Brain Resource. For personal use only. riding the wave of demand for brain health solutions

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1 Brain Resource riding the wave of demand for brain health solutions Dan Segal, COO Sydney and San Francisco May

2 10 year track record Founded 2001, international research consortium Aus/US/UK/Neth Supplied 30 multinationals, 100 s clinicians, 250 researchers, 50,000 end users Consistent news flow (av 1.5 ASX releases pm since inception, 163 total) Capital management - total raised to date $15m (last raising in 2006), $5m cash balance at March 2011 Clients include: $9.0 Revenues ($m) 40,000 Cumulative Reports $8.0 35,000 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 30,000 25,000 20,000 15,000 10,000 $1.0 5,000 $0.0 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 0 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Dec10 2

3 People Dr Evian Gordon (CEO) founder Brain Dynamics Centre, Sydney University/Westmead Hospital, published the first book on Integrative Neuroscience, Eureka Prize Winner Dan Segal (COO) Background in finance (CA) and physics, formerly was a telco analyst for SSB. Bridges science to commerce Talented Sales, Scientists and IT team in Australia and US (30) Board includes Prof Arthur Toga (UCLA) and Nestor Hinzack Strong science network, includes: Prof Lea Williams Sydney and Stanford Dr Stephen Koslow NIMH Human Brain Project Prof John Rush Duke and former PI Star*D BRAINnet s 300 publications, 270 academic groups 3

4 Highly scalable Brain Health web products Clinical: WebNeuro reports help determine objective diagnosis and the best treatment option for each individual Consumer: MyBrainSolutions provides brain training based on a personalized assessment and a suite of games and exercises Driving scale: targeting millions of users How can I understand my patients brain and make the best decisions? How can I discover my own brain capacity and train it to perform at my best? Clinical Products Database IP Biomarkers New Products Consumer Products 4

5 Convergence of healthcare growth drivers The next phase of Digital Wave - ehealth, Personalized Medicine US Health Reform - Coverage, Parity, Prevention, CER, $20bn EHR Regulatory reform - FDA Critical Path Initiative & NIMH Strategic Plan Wellbeing & Consumer empowerment Evolving pharma model, Health Insurance payment for value Brain Resource is riding this growing wave with two scalable web products for clinical and consumer markets 5

6 Brain Health is the epicentre Depression is the leading cause of disability and one of the most costly ADHD is the most common childhood psychiatric disorder Antidepressants and Antipsychotics, together, outsell every other class of drugs Widespread realisation that unless you optimise Brain Health, nothing else matters Changing consumer needs, together with massive coverage increases, demanding proportionate gains in efficiency US data (~40% of global) # affected # clinical visits pa Depression 15 million 85 million ADHD 5 million 7 million 6

7 Current odds ratios Chance of getting a successful outcome % right antidepressant first time (STAR*D study and 8 weeks to find out). Schizophrenics persisting with same medication (Catie study) Value context: More than 100m US clinical visits for depression pa ($100bn) More than 250m antidepressant prescriptions pa ($12bn) 163 drugs in R&D for Dep/Sch/ADHD (up to $1bn / drug) <30% <25% R&D new CNS Brain drug approved <10% Exiting: 7

8 Depression gold standard Depression is a definition based on 17 questions (in clinical practice usually 9 questions), no biological measures Depression is a score of >18 The mechanism of the antidepressant effect of Viibryd is not fully understood FDA approval Jan 11, Clinical Data Inc Latest antidepressant study finding (Takeda): significant reduction in depression vs placebo in non US patients but no change in US patients Psychiatry remains the only medical specialty that measures nothing in the course of diagnosis and treating patients Dr John Rush, PI STAR*D 8

9 Biomarkers are the new standard Biomarkers: objective and biologically based measures are more robust basis for guiding treatment / drug development / investment decisions FDA (2006): diagnosis of psychiatric disorders is based on symptom presentation...there are no diagnostic tests to distinguish an initial presentation of depression...identification of such markers would improve clinical trials and better target a patient s disease in clinical practice NIMH (2007): it will be necessary to define, measure, and link basic biological and behavioral components of normal and abnormal functioning Brain Resource (2001) began building world s largest brain database to identify diagnostic and treatment prediction Biomarkers 9

