rad T. Sauer Executive Vice President, Health Care Business
Ezose Final Presentation
1. Ezose Sciences Inc.
Final Presentation
December 14th, 2011
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2. Company Overview JEFF
Relatively new company
Centrally located in heart of
pharmaceutical country
Focus on glycomics and biomarker
discovery
Multiple collaborations
completed / in progress
Ezose laboratory - Pine Brook, New Jersey 2
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3. Industry Snapshot JEFF
70,000 Pharmaceutical Industry Job Cuts
Ezose:
60,000
Biotech industry 50,000
40,000
Discovery, Research &
30,000
Development market
20,000
Customers: pharma and 10,000
biotech companies 0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Major trends and drivers: Top 5 Drugs From 2011 and 2012 Coming off of Patent Protection
Patent 2010 US Sales
Drug Condition Company
Expiration ($M)
Expense control 2012 Plavix Anti-platelet BMS / Sanofi $6,154
2011 Lipitor Chloresterol Pfizer $5,329
Generic drugs 2012 Seroquel Antipsychotic AstraZeneca $3,747
2012 Actos Type 2 Diabetes Takeda $3,351
Companion diagnostics 2012 Enbrel Arthritis Amgen $3,304
2012 Singulair Asthma Merck $3,224
Partnerships 2011 Zyprexa Antipsychotic Eli Lily $2,496
2011 Levaquin Antibiotics J&J $1,312
Biomarkers 2011 Concerta ADHD/ADD J&J $929
2011 Protonix Antacid Pfizer $690
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4. Industry Snapshot (cont.) JEFF
$B Research & Development Market
180
160
140 17.5% 18.8%
15.4% 16.4%
120 14.6%
14.7%
100
80
60
40
20
0
2009 2010 2011 2012 2013 2014
Outsourced R&D In House R&D
Growth Rates:
R&D Market -1.2% 7.7% 4.3% 3.5% 3.5% 3.5%
In-house R&D -2.6% 7.8% 3.2% 2.4% 2.2% 1.9%
Outsourced R&D 7.7% 7.2% 10.3% 9.8% 10.6% 11.2%
2009 2014 5 Year
Industry Mkt Value Mkt Value CAGR
Pharmaceutical $664.6B $860.4B 5.3%
Biotech $231.2B $366.7B 9.7%
Contract Research $18.1B $28.9B 10.0%
Biomarkers $8.4B $21.1B 20.2%
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5. Biomarkers MATT
Predict/prevent
disease
Predict drug Predict drug
response safety
Biomarkers
Monitor drug Personalized
response &
safety
medicine
Rx-Dx
combinations &
theranostics
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6. Glycomics MATT
What is it?
Study of sugars of a cell type or
organism
Involves complex, highly
branched structures
Glycans
Benefits
Underdeveloped and
$B Global Biomarker Forecast
underexplored field 18
16
Play critical role in bacterial and 14
viral recognition 12
10
Determine cancer development 8
6
Involved in cellular signaling 4
2
pathways and modulate cell 0
function Genomics
2010
Imaging Proteomics
2015
Bioinformatics Other
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8. Cost
Tech
Location
Revenue
Resources
Reputation(aka
Industry Standard)
Speed/Throughput
STRONG
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9. Ezose - Strengths and Weaknesses
ERIC
Strengths Weaknesses
Technology: GlycanMap allows for Size: limited number of projects
high-throughput glycan analysis they can take on due to having only
one location, low headcount, and a
Small size: flexible; customizable small amount of machines
services
Reputation: Company is only a
Location: centrally located in New couple of years old, is still trying to
Jersey, the top pharmaceutical build up its reputation
state in the U.S.
Inefficiencies: New company, still
Staffing: talented and experienced needs to work out their
staff inefficiencies
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10. Opportunities ERIC
Plans to Outsource Biomarker Discovery:
Within the Year Within a Few Years Not at All
Source: Primary Research
$B Biomarker Market
35
30
25
20
15
10
5
0
2009 2010 2011 2012 2013 2014
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11. Business Strategy ERIC
Strategic Statement
Ezose strives to increase contracts by 50% in 2012, while becoming a self-
sufficient company that is recognized as the premiere name in glycomics by
2014. This will be accomplished by leveraging Ezose’s revolutionary
proprietary glycan technology to discover and develop new biomarkers quicker
and at a lower cost than their competitors, while retaining intellectual property
rights for themselves and their parent company Shionogi.
