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Synageva BioPharma Corp (NASDAQ:GEVA)

Cowen and Company 33rd Annual Health Care Conference

March 5, 2013 10:40 ET

Executives

Sanj Patel - Chief Executive Officer

Analysts

Eric Schmidt - Cowen and Company

Eric Schmidt - Cowen and Company

Good morning everyone. My name is Eric Schmidt. I am one of the biotechnology analysts at Cowen. And it’s my pleasure to introduce and welcome back to the 33rd Annual Health Care Conference. Our next presenting company is Synageva. I think most of you are aware that this company came public about almost two years ago and Alan has made a big squash in the ultra orphan and rare disease space. We are delighted to have with us the company’s Chief Executive Officer, Sanj Patel. I see also several other members of the Synageva management team. So, Sanj has prepared about 20 minutes, 20, 25 minutes of overview presentation. Hopefully, that will leave a few minutes at the end of the presentation for some questions in this room. And then if there is further interest we have a breakout session planned next door and so on.

Sanj Patel - Chief Executive Officer

Great, thank you Eric. Good morning. Thank you to Cowen for the invite. Today, I am going to walk you through all progress to-date and also let you know what we planned to achieve going forward. Please note, I maybe making forward-looking statements that contain risks and uncertainties, please refer to our SEC filings.

Let’s start with the fundamentals. We are building a global company focused on making a meaningful impact on the lives of patients suffering from very rare diseases. These are the pillars upon which the company is being built. First, it’s our team and their direct previous experience in helping bring ultra-rare disease therapeutics in market successfully. It’s the market opportunities for our pipeline programs on our lead program, an enzyme replacement therapy for a classic lysosomal storage disease called lysosomal acid lipase deficiency. It’s a fact that the company was proactive in bringing in commercial and reimbursement expertise in-house early and integrating this with our clinical and global launch plans.

We are already building out our global commercial infrastructure. And it’s our manufacturing technology that allows us to produce biologics consistently and sustainably. This is our management team. The deep and relevant experience spans from science and translational medicine through to clinical manufacturing commercial and reimbursement expertise, specifically for ultra-rare disease products. I have worked with most of the team members before on successful rare disease efforts. In fact collectively, we have worked on almost every ultra-rare disease therapeutic currently on the market, including Cerezyme, Fabrazyme, Aldurazyme, Myozyme, and Solaris.

LAL deficiency represents an attractive commercial opportunity. The table here shows other products that have all shown meaningful medical value. Unlike Gaucher, Fabry, Pompe, and PNH, LAL deficiency also affects a small patient population. It’s a very rare disease. Unlike Cerezyme, Fabrazyme, Myozyme, and Solaris develop a (fiber) I will show you today also have the potential to address these serious underlying medical issues associated with the disease. The bottom of the table shows the revenue streams called in from, these are the products, many of which are not at peak sales owing to either supply issues or in some cases having just not yet reached their full potential.

To give you an overview of the biology, LAL is a lysosomal enzyme that plays a key role in the degradation of LDL particles. And the images you see here are of a pathocytes, what you see in both disease cells are LDL particles be ingested and traffic to the lysosyme. Now, in the lysosymes of healthy individuals, cholesterol esters and triglycerides within LDL are broken down by LAL and the free fatty acids and free cholesterol that results play an important role in the regulation of lipid synthesis. But in patients with LAL deficiency on the right, the enzyme activity is either markedly reduced or completely absent. That leads to the accumulation of cholesterol esters and triglycerides within the lysosome causing the severe liver and gut abnormalities. And so basically what’s happening in LAL deficiency is it the liver is just struck full of cholesterol and other fats, but they are in the wrong form and the wrong place deliver therefore shorter cholesterol fats as far as ramping up cholesterol synthesis, which only goes to compound the devastating effects of the disease.

LAL deficiency as of the other LSDs presents with a clinical continuum also known as cholesterol extra storage disease or CESD, which affects patients two years and upwards. This is associated with significant shortened lifespan and more benefit. Prominent manifestations include an enlarged liver, elevated liver function test, and fibrosis leading to cirrhosis, liver failure, often may lead to a liver transplant or death.

The top right picture shows scarring and the cirrhotic liver. That biopsy sample was taken from a teenager. On the bottom right, you see the dyslipidemia associated that LAL deficiency, which leads to premature atherosclerosis. We are constantly expanding our knowledge of LAL deficiency through both our late stage clinical trials and our ongoing natural history studies. And the literature, which is highlighted here, shows two things. First of all, the LAL is a serious disease, and secondly, that it strikes early and the review of a 100 plus cases showed that over 20% of these either had advanced liver disease, had needed their liver transplants or had died prematurely.

