Commercialization of Ossabaw
Swine for Biomedical Research
Yingkai Cheng
Jeff Fill
Ziqing Liu
Jessie Lu
Robbie Singh
Tom West
February 23, 2011
Objective & Short-term Goal
•Project Objective: Demonstrate that Ossabaw Swine research
is a viable model being based in the University and as a
commercialized venture
•Short-term Goal: Demonstrate viability of the Ossabaw
Swine Resource Center by:
• Demonstrating the advantage of using
Ossabaws in research
• Proposing implementation of a Tiered Fee
Schedule
Improving Revenues in Short-term
• Currently Revenues< Costs
• Price increases on contract studies & swine sales
• Internal Studies (Indiana’s universities): 11% price increase
• External Studies (all others): 17.5% price increase
Additional Services
* Imaging Studies (CT, MRI)
$75.00
+ Service Fees
* Organ/ Tissue/ Other Parts
$75.00
+ Service Fees
Long-term Goals
•Long-term Goal: Prepare a value proposition to
commercialize / license sale of Ossabaw swines to
a prospective vendor
•The path to commercialization will:
• Maintain solvency of the Ossabaw Swine Resource
• Optimize available funding options
• Respect required University procedures
• Suggest marketing & promotional avenues
• Establish milestones for funding and strategic initiatives
Market Segmentation
2%
9%
39%
50%
Source: PubMed keyword search: breed + miniature swine
Why use Ossabaw Swines?
Advantages of Ossabaw Swine in Metabolic Syndrome Model
Characteristic
Yucatan (Yuc)
Ossabaw (Oss)
Obesity
No
Oss > Yuc
Insulin resistance
No
Yes
Glucose intolerance (IGT)
No
Yes
Dyslipidemia (↑LDL/HDL)
Yes
Yes
Dyslipidemia (↑triglycerides)
No
Yes
Hypertension
No
Yes
Uses of Ossabaw Swine for Translational Research
* Metabolic syndrome model
* Exercise physiology
* Percutanous catheterization, stents
* Xenotransplantation
* Cutaneous wound healing
* Polycystic ovary syndrome
* Neonatology
*Lithotripsy treatment of kidney stones
* Endothelial progenitor cell biology
* Alzheimer’s disease
* Cardiovascular disease model
* Kidney function and disease
* Dietary probiotics
* Electrical stimulation of gastrointestinal tract
* Bladder function and disease
* Pancreatic beta cell function and isolation
* Non-alcoholic steatohepatitis
* Adrenal hormone regulation
* Diffuse idiopathic skeletal hyperostosis
* Vocal cord physiology
Path to Commercialization
Address CTSI
Member Concerns
Ossabaw
Swine
Resource
IU / Purdue
IRBs
Negotiation with
Exemplar
Implementation
Phase 1
Phase 2
Phase 3
2011-14
2014
Revenues
2015
Joint Operations
Phase 4
2016-17
Commercialization Plan
Commercialization Plan
Inflection Points
• R&D Partnership with
Exemplar Genetics
• Royalties and
milestone payments
• Transgenic & gene
knock-out capabilities
• Continued research at
Ossabaw Resource
• Upfront licensing fee
• Milestone payments
• 1% royalty on sales
• Profits split:
• 55%: Ossabaw Resource
• 45%: Exemplar Genetics
Costs & Considerations
Ossabaw Swine
Resource:
• Revenue Growth
• Increase Market
Visibility
• Conferences
• Clients’
publications
• Ossabaw website
• LARC at IUSM
Exemplar Genetics Costs
•Milestone payments
• Signing: $1 million (M)
• Year 6: $0.5 M
• Year 12:$0.75 M
Ossabaw Swine
Resource:
• Pays 50% to Purdue
• Milestones: $2.25 M
• Royalties: $8.1 M
• 55% Revenue: $23.3M
• Royalties Paid: 1%
• Total cost: $1.94 M
• Total cost: $2.3 M
• NPV: $655,933 (best)
• NPV: $55,000 (worst)
• ROI: 21.2%
• NPV: $1.3 M (best)
• NPV: $0.385 M
(worst)
• ROI: 28.7%
Phase 1-2
2011-14
Phase 3-4
2015-30
NPV Summary for Exemplar
Assumptions:
• Price growth rate is in accordance with hypothetical US inflation rate, plus
annual price growth rate
• Between current & new clients, achieve 10% market share
• Annual price growth keeps pace with inflation plus price growth rate (7%); in
2020 when transgenics / knockout models developed, mark-up is 25%
• Discount rate= 30%
NPV Summary for
Ossabaw Swine Resource
Recommendations
• 2011-14: Increase Revenues by expanding client base
• Market Ossabaws to Universities & Life Science companies in
Indiana
• Increase National visibility through conferences, journals, Website:
http://physiology.medicine.iu.edu/people-in-physiology/michaelsturek-ph-d/#ossabaw-miniature-swine
• Adopt the proposed tiered pricing system for internal &
external clients
Recommendations cont’d.
• 2015: Form R&D Partnership with Exemplar
Genetics (Iowa)
• Exemplar Genetics provides desired expertise in
transgenic & knock-out models
• An R&D partnership allows Ossabaw Swine
Resource to continue their research work
Thank You!
Questions?