www.glytrix.com Confidential Business Plan January 2010 Prepared By: John Paderi, Kate Stuart, and Joshua Cox Copyright © 2009 Glytrix Inc CONTACTS For further information please contact John Paderi CSO, Glytrix Inc. 207 S. Martin Jischke Drive DLRC Suite 103 West Lafayette, IN 47907 Tel: 513-289-1727 Fax: 765-496-1459 Email: jpaderi@glytrix.com DOCUMENT CONTROL Document no. GlytrixBP2010.01 released 11 Jan 2010 All rights reserved. The information contained in this document is confidential and may also be proprietary and trade secret. Without prior written approval from Gltyrix Inc no part of this document may be reproduced or transmitted in any form or by any means, including but not limited to electronic, mechanical, photocopying, or recording or stored in any retrieval system of whatever nature. Use of any copyright notice does not imply unrestricted public access to any part of this document. Pelladerm is a trademark of Glytrix Inc. Copyright © 2010 Glytrix Inc Copyright © 2010 Glytrix Inc Page i Management Team John Paderi, Ph.D. - President, Founder, CSO Inventor of Glytrix technology, 7 years tissue engineering/biomaterial R&D Kate Stuart, Ph.D. - Founder, COO 7 years tissue engineering/biomaterial R&D Scar-Free Healing Scarring of the skin is currently an inevitable consequence of deep dermal wounds. Glytrix is addressing this large and unmet market through its lead product Pelladerm, which promotes scar-free healing of these dermal wounds. After seeing Pelladerm results illustrated in part below, one plastic surgeon reported, “I am ashamed that we have not yet developed this type of product; [Pelladerm] should be used in every surgery.” Joshua P. Cox - Business Advisor Marketing and Finance Specialist Alyssa Panitch, Ph.D. - Founder, Scientific Advisor Founder and CSO of two companies, Associate Head of Weldon School of Biomedical Engineering at Purdue University Primary Contact John Paderi: jpaderi@glytrix.com ║ (513) 289-1727 • Preventing Dermal Scarring: Clinical and Market Need In the U.S. annually, there are over 42 million patients who could benefit from Pelladerm, a therapeutic aimed at preventing scar formation. Scars are of high patient concern, often higher than successful outcome of a surgical procedure. According to Kalorama Information, scar prevention has been overlooked, though the potential is ‘huge’ as there is no standard of treatment for scars. Pelladerm is a novel therapeutic, positioned to be the first FDA approved product for scar prevention. No Treatment • Pelladerm is applied at the time of injury as a single treatment. Wounds treated with Pelladerm have shown a 40% reduction in visible scar and a 65% increase in tissue strength in animal studies. Due to reimbursement, Glytrix will focus first on entering the elective cosmetic surgical market, a market of 1.8M procedures in the US annually. Glytrix will target additional markets, including trauma injuries, after two years of sales in the cosmetic market when insurance codes are obtained. Pelladerm Treatment Above: skin tissue images from animal studies show scar free healing potential of Pelladerm in incisional wounds. • • • • • Glytrix’s Technology Glytrix has developed a platform technology, termed collagen-binding peptidoglycans, for needs in tissue healing and regeneration Technology derives from natural tissue components critical to tissue structure and healing Lead therapeutic, Pelladerm, restores healthy tissue environment leading to scar free healing Low cost synthesis with design control Technology tailorable for many applications in Glytrix’s pipeline Competition and Glytrix Advantage Few products currently exist for treatment of existing scars, while the market for scar prevention is unique in the field. Pelladerm has a significant advantage over the potential competition as it will quickly reach the market following a device approval pathway. Additionally, standard of care for wounds is not altered with application of Pelladerm. Competitors include: • • • Mederma: Scar treatment OTC, multiple use, efficacy disputed, no FDA approval Renovo: TGF-β targeting therapeutics, FDA drug regulation, many Phase II clinical trials, 1 Phase III for small indication only Capstone Therapeutics: Peptide therapeutic, FDA drug regulation, Phase II clinical trials IP and Regulatory Strategies The FDA has designated Pelladerm a device due to its mode of action, and Pelladerm will follow the de novo 510(k) class II device pathway to approval. Glytrix’s intellectual property is currently protected through one over-arching PCT application filed in March 2009, that protects the platform technology composition of matter and methods of use. Additional applications will be filed as new compositions of matter and methods of use are developed. Future Funding Requirements AMIPurdue is providing over $600k in funds through May 2010 for completion of the following milestones: • GMP synthesis • FDA preclinical safety data • First in man safety study Glytrix is seeking $4.7M over three years to fund clinical trials, sales and marketing, product scale-up, and market launch of Pelladerm. COGS: $8 Sale Price: 2010 Total Procedures 1,800 Market Share 0.00% Units Sold 0 Net Revenue $0 Break Even: Q4 2012 (in thousands) $200 Market Growth: 3% 2011 2012 2013 2014 1,854 1,910 1,967 2,026 0.00% 4.00% 18.00% 25.00% 0 76 354 506 $0 $9,166 $42,485 $60,777 Necessary Funding: $4.7M Table of Contents Executive Summary........................................................................................ii I. Business Summary ....................................................................................1 A. Mission ..................................................................................................... 1 B. Milestones Completed ................................................................................ 1 C. Timeline and Milestones to Market ............................................................... 1 D. Organization and Location .......................................................................... 1 E. Financial Brief ........................................................................................... 1 II. Product Summary.....................................................................................2 A. Dermal Scarring: An Unmet Need ............................................................... 2 B. Glytrix's Advantage Over Competition .......................................................... 2 C. Product Overview: Pelladerm......................................................................3 D. Preclinical Data: Efficacy of Pelladerm in Preventing Dermal Scarring................3 E. Pelladerm Technology: Collagen-Binding Synthetic Peptidoglycans ..................6 F. Glytrix's Platform Technology.......................................................................6 III. The Market..............................................................................................8 A. The Customer ........................................................................................... 8 B. The Market Opportunity.............................................................................. 8 1. Cosmetic and Reconstructive Surgery Market ........................................... 8 2. General Surgery Market: C-Sections and Trauma ..................................... 9 C. Industry Analysis and Forecast ................................................................. 10 1. Scar Revision Surgery ......................................................................... 