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NCBIO This Month

· Draft Rules for Market-Based Sourcing· Opportunities for Industry Discussed at Annual Meeting· Panels on the Role of the Microbiome and Trends in Life Sciences· Representative Nelson Dollar Receives NCBIO Award· Lessons Learned Discussed at NCBIO Annual Dinner· NCBIO Elects New Board members· Thanks to Annual Meeting Sponsors· Risk Management Topic at BMF Meeting· VaccinatioNCelebration Held October 4th· Changes in Agriculture Discussed at AgBiotech Summit· NCATS SBIR and STTR Grant & Contract Funding Opportunities Open Now

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· At the National Level· Member News· Member Benefits· Calendar

Draft Rules for Market-Based Sourcing

The North Carolina Department of Revenue has issued draft rules governing market-based sourcing of sales revenue for income tax apportionment purposes. Theseextensive rules will guide the determination of revenues that are attributable to NorthCarolina. This determination is becoming increasingly important as North Carolinamoves to a more sales-weighted apportionment formula.

Among North Carolina life science companies, clinical research organizations are likelyto be most affected by the new rules. However any company that provides services,including delivery of goods, could be affected by the rules.

The Department was directed to develop the draft rules by the 2016 session of theNorth Carolina General Assembly. A final draft of the rules will be reviewed by the 2017Assembly. If approved, enacting legislation will be adopted and the rules will takeeffect.

The Department of Revenue will accept comments regarding the proposed rules until

October 2016UPDATEServing the NC LifeSciences Industry

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January 3, 2017. In addition, the Department will hold a public hearing on the rules onOctober 31.

Copies of the draft rules, including Pertinent examples are available from theDepartment.

NCBIO is seeking to convene a working group of clinical research organizations toevaluate the draft rules and develop unified comments. Persons interested inparticipating should contact Sam Taylor at staylor@ncbioscience.net.

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Opportunities for Industry Discussed at Annual Meeting

Lori Reilly

“Medicines are transforming the treatment of many difficult diseases such as HepatitisC, Cancer and high cholesterol,” Lori M. Reilly, Executive Vice President Policy &Research Department for PhRMA stated at the NCBIO Annual Meeting. In discussing“The Value of the BioPharmaceutical Industry,” Reilly outlined some “pragmaticsolutions” to address cost concerns including:

Modernize the FDA to keep pace with scientific discovery and increaseefficiency of generic approvalsAddress barriers to paying for value, develop patient-centered valueassessment tools and support appropriate use of medicinesMake quality and cost information public to aid in decisions and enforcecommon-sense rules that prevent discrimination against vulnerablepatientsImprove risk adjustment models and reform market distorting programslike the 340B Drug Pricing program

Joe Gilliam, Managing Director of Healthcare Investment Banking at J.P. Morgan,presented “A View of Equity Markets and M&A Trends.” He also reviewed key successfactors in recent life science company exits:

Valuable lead product, sufficiently de-risked with significant marketopportunity and ownership retainedProducts which also address cost to the system vs. efficacyStrong management teams led by CEOs with prior public market successCrossover investors to provide validation as well as support on IPO and inaftermarketNear-term data / strategic catalysts to answer the “why buy now”questionExtensive interaction with public investors 6 months to 1 year before IPOorganization meetingCritical to price appropriately for existing market to ensure strong deal

Pfizer

We Work For Health

NCBIO Supporting MembersCook Medical

Merck

and aftermarket performance (prudent / attractive to cover valuationrange)Potential for competitive M&A takeout

Oliver Sherrill, Senior Vice President, Regional Market Director – Research Triangle Parkfor Alexandria Real Estate Equities, focused on “Developing a World Class Cluster.” Heoutlined four reasons for RTP as an emerging Urban-like Cluster.

