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1
Investor DayNovember 12, 2015
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 1
2
Special Note Regarding Forward-Looking StatementsThis presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements with respect to our ability to bring several innovative products to market in 2016; expectations regarding the timing of communications with regulatory authorities, submissions to regulatory authorities and the licensure and approval of products; expectations regarding development programs and the successful development of our product candidates; clinical trials and studies, including without limitation the announcement of results of such trials and studies; expectations regarding the timing of commercialization and manufacturing of products; the sufficiency of financial resources; expected future cash balance and liquidity; licensing initiatives and collaborations; the Company’s plans and opportunities, including without limitation offering a unique portfolio of innovative therapeutics; and the Company’s belief that its products and product candidates will result in improved outcomes for pets. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our limited operating history and expectations of losses for the foreseeable future; our lack of commercial sales; our failure to obtain any necessary additional financing; market conditions and our ability to raise capital under the shelf registration statement from the sale of our securities; our substantial dependence on the success of certain of our lead product candidates; our dependence on novel technologies and compliance with complex regulatory requirements; our inability to obtain regulatory approval for our existing or future product candidates; the lack of commercial success of our current or future product candidates; our inability to realize all of the anticipated benefits of our acquisitions of Vet Therapeutics and Okapi Sciences; uncertainties regarding the outcomes of studies regarding our products; the uncertainty of outcomes of the development of pet therapeutics, which is a lengthy and expensive process; effects of competition; our inability to identify, license, develop and commercialize additional product candidates; our failure to attract and keep senior management and key scientific personnel; our reliance on third-party manufacturers, suppliers, partners and other third parties which conduct our target animal studies and certain other development efforts; unanticipated difficulties or challenges in the relatively new field of biologics development and manufacturing; our ability to market our products only for the treatment of indications for which they are approved; our small commercial organization; difficulties managing the growth of our organization; our significant costs of operating as a public company; risks related to the restatement of our financial statements for the year ended December 31, 2013 and the identification of a material weakness in our internal control over financial reporting; risk relating to the impairment of intangible assets AT-004, AT-005, AT-007 and AT-011; changes in distribution channels for pet therapeutics; consolidation of our customers; limitations on our ability to use our net operating carryforwards; impact of generic products; unanticipated safety or efficacy concerns; our limited patents and patent rights; our failure to comply with our intellectual property license obligations; our infringement of third party patents and challenges to our patents or rights; litigation resulting from the misuse of our confidential information; the uncertainty of the regulatory approval process; our failure to comply with regulatory requirements or obtain foreign regulatory approvals; our failure to report adverse medical events related to our products; legislative or regulatory changes; the volatility of our stock price; our status as an “emerging growth company,” as defined in the JOBS Act; the potential for dilution if we sell shares of our common stock in future financings; the significant control over our business by our principal stockholders and management; the potential that a significant portion of our total outstanding shares could be sold into the market in the near future; effects of anti-takeover provisions in our charter documents and under Delaware law; and our intention not to pay dividends. These and other important factors discussed under the caption "Risk Factors" in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 16, 2015, along with our other reports filed with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this presentation. Any such forward-looking statements represent management's estimates as of the date of this presentation. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this presentation.
Safe Harbor Statement
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 2
3
GRAPIPRANT TABLETS, BUPIVACAINE LIPOSOME INJECTABLE SUSPENSION and CAPROMORELIN ORAL SOLUTION have not been approved by the FDA’s CVM for use in animals, so claims that they are effective or safe in dogs and cats cannot be made.
None of the Aratana Therapeutic candidates referenced in this presentation have FDA CVM approval.
Disclaimer
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 3
4
Today’s Speakers
Steven St. Peter, M.D.President & Chief Executive Officer
Julia StephanusChief Commercial Officer
Craig Tooman, MBAChief Financial Officer
Ernst Heinen, DVM, PhDChief Development Officer
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 4
5
Today’s Agenda Company Overview Commercial Strategy
– Our Customer – Our Market– Our Brands– Our Pet Therapeutics
Company Financials– P&L Considerations– Balance Sheet
Partnership Opportunities Closing Remarks Q&A
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 5
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Company OverviewThe Central Idea
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 6
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$0
$10
$20
$30
$40
$50
$60
1994
1996
1998
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015($Billions)
Our MarketPet Owner Spend in the US
65%Households
with Pets
78M86M
Source: APPA Nov 2015
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.7
8
What Problem Needs Solving? Innovation Gap
* NCE defined as new chemical entity not previously approved in humans or animals (excluding parasite drugs)
6 6
4 4
2
0
2
0
2011 2012 2013 2014
NADAs for dogs/cats Pet Therapeutic NCEs*
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 8
9
What are the Precedents?
