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1HORIZON 3 BIOTECH FUND h3

INVESTING TO CHANGE LIVES GLOBALLY

Investor PresentationNovember 2020

HORIZON 3 BIOTECH FUND


IMPORTANT NOTICE

This presentation is intended as general information for wholesale clients (as defined by the Corporations Act) only and should not be passed on to retail investors.

Interests in Horizon 3 Biotech Fund I (“Horizon 3 Biotech”) will be available to wholesale clients only and issued by Melbourne Securities Corporation Ltd ACN 160 326 545, AFSL 428289 as trustee for Horizon 3 Biotech (“Trustee”). Horizon 3 Biotech Pty. Ltd ACN 640 449 887 is the investment manager of Horizon 3 Biotech (“Investment Manager”), and is an authorised representative of the BK Consulting (Aust) Pty Ltd ACN 134 397 08, AFSL 334906 (Authorised Representative No. 0012828862).

This presentation has been prepared by the Investment Manager. It may include economic and market commentaries based on proprietary research, which are for general information only. The Investment Manager believes the information contained in this presentation to be reliable, however its accuracy, reliability or completeness is not guaranteed. Any opinions or forecasts reflect the judgment and assumptions of the Investment Manager on the basis of information as at the date of publication and may later change without notice. These should not be taken as a recommendation of any particular strategy or investment product. Past performance is not a reliable indicator of future results.

Any advice in this presentation is general in nature only and does not take into account your personal objectives, financial situations or needs. Before making any investment based decision, carefully consider the appropriateness of the advice in light of your financial circumstances and seek independent personal financial, legal and tax advice.

Horizon 3 Biotech is currently open to investment. Investors should obtain a copy of the Information Memorandum (“IM”) when it becomes available and consider the IM before making any decision about whether to acquire an interest in Horizon 3 Biotech. The IM will be available using the contact details provided at the end of this presentation. Investors should consider the information in deciding whether to make a future investment.

All investments carry risk and may lose value. Investment in early stage start-ups is high risk. To the maximum extent permitted by law, the Investment Manager and each of its directors, employees, agents, representatives and advisers disclaim all liability to any person for any loss arising, directly or indirectly, from the information in this presentation and any investment in Horizon 3 Biotech.

No part of this presentation may be reproduced in any form, or referred to in any other document, without express written permission of the Investment Manager.


INVESTING TO CHANGE LIVES GLOBALLY

Horizon 3 Biotech targeting a $100m investment fund, with $10m raised

Investing in up to 10 high potential

biotech and medtech

companies targeting a

conservative 20% IRR

Public & Private companies focussed on

Australia, with US and China deal

flow

Partnering companies aiming to change lives for millions of people

worldwide


DIVERSIFICATION


UNIQUE PORTFOLIO EXPOSURE

• Biotech VC funds are early stage, long-term illiquid portfolios, typically Aus/NZ domiciled portfolios.

• We invest in Public and Private companies with near term valuation inflection points on their path to new markets.

• Very difficult for sophisticated/institutional investors to get biotech and medtech exposure to emerging companies in the Australian market.

• On average 10% of family office portfolios are VC investments. 80% of family offices with exposure to VC funds invest via sector focussed funds and sub-$100m funds (71%) are most popular.*

*Source: Silicon Valley Bank Global Family Offices in VC Report, 18 August 2020

WE TAKE COMPANIES OUT OF THE SECOND VALLEY OF DEATH


TRACK RECORD


INDUSTRY EXPERTS

Chief Investment Officer, Matt McNamara involved with several high performing

biotech and life sciences investment funds

IB AUSTRALIAN BIOSCIENCE FUND I-2008• $41.8m fund• IRR = 22.5% net of fees to investors• 12 public and private investments, 12 exits• Top quartile Ex US PE/VC Fund

ASIA PACIFIC HEALTHCARE FUND II-2012• $55.8m fund• IRR = 24% (Nov 2019) (Unrealised)• 7 public and private investments

BIOSCIENCE MANAGERS TRANSLATION FUND I-2017

• $100m fund• IRR = 44% (Nov 2019) (Unrealised)• 6 public and private investments

Executive Director, Jian Sun owner of Huikang Group in Xi’an China since 2001 with

operations in Australia since 2004

HK BIO-TECH• R&D Enterprise of Huikang Group – started

in 2010 - 76 expert R&D staff in Xi’an China.

