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Initiating Coverage
May 16, 2016
Windtree Therapeutics (WINT)
Initiation Report
LifeSci Investment Abstract
Windtree Therapeutics (NasdaqCM: WINT) is a specialty biotechnology company focused
on improving the standard of care for neonatal pulmonary medicine by creating innovative
life-saving products. Its lead candidate is AEROSURF, a proprietary drug-device combination
product candidate designed to deliver aerosolized surfactant to the lungs of premature
infants with respiratory distress syndrome (RDS). Windtree recently completed a Phase IIa
study evaluating AEROSURF in 80 infants with RDS and results affirmed the drug-device’s
favorable safety and tolerability profile, as well as provided encouraging initial signs of efficacy.
The Company’s comprehensive Phase II program is ongoing, with Phase IIa and Phase IIb
data readouts expected in the third quarter of 2016 and first quarter of 2017, respectively.
Key Points of Discussion
■
■
AEROSURF® is a Next Generation Treatment for Respiratory Distress Syndrome
in Premature Infants. Windtree’s lead product candidate is AEROSURF, an aerosolized
surfactant for the treatment and prevention of respiratory distress syndrome (RDS)
in premature infants. AEROSURF is a unique drug-device product that combines an
aerosolized formulation of the Company’s synthetic surfactant, lucinactant, with a noninvasive delivery device. This combination is designed to work safely and efficiently with
nasal continuous positive airway pressure (nCPAP) to deliver lucinactant directly to the
lungs of fragile premature infants. AEROSURF has the potential to revolutionize RDS
treatment by eliminating the need for endotracheal intubation and mechanical ventilation,
two invasive and dangerous procedures that lead to adverse outcomes. If approved,
AEROSURF has the potential to become the standard of care in the neonatal RDS market.
Recent Encouraging Phase II Data Highlight Potential for AEROSURF in RDS.
Windtree recently completed a Phase IIa study evaluating AEROSURF in 80 infants of
29 to 34 week gestational age with RDS. Patients were randomized 1:1 to AEROSURF
or nCPAP alone. The AEROSURF arm was comprised of five dosing periods that ranged
between 15 and 90 minutes. Results demonstrated that AEROSURF treatment of 45
minutes or greater lead to lower rates of nCPAP failure compared to nCPAP alone. 53% of
subjects in the control group failed nCPAP, compare to only 30% in the AEROSURF arm.
This represents a 23% absolute reduction or a 43% relative reduction in nCPAP failure
compared to control. Although this trial was not designed to assess efficacy, the trend in the
reduction of nCPAP failure for the higher doses of AEROSURF suggests that therapeutic
levels of aerosolized surfactant may be reaching the lungs.
Analysts
Jerry Isaacson, Ph.D. (AC)
(646) 597-6991
[email protected]
Market Data
Price
Market Cap (M)
EV (M)
Shares Outstanding (M)
Fully Diluted Shares (M)
Avg Daily Vol
52-week Range:
Cash (M)
Net Cash/Share
Annualized Cash Burn (M)
Years of Cash Left
Debt (M)
Short Interest (M)
Short Interest (% of Float)
$2.19
$18
$14
8.2
17.0
92,000
$1.42 - $13.30
$29.4
$0.54
$20.0
1.5
$25.0
0.26
3.1%
Financials
FY Dec
EPS
Q1
Q2
Q3
Q4
FY
2014A
(1.96)A
(1.68)A
(1.82)A
(1.68)A
(7.28)A
2015A
(1.96)A
(1.82)A
(2.80)A
(1.26)A
(7.98)A
2016A
(1.70)A
NA
NA
NA
NA
Expected Upcoming Milestones
■
■
■
Q3 2016 – Results from the second Phase IIa evaluating AEROSURF in RDS.
Q1 2017 – Results from Phase IIb evaluating AEROSURF in RDS.
2017 – Potential to initiate Phase III program for AEROSURF in RDS.
Page 1
For analyst certification and disclosures please see page 26
May 16, 2016
! Ongoing Randomized Phase IIb Study Expected to Readout in Early 2017. Windtree is conducting a
randomized Phase IIb study evaluating AEROSURF in premature infants of 26 to 32 weeks gestational age
receiving nCPAP for RDS. The trial is designed to evaluate the efficacy of aerosolized lucinactant administered in 25
and 50 minute dose groups, including the tolerability of repeat doses. The primary endpoint is the time to
respiratory failure or death due to RDS. The following endpoints will also be evaluated:
o
o
o
Incidence of nCPAP failure;
Time to nCPAP failure;
Physiological parameters indicating the effectiveness of lung function.
The trial will enroll up to 240 premature infants at up to 50 sites in the United States, Canada, Europe and Latin
America. Enrollment is starting with premature infants 29 to 32 weeks gestational age, followed by premature
infants 26 to 28 weeks gestational age. This trial began in the fourth quarter of 2015 and is expected to read out in
the first quarter of 2017.
! Large Opportunity for AEROSURF in Growing RDS Market. According to the Center for Disease control,
there are approximately 4 million births in in the US per year. Approximately 13% of US newborns are born
prematurely, and most estimates of incidence indicate that around 10% of these develop RDS. However, many
infants who are at risk for RDS also receive surfactant therapy prophylactically. We therefore estimate that 3%, or
120,000 newborns per year are candidates for surfactant therapy in the US. As detailed below, we estimate peak US
sales for AEROSURF of $504 million.
! Interesting Initial Findings from Ongoing Observational Study. Windtree is also conducting a noninterventional prospective observational study to collect data on the treatment and outcomes of newborns in the
gestational ages being studied in the AEROSURF clinical program. The goals of the study are to gain further
understanding of nCPAP use, oxygen requirements, intubation practices, as well as other therapies that may impact
nCPAP outcomes and the need for intubation. The study has included approximately 1700 subjects to date and
initial findings suggest:
o
o
o
o
There is a greater need for intubation in the 29-34 gestational age group than previously recognized;
Approximately 75% of infants in the 26-28 gestational age group require intubation;
A large percentage of infants are intubated within the first 1-2 hours of life;
Infants with very low oxygen requirements still have a need for intubation.
These findings are expected to help further define the opportunity for AEROSURF in RDS, as there may be a
greater clinical need and potential market than previously considered.
! Lucinactant is an FDA Approved Synthetic Surfactant With a Proven Track Record in Neonatal RDS.
Lucinactant (liquid instillate) is a complex synthetic drug product comprised of four active pharmaceutical
ingredients, including the surfactant peptide KL4. It was approved in a liquid instillate formulation (SURFAXIN®)
by the FDA in 2012. Windtree’s proprietary KL4 surfactant technology employs a synthetic, peptide-containing
surfactant that is structurally similar to natural pulmonary surfactant. The pivotal clinical program for lucinactant
was the largest ever for a neonatal surfactant and was the first to compare different surfactant therapies. In the
Phase III SELECT trial lucinactant was shown to be significantly better than Exosurf (colfosceril palmitate) on the
primary outcome measures of rate of RDS and rate of RDS-related mortality. A second Phase III study, the STAR
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May 16, 2016
trial, demonstrated that lucinactant is non-inferior to Chisei’s (private) porcine surfactant Curosurf (poractant alfa),
which is the current market leader in neonatal RDS. The lyophilized formulation of lucinactant is being used in the
AEROSURF clinical trials. Lyophilized lucinactant is manufactured for Windtree by Patheon (private) in compliance
with current good manufacturing practices (cGMP).
