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F A S T E R , S A F E R , S I M P L E R S U R G E R Y
Terrence Norchi, M.D.President - CEO
OTCQB: ARTH
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This presentation includes forward-looking statements. We make forward-looking statements, as defined by the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, and in some cases, you can identify these statements by forward-looking words such as “if,” “shall,” “may,” “might,” “will likely result,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “intend,” “goal,” “objective,” “predict,” “potential” or “continue,” or the negative of these terms and other comparable terminology. These include statements regarding: our ability to leverage our technology platform in the development of our lead and potential pipeline product candidates; our ability to design and conduct development activities and studies and clinical trials for our lead and potential pipeline product candidates; the potential timing and results of any such clinical trials we may conduct; our ability to obtain regulatory approvals in order to market any planned products; our ability to achieve financial projections; and our ability to achieve milestones. The forward-looking statements in this presentation are based on management’s current expectations, estimates, forecasts and projections about the Company and its business, all of which could prove to wrong. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results for our current and future fiscal years could differ materially from the Company's current expectations. Factors that could cause the Company's results to differ materially from those expressed in forward-looking statements include, without limitation, the following risks: we have estimated that we will have sufficient cash to operate our business for the near future, and we may not be able to obtain sufficient financing and/or establish necessary relationships with third parties to continue to pursue our business plan; the stockholder dilution that may result from future capital raising efforts and the exercise or conversion, as applicable of Arch’s outstanding options and warrants; anti-dilution protection afforded investors in prior financing transactions that may restrict or prohibit Arch’s ability to raise capital on terms favorable to the Company and its current stockholders; any development activities or clinical trials we may conduct may not produce favorable results; regulatory agencies may require that we undertake additional or more costly studies or clinical trials than we presently anticipate; we may never gain regulatory approval for any of our product candidates; we may not be able to protect our intellectual property rights; the intellectual property of others and any asserted claims of infringement; general business and economic conditions may limit our ability to obtain necessary capital; the consequences of competitive factors in the industry in which we operate may restrict the success of any product candidate we are able to commercialize, and we may not be able to attract or retain key personnel. More detailed information about us and the risk factors that may affect the realization of any forward-looking statements is set forth in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on December 5, 2016 and subsequent filings with the SEC. Such documents may be read free of charge on the SEC’s internet site at http://www.sec.gov. You are cautioned not to place undue reliance on any forward-looking statements we make in this presentation given these risks and uncertainties, and all such statements are qualified in their entirety by this cautionary statement. All forward-looking statements speak only as of the date hereof, and we undertake no obligation to revise or update any forward-looking statement to reflect events or circumstances after the date hereof, except as otherwise required by law.
Cautionary Statement Regarding Forward-LookingStatements
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Arch Therapeutics is developing innovative self-assembling barrier technologies to improve wound
care outcomes, enhance the quality of patient care by healthcare personnel, and offer compelling options to
healthcare institutions facing limited resources.
Arch Therapeutics—transforming the landscape of advanced interventional wound care.
Our Purpose?
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Investment Themes
Significant growth potentialBiotech company uniquely positioned to develop significant IP estate for large markets
Attractive regulatory pathwayExpecting multiple products regulated as medical devices
Near term opportunityUS, EU regulatory filings in ‘17 for innovative device in area of recognized medical need
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OTCQB: ARTH
Shares Outstanding (as of May 3, 2017) ~151 million
Shares / Options Held by Mgmt. (~19%) ~31 million
Stock Options – Outstanding and pursuant to “Plan” ~14 million
