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A Beacon VP
C Performance
D D People
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Beacon VP
B Process
B e a c o n VP C a p i t a l
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• Beacon VP translates evidence-based scientific research insights into practical biotech investments
• Backed by a research team of Harvard/MIT trained PhD’s and Post-Docs, Beacon VP identifies biotech investment ideas that help clients build portfolios to include drugs under FDA review
• Our philosophy is: "The business value of small to mid-cap life science companies depends on the underlying science of its drugs. We assess its safety and efficacy, then buy low and sell high“
• With a scientific priority, Beacon VP’s process explores every aspect of pre-market drug applications (i.e. clinical trial design, safety and risk assessment, and head-to-head drug comparison)
• In the past 3 years, our research methodology has predicted FDA approval decisions with a success rate of 80% on 37 drug applications
• 21 investment ideas shared on Seeking Alpha with 100,000+ reads
• In 2015, ranked as one of the top 100 experts by TipRanks.com
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FDA Pipeline Drugs
• 100 + drug applications received by the FDA each year
Qualify • 60 + potential targets meet our selection criteria and drug classes
Research
• 40 + unique investments each year • In-depth safety and efficacy analysis • In-depth head-to-head drug analysis
Meet • Evaluate relative attractiveness at final investment committee stage
Portfolio • 20 + investments each year • Monitor the portfolio for compliance with investment guidelines
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Analytical Method
Upcoming FDA events Research Framework Vetting Process Tactical Roadmap
Select key questions: • Do these drugs meet our criteria? • What factors do we consider? • Will the FDA approve the
analyzed drug? • What is the optimal
investment strategy?
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Strategy Z
Strategy Y
Beacon VP decision
Information availability
Drug FDA event
Drug A 2/1/2015 Drug B 2/15/2015 Drug C 3/1/2015 Drug D 3/15/2015 Drug E 4/1/2015 Drug F 4/15/2015 Drug G 5/1/2015 Drug H 5/15/2015 Drug I 6/1/2015 Drug J 6/15/2015 Drug K 7/1/2015
Key information evaluated
• Safety Data • Efficacy Data • Medical Indications & Size • Drug Classes • Drug Sectors • Proprietary Framework
Based on Collective Intelligence
Criteria-Based filtering
Investment strategy
Strategy X
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Portfolio Construction
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Portfolio
Portfolio
Standard NDAs
BLAs
Biotech Stocks
Biotech ETFs
Resubmissions
NME NDAs
Step 1 Equity/ETFs Allocation
Step 2 Allocation-Drug Classes
Step 3 Allocation-Risk Factors
Market Risk
Drug Class/Sector
Company Size
Information Risk
NME = New Molecular Entity BLA = Biologics License Application NDA = New Drug Application
Portfolio Construction • Limited to no more than 10% per position • 20% stop loss per position based on acquisition price • No single drug class > 30% except standard NDAs • No single drug sector > 20%
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Buy / Sell Process
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Buy Sell Hold – FDA Review
• Scientific foundation is attractive
• Clinical data is complete and transparent • Market opportunity is relative to the current treatments
• Target price has been achieved
• Investment thesis has been changed due to new scientific data • FDA event has occurred
Evaluating Sell Decisions to Refine Our Investing Approach Going Forward • Track performance of all investments sold • Reassess sell decisions to further understand our reasoning and the outcome • Validate of our investment philosophy and process
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Risk Management
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Enhanced risk-adjusted returns rely upon a combination of stock selection, option hedging and rigid sell discipline
Stock Selection • We only invest in stocks that have met our Beacon VP strict scientific criteria and have passed our disciplined review process
Option Hedging / Trading • We sell covered calls against portfolio positions to generate additional premium income • We buy put(s) for portfolio positions to protect against severe downturn • We trade NASDAQ Biotech ETF (IBB) when market conditions dictate • We employ 20% stop losses on portfolio positions to provide downside protection Sell Discipline • We are called away • We are stopped out • We determine that the investment position is no longer consistent with our Beacon VP stock selection standards
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Beacon VP Compared to Other Strategies
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Beacon VP
Believes that business value of micro, small to mid-cap life science companies will depend on the underlying science of their drugs
Focuses on scientific evaluation and transparency of clinical data
Provides a greater diversification advantage by deploying the FDA-event driven strategy that has a less direct correlation to markets
Active / Index Management
Allows major benchmarks to define their strategies or attempts to identify mispricing in securities
Relies on forecasting techniques to pick securities and/or time markets. Reduces flexibility if tethered to a benchmark
Has a more direct correlation to markets
Versus
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Our Drug Review Record
A Beacon VP
• Figures based on 37 drugs over 36 months.
