Strategic Overview

Ambition

The ambition of the Company is to become, in a 3 to 5 year horizon, the world leader in genomic engineering and the world reference for the reprogramming of living organisms which is, according to the Company, the new biotechnology frontier.

Business Model

Since its foundation, the Company had generated income from the sale of sub-licences for the Institute Pasteur's patents and patent applications without any additional value. The Company pays back 40% of its income to the Institute Pasteur. (between 2000-2005).

Henceforth, the Company intends to place the emphasis upon the marketing of products based primarily on the technology that it itself has perfected and protected. The Company will repay 3% of the income it will generate in this area to the Institut Pasteur. These products have the potential, in the long-term, to comprise most of the Company's turnover.

In the short and medium-term the Company has chosen to concentrate in three fields of strong commercial potential:

• the production of proteins for therapeutic purposes;
• the improvement of seed characteristics ; and
• the development of treatments against single-gene disorders (myopathies, sickle-cell anaemia, etc.) and against the infections by DNA viruses (herpes, viral hepatitis, HIV, etc.).

At the same time, the Company actively diffuses its technology as a research tool notably to the top academic laboratories, in order for it to become a technological standard.

The income profile acquired by the sale of MRSs is identical to that traditionally seen in the biotechnology industry:

• the upfront payment of a licence at a fixed price for access to the technology;
• payments in respect of reaching technological and/or procedural milestones;
• payment of fixed annual fees for maintaining intellectual property rights; and
• payment of royalties in respect of sales of finished products.

To achieve this strategic objective, the Company concentrates on its core activity, the design and manufacture of MRSs. This focus should allow the Company, not only to maintain, but also to increase its technologic lead over potential competitors. The products manufactured by the Company are and will be sold to industrial clients, who will be using them in the three principal fields that the Company has chosen to target (bioproduction, agronomy, and biotherapeutics). The ambition of the Company is to go from an annual production capacity of 8 to approximately 20 MRSs per year, which will allow it to draw significant revenues by the payment of lump sums at the signing of contracts as well as when its clients shall overcome regulatory or technical landmarks.

The fees and royalty charges vary according to the target market, to the types of application selected and to the degree of exclusivity granted to the client (custom-made products) or (off-the-shelf products).

Custom-made products are of interest in the short-term as they will help to quickly generate income to finance the production of MRSs. However, the Company intends to increase the proportion of MRSs it produces against targets it has chosen itself in a bid to maximise income in the medium- to long-term.

In the field of biomedicin production, the Company has a product which may be used by different players in their respective production lines. It involves an MRS which targets a unique site in the genome of the most commonly used cell line in the production of biomedication - Chinese hamster ovary (CHO) cells. The MRS allows the Company's clients to insert a gene encoding a therapeutic protein that they wish to express into this site, and only this site, as it has properties that allow reproducible and stable expression which are important for these applications. Its use represents a significant saving in terms of time and cost in implementing the production process of a biomedicin. It involves an off-the-shelf product which the Company hopes to market to numerous clients on a non-exclusive basis.

Short Term Objectivs

In 2007, the Company has the following objectives:

• to sign five to seven new commercial contracts, principally in the fields of bioproduction and agronomics and to deliver one to three MRSs;
• to deliver an MRS for therapeutic purposes to an academic partner; and
• to obtain preliminary results of DNA repair in patients' cells.

In 2008, the Company has for objective the signing of a first contract in the field of biotherapeutics and aims to have one or two publications on preliminary results of DNA repair of patients' cells.

By 2010, the Company estimates that a total of forty MRSs will be actively used by its clients and partners.

Beyond this mid-term horizon, the Company shall examine the opportunity of its integration in the value chain by the means of targeted acquisitions (products, licences, and companies).