We have completed a Phase 1, Phase 2 clinical trial in adult patients with late-onset LAL deficiency, and we continued to follow patients as part of an extension study. The data out of nine months continues to show normalization of liver function tests and improvements in dyslipidemia. In terms of safety and the extension studies to-date, sebelipase alfa continues to be well-tolerated with mostly only mild adverse events and no anti-drug antibodies.

Here are the results, first looking at transaminases, which are in mark of liver damage, that baseline levels were elevated within just four weeks. We saw a rapid and significant decline in both ALT and AST. As patients came off therapy, these levels increased to above normal and as they entered into the extension study, we again saw this rapid significant decline in both of these transaminases and that affects the sustained with every other week dosing over time.

We also saw improvements in patient’s dyslipidemia. During the four-week portion of the trial, we saw an expected and transient increase in LDL and triglycerides levels, which is owing to substrate release from the lysosome or mobilization of lipids. As patients entered into the extension study, we again saw this transient and effective increase in the cholesterols. With longer duration of dosing, these levels came down to below baseline that affects the sustained over time with every other week dosing. We also saw improvements in HDL, the good cholesterol.

To summarize these data, sebelipase alfa continues to show significant reductions in liver damage and improvements in dyslipidemia. There was a 54% reduction in ALT and a 47% reduction improvement in dyslipidemia. And it’s important to note that the data now out to nine months is of even a longer duration in the treatment portion of the next trial, the Phase 3 study.

So, here is the design of that trial, the Phase 3 trial that we are calling arrived. We announced recently that we start enrolling patients and dosing patients as part of the study. It’s a global, double-blind, placebo-controlled trial looking on number of disease abnormalities, including transaminases, lipid profiles, liver volume, and liver fat content. We’ll be enrolling both children and adults in this trial and randomizing them to either sebelipase alfa or placebo with every other week dosing. Following the blinded treatment portion, patients will rollover to a longer term extension phase treatment period.

Moving on to the early answer from also known as Wolman Disease, these babies have the same liver and spleen involvement as the juveniles and the adults. In this case, however, the walls of their gut becomes filled with fat. That fat, in turn, blocks the ability of the gut to absorb food and essential nutrients. This leads to persistent vomiting, diarrhea, and profound growth failure. They can also get a chalking material built up in their adrenal glands or adrenal calcifications. That’s important, because it kind of help physicians sometimes make an early diagnosis.

On the right, you see a growth chart with an interim with this classical form of the disease, the orange line shows that within just a first couple of months, these babies will stop growing and effectively falloff the growth chart. In the absence of an effective therapy, these babies will die and typically before their first birthday. We presented data, natural history data at an LSD Meeting in Turkey just last year demonstrating just how rapidly this disease progresses. The median age of first symptom was one month followed by death by three months of age.

We continue to treat infants as part of an ongoing early onset clinical trial open label predominately measuring survival, but also looking at a number of other safety and efficacy parameters, including growth and liver function tests. This is the initial data from the first of those infants that continues to receive sebelipase alfa, but started on an expanded access basis, which is why I showed the initial dataset here. This baby presented 3.5 months of age with the classical manifestations of the disease, profound growth failure, elevated liver function tests and anemia this was a very poorly baby. Upon treatment you see these little red triangles of the baby just prior to treatment it stopped growing. I mean this happens in early on that allow death is inevitable and rapid. Upon treatment from the blue squares, you see there is a dramatic change in the growth curve and the baby went from around the first percentile between the 25th and 50th percentile growth after only a few weeks of treatment.

This baby now has been on treatment for almost two years continues to thrive with that normalization of growth, liver function tests, anemia and other parameters running around like any other toddler. There will been no treatment related SAEs. This baby is being followed and as part of that early onset clinical trial. So, I want to take this data I will make it real for you. This is the video about first in front infant as I said is given treatment for almost two years now continues to thrive and would have died previously without intervention. I was invited by the parents to meet the baby and as you probably see or hopefully from the audio I was quite overwhelmed by the shear progress this baby had made in fact as you will in a second this baby is no longer a baby.

I remember the median age of death is three months of age. And there he is running away from me. I am a – practice my kids are much over now. Every time I see that it still takes my breath away, Synageva is focused on saving or including more lives and we take that responsibility very seriously.

Now being able to find patients, infants, juveniles, adults in the ultra-rare space is clearly one of the most important success factors. And we have a global systematic approach to finding these patients. I mean it allowed efficiency as with the other LSDs that begins with raising disease awareness, working with patient efficacy groups and having a high touch one-on-one relationship with several key physicians. And I met my self and many members of the team have known the LSD key appeal is for many years now almost 15 years and we truly built upon this network. We are also facilitating easier diagnostics as made possible with the rapid dried blood spot tests is regularly available. And also implementing screening programs around the world this is working with institutions to help do what we call funnel projects. These are well thought out projects to help enrich broad patient populations to help find missed or under diagnosed patients.

