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Analyst ReportCoverage initiated on June 24th, 2015Aurgalys is contracted by OSE Immunotherapeutics to provide equity research

OSE Immunotherapeutics

Jamila El Bougrini, PhDMickael Dubourd, PhD, SFAFParis & Evry, France

June 7th, 2016Euronext Paris: OSE [FR0012127173]

OSE Immunotherapeutics: natural weapons to fight cancer and autoimmune diseasesOSE Immunotherapeutics is the result of the merger between OSE Pharma, specializing in cancer immunotherapy, and Effimune, specializing in immune regulation. The company has 2 products in clinical trials. Tedopi is a cancer vaccine, currently in an international Phase III trial, offering new perspectives for the management of Non-Small Cell Lung Cancer (NSCLC), a cancer resistant to chemotherapy with a poor prognosis. FR104, an anti-CD28, is currently at the end of a Phase I trial and could provide new therapeutic options for immune-mediated inflammatory disease (IMID) management, such as rheumatoid arthritis which represents one of the most common and disabling IMIDs. OSE Immunotherapeutics’ business model is to license its products after they reach key development milestones. The company would license Tedopi after Phase III trial, and for FR104, an agreement with Janssen was secured in 2013. Janssen could exercise an option on FR104 for a €150M deal, expected in H2-2016, depending on Phase I results. Based on the NSCLC indication alone for Tedopi, and the RA indication alone for FR104, our target price for OSE Immunotherapeutics is €16.38/share.

The synergy between complementary expertise in immunotherapy

The two teams benefit from strong experience in R&D and immunother-apy. Moreover, the corporate location, in a competitive scientific hub (Nantes, France), provides the company all the tools needed to develop their product pipeline. The new entity has two strong and innovative ap-proaches of immunotherapy, combining both activation and modulation of the immune system. The company’s technology has the ability to use the immune system, the natural mechanism of defense in the body, as a very specific and efficient weapon to fight diseases.

A licensing deal strategy well positioned and in line with the interests of the pharmaceutical industry

Immunotherapy has been a hot topic for the last couple of years, supported by a therapeutic strategy that is both very specific and non-

Estimated price*:

€16.38

Share price (€)(as of Jun. 7th, 2016)

7.38

High/Low (€)(since Jan. 1st, 2016)

8.59/5.70

Market Cap. (€M)(as of Jun. 7th, 2016)*

105.1

Estimated Net Cash(€M)

15.0

Estimated Market Cap.(€M)

233.3

Number of shares (M) 14.2

Estimated price (€) 16.38

3-month average daily volume

6,000

Free Float 46.0%

Euronext since Jan. 1st, 2016OSE Immuno. -12.9%Alys France* -11.0%Next Biotech -9.6%CAC Healthcare. -4.5%CAC 40 -3.5%CAC Small -2.1%* Index of French smallcaps (less than €1B market capitalization at time of inclusion) in the healthcare and life sciences sector, listed on Euronext Paris.See http://www.aurgalys.com/aurgalys-indices

http://www.aurgalys.com/aurgalys-indices


invasive. These drugs make disease management more suitable and comfortable for patients suffering from disabling disorders induced by the disease itself, and also by treatments which may lead to bad side-effects. Large pharmaceutical groups are interested in acquiring new technologies in the immuno-oncology and auto-immunity field, and OSE Immunotherapeutics is well positioned to secure licensing deals. For instance, Tedopi is currently in Phase III, and FR104 already benefits from a licensing option from Janssen.

Valuation of OSE Immunotherapeutics

Considering OSE Immunotherapeutics’ most advanced products, Tedopi in NSCLC and FR104 in RA, we value the company at €233.3M or €16.38 per share. Other programs under development, especially Tedopi in combination with approved immune checkpoint inhibitors, Effi-7 and Effi-DEM dedicated to auto-immune diseases and cancer treatment respectively, were not included in our model but could significantly contribute to OSE Immunotherapeutics’ value should the company successfully develops these programs.


Table of Contents

1. A rational merger between two players in immunotherapy 4

1.1. Immunotherapy: great hope for many patients 4

1.2. OSE Immunotherapeutics, a strategy build on activation and modulation of the immune system 6

1.3. A business model based on licensing agreements 8

1.4. A product pipeline combining immuno-activation and immuno-modulation assets 10

2. Product candidates in the Immuno-oncology field 11

2.1. Tedopi in Non-Small Cell Lung Cancer 13

2.2. Tedopi in combination therapy and other cancer indications 22

2.3. Effi-DEM : reactivate the immune system to block cancer progression 24

3. Immune-Mediated Inflammatory Diseases: Auto-immunity and Transplantation 25

3.1. FR104 : a new solution for rheumatoid arthritis 27

3.2. FR104: to improve the success of transplantation 33

3.3. Effi-7 blocks the “fuel” of pathogenic T Cells 34

4. Enterprise value 36

4.1. Assumptions 36

4.2. OSE Immunotherapeutics valuation 37

4.3. Stock performance 41

Financial Data 42

Appendices 43


1. A rational merger between two players in immunotherapyOSE Immunotherapeutics is a biotechnology company resulting from the merger of OSE Pharma and Effimune, two French companies specializing in immune-oncology and immuno-modulation therapy.

1.1. Immunotherapy: great hope for many patients

Immunotherapy is a treatment strategy based on boosting, enhancing, or inhibiting the immune system, in order to counteract a disease mechanism. The particularity of immunotherapy is that it uses the body’s own cells and defense system to fight a disease. Immunotherapy is an optimized natural defense system because certain of its parts are activated to work harder or smarter, and destroy for example cancer cells, or on the contrary, because certain of its parts are “switched off” or “down-regulated” to prevent immune system deregulations as encountered in autoimmune diseases. Thereby, immunotherapies are more specific than other therapies currently used such as chemotherapy, radiation therapy, even surgery, which can all induce serious side effects.

One of the strategies developed in the past years consists in specifically targeting the disease and its origin, while avoiding a treatment that would affect healthy cells. Thanks to significant advances in the past decades toward understanding of the physiopathology of many diseases, therapies have been improved because they directly “fix” the molecular causes of diseases.

In the field of oncology, immunotherapy whereby the immune system is activated against cancer, has proven to be effective and has emerged as a beneficial alternative to standard chemotherapy. Immunotherapy has drawn the interest of healthcare protagonists as demonstrated by the importance taken by this therapeutic strategy in the last ASCO (American Society of Clinical Oncology) meetings, and in operation deals such as licensing, M&A or co-development partnership. Recent licensing agreements and M&A transactions confirm the intense interest among pharmaceutical groups in the field of oncology. In the past few years, numerous deals have been concluded between large pharmaceutical groups and biotech companies. Interestingly, some of these deals involve molecules or technologies at an early stage of development (discovery or preclinical steps), indicating the desire of large pharmaceutical groups to position themselves early in this promising field. These emerging immunotherapies hold great potential for the treatment of several cancers, in particular those without current effective treatment. As seen in Figure 1 showing Buyers’ interest (pharmaceutical groups) by therapeutic area, the field of oncology strongly attracts the attention of large pharmaceutical companies for promising drugs that could treat cancer effectively

Immunotherapy : activate or modulate the immune system to

fight diseases

Immunotherapy has become the most interesting field for pharmaceutical

groups


.

In the case of diseases induced by the over-activation or deregulation of the immune system, namely autoimmune diseases, the strategy must be different. Indeed, autoimmune diseases develop when the immune system, which defends the body against disease, recognizes healthy cells as foreign agents. Depending on its nature, an autoimmune disease can affect one or many different types of body tissue. It can also cause abnormal organ growth and changes in organ function. There are as many as 80 types of autoimmune diseases. Many of them have similar symptoms, which makes them very difficult to diagnose. It is also possible to have more than one condition at the same time. The most prevalent autoimmune diseases are Rheumatoid arthritis, Juvenile rheumatoid arthritis, Lupus, Psoriatic Arthritis and Inflammatory Bowel Arthritis (Crohn’s Disease and Ulcerative Colitis), or Type-1 Diabetes.

Currently, treatment for autoimmune diseases focuses on relieving symptoms because there is no curative therapy. Immunotherapies are specific treatments dedicated to directly target the signaling pathway disrupted in autoimmune diseases. In this case, the aim does not consist in educating or activating the immune system, but the opposite, the goal is to modulate immunity to specifically down-regulate signaling pathways which are abnormally activated against body cells or tissues.

With its cancer vaccine Tedopi and its immuno-modulator FR104, OSE Immunotherapeutics is in line with this therapeutic approach, and is aiming at becoming a significant player in immunotherapy.

Figure 1. Pharmaceutical companies’ interests by therapeutic area and by development stage. Concern-

ing Oncology, pharmaceutical groups prefer to acquire products or companies at very early or very late

stages (preclinical and Phase III) (source: Campbell Alliance)

Cancer and autoimmune

diseases: 2 different strategies using the same weapon, the

immune system


1.2. OSE Immunotherapeutics, a strategy build on activation and modulation of the immune system

This merger between the two companies involved in immunotherapy indicates that their respective management aims at becoming a strong player in immuno-strategies to fight diseases with strong medical need. Immunotherapy is a huge field consisting of several therapy strategies that all use the immune system to fight diseases. As previously stated, oncology has been a hot topic in recent years thanks to the successful approval of immunotherapy drugs targeting cancer.

The modulation of the immune system has always been used to treat diseases caused by the immune system itself. Indeed, auto-immune diseases are caused by an over-activation of the immune system that recognizes endogenous components as exogenous, and this perturbation leads to severe pathologies such as rheumatoid arthritis.

The expertise of OSE Pharma in specific activation of the immune system, and that of Effimune in the modulation of the immune system could provide obvious synergies to conduct solid development programs in immunotherapy.

Activation of the immune system with OSE Pharma’s drug candidates

OSE Pharma’s team is specializing in cancer immunotherapy. The therapeutic strategy consists in activating the immune system, and more specifically cytotoxic T cells. The role of these specific cells is to destroy agents considered “foreign”, such as cancer cells.

OSE Pharma has developed a unique platform, Memopi, containing 11,000 epitopes chemically modified, with potential application in several pathologies. The lead product based on the Memopi technology is Tedopi, a drug candidate currently in a Phase III trial, indicated for Non-Small Cell Lung Cancer. Tedopi consists in boosting the immune system through the injection of a pool of optimized antigens, specific to a wide panel of NSCLC (Non-Small Cell Lung Cancer), in patients expressing the HLA-A2 receptor. Thus, 90% of the targeted patients respond to at least one of the 9 epitopes/antigens contained in Tedopi. To complete and improve T cytotoxic cell activation, a tenth epitope, which is not a cancer antigen but a T helper epitope, is also present in the Tedopi cocktail. Indeed, the role of T helper cells is to attract T cytotoxic cells and enhance their activation. Cancer is defined by one cell which accumulated several mutations. This unique cell will then escape from the control of its self-regulation and from immune surveillance, and will proliferate anarchically leading to the formation of cancer. The strategy of Tedopi is based on this cancer specificity. Each cancer is characterized by the expression of very specific antigens. Taking into account this observation, OSE Pharma decided to

Tedopi: a cancer vaccine to educate

and specifically activate the immune

system

A combination of expertise, of 2 complementary

therapeutic strategies


develop a therapy by screening the antigens expressed in NSCLC, and selecting the most prevalent in order to design epitopes, and educate the immune system to fight against these specific antigens.

Modulation of the immune system with Effimune’s drug candidates

Effimune’s team is specializing in immuno-modulation for applications in transplantation, auto-immunity, and cancer immunotherapy. The biotech company has developed 3 programs in its pipeline, among which their lead drug candidate FR104, a CD28-antagonist, dedicated to auto-immune diseases and treatment for transplantation. The originality of Effimune’s therapeutic strategy, compared to conventional immunosuppression, is the modification of the balance between effector and regulatory immune cells such as T Lymphocytes. T cells are necessary for body defenses against pathogens and cancer, but are also implicated in graft rejection and the development of autoimmunity. A specialized population of T lymphocytes, called regulatory T cells (Treg) control the activation of effector T cells, which are directed against auto-antigens in autoimmune processes, and allo-antigens following transplantation. Therefore, an ideal immunosuppressive drug must spare Treg cells which control pathological T cell activation, without precluding protective immune defenses.

The biological drugs developed by Effimune aim at restoring this natural balance by targeting molecular checkpoints. Two of such products, specific monoclonal antibodies, are currently in clinical and pre-clinical development: FR104 and Effi-7.

Figure 2. Immunoregulation is a potential solution to treat several diseases. The strategy should be adapted to the disease physiology, with the aim to restore immune balance. While immunosuppression consists in a lack of both effector cells (Teff) and re-gulatory T cells (Treg), auto-immune diseases result from a lack of Teff, and cancer from a lack of Treg. OSE Immunotherapeutics develops drug candidates that selectively act on Treg or Teff subpopulation to restore the immune balance and treat diseases (source: OSE Immunotherapeutics).

