jefferies 2nd annual healthcare...

POZEN INC.

®

THE JOURNEY CONTINUES »

Jefferies 2Jefferies 2ndnd Annual Annual Healthcare ConferenceHealthcare Conference

June 26, 2008June 26, 2008

2

POZENINC.

® Forward-Looking Statements

The following presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management’s current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval of our product candidates, including as a result of the need to conduct additional studies, or the failure to obtain such approval or our failure to achieve milestones that would have provided us with revenue; the receipt of future development, regulatory or sales milestones and royalty payments from our collaboration partners, the failure to obtain approval of our product candidates, including for reasons arising from, among other reasons, differences in the FDA's interpretation of the results of studies or trials from that of POZEN's and FDA's judgment that the benefits of the drug do not outweigh its risks; our inability to know with certainty what standards the FDA will use to evaluate drug candidates and how that may change or evolve over time, our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products; our dependence on our collaboration partners for the sales and marketing of our products once approved, including our dependence on GlaxoSmithKline for the sales and marketing of Treximet, competitive factors; our inability to protect our patents or proprietary rights of others; general economic conditions; our failure to successfully commercialize our product candidates; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and on our Form 10-Q for the period ended March 31, 2008. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.

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POZENINC.

®

POZEN is a Small Pharmawith Strong Fundamentals

• Efficient business model

• Experienced management team

• Model self funding since 2000 IPO

• Strong cash position

• Profitable two of last three years

• “Best in class” next generation migraine product launched by market leader

• Innovative pipeline with significant commercial potential

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POZENINC.

® Strong Financial Position

Million

Million

>$50.0

29.7

Expected Net Cash at Year EndNo DebtShares Outstanding

Million$33736

Market Capitalization at 6/25/08Employees

MillionMillion

$62.6$20.0

Cash at 3/31/08Treximet Milestones in Q2 08

Financial Overview

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POZENINC.

® Efficient, Low Cash Burn Business Model

0

10

20

30

40

50

60

70

80

2004 2005 2006 2007 2008 Est.

Fixed Expenses R&D Project Costs Cash Revenue

Revenue / R&D Project Costs / Fixed Expenses* / Cash

* Fixed expenses exclude non-cash stock-based compensation costs in all years

Cash

Revenue

$ (m

illio

ns)

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POZENINC.

®

Key Components of POZEN’s Successful Business Model

• Experienced management team

• In-house creativity generates products with real value to patients and doctors

• Issued patents for all products

• Efficient development programs

• Rapid advancement from Proof of Concept to Phase 3

• Joint development teams through NDA approval

• Partners responsible for manufacturing/commercialization• No fixed infrastructure costs to POZEN

• No sales and marketing expenses

• Sales royalties/milestones generate income beginning immediately with launch

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POZENINC.

®

Innovative Solutions for Unmet Patient Needs

Formulation Phase I Phase II Phase III NDA Market

TreximetTM (GSK)Migraine

PA32540Aspirin Product

PA08140Use with NSAIDs

PA32520/50040Possible Pain/ Cancer Doses

Product

PN 400 (AZN)Arthritis Product

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POZENINC.

® TreximetTM – “The Future Is Here”

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POZENINC.

® POZEN’s Income Potential from Treximet

• Upfront and milestone payments received $80 Million• Potential sales milestones $80 Million

Royalty on Net Sales

$74 million2010 analysts’ consensus revenue estimate

High teens on all salesBeginning January 2010

Mid-single digits until sales threshold, then high teens

Until December 2009

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POZENINC.

®

2010 Analyst Consensus Estimates for Treximet

0102030405060708090

100

2010

Revenue and Expense Estimates for Treximet

Revenue $74m

$ (m

illio

ns)

Expected Expense

$0

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POZENINC.

® ROI of Treximet Through Q1 2008

$82.1

$25.7

$0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0$90.0

$100.0

Revenue Direct Development Costs

Mill

ions

Treximet ROI > 3X

* Does not include cost of R&D personnel or any allocation of overhead expenses

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POZENINC.

®

Why Should Treximet Be Successful for GSK and POZEN?

