Investor Presentation May 2016
Forward Looking Statements Any statements contained in this presentation that do not describe historical facts may constitute forwardlooking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations of Echo Therapeutics, Inc. ( Echo ), but are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to Echo's ability to develop and obtain FDA approval of its CGM System; the availability of substantial additional equity capital to support Echo s research, development and product commercialization activities; and the success of Echo s business, research, development, regulatory approval, marketing and distribution plans and strategies. These and other factors are identified and described in more detail in Echo s filings with the SEC, including, without limitation, its annual report on Form 10-K for the year ended December 31, 2015, its quarterly report on Form 10-Q and its current reports on Form 8-K. Echo disclaims any intent or obligation to update these forward-looking statements. 2
Echo Company Overview Delivering Non-Invasive CGM Technology to Diabetics Echo Therapeutics (Nasdaq: ECTE) proven and proprietary technology continuously, and non-invasively measures glucose as effectively as leading invasive technologies Advancements in Echo CGM Technology Significant improvements made to accuracy, consistency, usability, and cost Echo s Addressable Market Echo is focused on helping the 29.1 million 1 in the U.S., 114 million 2 in China and 415 million 3 people worldwide with diabetes to manage their disease Currently only 8% of type 1 use CGM; the market is ripe for disruption Echo s Strategy Achieve CFDA approval, short term Establish relationships with FDA & EU Notified Body toward regulatory approval Continue development of non-invasive sensing technologies Utilize partnerships for commercialization for diabetes and other multi-billion dollar markets 1 http://www.diabetes.org/diabetes-basics/statistics/?referrer=https://www.google.com/ 2 http://www.bloomberg.com/news/articles/2013-09-03/china-catastrophe-hits-114-million-as-diabetes-spreads 3 lnternational Diabetes Federation 3
Investment Highlights NASDAQ: ECTE Transforma)onal Technology Pla2orm Large and growing market opportunity Partnership opportuni)es Non-invasive, continuous glucose monitoring Proprietary skin preparation device and glucose sensor Clinically validated $10 billion global glucose monitoring market $1.5 billion CGM market opportunity 415 million people with diabetes worldwide Operational and strategic China partnership with MTIA Opportunities with other diabetes companies Broad IP por2olio Value crea)ng milestones Advanced clinical development 9 U.S, ~40 foreign, ~25 pending patents Cover glucose sensor and methods and skin preparation Core patents expire mid-to-late 2020s CFDA trial/approval Partnerships Re-designed, lower-cost products Establish manufacturing Wearables financing 114 patients and 8,844 data pairs Average MARD of 11.9% 93 studies completed in 2015 4
Echo Therapeutics (NADSAQ: ECTE) Company Snapshot Ticker Nasdaq: ECTE Headquarters Iselin, NJ Employees 20 Common Stock Outstanding 1 Fully Diluted 1 11.4 M 25.1 M Share Price 2 $1.60 Average Volume 2 ~36,000 Market Cap 2 ~$18.3 M 1 Does not include effect of January 29, 2016 sale of $5.145 million convertible notes and warrants. On a proforma basis, 14.5 M Common Stock outstanding and 31.6 fully diluted. 2 As May 7, 2016 5
Echo s Proprietary System Non-invasive Continuous Glucose Monitoring Advancing our core technology for broad application in the diabetes market Skin Preparation Proprietary hand-held exfoliation device painlessly and precisely removes a portion of the dead layer of skin, or Stratum Corneum, for optimal glucose extraction Glucose Sensor & Bluetooth Transmitter Disposable sensor is applied directly to exfoliated area and continuously monitors glucose. Proprietary algorithm in reusable transmitter converts ISF measurements to blood glucose values and transmits data wirelessly Display and Software Architecture Custom applications display glucose trends and values on any standard platform. Published API makes it easy for developers to write Apps. Cloud server for storing glucose information and relaying data to remote apps 6
Technology Overview: Exfoliation & Glucose Detection Controlled removal of Stratum Corneum Stratum Corneum (outermost layer of dead skin) Epidermis (outermost layer of skin which serves as a barrier against the external environment ) Dermis (layer of skin above subcutaneous tissues/layer above where competitors insert needles) Glucose Oxidase enzyme Transmitter & Circuit Biosensor electrode Hydrogel (creates a seal over exfoliated area) Glucose diffusion into Gel 7
The Technology Works Numerous Clinical Trials Successfully Completed Clinical trials demonstrated that Echo s CGM non-invasively and continuously measures glucose in real-time in a way that accurately represents blood glucose levels Clinical Trials 7 studies, 114 patients, 8,844 data pairs 200 180 160 IRB Study 2015-001, Subject O-512 Site 1 Site 2 Site 3 Ref. BG Dexcom 220 200 180 Accurate Average MARD* for clinical studies was 11.9% Safe Echo s non-invasive CGM is safe with no adverse events detected Recent Experience Promising data up to 72 hours Current (na) 140 160 120 140 100 120 80 100 60 80 40 60 20 40 0 20 0 2 4 6 8 10 12 Time (hours) Blood Glucose (md/dl) *MARD: Mean Absolute Relative Difference; MARD is an evaluation of numerical accuracy represented as a percentage that indicates relative deviation of a sensor from a reference 8
Echo s Technology Summary of Clinical Trial Results Date Pa)ent Type # Pa)ents Data Pairs MARD (%) Jul 2008 T1/T2 10 1258 13.8 Nov 2009 T1/T2 10 820 12.8 Sep 2011 Healthy 12 1638 10.5 Dec 2011 T1/T2 20 2685 12.6 Apr 2012 CriCcal Care 15 601 12.3 Key Takeaways: The Technology Works Today Achieved MARDs similar to or better than leading invasive CGMs The Technology Works in Multiple Patient Types Healthy Type 1 and Type 2 Diabetics Hospital Patients Jul 2012 CriCcal Care 15 1208 9.0 Nov 2013 CriCcal Care 32 634 12.5 114 8844 11.9 9
