VDDI Pharmaceuticals Rapidly developing novel drugs for cardiovascular

VDDI Pharmaceuticals “Rapidly developing novel drugs for cardiovascular and infectious diseases” William Porter Senior Vice President Business Development, Asia-Pacific VDDI Pharmaceuticals Inc. Brentwood, TN USA June 2003 Bangkok, Thailand email: virtual@loxinfo. co. th June 2003 + 661 802 -9244 (cell) www. virtualdrugdevelopment. com VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 1

The material and comments in this presentation is confidential, proprietary and privileged, including copyright. Statements made in this presentation are based on information available to VDDI, and are presented in the good faith belief as to their accuracy, but VDDI does not warrant their accuracy. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 2

VDDI Virtual Drug Development Incorporated June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 3

Chesapeake Business Center Suite # 106 1616 Westgate Circle Brentwood, TN 370278019 Ann Arbor, MI; Kalamazoo, MI; Huntsville, AL; RTP, NC; Bangkok, Thailand; Dublin, IR June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 4

Agenda n n n Remarks and Assumptions Business Model Company Overview Products in Development • Medical Peptides • NADs Inhibitors • GP IIb/IIIa Inhibitor Next Steps Closing Comments June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 5

The Codes for Global Success… A T C G Adenine A Thymine T Cytosine C Guanine G 010101010 June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 6

VDDI’s Global Goal To increase knowledge and commercial value in novel drug development for life-threatening indications in the areas of cardiovascular and infectious diseases by: Using the in-licensing model to fill gaps n Increasing the depth in our portfolio n Out-licensing to maximize the value of investments n June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 7

A Knowledge-driven Global Economy Pharmaceutical companies – playing the role of change agents -- must prepare for the future and adopt and support technology – biopharmaceuticals, ICT and nanotechnology. They must see themselves as active partners, rather than passive benefactors, with the stakeholders they support. If they don’t, they will get a lot poorer. * * Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington University, Washington, DC June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 8

A 21 st Century Approach VDDI’s focus is in targeted drugs (cardiovascular and infectious disease) with effective treatments aimed at smaller sets of patients. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 9

The Global Reality for Biopharmaceutical Companies June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 10

Global Biopharmaceutical Pains n n n n Expiring drug patents Skyrocketing costs High rate of clinical failures Corruption/price-gouging Product recalls Litigation (USA & Europe) Marketing scandals June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 11

The Economic Realities n n Industry losing control of pricing Generic drugs Third-party payers – governments & managed care – are demanding more value with less expenditures A trend emerging to shift a fraction of drug cost to patients (USA) which, generates a political will to confront local/national lobby June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 12

This Decade – 2002 -2007… Patents will expire on 35 drugs with global sales of more than $73 billion. But… n Only 14 potential blockerbusters are likely to be approved and launched during this period. n Source: Datamonitor, London & Fortune Biotech, David Stipp, May 27, 2003 June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 13

Big Pharma’s Efforts to Date Have Been in Vain n Tried substituting marketing muscle for scientific success • $1 billion to create “direct-to-consumer” ads (US) • Other dubious ploys to bolster sales n Mergers & cost-cutting • Temporary boost profits but doesn't address the underlying problem: productivity. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 14

VDDI Adopts an Effective Drug Development Paradigm VDDI and a few others in the industry are blazing a new path out of this mess by utilizing a different strategy –business model. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 15

Adopt or Die June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 16

The “Bottom-up” System A "bottom-up" entrepreneurial system exhibits many of the characteristics associated with organic life: • Organic systems provide large numbers of small, redundant units to ensure the survival of the larger whole. • An organic business model allows companies the freedom to innovate, while competitive forces select the most successful ideas for development & commercialization of biopharmaceutical products. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 17

Contrasting Management Systems 1 Structure Industrial Age Hierarchy Culture Conflict Mission Profit Biotech/ICT Age Internal Enterprise Stakeholder Collaboration Profit, but also science & society 1 Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington University, Washington, DC June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 18

Our Business Model n In-license and develop pharmaceuticals for life threatening indications : n Cardiovascular n Infectious diseases n Out-license to marketing partners n Strategic alliances (integrating regulatory, clinical & marketing issues. ) n Establish interdisciplinary teams to seek out and help build valuable business propositions. • Understand how research gets commercialized June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 19

