Maximizing Corporate Value In The Life Sciences Industry

Maximizing Corporate Value In The Life Sciences Industry Apeiron Partners LLC 161 Worcester Road Suite 301 Framingham, MA 01701 Tel. 781.250.2100 Fax....
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Maximizing Corporate Value In The Life Sciences Industry Apeiron Partners LLC 161 Worcester Road Suite 301 Framingham, MA 01701 Tel. 781.250.2100 Fax.781.250.2101 www.apeironpartners.com

Apeiron Summary ‹ ‹ ‹ ‹

Boutique investment bank focused exclusively on the life sciences Founded in 1995 U.S. NASD/SIPC member firm Focus areas: • Design and execution of corporate spin-outs: - on behalf of parent companies - a differentiating focus • Mergers & acquisitions: - primarily between U.S. and European firms leveraging market disparities • Private placements: - very selectively where we can help shape corporate and financial strategy in the process • Strategic alliances: - “high-end” alliances where deep structuring and negotiation skills are required • Investment advisory practice: - Advising Zambon Group (Milan, Italy) on the investment of €60 million • Deals originated and closed in all three major markets: - North America, Europe and Japan

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Current staff of seven professionals

Apeiron Partners LLC: Track Record

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>$550 million in capital (not “biodollars”) raised to date by Apeiron principals in N. America, EU & Japan

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Successfully designed, implemented and financed several private placements and four spin-outs

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Clients include both large and development-stage bio-pharma firms in N. America, EU & Japan

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Global network of VC relationships: North America, Europe and Asia

Apeiron Mission

To maximize the value of our clients by developing and implementing integrated transactional solutions

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Apeiron Addresses a Key Unmet Need Within the Life Sciences Industry

Strategy Oriented

Traditional Consulting Firms

Apeiron Partners LLC

Traditional Investment Banks

Transaction-Oriented 4

Our Transaction Philosophy ‹

The speed, scope and geographic dimensions of life science innovation is unprecedented

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In response, many companies are looking “outside” for various “innovation solutions”

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Research shows that many of these undertakings have failed A new model of innovation management is needed which balances internal “core” focus with transactional opportunities from outside the company The needed innovation management model is one that transacts, integrates and manages “to the core”

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The New Model for Innovation Management

Corporate Venturing New Tech/Biz Development

Corporate Venture Capital

Innovation by Acquisition R&D M&A Later-Stage Deals

Core Innovations Innovation by Alliance JVs/Consortia Open Alliances Integral Alliances

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‘Spinnovation’ Spinouts IP Out-licensing In-licensing

Apeiron Committed to Leadership in This Emerging Discipline

First Edition Published in 2005 by: Financial Times/Pearson Publications

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Some Apeiron Clients and Partners

ProfiGen Inc.

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Sample Apeiron Partners’ Spin-out Activities ‹

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RJR – Targacept (2000):

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KBI BioPharma, Inc.(2001):

•Apeiron designed, executed and

•Apeiron designed and created

helped grow this CNS-oriented drug discovery and development firm which has raised over $130 million since 2000

this bioproduction spin-out of Kinetic BioSystems, Inc. to focus on the global shortfall in biomfg capacity

Booz Allen – QED Solutions, Inc. (2000):

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British Technology Group – Ketocytonyx (2002)

•Apeiron helped design and create

•Apeiron helped BTG design and

this drug safety knowledge management company

obtain financing for this CNSoriented spin-out of BTG

The Apeiron Advantage ‹

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Global Network of Bio-/Pharma Relationships:

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Exploiting Key Trends in the Life Science Markets:

• Transactions completed in all three major

• Corporate spin-outs increasing as firms

markets of U.S., Europe and Japan • Regularly calling upon CEOs/senior management of 20-40 pharma firms per month • Current clients include firms from U.S., Europe and Japan

seek to rationalize and leverage their portfolios in the face of rising R&D costs and pricing pressures • Consolidation in the industry inevitable and will be severe as too little capital available to fully develop all technologies and products • Flux of public capital flowing into life science markets without clear plan for commercialization

Global Network of Venture Capital Relationships: • Have raised capital in all three markets of

U.S., Europe and Japan • Regularly calling upon 30-50 VCs per month • Frequent speaker on corporate spin-outs and innovation management

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Apeiron creatively leverages the above for the benefit of our clients

Apeiron’s Investment Advisory Practice ‹

Principals have 30+ work-years experience in life science venture capital

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Experience covers VC investment, fundraising, senior management recruitment, board experience and portfolio management

