COMPETITIVE INTELLIGENCE WORKSHOP

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• COMPETITIVE INTELLIGENCE WORKSHOP
• CTN CISTI - FPTT
• February 14, 2001
• Competitive Intelligence in Life Sciences Sector
• A Case Study ParaTecH Therapeutics Inc.
• Godfrey Marchand Manager, Business
  Administration, IBS

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• CONTENT
• Background on the case
• Process we followed
• False starts and lessons learned
• Impact of CI on planning
• Information sources

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• OBJECTIVES (What I hope you get from the talk)
• Multi-dimensional nature of CI
• Impact of CI on strategic and operational
  planning
• The need to identify Decision Makers (drivers)
• The need for analysis segmentation
• Some tips on information sources
• Keep it up to date

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• BACKGROUND
• (1993 1996)
• A tissue engineering project that had been
  terminated
• Continued as a skunk works project for 3 years
• Exploiting the bone generating properties of PTH
• Research and technical successes
• No business evaluation

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• BACKGROUND- Osteoporosis the disease
• Gradual deterioration of bone as we age
• Bone is continually remodeling
• Two cell types Osteoclast/Osteoblast
• Aging and menopause - imbalance
• More bone resorption than bone formation
• Asymptomatic silent disease

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• BACKGROUND Current Treatment
• All current treatments are Anti-resorptive
• Work by slowing down the bone remodeling process
• They are effective Anti-resorptive, however
• They can not restore lost bone
• Fewer than 10 receive any treatment at all
• Fewer than 1 comply sufficiently to be
  effective

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• BACKGROUND Statistics
• One of every two women will suffer a Fracture
• One of every eight men will suffer a fracture
• 100 million to 200 million at risk
• Hip fracture alone costs 14 Billion/year in US
• Costs will increase to 130 billion by 2050
• World Therapy market is 4 Billion/year
• Market will grow at 15 compounded annually

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• BUSINESS EVALUATION - 1997
• No effective product/Large unmet need
• Bisphosphonate success
• All major pharma companies interested in disease
• More than 140 products in the pipeline
• Very few products true anabolics
• We planned a strategy to license the product

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• PROCESS LICENSING
• Established criteria for the prospective partner
• We researched the 10 to 15 large Pharmas based on
  criteria
• CI consisted of
• Purchased information, Edgar,
• ReCap, Scientific Literature
• Company publications Market information
• Patent data bases Some contacts
• Selected 5 target companies

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• PROCESS LICENSING
• Licensing package
• Described technology, research results
• We determined our product strengths
• Presented our strong patent position
• Presented the market study
• Tailored presentation to each company
• We had studied their portfolio

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• PROCESS LICENSING
• Had completed a valuation different measures
• Had received the mandate from IBS management
• Initial contact, non-confidence
• Visited each Company under confidentiality

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• LICENSING PROCESS
• From Feb 1997 to Jun 1998
• Large Pharma Companies
• AHP, HMR, Astra, RPR, Roche,
  Sanofi
• Small to mid Pharma
• Ares Serono, ICN Pharma, Debio

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• LICENSING PROCESS - CI Lacking
• Product related
• Concern with injectibles
• The PTH Uncertainty
• Perception of the stage of our product
• Manufacturing process unknown
• Unknown stability
• Weak Product differentiation/advantage
• The need to repeat everything we had done
• The pharmacoeconomics
• Patents were still pending

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• LICENSING PROCESS - CI Issues
• Industry knowledge
• Big pharma dynamics/Who to talk to
• Identifying the champion in each company
• The company investment approval processes
• We knew little about the regulatory process

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• LICENSING PROCESS - CI Issues
• Other Issues
• Industry Consolidations
• Perceived high investment requirement
• High current investment in the category
• Regulatory barrier
• Timing issues

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• IMPACT ON PLANS
• We recognized that we could not take the next
  steps easily within NRC
• For various reasons the Institute wanted to
  spin-off the technology
• Recognized we did not have the in-house
  expertise
• Identified a partner who has expertise
  synergistic to NRCs
• We addressed each Issue from our licensing
  experience.

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• LICENSING PROCESS - CI Lacking
• Product related
• Concern with injectibles
• The PTH Uncertainty
• Perception of the stage of our product
• Manufacturing process unknown
• Unknown stability
• Weak Product differentiation/advantage
• The need to repeat everything we had done
• The pharmacoeconomics
• Patents were still pending

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• LICENSING PROCESS - CI Issues
• Industry knowledge
• Big pharma dynamics/Who to talk to
• Identifying the champion in each company
• The company investment approval processes
• We knew little about the regulatory process

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• LICENSING PROCESS - CI Issues
• Other Issues
• Industry Consolidations
• Perceived high investment requirement
• High current investment in the category
• Regulatory barrier
• Timing issues

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• Competitive pipeline
• Antiresorptives
• Many antiresorptive products being launched
• Most from same class as current
• Anabolic
• Fluoride - no significant entries
• IGF - 6 projects in the pipeline
• Merck is the most significant, Phase II
• Several genomics based projects
• All in research stage but several will likely be
  successful
• PTH

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• Competitive pipeline
• PTH
• Eli Lilly 1-34 Phase III?
• NPS-Allelix Starting Phase III
• Aventis, Rhone Poulenc
• Takeda, Suntory, Korea Green Cross
• Most companies have a PTH program now

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• OUR PRODUCT POSITIONING
• We see a clear distinction between treatment
  prevention
• We will be positioned in the treatment market
• We will be the second or third product in the
  market
• Strategy will be the next generation, safer,
  more effective product
• Our research indicates that to be a significant
  feature for this product with the clinician
• A next generation oral product will target
  both prevention and treatment

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• CI SOURCES
• Market research web sources
• Edgar Strategis ReCap
• Biospace SEDAR NIH
• CISTI Medline Yahoo Finance
• Biospace-Canada Derwent IBM
• USPTO MicroPatent Alert Each Co www
• AUTM Associations Generally
• Personal News Sites

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• CI SOURCES
• The real sources (People)
• Your network, Conferences Industry
  Associations
• Prof. Assoc Lawyer Accountant
• Peers Consultant Ven Caps
• Entepreneurs Your management Experts
• Community leaders IRAP TT experts
• Your network is Key to your success Get involved

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• CI SOURCES Other
• Directories
• Financial pages
• Personal news pages
• Conference audit pages
• Scientific Journals

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