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Jefferies Animal Health Summit March 27, 2014
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Special Note Regarding Forward-Looking Statements This 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 statements regarding our expectations regarding the approval of products; expectations regarding development programs, trials, studies, approvals and commercialization; the sufficiency of financial resources; expected future cash balance and liquidity; expectations regarding in-license initiatives, collaborations and partnerships; and expectations regarding the Company’s plans and opportunities.
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; our substantial dependence on the success of certain of our lead product candidates, AT-001, AT-002, AT-003, AT-004, AT-005, AT-006 and AT-007; our inability to identify, license, develop and commercialize additional product candidates; 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; uncertainties regarding the outcomes of studies regarding our products; our inability to realize all of the anticipated benefits of our acquisitions of Vet Therapeutics and Okapi Sciences; effects of competition; our failure to attract and keep senior management and key scientific personnel; our complete reliance on third-party manufacturers and third parties to conduct all our target animal studies and certain other development efforts; our lack of a sales organization; our significant costs of operating as a public company; changes in distribution channels for pet therapeutics; consolidation of our customers; impacts 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; our failure to comply with regulatory requirements; 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; 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 26, 2014, 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
3
Investment Highlights
Large, growing market
De-risked drug development
Private-pay
Portfolio approach
Scalable and capital-efficient
Pure-play, first mover
4
Source: APPA.
Our Market
Large and growing
– 2014E U.S. pet spend of $59B
Insensitive to recent recessions
68% of U.S. households
– 96M cats
– 83M dogs
Medicalization drives growth
– Historically, limited innovation
– Pet therapeutics underrepresented
U.S. Pet Owners Spend ($Billions)
5
The Evolution of Pet Ownership
“Snoopy Generation” “Brian Generation”
Pets are family whose medical needs merit quality care
6
A Favorable Comparison
Multiple Species Steps Direct to Species
~$1.3B ~$10M
~10 Years ~5 Years
Third Party Payer Private Pay
Steep Generic Decline Slow Generic Decline
Difficult & Indirect Accessible & Direct
Pets Humans
De
velo
pm
en
t C
om
me
rcia
l
7
FDA and USDA Timelines FDA Center for Veterinary Medicine
Proof of Concept
INAD
Chemistry, Mfg. & Controls (CMC)
Safety
Effectiveness
Labeling, FOI Summary, Other
Administrative NADA
Year 5Year 1 Year 2 Year 3 Year 4
USDA - Center for Veterinary Biologics
Proof of Concept
Manufacturing
File for Product License
Preclinical
Field Safety and Efficacy
Conditional Product License*
Extended Field Safety and Efficacy Study
Full Product License* Conditional l i censes granted under specia l ci rcumstances
Year 5Year 1 Year 2 Year 3 Year 4
8
Alignment with the Veterinarian
Annual Exams 17%
Diagnostics 17%
Surgery 17% Non-Invasive
Procedures 9%
Pet Food Sales 4%
Heartworm Product Sales
6%
Flea-Tick Product Sales
6%
Vaccinations 15%
Source: DVM Newsmagazine’s State of the Profession Report 2012.
Innovation is valued and desired
Medicines are high margin to practice
Facing pressure from alternative channels
Other Pharma 9%
Practice Revenue Mix
9
Our Pipeline
Proof of Concept Pilot Pivotal / Commercial
AT-009 Mast Cell – Dog
AT-002 Cat Appetite Stimulant
AT-004 Dog B-Cell Lymphoma
AT-010 Dog Atopic Dermatitis
AT-003 Dog Post-operative Pain
AT-005 Dog T-Cell Lymphoma
AT-011 Dog Canine Parvovirus
AT-003 Cat Post-operative pain
AT-001 Dog Osteoarthritis
AT-012 Cat Feline Calicivirus
AT-007 Cat Feline Immunodeficiency virus
AT-002 Dog Appetite Stimulant
AT-001 Cat Osteoarthritis
AT-008 Dog Lymphoma
AT-006 Cat Feline Herpesvirus
Lymphoma Diagnostic AT-014 Dog
Osteosarcoma
Option 2 Beta
Option 3 Gamma
10
Animal Health Landscape
Total number of NADAs NADAs for dogs / cats Pet therapeutic NCEs*
2011 12 6 2
2012 11 6 0
2013 6 4 2
* NCE defined as new chemical entity not previously approved in humans or animals (excluding parasite drugs).
