Innovation: Strategy, Successes and Challenges

Presentation to Research Administrators Discussion Group April 14, 2016

Christopher Coburn Vice President, Innovation PHS Strategies to Enhance Revenues from Industry & Commercialization • Create an integrated “front door” for industry – Streamline contracting process, enhance efficiency – Expand IRB services: agreements with commercial IRBs, focus on improving turn-around-times • Launch a Clinical Trials Office – Establish clinical trials office, with close ties to CCI (BWH), CRP (MGH), McLean, and Spaulding

• Leverage key Partners investments – eCare – Commons – creating commercialization opportunities w/Big Data initiatives and analytics (e.g., integrating siloed datasets: phenotyping, imaging, genetics/genomic, etc.) – PHS Biobank

Innovation Confidential – do not copy or distribute 2 Operating Thesis

• As largest academic research enterprise, PHS has unrivaled potential. If it: – better organizes its enormous capabilities, – actively leverages its strategic assets, – more effectively engages industry, – better exploits its prized Boston home, – increases its “innovation brand” and – runs Innovation like a business . . .

• . . . it can derive significantly greater financial and patient benefits from the creativity of its clinical, research and administrative staff and its organizational standing

Innovation Confidential – do not copy or distribute 3 Revenue Growth

Revenue Growth $140 ($M)

$120

$100

$80

$60

$40

$20

$0 FY13 FY14 FY15 FY16 FY17 FY18

Innovation Confidential – do not copy or distribute 4 Increased Potential

Research ($B) Active IP Applications $2.0 800

$1.5 600

$1.0 400

$0.5 200

0 $0.0 2011 2012 2013 2014 2015 2007 2015 80 Innovation FTEs (budget) Investigators 4000 60 3000 40 2000

20 1000

0 0 2011 2012 2013 2014 2015 FY13 FY14 FY15

Innovation Confidential – do not copy or distribute 5 Market Sectors

Cancer & Dermatology Anesthesia Neuroscience Radiology Cardiovascular Medicine & Surgery Orthopedics Business Venture Pathology & Plastics & Pulmonology Pediatrics Rheumatology Development Regen Medicine .

Market Sector Pat Fortune, PhD Jon Behr, PhD Sepi Hashemi Leader Phil Trung Roger Licari Do Kitterman

Carl Berke, PhD Director Dan Castro Jim Roberts Emy Chen, PhD Seema Basu, PhD Nancy Lugn Meredith Fisher PhD Jay Knowles

Revenue Goal $13M $23M $2M $3M $3M $1M $6M $1M $33M $9M $5M $103M*

Invention Goal 550 87 71 34 79 85 38 81 53 22

License Goal 31 16 10 53 22 8 47 13 12 212

Research Volume* $1.5B* $300M $60M $42M $266M $94M $102M $445M $75M $62M

TRIALS $50M $3M $4M $41M $6M $20M $161M $1M $7M

FTE Count 4 2 2 3 3 2 2 1 3 3 3 • Clinical “verticals” with senior industry executive leading each Sector • Unique strategy set in each • Deep domain knowledge; hospital leadership engaged by Department • Cohesive, tailored offerings to industry • Industry perspectives to faculty by Sector • Industry workflow expert leading operations

Innovation Confidential – do not copy or distribute 6 Innovation Advisory Board

Duke Collier Paul LaViolette Joe Cunningham, MD Neil Exter Jean-François Formela, MD Adele Gulfo IAB Chair IAB Vice Chair, Santé Ventures Third Rock Ventures Atlas Ventures EVP, Mylan SV Life Sciences

Michael Greeley Steve Gullans, PhD Andy Hurd Ed Kania Keith Kerman, MD Barbara Lubash Flare Capital Partners Excel Ventures CEO, MedeAnalytics Flagship Ventures Riverside Company Versant Ventures

Amir Nashat, PhD Steve Oesterle, MD Ben Pless Russ Richmond, MD, Sue Siegel Steve Weinstein Polaris Ventures NEA CEO, CEO, Advanced GE Ventures Novartis Ventures Autonomic Technologies Practice Strategies

Innovation Confidential – do not copy or distribute 7 Working With Innovation: /Pathology Market Sector

Cancer/Pathology Capabilities Invention/Discovery, IP Protection, Licensing, Industry Sponsored Research

Patrick Fortune PhD Daniel Castro Senior Market Sector Leader Director, Business Strategy and Licensing 857-307-2473 857-307-2470

Innovation Confidential – do not copy or distribute 8 Working With Innovation: Cardiovascular Market Sector

