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Archive for December, 2017

San Francisco, January 2018

Gerbsman Partners wishes you and your family, a Happy, Healthy and Safe New  Year

We also say “thank you” to our clients, advisors, business partners and all the people the team has been involved with.  Gerbsman Partners goals have and always will be, to “Earn the Trust and Confidence” of our clients and to maintain the highest standards of “Ethics and Integrity”.

As we enter this New Year, we do so again with “Hope for the Future” and with the belief that the heritage of our nation will continue to demonstrate the values of our forefathers.  Life, Liberty and the pursuit of Goodness.

Please accept our appreciation for your past support, confidence and trust.  May 2018 be a successful and profitable year for you and more importantly, provide a gateway to a bright and prosperous future for our children and grandchildren.

Please remember that Leaders Lead, Freedom is not Free and we should take  responsibility for our actions.

May you and your family be healthy, stay safe and enjoy.

Best regards

Steven R. Gerbsman

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On this holiday season, be safe, be healthy, enjoy family and say “thank you” to a first responder.

May God bless and protect our soldiers, fire fighters, police, first responders and all who “serve and protect”.

With respect and honor

Steve Gerbsman

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Advantages of ‘Date-Certain M&A Process over Standard M&A’

Every venture capital investor hopes that all his investment will succeed. The reality is, however, that a large percentage of venture investments eventually are shut down.

In the extreme they end in bankruptcy or assignment to creditors. The majority falls into the category of the “living dead.” Such companies are not complete failures, but their prospects do not justify continued investment, yet they are rarely shut down quickly.

Once reality has been recognized, most investors engage investment bankers to sell their investment off through prevailing M&A processes. Unfortunately, seldom with good results.

REASON #1

The main reason for that sad result is a fundamental misunderstanding of buyer psychology. In general, buyers act quickly and pay the highest price only by force of competitive pressure.

Potential buyers of the highest probability are those already familiar with the company for sale, such as competitors, existing investors customers and vendors. Once a sales process starts the seller is very much a diminishing asset. Both financially and organizationally.  Unless compelled to act, potential buyers simply start to draw out the process, submit a low-ball offer when the seller runs out of cash, or try to pick up key employees and customers at no cost.

REASON #2

The second reason is usually a misunderstanding of the psychology and methods of investment bankers.

Most investment bankers do best at selling “hot” companies. Companies whose value is perceived by buyers to be increasing quickly over time, and where there are multiple bidders.

They tend to be more motivated and work harder on such cases because transaction sizes –and resulting commissions– are larger and surrounding publicity can bring in new assignments, among others. They also tend to be more effective in maximizing value in such situations by using time to their advantage, pitting buyers against each other and setting very high expectations.

In a situation where time is not your friend, the actions of standard investment banking practices often make a bad situation much worse. Such actions include assigning less experience B-Teams to smaller transaction size cases, “playing out the process” which works against the seller, and pitting multiple players against each other which can drive away potential buyers who often know far more about the seller than does the banker.

THE GERBSMAN PARTNERS ‘DATE-CERTAIN’ M&A PROCESS

The most effective solution in situations where time is not on your side is a Date-Certain Merger and Acquisition Process.

Under this proprietary process, the company’s board of directors hires a crisis management/private investment banking firm (‘advisor’) to wind down business operations in an orderly fashion and to maximize the value of their intellectual properties and tangible assets. The Advisor works closely with board and corporate management to:

  • Focus on Control, Preservation and Forecasting of CASH
  • Develop a Strategy/Action Plan and Presentation to Maximize Value of Assets.
  • Plans to include Sales Materials, Due Diligence access. a list of all possible Interested Buyers for Intellectual Properties and Assets and Identify and Retain Key Employees on a go-forward basis.
  • Stabilize and provide Leadership, Motivation and Moral to all Employees.
  • Communicate with the Board of Directors, Senior Management, Senior Lender, Creditors, Vendors and all other Stakeholders in Interest.

