September 4, 2013

1. Ivars Kalvins , Coordinator Strengthening the research and innovative capacities of the Latvian Institute of Organic Synthesis, the leading Baltic regional centre for drug discovery: IOS today and strategic plans of development September 4, 2013

2. IOS – the leading innovator in Baltic States Esko Aho R&D spending is actually transforming money to knowledge and innovation is transforming knowledge to money, but not only money but well being and good human life as well

3. Latvian Institute of Organic Synthesis (IOS) • Latvian IOS was founded on the 2nd of January, 1957 to perform pro-innovative research in organic chemistry, molecular biology and bioorganic chemistry. • Currently, with 10 scientific laboratories and 12 research groups Latvian IOS is one of theleadingresearch centres of organic synthesis, medicinal chemistry and drug discovery in the Baltic region. Professor S.A.Hiller Both, independent and contract research projects are carried out in cooperation with Latvian and foreign universities and pharmaceutical companies.

4. Main Scientific Fields of Competence • Organic synthesis • Advanced technologies in organic synthesis • Medicinal chemistry and drug discovery • Molecular pharmacology • Biological screening • Analytical support • Clinical trials

5. The Drug Discovery Process : Lots of Time, Money & Risk 12 to 25 years $400 - $800 M Identify disease Find effective drug against disease protein (2-4 yrs) Isolate protein involved in disease (2-4yrs) Scale-up (2-3 yrs) Preclinical testing (1-3 yrs) Human clinical trials (2-5 yrs) File IND File NDA Formulation (1-3 yrs) FDA approval (2-3 yrs)

6. IOS Resources • 2424 m2 of well equipped laboratory space • 109 highly qualified (PhD) chemists • Specialists of molecular modeling • Analytical support for qualitative and quantitative analysis • Group of clinical trials • 31 biologists and molecular pharmacologists

7. IOS Scientific Resources (Equipment) • IOS possesses all necessary equipment to perform research in drug design and discovery • NMR spectrometers (200MHz, 400MHz and 600MHz) with various probes and accessories • Various spectroscopy equipment including EPR system, FTIR spectrometer and X-ray diffractometer • Equipment for Gas Chromatography (FID, ECD, TCD, MSD), High Performance Liquid Chromatography (UV, fluorescence detection, MS/MS) and High Performance Thin Layer Chromatography • Equipment for physical tests and pharmaceutical technical procedures of finished dosage forms. • Equipment for pharmacological and biological studies • Automated microwave synthesizer for high throughput synthesis

8. IOS Scientific Resources (Equipment) LC-MS-MS GC-MS GC-MS

9. GC and HPLC as a Routine

10. IOS scientific research • The institute publishes about 120 scientific papers annually, in average 3 PhD works are made every year. • 4 monographs, 20 brochures, 464 scientific papers and 406 proceedings were published by scientists of IOS during last 5 years. • IOS is participating in in a number of collaborative projects with universities in Sweden, France, Greece and other countries, as well as in Visby Network grants with Uppsala University, Sweden, 3 NATO projects, 6 COST projects etc.

11. IOS Scientific Journals • IOS is an editor of widely recognized journal ”Chemistry of Heterocyclic Compounds”, published both in Russian (by IOS) and English (by Springer).

12. IOS pro-inovative research • IOS discovered 17 original medicines and 86 original manufacturing processes of Active Pharmaceutical Ingredients (API). • 3 original medicins are under clinical trials worldwide now.

13. IOS Contract Research • International cooperation in drug design and discovery by IOS was started already before collapse of the USSR. Nowadays IOS has ongoing projects with 11 pharmaceutical companies worldwide. There are very many different cooperation models – starting from simple contract research projects and up to close partnership during the whole process of drug design and discovery. • The most important industry partners of IOS come from UK, Germany, Denmark, Sweden, Finland, USA, Japan and Latvia. • As a result, in collaboration with business partners, in the last 5 years 64 new patents have been filed.

14. Protected Inventions of IOS scientists US patents 39 US patent applications 43 EPO patents 29 EPO patent applications 43 WIPO patent applications 85 Euro-asian patents 19 Japanese patents and applications 38 Ukraine patents 11 Russia patents un author sertificates 45 Latvian patents 57 Patents and applications in total 406 Not published patents 34 Non-identical patents in total (01.02.2013) 440 Patent families consists of 1000 patents un patent applications

15. Protected Inventions of IOS scientists 99 96 85 80 71 51 46 27 2004 2005 2006 2007 2008 2009 2010 2011

16. Patent Protected Intellectual Property of IOS

17. Four levels of cooperation are typical for IOS contract research • Synthesis of known compounds and building blocks (low interest for IOS), • Development of methods for synthesis of leading compounds, • Structure optimization for leading compounds (hit to lead), • Discovery of structures with high binding potential (hits) with further search for leading compounds and clinical candidates (primary screening on binding assays also is possible).

