26 th Annual ROTH Conference March 11, 2014

Transcription

1 26 th Annual ROTH Conference March 11, 2014

2 Forward Looking Statements This presentation contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this presentation, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of The words anticipate, believe, estimate, expect, intend, may, plan, predict, project, target, potential, will, would, could, should, continue, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make as a result of various important factors, including those discussed in the Risk Factors section of our most recent report on Form 10-K, which is on file with the SEC and is also available on our website. The forward-looking statements contained in this presentation reflect Durata s current views with respect to future events, and Durata assumes no obligation to update any forward-looking statements except as required by applicable law. 2

3 Durata Therapeutics We are building a pharmaceutical company through the acquisition and development of clinical and commercial-stage therapeutics. Our focus is on patients with infectious diseases and other acute illnesses in the hospital setting. Our lead product candidate, dalbavancin, is in development for the treatment of patients with acute bacterial skin and skin structure infections, or ABSSSI. 3

4 Key Investment Highlights! Highly differentiated, late-stage product with documented efficacy, safety and tolerability NDA under review: AdCom March 31, 2014; PDUFA May 26, 2014; MAA accepted for review: 1H 15 anticipated decision Patent coverage/exclusivity through 2023 with possible extension; QIDP designation! ABSSSI market is large US ~2.6 million patients admitted to hospitals for IV Antibiotic therapy annually ~ 1/3 of patients could be treated w/o hospitalization ~ Emerging segment is a $3-4B market (at branded prices) for long-acting drugs EU5 ~ 1 million hospital patients receive Gram+ antibiotics annually ~ $1.5-$2B market (at EU branded prices) for long-acting drugs! Complex healthcare dynamic is driving patient care to ambulatory settings! Clinical focus is moving to opportunities beyond the primary ABSSSI indication! Favorable capital structure 4

5 Dalbavancin Product Overview 5

6 Dalbavancin: Introduction 6! Dalbavancin is a semi-synthetic intravenous (IV) lipoglycopeptide antibiotic administered as a once-weekly 30 minute IV infusion! Once-weekly dosing allows for the discontinuation of IV access with its attendant risks of line-related thrombosis and infection! The pharmacokinetic profile of dalbavancin demonstrates rapid bactericidal activity that is potent and sustained against serious Gram-positive infections including MRSA! A prior phase 3 program (Vicuron, Pfizer) documented efficacy, safety and tolerability! Two new confirmatory phase 3 studies in ABSSSI recently completed Clinical non-inferiority to twice daily vancomycin/linezolid at both hours and at end of treatment (14 days) Effective against MRSA and other gram positive bacteria associated with ABSSSI 25% of patients treated without an inpatient admission Favorable safety profile observed Despite the long half-life of dalbavancin, no increase in duration of adverse events Dalbavancin will be administered in both inpatient and outpatient settings of care

7 Dalbavancin: Mechanism of Action! Dalbavancin is a semisynthetic glycopeptide (lipoglycopeptide) which interferes with peptidoglycan cross-linking in the cell wall by binding to the D-ala-D-ala terminus of stem peptides. Comparative MIC90 (µg/ml) of selected agents and dalbavancin tested against Worldwide clinical isolates (2002)* Economou NJ,et al. J Amer Chern Soc : ; Streit et al. DMID 2004 S. aureus (1,815) OX-S S. aureus (1,177) OX-R β-hemolytic streptococci (234) viridans group streptococci (30) PCN-R Dalbavancin Teicoplanin 1 2 Vancomycin Oxacillin S R PCN = 0.06 R Linezolid

8 Dalbavancin: Unique Dosing Regimen Dalbavancin dosed with 1000 mg IV on Day 1 and 500 mg IV on Day 8 Bactericidal concentration of dalbavancin Administered as 30 minute (250ml) infusion via peripheral line Dorr, JAC 2005;55 Supp S2:ii25; data on file 8

