Background

The production of therapeutic proteins is a billion dollar industry and AzarGen's expression platform will enable the production of therapeutically superior proteins at a significantly reduced cost. Compared to current production systems (mammalian, yeast and bacterial), the use of plant cells to express human recombinant proteins offer greater advantages with regard to:

• Safety - no immunogenic responses or animal/bacterial-derived contamination.
• Complexity - plants are higher organisms with protein assembly mechanisms similar to humans, which can synthesize complex biopharmaceutical proteins (unlike bacterial fermentation systems that lack post-translational modification processes).
• Cost and scalability - plant-based systems allow for significantly lower facility and production costs (compared to mammalian cell-based systems) and production can easily be scaled up to accommodate increased demands.

Business Opportunity

AzarGen has identified a commercially viable need for the production of a candidate therapeutic protein of which different animal and/or synthetic preparations are currently being used for replacement therapy in clinical trials worldwide. Drawbacks associated with the current preparations include: i) low or no clinical efficacy, ii) limited product supply, iii) health risk of especially animal-derived products, iv) high cost of product development. The need is obvious and AzarGen has the technology with clear advantages to address this need and develop a complex human-based protein for specific replacement therapies of which the estimated global market forecast is approximately $2 billion annually.

Target Market

Biotech and pharmaceutical companies who:

• want to be market leaders, developing and marketing "blockbuster" drugs for specific diseases
• want large (specific and/or diversified) drug pipelines
• are dissatisfied with the supply limits, partial activity, high production cost, safety concerns and high cost of therapy using synthetic, animal and/or bacterial-derived pharmaceutical compounds
• need to ensure access to future drugs and/or development platforms through i) external product development, ii) royalty/licensing agreements, iii) alliances with or iv) buying out smaller biotech firms.

AzarGen Offer

Unlike our competitors using i) animal-derived or ii) synthetic compounds that only mimics the natural human protein, we offer an alternative and patentable plant-based technology to produce exact functional copies of the human protein for replacement therapy.

Product Development and Business Model

AzarGen's product development strategy fits into the 'early phase' (concept, IP protection, pre-clinical) of the typical drug discovery process, focussing primarily on the development of biosimilar (bioequivalent/generic) products of which the original version/s are commercially proven and well understood. AzarGen's strategy should significantly reduce the risks and costs associated with conventional new drug discovery and allow circumventing existing patents. AzarGen's research has identified an increasing trend for biotech start-ups to exit prior to OR after pre-clinical trials at valuations ranging from $10m to over $100m. Additionally, for this particular candidate protein, AzarGen is targeting an existing, multi-billion dollar market, supporting the conclusion that a $20m exit should be achievable within a relatively short timeframe (3 to 5 years).

Current Operation and Stage of Development

AzarGen has an agreement in place with a local University to rent laboratory space where they have access to state-of-the-art facilities to conduct research of the highest standard with special emphasis on plant genetic engineering. AzarGen has reached two significant milestones: 1) expression/detection and 2) characterization of human candidate protein in tobacco plants. Further developmental requirements to reach Proof-of-Concept include small-scale isolation and purification of target protein.

Investment received

Following an investment from South Africa's Industrial Development Corporation (IDC), the AzarGen team aims to address the developmental requirements to complete its Product Development stage, running to December 2015. On the back of very promising results, the team have attracted strategic partners to support the IP protection and to advise on business strategy and positioning for pre-clinical trials. The team has defined a work-plan for the next 3-5 years. This plan includes relevant milestones and the current funding prior to pre-clinical trials will be used for:

• construction and evaluation of novel plant expression vectors (expressing recombinant human proteins)
• target protein detection, small scale isolation, purification and characterisation
• IP management
• Pilot scale production and purification of target protein (protocol development)
• Detailed characterization/formulation of human protein candidate (explore peptide structure to identify modifications that might enable broader spectrum activity/use)
• Strategic and Marketing strategy (identify and prepare best route for commercialization/partnership)

An exit prior to pre-clinical trials is an option, however, AzarGen's strategy is to exit after pre-clinical trials, where a return on investment would be significantly higher, but additional funding will be required.

AzarGen Team

Mauritz Venter

Mauritz is co-founder and CEO of AzarGen. He conducted genetic research at Stellenbosch University, completing two postdoctoral fellowships (in plant biotechnology and human genetics respectively) and worked as a contract researcher, lecturer and MRC project leader. He was part of the first group of postdoctoral fellows in South Africa to receive the NRF Innovation-Fund Postdoctoral Bursary in 2005-2006. He has presented papers at several national and international conferences and authored or co-authored 13 research, book chapter and authoritative review articles in biotechnology and medical genetics. Mauritz received a skills development bursary from TIA and joined Cape Venture Partners (CVP) as a business analyst (one year internship) to gain experience in market research and business analyses for investors/clients in hi-tech industries (i.e. renewable energy, biotechnology and telecoms).

Cobus Zwiegelaar

Cobus is co-founder and COO of AzarGen and is also our leading scientist. He had a keen interest in business and was involved in several ventures from an early age, which contributed to develop him as an entrepreneur. During his studies at the Stellenbosch University he gained extensive research experience in a wide range of life science disciplines (microbiology, biochemistry and plant biotechnology). He completed his PhD in 2009 at Stellenbosch University and during his studies received funding from the Human frontiers Science Program (http://www.hfsp.org) and had the opportunity to present his work at Potsdam in Denmark, Kaiserslautern in Germany and Stanford University in the United States of America. He also organized as well as presented his PhD work at the international tropical crop biotechnology conference held near the Kruger National Park in South Africa in 2009. He currently manages the day to day business operations and product development at AzarGen.

Cape Venture Partners

Tony Mallam (BComm, BAcc, Accounting and Commerce) is partner representing AzarGen Having qualified as a CA with Arthur Andersen, Tony joined SABC where he spent six years working in radio, advertising and general management. Tony moved on to take the position of FD with Alexander Forbes, then left to successfully tender for KFM Radio in Cape Town with a consortium that included Ethos Private Equity. The station was sold in 2000 to NAIL media; at which point Tony began to invest in a number of start-ups, one notable success being Clickatell. For the next year, Tony consulted extensively to entrepreneurs and eventually met up with the other CVP partners. Tony has a passion for early stage TMT enterprise, and although he is a financial specialist by training, his all-round knowledge covers strategy, marketing, sales and systems. Tony is also on the Judging Panel of the Technology Top 100 competition and is MD of Tastewise International. Tony offers AzarGen guidance on strategic and financial management as well as on the commercialization strategy.

Chris Bull (Chem Eng, LLB)

Chris Bull is a partner of Spoor & Fisher and Head of the Intellectual Property Commercial Practice. Chris has 18 years experience in London and South Africa in intellectual property and technology commercialisation. Recognized as one of the leading IP licensing lawyers in South Africa, his experience includes negotiating successful technology and strategic collaborations and exits. Chris Bull has since 2005 served as a director of a European based biotechnology company focused on the development of a yeast expression platform for the production of therapeutic proteins, cell surface display, monoclonal antibodies and the treatment of monoclonal antibodies. Chris offers strategic guidance on the funding and development of a platform for the production of therapeutic proteins and positioning AzarGen for a pre-clinical exit.