SPRS therapy investment

1. How to get young skin?
Personalized Cell-based Treatment
SPRS-team:
Arthur Isaev
Vadim Zorin
Alla Zorina
sprs-therapy.com

2. Pain Point
Aesthetic medicine problem

3. Skin aging
Challenge #1: «Intrinsic aging»
One thing that we cannot change is the natural
aging process.
With time, we all get visible lines on our face.
It is natural for our face to lose some of its youthful
fullness.
We notice our skin becoming thinner and drier.
Challenge #2 «Premature skin aging»
Our environment and lifestyle choices can cause our
skin to age prematurely. The medical term for this
type of aging is “extrinsic aging.”.

4. What old people needs
• Fibroblasts are the main skin cells responsible for production
of skin "youth" components: collagen, elastin, and hyaluronic
acid.
• With age, the amount of fibroblasts in skin is decreased, as
well as their biosynthetic activity and collagen content.
• American scientists have shown that in the the skin of old
people, the number of fibroblasts and their biosynthetic
activity is decreased by 40% and 75%, respectively, as
compared with the skin of young people.
• The visual appearance of these processes is wrinkle
formation and the decrease of skin thickness and elasticity.

5. What the technologies lack?
• The technologies can not eliminate the cause of skin aging
• Only temporary conceal consequences of skin aging.
• Effect has a short-term nature.
• Preparations are allogenic for the body.
• They are rapidly destroyed and released from the body.
• Preparations can cause allergic reactions.

6. Insights
Who solves the problem

7. 4
Artur Isaev, Founder and CEO of
Human Stem Cell Institute PJSC (HSCI,
www.eng.hsci.ru; MOEX: ISKJ).
Founder of Gemabank – the largest
private cord blood stem cell bank in
Russia. Founder and publisher of the
scientific and analytical journal
Genes & Cells (before 2014 known as
"Cell Transplantology and Tissue
Engineering"). Member of the Board
of Directors of VITA34, one of a
largest European cord blood banks.
Winner of the Entrepreneur of the
Year 2012 Award in hi-tech in Russia
conducted by Ernst & Young.
Vadim Zorin, M.D., Ph.D. is Head of the
Department of Regenerative Medicine at
PJSC Human Stem Cells Institute
(Moscow, Russia); CEO of Vitacel LLC
(Moscow, Russia); Skolkovo Innovation
Center resident. Dr. Zorin is developer of
the only stem cell technology registered
in Russian Federation – SPRS-therapy
(Service for Personal Regeneration of
Skin) – a complex of personalized
therapeutic and diagnostic procedures to
repair the skin with signs of age-related
and scar changes. His current work
focuses on musculoskeletal regeneration
and induction of myogenic
differentiation. He has published more
than 60 papers in reputed journals in
field of regenerative and personalized
medicine.
Alla Zorina, Ph.D in Medicine. Chief
specialist at Human Stem Cells
Institute on the interaction with
clinics to introduce cell technologies
into medical practice. The main
developer of technology based on
the use of autologous skin fibroblasts
to correct the age-related skin
changes and scars (the SPRS®
therapy). The developer of two
medical technologies, the author of
10 patents and more than 60
research papers and publications.
The lecturer at the Department of
Dermatovenerology, Mycology, and
Cosmetology (the Russian Medical
Academy of Postgraduate Education).
Meet our SPRS-team

8. What is SPRS therapy ®?
• The SPRS therapy is based on skin injections of patient's own skin fibroblasts that are
functionally active and have been obtained from a small skin sample at the
specialized laboratory.
• Since fibroblasts were obtained from patient's own skin, they easily survive in
patient's skin and promote efficient correction of age-related skin changes by active
producing all the necessary skin components, i.e., collagen, elastin, hyaluronic acid,
etc.
• The studies have been shown that in one year after the end of procedure, the skin
density increases by 64%. This is accompanied by the increase of skin elasticity and
firmness while the depth and amount of wrinkles is decreased.
• SPRS therapy - the technology that allows one not only to remove small and average
wrinkles but also to increase the thickness, tension, and elasticity of the skin.
This procedure not only results in visual correction of the age-related skin changes,
but also removes the cause of skin aging owing to enlargement of the skin fibroblasts
population which decreases in number with age.

