1. AdvancingPersonalized Medicineone cancer patient ata time.James Lim, Ph.D., Nelson Chan, Ph.D., Dale Fedun, Brian FethMentor: John Feilders (CMEA Capital)Lawrence Berkeley National LaboratoryUniversity of California, Berkeley Haas School of Business *73 interviews 1

2. Team of scientists and MBA studentsJames Lim, PhDScientistExperience: Seven years of cancer cell microscopyExpertise: Live-cell microscopy and cancer cell biology Dale NelsonJames BrianNelson Chan, PhDScientistExperience: Seven years of cancer researchExpertise: Biochemical and toxicological analysis mediating cancer cell deathBrian FethMBAExperience: Five years in life sciences business strategy consulting and private equityExpertise: Business model development and project managementDale FedunMBAExperience: Twelve years in creating and managing business IT programsExpertise: Business model and IT system development2 2 3. Circulating Tumor Cells (CTCs): Initial Idea Circulating tumor cellsOncologists & PathologistsCancer cells that haveDoes my patient have anydetached from the CTCs?tumor and are How aggressive are they?circulating in the bloodstreamCapture and grow CTCs Video technology to characterize aggressiveness3 3 4. Testing our initial hypotheses: Focus oncustomer segments and value propositions Diagnosis/ Direct salesAdvocacy GroupsConsultation Prognosis: ConferencesCliniciansRegulatory Cell- Cell validationMD office AdvertsOncologistsAgency Characterization Patient mgmt Publications PathologistsOncologistsDatabase building Drug selection PatientPatientsPhysicians Assoc Disposaladvertisements R&D Minimally invasive Low cost Specific IPFast Patient DatabaseHospital MD office, HMO Advocacy Groups PharmaVariable: Media, plastic ware, personnel, computing Service per time point (service/use)storage, building space Kits / Reagents (patients only)Fixed: Centrifuge, microscopes, freezers, incubators,and hoods4 4 5. Get out of the Building! Talked to customers andpartners to test our hypotheses Visited local hospitals andclinics Called nurses and patients toget perspectives Spoke with physician andpatient advocacy groups Hit the rolodex, plan interviewsfar in advance, daisy-chain tonew contacts55 6. Key people we spoke to: Dr. Leisha Emens Dr. John Siebel Dr. Ana Aguilar Dr. Scott North Dr. George Sledge Dr. Alan Venook Dr. Peter Eisenberg Dr. Cassandra Lee Dr. Balaram Puligandla Dr. Ken Pritzker (CEO) Dr. Doug Tkachuk (CMO) Dr. Scott Minick (CEO)66 7. Determining our customers OncologistPathologist Patient managementSample management Oncologists decide Pathologists perform in-what tests to order, house tests andwhen, and how oftenfacilitate contracts with service providers Primary customer Less important 7 7 8. Key messages from Oncologists:Dr. Siebel Culturing a patients CTCs to test efficacy of therapies would be valuable, if you could prove in vitro results are replicated in vivo.Dr. Sledge Dont give us more data. Tell us which drug to use for each patient.Dr. North Definitively knowing if a patient should get chemo would be a major breakthrough in oncology.88 9. What we learned from similar companies: RNA DiagnosticsThe space is crowded; there are many start-ups enumerating CTCsLifeLabs The clinical setting is difficult and can take years to get to market Bind BiosciencesCTC enumeration is not as useful and provides a limitedsample. Your approach is unique and overcomes keylimitations. 