Inserogen final presentation

“insero” = to plant ”gen” = gene Rapid, cost-effective, and scalable manufacturing technology that uses tobacco plants as biofactories of therapeutics“Using tobacco to produce a life-enhancing treatment for emphysema disease” I-Corps Contacts: 52

Team Inserogen Entrepreneurial Lead  1st Prize, 2010 Big Bang! Business Plan Competition at UC Davis Lucas Arzola  Elevator Pitch Award, 2011 UC Ph.D. Candidate, Chemical Engineering Berkeley B-Plan Competition Emphasis in Biotechnology  E-Team Grant, National Collegiate Inventors and Innovators Alliance Principal Investigator  25+ years of experience in Plant Made Proteins Research Karen McDonald, Ph.D. UC Davis Professor, Chemical Engineering  Inventor in 1 issued patent and 4 patent applications Mentor  20 years of experience in Process Development Manufacturing and Vasilis Voudouris, Ph.D., MBA Strategic Planning Managing Director, Vereniki Solutions

A Green Multi-Product Manufacturing Platform Harvested tobacco > 90% reduction in capital costs Reduction in operating costs Large scale production in weeks, not months

The Business Model Canvas Target Product – seasonal & pandemic fluVersion 1 vaccinesTobacco Suppliers R&D Speed Publications HHS BARDAGene Synthesis Comp. Manufacturing Cost-Effectiveness Conferences DOD DARPACMO Regulatory Approval Scalability Long Term Contracts CDCCRO Marketing Safety Vax ManufacturersFDA Customization NGOs Intellectual Property U.S. Based Supply Wholesalers Government Manufacturing Facility Contract Manufacturing Facility Investment IP Licensing Costs Fully Integrated Manufacturing (Sales) Manufacturing Costs Marketing Costs Licensing (Royalties)

The Business Model Canvas Target Product – seasonal & pandemic fluVersion 1 vaccines Speed Cost-Effectiveness Scalability Safety Customization U.S. Based Supply What we thought: these features can meet a need for the influenza vaccine market.

Getting Out of the Laboratory! What we did: Contacted vaccine industry stakeholders What we found:DOSES  Unpredictable market 2B Pandemic flu  Flu vaccines are commodities  Large companies are not willing Surge capacity Opportunity to change their manufacturing platform250M Seasonal flu Seasonal flu Seasonal flu “This is a billion-dollar investment we are not willing to make” YEAR 1 YEAR 2 YEAR 3

The Business Model Canvas Target Product – seasonal & pandemic flu vaccinesVersion 2 alpha-1 antitrypsin (AAT)Tobacco Suppliers R&D Speed Publications PatientsGene Synthesis Comp. Manufacturing Cost-Effectiveness Conferences PhysiciansCMO Regulatory Approval Scalability Long Term Contracts Pulmonary LabsCRO Marketing Safety Large Biotech Comp.FDA Reliable SupplyAlpha-1 Foundation Intellectual Property U.S. Based Supply Wholesalers GovernmentAlpha-1 Project Manufacturing Facility Customization Direct to Patient Grants Licensing (Royalties) Facility Investment IP Licensing Costs Upfront & Milestone Payments (from Partners) Manufacturing Costs Marketing Costs Lean Biotech Company (Sales)

What are we selling? First target product: Alpha-1 antitrypsin (AAT) Indication: AAT Deficiency (AATD) – hereditary disorder resulting in low levels of AAT in lungs, leads to emphysema, often before age 40 Less than 10% of AAT Deficiency individuals have been properly diagnosed Worldwide Estimates  3.4 million with AATD  116 million carriers “AAT may be one of the most common serious hereditary disorders in the world” - President, Alpha-1 Europe

AAT Treatment is Expensive There is no known cure for AAT Deficiency Treatment: Augmentation therapy – weekly AAT infusions  5 g AAT per patient per week  Annual: 260 g AAT per patient Competitor Pricing  Prolastin - $350/gram  Zemaira - $430/gram  Aralast - $510/gram  Alfalastin - $450/gram Cost per patient: ~$100,000/year for life

Value PropositionProblem: Commercial AAT for augmentation therapy isderived from donated human blood Cost Reliable Supply: “There are problems with supply. We need new ways of making AAT.” – Scientific Director, Alpha-1 Foundation Safety: “The risk of transmission of infectious agents cannot be completely eliminated.” – Prescribing information for ZemairaValue proposition: We can provide recombinant AAT (we’ve already produced it in the lab!)  Reliable and scalable supply  Safer production  Cost reduction – we believe we can substantially reduce treatment cost

Target Market AAT deficiency in the United States New indications for AAT Diabetes, cystic fibrosis, others Under Total treatment6,000 patients $600M 100,000 patients $10BCost per patient: $100,000/year Millions of patients Billions “As diagnosis improves and new indications are found, we will need more AAT produced.” – Scientific Director, Alpha-1 Foundation

Business Model and Customer ArchetypeLean biotech business model“Starting out and for as long as you can, be a lean biotech company.” – CEO, Biotech Company Core technology Outsource to CMO Finished Drug Product + Patent protection Customer: Established biotech company (for clinical development) Interested in blood proteins and/or alternative manufacturing platforms Looking to increase their pipeline, gain market share Hundreds of millions (not billions) in revenue Hundreds (not thousands) of employees

Customer Decision MakingHow do customers decide if they want our product? • 400-500 opportunities per year Initial Evaluation • 1-2 weeks • 80-100 opportunities Detailed Analysis • 2-3 months • Internal innovation committee meeting Go – No Go Decision • Once a month • 25-30 opportunities Due Diligence • 2-3 months • Agree to terms, business development team approval Business Discussions • 2-3 months • Establish work plan and define milestones Deal is signed • Project starts Total time: 6-9 months

Revenue Model = money = relationship = information = AAT Patient Large Pharma Private Payor Employer Government PayorWholesalers Hospital/Clinic Government Physicians Taxpayer Pulmonary Function Lab INFLUENCER

The Business Model Canvas Target Product – seasonal & pandemic flu vaccinesVersion 3 alpha-1 antitrypsin (AAT)Tobacco Suppliers R&D Speed Publications PatientsGene Synthesis Comp. Manufacturing Cost-Effectiveness Conferences PhysiciansCMO Regulatory Approval Scalability Long Term Contracts Pulmonary LabsCRO Marketing Safety Large Biotech Comp.FDA Reliable SupplyAlpha-1 Foundation Intellectual Property U.S. Based Supply Wholesalers GovernmentAlpha-1 Project Manufacturing Facility Customization Direct to Patient Grants Licensing (Royalties) Facility Investment IP Licensing Costs Upfront & Milestone Payments (from Partners) Manufacturing Costs Marketing Costs Lean Biotech Company (Sales)

Next Steps Alpha-1 Project NSF SBIR Phase I Funding Venture Philanthropy Program Grant Licensing agreement Freedom to IP of core technology Operate analysis Join Engineering Team Development & Translational Business Incorporation Technology Center

Inserogen final presentation

by steve blank on Feb 20, 2012

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