Business Model n (cont’d) Adopting this business model allows VDDI to: • Put more resources into things that add value, and • Better manage risk associated with biopharmaceutical development June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 20

Company Overview • Founded September 1999 • Headquartered Brentwood, TN USA: support offices in Ann Arbor, Bangkok, Dublin, CT, and FL (administrative & scientific) • Experienced Management Team • Represents the entrepreneurial model to drive success • Aggressive in-licensing and outsourcing model • Values new approaches and collaborations June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 21

Overview n n n n (cont’d) Company: VDDI Pharmaceuticals Products: Antibiotics, Medical Peptides, Cardiovascular Markets: Global Customers (current): Regulatory agencies & U. S. Government Capital Requirements: $5 M Business Model: In licensing, technology partnerships, and outsourcing model Exit: Marketing Partners, IPO (Q 4, 2004) June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 22

Management n R. Stephen Porter, Pharm D, Chairman, CEO and President • Therapeutic Antibodies; American Cyanamid n Steve Sensoli, MBA, Chief Business Officer • Gene. Works, GLY DERM, Leeco Diagnostics Inc n Mark Fisher, Ph. D. - VP Manufacturing • Smith. Kline; Johnson and Johnson; FDA consultant n Kristen Flaharty, Pharm D. - Sr. VP Regulatory Affairs • Smith. Kline, KKF Consulting, 10 NDA’s n John Ferkany, Ph. D - VP Preclinical Development • Oread, Oceanix, Nova June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 23

Scientific Advisory Board Cardiovascular n Desmond Fitzgerald, Ph. D, MB, BAO, BCH • Royal College of Surgeons, Dept of Clinical Pharmacology; Adjunct Prof. Of Medicine Univ. of Pennsylvania n James Tcheng, MD • Associate Professor of Medicine - Duke Clinical Research Institute & University Health System • Practicing Cardiologist; over 2500 angioplasties June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 24

Scientific Advisory Board Regulatory Affairs n n Raymond Lipicky, MD. • Former Head of US Food and Drug Administration Cardio-Renal Drugs Division Joyce Cavagnaro, Ph. D. • Bio. Access LLC n Former VP Human Genome Sciences June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 25

VDDI’s IP Portfolio VDDI focuses on: n Intellectual Propperty (IP) where general proof-of-principle has already been established, and n IP’s that are novel or dominant. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 26

Strategic Advantages n High Quality, Fast Track Development • Lean Operation • Innovation • “Best of Breed” global partners/collaborators • Pharmacology expertise • Building a Global KM (knowledge management) model for Clinical, Regulatory, and Product Development Expertise n Narrow Indication: Broad Application Compounds • Seek fast track approval June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 27

Innovation-based VDDI is in the innovation–based biopharmaceutical business. Our success (as well as our partners) involves cultivating a small number of skilled scientists, business executives, and organizations and managing these ongoing networks of biopharmaceutical partners to achieve a “win-win” situation. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 28

Revenue Model n Out-licensing Agreements: • Up-front payments • Milestone Payments • Royalties • Grants n Strategic partnership payments June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 29

But remember… n Profitability comes down to: • Good science • Quality high-impact decisions • Good risk management Because. . “Ultimately the value of a drug comes down to the degree of patient benefit it offers – not the number of people it’s prescribed for. ” Arthur Levinson, CEO, Genentech June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 30

Medical Peptides June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 31

Medical Peptides Pharmaceuticals n n n Exclusive license for all medical indications $31 B Antibiotic space using peptides effectively Technology produces STABILITY and extended DURATION in the peptides June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 32

Medical Peptides n n n Amphibian derived (Ulster): Anti-fungal, Antimicrobial Combi-Chem (Queens): Sortase Inhibitors, Biofilm Inhibitors (Gm-) Inter. Link Technology produces STABILITY and extended DURATION in the peptides (REV 4) June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 33

Medical Peptide Summary n n n Amphibiotic collaboration provides huge library of novel compounds with massive diversity Reverse magainins, indolicidins and cecropins of particular interest Reversal of improved peptides; reduce hemolytic potential and protease degradation • Increases duration of action, lowers Cost of Goods n In animal trials June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 34

