Apogee corp presentation by hans david de beer

DE BEER FUND MANAGEMENT LLC 619 ORTON AVE, PENTHOUSE 601, FORT LAUDERDALE, FLORIDA 33304

Email:[email protected], USA TEL: 1-954-306-6545

IS PROUD TO INTRODUCE

Apogee TECHNOLOGY

H.D. De Beer

A Biotechnology Company Pioneering

Vaccine and Drug Delivery Technologies

via Intradermal and

Polyphosphazene Platforms

August 2011

Forward-Looking Statements

This presentation contains forward-looking statements as defined in

the Private Securities Litigation Reform Act of 1995. For this

purpose, any statements contained in this presentation that are not

statements of historical fact may be deemed to be forward-looking

statements. Without limiting the foregoing, the words “believes”,

“anticipates”, “plans”, “expects”, and similar expressions are

intended to identify forward-looking statements. Actual results may

differ significantly from results discussed in the forward-looking

statements. Factors that might cause such differences include those

set forth from time to time in the Company's SEC filings, including in

our annual report on Form 10-K.

• Leader in the field of polyphosphazenes for biomedical applications

• Intradermal technology licensed from Georgia Tech

• Diversified Product Pipeline:

ImmunoMer H; ImmunoMer AH; IgloPatch;

Other biomedical polyphosphazenes planned

• World class team of management, advisors and collaborators

Vision: To develop advanced and patient friendly technologies for the

prevention and treatment of infectious diseases and chronic conditions

Apogee Technology Inc.

World-Class Products, World-Class Partners

Apogee established relationships and collaborated

with leading institutions throughout the nation

- Children’s Hospital Boston

- Georgia Tech

- VIDO

- St. Jude Children’s Research Hospital

The Opportunity

Challenges in The Development of New and Improved Vaccines

• Insufficient protective immunity and memory

• High cost

• Need for cold chain distribution system

• No self-administration

Apogee’s Integrated Microneedle and

Immunoadjuvant Approach offers

a compelling solution

145 Vaccines Under Development*

Source

*Pharmaceutical Research and Manufacturers of America. 2010 Report. Medicines in

development for Infectious Diseases |

http://www.phrma.org/sites/default/files/422/infectiousdiseases2010.pdf

http://www.phrma.org/sites/default/files/422/infectiousdiseases2010.pdf

Unprecedented Structural Diversity – 1,000+ Derivatives

Tunable Properties – Various Potential Applications

Vaccine Adjuvants, Biodegradable Carriers, Nanoparticulates,

Microencapsulation and Modulated release, Microneedles, Biomaterials

High Throughput Discovery

Manufacturing Friendly Chemistry

P N

R

R

( )

Dial-In Biodegradability

Polyphosphazenes as Biomedical Macromolecules

• Proven In Vivo Performance: 23 Antigens in 11 Animal Models

• Enhanced Immune responses, Dose Sparing

• Demonstrated potency and safety in Clinical Trials

• CMC, DMF, Stability, Toxicology Data

• Benign Degradation Products

• 2 M Doses Available

• GMP Process Developed

• New Generation Molecules Synthesized

Polyphosphazene Immunoadjuvants – ImmunoMer Platform

PCPP

Immunoadjuvant Effect – Proof-of-Concept

Enhanced Immune Response (up to 1000x), Long Lasting, Fast Onset, Single Dose

Effective in Lethal Challenge Studies in a

Relevant Preclinical Animal Model with

Commercial Vaccine:

100% protection from mortality with reduced

dose of antigen

Demonstrated Potency in Large Animals with

Animal Health Vaccine Antigen

Clinical Trials: Reported Safe and Immunogenic Formulations, ~ 4x increase in neutralizing antibodiesSOURCE:

Bouveret Le Cam NN, et al, Research in Immunology (1998) 149: 19-23; Ison MG, et al, Antiviral research (2002) 55: 227-278

Antigen Dose Sparing Effect (up to 25x)

Improves Vaccine Shelf-Life

IgloPatch Technology

Enhanced with

Metal

Support

PCPP - VACCINE

Microneedle Array

Band-Aid-Like Microneedle Patches To

Deliver Vaccine in The Skin

Scalable Production Process

1

2

3

4

5

Weeks

HBsAg specific IgG Titers

Single Dose

In Vivo POC studies in a relevant

animal model - pigs

IgloPatch

Adjuvanted IM

IgloPatch - In Vivo Proof-of-Concept Studies

Non-adjuvanted IM

Non-adjuvanted

Microneedles

• Improved Efficacy and Single Administration

• Improved Shelf-Life with no Reliance on Refrigeration

• Convenient Band-Aid Like Patch Administration

• Self Application Possible

• Reduced Pain or Painless Compared to Conventional

Potential Benefits of IgloPatch Technology

Microneedle Technology Licensed from Georgia Tech:

Coated Microstructures and Methods of Manufacture ThereofH.S. Gill, Harvinder Singh, M.R. PrausnitzUS 11/917705 (06.19.2006); Pub. No. US 2008/0213461 A1;

Apogee’s filings on Microneedle Technology and Adjuvanted Formulations:

Methods and Systems for Coating a Microneedle…A.K. Andrianov, A. MarinUS 12/133,505 (06.05.08); Pub. No. US 2009/0017210 A1;

Coating Formulation Including Polyphosphazene…A.K. Andrianov, A. MarinUS 12/217,437 (07.02.08); Pub. No. US/0016935 A1

Immunostimulating Polyphosphazene Compounds for Intradermal ImmunizationA.K. Andrianov, D.P. DeCollibus, H.A. Gillis, H.H. Kha, A. MarinUS 12/217,402 (07.03.08); Pub. No.2009/0041810 A1;

Apogee plans to get access to PS’s intellectual property portfolio to execute the development of product candidates in the proposedtimeframe. The portfolio relates to polyphosphazene immunoadjuvants, including “new generation” molecules, certain polyphosphazenesynthetic and production processes, microencapsulation and therapeutic protein stabilization methods, as well as some other biomedicalapplications of polyphosphazenes that Apogee believes can be complementary to its technology.

Apogee’s Intellectual Property Portfolio

Product Pipeline

•ImmunoMer H, immunopotentiating and antigen stabilizing

polyphosphazene agent for parenteral and mucosal human

vaccines

•ImmunoMer AH, immunopotentiating and antigen stabilizing

polyphosphazene agent for parenteral and mucosal animal

health vaccines

•IgloPatch, advanced immunopotentiated microneedle patch

for the application of vaccine to the skin. Potentially offers self-

applied vaccines with reduced dependence on cold chain

distribution

Product Pipeline -Timeline

Apogee plans to get access to PS’s intellectual property portfolio to execute the development of product candidates in the proposedtimeframe. The portfolio relates to polyphosphazene immunoadjuvants, including “new generation” molecules, certain polyphosphazenesynthetic and production processes, microencapsulation and therapeutic protein stabilization methods, as well as some other biomedicalapplications of polyphosphazenes that Apogee believes can be complementary to its technology.

Strategy

Partnerships with vaccine developers(ImmunoMer H)

Assumption for 3 non-exclusive arrangements for 1-2antigens, $2 million access fee, $1 million and $6 millionmilestones, royalties on sales of 5-15%.Anticipated milestone timelines:1-2013/2014/2015; 2nd-2014/2015/2016; 3rd- 2015/2016/2017

Collaboration with Global Health organizations (all product candidates)

Generate valuable preclinical and clinical data at little orno cost to company (funded R&D) retaining rights forcommercial use of developed vaccine. One fundedcollaboration is currently under way, assumption for twomore in 2011 ($1.1M) and in 2014 ($2M)

Licensing agreement with Animal Health vaccine company (ImmunoMer AH)

Target deal profile: 1.5 million upfront payment in 2012, atleast one milestone payment of $3 million in 2013, androyalties on net product sales starting in 2014.

