Cnso

1
Confidential Investor Summary
2014
CNS Response
Personalized Medicine for Mental Health
2014
There are over 100 medications available for the treatment of behavioral disorders. The core problem is not
that we need three more, the problem is that we need to know how to use the 100 we have.
— Steve Suffin, M.D. Chief of Clinical Pathology, Quest Diagnostics. Founder, CNS Response.

2
2014
This presentation contains “forward-looking statements” that include information relating to future events, future
financial performance, strategies, expectations, competitive environment, regulation and availability of resources.
These forward-looking statements include, without limitation, statements regarding: proposed new products or
services; our statements concerning litigation or other matters; statements concerning projections, predictions,
expectations, estimates or forecasts for our business, financial and operating results and future economic
performance; statements of management’s goals and objectives; trends affecting our financial condition, results of
operations or future prospects; our financing plans or growth strategies; and other similar expressions concerning
matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,”
“potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes” and “estimates,” and
similar expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved.
Forward-looking statements are based on information available at the time they are made and/or management’s
good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could
cause actual performance or results to differ materially from those expressed in or suggested by the forward-
looking statements. Factors that could cause these differences are described in our prospectus, and readers are
urged to review those factors.
Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any
forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual
results, changes in assumptions or changes in other factors affecting forward-looking information, except to the
extent required by applicable securities laws. If we do update one or more forward-looking statements, no
inference should be drawn that we will make additional updates with respect to those or other forward-looking
statements.

3
2014
Offering Summary
Issuer CNS Response, Inc.
Symbol / Exchange CNSO/OTCBB
Transaction PIPE
Transaction Size $20.0 million
Market Cap $65.4 million
Placement Agent Stifel

4
2014
• CNS Response is personalizing the treatment of brain disorders.
o Combines new tech (AI, cloud-based, crowd-sourced analytics) and a mature
technology (EEG) to match medications to a patient’s unique neurophysiology
• Objective test allows for physiology to guide prescription versus current treatment
paradigm of “trial and error”
• Well-validated with over 12,000 tests done to date
• $20bn + market opportunity in CNS treatment decision support
o 2-3x improved efficacy
o Reduction in suicidality
o Treatment efficiencies
• Large market opportunities in military, VA and direct-to-consumer settings
• Near-term milestones with data from military-sponsored study in Q2:14
• Attractive to payers: significant cost savings as medication failures are avoided
Investment Highlights

5
2014
Management Team and Board
EXECUTIVE MANAGEMENT
George Carpenter IV,
President & CEO
Former President & CEO of. WorkWell Systems and Core,
Inc. and a VP of Operations with Baxter Healthcare
Paul Buck
Chief Financial Officer & Secretary
Former Audit and Consulting Manager with Deloitte &
Touche. Worked as a Financial Consultant and was CFO
of ARC Blood Services, So Cal Region.
R. Stewart Navarre
VP, Government Accounts
Col (Ret) US Marine Corps was Chief of Staff for all
Marine bases in the West and was CO of the 5th Marine
Regiment based at Camp Pendleton
Brian MacDonald
Chief Technology Officer
Chemical Engineer, Wharton MBA, Consultant with
Deloitte & Touche and KPMG. One of the originators of the
PEER Online System
BOARD OF DIRECTORS
Thomas Tierney (Chairman)
Owns and operates Vitatech Nutritional Sciences, Inc. has worked
at the Rand Corporation, is a Trustee of UCI and is active with the
Wounded Warrior Project
John Pappajohn
Is sole owner of Pappajohn Capital Resources and Equity
Dynamics, Inc.. He has served on the boards of multiple public
companies and is currently the Chairman of Cancer Genetics, Inc.
Zachary McAdoo
Is a CFA and President of McAdoo Capital and investment
manager of the Zanett Opportunity Fund
Walter Schindler
Is the managing partner of SAIL Capital Partners. Was a former
office managing partner at Gibson Dunn & Crutcher
Richard Turner, Ph.D.
Was CEO and Chairman of ConMed Healthcare Management and
has served as CEO and board member to multiple public companies
Robert Follman
President and CEO of R.A. Industries a manufacturer of complex
components used in the aerospace and petroleum industries
Andrew Sassine
A former portfolio manager at Fidelity Investments

