BioEntrepreneurship: Effective Communications - Selling your story

effective
communications

selling your story

Wayne Schnarr MaRS
Senior VP, Life Sciences BioEntrepreneurship
The Equicom Group June 12, 2007

Forward-looking statement

Certain information included in this document is forward-looking and is
subject to important risks and uncertainties. The results or events
predicted in these statements may differ materially from actual results or
events. For additional information with respect to certain of these and
other factors, see the reports filed by the various companies mentioned in
this presentation with the Securities Commissions of Ontario, Alberta and
British Columbia. These companies disclaim any intention or obligation
to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. This document does not
constitute an offer to sell or a solicitation of an offer to buy securities in
the United States. No securities have been registered under the United
States Securities Act of 1933, as amended or any state securities laws.

1

always remember

what are YOU selling

to whom are YOU selling

what is the sales process

never stop selling

2

you are selling

or you are on the receiving
end of sales pitches

every day

giving lectures

what are you selling

information, passion, ability to think

to whom are you selling

the students in the chairs


lectures plus

never stop selling

or they fall asleep or don’t attend

3

writing grant proposals

what are you selling

your intellectual capabilities

to whom are you selling

granting agencies


annual submissions

selling never stops

unfortunately not

selling your story to

the financial community &

the health care industry

4

the financial community

why do people invest in biotechnology companies?
to make money!

how do VCs make money from investing in
biotechnology companies?
through an IPO
through sale of the company

nobody invests in early stage biotechnology companies
for a 10% ROI
“you have to show them the 10-bagger”
- Michael Denny

biotech investors buy growth

based on the current and future sales of products and

services

approved products

growth of sales and earnings

no approved products
progress in preclinical and clinical development
independent product validation by partners

5

biotech investors balance risk and reward

reward
multi-billion dollar market
first-in-class
best-in-class
cure

risk
market risk
clinical risk
scientific risk

biotech investors balance risk and reward

reward
what are you selling?
• a potential reward that justifies the current valuation
• a potential reward that is large enough to allow an
IPO or M&A transaction

risk
what are you selling?
• you are NOT selling a risk-free opportunity
• that you clearly understand the scientific risk
• that you can mitigate the clinical risk
• that you understand the market risk

6

effective
presentations:
PowerPoint 101

PowerPoint is on your
computer –

which does not mean
that you are an expert at
creating presentations.

7

powerpoint 101
the presentation should:
• be there for the audience, not for the presenter
• be useful for multiple audiences
• be useful both on the screen and as a handout
• not contain every piece of information that is in
your business plan
• be about 30 slides for a general audience or
introductory meeting
• have a consistent format, colour scheme and font
• be talked to or about, not read
• use appropriate animal and human pictures
• some slides transmit information
– critical slides SELL

need expressed:
what is the hunger?
how big is the hunger?

no big hunger …
no one cares

8

need expressed
what is the hunger?
• what is the specific disease or medical condition
• is there a specific subgroup that is being targeted
• what are the currently approved drugs, if any, and
what are their deficiencies
• what is the unmet medical need

how big is the hunger?
• be realistic
• not every potential patient gets diagnosed or
treated
• use patient numbers from independent sources
• use sales of currently approved drugs where
applicable

Real-time Cardiac Imaging System
Opportunity and Unmet Need

• 400,000 CABG procedures annually
• 10 to 20% complications: expensive and life
threatening
Stent Graft • 7,000 TMR procedures
• Potentially 30,000 with SPY System

JAMA report on graft failure
• Up to 30% of vein grafts used in heart bypass
surgery fail at one year or less
100% <10% validation
12 peer-reviewed journals - 2000 patient data
validation
• Improves clinical outcome: 5 - 8% revisions
• Equivalent to X-Ray angiography in real-time

9

Real-time Vascular Imaging System
Opportunity and Unmet Need

• US Market
– 300,000 plastic and reconstructive surgeries
– 60,000 solid organ transplants
– 100,000+ tumor margin detection
• 30% of breast reconstructive surgeries may
experience complications
• Poor perfusion: #1 contributor to complications and
failed procedures
• No other practical method of assessing tissue or
organ perfusion

Coronary Heart Disease

Number

one 20%
killer! of all deaths

10

There are
54 million with
Americans
low HDL

World’s Largest Drug Market
Top 3 drug categories 2004 annual sales
$30.2B

}
$25.5B

5 blockbuster
drugs
$23.8B

Cytostatics Cholesterol &
Antiulcerants
(Cancer) triglyceride
(GI tract)
reducers

11

The Old Ophthalmic World Order

Allergan & Alcon

Nothing disruptive

No blockbusters

23
iCo Therapeutics | IPO presentation |

Now Lucentis is a Big Success

$940
million*

95
Revenue

% $380
million*

efficacy in
treating wAMD F2007
2006

Decimated incumbent therapies

24
*Source: Genentech documents and Rodman & Renshaw analyst reports

12

Lucentis is a big success, but it is not over

Only Requires
targets monthly
one growth injections to
factor (VEGF) retain efficacy

25

wAMD
is not

DME
(diabetic macular edema)

