june 2003 vddi pharmaceuticals (asia pacific) confidential 1 vddi pharmaceuticals “rapidly...

June 2003June 2003 VDDI Pharmaceuticals (Asia Pacific) COVDDI Pharmaceuticals (Asia Pacific) CONFIDENTIALNFIDENTIAL

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VDDI PharmaceuticalsVDDI Pharmaceuticals ““Rapidly developing novel drugs for cardiovascular and Rapidly developing novel drugs for cardiovascular and

infectious diseases”infectious diseases”

William Porter Senior Vice President Business Development, Asia-Pacific

VDDI Pharmaceuticals Inc.Brentwood, TN USA

June 2003

Bangkok, Thailand + 661 802-9244 (cell)

email: [email protected] www.virtualdrugdevelopment.com


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The material and comments in this presentation is The material and comments in this presentation is confidential, proprietary and privileged, including confidential, proprietary and privileged, including copyright. Statements made in this presentation copyright. Statements made in this presentation are based on information available to VDDI, and are based on information available to VDDI, and are presented in the good faith belief as to their are presented in the good faith belief as to their

accuracy, but VDDI does not warrant their accuracy, but VDDI does not warrant their accuracy.accuracy.


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VDDIVDDIVVirtual irtual DDrug rug DDevelopment evelopment IIncorporatedncorporated


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Chesapeake Business Chesapeake Business CenterCenterSuite # 106Suite # 1061616 Westgate Circle1616 Westgate CircleBrentwood, TN 37027-Brentwood, TN 37027-80198019

Ann Arbor, MI; Kalamazoo, MI; Huntsville, AL; RTP, NC; Bangkok, Thailand; Dublin, IR


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AgendaAgenda

Remarks and AssumptionsRemarks and Assumptions Business ModelBusiness Model Company OverviewCompany Overview Products in Development Products in Development

• Medical PeptidesMedical Peptides• NADs InhibitorsNADs Inhibitors• GP IIb/IIIa InhibitorGP IIb/IIIa Inhibitor

Next StepsNext Steps Closing CommentsClosing Comments


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The Codes for Global Success…The Codes for Global Success…

A T C GA T C G

010101010101010010101010101010

Adenine

AThymine

TCytosine

CGuanine

G


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VDDI’s Global GoalVDDI’s Global Goal

To increase knowledge and To increase knowledge and commercial value in novel drug commercial value in novel drug development for life-threatening development for life-threatening indications in the areas of indications in the areas of cardiovascular and infectious cardiovascular and infectious diseases by:diseases by:

Using the in-licensing model to fill gapsUsing the in-licensing model to fill gaps Increasing the depth in our portfolioIncreasing the depth in our portfolio Out-licensing to maximize the value of Out-licensing to maximize the value of

investments investments


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A Knowledge-driven Global A Knowledge-driven Global EconomyEconomy

Pharmaceutical companies – playing the role Pharmaceutical companies – playing the role of of change agentschange agents -- must prepare for the -- must prepare for the

future and adopt and support technology – future and adopt and support technology – biopharmaceuticals, ICT and biopharmaceuticals, ICT and

nanotechnology. They must see nanotechnology. They must see themselves as active partners, rather than themselves as active partners, rather than passive benefactors, with the stakeholders passive benefactors, with the stakeholders they support. If they don’t, they will get a they support. If they don’t, they will get a

lot poorer.*lot poorer.*

* * Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington University, Washington, DCUniversity, Washington, DC


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A 21A 21stst Century Approach Century Approach

VDDI’s focus is in VDDI’s focus is in targeted drugs targeted drugs (cardiovascular (cardiovascular and infectious and infectious disease) with disease) with effective effective treatments aimed treatments aimed at smaller sets of at smaller sets of patients.patients.


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The Global Reality for The Global Reality for Biopharmaceutical CompaniesBiopharmaceutical Companies


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Global Biopharmaceutical PainsGlobal Biopharmaceutical Pains

Expiring drug patentsExpiring drug patents Skyrocketing costsSkyrocketing costs High rate of clinical failuresHigh rate of clinical failures Corruption/price-gougingCorruption/price-gouging Product recallsProduct recalls Litigation (USA & Europe)Litigation (USA & Europe) Marketing scandalsMarketing scandals


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The Economic RealitiesThe Economic Realities

Industry losing control of pricingIndustry losing control of pricing Generic drugs Generic drugs Third-party payers – governments & Third-party payers – governments &

managed care – are demanding more managed care – are demanding more value with less expenditures value with less expenditures

A trend emerging to shift a fraction A trend emerging to shift a fraction of drug cost to patients (USA) which, of drug cost to patients (USA) which, generates a political will to confront generates a political will to confront local/national lobbylocal/national lobby


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This Decade – 2002-2007…This Decade – 2002-2007…

Patents will expire on 35 drugs with Patents will expire on 35 drugs with global sales of more than $73 billion.global sales of more than $73 billion.