Cardiovascular Capabilities Invention/Discovery, IP Protection, Licensing, Industry Sponsored Research

Sepideh Hashemi Jacob Pierson Market Sector Leader and EIR Licensing Manager 857-307-2444 857-307-2446

Innovation Confidential – do not copy or distribute 9 Individual Process

Contact your Our team works We provide LM with you

Unmet IP: Models for collaboration need/Problem you Is it novel, has are trying to solve utility non obvious? Patent strategy, filing and licensing What is the proposed Market: Agreements product/service? Is there interested partner to sponsor Facilitation with PIF research or develop Connection to Trial Office

1 week 4-8 weeks Depends on external collaborator

Innovation Confidential – do not copy or distribute 10 1 Operating Model

Care Path Novel Unmet Needs Disease Insights Integration/ Intervention Optimization

Market Sectors: Market Pull with Technology Push

Triage Well Value Catalyze Unmet Need Proposition/ • Manage Assets & Idea Generation Translation Connect to • Relationships Potential/Leverage Funding Deliver Tangible Value

Engage with Other Areas • Relationship Division IP Protection • Diverse/current/broad • – Investigators • Leaders Outlook Set IP Patent Portfolio • – Industry Cultivate – FDA approval Strategy Compelling SRA • – Investors • Connections – Adoption Strategic Alliances IP/FTO • Identify/ – Reimbursement • Thriving Spin-offs • Innovation Team and • nurture Partnership • Digitally-Enabled Care • Tactical Program • prolific Potential Effective Management innovators – Industry Development – Investors – Foundations

Innovation Confidential – do not copy or distribute 11 The Full Package

The problem that you are trying to solve The solution and benefits (ex: reduce x/improve y, both clinical and economic) The offering (What is the product, platform or service?) Proof points (Data that is already available that validates the hypothesis, results presented (?) and publication in progress (?),physician affiliations (institutions) interested in early involvement, animal models that are highly relevant Stage of IP (Pending application covering XXX, IP portfolio overview) Management team (Names, years of cumulative healthcare, clinical and start-up experience); envisioned teams for regulatory, IP support. Market opportunity worldwide (Scale of problem, immediate market , market expansion, envisioned risks to market development and physician adoption) Market opportunity US Possible other related projects for the company Competition/Competitive landscape: Are there other companies working to develop such a device, compound, diagnostic or service? Any even addressing the problem, what are they, advantages and disadvantages of existing therapies. What is the competitive advantage that this solution will offer? Healthcare Economics: Understanding of opportunities and barriers to adoption Regulatory If you are aware of current FDA guidelines Development plan with Timeline Phases to develop, Key milestones, Time to market Exit plan Aiming for $X: Acquisition by a strategic partner What is the ask XX dollars to fund ABC

Innovation Confidential – do not copy or distribute 12 Partners Innovation Fund - $100M

Fund I $35M (2007), 25 companies -> $100M (2016) Portfolio enterprise value >$2.2B 5 exits, 26%IRR, $23M returned Adheron Anti-Cad-11 antibodies for treatment of RA, NASH, other indications Acquired by Roche in October 2015 for $580 million Annovation Safer anesthetic agent Acquired by Medicines Company February 2015 CoStim Pharmaceuticals Cancer immunotherapeutics around TIM-3 Acquired by Novartis in February 2014 Editas Company IPO in 2016 8.5x return; Market Cap >$1B QPID Health Acquired by eviCore February 2016 Fund II raises total to $100M

Innovation Confidential – do not copy or distribute 13 113 PHS Spin-offs in MA (203 WW)