Our Focus is DME
26

13

wAMD vs DME

DME
wAMD
Acute event
Disease progression Gradual deterioration

Working years
Elderly
Average onset

VEGF bFGF IGF-I
Predominantly VEGF
Pathology
EPO HGF integrins

27

DME: Leaking Vasculature at Back of Eye

Proliferation of new blood vessels in PDR

More blood brought to area

Vessels are permeable

Blood leaks into retina area

Causes swelling & deformation of retina

28

14

DME: Disease State

Normal Retina Retina with DME

29

DME Treatment Options are Currently Limited

Laser Photocoagulation

Unsuccessful
Kenalog or
Vitrectomy
Recurrent
Successful

DR DME
5.3 MM pts 1.6 MM pts

Kenalog or Vitrectomy
• Even well-timed and adequate laser treatment only effectively
controls edema in 50% of patients with CSME and repeated laser
therapy (more than three or four treatments) is contraindicated due
to cumulative destruction of the visual field. Patients with diffuse
or cystic macular edema tend to have a poorer response to laser.
• Kenalog is gaining usage in these patients, and those with vitreous
traction are candidates for vitrectomy.

30
DH Insight Briefing – Ophthalmology | November, 2005 pg. 44

15

Multiple Sclerosis (MS) TSX:MS

Inappropriate immune attack
on the protective coating
(myelin) surrounding the nerves
of the brain and spinal cord

MBP8298 suppresses immune
attack at the most common
molecular target

MS Susceptibility Factors TSX:MS

Geography Genetics

DR2/ DR2/
DR4 DR4

DR2/
DR4

up to of all MS patients

75%
2.5 million patients
have HLA-DR2 or
HLA-DR4 genes
(our responder group)
32

16

TSX:MS

33

MS has Two Major Populations TSX:MS

Market
Relapsing
40-45%
Remitting MS
of MS patients
(RRMS)
MBP8298 Phase II trial

50% convert 90% convert
in 10 yrs in 25 yrs

Secondary Market
40-45%
Progressive MS
of MS patients
(SPMS)
MBP8298 Phase III trials

17

MS has Two Major Markets TSX:MS

Relapsing US$5.8B
~500,000 treated
current
patients annually of
Remitting MS
market
>1 million patients
(RRMS)

Secondary
Few patients treated of Blockbuster
Progressive MS
market
>1 million patients
(SPMS) potential

35

MS has Two Major Markets TSX:MS

US$5.8B
Approved Products
Relapsing Biogen Idec: Avonex®
current
Remitting MS Bayer Schering Pharma AG: Betaseron®
Teva: Copaxone®
market
(RRMS) Merck Serono S.A: Rebif®
Biogen Idec/Elan: Tysabri®

Secondary Approved Products
Blockbuster
Betaseron® (No proven delay in
Progressive MS progression, only approved with
market
relapses)
(SPMS) potential
Novantrone® (Cardiotoxicity
limits use to 2 – 3 years)

36

18

BREAKING THROUGH

AF Incidence
arrhythmias 1 in 4 adults will get AF (age 40+)

6 million
patients in the world
Annual incidence: 700,000 * Wang et al. Circulation: Journal of the
American Heart Association. August 2004.

BREAKING THROUGH

Current treatment drawbacks

drugs heat ablation

used in <3% of cases
treats symptoms only
only when drugs fail

high procedural risks:
30 – 60% effectiveness
PV stenosis
diminishes over time
Thrombosis
Esophageal perforation
serious side effects

19

BREAKING THROUGH

Healthcare ramifications and risks

leading cause of stroke >15%
1

leads to chronic heart failure
2 >20%

3 leading cause of hospitalizations 415,000 (U.S.)

4 cost to healthcare US$6.6 billion

no practical solution!
* Donald M Lloyd-Jones, Md, ScM, FACC.
Medscape Cardiology 8 (2). 2004.

AF Business Opportunity
Untreated Pool New Cases/Year

2.2 million 160,000
>$2 Billion
Annual Business Opportunity

2.1 million 145,000

4.3 million 305,000

20

need addressed:
solution to
the hunger -
the value
proposition

need addressed
what is your product?
• type of drug, device, diagnostic
• what is the mechanism of action

what is the value of your product?
• the value is in the data
• human data is more valuable than animal data
• if you have human data, eliminate or minimize the
animal data
• consider the audience when assessing the
complexity and presentation of the data being used

21

Neuradiab Survival Data

Clinically compelling difference

42%
91
Surgery + Radiation + Temozolomide + Neuradiab
weeks

64
2005 Surgery + Radiation + Temozolomide
weeks

1980
53
Surgery + Radiation
to
weeks
2004

0 15 30 45 60 75 90 105

Survival in weeks 43

iCo–007
for the treatment of

DME

22

iCo-007: Method of Action (MOA) - VEGF Plus

Growth factors

initiate
signal

VEGF
HGF
EPO

c-Raf

Retina
Signal through c-Raf

45

iCo-007: MOA - VEGF Plus

Growth factors

Modulate
signal

Retina
iCo-007 inhibits the production of c-raf, thereby
preventing the signaling of growth factors, which in
turn prevents the production of new and
permeable blood vessels

