Affinity NSF Final Presentation

AffinityTherapeutics

“Affinity-based” microparticle formulations to prevent surgical site infections by the extended, local release of antibiotics

2 Minute NSF I-Corps Story

http://youtu.be/regfKYgmJ4E

Team

Dr. Horst von Recum(PI)

Dr. Julius Korley(EL)

Dr. Thomas Facklam(IM)

Co-Founder and CSO of Affinity Therapeutics Translational Research Associate

Co-Founder Affinity Therapeutics Associate Professor, Case Western Reserve

University

PFI Advisor/Business Consultant Over 30 yrs of experience in roles from bench

scientist to CEO

Affinity Therapeutics' Technology Platform

• A tunable, sustainable drug release system

• Other applications for our platform:– Medical indications are very broad

and include regenerative medicine, oncology, etc.

– Advanced wound therapy market– Delivery of anti-cancer drugs and

anti-proliferatives– Any percutaneous implantable can

be infected; Applicable to most bio-materials and medical devices

History of Affinity Therapeutics

• Founded in November 2010

• PCT Application Published January 2011

• NIH Phase I SBIR awarded March 2012 ($400K)– 5 other Phase I

applications submitted

• Currently negotiating both an option license and space agreement

Case Western Reserve UniversityBiomedical Engineering

KeyPartners

Value Propositions

KeyActivities

Key Resources

Cost Structure

CustomerRelationships

Channels

CustomerSegments

Revenue Streams

Extended localDrug deliveryBioavailable and UnmodifiedInfection ReductionCost ReductionIncrease “Quality ofLife”

SBIRLicensingCo-DevelopmentStrategic Partnerships

Personal AssistanceTechnical Assistance

SurgeonsWound TherapySpecialistsHospitals

Cyclodextrin supplierClinical CollaboratorsMedical Device Cos.Manufacturers

Intellectual PropertyAccess to developersof technology

Formulation StudiesIn vitro analysisIn Vivo analysisLarge Animal ModelsPre-Clinical StudiesNon-Dilutive FundingClinical CollaborationsRegulatory PathIDE Submission

Infrastructure of Strategic PartnersSuch as Medical Device cos. Or “BigPharma”

ISO 10993 analysisClinical TrialsManufacturing

Canvas Version 1 (03/20/2012)

What We Thought…

– Be a medical device company focusing on at least 5 different indications

– Our customer was the physicians or surgeons– Gain device approval from the FDA– Manufacture the product (open our own plant)– Distribute the product (customer acquisition)– Sale the product (huge sales team)– Get reimbursement from both Medicare and

private insurance

Customers interviewed to test…

Research Scientist

Director, R&D

Program Manager

ConsultingMedical Device

Other companies

Associate Director

Associate Director

Marketing ManagerDirector, R&D

10

80

10

Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams

Cost ReductionProphylaxis of Hernia Mesh Repair Infection

Licensing, Royalties, Co-DevelopmentMilestone payments, Strategic Partnerships

Personal and Technical Assistance• Educating EU“Market-driven studies”Support of KP’s marketing plan

Medical Device Companies• (Exclusivity for

initial indication)

CROsMedical Device Companies• Hernia Mesh• General Dev.

IPAccess to developersof technology

Key PartnerPre-Clinical StudyFund RaisingClinical CollaborationsRegulatory

Infrastructure of Strategic Partners (as Med. Dev. Co.)

CRO’s, CMO’s, Regulatory, Strategic Marketing, Education and Branding

Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams





initial indication)






Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams





initial indication)






Market Research• Surgical Site Infections (SSIs)

– Market Size• SSIs occur in 1.5 million surgeries annually1

• $10 billion in annual U.S healthcare expenditures1

• SSIs account for16% of hospital-acquired infections2

– Market Drivers• SSIs not reimbursable• Growing patient population in U.S.• Prevention of infection and prevention of readmission (40%) 2

• Reduction of SSI incidence ratios by 25% by 20142

– Market Dynamics• Surgical Infection Prevention project (2002)

– Reduce SSIs by 90%2

• New CDC standards on prevention and regulation• Diverse application opportunities

1. Frost and Sullivan - Surgical Site Infections Pose Serious Threat and Increase Demand for Advanced Infection Control Technologies2. http://www.nj.gov/health/healthfacilities/presentations/prevention_lindenauer.pdf

Market Opportunity Hernia Mesh Repair

TAM=$1.1BHernia Mesh repair

SAM = $650MVentral Hernias

TM ≤ $650M

Lessons Learned about Value Prop

• Needs= prevention of SSI– Synthetic Mesh vs. Biological Mesh– Antimicrobial mesh sold by Gore– Protection that lasts 7-21 days

• Solution= Affinity Therapeutics’ Antimicrobial formulation– Formulated to be used with the stronger synthetic

meshes– antimicrobial activity for ~30 days

Lessons Learned about Value Prop

• We thought that SSIs were a big problem– We asked several the customers

• This was confirmed but other markets proposed– So we move forward

• We thought, “Focus on the total SSI Market”– We spoke with clinicians and industry experts and

ran the numbers• We decided it best to focus on one market

– We chose the Hernia Mesh Market

Stage 1 Safety study Stage 2 Effectiveness trial

Regulatory Pathways (Class II)

$2-3MM1-2YR

$3-5MM30 patients

1-2YR

US IDEUS 510(k)

$5-8MM2-4YR

Stage 1 Preclinical study

Stage 2Pilot trial

Stage 3Pivotal trial

Regulatory Pathways (Class III)

$2-3MM1-2YR

$3-5MM30 patients

1-2YR

US IDE$15-22MM

150 patients2-3YR

US PMA$20-30MM

4-7YR

Lessons Learned about Key Partners

• Critical for the following:– Regulatory hurdles– Clinical trials– Reimbursement– Manufacturing– Distributions– Marketing– Market penetration and Customer Acquisition