9 Dalbavancin: Clinical Utility! Serious Gram-positive infections ABSSSI Cellulitis (± abscess, erysipelas) Surgical site infection Traumatic wound infection Osteomyelitis Pneumonia Bloodstream infections Prosthetic device infection Diabetic foot infection 9

10 Dalbavancin Delivers Value to All Stakeholders Healthcare Providers Optimize treatment in both inpatient and ambulatory settings shorten the length of stay (LOS), or in some cases, eliminate many hospital admissions altogether Patients/Caregivers More positive and perhaps even more medication adherent treatment experience with less disruption to their lives Institutional Administrators and Payors Achieve significant economic savings and improve resource utilization without compromising clinical outcomes 10

11 Dalbavancin: Conclusions 11! Dalbavancin is a potent antibiotic against S. aureus and other target pathogens, including MRSA.! Efficacy has been established in multiple phase 3 studies relative to comparators Patients were significantly ill and the skin infections studied are relevant to clinical practice Efficacy in relevant subpopulations, such as those with diabetes, was demonstrated.! Dalbavancin s unique once-weekly dosing regimen: Is simpler More convenient Avoids noncompliance with oral medication Allows for earlier discontinuation of IV access, avoiding line-related thrombosis and infection.

12 U.S. Commercial Thesis and Opportunity

13 Dalvance (dalbavancin) U.S. Commercial Thesis! US ABSSSI (at risk for MRSA) market is large ~2.6 million patients admitted to hospitals for IV Antibiotic therapy annually; 1/3 do not need to be hospitalized = emerging $3-4B market at branded prices ~35mm days of therapy annually, representing ~ $10B at branded pricing* High and growing prevalence of MRSA leads to empiric treatment! Providers respond positively to the dalbavancin product profile Well positioned to address providers desire to deliver care in ambulatory settings more frequently Presents opportunities in indications beyond ABSSSI! Health economic and reimbursement dynamics are favorable Reimbursement metrics and initiatives stemming from the Affordable Care Act (ACA) are shifting care to hospital ambulatory or out-patient settings! Customer universe is highly targeted Top 500 hospitals provide greater than 40% of our target market opportunity * If generics were converted to branded daptomycin pricing Source: Industry Sources, IMS & LEK analysis and interviews 13

14 Hospital Incidence of Acute Bacterial Skin and Skin Structure Infections (ABSSSI)! U.S. hospitals treat ~18 million patients annually for infections! ABSSSI accounts for ~17% of these infections, or 3.3MM patients 1! ABSSSI represents ~3% of all hospital admissions 2! ~65% of the ABSSSI patients have cellulitis and wound infections 1 GI/Biliary 11% Systemic 8% Abdom. /Pelvic 6% Other* 10% Wound - trauma'c 12% Wound - surgical 12% Abscess /boil/cyst 9% Genitourinary 19% Skin/Skin Structure 17% Celluli's 41% Skin/so? 'ssue inf - unspecified 5% Lower Respiratory 29% Other** 21% Sources: 1 AMR Hospital Antibiotic Market Guide - Book 2: Diagnosis and Surgery Reports, January 2010 June HCUP Data *Other categories include fevers of unknown origin, upper respiratory, bone/joint, non-surgical prophylaxis, CNS, cardiovascular and eye infections. **Other diagnoses include ulcer - diabetic foot/leg, ulcer - decubitus, gangrene, dental, burn, mastitis and lymphadenitis/lymphangitis. 14

15 Hospitalized ABSSSI Patient Care Pathway HospitalizaKon (Average LOS=4.9 days) ABSSSI Type InpaKent Celluli's/Abscess 79.1% Surg Site Infec'on 20.2% Trauma'c/Wound 0.4% Unspecified 0.3% Source: LaPensee K et al 2012 ISPOR (poster); analysis of 2010 Premier Database Mean total inpakent cost: $8,023 15