THE PROCESS:

The company attorney prepares a simple “As-Is/Where –Is” asset sale documents. This document is very important and includes a “No-Reps or Warrantee” Agreement, as the board, officers and invertors typically do not want any additional exposure on a deal.

The advisor then follows up systematically with ALL potentially interested parties and coordinates their interactions with company personnel, including on-site visits.

Typical terms for a Date-Certain M&A asset sale exclude representations and warranties and include a sales date –typically four to six weeks – from the point of readying sales materials for distribution, a refundable CASH deposit in the range of $200,000, a strong preference for cash consideration and with the ability to close a deal in seven business days. 

Date-Certain M&A terms can be varied to suit needs unique to given situations. For instance, the board may choose not to accept any bids, or to allow re-bids if there are multiple competitive bids, and/or allow early bids.

The typical workflow timeline from advisor hiring to transaction close and receipt of consideration is four to six weeks. Such timelines may be extended as circumstances warrant. Upon receipt of considerations, the restructuring/insolvency attorney then distributes funds to creditors and shareholders (if there is sufficient consideration to satisfy creditors), and takes all needed steps to wind down the remaining corporate shell. Typically in coordination with the CFO.

PROCESS ADVANTAGES:

Speed:   – The entire Date-Certain M&A Process can typically be concluded in 4 to 6 Weeks. Creditors and investors receive their money quickly. A negative PR impact on investors and board members related to a drawn out process is eliminated. Where required, such timelines can be reduced to as little as two to three weeks, however severely compressing the process often impacts the final value received during asset auction.

Reduced Cash Requirements:  – Owing to the Date-Certain M&A process’ compressed turn-around time, there is a significantly reduced need for any additional investor cash to support the company during the process.

Maximized Value:  – A quick and effective process during wind-down mode minimizes strain and rapid asset depreciation and thereby preserves enterprise value. The fact that an auction will occur on a certain date typically brings truly interested and qualified parties to the table. In our considerable experience, this process strongly aids in maximizing the final value received.

Cost:  – Advisory fees consist of a retainer and a performance fee, which is a percentage of the sales proceeds.

Control:  – At all time during the process, the board of directors retains complete control. For instance, it can modify the auction terms, or discontinue the auction at any point, thereby preserving all options for as long as possible.

Public Relations:  – As the entire sales process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all terms kept confidential. Accordingly investors can list the company in their portfolios as sold vs. having gone out of business.

A Clean Exit:  – Upon closing of the auction, considerations received are distributed and the advisor, under the leadership of the insolvency counsel, then takes all remaining steps to effect an orderly shut-down of the remaining corporate entity.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 102 companies in a wide and diverse spectrum of industries, ranging from technology, life science, medical device, digital marketing, consumer to cyber security, to name only a few.

Since inception in 1980, Gerbsman Partners has successfully restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations, and has been involved in over $2.3 billion of financings, restructuring and M&A transactions.

 

Gerbsman Partners has offices and strategic alliances  in San Francisco, Orange County CA, Boston, New York, Washington  DC, Mc Lean VA,  Europe and Israel.

 

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The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Tarsa Therapeutics, Inc.

Further to Gerbsman Partners sales letters of December 12, 2017 and December 6, 2017 regarding the sale of certain assets of Tarsa Therapeutics, Inc. (“Tarsa”), I am attaching updated information regarding the Assets and Intellectual Property of Tarsa including an outline of potential “Tarsa Risk Mitigation Factors” for interested parties bidding on the assets and IP of Tarsa and performing due diligence, subject to the Tarsa CDA attached (TBRIA – Calcitonin–Salmon – Delayed Release Tablets; “the Only New Antirestorptive Drug for the Treatment of Osteoporosis)

Any and all the assets of Tarsa will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Tarsa (http://tarsatherapeutics.com) to solicit interest for the acquisition of part or substantially all of Tarsa’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Tarsa Assets”).

