Novazyme Pharmaceuticals, Inc.

Novazyme Interview 21 May 2001

This is an approximate transcript (i.e. from notes, not a tape) of an interview between Novazyme and the International Pompe Association (IPA). The participants were, from Novazyme: John Crowley (CEO), Julie Anne Smith (Senior Director, Patient Advocacy), William Canfield, M.D., Ph.D. (Chief Scientist), Pedro Huertas, M.D., Ph.D. (Chief Medical Officer), Anthony McKinney (Vice President, Drug Development) and from the IPA: Randall House (AMDA) and Kevin O'Donnell (AGSD-UK). The contributions are designated as IPA or Novazyme, rather than to individuals, for the simple reason that everyone contributed to the discussion and it was difficult to keep track of who exactly said what!

What makes Novazyme different?
The people, culture and philosophy. We are a science-driven, patient-focused organization. The patient is at the center of everything we do.

We're a glycobiology company. We manipulate carbohydrate structures - for example the sugar chains on enzymes, which can be 50% of the volume of the active enzyme. In order to treat lysosomal storage diseases (LSDs), we need to be able to mimic the carbohydrate structure of the natural enzyme.

Novazyme's expertise in this area stems from over 8 years of research by Dr. William Canfield at the University of Oklahoma.

The carbohydrate chains on lysosomal enzymes target the enzymes to the cells that need it most (heart and muscle). Phosphorylating those carbohydrates is the signal that tells the cell to transport the enzyme inside the lysosomes.

CHO (Chinese hamster ovary) cells, commonly used in cell culture, have a tendency to modify carbohydrate chains in a way that significantly reduces the efficacy of the finished enzyme. They tend to add complex carbohydrate chains rather than the mannose-6-phosphate residues needed as markers for the lysosomes.

Novazyme is modifies the CHO product to make it more natural.

How important is this tendency of CHO cells to add complex carbohydrates? Hasn't the CHO product used in the Duke trial worked well?
The standard in-vitro assay used to measure enzyme uptake may give an exaggerated figure - because it doesn't account for the way the liver can soak up that enzyme when it is introduced to the body. Based on a comparable enzyme we have produced, we estimate that less than 1% of the enzyme used in the Duke trial is phosphoryated.

What's the evidence for the efficacy of the Novazyme product?
Animal studies carried out at Oklahoma and by Dr. Barry Byrne at the University of Florida indicate that normal enzyme activity could be restored to one year-old Pompe's mice with just one injection of our enzyme. It also clears massive amounts of glycogen from the muscle cells after just 6 hours. This is a finding that we have repeated several times.

The high activity of the enzyme means that we may be able to achieve the above result with a lower dose of enzyme than with either the CHO or transgenic products. Our dosage in mice was 0.3mg/kg. The equivalent for the Duke CHO enzyme is 10 mg/kg and for the transgenic enzyme 40 mg/kg.

Once enzyme activity is replaced, glycogen is cleared from the muscles and muscle strength is restored. We have measured muscle strength by an electrical method that allows us to compare the strength of treated and untreated muscle in mice.

This last finding is very important because it suggests that muscles may recover after the glycogen is cleared. The big question now is, can this be replicated in humans?

What are your plans for clinical trials?
We intend to start a clinical trial towards the end of 2001. It will involve affected children and take place at three different centers in the USA Florida, NIH Bethesda, Philadelphia). The trial will be designed so that we can rapidly expand to international centers and to pivotal Phase III as soon as possible.

How many children will you be including and what will be the criteria for inclusion?
The trial will include 12-18 children. Our approach to inclusion will be different to that taken in other trials. We will take profoundly ill children and attempt to make them better.

Just to be clear, by 'profoundly ill' do you mean children who are already showing symptoms of Pompe's and who may be, for example, ventilator dependent?
The two things we want our trials to do are to contribute to science and to help patients. We will therefore be looking at patients with symptoms and will not be excluding children on ventilators. We will be looking for children who have the cardinal manifestations of the disease - cardiac dysfunction (which we believe is in all types, not just the infantile, though not in the form of cardiomyopathy), pulmonary involvement and musculo-skeletal disorder. It doesn't matter which age the children are, as long as they meet the criteria. However, we don't know what the exact criteria will be until we meet with the FDA.