Licensing agreement with a multinational vaccine company (IgloPatch)

Target deal profile: exclusive or 3-6 antigens in a definedfield, upfront payment of $7 million (2015) and milestonesof $3 million and $7 million in 2016, royalties on sales of5-15%.

Others

Sources:

* Kalorama Information | http://www.kaloramainformation.com/about/release.asp?id=1693

** 12th annual World Vaccine Congress Lyon 2010, J. Almond, Sanofi pasteur | http://www.terrapinn.com

Vaccine Market Overview

Presence of current Top

Pharma Companies**

2005 - 3 of 10

2009 - 8 of 10

**

Global Market for preventive vaccines:

$22.1 billion in 2009*

Predicted Growth:

9.7% *compound annual rate (next five years)

http://www.kaloramainformation.com/about/release.asp?id=1693

http://www.terrapinn.com/

• Worldwide exclusive license from Georgia Tech for coated

microneedle technology

• Know-how and world’s expert scientists in

polyphosphazene field

• Drug Master File for PCPP as an adjuvant *

• cGMP produced PCPP*

• Polyphosphazene immunoadjuvant library,

polyphosphazene drug delivery library, and biomaterial

product candidates*

* Upon closing PSI transaction after funding

Competitive Advantages

Company Products Applications Customers Finances

Celonova Bioscience(Peachtree City, GA)

PolyphosphazeneNanoparticlesEmbozeneTM

EmpolizationPP coated stent

Physicians Private

Competition


IntercellPatch

Vaccines/Bacterial Adjuvant

Pandemic Influenza and Traveler's

Diarrhea Vaccine Patches

Discovery- MarketPublic-$500MM

Market Cap

3MMicroneedles

(plastic)/TLR AdjuvantMultiple Clinical

Public-$61B Market Cap

Zosano PharmaMicroneedles with

PTH, EPO, GM-CSF/GMDP Adjuvant

Osteoporosis Phase IIPrivate-$90MM NEA,

Numera

Becton DickensonMicroinjection device/Alum

Soluble Vaccines On the marketPublic-$17B Market

Cap

Corium InternationalMicroCor™ Micro Delivery System

Small and large molecular weight

moleculesPrivate Private

Polyphosphazene Company

Intradermal Delivery/Adjuvant Companies

Other examples of Immunoadjuvants: AF03 (Sanofi Pasteur), ASO3 (GSK Biologicals), MF 59 (Novartis), IC31 (Intercell)

• Two additional funded contract research and development

collaborations with global health or government organizations in

Q4 2011 and in 2014

• Licensing agreement with an animal health company by year-end

2012 to develop ImmunoMer AH technology

• Three R&D partnerships with vaccine developers in the 2013-2017

time period for the development of ImmunoMer H adjuvanted

vaccines

• Licensing agreement with a multinational vaccine company for

development of IgloPatch microneedle technology

Go to Market Strategy

Business Model

• Product development partnerships with pharmaceutical and biotechnology

companies worldwide, license out application rights, maintain manufacturing

rights

• IgloPatch Technology: licensing model with multinational vaccine producers:

• Exclusive arrangement for 3-6 antigens

• Upfront payment of $5 - $20 million

• Milestone payments of $5 - $15 million per antigen

• 5 - 15% royalties on net product sales

• ImmunoMer H Technology: licensing model with smaller vaccine producers

or biotechnology companies:

• Non-exclusive arrangement for 1-2 antigens

• Upfront payment of $1 - $2 million (“Access Fee”)


• 10 - 25% of proceeds upon acquisition of vaccine by a multinational company


• ImmunoMer AH Technology: collaboration with Animal Health company

• Other: collaboration with Global Health or Government organizations

generating technology transfer fees

Financing Requirements

• Apogee seeks to raise $10 million in one or two rounds of funding

to develop ImmunoMer H, ImmunoMer AH, IgloPatch technologies,

as well as to purchase certain assets of Parallel Solutions

• Anticipated use of proceeds:

• Acquisition of PSI

• ImmunoMer H Preclinical

• ImmunoMer AH Preclinical

• Development of IgloPatch

• IgloPatch Preclinical

• Working Capital (inclusive of transaction costs)

PROJECTED REVENUES AND EXPENSES 2010-2016

($10,000,000)

($5,000,000)

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

1 2 3 4 5 6 7

2010 2011 2012 2013 2014 2015 2016

Revenues

Operating Loss/Gain

Total Expenses

($10,000,000)

($5,000,000)

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

1 2 3 4 5 6 7

PROJECTED CONSLIDATED BALANCES 2010-2016

Assets

Liabilities

Financial Assumptions 2010-2016

1. $10 Million Private Placement

2. Restructuring of bridge loans (all but $156K) has been effected in the Financials.

3. Legal fees of $1.5 MM being settled for $600k.

2010 2011 2012 2013 2014 2015 2016

Investment Rationale

• A strong balance sheet will strengthen Apogee’s negotiating

position with potential strategic partners

• Acquisition of certain assets of Parallel Solutions, Inc. (PSI)

for 700,000 shares of Apogee stock and 25% of future joint

venture payments will provide Apogee with access to

• PSI’s intellectual property portfolio

• Drug Master File

• cGMP produced material

• Polyphosphazene libraries (new adjuvants, drug delivery) and

other polyphosphazenes for potential biomedical and industrial

applications

Apogee Technology

Management Team

• Herbert Stein, CEO and Chairman:

Mr. Stein brings over fifty years of management experience to Apogee and has served on the boards

and in executive management positions at several life sciences companies, including as Chairman

and CEO of Organogenesis.

• Paul J Murphy, Chief Financial Officer and Vice President of Finance:

Mr. Murphy has 25 years of experience as Chief Financial Officer of public and private companies.

Prior to joining Apogee, Mr. Murphy was an independent contractor with JH Cohn, LLP, where he

worked with public companies to design, assess and test controls for compliance with Section 404 of

the Sarbanes-Oxley Act of 2002.

• Alexander K. Andrianov, Ph.D., Vice President of Research and Development:

Dr. Andrianov, as the inventor of the polyphosphazene immunoadjuvant technology, has unique

expertise in polyphosphazene chemistry. He is an author of more than 60 scientific papers and book

chapters, an inventor on 41 issued and pending patents, and an editor of the book “Biomedical

Applications of Polyphosphazenes”. He has ~20 years of experience in the biotechnology industry

having served as Chief Scientific Officer of Parallel Solutions, Inc., and in various management

positions at Avant Immunotherapeutics and Virus Research Institute Inc (VRI). Dr. Andrianov also has

extensive academic experience as a faculty member in Moscow State University (MSU) and visiting

scientist at Massachusetts Institute of Technology (MIT) with Professor Robert Langer.

