com gov org First telerobotic surgical system First

. com. gov. org First telerobotic surgical system First assigned domain names New drug for lymphoma R Computer mouse U. S. Dept. of Education 2010 technology plan Ultrasound for medical diagnostics Treatment for d rug-resistant malaria First ARPANET and internetworking nodes Emmy Awards for HDTV and more Created Siri (acquired by Apple) A Research and Innovation Center © 2016 SRI International 1

SRI’s Mission: create world changing solutions making people safer, healthier, and more productive Not-for-profit : Return on investment is measured by impact, not dollars Science-focused: Build on technology platforms Multidisciplinary: Perspective: Breadth and depth to solve the Located in the heart of silicon hardest problems valley, 100 s of partners around to fill gaps in customer needs © 2016 SRI International the globe 2

SRI – Who We Are A world-leading independent R&D organization • • • Founded by Stanford in 1946 − Located in heart of Silicon Valley − More than 10 locations worldwide − Not-for-profit corporation − Independent in 1970 2, 100 staff members − More than half with advanced degrees Consolidated 2015 revenue ~$550 M Headquarters — Menlo Park, California Princeton, New Jersey 3 © 2016 SRI International

Bridging Basic Research to Commercialization Easy to describe, very challenging to do! “Valley of Death” Corporations Universities and National Laboratories Discovery Basic Research Applied Research © 2012 SRI International © 2016 SRI International Product Development Production

Bridging Basic Research to Commercialization Easy to describe, very challenging to do ! SRI Universities and National Laboratories Discovery Basic Research Applied Research © 2016 SRI International Corporations Product Development Production

Our legacy of world-changing innovations. com. gov. org First computer mouse Created Siri (acquired by Apple) First ARPANET and internetworking nodes First telerobotic surgical system Ultrasound for medical diagnostics New drug for lymphoma U. S. Dept. of Education 2010 technology plan Emmy Awards for HDTV and more Developed SWOT analysis 1 st Disneyland theme park Vision technologies (HDTV, Color TV, etc. ) © 2016 SRI International First assigned domain names

Converting government investment to market impact Products Scale Up & Licenses Non-Profit Retain IP

SRI Technology Spin-off Ventures Publicly Traded Robotics DNA testing services* Surgical robotics Speech recognition for customer service Electroadhesion for materials handling Innovative robots for manufacturing/service* Soft robotics for Medical rehabilitation Information Technology Virtual personal travel guide Artificial intelligence for web personalization Real-time web video streaming and sharing Intelligent banking Artificial intelligence for calendar integration Virtual personal assistant for smart phones* Customer service tools* Iris biometric identification* Materials Electroactive polymers* Enterprise social media technology* Digital TV technologies* Stray voltage detection services Panoramic image editing software* Electronic and digital signature solutions Technology for K-12 and higher education Bio/Medical Anti-counterfeiting systems* Environmentally friendly light products* Digital color printing applications* Metal “print and plate” manufacturing process Super-bright LED light engines* Optical network components Drug dispensing system* Disposable hearing aid* Drug discovery (formerly Rosedale Medical) Glucose monitoring system Bed bug detection devices *Acquired or merged © 2016 SRI International

100+ industry projects annually • S/W stabilization for mobile chat - - Google • Mobile Banking assistant - BBVA (Spain) • Medical device for continuous blood pressure measurement - Omron • Long-range Iris Biometrics - Client private • Vehicle-to-vehicle communications - GM • Dioxin abatement - Mitsui Heavy Industries (Japan) • Content summarization - Yahoo • Underwater Mass Spectromete - Chevron • Educational Products - Microsoft • And many more … • • • Activity monitoring algorithms - Client private Automotive lane sensing - Volvo Scientific digital imagers - Perkin-Elmer Pharmaceutical development - Roche Electro-adhesion Floor Cleaner - Client Private (Japan) © 2016 SRI International

Key Success Factor = How We Work 5 Disciplines of Innovation enable success 1 Important customer or market needs 2 High value creation 3 Innovation champions 4 Innovation teams 5 Organizational alignment Top 10 book 10 © 2016 SRI International

