Investing in High-Impact Gazelles that Drive Outsized Returns & Social Impact

Investing inHigh-Impact Gazelles thatDriveOutsizedReturns & SocialImpact
Confidential & Proprietary the Center for Advancing Innovation and Gazelle Futures - Do Not Distribute without Permission
Gazelle
Proven
Capital
Efficient
Inventions
Startup
Catalyst
Seasoned
Management

2
BACKGROUND

3
The Problem: identifying the
best inventions and furthering R&D
Licensed
Move to translational research
More funding in lab; science continues
No funding in lab to continue
Withdrawn/terminated license
Terminated by inventor
Federally

Funded

Research
Invention

Disclosed
and

Potentially

Patented
Product
Translational

Research,<.1%
Inability
to
Find

and
Fund

Promising

Inventions
Prepared for LES- Confidential & Proprietary the Center for Advancing Innovation and Gazelle Futures - Do Not Distribute without Permission

4
Opportunity:
• 6% inventions -> $500B to $1.5T GDP Impact
• 80-95% Failure Rate
Unique Challenge-Accelerator given IP & Talent Access:
• Derisked IP: 21 agreements across NASA, NIH, NCI,
CDC, etc
• Talent: 85+ Serial Entrepreneurs, Industry, etc.
Evolution:
• Derisked IP: More Federal Labs
• Disrupting the Venture architecture norms
Sieze the OPPORTUNITY
Commercialization Strategy
Startups & Industry
Due Diligence – Selecting Investments
& Technologies
Select the Best Federally Funded Inventions
Maximize Commercial Potential
Operators & Management Talent
Center
for
Advancing

Innovation—Mission

5
Identify Challenge
Planning
Startup teams paired with
world-class, seasoned exec
level industry experts
Mentorship
Invention
Selection
Tailored
Training
Curriculum
Business Plan and
Live Pitch
Enter Multi-
Disciplinary
Teams
2 minute video with
executive summary
Elevator Speech Winners and
Finalists Selected
CAI’s Challenge-Accelerator
10 commercially viableinventions
Form Team and
Select Invention
Letter of Intent – form teams
Elevator Speech
Business Plan & Startup Launch
License & raise seed funding
12 Month Intensive & Disciplined Accelerator Training
500-1000 in multi-
disciplinaryteams
Partnership
And Licensing
Agreements
STARTUPS

6
01
BREAST CANCER
CHALLENGE
11 STARTUPS
02
SCALE CHALLENGE MODEL 2X
NEURO STARTUP CHALLENGE
22 STARTUPS
03
NANOTECH CANCER
CHALLENGE
13 STARTUPS
04
EXTEND TO THE
NASA SPACE RACE
15-20 STARTUPS
06
COMMERCIALIZE TOP
1% OF INVENTIONS
05BOLT ON FUND
Startup Challenge Journey

7
A Few of Breast Cancer & Neuro Successes
COMPANY PROGRESS VALUATION
Powerful cancer therapies
• Won MassBIO, MassChallenge & Rice
• 20 agreements with Pharma & Academia
• Thiel Fellowship, Avon Foundation Grant, CASIS Grant, UK
Horizon 2020 Program, Forbes 30 under 30, TEDMED
Presentation
• Exclusive License to NIH invention
$20MM
Batten’s disease therapy
• OxBridge/SR One OneStart Semi-Finalist
• Received orphan drug indication (FDA)
• Expertise in medicine, toxicology (INDS), regulatory affairs
(RareMoon Consulting)
• Recruited VP Chemistry, Merck Veteran
• Exclusive Evaluation License to NIH invention
$5MM
Cancer diagnostic
• “Best Pitch”, Healthcare Innovation Pitch event (sponsored by
Bridge to Cures, Inc)
• Finalist, Wisconsin Governor’s Business Plan Competition; WI
Innovation Award (‘16)
• Proof of Concept: Human (Completed)
• Exclusive Evaluation License with the NIH
$20MM
First sale 2017

8
SPACE RACE Challenge - Novel Deal Flow
Example De-Risked, Capital Efficient NASA Robotics Invention
Overview:
Rugged,
lightweight, small,
autonomous robot
excavator used in
sites such as
RASSOR Robotic Excavator
high-risk or inaccessible mining, search and
rescue, as well as disaster response
applications
Only invention to exploit extraplanetary
mining industry; $200B to $1T of value in
just one asteroid
Portfolio of 24K+ inventions: 100+ commercially viable
inventions space inventions; 300+ precision medicine
Expanding portfolio to include patents and inventions
from DoD, DoE, DARPA, Navy and other agencies
Opportunity: develop world-changing technologies,
create new industries and ecosystems, drive outsized
growth and returns