• Treximet is different than the rest• Superior efficacy to market leader• Next generation product with multiple mechanisms of action• AEs similar to individual components• Patient friendly dose pack• Competitive pricing

• 80% of migraine patients are willing to try a new product (Bigal, et al)• Three issued POZEN patents listed in Orange Book

• First expiry 2017, last expiry 2025

• GSK has the resources (and intends to use them)• Commitment from senior management• Proven migraine sales and marketing teams• Able to fund a major product launch• Committed to the needs of the migraine patient

For full prescribing information see www.treximet.com

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POZENINC.

®

Sustained pain free 2-24 hours

Pain free at 2 hours

Sustained absence of phonophobia

Sustained absence of photophobia

Sustained absence of nausea

Reduction in vomiting

Reduction in rescue medication

Treximet –Superiority Over Market Leader

Improvement vs.Sumatriptan1

60%

33%

30%

28%

18%

50%

36%1JAMA, April 4, 2007—Vol. 297, No. 13

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POZENINC.

® Initial Performance Treximet vs. Relpax

Source: IMS NPA

4,410

9,246

14,786

6,619

0

18,793

12302000400060008000

100001200014000160001800020000

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

TRx'

s

Relpax Treximet

Relpax and TreximetMonthly Total Prescriptions from Launch

Treximet

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POZENINC.

® Oral Triptan New Prescription Share

Source: IMS NPA

Imitrex + Amerge

Maxalt

Zomig

Relpax

Imitrex + Amerge

Maxalt

Zomig

Relpax

Axert

Frova

Treximet1.7%

April 2008April 2008 May 2008May 2008

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POZENINC.

®

Continued Growth of A Next Generation Product After Generic Entry---Wellbutrin XL

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Jan-03

Mar-03

May-03

Jul-0

3Sep

-03Nov

-03Ja

n-04Mar-

04May

-04Ju

l-04

Sep-04

Nov-04

Jan-05

Mar-05

May-05

Jul-0

5Sep

-05Nov

-05Ja

n-06Mar-

06May

-06Ju

l-06

Sep-06

Nov-06

Tota

l Pre

scri

ptio

ns

Wellbutrin XL Wellbutrin SRBupropion HCL SR

Wellbutrin SR and XL and SR Generic TRx

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POZENINC.

® GSK’s Commitment to Treximet

• 2,500 GSK sales representatives attended mid-May launch meeting

• Success with managed care• 85% of covered lives unrestricted 3rd tier access

• Comprehensive promotional materials awaiting FDA approval

• Continued commitment to additional Treximet studies • > 70 abstracts and publications on Treximet

• AAN, April 2008 – 5 abstracts presented

• AHS, June 2008 – 5 abstracts to be presented

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POZENINC.

®

Strong Commitment from GSK Senior Management

“On the launch - - we are very excited about it…it’s an opportunity to redefine the marketplace.”

“The [Treximet] opportunity is bigger than Imitrex, and it is an important product for us –we’re going to be firing with all guns blazing.”

Source: April 24, 2008 GSK Earnings Conference Call Chris Viehbacher, President, North American Pharmaceuticals

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POZENINC.

® Why Did POZEN Choose Naproxen?

• “Naproxen does not increase the risk of heart attacks and ought to be a painkiller of choice.”

Dr. Curt Furberg serves on FDA Drug Safety and Risk Management Advisory Committee

• “For patients with arthritis or other conditions who require chronic pain relief, naproxen appears to be the safest NSAID choice from a cardiovascular perspective.”

David Graham, Cox-2 Inhibitors, Other NSAIDs and Cardiovascular Risk,Editorial, JAMA published online September 12, 2006

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POZENINC.

®

Naproxen – Cardiovascular Risk Profile Versus Other NSAIDs

Brand/Generic Drug Name RR* 95% C.I.

Naproxen 0.97 0.87-1.07Piroxicam 1.06 0.70-1.59Celebrex (celecoxib) 1.06 0.91-1.23Ibuprofen 1.07 0.97-1.18Other NSAIDs 1.10 1.00-1.21Mobic (meloxicam) 1.25 1.00-1.55Indomethacin 1.30 1.07-1.60Low-Dose Vioxx (rofecoxib) 1.33 1.00-1.79All Vioxx (rofecoxib) 1.35 1.15-1.59Diclofenac 1.40 1.16-1.70 High-Dose Vioxx (rofecoxib) 2.19 1.64-2.91

Source: McGettigan P., Henry D. Cardiovascular risk and inhibition of cyclooxygenase: A systematic review of the observational studies of selective and nonselective inhibitors of cyclooxygenase 2. JAMA published online September 12, 2006.