NADs June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 35

NADs Technology n n n Nicotinamide Adenine Dinucleotide synthetase (NADs) inhibitors Enzyme that plays an essential role in oxidation-reduction reactions in bacteria NADs inhibitor can stop growth and be used as a prophylaxis against infection June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 36

NADs Compounds…promising indications n n Prohibit hospital-based gram positive infections Refractory or resistant hospital acquired fungal infections Crop protection – antibiotic fungicides can improve crop yields and quality Threats from Bioterrorism June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 37

NADs Technology n n Novel class of small molecules, simple 4 step synthesis = “low cost of goods” Fast Track, Orphan designation, & nontraditional accelerated development (US FDA) n n Narrow indication/broad application Segmented biologic spectrum (Gram +) of activity Three distinct and large market potentials Intellectual property secure June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 38

Ongoing Activities n n n n Serum stability Protein binding Mammalian cell cytotoxicity Metabolic stability Preliminary rodent PK Gram quantity synthesis Iterative chemistry optimization June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 39

Cardiovascular June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 40

A Global Problem and Costs n n n CVD is the world’s leading cause of death – CVD is truly a global problem. CVD accounts for 20 -50% of all deaths in most countries. Total estimated sales of CVD drugs in the world’s 12 largest markets : $40 billion (IMS Health, 1998) It is estimated that direct and indirect costs to treat CVD will total $118. 2 billion (USA). Nearly 70 percent of all patients who suffer a coronary event will fail medical therapy and require revascularization procedures in order to survive. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 41

Current Lead Product n Phase III cardiovascular drug • Pharmacia donation to Western Michigan University with exclusive license for a GP IIb/IIIa antagonist • Controlling thrombotic events – “PCTR” (percutaneous transluminal coronary revascularization. ) or percutaneous coronary intervention (PCI) • Development program to be completed and Product to Market ► in 2 -3 years June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 42

Cardiovascular Product…. The Market n n n Annual worldwide market for product is estimated to exceed $ 1 billion Worldwide license for the technology with estate of 161 patents (99 issued- 19 US) Acute Coronary Syndromes (ACSs)-- research data indicates that oral GP IIb/IIIa inhibitor therapy merits a prominent role in the initial management of patients with ACSs. n n June 2003 coronary stent and angioplasty VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 43

Next Steps…. n n Establish a presence through collaboration and marketing partners in Asia-Pacific. Start funneling technology into strategic partnerships, while keeping intellectual property and value they create. Find a smart way to get Asia-Pacific’s smart money and people involved. Establish global collaborative research to create sustainable value and pipelines. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 44

Summary of VDDI’s Profile June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 45

VDDI believes in Collaborative Partnerships because: through this diverse blend of global working relationships, the interests of all stakeholders are enhanced and risks are better managed. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 46

VDDI’s Culture For VDDI to be successful in its global ventures it will always: • emphasize the value of its science and technology, • the importance of its research & management personnel, and • its ultimate goal of contributing to medicine and human well-being. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 47

Belief in Convergence & Acceleration… VDDI armed with a newly emerging paradigm that recognizes the creativity of self-organizing systems focused & supported in a collaborative scientific & business community, this new drug development strategy for will lead the company into an era of unprecedented economic growth. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 48

The Future… belongs to companies who “…build empires of the mind. ” (paraphrased: a Winston Churchill quote) June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 49

“As the Future Catches You”… 1 VDDI believes… • That as new disciplines and technologies emerge… • You don’t win the game just producing a lot of knowledge… • You also have to protect it… • And apply it! 1 Book title: Juan Enriquez, As the Future Catches You; © 2000, 2001, Crown Business, New York, NY June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 50

The 21 st Century Scenario As traditional Big Pharma’s structural and resource advantages decay and more products and services enter the global competitive arena, strategies and collaborations formed around knowledge can change the game and open up new paths of profitability. June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 51

A Final Thought… “The great thing in this world is not so much where we stand, as in what direction we are moving. ” 1 Oliver Wendell Holmes, Chief Justice, US Supreme Court 1 Juan Enriquez, As the Future Catches You; © 2000, 2001; Crown Business, New York, NY; p 184 June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 52

“Rapidly developing novel drugs for Cardiovascular and Infectious diseases” June 2003 VDDI Pharmaceuticals (Asia Pacific) CONFIDENTIAL 53