Contents:

Chapter 1 Executive summary Scope of the analysis 3 Overview of Pipeline Insight: NSCLC 3 Insight into the NSCLC market 4 The expanding elderly and female-smoking populations will drive the NSCLC market to become an even greater lucrative opportunity for Pharma 4 Avastin’s blockbuster status gained by 2012 will ensure that Genentech/Roche dominate the key late-stage pipeline NSCLC 2015 market worth over $5.8bn 5 The EGFR monoclonal antibodies Erbitux and ABX-EGF will compete head-to-head over the coming years 6 The future for immunotherapeutics is uncertain due numerous regulatory, clinical and commercialization hurdles 8 Chapter 2 Pipeline overview and future focus Pipeline overview: there are over a dozen NSCLC candidates in late- stage development 23 Almost half of the NSCLC pipeline candidates are targeted therapies 29 Signal transduction inhibitors dominate the pipeline with the vast majority in Phase II trials 30 Over 100 companies are currently involved in the NSCLC pipeline 31 Top three companies in terms of marketed & pipeline NSCLC products 31 AstraZeneca under pressure due to Iressa problems 31 Eli Lilly’s heavy R&D investment finally pays dividends 33 Genentech’s oncology product portfolio continues to grow from strength to strength 36 Chapter 3 Pipeline dynamics Definition of NSCLC is based upon three parameters 38 Non-small cell lung cancer (NSCLC) accounts for over 75% of all lung cancers 38 Three major types of NSCLC exist 39 Squamous cell carcinoma is associated with relatively good prognosis 39 Adenocarcinoma: the most prevalent form of NSCLC today 39 Large cell carcinoma is often advanced at the time of diagnosis 40 Segmentation of NSCLC is usually based on the AJCC’s TNM staging system 41 TNM classification and stage are key determents of physician treatment choice 42 Epidemiology of NSCLC 43 The NSCLC death rate now exceeds that of breast, prostate, colon cancers combined 43 Three major treatment approaches are used to currently manage NSCLC 48 Surgical resection offers the greatest potentially curative option 48 Radiation therapy is considered a potential cure for stage I–II patients 49 Chemotherapy plays a major role for the majority of NSCLC patients 50 First-line cytotoxics: 30 years on, they still remain the forefront treatment of advanced NSCLC 50 Second- and third-line NSCLC: drug options have expanded over the past decade 51 NCCN recommends, yet to be approved, Avastin as a first-line treatment 51 Neoadjuvant and adjuvant chemotherapy is used to destroy micrometastases 54 Adjuvant chemotherapy: platinum-based doublets offer limited survival benefit 54 Neoadjuvant chemotherapy undergoing investigation in stage IB–II patients 54 Thirty years on: the optimal drug regimen remains unknown and survival poor 55 Unmet needs in NSCLC are significant 55 Five-year survival rates have failed to improve despite advances in drug development 56 A first-line agent with reduced toxicity is urgently needed 58 Despite forming approximately 65% of all patients, suitable therapeutics for the elderly remain elusive 59 Effective second-line therapy needed for half of all chemotherapeutically treated patients 61 Bronchioalveolar carcinoma and adenocarcinoma patients are underserved 61 Stage IIIA patients: a missed commercial opportunity 61 Adjuvant and neoadjuvant treatments need defining and improving 62 Development of a chemo-preventative has considerable oncologist interest 62 Chapter 4 R&d approach The NSCLC pipeline is divided into four major drug groups 63 Cytotoxic drugs lack specificity 63 Optimizing current treatment strategies is paramount 64 The emergence of targeted treatment heralds a revolution in cancer pharmacotherapy 64 Signal transduction inhibitors destroy target pathways leading to tumor proliferation 65 Angiogenesis inhibitors target tumors by