Transcript HBL Financing 7.08 - Hadasit Bio

Hadasit Bio-Holdings Ltd. – “HBL”
(Tel Aviv Stock Exchange: HDST(
July 2008
Forward Looking Statements
This document/presentation contains forward looking statements. Words such as “estimates,”
“expects,” “intends,” “plans,” “believes” and terms of similar substance used in connection
with any discussion of future operational performance or financial results, identify forward
looking statements.
Such statements are subject to risks and uncertainties that could cause the actual results to
differ materially from these statements. The forward-looking statements contained herein
speak only as of the date of this document.
The Company expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to reflect any
change in the Company's expectations with regard thereto or to reflect any change in events,
conditions or circumstances on which any such forward-looking statement is based, in whole
or in part.
This document does not constitute or form any part of any offer or invitation to sell, or any
solicitation of any offer to purchase or subscribe for any shares in Hadasit Bio-Holdings Ltd.
or any of its affiliated entities nor shall it form the basis of, or be relied on in connection with,
any contract therefore.
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July 2008
The Value Chain in Israeli Biotech
Strategic
Partnering
Academy
& TTO’s
Incubation
Govt.
Support
Clustering
Specialized
Angels
& VC’s
Public
Investment
Co.
Yeda
Meytav
OCS
Bioline
Ofer HT
BioLight
Yissum
Rad-BIO
Magnet
Biomedix
Glenrock
Clal Bio
Ramot
Naiot
BIRD
Coronis
Maayan
BG Negev
CapitalPoint
Bio-Disc
HMO
Bio-Park
Pontifax
HBL
Hadasit
BriTech
Support: GMP, Regul., CRC, Underwriting,
IPOs, PR/IR, Analysis, Market-making,
HBL - Company Profile
Holdings in early-stage biotech companies (until completion of Phase I)
• 10 companies – All IP developed at Hadassah
• 3 areas (Oncology, Auto-immune diseases, Tissue engineering / Stem
cells)
• Criteria – Demonstration of Proof of Concept, Blockbuster Market
• Exit strategy - at end of Phase I
Leveraging Hadassah Hospital
• Source of Intellectual Property and future investment opportunities
• Skilled personnel, infrastructure, GMP facilities and clinical trials
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Established: September 2005
Traded: Tel Aviv Stock Exchange (HDST) – since January 2006
Investment rounds:
• IPO (January 2006) – $ 8 m
• Convertible Bonds (August 2006) – $ 10 m , $ 5 m converted (Feb.
2007)
• Strategic Investment (May 2007) - $ 2 m (Consensus Business Group)
Stockholders: Hadasit (owned by Hadassah) (52%), public (43%), CBG - (5%)
HBL Structure (7/08)
100%
Public 43%
Drug Engineering
52%
ConjuGate
30%
C.B.G 5%
H.B.L Ltd.
22%
Thrombo
tech
66%
Incure
25%
TK Signal
(UK)
Oncology
34%
4.5%
75%
Cell Cure
Forticell
Bio.
(Nasdaq)
Verto
Tissue Engineering
and Stem-cell
Medicine
100%
ProtAb
80%
KAHR
92%
Tolarex
Auto-immune Disease
4 Key Building Blocks – “F.I.M.S”
Finance
I.P.
Mgt.
Space
IPO
Hadassah
“Bio-Park”:
Bond
50 new
Patents per
year
Experienced
Managers
PIPE - CBG
OCS
Venture
Philanthropy
FP7
NIH
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Partnering
Heb.U.
U.PENN
All HMO
Experts
Seasoned
Pharma +
VC Execs.
Ph.D’s /
M.D’s
6 floors of
1,500 m2 o
Fully
customized for
Biotech
companies
GMP, GLP,
Animal
facilities,
Phase I center
2008 – Value Adding Milestones
 KAHR – HBL Investment, 5 New Compounds from UPENN,
OCS approval for $ 400 K, new VP, external investment
 Tolarex – HBL Investment, IND approval from FDA, Phase I
start, external investment
 ProtAb – Completion of humanization – external investment
 TK Signal – Preparation for Phase I, Phase I start
 Verto – Completion of Phase I trial, strategic partnership
 Incure – Expansion of trial data, Exit via strategic partnership
 ConjuGate – External Investment, Manuf., Phase I start
 BiolineRx – 2 X Phase II completions (BL1020, BL1040)
 HBL – Investment ($ 5-7 M)
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Hadassah Bio-Park - 2008
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First medical center “on-site” bio park – custom built for life
science companies (including labs,Phase I center)
Building upon infrastructure of Hebrew U. Med. School and
Hadassah University Hospital (conducting more than 50% of
all translational medicine research in Israel)
HU conducts over 40% of all Biotechnology research in Israel.