10 Competitive advantage Brain Resource International Database is the world s largest brain database (10years/100k datasets) and a unique engine room for identifying new Biomarkers and products Standardized acquisition measures using multiple technologies on the same subject and centralized processing facility efficiencies Healthy controls and clinical subjects pre and post medication Self fuelling database growth through consenting users Largest Biomarker study in the world ispot Brain Resource uses the best insights from its database to develop new scalable products Selling products today based on these new database insights 120,000 Total datasets in Database 100,000 80,000 60,000 40,000 20,000 0 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 10

11 Brain Resource International Database 165 Standardized Measures Database Cognition Clinical Questionnaire Structure and blood flow Genetics Speed of electrical brain function 11

12 1.Are you recruiting who you think? Power of a Database Outliers impacting statistics 2.Extent of treatment response for two antidepressant drugs: drug 1 more effective than drug 2 but both statistically significant 12

13 Biomarker engine Industrial strength Brain Resource analysis engine rank orders and identifies key diagnostic and treatment prediction Biomarkers 4 Measures 345 ADHD subjects Inhibition disturbance in this 50 subject subgroup more likely to respond to a non-stimulant medication 13

14 ispot Depression and ADHD study Identifying Biomarkers that predict treatment response testing 3 most commonly prescribed drugs (40% market share) Crossed important milestones 1,000th Depression and 150th ADHD subject acquisition Deliver major enhancements for WebNeuro suite of products Implications for new drug R&D (recent Biomarker deals: Lilly /Avid $800m, Takeda / Zinfadel s $87m) Analysis, patents, publications and FDA PMA submission all underway Publication and FDA approval means: Market diagnostic claims Increased clinical adoption (85m clinical visits). Increased reimbursement Further product validation Pricing power 3,100 ispot Acquisitions (Depression & ADHD) 2,900 2,700 2,500 2,300 2,100 1,900 1,700 1,500 Dec 09 Mar 10 Jun 10 Sep 10 Dec10 14

15 Benefits of Clinical Product How can I understand my patient s brain and make the best decisions? 15

16 WebNeuro A 35 minute objective Brain Test that can be taken on a home computer: Determine the best treatment option for each individual in the clinical products Personalize online training recommendations for each individual in the consumer products Reports generated within minutes after completing test $25 per report, 85m clinical visits pa in the US for depression alone Assessment that powers scalable commercial products also still sold to researchers. 16

17 Clinical Reports Reports for clinicians include: Patients cognitive strengths and weaknesses compared to BRID Decision Support for various disorders (incl ADHD, Depression) Objective Cost effective Easy to Administer Easy to integrate into workflows Clinician productivity 17

18 Benefits to Consumer How can I discover my own brain capacity and train it to perform at my best? 18

19 Personal Dashboard to activate and monitor everything Brain Training portal that brings together a range of games and brain insights into one site Personalized and scientifically based. Developed using brain insights of what best gets the brain to change and be more effective Master stress, boost memory, positivity and productivity Published study showing 14% improvement in productivity. Charge PEPM for Employers or $10 per month for consumers Current sales pipeline has 8 Employers covering 650,000 employees and another 20 in process (17,000 employers) 19

20 The Experience Includes tools to Know, Train and Optimize your brain see introductory video & SharpBrains industry recognition Know your brain with our assessment Train your brain using Games & Exercises Track your improvement on your Dashboard 20

21 Up-Sell Consumer Products Example below is MyCalmBeat a heart rate monitor and desktop application to reduce stress Retail price point is $49.50, with employers receiving discounts to offer to their employees

22 Value Creation Brain Resource is riding the wave of demand for Brain Health Solutions The world s largest Database is an unmatched engine room for identifying new Biomarkers and develop scalable products Current scalable Brain Health Solutions are targeting and existing need in millions of users Growth to come from marketing initiatives and IP: MyBrainSolutions ($PEPM) from growth in Employer and consumer users and also upsells eg MyCalmBeat WebNeuro ($per report) growth tied to the number of reports / healthcare providers using the product Patents, publications and FDA filings of Depression and ADHD Brain diagnostic tests increase adoption Strategic deals with distributors and Pharma 22