Gregory A. BonfiglioProteus Venture PartnersSeptember 12, 2011

Stem Cells USA RM Congress:

Cord Blood Banking and Therapeutics

Boston, Massachusetts

CONFIDENTIAL 2

Proteus: An Investment and Advisory Firm Focused on Regenerative Medicine

Proteus, Inc.

Proteus Management, LLC

(Fund Management)

Proteus Insights, LLC

(Consulting Services)

Proteus Advisors, LLC

(Investment Banking Services)

Agenda

I. The Regenerative Medicine Market Key Market Metrics RM Therapeutic Applications

II. The Cord Blood Market Key Market Metrics Banking Other Tissues

III. Therapeutic Applications for Cord Blood Key Transplant Metrics Current Treatments Therapies in Clinical Development

CONFIDENTIAL 3

CONFIDENTIAL 4

Development of Regenerative Medicine

1968 – ALL patient irradiated, infused with identical twin BMT

1968 – ALL patient irradiated, infused with identical twin BMT

1973 – First unrelated bone marrow transplant

1973 – First unrelated bone marrow transplant

2001 – RhBMP-7 Approved

2001 – RhBMP-7 Approved

FDA Approves Dermagraft (2001)FDA Approves Dermagraft (2001)

1997 – Dolly the Sheep cloned; –FDA ApprovesCarticel (19997) & Apligraf (1999)

1997 – Dolly the Sheep cloned; –FDA ApprovesCarticel (19997) & Apligraf (1999)

1960s 1990s1970s 1980s 2000s

Source: Company websites, NIH, Pubmed

2005 Use of unrelated cord blood in BMT

2005 Use of unrelated cord blood in BMT

1963 – Mouse ASCs isolated1963 – Mouse ASCs isolated

1981 – Mouse ESCs Isolated1981 – Mouse ESCs Isolated

1998 – Human ESCs isolated

1998 – Human ESCs isolated

2007 – iPSCs from Humans

2007 – iPSCs from Humans

Current technologies build on 50 years of research

1993 – ViaCell Begins Banking Cord Blood

1993 – ViaCell Begins Banking Cord Blood

1989 – First Sibling Cord Blood Transplant (Gluckman)

1989 – First Sibling Cord Blood Transplant (Gluckman)

1986 – First Mouse Cloned1986 – First Mouse Cloned

RM Is Entering A New ERA

RM Market is Maturing: Key Metrics Rapidly Expanding Market:• $1.6B in 2010• $20.0B in 2025 • CAGR of 18.34%

Dramatic Revenue Growth• $130M in 2001• $1.6B+ in 2010

Worldwide funding for research Increasing• $2.5B Now• $14B in 10 Years

Clinical Programs • Over 3600 Clinical Trials• Over 400 ex-Oncology

Commercial Products • 400 on Market (Mostly Skin, Tools Media,

& Devices); – 900+ in Development

• 44 Cell Therapies on Market– $1B Revenues– 400 in Development– 28 in PIII/Pivotal Trials

1.2M+ Patients Treated with RM Products.

• 320K+ Cell Therapy Patients

RM Companies• 700+ Co’s involved in RM • 50+ Public Co’s;

– $8-$10B Total Market Cap • 250+ Private Co’s

CONFIDENTIAL 5

RM Market: Expanding Rapidly

CONFIDENTIAL 6

Cell Therapy Industry: Billion Dollar Global Business With Unlimited Potential; Regenerative Medicine; Chris Mason, David Brindley, Emily J Culme-Seymour & Natasha L Davie

Dramatic Cell Therapy Revenue Growth

CTI Revenues: $410M (2008) - $5.1B (2014)

RM Market: Global Company Distribution

5%

Asia32 firms

3%

Canada24 firms

56%

USA386 firms

14%

Europe (ex. UK)93 firms

UK133 firms

19%

2%

Middle East17 firms

700+ RM companies worldwide!

