Outline

1. The Development and Commercialization of New TechnologiesDiscovery Lecture SeriesPurdue UniversityTed T. Ashburn, MD, PhDSenior Director, Corporate Development Genzyme Corporationted.ashburn@genzyme.comNovember 9, 2007

2. Outline • Stages of Development for New Medicines • Genzyme Deal Criteria • 4 Things Every Start-Up Must Get Right • Key Takeaways

3. Target Discovery Discovery & Screening Lead Optim. Clinical Develop. Regis- tration. ADMET • Expression analysis • In vitro function • In vivo validation • Bioinformatics • In vitro • Ex vivo • In vivo • In silico • High throughput • Traditional Med. Chem. • Rational drug design • Bioavailability • Systemic exposure • Testing starts at Phase I (Phase I/II for cancer) • U.S (FDA) • E.U. (EMEA) • Japan (MHLW) • Rest of World 2-3 yr 0.5-1 yr 1-3 yr 1-2 yr 5-6 yr 1-2 yr 1. The Pharmaceutical Value Chain Idea! Drug • 10-17 years, $1.7 billion+ process • > 75 different disciplines • < 10% overall probability of success once a candidate enters clinical trials!!! Ashburn & Thor, Nature Reviews Drug Discovery, Aug, 2004, pg 673-683 Gilbert, Henske & Singh, IN VIVO, Nov, 2003

4. Target Discovery Discovery & Screening Lead Optim. Clinical Develop. Regis- tration. ADMET • Expression analysis • In vitro function • In vivo validation • Bioinformatics • In vitro • Ex vivo • In vivo • In silico • High throughput • Traditional Med. Chem. • Rational drug design • Bioavailability • Systemic exposure • Testing starts at Phase I (Phase I/II for cancer) • U.S (FDA) • E.U. (EMEA) • Japan (MHLW) • Rest of World 2-3 yr 0.5-1 yr 1-3 yr 1-2 yr 5-6 yr 1-2 yr Idea! Drug 2. Genzyme Deal Criteria • Significant Unmet Medical Need • Rare diseases • New Standard of Care • Risk-reduced Opportunities • Human Proof of Concept or later • Clear Regulatory pathways • Focused Call Point(s) • Not PCP’s • Partnerships • Desire to work together to create value • Both Regional and worldwide

5. 3. 4 Things Every Start-Up Must Get Right • Technology • Strategy • Team • Money

6. 1. Technology: Introduction • Either fills a current need (pain or greed) or creates a new market • VC’s like technologies that make you say Wow! • New technologies fall into 3 buckets: • “Wow! Let’s build a company around this technology!” • “Interesting, you should try to license it to Big Rx or one of our portfolio companies” • “Thanks for coming in to see us today”

7. 1. Technology: Patent Requirements • New or Novel: Two part test (US) • Cannot have been known, used or described by others • Must not have been known more than one year prior to filing the U.S. patent • Useful • In-vitro/vivo test results proving potential for human application • Non-obvious • Prove the invention is something more than an ordinary practioner in the field would have been able to do

8. Technology: Intellectual Property • Issued patent allows you to exclude others from selling your invention (Barriers to Entry) • Composition of Matter (COM) • Method of Use (MOU) • Do you have the ability to sell your invention without infringing someone else's patent (Freedom to Operate)? • Key safety tip: Don’t disclose until you file!

9. Hi Reward (a Time to Market, Differentiability & Revenue) Low Low Hi Risk (a Target Validity, Druglike Properties & the Development Pathway) 2. Strategy: Risk vs. Reward Trade Offs De Novo Repositioning Proteins In Licensing Reformulating Small Markets* • For example, rare diseases or diseases primarily incident in developing nations; government regulations have been enacted to reduce risk and/or raise potential reward for some small markets, e.g., orphan drug status • Ashburn & Thor, Nature Reviews Drug Discovery, Aug, 2004, pg 673-683

10. Target Discovery Discovery & Screening Lead Optim. Develop- ment Regis- tation. ADMET • Expression analysis • In vitro function • In vivo validation • Bioinformatics • In vitro • Ex vivo • In vivo • In silico • High throughput • Traditional Med. Chem. • Rational drug design • Bioavailability • Systemic exposure • Testing starts at Phase I (Phase I/II for cancer) • U.S (FDA) • E.U. (EMEA) • Japan (MHLW) • Rest of World 2-3 yr 0.5-1 yr 1-3 yr 1-2 yr 5-6 yr 1-2 yr Develop- ment Regis- tation. Identification Acquisition • May start at Preclinical, Phase I or Phase II • Ability to leverage existing data packages • Targeted searches • Novel insights • Specialized Screening platforms • Serendipity • Licensing • Novel I.P. • Both • U.S (FDA) • E.U. (EMEA) • Japan (MHLW) • Rest of World 1–2 yr 0–2 yr 1–6 yr 1-2 yr 2. Strategy: Drug Repositioning Idea! Drug • 3-12 year process • Reduced Safety & PK uncertainty Drug Ashburn & Thor, Nature Reviews Drug Discovery, Aug, 2004, pg 673-683

11. 3. Team • “Been there, done that,” a big plus • Leadership • VC’s want Wow! Leadership Teams

12. Government SBIR STTR Foundations Corporations Venture Capital Must raise enough to reach next value step up and have 6-9 months of runway Identification of a lead I/POC/III/NDA/Launch The higher quality the source, the better VC’s want to be a part of Wow! syndicates 4. Money: Where & How Much?

13. 4. Money: Midwest-Focused VC’s Firm/Meeting Contact Mina Patel Sooch mina@apjohnventures.com Teri F. Willey tfw@archdp.com Michael Janse mj@archventure.com Scott R. Naisbitt, M.D., Ph.D. snaisbitt@rivervest.com www.investmidwestforum.com

14. 4. Key Takeaways • Drug discovery & development is a long, expensive & arduous process • The Industry is Hungry for Innovation • Every Start-Up must get 4 things right • Technology • Strategy • People • $

15. The Development and Commercialization of New TechnologiesDiscovery Lecture SeriesPurdue UniversityTed T. Ashburn, MD, PhDSenior Director, Corporate Development Genzyme Corporationted.ashburn@genzyme.comNovember 9, 2007