Cytori provides regenerative medicine devices and cell therapy. Their Celution system extracts stem and regenerative cells from fatty tissue for soft tissue repair and cardiovascular disease applications. Recent highlights include expanded approval in Europe and initiating a heart attack trial in 2011. Cytori has a strong balance sheet with $60 million in cash and is pursuing near-term revenue growth from soft tissue applications while developing cardiovascular indications.
1. Cytori, Inc. (Nasdaq: CYTX)
Investor Presentation: OneMedForum
January 11, 2011
Christopher J. Calhoun
Chief Executive Officer
2. Safe Harbor Statement
This presentation may contain certain ‘forward-looking statements’. All statements, other
than statements of historical fact, that address activities, events or developments that
we intend, expect, project, believe or anticipate will or may occur in the future are
forward-looking statements. Such statements are based upon certain assumptions and
assessments made by our management in light of their experience and their perception
of historical trends, current conditions, expected future developments and other factors
they believe to be appropriate.
The forward-looking statements included in this presentation are also subject to a
number of material risks and uncertainties. We caution investors not to place undue
reliance on the forward-looking statements contained in this presentation.
We would advise reading our annual report filed with the United States Securities and
Exchange Commission on Form 10-K for a more detailed description of these risks.
3. Cytori’s Vision: Enable Regenerative Medicine
Medical devices for regenerative medicine
Real-time access to stem and regenerative cells from fatty tissue.
Ischemic conditions: Soft tissue repair, heart disease & others
4. Business Overview
Product Revenue Growth
Razor/razorblade business model
Near-term revenue growth drivers: Approved
and selling products throughout U.S. and ROW
$ Millions
Long-term opportunity: Planned & ongoing trials to
expand Celution labeling for cardiovascular disease
Financial stability
$60 million pro forma cash (end of Q3 2010)
Significant Market Opportunity
Cardiovascular repair: multi-billion worldwide market
Reconstruction/augmentation: $2B + worldwide
Other opportunities to expand Celution labeling
5. Recent Highlights
Revenue Generating Units
Increasing installed-based of Celution® System (Cumulative)
150
Increased 34% year-to-date 135
122
Expanded CE Mark (July ‘10): reconstructive & wounds 110
101
100
85
Reimbursement expected to accelerate sales growth 70
European post-marketing study complete results H1 ‘11 59
50
Initiating approval heart attack trial Q1 2011
Strategic equity agreement with Astellas Q4 2010 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
$10M including liver partnership right of first refusal
'09 '09 '09 '09 '10 '10 '10
Completed $20 MM secondary offering October 2010
6. Regenerative Medicine Evolution
Treatment Evolution Nothing Devices Drugs Transplants Regenerative Medicine
Embryonic
Regenerative Medicine •Controversial
The process of creating living, functional tissues Cell Therapy
•few patients treated
to repair or replace tissue or organ function lost Introducing new cells into a tissue
to treat a disease •Expensive COGS
due to damage, or congenital defects.
•Donor only
•Biologic dev. path
Adult Stem Cells
(Bone Marrow, Adipose Fat Tissue) Cytori has ONLY medical device
that allows for the extraction
and re-injection of adipose
Adipose tissue-derived stem and
Bone Marrow
•On Market regenerative cells (ADRC)
•Difficult to Access
•path700+ pt treated
•Expensive COGS
•Viable biz. Model
•Donor or autologous
•Donor or autologous
•Biologic dev. path
•Device-based
7. Cytori’s Approach
Process Applications
Cardiovascular Breast Reconstruction
Adipose: rich source
for stem and
regenerative cells
Adipose tissue Additional Indications
Facial Rejuvenation (including radiation injury, urinary
processed at point- incontinence, wound repair)
of-care
Cells available for re-
injection in same
surgical procedure
9. Celution® System
Sale of system
+ Recurring revenue
Single use, per-case cartridge
10. Celution® Cell-Enriched Fat Graft
‘Cell-Enriched
Graft’
Cells Fat $43 $73 $128
$76 $126 $163
Clinical Clinical Clinical
Partner Partner Partner
Hospital-Based Applications Plastic Surgery Clinic Applications
Reconstruction (breast) Breast augmentation
Breast Asymmetry Facial Rejuvenation
Skin and scars Buttock Augmentation
Soft tissue defect repair Augmentation of the chin, lips or cheeks
Wasting of the face and hands
11. Soft Tissue Application: Reconstruction
Celution® Cell-Enriched Fat Graft
European approval July 2010
Hospital-based procedure and call point
Seeking reimbursement
Last-Patient / Last Visit Nov 2010
Complete results H1 2011
Post-marketing RESTORE-2 study
82% physician satisfaction
73% patient satisfaction
Improvement in scar, pigmentation, symmetry and defect index:
+ 2.8 to 3.9 in patient assessment (0-5 scale)
+ 3.1 to 4.1 in physician assessment (0-5 scale)
12. Soft Tissue Application: Aesthetic
Celution® Cell-Enriched Fat Graft
Initial product introduction early 2008 in Europe and Asia Pacific
13. Supplemental Product Line:
PureGraft™: Natural Filler Application
Optimizes preparation of autologous fat graft
Worldwide approval
Complements Celution® in Europe
• Optimizes prep of fat graft
• Celution® lead qualifier
Stand-alone product in US
• Convert users to Celution® upon U.S. clearance
• Point-of-Entry: Building out US sales team (6 direct reps)
Addresses $1.7 billion dermal fill market;
• 46K annual fat- grafting procedures in U.S. and growing
14. Supplemental Product Line:
StemSource Cell & Tissue Bank
Complements plastic surgery practices
• Liposuction customer candidates
• Captures patient retention
• Revenue source
Worldwide product offering
• System
• Cryopreservation chamber tools
• Proprietary protocol, software, database
Distribution network
• GE Healthcare: EU, North America
• Green Hospital Supply (Japan, Thailand, Taiwan, Korea)
Current banking customers in Europe, Japan and U.S.
