H.C. Wainwright Global Investment Conference September 6, 2018 OTC: PRED predtechgroup.com
Safe Harbor This presentation contains forward-looking statements. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as "expects," "anticipates," "intends," "estimates," "plans," "potential," "possible," "probable," "believes," "seeks," "may," "will," "should," "could," or the negative of such terms or other similar expressions. The Company cautions readers not to place undue reliance on any forward-looking statements which speak only as of the date made, are based on certain assumptions and expectations which may or may not be valid or actually occur, and which involve various risks and uncertainties, including but not limited to risk of market acceptance; economic conditions, unanticipated operating costs, new market entrants, changes in technology, ability to develop strategic relationships, ability to hire and retain necessary personnel, adequate of financial resources, health care reform, changes in government regulation, ability to obtain adequate reimbursement from insurers, ability to protect intellectual property, ability to obtain tissue from human donors that is necessary for our HCT/P products, conduct of lab operations, meeting FDA requirements, thinly traded market for our securities, ability to obtain or maintain listing on NASDAQ or an exchange, lack of operating history and other risks. Actual results may differ materially from those set forth in this presentation due to such risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this presentation to reflect events or circumstances after the date hereof. 1
Vision Statement Improving lives through data analytics, diagnostics and precision biopharmaceutical solutions. 2
Company Overview Operates Three Subsidiaries Develops and commercializes novel genetic-based diagnostics and therapeutics Initial focus is on endometriosis and fertility, with pipeline programs in women s health and spinerelated disorders Genetic-based diagnostics allow precision medicine/therapeutics at earliest possible point of intervention Develops and commercializes regenerative human tissue, human cell and cellular products Core competency in cell and tissue processing Through fully integrated CLIAcertified, CAP-accredited and AATB registered laboratory Four commercialized products Secures procurement of tissue for Predictive Biotech products Biorepository of DNA, postpartum placental cells and tissue and related health care records Cell and tissue source for autologous and allogeneic products Research and development Making cell and tissue banking affordable to all mothers 3
Predictive Technology Group Management Team Name Bradley Robinson In Process Tim Lacy Paul Evans Michael Herbert John Nelson, M.D. Mike Dey, Ph.D. Eric Olson Title Chief Executive Officer Chief Financial Officer Chief Revenue Officer Chief Operations Officer Chief Marketing Officer Chief Medical Officer CEO Predictive Therapeutics CEO Predictive Biotech 4
Predictive Technology Group Advisory Board Name Ronald Barhorst Hugh S. Taylor, M.D. Nick M. Spirtos, M.D. John Sorrentino Jonas Cedergren Ken Ward, M.D. 5 Title ING Financial - CEO (retired 2014) Yale School of Medicine New Haven Hospital - Professor and Chair, Department of Obstetrics, Gynecology and Reproductive Sciences. Medical Director Women s Cancer Center of Nevada Pfizer - COO, Pediatrics, Vaccines, R&D Managing Director - JC Capital Advisors Juneau Biosciences - CEO
Investment Highlights Proven management team with success from R&D, to operations and commercialization First product line - internally developed Human Cell and Tissue Products - launched in 2017 with ongoing, strong revenue growth that has established PRED as the industry leader Expect to launch 2 novel, genetic-based endometriosis and fertility diagnostic/prognostic tests in late 2018 Broad, follow-on pipeline of diagnostics and therapeutics in the near-, mid-, and longterm, including: Novel endometriosis therapeutic to treat and suppress/delay disease progressions with clear regulatory path in this large, underserved market Pipeline of genetic-based diagnostics for hard-to-diagnose women s health and spinal disorders Cash positive operating position with no debt (only operating payables) Pursuing a near-term NASDAQ listing 6
Growth Drivers Continued expansion of existing human cell and tissue lines Allograft sales in 2017 exceed 10,000 and 2018 YTD exceed 20,000 2X 2017 allograft sales in first eight months of 2018 +30,000 allografts used in human patients de-risk product development as allograft results predict outcomes of FDA clinical studies Allograft sales and patient data accelerate and de-risk product development and reduce clinical trial timelines Near-, mid- and long-term proprietary product and technology platforms, driven by significant, proprietary R&D assets and strong intellectual property positions Proven national sales infrastructure with ability to commercialize new products and expand into complementary sectors 7
Advanced regenerative medicine products that enhance the body s natural ability to heal and augment current therapies
2018 Strong Revenue Growth - Cell and Tissue Products 2017 and 2018 Sales Actual vs Forecast Year end: June 30 $3,000,000 $2,500,000 $2,000,000 2018 FY Q1 Q2 Q3 Q4 FY Actual $2.2 $3.2 $4.2 $7.2 $16.8 Forecast $1.2 $2.0 $3.2 $4.0 $10.4 Exceeded $1.0 $1.2 $1.0 $3.2 $6.4 Revenue growth continues to accelerate Every quarter to date exceeded forecast CAGR 153.6% (Since 2017) Margins continue to improve $1,500,000 $1,000,000 $500,000 9 $- Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar April May June 2017 2018 Forecast Actual
Overview Predictive Biotech was established to: Provide advanced regenerative medicine products Enhance the body s natural ability to heal Augment and co-administration to current therapies Develop cell and tissue processing platform What is Regenerative Medicine? Regenerative medicine is quickly emerging as a therapeutic disrupter across a wide spectrum of diseases and becoming an accepted therapeutic for how certain human ailments are managed and treated Allogeneic human cell and tissue products are able to supplement the body s natural healing process. 10
How does Regenerative Medicine Work? As our bodies age, we experience: Longer healing times Increased inflammation Changing chemical environment Cell exhaustion (cell aging) Building Blocks: Over time, healthy tissue can become dysfunctional due to age and injury. A human cell and tissue product (HCT/P) is administered to a recipient to repair, reconstruct, replace, or supplement the same basic functions of the recipient s cells or tissues The human body utilizes a variety of tissue and cell interactions to support the healing process. Predictive s human cell and tissue allografts supplement similar tissue in your body via scaffolding, growth factor, homeostatic and general cytokines 11
Product Portfolio 12
Procurement and Process 13
Improving lives through data analytics, diagnostics and precision biopharmaceutical solutions.
