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CYTX OneMedForum Investor Talk

CYTX OneMedForum Investor Talk



View Cytor's Jan 2011 investor presentation.

View Cytor's Jan 2011 investor presentation.



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  • Cytori is medical device company that is providing surgeons and hospitals with the tools they need to practice regenerative medicine. Core product is the Celution® System We’re unique in the stem cell field because we’re focused entirely on giving patients access to stem and regenerative cells, which reside naturally in their own fat tissue Our vision is to ultimately have at least one of the systems you see pictured installed in every hospital and clinic around the globe.
  • Commercial model is based on the highly profitable razor-razorblade Increasing our installed base and driving consumable usage in the soft tissue area Building for the long-term through clinical trials to bring cardiac indications to market We’ve strengthened the balance sheet last quarter to support this growth Take away: Selling regenerative medicine products today into a large aesthetics and reconstructive market and building to tomorrow to penetrate an even larger cardiac market
  • Before we dive into the presentation, let me give you an idea of some recent highlights We continue to penetrate the market, having now placed 135 revenue generating Celution devices into the marketplace Our consumables have grown 34% year to date, and we expect the ability to significantly increase that rate to occur due to a couple of near term catalysts: First, we have recently received expanded CE mark to add reconstructive procedures to the label and are in the process to see reimbursement soon Simultaneously, we are initiating a pivotal study in Europe, ADVANCE, for heart attach approval We have seen strong support from both the business development community with a recent strategic equity agreement from the XXth largest pharma company in the world as well as a non-warrant equity markets transaction
  • Regenerative Medicine, what does it really mean when we talk about treated patients with stem cells? **Chris or Mark H. apply appropriate language***
  • While many stem cell companies talk about the future of medicine and how the anticipate treating patients, we are actually doing it. We have treated X thousand patients over the last X years, which is just the beginning.
  • As we discussed, we operate in a razor / razorblade model. The Celution system currently sells for $100K, while the consumables sell for $2500. We anticipate the sales price to ***increase to $5,000??***
  • The Celution system is originally being marketed to 2 areas of regenerative medicine: reconstructive and aesthetic. The distinction of these two areas is in the location of the procedure and the general reimbursement of the procedure.
  • In the reconstructive market, the focus is on breast reconstruction following XX. Data suggests XXX compared to XX for alternatives.
  • Sales heretofore have focused on aesthetic applications Injected tissue retains value over time, allowing cell-enriched grafts to be applied toward augmentation, facial, etc.
  • Supplementing our Celution system, we have designed and developed PureGraft. PureGraft optimizes preparation of autologous fat graft. We see PureGraft as a complement to Celution in Europe and as a stand alone product in the US. Not only does PureGraft address the $1.7 billion dermal fill market, but it acts as lead qualifier for Celution
  • Select hospitals are conducting their own independent investigator initiated studies. These studies hold the potential to expand and identify new applications for Celution. Cytori offers its Celution device, along with laboratory equipment to academic centers interested in conducting clinical and preclinical work. In North America, the system is distributed by GE Healthcare, and in Asia Pacific, it is distributed by our agreement with Green Hospital Supply.
  • The Celution device is originally being marketed to X,XXX hospitals throughout much of the world. We have just received CE mark expansion into the reconstructive market and anticipate reimbursement soon. This is expected to be a significant catalyst to the further penetration of the marketplace. To prepare, we are significantly expanding our sales footprint. We have initially brought on XX direct sales and marketing personnel, and have lined up XX distributors to address XX countries. We are also looking for additional label expansion with ongoing clinical trials.
  • Sales team will focus their efforts on calling on hospitals, due to the newly expanded indications of breast reconstruction and chronic wounds Taking the UK alone, there are 250 potential hospital customers for Celution who are already performing 1200 reconstructive surgery procedures per year, which could utilize our consumables. PureGraft, which was recently launched in Europe will be sold more through distributors. It can be used on its own or in combination with Celution. It’s an ideal entry point into the plastic surgeon’s office, with a lower price, and higher volume users will naturally become leads for upselling Celution®
  • We have seen consistent growth in revenues without any significant labeling. With the recent CE mark expansion to include reconstructive surgery, we believe there is significant near-term opportunities to increases revenues. Long-term, as we continue to place units worldwide, the ability to expand labels and approvals will increase not only the installed base, but the number of consumable used per day, or per week.

