This document summarizes the commercialization options for early stage discoveries at universities. It discusses establishing a startup company called NeoBrain Pharma focused on developing pain treatments discovered by Professor Min Zhuo at University of Toronto. NeoBrain has three drug discovery programs, has filed several patent applications, received $150k in grant funding, and is seeking $5 million in financing to advance compounds through preclinical testing and business development activities over the next three years. The document provides an overview of NeoBrain's lead compound NB001 which has shown effectiveness in animal models of neuropathic pain, and compares it to existing pain drugs. It also outlines NeoBrain's intellectual property protection, proof of concept data, financial requirements, and ongoing R

1. Exploiting Early
Staged Discoveries
BioEntrepreneurship
Konrad Powell-Jones
Manager, Medical/Biotechnology
December 4, 2006

2. Innovations at University of
Toronto(IUT)
Established in 1980 (Innovations
Foundation)
• Goal: maximize the impact of > $2
million spent every day on research at
UT and the affiliated teaching hospitals
(such as SWCHSC)
• IUT services now focused on the UT
community
• We help researchers and businesses
capitalize on unique opportunities

3. What is Innovation?
The process of making improvements by
introducing something new (Oxford
Dictionary)
The successful exploitation of new ideas
(Dept. of Trade and Industry, UK)

4. How do you exploit your early
stage discovery?
Protect it (patents,
copyright, trade
secrets)
then
Further
developmental
research
then
Out-License it
or
“Ever feel you’re on the verge of an
Create a Start-Up
incredible breakthrough?”
company

5. Technology Transfer
Business
In Canada
Develop
60% have TT
offices
Financing
University
Protect
Discovery

6. The Process in Summary
Preliminary Prior
Discovery/Observation
Art Analysis
Preparation of Invention Disclosure Preparation of brief description
and preliminary claims
Review by I.P. Committee
Review Proposed Disclosure and
Prior Art with Patent Counsel
Decision to YES
Prepare Patent
YES Assessment
Application
Patentability
NO
NO
Additional YES
Studies Prepare Application Patent
Assess Inventorship Counsel
NO Continuations
Submission of Provisional Application
Divisionals etc.
File

7. What are the
Commercialization Options?
License out to existing company
Start a new company

8. But what will you encounter…
……in the real world!!!!

9. The Big Picture
Unmet Medical
Aging Needs
Population
Biomedical
Discoveries
Knowledge
Translation
Innovation Stagnation
Payers
Perspectives
Regulatory
R&D
Perspectives
Productivity
Escalating R&D
Costs

10. Industry Productivity vs. Investment
“The Challenge”
Total R&D Investment ($Billions)
$35
$30
$25
$20
$15
$10
# NCEs
$5 60
40
20
$0 0
2001
2003
2002
1984
1970
1971
1972
1973
1975
1976
1977
1978
1982
1985
1986
1987
1988
1989
1992
1994
1995
1997
1999
2000
1974
1979
1980
1981
1983
1990
1991
1993
1996
1998
Source: 2004 PhRMA Annual Survey, 2003/2004 PAREXEL’S Pharmaceutical Industry Sourcebook

11. Development Process: Bottleneck to
Delivery of New Products
Compound Success
Compound Success
Years
Rates by Stage
Rates by Stage
0
0
5,000–10,000
2
2
Discovery 5,000–10,000
Preclinical Testing Screened
(2–10 Years)
Screened
Laboratory and
4
4
Animal Testing
250
6
6
Enter Preclinical
Phase I
20–80 Healthy Volunteers Used to
Testing
8
8
Determine Safety and Dosage Phase II
100–300 Patient Volunteers
10 Used to Look for Efficacy
10
Phase III
and Side Effects 5
1,000–5,000 Patient Volunteers
12
Used to Monitor Adverse Enter Clinical
12
Reactions to Long-Term Use
Testing
14 FDA Review Approval
14
Additional Post-
Marketing Testing
16 1
16
Approved by the FDA
Net Cost: $802 Million Invested
Over 15 Years
Source: PhRMA Pharmaceutical Industry Profile 2003, Chapter 1: Increased Length and Complexity of the Research and Development Process. And
DiMasi, JA, Hansen, RW, Grabowski, HG. “The Price of Innovation: new estimates of drug development costs.” J of Health Economics. 2003:22:151-185.

12. Patients and Physicians Waiting for
Treatments
8% of compounds entering Phase 1 will
make it to market, down from 14 % fifteen
years ago
Cost of development are escalating
Failures due to lack of safety and/or
efficacy
Inability to predict failures

13. News Flash: Lipid Drug Study
Halted
Pfizer’s CETP inhibitor which increases HDLs
causes serious adverse events.
Pfizer stops 15,000 patient Torcetrapid
study, withdraws drug!!
81 patients taking Torcetrapid and Lipitor
died cf. 51 taking Lipitor alone
Torcetrapid patients also showed an
increase in angina, CHF and clogged
arteries.

