2017: Value Growth Year
May 2017
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of such words as “before,” “track,”
“will,” “should,” “could,” “anticipates,” “intends,” “guidance,” “objectives,” “optimistic, “ “future,” “expects,” “plans,” “estimates,” “continue,” “drive,” “strategy,” “potential,” “potentially,” “growth,”
“long-term,” “projects,” “projected,” “intends,” “believes,” “goals,” “sees,” “seek,” “develop,” “possible,” “new,” “emerging,” “opportunity,” “pursue” and similar expressions that do not relate to
historical matters. Forward-looking statements in this presentation may include, but are not limited to, statements or inferences about the Company’s or management’s beliefs or
expectations, including with respect to the effectiveness and design of its product candidates, success of its collaborations, clinical trials and pre-clinical development efforts and programs,
and its ability to obtain and maintain regulatory approval for its implant products, bioreactors, scaffolds and other devices we pursue, including for the esophagus or airway; the outlook for
the life sciences industry and the field of regenerative medicine; the Company’s current products or products in development; the Company’s business strategy; the Company’s anticipated
regulatory approvals; future revenues and earnings; the strength of the Company’s market position, business model and intellectual property rights; opportunities or potential opportunities
in the field of regenerative medicine and related markets; the success of treatments utilizing the Company’s products or product candidates; the market demand and opportunity for the
Company’s products, or the product candidates it is developing or intends to develop and the Company’s plans, objectives and intentions that are not historical facts.
These statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that may cause the Company’s actual results to differ materially from
those in the forward-looking statements include the success of the Company’s collaborations, clinical trials and pre-clinical development efforts and programs, which success may not be
achieved on a timely basis or at all; the Company’s ability to obtain and maintain regulatory approval for its implant products, bioreactors, scaffolds and other devices it pursues, including
for the esophagus or airway, which approvals may not be obtained on a timely basis or at all; the Company’s ability to access debt and equity markets and raise additional funds when
needed; the number of patients who can be treated with the Company’s products; the amount and timing of costs associated with the Company’s development of implant products,
bioreactors, scaffolds and other devices; the Company’s failure to comply with regulations and any changes in regulations; unpredictable difficulties or delays in the development of new
technology; the Company’s collaborators or other third parties we contract with, including with respect to conducting any clinical trial or pre-clinical development efforts, not devoting
sufficient time and resources to successfully carry out their duties or meet expected deadlines; the Company’s ability to attract and retain qualified personnel and key employees and retain
senior management; potential liability exposure with respect to the Company’s products; the Company’s inability to operate effectively as a stand-alone, publicly traded company; the actual
costs of separation may be higher than expected; the availability and price of acceptable raw materials and components from third-party suppliers; difficulties in obtaining or retaining the
management and other human resource competencies that the Company needs to achieve its business objectives; increased competition in the field of regenerative medicine and the
financial resources of its competitors; the Company’s ability to obtain and maintain intellectual property protection for its product candidates; the Company’s inability to implement its growth
strategy; plus factors, plus factors described under the heading “Item 1A. Risk Factors”, in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2017 or described
in the Company’s other public filings. The Company’s results may also be affected by factors of which the Company is not currently aware. The Company may not update these forwardlooking statements, even though its situation may change in the future, unless it has obligations under the federal securities laws to update and disclose material developments related to
previously disclosed information. Except as otherwise noted herein, any forward looking statements represent the Company’s estimates as of May 22, 2017 and should not be relied upon
as representing our estimates as of any other date.
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Biostage | Regenerations Ahead
BIOENGINEERING ORGAN IMPLANTS
FOR URGENT UNMET NEED
GROUNDBREAKING PROOF-OF-CONCEPT
PRECLINICAL DATA
FOR LARGE UNDERSERVED PATIENT
POPULATIONS. PROPRIETARY TECHNOLOGY AIMS
TO RADICALLY IMPROVE TREATMENT PARADIGMS
FOR PATIENTS SUFFERING FROM ESOPHAGEAL
CANCER & ESOPHAGEAL ATRESIA.
WITH WORLD CLASS COLLABORATORS.
GROWING BODY OF POSITIVE RESULTS
EXPECTED TO BE PREDICTIVE OF UPCOMING
HUMAN CLINICAL STUDIES.
EXPERIENCED LEADERSHIP TEAM
2017 POSITIONED TO BE SIGNIFICANT
VALUE GROWTH YEAR
WITH THE NECESSARY KNOWLEDGE
AND TRACK RECORD OF CLINICAL-TOCOMMERCIAL SUCCESS.
COMPANY IS WELL POSITIONED TO DRIVE
SIGNIFICANT SHAREHOLDER VALUE WITH
TRANSFORMATIONAL PIVOT TO A CLINICAL
STAGE COMPANY.
