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$3,500,000 Financing Proactive Immune Sciences Cryogenic storage of blood products or Immune Cell Banking. Healthy immune cells can be isolated from blood and indefinitely cryopreserved for potential use in personalized immune therapies to combat cancers and other immune and age related diseases. Solving the Industry s Problems 1. Age reduces immune cell effectiveness 2. Health declines with age 3. Incidence of cancer, pneumonia and other immune diseases increase in those 45+ The Solution: Proactive Immune Sciences
Market Size With the introduction of new technologies such as immune cell banking, the adoption rate is typically in the 2.5% range of the potential market. At Proactive s target pricing it estimates 2.5% of the potential market in Canada alone, or 247,000 people (the Innovators ), to be worth approximately $750 million (gross revenue) for the processing of these ICD and storage for five years. Should clinical trials clearly demonstrate the shorter term benefit to immune cell banking, Proactive estimates the market will grow by a further 13.5% (Early Adopters) or an additional 1.33 million people, representing an aggregate market of $4.8 billion over 5 years. While the numbers above reflect an estimate of the potential market in Canada, for the purposes of our business plan, Proactive has modeled a Base Case scenario that reflects a more conservative uptake by the target consumers. Over the first 5 years of operations, it is forecast that Proactive will process and store a cumulative total of 19,129 ICDs. This equates to 7.8% of the 247,000 Innovators referred to above. The above market projection is just for Canada. If the U.S. market is factored in the overall market potential would expand by approximately 10 fold. Additional capital would likely be required to expand the business outside of Canada.
Product / Tech. Components Cryogenic Immune Cell Processing - Customers register on-line, provide a medical history, pay, and then book a convenient time for their blood to be drawn (as simple as donating blood). Once registration is complete and the unit of blood is collected, it is shipped via medical courier to our facility in Burnaby, BC. Immune Cell Deposits (ICDs) are bar-coded and labeled to ensure the highest level of control and security. The immune cells are extracted and a small volume of blood is used for diagnostic testing (HLA typing and infectious disease testing). A specially designed multi compartment cryobag is utilized which will provide the customer with a potential multiple use ICD. The immune cells are then frozen using computerized equipment operated by highly trained technologists, then stored at -150 C or lower, where they can remain safely for decades. Storage and Monitoring of Cryogenic Immune Cells - Immune Cell Deposits (ICDs) are kept in vapor phase liquid nitrogen storage tanks specially designed for ultra-low temperatures (-150 C or lower). Annual storage and monitoring fee of $225 per year. Alternatively, clients may choose to advance pay for storage and monitoring for 10 years for one-time cost of $1,980 (12% discount from annual payment of $225 per year for 10 years).
Competitive Advantages First Market Mover - There are currently no other companies in North America offering this new product. Unmet medical need - There is no other source for individuals of personalized, diverse, healthy and unimpaired mature immune cells. Experienced management team - The core management team brings together the cell banking expertise & experience, scientific know-how and marketing and financial leadership to rapidly execute on Proactive s business plan Protocols for processing and storing immune cells and information management - Proactive will be developing its own processes for separating, freezing and storing immune cells using established protocols that have been proven to be safe. Accessibility and ease of doing business - Customers can complete their transaction on-line, with telephone support if necessary. Pricing - Prices have been set to be attractive to the target audience and competitive with other forms of cellular banking services.
Main Competitors Competitor Strengths Weaknesses Opportunity/Competitive Advantage over the Competitor Stem Cell banking companies They are established and utilize similar technology Stem cells have had limited applications, so credibility around a new cell line may be an issue. First to market immune cell banking and will be doing a lot to raise our profile. Will have fully accredited processes for handling the blood, separating and safely storing immune cells. Canadian Plasma Resources Have basic technology and protocols to handle blood products New target market and business. Would require new equipment and protocols to handle immune cells Focused on single cell line and do not have any of the issues related to stem cells. Will have established blood collection partnerships, ideally with exclusivity. Canadian Blood Services Credibility, tie bank to blood donation, ability to draw samples also have national stem cell banking service Inconsistent to their mandate of providing public services rather than private cellular banking Proactive will be focused solely on immune cell banking and will be very targeted, versus CBS, who also need to maintain their blood donation business. New Entrant Would be focused and could leverage the education Proactive will have done Capital cost of start-up Unknown, and will need to build brand We will be operationally streamlined to focus on extracting and storing cells, allowing us to keep our costs relatively low.
