THE BUSINESS OF BIOTECH

1
THE BUSINESS OF BIOTECH

• March 27, 2002
• Brent ReinkeCrosby, Heafey, Roach May

2
What is the Business of BioTech

• Broadest Definition
• Customary Definition
• Drug Development
• Medical Device Products
• Drug Delivery Products

3
What are Investors Looking for in Biotech
Investments

• Not Really Different From Typical Investor
  Criteria
• Management, management, management
• Unique Intellectual Property (Protected)
• Market Size (Need for Product)
• Sound Financial Model

4
Unique Factors/Risks

• Strategic Partnerships - Key Factor
• Unique Risks in Biotech Industry
• FDA Approval
• Increases risk and costs
• Delays investment return

5
Profile of Biotech Startup Investment

• Aviron
• Aviron was formed to discover novel flu
  vaccination.

Facts - Founded June 1992 - Raised 39 Million
prior to IPO - IPO November 1996 (89 Million
market valuation)
6
Profile of Biotech Startup Investment

• Onyx Pharmaceuticals
• Founded by former Chiron scientists to discover
  small molecule drugs based on newly discovered
  molecular pathways

Facts - Founded April 1992 - Raised 44 Million
prior to IPO - IPO April 1996 (131.6 Million
market valuation)
7
Profile of Biotech Startup Investment

• Tularik
• Biopharmaceutical company started in 1991

Facts - Founded December 1991 - Raised 173
Million prior to IPO - IPO November 1999 (595
Million market valuation)
8
Reasons Behind Biotech Development Along 101
Corridor

• Research Centers/Hospitals
• City of Hope
• Huntington Memorial
• Cedar Sinai
• UCLA Medical Center
• USC Medical Center

• Universities
• Cal Tech
• USC
• UCLA
• UCSB
• Northridge
• BioTech Companies
• Amgen
• Baxter
• Medtronic/MiniMed

9
Significant Regional Biotech Transactions

• Medtronic/MiniMed, Inc.
• Amgen/Immunex

10
THE BUSINESS OF BIOTECH

• March 27, 2002
• Brent ReinkeCrosby, Heafey, Roach May