9. Technology
Way to solve the problem

10. SPRS therapy® – a set of personalized diagnostics and treatment procedures:
• diagnostics of the conditions of the patient’s skin (analyzing the regenerative and proliferative
potential of the patient’s dermal fibroblasts)
• a therapy course using a cell product containing the patient’s own dermal fibroblasts
• long-term storage of the patient’s skin fibroblast culture in cryogenic bank
NB: Outside Russia only one other analogous cell technology has been approved. It was developed by Fibrocell Science (USA)
and was registered later – only in 2011. However, the competitive advantage of SPRS therapy lies in the fact that it includes a set
of diagnostic procedures which allow for the use of a personalized approach – the development of an individualized program for
correcting defects and slowing the skin’s aging process.
5
BEFORE
AFTER
SPRS therapy®: how does it work?

11. Why to use exactly the SPRS therapy?
WHY WOULD NOT SIMPLY INJECT BOTOX?
• The SPRS therapy influences on the cause of skin aging and
not only smoothes wrinkles but also increases the volume,
tension, and elasticity of the skin, in other words, returns the
skin to its natural young condition and this effect lasts for a
long time.
WHY TO USE EXACTLY THE SPRS THERAPY BUT?
• The SPRS therapy solves the problem of skin aging by using
the absolutely different approach: patient's own fibroblasts
are injected into the skin and these fibroblasts naturally and
intensively produce all the components that are necessary
for the skin youth and they do this for a long time.

12. SPRS product
product of autologous
dermal fibroblasts from
patient’s skin (autoDF)
for injection
Skin Passport®
personilized cell-based skin
diagnostics (evaluation of
morpho-functional properties of
patient’s skin fibroblasts)
Could be marketed as a separate
service
SPRS bank
storage of patient’s skin
fibroblast culture in cryogenic
bank (aesthetic & medical
applications /bio insurance/)
Could be marketed as a separate
service
6
SPRS: revenue drivers

13. Possible to be launched in the market
separately from SPRS therapy service
"Skin Passport" - an innovative comprehensive service for
aesthetic medicine market
The Mission and the Goal of the "Skin Passport" - to
introduce in practice of aesthetic medicine the new method of
personalized skin diagnosis to predict the efficacy and safety
of cosmetic procedures and also therapeutic procedures in
Plastic and Reconstructive Surgery (e.g. limitations for use of
various cosmetology methods in respect of their affect on
dermal microstructure i.e. with lasers, radiofrequency- or
ultrasound devices).
Recording the results of laboratory
diagnosis ("Skin Passport") + results
interpreting and formulation of
individual correction program for skin
changes and for prophylaxis of skin
aging
Diagnosis of patient's skin based on
a patented method of clonal analysis
of the dermal fibroblasts population
Creation of a personal dermal
autofibroblasts bank and their
long-term cryostorage
Securing the "biological health
insurance" for a patient
(primary segment: women, 18-50
years of age)
July 2014 - US patent (for “A method of
determining tissue regenerative ability of the
skin”)
HSCI also applied for an international patent (PCT) to
protect its IP “Diagnostic method for connective tissue
and its application” and this PCT application was
published on April 11, 2013 and in 2013-2014 moved
to the national and regional phases.
As of today EU, Eurasia, USA, and Japan patents are
received and Brazil patent is expected in 2017
11
Skin Passport

14. The clinical results of SPRS-therapy® have a
long-term progressive effect:
• an increase in the number of functionally active
fibroblasts in the dermis
• an increase in the amount of collagen in the
dermis
• a thickening of the skin
• a reduction in the number and depth of wrinkles
• a smoothing of the skin
SPRS-therapy® is based on dosed impregnation of the patient’s skin within the areas of concern with the patient’s
own skin cells (autologous dermal fibroblasts).
The fibroblasts then synthesize collagen, elastin, hyaluronic acid and other important elements of the extracellular
matrix therefore restoring the skin’s microstructure and stimulating the natural renewal processes of the dermis. As
a result the skin’s thickness and elasticity increase, the number and depth of wrinkles decrease, and skin’s
appearance improves.
11
SPRS-therapy: Results

