AT

1

June 6th 2020

A Case Study in M&A – Avila Therapeutics

ENET and MDG

AT

Juswinder Singh is an entrepreneur and scientist Currently, Chief Scientific Officer of Ankaa Therapeutics is an early stage self financed biotech

focused on treating drug resistance Born in UK and studied at Sussex University (BSc) and University College London (PhD) 30 years of experience working in Pharma (Parke-Davis) and Biotech (Biogen) Co-founded and CSO Avila Therapeutics in 2007 which was acquired in 2012 by Celgene Awarded Exit of the Year by New England Venture Capital Association in 2013 Awarded Excellence in Innovation Award by Chinese-American Biomedical Association 2013 Awarded the 2016 American Chemical Society Sosnovsky Award for Transforming the

Treatment of Cancer Board member Boston TIE (2017-2019) and Trek Pharma (2015-2018)

2

AT Founded in Oct 2006 from my basement after being downsized by Biogen

Investors and SAB Blue chip biotech investor syndicate formed over 12 months and an advisory board of ex-heads of

pharma R&D

Opportunity Historically covalent drugs are some of the most successful medicines in history but were avoided

by the modern pharmaceutical industry. Avila would pioneer a new class of covalent drugs and prove their disruptive potential in clinical trials

Biz Plan Advance one drug to clinical trials to address the problem of drug resistance Also needed to do one platform deal to help finance our clinical program M&A was the exit plan from Day 1 since no significant IPO market existed at the time but our

expectation was that this would take over 5 years – therefore would focus on building value

3

AT

4

Stage Pre-seed and seed Series A Tranche1 Series ATranche2

Series B

Time Oct2005-Feb2007 Feb2007-Mar2008 Mar2008-Jun2009 Jun2009-Mar2012

Number of people

1 4-12 12-25 25-50

Financing Own savings first six months200K Angel funding in March2006

10M 11M 30M

Advanced 3 compounds into preclinical development, two into the clinic (one with a partner)

ATGetting Started

2006‐2008

Strong Series A syndicate, Board

Build platform, team

Internal focus, stealth mode

Select lead programs (HCV protease, Btk)

On the Edge2009‐2010

Financial crisis

Organizational upheaval in pharma

Funds raised with a “get a deal or downsize” plan

Execute ‐ one program into clinic

Early deals small but mattered (Novartis, LLS, Clovis)

Breaking Out2011+

Early clinical data as anticipated

Significant alliance w/ Sanofi

Intense external environment on our clinical target

Constantly shifting BD opportunity set

AT

Increasing intensity on our clinical program – reconsidered what kind of deal to do

Discussions with VCs & buy-side ramped up but also take new tone…IPO suggested by several

Developed & shared term sheet for clinical program alliance with short list of companies – needed to value both oncology & autoimmune opportunity

Celgene changed the conversation

6

AT

Scientific AND cultural AND strategic fit

Best way to achieve vision – many important new medicines from Avila platform

Best way to really drive clinical program – it deserved more resources & expertise than we could assemble fast

Value significant & realized oncology + autoimmune + platform potential

Celgene negotiated well: clear priorities, problem solvers

7

8©

Avila Acquired by CelgeneSigned Jan 23, 2012, closed Mar 7, 2012

ROI to investors accounts for all transaction expenses, payouts to common & option holders, pay-down of debt, etc. ROI is average across Series A & B.

AT

The Day after Ideally you have a lot more expertise, resources and $$$ available You have generated a lot of credibility about your disruptive technology

Challenges It’s likely you are no longer in the driving seat for decision making! Need to ensure your voice is heard post acquisition

Going from 50 people to a 5000 person organization is disruptive Important to develop a plan for integration of both companies

Communication in a larger organization is much more complicated

There is a short window of opportunity either in negotiation phase or shortly after integration to communicate how you want the post-acquisition landscape to look

9

AT

10