\nIonExpress is developing an automated ion channel screening platform called IonExpress that is faster, cheaper, and easier to use than existing technologies. Their initial business model involves selling lower cost instrumentation and consumables targeted at academic, government, and small/medium pharma customers. Their goal is to develop a minimum viable 32 channel product and obtain early customers to demonstrate proof of concept and validate the market opportunity, which they estimate could be over $100 million annually.

1. IonExpress
Instrumentation and consumables
for better, faster, cheaper ion channel screening
> 50 contacts

2. Team
• Shiva Portonovo: Entrepreneurial Lead
– PhD candidate developing parallel,
automated ion channel screening
platform
• Jason Poulos, PhD: Mentor
– CEO of Librede, a startup company
commercializing artificial membrane
technologies
• Jacob Schmidt, PhD: PI
– UCLA Bioengineering research specializes
in cell-free approaches to ion channel
measurement

3. IonExpress
Next Generation Ion Channel Screening
• Ion channels are critically
important drug discovery
targets
• EVERY drug needs cardiac
ion channel safety screening
• They are difficult to
measure: existing tech is
expensive, slow, and hard to
use
• IonExpress’ cell-free
technology is faster, better,
cheaper

4. Drug Screening Market Size
$40-60B
• Customers from
Ion Channel Screening Pharma, CROs,
$375M
Govt/academic
labs
• Ion Channel
Screening TAM
Ion Express
Automated $375M
Patch Clamp
$110M
$245M
– Strongly limited
by current tech
• IonExpress
– 30% of TAM:
$110M
Drug Discovery Technologies: A Global Strategic Business Report" Global Industry Analysts, Inc.
Top 10 Drug Discovery Technologies Market – Strategic Analysis and Global Forecasts (2010 to 2015)
Ion Channel Trends 2011, HTS Tec, Ltd.

5. Initial Business Model Canvas
Inst mfrs Reproducibility
Fast Assay devel. Pharma Cos.
Cells Beta Feedback
Low cost Install/demo Govt. ctrs.
Inj. molders Winning KOLs
CROs
Easy to use
Univ. labs
New targets Direct, partner
IP, cells
Direct
Low run cost
Distributors
Low cost
One Time Recurring
Instrument Injection molding Inst. Maint
One Time Recurring Recurring Recurring
Assembly
warranty Consum. Software Train.

6. Getting out of the building:
Customers and Value Proposition
• Academic and Government Labs
– Stanford, UCLA, UCI, Burnham, NIH, U Pitt, BYU, USC
• With $0.2-$0.4/dp, we would become the preferred IC screening
platform at UCLA’s IC Screening center
• Large Pharma
– Icagen, GSK, J&J, Novartis
• Medium/Small Pharma
– Amgen, Ophidion Biosciences
• CROs
– ChanTest, Aurora Biomed, GE Health Care, Kanalis
• “If you have the capabilities that you’re telling me, you have the
holy grail and should price it as high as possible”
– Julie Hilton, GE HealthCare

7. Different market segments have
different primary pain points
• CRO/L. Pharma
– Need ease of use, throughput, and low running cost
– Indifferent to instrument cost
• Govt/Acad Lab
– Need low instrument cost and ease of use
– Throughput and low running cost not as important
• Big surprises
– Everyone was open to our technology with cost &
performance
– Even a medium throughput solution is viable

8. Key Insight
Our value prop changes
with customers’ screen size
• L. Pharma, CRO • Acad, S/M Pharma, CRO
– Screens are bigger; high – Screens are smaller but
throughput and cost are more numerous; ease of
most important use is most important
Setup Time
Setup Time
Total
Total Screen
Screen time
Screening Screening
time Time Time

9. Key Insight
Path to adoption and Minimum Viable Product
is different for each market segment
• Academic users
– Happy with 8 channel system (several labs willing to beta test)
– Not a big market
• M/S Pharma/CROs
– A medium throughput solution is needed (1000-2000 dp/day)
– Several interested in beta testing
• L Pharma
– Want fully validated and accepted system, high performance
• M/S Pharma market is similar in size to L Pharma
• Our MVP is a 32 channel system (~5000 dp/day)
compatible with standard 96 well plates

10. Canvas 2
Inst mfrs Reproducibility L Pharma
Fast Assay devel. Pharma Cos.
Beta Feedback S/M Pharma
Cells
Low cost Install/demo Govt. ctrs.
Inj. molders Winning KOLs
CROs
Easy to use Univ/Govt/
CROs
Univ. labs
New targets Direct, partner
IP, cells
Direct
Low run cost
Distributors
Low cost
One Time Recurring
Instrument Injection molding Inst. Maint
One Time Recurring Recurring Recurring
Assembly
warranty Consum. Software Train.