FR104: an immunomodulator to balance the immune

system


1.3. A business model based on licensing agreements

OSE Immunotherapeutics’ strategy is to develop their lead products and license them to pharmaceutical partners. Indeed, the company does not have the desire to market its products alone. Its core business consists in developing molecules with therapeutic potential until they reach advanced clinical stages (Phase II, Phase III or Regulatory stage), and to conclude licensing agreements with international partners that could support:

• in the case of NSCLC, regulatory fees and marketing costs • in the case of combination therapy in NSCLC, or in other indications,

Phases III costs, regulatory fees and marketing costs • in the case of Effi-7, Phases II or Phase III costs, regulatory fees and

marketing costs • in the case of FR104, the company is already collaborating with

Janssen (J&J group), which supported R&D costs with €10M. Janssen could exercise an option to license FR104 in H2-2016 depending on the Phase I trial results.

The growing activity in the immune-oncology area, and the number of multiple deals concluded in these recent months, strengthen OSE Immunotherapeutics’ posi¬tion for a significant partnership for Tedopi. Since Tedopi is already in Phase III with proof of concept in human patients, it represents a strong candidate for a potential deal with a large pharmaceutical com¬pany. OSE Immunotherapeutics strategy is to license Tedopi in NSCLC after the company obtains Phase III results. Moreover, the company clearly announced its desire to evaluate Tedopi in combination therapy with a checkpoint inhibi¬tor (PD-1 or anti-PDL1) such as Opdivo or Keytruda. These two anti-PD-1 antibodies have already been approved for NSCLC. In addition, Effi-DEM, a new generation of checkpoint inhibitor developed by Effimune, could be evaluated in combination with Tedopi in further studies. OSE Immunotherapeutics also plans to develop Tedopi as a monother¬apy in indications other than NSCLC. The company preferentially targets colon cancer, ovarian cancer, and triple negative breast cancer, and mesothelioma, indications with a strong medical need, in HLA-A2 patients. OSE Immunotherapeutics intends to find a partnership to develop these indica-tions in Phase II clinical trials.

Concerning the second product, FR104, the strategy of the company is quite different. As previously shown in Figure 1, pharmaceutical companies seem to be more interested in early-stage immunology assets. This is confirmed by Effimune’s agreement with Janssen concluded in 2013 to conduct preclinical and Phase I development of FR104. Janssen is particularly interested in the rheumatoid arthritis and transplantation (graft-versus-host disease treatment) indications. The agreement terms include on option that could be exercised in H2-2016.

Tedopi: currently in an international

Phase III trial in NSCLC

FR104: a Phase II-ready drug

candidate in RA with a licensing option


Table 1. Selected Recent Licensing/Merger deals in the field of immuno-oncology and Au-to-immunity (source: Medius Associate, DealWatch).

Licensor Licensee Deal Information PhaseUpfront

($M)

Total milestones

($M)

2015 Aurigene Curis2 programmes including IRAK4 Inhibitors and small molecule antagonist of programmed death [PD‐L1]

Preclinical 24 346

2015Flexus Biosciences BMSF001287, IDO1 inhibitor + IDO/TDO discovery programme ‐ immuno‐oncology

Preclinical 1250

2015Rigel Pharmaceuticals BMSSmall molecule TGF beta receptor kinase inhibitors ‐ immuno‐oncology

Preclinical 30 339

2015 Bavarian Nordic BMSImmuno‐oncology treatment for prostate cancer

Phase III 60 975

2015 Aduro Biotech NovartisPreclinical cancer immunotherapies targeting the STING (Stimulator of Interferon Genes) pathway

Preclinical 200 750

2015 Innate Pharma AstraZenecaIPH2201 an anti NKG2A antibody, a first in class humanised IgG4 antibody.

Phase II 250 1275

2015 Curadev Pharma RocheIDO1 and TDO inhibitors (enzymes to mediate cancer‐induced immune suppression)

Discovery 25 555

2015 AstraZeneca CelgeneMEDI4736 ‐ an investigational checkpoint inhibitor in serious blood cancers

Clinical Phases 450

2015 Receptos Celgene

Builds inflammation/immunology portfolio with ozanimod (oral, once‐daily, selective sphingosine 1‐phosphate 1 and 5 receptor modulator(S1P))

7200

2015 Regeneron SanofiImmuno‐oncology collaboration including PD‐1 inhibitor

Phase I 2170 640

2015 Five Prime BMS Colony stimulating factor 1 receptor antibody Phase I 1740 350

2015 BioNTech Sanofi Discovery and development of up to 5 cancerimmunotherapies, each a synthetic mRNA mixture

Discovery 1560 60

2015Juno

TherapeuticsCelgene

10 yr immunotherapy collaboration initially on CAR T and Tcell Receptor technologies; inc CD19 and CD22 directed CAR T candidates

Discovery 1000 1000

2015 Pieris Pharma Roche To discover and optimise Anticalin®‐based drug candidates againstan undisclosed immuno‐oncology target

Discovery 6.4 416

2015 InovioAstraZeneca

MedImmune

Licence for INO‐3112, DNA‐based immunotherapy targeting cancers (e.g. cervical and head and neck cancers) caused byHPV types 16 and 18; including up to 2 additional DNA‐based cancer vaccines

Phase I/II 27.5 727.5

2016 Baxalta ShireAcquisition company Product portfolio covering rare diseases in haematology, immunology, oncology

32000

2016Blueprint Medicines RocheSmall molecules targeting kinases for cancerimmunotherapy

Discovery 965

2016Enumeral

Pieris Discovery stage 388D4 programme of PD1 Monoclonal Antibodies immunotherapies

Discovery 106

2015Ionis (ex Isis)

PharmaJanssen

Antisense drugs to treat autoimmune disorders of GI tract ‐ local and oral therapies (3 programmes)

Discovery 35 835

2015 Ablynx Merck & Co4 yr expansion of immuno‐oncology collaboration for up to 12

14.3 388.3

2015Hanmi

PharmaceuticalLilly

Licence for oral Bruton's tyrosine kinase (BTK) inhibitor,HM71224, for autoimmune and other diseases

Phase II ready 50 690

2015 Celgene AstraZeneca

Exclusive collaboration MEDI4736 immune checkpointinhibitor against programmed cell death ligand 1 (PD‐L1)

450

2016

Padlock Therapeutics

BMS

Protein/peptidyl arginine deiminase (PAD)inhibitors in rheumatoid arthritis and otherautoimmune diseasesAcquisition ‐ company

600

2016Boehringer Ingelheim AbbVie

BI‐655066: anti‐IL‐23 MAb for psoriasis and other autoimmune disorders; and BI‐655064: anti‐CD‐40 Mab Collaboration –development

Phase IIIPhase I

595

Immuno-oncology

Auto-immunity


1.4. A product pipeline combining immuno-acti-vation and immuno-modulation assets

The global strategy of OSE Immunotherapeutics is to maintain a pipeline of products at different stages of development, which mitigates development risks in case of inconclusive trial results, and mitigates associated costs. Thanks to their locality in a scientific hub, OSE Immunotherapeutics can benefit from the academic environment to fuel its pipeline with early stage drug candidates, while having an experienced management team for late stage development of drug candidates. OSE Immunotherapeutics intends to become a significant player in the field of immuno-oncology with innovative treatments responding to high unmet medical needs.

The body is naturally equipped with a defense system against foreign substances penetrating the body. This complex defense system, “the immune system”, is composed of several types of cells, each of them having a very specific role.

Depending on the disease and its molecular origins, an immunotherapy approach should use different strategies:

• Activate the immune system: the objective is to educate the natural immune system to recognize exogenous agents or pathogenic agents (such as cancer). In these cases, the body needs to have an immune system able to distinguish healthy cells from pathogenic cells, to detect and identify disorders responsible for the disease, and to specifically fight against them.

• Modulate the immune system: the objective is to decrease and modulate the therapeutic threshold of the immune system. These strategies are needed in the cases of over-activation of the immune system leading to severe diseases. In auto-immune diseases, the immune system recognizes endogenous and healthy cells as foreign agents and fight against them, leading to tissue inflammation or degradation. In the case of transplantation, the immune system is deactivated on purpose to prevent it from rejecting the graft.

Thus, immunotherapy consists of several strategies that need to be adapted to the molecular causes of the disease treated. OSE Immunotherapeutics’ product pipeline is a combination of drug candidates that can activate and modulate the body’s natural weapons to specifically fight diseases.

• Tedopi is being developed for NSCLC: it is a combination of 9 neo-epitopes commonly found in NSCLC, and is administered via subcutaneous injection. After immunization, the patient’s immune system will be activated to specifically target cancer cells expressing at least one of the 9 epitopes. The administration route developed by OSE Immunotherapeutics, also makes Tedopi an interesting drug candidate in terms of patient compliance. The Phase III trial started in Q1-2016.


• OSE Immunotherapeutics is considering the development of Tedopi for NSCLC in combination with an ICI: the company will combine a marketed anti-PD1 or anti-PDL1 such as Keytruda or Opdivo with Tedopi. The choice of an anti-PD1 or anti-PDL1 over an anti-CTLA4 is explained by its better tolerance profile. As demonstrated in recent studies, the strategy consisting in combining 2 molecules acting by different pathways that could result in a better efficacy and fewer side effects. A Phase II trial is to be launched in 2017.

• FR104 is being developed for transplantation and auto-immune diseases: it is a CD28-antagonist, a key receptor in effector T lymphocytes. These effector T lymphocytes are harmful in the case of autoimmune diseases and transplantation. At the end of 2013, a global license agreement was signed with Janssen for FR104. Janssen could exercise an option to license in the second half of 2016 to continue the development of FR104 in Phase 2 clinical trials.

• Effi-7 is being developed for transplantation and auto-immune diseases: it is a monoclonal immune-modulatory antibody targeting the CD127 receptor, (Interleukin 7 receptor), with in vivo proof of concept for several autoimmune models. It is at the advanced preclinical stage.

• Effi-DEM is being developed in immuno-oncology: it is a second generation checkpoint inhibitor. It targets particular suppressor cells present in the tumor microenvironment. It is at the preclinical stage.

2. Product candidates in the Immuno-oncology field In the past few years, we have witnessed the evolution of therapeutic strategies, with a growing awareness for the potential of personalized

Research Preclinic Phase I Phase II Phase III Registration

Effi-dem

Tedopi NSCLC

Auto‐immune diseases, Transplantation

Immuno‐oncology

R&D process

NSCLCCombo

Tedopi/ICI

FR104

Effi-7 Auto‐immune diseases, Transplantation

License option Janssen Pharmaceuticals H2‐2016

Figure 3. OSE Immunotherapeutics’ pipeline (source: OSE Immunotherapeutics).

A well-balanced pipeline


therapies. Immunotherapy has emerged as one of the therapeutic solutions for cancer treatment (immuno-oncology). Its main goal is to activate the natural immune system against cancer antigens. The benefits of this therapeutic approach include a high specificity, and consequently, a decrease in side effects compared to non-specific therapies. Several therapeutic approaches have been developed to utilize the immune system as a natural weapon to fight cancer:

• Monoclonal antibodies: these large molecules are designed in vitro to directly and specifically bind to natural proteins playing a major role in activation or inhibition of the immune system. This leads to a specific targeting of cancer cells.

• Cancer vaccines: these vaccines are composed of natural or designed proteins injected into the body to very specifically activate cells of the immune system. Usually, these proteins injected correspond to antigens only present on cancer cell surfaces.

• Non-specific immunotherapies: this strategy consists in boosting the whole immune system without any specific activation of immune parts or against a specific target.

• A fourth strategy consists in developing a chimeric antigen receptor T-cell (CAR-T), targeting tumor-specific antigens. Patients’ own T cells are genetically modified to express a chimeric antigen receptor, and then reintroduced in the patient to play a role against cancer cells. This method enables patients to get their own defense cells specifically armed against the cancer they contracted.

Immune surveillance fails when tumors escape immune detection and elimination, and cancer becomes clinically apparent. The detail mechanism is complex, but at a conceptual level, immune surveillance failure could be the result of a combination of the ability of a tumor to escape detection, and failure of the immune system to build an effective response.

