CFO Track John Lawson & Pierre Bourassa

Traditional Drug Development process

Risk vs. valuation correlation Source: MDS

What does Big Pharma seek? Retain a good investment infrastructure  Agreements on market access & price  Flexible competitive worker costs  International respect for patents  Growth in healthcare spending Regulatory alignment with FDA  Parallel approval systems  Acceptability of Canadian data  Similar ethnic/genetic profile to Maintain integrated healthcare system  Strong primary/secondary care links  Access for strong Canadian CROs  Low propensity towards litigation Encouragement to do large clinical trials  They generate income  They reduce drug costs  They give access to newer therapies Economic production facilities for biologics  25% of drug pipelines involve biologics  Grow expertise in adding IP to processes  Provide facilities for bio-manufacturing Encourage research to replenish pipelines  Fund basic & pre-clinical research  Expand enabling technologies (genomics)  Stimulate convergence of expertise Move core activities along drug cycle  Foster clinical expertise  Incentivise professionals not to migrate  Share in global sales successes Nurture SME spin-offs  Provide core university/institute funding  Support a stable Canadian VC structure  Provide attractive R&D credits Bourassa & Lawson 2007

Key Success Factors for SMEs Stay focused  Investors want to see steady linear progress  Product valuation triples from Phase II to III  Drug/market complexity increases competitive barriers Understand your true worth  Market ‘need’ is more important than its current size  Drug companies have declining pipelines  Value increases in areas of unmet medical need Assure the integrity of your IP  Look for, and cover, potential loopholes in patents  Perform good searches of competitors/channels  Consider bio-production to add/extend protection Consider niche or limited applications  Orphan drugs may be fast tracked  Move further along value chain in small segments  Consider niche global markets with few KOLs Time is of the essence  Every day is worth an average $1 million in sales  Get adequate early funding, return visits waste time  Quick results bring investor credibility Speak to Big Pharma early  Adequately protect your conversations  Use enabling technologies (eg. genomics) where possible  Stimulate convergence of expertise (local clusters) Bourassa & Lawson 2007

Today’s panelists Bertrand Bolduc, President & CEO Mistral Pharma Adam Buckley, VP Variation Biotech Jean Paul Castaigne, CEO Angiochem Monique Letourneau, CFO Ambrilia