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Beijing Tri-Prime Genetic

Engineering Co. Ltd.

Presented by
Mr. Cheng, Yongqing (Founder, CEO)
Feb. 23th, 2009

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Content
Company history
Investment highlights
Innovative technologies
Innovative business model
Growth strategy

Company history

Investment highlights
Unique product with market leading position and high

brand recognition
Extensive distribution network with China - specific marketing
strategy

Strong product life-cycle management; robust pipeline with near


term product launch potential
Highly efficient GMP approved production process
Professional reputation; strong established relationships with
customers/suppliers as well as government authorities
Innovative and experienced management team

Content
Company history
Investment highlights
Innovative technologies
Innovative business model
Growth strategy

Founder Dr. Hou, Yunde


Education:
1955
1962

Dr. Hou Yunde

Graduated from Tongji medical University


Obtained MD from Soviet Academy of Medical Sciences

Work experience:
1985-1996
Institute chief, Virology Institute, China Academy of
Preventive Medical Sciences
Chief, Virus Research Center, WHO
Chief, the State Key Lab of Viral Gene Engineering
19861996
Chief scientist of Bio Tech, Chinese National Programs for
High Technology Research and Development
1992-1998
Chairman of the Board, Beijing Tri-Prime Genetic Engineering
Co., Ltd. (Tri-Prime Gene)
1998-current Vice President, China National Academy of Engineering,
Academician, China Academy of Engineering
2008-current Chief Scientist, infectious diseases program, Ministry of
Health

Hapgen
Hapgen (Interferon-alpha1b), Tri-Prime Genes key product, was approved by
Chinese authority (predecessor of SFDA) in 1989 as a Class I new drug
The gene of Hapgen was cloned by Professor Yunde Hou from leukocyte of healthy

Chinese people, and subsequently named as Interferon 1b by relevant international


professional committees
Hapgen was produced in E.coli expression system and purified through a multi-steps
process
Hapgen inhibits intracellular virus replication and tumor cells proliferation efficiently,
and stimulates the immune system as well
The indications approved are chronic hepatitis type B and type C, condyloma
acuminatum, and hairy cell leukemia
Since its introduction, patients treated with Hapgen showed much lower neutralizing
antibody rate and less side effects comparing to similar interferon products
Tri-Prime Gene has patented the production of Hapgen, and the product has been
awarded SFDA protected medicine

Hapgen revenue growth

2008 China Interferon


product market share

6500
5500
Antefen
18.53%

4500
3500

Intelong
8.77%

Anfulon
20.95%
Kaiwin
18.84%

2500
1500

Sinogen
2.65%

500
2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

-500

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Hapgen
23.09%

Intefen
7.15%

Founder Mr. Cheng, Yongqing

Investment highlights
Unique product with market leading position and high brand

recognition

Extensive distribution network with China - specific


marketing strategy
Strong product life-cycle management; robust pipeline with near
term product launch potential
Highly efficient GMP approved production process
Professional reputation; strong established relationships with
customers/suppliers as well as government authorities
Innovative and experienced management team

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Extensive distribution network


Heilongjiang

30 provinces and 16
cities / districts in China

Jilin

Innermongolia

Liaoning
XinJiang

Ningxia

Beijing
Tianjin
Hebei
Shanxi
Shandong

Qinghai
Gansu Shaanxi Henan

Sichuan

Chong
Hubei
-qing

Jiangsu
Shanghai
Anhui
Zhejiang

Hunan
Guizhou
Yunnan

Jiangxi
Fujian

Guangdong
Guangxi

Hainan

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20 dealers and 120


distributors
204 professional

salespeople covering
736 hospitals and 4,369
doctors

Distribution channels and


management model
Marketing team

Dealers
Offices

Xinjiang
Shanxi
Hainan
Guangxi
Fujian

Yunnan
Shaanxi
Jiangxi
Henan

160 regions / cities, 736 hospitals, and


4,369 doctors

Hebei
zhejiang
Liaoning

Jilin
Helongliang
Gansu

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Inner Mongolia
Sichuan

Shanghai
Hubei
Guizhou
Tianjin
Hunan
Chongqing
An Hui
S. Jiangsu
N. Jiangsu

Shandong
Guangdong
Beijing

204 medicine representatives via 20


dealers and 120 distributors

Investment highlights
Unique product with market leading position and high brand

recognition
Extensive distribution network with China-specific marketing
strategy

