FINAL LI BIO-CAI-GAZELLE June 5 2016

Investing inHigh-ImpactGazelles thatDriveOutsizedReturns & Social Impact

Confidential & Proprietary the Center for Advancing Innovation and Gazelle Futures - Do Not Distribute without Permission

Gazelle

Proven Capital

Efficient Inventions

Startup Catalyst

Seasoned Management

2

BACKGROUND


3

The Problem: identifying the best inventions and furthering R&D

LicensedMove to translational researchMore funding in lab; science continuesNo funding in lab to continueWithdrawn/terminated licenseTerminated by inventor

Federally Funded Research

Invention Disclosed and Potentially Patented

Product

Translational Research,<.1%

Inability to Find and Fund Promising Inventions

Prepared for LES- Confidential & Proprietary the Center for Advancing Innovation and Gazelle Futures - Do Not Distribute without Permission

4

Opportunity: • 6% inventions -> $500B to $1.5T GDP Impact• 80-95% Failure Rate

Unique Challenge-Accelerator given IP & Talent Access:• Derisked IP: 21 agreements across NASA, NIH, NCI,

CDC, etc• Talent: 85+ Serial Entrepreneurs, Industry, etc.

Evolution:• Derisked IP: More Federal Labs• Disrupting the Venture architecture norms

Sieze the OPPORTUNITY

Commercialization Strategy Startups & Industry

Due Diligence – Selecting Investments & Technologies

Select the Best Federally Funded Inventions

Maximize Commercial PotentialOperators & Management Talent


Center for Advancing Innovation—Mission

5

Identify Challenge

Planning

Startup teams paired with world-class, seasoned exec level industry experts

Mentorship

Invention Selection

Tailored Training

Curriculum

Business Plan and Live Pitch

Enter Multi-Disciplinary

Teams

2 minute video with executive summary

Elevator Speech Winners and Finalists Selected

CAI’s Challenge-Accelerator

10 commercially viable inventions Form Team and Select Invention

Letter of Intent – form teams

Elevator Speech

Business Plan & Startup Launch

License & raise seed funding

12 Month Intensive & Disciplined Accelerator Training

500-1000 in multi-disciplinary teams

PartnershipAnd Licensing Agreements

STARTUPS


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01BREAST CANCER CHALLENGE11 STARTUPS

02SCALE CHALLENGE MODEL 2XNEURO STARTUP CHALLENGE

22 STARTUPS

03NANOTECH CANCERCHALLENGE13 STARTUPS04EXTEND TO THE

NASA SPACE RACE15-20 STARTUPS

06COMMERCIALIZE TOP1% OF INVENTIONS

05BOLT ON FUND

Startup Challenge Journey

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A Few of Breast Cancer & Neuro Successes


COMPANY PROGRESS VALUATION

Powerful cancer therapies

• Won MassBIO, MassChallenge & Rice• 20 agreements with Pharma & Academia • Thiel Fellowship, Avon Foundation Grant, CASIS Grant, UK

Horizon 2020 Program, Forbes 30 under 30, TEDMED Presentation• Exclusive License to NIH invention

$20MM

Batten’s disease therapy

• OxBridge/SR One OneStart Semi-Finalist• Received orphan drug indication (FDA)• Expertise in medicine, toxicology (INDS), regulatory affairs

(RareMoon Consulting)• Recruited VP Chemistry, Merck Veteran• Exclusive Evaluation License to NIH invention

$5MM

Cancer diagnostic

• “Best Pitch”, Healthcare Innovation Pitch event (sponsored by Bridge to Cures, Inc)• Finalist, Wisconsin Governor’s Business Plan Competition; WI

Innovation Award (‘16)• Proof of Concept: Human (Completed)• Exclusive Evaluation License with the NIH

$20MM

First sale 2017

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SPACE RACE Challenge - Novel Deal FlowExample De-Risked, Capital Efficient NASA Robotics Invention

Overview:Rugged, lightweight, small, autonomous robot excavator used in sites such as

RASSOR Robotic Excavator

high-risk or inaccessible mining, search and rescue, as well as disaster response applications

Only invention to exploit extraplanetarymining industry; $200B to $1T of value in just one asteroid

Portfolio of 24K+ inventions: 100+ commercially viable inventions space inventions; 300+ precision medicine

Expanding portfolio to include patents and inventions from DoD, DoE, DARPA, Navy and other agencies

Opportunity: develop world-changing technologies, create new industries and ecosystems, drive outsized growth and returns


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New Model for Venture Philanthropy with outsized returns

Spun out 33 Companies from NIH; 1200+ Jobs Created; 19 Agreements with NIH and NASA

Prestigious Awards & Recognition HHS, NASA, White House, Wired, Nature, Huffington Post, CBS etc.