! Results from Lung Deposition Study Expected in Q3 2016. Windtree is conducting a non-human primate lung
deposition study in order to characterize the deposition of aerosolized lucinactant by the AEROSURF delivery
system. The study includes a series of experiments to quantify the distribution of aerosolized lucinactant throughout
the lungs. Top line data from the study is expected by the end of the third quarter.
! RDS is a Devastating Complication of Premature Birth. Neonatal RDS, also known as infant RDS, is prevalent
in preterm infants, especially those born between 26 to 32 weeks gestational age. The disease is caused by a lack of
pulmonary surfactants in the newborns’ lungs which leads to labored breathing and a lack of proper oxygenation.
Surfactants, which are small peptide-lipid mixtures that help the lungs fill easily and maintain their shape upon
exhalation, do not begin to form in the lungs until very late in the gestation period. RDS was a leading cause of
death among premature infants before the introduction of surfactants via endotracheal intubation in the late 1980s.
This has already led to a significant decrease in RDS-related mortality, however there is a need for less invasive and
safer administration methods. The introduction of innovative, non-invasive drug-device candidates like
AEROSURF, which may reduce intubation, have potential to revolutionize treatment of neonatal RDS.
! Endotracheal Intubation is Dangerous and Can Irreversibly Damage Developing Lung Tissue. Babies born
at risk for RDS generally receive nCPAP immediately, and if this doesn’t work the infant then moves to
endotracheal intubation and surfactant treatment. Intubation is extremely invasive and increases the possibility of
more complicated and costly respiratory problems such as bronchopulmonary dysplasia (BPD). AEROSURF allows
delivery of aerosolized lucinactant during the nCPAP phase of treatment, potentially decreasing the number of
infants who would require intubation. We note that this positions AEROSRUF as the first-line therapy for RDS,
ahead of any surfactant that would be administered through intubation.
! Potential for Aerosolized Surfactants Beyond RDS. Aerosolized KL4 surfactants, alone or in combination with
other drugs, have the potential to treat a range of respiratory conditions including asthma, bronchitis, chronic
obstructive pulmonary disease, and may also be used following lung transplantation. Aerosolized surfactants may
also be beneficial for such conditions as acute lung injury (ALI), as well as diseases involving mucociliary clearance
disorders, such as chronic obstructive pulmonary disease (COPD) and cystic fibrosis (CF). While Windtree is
currently focused on neonatal RDS, there is potential to move into a number of other large markets in the future.
! With a New CEO in Place, Windtree is Poised to Execute. On February 1, 2016, Windtree announced the
appointment of a new Chief Executive Officer, Craig Fraser. Mr. Fraser brings to the Company over 25 years of
biopharmaceutical experience in areas such as product development and successful commercialization. Most recently
he was COO at Aegerion Pharmaceuticals (NasdaqGS: AEGR), where he had worldwide responsibility for
commercial operations, manufacturing and supply chain, as well as corporate initiatives, including strategic
development. Since joining Windtree, Mr. Fraser has been primarily focused on completing AEROSURF’s Phase II
program, and preparing for the potential pivotal program and partnerships in 2017.
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May 16, 2016
Financial Discussion
Windtree reported a net loss of $13.9 million or ($1.70) per share for the quarter ended March 31, 2016, compared
to a net loss of $12.2 million or ($1.96) per share in first quarter of 2015. The operating loss in the first quarter of
2016 was $13.9 million, compared to $11.2 million loss for the first quarter of 2015. Selling, general and
administrative expenses for the first quarter of 2016 were $3.7 million, compared to $3.4 million for the first quarter
of 2015. Research and development expenses were $10.4 million for the first quarter of 2016, compared to $7.1
million for the first quarter of 2015. As of March 31, 2016, Windtree reported accounts payable and accrued
expenses of $14.6 million, and long-term debt of $25 million, which is payable to Deerfield in two equal installments
of $12.5 million in February 2018 and February 2019. As of March 31, 2016, Windtree had cash and cash
equivalents of $29.4 million, which is expected to support the completion of the AEROSURF Phase II clinical
program, and fund operations through the first quarter of 2017.
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May 16, 2016
Table of Contents
Company Description ....................................................................................................................................................................6
AEROSURF: The First Aerosolized Surfactant Therapy for Neonatal Respiratory Distress Syndrome .........................6
Lucinactant is an FDA Approved Synthetic Surfactant.......................................................................................................7
AFECTAR Connector ..............................................................................................................................................................7
Aerosol Delivery System ...........................................................................................................................................................8
Pharmacoeconomic Advantages of AEROSURF ................................................................................................................9
Safety Profile ...............................................................................................................................................................................9
Neonatal Respiratory Distress Syndrome (RDS) .......................................................................................................................9
Causes and Pathogenesis...........................................................................................................................................................9
Diagnosis and Symptoms ...................................................................................................................................................... 10
Treatment ................................................................................................................................................................................. 10
Disease Market Information ...................................................................................................................................................... 13
Clinical Data Discussion ............................................................................................................................................................. 14
Phase IIa Trial with AEROSURF for RDS in neonates 29 to 34 weeks gestational age ............................................ 14
Phase IIa Trial with AEROSURF for RDS in neonates 26 to 28 weeks gestational age ............................................ 19
Phase IIb Trial with AEROSURF for RDS in neonates 26 to 32 weeks gestational age ............................................ 20
Summary of Phase III Program for Lucinactant in RDS ................................................................................................. 20
Other Drugs in Development for Respiratory Distress Syndrome ..................................................................................... 22
Intellectual Property .................................................................................................................................................................... 22
Management Team ...................................................................................................................................................................... 23
Risk to an Investment ................................................................................................................................................................. 25
Analyst Certification .................................................................................................................................................................... 26
Disclosures .................................................................................................................................................................................... 26
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May 16, 2016
Company Description
Windtree is a specialty biotechnology company focused on improving the standard of care for neonatal pulmonary
medicine by creating innovative life-saving products. Its lead candidate is AEROSURF, a proprietary drug-device
combination product candidate designed to deliver aerosolized surfactant to the lungs of premature infants with
respiratory distress syndrome (RDS). This product is based on the Company’s proprietary KL4 surfactant
technology, which employs a synthetic, peptide-containing surfactant that is structurally similar to natural pulmonary
surfactant. Windtree recently completed a Phase IIa study evaluating AEROSURF in 80 infants with RDS. The
study results affirmed the drug-device’s favorable safety and tolerability profile, as well as provided encouraging
initial signs of efficacy. The Company’s comprehensive Phase II program is ongoing, with Phase IIa and Phase IIb
data readouts expected in the third quarter of 2016 and first quarter of 2017, respectively. Figure 1 shows the
Windtree’s developmental pipeline.