10 2. Over the Counter ................................................................................ 10 3. Emerging Therapies ............................................................................ 10 D. Future Markets: Burns and Hypertrophic Scars ........................................... 11 E. Future Markets: Balloon Antioplasty Application ......................................... 12 IV. Glytrix's Strategy ...................................................................................13 A. Milestones Completed .............................................................................. 13 B. Milestones to Complete ............................................................................ 13 i. Pelladerm 510(k) Approval ................................................................... 15 a. Purity, Stability, Biocompatibility, and Sterility Testing....................... 15 b. Clinical Safety Study ..................................................................... 15 c. 510(k) Application ........................................................................ 15 C. Entry to Market ...................................................................................... 15 D. Production ............................................................................................. 16 E. Marketing .............................................................................................. 16 F. Sales Strategy ........................................................................................ 16 G. Distribution Strategy............................................................................... 16 H. Pricing Strategy ..................................................................................... 17 I. Exit Strategy .......................................................................................... 17 J. Risks of Failure ....................................................................................... 17 K. Intellectual Property Considerations .......................................................... 17 V. Management Team ..................................................................................18 A. Personnel Plan ....................................................................................... 20 VI. Financial Analysis ..................................................................................21 A. Necessary Funding ..............................................................................22 Copyright © 2010 Glytrix Inc Page iv List of Figures and Tables Figure 1: Cosmetic Appearance of Wounds ...................................................4 Figure 2: Histological Evaluation of Wounds .................................................5 Figure 3: Breaking Strength of Wounds.........................................................5 Figure 4: Competitive Landscape................................................................11 Table 1: Comparison of Decorin to Glytrix's Peptidoglycan Technology .........6 Table 2: Elective Surgical Procedures Performed Annually in the U.S. ...........9 Table 3: Key Milestones Over the Next 5 Years ...........................................14 Table 4: Personnel to be Hired ....................................................................20 Table 5: Market Opportunity .......................................................................22 Table 6: Expenses .......................................................................................22 Table 7: Cash Flow ......................................................................................22 Copyright © 2010 Glytrix Inc Page v I. Business Summary Mission Glytrix is dedicated to improving quality of life by solving pressing healthcare needs through responsible scientific discovery and development leading to innovative and effective therapeutics. • • Positioned to be the first FDA approved product to prevent scarring of the skin Platform technology amenable to wide product range in the pipeline o Burn injury: prevent hypertrophic scarring o Balloon angioplasty: targeting early stage thrombosis and restenosis Milestones Completed • Preclinical efficacy of Pelladerm in preventing scar formation • Pelladerm synthesis and characterization procedures completed • Pelladerm purity and degradation tests identified and procedures drafted • Contract manufacturing organization for cGMP synthesis of Pelladerm identified • Site for clinical safety study for Pelladerm identified • Research proof-of-concept for balloon angioplasty application obtained Timeline and Milestones to Market Key Milestones 1 2010 2 3 4 1 2011 2 3 4 1 2012 2 3 4 CMO GMP Synthesis Purity/Stability/Biocompatibility IRB Approval Human Clinical Study - Safety FDA - De Novo 510(k) Submission SALES - cosmetic market Organization and Location Glytrix is a startup company, and is currently affiliated with the Purdue Research Foundation. The company will move to Research Park in Q3 2010. The Purdue Research Foundation is a nonprofit organization created to assist Purdue through programs and facilities such as Purdue Research Park. Financial Brief Glytrix is seeking $4.7M in funding over the next 3 years to bring its first product, Pelladerm, to market. An additional $2M is requested to fund all preclinical testing for Glytrix’s second indication, to prevent early stage thrombosis and restenosis after balloon angioplasty. Glytrix expects to break even in Q4 2012, with net revenues over $60M by 2014. Copyright © 2010 Glytrix Inc Page 1 II. Product Summary Dermal Scarring: An Unmet Need Glytrix has developed a platform technology for tissue healing and regeneration. The lead product of Glytrix’s platform is Pelladerm, which is a therapeutic for preventing scarring of the skin. Scarring is currently an inevitable consequence of deep dermal wounds, such as those resulting from surgery, trauma, or burns. Scars can compromise physical appearance leading to debilitating aesthetic and psychological effects. There is a high consumer demand for preventing and reducing scars; according to the Mattson Jack group, there are over 42 million procedures annually in the US alone that could benefit from a product that reduces or prevents dermal scarring. Kalorama Information, a medical market research group, has detailed the wound care market and noted that scar prevention has been overlooked, though the potential is ‘huge’ as there is no standard of treatment for scars. A detailed breakdown of the market is presented in Section III. The Market (page 8). Scarring is of high importance to the patient, often reported as greater concern than the successful outcome of surgical procedures, yet to date there are no FDA approved products available that have produced consistent results for preventing, reducing, or eliminating scars. In fact, after seeing preclinical data on Glytrix’s lead product, Pelladerm, one plastic surgeon reported, “I am ashamed that we have not yet developed this type of therapeutic; [Pelladerm] should be used in every surgery performed.” Glytrix’s Advantage Over Competition There is currently no standard of treatment for dermal scarring. There are several homeopathic and over-the-counter remedies available directly to the consumer, which advertise reduction in scar appearance after use over several weeks or months. None of these products prevent the formation of the scar, but are rather marketed to reduce the appearance of scars already formed; however, efficacy of these products is