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Stematix Tm Exec Summary Aug08
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Stematix Tm Exec Summary Aug08

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Adult Stem Cell Therapy

Adult Stem Cell Therapy

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  • 1. stematix™, inc. DELIVERING THE PROMISE OF STEM CELLS TO THE WORLD Stematix, Inc. (‘Stematix’ or the ‘Company’) is a regenerative medicine therapy company poised to accelerate safe and effective use of stem cell therapies globally. Stematix is establishing international therapy clinics in public-private partnerships that provide near-term and approved stem cell treatments for hundreds of millions of patients that could potentially benefit. Stematix’s model solves several problems in the current stem cell therapy market allowing the Company to grow into a major player in the multi-billion dollar stem cell therapy industry over the next few years. The Problems Stematix Addresses The promise of stem cells has attracted governments and companies to look at utilizing stem cell therapies as a cost effective and efficient way to address the problems with healthcare today. The Stematix business model provides solutions for several obstacles that need to be overcome for stem cell therapy to be used on a wide- scale basis: lack of integrated technology solutions, need for regulated safe stem cell therapies, and need to move from single patient to multi-patient cell sources. Problem 1 – Lack of Integrated Solutions These global entities seek to leverage their region’s well-trained medical professionals and regulatory bodies that want to fast-track stem cell treatment for their people. However, such entities have expressed a need for comprehensive commercial solutions that integrate for them current niche stem cell technologies, services, therapies and research needed to establish world-class, fully operational banks and clinics. Due to the management team’s extensive experience in stem cell technology integration and commercialization, Stematix is able to provide comprehensive commercial solutions (RediStem™) for umbilical cord banking and stem cell therapy clinics. Problem 2 – Safety Regulations Currently, progress in commercial clinical therapy using stem cells is occurring more rapidly outside the U.S., although many of these therapies are unregulated. The stem cell therapy market of existing treatments is increasingly accessible to patients through medical tourism when treatments are not available in their home countries due to regulatory approval delays as well as, in the U.S. in particular, an increasingly litigious and risk- averse culture. Stematix is establishing regulated clinics which will fast-track needed therapies in countries where this is possible, thus making proven therapies available earlier than otherwise possible in some localities. Problem 3 – Therapy is not Scalable Using Patient’s Own Stem Cells Bone marrow (an enriched source of adult stem cells in the body) and other adult stem cells are known to be clinically effective for more than 90 approved or close-to-approved medical indications. Initially, therapies provided in Stematix clinics will be the proven bone marrow-based treatments. The bone marrow therapy approach is feasible in the near-term while Stematix is establishing therapy clinics and there is a current market of customers who are willing to support the cost (~$100k USD) and potential pain related to bone marrow therapy using their own stem cells (autologous treatment). However, in the case of older or less healthy patients with less potent stem cells, autologous treatment may not work effectively enough (or at all) despite a sound treatment strategy. ©Stematix™, Inc. 2008 all rights reserved 1
  • 2. stematix™, inc. Stematix’s approach is focused on moving stem cell therapy to allogeneic treatment – where stem cells from one patient can be used for treatment of several different patients – thereby enabling stem cell therapy to become more accessible to patients. The Stematix Path Forward Through its extensive industry know-how and experience, Stematix has developed a suite of complete commercial products and solutions to help global partners establish world-class, fully operational stem cell banks and therapy clinics in a cost-effective and timely manner. To address the lack of adequate availability of adult stem cell therapy, Stematix has an innovative ’predicate therapy model’ approach to the market. Stematix’s strategy is to follow medical indications that have had successful results with bone marrow therapy using alternative sources of cells that are more commercially viable than bone marrow and can be used by a variety of patients. There are 8-9 cell types from post-birth sources such as umbilical cords and placentae that are particularly potent and useful for a variety of medical treatments. Such treatment will then allow for cross-patient use of cells with minimal ‘matching’ (allogeneic treatment) as post-birth cells are ‘immuno-naïve’. Since babies haven’t developed a full immune system at birth, cross-patient matching and therapy is less difficult. Certain types of post-birth cells will not even require matching and are even more broadly useful as they are ‘immuno-privileged’, i.e., they manage the immune system reaction to them. Through a public-private partnerships model, Stematix and its partners ensure that their banks and clinics enable rapid, properly regulated and approved, effective adult stem cell therapy. Stematix plans to help its partners obtain regulatory approvals in their own countries for the predicate therapy approach after doing fast- tracked clinical testing for safety and efficacy. Additionally, in conjunction with the establishment of therapy clinics, Stematix will also focus on the establishment of stem cell banks in conjunction with maternity hospitals to position Stematix and its clinics to provide the various useful post-birth stem cells world-wide and to its own regional clinics. Revenue Model and Marketing Strategy Stematix is focusing its mission on regions of the world where partnerships with local entities and regulatory bodies can lead to rapid establishment of autologous to allogeneic stem cell treatment meeting world standards of care. The Stematix revenue model is based upon owning an equity stake (up to 50%) in partner therapy clinics and umbilical cord banks and receiving the same percentage of the clinic’s post-tax revenues. While timelines to positive cash flow from full-scale operations of these clinics and banks are relatively short (within 2 years), Stematix’s model incorporates the following marketing strategy and sales of commercial solutions to create near-term revenues for the Company, as well as allow Stematix to identify, attract and qualify potential partners: Stematix RediStem™ clinical design, operation, training and regulatory affairs solutions to support and • establish world-class, fully-operational stem cell banks and therapy clinics around the world; Post-birth stem cell products and banking to provide a consistent source of valuable stem cells for • research and therapy; and Stematix intellectual property and technology know-how, through continued internal development and • strategic partnerships / in-licensing; which all lead to ©Stematix™, Inc. 2008 all rights reserved 2