Summary

• Apogee Technology is a biotechnology company pioneering advanced

vaccine and drug delivery systems via its proprietary technology platform

• Core expertise: biomedical polyphosphazenes and their integration into

value added products

• Vaccine antigens stabilized and adjuvanted by polyphosphazenes and

delivered via Apogee’s microneedle technology have demonstrated to

confer a more potent immune response using reduced amounts of antigen

and provide an extended shelf life

• Potential self-administration and reduced dependence on cold chain

distribution open up developing countries as attractive target markets

• Licensing agreements with vaccine developers, an animal health company

and Global Health or Government organizations are expected to generate

significant revenue from upfront, milestone, and royalty payments, as well

as funded collaborations

• In addition to vaccine and drug delivery applications, potential uses of

polyphosphazenes extend to biomaterials

Apogee Technology Inc. Confidential

1

Apogee Technology, Inc.

Business Plan

August 2011


2

Certain statements made herein that use the words "anticipate," "may," "hope," "estimate," "project,"

"will," "intend," "plan," "expect," "believe" and similar expressions are intended to identify forward-

looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These

forward-looking statements involve those related to the use of proceeds from the private placement,

the design, development and production efforts of our PyraDerm™ and Sensilica® technologies, known

and unknown risks and uncertainties, which could cause the actual results, performance or

achievements of the Company to be materially different from those that may be expressed or implied.

Please refer to the Company's risk factors as set forth in the Company's filings with the Securities and

Exchange Commission, including its report on Form 10-KSB, as amended, for the year ended December

31, 2008, as updated in its quarterly reports on Form 10-Q. The information contained in this press

release is believed to be current as of the date of original issue. The Company does not intend to update

any of the forward-looking statements after the date of this document to conform these statements to

actual results or to changes in the Company’s expectations, except as required by law.


3

This business plan does not constitute an offer to sell or a solicitation of any offer to buy the securities to which it relates in any jurisdiction in which, or to any person whom, it is unlawful to make such an offer or solicitation. Neither the delivery of this business plan nor any offer of sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information set forth herein or in the affairs of Apogee Technology since the date hereof. This business plan contains confidential and proprietary information of Apogee Technology, which is for the sole use of its intended recipient. Any unauthorized review, use, disclosure or distribution is prohibited. The financial projections in this business plan were developed by the management of Apogee Technology and are based on a number of assumptions, some of which are listed here. These assumptions include the timing and success of our future development efforts, acceptance of our products, our ability to successfully implement our hiring goals, our average sales price, the size of the market, our market share, general industry conditions and other matters. Although Apogee Technology believes that these assumptions are reasonable, they may be incomplete or incorrect, and unanticipated events and circumstances are likely to occur. The assumptions involve significant elements of subjective judgment and analysis, and no representation can be made as to their attainability. The projected financial information has not been examined, reviewed or compiled by independent accountants. The projections were not prepared with a view to public disclosure and do not comply with the published guidelines of the SEC or any state securities commission or the guidelines established by the American Institute of Certified Public Accountants. Actual results achieved during any future period may vary from the projections, and the variations may be material and adverse. We do not intend to update or otherwise revise these projections to reflect circumstances existing after the date hereof or to reflect the occurrence of future events, even if the assumptions or estimates underlying the projections are shown to be in error. Prospective investors should not rely on, and will be deemed not to have relied on, the projections in making an investment decision.


4

Company

Apogee Technology, Inc. is a (ATCS.OB) is a publicly traded development stage company,

developing vaccine and drug delivery technologies and immunomodulating systems for the prevention

and treatment of infectious diseases and chronic conditions. To address the unmet needs of the field,

the Company advances a unique approach based on polyphosphazene macromolecules, which are

designed to enhance biological activity of vaccines or drugs, and display synergistic effect when

integrated with non-conventional administration routes, such as topical (intradermal) delivery using

microneedle enhanced patches. The technology has the potential to enhance protective immunity

induced by vaccines, simplify and decrease the cost of drug or vaccine administration, improve the

efficacy of the treatment, and increase the product shelf-life. Apogee has established a strong

intellectual property position through licensing and filing of several patent applications in the field and

plans to extend it through the acquisition of Parallel Solutions, Inc. The Polyphosphazene approach can

be applied across a range of other disease areas and biomedical applications providing a broad and

flexible platform for the discovery and development of novel drug delivery systems and biomaterials.

Apogee is initially focused on the development of and for the prevention and treatment of infectious

diseases, cancer, and allergies using advanced immunopotentiating and microneedle delivery

technologies - ImmunoMer H, ImmunoMer AH, and IgloPatch.

Technology

Polyphosphazenes

Polyphosphazenes, macromolecules with a phosphorus and nitrogen backbone and organic side groups

(Scheme 1), possess a number of features that make them highly attractive for life sciences applications

and also distinguish them from other classes of biomedical polymers. Firstly, the inorganic backbone is

capable of hydrolytical degradation, which can be modulated through the selection of the appropriate

side group. Secondly, the unique synthetic pathway to these polymers, the so-called macromolecular

substitution, allows a huge selection of substituents to be introduced by common organic chemistry

methods, free of many ambiguities and restrictions associated with polymerization processes. Thirdly,

such methods lend themselves to high throughput synthesis, which accelerates the discovery process.

Fourthly, the unique flexibility of the backbone and its ability to participate in non-covalent bonding and

supramolecular assemblies create new opportunities for the interface with biological systems.


5

Scheme 1. Polyphosphazenes

Polyphosphazene Immunoadjuvants

The search for potent, well characterized, and safe vaccine adjuvants and delivery vehicles has been

widely recognized as a key strategic factor in the development of new and improved vaccines [1]. In this

regard, an emerging class of well defined macromolecules, based on a polyphosphazene backbone

(Scheme 2), offers a number of important advantages, both from immunostimulation and delivery

standpoints. Impressive immunopotentiation activity and dose sparing effects of these water-soluble

molecules [2-11] are augmented with the ease of their assembly into supramolecular microparticulate

structures to achieve optimal delivery performance [12-17]. The synthetic origin of polyphosphazene

adjuvants and their well characterized molecular structures assure a high level of reproducibility and

ease of quality control [18-20]. Adequate stability, the “mix and fix” aqueous formulation approach,

which does not involve covalent conjugation with antigen [3], long lasting immune responses, and a

good safety profile, which includes the results of clinical trials in humans, are among other advantages

of this adjuvant system. The polyphosphazene backbone of these molecules allows their biodegradation,

which can be modulated through the choice of the side group and results in the release of

physiologically benign compounds [4, 21-23]. The commercial development of the lead compound is

sustained by the existence of a robust GMP manufacturing process and the availability of a drug master

file to support regulatory applications. A substantial research effort has already been invested in the

field, including work in multiple animal models and with various antigens, both synthetic and

mechanistic studies [2-10]. It becomes evident that the polyphosphazene adjuvant technology evolves

through the discovery of new, more potent derivatives [24-26], development of microparticulate

delivery systems, and the investigation of alternative delivery routes, such as mucosal and intradermal.

The mechanism of action of ionic polyphosphazene immunoadjuvants, which are highly superior to their

non-polyphosphazene counterparts [3, 9], is still largely under discussion. It has been established that

adjuvant activity of PCPP is not associated with a depot formation, as the excision of the injection site

had no detectable effect on the kinetics of antibody induction [7]. The adjuvant activity of PCPP appears

to be linked to its ability to form water-soluble non-covalent complexes with the antigen, a process

which may enhance their interaction with antigen presenting cells [3]. This can be an important factor

DIVERSITY

BIODEGRADABILITY

HT COMPATIBLE

INTERACTIVE

DIVERSITY

BIODEGRADABILITY

HT COMPATIBLE

INTERACTIVE


6

taking into account a unique antigen presenting function of dermal dendritic cells mentioned above

[27]. More recent evidence suggests that PCPP activates innate immune cells to secrete IL-4 and IL-12

[28]. Since these cytokines are known to influence adaptive immune responses, activation of innate

immunity may be important in mediating the adjuvant activity of PCPP. Regardless of the mechanism,

PCPP appears to display immunoadjuvant activity with a broad spectrum of viral and bacterial antigens,

which are of interest in combating such important infectious diseases as influenza, hepatitis B, herpes,

tetanus, and HIV [11].

