Pharma interactions: 25Chagas KOL interactions: 25Veterinary interactions: 20Diagnostic interactions: 5

TOTAL interactions: 75 December 10, 2013

Jair L. Siqueira-Neto, PhD UCSF Specialist, Kinetoplastid Core Director

Patrick Symmonds UCSF/UC Berkeley Translational Medicine Candidate

Paul Novick Stanford PhD Candidate

Susanna Wen Stanford PhD Candidate

Mentors:

Steve RichardsKarl Handelsman

1 million

8-10 million

250 K

10 K

10 K

INSPIRATIONIdentifying/Defining the Pain

Business Model CanvasWEEK 1

Initial Funding

IP to developingcountries

Endemic Country Gov’t

IP for human

mkt

END USERIP for

human mkt

Initial Funding

Initial Funding

Pharma (human; developed country)

Ecosystem: Wk1

Initial Funding

Direct sales to pet owners

Traveler’s Medicine

Military (in endemic areas)

Initial Funding

IP to developingcountries

Endemic Country Gov’t

IP for human

mkt

END USERIP for

human mkt

Initial Funding

Initial Funding

Pharma (human; developed country)

Ecosystem: Wk1

Initial Funding

Direct sales to pet owners

Traveler’s Medicine

Military (in endemic areas)

Ecosystem: Wk10

PARTNER:Dx Company

IP for Animal Market

Initial Funding

~$2-$3mil

Collaboration

$20-30mil

IP to developingcountries

Endemic Country

Gov’t

Initial Funding

~$600,000

PARTNER

PARTNER: Vet Pharma

Initial Funding

~$1-$2mil

PARTNER

PARTNER: Human Pharma

Acces

s to

cmpd

libra

ries

IP for human

mkt

Increase value of product

END USER

Access to

cmpd libraries

PR

PR

Create mkt

IP for human

mkt

VS

● Could repurpose existing drug● Existing pharma infrastructure● Easily distributed

● Lifetime immunity● Fewer doses

PRODUCTChemotherapy vs Vaccine

PRODUCTChemotherapy vs Vaccine

VS

● Could repurpose existing drug● Existing pharma infrastructure● Easily distributed

● Lifetime immunity● Fewer doses

Scientifically RiskyFunder Preference

MARKETDeveloped vs Developing World

● Human market would drive value of drug● Traveller/tourist market● Military use

Developed● Majority of patients found here● High awareness & treatment● PR for developed country-based

pharma

Developing

● Human market would drive value of drug● Traveller/tourist market● Military use

Developed

Lack of approved Dx & low awareness in primary care MD

● Majority of patients found here● High awareness & treatment● PR for developed country-based

pharma

Developing

Developing country gov’t as customer

MARKETDeveloped vs Developing World

Veterinary Market

● Peripheral/supplementary market● Hampered by low awareness● Infection rates uncertain

Veterinary Market

● Peripheral/supplementary market● Hampered by low awareness● Infection rates uncertain (~5-15%)

Main driver of company value

Business Model CanvasWEEK 5

KEY PARTNERS

Sources of Non-dilutive Funding

Generating Awareness to Build Market

R&D Collaborator

Bringing Product to Market

Business Model CanvasWEEK 10

$ 800 K$ 2.6 M

$ 3.6 M

Strategy

Discovery(Screening)

Development(Lead Opt & DMPK-Tox)

PCC

Vet Clinical Trials

Human Clinical Trials

2014 2015 2016 2017 2018Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

TAM = $500 Million

SAM = $100 Million

SAM = $20 Million

$ 600 K$ 3.8 M $ 2.6 M

$ 1.0 M

$ 100 M

PARTNER

IP for Animal Market

Initial Funding

~$2-$3mil

Collaboration

$20-30mil

IP to developingcountries

Endemic Country

Gov’t

Initial Funding

~$600,000

PARTNER

CUSTOMERInitial Funding

~$1-$2mil

PARTNER

PARTNER

Acces

s to

cmpd

libra

ries

IP for human

mkt

Increase value of product

END USER

Access to

cmpd libraries

PR

PR

Create mkt

IP for human

mkt

Ecosystem: Wk10

INVESTOR READINESS

IRL6

First Pass Canvas

Low Fidelity MVP

Problem/Solution Validation

Product Market Fit

“Right Side of the Canvas”

