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ShareVault Presentation

Due Diligence Preparation

&

Document Sharing Options

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Steve Joseph

Vice President of Market Development

Mike Liccardo

Vice President of Corporate Development

ShareVault Presenters

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Due Diligence Preparation Process

Why is it necessary?

Planning for it

Document Sharing Options

Common methods

Pro’s & con’s

Data Rooms

Pro’s & con’s of Data Rooms vs. other document sharing options

Data Room features

Data Room checklist (differentiators)

Q&A

Topics To Be Covered

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Due Diligence Preparation

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Used to review & validate licensing/partnering and

other business opportunities (e.g. M&A, asset sales)

For the prospective licensee/receiving partner

Allows evaluation of the IP, science, testing, business opportunity

Uncovers any important issues & gaps

Helps to determine deal valuation

Validates fit with their business

For the licensor/sharing partner

Enables selection of the “best” licensee/partner

Helps to optimize deal terms

Ensures continuing development and/or marketing of the asset

Due Diligence Processes

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Allows time to identify/prioritize goals (already covered)

Allows time to identify potential licensees/partners

Allows time to develop and justify valuation

Helps uncover holes & issues ahead of time

Allows time to collect/organize relevant documents

Doing all of this prep work presents an “organized and ready”

image to the potential licensees/partners and can accelerate the

due diligence process and a successful outcome.

Due Diligence Advance Planning

Using a business development consultant

Knows the therapeutic area

Has relevant large pharma connections

Has experience in valuation & licensing/negotiations

Doing it internally

Using a database to identify prospective partners

Using a database to understand past deal terms

Using a network to get access to the partner

Using an experienced IP licensing attorney

Have this decided and set up well ahead of any opportunities.

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Identifying Licensees/Partners

Missing/qualified expertise?

IP attorneys

Business development experts

Regulatory advisors, CRO’s, CMO’s

Data & info to justify the valuation?

Pre-clinical & clinical results

Having comparables available

Agreements/contracts handled?

IP ownership

Key IP expertise

Ahead of time, avoid “glitches” and be armed to pre-empt concerns!8

Uncovering Holes/Issues

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Document Sharing

Ensure ease of document sharing & review

Important for licensor/sharing partner AND recipients

Speed of sharing & review affects the speed of the deal!

Plan desired level of document security/control

Protecting documents from getting to unintended recipients

Avoiding accidental or malicious breaches by intended recipients

Recognize activity monitoring importance/value

Identification of primary interested partner

Identification of primary areas of interest

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Document Sharing Considerations

Having essential supporting documents available

Collecting them from all parties and centralizing their storage

Identifying and finding missing ones

Identifying and updating outdated ones

Having an organizing structure - a checklist

Using one – from an attorney, prospective partner, colleague at another company

Adjusting the categories to fit the company’s business, therapeutic area, stage of development, etc.

Making it easy for licensees/partners to narrow down the areas of focus and assign their domain experts.

Your documents will be used to tell and validate your story!

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Document Sharing Preparation

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Document collection done well ahead of time

Know the volume of documents to be shared

Avoid the mad “scramble” to find documents

Avoid sharing wrong & outdated documents

Company is immediately ready for sharing

- when the timing is right OR when it’s approached

Present a “well- organized” impression

Deal opportunities can and do show up on a Friday afternoon. Would

you be ready on Monday to share information?

Document Sharing Preparation

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Setting up document sharing with the other parties

Deciding the method to be used for document sharing

Deciding who gets access to what information

Planning document sharing well in advance if approvals,

technology purchase or configuration, training required

Validating in advance that people only see what they are

supposed to see

Planning effective information presentation

Staging disclosure of information – “unfolding” it

Making sure there’s a smooth process for getting questions about

document content addressed quickly and fully

Document Sharing Preparation

Confidential Disclosure Agreements

Are standard practice

BUT

Don’t stop hackers

Don’t provide control of documents sent to intended recipients

Don’t provide user and activity monitoring

“You don’t really need a CDA with people you know and trust and for

everyone else, it doesn’t help.”

- Harvard IP attorney

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Is a CDA enough?

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Document Sharing Methods

Physical Options

Conference & hotel rooms

Physical media

Electronic Options

eMail

Point-to-point file sharing tools

Cloud-based file sharing tools

“Data rooms”

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Document Sharing Methods

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Document Sharing: “Rooms”

Pro’s

Face to face conversations

Due diligence team is captive in one place

Quick answers to questions

Highly secure

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Document Sharing: “Rooms”

Con’s

Travel may be required – licensee expense & inconvenience

Constant room “management” required

Single party at a time review

Difficult to find information – no “search”

Limited ability to determine licensee interest

Complexity of handling documents for licensee’s multiple experts

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Document Sharing: Media

Pro’s

Easy to use & inexpensive

Quick access

Can handle larger volumes of documents

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Document Sharing: Media

Con’s

No control of documents or licensee use of documents

No activity monitoring – no ability to determine true interest

Inefficient for providing document updates

Difficult to manage and track when multiple licensees involved

No easy search

No ability to “obsolete” outdated documents

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Security Breach Example

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Document Sharing: eMail

Pro’s

Easy to use & inexpensive

Quick access

Efficient for small documents and document volumes

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Document Sharing: eMail

Con’s

Email hacking potential

No control of documents or licensee use of documents

No activity monitoring – no ability to determine true interest

Unusable for large documents & document volumes

Difficult to manage and track when multiple licensees involved

No ability to “obsolete” outdated documents

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Security Breach Example

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Document Sharing: Point-to-Point

