1. Commercialization of Ossabaw Swine for Biomedical Research Yingkai Cheng Jessie Lu Jeff Fill Robbie Singh Ziqing Liu Tom West February 23, 2011

2. Objective & Short-term Goal Project Objective: Demonstrate that Ossabaw Swine research is a viable model being based in the University and as a commercialized venture Short-term Goal: Demonstrate viability of the Ossabaw Swine Resource Center by: Demonstrating the advantage of using Ossabaws in research Proposing implementation of a Tiered Fee Schedule

3. Improving Revenues in Short-term Currently Revenues< Costs Price increases on contract studies & swine sales Internal Studies (Indiana’s universities): 11% price increase External Studies (all others): 17.5% price increase Additional Services * Imaging Studies (CT, MRI) * Organ/ Tissue/ Other Parts $75.00 + Service Fees

4. Long-term Goals Long-term Goal: Prepare a value proposition to commercialize / license sale of Ossabaw swines to a prospective vendor The path to commercialization will: Maintain solvency of the Ossabaw Swine Resource Optimize available funding options Respect required University procedures Suggest marketing & promotional avenues Establish milestones for funding and strategic initiatives

5. Market Segmentation 50% 39% 9% 2% Source: PubMed keyword search: breed + miniature swine

6. Why use Ossabaw Swines? CharacteristicYucatan (Yuc)Ossabaw (Oss) ObesityNoOss > Yuc Insulin resistanceNoYes Glucose intolerance (IGT)NoYes Dyslipidemia ( ↑ LDL/HDL)Yes Dyslipidemia ( ↑ triglycerides)NoYes HypertensionNoYes * Metabolic syndrome model * Exercise physiology * Percutanous catheterization, stents * Xenotransplantation * Cutaneous wound healing * Polycystic ovary syndrome * Neonatology *Lithotripsy treatment of kidney stones * Endothelial progenitor cell biology * Alzheimer’s disease * Cardiovascular disease model * Kidney function and disease * Dietary probiotics * Electrical stimulation of gastrointestinal tract * Bladder function and disease * Pancreatic beta cell function and isolation * Non-alcoholic steatohepatitis * Adrenal hormone regulation * Diffuse idiopathic skeletal hyperostosis * Vocal cord physiology Uses of Ossabaw Swine for Translational Research

7. Path to Commercialization Negotiation with Exemplar Revenues 2011-1420152016-17 Phase 1Phase 2Phase 3Phase 4 Address CTSI Member Concerns IU / Purdue IRBs Implementation 2014 Joint Operations Ossabaw Swine Resource

8. Commercialization Plan Inflection Points R&D Partnership with Exemplar Genetics Royalties and milestone payments Transgenic & gene knock-out capabilities Continued research at Ossabaw Resource Upfront licensing fee Milestone payments 1% royalty on sales Profits split: 55%: Ossabaw Resource 45%: Exemplar Genetics Commercialization Plan

9. Costs & Considerations Ossabaw Swine Resource: Pays 50% to Purdue Milestones: $2.25 M Royalties: $8.1 M 55% Revenue: $23.3M Total cost: $2.3 M NPV: $1.3 M (best) NPV: $0.385 M (worst) ROI: 28.7% Ossabaw Swine Resource: Revenue Growth Increase Market Visibility Conferences Clients’ publications Ossabaw website LARC at IUSM Exemplar Genetics Costs Milestone payments Signing: $1 million (M) Year 6: $0.5 M Year 12:$0.75 M Royalties Paid: 1% Total cost: $1.94 M NPV: $655,933 (best) NPV: $55,000 (worst) ROI: 21.2% 2011-142015-30 Phase 1-2 Phase 3-4

10. NPV Summary for Exemplar Assumptions: Price growth rate is in accordance with hypothetical US inflation rate, plus annual price growth rate Between current & new clients, achieve 10% market share Annual price growth keeps pace with inflation plus price growth rate (7%); in 2020 when transgenics / knockout models developed, mark-up is 25% Discount rate= 30%

11. NPV Summary for Ossabaw Swine Resource

12. Recommendations 2011-14: Increase Revenues by expanding client base Market Ossabaws to Universities & Life Science companies in Indiana Increase National visibility through conferences, journals, Website: http://physiology.medicine.iu.edu/people-in-physiology/michael- sturek-ph-d/#ossabaw-miniature-swine http://physiology.medicine.iu.edu/people-in-physiology/michael- sturek-ph-d/#ossabaw-miniature-swine Adopt the proposed tiered pricing system for internal & external clients

13. Recommendations cont’d. 2015: Form R&D Partnership with Exemplar Genetics (Iowa) Exemplar Genetics provides desired expertise in transgenic & knock-out models An R&D partnership allows Ossabaw Swine Resource to continue their research work

14. Thank You! Questions?