reducing vascular blood supply 65 Apoptosis inducers: taking advantage of programmed cell death 65 Cell cycle inhibitors have recently been the focus of cancer research 66 Multi- tyrosine kinase inhibitors are growing in importance 66 Antisense oligonucleotide uses DNA technology to create highly specific therapeutics 67 Immunotherapy-based treatments: a novel highly specialized anti tumor group 67 A small number of agents have miscellaneous modes of action 68 Clinical trial design in NSCLC is becoming increasingly more important 68 Optimal patient selection is vital for successful development of targeted therapies 69 Clinical trials must allow sufficient follow-up time to establish true clinical benefit 70 Adjuvant and neo-adjuvant trials prove problematic to design 70 The choice of comparator drugs is becoming increasingly complex 71 Clinical trial endpoints in NSCLC 72 Survival: the key endpoint of NSCLC trials 72 Tumor response rate: an intermediate endpoint often overlooked 73 Time to tumor progression is becoming increasingly popular 74 Toxicity is a key issue with many NSCLC agents myelosuppression activity 74 Quality of life: a secondary endpoint with major importance in the palliative setting 75 Standardized oncology vaccine endpoints remain undetermined 76 Chapter 5 Molecular targeted therapies late-stage drug analysis and forecasts Numerous molecular targeted therapies are in late-stage NSCLC development 77 Definition of current comparator therapy 78 Tarceva: MTT current comparator therapy 78 Tarceva improves overall survival by 37% to 6.7 months 79 Five percent of Tarceva’s patients withdraw from treatment due to toxicities 80 AstraZeneca’s Iressa (gefitinib): Tarceva’s major MTT competitor 81 Iressa fails crucial ISEL trial 82 EGFR mutations linked to Tarceva’s and Iressa’s efficacy 82 Secondary-resistance also linked with mutations 83 Bad news for Iressa as the FDA demands label change… 83 ...but excellent news for Tarceva 84 Genentech/Roche’s Avastin (bevacizumab) 85 Profile 85 Avastin: the first anti-angiogenic agent to gain approval 85 Positive clinical trial data announced at ASCO 2004 and 2005 86 Avastin first-line Phase II trial data shows almost 18 month survival duration 87 Avastin’s first-line Phase III trial demonstrates 61% improvement of progression-free survival 88 Second-line Avastin Phase I/II trial holds promise 89 Avastin’s patient potential is approximately 40-50% of all advanced NSCLC patients 90 Genentech/Roche’s experience must be used to persuade Avastin is safe 92 ImClone/Bristol-Myers Squibb/Merck KGaA’s Erbitux (cetuximab) 92 Profile 92 Erbitux: the EGFR monoclonal antibody is involved in numerous ongoing NSCLC trials 92 Clinical trial data 94 First-line Phase II Erbitux trials show interesting data for the under 60 age group of NSCLC patients 95 Erbitux second-line Phase II data have examined both monotherapy and doublet therapy 97 Erbitux adjuvant therapy Phase II data is limited 98 Erbitux has an impressive patient potential… 98 …but this could be negatively impacted by the agents price 99 Onyx Pharmaceuticals/Bayer’s Nexavar (sorafenib) 100 Profile 100 Nexavar: the first oral multi-tyrosine kinase inhibitor to reach the market 100 Clinical trial data 101 Nexavar’s results from second-line NSCLC specific clinical trials are encouraging 102 Nexavar NSCLC non-specific second-line clinical trial demonstrates over six month disease stabilization in 16% of patients 103 Nexavar’s patient potential could reach almost 53,000 advanced patients in today’s seven major markets 103 The fast progression of Nexavar is impressive 104 Pfizer’s Sutent (sunitinib) 104 Profile 104 Sutent: the first therapeutic to be awarded dual FDA approval 104 Clinical trial data is extremely limited 105 Sutent’s patient potential could be limited by Flt-3 resistance 106 