9 9 10. The value proposition epiphany: CanScan is a cell culture company!1010 11. We are unique in our ability to culture CTCsTechnology Capability Company ProductTechnologyChannelIsolateCount AnalyzeCulture ParsortixFilter Kits CellSearch Antibody Kits Vita-AssaysSubstrate Kits Mvs360 Antibody Device OncoCEEMicrofluidics CLIA labs LiquidBiopsy Antibody CLIA labs ISET deviceFilter Device On-Q-ITY chipMicrofluidics Device ApoStreamTM TechnologyMicrofluidics Device -Substrate CLIA? *This is an abbreviated list 1111 Class 8 - Update 3.19.2012 12. Cell culture value propositionIdentify andenumerate CTCsCharacterizegrowth potential CultureTestChemotherapiesCTCs Test CTCs forbiomarkers 12 12 13. Updated business canvas Consultation CharacterizationProvide new dataDirect salesAdvocacy Groups Database building to improveConferencesRegulatory R&D treatment MD office AdvertsAgencyOncologists decisions PublicationsOncologistsTreatment PatientPhysicians Assoc determination in advertisements vitroPharmaceuticalResearchers IP Patient Database Hospital MD CLIA certification office, HMOAdvocacy GroupsPharmaVariable: Media, plastic ware, personnel, computingService per time point (service/use)storage, building spaceKits / Reagents (patients only)Fixed: Centrifuge, microscopes, freezers, incubators,and hoods 1313 14. Alternative market model Urged by the teaching team toPrivate CMSpayer/MACexplore alternative marketsHospital / Clinic Interviewed clinical research Lab AdvisoryCommi eeOncologists ASCO / organizations, pharma/biotech,NCCN and academicsCanScanInfluencePaymentSets rate1414 15. Alternative market model Urged by the teaching team toexplore alternative markets Interviewed clinical researchorganization, pharma/biotech,and academics 1515 16. Partnering with Quest Diagnostics Covers 130 countries 2000 sites in the US 1616 17. Partnering with Quest Diagnostics1717 18. Partnering with Quest Diagnostics1818 19. Key people we spoke to: Dr. Ming Tong Dr. Brian Edmunds Dr. Philip Tagari Dr. Thomas Fare Dr. Sal Russelo Dr. Steve Labkoff Dr. Lisa Hewitt Dr. Zemin Zhang Dr. John Sninsky Dr. Scott Patterson Dr. Lawrence LaPointe Dr. Slyvie Sakata19 20. New opportunity: Pharmaceutical drug testingA better human-like in vitro modelsfor high throughput screeningHead Research DevelopmentAmgenThis would be a powerful platform to test personalized drugsVP Business DevelopmentTesting drug on circulating cancer cells Merckcould offer us better end-points toevaluate drug candidate effectivenessHead Research Development Come work with us, we will beAbbott Laboratories your first customer!CEO Clinical Genomics 20 20 21. Pharmaceutical customerLow Barrier to EntryQuick Revenue 21 21 22. Current business canvas Cell charact. Database dev. Provide new data PersonalStr. Alliances: Product/IP Devto improve assistance,local hospitals - Treatment sel.treatmentAutomatedMarin GenOncologists In vitro screeningdecisions. servicesHospital, CHRCOakland. Consultation Cell Line bank. Pharmaceutical Cancer drugMed Device Researchers efficacy screening.Medtronic, Baxter IPCTC biomarkerTech Validation- discovery Patient Database Sales forceClinical Genomics CLIA certification CPT CodeJoint Venture:Quest DiagnosticsVariable: IP Licensing, lab supplies, personnel, IT, Usage fee per CTC scan, data/consultingspecimen transportation sales, cell line sales, instrument/kits productFixed: Lab equipment, lab space, SG&A, R&D model22 22 23. Intellectual property progressWho ownsWhat is PatentNew IPthe IP? patentable ?process generationProgress Spoke to Berkeley Initial meeting with Provisional and New IP for keeping Tech Transfer IP lawyerUtility application competitors away ProvisionalUtility Application International Patent (US)Patents 12 months Up to 30 months 2323 24. Path to Revenues MechanisticPoCConcept Cell culture feasibility Validation Mouse models Requirements 20-30 human blood samples $10-15KCost ($100K+ equip) Access to lab Time2-3 Months2424 25. Path to Revenues MechanisticTechnologyPoC ScopeConcept Cell culture Proof of feasibilityConcept in Validationmultiple cancertypes Reproducibility