Information MemorandumJune 2012

Project Koenig

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Transaction Summary

Company Name Project Koeing

Year of Incorporation 2003 in the US and 2005 in India

Nature of Business Medical Device and Biotechnology

Promoters Project Koeing US

Requirements The Promoters are looking for private equity funding round of US$ 30 mn / Outright sale

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Genesis of Project Koeing US: The Backdrop

The Backdrop

Over last few decades, global Pharma companies experience rising competition and costs related to conducting research on patented molecules. Thus, they increasingly resort to outsourcing this research or acquiring commercially attractive and ready molecules, esp. Biotech product patents

During the last over 8-10 years, the price of biotech molecules grew substantially ranging between US$ 0.5-16.0 bn. and several large transactions took place with Pharma companies buying or licensing out these molecules from biotech companies

However, the scientists responsible for developing these molecules were rarely sufficiently compensated, leading to a significant level of frustration in the scientist community, On the other hand, the biotech companies walked away with huge profits

Also, while the society was benefited with new innovative products, they came at a high cost

Company’s Formation

Given his extensive experience in the Pharma and medical field, the key promoter of Project Koeing US (PK US), identified a unique opportunity of creating a ‘platform’ for research scientists wherein they could internally develop patented molecules at effective costs and reap financial rewards for their efforts

With this background, PK US was formed in year 2003

Many well renowned scientists from the U.S. and India joined PK US as equity holders in the Company and are currently on the Scientific Advisory Board, guiding the development of molecules they have themselves developed

The Company’s entire research team is not only fully dedicated to serving the society with their research contributions but is also focused on providing the same at more economical rates that would not have been possible otherwise

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Project Koeing: A Snapshot

Project Koeing India (PKI) is the Indian subsidiary of PK US and is currently one of the fastest growing biotechnology companies in India

The Company’s vision is “ To improve the quality of human life by assisting in the detection and treatment of cancer and various abnormalities’

PKI has a unique business model of acting as an incubator of various molecules and technology platforms during their development process

The Company has already in-licensed patented molecules and technology platforms in 5 areas related to Cancer and other diseases in India. All these molecules or platforms are fully validated by important authentic agencies from the U.S. and India

Currently, the Company owns 65 patents CAD: Ready for Market today The CAD based technology for diagnosis of breast cancer and

other types soft tissue of cancers. It is a validated technology in the sense that the company has already received Bionexus status from the Malaysian Biotechnology Corporation Sdn. Bhd. And has been tested in over 400 cases in the US and proven to have an accuracy of 95%.

Brief Description

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The Company Structure

Sub 1 The Company has been created for the commercialisation of Manufacturing technology platform for manufacture of recombinant protein

Sub 3 The Company has

been created for the commercialisation

of A Immune system boosting cytokine

technology for breast cancer

Products

Sub 2 The Company has

been created for the commercialisation of a novel platform

based on nucleic acid technology. The 1st product has already been shown to be safe and efficacious in cancer in Phase II

human clinical trials and is all set for

Phase3 studies with all approvals in

place

Project Koeing

Sub 4Malaysia

This division would undertake

development of Biotechnology and

Medical device projects In Malaysia

– Currently a CAD Based Breast Cancer

detection Project has been developed

and is ready to market

100% equity 100% equity 100% equity 30% equity

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In-house Value Add during the Development Process

Licensing out/Sale of the Developed Molecules

In-licensing of Molecules/Technology

Platforms

Typical Timeline – 3/4 Years

Project Koeing India licenses out new molecules or a technology platform from Pharma companies and takes over the remaining development process. The original creator (scientist) of the molecule typically takes an equity stake in Project Koeing India

Project Koeing India manages the entire development cycle of the molecule/platform in a more efficient & cost effective manner

The Company aims to: Create cheaper and effective

drugs to fight cancer. The Company is able to significant reduce the development costs of molecules as compared to Pharma Generic companies

Quick turnaround of the process

The Company enjoys the unique advantage of having various renowned scientists besides the original creator of the molecule/technology that provide extremely valuable insights during the development processes of these molecules/platforms

Once the development process is complete, Project Koeing India plans to license out or sell the developed molecules to global Pharma company that will launch these drugs into the market

Incase of licensing out, Project Koeing India will continue to hold all the patents related to the molecules/technologies, which can be further used to develop new technologies in related areas