15. • a biopsy of skin sample taken from behind the patient’s ear
• an isolation and in vitro cultivation of the patient’s own dermal fibroblasts
• diagnostics of the patient’s skin condition by means of proprietary clonal assay technique (Skin
Passport and SPRS program)
• course of therapy using the cell product with the patient’s own fibroblasts (SPRS product)
• and long-term storage of the patient’s skin fibroblast culture in cryogenic bank (SPRS bank)
Consultation &
Examination
Visit to Clinic
Exclusion of
Contra-indications Biopsy
Transportation of Biopsy
Material in GMP Lab
SPRS diagnostics
Elaboration of Skin
Passport®
SPRS product
preparation
SPRS therapy
application
Delivery of SPRS
product in Clinic
Cryobanking of
Fibroblasts
Long-term
Therapeutic Effect
108 9
6
SPRS therapy®: step-by-step

16. 11
Service Number of days Notes
SPRS Bank creation 50 days
No longer than 50 days from biopsy delivery to HSCI’s laboratories
(due to individual cells features)
SPRS diagnostics and
Skin Passport® creation
15 days upon
SPRS Bank creation
Within 15 days upon SPRS Bank creation
SPRS Drug production (upon
SPRS Bank availability)
30 days Orders for production accepted not less than 30 days before the
procedure (delivery date)
SPRS Drug production
(without SPRS Bank availability)
45-60 days
The clinic provides the biopsy sample along with an orders to produce
SPRS Drug not less than 45 days before pre-scheduled date of SPRS
Drug administration
Second and/or additional skin
treatments
30 days before SPRS
Drug production
In the case when treatment course is divided on two procedures (for
example 60+60 mln of cell with approximate 4 weeks interval) the clinic
should confirm the date for the second procedure not less than 30
days prior to it. Reduction of notification terms is only possible upon
prior confirmation with HSCI.
Terms of production

17. 17
Alternative drug/ procedure Advantages Disadvantages
Clinical effect
duration
Hyaluronic acid-based drugs The effect appears right after the
course of procedure
Short-term clinical effect ~3 months
PRP Therapy The effect appears right after the
course of procedure
Short-term clinical effect ~3 months
Botox Quick and expressed effect Short-term clinical effect, risks of
complications (defection of
mimicry, eyelids ptosis)
3 - 6 months
Fraxel - nonablative
(laser-based micro fractional derma
damage)
More profound effect Traumatic, risks of skin atrophy
and fibrosis
> 1 year
Thermage (radiofrequency-based
thickening of dermis collagen)
Low price Traumatic, risks of burns and after
burn scars
> 1 year
Fraxel - ablative
(laser-based micro fractional
epidermis damage)
More profound effect Risks of hyperpigmentation and
skin fibrosis development
> 1 year
Drugs based on Evolence collagen Quick and expressed effect Risks of allergic reactions > 1 year
SPRS Therapy® Long-term effect, new generation
skin treatment (aimed at the
cause, not the symptoms)
High price > 2 years
Comparable analysis

18. Intellectual Property
What we already have

19. 19
Patent (RU) #2281776 “Biotransplantat and the method for correction of
soft tissues defects, the method for biotransplantat construction”
Patent (RU) #2428996 “Biotransplantat for the correction of soft tissues
(versions), the method for biotransplantat construction (versions) and the
method for soft tissues’ defects correction”
Patent (RU) #2466680 “The method for medical skin diagnostics
(versions)”
Trademarks Russia:
• SPRS therapy®
• Skin Passport®
Patent (USA) #US
8,790,890 B2
“Diagnostic method
for connective tissue
and its application”
Trademarks Ukraine:
• SPRS therapy®
Patent (UA) #111344
“Diagnostic method
for connective tissue
and its application”
Patents and trademarks

20. April 2013 - international patent application
(PCT) WO 2013/051963 dated 11.04.2013 was
published for protection of IP for the method of
personalized skin diagnosis
July 2014 - US patent «Diagnostic method for
connective tissue and its application»
US 2013/0266550, US 8,790,890 В2 - 29.07.14.)
Starting June 2015 – PCT is
undergoing national review and
registration in Brazil;
The patent is expected in 2017
2015 -
2017
20
September 2016 - patent EP 12837815.5
“Diagnostic method for connective tissue and its
application”
September 2016 - patent JP 2014-533239
“Diagnostic method for connective tissue and its
application”
Patents and trademarks

