Abivax S.A. (ABVX.PA)

Transcription

1 Initiating Coverage March 1, 2016 Abivax S.A. (ABVX.PA) Initiation Report LifeSci Investment Abstract Abivax SA (Euronext Paris: ABVX.PA) is developing novel therapies to treat serious infectious diseases. The Company s lead product candidate, ABX203, is a therapeutic vaccine to treat hepatitis B. Abivax has completed enrollment for a Phase II/III trial evaluating ABX203 and expects to report topline data in the fourth quarter of Abivax is also evaluating ABX464 as a potential treatment for HIV. Phase IIa data for this program was recently presented showing a dose-dependent reduction in viral load with no indications of drug resistance. The Company plans to conduct a second Phase IIa trial with ABX464 to test the durability of the drug s effect. Key Points of Discussion Abivax is Developing Lead Candidate ABX203 to Treat Chronic HBV Patients. ABX203 is a therapeutic vaccine candidate for chronic hepatitis B consisting of virus-like particles (VLPs) that contain both HBV surface antigen (HBsAg) and HBV core antigen (HBcAg). The Company licensed ABX203 from the Center for Genetic Engineering and Biotechnology (CIGB) in 2013, providing the Company with exclusive rights to market ABX203 in Europe, Australia, New Zealand, select Asian countries, and most of Africa. Abivax is currently conducting a Phase II/III trial evaluating the safety and efficacy of ABX203 for the treatment of patients with chronic hepatitis B. The trial is fully enrolled and the Company expects to report data in the fourth quarter of Data from this pivotal trial could support approval in certain countries as early as 2018 and may also allow Abivax to pursue partnership opportunities for EU and Japanese territories. ABX464 Targets a Novel Protein for the Treatment of HIV. ABX464 is an orally administered small-molecule that is intended to enhance viral suppression when used in combination with existing HIV therapies. The drug inhibits the production of mature, infectious HIV particles by blocking the activity of the HIV Rev protein. Rev is responsible for exporting unspliced or singly-spliced viral mrna out of the nucleus, which allows for the production of key structural HIV proteins. ABX464 inhibits Rev activity by blocking the cap-binding complex (CBC) on mrna. The mechanism is different from currently approved HIV treatments since it targets a cellular component rather than a viral enzyme, which may reduce the risk of drug resistance. The drug candidate was discovered using Abivax s proprietary antiviral platform and the Company holds full worldwide commercialization rights. ABX464 was evaluated in a randomized, double-blind, Phase II trial in treatment-naïve HIV patients, and the Company expects to conduct a second Phase II study in pretreated patients in Results from the first Phase II trial provide important proof-of-concept data in humans, with 4 of 6 patients treated at the highest dose tested experiencing greater than 0.5 log viral load reductions. Analysts Jerry Isaacson, Ph.D. (AC) (646) jisaacson@lifescicapital.com David Sherman, Ph.D. (212) dsherman@lifescicapital.com Market Data Price $14.88 Market Cap (M) $150 EV (M) $91 Shares Outstanding (M) 9.6 Avg Daily Vol 2, week Range: $ $24.39 Cash (M) $56.2 Net Cash/Share $5.60 Annualized Cash Burn (M) $27.2 Years of Cash Left 1.9 Debt (M) $2.3 Financials FY Dec 2015A 2016A 2017A EPS H1 NA NA NA H2 NA NA NA FY NA NA NA Expected Upcoming Milestones Q Initiate randomized Phase IIa trial with ABX464 in pretreated HIV patients. Q Randomized pivotal Phase II/III results with ABX203 in hepatitis B Initiate Phase I/IIa trial with ABX196. H2 2016/H Initiate Phase III trial for ABX464 in HIV patients. For analyst certification and disclosures please see page 50 Page 1

2 Treatment with ABX203 Led to Sustained Reductions in Viral Load. In a Phase II/III study, the CIGB observed that vaccination with ABX203 led to a 3-log reduction in viral load during after 24 weeks of treatment. 1 Patients treated with pegylated interferon-α (PEG-IFN-α), an approved therapy, had a comparable decrease in viral load. For ABX203-treated patients, viral loads remained low 24 weeks after the end of treatment. However, 24 weeks after stopping PEG-IFN-α, patients experienced nearly a 2-log increase in viral load. Viral loads eventually rebounded to roughly baseline levels in both groups. This took 48 weeks in patients treated with PEG-IFN-α, compared to 72 weeks in the ABX203-treated patients, suggesting that ABX203 may lead to durable effects on HBV viral burden. Remaining Unmet Medical Need with Existing HBV Treatments. Treatment with nucleoside analogs (NAs) can reduce viral load and prevent disease progression and liver damage. Lifelong NA treatment is required to prevent rapid viral rebound and flares that damage the liver. These drugs do not affect HBV cccdna or integrated HBV DNA, the reservoirs of HBV DNA in the nucleus of hepatocytes that support chronic infection. Both NAs and interferons have low rates of HBV E antigen (HBeAg) conversion, a sign of inactive disease, and HBV surface antigen (HBsAg) loss, an indicator of functional cure. The lack of effect on the HBV DNA reservoirs may account for the failure to eliminate HBsAg. As a result, current treatments cannot completely clear the virus. Existing therapies carry safety concerns and their uses are limited. All NAs carry a boxed warning related to potential effects on mitochondrial function, and long-term NA use is associated with the development of resistant HBV strains. Interferons are only effective in approximately 20% of patients, and are associated with substantial side effects such as flu-like symptoms, mood changes, and depression. 2 ABX203 has been evaluated in 4 clinical trials to date and has been shown to be an immunogenic therapeutic vaccine that has a favorable safety profile compared to PEG-IFN-α. Multiple treatment approaches are likely required to produce a functional HBV cure, and ABX203 has the potential to be an integral component of such a regimen. Large Market Opportunity for Treating Chronic HBV Patients. The World Health Organization (WHO) estimates that approximately 240 million individuals worldwide are chronic carriers of HBV, meaning the HBsAg antigen has been present in their blood for 6 months or more. 3 One-fourth of chronically HBV-infected patients will eventually die from HBV-associated liver cancer or cirrhosis, 4 contributing to the 780,000 HBV-related deaths each year. The prevalence of chronic HBV in the US and EU is the lowest worldwide due to the adoption of universal vaccination. There are approximately 844,000 chronic HBV carriers in the US and 14.6 million in the EU. In the EU, chronic HBV leads to 49,000 deaths and healthcare spending of approximately $14.5 billion each year. In 2014, sales of Gilead s Viread (tenofovir) and Bristol-Myers Squibb s Baraclude (entecavir), two popular nucleoside analogs, each exceeded $1 billion. We estimate a large market opportunity for a novel chronic HBV treatment in Europe, and that with modest penetration Abivax s ABX203 could potentially achieve peak annual sales exceeding $2 billion. 1 Mahtab, MA, et al., Phase III study of a therapeutic vaccine candidate (NASVAC) containing the hepatitis B virus core antigen (HBcAg) and the HBV surface antigen (HBsAg) for treatment of patients with chronic hepatitis B. Hepatology International, 8(1), pp Wong, D.K.H. et al., Effect of Alpha-Interferon Treatment in Patients with Hepatitis B e Antigen-Positive Chronic Hepatitis B: A Meta-analysis. Annals of Internal Medicine, 119(4), pp Komatsu, H. et al., Hepatitis B virus: Where do we stand and what is the next step for eradication? World Journal of Gastroenterology, 20(27), pp Page 2

3 ABX464 May Provide Meaningful Benefit in Viral Load Reduction. Current HIV treatments require daily dosing that can consist of multiple pills. As a result, approximately 45% of patients with HIV do not maintain the 95% treatment compliance recommended for optimal therapeutic benefit. 5 Non-compliance can cause viral load spikes that increase the risk of transmission and the emergence of de novo drug resistance. In preclinical studies, HIV infected mice were treated for 30 days with either ABX464 or a highly-active antiretroviral therapy (HAART) consisting of three approved drugs. Following treatment discontinuation, mice receiving HAART quickly rebounded to pre-treatment viral load levels, whereas mice treated with ABX464 had a slower increase in viral load that did not reach pre-treatment levels through 52 days. The sustained suppression of viral load induced with ABX464 may provide an important clinical benefit to patients who struggle with treatment compliance by maintaining low viral levels following missed doses. No Drug Resistance Observed to Date with ABX464. HIV replication proteins lack a proofreading function to correct mismatched bases, leading to frequent mutation during replication. The emergence of new mutations in HIV proteins can make the virus less susceptible to certain treatments. As a result, drug resistance is an ongoing problem during treatment that is typically solved by combination therapies. ABX464 targets the CBC, a human protein, which causes ABX464 to not be affected by the high mutation rate during HIV replication. In vitro studies tested the time for drug resistance to develop against several antiretroviral therapies (ARTs) in comparison to ABX464. Resistance developed against ARTs between 3 and 12 weeks, whereas no resistance was seen against ABX464 through 24 weeks of treatment. These preclinical results suggest that the inclusion of ABX464 in HIV combination therapies could allow for a reduced number of ARTs per combination regimen. Large Market Opportunity for Novel HIV Treatments. The Centers for Disease Control (CDC) estimate that there are 36.9 million people worldwide infected by HIV and approximately 2.1 million reside in Western and Central Europe and the US. The size of the global HIV market is estimated to be more than $20 billion with several leading drugs exceeding $1 billion in annual sales. Treatment improvements have allowed patients with HIV to have a near normal life expectancy. However, despite their efficacy, existing therapies are associated with daily dosing with multiple pills, substantial side effects, and risk of drug resistance. Novel therapeutics like ABX464 that can address these shortcomings have the potential to be a favored treatment by both physicians and patients. 5 Mills, E.J. et al., Adherence to antiretroviral therapy in Sub-Saharan Africa and North America; A meta-analysis. JAMA, 296(6), pp Page 3

4 Financial Discussion Initial Public Offering and Recent Financials. On June 23, 2015, Abivax announced the pricing of its initial public offering (IPO) of stock, and the Company began trading on the Euronext Paris on June 26. This was the largest French biotech IPO in the history of the Paris exchange. Abivax sold 2,707,089 shares of common stock at an offering price of to bring in gross proceeds of 57.7 million ($64.4 million). The total number of ordinary shares following the offering totaled 9,624,889. Financial Results for the First Half of Abivax reported results for the first half of 2015 on September 29, Research and development expenses were 6.9 million ($7.8 million) for the first half of Net loss for the period was 7.2 million ($8.0 million) compared to 2.9 million ($3.4 million) for the first half of Abivax ended June 30, 2015 with a cash position of 51.6 million ($57 million). The Company estimates it has enough cash to fund operations until Page 4

5 Table of Contents Company Description... 6 ABX203: Therapeutic Vaccine to Treat Chronic Hepatitis B... 7 Mechanism of Action for ABX Preclinical Studies... 8 Safety Profile... 9 Hepatitis B... 9 Causes and Pathogenesis... 9 Symptoms and Diagnosis Treatment Hepatitis B Market Information Epidemiology Market Size HBV Healthcare Burden Clinical Data Discussion for ABX Other HBV Treatments in Development HBV Therapeutic Vaccines Immunomodulators Competitive Landscape ABX464 Rev Inhibitor to Treat HIV Infection Mechanism of Action for ABX Preclinical Studies Safety Profile Human Immunodeficiency Virus Causes and Pathogenesis Symptoms Diagnosis & Treatment HIV Market Information Epidemiology Market Size Clinical Data Discussion HIV Other Drugs in Development CCR5 Antagonists BMS GlaxoSmithKline Competitive Landscape for HIV Intellectual Property Management Team Risk to an Investment Analyst Certification Disclosures Page 5

