Adventures in Biotechnology

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Adventures in Biotechnology Boro Dropulic PhD,
MBA
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Overview

• Background
• Decision to Start a Biotech
• Biotech Business Models
• Financing of Biotech Companies
• Modes of Productivity Relationship to Business
  Models
• The relationship between Business Models and
  Investment
• Case Study Lentigen Business Presentation

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Background

• PhD in Australia (University of Western
  Australia)
• Fogarty Fellow at NIH Bld 10 then Bld 4
• Embryonic Stem Cells
• Gene Therapy
• Johns Hopkins University
• HIV vectors targeted to HIV infected cells (new
  IP)
• VIRxSYS
• First group to initiate and complete Lentiviral
  vector clinical trial (gene therapy for HIV
  infection)
• MBA (Johns Hopkins University)
• Lentigen
• Broad business Model

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Starting a Biotech Company

• Defining the technology
• Can the technology be used for multiple uses?
• Licensing strategy vs starting a biotech company
• If decision to start a company then
• What are the objectives?
• Sell the company to large biotech or pharma
• Grow the company and license out products
• Organization and focus of the company
• Single product focus ? short term exit strategy
• Multiple products ? long term exit strategy

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Therapeutic Biotech Business Model
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Milestone driven value - technology
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Financing of Biotech
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Financing of Biotech
OR Derive revenue streams from the sale of
product or services (research tools products
services) Smaller market potential - more
difficult to attract investors - revenue streams
are much smaller than the therapeutic or
vaccine markets - requires organic growth
strategies
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The Very High Risk Nature of the Conventional
Biotech Business Model

• High risk high failure rate
• Especially true for biotech focused upon
  development of biologics
• Failure not always related to science
• Investor understanding of the technology and
  product development cycle time is very important
• Financing strategy must match product development
  cycle time

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Potential Saving Graces

• Government Grants (SBIR etc)
• Private Foundation Grants
• Contracts (Government or Private/Foundation)
• Out-license portions of the technology
• Other financing models

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Chimeric Business Models for High Risk
Technologies
Long Lead Times to Therapeutic Markets Gene
Therapy Cellular Therapies Stem Cell
Therapy Vaccines (viral vector) RNAi (viral
vector shRNAi)
Therapeutics
Therapeutics
Validation / Growth
Service / Research Products
Service / Research Products
Decreased Risk vs. Lack of Focus
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Models of productivity
Geoff Race CFO Pangenetics Index Forum
2007 Stresa, Italy
Young Genius
Old Master
Femme à la resille (Woman in a hairnet), 1938,
by Pablo Picasso.
Still Life with Carafe, Sugar Bowl, Bottle,
Pomegranates, and Watermelon, 1906, by Paul
Cezanne
value
Paintings most valuable early work
Paintings most valuable late-in-life work
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Comparison of Productivity Models

• Young Genius
• Innovation
• Non-linear concept
• Short term horizon
• Rapid, immediate
• Low of objectives
• Single focus
• Singularity of Purpose
• Virtual simplicity
• High Risk
• No track record

• Old Master
• Experimentation
• Process driven
• Long term view
• Quality mindset
• Higher of goals
• Competing priorities
• Complexity/ Integrated
• infrastructure
• Low Risk
• Track record

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Comparison of Business Models

• Single product Biotech Company
• Innovation
• Short term horizon
• Low of objectives
• Singularity of Purpose
• High Risk
• Concept Based Value Growth

• Multiple product Biotech Company
• Experimentation
• Long term view
• Higher of goals
• Complexity/ Integrated
• Low Risk
• Linear Value Growth

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Comparison of Business Models

• Single Product Biotech
• Innovation
• Short term horizon
• Low of objectives
• Singularity of Purpose
• Multiple Phases
• High Risk
• Concept Based Value Growth
• ACQUIRED

• Multi Product Biotech
• Experimentation
• Long term view
• Higher of goals
• Complexity/ Integrated
• Lifes Work
• Low Risk
• Linear Value Growth
• IPO - ALLIANCES

BOTH ARE VALID GROWTH STRATEGIES
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Growth Strategy Needs to Match Investor Strategy

• Investor Strategies
• Large number of singly focused companies vs few
  technological platform companies
• Shorter exit time for singly focused companies,
  but high risk
• Longer exit time for technological platform
  companies, but lower risk
• Investor Sophistication Important
• Choice of Investor Critical for ultimate success

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• Company Presentation

January 2008
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Safe Harbor and Confidentiality

• The following information is confidential and
  should not be distributed without the permission
  of Lentigen Corporation. This presentation
  contains certain forward looking statements based
  on Lentigens current beliefs and expectations
  about future events. These statements are
  subject to numerous risks, uncertainties and
  assumptions and are not necessarily predictive of
  future results. Actual results may differ
  materially from those anticipated in this
  presentation depending upon a variety of factors
  including development of manufacturing
  procedures, market size and revenues, potential
  competition, regulatory compliance, operating
  effectiveness and other factors that may not be
  currently considered as material.

