Oxford Bioscience Partners New Licensing Deal Structures Strategies

Oxford Bioscience Partners New Licensing Deal Structures: Strategies And Tactics for Successful Business Development Dr B J Bormann, Vice President Strategic Alliances May 25, 2005

Then : most research conducted in-house u 1990’s: collaborations were not the “norm” in pharma “I’m amazed at the arrogance of some U. S. pharmaceutical companies like Merck and Pfizer who have hardly cut any deals with biotechnology companies. That’s a very strange decision. ” Tim Wilson, Analyst, UBS Securities, New York, Bio. World Today, August 1996

Adding value: the SA vision u Our alliance investments : l l l Are integrated and aligned with our global strategies, initiatives and internal investments Address opportunities and gaps to create competitive advantage Enable the low-cost evaluation of novel opportunities Provide access to novel technologies with the potential to change the current R&D paradigm Are managed with respect to the science, business, legal and IP issues Are assessed and monitored with appropriate metrics “Cradle to grave alliance management”

SA Portfolio – Aligned along 04/05 Strategic Themes Productivity 2005 Strategic Investment Themes CAN Producing Collaborations § Quorex § Vicuron § ISIS §Renovis TA Enablers §Oxford Biosensors §Perlegen §Bend §Chondrogene Emerging Sciences Leveraging Scale Recent Investments Cross-line investments Speed/Efficiency/ Process §Chromos §Sangamo §Virtual Scopics §Odyssey Thera §Activ. X §PA Consulting/Engineering §Codexis §Genestruct §Jubilant §Lifespan

SA Portfolio Mix Research Technology Line (STWGs) Automation Biologicals Imaging § Amersham § Life. Span § Scimagix § Synarc Ab platforms § Medarex § Abgenix § Morphosys § CAT Autom Chem § Argonaut § Accendo § Foster-Miller § Mettler-Toled § PA Engg § TAP Increase CIR/CIS § Biovation § Chondrogene Production/ Scale-up § BI § Cambrex Bio § GTC Therap § Lonza Delivery § Atrix § Macrocrystal § Transform Chemistry Parallel Chem § Accendo § Argonaut § Avantium § Ar. Qule § Chem. Bridge § Codexis § DPI § Metabolix § Tripos Separation Technology § U Ghent § Bio. Tage Str Elucidat/ Physical Prop. § Scimagix § Foster-Miller § AMRI In silico § Entelos § Bioprint/ Cerep CIR ADME § Xenoport CV/QT § Neurion § Yeragani Animal Mod Ge. MMs § Xenogen § Deltagen § gen. Oway § Lexicon § Mayo RNAi § Cold Spring Harbor Stem Cells § Stem Cell Sci Structural Bio § Affinium § Joslin Targets § Kinases Systems Bio Informatics § Bend § Pharmacopia CIS Gene. Tox § UCLA Immunotox § U Maryland § Immunotox § Biovation Metabonomics § Chenom. X § Bruker § Metabometri § Lipomics § Varian Pathology § Life. Span Toxicopanomics § Affymetrix § Gene Logic § LION § LHASA § HTG § Ciphergen § Cura. Gen TA Enablers PK-PD U Toronto U Colorado Flinders Originus Leiden Gen. Pharm Karolinska Biomarkers Diagnostics § Beacon Bio § Oxford § Amersham § Cog. State § Pharsight § Source Presicion § Immunicon § Neurosol Imaging § Virtual. Scop § MIICRO § Yale § Nat Ins Age § Kestrel § King’s College DDF SDD § Bend KM § Biowisdon § Genstruct § Pharma. Mat OCR § Andrx § Skye. Pharm Protein Del § Nektar § Atrix § Bend § Nobex Devices § Meridica § Injex § Aradigm Pulmonary § Meridica § Ventaira § Bend § Astechr § Nektar Many TWG & TA Enabler technology investments impact multiple TAs; hence TAs are not shown here PGX § Epidauras § Genaissance § Perlegen § Viro. Logic § Source precision