disputed in the scientific and clinical communities, and without FDA approval, these products are not well supported by physicians. Still, sales of overthe-counter remedies are growing, illustrating the demand for such products despite the lack of support of efficacy. In fact, Michael Dolyk, Buyer for OTC and Health and Beauty care for Medic Drug Inc. reported, “Scar reduction products are one of the few things really moving right now. They are the most innovative things out there.” As scarring of the skin remains a large and unmet clinical need, it is also being targeted by competitors aiming for FDA approved products supporting scar reduction and prevention. These companies are focused on affecting cellular pathways to reduce deposition of scar tissue. Pelladerm is unique in that it instead focuses on restoration of the healthy tissue environment for proper healing. It is well known that the tissue environment affects cellular behavior and the resulting healing response. Glytrix’s technology works to restore a healthy tissue environment, which promotes efficient and effective healing, significantly preventing and reducing scar tissue formation. Glytrix has a significant advantage over competing companies in the development phase of its product. Pelladerm will follow the de novo 510(k) Class II device pathway, while competing Copyright © 2010 Glytrix Inc Page 2 technologies aimed at affecting cell function require FDA approval through the drug pathway. This strategy gives Pelladerm high probability of success to market. After approval, anticipated by Q2 2012, Glytrix will first market its therapeutic in the cosmetic market, allowing Glytrix to respond to the huge, unmet need of scar reduction. Product Overview: Pelladerm Glytrix is responding to the unmet need of preventing scar formation through the development of Pelladerm. Pelladerm is the lead product in Glytrix’s platform technology, designed to improve adult tissue healing and regeneration. The technology is a novel class of molecules termed peptidoglycans, which are derived from natural tissue components and engineered for target applications. Glytrix’s peptidoglycan therapeutics are a unique approach to healing in that they aim to restore a healthy tissue environment to promote proper healing, setting Glytrix apart from the competition primarily focused on directly targeting cells and cell function. Pelladerm is designed to fit within current surgical practices and with the surgeon’s ease of use in mind. Pelladerm is supplied as a sterile solution that can be easily applied as single dose treatment at the time of injury, followed by standard of care for wounds. This method of use does not require any changes to current wound care practices, while offering superior cosmetic outcome. Cost efficient production of Pelladerm makes its use feasible as either an optional or built in procedural cost. It is anticipated that Pelladerm will substantially improve clinical outcomes and will change the current expectations of scar formation in general and cosmetic surgeries as well as in treatment of trauma and burn injuries. The ease of use without changing standard of care for wounds, coupled with strong efficacy in preventing dermal scarring, position Pelladerm well for the first product of its kind and warrant further development for FDA approval. Preclinical Data: Efficacy of Pelladerm in Preventing Dermal Scarring Preclinical data in a small animal model demonstrate the efficacy of Pelladerm in mitigating dermal scarring as measured by cosmetic, histological, and mechanical strength assessment. In this model, a surgical incision was made, and Pelladerm was applied prior to suturing the wound closed. Pelladerm is delivered in a hyaluronic acid (HA) solution, which acts as a viscous carrier of the peptidoglycan. Untreated and HA vehicle treated wounds were also compared as proper controls for the study. Cosmetic appearance results, illustrated in Figure 1 below, show that a single dose of Pelladerm results in a 40% decrease in visible scar. The cosmetic appearance was quantitatively assessed as observers blinded to treatment conditions measured the visible scar length. The improved cosmetic appearance was supported by histological evaluation of the wound tissue, which is presented in Figure 2 below. Histological evaluation is often considered the most compelling data as it unequivocally demonstrates tissue differences between healthy scar free healing compared to scar tissue. As such, a board certified pathologist examined and graded tissue samples, concluding a significant improvement in tissue maturity and restoration of healthy tissue in wounds treated with Pelladerm. A third metric of improved healing and reduction in scarring was also used to further support the efficacy of Pelladerm in scar prevention. FDA guidelines for developing products for treating burns and ulcers suggest the breaking strength of incisional wounds as an indicator of Copyright © 2010 Glytrix Inc Page 3 improved healing, as scar tissue will have weaker breaking strength due to the poorly organized collagen fibers in the scar tissue. Following these guidelines, and shown in Figure 3 below, Glytrix found that wounds treated with Pelladerm had more than a 60% increase in breaking strength compared to control. These results further support the efficacy of Pelladerm for scar prevention. Visible Scar Length (in) 1 * 0.5 0 Untreated Vehicle control (HA) Pelladerm Figure 1. Cosmetic Appearance of Wounds. Single dose application of Pelladerm results in a 40% decrease in visible scar. * Denotes statistical significance. Copyright © 2010 Glytrix Inc Page 4 1 mm Untreated Vehicle Control Intact Skin Figure 2. Histological Evaluation of Wounds. Wound area is marked by black arrows. Pelladerm treatment results in more mature and healthy tissue, noted by mature collagen fibers and decreased wound area as compared to immature tissue of untreated and vehicle control treated wounds. Intact uninjured skin is included for comparison. 15 Ultimate tensile strength (N) * 10 5 0 Untreated Vehicle control (HA) Pelladerm Figure 3. Breaking Strength of Wounds. Following FDA guidelines for assessment of improved dermal healing, wounds treated with Pelladerm result in approximately 60% increase in breaking strength. * Denotes statistical significance. Copyright © 2010 Glytrix Inc Page 5 Pelladerm Technology: Collagen-Binding Synthetic Peptidoglycans Pelladerm was inspired by the native molecule decorin, and is considered a biomimetic therapeutic. Pelladerm is designed to improve wound healing by restoring a healthy tissue environment, which in turn leads to healthy scar free healing. Decorin is in a class of molecules known as proteoglycans and is the most prevalent proteoglycan in the skin. Decorin has important implications in the wound healing process, especially by regulating collagen organization. Collagen is the major tissue component of skin, and in healthy tissue, is organized into uniform and regular fibers. Decorin plays a critical role in dermal healing; for example, increased decorin levels correlate with accelerated dermal healing and improved cosmetic outcome, while decorin deficiencies result in impaired dermal healing. Decorin has been suggested as a therapeutic for reducing scar formation; however, decorin is costly to purify since it exists in animal tissues in small quantities, making its wide spread use in wound healing impractical. Table 1 below compares decorin to Glytrix’s peptidoglycan technology, illustrating