Scheme 2. A Representative Structure of a Polyphosphazene Vaccine Adjuvant

Intradermal Immunization

Skin is an attractive organ for administration of vaccines since it constitutes an anatomic barrier,

defending the body against external pathogens. Targeting of vaccine compounds to skin and/ or skin-

draining lymph node dendritic cells (DCs) is a valuable strategy to induce robust cellular responses that

protect against infectious and chronic diseases caused by intra-cellular pathogens. The unique antigen

presenting function of skin draining lymph node DCs has been the focus of intense studies for the

purpose of vaccine development [27]. Intradermal vaccination approaches have a potential to facilitate

induction of more potent immune responses and provide the basis for a significant antigen sparing

effect [29-34]. The latter can be highly desirable during times of vaccine shortages, such as epidemic

emergencies, and can also reduce the cost of vaccine manufacturing, which is especially important for

expanding vaccine use in less developed areas of the world [33, 35]. This could increase the possibility of

mass intradermal vaccination programs and result in major global health benefits, particularly in areas

where access to healthcare personnel is an issue.

Microneedle Technology for Intradermal Administration of Vaccines

Although the intradermal immunization approach appears to be promising, its technical realization faces

significant challenges, such as special training of personnel who would be needed to administer

vaccinations through the intradermal route effectively [36]. Microneedles and micro-injection devices


7

can provide a convenient alternative potentially offering ease of application and distribution, possibility

of self-administration and pain-free delivery [37].

Apogee Technology, Inc. is engaged in the development of microneedle systems (Fig. 1), which utilize

sub-millimeter structures to pierce the stratum corneum and deliver vaccines in the epidermis or dermis

compartments [37-40]. Microneedles are designed to combine vaccine formulation as a solid coating,

and metal, as a supporting material to provide the required mechanical strength. Once applied to the

skin, these formulations dissolve to release vaccine antigen in the skin compartment. Solid vaccine

formulations used in such systems are especially attractive since they also potentially offer improved

shelf life and reduced dependence on temperature-controlled supply chains [41, 42]. These

microneedles can also potentially be self-

administered and safely disposed of. Thus the

technology can significantly reduce biohazard

risks and drastically lowers the cost of

disposal as compared to contaminated

needles and syringes.

Polyphosphazene Immunoadjuvants for

Intradermal Immunization

A significant barrier on the way to a successful

development of microneedle vaccines is a

reliance of modern vaccine technologies on

immune-enhancing additives, i.e.,

immunoadjuvants, to engender the desirable

protective immune responses [1].

Unfortunately, many of the currently

employed vaccine adjuvants may not be

compatible with intradermal delivery

approaches. For example, alum, which is the

most common adjuvant used in the vaccine

market globally [1] and one of only two

adjuvants currently approved in the United

States, was shown to induce serious adverse

effects, such as formation of granulomas, when administered intradermally [43]. Other advanced

adjuvants, which contain biphasic systems, such as oil emulsions or liposomes, may not be sufficiently

stable to withstand the microneedle coating and drying processes. Although there are clear indications

that intradermal immunization can potentially offer significant improvements over intramuscular


8

vaccination [37], it appears that the majority of studies have been conducted using non-adjuvanted

vaccine formulations.

Apogee Technology develops microneedle systems, which utilize polyphosphazene adjuvants, both as

immunostimulant and microfabrication material. Polyphosphazene polyelectrolytes are one of the most

remarkable classes of vaccine adjuvants due to their macromolecular nature, well-defined structure, and

synthetic origin and have demonstrated excellent immunomodulating potential when tested in multiple

animal models with both viral and bacterial antigens [2, 5, 7, 11, 44]. The lead compound,

poly[di(carboxylatophenoxy)phosphazene] (PCPP) has been advanced into clinical trials [45-47] and

PCPP formulated vaccines were reported to be safe and immunogenic in humans [45, 46]. Most

importantly, the macromolecular nature of PCPP ensures excellent film forming and microencapsulating

properties [12, 13]. It has been also demonstrated that PCPP can protect and stabilize vaccine antigens


9

during the microfabrication process [48, 49]. PCPP is a water-soluble molecule, which can be formulated

with proteins in aqueous solutions under mild conditions [3] and has the potential to be dissolved easily

in a highly hydrated environment, such as skin. Finally, dual functionality of such a molecule, as an

immunoadjuvant and film forming/microfabrication material, eliminates the need for the use of

additional macromolecular excipients and thus can potentially result in a higher vaccine loading

capacity.

Synergy between Polyphosphazene Immunoadjuvant and Microneedle Technology Creates New

Approach to Intradermal Immunization

Recent studies conducted by Apogee have demonstrated that a macromolecular adjuvant, PCPP,

exhibits potent immunoadjuvant activity when delivered intradermally and also enables efficient

incorporation of vaccine antigens into microfabricated delivery devices.

In vivo proof-of-concept studies in pigs using recombinant Hepatitis B surface Antigen (HBsAg)

demonstrated that Apogee’s intradermal delivery systems dramatically increase antibody responses

compared to intramuscular administration of non-

adjuvanted and adjuvanted formulations after a single

dose immunization (Fig. 2a). They also provide significant

antigen sparing ability (Fig. 2b). These results appear

especially significant as the anatomy of pig skin presents a

reasonable model for human skin [50]. In fact, a powerful

synergistic effect between microneedle system and

polyphosphazene adjuvants observed in these

immunization studies requires further mechanistic studies

focusing on the specifics of immunological pathways

associated with delivery to skin and the role of PCPP.

PCPP is not only compatible with solid state microneedle

technology, but can potentially eliminate the need for

inert “engineering” polymers, such as CMC, whose sole

role is to serve as a microfabrication material. Since both

immunostimulating and “engineering” functionalities can

now be integrated in a single compound - PCPP - the

approach creates opportunities for maximizing antigen

doses or achieving faster dissolution profiles using the same amount of the formulation. The results also

suggest that PCPP can potentially provide surfactant-free or low surfactant coating solutions allowing

more flexibility in formulation development, which is especially important when high contents of

surfactant are undesirable [42, 51].

The micro-dip coating process utilized by Apogee is anticipated to be scaleable and inexpensive. A

number of proprietary methodologies have been developed to assure accurate and reproducible dosing

of the vaccine formulation [52]. The results of recent studies also showed no loss of activity in the

0

20

40

60

80

100

0 5 10 15 20

Time, days

Residual activity, %

1

2

Fig. 3. Residual enzymatic activity of

HRP encapsulated on microneedles (1)

and in aqueous solution (2) during

accelerated thermal stability studies as

a function of time (80° C).


10

coating process utilizing model protein compounds, which indicated high efficiency of encapsulation in

the process of microneedle fabrication [52].

