Medical Need and Market Opportunity

According to the Organ Procurement and Transplantation Network and the European Association for the Study of the Liver (EASL), of the approximately 12,000 patients in the United States and EU who receive liver transplants each year, it is estimated that 30% are HCV-infected. Since immune system suppression is required following liver transplantation, 100% of these patients experience HCV recurrence that can lead to fibrosis and cirrhosis. It is estimated that 50% of these patients develop cirrhosis within two years of transplantation. We refer to this population as the HCV-POLT population, which we estimate to be 50,000 patients in the United States and EU.

In HCV-POLT patients, due to the lack of easily-administered and effective options to address the underlying HCV, patients are monitored closely for the presence of fibrosis and its rate of progression using ALT measurements and biopsies to determine need for treatment. Physicians currently treat these patients when they have an acute flare of HCV together with some sign of fibrosis evident on liver histology. Current treatment options are largely limited to interferon-based regimens that are not well-tolerated or particularly efficacious in this population. Given the lack of effective treatment options, physicians have begun to implement newer treatments such as boceprevir and telaprevir in these patients despite limited data for those treatments in this post-transplant population.

The HCV landscape is expected to evolve dramatically over the next five to ten years with the introduction of interferon-free regimens, which are expected to reach the market as soon as 2015, and next-generation interferon-free regimens, which may reach the market by as early as 2016, with greater efficacy and tolerability over the current antiviral therapies. While these novel treatments are expected to drive high cure rates in treatment-nave patients, even with 100% treatment rates and 90% cure rates, we believe the number of annual transplants needed will significantly exceed the available supply of transplants. Based on market research we commissioned, we estimate that treatment rates would need to be 100% and cure rates would have to exceed 97% before the supply of liver transplants would outstrip the need for transplant on an annual basis, without considering the current backlog. The immuno-compromised status of post-transplant patients and characteristics of viral infection in patients that have previously failed HCV treatments are likely to limit cure rates in the HCV-POLT population, even with the new therapies. We believe emricasan could play an important role in extending life for patients that still require a transplant as a result of not achieving a cure by next-generation agents.