Mouse models 100+ humanRequirements 20-30 humanblood samples blood samples $10-15K $50K+Cost ($100K+ equip) Incubator space Access to lab Time 2-3 Months3-6 Months 2525 26. Path to Revenues MechanisticTechnology BiomarkerPoC ScopeValidationConcept Cell culture PoC in multiple CTC / tumor feasibilitycancer typescharacterization Validation Reproducibility Mouse models 100+ human Genomic /PharmaRequirements 20-30 humanblood samples Proteomic blood samples MorphologySales $10-15K $50K+ OutsourceCost ($100K+ equip) Incubator space (~$20K) Access to lab Service/kit dev. Time 2-3 Months3-6 Months1-2 Months26 26 27. Path to Revenues MechanisticTechnology Biomarker ClinicalPoC ScopeValidation ValidationConcept Cell culture PoC in multiple CTC / tumor Patient feasibilitycancer typescharacterization stratification Validation Reproducibility Mouse models 100+ human Genomic / Phase II trialClinicalRequirements 20-30 humanblood samples Proteomic(~200 patients) blood samples Morphology Treatment useSales $10-15K $50K+ Outsource OutsourceCost ($100K+ equip) Incubator space (~$20K)($500K-$1M) Access to lab Service/kit dev. CPT Code/CLIA Time 2-3 Months3-6 Months 1-2 Months1-2 Years 27 27 28. Financial / Operational Timeline2012 2013 2014Q1 Q2Q3Q4Q1 Q2Q3 Q4 Q1 Q2Q3 Q41,2001,000Cash Burn 800 ($000) 600 400 200 0Development MilestonesMechanistic PoCIncubator Space EquipmentRegulatory/IP Milestones Incorporate IP License Provisional Patent 28 28 29. Financial / Operational Timeline20122013 2014Q1 Q2Q3 Q4Q1 Q2Q3 Q4 Q1 Q2Q3 Q41,2001,000Cash Burn 800 ($000) 600 400 200 0Development MilestonesMechanistic PoC Technology Scope Incubator Space EquipmentRegulatory/IP Milestones Incorporate IRB IP LicenseProvisional Patent2929 30. Financial / Operational Timeline2012 2013 2014Q1 Q2Q3 Q4Q1 Q2 Q3 Q4 Q1 Q2Q3 Q41,2001,000Cash Burn 800 ($000) 600 400 200 0Development Milestones BiomarkerMechanistic PoC Technology Scope Validation Incubator Space EquipmentService DevelopmentRegulatory/IP Milestones Incorporate IRBCLIA IP LicenseProvisional Patent 30 30 31. Financial / Operational Timeline2012 2013 2014Q1 Q2Q3 Q4Q1 Q2 Q3 Q4Q1Q2Q3Q41,2001,000Cash Burn 800 ($000) 600 400 200 0Development Milestones Biomarker Clinical ValidationMechanistic PoC Technology Scope Validation(Double-blind, placebo controlled Phase II) Incubator SpacePharma Sales EquipmentService DevelopmentRegulatory/IP Milestones Incorporate IRBCLIACPT Cat III IP LicenseProvisional Patent Patent ApplicationPat. Issue 3131 32. Choosing Partners: Decision Matrix LAB / Incubator Proof of Concept COST TIME IP issues ? 0 $ $$$ $ Hospital Trial$$$$$32 32 33. Next StepsFDA ClinicalTrials**Grants andInvestments IP andPatentsNew IPHospital trial generation Clinical**Grants andValidation InvestmentsPersonalizedtreatment of LABpatients Complete IP Publications protectionIncorporatingCanScanProof ofConceptNew IPRevenue from**Grants andgeneration PharmaInvestmentsRecord ofInvention Lab CertificationLicensingNew IP Patent filing(CLIA)royalties generationGrow cancer cellsApril 2012 May 2012July 2012Dec. 2012Spring 2013 33 33 34. Technology: Capture, Culture, Image CTCs 34 34 35. Live cancer cells = Better prognostics?35 35 36. The CanScan Vision: Personalized DiagnosticsPlatform for:New drug testingPersonalizedChemosensitivitytestingBiomarkerDiscovery3636 37. Thank you!James Lim, Ph.D., Nelson Chan, Ph.D., Dale Fedun, Brian FethMentor: John Feilders (CMEA Capital)Lawrence Berkeley National LaboratoryUniversity of California, Berkeley Haas School of Business 37 37 38. AppendixJames Lim, Ph.D., Nelson Chan, Ph.D., Dale Fedun, Brian FethMentor: John Feilders (CMEA Capital)Lawrence Berkeley National LaboratoryUniversity of California, Berkeley Haas School of Business38 38 39. CanScan Technology: