Entrepreneurship 101: Dancing in the Gap
October 10th, 2006, MaRS Discovery District, Toronto
Michael H. May PhD
President & Co-Founder
Rimon Therapeutics Ltd

If medicine is the next driver of wealth…
Knowledge-Driven Wealth
Juan Enriquez, As The Future Catches You, 2000

Companies like Rimon will be the vehicles
According to Enriquez, wealth can be measured by the
number of people it takes to generate a patent:
• USA – 5,000
• Canada 8,000
• Mexico 1.2 million
• Rimon – 0.6
Companies like Rimon and science-based
entrepreneurs like you will drive future wealth
generation for Canada

Dancing in “The Gap”
Bus
ines
s
nce
Scie
Viable
products
Excellent
“The Gap”
that help
science
people

“The Gap” is a all about…
…risk mitigation, survival and endurance
$
1 in 3000
time
The Gap
High Risk of Failure

The value of your “idea”….
Market Size - $1 billion
Growth – 5 % annually
Licensing partner’s share – 33 %
Adoption rate – 75 %
License fee – 20 %
Number of key technologies – 2
Cost to market - $4 million over 3 years
Timeline – 10 years
Net Present Value (NPV) - $30 million

Example: Rimon’s focus in “The Gap”
Product
Polymer Clinical
Pre-clinical
Focus
Design Validation
Validation
Proof-of-product
Proof-of-concept material development
material development
Proof-of-application
material development

Execution lowers uncertainty
Product
Polymer Clinical
Pre-clinical
Focus
Design Validation
Validation
Proof-of-product
material development
p < 80 %
Proof-of-concept
material development
Proof-of-application
p < 25 %
material development
p < 50 %

There is much uncertainty (risk)
Product
Polymer Clinical
Pre-clinical
Focus
Design Validation
Validation
Bench studies p < 10 %
IP Protection
Animal efficacy
Freedom to Operate
Animal safety
p < 80 %
p < 50 % Proof-of-product
material development
p < 80 %
Proof-of-concept
material development Scale-up
Manufacturing
Proof-of-application
p < 25 % Regulatory
Re-imbursement
material development
Licensing deal
p < 50 %
p < 10 %

True value is discounted by risk
• NPV of idea discounted for risk (80%) - < $200,000
• NPV is negative with less than 1 year delay in plan
• NPV is negative if costs underestimated by < 10%
$
1 in 3000
time
The Gap
RISK

“The Gap” is about risk mitigation
• Value creation is risk mitigation
• Execution mitigates risk
• One idea/technology/product is not enough
• Ideas are worth very little – don’t get greedy
• If you can get early stage financing – take it
• One financing will not get you out of “The Gap”
• Survival is a great accomplishment

Step 1: Generate a business plan
• Understand your audience
• Keep it simple, clear and brief
– Create a 1-page strategic plan first
• Focus on people, plan, cash and the wow!
• Focus on products
• Under promise and over perform
• Note: BP are easier to craft when something has
been accomplished – execution brings credibility

Step 2: Execute, execute, execute
Do you what you said you were going to do!!!
• Make milestones achievable and measurable

Step 2: Execute, execute, execute
This is difficult when you are responsible for…
• Business plan and vision
• Financials and budgeting
• Human resources and team-building
• Financing
• Management and administration
• Business development and deal-making
• Research and product development
• Intellectual property protection
• Regulatory and re-imbursement
• And everything else that must be done…

Step 2a: Know that you don’t know
And focus your first sales pitch on those that
can help:
• Lawyers
• Accountants
• Directors
• Investors
• Service providers
• Anyone that has done it before

Step 3: Be innovative
There is always a way…

Build scientific and business “metaphors”
ofondisenregneristehfogsarsthefnceeoreth
Of on side greener is of fence the grass other the
The grass is greener on the other side of the fence
• Scientists are great at reduction, less skilled at
innovation
• Metaphors contain the greatest amount of value
using the least number of resources
• Metaphors are built, not discovered

Step 4: Strategize for survival
• Much assistance is available for
start-up companies
• The stakeholders, rules, and
constraints are often the focus of
discussions about commercialization
(e.g., money, people, facilities, IP)
• Heavily constrained systems can be “played” an infinite
number of ways
• Strategy is critical
• Control the centre and think three steps ahead