But…But… Only 14 potential blockerbusters are Only 14 potential blockerbusters are

likely to be approved and launched likely to be approved and launched during this period.during this period.

Source: Datamonitor, London & Fortune Biotech, David Stipp, May 27, 2003


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Big Pharma’s Efforts to Date Have Big Pharma’s Efforts to Date Have Been in VainBeen in Vain

Tried substituting marketing muscle Tried substituting marketing muscle for scientific successfor scientific success• $1 billion to create “direct-to-consumer” $1 billion to create “direct-to-consumer”

ads (US)ads (US)• Other dubious ploys to bolster salesOther dubious ploys to bolster sales

Mergers & cost-cuttingMergers & cost-cutting• Temporary boost profits but doesn't Temporary boost profits but doesn't

address the underlying problem: address the underlying problem: productivity. productivity.


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VDDI Adopts an Effective Drug VDDI Adopts an Effective Drug Development ParadigmDevelopment Paradigm

VDDI and a few others in the industry VDDI and a few others in the industry are blazing a new path out of this are blazing a new path out of this

mess by utilizing a different strategy mess by utilizing a different strategy –business model.–business model.


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Adopt or DieAdopt or Die


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The “Bottom-up” SystemThe “Bottom-up” System

A "bottom-up" entrepreneurial system A "bottom-up" entrepreneurial system exhibits many of the characteristics exhibits many of the characteristics

associated with organic life: associated with organic life: • Organic systems provide large numbers of Organic systems provide large numbers of

small, redundant units to ensure the survival of small, redundant units to ensure the survival of the larger whole.the larger whole.

• An An organic business modelorganic business model allows companies allows companies the freedom to innovate, while competitive the freedom to innovate, while competitive forces select the most successful ideas for forces select the most successful ideas for development & commercialization of development & commercialization of biopharmaceutical products. biopharmaceutical products.


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Contrasting Management Systems Contrasting Management Systems 11

Industrial Industrial AgeAge

Biotech/ICT Biotech/ICT AgeAge

StructureStructure HierarchyHierarchy Internal Internal EnterpriseEnterprise

CultureCulture ConflictConflict Stakeholder Stakeholder CollaborationCollaboration

MissionMission ProfitProfit Profit, but also Profit, but also science & science &

societysociety

11 Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington University, Washington, DC Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington University, Washington, DC


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Our Business ModelOur Business Model

In-license and develop pharmaceuticals for life threatening indications :

Cardiovascular Infectious diseases

Out-license to marketing partners

Strategic alliances (integrating regulatory, clinical &

marketing issues.)

Establish interdisciplinary teams to seek out and help build

valuable business propositions.

• Understand how research gets commercialized


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Business Model Business Model (cont’d)(cont’d)

Adopting this business model allows Adopting this business model allows VDDI to:VDDI to:• Put more resources into things that add Put more resources into things that add

value, andvalue, and• Better manage risk associated with Better manage risk associated with

biopharmaceutical developmentbiopharmaceutical development


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Company OverviewCompany Overview

• Founded September 1999Founded September 1999

• Headquartered Brentwood, TN USA: support offices in Headquartered Brentwood, TN USA: support offices in

Ann Arbor, Bangkok, Dublin, CT, and FL Ann Arbor, Bangkok, Dublin, CT, and FL (administrative & (administrative &

scientific)scientific)

• Experienced Management Team Experienced Management Team

• Represents the Represents the entrepreneurialentrepreneurial model to drive success model to drive success

• Aggressive in-licensing and outsourcing modelAggressive in-licensing and outsourcing model

• Values new approaches and collaborationsValues new approaches and collaborations


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Overview Overview (cont’d)(cont’d)

Company: Company: VDDI PharmaceuticalsVDDI Pharmaceuticals Products:Products: Antibiotics, Medical Peptides, Antibiotics, Medical Peptides,

CardiovascularCardiovascular Markets:Markets: Global Global Customers (current):Customers (current): Regulatory agencies Regulatory agencies

& & U.S. Government U.S. Government Capital Requirements: Capital Requirements: $5 M$5 M Business Model: Business Model: In licensing, technology In licensing, technology

partnerships, and outsourcing modelpartnerships, and outsourcing model Exit: Exit: Marketing Partners, IPO (Q4,2004)Marketing Partners, IPO (Q4,2004)