Figure 1. Windtree’s Developmental Pipeline
Source: LifeSci Capital
AEROSURF: The First Aerosolized Surfactant Therapy for Neonatal Respiratory Distress
Syndrome
AEROSURF (lucinactant for inhalation) is a drug-device combination product that combines Windtree's
proprietary, pulmonary surfactant lucinactant with its proprietary aerosol delivery technology. AEROSURF is being
developed to potentially reduce or eliminate the need for endotracheal intubation and mechanical ventilation in the
treatment of premature infants with respiratory distress syndrome (RDS). With AEROSURF, neonatologists could
administer aerosolized surfactant to premature infants supported by nasal continuous positive airway pressure
(nCPAP), without subjecting them to invasive intubation and ventilation. Unfortunately, since nCPAP does not
address the underlying surfactant deficiency that cause RDS, many premature infants respond poorly and often
require intubation and delayed surfactant therapy, which is known as nCPAP failure.
By enabling noninvasive delivery of aerosolized surfactant, AEROSURF, if approved, has the potential to address a
serious unmet medical need, provide transformative clinical and pharmacoeconomic benefits, and enable the
treatment of a significantly greater number of premature infants with RDS who could benefit from surfactant
therapy but are currently not treated because of the risks associated with intubation and mechanical
ventilation. Windtree is conducting a Phase II program for AEROSURF, which includes ongoing randomized Phase
IIa and Phase IIb trials of AEROSURF in premature infants at risk of RDS.
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May 16, 2016
Lucinactant is an FDA Approved Synthetic Surfactant
AEROSURF is designed to deliver an aerosolized formulation of lucinactant to the lungs of premature infants while
receiving nCPAP. Lucinactant in liquid instillate form (SURFAXIN®) was approved by the FDA in 2012 and is a
complex synthetic drug product comprised of four active pharmaceutical ingredients, including the surfactant
peptide sinapultide, also known as KL4, which refers to the repeating pattern of lysine (K) and leucine (L) amino
acids in the peptide sinapultide. This surfactant is structurally similar to natural pulmonary surfactant found in the
healthy infant lungs.
The pivotal clinical program for lucinactant was by far the largest ever for a neonatal surfactant and was the first to
compare different surfactant therapies. In the Phase III SELECT trial lucinactant was shown to be significantly
better than Exosurf (colfosceril palmitate) for the primary outcome measures of rate of RDS and rate of RDS-related
mortality. A second Phase III study, the STAR trial, demonstrated that lucinactant is statistically non-inferior to the
animal-derived surfactant Curosurf, which is the current market leader in neonatal RDS. In both studies, lucinactanttreated infants had lower rates of RDS-related mortality. Currently the lyophilized lucinactant used in AEROSURF
is manufactured by Patheon (private).
AFECTAR Connector
Windtree’s proprietary airway connector for AEROSURF is AFECTAIR, a novel, disposable aerosol-conducting
airway connector that is designed to simplify the delivery of aerosolized liquids. AFECTAIR introduces aerosolized
surfactant directly at the infant interface and minimizes the number of connections in the ventilator circuit, as
shown in Figure 2. Studies conducted by Windtree have demonstrated that this connector improves the delivery of
inhaled therapies, including lucinactant. AFECTAIR is manufactured by Lacey Manufacturing Company, a division
of Precision Products. Windtree has indicated that it has sufficient quantities of this device to support the ongoing
Phase IIb clinical trial evaluating the efficacy of AEROSURF in RDS.
Figure 2. Windtree’s AFECTAR Connector
Source: Mazela et al., 20141
1
Mazela, J. et al., 2014. Aerosolized Albuterol Sulfate Delivery under Neonatal Ventilatory Conditions: In Vitro Evaluation of a
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Aerosol Delivery System
Windtree’s AEROSURF uses a proprietary aerosol delivery system (ADS) includes a durable, reusable aerosol
control unit and a disposable delivery pack. The ADS produces a dense aerosol, with a defined particle size, that
allows efficient and safe delivery of lucinactant to the lungs of premature infants. This ADS is specifically designed
to aerosolize the unique protein and lipid constituents within the formulation of lucinactant. The device creates an
aerosol by first pumping lucinactant through a heated capillary, after which the aerosol cools and reforms into an
optimized particle size for respiration. Studies have shown that large particles do not distribute evenly in the lungs,
while particles that are too small do not reconstitute an effective surfactant therapy. Since particle size and
consistency are key features of effective aerosolized surfactant therapies, Windtree has spent considerable time and
resources developing the optimal ADS for premature infants.
Results from preclinical and clinical studies have shown that AEROSURF’s ADS generates aerosolized lucinactant
at consistent and reproducible volumes, as well as supports delivery of therapeutic doses in reasonable periods of
time. We note that this ADS was tested in the recently completed AEROSURF Phase IIa study, which is discussed
in detail later in this report. Figure 3 shows the current and next-generation AEROSURF ADS, highlighting the
device’s footprint within the neonatal intensive care unit (NICU). This device was developed in collaboration with
Battelle (private), who supplies the ongoing Phase IIa and Phase IIb studies.
Figure 3. AEROSURF’s Aerosolized Delivery System (ADS)
Source: Company Presentation and LifeSci Capital
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May 16, 2016
Pharmacoeconomic Advantages of AEROSURF
There are advantages of AEROSURF that extend beyond its noninvasive technology. Eliminating or reducing time
on a ventilator, need for intubation, and associated morbidities lead to a convincing pharmacoeconomic argument
for an aerosolized surfactant treatment. Each day on a ventilator can cost approximately $2,000 per infant.
AEROSURF could eliminate the need or drastically reduce the number of days on a ventilator and therefore any
associated costs. In addition, bronchopulmonary dysplasia (BPD), a important morbidity associated with intubation
and discussed later in this report, can cost upwards of $250,000/year to treat. AEROSURF has the potential to
dramatically reduce the number of BPD cases, which are caused by invasive and costly intubations.
Safety Profile
Results from clinical trials indicate that AEROSURF has an acceptable safety and tolerability profile. To date, all
reported adverse events and serious adverse events (SAEs) are those that would be expected in the neonatal RDS
population. The most common adverse events observed include neonatal jaundice, constipation, apnea and
anemia. The most common SAEs are air leaks, including pneumothorax and pneumomediastinum, which are also
frequent SAEs with the current standard of care. So far, there is no increased incidence of AEs or SAEs with
increasing doses of AEROSURF.
Neonatal Respiratory Distress Syndrome (RDS)
Neonatal respiratory distress syndrome (RDS), also known as infant RDS, is prevalent in preterm infants, especially
those born between 26 to 34 weeks gestational age. The disease is caused by a lack of pulmonary surfactant in the
newborns’ lungs which leads to labored breathing and a lack of proper oxygenation. Surfactants, which are small
peptide-lipid mixtures that help the lungs fill easily and maintain their shape upon exhalation, do not begin to form
in the lungs until very late in the gestation period. RDS was a leading cause of death among premature infants before
the introduction of surfactants in the late 1980s. This has already led to a significant decrease in RDS-related
mortality, however there is a need for less invasive administration methods. The introduction of innovative noninvasive drug candidates like AEROSURF have the potential to revolutionize treatment of RDS in premature
infants.