As evidence supporting the immune surveillance hypothesis accumulated, pharmaceutical companies started to develop cancer drugs intended to stimulate the immune system by giving it a boost. A promising strategy was to “educate” the immune system to recognize cancer cells that it failed to do by itself. This is precisely Tedopi’s strategy (a cancer vaccine) which uses an innovative mechanism of action, targeting 5 of the most common antigens found in solid tumors. Several strategies based on immunity are cur¬rently being developed, and already exist to fight cancer. The re¬cent approvals of checkpoint inhibitors – a promising immuno-oncology strategy – to treat metastatic melanoma or NSCLC have boosted the interest of large pharmaceutical groups in this therapeutic field. This is further demonstrated by the numerous licensing deals recently signed in combination therapy of a drug candidate with a checkpoint inhibitor (PD-1, PD-L1, or CTLA-4 checkpoints). Combination therapy has always

Immuno-oncology, a highly specific treatment option


been used against cancer to improve the efficacy of those treatments, and reduce cancer relapse. As shown in Figure 4, Campbell Alliance published the 2015 licensing trends by therapeutic area, showing that the top “Hot” area was that of Cancer Vaccines. Moreover, we can see that in 2015, 3 areas newly emerged as “hot” licensing area compared to 2014, include Cancer Vaccines, Ultra Rare diseases and Immuno-oncology. OSE Immunotherapeutics’ drug candidate Tedopi strongly matches these trends since:

• Tedopi is a cancer vaccine

• The main strategy of company remains immune-oncology

• Their preferential cancer targets are rare cancers with high unmet medical need

Thus, this reinforces the idea that OSE Immunotherapeutics is intent on becoming a key player in immunotherapy dedicated to treat cancer with strong medical need.

2.1. Tedopi in Non-Small Cell Lung CancerThere are 1.82 million new cases of lung cancer worldwide annually, and the incidence is expected to grow in the coming years, mainly due to societal and environmental factors such as pollution, tobacco consumption, or inhalation of carcinogenic products (asbestos). Genetic anomalies may also be the cause of lung cancer development.

Long-term exposure to tobacco smoke is the main cause of lung cancer (80 to 90% of cases), although it is estimated that 10 to 15% of lung cancer patients never smoked (Thun et. al., 2008). Lung cancer also affects more

Figure 4. Licensing trends in 2015. Cancer Vaccines have recently emerged as a “Hot” topic, and are

ranked number 1 as the most attractive area for pharmaceutical groups’ in-licensing strategies (source:

Campbell Alliance).

Cancer vaccines: the “hottest” areas for licensing in 2015


men than women (Globocan, 2012). The main symptoms of lung cancer include coughing (with or without blood), shortness of breath, weight loss, fatigue, or pain in adjacent structures (chest pain, bone pain, etc.). However, because some of the symptoms are not specific to lung cancer, a majority of lung cancer patients are diagnosed at a late stage of the disease (stage IIIb or IV), where cancer cells have already spread to lymph nodes, or metastasized (SEER, 2007). It is estimated that between 85% and 90% of lung cancers are Non-Small Cell Lung Cancers (American Cancer Society).

2.1.1. Several therapeutic options for NSCLC but with limited efficacyThere are several treatment options for NSCLC which are selected according to the stage of the disease. If lung cancer is diagnosed early and localized, surgery may be a curative therapeutic option. For more advanced stages of the disease, targeted therapies or chemotherapies (mainly platinum-based chemotherapy) are the treatment of choice, although NSCLC is relatively insensitive to chemotherapy and radiotherapy compared to Small Cell Lung Cancer (National Cancer Institute). Patients with resectable cancer may be cured by surgery, which can be followed by adjuvant chemotherapy if necessary. In the case of an unresectable cancer, patients may be treated by radiation therapy for local control. For patients with unresectable advanced cancer, different therapeutic options are available:

• local cancer: long-term treatment by chemotherapy combined with radiation therapy

• metastatic cancer: long-term treatment by chemotherapy, targeted therapies, and other supportive measures with the aim to reduce symptoms and pain

Cancer cells are not considered foreign bodies, but express on their surface molecules that are not normally present on normal cells. This is the basis of OSE Immunotherapeutics’ therapeutic strategy: educate the natural immune system to recognize molecules that only exist on the surface of cancer cells.

Several therapies have been developed based on immune system regulation. Most of them are monoclonal antibodies or molecules inhibiting the immune system retro-regulation. Once stimulated, blocking negative feedback pathways enables the immune system to remain switched on, so the defense mechanism against cancer is still active. During last years, immune checkpoints proteins have become increasingly important targets for pharmacologic inhibition.

1.8 million new cases of lung cancer per year; 85 to 90% of

NSCLC

Lung Cancer, research-intensive area with a strong

pipeline focusing on immunotherapy


2.1.2. Tedopi’s mechanism of actionTedopi’s therapeutic strategy does not consist in keeping the system switched on, but in activating T cells against specific antigens. The main advantage of this strategy is that the activation is very specific to the antigen targeted, thus avoiding unspecific activation of the immune

Figure 5. Timeline depicting the historical milestones in the development of therapies for NSCLC (source: Nature Review,

Clinical Oncology).

Figure 6. Investigational agents in NSCLC: the NSCLC pipeline includes over 76 new therapeutic options with various mecha-

nisms of action, reflecting the heterogeneity of this cancer (source: IMS Health, Disease Insights, R&D Focus, May 2016; ClinicalTri-

als.gov, Company websites, May 2016; ASCO May 2016).


system, and leading to damage such as overreactions or auto-immune reactions.

While most cancer immunotherapies are based on developing antibodies blocking checkpoint proteins that negatively regulate the immune system, OSE Immunotherapeutics developed a new strategy directed to the specific activation of T cells.

The injection of Tedopi results in the absorption of the epitopes by a specific type of cell, the APC (Antigen Presenting Cells), which recognize and swallow foreign agents, and then present them to their surface. Circulating T Helper cells recognize antigens associated with the HLA-A2 receptor, and then secrete cytokines to attract T cytotoxic cells. The liaison between the TCR receptor (receptor on T cells), and the antigen bound to HLA-A2, activates T cytotoxic cells. As a result, a single T cell becomes specifically activated against one kind of antigen. All cancer cells exhibiting this antigen will be targeted, and killed by the activated T cell.

This personalized medicine approach provides considerable advantages:

• An improved response in the target population due to Tedopi’s affinity to the HLA-A2 receptor, thanks to the T helper epitope included in the epitope cocktail

• A very specific response due to the molecular strategy consisting in educating the immune system to recognize cancer cells. Tedopi does not act on the whole immune system by activating or inhibiting a signaling pathway, making Tedopi a targeted therapy

• A non-invasive therapy recognizing cancer cells, without destroying healthy cells. This is a huge advantage compared to standard treatments currently used to treat NSCLC. Indeed, radiotherapy and chemotherapy are very disabling because of their adverse side effects, especially due to their non-specific mechanism of action that also affects healthy cells. Surgery, which remains the best standard of care when the tumor ables it, is still very invasive, especially in “deep-set” cancers.

• Finally, another advantage is the universal feature of Tedopi that is composed of 9 epitope derivatives from the 5 most common antigens found in solid tumors. That means that all cancers expressing at least one of the 5 antigens present in Tedopi could be treated by Tedopi, as long as patients are HLA-A2+.

Tedopi: 9 epitope derivatives from the

5 most common antigens found in

solid tumors


Figure 7. Mechanism of action of Tedopi (Source: OSE Immunotherapeu-tics/Aurgalys)

2.1.3. Clinical development of Tedopii

Proof of concept in NSCLC has already been established for Tedopi in a Phase II clinical trial. 135 patients were included and recruited in 10 US centers. The results show that patients treated by Tedopi had a higher survival rate and median overall survival than patients receiving best standard of care.

The nine T cell clones recognize antigens on the cancer cells surfaceThe activated T cells specifically recognize and bind to the targeted antigen before destroying cancer cells.

Tumor cells escape from immune surveillanceT cells, whose role is to provide immuno‐surveillance, do not recognize tumor cells as it needs to be activated by a cell presenting the antigen against which it must act.

Tumor cells proliferate anarchicallyBecause of this exhaust, cancer cells escape from the control of the immune system and proliferate uncontrollably, conducting to a cancerous tumor.

Injection of Tedopi, optimized epitopes specifically directed against NSCLC antigensTedopi is a cocktail of optimized epitopes expressed in 90% of NSCLC antigens. A sub‐cutaneousinjection of the cocktail with an adjuvant, allows Antigen Presenting Cells (APC) to be in the presence of the epitopes, APC cells will subsequently activate T cells against cancer cells.

Antigen Presenting Cells activate T cells in a specific mannerAPC are attracted by the injection and recognize the optimized epitopes as foreign agents. They digest and present them to their surface, so they are recognized by T cells, which will be specifically activated against a unique antigen type.

T cells are activated and recognize in a specific manner cancer antigensT cells are informed by the presence of foreign agents: T Helper cells inform by secreting cytokines. AT Helper specific epitope helps reinforce the immune response. T cells bind to APC and are activated to target a unique antigen.

The presence of 9 epitopes allows the activation of 9 specific T cell clonesDue to the combination of 9 epitopes injected, T cells are activated to specifically target 9 cancer antigens representing more than 90% antigens occurring in NSCLC. APC activate 9 types of T cells which proliferate and destroy cancer cells presenting at least one of the 9 antigens.

T cells destroy very specifically cancer cellsOnce bound to cancer cells, T cells start their cytotoxic activity by injecting specific molecules in the tumor cells, leading to their destruction.

2

1

3

4

5

6

7

8

Cancer cell Naive T cell TEDOPI injection TEDOPI epitopes Antigen Presenting Cell Activated T cell

Survival rate P Value Median overall survival P ValueStandard therapy 49%

0.06312 months

0.086Tedopi 59% 17.3 months

Table 2. Tedopi Phase II results


Figure 8. Tedopis’ results on survival rate and median overall survival compared to conventional treatment (source: OSE Immunotherapeutics).

In addition, the results demonstrated that more than 90% of patients responded to the Tedopi specific T cell mechanism of action. This indicates that more than nine in ten patients responded to at least one of the 9 neo-epitopes. Increased survival and T immune response were strongly correlated, with a P value under 0.001.Interestingly, patients in the Tedopi-treated arm were all HLA-A2+, whereas patients in the control group were all HLA-A2-. At the time of the trial, little was known about the correlation between HLA-A2 genotype and cancer prognosis, and patients with either genotype were thought to be identical in terms of disease progression. E. Andersson et al., showed that HLA-A2 positivity was correlated with a poor prognosis. Therefore this indicates that although Tedopi-treated patients (HLA-A2+) had a worse prognosis than patients in the control group (HLA-A2-), Tedopi (HLA-A2+ group) still showed a higher median survival rate. Interestingly, it was also observed that the 4-year overall survival of patients treated with Tedopi was 25% (Figure 8). The reported 5-year survival of lung cancer is less than 16% (SEER, 2007).

Figure 9. 4-year survival of Tedopi-treated patients (source: OSE Immunoth.).

Survival rate P Value Median overall survival P Value Standard therapy 49% 0.063 12 months 0.086 Tedopi 59% 17.3 months

Table 3: Tedopi Phase II results

Very promising Phase II results in HLA-A2

NSCLC patients: 90% of responders


Based on these results, OSE Pharma decided to pursue the clinical development of Tedopi and to proceed with a confirmatory Phase III clinical trial. Tedopi Phase III trial (Atalante-1) was recently started (January 2016) and will include 500 NSCLC patients expressing the HLA-A2 receptor, in an open-labelled, randomized and international study, in several centers in Europe and United-States. The study is conducted in stage IIIb or stage IV patients, in second line treatment, and is compared to standard treatment (docetaxel and permetrexed). Results are expected in 2018 and the company has the financial visibility until the end of the Phase III trial.

2.1.4. Tedopi market estimations

Tedopi is composed of 9 “neo-epitopes”, chemically synthetized and modified to improve their binding to TCR and HLA-A2 receptors. These epitopes were selected for their strong affinity to TCR and HLA-A2, based on 5 cancer antigens present in more than 90% of NSCLC.

OSE Immunotherapeutics chose to focus its strategy on a niche application by targeting NSCLC HLA-A2-positive patients, and more specifically, those who already received at least one therapy.

We estimate that Tedopi could target a quarter of lung cancer patients. If we consider that 85% of lung cancer are NSCLC and that approximately 45% of the general population is HLA-A2+, there could be as many as 0.7 million cancer patients eligible to OSE Immunotherapeutics’s therapy. Tedopi is currently indicated for advanced lung cancer (typically stage IIIb and stage IV) patients, accounting for 62% of newly diagnosed patients (SEER, 2007). Overall, a quarter of lung cancer patients could be receiving Tedopi.

To estimate the market potential of Tedopi in NSCLC, we considered the following regions: North America (US and Canada), the European Union, the BRIC region, Japan and South Korea. According to Globocan, the incidence of lung cancer in 2012 was approximately 310,000 cases in the EU, 240,000 in North America, 930,000 in the BRIC region + Japan and South Korea (1.5 million patients in total in these regions). If taken into account the hypotheses listed above, 375,000 patients could be receiving Tedopi in 2016.


Table 3. Lung cancer incidence in Tedopi target market (source: Aurgalys estimations, Globocan, SEER).

We estimated market penetration for each region, and benchmarked the therapy price according to other therapies available to treat NSCLC, or to other immunotherapies. For market penetration, and because of the non-invasive administration route (subcutaneous injection) of Tedopi, we hypothesized that OSE Immunotherapeutics’ product could claim as much as 15% of the market. On the other hand, we considered that BRIC countries would be more difficult to access, and estimated a 10% penetration rate. Delays in the regulatory processes and the strong pressure of authorities could also reduce market access in these regions.