6 Company Description Abivax is a European biotechnology company focused on the development and commercialization of antiviral therapeutics and vaccines for hepatitis B, HIV, and other serious infections. The Company s lead candidate, ABX203, is a therapeutic vaccine intended to treat hepatitis B that is currently being evaluated in a pivotal Phase IIb/III trial. Abivax has announced the completion of enrollment for the trial and expects to report data in the fourth quarter of ABX203 is designed to present two highly immunogenic HBV antigens to the immune system to promote sustained viral clearance. The candidate was licensed from the Center for Genetic Engineering and Biotechnology (CIGB) of Cuba in 2013, and Abivax has exclusive rights to market the vaccine in Europe, Australia, New Zealand, select Asian countries, and African territories. The Company is in negotiations with the CIGB over rights to market ABX203 in other major markets like the US and China. Abivax is also developing ABX464 as a novel treatment for patients infected with the human immunodeficiency virus (HIV). ABX464 is a small molecule inhibitor of the HIV Rev protein, which plays a critical role in the production of mature, infectious virus. Abivax is currently evaluating ABX464 in a Phase IIa study in treatment naïve patients and anticipates reporting top-line data in January Abivax has generated roughly 1,000 compounds targeting viral RNAs with its antiviral platform and is testing vaccines against dengue, chikungunya, and Ebola in ongoing preclinical studies. Figure 1 shows the Company s commercial products and developmental pipeline. Figure 1. Abivax s Commercial Products and Developmental Pipeline Source: LifeSci Capital Page 6

7 ABX203: Therapeutic Vaccine to Treat Chronic Hepatitis B ABX203 is a therapeutic vaccine for chronic hepatitis B consisting of virus-like particles (VLPs) that contain HBV surface antigen (HBsAg) and HBV core antigen (HBcAg). The Company licensed ABX203 from the CIGB in 2013, providing the Company with exclusive rights to market ABX203 in Europe, Australia, New Zealand, most of Africa, and select Asian countries. There are two approved therapies to treat HBV infection: a class a drugs known as nucleoside analogs (NAs) and interferons such as interferon-α (IFN-α). These treatments can substantially reduce viral load in patients with chronic HBV. However, both NAs and interferons have low rates of HBV E antigen (HBeAg) conversion, a sign inactive disease, and HBsAg loss, an indicator of functional cure. There are additional problems that exist with the use of either of these therapies. All NAs carry a boxed warning related to potential effects on mitochondrial function and long-term NA use is associated with the development of resistant HBV strains. Interferons are only effective in approximately 20% of patients, and are associated with substantial side effects such as flu-like symptoms, mood changes, and depression. 6 ABX203 has been evaluated in 4 clinical trials to date and has been shown to be an immunogenic therapeutic vaccine that has a favorable safety profile compared to pegylated interferon-α (PEG-IFN-α). ABX203 is currently under evaluation in a pivotal Phase IIb/III study, and the Company expects to report topline results in the fourth quarter of The current thinking in the field is that multiple treatment approaches are likely required to produce a functional HBV cure, and ABX203 may be an integral component if successful in clinical trials. Mechanism of Action for ABX203 Anti-HB antibodies play a critical role in the immune response to HBV infection, and antibodies against each HBV protein are observed in human sera following transient infection. ABX203 is designed to present two highly immunogenic HBV proteins to the immune system to promote sustained immune activation and viral clearance. The endogenous HBV capsid contains copies of the HBV core (HBc) protein, which is highly immunogenic due to its interaction with cell surface receptors on naïve B cells. 7 This binding results in B cell activation and the production of anti-hbc immunoglobulin M (IgM) antibodies. The HBV surface (HBs) protein has been shown to generate a T-cell mediated response and has been successfully commercialized in multiple prophylactic HBV vaccines. ABX203 activates these two components of the immune system to induce a cell-mediated immune response to HBsAg and HBcAg that promotes viral clearance. In the immune response, CD4 + helper T cells play an important role in stimulating the production of neutralizing antibodies against viral particles in circulation, while CD8 + cytotoxic T cells are responsible for eliminating HBV-infected hepatocytes. 8 The immune response elicited by the vaccine is primarily driven by the CD4 + T cell response. 6 Wong, D.K.H. et al., Effect of Alpha-Interferon Treatment in Patients with Hepatitis B e Antigen-Positive Chronic Hepatitis B: A Meta-analysis. Annals of Internal Medicine, 119(4), pp Lazdina, U, et al., Molecular Basis for the Interaction of the Hepatitis B Virus Core Antigen with the Surface Immunoglobulin Receptor on Naive B Cells. Journal of Virology, 75(14), pp Busca, A and Kumar, A, Innate immune responses in hepatitis B virus (HBV) infection. Virology Journal, 11, pp22. Page 7

8 Preclinical Studies The CIGB conducted a preclinical study in female Balb/c mice to evaluate the safety and immunogenicity of an HBV vaccine administered via nasal administration. 9 For this study, the investigators expressed and isolated recombinant HBsAg and HBcAg using a recombinant form of the yeast P. pastoris and the E. coli strain W3110, respectively. Both antigens endogenously form virus-like particles that were visualized with electron microscopy (EM). Groups of 8 mice received one of four immunization dosing strategies: Group 1 Intranasal 5 µg of HBsAg in PBS. Group 2 Intranasal 5 µg of HBsAg + 5 µg of HBcAg. Group 3 Intramuscular 5 µg of HBsAg in alum. Group 4 Intramuscular 5 µg of HBcAg in PBS. Mice were inoculated on day 0 and day 14, and sera were collected on day 21. Figure 2 highlights HBs and HBcspecific immunoglobulin G (IgG) responses following two vaccine doses. Inoculation with the combined formulation (Group 2) led to the highest IgG titers compared to the titers induced with any of the other formulations tested (p<0.001). In particular, the HBsAg and HBcAg formulation led to higher HBsAg-specific titers than the HBsAg only formulation (Group 1). Conversely, the combination also led to higher HBcAg-specific titers than the HBcAg only formulation (Group 4). Thus, the combination of HBsAg and HBcAg in a vaccine can amplify the immune response more than either antigen alone. These results suggest that the combination of HBsAg and HBcAg may be ideally suited as a therapeutic vaccine for HBV. Figure 2. HBV-Specific Immune Response Following Two Vaccine Doses Source: Aguilar, J.C. et al., Aguillar, JC, et al., Development of a nasal vaccine for chronic hepatitis B infection that uses the ability of hepatitis B core antigen to stimulate a strong Th1 response against hepatitis B surface antigen. Immunology and Cell Biology, 82, pp Page 8

9 Safety Profile Abivax has demonstrated in multiple clinical trials to date that the ABX203 vaccine candidate, containing a mixture of HBsAg and HBcAg, is safe and well-tolerated. 10 Toxicology studies confirmed that the vaccine did not produce irritation or local damage via the nasal administration route. 11 In a Phase II/III study, the CIGB found that ABX203 has a favorable safety profile compared to PEG-IFN-α. In the trial, there was at least one drug-related adverse event in 77% of ABX203-treated patients compared to 99% in the PEG-IFN-α group. In addition, three patients treated with PEG-IFN-α experienced a drug-related serious AE as opposed to 0 patients in the ABX-treated group. Overall, the CIGB was encouraged by the safety data, which demonstrated that ABX203 had a suitable profile for use in chronic HBV patients. Hepatitis B Hepatitis B (HepB) is the most common serious infection of the liver. It is caused by the hepatitis B virus (HBV), which is a small, enveloped virus that is transmitted through blood and infected bodily fluids. Chronic HBV infections, which develop primarily in infants and young children, can lead to life-threatening liver cirrhosis, liver failure, and liver cancer later in life. According to the HepB Foundation, there are roughly 1.25 million patients in the US and an estimated 400 million patients worldwide with chronic HepB. Universal vaccination has been implemented in about 80% of countries, in accordance with World Health Organization (WHO) guidelines. 12 This high rate of vaccination has had a substantial impact on the number of chronic HepB cases, but there is still demand for treatment options in patients that are already infected with the virus or without access to vaccination programs and who subsequently become infected. Causes and Pathogenesis. HepB is caused by the DNA virus HBV that preferentially infects and damages hepatocytes in the liver. The virus evolved approximately 1,500 years ago from an avian ancestor strain. 13 It s circular genome contains for four genes called C, P, S and X. They encode the following proteins: C viral core protein HBcAg. P DNA polymerase. S surface antigen HBsAg on the viral particle. X a protein of unknown function. HBV is one of the only DNA viruses that uses reverse transcription, which is a process that converts RNA into DNA. This feature of HBV is critical to its viral life cycle. 10 Betancourt, AA, et al., Phase I clinical trial in healthy adults of a nasal vaccine candidate containing recombinant hepatitis B surface and core antigens. International Journal of Infectious Diseases, 11(5), pp Porras, DN et al., Determinacio n del potencial irritante de un candidato vacunal nasal que combina al antı geno de superficie del virus de la hepatitis B con el antı geno de la nucleoca psida. Biotecnologı a Aplicada, 21, pp Romano, L. et al., The worldwide impact of vaccination on the control and protection of viral hepatitis B. Digestive and Liver Disease, 43(1), pps Zhou, Y. et al., Bayesian estimates of the evolutionary rate and age of hepatitis B virus. Journal of Molecular Evolution. 65(2), pp Page 9

10 A detailed view of the life cycle of HBV is presented in Figure 3. HBV initially circulates in the bloodstream and subsequently infects the liver. It binds to a receptor on the surface of cells called NTCP or SLC10A1, and enters the cytoplasm via endocytosis. The viral DNA is released into the cytoplasm and is transported into the nucleus where the cell s machinery transcribes it into mrna. This mrna is reverse-transcribed to make new copies of the viral genome or is translated to produce viral proteins. Virus particles are packaged in the cytoplasm and then are secreted by the cells, completing the viral life cycle. 14 Figure 3. Hepatitis B Virus Life Cycle Source: LifeSci Capital Chronic HBV infection generally consists of two phases: an early replicative phase with active liver disease, and a late or low replicative phase with remission of liver disease. Chronic HBV is the most common risk factor for liver cancer. According to the Hepatitis B Foundation, approximately 90% of infected adults will clear infection and develop long-term immunity, while this is only true for 50% of adolescents. 15 Those with prolonged, chronic HBV infections, also known as carriers, are characterized by the presence of infection for longer than 6 months. Chronic HBV infection has long-term effects on the liver including tissue damage, inflammation, viral propagation, and DNA damage, which can disrupt regulatory sequences that control cell growth. 16 These consequences of infection lead to roughly 25-40% of HBV carriers developing serious liver complications at some point in their lifetime. 17 As such, HBV causes about 50% of hepatocellular carcinoma and 30% of liver cirrhosis cases. 18,19 14 Yang, H.C. et al., Persistence of hepatitis B virus covalently closed circular DNA in hepatocytes: molecular mechanisms and clinical significance. Emerging Microbes and Infections, 3(9), pp Chisari, F.V. et al., Pathogenesis of hepatitis B virus infection. Pathology Biology, 58(4), pp Lai, C.L. et al., Prevention of hepatitis B virus-related hepatocellular carcinoma with antiviral therapy. Hepatology, 57(1), pp Rapti, I. et al., Risk for hepatocellular carcinoma in the course of chronic hepatitis B virus infection and the protective effect of therapy with nucleos(t)ide analogues. World Journal of Hepatology, 7(8), Page 10