similarities for tissue healing function and how therapeutic use of decorin is not practical. Glytrix has developed a feasible alternative therapeutic, stemming from its platform technology, in the form of a collagen-binding synthetic peptidoglycan that mimics decorin. The peptidoglycan which makes up Pelladerm is an engineered molecule, inspired by decorin, composed of naturally derived tissue components. Specifically, it is composed of the polysaccharide chain, dermatan sulfate, with covalently attached collagen-binding peptides. Detailed information of composition and function are available upon request. Pelladerm mimics decorin by regulating collagen organization and restoring a healthy tissue environment. Unlike decorin, Pelladerm can be synthesized at low cost in large quantities, and with unique design control. Table 1. Comparison of Decorin to Glytrix’s Peptidoglycan Technology Collagen Enhances Restores Synthesized Control of Cost per Binding Tissue Healthy Tissue in Large Design Gram Strength Environment Quantities Decorin X X X X X X $440,000 X X $1,500 Glytrix’s Product Platform Glytrix’s technology is amenable to multiple indications. While Glytrix is focused on moving Pelladerm forward as the lead product, a follow on product is currently in preclinical testing for efficacy in preventing hypertrophic scar formation. This scar type, commonly resulting from burn injuries, can be both physically and psychologically debilitating and is of significant clinical concern as the market is yet unmet. Glytrix is also investigating a product designed to improve the outcome of balloon angioplasty procedures. According to the American Heart Association, over 1.3 million balloon angioplasty procedures are performed annually in the U.S. The advent and use of stents and drug eluting stents have led to improved outcome and safety of these procedures, and is reflected by the 30% increase of balloon angioplasty procedures performed over the last 10 years. Still, significant clinical concerns exist with angioplasty procedures with and without stenting. Early stage Copyright © 2010 Glytrix Inc Page 6 thrombosis following balloon angioplasty is responsible for approximately 9,300 in hospital deaths each year (American Heart Association), and narrowing of the blood vessel wall over time, termed restenosis, perseverates as a significant clinical concern and focus of many researchers. Glytrix has strong preliminary data supporting a unique product that aims to prevent the immune response that occurs at the vessel wall due to deployment of the balloon during angioplasty procedures. This product has the potential to prevent early stage thrombosis, and is expected to reduce or prevent restenosis by preventing inflammation at the vessel wall. Such a therapeutic could change the current standard and improve the expectation of balloon angioplasty procedures. Glytrix will continue preclinical studies for this indication throughout 2010 and anticipate clinical trials by Q4 2011. This product is positioned for FDA approval through the Class III device pathway. While Glytrix may pursue this application internally following preclinical studies, potential partnerships are also being considered. More information and preliminary data on this application are available upon request. Copyright © 2010 Glytrix Inc Page 7 III. The Market The Customer Pelladerm differs from other products in that it is applied at the time of surgery before wound closure, in order to prevent formation of scar tissue. This unique application of Pelladerm necessitates its use as a prescription product, and Glytrix will market Pelladerm to physicians. By presenting at scientific conferences and holding individual meetings with prominent physicians, Glytrix will directly inform leaders in the field of the significant advantages Pelladerm will provide in the mitigation of scar formation. As Pelladerm is designed to fit within current surgical practices, it is expected that Pelladerm will be well received. The Market Opportunity The demand for products that reduce or prevent dermal scarring is large, as demonstrated by the market for over the counter scar management products. These products are not FDA approved and efficacy is disputed in the scientific and medical communities. Still sales of these products are growing, illustrating the strong demand. Michael Dolyk, Buyer for OTC and Health and Beauty Care Products for Medic Drug Inc., reports, “Scar reduction products are one of the few things really moving right now. They are the most innovative things out there.” Pelladerm has the potential to be used in every surgical procedure that results in dermal scarring, which is over 42 million procedures in the US annually. Glytrix has identified specific segments of this market for initial sales of Pelladerm: the cosmetic and reconstructive surgery market, and general surgeries including C-sections and trauma wounds. Cosmetic and Reconstructive Surgery Market According to the American Society for Aesthetic Plastic Surgery and the American Society of Plastic Surgeons, there were over 1.8 million cosmetic surgical procedures performed in the US in 2007 that could have benefited from a scar mitigation product, representing a market of approximately $7.7 billion. In addition to initial cosmetic surgery procedures, the American Association of Plastic Surgeons estimates that over 150,000 scar revision reconstruction surgeries were performed in the US in 2007, indicating the demand for scar reduction. Glytrix seeks to first focus Pelladerm in the primary market of plastic surgery due to the following market factors: • • • Reimbursement is not relevant since the majority of plastic surgeries are private pay. The plastic surgery market is less price sensitive than other markets (higher gross margins) Plastic surgeons may potentially be the earliest adaptors of a product that mitigates scarring and provides attractive margins. The cosmetic surgery market is broken into multiple procedures, summarized in Table 2. This table includes only those cosmetic surgical procedures in which Pelladerm will likely be used. This market represents over 1.8M annual procedures that may be improved by use of Pelladerm. Additionally, there are over 4.8M reconstructive procedures performed by plastic surgeons each Copyright © 2010 Glytrix Inc Page 8 year, including dog bites, tumor removal, burn repair, and hand surgery. These procedures represent an additional market where Pelladerm has an early high probability of success. Table 2. Elective Surgical Procedures Performed Annually in the U.S. Procedure Number of Procedures Average Expenditure Total Expenditure Abdominoplasty 185,335 $5,350 $991,542,250 Breast Augmentation 399,440 $3,889 $1,553,422,160 Breast Lift 126,178 $4,341 $547,738,698 Breast Reduction (Women) 153,087 $5,417 $829,272,279 Buttock Augmentation 5,325 $4,250 $22,631,250 Buttock Lift 3,787 $4,885 $18,499,495 Cheek Implants 2,406 $2,840 $6,833,040 Chin Augmentation 18,250 $2,254 $41,135,500 138,153 $6,792 $938,335,176 Forehead Lift 61,119 $3,337 $203,954,103 Gynecomastia, treatment of 20,280 $3,455 $70,067,400 Facelift Lip Augmentation (Surgical) 10,673 $1,611 $17,194,203 456,828 $2,942 $1,343,987,976 Lower Body Lift 12,711 $8,043 $102,234,573 Otoplasty 28,413 $3,085 $87,654,105 Lipoplasty Rhinoplasty 151,796 $4,357 $661,375,172 Thigh Lift 18,431 $4,783 $88,155,473 Upper Arm Lift 21,870 $3,864 $84,505,680 328 $3,609 $1,183,752 70,014 $1,077 $75,405,078 440 $3,591 $1,580,040 Calf Augmentation Dermabrasion Pectoral