Research and Development Platform Assets Library of 300,000 DNA samples with genetic birth defect or serious maternity issue HIPAA compliant Collected from most genetically diverse population in the U.S. Believed to be the world s largest DNA library related to women s health Proprietary genealogy database used to accelerate genetic discoveries Corresponding proprietary genealogy database developed from >50,000 public sources Approximately 36 million names in the database 15
What is Endometriosis? A painful disorder in which tissue that normally lines the inside the uterus the endometrium grows outside the uterus. Affects 1 in 10 women during their reproductive years * 27 million symptomatic women in U.S. 176 million women worldwide 30-50% of women with endometriosis may experience fertility issues ** One of the leading causes of female infertility** No effective non-surgical method to diagnose No therapeutic cure *Macer, et. al, Endometriosis and Infertility: a review of the pathogenesis and treatment of endometriosis-associated infertility Obstet Gynecol Clin Dec. 2012 **We describe a range because the incidence depends on method used to look for endometriosis, age and characteristics of the infertility patient cohort: i. "The incidence of endometriosis among infertile women is between 30% and 45%, and has been as high as 68% in centers with laparoscopists who are proficient at finding subtle endometriosis." Marian D. Damewood, Pathophysiology and Management of Endometriosis, Journal of Family Practice (July 1993). ii. It has been reported that 20-68% of women with endometriosis have some degree of infertility. Marcoux et. al, New England Journal of Medicine, 337:4 Laparoscopic Surgery in Infertile Women with Minimal or Mild Endometriosis (1997). iii. "Early studies suggested that 25% to 50% of infertile women have endometriosis and that 30% to 50% of women with endometriosis are infertile." Fertility and Sterility Vol. 86, Suppl 4, November 2006. 16
Problem #1: Endometriosis Underlying Infertility 25-50% of infertile women have endometriosis* IVF complications are greater in women with active endometriosis Increased risk of adverse pregnancy outcomes in women with endometriosis Evidence-based diagnosis for endometriosis was accompanied by significant drop in IVF success rates ** No reliable laboratory test or surgical diagnosis * Bulletti, et al; Endometriosis and Infertility J Assist Reprod Genet, August 2010 **Molinaro, et al; Fertil Steril 2009;92:2088 90 by American Society for Reproductive Medicine 17
Solution: Suite of Endometriosis and Infertility Tests Diagnostic Test ARTGuide Non-invasive diagnostic test for endometriosis and other genetic causes of infertility. Indicated for the 1 in 8 women with infertility and leads to better decision making regarding IVF and other treatments Fertility Dx ARTGuide plus expanded carrier screening plus chromosomal microarray most comprehensive test panel for genetic abnormalities ENDORisk Identifies patient s risk for endometriosis in women with symptoms CLIA-validated LDT test with no required FDA approvals 18
ARTGuide : Test Development Endometriosis R&D based on: >30,000 endometriosis patients >100,000 sequenced population controls Validation Comprehensive 2 phase GWAS discovery 3,000 exomes sequenced to detect low frequency variants >1,000 useful markers patented Independent training cohort, 3 different test validation cohorts 19
ARTGuide Test 3 classes of markers SNP (70 SNPs) SNP (1,300 mutations) Sequencing (10 genes) Integrating genetic risk with clinical criteria achieves >90% Area Under Receiver Operator Characteristic Curve (ROC) >1,400 endometriosis markers Human genes 4 clinical questions Strong positive and negative predictive values Cost of goods to assay all markers is less than $100 per sample Run on Next Gen Sequencer 20
ARTGuide & Fertility Dx Commercialization First Products to Market Efficient sales to large, yet highly concentrated market 480 assisted reproduction technology (ART) clinics in the U.S.; 80% of market in 6 metro regions Self-pay test with no reliance on reimbursement 8-10 sales representatives can cover ART market Market research based on survey of 20 infertility specialists All expressed interest, 1/3 would offer test to 100% of new patients Survey indicates average of 35 prescriptions / month / doctor Initial targets are 15 larger clinics for clinical research / KOL development Assuming conversion of 12 clinics, each with 9 doctors, produces >$150 million in annual revenues 21
