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gonex pharmaceuticals inc. Presenting Gonexin Providing hope through extension and enhancement of life MBA Consulting Team Larry Morkre Matt Narens Rick Silva, Ph.D. Brian Weninger December 13, 2001 Confidential gonex pharmaceuticals inc. Concept Gonexin is a revolutionary, patented “smart drug” for cancer treatment. We have the expertise to guide Gonexin to commercial success in a market with huge profit potential. Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Management and Leadership Dr. Paul Jarosz •Chief Operating Officer •Involved in commercial development of 58 pharmaceutical products •Clinical development executive with Geneva Pharmaceuticals (Novartis), Johnson & Johnson, and Syntex (Roche) Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Management and Leadership Dr. Terry Nett •Cofounder and board member •Internationally recognized expert in GnRH biology Dr. Mike Glode •Cofounder and board member •Internationally recognized researcher in prostate cancer biology •Consultant on clinical trials for Leupron and Abarelix Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Global Pharmaceutical Market $400 B 2003 Summary Questions Chemopreventatives $0.23 0.06% Blood Cell Factors $7.73 1.9% Non cancer, w orldw ide pharmaceutical market $370.0 92.9% Immunotherapies $0.14 0.04% Other $5.77 1.4% 0.00% Total Worldw ide Cancer Drug Sales $29.02 7.1% Chemotheraeutics $15.15 3.8% Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Industry Trends • Trend away from toxic to “smart drugs” • Shift from healthcare spending to pharmaceutical spending • Small R & D firms have innovative advantage Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Market Growth Potential • Up to 15% growth in human pharmaceutical market • High risk begins at age 50 • Aging population Confidential gonex pharmaceuticals inc. Our Position Introduction Opportunity Technology Financial High Efficacy Gonexin Summary Questions Chemotherapeutic Agents Non-Toxic Toxic Radiation Therapy Hormone Therapy Agents Surgery Immunotherapy and Angiostatic Agents Low Efficacy Confidential gonex pharmaceuticals inc. Market Share Growth Introduction Opportunity Technology Financial % penetration Summary Questions 100 90 80 70 60 50 40 30 20 10 0 Year 1 Gonexin Market Share Year 2 Year 3 Year 4 Year 5 79,000 late stage cases of prostate cancer Confidential treated annually gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Marketing Strategy • Industry publications Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Marketing Strategy • Trade shows Summary Questions Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Marketing Strategy • Annual scientific and clinical meetings Summary Questions •Dedicated direct sales team •Web presence Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Bright Future • We are an innovative Research and Development organization • Other potential indications for Gonexin – Breast cancer – Colon cancer – Uterine cancers – Pancreatic cancer – Some forms of lung cancer Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions The Product • Gonexin • Two therapeutic indications- Prostate Cancer •Hormone therapy •Chemotherapy • Leupron, Zolodex, and Viadur only offer hormone therapy mechanism • Other Epithelial Cancers Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology GnRH Summary Questions Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology GnRH Summary Questions Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology GnRH Summary Questions Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Normal Physiology GnRH Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Testosterone Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Testosterone Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Testosterone Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Testosterone Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Normal Physiology Summary Questions GnRH Receptor Gonadotroph Non Target Cell Testosterone Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Leupron Summary Questions Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Leupron Summary Questions Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Leupron Summary Questions Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Hormone Therapy Mechanism Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions Leupron Receptor Gonadotroph Non Target Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Hormone Therapy Mechanism Summary Questions GnRH Receptor Gonadotroph Non Target Cell