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Biotech Contract Development and Manufacturing with Asia-backed Services SECTION 1
Why Are Contract Services So Important to this Industry?
Increasing the pressure on product development strategies - from drug discovery through commercial manufacturing Biotech companies need us more than ever to help get their products to market as efficiently and economically as possible! Viropro, Inc. Confidential
Mission Statement “MAKE BIOTECH DRUGS FOR CLIENTS, EFFICIENTLY AND ECONOMICALLY.”
The Business Recipe To create the correct level of cross-border mix that will enable us to build a world-class biotech contract services company, while simultaneously allowing each entities’ entrepreneurial drive to flourish (a la a “Protean” corporation). Bizplan - Confidential
Yes, it does. We’re NOT trying to create demand where it hasn’t already been expressed.
The global trend for the foreseeable future is for a continuing increase in the rate and volume of R&D that is being out-sourced by mid-to-large pharmaceutical companies.
Confidential Viropro, Inc.
Biopharmaceutical Contract R&D and Manufacturing Market Overview Growth rates moderating: 12% from 15% 2009 market declined 2011 market: $4.3 billion Billion of Dollars Year Data Source: Industry Reports Biopharmaceutical Contract Manufacturing 2009: Expanding Markets, New Capacities and Improved Performance (48 pharmaceutical and biotechnology companies/29 CMOs)
World Outsourced Market Volumes Mammalian Cell Culture Overview Contractors Capabilities No. Of Kgs Year Data Source: Industry Reports Biopharmaceutical Contract Manufacturing 2009: Expanding Markets, New Capacities and Improved Performance (48 pharmaceutical and biotechnology companies/29 CMOs)
Changing Pharma/Biotech Attitudes Towards Asia-backed CDMO Services In 2005, 53% of respondents would consider using a contractor outside their region Will Not 10% Will Not Will Consider working with Asian COM In 2007, 80% of respondents would consider using a contractor outside their region Will Consider working with Asian COM 80% Significant change in attitudes Data Source: Industry Reports Biopharmaceutical Contract Manufacturing 2009: Expanding Markets, New Capacities and Improved Performance (48 pharmaceutical and biotechnology companies/29 CMOs)
Pharma/Biotech Advantage to using Asian CMOs Users look for substantial cost savings when using an Asian CMO Data Source: Industry Reports Biopharmaceutical Contract Manufacturing 2009: Expanding Markets, New Capacities and Improved Performance (48 pharmaceutical and biotechnology companies/29 CMOs)
Pharmaceutical and Biotechnology Companies: Overview of Respondents’ Outsource Strategies Data Source: Industry Reports Biopharmaceutical Contract Manufacturing 2009: Expanding Markets, New Capacities and Improved Performance (48 pharmaceutical and biotechnology companies/29 CMOs)
Biopharmaceutical Contract Development & Manufacturers: Future Plans: Data Source: Industry Reports Biopharmaceutical Contract Manufacturing 2009: Expanding Markets, New Capacities and Improved Performance (48 pharmaceutical and biotechnology companies/29 CMOs)
SECTION 3 The Business Model for a Global Footprint
The Global Footprint Cambridge, UK Montreal, CA Groningen, NL Pune, IN Irvine-San Diego Penang, MY
“String of Pearls” Future Future Intas BPD Alpha Montreal ESQ
Prof. Pisano’s Model: Adapted for Viropro Bioprocessing MammCell Mfg. Prot. Analytics BacCell Mfg. CRO/Other VIROPRO
New Structure VPRO Malaysia 100% Poway/San Diego 100% ALPHA ESQ BPD Holland (76%-100%) M’real India Bac. GMP Mam. GMP Poway Camb. Future India (51%) Malaysia (100%) Center of Excellence for Expression Platforms & Bioprocessing Center of Excellence for Protein Analytics Center of Excellence for GMP Biomanufacturing
SECTION 4 Capabilities and Core Strengths(creating a “1 + 1 equals more than 3” situation!)
Capability Cell line development Preclinical material - Toxicology Process development Cell line Scale up Viropro, Inc. Bulk Material is delivered for fill/finish Production of clinical bulk Market Supply Validation Cell analysis and Virus studies Clinical Studies Phase I - III Commercial / Phase IV Other specialized service providers may be involved in delivering a complete clone-to-clinic development / manufacturing package for bacterial-, yeast- and mammalian cell culture products.
Combined Customer Base Over 100 clients, including: Small to Multi-National Pharma/BioPharma Biotech Universities CROs A small sampling of our combined customer base: Avecia Biologics, Bayer Bioscience, Boehringer-Ingelheim, DSM Research, Ferring, Hal Allergy, Halozyme, Henogan, Genmab, Geron, Intas Biopharmaceuticals Ltd., INSERM, King’s College, Lek Pharmaceuticals, Lonza, Lonza Biologics, Lupin Ltd., Merckle Biotech, Pfizer, Pharming Technologies, RentschlerBiotechnologi, Schering Plough, Serum Institute, UCB . . . . 100’s of successful projects and repeat clients PROPRIETARY: DO NOT DISTRIBUTE
Funding Needed & Exit Strategy Viropro requires a grand total of USD 40 million in two major tranches of USD 24 million (in 2011) and USD 16 million (in 2012), respectively, for key acquisitions; for getting GMP accreditation; and working capital for 2 years until we reach a net positive cash flow position Funding required can be in form of equity/debt, preference share with fixed yield, soft loan or a combination of the above. Exit will depend on the investors’ strategy The method or vehicle used by the investor to exit will depend on their preference. Exit could be by any of the following methods:
Investment Merits The contract services business for biopharmaceutical products is poised for an incremental growth in Asia due to significant cost advantages and limited competition. Viropro has three Term Sheets in place to acquire key technical-, intellectual- and physical assets, and to capitalize the Alpha Biologics’ world class facility/asset in Penang, Malaysia, thereby providing the foundation for its global footprint. The investments required by Viropro is for the above acquisitions and for working capital to prepare Alpha Biologics for its GMP accreditation and to going commercial. Viroprohas an experienced management and technical team. An investment return of ~10X and an IRR of ~46% on post-tax earnings, in the 5th year of full GMP operation, is predicated on the basis of a robust financial model.
Capitalization of Alpha Biologics into Viropro Babraham Research Park Babraham, Cambridgeshire Penang Science Park Malaysia
Alpha Biologics Summary -1/2 Alpha Biologics is a bio-manufacturing organisation offering US FDA and European EMEA current Good Manufacturing Practices (cGMP) compliant services to the worldwide pharmaceutical and biotechnology industry A new FDA design-reviewed 5,000m2 plant on the Penang Science Park for the manufacture of biologics drugs (including bio-similar) for pre-clinical and Phase I, II and III clinical trials State-of-the-art bespoke manufacturing equipment designed, built and validated by industry experts in Europe Process development laboratories located in the biotech hub of Cambridge UK, lead by highly experienced industry experts
Alpha Biologics Summary – 2/2 The facility will focus on the provision of mammalian cell culture services for the production of monoclonal antibodies and recombinant proteins Future expansion could be envisaged in two stages – the first, a ‘fill/finish’ operation; the second, a microbial cell facility Managed by a team of professionals with cGMP facility design and operation, and manufacturing experience in the US and Europe, Alpha will ensure the highest standards of production and regulatory compliance Most, if not all, of the major contract manufacturing competitors are located in the US and Europe and costs associated with these facilities, due to their locations and size are much higher than Alpha. Thus Alpha will be able to compete aggressively on pricing while still achieving the gross and net margins required