How GenSpera operates as a virtual company


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This is a presentation done by Dr. Craig Dionne, President & CEO of GenSpera for a class at UTSA on running a virtual company

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How GenSpera operates as a virtual company

  1. 1. R One Version of a Virtual Company March 25, 2010
  2. 2. Typical Drug Development Timeline <ul><li>1 </li></ul>Drug Discovery Preclinical Development Phase I Phase II Phase III Market 3-15 yr 1-2 yr 1-2 yr 2-3 yr 3-5 yr $30M-$300M (internal costs) $2M-$5M $1M-$3M $20M-$100M ~$250M
  3. 3. GenSpera Highlights <ul><li>Technology platform supports the development of a suite of drugs targeted at different cancers, as well as other applications such as imaging </li></ul><ul><ul><li>Lead drug, G-202, in Phase I clinical trials </li></ul></ul><ul><ul><li>Based on over $15M of funding and 15 years of research at Johns Hopkins Medical Center and other renowned research centers </li></ul></ul><ul><ul><li>Strong intellectual property footprint (7 patents and 3 patent applications), with no milestone or royalty payments owed to third parties </li></ul></ul><ul><li>Experienced and well-developed management team driving the process </li></ul><ul><ul><li>Dr. Dionne has 22 years experience in the industry, former VP Discovery Research at Cephalon (eight corporate partners), brought four drugs into the clinic </li></ul></ul><ul><ul><li>Scientific Advisory Board of leading researchers who are both the inventors of the technology and shareholders </li></ul></ul><ul><li>Plan is to operate as a virtual company , out-license/partner with large Pharma after Ph II proof-of-concept studies </li></ul>Harnessing the power of a new biomedical technology platform Precise targeting of a potent, unique drug directly to tumors
  4. 4. How our technology works Our active drug, with a targeting/masking agent attached, is inactive in the blood stream… The active drug, no longer soluble, ‘precipitates’ directly into nearby cells, killing them <ul><li>… until it finds an “enzyme” found only at our “target site” that cuts off the targeting/masking agent </li></ul><ul><ul><li>G-202, for example, targets the blood vessels of tumors </li></ul></ul>normal blood vessel cell Blood vessel cell in tumor
  5. 5. Strategy and value creation <ul><li>Funded 15 years by $15M in scientific grants </li></ul><ul><li>Raised ~$8M since Nov 2007 </li></ul><ul><li>Have ~$2.8M cash-in-hand – adequate to fund Phase I trial </li></ul><ul><li>Trading symbol OTCBB:GNSZ </li></ul>Financing History Capital Structure <ul><li>~16M common shares issued and outstanding </li></ul><ul><li>~7.7M currently outstanding options and warrants </li></ul><ul><li>Management, inventors and boards hold approximately 41% of issued shares </li></ul>Business Strategy and Value Creation <ul><li>Operate as a virtual company with minimal infrastructure </li></ul><ul><li>Develop drugs through Phase I/II clinical trials then out-license /partner with large pharma </li></ul><ul><li>Individual drugs can be worth up to $1B (comparable deals 2009 – J&J/Cougar, Astellas/Medivation) </li></ul><ul><li>Expect partnering deal in ~2-3 years </li></ul>
  6. 6. Why start a Company? <ul><li>Without a stand alone company this great technology likely won’t be developed any other way </li></ul><ul><ul><li>Patent issues </li></ul></ul><ul><ul><li>Development issues </li></ul></ul><ul><ul><li>Immature technology </li></ul></ul><ul><ul><li>Scientific prejudice </li></ul></ul><ul><ul><li>Tainted waters </li></ul></ul><ul><li>GenSpera solved all of the outstanding issues before raising money. </li></ul>
  7. 7. What an Investor Wants – Upside, Timeliness, Liquidity <ul><li>Q. How much return will I get on my investment? </li></ul><ul><li>It depends on the stock price when you invest, but our target is $33 per share. ($1B / 30M shares) </li></ul><ul><li>Q. Sounds great. But when will this occur? </li></ul><ul><li>No later than Q4 2012. </li></ul><ul><li>Q. Will my money be locked up until then? Can I get it back if the Company doesn’t perform or if I change my mind? </li></ul><ul><li>We are publicly traded so you can get out anytime. </li></ul><ul><li>Q. Wow!! Where do I sign? </li></ul>