46

23

iCo-007: MOA - VEGF Plus

The production of c-Raf The inhibition of c-Raf
Signal pathway Signal pathway interrupted

iCo-007
mRNA ribosome
Inhibits c-Raf production which prevents cell
growth and permeability

47

Preclinical Evidence: Inhibition of c-Raf

c-Raf immunostaining
% Saline Control
of porcine eye
120

100

Control
80

60

40

20
107189
Treated
0
D7 D7 D14
Saline
34μg 180μg 180μg

48

24

Preclinical Evidence: Inhibition of new
blood vessel growth in mouse eye

Saline 14μg ISIS 15770

49

Preclinical Evidence:
3 month dosing achievable

Half life

44 days
Single
intravitreal (90 μg)
injection

50

25

MBP8298: Overview TSX:MS

Only novel agent for SPMS
Indications: SPMS & RRMS
in Phase III trials

Synthetic peptide for
Designer drug specific responder group
(up to 75% of MS patients)

Epitope-specific tolerance, not
Unique mechanism general immunosuppressant

Convenient administration IV ’push’ every six months

Delayed median time to progression
Long-term efficacy* for 5 years in responder group

Side effect: minor injection site
Very safe* irritation

* Based on previous clinical trial results

TSX:MS

MBP8298 slows the progression of MS

52

26

MBP8298: Drug discovery/
development for progressive MS TSX:MS

Analysis of CSF autoantibodies guided development
• RRMS: Autoantibodies detectable only during relapse events
• SPMS/PPMS: Autoantibodies continuously present – useful indicator of drug effect

Drug concept: Induction of antigen-specific tolerance
• Observed in early vaccine development
• High dose intravenous administration of soluble antigen

MBP8298 was designed to replicate the most common antibody target
• IV administration suppressed CSF autoantibody levels in most patients
• HLA-DR2-restricted T-cells target the same sequence

HLA-DR genes
• Direct the fine specificity of immune responses
• HLA-DR2 and -DR4 predispose to MS and make up the majority of patients
• Easy genetic test for HLA type

MBP8298 Replicates the Myelin Target TSX:MS

T-cells & B-cells from immune system attack 82-98 portion of
1
myelin in HLA-DR2 (and other) patients

MBP8298
17 amino acid peptide
Identical to the natural
sequence
Blood Brain Nerve Fiber
Blood Vessel
Barrier

27

MBP8298 Treatment Induces Tolerization TSX:MS

“Classic” Tolerization
Principle: 2
500mg dose
every six
“Reverse” of vaccination
months
Established in vaccine
research 50+ years ago

Shown to cure or prevent
EAE animal models of MS
MBP8298
synthetic peptide
identical to
dominant site of
immune attack
Blood Vessel Blood Brain Nerve Fiber
Barrier

Immune System is Tolerized TSX:MS

Tolerization Result:

Eliminates antibodies to
3
MBP8298 for six+ months

Requires dose every six
months

Clinical delay in disease
4
progression

Blood Vessel Blood Brain Nerve Fiber
Barrier

28

Published Efficacy Results TSX:MS

“Long-term follow-up treatment and assessment of patients in
this responder group showed a median time to progression
of 78 months for MBP8298 treated patients compared
with 18 months for placebo-treatment (Kaplan–Meier
analysis, P = 0.004…)”

Five Year Delay in Progression TSX:MS

100
Phase II Trial: Kaplan-Meier Analysis of
HLA-DR2 and/or DR4
80
% Not Progressed

patients at 84 Months
60

40
Endpoint: Time to 1st confirmed
Placebo progression on EDSS
20 18 months
MBP8298
78 months
0

MBP8298

Placebo

29

Insulin - Exploding Demand
Who is going to fill the gap?

16,000 kg
2012

2006

6,000 kg
13
Company estimates

Fermentation is One Alternative

$
1.2B
2006: 6,000 kg of insulin (est.)
Capital invested in existing
manufacturing plants

2.5X
2012: 16,000 kg of insulin

More capital required

4 to 6 years
Long lead times
14

30

Supplying World Insulin Demand

15,000 acres or Supply
3 commercial farms for the entire planet
in 2012

1 commercial farm
1 mile
15

Economics of Plant-Produced Insulin

Safflower Enabling technology to meet
insulin demand

insulin expression of
1.2 % total seed protein

~1.0 acre produces 1 kg of insulin

acres to supply 2012
15,000
Seed
Floret projected insulin demand

est. capital cost for 1,000 kg
$80M of plant-produced insulin

Capital cost
%
70 reduction
compared to
fermentation
16

31

Insulin - Chemical Equivalence
Electrospray Mass Spectrometry
Safflower-derived insulin:
Commercial • chemically equivalent to
pharmaceutical-
commercially-available human
grade insulin:
insulin
Molecular mass
5807 Da

• folds identically to commercially-
available human insulin

V8 protease fingerprinting

Safflower-
derived insulin:
Molecular mass
5807 Da

17

Insulin - Functional Equivalence (mouse)