Strong product life-cycle management; robust pipeline


with near term product launch potential
Highly efficient GMP approved production process
Professional reputation; strong established relationships with
customers/suppliers as well as government authorities
Innovative and experienced management team

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Hapgen Product Life-Cycle


Interferon 1b spray
Interferon 1b eye drops

Albumin-free formula of
Hapgen
New indications - pediatric
pneumonia
Large dose interferon 1b
Long-acting interferon
inhaled Interferon 1b
powder
G2 long-acting interferon

Small interfering RNA

2009

2010

2011

2012

14

2013

2014

2015

Site-specific
PEGylated
interferon

Success factors
Technology
oriented

Proven track
record in new
products
developments

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Market
oriented

Investment highlights
Unique product with market leading position and high brand

recognition
Extensive distribution network with China specific marketing
strategy
Strong product life-cycle management; robust pipeline with near
term product launch potential

Highly efficient GMP approved production process


Professional reputation; strong established relationships with
customers/suppliers as well as government authorities
Innovative and experienced management team

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GMP
standardized
production
system

Highly efficient and flexible


production process
Injection
powder

Bacterial
strain

Fermentation

Purificatio
n

Injection
liquid
Packaging
Eye
drops
Spray

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Patented
formula

Investment highlights
Unique product with market leading position and high brand

recognition
Extensive distribution network with China specific marketing
strategy
Strong product life-cycle management; robust pipeline with near
term product launch potential
Highly efficient GMP approved production process

Professional reputation; strong established


relationships with customers/suppliers as well as
government authorities
Innovative and experienced management team

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Cooperation with China Hepatitis


Prevention and Control Foundation

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License for A-grade enterprise in terms of taxation credit


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Certificate for High-technology Enterprise


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Projects awarded governmental


subsidies
Sponsor

Projects

Duration

Amount

Research on a New Anti-cancer Drug: sApo-2L


Volume Production of Nucleic Acid and Polypeptide
Medicine
Development of a New System for Recombinant Human
Interferon
New Dosage Form of 1b Recombinant Human
Interferon Liposome
Gene Engineering-based Calcitonin Production
Research on PKU Oral Preparation

2002-2005
2008-2009

RMB600,000
RMB900,000

2008-2010

RMB2.0 million

1999-2002

RMB500,000

2000-2003
2006-2009

RMB1.0 million
RMB1.2 million

High Efficiency Super Interferon

2003-2005

RMB1.0 million

PEGylated New type Interferon

2005-2006

RMB1.0 million

Research on Humanized Monoclonal Antibody against


VEGF
Fc Fusion Protein of a New Anti-cancer Drug-sApo2L

2005-2006

RMB800,000

2006-2009

RMB650,000

Clinical Research on High Performance Consensus


interferon
Clinical Research on Interferon for Infant Pneumonia

2006-2009

RMB3.0 million

2006-2009

RMB900,000

Construction of Corporate R&D Centers


R&D of Interferon Aerosol

2008-2009
2007-2009

State-level projects
National 863 Program
National 863 Program Key Project
National Project of New Medicines Development
Innovation Fund, Ministry of Science and Technology
Innovation Fund, Ministry of Science and Technology
Innovation Fund, Ministry of Science and Technology
Provincial-level projects
Specific Industrial Project of Beijing Municipal Development
and Planning Commission
Key Project of the Beijing Science and Technology
Development Plan
Key Project of the Beijing Science and Technology
Development Plan
Key Project of the Beijing Science and Technology
Development Plan
Key Project of the Beijing Science and Technology
Development Plan
Key Project of the Beijing Science and Technology
Development Plan
Science and Technology Project for Daxing District of Beijing
Science and Technology Project for Daxing District of Beijing

