Biotec Pharmacon company presentation June 13th, 2013

Rolf E Engstad – CSO

Svein W. F. Lien - CEO

Disclaimer

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Agenda

Overview

Beta-Glucans – Rolf Engstad

– advanced wound care

Enzymes – Svein Lien

– molecular testing

Summary and Outlook

3

Biotec BetaGlucans

• 20 years of history in proprietary

BETA-GLUCANS

• Immuno-modulatory substance

activating the immune system

• Promising pharmaceutical

results

• Current focus on WOULGAN®

BIOGEL, a medical device for

advanced wound healing

ArcticZymes

• Unique MARINE ENZYMES

business supplying the life

science industry

• Developed and commercialized

Shrimp Alkaline Phosphatase

(SAP) – a leading enzyme in

DNA/RNA sequencing

• Broadening portfolio of arctic,

cold-adapted enzymes,

including Cod-UNG and DNases

4

Two businesses built on strong IP

Agenda

Overview

Beta-Glucans – Rolf Engstad

– advanced wound care

Enzymes – Svein Lien

– molecular testing

Summary and Outlook

5

6

Beta-glucan as a therapeutic agent:

action on specialised white blood cells

Directed action of

SBG on macrophages

holds potential in

treatment of a number

of immune related

diseases

SBG would act as a

PAMP on specific

receptors on white

blood cells -

macrophages

Inflammation – white blood cells

Proliferation – new cells

Remodelling - healing

Normal wound

Cytokines trigger

initial wound healing

Growth factors

give new cells Connective tissue

formation

Healing

Adding Soluble Beta-Glucan

SBG

White blood cells

activated by SBG

Fibroblasts and white blood cells

triggered by SBG

SBG induced

healed (closed)

ulcer

Diabetic ulcer

Dysregulated Inflammation

Imbalanced white blood cells

Chronic inflammation

Healing halted

Promoting healing through action on white

blood cells

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Woulgan® Biogel – A unique medical device

for advanced wound healing

• Primary target: topical ulcers and wounds,

to be expanded to other wound healing

applications

• Strong documentation = efficiency claims

and attractive value proposition

• High demand for innovative and cost-

efficient advanced wound healing solutions

• World-leading partner in Smith & Nephew

• Finalised ISO-13485 process

• Validated production process

• CE-mark for Woulgan® Biogel as medical

device expected mid-2013

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9

Animal study for Woulgan Biogel 2% SBG

0

20

40

60

80

100

120

0 4 8 12 16 20

Days Post-wounding

% w

ou

nd

are

a r

em

ain

ing

-ve control Water

Intrasite moister gel

Woulgan®

+ve control (not for humans)

1% CMC moister gel

The animal study in diabetic mice shows that the performance of

Woulgan® Biogel with SBG as compared to hydrogel without SBG

Placebo controlled double blinded study of 60 patients

Statistical significant after 8 weeks

0

10

20

30

40

50

60

0 1 2 3 4 5 6 7 8 9 10 11 12

Duration of therapy (weeks)

Patients with complete healing (%)

SBG

Control

Phase 2 study in diabetic ulcer with 2% SBG

Well documented effect

44% healing after 8 weeks vs 17% with control

56% healing after 12 weeks vs 37% with control

0

20

40

60

80

100

120

0 4 8 12 16 20 24

% W

ou

nd

Are

a R

em

ain

ing

Days Post-wounding

Water

Woulgan Biogel

"Woulgan Biogel "without SBG

Woulgan Biogel:

Why a class III, rule 13 device?

Cell proliferation (left) and angiogenesis (right) in wound bed

10

0

5

10

15

20

25

30

35

Marginal Intermediate Centre

Pro

life

rati

ng

cell c

ou

nt

(fo

v)

0

20

40

60

80

100

120

140

160

Marginal Intermediate Centre

An

gio

gen

sis

Co

un

t (f

ov)

Water Woulgan Biogel «Woulgan Biogel» without SBG

SBG in Woulgan Biogel has a pharmacological effect on wound

healing that is ancillary to the pure gel effect of the formulation.

SBG is accordingly considered to be a medicinal substance giving

additional wound healing functionality in the formulation

Woulgan® claims and market

Regulatory classification frames:

Class III rule 13 opens for claims

related to “Medicinal Product” – i.e.

the effect of SBG in the formulation

Product Claims give description and

arguments to be used in marketing.