 

Tarsa’s Potential Risk Mitigation Factors

 Clinical Regulatory

1. The TBRIANDA has completed FDA review resolving the following issues

a.  No need for a fracture study

b.  No Ad Com meeting needed for NDA approval

c.  No toxicology, safety, or cancer issues identifies

d.  No API, biopharmaceutic or stability issues remain

e.  No API related bridging issues for rsCT (TBRIA) = ssCT (Miacalcin) arose during NDA review

 

2.  The sole outstanding clinical issue remaining  from the CRL was the lack of Miacalcin Nasal Spray’s increase in Lumbar Spine Bone Mineral Density (LS BMD) being statistically superior to placebo

3.  Negotiations with FDA (Office of New Drugs) resulted in agreement on a 2-arm 48 week non-inferiority study comparing TBRIAvs Nasal Spray Calcitonin study comparing changes in LS BMD (Tar: 01-1101)

4.  Given TBRIA’s statistical superiority to Miacalcin  in increasing LS BMD in the Phase III ORACAL Study there is a high likelihood of success

5.  Tarsa’a new commercial tablet manufacturer, Quotient, will manufacture the Clinical Trial Material (TBRIA) for the agreed upon Tar: 01-1101 study thereby resolving the 483 related issue cited by FDA with Pii (original tablet manufacturer).

Commercial

  1.  Since 2009 ~ 5 million women have stopped taking bisphosphonates (BPs) due to safety concerns
  2.  FDA has also limited the duration of use for BPs to 3-5 years before taking a “drug holiday”
  3.  Tarsa has performed 5 Waves of Physician Market Research (<1200 Physicians) supporting TBRIAgarnering ~20% of prescriptions for new and existing patients.
  4.  Women who have stopped taking BPs either due to a physician recommended drug holiday or of their own volition are referred to collectively  as “lapsed patients”
  5.  The Physicians Market Research suggests that ~60% of lapsed patients will return to therapy within 2-3 years.  Physicians will prescribe TBRIAto 1/3 of these lapsed patients.
  6.  The anticipated product from Merck, Odanacatib, was terminated by Merck due to CV safety concerns.  NO new antiresorptive drugs are on the horizon
  7.  In concert these factors have contributed to TBRIA’ssales projections of ~$550 mm by year 5 with a sales force of 125-150 Reps.
  8.  The market opportunity for TBRIA has been corroborated by outside interested third parties

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to Tarsa’s Assets has been supplied by Tarsa. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Tarsa or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.Tarsa, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Tarsa’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Tarsa Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Tarsa and Gerbsman Partners. Without limiting the generality of the foregoing, Tarsa and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Tarsa Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the Tarsa Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Tarsa, Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.  

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Tarsa Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Tuesday – January 23, 2018 at 5:00pm Eastern Standard Time (the “Bid Deadline”) at Tarsa’s offices, located at 1628 JFK Blvd, # 1400, Philadelphia, PA 19103. Please also email steve@gerbsmanpartners.com with any bid. 

Bids should identify those assets being tendered for in an identifiable way. 

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000.  The deposit should be wired to an escrow agent who will be outlined in a future update.  The winning bidder will be notified within 3 business days of the Bid Deadline.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder. 

Tarsa reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

Tarsa will require the successful bidder to close within a 7 day period. Any or all of the assets of Tarsa will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Tarsa Assets shall be the sole responsibility of the successful bidder and shall be paid to Bambeco at the closing of each transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman                                                  

Gerbsman Partners                                                    

steve@gerbsmanpartners.com   

              

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

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Good afternoon –

Please see below an email from Kentfield Fire Chief Mark Pomi to the Directors of the Kentfield Fire District in Marin County . The next time you see a Firefighter, Policeman, Medics, First Responders know that they go into “Harms Way” to serve and protect.

Acknowledge them, honor them and say “thank you” to them.

Our prayers are with the fallen Cal Fire Firefighter and with our own KFD strike team in Southern California.