One of the most significant potential advantages of solid state microneedle technology, being developed

by Apogee, is an expected improved shelf life of solid state formulations as compared to their solution

counterparts. Stability of microneedles containing model biological, Horse-Radish Peroxidase (HRP) was

compared to the same enzyme in aqueous formulation at 80 °C (Fig.3). The accelerated degradation

profiles show a dramatic improvement in the stability of a solid state formulation as compared to HRP in

solution [52]. As mentioned above, the stability and better shelf-life of the microneedle formulations

can be a critical parameter in decreasing the reliance of vaccine distribution on cold chain supply,

resulting in a major global health benefit.

Business Strategy

Apogee’s business strategy is to develop high value vaccine and drug enabling systems based on

unique polyphosphazene technology synergized with advanced delivery approaches. Our core expertise

is the development of novel biomedical, immunopotentiating and protein stabilizing polyphosphazenes

and their integration into value added products. Due to high costs of vaccine development and

regulatory approval, we intend to develop products thru partnerships, further licensing out application

rights while maintaining manufacturing rights.

Apogee will pursue partnerships with pharmaceutical and biotechnology companies worldwide,

which conduct preclinical and clinical development of cutting edge vaccine candidates with a need for

immunopotentiators or advanced delivery systems. Under a partnership agreement we would jointly

invest in the preclinical and, potentially, phase I/II clinical product development and then license them

either to a strategic partner or a third party for completion of clinical development, registration, and

product marketing. These deals will generate multi-million upfront payments, milestones and double

digit royalties.

The company will also pursue licensing agreements with multinational vaccine producers that

are in the need of advanced immunopotentiators and delivery systems for multiple antigens. We would

provide rights to our intellectual property in exchange for license fees, milestone development

payments and royalties tied to product sales. Target deal profile may include exclusive or semi-exclusive

arrangement, use with 3 to 6 antigens in defined field (infectious disease, allergy or cancer), upfront

payment ($10M-20M), milestones ($5M - 15M per antigen), royalties (5 - 15% depending upon disease,

exclusivity), subsidized research, and follow-on or extension deals with other antigens or fields.

Apogee may enter into collaborations with Global Health organizations for the development of

vaccines for developing countries. The Company anticipates these efforts to be subsidized, with a

potential technology transfer fee upon completion of preclinical or clinical evaluation. Since, each

immunopotentiator or delivery system can be used or tested with a variety of antigens, this provides an

opportunity to generate valuable, including clinical data and benchmarking against competing systems


11

at little or no cost to the Company. Apogee intends to pursue similar opportunities for Public Health

vaccines in US actively seeking government subsidized R&D studies, also involving commercial partners.

In the Animal Health vaccine industry we plan to enter into a short term joint evaluation studies

and sell our rights to one or two leading companies in the field, generating significant short term

revenues targeting Q4 2012, which will allow us to more aggressively, pursue other high value added

partnerships.

Apogee has already initiated discussions with several potential partners. Apogee’s strategy for

establishing strong partnership deals include selecting antigens and animal models of relevance to

vaccine developers, compatibility with other immunopotentiators and delivery systems, and

benchmarking our systems against our competitors.

Product Pipeline

Apogee’s product pipeline consists of the following proprietary systems: ImmunoMer H,

immunopotentiating and antigen stabilizing polyphosphazene agent for parenteral and mucosal human

vaccines, ImmunoMer AH, immunopotentiating and antigen stabilizing polyphosphazene agent for

parenteral and mucosal animal health vaccines, and IgloPatch, advanced immunopotentiated

microneedle patch for the application of vaccine to the skin. We plan to integrate these systems with

novel vaccine antigens in partnerships with industry leaders developing new vaccines, governmental and

world health organizations to develop breakthrough vaccines with enhanced protective immunity,

improved safety profiles, and superior term shelf-life, with IgloPatch product potentially offering self-

applied vaccines with reduced dependence on cold chain distribution.


12

Table 1. Projected Product Development

Apogee identified a number of novel vaccine candidates that are currently in clinical or pre-

clinical development, which we believe are ideally suited to be enhanced by our immunopotentiating

systems with many proof-of-concept in vivo experiments already completed. Apogee anticipates

entering into the agreements on the co-development of these vaccines within approximately 6 months

after receiving funding and conduct preclinical and clinical development of Public Health and World

Health vaccines under the terms of appropriate funding from potential partners.


13

Table 2. Identified Target Antigens

1 A.K. Andrianov et al., Proc. Natl. Acad. Sci. USA, 2009, 106:18936 2 G. Mutwiri, in “Polyphosphazenes for Biomedical Applications” A.K. Andrianov, Ed., John Wiley & Sons, 2009, 77 3 A.K. Andrianov et al., J. Pharm. Sci., 2011, 100 (4), 1436 4 K. Johansen, in “Polyphosphazenes for Biomedical Applications” A.K. Andrianov, Ed., John Wiley & Sons, 2009, 85


14

In order to execute commercial development of ImmunoMer H, ImmunoMer AH, and

polyphosphazene related part of IgloPatch in the proposed timeframe, Apogee believes that it needs to

gain access to certain patents of Parallel Solutions, Inc. (PSI), which it plans to acquire upon receipt of

funding proceeds. Intellectual property of PSI also includes other biomedical polyphosphazene

technologies, such as therapeutic protein stabilization methods, which can be highly complementary to

Apogee’s microneedle system, IgloPatch, and can enhance characteristics of our patch systems for the

delivery of therapeutics. Upon acquisition of PSI, Apogee plans to seek externally funded partnership to

conduct in vivo proof-of-concept studies of these technologies.

Intellectual Property

Apogee has already established a strong intellectual property position through licensing and filing of several patent applications in the field. Patent application related to microneedle device, related compositions and manufacturing methods was licensed from Georgia Institute of Technology (Professor M.R. Prausnitz):

Coated Microstructures and Methods of Manufacture Thereof H.S. Gill, Harvinder Singh, M.R. Prausnitz US 11/917705 (06.19.2006); Pub. No. US 2008/0213461 A1; provisional No. 60/691,857 (06.17.2005), No

60/732,267 (11.1.2005); PCT/US2006/023814 (06.19.2006); Int. Publ. No. WO 2006/138719 A2;

EP20060785110.

Apogee has filed the following patent applications related to microneedle technology and the use of polyphosphazenes as intradermal immunopotentiator and as coating reagents for microneedle technology.

Methods and Systems for Coating a Microneedle with a Dosage of a Biologically Active Compound A.K. Andrianov, A. Marin US 12/133,505 (06.05.08); Pub. No. US 2009/0017210 A1; provisional 60/948,500 (07.09.07);

PCT/US2008/007200 (06.09.08); Int. Publ. No. WO2009/008951 A2; EP20080768269.

Coating Formulation Including Polyphosphazene Polyelectrolytes and Biologically Active Agents and Asperities Coated with Such Formulations A.K. Andrianov, A. Marin US 12/217,437 (07.02.08); Pub. No. US/0016935 A1, provisional 60/948,540 (07.09.2007)

PCT/US2008/008265 (07.03.08); Int. Publ. No. WO 2009/009004 A1; EP20080768862.

Immunostimulating Polyphosphazene Compounds for Intradermal Immunization A.K. Andrianov, D.P. DeCollibus, H.A. Gillis, H.H. Kha, A. Marin US 12/217,402 (07.03.08); Pub. No.2009/0041810 A1; provisional 61/125,576 (04.25.2008) and

60/948,540 (07.09.07); PCT/US2008/008230 (07.03.08); Int. Publ. No. WO 2009/008988A1;

EP20080779950.