We continue to build out our global commercial infrastructure and that includes the hiring of country managers in Japan, Turkey, Poland, Germany the UK, France, Latin America and regional managers across the U.S. These are rare disease experts and most of us in the team have worked the full. Their primary goal right now is to continues to raise LAL disease awareness and find more LAL D patients. But longer term they will support the broader portfolio of Synageva programs.

Our next program SBC-103 is an enzyme replacement therapy for another classic lysosomal storage disease. This time Sanfilippo B or MPS IIIB this is a rare devastating condition that was multi-systemic with liver and spleen involvement, but in this case also prominent CNS manifestations. Beyond our focus on the LSDs therapies which are sebelipase alfa and SBC-103, but 104, 105, 106 programs and those beyond are all focused on rare catastrophic conditions with unmet medical need. The Sanfilippo B enzyme, like LAL has been historically difficult to make. In the last year’s LDN meeting we have presented data showing that we can make the enzyme with the right glycan structure, showed for the first time uptake into key target fell via the critically important mannose-6-phosphate receptor. And those data represent a significant advancement in the field previous attempts of making the enzyme using cell culture techniques.

At just last month LDN we showed this data, we show that the enzyme that we are making is active and also showing substrate reduction in the brain and other organs of the MPS IIIB animal model. Importantly, this was achieved with both intrathecal and intravenous delivery. Whenever focused on doing more preclinical testing to allow for clinical trial investigations in patients, we plan to be in the clinic with SBC-103 in the first half of 2014. Will allow Synageva to build its pipeline of programs is our expression technology. And this system is based on set of proprietary vectors that allows for the expressions of high levels of protein into egg white.

And the system has a number of advantages. First of all it produces a highly consistent products, its extremely scalable and capital efficient and there is no need for complex bioreactors of increasing size. In this case to increase supply we simply need increase the number of eggs required and importantly the downstream manufacturing is like any other protein production system. Moving to the flexibility of the system should we find that patient demand is higher than originally anticipated, we are able to rapidly increase supply without significant delay or cost. The platform has been validated via a number of previous clinical studies with favorable safety and efficacy profiles and also been investigated by the major regulatory authorities.

Synageva owns or controls all of the significant IP around the technology and it’s the recovery system that already producing our lead products, sebelipase alfa and SBC-103 at commercial levels of expression. The work we did in 2011 and 2012 has operationally and strategically positioned us to achieve multiple value driving events this year 2013 and well beyond. They started as I mentioned with enrolling and continued to dose in the Phase 3 study we are now focused on activating more global sites to get though the environment phase as quickly as possible. This summer will have a one full year of treatment from the expansion study the Phase 3 expansion study with sebelipase alfa. And we continue to move pipeline programs forward including the SBC-103 program towards the clinic.

Finances, our cash balance is approximately $330 million, we have no debt. Synageva has a team with a specific set of skills that will help bring these products to market successfully. A focus on program that like LAL deficiency represent a significant unmet medical need, and a technology that will allows to us build our pipeline, it’s these together with our drive and ability to execute will allow us to continue to build this company and make a meaningful impact on the lives of patients. We are very excited about future, so with that thank you very much.

Question-and-Answer Session

Unidentified Analyst

(Question Inaudible)

Sanj Patel

Yeah, absolutely. So, part of the plan why we are building commercial structures so early and in many ways you can call it commercial structures also medical affairs infrastructure. And the clinical teams together with the medical affairs department and the commercial groups are working in a very integrated manner to start laying the found – basically foundation for a commercial setting. And that includes as you mentioned working with payer groups and showing that people understand that as the outcomes of disease making sure that we communicate the natural history study progress. And our outstanding of the disease that it develops. As I have mentioned this is a serious disease and obviously having that evidence in the natural history studies is going to be very important as we laid our foundation.

So, we will continue to build upon that, we are certainly doing a lot of publications and as we enroll more patients and as we have more longer term treatment exposure from the expansion studies. Those data will be made available as well. But certainly as we build this organization we plan to give people some real insights how we are understanding this disease moving forward. We do have a year end call next Monday, which I think as well we will provide and update on how we are thinking about the business.

Unidentified Analyst

(Question Inaudible)

Sanj Patel

So I’ve opt and said that enrollment in the ultra-rare space is one of the most difficult things you will ever do, it really is. We have done the right things early on to make sure that we continue to identify patients. We have said that from the outside that some of these programs do taken off a long time to enroll, our great programs are the programs made in the team have been evolved and taken a year, year and a half, in fact on average sometimes up to two years. We having said that, we are an aggressive bunch, we’ve certainty got a very global outreach, we have a got a number of clinical trial sites setup we are setting up more globally. But as far as enrollment I think for right now we have said when we are going to start enrolling and dosing which is just last month. And we’ll just keep progressing that and obviously very least update the Street when we complete enrollment.

