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Shahaf, Ophir - I3: Innovation, Infraestructure & Investment – Drivers of Research Commercialization
1. MI Health Conference, 2012
I 3 : Innovation, Infrastructure & Investment -
Drivers of Research Commercialization
Adv. Ophir Shahaf
CEO, Hadasit Bio Holdings Ltd.
May 25th , 2012
Barcelona, Spain 1
2. Forward Looking Statements
This document/presentation contains forward looking statements. Words such as
“estimates,” “expects,” “intends,” “plans,” “believes” and terms of similar substance used
in connection with any discussion of future operational performance or financial results,
identify forward looking statements.
Such statements are subject to risks and uncertainties that could cause the actual results
to differ materially from these statements. The forward-looking statements contained
herein speak only as of the date of this document.
The Company expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to reflect any
change in the Company's expectations with regard thereto or to reflect any change in
events, conditions or circumstances on which any such forward-looking statement is
based, in whole or in part.
This document does not constitute or form any part of any offer or invitation to sell, or any
solicitation of any offer to purchase or subscribe for any shares in Hadasit Bio-Holdings Ltd.
or any of its affiliated entities nor shall it form the basis of, or be relied on in connection
with, any contract therefore.
2
3. Overview
Creating an Entrepreneurial Environment
Israeli Biotech : Status and Difficulty
Innovation + Technology Transfer : first steps
Hospital Infrastructure : “No shortcuts”
Investment : New Financing Models for Early Stage Co.
Hadasit Bio-Holdings : Company Test Case
BioJerusalem : The Environment
Q&A 3
4. Creating an Environment for Commercialization
Embracing an “Entrepreneurial Mindset”:
Acknowledge Risk: Only 1:10 is a “Home Run”
Prepare to Improvise Expect the unexpected
Hard work for Long-term rewards Financial and individual
satisfaction
IP is important but Human Capital is key Medium technology
with excellent people will out-perform great technology with average people
Manage risks to induce participation of investors Take
care of IP, team, labs, finances, partners, market connections etc.
“If you build it, they will come…”
The question remaining is how to build it
and when will they come?
4
6. So, this is the “Road Map” for Entrepreneurs:
“Rapid and successful migration of
technology from pure research to
product developing stages, leading
to revenue generating companies”.
7. 2001-2010: A Decade of Rapid Growth
The Israeli Life Science Industry: Number of Companies Founded
• Growth from 306 companies year-end 2000, to 702 companies in 2010 =
this is an additional 396 companies (56%) over 10 years
• An average of 40 new companies being formed per year over the last
decade
• 40% of Life Science companies in Israel today are less than 6 years old
Source: ILSI Data Base - 2011
8. 2010: Companies’ Developmental Stage
“Young & Risky”
Industry:
Approx. 56% of
the companies
have no revenue
Source: ILSI Data Base - 2011
9. Israel BioMed : Industry Roadmap
• Academic Excellence
High Potential : • Entrepreneurial spirit and IP
• Technology Convergence
• Technology Transfer Academia to Industry
• Technological incubator based companies
• R&D grants to industry
• Government Incentives
• Infrastructure
• IPO’s or other Investment
• Global Partnering : Industry
• Revenue generating companies
10. Technology Transfer: The Engine Behind
Israel’s Entrepreneurial Success
Academic innovation is at the forefront
of the Israeli economy.
Israeli technology transfer companies
promote the transfer of academic-based
technologies for the benefit of society
and have a direct contribution to the
region’s industrial and scientific
success.
(“Start-Up Nation”, D. Senor & S. Singer)
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11. Remarkable Numbers:
Each year Israeli technology transfer companies
generate a total of over Euro 200 Million in royalties.
Over Euro 20 Million are invested by industrial
companies in scientific research collaborations at
universities
About 150 new technologies are licensed from Israeli
universities and research institutes each year
An average of 25 new companies that are based on
academic inventions are started every year
Yissum (Hebrew University) and Yeda (Weizmann
Institute) are rated among the top 10 tech transfer
companies worldwide in terms of revenues*
* AUTM survey 2010 (Assoc. Univ. Tech. Mgt.)
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12. The Mission of Technology
Transfer, as Viewed by Academia
Achieve and maintain a world-class
leadership position in technology transfer
and strengthen the academic institute's long-
term financial stability, by generating new
sources of income from royalty streams and
equity participation, and expanding the
university’s research base by increasing
sponsored funding from industry.