Safflower Insulin Tolerance Test
120
% Initial Blood Glucose

100

80

60

40

error bars = +/- SEM
20
0 50 100 150
Minutes Post Injection
Saline Insulin (Humulin® R-Eli Lilly)

USP Insulin (pharma grade standard) Insulin (SemBioSys)
18

32

creating value:
the action plan

action plan
you have already sold them:
• the unmet medical need
• the value proposition

what is left to sell them?
• that you can increase the value of the product by
appropriately spending their money

33

Regulatory Path
Conclusions from the meeting:
• Insulin can follow the abbreviated
There is a 505(b)(2) rule
clear regulatory • First human trial will be a Phase II for
pharmacokinetics & pharmacodynamics
process for Reverses
• 50 subjects, 1 month study

safflower- • Second human trial will be a
plaque build-up
Phase III for longer-term safety
derived insulin • 500 subjects, 6 months, 2 arms
safflower insulin and Humulin®
• 500 subjects, 6 months, 1 arm
safflower insulin only
Met with the FDA for a pre IND
• No special regulations related to plant,
consultation in October 2006
QC/OA requirements cover all host
related issues
19

Trial Design

Dr. Scott Cousins
Dr. David Boyer
Durham NC
Beverly Hills CA

Dr. Philip Rosenfeld
Miami FL
- 15-30 patients
- Single administration - 6 month follow-up
- Ascending dosage - Open label
- 3 planned centres - Secondary efficacy endpoint

68

34

iCo-007: Achievements and Milestones

Phase 1
In-license
Results P2 P3 NDA

- IND Accepted
Safety
- Manufacturing scale-up

H2 H1 H2 H2
2005 2007 2007 2008

- License from ISIS
Initiate Phase 1
- World wide rights
- 15-30 patient trial
Out License
- All therapeutic indications
- Dose escalation study
- Minimal upfront payment
- Back-end loaded milestones
- Royalty rate doesn’t impede partnering

69

Ongoing Clinical Development TSX:MS

MAESTRO-01
Pivotal Phase III SPMS trial – Canada and Europe
• Powered for HLA DR2 & DR4 responder group
• Placebo-controlled, double blind, 2-year treatment period
• Recruitment is complete
• Includes approximately 550 patients
• Interim analysis: mid-2008

MAESTRO-02
Open-Label, Follow-on Portion to MAESTRO-01
• After patients have completed 2 years of treatment in
MAESTRO-01, patients may chose to receive MBP8298
• MAESTRO-02 will primarily evaluate long-term safety
• Support regulatory submissions

35

Ongoing Clinical Development TSX:MS

MAESTRO-03
Pivotal Phase III SPMS trial – United States
• Received FDA clearance to proceed with pivotal phase III
• Placebo-controlled, double blind, 2-year treatment period
• Powered for HLA DR2 & DR4 responder group
• Up to 510 patients

MINDSET-01
Phase II RRMS trial – Europe
• Fifteen month, double-blind, placebo-controlled
• Up to 215 patients from 30 sites
• Followed by 12-month active treatment open label extension
period

MAESTRO-01 Phase III SPMS Trial TSX:MS

Lead
Investigators
Dr. Mark Freedman
Ottawa General Hospital
Canada

Dr. Carolyn Young
The Walton Centre
Clinical Trials Centre
Liverpool, UK

Dr. Tomas Olsson
Karolinska
Universitetssjukhuset, Solna
Stockholm, Sweden

Canada & Europe Professor Hans-Peter
Hartung
• 48 trial sites
Neurologische Klinik
• 10 countries
Heinrich-Heine-Universität
Düsseldorf, Germany

72
Trial sites around the world

36

Target Clinical Timelines TSX:MS

MBP8298 Timelines
2007 2008 2009 2010 2011

Phase III
Data Analysis &
Trial
SPMS Trial submission
MAESTRO-01
Interim Analysis

Phase III SPMS
Regulatory Data Analysis &
Trial (US Trial) Enrollment Trial
Submission submission

MAESTRO-03 Interim Analysis

Phase II Open Label
Data Analysis &
Enrollment
RRMS Trial Extension
Trial Phase III Trial
submission

MINDSET-01
Trial Completion

Near-Term Milestones TSX:MS

Interim analysis in MAESTRO-01 trial (mid-2008)

Initiate enrolment in Phase III MAESTRO-03 trial in
United States (mid-2007)

Complete enrolment in Phase II MINDSET-01 RRMS
trial in Europe (mid-2007)

Completion of MINDSET-01 Phase II trial (mid-2008)

Potential Partnerships

37

Milestones

SPY System Q3 2005 Q4 2005 Q1 2006

U.S. sales partner X

Installed in 25 U.S. hospitals X

Initiate studies for expanded indications X

OPTTX System
Initiate North American multi-centre trial X

Initiate combo trial with multi-national partner X

File for Canadian and European approval X

Pipeline Strategy &
Corporate Overview
Real-time medical imaging in the
operating room

38

Real-time Image Guidance in the Operating Room
Pipeline Product Strategy
Trials Market
FDA
Development Launch
for FDA Clearance
Design / POP