Causes and Pathogenesis
Alveoli are tiny terminal air sacs in our lungs where the exchange of oxygen and carbon dioxide takes place, allowing
release of waste gases and transportation of oxygen-rich blood to all parts of the body. The role of surfactants in the
proper functioning of the alveoli is complex and necessary. The walls of the alveoli are sticky and, without the
lubrication provided by surfactants, are very difficult to inflate. The surfactant within the alveolar fluid does its job
by regulating the surface tension of membranes in the lung. Surfactant is secreted into the alveoli by type II alveolar
cells. When a full-term baby is born, the secretion of surfactants leads to the opening of alveoli and the beginning of
respiration. Premature infants who lack the necessary surfactant in the alveolar fluid often struggle to breath,
meaning there is risk that they will not receive adequate oxygen. The illustration in Figure 4 depicts properly
inflated alveoli with surfactants as well as poorly inflated alveoli. The ‘P’ in the illustration refers to air pressure.
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May 16, 2016
Figure 4. Surfactant is Necessary for Proper Lung Function
Source: Johns Hopkins School of Medicine: Interactive Respiratory Physiology
The primary cause of neonatal RDS is premature birth, wherein an infant’s lungs are not fully developed, meaning
the type II alveolar cells do not make the necessary surfactants. Since surfactants, which are a mixture of lipids and
proteins, are necessary for proper inflation of the tiny sacs in the lungs, the lack of surfactant leads to lung
malformation. Specifically, a premature infant with RDS will have some areas of the lung collapse while other areas
are over-extended. These over-extended areas bleed and eventually form fibrin deposits containing different types of
cellular debris. This fibrous material reduces the lungs’ ability to exchange gases, resulting in hypoxia or oxygen
deficiency.
Diagnosis and Symptoms
Diagnosis of neonatal RDS begins with pregnant mothers who are at high risk of premature delivery. Although
preterm birth is the major cause of RDS, the disease is prevalent in twins and infants whose mothers are diabetic.
An infant with a sibling who experienced RDS is also at increased risk. Symptoms of RDS include apnea, cyanosis,
as well as rapid or shallow breathing.
Treatment
The following steps represent a hypothetical treatment for neonatal RDS:
!
Before birth: At-risk mothers can be given glucocorticoids, a type of steroid hormone, to accelerate the
production of surfactant in the infant’s lungs. While the drugs are mostly given in extreme cases, various
biological tests can determine whether or not glucocorticoids are truly necessary.
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May 16, 2016
!
Immediately after birth: Newborns at high risk for RDS, or those displaying the symptoms of the disease,
such as apnea or cyanosis and rapid or shallow breathing, are immediately given nasal continuous positive
airway pressure (nCPAP). Figure 5 shows a premature infant attached to an nCPAP device. While nCPAP
is a minimally invasive procedure, it does not treat the surfactant deficiency that underlies RDS. Many
infants do not respond to nCPAP and require delayed surfactant rescue therapy (SRT) in combination with
mechanical ventilation, also known as nCPAP failure. We note that studies suggest that earlier SRT,
meaning before nCPAP, produces better outcomes than SRT applied following nCPAP failure.
Figure 5. Picture of a Premature Infant Attached to nCPAP
Source: YouTube Video Clip
!
Upon nCPAP failure: Patients who do not respond to nCPAP therapy after birth are given an
endotracheal breathing tube along with mechanical ventilation (MV) assistance. At this point a surfactant is
introduced into the lungs via the endotracheal tube. We note that this procedure is extremely invasive, and
neonatologists find it very difficult to perform. During the procedure, there is a risk for complications,
including bradycardia, oxygen desaturation, and hypotension. The cartoon in Figure 6 outlines the
procedure.
Figure 6. Cartoon Depicting Endotracheal Intubation
Source: Vanderbilt Health
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May 16, 2016
For many preterm infants, the administration of surfactants opens up the lungs and the endotracheal tube is
removed. However, some infants will need to stay on mechanical ventilation long-term. Patients who do not recover
from RDS quickly face other, chronic problems such as bronchopulmonary dysplasia (BPD). BPD is caused by
mechanical ventilation and is characterized by inflammation and scarring in the lungs. This can lead to irreversible
lung damage and contribute to developmental delay.
There are a number of surfactant drugs currently available that are indicated for infant respiratory distress syndrome.
Most of these surfactants are derived from animal sources. Common risk factors associated with the use of animalderived products include immunogenicity, the possibility of transmitting animal-borne infections, and animalderived products may contain pro-inflammatory mediators that may exacerbate respiratory disease. More specific to
RDS, some infants have been found to develop antibodies to bovine2 and porcine-derived3 lung surfactants. The
currently marketed, animal-derived surfactant drugs for infant RDS include Chiesi Farmaceutical’s (private) Curosurf
(poractant alfa), Ony, Inc’s (private) Infasurf (calfacant), and AbbVie’s (NYSE: ABBV) Survanta (beractant). We
discuss each in more detail below.
Curosurf (poractant alfa). Curosurf was approved in 1998 is sold by Cornerstone Therapeutics and Chiesi
Farmaceutici as a suspension for intratracheal use. According to the prescribing information, the drug is an extract
of natural porcine lung surfactant that contains 99% polar lipids, mostly phospholipids, and 1% low molecular
weight proteins, including porcine surfactant associated proteins SP-B and SP-C. The drug is indicated for the rescue
treatment of RDS in premature infants. According to the label, the drug reduces mortality and also pneumothoraxes
associated with RDS.
Infasurf (calfacant). Originally approved in 1998, Infasurf is a surfactant derived from calf lungs that is marketed by
Ony, Inc. According to the prescribing information, Infasurf is a natural surfactant from calf lungs that is composed
of phospholipids, neutral lipids, and hydrophobic SP-B and SP-C. The drug is indicated for the prevention of RDS
in high-risk premature infants and for the treatment of infants who develop RDS. According to the label, the drug
decreases incidence of RDS, RDS-related mortality, and RDS-associated air leaks.
Survanta (beractant). Survanta was originally approved in 1991 and is marketed by Abbott. The drug is a natural
bovine lung extract that contains phospholipids, neutral lipids, and surfactant associated proteins. The extract
contains SP-B and SP-C but not SP-A. Colfosceril palmitate, palmitic acid, and tripalmitin are added to improve the
surfactant properties of the natural extract. According to the prescribing information, Survanta is indicated for the
prevention and treatment/rescue of RDS in premature infants. In clinical trials the drug was shown significantly
reduce incidence of RDS, mortality due to RDS, and air leak complications.
