Intralink spine for web

the NEXT Treatment

for Low Back Pain

September 2013

DDD & Low Back Pain: In US, more people seeing clinician for back pain than all forms of cancer and heart disease combined!!

9.4% of US population (diabetes 5.9%, heart disease 8.1%, cancer 0.5%)

More than 15 million/year in US receiving treatment

Most costly ailment for working age adults, $100B+/yr. in US

20X more patients receiving treatment from a clinician than having surgery

Suggests effective injectable treatment would blow up the spine markets

Presenter

Presentation Notes

You may already be familiar with the immensity of the problem that degenerative disc disease and low back pain present to our society. To get our arms around the problem, consider that if we combine every person with any form of cancer, plus every person with any form of heart disease, both diagnosed and undetected, there are more people seeing a clinician every year for back pain. Particularly relevant for an injectable treatment such as ours that can address not only the pain but also the core problems that contribute to degenerative disc disease, this revolutionary treatment doesn’t just potentially cut into the $4 billion/year spinal device market, but it would also capture a portion of the other 19 out of 20 people who are seeing a clinician for back pain.

• Injectable Collagen Crosslinking • Immediate effect • Permanent covalent bonds • Low cost – high profit margin

NEXTTM

NEXT - Nonsurgical EXogenous Crosslink Therapy

genipin

Presenter

Presentation Notes

In a nut shell our novel technology, NEXT, involves injecting a non-toxic reagent that immediately strengthens and stabilizes hard-to-treat load-supporting tissues. NEXT stands for Nonsurgical EXogenous crosslink Therapy. It augments the crosslinking of the native collagenous matrix. Crosslinks accomplish in the tissue matrix what their name suggests. Crosslinks are chemical bonds, cross-ties or chemical rivets that provide mechanical stability to these tissues. This treatment produces an immediate effect, we’re talking about hours and days rather than weeks and months. These bonds are essentially permanent, and this treatment is so low cost that it can dramatically reduce the cost for back pain treatment while maintaining a high profit margin.

Crosslinking Effect on Tendon

Crosslinks engage all fibrils at low loads, with no loss of flexibility

Presenter

Presentation Notes

With apologies for the phallic nature of these images, this slide provides a visual sense of the effect of the crosslink augmentation on the mechanical properties of a tissue. In this case the tissue is a horse tendon, from a study conducted by a sister spin-off company, Equinext. Here you can see that the treatment engages all of the sub-fibrils and enables the tendon to support its own weight in a cantilever setup, while not losing any flexibility or elasticity. Now spinal disc tissue is quite a bit more complex than tendon tissue, and the effects of crosslink augmentation on the disc are multi-faceted.

Summary of Experimental Results: NEXT…

Increases retention of GAGs/ hydration (>40%) Increases nutritional flow/ permeability (100%) Improves mechanical properties/ durability (>25%) Reduces disc bulge (>25%) Reduces joint instability (4-fold) Increases tear resistance (50%) Provides adhesion of adjacent tissues (3X) Exhibits minimal toxicity (sub-cu/neurotox/8-studies) A good adjunct: Restabilizes post-discectomy Fast-acting / Long-lasting Inexpensive (85% reduction in costs)

Underlying

Factors Pain Generators

Other

Criteria

Presenter

Presentation Notes

This slide summarizes 15 years of laboratory and animal research results. The first category of results pertains to the factors that are known to contribute to DDD in the first place: the retention of water imbibing molecules in the disc, the nutritional flow through the essentially avascular disc, and the many mechanical attributes that degrade in DDD. In all of these factors, NEXT doesn’t just have a positive effect, but across the board has a substantial effect. The next category includes those factors known to be related to clinical pain: the amount the disc bulges under load leading to compression of adjacent neural structures, joint instability that allows excess tissue strains that affect imbedded afferent nerve fibers, and the resistance of the tissue to tearing, preventing the natural progression of the disease from a disc bulge to a herniation, fissures and tears also are known to enable the release of pro-inflammatory cytokines thought to contribute to clinical pain. In addition, our testing has shown that our reagent is non-toxic, and an excellent adjunct to the most common spinal surgery, discectomies, a surgery that is highly successful with regard to near term pain relief, but because functional tissue is removed to decompress neural tissues, this surgery often leads to reherniations, accelerated degeneration and reoccurrence of pain.

References

Follow-On Work By Others Yerramalli CS, Chou AI, Miller GJ, Nicoll SB, Chin KR, Elliott DM, The effect of nucleus pulposus crosslinking and glycosaminoglycan degradation on disc mechanical function. Biomech.Model.Mechanobiol, 2007;6:13-20.

