APRIL 2014
BY PEOPLE. WITH PEOPLE. FOR PEOPLE.
*
Epigenetics: Each and every human cell contains specific genetic information. What happens to a cell is determined by the way this information is processed. Epigenetics is the key to controlling this process. 4SC is one of the pioneers in this field of science. We develop epigenetic anti-cancer drugs.4SC
COMPANY PRESENTATION
AMSTERDAM
FORWARD LOOKING STATEMENTS
The information contained in this presentation includes forward-looking statements. Any forward-looking statement applies only on the date of this presentation. By their nature, forward-looking statements are subject to a number of known and unknown risks and uncertainties that may or may not occur in the future and as a result of which the actual results and performance may differ substantially from the expected future results or performance expressed or implied in the forward looking statements. No warranties or representations are made as to the accuracy, achievement or
reasonableness of such statements, estimates or projections, and 4SC AG has no obligation to update any such
information or to correct any inaccuracies or omission which may become apparent. Neither 4SC nor the management, the directors, employees, agents or advisers of 4SC make any representation or warranty, expressed or implied as to the accuracy or completeness of the information contained in this presentation, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future.
This presentation does not constitute an offer or invitation for the sale of securities of 4SC AG or any interest therein in any jurisdiction and is not intended to provide the basis for any credit, investment or other evaluation or decision.
Important information for the United States: This presentation is only being made available to interested parties on the basis that: (A) if they are United States persons, they are “accredited investors” as defined under Rule 501(a)
promulgated under the United States Securities Act of 1933, as amended; or (B) they are outside the United States (all such person collectively being referred to as “Relevant Persons”). By accepting this document you represent and warrant that you are such a person. This presentation must not be acted on or relied on, and should be returned to 4SC AG, by persons who are not Relevant Persons. Any investment or investment activity to which this presentation relates is available only to Relevant Persons and will be engaged only with Relevant Persons.
APRIL 2014
OUR VISION – DEVELOP RESMINOSTAT TOWARDS
APPROVAL IN BLOCKBUSTER INDICATION HCC
3
OUR VISION FOR
RESMINOSTAT
Blockbuster potential
in 1
stand 2
ndline HCC
(potential peak sales
of > €1 billion)
Promising Phase IIa
efficacy & biomarker
data
Phase II programme
currently in
preparation, to be
followed by Phase III
Phase I/II trial by
Yakult in 1
stline HCC
in Japan underway
(started May 2013)
MARKET
APPROVAL
DEADLY DISEASE
3
rdleading cause of cancer-related mortality
~700,000 deaths/year
NEXAVAR: ONLY TREATMENT
Only one approved 1
st-line therapy for
advanced HCC: Sorafenib (Nexavar
®)
HIGH NEED:
1
ST& 2
NDLINE TREATMENT
No approved 2
nd-line therapy
LIVER
CANCER
COMMERCIALISATION &
VALUE GENERATION
4SC CORPORATE STRUCTURE & BUSINESS MODEL
4SC GROUP CORPORATE STRUCTURE
4SC AG
Key focus on developing epigenetic
cancer therapies towards the market
4SC Discovery GmbH
Commercialising early-stage
drug discovery in epigenetics, cancer
stem cells and inflammation
Pharma partnerships:
Joint development towards approval
Upfront payments
Milestone payments
Royalties
Discovery Partnerships:
Upfront, milestone & royalty payments from early partnering deals
Constant revenue from research collaborations
Replenishing 4SC‘s clinical pipeline
Financing contribution through
revenues from service collaborations
Long-term value generation from early-stage pharma partnerships
APRIL 2014 5
STRONG FUNDAMENTAL MARKET DRIVERS FOR 4SC
HIGH MEDICAL NEED AND LARGE MARKET POTENTIAL CHALLENGES FOR BIG PHARMA
Urgent need for new drugs to compensate for sales reductions due to patent ends
Massive R&D spending cuts offer chances for research-orientied biotechs to fill the gap
CANCER
Global oncology market to grow from
today US$ 60 bn to US$ 88 bn in 2016 (IMS Health)
Blockbuster indication liver cancer (HCC)
AUTOIMMUNE DISEASES
IBD (Crohn‘s disease & ulcerative colitis): 4 mn patients are expected by 2016 worldwide. Very limited treatment options available.