SA collaborations that have impacted CANs/Compounds/Programs Collaboration CLINICAL DISCOVERY PDM WWPS WWSS TAs/Programs/Targets Impacted § Duke Univ § NMDA Antagonist, NNOS Inhibitor § Virtual Scopics § OA, RA, Oncology; Imaging for clinical trials § Brains-on-Line § NRI/SRI programs; 5 HT 2 C, CB-1, D 3 targets § UCSD – Dr. Olefsky § PPAR alpha/gamma § Wake Forest Univ. § CETP; PDE(V); MTP; LDL-C reduction § Multi-cell Technology § NK-1 antagonist § Bend Research § Multiple § Meridica § A&R § QLT § Bone Regeneration § MPI Research § PPAR alpha/gamma

SA Impact on the PGRD pipeline Alliance Date ABGENIX Therapeutic Area/ Target 12/97 Imm/CTLA 4 Onc/CD 40 Onc/IGFR IBD RA Onc Hem/Onc Inflamm. LD POP CS LAN Pre - Clinical CAN Phase I IND 11/99 12/01 9/01 3/04 11/00 11/03 Phase IIa POC 12/04 12/03 6/05 9/05 9/06 OSIP 2/96 DELTANOID 12/02 NEUROGEN 11/95 12/91 JAPAN ENRG. 12/98 VICURON 3/99 Onc/VEGF Onc 6/03 CVMD Vit D Analogs 6/03 CNS/GABA 8/97 1/99 12/00 1/02 Anti-viral HIV Protease Anti-bacterial Multiple 4/04 11/00 6/04 10/05 12/04 1/01

Global Research and Development Major Alliance Partnerships: June 2005 Speeding/Enhancing Development Candidates Altering the R&D Productivity Paradigm Gene Function Affinium Athersys Celera Chondrogene Metabolex Karolinska U. Pittsburgh Wash. U Xenon Affymetrix Deltagen In. Pharmatica Xenogen Lexicon Gen Chondrogene Cerep Screen Biotrove C. A. T. Evotec Stem Cell Sci U. Dundee Xenoport Lilly Activ. X Sangamo Odyssey Th. Lead Abgenix Ar. Qule CB Research Chem. Bridge Chem. Rx Cerep Entelos Naeja Peakdale Mol Piedmont Spotfire Tripos Medarex Morphosys Quorex Isis Candidate Development Biotica Deltanoid Japan Energy Neurion Vicuron Wake Forest Virologic Rigel Nicox Angiosyn Idun Coley Renovis Amersham U. Cambridge Curagen Gene. Logic Lonza Miicro Meridica Kings Pain Ctr NIA Virtual Scopics Yale Symyx Boehringer Ingelheim Chromos Enhancing Pipeline Value Speed Avantium Foster Miller PA Auto/Eng U. Michigan Biowisdom Pro. Model Genestruct Codexis Perlegen Lifespan Product Enhancement Alza Atrix (QTL) Battelle Bend Nektar Freie Univ. U. Rochester Oxford Biosensors

Innovative Deal Structures? From the previous list, how many are truly innovative? It is all relative……… For most of us, not a lot of innovation For Pfizer, there are some remarkable degrees of freedom here Central element for Pfizer is not $$, but options and control

2005 Pharmaceutical Achievement Awards Finalist List Business Development Deal of the Year Astra Zeneca and Cambridge Antibody Technology Pfizer Inc and Medarex Theravance and Glaxo. Smith. Kline Dealmaking Theravance: Having Cake and Eating It

Innovative Deal Structures: On Horizon What can you expect to see from Pfizer: Acquisitions of small/medium companies Not just potential products, platform technologies too Perhaps with pre-arranged spin outs More ‘Horse-trading’ Cross-licenses Pooling programs Future calls on IP More Option Agreements E. g. support platform technology development now Option to take in house, option for compounds Advice: Think about what we can offer you other than $$