Transcript S.From_StoneHill-Collegex

Stories in Entrepreneurial Finance
Stephen From, President and CEO EyeGate Pharma
November 29, 2011
The Leader in Ocular Drug Delivery
Stonehill College
Table of Contents
 Background on myself
 EyeGate summary overview
 Funding an Opportunity
 Wrap-up
The Leader in Ocular Drug Delivery
Stonehill College
Who Am I?
Stephen From
President & Chief Executive
Officer
 Over 15 years’ experience in finance with a focus on life sciences
 Previously, CFO Centelion, a biotechnology subsidiary of Sanofi-aventis
 Former investment banker specializing in the biotechnology and medical device sectors,
most recently at Banc of America securities
 Had several small business endeavors prior to finding path that lead me to this spot
 Received BSc from University of Western Ontario (London, Canada)
 Received Diploma in Accounting from Wilfrid Laurier University (Waterloo, Canada)
 Chartered Accountant – did my time with Price Waterhouse (Toronto, Canada)
 Investment Banker
• started in Toronto, Canada (BZW - M&A boutique focused in Telecom sector)
• Moved to London, UK (Citibank, ING Barings: from telecom to healthcare)
• ING sent me to NY
• Back to London with Robertson Stephens, Bank of America)
• CFO: Centelion in Paris, France (biotech company being spun out by Aventis)
• CEO: EyeGate in Paris then to Boston
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The Leader in Ocular Drug Delivery
Stonehill College
Table of Contents
 Background on myself
 EyeGate summary overview
 Funding an Opportunity
 Wrap-up
The Leader in Ocular Drug Delivery
Stonehill College
Company Mission
Eliminate Two Major Issues Currently Faced by Eye Care Practitioners
ISSUE #1
 PATIENT NON-COMPLIANCE
ISSUE #2
 LOW PATIENT THROUGHPUT
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The Leader in Ocular Drug Delivery
Stonehill College
EyeGate® II Delivery System
 Non-invasive, iontophoretic therapeutic delivery that
dramatically increases onset of action
 Capable of delivering a wide variety of drug types
ranging from small molecules to proteins
 In-office procedure that takes under four minutes
 All eye care practitioners can perform the procedure
 CE Marked and 510(k) route acceptable to FDA
EyeGate® II Delivery System
Eliminates the Issues of Patient Compliance and Patient Throughput while
Decreasing Safety Risks
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The Leader in Ocular Drug Delivery
Stonehill College
Corporate Overview
Lead product candidate EGP-437:
 A platform specific formulation of
dexamethasone phosphate
 Potent anti-inflammatory agent
 Commercial launch expected in late 2013
for anterior uveitis
 Expand label to dry-eye, scleritis and other
inflammatory indications
Research programs include:
 Reformulated antibiotic for Bacterial
Conjunctivitis
 Customized protein for Age-related
Macular Degeneration
 Control-released nanoparticles for
Glaucoma
EyeGate® II Delivery System:
 A small, elegant, and easy-to-use device that
delivers drugs non-invasively and quickly
 Capable of delivering a wide variety of
therapeutics
 Studied in over 400 people and over 1,200
treatments
 Specialty pharmaceutical company
(Ophthalmology) founded in 1998
 VC funded, private Delaware corporation
located in Waltham, MA
 Sufficient cash in-hand to fund Phase III
trial in anterior uveitis
 8 full-time employees
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The Leader in Ocular Drug Delivery
Stonehill College
Investment Highlights
EyeGate’s
Approach
Enhances Both
the Patient’s and
Doctor’s
Treatment
Experience
Strong IP
Portfolio with
Protection
Lasting through
to 2029 without
Extension
Lead Product
Candidate, EGP437 is a Late
Stage Asset with
Multiple
Indications –
Anterior Uveitis,
Dry Eye, and
Scleritis
Compelling and
Cost Efficient
Business Model
with a Defined
Path to
Reimbursement
Significant
Market, Global
Uveitis
Therapeutics
Market is
Expected to
Grow at 26%
Annually to $1.6B
by 20171
EyeGate® II
Delivery System
is a Proprietary,
Non-invasive and
Versatile Drug
Delivery System
Source: 1. Uveitis Therapeutics – Pipeline Assessment and Market
Forecasts to 2017, Global Data, April 1, 2011
The Leader in Ocular Drug Delivery
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Stonehill College
Initial Business Strategy and EGP-437
Initially Reformulating
Generics to Validate
Fast
Technology and Business
Case
 Low Risk: Understood safety and efficacy profile
 FDA 505(b)(2) route
 Multiple approved compounds to choose from
 Reformulated product becomes proprietary
EGP-437
 A platform specific formulation of dexamethasone
phosphate
 Potent anti-inflammatory agent
 Three clinical studies completed to-date including one
study for EGP-437’s lead indication, anterior uveitis
 No observed increases in intra ocular pressure
 U.S. Patent filed in February 2009
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The Leader in Ocular Drug Delivery
Stonehill College
Peak Year Sales Potential

