Adventures in Biotechnology Boro Dropulic PhD, MBA

1. Adventures in Biotechnology Boro Dropulic PhD, MBA

2. Overview • Background • Decision to Start a Biotech • Biotech Business Models • Financing of Biotech Companies • Modes of Productivity & Relationship to Business Models • The relationship between Business Models and Investment • Case Study: Lentigen Business Presentation

3. Background • PhD in Australia (University of Western Australia) • Fogarty Fellow at NIH Bld 10 then Bld 4 • Embryonic Stem Cells • Gene Therapy • Johns Hopkins University • HIV vectors targeted to HIV infected cells (new IP) • VIRxSYS • First group to initiate and complete Lentiviral vector clinical trial (gene therapy for HIV infection) • MBA (Johns Hopkins University) • Lentigen • Broad business Model

4. Starting a Biotech Company • Defining the technology • Can the technology be used for multiple uses? • Licensing strategy vs starting a biotech company • If decision to start a company then: • What are the objectives? • Sell the company to large biotech or pharma • Grow the company and license out products • Organization and focus of the company • Single product focus  short term exit strategy • Multiple products  long term exit strategy

5. Therapeutic Biotech Business Model

6. Milestone driven value - technology

7. Financing of Biotech

8. Financing of Biotech OR Derive revenue streams from the sale of product or services (research tools products & services) Smaller market potential - more difficult to attract investors - revenue streams are much smaller than the therapeutic or vaccine markets - requires organic growth strategies

9. The Very High Risk Nature of the Conventional Biotech Business Model • High risk = high failure rate • Especially true for biotech focused upon development of biologics • Failure not always related to science • Investor understanding of the technology and product development cycle time is very important • Financing strategy must match product development cycle time

10. Potential Saving Graces • Government Grants (SBIR etc) • Private Foundation Grants • Contracts (Government or Private/Foundation) • Out-license portions of the technology • Other financing models

11. Chimeric Business Models for High Risk Technologies Long Lead Times to Therapeutic Markets Gene Therapy Cellular Therapies Stem Cell Therapy Vaccines (viral vector) RNAi (viral vector shRNAi) Therapeutics Therapeutics Validation / Growth Service / Research Products Service / Research Products Decreased Risk vs. Lack of Focus

12. Models of productivity Geoff Race CFO Pangenetics Index Forum 2007 Stresa, Italy “Young Genius” “Old Master” Femme à la resille (Woman in a hairnet), 1938, by Pablo Picasso. Still Life with Carafe, Sugar Bowl, Bottle, Pomegranates, and Watermelon, 1906, by Paul Cezanne value Paintings most valuable = early work Paintings most valuable = late-in-life work

13. Comparison of Productivity Models “Young Genius” • Innovation • Non-linear; concept • Short term horizon • Rapid, immediate • Low # of objectives • Single focus • Singularity of Purpose • Virtual; simplicity • High Risk • No track record • “Old Master” • Experimentation • Process driven • Long term view • Quality mindset • Higher # of goals • Competing priorities • Complexity/ Integrated • infrastructure • Low Risk • Track record

14. Comparison of Business Models Single product Biotech Company • Innovation • Short term horizon • Low # of objectives • Singularity of Purpose • High Risk • Concept Based Value Growth • Multiple product Biotech Company • Experimentation • Long term view • Higher # of goals • Complexity/ Integrated • Low Risk • Linear Value Growth

15. Comparison of Business Models Single Product Biotech • Innovation • Short term horizon • Low # of objectives • Singularity of Purpose • Multiple Phases • High Risk • Concept Based Value Growth • ACQUIRED • Multi Product Biotech • Experimentation • Long term view • Higher # of goals • Complexity/ Integrated • Life’s Work • Low Risk • Linear Value Growth • IPO - ALLIANCES BOTH ARE VALID GROWTH STRATEGIES

16. Growth Strategy Needs to Match Investor Strategy • Investor Strategies • Large number of singly focused companies vs few technological platform companies • Shorter exit time for singly focused companies, but high risk • Longer exit time for technological platform companies, but lower risk • Investor Sophistication Important • Choice of Investor Critical for ultimate success

17. Company Presentation January 2008

18. Safe Harbor and Confidentiality The following information is confidential and should not be distributed without the permission of Lentigen Corporation. This presentation contains certain forward looking statements based on Lentigen’s current beliefs and expectations about future events. These statements are subject to numerous risks, uncertainties and assumptions and are not necessarily predictive of future results. Actual results may differ materially from those anticipated in this presentation depending upon a variety of factors including development of manufacturing procedures, market size and revenues, potential competition, regulatory compliance, operating effectiveness and other factors that may not be currently considered as material.