• 65 new invention patents granted in China, 9 patents granted in Australia, currently 78 patents pending in China, US, and Europe.

HUIKANG GROUP• Leading experts in protein and peptide

research• Over 4,000 staff in 30 cities in China in

their skincare business’• Group turnover A$200m• Net worth A$800m


INDUSTRY EXPERTSDR BEV THOMASSenior Investment Professional

• Currently Senior Investment Specialist at Clean Energy Finance Corporation. • Formerly CEO of Nucleus Network and grew revenue >100% and profit >250%

over 3 years. Nucleus supported 200 clinical small molecule and biologic candidates in their transition into the clinic for local and international startups and global pharmaceutical companies

• Formerly Brandon Capital Investment Manager – Ran due diligence for Q-Sera, BACE Therapeutics, See-D4, Otifex, and Fibrotech among others.

PAUL FIELDLife Sciences, Business Development Executive

• Early stage commercialisation expertise transactions completed across infectious diseases, dermatology, autoimmune diseases, cancer and other therapeutic areas with global pharma companies.

• Currently advising Alsonex, Marinovo, Achiko, and HK Bio-Tech, Australian representative of Global Antibiotic R&D Partnership

• Formerly CEO and Executive Chairman of Bio-Link as well as Senior Investment Specialist of Life Sciences and Advanced Manufacturing at Austrade

DR QIBING MEIPharmacologist

• One of the leading Chinese experts in new drug evaluation with a career spanning 41 years in pharmacology.

• Dr. Mei has Undertaken more than 11 national level projects with over 500 bio-tech industry publications

• 12 invention patents granted in China• Scientific Chinese person of the year award in 2015.

SCOTT POWERInvestment Analyst

• Life Sciences sector specialist Involved in dozens of capital raisings for primary and secondary issues in the biotech sector

• Two highlights, Volpara Technologies (VHT) which has developed software to aid in the early detection of breast cancer, completed its IPO in 2016 with a market cap of $50m, today has a market cap of $370m, wit secondary raisings of $80m

• Mach 7 (M7T) which has software used in hospital for storing, managing and prioritising medical images has recently completed two secondary raisings totalling $57m and seen its market cap increase from $94m to $254m


INVESTMENT CASES FROM THE CIO

TECHNOLOGY ReCell uses own patients skin to repair burns, ulcers, scars & dyspigmentation on an area 80 times larger then the donor site.

A superior Left Ventricular Cardiac Assist device developed for people awaiting a heart transplant and in human trials for people who would not be candidates for heart transplants.

Developing a closed loop feedback spinal cord stimulation (SCS) technology to treat chronic pain, initially back pain.

STATUS ASX:AVH ASX:HIN, NASDAQ: HTWR Private

INVESTMENT RATIONALE

Our understanding of the technology highlighted mismanagement of commercialisation process.

Our understanding of the global heart pump market made us realise Heartware was superior to all other available and in research LVADs and was grossly undervalued.

Science was sound therefore was an execution play. The team understood the technology and competitors so appropriate improvements could be made.

VALUE ADDED Turnaround of the clinical trial and Board. Assisted in their BARDA application and focused the company away from sales to FDA approval accompanied by a HECON study to justify an increase in price.

Pushed on the company to open dialogue with failing/inferior LVAD companies. Findings made it clear to the world Heartware was superior in the eyes of the competition.

Encouraged the company to engage with US investors that would understand the superior technology. This resulted in the largest Healthcare VC investment in Australia for 2019 and Corporate investments.

RETURN 4.5x 4.26x Anticipated 5-10x

EXIT MECHANISM On market sale On market sale TBC

AVITA MEDICAL HEARTWARE SALUDA MEDICAL


INVESTMENT PROCESS


THE ACHILLES HEEL APPROACH

INVESTMENT SELECTION PROCESS FURTHER DUE DILIGENCE PROCESS

Screen hundreds of public or private drug, device, diagnostic and digital healthcare companies.