Implants Total Average Procedure Cost 1,884,864 $7,686,707,403 $3,989 Source: American Society of Aesthetic Plastic Surgeons 2007 and American Society of Plastic Surgeons 2007 General Surgery Market: C-sections and Trauma Initially, Glytrix expects modest market share immediately following FDA approval of Pelladerm as it will reach the market through the 510(k) approval pathway, and will thus not have labeling claims for use in scar reduction. In order to increase market share, Glytrix will perform a nonsignificant risk clinical trial immediately following FDA approval. This trial will last one year and provide efficacy data that will support labeling claims for scar reduction and accelerated wound healing. Once labeling claims are added, Glytrix anticipates a significant increase in market share as Pelladerm will be able to obtain insurance reimbursement codes. This market strategy is detailed in Section VI. Financial Analysis (page 21). Copyright © 2010 Glytrix Inc Page 9 Some of the surgical procedures in which Glytrix sees high potential for Pelladerm include Caesarean Section, appendectomies, cholecystectomies (Gallbladder removal), orthopedic surgical procedures, and trauma. Sales for this market will begin in Q4 of year 2013. Glytrix expects to market Pelladerm to physicians, and the product cost will be built into the surgical procedure. Industry Analysis and Forecast The US wound treatment market was $5.9B in 2008. Some portions of the market, such as antiinfectives, wound management, and sutures and staples, are mature and slowing in growth rates. Other portions of the market, such as moist and biological dressings that could potentially prevent dermal scarring and accelerate healing are in early stages of development and implementation. Pelladerm fits within this growing market. As Pelladerm is positioned to be the first product to market for preventing scarring, Glytrix anticipates a strong hold on over competitors currently in development stages. Pelladerm is designed to easily fit within current surgical practices and with surgeon’s ease of use in mind. Pelladerm will be supplied as a sterile solution that can simply be applied to the wound prior to closure. Pelladerm has the potential to be used in every surgical wound and to change the expectations of surgical scar formation. Current and developing competitors are detailed below and summarized in Figure 4. Scar Revision Surgery Scar revision is an option to reduce the appearance of large scars. This procedure is surgical and costly, and will result in some scar formation. Pelladerm could be used in conjunction with scar revision surgery. Over the Counter While there is currently no gold standard product to reduce scarring, there is some limited evidence that scarring can be diminished somewhat with topical medication. Glytrix will have an enormous advantage as these products are not FDA approved and are not well supported by the scientific and medical communities. Over the counter products for scar reduction include Merz’s Mederma, Avocet’s Avogel, and a host of companies which market some form of silicone wound dressing. There is limited and conflicting data on the efficacy of these products, and they are not well supported by the clinical community. These products are intended for use after wound closure and after the wound healing process and scar formation has begun. Pelladerm, in contrast, is applied before wound closure and restores a healthy tissue environment to prevent healing without formation of scar tissue. Emerging Therapies Competing companies looking to fill the unmet need of scar mitigation include Renovo and Capstone Therapeutics. Both companies are developing products classified as drugs, and must navigate the FDA’s drug pathway to market. Pelladerm will follow the 510(k) Class II device pathway, following an easier and faster pathway to market. No competing product is expected to be to market at the time Pelladerm sales begin, Q2 2012. Additionally, the Renovo and Copyright © 2010 Glytrix Inc Page 10 Capstone products requiree multiple applications; this alters the standard of care, as patients will have to revisit the physician’s office for a sec second ond or third application of treatment. Pelladerm requires only a single dose, applied at time of surgery, eliminating any concerns of patient compliance or physician standard of care. Figure 4.. Competitive landscape, and ad advantages vantages of Pelladerm. Future e Markets: Burns and Hypertrophic Scars While Glytrix is focused on bringing its lead product Pelladerm to the market, there is yet a large unmet need for therapeutics to prevent hypertrophic scarring. Hypertrophic scars often results from burn injuries and are typically characterized as raised, red or pink, stiff scars which can be physically, aesthetically, and psychologically debilitating. Glytrix is currently pursuing this need, and is in preclinical trials for support of efficacy of a follow follow-on product duct to Pelladerm as a therapeutic to prevent hypertrophic scarring. Approval of the follow follow-on on product for this application will require Pre-Market Market Approval (PMA) from FDA as burn injuries bear greater risk to the patient. Integra® Dermal Regeneration T Template emplate is an FDA approved tissue engineered product for burn and reconstructive surgery, and represents the standard of care in these fields. It is a bilayer material consisting of a silicone sheet and a porous matrix of crosslinked bovine hide collagen and a glycosaminoglycan. This material functions as a skin graft and promotes healing after excision of the injured area. While the Integra product has shown excellent results, it requires proper application susceptible to user variability and error. Al Also, so, it requires an epidermal autograft, necessitating suitable donor site availability. Glytrix will directly test its product against the Integra product in pre pre-clinical clinical studies on hypertrophic wounds. Glytrix believes the Pelladerm follow product, by acting directly on the tissue’s environment, will prove more effective than the Integra product in preventing scar formation. Additionally, it is expected that Glytrix’s product will have advantages in ease of use without user variability. Integra’s product uct is only marketed for burns and reconstructive surgeries, and will not be a competitor in cosmetic or surgical scars. Copyright © 2010 Glytrix Inc Page 11 Future Markets: Balloon Angioplasty Application According to the American Heart Association, there were 1.3M balloon angioplasty procedures performed in the US in 2006, representing a market of $63B annually. This is a 10% increase over the previous decade, a result in part of use of stenting, which has made balloon angioplasty a safer and more effective procedure. Still, 9,300 in hospital deaths each year occur due to complications, commonly early stage thrombosis. In addition, narrowing of the vessel over time, termed restenosis perseverates as a significant complication to balloon angioplasty procedures. Glytrix has strong data supporting a product that would prevent these complications, and is currently continuing preclinical animal trials to validate results. Glytrix anticipates this product could be used in every balloon angioplasty procedure, representing an annual U.S. market of over 1.3M patients, and could result in large market growth due to improved clinical outcome. Copyright © 2010 Glytrix Inc Page 12 IV. Glytrix’s Strategy Milestones Completed • Glytrix has been