CONFIDENTIAL 7

Shire Acquires ABH for $750M

Big Pharma is Actively Engaged

GSK & HSCI: $25M Deal

Merck, Pfizer & Lily Launch Enlight BioScience

Pfizer RM Division: $111M Deal with Athersys (IBD); UCL (RPE); ViaCyte (Diabetes) GSK, AZN & Roche Help Launch Stem Cells

for Safer Medicine in UK

Johnson & Johnson Invests in Tengion & ViaCyte (NovoCell)

Genzyme & Osiris: $1.25B Deal

CONFIDENTIAL 8

GE & Cytori: StemSource

Cephalon & Mesoblast: $2B Deal

RM Business Models: Autologous v. Allogeneic

Autologous Model

Patients Own Cells/Tissue• Personalized Medicine

Advantages: • Easier Regulatory Path

(GTP)• No Immune Response

Challenges: • Difficult to Scale • High COGS

Allogeneic Model

Universal Cells in a Bottle• Big Pharma “Drug Model”

Advantages: • Scalable • Low COGS

Challenges: • More Difficult Regulatory

Path• Immune Response

CONFIDENTIAL 9

Service vs. Product

• Autologous Treatment for Prostate Cancer Using Dendritic Cells

-Centralized Processing • $93K per Treatment

-$1B+ Projected Revenues • $5.0B Market Cap (Until Aug 3, 2011)

Agenda

I. The Regenerative Medicine Market Broad RM Market: Key Metrics RM Therapeutic Applications

II. The Cord Blood Market Cord Blood Market: Key Metrics Banking Other Tissues

III. Therapeutic Applications for Cord Blood Key Transplant Metrics Current Treatments Therapies in Clinical Development

CONFIDENTIAL 10

Cord Blood Market: Key Metrics

Cord Blood Market Metrics

Market Size:• $3.4B (2010)• $14.9B (2015) • CAGR: 27.9%

Cord Blood Banks:• 150+ Private Banks• 44 Public Banks • 26 Countries

Total Cord Blood Units Stored• 500,000 Units in Public Banks • 1M+ Units in Private Banks

Market Penetration • 1-6% of All Births (varies by

country/region)

Average Fees: Private Banks • $1,750 Initial Collection & Storage

– Range: $890 - $2300• $125 Annual Fee

– Range: $85-$150

Average Fee: Public Banks• $35,000 per Unit (US/EU)

Public Bank Utilization Rate:• 1-3% of Units per year

CONFIDENTIAL 11

Cord Blood Market: Key Metrics

Cord Blood Market Metrics

Total Cord Blood Transplants: 25,000 in 43 Countries • 1,500 per year (2005)• 3,000 per year (2010) • 10,000 per year (2015)

50% of All Patients Seeking a BM/PBSC Transplant Cannot Find a Match

Fastest Growing Segment of Cell Transplant Market

• 22% of All Cell Transplants in 2010• 40% by 2015

Regulatory Framework• Regulated as a “Biologic” by FDA/EMA• By October 2011, All Cord Blood Banks

Must be Licensed (BLA)

Therapeutic Applications• 60+ in Clinical Practice• Leukemia; Lymphoma; Blood

Disorders; Hematopoietic Restoration

Clinical Trials • Over 600 FDA Clinical Trials

– 425+ New Therapies – 57 Pivotal/PIII Trials

CONFIDENTIAL 12

Cord Blood Therapies in Clinical Development: 600+ Ongoing FDA Trials

CONFIDENTIAL 13Source: ClinicalTrials.gov (www.clinicaltrials.gov)

Banking Other Tissues

• Wharton’s Jelly/Entire Cord • CHORI Technology (www.chori.org)

• Placental Tissue (MSCs) • Pluristem Therapeutics, Inc. (www.pluristem.com) ; LifebankUSA (

www.lifebankusa.com)

• Amniotic Fluid (MSCs & HSCs)

• Biocell Center (www.biocellcenter.com)

• Autologous Marrowized Bone• Arnie Caplan (Cell Bank Technologies)

