1. The Development and Commercialization of New Technologies Discovery Lecture Series Purdue University Ted T. Ashburn, MD, PhD Senior Director, Corporate Development Genzyme Corporation ted.ashburn@genzyme.com November 9, 2007

2. © 2007 Genzyme Corporation. All rights reserved. 1 Outline 1.Stages of Development for New Medicines 2.Genzyme Deal Criteria 3.4 Things Every Start-Up Must Get Right 4.Key Takeaways

3. © 2007 Genzyme Corporation. All rights reserved. 2 1. The Pharmaceutical Value Chain Ashburn & Thor, Nature Reviews Drug Discovery, Aug, 2004, pg 673-683 Gilbert, Henske & Singh, IN VIVO, Nov, 2003 10-17 years, $1.7 billion+ process > 75 different disciplines < 10% overall probability of success once a candidate enters clinical trials!!! Idea!Drug Testing starts at Phase I (Phase I/II for cancer) In vitro Ex vivo In vivo In silico High throughput Bioavailability Systemic exposure Traditional Med. Chem. Rational drug design Target Discovery & Screening Lead Optim. ADMET Clinical Develop. Regis- tration. 2-3 yr0.5-1 yr1-3 yr1-2 yr5-6 yr1-2 yr U.S (FDA) E.U. (EMEA) Japan (MHLW) Rest of World Expression analysis In vitro function In vivo validation Bioinformatics

4. © 2007 Genzyme Corporation. All rights reserved. 3 2. Genzyme Deal Criteria  Significant Unmet Medical Need –Rare diseases –New Standard of Care  Risk-reduced Opportunities –Human Proof of Concept or later –Clear Regulatory pathways  Focused Call Point(s) –Not PCP’s  Partnerships –Desire to work together to create value –Both Regional and worldwide Idea!Drug Testing starts at Phase I (Phase I/II for cancer) In vitro Ex vivo In vivo In silico High throughput Bioavailability Systemic exposure Traditional Med. Chem. Rational drug design Target Discovery & Screening Lead Optim. ADMET Clinical Develop. Regis- tration. 2-3 yr0.5-1 yr1-3 yr1-2 yr5-6 yr1-2 yr U.S (FDA) E.U. (EMEA) Japan (MHLW) Rest of World Expression analysis In vitro function In vivo validation Bioinformatics

5. © 2007 Genzyme Corporation. All rights reserved. 4 3. 4 Things Every Start-Up Must Get Right 1.Technology 2.Strategy 3.Team 4.Money

6. © 2007 Genzyme Corporation. All rights reserved. 5 1. Technology: Introduction  Either fills a current need (pain or greed) or creates a new market  VC’s like technologies that make you say Wow!  New technologies fall into 3 buckets: 1.“Wow! Let’s build a company around this technology!” 2.“Interesting, you should try to license it to Big Rx or one of our portfolio companies” 3.“Thanks for coming in to see us today”

7. © 2007 Genzyme Corporation. All rights reserved. 6 1. Technology: Patent Requirements  New or Novel: Two part test (US) –Cannot have been known, used or described by others –Must not have been known more than one year prior to filing the U.S. patent  Useful –In-vitro/vivo test results proving potential for human application  Non-obvious –Prove the invention is something more than an ordinary practioner in the field would have been able to do

8. © 2007 Genzyme Corporation. All rights reserved. 7 1.Technology: Intellectual Property  Issued patent allows you to exclude others from selling your invention (Barriers to Entry) –Composition of Matter (COM) –Method of Use (MOU)  Do you have the ability to sell your invention without infringing someone else's patent (Freedom to Operate)?  Key safety tip: Don’t disclose until you file!

9. © 2007 Genzyme Corporation. All rights reserved. 8 Repositioning Reformulating In Licensing De Novo Small Markets* For example, rare diseases or diseases primarily incident in developing nations; government regulations have been enacted to reduce risk and/or raise potential reward for some small markets, e.g., orphan drug status Ashburn & Thor, Nature Reviews Drug Discovery, Aug, 2004, pg 673-683 Proteins Risk (  Target Validity, Druglike Properties & the Development Pathway) Reward (  Time to Market, Differentiability & Revenue) Low Hi Low 2. Strategy: Risk vs. Reward Trade Offs

10. © 2007 Genzyme Corporation. All rights reserved. 9 2. Strategy: Drug Repositioning Ashburn & Thor, Nature Reviews Drug Discovery, Aug, 2004, pg 673-683 Idea!Drug Traditional Med. Chem. Rational drug design In vitro Ex vivo In vivo In silico High throughput U.S (FDA) E.U. (EMEA) Japan (MHLW) Rest of World Testing starts at Phase I (Phase I/II for cancer) Bioavailability Systemic exposure Target Discovery & Screening Lead Optim. ADMET Develop- ment Regis- tation. 2-3 yr0.5-1 yr1-3 yr1-2 yr5-6 yr1-2 yr Expression analysis In vitro function In vivo validation Bioinformatics 3-12 year process Reduced Safety & PK uncertainty Drug Licensing Novel I.P. Both Targeted searches Novel insights Specialized Screening platforms Serendipity May start at Preclinical, Phase I or Phase II Ability to leverage existing data packages AcquisitionIdentification 1–6 yr0–2 yr1–2 yr U.S (FDA) E.U. (EMEA) Japan (MHLW) Rest of World 1-2 yr Develop- ment Regis- tation.

11. © 2007 Genzyme Corporation. All rights reserved. 10  “Been there, done that,” a big plus  Leadership  VC’s want Wow! Leadership Teams 3. Team

12. © 2007 Genzyme Corporation. All rights reserved. 11 4. Money: Where & How Much?  Government –SBIR –STTR  Foundations  Corporations  Venture Capital  Must raise enough to reach next value step up and have 6-9 months of runway –Identification of a lead –I/POC/III/NDA/Launch  The higher quality the source, the better –VC’s want to be a part of Wow! syndicates

13. © 2007 Genzyme Corporation. All rights reserved. 12 4. Money: Midwest-Focused VC’s Teri F. Willey tfw@archdp.com Firm/MeetingContact Mina Patel Sooch mina@apjohnventures.com Scott R. Naisbitt, M.D., Ph.D. snaisbitt@rivervest.com Michael Janse mj@archventure.com www.investmidwestforum.com

14. © 2007 Genzyme Corporation. All rights reserved. 13 4. Key Takeaways 1.Drug discovery & development is a long, expensive & arduous process 2.The Industry is Hungry for Innovation 3.Every Start-Up must get 4 things right Technology Strategy People $

15. The Development and Commercialization of New Technologies Discovery Lecture Series Purdue University Ted T. Ashburn, MD, PhD Senior Director, Corporate Development Genzyme Corporation ted.ashburn@genzyme.com November 9, 2007