*Relative cardiovascular risk where 1 = neutral

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POZENINC.

® Key Naproxen Information

• Naproxen is one of the most widely prescribed NSAIDs

• Some experts concerned about COX-2 CV toxicity recommend naproxen as the NSAID with the least CV risk potential

• Despite all these advantages, like all NSAIDs, daily naproxen use may cause ulcers in up to 40% of patients within 6 months

• Low dose aspirin use increases the risk of ulcers further

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POZENINC.

®







Product


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POZENINC.

® The Time for PN is Now!

• Huge unmet medical need with serious consequences

• Arthritis is the nation’s leading cause of disability

• 46 million people suffer from arthritis in the U.S.1

• 750,000 hospitalizations, 36 million outpatient visits

• By 2030, nearly 67 million adults will suffer from arthritis1

• NSAIDs are leading treatment for arthritis but usage complicatedby GI toxicity risk

• Stomach complications in patients taking NSAIDs appear to be on the rise due to gap between NSAID prescriptions and therapies providing GI protection2

1 Centers for Disease Control and Prevention (CDC), January 20082 American College of Rheumatology Annual Meeting 2008

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POZENINC.

®

PN 400 – Designed to Meet the Needs and Concerns of Patients and Doctors

• Not a COX-2 NSAID

• Naproxen efficacy and safety profile – OA, RA, AS

• Potentially reduce risk of developing a gastric ulcer, with or without concomitant aspirin use

• Anticipate better GI tolerability than naproxen

• Intended to greatly simplify regimen for patients relying on gastroprotective therapy + NSAID

• Novel dosage form ensures sequential delivery with every dose

• “Drugs don’t work in patients who don’t take them!”

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POZENINC.

®

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POZENINC.

® PN – Sequential Delivery Profile

(μg/

mL)

PN 100–103 Plasma Time – Concentration Curves for Naproxen and PPI on Day 1Proof of Concept study

0

50

100

150

200

250

300

350

0 2 4 6 8 10 12Time (hrs)

PPI

0

5

10

15

20

25

30

35

40

45

50

Nap

roxe

n

PPI Naproxen 500 mg

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POZENINC.

® Anti-Arthritis Oral Market – US

84%

15%

Source: IMS National Sales Perspective, IMS National Prescription Audit™, 2004 & 2007

Total Prescriptions2004 2007

1%

54%

45%

1%

Cox-2sGI ProtectPlain NSAIDs

$6.5 Billion $2.6 Billion

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POZENINC.

® AstraZeneca Deal Structure

• Total upfront and milestone payments received $70 Million

Milestones and Royalties

POZEN will receive low double digit royalties based on net U.S. sales and tiered royalties ex-U.S.

$260 millionSales performance milestones based on achievement of certain sales thresholds

$55 millionDevelopment and regulatory milestones

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POZENINC.

® PN 200-301 – Study Features

• Similar design to PN 400 pivotal Phase 3 trials

• Primary endpoint

• Incidence of gastric ulcers (>3 mm diameter with depth) over 6 months

• Secondary endpoints

• Incidence of DU over 6 months

• Tolerability

• Safety

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POZENINC.

®

PN 200-301 Primary Endpoint –Incidence of Gastric Ulcers - ITT

0

10

20

30

40

1 month 3 months 6 months

Gas

tric

ulc

ers,

cum

ulat

ive

%72% RR

*

3.4%

10.3%

5.1%

23.1%

8.3%

29.4%

* p<0.001 between groups over 6 months

PN200 (n=206)

EC naproxen (n=203)

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POZENINC.