11
Development News Flow
AT-001 Pivotal study in dogs
AT-002 Pivotal study in dogs
AT-003 PoC in cats and dogs
AT-001 Pilot study in cats
AT-003 U.S. approval
AT-001 U.S. approval
AT-002 U.S. approval
AT-005 Full study in dogs
AT-003 Pivotal study in dogs
AT-009 Pilot study in dogs
AT-012 PoC in cats
AT-011 PoC in dogs
AT-010 Pilot study in dogs
AT-005 Full license AT-005 Conditional license
AT-007 Pivotal study in cats
AT-007 Pilot study in cats
AT-006 Pivotal in cats (EU)
6 Approvals
8 Pivotal Data Sets
10+ Pilot / PoC
AT-008 Pivotal in dogs (EU)
AT-002 Pilot study in cats
AT-009 PoC in dogs
AT-002 Pivotal study in cats
2014 2015 2016
AT-004 Full license
12
Robust Patent Portfolio Small Molecules
Focus on patent-protected innovation
Robust patent portfolio
22 granted & 5 pending US patents licensed
4 Antiviral patents licensed from KU Leuven
– 4 additional patent applications
Foreign counterparts filed in major markets
Human pharmaceutical patents
– Composition of matter
– Manufacturing
– Formulation
– Use
Pursuing additional pet therapeutic patents
Biologics
Speciesization of mAbs
– Counterparts in major markets (expiration 2029)
• Claims directed to heterochimeric mAb
• Covers all VX products
– Dependent claims directed to both CD52 & CD20 mAbs
– Divisional directed to methods of treatment, continuation directed to novel CD20 antigen
mAb Constant Domain Regions
‒ Counterparts in major markets (expiration 2030)
‒ Covers all VX products, including CD52 and CD20 mAbs
mAbs Directed to CD20 (at least 2031)
mAbs Directed to CD52 (at least 2031)
Unpublished applications directed to mAbs against other targets of interest
13
Portfolio Expansion Criteria
Toxicology data are available
Effectiveness data are available
Manufacturing is scaled-up
Key Attributes
Unmet medical need
High incidence or prevalence
Known mechanism of action
Nuance in science
“Early de-risking”
Early De-Risking
Leveraging the investment in human therapeutics Pharmaceuticals Biologics US and EU
14
Why Oncology?
High incidence
Life saving, tangible proposition
Established customer Base
Owners increasingly demand treatment
Existing market of off label human drugs
Area of unmet need
15
Immuno-Oncology
Boosting global immune reaction
Forcing recognition of cancer cells
antigen-specific
Educating the immune system against a specific cancer
antigen-specific
Selective activation of immune cell subset antigen-independent
Non-specific immunotherapy
Therapeutic mAbs
Therapeutic Vaccines
mAbs targeting immunity
checkpoints
1980 1990 2000 2010
IFN or IL-2 in renal cell cancer
or melanoma
Rituxan in follicular lymphoma, Herceptin
in breast cancer
Provenge in prostate cancer
IFN or IL-2 in renal cell cancer
or melanoma
16
Pet Antibodies A proprietary platform
Pet specific antibodies with 85%+ pet sequences
Pet Fc region
Most effective IgG sequence
Straightforward engineering with no shuffling
IP protected
Mouse Pet Specific
Highly specific ‒ Developed against pet targets
Non immunogenic ‒ Compatible with pet immune
system
Highly potent ‒ Engages pet immune system
Cost effective ‒ High yield production
heavy chain
light chain
VH
VL CH1
CH2
CH3
CL
Proprietary Platform Pet Specific Antibodies
17
Oncology Is Target-Rich
Chemotherapy Human Cancer Use Pet Cancer Use
Cyclophosphamide Lymphomas MM, solid tumors
Doxorubicin Lymphomas MM, solid tumors
Vincristine Lymphomas MM, solid tumors
Prednisone Lymphomas MM, solid tumors
L-asparaginase Leukemia, Lymphoma
Carboplatin Solid Tumors
Cis-platinum Sarcoma, Carcinoma, Lymphoma
Mitoxantrone Breast cancer, AML, Lymphomas