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Drug Sector # of Drug Analyized Predictive Accuracy
Cardiovascular 5 40%
Endocrine 6 83%
Gastrointestinal 3 67%
Genetic 1 100%
Hematology 3 100%
Infectious Diseases 3 100%
Metabolic 2 100%
Nephrology 2 100%
Neurology 2 50%
Oncology 6 83%
Respiratory 2 100%
Rheumatology 2 50%
Grand Total 37 80%
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Number of Drugs Per Sector
Cardiovascular
Endocrine
Gastrointes6nal
Gene6c
Hematology
Infec6ousDiseases
Metabolic
Nephrology
Neurology
Oncology
Respiratory
Rheumatology
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Stock Recommendations
A Beacon VP
- - - Company was acquired by another firm.
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B Process
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Stock Recommendations
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https://www.tipranks.com/bloggers/beacon-vp-investments As of March, 2016 • Ranked 62th out of 4900 financial bloggers that Tipranks is tracking • Ranked 151th out of 8650 experts that Tipranks is tracking • Success Rate of 77% (where our recommendations were profitable) • Average Return of 60.9% per recommendation
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Management
Manager: Shaw Saw, CIA, CMA, CFM
• Founder of Beacon VP Consulting
• 10 Years of experience in corporate accounting
• Certified Internal Auditor & Management Accountant
• Harvard University Alumni
Manager: Raj Hazarika, MD
• Board certified physician
• Boston Consulting Group Alumni
• Assistant Professor at UMass Medical School and Medical Director
• Master’s degree in Epidemiology from Harvard University
• 8 + Years Experience in Medicine & Management
Manager: Ty McGuire, MBA
• 5 years of experience in finance industry
• 4 years asset management experience at Wells Fargo and Wachovia
• Graduate of The University at Buffalo, DePaul University and Harvard University
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B e a c o n VP C a p i t a l
Raj Hazarika, MD (857) 205-1346 Raj@beaconvp.com Rajhazarika@post.harvard.edu
Ty McGuire (704) 644-9456 Ty@beaconvp.com Ty.mcguire@post.harvard.edu
Shaw Saw (617) 682-9548 Shaw@beaconvp.com Shaw.saw@post.havard.edu
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Process
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Beacon VP Consulting
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B e a c o n VP C a p i t a l
• Harvard & MIT trained PhD’s & Post-Docs with specialties in life science disciplines
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Breakout of PhD's and Post-Docs by Specialties Molecular
BioEngineering
CellularBiology
Endocrinology
Hematology
Immunology
Neurology
Oncology
Rheumatology
Toxicology
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Process
D D C
Performance A
Beacon VP B
Process E
Terms
Fund Terms
People
Strategy BiotechEventDrivenStrategy
InvestmentManager BeaconVPCapital,LLC
FundCurrency USD
Subscriptions Monthly,SeparatelyManagedAccount(SMA)format
AcceptableAccountTypes Regular,Traditional,ROTH,SEP-IRAs,401KRollover,Trust
Redemptions Quarterly(45daysnotice)
MinimumInitialInvestment $250,000
ManagementFee(Annual) 2%
PerformanceFee 20%;greaterthan50%then30%performancefee
HighWaterMark Yes
MasterAdvisorAccount InteractiveBrokers
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Ter
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