15. Near-Term Growth Driver: Soft Tissue Repair
Celution product sales: CE Mark designation
• Access to 2/3 worldwide market
• Cosmetic surgery clinics
• Hospitals for breast cancer reconstruction
Celution Consumable Shipments
July 2010: Expanded CE Mark for reconstructive (cumulative)
surgery
• RESTORE-2 final results expected H1 2011
• Intended to support reimbursement efforts
Expanding sales force footprint
• 16 direct sales and marketing worldwide
• Distributors covering select countries in EU and AP
16. Soft Tissue: International Launch & Expansion
Potential System & Consumable Market
Celution® System: in the 27 CE Mark Countries
• Sales team to focus on hospitals
• Emphasis: breast reconstruction
• Focus geographies: UK, Italy, & Germany
• GE Healthcare complements direct sales
• RESTORE 2 post-marketing study 2,000
• Reimbursement
Total Hospitals Total Breast Recon
PureGraft™ Procedures/Year
• Complements Celution® customer’s procedures *Backlog: 2 MM + patients
• Rely on distributors
• Incentivize distributors to generate Celution® leads
19. Long-Term Opportunity: Cardiovascular
Completed Celution® safety and feasibility studies
• Acute myocardial infarction (Heart Attack)
• Chronic myocardial ischemia (severe form of CHF)
Design & Outcomes
• Multi-center, double-blind, placebo-controlled
• Demonstrated safety of injection of Celution-derived
stem and reg. cells
• Strong and consistent efficacy signals in acute and
chronic heart disease
• Improved endpoints are key prognosticators of long-
term outcomes
20. Acute Myocardial Infarction (AMI)
(APOLLO Trial – pilot study)
Meaningful reduction in infarct size
• Entire cohort of patients
o 32% to 15% in treated group
o No change in untreated group
• Matched pair
o 5.1% greater reduction in treated
5.7% improvement in LVEF (SPECT)
3.5 x greater perfusion improvement
21. Cardiovascular: Next Steps
Initiate pivotal AMI Study in Europe (ADVANCE)
• Approx. 350 patients
• Three arms: 20 MM cells, 30 MM cells, & placebo
• Up to 35 centers
• Utilize Celution® One
• To begin Q1 2011
Add other vascular indications:
• Chronic Heart Disease
• Peripheral Vascular Disease
• Others
22. Chronic Heart Disease (CHD)
(PRECISE Trial – pilot study)
MVO2:significant change at 18 months
• MVO2 correlates to improved survival
• MVO2 ≤ 14 = 47%1 yr survival rate
METS: significant change at 18 months
Infarct size: 8.2% change at 6 months
Celution® procedure safe and feasible
through18-months
Lower cardiac mortality rate:
• At avg. follow up of 28 months:
- 2/6 placebo pts died of cardiac causes
- 1/21 treated pts died of cardiac causes
23. Strong R&D Pipeline
Initiate pivotal AMI Study in Europe (ADVANCE)
Investigator-sponsored trials
• SUI
• Liver
• Renal
• Malignant wounds
• Cardiomyopathy
• Vocal cord paralysis
• HIV therapy-induced soft tissue atrophy
• Others
Celution® One: Next-generation product
• Available for ADVANCE heart attack trial
• Manufacturing expertise
• Service infrastructure
• Committed Partner: invested $55+mm
24. Balance Sheet Highlights
Cash: $60 million pro forma (less Q4 2010 burn)
• Cash (9/30/10): $30.7 M
• Equity Raise (Oct. 10): $19.3 M
• Strategic Equity (Dec. 10): $10 M investment from Astellas Pharma
Long-term Debt: $20 million (GE/SVB/Oxford term loan)
Shares Outstanding: 52 million as adjusted
25. Key Takeaways
Providing solutions for the “Future” of medicine “Today”
Near-term system and consumable revenue growth driven by soft tissue
Recent approvals, expanded indications, and pursuing reimbursement
Enormous opportunity in ischemic conditions
Strong partners/investors: GE Healthcare, Olympus, Green Hospital, Astellas
Strong balance sheet
Cytori is medical device company that is providing surgeons and hospitals with the tools they need to practice regenerative medicine. Core product is the Celution® System We’re unique in the stem cell field because we’re focused entirely on giving patients access to stem and regenerative cells, which reside naturally in their own fat tissue Our vision is to ultimately have at least one of the systems you see pictured installed in every hospital and clinic around the globe.
