CONFIDENTIAL INVESTMENT PRESENTATION
www.VivioneBiosciences.com
Symbol “VBI” (TSX Venture Exchange)
1
FORWARD-LOOKING STATEMENTS
Some of the statements contained herein including, without limitation, financial and business
prospects and financial outlooks, may be forward-looking statements that reflect management’s
expectations regarding future plans and intentions, growth, results of operations, performance,
and business prospects and opportunities. Words such as “may,” “will,” “should,” “could,”
“anticipate,” “believe,” “expect,” “intend,” “plan,” “potential,” “continue,” and similar
expressions have been used to identify these forward-looking statements. These statements
reflect management’s current beliefs and are based on uncertainties. A number of factors could
cause actual results to differ materially from the results discussed in the forward-looking
statements including changes in general economic and market conditions and other risk factors.
Although the forward-looking statements contained within this presentation are based upon
what management believes to be reasonable assumptions, management cannot assure that
actual results will be consistent with these forward-looking statements. Investors should not
place undue reliance on forward-looking statements. These forward-looking statements are
made as of the date hereof and we assume no obligation to update or revise them to reflect
new events or circumstances.
2
Company Overview
• Vivione Biosciences is a technology and life sciences company focused on rapid bacterial
detection
• The company has developed a proprietary diagnostic system called RAPID-B, which tests
bacteria in critical environments and provides quantitative results in seven hours or less
• We believe that RAPID-B is the fastest, most accurate, and most cost-effective diagnostic
testing system currently available for detecting bacteria
• Vivione is in the process of commercializing the RAPID-B system for several multi-billion
dollar markets, including clinical in-vitro diagnostics, oil & gas, and food safety
3
COMPANY BACKGROUND
• Vivione Biosciences was founded in 2006 under a Cooperative Research and
Development Agreement (CRADA) with the Food and Drug Administration
• RAPID-B was developed in collaboration with the FDA’s National Center for Toxicological
Research
• Vivione and the FDA have jointly filing patent applications
• Vivione has received exclusive licensing rights from the FDA
• Vivione Biosciences became a public entity in April 2013 through a Capital Pool
Company (CPC) merger
– Raised $6 million concurrently with the merger
– Currently listed on TSX-V
• Headquartered in Dallas, Texas – with world class labs in Little Rock, Arkansas
4
Investment Highlights
• Vivione has been gaining traction in the Oil & Gas market – and is currently negotiating
approximately $5mm in purchase orders
– Quotes already sent to several Fortune 500 companies
• Vivione is currently launching clinical pilot studies at the Cleveland Clinic and
Northwestern University
• Vivione is seeking to acquire Trillium Diagnostics – a company focused on discovering and
commercializing novel cellular biomarkers used in flow cytometric analysis.
• The Trillium acquisition will be immediately accretive - and will add revenues, IP, and
customers within the clinical diagnostic market
5
THE RAPID-B SYSTEM
Flow ->
Sample
Real-time
Software
Processing
Sheath Fluid
Flow Cytometer
2 Laser plus
six
Photo Multipliers
Sized-based
Detection
Viability Screen
of the Target
Specific Target
Detection
RAPID-B Instrument
1-Minute Analysis
Finding bacteria in a sample is akin to finding a needle in a haystack. The RAPID-B
technology analyzes every ‘needle’ superfast - to find the bacteria of interest.