14. Improving Development Sciences
New Biomarkers and Surrogate
Endpoints
Safety
biomarkers
! Pharmacogenetics Efficacy Surrogate
biomarkers
! New Imaging techniques endpoints
X
! Target therapies
Patients
! Responders/non responders Predictive
New imaging
disease
techniques
! Markers of drug metabolisms models
! Predictive evaluation of safety
! Effective translation to clinical
practice
Personalized
Medicine

15. Improving Development Sciences
Predictive Animal Models
Advancing Innovative Clinical Trials :
Learning trials versus empirical trials
Improving Measurement of Patient
Responses :
Variation in individual response
Correlation with biomarkers
Measuring Patient Preferences
Identify the overall benefits of therapies

16. “Mind The GAP”
…how do we narrow it?

17. Hurdles to Commercialization
Invention published prior to patent filing
Prior art
Un-validated discovery
Market too small
Competition too advanced
Market not ready for invention

18. Possible Solutions
Academic Partnerships and Collaborations
Government funding (CIHR and NSERC)
Industrial Partnerships and Collaborations

19. Useful Documents
UofT Confidential Disclosure Form
Assignment Agreement
Technology Owner’s Agreement
Confidentiality Agreement
Material Transfer Agreement
Inter-institutional Agreement
Service Agreement
Research Contract
License Agreement

20. Case Study
Professor Min Zhuo
4 gene targets (pain and fear memory)
In vitro and in vivo data
Patent and literature searches
R&D strategy
Commercialization strategy
Protect intellectual property
Pursue commercialization

21. Collaborations in place
Mouse models
Medicinal chemistry sessions
SMART HTS Facility
CIHR POP1 Grant
Toxicology studies

22. NeoBrain Pharma Profile
Focused on small molecule drug discovery for
treating diseases of the cns.
Founded by the Innovations at the University
of Toronto and Professor Min Zhuo
(Physiology UofT).

23. 3 Areas of Indication
acute persistent, neuropathic and chronic
inflammatory muscle pain.
delaying opioid tolerance
fear memory and anxiety

24. Drug Discovery Programs
lead program focused on the inhibition of a
specific neuronal adenylyl cyclase (nAC)
isoform. NB001 has been identified as one
such non-competitive nAC inhibitor.
discovery of inhibitors of a specific protein
kinase, which when combined with opioids
reduces analgesic tolerance to chronic
treatment.
drug discovery program focused on treating
anxiety conditions associated with
contextual and auditory fear memory by
the selective inhibition of specific glutamate
receptor subunits.

25. Proof-of-Concept Data
Models
Mouse models of neuropathic pain
Knockout mouse models
Electrophysiological data
Antisense data
Small molecule data
Behavioural data
Preliminary toxicology data

26. Example of neuropathic pain
AC inhibition (i.p.) in
neuropathic pain
Vehicle
120 NB001 0.1mg/kg
NB001 1.1mg/kg
100
80
60
*
40
(% Response)
Mechanical allod
20
0

27. Effective for neuropathic pain when
applied orally in rat!
NB001 orally at 1 mg/kg/3ml
120
100
80
60
40
20
0
Mechanical allodynia (% res
Before 45min 2hr 4hr 6hr
Time

28. Comparison with other pain
medicine
Cumulative effect of gabapentin on
withdrawal responses on day 7 after CPN ligation
(n=4 C57 mice; vonFrey filamnet 1.65)
100
80
60
40
20
Number of responses
in 5 trials in %
0
D
ay
7
30
10
1
30
m
ho
im
t
tm
n
ot
ua
tr
gf
am
ial
n
la
te
af0
3f0
3
/krg
tem
tem
rg
rg
m
m
/k
/k
g
g

29. Intellectual Property
-Adenylyl Cyclase program:
US and Chinese patent applications filed on
the specific adenylyl cyclase target and the
class of inhibitory compounds
-Protein Kinase program:
A US patent application filed.
-Fear memory/Anxiety Program:
A US patent application filed

30. Financial Requirements
Over the next three years, NBPI plans to complete
IND-enabling preclinical studies for NB001 for pain,
to advance another drug to preclinical development
for anxiety and to identify a lead compound for a
third indication.
NBPI requires financing of US$5 million to support
operations through 2009. Financing will be used to
advance the drug discovery programs, execute
licenses to its intellectual property, build its
management team, pursue business development
efforts, and complete a subsequent round of
financing to allow entry into clinical trials.

31. Ongoing R&D activities
$150,000 awarded from CIHR Proof-of-
concept grant
Initial PK and toxicity tests for leading
compound NB001

32. Remember
If you have doubts seek advice
Public disclosure of research results is
a fundamental act of scholarship
The choice is yours, but publicly
disclosing before you have given
consideration to patenting and
commercialization may, in the long
run, remove an option you wish you
had kept

33. Contact Information
Konrad Powell-Jones
Phone: 416 - 978 - 5730
Email: konrad.jones@utoronto.ca
Patent, Publish, Prosper!