Title: PowerPitch Presentation
1mruszczy NEED LOGOS!!
Transition Therapeutics (TSX TTH)
Building a Sustainable Biotech Company
November 28, 2005
Western Investment Club Braga, Nensi, Co.
2Innovative Leader in New Therapies
- Business Strategy
- Mid-term value maximization ? develop
high-potential technologies - Advance compounds through Phase II
- Partner with major Pharma to develop long-term
revenue streams - Therapeutic Focus
- Diabetes ? insufficient insulin production 18
million people - Multiple Sclerosis ? failed traditional
treatments 2.5 million people - Hepatitis C ? super interferon USD 1 billion
- Alzheimers ? break-down of protein buildup 4
million patients
3Role in the Industry Value-Chain
4Experienced CEO CRITICAL
- Dr. Tony Cruz
- Top Canadian serial entrepreneur
- Strong track-record (essential in junior biotech)
- Many biotechs and Angiotech Pharmaceuticals ?100
M to 1.5 B - Senior Scientist at Mount Sinai Hospital since
1995 - President of the Canadian Arthritis Network until
2001
5Strong Network of Contacts
- Board of Directors
- Tony Cruz (Chairman) 5 members
- Experience in major pharma (Merck, Pfizer,
CIBA-GEIGY), Investment banking, Academia,
Venture capital, Law - Broad experience ? big network necessary
- Scientific Advisory Board
- - Member of the National Academy of Sciences,
Director of the Banting and Best Diabetes Center
at the Toronto General Hospital, Head of the
Muttart Diabetes Center (U. Alberta), Professor
of Microbiology, Massachusetts Institute of
Technology, Director of the Division of
Endocrinology U. Miami, Editor-in-chief of the
journal Diabetes
6Mid to Long Term Cash-Flow
- 16 million in cash _at_ burn rate of 6-8
million/year 2 years of cash - May need to refinance earlier, new
acquisition/RD (i.e. Protana) - Valuation may increase with new technologies
- Current licensing deal with Novo-Nordisk for INT
- 48 million in development milestones
- Milestones expected in 2008 onward (cash-flow
? dilution) - Additional commercial milestones royalties
(10-15) - Potential for new partners (i.e. IET) ? capital
infusion - Upfront payments milestones
7Sustainable Revenue Model
8Financial Model to 2011
9Biotech Market Time for a Renewal?
Nasdaq Biotech Index- 5 year
10TTH Valuation
11Diabetes INT GLP Technology
- E1-INT First regenerative therapy (re-grow
insulin producing cells) - GLP1-INT Best-in-Class (regulates blood glucose
levels) - Published in Nature ? top scientific journal
credibility
New Cells
TTH Technology
Diseased Cells
12MS, HEP C IET Technology
- Super-interferon
- Better results, without toxicity
- Best-in-class MS product
- Best-in-class Hepatitis C product
13Alzheimer AZD-103
- New class of Alzheimers drugs
- Reduce amyloid plaques (pathogenic)
- Oral drug ? cross blood-brain barrier
- Proven effectiveness in animal model
14Lucrative IP/Pipeline High Potential
15Fiscal 2006 Development Pipeline
Valuation explodes past Phase III (Milestones)
Late Summer 06
16INT Market Novel Therapy
Effective islet cell regeneration therapies
could redefine the treatment of diabetes by
providing patients with a therapy that has the
potential to modify the underlying cause of this
disease
Current mkt size 3.73 B Grow to 4.56 B by 2025
17MS-IET Market Growing, Best in Class
MS-I.E.T. could become an option to the many MS
patients who are losing or have lost
responsiveness to traditional MS therapies and
whose only remaining treatment alternative is
chemotherapy
2.5 million people affected Growing market older
popln
18HCV-IET Market Growing, Best in Class
Give hope to the large population of hepatitis C
patients who have failed standard treatment
regimes and face long-term life-threatening
complications of the disease
45 of patient fail treatment 0.95B market
potential
19AZD Market New Therapy
The strong preclinical efficacy data with
AZD-103 supports the potential of this compound
to alter the course of Alzheimers disease
leading to an improved quality of life for
patients and their families
Market expected to double in 20 years (US 3.1B
to 6.2B)
20Partnerships for the Future?
Hepatitis C
Alzheimer
Multiple Sclerosis
Currently, no gold-standard treatment ? untapped
market
21Risk vs. Reward
- No product yet ? hopes
- High volatility ? sentiment
- Market risk ? competitors
- Strong CEO ? credibility
- Superior pipeline IP
- Sustainable business model
22Investment Thesis
- Strong company with real business model
(critical for biotech) - Needed diversification for portfolio (higher
risk/return) - Above average prospects within biotech ?
under-valued - Strong industry to be in long-term ? currently
cheap - Buy 3,000 shares _at_ C0.78 C2,340 (2 of
portfolio) - Our valuation 2.34 using dEPS (3x
undervaluation) - 12 month price targets 1.50, 2x (Orion) ?
3.00, 4x (Dlouhy)
23Remember
Greed is Good