Sutent’s NSCLC development could be a risk to Pfizer 106 Telik’s Telcyta (TLK286, canfosfamide) 107 Profile 107 Telcyta: a small molecule prodrug with dual anti-tumor activity developed using Telcyta’s TRAP technology 107 Clinical trial data 109 First-line Telcyta interim results show promise 110 Second- and third-line Telcyta results show co-administration with cytotoxics is required 110 Telik was unfortunate to use Iressa as a comparator in Telcyta’s ASSIST-2 trial 111 Telik may struggle to commercialize Telcyta 112 Ligand Pharmaceuticals’ Targretin (bexarotene) 112 Profile 112 Drug overview 112 Clinical trial data 113 SPIRIT Phase III results prove doubtful 114 Targretin and Tarceva combined second-line Phase I toxicity results are a cause for concern 114 Targretin’s patient potential could be significantly reduced due to cholesterol-raising action 115 Targretin’s looming patent expiry may be too great a threat for Ligand Pharmaceuticals 115 Millennium Pharmaceuticals/Johnson & Johnson’s Velcade (bortezomib) 116 Profile 116 Velcade: the first ubiquitin proteosome reversible enzyme inhibitor in development 116 Clinical trial data 117 Velcade first-line trial interim data finds an 11-month survival period 118 Velcade second-line studies hold a degree of hope 119 Toxicity profile may hamper Velcade’s patient potential 122 Millennium Pharmaceuticals must rely upon Johnson & Johnson for Velcade’s success 122 Amgen’s ABX-EGF (panitumumab) 123 Profile 123 ABX-EGF: a fully humanized monoclonal antibody targeting first- and-second line NSCLC 123 Phase II data shows outstanding toxicity profile 123 ABX-EGF is set to compete well with Erbitux 123 Amgen must competitively price ABX-EGF 124 Pfizer’s AG-013736 125 Profile 125 AG-013736: Pfizer’s second oral multi-tyrosine kinase inhibitor 125 NSCLC clinical trial data is extremely limited 125 A lack of data proves difficult to determine AG-013736’s patient potential 126 AG-013736 may follow in the footsteps of Sutent’s RCC development 126 Four other MTT drugs are in NSCLC late-stage development 127 Æterna Zentaris’s Neovastat (Æ-941) 127 Neovastat: a compound from shark cartilage with multiple mechanisms of action 127 NCI’s Data and Safety monitoring Board terminate Phase III patient recruitment 128 AstraZeneca’s Zactima (vandetanib ZD6474) 128 Zactima Phase II trials still continue 129 OXiGENE’s Combrestatin (CA4P) 129 Clinical data demonstrates Combrestatin to prolong survival to almost a year 130 Yantai Medgenn’s Endostar (YH-16) 131 Endostar’s Phase III data shows significant clinical benefit 131 Comparison of key molecular targeted therapies 133 Avastin looks set to dominate the NSCLC market becoming a blockbuster by 2012 133 Molecular targeted therapies drug assessment finds Avastin compares well to Tarceva and is of relatively low commercial risk 136 Chapter 6 Cytotoxics late-stage drug analysis and forecasts Just four cytotoxics are in late-phase NSCLC development 140 Pipeline summary 140 Non-reformulated cytotoxics 141 Definition of current comparator therapy 141 Gemzar: Our non-reformulated cytotoxic current comparator therapy 141 Gemzar in combination with cisplatin improves patient overall survival to 8.6 months 142 As a consequence of Gemzar’s elusive optimal dosing regimen, two schedules are recommended 143 Myelosuppression is Gemzar’s usual dose-limiting toxicity 144 Pierre Fabre/Bristol-Myers Squibb’s Javlor (vinflunine) 146 Profile 146 Javlor: a vinca alkaloid undergoing European Phase III NSCLC trials 146 Clinical trial data 146 First-line results improves disease control by 77% for stage IIB, III and IV NSCLC patients 147 Second-line trial demonstrates encouraging survival data 148 Javlor patient potential is too early to determine 149 Pierre Fabre was wise to choose Bristol-Myers Squibb over GlaxoSmithKline as Javlor’s