Filed by Corgentech Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: AlgoRx Pharmaceuticals, Inc.
Commission File No. of Subject Company: 000-51146
*** *** ***
The following slides were presented to Corgentech Inc. employees on September 26, 2005 starting at 4:00 PM (PST).
Corgentech and AlgoRx Announce Merger Agreement
Presentation to Corgentech Employees
September 26, 2005
FORWARD LOOKING STATEMENTS
This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in this presentation include, without limitation, forecasts of product development, FDA filings, benefits of the proposed merger, and other matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this presentation. Such risk factors include, among others: difficulties encountered in integrating merged businesses; uncertainties as to the timing of the merger; approval of the transaction by the stockholders of the companies; the satisfaction of closing conditions to the transaction, including the receipt of regulatory approvals; whether certain market segments grow as anticipated; the competitive environment in the biotechnology industry; and whether the companies can successfully develop new products and the degree to which these gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this presentation. Additional information concerning these and other risk factors is contained in Corgentech’s Form 10-K/A for the year ended December 31, 2004 and most recently filed Form10-Q.
Corgentech and AlgoRx undertake no obligation and do not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. All forward-looking statements are qualified in their entirety by this cautionary statement.
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FORWARD LOOKING STATEMENTS (2)
Additional Information and Where to Find It
Corgentech Inc. intends to file a registration statement on Form S-4, and Corgentech and AlgoRx Pharmaceuticals, Inc. intend to file a related joint proxy statement/prospectus, in connection with the merger transaction involving Corgentech and AlgoRx. Investors and security holders are urged to read the registration statement on Form S-4 and the related joint proxy/prospectus when they become available because they will contain important information about the merger transaction. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by contacting Corgentech Investor Relations at the email address: investors@corgentech.com.
Corgentech, AlgoRx and their directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Corgentech and AlgoRx in connection with the merger transaction. Information regarding the special interests of these directors and executive officers in the merger transaction will be included in the joint proxy statement/prospectus of AlgoRx and Corgentech described above. Additional information regarding the directors and executive officers of Corgentech is also included in Corgentech’s proxy statement for its 2005 Annual Meeting of Stockholders, which was filed with the SEC on April 27, 2005. This document is available free of charge at the SEC’s web site at www.sec.gov and from Investor Relations at Corgentech as described above.
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CREATING LATE-STAGE COMPANY
Multiple late-stage product development programs focused on significant clinical problems
Pain management
Inflammatory diseases
Brings together development and commercial expertise in critical areas
Marketing, commercialization, regulatory affairs and clinical trials management
Financial strength and flexibility
All discovery & development programs 100% owned
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AGENDA
About AlgoRx
Product Pipeline of Combined Company
Terms and Timelines
Communications
Summary
5
CORPORATE BACKGROUND
Therapeutic Focus
Three separate programs in pain management
History
Founded in March 2001
Raised $110.4MM
Postponed IPO in February 2005
People
~21 employees
Facilities
Secaucus, NJ and Sunnyvale, CA
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AGENDA
About Corgentech
Product Pipeline of Combined Company
Terms and Timelines
Communications
Summary
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PRODUCT PIPELINE
PRECLINICAL
PHASE 1
PHASE 2
PHASE 3
ALGRX 3268
Pre-procedural analgesia
ALGRX 4975
Post-surgical pain
Morton’s neuroma
Tendonitis
NF- B Decoy
Atopic dermatitis (eczema)
ALGRX 1207
Cutaneous neuropathic pain
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ALGRX 3268-
TOPICAL LOCAL ANESTHESIA
Indication
Reduction of pain associated with needlesticks for venipunctures and intravenous line placements
Phase 3 trial underway
Clinical data expected in second half of 2005
Key desirable product attributes
Sterile, pre-filled, needle-free disposable delivery system (Powderject®)
Rapid onset of action
Within 1 minute with duration of about 10 minutes
No vasoconstriction
No dressings
Phase 1 and Phase 2 clinical trials involved > 1,100 adults & children
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ALGRX 3268
Reduction in Pain from Venipuncture after Administration
EMLA
Package Insert for EMLA
VAS, mm
10
0
-10
-20
-30
3
60
Time after administration, minutes
ALGRX 3268
VAS, mm
10
0
-10
-20
-30
1
3
5
Time after administration, minutes
ALGRX 3268 has an onset within one minute, whereas EMLA is labeled for a pretreatment period of at least one hour
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ALGRX 3268 DEVELOPMENT
Total
Protocol Age Group Phase Patients Primary Endpoint Status Primary Endpoint