We applied different prices according to the regions of the world. In France, as seen in Table 3, the average cost for NSCLC therapies is €45,000 per year. Based on this average price, we applied a similar cost across Europe and Japan or South Korea. For the US, therapies are usually set at a higher price. However due to the high disparity of prices, we considered that Tedopi could cost as much as €60,000 per year. Obtaining a higher price in the US could significantly increase Tedopi’s revenues in this region. For the BRIC region and especially India, we considered a lower price, €20,000, half lower than that of Europe.

2012 2012 2012 2012 2016Incidence Globocan

% of NSCLC %HLA‐A2 +% Stage IIIb/IV

% Stage IIIb/IV

85% 45% 62%European Union (EU-28) 312 645 265 748 119 587 74 144 77 154United States of America 214 226 182 092 81 941 50 804 53 160Canada 25 481 21 659 9 746 6 043 6 323Total US/Canada 239 707 203 751 91 688 56 847 59 483Total EU/US/Canada 552 352 469 499 211 275 130 990 136 638Brazil 34 280 29 138 13 112 8 130 8 751Russian Federation 55 805 47 434 21 345 13 234 14 247India 70 275 59 734 26 880 16 666 17 941China 652 842 554 916 249 712 154 821 166 666Total BRIC 813 202 691 222 311 050 192 851 207 604Japan 94 855 80 627 36 282 22 495 23 461Korea, Republic of 22 873 19 442 8 749 5 424 5 997Total BRIC/RO Asia 930 930 791 291 356 081 220 770 237 062Total 373 699

Based on these hypotheses, Tedopi’s sales could reach as much as €1.7B in the targeted regions. Sales forecast are presented in Table xx, taking into consideration it would take 5 years to reach peak sales, and that Tedopi would be marketed in 2020 in the US and Europe, and in 2022 for Asia and the BRIC region.

Therapy CompanyTherapy average Price

Mechanism of action IndicationEurope (€) US ($)

Yervoy (Ipilimumab)

Bristol‐Myers Squibb

56,000 120,000targeting the CTLA‐4 checkpoint on activated immune cells

Lung ‐ NSCLC

Tarceva(Erlotinib)

Roche 25,560 tyrosine kinase inhibitors Lung ‐ NSCLC

Alimta(pemetrexed)

Eli Lilly 40,800 70,000 chemotherapy, folic acid analog Lung ‐ NSCLC

Avastin (Bevacizumab)

Roche 54,400targeting vascular endothelial growth factor (VEGF)

Lung ‐ NSCLC

Opdivo(nivolumab)


N/A 150,000targeting the PD‐1 checkpoint molecule

Lung ‐ NSCLC

Keytruda (Pembrolizumab)

Merck N/A 150,000targeting the PD‐1 checkpoint molecule

Lung ‐ NSCLC

Xalkori(crizotinib)

Pfizer 63,600 135,000 tyrosine kinase inhibitors Lung ‐ NSCLC

Table 4. Immuno-oncology prices in Europe and United States (Source: French Health Ministry/ finan-

cial press)

Tedopi’s Phase III, results expected by

the end of 2018

Tedopi in NSCLC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025EuropePatients treated 77 154 77 926 78 705 79 492 80 287 81 090 81 901 82 720 83 547 84 383Market penetration 0% 0% 0% 0% 0% 0% 1% 2% 5% 10%Sales Europe (€M) 0,00 0,00 0,00 0,00 0,00 6,32 22,11 72,22 195,26 372,37US/CanadaPatients treated 59 483 60 161 60 847 61 541 62 243 62 952 63 670 64 396 65 130 65 872Market penetration 0% 0% 0% 0% 0% 1% 2% 5% 10% 13%Sales US/Canada (€M) 0,0 0,0 0,0 0,0 0,0 22,7 74,1 200,7 383,2 516,2BRIC, Japan and KoreaPatients treated 237 062 241 373 245 763 250 233 254 785 259 419 264 137 268 941 273 832 278 813Market penetration 0% 0% 0% 0% 0% 0% 0% 0% 0% 1%Sales BRIC, Jp & Kor (€M) 0,0 0,0 0,0 0,0 0,0 0,0 0,0 7,2 25,3 83,2Total Sales 0,0 0,0 0,0 0,0 0,0 29,0 96,2 280,0 603,7 971,7

Tedopi in NSCLC 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035EuropePatients treated 77 926 78 705 79 492 80 287 81 090 81 901 82 720 83 547 84 383 0Market penetration 14% 15% 15% 15% 15% 1% 0% 0% 0% 0%Sales Europe (€M) 505,0 525,1 534,8 541,4 547,2 55,3 5,6 0,6 0,1 0,0US/CanadaPatients treated 60 161 60 847 61 541 62 243 62 952 63 670 64 396 65 130 65 872 0Market penetration 15% 15% 15% 15% 15% 1% 0% 0% 0% 0%Sales US/Canada (€M) 535,2 545,8 553,4 560,0 566,5 57,3 5,8 0,6 0,1 0,0BRIC, Japan and KoreaPatients treated 241 373 245 763 250 233 254 785 259 419 264 137 268 941 273 832 278 813 0Market penetration 7% 10% 11% 11% 11% 1% 0% 0% 0% 0%Sales BRIC, Jp & Kor (€M) 364,0 493,6 554,1 580,9 596,4 60,7 6,2 0,6 0,1 0,0Total Sales 1 404,2 1 564,5 1 642,3 1 682,4 1 710,2 173,3 17,6 1,8 0,2 0,0

Table 5. Tedopi sales forecasts in NSCLC (Source: Globocan, Aurgalys estimations)

Estimated patient population of 375,000 in the main markets


Based on these hypotheses, Tedopi’s sales could reach as much as €1.7B in the targeted regions. Sales forecast are presented in Table xx, taking into consideration it would take 5 years to reach peak sales, and that Tedopi would be marketed in 2020 in the US and Europe, and in 2022 for Asia and the BRIC region.

Therapy CompanyTherapy average Price

Mechanism of action IndicationEurope (€) US ($)

Yervoy (Ipilimumab)


56,000 120,000targeting the CTLA‐4 checkpoint on activated immune cells

Lung ‐ NSCLC

Tarceva(Erlotinib)

Roche 25,560 tyrosine kinase inhibitors Lung ‐ NSCLC

Alimta(pemetrexed)

Eli Lilly 40,800 70,000 chemotherapy, folic acid analog Lung ‐ NSCLC

Avastin (Bevacizumab)

Roche 54,400targeting vascular endothelial growth factor (VEGF)

Lung ‐ NSCLC

Opdivo(nivolumab)


N/A 150,000targeting the PD‐1 checkpoint molecule

Lung ‐ NSCLC

Keytruda (Pembrolizumab)

Merck N/A 150,000targeting the PD‐1 checkpoint molecule

Lung ‐ NSCLC

Xalkori(crizotinib)

Pfizer 63,600 135,000 tyrosine kinase inhibitors Lung ‐ NSCLC

Table 4. Immuno-oncology prices in Europe and United States (Source: French Health Ministry/ finan-

cial press)

Tedopi’s Phase III, results expected by

the end of 2018

Tedopi in NSCLC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025EuropePatients treated 77 154 77 926 78 705 79 492 80 287 81 090 81 901 82 720 83 547 84 383Market penetration 0% 0% 0% 0% 0% 0% 1% 2% 5% 10%Sales Europe (€M) 0,00 0,00 0,00 0,00 0,00 6,32 22,11 72,22 195,26 372,37US/CanadaPatients treated 59 483 60 161 60 847 61 541 62 243 62 952 63 670 64 396 65 130 65 872Market penetration 0% 0% 0% 0% 0% 1% 2% 5% 10% 13%Sales US/Canada (€M) 0,0 0,0 0,0 0,0 0,0 22,7 74,1 200,7 383,2 516,2BRIC, Japan and KoreaPatients treated 237 062 241 373 245 763 250 233 254 785 259 419 264 137 268 941 273 832 278 813Market penetration 0% 0% 0% 0% 0% 0% 0% 0% 0% 1%Sales BRIC, Jp & Kor (€M) 0,0 0,0 0,0 0,0 0,0 0,0 0,0 7,2 25,3 83,2Total Sales 0,0 0,0 0,0 0,0 0,0 29,0 96,2 280,0 603,7 971,7

Tedopi in NSCLC 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035EuropePatients treated 77 926 78 705 79 492 80 287 81 090 81 901 82 720 83 547 84 383 0Market penetration 14% 15% 15% 15% 15% 1% 0% 0% 0% 0%Sales Europe (€M) 505,0 525,1 534,8 541,4 547,2 55,3 5,6 0,6 0,1 0,0US/CanadaPatients treated 60 161 60 847 61 541 62 243 62 952 63 670 64 396 65 130 65 872 0Market penetration 15% 15% 15% 15% 15% 1% 0% 0% 0% 0%Sales US/Canada (€M) 535,2 545,8 553,4 560,0 566,5 57,3 5,8 0,6 0,1 0,0BRIC, Japan and KoreaPatients treated 241 373 245 763 250 233 254 785 259 419 264 137 268 941 273 832 278 813 0Market penetration 7% 10% 11% 11% 11% 1% 0% 0% 0% 0%Sales BRIC, Jp & Kor (€M) 364,0 493,6 554,1 580,9 596,4 60,7 6,2 0,6 0,1 0,0Total Sales 1 404,2 1 564,5 1 642,3 1 682,4 1 710,2 173,3 17,6 1,8 0,2 0,0

Table 5. Tedopi sales forecasts in NSCLC (Source: Globocan, Aurgalys estimations)


2.1.5. A first licensing deal secured with Rafa Laboratories

On May 11th, 2015, OSE Pharma signed its first licensing deal with Israeli RAFA laboratories. OSE Pharma received a €100,000 upfront payment and will be eligible to milestone payments. If Tedopi succeeds in its Phase III trial, OSE Pharma would equally share profits with RAFA Laborato-ries, which will be in charge of registering and marketing the drug in Is-rael. Although Israel represents a small market, this first agreement rep-resents a significant step for OSE Pharma and is recognition by Israeli Key Opinion Leaders of Tedopi’s strong therapeutic potential.

2.2. Tedopi in combination therapy and other cancer indications

In addition to the current Phase III trial (Atalante 1 trial) started in January 2016 to treat NSCLC patients and depending on strategic priorities and partnerships that could occur, OSE Immunotherapeutics may also launch other Phase II studies with Tedopi. However, OSE Immunotherapeutics does not intend to conduct clinical trials alone. The company’s strategy is to find a partner for the development of other indications in order to reduce costs.

Tedopi’s mechanism of action also makes it a good candidate for others cancer indications or combination therapy in NSCLC. Should Tedopi demonstrate efficacy in NSCLC, its combination with other immunotherapies could also show synergistic effects in NSCLC treatment, especially in combination with ICI (immune checkpoint inhibitors). Nivolumab (Bristol-Myers Squibb), a monoclonal antibody directed against checkpoint protein PD-1 has recently been approved in the US and Europe for Squamous NSCLC (a subtype of NSCLC). Moreover, other ICI have been approved or are currently in development for the treatment of cancers. Several studies have been launched to evaluate the efficacy of these ICI treatments in combination with other drug-candidates. This suggests the possibility of a synergy between Tedopi and an ICI thanks to the complementary approach and the action through two distinct pathways to fight a unique disease: a specific activation of the immune system with Tedopi, and a global boost of the immune system with an ICI. The combination strategy gives different advantages in comparison with monotherapies:

• a synergy of the two (or more) treatments: complementary effects

• an increase of therapeutic effects: improvement thanks to the different pathways targeted

• a decrease in dosage: lower doses needed to reach the therapeutic threshold

• a decrease in side effects: lower doses lead to lower side effects

OSE Immunotherapeutics clearly announced its project to evaluate Tedopi in a combination therapy with an ICI targeting PD-1 or its ligand,

First licensing deal with Rafa Laboratories

A promising synergy between Cancer

Vaccines and Immune Checkpoint

Inhibitors:


PDL1. These two ICIs have demonstrated their strong potential to treat severe cancers such as melanoma or NSCLC. The purpose is to activate a cluster of specific cells armed to recognize and destroy cancer cells (Tedopi’s action), and to maintain this activation through the inhibition of the natural negative retro-control of the immune system (ICI’s action). In physiological conditions, body systems are regulated negatively, to prevent over-activation, which could lead to severe disorders. It is especially the case with the immune system that needs to be turned off, to prevent it from an over-activation that could result in auto-immune disorders.

Therefore, the combination of Tedopi that specifically activates the immune system, with an ICI that modulates the immune system, could give promising results in light of recent studies using ICI in monotherapy or in combination.

