SoCalBio Open HouseWelcome

July 23, 2010

Wilshire Grand Hotel

Los Angeles (CA)

AgendaAgenda

1. BIO/SoCalBio Introduction2. Round I of vendor presentations 3. Networking and visiting vendor displays 4. Round II of vendor presentations 5. What is next on the SoCalBio Group Purchasing

Committee's agenda 6. Presentation of E&Y's "Beyond Borders" report 7. Meeting adjourns at 12:30

Who We Are

www.socalbio.org

• The Southern California Biomedical Council (SoCalBio) is a trade association serving the biotech and medical device industries in Los Angeles, Orange County and adjacent communities

SoCalBio Background• Built with support from Rebuild LA (RLA)• Incorporated in December 1995• Chartered as a (C)6, non-profit trade association• Became fully functional by mid-1997• SoCalBio is one of three CA regional life-science

associations. The others are Biocom (serving San Diego) & BayBio (serving the San Francisco Bay Area)

• Recent Merger of LINC into SoCalBio enhances access to the Orange County community

• SoCalBio is driven by entrepreneurs united behind a collective action agenda to – Translate our region’s excellence in basic life-science research into high

paying jobs.– Build on local assets to sustain critical mass in biocommerce– Make our region competitive in the “knowledge economy”

Los Angeles/Orange County Region Has a Well Established Life-Science Industry

Source: State Bioscience Initiatives 2010, Battelle Technology Partnership

• Overall, the Los Angeles Metro Region (Los Angeles and Orange Counties) is specialized across non-clinical life-science industry, with about 88,000 workers across over 900 firms in 2008.

SoCalBio Organization• Member-Supported:

– SoCalBio has 250+ corporate members … and growing.– Membership includes device and biotech companies, universities and

research hospitals, and dedicated service providers.– The majority is comprised of emerging life-science firms.– Membership extends from Santa Monica (e.g., Agensys) in the west

to the Inland Empire (e.g., Cardinal Health) in the east and from Valencia (e.g., MannKind) in the north to San Clemente the south (e.g., Reshape Medical).

– Revenues are made of membership dues and sponsorship of events.

• Volunteer-Driven:– Transparent organization.– Action through committees staffed by volunteers from member

organizations.– Governed by a board composed of 20 directors – Chaired by well-known biomed entrepreneur, Alfred E. Mann

SoCalBio Board of DirectorsElected Officers• Alfred E. Mann, Chairman, MannKind Corporation (Chair)• Robert Greenberg, M.D., Ph.D., President, Second Sight (Vice Chair)• Robert Berliner, Of Counsel, Berliner & Associates (Treasurer)• Michael Wise, Partner, Perkins Coie (Secretary)

Board Members at Large• George Ayoub, President & CEO, One Lambda• Bruce Blomstrom, Board Member, Pasadena Angels• Kenneth Charhut, President & CEO, Orqis Medical• Ed Ellsworth, Director Corporate Alliances,

Primary Care Diagnostics, Beckman Coulter• Don Ferrera, Partner, Ernst & Young• Gary Fujii, Ph.D., President & CEO, Molecular Express• Mick Gallagher, President, LS Technologies• David Hankin, CEO, Alfred Mann Foundation

SoCalBio Board Members .. Continued• Robert Hovee, President, RAH Consulting Group• Aya Jakobovits, Ph.D., Sr VP & CSO, Agensys• Jolene Koester, Ph.D., President, CSUN• Jonathan Lasch, Ph.D., Director, AMI - USC• Goran Matijasevic, Ph.D., Executive Director, UCI Chief Executive

Roundtable • Amit Munshi, Chief Business Officer, Kythera Biopharmaceuticals• Pankaj Singhal, Ph.D., COO, Genmark Diagnostics• Charles Troe, Managing Director, West Ridge Associates• Allan Wolfe, M.D., Retired Venture capitalist• Willie Zuniga, President, Grifols Biologicals

Executive Officer

• Ahmed A. Enany, President and CEO

SoCalBio Action Focus• Help Members Mobilize Resources Effectively

– Finance Capital– Intellectual Capital– Human Capital

• Fostering a Synergistic Eco-system– Research Parks– Partnerships – Networking

• Advocacy & Building Social Support– Putting Industry needs on the priority list of local

governments– Industry now perceived as an important pillar of

growth

SoCalBio Value Proposition

• Smart way of doing business– Managing uncertainties through creation of an

information-rich environment.– Business opportunities through networking.– Competitiveness through pooling resources.