15

In order to execute commercial development of ImmunoMer H, ImmunoMer AH, and

polyphosphazene related part of IgloPatch in the proposed timeframe, Apogee believes that it needs to

gain access to certain patents of Parallel Solutions, Inc. (PSI), which it plans to acquire upon receipt of

funding proceeds. Intellectual property of PSI also includes other biomedical polyphosphazene

technologies, such as therapeutic protein stabilization methods, which can be highly complementary to

Apogee’s microneedle system, IgloPatch, and can enhance characteristics of our patch systems for the

delivery of therapeutics.

Competitive Advantage

There is an unmet need for new immunoadjuvants (immunopotentiators) and alternative

administration routes for the delivery of vaccines. A major bottleneck in vaccine development is the lack

of suitable adjuvants for adult and pediatric vaccine use. Until recently, vaccine research and

development focused nearly exclusively on the antigen component of the vaccine that induces a specific

immune response in the body to protect against a particular disease. Contemporary vaccines

increasingly rely on another component – immunoadjuvant, which does not induce the immune

response on its own, but is capable of amplifying it dramatically to make the vaccine more potent,

reduce the dose of the antigen and a number of required administrations, and achieve more rapid and

longer-lasting protective immunity. Alternative delivery routes, such as intradermal vaccination, further

have a potential to simplify and decrease the cost of drug or vaccine administration, improve the

efficacy of the treatment, and increase the product shelf-life.

There are two vaccine adjuvants (immunopotentiators) currently approved in the United States

– Alum, which has been used with multiple vaccines for decades (public domain), and recently approved

ASO4 for use in Cervarix HPV Vaccine (GSK Biologicals). MF59 (Novartis Vaccines), has been also

approved in Europe. All of these immunopotentiators are heterogeneous (biphasic) systems that are

either incompatible with many advanced delivery systems, such as microneedles, or reactogenic or

inefficient when delivered intradermally or mucosally, important delivery modalities. Although there are

a number of immunopotentiators that are currently under development, such as AF03 (Sanofi Pasteur),

ASO3 (GSK Biologicals), IC31 (Intercell), various TLR agonists (3M), and others, they have similar

limitations and may face other challenges in the approval process.

Polyphosphazene immunopotentiators, PCPP and newer generation molecules have the

following features, distinguishing them from other similar systems:

Well-defined synthetic molecular immunopotentiator;

Vaccine Stabilization Agents for prolonged shelf life;

Proven Parenteral, Mucosal, Intradermal Immunopotentiator with higher, sustained immune

response with quick onset and improved immunological memory;

Antigen sparing effect;

Strong safety and tolerability track record in clinical trials;


16

Compatibility with solid microneedles;

Can be formulated in nanoparticulates for synergistic vaccine delivery effect;

Technology platform with newer, more potent immunopotentiators through High Throughput

Discovery;

Excellent compatibility with other immunopotentiating systems.

There are a number of companies developing solid microneedle technologies for biomedical

applications, such as Zosano, Corium, Theraject, and 3M, however most of them focus on therapeutic

applications and lack compatible immunopotentiators. Published report by Zosano on the use of small

molecule immunopotentiator (GMDP, not suitable as a microfabrication material), indicated that the

adjuvant worked intradermally, but its effect was 10 times less than when it was used parenterally. In

contrast, Apogee’s system showed at least order of magnitude higher performance of polyphosphazene

immunopotentiator when administered intradermally compared with intramuscular administration.

The Company believes that the advantages of Apogee’s microneedle technology are as follows:

Proven synergy of adjuvant and intradermal delivery;

Dual role of polyphosphazene as microfabrication material provides higher loading

Stabilization effect of polyphosphazene and improved microfabrication rate reduces stress on

vaccine antigen improving efficiency of loading;

Reduced reliance on surfactants in the microfabrication process;

Precise dosing of antigen to overcome one of the most critical challenges of the technology.


17

Market Analysis

Others

Sources:

* Kalorama Information | http://www.kaloramainformation.com/about/release.asp?id=1693

** 12th annual World Vaccine Congress Lyon 2010, J. Almond, Sanofi pasteur | http://www.terrapinn.com

Vaccine Market Overview

Presence of current Top

Pharma Companies**

2005 - 3 of 10

2009 - 8 of 10

**

Global Market for preventive vaccines:

$22.1 billion in 2009*

Predicted Growth:

9.7% *compound annual rate (next five years)

The global market for preventative vaccines topped $22 billion in 2009 and is predicted to

increase at a compound annual rate of 9.7% during the next five years, as new product introductions

continue and the use of current products expands further in all regions. Vaccines are commonly

segmented into two target markets, adult and pediatric. The pediatric vaccine market is larger,

accounting for more than half of the total market and is also growing at a faster rate than adult vaccines

and this is expected to continue over the next five years. Geographically US will continue to lead the

vaccines market followed by Europe. Japanese vaccine market has also started to open up further from

regulatory and political barriers. The large population in countries like India and China, high prevalence

of diseases and emergence of new pandemics are some of the important factors posting tremendous

growth in vaccine market. This sector is expected to grow at a rate of 14% during 2009-2012.

In 2009, pandemic influenza vaccines were the best selling vaccines with sales of over $ 5 billion

followed by hepatitis B vaccines. The worldmarket of Hepatitis B Vaccine was $ 1.2 billion. Of the 350

million to 400 million individuals worldwide infected with the hepatitis B virus (HBV), one-third reside in


18

China, with 130 million carriers and 30 million chronically infected. Pneumococcal vaccine (Prevnar) has

crossed the sales of US$ 1 Billion in 2007 and became the first vaccine to reach nearly US$ 3 Billion

annual sales by 2009. Pneumonia is the world's leading killer of children younger than 5 years, and is

one of the foremost vaccine-preventable killers of children today. Every year, pneumococcal disease kills

about 1 million children worldwide. The Advanced Market Commitment (AMC) initiative for

pneumococcal vaccine was launched in June, 2009 with the intention to help prevent pneumonia. With

$1.5 billion funding from Canada, Italy, Norway, Russia, the UK, and the Bill & Melinda Gates

Foundation, the initiative is aiming to create a market to ensure demand for, and supply of,

pneumococcal vaccines for developing countries. Sales of Cervical cancer vaccines (HPV) have crossed $

1 Billion by 2007 and are forecasted to cross $ 4 Billion mark by 2012. Market for Rotavirus and polio

vaccines has crossed $ 1 Billion each in 2009. Malaria vaccine market for public is expected to cross $

400 Million by 2025.

Due to existing threat of terrorism Bio-protection vaccines are an important segment of the

market. US government poured billions into building strategic stockpiles of these vaccines (influenza,

bioterror) and R&D funding for new production technologies. The Bio-protection vaccines market is

expected to grow with an annual rate of 12.08% percent from 2009 to 2015.