Problem #2: Endometriosis and Chronic Pain Abnormal tumors cause bleeding, scarring and inflammation Endometriosis can cause chronic, debilitating pelvic pain No reliable laboratory test Healthcare costs are 63% higher for affected women Patients miss an average of one week each month from work Annual economic costs exceed $85 billion, e.g., two-thirds is associated with lost productivity, and one-third direct health care costs 86.5% of women with endometriosis presented depressive symptoms To be honest, ENDO ruins my life it robs me of days each month I am at my wits end with this disease. It always wins and I am fighting a war against Endo in my body. - Juneau Biosciences Research Participant Human Reproduction, Volume 27, Issue 5, 1 May 2012, Pages 1292 1299 Fertil Steril 2011 Aug;96(2):366-373.e8 Eur J Obstet Gynecol Reprod Biol. 2009 Jan;142(1):53-6 22
Solution: ENDORisk and NHP-07 Therapeutic Diagnostic - ENDORisk Predictive genetic test for endometriosis covered by key issued and pending patents Incorporates proprietary endometriosis, pain and inflammation markers with high predictive value based on patented DNA markers Therapeutic NHP-07 Proprietary therapeutic for endometriosis prevention and/or suppression Can be administered prior to disease development or after exhibiting initial symptoms to suppress/delay disease progression Clear regulatory path with combination of FDA approved compounds 23
Competitive Landscape No competitors for predictive DNA endometriosis test Small company has developed CNV markers Immunologic, protein, gene expression, mirna test, endometrial biopsy, CT scan tests under development Accelerating pharma interest in endometriosis AbbVie received FDA approval for Orilissa on June 24, 2018 Myovant $218 million IPO in October 2016 (now $1.5 billion market cap) developing candidate Relugolix ENDORisk is a potential companion diagnostic for each of these market participants 24
Product Pipeline in Spine Disorders Current diagnostic methods are invasive and expensive Need for diagnostic to determine course of care for better outcomes Need for payers to better determine the risk of the insured population Scoliosis Diagnostic Test Proprietary genetic-based test predicts disease progression Degenerative Disc Disease Diagnostic Test Proprietary genetic-based test predicts disease progression 25
2017 2019 Quarterly Financials 8,000,000 7,000,000 7,161,157 7,016,989 6,000,000 5,000,000 3,889,656 4,000,000 1,885,443 3,000,000 2,000,000 1,417,582 1,000,000 0-1,000,000 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 (596,232) -2,000,000 Total Income Gross Profit EBITDA Linear (Total Income) Linear (Gross Profit) Linear (EBITDA) 26
Predictive Consolidated Financial Highlights in 000s FYE 2018 3 FYE 2017 3 Change FYE 2017 3 FYE 2016 3 Change Revenue $ 16,624 $ 2,585 543.1% $ 2,585 $ 75 3346.7% GP % 76.1% 70.9% 7.3% 70.9% 0.0% 100.0% R&D % 11.4% 3.3% 245.5% 3.3% 1.3% 153.8% Sales % 1 32.1% 30.2% 6.3% 30.2% 9.0% 235.6% G&A % 1 22.0% 32.5% (32.3)% 32.5% 1,843.3% (98.2)% Net Inc. (12,097) (6,205) 95.0% (6,205) (16,629) (62.7)% Adj NI 2 (1,940) (3,673) (47.2)% (3,673) (1,101) 233.6% Adj EBITDA 2 2,640 21 12,471.4% 21 (108) (119.4)% Cash from Ops (350) 918 (138.1)% 918 (141) (751.1)% June 30 Fiscal Year End For further detail see audited financials (1) Excludes non-cash compensation (2) Non-GAAP measurement (3) June 30 fiscal year end 27
In Summary Proven management team with success from R&D, to operations and commercialization First product line - internally developed Human Cell and Tissue Products - launched in 2017 with ongoing, strong revenue growth that has established PRED as the industry leader Expect to launch 2 novel, genetic-based endometriosis and fertility diagnostic/prognostic tests in late 2018 Broad, follow-on pipeline of diagnostics and therapeutics in the near-, mid-, and longterm, including: Novel endometriosis therapeutic to treat and suppress/delay disease progressions with clear regulatory path in this large, underserved market Pipeline of genetic-based diagnostics for hard-to-diagnose women s health and spinal disorders Cash positive operating position with no debt (only operating payables) Pursuing a near-term NASDAQ listing 28