Oral biologic drugs like oral Insulin

1© Spark Biotech, Inc., 2004-2005 All Rights Reserved.

Oral biologic drugs like oral Insulin


Biologic drugs are growing at a rapid 16% annually Most biologics (like Insulin) must be injected

Easy to administer biologic drugs – Oral Delivery

Opportunity

MarketSituation

Unmet Need

Spark Biotech’s Solution


Market for lead drugs

Therapeutic Protein and biologics market estimated at $50 Billion by 2010*

InsulinGlobal sales forecast in the diabetes

market for Insulin is ~$10.3 B in 2008 with a CAGR of 16.2%1

Human Growth HormoneIn 2001 worldwide Human Growth

Hormone (hGH) sales were ~1.5 B with a CAGR of 8%2

* Source: ”Therapeutic Proteins: Strategic Market Analysis and Forecasts to 2010”, DataMonitor Report #:DMHC18031 Source: ”Drugs of Tomorrow 2001: Diabetes”, DataMonitor Report #:DMHC17382 Source: ”Human Growth Hormone – Delivery Technology Driving Market Growth”, DataMonitor Report #:BFHC0519


Management TeamManagement Team

Dr. PanduRanga Rao Koritala

Chairman & CEO

Over 40 years of experience in biopolymer researchPublished over 160 research papers and in 3 booksDirector (highest level) scientist at Indian National Lab32 PhD. Students completed their doctoral work with his guidance

Entrepreneur with two successful product launches

S. Bobby Koritala COO and President

Former Director of Technology, Blue Cross Blue Shield Grew start-up software firm to over 170employees and $40 Million in revenue before acquisition

Ronald J. Richmeier Business Development

Genentech – Director - Sales and Marketing19 Years Pharma industry experience

Anand Janardhan Clinical Development

Pfizer/Pharmacia – Manager - Clinical DevelopmentCelebrex drug development

Matthew Kenning Mfg Process Development

Manufacturing excellence initiativeBiochemical manufacturing – Senior Mgmnt


Nanospheres and Microspheres Unmodified drug

molecule Encapsulation

Natural polymer based microspheres and nanoparticles

Mechanism of action Carrier device

containing nano/microspheres

Physiologically natural delivery path

Liver targeted

TranscellularParacellular

Transcytosis M-Cells on Peyer’s patches

Sparkulin™ - Oral delivery WHERE the body needs it

Insulin


Oral reformulation of Biologic drugs

Spark’s Technology

Spark Platforms- Gelatin- Chitosan- Alginate- Protenoid (P)- Protenoid (A)- PCL-PEG

Drugs Studied- Insulin- BSA- pDNA- Vaccines- Anti-cancer drugs- Contraceptive

Studies - In vitro- In vivo models

Customizable for …- Range of molecular sizes- Release characteristics- Dosage- Targeting- Stimuli sensitive


Making Insulin Therapy Effective

70 mg/dL

160 mg/dL

Time

High Glucose (Hyperglycemia)

Low Glucose (Hypoglycemia) Blo

od

Glu

cose

Time

High Glucose (Hyperglycemia)

Low Glucose (Hypoglycemia)

Today’s Insulin Therapy Sparkulin™ Therapy


Sparkulin™ - On Demand Insulin ReleaseWHEN the body needs it

Enzymatic Reaction

Glucose DiffusionGlucose

Enzymes

Unmodified Insulin

Swelling

Insulin Release

Normal Glucose Levels


Development Status

Six different oral biologic delivery technologies studied in-vitro and in-vivo

In-vitro and animal studies performed for oral delivery of insulin

0

50

100

150

200

250

300

0 4 8 12 16 20 24 28 32

Time (Hours)

Blo

od

Clu

cose

Lev

el (

mgs

Glu

cose

/10

0ml B

lood

)


Development Status

Patent pending and other patents in process

Proof of concept human study of oral delivery carrier conducted

Partnership discussions with Bharat Biotech – Oral Heparin and in early discussions with Genentech, J&J, Eli Lilly, Takeda, and Novo Nordisk

Completing pre-clinical in-vitro and rat model study of glucose-sensitive, on-demand oral Insulin - Sparkulin™

R&D collaboration with Argonne National Laboratory for nano/microsphere characterization (SEM & TEM)

SEM – Scanning Electron Microscopy, TEM – Tunneling Electron Microscopy


Spark’s Business Model

Initial clinical development and commercialization for sales in India Partnership with large Bio-Pharma company for clinical development

and sales in US Value Propositions

Competitive advantage Product lifecycle management

Market expansion Pricing power

OtherDrugs

OralEPO Oral

hGH

{

Sparkulin™

Spark Biotech

Partnering


Development Milestones

FDA – Food and Drug Administration of USAIND – Investigational New Drug ApplicationNDA – New Drug Application for marketing drug

2006 2007 2008 2009 2010 2011 2012 2013

CMD

NBE

CMD

CMD

CMD

CMD CMD

CMD

CMD

CMD

CMD

CMD

CMD

CMD

NBE

NBE

NBE

NBE

NBE

NBE

NBE NBE

NBE

NBE

NBE

NBE NBE

NBE NBECommercial Marketed Drug

New Biologic Entity

USA - Insulin

Pre-Clinical Phase I Phase IIIPhase II NDA

$ 20M $ 25M $ 45M Royalty

Pre-Clinical Phase I Phase II Phase III NDA

USA - hGH Royalty$ 5M $ 7.5M $ 15M $ 20M$ 5M

India - InsulinPre-clinical and Clinical

2006 - 2008


Investment Strategy

Several rounds of funding to support pipeline development

Seed/Series A$4.9 M

(2006)

Series B

$15 M

(2008)

Series C

$25 M

(2009)

Exit

>$300 MValuation

(2010)

Seed/Series A – Use of proceeds Complete pre-clinical studies and file IND of Sparkulin™ with

USFDA Complete Phase I and II Clinical development of Sparkulin™

in India Business Development

16x return at exit for Seed/Series A investors in 4-5 years


Cash Flow and Profit & Loss

Revenues grow significantly upon sales of Sparkulin™ in the USA

Cash flow and balance remains positive

($50.00)

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

2006 2007 2008 2009 2010 2011 2012 2013

Inflow

Outflow

Cash Balance

P&L


Spark Biotech – Success Factors

Large and growing market - Build up opportunities

Risk reduced path to commercialization Established Biologics Unmodified drug molecule and FDA approved polymers used Speed to market – Fast development and commercialization in India,

which contributes to speed of development in the USA

Broad applicability of technology and flexibility

Business model reduces burn rate

Depth of experience


Orally delivered biologic drugs - Sparkulin™

Orally delivering Insulin where and when the body needs it

Documents

Oral biologic drugs like oral Insulin