Proteus Investor Presentation (2012)


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Proteus Investor Presentation (2012)

  1. 1. Proteus Venture PartnersTransforming Healthcare through RegenerativeMedicineJune 2009
  2. 2. Fund Summary Regenerative Medicine  World Class Team Fund − Core team with complementary skills − Deep domain expertise − Global reach − Outstanding SAB & strategic partners − Stage agnostic − Industry leadership − Top tier venture returns − 1st mover advantage  Disciplined Investment Approach Technology Focus − Cell Therapies − Proprietary deal flow − Rigorous due diligence − Regenerative Compounds − Build value thru active management − Tissue Engineering − Timely exits − Tools & Enabling Devices − Aesthetic Medicine  Target Investments Addressing Large Markets − Outstanding technology & team − Defensible IP − Large unmet medical needs − Viable business model − Aging population − Near term path to clinic or revenues CONFIDENTIAL 2
  3. 3. The Promise of Regenerative Medicine (Select Examples) Restricted Glial Cells for Remyelination*  Untreated  Transplant – 1 Year Later Paralyzed Rat Paralyzed Rat Walks *Source: Steve (double click to see video) (double click to see video) Goldman, RochesterTo Regenerate Heart Muscle To Grow & Replace Entire Organs Heal Acute Spinal Cord Injury To Beating Cardiomyocytes •(double click to see) Geron receives FDA go ahead to initiate Tissue Engineered ESC therapy in clinical trials Jan 23, 2009 Urinary Bladder CONFIDENTIAL 3
  4. 4. AgendaI. Proteus TeamII. Proteus Coverage of Regenerative MedicineIII. Why Invest in Regenerative Medicine Now?IV. Proteus Investment StrategyV. Summary and Next Steps CONFIDENTIAL 4
  5. 5. Proteus Team and Network ofRelationships1. Specialized Set of Skills2. Industry Leadership3. Worldwide Network / Discovery Relationships4. Result: Early Access to Best Innovation, IP & Scientists
  6. 6. Proteus’ Team
  7. 7. Team Built to Succeed in RM Technology Team Alan, PhD Science / Finance Asma, PhD Technology Business Team Chris, FRCS, PhD Daniel, MD Greg, JD Fayad, MD Jeff, MBA Leonide, PhD Ward, PhD, MBA Melissa, PhD Regulatory Operations Susan, FRCS, PhD Science / Regulatory Operations Finance Technology  Extensive Board &  Builders of value  Close and regular ties to management  Broad expertise In RM regulatory agencies Deep knowledge of experience  valuations, business Conducted pioneering Thorough knowledge of  Understand RM models and deal research FDA and EMEA commercialization structures regulations Deep ties to academia strategies & biz models   Structured many Nuanced understanding  Command of IP successful exits: M&A, of clinical trial design landscape IPO, Partnerships within the context of RM
  8. 8. Proteus Team: Senior Partners Gregory A. Bonfiglio, Managing Partner  Senior Partners have 50+ - Early Investor in Regenerative Medicine - Senior Partner at Anthem Venture Partners years of venture capital, - Stellar track record: Top 5% Returns operating and financial - Senior Partner - Morrison & Foerster advisory experience - Adjunct Professor - Stanford Law School - RM Industry Leader: Frequent Speaker  Strong operational and - ISSCR Industry & ISCT Commercialization Committees entrepreneurial DNA - Served on Numerous Boards  Complementary skill sets  Collaborative approach Jeffrey S. Karan, Senior Partner  Long-standing interpersonal relationship - 25+ yrs building value in companies - 12 years with Morgan Stanley & Goldman Sachs  Deep network with RM - Managed Over $5B of equity, debt, and M&A deals community, companies - Managing Partner of Woodside Capital Partners and scientists - Extensive experience raising capital, aggregating assets, and negotiating partnerships - Structured numerous IPO and M&A Transactions - Dartmouth, BA; Tuck, MBA, Edward Tuck Scholar CONFIDENTIAL 8
