Acerus Pharmaceutical Corp - LD Micro main event conference Ed Gudaitis President and CEO
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Acerus Pharmaceutical Corp. LD Micro main event conference Ed Gudaitis President and CEO December 10, 2019
Forward Looking Statements This presentation and certain statements in regards thereto contain forward looking information. This forward-looking information is not based on historical facts but rather on the expectations of Acerus Pharmaceuticals Corporation's (“APC") management regarding the future growth of APC, its respective results of operations, performance and business prospects and opportunities. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives or economic performance, or the assumptions underlying any of the foregoing. This presentation uses words such as "will", "expects", "anticipates", "intends", "estimates", or similar expressions to identify forward-looking information. Such forward-looking information reflect the current beliefs of APC's management based on information currently available to them. Forward-looking information included in this presentation is based in part, on assumptions that may change, thus causing actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking information. Such assumptions include general industry and economic conditions; changes in the APC’s relationship with its suppliers; and pricing pressures and other competitive factors. APC has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. While APC considers these factors and assumptions to be reasonable based on information currently available, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of APC to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. For more information on these risks and uncertainties, please see the annual information form of APC dated March 4, 2019, available on SEDAR at www.SEDAR.com. Actual results, performance or achievement could differ materially from that expressed in, or implied by, any forward-looking information in this presentation, and, accordingly, investors should not place undue reliance on any such forward- looking information. Further, any forward-looking information speaks only as of the date on which such statement is made and APC undertakes no obligation to update any forward-looking information to reflect the occurrence of unanticipated events, except as required by law including applicable securities laws. New factors emerge from time to time and the importance of current factors may change from time to time and it is not possible for management of APC to predict all of such factors, changes in such factors and to assess in advance the impact of each such factor on the business of APC or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information contained in this presentation.
Acerus Market Facts
Exchange : Ticker TSX:ASP
OTCQB: ASPCF
Recent Share Price (Dec 3, 2019) C$0.075
261.2 million basic
Shares Outstanding (Dec 3, 2019)
298.2 million diluted
Market Capitalization C$19.6 million
52-Week Range ($0.07 - $0.20)
Insider Ownership ~56%
3
Who Is Acerus?
EMERGING COMMERCIAL STAGE SPECIALTY PHARMACEUTICAL COMPANY FOCUSED
ON NATESTO® AND A PIPELINE OF COMPLIMENTARY ASSETS
Proprietary nasal delivery Global commercial product, Business Strategy focused on
technology with applications NATESTO®, generating profitable growth, select
across a range of API’s and increasing revenue geographic diversification and
indications advancing near term pipeline
opportunities
Experienced Management Team In Place
ED GUDAITIS
PRESIDENT & CHIEF EXECUTIVE OFFICER
• 25+ years of pharmaceutical experience as C-Level executive
• Joined Acerus May 2018
Prior Experience:
• General Manager Gilead Sciences Canada Inc. – established and built a top 6 pharma co. in Canada
• Sr. Director, U.S. HIV Marketing, Gilead Sciences – launched two large HIV products in the US,
COMPLERA® and STRIBILD®
• Vice President Specialty Care, Roche Canada – Oncology, HIV, HCV and Transplant experience
GAVIN DAMSTRA
SENIOR VP, INTERNATIONAL COMMERCIAL
• 16+ years of international pharmaceutical and operational experience
• Joined Acerus 2019
Prior Experience:
• Executive Director, WH and GI, Allergan Canada – in-line and new product growth accelerated
• General Manager, Takeda Columbia – top performing affiliate in emerging markets
BOB MOTZ
CHIEF FINANCIAL OFFICER
• 30+ years of finance and operations experience
• Joined Acerus October 2018
Prior Experience:
• Chief Financial Officer, Hydrogenics – TSX and NASDAQ cross-listed
• Vice President & CFO, Aeroquest International Limited – M&A and International operations
ACERUS’ FOUNDATIONAL ASSET
NATESTO® is indicated for replacement therapy in adult males for conditions associated with a deficiency or absence of
endogenous testosterone including primary hypogonadism and hypogonadotropic hypogonadism
As Men Age Less Testosterone Is Produced
And Bio-available1-4
§ Testosterone levels decline with age in
men. After 40, testosterone decreases
~1.6% per year
§ Reduction in serum testosterone is
associated with increases in SHBG (~1% per
year)
§ HIM Study – Prevalence of hypogonadism
is 38.7% in men ≥45 years presenting to
primary care offices5
As the population ages, the incidence of low testosterone is expected to increase
1. Rhoden EL, Morgantaler A. N Engl J Med. 2004;350:482-492. 2. Harman SM, et al.. J Clin Endocrinol Metab. 2001;86(2):724-731.; 3. Feldman HA, et al. J Clin Endocrinol Metab.
2002;87(2):589-598.; 4. Stanworth RD, et al. Clin Interv Aging. 2008;3(1):25-44. 5. Mulligan T, et al. Int J Clin Pract 2006;60(7):762-769.
