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RNA-EYE TECHNOLOGIES

RNA-EYE TECHNOLOGIES

BUSINESS PLAN 2009

Rohit Dayal Shah Research and Development Area PIGDONS ROAD, GEELONG-3217 (AUSTRALIA) PHONE: 0434129518

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TABLE OF CONTENT
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1. Introduction 2. Scientific Report 2.1 Research and Production 3. Marketing Report 3.1 Business Potential 3.2 SWOT Analysis 3.3 Marketing Strategies-7 Ps 3.4 Special Program 3.5 Action Plan 4. Legal Report 5. Financial Report 5.1 Funds for discovery phase 5.2 Action Plan- Maturity phase 5.3 Finances 6. Management Report 7. References

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RNA-EYE TECHNOLOGIES

MISSION
To provide excellence in eye and vision research, through investment in people, systems and innovation. Our mission is to lead efforts to preserve sight and provide resources to prevent avoidable blindness To achieve this, we work in partnership with leading eye specialists, medical professionals, industry representatives, the ophthalmic and allied health community, the public, business communities and government.

VISION
Our vision is for every person to be given every opportunity to see.

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1. INTRODUCTION
RNA-EYE Technologies is a Geelong, Australia based company that explores the use of RNA interference in human eye offering competitive prices and expert advice. With this new innovative RNAi technology, the company is having an opportunity to treat the disease and impacting the lives of millions of people around the world by silencing the disease causing genes. Since past many years, the company through its rigorous research has made remarkable advancement and considerable understanding of eyes genetic diseases and hence large number of molecular targets has been obtained. Our company has been well supported by various grants at different stages of product formulation and phase of company. Apart from grants, company had also raised funds from venture capitalist Innovation Capital. Presently there are only few known treatments available for the diseases with therapeutic modalities such as monoclonal antibodies and small molecules which are unable to treat the disease and can only temporarily stabilize the condition. With the RNAi technology, any gene in the genome involved in disease can be targeted. RNA-EYE Technologies has developed novel, proprietary short interefering RNAs which has number of advantages over conventional siRNAs as they have good stability against nuclease degradation. Presently, the company is involved in extensive research in treatment of genetic eyes disorder such as macular degeneration, Retinitis pigmentosa and Leber's hereditary optic neuropathy. Some of the products are in the clinical developmental phase.

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2. SCIENITIFIC REPORT
Through exhaustive research, RNA-EYE Technologies has successfully developed its first product i-FIT since its inception, which is certainly better than any other product associated with this disease which will fully maximise its selling potential. Through our gene silencing technology, the company has found 17 disease targets in 3 tissues and in 3 species including humans. Other products i-CONES and i-NERVETIS are also in developing phase. Table 1: List of Products
THERAPEUTIC AREA COMPOUND/VACCINE TYPE

INDICATION

PHASE

EYES

i-FIT i-CONES

Age related macular shRNA degeneration shRNA Retinitis pigmentosa Leber's hereditary shRNA optic neuropathy

Approved phase-1

i-NERVETIS

Phase-11

i-FIT The product i-FIT (figure 1) is RNAi based treatment for genetic disease Age Related Macular Degeneration. As compared to treatments, it does not have RNAi delivery issue as naked siRNAi can be directly injected in the eye which acts as drug, short strand of RNA that are not packaged or protected in membranes and quickly break down in blood stream and so it can reach the target intact.

Figure 1: siRNA Design (i-FIT)

AGE RELATED MACULAR DEGENERATION- DISEASE CAUSE Wet age related macular degeneration is the main cause of blindness in the elderly. It is due to the abnormal growth of blood vessels below the macula region that is responsible for the
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central vision which is required for fine detail visual activities such as driving, reading, recognising faces and other day to day activies. i-FIT has designed and developed by following the procedure described briefly in diagram 2.

Figure 2: Process diagram for designing the siRNA The guidelines for building siRNA are:
1. Find 21 nt sequences in the target mRNA that begin with an AA dinucleotide. 2. Select 2-4 target sequences which can be done at www.ncbi.nlm.nih.gov/BLAST 3. Design appropriate controls.

CHEMICAL MODIFICATION Chemical modification of siRNA duplexes is done to enhance its performance which helps in increasing the siRNA stability, decrease off-target effect and reduction of cytokine activation. Chemical modification is done to improve siRNA serum stability against nuclease degradation which is greatly responsible for siRNA delivery.