  9. 9. Senior Scientific Advisors  Chris Mason, MBBS, PhD, FRCS − Director, Regenerative Medicine & Stem Cell Bioprocessing Unit, UCL − Fellow of the Royal College of Surgeons of England − PhD in Stem Cell/Tissue Engineering (University College London) − Cofounder of the London Regenerative Medicine Network (LRMN), − Editorial Boards of the journals "Regenerative Medicine" and "Tissue Engineering" − Founder + Member of the Steering Committee for the UK National Stem Cell Network − Founder/Director of Stem Cell Translation Ltd  Alan J. Russell, Ph.D. − Director of the McGowan Institute for Regenerative Medicine, Pittsburgh − Professor of Surgery, UPMC − Professor Chemical Engineering, Bioengineering, and Rehab Sciences & Technology − Executive Director of the Pittsburgh Tissue Engineering Initiative (PTEI) − Director of the National Tissue Engineering Center (NTEC) − Founder of Agentase LLC CONFIDENTIAL 9
  10. 10. Senior Scientific Advisors  Melissa Carpenter, PhD,  Deep knowledge, experience and − 13+ years developing stem cell therapies networks in RM − Leadership positions at CytoTherapeutics (StemCells Inc), Geron, and Novocell  Created innovative − Numerous publications and patents in the stem cell stem cell related IP field − Experience in translating discovery research into  Deep ties to academia regenerative medicine therapies − Experience in developing preclinical development  Access to early deal strategies flow and technology  Extensive clinical work
  11. 11. United States Venture Partners  Deep knowledge, experience and  Daniel Kraft, MD, Venture Partner networks in RM − Stanford and UCSF Faculty Member  Founded stem cell − Pioneering Stem Cell Research based companies − Multiple publications, inventions & patents − Extensive clinical work with stem cell transplantation  Created innovative − Founder & BOD of StemCor: RM Tools Company stem cell related IP − Medical Training at Stanford & Harvard − Boarded Certified in Internal Medicine, Pediatrics,  Deep ties to academia and Hematology/Oncology − Kaufman Fellow  Access to early deal flow and technology  Extensive clinical work  Operational experience, SAB and BOD roles in RM focused companies
  12. 12. International Venture Partners  Fayad A. Dandashi, M.D. (Kingdom of Saudi Arabia) – Founder and CEO of FutureMed, a leading Saudi biotechnology company – Formed the first private Umbilical Cord Blood Bank in KSA – Introduced mesenchymal stem cell banking services in Jeddah – Co-founder and Managing Partner of several specialty medical companies, including: MedLab KSA (diagnostic lab), The Eye Center (ophthalmology center), and Mashafi Group (Secondary Care Hospitals) – M.D. by training with strong business and entrepreneurial experience  Dr. Susan ML Lim, FRCS, Ph.D. (Singapore) – Chairman, Susan Lim Surgery & Group of Practice, Consultant General Surgeon, Transplant Surgeon – Chairman & CEO, Stem Cell Technologies focused on human adult progenitor cells derived predominantly from adipose tissue – MBBS (Hons 1 Monash University); PhD (Cantab), FRCS (Edinburgh, Gold Medal); FRCS (Glasgow); M.Med Surg (Singapore), FACS,FAMS, HonMD (New Castle), Visiting Professor to the Institute of Cell & Molecular Sciences, Barts & University of London, Queen Mary College  Asma Ibrahim Al Asad, B.S. (UAE) – Business Development Manager, Dubai Cord Blood & Research Center (DCRC) – Project Manager, Dubai Cord Blood & Research Center (DCRC) – Chief Lab Technologist, Hematology Department, Department of Health & Medical Services – Co-founder of DCRC, the 1st UAE mixed (public & private) cord blood bank , 1st of its kind in the Middle East. – Engaged with Bone Marrow Donor registries worldwide CONFIDENTIAL 12