For control of pruritus associated with allergic dermatitis in dogs Early success creating market Launched in 2014 Product remains “on allocation”
(supply-constrained) Peak sales estimated > $300M Twice per day dosing then once
For the relief of pain and inflammation associated with
osteoarthritis in dogs Partially addresses unmet need Launched 1996 Continues to grow despite
generics and other Coxibs Created a $300M market in US Use limited by perceived
tolerability issues Veterinarians ready for
something different
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 9
10
The Roadmap
Defining and selling our model
Proving our model
Achieving financial viability
Leveraging the brand
Demonstrate high revenue growth Achieve specialty pharma-like margins Operate in a highly capital-efficient manner Maintain a competitive advantage
Success in the clinic Regulatory approvals Expand the portfolio Shape the commercial opportunity Product level & ecosystem-wide partnerships
Prov
ing
our m
odel
Achi
evin
g fin
anci
al v
iabi
lity
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 10
11
The Specialty Pharma Model
Multiple Species Steps Direct to Species
~$1.3B ~$10M
~10 Years ~5 Years
Majority Third Party Payers Majority Private Payers
Generic & Biosimilar Pressures Veterinarian Brand Loyalty
Multiple Transactions Direct Access
Dev
elop
men
tCo
mm
erci
aliz
atio
n
PetsHumans
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 11
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Regulatory EnvironmentFDA Center for Veterinary Medicine
Proof of ConceptINADChemistry, Mfg. & Controls (CMC)SafetyEffectivenessLabeling, FOI Summary, OtherAdministrative NADA
Year 5Year 1 Year 2 Year 3 Year 4
USDA - Center for Veterinary Biologics
Proof of ConceptManufacturingFile for Product LicensePreclinicalField Safety and EfficacyConditional Product License*Extended Field Safety and Efficacy StudyFull Product License* Conditional licenses granted under special circumstances
Year 5Year 1 Year 2 Year 3 Year 4
Pilot ---> Pivotal
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 12
13
Field Safety & Efficacy
Conditional and/or Full Licensure
Extended Field Efficacy and Post Market Studies
FDA CVM Therapeutics
USDA CVB Therapeutics
Pilot Studies Pivotal Studies Phased Submission Commercial
*Other therapeutics are at various early-stages of development, however Aratana may explore opportunities to partner on products at various stages of development.
Submit NADA early-2016; anticipated launch fall 2016
Submit NADA early-2016; anticipated launch fall 2016
Submit NADA late-2016; anticipated launch 2016
Pain, Allergy, Antivirals, Periodontal and Other Therapeutics*
AT-016Allogeneic Stem Cell OA
AT-018Atopic Dermatitis
AT-014Canine Osteosarcoma Vaccine
AT-005T-cell Lymphoma
Other Therapeutics*
Commercial
®
®
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
Canine Lymphoma Monoclonal Antibody B-cell
13
14
Regulatory Progress
CMC Technical Section Complete Letter
Safety Technical Section Complete Letter
Effectiveness Technical Section Complete Letter
Product Labeling
Administrative NADA
® ®
Commercial
Pilot Study
Pivotal Study
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 14
15
Commercial Strategy
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
16
Veterinarians
Our Customer
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 16
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Our CustomerDemographics
66,000 companion animal veterinarians
23,000 companion animal hospitals
850 specialty practices
22 boarded specialties and many sub-specialties
30 veterinary schools
80% new graduates are women and now represent the majority in practice
1,800 corporate practices
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 17
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11,000 specialists
Our CustomerPractice Types
Corporate Practices In-pet store
‒ e.g. Banfield Stand-alone
‒ e.g. VCA
Corporate Practices VCA Blue Pearl Etc.
Primary Care General Practice Mobile Emergency Care Vaccine Shelter Feline Only
Specialty FocusWellness Focus55,000 primary care
Specialty Practices Multi
- AMC- Red Bank- Angell- Etc.
Single
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 18
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Annual Exams17%
Diagnostics17%
Surgery17%Non-Invasive
Procedures 9%
Pet Food 4%
Heartworm 6%
Flea-Tick 6%
Vaccines15%
Our CustomerPractice revenue mix
Other Pharma 9%
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 19
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A Motivated Customer
“I need more ways to help. There are a great number of suffering pets and I’m interested in novel therapies.”
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 20
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69%66%
53%
38%41%
43%
33%
26%23%
15%16%
18%
25% 24%
39%
29%
9%
24%23%
42%
37%
42% 41%
16%
40%
34%
43%41%
Stands byProducts
ImprovesStandard of Care
VeterinarianExclusivity
"GameChanging"Products
FDAApproved Rx
KnowledgeableSales Force
ContinuingEducationPrograms
Importance Company A Ratings Company B Ratings Company C Ratings
Customer Expectations
Source: Trone Brand Energy Veterinary Pharma Needs SurveyOctober 2015, n=267
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 21
22
Insurance
Our Payers
Provider Patient
Human Health Model
Pet Owner InsuranceVet
Pet Therapeutics Model
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 22
23
Private Practices
Our Sales Channel
Pet Owners
Pick-Up/Pharmacy/Home Delivery
Direct Sales Corporate Sales Distributors GPOsSales Team Corporate
Specialty NationalRegional
Disruptive Technologies
OnlineSpecialty
eCommerce
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 23
24
Top Commercial Geographies
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
25
Veterinarians
Our Brand and AudiencesAratana is leading and defining pet therapeutics, delivering new beginnings to raise the standard of care for pets, the
families who love them and veterinarians who care for them.