incorporated, July 2009 • Intellectual property of the Glytrix platform technology has been protected through 2 patent applications • AMIPurdue has obtained a license for the technology from Purdue • Glytrix has secured funding to support milestones through May 2010 • Preclinical efficacy data of Pelladerm therapeutic has been obtained • Purity and functional tests of Pelladerm have been identified for characterization and stability testing • Regulatory counsel for Glytrix has been obtained • Contract Manufacturing Organization for cGMP synthesis of Pelladerm has been identified • Site for clinical safety study for Pelladerm has been identified • Preclinical studies for burn indication have begun • Preclinical studies for vascular indication have begun Milestones to Complete Pelladerm has strong commercialization potential, and Glytrix plans for initial FDA approval through the de novo 510(k) Class II device pathway. This pathway allows for approval of low risk devices without predicate devices, requiring a non-significant risk clinical safety study for the product prior to approval. Following this pathway, Glytrix will reach the market prior to emerging competitors who are developing therapeutics requiring FDA approval through the drug pathway. Immediately following FDA approval of Pelladerm, a follow-up clinical study will be conducted to support efficacy of Pelladerm for scar mitigation, which will allow additional product claims to be added to Pelladerm labeling. The key milestones Glytrix aims to complete are summarized in Table 3. Copyright © 2010 Glytrix Inc Page 13 Table 3. Key Milestones over the Next 5 Years 2010 Key Milestones CMO GMP Synthesis Purity/Stability/Biocompatibility IRB Approval Human Clinical Study - Safety FDA - De Novo 510(k) Submission FDA - Acceptance SALES - cosmetic market Human Clinical Study - Efficacy FDA - Revise Claims SALES - Expand to General Surgery 1 2 3 2011 4 1 2 3 2012 4 1 2 3 2013 4 1 2 3 2014 4 1 2 3 4 Pelladerm 510(k) approval Purity, Stability, Biocompatibility, and Sterility Testing Glytrix is currently pursuing FDA approval of Pelladerm through the de novo 510(k) Class II device pathway. In order to complete this application, the purity, stability, sterility, and biocompatibility of Pelladerm will be validated under current good laboratory practices (cGLP) with material synthesized under current good manufacturing practices (cGMP). cGMP synthesis is currently being performed in the laboratory of Dr. Alyssa Panitch, but will be translated to a contract manufacturing organization (CMO) prior to human use. Standard Operating Procedures (SOPs) have been written and are ready to translate to the CMO immediately. Glytrix is finalizing development of assays to determine the purity and stability of Pelladerm, and will transfer these protocols to a company with experience in this field in Q2 2010. Final packaging considerations will also be made at this time. John Hertig, Director of AMIPurdue, has extensive experience in sterile packaging and is guiding these decisions. Biocompatibility and sterility data are necessary for FDA 510(k) application. Glytrix will use an independent contractor (NAMSA) to perform these studies and use FDA guidelines from ISO 10993 for studies. Cytotoxicity (ISO 10993-5), sensitization (ISO 10993-10), and irritation or intracutaneous reactivity (ISO 10993-10) will be performed based on ISO guidance for Surface Devices contacting a breached comprised surface for prolonged exposure. Glytrix expects positive results from all biocompatibility and stability studies based on data from preclinical animal studies. Pelladerm has been used in numerous preclinical studies with no adverse effects, and has been used in in vitro studies with no signs of cytotoxicity. Clinical Safety Study Upon receipt of biocompatibility and stability data, Glytrix will be prepared to file for IRB approval for a human safety study. This study will be performed at the University of Texas Southwestern and will consist of 30 patients and last 6 months. The primary endpoint of the study will be safety, and efficacy in reducing scar appearance will be examined secondarily. 510(k) Application Upon completion of the clinical safety study, Glytrix will be prepared to submit a 510(k) Class II Device application to the FDA in Q4, 2011. Entry to Market Glytrix will initially target the cosmetic surgery market since this market is paid out-of-pocket by the patient, as opposed to the general surgery market which is insurance-reimbursed. Glytrix is targeting this market first for two reasons. First, clinical trial data showing accelerated healing is necessary for insurance reimbursement. Second, insurance reimbursement is necessary to stimulate sales from the general surgery market as market demand is more sensitive to price. Upon FDA approval of Pelladerm through the 510(k) pathway as a Class II device (Q2 2010), Glytrix will pursue a non-significant risk clinical trial in order to demonstrate efficacy in humans and expand the labeling claims of Pelladerm for scar prevention indications. Healthy subjects Copyright © 2010 Glytrix Inc Page 15 will be recruited for the study, which will take place at the University of Texas Southwestern beginning Q3 2010. The primary objective of the clinical study is to evaluate the efficacy of Pelladerm in mitigating scar formation of incisional wounds. Additionally, enhancement of wound healing through faster healing response will be evaluated. Both patient and physician will assess the scar at 3, 6, and 12 months. Upon completion of the clinical trial (Q2 2013), Glytrix expects data supporting claims for use of Pelladerm in preventing scar formation and increasing the speed of healing. These claims will allow for insurance reimbursement codes, and will significantly increase the market share for Pelladerm in cosmetic, surgical, and trauma type wounds. Production Glytrix will use a CMO to produce Pelladerm, beginning in Q2 2010. cGMP manufacturing within Glytrix’s facility will be focused towards development of second generation product and products for other applications. Marketing Glytrix will market directly to physicians since physician approval will be necessary to facilitate use of the product. Glytrix has already begun to present its data at scientific conferences, and will continue to present at medical conferences in association with the Wound Healing Society and submit to peer-reviewed publications, i.e. “Plastic & Reconstructive Surgery Journal.” These conferences are attended by thought leaders in the field and will provide early marketing to physicians. After approval, Glytrix will additionally market directly to consumers, making Pelladerm more widely known to those who may not visit plastic surgeons. Television advertising and brochure advertising will be used to make customers aware of the product. Sales Strategy Pelladerm will be sold directly to physicians, who will then administer the product to the patient at the time of surgery. Physicians who use it regularly will stock the product as a standard necessity. Less-frequent users may order it from Glytrix on an as-needed basis. Glytrix will contract with an independent sales force early on to reduce startup costs, and will focus initially in markets where cosmetic procedures are high. As sales revenue increases, freeing up cash-flow, Glytrix will obtain an internal sales force to retain greater control over the physician-manufacturer relationship. Distribution Strategy Initially, Glytrix will contract out the