Licensed Technology Alchimist Cambridge Devices, Inc. Alito Scientific Inc. Canthera Therapeutics Alopexx Pharmaceuticals Cerebrotec Alopexx Vaccines Chylack Incorporated Amasa Technologies Inc Colonary Concepts American Xeno, Inc. Commissure Inc. Annovation Biopharma CoStim ARGIL Imaging Cytocure LLC Avekshan LLC Deltix AviTx Inc. Descartes Therapeutics AZ Therapies Diacrin, Inc. BIND Therapeutics Empathetics, LLC BioEngine EndoLumina Solutions Biomodels, LLC eNOS Pharmaceuticals BioTransplant Inc. Epix Pharmaceuticals, Inc. Bixzen Therapeutics Functional Pharmaceuticals Gamete Technology, Inc. Ra Pharmaceuticals, Inc. General Fluidics RaNA Therapeutics, Inc. GI Company Raze Therapeutics HanGenix Renalworks Medical Harmonie Group, Inc. Riparian Pharmaceuticals Health Image, LLC RSTAR Inanovate, Inc. Sentien Biotechnologies, Inc. Investors Bio-Tech, Ltd. ShiftWork Systems, Inc. Lysosomal Therapeutics Sirtris Pharmaceuticals, Inc. MegaCell Therapeutics Solace Pharmaceuticals, Inc. Mercury Therapeutics, Inc. Spero Therapeutics MiRTLE Medical, LLC Synostics Inc. Equity Ownership Molecular Insight Syntonix Pharmaceuticals ArcherDx Hepregen Provasculon MoMelan T2 Biosystems, Inc. Ascelegen Therapeutics ImmuneXcite QPID Health Neuroptix Tal Medical Blend Therapeutics KDAC Therapeutics Quartet Medicine NinePoint Medical Teleos Pharmaceuticals Combinent BioMedical Life Image Rodin Therapeutics NitroMed, Inc. Tensha Therapeutics Cytrellis Biosystems Link Medicine Selecta Biosciences Nyx Devices Transkaryotic Therapies, Inc Daktari Diagnostics Nanopharma Spero Therapeutics On-Q-ity Vactex, Inc. DecImmune Therapeutics Newton Labs Symbiotix Biotherapies Orthopedic Technology Verinata Health Editas Medicine NKT Therapeutics Synovex OvaScience, Inc. VisEn Medical, Inc. Entheogen Nutritional Restart Centers Tempero Pharmaceutical Pathfinder, LLC Welgen, Inc. Ferrumax Pharmaceuticals Parcell Laboratories VisionScope PHT Corporation XTuit Pharmaceuticals Healthrageous ProteoThera Phylos, Inc. Zhealix Predictive Biosciences Innovation Confidential – do not copy or distribute 14 New Investment Capital

• Partners Innovation Fund II – $100M • Wellman Fund – first close, $50M committed - Pilot Fund Model will be extended across MGH if current model is successful. • Impact Investing – companion fund to PIF • New models, platform/technology enabled, owned businesses – Boston Nanotech spinoff based on MGH cell-separation technology $35M raised on $27M pre; – Outsourcing model based on digital pathology partnership and MGH Pathology brand value; – Machine Learning development consortium based on MGH capability centers in digital radiology and pathology image processing; – Potential for co-funded commercialization company for HIT or therapeutics (eg Spark, Juno) – Transform CTC Sponsored Research program to newco based on material value creation insight and development from MGH Cancer Center. $100M $50M+ $50M $35M PIF AUM Wellman Fund Impact Investing MicroMedicine $50M PIF II, $35M PIF I 85% of capital to Parallel invest to PIF $35M from Central plus reinvestment Wellman/MGH (by formula); Europe on $27M pre; spin offs; Angel/Friends of PHS 19.9 % MGH plus selected orgs; ownership; 10% to early stage Deal possible because Wellman projects of continued inventor involvement Innovation Confidential – do not copy or distribute 15 HIT Opportunity

• HC Transformation driven by IT/process innovation • Massive IT investment occurring HC wide • Entering post EHR implementation phase -- leveraging data, workflow and content into clinical workflow • High value data assets growing – financial, genomic, images, phenotypic, records, registries • Aggregators , creators and intersections yield value • Substantial multi-entity collaborations occurring across spectrum • PHS centers: CCH, LCS, MGH Applied Data Science, BWH Digital Health Innovation, others • 70+ discrete opportunities in PHS; typically fastest to market • Health Catalyst: $30M collaboration to develop PHM tools

Innovation Confidential – do not copy or distribute 16 1 World Medical Innovation Forum

• Jump start CEO level BD • Platform for new large deals • Culture change and brand development • Further highlight PHS innovators • Host top corporate, government and media worldmedicalinnovation.org leaders