Step 5: Manage stakeholder risk
Scientific Financial
Entrepreneur
Business

Step 5: Managing Stakeholder Risk
Important considerations:
• Determine stakeholder risk tolerance, objectives,
limitations and agendas
• Manage expectations
– Under promise, over perform
• Communication is key
– Disclose everything (good and bad) quickly
– Interact regularly
• Include stakeholders in solutions and decisions
• Stay calm

Everyone Will Take Risks…
…it just depends on the song and the partner…

Step 6: Network
• Networking is difficult, but gets easier over time
• It is a great way to get help (which we all need)
• Buzz = success = air time
– “The medium is the message”
– Example: http://rimon.blogware.com
• “Small world phenomenon” depends on:
– Inner network built on trust (e.g., links through
volunteerism)
– Broad network created by few highly linked individuals
(e.g., Kevin Bacon)

Rimon Started from …
…a single experimental observation

A New Paradigm – Polymers that Heal
Theramers™ are novel medical polymers that have
drug-like properties
– Next generation materials that are active - not simply
drug delivery vehicles
Theramers™ are regulated as devices
– Drug-like products in 2-5 years for a fraction of the
development cost of conventional therapeutics
Rimon’s portfolio of Theramers™ target large
markets with significant unmet needs
– Initial targets are all multi-$ billion markets
– Versatility of polymer chemistry enables broad
application
The Theramer™ Company

Unique Value Proposition
Drug-like Device
Margins Timelines
Versatility of
Polymers
The Theramer™ Company

Corporate Overview
• Spun-out of the University of Toronto in 2000;
strong ties to local biomaterials centre of excellence
• 5 core technologies, 4 products in development
• Potential partners engaged for all product concepts
• 11 patents issued or pending, own rights to all IP
• Revenue generation through licensing
• Extensive research network:
The Theramer™ Company

Commercial Strategy
Advance a robust pipeline that offers products at
various stages of development:
• unique medical products that are close to market
• novel polymers that enhance the value of existing
medical devices, and
• novel polymers for co-development of partner-
defined product concepts
The Theramer™ Company

Core Technologies
• MI Theramer™
Activity: Inhibits the degradation of tissue
Mechanism: Binds matrix metalloproteases (MMPs)
selectively and strongly
Applications: Wound healing, joint injectables for
osteoarthritis and rheumatoid arthritis, coating for
stents and ophthalmology products
• AM Theramer™
Activity: Kills bacteria without harming human cells
Mechanism: Disrupts bacterial cell membrane
Applications: Medical device related infections (e.g.,
wound dressings, in-dwelling catheters, contact lenses)
The Theramer™ Company

Core Technologies
• Angiogenic Theramer™
Activity: Induces development of new blood vessels
Mechanism: Stabilization of endogenous growth factors,
stimulation of macrophages
Applications: Wound healing, regenerative medicine, and
implant integration into tissue
• ThermaGel™
Activity: Changes from liquid to soft gel reversibly
around body temperature
Applications: Wound healing, biological filler, drug
delivery
The Theramer™ Company

Initial Focus on Chronic Wound Healing
Rationale:
• Significant unmet needs in wound care market
• Best prospect for validating Theramer™ concept and
generating revenue in the near-term
– Fast track to human trials and the market
Theramer™-based wound care “toolkit”
Angiogenic Theramer
MI Theramer
AM Theramer
The Theramer™ Company

MI-Sorb™/MI-Gel™ Dressings
MI-Gel™
MI-Sorb™
• Inhibit enzymes (MMPs) that chew apart wounds
faster than they can heal
• Positive preliminary clinical data
The Theramer™ Company

MI-Sorb™ Clinical Trial
Objectives: B
• Safety
• Reductions in MMP activity
• Trends towards healing A
Wound Types:
D
A) Venous stasis ulcers (VSU)
B) Diabetic ulcers (DU)
C) Pressure Sores (PS)
Miscellaneous (Misc) C
D)
The Theramer™ Company

MI-Sorb™ Clinical Trial Design
* Dressings changed every 2-3 days
MI-Sorb* & Secondary Dressings* N=24
Secondary Dressing
N=32
Baseline
Secondary Dressings* N=8
6 wk Visit
2 wk Visit
Measure (versus baseline):
• MMP levels in wound fluid (weekly) and tissue (as possible)
• Wound size, characteristics of exudate and quality of wound bed
• Bacterial colonization by swab and biopsy
• Nurse and patient satisfaction
The Theramer™ Company