11 Symptoms and Diagnosis. Symptoms of an acute HBV infection include jaundice and liver inflammation. The diagnosis of hepatitis B virus (HBV) infection was revolutionized by the discovery of the hepatitis B surface antigen HBsAg. HepB is diagnosed by testing for signs of the virus in blood samples. Simple and inexpensive blood tests for HBsAg and other HBV antigens and antibodies are performed routinely in clinics around the world. Polymerase chain reaction (PCR) assays are used for direct determination of hepatitis B virus DNA (HBV DNA). The diagnosis of HBV infection can also be made by the detection of HBsAg or hepatitis B core antigen (HBcAg) in liver tissues by immunohistochemical staining. By assessing which relevant antigen, antibody, and DNA are present, a diagnosis can be made. HBsAg serves as the first indication of infection, and Anti-HBc (hepatitis B core antibody) serves to differentiate between acute and chronic. HBeAg is used to differentiate between different phases of chronic infection. The blood tests used for diagnosis are in Figure 4 with their respective clinical indications and populations who should be tested. Figure 4. HBV Blood Tests Blood Test Positive Indication Relevant Populations HBsAg (hepatitis B surface antigen) Acute or chronic infection Adolescents in high risk areas Pregnant women Previous HBV patient contact IV drug users Multiple sex partners Men who have sex with men HCV and HIV infected Anti-HBc (hepatitis B core antibody) Acute infection HBsAg positive (+) patients HBeAg (hepatitis B e antigen) Phase I or II chronic infection (phase III/IV if negative) Anti-HBc negative (-) patients Anti-HBs (hepatitis B surface antibody) Viral clearance, future HBV resistance Previously Infected Chronic HBV HBV DNA Current acute or chronic infection Organ/Tissue/Blood donor HBsAg (+) pregnant women Source: Aspinall, E.J. et al., Perz, J.F. et al., The contributions of hepatitis B virus and hepatitis C virus infections to cirrhosis and primary liver cancer worldwide. Journal of Hepatology, 45(4), pp Page 11

12 When the viral antigens HBsAg and HBeAg are no longer present in the blood serum and antibodies against them are present, the patient s immune system has mounted a successful response and cleared the acute infection for the near-term. 20 Thus, the screening of these antigens is thought to be sufficient for at risk populations. Chronic HBV is diagnosed by the detection of HBsAg in a patient s blood or serum for a period greater than 6 months. Adult patients will transition into chronic HepB about 5-10% of the time, compared with 50% in adolescents and 90% in neonates whose mothers are HBeAg positive. 21 The presence of HBeAg can be used as a point of clinical differentiation, as it represents higher virulence and replication rate if present. The phases of chronic HBV are presented in Figure 5. Progression through these phases is followed closely with intermittent blood testing, which aids is assessing future risk for liver complications. For individuals with chronic HBV, cirrhosis develops in 8-20% of patients within 5 years, and out of the cirrhotic patients about 2-5% will develop hepatocellular carcinoma each year. 20 Phase of Disease 1. Immune Tolerant 2. Immune Clearance 3. Inactive Carrier 4. HBeAg-Negative 5. HBsAg-Negative Figure 5. Chronic HBV Disease Phases HBeAg (+) HBsAg (+) High HBV DNA Low aminotransferase Highly contagious HBeAg (+) HBsAg (+) Low HBV DNA Moderate/severe inflammation & necrosis HBeAg (-), Anti-HBe (+) HBsAg (+) No/low HBV DNA Normal aminotransferase HBeAg (-), Anti-HBe (+) HBsAg (+) Periods of HBV reactivation Oscillating levels of HBV DNA HBeAg (-), Anti-HBe (+) HBsAg (-), Anti-HBs (+) No/low HBV DNA Immunosuppression may reactivate Characteristics Source: European Association for the Study of the Liver 22 No/low inflammation & necrosis Slow progression of fibrosis Immediate, lasting up to several years Moderate progression of fibrosis Initiate HBsAb production Lasts several weeks to years Good long-term prognosis Low risk of cirrhosis / cancer Lasts years to decades, HBV DNA tests 2x/yr. Liver inflammation (hepatitis) High risk of advanced cirrhosis & hepatocellular carcinoma Lasts years, w/ HBV DNA & alanine aminotransferase tests Phase may result from treatment or spontaneously 20 Aspinall, E.J. et al., Hepatitis B prevention, diagnosis, treatment and care: a review. Occupational Medicine, 61(8), pp European Association for the Study of the Liver, EASL Clinical Practice Guidelines: Management of chronic hepatitis B virus infection. Journal of Hepatology, 57(1), pp Page 12

13 Treatment. The primary goal of treating chronic HepB is to prevent the virus from causing liver cirrhosis and cancer. There are several available treatments. The most common therapies are listed and discussed in detail below. Nucleoside Analogs (NAs) Nucleoside analogs inhibit viral DNA polymerase activity. They are administered orally and are dosed once-daily. In chronic HBV patients treated with these agents, HBeAg is cleared in 20-30% and remission of virus is achieved in 65-70% of patients at 12 months. 23 Five examples of nucleoside analogs are lamivudine, adefovir, entecavir, telbivudine, and tenofovir. These are oral therapy taken daily for at least one year. Pathogen resistance can occur with long-term use, and the mode of resistance is due to selection for HBV polymerase mutants. Interferon alpha (IFN-α) IFN-α therapy inhibits viral replication and enhances immune responses against the virus. The drug is administered multiple times per week over 6-12 months. Treatment is only effective in approximately 20% of patients, and can cause flu-like symptoms, mood changes, and depression. 24 Pegylated interferon alpha (PEG-IFN-α) PEG-IFN-α is a form of IFN-α conjugated to a polyethylene glycol (PEG) molecule. This modification stabilizes the drug and increases the period of exposure, allowing for once-weekly dosing. PEG-IFN-α is thought to have the same effects on HBV replication as IFN-α but with greater magnitude. 25 Figure 6 highlights the clinical response to treatment with entecavir, tenofovir, or PEG-IFN-α in patients with chronic hepatitis B. 26 These data were obtained in separate clinical trials. Both NAs resulted in high rates of patients who had no detectable levels of HBV DNA. However, in both HBeAg positive and negative patients, the rate of HBsAg loss, an indication of a functional cure, was very low. In HBeAg-positive patients, entecavir and tenofovir resulted in a 2% and 3.2% loss of HBsAg. PEG-IFN-α resulted in HBsAg loss in 2.9% of patients. The rate of HBsAg loss was near 0% with all three treatments in HBeAg-negative patients. These results highlight the positive effects on viral load achieved with nucleotide analogs or PEG-IFN-α treatment, but the limited effect on HBsAg and the need for improved treatments capable of higher cure rates. 23 Papatheodoridis, G.V. et al., Nucleoside analogues for chronic hepatitis B: antiviral efficacy and viral resistance. American Journal of Gastroenterology, 97(7), pp Wong, D.K.H. et al., Effect of Alpha-Interferon Treatment in Patients with Hepatitis B e Antigen-Positive Chronic Hepatitis B: A Meta-analysis. Annals of Internal Medicine, 119(4), pp Craxi, A. et al., Pegylated interferons for chronic hepatitis B. Antiviral Research, 60(2), pp Zoulim, F and Durantel, D, Antiviral Therapies and Prospects for a Cure of Chronic Hepatitis B. Cold Spring Harbor Laboratory Press, 5(4), pp a Page 13

14 Figure 6. Clinical Response to Entecavir, Tenofovir, or PEG-IFN-α at 48 Weeks Entecavir Tenofovir PEG-IFN-α HBeAg Positive HBV DNA undetectable 67% 76% 25% HBeAg seroconversion 21% 21% 27% ALT normalization 68% 68% 39% HBsAg loss 2% 3.2% 2.9% HBeAg Negative HBV DNA undetectable 90% 93% 63% ALT normalization 78% 76% 38% HBsAg loss 0.3% 0% 0.6% Source: Zoulim, F. and Durantel, D., 2015 Hepatitis B Market Information Epidemiology. The World Health Organization (WHO) estimates that approximately 240 million individuals worldwide are chronic carriers of HBV, meaning that HBsAg has been present in their system for 6 months or more. 27 These patients have a 25% chance of dying due to HBV-associated liver cancer or cirrhosis, 28 contributing to the 780,000 HBV-related deaths each year. The regions with the highest prevalence of HBsAg positive HBV carriers are Africa with 8.83% and the Western Pacific with 5.26%, accounting for a total of 171 million affected individuals. The prevalence of chronic HBV in the US and EU is the lowest worldwide due to the adoption of universal vaccination. The prevalence is 0.27% in the US and 2.06% in the EU. 29 This amounts to approximately 844,000 chronic HBV carriers in the US and 14.6 million in the EU. The worldwide prevalence of chronic HBV carriers is presented in Figure 7. Data has also been reported on particular countries of interest given the licensing rights of Abivax Komatsu, H. et al., Hepatitis B virus: Where do we stand and what is the next step for eradication? World Journal of Gastroenterology, 20(27), pp Schweitzer, A. et al., Estimations of worldwide prevalence of chronic hepatitis B virus infection: a systematic review of data published between 1965 and Lancet, 386(10003), pp Page 14

15 Figure 7. Worldwide Estimate of the Chronic HBV Population Region Prevalence Population Chronic HBV Carriers Africa 8.83% 857 M 75.7 M North and South America US 0.81% 0.27% 937 M 312 M 7.6 M 0.8 M East Mediterranean 3.01% 579 M 17.4 M Europe 2.06% 899 M 14.6 M* South East Asia Thailand West Pacific Australia China Japan New Zealand Philippines South Korea Singapore Total 1.90% 6.42% 5.26% 0.37% 5.49% 1.02% 4.11% 4.63% 4.36% 4.09% 1,790 M 66 M 1,811 M 22 M 1,360 M 127 M 4.4 M 93.4 M 48.5 M 5.1 M * Denotes the exclusion of Russia Source: Schweitzer, A. et al., M 4.3 M 95.3 M 0.1 M 74.6 M 1.3 M 0.2 M 4.3 M 2.1 M 0.2 M M Market Size. The three primary treatments for HBV are Roche s (VTX: ROG.VX) Pegasys (pegylated interferon alfa-2a), Bristol-Myers Squibb s (NYSE: BMY) Baraclude (entecavir), and Gilead s (NasdaqGS: GILD) Viread (tenofovir). The sales figures for these therapies, shown in Figure 8, represent the vast majority of sales for the HBV market as a whole. Sales figures in 2014 were $928 million for Pegasys, $1.4 billion for Baraclude, and $1.1 billion for Viread. These three therapies represent a $3.4 billion market for HBV, although it should be noted that not all of these sales are attributable to the treatment of HBV. Pegasys is also used to treat hepatitis C virus (HCV), and Viread is also indicated for HIV. Baraclude is the only therapy in this analysis exclusively indicated for HBV, and its peak sales of $1.5 billion highlight the market opportunity for an effective HBV therapy. Figure 8. Annual Sales in Millions for Currently Available HBV Drugs Drug Pegasys (pegylated interferon alfa-2a) Baraclude (entecavir) Viread (tenofovir) Company Patent Protection Roche 2018 $1,350 $1,546 $1,216 $928 Bristol Myers Squibb 2016 (EU & Japan) $1,196 $1,388 $1,527 $1,441 Gilead 2018 $738 $849 $959 $1,058 Source: LifeSci Capital Page 15

