Æsis Research Group

Ogan Gurel, MD MPHIL

Chairman

June 2, 2007
Chicago

Donald J. Trump
CEO
Trump Organization
725 5th Ave
New York, NY 10022-2516
Sent via fax to (212) 935-0141
Page 1 of 2
Dear Mr. Trump,
“… if you’re going to make a deal of any significance, you have to go to the top.1”
I would like you to consider participating in a deal which while relatively insignificant in terms of initial investment (e.g. <
$6M) is very significant with respect to its importance, prestige, upside and impact. It is the sort of deal that Bill Gates,
Michael Milken and Sumner Redstone2 have been trying to achieve but have yet to find. It is about accelerating medical
innovation and actually involves a bit of real estate. It is the real estate factor, the Chicago location (which I know you would
like to be more involved with) and the truly compelling vision that make me feel that you may be interested in learning more.
This deal would create the world’s leading Life Sciences Accelerator – what I call Excellerant –
a concept which is summarized below and outlined in the published article that follows this fax cover letter.
This proposal is not a philanthropic endeavor but a real business deal promising very high returns and high societal impact.
High-Level Summary: An unprecedented opportunity exists in the greater Chicago area to purchase an existing 70,000 sf
high-end research facility for an extremely low price of less than $4M (as compared to a replacement value of $28M and an
estimated overall capitalization of at least twice that). The current tenant is a contract research organization (CRO) that
previously had annual revenues of nearly $20M. The building and CRO – despite the unusual “fire-sale” circumstances – are
fully FDA certified. Along with interested investors, I intend to purchase the building and the CRO, restructure the latter to
function in about 10,000 sf and to lease the remaining space to life sciences (biotech & medtech) startups and development
stage companies. Because rental rates can be quite low (perhaps 75% less than other incubators which have to make up the
full cost of their capitalization) and the facilities are of such high quality, demand for this space will be very high. Only the
very best companies will be permitted to lease and stay within the building. Furthermore, the effectively subsidized rent
enables investors (through the Excellerant holding company) to hold equity stakes in the tenants without any cash investment
(unlike most venture capital firms). Management expertise as appropriate will also be provided to those companies bridging
the “innovation gap.” And unlike conventional business incubators – whose business model is limited to rental income – this
unique facility will tie tenancy to the achievement of development milestones and thus the value of each tenant will be
accretive not only from a rental basis but also from the value-added equity position. In short, the mission of this unique
facility, the associated CRO and advanced incubator model is to be the leading Life Sciences Accelerator in the nation.
It’ll be a pace-setting paradigm for desperately needed new approaches to accelerating biopharma and medical technology
innovation while providing high returns to its investors.
In identifying and moving the deal forward, I have been assembling an absolutely world-class team as well as generating
significant interest among influential Chicagoans. However, because of the unique and volatile nature of this deal - as you
more than anyone else can appreciate - I have been very selective about whom I’ve invited. I believe someone of your stature
and resources will bring a lot to the deal and likewise, this vision – which will literally help save lives through faster cures –
would constitute a truly amazing and highly accretive addition to your already very strong and diverse portfolio of interests.
I am happy to answer any questions you may have. While I recognize that you are very busy, I trust you will understand that
“timing is everything” and I hope to hear from you soon. If you have time during your upcoming visit to Chicago, I would be
delighted to show you the site and share with you the vision.

Best regards,

gurel@post.harvard.edu

1
Trump, DJ (1987), “Trump: The Art of the Deal”, p. 127.
2
See http://www.fastercures.org.

PO Box 578025 Chicago, IL 60657-8025 | Tel (312) 246-5160 | Fax (773) 409-5897 | gurel@aesisgroup.com
Providing investment intelligence and research services to healthcare investment decision makers
Call to Action: How to Accelerate Medical Technology in Illinois, Beyond 5/30/2007
The mission of MedTech Futures, which appears on MidwestBusiness.com every other Monday, is to provide insights into developments in the medical technology and health-care scene in the
Midwest as well as globally.

CHICAGO – It is 11 a.m. on Wednesday and there’s a fire under my feet.