18. Structure of IOS budget

19. State budget 7th Framework Contract research

20. Achievements of the IOS Contract Research • The latest and most important achievements of the contract research at IOS are as follows: • IOS participated in the development of the first anti-Alzheimer disease medication, registered both in the USA and EU. Both chemical development and clinical trials were performed by the experts of IOS. Estimated turnover of this medicine is 2.0 billion USD annually. • Together with a German company IOS has developed a new medication for tinitus, which is currently undergoing clinical Phase III trials in Japan. Scientists from IOS were involved in design of the active entity and synthetic development of the molecule. 8/20/2014

21. Achievements of the IOS Contract Research • In co-operation with partners in the UK and Denmark a new anti cancer drug Belinostat has been discovered (EP 2292593 A2, HDAC inhibitor, under clinical trials in the USA and the EU) • Belinostat is currently udergoing last Phase clinical trials for various cancer types in USA and Europe: Peripheral T-Cell Lymphoma (PTCL), for cancer of unknown primary (CUP). • Additionally, the National Cancer Institute (USA) is currently conducting several clinical trials of Belinostat in a variety of haematological and solid tumours. • US company Spectrum licensed the rights to Belinostat for North America and India, and an option for China, in exchange for an upfront cash payment of $30 million, potential milestone payments of up to $320 million, and one million shares of Spectrum common, as well as double-digit royalties on net sales of Belinostat ( it is estimated as a billion deal)

22. Achievements of the IOS Contract Research • In collaboration with a Swedish pharmaceutical company new clinical candidates for a new type anti-inflammatory medicine were discovered (EP 1 778 632 B1) (selective and new type of prostaglandin E synthase inhibitors) • In connection with the collaboration and licensing agreement, our customer received a payment and the company is also entitled to compensation for development work, as well as milestones when certain set targets are attained. The total payments may amount to EUR 250m, excluding royalties. 8/20/2014

23. Export value of IOS original medicines Mildronate and Ftorafur from Latvia exceeded 100 Mio EUR Mildronate is Latvian bestseller among high-tech products IOS pro-inovative research support competetiveness and growth of “Grindex”, “Olainfarm” and other Latvian pharmaceutical companies IOS improved meldonium, phenotropil, phenibut, and other new molecules – a waranty of Latvian pharmaceutical industry sustainability! IOS contribution to the development of Latvian pharmaceutical industry

24. Success story of IOS pro-innovative research in cardiology 2013. - subacute and chronic toxicity investigations done Grindex funding 2012. - final dosage form developed, acute toxicity tests done (2010- 2013), ERAF funding - Grindex and IOS co-funding 2012.- WO patent application for new clases of compounds 2010. - US patent application for first class of active compounds Grindex funding 2009.– new cardioprotective drug candidate discovered (substantially improoved mildronate analog) (2005-2009) State research program funding 2006. – screening system developed for testing meldonium–like cardioprotective compounds

25. Achievements of drug candidate research in IOS • Original anticancer compound with excelent efficacy against human pancreas tumour’s xenografts • Clopidogrel analog with improved efficacy • Amlodipine analogs with improved pharmacological properties • Cognitive functions enhancing molecule (50-times more active as piracetam)

26. 3 steps to success Basic knowledge and starting materials Product (commercially available) Small scale production Developing new product or process Scale up Transformationinto commercially available products R & D Knowledge 2. Technology transfer & deployment 3. Stimulating market demand 1. Technology development 3. Simulation market demand Addopted from http://ec.europa.eu/enterprise/sectors/ict/key_technologies/kets_high_level_group_en.htm

27. What is the nishe for pharmaceutical innovation in Baltic countries? Creation of patentable technologies for API of generic drugs in form of GMP class of drug master file Discovery of new drugs Development of new drugs: discovery of active ingredients and methods of its manufacturing, creation of galenic formulation and analytics, GLP- class preclinical and clinical testing, experimental GMP production of generics and original drugs Therefore specific infrastructure for drug discovery, development and experimental production is needed in Baltic’s!

28. Aktīvākie savienojumi TargetCompounds Optimizācija Drug candidate To clinical trials Clustering of Drug Discovery and Development activities in Latvia (BioPpharmAlliance) Search of targets all partners Biochemistry and screening BPhC, LU Structural biology and modeling IOS, BMC Organic and Medicinal Chemistry RTU, OSI Pilot production Pharmacology BFC, IOS, LU Pharmacodynamics and metabolism BPhC, OSI, LU GLP Toxicology BPhC

29. Research Commercialization: public finance leverages private Scientific Discovery Marketed product IPO Low High Lab Model B Round IP protection Technology Development Phase Business Building Phase A Round First Customers Probability of Success Probability of Success Prototype Create Business Mgt Team Business Models Market Assessment Manufacturing Model Commercialization Progression Low High

30. Bio Pharm Alliancepartners in Latvia • Institute of Organic Synthesis (IOS), • Scientific Institute of Food Safety, Animal Health and Environment (BIOR), • Study Centre of Biomedicine (BMC), • University of Latvia (LU), • Riga Technical University (RTU), • Daugavpils University (DU), • Pauls Stradins Clinical University Hospital, • Eastern Clinical University Hospital, • Mechanics and Technology College of Olaine • Chemical, pharmaceutical and biotechnological companies

31. Infrastructure of BioPharmAlliance • Pharmacology and molecular biology research centre including GLP-compliant test and animal facility and National Biobank (participation in EU-OPENSCREEN, EATRIS); • Scale-up and pilot production facilitiesof chemistry and biotechnology based products, vaccines, personalized medicine products and final dosage forms of both human and veterinary medicines (participation in EATRIS); • Centre of stuctural biology on the basis of existing competence in protein crystallography and NMR studies (participation in INSTRUCT)

32. INNOVABALT – STAIRWAY TO EXELENCE IN DRUG DISCOVERY! Let us do it together!

33. Thank you for attention!