Investor Presentation GUY COOK CEO

Transcription

1 Investor Presentation GUY COOK CEO

2 FORWARD LOOKING STATEMENTS This presentation contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as continue, efforts, expects, anticipates, intends, plans, believes, estimates, projects, forecasts, strategy, will, goal, target, prospects, potential, optimistic, confident, likely, probable or similar expressions or the negative thereof. These forward-looking statements are based on current expectations or beliefs and include, but are not limited to, statements about the Company s future performance. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: the Company s ability to manage cash flow and achieve profitability; the Company s ability to develop, market, sell and distribute desirable applications, products and services and to protect its intellectual property; the ability of the Company s customers to pay and the timeliness of such payments; the Company s ability to obtain financing as and when needed; changes in consumer demands and preferences; the Company s ability to attract and retain management and employees with appropriate skills and expertise; the impact of changes in market, legal and regulatory conditions and in the applicable business environment, including actions of competitors; and other factors. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. 2

3 OUR FOCUS TISSUE REPAIR BONE CARTILAGE herniated disk torn meniscus SKIN breast reconstruction chronic sores 3

4 4 THINGS TO KNOW ABOUT THE TISSUE REPAIR MARKET $3B high barriers to entry low standard of care rapid regulatory approval process catch (k) HUGE MARKET RIGHT CONDITIONS FOR INNOVATION TO HAVE AN ENORMOUS IMPACT LOW RISK LOW COST 4

5 510(K) VS. PMA METHOD 510(k) (Premarket Notification) Lattice technology qualifies Much simpler process Massive cost savings Fasttracked release REQUIRED FOR Class I & II Devices Class III Devices TESTING Premarket Approval (PMA) No clinical trial data required Preclinical and clinical trials required COST $500,000 per filing (on average) Over $50 Million per filing (on average) 90-day Premarket Notification filing before commercial release TIMELINE PMA is the most stringent type of device marketing application required by FDA. Multiple years of testing and filings before commercial release Leveraging the fastest, most affordable delivery 5

6 MANUFACTURING SCAFFOLD Cadaver bone material Detergents, Cleaning, Separation (all cells removed) 200 allograft products pins disks shafts rings wraps wedges blocks strips struts heads tendons latas meniscus spacers fusions spacers 6

7 PRODUCT LINE CONCENTRATION 200 to Improve margins and cash flow 2 Key tactic in our go-to-market strategy 7

8 OUR LEAD PRODUCTS DBM PUTTY Tissue grafting solution $425M opportunity Mixture of finely ground, demineralized cortical bone powder and gelatin Common Applications: Spinal fusions, podiatric reconstructions, oral / maxillofacial reconstructions, orthopaedic reconstructions Now manufactured in-house for increased profit margins. DERMIS For breast reconstruction Acellular Collagen Scaffold created from human dermis Common Applications: breast reconstruction post mastectomy, diabetic foot ulcers, chronic wounds, and burns $400M opportunity $100 per cc $10,000 per treatment 80-85%: gross margin 85%: gross margin 5-YEAR SHELF LIFE 8

9 EXECUTING OUR STRATEGY DBM PUTTY Tissue grafting solution Marketing and selling through Key Opinion Leaders (KOL s) DERMIS For breast reconstruction 10 KOLs [ 3 KOLs contracted ] 10 KOLs [ 6 KOLs contracted ] $1M / KOL / year Oct 2014 Apr-Aug 2015 Jun 2015 Jun 2015 Aug 2015 Physician recruitment Hospital approval Secure inventory Dermis launched DBM Putty launch 9

10 PROGRESS ON OUR STRATEGY Market Access Partners: Critical to product development and growth. Provide clinical feedback to improve technology. Promote use of our existing and future products. We are transitioning our manufacturing focus from legacy products to new, higher margin products. The relationships being established with our Market Access Partners are an important key to ensuring a successful launch of new products and technologies. Successfully secured a strong build-up of inventory required for new technologies, reducing future cash outflows. Poised to capitalize on significant retail potential. Market Access Partners DBM Putty KOLs contracted: 3 Legacy products gross margin: 25-35% DBM Putty inventory: $6.0 M Manufacturing Dermis KOLs contracted: 6 DBM Putty and Dermis gross margin: 80-85% Inventory Build-up Dermis inventory: $5.3 M 10

11 GROWING OUR BUSINESS $36M Dermis DBM Putty Legacy

12 NOT OUR FIRST RODEO BACTERIN: Guy Cook - CEO [ Technical Expert & Entrepreneur ] Led Bacterin International Inc. (AMEX:BONE) from a start-up to a publicly traded company, $400 million market cap. Increased revenues from $7.8MM (2009) to $30.1MM (2012). 18+ years experience in tissue engineering field. $7.5M Similar runway $33M 20-50% growth rates Gregory Davis - COO [ Chief Operating Officer ] Expert experience leading organ procurement organizations and eye and tissue banks. Results-focused leader for operations management, strategic planning, regulatory compliance, cost containment initiatives., effective work team development to maximize productivity, quality improvement Christopher Bradley, Ph.D. [ Product Development Director ] Published researcher in biochemistry, molecular biology and medicine, cellular protein synthesis, and translation. 10 years experience in research academia, 3 years in industrial chemistry quality control. $2 MILLION INVESTED BY MANAGEMENT 12

