1. SOLVING THE GLOBAL MEDICAL CRISIS THROUGH SOCIAL FINANCING Rediscovery Research Social Impact Bonds First Friday Networking Group August 1, 2014 Dr. Bruce Bloom President and Chief Science Officer

2. GLOBAL MEDICAL CRISIS 7000 diseases worldwide with no currently effective therapy Impacts 50,000,000+ people in developed countries with significant healthcare costs New Discovery Research only creates about 30-40 new drugs per year 20% prescriptions off label 2

3. PHARMA SOLUTION 3

4. Current Solution 250 large Pharma/1000 small 2500 Biotechs 2.3 M employees $120B R&D $1.4T in drug costs 1/10,000 success rate 4

5. REDISCOVERY RESEARCH SOLUTION 5

6. 6 Rediscovery Research™ Reusing available science and medicine to quickly, safely and affordably create patient impact

7. Rediscovery Research Projects 1.Take a single drug, nutriceutical or device already approved for one disease and create a “repurposed” use in a second disease 2.Combine generic drugs with proprietary drugs to help the proprietary drug work for more patients for a longer period of time 3.Combine a generic drug with a non-drug treatment to improve patient outcomes 4.Add to or alter existing treatment protocols to improve patient outcomes 5.Test observations and other successes from clinical practice, including integrative medicine 7

8. Why Rediscovery Research More affordable and safer research $500K v $1.5B 3 years v 15 years 1000s of repurposing possibilities Greater success 1/10 v 1/10,000 Faster from idea to patient use Single clinical trial Off label prescribing Treatments safe and easy to take 8

9. REDISCOVERY RESEARCH SIB SOLUTION 9

10. Why Rediscovery Research SIB Provides Rediscovery Research with economic incentives Often significantly reduces healthcare costs for both patients and payers Lower payments for government and other sponsored healthcare programs Lower patient out-of-pocket expense Improved patient outcomes 10

11. Social Finance Any financial investment method that intentionally delivers both a social dividend and an economic return. 11

12. Type of Social Financing 1.Social impact bonds 2.Community investing 3.Microfinance 4.Social enterprise lending and 5.Outcome-based philanthropic grant making 6.Program-related investments 7.Venture philanthropy 12

13. Social Finance Opportunities Better health Lower healthcare costs Reduced recidivism Reduction in homelessness Increase in educational levels Non-violent resolution of gang disagreements Less drug use among teenagers 13

14. Why Social Finance? 1.For-profit or non-profit organizations are not creating enough social return using the capitalism or philanthropy models, and 2.The government is not able or willing to raise the taxpayer funds to create the social impact or has been unable to create the social return through existing programs 14

15. The Social Impact Bond A Social Impact Bond ( SIB ) is an arrangement between one or more “pay for success” guarantors and an external organization, called a Social Impact Bonding Organization ( SIBO ). 15

16. The Social Impact Bond The “pay for success” guarantor specifies a social outcome/social return it desires and promises to pay the SIBO a pre-agreed sum if the SIBO is able to accomplish the social outcome/social return. 16

17. The Social Impact Bond The SIBO then solicits private investors to provide the necessary upfront capital to the SIBO so that the SIBO can select and pay service providers to perform the required services to achieve the social outcome. 17

18. The Social Impact Bond The investors agree to provide this funding in exchange for a potential share of the government payments, if and when the social outcome/social return performance targets are met. 18

19. Social Impact Bond Benefits Attract new forms of capital Gov’t only pays for effective services Shift $ risks from gov’t to investors Incentive for service provider to be effective Opportunity for greater and more vigorous ongoing evaluation Independent evaluation creates transparency 19

20. Social Finance Opportunities In Rediscovery Research Pay for Success Guarantors Government Payers-Medicare, Medicaid, VA, Exchanges Private Insurance Payers Self-Insureds-Corporations, Pension plans Hospitals NPO Funders SIBOs Cures Within Reach Social Finance US Instiglio McKinsey 20

21. Social Finance Opportunities In Rediscovery Research Service Providers Academic medical centers Biotech Pharma Investors Could be PFC Guarantors JP Morgan D Capital Third Sector Capital Partners Finance For Good 21

22. Social Impact Bond 22 Investors Cures Within Reach Gov’t or other payer Repurposing Clinical Trials Improved lives Lower costs Social Impact Bond Pays Investors provide Rediscovery Research funding Investors receive return CWR finds and manages Rediscovery Research Cost savings meets payer’s goals Investors fund more Rediscovery Research

23. ROI from Rediscovery Research Cost Savings Autoimmune Lymphoproliferative Syndrome -CWR researcher repurposes the drug sirolimus -Alleviates symptoms of fatal disease <60 days -Research cost <$250,000, takes < 3 years -New treatment saves $100K/patient/year -600 patients could be using this off-label -Up to $60M in annual healthcare cost savings 23

24. Generic vs. Proprietary Example Generic Drug Repurposing-Nutriceuticals for Familial Dysautonomia - 6 years of research cost $1.2M - 5 daily oral nutriceutical treatments costing <$200/month - $60,000 average cost SAVINGS/patient/year 24 Proprietary Drug Creation-Enzyme Replacement for Gaucher’s Disease - 10+ years of research, much of it funded by the US government, cost >$100 M - IV admin 2 hrs every 2 weeks costing $300,000/year - $250,000 average cost INCREASE/patient/year

25. Generic Drug Rediscovery Research SIB Calculator 25

26. Current Development of Rediscovery Research SIB Early discussions with US VA Early discussion with hospitals Discussions with British gov’t Discussions with Israeli gov’t Discussion with Social Finance US Forming RRSIB Advisory Board 26

27. Questions & Answers Contact: Dr. Bruce E. Bloom 847-745-1245 Bruce@cureswithinreach.org www.cureswithinreach.org 27