Background on CTCs Collection of cells that have the ability to metastasize away from the primary tumor Enumeration of CTCs was a better indicator of disease progression than traditional imaging techniques CTCs are potentially a valuable diagnostic and prognostic tool3939 40. Current CTC technologies: LimitationsCompetitors Marker-Dependent Marker-INDEPENDENT Method leads toMethod allows for cell death LIVE cells to moveand grow Genomic andEasy to enrich cells Proteomic analysis for genomic and is difficult proteomic analysis TechnologicalTechnological DEAD-END HIGHWAY4040 41. Improving CTC detection and characterizationInvade Current detection and characterization methods for CTCs fail to address the most intriguing aspect of their biology: Adhere CTCs are programmed to invade, adhere and Proliferate proliferate. 4141 42. CanScan Tech: substrates and imaging software4242 43. Genomic Health: Historical Financials250Profit200Costs150Revenues100 500 -50 200020012002 2003 2004 2005 20062007 2008 2009 20102011-100-150-200-25080Net ProfitFunding Rounds60Cash Flow40200 200020012002 2003 2004 2005 20062007 2008 2009 2010 2011-20-40 4343 44. Health insurance reimbursement is necessaryprecondition for hospitals to use our service Private insurance or Medicare reimbursement requires:Evidence of Double-blinded, placebo controlled clinical trial with severalhundred participants will be needed Clinical Utility Must demonstrate the detection is accurate and repeatable Must demonstrate improved decision-making ability for physician linked to better patient outcomesAssignment of Codes are assigned by the AMA (CPT code) and CMS (HCPCScode) semi-annually with editorial panel approval (12-18 mo)a Billing Code CanScans likely coding: HCPCS Level II or CPT category III* Veridex CellSearch received code in Nov. 2011 for CTCs CanScan will likley need new code (non-immunologic)* Coding used for non-FDA approved service billed by suppliers other than physicians44 44 45. CMS requires that all laboratory testing on humanspecimens be CLIA certified CMS regulates all laboratory testing (except research) performed on humans in the U.S. through the Clinical Laboratory Improvement Amendments (CLIA) CLIA certification requires accreditation from a CLIA-certified provider (e.g., CAP) CLIA covers approximately 5,500 independent labs (225,000 total labs) We will likely need to apply for CLIA certification for High Complexity tests * FDA regulates commercially marketed in vitro diagnostic tests under the Clinical Laboratory Improvement Amendments (CLIA), not a requirement for CanScan* Immunicon received approval as a High Complexity lab in 11/2006 4545 46. The market size for metastatic cancer diagnostics in the US is estimated to be $805 Million / year Methodology: Value:Explanation: Source:U.S. population size313M Total U.S. population in 2012 U.S. Census x Bureau estimateU.S. incidence of all cancers 0.512% Treatment is typically given in ACS Cancer Factsthe first year following diagnosis & Figures 2011 = Total U.S. cancer incidence1.6 Mx % diagnosed with regional Cancers that spread to local or NCI SEER 201139.4% or distant cancers distant lymph nodes or organsdata=Patients w/ regional or628,420distant cancersx Cost of diagnosis and Weighted avg. patient cost p.a. JAMA. 2010;$1,285 monitoring (annually)for imaging procedures (2008)303(16):1625-1631= Market size for metastatic$805Mcancer Dx / monitoring 4646 47. Technology: Capture and Culture CTCs 1. Draw blood2. Separate blood through centrifugation3. Plate cancer cells on S-SUBSTRATES, let them grow 4. Image cancer cells 47 47 48. Technology: Enrichment and Selection Detailed comparison of CTCs from a single patient Determining the genetic and proteomic makeup of CTC subgroups 48 48