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These are the properties of the i-FIT : Low toxicity Biodegradability Efficient cellular uptake Efficient endosomal escape

2.1 RESEARCH AND PRODUCTION The physical plant is located at: PIGDONS ROAD,GEELONG-3217 (AUSTRALIA) Phone: 0434129518 Email: info@rnaeyetechnologies.com.au Website: rnaeyetechnologies.com.au The layout and the production chamber is shown in the figure 3 below:

Figure 3: Laboratory and the production unit

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RNA-EYE TECHNOLOGIES QUALITY CONTROL

RNA-EYE Technologies has established a well-deserved reputation by ensuring compliance with laws and regulations. A special officer takes care of the quality control of the cell lines that we produce at RNAEYE Technologies. The Quality control officer works in closely with the Chief Production manager to maintain the quality, and the Brand Level of the RNA-EYE Technologies.

DISTRIBUTION
The production department has also a role to play in the distribution of the siRNA product. Clients give the order for making a specific cell lines they need, the specific cell line is directly delivered to the clients in 12 hours once the product is ready if in Victoria. If outside Victoria, it will take a min of 24-48 hours for the product to be delivered, once the product is ready. RNA-EYE Technologies has got the Distributors in the other parts of the Australia.

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3. MARKETING REPORT
In 2003, Wet age related Macular Degeneration market was US$ 357 million dollars to US$ 2.0 billion dollars in 2009 as in figure 4. By 2013, it is estimated that the market value will rise in excess of US$ 3.2 billion dollars. As the success development of i-FIT is observed, other drugs which are similar in nature such as i-CONES and i-NERVETIS for diseases Retinitis pigmentosa and Leber's hereditary optic neuropathy have good potential thereby expanding the market .

Figure 4: Growth of the wet age related Macular Degeneration Market

In the year one, as RNA-EYE Technologies has developed innovative breakthrough technology, the profit from the drug will be maximised through premium pricing of the drug and also market will have more sales as occurrence of the disease is increasing with the increasing population.

3.1 THE BUSINESS POTENTIAL Competitive advantages RNA-EYE Technologies i-FIT targets VEGF m RNA is the first RNA based technology to enter the human clinical trials system. It is certainly far better product than conventional treatment such as with monoclonal antibodies and other small molecules. Product i-FIT shows considerable improvement in visual acuity of patients which is very encouraging and exciting. RNA based technology is advantageous over the conventional treatment in following ways: better efficacy, requires less dosage, and is permanent in nature. It is safe and effective product as well. Our competitors are listed in table 2.

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Table 2: Main competitors of our drug

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Due to its above mentioned capabilities, it has great potential to dominate the market once it is open to the public. RNA-EYE Technologies is aiming for annual sales of $800 million dollars in the first year of operation. This will be well supported by extensive marketing channels. Future growth will be driven by expansion of product lines, opening of commercialization plant in India and exporting the products to developed nations such as US, UK, Germany, etc.

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3.2 SWOT ANALYSIS

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Promotion Expertise Costadvantage Easy to modify


STRENGTH WEAKNESS

Brand Name Reactive as proposed to being predictive Investors

OPPORTUNITIES

THREATS

New Technology Market Demand Regulations Figure 5: SWOT Analysis

Cheap Substitutes Market Share Variation.

The SWOT analysis is briefly described in figure 5. STRENGTH Promotion: In order to promote our product RNA-EYE Technologies organise scientific seminars and conferences, in which customers are made aware about the benefits of our product when compared to the other products in the markets. Expertise: RNA-EYE Technologies have a good experienced and skilled staff, with their valuable insights and thoughts that have strengthened the organisation with the organisation and even in the market. Cost Advantage: As compared to our competitors, our prices are high but overall treatment cost is less. Easy to modify: As compared to other treatments, in case of any side effects we can easily change or modify siRNA.