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
25
26
Awareness Activities
Corporate Advertisements
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 26
27
Awareness Activities
Corporate Advertisements Conference Attendance
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 27
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Awareness Activities
Corporate Advertisements Conference Attendance Veterinarian Microsite
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 28
29
Company Awareness2014 2015
98%
93%
5%
98%
3%
99%
98%
2%
1%
1%
98%
78%
97%
98%
2%
11%
0% 20% 40% 60% 80% 100% 120%
Virbac
Vetoquinol
VetDC
Pfizer/Zoetis
Nexvet
Merial
Merck
Kindred Biosciences
Karyopharm Therapeutics
Jaguar
Elanco/Novartis
Ceva
BI Vetmedica
Bayer
Aratana Therapeutics
AB Science
97%
95%
2%
99%
4%
97%
98%
3%
2%
2%
98%
83%
99%
97%
13%
11%
0% 20% 40% 60% 80% 100% 120%
Virbac
Vetoquinol
VetDC
Pfizer/Zoetis
Nexvet
Merial
Merck
Kindred Biosciences
Karyopharm Therapeutics
Jaguar
Elanco/Novartis
Ceva
BI Vetmedica
Bayer
Aratana Therapeutics
AB Science
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 29
30
Aratana as Endorser Brand
®
®
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 30
31
Commercial Readiness
Sales Marketing Vet Services
Commercial Team
Systems and Processes
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 31
32
Therapeutics Portfolio
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
33
FDA CVM Therapeutics Pilot Studies Pivotal Studies Phased Submission Commercial
Submit NADA early-2016; anticipated launch fall 2016
Submit NADA early-2016; anticipated launch fall 2016
Submit NADA late-2016; anticipated
launch 2016
®
®
Late-Stage Therapeutics
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 33
34
Market OpportunityOsteoarthritis (OA) Dogs in the U.S.
14.7 million dogs are diagnosed with OA
9.7 million dogs are treated for OA
2.4 million dogs treated >20 days
with NSAIDs($180M)
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 34
35
$177M$180M
Ex-Manufacturers Revenue
50% Acute < 20 Days
50% Chronic> 20 Days
$357 Million U.S. Revenue
NSAID Market Size
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 35
36
MILD
Osteoarthritis Treatment LandscapeVeterinarians 45% Participation
MODERATE SEVERE
Disease Progression
NUTRACEUTICALS
The need for pain relief is weighed with the concern
for side effects.
These products offer less of a clinical benefit, but with few-to-no side effects.
COXIB NSAIDs
$690 Million Retail($200 Million Retail—through the Veterinarian)
$359 Million RetailThough the Veterinarian
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 36
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Chronic OA NSAID Competitors2.4 Million Dogs with OA
Rimadyl 30%
Generic Carprofen
23%
Metacam 20%
Deramaxx 14%
Previcox9%
Meloxicam 4%
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 37
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Veterinarian Dilemma in OA
“Often, when I see a young or middle-aged dog with OA-associated pain,
I generally try to avoid the use of COX NSAIDs to save them for later. That way I don’t have the dog on COX NSAIDs for its entire life.”
“Too many pets suffer because we don’t have medications they can tolerate.I want something that works well without the side effects.”
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 38
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A New Beginning in OA Treatment
A new, first-in-class, non-COXIB, non-opioid, daily pain medication that offers control of chronic pain and inflammation associated with osteoarthritis in dogs.
