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Presenting Gonexin
December 13, 2001
Providing hope through extension and enhancement of life
MBA Consulting Team
Larry Morkre
Matt Narens
Rick Silva, Ph.D.
Brian Weninger
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Concept
Gonexin is a revolutionary, patented “smart drug” for cancer treatment. We have the expertise to guide Gonexin to commercial success in a market with huge profit potential.
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Management and Leadership
Dr. Paul Jarosz•Chief Operating Officer•Involved in commercial development of 58 pharmaceutical products•Clinical development executive with Geneva Pharmaceuticals (Novartis), Johnson & Johnson, and Syntex (Roche)
Introduction
Opportunity
Technology
Financial
Summary
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Dr. Terry Nett •Cofounder and board member•Internationally recognized expert in GnRH biology
Dr. Mike Glode•Cofounder and board member•Internationally recognized researcher in prostate cancer biology•Consultant on clinical trials for Leupron and Abarelix
Management and LeadershipIntroduction
Opportunity
Technology
Financial
Summary
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Global Pharmaceutical Market $400 B
Chemopreventatives $0.230.06%
Non cancer, w orldw ide pharmaceutical market $370.0
92.9%
Chemotheraeutics $15.153.8%
0.00%
Other $5.771.4%
Immunotherapies $0.140.04%
Blood Cell Factors $7.731.9%
Total Worldw ide Cancer Drug Sales $29.02
7.1%
2003
Introduction
Opportunity
Technology
Financial
Summary
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Industry Trends
• Trend away from toxic to “smart drugs”
• Shift from healthcare spending to pharmaceutical spending
• Small R & D firms have innovative advantage
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Opportunity
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Financial
Summary
Questions
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Market Growth Potential
• Up to 15% growth in human pharmaceutical market
• High risk begins at age 50
• Aging population
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Our Position
Hormone Therapy Agents
Non-ToxicToxic
Low Efficacy
High Efficacy
GonexinGonexinGonexin
Chemotherapeutic Agents
Radiation Therapy Surgery
Immunotherapy and Angiostatic Agents
Hormone Therapy Agents
Non-ToxicToxic
Low Efficacy
High Efficacy
GonexinGonexinGonexin
Chemotherapeutic Agents
Radiation Therapy Surgery
Immunotherapy and Angiostatic Agents
Introduction
Opportunity
Technology
Financial
Summary
Questions
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0
10
20
30
40
50
60
70
80
90
100
% p
enet
rati
on
Year 1 Year 2 Year 3 Year 4 Year 5
Gonexin Market Share
Market Share Growth
79,000 late stage cases of prostate cancer treated annually
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Opportunity
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• Industry publications
Marketing StrategyIntroduction
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Marketing Strategy
• Trade shows
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• Annual scientific and clinical meetings
Marketing Strategy
•Dedicated direct sales team•Web presence
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Bright Future• We are an innovative Research and
Development organization• Other potential indications for Gonexin
– Breast cancer– Colon cancer– Uterine cancers– Pancreatic cancer– Some forms of lung cancer
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The Product
• Two therapeutic indications- Prostate Cancer•Hormone therapy•Chemotherapy
• Gonexin
• Other Epithelial Cancers
Introduction
Opportunity
Technology
Financial
Summary
Questions
• Leupron, Zolodex, and Viadur only offer hormone therapy mechanism
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Normal Physiology
Gonadotroph
GnRH
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Gonadotroph
GnRH
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Testosterone
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Testosterone
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Testosterone
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Testosterone
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Gonadotroph
GnRH
Non Target Cell
Receptor
Testosterone
Introduction
Opportunity
Technology
Financial
Summary
Questions
Normal Physiology
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph
Leupron
Non Target Cell
Receptor
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Hormone Therapy Mechanism
Gonadotroph Non Target Cell
Receptor
Testosterone
Introduction
Opportunity
Technology
Financial
Summary
QuestionsGnRH
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Chemotherapy Mechanism
Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
Receptor
GnRH-Toxin
Introduction
Opportunity
Technology
Financial
Summary
Questions
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Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
Receptor
GnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
Questions
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Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
Receptor
GnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
