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Executive

Gustav A. Christensen – President and Chief Executive Officer

Analyst

Robyn Karnauskas – Deutsche Bank Securities

Dyax Corp. (DYAX) Deutsche Bank AG Health Care Conference Call May 7, 2012 9:20 AM ET

Robyn Karnauskas – Deutsche Bank Securities

Good morning. My name is Robyn Karnauskas, I am the Deutsche Bank Biotech analyst. Next we have Dyax Corporation, speaking for Dyax is Gustav Christensen, President and CEO. And for those of you who are listening through the webcast, do you have any questions you can email me at robyn.karnauskas@db.com or we have a new way to access the conference and ask questions synonymously at yorn.com/hc and we can see your questions without knowing who you are. Questions or comments we'll read towards the end.

With that, I’ll turn it over to Gustav.

Gustav A. Christensen

Thank you very much Robyn. I want to thank Deutsche Bank for having us back again at this Annual Healthcare Conference, it’s always a pleasure. I want to thank you for sitting in on the Dyax presentation this morning, I’m looking forward to update you on Dyax and tell you why we are excited about Dyax and it’s future and it’s value proposition.

So it is a presentation in which I will be making some forward-looking statements and therefore call your attention to the Safe Harbor statement.

So Dyax is today a fully integrated biopharmaceutical company, while there are few who have made that for. We have done so by developing and evolving our phage technology phage display, a technology that not only Dyax have utilized to discover up our own products. But build a solid licensing business where other people are using the product and have developed a large pipeline. So where Dyax we have discovered developed and are now selling our first pharmaceutical product KALBITOR for hereditary angioedema attacks. We’re working on phase II studies to expand the label, the first one in ACE inhibitor-induced angioedema they met a medical problem.

We also looking at other angioedema areas where the treatments of allergy does not work so the slowing does not respond throughout the medication. So we have developing a diagnostic strategy to help doctors, diagnosis patients where the pathway is the same, as the pathway that Kalbitor works through. And we have in the works a very exciting second generation products, a gain change in product we call it DX-2930 I’m looking forward to telling you about that.

On the licensing side I’ve said we have developed more than our successful licensing businesses in the biotech industry today. We have 70 partnerships and collaborations and I think it’s fair to say that our phage display is a goal standard for developing human monoclonal antibodies. I just want to remind you that the biggest selling pharmaceutical product today is Uemura, which is a fully human monoclonal antibodies discovered from phage display. Our portfolio status I’ll show you later includes 18 clinical states product candidates. And it generates milestones and your licensing fees et cetera, which you will see as we get through the presentation.

Now we are focusing on the angioedema space. And angioedema is a swelling disease, that’s what edema is a swelling. So the majority of those case is about 60% is mediated by histamines. And you treat them with antihistamines you know it from allergy, but a large percentage about 40% it’s not exactly known exactly how many but talking to spot leaders that’s about the number you get.

Getting through another pass where you have plasma kallikrein bradykinin mediated to pathway. And the most well-known there is a hereditary angioedema for which we have approval for KALBITOR. It’s a very large group much larger group that makes AE probably, there is not inherited. And the first one the ACE inhibitor-induced angioedema, we are now into Phase 2 trials with and we'll talk about that later.

There is also a sort of cuts all group that they call idiopathic. And that's a group we are now developing tools to help doctors address and diagnose. So, our goal is to identify and treat all those plasma kallikrein bradykinin mediated angioedemas.

Now for those of you who do not know what mediated angioedema is a picture speaks a thousand words and you can see [Susi] on this picture, where it’s not the (inaudible) picture that we have, but at least you drink coffee while you watch it. She is obviously disabled.

This is a very simple facial swelling attack. And the disease is an acute inflammatory disease there is a 50% (inaudible) were parents are passing it on to their children. And what is characterized by, as what you see in the picture, mainly unpredictable episodes of severe swelling. That’s very painful. We can (inaudible) in the abdomen, which is a most painful because the internal organ as well. If you hit you in the face of this picture it will also hit you in the lungs, in which cases life-threatening because in close out the air ways.

And there is a handful of patients who die every year. Because they do not get treatment soon enough or the doctors do not call the surgeon in the ER, early enough to intimate the patient

The attacks that last about two to five days and then typical patient gets 20 attacks year. Now you have to do the math to understand what it means, but if you do math that’s one to three months, where you, you cannot go to school and you have a tough time going to work. So it’s very difficult to finish the education that you like, that alone hold the job you want because this swelling is unpredictable therefore your absence is unpredictable.