9
New Model for Venture Philanthropy
with outsized returns
Spun out 33 Companies from NIH;
1200+ Jobs Created; 19
Agreements with NIH and NASA
Prestigious Awards & Recognition HHS,
NASA, White House, Wired, Nature,
Huffington Post, CBS etc.
Challenge
Accelerators
Since
2012

10
Healthy Cell Cancer Cell
No Effect Azonafide
Kills Cell

11
§ Winner of Breast Cancer Startup Challenge by the National Cancer
Institute (NCI)
§ Awarded grants from Avon Foundation for Women, NASA/Center
for the Advancement of Science in Space (CASIS), and the Horizon
2020 Program (UK)
§ Winner of MassChallenge & MassBio 2014 Startup Accelerators
§ Winner of the Rice Business Plan Competition
§ Raised seed financing, currently raising a bridge round
§ Partnered with 14 pharma partners all over the world
§ Partnered with 6 academic labs all over the world
§ Offices in Boston and London
§ Closed Startup Exclusive Option License Agreement with the NCI
§ Showcases: TEDMED, World ADC Summit, Engage Forum Tokyo,
Protein & Antibody Engineering Summit (Shanghai & Boston ’15)
Team Progress

MedImmune
Reg Seeto, VP, Head of Partnering & Strategy
2016 BIO International Convention June 2016

MedImmune: A Brief Overview
GLOBAL BIOLOGICS
RESEARCH AND
DEVELOPMENT ARM OF
2,500
EMPLOYEES IN THE
US AND UK
California Gaithersburg Cambridge
ROBUST PIPELINE OF 120+ BIOLOGICS
IN RESEARCH & DEVELOPMENT WITH
40+ PROJECTS IN CLINICAL STAGE
DEVELOPMENT
2

Therapeutic Areas of Focus
14
BIOLOGICS SMALL MOLECULES IMMUNOTHERAPIES
PROTEIN
ENGINEERING
DEVICES
ONCOLOGY
RESPIRATORY,
INFLAMMATION AND
AUTOIMMUNITY
CARDIOVASCULAR
AND METABOLIC
DISEASE
INFECTIOUS
DISEASE NEUROSCIENCE
CORE TAS OPPORTUNITY-DRIVEN

MedImmune R&D Pipeline
PHASE 1 PHASE 2 PIVOTAL/PHASE 3PHASE 2
15
MEDI-565
Solid Tumors
MEDI0562
Solid Tumors
MEDI0639
Solid Tumors
MEDI-551
Diffuse B-Cell Lymphoma
MEDI-573
Metastatic
Breast Cancer
Durvalumab
Stage III Non-Small Cell
Lung Cancer
Durvalumab
3rd
Line NSCLC
(PD-L1+)
MEDI0680
Solid Tumors
MEDI6383
Solid Tumors
Durvalumab +
Tremelimumab
Solid Tumors
MEDI3617
Solid Tumors
MEDI7836
Asthma
MEDI4166
Diabetes/Cardiovascular
MEDI8852
Influenza A Treatment
MEDI9447
Solid Tumors
Durvalumab +
MEDI0680
Solid Tumors
Durvalumab + AZD9291
Advanced EGFRm Non-
Small Cell Lung Cancer
MEDI4920
Primary Sjögren’sSyndrome
MEDI0382
Diabetes/Obesity
MEDI-550
Pandemic Influenza
Prophylaxis
MEDI1814
Alzheimer’s Disease
Durvalumab
Solid Tumors
MEDI-551 + Rituximab
Hematological Malignancies
Durvalumab +
MEDI6383
Solid Tumors
MEDI5872
Systemic Lupus Erythematosus
MEDI6012
Acute Coronary Syndrome
MEDI3902
Prevention of Nosocomial
Pseudomonas Pneumonia
Durvalumab
Solid Tumors
Squamous Cell Carcinoma of
the Head and Neck
MEDI-551
Neuromyelitis Optica
Anifrolumab
Lupus Nephritis
MEDI9929
Asthma
Tralokinumab
Atopic Dermatitis
MEDI7510
Prevention of RSV
in Older Adults
Squamous Cell Carcinoma of
the Head and Neck
Durvalumab +
Tremelimumab
Gastric Cancer
MEDI2070
Crohn’s Disease
Abrilumab
Crohn's Disease /
Ulcerative Colitis
Mavrilimumab
Rheumatoid Arthritis
MEDI4893
Pneumonia / S. aureus
MEDI8897
Passive RSV Prophylaxis
Durvalumab
2nd
Line SCCHN
Tremelimumab
Mesothelioma
Durvalumab +
Tremelimumab
3rd
Line NSCLC
Anifrolumab
Systemic Lupus
Erythematosus
Benralizumab
Severe Asthma
Tralokinumab
Severe Asthma
Moxetumomab
Pasudotox
Hairy Cell Leukemia
Durvalmab +
Tremelimumab
1st
Line NSCLC
Benralizumab
COPD
Brodalumab
Psoriasis
ONCOLOGY
RESPIRATORY, INFLAMMATION AND AUTOIMMUNITY (RIA)
CARDIOVASCULAR AND METABOLIC DISEASE (CVMD)
INFECTIOUS DISEASE (ID)
NEUROSCIENCE
Anifrolumab
SubcutaneousSystemic Lupus
Erythematosus
Durvalumab + IRESSA
Non-Small Cell Lung Cancer
MEDI1873
Solid Tumors
Durvalumab+
Dabrafenb+Trametinib
Melanoma
MEDI4276
Solid Tumors
MEDI9197
Solid Tumors
MEDI8111
Trauma/Bleeding
Durvalumab +
tremelimumab
Pancreatic Ductal Carcinoma
Durvalumab +
tremelimumab
2nd Line SSCHN (PD-L1-)
Durvalumab +
tremelimumab
1st Line Bladder Cancer
Durvalumab +
tremelimumab
2nd Line SSCHN
Durvalumab +
tremelimumab
1st Line SSCHN

