Commercialization of Cellular Therapies

Pharma & Biotech Growth Rates Have Been Declining Over The Last Decade Source: IMS Health 2008

Cellular therapy may provide the solution: >$50 billion/year market within 5 years to help address those huge unmet medical needs

What is Holding Back Industry Participation? Funding Challenge difficulty in fundraising by small companies government funding reduced large companies are investing modestly - high risk Fragmentation industry and IP highly fragmented Clinical Challenges clinical failures few randomized trials complex regulatory issues Commercial Challenges business model unfamiliar high COG medical tourism a negative factor

Timelines for Cellular Therapy Products Industry Development Stage Aggregate Industry Valuation Take-off Reality Irrational Exuberance Gestation Multiple $500M+ products launched Reassessment of industry viability First Press Coverage Multiple pre- clinical success Human trials failure 1000X 100X 10X 0 Source: Yahoo finance, NASDAQ, TFG Analysis RNAi Cell Therapy mAb’s Successful launch of $500M+ Product mAbs took nearly 20 years to successfully commercialize but now top 5 mAbs generated >$25B in 2008 Devyn Smith, 2009

Industry & Cellular Therapy: Summary Big Pharma slowly entering cellular therapy field Challenges to overcome: -industry & IP fragmentation -commercialization challenges Successful business model for cell-based therapy is dependent on -unmet need, -efficacy over standard of care -value to clinicians/payers, -scalability/COGS) with indication selection A successful business model may take another decade