6
RAPID-B: SYSTEM HIGHLIGHTS
RAPID-B’s Flow Cytometric system produces faster,
more precise, and more cost-effective diagnostic results
• PROPRIETARY: Joint patents filed with the FDA,
exclusive licenses with the FDA
• SPEED: Generates results in substantially less time
than competing technologies
– 15 min to 8 hrs (RAPID-B) vs. 24 hrs to 28 days (Competitors)
RAPID-B System
Hardware
Software
+
• ACCURATE: Capable of counting the exact number of
bacteria cells – providing greater accuracy and
sensitivity. Can detect both live and dead cells minimizing false results
• RUGGED: Durable and easily operated by lab
personnel in the field
• COST EFFECTIVE: Saves customers money through
improved efficiencies, reduced chemical costs, and
longer-lasting equipment
Wetware
7
RAPID-B: TARGET MARKETS
The RAPID-B system provides rapid bacteria detection in multiple markets
1. Clinical Market Applications – commercialization in 2015
2. Oil & Gas - commercialized in 2014
3. Food Processing and Distribution - commercialized in 2014
8
Market Opportunity: Clinical Diagnostics
Addressable Market:
•
$12billion global microbiology market (approx $6BB U.S. market)
•
$3BB global sepsis market
Target Customers:
•
Hospitals and clinics
•
Large commercial Labs
Product opportunities:
•
More than 20 million blood cultures ordered in U.S. annually
•
Average number of blood/urine tests performed per ICU: 100 per day (3,000 per month)
RAPID-B Benefits:
•
Able to detect bacteria in blood and urine within hours (vs. days) - providing the physician with the information
necessary to prescribe the proper antibiotic, and potentially saving lives and reducing patient’s stay in the hospital
•
Cost-effective screening method to determine which antibiotic is most effective
•
Trillium’s patent on CD64 allows physicians to diagnose the probability of a patient becoming septic faster than the
current Procalcytonin test.
•
Successful completion of UTI pilot study at Cleveland Clinic (100% sensitivity/85% specificity at 15 minutes vs 48hrs)
Certification:
•
FDA Certifications required (Trillium acquisition will provide CE mark)
9
CLINICAL COMPETITIVE ADVANTAGES
Current Method
Time to Results Vivione
Advantage
Blood
Culture
Screen
CO2 detection
(BioMérieux,
BD, Trek)
18-72 hours
Speed to result
Flow(3-5 hours) cytometric
Quantification
Urine
Culture
Screen
Gram stain, Culture
plate, Sysmex
24-72 hours
FlowSpeed to result (3-6
cytometric hours) - Quantification
Pneumonia
Etiology
Gram stain, Culture
plate
48-72 hours
Speed to result (2-4
Flowhours) - Sensitivity &
cytometric
Specificity
Sepsis
Etiology
Molecular methods
(Roche, BD, Cepheid)
Culture methods
20-72 hours
FlowSpeed to result (3-5
cytometric hours) - Quantification
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DRUG SUSCEPTIBILITY
Direct Analysis Drug Susceptibility Analysis
Time to Results
Parameters
Assessed
Broth Dilution
12-18 hours
Turbidity
eTest BioMérieux
12-18 hours
Plate
Inhibition
Current Methods
Disk Diffusion
16-24 hours
Plate
Inhibition
Automated,
BioMérieux, BD,
Siemens
3.5-24 hours
Growth
Density
Vivione Time to
Results
1.5 to 2 hours
Vivione
Parameters
Assessed
Both Growth
and
Morphology
11
ACQUISITION: TRILLIUM DIAGNOSTICS
Trillium is a diagnostic development company focused on discovering and commercializing
novel cellular biomarkers to be used in flow cytometric analysis. Trillium’s lab is located in
Bangor, ME and the company currently has 5 employees.
Trillium’s approach has several advantages over traditional blood biomarkers:
1.
2.
What cells are expressing the biomarker which can add a high level of sensitivity to the disease
diagnosis.
How much of the biomarker is expressed.
Trillium's core products are:
1.
2.
3.
Leuko64 (sepsis and therapeutic response in septic patients)
CD163 (inflammation)
Fetaltrol (reagent used to assess maternal-fetal hemorrhage)
Vivione has presented Definitive Documents and has exclusivity through December 31, 2014, with the
ability to extend for an additional 30 days. Completion of acquisition is contingent upon signing of
Definitive Documents and Funding.
12
TRILLIUM ACQUISITION: BENEFITS
Benefits of the Trillium Diagnostics acquisition include:
•
Adds revenue immediately
• $1mm in 2014
• $3.1mm in 2015 (est.)