“Left Side of the Canvas”

Business Case Defined

High Fidelity MVP

“Proof of Relevance” Path to Revenue Fully Articulated

Build KOL networkDeeper IP review and strategyDue diligence on partnersDeeper cost analysis to each data pointTeam talent gaps identified

Multi-Sided Market

Patient

Pet Owner

Veterinary

Philanthropic OrganizationsEndemic Countries (Gov)

Global Health; Reduce Care Costs

Heart FailureLife Threatening

Pet well-beingLife Threatening

Pet well-beingLife Threatening

$

$

$

NEXT STEPS

Eric ChatelainHead of

Drug Discovery

Robert DonDiscovery &

Pre-Clinical Director

Bernard PécoulDiscovery &

Executive Director

Talk to KOLs and apply for funding

Business Model CanvasWEEK 1

Finance Operations

Year 1 Year 2 Year 3

Discovery Phase $ 300 K $ 400 K $ 0

Hit to Lead $ 200 K - -

Lead Optimization (exploratory SAR) $ 100 K $ 400 K -

Development Phase $ 0 $ 1.7 mil $ 2 mil

in vivo studies - $ 200 K $ 2 mil

Matter synthesis & Scale up - $ 1 mil -

Formulation - $ 500 K -

Others (People + Space + etc) $ 500 K $ 500 K $ 500 K

TOTAL $ 800 K $ 2.6 mil $ 2.5 mil

Finance Operations

Year 1 Year 2 Year 3

Total Cost $ 800 K $ 2.6 mil $ 2.5 mil

Funding $ 800 K $ 2.6 mil $ 3.6 mil

NIH & similiar (US Gov’t funding) $ 300 K $ 600 K $ 600 K

DNDi $ 500 K $ 1 mil $ 1 mil

Gates/Carlos Slim Foundation - $ 500 K $ 1 mil

Brazilian Gov’t Partner - $ 500 K $ 1 mil

Vet Pharma Partner - - end of yr

WORKING CAPITAL $ 0 K $ 0 K $ 1.1 mil

Viable business via non-dilutive funding!

Veterinary Market Size

TAM = $500 Million

SAM = $100 Million

50 million dogs in endemic regions

10 million dogs in USA endemic states

SAM = $20 Million 20% of the dogs diagnosed and treated

Revenue model

Norm:<

Investment Revenue

>

Cost Breakdown

Research Preclinical Clinical

Hit/Lead identification

Lead optimization

in vitro PK

in vitro tox (AMES,

HERG, etc)

Rodent efficacy model

in vivo PK (mice, dogs)

in vivo tox. (fertility,

teratogenicity, carcin, etc)

Prelim. formulation

Human vet exposure

Experiment Cost Experiment Cost

TOTAL TOTAL$2,200,000 $3,100,000

$100 k

$1 mil

$500 k

$500 k

$100 k

$500 k

$2 mil

$500 k

$0 - 100k

($200,000) (< $600,000)

Metrics that Matter

Unit Quantity Total

Screening & Hits identification $ 1 / compound 100K compounds $ 100K

Hit-to-Lead $ 1K / series 10 scaffolds $ 10K

Lead Optimization $ 500K / series 2 series $ 1 mil

In vitro PK $ 100K / series 2 series $ 200K

In vivo PK & Toxicology $ 100K / series 1 series $ 100K

In vivo PD (rodent efficacy) $ 100K / molecule 2 molecules $ 200K

GMP Synthesis & scale up $ 1 mil / molecule 1 molecule $ 1 mil

In vivo Pre-clinical package $ 2 mil / molecule 1 molecule $ 1 mil

Formulation $ 500K / molecule 1 molecule $ 500K

IP $ 100K $ 100K

People (4 scientists) $ 320K / year 3 years $ 960K

Space & Infrastructure $ 200K / year 3 years $ 600K

TOTAL ~$ 6 mil

Key Partner Hypotheses

Partner Why do we need? Why will they partner?