• Empowerment through collective action– In the knowledge economy, no firm is an island onto itself.– New industries benefit from collective action to create the

conditions of their reproduction.– The biocommerce universe is populated by many small

firms that can benefit from collaboration.

Group Purchasing Program Highlights• Date started: 2006• Number of vendors: 21 • Number of SoCalBio users in 2010: 66 companies• 2010 $ size of transactions: $8.2 million +• 2009 - 2010 growth: ~ 13%• Done for the most part in collaboration with the Biotechnology

Industry Organization (BIO)• SoCalBio is currently one of the top five BIO affiliates in terms of

revenues generated • SoCalBio has moved into the top 10 in terms of BIO Business

Solutions contract utilization

Biotechnology Industry Organization (BIO)Biotechnology Industry Organization (BIO)

Founded: 1993Tax Status: Non-profit trade associationCEO: James C. GreenwoodChairman: Stephen A. Sherwin, MD,

Chairman, Ceregene, Inc.Headquarters: Washington, DCStaff: 180Members: More than 1,200 organizations

BIO OverviewBIO Overview

• Policy and advocacy at the federal, state and international levels on issues affecting the industry

• Communications services that disseminate information about the benefits of biotechnology

• Produces industry-leading investor and partnering meetings held around the world

• Investor relations and business development intelligence

• BIO Business Solutions discounts for a variety of goods and services

What is BIO Business SolutionsWhat is BIO Business SolutionsSMSM?? • Cost-savings/affinity program for member companies• “Cut deals” and partners with industry leading service providers to

bring discounts and other benefits to member companies on products & services

• Originally designed for small companies; used by companies of all sizes

• Partner with state and regional biotech associations (“Affiliates”) to offer the same cost-savings benefits to their member companies

• Revenue to BIO and Affiliates• Measurable economic benefit: membership recruitment &

retention (reinforces, sometimes justifies, value of mbrshp)• Deeper reach into member companies’ organization• Affiliate collaboration & support

Member Company: Why Participate?Member Company: Why Participate?

• Savings on products and services• No experienced purchasing/sourcing professional

(small companies)• Time savings (pre-established pricing & terms)• Initial and ongoing due diligence

• Competitive bid (RFP) and contract negotiations

• Ongoing contract enhancements• Support of BIO and Participating Affiliates

• Non-dues revenue

38 Endorsing Affiliates38 Endorsing AffiliatesAlabama – Biotechnology Association of AlabamaArizona – Arizona BioIndustry AssociationCalifornia (Bay Area) – BayBio California (Los Angeles) – Southern California

Biomedical CouncilCalifornia (San Diego) – BIOCOM Colorado – Colorado BioScience AssociationDelaware – Delaware BioScience AssociationFlorida – BioFlorida Georgia – Georgia BioHawaii – Hawaii Science & Technology CouncilIllinois – Illinois Biotechnology Industry

OrganizationIndiana – Indiana Health Industry ForumKansas – Kansas Bioscience OrganizationKentucky – Kentucky BioAlliance Maine – Biotechnology Association of MaineMaryland – Technology Council of MarylandMassachusetts – MassBioMichigan – MichBio Minnesota – LifeScience Alley

Missouri – Missouri Biotechnology Association Montana – Montana Bioscience AllianceNebraska – Bio Nebraska Life Sciences Association New Jersey – BioNJ New Mexico – New Mexico Biotechnology &

Biomedical Association New York – New York Biotechnology Association North Carolina – North Carolina Biosciences

Organization Ohio – BioOhio Oregon – Oregon Biosciences AssociationRhode Island – BioGroup of Tech CollectiveSouth Carolina – Palmetto Biotechnology Alliance South Dakota – South Dakota Biotech Association Tennessee – Tennessee Biotechnology AssociationTexas – Texas Healthcare and Bioscience Institute Texas – BioMed SA Utah – Utah Technology CouncilVirginia – Virginia Biotechnology AssociationWashington – Washington Biotechnology &