6
Challenges With Non-nasal Testosterone Therapy
• Black Box Warning • Poor persistence
• Secondary exposure to testosterone • 50% of patients discontinue
• Pulmonary oil micro embolism Androgel at 5 months
(POME) and anaphylaxis shock
• MACE and Hypertension
• Inconvenient application or • Infertility
painful injection • Chronic, elevated levels of
exogenous testosterone shut
down HPG axis leading to
infertility
There is a market need for better ways to delivery therapy
7
Convenient & Differentiated Testosterone Therapy
NATESTO® is a self-administered,
fixed-dose gel delivered from a
nasal applicator
• Simple and easy to administer – less than
10 seconds per application
• Highly concentrated, low volume of gel
• Low incidence of irritation to nose • Max conc. achieved within 45 minutes of administration
• Small, discrete dispenser • Half-life ranging from 10 - 100 mins
• Minimizes transference risk and • PK profile returns to near baseline after each dose -
secondary exposure maintaining residual natural testosterone production
• Improved hematocrit profile
• Preserved spermatogenesis
PK profile based on BID dosing. TID dosing approved in the U.S.
8
U.S. Specialists Anticipate Using NATESTO® For 5%-20%
Of Patients
NATESTO Patient Share
1% 8% 17% 20% 25% 55%
Min 1st Q Mean Median 3rd Q Max
NATESTO Share Source
Injections
Majority of share captured
from gels with marginal
~70%
utilization from injections HCPs are open to prescribing
NATESTO NATESTO
Gels
NATESTO
NATESTO viewed
viewed as importantalternative
as important alternative to
to topical
topicalgels
gelsforfor
new andand
new switch patients
switch patients
Source: HCP interviews (n20) Aug 2019. U.S.-based specialists. Syneos Health
Patients Are Willing To Switch To NATESTO®
72%
Acceptance of
No nasal route of admin
70%
Acceptable
Yes
Would switch
to Natesto® 84%
Confident in how to
apply after < 2 days
Confident
Source: NATESTO® Phase 3 Patient Use/Preference QuestionnaireLarge Market Opportunity in the U.S.
Estimated Hypogonadism (HG) Prevalence by Age (000’s)
Ø HG prevalence increases with age and
3,500 3,315 co-morbidity
3,000 2,897
§ 14M total patients
2,486
2,500 2,340
§ Approx. 700k newly diagnosed patients/yr5
2,000 1,766
1,500 § Over 2M treated3,4
1,124
1,000
§ Of the treated population, it is estimated
428 that close to 70% will switch treatment at
500
least once5
-
20-29 30-39 40-49 50-59 60-69 70-79 80+
Entry point for NATESTO® therapy is new and switch patients
1. US Census data. http://www.infoplease.com/us/census/data/demographic.html. 2. Mulligan T, et al. Int J Clin Pract. 2006 Jul;60(7):762-9. 3. Araujo, et al. J Clin Endo Metabol 2007
92(11):4241-7. 4. Symphony Healthcare 2014. 5. IMS Health Sept 2015.
11New Commercial Model For the U.S.
Acerus has amended the partnership agreement with Aytu with
respect to the commercialization of NATESTO® in the U.S.
• Moves to a co-promotion arrangement from the prior out-licence model.
Acerus assumes 5 Aytu sales FTE focused on specialty market.
• Acerus to lead sales efforts directed to specialists (Uro/Endo); Aytu to lead
sales effort to primary care (PCP)
• Acerus to take control of U.S. market authorization for NATESTO® (NDA)
• Acerus to lead overall U.S. Marketing, Medical & Reimbursement strategy
and executionSYNEOS HEALTH - Commercial Partnership
• Acerus has engaged Syneos Health to be our contract
commercial partner in the U.S.
• Syneos Health is built to drive clinical and commercial excellence
Advantages:
• Rapid launch of commercial team in the U.S.
