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 ConjuChem Inc. is an early stage biotechnology company and its primary business
purpose is the development and use of its novel in vivo bioconjugation technology to
develop improved therapeutic drugs.
 The Company was incorporated in 1997. In November 2000 it completed its initial
public offering of shares.
 ConjuChem is located in Montreal, Canada and employs 45 people, 90% of whom
are in research and development.
 The management team is headed by CEO Jacques Lapointe whose previous
experience includes positions such as President and Chief Executive Officer of Glaxo
Wellcome in both Canada and the UK and President and Chief Operating Officer of
BioChem Pharma Inc.
Current price: $12.29 (02/17/04)
52 week range $0.3-12.88
Average volume: 455,742 (3mo)
Market Cap: $486.7 mm
EPS: $-0.92
P/E: -13.13
Revenue (‘03): $1.0 mm
Expenses (‘03): $23.0 mm
Net Loss (‘03): $27.6 mm
Cash: $41.9 mm
Burn Rate (mm/mo): $2.0
Months of cash: 21
Long term debt: $22.3mm
DAC:GLP-1
formulation problems
DAC: opioid trials fail-August
DAC:TI trial fails-August
CEO resigns- September
Announce
ment of
year end
results
Preliminary
DAC:GLP-1
Phase I/II data
(& Jaques
Phase II begins
Lapointe
enrolling
appointed
Final
I/II
CEO)
DAC:GLP-1 data
Each DAC™ construct is a fully patentable new
chemical entity (NCE) that is composed of three
components:
A drug component: a peptide or small molecule that
is responsible for the biological activity

A connector permanently attached to the drug
component

A reactive chemistry group at the opposite end of the
connector responsible for the permanent bonding of
the construct to albumin

The DAC™ construct can be administered into the
patient by intravenous or subcutaneous injection. The
reactive chemistry portion of the DAC™ construct will
then covalently (permanently and specifically) bond to
a single known site on albumin
 SAFETY
DAC™ bioconjugates are not primarily metabolized in the liver and kidneys and therefore, cannot
damage these organs. DAC™ bioconjugates do not readily cross the blood brain barrier, therefore
they cannot access the central nervous system.
 LONGEVITY
DAC™ bioconjugates can extend the half-life of a peptide from minutes to days. This extended
duration of activity results from bonding the peptide to the most abundant protein in serum,
albumin, in a process we call in vivo bioconjugation.
Conjuchems patent portfolio 52 patents in several countries covering:

methods for producing drug conjugates

use of cellular and serum proteins as drug anchors and conjugates

affinity labelling libraries

novel conjugates of opioids

affinity markers for human serum albumin

long lasting insulinotropic peptides

Long lasting synthetic glucagon like peptide

Long lasting fusion peptide inhibitors of viral infection
The oldest of these patents (expiring in the year 2014) includes broad method claims on
the use of in vivo bioconjugation for all therapeutic applications. Subsequent patent
applications relate to focused therapeutic indications and specific drug conjugates
Lead product: DAC:GLP-1:
-Glucagon-Like peptide-1(GRP-1) induces pancreatic secretion of insulin for type II diabetic patients
-Type II diabetes market expect to reach US$20.5 billion by 2012
- 10/2002 resolved formulation problems due to degradation of product; slowed phase I/II trials; now last 3 months
-Phase I/II results 6/2003- 4 trials at different doses showed glucose control for up to 6 days post injection; n=140
-Side effect was nausea which was expected with GLP-; treatable with Reglan; no nausea seen with step up tx
-Final Phase I/II- glucose normalization with all patients for 7 days post injection; no immunogenicity
-Phase II results expected Q2-2004- Our Binary event- endpoint HbA1c levels
2nd product: DAC:GRF:
-Growth releasing hormone (GRH) stimulates Growth Hormone (GH) which is deficient in many disease (congentia
deficiencies, AIDS-related lipodystrophy, COPD, and slow recovery from injury)
-Conjuchem currently has multiple constructs that stimulate IGF-1 secretion in animal models for up to 10 days
post-single injection
-Phase I/II trials to commence Q2 2004
Products in research phase: DAC:NP:
-Atrial Natriuretic Peptide( ANP) is a vasoactive peptide that regulates blood pressure
-Lead construct, CJC-1382:HSA maintains bioactivity after conjugation and has serum half-life of 14.8 hours
Products in research phase:
GLP-2(Crohn’s disease and other intestinal disorders),
Insulin
PTH( Parathyroid Hormone) – hypocalecemia/osteoperosis
Kringle V (anti-angiogenic factor)- solid tumors
Two failed products: DAC:Opioid; DAC:TI ( thrombin inhibitor)
Collaborators
NONE- Conjuchem is perfect for acquisition
 Competitors/Competitive Technology
Exenatide (Eli Lily/Amylin)
Phase III trials showed decreased HgbA1c levels lowered, weight loss, Immunogenicity issues, cash burner, over priced?, multiple
injections
Albugon (Human Genome Sciences): Albumin:GLP-1 fusion peptide
No clinical trials yet
Symlin (Amylin)
- synthetic version of pancreatic hormone amylin; May dose titration trial showed 25% of patients couldn’t tolerate
high doses, recent withdrawal of Swiss drug application due to side effects, recent Morgan Stanley upgrade
ThGLP-1(Theratechnologies)
Long acting platform that modifies enzymatic cleavage site; targeting, GLP-1, GRF, PTH; three phase II trials data
expected soon.
Litaglutide (NN2211; Novo Nordisk)
Long acting GLP-1 analog with a amino acid modification that allows fatty acid attachment that facilitates albumin binding (protein
lipidation). Not that long acting and may be marketed as twice-daily or once daily formulation. Currently in Phase II. Also using this
technology for Insulin
ZP10 (Aventis/Zealand Pharma)
Exendin-4 analog; phase I/II results show 2x daily administration lowers blood glucose levels. Longer acting version is in early
stage development
DPP-IV (Di-peptyl peptidase) inhibitors (Probiodrug, Novartis)
Long term effects still unclear; phase I trials have not begun
 Summary
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Conjuchem is currently trading at 12.40/share. The GLP-1 target is on track to achieve
upcoming phase II trial milestone, potential partnership and the advancement of additional
compounds into clinical trials.
Issues:
-DAC:GLP-1 critical for company survival
-multiple competitors; positive/negative data will affect stock price
-company is not profitable and partnering is essential for survival
Upcoming Binary events:
-Phase II trial data- Q2/04
- Potential for partnership /acquisition before Phase II data
(Large firms with diabetic therapy development but no current in-house GLP-1
development- Pfizer, Glaxo, AstraZeneca)
- Phase I GRH trials to begin Q2/04
- Nasdaq listing likely after phase II trial data
We recommend buying 100 shares of Conjuchem with the endpoint of Phase II trial data or
acquisition.