  13. 13. Proteus Advisory Board & Key AcademicRelationships Tony Atala, MD Tissue Engineering; Director RM Inst, Wake Forest Jacqui Brandwynne, MBA Aesthetic Medicine; Yardley; Citicorp; Neutrogena Gordon Keller, PhD ESC Biology & In Vitro Tools; Dir of RM, Univ. of Toronto Arnold Kriegstein, MD, PhD Neural Stem Cells: Dir. UCSF Dev Bio & Stem Cell Program Robert Lanza, MD ESC Biology & Therapy; VP. R&D of ACT Michael Longaker, MD, MBA RM; Director- Stanford Institute of Regenerative Med Malcolm Moore, PhD Cell Therapy; Memorial Sloan Kettering, Inventor of Neupogen Gail Naughton, PhD, MBA Business; Dean San Diego State B-School; Founder of ATS Julia Polak, MD, DSc Tissue Engineering; Imperial College London Brock Reeve, MBA Executive Director, Harvard Stem Cell Institute Wolf Reik, PhD Epigenetics & Tools; Babraham Institute, UK Myron Spector, PhD Key Academic Relationships: Tissue Engineering; Orthopedics Research, Brigham & Harvard, Stanford, MIT, University of Wisconsin, UCSF, UPMC, WakeHarvard Medical School Womens Hospital; Prof. at Forest, & MIT Columbia, Univ. of Toronto, Burnham Institute, U Washington, MD Anderson, UCL, Oxford, Imperial College, King’s College London, Cambridge (England), Singapore MIT Alliance CONFIDENTIAL 13
  14. 14. Proteus’ Coverage of RM1. All Major RM Platforms2. Across Medical Indications3. Access Best Teams, IP & Innovations at Earliest Stage from around the World
  15. 15. Regenerative Medicine is TransformingHealthcare CONFIDENTIAL 15
  16. 16. RM Is A Broad Field: 5 Key Sectors (SelectedApplications) Cell Therapies Tissue Engineering  Heart Disease  Organ Replacement  Diabetes  Tissue Regrowth  Vision Disorders  Bone & Cartilage  Neurological Disorders  Wound Healing Regenerative Compounds  Compounds that trigger endogenous regeneration  Anemia  Advanced Wound Healing  Advanced Fracture Healing Aesthetic Medicine Tools & Devices  Dermal Fillers  Delivery Devices  Hair Restoration  Cells Assays for DD&D  Anti-Aging/Anti-Wrinkle  Predictive Toxicology Tooth Regeneration  Bioinformatics CONFIDENTIAL 16
  17. 17. Breadth of RM Products In Development Vascular Wound Blood 3% 3% 3% Urinary Cancer 2% 8% Skin 17% Cardiac 12% Respiratory 1% Periodontal Diabetes 1% 10% Eye 2% Orthopedic Gastrointestinal 23% 1% Neural Liver 10% 3% Muscle 1% Proteus’ database covers 700+ RM products in development CONFIDENTIAL 17
  18. 18. Applications of Regenerative Medicine Cardiovascular diseasesCancer and ex: Theregen (cell based patch to promote small blood vessels in heart muscle), CytograftHematologic diseases (dialysis shunt / coronary artery bypass graft),ex: Cellerant – Neutrapenia; Cytori (adipose stem cells)Fate Therapeutics – firstproducts likely to be in cancer;G-CSF (Neupogen and the Orthopedic diseasesnewer Neulasta) ex: BMP – Infuse; CellCoTec (autologous cartilage), Genzyme - Carticel™ for cartilage repair; Tigenix (biopsy RM treatments & implant); cover large markets of ISTO - cells & scaffold unmet medical needsCentral Nervous with aim of curing vs.System treating diseasesEx: Geron – spinal cord;Q-Therapeutics -demyelinating diseases;California Stem Cell –motor neuronal diseases;ACT - macular degeneration Diabetes ex: Novocell- encapsulated islet cells; BetaCell – encapsulated xenograft; diabetic complications: Stratatech for diabetic foot ulcers
  19. 19. Regenerative Compounds: already 50% of BiotechSales Biotech Sales (2006) – Cytokines (Some Regenerative Interferons and Interleukins Compounds on Right (Avonex, Rebit, Betaseron) 9% Half Human Growth Hormones (Except insulin) 2% $3.4b $0.8b Other Biotech (monoclonal antibodies, insulin, other) 52% Blood Growth Factors (led $14.1b by CSF, EPO, derivatives) $21b 35% $0.8b Tissue Growth Factors (BMPs mostly, neurotrophic GF, wound healing GF) 2% Expected CAGR: 15-20% Source: Frost & Sullivan and Aggarwal, Nature 2007
  20. 20. Why Invest in Regenerative MedicineNow?1. Technology is Maturing After 30 Years of Development2. Addressable Market is Enormous and Growing3. Big Pharma is Very Active
  21. 21. Why the Time to Invest is NowTechnology Push Market Pull RM is Maturing after Healthcare Spend is 17% of US 40 Years of GDP Heading Towards 23% Development  Research programs  Demographics: aging proliferating: 80+ 400+ Companies populations  Technology maturing  Large unmet medical  Clinical activity needs accelerating (800+ FDA  Pharma pipeline trials) diminishing  Increased Government  Public markets receptive Funding The Market is at a Crucial Inflection Point CONFIDENTIAL 21
