Epigenomics AG Corporate Presentation September 2013 www.epigenomics.com
Safe Harbor Forward Looking Statements This communication contains certain forward-looking statements, including, without limitation, statements containing the words expects, future, potential and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results of operations, financial condition, performance, or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: uncertainties related to results of our clinical trials, the uncertainty of regulatory approval and commercial uncertainty, reimbursement and drug price uncertainty, the absence of sales and marketing experience and limited manufacturing capabilities, attraction and retention of technologically skilled employees, dependence on licenses, patents and proprietary technology, dependence upon collaborators, future capital needs and the uncertainty of additional funding, risks of product liability and limitations of insurance, limitations of supplies, competition from other biopharmaceutical, chemical and pharmaceutical companies, environmental, health and safety matters, availability of licensing arrangements, currency fluctuations, adverse changes in governmental rules and fiscal policies, civil unrest, acts of God, acts of war, and other factors referenced in this communication. Given these uncertainties, prospective investors and partners are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such forward-looking statements to reflect future events or developments. Legal Product Disclaimer Products by Epigenomics that are referred to in this presentation, especially Epi procolon, are not available and are not approved for sale in the United States. The analytical and performance characteristics of any product to be eventually sold in the U.S. based on our technology have not been established. 2 September 2013
Overview Epi procolon Unmet need & commercial opportunity Product characteristics and performance US commercial strategy Epi prolung and future product opportunities Summary Appendix 3 September 2013
Products and competencies Blood based early detection of colorectal cancer: Addressing major unmet need in CRC screening market CE marked IVD test under FDA review in the US Confirmatory diagnostic assay for Lung Cancer: Addresses unmet need of difficult to diagnose lung cancer using the validated SHOX2 biomarker DNA methylation based diagnostics for the early detection of cancer IVD Development and commercialization experience 4 September 2013
Overview Epi procolon Unmet need & commercial opportunity Product characteristics and performance US commercial strategy Epi prolung and future product opportunities Summary Appendix 5 September 2013
Facts about Colorectal Cancer..second largest cancer killer in the US 1 140.000 newly diagnosed cases in 2012 50.000 CRC related deaths in the US.curable if detected early early detection saves lives and money 90% 5-year survival for diagnosed and treated Stage I/II CRC However, 60% of cancer cases are detected in late, symptomatic stages cost of colorectal cancer care is at least $14 billion p.a. mostly late stage Low participation and adherence rates to screening leads to poor prognosis and poor outcome 1 American Cancer Society: Cancer Facts and Figures 2012 6 September 2013
The Problem and its Solution.too many US citizens remain unscreened 1 1 of 3 Americans are not compliant 30-35million do not participate 35 million unscreened Stool Colonoscopy.choice of options increases participation 2 Colonoscopy alone does not address the problem Additional options enhance outcome.blood based methods will expand the market Additional options will expand the market Incremental market opportunity > $1 Billion per year 1 American Cancer Society: Cancer Facts and Figures 2012 2 Inadomi J et al. Adherence to colorectal cancer screening, a randomized clinical trial of competing strategies, 2012. 7 September 2013