16 Abivax has licensed rights to market ABX203 in more than 28 European countries, the majority of Africa, Australia, New Zealand, and parts of Asia. We currently view Europe as the primary opportunity for ABX203 and performed an analysis in Figure 9 that approximates the overall size of the European market to be $55 billion. A market penetration of 5% would represent a $2.7 billion opportunity for Abivax. We make the following assumptions in our analysis: Chronic HBV Carriers We assume that there are 14.6 million patients with chronic HBV in Europe, and exclude Russia from our analysis because Abivax does not hold rights to market ABX203 in this region. 30 Active / Progressive Disease We assume 25% of the chronic HBV population will experience active or progressive disease, and that these people are most likely to be aware of their HBV status and seek out curative treatment options. Vaccine Regimen Cost We assume that a full dosing regimen of ABX203 could be priced at $15,000. We considered the annual treatment costs for Baraclude at $14,800 and Viread at $10,400 and assumed that Abivax s ABX203 would be priced within this range. Figure 9. European HBV Market Opportunity and Potential ABX203 Sales Chronic HBV Carriers* 14.6 million Active / Progressive Disease 25% Vaccine Regimen Cost $20,000 Total Market Size $54.8 billion Market Penetration 5% ABX203 Sales * Excluding Russia from total Source: LifeSci Capital $2.7 billion HBV Healthcare Burden. Figure 10 shows the prevalence of complications among HBV carriers. We found that approximately 49,000 deaths occur each year in the EU to due to liver cancer and liver cirrhosis that resulted from chronic HBV infection. This number reflects a significant unmet need in the chronic HBV treatment space. We used the following assumptions in our analysis: Liver Cancer and Cirrhosis Deaths We assume that there are approximately 47,100 deaths due to liver cancer in the EU each year, and 84,700 deaths due to liver cirrhosis. 31 Liver Cancer and Cirrhosis Deaths due to HBV We assume that approximately 50% of liver cancer deaths are due to HBV, and 30% of liver cirrhosis deaths are a result of HBV Schweitzer, A. et al., Estimations of worldwide prevalence of chronic hepatitis B virus infection: a systematic review of data published between 1965 and Lancet, 386(10003), pp Blachier, M. et al., The burden of liver disease in Europe: A review of available epidemiological data. Journal of Hepatology, 58(3), pp Page 16

17 Indication Figure 10. Annual HBV Related Disease Deaths in the EU Annual Deaths Proportion Due to HBV HBV-Related Deaths Liver Cancer 47,100 50% 23,600 Liver Cirrhosis 84,700 30% 25,400 Total HBV-Related Deaths 49,000 Source: LifeSci Capital We estimate the burden of treating active chronic HBV and associated complications to be $14.5 billion in the EU each year. This analysis was performed in Figure 11 and reflects the drastic burden of HBV on European healthcare systems. Notably, the vast majority of associated costs are derived from treating the complications of HBV. This highlights the demand for a therapeutic that prevents progression into liver cancer and cirrhosis. EU Chronic HBV Population We assume the EU population affected by chronic HBV is approximately 14.6 million. 33 Proportion of HBV Patients with Associated Diseases We assume that 25% of chronic HBV carriers have active disease and seek out treatment. Of chronic HBV carriers, 6.9% have chronic active HBV, 12.0% have compensated cirrhosis, 5.6% have decompensated cirrhosis, and 0.5% have hepatocellular carcinoma. 34 Weighted Average Annual Cost Per Patient We utilized the average annual cost per patient for indications of chronic active HBV, compensated and decompensated cirrhosis, and hepatocellular carcinoma in the countries of France, Italy, Spain, and the United Kingdom. We then took a weighted average of each country s average cost based on its population size. We assume an annual treatment cost per patient of 1,977 for active chronic HBV, 2,247 for compensated cirrhosis, 7,736 for decompensated cirrhosis, and 7,630 for hepatocellular carcinoma. 35 EU Composition We assume that average patient costs in France, Italy, Spain, and the United Kingdom are representative of costs across the broader EU market. 32 Perz, J.F. et al., The contributions of hepatitis B virus and hepatitis C virus infections to cirrhosis and primary liver cancer worldwide. Journal of Hepatology, 45(4), pp Schweitzer, A. et al., Estimations of worldwide prevalence of chronic hepatitis B virus infection: a systematic review of data published between 1965 and Lancet, 386(10003), pp Lavanchy, D. et al., Hepatitis B virus epidemiology, disease burden, treatment, and current and emerging prevention and control measures. Journal of Viral Hepatitis, 11(2), pp Brown, R.E. et al., Hepatitis B Management Costs in France, Italy, Spain, and the United Kingdom. Journal of Clinical Gastroenterology, 38(3), pps Page 17

18 % of Chronic HBV Patients Figure 11. Annual HBV Related Disease Costs & Total Burden in the EU Chronic Active HBV Compensated Cirrhosis Decompensated Cirrhosis 6.9% 12.0% 5.6% 0.5% Number of Patients 1.0 M 1.8 M 0.8 M 0.1 M Price per Patient Indication Burden Total EU Burden 1,980 ($2,200) 2,030 M ($2,260 M) 2,250 ($2,500) 4,020 M ($4,470 M) Source: LifeSci Capital 7,740 ($8,590) 6,450 M ($7,160 M) Hepatocellular Carcinoma 7,630 ($8,470) 570 M ($630 M) 13,100 M ($14,500 M) Clinical Data Discussion for ABX203 ABX203 has been tested in 4 clinical trials to date and is currently under evaluation in a pivotal Phase IIb/III trial as an adjunct therapy to nucleoside analogs (NAs). Abivax has completed enrollment for this study and expects to report data in the fourth quarter of Abivax plans to use data from this pivotal trial to support approval in certain countries as early as 2018 and may pursue partnership opportunities for EU and Japanese territories after the data are available. Phase I Trial in Healthy Adults The CIGB conducted a Phase I study in 19 healthy adult males to determine the safety, tolerability, and immunogenicity of ABX203, which was originally called NASVAC. CIGB demonstrated that the vaccine was safe and immunogenic, leading to HBs seroconversion of 75% of the volunteers at day 90 following a five-dose vaccine schedule. Trial Design. This randomized, double-blind, placebo-controlled Phase I study assessed the safety and immunogenicity of ABX203 in 19 healthy adult volunteers. 36 Subjects were randomized to receive a combination of 50 µg HBsAg and 50 µg HBcAg or 0.9% saline solution as placebo. Vaccine doses were administered on day 0, 7, 15, 30, and 60 days. Adverse events were monitored at 1, 6, 12, 24, 48, and 72 hours, as well as at 7 and 30 days post-dosing. Antibody titers were measured using ELISA kits at days 30 and 90. Trial Results. ABX203 was found to be safe, well-tolerated, and immunogenic in this population of healthy adults. Administration of the vaccine resulted in anti-hbc seroconversion in 100% of the volunteers by day 90 and in 25% of volunteers as early as day 30. A seroprotective titer of anti-hbs, which is considered to be antibody titers greater than 10 IU/L, was achieved in 75% of subjects by day 90. This result is shown in Figure 12. At day 90, the 36 Betancourt, A.A. et al., Phase I clinical trial in healthy adults of a nasal vaccine candidate containing recombinant hepatitis B surface and core antigens. International Journal of Infectious Diseases, 11(5), pp Page 18

19 geometric mean antibody titer was 64.8 IU/L. No volunteers in the placebo group achieved seroconversion for either anti-hbc or anti-hbs antibodies. Figure 12. Antibody Titers Against HBs Protein Following Administration of Bivalent HBV Vaccine Source: Betancourt, A.A. et al., 2007 Adverse events (AEs) were mild in intensity and transient. Common AEs included sneezing (34.1%), runny nose (12.2%), nasal congestion (9.8%), headache (9.8%), and general malaise (7.3%). Overall, there were comparable numbers of adverse events in the vaccinated and placebo groups. Phase II/III Trial in Treatment-Naïve Hepatitis B Patients The CIGB tested ABX203 in a randomized, active-controlled study comparing the safety and efficacy of ABX203 to PEG-interferon in 160 treatment-naïve patients with chronic hepatitis B. ABX203 was found to induce long-lasting reductions in viral load that appeared to be more durable than the effects induced with interferon-α (PEG-IFN-α). Trial Design. This randomized, open-label, active-controlled Phase II/III study tested the safety and immunogenicity of ABX203 in 160 treatment-naïve patients with chronic HBV. 37 Patients were randomized to receive either 24 weeks of ABX203 or 48 weeks of pegylated interferon-α (PEG-IFN-α) according to the following dosing schedule: ABX203 Each dose was administered via intranasal inoculation every 14 days and contained 100 µg of antigens. Patients received a total of 10 doses over 24 weeks with the last 5 doses paired with an additional subcutaneous injection of the vaccine. PEG-IFN-α Patients in this group received weekly subcutaneous injections of 180 µg of PEG-IFN-α for 8 weeks Page 19

20 Patients were evaluated at 12, 24, 48, 72, and 96 weeks following the start of treatment. The primary endpoint was the number of patients showing an immune and/or biochemical response at 96 weeks, including changes in serum HBV DNA, clearance of HBeAg and HBsAg, and liver enzyme levels. Trial Results. The CIGB observed that vaccination with ABX203 led to a 3-log reduction in viral load during the 24 weeks of treatment. 38 Patients treated with PEG-IFN-α had a comparable decrease in viral load for the duration of treatment. For ABX203-treated patients, viral loads remained low 24 weeks after the end of treatment. However, 24 weeks after stopping PEG-IFN-α, patients experienced nearly a 2-log increase in viral load. This result is shown in Figure 13. Viral loads eventually rebounded to roughly baseline levels in both groups. This rebound took 48 weeks in patients treated with PEG-IFN-α, compared to 72 weeks in the ABX203-treated patients, suggesting that ABX203 may lead to more durable effects on HBV burden. Figure 13. Rebound in Viral Load Following Treatment with ABX203 or PEG-IFN-α Source: Company Reports ABX203 was found to have a favorable safety profile compared to PEG-IFN-α. As shown in Figure 14, there was at least one drug-related adverse event in 77% of ABX203-treated patients compared to 99% in the PEG-IFN-α group. In addition, three patients treated with PEG-IFN-α experienced a drug-related serious AE as opposed to 0 patients in the ABX-treated group. Overall, CIGB was encouraged by the safety data, which demonstrated that ABX203 had a suitable profile for use in chronic HBV patients. 38 Mahtab, MA, et al., Phase III study of a therapeutic vaccine candidate (NASVAC) containing the hepatitis B virus core antigen (HBcAg) and the HBV surface antigen (HBsAg) for treatment of patients with chronic hepatitis B. Hepatology International, 8(1), pp Page 20