Figure 10. The combination of cancer vaccines and immune checkpoint inhibitors (ICI) could fight cancer through two complementary mechanism of action: 1- activation of specific T cells that only recognize tumor cells, 2- activation of the immune system to keep the activated immune cells and enhance immune response. PD-L1 (PD1 ligand) is known to be highly expressed in several cancers, and to inhibit T cells through its immunosup-pressive activity. The strategy which consists in blocking PD-L1 and PD-1 (an immune sys-tem booster) interaction has become a turning point for the fight agains cancer (source: OSE Immunotherapeutics).

Multibillion market potential for Tedopi,

in other cancer indications


Immune checkpoints proteins have become increasingly important targets for pharmacological inhibition. The most studied and targeted protein remains CTLA-4, an immune checkpoint, downregulating the immune system after it is activated. Ipilimumab, a monoclonal antibody targeting the CTLA-4 protein, is one of the first checkpoint-inhibitors approved in cancer treatment, and marketed by Bristol-Myers Squibb under the trade name Yervoy. Although CTLA-4 is one of the first ICI to have been discovered and has proven efficacy in treating cancer, it also causes severe side effects compared to PD-1 and PDL1 and lower efficacy. Taking together, these elements strengthen OSE Immunotherapeutics’ strategy to select an ICI that has already demonstrated its efficacy in treating NSCLC and that has the best profile for a combined use.

This combination therapy could significantly increase the market potential of Tedopi in this indication, making the drug a good candidate for licensing. Moreover, Tedopi can also be given to other cancers, in patients expressing the HLA-A2 receptor. OSE Immunotherapeutics is already considering launching Phase II studies in various cancer types, such as ovarian, breast, colon cancer, or mesothelioma, but patients must be HLA-A2 carriers. This could extend the clinical potential of Tedopi, and provides significant financial upside. Tedopi is protected until 2024, that can be extended to 2029. OSE Immunotherapeutics could therefore generate revenues through upfront and milestone payments and royalties on sales.

2.3. Effi-DEM : reactivate the immune system to block cancer progression

The merger has a strong rationale because of the possible synergies between the two entities. First of all, OSE Pharma and Effimune both specialize in immunotherapy; thereby they can combine their skills, knowledge, and strategies. The new company would benefit from a diversified pipeline, giving OSE Immunotherapeutics a strong position in the immunotherapy field. The first and obvious synergy is in the immuno-oncology field. It is typically the case with Effi-DEM, a new generation ICI for cancer treatment. As previously explained, OSE Immunotherapeutics’ strategy is to evaluate Tedopi in combination therapy to treat NSCLC with an ICI. This indicates that the company currently owns two complementary drug candidates which could show high synergy to treat cancers with unmet medical need.

Effimune and OSE Pharma have just announced the launch of a non-interventional study in hepatocellular carcinoma under a private-public collaborative program. This collaborative research program, called MDScan (Myeloid-Derived Suppressor Cells Analysis) will evaluate Effi-DEM in patients with hepatocellular carcinoma (primary liver cancer). The aim of the study is to measure a biomarker (a receptor strongly expressed by suppressor immune cells which play a key role in tumor

A combinatory trial with Tedopi and an

ICI could start in 2017


growth of inflammatory cancers) in these patients, and to evaluate the activity of Effi-DEM, the new checkpoint inhibitor targeting suppressor myeloid and macrophage cells. The MDScan program will be funded by the National Cancer Institute and the DGOS (Direction Générale de l’Offre de Soin) under a private-public partnership with Effimune and complementary academic institutions.

Effi-DEM is a second generation checkpoint inhibitor developed by Effimune in immuno-oncology. It blocks the SIRPalpha (Signal Regulatory Protein Alpha) receptor and transforms Myeloid Derived Suppressor Cells (MDSC) and Tumor Associated Macrophages (TAM) into non suppressor cells. The immune system is thus reactivated and tumor growth is blocked.

Figure 11. Effi-DEM acts by transforming MDSC and TAM suppressor cells into non suppressor cells. Through this activity, Effi-DEM restores effector activity of these cells that stop enhancing tumor progression and start to contribute to tumor regression (source: OSE Immunotherapeutics).

These first data will highlight Effi-DEM’s potential to block cancer progression, and should open the way to other indications, specifically cancers associated with chronic inflammation. Its original mechanism of action suggests interesting strategies to evaluate Effi-DEM’s potential, especially in combinatory therapy, with treatments like Tedopi, in order to greatly increase their therapeutic effects.

3. Immune-Mediated Inflammatory Diseases: Auto-immunity and Transplantation

Inflammation is a process whose function is to eliminate the cause of injury, to mop up cells that have been destroyed, and to initiate tissue repair. It is a complex process involving many cell types, as well as different components of the blood. The inflammatory process could become harmful when it attacks endogenous components and healthy cells, leading to inflammatory disorders. It is typically the case of rheumatoid arthritis which is characterized by excessive inflammation of the joints caused by the dysregulation of the immune system. Inflammation is also

Effi-DEM, a second generation ICI, a first in class drug

candidate against cancer


an important secondary component of many other diseases.

Immune Mediated Inflammatory Disorders (IMID) include several pathologies including rheumatoid arthritis (RA), psoriatic arthritis, Crohn’s disease, and psoriasis, as well as asthma, multiple sclerosis, dermatitis and lupus. These diseases affect different organs and systems of the body, and about 5 to 7% of the US and EU populations suffer from IMIDs. Although causes of IMIDs are not completely understood, it is strongly believed that genetic and environmental causes are involved in auto-immune diseases. It is common to observe the co-existence of different IMIDs within the same patient, and also within the same family.

The IMIDs market remains one of the most attractive for pharmaceutical companies because of its size, especially because there are numerous diseases affecting many patients worldwide. This is clearly reflected by the drug pipeline dedicated to these disorders which includes more than 375 drug candidates, with around 250 companies developing them in this field (Decision Resources Group). This study estimated that the IMIDs market was worth $68 billion. Interestingly, one single product can be used to treat many diseases when they share common signaling pathways. Moreover, because drugs developed to treat IMIDs are mostly biologics, with difficult research and development processes, treatments currently available are relatively expensive. However, the expense can be easily explained by two factors: the difficulty to develop biologic drugs in comparison to synthetic and chemical drugs, and the healthcare burden supported by the society because of the disabling effects of IMIDs. As an indication, an epidemiological study published in 2007 in the UK indicated that the total annual cost of RA to the UK society was over £1 billion in 1992. Moreover, it has been estimated that 2% of the patient population accounts for 34% of the medical costs in Crohn’s disease (Annabel Kuek and Postgrad Med J. 2007 Apr). Taken together, these elements demonstrate the opportunity within the IMIDs market and the need to find innovative solutions to treat such chronic diseases. Moreover, a significant number of IMIDS could quickly become very disabling and expensive not only for the patients and their families but also for the society as a whole, because of their economic impact.

As previously described, immune-mediated inflammatory diseases are caused by the dysregulation of the immune system, leading to chronic inflammation of specific tissue and cells of the body. Some socio-economic studies reported that IMIDs would have the same economic impact as cancers or infectious diseases. Thereby, the main challenge for IMIDs does not only consist in getting a better understanding of disease etiology, but also in obtaining new therapeutic solutions to improve patients’ quality of life, and to decrease direct and indirect costs of the diseases. Thus, therapies based on regulation and modulation of the immune system aiming to recover a physiological immune balance in the case of IMIDs, or a critical threshold in the case of transplantation, are the most suitable

About 5 to 7% of the US and EU

populations suffer from IMIDs

The IMID market is worth $68 billion

OSE Immunotherapeutics strategies to manage these situations. The different solutions developed by OSE Immunotherapeutics are precisely based on the recovery of this balance through the control of immune regulation.

Figure 12. FR104 and Effi-7 immunomodulation activity provides a strong alternative to treat diseases caused by the dysregulation of the immune system as in autoimmune diseases, inflammatory diseases and allograft rejections (source: OSE Immunotherapeu-tics).

3.1. FR104 : a new solution for rheumatoid arthritis

Rheumatoid arthritis (RA) is a chronic autoimmune disease which causes inflammation and deformity of the joints. RA is a systemic inflammatory condition that primarily affects the synovial membrane of affected joints. Extra-articular manifestations are common and may involve any organ system. RA affects approximately 0.3% to 1% of the adult population and is associated with chronic pain, disability, and increased mortality (WHO). The long-term prognosis is generally poor with approximately 80% of patients experiencing significant functional disability within 20 years after diagnosis.

According to GlobalData, RA affects over seven million people in the 10 major markets (US, France, Germany, Italy, Spain, UK, Japan, Australia, China, and India) and could reach a prevalence of 8.5 million by 2023. The market is currently dominated by anti-TNFs solutions that have demonstrated strong efficacy to treat RA. A new wave of products has recently emerged with biosimilars, medical products which are an identical copy of the original product. Humira is the current lead treatment in RA and also the bestselling drug in 2015-2016 ($14 billion). This information reflects the huge potential for the RA market, although there is huge competitive pressure because of newly approved drugs and because there are numerous drug candidates in late-stage development dedicated to RA treatment (detailed in section 1.1).

RA affects approximately 0.3% to 1% of the adult

population


Indeed, because RA is a chronic disease, and because of the high prices of available therapies, RA represents a huge market in terms of sales. According to GlobalData, the RA market in the 10 major markets is expected to grow at a Compound Annual Growth Rate (CAGR) of 2.1% between 2013 and 2023, from sales of $15.6 billion in 2013 to sales of $19.3 billion in 2023.

Although, the market is expected to be mostly driven by anti-TNF therapies and biosimilars, innovative treatments should gain a significant part of the RA market provided that they bring significant benefits compared to existing therapies. FR104 is a first-in-class drug, the only anti-CD28 under development, whose strategy is highly specific because it consists in inhibiting Treg cells, which in turn control Teff cell activation. Thus, with a unique molecule, OSE Immunotherapeutics intends to modulate the immune system balance by acting on a subset of T cells controlling the activation of another one. FR104 by keeping Treg cells OFF, inhibits Teff activation and therefore, maintains the immune system turned off. This innovative strategy and its obvious advantages could attract partners already present in this therapeutic field.

Effimune has already secured a partnership with Janssen Pharmaceuticals, which is expected to exercise an option to license FR104 in H2-2016 following Phase I results. Janssen Pharmaceuticals is part of the J&J group which already owns three products for rheumatoid arthritis. One of Janssen’s products is an anti-interleukin 6 antibody currently in Phase III trial. The second product is a TNF-alpha inhibitor (golimumab) already marketed. As previously explained, biosimilars could take significant market share of branded products. J&J’s third product in RA is the antibody Remicade (infliximab), generating more than $8 billion in sales per year. With the option to license FR104, an anti-CD28, Janssen could expand its portfolio for rheumatoid arthritis with drugs relying on three therapeutic approaches (TNF-alpha, IL6, and CD28). This strategy is confirmed by the recent participation of Janssen Pharmaceuticals in the Matwin consortium, a French cluster of academic laboratories and industries working together to develop and accelerate innovation. This illustrates Janssen’s desire to be involved in early drug research, and reflects its strategy to detect and develop preclinical programs with strong potential. This is validated by the Buyers’ interest, as shown in Figure 1, demonstrating that in the Immunology area, Buyers are interested in acquiring preclinical or Phase I assets. Moreover, last April, the FDA approved the first antibody biosimilar which actually is an infliximab biosimilar, from the company Celltrion. Later in May, Samsung Biologics’ infliximab biosimilar also received a positive opinion from the FDA committee. With the pending arrival of cheap versions of its blockbuster drug, FR104 could therefore be a promising drug candidate for the J&J group to keep its market share in RA. Janssen has been supporting the FR104 program since its preclinical developments under the deal concluded in 2013 with Effimune.

A huge market of $15.6 billion in 2013,

expect to reach $19.3 billion in 2023


3.1.1. Rheumatoid arthritis current treatments

Thanks to the scientific advances made during the past decades, in particular in the genetic field, therapeutic solutions dedicated to RA management have significantly increased. Indeed, a better understanding of the mechanisms of auto-immunity and dysregulation occurring in signaling pathways involved in auto-immune diseases, has permitted the identification of key proteins that could be specifically targeted to improve disease treatments. The current pipeline for RA reflects these advances as reported in the last GBI Research report. Several biologics have emerged as efficient solutions to treat IMIDs among which is RA. The first biologic to be approved for RA was Enbrel (etanercept) in 1998. Since then, many others have followed, with a strong interest in monoclonal antibodies. Moreover, with the first patents about to expire, we observe a wave of biosimilars clinical studies and approvals.

Because these products could be relevant in many IMIDs that share the same signaling pathways, the interest of pharmaceutical companies for such products has driven R&D efforts in immunotherapy. According to EvaluatePharma, three monoclonal antibodies approved for RA treatment, Humira (adalimumab, ranked #1), Remicade (infliximab, ranked #3) and Enbrel (etanercept, ranked #5), were ranked among the top 10 bestselling drugs in the world in 2013. This reflects not only the great interest in the RA market but also the financial opportunity it represents.