In addition to the animal derived surfactants, two synthetic products have been approved for the treatment of the
RDS. Exosurf (colfosceril palmitate), which does not contain any peptide or protein, was approved in 1990 to treat
RDS however the manufacturer GlaxoSmithKline (NYSE: GSK) has since withdrawn this product because it is not
as effective as the other available surfactants. Windtree’s synthetic surfactant Surfaxin (lucinactant) was approved by
the FDA in 2012. On April 17, 2015, Windtree announced that it would cease production of Surfaxin in favor of
dedicating all resources towards developing AEROSURF.
Hamvas, A. et al., 1997. Lung transplantation for treatment of infants with surfactant protein B deficiency. Journal of Pediatrics,
130, pp231–239.
3 Kobayashi, T. et al., 1992. Exogenous porcine surfactant (Curosurf) is inactivated by monoclonal antibody to the surfactantassociated hydrophobic protein SP-B, Acta Paediatrica. 81, pp665–671.
2
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May 16, 2016
Disease Market Information
Epidemiology. According to the Center for Disease control, there were about 4 million births in the US in 2013.
Birth rates in this country have fluctuated over the years, most recently turning down – almost 3% – possibly in
response to the financial crisis. Changing demographics have also led to a slowdown in births, so that the number
has hovered around 4 million per year for almost a decade. It is reasonable to assume that the number of births per
year, while fluctuating, will stay close to 4 million into the foreseeable future. Studies have shown that approximately
13% of newborns are born prematurely, and most estimates of the incidence indicate that around 10% of premature
babies develop RDS.4 However, many infants susceptible to RDS also receive prophylactic surfactant therapy. We
therefore estimate that 3%, or 120,000 newborns per year are candidates for surfactant therapy. Figure 7 details
these assumptions.
Figure 7. AEROSURF US Addressable Patient Population in 2016
% of Infants
# of Infants
Number of infants born in 2016
4 million
% of infants born prematurely
13%
520,000
% of premature infants with RDS
10%
52,000
% of all infants that could benefit from AEROSURF
3%
120,000
Source: LifeSci Capital
AEROSURF Market Potential. Curosurf and other surfactant therapies administered via endotracheal intubation
cost about $750 per treatment. Worldwide sales of surfactant products for RDS have totaled approximately $300
million annually for the past few years. Of these sales, approximately $90 million are made in the US.
We conducted a scenario analysis to determine the peak US market potential for AEROSURF in infant RDS. We
used the following assumptions in our analysis:
4
!
Target population: Based on historical births rates, we estimate that there are approximately 120,000
premature infants each year that could benefit from AEROSURF. This includes infants with RDS and those
at high risk of developing the disease.
!
Market Penetration. After potential approval and launch, AEROSURF may take time to gain market
share. We model three peak penetrations, ranging from 30% to 90%.
!
Treatment Cost: Because AEROSURF is a new formulation of an FDA approved product with clear
advantages over existing methods to treat RDS, we estimate pricing at $6000 per dose.
American Thoracic Society: Breathing in America: Diseases, Progress, and Hope. D. E. Schraufnagel, Ed., 2010.
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May 16, 2016
Figure 8 shows peak revenue projections for AEROSURF. We believe that Windtree may be able to significantly
increase the price for AEROSURF in a few years if the drug-device has been clearly established as the best practice
for the treatment and prevention of neonatal RDS. Potential price increases offer significant upside to the
projections below.
Figure 8. Scenario Analysis for AEROSURF in Neonatal RDS
Scenario 1
# of infants treated
Peak Penetration
Scenario 3
120,000
30%
Cost Per Treatment
Peak Annual Revenues
Scenario 2
50%
70%
$6,000
$216 million
$360 million
$504 million
Source: LifeSci Capital
Clinical Data Discussion
The comprehensive clinical program for AEROSURF includes a completed Phase IIa trial, as well as ongoing
randomized Phase IIa and Phase IIb studies. The completed Phase IIa trial evaluated the safety and tolerability of
AEROSURF compared to nCPAP in premature infants 29 to 34 week gestational age. In addition to the solid safety
and tolerability data generated in the study, there were also encouraging signals that suggested aerosolized surfactant
may be reaching the lungs. The ongoing Phase IIa trial is designed to evaluate the safety and tolerability of multidose AEROSURF in premature infants 26 to 28 week gestational age. This trial initiated in the fourth quarter of
2015, and is expected to provide information on this poorly studied RDS population. Top line results are expected
in the third quarter of 2016.
Windtree’s ongoing Phase IIb study is designed to assess safety and efficacy of AEROSURF in premature infants 26
to 32 week gestational age. This trial began in December 2015 and results are expected in the first quarter of 2017.
Upon successful completion of the Phase II clinical program, Windtree intends to initiate pivotal studies, with the
goal of seeking FDA approval in late 2018 or early 2019.
Phase IIa Trial with AEROSURF for RDS in neonates 29 to 34 weeks gestational age
Trial Design. Windtree completed a randomized, open-label Phase IIa trial evaluating AEROSURF for the
treatment of RDS in preterm infants from 29 to 34 weeks gestational age.5 The objectives of the study were to
demonstrate the safety and tolerability of AEROSURF compared to nCPAP, as well as establish proof of concept
with physiological data. Key inclusion criteria were nCPAP within 90 minutes post-birth and chest radiography
indicating features consistent with RDS. 48 subjects were randomized 1:1 to:
5
https://clinicaltrials.gov/ct2/show/NCT02074059
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May 16, 2016
!
!
!
!
nCPAP monotherapy
15 minutes AEROSURF with nCPAP
30 minutes AEROSURF with nCPAP
45 minutes AEROSURF with nCPAP
The primary endpoint was safety and tolerability during a 7 day treatment period, as determined by recording the
number and severity of adverse reactions, as well as changes in blood oxygen saturation and serum electrolytes.
Following dosing, complications associated with premature birth and signs of worsening RDS were recorded,
including rate of nCPAP failure, which is defined as the need for endotracheal intubation and mechanical
ventilation. During the study, Windtree enrolled an expansion cohort, which allowed the assessment of two higher
doses of AEROSURF. An additional 32 subjects were randomized 1:1 to:
!
!
!
nCPAP monotherapy
60 minutes AEROSURF with nCPAP, with potential repeat dose
90 minutes AEROSURF with nCPAP, with potential repeat dose
Results. On November 12, 2015, Windtree announced full study results, which affirmed the safety and tolerability
of AEROSURF, as well as hinted at encouraging signs of clinical activity. In terms of efficacy, results demonstrated
that a single AEROSURF treatment of 45 minutes or greater lead to numerically lower rates of nCPAP failure
compared to nCPAP alone. Figure 9 shows the percentage of nCPAP failures in all study groups through 72 hours
of treatment. 53% of subjects in the control group failed nCPAP, compare to only 38%, 14% and 38% in the 45, 60
and 90 minute AEROSURF dose groups, respectively. When the data for the highest doses were combined, the
mean rate of nCPAP failure was 30%. This represents a 23% absolute reduction or a 43% relative reduction in
nCPAP failure compared to control. Although this trial was not designed to assess efficacy, the trend in the
reduction of nCPAP failure for the higher doses of AEROSURF suggests that therapeutic levels of aerosolized
surfactant may be reaching the lungs of these infants. These top line results informed the designed of the ongoing
Phase IIb study, which is discussed later in this report.
