Promising early results reported

3rd Quarter 2011 Promising early results reported….. Erik Christensen MD PhD, CEO Ruben Ekbråten, Finance Director Slide 1 3rd Quarter 2011 Highl...
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3rd Quarter 2011

Promising early results reported….. Erik Christensen MD PhD, CEO Ruben Ekbråten, Finance Director

Slide 1

3rd Quarter 2011

Highlights  Promising early results for blood based diagnostic test for early Alzheimer’s disease  Study results to be presented at the CTAD meeting in November  Progress in discussions with pharma and imaging companies  Important US breast cancer gene expression and protein patent awarded

Slide 2

DiaGenic

Business strategy





Slide 3

The goal of the company is to take a leading position in the area of blood based diagnostics within selected CNS disease areas, through its ability to deliver precise, well-documented tools for early detection. This position will be achieved through pharmaceutical partnership, sale of commercial rights and co-development agreements with large pharmaceutical companies.

Driving multiple collaborative agreements forward Pharma 3-6 Imaging 2

Pharma 7 - 8

Expressed need for noninvasive MCI biomarker

Initial talks

DiaGenic identified as technology provider

Collaborative models discussed

Pharma 1-2 Imaging 1

Semi-exclusive & R&D collab. proposed

Milestone based payments

MCI biomarker ready for research and development

DiaGenic’s current status







Multiple interactions with pharma and imaging companies advancing according to plan Collaborative partner deals yielding: ‒

R&D technology fees



Exclusive and non-exclusive licenses with milestone based payments



Product revenue from companion diagnostics

Ferghana Partners appointed advisors on commercial transactions ‒

Slide 4

Searches for potential licensees of DiaGenic’s technology

The value chain

DiaGenic key competencies and assets

Discovery

• Technology knowhow (WGA, PCR, RT-PCR etc) • Bioinformatics • Biomarker identification • Broad clinical network (Europe and US) • World class biobank o Sample quality o Clinical documentation • CRO competence

Development

• State of the art know-how on biological and RNA sample handling • Assay design and optimization • QA • Multiplex RNA biomarkers • Software development • Multivariate data analysis

Documentation

• QMS compliant to ISO13485 • Laboratory and operator qualification • Instrument qualification and maintenance plan • Regulatory • IVDD compliance • Technology • Product verification • Product validation • Process verification • Process validation

Distribution

• Experienced management team • Distribution network Europe • Seeks US partners

DiaGenic has the experience on taking a product from discovery to market Slide 5

DiaGenic Core Assets,

World class biobank – a key differentiator 

>7000 clinical and technical donors • • • •

AD studies 2500 donors PD studies 900 donors BC studies 3500 donors Technical studies 700 donors

– Samples from clinical sites in Europe and USA – Clinical and technical samples from all relevant clinical groups and from age matched healthy controls – Comprehensive clinical info following each sample (CRF) • Strict focus on sample and data quality and on biobank QA • Source verification of medical records by in-house monitors

– Ethical approval (REK) – PAXgene blood samples, 2-4 tubes per donor • An increasing business standard

Slide 6

DiaGenic Core Assets

Alzheimer’s Disease intellectual property 

DiaGenic is ahead of competition in blood based AD diagnostics – US patents effectively protects our concept/technology/tools in using gene expression in AD including MCI • Others can not launch or perform market preparation trials in the US

– EU patents protects concept/technology/tools • Exception is continued use of exploratory technologies

– DiaGenic has freedom to operate in the field • Confirmed by 3rd parties

Slide 7

DiaGenic Core Assets,

First US breast cancer patent awarded 

DiaGenic’s first patent on breast cancer in the US was accepted and notice of allowance was received on the United States family 3 patent application (11/628,300). –







During the third quarter the Australian family 3 patent application (2005250219) was granted. –



The allowed claims address diagnosis and monitoring of breast cancer using both gene expression and/or protein-based technologies. A broad range of gene probes, their functional equivalents and related protein targets are important for any multimodal diagnostic approach within the breast cancer field. The family 3 patent has earlier been granted in Europe and some other countries and they are valid until 2025.

The granted claims cover the use of some important gene sequences in blood sample for detection of cancer, among others, breast cancer.

These important patents substantially strengthen the breast cancer portfolio offering to potential external partners, executed by our consultants Ferghana Partners in the US.