Commercial model is based on the highly profitable razor-razorblade Increasing our installed base and driving consumable usage in the soft tissue area Building for the long-term through clinical trials to bring cardiac indications to market We’ve strengthened the balance sheet last quarter to support this growth Take away: Selling regenerative medicine products today into a large aesthetics and reconstructive market and building to tomorrow to penetrate an even larger cardiac market
Before we dive into the presentation, let me give you an idea of some recent highlights We continue to penetrate the market, having now placed 135 revenue generating Celution devices into the marketplace Our consumables have grown 34% year to date, and we expect the ability to significantly increase that rate to occur due to a couple of near term catalysts: First, we have recently received expanded CE mark to add reconstructive procedures to the label and are in the process to see reimbursement soon Simultaneously, we are initiating a pivotal study in Europe, ADVANCE, for heart attach approval We have seen strong support from both the business development community with a recent strategic equity agreement from the XXth largest pharma company in the world as well as a non-warrant equity markets transaction
Regenerative Medicine, what does it really mean when we talk about treated patients with stem cells? **Chris or Mark H. apply appropriate language***
While many stem cell companies talk about the future of medicine and how the anticipate treating patients, we are actually doing it. We have treated X thousand patients over the last X years, which is just the beginning.
As we discussed, we operate in a razor / razorblade model. The Celution system currently sells for $100K, while the consumables sell for $2500. We anticipate the sales price to ***increase to $5,000??***
The Celution system is originally being marketed to 2 areas of regenerative medicine: reconstructive and aesthetic. The distinction of these two areas is in the location of the procedure and the general reimbursement of the procedure.
In the reconstructive market, the focus is on breast reconstruction following XX. Data suggests XXX compared to XX for alternatives.
Sales heretofore have focused on aesthetic applications Injected tissue retains value over time, allowing cell-enriched grafts to be applied toward augmentation, facial, etc.
Supplementing our Celution system, we have designed and developed PureGraft. PureGraft optimizes preparation of autologous fat graft. We see PureGraft as a complement to Celution in Europe and as a stand alone product in the US. Not only does PureGraft address the $1.7 billion dermal fill market, but it acts as lead qualifier for Celution
Select hospitals are conducting their own independent investigator initiated studies. These studies hold the potential to expand and identify new applications for Celution. Cytori offers its Celution device, along with laboratory equipment to academic centers interested in conducting clinical and preclinical work. In North America, the system is distributed by GE Healthcare, and in Asia Pacific, it is distributed by our agreement with Green Hospital Supply.
The Celution device is originally being marketed to X,XXX hospitals throughout much of the world. We have just received CE mark expansion into the reconstructive market and anticipate reimbursement soon. This is expected to be a significant catalyst to the further penetration of the marketplace. To prepare, we are significantly expanding our sales footprint. We have initially brought on XX direct sales and marketing personnel, and have lined up XX distributors to address XX countries. We are also looking for additional label expansion with ongoing clinical trials.
Sales team will focus their efforts on calling on hospitals, due to the newly expanded indications of breast reconstruction and chronic wounds Taking the UK alone, there are 250 potential hospital customers for Celution who are already performing 1200 reconstructive surgery procedures per year, which could utilize our consumables. PureGraft, which was recently launched in Europe will be sold more through distributors. It can be used on its own or in combination with Celution. It’s an ideal entry point into the plastic surgeon’s office, with a lower price, and higher volume users will naturally become leads for upselling Celution®
We have seen consistent growth in revenues without any significant labeling. With the recent CE mark expansion to include reconstructive surgery, we believe there is significant near-term opportunities to increases revenues. Long-term, as we continue to place units worldwide, the ability to expand labels and approvals will increase not only the installed base, but the number of consumable used per day, or per week.