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Summary

• Lentiviral Vector (LV) gene delivery technology
• Four phase I/II clinical trials in 2008/9
• Eight NIH/DOD grants supporting future
  therapeutic pipeline
• Alliance with ThermoFisher - LV RNAi research
  tools
• Dominant Intellectual Property Position
• Experienced management team and board of
  directors
• Upcoming Milestones

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Lentigen Overview

• Established 2004
• Location
• Gaithersburg, Maryland 2008Q1
• 25,000 ft2 multi-product GMP facilities
• Employees 40
• Technology platform focus
• Lentiviral vector mediated gene delivery
• Areas of application
• Vaccines Therapeutics
• Research and Drug Discovery Tools

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Lentiviral vector (LV) gene delivery

• Most efficient, stable gene delivery system known
• LentiMax LV system
• High titer, low toxicity
• Scalable manufacturing process
• Bench to clinic translatability

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Efficient stable gene delivery with LV-GFP
(Green Fluorescent Protein)
Cells before addition of LV-GFP
98.7
Cells after gene delivery with LV-GFP
Human kidney cells
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Vaccine Therapeutic Pipeline
INDICATION GLIOBLASTOMA CANCER
(GVHD) INFLUENZA VACC. ANEMIA HEPATITIS
C LEUKEMIA (CLL) COR. ARTERY DIS. LYMPHOMA
(EBV) HEMOPHILIA MELANOMA
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Glioblastoma

• 18,000 per year (USA) cases with comparable
  market in Europe
• 50 malignant with 40 week survival
• Market size estimate - 300 million
• Easily addressable patient population
• Patients concentrated at surgical centers
• Limited sales force
• Targeted physicians
• No good current treatment available
• Treatments limited by toxicity Temezolomide (TMZ)
  effectively treats disease
• but prolonged TMZ treatment results in severe
  lymphopenia and thrombocytopenia ? death

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Glioblastoma therapy using LV-MGMT

• Protection of stem cells from TMZ toxicity
• ? longer TMZ treatment
• ? better outcomes for patients
• LV-MGMT can protect stem cells from effects of
  TMZ
• Proof of concept shown in dogs and monkeys
• Clinical trial endpoints are short 3 weeks
• CWRU (Dr S. Gerson)
• Broadly applicable
• CML, AML, HIV etc
• IP exclusively licensed

TEMEZOLOMIDE
LV MGMT
KILLTUMOR
PROTECT STEM CELLS
STEM CELLS
Bone Marrow Transplantation
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Graft versus Host Disease (GVHD)

• In 2005 7,250 allogenic transplants in USA and
  10,000 worldwide
• 50 develop chronic GvHD
• Market size estimate - 300M to 500M
• Potential for huge savings to healthcare system
• Easily addressable patient population
• Patients concentrated at transplant centers
• Limited sales force
• Targeted physicians
• No good current treatment available

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GVHD therapy using LV-TMPK

• Two technological advances
• LV efficient gene delivery
• TMPK human safety gene
• Proof of concept shown in primary human T cells
• Short clinical trial endpoints 3 weeks to 3
  months
• CRADA with NIH 2 sites Drs Gress, Fowler,
  others
• Broadly applicable to other diseases cancer,
  HIV etc
• IP exclusively licensed

DONOR
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Pandemic Seasonal Influenza

• Influenza infects 10-20 of the population every
  year and causes 500,000 deaths
• Approximately 300 million doses produced globally
• Market Size 1B in 2004, rapidly expanding
  market
• Need for vaccine MFG efficiencies
• Egg manufacturing not cost effective
• Cell culture with L.A. virus is limiting
• Need for development of a rapid and efficient
  cell culture based vaccine manufacturing platform

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LV-IFVX Influenza VLP vaccine
Synthesized gene cloned into LV 1 week

• Rapid manufacturing platform
• weeks not months MFG time
• Virus Like Particles (VLP)
• highly immunogenic
• Exact strain match
• no genetic drift during production
• Continuous production of VLP
• advantage over batch production
• Safe
• VLPs are genetically inactive
• IP protected

LV manufacture and QC testing 1 week
LV transduction 1 day
Scale Up cells 3 weeks
Vaccine Purification 1 day
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Potent Immune Response in Mice
Strong immune response generated in mice against
Lentigens H5N1 VLP vaccine (blue) and vaccine
with adjuvant (purple) pre-bleed controls (red)
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Biogenerics Proprietary Biologics