Figure 13. Current and future competitors in rheumatoid arthritis (Source: GlobalDa-ta). The star is representing FR104’s position, provided that Janssen (J&J group) exer-cises its licensing option.

Because R&D costs are an important burden for pharmaceutical compa-nies, and because of patent expiration, the pricing of new drugs is often high. As biologics are known to be more research intensive and therefore,

Humira is the current lead treatment in RA, but also the

bestselling drug in 2015-2016 ($14 billion)


more expensive to develop, the price of such treatments is even more ex-pensive. Taking into account the relevance of these drugs in many wide-spread diseases, this explains the high sales recorded in the field of IM-IDs. According to GlobalData, the biosimilar market alone is forecasted at $4.6 billion for 2023 in the RA indication alone, with Humira biosimilars accounting for $2 billion.

3.1.2. FR104 mechanism of action

FR104 is an antibody directed against CD28, able to block the interaction of CD28 with its natural ligands CD80 and CD86. FR104 was involved in a European program, TRIAD (Tolerance Restoration In Autoimmune Diseases) whose main objective was to demonstrate the ability of the molecule to restore an immune balance in autoimmune diseases involving T cells. FR104, a first in class CD28 immuno-modulator, is currently in a Phase I trial. Further Phase II studies will evaluate its efficacy to manage rheumatoid arthritis and transplantation disorders.

By blocking the interaction of CD28 with its ligands, FR104 prevents Treg inhibition by APCs (Antigen Presenting Cell) without activating Teff. APCs interact with T cells through other receptors expressed by T cells among which CTLA-4 and PD-L1, which recognize the same ligands CD80 and CD86. The selective blockage of CD28 by FR104 activates Treg whose role precisely consists in regulating Teff through their suppressive activity. At the same time, FR104 inhibits Teff that are responsible for auto-immune diseases when over activated.

Figure 14. Mechanism of action of FR104: enhancement of Treg cell activation while preventing Teff cell activation. Thus, FR104 selectively promotes immune regulation and downregulates Teff cell activity (source: OSE Immunotherapeutics ).

Thereby, FR104 activates Treg cells only, and prevents Teff cell activation through its binding to APC (Antigen Presenting Cell). This leads to the selective activation of Treg cells only, and then to the modulation of the immune system activity as needed in specific situations like autoimmune diseases or transplantation.

FR104, a first-in-class CD28 immuno-

modulator, currently in Phase I trial

FR104 is an antibody which restores T cell balance in

autoimmune diseases


Treg cells are a subset of CD4 + T lymphocyte population which have the property of inhibiting the proliferation of other Teff cells. Indeed, Treg are necessary for the maintenance of immune tolerance, so these particular cells participate in the maintenance of homeostasis. Regulatory Treg cells are involved in immune tolerance by regulating the effector T lymphocytes through their immunosuppressive action.

3.1.3. FR104 market estimations

FR104 is a CD28 receptor antagonist, a key receptor in effector T lymphocytes. These effector T lymphocytes are harmful in the case of autoimmune diseases and transplantation. Indeed, auto-immune diseases are caused by the abnormal activation of the body’s own immune system. Thus, FR104, by blocking CD-28, blocks effector T lymphocytes activation, leading to a well-balanced immune system.

OSE Immunotherapeutics chose to focus its strategy on a large indication by targeting rheumatoid arthritis patients, but its potential application could be very large thanks to its mechanism of action (inflammatory diseases and transplantation).

To estimate the market potential of FR104 in RA, we considered the following regions: the United States, the Top 5 European countries (France, Germany, Italy, Spain and the United Kingdom), and Japan. According to epidemiologic studies (WHO, World Health Organization), the prevalence of RA is approximately 0.3 to 1% of the global population. In the selected regions, there could be as many as 3.1 million patients suffering from RA considering a prevalence of 0.4%. It is estimated that 55% of RA patients are adequately diagnosed and that 72% of them are actually taking medication (GlobalData). Thus, there could be as many as 1,225,000 patients eligible to FR104 in 2016.

For market penetration, we hypothesized that OSE Immunotherapeutics’s product could claim as much as 10% of the market, given that there are numerous therapies available to treat RA.

To determine the price of FR104, we benchmarked the price according to other therapies available to treat RA. We applied different prices according to the regions of the world. In France, as seen in Table 7, the average cost for RA therapies is €30,000 per year. Based on this average price, we applied a similar cost across Europe. For the US and Japan, therapies

Source GlobalDataDemography 2016 Prevalence RA

Diagnosed population

Treated pop

0,40% 55,00% 72,00%European Union (5EU) 322,560,390 1,290,242 709,633 510,936US 323,995,528 1,295,982 712,790 513,209Japan 126,702,133 506,809 278,745 200,696Total 773,258,051 3,093,032 1,701,168 1,224,841

Table 6. Rheumatoid arthritis incidence in FR104 target market (source: Aurgalys estimations, GlobalData)

There could be as many as 1,225,000 patients eligible to

FR104 in 2016


are usually set at a higher price. We considered that FR104 could cost as much as €60,000 per year in the US, and a lower price, €45,000 per year in Japan.

Based on these hypotheses, FR104’s sales could reach as much as €5.3B in the targeted regions. Sales forecast are presented in Table 8, taking into consideration it would take 5 years to reach peak sales, and that FR104 would be marketed in 2023.

Therapy CompanyTherapy average annual Price Mechanism of

actionIndication

Europe (€) US ($)Humira

Abb Vie 27,075.36 68,432 anti‐TNF RA(Adalimumab)Enbrel Wyeth

Pharmaceuticals France

29,049.8 62,400 anti‐TNF RA(Etanercept)

OrenciaBristol‐Myers Squibb 24,726 28,795 anti‐TNF RA

(Abatacept)Simponi

J&J 10,764 37,440 anti‐TNF RA(Golimumab)Remicade

J&J 7,293 59,696 anti‐TNF RA(Infliximab)Table 7. Immunomodulation drug prices in Europe and United States (Source: French Health Ministry/ financial

press)

FR104 in RA 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025EuropePatients treated 510 936 511 735 512 535 513 336 514 139 514 943 515 748 516 554 517 362 518 171Market penetration 0% 0% 0% 0% 0% 0% 0% 0% 0% 1%Sales Europe (€M) 0,00 0,00 0,00 0,00 0,00 0,00 0,00 17,90 62,08 201,06USPatients treated 513 209 516 861 520 539 524 244 527 975 531 732 535 516 539 327 543 165 547 031Market penetration 0% 0% 0% 0% 0% 0% 0% 0% 1% 3%Sales US (€M) 0,0 0,0 0,0 0,0 0,0 0,0 0,0 129,4 421,5 1 136,4JapanPatients treated 200 696 199 945 199 196 198 450 197 707 196 967 196 230 195 495 194 763 194 034Market penetration 0% 0% 0% 0% 0% 0% 0% 0% 1% 3%Sales Japan (€M) 0,0 0,0 0,0 0,0 0,0 0,0 0,0 35,2 113,4 302,3Total Sales 0,0 0,0 0,0 0,0 0,0 0,0 0,0 182,5 596,9 1 639,8

FR104 in RA 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035EuropePatients treated 518 981 519 793 520 605 521 419 522 235 523 051 523 869 524 688 525 509 526 330Market penetration 3% 7% 9% 10% 10% 1% 0% 0% 0% 0%Sales Europe (€M) 539,08 1 019,46 1 359,82 1 501,69 1 548,61 155,10 15,53 1,56 0,16 0,02USPatients treated 550 924 554 844 558 793 562 770 566 775 570 808 574 870 578 961 583 082 587 231Market penetration 7% 9% 10% 10% 10% 1% 0% 0% 0% 0%Sales US (€M) 2 161,0 2 898,5 3 218,6 3 337,6 3 389,5 341,4 34,4 3,5 0,3 0,0JapanPatients treated 193 308 192 584 191 863 191 145 190 429 189 716 189 006 188 298 187 593 186 891Market penetration 7% 9% 10% 10% 10% 0% 0% 0% 0% 0%Sales Japan (€M) 568,7 754,5 828,8 850,2 854,1 42,5 2,1 0,1 0,0 0,0Total Sales 3 268,8 4 672,5 5 407,3 5 689,5 5 792,3 539,0 52,0 5,1 0,5 0,1

Table 8. FR104 sales forecast in RA (Source: Globocan, Aurgalys estimations)


3.2. FR104: to improve the success of transplantation

Transplantation is a big challenge since it represents one of the unique alternatives for patients suffering from organ dysfunction or tissue degradation/necrosis. Although it may seem easy to conceptualize the graft of an organ from one body to another, the molecular reality is more complex, and it does not just consist in surgical prowess. The statistics of transplantation successes have exploded since the human major histocompatibility complex (MHC) discovery in 1967. Before that, transplantation was a risky operation that often led to the rejection of the graft and in the worse cases, to the death of the patient. Today, it is well understood that a very strict protocol has to be respected to improve its success:

• the MHC compatibility between the donor and the host. This prevents the rejection caused by the differences in MHC between the two entities, leading to an activation of the natural defense mechanisms against the graft.

• the downregulation and control of the immune system in the host body to improve the graft acceptance. This prevents the rejection caused by the introduction of a foreign “agent” (cells, organs or tissues) in an environment containing cells whose function consists in recognizing and destroying foreign agents.

It has been demonstrated that the use of CD28 antagonists in organ transplantations improves graft acceptance, and decreases the risk of rejection. Effimune has conducted experiments which demonstrated FR104’s ability to prevent allograft rejection, to inhibit antibody production against the allograft, and to prolong allograft survival. An allograft is a graft from a donor originating from the same species as the host. It is different and more difficult than an autograft which consists in a graft where the donor and the host are the same entity.

The transplantation market, in particular GvHD (Graft versus Host Disease) represents a huge market that could significantly increase the market potential of FR104. The main markets targeted by OSE Immunotherapeutics for FR104 are Kidney transplantation and GvHD.

As an indication, the Global Observatory on Donation and Transplanta-tion (GODT) has published data concerning the global activity in organ transplantation estimates in 2013.

Table 9. Global activity in organ transplantation estimates in 2013 (Source: GODT)

GvHD is a medical complication that could occur after stem cells or bone marrow transplantation. In this case, it is the immune cells present in the graft that recognize the host as foreign and reject it. This complication

Kidney Liver Heart Lung Pancreas Small bowel78,952 25,029 6,270 4,834 2,474 174

Control of the immune response: a huge challenge for transplantation

success


is less expanded than the “standard” graft rejection caused by the host defenses rejecting the graft. However, around 30–70% of hematopoietic stem cell transplant hosts will develop acute GvHD, and another 30–70% will develop chronic GvHD independent of acute GvHD (GlobalData). According to this study, 15,421 cases of GvHD occurred in 2013 in the 6 major markets (top 5 EU and the US), and epidemiologists forecast an increase to 22,053 cases in 2023, taking into account the increased need in transplantation.

The company recently published positive preclinical results in the Journal of the American Society of Nephrology, demonstrating that FR104 therapy could control graft rejection in a renal graft model, with a trend of increased regulatory T cells.

3.3. Effi-7 blocks the “fuel” of pathogenic T Cells

Effimune’s early stage programs include Effi-7, developed through the EFFIMab consortium, and led by Effimune. The aim of the con¬sortium is to develop a new generation of an immuno-modulatory antibody targeting the interleukin-7 receptor for the treatment of ulcerative colitis and acute Type T lymphoblastic leukemia.

Effi-7 is a monoclonal antibody that is directed against the IL-7 cytokine receptor (IL-7R or CD127). This cytokine is known to play an important role in lymphocyte development. Thus, IL-7 acts on survival, development, and homeostasis of T, B and NK cells. IL-7 could also be beneficial in improving immune recovery after allogenic stem cell transplant. Thereby, these specific roles make IL-7 a strategic and key molecule to modulate in order to efficiently act on the immune system balance. Moreover, several studies have demonstrated that IL-7 plays a role in different diseases, especially hematological malignancies such as acute lymphoblastic leukemia and T cell lymphoma, and also in transplantation.

The mechanism of action of Effi-7 consists in blocking the interaction between the cytokine and its receptor. This blockage leads to the disruption of the IL-7 signaling pathway. Effi-7 demonstrated interesting results in preclinical models of T-cell mediated inflammation, thanks to its in vivo immediate and long-lasting effect.

Because of its key role in T cells homeostasis, IL-7 is considered as the master “fuel” of pathogenic T-cell responses downstream of autoimmune and chronic inflammation diseases (Dooms, H., Autoimmun. 2013).