Partnering and Strategy Group (since 2013): Four Groups
Classic BD
•Licensing (in/ out)
•M&A
•Spinouts/ JVs
Biologics Strategy
•R&D strategy
•All therapeutic areas/ technologies
•Special areas- Asia
2
Collaborations group
•Governments, Universities
• Focus on where we have
geographical presence for ecosystem
building
Government contracting
•US- BARDA/ DARPA
•Others
100 executed deals over the last 3 years

Company
Therapeutic
Area
Asset Deal Type
REVLIMID, POMALYST,
VIDAZA and others
Haematological
collaboration
CD-19 CAR T cell therapy Clinical collaboration
Data analysis technology for
biomarker identification
Acquisition
CRUK novel targets/ MedI
phage library/ Ab engineering
Collaboration
ADXS-HPV cancer vaccine Clinical collaboration
ImmTAC molecules
Preclinical and clinical
collaborations and license
agreement
Antibody Drug Conjugates
Acquisition (Spirogen) /
Collaboration (ADC
Therapeutics)
PBD Outlicense Out-license
PBD Outlicense Out-license
Deal Examples- Oncology
17
Oncology
Oncology
Oncology
Oncology
Oncology
Oncology
Oncology
Oncology
Oncology

Company Therapeutic Area Asset Deal Type
Up to 5 ion channel antigens
for antibody drug discovery
Collaboration
Companion diagnostic test for
asthma drug Tralokinumab
Collaboration
Multiple mAbs
Co-development and
commercialization
agreement
3 projects in diabetes &
obesity
Research collaboration
Biologic for treatment of acute
coronary syndrome
In-license
rhLCAT Acquisition
EEC program
Collaboration and
license
3 targets – half life extension
technology
In-license
Deal Examples- RIA/ CVMD
18
RIA
RIA
CVMD
CVMD
CVMD
RIA
CVMD
CVMD

Examples of Academic Collaboration
19
I N S T I T U T I O N T H E R A P E U T I C A R E A D E S C R I P T I O N
ALL
BPD
ALL
BPD
ALL
ALL
• Joint PhD program supports joint thesis projects
• Novel Entrepreneur-in-Residence program
• Research collaborations in neuro, biopharmaceutical research
• 5 year Collaboration for BPD projects
• First industry sponsor for Catalyst awards
• Call for proposals in MedImmune therapeutic areas
• Additional strategic collaboration in RIA and Translational Science
• Collaborations in formulation science
• Multiple projects with joint steering committee
• Research and education collaborations across 4 campuses
• Jointly funded with UMB and Maryland Dept. of Business and Economic
Development
• Multiple projects with joint steering committee
• 5 year joint Biopharma PhD program to better prepare scientists for
careers in biopharma