Biomedical AssociationWisconsin – BioForward

2004 – 2009Program UtilizationProgram Utilization

Total UtilizationTotal Utilization

Compound Annual Growth Rate: 18.8%

Average of 1.4 contracts per company in 2008

Compound Annual Growth Rate: 23.7%

Total SalesTotal Sales

Utilization By StateUtilization By StateTop 12 StatesTop 12 States

Benefits of PartneringBenefits of Partnering

BIO•Access to BIO nonmembers

•Increases total spend volume

•Ability to leverage better deals

•Support Affiliates’ mission

Affiliate•Piggyback on national program

•Established contracts; requires few resources, time & expenses

• Supports membership recruitment & retention

• Additional, measurable benefit

• “Deeper” relationships

Program Function and Eligibility• The Group Purchasing Program is offered as a benefit to

member companies to help in reducing the burn rate and cutting the cost of doing business

• To be eligible, the interested company must be a member of SoCalBio and/or BIO

• Participation in the program is voluntary• Program generates significant savings to participating

companies and, in some instances, company employees• Participating companies would be able to track purchases and

calculate the savings generated• Savings exceed any membership dues paid to SoCalBio

SoCalBio Group Purchasing Committee

• Program is managed by a committee of volunteers from SoCalBio member companies.

• Committee functions include: – Working with BIO on executing group purchasing contracts in

SoCalBio territory covering Los Angeles and Orange Counties, the Inland Empire and Gold Coast communities

– Overseeing program performance– Screening and selecting new vendors– Marketing the program– Trouble-shooting

Committee Members• Leadership

– Pankaj Singhal, Ph.D., COO, Genmark Diagnostics(Chair)– Marina Kreculj, Sr. Purchasing Manager, Agensys (Vice Chair)– Haskel Joseph, Director of Procurement, Abraxis Bioscience (Vice Chair)

• Members at Large– Richard Cupp, Purchasing & Distribution Manager, HemaCare Corp.– Ranil Fernandez, VP of Operations, Bioscreen Testing Services– Karen Mayo, Sr. VP, LA BioMed– Matthew Pfeffer, CFO, MannKind Corp.– Richard Tamaki, COO, Molecular Express– Howard Wilson, Director of Planning and Procurement, Los Angeles (CA),

Siemens Medical Solutions

Group Purchasing Vendors

Vendors Added Recently Just by SoCalBio

Iron Mountain …………………….. Document storageCaine & Weiner ……………………. Debt recovery servicesGlobal Language Solutions …… Translation servicesDiversified Alarms ………………… Security systems for labsAT Conference ……………………. . Web and phone conferencingImage 2000 ………………………….. Document imaging solutionsCalifornia Litho Arts ……………… Offset commercial lithography

We will survey the membership to identify priorities and other vendors to be considered for inclusion in the program

$Mill

ion

Volume of Business, 2006-2010

31

Companies Utilizing Contracts, 2006-2010

32

Times Contracts Utilized, 2006-2010

33

1. Increase number of contracts per company ratio from 1.50 to 2.00

2. Outreach to new contract users to expand their use of other contracts

3. Focus on underperforming BIO Business Solutions Partners

4. Add noncompetitive contracts to compliment BIO Business Solutions portfolio

SoCalBio-BIO Business Solutions: 2010/2011 Goals

Today’s meeting is designed to encourage more SoCalBio member companies to sign up and increase adoption

Thank You

Ahmed A. EnanyAhmed A. Enanyenany@socalbio.orgenany@socalbio.org

Southern California Biomedical CouncilSouthern California Biomedical CouncilYour Success Is Our BusinessYour Success Is Our Business

www.socalbio.orgLos Angeles Office:

444 S. Flower St., 34th Fl.Los Angeles, CA 90071Phn: 213-236-4890Fax: 213-622-7100

Orange County Office:

2144 Michelson DriveIrvine, CA 92612Phn: 949-435-7647