November 2017
Generating Value from Innovation
in Healthcare & Life Sciences
1
Disclaimer
This presentation may contain certain “forward-looking” statements. Such statements reflect current views on, among other things, our markets, activities, projections,
objectives and prospects. Such ‘forward-looking’ statements can sometimes, but not always, be identified by their reference to a date or point in the future or the use of
‘forward-looking’ terminology, including terms such as ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘forecasts’, ‘intends’, ‘due’, ‘plans’, ‘projects’, ‘goal’, ‘outlook’, ‘schedule’,
‘target’, ‘aim’, ‘may’, ‘likely to’, ‘will’, ‘would’, ‘could’, ‘should’ or similar expressions or in each case their negative or other variations or comparable terminology.
By their nature, forward-looking statements involve inherent risks, assumptions and uncertainties because they relate to future events and circumstances which may or may
not occur and may be beyond our ability to control or predict. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such
forward-looking statements. Any forward-looking statements made by or on behalf of Arix Bioscience plc (the "Company") speak only as of the date they are made and no
representation or warranty is given in relation to them (whether by the Company or any of its associates, directors, officers, employees or advisers), including as to their
completeness or accuracy or the basis on which they were prepared.
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Rules and the Market Abuse Regulation), the Company does not undertake to update forward-looking statements to reflect any changes in the Company’s expectations with
regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
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2
Overview
Life science discoveries advancing at an
unprecedented pace
Smaller companies are driving innovation
We help build these companies with a
permanent capital model and expert support…
… seeking to bring medical breakthroughs to
patients and build value for shareholders
3
Arix Bioscience: Building businesses and value
Life science ventures in a publicly-traded company
- Ticker: LSE: ARIX
- IPO raised £112m (February 2017)
Active management with a proven team of company builders
Direct interests built in 11 Group Businesses to date
- Spanning early to late stage development; multiple geographies
- Plus indirect interests through fund management business and BioMotiv
Privileged relationships with Big Pharma and Academia
Strong presence in Europe and the US
4
1. From 9 January 2006 to 8 December 2016
2. Cambridge Associates; Realised and unrealised returns; includes VC deals with an initial year of investment between 2006-2016 and net of fees
“Innovation” side of the healthcare sector driving investment returns
Life sciences delivering value for shareholders
Market Returns 2006-2016
8.1%
11.8%
22.5%
NASDAQ Index NASDAQ Biotech
Index (NBI)
Biopharma VC1 1 2
Targeting shareholder returns of 20% p.a. over the
longer term
Publicly traded shares versus ten year VC fund
Balanced exposure to diverse group of life science
companies
Highly experienced team with a strong track
record of building and realising value
Arix Bioscience
5
Source: Press releases, Pitchbook.
Note: Companies acquired while lead asset is in Phase I or preclinical development, for a disclosed value of over US$100m, 2010 to August 2017. This slide is not intended to indicate Arix’s expected returns or strategy in any way
but instead to provide an historical market context for early stage biotech.
Market opportunity
Transaction Value (US$m)
Pre
clin
ical
Ph
ase
I
Premium price paid for innovation
0 500 1000 1500 2000 2500 3000 3500
GlycoVaxyn / GlaxoSmithKline (2015)
Oncoethix / Merck & Co. (2014)
Heptares / Sosei (2015)
Amplimmune / AstraZeneca (2013)
Tensha / Roche (2016)
Fibrotech / Shire (2014)
Adheron / Merck & Co. (2015)
cCAM Biotherapeutics / Merck & Co. (2015)
Nimbus / Gilead (2016)
Seragon / Roche (2014)
Callidus / Amicus Therapeutics (2013)
Zacharon / BioMarin (2013)
CoStim / Novartis (2014)
Lotus Tissue Repair / Shire (2013)
IOMet / Merck & Co. (2016)
Calimmune / CSL Behring (2017)
Padlock / Bristol-Myers Squibb (2016)
iPierian / Bristol-Myers Squibb (2014)
Delinea / Celgene (2017)
Flexus / Bristol-Myers Squibb (2015)
IFM / Bristol-Myers Squibb (2017)
Engmab / Celgene (2016)
Upfront Earnout
Pre-Deal Cash Total Years FromRaised (US$m) Potential Deal US$m Inception to Exit
not disclosed 3,080 3.2
27 2,320 2.1
37 1,250 1.3
35 775 0.4
76 725 4.8
21 600 1.3
20 416 6.2
14 400 5.7
12 324 1.5
12 254 1.8
4 144 4.1
5 130 0.6
Average 23 717 (9.3x) 3.4
Median 12 478 (4.2x) 3.2
33 1,750 1
66 1,200 5.1
6 605 5
22.5 580 9.2
8 558 5.2
14 535 4.3
18 500 7.7
53 400 7.5
30 375 7
31 212 8.6
Average 31 653 (9.3x) 5.8
Median 30 546 (7.8x) 5.2
6
Broad science and commercial expertise
Joe Anderson, CEO
• VC & investor
background
• Former Partner,
