1. New Technologies: the Role of the Private Sector Biotech’s Perspectives on Vaccine Development Alliances Peter Young CEO, AlphaVax, Inc.

2. Biotechnology Definition

3. Biotechnology Model P=p(novel science) x p(new, under-resourced organization) x unrealistic development timeline & $

4. Market incentives motivate the market… R =R = I = sales – cost = profit R&D, manufacturing capacity $

5. The Valley of Death Discovery Preclinical Phase IPhase IIPhase III BLAApproval development Scale-up GMP Manufacture Commercial Manufacture

6. Nasdaq Biotech Index Performance

7. NIH HIV/AIDS & Biodefense Research Funding HIV/AIDS Biodefense

8. Benefits from Development Alliances Scientific validation Financial leverage –Product & process development –Clinical trial costs Development leverage –Product specific –Technology characterization Proof of principle Pipeline –Shots on goal –Government procurement commitments/APCs –Commercial potential?

9. Trade-offs & Risks Intellectual property Pricing Opportunity Cost Non-commercial pipeline Development inefficiencies

10. AlphaVax Profile 8 years old 69 people 30,000 sq ft BL-3 lab facility 5,000 sq ft Bl-3 GMP facility Partnerships with Wyeth, Progenics Technology: –Novel, complex proprietary vaccine platform –UNC/USAMRIID roots –Advanced to clinical stage: Manufacturing process Regulatory profile Safe & immunogenic in man –Multiple product applications

11. Full-length alphavirus RNA Capsid/Envelope genes - 3’ Non-structural genes Replicon and helpers are introduced into certified VERO cells by electroporation VRP vaccine particles harvested after 18-24 hours incubation Single-cycle vaccine particles, containing the replicon RNA, target dendritic cells in vivo 5’- Foreign gene Self-replicating mRNA or “replicon” Helper function Alphavaccine Platform System (in Transfected WHO Vero Cells)

12. Alphavaccine Platform System B T Dendritic Cell Lymph Node Robust Target Antigen Expression VRP B T B T B T B T Direct targeting of lymph TTT Antibody Response (Humoral Immunity) T - Cell Response (Cellular Immunity) Target Viruses, Bacteria, Tumors BB TT Robust Target Antigen Expression BB TT BB TT BB TT BB TT TT TT TT nodes and dendritic cells

13. AlphaVax Product Development Alliances ProgramGoal $ HIVPh I single gene prototype(IAVI)10.5 Ph I single gene prototype(NIAID)24.5 Ph I/II multi-gene vaccine candidate Biodefense (NIAID) Marburg virusPreclinical proof of principle & GMP 6.5 Encephalomyelitis virusesPreclinical proof of principle & GMP 7.5 Botulinum toxinsPh I bivalent vaccine 9.1 SmallpoxPreclinical proof of principle 3.3 SARSPreclinical proof of principle & GMP 4.8 InfluenzaPh I/Ph II challenge 6.5

14. AlphaVax Funding Profile

15. Product Pipeline Preclinical/MfgPhase IPhase IIPhase III

16. Issues & Trade-offs Proprietary sensitivities & IP risk Pricing risks Commercial opportunity & opportunity cost Goldfish bowl Decision autonomy & efficiency “Partner syndrome” Pace Development by committee

17. Market incentives motivate the market… R =R = I = sales – cost = profit R&D, manufacturing capacity $ Push Pull

18. Market incentives motivate the market… R I As the financial and strategic benefits decline, the significance of opportunity cost and incremental risk rises = 0

19. The Biotechnology Opportunity Breakthrough science –Genomics –Molecular biology –Immunology Maturing industry Challenges: use pricing & intellectual property to reconcile ROI and access Mission: –Create the impossible –Change reality