Introduction to BioArbitrage

Introduction to BioArbitrage

What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage

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What is Arbitrage?

Arbitrage involves earning a risk-free profit without the outlay of capital.

Arbitrage takes minimal investment for the guarantee of high return

BioArbitrage Defined

In BioArbitrage, an asset is identified where the owners undervalue the asset against the market value. A BioArbitrage fund purchases the asset and then sells it on the open market for an immediate return.

How it Works
Economics of BioArbitrage

Sell Asset Here

Market Value Buy Line Buy Asset Here

Introduction to BioArbitrage

What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage

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Harrison Hayes Who Are We?

Harrison Hayes is a strategic consulting firm to the life, chemical, and material science industries. Specific areas of expertise reside in our unique and proprietary research methodologies that support strategic and tactical decision making processes for our clients.

Harrison Hayes: Timeline

1991: Addison Whitney founded by Bill Smith

1998: Bill Smith reacquires Addison Whitney

2001: Innovation practice spun-off from Addison Whitney

1995: Addison Whitney sold to Interpublic Group

2001: Innovation comes to light

2007: Addison Whitney sold to Inventive Health; Harrison Hayes is born

Harrison Hayes: Bill Smith

Bill Smith Bio Founder and Managing Director of Harrison Hayes, LLC, a strategic consulting firm with an emphasis on the creation of disruptive innovation products and platforms. Prior to Harrison Hayes, Bill was the Founder and CEO of Addison Whitney, which today, is the third largest branding consultancy in the world. Bill sold Addison Whitney in 1995 to Interpublic Group (NYSE:IPG) and led their Healthcare Acquisition Team for three years which was responsible for over $3 Billion in transactions. He re-acquired Addison Whitney in 1998. Bill acted in a dual role with Addison Whitney (Chairman) and Harrison Hayes until 2007. Education B.A., Berklee College M.A., Colorado State University

Introduction to BioArbitrage

What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage

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Harrison Hayes and BioArbitrage -Initiation

A General Partner will shape the investment charter with specific criteria and areas of investment interest.
The General Partner has the Right of First Refusal to acquire the Funds portfolio of assets. In the event of non-acquisition, the General Partner maintains the opportunity of financial gain from the assets exit strategy.

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Harrison Hayes and BioArbitrage -The Option

There is typically a designated Managing Director of the Fund.

The Managing Director and Owner of the identified asset will agree on appropriate acquisition value. The Managing Director will perform its PIPV proprietary analysis to determine that the acquisition price is less than market value. The Fund will exercise the option to purchase the asset within a time period of 12 to 18 months.

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Harrison Hayes and BioArbitrage -The Auction

The Managing Director will market the asset in a controlled auction.

Managing Director and assets Owner will determine the appropriate strike price. The asset will be auctioned to buyers who are willing to pay more than the agreed strike price. The fund pays the owner the agreed Strike Price and retains the differential.

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Harrison Hayes and BioArbitrage -Terms

A General Partner will invest an previously agreed upon amount. Managing Director to receive a 2.5% Annual Management Fee. Managing Director to receive 20% of the carry. Fund will be for a term of seven (7) years.

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Harrison Hayes and BioArbitrage -Why Invest?

The Fund is a key piece in building an innovation pipeline. The Fund has the ability to deliver novel technologies and intellectual property unlike traditional methods. This Fund will provide exposure to global investments off the grid.

Creates selective investments at reasonable valuations.

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Introduction to BioArbitrage

What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage

The Tools
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Tools for Success: Technology Scouting

Technology Sourcing includes the identification of technology developments and the facilitation of the sourcing of technology.
Identification, assessment and usage of information on technological developments Provisioning of Technology Intelligence to facilitate the Technology Management Acquisition, development, storage, usage and selling of technological knowledge

Technology Intelligence

Technology Management

Scouts identify and assess new technologies

Technology Scouting
Building and using a network of experts for competitive advantage

Scouts facilitate the sourcing of technology

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Tools for Success: Technology Scouting

Technology Scouting Process consists of five Technology Intelligence steps plus the step of Technology Sourcing.

