LAO Aripiprazole OWLong Acting Oral aripiprazole Once Weekly

An alternative option to Long Acting Injectables (LAI) in the rapidly expanding market for

prevention of psychotic relapse

Preventing Relapse in Schizophrenia and Bipolar Disorders with oral once-weekly, fully medically-supervised therapy

• The total antipsychotic market in 2013 is US$ 24 billion; Zysis forecasts a 3-4.2% market share by value with peak year sales of ~1.4 billion USD.

• Our Long Acting Oral aripiprazole Once Weekly product with medically supervised dosing is intended to reduce relapse rate in the mild to moderate maintenance population of schizophrenia patients who require approaches to increase adherence but who are not ready yet for the highly invasive and extremely expensive option of the long acting injectable (LAI).

• An FDA New Drug Application submission is anticipated within 4 years, with a total investment of approximately US$23 million for clinical trial work required to reach this point. An open-label extension study (US$10 million) will be undertaken as part of the phase III program for pricing justification to demonstrate similar relapse rate improvements to LAIs.

• This is a low-risk project with a high probability of technical success given the now established pharmacokinetic (brain & plasma), safety and efficacy profile of aripiprazole in schizophrenia.

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Opportunity Summary

Aripiprazole is the market leader in $24 Billion world wide Atypical Antipsychotic Market

ZPREXA/ olanzapine

18%

INVEGA/ paliperidone

3%

INVEGA/SUSTENNA

3%

RISPERDAL/risperidone

5%

RISPERDALCONSTA

7%

GEODON/Ziprasidone

5%

Other 5%

SEROQUEL/quetiapine

26%

ABILIFY/Aripiprazole

30%

$7.2 Billion$7.2 billion

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Targeting unmet needs in schizophrenia – non-adherence

• Non-adherence rates are extremely high with schizophrenia therapy– ~75% of patients with schizophrenia are non-adherent within 2

years of being discharged from hospital1

• The consequences of non-adherence are medically (and economically) severe– 69% of patients with poor adherence suffer a relapse2

– (Only 18% of patients with good adherence suffer a relapse2)

• Poor adherence is a predictor of poorer outcomes– Poorly adherent patients are hospitalised more often, and for

longer periods of time3,4

Zysis is developing a true aripiprazole OW oral formulation

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References 1. Weiden PJ et al. Psychiatr Serv, 1995; 46: 1049–1054 2. Morken G et al. BMC Psychiatry, 2008; 8: 32–38

3. Valenstein M et al. Med Care, 2002; 40: 630–639 4. Gilmer TP et al. Am J Psych, 2004; 161: 692–699

LAOs – An Alternative to LAIs for Psychotic Relapse Prevention

• First-in-class antipsychotic therapy for orally dosed relapse prevention

• Better outcomes for doctors & patients – fewer relapses

• Direct cost savings for payers - reducing relapse & medical staff costs

• An earlier and more cost effective alternative to LAIs

LAO Aripiprazole – With Medically Supervised Dosing once weekly - targets and prevents relapse before resorting to LAI therapy

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How can we scientifically achieve aripiprazole oral OW?

Three key characteristics define the strategy : -

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Gastrointestinal compartmentSlow release from formulation & absorption over 24 to 48hours

Plasma compartmentLong plasma aripiprazole half-life

(3 days)

Brain compartmentVery slow aripiprazole dissociation

from the D2/D3 receptors in the striatum

Clinical testing of aripiprazole oral OW

Mean pharmacokinetic performance demonstrates ideal SR profile

Healthy volunteers for SR-A and SR-B vs immediate release (IR) reference

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Steady-state pharmacokinetic comparisons

Various IR and SR dosing regimens

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100 mg IR OW(for illustrative purposes)

140 mg SR-A OW

30 mg IR OD 15 mg IR OD 10 mg IR OD

60 mg SR-A OW 100 mg SR-A OW

Zysis Phase II study design

• This study is a randomised, single-centre, multiple group study in 30 schizophrenia patients (as defined by the DSM-IV-TR criteria)

• The primary objective of the study is to determine which dose of aripiprazole OW matches D2 and D3 receptor occupancy in the striatum region of the brain at trough (7 days post-dose), compared to aripiprazole OD.

• All 30 patients will be treated with 15 mg aripiprazole OD for three weeks (steady state) followed by PET imaging of receptor occupancy. After the run-in period, the patients will be randomized to one of the following three groups:-

– Group 1: 60 mg aripiprazole OW (n=10)

– Group 2: 100 mg aripiprazole OW (n=10)

– Group 3: 140 mg aripiprazole OW (n=10)

• After six weeks treatment with the OW regimen, PET imaging will be repeated at day 42 and compared to the IR OD findings.