  22. 22. Development of RegenerativeMedicineCurrent technologies build on 40 years of research 1960s 1970s 1980s 1990s 2000s 1973 – First 2001 – unrelated 1997 – Dolly the RhBMP-7 1963 – Mouse bone marrow 1981 – Mouse 1993 – ViaCell approved Sheep cloned ASCs isolated transplant ESCs isolated Begins Banking Late 1990’s – Cord Blood Multiple FDA Dermagraft - FDA Approvals Approval 2001 1986 – First Carticel 1968 – ALL Mouse Cloned (1997) patient Apligraf irradiated, 2005 Use of 1990 – Geron (1999) infused with unrelated cord identical twin Founded blood in BMT BMT 1998 – 2006 – Human hESCs ESCs produced isolated w/out harming the embryo Source: Company websites, NIH, Pubmed CONFIDENTIAL 22
  23. 23. Technology Push: Beginning the 2nd Half of the Gartner CurveVisibility Peak of Inflated Trough of Slope of Plateau of Expectations Disillusionment Enlightment Productivity 2001: 3300 jobs, 73 firms, mkt cap > $2.5B 2000 Time Magazine: 2001 Ortec FDA approved TE No. 1 job 2001 TE blood vessel enters clinic 2001 Dermagraft FDA approved 2002 ISSCR founded 1999 Intercytex founded 1999 TE bladders in clinic 1999 First TE product FDA 2001 Bush “partial ban” on HESCs approved (Apligraf) 2003 UK Stem Cell Bank set up 1998 Plan to build human heart in 10 years 2005 CIRM founded 1998 Human ESCs first derived 2006 Carticel - 10,000 patients 1997 Dolly the sheep 2006 hESCs derived without harming embryo 1997 First cell therapy 2006 Batten’s Disease trial FDA approved (Carticel) 2006 Reneuron file IND for stroke trial 2007 Apligraf - 200,000 patient therapies 1992 Geron 2007 Human iPSCs Derived founded 2007 Intercytex start Phase 3 ICX-PRO 1988 SyStemix founded 2007 1.2M+ Patients Treated 2007 $1.5B RM Product Revenues 1986 ATS & Organogenesis founded 2007 800 FDA Clinical Trials Ongoing 1985 Term “TE” coined 2007 50 Public Companies: $4.7B Mrkt Cap 2002 ATS + Organogenesis file 1980 Early TE research (MIT) Chapter 11 Technology Trigger Time Stage of Development CONFIDENTIAL 23
  24. 24. Public Markets Are Rewarding Clinical Progress Company Product / Stage Market Revenue Mkt Cap (as of 12/31/07) / M &AAnorMED Mozobil, Phase III Hematopoietic stem cell < $1M Acquisition by Genzyme: transplantation $580M (10/2006)Cell Genesys GVAX Cancer Leukemia $1M $190M(CEGE:NASDAQ) Immunotherapy / Phase III Pancreatic Cancer Prostate CancerDendreon Provenge;:FDA review Cellular immunotherapy, < $1M $530M(DNDN:NASDAQ) (prostrate cancer) monoclonal antibody, and Neuvenge: Ph I (breast, small molecule product ovarian, colon cancer) candidates to treat various cancersGeron Filing IND for spinal cord treatment of cancer,spinal < $4M $440M(GERN:NASDAQ) early 2008 cord injury, heart failure, diabetes, and HIV/AIDSIntercytex ICX-PRO, Ph III – in Ph III Stimulate active repair in < $1M $75M(ICX.L:LSE/AIM) for VLUs & Ph II for chronic wounds DFUsVAVELTA® , Ph II Facial rejuvenation ICX-TRC, Ph II Hair regenerationLifeCell AlloDerm ; GraftJacket; Tissue-based prods for $166M $1.4B(LIFC:NASDAQ) AlloCraft reconstructive, orthopedic, and urogynecologic surgical proceduresOsiris (OSIR:NASDAQ) Prochymal, Ph III & II GVHD & Crohn’s Disease $10M $410M Provacel, a phase I Acute MIViaCell UC storage Collecting and preserving $59M Acquisition by Perkin Elmer Pre-clinical work in cancer, stem cells from umbilical $300M 10/07 – 52% cardiac & diabetes cord blood premium) CONFIDENTIAL 24
