TALES FROM SERENEX: UNIVERSITY SPIN-OFF TO PFIZER ACQUISITION

Anil K. Goyal, Ph.D., CLP

Carolina Innovations Seminar Thursday, January 6, 2011

© 2010 by A.Goyal All rights reserved. 2

•Preface:

Beginning and Conclusion

1

•Chapters:

Years 2001 - 2008

2

•Epilogue:

Essential Ps of Serenex

3

Story Outline

© 2010 by A.Goyal All rights reserved. 3

DISCLAIMERS1) “ALL PERSONS, INCIDENTS AND

SITUATIONS PORTRAYED IN THIS PRESENTATION ARE FICTIONAL. ANY RESEMBLANCE TO ACTUAL PERSONS, INCIDENTS, AND SITUATIONS IS COINCIDENTAL AND ACCIDENTAL.”

2) “INDIVIDUAL RESULTS MAY VARY”

© 2010 by A.Goyal All rights reserved. 4

The Beginning and the Culmination

June 2001• Spin-Off from Univ. of Virginia

(Prof. Tim Haystead)• Proteomics Company

(Tools/technology)• 2 Employees (Prof. Haystead

and George Young)• Personal loan from George

Young

April 2008• Company with 2 clinical

programs and a drug discovery pipeline

• ~32 Employees• ~$80M invested• Acquired by Pfizer• Multi-hundred Million $$

exit for investors

© 2010 by A.Goyal All rights reserved. 5

Co Location: Incubator to Downtown Durham

incubator in RTP

2003 – 2008Downtown Durham

2001-2002

“Clark and Sorrell” (Garage & Auto Repair Shop)

Durham Historic Landmark

© 2010 by A.Goyal All rights reserved. 6

Clark & Sorrell 1910 & 2001

1910

2001

© 2010 by A.Goyal All rights reserved. 7

Year 2000-2001: The Beginning• Founding Management Team:– Professor Tim Haystead, at Univ. of Virginia (UVa) – George Young, SVP of Ops, ex-VP Sales, Dyax (living in MA/NC)– Robert Dishman, CEO, ex-Director, Dyax (living in MA)– Susan Dana Jones, SVP of Corp. Development (living in MA)– Lanny Bynum, SVP Finance & Administration

• Patents: Technology patents on ATP-Sepharose resin

• Market Areas: Proteomics (Protein separation and identification), target discovery and toxicity

profiling

• Prof. Haystead moves to Duke University

• Serenex (“Out of Serendipity”) established in Durham

• Series A: Metaphase Venture Partners, $2 million

• Pfizer and Pharmacia Evaluate Proteome Mining Technology

Serenex’s Proteome Mining Technology

© 2010 by A.Goyal All rights reserved. 8

Protein separation, MS analysis of peptides to identify proteins

Compound Conc.

Competitive displacement of proteins off resin

Compound

Specific proteomefraction is captured

ProteomeExtract (e.g. Pig tissues)

Eluted Proteins

Proprietary Resin Resin with bound Purine Binding proteins

© 2010 by A.Goyal All rights reserved. 9

2002: Series B Funding & New Leadership• Apr Steve Hall joins as VP of R&D

Ex- Lilly/Sphinx, Squibb; 20+ yrs. @ pharma

Business Model Shift:Tools Ü Drug Discovery Platform/ Services & Internal Discovery

• Aug Series B Financing: $15 Million Intersouth Partners Lilly Ventures Seaflower Ventures & Metaphase Venture Partners

• Sept Chiron Proteome Mining Deal• Oct JnJ Proteome Mining Deal• Nov Richard Kent, joins as President and CEO

Ex-GSK Chief Medical Officer, 20+yrs @pharma

© 2010 by A.Goyal All rights reserved. 10

2003: Deals, Internal Discovery & Grow Mgmt Team

• May GSK discovery services deal• July New Mgmt Team Members:

– Ian Howes as CFO – Anil Goyal as VP of BD

• Initiated Internal Drug Discovery Effort: – Developed strategy – Designed & assembled a focused custom compd library– Screened compound library with Proteome Mining

Technology (“Chemoproteomics” screen)