  • 3. stematix™, inc. A growing network of therapy clinics around the world which will enhance mutual learnings and industry • expertise of all clinics in the Stematix Network. Each clinic may be transformational to medical practice in its region whether it is co-located with a hospital or independent. Established Proof-of-Concept Stematix has already established its first cross-border partnership customer for the establishment of banking and therapy clinic facilities. A Mexican stem cell company, in conjunction with the Mexico Ministry of Health, is partnering with Stematix to expedite regulatory approval of stem cell therapies directly to citizens and medical tourism patients in Mexico. The resources and opportunities available through this first partnership in Mexico will create near-term and sustainable RediStem™ and research-grade stem cell sales revenues for Stematix while enabling further pursuit of the Company’s mission of providing access to adult stem cell therapies for larger numbers of patients in a public-private partnership. Stematix is also currently engaged in discussions with several other potential partners, including negotiations with one in Greece. Experienced Stem Cell Industry Management In addition to bringing a broad and holistic range of experience from diverse business backgrounds, Stematix’s Management Team has worked well together for the previous two-years in ‘front-line’ marketing and technology development for adult stem cells prior to forming Stematix. Dr. David C. Bonner, Chairman and CEO, has extensive experience in executive business management globally as well as technology development, including a successful medical system commercialization. He has led seven start-up ventures – including a wound-care venture and a stem cell venture – and has extensive world-wide licensing experience. Dr. Bonner earned his B.S. and M.S. degrees in Chemical Engineering from the University of Texas at Austin, and completed his Ph.D. degree in Chemical Engineering at the University of California, Berkeley. James Rogers, Executive Vice President and Chief Financial Officer, was a partner in the largest independent CPA firm in Louisiana for 20 years where he specialized in audits of health care companies, not-for-profit entities and banks. He then formed and became an owner of a hospital where he served as CFO until he sold his interest. He was a managing member of RAGE Resources, LLC, a financial consulting firm, and CFO of a stem cell start-up, prior to joining Stematix. Dr. Francesca Vitelli, Vice President-Technology Commercialization, has over 15 years of combined research and commercialization experience in medical and developmental biology. She was most recently Technology Director of Regenetech, Inc. She has also served as Assistant Professor-Research in the Center for Molecular Development and Disease, Institute for Biosciences and Technology (IBT) at Texas A&M University – Health Science Center. She received her Ph.D. in Neurogenetics from the University of Siena, Italy. Dr. Vitelli also currently serves as Adjunct Assistant Professor at the IBT at Texas A&M University-Health Science Center. Timmie Wang, Vice President-Business Development, previously served as Director of Investor Relations of Regenetech, Inc. and Director of Special Projects of the Rice Alliance for Technology and Entrepreneurship, supporting the creation of technology-based companies and the commercialization of new technologies. Ms. Wang received her B.S. in Bioengineering with Phi Beta Kappa and Tau Beta Pi distinctions from Rice University. ©Stematix™, Inc. 2008 all rights reserved 3
  • 4. stematix™, inc. Financing Requirements Stematix is seeking to raise $12 million over the next 18 months in two milestone based stages. A $2 million fund will last through Q2 of 2009, and will be directed preferentially to the following initiatives: baseline operating costs (pre-revenue); launching RediStem™ solutions sales; launching a business of supplying umbilical cord and placental cells for research purposes; and initial equity participation and development of 2 banks and therapy clinics in Mexico. This round is engineered to bring Stematix into a revenue phase. A subsequent $10 million fund will be sought, and may be completed through a variety of financial vehicles depending on local Partner requirements and resources. The proceeds of this round will push Stematix into a high-growth phase including seed funding of additional umbilical cord banking and cell therapy clinic operations in Mexico in which Stematix is expected to have minority equity position; and for a partnership initiative which entails matching funds for a Greek venture-funded therapy clinic and umbilical cord bank. Initial seed funding of $450,000 is being used for R&D, product development, sales support and human capital, and has brought Stematix from concept to initial proof of concept. Investment-driven milestones leading to revenue include: August 2008 – Establish Stematix tissue culture laboratory, Houston, TX • Q1 2009 – Open umbilical cord banking facility in Mexico • Q1 2009 – First therapy at general hospital in Mexico • Q1 2009 – Launch sale of stem cells from umbilical cord sources for research purposes • Q1 2009 – Open cell processing/expansion facility in Mexico co-located with umbilical cord bank • Q2 2009 – Launch trials for second therapy at maternal hospital in Mexico • Why You Should Invest Stematix is committed to providing returns on investment for all of its stakeholders by bringing significant financial, humanitarian and technical value. Financial returns for investors include: Stematix turns EBITDA positive in 2010 – the second full year of operations; • Significant, sustainable revenues from a stem cell therapy market estimated to be $20 billion in 2010; • Immediate measurable near-term revenues; • Long-term value creation by owning an equity stake in Stematix’s global network of banks and clinics; • Mitigated financial risk by Stematix owning equity in a portfolio of banks and clinics; • Public-private partnership model enables regulated and safe stem cell therapies; • Replicable model for establishment of banks and clinics once initial approval is obtained in each partner • country; and Established proof-of-concept – Mexico partner in place, first revenues expected Q4 2008. • ©Stematix™, Inc. 2008 all rights reserved 4