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Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
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Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
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Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
Questions
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Gonadotroph
GnRH-Toxin
Non Target Cell
Receptor
Cancer Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
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Gonadotroph
Cancer
GnRH-Toxin
Non Target Cell
Receptor
Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
Questions
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GnRH-Toxin
Non Target Cell
Receptor
Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
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GnRH-Toxin
Non Target Cell
Receptor
Healthy Cell
ReceptorGnRH-Toxin
Chemotherapy MechanismIntroduction
Opportunity
Technology
Financial
Summary
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Non Target Cell
Healthy Cell
Chemotherapy MechanismIntroduction
Opportunity
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Financial
Summary
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Non Target Cell
Healthy Cell
Chemotherapy MechanismIntroduction
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Non Target Cell
Healthy Cell
Chemotherapy MechanismIntroduction
Opportunity
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Financial
Summary
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Non Target Cell
Healthy Cell
Chemotherapy MechanismIntroduction
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Key to Success• FDA Approval
– Safety of treatment– Efficacy of treatment
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Gonexin Launch
Introduction
Opportunity
Technology
Financial
Summary
Questions
Series B$5 M in funding40% IRR16.7% of equity sold
a
a $136 million premoney valuation
Liquidity event (IPO)$43.5 M in funding29% IRR33% of equity sold
Funding & Development Schedule
Series A$3 M in funding45% IRR17% of equity soldpreferred
Series C$15 M in funding33% IRR29.8% of equity sold
Scientific proof of concept
Drug safety and Phase I clinical trials
Phase II clinical trials
Phase III clinical trials
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$(100)
$(75)
$(50)
$(25)
$-
$25
$50
$75
$100
$125
$150
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Mill
ion
s
Year
Net Earnings
Cumulative Cash Flow
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Costs
Revenue
$0
$100
$200
$300
$400
mill
ions
Year 11 Year 12 Year 13 Year 14 Year 15
Profit Growth
Profit
Introduction
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Summary• Promising, patented “smart drug” • Market of over $2.6 billion annually• Precedence for capture of 80% of market • Demographic shift will catalyze market
growth• Foundation for a management team with a
track record of drug commercialization
Introduction
Opportunity
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Questions
Introduction
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Questions
Introduction
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Funding Required
Year Funding Required
Milestone % Equity IRR
1 $3 M Scientific Proof of Concept
17% 45%
2 $5 M Drug Safety,
Phase I
16.7% 40%
3 $15 M Phase II 29.8% 33%
5 $43.5 M IPOa Phase III 33% (96.5%)
29%
Introduction
Opportunity
Technology
Expertise
Financial
Summary
Questions
a $136 million premoney valuation
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Gonexin PriceHormonal Treatment
Administer Insurance Cost
Urologist Cost
Difference
Gonexin™
Once $9,500 $5,500 $4,000
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Opportunity
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Pricing Strategy
Hormonal Treatment
Administer Insurance Cost
Urologist Cost
Difference
Viadur Once/ Year $5,650
Surgery Once $4,000 N/A N/A
Lupron Depot
Once/ Quarter
$1,500 $750 $750
Zolodex Once/ Quarter
$1,125 $675 $450
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Opportunity
Technology
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Development TimelineIntroduction
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Development TimelineIntroduction
Opportunity
Technology
Expertise
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Summary
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Introduction
Opportunity
Technology
Expertise
Financial
Summary
Questions
Tes
tost
eron
e le
vels
Leupron
Abarelix (Planexis)
ExogenousTestosterone
Removal of GnRH agonistOr antagonist
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Market
• Over 198,000 men diagnosed with prostate cancer each year
• 2nd leading cause of male cancer death in the US
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Opportunity
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Earnings and Cash FlowIntroduction
Opportunity
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$(100)
$(75)
$(50)
$(25)
$-
$25
$50
$75
$100
$125
$150
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 1
0
Year 1
1
Year 1
2
Year 1
3
Year 1
4
Year 1
5
Mill
ion
s
Year
Net Earnings
Cumulative Cash Flow