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Science of Stem Cells and Potential Applications

Andrea HuntFebruary 22, 2008

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Baxter International Inc.

At Baxter, one of our primary goals is to save and sustain lives worldwide.Every day, our products and services help treat thousands of people around the world with some of the most complex conditions — from hemophilia to cancer and immune disorders to kidney disease.

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Company Snapshot

More than 75 years of market leadership driven by a well-recognized global brand

$10.4 billion global market leader

Over 50% of sales outside the United States

Approximately 70% of sales from products with leading market positions

More than $1.5 million invested in R&D every day

More than 3000 R&D employees

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We are a global, diversified healthcare

company applying innovative science to

develop specialty therapeutics and

medical products that save and sustain

patients’ lives.

Baxter’s Mission

Our Missio

n

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Baxter’s Business Portfolio

• Hemodialysis Products/Services

• Peritoneal Dialysis Products/Services

• Pharmaceuticals

MedicationMedicationDeliveryDelivery BioScienceBioScienceRenalRenal

• Premixed liquid and frozen drugs

• Infusion Systems• Anesthesia• Nutritional Products

• Therapeutic Proteins– Recombinant– Plasma Based

• Vaccines• Regenerative Medicine - Cellular Therapies - BioSurgery

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Baxter’s Business Portfolio

• Hemodialysis Products/Services

• Peritoneal Dialysis Products/Services

• Pharmaceuticals

MedicationMedicationDeliveryDelivery BioScienceBioScienceRenalRenal

• Premixed liquid and frozen drugs

• Infusion Systems• Anesthesia• Nutritional Products• Isolex Business

• Therapeutic Proteins– Recombinant– Plasma Based

• Vaccines• Regenerative Medicine - Cellular Therapies - BioSurgery

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BioSurgery Product Portfolio

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Secondary cell Secondary cell processingprocessing

Cell storageCell storage

Cell Cell isolationisolation

Cell expansion/Cell expansion/cultureculture

ISOLEXMagnetic Cell

Selector LIFECELLCulture Bags

CYTOMATECell Washer CRYOCYTE

Freezing Containers

Cellular Therapies’ Product Portfolio:Used in many cell processing steps

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Definition of Regenerative Medicine for Baxter

OtherRegenerative

Medicine

“Regenerative Medicine”The regeneration of damaged cells, tissues or organs through the use of cells, scaffolds and/or biomolecules via tissue engineering

Cells Scaffolds

Bioactive Agents

Cells Scaffolds

Bioactive Agents

approaches

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Regenerative Medicine offers a new era in medicine …

Minimally invasive surgery

Invasive Surgery

RegenerativeMedicine

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Isolex: selection

CD 34 + Stem Cell

Differentiation and/or stimulation

Blood Vessel

Heart Muscle

Blood Stream

Current Baxter CD34+ Phase II Stem Cell TrialPotential to reverse the effects of heart disease

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Bone Programs: Fibrin Plus (PTH)Indication Current Status

Bone cysts

Long bone fractures

Vertebral augmentation

Mixing device

Mixing device

Application devicePrototype

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Tissue engineered autologous bladder

Current Regenerative Medicine Application in Development

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A. 1 – 5 years

B. 5 - 10 years

C. 10 -15 years

D. 15+ years

How long does it take for an idea to turninto a therapy for a patient?

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Typically where Baxterinitially gets involved

Most Drugs and Stem Cell Therapies will take 10-15 years to develop

Product Launch

Basic Research

1 – 20+ Years

Pre-Clinical Research

1 – 3+ Years

Clinical Research

5 – 15+ Years

There must also be a market for your therapy

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Now let’s add in chance of success

A typical drug costs $800 Million to develop

1 out of 1000+

Basic Research

Pre-Clinical Research

Clinical Research

Product Launch

1 – 20+ Years 1 – 3+ Years 5 – 15+ YearsTim

eSu

cces

sRa

te 1 out of 100+ 1 out of 10

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Why does it take so long and cost so much?

Initial research focused on finding compounds that have the potential to work

Animal research is then conducted Clinical research is conducted in sequential stages

- Phase 1- Phase 2- Phase 3

Product is then launched into the marketplace

Demonstration of Safety and Efficacy

Regulatory agencies are involved – FDA in US, EMEA in Europe and PMDA in Japan

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What is the unmet medical need?- target patient population

What is the scientific rationale that suggests a stem cell therapy will meet this need?- pre-clinical and clinical data

What is the viable business model?

A Business Model must also be createdfrom the start of development

A viable business model must be in place for a company to pursue development

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Business Model Elements

Freedom to Operate Financials - Funding - Operations Partnerships Product Portfolio Manufacturing Clinical Plan

Pricing Reimbursement Strategic Plan Geographic Scope Marketing Plan Competitive Environment Distribution

Many skillsets are required to form this plan, a science background is always beneficial.

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Business Model Viability Critical to Product Launch

It takes good science, time, dollarsand luck to launch!

1 out of 1000+

Basic Research

Pre-Clinical Research

Clinical Research

Product Launch

1 – 20+ Years 1 – 3+ Years 5 – 15+ YearsTim

eTe

chni

cal

Succ

ess

Rate 1 out of 1000+ 1 out of 10

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Summary

Regenerative Medicine/Stem Cell Therapies could be next wave in medicine

Novel scientific breakthroughs will be achieved over the next decade and beyond

Adult stem cell therapies look promising and are the closest to being approved

Exciting new therapies are in the pipeline that will ultimately benefit patients

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Saving and Sustaining Lives Worldwide

Thank you