Moving Our Technology Forward Adapting ICU technology for the consumer market Improving CGM accuracy, consistency, convenience and cost-effectiveness Exfoliator Sensor/Transmitter Display Improved Performance Effective & consistent exfoliations Updated and improved algorithm Consistent glucose tracking Simple mobile app to display data via BLE Published API for App developers Lower-Cost Less-expensive tips AA batteries Plastic enclosure Inexpensive disposable components Reusable transmitter Mobile platform replaces bulky, expensive monitor Consumer-Friendly Faster, 3-5 second exfoliation time Self-exfoliating design Ultra-thin, flexible housing Glucose data displayed on Android OS ios 10
Echo CGM Market Echo s Place in the Multi-Billion Dollar Diabetes Management Sector Accurate and reliable glucose measurements are the foundation for all diabetes related treatments and intervention Link CGM and pump for continuous care Echo CGM Echo CGM Correct types & doses of meds Provide complete picture of glucose trends and patterns Remote management of patient 11
How Echo s CGM Stacks Up Echo CGM System vs. Leading Competitors Dexcom G5 Target Markets Sensor Life Warm-up Time Calibrations Required MARD Medtronic Sof-Sensor Echo Sensor Bottom of sensor, no needle Out-patient diabetes Out-patient diabetes Out-patient diabetes 7 days (less accurate in first 4 days as seen in user manual) 6 days (less accurate in first few days) Up to 3 days (accurate immediately after warm-up time) 2 hours 2 hours 30 minutes Twice daily Four times a day Twice daily 9% 13.6% 11.9% historic (without improvements to exfoliation, sensor, or algorithm) Every 5 minutes Every 5 minutes Echo Every 5 minutes Reading Frequency Estimated Yearly Cost $5,985 $5,268 $2,500 Regulatory Status FDA Approved FDA Approved FDA meeting Q4 2016 Company Market Cap $5.75B $107.08B $10.0 M 12
Potential Echo Wearables Spin-Out Exciting Opportunities in Non-Regulated Markets Optimizing Performance for Elite Athletes Simplifying Dieting for Healthy and Sustainable Weight-Loss Promoting Healthy Living and Preventative Care Remote Monitoring for Greater Independence and Peace of Mind 13
Potential Echo Wearables Spin-Out Creating Value for Echo Therapeutics Outline v Echo Therapeutics would own a majority interest in Echo Wearables spin-out creating value for Echo Therapeutics Mutually Beneficial Relationship v Feedback from potential partners mandating structural alignment v Echo Wearables would be able to raise independent capital Echo Therapeutics Proprietary noninvasive CGM technology Advances in technology Data generated from users Echo Wearables v Echo Wearables could design wearables focused product at no cost to Echo Therapeutics v Wearables market would not distract from diabetes product development 14
Business Development Update A Technology Company Focused on Partnerships Actively working with partners to manufacture and commercialize products in various segments Partnership Targets Diabetes related In 2015 we engaged 9 prospective partners Fields include: Drug, associated devices, academic institutions, diabetes equipment manufacturers, food companies, information providers, data amalgamators and hubs Wearables related In 2015 we engaged 87 prospective partners Fields include: Traditional Fitness devices, beverage companies, professional and division I sports teams and athletes, Olympic committees, lifestyle information services, weight-loss programs, nutritionists and big data companies 15
Echo s Partnership With MTIA Strong Manufacturing, Marketing, and Distribution Partner in China The goal of Echo s partnership with MTIA is to gain CFDA approval for Echo s CGM system and develop the product based on commercial costs Current Status: All documents have been transferred and translated Tech transfer complete In house testing in progress with domestically produced components Primary investigator on board Upcoming Events: Echo team to visit MTIA facilities in order to assist and confirm progress (Q1 2016) Commencement of CFDA clinical trials (Q3 2016) Echo Responsibilities Implement improvements to existing Gen 2 system Create and transfer all technical information Supportive testing of MTIA manufactured sensors Design and transfer API for China apps (IP protected) Consult with MTIA on next-gen sensor Implement standards for China s evolving regulatory requirements MTIA Responsibilities Receive and translate all historic documents Engage manufacturers and establish all requirements for manufacturing In house testing of domestically made sensors (confirmed by Echo) Integrate translated documents into Chinese based quality system Create regulator strategy and interface with CFDA Create protocol based on CFDA feedback Establish principle investigator and screen potential clinical sites 16
Echo s Intellectual Property Broad Intellectual Property Estate 9 U.S. patents, ~70 foreign patents, ~25 patents pending worldwide Most issued core patents expire mid-to-late 2020s Method and Device Patents cover a broad range of applications Glucose sensor and methods hydrogel formulation glucose measurement algorithm Diffusion and measurement glucose through prepared site Skin Preparation Electronic feedback control mechanism for precise and controlled removal of barrier Transdermal drug delivery Minimum of 10 new patent applications based on NextGen System 17
2016 Milestones Q1 2016: Q2 2016: Echo team visits China to support and confirm MTIA process Internal clinical testing of new sensor and hydrogel Q2 2016: Working prototype NextGen system Q3 2016: Begin CFDA trial Q3 2016: Q3 2016: Q4 2016: Q4 2016: Complete CFDA Trial and report preliminary data Initial clinical testing for NextGen system Initial meeting with FDA File for CFDA approval. 18
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