Objective:
To increase market awareness of its unique
services while focusing on internal growth
and increasing the number of research contracts
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12. Critical Success Factors ERIC
Promote Ezose throughout the biotech and pharmaceutical industry
Industry Recognition
Do you have a firm understanding of Biomarker Discovery?
Do you have a firm understanding of Glycomics?
Have you heard of Ezose?
If Yes, do you have a firm understanding of what they do?
Yes No
Industry recognition estimated based off of primary research as well as collection of secondary research
Obtain key partnerships with mid/large sized pharmaceutical or biotech
companies
Expand into a second lab as more partnerships are obtained
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13. Recommendations JEFF
Marketing Plan
1. Build upon current actions
• Trade Shows, Public Relations
Firm, Publications
2. Hire a customer relations
management (CRM) team
3. Target specific companies
4. Aggressive pricing
Reasons for Outsourcing R&D
Cost-effective
Lack of In-house capacity
Vendor expertise
Time savings
Regulatory certification
Lack of in-house knowledge
Quality of results
From Science Advisory Board 13
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14. Recommendations(cont.) – Target Companies
JEFF
14% Biomarker Deal Activity by Therapeutic Focus
12%
10%
8%
% of Deals
6%
4%
2%
0%
Industry Perception of High-
throughput Glycan Analysis
Autoimmune / Inflammation
Cardiovascular
Dermatology
Endocrine / Metabolic Systems
Gastrointestinal
Infectious Disease
Neuroscience
Oncology
Renal
Other
More Beneficial Less Beneficial
Target companies with focus on Oncology, Autoimmune / Inflammation & Neuroscience
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15. Recommendations (cont.) ERIC
Operations
1. Talent retention and acquisition
2. Expansion
3. Legal counsel
4. Strategic Alliance???
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16. Summary MATT
The Pharma/Biotech Industry is trending in the right direction:
Outsourcing of R&D, Biomarkers, Companion Diagnostics,
Partnerships
GlycanMap technology is revolutionary
Must act with a sense of urgency
The plan:
Increased market awareness
Increased revenue through new contracts
Increased growth
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Notas del editor
Companion diagnostic –A diagnostic test used to predict the likely clinical effectiveness and/or safety of a particular therapeutic intervention for a specific individual; the term is most often used to describe a molecular diagnostic test that stratifies a patient population with regard to the likelihood of response to, or the safety of, a pharmacologic therapy.Biomarker discovery for applications in drug discovery, preclinical studies of drug development and diagnostics research applications was the largest and accounted for nearly 48% of the total marketing in 2007. This market is expected to grow at a CAGR of 16.9% to reach nearly $6b by 2012, somewhat vindicating companies such as Vermillion (formerly Ciphergen) turning their back on instrumentation sales to focus on discovery programmes. The second biggest segment was found to be the use of biomarkers on molecular diagnostics applications which was estimated to be worth $2.3b in 2007. The report predicts this market will grow at a CAGR of 17.5% to be worth $5.2B by 2012. This market will provide the point-of-care and laboratory based diagnostic tools that enable a more informed ability to choose the right drug for a disease and patient.While currently the smallest business segment, having been valued at around $612M in 2007, the clinical trials market has been predicted to see the largest growth rate with a CAGR of 23.5%. This growth would see the market for biomarkers in clincial trials reach $1.8b by 2012, and has already been spotted by many CROs with Covance having luanched a biomarker expert team earlier this year.The report suggests that the use of biomarkers to aid the discovery, testing and prescription of oncology therapeutics will be one of the biggest application areas. Applications in the cardiovascular and centralnervous system areas are expected to grow during the next 7 years. Advances in technology that enable faster metabolomic, proteomic and genomic data acquisition as well as its integration with clinical trial data using bioinformatics software will all be major driving foces behind the growth of this burgeoning area.