And we should mention that 50% of all patients will have a laryngeal attack in their lifetime so they live in fear, anxiety and suffer rather highly on the present index. So it’s a group of patients that redefined and often more we will talk more about it. You have to reach, you have to educate to change their lives.

Now we got KALBITOR approved at the very end of 2009 and launched it in 2010. It was the first subcu HAE treatment approved in the U.S. It was approved to treat all attacked locations because we included them in helpline to Phase III studies, the hand feeds and also Larynx and that time we are the only one who had encouraged to include laryngeal attacks in our clinical trials.

We saw the product work quickly and was efficacious we did that a REMs for some hypersensitivity activity and we have a simple REMs program but it deal doctor later that we have done since we introduced the product. So how have we done, how have we’ve been successful launching a product because is often us its small companies can launch a product. But we have steadily grown sales quarter-over-quarter for eight quarters running at this time.

We have grown it to $8 million in the last quarter, which is a 40% gross over the prior quarter. We now have 800 patients on KALBITOR of which 58% are treating their attacks

And I’m saying this because as in orphan market as we just said these patients are treating their attacks. When they use to get an attack, they were hiding, that’s what you do when you’re slow like this, you hide. So you know how to learn to go and get treated.

First in doctors office or in the ER, but we now also sent nurses to the homes, so you can get treated in the comfort of your home. But you have to decided to get treated, not to hide. So education has been an important part of what we have been doing to help these patients beyond finding them.

Today we’ve seen that those treating patients are treating six to nine attacks on an annualized basis. And we’re seeing that the patients who are treating at home is treating at the upper range of that range that I just gave. So the more convenient we can make it for the patient to use the product, the more attacks they will treat.

It may not be difficult to understand, but it is something you have to learn that the more convenient the easier the access, the more likely that is you can treats the patient to take care of their own life.

So is this a market that is fully penetrated, no, absolutely not. The HAE association has identified 6,500 patients, but only a little over 2,000 of those are currently on novel modern treatment. So there is two-thirds of the patients left of those they have identified. So there are lots of growths for the years to come.

And if you look at the prevalence of the disease, then there is probably more or like 10,000 patients in the U.S. not 6,500 that the HAE Association has currently identified. So we are looking forward even when HAE to continue to grow in several years ahead.

So how we actually blend this, where we have focused as a small company on patient and their needs and doctors, because we knew that if we took care of the patients with a product that works, it would evolve and we would grow the sales, exactly what we have done.. We have developed the industry leading patient programs by offering services and support that meet the patients need for how will treat acute attacks. We have KALBITOR Access was a one step point of contextual patients and doctors and we have worked with reimbursements, 95% of our patients are reimbursed, fully reimbursed meaning having zero out-of-pocket pay a 100% of them are treated, but 95% have no out-of-pocket pay.

So our Financial Assistance Program, we have evolved and the last thing we introduced with KALBITOR Debit Card, because patients have expenses whether they do not have transplantation (inaudible) to the ER, their co pays, where normally you would have to pay make an expensive product got reimbursed.

We took care but give them a card, that means they don’t have to take charge of reimbursement, maybe a small thing, but again it makes it easier for the patient to access treatment. We have also developed a nursing support system whereby we have nurses of KALBITOR Access that is in contact with the patients either directly or once a month depending on what the patients want. So they have a nurse at the other end of the phone that’s a friend.

Its often easier to speak to a nurse at the other end of the phone and to family members, who you do not want to worry, it has been a very successful program for us by providing us real information about what the patients need. And we have just recently introduced free genetic counseling, because many families do not fully understand the impact of the genetic disease.

So for us its helpful to get a family to redefined also in terms of evolving and finding new patients, for them as a family its important to understand other members may not be (inaudible) they may have the swelling disease. And for many, many years these patients were deemed having physiological problems, rather than a physical manifestation of agencies.

So again the genetic counseling is something, we have just started to help these families learn and identify other family members, who suffered from their disease. So just to mention a couple of things that we’ve done over the last year, in April last year, we introduced a shipment of products per patients [own]. So they could decide to take the product they saw it everyday, they could say it to doctor’s office or to the ER. And there was a very popular program than more than half of the patients chose rather than having sitting, waiting for them.

We also found out that it really some of them preferred to be treated at home. So we partnered with Walgreens Infusion Services and introduced a program whereby the nurse comes to the home and we see that 65% of those nurses reach the home within the hour. And for an attack, there has 16 to 90 minute prodrome and then evolves over several hours that is a very, very good way to treat the attack.