16 Hospital Margin and Departmental Cost Centers for Cellulitis Primary Diagnoses w/o MCC - MS-DRG 603 Hospital Margin for Cellulitis Primary Diagnoses w/o MCC $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 6, ,362 Cost MS- DRG Payment Outlier MS- DRG Groupings Celluli's w/o MCC (MS- DRG 603) Average Hospital Margin -12.2% Number of Cases 116,144 Average LOS 4.3 Rou'ne Day Cost ($) 3,117 Intensive Day Cost ($) 313 (657) 0.81% 0.11% 1.78% 1.07% 1.83% 0.47% 3.93% Cost Center Breakdown for MS-DRG 603 (Cellulitis Without MCC) 6.51% 3.14% 4.23% 12.95% 0.01% 5.19% 6.29% 51.68% MS- DRG 603 CelluliKs Percent of Hospital Cost Routine days 51.68% Intensive days 5.19% Drugs 12.95% Supplies and equipment 3.14% Therapy services 1.83% Inhalation therapy 1.07% Operating room 1.78% Anesthesia 0.11% Cardiology 0.81% Laboratory 6.51% Radiology 3.93% Emergency room 4.23% Blood and blood products 0.47% ESRD 0.01% Other services 6.29% Source: Avalere analysis of 2010 MedPAR file and 2009 HCRIS dataset for inpatient hospitals * Hospital payment includes any hospital-specific geographic wage index adjustments, indirect medical expenditure (IME) payments, and disproportionate share hospital (DSH) payments. ** Hospital cost calculated using hospital-specific cost-to-charge ratio (CCR) and allocated to 15 departmental cost centers 16

17 Hospital Readmission Rates! Based on 2010 CMS data, the national 30-day all-cause hospital readmission rate is 19.3%; higher in Chicago (26.7%)! Readmission rates for cellulitis and other serious gram positive infections mirror the all-cause rates Source: Avalere analysis of 2010 MedPAR file and 2009 HCRIS dataset for inpatient hospitals 17

18 Financial Penalties are Driving Hospitals to Deliver Care in Ambulatory or Outpatient Settings Hospital Acquired Conditions (HACs) Hospital Readmissions ****! Financial penalkes for condikons that pakents acquire during a hospital stay! Financial penalkes for avoidable hospital readmissions! Medicare - Hospitals in the top quarkle for HACs will receive a 1% decrease in DRG payments*! Medicaid - No federal payments will be issued to states for HACs*** States can also idenkfy other provider- preventable condikons for non- payment! Medicaid prohibikon FY 2011***! Medicare reduckons FY 2015**! Hospitals with excess readmissions within a 30- day window will have payments reduced by 1% in 2013 and increasing to 3% by 2015! Hospitals required to submit data to either the Secretary of HHS or to the States to determine pakent readmission rates! Secretary of HHS to publicize informakon on readmission rates! Begins FY 2013 *The Deficit Reduction Act of 2005, Pub. L. No , sec. 5001(c), "Quality Adjustment in DRG Payments for Certain Hospital Acquired Infections **The Patient Protection and Affordable Care Act of 2010, Pub. L. No , sec. 3008, "Payment Adjustment for Conditions Acquired in Hospitals" ***The Patient Protection and Affordable Care Act of 2010, Pub. L. No , sec. 2702, "Payment Adjustment for Health Care-Acquired Conditions" ****PPACA The Patient Protection and Affordable Care Act of 2010, Pub. L. No , sec. 3025, "Hospital Readmissions Reduction Program" 18

19 Emergency Department Patient Throughput Diseases of skin and subcutaneous 'ssue Total # visits Karaca et al. BMC Emergency Medicine 2012, 12:15 Mean durakon (hr) Median durakon (hr) 95% CI for Mean 642,445 (13.0%) ( ) Infusion Time % of ED LOS for ABSSSI (mean duration) 15.1% 30.3% 60.6% 90.9% 30-minute infusion 1-hour infusion 2-hour infusion 3-hour infusion 19