Abingworth LLP
• First State Investments
• Dresdner Kleinwort
Benson
• Wellcome Trust, Ciba
• PhD Biochemistry
Jonathan Peacock,
Chairman• Big Pharma Background
• Former CFO Amgen and
Novartis Pharma, and
former Board Director of
Kite Pharma
• On Boards of Bellerophon
and Avantor
• Partner at McKinsey &
Company
Sir Chris Evans,
Deputy Chairman• Renowned scientist and
entrepreneur
• Founded numerous
successful companies
including Chiroscience,
Celsis, Biovex,
ReNeuron, Vectura,
Merlin Biosciences
Edward Rayner• Alliance Bernstein
• AMP Capital, UBS Asset
Management, JP
Morgan Investment
Management
• MA Chemistry and MSc
Management,
University of Oxford
Jonathan Tobin• Imperial Innovations
(Touchstone)
• MRC Technology
• PhD Molecular
Medicine from
University College
London; MBA from
Imperial College
Daniel O’Connell• OrbiMed Advisors
• Associate Director of
Cardiovascular
Research, Arisaph
Pharmaceuticals
• MD and PhD from Tufts
University
Mark Chin• Longitude Capital
• Boston Consulting
Group
• Gilead Sciences,
Genentech
• MBA Wharton; MS
Biotechnology UPenn
Owen Smith• Arthurian Life Sciences
• Grant Thornton
• BA Biology, University
of Bristol
Business Development Team
Leadership Team
7
Highly experienced Board
Former Roche Chairman and CEO
Non-Executive Director of Citigroup and Chugai Pharma
Former Chairman of Diageo plc, Chairman of INSEAD Board of Directors, and Board Director of Kite Pharma
Dr. Franz
Humer
Lead
Independent
Director
Former chairman of FTSE 100 companies Johnson Matthey, Whitbread, Kingfisher, Tarmac
Director of Invesco until May 2015
Former Chairman of ECI Partners
Former Director-General of the Confederation of British Industry (CBI), and first Controller of the Audit Commission
Chairman of Innoveas International
Sir John Banham
NED
Pharmacologist, and leader in drug receptor research, pharma R&D, biotechnology and venture investing
Led Zeneca’s global research activities and subsequently SmithKline Beecham’s R&D
Has worked to establish the Harrington Project since 2012; BioMotiv board member and chair of the Advisory Board
David
U’Prichard,
PhD, NED
British Member of Parliament for 18 years; former Secretary of State for Work and Pensions, Secretary of State for Business and Secretary of State for Defence
Adviser to Bechtel and Lockheed Martin and NED to Circle Holdings Plc and Sirius Minerals Plc
Chairs the Nuclear Industry Association
Lord Hutton
of Furness
NED
Former Group R&D Director at The Wellcome Foundation and a former director of Allergan
Former Director General of the Association of the British Pharmaceutical Industry; and a member of the UK Government Medicines Commission for 12 years
Visiting professor at King’s College, London, holds honorary degrees & Gold Medals from six universities
Professor Trevor
Jones, PhD, NED
Previously Group CFO of Charles Stanley plc, a leading Wealth Manager
Former Group CFO of Coutts, a global Private Bank & Wealth Manager
Former CFO of UBS Wealth (UK) before taking a global role in UBS Wealth based in Zurich
James
Rawlingson
CFO
Partner at L1 Health; and Associate Professor of Strategy and Health Policy at Columbia University
Former Executive Vice President of Strategy and Health Policy at Cardinal Health
Holds a DrPh in Healthcare Policy from New York Medical College, a BSN in Nursing from Fairfield University, and a Master of Public Health from Columbia University
Meghan
FitzGerald, DrPh
NED
Giles Kerr
NED
CFO of Oxford University
Director of Oxford University Innovation Ltd.; Non-Executive Director of AdaptimmuneTherapeutics plc, BTG plc, Senior plc, and PayPoint plc
Former CFO of Amersham
Fellow of Keble College, Oxford, and a Fellow of the Institute of Chartered Accountants in England and Wales
8
Building a balanced group
Currently: 11 companies (plus indirect holdings)
Target: 12 companies by end of FY17
20 companies by end of FY18
Target shareholder returns: 20% p.a. over the longer term
Early and late stageLife sciences GlobalBreakthrough
treatments
9
Successfully deploying capital since IPO
Led $65m Series B financing round
Invested & committed £8.6m total; fully diluted equity stake of 8.2%
Board seat
Exciting businesses addressing important areas of unmet medical need
Co-led $45m Series B financing round
Invested & committed £9.5m total; fully diluted equity stake of 12.0%
Board seat
Participated in $20m Series A financing round
Invested & committed £3.1m total; fully diluted equity stake of 9.0%
Board Observer position
Led $45m Series B financing round
Invested & committed £7.9m total; fully diluted equity stake of 15.4%
Board seat
Co-led $29m Series A financing round
Invested & committed £6.1m total; fully diluted equity stake of 23.4%
Board seat
Participated in $67m Series C financing round
Invested & committed £4.7m total; fully diluted equity stake of 3.8%
Board Observer position
KEY: Figures shown above are based on assumption of total invested and committed capital per latest funding round.
