Zogenix Inc.

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Zogenix Inc.
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Who is Zogenix?

• Filed March21, 2008 to come public via an 86
  million IPO
• Specialty pharmaceutical company with two
  proprietary product candidates in late-stage
  development for the treatment of central nervous
  system disorders and pain.
• Sumatripan DosePro, Lead product
• needle-free subcutaneous delivery of sumatriptan
  for the treatment of acute migraine.
• NDA submitted December 2007, and accepted for
  filing by the FDA in March 2008.
• Plan to launch the product in the first quarter
  of 2009.
• ZX002 - second product
• novel controlled release formulation of
  hydrocodone for the treatment of chronic pain.
• has completed Phase 2 clinical trials, initiating
  the Phase 3 clinical program in the second half
  of 2008.

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Dose Pro TM

• A novel drug delivery system that subcutaneously
  delivers a pre-filled, single dose injection of a
  drug through an easy-to-use, needle-free device
  that can be self-administered.
• Preliminary pre-clinical and clinical studies
  demonstrate that DosePro can be used with small
  molecules and biological products, including
  protein therapeutics and monoclonal antibodies.
• This technology may have significant market
  potential across a broad range of therapeutic
  areas, including those typically treated with
  small volume injectable products, such as
  hepatitis, infertility, multiple sclerosis and
  rheumatoid arthritis.

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• Zogenix will build their internal product
  pipeline by investigating proven drugs that can
  be paired with DosePro to enhance their benefits
  and commercial attractiveness.
• Will focus on marketed compounds whose commercial
  potential has been limited by safety concerns,
  relative efficacy or patient adherence.
• Will out-license Dose Pro to potential partners
  seeking to enhance, differentiate, or extend the
  life cycle of their own injectable products.

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Lead Compound Sumatripan Dose Pro TM

• Migraine affects approximately 30 million people
  in the United States
• Characterized by four major symptoms
• pain,
• nausea
• abnormal sensitivity to both sound and light.
• Triptans are the class of drugs most often
  prescribed for treating migraines. They are
  believed to effect migraine relief by binding to
  serotonin (5-hydroxy-tryptamine) receptors in the
  brain, where they act to induce vasoconstriction
  of extracerebral blood vessels and also reduce
  neurogenic inflammation.

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Sumatripan Dose Pro TM

• Sumatriptan was the first Triptan compound to be
  developed, and offered improved efficacy and
  tolerability over ergot-derived compounds.
• The development of sumatriptan was quickly
  followed by a number of second generation
  triptan compounds, characterized by improved
  pharmacokinetic properties and/or tolerability
  profiles.
• Although the pharmacological mechanism of the
  triptans is similar, their pharmacokinetic
  properties are distinct.
• bioavailability of oral formulations ranges
  between 14 (sumatriptan) and 74 (naratriptan),
  and their elimination half-life ranges from 2
  hours (sumatriptan and rizatriptan) to 25 hours
  (frovatriptan).
• Sumatriptan has been in clinical use for over 15
  years for the safe and effective treatment of
  migraine and cluster headache and is currently
  available by
• tablet, nasal spray and subcutaneous injection.

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• Market
• Triptan drugs generated 2.8 billion in the
  United States (2007 sales- average wholesale
  price data published by Wolters Kluwer Health)
• Injectable sumatriptan provides the fastest onset
  and most complete migraine relief of any form of
  migraine therapeutic, including all oral and
  nasal triptans.
• Competition
• Imitrex (GlaxoSmithKline) is the leading triptan
  brand
• 1.6 billion in the US (2007 sales)
• Injectable forms of Sumatriptan accounted for
  274 million, of which Imitrex STATdose accounted
  for 242 million.
• DosePro is expected to compete for approximately
  550 million annually in the five major countries
  of Europe Germany, France, Italy, Spain, and the
  UK, according to IMS Health MIDAS

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Commercialization of Sumatripan outside the US

• March 17, 2008 Entered into a license agreement
  to grant exclusive rights in the European Union
  to Desitin Pharmaceuticals, to develop and
  commercialize Sumatriptan DosePro.
• Under the terms of the agreement, Desitin will
  oversee, and be responsible for the expenses
  related to, all clinical development, regulatory
  approvals and commercialization efforts required
  to market and sell sumatriptan DosePro across
  Europe.
• Zogenix will be responsible for the manufacture
  and supply of commercial product, and will
  receive a transfer price payment on manufactured
  product and royalty payments based on sales of
  the product upon commercialization.
• Zogenix retains full commercial rights to
  sumatriptan DosePro in the U.S., Canada, Asia and
  certain other countries.