The upfront payment received from the Pharma companies and the periodic royalties etc will be main revenue generators, which will be shared with the original creators of molecules/technologies

Project Koeing India: A Unique Business ModelVarious Stages

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The Technology Platform

PKI’ various projects such as these have strong technological validates from

institutions including US FDA, DCGI (India), Dept. of Science & Technology (Govt. of

India), Malaysian Biotechnology Corp. etc

PKI currently has its four pillars of success in form of the following molecules:

A Platform technology for bio-manufacturing of recombinant proteins in yeast-based expression systems; Cost of production to be reduced to 20% of the current manufacturing cost

A Novel RNAi based Platform: Novel class award winning technology for the treatment of colorectal cancer; The product had already gone through Phase I / II studies in the US, and has been cleared by US FDA; Phase III studies to be conducted in India

Affinity based Drug delivery technology: Novel Class of molecules; The entire preclinical trials have been completed in US and application is being prepared for submission to the DCGI seeking approval to conduct Phase I/II clinical trials in India for liver cancer

Immunotherapy: A Cytokine Patent owned by the company and under further development in the Indian lab (at a preclinical stage); Very effective in Leukimia, Renal Cell carcinoma and other Cancers.

CAD: A Non invasive Medical device using AI based algorithms for detection of Breast cancer and automated biopsy plus drug delivery

Five Technology Platforms

Put together, these molecules have a market potential of over US$ 50 Bn.; PKI’ first exit of a Molecule/Platform is expected to take place

in the next 18-24 months; Prospective collaborators for these technologies include

Merck, Roche, GSK, Pfizer etc

Project Koeing is consistently working on creating its future pipeline of molecules/platforms etc and

currently is in process of acquiring/licensing another 5-7 technologies

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Five Key Projects in the Pipeline

RNAi – 12 to 18 monthsA Phase III-stage clinical

candidate that belongs to a novel class of molecules

called ribozymes, which work by destroying mRNA

molecules of target proteins; This is for the treatment of

colorectal cancer

Manufacturing Tech. – 6 months

A platform technology for bio-manufacturing of

recombinant proteins in yeast-based expression

systems

Affinity based drug delivery – 24 to 36

monthsAn early clinical stage

candidate that belongs to a novel class of molecules that work by organ targeted drug

delivery; This is for the treatment of liver cancer

Immuno-therapy – 60 months

An early-stage program to discover and develop a Immuno Therapy based

cytokine which will be able to help boost the immune

response to fight against melanoma, Lymphoma and

Rena cell carcinoma etc.

Key Projects in the Pipeline

CAD Tech – 3 MonthsA Medical Device platform

technology for not only detection of various types of

abnormalities like cancer but also automated Biopsy

and drug delivery

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Enhanced Protein Expression Technology – Manufacturing Tech.

This is an interesting technology to increase the yield of fermented products and the yield is as much as 5-10 times more in fermentation of recombinant proteins, leading to substantial decrease in production cost

Description

•Platform for bio manufacturing of recombinant proteins in yeast based expression systems;

•Eventually the platform will also be extended to mammalian systems like CHO cells

Technology

•Technology creator is SALK Institute for Biological Studies

•Dr. Martin, who had originally patented this technology, is also a shareholder in PKI

Benefits

•This platform enables 5-10 fold increase in yield per unit, thus cost of production of proteins can be reduced to 20% of the current manufacturing cost

•It is also a platform which has varied applications

Investors & Funding

•INR 45 mn has been awarded From World Bank Technology Development Funds through ICICI

•A total of around US$ 60 mn have been spent on the molecule so far

Current Status

•In house work has shown and increase in Yeast cell productivity by a factor of 2 fold.

Time to Market & Potential

•Time to market is around 1 year, with a total market potential of around US$ 30 bn

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RNAi

The DCGI has approved it for Phase III clinical trials in India at 20 cancer centers. RNAi based products will most likely be the first product to hit the market in the next 18-24 months with a high success rate and

huge market potential

Description

•RNAi based products is a novel class prize winning technology for the treatment of colorectal cancer

•The mechanism of action of RNAi based products is mediated through Ribozyme; The result of RNAi based products in patients with high VegFr1 in colonic cancer patients are very high

Technology

•2 Major Biotech companies had initially worked on this molecule and invested over US$ 245 mn; KPI took over project when the the JV between the 2 companies split as a result of them being bought out by other major Pharma companie.