Slide 8

Providing CNS biomarkers for clinical trials and prescription drug use Creating one–to–one relationships

Slide 9

Utility of blood based gene expression applications

A multitude of opportunities Application

Biomarkers

• Reduced size of clinical trials • Reduced cost of clinical trials

Early onset

• Selection tool which potentially can open up the market for expensive PIB PET imaging

PET enabler

• Classification of patients into different stages of the disease (e.g. drug efficacy measurement)

Staging

Prospective tool to differentiate expected speed of progression

• Classification of patients into different treatment schemes (e.g. dosage optimisation)

Progression

Select patients for therapy – Companion Diagnostics

• New therapies and expanded target populations

Companion Dx

Early disease and prodromal stages detection

• Speed up diagnosis and reduce cost of diagnosis • Enable earlier intervention

Prodromal

Patient selection tool for clinical trials Selection tool for expensive imaging procedures

Monitor disease progression

Slide 10

Utility

Development of blood based biomarkers for early stages of Alzheimer’s disease

Promising early results reported  The objective was to identify gene expression patterns in blood from patients who progress from MCI to Alzheimer’s disease and on further disease progression  Compared longitudinal changes in subjects with Alzheimer’s disease using;  DiaGenic’s extended gene set from whole genome studies  DiaGenic’s blood samples from our own clinical studies on MCI patients with validated expert consensus diagnosis  Validated diagnostic technology platforms  Next generation FDA compliant instrumentation (ABI ViiA7)

 Proof of concept established  Successfully delivered on time  DiaGenic’s bioinformatic findings in the study verified  Study results to be reported at the CTAD congress November 3-5th 2011

Slide 11

Validating the prototype biomarker for MCI converters

Taking MCI blood based biomarkers to FDA and beyond

Calibration

• Build solid calibration model from a larger data set • Larger cohort (n>100): • 50 MCI converters, including the 30 converters from pilot

Validation & Verification

• Independent validation cohort: • Aiming for 100 MCI converters • Additional DiaGenic samples from our ongoing clinical studies

Technical verification to prove robustness (like our earlier CE studies) (Samples: from DiaGenic biobank Controls+AD+MCI)

Submission

Validated biomarker qualified by FDA for investigational use

• Application in Phase III designs: Qualification of biomarker by FDA to support use of the biomarker during drug development (e.g. patient enrichment tools) Ready to use in 2 years - depending on sample availability - depending on regulatory process

PMA for IVD purposes

Slide 12

Selection tools for Prodromal AD clinical trials

Example: 24-Month Clinical Trial Screening (up to 4 weeks)

Double-Blind treatment period (104 weeks)

Selection based upon: • Cognitive testing • MRI-brain

Subject continues in Extension

Compound X low dose QD (n=500) Compound X high dose QD (n=500)

and • MCItect

Placebo (n=500)

Standard of Care Interim analysis occurs when approximately 50% of the planned subjects in each treatment group have either completed or discontinued before 52w of treatment.

Visit 1 MRI Up to 4 w before Baseline

Week 0

Visit 2 Visit 3 Baseline Randomization PET CSF ADAS-cog ADCS-ADL

Slide 13

Week 52

Visit 4 PK/PD CSF

Visit 5 PK/PD

Visit 6 PK/PD

Week 104

Visit 7 PK/PD

Visit 8 PK/PD

Visit 9 PK/PD End of treatment MRI PET CSF ADAS-cog ADCS-ADL

Selection tools for Prodromal AD clinical trials

Enrichment of MCI converters to AD Reducing sample size in MCI clinical trials

- Prodromal AD population, disease modification claim, primary outcome conversion to AD supported cognitive and functional testing (CDR). - The duration of prodromal AD trials is 2 years with annual conversion rate to AD of 12-14% - The theoretical example below is based on a Phase III trial scenario with 125 MCI converters per arm required to demonstrate a statistical difference between active treatment.