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WEAKNESS

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Brand Name: RNA-EYE TECHNOLOGIES is a new player in the market. So, customers do not know us much, however by our marketing strategies, we would overcome this shortcoming. Reactive as proposed in being proactive: RNA-EYE Technologies will be dealing with problems when occurred or encountered rather than predicting upcoming or other possible problems which can pose a hindrance for the company growth. In doing so, we are not analysing unpredictable situations. In contrast we will be looking at the possible threats which will be present for every company. OPPORTUNITIES New Technology: RNA-EYE Technologies utilize latest technologies based on the market requirements which give us a cutting edge over our competitors. Market Demand: As other treatments for AMD are not effective and are temporary in nature, so we can prove our expertise in the market. Regulations: Regulations against siRNA has been loosened for the human treatment, and so it is good opportunity for us. THREAT Cheap substitutes: Customers view other treatment such as of monoclonal based as cheap treatment, as they think of short term. However RNA-EYE Technologies will be competing against these products based on effectiveness. Market Share Variation: Present market is seeing recession, as we also otherwise know that market has its pros and cons.

3.3 MARKETING STRATEGY- THE 7 PS

Product: Through exhaustive research, RNA-EYE Technologies has successfully developed its first product i-FIT since its inception, which is certainly better than any other product associated with this disease which will fully maximize its selling potential. Through our gene silencing technology, the company has found 17 disease targets in 3 tissues and in 3 species including humans. Other products i-CONES and i-NERVETIS are also in developing phase. Price: The pricing of the three siRNA product has been calculated based on the amount spent by the Research team and the Production unit. Our three products have been priced as follows in table 3:
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Table 3: Price of products

i-FIT i-CONES i-NERVETIS

450 AUD 325 AUD 400 AUD

Place: The product specification being siRNA construct, which is being used in the treatment of genetic disease Age Related Macular Degeneration. Firstly we would be targeting the patients in the cities, who can afford the premium price of the treatment. We would contact private practitioners as well as hospitals. Promotion: We have excellent promotional strategies and marketing staff, by which our products have caught the attention of the customers. Process: Our marketing department have prepared particular process to market our products, we be advertising, as well as informing the potential customers by various mode such as journals, seminars, articles, etc. People: We want to give best to customers with what we already have. This requires good market analysis to analyse the needs of the customers and so we have also hired market research specialist. Physical evidence: Packaging of our product as attractive as the product itself, so that damage to the product is minimized. Our company maintains the product at optimum conditions and are also stored appropriately.

3.4 SPECIAL PROGRAMS: PROMOTIONAL STRATEGIES: Articles: Various articles (journal & research papers) containing the information of our product have been published. Brochures: Brochures list of our product have been distributed to patients receiving other form of treatment by contacting doctors and hospitals. Seminars & Conferences: Many seminars and conferences are organised at various locations to educate people about our product. Advertisements: Our product is advertised through leading newspapers and news channels. Other forms of advertisements are used as listed above.
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Website: We have created website for company wherein the list of product advantages have explained in http://www.rnaeyetechnologies.com.au

and its

3.5 ACTION PLAN:

We have established our company, with highly productive siRNA production unit. Tie-up with pharmaceutical giant NOVARTIS and BIOCON would be of great advantage considering they already have established sales and marketing channels. Our website contains information describing our product; we plan to elaborate it further so that prospective customers can get the product in 5 working days. As we have Australian based production unit, we plan to set up more distribution channels for faster and cheaper delivery of our product. We also plan to do agreement and contracts with research labs and eye hospital such as ROYAL VICTORIA EYE & EAR HOSPITAL. Research and discover other drugs/products, for genetic eye diseases such as Lebers hereditary optic neuropathy, Diabetic Retinopathy. It can also start Clinical Trials for eye by collaborating with hospital as it has got all the facilities for the setup.

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RNA-EYE TECHNOLOGIES 4. LEGAL REPORT

