Adventures in Biotechnology
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Adventures in Biotechnology Boro Dropulic PhD, MBA. 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

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Adventures in biotechnology boro dropulic phd mba

Adventures in Biotechnology

Boro Dropulic PhD, MBA


Overview

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


Background

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


Starting a biotech company

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


Therapeutic biotech business model

Therapeutic Biotech Business Model


Milestone driven value technology

Milestone driven value - technology


Financing of biotech

Financing of Biotech


Financing of biotech1

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


The very high risk nature of the conventional biotech business model

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


Potential saving graces

Potential Saving Graces

  • Government Grants (SBIR etc)

  • Private Foundation Grants

  • Contracts (Government or Private/Foundation)

  • Out-license portions of the technology

  • Other financing models


Chimeric business models for high risk technologies

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


Models of productivity

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


Comparison of productivity models

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


Comparison of business models

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


Comparison of business models1

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

  • Life’s Work

  • Low Risk

  • Linear Value Growth

  • IPO - ALLIANCES

BOTH ARE VALID GROWTH STRATEGIES


Growth strategy needs to match investor strategy

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


Company presentation

Company Presentation

January 2008


Safe harbor and confidentiality

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 Lentigen’s 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.


Summary

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


Lentigen overview

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


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

Lentiviral vector (LV) gene delivery


Adventures in biotechnology boro dropulic phd mba

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


Vaccine therapeutic pipeline

R & D

ANIMAL

STUDIES

SCALE UP

PRE-

CLINICAL

IND

PREP

PHASE I/II

CLINICAL

Vaccine & Therapeutic Pipeline

INDICATION

GLIOBLASTOMA

CANCER (GVHD)

INFLUENZA VACC.

ANEMIA

HEPATITIS C

LEUKEMIA (CLL)

COR. ARTERY DIS.

LYMPHOMA (EBV)

HEMOPHILIA

MELANOMA


Glioblastoma

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


Glioblastoma therapy using lv mgmt

Glioblastoma therapy using LV-MGMT

TEMEZOLOMIDE

  • 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

LV MGMT

KILLTUMOR

PROTECT

STEM CELLS

STEM CELLS

Bone Marrow Transplantation


Graft versus host disease gvhd

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


Gvhd therapy using lv tmpk

DLI + BMT

AZT

LV TMPK

IF GVHDTHEN + AZT

KILL ALLO

T CELLS

T CELLS

STEM CELLS

RECIPIENT

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


Pandemic seasonal influenza

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


Lv ifvx influenza vlp vaccine

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


    Potent immune response in mice

    0.800

    0.600

    Absorbance

    0.400

    0.200

    0.000

    1.5

    2

    2.5

    3

    3.5

    4

    4.5

    5

    Log Serum dilution

    Vaccine only

    Prebleeds

    Vaccine with adjuvant

    Potent Immune Response in Mice

    Strong immune response generated in mice against Lentigen’s H5N1 VLP vaccine (blue) and vaccine with adjuvant (purple); pre-bleed controls (red)


    Biogenerics proprietary biologics

    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


    Erythropoietin production

    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


    Research drug discovery tools pipeline

    Alliance with ThermoFisher Scientific to market LV RNAi products

    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


    Smartvector rnai effective gene silencing

    SMARTvector Control

    SMARTvector GAPDH RNAi

    SMARTvector RNAi: Effective gene silencing

    GAPDH knockdown 9 days post-transduction

    with SmartVector shRNAi Lentiviral vector particles

    SHSY5Yneuronal cells

    Fixed and stained with GAPDH antibody (red) and Hoechst (blue)


    Effective gene silencing in a wide variety of cells

    Effective gene silencing in a wide variety of cells

    Neuronal cells

    Stem cells

    Suspension cells

    Suspension cells

    75%

    Difficult-to-Transfect


    Intellectual property

    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


    Grants

    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


    Experienced management

    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)


    Board of directors

    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


    Upcoming milestones

    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 Lentigen’s new GMP manufacturing facilities

    • Complete additional financing


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