1. LocationNeutral location centered amongst North Carolina’s top research institutions

2. InnovationUrbanization will drive convergence of innovative agtech, tech, and life sciencecompanies and research institutions

3. TalentSolid foundation that will grow stronger and more connected throughurbanization

4. CapitalStrong NIH funding and improving venture capital but lack of adequatephilanthropy

Joe Stewart, Executive Director of NC FreeEnterprise Foundation, provided memberswith a “Political Outlook for 2016 Elections.” The presentation, following the networkinglunch, focused on voting trends in the state with the impact of moving from a largerural population to a large urban population along the I-85 corridor.

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Panels on the Role of the Microbiome and Trends in LifeSciences

Two panel presentations at the NCBIO Annual Meeting generated audience commentsand discussion. Kelly Smith, Director of Microbials Development of AgBiome, says withmore people to feed, less land to farm and less yield because of crop pests anddiseases, there are mounting pressures driving innovation.

Dr. Shawn Semones, Director of R&D at Novozymes, outlined the BioAg Alliancebetween Monsanto and his company, to develop “a platform for bringing microbes tomarket and a sustainable Agriculture platform for farmers to produce more with less.”

In looking at the use of microbials in health care, Dr. Lining Guo, Vice President ofMetabolon, stated, “Molecular phenotyping can actively measure disease-relatedchanges, as opposed to measuring genetic predisposition or assessing risk of disease.”Giles Shih, CEO of BRI, served as moderator for the panel.

Martin Meeson, Steve Galen, and Megan Osorio

Focusing on trends in biomanufacturing, Martin Meeson, President & COO of Fujifilm

Diosynth – RTP and College Station, TX, stated, “BioManufacturing will need to keep upto meet the supply needs to patients.” Some of the key trends in BioManufacturinginclude:

Outsourcing of BioManufacturing- companies want to leverage the use ofCDMOs (contract development manufacturing organizations).Continuous Processing, particularly in the Downstream

Dr. Steve Galen, Vice President, Adaptive Monitoring and Clinical Innovations, PRAHealth Sciences, discussed the increasing importance of technology and software inclinical trials. Meagan Dean Osorio, Director of Strategic Market and ProductManagement for Bioventus Surgical, noted multiple factors are contributing to theevolution of the market. One particular evolution is greater importance on deliveringtangible, measurable value with a product. Scott Weiner, Partner with Pappas Ventureswas the moderator of the panel.

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Representative Nelson Dollar Receives NCBIO Award

Six-term State Representative Nelson Dollar received NCBIO’s inaugural Life ScienceChampion Award. The Award goes to public officials who have shown outstandingleadership in growing North Carolina’s life science sector. The award was presented toRepresentative Dollar at NCBIO’s 22nd Annual Meeting.

Sam Taylor, Rep. Nelson Dollar and Bob Kenyon of Biogen

“NCBIO is extremely pleased to present this award to Representative Dollar,” saidNCBIO President Sam Taylor, in remarks at the award ceremony. “Many legislators havesupported the life science industry in North Carolina, but few so effectively andconsistently as Representative Dollar.”

“I am very grateful to receive this award and the honor it represents,” said Dollar. “Ihave always felt it is important that North Carolina ensures that patients have access tothe most innovative and effective treatments possible and that our state also takes aleading role in bringing those treatments to market. Life science products bring realvalue to our country’s health care system.” Read more.

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Lessons Learned Discussed at NCBIO Annual Dinner

There is no trouble finding talent for companies a four-member panel told participantsat the NCBIO Annual Meeting dinner. “The ability to attract and retain talent isexceptionally good,” stated Fred McCoy, CEO of NeuroTronik.

The availability of talent and need for consolidation of locations were among thereasons Merz North America relocated to Raleigh, said Hyunna Coelho, Merz HumanResources Vice President.

Securing funding continues to be difficult for many emerging companies. Moderator,Neal Fowler, CEO of Liquidia Technologies told the audience, “You’ve got to follow anythread and throw a lot of lines in the water.” Fowler was the panel moderator.