Benefits

•Besides colorectal cancer, RNAi based products can also be used in the treatment of other types of cancer including breast cancer ,and weight reduction

Investors & Funding

•RNAi based products patent has been well acknowledged by the Govt. of India and thus has been granted US$ 4 mn from Dept. of Science & Technology for its development

Current Status

•RNAi based products has already undergone Phase I & II trials in the U.S. and the Phase III are to begin in the next couple of months; the DCGI approval for the same has been received by PKI

Time to Market & Potential

•Time to market is around 12- 18 months, with a total market potential of around US$ 15 bn

•Potential collaborators post the clinical trials include Pfizer, J&J and Otsuka, Aventis, Taiho etc. (Discussion have already been initiated with them.

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Affinity based Drug delivery

LIV1 is an early clinical stage candidate that belongs to a novel class of molecules that work by organ targeted drug delivery and is targeted at treating Liver related cancers

Description

•The Ligand technology is a mechanism by which the active drug molecule can be delivered to the targeted organ depending on the nature of the disease

•The technology enables the specific Anti-Cancer drug needed to treat the tumor for focused delivery into the tumor

Technology

•Technology creator was a Maryland based Biotech company under a JV with John Hopkins and as mentioned above, it has been validated by US FDA

Benefits

•The first application targets liver cancer and comprises the cancer drug 5FdU linked to a second molecule that directs it selectively to the liver

•The FDA awarded Orphan Drug Status to the same that puts the drug on a fast track for approval

Investors & Funding

•A total of around US$ 40 mn have been spent on the molecule so far

Current Status

•An IND application has been prepared and is ready for submission to the DCGI seeking approval to conduct Phase I/II clinical trials of LIV-1 in India for liver cancer

Time to Market & Potential

•Time to market is around 3 years, with potential market collaborators including Pfizer

•Market potential is around US$ 3 bn

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Immuno Therapy

Cytokine Technology is an early clinical stage gene therapy product that is targeted at treating Renal Cell Carcinoma, Myloma/ Lymphoma and other kinds of cancer

Description

•The Immunotherapy, is an early-stage program to discover and develop a Cytokine based product for treating various immune based cancers like Myloma, Lymphoma and Renal Cell Carcinoma

Technology

•Technology creator is researchers at NIH and PK US

Benefits & Current Status

•While the product is at an early stage of development, it is believed to be very beneficial for breast and other kinds of cancers

Investors & Funding

•The funding of INR 94 mn has been provided by grants and soft loan from the Department of Biotechnology, Government Of India

How it works

•The tech works in three ways:–Blocking tumour angiogenesis (new blood vessel formation)

–Inhibiting tumour cell proliferation by sequestering the growth factors

–Limiting tumour metastasis by inhibiting tumour cell migration across semi-permeable barriers

Time to Market & Potential

•Time to market is around 6 to 7 years, with a total market potential of around US$ 2 bn

•Potential collaborators include Novartis and GSK

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CAD Technology

Spacer for Inhalation

CADCADReady for Market Ready for Market

todaytoday

Project Koeing has acquired an interesting technology for use in various asthmatic conditions. where the new spacers patented, developed, approved by US FDA can be of tremendous use in delivering much higher quantity of drug into the lungs as compared to the current traditional inhalers

The CAD based technology for diagnosis of breast cancer and other types soft tissue of cancers. It is a validated technology in the sense that the company has already received Bionexus status from the Malaysian Biotechnology Corporation Sdn. Bhd. The Company in Malaysia will go into production as soon as funding can be obtained. In Studies involving over 400 patients the technology has shown to have an accuracy of 95% with less than 1 false positive in 4 films.

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The Promoter Team

Co Founder

Founder

Has spent over 40 years in the pharmaceutical industry Commenced at age 19 in Schering AG; Grew up to the level of All India No. 2,

at the age of 27 Joined The UB Group as General Manager [Corporate Management div.]; Grew

to the level of President Life Science Division, and was running 7 group companies in India and Africa

Was a member of Hoechst AgrEvo board, Aventis AgrEvo, and several other UB Group companies

Was responsible for bringing pain killer “Combiflam“in India, and several other successful brands of the group

President Project Koeing India for last four years. Also Director, of a leading Neutraceutical company.