Examples of Other Collaborations
20
I N S T I T U T I O N D E S C R I P T I O N
• Joint projects between nearby NIST, MedI campuses
• MedImmune provides monoclonal antibodies, other technology
• Supported by umbrella CRADA agreement
• Public – private partnership in Brazil
• Each institution provides up to $2M over 5 years
• Call for proposals in areas of interest to MedImmune
• Up to 30 Brazilian post-docs spend 2 years at MedImmune
• Jointly funded with Brazilian government
• Joint research in immunotherapy and antibody drug conjugates
• Two umbrella CRADA agreements
T H E R A P E U T I C A R E A
BPD, ADPE
CVMD
ALL
ONCOLOGY
ADPE
• Participation in the Nanotechnology Startup Challenge in Cancer
• New approach to identifying potential BD Opportunities

Benefits of Partnering with The Center for Advancing
Innovation
21
Access to innovations –in this
case nanotechnology from the NIH
database (others e.g. NASA)
New approach for BD esp. focused
on early technologies/ therapeutics
to leverage competition model
Support ecosystem growth of
BioHealth Capital Region with local
placement of companies
Focus on commercialization by
CAI- access to Gazelle Futures
Fund
1
2
3
4

Process and Status
22
Phase 0
Letter of Intent
• 37 Letter of Intent Applications
• 29 Teams Accepted
• 7 Teams from Virginia / Maryland /
DC Region
• 58 Unique Universities
• 510+ Participants
Phase 1
Executive Summary
and Elevator Pitch
• 29 Teams Competing
• 7 Teams from Virginia / Maryland /
DC Region
• 17 Webinars Conducted from
Challenge Advisors
• 1 Assignment
• Deliverables include Executive
Summary and Elevator Pitch
Phase 2
Business Plan and
Live Pitch
•22 Teams Advance to Phase 2
•6 Teams from Virginia / Maryland
/ DC Region
•38 Webinars Conducted
•5 Assignments (1 Completed)
•12 Serial Entrepreneur Mentors
engaged with teams via CAI
MedImmune Interest in Two Inventions

Ø CAI- interaction;; Novel concept and strong collaboration – discussions began in 2015
and willingness to shape model
Ø Innovative model with access to large database of inventions (e.g. NIH and also
future with NASA)
Ø Program focuses on key theme (e.g. nanotechnology) for teams to build around with
input from experts/ mentors
Ø Competition based approach means best teams with best business plans progress
Ø Willingness to have companies form in MD, DC, VA was critical to support project as
we look at building out the regional ecosystem
Summary
23

David Morse
Chief, Technology Partnerships Office
NASA Ames Research Center
June 2016
40 Years of NASA Spinoffs
Bringing NASA Technology Down to Earth
National Aeronautics and Space Administration

Image
courtesy
of
Andreas
Levers,
CC
BY-‐NC-‐ND
2.0

Image
courtesy
of
BirdAir
Inc.

Get your free
copy of Spinoff at
spinoff.nasa.gov

NASA
Patent
Portfolio
Analysis

Bringing
NASA
Technology
Down
to
Earth technology.nasa.gov
Total
Patents

Available
for

Licensing
as
of
Jan.

2016
§759
Issued
§372
Applications
Aeronautics
98
Communications
33
Electrical
and
Electronics
52
Environment
28
Health,
Medicine
and
Biotechnology
60
IT
and
Software
54
Instrumentation
43
Manufacturing
36
Materials
and
Coatings
222
Mechanical
and
Fluid
Systems
60
Optics
66
Power
Generation
and
Storage
34
Propulsion
17
Robotics,
Automation
and
Control
68
Sensors
194

Bringing
NASA
Technology
Down
to
Earth technology.nasa.gov
NASA
Software
Catalog
Aeronautics
30
Autonomous
Systems
25
Business
Systems
and
Project
Management
51
Crew
and
Life
Support
20
Data

Imaging
and
Processing
98
Data
Servers
Processing
and
Handling
65
Design
and
Integration
Tools
120
Electronics
and
Electrical
Power
5
Environmental
Science
(Earth,
Air,
Space,
Exoplanet)
71
Materials
and
Process
5
Operations
90
Propulsion
27
Structures
and
Mechanism
6
System
Testing
61
Vehicle
Management
(Space,Air,Ground)
48
Total
Software