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ManagementManagement

R. Stephen PorterR. Stephen Porter, Pharm D, Chairman, CEO and President, Pharm D, Chairman, CEO and President

• Therapeutic Antibodies; American CyanamidTherapeutic Antibodies; American Cyanamid

Steve SensoliSteve Sensoli, MBA, Chief Business Officer, MBA, Chief Business Officer

• GeneWorks, GLY DERM, Leeco Diagnostics Inc GeneWorks, GLY DERM, Leeco Diagnostics Inc Mark FisherMark Fisher, Ph.D. - VP Manufacturing, Ph.D. - VP Manufacturing

• SmithKline; Johnson and Johnson; FDA consultantSmithKline; Johnson and Johnson; FDA consultant Kristen FlahartyKristen Flaharty, Pharm D. - Sr. VP Regulatory Affairs, Pharm D. - Sr. VP Regulatory Affairs

• SmithKline, KKF Consulting, 10 NDA’sSmithKline, KKF Consulting, 10 NDA’s John FerkanyJohn Ferkany, PhD - VP Preclinical Development, PhD - VP Preclinical Development

• Oread, Oceanix, NovaOread, Oceanix, Nova


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Scientific Advisory BoardScientific Advisory BoardCardiovascularCardiovascular

Desmond FitzgeraldDesmond Fitzgerald, PhD, MB, BAO, BCH , PhD, MB, BAO, BCH • Royal College of Surgeons, Dept of Clinical Royal College of Surgeons, Dept of Clinical

Pharmacology; Adjunct Prof. Of Medicine Univ. of Pharmacology; Adjunct Prof. Of Medicine Univ. of

PennsylvaniaPennsylvania James TchengJames Tcheng, MD, MD

• Associate Professor of Medicine - Duke Clinical Research Associate Professor of Medicine - Duke Clinical Research

Institute & University Health SystemInstitute & University Health System

• Practicing Cardiologist; over 2500 angioplastiesPracticing Cardiologist; over 2500 angioplasties


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Scientific Advisory BoardScientific Advisory BoardRegulatory AffairsRegulatory Affairs

Raymond Lipicky,Raymond Lipicky, MD. MD.• Former Head of US Food and Drug Former Head of US Food and Drug

Administration Cardio-Renal Drugs Administration Cardio-Renal Drugs Division Division

Joyce CavagnaroJoyce Cavagnaro, Ph.D., Ph.D.• BioAccess LLCBioAccess LLC

Former VP Human Genome SciencesFormer VP Human Genome Sciences


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VDDI’s IP PortfolioVDDI’s IP Portfolio

VDDI focuses on:VDDI focuses on: Intellectual Intellectual

Propperty (IP) Propperty (IP) where general where general proof-of-principle proof-of-principle has already been has already been established, andestablished, and

IP’s that are novel IP’s that are novel or dominant.or dominant.


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Strategic AdvantagesStrategic Advantages

High Quality, Fast Track DevelopmentHigh Quality, Fast Track Development

• Lean OperationLean Operation

• InnovationInnovation

• ““Best of Breed” global partners/collaboratorsBest of Breed” global partners/collaborators

• Pharmacology expertisePharmacology expertise

• Building a Global Building a Global KMKM (knowledge management) model (knowledge management) model

for for Clinical, Regulatory, and Product Development Clinical, Regulatory, and Product Development

ExpertiseExpertise

Narrow Indication: Broad Application CompoundsNarrow Indication: Broad Application Compounds

• Seek fast track approvalSeek fast track approval


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Innovation-basedInnovation-based

VDDI is in the innovation–based VDDI is in the innovation–based biopharmaceutical business. Our biopharmaceutical business. Our success (as well as our partners) success (as well as our partners) involves cultivating a small number involves cultivating a small number of skilled scientists, business of skilled scientists, business executives, and organizations and executives, and organizations and managing these ongoing networks of managing these ongoing networks of biopharmaceutical partners to biopharmaceutical partners to achieve a “win-win” situation. achieve a “win-win” situation.


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Revenue ModelRevenue Model

Out-licensing Agreements:Out-licensing Agreements:

•Up-front paymentsUp-front payments

•Milestone PaymentsMilestone Payments

•RoyaltiesRoyalties

•GrantsGrants Strategic partnership paymentsStrategic partnership payments


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But remember…But remember…

Profitability comes down to:Profitability comes down to:• Good scienceGood science• Quality high-impact decisionsQuality high-impact decisions• Good risk managementGood risk management

Because..Because..““Ultimately the value of a drug comes Ultimately the value of a drug comes

down to the degree of patient down to the degree of patient benefit it offers – not the number of benefit it offers – not the number of people it’s prescribed for.”people it’s prescribed for.”

