Phylogica Ltd
ASX: PYC
Doug Wilson
www.phylogica.com
Introduction
Specialist drug discovery company with unique capabilities to
identify novel drug candidates (prototype drugs)
Proprietary technology based on world’s largest and most
structurally diverse peptide library of drug-like compounds
Low–risk strategy to drive revenue growth and accelerate
profitability through technology licensing and fee-for-service drug
discovery
Initiated commercialisation phase – progressing multiple deal
opportunities with major pharmaceutical companies
Secured key agreement with Roche, Europe’s largest pharma
company, with potential to generate substantial income
Experienced management team with required skills to execute
deals and commitment to maximise shareholder value
Traditional drug development pipelines are drying up
Numbers of conventional ‘small molecule’ drugs coming to
market are diminishing
Biologics: The fastest growing class of new therapeutics
1996
2%
98
%
2015
50%
50%
Small
Molecules
Biologics
Biologics consist of
•
antibodies
•
proteins
•
peptides
2008 worldwide sales = $120 Billion
Phylogica has discovered a novel source of therapeutics
peptides known as “Phylomers®”
Drug Costs (US$Billion)
Cost of small molecule drug development are increasing exponentially
Targets most amenable to treatment with conventional small
molecule drugs are drying up.
Cost to develop drugs against “difficult” targets increasing
exponentially
•
•
®
Phylomer
Peptides
Phylomers® represent a new class of peptides derived from natural
protein fragments encoded by biodiverse ancient bacterial genomes
Phylomer libraries contain billions of distinct peptides from diverse
branches of the evolutionary tree
The libraries are made from genomes of bacteria, many of which live in
extreme environments like volcanic streams, geysers and deep sea
volcanic vents
Phylomer structures are pre-selected by evolution to allow survival
High thermal stability is a desirable characteristics of drugs
Watt PM (2006) Nature Biotechnology 24 (2):177-83
Advantages of peptides over other biologics classes
Peptides have advantages over larger biologics (eg. MAbs)
•
patient friendly delivery - several marketed intranasal spray formulations
•
can be made synthetically at low cost
•
avoids additional costs due to antibody-associated ‘royalty stack’
•
can be delivered into cells
•
can exhibit good tissue penetration due to smaller size
Antibody (~150 kilodaltons)
Phylomer (~3 kilodaltons)
Addressing the challenge of peptide drug discovery
Peptide market growing nearly twice as fast as small molecules
•
33 marketed peptides represent $4 billion market (excluding insulin)
•
178 peptides in clinical development
•
400 peptides in advanced preclinical development (tip of the iceberg)
•
virtually all peptides come from analogues of natural peptides
Phylogica has developed next generation of peptide therapeutics
•
most diverse set of peptide structures available
•
bigger pool of different structures to choose compounds from
•
libraries yield best quality and quantity of drug prototypes available
Traditional path to drug development
Big Pharma
10-15 year cycle, costly
Traditional Biotech Model
Most Australian biotech’s can progress only 1-2 candidates
High risk: requires long-term investment and mostly fails
De-risking investment in drug development by focusing on drug discovery
Proprietary peptide libraries and screening systems for drug discovery
Maximizing near-term revenue growth through drug discovery alliances
Anticipate 3-4 deals required to reach cash flow sustainability
Entered first major drug discovery alliance with Roche in December 2009
Model provides access to long-term revenue streams
Building long-term value through milestones and royalties
Objective to secure an increasing share of down-stream value in
progressive deals
Discovery alliances – multiple revenue sources
Discovery Pharma Partnerships
Value Per Drug Target (US$)
Upfront license fee
$500K
Contract Discovery (3-4 FTE’s/yr)
$750K- $1M
Milestone Payments
$1M - $100M
Royalties
usually single digit %
Preclinical Licenses of Internal Drug Leads
Upfront fee
Milestone Payments
Seven to eight figures
Royalties
Large Strategic Alliance Around Disease Areas
Ablynx/BI
$1.8 Billion
Galapagos/Merck
$1.0 Billion
Morphosys/Novartis
>$600M
Successful companies focused on discovery-alliance model
Company
Platform
Market Value
2009 Revenues
Listed
Morphosys
Antibody Library Screening
>US $500M
€81M
DE
Evolva
Library Screening/Small Molecule
>US $400M
CHF $11M (2008)
SIX
Evotec
Genetic Library Screening/Small
Molecule
>US $300M
>€40M
Frankfurt/Nasdaq
Galapagos
Genetic Library Screening/Small
Molecule
>US $380M
€100M
€2.4B
Listed on
EuroNext
Galapagos: major alliances
Phylomer hits belong to multiple structural families: diversity of shapes
Bordetella: (40L_0716)
Haloarcula: (40L_0735)
Homologous Crystal Structure
Bacteroides: (40L_0859)
S. enterica.
(dTDP-D-glucose 4,6-dehydratase)
48% ID
E. coli.
(Ferric siderophore receptor)
98% ID
All SCOP Classes Represented
B. stearothermophilus
(Alpha-L-arabinofuranosidase)
36% ID
Intellectual Property
integrated patent portfolio
Phylogica owns the most comprehensive collection
of peptide structures found in nature
Patents cover methods of making and screening
Phylomer libraries and composition-of-matter on
peptides and the libraries themselves
16 patent families, 26 granted/ allowed patents and
27 patent applications covering the markets of US,
Europe, Japan and Australia
Well-positioned for commercial success
Extensive evaluation studies validate the high quality of Phylomer library hits
Multiple in vivo efficacy studies support therapeutic potential of Phylomer drug
candidates
Versatility of libraries endorsed by multiple international collaborations
Deal discussions progressing with >20 prospective pharma partners
Late-stage negotiations with three major pharma companies
Developing new generation Phylomer libraries to expand discovery platform
Building screening capabilities for future strategic alliances
M&A activity in biologics discovery field
Eight acquisitions of companies with biologics discovery libraries in less than 2 years
Average valuation at acquisition of A$450M
62% of companies acquired at pre-clinical stage
Pharma values drug discovery engines with associated proprietary drug libraries
Phylomers: a versatile toolbox for drug discovery
Summary
Unique drug discovery resource for pharmaceutical industry
Technology is fully validated, scalable and optimized for commercialization
Broad patent protection for entire class of drugs
Initiated commercialization phase, three late-stage deal negotiations
Strategy for near-term profitability driven by fee-for-service business model
Objective to secure an increasing share of down-stream value in progressive deals
Potential exit opportunities via trade sale or major strategic alliance
Phylogica Ltd
ASX: PYC
www.phylogica.com