My MidwestBusiness.com editor, Adam Fendelman, has asked for this column by 1 p.m. As teenage parlance would go, I need to “get busy”! Adam is a great
editor. He gives me writing freedom and edits gently yet masterfully. He runs a tight ship, too, and if people don’t deliver, he’s not happy.
While this column usually appears biweekly, the topic of putting a fire under biopharma and medical tech development justifies a double dose this week. What will it
take to accelerate biopharma and medical technology development?
What kind a fire can we light under the feet of already highly motivated clinicians, scientists, investors, government and business folks? Is there more we can do?
A related problem is the relative dearth of biopharma initiatives in Illinois and the Midwest. Of course, we have Abbott Labs and Baxter along with GE Healthcare up
in Wisconsin and Eli Lilly down in Indianapolis. Certainly there is no dearth of start-ups in the area as well.
More than a year ago and right after the mega BIO 2006 conference in Chicago, I wrote a column about the Midwest as innovation central. Even so, most people
will cite San Francisco as the nation’s focus for biotech while route 128 outside Boston, the Research Triangle in Raleigh-Durham and the pharma alley in New
Jersey remain recognized leaders in the life sciences.
Even these storied bastions of biopharma and medical technology still grapple with the innovation gap problem written about on Tuesday.
I’ve also previously written about how the private equity boom has potentially shunted funds from early stage innovation, in agreement with others such as
professor Gary Pisano of the Harvard Business School about how conventional venture funding paradigms may not fully meet the needs of fledging biotech
businesses and about the need for new business models to accelerate development.
I have mentioned how efforts by groups such as Michael Milken’s FasterCures organization could potentially help accelerate the path to cures and solve such
problems as the innovation gap. Even FasterCures – with millions of dollars from major players such as the Gates Foundation and the Sumner Redstone Charitable
Foundation – has accomplished little with its millions.
FasterCures apparently hasn’t given a speech since January and its last posted publication was in Oct. 2005. Its most recent president’s letter was issued last fall,
which was cloaked in an underhanded way as a politicized critique of the war in Iraq. While Iraq is an important issue, let’s not confuse our priorities.
It’s easy to be negative. Here’s where the fire under my feet is leading me. I would like to share with you a proposal to help accelerate biopharma and medical
technology development in Illinois. Because the problem is so deep and so important, Illinois making headway on a solution can effectively position the state to lead
the nation.
In Tuesday’s column – a Memorial Day parable headlined “The ‘Innovation Gap’: Preventing Ideas From Untimely Deaths” – it was pointed out how the innovation
gap constitutes the rate-limiting step in the path from bench to bedside and from fledging idea to saving lives. Tuesday’s column also discussed how conventional
“incubator” models may not completely solve the problem.
For one thing, a business model built around extracting rents from cash-strapped start-ups has its challenges.
While many incubators are quite successful – there are about 1,500 business incubators operating in North America, according to National Business Incubation
Association CEO Dinah Adkins – there may be significant incentives for fledging tenants not to leave and to move along at a slow enough pace to ensure a
comfortable rental income stream.
Please don’t get me wrong. Dedicated entrepreneurs in the life sciences are among the most highly motivated people on the planet. This is not a critique of them.
Still, when the system is stacked against you, even a will of Arthur Schopenhauer proportions is but a whimper in the silence.
In the Memorial Day column, I hinted at a new model for life sciences development: a life sciences accelerator. The concept would involve several components that
have been developed in greater detail in previous columns. Let’s outline these in more detail:
1. Development of a highly functional laboratory facility that is partly subsidized by a combination of government funding, philanthropic donations and/or
simply buying into existing facilities at a low cost.
2. The presence of an in-house contract research organization (CRO) that would help service the needs of accelerator tenants but would also have
external clients so the business alone would be viable in its own right. The CRO would also manage most of the equipment in the facility and offload
these tasks from the tenant companies.
3. A management company within the facility that would provide operational management expertise to the tenant companies. In this regard, it would be
important to select the companies in such a way that conflicts of interest would not arise. If so, management resources would need to be realigned.
4. This life sciences accelerator facility would offer below-market rental rates to its start-up and development-stage tenants. In return for subsidized rent,
the management company would be granted a certain degree of non-controlling equity in these tenants.
Because of the combination of low rental rates and high-end facilities, the accelerator would experience high demand for its space and allow it to be
selective about its tenants and aggressive about moving tenants out.
Here’s the kicker. Even though the management company would not have a controlling interest in its tenants, it still would determine whether its tenants stay or go.
Like the “up or out” philosophy that has worked so well with the blue-chip management echelons of GE and the competitive brilliance of McKinsey consultants,
companies would have to reach aggressive milestones or find somewhere else to putter along. While this may be cruel, ultimately by accelerating biopharma and
medical technology development lives will be saved.
Is this pace-setting life sciences accelerator based in Illinois just a dream? I wouldn’t be writing about this unless I had a specific plan in the works. If you are
interested, please e-mail me. If you prefer, I am – in this column only – providing my phone number: (312) 246-5160.
As it’s now 11:45 a.m., I’m ready to hand this off to Adam. It’s nice to see what a little fire can do. I look forward to your calls and e-mails.

Dr. Ogan Gurel is chairman of the Aesis Research Group, which provides forward-looking information and research services to the health-care
and life sciences investment community. Gurel was previously CEO of Duravest, a publicly traded Chicago investment company that initiates and
develops next-generation medical technologies. Previous to Duravest, he was a vice president and medical director at Sg2, a health-care
intelligence think tank and consultancy serving hospitals and health systems. He can be e-mailed at ogan@midwestbusiness.com.

Previous Columns in 2007:

The ‘Innovation Gap’: Preventing Ideas From Untimely Deaths (5/29/2007)
The Diabetes Divide: Is Diabetes a Surgical or Medical Disease? (5/14/2007)
Unfolding Tragedy: ‘Balancing Act Between Innovation, Health-Care Access’ (5/1/2007)
Personalized Medicine, Tech Convergence Decisive Trends (4/16/2007)
KKR Buys First Data: On Private Equity, Pipelines, Development (4/2/2007)
What Patients Want: A Story of Choice, Trials, Evidence-Based Medicine (3/19/2007)
Gov. Blagojevich Announces IllinoisCovered to Insure 1.4 Million in Illinois (3/5/2007)
Medical Design Excellence Awards Offer Decisive Glimpse Into Future of Health Care (2/20/2007)
What’s More Important in Medicine: Diagnostics, Therapeutics or Prognosis? (2/5/2007)
Lance Armstrong and the Future of Cancer Care (1/22/2007)
Subtle But Powerful, Publication Bias Goes Beyond Financial Incentives (1/9/2007)
Click for 2006 column archive.