God Bless, Be Safe Steven Gerbsman – Director Kentfield Fire District

 

From: Executive@CALFIRE

Sent: Thursday, December 14, 2017 12:02 PM

Subject: Message From the Chief – MVU Firefighter fatality

 

I am very saddened to report that a firefighter fatality has occurred on the Thomas Incident. The incident is still unfolding, but in this world of fast moving information, it is important to me that only factual information be shared. To that end, I can confirm a fatality of a CAL FIRE Engineer from the San Diego Unit has occurred. IMT 4, CAL FIRE Local 2881 and Southern Region leadership are working to support the Unit and his family, who have been notified

More details will be made available as they are confirmed. In the meantime, please join me in keeping our fallen firefighter and his loved ones in your prayers and all the responders on the front lines in your thoughts as they continue to work under extremely challenging conditions.

Chief Ken Pimlott

CAL FIRE Director

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The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Tarsa Therapeutics, Inc.

Further to Gerbsman Partners sales letters of December 6, 2017 regarding the sale of certain assets of Tarsa Therapeutics, Inc. (“Tarsa”), I am attaching updated information regarding the Assets and Intellectual Property of Tarsa for interested parties bidding on the assets and IP of Tarsa and performing due diligence, subject to the Tarsa CDA attached (TBRIA – Calcitonin–Salmon – Delayed Release Tablets; “the Only New Antirestorptive Drug for the Treatment of Osteoporosis).

Ken, Jim, Dennis and I will be following up to review the updated Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

I will be sending out a draft Asset Purchase Agreement “APA” and “Table of Contents” for the due diligence war room next week.  Prior to the bid date of January 23, 2018, I would encourage all interested parties to have their counsel speak with William Whelan, Esq. of Mintz Levin.   Bill will be available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA.  Bill’s office number is 617 348-1869 wtwhelan@mintz.com

Any and all the assets of Tarsa will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Tarsa (http://tarsatherapeutics.com) to solicit interest for the acquisition of part or substantially all of Tarsa’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Tarsa Assets”).

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to Tarsa’s Assets has been supplied by Tarsa. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Tarsa or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Tarsa, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Tarsa’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Tarsa Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Tarsa and Gerbsman Partners. Without limiting the generality of the foregoing, Tarsa and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Tarsa Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the Tarsa Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Tarsa, Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.  

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Tarsa Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Tuesday – January 23, 2018 at 5:00pm Eastern Standard Time (the “Bid Deadline”) at Tarsa’s offices, located at 1628 JFK Blvd, # 1400, Philadelphia, PA 19103. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in an identifiable way. 

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000.  The deposit should be wired to an escrow agent who will be outlined in a future update.  The winning bidder will be notified within 3 business days of the Bid Deadline.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder. 

Tarsa reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

Tarsa will require the successful bidder to close within a 7 day period. Any or all of the assets of Tarsa will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Tarsa Assets shall be the sole responsibility of the successful bidder and shall be paid to Bambeco at the closing of each transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman                                                  

Gerbsman Partners                                                    

steve@gerbsmanpartners.com                  

 

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

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SALE OF TARSA THERAPEUTICS, INC.

 

Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Tarsa Therapeutics, Inc. (www.tarsatherapeutics.com) to solicit interest for the acquisition of all, or substantially all, the assets of Tarsa Inc.  (pls see attached Tarsa sales letter.pdf for additional detail information)

Tarsa Therapeutics, founded in 2009, is a privately held NDA-ready company focused on advancing its lead product, TBRIA to approval and commercialization.  TBRIA is a proprietary oral formulation containing recombinant salmon calcitonin (rsCT) for the treatment of postmenopausal osteoporosis.

Tarsa was funded ($78.4mm) by a syndicate of  four life sciences venture capital funds including: MVM Life Science Partners, Quaker Partners,  Novo A/S and Foresite Capital, in conjunction with Unigene Laboratories (now Enteris Biopharma), a leader in the design, delivery, manufacture and development of peptide-based therapeutics.  Tarsa Therapeutics is headquartered in Philadelphia, PA.