Hadassah Ein-Kerem campus includes Med. and Dentistry
schools, Nursing, Pharmacy &
HBL
Public Health schools
First building to include 6 floors:
total available space – 10,000 m2
Jerusalem municipality and JDA
provide significant financial incentives:
tax breaks and grants
5 HBL companies (+ HQ) to relocate
Investment Strategy
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High return on investment through investments before the
first clinical phase (Phase I)
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After proof of concept in animals and before completion of Phase I
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Value multipliers: X 10 to X 50
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Midway Exit planned after Phase I, clear dividend policy
Product target markets measured in the billions of dollars
(“Blockbuster”)
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Oncology, tissue engineering, stem-cell medicine, auto-immune diseases
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Answer to Unmet Clinical Needs (not improvement of existing drugs)
Risk Management
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Dispersing risk through a portfolio of 9 companies in different fields
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Professional identification of investments and guidance of the companies by a team of technology and business
experts
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Reducing company “burn-rate” by utilizing the infrastructure of Hadassah Hospital for development and clinical
research
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Huge pool of future investment options (IP) – getting in at “ground level” with rapid increase in value
1 Focus - Return on Investment
HBL’s “Sweet Spot”
Highest rate of success
vis-à-vis required
investment
% required
investment
Odds that company will
advance from this phase to the next
Percent of total investment
Required investment $m
Years
10
At Phase I
Increase in value of
10x to 30x
Approval
The Biggest Growth in Value Has Been at
Clinical Proof of Concept
Phase I/II Deals
Upfront only (No milestones
or royalties) – Ave. of 35 M
$700
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$ Upfront Total
No. of Deals
$600
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$ Millions
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12
$400
10
$300
8
6
$200
4
$100
2
$0
0
2001
2002
2003
2004
2005
SOURCE: Windhover’s Strategic Transactions Database, June 2007
2006
No. of Transactions
$500
2 Market Size
Company
Market size in
billions
Field/Treating
Market Size
Thrombosis, Myocardial
Infarction
Stroke – US$ 500 mm;
Cardiac Arrest – US$ 1 billion
ConjuGate
Drug Reformulation – Systemic
infections
Systemic infections – US$ 6 billion
KAHR Medical
Cancer, Inflammatory Diseases
Cancer + Autoimmune diseases – US$ 5 billion;
Protab
Inflammatory and Autoimmune
Disease
RA – US$ 5 billion;
Diabetes – US$ 3 billion
Cancer Monitoring and Cure
Diagnostics – US$ 1 billion;
Treatment related drugs – US$ 6 billion
Cell Therapy – Parkinson
Disease and MS
Parkinson – US$ 1 billion
MS - US$ 1 billion
Incure
Cancer Diagnostics and cure
processes
Diagnostics – US$ 500 mm;
Treatment related drugs – US$ 2 billion
Tolarex
Graft Vs. Host Disease
US $300 mm; Autoimmune disease – US$ 20
billion
Lupus Therapy
US$ 2 billion
Thrombotech
TK-Signal
Cell Cure
NeuroSciences
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Unmet clinical
needs
Verto
Management
Dr. Rafi Hofstein - Chairman of the Board. President and CEO of
Hadasit Ltd., the Technology Holdings Company of Hadassah
Medical Organization. Ex-President of Mindsense Biosystems Ltd.
Business Unit Director of Ecogen Inc., Langhorne PA after serving
as the Scientific Director of its Israel office. Ph.D. and M.Sc. in lifesciences and chemistry from the Weizmann Institute of Science,
B.Sc. in chemistry and physics from the Hebrew University in
Jerusalem. Dr. Hofstein completed postdoctoral training at the
Harvard Medical School in Boston, MA, in the departments of
biological chemistry and neurobiology. Founder of ILSI, advisor to
Israeli Govt., BoDs: Breath ID, Evogene, Bioline, ConjuGate,
KAHR, ProtAb, Tolarex.
Adv. Ophir Shahaf - CEO. Appointed March 2007 after serving as
VP of the Company since Jan. 2006. Ex-VP business development
at Protalix Biotherapeutics Ltd. Part of the founding and
management team of Clal Biotechnology Industries Ltd. as VP and
general counsel. LL.B. from Tel Aviv University, MBA from the
Stern School of Business at New York University. Teaches
biotechnology entrepreneurship and management, fellow of the
Merage Foundation at Irvine, CA. BoDs: Tolarex, ProtAb, Biokine,
Thrombotech, ConjuGate.
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Board of Directors / Advisory Board
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Prof. Shlomo Mor-Yosef, HMO Director General
Yuval Cohen, Fortissimo Private Equity
Doron Debbie (Consensus Business Group)
Tsipi Gal-Yam (External)
Yaron Kulas (External)
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Prof. Ruth Arnon (Weizmann)
Steven G. Burrill – Burrill & Co.
Tamar Howson (Bristol Myers Squibb, LexPharma)
Mary Tanner (Biogen, NY Hedge Funds)
Jonathan Silverstein (Orbimed VC)
Jonathan Fleming (Oxford Biopartners VC)
Cheryl Reicin (Torys LLP)
All department heads and leading physicians of HMO
External Investments in Companies
2 Major Strategic Investors / Partners have Invested in HBL
Portfolio Companies, :
 TEVA Pharmaceutical Industries - $ 1 M in Cell Cure
NeuroSciences (Aug. 2007)
– Recognition of leadership in HESC field
– Attractive terms for company (value, rights)
– Significant role in R&D, production and regulation
 Clal Biotechnology (CBI) – Option Exercise + additional in
Thrombotech (Sept. 2007)
– $ 750 K exercise fee + $ 500 K in follow on round
– Major shareholder participation (Total $ 1.75 M)
– Sufficient to complete Phase I trials (Stroke / MI)
– Experienced CEO and Chairman recruited
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HBL Product Pipeline (7/08)
Phase
III
PMA
Pha.