•
Adds intellectual property
• CD64 test has already received CE Mark (Europe’s equivalent to FDA approval),
which provides immediate access to the European clinical market
• FDA De Novo application in process
• Over 20+ white papers showing CD64 is more sensitive/accurate than current
market leader – Procalcytonin ($100MM +/Year Revenue)
•
Adds deep experience
• Trillium’s staff has over 30 years extensive experience in both research and
clinical practice with laboratory hematology and diagnostic flow cytometry
• Dr. Bruce Davis is an industry expert in flow cytometry and will assume CSO role
at Vivione
13
TRILLIUM ACQUISITION: TERMS
Vivione will acquire 100% of Trillium debt-free through cash and stock purchase
Approximately 60% of consideration is based on milestone achievement
Cash portion:
• $1,500,000 cash at Closing
• $500,000 cash earnout if Trillium achieves $1mm in revenue in 2014
• $1,000,000 cash earnout if Trillium obtains FDA approval for CD64 by June 30, 2015
Stock portion:
• $4,000,000 in stock at Closing (minimum of $.35 per share)
• $8,000,000 in stock as earnout based on achieving certain FDA approvals
(At market or $.35 minimum)
14
Market Opportunity: Oil & Gas
Addressable Market:
•
$2.9 billion worldwide ($1.3 billion U.S. only)
Target Customers:
•
Oilfield Services companies (i.e. Hydraulic Fracturing, Water Treatment)
•
Oil & Gas producers
Current Customers:
• Apache Energy purchased RAPID B Unit
• Trican, Green Energy purchased WCT and BET services
Product opportunities:
•
Fracing uses large volumes of water supplied from numerous sources, which must be tested repeatedly for the
presence of bacteria
•
Biocides are often used to treat contamination of water, fluids, and wells and require repeated testing in order to
confirm the elimination of bacteria
•
Typical frac company performs 240-400 bacteria tests per month (4 frac jobs per month, 60-100 tests per job)
•
Custom-Developed Reagents to identify sulphur-reducing bacteria (SRB) and acid-producing bacteria (APB)
RAPID-B Benefits:
•
Quickly and accurately identifies bacterial contamination that can cause scale formation, pitting of steel, stress cracks
– which ultimately reduce the production capability of wells
•
Enables companies to test fluid samples on location - providing valuable results in minutes (vs. days) and allowing for
immediate fluid remediation
•
Optimizes biocide utilization
15
Oil & Gas Competition
Current Method
Time to Results
Vivione
Advantage
Flow-cytometric
Speed to result - (≤20 minutes)Quantification
Flow-cytometric
(UNDER DEVELOPMENT)
Speed to result (Estimated ≤2
hours) – Speciation &
Quantification
Flow-cytometric
(UNDER DEVELOPMENT)
Speed to result (Estimated ≤2
hours) – Speciation &
Quantification
≤60 minutes
ATP (LUMINULTRA)
Total Bacteria Count
qPCR (BiSN; ALS)
≤3 Days
GHB MPN Bug Bottles
(Biotechnology Solutions; BTI)
≤20 Days
MPN Bug Bottles
(Biotechnology Solutions; BTI)
≤28 Days
qPCR (BiSN; ALS)
≤ 3 Days
Sulphur Reducing Bacteria (SRB)
Lateral Flow (Modern Water;
≤ 30 minutes
Bactiquant)
MPN Bug Bottles
≤20 Days
(Biotechnology Solutions; BTI)
Acid Producing Bacteria (APB)
Well Characterization Test
qPCR (BiSN; ALS)
≤3 Days
Molecular methods (BiSN;
Taxon Biosciences; GENEWIZ
Metanome; Ubiome;
SeqMatic)
14-90 Days
Molecular methods Speed to result (≤7 Days)
16
Vivione Management Team
Kevin Kuykendall - Chairman and Chief Executive Office
Mr. Kuykendall has more than 20+ years in senior management positions for Fortune 100 to early stage companies and has
experience in fund raising and operations. Mr. Kuykendall is currently CEO of Vivione Biosciences, Inc. and was instrumental in taking
the company public on the Toronto Stock Exchange, raising $6 million, and commercializing the Company’s products in 2013. He was
also a Founding Member and CEO of White Energy (Ethanol Producer) and Health2O (Nutraceutical). Mr. Kuykendall raised over
$490MM in equity/debt for White Energy and developed $750MM in Revenue within the first 36 months of operations. Kevin played
major league baseball for the Cleveland Indians and has a Bachelor of Science degree in Business Administration from Western
Oregon University.