From Wikipedia:The following are some of those functions:Glycoproteins found on the cell surface play a critical role in bacterial and viral recognition.They are involved in cellular signaling pathways and modulate cell function.They are important in innate immunity.They determine cancer development.They orchestrate the cellular fate, inhibit proliferation, regulate circulation and invasion.They affect the stability and folding of proteins.They affect the pathway and fate of glycoproteins.There are many glycan-specific diseases, often hereditary diseases.There are important medical applications of aspects of glycomics:Lectins fractionate cells to avoid graft-versus-host disease in stem celltransplantation.Activation and expansion of cytolyticCD8T cells in cancer treatment.Glycomics is particularly important in microbiology because glycans play diverse roles in bacterial physiology.[5] Research in bacterial glycomics could lead to the development of:novel drugsbioactive glycansglycoconjugate vaccinesSeparation:BlotGlyco®—Ezose Sciences employs Glycoblotting technology, which is faster and easier than conventional methods. This rapid chemoselective process features an “all-in-one” bead-based platform technology that enriches oligosaccharides from crude mixture, enabling highly selective and high-throughput (profiling of 30–40 kinds of major glycoforms) purification of oligosaccharide. Only a small sample is needed for a full analysis. Results are proven comparable to standard methods.SweetBlot® Automated ProcessingSweetBlot®—Ezose Sciences’ SweetBlot technology provides for fully automated, high-throughput glycan sample processing, thus reducing operator error and standardizing results. (Current capacity of ~180 samples/day, and scalable)MALDI-MS Quantitative DetectionQuantitative MALDI-MS—Ezose Sciences uses a unique protocol in combination with MALDI mass spectrometry that enables sample identification and quantitation with reproducibility comparable to HPLC, yet at a far greater throughput. Both neutral and acidic oligosaccharides are simultaneously quantified.GlycanMap® ReportA detailed glycosylation profile that can be employed to achieve a variety of endpoints related to process development, formulation, stability, quality control and biomarker discovery.
OfferingUses its patented GlycanMap technology to provide high-throughput testing for clientsTesting of samples previously took days or even weeksEzose’s technology allows for a complete test to be done in a day
I would just summarize the statement as saying, 50% increase in contracts by leveraging their unique technologyAcceptance of more Fee-for-Service (Cost + 20%) contractsReturn business = future royalties/IP rights
Glycomics is a young, developing field.
Customer TypePharmaceutical and Biotech CompaniesRequest glycan mapping and/or biomarker analysis to assist their own preclinical/clinical researchMay use Ezose’s service to produce commercially viable therapeutic, diagnostic, or companion diagnostic productswould prefer to pay, as per industry standard, a fee-for-service of cost plus 20%may offer royalties or intellectual property rights for applications developed from the research
A purchase of a third GlycanMAP instrument by the end of 2012Increased research capacitySelf-sustainabilityStrategic Alliance:Being small can have its advantages – it offers flexibility to respond to changing market trends faster than larger competitors can and can also make for more personalized relations with the customer. However, being small can also have its limitations. One of the smaller CROs, Pacific Biomarkers, with a similar business model as Ezose, realized that clinical trial services are increasingly required to be global and that services offered by a single location often cannot meet sponsors’ turnaround time requirements, may be cost-prohibitive (due to shipping costs) or may not accommodate sample stability restrictions. Because of this, they teamed up with Quintiles Laboratories, one of the larger CROs, to match their core capabilities and expertise with the global logistics offered by Quintiles to successfully support large, multinational clinical trials (Ehlers). While Ezose does not need to form a strategic alliance with a larger company in the current environment, if the threat of industry consolidation and the dominance of larger CROs make survival on its own impossible, Ezose should look to partner with a company similar to Quintiles, such as Covance, PPD or Charles River.
Sense of urgency:Companies are currently in the market for Biomarker discoveryPharmaceutical and biotech companies are consolidating the number of firms they outsource work to