10
Direct interests in 11 Group Businesses to date
Oncology
Anti-Infectives
Gene Therapy &
Orphan Diseases
Technology
Platforms
Respiratory
£20.1m; 9.0% equity;
13.5% of NAV
£5.1m; 14.9% equity;
3.4% of NAV
£9.5m; 12.0% equity;
5.7% of NAV
£8.6m; 8.2% equity;
5.7% of NAV
£4.7m; 3.8% equity;
3.1% of NAV
£7.9m; 15.4% equity;
5.2% of NAV
£3.1m*; 2.5% equity;
2.6% of NAV
£1.0m; 20.7% equity;
0.7% of NAV
£6.1m; 23.4% equity;
4.2% of NAV
£1.3m; 31.9% equity;
0.9% of NAV
£3.1m; 9.0% equity;
1.0% of NAV
KEY: Figures shown above are based on assumption of total invested and committed capital per latest funding round. £ figures indicate value of Arix interest in the corresponding Group
Business (*value of Verona Pharma marked to market as of Arix Bioscience plc Half Yearly Report for the Six Months Ended 30 June 2017). % figures indicate Arix’s fully diluted equity
stake in the corresponding Group Business. % of NAV reflects percentage of total calculated Net Asset Value as of 30 September 2017.
11
Group Businesses reaching milestones
Initiated clinical trials for 3 lead programmes
Reached milestones agreed at Series B financing (March 2016)
Successful $80m Series C; value uplift to $300m post-money (from £110m)
Arix actively supporting further development of Group Businesses
Appointed Graeme Smith as CSO (co-inventor of Lynparza™)
Established world-class Scientific Advisory Board
Reached a series of development milestones
Data from two Ph.1 clinical trials and five non-clinical trials show lead
candidate well-tolerated and safe in patients, non-clinical efficacy
Lead candidate Ph.2-ready
Successfully listed on NASDAQ and raised $80m
Ph.2a clinical data showed significant improvement in lung function
and onset of action in combination with Spiriva® vs. Spiriva® alone
Agreed collaboration with AbbVie to develop novel immuno-oncology
therapeutics
Collaboration results in value uplift of c. 25% for Arix stake
12
Case study: Autolus
In March 2016, Arix led Series B financing round at £110m
post-money valuation
Invested and committed £10.0m for 9.0% equity stake and
seat on Board of Directors
Autolus met successive development milestones, including
progressing 3 programmes into clinic, releasing Series B
funding tranches
In September 2017, Autolus successfully raised $80m in a
Series C financing; valuation uplift to $300m post-money;
Arix participated in financing slightly super pro-rata
Currently, Arix’s total stake in Autolus is 9.0% equity at a
valuation of £20.1m, representing 13.5% of NAV
Substantial development progress and value creation since Arix involvement
13
Building valueAnticipated milestones*
Q4’17 2018 2019
Ph.1 CAR-T trials
startedPh.1 CAR-T trials data
Clinical candidate selection (Pol Θ) Ph.1 PolΘ trial start
2nd Clinical candidate selection
Clinical candidate selection Ph.1 prostate cancer dataPh.1 prostate cancer trial start
Ph.1 HPN536 trial start2nd Clinical candidate selection
Ph.2 fungal trials start Ph.2 fungal trials data
Ph.2/3 fungal trial starts
Ph.3 antibiotic trial starts Ph.3 antibiotic trials data
Ph.2a and 2b COPD
trials dataPh.2a Cystic Fibrosis data
Ph.2b COPD data;
Ph.2/2a/2b COPD and Cystic
Fibrosis trial starts
Clinical candidate selection
Clinical candidate selection
Ph.1/2 gene therapy trial start
Clinical candidate selection Ph.1/2 orphan bone trial start
Biomarker confirmation
Clinical candidate selection
Ph.1 Huntington’s trial start
Ph.1 Huntington’s data
Pilot scale development Commercial scale development
* Other value-creating events can happen during the period, e.g. third party financings, corporate deals, M&A, IPOs, etc.