Challenge AcceleratorsSince 2012

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Healthy Cell Cancer Cell

No Effect Azonafide Kills Cell

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§ Winner of Breast Cancer Startup Challenge by the National Cancer Institute (NCI)

§ Awarded grants from Avon Foundation for Women, NASA/Center for the Advancement of Science in Space (CASIS), and the Horizon 2020 Program (UK)

§ Winner of MassChallenge & MassBio 2014 Startup Accelerators§ Winner of the Rice Business Plan Competition§ Raised seed financing, currently raising a bridge round§ Partnered with 14 pharma partners all over the world§ Partnered with 6 academic labs all over the world§ Offices in Boston and London § Closed Startup Exclusive Option License Agreement with the NCI§ Showcases: TEDMED, World ADC Summit, Engage Forum Tokyo,

Protein & Antibody Engineering Summit (Shanghai & Boston ’15)

Team Progress

MedImmune

Reg Seeto, VP, Head of Partnering & Strategy2016 BIO International Convention June 2016

MedImmune: A Brief Overview

GLOBAL BIOLOGICS RESEARCH AND DEVELOPMENT ARM OF

2,500EMPLOYEES IN THE

US AND UK

California Gaithersburg Cambridge

ROBUST PIPELINE OF 120+ BIOLOGICSIN RESEARCH & DEVELOPMENT WITH

40+ PROJECTS IN CLINICAL STAGE DEVELOPMENT

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Therapeutic Areas of Focus

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BIOLOGICS SMALL MOLECULES IMMUNOTHERAPIES PROTEIN ENGINEERING DEVICES

ONCOLOGY

RESPIRATORY,INFLAMMATION AND AUTOIMMUNITY

CARDIOVASCULAR AND METABOLIC

DISEASEINFECTIOUS DISEASE NEUROSCIENCE

CORE TAS OPPORTUNITY-DRIVEN

MedImmune R&D PipelinePHASE 1 PHASE 2 PIVOTAL/PHASE 3PHASE 2

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MEDI-565Solid Tumors

MEDI0562Solid Tumors


MEDI-551Diffuse B-Cell Lymphoma

MEDI-573Metastatic

Breast Cancer

DurvalumabStage III Non-Small Cell

Lung Cancer

Durvalumab3rd Line NSCLC (PD-L1+)