The strategy of Effi-7 is based on the particularity of the regulatory T cells (Treg) to be the unique lymphocytes which do not express the IL-7R, whereas other T cells express the IL-7receptor. In light of this physiological particularity, Effimune chose to target the IL-7R because of the opportunity to selectively target effectors T cells (Teff) without affecting Treg. Preclinical studies led by Effimune with Effi-7 showed interesting data demonstrating the efficacy of the drug candidate to restore the immune balance, especially in inflammatory bowel diseases,

Over 115,000 organ transplants performed

worldwide in 2013


type 1 diabetes, multiple sclerosis, rheumatoid arthritis, and to promote immune tolerance in allo-transplantation. The Effi-7 pre-clinical and clinical proofs of concept are the main goal of the EFFIMAB project, financed by the French public investment bank (Bpifrance) under the Industrial-Strategic-Innovation (ISI) program.

Figure 15. Mechanism of action of Effi-7: this antibody blocks the interaction of the IL-7 cytokine with its receptor on T cell surface. Because Treg are the unique T cells which do not express the IL-7 receptor, they are not disturbed by Effi-7. Thus, this molecule specifically downregulates Teff cells while maintaining Treg activity, which leads to the immune balance restoration (source: OSE Immunotherapeutics).

Effi-7 restores the immune balance

by downregulating Teff cells while

maintaining Treg activity


4. Enterprise value

4.1. Assumptions

Our estimate of OSE Immunotherapeutics’s value with the rNPV method (risk-adjusted Net Present Value) is based on licensing agreements that the company could sign after Phase III results with Tedopi and after Phase I regarding FR104. Cash flows forecasted over the period between 2016 and 2035 were discounted at a 15% discount rate.

We used clinical phase success rates to account for the risk associated with clinical development. Success rates applied in our model are presented in Table XX (updated from Keegan, 2008; and DiMasi, 2014). We can estimate that Tedopi has a 45% chance to reach the market, whereas FR104 has a 14% chance to reach the market, due to their respective development stages, and to intrinsic (scientific challenges) and extrinsic (buyers interest) difficulties linked to each therapeutic field.

Table 10. Success Rates in clinical trials (Source: adapted from K. Keegan, and J. DiMa-si).

OSE Immunotherapeutics’ valuation is based on its most advanced programs: Tedopi and FR104. In this model, we valued Tedopi in NSCLC as a second line monotherapy in HLA-A2+ patients, and FR104 in RA as a first line biotherapy with methotrexate (which is used as a background regimen). Because OSE Immunotherapeutics has yet to find a partner for co-development, Tedopi in combination therapy or in other indications was not taken into account in our valuation model. Similarly, we chose to include the option deal with J&J for FR104, but added a success rate on its occurrence. Although we are confident, J&J would exercise the option, OSE Immunotherapeutics will be informed about J&J decision in H2-2016. We estimated the value of the FR104 asset based on the RA indication only.Moreover, potential news events have not been valued in our model, but could represent significant upside should OSE Immunotherapeutics provide corporate updates:

• licensing of Tedopi outside the US/EU region (upfront and milestone payments)

• launch of a Phase II with Tedopi combination therapy

• launch of a Phase II with Tedopi in another cancer indication

• FR104 licensing agreement with J&J

Phase Success Rates Phase Probability to reach phase

Cancer Immunology Tedopi FR104Phase II 73% 35% Phase II done 65%Phase III 50% 70% Phase III 100% 23%

Regulatory 90% 90% Regulatory 50% 16%Market 100% 100% Market 45% 14%


Also, we decided not to value the deal concluded with Israeli RAFA Laboratories because of the small market size. Further deals in larger territories that the company could secure in the future could provide an upside to our valuation.

Our estimated timeline for Tedopi’s and FR104 development is presented in Figure 16.

Figure 16. OSE Immunotherapeutics R&D Timeline (source: Aurgalys estimations).

4.2. OSE Immunotherapeutics valuationAfter taking these assumptions listed in section 3.1 into consideration, our valuation for OSE Immunotherapeutics is €233.3M (Table 11) or €16.38/per share (14,244,384 outstanding shares), including an estimated net cash of €15.0M.

Launch Patent expiry

Peak Sales** (€B)

Success Rate

rNPV (€M)

Tedopi NSCLC 2020* 2030 1.7 45% 176.8

FR104 RA 2023 2031 5.5 14% 41.5

Estimated Net Cash 15.0

Total 233.3

Table 11. Sales forecast and Net Present Value (*Launch date for US and Europe, launch

in Asia is estimated at 2022, **Estimated sales according to our assumptions)

Valuation of TedopiCash flows are presented in Table 12. We estimated that Tedopi’s Phase III would end in 2018. After registration in 2019, Tedopi could be commercially available in 2020 in the US/EU region. In our model, we modeled a licensing deal with the following details: a €434M deal, including an upfront payment of €64M, a 20% royalty rate on sales. In our assumptions, we considered that OSE Immunotherapeutics would keep 55% of the value of Tedopi, since they would have supported all R&D costs. Concerning the licensing deal, we only considered the NSCLC indication, with treatment using Tedopi as a stand-alone therapy. It is possible that given the possible use of Tedopi in other indications, or in combination therapy (PD1 or PDL1 checkpoint inhibitors) to treat NSCLC,

Phase III

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2029 2030

RegistrationMarketing

Phase IIIRegistration

Marketing

Phase I

….

Phase III

TEDOPI Tedopi in NSCLC

Tedopi NSCLCin combination with an ICI

FR104 in RA

Phase IIPhase III

RegistrationMarketing

FR104License option Janssen Pharmaceuticals H2


OSE Immunotherapeutics could secure a larger deal that would include rights to all potential use of Tedopi in cancer management.

These amounts are in line with other licensing deals secured in the field of oncology (Table 1). For other regions (BRIC, Asia), it is likely that there would be other clinical trials to be performed. For instance, Chinese and Japanese authorities usually require clinical trials in their respective population to account for genetic variations that could affect drug efficacy. OSE Immunotherapeutics has already indicated it would find a local partner that would conduct such a trial. Because we do not have visibility on where and when OSE Immunotherapeutics would secure a partner, we decided to only value royalties on sales (15% of sales in these countries). OSE Immunotherapeutics would only bear the costs related to the phase III trial (€10M) and single-digit royalties to Takeda that we estimated at 6% of Tedopi sales. With a 45% chance of reaching the market, we obtain an rNPV of €176.8M for Tedopi in NSCLC.

Valuation of FR104Cash flows are presented in Table 13. We estimated that FR104’s Phase I would end in Q2-2016. After examination of the Phase I results, Janssen will decide whether or not to exercise the option. We estimate that FR104 could be commercially available in 2023. In our model, we modeled a licensing deal taking into account terms provided by the company with the following details: a €150M deal, including an upfront payment of €10M, a 10% royalty rate on sales. In our assumptions, we considered

€M 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025eSales EU/USA/Can 0,0 0,0 0,0 0,0 6,3 22,1 72,2 195,3 372,4 500,9Sales BRIC, Jp & S.K. 0,0 0,0 0,0 0,0 22,7 74,1 200,7 383,2 516,2 575,6Total Sales 0,0 0,0 0,0 0,0 29,0 96,2 272,9 578,5 888,5 1076,5Milestones EU/USA/Can. 0,0 0,0 0,0 63,8 114,5 53,3 37,8 0,0 82,3 0,0Roy. EU/Can/USA (20%) 0,0 0,0 0,0 0,0 5,8 19,2 54,6 115,7 177,7 215,3Roy. BRIC/Jp + S.K. (15%) 0,0 0,0 0,0 0,0 0,0 0,0 1,2 4,4 14,5 39,4Total Revenues 0,0 0,0 0,0 63,8 120,3 72,6 93,6 120,1 274,4 254,7Costs Development 3,5 4,0 1,5 0,0 0,0 0,0 0,0 0,0 0,0 0,0Milestone to Takeda 11,5Royalties to Takeda (6%) 0,0 0,0 0,0 3,8 7,2 4,4 5,6 7,2 16,5 15,3Total Costs 3,5 4,0 1,5 3,8 18,7 4,4 5,6 7,2 16,5 15,3EBITDA -3,5 -4,0 -1,5 60,0 101,7 68,2 88,0 112,9 258,0 239,5Tax (33%) ‐1,2 ‐1,3 ‐0,5 13,3 22,5 15,1 19,5 25,0 57,0 52,9CF -3,5 -4,0 -1,5 40,2 68,1 45,7 59,0 75,6 172,8 160,4

€M 2026e 2027e 2028e 2029e 2030e 2031e 2032e 2033e 2034e 2035eSales EU/USA/Can 557,8 580,1 590,8 598,1 604,5 61,1 6,2 0,6 0,1 0,0Sales BRIC, Jp & S.K. 599,4 611,4 619,8 627,3 634,5 64,2 6,5 0,7 0,1 0,0Total Sales 1 157,2 1 191,4 1 210,6 1 225,3 1 239,0 125,2 12,7 1,3 0,1 0,0Milestones EU/USA/Can. 82,3 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0Roy. EU/Can/USA (20%) 231,4 238,3 242,1 245,1 247,8 25,0 2,5 0,3 0,0 0,0Roy. BRIC/Jp + S.K. (15%) 75,8 102,8 115,4 121,0 124,3 12,7 1,3 0,1 0,0 0,0Total Revenues 389,5 341,1 357,5 366,1 372,1 37,7 3,8 0,4 0,0 0,0Costs Development 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0Milestone to TakedaRoyalties to Takeda (6%) 23,4 20,5 21,5 22,0 22,3 2,3 0,2 0,0 0,0 0,0Total Costs 23,4 20,5 21,5 22,0 22,3 2,3 0,2 0,0 0,0 0,0EBITDA 366,2 320,6 336,1 344,1 349,7 35,4 3,6 0,4 0,0 0,0Tax (33%) 81,0 70,9 74,3 76,1 77,3 7,8 0,8 0,1 0,0 0,0CF 245,3 214,8 225,2 230,6 234,3 23,7 2,4 0,2 0,0 0,0

Table 12. Tedopi Cash Flow forecasts (Source: Aurgalys).


that OSE Immunotherapeutics would keep 20% of the value of FR104. Concerning the licensing deal, we only considered the RA indication, with treatment using FR104 in combination with methotrexate. As mentioned previously, FR104 therapeutic strategy is relevant to several diseases in IMIDs (autoimmune diseases and transplantation). Thus, OSE Immunotherapeutics could secure a larger deal that would include rights to all potential use of FR104 in IMIDs management.

These amounts are in line with other licensing deals secured in the field of autoimmunity (Table 1). Because we cannot consider the deal as definitely secured, we put a risk factor on the occurrence of Janssen option. Thus, we estimated that this risk factor could correspond to the success rate of FR104 to reach the Phase II stage. This would correspond to the Phase I success, estimated at 65% for autoimmune diseases. OSE Immunotherapeutics supported the development related to preclinical research and the Phase I trial (financed by a €10M subvention from Janssen since 2013) and will need to pay single-digit royalties to academic partners that we estimated at 5% of OSE Immuntherapeutics’ FR104 revenues. With a 14% chance of reaching the market, we obtain an rNPV of €40.1M for FR104 in RA. If Janssen were to exercise the option on FR104 in Q3-Q4-2016, we estimate that the rNPV of FR104 would increase to €61.6M in RA with the same assumptions described previously. This upside only illustrates the deal option exercised without including indications other than RA.

€M 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025eSales Europe 0,0 0,0 0,0 0,0 0,0 0,0 0,0 17,9 62,1 201,1Sales US 0,0 0,0 0,0 0,0 0,0 0,0 0,0 129,4 421,5 1136,4Sales Japan 0,0 0,0 0,0 0,0 0,0 0,0 0,0 35,2 113,4 302,3Total Sales 0,0 0,0 0,0 0,0 29,0 96,2 272,9 578,5 888,5 1076,5Milestones 10,0 0,0 0,0 15,0 0,0 0,0 25,0 20,0 0,0 30,0Royalties 0,0 0,0 0,0 0,0 0,0 0,0 0,0 16,4 53,7 147,6Total Revenues 10,0 0,0 0,0 15,0 0,0 0,0 25,0 36,4 53,7 177,6Costs Development 0,0 4,0 6,0 10,0 15,0 25,0 20,0 0,0 0,0 0,0Royalties to partners 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,8 2,7 7,4Total Costs 0,0 4,0 6,0 10,0 15,0 25,0 20,0 0,8 2,7 7,4EBITDA 10,0 -4,0 -6,0 5,0 -15,0 -25,0 5,0 35,6 51,0 170,2Tax (33%) 3,3 ‐1,3 ‐2,0 1,7 ‐5,0 ‐8,3 1,7 11,8 16,8 56,2CF 6,7 -2,7 -4,0 3,4 -10,1 -16,8 3,4 23,9 34,2 114,0

€M 2026e 2027e 2028e 2029e 2030e 2031e 2032e 2033e 2034e 2035eSales Europe 539,1 1019,5 1359,8 1501,7 1548,6 155,1 15,5 1,6 0,2 0,0Sales US 2161,0 2898,5 3218,6 3337,6 3389,5 341,4 34,4 3,5 0,3 0,0Sales Japan 568,7 754,5 828,8 850,2 854,1 42,5 2,1 0,1 0,0 0,0Total Sales 3 268,8 4 672,5 5 407,3 5 689,5 5792,3 539,0 52,0 5,1 0,5 0,1Milestones 0,0 0,0 30,0 0,0 20,0 0,0 0,0 0,0 0,0 0,0Royalties 294,2 420,5 486,7 512,1 521,3 48,5 4,7 0,5 0,0 0,0Total Revenues 294,2 420,5 516,7 512,1 541,3 48,5 4,7 0,5 0,0 0,0Costs Development 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0Royalties to partners 14,7 21,0 24,3 25,6 26,1 2,4 0,2 0,0 0,0 0,0Total Costs 14,7 21,0 24,3 25,6 26,1 2,4 0,2 0,0 0,0 0,0EBITDA 279,5 399,5 492,3 486,5 515,2 46,1 4,4 0,4 0,0 0,0Tax (33%) 92,2 131,8 162,5 160,5 170,0 15,2 1,5 0,1 0,0 0,0CF 187,3 267,7 329,9 325,9 345,2 30,9 3,0 0,3 0,0 0,0

Table 13. FR104 Cash Flow forecasts (Source: Aurgalys).


