Panel

Gary C. Cupit, Pharm D, CEO and Director

Somnus Therapeutics, Inc

Jones W. Bryan, Ph.D. ,Vice President Business Development and Licensing

Supernus Pharmaceuticals

Daisy Rivera- Muzzio R. Ph., M.S, MBA, Business Development Consultant

PHARMA & BIOTECH LICENSING & PARTNERING: Filling the Pipeline & Growing Market Share Through Strategic

Deal-Making.

1

IntroductionLicensing Activity Trends

Licensor vs. Licensee PerspectivesValue Assessment Proposition

Proposed Solutions

2

BioPharm Insight-licensing activity report Q32010 3

*Pharmaprojects July 2009 4

*Pharmaprojects July 2009

5

SOURCE: Elsevier’s Strategic Transactions

LLL

7

Components to assess the value of the opportunity

Licensor(Specialty)

Licensee(Small or Large)

Early stage development Perform only critical testing for advancement of agent (if discovery based)

Novel target or highly differentiated is important and magnified if large pharma

Late Stage Development Totally de-risk the asset if known entity or small market

The larger the company the more premium placed on de-risked asset and differentiation

Commercial analysis Detailed product profile and micro-analysis

Input from prescribers, providers and payors with competitive agents – CGS estimates

Probability of Technical and Regulatory Success Very High!

Preclinical – 5% , Phase I – 10%, Phase II – 20%, Phase III – 50%, NDA File – 80% or wait until ready to commercialize

IP assessment Freedom to operate and individual product protection in US/EU

Multi country position if large pharma or regional as company size gets smaller (PLCM strategy)

Regulatory Strategy Aggressive path with targeted line to approval

Clear path with competitive positioning and data

Roles/responsibilities at commercialization stage

Minimal to full rights to co-promote

Pay royalties and milestones to licensor or becomes M&A opportunity

8

Components to assess the value of the opportunity

Licensor(Mid to Large BioPharma)

Licensee(Small)

Early stage development Perform broad based testing across multiple targets and define MOA

Key development signals for efficacy

Late Stage DevelopmentFirst in class or differentiation within class (Efficacy, safety or administration route/schedule)

Target indication with single dosage form

Commercial analysis Multiple points of original research at key time points of development/ Packaging/ Dosage design, Reimbursement Status

Minimal original research

Probability of Technical and Regulatory Success

Preclinical – 5% , Phase I – 10%, Phase II – 20%, Phase III – 50%, NDA File – 80% Bullish outlook

IP/Trademark assessment Coverage of product, field, dosage forms, future indications and broad geography

Freedom to operate and individual product protection in US/EU

Regulatory Strategy Broad efficacy/safety studies, biomarkers subpopulations, genomic footprint, REMS

Aggressive path with targeted line to approval

Roles/responsibilities at commercialization stage

Pay royalties and milestones to licensee or M&A opportunity

Maintain either specialist calls or future co-promote

9

10

…fibs uttered by prospective pharma partners1

10. “We never participate in a bidding war”9. “We have all the authority we need to do the deal on these terms”8. “We believe in ‘equal’ say in decision making”7. “Our ‘culture’ is open and flexible, just like yours”6. “We are in it for the long haul” – Also known as: “We would never use the threat of termination to improve our deal”5. “We can close a deal in 30 days”4. “We cannot possibly close a deal in 30 days”3. “This is our best and final offer”2. “Our primary motive is to help suffering patients”1. “We will treat your molecule like it was discovered by our own scientists”

1 Proceedings of the 22nd JP Morgan Healthcare Conference, L. Schleifer, CEO, Regeneron 11

…fibs uttered by prospective biotech licensors1

10. “We have so many offers I can’t keep track of them”9. “While I support the deal, my Board will never approve those terms”8. “We have a fabulous patent position with complete freedom to operate”7. “If you don’t sign the deal today, the deal is off”6. “You’ll make a fortune on the equity”5.“We expect to launch the product in 18 months”4.“This is our crown jewel”3.“Our scientists think your ‘culture’ is just like ours”2.“Our sales force will be as good as yours”1.“We’ve done extensive market research that shows the product will be a multi-billion dollar blockbuster”

1 Proceedings of the 22nd JP Morgan Healthcare Conference, L. Schleifer, CEO, Regeneron 12