Road Map for Reduced Risk Biotech Start-Ups

Dubai Bio Expo - 2015November 2, 2015

Louis Herlands, Executive Director Sidra VenturesSidra Medical and Research Center, Qatar

Sidra Medical and Research Center

Engaged in cutting edge research in tumor immunology, genomics, systems

biology, stem cells

Provides translational research infrastructure to foster advanced and

integrated research relevant to national research priority

Sidra Ventures is the commercialization &

innovation arm of Sidra Research

Helping catalyze creation of biotech industry

Clinical Genomics Core Facility: Sequencing Capacity

Ten HiSeq X Ten sequencer platform HiSeq 4000NextSeq 500MiSeqDxPacBio RSIISanger Sequencer Oxford Nanopore

Capacity (per month): 1000-1500 Human Whole Genomes1500 Exome or deep transcriptome seqHuman Reference Genome sequencing and assembly

OUTLINE: Road Map for Reduced Risk Biotech Start-ups

Rationale: why is this topic important?

Key questions

Examples of successful companies, and what we can learn from

them? What can we learn from failures?

Elements of a successful biotech companies

Proposed road map

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Biotech Start-up Basics

TECHNOLOGY LICENSING

RECRUIT TEAM

First POP Trialin Humans

EXIT

$$$

Simplified Model

I. Rationale

In the GCC, the biotech and pharmaceutical industry is poised to play an

important role in the diversification of the economy and start-ups or early

stage companies can play an important role.

Failure rate for biotech start-ups is high ( >90%)

What are strategies for reducing risk and increasing the likelihood of success?

II: Key Questions

What are certain successful biotech companies doing right?

How can we learn from them?

How is risk reduced by these successful companies?

Can we do the same?

As investors, fund managers, or CEOs how can we pick the

successful companies at the earliest stages?

Principia & Biorexis: Reduced Risk product candidates - Improved versions of biologics through fusion proteins

• Albumin fusion proteins increase plasma half life and allow sustained exposure therapeutic

• Second generation biologic• Examples:

• Albumin fusion proteins (Principia)• Transferrin fusion proteins

(Biorexis)

Albinterferon -2b: a genetic fusion protein for the treatment of chronic hepatitis CG Mani Subramanian, Michele Fiscella, Araba Lamousé-Smith, Stefan Zeuzem & John G McHutchisonNature Biotechnology 25, 1411 - 1419 (2007)

Principia Pharmaceuticals: What did they do right?

• Driven industry-savvy senior leadership team

• Strong scientific team with industry experience that are agile and focused on IP

• True platfrom technology: Reduced risk product candidates that meets large unmet medical needs

• Strong IP portfolio

• Judicious use of $ invested to reach significant value creation milestones: (i) generated high quality compelling non-clinical data package

• Operational excellence: high quality work & aggressively meet deadlines on time & budget

• Leadership compelling enough to convince investors and strategic partners

• VC investment syndicate dialed in exit (but, limited upside for co-founders.

Acquired by Human Genome Sciences ~12 months after formation for $120 million

Oraltech Pharmaceuticals: What did they do right?How did they blunder?

Oraltech’s lead product candidate was a Pan-Cox oral rinse

• STRONG MANAGEMENT, LUMINARY SAB MEMBEMBERS & DIRECTORS

• Strong Scientifically

• Treatment of Intraepithelial Neoplasia – not chemoprevention

• Reduced risk product candidates that meets large unmet medical needs that represent large markets

• Clinical stage product candidate

• Strong IP portfolio, new use for old drug

• Oral health & ‘chemoprevention’ not an attractive area for investors & pharm

• DID NOT RAISE ENOUGH MONEY FOR CONTINGENCIES

• Weak clin/reg strategy – difficult indication, heterogeneous patient population• INVALID NCI clinical trial

COULD HAVE BEEN A SUCCESSBUT: INABILITY TO RAISE CAPITAL TO REPEAT TRIAL

Reduced Risk product candidates II: Local Delivery

1. Nasal Delivery to deliver medicines to the brain

• Gets the medicine to where it is needed

• Minimizes systemic exposure

• Avoids fist pass metabolism

• Bypasses blood brain barrier

2. Oral rinses to deliver to mouth & gums• 20-50X higher concentration in gingival

crevicular fluid (GCF) than peak plasma• Minimizes systemic exposure• Gets the medicine to where it is needed

Platform Technology

Science 28 November 2014: Vol. 346 no. 6213 1258096

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Proposed framework towards a reduced risk biotech

INTELLECTUAL PROPERTY

2: PRODUCT CANDIDATES

3. FINANCING 1: LEADERSHIP TEAM

ROADMAP: 1. LEADERSHIP TEAM

“We bet on the jockey, not the

horse”

Driven obsessive leadership

Track record of success

Suboptimal to learn on the job

Diverse skill set required

2: PRODUCT CANDIDATES: Criteria

Strong Intellectual Property

Meets unmet patient need in large market

Platform Technology or Product Portfolio

Well trodden clin/reg path

Reduced Risk Strategies

Most product candidates fail for reasons of safety

New indications for old molecules

Improved versions of existing products

Local delivery

3: FINANCING STRATEGIES

Investments from strategic partners

Non-dilutive capital

Avoid VCs, if possible

Be realistic about valuations

Don’t worry about dilution

Investors who will participate in future financing rounds

Gain early access to public markets, if possible

Gap Fund

‘Proof of Principle’ studies required to demonstrate commercial potential are rarely conducted

by academic institutions, due to the lack of expertise and established funding mechanisms for

this purpose. This often results in a development gap between early-stage academic invention

and the validation required to attract the participation of the private sector.

Gap Funds are increasingly becoming implemented and there are numerous examples:

Rockefeller University Robertson Fund

Boston Children’s Hospital Technology Development Fund

Partner’s Innovation Fund

http://innovation.partners.org/investors_and_entrepreneurs/partners_innovation_fund

The vision of Sidra Technology Ventures is to help bridge this gap by providing funding to generate more data including non-clinical and ‘proof of principle’ studies that adequately demonstrate the invention’s promise and potential and support patent application filing.

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Summary Slide

PRODUCT CANDIDATES

• Driven, obsessive leadership

• Track record of success• “We bet the jockey, not

the horse”

• Strong IP Portfolio

• Preferably composition of matter patents

• Investment from strategic partners

• Avoid VCs if possible

• Non-dilutive capital

• Be realistic about valuations

• Don’t worry about dilution

• Investors who will participate in future rounds

• Gain early access to public markets, if possible

Maximizes likelihood of having a successful company

LEADERSHIP

• Meets unmet need in large markets

• Platform technology or Portfolio of product candidates

• Reduced risk strategies

• Well-trodden clin/reg path

INTELLECTUALPROPERTY FINANCING

Take Home Messages

• In-licensing value high technologies is a viable approach to jumpstarting start-ups

• What was presented today are ideas for consideration that will need to be modified or adjusted to specific conuntries in the MENA region to reflect available resources

If you have any questions Please contact me:

Louis Herlands, PhD Executive Director Sidra Technology Ventureslherlands@Sidra.org

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DNA Sequencing

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