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Stonehill College he Leader in Ocular Drug Delivery Stories in Entrepreneurial Finance Stephen From, President and CEO EyeGate Pharma November 29, 2011

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Stories in Entrepreneurial Finance. Stephen From, President and CEO EyeGate Pharma. November 29, 2011. Table of Contents. Background on myself EyeGate summary overview Funding an Opportunity Wrap-up. Who Am I?. Stephen From President & Chief Executive Officer. - PowerPoint PPT Presentation

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Page 1: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Stories in Entrepreneurial Finance

Stephen From, President and CEO EyeGate Pharma

November 29, 2011

Page 2: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Table of Contents

Background on myself

EyeGate summary overview

Funding an Opportunity

Wrap-up

Page 3: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Who Am I?

3

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

Page 4: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Table of Contents

Background on myself

EyeGate summary overview

Funding an Opportunity

Wrap-up

Page 5: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Company Mission

5

Eliminate Two Major Issues Currently Faced by Eye Care Practitioners

ISSUE #1

PATIENT NON-COMPLIANCE

ISSUE #2

LOW PATIENT THROUGHPUT

Page 6: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

EyeGate® II Delivery System

6

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

Eliminates the Issues of Patient Compliance and Patient Throughput while Decreasing Safety Risks

Page 7: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Corporate Overview

7

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

Page 8: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Investment Highlights

8

EyeGate’s Approach

Enhances Both the Patient’s and Doctor’s

Treatment Experience

Lead Product Candidate,

EGP-437 is a Late Stage Asset with Multiple

Indications – Anterior

Uveitis, Dry Eye, and Scleritis

Significant Market, Global

Uveitis Therapeutics

Market is Expected to Grow at 26% Annually to

$1.6B by 20171EyeGate® II

Delivery System is a Proprietary, Non-invasive and Versatile Drug Delivery

System

Compelling and Cost Efficient

Business Model with a Defined

Path to Reimbursemen

t

Strong IP Portfolio with

Protection Lasting through to 2029 without

Extension

Source: 1. Uveitis Therapeutics – Pipeline Assessment and Market Forecasts to 2017, Global Data, April 1, 2011

Page 9: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Initial Business Strategy and EGP-437

9

Fast

Initially Reformulating

Generics to Validate 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

Page 10: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Peak Year Sales Potential

10

EGP-437 has potential to achieve annual peak revenue of approximately $340 million in the U.S. and $200 million in ROW

($ in mil lions)

Condition

U.S. Market Size

(In 000s) EyeGate Target Patient Profile

EyeGate Target Population (In 000s)

Estimated Annual Peak

Sales

Anterior Uveitis 200 Frequent Outbreaks 80 $60

Dry Eye Syndrome 9,500 Induction Period and Severe (i.e. Sjrogens) 500 $130

Scleritis 45 Total Population 35 $25

Corneal Graft Rejection 400 Active Graft Rejection 40 $30

Cataract Surgery 3,000 Premium IOL's (multifocal) 380 $95

TOTAL $340

Page 11: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Ownership

11

Ventech, 48.6%

Innoven, 17.1%

NEP, 4.2%

Medicis, 3.1%

Nexus, 3.1%

Other, 9.0%

Options and warrants,

14.9%

Raised $55.4 million EyeGate’s ownership on a fully diluted basis, assuming all options granted and

exercised and all warrants exercised illustrated below:

Page 12: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Table of Contents

Background on myself

EyeGate summary overview

Funding an Opportunity

Wrap-up

Page 13: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

13

Communicating to target audience

• Friends & Family• Angel investors• Venture capitalists• Strategic investors• Institutional investors

Page 14: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

14

Mission Statement

PURPOSE

Who Cares?

Page 15: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

15

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!

Page 16: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

16

Mission Statement

• pSivida is a leader in the development of miniaturized, injectable, drug delivery systems.

Who Cares?

2 steps away from answering question

Page 17: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

17

Mission Statementfocused 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.

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.

General!!

Who cares??

Page 18: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

18

Mission Statement

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

Who cares??

developing therapeutics designed to address two major issues in the ophthalmic space, patient compliance and patient throughput.

1 step away from answering question

Page 19: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

19

Mission StatementOrganize the world’s information and make it universally accessible and useful.

GOOGLE

Page 20: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

So you have an idea!!!

20

Mission StatementCommitted to bringing the best user experience to its customers through its innovative hardware, software, peripherals, and services.

APPLE

Page 21: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Moving Forward

21

Business plan and executive summary• Tells a story

• Problem > your solution• Market opportunity• Key investment highlights

Page 22: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Cash

22

Sources of cash• Revenue

• Non-dilutive• Debt

• Non-dilutive and/or dilutive• Equity

• Dilutive• Strategic partnership

• Non-dilutive and/or dilutive

Page 23: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery23

….figure out what you want to be when you grow up

VC’s

…..understand who you are and

Page 24: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery24

Realizing ROI requires exit

• IPO?• M&A?

The exit path will influence valuation and deal terms

VC’s

Friday.

                                                                                                                                                               

Ten-Year Venture Capital Returns Continue To Slide

Creating Value

Page 25: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

VC’s

25

ValuationWhat value are you willing to

accept????Valuation

• Multiple• ROI• Comparable company analysis• Net present value

Page 26: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

VC’s

26

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

Page 27: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

VC’s

27

Board seat• Alignment between investor and mngt• Exit: IPO vs M&A• Stand-alone or integrated

Page 28: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Table of Contents

Background on myself

EyeGate summary overview

Funding an Opportunity

Wrap-up

Page 29: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Success?

29

Characteristics required???• Fear of failure• Drive or ambition• Curiosity • Desire for learning• Discipline – tenacity• Diplomacy• Leader• Belief

Page 30: Stories in Entrepreneurial Finance

Stonehill CollegeThe Leader in Ocular Drug Delivery

Stories in Entrepreneurial Finance

Stephen From, President and CEO EyeGate Pharma

November 29, 2011