November 3 rd , 2008 Experiences in Japanese Licensing Basic - PowerPoint PPT Presentation

November 3 rd , 2008

Experiences in Japanese Licensing • Basic Japanese licensing / collaboration strategies • Importance of collaboration alignment • Three-way partnerships in a highly competitive in- licensing environment – leveraging lessons learned The landscape of “Inter - Geographic” licensing has changed dramatically and will continue to change – adaptation will be THE critical skill - Confidential - 2

Lessons from Eli Lilly and Company A strong legacy of in-licensing from abroad

Lessons from Lilly Business Development • In- Licensing has represented a key element of Lilly’s portfolio strategy for many years Insulin Lorabid (Kyowa Hakko) Actos (Takeda) Prasugrel (Sankyo) Cialis sPLA 2 (Shionogi) • Key initial objectives for Lilly in all in-licensing transactions – Establish Lilly’s leadership in the relevant disease area – Establishing guiding principles of a transaction – Develop a clear path to a transaction based on partner needs – Collaboration excellence with strong post deal “alliance management” - Confidential - 4

Lessons from Lilly Business Development Two MOST critical lessons: • Establish your expertise – Ability to manage a Japanese relationship (trust, respect) – Development (local regulatory, clinical) – Team (Sr. Mgmt, SAB, CAB, BOD) – Funding (venture, other sources) – Value-add for partner (data exchange, $$$, learning) • Establish guiding principles early in the process – Value split based on risk/reward (financial and non-financial) – Responsibilities (development) – Set timing / process expectations - Confidential - 5

Lessons From Peninsula Pharmaceuticals Alignment of Strategy and Operational Execution

Alignment of STRATEGY and OPERATIONS • Majority of key decisions in a NewCo are STRATEGIC – Pharma may see decisions as low level PRODUCT issues • Good alliances move “Appropriate” decisions UP the organization so all strategic impact on the NewCo can be assessed and considered Regulatory CEO Preside nt Finance / Legal Function Function Clinical Development TRx TRx TRx Marketing Product Product Product Product Manufacturing - Confidential - 7

Alignment of STRATEGY and OPERATIONS • A balanced JSC can elevate decision making • Needs to be a clear decision maker / process (involvement of senior people) • Regular meetings avoid sudden “killer issues” (in -person when possible) • Increases probability of obtaining a license and further control • Non-negotiable: IP and regulatory – must be decided locally • Opportunity : Equity participation by Shionogi • Keeps everyone “in -the- game” and elevates corporate interest Regulatory CEO Preside nt Finance / Legal Joint Steering Function Function Committee Clinical Development TRx TRx TRx Marketing Product Product Product Product Manufacturing - Confidential - 8

The Payoff • The Peninsula / Shionogi Joint Steering Committee: – Encouraged an investment from Shionogi in Series C financing ($25M) – Enabled data sharing for Shionogi’s MHLW licensing process – Minimized any wasteful overlap (Pre-clinical, manufacturing) – Was paramount to the JNJ acquisition allow clear line-of-sight communication between the relevant individuals – Allowed coordination of global publication and marketing efforts • A well established JSC in any license can provide benefits: Expansion of doripenem Shareholder return Visibility on value “Leverageable” capabilities Clear alignment Financial return - Confidential - 9

Executing with Lessons Learned

Leveraging Lessons Learned • Lessons from Lilly and Peninsula helped deliver success in a highly complicated three-way transaction – sPLA 2 collaboration discontinued – No clear out-licensing plan or leader – Partners needed to be convinced to “spend the time on a deal” sPLA 2 Products and Technology • Both Lilly and Shionogi: – Constructively participated in negotiation of the key contracts – Assisted in technology transfer (a lot of data) and enabled Anthera – Provided on-going support including regulatory/manufacturing – Became “Large” shareholders - Confidential - 11

