Payer

Partners

• Patient segment that will derive the most value

• Journey to treatment

• Dosing/administration requirements

• Level of access to treatment

• Impact of out of pocket expense

• Clear value proposition and position in treatment algorithm

• Label indication

• Strength of data/evidence

• Safety/tolerability profile

• Clear differentiation from alternative treatment options

• Requirements for access

• Level of unmet need (e.g. how many substitutable alternatives can be “step-edited” in front of candidate)

• Indication severity (where does it fall on continuum between fatal and cosmetic)

• Strength of evidence (trial comparator, structure)

• Duration of treatment (chronic, short-term)

• Medical benefit or pharmacy benefit

• Credibility and ease-of-access metrics for value-based contracts

• Patient financial assistance program relative to competitor’s programs

Patient

Other Stakeholders


PoR: A Strategic Concept Arising from Earlier Tough Times Was Initially a Survival Strategy –Now It Has Become a Proactive Value-Inflection Strategy

PoR =ProofofRelevance

To survive, biotech companies must embark on clinical programs that go beyond scientific proof-of-concept (demonstrating that the science is applicable to the disease) to prove that its approach provides a clinically and commercially relevant value proposition that makes the program attractive to all stakeholders


Acknowledgements to the Great Oncology Consultants & Analyst Team at Cello Health BioConsulting (previously Defined Health)

Sonam Sharma, MS, Sr Research Analyst

Armand Avetisian, Research Analyst

Adam Kaufman, Research Analyst

Olivia Dineen, Research Analyst

Brian Caffrey, Research Analyst

James Lee, PhD, Associate Principal, Oncology Team Leader

Mike Rice, MS, MBA, Principal

Joel Sandler, PhD, Associate Principal

Thanks!Questions???

Documents

BIOTECH’S CONUNDRUM IN IMMUNO- ONCOLOGY ......BIOTECH’S CONUNDRUM IN IMMUNO-ONCOLOGY: WEIGHING HOT VERSUS COLD TUMORS, CPI-NAÏVE VERSUS CPI-EXPERIENCED PATIENTS Jeffrey M. Bockman,