14
Data shown as per Arix Bioscience plc Half Yearly Report for the Six Months Ended 30 June 2017, updated to reflect post-period end disclosures and investments through 30 September 2017.
Arix Bioscience plc has a rigorous cash reserve policy which means that all financial and contingent commitments relating to existing Group Businesses are met with existing cash reserves.
Group Businesses well resourced
£39m
£23m
£45m
Invested Committed Reserved
15
Novel therapeutics for autoimmune and allergic diseases B
Delivery systems for type II diabetes B
Minimally invasive interventional and surgical procedures -
Advanced ultrasound education and training simulators -
Full-service CRO focused on the most challenging therapeutic areas B
Proton Beam Therapy for cancer B
Clinical-stage stem cell therapy for stroke-related disabilities B
CRO specialising in early clinical development B
Markets Proxima – a platform for measuring blood gases, electrolytes and metabolites B
Clinical stage biotech with a “first-in-class” drug for chronic obstructive pulmonary disease -
Antibodies for respiratory diseases including COPD and α1-anti-trypsin deficiency A
Antibodies for atopic dermatitis, inflammatory bowel disease and colorectal cancer A
Koutif Therapeutics Small molecules for pain and inflammation A
NYNEX Small molecules targeting deubiquitinase UPS9X for the treatment of cancers A
Small molecules targeting protein unfolded response for retinitis pigmentosa and ALS A
Small molecule targeting nuclear receptor for autoimmunity and immuno-oncology A
SAPVAX Peptide-based, self-adjuvanting vaccines for cancer A
Antibody inhibitor of leukocyte infiltration for autoimmune disorders A
Source: Company, BioMotiv
BioMotiv, a US research accelerator, and ALS, Arix’s fund manager
Interests through BioMotiv and ALS
A = BioMotiv Board Representation B = ALS Board Representation
Board Seat
BioMotiv
holdings
in the US
Arthurian
Life
Sciences
managed
portfolio
16
Proprietary deal sourcingRich, renewable pipeline; Run-rate over 800 ideas annually
Industry
Partnerships4% shareholder in Arix5% shareholder in Arix
Broad VC Networks
in EU and US
Universities
17
Proprietary deal sourcingRich, renewable pipeline; Run-rate over 800 ideas annually
Research
Accelerators
Fund Manager
Current holdings
Germany
Wholly-owned subsidiary of Arix
First mandate: Wales Life Sciences
Investment Fund
£55m in funding
2.5% management fee and 20%
carried interest
US
18
Broad access to life science opportunities
Arix contacts,
46%
Brokers, 26%
Direct company
approaches,
11%
BioMotiv/accelerators, 6%
Universities,
11%
North
America, 37%
UK, 30%
Europe, 25%
ROW, 5%
Australia, 3%
Preclinical,
55%
Phase 1, 14%
Phase 2, 21%
Phase 3, 7%
Approved,
3%
* 801 opportunities seen since 1
March 2016 to 15 October 2017
Of Biotechnology Opportunities…
19
Screening for the best opportunities
Run-rate of over
800 opportunities
per year
Extensive diligence
on ~60 opportunities
to date
‘Live’ opportunities
20
Detailed diligence approach
• Breakthrough science & unmet medical need
• Validating preclinical or clinical data
• Capability of management and R&D teams
• Opportunity to add significant operational value
• Cash runway
• Deal structuring
• Agree clear value inflection points
• Regulatory pathway
• Market analysis
• Intellectual Property
Science
Commercial
Operations
Finance
21
White papers drive rigorous understanding and identify specific opportunities
Proactive sector research
Objective: Rigorous sector evaluation to
develop a detailed understanding of a sector
Contents: Memorialise findings that becomes a
“living document”
Market opportunity / unmet need
Current competition / standard of care
Clinical development approaches
Regulatory environment
Pipeline / new technologies
Commercialisation (pricing, reimbursement)
Strategic interest / valuations
Results: List of companies / technologies worth
immediate diligence or longer-term monitoring;
e.g. Iterum, Harpoon, LogicBio
Recent Focus Areas: Anti-Infectives, Oncology and Gene Therapy
22
Life science ventures in a public company
Conclusion
Deep pipeline of new opportunities
Key relationships with Big Pharma
High potential group of 11 companies already in place
Bringing life science ventures to public market investors
Appendices
24
Strong Support from Expert Syndicates
c. $100m invested and committed by Arix in 11 Group Businesses to date
c. $400m additional contributed by expert syndicates, several of which we
have led
25
Extensive relationships in the industry and VC community
Dealflow supported by team at Arix HQ in London
UK: “First Look” Agreements with 6 leading universities
Germany: “First Look” Agreement with the Max Planck LDC
Max Planck Society operates c.100 research institutions in Germany
Employs > 15,000 people and receives funding of €1.7bn p.a.