13 LATTICE BIOLOGICS INNOVATION 13

14 LOOK FAMILIAR? As we age, our ability to heal decreases BONE SKIN CARTILAGE 14

15 AGE-RELATED FUNCTIONAL DECLINE 15-YEAR-OLD STEM CELLS active 65-YEAR-OLD STEM CELLS dormant 15

16 OUR INNOVATION: EXTRACELLULAR MATRIX (ECM) Stem cells harvested from youthful donors Amplified Growth factors film-like substrate U.S. Patent Application: MODIFIED EXTRACELLULAR MATRIX FOR ENHANCED STEM CELL HOMING AND ENGRAFTMENT 16

17 EVIDENCE: ECM ENCOURAGES REGENERATION YEARS HUMAN EQUIVALENT* YEARS HUMAN EQUIVALENT* high activity original high activity AFTER EXPANSION high activity control no activity high activity young ECM treated medium activity low activity old ECM treated no activity [ source: The Jackson Laboratory at ] 17

18 THINK: PRESSURE-TREATED WOOD UNTREATED WOOD vs. TREATED WOOD Compromised by the elements Durable, Longer Lasting Rotted decks, fences, docks 18

19 LIMITATIONS OF TRADITIONAL TISSUE SCAFFOLD 1. undirected scaffolds - just space fillers 2. do not regenerate properly 3. do not encourage natural healing or regeneration 19

20 OUR VALUE PROPOSITION FOR PATIENTS Scaffold ECM Matrix Superior Scaffold + = Directed scaffold Regenerates properly Promotes natural healing 20

21 PRODUCT PIPELINE Product ) DBM Putty 2) DERMIS FCS FCS First Commercial Sale (FCS) 3) Bone Putty + ECM 4) Bone Scaffold + ECM 5) Skin + ECM 6) Cartilage + ECM 510(k) Filed Review FCS 510(k) Filed Review FCS 510(k) Filed Review FCS 510(k) Filed Review FCS Superior products fast to market 21

22 PRO-FORMA CALENDAR FINANCIALS 22

23 MONTHLY PROGRESS $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 ($200,000) ( Jul - '15 ) ( Aug - '15 ) ( Sep - '15 ) ( Oct - '15 ) ( Nov - '15 ) ( Dec - '15 ) ( Jan - '16 ) ( Feb - '16 ) ( Mar - '16 ) ( Apr - '16 ) ( May - '16 ) ( Jun - '16 ) Actuals Forecasted Revenue EBITDA 23

24 PRO-FORMA CAPITALIZATION Issue/ % Own Shares Ex. Price Basic RTO 4,024,214 $ % Financing 3,666,666 $ % Lattice Vend In 34,000,000 $ % Convertible Debenture 1,764,184 $ % Basic - Total 43,455, % Financing Warrants 1,833,333 $0.60 Grenville Warrants 500,000 $0.60 $110,000 monthly average burn rate in H Sept 2015 EBITA neutral October 2015 achieve positive run-rate EBITDA FD - Total 45,788,397 $1 Million: funds commercial launch of 2 new products 24

25 TISSUE REPAIR: A TARGET-RICH MARKET US$MM Date Acquiror Target Transaction LTM Implied Value Revenue EV/Revenue 7/31/15 X-spine Systems Bacterin International Holdings, Inc. $65.0 $80.0 N/A (merger) 6/25/2015 Integra LifeSciences TEI Biosciences $312.0 $ x 10/23/2014 Globus Medical Transplant Technologies $51.1 $ x 12/21/2010 MiMedx Group Surgical Biologics $14.3 $ x 8/16/2010 Medtronic Osteotech $135.2 $ x 5/8/2008 NuVasive Osiris Therapeutics (Osteocel Biologics Business) $85.0 $ x 25

26 EXCITING AND DOABLE OPPORTUNITY to 2 $3B KOL $36M 53% 4-year CAGR $6M Licensed facility Dermis April 2015 / DBM Putty August 2015 Huge market Incentivized market access partners Growth Differentiated, superior, scalable products 26

27 THANK YOU! CONTACT: Lattice Biologics, Inc N 90th Street Ste#101 Scottsdale, AZ Guy Cook - CEO GCook@latticebiologics.com Cheryl Farmer - CFO Director, Strategic Accounts CFarmer@latticebiologics.com COMING SOON! Lattice Biologics, Ltd. will be traded as TSX-V:LBL 27