Presentation by Steve Scott, Lorna Neilson, Mary Canady, and David Welch at the San Diego Biotechnology Network's Bootstrapping Biotech event October 29th 2009.

1. Bootstrapping Biotech

2. Bootstrapping Biotech Wifi Password: tanguero Presentation: http://sdbn.org/bootstrap October 29th, 2009 SDBN Networking Event

3. Bootstrapping Biotech ~60 min. presentation Interrupt at any time http://sdbn.org/bootstrap Presentation & Resources Videos of event List yourself!

4. What is Biotech? *Data from Biocom’s Product Database **Additional data provided by CleanTECH San Diego

5. val⋅ue /ˈvælyu/ noun, verb relative worth, merit, or importance: the value of a college education; the value of a queen in chess. monetary or material worth, as in commerce or trade: This piece of land has greatly increased in value. the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange.

6. Value Create Getting funding What is your product? Commercialize Finding & protecting technologies Turning products into profits Communicate Who cares?

7. Steve Scott CEO ofTechnology Acquisition Group Over 25 years leading companies to the next level. Frequent Interim CEO Six acquisitions, 3 turn arounds 14 boards Launched over 220 products 300 million raised Twitter: Steve Scottstevescott@techacq.com

9. Applied Biosystems, Invitrogen (now Life Technologies), Sequenom, GeneFormatics, Reprogen, Isis PharmaceuticalsCertified Licensing Professional Served on several M&A due diligence teams Lead negotiator/ integration leader for company acquisition by Invitrogen

10. Mary Canady Founder & Principal, Comprendia LLC & SDBN 10 yrs at bench & computer Highly technical structural biology research 9 yrs marketing & business development Large (Invitrogen, Calbiochem/EMD) & small biotech/life science Social media Established biotech & science Blogger/microblogger, thought leader

11. David Welch Written, directed, and produced more than two hundred films, videos, and commercials Broadcast-quality presentations cover all three sectors of biotechnology and have focused on: immunotherapies, Alzheimer’s, MS, various cancers, cellulosic ethanol and biofuels, malaria, transgenic seeding and genetically enhanced farming methods, gene silencing, and animal viruses First Place honors for several biotech videos in major national film contests. Jim Greenwood, CEO of the Biotechnology Industry Organization, calls David Welch “one of the best in the business when it comes to telling biotech’s story.”

12. Give Me Money Presentations which Attract Investment Tell Them What They Want to Know Steve Scott, CEO, Technology Acquisition Group

13. Bio-B Monitoring with Style San Diego, CA

14. Problem – Crippling Costs Researcher Lack of Quick Subject Identification High cost: estimated 25% of staff time Loss of sensor and data stream Resident Desire for individual styles

15. The Problem What pain does your solution solve? How big is the problem? How much does it cost? Ideal customer

16. Bio-Bling

17. Sensitivity Measurement

18. Your Solution Picture of product Diagram of product or service Main benefit How much does it save

19. Simple Distribution Standard Lab Supply Catalog Web 3 distributors signed Promotional

20. How do you generate revenues? Operate your business Gain market share – Go to market strategy Focus on realistic operation and distribution Only the most important points

21. Market Growth Dollars (m)

22. Marketing and Sales Size of opportunity Market segments Served available market is key Graphics best

23. Competition Easy BLING Isolation Color Dot Tatoo Painful Slow Fast

24. Competition Competitive landscape Direct and indirect Map Competitive Advantage Matrix

25. Technology Color change based on chemical sensor and temperature change Future activity/passivity sensing

26. Underlying Magic/Technology Concepts only Differentiation from competitive methods IP strategy mentioned in presentation

27. Projections

28. Projections and Milestones Typical 5 year forecast Review possible revenue sources Total Revenue COS, SG&A Net Profit Some add residual cash line Don’t need details

29. Management Team CEO – E. X. Harve Harvard Medical Katrina Rodent Project CTO – Keep M. Glowing CTO 25 yrs - Dow Chemical DOD CMO – M. Slinger Former CMO – Roche, J&J, Fischer, Beckman, K-Jewelry, Mousekateers

30. Your Team Sell your accomplishments High value associations Schools, companies, awards, big titles One of most important slide in preso Offer a plan to fill gaps

31. Use of Funds Funds Raised 750K

32. Your Funding Need How much are seeking? Use of money How long will it last Will you need more money later?

33. Corporate Development Scale up Production (I) Scale up Production (II) Market Launch Project Milestone Pilot Test Petri Ring Development Phase I Development Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 0 Financial Milestone Fund Raising (I) US$ 750k Fund Raising (II) US$ 1.5M Exit

34. Status and Timeline Show what you’ve done Where you are When you will do the next steps Technology, business and funding Exit plan Gantt chart or timeline

35. Strong market demand Scalable product Large cost improvement Time saving Individual identity Seeking $750,000 for market launch Contact: exHarve@biobling.com

36. Summary & Call to Action How much capital are you seeking? Key strengths Contact info

37. Commercializing Technology & IP Strategy Life Science Group, LLC

38. Position for Success Ideal position for new ventures

39. Commercializing R&D The Development Gap

40. The Development Gap Too New lack of validation by other parties and/or commercial acceptance Too early in development vicious cycle - need money to complete development Weak IP position e.g., early patent applications or need 3rd party IP

41. Solution for Patent Problems

42. Key Strategies for Success Must have a business plan Executive summary, team biographies Product(s) description, including IP Market and competitive research Go to Market plan Develop a budget/funding strategy Have intellectual property (IP) strategy Think about exit strategies

43. Intellectual Property Different factors to consider One strategy per product or technology Several strategies for the business Funding consideration Patents Trade Secrets Technical Information Know-How