21. Validation
Proven safety and effectiveness

22. Before After 1 month After 12 monthsAfter 6 months
Out of 17 patients participating in a special cinical study,
2010 - 2011 (Zorin V. et al. Clinical-instrumental and morphological evaluation
of the effect of autologous dermal fibroblasts administration. Journal of Tissue
Engineering and Regenerative Medicine. 2014 Dec 19. doi: 10.1002/term.1976.
[Epub ahead of print] ) :
• 100% satisfied with results;
• Over 70% estimates the effect as “Excellent”;
• 100% - no complications or side effects.
12
SPRS-therapy clinical trials

23. The change of derma thickness, %
(morphological studies)
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
До Через 1
месяц
Через 12
месяцев
0.0%
45.0%
62.5%
Относительноеизменение,%
Before SPRS-therapy 1 month 12 months
Zorin V. et al. Clinical-instrumental and
morphological evaluation of the effect of
autologous dermal fibroblasts administration.
Journal of Tissue Engineering and Regenerative
Medicine.
2014 Dec 19. doi: 10.1002/term.1976.
[Epub ahead of print]
13
SPRS therapy® clinical trials (cont.)

24. INDICATOR OF EFFICIENCY
ESTIMATION
(number of patients, %)
Increase of skin thickness and decrease of wrinkles
depth
100
Increase of skin firmness and elasticity, lifting effect 87
Decrease in the number of wrinkles 73
Complications, negative effects 0
Conclusion:
the SPRS therapy® technology is safe and clinically effective
15
SPRS therapy®: post-marketing studies - 1 year

25. 16
Publications
Overall we made
more than 35
publications in
scientific and
specialized
journals in
Russian

26. Business case
Our achievements

27. Executive Summary
• Starting January 2011, HSCI brought to the Russian aesthetic medicine
market SPRS Therapy® (www.sprs-therapy.com) – a comprehensive set
of services for individual skin regeneration based on the innovative cell
technology of applying autologous dermal fibroblasts to repair skin
damage due to aging or other structural changes.
• B2B – model as market testing of the drug. Aesthetics Medical Centre
business model doesn’t rely on promotion of services – so it is the
most narrow, but at the same time gives the highest-margin.
• Solvency of customers and further investments in marketing are the
key success factors
• Today the service is primarily offered through the leading aesthetics
clinics of Moscow (>30), and 18 cities across Russia and CIS.
• 75% become permanent SPRS Therapy® users.
2

28. 2003
LABORATORY
INVESTIGATION
2010
MARKET
LAUNCH
2011
POSTMARKETING
STUDIES
2008
CLINICAL
STUDIES
2010
MARKETING
APPROVAL
2012
5 YEARS
IN THE MARKET
2016
PRE-CLINICAL
STUDIES
2015
MOSCOW GOVERNMENT
RECOGNITION
7
SPRS Therapy® Case Study
2014
“Aesthetic Medicine”
Journal’s Award

29. On the Russian market – since 2011
FY 2015: ~ 10% of HSCI’s consolidated revenue
• Proven business model
• Mature sales network (> 45 clinics)
• Great amount of clinical data
• “Growth stage” company
As of Q2 2016, the total number of patients: > 700
(~70% have returned for follow-up applications
(incl. other areas besides the face)
The service is provided through clinics of aesthetic
medicine primarily in Moscow (>30 clinics), but there are
some in the Russia’s regions as well (in 16 major Russian
cities).
21
Business model Russia: B2B
Cell
processing Treatment
From 2011 to 2016 the cost for the procedure ranged $10K-20K in Russia
* not including free-of-charge cases (~120 patients)
CLINIC
Revenue model - Russia
• The service is offered through the leading dermatology and
aesthetic clinics of Russia;
• Average clinics margin 100% -> driving sales.