21 Figure 14. Adverse Events Following Treatment with ABX203 or PEG-IFN-α ABX203 n=74 PEG-IFN-α n=75 Patients with at least 1 AE 57 (77%) 75 (100%) Patients with at least 1 drug-related AE 0 (0%) 3 (4%) Patients with at least 1 serious AE 57 (77%) 74 (99%) Patients with at least 1 drug-related serious AE 0 (0%) 3 (2%) Source: Mahtab, M.A. et al., 2014 Phase IIb/III Trial in Patients with Chronic Hepatitis B Abivax is currently conducting a Phase IIb/III trial evaluating the safety and efficacy of ABX203 for the treatment of patients with chronic hepatitis B. The Company has completed enrollment for the trial and expects to report data in the fourth quarter of Abivax plans to use results from this pivotal trial to support approval in certain countries as early as 2018 and may pursue partnership opportunities for EU and Japanese territories after the data are available. Trial Design. This randomized, open-label Phase IIb/III trial is testing the safety and efficacy of ABX203 as an adjunct therapy to nucleoside analogs (NAs) in the treatment of chronic hepatitis B. The trial has enrolled 276 adult patients who are E-antigen negative and have been treated with NAs for at least 2 years. Enrolled subjects were randomized to receive either ABVX203 combined with NAs background therapy or NAs alone for 24 weeks of treatment. The primary endpoint is the percentage of patients with viral loads under 40 IU/m and normal alanine aminotransferase (ALT) and aspartate aminotransferase (AST) levels at all visits between weeks 24 and 48. Secondary endpoints include the clinical response, measured by changes in viral load, liver function, and time to relapse, at week 48 and 96, T-cell response to HBcAg and HBsAg at week 48, and safety measurements through 96 weeks. Other HBV Treatments in Development There is a low treatment success rate for HBV patients, underscoring the need for ongoing clinical development in the HBV space. In fact, long-term use of NAs is associated with an HBeAg seroconversion rate of 20-25% and a HBsAg loss rate of 1% or less. 39 Some of the targets for HBV include: HBV entry inhibitors. Inhibitors of HBV cccdna formation. Degradation of HBV cccdna. HBV cccdna transcription inhibitor. 39 Liaw, YF et al., HBeAg seroconversion as an important end point in the treatment of chronic hepatitis B. Hepatology International, 3(3), pp Page 21

22 drnai to inhibit viral replication. HBV capsid assembly inhibitor. HBsAg secretion inhibitor. Therapeutic vaccines. Next-generation NAs and interferons. Figure 15 highlights many treatment candidates in development for chronic HBV patients. Next-generation NAs and interferons under investigation include Gilead s tenofovir alafenamide (TAF), 40,41 Merck s Peg-Intron, 42 Bristol- Myers Squibb s pegylated-interferon lambda, 43 and PharmaEssentia s P1101. Our discussion below focuses on therapeutic vaccine candidates from Gilead and Inovio/Roche 44 as well as other HBV treatment candidates intended to modulate the immune system. Many of the treatments below are complementary and would likely be used in combination with other approved therapies to achieve maximal clinical responses Page 22

23 Figure 15. Other Hepatitis B Drugs in Development Product Company Mechanism of Action Stage Tenofovir Alafenamide Peg-Intron P1101 PEG-Interferon lambda ABX203 GS-4774 INO-1800 (RG7795) GS-9620 REP 2139 ARC-520 TKM-HBV NVP018 NVR Gilead (NasdaqGS: GILD) Merck (NYSE: MRK) PharmaEssentia (Taiwan OTC: 6446.TWO) Bristol-Myers Squibb (NYSE: BMY) Abivax (Euronext Paris: ABVX.PA) Gilead (NasdaqGS: GILD) Inovio/Roche (NasdaqGS: INO; VTX: ROG.VX) Gilead (NasdaqGS: GILD) REPLICor (private) Arrowhead (NasdaqGS: ARWR) Arbutus (NasdaqCM: ABUS) Novira (private) NA Interferon Interferon Interferon Phase III Phase III Phase III ready Phase II Therapeutic Vaccine Phase II 45 Therapeutic Vaccine Phase II 46 Therapeutic Vaccine Phase II TLR-7 agonist Phase II 47,48 HBsAg Release Inhibitor Phase II 49,50 RNA interference Phase IIb 51,52,53 RNA interference cyclophilin inhibitor Phase II 54 Capsid inhibitor Phase I 55,56 Source: LifeSci Capital Page 23

24 HBV Therapeutic Vaccines GS-4774 Gilead Sciences (NasdaqGS: GILD). Gilead, in partnership with GlobeImmune (NasdaqCM: GBIM), is developing GS-4774 as a therapeutic vaccine for individuals with chronic hepatitis B infection. The vaccine consists of heat-inactivated yeast that has been engineered to express a fusion protein containing conserved domains from HBV surface antigen (HBsAg), HBV core antigen (HBcAg), and HBV x protein (HBx). 57 This vaccine was found to be safe, well-tolerated, and immunogenic in a Phase I study. However, in May 2015, GlobeImmune and Gilead announced that GS-4774 failed to lower HBsAg in a Phase II study evaluating the vaccine in chronic HBV patients on background oral antivirals (OAVs). The companies are awaiting results from a second Phase II trial in treatment-naïve HBV patients before reaching a decision on the future of the GS-4774 program. Phase II Trial for GS-4774 in Virally-Suppressed Patients. GlobeImmune and Gilead announced topline data from this study in May This randomized, open-label, controlled Phase II study evaluated the safety and efficacy of GS-4774 in 178 chronic HBV patients on oral antiviral background therapy. 58 Patients were randomized to receive GS-4774 at one of three dose strengths every 4 weeks for a total of 6 doses in combination with OAV therapy or OAV therapy alone. The primary endpoint was the mean log change in the serum concentration of HBsAg at 24 weeks. The companies reported that GS-4774 did not induce a reduction in HBsAg at 24 weeks relative to the OAV-only treatment group. Specific values were not reported. At 48 weeks the highest dose of GS- 4774, 40 yeast units (YU), led to a 0.17 log reduction in HBsAg compared with a 0.04 log decrease in HBsAg in the OAV-only group. This effect was not significant. A full characterization of T-cell responses to treatment in this trial is ongoing. The vaccine was observed to be safe and well-tolerated with injection site reactions as the primary adverse event in the trial. This safety profile is consistent with the results from the Phase I study, which evaluated the safety and tolerability of GS-4774 in 60 healthy volunteers. 59 Phase II Trial for GS-4774 in Combination with Tenofovir. Gilead and GlobeImmune are conducting a randomized, open-label, active-controlled trial to determine the safety and efficacy of GS-4774 in 195 chronic HBV patients not currently on treatment. 60 The primary endpoint is the mean log change in the serum concentration of HBsAg at 24 weeks. Patients have been randomized to receive 2 yeast units (YU), 10 YU, or 40 YU of GS-4774 in addition to 300 mg of tenofovir disoproxil fumarate (TDF), or TDF alone. GS-4774 is administered subcutaneously every 4 weeks for a total of 6 doses during the first 20 weeks of the 48-week study period. GlobeImmune and Gilead expect to report topline results in the middle of INO-1800 Inovio Pharmaceuticals (NasdaqGS: INO) & Roche (VTX: ROG.VX) Inovio and Roche are developing an HBV therapeutic vaccine consisting of DNA plasmids that encode HBsAg and HBcAg. Inovio demonstrated the immunogenicity INO-1800 in a preclinical study and licensed the vaccine candidate to Roche in 2013 as part of a co-development deal. In April 2015, the companies launched a Phase I study evaluating INO-1800 and expect to report topline results in the fourth quarter of Inovio received a $10 million milestone payment upon the start of the Phase I study, which is fully funded by Roche. 57 Gaggar, A et al., Safety, tolerability and immunogenicity of GS-4774, a hepatitis B virus-specific therapeutic vaccine, in healthy subjects: A randomized study. Vaccine, 32(39), pp Page 24

25 Phase I Trial. This randomized, open-label, active-controlled Phase I study is testing the safety, tolerability, and immunogenicity of INO-1800 in 126 chronic HBV patients. 61 Patients must be HBeAg-positive and are randomized to receive either INO-1800 alone or INO-1800 in combination with INO-9112, a DNA plasmid encoding the human interleukin 12 (IL-12) gene. The plasmids are delivered via electroporation. Patients are maintained on background therapy of entecavir or tenofovir and are treated in one of the following study arms: 0.3 mg of INO-1800 (3 or 4 doses). 2 mg of INO-1800 (3 or 4 doses). 9 mg of INO-1800 (3 or 4 doses). 2 mg of INO mg of INO-9112 (3 or 4 doses). 9 mg of INO mg of INO-9112 (3 or 4 doses). 9 mg of INO-1800 (5 or 6 doses). 9 mg of INO mg of INO-9112 (5 or 6 doses). Control (entecavir or tenofovir only). The primary endpoint of the study is a composite safety assessment through 76 weeks after the first dose that includes measures of pain, adverse events, lab abnormalities, and changes in vital signs. Secondary endpoints include measures of immunogenicity and viral load. Immunomodulators GS-9620 Gilead Sciences. Gilead is developing GS-9620, an oral toll-like receptor 7 (TLR7) agonist, as a potential treatment for chronic HBV patients. The goal of this therapy is to induce the production of endogenous interferon α (IFN-α) in the liver without the systemic exposure and associated side effects and toxicities. Preclinical studies in a woodchuck model of chronic HBV found that GS-9620 treatment led to sustained reductions in viral load and HBV surface antigen (HBsAg). 62 These results supported moving GS-9620 into clinical development. The company tested GS-9620 in two similar double-blind Phase Ib studies that enrolled 49 treatment-naïve patients and 51 virologically-suppressed patients, respectively. 63,64 Treatment with GS-9620 did not alter HBV DNA or HBsAg levels, although it did induce peripheral interferon-stimulated gene 15 (ISG15) gene expression. 65 Gilead is currently conducting a randomized, double-blind, controlled Phase II trial evaluating the safety and efficacy of GS-9620 in combination with tenofovir disoproxil fumarate (TDF). 66 Gilead expects to report data from this trial in the fourth quarter of Menne, S. et al., Sustained efficacy and seroconversion with the Toll-like receptor 7 agonist GS-9620 in the Woodchuck model of chronic hepatitis B. Journal of Hepatology, 62, pp Gane, E.J. et al., The oral toll-like receptor-7 agonist GS-9620 in patients with chronic hepatitis B virus infection. Journal of Hepatology, 63, pp Page 25

