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(S)Etifoxine
HN
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O
Executive Summary
November 2012
Cl
Etifoxine
aka. Stresam
Introduction
NextGen Development Group, LLC (“NGDG”) is seeking financial partners to fund the development of a
unique, low risk drug. (S)-etifoxine (the “Drug”) is a first in class pain-relieving drug candidate, with the
power of morphine and oxycodone, but without the addictive, sedative and GI side effects. The U.S. pain
medication market is $15 billion/year and there are no marketed drugs with the beneficial profile (S)etifoxine is expected to show. The Drug was derived from Stresam® (chemical name etifoxine), an antianxiety drug which has been marketed in Europe for over thirty years. Stresam® has no addiction liability
or sedative side effects, and has been shown to significantly relieve pain in patients in clinical trials.
NGDG was formed by a group of experienced scientists and business professionals to evaluate and fund
select life sciences opportunities. NGDG has recently partnered with Anvyl LLC (together the
“Partners”) for the purpose of funding the development of the Drug. The Partners intend to raise
$5 Million (the “Initial Investment”). The Initial Investment will fund the IND (Investigational New
Drug) enabling studies required by the FDA prior to dosing humans in Phase I clinical trials. As outlined
in the Investment section of this summary, the investor(s) will receive 100% equity ownership initially,
and a base return of 1.5x their Initial Investment.
(S)-etifoxine (brief technical description)
Anvyl LLC was granted the Patent Rights to (S)-etifoxine (the drug) in February, 2012 (USPTO
#8,110,569 B2). (S)-etifoxine is an isomer, chemically isolated from Stresam®, an approved racemic drug
(off patent) prescribed in Europe. In over 30 years of human use, Stresam® has not shown significant side
effects or addiction liability, and therefore, has been sold as a non-scheduled drug. Stresam® is a positive
allosteric modulator (PAM) of the GABAA receptor (GABAAR) which mediates its anxiolytic activity.
Recently, Stresam® was also shown to activate the mitochondrial membrane translocator protein (TSPO),
previously known as the peripheral benzodiazepine receptor (PBR). Stresam®’s activation of TSPO leads
to the biosynthesis (i.e. biogenesis) of neuroactive steroids that independently modulate GABAAR. In
addition to Stresam®’s direct GABAAR-modulatory activity, steroid biogenesis appears to be responsible
for some of its therapeutic efficacy in anxiety and pain, such as chemotherapy-induced neuropathy and
peripheral nerve injury.
Anvyl scientists in collaboration with scientists from the University of California Irvine have isolated and
characterized the two Stresam® isomers. Preclinical studies determined that the (S)-isomer of Stresam®
((S)-etifoxine) is a non-sedating anxiolytic, superior to existing drugs such as Xanax®, Valium® and
Prozac®. It was also discovered that (S)-etifoxine possesses highly potent analgesic activity comparable
to morphine (the gold standard) which is consistent with Stresam®’s TSPO-mediated effects on
chemotherapy-induced neuropathy and peripheral nerve injury. However, (S)-etifoxine does not display
any of the negative side-effects associated with morphine. Even more notably, Stresam® has
demonstrated peripheral nerve regeneration and functional recovery. It is believed that (S)-etifoxine will
retain these same properties. Development of active isomers obtained from previously existing
medications is a well-known and proven successful strategy (i.e. Lunesta®, Xopenex®, Brovana®).
Private & Confidential
Nextgen Development Group
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Team
NGDG, the managing member of the Partners, was formed to analyze and facilitate funding for select life
science opportunities. Members of the Team have experience in every phase of drug development.
Below is a breakdown of the Partners management teams and their relevant experience:
ANVYL
7 PhD scientists, incl. 1 MD Psychiatrist / Neurologist
Experience in biotech IPO
Based in California
NEXTGEN DEVELOPMENT GROUP
12 members
9 experienced scientists in drug development
3 financial professionals
7 member Strategic Advisory Board
Headquartered in Louisiana with offices in Michigan and Colorado
Investment
The Partners formed a new, single purpose entity, (S) Etifoxine Development Fund, LLC (“SEDF”) to
develop the Drug. Based upon current market indications, SEDF has a current estimated value of $5M.