Innovation Confidential – do not copy or distribute 17 2016 World Forum Speakers

Kenneth Anderson, MD, Harvard Medical School Kathy Giusti, MMRF Amir Nashat, PhD, Polaris Partners Usman Azam, MD, Novartis Jeffrey Golden, MD, BWH Ann Partridge, MD, DFCI Julia Beaver, MD, FDA Richard Gonzalez, AbbVie Michael Pellini, MD, Foundation Medicine Monica Bertagnolli, MD, BWH Marc Grodman, MD, BioReference Laboratories Amy Pollack, MD, Covidien James Bradner, MD, Novartis Institutes for BioMedical Daphne Haas-Kogan, MD, DFCI Gary Reedy, American Cancer Society Research Daniel Haber, MD, PhD, MGH David Reese, MD, Amgen Robert Bradway, Amgen Nir Hacohen, PhD, MGH Alessandro Riva, MD, Novartis Troy Brennan, MD, CVS Health William Hait, MD, PhD, J&J James Robinson, Astellas Pharma US Joan Brugge, PhD, HMS Sean Harper, MD, Amgen Scott Rodig, MD, PhD, BWH Giovanni Caforio, MD, Bristol-Myers Squibb Theodore Hong, MD, MGH Phil Rowlands, PhD, Takeda Bruce Chabner, MD, MGH Paul Hudson, AstraZeneca North America Judy Salerno, MD, Susan G. Komen for the Cure Andy Chan, MD, MGH John Iafrate, MD, PhD, MGH David Schenkein, MD, Agios Pharmaceuticals Antonio Chiocca, MD, PhD, BWH Joseph Jachinowski, Mevion Medical Systems Deborah Schrag, MD, DFCI Robert Copeland, PhD, Epizyme Katherine Janeway, MD, DFCI William Sellers, MD, Novartis Institutes forBioMedical Newt Crenshaw, Eli Lilly Joseph Jimenez, Novartis Research Francis Cuss, MD, Bristol-Myers Squibb Keith Joung, MD, PhD, MGH Arlene Sharpe, MD, PhD, BWH Thomas Daniel, MD, Celgene Research Cigall Kadoch, PhD, DFCI Sue Siegel, GE Ventures and Healthymagination Marc de Garidel, Ipsen Rajiv Kaul, Fidelity Investments Julie Silver, MD, SRH Louis DeGennaro, PhD, The Leukemia & Lymphoma Anne Klibanski, MD, PHS Nancy Simonian, MD, Syros Pharmaceuticals Society Maria Koehler, MD, PhD, Pfizer Oncology Business Peter Slavin, MD, MGH George Demetri, MD, DFCI Unit Andy Slavitt, CMS Sheila Dharmarajan, Zelnick Media Capital Krishna Kumar, Emerging Business, Phillips Nancy Snyderman, MD, GE Healthymagination Keith Dionne, PhD, Constellation Pharmaceuticals Peter Lebowitz, MD, PhD, Janssen R&D Risa Stack, PhD, GE Ventures Don Dizon, MD, MGH David Lee, Lumicell Billy Starr, Pan-Mass Challenge Glenn Dranoff, MD, Novartis Institutes for Biomedical Jeannie Lee, MD, PhD, MGH Kimberly Stegmaier, MD, DFCI Research Jonathan Leff, Deerfield Management Bruno Strigini, Novartis Oncology Jens Eckstein, PhD, President, SR One Gillian Leng, MD, NICE Guillermo Tearney, MD, PhD, MGH Helmy Eltoukhy, PhD, CEO, Guardant Health Neal Lindeman, MD, BWH Robert Tepper, MD, Third Rock Ventures Jeffrey Engelman, MD, PhD, MGH Massimo Loda, MD, BWH Henri Termeer Maurice Ferre, MD, Insightec Jay Loeffler, MD, MGH Claire Thom, PharmD, Astellas Tim Ferris, MD, PHS David Louis, MD, MGH Meg Tirrell, CNBC David Fisher, MD, PhD, MGH Thomas Lynch, MD, Mass General Physician's David Torchiana, MD, PHS Keith Flaherty, MD, MGH Organization Mike Vasconcelles, MD, Unum Therapeutics Pat Fortune, PhD, Partners Innovation Mallika Marshall, MD, WBZ-TV/CBS Boston Christopher Viehbacher, Gurnet Point Capital Jean-François Formela, MD, Atlas Ventures Marcela Maus, MD, PhD, MGH Ralph Weissleder, MD, PhD, MGH Jamie Freedman, MD, PhD, MedImmune Briggs Morrison, MD, Syndax Pharmaceuticals Johnathan Whetstine, PhD, MGh Mark Frohlich, MD, Juno Therapeutics Robert Mulroy, Merrimack Pharmaceuticals Chuck Wilson, PhD, Unum Therapeutics Levi Garraway, MD, PhD, DFCI Betsy Nabel, MD, BWH Dow Wilson, Varian Medical Systems

Innovation Confidential – do not copy or distribute 18 2016 Cancer Panel Topics

● A War or Moonshot: Where Do We Stand? ● Financing Breakthrough Cancer Companies

● Arms Race in Radiation ● First Look: The Next Wave of Cancer Breakthroughs

● Breakthrough Devices to Treat Cancer ● Global Cancer Markets

● Cancer Diagnostics: New Uses, New ● Immunotherapy I: Checkpoint Activation and Cancer Reimbursements? Vaccines