Testosterone Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism GnRH-Toxin Summary Questions Receptor Gonadotroph Non Target Cell GnRH-Toxin Receptor Cancer Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism GnRH-Toxin Summary Questions Receptor Gonadotroph Non Target Cell GnRH-Toxin Receptor Cancer Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism GnRH-Toxin Summary Questions Receptor Gonadotroph Non Target Cell GnRH-Toxin Receptor Cancer Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Chemotherapy Mechanism GnRH-Toxin Receptor Gonadotroph GnRH-Toxin Receptor Cancer Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions GnRH-Toxin Receptor Gonadotroph GnRH-Toxin Receptor Cancer Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions GnRH-Toxin Receptor Gonadotroph GnRH-Toxin Receptor Cancer Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions GnRH-Toxin Receptor Gonadotroph GnRH-Toxin Receptor Cancer Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions GnRH-Toxin Receptor Gonadotroph GnRH-Toxin Receptor Cancer Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions GnRH-Toxin Receptor Non Target Cell GnRH-Toxin Receptor Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions GnRH-Toxin Receptor Non Target Cell GnRH-Toxin Receptor Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Chemotherapy Mechanism Summary Questions Non Target Cell Healthy Cell Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Key to Success • FDA Approval – Safety of treatment – Efficacy of treatment Confidential gonex $- pharmaceuticals $(25) inc. $(50) Introduction Opportunity Technology Financial Funding & Development Schedule $(75) Year $(100) Scientific proof of concept Drug safety and Phase I clinical trials Phase II clinical trials Phase III clinical trials Summary Questions 2002 Series A $3 M in funding 45% IRR 17% of equity sold preferred 2003 2004 2005 Series C $15 M in funding 33% IRR 29.8% of equity sold Series B $5 M in funding 40% IRR 16.7% of equity sold 2006 2007 2008 Liquidity event (IPO) $43.5 M in funding 29% IRR a 33% of equity sold 2009 2010 2011 Gonexin Launch a $136 million premoney valuation Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Profit Growth $400 Summary Questions Revenue millions $300 $200 Profit $100 Costs $0 Year 11 Year 12 Year 13 Year 14 Year 15 Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Summary • • • • Promising, patented “smart drug” Market of over $2.6 billion annually Precedence for capture of 80% of market Demographic shift will catalyze market growth • Foundation for a management team with a track record of drug commercialization Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Financial Summary Questions Questions Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Financial Summary Questions Questions Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Financial Summary Questions Funding Required Year Funding Required Milestone % Equity IRR 1 $3 M Scientific Proof of Concept 17% 45% 2 $5 M Drug Safety, Phase I 16.7% 40% 3 $15 M Phase II 29.8% 33% 5 $43.5 M IPOa Phase III 33% (96.5%) 29% a $136 million premoney valuation Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Financial Summary Questions Gonexin Price Hormonal Administer Insurance Treatment Cost Urologist Difference Cost Gonexin Once ™ $5,500 $9,500 $4,000 Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Financial Summary Questions Pricing Strategy Hormonal Treatment Administer Insurance Cost Urologist Cost Difference Viadur Once/ Year $5,650 Surgery Once $4,000 N/A N/A Lupron Depot Once/ Quarter $1,500 $750 $750 Zolodex Once/ Quarter $1,125 $675 $450 Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Development Timeline Financial Summary Questions Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Development Timeline Financial Summary Questions Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Financial Summary Questions Leupron Abarelix (Planexis) Exogenous Testosterone Removal of GnRH agonist Or antagonist Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Financial Summary Questions Market • Over 198,000 men diagnosed with prostate cancer each year • 2nd leading cause of male cancer death in the US Confidential gonex pharmaceuticals inc. Introduction Opportunity Technology Expertise Earnings and Cash Flow $150 Net Earnings $125 Financial Summary Questions Cumulative Cash Flow $100 $75 Millions $50 $25 $- r1 $(25) ea Y Y r2 ea Y r3 ea Y r4 ea Y r5 ea Y r6 ea Y r7 ea Y r8 ea Y r9 ea Y 0 r1 a e Y 1 r1 a e Y 2 r1 a e Y 3 r1 a e Y 4 r1 a e Y 5 r1 a e $(50) $(75) $(100) Year Confidential