Install base in US 70+ devices
Cardiac

Install base in US 150+ devices
TMR

Plastic / Launch
FDA cleared Q1 2007
Recon /
H2-07
Transplant
FDA Launch
Surgical clearance
Health Canada Approved
H1-08
Urology Q3-07

Human POP
Prostate
Launch
2008
Human POP
Other Urological
H2-07
Procedures

Launch
Human POP
MINI
MIS
H1-08
H2-07


&
Marketed products opportunity
$900 million

$600MM+
$250MM* Recurring
$50MM*
860,000 / year
400,000 / year 60,000 / year revenue model
$700
Average kit price

$200
Cost of goods

*Selling Price Country-specific

39


& MINI
Pipeline product opportunity
$1 Billion

$700MM
$250MM* Recurring
$50MM*
1,000,000 / year
400,000 / year 60,000 / year revenue model
$700
Average kit price

$200
Cost of goods

*Selling Price Country-specific

Multi-Center Pivotal Trial Design

Structure: Newly Diagnosed GBM Endpoints

Randomized Primary
1 arm is standard of care Overall Survival
1 arm adds Neuradiab as adjunct Final analysis at 456 events
therapy

Secondary
1 and 2 year survival
Multicenter Progression-free survival
310 patients per arm
30-40 sites Exploratory Analysis
Larger than Temodar study
Potential to see incremental
benefit in non-Temodar
responders
11
80

40

Trial Design Recent Events

FDA consultation CRO selection

FDA approved Bradmer’s CRO selected by Bradmer
plan for Phase III trial for Phase III trial
Prologue Research International
November 2006
End of Phase II meeting Oncology specialist; former
oncology clinical op’s team from
Q2 2007
Pharmacia-Adria
Final protocol and manufacturing
data to be submitted Big pharma and biotech clients
Experience with
radiopharmaceutical trials

111
8

cGMP Manufacturing – Transition to Commercial

Laureate Pharma MDS Nordion

Antibody Producer Radiolabeling Partner

Status Report:
Antibody scale-up complete
Sufficient supply to complete Phase III
cGMP antibody product completed in January
> 2 dozen successful equivalence tests
Final formulation, optimization of radiolabel process ongoing at Nordion
Clinical trial material to be released mid year

112
82
8

41

Neuradiab Pivotal Trial Timeline

Full Data
Analysis
Enrollment
Complete
Trial Launch
Mid 2007
Trial Preparation
Mfg / FDA / Site
Prep / Svc Providers
License from Duke
Q4 2005

2006 2007 2008 2009 2010 2011

“Open Label” Trial NDA
submission

83

can you do it all in a few
slides?

yes!

42

PAC-113

Uncontrolled Infectious Disease

Healthy State Immune Compromised
Candida albicans Oral Candidiasis
90% of AIDS patients
(and up to 43% of HIV patients)
present in up to

75% 30% of asthma patients treated with
corticosteroids
of the population
Patients being treated
for cancer and diabetes

Impaired immune system
Immune system permits attack by resident
controls growth of resident fungus and bacteria
fungus and bacteria
High probability of recurrence

43

Current Treatments Deficient

Nystatin Azoles Amphotericin B
Topical Systemic/Topical Systemic
52% efficacy Potential for resistance Severe side effects

Current treatments are ineffective, cause drug resistance,
cause severe side effects

A novel, safe and effective treatment has the potential to generate
US$300 – US$400 million per year worldwide.

Fighting Infectious Disease: PAC-113

Based on natural antimicrobial peptide occurring in saliva
PAC-113, delivered as mouthwash, binds to fungus surface and kills quickly
Highly active against Candida, greater than 95% efficacy in vitro

44

Safety Established Clinically

Four safety and efficacy trials completed
Indication: gingivitis (gum disease)
300+ patients
Conducted in the U.S. by Periodontix Inc.

Well tolerated
No drug related adverse events
Dose related improvement in clinical endpoints

PAC-113 Clinical Strategy

PAC-113 Nystatin
Head to head comparison
Randomized, examiner-blinded, parallel design
44 HIV patients per arm

14-day treatment phase 14-day follow-up period day 28 follow-up visit

Clinical objectives:
Safety and tolerability
Efficacy in eliminating or reducing clinical signs and symptoms of infection
Microbiological response

Initiated Results from Initiate dosing
Phase I/II trial Phase I/II trial in Phase II trial
Q1-06 Q1-07 Q3-07

45

Significant Market Potential

Treatment of Treatment of
oral candidiasis topical fungal infections

US $300-$400M US $1.6B

90% of all AIDS patients PAC-113 has demonstrated activity against:
30% of asthmatics on steroids – C. albicans
patients on chemotherapy / – C. glabrata
radiation – C. parapsilosis
– C. tropicalis

PAC-G31P

46

Uncontrolled Immune Response

Healthy State Diseased State

1. Pathogens induce 3. Excess neutrophils
an inflammatory can create
response by the serious medical
immune system complications

ARDS
2. One component of
Asthma
the inflammatory
COPD
response is
neutrophil
Pneumonia
infiltration