• Biologics that are coming off-patent are worth
  30B
• Erythropoietin, cytokines, coagulation factors,
  antigens, McAbs
• COGS critically important for competing in the
  protein MFG markets
• Efficiencies gained by decreasing time to market
• Efficiencies gained by increasing yield from cell
  lines
• LVs can reduce time to market and decrease COGS
• High copy numbers in cells without gene
  amplification
• Integration in areas of open chromatin ? higher
  expression

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Erythropoietin production

• Gold Standard
• Efficient
• Bulk CHO Cells 2.5 g/L
• No cell cloning
• No selection
• No enhancement of cell growth conditions
• Levels of 5 10 g/L attainable with isolation
  of cell clones

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Research Drug Discovery Tools Pipeline
RESEARCH DEVELOPMENT
PRODUCT LAUNCHED
PRODUCT SMARTVECTOR RNAi CUSTOM
LVs LENTI-GFP, YFP, LUC LV MFG (GLP,
GMP) PROTEIN EXPRESSION LENTIKIT LENTI
PROMOTER LENTI cDNA LIBRARY LENTI RNAi
LIBRARY LENTI EXPRESS KIT LENTI CELL LINES

• Alliance with ThermoFisher Scientific to market
  LV RNAi products

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SMARTvector RNAi Effective gene silencing
GAPDH knockdown 9 days post-transduction with
SmartVector shRNAi Lentiviral vector particles
SHSY5Y neuronal cells Fixed and stained with
GAPDH antibody (red) and Hoechst (blue)
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Effective gene silencing in a wide variety of
cells
Neuronal cells
Stem cells
Suspension cells
Suspension cells
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Difficult-to-Transfect
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Intellectual Property

• Dominant patent estate for Lentiviral vectors
• Lentigen (GBP IP) has acquired the entire Cell
  Genesys Lentiviral vector IP portfolio
• Non-provisional patent coverage of
• Novel LV compositions and methods
• Use of LVs for Influenza VLP manufacturing
• Use of Novel LVs for protein manufacturing
• Lentigen has exclusively in-licensed several key
  payload technologies
• TMPK LentiSafe technology
• MGMT LentiSelect technology
• Lentigen continues to develop and in-license
  additional key proprietary intellectual property

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Grants

• Seven (7) SBIR Grants from National Institutes of
  Health
• Leading Clinical Centers Investigators
• Oncology
• Infectious Diseases
• STTR Grant from Department of Defense
• Efficient Manufacture of Monoclonal Antibodies in
  the National Stockpile
• MIPS Grant
• Development of new animal models for cancer

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Experienced Management

• Boro Dropulic, PhD, MBA - Founder and CEO
• 19 years experience
• Founder CSO of VIRxSYS, Johns Hopkins
  University, NIH
• Sponsor Investigator of first Lentiviral Vector
  Clinical trial in humans
• Adam Sachs, MSE President, Commercial
  Operations
• 23 years experience
• Life Technologies (now Invitrogen), Qiagen,
  Origene
• Global Director for Manufacturing at Qiagen
• Gregory Feulner, PhD, JD VP, Business
  Development
• 19 years experience
• NIH, Johns Hopkins, Gene Logic Inc., Galileo
  Genomics, 3M
• Yung-Nien Chang, PhD VP, Vector Development
• 22 years of experience
• Johns Hopkins University, VIRxSYS, NIH, GTI (now
  Novartis)

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Board of Directors

• David Wetherell Chairman of the Board
• Former Chairman, CMGI,
• Founder, Greenwich Biotech Ventures
• Boro Dropulic, PhD, MBA
• Douglas Lind, MD
• Managing Partner of Accendx Management LLC
• Former Senior Biotech. Equity Analyst at Morgan
  Stanley PaineWebber
• John McMullen, JD, MBA
• Managing Principal of Cambridge Meridian Group
• Republican Nominee for Senate, VT (2004)
• Robert Breyer
• Former President/COO of Alkermes
• Former President and General Manager of Eli Lilly
  Italy
• Barrie Carter, PhD
• EVP and CSO of Targeted Genetics
• Former Chief of the Lab. of Mol. Cell Biology
  at the NIH

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Upcoming Milestones

• Initiate phase I/II clinical trials for GVHD
  Glioblastoma
• Complete pre-clinical studies for Influenza
  vaccine and Erythropoietin protein product
• Continue development of pipeline for therapeutic
  vaccine products, leveraging grant funding
  mechanisms
• Expand alliance with ThermoFisher and other
  partners
• Certify Lentigens new GMP manufacturing
  facilities
• Complete additional financing

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