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CONFIDENTIAL 1
Jon J. Snyder
OVA 4.17.09
CONFIDENTIAL 2
Background
CONFIDENTIAL 3
Management Morning Read…
The Plain Dealer
• ‘Ohio leads Midwest in health-care investments’ - October 30, 2007
CONFIDENTIAL 4
BioEnterprise – CEO IR
• CEO IR is an important new strategy to continue to build NEOhio region’s expanding bioscience sector
• Funded by the State of OH ESP Program• Lend expertise in clinical application to
start up companies - OR –
• Find technology, form Company, secure funding, lead and grow the Company
CONFIDENTIAL 5
BioEnterprise – CEO IR
• First CEO IR in the Program (new ground)• By Day 3 – Strategic Plan Drafted• Measurable Objectives (stay on track)• Quarterly Focused• Goal
– Find neurostimulation technology to form a company around
– Establish company– Secure funding– Commercialize technology and grow opportunity
CONFIDENTIAL 6
CEO IR Plan• CY08 - Q1
– Review neurostimulation technologies and research projects • Interface with tech transfer departments/key contacts and researchers • Understand status and timing of research underway/planned• Value Proposition and IP position review• Gather/review VC feedback of previously presented neurostimulation opportunities
(e.g. VC firms)• Understand local neurostimulation company history• Introduction to area seed funding sources (e.g. JumpStart, Case Tech Ventures,
NorthCoast Angels,...)
• CY08 – Q2– Continue interface with tech transfer departments/key contacts and researchers– Identify most promising neurostimulation technology opportunities
• Confirm value proposition, investibility, and IP status• Understand technology licensing capability• Define competitive technology/application • Conduct market opportunity review
CONFIDENTIAL 7
CEO IR Plan
• CY08 – Q3/Q4– Identify key ‘next steps/milestones’ in
technology development process (e.g. proof of concept)
– Create and shape business model concept– Develop business plan, including funding
requirements to meet milestones– Target funding sources (equity,
non-equity/grants, strategic partnerships) and secure
CONFIDENTIAL 8
Est. October 22, 2008
CONFIDENTIAL 9
Problem: Residual Limb PainLarge Unmet Medical Need:
– 1.7 million patients have undergone limb amputation (U.S.)– Projected to double by year 2050 to 3.6 million patients– 900,000 patients with no proven treatment for their chronic residual
limb pain due to severed limb = $14b total market ($16k ASP) – 95,000 new residual limb pain patients each year = $1.5b new
annual potential market
Current Treatments Inadequate: – Pharmacological polytherapy, injectable pain medication, pain
pumps, peripheral nerve stimulation, spinal cord stimulation, and surgical ablation
– Only 30% effective in total
Source: Amputee Coalition of America, Arch Phys Med Rehabil Vol. 89, March 2008, The Lancet, Neurology July 2002
CONFIDENTIAL 10
Solution: Neuros Medical Nerve Block Technology• Nerve Block is a rapid, completely reversible, neurostimulation
therapy which blocks pain, without systemic adverse effects• Blocks action-potential of the nerve (sensory + motor signal)
ImplantableProgrammable Generator
Implantable Stimulating Electrode/lead
Product Example
Source: ANS – A St. Jude Company
CONFIDENTIAL 11
Neuros Medical Neurostimulation Technology DifferentiationSYSTEM FREQUENCY COMPARISON RESULT PRICE
Peripheral Nerve Stimulation
30Hz
Delivers a ‘tingling’ sensation – does not block pain
~ $16K
Spinal Cord Stimulation
30Hz
Delivers a ‘tingling’ sensation – does not block pain
~$16K
Neuros5-30Khz (30,000
Hz)
Complete block of pain signal
~$16K
CONFIDENTIAL 12
Intellectual Property - Regulatory – Reimbursement
Patent Protection/Differentiation- Neuros technology is unique and has been protected with:
• 1 issued United States Patent• 1 Patent Cooperation Treaty (PCT) application• 1 continuation in part application• Additional patent applications under discussion with targeted filing date of Q4
2009
Regulatory: • Class II device, requiring FDA 510k Market Clearance – OR - PMA
Reimbursement:• Nerve Block will follow precedent of peripheral nerve stimulation (PNS) which
currently exists and is neutral to positive for providers and physicians.• Payer Mix: 81% Medicare and Private; 10% Medicaid
(source: HCUPNet: US Health and Human Services)
CONFIDENTIAL 13
Management Team Jon J. Snyder: Founder, President, and CEO
• CEO In Residence at BioEnterprise and Venture Partner at Arboretum Ventures.
• Over 20 years of domestic and international management experience in biomedical and healthcare sales, marketing, and operations at Cyberonics, Cardinal Health, Imalux, and STERIS.
Kevin L. Kilgore, Ph.D.: Inventor, Technical Consultant
• Over 20 years of experience with upper extremity neuroprosthetic systems.
• Multiple appointments and positions at MetroHealth Medical Center, CWRU, Cleveland Functional Electrical Stimulation (FES) Center and VA Advanced Platform Technology (APT) Center.