Lomustine Brain/CNS, Lymphoma, Mast cell
Methotrexate Lymphomas Osteosarcoma
Antibody Human Cancer Use Pet Cancer Use
Rituxan (CD20) Non-Hodgkin's Lymphoma X
Avastin (VEGF) Solid Tumors X
Erbitux (EGFR) Solid Tumors X
Herceptin (HER2) Breast Cancer X
Campath (CD52) Chronic Lymphocytic Leukemia X
Mylotarg (CD33) Acute Myeloid Leukemia X
Zevalin (CD20) Follicular Lymphoma X
Bexxar (CD20) Non-Hodgkin's Lymphoma X
Vectibix (EGFR) Solid Tumors X
TheraCIM (EGFR) Solid Tumors X
Human Chemo Market
Currently no protein market Immunogenicity Lack of efficacy
Human drugs migrate unchanged into veterinary practice
Human Cancer Antibody Market
18
Canine Lymphoma Ideal for first antibody therapy
A canine-specific antibody therapy could achieve in dogs what Rituxan has done for human lymphoma
Lymphoma is most common blood cancer in dogs
- 6% of total dog cancer
Lymphoma is the most treated cancer
- Chemotherapy is the current “standard of care”
- Approximately 300,000 dogs diagnosed per year (U.S.)
- Treatment cost ranges between $2,500 and $10,000
Clinical manifestations are similar to humans
Lymphocyte targeting has proven efficacious in pets
Hemangiosarcoma
Sarcoma
Lymphoma
Mast Cell
Skin
Bone Other
RITUXAN-LIKE APPROACH FOR DOG LYMPHOMA
Incidence
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Pet Immunotherapy The Advaxis Platform
Modified live bacteria ‒ Listeria monocytogenes
Genetically modified ‒ Virulence factors deleted
‒ Tumor associated antigen genes added
Multiple constructs available ‒ Targeting human cervical, prostate, breast cancer, melanoma
Manufactured in Europe under GMP
Additional targets under development
Immuno-oncology named Science Magazine 2013 Breakthrough of the Year
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Pet Immunotherapy
MHC II
MHC I
CD4+ T Cell
CD8+ T Cell
LLO mediated escape
Activated Dendritic Cell
tLLO_ TAA Fusion Protein
21
Osteosarcoma Survival
Survival of Data 4:Survival proportions
0 200 400 600 8000
20
40
60
80
100Legend
Legend
Days
Pe
rce
nt s
urv
iva
l
MST (control) – 239.5 days
MST (vaccinated) – not reached
p=0.032
Survival proportions: Survival of Data 1
Time
Pe
rce
nt
su
rviv
al
0 100 200 300 4000
50
100 Control
Vaccine
Vaccine Control
Repeat IV administration of 1 x 109 CFU of AT-014 is well tolerated in immune competent dogs
Minor side effects at administration (toxicity grade <1)
‒ Mild fever, increased blood pressure, malaise, nausea, and vomiting
No significant side effects
‒ Cardiovascular, Hematopoeitic, Hepatic or Renal systems
Preliminary : AT-014 when used in the adjuvant setting prolongs overall survival in dogs with Her2/neu positive OSA
22
Advaxis Collaboration Next Three Products
3 Products each with:
– Pivotal (USDA or FDA) trial initiation milestones
– US dog approval milestones
– US cat approval milestones
– EU dog approval milestones
– EU cat approval milestones
– Sales milestones per product
Cumulative sales milestones for all 4 products
Tiered royalty per US cumulative net sales for all 4 products
– Mid single digit (maximum 10%)
Split royalty for OUS partnered sales
23
Canine Oncology Leadership Mammary Tumors/
Other Her2/Neu Tumors
Mast Cell Tumors
Osteosarcoma
Undisclosed Tumor Type
Lymphoma B-Cell Lymphoma
T-Cell Lymphoma
Red = Aratana antibody Blue = Advaxis immunotherapy
Incidence
Mast Cell Tumor 13%
Lymphoma 8%
Melanoma 5%
Hemangiosarcoma 5%
Osteosarcoma 5%
Squamous Cell Carcinoma 4%
Fibrosarcoma 4%
Mammary Tumor 2%
Transitional Cell Carcinoma 2%
Thyroid Tumor 1%
Histiocytoma 1%
Undisclosed Tumor Type
Source: Brakke Cancer Report.