20 Dalbavancin and Potential Cost Implications: Facilitates Avoidable Inpatient Admission Dalbavancin can potentially save up to $12,187 when hospital admission is avoided compared to 5 days of inpatient treatment with vancomycin or daptomycin Cost Comparison by Key Components $16,000 $14,000 $12,000 $13, 022 $16,083 Drug Cost (In-patient) Scenario: Assumes first line treatment only, equal efficacy 88.9% 1 Comparators and Selected Assumptions: $10,000 $8,000 $6,000 $4,000 $2,000 $3,896 Drug Cost (Out-patient) In-patient Medical Out-patient Medical 1) Dalbavancin: 0 days in-patient 14 days out-patient 2) Vancomycin: 5 days in-patient 9 days out-patient 3) Daptomycin: 5 days in-patient 9 days out-patient $0 Dalbavancin Vancomycin Daptomycin 1Jauregui, et al. Clin. Infect. Dis. 2005;41:

21 Value Proposition Market Research: Standout Stimuli Dalvance (dalbavancin) can help avoid the admission and the inpatient IV cost burden for many ABSSSI patients who can now be more easily treated in an ambulatory setting Resource Cost per unit 5- day* InpaKent Stay with Vancomycin OutpaKent Treatment with Dalvance (dalbavancin) Hospital Bed Day $1,853/day $9,265 $0 Drug: Vancomycin 1g bid $24/day $ Therapeu'c drug monitoring (e.g., renal func'on and trough levels) $102/blood draw $204 $0 PICC line placement $786/placement $786 $0 Manage PICC line complica'ons $188/average cost per pa'ent $188 $0 Drug: Dalvance tbd - - $3,000- $4,500** Other? Total Cost $10,563 $3,000- $4,500 * Source: LaPensee K et al 2012 ISPOR (poster); analysis of 2010 Premier database ** Price assumption based on a days of current branded products 21

22 US Commercial Strategy: Target Hospitals! Approximately 1,900 hospitals account for 80% of the total opportunity based on our selected target market; the top 500 hospitals provide greater than 40% of our target market opportunity! Number of hospitals accounting for: Deciles 3-10 of Target Market: 1,870 Deciles 3-10 of Branded Market: 1,594 Deciles 3-10 of both Target Market and Branded Market: 1,392 Deciles 6-10 of both Target Market and Branded Market: 459 Source: IMS: Durata - Account Based Targeting and Alignment, March,

23 U.S. Commercial Strategy: Launch Plans! Current pre-launch efforts focus on key stakeholders: Ø Mapping formulary submission processes and evidence requirements Ø Development and validation of value dossier, formulary submissions Ø Infectious disease and pharmacy education of key thought leaders Ø Develop key account plans and value proposition with payers and hospital administration Ø Develop reimbursement support services and resources! Target audiences: Ø 1,500-2,000 hospitals Ø 7,000 IDs Ø 6,000 high volume (gram + utilization) IMs and surgeons! Anticipate a commercial organization of ~140 personnel, including hospital specialists, key accounts, formulary, marketing, discharge and reimbursement support Similar characteristics typify the EU5 marketplace 23

24 EU Healthcare Environment 24

25 Similar to the US, EU hospital healthcare reforms are focused on reducing costs associated with inpatient care Between 1998 and 2008 the EU countries have seen an improvement in key metrics:! Almost all European countries were able to reduce the length of stay (LOS) by at least 1 bed-day! Almost all countries reduced their rate of admissions or at least stabilized it. The European average reduction in admission decreased by almost 2 percentage points, from 17.5% to 15.7% Source: Hospitals in Europe Healthcare Data 2011, European Hospital and Healthcare Federation. 25