• Graduate in Engineering from the US• Over 23 years of experience in Biotechnology- both in the US & India• Founder and Executive Vice President of a CMO [worked in using Mammalian

and Yeast Cell lines]. Subsequently, founded a BioInstruments company [Nasdaq quoted company], which was involved in the marketing of sophisticated equipments for Biotech R&D. Prior to this he was associated with a Medical device company- a CAD based diagnostic Tech company

• Founder, Managing Director of PK US and its associate companies in India and Malaysia

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Senior Management Team

Management Qualifications & Experience

Director Medical Affairs, Project Koeing India

Was Director Medical Affairs, Hoechst, Aventis; Later, Vice President at Zydus Cadila

Incharge – Regulatory Affairs Was previously working with Bharat Biotech

Head, R&D

Was professor in Texas Health centre. Director for Gene Transfer Technologies for Cancer Therapy & Research Center, Texas [USA] and was the Head-Biology Research for Reliance Life Sciences [Mumbai; Ph.D with Molecular Virology & Oncology, Wisconsin, U.S.

Executive Vice President – Legal and Commercial

Graduate from the University of Poona, pursued his Management Studies at the Jamanalal Bajaj Institute Mumbai & the Narsee Monjee Institute Bombay; Was previously a senior officer in Hoechst Marion Roussel and General Manager in Global Tele

VP of New Projects Strategic Consultant by profession he is Looking after all the new projects of the company; Worked with Hitachi India , prior to joining Project Koeing India

Executive Vice President = HRD & Materials Management

Over 30 years of experience in Pharma and Liquor industry. Was Vice President UB Group

CSOHas previously worked with Amgen, Genentech, Avasthagen etc; Was CSO of Project Koeing India for 3 years; Currently he has decided to move to San Francisco and will assist PK US operations in the US

VP R&D Was previously working with Glenmark

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Knowledge Quotient of the Team

Others5%

Graduates11%

Doctorates Degree

37%

Masters Degree

47%

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Scientific Advisory Board

Name Associations

Noriyuki Kasahara M.D., Ph.D. University of California at Los Angeles, CA

Patrick Hwu, M.D. MD Anderson Cancer Center, Houston, TX

Dr Mukund JoshiEx President Indian Radiological & Imaging Association

Chief Radiologist at Jaslok & Tata Hospital

Dr. Om Tavri Ex President Indian Radiological & Imaging Association

Chief Consultant Asian Cardiology Institute

The Scientific Board plays a key role in maintaining a strong product pipeline for the Company by continuously searching for and acquiring new technologies/products for Project Koeing India to work upon

in the future; Most of the Board members are part owners of the technologies/products, thus are shareholders in the Company

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Clinical Advisory Board

Name Associations

Alan Venook M.D. University of California at San Francisco, CA

Malcolm Brenner M.B., Ch.B., Ph.D, F.R.C.P., F.R.C.Path.

Baylor College of Medicine, TX

Dr K C Saxena Founder and CTO Stereometrix ., San Jose, CA

Dr. Eberhard Baltin MD & VC Hoechst Group

MD Aventis Pharma

Nassim Usmaan, Ph.D CEO, Catalyst Biosciences, San Francisco, CA

Kim Margolin M.D Fred Hutchinsons Cancer Center, Seattle, WA

The Clinical Board plays an active role in the development and testing of products by guiding the entire process from acquisition till the clinical trials of the products

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The R&D Lab at Mumbai

Project Koeing India has an 18,000 sq ft Research and Development laboratories in Mumbai. This state of the art DSIR approved R&D labs will be used to develop products. A larger pilot plant and manufacturing center on 11 acres will be setup in Khapoli.