• iPS Cell Lines• Shinya Yamanaka (Japan)/Janet Rossant (Toronto); iPerian (

www.ipierian.com)

CONFIDENTIAL 14

Banking Other Tissues

• Peripheral Blood/Bone Marrow• Stem Cell Assurance, Inc. (www.stemcellassurance.com)• StemCor - Marrow-Miner

• ALDH Cells (Hematopoietic Stem And Progenitor Cells)• Aldagen (www.aldagen.com)

• Adipose Derived Mesenchymal Cells (MSCs) • Cytori (www.cytori.com); GE Healthcare • Stem Cell Assurance, Inc. (www.stemcellassurance.com)

• Menstrual Blood • CryoCell (www.cryo-cell.com)

CONFIDENTIAL 15

Agenda

I. The Regenerative Medicine Market Key Market Metrics RM Therapeutic Applications

II. The Cord Blood Market Key Market Metrics Banking Other Tissues

III. Therapeutic Applications for Cord Blood Key Transplant Metrics Current Treatments Therapies in Clinical Development

CONFIDENTIAL 16

Current Therapeutic Applications for Cord Blood Market

• 25,000 + Cord Blood Transplant To Date

• 3000+ Transplants in 2010o 9% Increase over 2009o 100% Increase (2X) over 2005

• 10,000 Transplants per year projected by 2015o CAGR: 49.3%

• Multi-Cord Transplants Increased 25% in 2010

• 60+ Diseases Treated

CONFIDENTIAL 17

Key Metrics

Cord Blood Therapeutics: Comparison with Bone Marrow

Confidential 18

Cord Blood v. Bone Marrow

Donor Morbidity

HLA Match Required

Units Available

Search Time

2nd or Double Graft

Engraftment Time

GvHD Risk

Ethnic Match

Cord Blood

None 4/6550,000Units

1 Day Yes 26 Days Minimal Easier

Bone Marrow

50%8/810/10

14.6MDonors

3-4 Months

Possible if donor is available

18 Days 50% Difficult

Cord Blood Transplants Have Doubled In Last 5 Years (NMDP Data)

CONFIDENTIAL 19

Cord Blood Is the Preferred Cell Source for Pediatric Patients (NMDP Data)

CONFIDENTIAL 20

Adult Patients Are the Fastest Growing Population: 58% 0f 2010 Cord Transplants

CONFIDENTIAL 21

0

200

400

600

800

1,000

1,200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0-17 18+

Cord Blood Transplants By Patient Age (NMDP Data)

Transplant Outcomes Have Improved Dramatically in Last 5 Years

CONFIDENTIAL 22

• Improved HLA Matching;

• Advances in Conditioning Regimes; KEY FACTORS

• Advances in Post-Transplant Supportive Care

Report Year Period One-Year Survival

2008 2002-2006 54.0%

2007 2001-2005 51.5%

2006 2000-2004 48.8%

2003 1996-2001 42.2%

Clinical Outcomes Related to Quality of Tissue & Match

Quality of Tissue• TNC Count (150+)• CD34+ Count • Size of Unit

Matching Criteria • HLA Match (4/6 Min)• Race & Ethnicity Match • Genetic Match (DNA tissue typing)

CONFIDENTIAL 23

Key Metrics

Cord Shipments By TNC Count for Adults

CONFIDENTIAL 24

0

200

400

600

800

1,000

1,200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

150+

125-149

90-124

<90

Most Units (77%) for Adults Had TNC >150 (NMDP Data)

82% of all 2010 shipments came from 31% of the available inventory. (NMDP Data)

Less than 12518%

Greater than or equal to

12582%

TNC of Shipments -CY 2010

Less than 12569%

Greater than or equal to

12531%

TNC of Inventory as of June 30, 2010

Public Bank Utilization Rates: 2010 Inventory and Shipments

CONFIDENTIAL 25

Current Therapeutic Applications for Cord Blood

60+ Diseases Treated• Leukemias And Lymphomas, Including:

– Acute Myelogenous Leukemia

– Acute Lymphoblastic Leukemia• Multiple Myeloma And Other Plasma Cell Disorders• Severe Aplastic Anemia And Other Marrow Failure States, Including:

– Severe Aplastic Anemia

– Fanconi Anemia • SCID And Other Inherited Immune System Disorders, Including:

– Severe Combined Immunodeficiency (SCID, All Sub-types)

– Wiskott-aldrich Syndrome • Hemoglobinopathies, Including:

– Beta Thalassemia Major

– Sickle Cell Disease

CONFIDENTIAL 26

Diseases Treated: Hematologic Malignancies (NMDP Data)

CONFIDENTIAL 27

Diseases Treated:Non-Malignant Disorders (NMDP Data)

CONFIDENTIAL 28

FDA Trials Involving Cord Blood Address Numerous Conditions & Diseases

Source: ClinicalTrials.gov (www.clinicaltrials.gov)

• Bacterial and Fungal Diseases• Behaviors and Mental Disorders• Blood and Lymph Conditions• Cancers and Other Neoplasms• Digestive System Diseases• Diseases and Abnormalities at or

before Birth• Ear, Nose, and Throat Diseases• Eye Diseases• Gland and Hormone Related

Diseases• Heart and Blood Diseases• Immune System Diseases• Wounds and Injuries

• Mouth and Tooth Diseases• Muscle, Bone, and Cartilage Diseases• Nervous System Diseases• Nutritional and Metabolic Diseases• Parasitic Diseases• Respiratory Tract (Lung and Bronchial)

Diseases• Skin and Connective Tissue Diseases• Substance Related Disorders• Symptoms and General Pathology• Urinary Tract, Sexual Organs, and

Pregnancy Conditions• Viral Diseases

CONFIDENTIAL 29

CONFIDENTIAL 30

APPENIDX

NMDP Data

CONFIDENTIAL 31

NMDP Data

CONFIDENTIAL 32

NMDP Data

CONFIDENTIAL 33

Adult Patients Are the Fastest Growing Population: 58% 0f 2010 Cord Transplants

CONFIDENTIAL 34

The Promise of Regenerative Medicine

To Regenerate Heart MuscleTo Replace Entire Organs

CONFIDENTIAL 35

Paralyzed Rat(double click to see video)

Paralyzed Rat Walks(double click to see video)

To Heal Acute Spinal Cord InjuryTo Cure Vision DisordersTo Cure Diabetes

Tools for Drug Discovery

Gartner’s Hype Cycle of Emerging Technologies

CONFIDENTIAL 36

Technology Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightment

Plateau of Productivity

Time

Visibility

RM Market: On 2nd Half of the Gartner Curve

Stage of Development

Visibility

Technology Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightment

Plateau of Productivity

1980 Early TE research (MIT)

1986 ATS and Organogenesis founded

1988 SyStemix founded

1992 Geron founded

1997 First FDA approved cell therapy (Carticel)

1997 Dolly the sheep

1998 Human ESCs first derived

1999 First FDA approved TE product (Apligraf)

1999 TE bladders in clinic

2000 Time Magazine:TE No. 1 job

2001 Bush “partial ban” on HESCs

2001 Dermagraft FDA approved

2001 Ortec FDA approved

2001: 3300 jobs, 73 firms, mkt cap > $2.5B

2002 ISSCR Founded

2002 ATS + Organogenesis file Chapter 11

Time

2009 Obama Ends Ban on hESCs

2007 iPS Technology Developed

2005 CIRM Founded

2003 UK Stem Cell Bank Formed

CONFIDENTIAL 37

2010 Dendreon’s Provenge Approved

2010 Cephalon & Mesoblast $2B Deal

Nov 2008 Genzyme-Osiris $1.25B Deal

2011 Shire Acquires ABH -$750M

2007 Apligraf - 200,000 Patients Treated2006 Carticel - 10,000 Patients Treated