In case of an efficacy, we found out that many of these patients are hiding and haven’t seen the doctor for a while. So we started patient efficacy programs and in the last 12 months, we had over 100 programs across the U.S. where a patient who has taken chances while speaking to patients and doctors locally. And we find that and there is a key opinion (inaudible) doctor speaking as well, but the key interest of the patient is to learn from another patient who have taken charges of life. How did you do it? What’s happening? What’s lifeline?

So we have used our two years in the market to really learn about the patients and doctors and what we need to do to make access to our product easy, and that’s exactly how we continue to grow the U.S. market. We will continue to build awareness around how to use the product and what the options are for these patients. We have started innovative programs to indentify new patients by helping a small sales force get to see doctors who would have patients rather than run around, knocking on doors on doctors who do not happened and we are helping driving diagnosis of new patients that where against the genetic counseling as one of the examples, where you help to find a family tree.

There is also a new standard of care guideline developed by key international opinion leaders where they recommend that a patient should always first tried to be managed upon acute care and demand care, and only if that fails should you put them on prophylactic care. That is different than the U.S. market has evolved. So we’re pushing very hard, moving forward here that every HAE patients should have an on demand plan and a product place to treat. We’re going to find them, so we didn’t go out. So again, high-touch patient service, the options are whatever fits that patient a local ER that they know well is close by nurse to the home, whatever, which roll for that patient, we have put in place.

Outside the U.S. we decided to partnered, we’re too small hedge company to take on the world and we have Sigma-Tau for the European side, CMIC in Japan and the Neopharm is Israel. We are in particular excited about Japan, because due to the HIV scandals in the 80s and in the 90s plasma products are not really used most in Japan. So one of the products is available in Japan have been for a long time, a plasma drive product, but is not used.

So like the U.S. wasn’t until two years ago, Japan is a very good market and is one-third of the U.S. market and being a recombinant protein our partner CMIC has an opportunity to develop that market from squares and be the first product in there, that we build some market. So we’re very excited about that and we stand to and get 20% to 24% royalty. All our partner now have to do is to do a small 10 patient openly rolled study in Japan to file for approval.

Now moving on to ACE inhibitor-induced angioedema, ACE inhibitors are the fifth most prescribed drug in the U.S. and a small percent of these patients between 0.5% and 1% suffer major phases of swelling attacks. And it’s a bradykinin, plasma kallikrein mediated attack it will not respond to antihistamines. So about 30,000 walks into ER per year and 10,000 of those get hospitalized, because they tend to come rather relating the attack and it evolves and its being in the phases a risk it moves into the larynx. And therefore one third of them end up being admitted to the hospital.

We have a significant size Phase II trial going on with we now expect at year end, we also have a good solid Phase II study going at the University of Cincinnati with Dr. Bernstein. And we expect that those that study will probably also will readout by year end, even though we obviously don’t control the phase and accrual there as we do in our own trial.

Moving onto the diagnostic strategy, what is it, while it’s a program to develop one or more tools to help the doctor identify those patients who suffers from plasma kallikrein bradykinin mediated angioedemas. That will allow the doctor to differentiate between histamine-mediated and plasma kallikrein bradykinin mediated, so they can start directing appropriate treatment to that patient.

Today they can only conclude that is not histamine-mediated by years of failed treatment. And there is side was not so if we can help in diagnose these patients earlier they can get the right treatment earlier. And I should say here again that the main products been there for long time the C1 esterase inhibitor from plasma. These patients many of them do not have normal C1 levels. So therefore the C1 esterase would not work in those cases. We expect that we are developing the test right now and expect to start clinical validation in '13.

Now moving onto our second generation product, we know that most patients would rather not have an attack then treat an attack when treat an attack when it comes. The current prophylactic treatment you have to take IV infused plasma derived product twice a week. We have developed a fully human monoclonal antibody that has a half life, so you may take two steps per month. It’s a validated target, it is the same target that KALBITOR works against. It’s an inhibitor of plasma kallikrein. So it has a long half life, it will be subcu and it will have the safety profile you typically see at fully human monoclonal antibodies. We are moving into a Phase I study in the mid 2013.

So you just look at the size of the current prophylactic market with a less than high deal product I may say and you introduce a fully human monoclonal antibody to treat these patients in a manner that other diseases are used to a couple of times per month. This is a very significant market opportunity worldwide and it’s a validated target and we know it works.

Now moving on to the Licensing business, we have built this platform and we know it works because not only have we discovered our own product, there is a pipeline from the licensees of this technology with 18 products and clinical trials, and we’ll go on and see what they are. So it’s really a strategy of such on goals. You may only stand to receive net 2.5% to 3% on a very, very large number of products developed by (inaudible) companies that are all in the space and addressing major markets.