Will the trial be restricted to children in the USA?
The trial will be open to all children who meet the trial criteria, anywhere in the world. We believe that costs should not be something that families should have to worry about, so we will meet all traveling and accommodation expenses, and also compensate for loss of earnings.

Will any of the children on the trial be given a placebo?
No. We are looking for a striking improvement that will demonstrate the efficacy of the treatment. We are looking to reverse the disorder, not just halt decline. We believe that we understand enough about the disease to be able to show change without comparison to a placebo. We also think that it would be unethical to bring children into the trial - perhaps involving a great deal of domestic upheaval - and give them a placebo.

So what are the next steps after that initial trial - will you be extending to other sub-types?
We don't believe that there are sub-classes of Pompe's - what we have is a continuum. However patients can be grouped into distinct populations and we will hold pivotal phase III trials aimed at those populations. We are currently in discussion with the regulatory agencies to that effect.

The big distinction is between CRIM (cross-reactive immunological material) -ve individuals and CRIM +ves. All those with the classical infantile form are CRIM -ve, meaning that they may produce antibodies against alpha-glucosidase. It is possible that the lower dosages needed with our enzyme may help reduce this problem.

The target for the start of wider trials is mid 2002. Our intention is to run different trials in parallel. We are looking worldwide for trial sites, including Australia and Europe.

What is the bottleneck for progress?
We need commercial grade material for phase III and we are looking at options for this. We may decide to manufacture in-house. All of these things are progressing in parallel - we are not waiting for the results of Phase I/II before making progress with Phase III.

When do you think you will be able to complete the registration process?
The best case for approval is mid-2003. This is a challenging target. However building a company from scratch in a year was equally challenging - and we did it!

What about pricing? The high cost of ERT is a concern for many people.
Our philosophy on pricing is that the patient is at the center. The cost will reflect the burden of the disease. We recognize that this is a life-saving technology and our intention is that it will be fairly priced relative to other products in this area. This will be partly due to the low dosages required.

Our philosophy is that no patient should be deprived of this drug because they can't afford it.

What about the developing world?
We will look at ways of tackling the problem of provision in the developing world. To be honest, we would love to have that problem. Our core philosophy of providing the best drug to as many patients as quickly as possible applies with equal vigor to all patients, regardless of geography.

We are determined to retain our patient focus, despite the competing pressures of Wall Street, the regulatory authorities etc. That is why we have appointed Julie Anne Smith as Senior Director with responsibility for
Patient Advocacy.

What is your attitude to the patient groups?
Our philosophy is to be open and honest and to build a partnership. We have already spoken directly to over 100 patients. If there is any change in the timetable we've outlined in this interview, you'll hear it first from us.

Our focus is that it will be great to treat 12-18 kids - but what we need to do is to treat 12-18 hundred kids.

How independent is Novazyme? Is there any chance that you will 'do a Synpac'?
We will do whatever gets our treatment to as many patients as possible, as fast as possible. At the moment, we've considered whether that could best be done as part of a collaboration and have come to the view that, in fact, the best way is to be independent. However, that decision is constantly being re-evaluated against our patient-centered philosophy.

Although 95% of our efforts are currently directed at Pompe's, we have plans for other products. We are also developing treatments for other LSDs - MSP I, Gaucher, and Fabry disease.

Gaucher disease? You're really planning to compete with Genzyme's big product?
The decision isn't driven by a desire to go head to head with Genzyme. We believe that we have a product which will be an improvement on Cerezyme (the Genzyme ERT for Gaucher) and which may help patients with difficulties that product does not help.

What's your biggest problem at present?
Our biggest challenge is putting all the parallel strands together and holding them together. Four months ago we didn't have a manufacturing plant. Now we have a state of the art plant, operators, a GMP (good manufacturing practice) team etc.

We believe that we may well have the "Holy Grail" necessary to effectively treat this horrid disease. We believe that we can beat Nature. But now we have to deliver it to patients. We are a 80-person company going at 100 miles per hour, trying to satisfy our Directors, Wall Street, the regulators - while all the time keeping our patient focus.