26 Competitive Landscape Oral Antivirals Are Not a Functional Cure. Treatment with oral antivirals (OAVs) can reduce viral load and prevent further disease progression and liver damage. Lifelong OAV treatment is required to prevent rapid viral rebound and flares that damage the liver. These drugs do not affect HBV cccdna, which is the reservoir of HBV DNA in the nucleus of hepatocytes that underlies chronic infection. OAVs result in HBeAg seroconversion in 20-25% of patients and HBsAg loss in less than 1% of patients. 67 The lack of effect on the HBV DNA reservoir may account for the failure to eliminate HBsAg. Several companies are currently developing treatments that may affect the reservoir DNA. However, the current thinking in the field is that multiple treatment approaches are likely required to produce a functional HBV cure. High Rates of Resistance Complicates Long-Term Therapy. Long-term use of nucleoside analogs (NAs) is associated with high rates of drug resistance. The emergence of resistance leads to acute disease exacerbations and an accelerated progression to acute liver failure, liver transplant, or death. 68, 69 Figure 16 presents the annual incidence rates of drug resistance among NA-naïve chronic HBV patients. Resistance to lamivudine occurs in up to 80% of chronic HBV patients treated for 5 years. Studies have shown that newer NAs such as tenofovir and entecavir have lower rates of drug resistance. Long-term studies have shown a 1.2% resistance rate after 6 years of entecavir monotherapy, and no resistance was observed following 3 years of treatment with tenofovir. 70,71 Figure Year Resistance Rates to Antiviral Therapy Drug Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Lamivudine 23% 46% 55% 71% 80% - Telbivudine HBeAg-Pos 4.4% 21% Telbivudine HBeAg-Neg 2.7% 8.6% Adefovir HBeAg-Neg 0% 3% 6% 18% 29% - Adefovir (LAM-resistant) Up to 20% Tenofovir 0% 0% 0% Entecavir (naïve) 0.2% 0.5% 1.2% 1.2% 1.2% 1.2% Entecavir (LAM resistant) 6% 15% 36% 46% 51% 57% Source: Zoulim, F. et al., Liaw, Y.F. et al., HBeAg seroconversion as an important end point in the treatment of chronic hepatitis B. Hepatology International, 3(3), pp Lok, A.S. et al., Long-term safety of lamivudine treatment in patients with chronic hepatitis B. Gastroenterology, 125(6), pp Nafa, S. et al., Early detection of viral resistance by determination of hepatitis B virus polymerase mutations in patients treated by lamivudine for chronic hepatitis B. Hepatology, 32(5), pp Chang, T.T. et al., Entecavir treatment for up to 5 years in patients with hepatitis B e antigen-positive chronic hepatitis B. Hepatology, 51(2), pp Marcellin, P. et al., Tenofovir disoproxil fumarate versus adefovir dipivoxil for chronic hepatitis B. New England Journal of Medicine, 359(23), pp Zoulim, F. et al., Hepatitis B virus resistance to antiviral drugs: where are we going? Liver International, 31(supp. 1), pp Page 26

27 Toxicities Associated with Existing Therapies Complicate Long-Term Use. Infrequent but serious adverse events have been associated with long-term use of NAs that were identified in post-marketing surveillance. Some of these AEs include myopathy, neuropathy, pancreatitis, and renal impairment. 73 In addition, all of the approved NAs have a boxed warning pertaining to the risk of inhibiting the human DNA polymerase gamma enzyme, which can disrupt mitochondrial DNA replication. 74 This can induce mitochondrial depletion or dysfunction that leads to myopathy, neuropathy, pancreatitis, hepatic injury, and/or bone marrow suppression. Considering the lifelong use of these drugs in the absence of a functional cure, chronic HBV patients need safer alternatives that pose a lower risk of complications than existing therapies. ABX464 Rev Inhibitor to Treat HIV Infection ABX464 is an orally-administered small molecule in development as a potential therapy for HIV-positive patients. ABX464 inhibits the activity of the HIV Rev protein, which is responsible for exporting unspliced viral RNA from the nucleus of HIV-infected cells. Rev-mediated export is necessary for the production of critical HIV structural proteins. Blocking Rev s activity could disrupt the production of functional HIV particles. 75 The chemical structure of ABX464 is shown in Figure 17. ABX464 was identified using a proprietary antiviral drug discovery platform and the Company maintains full rights to the drug. Abivax demonstrated the safety of ABX464 in two Phase I studies that enrolled 72 healthy volunteers. Abivax recently completed a Phase IIa trial evaluating ABX464 in treatment naïve HIV-positive patients and plans to launch another Phase IIa trial in pretreated HIV patients in the first quarter of Figure 17. ABX464 Molecular Structure Mechanism of Action for ABX464 Source: LifeSci Capital ABX464 inhibits the HIV Rev protein to block mrna export from the nucleus and subsequent new virus production. Once HIV-1 DNA has integrated into the genome of an infected cell, transcription commences, producing more copies of the HIV-1 genome as a single mrna transcript. In early stages of infection, the HIV-1 transcript undergoes extensive alternative splicing to produce the range of needed mrnas. The spliced mrna construct is exported from the nucleus, leading to the production of Rev, Tat, and Nef early HIV proteins. 73 Lok, A.S.F. and McMahon, B.J., AASLD practice guideline: chronic hepatitis B. Hepatology, 45, pp Venhoff, N, et al., Mitochondrial toxicity of tenofovir, emtricitabine, and abacavir alone and in combination with additional nucleoside reverse transcriptase inhibitors. Antiviral Therapy, 12, pp Noëlie, C. et al., Long lasting control of viral rebound with a new drug ABX464 targeting Rev mediated viral RNA biogenesis. Retrovirology, 12(30). Page 27

28 Following translation, Rev translocates to the nucleus where it contributes to the export of unspliced and incompletely spliced viral mrna from the nucleus to the cytoplasm. 76 These mrnas code for structural proteins. Figure 18 shows how the expression of Rev induces changes in the types of mrna transcripts that are exported from the nucleus. Rev contains both a nuclear localization signal (NLS) and nuclear export signal (NES), which allow the molecule to shuttle between the nucleus and the cytoplasm through nuclear pore complexes. 77 Rev binds to a specific site on the mrna intron, known as the Rev response element (RRE), resulting in unspliced mrna to be shuttled out of the nucleus. ABX464 binds to the nuclear cap-binding complex (CBC), which is attached to the 5 end of host and viral pre-mrna. This interaction prevents Rev-mediated export of unspliced mrna. As a result, unspliced viral mrna is unable to leave the nucleus, preventing the cell from translating HIV structural proteins that are necessary for the production and packaging of functional virus. Figure 18. Export of Viral mrna Transcripts from the Nucleus during Early and Late Stages of Infection Source: Karn, J. & Soltzfus, C.M., 2012 Rev is a Desired Target for HIV Treatments. Rev plays an important role in HIV replication by transporting unspliced and incompletely spliced viral mrna from the nucleus into the cytoplasm. This allows for the translation of HIV structural proteins that are critical in the production and packaging of functional virus. Rev s importance in HIV replication has made it an attractive target for drug development, and several agents targeting Rev and RRE have previously been studied as potential HIV treatments. To date, issues such as efficacy, cell permeability, and 76 Karn, J. & Soltzfus, C.M., Transcriptional and posttranscriptional regulation of HIV-1 gene expression. Cold Spring Harbor Perspectives in Medicine, 2(2), ppa Fischer, U. et al., The HIV-1 Rev activation domain is a nuclear export signal that accesses an export pathway used by specific cellular RNAs. Cell, 82(3), pp Page 28

29 high toxicity have hindered the development of Rev-targeting agents. 78,79,80,81 ABX464 has a unique mechanism of action that differs from prior attempts to inhibit Rev function. ABX464 is a small molecule that binds to the capbinding complex (CBC), which attaches to the 5 -cap of pre-mrna and contributes to nuclear export. The binding of ABX464 to CBC inhibits Rev-mediated viral RNA export without disrupting either cap attachment or the export of cellular transcripts. 82 Preclinical Studies ABX464 Inhibits Rev-Mediated Export of Unspliced Viral RNA. ABX464 inhibits the Rev protein from exporting unspliced and singly-spliced RNA by binding the CBC on the 5 end of pre-mrna. Its effect on the Rev protein was assessed in a preclinical study. 83 The investigators utilized the MS2-GFP reporter system to detect changes in the trafficking of mrna out of the nucleus. 84 A modified HIV-1 genome containing 128 MS2 binding sites was introduced into HeLa cells expressing Tat and MS2-GFP. These cells were then transfected with constructs that expressed the Rev protein to assess how Rev changes RNA export. As shown in Figure 19, GFP-labeled mrna levels (green) were lower in the nucleus of cells expressing Rev and treated with a control reagent (DMSO) relative to non-transfected cells. This reflects the presence of Rev in the cell, which pumps GFP-labeled mrna out of the nucleus. In Rev-transfected cells treated with ABX464, GFP-labeled mrna remains in the nucleus due to the inhibition of Rev-mediated export. The right column shows immunolabeling for Rev (red), which indicates that the observed difference in GFP-labeling does not result from differences in Rev expression. 78 Zapp, M.L. et al., Modulation of the Rev-RRE interaction by aromatic heterocyclic compounds. Bioorganic & Medicinal Chemistry, 5(6), pp Campos, N. et al., Long lasting control of viral rebound with a new drug ABX464 targeting Rev mediated viral RNA biogenesis. Retrovirology. 12(30). 80 Wang, Y. et al., Specificity of aminoglycoside binding to RNA constructs from the 16S rrna decoding region and the HIV-RRE activator region. Biochemistry, 36(4), pp Heguy, A., Inhibition of the HIV Rev transactivator: A new target for therapeutic intervention. Frontiers in Bioscience, 2, ppd Müller-McNicoll M. et al., How cells get the message: dynamic assembly and function of mrna-protein complexes. Nature Reviews Genetics. 14(4), pp Campos, N. et al., Long lasting control of viral rebound with a new drug ABX464 targeting Rev mediated viral RNA biogenesis. Retrovirology. 12(30). 84 Querido, E. & Chartrand, P., Using fluorescent proteins to study mrna trafficking in living cells. Methods in Cell Biology 85, pp Page 29

30 Figure 19. ABX464 s Effect on Rev-Mediated Export of Unspliced RNA Source: Campos, N. et al., 2015 ABX464 May Provide Long Lasting Viral Load Reduction. The durability of response with ABX464 was evaluated in NSG humanized mice that were infected with the YU2-HIV-1 virus. Treatment consisted of either 40 mg/kg of ABX464 administered daily for one month, or HAART, which was comprised of 3TC-tenofovirraltegravir. Treatment was discontinued after 30 days, and the viral-load was measured for 52 days following discontinuation. Figure 20 shows that 30-day treatment with either HAART (3TC, TDF, RGV) or ABX464 significantly decreases HIV viral load. Notably, once treatment was stopped, the viral load in mice receiving HAART rapidly increased to pre-treatment viral levels, whereas the viral load in ABX464-treated mice increased at a much slower rate. The sustained effect on viral load following ABX464 treatment could allow for a less frequent dosing regimen and/or provide a better option for HIV patients that have problems with treatment compliance. Based on the slow viral load decrease in mice treated with ABX464, it is likely that patients will benefit the most from ABX464 when used as a combination therapy with ARTs. Page 30