Trading Volume (90 day average) ~390,000
Cash (as of May 3, 2017) ~$7.2M
Current Cash Burn/Qtr. ~$1.5M
Debt ---
Key Statistics
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Ø Clinical Trial – Western Europe
Ø Initiated FDA regulatory process
Ø Obtained ISO 13485 Certification
Ø Human repeat-exposure skin trial to assess irritation potential
Ø Additional biocompatibility data for CE Mark application
Ø Intellectual Property (USPTO) Grants for self-assembling peptidesØ Barriers composition of matter patentØ Hemostasis method of use patent Ø Adhesions method of use patent Ø Leaky tight junctions method of use patent Ø Solid forms composition of matter and methods of use patent
2016 Accomplishments
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AC5™ Topical (skin)
AC5™ Surgery (internal) Platform Pipeline
Market Opportunities
• Surgery and trauma
• Hemostat• Wound care• Contaminant barrier
• Surgery and trauma
• Hemostat• Sealant• Laparoscopic procedures• Open procedures
• Adhesion prevention• Gastrointestinal anastomosis• Burns• Diabetic ulcers• Pressure ulcers• Ready-to-use and solid forms• Other
Medical Device
• US: 510k• EU: CE Mark
• US: PMA• EU: CE Mark
• Medical Devices
R&D
• Obtained human clinical data for safety and performance in cutaneous surgery
• Obtained preclinical, biocompatibility, repeat human exposure data
• Preclinical studies • Preclinical studies
IDE= Investigational Device Exemption; PMA=premarket approval; CE=European Conformity
Products in Development and Pipeline
Effective in presence of antithrombotic therapy
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√
√
Ø Announce grant for self-assembling peptidomimetics patent
Ø Raise Capital
Ø Submit 510(k) filing for external use to US FDA ~mid-year 2017
Ø File CE Mark for EU commercialization
Ø File IDE for internal surgical clinical trial (for planned PMA application)
Ø File additional patent application(s)
Ø Establish commercialization strategy
Ø Provide data from multiple preclinical programs in pipeline
2017 Planned Milestones
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How are we reaching our goals?With solid experienced leadership
Richard E. Davis Chief Financial OfficerNMT Medical, Rolling Management, TJX Companies, Wang Laboratories
Terrence W. Norchi, MD, MBA Director, President, CEO, FounderNEO Medical Univ, MIT, Tufts School of Med, Sanford Bernstein, Citigroup, Putnam
Avtar Dhillon, MD ChairmanMDS Capital Corp (Lumira), Protox (Sophiris Bio), BC Advantage Funds, Stevia First, Inovio, Oncosec
Steve Kates, PhD VP of TechnologyBrandeis, Millipore, Surface Logix, Ischemix, Northeastern, NIH, Am Chem Soc, Am Peptide Soc
Chirag Shah, PhD VP of R&D Engineering and QualityCovidien, Biolink, Bard
James Sulat DirectorMomenta (Chairman), Valneva (Intercell), AMAG, Diadexus, Chiron
Jayne Prats, PhD VP of Medical and Technical MarketingThe Medicines Company, ProMetic Biosciences, American International Chemical
Detailsavailableathttp://www.archtherapeutics.com/about/leadership
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How are we reaching our goals?And a “deep bench” of scientific/clinical advisors
Robert Williams, PhDColorado State University (University Distinguished Professor), Harvard University
John Richards, DPhil The Medicines Company (President Global Pharmaceutical Development), ImmuLogic, ICI Pharmaceuticals, Oxford
Rutledge Ellis-Behnke, PhD Medical Faculty Mannheim, Univ of Heidelberg (Germany), MIT, Univ of Hong Kong, Int’l Socof Nanomedicine, Glaucoma Foundation
Arthur Rosenthal, PhDBoston Scientific (former Chief Scientific Officer), JNJ, Boston University
Steve Schwaitzberg, MD, FACSJacobs School of Medicine (U Buffalo SUNY), Cambridge Health Alliance, Tufts, Harvard Medical School, SAGES (past president)
William Denman, MBChB, FRCAMassachusetts General, Harvard Medical School, Covidien (past Chief Medical Officer), GE Healthcare
Roger Gregory, PhDKent State University (past Chairman of Department of Chemistry), University of Sheffield, England, University of Minnesota
Paresh Shah, MDNYU Langone Med Ctr & School of Med (Director of Gen Surgery, Vice Chair of Surgery), Lahey Clinic, Lenox Hill, ACS, SSAT, SAGES, Presidential Task Force for Health Care IT
Detailsavailableathttp://www.archtherapeutics.com/about/advisors
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Spleen - PigA challenging organ for bleeding
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Bleeding is common and poses problems in surgical procedures and traumaIssues for surgeons
Considerable time/resources to control bleeding during / after procedures
Visual field loss and increased error risk
Increased risks and morbidity for patients
Abnormal healing and adhesions
Hematomas and seromas
Patient population contributes to increased risk
Patients on ‘lifetime’ anticoagulant, antiplatelet agents
Increased risk in patients with co-morbidities (diabetes, renal disease, etc.)
Bleeding is costly
Increased length of stay
Use of expensive resources include OR time, transfusion risks, etc.
