Business Development And Its Information Needs JJ Owen, AVEO Pharmaceuticals Bob Bennett, Merrimack Pharmaceuticals March 2007.

Business Development And Its Information Needs

JJ Owen, AVEO PharmaceuticalsBob Bennett, Merrimack Pharmaceuticals

March 2007

Agenda

Introduction – Our Background

Business DevelopmentWho and What do they do?

Case Study: In-licensingOutputs and Sources

Creating Value: Beyond the Sources

Our Background

JJ Owen Bob Bennett

Years in Industry 7 9

Education Ph.D. Biology M.S. ChemistryM.B.A.

Work Experience Cell BiologistProteome/IncyteKnowledge MgmtSci & Comp AnalysisBus Dev

Organic ChemistSci & Comp AnalysisBus Dev

Company AVEO Pharmaceuticals Merrimack Pharmaceuticals

Position Business Development Business Development

Size of Company 80 60

Size of Bus Dev 3 3

Who is Business Development?

Small organization

Mostly MBA trained (some with science

backgrounds)

Typically marketing or finance backgrounds

Prior background - consultants

Intimately aware of several data sources

Unaware of a large majority

Time crunched deadlines is the norm

Attention span of a gnat

Job focus & data source needs constantly changing

Business Development – What do they do?

Traditional activities Non-traditional activities

Mergers &Acquisitions

Licensing Activity Competiti

ve Landscape

Financials

Market Analysi

s

Deal Negotiatio

n

Public Relation

s

Technical

WritingCompetitiv

e Intelligenc

e Project Manageme

nt

Case Study – In-licensing

In-licensing has been described as…

…Finding a needle in a haystack

In-licensing: Process Flow

Tracking database

Finding Leads

Conferences

Connections

Secondary Sources

Primary Sources

Target Sweeps

Making the Case

Company Profiles

Key Personnel

Pipeline snapshot

Financials

Deals

Competitor Pipelines

Clinical Trial Data

Commercial Profile

Market Data

Pursue Opportunity

Case Study – In-licensingFinding Leads

Finding Leads

Attend conferencesAACR, ASCO, CHI, SRI, EORTC, many, many others

ConnectionsWho do you know?

Secondary SourcesThomson Pharma, BioCentury, BioWorld, NewsFeeds,

WWW

Primary SourcesInvestors, SAB, BOD, Consultants

Target Sweeps

Company Drug Highest Dev. Status

ASTA Medica AG  perifosine   Phase 2 Clinical

Novartis AEE-788   Phase 1 Clinical

Rexahn RX-0201   Phase 1 Clinical

Abbott Laboratories  AKT kinase inhibitors, Abbott   Discovery

AEterna Zentaris Inc  erucylphosphocholine   Discovery

Amphora Discovery Akt1 inhibitors, Amphora   Discovery

Berlex Biosciences  BX-424   Discovery

Bristol-Myers Squibb BMS-536924   Discovery

Cellular Genomics Akt-1 inhibitors, Cellular Genomics   Discovery

Consensus Pharmaceuticals anticancer agents, Consensus   Discovery

Institute of Cancer Research UK  PKB inhibitors, Astex/ ICR/ Cancer Research UK   Discovery

Kinetek Pharmaceuticals protein kinase B (PKB/Akt) inhibitors, Kinetek   Discovery

Merck Akt protein kinase inhibitors, Merck & Co   Discovery

National Cancer Institute  azoacridone anticancer agents, NCI   Discovery

National Cancer Institute  EM-12   Discovery

National Cancer Institute  RTA-502   Discovery

NeoGenesis Pharmaceuticals Akt-1 inhibitors (cancer), NeoGenesis   Discovery

Nerviano Medical Sciences Akt kinase inhibitors (cancer), Nerviano   Discovery

SourcesThomson Pharma, Company Websites, Newsfeeds

Akt inhibitors

Case Study – In-licensingMaking the Case

Company Profiles - MGI Pharma

Drug Indications Stage

Aloxi Chemo-induced Nausea and vomiting Marketed

Salagen Dry mouth Marketed

Hexalen Ovarian Marketed

Dacogen MDS, Leukemia, Solid Tumors Registration

Irofulven Ovarian, Liver, Prostate, Pancreatic Phase 2

Saforis Mucositis Phase 3

ZYC101A Cervical dysplasia Phase 2/3

ZYC300 Cancer cells expressing CYP1B1 protein Phase 1/2

MG98 MDS, AML Phase 1

Overview• Headquarters: Bloomington, MN, Lexington, MA (MGI

Biologics)• Therapeutic Focus: Entities (small molecule or Biologics)

for cancer treatment and supportive care• Technology: BIOTOPE (targeted plasmid system) and

GENCAP (DNA protection)• Strategy: Acquisition of clinical stage development

compounds• Investors: Publicly traded on NASDAQ (MOGN)• Cash Position: $205.5M• Market Cap: $1.65 B ($1.65 B Enterprise Value)• Employees: 282