6
2014
CNS Market Overview
2014
Tailoring medicine, so that the right therapeutic is delivered to the right person, is likely
to be one of the most important themes in health care.
Margaret Hamburg MD, FDA Commissioner

7
2014
• Mental health is one of our biggest unsolved healthcare problems
o Mental disorders affect 25% of adults in U.S. (~62mm Americans)(1)
o 16.5% of adults in the U.S. will suffer from a Major Depressive Disorder in their lifetime(2)
o 17+ million Americans have failed 2+ medications and are considered “treatment-resistant”
o Only 12.7% of mental health patients get minimally adequate care per HHS
o 50% of people don’t seek treatment because of stigma, cost and lack of efficacy
o 60% who do seek treatment drop out.
• The incidence of mental disorders in the military is much higher: 40 – 60%
o The rate of major depression is 5x as high among soldiers as civilians(3)
o The rate of intermittent explosive disorder is 6x as high(3)
o The rate of PTSD is 15x as high(3)
• Suicide rates have risen to epidemic proportions
o Suicide is now the tenth leading cause of death in the U.S. and more than 90% of those who die by
suicide had one or more mental disorders(4)
o In 2012, there were more military deaths by suicide than in combat(5)
o Every day, 22 veterans take their own lives, or one suicide every 65 minutes(6)
CNS Market Overview

8
2014
Evolution of Breakthrough Treatment of Mental Health
Ancient
Times
• Mental illness viewed on evidence of demonic
possession or religious punishment and
treated with trepanation
1949 • Australian psychiatrist John Cade introduces the
use of lithium to treat psychosis
400 B.C.
• Hippocrates pioneers administering certain
substances and medications
1950s • Anti-Psychotic drug development (e.g. Thorazine)
drives de-institutionalization movement and growth
of outpatient treatment
• Institutionalized mentally ill patient population
peaks at 560,000 in U.S. moves down to 130,000
by 1980
Middle Ages
• First asylum established as early as 8th
century
1800’s
• Advent of the institutionalization inpatient care
model in the U.S.
1986 • National Alliance for Research on Schizophrenia
and Depression (NARSAD) is formed
Early 1900’s
• Primary treatment of mental disorders are
psychoanalytical therapies (“talking cures”)
developed by Sigmund Freud and Carl Jung
Late 1980’s • A new generation of anti-psychotic drugs are
introduced: SSRI’s (e.g., Prozac)
• CNS is a $20bn drug category today, representing
9% of all prescriptions
1930’s
• Treatments include drugs, electro-convulsive
therapy and lobotomy
2011 • CNS Response develops PEER technology, a
clinical decision support trial to guide
pharmacotherapy treatment for mental disorders
1946
• President Truman signs National Metal Health
act, leading to the formation of the National
Institute of Mental Health to research causes
and treatments for mental illness
It’s been more than 25 years since the last “break through” in mental health treatment

9
2014
The DSM-IV has 100% reliability and 0% validity...
Current medications are not sufficient for most patients... We still do not
know who will respond to a specific treatment.
Clinicians often must resort to “trial and error” before finding a treatment
regimen that works, often subjecting patients to weeks of ineffective
treatment or aversive side effects in the process...
Sources: NIMH Director’s Blog, APA Keynote 2005.
Trial & Error Pharmacotherapy
Medications are only effective 1/3 of the time
Dr. Irving Kirsch of Harvard says drugs used to treat depression DO
work, but for the most part, it’s not the chemical that’s making
people feel better, it’s the placebo effect.
60 Minutes
February 19, 2012

10
2014
• “We are throwing chemicals at people that
only have an efficacy of 30-50%”
• Every medication carries a Black Box
Warning
• Little evidence for on/off-label prescribing
• The patent protection for most
psychotropic drugs has expired
• Little new evidence in the pipeline
Major Pharma Leaving CNS Category