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Investment highlights
Unique product with market leading position and high brand

recognition
Extensive distribution network with China specific marketing
strategy
Strong product life-cycle management; robust pipeline with near
term product launch potential
Highly efficient GMP approved production process
Professional reputation; strong established relationships with
customers/suppliers as well as government authorities

Innovative and experienced management team

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Experienced management team


Tri-Prime Gene is led by a team with vision, courage and
strong organizational capability
The management team uses innovative technologies and
business models to navigate the Company through rapidly
changing market environment and built its core
competitiveness for sustainable development
These factors are fundamental to Tri-Prime Genes
continuous growth and success

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Evolution
of policy

Evolution
of population
Economic cycles
and industry policies

Global medical market


Chinese medical market
Medical industry
Trade
policies
and
tax policies

Technology
development

Medical
system

Enterprises

Labor market and


welfare policies

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Healthcare

system

Public
health
and
environment
protection

Evolution
of society

Innovative technology and


business model
History and experience showed the growth of an enterprise depends
not only on its own effort, but also the business environment it is in. To
establish sustainable and competitive advantages in a new business
environment, an enterprise must take the following methods:

Develop customer focused high value products


Efficiently use the companys internal and external resources
Build sustainable and cooperative relationship with key parties
Establish innovative technology and business models that adapt
to the ever changing market environment

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Content
Company history
Investment highlights
Innovative technologies
Innovative business model
Growth strategy

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R&D pipeline
Approval for
clinical trials

Lab

Animal experiments

Approval for clinical trials

Approval for
production

Clinical trials

Approval for production


Interferon 1b spray
Interferon 1b eye drops

pediatric pneumonia
High dose interferon 1b
Long-acting interferon
Inhaled interferon 1b powder
Long-acting interferon II

Small interfering RNA

Albumin-free formula of Hapgen

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Long-acting interferon
Current progress:
Registration work
Applied as Class I novel medicine, entered special approval
stage
Passed in-site inspection of local Bureau of Drug Supervision
Passed sample inspection of National Institute for the Control
of Pharmaceutical and Biological Products
Currently evaluated by State Food and Drug Administration
Intellectual property

Goals
for 2009:patents
obtain application
approval for
clinical
trials in June
International
under
review
and complete Phase I clinical trials by the end of 2009

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Long-acting interferon design ideas


Accelerated evolution integrated interferon
High-activity interferon

Inducing 1b specific amino acid sequence


High-activity, low-toxicity interferon

Polyethylene glycol (PEG) modification

Long-acting, high-activity and low-toxicity interferon


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Long-acting interferon characteristics


PEG-IIFNm
(Tri-prime Gene)

PEGASYS
(Roche)

PEG-INTRON
(Schering-Plough)

Modification strategy

Site specific

Non site specific

Non site specific

Motif for modification

-SH

Free -NH2

-NH2-SH-OH
etc.

>9

Homogeneous

Heterogenous

Heterogenous

20kD

40 kD

12 kD

Analysis
method

SEC-HPLC

RP-HPLC

SEC-HPLC

Quality
criterion

Monomer95%
Oligomer 3.0%
Free IIFNm1.0%

Monomer 96%
Oligomer 3%
Others 1%

Monomer 85%
Oligomer 10%
Free IFN 5%

Iodine or commassie
blue staining

Iodine staining

Iodine staining

> 3.0106 IU/mg

1.0106 IU/mg

2.0107IU/mg

ng

N/A

N/A

11 folds increased in
animal

10 folds increased in
human

10 folds increased in
human

Number of modification site


Homogeneity
PEG M.W.