Lab Facilities include

1. State of the art of Recombinant, Mammalian and Bacterial yeast based cGLP Laboratories

2. State of the art level 2t, Gene Therapy Labs with incineration at exhaust points to contain any virus spillage and positive pressure Corridors

3. Labs for development of cytokine based Immunotherapy

4. The common infrastructure is set aside with easy access for all labs

5. All the labs are in a clean zone environment and accessible only with appropriate access using electronic keys and electronic air lock system

The lab facility at Mumbai is the cornerstone infrastructure for all the ongoing R&D efforts at PKI and is a state of the art facility serving all requirements of the various technologies/products under development

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Key Features of the Lab

Fermentation & Protein Purification

Microbiology & Molecular Biology

These labs are used for yeast fermentation and application of VFF2 technology to produce recombinant bio-therapeutic proteins such as human insulin, human growth hormone, G-CSF, etc. The major equipment here is as follows: Biocontainment hood Incubators Five-liter Fermentors Chiller and compressor units Bench-top refrigerated centrifuges and microfuges Floor model centrifuges PCR Thermocyclers Electrophoresis systems HPLC Chromatography systems (Radial and Axial)

These labs are used for preparation of DNA, RNA and plasmids, banking of plasmids in E. coli bacteria, and analysis of DNA by restriction enzyme mapping, polymerase chain reaction (PCR) and gel electrophoresis. The major equipment here is as follows: Biocontainment hood Incubators Bench-top refrigerated centrifuges and microfuges PCR Thermocyclers Electrophoresis systems Gel documentation system (for electronic capture and recording of data)

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Key Features of the Lab (contd.)

Ancillary Labs

Gene Therapy & RCL Assay

They include labs for Media Preparation, Analytical and Cell Culture. The major equipment here is as follows: Water purification system Autoclaves Freezers: -80oC and -20oC UV/VIS Spectrophotometer ELISA Reader Biocontainment hoods CO2 Incubators

These labs are used for discovery, production and analysis of lentiviral-based gene therapy products using MSP36. Since lenti-viruses can be pathogenic, the gene therapy lab has been specially designed to provide Level II containment with an independent HVAC system, negative pressure and burn-out unit. The major equipment here is as follows: Biocontainment hoods CO2 Incubators Microscope Two-way autoclave for biohazard waste decontamination Ultra-centrifuge

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The Pilot Plant

Pilot Plat for Recombinant

Proteins

Pilot Plant for Recombinant Proteins (being equipped): This has been built to be “almost” GMP specifications, incorporating separate HVAC systems, uni-directional flow of personnel, labs for QC/QA, Media Prep Room, and various suites for Fermentation, Clarification and Downstream. The major equipment here are as follows: 10- and 30-liter Fermentors Autoclaves Boiler (steam generation), chiller and compressor unit Floor model centrifuges Tangential flow filtration systems Low pressure and High Performance Chromatography systems Analytical lab instrumentation

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SWOT Analysis

Strengths Weaknesses

1. Only company in India with a drug in Phase III stage

2. Owner of unique Manufacturing technology

3. High IPR value

4. Validated and recognized by International Research Institutes and Governments Agencies

5. Wide spectrum Of operations

6. High Precision Value Chain

1. Currently, an Indian Government subsidized organization, however with minimal incentive from the Govt.

2. Infancy stage of the biotech sector and the lack of significant awareness in India

3. Lack of super specialist manpower

4. Slightly complex legal structures

Opportunities Threats

1. US$30 bn Orphan Drug Market to be tapped

2. Opportunity to generate very high networth worth US$100 bn worldwide

3. Huge Potential of value creation

4. Opportunity to generate higher IPR value

5. Opportunity to improve the quality of life by creating new improved treatments for cancer

6. Opportunity to improve Biotech research status in India & abroad

1. Brain Drain

2. Infringement of IPR

3. Sustention of Continuous R&D Investment

4. Technology obsolesce of the technical equipment used

5. Volatility of global economic conditions

6. High lead time in Infrastructure Development

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Milestones Achieved & Road Ahead

Achievements Till Date Expected Milestones

Year 0-1 Year 1-2 Year 2-3

DCGI Approval for Phase III Trials for

RNAi based products

18,000 sq.ft. R&D setup at Mumbai

Acquired 5 acres of land for the new

manufacturing plant

More than US$ 10 mn invested by PKI

in the current pipeline

Govt. Permissions/R&

D Plant setup

Production & Approvals for RNAi based

products

Licensing/Sale of RNAi

based products

(First Exit)

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Key Focus Areas for Growth

Key Focus areas for Project

Koeing

Create the planned Pilot manufacturing

plant at Khopoli

Complete the ongoing

development of the current product

pipeline on schedule

Focus on acquiring new

technologies /products to

maintain a strong product pipeline

Currently, Project Koeing requires US$ 30 mn to pursue its growth strategy, which primarily includes continuing development activities for its four key products and bring them to conclusion