®

0

10

20

30

40

PN 200-301 – Cumulative Incidence of Gastric Ulcers at 6 Months – ASA vs no ASA

No ASA ASA

NaproxenNaproxenn=151

PN200PN200n=150

NaproxenNaproxenn=52

PN200PN200n=56

69% RRp<0.001

69% RRp=0.012

NSNS

Gas

tric

ulc

ers,

%

6.7%

21.9%

8.9%

28.8%

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POZENINC.

® PN 200-301 Study Results

• Demonstrated significant reduction in gastric ulcers compared to EC naproxen

• PN 200 significantly reduced gastric ulcers of concomitant aspirin users

• Increases potential of success for PN 400 Phase 3 study

• Earned $20 million milestone payment

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POZENINC.

® PN 400 – Efficient Development Plan

• Arthritis patients at risk (two pivotal studies)• PN 400 vs. EC naproxen alone (twice daily)• Primary endpoint: cumulative incidence of gastric ulcers at

6 months

• Appropriate clinical pharmacology studies

• 12-month open label safety study

• NDA targeted 1H 2009

• Additional studies to determine how product could potentially benefit patients

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POZENINC.

®







Product


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POZENINC.

®

PA – Designed to Meet the Needs and Concerns of Patients and Doctors

• Only NSAID without a black box

• Aspirin efficacy and safety profile

• Potentially reduce risk of developing a gastric ulcer, with or without concomitant NSAID use

• Anticipate better GI tolerability than aspirin

• Intended to greatly simplify regimen for patients relying on gastroprotective therapy + aspirin

• Novel dosage form ensures sequential delivery with every dose

• “Drugs don’t work in patients who don’t take them!”

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POZENINC.

®

Aspirin Reduces Risks of Cardiovascular Events

• Compelling evidence from studies involving over 140,000 patients• 22% reduction in new serious cardiovascular (CV) events• 30% reduction in both vascular deaths and myocardial infarction

• Risks of serious vascular events reduced in patients:• 46% with unstable angina• 33% with stable angina• 23% with peripheral arterial disease• 53% undergoing coronary angioplasty

• Aspirin substantially reduces risk of death and further CV events in high CV risk

Source: Aspirin Foundation Website – Article on Secondary Prevention

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POZENINC.

® Gastrointestinal Toxicity of Aspirin

• Gastric ulcers are common toxicity of aspirin, even ≤325 mg/day

• Risk increases significantly with age, especially >60

• Fatality rate for patients admitted to hospital for GI hemorrhage due to gastric ulcers is approximately 5-10%

• Low dose aspirin believed to be responsible for up to 1/3 of all mortality attributed to NSAID-related GI complications

Source: Alimentary Pharmacy & Therapeutics; Underutilization of Gastroprotective Strategies in Aspirin Users at Increased Risk of Upper GI Complication; Targownik, L.E.; Metge, C.J.; Leung, S.; 2008

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POZENINC.

® 3 PA Proof of Concept Studies Completed

• Three proof of concept studies completed

• PA32520 vs. 325 mg EC aspirin• 28 day treatment, 40 patients per arm• Endoscopy – baseline, 14, 28 days



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POZENINC.

® PA – Pooled Endoscopic Data

0

10

20

30

40

50

GU/ D U Lanza Sco res 3 & 4

Pooled Endoscopic Data

2.52.475.13

13.75

2.5

9.9

20.5

42.5

PA32540 (n=40)

PA32520 (n=81)

EC ASA 81 (n=39)

EC ASA 325 (n=80)

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POZENINC.

®

Progress on the PA32540 Development Program

Develop a stable, patient friendly dosage form suitable for mass production

Demonstrate bioequivalence of PA32540 dosage form to EC aspirin

Complete all pre-clinical work, if any

Complete Proof of Concept Phase 1 studies

Submit SPA

Prepare clinical trial materials for Phase 3 program

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POZENINC.

® Important Events for POZEN

• 2008 – Treximet performance

• 3Q 08 – Results of bioequivalence studies for PN 400

• 3Q 08 – Results of SPA for PA32540

• 2H 08 – Completion of PN 400 pivotal studies

• 2H 08 – Completion of PN 400 vs Celebrex studies

• 2H 08 – PA32540 Phase 3 studies ready for initiation

• 1H 09 – Data analysis and filing of PN 400 NDA

POZEN INC.

®

THE JOURNEY CONTINUES »

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