(e.g. approx. 3 months to stand up of field sale force)
• Ability to scale across all aspects of commercialization – medical affairs,
managed markets, marketing and sales
• Flexible resource deployment – time and location
• Cost conservation - avoids back office, IT and logistics support expenses
• Leverages Syneos’ experience in men’s health and with NATESTO®Syneos Health Has Extensive Experience In Men’s Health
(U.S., Europe, and Asia Pacific)
Consulting Advertising PR & Medical Comms Selling Solutions Patient Outcomes
2010–2019
Projects
Brand / TA Experience Examples
• Pricing Studies • AOR Men’s Health Brands • Patient Campaigns • Contract Sales Reps • Advanced Analytics
• Market Assessments • Brand Name Development and Testing • Ad Boards • MSLs • Direct-to-Patient Adherence Programs:
• MPA Client Target Projection, • Market Research • Speaker Programs, Speaker Bureau • TeleDetailing • inPharmacy
Quarterly MPA reports • inHome
• Consumer Positioning, Patient Insights Research Implementation
Project Examples
• Post-program Communications • inOffice
• Brand Stories
• Account Management • inStore
• Physician Message and Position Testing
• Message Map • PatientLink
• Campaign Development and Activation
• Rollout Support
• Global Disease State
Communications
Source: Salesforce.comOur U.S. Growth Strategy
• Optimize brand positioning and messaging
PHASE ONE • Improve market access for NATESTO®
Optimize existing efforts
• Enhance effectiveness of personal
promotion (specialist focus)
PHASE TWO
Broader sales deployment
• Expand specialist-focused sales footprint
aligned with improved market access
PHASE THREE • Enhance PCP pull through with Aytu
Pull through and push • Deploy targeted consumer promotion
Acerus/Syneos Health will utilize a phased and targeted approach to improve commercial
execution in the U.S.North American Commercial Platform Buildout
Field Sales Reps:
Acerus-owned commercial team with
national sales force of up to 8 sales reps
calling on primary care physicians and
specialists in the fields of urology and
men’s health
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Acerus: Specialty sales force of up to 44
sales reps focusing on high-prescribing
specialists in urology and endocrinology
Aytu: Primary care sales force of up to 36 44
36 sales reps focusing on high
prescribing PCPs
16Plan to Transform Acerus by 2021
Aytu Amended and Restated Agreement Transaction Benefits
• Effectively launch NATESTO® in the U.S. with Syneos Health
1) Scale-up and obtain critical
• Medical affairs focus to generate key opinion leader support
mass
• Managed markets focus to secure formulary access
2) Acerus to lead strategy and
• HCP and consumer awareness campaigns to generate new execution for U.S. NATESTO®
prescriptions
3) Expansion into the U.S.
• Generate meaningful EBITDA from NATESTO® Market
• Scout and sign additional complementary product agreements 4) BD pipeline enhancement
for both urology and andrology in North America to leverage
5) Compelling financial profile
operational structure in place for NATESTO ®
6) Catalyst for further turn-
• Proactively engage with the investor and analyst community on
around of Acerus
an ongoing basis to increase the capital markets profile of Acerus
The restructuring of the U.S. partnership for NATESTO® represents a transformative transaction which will
turn around Acerus creating a leading Specialty Pharma company with significant growth potentialNATESTO® IP Position • Acerus has rights to four Orange Book-listed patents in the United States that include claims regarding the nasal gel delivery technology for NATESTO® • Additional patents have been issued or are pending in over 60 more countries worldwide • Patents covering NATESTO® only start to expire in 2024, with pending patent applications that could extend coverage to 2032 globally and 2034 in the U.S.
Select Near Term Pipeline Candidates
Avanafil – Pipeline Candidate Canada
2nd Generation PDE5 inhibitor for treatment of erectile dysfunction (ED)
Acquired Canadian Marketing Rights from
Metuchen Pharma LLC
49% of Men Indication
Over 40 suffer from ED1 Treatment of erectile dysfunction (ED)
Advantage
Potential faster onset of action
Fewer off target effects
Fewer food and alcohol restrictions
$231 million (CAD)2 Regulatory Status
Filed NDS with Health Canada March 1, 2019
Canadian ED market value. Approval & launch expected H2 2020
Growing at 5.6% vs. prior year 2
Source:
1. 2015 CUA Practice Guidelines for Erectile Dysfunction as published in CAN UROL ASSOC J 2015; 9(1-2): 23-9
2. IQVIA Canadian Drugstore and Hospital Audit, December 2017
Accretive asset leveraging the NATESTO® call point and infrastructure
20Cannabinoid Initiative
Leveraging Nasal Technology In Other Applications
Phase I PK study completed December 2018
• N = 12 subjects with prior cannabis experience
• 5 mg cannabis oil orally vs. equivalent dose
delivered by nasal gel
Results “We have engaged Paradigm
• Nasal formulation was absorbed Capital to run a process to
• Extended PK profile with Tmax @ 7h after secure a partner interested in
administration developing medical cannabis
• Approx. 2.2 times better bioavailability of THC product(s).”
from nasal formulation vs. oral dronabinol
capsules1
• Subjects reported appreciation of nasal product
for quick/easy use, consistent dosing, portability
and absence of smoke.
1. Oh et al., Clinical Pharmacology: Advances and Applications 2017, 9, 9
Monetizing Nasal Technology In Other Fields
21Other Applications Of Nasal Technology
Future R&D Options
Potential Differentiating Features
• Rapid absorption and onset of action
• Mucosa highly vascularized
We are investigating other
• Lower dose; fewer side effects API’s and formulations that
• Potentially avoid first pass metabolism could lead to new products for
• High bioavailability-requires less API Acerus
• Potentially improved compliance &
persistence
• Non-invasive and user-friendly
Will Consider Partnership or Acerus-led Commercial Effort
22Our 5 Year Strategic Road Map
• Focus on NATESTO® in core markets (US, EU, CND)
PHASE ONE • Launch avanafil in Canada
Grow core franchises • Restructure and strengthen the balance sheet
PHASE TWO • Out-licence nasal tech in cannabis opportunity
Leverage internal R&D • Identify and advance new API opportunities
with nasal technology
• Act on opportunities to expand urology and
PHASE THREE andrology franchise
Expand and pivot • Add complimentary therapeutic areas via
development or BDThank You Ed Gudaitis President & CEO egudaitis@aceruspharma.com
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