Dr. Mark Velleca, CEO of G1 Therapeutics, said, “You’ve got to consider many sourcesfrom the government such as SBIR and BARDA, to grant programs, venture funds andcrowdfunding.”

Repeal of the Qualified Business Venture Tax Credit has had a negative impact on somecompanies said panelist Kim Westmoreland, CEO, KeraNetics. He encouraged membersto urge the General Assembly to reinstate the credit. Panelists also called for changes inthe federal tax rate so the United States could be more competitive with othercountries.

NCBIO thanks BioNetwork, Patheon, PPD and VWR for sponsoring the dinner.

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NCBIO Elects New Board members

Thirteen individuals were elected or re-elected to the NCBIO Board of Directors at theAnnual Meeting September 29th. “We are fortunate to have a diverse group ofindividuals serving on our Board and welcome these new members who can bring a lotof experience and skills to the Board,” stated Sam Taylor, NCBIO President.

New members of the Board include: Jeff Abbey (Argos Therapeutics), Neal Fowler(Liquidia Technologies), Robert Kenyon (Biogen), Scott Kohne (Bayer CropScience),Oliver Sherrill (Alexandria Real Estate Equities), and Gary Shope (Patheon).

The following NCBIO directors were re-elected to the Board; Lynn Bottone (Pfizer), MikeElder (Novozymes), Tom Fagley (Hughes Pittman & Gupton), Matt Keffer(PriceWaterhouseCoopers), Will Lee (Cato BioVentures), Russ Read (National Center forthe Biotechnology Workforce) and Tim Willis (MED1 Ventures).

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Thanks to Annual Meeting Sponsors

NCBIO members and guests do not have to pay a fee to attend the Annual Meeting dueto the generosity of the companies and organizations that sponsored the event.

"The annual meeting is a great opportunity to build new relationships and maintainthose already in place. It is evident that the sponsors and attendees share a commongoal of finding ways to work effectively together to advance modern medicine for thebetterment of our community,” stated Nathan Blazei of Kymanox.

“North Carolina’s biotech companies are essential to keeping the life science industryinnovative and competitive, especially during these challenging times for health care. The Conafay Group is pleased to have supported NCBIO’s annual meeting, as thisinspiring event provides wonderful opportunities to form new relationships andreconnect with former colleagues. We’re already looking forward to next year!” statedSteve Conafay.

“VWR is proud to partner with NCBIO as part of the BIO Business Solution grouppurchasing program to provide members the most effective and efficient solutions --products, equipment and services -- for the life science industry so they can focus onwhat's truly important: Discovery. At VWR we enable Science!” said Terry Apter, one ofVWR’s local representatives to the life science industry.

TopRow:BobKenyon,KyleKimbleRow2:LauraMarquis,Sco6Sewell

Row3:GregDavenport,TerryApterBo+omRow:JonathanParrish,JessicaKenyon,Stephen

Conafay,MaryBethPanagos,MeganOsorio,MariaPharr

Thanks to sponsors for the event: Platinum – Cook Medical, The Conafay Group,Kymanox, and VWR International; Gold – BioNetwork, Biogen, Bioventus, Merz NorthAmerica and Quintiles; Silver – AdvaMed, Astellas, Bahnson Environmental Specialties,BIO, Fujifilm Diosynth, NSF Health Sciences, Office Depot and ShareVault; Bronze –BD, Businesswire, CRB, Foundation Medicine, G1 Therapeutics, NC East Alliance, Nikon,Novartis, Novozymes, Royal Hill Consulting; and UCB; Sustaining Sponsors – GSK, Lilly,Pfizer and We Work for Health; Supporting Sponsors – Cook Medical and Merck.

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Risk Management Topic at BMF Meeting

Rick Lawless and Mark Yates

Rick Lawless – Associate Director, Strategic Programs, BTEC at NC State Universityand Mark Yates – Associate Director, Manufacturing Technology & Support, FujiFilmDiosynth discussed risk management training and application at the September BiotechManufacturers Forum. For more information, contact John Wagner.