31 Figure 20. Sustained Viral Load Reduction of ABX464 Compared to HAART Source: Campos, N. et al., 2015 ABX464 s long-term inhibition of HIV replication following treatment discontinuation suggests that ABX464 is able to work in both peripheral blood mononuclear cells (PBMCs) and macrophages. Macrophages play an important role in the pathogenesis of HIV replication. They are able to deliver HIV to tissues and organs across the bloodtissue barrier to infect the brain. 85 In addition, macrophages are less prone to cytopathic effects of HIV compared to other immune cells, allowing them to survive longer with an integrated virus. 86 The preclinical data suggest that macrophages treated with ABX464 are unable to produce active viral particles, providing a sustained response in mice after treatment discontinuation compared to HAART. No Signs of Antidrug Resistance with ABX464. ABX464 has a unique mechanism of action compared to current HIV treatments by targeting a cellular component that contributes to HIV replication rather than a viral enzyme. 87 The frequency of mutation for host genes is significantly lower than viral enzymes, decreasing the chance of drug resistance developing against ABX A preclinical study examined the resistance potential of ABX464 compared to approved HIV drugs, PBMCs were infected with antiretroviral resistant HIV strains and treated with 10.0 µm ABX464. The time for drug resistance to develop was compared to approved therapeutics. As shown in Figure 21, there was no resistance detected against ABX464 through 24 weeks, whereas antidrug resistance developed against approved antiretrovirals after 3 to 12 weeks of treatment. 85 Carter, C.A. & Ehrlich, L.S Cell biology of HIV-1 of macrophages. 62, pp Baxter, A.E. et al., Macrophage infection via selective capture of HIV-1-infected CD4 + T cells. Cell Host & Microbe, 16(60), pp Noëlie, C. et al., Long lasting control of viral rebound with a new drug ABX464 targeting Rev mediated viral RNA biogenesis. Retrovirology, 12(30). 88 Arts, E.J. & Hazuda, D.J., HIV-1 antiretroviral drug therapy. Cold Spring Harbor Perspectives in Medicine, 2(4), pp a Page 31

32 Anti-Viral Drug Figure 21. In Vitro Drug Resistance to Antiretroviral Agents Starting Concentration Time of Selection (Weeks) Mutation Selected 3TC 0.05 µm 4 M184I/V Tenofovir 0.05 µm 12 K65R Nevirapine 0.01 µm 3 K103N, Y181C Efavirenz 0.01 µm 5 K103N, Y181C ABX µm 24 - Source: Campos, N. et al., 2015 Safety Profile 72 healthy volunteers have been dosed with ABX464 in two Phase I studies. No drug-related serious adverse events (AEs) were observed in either study. The majority of AEs occurred in patients that received the 200 mg dose, which was the highest dose tested, and included mild-to-moderate headache, nausea, and vomiting. There were no clinically significant abnormal results observed in physical examinations, laboratory test results, vital signs, or electrocardiogram (ECG) analyses. Human Immunodeficiency Virus Human immunodeficiency virus (HIV) is a chronic life-threatening infection that destroys CD4 + lymphocytes, increasing patient susceptibility to infection and disease. There are several strains of HIV. HIV-1 makes up the majority of cases in the US and Europe, whereas HIV-2 is most commonly found in West Africa. If untreated, HIV can progress to acquired immunodeficiency syndrome (AIDS) within 5-10 years, which can lead to death within 3 years. 89 HIV is transmitted through bodily fluids carrying the virus, and must enter the blood stream to cause infection. 90 The virus affects roughly 36.9 million people worldwide, including 1.2 million cases in the US and an additional 900,000 in Western and Central Europe. The average life expectancy for someone with HIV in the US has substantially increased in the last 20 years due to improved treatments, and infected patients have close to a normal life expectancy. 91 There are no available cures for HIV, but current treatments using antiretroviral therapy (ART) and highly active antiretroviral therapy (HAART) can effectively control viral load and reduce patient burdens, such as increased risk of transmission, fatigue, weight loss, and joint pain. Causes and Pathogenesis. HIV is a retrovirus that infects and destroys immune cells and persists for life. Viral transmission occurs through bodily fluid exchange primarily from needle sharing and unprotected sexual intercourse. The primary target of HIV inside of the host is activated CD4 + T lymphocytes, which are commonly Samji, H. et al., Closing the gap: Increases in life expectancy among treated HIV-positive individuals in the United States and Canada. PLOS, 8(12), e Page 32

33 found in the blood cells and lymph nodes. 92 Figure 22 shows the life cycle of HIV along with targets of currently used therapeutics. HIV enters T lymphocytes through interactions between the GP120 and GP41 protein complexes embedded in the HIV viral envelope and CD4 and chemokine co-receptors on the host cell surface, called CCR5 and CXCR4, respectively. These glycoproteins have high rates of mutation, which make it difficult for T-cells to recognize the virus as it travels in the blood. In addition to T lymphocytes, resting CD4 + lymphocytes, monocytes, macrophages, and dendritic cells express CD4 and chemokine co-receptors, making them susceptible to infection. Figure 22. HIV Life Cycle Source: Maartens, G. et al., 2014 Once bound to the targeted cell surface receptors, the HIV membrane fuses with the host cell membrane and releases 2 viral mrna strands along with 3 retroviral replication enzymes into the cytoplasm. The replication enzymes are called integrase, protease, and reverse transcriptase. Reverse transcriptase initiates the reverse transcription of viral RNA to create viral DNA. Integrase then cleaves a dinucleotide from each end of the DNA and transfers it into the cell nucleus where it is integrated into the host cell genome. New viral production begins with transcription of the genome to create viral mrna, which is translated in the cytoplasm. Proteases cleave longer nonfunctional proteins into smaller proteins that are packaged into a capsid along with 2 cleaved viral mrna strands. This capsid is able to leave the host cell, where it matures and infects other cells. HIV can cause immune cell depletion in several ways. 92 Maartens, G. et al., HIV infection: epidemiology, pathogenesis, treatment, and prevention. The Lancet, 384, pp Page 33

34 Symptoms. Symptoms of HIV differ between the acute stage, the chronic stage, and AIDS. The acute stage occurs shortly after viral infection. Some patients during this stage experience severe flu-like symptoms that occur between 2 and 4 week following viral exposure, although symptoms can take 10 years or longer to begin. These symptoms can last between a few days in duration to a few weeks, and can include fever, rash, swollen lymph nodes, fatigue, muscle and joint pains, and headache. HIV production is highest in the body during the acute stage, causing rapid CD4 + depletion. An immune response eventually results that increases the CD4 + count while decreasing viral load to a level called the viral set point. Viral load along with the risk of transmission is highest during the acute stage of infection. The chronic stage occurs following the acute stage. The virus replicates within the host at low levels during this period, and patients may be asymptomatic from the infection. HIV can still be transmitted during this stage, but the likelihood is significantly decreased. Treatment using ARTs can keep the virus contained to the chronic stage for several decades. For those who do not use ART, the viral load will eventually increase, causing the CD4 + count to drop. The chronic stage for these patients lasts an average of 10 years. CD4 + levels in healthy individuals range between 500 and 1,200 cells/mm 3. These levels are decreased in patients with HIV, and can fall below 200 cells/mm 3 for some patients. This stage of infection is referred to as AIDS. Due to the suppressed immune system, patients with AIDS are highly susceptible to opportunistic infections. Patients can also be classified as having AIDS if they develop one or more opportunistic illnesses, even if the CD4 + count is above 200 cells/mm 3. If untreated, HIV can progress to AIDS in 5 to 10 years, and death from an ailment that the immune system fails to fight off typically occurs roughly 3 years following AIDS diagnosis. Several factors including age, HIV subtype, health, genetics, and co-infection with other viruses all affect the progression. Symptoms of AIDS are more severe than the acute and chronic phase, and typically include the following: Night sweats. Recurring fever. Chronic diarrhea. Lesions on tongue or mouth. Persistent fatigue. Weight loss. Skin lesions. It is important to mention that patients who are compliant with ART rarely progress to AIDS, and have close to a normal life expectancy. Diagnosis & Treatment. Blood tests, like the ELISA are common diagnostics for HIV. They detect the virus by evaluating antibodies in the blood developed against the virus. Following a positive ELISA, a western blot assay may be used to confirm the diagnosis. It takes several months for antibodies to develop against the virus, so early diagnostic tests used too close to viral exposure can result in a false negative. This lag time has been addressed by the p24 antigen test that can detect p24 proteins associated with HIV only days following infection. Saliva can also be evaluated to diagnose HIV, but fewer antibodies are detected in the saliva relative to blood, and a positive saliva test result is usually confirmed with a blood test. Once diagnosed, the stage of infection and response to treatment can be determined by a CD4 + cell count. Page 34

35 There are three treatment paradigms used for HIV that are dependent on the stage of infection: pre-exposure prophylaxis (PrEP), post-exposure prophylaxis (PEP), and antiretroviral therapy (ART). Gilead s (NasdaqGS: GILD) Truvada (emtricitabine/tenofovir disoproxil fumarate) is a PrEP drug used mainly in high-risk individuals. Truvada has shown high efficacy in preventing infection, and a recent study suggests 100% efficacy. 93 PrEPs block viral establishment in the host by preventing HIV reproduction in the body. PEPs are antiretroviral medications recommended for use within the first 72 hours of HIV exposure. They inhibit HIV replication in the body, and reduce the chances of infection. Treatment typically consists of 2-3 antiretroviral medications taken daily for a 28-day cycle. For patients that are HIV positive, there are no curative treatments available. Existing therapies focus on reducing viral load of the virus with antiretroviral therapy (ART) or highly active retroviral therapy (HAART). HAART consists of a 3-drug regimen from at least 2 different drug classes described below. ART/HAART are recommended for all patients with HIV or AIDS. These treatment strategies prevent viral replication in the body, allowing the immune system to recover and successfully fight off infections. The development of ARTs has substantially increased patient life expectancy over time. ARTs are grouped into the following six drug classes based on their mechanism of action to fight the virus: Non-Nucleoside Reverse Transcriptase Inhibitors (NNRTIs) NNRTIs inhibit HIV replication by binding to the HIV reverse transcriptase enzyme. This prevents the conversion of viral RNA into DNA. NNTRIs are almost always used as part of a combination therapy, as drug resistance develops quickly to the agent if used as a single agent. Side effects associated with NNRTIs include nausea, diarrhea, fatigue, elevated liver function tests, and mood changes. Popular NNRTIs include Bristol-Myers Squibb s (NYSE: BMY) Sustiva (efavirenz) and Johnson & Johnson s (NYSE: JNJ) Edurant (rilpivirine). Nucleoside Reverse Transcriptase Inhibitors (NRTIs) Like NNRTIs, NRTIs inhibit HIV replication by preventing reverse transcriptase from adding nucleosides to the nascent DNA chain. Side effects associated with NRTIs include bone density effects, nausea, vomiting, new or worsening kidney disease, liver effects, lactic acidosis, abnormal fat distribution, and nervous system effects. The most popular NRTI is Gilead s Viread (tenofovir disoproxil fumarate). Protease Inhibitors (PIs) PIs prevent mature viruses from infecting other CD4 + cells by blocking the protease enzyme, which is responsible for converting immature viruses into mature viruses by cutting the non-functional viral polypeptide chain. Side effects associated with PIs include rash, nausea and vomiting, elevated liver function tests, high blood sugar, insulin resistance, and abnormal lipid levels in the blood. Popular PIs include Johnson & Johnson s Prezista (darunavir) and Bristol-Myers Squib s Reyataz (atazanavir). Fusion Inhibitors Fusion inhibitors prevent HIV from entering into the host CD4 + cells by binding to GP120 or GP41 on the cell surface. This blocks the HIV envelope from binding and entering CD4 + cells. Side effects associated with fusion inhibitors include increased risk of pneumonia and a reduction in white blood cell count. Fusion inhibitors are painful to administer and are mainly used as a last resort for 93 Volk, J.E. et al., No new HIV infections with increasing use of HIV preexposure prophylaxis in a clinical practice setting. Clinical Infectious Diseases, 61(10), pp Page 35