19. Summary • Lentiviral Vector (LV) gene delivery technology • Four phase I/II clinical trials in 2008/9 • Eight NIH/DOD grants supporting future therapeutic pipeline • Alliance with ThermoFisher - LV RNAi research tools • Dominant Intellectual Property Position • Experienced management team and board of directors • Upcoming Milestones

20. Lentigen Overview • Established 2004 • Location: • Gaithersburg, Maryland 2008Q1 • 25,000 ft2; multi-product GMP facilities • Employees: 40 • Technology platform focus • Lentiviral vector mediated gene delivery • Areas of application • Vaccines & Therapeutics • Research and Drug Discovery Tools

21. Most efficient, stable gene delivery system known LentiMax™ LV system High titer, low toxicity Scalable manufacturing process Bench to clinic translatability Lentiviral vector (LV) gene delivery

22. Efficient & stable gene delivery with LV-GFP (Green Fluorescent Protein) Cells before addition of LV-GFP 98.7% Cells after gene delivery with LV-GFP Human kidney cells

23. R & D ANIMAL STUDIES SCALE UP PRE- CLINICAL IND PREP PHASE I/II CLINICAL Vaccine & Therapeutic Pipeline INDICATION GLIOBLASTOMA CANCER (GVHD) INFLUENZA VACC. ANEMIA HEPATITIS C LEUKEMIA (CLL) COR. ARTERY DIS. LYMPHOMA (EBV) HEMOPHILIA MELANOMA

24. Glioblastoma • 18,000 per year (USA) cases with comparable market in Europe • 50% malignant with 40 week survival • Market size estimate - $300 million+ • Easily addressable patient population • Patients concentrated at surgical centers • Limited sales force • Targeted physicians • No good current treatment available • Treatments limited by toxicity Temezolomide (TMZ) effectively treats disease • but prolonged TMZ treatment results in severe lymphopenia and thrombocytopenia  death

25. Glioblastoma therapy using LV-MGMT TEMEZOLOMIDE • Protection of stem cells from TMZ toxicity  longer TMZ treatment  better outcomes for patients • LV-MGMT can protect stem cells from effects of TMZ • Proof of concept shown in dogs and monkeys • Clinical trial endpoints are short – 3 weeks • CWRU (Dr S. Gerson) • Broadly applicable • CML, AML, HIV etc • IP exclusively licensed LV MGMT KILLTUMOR PROTECT STEM CELLS STEM CELLS Bone Marrow Transplantation

26. Graft versus Host Disease (GVHD) • In 2005: 7,250 allogenic transplants in USA and 10,000 worldwide • 50% develop chronic GvHD • Market size estimate - $300M to $500M • Potential for huge savings to healthcare system • Easily addressable patient population • Patients concentrated at transplant centers • Limited sales force • Targeted physicians • No good current treatment available

27. DLI + BMT AZT LV TMPK IF GVHDTHEN + AZT KILL ALLO T CELLS T CELLS STEM CELLS RECIPIENT GVHD therapy using LV-TMPK • Two technological advances • LV efficient gene delivery • TMPK human safety gene • Proof of concept shown in primary human T cells • Short clinical trial endpoints 3 weeks to 3 months • CRADA with NIH; 2 sites; Drs Gress, Fowler, others • Broadly applicable to other diseases – cancer, HIV etc • IP exclusively licensed DONOR

28. Pandemic & Seasonal Influenza • Influenza infects 10-20% of the population every year and causes 500,000 deaths • Approximately 300 million doses produced globally • Market Size = $1B in 2004, rapidly expanding market • Need for vaccine MFG efficiencies • Egg manufacturing not cost effective • Cell culture with L.A. virus is limiting • Need for development of a rapid and efficient cell culture based vaccine manufacturing platform

29. LV-IFVX Influenza VLP vaccine Synthesized gene cloned into LV 1 week • Rapid manufacturing platform • weeks not months MFG time • Virus Like Particles (VLP) • highly immunogenic • Exact strain match • no genetic drift during production • Continuous production of VLP • advantage over batch production • Safe • VLPs are genetically inactive • IP protected LV manufacture and QC testing 1 week LV transduction 1 day Scale Up cells 3 weeks Vaccine Purification 1 day

30. 0.800 0.600 Absorbance 0.400 0.200 0.000 1.5 2 2.5 3 3.5 4 4.5 5 Log Serum dilution Vaccine only Prebleeds Vaccine with adjuvant Potent Immune Response in Mice Strong immune response generated in mice against Lentigen’s H5N1 VLP vaccine (blue) and vaccine with adjuvant (purple); pre-bleed controls (red)