Recent News4/05: MGI PHARMA Reports First Quarter Results1/05: Dacogen NDA filing for MDS accepted by FDA 12/04: Dacogen P3 trial results in MDS reported at ASH10/04: Dacogen MAA filing for MDS accepted by EMEA 9/04: Begins promotion of Kadian to oncologists 9/04: Acquires WW marketing rights for Dacogen from

SuperGen9/04: Acquires Zycos for $50 M in cash9/04: Acquires Aesgen for $90 M in cash7/04: Kadian marketing agreement for oncology market with

Alpharma

Pipeline

--Aloxi (licensed NA rights from Helsinn SA)--Salagen (retains NA marketing rights)--Hexalen (retains WW rights)--Dacogen (Decitabine) (acquired WW rights from SuperGen)

•Small molecule, DNA methyltransferase inhibitor•P3 mono, MDS, 170 pts: RR 17% vs. 0% for supportive care

•P2 mono, Gleevec ref. CML, 27 pts: 17 hema. response --Irofulven (retains WW rights)

•Small molecule acylfulvene, breaks DNA strands•P2 mono, rel/ref Ovarian, 55 pts: 1 CR, 9 PR•P3 mono, ref Pancreatic: OS inferior to 5-FU•P2 with ERCC3 gene deficient pts underway•P2 mono, liver, 48 pts: 2 PR, 18 SD

--Saforis (retains WW rights), Phase III, mucositis--ZYC101a (acquired in purchase of ZYCOS )

•Antibody, completed Phase II, 161 pts, RR 43% vs. 27%, drug was well tolerated

--ZYC300 (acquired in purchase of ZYCOS)•Antibody, completed Phase I/II, 17 pts, ASCO 2003, drug was well tolerated and biologically active

--MG98 (licensed NA rights from Methylgene)•Antisense oligonucleotide, inhibits DNA methyltransferase-1

•P2 RCC, IFN combo: Initiated 10/04

Partnering Rationale

•Potential collaboration partner with our discovery platform and their therapeutic Antibody program•Aggressive late stage up and coming Oncology development company with cash and solid market cap

Sources--Thomson Pharma, Recap, Company website, Yahoo Finance, SEC

MGI Pharma

Key Officers

Leon O. Moulder, President and CEO

Prev at Eligix, Inc., Hoechst Marion Roussel (now Aventis), Marion Laboratories, and Marion Merrell Dow.

James C. Hawley, SVP, CFO Recently joined MGI Pharma, Prev. CFO and corporate secretary at CIMA LABS, principal with Manchester Companies, Inc., and Orthomet

Michael T. Cullen, CMO Prev at Searle/Pharmacia

Martin J. Duvall, SVP, Commercial Operations

Prev 18 yrs at Aventis

Mary Lynne Hedley, SVP, MGI Pharma Biologics

Cofounder of ZYCOS, Inc. and most recently served as president and chief executive officer

Personnel FinancialsIncome Statement (12/31/2004)Revenues $195.7 MCOGS 60.0 MR&D Expense 62.6 MSG&A Expense 73.8 M Acq. R&D Expense 83.1 MOperating Income (84.7 M)Interest Income 5.3 MInterest Expense (6.0 M) EBT (85.4 M)

Balance Sheet (12/31/04)Assets:Cash and Equivalents 205.5 MAccounts Receivable 122.3 MInventories 8.4 MOther Current Assets 5.8 MLT Investments 75.4 MProperty, Plant and Equipment 2.7 MIntangible Assets 8.0 MTotal Assets 436.3 M

Liabilities:Current Liabilities 58.8 MLong Term Debt 260.2 MOther Liabilities 2.8 MTotal Liabilities 321.8 MShareholders Equity:Net Shareholders Equity 114.5 MTotal Liabilities and SH Equity 436.3 M

Board of Directors

Andrew J. Ferrara President and CEO of Boston Healthcare, managing partner of Boston BioLicensing, L.L.C.

Gilla Kaplan Current head of the Laboratory of Mycobacterial Immunity and Pathogenesis, The Public Health Research Institute, Newark, NJ.

Edward W. Mehrer CFO of CyDex, a drug delivery company. Board member and audit committee chair of Novastar Financial

Hugh E. Miller Chairman, retired from ICI after a 22-year career

Lonnie Moulder See profile above

Lee Schroeder President and director of Lee Schroeder & Associates, Inc.

David B. Sharrock Director of Interneuron Pharmaceuticals Inc., Praecis Pharmaceuticals, Incara, Broadway, and The Ohio State University Foundation

Waneta C. Tuttle CEO, Southwest Medical Ventures, and CEO, Exagen Diagnostics, Inc.