SRI technology platforms in computing, robotics, sensors, materials, biomedical science and health. A. I. & Computer Speech & Vision Science Technology Robotics & Automation • Machine learning • Virtual Assistants • Structured analysis • Knowledge representation • Workflow automation • Activity recognition • Cyber & security • Speech recognition • Translation • Language analytics • Emotion and state • Speaker ID • Natural language • Manipulation • Mobility • Micro-robots • Trusted systems • Data analytics • Image processing • Perception • Visual search • Augmented/Virt ual reality • Object and activity recognition • Biometrics • Automated reasoning • Cyberphysical systems • Computational Platforms SRITechnologyimaging • Actuators • Automation systems • Machine learning • Perception • SLAM • Electro-active materials Sensing & Devices • Multi-spectral imagers • Medical devices • RF, Radars • Chemical • Optics and Lasers • Molecular/DNA • Input and gesture • Physiological monitoring Energy & Materials Biomedical Science & Health • Custom polymers • Drug Discovery • Low cost silicon • Preclinical Development • Carbon capture • Early Clinical Trials • Biofuels • Neuroscience • Gas separations • Infectious Disease • Water purification • Oncology • Bioinformatics • Biomarkers • Efficient energy • Proteomics transfer • Sustainable materials • Glycomics • Diagnostics • Circulating Tumor Cells • Biomedical Imaging • Medicinal Chemistry • HTS/HCS • Aging Research Initiative Combine and Customize © 2016 SRI International Unique Client Solution

Lab to Market Ideation Process Strategic Landscape Identify major market trends & the business context of our customers Customer Need Statement Learn customer business and technical challenges and use cases Ideation Workshop Create technical solution concept, scope and timeline © 2016 SRI International Selection Prioritize and determine phased implementation strategy

SRI’s innovation acceleration model Execute Engage Discover Ideation Workshop Identify internal and external technology / market baseline. Generate use case scenarios & product / service offerings linked to innovative use of SRI technology platforms. Build short and longer term roadmaps Ideation 1 - 3 months Phased Development Program Rapid & Iterative Lab-to-Market Model Proof of Concept Transition Prototype Client Review SRI Technology Platforms to Client Review Custom Solution 9 - 18 months Innovation Programs Applying SRI’s value creation process to identify, evaluate and transform organizational innovation practices. Impact © 2016 SRI International 13

Case Study: SRI Lab to Market 2003 to 2008 – DARPA initiates new R&D program called Cognitive Assistant that Learns and Organizes (CALO). SRI selected to lead team of 20+ research organizations. $150 M funding over 5 years. 2007 – Several industrial projects with computing and mobile electronics companies. SRI hires Dag Kittlaus, former Motorola executive, as an EIR (entrepreneur-in-residence) to explore market opportunities for CALO technologies. Late 2009 – Siri launches in app store 2008 – SRI scientist Adam Cheyer joins Dag Kittlaus and Tom Gruber to found Siri as an SRI spin-off venture. Siri raises $8. 5 M series A financing, followed by $15 M series B. May 2010 – Siri acquired by Apple Oct 2011 – Siri integrated in i. Phone 4 s © 2016 SRI International 14

Case Study: SRI Lab to Prototype Strategic Landscape Customer Need Statement • Motorcycle Fatalities • • Automobile Fatalities We want to build safer motorcycles We want to increase our market share We want to be known as technology leaders © 2016 SRI International Ideation Workshop Concept Design

First trials -> less than 7 months after workshop https: //www. youtube. com/watch? v=UC

Case Study: SRI Lab to License Enhancing security and privacy for mobile devices Samsung sought a robust biometric experience that was fast and simple to use. Utilizing SRI’s Iris On-the Move (IOM™) technology, Samsung and SRI were able to develop a compact, lowcost H/W and S/W module that was safe, secure, and easy-to-use. Result: • 1000 x smaller • 100 x lower-cost • 10 x faster Samsung entered into a license for technology and continues to work with SRI to develop both industrial and consumer applications of mobile IOM™. 17

Biosciences Basic biomedical research Drug and diagnostics discovery © 2016 SRI International Preclinical and

Our Impact on World Health More than six decades of breakthroughs Halofantrine SRI-discovered halofantrine, marketed as Halfan® by Glaxo. Smith. Kline and distributed by the World Health Organization, has saved countless lives as a treatment for drug-resistant malaria. Pralatrexate For treatment of T-cell lymphoma, the FDA approved pralatrexate, co-discovered by SRI and marketed as Folotyn® by Allos Bexarotene SRI discovered Bexarotene, a retinoid receptor ligand marketed as Targretin® by Eisai for treatment of cutaneous T-cell lymphoma © 2016 SRI International Ultrasound SRI made ultrasound practical for medical diagnostics. Telerobotic Surgery SRI technology allows surgeons to remotely perform minimally invasive surgical procedures. Bioinformatics SRI ’ s genomic databases combine with artificial intelligence and symbolic computing techniques to accelerate research.