First-in-class anti-inflammatory piprant product
Highly targeted EP4 Prostaglandin Receptor Antagonist
Flavored tablets, daily dosing
Multiple strengths and quantities
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 39
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For Osteoarthritis Pain
Medical Need Established market of mostly NSAIDs Existing NSAID products have side effects and require monitoring Better tolerated product for pain and inflammation of osteoarthritis
Our Solution EP4 PRA (Prostaglandin Receptor Antagonist)
‒ Potential for significantly improved tolerability profile vs. Coxibs ‒ No need for routine serum hematology and chemistry monitoring
Technical sections complete for effectiveness, safety and CMC in dogs FDA approval in dogs anticipated in 2016
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 40
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Pivotal Dog StudyDesign Blinded, placebo-controlled, multi-site study 280 client-owned dogs 2 mg/kg once daily by tablet over 28 days Owner assessment
Primary Endpoint: Success Rate on Day 28* AT-001 48% vs. Placebo 31% (p < 0.05)
Other Effectiveness Parameters Successes Pain Severity Score (PSS) % improvement on Day 28 (p < 0.01) Pain Interference Score (PIS) % improvement on Day 28 (p < 0.01) Success rates CBPI on day 7, day 14, day 21 (p < 0.05 at each)
Mild Adverse Events
®
* Success rate based on Canine Brief Pain Inventory (CBPI)CBPI = Pain Severity Score (PSS, 0 to 10) & Pain Interference Score (PIS, 0 to 10)Success = Improvement of PSS of 1 or more and improvement of PIS of 2 and more and overall impression same or better
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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EP4 PRA Piprant Biology®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 42
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Effectiveness Data
Pain Severity Score (PSS) and Pain Interference Score (PIS) improvement over 28 days
% C
hang
e (+
/- 1
SEM
)
-40
-30
-20
-10
0
Study Day
Day 0 Day 7 Day 14 Day 21 Day 28
Placebo GALLIPRANT
Change in PSS compared to day 0
% C
hang
e (+
/- 1
SEM
)
-50
-40
-30
-20
-10
0
Study Day
Day 0 Day 7 Day 14 Day 21 Day
Placebo GALLIPRANT
Change in PIS compared to day 0
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 43
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Safety and Tolerability
In a 9-month toxicity study in laboratory dogs mild gastro-intestinal signs including vomiting, soft or mucoid and occasionally bloody stools were observed. Dose dependent decreases in total protein and albumin were reversible. There were no changes in kidneys and livers and no ulcers*
The most common adverse reactions in the field studies were emesis, diarrhea and decreased appetite
There were no clinical relevant changes in blood chemistry Blood monitoring will not be required
* Evaluation of the safety of long-term, daily oral administration of grapiprant, a novel drug for treatment of osteoarthritic pain and inflammation, in healthy dogs. American Journal of Veterinary Research, Vol 76, No. 10, Oct. 2015
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 44
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Timeline in Dogs
Proof of ConceptChemistry, Mfg. & Controls (CMC) ©
Target Animal Safety ©
Effectiveness I R ©
Labeling, FOI Summary, OtherNADA
20172013 2014 2015 2016
US
I – Initiation of Pivotal Field StudyR – Top Line Results© – Technical Section Complete Letter
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 45
46
Positioning
MILD MODERATE SEVERE
Disease Progression
NUTRACEUTICALS
The need for pain relief is weighed with the concern for
side effects.
Because of the tolerability that comes with a more targeted EP4 PRA therapy, veterinarians
won’t have to sacrifice clinical benefit.
These products offer less of a clinical benefit, but with few-to-no side effects.
COXIB NSAIDs
®
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 46
471. Ipsos, Quantitative Research, July 2015.
A Doctors
B Doctors
C Doctors
D Doctors
E Doctors
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 47
481. Ipsos, Quantitative Research, July 2015.
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 48
491. Ipsos, Quantitative Research, July 2015.
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.49
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Chronic Dog Other Dog
Cat
Market Opportunity®
Share of $180 million+ market growth
New Category
Royalties and Milestones
EU and ROW Partners
Royalties and Milestones
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 50
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Market OpportunityPost-operative pain dogs in the U.S.
20.8 million dogs undergo surgery
5.8 million dogs have very painful surgery
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 51
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Post-Op Pain Treatment Landscape
COX Inhibiting
NSAIDs–Rimadyl–Generic Carprofen–Metacam–Derramax–Previcox
Opioids–Butorphanol–Fetanyl–Recuvyra–Hydromorphone–Tramadol
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 52
© GfK 2014 | New Product Research: Quantitative Results | January 2014 53
D5. Now let’s focus on opioids. Again, please consider all of the dogs and cats that undergo surgery and indicate what percent receive each specific opioid listed below to control post-surgical pain.
Dogs Cats
Butorphanol 21% 23%
Buprenorphine 15% 42%
Hydromorphone/Morphine/Oxymorphone 15% 5%
Fentanyl 2% 1%
Recuvyra 0% 0%
Other opioid 6% 2%
Did not receive an opioid 41% 27%
Total 100% 100%
n=152
Opioid use appears to be much more common in cats; 41% of dogs did not receive any opioid at all while 42% of cats received buprenorphine.
Post-op Opioid Use(mean)
54
Veterinarian Dilemma in Post-Op Pain
“I am concerned about the side effects of opioids and I cannot send a patient home on an opioid if there are small children in the home. I have more options if I can keep them in the hospital, but
clients prefer to take their dogs home after surgery.”
“I try to cover post-op pain by treating peri-operatively with NSAIDs and
opioids, but I am concerned whether the owner will treat after discharge. They often cannot tell whether the dog is painful.”
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 54
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A New Beginning in Post Op Pain
A new, local anesthetic formulation of bupivacaine that provides extended relief of post operative pain in dogs.