Blood-based Screening is Widely Accepted Berlin Adherence Study 1 Study goal: determine demographic, health psychology and socioeconomic traits associated with compliance to CRC screening guidelines. 160 patients: Accepted colonoscopy Opted for stool test or no test 38% 62% 87% 9% 4% Refused colonoscopy Opted for blood based test Surveys by Huntsman Cancer Center 2) and others 3) confirm these results 1 interim results presented at UEGW 2012, 2. Taber et al. (2012, ASPO): Preferences for a methylated DNA blood test for colorectal cancer among a multiethnic sample of screened and unscreened adults, 3 Inadomi J et al. Adherence to colorectal cancer screening, a randomized clinical trial of competing strategies, 2012 8 September 2013
A Paradigm Shift providing Multiple Benefits No diet or medication restrictions Part of routine visits Helps doctors accomplish screening goals Non-invasive to physicians and patients Simple PCR test to laboratories Minimal technician training Automatable, flexible Financial incentive for labs to participate in CRC screening More patients are screened to the Healthcare system Lower CRC mortality Early detection = better outcome Reduced CRC associated costs 9 September 2013
Septin9 CRC screening health-economically beneficial Health economic study by Prof. Uri Ladabaum, M.D., M.S., et al. from the Division of Gastroenterology and Hepatology, Stanford University School of Medicine, USA First health economic study for Septin9 CRC screening with blood-based Septin9 tests has potential to improve screening uptake and adherence rates Septin9 tests would decrease CRC incidence by 41% and CRC mortality by 61% assuming optimal uptake 10 September 2013
Epi procolon : Simple Qualitative Interpretation Methylated Septin9: Suitable Marker for CRC Detection single proprietary epigenetic biomarker: methylated Septin9 strong and comprehensive IP protection Highly sensitive assay (1-2 DNA copies/ml blood) Epi procolon : Simple Assay real-time PCR test, runs on standard lab equipment (Life, Roche) easy & fast: 8 hours time to result multiple volume dependent automation solutions high sensitivity or high specificity configurations possible 11 September 2013
Overview Epi procolon Unmet need & commercial opportunity Product characteristics and performance US commercial strategy Epi prolung and future product opportunities Summary Appendix 12 September 2013
Epi procolon : Clinical Data PRESEPT Study February 2010 1 Prospective screening study FDA submission December 2011 FIT comparative study December 2012 EU CE Study 5 2011 Samples 7,940 7,940 301 2 250 4 Sensitivity 51%/67% 2 68% 73% 4 vs. 68% 4 81% Specificity 91%/88% 2 80% 82% vs. 98% 99% Assay / Kit Septin9 prototype assay Epi procolon Epi procolon Epi procolon 2.0 CE (2/3 algorithm) 1 Church et al. Gut 2013;0:1 9. 2 Duplicate vs. triplicate testing 3 Approx. 100 CRC cases from screening eligible patients and ~200 prospectively collected normals 4 Non-inferiority to FIT proven in study 5 Case control study performed in Europe, 100 CRC cases, 148 normal controls 13 September 2013
Additional Clinical Benefit for Blood-based Test Detection of right-sided cancers more challenging by Colonoscopy and stool tests Sensitivity for detection of left- and right-sided cases was 96% and 94% respectively CRC sensitivity Left-sided cancers Right-sided cancers gfobt 68.2 83.3 50.0 70.6 Septin9 95.6 96.4 94.4 84.8 Specificity Septin9 was confirmed as a highly sensitive biomarker for the detection of CRC in blood Septin9 methylation level shows no difference between left and right side colon cancers Plasma Methylated Sept9 Is a Screening Marker in Both Left- and Right-Sided Colon Cancer. Comparison to FOBT and CEA Results Lead Author: Professor Dr. Kinga Toth from the 2nd Department of Internal Medicine of Semmelweis University in Budapest, Hungary Abstract No. u1895 14 September 2013