CYTX OneMedForum Investor Talk CYTX OneMedForum Investor Talk Presentation Transcript

  • Cytori, Inc. (Nasdaq: CYTX) Investor Presentation: OneMedForum January 11, 2011 Christopher J. Calhoun Chief Executive Officer
  • Safe Harbor Statement
    • This presentation may contain certain ‘forward-looking statements’. All statements, other than statements of historical fact, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.
    • The forward-looking statements included in this presentation are also subject to a number of material risks and uncertainties. We caution investors not to place undue reliance on the forward-looking statements contained in this presentation.
    • We would advise reading our annual report filed with the United States Securities and Exchange Commission on Form 10-K for a more detailed description of these risks.
  • Cytori’s Vision: Enable Regenerative Medicine
    • Medical devices for regenerative medicine
    • Real-time access to stem and regenerative cells from fatty tissue.
    • Ischemic conditions: Soft tissue repair, heart disease & others
  • Business Overview Product Revenue Growth
    • Razor/razorblade business model
    • Near-term revenue growth drivers : Approved
    • and selling products throughout U.S. and ROW
    • Long-term opportunity : Planned & ongoing trials to expand Celution labeling for cardiovascular disease
    • Financial stability
    • $60 million pro forma cash (end of Q3 2010)
    • Significant Market Opportunity
    • Cardiovascular repair: multi-billion worldwide market
    • Reconstruction/augmentation: $2B + worldwide
    • Other opportunities to expand Celution labeling
    $ Millions
  • Recent Highlights
    • Increasing installed-based of Celution® System
    • Increased 34% year-to-date
    • Expanded CE Mark (July ‘10): reconstructive & wounds
    • Reimbursement expected to accelerate sales growth
    • European post-marketing study complete results H1 ‘11
    • Initiating approval heart attack trial Q1 2011
    • Strategic equity agreement with Astellas Q4 2010
    • $10M including liver partnership right of first refusal
    • Completed $20 MM secondary offering October 2010
    Revenue Generating Units (Cumulative)
  • Regenerative Medicine Evolution Treatment Evolution Nothing Devices Drugs Transplants Regenerative Medicine Cell Therapy Introducing new cells into a tissue to treat a disease
    • Embryonic
    • Controversial
    • few patients treated
    • Expensive COGS
    • Donor only
    • Biologic dev. path
    Adult Stem Cells (Bone Marrow, Adipose Fat Tissue) Regenerative Medicine The process of creating living, functional tissues to repair or replace tissue or organ function lost due to damage, or congenital defects .
            • Cytori has ONLY medical device that allows for the extraction and re-injection of adipose tissue-derived stem and regenerative cells (ADRC)
    • Adipose
    • On Market
    • path700+ pt treated
    • Viable biz. Model
    • Donor or autologous
    • Device-based
    • Bone Marrow
    • Difficult to Access
    • Expensive COGS
    • Donor or autologous
    • Biologic dev. path
  • Cytori’s Approach Cardiovascular Breast Reconstruction Facial Rejuvenation Additional Indications (including radiation injury, urinary incontinence, wound repair) Process Applications Adipose: rich source for stem and regenerative cells Cells available for re-injection in same surgical procedure Adipose tissue processed at point-of-care
  • Commercial Business Providing Solutions for the “ Future” of Medicine “Today”
  • Celution® System Sale of system: $100,000 – 220,000 Recurring revenue: $2,500* per-case cartridge * ASP for medical procedures expected to be $5,000 +
  • Celution® Cell-Enriched Fat Graft $43 $76 Clinical Partner $73 $126 Clinical Partner $128 $163 Clinical Partner Cells Fat ‘ Cell-Enriched Graft’
    • European approval July 2010
    • Hospital-based procedure and call point
    • Seeking reimbursement
    • Last-Patient / Last Visit Nov 2010
    • Complete results H1 2011
    • Post-marketing RESTORE-2 study
    • 82% physician satisfaction
    • 73% patient satisfaction
    • Improvement in scar, pigmentation, symmetry and defect index:
    • + 2.8 to 3.9 in patient assessment (0-5 scale)
    • + 3.1 to 4.1 in physician assessment (0-5 scale)
    Soft Tissue Application: Reconstruction Celution® Cell-Enriched Fat Graft
  • Initial product introduction early 2008 in Europe and Asia Pacific Soft Tissue Application: Aesthetic Celution® Cell-Enriched Fat Graft
  • Supplemental Product Line: PureGraft™: Natural Filler Application
    • Optimizes preparation of autologous fat graft
    • Worldwide approval
    • Complements Celution® in Europe
    • Optimizes prep of fat graft
    • Celution® lead qualifier
    • Stand-alone product in US
    • Convert users to Celution® upon U.S. clearance
    • Point-of-Entry: Building out US sales team (6 direct reps)
    • Addresses $1.7 billion dermal fill market;
    • 46K annual fat- grafting procedures in U.S. and growing
  • Supplemental Product Line: StemSource Cell & Tissue Bank
    • Complements plastic surgery practices
    • Liposuction customer candidates
    • Captures patient retention
    • Revenue source