11
2014
• Basic medical model:
- Measure physiology to guide treatment
- But in psychiatry, direct measurement is rare
- Dominant treatment is “trial & error”
• The power of clinical registries:
- “The model is there” — the model of improving pediatric cancer care in the
1970’s proved that doctors can greatly improve outcomes by networking
and comparing treatments
- “Practice-based evidence” — HITECH Act/Dr. Susan Horn
• Physicians developed PEER:
- Outcome registry referenced to EEG
- A biomarker system for medication response
• Military leads PEER adoption:
- Now being used at top military hospitals
Patient:
96% expect a
test
5%
do a test
Doctor:
5% perform a test
We Need an Objective Test to Guide Prescribing

12
2014
Category Cost Clinical Practice Application
Functional Imaging
$1.0-3.0m hardware
$3,500 - $6,000/test
Identifies brain regions associated with
cognitive impairment, brain injury
Genomic Tests
$1.0m hardware
$800 - $3,500/test
Predicts activity of certain enzymes which impact
drug metabolism and certain genetic anomalies
Artificial Intelligence
$3.0m hardware
per test n/a
Predictive analytics for oncology treatment
PEER Interactive
$385/EEG test
$400-$600/PEER Report
Predictive analytics for psychiatric treatment:
• after psychotropic medication failure
• prior to first line medication treatment
Categories of Potential Competitors

13
2014
PEER Technology
13
2014
There are over 100 medications available for the treatment of behavioral disorders. The core problem
is not that we need three more, the problem is that we need to know how to use the 100 we have.
Steve Suffin, M.D. Chief of Clinical Pathology, Quest Diagnostics. Founder, CNS Response.

14
2014
Outcome Registry
Social approach to building evidenceWell-normed test of brain function “the network is the computer”
In The CloudEEG
+ =
more information = better medicine
PEER Technology

15
2014
An analysis that displays
outcomes for neuro-similar
patients:
• by medication class
• by medication
• with Type I/Type II error
• builds evidence - “learns”
PEER Report

16
2014
outcomes
Psychiatric EEG Evaluation Registry
(PEER)
2014e
2013
2012
2011
From a “Crowd-Sourced” Registry
36,000 Endpoints

17
2014
A Learning Machine
Doctor treats
empirically
Scores
treatment
options
Accessed on
iPad via cloud
Characterizes
patient
neurophysiology
phenotype
PEER Interactive
References
published
evidence base

18
2014
Wireless upload to
secure PEER™ servers
Scalable, Capital Efficient Cloud-Based Platform
Highly
scalable
Replicable
process/high
throughput
Network effect:
More users improve
intelligence
PEER ™ report delivered
directly to MD
iPad Interface
Physician office
EEG
Force.com platform

19
2014
PEER Technology Drives Results, Builds Evidence
Better
Outcomes
Reduced
Risk
With Fewer
Meds
In Less time
2-3x higher efficacy vs
standard treatment
85% reduction in
suicidality
Up to 10% reduction
Up to 50% reduction

20
2014
Leadership:
• Walter Reed NMMC - Col Brett Schneider, MD,
Principal Investigator
• Fort Belvoir Community Hospital – Roger Duda, MD
• VA Boston, DC - Col John Bradley, MD USA (Ret)
Design:
• 1,922 subject randomized double-blind multi-site trial
• 18-65 year old active duty or Tricare eligibles
• Inclusion with any non-psychotic comorbid diagnosis
Endpoints:
• Efficacy: QIDS-SR mean change from baseline
• Risk: Suicidality and Severe Adverse Events (SAEs)
• Pharmacoeconomics: time/utilization to MMI
Timeline:
• IRB approval - 11/15/12; Commander’s Letter 1/23/13
• Interim results expected Q2:14
Walter Reed – PEER Trial
Objectives:
• Clinical: to assess whether machine-learning software
can make better recommendations for medications to
treat depression in military personnel –many of them
wounded veterans– compared with doctors prescribing
treatments based solely on their own judgment.
• Label: potential findings for primary care, washout, risk
endpoints
• Commercial: drive military-wide adoption through direct
experience, results, media
• Reimbursement: positive pharmacoeconomics for
military, CMS, commercial payers
Summary:
• Designed as a real-world evidence trial
• Will double current database, add military cohort
• 3rd largest trial in Psychiatry this decade -- a “once and
for all” demonstration of evidence
(QIDS = Quick Inventory of Depression Symptomology)