Arthur L. Weaver Leading rheumatologist, serves as medical director of Arthritis Center of Nebraska

MGI Pharma

Deals

9/04: Acquires privately held Zycos for $50 M in cash•Acquires expertise in immunology and development of biologics•See Pipeline for clinical data

9/04: Acquires privately held Aesgen for $32 M in cash •Pays $32 M upfront, milestones of $33 M for approval and $25 M if annual sales exceed $50 M plus royalty of 5%

•Acquires Saforis, a P3 compound for oral mucositis9/04: Licenses WW rights to Dacogen from SuperGen

•P3 completed in MDS with an NDA expected 4Q04•Possible expansion into AML, CLL and solid tumor •Pays $40 M equity investment, up to $45 M in milestones, at least $15 M in development costs and royalty from 20-30%

7/04: Kadian marketing agreement with Alpharma•Kadian is a sustained release morphine marketed for pain relief•3 yr agreement for MGI to market Kadian to oncologists•Undisclosed profit sharing agreement

4/01: Licenses NA commercialization rights for Aloxi from Helsinn•Aloxi is a P3 product for chemotherapy induced nausea and vomiting•Pays $11 M upfront, undisclosed milestones and royalties•Helsinn funds development and responsible for manufacturing•4/03: Collaboration expanded to include post-operative nausea and vomiting indication and an oral formulation

•Pays $22.5 M upfront and up to $25 M in milestones1/01: US marketing rights for Mylocel from Barr Labs

•Mylocel (hydroxyurea) marketed for melanoma, CML and ovarian cancer•Barr receives undisclosed royalties

Competitive Landscape: Late Stage Breast Cancer Targeted Therapies

Drug MOA Current Phase

Latest Breast Cancer Trial Data Expected Filing Date

Lapatinib (GW2016)

Inhibits EGFR and Her2

Phase III Phase III combination trials, Lapatinib with:• Capcitebine, first line metastatic, on-going• Paclitaxel, first line metastatic, on-going• Letrozole , first line metastatic, hormone eligible patients, on-going, interim analysis – 35% RR

Late 2006

Early 2007

Avastin VEGF inhibitor Phase III Phase III trial for an Avastin-Capcitebine combination failed to meet primary endpoint

Phase III trial in comb w Paclitaxel, 700 pts, first line metastatic, 28% RR vs 14%, PFS 10.9 mo vs. 6.11 mo

Late 2006

Early 2007

ABX-EGFR Her2 antibody Phase II Phase II trials in solid tumors indicates solid data in several tumor types. Amgen/Abgenix appears to be targeting Colorectal cancer

Not applicable

Omnitarg (pertuzumab)

Her2 antibody Phase II Interim data from ASCO, open-label randomized trial, 79 patients, 2 cohorts, 2 PR, 32 SD

Not Applicable

Sources--Thomson Pharma--Clinicaltrials.gov, ASCO abstracts, DataMonitor

Market Analysis: Breast Cancer Epidemiology and Current Treatment Paradigm, 2004

Incidence Prevalence Mortality 1 yr survival 5 yr survival

412,894 2,714,400 121,197 97.5% 86.5%

Current Treatment Paradigm

Early Stage Late Stage

Surgery

Adjuvant Therapy*

Hormonal Therapy Chemotherapy

Tamoxifen AC (doxorubicin + cyclophosphamide)

Arimidex CMF (cyclophosphamide + methotrexate + fluoracil)

*depends on hormone receptor and menopausal status

Options dependent on status

Chemotherapy -Paclitaxel and Docetaxel

Hormonal Therapy-Tamoxifen or Arimidex

Targeted Therapy-Herceptin (Her2+ only, 25% of

patients)

Sources--DataMonitor, WWW, GloboCan, American Cancer society, NCI

Business Development Sources

Extremely limited resources, always looking for the

best “bang for your buck”

Choice of source is critical when one has money

Public sources, public sources, public sources

Current GapsSales projections

Analyst reports

Clinical trial data

Deal details

I Know How To Search For Information!

Of Course, You Know Better

Perception vs. Reality

Does Information Flow Freely?

Demand Supply

How Is Information & Analysis Delivered In Your Organization?

NewslettersLiterature AlertsConference ReportsInteractions with individualsMembership on project teams

On-line requestsJournal subscriptions Department webpage

Provide access to databases

Value Is Created In Each Step Of The Process

Greater breadth of information sourcesAccess

Timeliness

SubjectKnowledge

Delivery

Rapid access to information through knowledge, effective searching, and alerts

Cut through the noise, recognize critical info, provide analysis, deliver exec summaries

Multitude of delivery mechanismsReduce time to customer

How Would An Information Professional Assist Bus Dev?

Added Knowledge

Sources, limitations, and effective use

Focused Data

Quality, accuracy, completeness, analysis

Efficient Use Of Time

Division of labor

Assist In Budgeting

Able to forecast information needs as company matures

JJ Owen:AVEO Pharmaceuticals

[email protected] 617.299.5889

Bob Bennett:Merrimack [email protected]

617.441.1008

Thank you