Bupivacaine in a liposome injectable suspension that releases over time
Long-acting analgesia lasts up to 72 hours post-surgery
Single dose infiltration
Non-opioid pain control
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 55
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For Post-Op Pain
Medical Need Pain increasingly recognized and treated; Local anesthetics recommended Need for long-acting, non-narcotic post-operative pain relief
Our Solution Bupivacaine liposome injectable suspension Pacira launched product for human use in early 2012 FDA approval in dogs anticipated in 2016
- Positive pivotal field effectiveness study in dogs- Technical section complete for safety in dogs
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 56
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Infiltration Technique®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 57
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Sterile, non-pyrogenic, preservative-free aqueous suspension of multi-vesicular liposomes containing bupivacaine
Bupivacaine released over time
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 58
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Pivotal Dog Study
Design Blinded, placebo-controlled, multi-center study Approximately 150 client-owned dogs undergoing knee surgery Up to 5.3 mg/kg in a single dose by infiltration Veterinarian assessment
Primary Endpoint: Improvements in Pain Evaluation AT-003 vs. Placebo (p < 0.05)
Other Effectiveness Parameters Successes Success (p < 0.05) at each 24 hour interval up to 72 hours
Adverse Events Well tolerated
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 59
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Pivotal Effectiveness
Design Blinded, placebo-controlled, multi-center study Approximately 150 client-owned dogs undergoing knee surgery Up to 5.3 mg/kg in a single dose by infiltration Pain assessment by veterinarian using Glasgow Composite Measure Pain Scale Success is defined as no pain intervention*
Nocita Placebo P-value
Primary endpoint 0-24 hrs ~69% ~37% <0.05
Secondary endpoint 24-48 hrs ~64% ~35% <0.05
Secondary endpoint 48-72 hrs ~62% ~33% <0.05
* Pain intervention = rescue analgesia or score of ≥6 on Glasgow Composite Measure Pain Scale
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 60
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Safety and Tolerability
Laboratory and field studies have demonstrated that Nocita is well tolerated.
In a 4-week toxicity study with twice weekly subcutaneous administration, there were no clinical relevant effects on clinical observations, electrocardiogram, blood chemistry and hematology
Inflammatory changes at the injection sites are associated with the liposomal formulation
In the field study, adverse events were mostly associated with inflammatory surgical site reactions
No general drug related clinical or pathological changes were observed
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 61
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Timeline in Dogs
Proof of ConceptChemistry, Mfg. & Control (CMC) ©
Target Animal Safety © ©
Effectiveness I R ©
Labeling, FOI Summary, OtherNADA
201820172013 2014 2015 2016
US
I – Initiation of Pivotal Field StudyR – Top Line Results© – Technical Section Complete Letter
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 62
© GfK 2014 | New Product Research: Quantitative Results | January 2014 63
40%
31%
14%
17%
23%
28%
34%
39%
47%
57%
E1. Assuming that Product B were available at a competitive price and performed as described, how likely would you be to use it for each of the following types of surgery?E2. To what degree would you say Product B is unique from other products currently available?
Amputations
Biopsies
Declaws
Cruciate/fracture repairs
Dental/tooth extractions
Neuters
Spays
Trauma
Other orthopedic surgeries
Other soft tissue surgeries
Note: 76% of Vets
believe Product B is unique from other products
(Top 2 Box)
Vets most commonly indicated they would use Product B for amputations (57%) and declaws (47%).
n=152
Likelihood to Use Product B(Top 2 Box)
64
Market Opportunity
Cat
Royalties and Milestones
EU and ROW Partners
Royalties and Milestones
Dog
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 64
65
Market OpportunityInappetence in Dogs in the U.S.
9.8 million dogs are inappetent
4.1 million dogs are treated for inappetence
(2.3M chronic/1.8M acute)
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 65
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Inappetence Treatment Landscape
Special Diets
Off-Label Drug Use
- Mirtazapine- Cerenia- Cyproheptadine- Valium
Natural Homeopathic
Remedies
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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© GfK 2014 | New Product Research: Quantitative Results | January 2014 67
32%
81%
Satisfied with productsavailable to treat inappetence
Feel there is a need for a productindicated to treat inappetence
F7. How satisfied are you with the products currently available to you to treat inappetence in dogs and cats? F8. To what degree do you feel there is a need in the marketplace for a product indicated to treat inappetence in dogs and cats?
n=155
Evaluation of Current Products(Top 2 Box)
Only one-third of vets are satisfied with products available to treat inappetence, and the majority feel there is a need for a product with this indication for dogs and cats.
68
Veterinarian Dilemma for Inappetence
“I don’t release surgery cases from the hospital until they’re eating.”
“I have nothing that works well for inappetence. It makes it difficult to diagnose or treat the underlying condition.”
“Appetite is such a quality of life issue. If the dog isn’t eating they call
me and if I can’t fix the problem, it can be one of the main reasons for euthanasia.”