And unlike some other companies license their technology, our royalties would be 10 years from commercialization. There is no patent cliff. When the product had launched, we have 10 years of royalties coming. For the monoclonal antibody libraries, those patterns runs to 2020 to 2024. So there is still a number of years in which to discover products within the patent period, and then (inaudible) from they hit the market.

So what are these 18 products? If you look at them the ImClone, Eli Lilly portfolio in oncology is there, Amgen's ganitumab is there, there is a large number of again four in Phase III, four in Phase II and now ten in Phase I. Those who’ve followed this presentation will see that their numbers have increased from 14, to 16 to 18 products in clinical trials. So there is a very large number of preclinical compounds moving to (inaudible)

Now you just have to look at probabilities when they are published. While other probabilities is that [biological] products works, and you apply them to Phase III, Phase II and Phase I, and you can see this is a very, very exciting portfolio of products that when they turn into royalties and eventually some of these will. Dyax stand to receive a constant growing stream of royalties.

Now let’s go and look through a couple of them. The - as you rather look at the timing of the (inaudible), in the ramucirumab situation we have six studies going in five indications with more than 5,000 patients. We could never afford to do that, Eli Lily can therefore but we stand to receive royalties on it if it works. And so on, there is (inaudible) in all of these three products coming in ’13, a series of them will come in ’13. This is the end of the studies, so there will be a slight period from the last patient into the readout of the data. But again starting ’13 we’re going to see a number of readout from Phase III clinical trials on these products.

Now moving on looking at ramucirumab, it is the VEGF class of products, ASPEN sunitinib is in there, they are expected to be $12 billion, by ‘16. What characterized this product was in Phase II studies that has showed a 50 and better safety profile than existing products. And that is exactly the issues that has been around these products in the marketplace in the use, so I am sorry. There we go.

Moving on to the ERBITUX, ERBITUX was a humanize monoclonal antibodies developed by the inflowing company. They now have a fully human antibody coming out of our antibody libraries, it’s expected to have a better side effect profile along a half life and again, it is a large market where they expect in 2016 to be about $5 billion, but we expect the fully human antibody to take their share and again we spend to receive royalties.

Moving forward to our financial situation, we have enough cash to get from here to break-even. We finished this first quarter with $44 million in cash. We had guided for the year that KALBITOR sales will increase to $36 million to $40 million that the top line revenue for the company will be $50 million to $54 million. We also guided again that we will reach cash flow break-even in 2013. And these forecasts by the way are solely based on HAE sales in the U.S. They do not make any assumptions about other indications or name place and sales somewhere else in the world.

So, let me just summarize where we are at Dyax and what we have just said, we have KALBITOR. I just remind you because you all invest in biotech. What we have is a product that’s approved, we have now eight quarters of increasing number of doctors prescribing, increasing numbers of patients uses it and constant growing sales quarter-over-quarter and it’s being reimbursed.

Now, let’s take in the way every risk factor you know expect, how big is the market, how much sales we’re going to have, so you should be able to calculate the value of this product. We have label expansion studies going on in ACE inhibitor-induced angioedema and we’re developing the diagnostic tools allowing doctors to identify this large [cruelly] deficient patients that could also be treated with our product.

And then we have by understanding this pathway, and that this mechanism work, develop a fully human monoclonal antibody would avail on half-life that would allow us to introduce the first two migraine prophylactic treatment to these patients. And it could be not only HAE patients, it’s a diagnostic test work, it could there will be all those patients, where the attack is mediated by plasma kallikrein bradykinin that means it would be a market much larger than HAE, but HAE alone for a strong prophylactic product is a very exciting product.

And then of course we have these collaborations, outside the U.S. and we would plan to retain worldwide rights for the second generation antibody 2930, because we believe we can develop that worldwide, at that time we definitely will be strong enough to take such a product worldwide. And then we will wait in excitement to see what the readouts of Eli Lilly’s trials are Anvil trials, Merck Serono’s (inaudible) trials as they go through Phase 3 and hopefully we will get our precedents of those products successfully into the marketplace and we’ll receive the royalties from it.

So again two different value underpinnings of the company, but those one is already proven and already growing in sales and one is getting very, very close to tuition that's why we excited at Dyax about what we have and we believe we represent a very exciting value proposition.

So with that, I will close the presentation and I assume there will active questions. Q&A will be hereby.

Robyn Karnauskas – Deutsche Bank Securities

Yes.

Gustav A. Christensen

Thank you.

Question-and-Answer Session

Robyn Karnauskas – Deutsche Bank Securities

Any questions from the audience?

[Ends Abruptly]

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