    • Worldwide product offering
    • System
    • Cryopreservation chamber tools
    • Proprietary protocol, software, database
    • Distribution network
    • GE Healthcare: EU, North America
    • Green Hospital Supply (Japan, Thailand, Taiwan, Korea)
    • Current banking customers in Europe, Japan and U.S.
  • Near-Term Growth Driver: Soft Tissue Repair
    • Celution product sales: CE Mark designation
    • Access to 2/3 worldwide market
    • Cosmetic surgery clinics
    • Hospitals for breast cancer reconstruction
    • July 2010: Expanded CE Mark for reconstructive surgery
    • RESTORE-2 final results expected H1 2011
    • Intended to support reimbursement efforts
    • Expanding sales force footprint
    • 16 direct sales and marketing worldwide
    • Distributors covering select countries in EU and AP
    Celution Consumable Shipments (cumulative)
  • Soft Tissue: International Launch & Expansion
      • Celution® System:
        • Sales team to focus on hospitals
        • Emphasis: breast reconstruction
        • Focus geographies: UK, Italy, & Germany
        • GE Healthcare complements direct sales
        • RESTORE 2 post-marketing study
        • Reimbursement
      • PureGraft™
      • Complements Celution® customer’s procedures
      • Rely on distributors
      • Incentivize distributors to generate Celution® leads
    Potential System & Consumable Market in the 27 CE Mark Countries Total Hospitals 2,000 Total Breast Recon Procedures/Year *Backlog: 2 MM + patients
  • Revenue Growth $ Millions
  • Celution ® Applications under Development
  • Long-Term Opportunity: Cardiovascular
    • Completed Celution® safety and feasibility studies
    • Acute myocardial infarction (Heart Attack)
    • Chronic myocardial ischemia (severe form of CHF)
    • Design & Outcomes
    • Multi-center, double-blind, placebo-controlled
    • Demonstrated safety of injection of Celution-derived stem and reg. cells
    • Strong and consistent efficacy signals in acute and chronic heart disease
    • Improved endpoints are key prognosticators of long-term outcomes
  • Acute Myocardial Infarction (AMI) (APOLLO Trial – pilot study)
    • Meaningful reduction in infarct size
    • Entire cohort of patients
      • 32% to 15% in treated group
      • No change in untreated group
    • Matched pair
      • 5.1% greater reduction in treated
    • 5.7% improvement in LVEF (SPECT)
    • 3.5 x greater perfusion improvement
  • Cardiovascular: Next Steps
    • Initiate pivotal AMI Study in Europe (ADVANCE)
    • Approx. 350 patients
    • Three arms: 20 MM cells, 30 MM cells, & placebo
    • Up to 35 centers
    • Utilize Celution® One
    • To begin Q1 2011
    • Add other vascular indications:
    • Chronic Heart Disease
    • Peripheral Vascular Disease
    • Others
  • Chronic Heart Disease (CHD) (PRECISE Trial – pilot study)
    • MVO 2 :significant change at 18 months
    • MVO 2 correlates to improved survival
    • MVO 2 ≤ 14 = 47%1 yr survival rate
    • METS: significant change at 18 months
    • Infarct size: 8.2% change at 6 months
    • Celution® procedure safe and feasible through18-months
    • Lower cardiac mortality rate:
    • At avg. follow up of 28 months:
    • - 2/6 placebo pts died of cardiac causes
    • - 1/21 treated pts died of cardiac causes
  • Strong R&D Pipeline
    • Initiate pivotal AMI Study in Europe (ADVANCE)
    • Investigator-sponsored trials
      • SUI
      • Liver
      • Renal
      • Malignant wounds
      • Cardiomyopathy
      • Vocal cord paralysis
      • HIV therapy-induced soft tissue atrophy
      • Others
    • Celution® One: Next-generation product
      • Available for ADVANCE heart attack trial
      • Manufacturing expertise
      • Service infrastructure
      • Committed Partner: invested $55+mm
  • Balance Sheet Highlights
    • Cash: $60 million pro forma (less Q4 2010 burn)
      • Cash (9/30/10): $30.7 M
      • Equity Raise (Oct. 10): $19.3 M
      • Strategic Equity (Dec. 10): $10 M investment from Astellas Pharma
    • Long-term Debt: $20 million (GE/SVB/Oxford term loan)
    • Shares Outstanding: 52 million as adjusted
  • Key Takeaways
    • Providing solutions for the “Future” of medicine “Today”
    • Near-term system and consumable revenue growth driven by soft tissue
    • Recent approvals, expanded indications, and pursuing reimbursement
    • Enormous opportunity in ischemic conditions
    • Strong partners/investors: GE Healthcare, Olympus, Green Hospital, Astellas
    • Strong balance sheet
  • Upcoming Milestones
    • Growth in commercial reconstructive and aesthetics business
    • Increase installed base / consumable usage & orders
    • Sales force shift toward hospitals with recon indications
    • RESTORE 2 data to support European/AP sales
    • Pursue reimbursement
    • Distributor model in EU for PureGraft
    • Up-sell Celution to high volume PureGraft users
    • Development Pipeline
    • Initiate ADVANCE
    • Seek no-option chronic ischemia approval
    • Report 18-Mo APOLLO data
    • US clinical and regulatory progress
    • Corporate
    • Continue partnering discussions
  • Thank You Investor Presentation: OneMedForum January 11, 2011 Christopher J. Calhoun Chief Executive Officer