36 treatment. Roche s (VTX: ROG.VX) Fuzeon (enfuviritide), the only fusion inhibitor approved, had global sales of $39.2 million in CCR5 antagonists (CCR5s) CCR5 antagonists prevent HIV from entering immune cells by blocking the CCR5 co-receptor on their surface. CCR5 is an essential receptor for HIV entry into CD4 + cells. Side effects associated with CCR5s include nausea, diarrhea, fatigue, and headache. GlaxoSmithKline s (NYSE: GSK) Selzentry (maraviroc) is the only CCR5 currently approved by the FDA and had sales of $224 million in Integrase Strand Transfer Inhibitors (INSTIs) INSTIs prevents HIV replication by blocking the function of integrases, which are enzymes used by HIV to integrate viral DNA into the host genome. Side effects associated with INSTIs include nausea, diarrhea, headache, rash, fatigue, and elevated liver function tests. Popular INSTIs include Merck s (NYSE: MRK) Isentress (raltegravir) and GlaxoSmithKline s Tivicay (dolutegravir). Treatment regimens differ between patients based on health conditions, side effects, drug-drug interactions, and dosing convenience. HIV-1 has a high mutation rate, causing viral resistance to develop against many ARTs when used as monotherapies. Patients are often screened prior to the start of HIV treatment to determine preexisting mutations that would cause antiretroviral resistance. To minimize the chance of drug resistance developing, treatment regimens typically include a mix of 3 or more medications that come from at least 2 of the drug classes described above, known as HAART. Patients are also screened for potential drug resistance prior to beginning treatment so that the optimal HAART can be prescribed. New HIV treatments like ABX464 that are less prone to treatment resistant mutations could provide an advantage for both patients and physicians. Although ARTs are effective when patients are compliant, daily dosing with multiple pills, treatment-related side effects, drug resistance, and high treatment costs can complicate treatment for many patients. The Centers for Disease Control and Prevention (CDC) estimated that the lifetime cost of treating HIV was $379,668 in In addition, 45% of North American patients with HIV do not achieve an adequate level of treatment compliance. Viral load rebounds quickly following ART discontinuation, increasing the risk of transmission, developing drug resistance, and progressing to AIDS. 94, 95 New HIV therapeutics that can reduce the treatment burden while maintaining high efficacy could have a large market potential. ABX464 may provide a better prognosis to patients that have problems with treatment compliance by preventing viral-load spikes following missed doses. 94 Mills, E.J. et al., Adherence to antiretroviral therapy in Sub-Saharan Africa and North America; A meta-analysis. JAMA, 296(6), pp Sighem, A.V. et al., Immunologic, virologic, and clinical consequences of episodes of transient viremia during suppressive combination antiretroviral therapy. Acquired Immune Deficiency Syndromes, 48(1), pp Page 36

37 HIV Market Information Epidemiology. There are an estimated 36.9 million people worldwide living with HIV/AIDS, with the majority of these cases occurring in Africa. According to the Centers for Disease Control and Prevention (CDC), approximately 1.2 million people in the United States are living with HIV, and there are an additional 900,000 cases in Western and Central Europe. 96 Close to 13% of patients with HIV are unaware that they have the disease, increasing the risk of transmission. Roughly 50,000 new transmissions in the US and 29,000 in the EU occur each year. 97 HIV can infect men and women equally, but roughly 75% of cases occur in men, with the majority being homosexual men. The average life expectancy has increased significantly in the last 20 years due to ARTs. While HIV almost guaranteed an early death in the 1980 s, a 20-year old HIV patient receiving ART today is expected to have an almost normal life expectancy. 98 Patients that are compliant with treatment have a very low risk of progressing to AIDS. 99 It is worth noting that that the incidence of HIV could fall in the future with increased PrEP use, since Truvada (emtricitabine/tenofovir) may be close to 100% effective in preventing HIV contraction. 100 Market Size. The global HIV market was estimated to be $20 billion in Gilead is the leader in HIV treatments, and revenue from its HIV product portfolio totaled more than $10 billion in Abivax is developing ABX464 to be used in both treatment-naïve and pretreated patients with HIV-1 and HIV-2. There are approximately 1.2 million people in the US, and 900,000 in Western and Central Europe infected with HIV. With such a large patient population and the requirement that treatment be continued for the rest of a patient s life, small market penetrations can represent a sizeable opportunity for Abivax. Based on data presented thus far, ABX464 may be best suited for patients who are non-compliant with their treatment regimen, have developed resistance to multiple ARTs, or have tolerability issues with portions of their HAART. Compliance greater than 95% is needed to maintain viral suppression, but roughly 45% of HIV patients do not meet this rate. 101 Missed doses can cause increases in viral load levels, leading to a higher risk of transmission, drug resistance, and disease progression. Abivax has shown in preclinical studies that treatment with ABX464 can dampen viral rebound following treatment discontinuation, which could reduce potential complications associated with viral spikes. New therapeutics that can maintain low viral levels following treatment discontinuation for a longer period of time than currently used ARTs could provide a significant benefit to patients that struggle with treatment compliance OECD Health at glance. Europe European Union, pp Samji, H. et al., Closing the gap: Increases in life expectancy among treated HIV-positive individuals in the United States and Canada. PLOS, 8(12), e Quinn, T.C., HIV epidemiology and the effects of antiviral therapy on long-term consequences. AIDS, 22(3), pp Volk, J.E., No new HIV infections with increasing use of HIV preexposure prophylaxis in a clinical practice setting. Clinical Infectious Diseases, 61(10), pp Mills, E.J. et al., Adherence to antiretroviral therapy in Sub-Saharan Africa and North America; A meta-analysis. JAMA, 296(6), pp Page 37

38 Clinical Data Discussion Abivax has completed two Phase I studies evaluating ABX464 in healthy volunteers, and a randomized, doubleblind Phase IIa study in treatment-naïve HIV patients. In the Phase I trials, ABX464 was considered safe and welltolerated at 4 tested doses. The Phase II study enrolled 49 treatment-naïve HIV patients who received ABX464 in different doses and frequencies. Results showed a dose-dependent viral load reduction, with 4 of 6 patients receiving 150 mg of ABX464 daily experiencing more than a 0.5 log (>68%) viral load reduction. Notably, there were no signs of drug resistance in the study. Following the release of Phase II data, Abivax plans to seek a partnership to support continued ABX464 development. The Company has given guidance to file for approval in the US and Europe in 2019, with approval expected in First Phase I Trial of ABX464 in Healthy Volunteers ABX464 was evaluated at 4 different doses in 24 healthy volunteers. Treatment was well tolerated with no reported drug-related serious adverse events. The half-life of ABX464 was 3-4 days in humans, indicating the potential for a less frequent dosing regimen. Trial Design. This was an open-label Phase I trial in 24 healthy male volunteers evaluating ABX464 under fasting conditions at doses of 50, 100, 150, and 200 mg. The objectives of this study were to assess the safety, tolerability, and pharmacokinetics of ABX464. Trial Results. ABX464 was found to be safe and well-tolerated in the study with no reported serious adverse events (AEs). The majority of AEs occurred in patients that received the 200 mg dose and included mild-to-moderate headache, nausea, and vomiting. No clinically-significant abnormal results were observed in physical examinations, laboratory test results, vital signs, or electrocardiogram (ECG) tests. The trial demonstrated that the absorption and bioavailability of ABX464 increased linearly with higher doses up to 150 mg. The 200 mg dose provided no significant increase in bioavailability over 150 mg. A pharmacokinetic analysis showed that ABX464 is quickly metabolized into ABX464-N-glucuronide in humans, which has a half-life of 3-4 days in humans. This points to ABX464 s potential as a less frequently dosed HIV treatment. Second Phase I Trial of ABX464 in Healthy Volunteers ABX464 was evaluated in 48 healthy volunteers in both a fasted and fed state either as a single dose or every 3 days. Treatment was well tolerated with no drug-related serious AEs. Trial Design. This was a Phase I study in 48 healthy volunteers. Group 1 consisted of 24 volunteers that received an oral dose of 50 mg ABX days apart. The first dose was administered in a fed condition, and the second dose was given 45 days later in a fasting condition. Group 2 consisted of 24 volunteers that were randomized to receive a 50 mg ABX464 dose every 3 days over a 10-day period in either fasting or fed conditions. Trial Results. Overall, ABX464 was well-tolerated with no drug-related serious AEs reported. Adverse events were infrequent and primarily consisted of mild-to-moderate headache and nausea. Both groups of volunteers had a 3- fold increase in bioavailability under fed conditions compared with fasting conditions. In addition, there was no significant metabolite modification observed in either treatment group, reducing the likelihood of adverse drug-drug interactions. Page 38

39 Phase IIa Trial Evaluating ABX464 Monotherapy Trial Design. Abivax conducted a randomized, double-blind, dose-escalating Phase II trial that tested ABX464 in treatment-naïve HIV patients. 102 The trial design is outlined in Figure 23 6 groups of 8 patients infected with HIV-1 or HIV-2 were enrolled in Mauritius and Thailand. Patients were randomized 3:1 to receive ABX464 or placebo. The first cohort of patients received 25 mg of ABX464 every 3 days for a 21-day period while fasting. Each successive cohort enrolled patients to receive one of the following daily doses: 25, 50, 75, 100, or 150 mg of ABX464. The 75 and 150 mg cohort received treatment for 14 days with food, whereas the other cohorts received treatment for 21 days under fasting conditions. The primary endpoint of the study is safety and tolerability of ABX464. Secondary endpoints include the maximum serum concentration of ABX464 and its metabolite, time to maximum concentration, area under the concentration curve, and the half-life of ABX464 in plasma. This study has completed enrollment, and Abivax expects to report topline data in January Figure 23. Phase IIa Trial Design Source: Scherrer et al., 2016 Trial Results. Viral load reductions were observed in the 75, 100, and 150 mg treatment cohorts. 103 Figure 24 shows the proportion of patients in each cohort who had a viral load reduction greater than a 0.5 log (>68%) by day 14. The 150 mg dose had the greatest effect, with 4 out 6 patients clearing this threshold of viral load reduction. There were no substantial changes in viral load for patients receiving placebo in each of these cohorts. These data provide important proof-of-concept data for the ABX464 program, which may inform future partnership discussions Scherrer et al., Early Evidence of Antiviral Activity and Safety of ABX464 in HIV Treatment-Naïve Patients, 2016 Conference on Retroviruses and Opportunistic Infections, Boston, MA, February 25, Page 39