Antecubital Fossa Adults 1 272 Safety and Efficacy Achieved Primary Endpoint
Back of Hand Adults 1 183 Safety and Efficacy Evaluate Circulating Achieved Primary Endpoint
Pharmacokinetics Adults 1 38 Lidocaine Achieved Primary Endpoint
Antecubital Fossa Children 2 195 Safety and Efficacy Achieved Primary Endpoint
Back of Hand Children 2 145 Safety and Efficacy Achieved Primary Endpoint
Back of Hand Children 2 306 Safety and Efficacy Achieved
Antecubital Fossa and Back of Hand Children 3 500 Safety and Efficacy Enrollment Completed
Antecubital Fossa and Back of Hand Children 3 500 Safety and Efficacy Enrollment Completed
2139
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ALGRX 4975 – VR1 ANESTHETIC
Capsaicin Overview
Administered locally at the site of pain
Single administration may provide analgesia for weeks to months
Non-opioid based
Only reduces long-term noxious pain associated with C-neurons
Does not affect other nerve fibers important for motor skills
Activates the VR1 channel; expressed by pain receptor C-fibers
Blocks noxious pain with long duration
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ALGRX 4975 DEVELOPMENT
Total
Protocol Phase Patients Primary Endpoint Status
Postsurgical Pain
Bunion Removal Surgery 2 40 Time to Rescue Medication Primary Endpoint Achieved
Bunion Removal Surgery 2 182 Magnitude of Pain Relief Primary Endpoint Achieved
Hernia Repair 2 48 Magnitude and Duration of Pain Relief Ongoing
Total Knee Replacement 2 60 Dosing Study Ongoing
Neuropathic Pain
Morton’s Neuroma 2 60 Magnitude and Duration of Pain Relief Ongoing
Musculoskeletal Pain
End-Stage Osteoarthritis 1 16 Safety Primary Endpoint Achieved
End-Stage Osteoarthritis 2 12 Magnitude and Duration of Pain Relief Primary Endpoint Achieved
Osteoarthritis of the Knee 2 52 Magnitude and Duration of Pain Relief Primary Endpoint Missed
Tendonitis 2 40 Magnitude and Duration of Pain Relief Achieved 30 Day Endpoint;
On-going
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COMMON, CHRONIC PROBLEM
Eczema (Atopic Dermatitis)
Red, cracked, and unbearably itchy skin caused by excess inflammation in the skin
Makes the person more susceptible to infection
90% of people with AD have staph bacteria on their skin compared to <5% of people without AD
Affects about 15 million people in the United States
Affects about 10-20% of infants
Very common in all parts of the world
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DRUG COMPARISON
Topical
NF- ?B Decoy Steroids Calcineurin Inhibitors
Agents
Efficacy +++ +++ ++
Twice a day
Once a day or Once/twice a day
Dosing Short-term/intermittent
less Short-term
long-term
Skin-thinning None Limits use None
Onset of
+++ +++ ++
action
Systemic May cause significant Black box warning for
Limited
exposure side effects cancer risk
Rebound None Frequent Occasional
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PHASE 1/2’s: PROOF OF CONCEPT
Adults with mild-moderate eczema
200 cm2 affected area (treated area will be moderate)
Randomized, double blind
Endpoints
Safety, tolerability and PK
Multiple endpoints to assess preliminary efficacy
Physician and patient assessments of target area (signs and symptoms)
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PHASE 1/2’s:
PROOF OF CONCEPT (2)
US Trial
75 patients
9 sites
Four cohorts (BID)
0.25%
20 patients
0.50%
20 patients
1.00%
20 patients
Placebo
15 patients
Parallel dosing
21 days of treatment and 28 days of follow-up
57 enrolled patients
Ex-US Trial
120 patients
9 sites (Switzerland and 8 in Australia)
Three cohorts
1.0% daily
40 patients
1.0% 2x day
40 patients
Placebo
40 patients
Parallel dosing
28 days of treatment and 14 days of follow-up
20 enrolled patients
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ALGRX 1207
IND-enabling studies underway
New chemical class of local anesthetic for topical analgesia
Deep, rapid penetration of the skin and long duration of action
Addresses a wide variety of procedures including:
Neuropathic pain
Dermatological surgery
Surgical incisions
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ALGRX 1207
New local anesthetic allowing rapid and complete topical anesthesia without exotic delivery
Percent complete anesthesia
0
20
40
60
80
100
-120
-110
-100
-90
Percent complete anesthesia
0
20
40
60
80
100
-120 -60
0
60
120
180
240
300
360
420
Time, minutes
Time, minutes
Lidocaine
ALGRX 1207
Unique non-clinical results in relevant models
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PREVALANCE OF PAIN IN SEVEN MAJOR COUNTRIES
PATIENT NUMBERS (in thousands)
Prevalence of post-operative pain 75,068
Prevalence of back pain 208,996
Prevalence of HIV and AIDS pain 847
Prevalence of diabetic neuropathy pain 13,243
Prevalence of osteoarthritic pain 46,610
Above indications are all targets of Corgentech pipeline
Source: Datamonitor
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3268: TOPICAL LOCAL
ANESTHESIA MARKET DYNAMICS
Strong focus of pain management including treatment protocols and guidelines
Increase in dedicated pediatric hospitals and specialized pediatric departments in larger general hospitals
Continuing pressure on cost reduction and patient through-put in hospitals
Reimbursement for TLAs a significant challenge for office-based procedures
Fundamental market need for easy to use, fast onset TLA
Current market dynamics provide an excellent opportunity for a fast acting, easy to use TLA product like ALGRX 3268
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3268: NEEDLESTICK/VENIPUNCTURE MARKETPLACE IN THE U.S.