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In 2005, provisional patent was obtained, after a year standard patent was attained for fully commercializing the product. At the same time, international patent search was done to ensure that the concept or idea does not exist any where. Spin-off Company was created under the name of RNA-EYE TECHNLOGY after the discovering and conceptualising the product through Australian Securities and Investment Commission (ASIC) under Section 117 of the corporations ACT 2001. The Corporate Law Reform Act 1998 made the process much simpler. So that, business can be carried out anywhere in Australia. In 2008, IP Lawyer from world renowned law firm known as Baker & McKenzie was hired and International Patent was applied under Patent Co-operation Treaty (PCT) ip#354167 in many countries including Australia, United States of America, Europe, Canada, India , Japan, etc) . Further in 2008, the company was also listed in Australian Stock Exchange (ASX) which is primary stock exchange in Australia as well as International Stock Exchange (NASDAQ). Company entry into national and international stock exchange benefits the company, as increases the market value, increases the profile, capital growth and improved valuation are observed. RNA-EYE TECHNOLOGIES has a confidentially policy which prohibits the board of directors and staff against unauthorised disclose or discussion of any inside information, except in situations where duty calls for it. COMMERCIALIZATION OF IP: Primarily there are two kinds of IP, franchising and licensing, RNA-EYE Technologies prefers the licensing approach. We have entered an exclusive license agreement with NOVARTIS Pharmaceuticals. The annual royalty is obtained from the company as the deal. RNA-EYE Technologies has patents for its products not only in Australia but also in various other countries through the Patent Cooperation Treaty(PCT), they have been listed in table. Our patents are listed in table 4: Table 4: Patents of our products
PATENT NUMBER Aus2198332 748 Aus219 8365544 Aus219 8674328

PRODUCT i-FIT i-CONES i-NERVETIS

LODGED/STATUS Granted Granted Granted

TECHNOLOGY siRNA siRNA siRNA

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5. FINANCIAL REPORT

5.1 FUNDS FOR DISCOVERY PHASE In this phase, all the research relating to the discovery and development is done. siRNA design process, target discovery, testing on cell lines, animal models to test the efficacy, safety, toxicity, pharmacokinetics and metabolism are all done in this phase. So funds were accumulated in the following manner as given below briefly.
In 1999: Central Research Grant Scheme (CRGS) 20, 000 AUD. In 2000: Australian Research Council Grant (ARC) in which Linkage, Infrastructure, Equipment & Facilities worth 100,000 AUD. In 2002: National Health & Medical Research Council Grant (NHMRC), in which Standard Project Grant of 800,000 AUD for 3 years. In 2005: Provisional Patent cost was 80 AUD and for International Patent Search was 14, 00 AUD.

GROWTH PHASE Establishment of spin-off company in 2006 named RNA-EYE TECHNOLOGIES to commercialise the invention. It was created through Australian Securities and Investment Commission (ASIC) under the corporations ACT 2001. - FEES: Registration Fees: 660 AUD and Annual Fees : $1600 AUD

Moved to Geelong Technology Precinct, under BIODEAKIN initiative. Agreed to pay GTP, 20 % revenue during the growth phase. 2006- AusIndustry Pharmaceutical Partnership Program(P3) grant of $3.2 million - Commercial Ready Scheme Grant of $648,314 2006- Commercialising Emerging Technologies , (COMET) grant of $64,000 - 125% R&D tax concession Both grants utilised for Clinical Trials Phase I which took 2 years.

2008- The company hired IP Lawyer from Bakers & McKenzie


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- Applied for International Patent Initial Fee: 2000 AUD and Annual Fee: $100 for 1st 4 years For 25 countries: $2500 annually

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2008- Listed in international Stock Exchange NASDAQ

2008 VENTURE CAPITAL - Short-listed and selected It is leading Australian Venture Capitalist. INNOVATION CAPITAL They have $100 million dollars under management. They have team comprising of entrepreneurs and executives with exceptional personal track record. After obtaining $10.5 million, it was spent on Clinical Trial phase II & III which took 7 years in total.

5.2 ACTION PLAN MATURITY PHASE 2015: Many Pharmaceutical Companies were approached, Pfizer, Novartis, Genentech 2016: Alliance was formed with NOVARTI S , so that their marketing channels could be used for selling purpose. - $6 billion was paid to NOVARTI S to exit. - Alliance Payout $15 billion dollars from As a result, Novartis could commercialise this as well as other products of RNA-EYE Technologies in the pipeline.

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5.3 FINANCES Details of the finances that were incurred during initial company setup :

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Initial administration costs.