Financing / Operating History $ A-002 FRANCIS 8 week and 6 month A-002 Phase IIb/III RESULTS (Q1 /Q2) Start - FRANCIS Initiate Phase III A-002 Phase II LDL extension (Q2) Results: PLASMA2 QD Strategic Financing A-002 Phase II for A002 (Q3 / Q4) IP License from A-002 Completed SPA PLASMA: Coronary Lilly with FDA and EMEA Artery Disease Initiate Phase III advice process ACS Study N=5000 $29M Series B A-002 Phase II Start: (SPA) (Q4) ► VantagePoint $19M Follow-on PLASMA2 QD Financing ► Sofinnova ► Caxton A-001 IMPACTS ► Pappas A-001 Phase II ► HBM RESULTS (Q1) IMPACTS: Acute Chest ► Lilly Syndrome in sickle cell A-623 Initiate ► Shionogi A-623 Phase II IND patients Phase II (Q3) 2006 2007 2009 2008 - Confidential - 12

Summary • Dealing with international licensing requires specialized skills – In Japan, build confidence, trust and respect early – Focus on capabilities and matching with partner needs • True collaboration must be aligned – A JSC can ensure key decisions are handled appropriately – Alignment has significant upside when “it counts most” • Brining together the fundamentals can help even in complex transactions – Guiding principles help steer the way – Even when managing complex three-way negotiations - Confidential - 13

Sofinnova Ventures Venture Capital for Pharmaceutical and Biotechnology Spin Outs Presentation to New York Pharma Forum November 3, 2008 David S. Kabakoff Updated on August 2008

Sofinnova At a Glance Organizational Snapshot – Leading US VC firm with over $1B under management ($375M Fund VII) – Firm founded in 1974; core team investing together for 10+ years – Offices in San Francisco, San Diego, Tokyo – Close relationship with Sofinnova Partners (Paris) – 3 investors, 3 EIR’s, 1 Strategic Advisor, 2 Asia -focused BD professionals Investment Strategy – Back high quality, clinical stage therapeutic assets – Invest behind proven management teams – Deploy $15 – 25M over the life of a company (syndicate rounds of any size) for 20% ownership – Take an active role in the company at the board level – Back as long term partners; always support the company and the program 15

Sofinnova Life Sciences Team Investment Professionals Mike Powell, PhD Jim Healy, MD, PhD Anand Mehra, MD Cytel Corp Syntex Lab Executives in Residence Lars Ekman, MD, PhD David Kabakoff, PhD Jay Shepard, PhD NSDQ: DURA Business Development, Asia Keiko Mitsunobu Goro Takeda 16

Life Science Portfolio Product Sales Anza Business Model Partnering Platform Drug Discovery Clinical Development Commercial Company Stage = IPO, Acquired or S-1 Filed 17

Sofinnova’s Core Spin -out Expertise Pharmaceuticals Biotechnology Spin-outs Acquiring a Division or Mature Product from Established Company Benefits Significant R&D Investment by Established Company  Subhead Placeholder Mature Product/IP  Faster Path to Approval/Liquidity  Sofinnova’s Competitive Advantages Extensive Spinout Experience of SVP’s Partners  Knowledge of Deal Structuring and Incentives for Parent Companies  Track Record of Building Companies around Top Talent  18

Sofinnova’s Track Record of Spin -Out and Licensing Corporate Spin-Out Genentech and Connetics Roche Bristol Myers Squibb Medicis Janssen Ipsen Product Licensing Roche and Schering AG Baxter Amgen Shionogi and Lilly Kureha Dong A 19

Licenses from Japanese Pharma to VC backed Biotechs 20

Sofinnova Spin-outs from Asia Shionogi / Eli Lilly Kureha Dong-A(Korea ）  Focus and Speed in Development Number 1 priority in product pipelines  Quick decision making and aggressive timeline to meet development milestones  Keys for Success  High Quality of Management Team Experienced teams built specifically around in-licensed technology  Strong network among clinical / regulatory experts and KOLs   Strong Alliance Partnerships with Licensor Flexible deal structure to achieve mutual goals (win-win)  Strong personal relationships based on trust and cultural respect  21

Spin-out Deal Flow: Example - Trius. Conventional Wisdom: If you build it, they will come “Build a better mousetrap and the world will beat a path to your door.” VC Deal Flow: Example: Trius Therapeutics Jeff Stein is a Venture Partner at Sofinnova. • Together we founded Trius Therapeutics. • Trius licensed TR701 from Dong A Pharma • Raised $50M Sofinnova, Versant, Interwest, Prism, Kleiner • 22