marketing partner 149 Reformulated cytotoxics 150 Definition of current comparator therapy 150 Taxotere: Our reformulated cytotoxic current comparator therapy 150 First-line Taxotere shows survival of over 11 months 151 TAX-317 trial of second-line Taxotere finds agent significantly improves survival to 7.5 months and progression- free survival to over three months 152 Taxotere is associated with fatalities and thus carries a warning label 153 Cell Therapeutics’ Xyotax (polyglutamate paclitaxel) 155 Profile 155 Drug overview 155 Clinical trials 156 STELLAR studies prove exciting news for advanced, pre-menopausal poor performance NSCLC women 157 Xyotax Phase II PGT-202 data shows promise for non-PS2 patients 159 A range of problems looks set to reduce Xyotax’s patient potential 160 Cell Therapeutics’ limited presence within the EU and US could limit Xyotax’s revenues 161 IVAX’s Xorane (paclitaxel poliglumex) 162 Profile 162 Xorane: an oral cremophor formulation of paclitaxel 162 Phase II data shows Xyotax leads to a six month survival period 162 Xorane’s patient potential is limited due to the targeting of PS2 NSCLC patients only 164 The ongoing merger of IVAX and Teva could prove vital for Xyotax’s future 164 Sonus’ Tocosol (paclitaxel) 164 Profile 164 Tocosol: a vitamin-E based formulation of paclitaxel 164 Clinical trial data 165 Tocosol has a favorable toxicity profile 167 Tocosol’s true patient potential is difficult to assess due to a dearth of survival data 167 Schering AG could raise Tocosol’s profile 167 Comparison of key cytotoxics 168 Javlor is anticipated to become the leading cytotoxic of those in late-stage NSCLC development 168 Our drug assessment model shows Xorane and Javlor have similar research, clinical and commercial potential 170 Chapter 7 Immunotherapies late-stage drug analysis and forecasts Overview for immunotherapies 173 With three immunotherapies in late-stage NSCLC development this reflects the difficulties of commercializing this group of agents 173 As a novel group there is no current immunotherapy comparator agent 173 Aphton Corporation’s IGN-101 174 Profile 174 IGN-101 vaccine targets EpCAM found on 70% of all tumors 174 Phase II clinical trials demonstrate vaccine immunogenicity but show limited survival benefit 174 IGN-101’s patient potential will be determined by ongoing data 175 Aphton’s acquisition of Igeneon may help drive development of IGN-101 175 Coley Pharmaceuticals/Pfizer’s ProMune (CpG-7909) 175 Profile 175 ProMune: the first targeted toll-like receptor agonist 175 ProMune Phase II data finds immunotherapeutic extends survival to almost one-year 176 ProMune has a good patient potential thanks to a favorable dosing regimen 177 Pfizer partnership will aid Coley in the commercialization of ProMune 178 Novelos’s Glutoxim (NOV-002) 178 Profile 178 Glutoxim: a stabilized formulation of oxidized glutathione 178 Phase I/II data is limited due to inadequate patient enrollment 178 If Phase III data repeats the 80% improvement over standard cytotoxics then Glutoxim could enjoy a significant patient potential 180 Novelos’s lack of commercialization partner could see Glutoxim struggle on the NSCLC market 180 Comparison of key immunotherapies 180 Difficulties in the commercialization of immunotherapies account for low sale forecasts 180 Immunotherapies drug assessment 182 APPENDIX A Methodology 185 Epidemiology forecasts 185 Product forecasts 185 Contributing experts 189 Opinion Leader 1 189 Opinion Leader 2 193 Opinion Leader 3 199 Bibliography List of Tables List of Figures 229

Companies Mentioned

AstraZeneca Eli Lilly Genentech Roche ImClone Bristol-Myers Squibb Merck KGaA Onyx Pharmaceuticals Bayer Pfizer Profile 104 Telik Ligand Pharmaceuticals Millennium Pharmaceuticals Johnson & Johnson Amgen Yantai Medgenn Endostar Pierre Fabre IVAX Sonus Sc