Cost of partnership?

DNDi Funds and network for preclinical and clinical research

Currently looking for additional anti-parasitic Chagas scaffolds

IP for human patients in developing nations

NIH, foreign similars Need funds for preclinical and clinical research

History of funding Chagas disease research

None

Vet pharma companies Distribution of therapy, potential acquirer

Improve product pipeline IP for animal market in developed countries

Human pharma companies

Access to compound libraries, screening resources

History of partnerships in Chagas disease research

Potential IP for human partnerships developing nations, developed nations

Diagnostics companies Increased awareness and diagnosis of disease

Opportunity to sell more diagnostics

Exclusive partnership?

Academic epidemiology researchers

Increased awareness and market size validation

Looking for Chagas therapies in the marketplace

None

Universities/CROs R&D resources and manpower Fee for service relationships Price of R&D efforts

FDA Insight into exactly what is needed in IND package

Orphan, Breakthrough, etc designations

None

Learning about partnersPartner Hypothesis Experiment Result

DNDi Our current chemotherapeutics are an attractive scaffold for DNDi

Data review with DNDi influencers/directors

One of our projects is likely fundable, and are desperate for more pipeline projects

NIH, foreign similars Our research projects are attractive funding projects

Discussions with focus group heads, applied for SBIR

A promising Chagas chemotherapeutic is a fundable project

Vet pharma companies Vet pharma would be interested in licensing a Chagas therapeutic

Discussions with Biz Dev employees

Depends on prevalence/ market size, and which company

Human pharma companies

Big pharma will provide research resources

Discussions with external partnership coordinators

Compound libraries, screening resources, etc could be donated

Diagnostics companies Interested in partnership with therapeutics company

Attempted interviews with 4 quick test producers

Still scheduling interviews

Academic epidemiology researchers

Can firmly estimate the prevalence of Chagas disease in canines

Discuss with leading researchers

Not a consensus on how prevalent disease is

Universities/CROs These partners will operate on a fee for service basis

Interviews and quotes for projects

These are reliable, inexpensive research option

FDA

● DNDi is interested o Currently reviewing data internallyo Profile of project matches what they are looking for

● GSK is ready to partnero Analogue screening can begin soono Encouraging us to apply to Open Lab Foundation

● Neither would be interested in retaining vet IP, developed world IPo GSK might not even want Brazil, Mexico (WIPO guidelines)

ASTMH Conference Notes

● US vet market may be more primed than previously thoughto Higher awareness than we believedo Louisiana, in addition to Texas (and likely other states)

Early Stage Cash Flow

Year 1 Year 2 Year 3

NIH & similar $300k $300k $1 million

DNDi $500 k $1 million $1 million

Vet Pharma Partnership end of year

Total Revenue $800k $1.3 million $2 million

G&A $300k $400k $500k

Rodent IND Study $400k

Large Mammal IND Study $1.3 million

Formulation & Manufacture $400k (?) $400k (?)

Total Costs ($700 k) ($1.2 million) ($1.8 million)

Working Capital $100k $200k $400k

Veterinary Market

Vet. Pharma

Veterinarians● Difficult to assess incidence & prevalence of Chagas - low awareness● AVMA: guidelines for recommended vaccines & treatments for animals● Currently no FDA-approved treatment options available● Modes of transmission - congenital seems to be a big problem

Diagnostic● Collaboration/partnership? (est $30-50K to develop simple Dx w/ vet pharma)

● Min market size: $5-8mil annually (no risk, must produce results <6mo)● IP: only license animal health rights● What is the demand? Profit margin?

Human Market

● Chagas chemotherapeutic DOES represent acquisition target

● DNDi TPP is basis of most company’s TPPs

Pharma Companies

Clinicians

Insurance Companies● Provide data showing superiority to benznidazole● Physician required to submit positive tests before authorization of charge

● Who pays for Chagas?● Need a better active infection Dx● High prevalence in select US populations● Poor compliance (toxicity)● Need to increase awareness among 1’ care and ID doctors

○ Often too late to treat by the time cardiologists see patients