MEGATREND PERSONALISED MEDICINE MEGATREND EPIGENETICS
Epigenetics: linking the genotype with the phenotype
GEN (Oct. 15, 2012): Market for epigenetic cancer drugs expected to grow from US$ 800 mn (2011) to US$ 8 bn (2017)
Selection and stratification of patients with a
particular benefit from a certain therapy, according to certain genes or biomarkers
Increasing demand from regulatory authorities, health insurers, and pharma companies
* Source: (Jennifer Cropley, Victor Yang, Cardiac Research Institute)
Product Indication Research Preclinical Phase I Phase II Phase III Partner ONCOLOGY
Resminostat Hepatocellular Carcinoma (HCC) (Western)
Resminostat HCC (Asia) *
Resminostat Hodgkin’s Lymphoma (HL)
Resminostat Colorectal Cancer (CRC)
Resminostat Solid Tumours *
Resminostat Non-small-cell lung cancer (NSCLC) *
4SC-202 Haematological Tumours
4SC-205 Solid Tumours
AUTOIMMUNE AND INFLAMMATION Vidofludimus Inflammatory Bowel
Disease (IBD)
1st line HCC programme in preparation
Complete Phase I studies, for later partnering / Phase II
Seek external part-ner for Phase IIb
Key Focus
*) Study performed by Yakult Honsha in Japan
EARLY-STAGE DRUG DISCOVERY COLLABORATIONS & PARTNERSHIPS BY 4SC DISCOVERY INCLUDING
Study completedAN ATTRACTIVE VALUE-FOCUSED CLINICAL PIPELINE
APRIL 2014
:: BY PEOPLE. WITH PEOPLE. FOR PEOPLE
7
RESMINOSTAT
RESMINOSTAT
RESMINOSTAT: YAKULT HONSHA DEAL FOR JAPAN
Yakult Honsha is a leader in gastro-intestinal oncology in Japan, spearheaded by
blockbusters irinotecan and oxaliplatin.
Japanese oncology market accounts for c. 10-12% of global oncology market
Upfront payment of €6m Up to €127m in milestone payments Double-digit royalties linked to product sales
APRIL 2014
5
thmost common cancer disease worldwide
3
rdleading cause of cancer-related mortality (~700,000 deaths/year)
High unmet medical need
•
Only 1 approved 1
stline therapy for advanced HCC: Sorafenib (Nexavar
®)
•
No approved 2
ndline therapy for advanced HCC
Blockbuster indication
ESTIMATED NEW LIVER CANCER CASES
(TOP 29 w/o Japan)
Source: Globocan
EXPECTED HCC MARKET DEVELOPMENT
(w/o China)
Source: Data Monitor
9
RESMINOSTAT –
LARGE OPPORTUNITY IN LIVER CANCER (HCC) MARKET
606 T 637 T 719 T
809 T 904 T
1000 T
2008 2010 2015 2020 2025 2030
4SC expects peak sales potential of > €1 billion for resminostat in 1
stand 2
ndline HCC
The combined value of hepatocellular cancer(HCC) drugs in the US, Japan and five major EU markets will peak at $1.4bn in 2019.
