CASE STUDY: Avid RadiopharmaceuticalsJim Datin, EVP and Managing Director, Safeguard Scientifics
Forward Looking Statements
Statements contained in this presentation that are not historical facts are forward looking statements which involve certain risks and uncertainties including, but not limited to, risks associated with the uncertainty of managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, our ability to execute our strategy, the uncertainty of the future performance of our partner companies, acquisitions and dispositions of additional partner companies, the inability to manage growth, government regulation and legal liabilities and the effect of economic conditions in the business sectors in which our partner companies operate, negative media coverage and other uncertainties as described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.
Safeguard does not assume any obligation to update any forward looking statements or other information contained in this presentation.
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About Safeguard Scientifics
Safeguard Today
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Recent Success Stories
Acquired By Proceeds*Cash-on-Cash
Return
$38M 4x
$138M 13x
$208M** 3x
$41M 3x
* Includes amounts held in escrow as of June 30, 2012 which are deemed likely to be realized during 2012, if any, but not unearned milestones / earnouts, where applicable.
** Proceeds include $61M from sale of CLRT shares during Q3’09.*** Based on achievement of difficult earnout provisions.
Market Cap Increased 5x
Return Potential Could Approach 8x***
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“The Success of Avid Pharmaceuticals from an Investor's Point of View“
CASE STUDY
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Avid’s Product Portfolio
Cognitively Normal Elderly“Probable Alzheimer’s” Patient
ALZHEIMER’S
PARKINSON’S andDEMENTIA WITH LEWY BODIES
Significant Market Opportunity
U.S. Prevalence of Alzheimer's (Millions of Patients)
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1990 1995 2000 2005 2010 2015 2020 2025 2030
Alzheimer’s disease affects millions of older Americans....
… yet current diagnostic methods are inaccurate.
Souces: American Academy of Neurology Practice Parameter for Diagnosis of Dementia; Morgan Stanley AD Market Report, 2003; U.S. Census Bureau
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About the Founder
• 33 years old when he founded Avid Radiopharmaceuticals• 20+ peer-reviewed publications; 2 NIH-funded grants on Alzheimer’s disease research• E&Y Entrepreneur Of The Year® Award in 2009• Philadelphia Business Journal “40 under 40” in 2006• Scientific Director of High Throughput Screening and Drug Discovery at the Center for
Neurodegenerative Disease Research at the University of Pennsylvania• Resident in Pathology; Fellowship in Neuropathology – Hospital of UPenn • M.D., Ph.D. – University of Pennsylvania • B.S., Molecular Biochemistry – Yale University
Daniel M. Skovronsky, M.D. Ph.D.Founder and CEOAvid Radiopharmaceuticals, Inc.
World Class Team
Daniel M. Skovronsky, M.D., Ph.D. – President & CEO
Hank F. Kung, Ph.D. – Chairman Scientific Advisory Board
Franz Hefti, Ph.D. – Chief Scientific Officer
Richard Baron – Chief Financial Officer
Alan P. Carpenter, Jr., Ph.D., J.D. – Business Development
Michael Pontecorvo, Ph.D. – Clinical Development
Chris Clark, M.D. – Medical Director
Chris Bunting – Marketing & Sales
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Background
Board Members and/or Investors
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History of Avid Radiopharmaceuticals
2005 Founded Spun out of UPenn Seed FundingRaised $500K
2006 Series A/B Raised $9M
2007 Series C Raised $26M
Alzheimer’s Product Phase I
Licensing Agreement:
Bayer Schering Pharma
AwardsFrost & Sullivan ETC Enterprise
Award
2008 Alzheimer’s ProductPhase II
Parkinson’s ProductPhase I
FDA Advisory Committee Meeting for Alzheimer’s
Product
2009 Series DRaised $35
Alzheimer’s ProductPhase III
Parkinson’s ProductPhase II
Diabetes ProductPhase I
2010 Alzheimer’s Product NDA
Acquired by
The Results for Safeguard?
• Safeguard deployed $12M in Avid
• Eli Lilly acquired Avid for initial payment of $300M, plus an additional $500M contingent upon potential future regulatory and commercial milestones for Alzheimer’s product
• Initial Proceeds were $36M, Constituted 3x CoC return for Safeguard
• CoC return for Safeguard could approach 8x based on Avid’s achievement of some difficult regulatory and revenue milestones
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Safeguard’s Capital Deployment Criteria: The ‘5Ms’
• Management – How’s the management in this organization? Does it need to be augmented?
• Market – Is the market large enough to build a real business, or is it just large enough to have a successful product line?
• Model – Does the business model enable valuation growth?
• Momentum – Are the momentum indicators showing that the company has its back to the wind as opposed to its back to the wall?
• Moat – How defensible is a company’s competitive positioning?
CASE STUDY: Avid RadiopharmaceuticalsJim Datin, EVP and Managing Director, Safeguard Scientifics