Table 5: Initial Administration Cost Building costs Utilities (Electricity, cafeteria, toiletries, etc) Office supplies Wages (annual) Legal expenses Insurance (annual) Tax/Super/GST (annual) Total $ 3200000 $ 60000 $ 30000 $ 1130000 $ 90000 $ 24000 $ 67000 $ 4601000

Research and production costs


Table 6: Research and production cost

Cost incurred for research Cost of machinery and required for production siRNA room and cold storage room Cost of general lab equipment Total

materials

$ 4403610 $ 2963610 $ 2972800 $ 83000 $ 10423020

PRODUCT COST PRICE & SELLING PRICE COST PRICE Table 7: Cost Price of product

i-FIT i-CONES i-NERVETIS

350 AUD 255 AUD 300 AUD

SELLING PRICE
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Table 8: Selling Price of product

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i-FIT i-CONES i-NERVETIS

450 AUD 325 AUD 400 AUD

SALARY Table 9: Salaries


POSITIONS CEO SECRETARY LEVEL 1 CSO CPM CLO CMRO CMO CFO HRM LEVEL 2 PRM Sr. RESEARCH SPECIALIST LAWYERS LEVEL 3 MARKETING EXECUTIVES LAB TECHNICIANS PATENT ADVISOR ACCOUNTANT SALARY PER ANNUM(AUD) $ 120000 $ 100000 $ 85000 $ 82000 $ 77000 $ 75000 $ 75000 $ 75000 $ 75000 $ 73000 $ 70000 $ 67000 $45,000 $ 43000 $ 45000 $ 45000

Break-even analysis
Table 10: Break-even Analysis Fixed Costs (yearly) Wages Insurance Maintenance Property taxes Other Total Fixed Costs $ 1670000 $ 47000 $ 2800 $ 84000 $1765 $1805565
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Variable Costs (yearly) Raw materials Marketing Packaging and Transport Electricity Office Supplies Total Variable costs $ 3760000 $ 3578000 $ 281340 $ 22180 $ 16510 $ 7658030

The above table 5, 6, 7, 8, 9 and 10 shows the cost incurred to produce the product. The financial department will then estimate the actual profit that the company incurs on a yearly basis. The estimation will be made by comparing the expenses incurred and the profits generated on a yearly basis. We will finally compare the section of the financial plan which shows our assumed profits to the actual income generated.

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6. MANAGEMENT REPORT
ORGANISATION CHART

Figure 6: Board Members The figure 6 shows our board members as listed below: BOARD MEMBERS
Dr. Rohit Dayal Shah Miss Katrina Kaif Chief Executive Officer Chief Secretary Chief Scientific Officer Chief Legal Officer

Dr. Ashley Bates Dr. Morley Muralitharan Dr Anthony Coulepis


Mr. Dick Norman Mr. James Wates

Chief Marketing Officer


Chief Financial Officer Chief Production Manager

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RECRUITMENT PROCESS

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Our recruitment process as in figure 7 is designed to find the right person for the role we need to feel in. Lots of opportunities are given to the candidates, where the individual may asks as many questions and see whether he fits in our company. Our recruitment is explained briefly via the chart.

Figure 7: Recruitment Process After selection of candidate, adequate training is given and aspects such as Monthly feedback form, employee profile chart, management review on employee, peer review chart, absence form, are also prepared and dealt with appropriately. Workshops & conferences are also held to keep our employees motivated.

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RNA-EYE TECHNOLOGIES 7. REFERENCES

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

www.ambion.com accessed on 10 June, 2009 www.lion-nathan.com.au accessed on 10 June, 2009 www.chemind.org accessed on 10 June, 2009 www.ier.org.au accessed on 10 June, 2009 www.nature.org accessed on 10 June, 2009 www.sirna.com accessed on 10 June, 2009 www.hopkinsmedicine.org accessed on 10 June, 2009 www.pbs.org accessed on 10 June, 2009 www.imgenex.com accessed on 10 June, 2009 www.ausbiotech.org accessed on 10 June, 2009 www.ipaustralia.gov.au accessed on 10 June, 2009 www.nhmrc.gov.au accessed on 10 June, 2009

Gomase V S; Tagore S, 2008, RNAi A Tool for Target Finding in New Drug Development, Current Drug Metabolism, vol. 9, pp. 241-244 14. RNAi Goes Genomic: Target Identification and Validation with siRNAs, accessed from www.ambion.com accessed on 10 June, 2009
15. www.biotechnology.gov.au accessed on 10 June, 2009 16. www.grantslink.gov.au accessed on 10 June, 2009 17. www.deakin.edu.au accessed on 10 June, 2009

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