Opportunity must satisfy the following criteria:

• IP provides global monopolistic rights in an unmet medical need/sector.

• Proof of technology working

• Valuation such that our investment ‘might’ deliver a ‘1 times return per annum’

• No competition ahead of the company

• Management experienced and successful in commercialisation of healthcare products.

• Health impact applicable to patients globally

• Key Opinion Leader review

• Clear proven Regulatory pathway

• Manufacturing pathway clear and/or proven

• Use of Funds/Business Plan

• Board and Management review

• Clean capital structure

• Confirm Pharma/Medtech exit prospects with comparable exits in market

WE DON’T FALL IN LOVE WITH TECHNOLOGIES WE HATE THEM STRAIGHT AWAY


TARGET PIPELINE


PROPRIETARY INVESTMENT ORIGINATION

Screen hundreds of opportunities

1-in-100 opportunities receive investment Progress highest potential investments to investment committee

(CURRENT LIVE DEALS)

PIPELINE OF HIGH POTENTIAL GLOBAL OPPORTUNITIES IS CONSTANTLY UPDATED

VIRAL ONCOLYTIC CANCER TECHNOLOGY COVID-19 THERAPEUTIC

• Management previously exited a similar company to Pharma for $500M, who are doing the Phase III trials for FDA registration

• Secure IP position

• Timeline to proof of concept - 1 year

• FDA approved medication being repurposed for COVID-19 mild to moderate patients.

• US Army paying for clinical trial to confirm efficacy.

• Emergency Use Authorisation highly likely.

• Once efficacy confirmed, US Army to place an order for 10 million doses.

EXPECTED RETURN: 2 YEARSPOTENTIAL ROI: 8X

EXPECTED RETURN: 3+ YEARSPOTENTIAL ROI: 10X


INVESTMENT HIGHLIGHTS

$100 MILLION FUND: Deployed to credible public and private companies in the Australian and global human healthcare sector

INTERNATIONAL TEAM: CIO, Matt McNamara has strong biotech funds management track record, and leads an experienced life sciences team across Australia and China

IMPACT INVESTING TO MAKE A HEALTH DIFFERENCE FOR MILLIONS GLOBALLY

CONSIDERABLE INVESTMENT RETURNS: Conservative target >20% IRR net to investors, resulting in regular distributions to investors.


HORIZON 3 BIOTECH FUND DETAILS


HORIZON 3 BIOTECH FUND SUMMARY

TARGET FUND SIZE $100 million

SEGMENT Active investment in a balanced portfolio of majority Australian public and private late pre-clinical/clinical stage therapeutics, and medical device feasibility/pivotal stage companies

PROPOSED FUND ALLOCATION Assuming $100 million up to 10 investments of between $5-20 million acting as lead investor

MINIMUM INVESTMENT $500,000 unless specifically approved by the Fund Manager

FUND STRUCTURE Unit Trust

EXPECTED FUND TERM Evergreen. Investment period of 3-5 years

OBJECTIVE The Fund will aim to deliver returns >20% IRR pa to investors

PERFORMANCE FEE 20% of the outperformance over the 8% pa hurdle return

MANAGEMENT FEE 2% per annum of NAV (plus GST) in addition to a performance aligned incentivised carried interest structure

DISTRIBUTIONSSale on market to divest holdings of public companies. Trade sale or IPO from investee companies or secondary share buyouts at later investment stages of private companies. Capital returned to investors as divestments made

INVESTing to change lives globally �Important Noticeinvesting to change lives globally DiversificationUnique Portfolio Exposure TRACK RECORDIndustry EXPERTS INDUSTRY EXPERTSInvestment caseS FROM THE CIOInvestment processThe Achilles Heel ApproachTARGET PIPELINEPROPRIETARY Investment ORIGINATIONInvestment HighlightsHORIZON 3 BIOTECH Fund DETAILSHorizon 3 Biotech Fund Summary

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HORIZON 3 BIOTECH FUND › wp-content › uploads › Horizon3Biotech-1.… · Interests in Horizon 3 Biotech Fund I (“Horizon 3 Biotech”) will be available to wholesale clients