Tarsa has exclusive license rights from Enteris Biopharma to 12 issued US Patents covering Active Pharmaceutical Ingredient (API) manufacturing and oral peptide delivery technology supporting TBRIA.  Tarsa also has exclusive license to Global patents covering the same technologies. A patent application for a room temperature stable formulation of TBRIA if granted could extend the IP runway to August, 2037. The oral formulation patents qualify for Orange book listing preventing introduction of generic versions of TBRIA.  Tarsa also has an issued patent for a combination product consisting of oral calcitonin plus small molecules for the treatment of osteoarthritis.

IMPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an offer or a contract. The information contained in this memorandum relating to Tarsa Therapeutics Assets has been supplied by Tarsa Therapeutics.  It has not been independently investigated or verified by Gerbsman Partners or its agents. Potential purchasers should not rely on any information contained in this memorandum or provided by Tarsa Therapeutics, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Tarsa Therapeutics, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Tarsa Therapeutics or Gerbsman Partners’ negligence or otherwise.  

Any sale of the Tarsa Therapeutics Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Tarsa Therapeutics or Gerbsman Partners.  Without limiting the generality of the foregoing, Tarsa Therapeutics and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Tarsa Therapeutics Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent.  This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

Impact of Tarsa Therapeutics Products and Why Tarsa Therapeutics Assets are Attractive:TBRIA™ Tarsa’s Phase III Asset -Unique and Differentiated Therapy for Osteoporosis

 1.  TBRIA product profile highlights:

a.  Positive Phase III results demonstrated superiority to existing nasal calcitonin

b.  Product profile addresses significant unmet medical need in the market place

c. Year 5 peak US sales exceeding $550mm

2.  TBRIA will provide an antiresorptive product with a previously approved molecule and a distinct mechanism of action to address the unmet medical need arising from increasing safety issues with bisphosphonates (BPs) including:  atypical subtrochanteric fractures, risk of osteonecrosis of the jaw, & atrial fibrillation and for patients unable to tolerate BPs or SERMS

3. TBRIA™ will be the only new antiresorptive therapy on the market with no new antiresorptive therapies in development on the horizon, lack of competition lends to 50% of the OP market Rxs can be reached with only 150 reps

Significant Commercial Opportunity

Emergent AEs associated with the standard of care BPs has led > 5 million women to discontinue therapy for Osteoporosis (OP),  while initiation of therapy for newly diagnosed women has also dropped drastically

a. TBRIA has the potential to be a significant commercial product with peak US sales potential  in excess of  USD $550 million with a sales force of only 150 representatives

Majority of TBRIA sales will come from significant penetration of the “lapsed” patient population (5 million patients) that have discontinued bisphosphonate treatment

An immediate sales opportunity at market entry  in the US of ~ $100 mm exists for TBRIA to rapidly cannibalize nasal calcitonin prescriptions given TBRIA’s superior ease of administratio

b. Extensive market research (> 1200 high prescribing physicians) indicates that prescribers view TBRIA as a differentiated alternative with anticipated use in ~ 20% of new and existing treated osteoporotic patients and > 30% within the  discontinued patients population

3.  Tarsa Therapeutics Assets Intellectual Property (“IP) and Market Protectio

a.  Currently two distinct patent estates covering 12 US patents provide IP protection until 12/2029 for TBRI

b. These include global patent coverage for API manufacturing until June 2026 and  December, 2029 for the oral peptide formulation technology

c.  Patent pending for room temperature stable formulation of TBRIA may extend IP to August 2037

d.  Up to 4 formulation patents are Orange Book eligible to prevent generic entries to TBRIA

e.  The ANDA path is not viable option per FDA peptide/protein based therapeutic policy

4.  Regulatory Path Forward

a.  The TBRIA 505(b)(2) NDA received a CRL relating principally to the reference listed drug, Miacalcin Nasal Spray, demonstrating efficacy but failing to separate from placebo

b.  Tarsa has agreed with FDA that a single confirmatory de-risked, 2-arm, 48 week study comparing TBRIA with nasal spray calcitonin alone will satisfy the 505(b)(2) requirements. Initiation of the clinical study in late 2018 with positive results will result in an approved product in first half 2021.  Given the TBRIA versus Miacalcin nasal spray results from the completed Phase III ORACAL study there is a high likelihood of success.