Only product with active component

directed to wound healing

Differentiation to other gel products

= Better market penetration

11

Market Segments: Paid by:

Hospitals and

Wound Clinics

Budget

Primary Care

Reimbursement

OTC/Individuals Reimbursement

and individuals

The European market opportunity Market estimate of annual number of wounds

Population 571 million

# of Diabetic Foot Ulcer 2.0 million

# of Leg Ulcers 0.9 million

# of Pressure Ulcers 5.0 million

# of burns 1.0 million

Europe is about 30% - 50% of world market,

dependent on definitions

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Woulgan® offers attractive economics

and performance

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Strong clinical performance

• ~44% healing after 8 weeks, against

control of 17%

• ~56% healing after 12 weeks,

against control of 37%

• 20 days shorter healing time on

average

• Fewer amputations; 1 amputation

with product against 3 with placebo

in phase 2

Reasonable user cost

• ~USD 500 per treatment, based on one

dose every three days for 10 weeks

• Price ultimately dependent on partner

preferences

Attractive health economics

• Clinical cost savings; shorter healing

time = at least 5 less clinic visits

• Reduced number of amputations

• Increased healing ratio and improved

patient convenience

Our goal is to make Woulgan® Biogel a cost effective, high-volume

product for advanced wound care

Next generation products It is a technology platform

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• Clear market need for increased convenience

• Possibility to combine SBG into a dressing

• SBG is also suitable for spray solutions, although maybe not stable in

the format used

Agreement with

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• Signed evaluation agreement for Woulgan® Biogel in late

December 2012

• Commencing market evaluation upon receipt of the CE-mark,

which is expected mid-2013

– Evaluation in limited number of centres across Europe

– Smith & Nephew holds exclusive, non-transferable/sublicensable

technology rights until end of trials

• Preparatory collaboration already commenced

– Exploring manufacturing cost opportunities

– Evaluating alternative delivery systems, including sprays and

combination packages

Key milestones and targets going forward

18

H1 2013 H2 2013 – H1 2014

Beta-

Glucans: Partner agreement(s)

Opinion leader/market

feedback

ISO 13485 accreditation Full launch

2. and 3. validation batch

Commercial sales revenues

MHRA clearance

CE mark approval

√

√

√

Other indications: SBG pipeline

– Finalised three clinical safety studies to treat

neuroblastoma, breast cancer and Non-Hodgkins

lymphoma with SBG combined with anti-cancer mAb

– Ongoing cancer vaccine trial (clinical phase I/II) at

Memorial Sloan Kettering Cancer Centre (MSKCC) in

children and young adults with neuroblastoma

– Secured broad patent portfolio in co-operation with

MSKCC

– Low activity for securing patent portfolio

– Clinical studies demonstrated need of more robust

product formulation

– Project on hold

– Preclinical data established – very promising effect of

SBG

– Project on hold

19

Cancer

SBG as adjuvant for anti-

cancer mAbs or vaccines

Oral mucositis

Inflammatory Bowel

Disease

Beta-glucan for consumer health

20

0

2 000

4 000

6 000

8 000

10 000

2010 2011 2012

kNOK Sales revenues

Revenues from sale of dietary supplement beta-glucan (NBG)

2013 sales expected to be in line with 2012

Agenda

Overview

Beta-Glucans – Rolf Engstad

– advanced wound care

Enzymes – Svein Lien

– molecular testing

Summary and Outlook

21

ArcticZymes – Marine Enzymes

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Unique products with large potential

• Recombinant, patent protected

enzymes with large market opportunity

in the DNA analysis market

• Key components in sample

preparation and PCR contamination

control

• Easy deactivation through simple

heating after use

• Strong pipeline through strategic

alliances and acquisition

23

From industrial to molecular grade enzymes

1993: Production of native Shrimp

Alkaline Phosphatase, a waste

product from the shrimp

industry

~2000: Discontinued industrial enzymes

More molecular grade enzymes

2011: 6 patent protected unique enzymes

on the market

All enzymes produced recombinant

Strong pipeline of development

projects

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Target markets for our enzymes An enzyme is an highly selective catalyst

Molecular Diagnostics

Patient

Extraction

Sample

Extracted

Nucleic

Acid

PCR process We have the results

from your test

Results

Multiple starting materials

Sample

Extraction

Cloning

RFLP

(Gel)

PCR process

Extracted

Nucleic

Acid

Research

Regulatory

Approval based

on clinical studies

Sequencing Microarray

Primary

enzyme

application

area

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Application areas

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Market Application Area Enzyme Enzyme mkt Value