EGP-437 has potential to achieve annual peak revenue of approximately $340 million in the U.S.
and $200 million in ROW
($ in millions)
Condition
Anterior Uveitis
Dry Eye Syndrome
U.S.
Market Size
(In 000s)
200
9,500
EyeGate Target
Population
EyeGate Target Patient Profile
(In 000s)
Frequent Outbreaks
Induction Period and Severe (i.e.
Sjrogens)
Estimated
Annual Peak
Sales
80
$60
500
$130
Scleritis
45
Total Population
35
$25
Corneal Graft Rejection
400
Active Graft Rejection
40
$30
Premium IOL's (multifocal)
380
$95
Cataract Surgery
3,000
TOTAL
$340
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The Leader in Ocular Drug Delivery
Stonehill College
Ownership


Raised $55.4 million
EyeGate’s ownership on a fully diluted basis, assuming all options granted and exercised and all
warrants exercised illustrated below:
Other,
9.0%
Options and
warrants,
14.9%
Ventech,
48.6%
Nexus,
3.1%
Medicis, 3.1%
Innoven,
17.1%
NEP, 4.2%
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The Leader in Ocular Drug Delivery
Stonehill College
Table of Contents
 Background on myself
 EyeGate summary overview
 Funding an Opportunity
 Wrap-up
The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Communicating to target audience
• Friends & Family
• Angel investors
• Venture capitalists
• Strategic investors
• Institutional investors
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
PURPOSE
Who Cares?
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
Vision Statement
"Preservation of sight" was the driving force behind the
founding of InSite Vision in 1987 and remains so today. We
pursue that vision through the development of innovative
technologies and products. Advancing the treatment of eye
disease guides our resource investments and the search
for more effective "solutions for sight." We are committed to
providing these solutions to patients and physicians and, in
doing so, building the long-term value of InSite Vision for
our global shareholders and partners.
This statement could be talking about any ophthalmic company!
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
• pSivida is a leader in the development of
miniaturized, injectable, drug delivery systems.
Who Cares?
2 steps away from answering question
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
focused on treating unmet ocular medical needs with the EyeGate® II
Ocular Drug Delivery System, a non-invasive drug delivery
technology that has the potential to treat multiple ocular diseases.
General!!
addressing the need for an alternative mode of ocular drug delivery because
there are safety and efficacy drawbacks posed by current ocular delivery
applications, such as eyedrops, injections or implants, which are hindered by
low bioavailability, collateral toxicities, sight-threatening infections and/or
retinal damage.
Who cares??
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
 developing therapeutics designed to address two major
issues in the ophthalmic space, patient compliance and
patient throughput.
Who cares??
 Non-compliance is the main cause of treatment failure
which leads to temporary or permanent loss of vision.
 Low patient throughput limits number of patients treated
and limits revenue for doctor
1 step away from answering question
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
Organize the world’s information and make it universally accessible
and useful.
GOOGLE
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The Leader in Ocular Drug Delivery
Stonehill College
So you have an idea!!!
 Mission Statement
Committed to bringing the best user experience to its customers
through its innovative hardware, software, peripherals, and services.
APPLE
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The Leader in Ocular Drug Delivery
Stonehill College
Moving Forward
 Business plan and executive summary
• Tells a story
• Problem > your solution
• Market opportunity
• Key investment highlights
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The Leader in Ocular Drug Delivery
Stonehill College
Cash
Sources of cash
• Revenue
• Non-dilutive
• Debt
• Non-dilutive and/or dilutive
• Equity
• Dilutive
• Strategic partnership
• Non-dilutive and/or dilutive
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The Leader in Ocular Drug Delivery
Stonehill College
VC’s
…..understand who you are and
….figure out what you want to be when you grow up
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The Leader in Ocular Drug Delivery
Stonehill College
VC’s
Creating Value
 Realizing ROI requires exit
• IPO?
• M&A?
 The exit path will influence
valuation and deal terms
Ten-Year Venture Capital Returns Continue
To Slide
The Leader in Ocular Drug Delivery
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Stonehill College
VC’s
Valuation
What value are you willing to accept????
Valuation
•
•
•
•
Multiple
ROI
Comparable company analysis
Net present value
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The Leader in Ocular Drug Delivery
Stonehill College
VC’s
Term sheet
• Liquidation preference
• Multiple liquidation preference
• Anti-dilution: full ratchet vs weighted average
• Pay-to-play provision
• Drag and tag alongs
• Incentive plan (options): limited exercise period,
reverse vesting
• Board seat
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The Leader in Ocular Drug Delivery
Stonehill College
VC’s
 Board seat
• Alignment between investor and mngt
• Exit: IPO vs M&A
• Stand-alone or integrated
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The Leader in Ocular Drug Delivery
Stonehill College
Table of Contents
 Background on myself
 EyeGate summary overview
 Funding an Opportunity
 Wrap-up
The Leader in Ocular Drug Delivery
Stonehill College
Success?
 Characteristics required???
• Fear of failure
• Drive or ambition
• Curiosity
• Desire for learning
• Discipline – tenacity
• Diplomacy
• Leader
• Belief
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The Leader in Ocular Drug Delivery
Stonehill College
Stories in Entrepreneurial Finance
Stephen From, President and CEO EyeGate Pharma
November 29, 2011
The Leader in Ocular Drug Delivery
Stonehill College