Bleeding A significant clinical and economic burden
13Source: MedMarket Diligence, LLC, Report #S290, July 2016
Global Hemostat and Sealant Market is Growing
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
2015 2016 2017 2018 2019 2020 2021 2022
GlobalHemostatandSealantMarket2015-2022 ($billion)
Hemostats FibrinandOtherSealants TotalHemostatsandSealants
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Cautery
Gelatin
Collagen
Cellulose
Polymers
Thrombin
Fibrin sealants
Product Classes
Unreliable, slow onset of action
Difficult to prepare and use
Foreign body reaction, infection, granuloma
Inflammatory responses / pain
Adhesions
Intact clotting cascade required
Animal/human sourcing (possible infectious agents, variable & costly manufacturing)
Handling restrictions
Antibody formation (proteins)
Limitations
Currently No Ideal Solutions
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U.S. Wound Management Market, 2011-2020, $ millions
Wound Management Market is Growing
Source: MedMarket Diligence, LLC; Report #S249.
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Simple
Easy prep
Easy to use
Easy to understand
Effective
Rapid
Reliable
Assembles on Wound
Versatile
Broad tissue applicability
Open & closed procedures
Prophylactic effects
Safe
Biocompatible
Permits normal healing
Natural amino acids, non-animal source
What do physicians want in a hemostatic/barrier device?
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Synthetic peptide
Clear liquid, squirted or sprayed
Physical mechanical barrier
Bleeding stops promptly
Blood thinner agnostic
Can see and operate through it
Bioasborbable
Enables normal healing
ArchTherapeutics,Inc.©2017
Solution: AC5 Topical HemostatTM
And Arch’s self-assembling peptide technology
ArchTherapeutics,Inc.©2017
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Hydrogel Fills Voids, Does Not Disrupt Cells
ArchTherapeutics,Inc.©2016
ArchTherapeutics,Inc.©2016
AC5 Delivered Locally, Simply
Locally Assembled Biocompatible Nanofiber Network
ArchTherapeutics,Inc.©2016
Novel MechanismSelf-assembly into a hemostatic barrier
ArchTherapeutics,Inc.©2016
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BeforetreatmentCoreremoved,woundtreatedwithAC5
saline saline nothing AC5-H AC5-H AC5-L AC5-L no HEP HEP HEP no HEP HEP no HEP HEP
n=6 n=5 n=4 n=9 n=6 n=5 n=5
* ✝
Rat Liver Model
Randomized treatment groups: AC5-H, AC5-L = high or low concentration formulations, HEP = heparin treated animal*p<0.0001: (AC5-H +/- HEP) vs (saline + HEP); (AC5-H +/- HEP) vs (nothing + HEP)✝ p<0.001: (AC5-L +/- HEP) vs (saline + HEP); (AC5-L +/- HEP) vs (nothing + HEP)
AC5 +/- Blood ThinnerTime to hemostasis (TTH) comparable +/- heparin
Source: Arch Therapeutics, data on file
Rat Liver Punch Biopsy, Heparin(4mm full thickness penetrating wound)
ArchTherapeutics,Inc.©2017
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AC5 saline ORC2 FG FGT ORC1 FbS
*
***
*
AC5 vs. Other Hemostatic AgentsFaster time to hemostasis (TTH) for AC5
Rat Liver Model
Source: Arch Therapeutics, data on file
n = 5 / group
AC5 = AC5TM
ORC1, ORC2 = oxidized regenerated cellulose type 1 or type 2 FG, FGT = flowable gelatin, flowable gelatin plus thrombinFbS = fibrin sealant
*p<0.02 for comparisons with AC5
Median TTH: AC5 <15 sec.; Control ~12x longer
Rat Liver Punch Biopsy (4mm full thickness penetrating wound)
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AC5 vs. Other Hemostatic AgentsHemostasis and adhesion profile best with AC5
I=ischemic areasA=adhesions
ventral aspect dorsal aspect
1 day after AC5 treatment
1 day after fibrin sealant treatment
Time to Hemostasis (TTH) vs Adhesions
TTH
(seco
nds)
Rat Liver Punch Biopsy (4mm full thickness penetrating wound)
AC5 = AC5TM
ORC1, ORC2 = oxidized regenerated cellulose type 1 or type 2 FG, FGT = flowable gelatin, flowable gelatin plus thrombinFbS = fibrin sealant
adhesion severity profile
SALINE
ORC1
FbS
FGT
FG
ORC2
n = 5 / group
Source: Arch Therapeutics, data on file
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Comparative Profiles:Topical agents for wound application
AC5™Platform
*
Biological✝ Physical✝
Fibrin Thrombin Gels Cellulose Collagen
Consistent, rapid barrier formation ✔ ✖ ✖ ✔ ✔ ✔
Hemostatic action ✔✔ ✔ ✔ ✖ ✖ ✔
Performs despitecoagulation/antithrombotic status ✔ ✔ ✖ ✖ ✖ ✖
Clear seal on wound ✔ ✖ ✖ ✖ ✖ ✖
Synthetic source limits animal protein/virus transmission ✔ ✖ ✖ ✖ ✔ ✖
Consistent and low cost manufacturing ✔ ✖ ✖ ✔ ✔ ✖
Non-immunogenic ✔ ✔ ✖ ✔ ✖ ✖
Non-irritating/ non-pyrogenic ✔ ✔ ✔ ✔ ✖ ✔
Biocompatible (resorbable) ✔ ✔ ✔ ✔ ✔ ✔
Non-swelling (vasoconstriction or secondary tissue damage not seen) ✔ ✔ ✔ ✖ ✖ ✖
* Arch Therapeutics, data on file; ✝Howe, J Am Acad Dermatol 2013;69:659.e1-17.