Regulating Immune Responses: PAC-G31P

cytokine

CXCR1

Cytokines bind to PAC-G31P closely
CXCR1 and CXCR2 resembles cytokines
receptors, attracting and blocks CXCR 1/2
and activating
neutrophils CXCR2

neutrophil

47

PAC-G31P Effective in Animal Models
30
Neutrophil count

High dose PAC-G31P
Endotoxin control
15

Low dose PAC-G31P
Normal animal

0

October 2005, The Journal of Leukocyte Biology

PAC-G31P Clinical Strategy

Manufacturing Toxicity Study Asian Clinical Study North American Ph. I
Ongoing H1-07 H1-07 H2-07

Currently manufacturing clinical materials
Proceed with preclinical toxicology work for systemic administration
Proof-of-concept clinical study in Asia in 2007 in collaboration
with a third party
Start North American Phase I single dose clinical trial in healthy
volunteers by the end of 2007

48

Markets

Asthma
ARDS COPD
150,000 20.5 million 10.7 million
people affected Americans were American adults
annually estimated to have were believed to
in the U.S. Asthma (2004) have COPD (2003)

ARDS:
– Mortality is 30% to 40%
– No approved drugs for prevention or treatment

Asthma:
– 1.8 million emergency room visits in 2004
– Total cost to the U.S. in 2004 was $16.1 billion

COPD:
4th leading cause of death in the U.S.
–
– The cost to the U.S. in 2004 was in excess of $37 billion

are you
finished selling?

never!

49

don’t stop selling

What is left to sell?
management
board and other advisors
intellectual property
manufacturing
quality of current shareholders
financial situation
exit opportunities
investment highlights
etc.

Product Pipeline
Class Product Indication Launch
Pharmaceutical

Diabetes
Insulin 2010

Apo AI Atherosclerosis 2014

DermaSphere® Personal care 2005
Non-pharmaceutical

StratoDerm™ OTC / Topical Rx 2008

ImmunoSphere™ Animal health 2008

Nutritional supplements 2008
GLA Rich Oil

Nutritional supplements
DHA Rich Oil 2010
35

50

Corporate Overview

Established: 1994: Spin out –
University of Calgary
Stock Market: TSX: SBS.TO

Market cap: $67MM

Cash: $28.8MM (31/03/07)
Burn rate: - 2006: $1.0 MM per month
- Cash to early 2009
Employees: 65 (19 Ph.D.s)

36

Board of Directors

Richard Smith (Chairman) Former President & CEO
Dow AgroSciences Canada, Inc.

Andrew Baum Director, President & CEO
SemBioSys Genetics Inc.

Alexander R. Giaquinto, Ph.D. Former, Sr. VP, Global Compliance
Schering-Plough

Douglass Given M.D., Ph.D. Partner, Bay City Capital

Nancy Harrison Former Senior VP
Ventures West Management Inc.

David Howard Chairperson
Angiotech Pharmaceuticals, Inc.

37

51

Patents

Protecting the platform
11 U.S. patents and applications

139
Production of recombinant proteins in plants using
the oilbody-oleosin technology platform
patents issued
(19 U.S.)
Protecting the tools
139
Tools and techniques to make our products
patents pending
Protecting the products (16 U.S.)
As of January 12, 2007
Composition of matter, manufacturing method, and
method of use claims directed to formulations
comprising oilbodies

38

Upcoming Milestones

Insulin
Q4 2007 Submit insulin IND to FDA
Q1 - Q2 2008 Initiate Phase II trials with completion by Q2, 2008
Q2 - Q4 2008 Partnership Opportunities

Apo A1
Q3 2007 Animal Data in Model System – Arabidopsis
Q3 2007 Achieve commercial levels of Apo AI expression in safflower
Q4 2007 - Q2 2008 Partnership Opportunities

Other

Initiation of new pharmaceutical product development program
Q3 2007
Complete Dermasphere Facility and begin full scale manufacturing
Q3 2007
and sales
Execute commercialization plan for ImmunoSphere™product and
Q2 2007 - Q1 2008 launch in Q1 2008

39

52

Corporate Data

Founded 2005

Raised to Date $7.5 million

Cash on Hand $2.7 million

Burn-rate $600,000 month

Head Office Vancouver, BC, Canada

105

Management and Directors

Strategic Advisory Board
Management Non-Executive Directors
Richard Glickman
Andrew Rae, MBA Sidney Himmel, CA
Co-founder, CEO and Chairman,
Founder & CEO Chairman
Aspreva Pharmaceuticals
President and Chief Executive
John Clement, PhD Officer, Trigon Uranium Corp. George Lasezkay, JD
Principal, Turning Point Consultants, LLC
Founder & Chief Technical &
William Jarosz, JD
Development Officer Julia Levy, PhD
Cartesian Capital Group, LLC Co-founder of QLT
Santa Jeremy Ono, PhD
Alan C. Bird, MD
Richard Barker, PhD
Chief Scientific Officer
Emeritus Professor, UCL
Director General of the
Association of the British David Boyer, MD
Peter Hnik, MD, MHSc.
Pharmaceutical Industry Retina-Vitreous Associates Medical Group
Chief Medical Officer
Philip Rosenfeld, MD, PhD
John Meekison, BA, CIM, P. Log. Professor, Bascom Palmer Eye Institute,
Founder & Chief Financial Officer University of Miami, School of Medicine
Jason Slakter, MD
Clinical Professor, NYU School of
Medicine