2012 2013 2014 2015 2016 2017 2018 2019
THERAPEUTIC EFFECTS THROUGH COMBINATION WITH STANDARD CANCER THERAPIES4
KREBSMEDIKAMENTEN RESISTENT
MONOTHERAPEUTIC EFFECTS
RESMINOSTAT MODE OF ACTION:
MULTIPLE WAYS OF EPIGENETIC HCC TARGETING
Epigenetic (Re)Programming
Induction of growth arrest, apoptosis1
Inhibition of key tumour signalling pathways (e.g. NOTCH, WNT)
Inhibition of EMT, metastasis, tumour progression, stemness2,3
HCC cells
1 Mandl-Weber et al., Br.J.Haematol.2010;149:518-28; 2 van Zijl et al., 2009; 3 van Malenstein et al., 2012; 4 Sharma et al.,2010
SENSITIVE TOLERANT Epigenetic modifications (reversible) HDAC inhibition via resminostat Genetic alterations Irreversibel Resminostat Reversible Standard cancer drugs
Various Mutations
Resminostat targets HCC through inhibition of tumour progression & metastasis
1,2,3as well
APRIL 2014
BSC
11Sorafenib
4.7 months
Standard
Treatment:
Sorafenib
(1st line)
1Resminostat
/
Sorafenib
Combination
(2nd line)
21 SHARP STUDY: Llovet et al., 2008; 2 SHELTER STUDY: Bitzer et al., ILCA 2012
BSC
8.1 months survivalafter first progression2
+2.9 Months Resminostat 2nd line overall survival benefit
Placebo + Best Supportive Care (BSC)
Placebo
(1st line)
1Sorafenib
Resminostat
+ Sorafenib
10.7 Months Overall Survival 7.9 Months Overall Survival
5.5 months until disease progression under 1st
line sorafenib 1
Cumulated 13.6 Months Overall Survival
RESMINOSTAT: SIGNIFICANT SURVIVAL BENEFIT OVER
STANDARD OF CARE IN 2
NDLINE HCC INDICATED
+2.7 Months Sorafenib 1st line overall survival benefit
Resminostat stabilises the disease and prolongs overall survival of second-line HCC
patients by approximately 3 months compared to standard of care.
NICD
NOTCH
ZFP64 Nuclear membrane b-Catenin TCF/LEFHEDGEHOG
GLI GLIWNT
Cell membrane b-CateninWnt
Resminostat 4SC-202 4SC-202 Resminostat 4SC-202 Resminostat 4SC-202TARGETED REPROGRAMMING OF CANCER BY
EPIGE-NETIC DISRUPTION OF MAJOR CANCER NETWORKS
HH
TCF/LEF
Biomarker ZFP64
down regulated
by resminostat
Several pathways control cell proliferation & migration (EMT), angiogenesis, metastasis,
AND cancer stemness
APRIL 2014
Baseline ZFP64 gene expression split –
HIGH vs. LOW expression
PERSONALISED MEDICINE: BIOMARKER ZFP64 INDICATIVE
OF DOUBLING OVERALL SURVIVAL IN HCC & HL
13
PHASE II SHELTER STUDY IN HCC (n=31) PHASE II SAPHIRE STUDY IN HL (n=30)
Split: 65% high / 35% low ZFP64 expression
Split: 60% high / 40% low ZFP64 expression
relative ZFP64 expression low high p = 0.04 relative ZFP64 expression low high p = 0.04
High baseline ZFP64 expression in blood samples is indicative of doubling overall survival
with resminostat.
UPCOMING VALUE INFLECTION POINTS
FOCUS ON HCC 1
STLINE TREATMENT
Performing a stepwise HCC 1
stline clinical development offers ideal starting point for risk
adjusted phase III with already validated biomarker ZFP64
2014 2015 2016 2017 2018 2019 2020
1st line HCC
Market Approval Phase II 1st line HCC,
placebo controlled, randomized
Phase III 1st line HCC
EU and US Full biomarker validation (ZFP64, DCP) IND, CMC Phase I/II , ~140 pts, TTP Japan, Korea, randomized
Phase III , OS Japan/Asia
Active, recruiting
APRIL 2014
HEMATOLOGY
UROLOGY
OTHER MAJOR
INDICATIONS
GASTRO-ENTEROLOGY
RESMINOSTAT: TARGETING CANCER BROADLY
Hepatocellular
(ZFP64 high)
Phase IIa completed1Phase II/III in preparation1
Phase I/II (Yakult)1
Esophagus
Stomach
Colorectal
Phase I completed2Hodgkin‘s Lymphoma
(ZFP64 high)
NHL
Phase IIa completed3
Prostate
Bladder
NSCLC
Breast
Phase I/II (Yakult)4
Scientific rationale and preclincal data support development of resminostat in combination
therapy with classical cancer drugs in a broad variety of potential cancer indications.