  25. 25. Big Pharma Faces Tidal Wave of Patent Expirations Patent FDA Sales 3Q Brand Name Company Generic Name Indication Expiration Approval 2007 ($MM)Actos Eli Lilly / Takeda Pioglitazone Type 2 diabetes 2011 1999 $180Advair/Seretide GlaxoSmithKline Fluticasone Asthma 2010 1998/1999 $1,721 Sanofi-Aventis / Bristol-MyersAprovel Squibb Irbesartan Hypertension 2011 1998 $392Aricept Pfizer / Eisai Donepezil HCI Alzheimer’s 2010 1996 $100Avandia GlaxoSmithKline Rosiglitazone Type 2 diabetes 2012 1999 $463Cozaar Merck Losartan Hypertension 2010 1995 $814Crestor AstraZeneca Rosuvastatin Cholesterol 2012 2003 $691Diovan/Co- Valsartan+hydroc Hypertension (highDiovan Novartis hlorothiazide blood pressure) 2012 1996 $1,267Levaquin Johnson & Johnson Levofloxacin Antibiotic 2010 1996 $366Lipitor Pfizer Atorvastatin Cholesterol 2011* 1996 $3,170 Sanofi-Aventis / Bristol-MyersPlavix Squibb Clopidogrel Anticoagulant 2011 1998 $1,250Seroquel AstraZeneca Quetiapine Antipsychotic 2011 1997 $1,055Singulair Merck Montelukast Asthma 2012 1998 $1,018 BudesonideSymbicort AstraZeneca /Formoterol Asthma 2012 2000 $371Taxotere Sanofi-Aventis Docetaxel Cancer 2010 1995 $694Xalatan Pfizer Latanaprost Glaucoma 2011 1995 $402Zometa Novartis Zoledronic acid Cancer 2012 2001 $318 * Estimate – Sources: Datamonitor; Dolphin; research
  26. 26. Big Pharma is Actively Engaged •Merck, Pfizer & Lily Launch• GSK & HSCI: $25M Deal Enlight BioScience •GSK, AZN & Roche Help•Pfizer Forms Launch Stem Cells for SaferRegenerative Medicine Medicine in UKDivision •Johnson & Johnson Invests in Tengion & NovoCell CONFIDENTIAL 26
  27. 27. Proteus’ Investment Strategy1. Substantial Proprietary Deal Flow2. Rigorous Due Diligence Process3. Build Value through Active Management4. Timely Exits
  28. 28. Investment Process Overview Proteus’ systematic approach leads to…1. Proprietary Industry Leadership, Proprietary Identify Best Deal Flow Extensive Network Databases Opportunities Initial Screen & Structure Deal to1. Due Diligence and Primary Due Deep Due Maximize Returns Deal Structuring Diligence Diligence & Minimize Risk Build Team &1. Build Company Value Construct Optimal Drive Execution & Structure Exit and Maximize Exits Manage Risk to Maximize Value Biz Model Proteus Value Add …greater value for our portfolio companies and higher returns for our LPs CONFIDENTIAL 28
  29. 29. Proteus Investment Approach: Deal Flow Due Diligence Build Value Competitive Size of Land- Market scapeTop Down EXTERNAL ECOSYSTEM OPTIONS TO ENHANCE ANALYSIS VALUE Strategy BUILDCompany Proprietary COMPANSelection Data Bases Y VALUE! Bottom Up INTERNAL COMPANY DRIVERS OF VALUE Strategy ANALYSIS CONFIDENTIAL 29
  30. 30. Optimal Exit At Phase II On Risk AdjustedNPV PHASE II EXIT STRATEGY 7FMV / Cost of Total Compounds in Phase 22,000 31 months FMV of Compounds ($M) 18,700 Total Cost of Development 11 18,000 26 months 14,000 12,214 10,000 No. of 22 months 31 Compounds: 100 57 6,000 18 months 4,453 2,458 2,000 1,399 865 988 520 738 -2,000 Entering Late-Stage Entering Phase I Entering Phase II Entering Phase III Entering Launch Pre-Clinical Ind. Period ROI*: 19% 23% 112% 25% Cumulative ROI**: 19% 39% 180% 208% Phase of Development FMV = ~5x peak year revenues of $500M discounted by probability of Source: ADIS, Pharma Projects, Fortis Bank, Paraexel, Jagle, Lehman Brothers, launching Journal of Health Economics 22:151-185 (2003), TFG Estimates CONFIDENTIAL 30
  31. 31. Summary of Proteus Value Proposition RM Technologies Are Transforming Healthcare − Science moving at an extraordinarily rapid pace − Technologies at a key inflection point − Large and growing markets driven by demographics Only VC Firm Built From Ground Up To Focus Exclusively On RM − Complementary skills address all the major challenges to commercialization − Unparalleled domain expertise − Proven records of success − Established RM industry leadership − Fund already has a robust pipeline − 1st mover advantage (critical for IP, Freedom to Operate, knowledge base, best teams & deals) Superior Investment Strategy − Substantial Proprietary Deal Flow − Rigorous, Comprehensive Due Diligence Process − Build Value thru Active Management − Develop Big Pharma Relationships from the Earliest Stages − Timely Exits CONFIDENTIAL 31
  32. 32. Proteus Team & Friends