Extensive public company and life science experience | Solid operational and product
development expertise | Ophthalmic specific expertise

106

53

Hot Therapeutic Arena

Novartis
Pfizer Allergan
Sirna Genentech
Eyetech
(wAMD + other ophthalmic (wAMD)
(wAMD)
diseases)

Novartis
Bayer Alcon
QLT
Regeneron Amgen
(wAMD)
(wAMD) (Ophthalmic Therapies)

Pfizer OSI Merck
Angiosyn Eyetech Sirna
(wAMD) (wAMD) (wAMD)

107

Investment Highlights

iCo-007 has large >$1 billion potential
market/blockbuster potential Phase 1 commencing now

iCo 008 targets Initial market - $100 million potential
multiple indications Phase 2 commencing now

Management team / advisory
Very attractive valuation
board with extensive ocular
experience

108

54

An example

Investor Presentation
June 2007

55

Forward-looking statement

Certain information included in this document is forward-looking and is
subject to important risks and uncertainties. The results or events
predicted in these statements may differ materially from actual results or
events. For additional information with respect to certain of these and
other factors, see the reports filed by ARIUS Research Inc. with the
Securities Commissions of Ontario, Alberta and British Columbia. ARIUS
Research Inc. disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. This document does not constitute an offer to
sell or a solicitation of an offer to buy securities in the United States. No
securities have been registered under the United States Securities Act of
1933, as amended or any state securities laws.

Breakthrough antibody drugs

“The mission of ARIUS is to discover and
develop the next wave of antibody drugs to
address the needs of patients and
physicians for safe, effective treatments.”

56

Hitting a target doesn’t guarantee success

1000’s of high affinity
Antibodies have been identified

In the last decade,
only ~20 have
been approved and
successful

There is a target within the target

The desired effect (cell death / cell
signaling) will only be triggered by
specific areas within the targeted antigen

57

ARIUS focuses on FunctionFIRST™
“Does the antibody kill cancer cells
while leaving normal cells alone?”

If YES, then,
we have successfully
hit the target within the target

Proprietary antibody discovery and
selection platform

ARIUS Discovery Paradigm

Patent
Select ARIUS
Identify
Immunize antibodies antibody
target and
with for
Generate and all
eliminate
primary function
Antibodies epitopes
those with
human (In vivo on target
prior
tumor activity) with
patents
positive
efficacy

58

FunctionFIRST™ yields results

A pipeline of

400
Three
Five antibodies

partnerships lead candidates
Genentech Oxford bioMedica

Takeda PDL BioPharma

Medarex

$400 Million
in potential milestone payments

Our Partners

59

Genentech exclusive antibody license

Prevents tumor growth and enhances
survival in breast cancer models
Top oncology antibody company 1500

with blockbuster successes:

Tumor Volume (mm3)
1250

1000
• Avastin© Treatment period
750

• Rituxan© 500

• Herceptin© 250

0
0 10 20 30 40 50 60 70 80

120
Isotype control
AR7BD-33-11A
100

Partnership signed March 2006

Percent Survival (%)
80

• Upfront licensing fee 60 Treatment period

• Milestone payments based 40

on clinical milestones 20

• Royalties 0
0 50 100 150 200
Days Post-Implantation
Antibody Dosing: 15 mg/kg i.p. 3x /week x 10 doses

Other leaders partnered with ARIUS

Takeda PDL BioPharma
• Japan’s largest pharma • Leader in antibody humanization
• Multi-product collaboration • Partnership to discover and
develop antibodies
• $1M in cash upfront/$1M equity
• Option for in-license antibodies
• Fund research activities
for life of deal

Medarex Oxford BioMedica
• Joint research program using • Agreement to jointly develop products
Medarex’s UltiMab Human Antibody for cancer therapy
Development System • Oxford characterized the antibodies
• The combination of technologies and identify cognate antigens
eliminates the humanization step in • Liver cancer target identified - 37LRP –(AACR
the FunctionFIRST™ platform 2006) and being developed

60

Our Products

CD44 Cancer Stem Cell Program
Antibody AR001

CD44 cancer stem cell program

Produces Breast Cancer Regression
Buffer Control
800

20mg/kg
700
10mg/kg
Treatment Period
600
Tumor Volume (mm3)

• Aberrant expression of CD44
2mg/kg
0.2mg/kg
500

occurs in a variety of tumors 400

300

• CD44 implicated as a
200

100

functional cancer stem cell 0
0 10 20 30 40 50

marker in leukemia, breast and
Increased Survival in Breast Cancer
prostate cancer
120
Treatment period

• Arius lead antibody targets the
post-treatment period

100

CD44 antigen 80

60

• ARH460-16-2 efficacy shown in 40

breast and prostate tumors 20
Buffer Control
Isotype Control
0 ARH460-16-2

0 20 40 60 80 100 120 140


61

CD44 – cancer stem cell marker

Cancer stem cells Targeting cancer
are the factory of stem cells may be
the tumour more effective