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VaccinatioNCelebration Held October 4th

Sam Taylor, Secretary Skvarla, John Anderson and Doug Edgeton

The launch of the Seqirus next-generation flu vaccine, Flucelvax Quadrivalent,manufactured in Holly Springs, was celebrated by state and local leaders at an eventhosted by the NC Biotechnology Center October 4th. NCBIO President Sam Taylorparticipated in the event with Seqirus VP of Operations & Site Head John Anderson, NCBiotechnology Center (NCBiotech) CEO Doug Edgeton and NC Commerce SecretaryJohn Skvarla.

Participants could get flu shots as part of the VaccinatioNCelebration. The Seqirus plantwas made possible by a partnership with the U.S. Department of Health and HumanServices to help protect the public from pandemic influenza threats.

Read more about the NCBiotech event.

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Changes in Agriculture Discussed at AgBiotech Summit

“Food’s journey from mind to mouth” in the coming years was the theme of thismonth’s Ag Biotech Summit at the Friday Center in Chapel Hill on Sept. 27 and 28.Organized by the NC Biotechnology Center, participants heard about a variety of topicsincluding Cellular Ag. Read more.

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NCATS SBIR and STTR grant and Contract FundingOpportunities Open Now

The National Center for Advancing Translational Sciences (NCATS) offers small businessfunding opportunities through its Small Business Innovation Research (SBIR) and SmallBusiness Technology Transfer (STTR) programs for entrepreneurs aiming tocommercialize new technologies and platforms that can improve translational researchand health care. Please review the NCATS Open Small Business Opportunities site forupdates to learn about current funding opportunities, and submit applications for opencontract and grant funding.

For additional guidance and information about the application, check out the NIH’s SBIRand STTR resources, including the application process infographic and the Top eRACommons Errors.

There is always value in reaching out to http://NCATS-SBIRSTTR@mail.nih.gov withany questions you might have.

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Register for Medical Device Forum October 25th

“New Medical Device Regulations in European Union” is thefocus of a Forum hosted by MEDIC October 25th at TheFrontier Building, 800 Parks Drive, Durham from 3-6 pm.

The event is in collaboration with NCBIO, the BMES RTPIndustry Chapter, and IEEE EMBS Eastern North Carolina Section. NCBIO members geta discount with code MEDICOCT25. Click for more information and to register.

Panelists are:

Andy Schwab, President of First Flight Ventures Center, (Moderator)Phil Johnson, Senior Director, Quality & Compliance Services,QuintilesIMS™Debra Grodt, Director, Regulatory Affairs, Medical Device and DiagnosticDivision, Novella Clinical, a QuintilesIMS™ CompanyKim Kelly, Director, Regulatory and Clinical Affairs, Bioventus

A networking reception with refreshments will be held following the panelpresentations.

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At the National Level

BIO Releases New Report on Renewable Chemical BiorefineryCommercialization

The Biotechnology Innovation Organization (BIO) released the new report “Advancingthe Biobased Economy: Renewable Chemical Biorefinery Commercialization, Progress,and Market Opportunities, 2016 and Beyond,” documenting substantial, ongoing growthin the renewable chemical industry and outlining federal and state policies that supportthe industry. Read more.

BIO Applauds Senate Passage of Advancing Hope Act

Biotechnology Innovation Organization (BIO) President and CEO Jim Greenwoodreleased the following statement regarding Senate passage of the Advancing Hope Actof 2016:

“BIO applauds the action by the Senate to pass the Advancing Hope Act of 2016, whichwould extend the Rare Pediatric Priority Review Voucher (PRV) Program – which wasscheduled to expire on September 30th – through the end of the year. The program is acritical incentive in promoting research into rare diseases affecting children, and hasbeen a tremendous success since its enactment in 2012 – helping to spur thedevelopment and approval of six new therapies for seven rare diseases that previouslylacked an FDA-approved therapy. We urge the House of Representatives to swiftly takeup and pass this important legislation before the next Congressional recess.” Readmore.