What effect does John Crowley's background have on the company?
John Crowley's background undoubtedly helps in retaining and strengthening focus. We want to help not just Megan and Patrick but the thousands of children like them.

We have a regular 'Lunch and Learn' feature where we bring in patients to talk to the staff here about their experience of Pompe's and that also helps to retain the patient focus.

For the record though, Megan and Patrick Crowley will not necessarily take part in the first clinical trial. John Crowley is standing aside from that process.

That means that we are not letting up from our drive to make the enzyme as widely available as possible, as quickly as possible. We will be looking to set up an expanded access program [AKA compassionate use - KO'D] as early as possible in the trials. Participants would need to follow the established treatment protocol and their data could therefore contribute to the approval process.

Thank you for the open way you have approached these discussions and for the time you have devoted to them. We look forward to working with you in the future.

And AMDA wants to thank Kevin O'Donnell for giving his time and energy once again to promote the Pompe cause. Thank you Kevin!

Novazyme Pharmaceuticals, Inc.

Unprecedented Response to Enzyme Therapy for Pompe Disease in Mouse Model

Preliminary Data Suggest Complete Restoration of Skeletal Muscle Function Signals Potential Therapy for Rare Form of Muscular Dystrophy

Orlando, Florida, April 2, 2001 - Researchers from the University of Florida, in conjunction with Novazyme Pharmaceuticals, Inc., (http://www.novazyme.com), demonstrated for the first time that a specially engineered, recombinant human enzyme restores normal muscle function in laboratory animals with a rare type of muscular dystrophy called Pompe disease. Pompe disease is caused by a deficiency of the enzyme acid alpha-glucosidase (GAA), which breaks down glycogen.

NZ-1001 or highly phosphorylated recombinant human acid alpha-glucosidase (HP-rhGAA), the modified GAA developed and produced by Novazyme Pharmaceuticals, Inc., successfully treated experimental mice engineered to have Pompe disease. The investigators treated animals with two separate doses, one week apart resulting in restoration of normal levels of GAA to both skeletal and cardiac muscles, the organs most affected by the disease. NZ-1001 also cleared accumulated glycogen from the muscles of these mice. Most importantly, treatment with NZ-1001 restored normal skeletal muscle function in these diseased mice.

Utilizing Novazyme's proprietary technologies, the company has developed a recombinant human GAA that is nearly identical to the enzyme present in healthy persons. The GAA is produced in a complex process that adds phosphate and modifies sugar molecules attached to the enzyme. The modifications enable the enzyme to be effectively targeted to the lysosome, the location within the muscle cells where it is needed to work.

Barry Byrne, M.D., Ph.D., a pediatric cardiologist in the Departments of Pediatrics, Molecular Genetics and Microbiology and Associate Director of the Powell Gene Therapy Center at the University of Florida, presented the data at the Experimental Biology 2001 conference sponsored by the Federation of American Societies for Experimental Biology (FASEB) - one the world's largest meetings for basic science researchers.

"These studies indicate that NZ-1001 reaches affected organs, enters the target cells, clears accumulated glycogen and restores function in affected animals." said Barry Byrne, M.D. Ph.D.

Pompe disease is a rare, fatal, genetic disorder caused by a deficiency of the enzyme, acid alpha-glucosidase (GAA). Without this enzyme, glycogen accumulates in the lysosome of cells and rapidly destroys muscle fibers. Patients with Pompe disease experience severe muscle weakness, difficulty breathing and cardiac insufficiency. Ultimately, patients require wheel chair assistance and mechanical ventilation and succumb to cardiopulmonary failure. There is currently no approved therapy for Pompe disease.

President and CEO of Novazyme, John F. Crowley said, "We are delighted with the results reported by Dr. Byrne. The data demonstrates that phosphorylation combined with proper glycosylation is critical to reach target tissues in this cruel disease. If we can replicate these results in Pompe patients, we expect a dramatic improvement in their muscle function that, hopefully, will halt and perhaps even reverse the progression of the disease and lead to measurable improvements in quality of life. Novazyme will move NZ-1001 rapidly forward into human clinical trials later this year." ........

