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Commercialization of Ossabaw Swine for
Biomedical Research
Yingkai Cheng Jessie LuJeff Fill Robbie SinghZiqing Liu Tom West February 23,
2011
Objective & Short-term Goal
•Project Objective: Demonstrate that Ossabaw Swine research is a viable model being based in the University and as a commercialized venture
•Short-term Goal: Demonstrate viability of the Ossabaw Swine Resource Center by:• Demonstrating the advantage of using
Ossabaws in research• Proposing implementation of a Tiered
Fee Schedule
Improving Revenues in Short-term
• Currently Revenues< Costs• Price increases on contract studies & swine sales• Internal Studies (Indiana’s universities): 11% price increase• External Studies (all others): 17.5% price increase
Additional Services
Long-term Goals
•Long-term Goal: Prepare a value proposition to commercialize / license sale of Ossabaw swines to a prospective vendor
•The path to commercialization will:• Maintain solvency of the Ossabaw Swine Resource • Optimize available funding options• Respect required University procedures• Suggest marketing & promotional avenues
•Establish milestones for funding and strategic initiatives
Market Segmentation
50%
39%
9%
2%
Source: PubMed keyword search: breed + miniature swine
Why use Ossabaw Swines?
* Metabolic syndrome model
* Exercise physiology
* Percutanous catheterization, stents
* Xenotransplantation
* Cutaneous wound healing
* Polycystic ovary syndrome
* Neonatology
*Lithotripsy treatment of kidney stones
* Endothelial progenitor cell biology
* Alzheimer’s disease
* Cardiovascular disease model
* Kidney function and disease
* Dietary probiotics
* Electrical stimulation of gastrointestinal tract
* Bladder function and disease
* Pancreatic beta cell function and isolation
* Non-alcoholic steatohepatitis
* Adrenal hormone regulation
* Diffuse idiopathic skeletal hyperostosis
* Vocal cord physiology
Uses of Ossabaw Swine for Translational Research
Path to Commercialization
Negotiation with Exemplar
Negotiation with Exemplar Revenues Revenues
2011-14 2015 2016-17
Address CTSI Member Concerns
IU / Purdue IRBs
IU / Purdue IRBs
ImplementationImplementation
2014
Joint OperationsJoint Operations
Ossabaw
Swine Resourc
e
Commercialization Plan
Inflection Points
• R&D Partnership with Exemplar Genetics
• Royalties and milestone payments
• Transgenic & gene knock-out capabilities
• Continued research at Ossabaw Resource
• Upfront licensing fee• Milestone payments• 1% royalty on sales• Profits split:• 55%: Ossabaw Resource• 45%: Exemplar Genetics
Commercialization Plan
Costs & Considerations
Ossabaw Swine Resource:
•Pays 50% to Purdue
•Milestones: $2.25 M
•Royalties: $8.1 M
•55% Revenue: $23.3M
• Total cost: $2.3 M
•NPV: $1.3 M (best)
•NPV: $0.385 M (worst)
•ROI: 28.7%
Ossabaw Swine Resource:
• Revenue Growth
•Increase Market Visibility• Conferences•Clients’ publications•Ossabaw website•LARC at IUSM
Exemplar Genetics Costs
•Milestone payments• Signing: $1 million (M)• Year 6: $0.5 M• Year 12:$0.75 M
• Royalties Paid: 1% • Total cost: $1.94 M •NPV: $655,933 (best)•NPV: $55,000 (worst)• ROI: 21.2%
2011-14 2015-30
NPV Summary for Exemplar
Assumptions:•Price growth rate is in accordance with hypothetical US inflation rate, plus annual price growth rate•Between current & new clients, achieve 10% market share •Annual price growth keeps pace with inflation plus price growth rate (7%); in 2020 when transgenics / knockout models developed, mark-up is 25%•Discount rate= 30%
NPV Summary for Ossabaw Swine Resource
Recommendations
• 2011-14: Increase Revenues by expanding client base• Market Ossabaws to Universities & Life Science companies in
Indiana
• Increase National visibility through conferences, journals, Website: http://physiology.medicine.iu.edu/people-in-physiology/michael-sturek-ph-d/#ossabaw-miniature-swine
• Adopt the proposed tiered pricing system for internal & external clients
Recommendations cont’d.
• 2015: Form R&D Partnership with Exemplar Genetics (Iowa)
• Exemplar Genetics provides desired expertise in transgenic & knock-out models
• An R&D partnership allows Ossabaw Swine Resource to continue their research work
Thank You!
Questions?