Commercialization of Cellular Therapies

Pharma & Biotech Growth Rates Have Been Declining Over The Last Decade

Source: IMS Health 2008

Cellular therapy may provide the solution:

>$50 billion/year market within 5 years to help

address those huge unmet medical needs

What is Holding Back Industry Participation?

• Funding Challenge difficulty in fundraising by small companies government funding reduced large companies are investing modestly - high risk

• Fragmentation industry and IP highly fragmented

• Clinical Challenges clinical failures few randomized trials complex regulatory issues

• Commercial Challenges business model unfamiliar high COG medical tourism a negative factor

Timelines for Cellular Therapy Products

Industry Development Stage

Aggregate Industry

Valuation

Take-offRealityIrrationalExuberance

Gestation

Multiple $500M+

products launched

Reassessment of industry

viability

First Press Coverage

Multiple pre-clinical success

Human trials

failure

1000X

100X

10X

0

Source: Yahoo finance, NASDAQ, TFG Analysis

RNAi Cell Therapy mAb’s

Successful launch of $500M+ Product

mAbs took nearly 20 years to successfully commercialize but now top 5 mAbs generated >$25B in 2008

mAbs took nearly 20 years to successfully commercialize but now top 5 mAbs generated >$25B in 2008

Devyn Smith, 2009

Industry & Cellular Therapy: Summary

• Big Pharma slowly entering cellular therapy field• Challenges to overcome:

-industry & IP fragmentation

-commercialization challenges• Successful business model for cell-based therapy is

dependent on

-unmet need,

-efficacy over standard of care

-value to clinicians/payers,

-scalability/COGS) with indication selection

• A successful business model may take another decade