• Our new target is technology to “Proof of Concept” then partner

Lessons Learned about Key Partners

• What Makes Affinity an attractive partner?– True Platform technology

• Why will the partner? Customer Relationships– Have established relationships that they would like

to cultivate (i.e. surgeons or other clinical collaborators)

• At what cost to us?– Exclusivity vs. “Right to play”


Case WesternReserve TTO

FDA

StrategicPartner/OEM Hospitals

Patients

ContractManufacturers

Surgeons

DistributorsClinical

Collaborators

Business Ecosystem

= Revenue/Feedback= Information/Product


StrategicPartners

Business Ecosystem (In Hospital)

HospitalsInsurance

CompaniesStrategicPartners

Patients

ServicesRendered

InsurancePremiums

Reimbursement

Co-PaysOther fees

Group Purchasing Org. (GPO)



StrategicPartners

Business Ecosystem (In Hospital)

HospitalsInsurance

CompaniesStrategicPartners

Patients

ServicesRendered

InsurancePremiums

Reimbursement

Co-PaysOther fees

Group Purchasing Org. (GPO)


Newly Refined Business Strategy

• True Platform technology– Multiple products with broad range of uses and

clinical indications• Exclusivity on Hernia Mesh Repair infection

only to provide revenue for product development in other areas

• Company owned products

Summary

• Capital Efficiency– Using CROs– Strategic Partners

• Targeting growing unmet needs– Hernia Mesh market continues to increase

• Obesity and age

• License initial products to strategic partners and retain right to market future products under Affinity brand

Affinity is Open for Business!

Future Home of Affinity Therapeutics

KeyPartners

Value Propositions

KeyActivities

Key Resources

Cost Structure


Channels

CustomerSegments

Revenue Streams

Extended localDrug deliveryBioavailable and UnmodifiedInfection ReductionCost ReductionIncrease “Quality ofLife”



SurgeonsWound TherapySpecialistsHospitals


Intellectual PropertyAccess to developersof technology

Formulation StudiesIn vitro analysisIn Vivo analysisLarge Animal ModelsPre-Clinical StudiesNon-Dilutive FundingClinical CollaborationsRegulatory PathIDE Submission

Infrastructure of Strategic PartnersSuch as Medical Device cos. Or “BigPharma”



Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams

Extended localDrug deliveryBioavailable and UnmodifiedInfection ReductionDevice capable of preventing infection without impacting surgeryCost ReductionIncrease “Quality of Life”



SurgeonsWound TherapySpecialistsHospitals--Surgeons--Wound Therapy SpecialistsOutpatient SurgeryCentersMedical Dev. Cos.Veterinary Med.



Formulation In vitro and in vivo analysisPre-Clinical StudyFund RaisingClinical Collab.Regulatory ANDAIDE Submission

Infrastructure of Strategic Partners (as Med. Dev. Co. or “Big Pharma”



Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams

Device capable of preventing infection without impacting surgeryCost ReductionIncrease “Quality of Life”Prophylaxis of SSI



SurgeonsWound TherapySpecialistsVeterinary Med.Hospitals--Surgeons--Wound Therapy SpecialistsOutpatient SurgeryCentersMedical Dev. Cos.Insurance Cos.Medicare



Formulation In vitro and in vivo analysisPre-Clinical StudyFund RaisingClinical Collab.Regulatory ANDAIDE Submission




Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams

Cost ReductionProphylaxis of SSI

LicensingCo-DevelopmentStrategic Partnerships


Hospitals--SurgeonsMedical Dev. Cos.Insurance Cos.Medicare



Pre-Clinical StudyFund RaisingClinical Collab.RegulatoryIDE Submission




Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams


LicensingCo-DevelopmentStrategic Partnerships

Personal AssistanceTechnical Assistance• Educating EU

Hospitals--Pharmacy andTherapeuticsCommittee--SurgeonsMedical Dev. Cos.Insurance Cos.Medicare

Cyclodextrin supplierClinical CollaboratorsMedical Device Companies• Hernia Mesh• General Dev.Contract ManufacturersRegulatory Consultant


Pre-Clinical StudyFund RaisingClinical CollaborationsRegulatory(Class 1 or 2 vs. 3)US vs. EUIDE Submission


ISO 10993 analysisClinical Trials• 30 days; end point infection rateManufacturing, Distribution. Education of EU


Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams




Hospitals--Pharmacy andTherapeuticsCommittee--SurgeonsMedical Dev. Cos.Insurance Cos.Medicare

Cyclodextrin supplierClinical CollaboratorsMedical Device Companies• Hernia Mesh• General Dev.Contract ManufacturersRegulatory Consultant


Key PartnerPre-Clinical StudyFund RaisingClinical CollaborationsRegulatory(Class(1-3), USvsEUIDE Submission


ISO 10993 analysis, Clinical Trials• 30 days; end point infection rate,Manufacturing, Distribution, Education of EU


Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams





initial indication)

Group Purchasing OrganizationsHospitals--Pharmacy andTherapeuticsCommittee--SurgeonsMedical Dev. Cos.Insurance Cos.Medicare

Cyclodextrin supplierClinical CollaboratorsMedical Device Companies• Hernia Mesh• General Dev.






Key Partners

ValuePropositions

KeyActivities

KeyResources

Cost Structure


Channels

CustomerSegments

Revenue Streams





initial indication)

Group Purchasing OrganizationsHospitals--Pharmacy andTherapeuticsCommittee--SurgeonsMedical Dev. Cos.Insurance Cos.Medicare

Cyclodextrin supplierClinical CollaboratorsMedical Device Companies• Hernia Mesh• General Dev.