II
Phase
I / II
Done
Phase
I
IND
Prep.
Efficacy in
Animal
Models
Lead
Selection
Discovery
Product
Company
Lupus
Luposorb
Verto
Graft Vs. Host
Disease
ApoCell
Tolarex
Multiple
Myeloma
Fenol
Dopam
TK Signal
Reum. Arth.
Inf. B. Disease
AP6
Hard-to-heal
Wounds
OrCell /
FMB's
Forticell
Early Stage
Cancer detect
PR
Marker
Incure
Multiple Scel.
Parkinson
Neural
Progen.
CellCure
Auto Immune
Disease
TSCP's
KAHR
Myocardial.
Infar. Stroke
TBT218
Thromb.
Acute MI
Prostate C
BL1040
BL2030
BiolineRx
Systemic
Infections
Ampho.
B
ConjuGate
Indication
ProtAb
Progress in Portfolio Companies (I)
Cell Cure NeuroSciences
• Investment agreement with TEVA ($ 1 M at $ 13 pre-$)
• HBL holdings increased to 34.5%
• All IP related to Neurological Disorders (Parkinson, MS,
Alzheimer’s) – permanently released and owned by the company
• Receipt of $ 2 M in "soft funding" – Michael J. Fox, ALS,
Beresheet, OCS
• New VP of R&D, 4 additional researchers (>20 employees overall)
Verto
• Completion of Phase I/II trial – 10 patients w. no side effects,
measurable therapeutic benefits. Trial complete – analysis and
preparation of final report - ongoing.
• Discussions with potential strategic partners awaiting additional
clinical data
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Progress in Portfolio Companies (II)
ProtAb (PTK)
• Humanization and production of the lead antibody underway
(Antitope – Cambridge, UK). First samples arrived and tested.
• OCS approved 60% of R&D budget ($ 500 K).
• Discussions with private and VC investors.
• Significant interest from strategic partners.
Thrombotech
• Closed investment following option agreement with CBI ($ 1.75
M), including 300 K from HBL.
• Recruited experienced CEO and Chairman.
• Full set of pre-clinical and toxicology trials – repeated in "external"
lab with excellent results
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Progress in Portfolio Companies (III)
Tolarex (PTK)
• Advanced preparations for clinical trial – Q1/08, Passed IRB,
awaiting MOH approval and pre-IND at the FDA
• Additions of personnel (7) and equipment. OCS approved R&D
budget of $ 1.1 M (60% support)
• CEO – experience in drug development (Alon Moran – BioMass)
KAHR Medical (PTK)
• Negotiations with U. Penn for significant expansion of IP basis (5
new Compounds, based on TSCP’s - immune-related proteins)
• Additional investment by HBL, Application for OCS support
• Manufacturing contracts signed with Cobra and Invitrogen
• CEO – Ex-VP of Compugen (Dr. Noam Shani)
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Progress in Portfolio Companies (IV)
Incure
• Expansion of ELISA study – 40 patients. Groups added: elders,
smokers, pregnant.
• Data showing detection of cancer metastases via blood sample.
• Negotiation with US strategic partner – licensing & financing deal.
• Next step – commercialization via design of diagnostic kit
ConjuGate Ltd.
• Platform targeted at unmet need – highly toxic drugs with
adverse side effects
• Products to improve efficacy while eliminating toxicity, close to
phase I with lead product
• Leading scientists, strong IP, 3 batches already produced.
• Significant equity (33%), BOD representation (2 of 5) and
leading position in BD effort.
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Financial Data
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$ 3.0 in cash, as of 1/6/08
3 Leading companies (PTK) raising between $ 3-5 M each
All companies show major progress since HBL Investment
Timeline: 3 companies in Phase I within 12-18 months
Pipeline Potential: exclusive mandate (“first look”) for IP
from 1,200 MD’s/PhD’s at Hadassah, 250 patents yearly
 Top-notch science, IP protection, management
 HMO infrastructure allows for efficient financing, low BR
Current PIPE
 $ 5-7 M at par + warrants. Commitment from Hadassah,
CBG and other key shareholders to participate.
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Summary
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All companies are funded by HBL, partners
Leverage of “soft funds”: OCS, research foundations
Science, IP and Infrastructure – HMO
Key milestone events expected (Phase I, analyst
coverage and external investment)
Validation of strategic model via external strategic
investors (CBG, Teva, CBI)
Clear Exit strategy at end of Phase I
NAV = 65% discount. Target of 7.5 NIS.
Share price allows major appreciation linked to
milestones
Thank You
Ophir Shahaf, CEO
Hadasit Bio-Holdings Ltd.
Tel.:
+972-54-520-1177
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