21
2014
Validation:
PEER followed
vs. not followed
Clinical utility:
Treatment vs.
Control group
• Washout - risk/impact • Primary care finding
• Pharma analysis (Rx
mix)
Pharmaco-
economics
• Primary efficacy
• Suicidality impact
• PTSD impact
• Dropout rate impact
• Medication usage
• Encounters/NNT
• Dropout data
• Budget impact
Q1:14 Q2 Q3 Q4
3 research questions:
Is PEER predictive of
Rx efficacy and risk?
Does PEER translate
successfully into real-
world practice?
Does improved
prescribing accuracy
yield net cost savings?
• Primary efficacy
• Suicidality impact
• PTSD impact
• Dropout rate impact
Walter Reed – PEER Trial: Hierarchy of Evidence

22
2014
PEER Regulatory Pathway
Compare with our online physician outcome
registry (PEER)
We take information from FDA-approved
devices (EEG + QEEG)
Non-invasive, in-office,
20-minute test
Inexpensive, reimbursable
And deliver a report that shows outcomes for
other neurophysiologically similar patients
FDA Registered Class I
Published on physician portal
PEEROnline.com
Option: file Class II 510(k) as Clinical Decision
Support (CDS) for PEERInteractive
PEER Interactive military trial
declared IDE exempt, NSR (8/12)

23
2014
Growth Plan
This could revolutionize prescribing in terms of
helping people get the right treatment sooner.
Col. John Bradley, MD (USA Ret)
2014

24
2014
Current
Addressable
Market(1)
PEER as Future
Standard
of Care(2)
$1.5B $3.4B
$2.7B $6.2B
$5.4B $13.5B
— $2.7B
(1) Current market assumes only12.7% of mental health patients seek and receive minimally adequate care.
(2) Assumes minimally adequate care delivered to ~30% of those who need it.
 Foreign military is first step
(Canada >> Australia >> UK >> Netherlands)
 Single-payer health systems
( mirrors military adoption)
Military
Consumer
International
Pharma
Licensing
 Partner with leading CNS category players
 Clinical Trial enrichment
 Drug Salvage
 New indications
 New Combinations
 Expansion to additional military bases
(up to 26 Major Medical Facilities)
 Expansion to VA system
(up to 108 Major Medical Facilities)
 Target the top 400 (1%) of psychiatrists
 Consumer focused marketing
 Payer adoption
Growth Plan - Summary

25
2014
Top Military Treatment Facilities - Expansion Target Locations

26
2014
* Overseas Contingency Operations in Iraq and Afghanistan theatre of operations have involved more than 2 million service
members.
 The average cost for treating soliders is about four to six times greater
with a diagnosis of PTSD and/or TBI than for patients without those
conditions in the first year of treatment. [Congressional Budget Office
2/12]
 $10m appropriation for expansion of evidence-based psychotropic
decision support in FY14. Included in 2014 NDAA (National Defense
Authorization Act). Similar language is pending for FY15.
 Next step is draw down request by Department of Defense - currently
in negotiation.
2014 NDAA excerpt:
Cost of Medication Failure: 4-6x Higher Cost to Military

27
2014
Growth Model - Rollout
20142013 20162015 2017 2018
Revenue
Media = awareness, validation, free advertising
$400-$600/report private pay
$385/EEG payer reimbursed
2. Consumer adoption
$530/report
Replicate operating model @ 26 military
sites
1. Military-wide adoption
Full reimbursement
3. Payer adoption
4. Pharma & Licensing
5. International
PEER Trial
$400-$600/report private pay
$385/EEG payer reimbursed

28
2014
$8,500 annual cost per patient
2+ failed meds
Cost of Medication Failure: 4x Higher Cost to Payers
17 million “Treatment Resistant” patients
in the USA have failed two or more drugs
Source: Analysis Group Economics, 2008;
Ingenix, a United Healthcare Company
This patient group is so costly because:
• It has almost double the office visits
• More than three times the outpatient claims
• Nearly four times the inpatient claims of
patients who are not treatment resistant