Real drugs Halfan® halofantrine Antimalarial GSK Targretin® bexarotene Anticancer Eisai Folotyn® pralatrexate Anticancer Allos

SRI Biosciences Pharmaceutical Focus • 300 person R&D division − $50 M annual base of gov’t-funded R&D − $20 M annual non-gov’t support • In typical years we team with approx. : − 10 foundations & other nonprofits − 20 gov’t agencies − 30 universities − 70 companies © 2016 SRI International 21

SRI Biosciences Our team © 2016 SRI International 22

100 s of Novel Drugs $100 s of Millions in R&D Millions of Lives

Basic Research in Disease Mechanisms Infectious Disease Cancer • Tropical & neglected diseases • Influenza, TB • Drug resistance • Vector biology • Biodefense • • • CNS Disease Akt, survivin, estrogen pathway inhibitors Low oxygen, ischemia Angiogenesis Rare cell technology Radiobiology research Tumor glycomics Autoimmunity & Inflammation • Inflammatory & autoimmune diseases • Aging • Innate responses • Cognition • Sleep, circadian rhythms • Adaptive responses: • Neurodegeneration Antigen-specific responses, • Pain T cell and B cell functions • Addiction

From Idea to IND & Beyond SRI Biosciences Basic Research Drug Discovery “Institute” “Biotech

SRI Biosciences Capabilities Wide range of experience Basic Research Biomarkers& Diagnostics CRO Services Proteomics Systems Biology Drug Repurposing Drug Discovery NCE & NBE Therapeutics HCS & HTS Preclinical Development Pharmaceutical. Sciences PK/DM & Predictive ADMET Medicinal Chemistry Drug. Delivery & Formulations Small Molecules Safety Toxicology Novel Peptides Clinical. Chemistry Bioimaging Polyclonal Antibodies CMC & QA/QC Pharmacology Vaccines GLP & GMP Radiolabeling Project Management Clinical & Regulatory 26 © 2016 SRI International

Integrated Pharmaceutical Discovery & Development Provides seamless transition from idea through the IND and

Biosimilar Capabilities http: //genomebiology. com/2004/6/1/R 2 Genome Biology 2004, Volume 6, Issue 1, Article R 2 Romero et al. R 2. 9 H. sapiens Pathway: oxidative ethanol degradation I comment alcohol dehydrogenase 2: ADH 1 B aldehyde dehydrogenase 2 acetaldehyde NADH acetate NADH ATP coenzyme A acetyl coenzyme-A synthetase: ACAS 2 6. 2. 1. 13 phosphate ADP acetyl-Co. A Locations of Mapped Genes: reports Created by: wagg on 16 -Sep-2003 Comment: This ethanol degradation pathway begins with conversion of ethanol to acetaldehyde by cytosolic alcohol dehydrogenase. The resulting acetaldehyde passes into the mitochondrial compartment where it is converted to acetate (by mitochondrial aldehyde dehydrogenase). Should acetate be activated to acetyl-Co. A within the liver, it would not be oxidized by the Krebs cycle because of the prevailing high ratio of NADH + H / NAD+ within the liver mitochondrial matrix. Consequently, acetate leaves the mitochondrial compartment and the hepatocyte to be metabolised by extra-hepatic tissues [ Salway ]. Extrahepatic tissues take up acetate where it is converted to acetyl-Co. A [ Yamashita 01 ]. References Best 03 : Best CA, Laposata M (2003). "Fatty acid ethyl esters: toxic non-oxidative metabolites of ethanol and markers of ethanol intake. " Front Biosci 8; e 202 -17. PMID: 12456329 Chrostek 03 : Chrostek L, Jelski W, Szmitkowski M, Puchalski Z (2003). "Alcohol dehydrogenase (ADH) isoenzymes and aldehyde dehydrogenase (ALDH) activity in the human pancreas. " Dig Dis Sci 48(7); 1230 -3. PMID: 12870777 Salway : Salway, J. G. "Metabolism at a Glance, Second Edition. " p. 90. Yamashita 01 : Yamashita H, Kaneyuki T, Tagawa K (2001). "Production of acetate in the liver and its utilization in peripheral tissues. " Biochim Biophys Acta 1532(1 -2); 79 -87. PMID: 11420176 Genome Biology 2004, 6: R 2 • OMICS © 2016 SRI International information Figure 3 (see legend on next page) interactions Oxidative and nonoxidative pathways have been demonstrated in a range of tissues including gastric, pancreatic, hepatic and lung. Inhibition of oxidative ethanol degradation pathways raises both hepatic and pancreatic FAEE levels demonstrating that oxidative and nonoxidative pathways are alternative metabolically linked pathways. Pancreatic ethanol metabolism occurs predominantly by the nonoxidative pathway but oxidative routes to acetaldehyde have also been demonstrated in the pancreas - the cytochrome P 450 2 E 1 & alcohol dehydrogenase pathways [ Chrostek 03 ]. refereed research Four distinct human ethanol degradation pathways have been described - three oxidative pathways and one nonoxidative pathway. All oxidative pathways mediate the oxidation of ethanol to acetaldehye which is then oxidized to acetate for subsequent extra-hepatic activation to acetyl-Co. A [ Yamashita 01 ]. Oxidative pathways are differentiated based on the enzyme/mechanism by which ethanol is oxidized to acetaldehyde. The present pathway utilizes cytoplasmic alcohol dehydrogenase with the other two oxidative pathways utilizing endoplasmic reticulum Microsomal Ethanol Oxidizing System (MEOS) and peroxisomal catalase, respectively. MEOS is also known as Cytochrome P 450 2 E 1. The nonoxidative pathway is less well characterized but produces fatty acid ethyl esters (FAEEs) as primary end products [ Best 03 ]. deposited research Superclasses: Pathways • Fermentation /Production Technologies reviews • Bio. Informatics/ Computational Biology 1. 1. 1. ethanol Drug Discovery & Development Capabilities