• Study will be undertaken with Professor Gerhard Gründer and Dr Wolfgang Greb at PharmaImage

Comparing the receptor occupancy of aripiprazole OW with ODDose-ranging PET study in schizophrenia patients

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Zysis Phase III study design

Phase III options Patient numbers Cost[USD]

Time to regulatory submission

[years]

No Phase III study 0 0 1.5

Single Phase III study of 6 weeks’ drug treatment 625 12.5 million 3

Single Phase III study of 12 weeks’ drug treatment 625 18 million 3

Two Phase III studies of 12 weeks’ drug treatment 1,250 36 million 4

Demonstrating maintenance of efficacy and improved relapse prevention for OW vs ODSeveral possible options for Phase III/clinical trials to launch

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Likely Phase III strategy

An Open-Label Extension phase will be required for any phase III program to gather relapse rate improvement data for pricing purposes

Zysis Phase III study design

• The primary efficacy endpoint of the study is the change in PANSS total score from baseline. All participants will be eligible to continue in an open-label phase and receive aripiprazole OW for an additional 12 months.

• The objective of the extension phase of the study is to assess the safety and long-term durability of effect for aripiprazole OW.

• Three week run-in period for aripiprazole IR once daily before switch to aripiprazole OW to match phase II study design.

• The effect of improved adherence strategies will be investigated as part of the extension study.

Demonstrating maintenance of efficacy for OW vs OD

Topics under consideration ahead of EOP2 meeting with FDA

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Zysis regulatory strategy was validated by the phase III study design announced by Alkermes in December 2011 for ALKS 9070, a prodrug designed to provide patients with once-monthly dosing of aripiprazole

Zysis IP position

• Zysis filed a UK patent application on the SR aripiprazole formulation, which includes the OW positioning, with a priority date of 26 September 2006. A Patent Cooperation Treaty (PCT) application was filed 12 months later.

• The patent application entered the national phase of prosecution in key markets (US, Europe, Japan, Israel, Australia, Canada and South Korea) with amended claims in March 2009

• Granted patent with broad claims in :-– US (September 2013)– Europe (January 2012)– Israel (August 2012) – Australia (August 2013)

• Ongoing prosecution in Canada, South Korea and Japan

Aripiprazole oral OW has a strong intellectual property position

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Fully Medically Supervised

Dosing Fully Medically Supervised dosing ensures patients take every dose without forgetting and still demonstrates cost

effective, health economic superiority to all other therapies.

LAO Aripiprazole OW – Targeting Psychotic Relapse

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Sustained Release

Formulation Our patent protected sustained release formulation allows for oral once weekly dosing to become a reality by increasing drug residence time at the site of action.

Molecule The antipsychotic Aripiprazole has the best efficacy/side effect profile of all the atypicals

Fully Medically Supervised Dosing eradicates all potential issues that may arise with a OW Oral product

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Issue• A OW product is simply a convenience product with no real therapeutic benefit so price has to

be at generic levelSolution• Medically Supervised Dosing ensures Relapse Rate Improvement which on a pharmaco-

economic basis justifies a higher price than generics albeit much more cost effective than LAIs

Issue• Once Weekly dosing can be more difficult to remember than once daily dosingSolution• Medically supervised dosing takes away the responsibility of remembering from patients

ensuring continuous therapy provision (in common with LAIs)

Issue• Many psychotic patients are on several once daily medications.Solution• Medically supervised dosing ensures that at least the most important therapy (the anti-

psychotic) is taken and reduces the number of drugs the patient has to remember to take once daily.

Launch Product Profile for LAO Aripiprazole OW

Feature BenefitLong acting oral – otherwise as effective/safe etc as the once daily oral

Patients only have to take their medicine orally, once weekly

Structures are in place to support medically supervised patient dosing in the clinic & by medical staff in the community

The responsibility of remembering to take the treatment is taken out of the patients hands using existing care platforms

Observing the patient take the therapy can be done in the clinic by a minimally-trained person

Requirements to monitor dosing in the clinic is not onerous – no litigation requirement for two in surgery cost, shorter paper trail, no needle disposal cost, no secure storage cost, no refrigeration cost, no waiting in surgery after dosing…all easier than a LAI

USD 9 is justified by modelling and data generated through relapse rate improvement pricing study

One year study shows relapse rate reduction eg. from 45% to 20% for medically observed once weekly dosing

Patients stay out of hospital and symptoms are under control

HE modelling demonstrates substantial direct & indirect HE benefit priced at USD9 per day

Patients on oral OW therapy cost less overall, long-term to treat

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Pricing and cost-effectiveness

• Open label extension study will be added onto the Phase III program to investigate relapse rate improvement and generate the data for LAO Aripiprazole OW pricing arguments