Regulatory Status of Epi procolon in the U.S. Late 2011: Pivotal study completed Module 1 submitted Throughout 2012: Modules 2 & 3 submitted February 2013: Priority review status granted by FDA Ongoing: FDA dialogue on PMA submission materials. Expected Panel Meeting scheduling 2008-10: PRESEPT study and sample collection Early 2012: FIT study started Late 2012/early 2013: FIT study and PMA submission completed Q2: FDA site inspections and initial feedback on submitted data for PMA Next Steps: Expected completion of review within 180 day period once all questions and open topics have satisfactorily been addressed by Epigenomics Panel meeting expected to be convened by FDA upon review of data submitted 15 September 2013
Overview Epi procolon Unmet need & commercial opportunity Product characteristics and performance US commercial strategy Epi prolung and future product opportunities Summary Appendix 16 September 2013
Building a Customer Base Ahead of U.S. Approval Continuous adoption of Septin9 testing through LDT partners (Quest, ARUP, Companion Dx and Gamma Dynacare) >45,000 tests performed in 2012 LDT partners likely to become future customers of Epigenomics product once approved Included in AMA s coding document for reimbursement: CPT code 81401 17 September 2013
U.S. Market Overview Dx Suppliers Product sales Laboratories Tests ordered Physicians Tests requested Patients 20B$ Sales in products and services to their laboratory customers 55B$ Testing paid by CMS and private payers 360,000 Docs providing screening recommendations. Mainly PCPs but also OB/GYN 100M in CRC screening eligible age, 35m not currently screened Key influences: reimbursement policymakers. guideline bodies medical societies peers (KOLs) advocacy groups media politics 18 September 2013
Initial Commercial Focus in the U.S. Parallel approach in two areas: 1. Sales to laboratory customers internal: build customer-centric sales team for key lab customers including technical and customer support partners: to limit upfront cash outflows initially, non-core aspects of value chain will be outsourced (e.g. manufacturing, distribution, logistics, parts of G&A) 2. To lead and support own and customer efforts in reimbursement and guidelines internal: expand and build key in-house expertise necessary in medical / regulatory affairs, medical marketing, also to support publication strategy and possible future clinical trials partners: major diagnostic companies, testing laboratories, payers, HMOs (through their own sales forces or networks to physicians, etc.) 19 September 2013
Overview Epi procolon Unmet need & commercial opportunity Product characteristics and performance US commercial strategy Epi prolung and future product opportunities Summary Appendix 20 September 2013
Epi prolung - Market Introduction CE-marked, marketed in Europe Biomarker: methylated SHOX2 gene Reflex test for the diagnosis of lung cancer Increasing awareness through publications Market introduction through KOL driven studies CE validation study (2010) Epi prolung performance Cytology Epi prolung combined with cytology Sensitivity 81% 77% 77% 98% Specificity 95% 97% 95% 92% * Manuscript in preparation Study by Charité Berlin 2012-228 samples analyzed* 21 September 2013
R&D Capabilities and Future Product Opportunities core capabilities Biomarker discovery, confirmation and selection IVD test development, validation and regulatory Epigenetic biomarker discovery and IVD development capabilities >20 proprietary prognostic, predictive, response, diagnostic, and screening biomarkers in cancer indications Current internal focus on Epi procolon, actively pursuing license opportunities for other biomarkers Broad IP protection with ~ 70 active patent families: protection along the value chain 22 September 2013
Overview Epi procolon Unmet need & commercial opportunity Product characteristics and performance US commercial strategy Epi prolung and future product opportunities Summary Appendix 23 September 2013