With these two assets, we obtain a value for OSE Immunotherapeutics of €233.3M (cash included) or €16.38/share. This value could reach €255.7M, if Janssen exercises its licensing option, bringing our target price to €18.06.


4.3. Stock performance

As with other French Biotech smallcaps, OSE Pharma was impacted by negative macroeconomic events, and more specifically, the oil crisis, the Chinese economy, and the Euro under pressure. OSE Pharma’s stock lost 12.9% since January 1st, 2016, closing at €7.38 on June 7th, 2016. As seen in Figure 17, OSE Immunotherapeutics’ performance is somehow correlated to other French Biotech/Medtech smallcaps.

The merger between OSE Pharma and Effimune was approved by the shareholders of both companies during their respective extraordinary general meetings, at the end of May 2016. The merger is a non-cash transaction, whereby OSE Pharma absorbed Effimune. For 1 share of Effimune, shareholders of the company received 1.93 newly issued shares of OSE Pharma (OSE Pharma issued approximately 4 million new shares). Effimune’s shareholders represent 29% of OSE Immunotherapeutics’ capital, while OSE Pharma’s shareholders hold 71%. Dr. Dominique Costantini, CEO of OSE Pharma is the CEO of the new entity, whereas Maryvonne Hiance, CEO of Effimune has taken the Vice-Presidency of OSE Immunotherapeutics’ board of directors.

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

01/07/2015 01/10/2015 01/01/2016 01/04/2016

OSE Pharma Alys France

-24.8%-20.8%

Figure 17. One-year chart dated June 7th, 2016, comparing the performance of OSE Immunotherapeutics’s stock with French smallcaps of the life sciences and healthcare sector (Alys France index).


Financial DataStatements for the years 2013, 2014, and 2015 are OSE Pharma’s financial statements. Estimated figures are for OSE Immunotherapeutics.

Earnings Per Shares (€) 2013 2014 2015 2016e 2017e 2018eEPS ‐0.03 ‐0.36 ‐0.59 ‐0.42 ‐0.39 ‐0.26

Income Statement (€M) 2013 2014 2015 2016e 2017e 2018eRevenues 0.0 0.0 0.0 3.3 3.3 3.3EBIT ‐0.3 ‐2.8 ‐5.6 ‐6.5 ‐6.0 ‐4.2Net Income -0.3 -2.8 -5.6 -6.0 -5.5 -3.7

Balance Sheet (€M) 2013 2014 2015 2016e 2017e 2018eNon‐Current Assets 0.0 0.1 0.1 59.8 58.3 56.8Current Assets 0.3 1.9 16.9 22.6 14.2 8.1Including Cash and Cash equivalents 0.3 1.1 9.3 15.1 6.8 4.4Total Assets 0.3 2.0 17.0 82.4 72.5 65.0Total Equity -0.9 -0.8 14.5 57.4 51.9 48.2Non‐Current Liabilities 1.1 0.9 0.2 16.0 15.1 14.1Current Liabilities 0.1 1.9 2.3 8.9 5.5 2.6Total Equity and Liabilities 0.3 2.0 17.0 82.4 72.5 65.0

Cash Flow Statement (€M) 2013 2014 2015 2016e 2017e 2018eCash from operating activities ‐0.2 ‐1.9 ‐4.6 1.8 ‐7.8 ‐5.2Cash from investing activities 0.0 0.0 ‐6.2 ‐0.1 ‐0.1 ‐0.1Cash from financing activities 0.3 2.8 19.1 ‐1.0 ‐0.5 2.8Change in Cash 0.1 0.8 8.2 0.8 -8.3 -2.4


Appendices

1. Company history

2. Management

Dominique Costantini: Chief Executive Officer and Development Director, Physician, Immunologist

Dr. Costantini founded OSE Pharma in 2012 and has been the CEO since then. She was the founder and former CEO of BioAlliance Pharma (1997- 2011, Paris, a EuroNext-listed company, now Onxeo) where she designed, patented, and developed therapeutic innovations in the field of oncology. She introduced BioAlliance Pharma on Euronext at the end of 2005, the only French Biotech company to have registered 2 products in the US. Dr. Costantini has over 20 years of experience in the pharmaceutical industry. She managed the development of drugs from research to pre-clinical and then clinical development to registration, and obtained product reimbursement in Europe and the US. Dr. Costantini obtained her MD from the Paris V University.

OSE Pharma Effimune2004: creation of JT Pharma, a consultingcompany in the pharmaceutical sector2011-2012: Emile Loria recovers from TakedaMemopi through Biotech Synergy in 2011, andthen transferred in April 2012 to OSE PharmaInternational in Geneva (OPI).March - April 2012: Participation of EmileLoria and Dominique Costantini in JT Pharma’scapital, and conversion of JT PharmaCorporation Orphan Synergy Europe – PharmaJuly 2012: OSE Pharma signs a licensingagreement with OPI Geneva to develop theinternational program TedopiJanuary 2013: Orphan status obtained in theUS for the Tedopi program dedicated to NSCLCHLA‐A2‐positive patientsMarch 2014: acquisition of OPI in Genevawhich holds Tedopi’s international rightsJune 2014: Phase III protocol in lung cancersubmitted and approved by the US FDA andthe EMA in EuropeJuly 2014: €3.2 M financing roundMarch 2015: Initial Public Offering. OSEPharma raises €21.1MJanuary 2016: launch of "Atalante 1", a PhaseIII trial to evaluate Tedopi in NSCLC (resultsexpected in late 2018)

December 2007: Creation of Effimune, a spin‐off of the Nantes Institute of Transplantation Urol‐ogy Nephrology‐ITUN September 2013: FR104 included in a global license agreement with Janssen Biotech2014: launch of the EffiMab20M consortium on Effi‐72015: launch of FR104 Phase I clinical trial (results expected in Q3‐2016)

May 2016: Merger of the two companies to create OSE Immunotherapeutics


Maryvonne Hiance: Strategic Advisor to Executive Manage-ment, Vice-Chairman of the Board, Administrator

Previously President and co-founder of Effimune, she graduated in nuclear science and has been Manager for 14 years of a nuclear program on neutron within Framatome (Areva). She also previously led, for over 20 years, various innovative companies in Biotechnology: SangStat Atlantic (the parent company Sangstat medical corporation was acquired by Genzyme in 2003 for industrial product portfolio in immunosuppression and transplantation); She also led the innovation of companies DrugAbuse Sciences and TcLand society. Maryvonne founded and directed the company Strategic Ventures a consulting company involved in supporting technology companies. She was a member of the strategic advisory board and Innovation Minister for SMEs and industry.

Bernard Vanhove: Chief Operating Officer, in charge of R & D and international scientific collaborations

PhD in Immunology (University of Louvain Belgium), co-founder of Effimune and Deputy CEO since July 2014. He has had an international scientific career, especially at Sandoz Research Institute in Vienna (Austria). Research Director at CNRS (French National Centre for Scientific Research), at INSERM (French National Institute of Health and Medical Research), and at ITUN (Institute of Transplantation Immunology-urology), Bernard also worked as a scientist at CESTI, the European Center for Transplantation Sciences and Immunotherapy. In 2013, he received 2013 France Transplant Award, an award for the preclinical pharmacological efficacy in immunology and tolerance of the FR104. He also was coordinator of the European FP7 Network named “TRIAD” in autoimmune diseases (Tolerance Restoration in Autoimmune Diseases), and he is the author of more than 80 international publications in the field of immune restoration.

Alexis Peyroles, Chief Financial Officer, MBA, Deputy CEO in charge of finance and operations agreements and licenses

Alexis Peyroles joined OSE Pharma as Chief Financial Officer in September 2013. Alexis has over 15 years of management experience at an international level, mainly in the healthcare sector. At Sanofi in Japan and in Eastern European countries, he served as a financial controller for Baltic countries and licensing activities (Business Development) for the Eastern Europe area. He then held at Guerbet, the position of Management Control Director and CEO (Chief Executive Officer) of South America from its subsidiary in Brazil, where he was in charge of commercial and industrial operations. Alexis Peyroles graduated from EDHEC Business School and got an « Executive MBA » from « Imperial College » in London.


Anne-Laure Autret-Cornet, Financial and Administrative Manager

Financial and Administrative Manager of Effimune, she graduated from ESSCA, with an Audit-Finance specialization. She has extensive experience in this field, having worked for Deloitte almost 7 years before joining Effimune in October 2013.

Nicolas Poirier, Scientific Director

Doctor of Science in Immunology reached in the CESTI (European Center of Transplantation Sciences and Immunotherapy) in Nantes. It has developed successfully in preclinical and primate models, new therapeutic strategies on new targets and new immunologic pathways. He received the “Award of Academic Research” of Le Monde, and was classified as “new opinion leader” by The Transplantation Society (International Society of Transplantation). In 2009, he joined Effimune as project manager. He became the director of scientific programs of Effimune to develop and carry out with his team immune-regulation innovative projects responding to severe disease with high medical needs: transplantation, autoimmune diseases and immuno-oncology. He is the author of prominent international publications in the field of immune restoration.

3. Capital structure (source OSE Immunotherapeutics)


References

• GlobalData PharmaPoint: Rheumatoid arthritis – Global drug forecast and market analysis to 2023• GlobalData EpiCast: Graft-versus-Host disease – Epidemiology forecast to 2023• Campbell Alliance: Dealmakers’ intentions 2015• Medius Associates: DealWatch 2014, 2015, 2016• EvaluatePharma’s «World Preview 2013, Outlook to 2018»• GBI Research : Rheumatoid Arthritis Market to 2020 - A Crowded Market Characterized by Modest Growth• Decision Resources Group: «Strategic Overview of the Immune/Inflammatory Disease Marketplace», 2010• Datamonitor Healthcare• Globocan• Haute Autorité de Santé• World Health Organization• Global Observatory on Donation and Transplantation• IMS Health, Disease Insights, R&D Focus, May 2016

• Annabel Kuek, Brian L Hazleman, Andrew J K Östör, Immune-mediated inflammatory diseases (IMIDs) and biologic therapy: a medical revolution. Rheumatology Research Unit, Addenbrooke’s Hospital, Cambridge, UK, Postgrad Med J. 2007 Apr; 83(978): 251–260• Dooms, H. Interleukin-7: Fuel for the autoimmune attack. J. Autoimmun. 45, 40–48 (2013)• Thun MJ, Hannan LM, Adams-Campbell LL, et al. Lung Cancer Occurrence in Never-Smokers: An Analysis of 13 Cohorts and 22 Cancer Registry Studies. Adami H-O, ed. PLoS Medicine. 2008; 5(9):e185. doi: 10.1371/ journal.pmed.0050185. • Nature Reviews – Clinical Oncology

• Karl D. Keegan, Biotechnology valuation: An Introduction Guide. Wiley Finance, 2008• Joseph A. DiMasi, Innovation in the Pharmaceutical Industry: New Estimates of R&D Costs, R&D Cost Study Briefing, 2014• SEER, 2007

• OSE Pharma• Effimune• http://www.medicaments.social-sante.gouv.fr/• https://www.vidal.fr/


Notes

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Acknowledgements

Special thanks to Chris Wilkinson (B.Sc. Pharmacy, US trader) for her detailed and constructive comments

About Aurgalys indicesAurgalys launched on October 2013, the Alys France index measuring the performance of the 40 French smallcap companies (less than €1B of market capitalization) listed on Euronext/Alternext Paris. Three other indices also measure the performance of companies dedicated to the development of therapeutic molecules (Alys Therapeutics), diagnostic tests (Alys Diagnostics), medical devices (Alys Medtech) and Greentech (Alys Greentech). You can find our reports on our website at http://www.aurgalys.com/aurgalys-indices

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