42M Pediatric in-hospital
315M Adult in-hospital
40M Hemodialysis visits
54K Pediatric physician offices
11K Outpatient care centers1
1.3K Blood donation centers1
At home self-administration market
1. 2001 US census
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3268: TLAs IN PEDIATRIC HOSPITAL SETTINGS
Relevant Pediatric Procedures
IV Insertions 27%
Surgery/ IV Insertions 12%
Spinal Tap/ LPs 12%
Chemotherapy 1%
Blood Draws 48%
18 million procedures*
Treated Relevant Procedures
IV Insertions 35%
Surgery/ IV Insertions 19%
Spinal Tap/ LPs 11%
Chemotherapy 3%
Blood Draws 32%
2.1 million procedures**
* procedures in children 1-12 yrs. in hospitals with 200+ beds or children’s hospitals
**treated procedures in patients 1-12 yrs. in hospitals with 700+ beds or children’s hospitals (ARK consulting).
Treatment rates based on marketing research conducted by Colburn & Associates 2004
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3268: CURRENT CLINICAL PRACTICE OF TLAs IN HOSPITAL SETTING
Many hospitals offer TLA agents as an option to reduce needlestick pain
Existence of established protocols for TLA use is mixed
Nurses rather than physicians usually decision maker
Some ERs apply TLAs, however use is often impractical due to delayed onset of action
TLAs are most commonly offered to pediatric patients ages 3-10
Parents and sometimes children over 10 occasionally request TLA to reduce needlestick pain
Patient and parent anxiety levels are key factors driving the use of TLAs
Previously treated children frequently request TLA
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3268: PHASED MARKETING APPROACH
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4975: POST-OPERATIVE PAIN MARKET
US post-operative pain market: $1.7 billion
Virtually all patients experience some level of pain post operatively
50% indicate lack of adequate pain control
Patients’ post-surgical pain experiences between 1993 and 1999 have not improved
Europe also under treats post-operative pain
Pain in hospital associated with increased length of stay, longer recovery times, poorer patient outcomes
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4975: POTENTIAL TARGETS—HIGH VOLUME SURGICAL PROCEDURES
Procedure Volume
Caesarean Section 1,163,893
Hysterectomy (all) 1,042,715
Episiotomy 417,699
Arthroplasty (knee) 399,139
Hip Replacement, 343,554
total/partial
CABG 316,471
Colorectal resection 280,969
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CURRENT POST-OP PAIN MEDICATIONS VS. ALGRX 4975
Epidurals
Use declining significantly due to contra-indication in combination use with anticoagulants
Opioids
Nausea, vomiting, respiratory depression and constipation
Sedation may limit the ability of the patient to ambulate and prolong time to discharge
Decreased bowel function can lead to an ileus which causes morbidity and prolongs hospitalization
Concern about addiction leads to insufficient pain relief which has physiologic consequences
Non-narcotics
Unacceptable anesthesia for moderate to severe pain
ALGRX 4975
Unlikely to be contra-indicated for use in conjunction with anticoagulants
Site-specific with limited systemic exposure and unlikely to cause nausea, vomiting, respiratory depression or sedation
No addiction potential
Long-acting with single administration and ideal for moderate to severe pain
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NF-kB DECOY: ECZEMA MARKET
Eczema market is comprised of mild, moderate and severe patient segments within the pediatric and adult patient populations
Patient Population Segmented by Mild, Moderate and Severe (US, EU, Japan)
Moderate 30%
15.6M
Severe 10%
5.2M
31.1M
Mild 60%
Sources:
1. International Consensus Conference on Atopic Dermatitis II: clinical update and current treatment strategies, BJD, 2003; 148 (Suppl. 63): 3-10
2. Prevalence of Atopic Dermatitis in Japanese Adults, Muto T, Hsieh SD et al., BJD, 2003 Jan; 148(1): 117-21
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NF-kB DECOY: RETAIL Rx SALES (U.S.)