Dr. Gombrich serves as Chief Medical Officer (CMO) has approximately 20 years of development experience in the In Vitro diagnostic sector,
namely around infectious disease and cancer testing. Dr. Gombrich was instrumental in market development of several rapid diagnostic assays for
pneumonia-related pathogens, including the Binax (Alere) Rapid Legionella Assay and Pneumococcal Urinary Antigen tests. This included postmarket clinical study design and the creation of sales and marketing educational content. Dr. Gombrich also has been involved in product
development of a point-of-care cervical cancer screening test aimed at the developing world. Dr. Gombrich received his Medical Degree and
Masters degree in Experimental Pathology from Case Western Reserve University in Cleveland in 2005.
Chester J. Jachimiec, serves as the Chief Financial Officer (CFO) of the Company. Mr. Jachimiec has over 30 years of experience in law, public
accounting, finance, corporate development and product commercialization in the technology and energy industries. He has been a founder, and
involved in the capitalization and growth of several public and private companies in the facilities services, fuels and lubricants distribution, oilfield
services, software and bio-diagnostics industries. Mr. Jachimiec was an initial founding shareholder and director of PACEpartners Inc., the
predecessor by merger of the Company. Mr. Jachimiec holds a Bachelors of Business Administration in Accounting from Loyola University of
Chicago and a Juris Doctorate from Northwestern University School of Law.
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Vivione Senior Management (Cont’d)
Dr Bruce H Davis will serve Chief Science Officer (CSO) upon closing of the Trillium transaction and is a recognized international
leader in the fields of laboratory hematology and diagnostic flow cytometry. He has had over thirty-five years experience in academic
medicine following receiving his M.D. and B.S. degrees from University of Connecticut and Cornell University (pathology faculty at
SUNY Upstate Medical Center, Dartmouth-Hitchcock Medical Center and Wm Beaumont Medical Center). Dr Davis has been active in
laboratory standardization (Past Chair CLSI Hematology Committee, CAP Hematology Resource committee for 10+ years, and past
Treasurer and board member for International Council for Standardization of Haematology; lead author of several practice guidelines
and consensus guidelines in clinical cytometry), leadership in diagnostic medicine (co-founder, Internal Society for Laboratory
Hematology; recipient of Bernd Houwen Award from ISLH; past-President, charter board member and recipient Wallace Coulter Award
, International Clinical Cytometry Society; Mentor of Year award, CLSI), and as an innovator within the in vitro diagnostic field (founder
and president, Trillium Diagnostics, recipient of 2007 Innovator of the Year from Maine International Trade Center and 2009 Frost &
Sullivan's European IVD Innovator of the Year Award). He has over 100 peer-reviewed publications is currently focused on the
establishment in clinical practice of the patented innovative biomarkers (neutrophil CD64 expression, soluble CD163 levels, and cfDNA
quantitation in blood) in the area of infection/sepsis detection and clinical monitoring, while continuing to improve maternal
healthcare with superior IVD tools for monitoring fetomaternal hemorrhage. Dr Davis is currently working full time in the IVD
diagnostic field through Trillium Diagnostics after over 25 years in medical practice as a board certified hematopathologist in both
academia and large esoteric testing national laboratories.
Mr. Springfield serves as the Senior Vice President of Sales and Marketing and has over 15 years of Marketing and Sales experience in
the Clinical realm. Mr. Springfield’s leadership has been instrumental in the growth and success of early stage companies by
penetrating and growing multimillion-dollar accounts and driving top line revenue and bottom line profit growth. He has responsibility
for the company's Global Marketing and Sales groups. His organization is responsible for positioning Vivione's growth strategy,
cultivating opportunities in new and existing customer markets and growing demand for Vivione's solutions globally, as Vivione
establishes itself as the #1 Rapid Diagnostics company in the world.