15 1 combination with sorafenib; 2 combination with FOLFIRI; 3 monotherapy; 4 combination with docetaxel
:: BY PEOPLE. WITH PEOPLE. FOR PEOPLE
NEXT GENERATION CLINICAL PROGRAMMES
4SC-202:
selective HDAC inhibitor targeting WNT & HH
4SC-205:
oral EG5 inhibitor
Vidofludimus:
APRIL 2014
Next generation epigenetic in clinical development
Selective inhibitor of LSD1 (KDM1A), HDAC1, 2 and 3 modulating WNT & Hedgehog (HH) pathways
Oral available small molecule inhibitor
Currently in clinical hematologic phase I TOPAS trial
Treatment of cancer stem cells offer opportunities for all kinds of
Combination therapies
Adjuvant and neo-adjuvant therapy
Attractive clinical potential in various haematological & solid tumours going forward
Targeting long-term survival and quality of life of cancer patients
17
4SC-202 – NOVEL EPIGENETIC APPROACH
TARGETING CANCER STEM CELLS
Conventional
Chemotherapy / Radiation
Long-term clinical
benefit and
improved OS
4SC-202 treatment
EPIGENETIC CANCER CANDIDATE 4SC-202: COMPLETE
RESPONSE SEEN IN CURRENT PHASE I STUDY
PATIENT, AT ENTRY PATIENT, AFTER 6 WEEKS OF TREATMENT
Promising clinical efficacy signals seen in preliminary Phase I data (complete response in AITL patient)
Good PK properties, biomarker response seen already at low doses, safe and well tolerated
Data of current Phase I study in haematological tumours expected in H1 2014
P ati en t : m al e, born 1943 , angi oi m m unob last ic T -cel l ly m phom a
APRIL 2014 19
4SC-205 – A NOVEL ORAL ANTI-MITOTIC DRUG IN
PHASE I PROGRAMME IN SOLID TUMOURS
Valentine, Fordyce and Block, Cell Division 1:31 (2006)
Monoaster formation upon Eg5 inhibition
Overview
4SC-205: small molecule Eg5 inhibitor and the only orally
administered Eg5 inhibitor in clinical development
Potentially a break-through for antimitotic cancer treatments
About EG5 – a promising cancer target
Kinesin Eg5 motor protein is essential for separation of
spindle poles during mitosis
It is exclusively expressed during mitosis in dividing cells
Side efects (e.g. peripheral neuropathies) as seen with other
spindle targeting drugs (taxols) not expected for Eg5 inhibition
Current clinical development status
Phase I “AEGIS“ study (data expected in mid 2014)
Safe and well tolerated to date with excellent PK properties
Amended for testing of a new innovative treatment schedule
Oral, once daily tablet
Mode of action
•
Targeted therapy
– strong IL-17 (IL-17A & F)
and IFN-gamma cytokine suppression
•
Validated
– inhibition of DHODH
Strong preclinical data in MS, lupus,
psoriasis, transplant rejection etc.
