Michael H. May PhD President and Co-Founder Science and Business Do Mix Entrepreneurship 101, MaRS, Nov 28 th , 2007

“ The beginning of awe is wonder and the beginning of wisdom is awe” Rabbi Abraham Joshua Heschel Wonder Awe Wisdom Why a Scientist/Entrepreneur

“ The beginning of awe is wonder and the beginning of wisdom is awe”

Rabbi Abraham Joshua Heschel

Modest beginnings… Key Messages: Entrepreneurial interest was sparked by awe of science I did my PhD to start a company Rimon started from a single experimental observation The Theramer™ Company

Key Messages:

Entrepreneurial interest was sparked by awe of science

I did my PhD to start a company

Rimon started from a single experimental observation

Modest beginnings… Key Messages: Entrepreneurial interest was sparked by awe of science I did my PhD to start a company Rimon started from a single experimental observation The Theramer™ Company

Key Messages:

Entrepreneurial interest was sparked by awe of science

I did my PhD to start a company

Rimon started from a single experimental observation

Motivation “ I have been doing research for 30 years and this is the first time that something I have worked on is being tested on humans” Professor. Michael Sefton, Co-Founder - after a long day with the Board on clinical trial design and patient recruitment The Theramer™ Company After 4 weeks of MI-Sorb ™ treatment Prior to treatment with MI-Sorb ™ Dressing

Spun-out of the University of Toronto in 2000 5 core technologies Potential partners engaged for several product concepts 11 patents issued or pending, own rights to all IP Extensive R&D network around local biomaterials centre of excellence Corporate Background The Theramer™ Company

Spun-out of the University of Toronto in 2000

5 core technologies

Potential partners engaged for several product concepts

11 patents issued or pending, own rights to all IP

Extensive R&D network around local biomaterials centre of excellence

The Theramer ™ Company Competitive Advantages: Regulated as devices not drugs Versatile chemistry – broad application Non-biologic, non-eluting Localized activity, no systemic consequences Easy to manufacture The Theramer™ Company Theramers ™ are medical polymers that have inherent biological activity without the incorporation of pharmaceuticals or cells. Core Technologies : MI - MMP inhibition AM - antimicrobial activity Angiogenic – new blood vessel formation ThermaGel ™ - temperature responsive

Competitive Advantages:

Regulated as devices not drugs

Versatile chemistry – broad application

Non-biologic, non-eluting

Localized activity, no systemic consequences

Easy to manufacture

Core Technologies :

MI - MMP inhibition

AM - antimicrobial activity

Angiogenic – new blood vessel formation

ThermaGel ™ - temperature responsive

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

Corporate Feasibility Licensing Revenue Stent Restenosis Catheter Infection Research Partners Joint Disease New Polymer Design Product Focus Pre-Clinical Validation Clinical Validation Eye Disorders Chronic Skin Wounds Rimon In-house Theramer Product #2 H22007 Strategic Partnership Product Pipeline Market sizes: all large markets with substantial segments The Theramer™ Company

Key Features: Inhibits MMPs Easy to apply and remove Absorbent Non-adherent Non-toxic, non-sensitizing, non-irritating, non-hemolytic MI-Sorb ™ Dressing The Theramer™ Company

Key Features:

Inhibits MMPs

Easy to apply and remove

Absorbent

Non-adherent

Non-toxic, non-sensitizing, non-irritating, non-hemolytic

Overall Objective: Demonstrate MI-Sorb ™ Dressing safety and efficacy RIM001 Clinical Trial A B C D RIM001 is a randomized, multi-centre pilot study Outcomes: Recorded Adverse Events Wound MMP Activity Change in wound bed appearance and wound size Wound Types: A. Venous Stasis Ulcers (VSU) B. Diabetic Ulcers (DU) C. Pressure Sores (PS) D. Miscellaneous Wounds (Misc) The Theramer™ Company

Overall Objective:

Demonstrate MI-Sorb ™ Dressing safety and efficacy

Outcomes:

Recorded Adverse Events

Wound MMP Activity

Change in wound bed appearance and wound size

Wound Types:

A. Venous Stasis Ulcers (VSU)

B. Diabetic Ulcers (DU)

C. Pressure Sores (PS)

D. Miscellaneous Wounds (Misc)

Grouped MMP analysis: Significant treatment effect compared to baseline (from week 4 onwards) MI-Sorb ™ Efficacy Pooling by treatment regime: Significant reduction in active MMP fraction with MI-Sorb ™ vs. control treatment The Theramer™ Company Aim to be “Best in Class” in a new approach to move chronic wounds towards a healing pathway

Grouped MMP analysis:

Significant treatment effect compared to baseline

(from week 4 onwards)

Pooling by treatment regime:

Significant reduction in active MMP fraction with MI-Sorb ™ vs. control treatment

MI-Sorb ™ Efficacy Baseline After 4 weeks of MI-Sorb TM Treatment Migrating, less friable wound edges; pink and firm granulation tissue Reduced MMP-2 staining (brown) Organised collagen (blue); little fibrin (red); reduced cellularity MMP-2 Masson’s MMP-2 Masson’s