31. Biogenerics & Proprietary Biologics • Biologics that are coming off-patent are worth >$30B • Erythropoietin, cytokines, coagulation factors, antigens, McAbs • COGS critically important for competing in the protein MFG markets • Efficiencies gained by decreasing time to market • Efficiencies gained by increasing yield from cell lines • LVs can reduce time to market and decrease COGS • High copy numbers in cells without gene amplification • Integration in areas of open chromatin  higher expression

32. Erythropoietin production • Gold Standard • Efficient • Bulk CHO Cells > 2.5 g/L • No cell cloning • No selection • No enhancement of cell growth conditions • Levels of 5 – 10+ g/L attainable with isolation of cell clones

33. Alliance with ThermoFisher Scientific to market LV RNAi products Research & Drug Discovery Tools Pipeline RESEARCH & DEVELOPMENT PRODUCT LAUNCHED PRODUCT SMARTVECTOR RNAi* CUSTOM LVs LENTI-GFP, YFP, LUC LV MFG (GLP, GMP) PROTEIN EXPRESSION LENTIKIT LENTI PROMOTER LENTI cDNA LIBRARY LENTI RNAi LIBRARY LENTI EXPRESS KIT LENTI CELL LINES

34. SMARTvector Control SMARTvector GAPDH RNAi SMARTvector RNAi: Effective gene silencing GAPDH knockdown 9 days post-transduction with SmartVector shRNAi Lentiviral vector particles SHSY5Yneuronal cells Fixed and stained with GAPDH antibody (red) and Hoechst (blue)

35. Effective gene silencing in a wide variety of cells Neuronal cells Stem cells Suspension cells Suspension cells 75% Difficult-to-Transfect

36. Intellectual Property • Dominant patent estate for Lentiviral vectors • Lentigen (GBP IP) has acquired the entire Cell Genesys Lentiviral vector IP portfolio • Non-provisional patent coverage of: • Novel LV compositions and methods • Use of LVs for Influenza VLP manufacturing • Use of Novel LVs for protein manufacturing • Lentigen has exclusively in-licensed several key payload technologies • TMPK LentiSafe™ technology • MGMT LentiSelect™ technology • Lentigen continues to develop and in-license additional key proprietary intellectual property

37. Grants • Seven (7) SBIR Grants from National Institutes of Health • Leading Clinical Centers & Investigators • Oncology • Infectious Diseases • STTR Grant from Department of Defense • Efficient Manufacture of Monoclonal Antibodies in the National Stockpile • MIPS Grant • Development of new animal models for cancer

38. Experienced Management • Boro Dropulic, PhD, MBA - Founder and CEO • 19 years experience • Founder & CSO of VIRxSYS, Johns Hopkins University, NIH • Sponsor Investigator of first Lentiviral Vector Clinical trial in humans • Adam Sachs, MSE – President, Commercial Operations • 23 years experience • Life Technologies (now Invitrogen), Qiagen, Origene • Global Director for Manufacturing at Qiagen • Gregory Feulner, PhD, JD – VP, Business Development • 19 years experience • NIH, Johns Hopkins, Gene Logic Inc., Galileo Genomics, 3M • Yung-Nien Chang, PhD – VP, Vector Development • 22 years of experience • Johns Hopkins University, VIRxSYS, NIH, GTI (now Novartis)

39. Board of Directors • David Wetherell – Chairman of the Board • Former Chairman, CMGI, • Founder, Greenwich Biotech Ventures • Boro Dropulic, PhD, MBA • Douglas Lind, MD • Managing Partner of Accendx Management LLC • Former Senior Biotech. Equity Analyst at Morgan Stanley & PaineWebber • John McMullen, JD, MBA • Managing Principal of Cambridge Meridian Group • Republican Nominee for Senate, VT (2004) • Robert Breyer • Former President/COO of Alkermes • Former President and General Manager of Eli Lilly Italy • Barrie Carter, PhD • EVP and CSO of Targeted Genetics • Former Chief of the Lab. of Mol. & Cell Biology at the NIH

40. Upcoming Milestones • Initiate phase I/II clinical trials for GVHD & Glioblastoma • Complete pre-clinical studies for Influenza vaccine and Erythropoietin protein product • Continue development of pipeline for therapeutic & vaccine products, leveraging grant funding mechanisms • Expand alliance with ThermoFisher and other partners • Certify Lentigen’s new GMP manufacturing facilities • Complete additional financing