24
Top Cancer Treatment States
Board Certified Veterinary Oncologists
25
• Toxicology data are available
• Efficacy data are available
• Manufacturing is scaled-up
Focused In-Licensing Strategy
Key Attributes
• Unmet medical need
• High incidence or prevalence
• Known mechanism of action
• Nuance in science
• “Early de-risking”
Early De-Risking
Leveraging the investment in human therapeutics
26
Why Atopic Dermatitis?
High level of incidence
Opportunity to bring innovative human
science to pets
Existing market focused on treatment
of symptoms
New mechanisms treat the underlying disease rather than
symptoms
Others are building the market
Area of unmet need
27
Atopic Dermatitis Market Size
Source: CL King Zoetis report January 27, 2014.
Significant market opportunity as reflected in recent analyst projections of other development stage products
28
Atopic Dermatitis Canine biology is similar to humans
Angiocentric accumulation of inflammatory cells:
Eosinophils*
Memory T-helper
Mast cells*
IgE+ dendritic
CD52 rich targets
29
Treating the symptoms Antihistamines
30
Treating the Symptoms Apoquel
• Apoquel is a janus kinase inhibitor (oclacitinib) which seems to work via IL-31 induced pruritis
• Costimulation of Th2 cells produced relatively high levels of IL-31
• Apoquel indication: “Control of pruritus associated with allergic dermatitis and control of atopic dermatitis in dogs at least 12 months of age.”
31
Atopic Dermatitis Role of Th2 Cellular Immunity
32
• CRTH2+ Th2 cells preferentially increased in atopic dermatitis
• CRTH2 expressed by 80-90% of allergen-specific Th2 cells
• CRTH2 already validated in asthma, allergic rhinitis and other diseases
Atopic Dermatitis Role of CRTH2 Receptor
33
34
Atopic Dermatitis Asset Screen
3,340 Assets
510 Assets
237 Assets
>10 Assets
Cull Targets: H1, GC receptors, etc.
Cull Route Of Administration: topical, etc.
Other Screens
CD-52 CRTH2
35
Our Financial Profile
Year-end 2013 cash balance $45.7M
Net Loss for the year 2013 was $4.3M – Net Loss $19.7M excluding nonrecurring income tax benefit of $15.4M
Closed Okapi transaction Jan 6, 2014 – Total consideration €33M ($45M)
– Upfront payment of $13.9M
– Okapi promissory note and purchase price consideration of $30M
Closed secondary offering Feb 3, 2014 ‒ Net proceeds of $90.5M
Continue to identify non-dilutive sources of capital ‒ Partnering opportunities globally
‒ Out-licensing of non-core products
‒ Debt instruments
Increased R&D investment
Sufficiently funded through 2015
36
Investment Highlights
Large, growing market
De-risked drug development
Private-pay
Portfolio approach
Scalable and capital-efficient
Pure-play, first mover
37
AT-001 for Osteoarthritis Pain
Medical Need
Established market (U.S. sales $260M, mostly NSAIDs for dogs)
Existing NSAID products have side effects and require monitoring
Safer product for pain and inflammation of osteoarthritis
Our Solution
EP4 receptor antagonist (a novel mechanism)
‒ Potential for significantly improved safety profile vs. Coxibs
Pilot field study completed in 2013
Pivotal field studies to be initiated in 2014, with FDA approval expected in 2016
38
AT-001 Biology
Phospholipids
Arachidonic Acid
Cyclooxygenase (COX)-2
PGE 2(House keeping)
TXA 2 PGI 2
NSAIDs
• GI mucosa
protection
• Platelet
aggregation
• Renal function
regulation
EP2 EP3
Cyclooxygenase (COX)-1
EP1
PGE 2(Inflammatory)
• Pain and Inflammation
EP4 ReceptorOther EP Receptors
COXIBsAT-001 EP4 Receptor
Antagonist
EP4 Receptor • Pain and Inflammation
39
AT-002 for Inappetence
Medical Need
No currently approved product
Effective appetite stimulus to avoid feeding tubes and euthanasia