11. Sales and Distribution Channels
• IonExpress will make instrumentation and consumables
– Instrumentation is low volume
– Customers will want technical support
– Consumables are high volume, high margin, and usable only
with our instrument; customers are locked in
 We don’t want/need a channel partner
• Competitors’ consumables and instruments are also
sold direct
– Consumables off of company websites
– Instruments through sales reps
– They provide tech support and assay development

12. Canvas 3
Inst mfrs Reproducibility L Pharma
Fast Assay devel.
Beta Feedback S/M Pharma
Cells
Low cost Install/demo Univ/Govt/
Inj. molders Winning KOLs
CROs
Easy to use
New targets Direct, partner
IP, cells
Direct
Low run cost
Distributors
Low cost
One Time Recurring
Instrument Injection molding Inst. Maint
One Time Recurring Recurring Recurring
Assembly
warranty Consum. Software Train.

13. Partners
• Instrument
– Our consumables are compatible with off-the-
shelf, standard liquid handling and motion
control hardware
• Cells
– We use standard commercially available cells
• Consumable plates
– Simple inexpensive plastic plates, injection
molded and assembled in house
• No need to partner

14. Partners
• Amplifier manufacturers Tecella and
Warner Instruments are interested in
partnering with us
– But we only need an off-the-shelf amplifier
• We do need SOFTWARE and neither of
them have anything good now
– Software goes to “easy to use”– highly valued
• Partner/license 3rd party software

15. Canvas 4
Inst mfrs Reproducibility L Pharma
Fast Assay devel.
Beta Feedback S/M Pharma
Cells
Low cost Install/demo Univ/Govt/
Inj. molders Winning KOLs
CROs
Amplifier Easy to use
Software
New targets Direct
IP, cells
Direct
Low run cost
Low cost
One Time Recurring
Instrument Injection molding Inst. Maint
One Time Recurring Recurring Recurring
Assembly
warranty Consum. Software Train.

16. Revenue Streams
Product Offerings
• Instrumentation and consumables grouped by
capacity and function (priced for adoption)
– 32 channel system (“Best Value”)
• Instrument- $200k (Fluxion: $250k)
• Plates- $50 (Fluxion: $150)
– 384 channel system (“Highest throughput”)
• Instrument- $500k (Barracuda 384: $750k-$1M)
• Plates- $200 (Barracuda 384: $250-$300)
• Reagents: Cell aliquots, gel electrodes, lipid
mixtures, buffers

17. Competition Matrix: Key Metrics
Simultaneous
Instrument System Consumable Ease of
Cost/dp Recording Dp/day
(Manufacturer) Cost† cost Use
Sites
IonExpress A32 Low/Mod. Low $.26/dp 32 5000 High
IonExpress
Moderate Med $.13/dp 384 60000 High
A384
IonWorks
Barracuda High Med -- 384 10000* Low
(MDS)
IonWorks
Quattro High Med/High $0.75/dp 48 3000 [2] Med
(MDS)
SyncroPatch
High Med -- 96 5000* Med
(Nanion)
IonFluxHT
Moderate Med $1-4/dp 64 9000* Med
(FluxionBiosci)
Q-patchHT
High Med/High $3.50/dp 48 2000 [2] Med
(Sophion)
[1] Comley, J. Automated Patch Clamping: setting a new standard for early hERG. Drug Discovery World 62-79 (2005)
[2] Farre, C. Ion channel screening - automated patch clamp on the rise Drug Discovery Today: Technologies 5 1 e23-e28 (2008)
*Fluxionbio.com or Nanion.com or Moleculardevices.com

18. Competition Matrix: Features
Instrument Yield/ Seal Solution Suitability of
(Manufacturer) Patch Success Rate Resistance Perfusion any cell type
IonExpress A32 High > 1GΩ Yes High
IonExpress A384 High > 1GΩ Yes High
IonWorks Barracuda
Med/High < 1GΩ Yes Med/Low
(MDS)
IonWorks Quattro
Med/High < 1GΩ No Med/Low
(MDS)
SyncroPatch
Med/High > 1GΩ Yes Med/High
(Nanion)
IonFluxHT
Med > 1GΩ Yes N/A
(FluxionBiosci)
Q-patchHT
Med/High > 1GΩ No Med
(Sophion)
From Ion Channel Trends 2009 and 2011, HTS Tec. Ltd.