SRI Drug Development Pipeline – Track Record of Success halofantrine pralatrexate tirapazamine TAS-108 SR 13668 Oral Vancomycin Oral DTPA SR 16157 SR 16388 SR 13654 BH-0492 Early Discovery SRI Drugs available for licensing © 2016 SRI International NDA • NDA • NDA bexarotene IND • IND • IND vidarabine

Bloomberg Global Innovation Index © 2016 SRI International

Top Global Trends in Bio. Pharma • • • Pharmacoeconomics / Outcomes Personalized Medicine Prevention Patient Centric Access AND Affordability Generics Chronic Disease Digital Pharma Biosimilars © 2016 SRI International

Innovation Case Study examples • • • Oral DTPA (agent to counter radiation exposure) Innovation of Diagnostics and Medical Devices (Fast. Cell) Continuous Drug Manufacturing process (Syn. Fini) © 2016 SRI International 32

Case Study: New Drug Formulation for Radiation Exposure Reformulation of Zn-DTPA into an oral formulation from an IV medication Zinc diethylenetriaminepentaacetate (Zn-DTPA) has been the chemical compound commonly used to treat radionuclide exposure delivered through an IV. Many attempts to re-formulate Zn-DTPA into an oral medication has failed. In 2005, SRI took on the project and was able to successfully develop and manufacture a novel, oral formulation of Zn-DTPA that has proven efficacy in animal studies. SRI identified promising enhancers by using their “IVto. PO Platform Technology” program to perform high-throughput solubility and intra-intestinal permeation screening. © 2016 SRI International

Case Study: FAST cell ™-CTC Technology Customized Liquid Biopsy 2 x 10 7 cells scanned in a minute FAST CTC Analysis HER 2 / CEP 17 Morphology/ Pathology Nano-PCR Peripheral blood from a cancer patient is collected for multiple endpoint analysis FAST cell ™ locates CTCs, enables precision analysis, pathological review & confirmation of CTCs – Staining for protein markers, FISH for genomic amplification and translocation – Sequencing, nano-PCR and expression analysis in development © 2016 SRI International

Proprietary FAST cell ™ Cytometer Automated Imaging at High Resolution Scanning laser spot focuses on top of transparent substrate FAST – Fiber Array Scanning Technology Substrate Motion Rotating Mirror FAST Light Collector Fiber Optic Bundle ADM Collimating, Bandpass, collection Filters/Lens Multiplex biomarker imaging Photomultiplier Tubes (PMT ) Laser speed = 10 m sec -1 ~ 1 cm 2 sec -1 F-Theta linearity ~ 0. 1% Spot size ~ 8 µ m Location accuracy = 40 µ m Scan Width = 76 mm CTC • Cytokeratin (Red)+ • DAPI (Blue)+ • CD 45 (Green)WBC • Cytokeratin (Red) • DAPI (Blue)+ • CD 45 (Green)+

Continuous Manufacturing in Pharmaceutical Research 1800 s – 1900 s 2000 s The Future Streamlining the small molecule drug discovery progress… …By creating an end to end automated chemical synthesis platform Synthetic Chemistry – Status Quo Batch process methodology hasn’t changed in two centuries © 2016 SRI International

Syn. Fini - Revolutionizing Drug Design/Manufacturing • Potential Economic Impact − − • Stage of Project − − • Save $Bs in drug discovery and development Reduce time from lab to market Decrease discovery synthesis time ~80% Decrease transfer to pilot scale time by ~85% Received SBT funding DARPA Make-It • Four year, multimillion dollar program Technology and know how proposed by SRI • Next Steps − − Engage one or more strategic partners Build industry consortium Revolutionizing drug manufacturing for increased efficiency and reduced costs.

Conclusion • Thoughts on Future Innovations in Bio. Pharma − Personalized Medicine − Prevention − Patient Centric − Access AND Affordability − Generics − Chronic Disease − Digital Pharma − Biosimilars Interface of traditional and emerging disciplines − • Pharmacoeconomics / Outcomes

working together on important problems to change the world… repeatedly www. sri. com Ted Ira Executive Director of Business Development, Global Partnerships ted. ira@sri. com +1 650. 208. 9316 39