Seen in aging and chronic conditions
Our Solution
Mimics ghrelin (hunger hormone) to turn on appetite
Statistically significant results on increased appetite and weight gain in dog pilot study
Pivotal field study began in late 2013, with FDA approval expected at the end of 2015 or early 2016
40
AT-002 Biology
Brain
Pituitary gland
Stomach
Intestine
Ghrelin Ghrelin
Increases appetite
Promotes growth hormone secretion
Regulates energy metabolism
Stimulates production of lean body mass
AT-002 Ghrelin Agonist
Growth Hormone (GH)
41
AT-003 for Post-Operative Pain
Medical Need
Pain increasingly recognized and treated
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
Pilot studies began in 2013, with NADA expected in 2016 / early 2017
42
AT-003 Biology
Discrete chambers within a lipid matrix, each filled with bupivacaine liposome
43
Medical Need
Chemo achieves short remissions and has a very high relapse rate
Chemo is harsh on pets and burdensome on owners
Need effective and safe therapy to maintain remission as long as possible
Our Solution
First-in-class product
Effective and safe B-cell depletion
Aid in the treatment of canine B-cell lymphoma
USDA conditional license granted; expect full license in 2015
Market Potential
Approximately 300,000 dogs are diagnosed per year in the U.S.
Canine lymphoma is treated with chemotherapy (like in humans)
Cost to pet owners of lymphoma treatment: ~$5,000
AT-004 Canine-specific antibody for B-cell lymphoma
44
Medical Need
24% of all lymphoma is T cell lymphoma
Our Solution
First-in-class product
Effective and safe T-cell depletion
Aid in the treatment of canine T-cell lymphoma
Submitted for USDA product license; conditional license received in January 2014
AT-005 Canine-specific antibody for T-cell lymphoma
45
Feline Herpes is a common virus in cats
– 97% of cats exposed
– 4% with symptoms in US and EU
– Most prevalent ocular disease
Vaccinations are only option
– Not 100% effective
– Most cats unvaccinated
Similar to humans, virus not cured
AT-006 Feline Herpesvirus
Incidence
Calici
Herpes
FIV
FeLV
FIP
Parvo
46
Treatment of herpetic ocular disease in cats caused by FHV-1 or FVR
Product can be used as a diagnostic as no diagnostic exists
Eyedrops are applied to affected eye
Product is a sterile solution
EMA approval in 2015
Exclusively licensed to Novartis Animal Health globally
AT-006 Feline Herpesvirus
47
FIV is a serious viral disease in cats
– 2.5% incidence in the US
– Incidence is highly variable in Europe ranging from 2.1% to 12.5%
Clinical signs include chronic infections and weight loss, AIDS like symptoms and death
No currently approved antivirals for cats
AT-007 Feline Immunodeficiency Virus
Incidence
Calici
Herpes
FIV
FeLV
FIP
Parvo
48
For the treatment of cats from 6 months of age infected with FIV; same product is active against FeLV (feline leukemia virus)
“Improvement of cat’s well-being and quality of life”
Treatment by injection with a sterile solution over the course of several weeks
Same compound family as Tenofovir, which was developed at KU Leuven
Launch is expected in 2017
AT-007 Feline Immunodeficiency Virus
49
Other Products in Development
Product Species Indication Development Status Expected Next Step
AT-008 Dog Lymphoma Pivotal field effectiveness study
Pivotal field effectiveness in the EU in 2014
AT-009 Dog Mast cell tumor Lead selection Pilot studies
AT-010 Dog Atopic dermatitis Lead selection Pilot studies
AT-011 Dog Parvovirus infections Lead selection Proof of concept study
AT-012 Cat Calicivirus infections Lead selection Proof of concept study
AT-014 Dog Osteosarcoma Pilot studies Pivotal studies