Unidentified Analyst

(Question Inaudible)

Sanj Patel

Yeah, I mean it’s very important that we put a very robust preclinical package together and that has to without a doubt look at a number of different avenues. So, clearly we have seen some very interesting, very encouraging preclinical data using both interthecal on the intervenous delivery that wouldn’t preclude us from doing one or the other, I think we should continue to have a very broad comprehensive preclinical program suffice if they – if we continue to see the types of encouraging results we are obviously we’ll be very pleased. But at this point we are not ruling anything out. We just really want to put a very robust preclinical package together and there is still a lot of works we have done in the preclinical setting.

Unidentified Analyst

Can you talk about the actual nature of the molecule is that what kind of (question inaudible)?

Sanj Patel

No, it’s a protein.

Unidentified Analyst

Okay.

Sanj Patel

Yeah, so it’s a large molecule recombinant protein and the – it’s for LAL deficiency I mean basically it’s a protein small molecule in any shape or form.

Unidentified Analyst

And which other drugs have been produced (Question Inaudible).

Sanj Patel

Yeah, so a number of clinical programs have gone through this system without a doubt. When I formed Synageva, it was on the yields of a company called Avigenics which had actually had a number of programs in development more focused on follow-on biologics or sort of bio-similar type programs. And so they had produced G-CSF another similar types of proteins. They’ve actually had a number of exposures in that, but it was a very safe and efficacious clinical trial, it was a global Phase 2 trial that if it formed to a number of different infusions showing some favorable results. But obviously I joined the company in ’08 formed Synageva and really took the focus primarily to ultra-rare programs. But that gave us the confidence that we knew the platform can make these proteins, make them safely, efficaciously actually the trials that they had run were actually in compared to and approved products. So, we knew that we have some comparison then in terms of safety and efficacy, so it gave us that confidence.

Unidentified Analyst

(Question Inaudible)

Sanj Patel

Well, this is a noble program, so this is a recombinant protein. So there is no other we are not going after comparison.

Unidentified Analyst

(Question Inaudible)

Sanj Patel

Right it’s a direct replacement of the protein that the patients are now either don’t have at all or have very little of.

Unidentified Analyst

So, they are potentially the same.

Sanj Patel

Exactly.

Unidentified Analyst

(Question Inaudible)

Sanj Patel

Yeah. So, the question is of course was essentially how many patients would be required for the approval in that, not (indiscernible). So, clearly as many as possible moving the onset and clearly we are trying to find as many as possible. This is obviously a very, very rapidly progressive end of the disease. There is no prevalent patient population. These babies are born and then they die as you just saw unless they have the enzyme. As part of how many clearly if we continue to see this type of dramatic improvement we haven’t rolled more than one. We are not disclosing individually each patient as we enroll them, but I think that will be very important. We initially had said we would like to enroll 8 or 8 to 10 how many of those we would need to really make a very, very strong bodies I am not quite sure at this moment. But we are certainly focused on finding them as soon as possible and getting them on to treatment. I would imagine that having a few of these patients with such dramatic improvement will be very important. But again you have to look at totality of the data its one disease we talked about the early onset versus the late onset. Late onset does start two years and upwards this instants are less than two years of also while it’s important obviously to focus on what you’ve got look at the disease as a whole and so having totality data will be very important moving forward.

Unidentified Analyst

(Question Inaudible)

Sanj Patel

Yeah, the question is how bigger market the problems where it’s have gone have been reported anyway from 1 in 40,000 to around 1 in 300,000. And one of the main paper that came out in 2007, prior to the formation of Synageva was from a check called Sandro Muntoni who had shown around on in 40,000. Since then there has been some update for that generally similar between 1 in 40,000 and 1 in 3,000. There was a paper recently that’s headed for 1 in 100,000. As far as the total market is concerned we believe and certainly hope it will be range of the current LSD therapies that are available so ranging from 1 in 40,000 to 1 in 300,000 that will give you a sense of the market. Having said that we continued to find patients or we continued to learn more about the market, we will no more this year as we continued to enroll in our Phase 3 study to give a better sense hopefully by the middle to end of this year of how we are feeling about the total market size. The Wolman is very, very rare. I mean that’s much rare certainly more on the 1 in 300,000 and probably less 1 in 0.5 million size. Okay, to move to breakout.

Eric Schmidt - Cowen and Company

I think you can take the next door for additional questions.

Sanj Patel - Chief Executive Officer

Great. Thank you.

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