30. Investment Project
Our proposition

31. 21
Investment opportunity
What we need
• US$ 1 million to complete formal registration in Russia according to new
legislation
• US$ 10 million to start clinical trials in Asia and Latin America
• US$ 5 million to finance licensing activity in foreign markets
• US$ 3 million for related projects
Market
• Global market: about to reach $10 billion mark
• Asia and Latin America expected to be most attractive to customers
Competition
• As of today, there are no direct competitors for SPRS-therapy in both
Russian and global markets. The only possible competitor Fibrocell holds
number of IPs without development.
Forecasts
• Sales on local market (Russia) ~ up to 3 billion rubles
• International sales of SPRS-therapy ~ up to 1 billion USD
Investor Expected Return
Exit multiple 7
Share in the Project Up to 25%
IRR (will depend on the timing of
funds disbursements and exit)
35%-55%
Exit Considerations
▪ Exit in 2021-2022
▪ Trade sale to a strategic
investor
▪ Possible IPO on NASDAQ
(after beggining of
development in the United
States, 2020+)

32. Global Professional Aesthetics Market
• Serviceable Available Market for SPRS therapy – Anti-wrinkle product
segment
• About $4 billion in 2017
• Segment expected to expand by 11.5% per year
• Global Medical Aesthetics Market exceeded $7.6 billion in 2015
• Through 2020 it is expected to grow by 11% CAGR
• Key drivers of market: body shaping / skin tightening; neurotoxins

33. Procedure Volume Drivers (regions)
• Required funding for registration in Asia and Latin America - $10 millions
• Monetization on global markets will be implemented through licensing of
the unique product: additional funds – no less than $5 millions
• In 2015, total global procedure
volume reached 59 million
treatments
• On a global basis, procedure
volume will grow most
strongly in Asia and Latin
America.
• Asia Pacific accounted for the
largest market share of 33% in
2015
59
80,1
19,2
30,4
5,9
9,2
0
10
20
30
40
50
60
70
80
90
2015 … 2020
Global Treatments Asia Latin America
Procedure Volume, mln. treatments
Proposition:

34. Local Russian Market
Serviceable Available Market:
• Fear of the aging process
• Age older than 35 years
• Focused on non-surgical treatmentSAM = 24 bln. RUB
SOM = 2 bln. RUB
% = 250 mln
RUB
Serviceable Obtainable Market:
• The main obstacle to market penetration
– patients’ budget
• The share of rich patients is less than 10%
Current market state:
• Only B2B segment – significant expansion
potential
• Different pricing among clinics reduces
the demand for the service

35. • In accordance with the Federal law "On biomedical cell products" it is required to re-registrate the drug
• This process causes no uncertainty, since the drug has already completed clinical trials in the previous
years, there is clinical base of more than 700 patients, and past clinical protocols can be used
• Required funding for registration in Russia – $1 million
21
Business expansion - Russia
• Trials of safety and efficacy in
accordance with current legislation
• Timeline ~ 2 years
• All necessary preparations have been
made
• Expected timeline – less than 6 month
• Sample of 100 patients recruited in multiple cohorts for multicenter clinical protocol
• Sampling: in accordance with the Legislation; patients that haven’t used injections; cost-effective
• Possible setoff of completed post-
marketing trials as Phase III results
New legislation:
Clinical trials:
Licensing:
• We are working on licensing of SPRS – therapy in Russia
• Our current offers range from $5 to $20 millions for non-exclusive and exclusive license respectively
• There are several partners that are interested in licensing full range of products (NDA signed)
Pre-clinical trials Phase I and Phase II Post-marketing trials setoff

36. Success drivers
Point 1: «Blue Ocean market»
• There is only one possible competitor –
Fibrocell, that has several IPs for aesthetic
medicine market
• Has no current operations and development
on SPRS-therapy target market
Point 2: «Buyout possibility»
• There is a preliminary agreement to acquire
competitive IPs from Fibrocell to increase
the market volume for SPRS-therapy

37. Other Strategic Opportunities
• SPRG-therapy is also based on fibroblasts technology
• Oriented for aesthetic and clinical dentistry
• Technology was tested (pilot) and ready for clinical
trials and registration
• Required funding for registration in Russia - $1 million
SPRG:
• Epidermolysis bullosa is a group of inherited
connective tissue diseases that cause blisters in the
skin and mucosal membranes
• Socially significant disease - incidence of 9 to 20 per
million newborns.
• Its severity ranges from mild to lethal.
• Required funding for registration in Russia - $2 million
Epidermolysis bullosa:

38. Thank you
maizel@hsci.ru