Arthur Levinson, CEO, GenentechArthur Levinson, CEO, Genentech


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Medical PeptidesMedical Peptides


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Medical Peptides PharmaceuticalsMedical Peptides Pharmaceuticals

Exclusive license for all medical Exclusive license for all medical

indicationsindications $31B Antibiotic space using peptides $31B Antibiotic space using peptides

effectively effectively Technology produces STABILITY and Technology produces STABILITY and

extended DURATION in the peptidesextended DURATION in the peptides


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Medical PeptidesMedical Peptides

Amphibian derived (Ulster): Anti-fungal, Amphibian derived (Ulster): Anti-fungal,

AntimicrobialAntimicrobial Combi-Chem (Queens): Sortase Inhibitors, Combi-Chem (Queens): Sortase Inhibitors,

Biofilm Inhibitors (Gm-)Biofilm Inhibitors (Gm-) InterLink Technology produces STABILITY InterLink Technology produces STABILITY

and extended DURATION in the peptides and extended DURATION in the peptides

(REV4)(REV4)


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Medical Peptide SummaryMedical Peptide Summary

Amphibiotic collaboration provides huge Amphibiotic collaboration provides huge library of novel compounds with massive library of novel compounds with massive diversitydiversity

Reverse Reverse magaininsmagainins, , indolicidinsindolicidins and and cecropinscecropins of particular interestof particular interest

Reversal of improved peptides; reduce Reversal of improved peptides; reduce hemolytic potential and protease degradationhemolytic potential and protease degradation• Increases duration of action, lowers Increases duration of action, lowers Cost of Cost of

GoodsGoods In animal trialsIn animal trials


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NADsNADs


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NADs TechnologyNADs Technology Nicotinamide Adenine Dinucleotide Nicotinamide Adenine Dinucleotide

synthetasesynthetase (NADs) inhibitors (NADs) inhibitors Enzyme that plays an essential role Enzyme that plays an essential role

in oxidation-reduction reactions in in oxidation-reduction reactions in bacteriabacteria

NADs inhibitor can stop growth and NADs inhibitor can stop growth and be used as a prophylaxis against be used as a prophylaxis against infectioninfection


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NADs Compounds…promising NADs Compounds…promising indicationsindications

Prohibit hospital-based gram positive Prohibit hospital-based gram positive infectionsinfections

Refractory or resistant hospital Refractory or resistant hospital acquired fungal infectionsacquired fungal infections

Crop protection – antibiotic Crop protection – antibiotic fungicides can improve crop yields fungicides can improve crop yields and qualityand quality

Threats from BioterrorismThreats from Bioterrorism


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NADs TechnologyNADs Technology

Novel class of small molecules, simple 4-Novel class of small molecules, simple 4-step synthesis = “low cost of goods”step synthesis = “low cost of goods”

Fast Track, Orphan designation, & Fast Track, Orphan designation, & nontraditional accelerated development nontraditional accelerated development (US FDA)(US FDA)

Narrow indication/broad applicationNarrow indication/broad application Segmented biologic spectrum (Gram +) of Segmented biologic spectrum (Gram +) of

activityactivity Three distinct and large market potentialsThree distinct and large market potentials Intellectual property secureIntellectual property secure


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Ongoing ActivitiesOngoing Activities

Serum stabilitySerum stability Protein bindingProtein binding Mammalian cell cytotoxicityMammalian cell cytotoxicity Metabolic stabilityMetabolic stability Preliminary rodent PKPreliminary rodent PK Gram quantity synthesis Gram quantity synthesis Iterative chemistry optimizationIterative chemistry optimization


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CardiovascularCardiovascular


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A Global Problem and CostsA Global Problem and Costs CVD is the world’s leading cause of death – CVD

is truly a global problem. CVD accounts for 20-50% of all deaths in most

countries. Total estimated sales of CVD drugs in the world’s

12 largest markets : $40 billion (IMS Health, 1998)

It is estimated that direct and indirect costs to treat CVD will total $118.2 billion (USA).

Nearly 70 percent of all patients who suffer a coronary event will fail medical therapy and require revascularization procedures in order to survive.