Senate Bill Would Improve Transparency, Accountability of Medicare LCDProcess

Scott Whitaker, President and CEO of the Advanced Medical Technology Association(AdvaMed), issued the following statement after introduction of bipartisan legislation inthe U.S. Senate designed to ensure Medicare beneficiary access to needed medicaltechnologies and services:

“Millions of Medicare beneficiaries rely on Medicare Administrative Contractors (MACs)to make decisions to ensure they have access to the technologies, procedures andservices they depend on,” Whitaker stated.

He added, “Unfortunately, the Local Coverage Determination (LCD) process MACs use isflawed, lacks transparency and does not provide meaningful opportunity for stakeholderinput or appeals. Because of these shortcomings, American patients are at risk forbeing denied access to needed technologies and services.” Read more.

Get Discount to AdvaMed2016 Conference

“Medical Technology: Bringing Innovation & Value to Patients” is the theme of theAdvaMed 2016: The MedTech Conference, October 17-19 in Minneapolis. NCBIOmembers are eligible for a discount. Contact Brenda Summers who will be attendingthe event. Contact her for the discount code and let her know if you are planning toattend.

2016 BIO Investor Forum – October 18-19

Still time to register for the BIO Investor Forum, an international biotech investorconference focused on early and established private companies as well as emergingpublic companies. The event features plenary sessions, business roundtables andtherapeutic workshops, company presentations, and One-on-One PartneringTMmeetings. Find out more.

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Member News

Please have your organization's media/marketing coordinator send news about yourcompany to Brenda Summers - bsummers@ncbioscience.net

BioCryst Pharmaceuticals, Inc. announced that the Company has closed a $23 millionSenior Credit Facility with Midcap Financial. The facility was fully funded at closing andbears a variable interest rate based upon LIBOR, currently at 8.5%; an interest-onlyperiod through fiscal 2017; and scheduled principal and interest payments for thefollowing 40 months. The Company has the option to repay the facility at any time priorto the scheduled principal repayment schedule. Read more.

Cato will be attending NORD's Rare Diseases and Orphan Products BreakthroughSummit October 17-18, the BIO Investor Forum October 17-18 and BIO-Europe FallNovember 7-9. For more information, contact the Team at 919-361-2286.

GSK announced that Emma Walmsley, currently Chief Executive Officer (CEO) of GSK’sConsumer Healthcare division, is appointed GSK CEO Designate and will succeedAndrew Witty as GSK CEO, when he retires on March 31, 2017. Ms. Walmsley will jointhe GSK Board of Directors from January 1, 2017. Read more.

Lucerno Dynamics LLC, a medical device start-up in Morrisville, completed its series Aequity funding round with a total of $6.34 million raised. “We are very pleased with theresponse to our fundraising campaign,” said Ron Lattanze, Lucerno’s CEO. “Thiscompletes our funding initiative. With this investment, we will be able to commercializeour first application of Lucerno sensor technology early next year and it set us up toexplore additional applications of the technology.”

MedPharm CEO Andrew Muddle

MedPharm CEO Andrew Muddle talked about company plans at US launch of facility inRTP in September. MP Pharma Services is the US subsidiary of the UK based topical andtransdermal formulation and development company, MedPharm.

Novan, Inc. announced the closing of the Company's initial public offering of 4,715,000shares of common stock at a price to the public of $11.00 per share, which includes theexercise in full by the underwriters of their option to purchase from the Company anadditional 615,000 shares of common stock at the initial public offering price, less theunderwriting discount. All of the shares in the offering were offered by Novan. Grossproceeds to the Company from the sale of the shares, before deducting underwriters'discounts and commissions, total approximately $51.9 million. Read more.