distribution, providing the distributor with a margin of 35%. This will enable Glytrix to quickly tap into the market. Once the product is wellestablished, Glytrix will provide distribution to physicians direct from the manufacturer. Regarding distribution channels, Glytrix will provide Pelladerm to private practice physicians within the cosmetic surgery market. Copyright © 2010 Glytrix Inc Page 16 Pricing Strategy Due to the less elastic demand within the cosmetic market, pricing for Pelladerm will be less impacted by economic conditions than the general surgery market. Expected pricing for Pelladerm is $200/application, based on physician feedback as to what patients would be willing to pay. Exit Strategy Glytrix will pursue a sale of the company at the time of exit. Although revenues at the time will likely justify an IPO – likely over $50 million/annum – a sale precludes the difficulty of timing the IPO market, the high transaction fees, and restrictions in liquidity. Risks of Failure A significant milestone for Glytrix success if FDA approval of Pelladerm. Approval of Pelladerm through the de novo FDA 510(k) Class II Device pathway is highly probable. Therapeutics for dermal injuries are generally considered low risk to the patient, especially if the treatment is localized to the healing injury site. Glytrix will complete a clinical safety study prior to FDA approval. A follow on product to Pelladerm is also being investigated for use in burn wounds. Additionally, a therapeutic to prevent early stage thrombosis and restenosis following balloon angioplasty is being investigated with highly positive results. Glytrix’s platform technology provides high probability of success in multiple markets. Intellectual Property Considerations Application for Intellectual Property (IP) rights to the core technology being developed by Glytrix was first filed as a U.S. Provisional Patent in March 2008. This provisional patent application claims IP rights over the composition of matter for synthetic collagen-binding peptidoglycans, including Pelladerm. Conversion of this provisional patent application in accordance to the Patent Cooperation Treaty (PCT) occurred in March of 2009. In conjunction with submission of patent application, patentability opinion and Freedom to Operate (FTO) opinion were obtained from AMIPurdue’s patent council. This patent counsel is comprised of several legal institutions, including Barnes and Thornburg LLC, Seed IP LLC, as well as in-house patent council. Both patentability and FTO analysis resulted in favorable opinions for obtaining IP protection and freedom to practice the core technology (synthetic collagen-binding peptidoglycans) for wound healing treatment. Furthermore, as a result of ongoing technology development, another provisional filing was made to expand the technology’s field of use. This provisional was strategically filled prior to the publication of the PCT application in April of 2009. As a result of the IP strategy, Glytrix’s core technology will be protected by a portfolio of IP covering the composition of matter and methods of use within a broad range of applications. This strategy is in-line with the company’s objective to develop this platform technology for a multitude of biomedical applications. Copyright © 2010 Glytrix Inc Page 17 V. Management Team Glytrix has assembled a strong, multi-disciplinary commercialization team, comprised of the Company’s scientific founders and partners with AMIPurdue. Members of the team have prior experience with small business ventures in the medical industry. The scientific team is comprised of the inventors of the technology and founders of Glytrix. John Paderi, PhD, Founder/Chief Scientific Officer • PhD (Biomedical Engineering), Arizona State University • Entrepreneurial Fellowship award from Burton D. Morgan Center for Entrepreneurship 2009-2010 • Primary inventor of peptidoglycan technology for Glytrix • 7 years experience in biomedical research and development Kate • • • Stuart, PhD, Founder/Chief Operating Officer PhD (Biomedical Engineering), Purdue University Co-inventor of peptidoglycan technology for Glytrix 7 years experience in biomedical research and development Alyssa Panitch, PhD, Founder • PhD (Polymer Science and Engineering), University of MA • Associate Professor of Biomedical Engineering, Purdue University, 2006-present • Co-Founder and Chief Administrative Officer/CSO of AzERx, Inc. 2002-2005 • Co-Founder and Chief Scientific Officer of Moerae Matrix, Inc., 2006-present • Assistant then Associate Professor, Harrington Department of Bioengineering at Arizona State University, 1999-2006 • Member, NIH Biomaterials and Biointerfaces (BMBI) study section, 2008-present • Postdoctoral fellowship at the Swiss Federal Institute of Technology (ETH) and University of Zurich, 1997-1999 • Editorial Advisory Board of Biomacromolecules, 2003-present Lynetta Freeman, DVM • DVM, Oklahoma State University • MBA, Xavier University • Senior Scientist/Principal Scientist/Research Fellow/Director, Ethicon, 1989-2006 • Associate Professor of Small Animal Surgery and Biomedical Engineering, Purdue University, 2006-present • Adjunct Associate Professor, IU School of Medicine, 2008-present • 17 patents and 8 pending patents Joshua Cox, MBA • MBA, Purdue University • Financial & Marketing Consultant • Graduate Assistant at the Burton D. Morgan Center for Entrepreneurship, 2008-2010 Management is currently being provided by AMIPurdue. AMIPurdue is a non-profit institute located within Discovery Park at Purdue University. AMIPurdue bridges the gap between Copyright © 2010 Glytrix Inc Page 18 biomedical and life science research at Purdue University and the rapid commercialization of these innovative academic efforts for the benefit of mankind. The directors of AMIPurdue have over 60 years of experience in the medical device industry and a track record of successful product development, providing leadership to start-up companies, fund raising, initial public offerings, and company divestitures. AMIPurdue has served as Glytrix’s commercialization team, providing intellectual property analysis, regulatory pathway planning, up-front marketing, financial modeling and seed capital for technology development. Additionally, Glytrix has been able to utilize the regulatory expertise present at AMI USC (Alfred Mann Institute at University of Southern California). AMIPurdue will continue to serve in an advisory capacity and continue to provide business leadership and additional funding. AMIPurdue is comprised of the following team: John • • • Hertig Executive Director Executive management, operations, regulatory, product development 35+ years experience in medical device industry Steve • • • Mogensen Managing Director Senior management, sales, marketing, operations 25 years experience in medical device industry Rizaldi Sistiabudi, PhD • PhD Biomedical Engineering, Purdue University • Business Development Manager • Product development, program management, regulatory • 6 years experience in biomedical research and development Kam Leung, Ph.D., RAC • Regulatory Affairs Manager Arman Nadershahi, J.D., M.S. • Legal and Regulatory Affairs Counsel Alexander Gorup, MD • Board Certified Facial Plastic Surgeon • Glytrix Clinical Advisor Rajiv • • • • Sood, M.D., F.A.C.S. Board Certified Plastic Surgeon Hand and Microsurgery CAQ Medical Director, Richard M. Fairbanks Burn Center Glytrix Clinical Advisor Copyright © 2010 Glytrix Inc Page 19 Personnel Plan Glytrix immediately seeks an experienced