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Medical device pathway
EU and US Regulatory interactions begun
Device met primary and secondary endpoints of EU clinical (human) trial46 pts. with 10 on antiplatelet therapy (blood thinner)Safety outcomes comparable between AC5 and control; no serious adverse effects41% improvement in median time to hemostasis (TTH) versus controlTTH ≤30 seconds in groups of AC treated wounds (+/- antiplatelet therapy)
Regulatory filingsUS
510(k) for external topical useAdvanced filing plans to mid-2017Internal resources focusedBenefits include business opportunities, technology validation
PMA for internal useFile IDE for surgical trial in 2017
EUCE Mark – file application as soon as possible in 2017Potential use of US surgical data for internal use application
Clinical-Regulatory Plan for AC5Adding 510(k) to US regulatory strategy
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MassachusettsInstitute of Technology
Assigned to MITLicensed by Arch
EXCLUSIVE (Arch Is Sole Licensee Worldwide)
Two patent families cover compositions and methods for hemostasis and controlling movement of bodily substances
Expected expiry 2026 – 2028
NON-EXCLUSIVE
5 patent families providing freedom to operateExpected expiry to 2030
Arch Therapeutics
Assigned to Arch
Treatment of damaged tight junctions and enhancing extracellular matrixExpected expiry 2029
Compositions for prevention of adhesions and other barrier applicationsExpected expiry 2026
Composition of matter and methods of use for solid forms of SAP products Expected expiry 2034
Broad Intellectual Property PortfolioValue creation from range of protected uses /compositions
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HemostasisandSealants
Generalsurgery
Antithrombotics
Vascularpatch
Specialtysurgery
CNS
Microsurgery
Largesheathremoval
Trauma
Military OtherBarrierApplication
Pressureulcers
Adhesions
Diabeticfootulcers
Burns
Renalstoneantiretropulsion
WhiteSpace
Post-hemodialysis
Leakytightjunctions
NOTESprocedures
NewCompositions
Tissueregeneration
Hemostasis
Sealant
Adhesions
Pipeline Potential: Stasis & Barrier ApplicationsOpportunities for Arch and/or potential partners
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Examples (US)Pressure ulcers: 2.5M patients/yearDiabetic foot ulcers: 1-1.5M patients/yearBurns
US Figures
Prevalence: ~2% of population (~6-7M)Afflicts ~15% of elderlyAnnual costs surpass $50B Annual spend on wound care products surpasses $15B
Growth Drivers Aging populationPrevalence of underlying conditions, including diabetes, vascular disease, obesity
Problems
⬆ Morbidity, including amputation, and co-morbidities⬆ Mortality⬆ Hospital length of stay and re-hospitalization ⬆ long term use of expensive resources and medical infrastructure
Needs Organic biocompatible barrier to lessen bleeding/leaking, protect, promote moist environment, enable healing
Opportunity ~$1-2B
Pipeline: Chronic Cutaneous WoundsThe burden on public health
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Adhesions
2.5M patients/year in USForm after 70-90% of major abdominal surgery & in 50-100% of women after pelvic surgeryMarket growing ~ 15%Need: Cover, protect, promote moist environment, enable healingOpportunity: ~$1-2B
GI Sealant
~2-15% leak rate in anastomosesSignificant morbidity and mortalitySignificant reoperation rate with added expensesOpportunity: ~$0.5-1B, and potentially greater
Burns
500K patients/year in USLong term expensive treatmentNeed: Barrier to cover, protect, mitigate infection, lessen scarring, enable healingOpportunity: ~$1B
Broad Pipeline PotentialPre-clinical studies initiated in these and other areas
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235 Walnut Street, Suite 6Framingham, MA 01702 USA
Investor Relations
Tel: 1.855.340.ARTH (2784)investors@archtherapeutics.com
Contact Information
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