Durvalumab + TremelimumabSolid Tumors


MEDI7836Asthma

MEDI4166Diabetes/Cardiovascular

MEDI8852Influenza A Treatment


Durvalumab + MEDI0680Solid Tumors

Durvalumab + AZD9291Advanced EGFRmNon-Small Cell Lung Cancer

MEDI4920Primary Sjögren’sSyndrome

MEDI0382Diabetes/Obesity

MEDI-550Pandemic Influenza

ProphylaxisMEDI1814

Alzheimer’s Disease

DurvalumabSolid Tumors

MEDI-551 + RituximabHematological Malignancies

Durvalumab + MEDI6383Solid Tumors

MEDI5872Systemic Lupus Erythematosus

MEDI6012Acute Coronary Syndrome

MEDI3902Prevention of Nosocomial Pseudomonas Pneumonia

DurvalumabSolid Tumors

Durvalumab + AZD9150Squamous Cell Carcinoma of

the Head and Neck

MEDI-551Neuromyelitis Optica

AnifrolumabLupus Nephritis

MEDI9929Asthma

TralokinumabAtopic Dermatitis

MEDI7510Prevention of RSV in Older Adults

Durvalumab + AZD5069Squamous Cell Carcinoma of

the Head and Neck

Durvalumab + TremelimumabGastric Cancer

MEDI2070Crohn’s Disease

AbrilumabCrohn's Disease / Ulcerative Colitis

MavrilimumabRheumatoid Arthritis

MEDI4893Pneumonia / S. aureus

MEDI8897Passive RSV Prophylaxis

Durvalumab2nd Line SCCHN

TremelimumabMesothelioma

Durvalumab + Tremelimumab3rd Line NSCLC

AnifrolumabSystemic Lupus Erythematosus

BenralizumabSevere Asthma

TralokinumabSevere Asthma

MoxetumomabPasudotox

Hairy Cell Leukemia

Durvalmab + Tremelimumab1st Line NSCLC

BenralizumabCOPD

BrodalumabPsoriasis

ONCOLOGY

RESPIRATORY, INFLAMMATION AND AUTOIMMUNITY (RIA)CARDIOVASCULAR AND METABOLIC DISEASE (CVMD)

INFECTIOUS DISEASE (ID)NEUROSCIENCE

AnifrolumabSubcutaneousSystemic Lupus

Erythematosus

Durvalumab + IRESSANon-Small Cell Lung Cancer


Durvalumab+Dabrafenb+Trametinib

Melanoma



MEDI8111Trauma/Bleeding

Durvalumab + tremelimumab

Pancreatic Ductal Carcinoma


2nd Line SSCHN (PD-L1-)


1st Line Bladder Cancer

Durvalumab + tremelimumab2nd Line SSCHN

Durvalumab + tremelimumab1st Line SSCHN

Partnering and Strategy Group (since 2013): Four Groups

Classic BD•Licensing (in/ out)•M&A•Spinouts/ JVs

Biologics Strategy

•R&D strategy•All therapeutic areas/ technologies •Special areas- Asia

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Collaborations group•Governments, Universities• Focus on where we have geographical presence for ecosystem building

Government contracting•US- BARDA/ DARPA•Others

100 executed deals over the last 3 years

Company TherapeuticArea Asset Deal Type

REVLIMID, POMALYST, VIDAZA and others

Haematologicalcollaboration

CD-19 CAR T cell therapy Clinical collaboration

Data analysis technology for biomarker identification Acquisition

CRUK novel targets/ MedIphage library/ Ab engineering

Collaboration

ADXS-HPV cancer vaccine Clinical collaboration

ImmTAC moleculesPreclinical and clinical collaborations and license agreement

Antibody Drug ConjugatesAcquisition (Spirogen) / Collaboration (ADC Therapeutics)

PBD Outlicense Out-license

PBD Outlicense Out-license

Deal Examples- Oncology

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Oncology

Oncology

Oncology

Oncology

Oncology

Oncology

Oncology

Oncology

Oncology

Company TherapeuticArea Asset Deal Type

Up to 5 ion channel antigens for antibody drug discovery Collaboration

Companion diagnostic test for asthma drug Tralokinumab Collaboration

Multiple mAbsCo-development and commercializationagreement

3 projects in diabetes & obesity Research collaboration

Biologic for treatment of acute coronary syndrome In-license

rhLCAT Acquisition

EEC program Collaboration and license

3 targets – half life extension technology In-license

Deal Examples- RIA/ CVMD

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RIA

RIA

CVMD

CVMD

CVMD

RIA

CVMD

CVMD

Examples of Academic Collaboration

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I N S T I T UT I ON THERAPEUT I C AREA DESCR I P T I ON

ALL

BPD

ALL

BPD

ALL

ALL

• Joint PhD program supports joint thesis projects • Novel Entrepreneur-in-Residence program• Research collaborations in neuro, biopharmaceutical research

• 5 year Collaboration for BPD projects

• First industry sponsor for Catalyst awards• Call for proposals in MedImmune therapeutic areas• Additional strategic collaboration in RIA and Translational Science

• Collaborations in formulation science• Multiple projects with joint steering committee

• Research and education collaborations across 4 campuses• Jointly funded with UMB and Maryland Dept. of Business and Economic Development

• Multiple projects with joint steering committee• 5 year joint Biopharma PhD program to better prepare scientists for careers in biopharma

Examples of Other Collaborations

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I N S T I T UT I ON DESCR I P T I ON