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Hedging our Bets?

• Recent high profile setbacks to the inhalable
  drugs sector, including the market failure of
  Pfizer's Exubera (inhalable insulin) and recent
  decisions by NovoNordisk and Eli Lilly to abandon
  similar development projects, are likely to
  increase the demand for effective needle-free
  delivery methods.
• The recent development of needle-free delivery
  systems has accelerated considerably in response
  to the generally-held opinion that patients
  dislike traditional syringe-administered
  medications.
• In addition, the renewed focus on patient
  compliance as a way of improving therapeutic
  outcomes has seen companies with successful
  needle-free systems begin to attract considerable
  investor attention.
• Dose Pro system has potential application in
  indications ranging from hepatitis to rheumatoid
  arthritis, has already been examined as a method
  of delivering agents including the anaemia drug
  erythropoietin (EPO) as well as a variety of
  targeted therapeutic antibodies.
• Future looks good for Zogenix!

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Chronic Pain

• The American Pain Society estimated in 1999 that
  9 of the U.S. adult population suffers from
  moderate to severe non-cancer related chronic
  pain.
• Chronic pain is treated with both immediate
  release and extended release opioids.
• Market
• Target market as prescription non-injectable
  codeine-based and extended release morphine-based
  pain products.
• 2007 U.S. sales of approximately 9.7 billion,
  based on average wholesale price, on
  approximately 185 million prescriptions (data
  published by Wolters Kluwer Health).
• During the same period, existing hydrocodone
  products, the most commonly prescribed opioid
  pain products, generated 2.5 billion in sales
  representing growth of 18.3 since 2006.

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ZX002 - oral hydrocodone

• Controlled release profile that combines
  immediate release and extended release
  properties, using Elan Pharma International
  Ltd.'s proprietary Spheroidal Oral Drug
  Absorption System, or SODAS.
• SODAS The extended-release beads are prepared
  using sugar/starch spheres upon which a
  drug/excipient layer is coated, followed by an
  ammonio-methacrylate copolymer coating
• After rapid dissolution of the hard gelatin
  capsule shell, the permeability of the
  ammonio-methacrylate copolymer coating allows GI
  fluid to enter the beads and solubilize the drug.
  
• After dissolving, morphine may then diffuse out
  of the beads at a predetermined rate. This entire
  process prolongs the in vivo dissolution of the
  drug and extends its absorption into the body.
• Zogenix in-licensed exclusive U.S. rights to
  ZX002 from Elan Pharma International Ltd. in
  November 2007 (makers of Avinza).

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Competition

• Current competitors in the opioid pain
  therapeutics space include
• Abbott Laboratories (Vicodin and Vicoprofen)
• Alpharma Inc. (Kadian)
• Endo Pharmaceuticals Holdings Inc. (Opana,
  Percocet)
• Johnson Johnson, (Tylox, Tramadol)
• King Pharmaceuticals, Inc. (Avinza)
• Mallinckrodt Inc., (Magnacet)
• Purdue Pharma L.P. (MS Contin C-II, OxyContin
  C-II, OxyIR C-II)
• Teva Pharmaceutical Industries Limited
• Watson Pharmaceuticals, Inc. (Maxidone)
• There are at least fifteen opioid product
  candidates, including abuse and diversion
  resistant formulations of currently available
  opioids, novel opioids and alternative delivery
  forms of various opioids under development at
  other pharmaceutical companies, including an
  extended release version of Vicodin being
  developed by Abbott Laboratories, and an
  extended-release hydrocodone product candidate
  being developed by Alpharma, Inc.
• ZX002 also faces competition from non-opioid
  product candidates including new chemical
  entities, as well as alternative delivery forms
  of NSAIDs.

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So what does Zogenix offer?

• Presently, hydrocodone is only available in
  immediate release product forms that are commonly
  dosed four to six times per day to provide pain
  relief.
• Existing hydrocodone products, (Vicodin, Lortab
  and Vicoprofen), and their generic equivalents,
  contain analgesic combination ingredients such as
  acetaminophen or NSAIDs, which if taken in high
  quantities over time can lead to serious side
  effects such as liver toxicity and
  gastrointestinal damage.
• Eliminating the combination analgesic ingredient
  and by having a controlled release profile, ZX002
  removes the potential limitations of existing
  hydrocodone combination formulations and allows
  for less frequent dosing.

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Pharmacokinetics?!?