Barbir A, Michalek AJ, Abbott RD, Iatridis JC., Effects of enzymatic digestion on compressive properties of rat intervertebral discs, J Biomech. 2010 Apr 19;43(6):1067-73

Chuang SY, Lin LC, Tsai YC, Wang JL., Exogenous crosslinking recovers the functional integrity of intervertebral disc secondary to a stab injury., J Biomed Mater Res A. 2010 Jan;92(1):297-302.

Fessel G, Wernli J, Li Y, Gerber C, Snedeker JG., Exogenous collagen cross-linking recovers tendon functional integrity in an experimental model of partial tear, J Orthop Res. 2011 Nov 18. doi: 10.1002/jor.22014. [Epub ahead of print]

Fessel G, Gerber C, Snedeker JG., Potential of collagen cross-linking therapies to mediate tendon mechanical properties, J Shoulder Elbow Surg. 2012 Feb;21(2):209-17

Some of Our 28 Peer-Reviewed Publications Hedman, T, Saito, H., Vo, C. and Chuang, S-Y, Exogenous Crosslinking Increases the Stability of Spinal Motion Segments, Spine 31(15):E480-485, 2006. Chuang, S-Y, Odono, R.M., Hedman, T.P., Effects of Exogenous Crosslinking on In Vitro Tensile and Compressive Moduli of Lumbar Intervertebral Discs , Clinical Biomechanics, 22(1):14-20, 2007. Chuang, S-Y, Popovich, JM, Lin, L-C, Wang, S-J, Hedman, T, The Effects of Exogenous Crosslinking on Hydration and Fluid Flow in the Intervertebral Disc Subjected to Compressive Creep Loading and Unloading Spine, Spine, 35(24):E1362-6, 2010. Chuang, S-Y, Lin, L-C, Hedman, T.P., The Influence of Exogenous Crosslinking and Compressive Creep Loading on Intradiscal Pressure, Biomech Model Mechanobiol. 9(5):533-538, 2010. Slusarewicz, P, Zhu, K, Hedman, T, Kinetic Characterization and Comparison of Various Protein Crosslinking Reagents Suitable for Tissue Engineering, J Mater Sci Mater Med., 21(4):1175-81, 2010. Slusarewicz, P., Zhu, K. and Hedman, T., Studies on the degradation of genipin in aqueous solution, Natural Products Communications, 5(12):1853-8, 2010. Slusarewicz, P., Zhu, K., Kirking, B., Toungate, J., Hedman, T., Optimization of Protein Crosslinking Formulations for the Treatment of Degenerative Disc Disease, Spine, 36(1):E7-13, 2011. Zhu, K, Slusarewicz, P, Hedman, T, Thermal Analysis Reveals Differential Effects of Various Crosslinkers on Bovine Annulus Fibrosis, J Orthop Res., 29(1):8-13, 2011. Popovich, J.M., Yau, D, Chuang, S-Y, Hedman, T., Exogenous Collagen Crosslinking of the Intervertebral Disc Restores Joint Stability following Lumbar Posterior Decompression Surgery, Spine, 36(12):1-6, 2011 .

When is it the right time to use NEXT? Normal Aging,

Disc Degeneration / Dehydration

Annulus Overload / Nutritional Deficiency

Bulges / Fissures / Cracks /

Mechanical Insufficiency

Disc Collapse / Herniations

Nerve Root Compression /

Facet Joint Pain

*Weber ‘94

Presenter

Presentation Notes

From our preclinical testing, it is predictable that NEXT will revolutionize treatment of low back pain as a primary stand-alone treatment for early stage disease. However due to NEXT’s ability to create a better, flexible stabilization than fusion, plus its suitability as an adjunct to surgery, we believe it will compete with existing and emerging treatments for later stage disease as well.

The ‘Injectable’ Competition: Can Biologic Treatments Work in the Intervertebral Disc? x Harsh, nutritionally deficient

environment of the disc led to DDD in the first place

x “Degenerative discs are not able to support the added nutrient demands from increase in cellular activity or cell number…” – Jill Urban, PhD

x Biological treatments offer no near-term effect, not appropriate as a stand-alone treatment

Vertebral Body (well vascularized)

Intervertebral Disc (largely avascular)

Presenter

Presentation Notes

Is there any emerging, injectable solutions? Yes, and virtually all of these fall under the umbrella of “biologics”. However, a strong case can be made that these treatments, from PRP, to growth factors, to inflammation inhibiting cytokines to stem cells, are relying on a harsh/uncooperative biological environment, with insufficient nutritional support that led to DDD in the first place. So these treatments are unlikely to be sustainable in a degraded disc. Yet even if these treatments were able to be sustained in a symptomatic, degenerative disc, they offer no near term effect and would require weeks and months to achieve their repair of the tissue.