Total Dollars (millions) $0 $100 $200 $300 $400 $500 $600 $700 $800 $900
1999
2000
2001
2002
2003
2004
Corticosteroids
Protopic
Elidel
Source: IMS Health, 2004
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1207: TARGET MARKET
Deep, rapid penetration of the skin
Long duration of action
Addresses neuropathic pain market
Non-exotic delivery
Lidoderm® (Endo Pharmaceuticals) Postherpetic Neuralgia Indication
($ in millions)
2001 (IMS) $45
2002 (IMS) $107
2003 (IMS) $215
2004E (Endo) $300
2005E (Endo) $400
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AGENDA
About Corgentech
Product Pipeline of Combined Company
Terms and Timelines
Communications
Summary
32
TERMS OF MERGER AGREEMENT
Both Secaucus and South San Francisco facilities to remain open
Headquarters: South San Francisco
Combined management team will work to integrate the companies and to identify synergies, redundancies and needs across the combined organization
Corgentech and AlgoRx currently employ ~95 people total
Goal is to complete assessment over next three weeks
Board and Management
New Board of Directors composed of: Richard Brewer, Dr. Charles Cohen, Thomas Colligan, Carter Eckert, Dr. Rodney Ferguson, John McLaughlin, Dr. Arnold Oronsky and Dr. Michael Powell
A ninth board member to be identified and added soon after deal approval
Management
John McLaughlin as CEO
Dr. Ronald Burch as VP of Development
Richard Powers as CFO
James Huang as President with primary responsibility for commercial and other operations, key liaison to AlgoRx
Stock Transaction
As of the date of closing of the merger agreement, Corgentech would issue sufficient shares such that AlgoRx shareholders would receive, in a tax-free exchange, 62% of the combined company and Corgentech shareholders would own 38% of the combined company
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PROJECTED TIMETABLE
Sept 23
Execute merger agreement
Sept 26
Analyst call pre-market open from AlgoRx
AlgoRx employee meeting in mid-morning
Fly to SF
Corgentech employee meeting in mid-afternoon
October and thereafter
Investor and analyst meetings
Week of Oct 17
File S-4 with SEC
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PROJECTED TIMETABLE (2)
Week of Nov 14
First round of SEC comments
File first amendment to S-4
Week of Nov 21*
Second round of SEC comments
File second amendment
Week of Dec 5*
Record date
Week of Jan 2, 06*
Shareholder special meetings
* These dates assume that the SEC seeks additional review of our filings.
This additional review may or may not occur. The timetable could be as much as three weeks earlier if the SEC does not have comments on the submission.
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AGENDA
About Corgentech
Product Pipeline of Combined Company
Terms and Timelines
Communications
Summary
36
COMMUNICATIONS
Identify key individual contacts in Secaucus, Sunnyvale, and SSF to assure clear communication, answer questions, etc. during transition period
Project teams
Good venue to share information, discuss issues, solve problems, allocate resources
Minutes within 36 hours – good means to update, share decisions, advise on timeline
Regularly scheduled video-conferences for teams and subteams
Encourage ad hoc meetings to brainstorm solutions
Important with four project teams, filing NDA, etc.
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AGENDA
About Corgentech
Product Pipeline of Combined Company
Terms and Timelines
Communications
Summary
38
STRONG COMBINED COMPANY
Increased development resources (personnel and financial) assure timely execution of multiple clinical trials
Additional regulatory, manufacturing and quality resources assure timely FDA submissions, increased likelihood of successful plant inspections needed for FDA approval and negotiation of long term contracts for uninterrupted product supply
Commercial resources assure proper positioning, sales roll out and reimbursement for maximizing sales
Multiple technological approaches offer risk diversification in product portfolio
Business development resources allow enhanced shareholder return through strategic product partnering
Substantial financial resources
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