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 68
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A New Beginning in Inappetence
®
A new, unique first-in-class, appetite stimulant that triggers food uptake in dogs.
First-in-class prescription therapeutic
Ghrelin agonist (works by mimicking ghrelin, the hunger hormone)
Oral liquid solution, daily dosing
Multiple packaging sizes
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 69
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For InappetenceMedical Need No currently approved product Effective appetite stimulus Seen in acute, aging and chronic conditions
Our Solution Mimics ghrelin (hunger hormone) to turn on appetite FDA approval in dogs anticipated in mid-2016
- Positive pivotal field effectiveness study in dogs- Technical section complete for safety in dogs
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 70
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Ghrelin Agonist Biology®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 71
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Pivotal Dog Study Design Blinded, placebo-controlled, multi-site study More than 200 client-owned dogs enrolled, 2:1 randomization Inappetence from a variety of causes 3 mg/kg once daily by oral liquid for 4 days
Primary Endpoint: Owner Appetite Assessment – Success Rate on Day 4
Other Effectiveness Parameters Owner Appetite Questionnaire Body weight gain
Adverse Events No serious adverse events related to AT-002
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 72
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Effectiveness Data
Parameter Entyce Placebo P-value
Appetite assessment* ~70% ~45% <0.05
Appetite questionnaire** ~65% ~30% <0.05
Weight gain*** ~75% ~45% <0.05
Success rates from pivotal field study
n = 12 per groupp < 0.01
Mean food consumption from laboratory study • Primary endpointOwner appetite assessment:Increase, no change, decrease
** Secondary endpointOwner appetite questionnaire 5 x 5 pointsIncrease of 5 points for dogs with 12 and less points on day 0
*** Secondary endpointIncreased body weight
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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Safety and Tolerability
Laboratory and field studies have demonstrated that Entyce is well tolerated
In a 12-month toxicity study, most clinical and pathological signs were attributed to the mode of action, like salivation, increased body weight, increased liver weights, hepatocellular cytoplasmic vacuolation, increased cholesterol and HDL, and increased ALP
The enrollment criteria for the pivotal field study favored a population of dogs with various medical conditions; hence, a variety of adverse events and changes in clinical pathology were observed
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 74
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Timeline in Dogs
Proof of ConceptChemistry, Mfg. & Controls (CMC) ©
Target Animal Safety ©
Effectiveness I R ©
Labeling, FOI Summary, OtherNADA
20172013 2014 2015 2016
US
I – Initiation of Pivotal Field StudyR – Top Line Results© – Technical Section Complete Letter
®
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 75
© GfK 2014 | New Product Research: Quantitative Results | January 2014 76
Vets Likely to Recommend
(Top 2 Box)
% of Patients(mean)
Dogs Cats
Chronic conditions 87% 70% 71%
End of life 81% 66% 66%
Acute conditions 63% 55% 59%
Stress 56% 46% 50%
Post-surgical 56% 45% 48%
Expected Use of Product C
n=155Note: “Acute” conditions were defined as < 7 days, and “chronic conditions” were defined as > 7 daysG1. Assuming that Product C were available at a competitive price and performed as described, how likely would you be to recommend it for patients that suffer from inappetence due to…G2. To what degree does Product C fill a need in your practice? G3. If Product C were on the market at a competitive price and performed as described, approximately what percent of dogs and cats suffering from inappetence due to each of the following
conditions would receive your recommendation for Product C?
Note: 81% of vets
believe Product C fills a need in their practice
(Top 2 Box)
Vets reported they were most likely to recommend Product C for chronic conditions and end of life situations for both dog and cat patients.
© GfK 2014 | New Product Research: Quantitative Results | January 2014 77
F5. On average, how many days of treatment are needed by dogs and cats suffering from inappetence due to each of the following conditions over the course of one year?
40.9
20.18.6 4.0
3.4
46.0
20.910.1 4.8
3.9
Chronic conditions End of life Stress Acute conditions Post-surgical
Dogs Cats
n=153
Days of Treatment per Year(mean)
Chronic conditions and end of life situations are treated longer for both dogs and cats than other conditions that cause inappetence.
n=154 n=142 n=144 n=119 n=131 n=141 n=146 n=129 n=129
78
Market Opportunity®
Cat EU and ROW Partners
Royalties and Milestones
Dog
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 78
79
®
Field Safety & Efficacy
Conditional and/or Full Licensure*
Extended Field Efficacy and Post Market Studies
FDA CVM Therapeutics
USDA CVB Therapeutics
Pilot Studies Pivotal Studies Phased Submission* Commercial
Submit NADA early-2016; anticipated launch fall 2016
Submit NADA early-2016; anticipated launch fall 2016
Submit NADA late-2016; anticipated launch 2016
Pain, Allergy, Antivirals, Periodontal and Other Therapeutics
AT-016Allogeneic Stem Cell OA
AT-018Atopic Dermatitis
Commercial
®
®
*Other therapeutics are at various early-stages of development, however Aratana may explore opportunities to partner on products at various stages of development.