Key Financial Information Revenue growth driven by Epi procolon sales in EU and Asia H1: +75% High level of cost control implemented 2013 cash use and cost estimated at around EUR 7m currently funded until YE 2013 (in thousand) H1 2013 H1 2012 Revenue 698 399 EBIT (Operating Results) -3,319-5,742 (in thousand) 06/30/2013 12/31/2012 Liquid Assets* 3,565 2,714 * incl. marketable securities Operations in Germany and the U.S., total current number of employees approx. 32 Full financial statements: http://www.epigenomics.com/en/news-investors/investors/financial-reports.html 24 September 2013
Convertible Bond Financing with Yorkville provides financial back-up to improve the financial situation ahead of FDA approval Key points of the investment agreement: Issuance of convertible bonds in tranches of EUR 500k at Epigenomics' discretion Total nominal amount of EUR 5m in up to two years First tranche with a nominal amount of EUR 500,000 issued on August 30, 2013 Conversion price equals 5 day trading average prior to conversion less a 5% discount, but not lower than EUR 2.10 First tranche Total number of convertible bonds: EUR 500,000 Max. number of new shares 238,095 = 2.0% Total Shares Outstanding* 11,967,847 Major Shareholders: Abingworth LLP. 14.43% Gilber Gerber 5.09% as of August 31, 2013 25 September 2013
Why Invest in Epigenomics... The world s first IVD blood test for CRC screening: extensively validated in clinical trials proven utility in CRC early detection globally available as IVD (EU) or LDT (US) Not for sale or diagnostic use in the United States of America under FDA review for the US market 26 September 2013
Thank you for your attention! Contact Investor Relations Europe Antje Zeise Manager Investor Relations Epigenomics AG T +49 30 24345 0 ir@epigenomics.com U.S.A. Christine Yang Vice President The Trout Group LLC T +1 646 378 2929 cyang@troutgroup.com TICKER Bloomberg: ECX:GR Reuters: EXXG.DE Thomson ONE: ECX-XE ADR OTC: EPGNY INTERNET www.epigenomics.com www.epiprocolon.com www.epiprolung.com www.epigenomics.com
Contents Epigenomics overview Epi procolon Unmet need & opportunity Characteristics US strategy Epi prolung and future product opportunities Summary Appendix 28 September 2013
Septin9: Continuous Improvement as Assay Technology Evolved Sensitivity / Specificity 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 Subjects tested (cumulative) Technology Development 1 st Gen. Tests 2 nd Gen. Tests Case Control Studies 29 September 2013
Epi procolon 2.0: Powerful Screening Tool with Flexible Set Up 30 September 2013
Comparison of Non-Invasive CRC Screening Methods Method Specificity Sensitivity Positive Predictive Value 5 Epi procolon 2.0 CE (currently marketed version 99.3% 80.6% 45.7% of product in Europe) 1 Guaiac FOBT 2 97.7% 37.1% 10.1% OC-Sensa Micro qfit1x 3 93.7% 69.2% 7.5% 1 Tetzner et al. UEGW 2011, 2 Allison et al. 1996 NEJM, 3 + 4 Park et al. 2010. Am. J. Gastro. 5 Orange figure: CRC with positive test result, grey figure: healthy with positive test result assuming a prevalence for CRC of 0.7%. 31 September 2013
Comparison Study Top Line Data: Cancer Detection by Stage Epi procolon pt0/tis pt1 pt2 pt3 pt4 ptx unknown TOTAL Stage 0 / I 2/3 6/11 10/13 - - - 0/1 18/28 64.3% (45.8-79.3%) Stage II - - - 14/18 2/2 - - 16/20 80.0% (58.4-91.9%) Stage III - 0/1 0/2 14/19 1/1 - - 15/23 65.2% (44.9-81.2%) Stage IV - 2/2-0/1 6/6 1/1 3/3 12/13 92.3% (66.7-99.6%) Unknown* - - - - - 3/3 10/14 13/17 76.4% (52.7-90.4%) TOTAL 2/3 8/14 10/15 28/38 9/9 4/4 13/18 74/101 73.3% (63.9-80.9%) * Staging information incomplete or unavailable FIT pt0/tis pt1 pt2 pt3 pt4 ptx unknown TOTAL Stage 0 / I 0/3 5/11 11/13 - - - 1/1 17/28 60.7% (42.4-76.4%) Stage II - - - 14/18 2/2 - - 16/20 80.0% (58.4-91.9%) Stage III - 1/1 1/2 16/19 1/1 - - 19/23 82.6% (62.9-93.0%) Stage IV - 1/1-0/1 4/6 1/1 1/3 7/12 58.3% (32.0-80.7%) Unknown* - - - - - 1/3 6/11 7/14 50.0% (26.8-73.2%) TOTAL 0/3 7/13 12/15 30/38 7/9 2/4 8/15 66/97 68.0% (58.2-76.5%) * Staging information incomplete or unavailable Head-to-head comparison study results with Epi procolon and FIT published Dec 4, 2012 32 September 2013