  8. 8. <ul><li>Nov 2003-Nov 2007 $155,000 and sweat equity (Dionne) </li></ul><ul><li>IP prosecution, maturation of technology, business development </li></ul><ul><li>Nov 2007 – Feb 2008 Raise $1.1 M, $0.50/share, $4M pre-money </li></ul><ul><li>pilot toxicology, process improvement, pre-IND meeting </li></ul><ul><li>Aug 2008 Raise $2.3M, $1.00/share, $10M pre-money </li></ul><ul><li>Formal toxicology, clinical batch, IND </li></ul><ul><li>Dec 2008 S1 Registration Statement deemed effective </li></ul><ul><li>2009 Raise $4M, $1.50/share, $18M pre-money </li></ul><ul><li>Nov 2009 Publicly quoted on OTCBB $2.50/share </li></ul><ul><li>Shareholder Liquidity!!!! </li></ul><ul><li>Jan 2010 Initiate Phase I Clinical Trials of lead drug </li></ul><ul><li>March 2010 Market Cap ~ $45M (~$2.85/share) </li></ul>Timelines and Value Creation
  9. 9. Why a Virtual Company? <ul><li>Same important tasks must be done. Cannot sacrifice quality, timeliness, compliance, or execution!! </li></ul><ul><li>Lack of infrastructure = less dilution = greater upside = easier to raise money </li></ul><ul><li>Outsourcing = access to turnkey operations = timeliness and competitive pricing </li></ul><ul><li>Decentralization = access to best talent anywhere in world = better quality </li></ul>
  10. 10. Geographical Reality of a Virtual Company <ul><li>Corporate Office San Antonio, TX </li></ul><ul><li>COO Tucson, AZ </li></ul><ul><li>Corporate Counsel Westlake Village, CA </li></ul><ul><li>Accountant Long Island, NY </li></ul><ul><li>Auditor New York, NY </li></ul><ul><li>Investor Relations Milburn, NJ </li></ul><ul><li>Biological research Baltimore, MD </li></ul><ul><li>Chemical research Copenhagen, DK </li></ul><ul><li>Toxicology Stockton, OH </li></ul><ul><li>Starting materials Ibiza, Spain </li></ul><ul><li>Manufacturing 1 Shanghai, PRC </li></ul><ul><li>Manufacturing 2 Denver, CO </li></ul><ul><li>Vialing of Drug Manchester, NH </li></ul><ul><li>Clinical Trials 1 Madison, WI </li></ul><ul><li>Clinical Trials 2 Baltimore, MD </li></ul><ul><li>CRO Edinburgh, Scotland </li></ul>
  11. 11. Disadvantages of a Virtual Company <ul><ul><li>Need extraordinarily committed and experienced team. </li></ul></ul><ul><ul><li>Very little backup support in case of physical or personal issues. </li></ul></ul><ul><ul><li>Lack of credibility from certain investors. </li></ul></ul>
  12. 12. What has worked for GenSpera? <ul><ul><li>Simple Capital Structure </li></ul></ul><ul><ul><li>Revised Business Plan </li></ul></ul><ul><ul><li>Financing based on subsequent S1 Registration </li></ul></ul><ul><ul><li>Investor Relations ( not necessary for most early stage companies ) </li></ul></ul><ul><ul><li>Stock compensation for Consultants </li></ul></ul><ul><ul><li>Excellent Consultants </li></ul></ul><ul><ul><li>Personal integrity and honesty </li></ul></ul><ul><ul><li>Realistic expectations </li></ul></ul><ul><ul><li>Realistic valuations ( some VCs would argue this point ) </li></ul></ul><ul><ul><li>Execution according to plan </li></ul></ul>
  13. 13. Free Advice <ul><ul><li>Personal integrity and honesty are your greatest assets. </li></ul></ul><ul><ul><li>Financings always take longer than they should and most great financing leads dry up. </li></ul></ul><ul><ul><li>Listen carefully and have an open mind. </li></ul></ul><ul><ul><li>Keep it simple. Stay organized. Stay focused. </li></ul></ul><ul><ul><li>Know your customer!!! </li></ul></ul><ul><ul><li>You are not successful until your investors make money! </li></ul></ul>
  14. 14. Contact Craig A. Dionne, Ph.D. President and CEO GenSpera, Inc. 2511 N Loop 1604 W Suite 204   San Antonio, TX 78258 [email_address] (210) 479-8112 GenSpera is a registered United States Trademark.  The Company Logo and the phrase &quot;Creating Therapies. Generating Hope.&quot; are trademarks of the Company.