5.  Chemistry, Manufacturing & Controls (“CMC”)

a.  API inventory valued at ~ $20 mm ($8 mm in house, $12 mm paid secured rights), sufficient to support  >$500mm in sales

b.  Larger commercial API requirements for follow on indications are addressed by rDNA process that affords greater scale and lower costs than traditional peptide chemical synthesis

c.  Tablet manufacture scaled to commercial size batch of 500,000 completed

6.  LIFE CYCLE MANAGEMENT

A higher strength version of TBRIA can provide significant upside revenue potential through expansion into other indications such as: Treatment of symptomatic osteoarthritis (>$1 billion) and pain associated with recent vertebral fracture (~$200 mm).

Key Personnel

Dave Brand President, CEO and Founder

Mr. Brand has more than three decades of pharmaceutical industry experience. Prior to Tarsa, he served as CEO and president of Cardiokine, where he led strategic and organizational development and negotiated a significant global agreement with Biogen Idec for late stage development and marketing of lixivaptan. Previously, Mr. Brand spent over 30 years at GlaxoSmithKline and its predecessor companies.  Mr. Brand held international senior management postions in marketing, acquisitions and country management.

James P. Gilligan, Ph.D. MSIB Founder & Chief Scientific Officer

Prior to joining Tarsa, Dr. Gilligan held positions of increasing responsibility for nearly 30 years at Unigene, where he led the development of the oral calcitonin product now licensed to Tarsa. He served as vice president of product development at Unigene, where he was project leader for the oral and nasal calcitonin programs, as well as the oral parathyroid hormone and site-directed bone growth programs. Dr. Gilligan was responsible for leading the clinical programs and successful U.S. and European regulatory registrations for the nasal calcitonin product Fortical® Nasal Spray and the injectable calcitonin product Forcaltonin® Injection.

Nicholas A. LaBella, Jr., MS, RPh Vice President, Global Regulatory Affairs

Mr. LaBella brings more than 30 years of hands-on experience managing biopharmaceutical R&D, clinical operations and regulatory affairs. Prior to joining Tarsa, Mr. LaBella was chief scientific officer at Insmed, where he drove a key acquisition. Previously, he was vice president, regulatory affairs and then vice president, development at Cardiokine, where he played a key role in designing and executing the development program for the company’s lead product.

George R. Maurer Vice President CMC and Supply

Mr. Maurer has more than 30 years experience in manufacturing and supply chain activities in the pharmaceutical industry. Prior to joining Tarsa, Mr. Maurer served as senior vice president of technical operations for Adolor Corporation, where he directed all manufacturing, supply and distribution activities for Adolor’s commercial product Entereg® capsules. Previously, Mr. Maurer was director of commercial manufacturing at ViroPharma, Earlier in his career

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and

intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence

Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Tarsa Therapeutics Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Tarsa Therapeutics, Inc., Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and neither Tarsa Therapeutics nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Tarsa Therapeutics Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Tuesday, January 23, 2018 at 5:00 p.m. Eastern Time (the “Bid Deadline”) at Tarsa Therapeutics’s office, located at 1628 JFK BLVD. Suite 1400 Philadelphia, PA 19103. Please also email steve@gerbsmanpartners.comwith any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. 

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where

applicable. All bids must be accompanied by a refundable deposit in the amount of $200,000 (wire transfer information will be supplied at a later date). The winning bidder will be notified within 3 business days after the Bid Deadline. Non-successful bidders will have their deposit returned to them.

Tarsa Therapeutics reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Tarsa Therapeutics will require the successful bidder to close within 7 business days. Any or all of the assets of Tarsa Therapeutics will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Tarsa Therapeutics Assets shall be the sole responsibility of the successful bidder and shall be paid to Tarsa Therapeutics at the closing of each transaction.

For additional information, please see below and/or contact:

 

Steven R. Gerbsman

steve@gerbsmanpartners.com

 

Kenneth Hardesty

ken@gerbsmanpartners.com

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