13. Contrasting Cultures
UNIVERSITY CORPORATE
Not for profit • For Profit
Social Responsibility • Shareholder Responsibility
Basic Research • Application Research
Create New Knowledge • Develop New Products
Open-Ended, • Specific Objectives/
Curiosity-Driven Research Product Focus
Publication and • Ownership and Secrecy
Collaboration
Understanding the differences can of Materials
assist in
• Control
Sharing directing the research and the process
of Materials
14. Collaborating with Industry in
Multiple Dimensions
• Established • Licensing
a State of the HMO
Art Phase I Inventions
Clinical Trials
Center
Clinical
Products
Studies
• Prominent &
Diverse Clinical Research
Consulting
Input of HMO Services
Physicians and • GMP Rooms
Researchers • Cyclotrons
• Pre Clinical
Innovation works with the suitable Samples
• Human
Infrastructure Technologies to take place
Enterprising Biomedical in which
15. Human Capital Infrastructure
Almost 12% of Jerusalem's workforce (32,000 people) is
engaged in the biomedical/ healthcare arena
1,800 graduates p.a.& Israel’s highest number of Ph.D.
students in life sciences
Over 3,250 employees in the LS industry
16. R&D Infrastructure
The Institute for Drug Research and Development at the
HU School of Pharmacy
Incubators:
Bioline Innovations Jerusalem, exclusively devoted to
accelerating drug development
Van Leer – medical device and diagnostics
The Jerusalem BioPark located at the campus of the HU
Medical School and the Hadassah Medical Center
17. Industrial Infrastructure (Space, Equipment, People)
Over 130 Life Science companies: 35% of Israel's biomed
industry - Teva, Sigma-Aldrich, Medinol, Omrix Pharma
(J&J)
A growing start-up sector, 50% at an early stage of
development
Major focus: Biopharma
Managers + employees + experience + IP “spin-out” from
larger co.
Not Just
Infrastructure, But
also a Partner…
18. Partners look for licensing - at clinical stages
Pre- Phase I Phase II Phase III vs. 5 years
clinical ago
Upfront $ 3 - 10 M $ 5 - 15 M $ 10 - 25 M $40 - 100 M 3x
IND $2-5M NA NA NA
Ph II Start $3-8M $ 5 - 10 M NA NA
Ph III Start $ 10 M $10 - 15 M $ 25 M NA 3x
NDA Filing $5M $5M $ 10 M $ 30 M
1st Approval $5M $ 10 M $ 30 M $ 50 M
2-3 x
2nd – 3rd
$ 10 M $ 20 M $ 45 M $ 70 M
Approval
Royalty Tiers 9-13% 12-15% 14-20% 18-26% 1.2 x
Clear “Trade-Off” : Advanced Products allow
Better Terms for theSource: Deloitte Recap LLC, 2009
Company/Entrepreneurs 18
19. Big Pharma Revenue Loss - IP Expiration
Market Demand Exists : “Show Us Products!!”
• As Ethical Blockbusters go off-patent, Generics move in, revenues drop
• Big-Pharma need to “feed the beast” - with new, innovative products
for the pipeline
• The Alternatives: set up expensive internal R&D or “shop” for
advanced, “de-risked”, clinical-stage products
21. The Modern Day Leap of Faith:
The “Valley of Death” - Where 60% Drop…
$50k - $0.5M $5M
Academia, VCs,
Angels, 3F’s Corporate,
Institutionals,
Strategic
Partners
Not only $$$, but also mgt., infrastructure,
clinical preparation, partnerships, regulatory…
22.
23. Hadasit Bio-Holdings - Profile
Established: September 2005 Traded: Tel Aviv Stock Exchange (HDST), since January 2006
Investment rounds: (OCS – Additional $ 8 M) Stockholders:
IPO (1/2006): $8m Hadasit
(owned by Public CBG
Bonds (8/2006): $ 5 m -- converted (Feb. 2007) Hadassah)
37% 53% 10%
PIPE 1 (5/2007): $ 2 m (CBG)
PIPE 2 (4/2009): $ 5 m HBL
> $ 30 m
Rights (10/2009): $ 7 m
Secondary Offering (8/2010): $ 3 m
Holdings: early-stage biotech companies (until completion of Phase I)
• 7 companies: • 3 therapeutic areas:
- All IP developed at Hadassah Oncology
- 4 in Phase I/II Auto-immune diseases
- 3 entering Phase I/II within next 12-18 months Tissue engineering / Stem cells
• Investment criteria: Demonstration of Proof-of-Concept, Blockbuster Market
Exit strategy:
Agreements (Upfront + Milestones + Royalties) with strategic partners at end of Phase I/II
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24. Hadasit Bio-Holdings : Added Value = I3
Innovation Investments Infrastructure
• University Hospital • IPO • Jerusalem Bio-Park
• 6 Teaching Faculties • Bond Financing • 6 fl., 10,000 ft.2
• 52% of Trans. Res. • PIPE X 2 • GMP Facility
• 50 Patent Families • Rights Issuance • Animal Facility
• 12 spun-out co. • OCS Leverage • Clinical Trials
Facility
• 4 public co. • Traded Options
• Labs, Equipment,
• Partnering / Collab. • FP7
Imaging
• Ven. Phil.
•World Class
Expertise
Scientific Risk is a Given.
We need to “De-Risk”…
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25. HBL Competitive Advantage & Positioning
Clinical
Hadasit
Scientific Bio-Holdings Pharmaceutical
Companies
Value Added
Infrastructure
Incubators
Business &
Bio VC Fund Bio VC Financial
Dev.