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Current Lead ProductCurrent Lead Product

Phase III cardiovascular drugPhase III cardiovascular drug

• Pharmacia donation to Western Michigan University with Pharmacia donation to Western Michigan University with

exclusive licenseexclusive license for a for a GP IIb/IIIaGP IIb/IIIa antagonist antagonist

• Controlling thrombotic events – “Controlling thrombotic events – “PCTR”PCTR” (percutaneous (percutaneous

transluminal coronary revascularization.)transluminal coronary revascularization.) or percutaneous or percutaneous

coronary intervention (PCI)coronary intervention (PCI)

• Development program to be completed and Development program to be completed and Product to Product to

MarketMarket ► ► in 2-3yearsin 2-3years


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Cardiovascular Product…. The Cardiovascular Product…. The MarketMarket

Annual worldwide market for product is Annual worldwide market for product is estimated to exceed $ 1 billionestimated to exceed $ 1 billion

Worldwide license for the technology with Worldwide license for the technology with estate of estate of 161 patents 161 patents (99 issued- 19 US)(99 issued- 19 US)

Acute Coronary SyndromesAcute Coronary Syndromes (ACSs)-- (ACSs)-- research data indicates that research data indicates that oraloral GP IIb/IIIa GP IIb/IIIa inhibitor therapy merits a prominent role inhibitor therapy merits a prominent role in the initial management of patients with in the initial management of patients with ACSs. ACSs.

coronary stent and coronary stent and angioplastyangioplasty


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Next Steps….Next Steps….

Establish a presence through collaboration Establish a presence through collaboration and marketing partners in Asia-Pacific. and marketing partners in Asia-Pacific.

Start funneling technology into strategic Start funneling technology into strategic partnerships, while keeping intellectual partnerships, while keeping intellectual property and value they create.property and value they create.

Find a smart way to get Asia-Pacific’s Find a smart way to get Asia-Pacific’s smart money and people involved.smart money and people involved.

Establish global collaborative research to Establish global collaborative research to create sustainable value and pipelines.create sustainable value and pipelines.


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Summary of VDDI’s ProfileSummary of VDDI’s Profile


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VDDI believes in Collaborative VDDI believes in Collaborative Partnerships because:Partnerships because:

through this diverse through this diverse blend of global blend of global

working working relationships, the relationships, the

interests of interests of allall stakeholders are stakeholders are

enhanced and risks enhanced and risks are better are better managed. managed.


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VDDI’s Culture VDDI’s Culture

For VDDI to be successful in its global For VDDI to be successful in its global ventures it will always:ventures it will always:

• emphasize the value of its science and emphasize the value of its science and technology, technology,

• the importance of its research & the importance of its research & management personnel, and management personnel, and

• its ultimate goal of contributing to its ultimate goal of contributing to medicine and human well-being. medicine and human well-being.


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Belief in Convergence & Belief in Convergence & Acceleration…Acceleration…

VDDI armed with a newly emerging VDDI armed with a newly emerging paradigm that recognizes the paradigm that recognizes the

creativity of self-organizing systems creativity of self-organizing systems focused & supported in a focused & supported in a

collaborative scientific & business collaborative scientific & business community, this new drug community, this new drug

development strategy for will lead development strategy for will lead the company into an era of the company into an era of

unprecedented economic growth.unprecedented economic growth.


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The Future…The Future…

belongs to companies who belongs to companies who “…“…build empires of the build empires of the

mind.”mind.” (paraphrased: a Winston Churchill quote)


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““As the Future Catches You”…As the Future Catches You”…1

VDDI believes…VDDI believes…• That as new disciplines and technologies That as new disciplines and technologies

emerge…emerge…• You don’t win the game just producing a You don’t win the game just producing a

lot of knowledge…lot of knowledge…• You also have to protect it…You also have to protect it…• And apply it!And apply it!

1 Book title: Juan Enriquez, As the Future Catches You; © 2000, 2001, Crown Business, New York, NY


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The 21The 21stst Century Scenario Century Scenario

As traditional Big Pharma’s structural and resource advantages decay and more products and services enter the global competitive arena, strategies and collaborations formed around knowledge can change the game and open up new paths of profitability.


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A Final Thought…A Final Thought…

““The great thing in this world is not so The great thing in this world is not so much where we stand, as in what much where we stand, as in what

direction we are moving.” direction we are moving.” 11

Oliver Wendell Holmes, Chief Justice, US Supreme Court

1 Juan Enriquez, As the Future Catches You; © 2000, 2001; Crown Business, New York, NY; p184


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““Rapidly developing novel drugs for Rapidly developing novel drugs for Cardiovascular and Infectious diseases”Cardiovascular and Infectious diseases”

june 2003 vddi pharmaceuticals (asia pacific) confidential 1 vddi pharmaceuticals “rapidly...

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