Purity

SDS-PAGE staining
Biological activity
PEG residues
Half life

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Interferon 1b
spray

Interferon 1b
eye drops

Indications
Skin herpes simplex

Indications
Herpes simplex virus infection in eyes,

Virus infection related primary or


recurrent herpes labialis and genital

including herpes simplex keratitis,


conjunctivitis, blepharitis, etc.

herpes
Specifications

Specifications
20g/2ml

25g/5ml
Dosing

Dosing
For acute inflammation treatment: one drop

1-2 spray per dose, three times per day,

per dose, 4-6 doses per day

7 days per course

Decrease to 2-3 doses or 1 dose per day in


one or two weeks
Two bottles for each course of treatment

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Other new products


Project

1. New indications
expansion for
low-dose Hapgen

Indication

Method of
applying

Pediatric viral

Aerosol

pneumonia

inhalation

R&D

Advantages
stage
High safety and mild side effect ;
the first clinical trial for pediatric

Phase I

respiratory disease in China

2. New indications
expansion for
high-dose

Renal cancer,
im
lymphoma, etc.

High safety and mild side effect;

Phase I

exploit tumor therapy market

Hapgen
3. 2nd generation of
long-acting

Laboratory
Viral hepatitis

im

Administration every two weeks


screening

interferon
4. Inhaled
interferon 1b
powder
5. siRNA

Viral hepatitis,
pneumonia

Viral hepatitis

inhalation

im

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Substitute injection

Application of edge-cut technique in


the area of hepatitis therapy

preclinical

preclinical

Content
Company history
Investment highlights
Innovative technologies
Innovative business model
Growth strategy

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Management vision
Tri-Prime Gene is dedicated to the creation of value for its customers
(patients). The Company respects the professional qualification of its
partners (doctors), and aims to establish mutually beneficial and long
lasting relationships with them. Our goal is to create a patient focused
business environment with the available social resources.
Provide customers (patients) with cost effective and efficacious
products
Establish sustainable relationship with our partners (doctors)
through high academic/commercial value projects
Manage resources from all aspects (governmental and nongovernmental); use innovative business model to create
socially responsible products

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Product-oriented sales model

Company

Sales
representatives

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Doctors

Customer-oriented sales model


Healthcare policy
development

Industry
suggestion

Healthcare business
development

Government
regulator

Set up academic topic


Clinic Research

Nationwide academic/
scientific promotion

Institute
organization

Department meeting
Academic visit
research
Company

Scientific
promotion

Professional training

Hospital
Doctor

Academic support
Service support

Patient education in hospital


Patient education in
community
Patient education

patient
Service network platform
Patient database

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Evidence-based promotion model


Company sales representatives use evidence-based
promotional methods
Academic seminars for dealers and distributors
Ideas

Academic
authority/expert

Clinical trials

Medical
application

Professional
scientific seminar

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Sales (RMB)

Net income (RMB)

70,000,000

14,000,000

60,000,000

12,000,000

50,000,000

10,000,000

40,000,000

8,000,000

30,000,000

6,000,000

20,000,000

4,000,000

10,000,000

2,000,000

0
2006

2007

2008

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2006

2007

2008

Content
Company history
Investment highlights
Innovative technologies
Innovative business model
Growth strategy

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Growth strategy
During the past 16 years, Tri-Prime Gene management
team has successfully navigated the Company through the

highly competitive and uncertain China healthcare industry


Tri-Prime Gene team leads with the principle of active
product management, asset management and capital

management
This flexible approach to business model and technology
management has led Hapgen to become one of the most

successful protein drugs on Chinese market

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Growth strategy
Product management involves the research, development, manufacturing and marketing of

Product

existing and pipeline products. The goal is enhancing product profitability by increasing market

management

share and brand awareness. Performance review criteria: revenue growth, market share, profit
margin, etc

Asset
management

Assets management focuses on increasing efficiency and profitability of the Companys


tangible and intangible assets. Intangible assets include customer relationship, goodwill,
industrial expertise, administrative resources, know-how and experienced and innovative team

Capital management focuses on enhancing companys market value by following sustainable

Capital
management

development strategy. Capital management activities includes: financing activities such as


private placement, IPO, and other investment/M&A projects. Performance review criteriaROI,
investment recovery period, etc

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Thank you!

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