Ms. Bradford serves as Director of Sales and Marketing for Vivione and has over 15 years’ experience in Sales and Marketing, Product
Development and Manufacturing in the Clinical and Nutraceutical sector. As a Certified Nutritionist, Pharmacy Technician and Health
and Fitness writer she combines her knowledge of nutrition, pharmaceuticals and health conditions with her innate ability for strategic
business planning to create and execute sales strategies for companies looking to expand their product offerings and portfolio. Ms.
Bradford has received industry awards for Best Practices in developing sustaining business models that significantly and consistently
drive revenue. Her strategic know-how blended with the right amount of thought leadership has enabled her to build a sales model
that connects a variety of industries including clinical, nutraceutical, food safety and oil and gas.
18
THE OFFERING
CAN $10,000,000
Vivione Biosciences, Inc. (VBI) a TSX Venture Exchange listed company
headquartered in Little Rock, AR
is offering
up to 28,571,429 shares of stock* in the company
at a price of $0.35 per share
⃰ Subject to TSX approval.
⃰ Canadian residents shall receive Class A shares; non-Canadian residents shall receive Class B shares which are
non-voting but are convertible into Class A shares on 75 days notice. Except for voting rights, Class B shares
have the same rights and privileges of Class A shares prior to conversion. Said shares are NOT listed on the TS
Venture Exchange.
19
USE OF FUNDS
$10,000,000 Total Investment
$ 750,000
$1,500,000
$ 350,000
$1,000,000
$2,000,000
$5,600,000
$4,400,000
$10,000,000
Closing Costs (Finders Fee, legal, accounting)
Trillium Diagnostic Payment
Stratedigm Equipment purchase
Assay Development
FDA 510k Clinical studies (CD64)
Total Business Costs
Working Capital Reserve
Total Use of Funds
20
CAP TABLE (PRE- AND POST-FUNDING)
Pre-Closing Capitalization
Class A Voting Common Shares
37,707,086
Class B Non-Voting Common Shares
29,387,762
Options
5,617,190
Warrants
14,752,000
Post-Closing Capitalization (assumes max offering is reached)
Class A Voting Common Shares
51,992,800
Class B Non-Voting Common Shares
43,673,476
Options
5,617,190
Warrants
14,752,000
Note: Assumes $10MM Investment is 50/50 split
between Class A/Class B shares for US Investors
21
COMPARABLE VALUATIONS
Table of comparable bioscience companies and EV/Rev multiples (US$)
Revenue
Range
Market Cap
Multiple
(EV/Rev)
Status
Relevance
Accuri †
$20MM
$205M
10.25
Sold - 09/2011
Diagnostics /
Instrumentation
Cepheid
$446-461MM
$3.73B
8.09-8.36
NASDAQ
(2/25/14)
Microbiology Diagnostics
Handylab ‡
$8MM (est.)
$275M
34.38
Sold - 11/2009
Microbiology Diagnostics
MTM ‡‡
$15MM (est.)
$180M+
12.00
Sold - 07/2011
Diagnostics
Neogen
$235–250MM
$1.59B
6.36-6.77
NASDAQ
(2/25/14)
Microbiology Diagnostics
Roka
$3.4MM
$215M
62
NASDAQ
(8/22/14)
Microbiology Diagnostics
BRAHMS
$90MM
$490M*
5.45
Company
Sold-2008
Biomarker Discovery
(Procalcitronin)
† BD Bioscience Acquisition
‡ BD Biosciences Acquisition
‡‡ Roche's-Ventana Medical Systems Acquisition
* Acquired by
Fisher 2008
22
Investment Summary
• Vivione Biosciences is a technology and life sciences company focused on rapid bacterial
detection with an expanding IP portfolio
• The company’s RAPID-B platform is the fastest, most accurate, and most cost-effective
diagnostic testing system currently available for detecting bacteria
• Vivione is in the process of commercializing the RAPID-B system for several multi-billion
dollars markets, including oil & gas, food safety, and clinical in-vitro diagnostics
• Vivione has completed a clinical pilot studies at the Cleveland Clinic and preparing for a
study at Northwestern University
• The Trillium acquisition will immediately add revenue, IP, experience management, and
access to the clinical diagnostics market
• The company has been gaining traction within the Oil & Gas market – and is currently
negotiating $5mm in purchase orders
23