NEXT Is the Perfect Adjunct to Cell-Based Therapies

Provides immediate joint stability and resistance to mechanical degradation

Crosslinking increases nutrient permeability for long-term treatment viability

Presenter

Presentation Notes

So for these reasons we believe NEXT will out-compete the other emerging injectables, and it happens to be the perfect adjunct to biologic strategies, providing immediate joint support while increasing the nutrient flow to the disc for long term treatment viability.

Patent Portfolio

• 10 US and 6 international patents issued or in condition for allowance

• Additional 20+ US and international patents pending

Patent # Principal Claims US 10/230,671 Found in condition for allowance

Mechanical degradation, disc, articular cartilage, load supporting collagenous tissue

7,435,722 Scoliosis and permeability, knee meniscus and articular cartilage

8,153,600 General deformity: kyphosis, listhesis, post-surgical; listed reagents; for increasing effectiveness of cell or cytokine treatments

8,022,101 Knee meniscus tear resistance; concentrations GP, PA, EDC, LO, TG, non-enzymatics

8,119,599 Tear resistance, prevention of expulsion of nucleus or nucleus implant; disc and knee meniscus, reagent concentrations

8,198,248 Formulation & composition of matter claims;

8,211,938 Treatment of annulus fibrosus against expulsion or extrusion of implanted device or material

8,283,322 Improved formulation and composition of matter claims 8,450,276 Increasing biological viability for regeneration of spinal

discs 12/966,812 Found in condition for allowance

Divisional: Mechanical degradation, disc, articular cartilage, load supporting collagenous tissue

Foreign Australia 2002335683 Mechanical degradation, disc, articular cartilage, load

supporting collagenous tissue

Canada 2,458,821 Mechanical degradation, disc, articular cartilage, load supporting collagenous tissue

Australia 2004268628 Spinal disc, scoliosis, permeability, knee meniscus, articular cartilage

Japan 2006-524909 Spinal disc, scoliosis, permeability, knee meniscus, articular cartilage

Canada 2,536,415 Crosslinking reagent for treating intervertebral disc disorders

Korea Spinal disc, scoliosis, permeability, knee meniscus, articular cartilage

Presenter

Presentation Notes

We have all the patents in this space with 8 issued US patents, 2 in condition for allowance and 6 international patents. These numbers are growing every year.

Clinical Trial Plan

Pilot Safety FIHs

Center/Local Champion: Malaysia-Harwant Singh,

MD, PhD; Toronto, Canada – Medical Devices

Special Access Programme

6-month, 8-10 discogenic LBP pts., safety &

preliminary efficacy; start: funding+3 mo.

CE Marking Study

Centers/Champions: Korea – Wooridul Hospital – Sang-Ho Lee, MD, PhD; Beijing – ISOI – Hansen

Yuan, MD

6-month, 40 LBP pts., literature/historical

controls, safety/efficacy; start: funding+10 mo.

IDE Trial to Support US PMA Filing

Prospective Multicenter Study, Clinical Research

Centers and PIs TBD

Estimated enrollment: 100-200 pts., 1 yr f/u,

randomized conservative standard-of-care control arm: start: CE Mark+1 yr.

Financial Projections

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2015 2016 2017 2018 2019 2020 2021 2022

$Mill

ion

USD

Revenue

EBITDA

Reflects Internal Funding of US Clinical Trials

Foreign Sales Initiated

Presenter

Presentation Notes

Let me just point out a few things on this graph. First of all the ridiculously large revenue projections on the right side of the graph reflect the reality that this treatment would not just contend for a portion of the $4 billion/year spinal device market but would likely dominate as a treatment for the other 19 out of 20 people seeing a clinician for back pain. You will also see that foreign sales are projected to begin in 2015 and that we have a plan to self-fund our US clinical trials from revenues created overseas in years 2016 to 2018.

Exit Strategy #1: Early acquisition by spinal device company $600k for 6 mo. FIM clinical trial + License fee, 300-650% ROI within 18 mo.

• Malaysian clinical site – Harwant Singh, MD, PhD, Hansen Yuan, MD, Kevin Pauza, MD, Todd Abruzzo, MD, John M Racadio, MD – spine surgeons & interventionalists

• Elsa Abruzzo, CQE, CQA, RAC, FRAPS, President/CEO ARAC, LLC, Clinical/Regulatory VP • LMH Biotech, Sdn., Bhd., Malaysian Clinical Trials CRO/Partner

Exit Strategy #2: Acquisition after US market entry or IPO* $6 million total investment, FIMs + clinicals for CE marking

• High profit margin allows for internal funding of US trials from EU/Asia sales • Disruptive potential provides incentive to avoid early exit

Contact Tom Hedman for more information: [email protected]

Funding required: $600k or $6million

Available upon request

Available upon request

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