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May 16, 2016
Figure 9. nCPAP Failure by Treatment Group Through 72 Hours
Source: Company Presentation
Further analysis of the higher dose groups suggests that AEROSURF may also delay the time to nCPAP failure.
Figure 10 shows the percentage of subjects intubated in the first 72 hours post treatment for control, compared to
the combined 45 and 60 minute dose groups. There were no intubations in the AEROSURF groups during the first
6 hours of treatment. In contrast, 18% of subjects treated with nCPAP alone required intubation. These results
suggest that a repeat dose with AEROSURF may further delay and potentially prevent nCPAP failure, eliminating
the need for intubation and mechanical ventilation. We note that the ongoing Phase IIa study, which is discussed
later in this report, is evaluating the safety and efficacy of repeat dosing in infants 26 to 28 weeks gestational age
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May 16, 2016
Figure 10. Time to Intubation for nCPAP Failure for the Combined 45 and 60 Minute (Active)
and nCPAP Treatment Groups
Source: Company Presentation
Healthy lungs can achieve appropriate blood oxygen saturation simply breathing normally. Since the lungs of
premature infants are underdeveloped, supplemental oxygen is often provided during the first hours of life to ensure
tissues are adequately oxygenated. Results from the study demonstrate that AEROSURF lead to a greater percentage
of subjects on atmospheric air at one hour post start of treatment. Figure 11 shows that approximately 28%
receiving AEROSURF were breathing without supplemental oxygen one hour compared to just 7.5% of subjects on
nCPAP alone. The ability to transfer more subjects to room air is consistent with improved lung function, further
suggesting that therapeutic levels of aerosolized surfactant may be reaching the lungs.
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May 16, 2016
Figure 11. Percent of Subjects Breathing Room Air at 1 Hour Post Start of Treatment
Source: Company Presentation
Consistent with helping subjects move off oxygen and to atmospheric air, AEROSURF lead to an improvement in
the fraction of inspired oxygen (FiO2), a measure of lung function. As shown in Figure 12, combined data from the
five AEROSURF dose groups point to a rapid reduction in FiO2 from baseline and this decrease was sustained for
at least 3 hours post-treatment. Because the reduction with AEROSURF is numerically greater than that with
nCPAP alone, this suggests that therapeutic levels of aerosolized surfactant may be reaching the lungs. A similar
trend was observed with blood CO2, which along with FiO2, is an indicator of respiratory function.
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May 16, 2016
Figure 12. Change in the Fraction of Inspired Oxygen (FiO2) from Baseline for the Treatment Groups
Source: Company Presentation
Safety Results. Overall, the safety and tolerability profile of the AEROSURF group in the study was in line with
the control group. All reported adverse events and serious adverse events (SAE) were expected in this patient
population. The most common adverse events observed included neonatal jaundice, constipation, apnea, and
anemia. The most common SAEs were air leaks, including pneumothorax and pneumomediastinum. There was no
pattern observed of increasing adverse events or SAE with increasing doses of AEROSURF. This allowed Windtree
to enroll subjects into the expansion cohort and evaluate two additional doses of AEROSURF.
As mentioned above, pneumothorax, pneumomediastinum, as well as pulmonary interstitial emphysema were the
most common complication of prematurity in both the AEROSURF and control groups. Nine patients in the
AEROSURF group developed air leaks compared to seven patients in the control group. One AEROSURF treated
infant was found to have an air leak prior to study drug administration. One other infant in the AEROSURF group
was inappropriately enrolled in the study, received only a brief exposure to AEROSURF and was excluded from the
analysis above. We note that the incidence of air leaks in the study was in line with historical data.
Phase IIa Trial with AEROSURF for RDS in neonates 26 to 28 weeks gestational age
Windtree is conducting a randomized Phase IIa study with AEROSURF in premature infants 26 to 28 week
gestational age receiving nCPAP for RDS.6 This clinical trial is designed to evaluate AEROSURF administered for
30 and 45 minutes dosing periods. Approximately 32 infants will be recruited at sites throughout North America and
6
https://clinicaltrials.gov/ct2/show/NCT02528318
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May 16, 2016
the EU and randomized 1:1 to AEROSURF or nCPAP. Like the previous Phase IIa trial, up to four escalating doses
of AEROSURF may be evaluated. The primary endpoint is safety and tolerability, as assessed by the recording of
adverse reactions, changes in physiological parameters, as well as complications of prematurity and signs of
worsening respiratory distress as evidenced by the need for increased respiratory support and supplemental oxygen.
The Company anticipates completing enrollment in the first two dose groups in the second quarter of 2016 and
releasing top line results in the third quarter. This trial is expected to provide critical information regarding nCPAP
failures rates for this poorly studied and very fragile RDS population.
Phase IIb Trial with AEROSURF for RDS in neonates 26 to 32 weeks gestational age
Windtree is conducting a randomized Phase IIb study evaluating AEROSURF in premature infants 26 to 32 weeks
gestational age receiving nCPAP for RDS.7 The trial is designed to evaluate the efficacy of aerosolized lucinactant
administered in 25 and 50 minute dose groups, including the ability for infants to receive repeat doses, compared to
premature infants receiving standard care of nCPAP alone. The primary endpoint is the time to respiratory failure or
death due to RDS. The following endpoints will also be evaluated:
o
o
incidence of nCPAP failure, and
physiological parameters indicating the effectiveness of lung function.
The trial will enroll up to 240 premature infants at up to 50 sites in the United States, Canada, Europe and Latin
America. Enrollment is starting with premature infants 29 to 32 weeks gestational age, followed by premature
infants 26 to 28 weeks gestational age. This trial initiated in the fourth quarter of 2015 and is expected to read out in
the first quarter of 2017.
Summary of Phase III Program for Lucinactant in RDS
The Phase III clinical program for lucinactant (liquid instillate) included two successful trials which established the
efficacy and safety of the drug candidate for prevention of RDS. Because of the nature of neonatal RDS, the use of
placebo-controlled trials is unethical. So, the first pivotal trial of lucinactant, called SELECT, was designed to
demonstrate the superiority of the drug over Exosurf. A reference arm was included in the trial in which patients
were treated with a third drug, Survanta. The second, supportive trial for lucinactant, the STAR trial, compared the
drug candidate to Curosurf. Results of both Phase III trials were published in the journal Pediatrics.8,9 In addition to
the solid safety and efficacy data generated in these trials, two important follow-up studies have further
demonstrated the utility of lucinactant as a treatment for RDS.
Upon conclusion of the Phase III program, clinical trial investigators initiated two new clinical trials designed to
follow the patients who were treated in the SELECT and STAR trials. These follow-up studies monitored neonatal
patients who participated in the Phase III trial for a year after birth to determine the long-term effects of early
surfactant therapy. We believe these will be seen as groundbreaking studies in the treatment of premature infants
with surfactants because they are the first to follow patients for a whole year, asking specific questions, and tackling
https://clinicaltrials.gov/ct2/show/NCT02636868
Moya, F.R et al., 2005. A multicenter, randomized, masked, comparison trial of lucinactant, colfosceril palmitate, and beractant
for the prevention of respiratory distress syndrome among very preterm infants. Pediatrics, 115, pp1018-1029.
