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Starting a Biotech Company

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Starting a Biotech Company Powered By Docstoc
					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
• Case Study: Lentigen Business Presentation
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
• 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
Milestone driven value - technology
Financing of Biotech
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
• 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
• 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
   Long Lead Times to Therapeutic Markets

   Gene Therapy
   Cellular Therapies
   Stem Cell Therapy
   Vaccines (viral vector)                                      Therapeutics
   RNAi (viral vector shRNAi)


 Therapeutics                   Validation / Growth


Service / Research Products




                                                        Service / Research Products

                         Decreased Risk vs. Lack of Focus
                                                                                           Geoff Race CFO

  Models of productivity                                                                   Pangenetics
                                                                                           Index Forum 2007
                                                                                           Stresa, Italy



                  “Young Genius”                                     “Old Master”




        Femme à la resille (Woman in a hairnet),   Still Life with Carafe, Sugar Bowl, Bottle, Pomegranates,
             1938, by Pablo Picasso.                         and Watermelon, 1906, by Paul Cezanne


value


            Paintings most valuable = early work    Paintings most valuable = late-in-life work
Comparison of Productivity Models
“Young Genius”              “Old Master”
• Innovation                • Experimentation
    – Non-linear; concept       – Process driven
• Short term horizon        • Long term view
    – Rapid, immediate          – Quality mindset
• Low # of objectives       • Higher # of goals
    – Single focus              – Competing priorities
• Singularity of Purpose    • Complexity/ Integrated
    – Virtual; simplicity       – infrastructure
• High Risk                 • Low Risk
    – No track record           – Track record
Comparison of Business Models
Single product             Multiple product
 Biotech Company            Biotech Company
• Innovation               • Experimentation
• Short term horizon       • Long term view
• Low # of objectives      • Higher # of goals
• Singularity of Purpose   • Complexity/ Integrated
• High Risk                • Low Risk


• Concept Based Value      • Linear Value Growth
  Growth
Comparison of Business Models
Single Product Biotech               Multi Product Biotech
• Innovation                         • Experimentation
• Short term horizon                 • Long term view
• Low # of objectives                • Higher # of goals
• Singularity of Purpose             • Complexity/ Integrated
• Multiple Phases                    • Life’s Work
• High Risk                          • Low Risk


• Concept Based Value Growth         • Linear Value Growth
• ACQUIRED                           • IPO - ALLIANCES
               BOTH ARE VALID GROWTH STRATEGIES
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
      January 2008
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
• 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
• 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
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
                         ANIMAL                 PRE-      IND   PHASE I/II
                   R&D             SCALE UP
INDICATION               STUDIES              CLINICAL   PREP   CLINICAL


GLIOBLASTOMA

CANCER (GVHD)

INFLUENZA VACC.

ANEMIA

HEPATITIS C

LEUKEMIA (CLL)

COR. ARTERY DIS.

LYMPHOMA (EBV)

HEMOPHILIA

MELANOMA
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
• Protection of stem cells
  from TMZ toxicity
                                                             TEMEZOLOMIDE
    longer TMZ treatment
    better outcomes for patients

• LV-MGMT can protect stem                    KILL
                                                                        LV MGMT


  cells from effects of TMZ                  TUMOR



• Proof of concept shown in
                                            PROTECT
  dogs and monkeys                         STEM CELLS


• Clinical trial endpoints are                                    STEM CELLS
  short – 3 weeks
• CWRU (Dr S. Gerson)
• Broadly applicable
   – CML, AML, HIV etc              Bone Marrow Transplantation


• IP exclusively licensed
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
• Two technological advances       DLI + BMT    AZT

   – LV efficient gene delivery
   – TMPK human safety gene                            LV TMPK
                                    IF GVHD

• Proof of concept shown in        THEN + AZT


  primary human T cells
• Short clinical trial endpoints
                                   KILL ALLO
                                    T CELLS

  3 weeks to 3 months
                                                 T CELLS

• CRADA with NIH; 2 sites;
  Drs Gress, Fowler, others
• Broadly applicable to other                   STEM CELLS   DONOR


  diseases – cancer, HIV etc       RECIPIENT


• IP exclusively licensed
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
                                           Synthesized gene

 • Rapid manufacturing platform
                                            cloned into LV
                                                1 week


          • weeks not months MFG time
                                             LV manufacture
 • Virus Like Particles (VLP)                and QC testing
                                                 1 week

    – highly immunogenic

 • Exact strain match                       LV transduction
                                                  1 day

    – no genetic drift during production

 • Continuous production of VLP
    – advantage over batch production        Scale Up cells
                                               3 weeks


 • Safe
    – VLPs are genetically inactive        Vaccine Purification
                                                  1 day

 • IP protected
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     Vaccine with adjuvant   Prebleeds


    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
• 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
• Gold Standard                      3
• Efficient
                                    2.5
   – Bulk CHO Cells > 2.5 g/L
                                     2
   – No cell cloning
   – No selection                   1.5

   – No enhancement of cell          1
     growth conditions
   – Levels of 5 – 10+ g/L          0.5
     attainable with isolation of
                                     0
     cell clones                          Erythropoietin
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
SMARTvector RNAi: Effective gene silencing
        GAPDH knockdown 9 days post-transduction
     with SmartVector shRNAi Lentiviral vector particles
           SMARTvector Control         SMARTvector GAPDH RNAi




                             SHSY5Y neuronal cells

          Fixed and stained with GAPDH antibody (red) and Hoechst (blue)
                        Effective gene silencing in a wide variety of cells
                                                                                                                           Tropism: bDNA Assay

                        1.20




                                                                                                                                                                                 Suspension cells




                                                                                                                                                                                                                                           Suspension cells
                                                                                                                                                                                                             Neuronal cells
                                                                                                              Stem cells
                        1.00
Normalized % controls




                        0.80



                        0.60



                        0.40



                        0.20
                                                                                                                                                                                                                                                                                                  75%

                        0.00




                                                                                                                                                                                                         5
                               12.5
                                       25
                                             50
                                                  12.5
                                                         25
                                                              50
                                                                   12.5
                                                                           25
                                                                                 50
                                                                                      12.5
                                                                                             25
                                                                                                  50
                                                                                                       12.5
                                                                                                              25
                                                                                                                       50
                                                                                                                            12.5
                                                                                                                                   25
                                                                                                                                        50
                                                                                                                                             12.5
                                                                                                                                                    25
                                                                                                                                                         50
                                                                                                                                                              12.5
                                                                                                                                                                     50
                                                                                                                                                                          12.5
                                                                                                                                                                                       25
                                                                                                                                                                                                    50


                                                                                                                                                                                                                 10
                                                                                                                                                                                                                              20
                                                                                                                                                                                                                                   12.5
                                                                                                                                                                                                                                           25
                                                                                                                                                                                                                                                        50
                                                                                                                                                                                                                                                              12.5
                                                                                                                                                                                                                                                                     25
                                                                                                                                                                                                                                                                          50
                                                                                                                                                                                                                                                                               12.5
                                                                                                                                                                                                                                                                                       25
                                                                                                                                                                                                                                                                                             50
                                      GTM3          HEK293                HeLa          HeLaS3         hmscAdipB               LNCaP          MCF10A          MCF7               THP1                    SHSY5Y                           THP1                 HEK293                 HeLa

                                                                                                       MapK1                                                                                                                                         GAPDH




                                                                                                                                                    Difficult-to-Transfect
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
• 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
• 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
• 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
• 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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