Pharmaceutical Research and Manufacturers of America lists 145 vaccines under development

in US only, to prevent a variety of infections. A large number of vaccines that are currently under

development, both in US and worldwide, are designed to combat important emerging or neglected

diseases, for which there is currently no preventive treatment. Norovirus infection, more commonly

known as the “stomach flu”, is the most common cause of acute gastroenteritis in the U.S. A systematic

review of studies performed by the CDC estimated that norovirus causes an annual 64,000

hospitalizations and 900,000 clinical visits among children in industrialized nations and up to 200,000

death of children < 5 years of age in developing countries. Chlamydia is a common sexually transmitted

disease (STD) caused by the bacterium, Chlamydia trachomatis. Chlamydial infections in women, which

are usually asymptomatic, can result in pelvic inflammatory disease, which is a major cause of infertility,

ectopic pregnancy, and chronic pelvic pain. CDC reports high prevalence of chlamydial infections in the

general U.S. population. Among young adults (aged 18–26 years) who participated in the nationally

representative National Longitudinal Study of Adolescent Health (Add Health) during 2001–2002,

chlamydia prevalence was 4.2%. A vaccine against recurrent vulvovaginal candidiasis (VVC) would

benefit a large number of women who suffer from this debilitating syndrome. The disease has a

significant effect on quality of life and poses a huge burden to the health care system. CDC estimates

that 75% of women will have at least one episode of VVC, and 40%–45% will have two or more episodes

within their lifetime. Approximately 10%–20% of women will have complicated VVC that necessitates

diagnostic and therapeutic considerations. Global candidiasis therapeutics market was valued at $1.57

bn in 2009. Hand, foot, and mouth disease (HFMD) is another common viral illness in infants and

children caused by viruses that belong to the enterovirus genus of the picornavirus family. Although

most HFMD do not result in serious complications, outbreaks of HFMD caused by enterovirus 71 (EV71)

can present with a high rate of neurological complications, including meningoencephalitis, pulmonary

complications, and possibly death. HFMD caused by EV71 has become a major emerging infectious


19

disease in Asia with approximately 1,155,000 new cases of HFMD in mainland of China only, and 353

deaths. A number of commercial entities and academic groups are working on the development of

vaccines in these areas and Apogee’s immunopotentiating, delivery, and stabilization systems can

potentially play an important role in enabling these vaccines, accelerating their development, reducing

required doses, improving shelf-life and enhancing their protective immunity.

The worldwide vaccine market is dominated by five major competitors: Merck & Co,

GlaxoSmithKline, Sanofi Pasteur, Pfizer, and Novartis. Examples of other vaccine companies include

AlphaVax, Inc., Bavarian Nordic A/S , Baxter Healthcare, Bharat Biotech, Celldex Therapeutics, Crucell,

Emergent Biosolutions, Medimmune, Nabi Biopharmaceuticals.

Global Veterinary Vaccines Market to reach $5.6 Billion by 2015. The market is split between

Livestock Vaccines (Porcine Vaccines, Bovine Vaccines, Poultry Vaccines, Ovine Vaccines, Equine

Vaccines, & Other Animal Vaccines) and Companion Vaccines (Canine Vaccines, & Feline Vaccines) with

the first representing the largest product segment of about 63% in 2006. Growth in the Livestock

Vaccines market is essentially driven by Porcine Vaccines market, which not only accounts for a majority

share of the total market but is also one of the fastest growing segments. Revenues from porcine

vaccines market are estimated to be approximately $1 billion mark in 2010. United States and Europe

collectively capture more than 60% of the worldwide Veterinary Vaccines market. United States

companion animal vaccines market is estimated to be approximately $410 million in 2010. Europe is a

major market for veterinary vaccines and medicines across the globe. France, Germany and United

Kingdom account for over 40% of the veterinary vaccine sales in Europe.

Key players in the marketplace include Bayer HealthCare AG, Biogenesis-Bago, Boehringer

Ingelheim GmbH, Heska Corporation, Imugene Limited, Indian Immunologicals Ltd, Lohmann Animal

Health, Merck & Co. Inc., Intervet/Schering-Plough Animal Health, Merial Ltd., Pfizer Inc., Embrex Inc.,

Fort Dodge Animal Health, Virbac Corporation, among others.

Operational Plan

Progress to Date

Since the start of our biomedical project, the Company has reached a number of important

milestones including:

Establishment of the laboratory and the initiation of R&D work in 2006;

Completion of the licensing agreement for the microneedle technology from Georgia Tech;

Development of the prototype microneedle fabrication process, arrays, and patches, and

identification of critical external suppliers and main quality control methods;

Completion of in vivo proof-of-concept study (in collaboration with Vaccine and Infectious

Disease Institute) for Apogee’s microneedles which demonstrated superior potency of IgloPatch


20

and synergy between polyphosphazene and intradermal delivery and resulted in a publication in

Proceedings of National Academy of Sciences U.S.A.;

Filing of 3 patent applications;

Completion of in vivo proof-of-concept study (in collaboration with St. Jude Hospital) of

immunopotentiation technology and pandemic influenza vaccine, which demonstrated the

ability of Apogee’s formulations to protect animals in a lethal challenge study at a significantly

reduced dose;

Demonstration of the stabilizing effect of Apogee’s technology on vaccine and other biologics as

a proof-of-concept for the improved shelf-life;

Award of R&D contract from Children Hospital Boston for the development of

immunoadjuvanted formulations of vaccines for newborns, and successful and timely

achievement of milestones to date.

Facilities and Equipment

Apogee Technology is headquartered in Norwood, MA and established state-of-the art research

facilities include a formulation and characterization laboratory (360 sq.ft.) and an additional 670 sq.ft. of

lab support space.

The analytical section of the laboratory is equipped with Hitachi LaChrom Elite High Performance Liquid

Chromatography (HPLC) system with multi-detection capabilities (L-2I3OHTA pump and degasser, L-

2200 autosampler, L-2455 Diode array detector, and L-2490 refractive index detector), UV/Vis

spectrophotometer (HITACHI U-2810), analytical balance (AL204, Mettler Toledo), pH Meter (SevenEasy,

Mettler Toledo), a stereo zoom microscope (STZ-45-BS-FR) with a digital camera (Caltex Scientific, Irvine,

CA), Bunton MACROZOOM-FL microscope system (Bunton Instrument Company, Inc.), and a

stereomicroscope (model ML-40STER, Home Science tools).

The formulation section of the facilities is equipped with a fume hood, FreeZone 2.5 Lyophilizer

(Labconco), an incubated orbital shaker (model 4450), vortex mixers (12-810-1, Fisher Scientific;VM-

3000,VWR), an orbital shaker (model 51300-00, Cole Parmer), heated magnetic stirplates (models

12620-982, 12365-82 VWR), a vacuum oven (model 1410, VWR), a refrigerated vapor trap (model

RVT4104 Savant), vacuum pumps (VP 100, Savant and 8907, Welch), a centrifuge (model 5702,

Eppendorf), an ultrasonic water bath (model 50HT, VWR), and a heated water bath (model 182,

Precision). The microneedle coating facility is equipped with coating apparatuses, syringe pumps, and X-

Y-Z micro-positioning systems. Supporting facilities include flammable safety storage cabinet, gas supply

lines and manifolds (nitrogen, carbon dioxide and compressed air), B-Pure deionization and water

filtration system, a microwave oven, a freezer, and refrigerators.

Deal Throughput

Apogee intends to finalize the acquisition of PSI technology as soon as funding is complete. The

Company plans to enter at least 3 research and commercialization collaboration in Q4 2011 and Q1-Q2


21

2012, one with the animal health vaccine company, another for a funded R&D collaboration with Global

Health or Government organization, and one with the commercial developer of vaccine of interest. Each

collaboration envisaged will give the partner access to ImmunoMer for use with their antigens. These

collaborations are expected to provide significant cash flow to the company in the medium term. Based

on these and other collaborations, Company envisions one licensing agreement in Q4 2012, one in Q3

2013, and another in Q1 2014.