Clinical Data Summary – P19
• Male, 43 yrs old, MVA paraplegic
4.00 • Pressure sore – 2 years old
• Multiple previous clinical trials
3.50
• 85% reduction in wound volume
• 52% reduction in MMP activity
Wound Volume (cm)
3.00
3
• Enhanced wound bed quality
2.50 • Strong endorsement from patient,
primary caregiver and study nurse
2.00
1.50
1.00 Baseline MI-Sorb™ Treatment
0.50
0.00
0 1 2 3 4 5 6 7
Time (weeks)
The Theramer™ Company

Trends Towards Healing
Patient MMP-2 in MMP Presence and
tissue activity in appearance of
(brown stain) exudate collagen (blue stain)
Week 0 Week 6 Week 0 Week 6
↓
3DU
↑
4DU
↓
14VSU
The Theramer™ Company

Trends Towards Healing
Patient MMP-2 in MMP Presence and
tissue activity in appearance of
(brown stain) exudate collagen (blue stain)
Week 0 Week 6 Week 0 Week 6
↓
15VSU
↓
26Misc
↔
27Misc
The Theramer™ Company

Pipeline Products
MMP-Inhibiting Joint Injectable
Market:
• Potential revenues of ~ $30-60 million in 2-4 years with single partner
Competitive Advantages:
• Compatible with existing products
• Should not compromise device designation of existing products
• Clear and testable therapeutic effect
Key Results:
• Validation from wound healing application
• Demonstrated enhancement of existing products in vitro
• Demonstrated activity using human synovial fluid
The Theramer™ Company

Pipeline Products
Anti-Microbial Catheter Coating
Market:
• Potential revenues of $12-15 million in 2-4 years based on a single
catheter product (e.g., venous access catheters)
Competitive Advantages:
• Long-lasting
• Compatible with medical device regulatory and technical experience
• Non-toxic to human cells
Key Results:
• Up to 99.9% reductions in viability of gram +ve and –ve bacteria (for
up to 60 days)
• Low hemolysis, and good blood compatibility
• Synthesized numerous versions with varying physical properties
• Independently validated by a potential partner
The Theramer™ Company

Pipeline Products
MMP-Inhibiting Stent Coating
Market:
• Potential revenues of $60 million with single partner
Competitive Advantages:
• No drugs (regulatory and commercial advantages)
• More compatible with medical device culture and processes
• Less expensive
• Enables other stenting applications (e.g., peripheral stenting)
• Compatible with drug delivery, if multiple targets are required
Key Results:
• Synthesized materials with excellent mechanical properties and
durability
• Demonstrated in vitro inhibition of relevant MMPs
The Theramer™ Company

Key Milestones Achieved
With $3.5 million, we have executed our plan to:
• Scale-up and manufacture clinical batch of MI-Sorb™
• Commence clinical trial of MI-Sorb™ with world-
renowned dermatologist, Dr. Gary Sibbald
• Obtain device designation for MI-Sorb™ from the
USFDA and commence regulatory approval in Canada
and US
• Build pipeline through invention, in-licensing and
initiating product development
• Demonstrate pre-clinical efficacy and safety of all core
technologies
• Engage partners in product development
The Theramer™ Company

Key Upcoming Milestones
During the next 12 months, we plan to:
• Conclude the MI-Sorb™ clinical trial
• License MI-Sorb™ to global wound care company
• Raise $5 million
• Advance and expand pipeline products through co-
development/licensing agreements with partners
• Generate new Theramers™ and build Theramer™
brand
The Theramer™ Company

Summary
• Building a company is hard and is not a part-time job
• Mixing science and business is exhilarating
• The role of entrepreneur is to manage risk and survive
“the Gap”
– execution
– innovation
– networking Bus
ines
s
– persistence
nce
Scie

Summary
• Take care of hard science first
• Seek out coaches and help from others
• Polish communication skills
• Learn to negotiate
• Develop a thick skin
Bus
ines
s
nce
Scie

Need Inspiration?
Quotations from Helen Keller:
• “Life is either a daring adventure or nothing”
• “No pessimist ever discovered the secret of the stars
or sailed an uncharted land, or opened a new
doorway for the human spirit”
• “The most beautiful world is always entered through
the imagination”

Entrepreneurship 101
Imagine the possibilities if some of you try
“Dancing in the Gap”….
MaRS circa 2010

The Theramer™ Company
Michael H. May
416-977-6363
may@rimontherapeutics.com