• Risperdal depot achieved 17% relapse rate in a similar open label extension phase study

• LAO Aripiprazole OW should achieve at least an equal relapse rate to Risperdal Depot

• Phase ii independent Health Economic Modelling justifies a price of USD 9 per day at a relapse rate of 17% per year

Precedent is set with payers - LAIs use improvement in relapse rate to justify premium pricing

Key concepts to build a strong cost-effectiveness argumentThe argument justifying the price of LAO Aripiprazole OW:

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Modelling Medically Supervised Dosing for Aripiprazole OW

Cost benefits are achievable with medically supervised dosing over all other therapies

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Cost Savings Per Patient Per year USD

LAO Aripiprazole OW with medically supervised dosing at 9 USD/day

Long-acting injectable Aripiprazole once monthly $5,899Long-acting injectable Paliperidone once monthly $4,804Long-acting injectable Risperidone twice monthly $4,648

Long-acting injectable Generic once monthly $889Immediate release oral Branded daily therapy $3,712Immediate release oral Generic daily therapy $427

The costs of Schizophrenia therapy are driven by the cost of relapse

A treatment that improves relapse rates can justify a higher price (cf LAI Aripiprazole OM)

LAO Aripiprazole OW – Market Share AnalysisMaintenance Market Segment*

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LAO Aripiprazole OW Conservative Scenario Market Share 10% of Repeat Relapses, or 5.5% of *Maintenance Market Segment

Market Share of Total Schizophrenia Market = 3-4.2% (vol or pats)

Disease severityModerate ~65%Mild ~25% Severe ~10%

Adherent~25%

Disease severity and prevalence

Few Relapses~10%

Repeat Relapses~55%

Frequent Relapses~10%

Oral Once-Daily Long Acting Oral Long Acting Injection

*Maintenance Market Segment represents 70% of total schizophrenia market

Forecast Sales

Assuming Relapse Rate Improvement Data justifies 9 USD per DaySales for a product priced at USD 9 Per Day, with a 3 - 4.2% market share:

2019 2020 2021 2022 2023 2024 2025 2026

EU Schizophrenia patients (m) 3.13 3.13 3.14 3.14 3.14 3.14 3.15 3.15US Schizophrenia patients (m) 3.57 3.59 3.61 3.63 3.65 3.68 3.70 3.72EU BP1 patients (m) 3.14 3.14 3.14 3.14 3.15 3.15US BP1 patients (m) 3.61 3.63 3.65 3.68 3.70 3.72EU Penetration of Ari OW (%) 0.005 0.010 0.015 0.020 0.025 0.030 0.030 0.030US Penetration of Ari OW (%) 0.010 0.020 0.025 0.030 0.035 0.040 0.042 0.042EU patients treated with Ari OW (k) 15.66 31.35 94.11 125.56 157.06 188.61 188.74 188.87US patients treated with Ari OW (k) 35.68 71.79 180.54 217.95 255.80 294.10 310.66 312.52

Total patients treated 51.34 103.13 274.65 343.51 412.87 482.71 499.40 501.39Price per patient per year 2785 2785 2785 2785 2785 2785 2785 2785

Gross Sales ($m) * 142.97 287.19 764.79 956.55 1149.67 1344.15 1390.62 1396.18

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* Sales in Major Depressive Disorder (MDD) are not included in this analysis however Aripiprazole Once Daily has an indication for this condition and off-label MDD sales are anticipated for Aripiprazole OW.

Market Penetration

Upside Sales Analysis

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Once the Supervised Dosing strategy has achieved market acceptance…

Why wait for multiple relapses?

‘To be used just before LAIs’ Becomes ‘To be used after first relapse, as non-adherence is clearly now an issue’

First Relapse

Second Relapse

Third Relapse

Fourth Relapse (or more)

Re-stabilised2-3 months inhospital

Non-adherencere-emerges

Non-adherencere-emerges

Non-adherencere-emerges

Last Resort The LAI

Zysis

• Dr Peter Cozens, Non-Exec Chairman– More than 30 years’ experience in licensing– Chairman of the Intellectual Property Advisory Committee of the UK BIA

• Dr Ian Wilding, VP – Development– Founder of Pharmaceutical Profiles, a Phase 1 CRO– Leading authority in drug delivery and formulation development, with 250 patents

and publications– Advisor to US FDA

• Mr Russ Pendleton, VP – Commercial– 14 years in big pharma Sales & Marketing, including the global launch of three

psychiatric drugs – Global Brand Manager – Seroquel, AZ– Founder of Cortex Congress Neuroscience Conference company; 12 years of

establishing and managing conferences in psychiatry and neurology

Management Team

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