● Combination Cancer Therapies: Drug Resistance and ● Immunotherapy II: Cell Based Therapies

Therapeutic Index ● New Philanthropy: Patients Driving Innovation

● Creating a Disruptive Cancer Pipeline ● Study Designs to Meet the Challenges of

● Curative Therapies: The Economics of Game Personalized Cancer Medicine

Changing Science ● Surviving Cancer: New Realities, New Needs

● Discovery Café: Enjoy Lunch with Top Cancer ● Winning Portfolio Strategy Leadership from across Partners HealthCare

● Disruptive Dozen

● Early Detection and Prevention of Cancer

● and Novel Cancer Targets

Innovation Confidential – do not copy or distribute 19 Profile of Registrants

Attendee Industry Presence (in %) 35.00

30.00

25.00

20.00

15.00 Attendee Count 10.00

5.00

0.00

Innovation Confidential – do not copy or distribute 20 Innovation Discovery Grants

2014 MGH Winners • Therapeutics, Sensors for Pediatric Anesthetic Monitoring diagnostics, devices and Patrick Purdon, PhD MGH, Anesthesia Healthcare IT Treatment of Liver Disease with a Peptide Fragment Joel Habener, MD, MGH, Endocrine • Engage new innovators Treatment and Prevention of Metabolic Syndrome • VCs, senior execs guide Richard Hodin, MD, MGH, General Surgery Rapid Diagnostic for Infectious Diseases selection Deborah Hung, MD, PhD, MGH, Molecular Biology/CCIB Early Urine Biomarkers of Kidney Inflammation • 2014 --20 $50K awards Sylvie Breton, PhD , MGH, Nephrology/Center for Systems • 344 total applications Biology New Microdissection Tool • Round II underway – 219 Yukako Yagi, PhD, MGH, Pathology pre-proposals; 52 Treatment of Sepsis with Hemopexin Shaw Warren, MD, MGH, Pediatrics Finalists Treatment for Ovarian Cancer Patricia Donahoe, MD, MGH, Pediatric Surgery • Full proposals due May Novel Device to Improve Vein Graft Intimal Hyperplasia 13 Jay Austen, MD, MGH, Plastic Surgery Noninvasive Imaging of Fibrinogenesis • Ten $100k awards Peter Caravan, PhD, MGH, Radiology/Martinos Center An Optical Transducer Tracking System Anthony Samir, MD, MGH, Radiology

Innovation Confidential – do not copy or distribute 21 BBIC

• Consortium of BWH, MGH, HMS • Seven year grant (NIH NHLBI) Total BBIC dollars $13.2M, originally $12 million (added $1 million including Federal and matching to FY15, potentially more) launched September, 2013 funds

• Accelerate commercialization of lab BBIC Pipeline - Number innovation in therapeutics, devices, Development Stage and diagnostics Proposals in Review 4 ( 4%) • Funding plus commercial development expertise for technologies from Full Proposals in 6 ( 6%) member institutions Development • Housed in Partners Innovation Number of Awards 28 (27%) • Two main funding mechanisms: Number Not 66 (63%) – DRIVE: $200K direct plus Selected for overhead Development – PILOT: $50K direct plus Total 104 overhead

Innovation Confidential – do not copy or distribute 22 Innovation Fellows

• Increase collaboration between PHS community Skill acquisition

and industry Clinical trial design • Bidirectional on-site training opportunity – personnel exchanged between PHS hospitals FDA Interaction and participating commercial entities – Project execution biopharm and investment funds

• Offers opportunities in non-academic careers Monitoring

• Workforce enhancement: participants return to Data analysis PHS hospitals with enhanced commercial translation skills Drug development

• 25 early-career, professional staff for 6-24 month Protocol review periods Reimbursement

Innovation Confidential – do not copy or distribute 23 Kendall Square Home

• Deal Makers (50 total) to Athenaeum (215 First), balance to Assembly Row • Unrivaled density: Biopharma, VCs • Continuous presence for PHS – On site star PI series, home & home neighbor outreach • Open landscape in 100 y/o landmark • Increased visibility – PHS top of mind • Neighbors: Biogen, Bluebird, BMS, Genzyme, IBM Watson, among others. • Tenants: Tech, Constellation, Decibel, Neon, Relay Therapeutics, Eleven Bio, Seres Health, Sarepta, Surface Oncology, Xconomy.

Innovation Confidential – do not copy or distribute 24