MI-Sorb ™ Commercialization Next Steps: Leverage data into additional applications and next round of financing ISO 13485 certification CE Mark, 510k Commercial manufacturing Marketing and distribution The Theramer™ Company

Next Steps:

Leverage data into additional applications and next round of financing

ISO 13485 certification

CE Mark, 510k

Commercial manufacturing

Marketing and distribution

Some Important Success Factors The Theramer™ Company

Some Important Success Factors Key Corporate Values: Recognize Opportunity Keep it Simple Be Persistent Focus on Execution The Theramer™ Company

Key Corporate Values:

Recognize Opportunity

Keep it Simple

Be Persistent

Focus on Execution

Opportunity in the Unexpected The Theramer™ Company

Opportunity in the Unexpected Key Messages: Rimon was founded on a serendipitous observation Many of our most valuable results came from unplanned observations Innovation = something unexpected with value The Theramer™ Company

Key Messages:

Rimon was founded on a serendipitous observation

Many of our most valuable results came from unplanned observations

Innovation = something unexpected with value

Simple is Best The Theramer™ Company

Simple is Best Key Messages: Simple is easier to defend and validate Simple is time efficient Simple is much easier to sell But, it is hard to be simple The Theramer™ Company

Key Messages:

Simple is easier to defend and validate

Simple is time efficient

Simple is much easier to sell

But, it is hard to be simple

There is Always a Way Key Messages: Survival is an achievement We have been most innovative when “our backs were to the wall” Persistence and endurance build credibility The Theramer™ Company

Key Messages:

Survival is an achievement

We have been most innovative when “our backs were to the wall”

Persistence and endurance build credibility

VSU- Control VSU- MI-Sorb ™ MI-Sorb ™ Efficacy Patient-Based MMP Analysis : Examines MI-Sorb ™ efficacy on a wound-by-wound basis Decreased MMP activity relative to underlying inflammation Increased MMP activity relative to underlying inflammation MI-Sorb™ reduces the active MMP fraction relative to underlying inflammation > The Theramer™ Company

Patient-Based MMP Analysis :

Examines MI-Sorb ™ efficacy on a wound-by-wound basis

Execute, Execute, Execute The Theramer™ Company

Execute, Execute, Execute Key Messages: Under promise and over achieve Create back-up plans for what is out of your control Achievements bring validation and credibility The Theramer™ Company

Key Messages:

Under promise and over achieve

Create back-up plans for what is out of your control

Achievements bring validation and credibility

$ time High Risk of Failure (“Pit of Hell”) 1 in 3000 Execution = Risk Mitigation Value = Next Financing Risk Mitigation =Value Creation F1 F2 F3 Profile of an R&D Start-up The Theramer™ Company

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 The Value of an Idea The Theramer™ Company

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

Corporate Feasibility Licensing Revenue Research Partners Polymer Design Product Focus Pre-Clinical Validation Clinical Validation Rimon In-house Strategic Partnership Execution Mitigates Risk p< 80% p< 80% p< 10% p< 33% p< 10% IP Protection Freedom to Operate Scale-up Manufacturing Regulatory Re-imbursement POC Material Development POA Material Development POP Material Development p< 25% p< 50% p< 80% p< 60% p< 33% The Theramer™ Company Overall probability of success is very low!

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% Mitigating Risk Enhances Value The Theramer™ Company $ time

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%

OCE MaRS Two key features of a small-world network: Strong close links built on trust (e.g., research collaborators, service providers) A few links that are connected widely (e.g., directors, world-renowned scientists) Me, Myself and My Network The Theramer™ Company

Two key features of a small-world network:

Strong close links built on trust (e.g., research collaborators, service providers)

A few links that are connected widely (e.g., directors, world-renowned scientists)

Overlap technical network basic science into ideas ideas into technologies technologies into products products into a company Expand network shareholder, customers Strengthen network Flow of information, resources, $, products Build network towards a “tipping point” High Tech Entrepreneurship The Theramer™ Company

Overlap technical network

basic science into ideas

ideas into technologies

technologies into products

products into a company

Expand network

shareholder, customers

Strengthen network

Flow of information, resources, $, products

Take care of the hard science first Championing a start-up is a full-time job Early-stage start-ups are an intense learning environment Focus first on the people that will help build and strengthen your network (e.g., lawyers, accountants) Practise communicating/negotiating Develop a thick skin Be bold – graduate student entrepreneurs are an untapped, coachable source of entrepreneurs Just get going! Final Thoughts The Theramer™ Company

Take care of the hard science first

Championing a start-up is a full-time job

Early-stage start-ups are an intense learning environment

Focus first on the people that will help build and strengthen your network (e.g., lawyers, accountants)

Practise communicating/negotiating

Develop a thick skin

Be bold – graduate student entrepreneurs are an untapped, coachable source of entrepreneurs

Just get going!

“No pessimist ever discovered the secret of the stars or sailed an uncharted land, or opened a new doorway for the human spirit...Life is either a daring adventure or nothing” Helen Keller Thank You! The Theramer™ Company

“No pessimist ever discovered the secret of the stars or sailed an uncharted land, or opened a new doorway for the human spirit...Life is either a daring adventure or nothing”

Helen Keller