Broad VC networks and agreements with leading research centres
Europe: Sourcing innovation
26Source: Company, BioMotiv
Broad VC networks and shareholding in a research accelerator
US: Sourcing innovation
Extensive relationships in the industry and VC community in the US
Dealflow and US Group Companies supported by a team in NYC
Innovative science also sourced through BioMotiv with links to the
Harrington Scholars program
Arix is a BioMotiv shareholder and has committed $25m
Arix can invest in businesses via BioMotiv, alongside BioMotiv, or
independently of BioMotiv
Opportunities pre-qualified at point of review by BioMotiv following
Harrington screening process
27
Harrington Scholars programme
Source: BioMotiv
Extensive reach into US academic centres
Albert Einstein
College of Medicine
Rutgers
Columbia
University
University of
North Carolina
Duke
UniversityEmory
University
University of
Kentucky
Indiana
University
Washington
University in
St. Louis
University of
ColoradoUniversity of
Southern California
University of
California,
San Francisco
Mayo
Clinic
The Ohio State
University
Case Western
Reserve University
Harvard
University
Sickle Cell
disease
Hypoxemia &
Cardiac Arrest
Myocardial
Infarction
Diabetes and Atherosclerosis
Macular Degeneration
Cancer
Breast & Ovarian Cancer
Prostate Cancer
HTN & Atherosclerosis
Bacterial Drug Resistance
Type I Diabetes
Diabetes Cancer
Retinitis Pigmentosa
BlindnessOsteoporosisAlzheimer’s
DiseaseAge Related Macular
Degeneration
COPD
Obesity & Diabetes
Ischemic Retinal Diseases
Wound Healing
Basal Cell Carcinoma
Huntington’s Disease and
Neurodegenerative
Disorders: Psoriasis
Type I Diabetes
Neonatal Brain
Injury & Stroke
Retinitis
PigmentosaHeart Failure
Tuberculosis
Alzheimer’s
Disease
Alzheimer’s
Stroke and Cancer
Acute Myeloid Leukaemia
Bacterial Drug Resistance
Blood Cancers
Respiratory Stimulant
Inflammation
Alzheimer’s Disease
Niemann-Pick C Disease
BioAtla
Autoimmune
Retinal Degeneration
Cancer
Rheumatoid Arthritis
La Jolla Institute
University of California,
San Diego
Pain Control
Nervous System
Movement Disorders
Osteoporosis
Alzheimer’s Disease
Alzheimer’s
Disease
Diabetes
Vanderbilt
University
Lung
Transplant
Rejection
Non-
alcoholic
Fatty Liver
Disease and
Diabetes
Yale University
Pain Management
CancerMt.
Sinai
The Rockefeller
UniversityMyocardial
Infarction
Memorial Sloan
Kettering Cancer
Center
Brigham and
Womens Hospital
Heart Rhythm Disorder
Psoriasis, Diabetes,
Rheumatoid Arthritis and
Alzheimer's Disease
HDI
Sickle Cell anaemia and
Beta-Thalassemia
Boston
University
University of
Pittsburgh
New York
University
University of
Pennsylvania
Johns Hopkins
University
Massachusetts
General Hospital
Inherited Heart
Rhythm
Disorders
Geisel
MRSA
University
of Texas
Cancer
U. of
Maryland
Depression
University of
Michigan
Melanoma
University of
Arizona
Stanford University
Cancer
28
Two-way flow of information on business opportunities, covering:
Sourcing
Screening
Due diligence
Joint business building
Benefits for Arix:
Access to deep scientific knowledge and R&D capabilities
Market intelligence and commercial assessment
Strategic investments at IPO: 5% holding from Takeda, 4% from UCB Pharma
Pharmaceutical partnershipsTakeda and UCB Pharma