Stroke is one of the leading causes of death in America. Only heart disease and cancer kill more Americans. Each year in the U.S., about 700,000 people experience a new or recurrent stroke. Of the 600,000 Americans that survive a stroke each year, about 10-18% will have another stroke within a year. The rate of having another stroke thereafter is 10%. Approximately one third die, one third become disabled, and one third recover.

Because of the lack of specific pharmacological treatments for acute ischemic stroke, only a fraction of these cases were drug-treated. At present, Genentech’s Activase is the only drug approved to treat acute ischemic stroke. However, because of its mechanism of action, Activase can cause bleeding, both internally and externally. Furthermore, therapy must be initiated within three hours of stroke onset. Finally, the 2005 patent expiration for Activase creates an opportunity for new entrants in the slow-growing ischemic stroke market.

There are several mid- to late-stage drugs in the acute ischemic stroke drug pipeline. The pipeline is composed of recanalization agents that act to dissolve the clots that are causing the stroke and neuroprotection agents that act to protect neurons from damage resulting from a stroke, instead of targeting the cause of the vascular blockage. Of the major drugs in development, D-Pharm’s neuroprotective agent DP-b99 shows promise for becoming the most successful new entrant into the ischemic stroke market from the current pipeline of drugs. DP-b99 is currently in Phase IIb clinical trials in ischemic stroke patients and is projected to be approved in the U.S. in 2Q 2008. The key advantages of DP-b99 are its wider post-stroke efficacy window and its advantageous safety profile. We project a peak U.S. revenue of $85 million in 2014 for DP-b99 for ischemic stroke.

We have updated and added seven revenue models within the ischemic stroke market.

BACKGROUND

There are two types of acute stroke: hemorrhagic and ischemic. Hemorrhagic stroke occurs when a blood vessel in the brain ruptures. Ischemic stroke, the most common form, occurs when a blood vessel in the brain is blocked, usually by a clot. Either way, the result is reduced blood flow to the brain. The greater the blood flow restriction, the greater the potential for severe, permanent, or even fatal damage. Of all strokes, 88% are ischemic and 12% are hemorrhagic.

At present, Genentech’s tissue plasminogen activator (tPA; Activase) is the only drug approved to treat acute ischemic stroke. Activase binds to the fibrin in a thrombus (clot) and converts plasminogen to plasmin. The plasmin causes fibrinolysis and thus dissolves the clot. Because of its mechanism of action, Activase can cause bleeding, both internally and externally. Before patients receive Activase, they must be screened for any medications (such as anticoagulants) or conditions (such as ulcers, recent surgery, or advanced age) that could increase the risk for bleeding. They must also receive cranial CT scans to rule out hemorrhagic stroke. Furthermore, therapy must be initiated within three hours of stroke onset.

Meeting all of these criteria within such a small post-stroke efficacy window frame has been very difficult. Many patients do not even realize they are having a stroke until it is too late to receive Activase. According to a recent study published in the Archives of Neurology, only 15% of patients arrived at the emergency room within three hours of symptom onset. Only a fraction (20%) of those patients are actually treated with Activase.

DRUGS IN DEVELOPMENT – Mid Term Outlook

AstraZeneca’s Cerovive (Phase III)
Cerovive is a neuroprotectant with free-radical trapping properties that is under development by AstraZeneca and licensed from Renovis, Inc. Instead of disrupting vascular blockage, Cerovive works by protecting neurons from the damage caused by stroke. Cerovive traps free radicals released during the cascade of events that lead to neuronal death after a stroke.

On February 17, 2005, AstraZeneca announced that it would report top-line results from the SAINT I trial by the end of the 2nd quarter 2005. The company also indicated that enrollment in the SAINT II and CHANT trials are progressing on course and continue to be consistent with AstraZeneca's goal of filing for regulatory approval in 2006.

Indevus Pharmaceutical’s Citicoline (Phase III)
Citicoline is an oral neuroprotective agent with a 24-hour therapeutic window that is marketed by Ferrer in Europe and by Takeda Chemical Industries in Japan as a treatment for stroke. Citicoline appears to limit the extent of tissue damage by limiting accumulation of fatty acids (which generate free radicals) in the brain following stroke. In addition, citicoline is thought to assist in the formation of new neuronal cell membranes and increase levels of acetylcholine, a neurotransmitter associated with learning and memory functions.