Projected growth

To meet our stated objectives and deliverables the Company will need to add personnel, equipment and

acquire additional laboratory and office space.

Employees: We project our total staff will increase to 24 employees by 2016. In the business operations

group, significant emphasis will be placed on adding individuals with partnering capabilities, program

management, business development, and regulatory experience. On the R&D side, expertise will be

added in immunology, polymer and biochemistry, various areas of assay development, formulation and

manufacturing. The ratio of PhD to Technician (BS or MS level) for our laboratory staff will be roughly

1:2. Many upstream capabilities will be accessed through the Company’s corporate alliances and

through a strong network of outside advisors and vendors.


22

Business Model

• Product development partnerships with pharmaceutical and biotechnology

companies worldwide, license out application rights, maintain manufacturing

rights

• IgloPatch Technology: licensing model with multinational vaccine producers:

• Exclusive arrangement for 3-6 antigens

• Upfront payment of $5 - $20 million



• ImmunoMer H Technology: licensing model with smaller vaccine producers

or biotechnology companies:

• Non-exclusive arrangement for 1-2 antigens

• Upfront payment of $1 - $2 million (“Access Fee”)


• 10 - 25% of proceeds upon acquisition of vaccine by a multinational company


• ImmunoMer AH Technology: collaboration with Animal Health company

• Other: collaboration with Global Health or Government organizations

generating technology transfer fees


Celonova Bioscience(Peachtree City, GA)

PolyphosphazeneNanoparticlesEmbozeneTM

EmpolizationPP coated stent

Physicians Private

Competition


IntercellPatch

Vaccines/Bacterial Adjuvant

Pandemic Influenza and Traveler's

Diarrhea Vaccine Patches

Discovery- MarketPublic-$500MM

Market Cap

3MMicroneedles

(plastic)/TLR AdjuvantMultiple Clinical

Public-$61B Market Cap

Zosano PharmaMicroneedles with

PTH, EPO, GM-CSF/GMDP Adjuvant

Osteoporosis Phase IIPrivate-$90MM NEA,

Numera

Becton DickensonMicroinjection device/Alum

Soluble Vaccines On the marketPublic-$17B Market

Cap

Corium InternationalMicroCor™ Micro Delivery System

Small and large molecular weight

moleculesPrivate Private

Polyphosphazene Company

Intradermal Delivery/Adjuvant Companies

Other examples of Immunoadjuvants: AF03 (Sanofi Pasteur), ASO3 (GSK Biologicals), MF 59 (Novartis), IC31 (Intercell)


23

• Worldwide exclusive license from Georgia Tech for coated

microneedle technology

• Know-how and world’s expert scientists in

polyphosphazene field

• Drug Master File for PCPP as an adjuvant *

• cGMP produced PCPP*

• Polyphosphazene immunoadjuvant library,

polyphosphazene drug delivery library, and biomaterial

product candidates*

* Upon closing PSI transaction after funding

Competitive Advantages


24

Partnering

Company envisions one licensing agreement in Q4 2012, two in Q3 2013, and another in Q1

2014.

Leverage external resources

The Company does not plan to establish in-house capabilities to execute in-vivo evaluation of

our immunopotentiation and intradermal delivery. In addition to planned partnership, Apogee has

already established collaborations with Children Hospital Boston, and can reactivate previous

collaborations with VIDO and St. Jude Hospital and enter new R&D agreements to provide cost-effective,

flexible and timely access to animal models needed to evaluate our systems. The relationships with

governmental and university researchers provides a low cost (no cost) mechanism to investigate

broader applications of our platform.

Government funding

Apogee plans to apply for grant funding from Global health organizations and governmental

agencies to support preclinical and clinical development of its technologies. The Company has already

applied this strategy in an ongoing collaboration with Children Hospital of Boston, which allowed to get

support for some of Companies vital R&D efforts.

Royalties paid on licenses

The Company entered in a 50 year exclusive worldwide licensing agreement in March of 2007

for a microneedle technology with Georgia Institute of Technology.

Financial model assumptions – Revenues:

Apogee has already generated revenues external collaborations and believes it can continue and

increase generation of revenues from partnerships. In the early years, revenue is projected to come

from milestone payments and royalties. Baseline business projections foresee the completion of 3

corporate deals by early 2014.

Each deal gives a partner the right to use PSI’s technology with the antigen of interest, although in the

animal health vaccine area we expect to give exclusive rights to our technology for livestock and

companion market segments. The deal structure envisions a series of success-based milestones and

subsequent product royalties for each of the antigens.


25

PROJECTED REVENUES AND EXPENSES 2010-2016

($10,000,000)

($5,000,000)

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

1 2 3 4 5 6 7

2010 2011 2012 2013 2014 2015 2016

Revenues

Operating Loss/Gain

Total Expenses


26


27

Investment Rationale

• A strong balance sheet will strengthen Apogee’s negotiating

position with potential strategic partners

• Acquisition of certain assets of Parallel Solutions, Inc. (PSI)

for 700,000 shares of Apogee stock and 25% of future joint

venture payments will provide Apogee with access to

• PSI’s intellectual property portfolio

• Drug Master File

• cGMP produced material

• Polyphosphazene libraries (new adjuvants, drug delivery) and

other polyphosphazenes for potential biomedical and industrial

applications


28

Management Team

Herbert Stein, CEO and Chairman: Mr. Stein brings over fifty years of management experience to

Apogee and has served on the boards and in executive management positions at several life sciences

companies, including as Chairman and CEO of Organogenesis.

Paul J Murphy, Chief Financial Officer and Vice President of Finance: Mr Murphy has 25 years of

experience as Chief Financial Officer of public and private companies. Prior to joining Apogee, Mr

Murphy was an independent contractor with JH Cohn, LLP, where he worked on engagements with

public companies to design, assess and test controls for compliance with Section 404 of the Sarbanes-

Oxley Act of 2002.

Alexander K. Andrianov, Ph.D., Vice President of Research and Development: Dr. Andrianov has ~20

years of experience in the biotechnology industry having served as Chief Scientific Officer of Parallel

Solutions, Inc., and in various management positions at Avant Immunotherapeutics and Virus Research

Institute Inc (VSI). He has unique expertise in polymer chemistry and is the inventor of the

polyphosphazene immunoadjuvant technology. Dr. Andrianov is an author of more than 60 scientific

papers and book chapters, an inventor on 41 issued and pending patents, and an editor of the book

“Biomedical Applications of Polyphosphazenes”. Dr. Andrianov also has extensive academic experience

as a faculty member in Moscow State University (MSU) and visiting scientist at Massachusetts Institute

of Technology (MIT) with Professor Robert Langer.


29

Summary

• Apogee Technology is a biotechnology company pioneering advanced

vaccine and drug delivery systems via its proprietary technology platform

• Core expertise: biomedical polyphosphazenes and their integration into

value added products

• Vaccine antigens stabilized and adjuvanted by polyphosphazenes and

delivered via Apogee’s microneedle technology have demonstrated to

confer a more potent immune response using reduced amounts of antigen

and provide an extended shelf life

• Potential self-administration and reduced dependence on cold chain

distribution open up developing countries as attractive target markets

• Licensing agreements with vaccine developers, an animal health company

and Global Health or Government organizations are expected to generate

significant revenue from upfront, milestone, and royalty payments, as well

as funded collaborations

• In addition to vaccine and drug delivery applications, potential uses of

polyphosphazenes extend to biomaterials


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Appendix 1. References

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