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Apeiron’s formal investment advisory practice began in 2003 with a mandate from Z-Cube s.r.l.: • VC subsidiary of the Zambon Group, a privately-held multinational pharma

company with annual revenues >€500 million • €60 million being invested in the formation and growth of companies in Zambon strategic focus areas • Over 800 projects and companies screened since 2003 • Deep due diligence performed on >10, investments made in 3 thus far, 4-5 additional investments in the next 12 months

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Management of Apeiron Partners LLC Jeffrey D. Wager, M.D., M.B.A., Managing Director

‹ M.D.,

Rush Medical College

‹ MBA,

University of Chicago

‹ 2000-present:

Managing Director, Apeiron Partners LLC ‹ 1995-2000:

Senior Associate and later General Partner, Medical Science Partners (Harvard-affiliated venture capital fund) Managing Director, Commonwealth PharmaPartners LLC ‹ 1991-1995:

Executive Director, Business Development, pharmaceutical consulting practice of Bank of Tokyo-Mitsubishi affiliate

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Management of Apeiron Partners LLC Gustav Christensen Managing Director

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MBA, Harvard Business School MSc, University of Århus, Denmark 2005-present: Managing Director Apeiron Partners 2000 – 2004: Phylos, CEO 1999 – 2001: GTC Chairman of Primedica 1992 – 2000: Phytera Co-Founder, Director 1991 – 1998: Alpha Beta Technology Chairman 1988 – 1990: Immulogic Pharmaceutical, CEO 1983 – 1988: Genetics Institute SVP of Commercial Affairs 1976 – 1983: Baxter Travenol Laboratories, VP Operations, Fenwal Labs, Director of Marketing International, General Manager Sweden

Management of Apeiron Partners LLC Christopher U. Missling, PhD, MBA Managing Director

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MBA, Northwestern University, Kellogg Graduate School of Management PhD in Bioorganometallic Chemistry (magna cum laude), LudwigMaximilians-University (Munich, Germany) 2005-present: Managing Director, Apeiron Partners LLC 2004 – 2005: ImmunoGen, Inc. (NASDAQ: IMGN): Vice President and Chief Financial Officer 2002 – 2004: Curis, Inc. (NASDAQ: CRIS): Senior Vice President Strategic Planning and Chief Financial Officer 1997 – 2001: Hoechst AG / Aventis: Head of Financial Planning 1994 – 1997: Deutsche Bank, corporate finance and investment banking

Management of Apeiron Partners LLC Richard Babb Chief Financial Officer

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Certified Public Accountant NASD registered broker-dealer (Series 7, 24, 28 & 63) 2001 - present: Chief Financial & Compliance Officer Apeiron Partners LLC 1999 - present: Chief Financial Officer Medical Science Partners (Harvard-affiliated venture capital fund) 1988 - 1999: Ernst & Young private entrepreneur

Principals of Apeiron Partners LLC Steven Wardell, MBA Principal ‹ ‹ ‹ ‹

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MBA, Harvard Business School MPhil, Cambridge University, Finance BA, Harvard University, Economics NASD registered broker-dealer (Series 7, 24 & 63) 2001-present: • Principal, Apeiron Partners LLC • Principal,

Fred Meyer, PhD, CFA Principal ‹

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Commonwealth Pharma Securities LLC ‹

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2000-2001: Senior Manager, Sonexis (corporate development) 1996-1998: Financial Analyst, Salomon Smith Barney (M&A) New England director of the Biotechnology Roundtable Member of the Board of Associates of the Whitehead Institute for Biomedical Research

PhD, Ohio State University, Molecular Genetics BSc, University of Illinois, Genetics and Development with Distinction Chartered Financial Analyst NASD registered broker-dealer (Series 7, 24 & 63) 2002-present: •Principal, Apeiron Partners LLC •Principal, Commonwealth Pharma Securities LLC

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2000-2001: Research Associate, Needham, Biotechnology Equity Research 1997-2000: Research Analyst, Schooner Capital Member of the Board of Associates of the Whitehead Institute for Biomedical Research

Sample Apeiron Engagement Profiles

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Client Description

Client Location

Description of Transaction

Deal Value

Comments

Oncology focused,, development-stage

U.S.

Research, development, and commercialization strategic alliance with a European multinational pharma company

>$50 million

Enabled client to bring lead product to market with only ~$10 million VC financing

Oncology focused,, development-stage

U.S.

Venture capital financing and partial sale of royalty $7.5 million interests

Enabled company to retain rights to marketed product

Combinatorial chemistrybiology

U.S.

