1. Building the Biotechnology Sector in Houston Introduction Houston Biotechnology Atmosphere Why so few companies? Possible solutions

2. Building the Biotechnology Sector in Houston Introduction Houston Biotechnology Atmosphere Why so few companies? Possible solutions

3. Building the Biotechnology Sector in Houston Introduction Houston Biotechnology Atmosphere Why so few companies? Possible solutions

5. BioHouston Background Non-profit 501(c)3 founded by Houston-area research institutions to develop the Houston region – defined as College Station, to The Woodlands, to Galveston Northcut Mendelsohn Gillis

6. Regional Research Strength from College Station to Galveston Texas Medical Center –Largest medical center in the world; 42+ member institutions –$2.1 billion spent for additions to facilities from 2002-2004 –800+ acres; 100+ permanent buildings –Ground broken for The University of Texas Research Park Texas A&M University-College Station –Ranked 11 th by NSF for total research and development expenditures –5,200+ acres, including a 324-acre research park –2.5M+ square feet of research space University of Texas Medical Branch-Galveston –Ranked 19 th of 121 medical schools in NIH funding –84 acres; 77 major buildings –385k+ square feet of research space  Massive but under-recognized research and commercialization assets

8. Leading Medical Institutions in the U.S. World Class Research Institutions Baylor College of Medicine #1 in Pediatric Research funding-NIH (with TCH) #11 in NIH Awards to Med Schools-NIH #13 Research Intensive Medical Schools The University of Texas M. D. Anderson Cancer Center #1 in Oncology #5 in Gynecology #10 in Urology #10 in Ear, Nose and Throat #10 in Rehabilitation The University of Texas Medical Branch 1 of 2 Infectious Disease and Biodefense National Laboratories 1 of 6 Regional Centers of Excellence for Biodefense #19 in NIH Awards to Med Schools-NIH Methodist Hospital #10 in Neurology and Neurosurgery #17 in Cardiology and Cardiac Surgery Rice University #1 in Nanotechnology Commercialization The University of Texas Health Science Center School of Public Health #1 in Health Education Texas Children’s Hospital #1 in Pediatric Research funding-NIH (with BCM) #4 in Pediatrics Texas Heart Institute #9 in Cardiology and Cardiac Surgery University of Houston #2 in Health Law Source: U.S. News and World Report, 2004, NIH database, Small Times

9. Other Selected Centers of Excellence Gulf Coast Consortium for Bioinformatics Gulf Coast Center for Computational Cancer Research John S. Dunn, Se. GCC for Chemical Genomics John S. Dunn, Sr. GCC For Magnetic Resonance Gulf Coast Consortium for Membrane Biology Gulf Coast Consortium for Protein Crystallography Gulf Coast Consortium for Theoretical and Computational Neuroscience Gulf Coast Consortium for Bioinformatics Gulf Coast Center for Computational Cancer Research John S. Dunn, Se. GCC for Chemical Genomics John S. Dunn, Sr. GCC For Magnetic Resonance Gulf Coast Consortium for Membrane Biology Gulf Coast Consortium for Protein Crystallography Gulf Coast Consortium for Theoretical and Computational Neuroscience Brown Foundation Institute for Molecular Medicine

10. Source: Battelle Memorial Institute and the State Science and Technology Institute study Research Leadership Historical firsts: –First multiple organ transplant –First identification of C 60 –First draft of the human genome –One of two National Biocontainment Labs –First artificial artery –First successfully cloned companion animal –First total heart transplant National Recognition: –Three Nobel laureates –16 members of the National Academy of Sciences –Two Presidential Advisors –Hundreds of members of national academies Next Generation of Leaders: –#2 in higher education degrees in bioscience –#3 for university expenditures in biosciences –22,000+ biomedical students in the Texas Medical Center

11. Houston region highlights Total annual academic research investments exceed $1.5 billion 140+ life science companies Number of companies has doubled since 2003 Approximately 1/3 are therapeutic, 1/3 are device and 1/3 are tools and service providers Recent VC investment activity in region

12. Best Biotech Fields for Houston to Grow Oncology Neuroscience Metabolic Diseases Biodefense / Infectious Disease Cardiovascular Medicine Genomics Genetics Nanotechnology

13. Texas Emerging Technology Fund Initiated in 2005. $175 million in funds available $52.9 million in total statewide life science grants have been awarded or are currently under final review by State leadership 9 Houston region life science companies have received grants for $10.1 million since inception Texas Life Science Committee conducts extensive due diligence (business/science/IP) on technologies and companies before forwarding to leadership for final approvals

14. $3 Billion Cancer Research Initiative Approved in November 2007 Established Cancer Prevention and Research Institute of Texas Peer reviewed distribution of up to $300 mm in grants per year over next decade Every $1 invested will require $0.50 in matching spending by recipient organizations Public and private educational institutions and medical research facilities will be eligible for grants First investment expected in 2009

15. Tanox A 20-year and $919 Million Journey to Success

16. The Houston region is home to the 2 largest IPO’s in biotech history: –Tanox: Acquired by Genentech for $919 million in 2007 –Lexicon Pharmaceuticals: Ten products in clinical pipeline Also… –Agennix: Developing drugs for cancer and diabetic ulcers; in late-stage trials for NSCLC –Cyberonics: VNSTherapy for epilepsy and depression –Introgen Therapeutics: In late-stage development of ADVEXIN to treat head and neck cancer –Repros Therapeutics: Lead drug Proeelex; IND will be submitted to initiate Phase 3 trials for Uterine Fibroid indications Snapshot of Success Introgen

18. Texas Life Science Conference Largest investment conference in Southwestern U.S. 2007 Conference –More than $6 billion in current funds in attendance –50+ company presentations –Record attendance –Texas Governor Rick Perry addressed meeting 2008 Conference will be held November 5-7

19. Why Houston? “Nowhere in the country is there such research infrastructure, scientific leadership, and patient numbers in such close proximity.”

20. Building the Biotechnology Sector in Houston Introduction Houston Biotechnology Atmosphere Why so few companies? Possible solutions

21. Why so few companies? Everybody wants to be “the next San Diego”. Institutions doing more development. Easier to export ideas and talent. Lack of experienced management. No soft landing for failures. Insufficient informed Venture Capital. Unfamiliar value proposition.

22. Building the Biotechnology Sector in Houston Introduction Houston Biotechnology Atmosphere Why so few companies? Possible solutions

23. Support pump priming efforts Insist on regional cooperation Strategic recruiting Monitor the ETF and CPRIT $ Philanthropic investments