Definition of search areas

Selection of information sources and methods to employ

Collection of data

Filtering, analyzing, interpreting of data

Evaluation and decision making

Usage of information and sourcing of technology

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Tools for Success: Technology Scouting

Technology Sourcing supports the external sourcing of technology and the product specification and development. Innovation Management Fuzzy-front-end of Innovation Product specification and development Prototype validation and testing

Market Launch

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Tools for Success: Technology Scouting

Technology Sourcing supports the external sourcing of technology and the product specification and development.

Technology Management Storage, Internal generation and usage of technological knowledge

External Technology Sourcing

Technology selling or licensing

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Tools for Success: Technology Scouting

Framework for Empirical Research: PLS path analysis will be used to analyze the success factors of technology scouting and how to organize it best. Factors Management Areas Scouting Success Factors

Defined Process Functional interweavement Formalized connection to R&D Formulized connection to Marketing Methodological interweavement

Organizational Characteristics Stimulation of Innovation

Input for R&D projects Triggering of new R&D projects Triggering of new business field

Boundary spanner capabilities Network Size Technological competence Internal Network

Characteristics of the scouts Facilitation of Technology Scouting Management of Scouting Network

Help in assessment of technology Contact to relevant sources Sourcing needs identified Support in acquisition of technology Successful acquisition of technology

Incentive System IT-Support Tools Balanced scout portfolio Role Differentiation

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Tools for Success: Technology Scouting

Project Planning: PLS-path analysis and in-depth case studies will be used to study organization and success factors of technology scouting.
Qualitative Interviews Model Building Quantitative Interviews/Case Studies Model Valuation Writing of Dissertation

In depth interviews with 10 multinational companies

Modeling a framework for research on success factors of technology scouting

Build on the Hypothesis of the framework 50 qualitative Interviews are conducted. In depth case studies will be conducted for six companies.

Based on the qualitative data, partial leastsquare path analysis is used to validate the hypothesis The case studies are analyzed to gain knowledge of best practices

The dissertation will discuss technology scouting as of a method of technology intelligence and technology management

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Tools for Success: Technology Scouting

Motivation and Research Question: Further research on Technology Scouting is needed to identify success factors and to give recommendation on how to organize it. Increase in technology complexity Globalization of R&D Shorter product life cycles Increasing volatility of markets

Motivation

Research Gap

No sufficient research on . success factors and organization of technology scouting and ...interaction with other function of the organization What are the aims of Technology Scouting? What are important success factors of Technology Scouting? How should Technology Scouting be interweaved within the company? What organizational forms of Technology Scouting have proven to be effective?

Research Questions

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Tools for Success: Transforium

The Transforium database is proprietary and unique to Harrison Hayes. The Transforium contains over 3,000,000 in-licensing, outlicensing, and transactional opportunities. Transforium provides our clients with an additional resource of off the grid opportunities.

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Tools for Success: PIPV

Our Proprietary Intellectual Property Valuation (PIPV) service utilizes a proven methodology specifically designed to:

Identify promising compounds.

Provide important market and competitive analysis. Assess patents and their legal defensibility. Estimate the likelihood that a specific compound will gain FDA approval. Perform valuations on individual compounds or entire pipelines.

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Tools for Success: PIPV -Commercial Analysis

Harrison Hayes provides independent, third party research designed to maximize the value of identified intellectual property. Harrison Hayes can identify the compounds and targets with the greatest potential for commercial success. Our team members combine expertise from both the scientific and commercial realms of the life sciences industry.

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Tools for Success: PIPV -Financial Analysis

Properly valuing assets is paramount to the Funds success. Harrison Hayes possesses the valuation experience and domain expertise necessary to accurately assess the value of your products or technologies. Identify market comparables Perform quantitative analysis Assist in development of pro forma financial statements Calculate "burn rate" and other financial projections Develop schedules and timelines for product development Estimate likelihood of milestone success

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Tools for Success: PIPV -Legal Analysis

Harrison Hayes can evaluate the legal status of your identified intellectual property.

Investigate all relevant patent initiatives Assess legal defensibility Determine overall strength and scope of intellectual property rights

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Tools for Success: PIPV -Feasibility Analysis

Harrison Hayes will render an opinion on the feasibility of specific opportunities. Assess experience and track record of management team Evaluate development progress and timelines Perform competitive and substitute analysis Analyze potential exit strategies

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BioArbitrage

What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage

The Tools
Contact Information

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www.harrisonhayes.com

Phone: 704.906.3402 Email: wsmith@harrisonhayes.com

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