SOLVING THE GLOBAL MEDICAL CRISIS THROUGH SOCIAL FINANCING Rediscovery Research Social Impact Bonds First Friday Networking Group August 1, 2014 Dr. Bruce.

SOLVING THE GLOBAL MEDICAL CRISIS

THROUGH SOCIAL FINANCING

Rediscovery Research Social Impact Bonds

First Friday Networking GroupAugust 1, 2014

Dr. Bruce BloomPresident and Chief Science Officer

GLOBAL MEDICAL CRISIS

•7000 diseases worldwide with no currently effective therapy• Impacts 50,000,000+ people in developed countries with significant healthcare costs•New Discovery Research only creates about 30-40 new drugs per year•20% prescriptions off label

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PHARMA SOLUTION

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Current Solution

•250 large Pharma/1000 small•2500 Biotechs •2.3 M employees•$120B R&D •$1.4T in drug costs•1/10,000 success rate

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Rediscovery Research SOLUTION

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Rediscovery Research™Reusing available science and medicine to

quickly, safely and affordably create patient impact

Rediscovery Research Projects1. Take a single drug, nutriceutical or device

already approved for one disease and create a “repurposed” use in a second disease

2. Combine generic drugs with proprietary drugs to help the proprietary drug work for more patients for a longer period of time

3. Combine a generic drug with a non-drug treatment to improve patient outcomes

4. Add to or alter existing treatment protocols to improve patient outcomes

5. Test observations and other successes from clinical practice, including integrative medicine

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Why Rediscovery Research

•More affordable and safer research• $500K v $1.5B• 3 years v 15 years

•1000s of repurposing possibilities•Greater success• 1/10 v 1/10,000

•Faster from idea to patient use• Single clinical trial• Off label prescribing

•Treatments safe and easy to take

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Rediscovery Research SIB SOLUTION

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Why Rediscovery Research SIB•Provides Rediscovery Research with

economic incentives•Often significantly reduces healthcare costs for both patients and payers•Lower payments for government and other sponsored healthcare programs•Lower patient out-of-pocket expense• Improved patient outcomes

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Social Finance

Any financial investment method that

intentionally delivers both a

social dividend and an economic return.

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Type of Social Financing1. Social impact bonds

2. Community investing3. Microfinance4. Social enterprise lending and5. Outcome-based philanthropic

grant making6. Program-related investments7. Venture philanthropy

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Social Finance Opportunities

•Better health•Lower healthcare costs•Reduced recidivism•Reduction in homelessness• Increase in educational levels•Non-violent resolution of gang disagreements•Less drug use among teenagers

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Why Social Finance?

1. For-profit or non-profit organizations are not creating enough social return using the capitalism or philanthropy models, and

2. The government is not able or willing to raise the taxpayer funds to create the social impact or has been unable to create the social return through existing programs

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The Social Impact Bond

A Social Impact Bond (SIB) is an arrangement between one or

more “pay for success” guarantors

and an external organization, called a Social Impact Bonding

Organization (SIBO).

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The Social Impact Bond

The “pay for success” guarantor specifies a social

outcome/social return it desires and promises to pay the SIBO a pre-agreed sum if the SIBO is able to accomplish the social

outcome/social return.

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The Social Impact Bond

The SIBO then solicits private investors to provide the

necessary upfront capital to the SIBO so that the SIBO can select

and pay service providers to perform the required services to

achieve the social outcome.

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The Social Impact Bond

The investors agree to provide this funding in exchange for a

potential share of the government payments, if and when the social

outcome/social return performance targets are met.

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Social Impact Bond Benefits

•Attract new forms of capital •Gov’t only pays for effective services•Shift $ risks from gov’t to investors• Incentive for service provider to be effective •Opportunity for greater and more vigorous ongoing evaluation • Independent evaluation creates transparency

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Social Finance OpportunitiesIn Rediscovery Research • Pay for Success Guarantors• Government Payers-Medicare, Medicaid, VA, Exchanges• Private Insurance Payers• Self-Insureds-Corporations, Pension plans• Hospitals• NPO Funders• SIBOs • Cures Within Reach • Social Finance US• Instiglio• McKinsey

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Social Finance OpportunitiesIn Rediscovery Research •Service Providers• Academic medical centers• Biotech• Pharma• Investors• Could be PFC Guarantors• JP Morgan• D Capital• Third Sector Capital Partners• Finance For Good

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Social Impact Bond

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Investors

Cures Within Reach

Gov’t or other payer

Repurposing Clinical Trials

Repurposing Clinical Trials

Repurposing Clinical Trials

Improved lives Lower costs

Social Impact Bond Pays

Investors provide Rediscovery

Research funding

Investors receivereturn

CWR finds and

manages Rediscovery

Research Cost savings meets payer’s goals

Investors fund more Rediscovery Research

ROI from Rediscovery Research Cost Savings

Autoimmune Lymphoproliferative Syndrome -CWR researcher repurposes the drug sirolimus -Alleviates symptoms of fatal disease <60 days-Research cost <$250,000, takes < 3 years-New treatment saves $100K/patient/year-600 patients could be using this off-label-Up to $60M in annual healthcare cost savings

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Generic vs. Proprietary Example

• Generic Drug Repurposing-Nutriceuticals for Familial Dysautonomia- 6 years of research cost $1.2M- 5 daily oral nutriceutical treatments costing

<$200/month- $60,000 average cost SAVINGS/patient/year

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• Proprietary Drug Creation-Enzyme Replacement for Gaucher’s Disease- 10+ years of research, much of it funded by the US

government, cost >$100 M- IV admin 2 hrs every 2 weeks costing $300,000/year- $250,000 average cost INCREASE/patient/year

Generic Drug Rediscovery Research

SIB Calculator

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Current Development of Rediscovery Research SIB

•Early discussions with US VA•Early discussion with hospitals•Discussions with British gov’t•Discussions with Israeli gov’t•Discussion with Social Finance US•Forming RRSIB Advisory Board

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Questions & Answers

Contact:Dr. Bruce E. Bloom

[email protected]

gwww.cureswithinreach.org

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