Novazyme Pharmaceuticals Receives Orphan Drug Designation for Pompe Disease Therapy

Company to pursue Pompe disease treatment as first in pipeline of drugs to treat lysosomal storage disorders

Oklahoma City, OK, October 5, 2000 - Novazyme Pharmaceuticals, Inc. today announced that the Company has received formal notification from the Office of Orphan Products Development at the Food and Drug Administration (FDA) that its proprietary, highly phosphorylated enzyme replacement therapy for the treatment of Pompe Disease has been granted orphan drug status. This notification from the FDA represents the first official validation of Novazyme's core phosphorylation technology platform with which the Company intends to address the unmet needs of lysosomal storage disease (LSD) patients.

Pompe disease is a fatal neuromuscular disease for which there is currently no approved therapy. Pompe is one of 49 LSDs characterized by the absence of enzymes in the lysosomes of the body's cells. There are several subtypes of Pompe disease that affect persons from infancy to adulthood. All forms of the disease, however, are fatal. There are approximately 5,000-10,000 Pompe patients in the developed world, making it one of the most prevalent of the 49 known LSDs.

In its application for orphan status, filed on July 14, 2000, Novazyme submitted pre-clinical evidence demonstrating that its highly phosphorylated product for Pompe disease, designated as NZ-1001, provides greatly enhanced enzyme uptake into affected cells. Enhanced enzyme uptake is widely viewed as the key to the treatment of all lysosomal storage diseases, particularly Pompe's. With more efficient uptake of replacement enzymes, patients may benefit by greater response to these therapies and by reduced side effects, such as antibody responses.

The company's filing also highlighted the fundamentally different molecular structure of a lysosomal enzyme replacement therapy that is highly phosphorylated and that lacks complex carbohydrate structures. The FDA notification specifically stated that: "We have determined that [Novazyme's] recombinant human highly phosphorylated acid alpha-glucosidase (rhHPGAA) qualifies for orphan designation for enzyme replacement therapy in patients with all subtypes of glycogen storage disease type II [Pompe Disease]."

"The Orphan designation is an important step forward in our path to the human clinic and in providing this treatment to the patients with no current alternative. We are especially proud to have effectively advanced the development of this technology and to have achieved this level of regulatory recognition so efficiently," commented Dr. William Canfield, Novazyme founder and Chief Scientific Officer.

Orphan drug designation qualifies Novazyme to receive certain benefits such as tax credits and marketing exclusivity from the Government in exchange for developing HPGAA. The FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition. If approved, the FDA may not approve any other applications to market the same drug for the same indication except in very limited circumstances for seven years.

"With this acknowledgement from the FDA, we are confident that we are well-positioned to move our proprietary technologies rapidly into the human clinic on multiple diseases and to take a leadership position in this therapeutic field," stated Anthony McKinney, Vice President for Drug Development.

"If Novazyme's enzyme therapy for Pompe Disease proves effective, this would bring enormous benefits to many Pompe patients worldwide who are in such desperate need for a therapy to relieve their life-threatening disease," stated, Dr. Alfred Slonim, Director of the Pompe Disease Center at North Shore University Hospital in Manhasset, New York and an Associate Professor of Pediatrics at New York University.

Novazyme is a pharmaceutical company developing biotherapies for the treatment of lysosomal storage disorders. These biotherapies are based on Novazyme's proprietary technologies for the targeted delivery of the missing enzymes critical for the treatment of these diseases. The technologies were developed by William M. Canfield, M.D., Ph.D. in his laboratories at the University of Oklahoma Health Sciences Center. Dr. Canfield, an Associate Professor of Medicine at the university, founded Novazyme in 1999. Dr. Canfield currently serves as the company's chairman and chief scientific officer. Novazyme's headquarters are located in Oklahoma City, Oklahoma. The company's principal investors include: Catalyst Health & Technology Partners (Boston); HealthCare Ventures (Princeton); the Perseus-Soros Biopharmaceutical Fund (New York); and Neose Technologies (NasdaqNM: NTEC).

CONTACT:

Novazyme Pharmaceuticals, Inc.
John F. Crowley President & Chief Executive Officer
(609) 844-7570; E-mail: jcrowley@novazyme.com

Noonan/Russo
Stephen Gendel Vice President
(212) 696-4455; E-mail: s.gendel@noonanrusso.com