19. Current Market Landscape
• All APC instruments are cell-based and the
market is fragmented with no real leader
• The instruments made by each of these
companies have their own advantages and
disadvantages and no platform is universally used
for all applications.
From Ion Channel Trends 2008 and 2011, HTS Tec. Ltd.

20. Estimate of total customer demand
Projected usage of IonExpress’ Plates by Market Segment
Equiv #
<Sites/ <Labs/ <Screens/ <DP/
Entities Total labs 32 well
entity> site> yr/lab> screen>
Plates/yr
L Pharma 20 3.5 4 280 6.7 20k 1.2M
M/S
500 1.25 1.5 938 4.1 10k 1.2M
Pharma
Govt/
50 1 1 50 4.0 10k 63k
Acad
From Ion Channel Trends 2011, HTS Tec. Ltd.

21. Adoption rate and Sales
Estimated Adoption by Customer Segment
Year % L Pharma % M/S Pharma % Govt/Acad
1 0% 0% 5%
2 0% 1% 10%
3 1% 2% 10%
4 2% 5% 10%
5 5% 10% 10%
Resultant Sales
Users and
Year # Plates
Instruments
1 3 3125
2 14 18268
3 27 42011
4 58 89791
5 113 185056

22. COGS and Operating Cost
Bottom Up Estimate (conservative)
• Instrumentation - $135k ea
– $120k Components/materials
– $10k Labor
– $5k Operations
• Plate - $5/plate
– <$1 materials
– $2 Labor (assembly)
– $2 Operations

23. Income Statement
Year 1 2 3 4 5
Revenue ($M) 0.7 3.3 4.5 10.7 20.3
COGS + Ops. ($M) 0.4 1.7 1.9 4.6 8.4
Profit ($M) 0.3 1.6 2.7 6.1 11.9
25
Revenue ($M)
20
COGS ($M) • 1st $100k/mo
15
revenue in Year 2
$M
Profits ($M)
10
• 1st $1M/mo
5
revenue in Year 5
0
1 2 3 4 5
Year

24. Customer Lifetime Value
• Instrument
– One time initial purchase ($200k)
– To increase capacity/throughput, small number of
additional purchases possible ($200k+)
• Consumable
– Recurring purchases: ~ 4188 plates/yr for each lab in
big pharma ($209k/yr)
• Lifetime revenue value:
– Instrument: $200k in Year 1 + $200k in Year 4
– Plates: $209k/yr Years 1-3 and $418k/year Years 4-10
= ~$3M (discounted at 5%/yr)

25. Marketing
• Existing market: Adoption may be slow
– Customers don’t respond to ads they want a
demo
– They look to scientific journal publications and
conference presentations
• Two phases
1) Getting initial users and KOLs
• Publish data and put it on website as application notes
2) Expand user base
• Booths at scientific meetings and trade conventions
• Formal/established scientific loan program

26. Final Canvas
Reproducibility L Pharma
Fast Assay devel.
Beta Feedback S/M Pharma
Low cost Install/demo Univ/Govt/
Winning KOLs
CROs
Amplifier Easy to use
Software
New targets Direct
IP, cells
Direct
Low run cost
Low cost
One Time Recurring
Instrument Injection molding Inst. Maint
One Time Recurring Recurring Recurring
Assembly
warranty Consum. Software Train.

27. What we’re going to do next
• We have a competitive advantage vs APC in
cost, throughput, and ease of use
• If we make a 32 channel system we have
identified customers who will write a check
on the spot
• We think this is a viable business and we will
pursue this after class
– Submitted SBIR proposal to mitigate technical risk
and ultimately build MVP prototype