Gov Fund VC
FFF/ & Fund
Financial AcademiaIncubators
Phase I
Phase II
Seed
Market
Phase
Clinical
Pre
III
Stage 25
26. Portfolio by Development Stage
HBL Portfolio
Company Disease Area HBL Lead Opt. Animal Preclinical Phase I
Enlivex GvHD
Thrombotech Stroke
Hadassah
Hadasit
KAHR Autoimmune
ProtAb Autoimmune
CellCure AMD
BioMarCare Oncology Dx
3 Companies in phase I
3 companies to Enter Phase I/II within Next 12-18 Mths
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27. Portfolio - example (I)
A safe, effective answer to a devastating disease
• More than 30,000 bone marrow transplants worldwide per year
30% of patients develop GvHD – a devastating, fatal disease
No treatment exists (Unmet Need)
• Tolarex’s technology (drug and device) imitates the body’s own
natural, safe way to induce tolerance
• Proved clinical effectiveness in various animal models
• Global IP coverage in place
• Use faster regulatory path (orphan drug status for GvHD),
to get to the vast market of autoimmune disorders ( > $ 20 b market)
• Team:
CSO: Prof. Dror Mevorach, MD CEO: Alon Moran, LLB, MBA
Senior Rheumatologist,
Hadassah-University Hospital Scientific Advisory Board includes world leaders:
Dr. J. Ferrara, Prof. R. Saas
Phase I/IIa - Completed 27
28. Portfolio - example (II)
Novel Drug Platform to Treat Cancer and Autoimmune Diseases
• Platform technology: A new class of biological drugs; Trans Signal Convertor Proteins
(TSCPs) - Fusion proteins with two functional sides
• IP: Strong IP portfolio - exclusively licensed from the University of Pennsylvania
• Robust Pipeline: IP protects a vast number of TSCP molecules. Two products, KAHR-101 and
KAHR-102, are in advanced pre-clinical development
• KAHR-101: Efficacy demonstrated in MS and RA animal disease models and on different
liver cancer lines. Complete production process developed. Clinical studies planed for next
year in RA and HCC patients
• Team: CEO - Noam Shani, PhD. SAB includes Global Rx leaders; Prof. Marc Feldmann, Prof.
Lawrence Steinman, Prof. Mark Tykocinski, Dr. Barry Sherman, Dr. Nabil Hanna
Phase I/IIa Starts in 6 Months 28
29. External Investments & Partners in HBL Companies
TEVA Pharmaceutical Industries (NYSE:TEVA)
$ 2 M(2007/2009) + $ 2 M(2010) in Cell Cure Neurosciences + Licensing option
BioTime Inc. (NYSE Amex: BTIM)
$ 4.1 M(2010) in Cell Cure Neurosciences
Sanofi Aventis SA (NYSE:SNY)
$2 million in KAHR Medical + Right of first negotiation
Clal Biotechnology Industries (TASE:CBI):
$ 1.75 M (Option Exercise + additional) in Thrombotech and X in ProtAb
Pontifax II Venture Capital Fund + CBI:
$ 1.5 M each in ProtAb
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30. Focus - Return on Investment
HBL’s “Sweet Spot” :
Highest Success-to-
Investment Ratio
% of total investment
Approval
Success Rate, per phase
Percent of total investment
Required investment $m
Years
Data: E&Y, since 1985
Focus: Where do you add value?
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32. Summary
• World class science is essential but not sufficient
• Research should be directed to clinical unmet needs,
leveraging on existing excellence
• Input from industry partners - as early as possible. They
are the ultimate clients
• Financial terms and company valuations are secondary -
better to have a smaller piece in a larger pie…
• Government and regulators must acknowledge this
growth driver and accommodate it (public funding, fast
track listing etc.)
• Still: high risk, high reward marathon run
• “Show me the money (data)…”
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33. Opening Trade on TASE - 5 Years Since the IPO
Gràcies.
Contact:
Ophir Shahaf, CEO E: ophir@hbl.co.il T: +972-2-677-8757 M: +972-54-520-1177
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34. Financial Solution: Going Public on TASE
• Solving a financing shortage – when VC is not an alternative
• Special rules for R&D companies – early IPO (Regulation!)
• Special list for Bio-Med companies – New Index (3/2010) =
better coverage + more institutional volume
• Costs: underwriters, infrastructure, legal and financial
reporting, advisors, analysis
• Reporting ongoing news: flow to maintain interest
• A marathon, not a 100 yard sprint…
• A springboard for offerings abroad, easier future rounds
35. Biomed Companies at the TASE
Sub-sector Number Of Market Capitalization
Companies ($ Billions) April 2011
Medical devices 28 1.5
Biotechnology 22 2.3
Venture Capital 7 0.8
Total 57 4.6
The Biomed index was launched on March 1st, 2010.
The index includes 30 companies. (30.4.2011)
New companies will be added to the Index after their IPO, if they meet the index criteria.
Latest issues (us $ millions):
RedHill Biopharma - 14 $ mill IPO: Feb. 2011
Icecure - 10 $ mill IPO: Feb. 2011
Rosetta Green - 6 $ mill IPO: Feb. 2011
Glycominds - 6 $ mill IPO: Feb. 2011
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