• In single and multiple dose pharmacokinetic
  evaluations, ZX002 demonstrated detectable plasma
  concentrations of hydrocodone within 15 minutes.
• ZX002 also demonstrated a sustained release
  effect significantly longer than currently
  available hydrocodone combination products such
  as Vicodin, dose proportional pharmacokinetics
  and an acceptable safety profile.
• SOMEWHAT VAGUE!!!
• In a Phase 2 chronic pain study, ZX002
  demonstrated a reduction in pain intensity for
  chronic moderate to severe osteoarthritis pain
  patients across multiple dosage strengths and a
  clinically acceptable safety profile.

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Meet the Board

• Cam Garner - Founder of Dura Pharmaceuticals
  (Co-founder and Chair)
• local industry members have called the most
  successful specialty pharmaceutical company in
  San Diego history. Dura specialized in
  respiratory and pulmonary therapies and was
  acquired by Dublin, Ireland-based Elan Corp. for
  1.8 billion in 2000.
• The mastermind behind San Diego-based Verus
  Pharmaceuticals Inc., which last year introduced
  the first major competitor to the 20-year-old
  EpiPen to treat severe allergic reactions.
• Founding member of the first San Diego biotech
  firm, former Hybritech - acquired in 1986 by Eli
  Lilly Co. For 500 million.
• Co-founder of specialty pharmaceutical companies,
  Cadence Pharmaceuticals, Inc., Evoke Pharma,
  Elevation Pharmaceuticals, DJ Pharma and Xcel
  Pharmaceuticals, Inc.
• Kurt Wheeler - Managing Director of Clarus
  Ventures, a venture capital firm
• Clarus Ventures and Domain Associates LLC led the
  60 million round for Zogenix.
• Additional investors included BA Venture
  Partners, Thomas, McNerney Partners and Life
  Science Angels Inc.

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• James Blair PhD
• board memberships include Cadence
  Pharmaceuticals, Cell Biosciences, Five Prime
  Therapeutics, GenVault, NeuroPace, Novacea and
  Pharmion.
• served as a director of over 40 life sciences
  ventures
• Louis Bock - Managing Director of Scale Venture
  Partners, a venture capital firm
• Alex Zisson - Partner at Thomas, McNerney
  Partners.
• Roger Hawley - Chief Executive Officer and
  Director
• Stephen Farr PhD - President and Chief Operating
  Officer
• he played a key role in identifying and acquiring
  the DosePro technology

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Follow the Cash

• http//www.secinfo.com/dVut2.t335.htm - 1stPage

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Effective Doses

• At marketed doses, all oral triptans are
  effective and well tolerated. Differences among
  them are in general relatively small, but
  clinically relevant for individual patients.
  Rizatriptan 10 mg, eletriptan 80 mg and
  almotriptan 12.5 mg provide the highest
  likelihood of consistent success. Sumatriptan
  features the longest clinical experience and the
  widest range of formulations. All triptans are
  contra-indicated in the presence of
  cardiovascular disease.
• Current triptan retail prices (per unit) include
  Amerge 1 and 2.5 mg, 17.78 dollars Axert 6.25
  and 12.5 mg, 16.31 dollars Frova 2.5 mg, 13.89
  dollars Imitrex 50 mg, 14.96 dollars Imitrex
  100 mg, 14.41 dollars Imitrex Nasal Spray 20 mg,
  21.61 dollars Imitrex SQ 6 mg, 50.26 dollars
  Maxalt 5 and 10 mg, 15 dollars Maxalt-MLT 5 and
  10 mg, 15 dollars Relpax 40 mg, 13.58 dollars
  Zomig 2.5 mg, 13.67 dollars Zomig 5 mg, 15.89
  dollars Zomig-ZMT 2.5 mg, 13.67 dollars and
  Zomig-ZMT 5 mg, 15.89 dollars.
• The mean therapeutic gain with subcutaneous
  sumatriptan 6mg (51) was more than that for all
  other dosage forms of triptans (oral sumatriptan
  100mg 32 oral sumatriptan 50mg 29 intranasal
  sumatriptan 20mg 30 rectal sumatriptan 25mg
  31 oral zolmitriptan 2.5mg 32 oral
  rizatriptan 10mg 37 oral eletriptan 40mg 37
  oral almotriptan 12.5mg 26). Compared with oral
  sumatriptan 100mg (32), the mean therapeutic
  gain was higher with oral eletriptan 80mg (42)
  but lower with oral naratriptan 2.5mg (22) or
  oral frovatriptan 2.5mg (16). The few direct
  comparative randomised clinical trials with oral
  triptans reveal the same picture. Recurrence of
  headache within 24 hours after an initial
  successful response occurs in 30 to 40 of
  sumatriptan-treated patients.