Strong clinical Phase IIa data in lead indication
IBD (Crohn’s disease, ulcerative colitis)
• Clean safety & tolerability
• Encouraging activity: 88.5% response rate
IBD: high market potential & medical need:
• Market forecast to grow: $ 5.7 bn. by 2019
• Patient population forecasted 4 million by 2016
Currently seeking project & financing partner for further external development
• Planned next step: Start Phase IIb study in Crohn’s disease
DUAL MODE OF ACTION OF VIDOFLUDIMUS (4SC-101)
VIDOFLUDIMUS: TARGETED IMMUNE MODULATOR IN
APRIL 2014 21
4SC DISCOVERY GMBH
Commercialisation of early-stage research as a
financing contribution and for long-term value creation
: : BY PEOPLE. WITH PEOPLE. FOR PEOPLE.COMMERCIALISE EARLY-STAGE R&D AS A FINANCING CONTRIBUTION TO 4SC GROUP AND FOR LONG-TERM VALUE CREATION
Pharmacology Biology Medicinal chemistry Computational chemistry X-ray crystallography In vitro screening In silico screening
ALL CRUCIAL DISCOVERY STEPS IN HOUSE
KEY FACTS
4SC DISCOVERY – AT A GLANCE
Fully-owned subsidiary of 4SC AG
Start of operations in 2012
26 researchers
strategic alliance with CRELUX GmbH, Munich
is aiming to be a leading partner of pharmaceutical industry for innovative drug discovery in the fields of epigenetics, cancer stem cells and inflammation.
Early-stage partnering deals with biotech & pharma for co-development and commercialisation of own discovery assets
Research collaborations with biotech & pharma
APRIL 2014
4SC DISCOVERY: STRONG TRACK RECORD
23
STRONG DISCOVERY AND
PARTNERING TRACK RECORD
APRIL 2012
Formed “i2c” - a strategic partnership for structure based drug discovery with CRELUX
Research collaboration with Henkel
NOVEMBER 2013
Research collaboration with AiCuris
DECEMBER 2012 / JANUARY 2013
Licencing deal with BioNTech in cancer immune therapy
(€2.5m upfront payment, further milestone potential plus royalties)
Broad research collaboration in oncology
SEPTEMBER 2013
Partnership with Panoptes for autoimmune uveitis incl. equity stake
FEBRUARY 2013
Exclusive licence option agreement with LEO Pharma for psoriasis
(€1m upfront payment, €95 m milestone potential plus royalties) JUNE 2013
4SC DISCOVERY: LEO PHARMA LICENSE (OPTION)
DEAL & RESEARCH COLLABORATION IN PSORIASIS
PSORIASIS
Upfront payment €1m Up to €95m in milestone payments Up to double-digit royalties based on product salesLeo Pharma S/A (Denmark) is a leading specialty pharma player specialised in dermatology.
Both companies will co-develop 4SC discovery’s cytokine modulation programme as a
novel potential breakthrough therapy in psoriasis.
APRIL 2014 25
FINANCIAL OVERVIEW
IN M €
KEY FINANCIAL FIGURES AND CASH REACH
4.9 -10.5 -7.2 4.9 17.7 4.4 -13.2 -15.1 12.1 29.1
Revenue Profit/loss for the period
Operative Cashburn Funds Balance sheet total
2013 2012
2013
Revenue increased by 13% year-on-year
Costs decreased
Operating result considerably improved
Cash Burn significantly reduced
Funds: 4.9 m € (31 Dec. 2013)
Average cash burn 2013 reduced by 50%
to 0.6 m€ / month; expected to decrease
further in 2014 (not including new clinical
trials)
Cash reach through the next 12 months
secured (as of 26 March 2014)*
APRIL 2014
SHARE AND SHAREHOLDERS‘ STRUCTURE*
27
Ø NUMBER OF SHARES TRADED PER DAY
XETRA ALL ** 2010 10,050 14,449 2011 26,307 43,221 2012 30,434 56,713 2013 18,179 37,060 2014 (YTD 21 March 2014) 29,909 65,204
ANALYSTS DATE TARGET PRICE / RECOMMENDATION
Edison 14.11.2013 2.41 €
equinet 07.11.2013 3.60 € (BUY) Kempen 09.01.2014 1.60 € (HOLD)
* Based on management estimates ** All German exchanges plus Tradegate
Prime Standard Listing (FSE:VSC)