Marketing Strategy Product Strategy Pricing Strategy Promotion Strategy Geography of Distribution Proactive Immune Sciences offers customers a comprehensive immune cell banking service that is designed to assist them throughout their lives to ensure they have a good supply of immune cells available should they ever require them. Proactive will offer a convenient, secure on-line resource, providing customers with extensive consumer-friendly information about our services, status reports on their blood collection or immune cells in storage and in the near future, updates on recent developments in relevant immune therapy research. Proactive is pricing the service to be consistent with the opportunity and perceived value customers place on the potential health benefits their banked immune cells could have in the future. While $1,925 is not excessively high and is well within the reach of our target market, it yields a gross margin of approximately 50% on the processing of the collected ICDs. Proactive has chosen to keep the pricing at this level so as to make it reasonably affordable for customers to bank immune cells throughout their lives. To maximize Proactive s advantage of being the first to enter the immune cell banking market, our goal is to establish Proactive as the leader brand the creator of this new service. All communications will reinforce the brand, building the trust and confidence of our customers. Initially across Canada and the Pacific Northwest U.S.A.
Key Milestones Sep 2013 Acquisition of protocols to form the basis of Proactive Immune s immune cell processing and storage services Nov 2014 Development of business plan for Proactive Immune Sciences Oct 2015 Opening of lab facility for processing and storage of immune cell deposits Mar 2017 Positive cash flow from operations
Opportunity Highlights 1. Large untapped new market opportunity - There is tremendous excitement and investment in immune cell based therapies to treat cancer and other diseases. Science Magazine named Cancer Immune Therapy the breakthrough of 2013. As these treatments progress we believe that having a bank of healthy immune cells could help people requiring these treatments to have better clinical outcomes. 2. Experienced management team - Our team has extensive experience in all aspects of this new business, from the genetics and science of immune cell therapy, to having started and successfully built Canada s first cord blood stem cell banking company, to extensive marketing and business expertise and strong financial expertise in the biotech space. This is an experienced team that will deliver. 3. Positive cash flow from operations and net income in years 2 and 3, respectively - Our business model is based the stem cell banking model. Our costs are very accurate and our projections are conservative and yield very positive cash flow and profitability. Our Limited Partnership investment model, will pay investors back 100% of their investment, and a share of 30% of the equity in Proactive Immune Sciences Corporation (the company offering the LP).
Management Team Jeff Schulz, President & Chief Executive Officer Jeff Schulz is a senior executive and marketing professional with over 30 years of experience. During his career, Jeff has worked on some of the most well-known brands in BC and the country. Jeff moved to BC in 1991 and was actively involved for many years with BC s Children s Hospital; where he created and launched Jeans Day. He was Chair of the Board of Governors at the Vancouver Playhouse Theatre Company and was on the Board of Governors for the Vancouver International Wine Festival for nine years. Jeff Charpentier, Chief Financial Officer Jeff Charpentier is a senior financial executive with a successful record of leadership, management and business accomplishments in all areas of financial management gained in a variety of businesses, primarily in high growth technology sectors. He brings experience in working with entrepreneurial oriented companies at various stages of product development through to commercialization. Robert Holt, Ph.D., Chief Scientific Officer Dr. Robert Holt is currently the Head of Sequencing, Michael Smith Genome Sciences Centre, BC Cancer Agency and Professor, Molecular Biology & Biochemistry, Simon Fraser University and Professor, Department of Medical Genetics, University of British Columbia. Ernest Stacey, Director of Operations Ernest Stacey is an experienced Laboratory and Corporate Director. For over 40 years he has been involved with a number of clinical laboratories and services in the capacities of teaching, management and quality assurance, specifically in the field of Hematology. With a career that has taken Ernest to the leading edge of health sciences at various facilities across Canada, he has earned the respect of his peers and subordinates as a person of integrity and honesty.
Projected Revenues $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2015 Projected 2016 Projected 2017 Projected 2018 Projected
Use of Proceeds Category Percentage (%) Marketing 38.1% Start-up equipment costs 20.6% Working Capital 34.3% Financing costs 7.0% Total 100%