Niloy Bhadra, M.D., Ph.D. Technical Consultant
• Orthopaedic Surgeon - Biomedical Engineer.
• Over 14 years of experience with various aspects of functional electrical stimulation research, CWRU, and Cleveland FES Center.
To Be Added 2010 – 2011:
• CTO, CSO, VP Sales and Marketing, Support Personnel
CONFIDENTIAL 14
Continuum of Care
NSAIDSINJECTIBLE
NERVE BLOCKSDIA
GN
OS
IS FIRST-TIER PAIN
THERAPIESOPIOIDS
SECOND TIER PAIN
THERAPIES
ADVANCED PAIN
THERAPIES
PNS
SCS
SURGICAL ABLATION
Neuros
CONFIDENTIAL 15
Business Model• Combination of Direct Sales Force and Strategic
Partnerships for Selected Target Specialties • Anesthesiologists, Interventional Pain Physicians, Physiatrists,
Rehabilitative Medicine
• Supported by Consumer and Clinician Marketing/Education:
• Direct to Patient via Amputee Coalition of America and National Pain Foundation
• Peer to Peer Marketing Education efforts– Grand Rounds, Symposia, Annual Medical Conferences
• $16,000 Purchase Price• 75% Gross Margin
CONFIDENTIAL 16
Platform Technology• Within the Chronic Pain Category, technology provides
for other applications for Chronic Post Surgical Pain including:– Hernia– Thoracotomy– Knee/Hip– Mastectomy
• ~ 170,000 – 400,000 patients a year = $2.7b – $6.4b annual market
Sources: HCUP Utilization Report 2006, NEJM - USA Today January 9th, 2009, National Center for Health Statistics; Joint Implant and Research Foundation; Musculoskeletal Report - msk.com
CONFIDENTIAL 17
Milestones - Investment Requirement
Safety Testing
First In Man Test
FTO
IDE – Quality Plan
Feasibility (5-10 patients)
US/Intl Patent Submissions
Product Refinement
Mgt Team Expansion
FDA Submission
Post Market Study (40 pts)
Launch
2009 2010 2011
$1.5mm $5-7mm
CONFIDENTIAL 18
Fundraising Status
• $1.5m Seed Round: $1.5m Pre-Money – $600k committed
• JumpStart • Case Tech Ventures• NCAF
– $900k Being Pursued• OTAF, QCA• Other investors• State of OH BRCP $750,000 Apr. 2009• US Army Med Rsch $1.5m Sep. 2009• SBIR $275,000 Nov. 2009
• $5 - $7 m A-round : Q2-2010
CONFIDENTIAL 19
Pro-Forma Financials
Projected (000's) For The Year Ending December 31st
2009 2010 2011 2012 2013 2014 2015 2016
Net Sales - - - $11,200 $22,400 $44,800 $89,600 $134,400
SGA - 210 210 5,760 10,480 17,960 32,140 46,370
SGA % - - - 51% 47% 40% 36% 35%
R&D 1,494 4,645 695 1,340 2,430 3,950 6,490 7,730
Contingency - - - 1,600 3,200 6,400 12,800 19,200
Total Expenses 1,494 4,855 905 8,600 16,110 28,310 51,430 73,300
Net Income (1,494) (4,855) (905) 2,500 6,290 16,490 38,170 61,100 Cash & Equivalents
1,500 6,000 1,145 8,000 10,500 16,790 33,280 71,450
Net Cash Flow 6 1,145 240 10,500 16,790 33,280 71,450 132,55
POTENTIAL EXITS
FDA
approval if 510k
Clinical Study + Launch
FDA Approval if PMA
Revenue Generating
CONFIDENTIAL 20
Exit Opportunities
NOTE: Transneuronix, Northstar Neuroscience, Enteromedics, and NDI activity were pre-FDA approval
Year Company Market Activity Price Revenue Revenue Multiple
2004 Advanced Bionics
Pain/Hearing Loss
Acquired by BostonScientific
$1.15b $82m 14x
2005 Advanced Neuromodulation Systems
Pain Acquired by
St. Jude Medical
$1.3b $145m 9x
2005 Transneuronix Obesity Acquired by Medtronic $250m Pre-revenue
-
2006 Northstar Neuroscience
Stroke IPO $110m raised
Pre-revenue
-
2007 Enteromedics Obesity IPO $40m raised
Pre-revenue
-
2008 NDI Medical Pelvic Health Product line acquired by Medtronic
$42m Pre-revenue
-
CONFIDENTIAL 21
Neuros MedicalNerve Block - Summary• Large and growing market
– Treatment of chronic pain in market with significant unmet needs– Future opportunities in other chronic pain applications
• Extensive NIH and BRTT funded research to date confirming proof of concept– Enables financially efficient and timely commercialization path
• Excellent revenue and profitability potential– Neutral to positive reimbursement precedent
• IP protection • Experienced Management Team• Strong exit opportunities (Clinical Trial, FDA Approval, Launch)
CONFIDENTIAL 23
Jon J. Snyder11000 Cedar AvenueCleveland, OH 44106
Tel: 216-658-3989Fax: 216-658-3998
Mobile: [email protected]