Citicoline has completed three Phase III trials and one Phase II/III in ischemic stroke. An NDA was filed in December 1997, but withdrawn when an additional Phase III trial did not show efficacy in reducing infarct size compared with placebo treated patients. Two important meta-analyses of clinical trials with citicoline presented at the 27th International Stroke Conference in February 2002 suggesting that treatment with Citicoline may reduce infarct growth after stroke and reduce rates of death or disability over a long term. The first of these analyses retrospectively analyzed seven controlled trials enrolling 1,963 patients who received oral or intravenous citicoline at doses ranging from 500 to 2000 milligrams daily and showed that treatment with citicoline was associated with a significant reduction in rates of death or disability at long-term follow-up. On a combined basis across these trials, 54.6% of citicoline patients experienced death or disability, compared with 66.4% of placebo patients (p<0.00001).

The second of these analyses retrospectively analyzed data regarding infarct growth following stroke from two clinical trials in a total of 214 patients. Doses of 500 milligrams/day and 2000 milligrams/day were used in these trials. The mean volume increase in infarct size was 84.7% for the placebo group, 34.0% for the 500 milligram group and 1.8% for the 2,000 milligram group (p=0.015).

On January 16, 2004, Indevus Pharmaceuticals announced that it had defined the design and clinical endpoints of its next stroke trial following discussions with the FDA, and was seeking a corporate partnership or project-specific funding for the trial. On October 26, 2004, Indevus Pharmaceuticals, Inc. announced a licensing agreement between Grupo Ferrer and IVAX Corporation for citicoline. Under the terms of this agreement, IVAX will be responsible for fulfilling the requirements for FDA approval of citicoline for acute stroke and for commercializing citicoline in the United States. The financial terms were not disclosed.

Eli Lilly’s Reopro (Phase III)
Reopro is used with low molecular weight or unfractionated heparin and aspirin and/or clopidogrel as an adjunct to percutaneous coronary intervention (PCI) for the prevention of acute cardiac ischemic complications in patients undergoing PCI and in patients with unstable angina who have not responded to conventional medical therapy and who are scheduled to undergo PCI within 24 hours.

Reopro was approved in the 1990s for preventing cardiac ischemic events and it is now in clinical trials for stroke. Eli Lilly is hoping to prove it is effective up to 6 hours after stroke onset.

Neurobiological Technologies’ Viprinex (Phase III)
Viprinex is derived from the venom of the Malayan pit viper. This anticoagulant depletes plasma fibrinogen and has a secondary clot-breaking action. Viprinex has shown efficacy in clinical trials when administered within 6 hours of stroke.

On July 15, 2004, Neurobiological Technologies announced that it has acquired Empire Pharmaceuticals. As part of the transaction, NTI acquired the exclusive worldwide rights to Viprinex. Currently the drug is in Phase III clinical trials with the current objective of finding a revised Viprinex dosing strategy. This comes after an U.S. Phase III study that showed Viprinex to be effective in preserving neurological function in 500 patients who were given the drug within three hours after the onset of acute, ischemic stroke. However, a European trial with higher dosing levels, had to be stopped after a planned interim analysis indicated lack of efficacy and increased incidence of intracranial hemorrhage.

DRUGS IN DEVELOPMENT – Long Term Outlook

PAION’s Desmoteplase (Phase II)
Desmoteplase is a genetically-engineered version of a protein in vampire bat saliva. It is a plasminogen activator, so its mechanism of action is similar to that of Activase.

On February 4, 2005, the results from the recently completed DEDAS study were presented at a late-breaker presentation at the 30th International Stroke Conference in New Orleans, Louisiana and showed trends indicating that desmoteplase administered intravenously in the time window up to nine hours after the onset of stroke symptoms.