Pro’s

Proven legacy systems

Secure (VPN & sFTP)

Handles large files

Simple for handling small document volumes

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Document Sharing: Point-to-Point

Con’s

Slow & frequent access challenges due to firewalls

No control of documents or licensee use of documents

No activity monitoring – no ability to determine true interest

Very limited for large documents & document volumes

Difficult to manage and track when multiple licensees involved

No ability to “obsolete” outdated documents

Requires extensive IT involvement

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Security Breach Example

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Document Sharing: Cloud Services

Con’s

Varying degrees of security & past breaches

No control of documents or licensee use of documents

Limited activity monitoring – no ability to determine true interest

Often blocked by large companies

PDF and other hyperlinks don’t work

May not have content level searching

Harder to do staged sharing of documents

No ability to “obsolete” outdated documents

Pro’s

Free or inexpensive

Can handle large volumes of documents

Easy access from anywhere (unless blocked)

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Document Sharing: Cloud Services

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Security Breach Examples

Lak of

Security

Limited Control

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Data Rooms

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Document Sharing: Data Rooms

Cloud-based platform

with bank-grade security

allowing organizations to

securely control & monitor

highly confidential documents

being shared with outside parties

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Data Room Definition

“Deal Room”

“e-Room”

“Virtual Data Room”

“VDR”

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Data Rooms – Other Names

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Document Sharing: Data Rooms

Pro’s

Usually have bank-grade security

Significant control of user access

Significant control of documents

Monitoring of document & user activity (= business intelligence)

Can handle large volumes of documents

Usually accessible from anywhere

Easier to handle multiple parties

Often required by large pharma, i-bankers, attorneys

Audit trail can mitigate “you didn’t disclose that” claims

Con’s More expensive than other options (relatively speaking)

Takes time to set up

User access can be an issue with severe firewalls36

Document Sharing: Data Rooms

Types of documents to be shared – non-confidential Overview slide decks

Elevator pitches

Patents

Can use watermarks to “mark” the document source

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Data Room Documents

Types of documents to be shared – confidential Prior art

Pre-patent IP

Pre-clinical info

Clinical info

Regulatory submissions

Comparative analyses

Contracts/agreements with other IP owners

CRO, CMO & other partner relationships & communications

Ease of use

Document handling

Document uploading

Document protection

Reports/Audit trails

Industry-specific needs

System configurations

Connections to other platforms

Support & training

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Data Room Considerations

Intuitive

Easily usable by administrators with minimal or no training

Easily usable by document recipients with no training

Speed

Fast scrolling of document pages

Responsive search engine

Minimal steps to accomplish tasks

International support

Interface for users available in multiple languages

Search support for documents in other languages &

character sets

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Data Rooms: Ease of Use

Size limitations

Ability to upload/search/display large documents (>1,000 pages)

Ability to store large volumes of documents (>100,000 pages) with

no performance degradation

Search engine

Content level search engine (or just file name)

Tags

Allowing single document to appear in 1 or more folders without

requiring document copies

Intra-document hyperlinks

Preservation of hyperlinking ability

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Data Rooms: Document Handling

Ease of uploading

Support for “drag & drop” uploading

Ability to reliably upload large volumes of documents (>2 GB)

Ability to automatically upload and unpack zip files

Ability for “users” to upload documents

Due diligence index creation

Ability to create data room folder structure from uploaded folders

Document formats

Ability to upload many different document types (not just PDF’s)

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Data Rooms: Document Uploading

Controlled access by users

Allow different levels of access by different users

Hide folders from viewing until appropriate time

Document controls

Dynamic watermarks that include email addresses,

date/time (to deter screen photos/capture)

“View only” option for documents

Ability to revoke access to downloaded documents

Ability to detect and block screen captures

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Data Rooms: Document Protection

Reports

Real-time reporting

Ability to review reports within the data room (spreadsheet

export not required)

Activity metrics

Ability to differentiate user interest level and interest focus

Audit trail

Ability to view and filter user and administrator activity

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Data Rooms: Reports/Audit Trails

BioPharma

Preservation of hyperlinks between PDF’s in regulatory

submissions

Support for sharing data analytics files

Life Sciences

Ability to support an organization’s HIPAA & 21 CFR Part 11

compliance requirements

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Data Rooms: Industry Requirements

Devices

Support for PC’s, Mac’s & mobile devices

Browsers

Support for all major browsers

Compatibility with older and newer versions

Configurability

Customization with company name & logo

System security

Compliant with industry security standards

Documents encrypted during storage AND during transfer

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Data Rooms: System Requirements

Data room features comparison checklist

(Handout provided)

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Checklist

Corporate governance

Sharing documents with Board members, attorneys,

auditors

Partners, vendors and distributors

Sharing contracts, price lists/quotes, customers lists, …

Service providers

Communicating with CRO’s, CMO’s, regulatory advisors

Centralized corporate archive

Critical company documents secured, backed up,

accessible from any location

Enables reduced IT support

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Data Rooms: Other Applications

Conclusion

Our thanks to BIO, Joe & Lesley for enabling ShareVault’s

sponsorship of this course and to all attendees for your

attention!

If you have questions or would like additional information,

please contact:

Steve Joseph: sjoseph@sharevault.com or +1 408-596-5603

Mike Liccardo: mliccardo@sharevault.com or +1 408-596-5587

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