January 22, 2008MRS Entrepreneurship ChallengeTeam 14 NanoMed recognizes that the intellectual...

January 22, 2008 MRS Entrepreneurship Challenge Team 14

NanoMed recognizes that the intellectual property as proposed to carry out the ideation concepts outlined in this presentation is owned by the Ohio State University (OSU) (background and any unprotected potential intellectual property conceived and or reduced to practice in the generation of this business assessment and plan). NanoMed is not yet a legal entity but acknowledges that, as a legal entity, it may require a license from OSU to carry out all or part of the concepts outlined in this presentation. Discussions with OSU are in progress.

Disclosure

MRS Entrepreneurship Challenge

Team 14

ZipDiscGene Delivery System

Team 14

MRS Entrepreneurship Challenge

ZipDiscTM

Propelling research to faster cures“researchers use more than one method of gene delivery”

– Biocompare Surveys and Reports (2007)

Researchers successfully transformed adult skin cells into stem cells, removing ethical barriers


PRIMARY MARKET: Genetic Research Labs

Gene Delivery Products Direct competition $1.2 billion

Life Science Tools & Services Total market size $40.5 billion

Stem Cell Products Projected to experience 50% growth over 10 yrs

$10 billion by 2016

Pharmaceuticals Total market size $467 billion

Agriculture Biotechnology Total market size $53.9 billion

SECONDARY MARKETS


ZipDiscGene Delivery System

Competitive Advantages 90% success rate 95% cell survival rate Non-viral delivery method User-friendly

One-time use ZipDisc disposable cartridges

The ZipDisc custom applicator and voltage source

Product Line Release incremental innovations to initial product

Broaden applications and increase throughput

Follow-on products


CUSTOMER

“...make the lab bigger, better, faster and enable more discoveries.”– Dr. Brian Kaspar, Nationwide Children's Hospital

“The retrovirus can be a Trojan horse that can carry all sorts of problems” – Dr. Douglas Melton, Harvard Stem Cell Institute

“The limitations of current delivery technologies ... are substantial barriers to the development and growth of the overall RNAi market”

– Frost & Sullivan, “U.S. RNAi Markets,” 2006


VALUE PROPOSITION

Faster Research + Higher Success Rates = More Cures

ZipDisc increases success rate of gene transfer from 15-70% to 90%

ZipDisc increases cell survival rate from 50% to 95%

ZipDisc utilizes a disposable cartridge with no viral agents

ZipDisc injects similar numbers of cells at comparable cost to competitors


TECHNOLOGY

IP Position International patent application filed;

moving to patent in U.S. & Europe

Patent application includes core technology & numerous applications

Ongoing discussions with OSU technology licensing office

Stage of Development Prototype of entire delivery system

Entering independent testing phase

High stage of development with little science risk

PET array of nanoscale nozzles

cells

Nozzle array

DEVELOPMENT PLAN

Secure license

Complete beta testing

Secure seed capital

Form company

Apply for grants

PRE-COMMERCIALIZATION

$400 K

MARKET ENTRY

Secure 3-5 key pilot users

Raise B round funding

Build management team

Secure Mfg and Distribution Partners

Market and distribute to industry leaders

$600 K

6 Months

Timeline

2 Years 5 Years

GROWTH & EXPANSION

Full-scale market penetration

Scale up production

Introduce follow-on products

Prepare to exit

$1.0 M

Capital Funding Needed


DISTRIBUTION PLAN

Sales Model Establish a base of pilot users

through direct sales

Attract distribution partner to quickly ramp up sales

Business Model Razor and disposable blade model:

Sell ZipDisc custom applicator at competitive price

Generate continuous revenue stream from ZipDisc disposable cartridges

Key Partners

DistributionCardinal Health of Ohioor other leading Medical Supply Chain Service company

ProductionZyvex Performance Materialsor other leading edge manufacturer of nanomaterial devices

TestingThe Solove Research Institute at the James Cancer Hospital


A STRONG TEAM & BOARD

Business Team

Paul Dymerski, PhD Interim CEOFounder of multiple technology startups

Seth Cramer Interim CFOMBA with experience in multiple startups

Bruce Caldwell OperationsMBA Candidate & 20 yr. R&D Manager

Mihaela Jekic, MS TechnologyPhD Candidate in Biomedical Engineering

Eric Cochran, MS MarketingPhD Candidate in Physics/Medical Devices

Aaron Sander SalesPhD Candidate in Physics

Advisory Board

James Lee, PhDNSF Director for Ohio Polymer& Composite Engineering

Sharell Mikesell, PhDExecutive Director of the OhioPolymer Strategy Council

Tom Zupancic, PhD25 years in gene research and transfection industry

John BairFounder, Pinnacle Data Systems

Andy DicksonDirector, Ohio Tech Angel Fund


COMPETITION

MANUFACTURERS WHOLESALERS CUSTOMERS

Bio-Rad

Fisher Thermo

Invitrogen

GE Healthcare

Qiagen

IBI-Shelton

Stratagene

Bio-Rad

Fisher Thermo

Invitrogen

GE Healthcare

McKesson

Amersourcebergen

Beckman-Coulter

Cardinal Health

ResearchOSU…

PharmaceuticalEli-Lilly…

BiotechMonsanto…

Cancer HospitalsJohns-Hopkins…


COMPETITIVE ADVANTAGEElectroporation(Bio-Rad Laboratories)

Very low cell survival (<20%)

Very low success rate (<40%)

ZipDisc provides significant advantage through high success rate (90%) & survival rate (95%)

Lipofection(Invitrogen)

Low success rate (<70%)

Cell toxicity

ZipDisc provides significant advantage through high success rate (90%)

Viral Vectors(Stratagene)

Long prep time (1-3 months)

Health risk

ZipDisc provides significant advantage through time efficiency (30 min), versatility, and elimination of health risks


PROFORMA INCOME STATEMENT

High Margin

Growing Market

Low Upfront Investment

(000’s) Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Total # Units 6 37 99 396 1584 6336

Sales Revenue $0 $437

$909 $3,980

$15,919

$63,677

Cost of Sales $19 $112

$284 $1,173

$4,693

$18,770

Gross Margin ($19)

$325

$625 $2,807

$11,227

$44,906

Total SG&A $414

$1,189

$1,877

$3,172

$6,278

$10,394

EBITDA ($433)

($864)

($1,252)

($366)

$4,949

$34,512

Net Income ($281)

($555)

($800)

($210)

$3,254

$22,716

Capital Required:

$2MM


EXIT STRATEGY

Alternative Strategy IPO, if current predictions of

market share are overly conservative

Valuation March 2006, Applied Biosystems

acquires Ambion for $273 million

At the time, Ambion posted $52 million annual revenue

Acquisition after year 5 Established profitable enterprise

Demonstrated effectiveness across numerous gene & drug platforms

Developed robust product line

Established product as the standard for stem cell research

Achieved high level of brand recognition

Success Rate of Gene Transfer

ZipDisc Gene Delivery System Standard Method

January 22, 2008MRS Entrepreneurship ChallengeTeam 14 NanoMed recognizes that the intellectual...

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