44. IP Strategy IP creates value by giving investors confidence to invest Discourages others from trying to develop the same technology The starting point in develop IP strategy that fits company business objectives

45. Development Parnerships Research Grants Universities, Foundations and Research Institutions Biotech to Biotech Biotech to Big Pharma or Dx

46. Getting Started Bi-lateral Agreements Joint research Invest in the biotech company Up front payment and/or milestone payments Sponsored research Opting in, Opting out – at different stages Distribution

47. What to Pay Attention To License Fees Joint funding of development, manufacturing, commercialization, or marketing Loans Equity Investments Joint Investments Steering Teams Intellectual Property Issues (prosecuting, enforcing and maintaining patents) Transferability

48. Agreements Are Often Interrelated consulting IP License training Investment Services R&D Distribution manufacture Technology licensing occurs in the context of a business relationship in which other agreements are often important

49. An IP Strategy Has 3 Goals Secure freedom to operate Establish control over intellectual property assets Develop and assert an IP portfolio that provides meaningful exclusionary power for the company’s products in the market

50. Preparation For Negotiation What is the business reason for this license? What leverage do you have? What is the time frame for signing the license agreement? What data and documents do you or the other party need? What are your positions on the key issues of the license? What is your negotiating strategy? Will you need preliminary agreements? What are the strengths of the other side?

51. Term Sheet The Term Sheet provides a solid foundation for negotiation Clarifies issues Shows problem areas Communicates to each team Clears positions Keeps track of goals

52. Summary A technology at any stage of development may be appealing to an industry strategic alliance partner Licensing and commercialization occurs more often between people who know each other – network! There are many approaches and ways to structure deals Proper management of IP assets can create greater value for the company

53. Resources Licensing Executives Society (LES) www.lesusacanada.org Association of University Technology Managers (AUTM) www.autm.net inGENEuity Life Science Group, LLC www.ingeneuityllc.com

56. Marketing Plan: Commercializing Market Research What do your customers want? How much are they willing to pay for it? What is your customers’ perception of you? Format Interviews Focus groups Online survey

57. Marketing Plan: Commercializing Customer Profiling Who is your customer? What are their daily ‘pains’? Where are you likely to reach them?

58. Marketing Plan: Commercializing Competitive Analysis Identify Analyze Is your offering unique? How will you compete? SWOT Analysis Strengths, Weaknesses, Opportunities, Threats

59. Marketing Plan: Communicating Positioning & Messaging What is your niche? What is your value? How will you compete in the long term? How will you communicate your message?

60. Communication Tactics Materials Content Branding Print & online media Presentations Planning Campaigns Conferences PR Media placements

61. Communicating 2.0 Smaller companies can do more Get by with help from friends Engage, don’t broadcast

62. Social Media: How? Create a community that cares about you & your product Spend more time than $$ Learn from others http://sdbn.org/sdsms http://sdbn.org/sms We can help! http://comprendia.com/socialmedia

63. Check out the Appendix & http://sdbn.org/bootstrap for more information

64. Case Study: SDBN San Diego Biotechnology Network Founded Oct. 2008 by Mary & Partner Mission: Promote communication in the San Diego Biotechnology community Monthly events focus on hot science, networking, and workshops Promotion via Social Media (SM) LinkedIn (2100+) Twitter (950+) Meetup (175+) Facebook (300+) Amazing growth—85-100 at each event Branch out to charity events, mini-conferences Engage Scientists in SM to help grow

65. Case Study: TigerTox Inspired by Comprendia, SDBN Build Toxicology ‘community’ Needs: Logo, Website/Blog, PowerPoint Template BioStartup™ Marketing Kit Creative Brief Process

66. Case Study: TigerTox Complete Package Also Provided Training Materials Blog/website up Full story

67. Bootstrapping Biotech

68. Science Communication 101 What we will discuss: The importance of video How to leverage social media Integration of video with traditional public relations Creating a buzz

69. What is it? Why are we doing it? How are we doing it? Biotech Branding Campaign

70. Biotech Branding Campaign

71. WhatCanBiotechDoForYou.com

72. IAmBiotech.org

73. Telling the Story Why it’s important to use stories to communicate science: Stories help put a human face on the biotech industry They show how science offers hope to the world

74. Telling the Story Using video Why it’s important If you can’t view this video watch it at http://sdbn.org/wcs1

75. Telling the Story How video can help explain complicated science If you can’t view this video watch it at http://sdbn.org/wcs2

76. Telling the Story What are your options? High-end video production Flip cameras If you can’t view this videos watch them at http://sdbn.org/wcs3

77. Promoting videos through social media Video 2.0

78. Video 2.0

79. Video 2.0 Cost and analytics Total # of people who the ad was shown to Total # of clicks resulting from promotion of 1 video in 2 months Average cost per click was just 23 cents % of people who clicked through the promotion

80. Traditional Communications Vs. Web 2.0

81. “Buzz”: Why You Want it and How You Get it Leveraging your social media presence Build your network Develop strategic partnerships

82. “Buzz”: Why You Want it and How You Get it Self-promote ONLY after promoting others Know your audience and cater to their needs Make it worth their while to listen Provide interesting content Respond to feedback

83. “Buzz”: Why You Want it and How You Get it How do you create a buzz? It’s simple: Communicate; stay informed; and differentiate yourself, your company, and your products

84. Next Steps Find us after the presentation to be interviewed on camera for IAmBiotech.org Sign up on IAmBiotech.org and get involved! Ask us how we can help you: http://WHITECOATstrategies.com

85. Appendix: Funding Resources

86. Appendix: Bootstrapping Resources