• Joint projects between nearby NIST, MedI campuses• MedImmune provides monoclonal antibodies, other technology• Supported by umbrella CRADA agreement• Public – private partnership in Brazil• Each institution provides up to $2M over 5 years• Call for proposals in areas of interest to MedImmune

• Up to 30 Brazilian post-docs spend 2 years at MedImmune• Jointly funded with Brazilian government

• Joint research in immunotherapy and antibody drug conjugates• Two umbrella CRADA agreements

THERAPEUT I C AREA

BPD, ADPE

CVMD

ALL

ONCOLOGY

ADPE

• Participation in the Nanotechnology Startup Challenge in Cancer• New approach to identifying potential BD Opportunities

Benefits of Partnering with The Center for Advancing Innovation

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Access to innovations –in this case nanotechnology from the NIH database (others e.g. NASA)

New approach for BD esp. focused on early technologies/ therapeutics to leverage competition model

Support ecosystem growth of BioHealth Capital Region with local

placement of companies

Focus on commercialization by CAI- access to Gazelle Futures

Fund

1

2

3

4

Process and Status

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Phase 0 Letter of Intent

• 37 Letter of Intent Applications• 29 Teams Accepted• 7 Teams from Virginia / Maryland / DC Region• 58 Unique Universities• 510+ Participants

Phase 1 Executive Summary and Elevator Pitch

• 29 Teams Competing• 7 Teams from Virginia / Maryland / DC Region• 17Webinars Conducted from Challenge Advisors• 1 Assignment• Deliverables include Executive Summary and Elevator Pitch

Phase 2 Business Plan and

Live Pitch

•22 Teams Advance to Phase 2•6 Teams from Virginia / Maryland / DC Region•38Webinars Conducted•5 Assignments (1 Completed)•12 Serial Entrepreneur Mentors engaged with teams via CAI

MedImmune Interest in Two Inventions

Ø CAI- interaction;; Novel concept and strong collaboration – discussions began in 2015 and willingness to shape model

Ø Innovative model with access to large database of inventions (e.g. NIH and also future with NASA)

Ø Program focuses on key theme (e.g. nanotechnology) for teams to build around with input from experts/ mentors

Ø Competition based approach means best teams with best business plans progress

Ø Willingness to have companies form in MD, DC, VA was critical to support project as we look at building out the regional ecosystem

Summary

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David MorseChief, Technology Partnerships OfficeNASA Ames Research Center

June 2016

40 Years of NASA Spinoffs Bringing NASA Technology Down to Earth

National Aeronautics and Space Administration

Sp1noff…1990s

Spinoffs 2000s

Image courtesy of Andreas Levers, CC BY-‐NC-‐ND 2.0

Image courtesy of BirdAir Inc.

Get your freecopy of Spinoff atspinoff.nasa.gov

www.techbriefs.com

technology.nasa.gov/patents

NASA Patent Portfolio Analysis

Bringing NASA Technology Down to Earth technology.nasa.gov

Total Patents Available for Licensing as of Jan. 2016§759 Issued§372 Applications

Aeronautics98

Communications33

Electrical and Electronics52

Environment28

Health, Medicine and Biotechnology60

IT and Software 54

Instrumentation43

Manufacturing36

Materials and Coatings222

Mechanical and Fluid Systems60

Optics66

Power Generation and Storage34

Propulsion17

Robotics, Automation and Control68

Sensors194

software.nasa.gov

Bringing NASA Technology Down to Earth technology.nasa.gov

NASA Software Catalog

Aeronautics30

Autonomous Systems25

Business Systems and Project Management51

Crew and Life Support20

Data Imaging and Processing98

Data Servers Processing and Handling65

Design and Integration Tools120

Electronics and Electrical Power5

Environmental Science (Earth, Air, Space, Exoplanet)71

Materials and Process5

Operations90

Propulsion27

Structures and Mechanism6

System Testing61

Vehicle Management (Space,Air,Ground)48

Total Software Available for Licensing as of Feb. 2016

technology.nasa.gov/startup

technology.nasa.gov/spacerace

technology.nasa.gov

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Expanded Challenges Every YearCategory Metric