The exit strategy and potential investor return will be based on sale of the Drug rights. SEDF intends to
establish value and a marketable “proof of concept” by moving the Drug through multiple phases of the
FDA drug evaluation process. Each additional FDA development phase will require additional capital
funding. Once an acceptable valuation has been established, SEDF will sell the Drug rights to an
appropriate pharmaceutical company for an upfront fee, additional milestone payments to be tendered
with each successful drug development phase, and market royalties after the Drug is approved for public
use by the FDA. With each successfully completed FDA drug development phase, SEDF’s value is
expected to increase substantially. The estimated time to complete the first development phase (IND) is
approximately one year.
The successful history of developing drugs from active isomers as well as thirty years of human
experience and clinical trials with the racemic drug (Stresam®) in patients, tremendously reduces the
probability of unexpected human efficacy or toxicity issues.
The investor(s) will be heavily favored in the early stages of the Drug development timeline as shown
below in Table 1. The investor(s) will have the opportunity to exit at future capital raises at the terms set
forth below in Table 1, and will also have the opportunity to participate in any future capital raises at the
terms set forth at the time of said funding. As shown in Table 1, the investor(s) return is broken down
into two parts:
1. Base Return: 50% return on Initial Investment prior to all other distributions.
2. Equity Return: 100% of remaining funds after Base Return, only subordinate to Base Return,
until Initial Investment valuation and Base Return have been realized. This ownership is
reflected in Table 1. Investors will receive a flat 5% of all revenues after $25M valuation.
Table 1
Valuation
Round A Investment
Investor Base Return
Investor Equity Return
Investor Total Return (incl inv.)
Investor Total % Return
Investor Equity Ownership
$5.0
$10.0
$20.0
$25.0
$30.0
$5.0
$5.0
$0.0
$5.0
0.0%
100.0%
$7.5
$7.5
$7.5
$7.5
$7.5
$1.3
$2.5
$3.1
$3.5
$3.8
$8.8
$10.0
$10.6
$11.0
$11.3
75.0% 100.0% 112.5% 120.0% 125.0%
87.5% 66.7% 53.1% 44.0% 37.5%
Private & Confidential
Nextgen Development Group
$15.0
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Highlights
NGDG was formed by talented pharmaceutical scientists with the proven ability to take compounds
from discovery through human clinical trials
Low risk, high potential, multi indication drug (pain and anxiety)
Proven successful strategy (i.e. Lunesta®, Xopenex®, Brovana®)
Conclusion
This is a truly rare opportunity for in the pharmaceutical industry – a preferential investment in the
development of a drug with incredible market potential, multiple indications, a direct, straightforward
path to clinical trials, with a very high probability of success.
Additional technical and/or investment information is available upon request.
Contact Information:
NextGen Development Group, LLC
4609 Fairfield Street
Metairie, Louisiana 70006
Brent Kovach
Managing Partner of NGDG
[email protected]
Office: 504-885-0585
Cell: 504-583-1202
Tom Guinan Jr, CFA
CFO of NGDG
[email protected]
Cell: 215-356-9009
This Executive Summary being provided by NextGen Development Group LLC (“NGDG”) was prepared by NGDG
based on information provided by Anvyl to NGDG and is solely for informational purposes relating to a potential
transaction between the recipient and SEDF and to enable the recipients to determine whether they are interested in
obtaining more detailed information regarding the business, financial condition, prospects and management of
SEDF. Any investment involving SEDF involves risks and should only be considered after completion of an
independent investigation by the recipient. The contents of these materials have not been independently verified by
NGDG. NGDG does not make any representation or warranty, express or implied, as to the accuracy or
completeness of the information contained in these materials. NGDG expressly disclaims any and all liability which
may be based on such information, errors therein or omissions there from. The recipient can only rely on (i) the
results of its own investigation and (ii) the representations and warranties made to it by SEDF in connection with a
transaction or other business arrangement. The statements contained in this summary contain forward-looking
statements that involve risks and uncertainties that could significantly impact SEDF, and actual results could differ
materially from those anticipated by forward-looking statements. Accordingly, such statements should not be
regarded as a representation by SEDF, NGDG, or any other person, that results contemplated by such forwardlooking statements will be achieved. SEDF and NGDG undertake no duty to update any of the forward-looking
statements, whether as a result of new information, future events or otherwise. Under no circumstances shall this
communication constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Private & Confidential
Nextgen Development Group
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