Chemotherapy Cancer building
shrinks tumour ability is reduced

Survival is
Tumour returns
extended

CD44 cancer stem cell program

AR001 demonstrates
Significant inhibition of
tumor growth and
metastases in a dose
response, human
liver cancer model

62

Trop-2 Signal Transduction Program
Antibody AR002

Trop-2 signal transduction program

Inhibits tumor growth and increases
survival in prostate cancer models
• Trop-2 identified as a major Buffer
AR002

determinant of tumor growth 1400
Treatment Period

and metastasis
1200
Tumor Volume (mm )
3

1000

800

• Over-expression of Trop-2 600

increases growth rates in
400

200

several types of cancer 0
0 10 20 30


• ARIUS Trop-2 antibodies are Buffer Control
120
AR002.

the first to demonstrate
100

80

efficacy 60

40

20 Treatment
Period
0

0 20 40 60 80 100
Days Post Implantation

63

Novel target in key cancer pathway
Tarceva, Iressa
Tarceva, Iressa
Tarceva,
Lapatinib,
Lapatinib,
Lapatinib, Gleevac
Erbitux, Herceptin, Gleevac
Erbitux, Herceptin,
Vectibix
Vectibix
TROP-2
TROP-
EGFR PDGFR
VEGFR AR47A6.4.2
AR47A6.4.2
Shc
SHP-2
Avastin
Avastin
Grb2

Gleevac
Gleevac SOS

RAS

Antibodies
RAF
Small molecule inhibitors

MEK

MAPK

Cell Proliferation

CD59 Immune Modulator Program
Antibody AR003

64

CD59 immune modulator program
Shrinks tumors in breast cancer
MDA-MB-468 in female athymic nude mice

• CD59 widely expressed in
No Treatment
400 Vehicle

Tumor Volume (mm3)
Treatment Period AR003 (20mg/kg)

malignant tumors, allowing
350
Taxotere (30mg/kg)
300

cancer cells to evade immune
250

200

system 150

100

50

• AR36A36.11.1 could help 0
30 35 40 45 50 55 60 65 70 75 80

activate immune system in Days Post Implantation

Increases survival in lung cancer
addition to targeting cells
models
directly
• AR36A36.11.1 has been 120 Treatment Period Buffer Control

demonstrated effective in a
AR003
100

Survival (%)
80
number of tumor types 60

40

20

0
0 20 40 60 80 100

CD59 immune modulator program

Epitope location for Non-function-
blocking antibodies

Epitope location for function-
blocking antibodies

Epitope location for ARIUS Antibodies

65

Arius antibody pipeline

Robust and growing intellectual property estate

16 issued and allowed patents
- Composition of matter of antibodies
- Methods of treatment
- Antibody discovery technology platform

61 published patent applications

149 patents pending

66

Opportunities

9 licensing deals in 90 days!

AstraZeneca and
Regeneron
Genentech and Genentech and
Pharmaceuticals
Seattle Genetics BioInvent
US$120M
US$860M US$190M
plus royalties
plus royalties plus royalties

PDL
GSK and Pfizer and Wyeth and Medarex Cambridge
BioPharma
Antitope Elusys Raven and Antibody and
and Trellis
Limited Therapeutics Biotechnologies Compugen iCoTherapeutics
Bioscience

67

Multiple acquisitions in last 12 months

August 2006
May 2006 May 2006 AstraZeneca
Merck Merck acquires
acquires acquires Cambridge
GlycoFi Abmaxis Antibody
US$400M US$80M US$1.3B

November 2006 December 2006 March 2007
Genentech GSK Eisai
acquires acquires acquires
Tanox Domantis Morphotek
US$919M US$454M US$350M

ARIUS Milestones 2007

• Sign additional strategic collaboration/partnering
agreements
• Advance our programs:
– Complete pre-clinical toxicity studies for stem cell program
– Pre-IND meeting with the FDA
– Develop expression cell lines for other 2 lead programs and
transfer to cGMP manufacturer
– Advance IND enabling studies for 2 additional programs
• Expand intellectual property and library of antibody
drug candidates

68

About ARIUS

Headquarters: Toronto, Canada

Symbol: TSX:ARI

Employees: 40 current (18 last year)

Cash: $19 million

Burn-rate: $2.3 million (Q1, 2007)

Management and Board

Management Board of Directors
David S. Young William T. Bodenhamer
Chairman, President Director
and Chief Executive Officer
Carl L. Gordon
Helen Findlay Director
Executive Vice President
Joe Zakrewzski
and Chief Business Officer
Director
Warren Whitehead
Diane Kalina
Chief Financial Officer
Director
Susan Hahn
Dan Andersen
Director of Development
Board Observer
Daniel Pereira
Chau Q. Khuong
Vice President of Research
Board Observer
Daniel Rubenstein
Chief Medical Officer
Robert Gundel
Chief Scientific Officer

69

Investor Presentation
June 2007

closing thoughts

70

if you had only one slide

need expressed: hunger

market opportunity: greed

need addressed: value proposition

creating value: the action plan

entrepreneurs

life sciences

71

BioEntrepreneurship: Effective Communications - Selling your story

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