No. of shares outstanding: 50,408,654 (26 Mar. 2014)
“Free Float“ acc. to Deutsche Börse: 30.3%
Backing by family offices and experienced life science investors SHAREHOLDERS in % Others: 24.7 Founders & MGMT: 1.2 Santo Holding: 48.1 Roland Oetker: 4.2 Heidelberg Capital: 5.9 FCP: 9.6 DVCG / VCG: 6.1
12 Feb 2014: Convertible notes agreement with Yorkville for up to 15 m € nominally until 31 Dec. 2016
REACHED AND UPCOMING VALUE INFLECTING
MILESTONES
ATTRACTIVE GOALS AHEAD
Execute further development of resminostat towards the market in 1st line HCC (discuss planned
development plan with authorities; ensure funding; initiate study)
Yakult Phase I/II efficacy data with resminostat in 1st line HCC (Japan)
Secure external financing for planned Phase IIb trial with vidofludimus in IBD
MILESTONES REACHED 2013
Complete Phase II resminostat HCC
Start Japanese resminostat Phase I/II in 1st line HCC (by Yakult)
Start Japanese resminostat 2nd/3rd line NSCLC (by Yakult)
Complete Phase I resminostat in CRC
Detailed biomarker data resminostat HL & HCC
4SC Discovery: service deals & early-stage partnering deals
UPCOMING MILESTONES 2014 Complete Phase I 4SC-202 in haematologic tumours Complete Phase I 4SC-205 in solid tumours Complete Phase I resminostat in solid tumours (in Japan by Yakult)
Further partnerships of 4SC Discovery
APRIL 2014
4SC INVESTMENT CASE - STRATEGY TO A MATURING
COMPANY CREATING LONG-TERM VALUE FOR INVESTORS
Strengthen
Partnering Base
Leverage
Early-Stage R&D
Biomarker-driven development of
resminostat towards market
approval in advanced HCC
Development of remaining 4SC
portfolio towards next major clinical
value inflection points
Establish partnerships for
co-development & commercialisation
of clinical assets
Augment deal track record with big
pharma/biotech partners
Commercialise 4SC Discovery
products through collaborative
business and licensing deals
Provide pharma partners and 4SC
AG with development candidates
Increase
Product Value
Becoming an
established
pharma partner
for innovative
drugs in
cancer and
immunology
1 2 3 29THANK YOU VERY MUCH !
::
:: BY PEOPLE. WITH PEOPLE. FOR PEOPLE
CONTACT
Enno Spillner, CEO & CFO
enno.spillner@4sc.com
Jochen Orlowski, Head of CC & IR
jochen.orlowski@4sc.com
APRIL 2014
Attractive business model
Discovery & development of novel small molecule drugs for unmet medical needs
Growth through clinical stage partnering
Attractive deal flow, revenue and value generation though early R&D and discovery collaborations
Corporate structure
Integrated clinical development (4SC AG) and drug discovery (4SC Discovery GmbH) organisation
56 FTEs (31 Dec. 2013)
Headquartered in Munich/Germany
Founded in 1997
Top technologies, products & markets
A leader in epigenetic cancer therapies
Attractive pipeline with four compounds in clinical Phases I & II
Lead compound resminostat in preparation of late stage programme in liver cancer (peak sales potential > €1 bn.)
Finance & Shares
Market cap ~ 69 m € (26 March 2014)
Prime Standard Listing (FSE:VSC)
50,408,654 shares outstanding (26 March 2014)
Convertible note agreement with Yorkville as of 12 Feb. 2014 for up to 15 m € nominally
Committed investor base
4SC AT A GLANCE – CORPORATE FACT SHEET
31
Novel targeted drugs for
cancer & autoimmune
diseases
4SC - FINANCIAL CALENDAR 2014
Event
Date
Annual Financial Report 2013
26 March 2014
3-Months Financial Report (Q1) 2014
8 May 2014
Annual General Meeting, Munich (Germany)
9 May 2014
Half-Year Financial Report (Q2) 2014
7 August 2014
9-Months Financial Report (Q3) 2014
6 November 2014
Analyst Conference, German Equity Forum,
Frankfurt/Main (Germany)