26 However, LOS associated with antibiotic use remains higher than the corresponding EU country national average Country LOS in days All AnKbioKcs Combined France 9.5 Germany 9.8 Italy 9.5 Spain 9.7 United Kingdom 8.0 United States 6.8 EU5 LOS also significantly greater than the US LOS for antibiotic use Source: Hospital Antibiotic Market Guide, January June 2010, Arlington Medical Resources (AMR), Inc. 26

27 Continued Pressures Will Drive Hospitals to Further Improve Efficiencies! Reimbursement--two important EU payment trends: early experiments are occurring in some countries to supplement DRG payment with incentives for the achievement of specific quality goals; and other countries are introducing volume caps and differential payment above a cap to contain total hospital costs. Source: Reforming payment for healthcare in Europe to achieve better value, Research report Anita Charlesworth, Alisha Davies and Jennifer Dixon, August 2012; KPMG! Hospitals are expected to be even more efficient, to continue reducing inappropriate admissions and length of stay and to further improve coordination between inpatient care and out of hospital treatments. Source: Hospitals in Europe Healthcare Data 2011, European Hospital and Healthcare Federation. 27

28 Annual EU5 Hospital Patients Over 1M patients with cssti represent a $1.5-$2B market opportunity for longacting drugs at current EU branded prices PotenKal Dalbavancin IndicaKons PaKents* Germany France UK Italy Spain Skin/So? Tissue 316, , , , ,970 Systemic 68, , ,953 94,717 35,674 Lower Respiratory 445, , , , ,808 Bone and Joint 17,118 18,053 6,048 21,048 8,919 Cardiovascular 8,558 6,019 6,048 21,048 8,919 Total PotenKal PaKents 855, , , , ,290 *Patients receiving Gram+ antibiotics and other antibiotics for gram+ infections as monotherapy with 10 day length of stay. Antibiotic Market GuideSource: AMR Hospital Jan-June

29 Dalbavancin s once-weekly dosing can shift the treatment paradigm for Gram-positive infections! Despite differing practice patterns among EU countries and the lack of pan-european consensus for treatment guidelines, a significant opportunity exists to leverage the current EU movement to optimize patient care and advance treatment for patients with Gram-positive infections in the acute hospital setting! We believe once-weekly dalbavancin can: facilitate a reduction in the hospital length of stay in all countries for the treatment of patients with Gram-positive infections facilitate preventable admissions in certain countries where ambulatory IV treatment/opat is being established Deliver economic savings without compromising clinical outcomes 29

30 Milestones

31 Key Milestones / Upcoming Events! NDA under review by FDA for ABSSSI: Ø Advisory Committee: March 31, 2014 Ø PDUFA: May 26, 2014 Ø Pre-launch activities ongoing! MAA under review by EMA for cssti: Ø Anticipated Approval: 1H 2015 Ø Commercial planning beginning! Other studies and indications: Ø Pediatric ABSSSI Ø Osteomyelitis Ø Hospitalized Community-Acquired Pneumonia Ø Diabetic Foot Infection 31

32 Key Investment Highlights! Highly differentiated, late-stage product with documented efficacy, safety and tolerability DISCOVER program studies met all primary and secondary endpoints Patient population had severe ABSSSI: very large lesion size and high frequency of fever NDA Filed: AdCom March 31, 2014; PDUFA May 26, 2014; MAA under review: 1H 15 anticipated decision Patent coverage/exclusivity through 2023 with possible extension; QIDP designation! ABSSSI (at risk for MRSA) market is large US~2.6 million patients admitted to hospitals for IV Antibiotic therapy annually ~ third of patients could be treated w/o hospitalization ~ $3-4B market at branded prices for long-acting drugs EU5 ~ 1 million hospital patients receive Gram+ antibiotics annually! Complex healthcare dynamic is driving patient care to ambulatory settings! Clinical focus is moving to opportunities beyond the primary ABSSSI indication! Favorable capital structure $66.6M of cash and cash equivalents at 3Q13 Recent $70M debt financing to increase flexibility Favorable corporate tax rate and no royalties 32

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