9 Sinha, S.K. et al., 2005. A multicenter, randomized, controlled trial of lucinactant versus poractant alfa among very premature
infants at high risk for respiratory distress syndrome. Pediatrics, 2005. 115, pp1030-1038.
7
8
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May 16, 2016
new analyses. One study recorded occurrences of rehospitalization after patients left the NICU, the number and
type of respiratory illnesses that occurred after completion of the original study period, as well as deaths. This study
revealed a significant improvement in mortality for lucinactant versus pooled data from all animal-derived
surfactants. And, more importantly, lucinactant also demonstrated a statistically significant one-year survival
advantage over Curosurf, the current market leader.10
The second one-year study of Phase III patients is more important because it specifically asked about the effects of
reintubation for neonatal patients. All patients who currently receive surfactant therapy have already been intubated
and are receiving mechanical ventilation. After the tube and ventilator are removed, many neonatal patients continue
to improve, but others require reintubation. This study looked at the differences in reintubation rates for the
different surfactants, and further at the longer term effects of reintubation. While the dangers of reintubation were
generally understood, this study specifically quantified the risk associated with reintubation. The authors found that
reintubation was highly predictive of mortality for both trials. And, the SELECT and STAR trial data showed
significantly lower rates of reintubation for Surfaxin treated patients compared to those who received animal-derived
surfactants. This study makes a very strong argument for the use of Surfaxin in place of competing products.
Phase III SELECT Trial. The Safety and Effectiveness of Lucinactant vs. Exosurf in a Clinical Trial of RDS in
Premature Infants (SELECT) Phase III trial was designed to test the safety effectiveness of lucinactant, a
synthetically-derived, peptide containing lung surfactant. The trial recruited patients from July 2001 until December
2003. The drug candidate was compared to the synthetic surfactant Exosurf (colfosceril palmitate), which does not
contain peptides, and also to the animal-derived surfactant Survanta (beractant). In addition to safety, the study
investigated rates of RDS at 24 hours and rates of RDS-related death. Lucinactant was shown to be more effective
than Exosurf at preventing RDS and decreased RDS-related mortality when compared to Survanta. Results of the
SELECT study were published in Pediatrics in 2005.11
Phase III STAR Trial. The Surfaxin Therapy Against Respiratory Distress Syndrome (STAR) Phase III noninferiority trial was designed to test the safety effectiveness of lucinactant. The trial recruited patients from June
2001 until May 2003. The drug candidate was compared to the animal-derived surfactant Curosurf (poractant alfa).
The study was based on the observation that animal-derived surfactants are more effective than synthetic
surfactants. Based on this, investigators hypothesized that a synthetic surfactant containing a peptide, such as
lucinactant, would perform at least as well as the animal-derived product. Results of the STAR study were published
in Pediatrics in 2005.12
One-Year Follow-Up to SELECT and STAR Studies. In order to determine the long-term effects of using
surfactants to treat infant RDS, investigators from the STAR and SELECT clinical trials continued to follow
patients for a year.13 Investigators recorded occurrences of rehospitalization after patients left the NICU, the
Moya, F. et al., 2007. One-year follow-up of very preterm infants who received lucinactant for prevention of respiratory
distress syndrome: results from 2 multicenter randomized, controlled trials. Pediatrics, 119(6), pp1361-1370.
11 Moya, F.R et al., 2005. A multicenter, randomized, masked, comparison trial of lucinactant, colfosceril palmitate, and
beractant for the prevention of respiratory distress syndrome among very preterm infants. Pediatrics, 115, pp1018-1029.
12 Sinha, S.K. et al., 2005. A multicenter, randomized, controlled trial of lucinactant versus poractant alfa among very premature
infants at high risk for respiratory distress syndrome. Pediatrics, 2005. 115, pp1030-1038.
13 Moya, F. et al., 2007. One-year follow-up of very preterm infants who received lucinactant for prevention of respiratory
distress syndrome: results from 2 multicenter randomized, controlled trials. Pediatrics, 119(6), pp1361-1370.
10
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May 16, 2016
number and type of respiratory illnesses that occurred after completion of the original study period, as well as
deaths.14 Clinicians also conducted a battery of physical tests and a neurological assessment.
This one-year follow up trial did not reveal any significant differences between treatment groups for incidence of
hospitalization, number and type of respiratory illness, or for the neurological assessment. Like the STAR and
SELECT trials themselves, the follow-up trial revealed a noteworthy survival benefit for patients treated with
lucinactant when compared to the animal-derived therapies. Investigators therefore concluded that lucinactant is at
least as good, if not superior to currently marketed surfactant products.
Other Drugs in Development for Respiratory Distress Syndrome
There are few drug-device products currently in development for the delivery of aerosolized surfactants. In the past,
attempts to aerosolize animal-derived surfactants have not been successful, mainly because the technology to
reproducibly delivery these natural surfactants did not exist. As discussed in the opening sections of this report,
aerosolized particles of specific size and consistency are needed to effectively deliver surfactants to the lungs of
premature infants. In addition, particle size and output consistency is important throughout the aerosolized
surfactant dosing period. For clinical registration trials, the FDA requires that a surfactant ADS needs to deliver a
consistent dose to the infant throughout the individual dosing period as well as consistent dose from device to
device. Although there are a number of device manufacturers with aerosolization expertise, including PARI
(private) and Aerogen (private), these companies are not currently running trials with devices in neonatal RDS.
Intellectual Property
Windtree’s IP portfolio includes composition of matter, formulation, device, method of manufacture and method
use patents. The KL4 surfactant technology was invented at The Scripps Research Institute (Scripps) and was
exclusively licensed to and further developed by Johnson & Johnson (NYSE: JNJ). Windtree currently holds
exclusive licenses to the aerosol technology, which is the core device technology in the Company’s AEROSURF
drug-device product candidate. The aerosol technology patents expire on various dates beginning in May 2016 and
ending in 2031, or, in some cases, possibly later. Figure 13 lists selected patents in Windtree’s portfolio.
14
Moya, F. et al., 2006. Surfactant Trials. Pediatrics, 2006. 119, pp1361-1370.
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May 16, 2016
Figure 13. Select Patents Held By Windtree
Patents
Year of Expiration
US 5,952,303
2017
US 6,013,619
2017
US 6, 613,764
2017
US 7,863,241
2023
US 7,582,312
2025
US 8,701,658
2029
US 8,748,396
2033
US 8,748,397
2033
Source: LifeSci Capital
Management Team
Craig Fraser
President and CEO
Craig Fraser joined Windtree in February of 2016 as President and Chief Executive Officer. He was also appointed
to serve as a member of the Board of Directors in February 2016. Mr. Fraser brings over 25 years of experience as a
leader in both product development and commercial operations and in building biopharmaceutical and device
businesses for both startups and larger companies. Prior to joining the company, he held executive positions at
several biopharmaceutical companies, including as Chief Operating Officer at Aegerion Pharmaceuticals, Vice
President of Global Disease Areas at Pfizer, Vice President and Global Business Manager at Wyeth, and Vice
President of Sales & Marketing and Commercial Operations at Johnson & Johnson / Centocor. Mr. Fraser is a
veteran of the Marine Corps and the Army. Mr. Fraser received his B.S. degree from Slippery Rock University of
Pennsylvania.