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
AT-014Canine Osteosarcoma Vaccine
AT-005T-cell Lymphoma
Other Therapeutics*
Canine Lymphoma Monoclonal Antibody B-cell
79
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OncologyTarget-rich, known biology
Chemotherapy Human Cancer Use Pet Cancer Use
Cyclophosphamide Lymphomas MM, solid tumorsDoxorubicin Lymphomas MM, solid tumorsVincristine Lymphomas MM, solid tumorsPrednisone Lymphomas MM, solid tumorsL-asparaginase Leukemia, LymphomaCarboplatin Solid TumorsCis-platinum Sarcoma, Carcinoma, LymphomaMitoxantrone Breast cancer, AML, LymphomasLomustine Brain/CNS, Lymphoma, Mast cellMethotrexate Lymphomas Osteosarcoma
Antibody Human Cancer Use Pet Cancer Use
Rituxan (CD20) Non-Hodgkin's LymphomaAvastin (VEGF) Solid TumorsErbitux (EGFR) Solid TumorsHerceptin (HER2) Breast CancerCampath (CD52) Chronic Lymphocytic LeukemiaMylotarg (CD33) Acute Myeloid LeukemiaZevalin (CD20) Follicular LymphomaBexxar (CD20) Non-Hodgkin's LymphomaVectibix (EGFR) Solid TumorsTheraCIM (EGFR) Solid Tumors
Human Chemo Market
Human Cancer Antibody Market
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 80
81
Pet Antibodies
Pet specific antibodies Pet Fc region Most effective IgG sequence Straightforward engineering
with no shuffling IP position directed at
platform
Mouse Pet Specific
Highly specific‒ Developed against pet targets
Non immunogenic‒ Compatible with immune system
Highly potent‒ Engages immune system
Cost effective‒ High yield production
heavy chain
light chain
VHVL CH1
CH2
CH3
CL
Proprietary Platform Pet Specific Antibody Ideal Profile
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 81
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Lymphoma monoclonal antibody
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 82
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AT-014 Therapeutic VaccineCanine Osteosarcoma
Live Vector Accesses Antigen Presenting Cells
TAA-Fusion Peptide Secreted
Triggers Innate and Adaptive Pathogen Immune Response
Tumors Now “Seen” As Pathogen-Infected and Targeted By T-Cells
Lm-LLO Immunotherapy Infusion
MHC II
MHC I
CD4+ T Cell
CD8+ T Cell
LLO mediated
escape
Activated Dendritic Cell
tLLO-TAA Fusion
Proteins
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 83
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AT-014Preliminary efficacy data in canine osteosarcoma
All dogs without gross metastatic disease at the time of first dosing
Median survivalControl: 423 daysOSA Vaccine: 956 days (n=18)P = 0.014
Boosters provided ongoing as needed every 4- 6 months
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 84
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Supportive OncologyInappetence and chemotherapy
Inappetence was seen in 23% of chemotherapy-treated dogs for an average of 6 or more out of 14 days Owner-assessed evaluation of inappetence may be helpful in predicting subsequent body weight loss Early clinical intervention to stimulate appetite may improve clinical outcomes in dogs receiving chemotherapy
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 85
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Medical Need More than 20% of dogs have osteoarthritis Poor compliance with giving oral drugs NSAIDs cause largest amount of side effects of approved drugs NSAIDs don’t work or not tolerated in significant portion of population
Our Solution Stem cell therapy First to market regenerative medicine product Point-of-care availability as a single intra-articular injection Long term relief of clinical signs (i.e pain, disability) Potential regeneration of joint damage
AT-016Allogeneic Stem Cell
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 86
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1.5M Doses of Final Drug Product
Vet-Stem Single Fat Donation
GMP Cell Expansion
Cryostorage andDistribution
Harvest , Wash, Formulate and Freeze
Initial isolation and expansionin GMP process
Donor fat tissue Collection
AT-016Allogeneic Stem Cell Production
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 87
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Medical Need Incidence in dogs estimated at up to 10% with recent product launch (Apoquel)
peak sales estimated at several hundred million dollars Chronic condition which often can onset at a young age (1-3 years old) Owners can easily diagnose symptoms including itching, sneezing, hair loss, paw
licking and stains on skin
Our Solution CRTH2 mechanism treats underlying disease rather than symptoms Target has been validated in human medicine (asthma, allergic rhinitis and others) Pilot field study underway with results expected in early 2016
AT-018Atopic Dermatitis
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 88
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AT-018Atopic Dermatitis Biology
Figures adapted from: (Left) Townley, R. G. and S. Agrawal (2012). "CRTH2 antagonists in the treatment of allergic responses involving TH2 cells, basophils, and eosinophils."Ann Allergy Asthma Immunol 109(6): 365-374.(Right) Arima, M. and T. Fukuda (2011). "Prostaglandin D(2) and T(H)2 inflammation in the pathogenesis of bronchial asthma.“Korean J Intern Med 26(1): 8-18.