D-Pharm’s DP-b99 (Phase II)
DP-b99 is a metal ion modulator, designed and developed by D-Pharm as a neuroprotective agent for treatment of acute stroke. It showed a remarkable safety profile in Phase I clinical trials, even when administered at 100 times the expected effective dose. DP-b99 functions at several levels in the neurodegeneration process; modulates neuronal excitability, reduces metal ion dependent, cell damaging enzymatic activities and restricts intracellular diffusion of metal ions.

On early 2004, D-Pharm reported that results from a Phase IIa Acute Stroke Study with DP-b99 were published in Stroke (2004) 35: p388. The Phase IIa study was performed as a randomized, double-blind, placebo-controlled trial. The purpose of the study was to determine whether DP-b99 could be safely used in patients within a 12-hour time window following a stroke incident and to provide important pharmacokinetics and dosing information for future pivotal efficacy trials. Analysis of the data indicated that DP-b99 may be safely administered in this patient population. Rates of mortality, serious adverse events and overall adverse events were not higher in the DP-b99 group compared to placebo and no major side effects were attributed to the treatment. Efficacy evaluation demonstrates improvements in the clinical neurological scale score (NIHSS) 2, 7 and 30 days after the stroke in drug-treated patients.

On Feb 8, 2005, D-Pharm announced that it had started enrolling patients for a confirmatory Phase IIb study of DP-b99 in acute stroke. This double blind, placebo controlled, multi-center, international trial is designed to reconfirm the efficacy and beneficial effect of DP-b99 previously observed in stroke patients, as well as to strengthen and extend the safety data obtained from the Phase IIa study. The current study will recruit 150 acute stroke patients at centers in Europe and Israel. DP-b99 will be administered intravenously over 4 days with the first administration up to 9 hours following stroke onset. The patient group will be stratified into those treated within six and within nine hours following stroke onset, hence we expect this study to more clearly define the optimal therapeutic window for DP-b99.

Competitive Landscape for Ischemic Stroke Drugs in the Pipeline
The competitive landscape for the mid- to long-term pipeline for Ischemic Stroke looks as follows:

Sizing Up The Ischemic Stroke Pipeline
The ischemic stroke drug pipeline is composed of recanalization agents that act to dissolve the clots that are causing the stroke and neuroprotection agents that act to protect neurons from damage resulting from a stroke, instead of targeting the cause of the vascular blockage. It is expected that the neuroprotection agents will be used with recanalization agents, since the cause of the stroke will always have to be addressed. The Activase patent expires in September 2005 but it is expected to maintain patient share until the approval of new recanalization agents such as Reopro (4Q 2006), Viprinex (1Q 2007), and Desmoteplase (1Q 2008). Of the major drugs in development, D-Pharm’s neuroprotective agent DP-b99 shows promise for becoming the most successful new entrant into the ischemic stroke market from the current pipeline of drugs. DP-b99 is currently in Phase IIb clinical trials in ischemic stroke patients and is projected to be approved in the U.S. in 2Q 2008. The key advantages of DP-b99 are its wider post-stroke efficacy window and its advantageous safety profile. We project a peak U.S. revenue of $85 million in 2014 for DP-b99 for ischemic stroke.

REVENUE MODELS

We have updated and added 7 drug revenue models for Ischemic Stroke:

Activase-Genenetech-Approved
We project peak annual U.S. revenues for Activase for Ischemic Stroke of $15 million in 2005.

Cerovive-AstraZeneca-Phase III
We project peak annual U.S. revenues for Cerovive for Ischemic Stroke of $29 million in 2012.

Citicoline-Indevus Pharmaceuticals-Phase III
We project peak annual U.S. revenues for Citicoline for Ischemic Stroke of $31 million in 2013.

Reopro-Eli Lilly & Co.-Phase III
We project peak annual U.S. revenues for Reopro for Ischemic Stroke of $9 million in 2012.

Viprinex-Neurobiological Technologies-Phase III
We project peak annual U.S. revenues for Viprinex for Ischemic Stroke of $8 million in 2012.

Desmoteplase-PAION Gmbh-Phase II
We project peak annual U.S. revenues for Desmoteplase for Ischemic Stroke of $12 million in 2014.

DP-b99-D-Pharm-Phase II
We project peak annual U.S. revenues for DP-b99 for Ischemic Stroke of $85 million in 2014.