Steve Simonson, M.D.
Senior Vice President, and Chief Development Officer
Steve Simonson joined Windtree in May of 2014 as Vice President, Clinical Development and was appointed Senior
Vice President and Chief Development Officer in October 2014. Mr. Simonson has a significant background in
pulmonary critical care, bringing over 25 years of medical practice and pharmaceutical industry clinical trial expertise
including all phases of drug development. Prior to joining the company, he held executive positions with several
companies including Executive Director in the Molecular Development Group at Covance, Vice President of
Clinical Development at Agennix, Inc., and various positions at AstraZeneca, where he spent 15 years in medical
and clinical leadership. Mr. Simonson received his medical degree from the Medical College of Wisconsin, his
Masters of Health Sciences degree in Biometry from Duke University School of Medicine and completed his
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May 16, 2016
training in internal medicine followed by a fellowship in pulmonary and critical care medicine at Duke University
Medical Center.
John Tattory
Senior Vice President, and Chief Financial Officer
John Tattory joined Windtree in January of 2008 as Vice President, Finance and was appointed Senior Vice
President and Chief Financial Officer in March 2014. Mr. Tattory has more than 25 years of financial management
and leadership experience including directing U.S. and international financial operations, strategic transactions,
licensing and collaboration arrangements, and equity and debt financings. Prior to joining the company, Mr. Tattory
served as a Finance Director, Financial Planning & Analysis at Tyco International Ltd., Finance Director, U.S
Primary Care at Bristol-Myers Squibb, and Audit Manager at Ernst & Young. Mr. Tattory received a B.S. degree in
Accounting from Rider University and is a certified public accountant.
Mary B Templeton, J.D.
Senior Vice President, and General Counsel and Corporate Secretary
Mary Templeton joined Windtree in March of 2006 as Senior Vice President and Deputy General Counsel, and was
appointed Senior Vice President, General Counsel, and Corporate Secretary in September 2011. Ms. Templeton has
more than 30 years of senior-level legal executive management experience. Prior to joining the company, Ms.
Templeton served as Senior Vice President, General Counsel and Corporate Secretary to the Charles Schwab
Corporation (San Francisco), Senior Vice President, General Counsel and Corporate Secretary to the Sequor Group
Inc. (New York), and Director of Investment Company Products at Charles Schwab & Co., Inc., and spent several
years in private practice in Philadelphia and New York. Ms. Templeton received a B.A. degree (Philosophy) from
Chatham University, where she serves as a member of the Board of Trustees, and a J.D. degree with High Honors
from Rutgers University Law School. She is a member of the New York and Pennsylvania Bar Associations.
Kathryn A. Cole
Senior Vice President, Human Resources
Kathy Cole joined Windtree in January 2006 as Senior Vice President, Human Resources. Ms. Cole has more than
20 years of extensive HR experience, mostly in the life science industry, managing change while closely aligning HR
strategy with business objectives to ensure a focused, results driven organization. Prior to joining the company, Ms.
Cole served as Vice President, Human Resources for Savient Pharmaceuticals, Inc., in addition to other human
resource management positions of increasing responsibility for Cytogen Corporation, EpiGenesis Pharmaceuticals,
LLC, and the Prudential Insurance Company of Amercia. Ms. Cole received her undergraduate degree in
Communications from Douglass College and her Master of Science degree in Industrial Relations and Human
Resources from the Rutgers University School of Management and Labor Relations.
Lawrence Weinstein
Vice President, Medical Device Development
Larry Weinstein joined Windtree in May of 2014 as Vice President, Medical Device Development. Mr. Weinstein has
over 30 years of respiratory medical device experience including direct experience with capillary-based technology,
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May 16, 2016
new product development, successful launch of several respiratory products, as well as operational excellence and
quality assurance. Prior to joining the company, he served as President and Chief Operating Officer for ALR
Technologies, Vice President of Product Technology at PARI, President of Hydrate, Inc., Senior Vice President of
Operations for PRE Holding, Director of Technology for DHD Healthcare as well as several roles of increasing
responsibility with Cordis Corporation. Mr. Weinstein is a named inventor on over 20 U.S. patents. He is the author
or co-author of over 20 published articles, abstracts and posters in aerosol drug delivery and respiratory
humidification. Mr. Weinstein received his M.B.A. and a M.S. degree in Industrial Engineering from the University
of Miami.
Risk to an Investment
We consider an investment in Windtree Therapeutics to be a high-risk investment. Windtree is currently in clinicalstage development and does not have any marketed or approved products. The Company has not entered Phase III
clinical trials for any program. Failure to show convincing results in future pivotal clinical studies or failure to reach
FDA approval could adversely affect Windtree’s stock price. Regulatory approval to market and sell a drug-device
product does not guarantee that the drug-device will penetrate the market, and sales may not meet expectations. As
a clinical-stage company, Windtree is not profitable and may need to seek additional financing from the public
markets, which may result in dilution of existing shareholder value.
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May 16, 2016
Analyst Certification
The research analyst denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily responsible
for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies), with respect to each
security or subject company that the research analyst covers in this research, that: (1) all of the views expressed in this report accurately
reflect his or her personal views about any and all of the subject securities or subject companies, and (2) no part of any of the research
analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research
analyst(s) in this report.
DISCLOSURES
This research contains the views, opinions and recommendations of LifeSci Capital LLC (“LSC”) research analysts. LSC (or an affiliate)
has received compensation from the subject company for producing this research report. Additionally, LSC provides investment banking
services to the subject company and has received compensation from the subject company for such services within the past 12 months.
LSC expects to receive or intends to seek compensation for investment banking services from the subject company in the next 3 months.
An affiliate of LSC has also provided non-investment banking securities-related services, non-securities services, and other products or
services other than investment banking services to the subject company and received compensation for such services within the past 12
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Neither the research analyst(s), a member of the research analyst’s household, nor any individual directly involved in the preparation of
this report has a financial interest in the securities of the subject company. Neither LSC nor any of its affiliates beneficially own 1% or
more of any class of common equity securities of the subject company.
LSC is a member of FINRA and SIPC. Information used in the preparation of this report has been obtained from sources believed to be
reliable, but LSC does not warrant its completeness or accuracy except with respect to any disclosures relative to LSC and/or its affiliates
and the analyst's involvement with the company that is the subject of the research. Any pricing is as of the close of market for the securities
discussed, unless otherwise stated. Opinions and estimates constitute LSC’s judgment as of the date of this report and are subject to change
without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase
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No part of this report may be reproduced in any form without the express written permission of LSC. Copyright 2016.
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