Nemifitide Today’s Risks in Investing and Tomorrow’s Possible Financial Gains Depression is Sweeping the Globe • • • • Depression affects 18 million Americans every year and costs the U.S. $24 billion annually. About 10 % of the nation suffers from major depression but many remain untreated and undiagnosed. More than 45 million worldwide suffer from depression, making it the largest market for drugs. Over half of the people undergoing treatment for depression discontinue their usage due to side effects. Innapharma, Inc. • • Biopharmaceutical company that discovers, develops, commercializes pharmaceutical products that treat serious illnesses including depression, anxiety, and other central nervous disorders. Since 1990, has synthesized and patented a novel platform of pharmaceutical “small chain” peptides for the treatment of these diseases. Innapharma Wants Some of the Pie • • The current anti-depressant market is 13.4 billion dollars and climbing at a rate of 10% every year. The company hopes to capture a significant portion of this market because of its new drug’s lack of side effects and high level efficacy. Market Analysis Prozac Paxil Other Zoloft Celexa Estimated Earnings by 2007 • • • By the 2006, the market is estimated to be at about $18 billion and Nemifitide’s projected earnings are $500 million. By 2007, Nemifitide’s projected earnings are $1.8 billion. Thereafter, the market is expected to increase to $20 billion with Nemifitide drawing in $3 billion. Market Estimate Post 2007 Generics 25% 40% Celexa Nemifitide 20% 15% Other New Compounds & Non-Generic New SSRIs So what is Nemifitide? Nemifitide: Hard to pronounce but it makes rats AND humans happy. • Nemifitide, a pentapeptide administered through an injection, is believed to be a powerful therapeutic tool in the treatment of depression. Nemifitide has distinct advantages over other drugs currently offered, such as Prozac, Zoloft and Paxil. • 1. 2. 3. 4. • It works faster. Rapid onset of action can be observed within 3 to 5 days and reaches peak effects within a week as oppose to other drugs that can take as long as 4 to 8 weeks to kick in. It works better. About 80% of patients with depression respond to it as opposed to most drugs with a response rate of about 50%. Most of these patients enter remission from depression. It treats more disorders. Nemifitide is also effective against mild depression, anxiety disorders, anorexia, bulimia, panic disorder, and post-traumatic stress disorder. It can be given in many forms including orally, through injections, and skin patches. More on Nemifitide • Innapharma has conducted extensive testing of Nemifitide on both animals and humans over the last ten years. • Currently, the compound is in late Phase II clinical trials and is anticipated to be commercialized by early 2006. Comparison of Nemifitide With Other Major Anti-Depressants Nemifitide SSRIs (Prozac, Zoloft, Paxil) TCAs (Elavil) MAOIs (Nardil) 3-5 Days 2-6 Weeks 2-6 Weeks 2-6 Weeks Dosing Once every 4 months Daily Daily Daily Side Effects Leading to Discontinuation of Drug 1 out of 427 Yes Yes Yes Major Drug Interactions No Yes Yes Yes Sexual Dysfunction No Yes Yes Yes Sleep Disturbance No Yes Yes Yes Altered Appetite and Weight No Yes Yes Yes Interference With Cognitive Skills No Yes Yes Yes Onset of Action Standards for Food And Drug Administration Approval • • • • Process of approving a drug is notoriously vigorous, consisting of three distinct levels of clinical trials. Only 30% of proposed drugs make it past Phase I and only about 50% of those make it past Phase II. Nemifitide is in late Phase II right now and is moving on to Phase III within the next few months. For this project, we tested Prozac’s results for these trials with Nemifitide’s to see if Innapharma’s estimates are well-founded. Phase I • • Start out on animals and then on humans. Purpose is to evaluate safety, safe dosage ranges, and any immediate side effects. • • Testing on animals continues into Phase III to identify long-term side effects. Test on rats is called Porsalt test. A rat is placed in a beaker filled with water so that it cannot reach the bottom. Then it is tested with and without the drug to see how long it can swim. If it swims significantly longer with the drug, then the drug is said to be effective. Phase II • • • • Requires a double-blind placebo test (Neither patient nor doctor knows if placebo is being given). Patients must have same level of depression (determined by 17 point Hamilton scale). Patients with other disorders are not used i.e. drug addicts, multiple mental disorders, AIDS and cancer patients. No elderly or adolescent people are used either. Phase III • An extension of Phase II with a larger population size. Large margin of errors later on in the presentation would be significantly decreased at this point. Calculation of Innapharma’s Risk in Phase II • • • • • In order to assess risks in these trials, we used two calculations. The formula: Risk = .05- (p1-p2)/ square root( p1(1-p1)/N1+ p2 (1-p2)/N2) was used to calculate the risks associated with the respondent rate and the side effect percentages. The .05 in the above formula represents the concept that if the differences between the Ps is greater than or equal to 5%, then the results are mathematically significant. The Ns are derived from the number of patients undergoing trials during Phase II of testing. Nemifitide used 427 people while Prozac used 300. P1 is Nemifitide’s percentage and P2 is Prozac’s percentage during the same stage of testing. Percentage of Respondents • • • • P1=.8 P2=.45 Z- Score: -8.6613 .5-.4990=.001 Percentage of Patients with Side Effects • • • • • P1=.01(only 1 out 0f 427 dropped out) P2=.2 Z- Score: 10.17 .5-.4990=.001 *Note- A side effect is only taken into consideration if it causes the patient to discontinue usage of the drug. Common Side-Effects Experienced with Most Anti-Depressants • • • • • • • Injection Site Reaction Headache Dizziness Nausea Constipation Metallic Taste Abdominal Pains Risks • The risks have been calculated at a little or no risks with Z scores equaling .4990. • The concept of risks can be defined as the chance we are taking. (Type I error)The null hypothesis for calculation of response is P1>P2 and the null hypothesis for the calculation of side effects is P1<P2. • Innapharma has a slim chance of being wrong. Margin of Error • Formula: 100*1/square root N • N=427 • Margin of Error = 4.839% Prozac • N=300 • Margin of Error = 5.774% The Margin of Error seems high for both but this will be improved in Phase III when 1000 patients are used. Conclusions • In comparison to other leading anti-depressants, Nemifitide is a more effective drug with fewer side effects. The results are not doctored because like Prozac, Nemifitide had to pass FDA regulations. • The risk we have calculated is small and the margin of error should be very small by the end of Phase III. Therefore, it seems wise to invest in Innapharma’s new anti-depressant, Nemifitide.