CEO. Additionally, Quality Control, Regulatory, and Clinical Personnel are needed by the end of year 1. A marketing a sales force will be necessary starting year 2, for sales to begin in year 3. The sales/marketing force will be independent contractors during years 1-5, with Glytrix employing personnel to oversee these firms. A summary of the personnel to be hired over the next 5 years, with associated costs, is shown in Table 4. Table 4: Personnel to be Hired Head Count Assumptions 2010 2011 2012 2013 2014 Executive Board Salary CEO 150,000 1 1 1 1 1 CSO 120,000 1 1 1 1 1 COO 120,000 1 1 1 1 1 QC/R&D Mgr. 90,000 1 1 2 2 2 Regulatory 120,000 1 1 1 0 0 Clinical 120,000 1 1 1 1 1 Gen Manager 120,000 0 1 1 2 3 QC / R&D Sales/Market/Mgmt. Product Mgr. 100,000 0 1 1 2 3 Sales/Marketing Spec. 90,000 0 1 1 2 3 Admin 50,000 0 0 1 2 2 Copyright © 2010 Glytrix Inc Page 20 VI. Financial Analysis Glytrix has funding through AMIPurdue through May 2010. This funding will allow Glytrix to complete all necessary pre-clinical studies for Pelladerm, including biocompatibility, stability, and purity. Additionally, AMIPurdue has agreed to fund a clinical safety study consisting of 30 patients, to be conducted at University of Texas Southwestern. Additional funding is needed to fund hiring of a CEO, the management team, and a regulatory team to bring Pelladerm through the FDA approval process. A detailed financial analysis through year 5, and estimates at year 10, is included in Tables 5-7. This model includes Glytrix reaching only the cosmetic market, and profit margins will increase as sales in the general surgery market begin. Table 5 summarizes the potential opportunity in the cosmetic surgery market, Glytrix’s market share, and gross revenues. It is based on the following assumptions: • • • • • • Market growth rate: 3%. From 1996 to 2007, the cosmetic surgery market increased over 100%. However, in the last 5 years, the market growth has slowed drastically. The American Society of Plastic Surgeons believes this is due in large part to the state of the economy, and that growth will continue. The number of general surgical procedures has an approximately 3% growth rate. Estimated product cost: $8, including packaging Sale price: $200. This figure is based on physician statements, the current cost of cosmetic surgical procedures, and the money consumers are willing to spend on overthe-counter and homeopathic remedies to decrease scar (over $50 per product). Market share: a sales prediction model was utilized to determine market shares over the next five years. Market share was capped at 25% due to competition entering the field. Reimbursement: Most plastic surgeries are private pay, making reimbursement irrelevant. For the general surgery market, Glytrix has assumed reimbursement through health insurance, as there are multiple insurance codes for wound dressings. Sales force: Glytrix plans to use a distributor for the first 3 years of sales of Pelladerm, and has assumed a 35% distributor margin based on gross sales. After 3 years of sales, Glytrix will build a small sales force to directly sell Pelladerm to physicians. Additionally, a 5% royalty rate to Purdue University is assumed. Table 6 summarizes Glytrix’s operating expenses. Glytrix has applied a 5% marketing budget and a 6% research and development budget based on gross sales, up to a maximum of $1M/year. Finally, a cash flow statement is presented in Table 7. Glytrix expects to break-even with a positive cash flow in Q4 2012. To reach this point, Glytrix will require total funding of approximately $4.7M in years 1-3. Copyright © 2010 Glytrix Inc Page 21 Table 5: Market Opportunity US Market Potential Market Share Units Sold Gross Revenues (1) Distributor Margin (35%) (2) Royalty (3) Net Revenues COGS (cost of goods) (4) Gross Profit 2010 1,800,000 0.00% 2011 1,854,000 0.00% - - 2012 1,909,620 4.00% 76,385 $ 15,276,960 $5,346,936 $763,848 $9,166,176 $611,078 $8,555,098 2013 1,966,909 18.00% 354,044 $ 70,808,710 $24,783,048 $3,540,435 $42,485,226 $2,832,348 $39,652,877 2014 2,025,916 25.00% 506,479 $101,295,793 $35,453,528 $5,064,790 $60,777,476 $4,051,832 $56,725,644 ... ... ... ... ... ... ... ... ... ... 2019 2,348,592 25.00% 587147.9327 $117,429,587 $ 5,871,479 $111,558,107 $ 4,697,183 $106,860,924 (1) Sale price = $200 (2) Beginning 2015, Glytrix will switch to an in-house sales team and direct distribution, eliminating the distributor margin (3) Royalty = 5% (4) COGs = $8 Table 6: Expenses Expenses Clinical Trials QC/Regulatory/Clinical Salary Sales/Mkt/Mgmt Salaries R&D Expense Executive Salaries Marketing Expense Facilities Legal Insurance Phone/Uitlity/Misc Total Expenses 2010 2011 $200,000 $330,000 $310,000 2012 $500,000 $420,000 $360,000 $320,000 $623,000 $390,000 $100,000 $24,000 $100,000 $38,000 $10,000 $1,302,000 2010 $0 $623,000 $623,000 2011 $0 $1,302,000 $1,302,000 $623,000 $1,302,000 $51,917 ($571,083) ($571,083) $108,500 ($1,193,500) ($1,764,583) $80,000 $23,000 2013 2014 $300,000 $1,030,000 $1,000,000 $390,000 $1,000,000 $48,000 $200,000 $110,000 $10,000 $4,088,000 ... ... ... ... ... ... ... ... ... ... ... ... $390,000 $500,000 $48,000 $120,000 $110,000 $10,000 $2,458,000 $300,000 $720,000 $1,000,000 $390,000 $1,000,000 $48,000 $200,000 $110,000 $10,000 $3,778,000 2012 $8,555,098 $2,458,000 $6,097,098 $2,438,839 $3,658,259 $152,770 $1,909,620 $204,833 $1,800,702 $36,119 2013 $39,652,877 $3,778,000 $35,874,877 $14,349,951 $21,524,926 $708,087 $8,851,089 $314,833 $12,280,584 $12,316,703 2019 $300,000 $3,460,000 $1,000,000 $390,000 $1,000,000 $48,000 $200,000 $110,000 $10,000 $6,518,000 2014 $56,725,644 $4,088,000 $52,637,644 $21,055,058 $31,582,586 $1,012,958 $12,661,974 $340,667 $18,248,321 $30,565,024 ... ... ... ... ... ... ... ... ... ... ... 2019 $106,860,924 $6,518,000 $100,342,924 $40,137,170 $60,205,754 $1,174,296 $14,678,698 $543,167 $44,895,927 $241,390,819 Table 7: Cash Flow Gross Profit Total Expenses Operating Earnings Taxes Net Earnings Inventory Increase Acct Rec Increase A/P increase (accounts payable) Cash Flow Cum Cash Flow Necessary Funding AMIPurdue will have committed over $600k in funding for Glytrix by May 2010. They have additionally agreed to fund a 30 patient safety study. This funding will allow Glytrix to reach the milestones necessary to submit an FDA package for Pelladerm through the de novo 510(k) device pathway. At this time, Glytrix is in need of funding to support a regulatory firm to Copyright © 2010 Glytrix Inc Page 22 prepare this FDA document and to guide Glytrix through the entire FDA regulatory route. Additionally, Glytrix is seeking a CEO, as well as funding for its executive board. For these efforts, Glytrix is initially seeking $1M. In conjunction with AMIPurdue funding, this will allow Pelladerm to reach FDA approval by 2012, and will also fund additional efforts for preclinical testing of Glytrix’s anti-thrombotic application. Additional support of $3.7M will be needed beginning Q1 2011 to fund marketing, production, and initial sales of Pelladerm, as well as all operating costs over the next 3 years, including facilities, equipment, supplies, marketing, salaries, legal fees, and clinical trials An additionally $2M is also requested to support all preclinical studies necessary for the anti-thrombotic application. A total of $6.7M is requested. Glytrix expects to break even in Q4 2012, and will have returns of over $60M in revenue by 2014. Copyright © 2010 Glytrix Inc Page 23
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