Available:

Sample Prep Removal of DNA from RNA HL-dsDNase

Heat&Run® $ 30m

DNA/RNA Amplification Removal of DNA from PCR

reactions

dsDNase

HL-dsDNase $ 40m

DNA/RNA Amplification Carry over prevention Cod UNG MDx $ 90m

RuO $ 40m

Under development:

Sample Prep

Under development

Removal of DNA/RNA in

Protein Preps

HL-SAN Nuclease

cocktails Unknown (kit)

Next Gen Sequencing

Under development

Normalization of cDNA

Libraries

dsDNase/HL-

dsDNase Unknown (kit)

Launcing new and user friendly products

• New ‘value added’ enzymes and kits in

strong demand from potential partners

• Kit-format products and ready-to-use

application solutions

• Shorter implementation phase – “ready to go”

• Easier sell-in for distributors and on webshop

• Launched ready-to-use PCR

decontamination kit in March

• Adding to Heat&Run® gDNA removal kit

launched in August 2012

• Further kits in development for new

applications

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Main end users and suppliers:

Users Suppliers Characteristics %

Quality,

Safety and

Research

market

Thermo Fisher

(Life Tech, Applied, Invitrogen,

Ambion)

NEB, Qiagen

Roche, Bio-Rad, VWR, GE

Specialty labs, Unis, Pharma and other

industry.

WEB and distributors.

Product portfolio and support important

A tendency to more kit solutions

50%

MDx

(diagnostic

devices)

Roche

Myriad Genetics

Qiagen

Abbott

Siemens, Life Technology, GE

Products registered as devices restrict

parallel sales

Mostly proprietary instrument platforms

35%

Home brew

diagnostics

As for MDx but also component

suppliers

Sale directly to user

Labs need approval

Rapidly growing in Asia

5%

Forensic Applied Biosystems (Thermo F)

dominant

Specialized market 10%

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ArcticZymes Resource Allocation

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Segment Rationale Target Focus Marketing strategy

TIER 1

Volume

(Scale &

Scope)

Current Revenue

and Growth

(Horizontal and

Vertical Reach)

Global

Research &

Diagnostic

Companies

60% Direct; Account Mapping,

Vertical and Horizontal

Integration, Match with AZ.

Require individual follow-up

at the account.

TIER 2

Availability

Market

Identify the Next

Tier 1 Accounts

Positive Revenue

Mid-Size

Companies

25% Direct marketing,

opportunity/benefit based

evaluation of prospects, and

individual follow-up.

TIER 3

Strategic

Market

Ensure

implementation in

novel technology

End-user

R&D

15% Webshop, low-cost pull

strategy, outbound effort,

web design, application

focus, limited exhibition

presence

E.g. Tier 1 Account – Thermo Fisher

(Just acquired Life Technologies)

Thermo Fisher – Account Diversity and Map:

• Life Technologies

• Invitrogen (Multiple sites)

• Applied Biosystems (Multiple sites)

• Ambion

• Ion Torrent

• Thermo

• Fermentas

• Other business units

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Apps Spec. Tech Support

Customer Service

E-Marketing and Webshop

Account Manager Account Manager Account Manager

ArcticZymes Goal:

• Coordinated account effort to leverages internal resources and facilitate growth

• Vertical integration

• Requires internal adoption of language, business practice and internal support, and the ability to transfer goodwill from one part of the customer organization to others

Global supply agreement with

• Ideal type of partner in the

commercialisation process

• World leader in the production and

supply of reagents for the life

science industry

• Offers the largest available

selection of recombinant and native

enzymes for genomic research

• Current agreement covers

ArcticZymes’ recombinant SAP

(rSAP), and opens for other

products at a later stage

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Agenda

Overview

Beta-Glucans – Rolf Engstad

– advanced wound care

Enzymes – Svein Lien

– molecular testing

Summary and Outlook

32

Summary & Outlook

Enzymes:

• Expects to sign more supply agreements with global leaders

• Continuing development of ready-for-use product kits

• Beta-glucans:

• The process regarding the CE-mark for Woulgan® Biogel is getting close

to conclusion

• Product launch and market evaluation process with Smith & Nephew to

start upon CE-marking

Financial

• Completed equity issues provide funding of normal activities through

2014

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Questions?

Svein W. F. Lien

Mob: +4792289323

Email: sl@biotec.no

Rolf Engstad

Mob: +4795941542

Email: re@biotec.no

www.biotec.no