Heather Davis September 27, 2011 Ottawa, Canada

1. Biotech to Big Pharma Personal Experience Heather Davis September 27, 2011 Ottawa, Canada

2. Coley’s founding technology:CpG oligonucleotides TLR9 agonists • Initial discovery was finding the molecular pattern in bacteria and DNA viruses that turns on the immune system shortly after infection • Specific DNA sequence known as “CpG motifs” • Activate through Toll-like receptor 9 found on certain immune cells • Coley discovered and developed synthetic CpG drugs • Platform technology with wide potential applications • Adjuvants for vaccines • Made current vaccines work better – can use lower doses (antigen sparing important during pandemic) • Allowed development of new types of therapeutic vaccines • Cancer immunotherapy • Treatment for asthma and allergy

3. Coley’s TLR Therapeutics™ Platform Progression RNA AGONISTS SMALL MOLECULES TLR7, TLR8 ANTAGONISTS TLR7, 8, 9 CpG TLR9 AGONISTS • Cancers • Infectious Diseases • Autoimmune andInflammatory Disorders • Lupus • RA • Cancers • Solid • Hematologic • Asthma & Allergy • Vaccine Adjuvant Coley’s Technologies Original technology Licensed from founders’ academic institutions New technology Developed in-house Licensed from 3M after much of original technology licensed out

4. Coley’s Timeline Co-founded by Art Krieg (U Iowa), Heather Davis (U Ottawa / OHRI) and Joachim Schorr (Qiagen) • Coley incorporated (1997 USA, 2001 Canada) • Incubated in Krieg & Davis academic labs until 2003 • PRE-CLINICAL • CpG as vaccine adjuvant • Oncology immune therapy & therapeutic vaccines • Autoimmunity • CLINICAL • 1st three CpG clinical (vaccine) studies run from Ottawa • LICENSING DEAL • Cancer immune therapy clinical trials • Hepatitis C immune therapy • Lupus/RA immune therapy Coley acquired by Pfizer 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4

5. Licensing Deals & Outcomes Took to Phase 1 – no clinical activity since In Phase 3 testing Took to Phase 1 – cancelled license No clinical testing Emergent – completed Phase 1, ongoing activities Took to Phase 1 – cancelled license Phase 3 trial failed

6. How to succeed in biotech • Founder characteristics • Secure financing • Recruit senior management • Valuable technology, protected by IP • Luck & timing

7. Founder characteristics • Hard working, driven • Adaptable • Able to wear many hats • Successful transition from academia to corporate world requires thinking differently • Hard working

8. Securing financing • Coley had 1 year funding from founder • Initial venture funding was Swiss / German investors who had previously invested in corporate founder • Subsequent rounds introduced US investors • No Canadian VC’s ever participated • Too late • Expected too much control for their investment

9. Recruit senior management • Founders rarely make good senior managers • Coley benefitted for 3 years by using senior management of another company • Coley later hired own management team • Huge advantage having head office in Boston area • Candidates with senior drug development experience are relatively rare in Canad • Critical hires since each represents a single point of failure • Drug development complex and only learned through experience • Senior executives coming from Big Pharma sometimes couldn’t scale down to biotech appropriate activities

10. Valuable technology • Technology must actually work • Positive clinical data trumps all • Selling technology on mouse data possible, but typically brings low value or back-loaded deals • Platform technologies have greater chance to succeed • Need to know when to let go • Unrealistic for biotech company to expect to develop pharmaceutical product to market • IP protection critical • Needs to be broad in scope and geography • IP protection costs escalate rapidly after provisional filing – difficult for academic unit to sustain until alternate financing secured

11. Wild cards • Luck • Timing