Cohort

Eligible for inclusion

MCI biomarker

Final inclusion

Estimated Conversion rate per arm

MCI

522

No

522

125 converters

MCItect enriched

685

Yes

255

125 converters

Enrichment of target population using MCItect – attracts pharma interest!  Saving operational costs by 30%-40% by reducing study size  Increasing trial success rate  Improved ratio responders vs. non responders in treatment arms  Homogenous study cohort  Reduce attrition and non-compliance Slide 14

Companion diagnostic value proposition DiaGenic to develop key solutions for Amyloid PET producers

Characteristics

High end imaging diagnostics (PET)



Slide 15

Challenges

 PET imaging diagnostics are the most accurate diagnostic tool for Alzheimer Disease

 High cost per patient

 Expensive equipment and procedures

 Lack of objective selection criteria for reimbursements

 Capacity constraints – limited no of scanners available due to cost

Value proposition

 Blood-based diagnostics as a tool for preselecting patients for PET  Increases hit-rates

 Reduces capacity constraints  Validates reimbursement

Dialogues with producers of amyloid PET tracers on R&D collaborations since last report have advanced – Collaborative study protocols developed, clinical site reviewed and funding scenarios pursued – Collaboration with PET producer will ensure traceability to AD amyloid diagnostics – PET producers see a potential use of blood based biomarkers together with high cost PET imaging as part of a multimodal approach of future AD management

3rd quarter 2011 financials

Slide 16

Finance,

Income Income (thousand NOK)

• Operating revenue in Q3: recognition of milestone revenue from R&D collaboration with pharma and ADtect sales

2 800

2 400

2 000

1 600

1 200

800

400

Operating revenue Grants

Slide 17

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

8

1 078

1 608

1 151

276

946

1 338

990

926

1 100

• Research grants in Q3 totalled NOK 1.1 million

Finance,

Profit & Loss Other Operating Cost

P&L 3Q

(thousand NOK)

(thousand NOK)

3Q ‘11

3Q ‘10

12 000

Revenue

276

8

10 000

COGS

133

178

8 000

9,611

9,445

6 000

(9,468)

(9,615)

4 000

Net finance

493

15

2 000

Net income

(8,975)

(9,600)

Other Operating Cost Operating loss

Salaries and related Depreciation and Write downs Other operating cost

Slide 18

3Q 11 9,611

3Q 10 9,445

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

5 618

5 944

6 177

4 787

5 808

250

279

238

239

261

3 577

4 019

4 005

3 844

3 542

Finance,

Cash position Cash and Cash equivalents (million NOK)

• Long term financing secured in Q4 2010

120,0

• Cash balance end of September 2011: NOK 66 million

100,0 80,0

• Allotment of options in the quarter

60,0

 

40,0



Allotment of 420,000 options 4 years life and can be exercised after 3 years Strike NOK 6 per share

20,0 Cash

Slide 19

Q3 '10 10,1

Q4 '10 98,8

Q1 '11 86,7

Q2 '11 76,1

Q3 '11 66,3

• No significant changes in cost level expected for Q4

Outlook & Summary

Slide 20

3rd Quarter 2011

Outlook

 Execute on the companion diagnostics initiative towards pharma and diagnostic companies  Presentation of study results at the 4th Conference Clinical Trial on Alzheimer’s Disease in November 2011

Slide 21

DiaGenic

Your preferred partner for gene expression profiling in blood Core competence and assets:  

Delivers unique biomarkers in a well defined market characterized by a large unmet medical need World’s first company with – – –



Strong IP protection within blood based AD diagnosing and monitoring. –



Slide 22

Broad claims protects against infringement.

Competence and experience in all aspects of product development from discovery to regulatory – – – –

 

Approved blood based test in AD diagnosis Prodromal AD proof of concept demonstrated Progression markers identified

Strong knowhow on technologies and platforms Strong competence in bioinformatics R&D collaboration with reputable university hospitals in US and Europe World Class Biobank

Good track record on receiving public grants Overall aim is to provide Companion Diagnostics tools for pharma and imaging companies

DiaGenic ASA Grenseveien 92, N-0663 Oslo, Norway Tel +47 23 24 89 50 Mail: [email protected] www.diagenic.com

For more information, see www.diagenic.com

Slide 24

Disclaimer This presentation includes forward-looking statements regarding DiaGenic ASA, including projections and expectations, which involve risk and uncertainty. Such statements are included without any guarantees to their future realization. Although DiaGenic

believes that the expectations regarding the Company

reflected in such forward-looking statements are based on reasonable assumptions, no assurance can be given that such projections will be fulfilled. Any such forward-looking statement must be considered along with knowledge that actual events or results may vary materially from such predictions due to, among other things, political, economic, financial or legal changes in the markets in which DiaGenic does business, and competitive developments or risks inherent to the Company’s business plans. Many of these factors are beyond DiaGenic’s ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. The Company does not intend, and does not assume any obligation, to update the forward-looking statements included in this

presentation as of any date subsequent to the date hereof.

Slide 25

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