CRTH2 Signaling AT-018 inhibits PGD2 mediated activation and recruitment of basophils, eosinophils & TH2
lymphocytes.
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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Company Financials
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
91
Current Financial Summary
• Reported net loss as of September 30, 2015 was $54.4M or $1.58/share– Includes impairment charge of $43.4M or $1.26/share
• Outstanding debt of $15M at end of 3rd quarter 2015– New debt facility entered into October 2015 including $35M term
loan and $5M credit revolver– Interest rate greater of 6.91% or 3.66% plus prime– 18 months interest only
• As of September 30, 2015, Aratana had $72.8M in cash, cash equivalents, and short-term investments– Increase of $24M in proceeds after executing $40M new debt
facility in October less fees and repayment of $15M existing debt
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 91
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Revenue Scenario
Estimated Gross to Net revenue includes rebates, returns, and discounts of approximately 8%
2016 2017 2018 2019 2020
Product Revenue Gross US Product Revenue
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 92
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Revenue Mix Scenario
2016 2017 2018 2019 2020
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 93
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Estimated Revenue Contribution by Segment
Pain
Inappetence
Oncology
Launch of pain and inappetence segments
Pain market grows based on multiple treatments
2016 2020
Pain
Inappetence
Oncology Allergy
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 94
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Margins improve once we reach commercial scale
Estimated gross margins approximately 65% ~ 5 years after launch, in-line with industry leaders
2016 2017 2018 2019 2020
COGS Royalties Net US Product Revenue
US ProductGross Margin
Gross Margin Scenario
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 95
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R&D Spending Scenarios
Headcount
Program spending
FDA fees
Pre-launch manufacturing
Milestones
Headcount
Program spending
FDA fees
Pre-launch manufacturing
Milestones
20162015
Will attempt to manage 2015 and 2016 R&D spending to a
combined $60M
Updated 2015 guidance: estimated below $30M
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 96
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Currently anticipating milestone payments of $26.5M through 2020 of our current contractual obligations of $119.8M*Reg/Dev not currently projected = no planned or commenced pivotal study
Milestone Summary
$0
$10
$20
$30
$40
1st Half 2016 2nd Half 2016 2017-2020 Not currentlyprojected
Total
$4.9 $3.5 $6.0
$25.0
$39.4
Regulatory and Development
$0
$20
$40
$60
$80
$100
1st Half 2016 2nd Half 2016 2017-2020 Not currentlyprojected
Total
$0.6 $6.0 $5.5
$68.3 $80.4
Commercial
Anticipated 2016-2020
*Reg/Dev not currently projected
Milestones (Sales > $50M)
Milestones (Sales > $100M)
Milestones (Sales > $200M)
Milestones (Sales > $500M)
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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Commercial Investment Scenario
HeadcountHeadcount
Agency, Digital, Advertising
Agency, Digital, Advertising
Literature, Conferences, Ad Boards, Market Research
Literature, Conferences, Ad Boards, Market Research
Third Party Promotion
Third Party Promotion
0%
20%
40%
60%
80%
100%
2016 2020
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 98
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Margin ScenarioAfter full commercial scale ~5 years after upcoming commercial launches
Cost of product ~25%Royalties ~10%
R&D ~10%Commercial ~20%G&A ~10%
Overall margin ~25%
EBITDA Margin ~33%
Operating margin
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 99
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Upon achievement of the loan agreement net proceeds covenant within the next year($45M in partnering/financing proceeds), the Company believes it will be in a position to fully support the upcoming product launches
Cash Runway
$73
~$85
~$130
September 30, 2015balance
Estimated Q4 2015burn
Payoff of existingdebt
Net proceeds fromdebt
Estimated 2015 year-end balance
Cash proceeds Cash available afterproceeds
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 100
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Partnership Opportunities
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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Global Market
Western Europe, 31.3%
Eastern Europe,6.2%
North America,33.7%
Latin America,13.5%
Asia Pacific,10.9%
Other, 4.3%
Worldwide Spending on Pet Supplies 2013
Source: Euromonitor International, May 2014
Europe, 32%
North America, 33%
Latin America, 14%
Asia/ROW, 21%
Geographic Segmentation of Animal Health Market
Source: Vetnosis
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 102
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Constructing a Potential Partnership
Monetizes valuable assets May mitigate financing needs
– NPV split approach– Significant up-front may be possible
External validation Could potentially include an equity component Could add critical mass in U.S.
– Deal may include a co-promote or co-development– Distribution, manufacturing or launch support
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update. 103
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Closing Remarks
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.
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Question & Answer
Provided November 12, 2015 as part of an oral presentation. Speaker and/or Aratana disclaims any duty to update.