Research, development, and commercialization agreement with U.S. multinational firm

Not disclosed significant value creation and acceleration of the client’s time-to-IPO

Combinatorial chemistrybiology

U.S.

Research, development, and commercialization agreement with U.S. multinational firm

>$75 million significant value creation and acceleration of the client’s time-to-IPO

Development-stage biomanufacturing firm

U.S.

Venture capital financing and spin-out of Not disclosed Enabled client to secure CEO biomanufacturing subsidiary from bioremediation and state funding to acquire parent and venture capital financing. mfg plant

Development-stage molecular biology firm

U.S.

Research and development collaboration multinational Japanese company

Drug informatics firm

U.S.

Seed and follow-on venture capital financing

>$15 million Avoided insolvency for client firm; first major strategic alliance for client $7 million

Enabled company to achieve break-even in revenues

Sample Apeiron Engagement Profiles - 2

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Client Description

Client Location

Description of Transaction

Deal Value

Comments

CNS-oriented drug discovery & development firm

U.S.

Research, development, and commercialization strategic alliance with a multinational European pharma company

>$80 million

Enabled client to secure VC interest for spin-out financing

CNS-oriented drug discovery & development firm

U.S.

Design and completion of spin-out and venture capital financing of company

$30 million

Enabled company to significantly develop pipeline and secure additional partnerships

CNS-oriented drug discovery & development firm

U.S.

Research, development, and commercialization strategic alliance with a multinational European pharma company

Not disclosed significant value creation and acceleration of the client’s time-to-IPO

DNA therapeutics company

U.S.

Research, development, and commercialization agreement with European multinational firm

Not disclosed

DNA therapeutics company

U.S.

Research, development, and commercialization agreement with European multinational firm

Not disclosed Second strategic alliance for client

Multinational pharma company

U.S.

Designed spin-out for this firm resulting in significant investor interest

NA

Implementation of spin-out suspended due to M & A of parent

Multinational pharma company

U.S.

Designed and negotiated comprehensive codevelopment alliance with major Japanese firm

NA

Transaction suspended further to discontinuation of parent program

First strategic alliance for client

Sample Apeiron Engagement Profiles - 3

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Client Description

Client Location

Description of Transaction

Deal Value

Comments

Publicly-held medical device company

U.S.

Designed spin-out for this firm resulting in significant investor interest

NA

Implementation of spin-out suspended due to acquisition of partent

Privately-held, venturebacked oral care firm

U.S.

Design and implementation of comprehensive corporate partnering strategy

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Engagement terminated pursuant to acquisition

Large U.S. private equity firm

U.S.

Design of marketing program for private equity program in Japan

NA

Following completion

Privately-held, venturebacked oncology firm

Canada

Design comprehensive corporate partnering strategy

NA

Formed basis for company to initiate and pursue corporate partnering campaign

Privately-held, venturebacked, CNS-oriented drug discovery & development firm

Europe

Multinational, publicly held technology company

Europe

Multinational pharma firm

Europe

Valuation of company’s lead product for purposes Not disclosed significant value creation and acceleration of the client’s of negotiating M & A of firm time-to-deal closure on its M&A Design and completion of spin-out and venture capital financing of company

Not disclosed Enabled client to secure VC interest for spin-out financing

Design and completion of term sheet with investors Not disclosed Spin-out suspended pursuant for spin-out and venture capital financing of to strategic shift of pharma company company

Why Apeiron For The Spin-Out Process?

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Only firm dedicated to the design and execution of corporate spin-outs in the life science space

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Representing parents – not investors – in the spin-out process

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Proven ability to organize and optimize a quality syndicate of value-added investors and partners

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Providing a fully outsourced solution to the spin-out strategy and implementation process in order to conserve and focus parent resources

Scope of Spin-Out Services Provided by Apeiron Partners ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹

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Development and differentiation of NewCo corporate identity and mission Design and implementation of organizational strategy (relationship with parent, inter-company agreements, etc.) Design and implementation of R&D and corporate development strategies Strategy and recruitment of board and advisory board members Strategy and selection of accounting and legal representation Development of public relations & publication strategies Development and implementation of strategic alliance strategy Design and implementation of venture capital strategy Drafting of all business plans, financial plans, presentational material, etc. “Front-line” role in implementation of all spin-out business processes

Summary

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Strong blend of scientific, strategic and deal execution skills in all three major life science markets

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Commitment to maximizing corporate value through an integrative innovation management discipline in all transaction work

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Strong track record of success

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