29
2014
Commercial Payer Model
United Healthcare/Optum Technology Assessment
PEER is a biomarker system that is focused on predicting medication response
based on physiological data, agnostic with respect to diagnosis or
symptomatology, and based on comparing the deviations from normal of the
QEEG described above to a CNSR proprietary database of similar deviations for
known responders to certain medication. PEER is based on well established EEG
technology and can be implemented with the same degree of fidelity as standard
EEGs.
Adverse events are no more than those existing for EEGs, medication wash-out
and prescribing a psychotropic medication. PEER is considered to have a level of
relative risk no higher than existing care practices and may be lower due to
positive results with medication choices.
The technology appears to be implementable with fidelity and not dependent on
extensive training of the prescribing physician...
The committee felt that given the Scientific Merit Rating Scale (SMRS)
scores and other factors, this technology does demonstrate a higher level
of evidence, and therefore is considered an Emerging Technology.
QEEG
Reimbursement
$385
PEER
Report
$400 to
$600
Commercial
~$800 ASP
Reimbursed
Under
Mental
Health
Parity and
Addiction
Equity
Act
Paid
Out-of-Pocket
or
Reimbursed
by Insurance

30
2014
Contribution Margin
Current Future
$385
$75
Artifacting &
Neuro Exam
Revenue per Report
Variable Cost per
Report
$385 QEEG
Reimbursed under
MHPEA
$18 Automated Artifacting
Neuro Exam Charged Separately
Future price increases
$400-$600 PEER Report
$800 PEER Report
And QEEG
1) With automation, contribution margin
approaches 98% per PEER Report
& QEEG.
2) Automation enables real-time
turnaround
3) Current cash flow B/E
approx. 500 PEER Reports/mnth
4) Strong demand creates good
opportunities to increase price
5) Future gross margins >95%
$385
$415$415
π=$725
90%
π=$782
98%

31
2014
International Opportunity

32
2014
Standard MDD treatment protocol vs PEER
# unique medications used
Current
Standard
Treatment
Pharma Opportunity: A $20 Billion Category
PEER-
Guided
Treatment
SSRI A
SSRID
SSRI CSSRI B
SSRIA
SSRIB
SSRIC
SSRID

33
2014
Who Benefits? How? Strategy
Patient 96% of patients want test
Patients drive purchase occasion.
This dictates targets, media
strategy, military carrier wave.
Payer
$8,500 annual excess
cost per patient
Pharmacoeconomics from
PEER trial drive payer adoption
Physician Higher billings Selective “1%” PEER Network
Pharma
biomarkers de-risk
Phase III trials
Use biomarkers to de-risk
Phase III trials, “resuscitate”
promising/abandoned agents
Who Benefits? Everyone.

34
2014
Investment Highlights
• CNS Response is personalizing the treatment of brain disorders.
o Combines new tech (AI, cloud-based, crowd-sourced analytics) and a mature
technology (EEG) to match medications to a patient’s unique neurophysiology
• Objective test allows for physiology to guide prescription versus current treatment
paradigm of “trial and error”
• Well-validated with over 12,000 tests done to date
• $20bn + market opportunity in CNS treatment decision support
o 2-3x improved efficacy
o Reduction in suicidality
o Treatment efficiencies
• Large market opportunities in military, VA and direct-to-consumer settings
• Near-term milestones with data from military-sponsored study in Q2:14
• Attractive to payers: significant cost savings as medication failures are avoided

35
2014
CNS Response
Personalized Medicine for Mental Health
2014

36
2014
(1) National Institute of Mental Health. March 2013.
(2) Kessler RC, Chiu WT, Demler O, Walters EE. Prevalence, severity, and comorbidity of twelve-month
DSM-IV disorders in the National Comorbidity Survey Replication (NCS-R). Archives of General
Psychiatry, 2005 Jun;62(6):617-27
(3) Army's STARRS (Study to Assess Risk and Resilience in Servicemembers) survey.
(4) American Association of Suicidology. (2012).
(5) American Psychiatric Association.
(6) Veterans Administration Suicide Report by the Department of Veterans Affairs. February 2013.
References

Cnso

Recommended

Recommended

More Related Content

Similar to Cnso

Similar to Cnso (20)

More from RedChip Companies, Inc.

More from RedChip Companies, Inc. (20)

Recently uploaded

Recently uploaded (20)

Cnso