• Nov Roche discovery services deal• Nov Internal screening resulted in >9

target programs

© 2010 by A.Goyal All rights reserved. 11

2004: Progress on all fronts…but• Signed Several Discovery Services deals– Lilly, Novartis, Aventis, BMS.... (generated minuscule $s)

• Internal Discovery Effort– Generates hits for >6 target programs

• Raised $8 million in Series B extension (August)– Intersouth Partners – Takeda Research Investment (TRI) &– Western Technology + other Series B funders

• Market Forces: – VCs funding only clinical stage companies

(or NRDOs..”No Research Development Only” company)– Pharma/Biotech not doing platform deals that give

significant upfront $s

© 2010 by A.Goyal All rights reserved. 12

2005: Major Shift in Business Plan• Focused internal effort on one target

Heat Shock Protein 90 (Hsp90) Inhibitor

• Small downsizing

• In-Licensed Clinical Stage Compound: OC-1012 for Oral mucositis (chemotherapy side effect) treatment– Outcome of extensive search (initiated back in mid-2004) for a

Phase 1/2 oncology &/or inflammation drug

• Raised $30 million in Series C– Richie Capital (a Hedge Fund) + all Series B funders

• Business Development: Initiated marketing for Hsp90 program

© 2010 by A.Goyal All rights reserved. 13

2006: Execute the Plan & Partnering Decision Making

• Management Team Expanded– Sol Lucas, VP clinical development (ex-GSK), – Lex Smith, VP technical development (Fulcrum, ex-GSK)

• SNX-1012: Initiated Phase 2 Clinical Trial• SNX-2112/5422 (Hsp90 Program): – Continued Aggressive Business Development Effort– Biogen Idec acquires Conforma (May 2006)

$150M upfront + $100M Milestone– Infinity & MedImmune alliance (Aug 2006)

$70M upfront + $430M Milestones + Royalties– Deals benchmark value of Hsp90 area

– Received two term sheets to partner the program

• Raising Series D funding….

CONFIDENTIAL 14

Nov/Dec 2006 Issue

© 2010 by A.Goyal All rights reserved. 15

April 2007: SNX-5422 IND Filing with FDAJuly 2007: Start First Clinical Trial

© 2010 by A.Goyal All rights reserved. 16

2007: Grow Hsp90 Program, Partnering & Series D

• Industrial Espionage Case. Filed Law Suit against Yunsheng Huang (ex-contract chemist) who stole and funneled IP to a Chinese company

• Raised $31M ($26M Series D & $5M debt facility)+ Cornell Capital Partners, Pearl Street Ventures + MC Life Science Ventures, Pac-Link Bio Venture Capital, + All previous investors

• Phase 2 trial of SNX-1012 Moving but Slowly• Management Team Addition– Judy Bryson, VP clinical development (ex-GSK)

• Hsp90 Program: Data beyond oncology, in inflammation and CNS diseases builds “Product Pipeline in a Program”

• BizDev: Negotiating >5 strategic alliance term sheets & an acquisition offer

17

2008: Close an M&A Deal• Due Diligences Visits: Intensive preparation and filling of

the “e-Room” with all corporate/financial documents

• Dual Track Negotiations– Strategic Partnership for oncology with several large pharmas– Acquisition offer(s) (with spin-off of SNX-1012)

• Mar: Acquisition deal by Pfizer signed$Multi-hundred Million cash deal

(Upfront $ & milestones)

• Apr: Spun-off SNX-1012 into Coserics, LLC• Sept: Programs transitioned to Pfizer sites

All employees moved on with severance

package + stock sale© 2010 by A.Goyal All rights reserved.

Deal of Year AwardGROWTH Company

Of YEAR Award

© 2010 by A.Goyal All rights reserved. 18

Business Model EvolutionManagement Team Evolution

Tools/Technology Platform

Discovery Services

Internal Drug Discovery

In-Licensed Clinical Product

Product Pipeline (2 Products in Clinic)

2001 2002 2003 2004 2005 2006 2007 2008

© 2010 by A.Goyal All rights reserved.

pLuck

Essential Ps

19

People

Persist-

ence

Product

Pipeline

pFinances

pFocus

Pre-eminen

t Science

Patents pFlexibility

© 2010 by A.Goyal All rights reserved. 20

QUESTIONS?