Quintiles IMS Holdings, Inc. announced that it hassuccessfully completed its merger of equals transactionbetween IMS Health Holdings, Inc. and QuintilesTransnational Holdings Inc. The merger of IMS Health, aleading global information and technology services company,and Quintiles, the world’s largest provider of productdevelopment and integrated healthcare services, creates a

leading information and tech-enabled healthcare service provider with global scale andreach, and a full suite of end-to-end clinical and commercial offerings. Read more.

Pharmaceutical Product Development, LLC (PPD) announced the 2016 team of PPDHeroes, who share inspiring, personal stories of life-changing clinical research and willcompete in the 2016 PPD® IRONMAN® North Carolina triathlon presented by NewHanover Regional Medical Center on Oct. 22. PPD Heroes, who have overcome life-threatening illnesses with medical treatments developed in clinical research, helpincrease understanding of the importance of participation in clinical trials, a criticalcomponent of developing new medicines. PPD Heroes will share their motivating storiesat the PPD Hero Awards, an invitation-only celebration at the company’s worldwideheadquarters in Wilmington on Oct. 21. Read more.

PRA Health Sciences, Inc. and Takeda Pharmaceutical Company Limited have enteredinto a new partnership agreement under which PRA Health Sciences (PRA) will serve asTakeda's primary strategic partner to deliver on the company's pipeline and marketedproducts clinical development and post-approval needs. Read more.

TransEnterix, Inc., a medical device company that is pioneering the use of robotics toimprove minimally invasive surgery, announced that the first radical hysterectomy forcervical cancer utilizing its Senhance surgical robot was performed by gynecologicsurgeon Dr.Salvatore Gueli Alletti, a member of Professor Giovanni Scambia's team, atthe Policlinico A. Gemelli Foundation in Rome, Italy. Read more.

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Member Benefits

BIO Business Solutions® offers NCBIO members special discounts. BIO BusinessSolutions® gives you the purchasing power of the largest companies in the life scienceindustry. 2,800+ companies saved over $135,000,000 in aggregate last year. Find outmore about NCBIO discounts.

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Calendar

Operations in Biotechnology

Saturday Oct 15, 2016

... read more

HPLC in Theory & Practice

Saturday Oct 15, 2016 - Thursday Oct 20, 2016

... read more

AdvaMed 2016 The MedTech Conference

Monday Oct 17, 2016 - Wednesday Oct 19, 2016

... read more

Project Execution Planning (PEP) for Qualification

Monday Oct 17, 2016 - Tuesday Oct 18, 2016

... read more

Applied Principles and Techniques of Depth Flow Filtration and TangentialFlow Filtration

Tuesday Oct 18, 2016 - Friday Oct 21, 2016

... read more

15th Annual BIO Investor Forum

Tuesday Oct 18, 2016 - Wednesday Oct 19, 2016

... read more

Operations in Biotechnology

Tuesday Oct 18, 2016

... read more

Freeze-Drying Fundamentals

Tuesday Oct 18, 2016 - Thursday Oct 20, 2016

... read more

Operations in Biotechnology

Saturday Oct 22, 2016

... read more

MEDIC Professional Forum European Medical Device and Diagnostic

Regulations

Tuesday Oct 25, 2016

... read more

Life Sciences Forum 2016

Tuesday Oct 25, 2016

... read more

Good Lab Practices: FDA and EPA Regulations

Tuesday Oct 25, 2016

... read more

Good Lab Practices: FDA and EPA Regulations

Thursday Oct 27, 2016

... read more

Preparation & Purification of Biological Samples for HPLC Analysis

Saturday Oct 29, 2016

... read more

Fundamentals of Microbiology

Wednesday Nov 2, 2016 - Friday Nov 4, 2016

... read more

Instrumentation Calibration Program for the Life Science Industry

Friday Nov 4, 2016

... read more

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email: bsummers@ncbioscience.org phone: 919-281-8960 web: http://ncbioscience.net

NCBIOP.O. Box 14354Research Triangle ParkNorth Carolina 27709