SPACE RACE2016

Nano2016

Neuro2014-2015

Breast Cancer2012-2013

Entries & Teams

Teams Accepted

54 29 71 46

Winning Teams

N/A N/A 16 12

Team Strength

# People 406+ 509+ ~1090+ 460+

University Diversity72 Unique

Universities58 Unique

Universities

120+ Universities;

96 Unique Universities

83 Total; 45 Unique

Universities

Geographic Diversity24% participating

outside US

27.5% participating outside US

19% participatingoutside US

20% participating outside US

Mentors/Judges/AdvisorsNot Completed

36Not Completed

59147+ 17


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Startup Challenge Evolution


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Investing Problems – Deal Flow & IRRs


Annual Venture Capital Fundraising by Primary Geo Focus2008-2016 (as of May 16, 2016)

Venture Capital Median Net IRRs and Quartile Boundaries(as of June 30, 2015)

EXITS: 73% of tech companies that exited in 2014 had not raised institutional funding (up from 66%)

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Investing Problems-Time & Valuations


SOURCE: Private Capital Markets Report, Pepperdine University, 2016

VALUATIONS: Multiples are higher than they have been in 15 years. Almost 3X as many unicorns in 2015 as 2013

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New Paradigm for Investing


CAI & GAZELLE INVESTMENT APPROACH

EVALUATE 50K+ WORKING FED LAB INVENTIONSDUE DILIGENCE on DERISKED, CAPITAL EFFICIENT TECH

WINNING CHALLENGE/ACCELERATORCROWDSOURCE 10 TEAMS & BUSINESS PLANS – PICK BEST

LAUNCH NEWCO – OWN 100% EQUITYNO PRE-MONEY VALUATION & LOWEST COST/% EQUITY

RUN - GO TO MARKET & COMMERCIALIZEMAJORITY CONTROL; LIMIT MISTAKES W SEASONED MENTORS

EXIT – 30-65% IRRSMAJORITY SHARE THROUGH SERIES B

CURRENT INVESTOR APPROACH

FINDHUNDREDS OF MEETINGS AND PITCHES

EVALUATEONE TEAM WITH IDEA STAGE INVENTIONS

NEGOTITATE MULITLE TERM SHEETSCOMPANY VALUE UNREALISTIC; 7-12 MONTHS CLOSE*

HELP - R&D & GO TO MARKETROOKY TEAMS; LIMITED ABILITY TO ADJUST TEAM

EXIT – 6%-22% IRRS**SIGNIFICANT DILUTION; 90% FAILURE RATE

SOURCE:* Private Capital Markets Report, Pepperdine University, 2016** Prequin Global PE And VC Report 2016

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Value Proposition: Rapid Commercial Success!

Quality Strategic Deal FlowWorthy Startups with Derisked Inventions

Improved Asset Productivity

Skilled Startup TeamsStrong Talent with “Uber CEOs”

Accelerated ResultsRapid, Low-Cost Licensing

Reduced RisksTraining, Seasoned Teams, De-risked

Inventions, Aligned Ecosystems

Magnify FundsWith one Grant, 10X Impact –

Evergreen Model

R&D$Productivity

Size$of$R&D$Organization

Large&Pharma&Co’s

Optimal&Size

89%

92%

65%

21%

52%

34%

Address Presidential Memorandum

Prepared for NY Genome - Confidential & Proprietary – Gazelle Futures LLC - Do Not Distribute

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Questions

Prepared for NY Genome - Confidential & Proprietary – Gazelle Futures LLC - Do Not Distribute

1. Why are the inventions on the shelf2. How do you crowdsource talent and mentors3. What companies are more appropriate for a normal VC model

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Key Takeaways


§ YOU can do this too! We’ve built a robust, scalable, flexible platform AND have lessons learned

§ Join the RACE; be a judge; advise the challenge; mentor a team

§ GAZELLE is seeking strategic partnerships & advisors; please connect with us if interested

THANK YOU

ROSEMARIE TRUMAN, FOUNDER AND CEO

THE CENTER FOR ADVANCING [email protected]

TEXT: 202 438 2208

FINAL LI BIO-CAI-GAZELLE June 5 2016

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