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Project Wise Fund Requirement

The total fund requirement of US$ 30 mn is split across all the four key technologies/products with the Manufacturing and RNAi based products garnering the majority shares

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Prospective Clients Upon Product Maturity

Project Koeing has a large potential client base upon the maturity of its products/technologies

Typical Exit

Revenue generation at PKI will take place at the exit of a product/technology, which will most likely take place in form of the licensing out of the technology/product once it is ready for commercialization

A typical licensing deal includes an upfront payment to the technology owner and royalties/periodic payments over next 10-15 years

There could also be a sale of the technology/product for a large lump sum payment

Potential Collaborators

All the major pharma companies in the world are prospective clients for Project Koeing, especially the ones doing significant research on cancer related drugs. Some such companies include Roche, GSK, Pfizer, J&J etc

Also, other companies such as UB Group, Shaw Wallace etc are also potential clients as they use fermentation technology as a basis of their operations

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Biotechnology: The Next Sunshine Sector

The Global Biotechnology Sector

The global biotechnology industry is over 30 years old and is generating almost US$ 100 bn in revenues. There are appr. 7,000 companies worldwide, less than 600 of which are public companies

There has also been a significant support from the Governments, given that almost US$ 150 bn worth Govt. funding has been granted to this sector

In last decade, the industry has made historic progress with strong product pipelines and product successes, record-breaking financing totals, unprecedented deal activity and impressive financial results. Further, according to an E&Y report, all the leading regions in the world have been recording a strong double digit growth

The sector is now beginning to understand disease 'globally' i.e., from a systems point of view, from gene or SNP to protein to networks to disease. In parallel, and conversely, the notion of 'one size fits all' is being replaced by medicine targeting the individual and the central tenet on which a huge biopharmaceutical industry has been built has to adjust to a new and evolving personalized medicine world

The Indian Biotechnology Sector

The Biotechnology sector in India, although nascent at the present time and accounting for a mere 2% of the global Biotechnology market, is poised for exponential growth over the next 5 years with an expected global market share of 10%

The total revenues of this sector stand at around US$ 1 bn. With a market cap of around US$ 2.5 bn.

The Indian biotechnology industry is gathering momentum, by leveraging its low cost scientific skill base in an imitative manner with which to build its capPK USlities

Today, the Indian biotech sector has attained critical mass in manufacturing as well as research services and has slowly built a market for biotech products and services Indian Biotechnology is now poised to leverage its scientific skills and technical experience to make a global impact on a strong innovation led platform

A vibrant pharmaceutical industry, and fast developing clinical capPK USlities collectively points to a promising biotechnology sector and has placed India favourably in the global market.

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Global Pharma Companies Focus on R&D

RANK COMPANY R&D SPEND (US$ BN.) As of March 2008

AS A %AGE OF SALES As of March 2008

1 Pfizer 7.59 16.2%

2 Johnson & Johnson 7.12 13.3%

3 GlaxoSmithKline 6.91 14.9%

4 Sanofi-Aventis 6.02 15.6%

5 Roche 5.40 15.7%

6 Novartis 5.39 15.0%

7 Merck & Co 4.78 21.1%

8 Abbott 4.27 19.0%

9 Astra Zeneca 3.90 14.7%

10 Amgen 3.37 24.3%

Global Pharma companies are increasingly spending more money on their R&D efforts, which indicates the significant focus from their end on developing new drugs and technologies. As a result, these companies

have also been partnering with Biotech companies to fulfill their need for new drug discovery & development through various means

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Deal Activity in Biotechnology Sector

Companies Deal Value (US$ bn.)

Novartis & Chiron 5.1

Pfizer & Vicuron 1.9

GSK & ID Biomedical 1.4

Companies Deal Value (US$ bn.)

Amgen & Immunex 16.0

Biogen & Idec 3.7

Amgen & Abgenix 2.2

Shire & TKT 1.6

OSI & Eyetech 0.9

Quest & LabOne 0.9

Pharma – Biotech Transactions Biotech – Biotech Transactions

There has been significant deal activity in the Biotech sector in the past few years, indicating the various synergistic values both Pharma & Biotech companies are recognizing between themselves