Available
for
Licensing

as
of
Feb.
2016

48
Expanded Challenges Every Year
Category Metric
SPACE RACE
2016
Nano
2016
Neuro
2014-2015
Breast Cancer
2012-2013
Entries &
Teams
Teams
Accepted
54 29 71 46
Winning
Teams
N/A N/A 16 12
Team
Strength
# People 406+ 509+ ~1090+ 460+
University Diversity
72 Unique
Universities
58 Unique
Universities
120+
Universities;
96 Unique
Universities
83 Total; 45
Unique
Universities
Geographic Diversity
24% participating
outside US
27.5%
participating
outside US
19% participating
outside US
20% participating
outside US
Mentors/Judges/Advisors
Not Completed
36
Not Completed
59
147+ 17

49
Startup Challenge Evolution

50
Investing Problems – Deal Flow & IRRs
Annual Venture Capital Fundraising by Primary Geo Focus
2008-2016 (as of May 16, 2016)
Venture Capital Median Net IRRs and Quartile Boundaries
(as of June 30, 2015)
EXITS:
73%
of
tech
companies
that
exited
in

2014
had
not
raised
institutional
funding
(up

from
66%)

51
Investing Problems-Time & Valuations
SOURCE: Private Capital Markets Report,
Pepperdine University, 2016
VALUATIONS:
Multiples
are

higher
than
they
have
been
in

15
years.
Almost

3X
as
many

unicorns
in
2015
as
2013

52
New Paradigm for Investing
CAI & GAZELLE INVESTMENT APPROACH
EVALUATE 50K+ WORKING FED LAB INVENTIONS
DUE DILIGENCE on DERISKED, CAPITALEFFICIENT TECH
WINNING CHALLENGE/ACCELERATOR
CROWDSOURCE 10 TEAMS & BUSINESS PLANS – PICK BEST
LAUNCH NEWCO – OWN 100%EQUITY
NO PRE-MONEY VALUATION & LOWESTCOST/% EQUITY
RUN - GO TO MARKET & COMMERCIALIZE
MAJORITYCONTROL; LIMIT MISTAKES W SEASONEDMENTORS
EXIT – 30-65%IRRS
MAJORITYSHARE THROUGH SERIES B
CURRENT INVESTOR APPROACH
FIND
HUNDREDS OF MEETINGS AND PITCHES
EVALUATE
ONE TEAM WITH IDEA STAGE INVENTIONS
NEGOTITATE MULITLE TERM SHEETS
COMPANYVALUE UNREALISTIC; 7-12MONTHS CLOSE*
HELP - R&D & GO TO MARKET
ROOKY TEAMS; LIMITED ABILITYTO ADJUST TEAM
EXIT – 6%-22%IRRS**
SIGNIFICANTDILUTION; 90% FAILURE RATE
SOURCE:
* Private CapitalMarketsReport, Pepperdine University,2016
** Prequin Global PE And VC Report 2016

53
Value Proposition: Rapid Commercial Success!
Quality Strategic Deal Flow
Worthy Startups with Derisked Inventions
Improved Asset Productivity
Skilled Startup Teams
Strong Talent with “Uber CEOs”
Accelerated Results
Rapid, Low-Cost Licensing
Reduced Risks
Training, Seasoned Teams, De-risked
Inventions, Aligned Ecosystems
Magnify Funds
With one Grant, 10XImpact –
Evergreen Model
R&D$
Productivity
Size$of$R&D$Organization
Large&
Pharma&Co’s
Optimal&
Size
89%
92%
65%
21%
52%
34%
Address Presidential Memorandum
Prepared for NY Genome - Confidential & Proprietary – Gazelle Futures LLC - Do Not Distribute

54
Questions
Prepared for NY Genome - Confidential & Proprietary – Gazelle Futures LLC - Do Not Distribute
1. Why are the inventions on the shelf
2. How do you crowdsource talent and mentors
3. What companies are more appropriate for a normal VC model

55
Key Takeaways
§ YOU can do this too! We’ve built a robust, scalable, flexible platform AND have lessons learned
§ Join the RACE; be a judge; advise the challenge; mentor a team
§ GAZELLE is seeking strategic partnerships & advisors; please connect with us if interested
THANK YOU
ROSEMARIE TRUMAN, FOUNDER AND CEO
THE CENTER FOR ADVANCING INNOVATION
RT@THECENTERFORADVANCINGINNOVATION.ORG
TEXT: 202 438 2208

Investing in High-Impact Gazelles that Drive Outsized Returns & Social Impact

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