3
Cellspan™ Implants | Addressing Significant Unmet Medical Needs
Esophageal
Cancer and Atresia
Total Revenue Opportunity
Exceeds $1.5 Billion
Stage I & II diagnosed
~15,000 Patients in US & EU
Non Small Cell
Lung Cancer (NSCLC)
Affecting bronchus
~5,000 Patients in US & EU
Tracheal Cancer,
Stenosis and Trauma
~8,000 patients
in US & EU
Orphan Designation for
Esophageal and Tracheal
Implants Provides Period
of Market Exclusivity
4
The Unmet Need | Limited Options with Serious Consequences
Current Treatment
• Complex surgical resection
requiring stomach and /or
intestinal “pull up” to create
replacement esophagus
Unmet Need
• High rate of complications,
low quality of life and impact
on mortality
Stomach Pull Up
Intestinal Resection
5
Esophageal Atresia | A Life-Threatening Condition and Urgent Need
Approximately
1 in 2,500 babies
in the US is born
with esophageal
atresia
Gap between upper and lower esophagus
Congenital defect
Active collaboration with
Connecticut Children’s Medical Center
Potential to qualify for rare pediatric disease priority
review voucher under 21st Century Cures Act
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Robust Cellspan™ Implants Pipeline
Product Pipeline
DEVELOPMENT
PRECLINICAL
CELLSPAN ESOPHAGEAL IMPLANTS
IND
CLINICAL
2017
2018
CELLSPAN PEDIATRIC ESOPHAGEAL IMPLANTS
2017
2018
2019
CELLSPAN BRONCHIAL IMPLANTS
2017
2019
2020
2018
2019
2020
CELLSPAN TRACHEAL IMPLANTS
2017
7
Cellframe™ Technology | Proprietary and Versatile
Surgery
scheduled
3-4 weeks
Cells from a
biopsy are
retrieved
from the
patient
Cells are
taken to the
cell lab and
are expanded
for 21 days
Cells are then transferred on to
the Cellframe scaffold
5-7 days in
a rotating
bioreactor
Cellspan
implant is
ready to be
placed in
patient
8
The Regeneration Process | Cellframe™ Scaffold to Cellspan™ Implant
POST-SEEDING
PRE-SEEDING
Electron microscopy showing
the scaffold before and after
the seeding with adipose
mesenchymal cells (aMSC)
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Segmental Esophageal Replacement | Rapid Healing in the First 21 Days
Cellspan implant is
inserted after
esophageal resection
Rapid healing response and initial regeneration
over the Cellframe™ scaffold
Scaffold is removed
at 21 days
10
A Groundbreaking Solution | Cellspan™ Implants
Cellspan Esophageal Implant
being placed in the thoracic
esophagus in large animal
model
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IND for Phase I | Meaningful Data
The ongoing animal studies confirm that the
We believe that the
data is very robust
Yucatan mini-pig large animal model
as the regenerative process has been
(50-80 Kg) is
highly reproducible
predictable of clinical conditions
in terms of the progression of tissue growth
and the timeline of it
that require the repair of the esophagus after a surgical
resection or because of a congenital malformation
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IND for Phase I | Current Status of Animal Studies
One non-GLP study has
two animals ongoing at
Two GLP studies on-going
391 and 361 days
Animals will provide data for
The animals have been
without a stent for
histology and
mechanical testing
6-7 months
Next Studies
Cell fate: GFP tagging
to track the MSCs seeded on the scaffold
Mechanical testing study.
Requested by FDA after pre-IND call
(some tests already performed)
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Segmental Esophageal Replacement | Successful Regeneration
Day 21
Day 361
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Connecticut Children’s Medical Center Studies
Piglet Weights
Courtesy of Christine Finck, MD
Surgeon-in-Chief
Connecticut Children’s Medical Center
15
Intellectual Property and Proprietary Platform
PROPRIETARY PLATFORM, PROCESSES, TECHNOLOGIES
AND PRODUCTS
•
Issued patents and patent applications relating to bioreactor,
scaffold, cells and unique combinations and methods
•
Legacy of bioreactor development, years of scaffold innovation,
thought leader involvement, unique trade secrets and proprietary
information regarding organ regeneration
•
Received Orphan Drug Designation for the esophagus; if approved,
extends market exclusivity and financial opportunities
•
First mover opportunity; breakthrough approach in underserved
markets; creating new standard of care in orphan markets;
expected to set high barriers for new competitive threats
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Financial Snapshot
NASDAQ
BSTG
Recent Price
$0.30*
52-Week Range
$0.23-1.59*
Market Cap
$11.1M*
Shares Outstanding
37.1M*
Cash on Hand
$6.6M**
Cash raised in Feb 2017,
net of fees
$6.8M
1/4ly Cash Burn, LTM
$2-3M
* As of May 19, 2017
** As of March 31, 2017
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Potential for Significant Upside
Selected Companies Focused on Regenerative Medicine Markets
COMPANY
TICKER
PRODUCT & DEVELOPMENT STAGE
MARKET CAP*
InVivo Therapeutics
NVIV
Neuro-Spinal Scaffold™
Phase 3
$128M
Organovo
ONVO
exVive3D™ Human Liver Tissue
(available for use in toxicology and other
preclinical drug testing)
$348M
Mesoblast
MESO
Phase 3
$885M
Athersys
ATHX
MultiStem®
Phase 2
$165M
Cytori Therapeutics
CYTX
Cytori Cell Therapy
Phase 3
$25M
* At April 24, 2017
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Experienced Executive Leadership Team
Jim McGorry, MBA
Chief Executive Officer
Seasoned Life Science executive with more than 30 years of leadership
experience in medical technology and biotechnology businesses.
Prior: Genzyme, Champions Oncology, Baxter Healthcare.
Saverio La Francesca, MD
President & Chief Medical
Officer
Cardiothoracic surgeon: performed over 200 organ transplants.
Prior: DeBakey Heart & Vascular Center, Texas Heart Institute
Current collaborator with U. Texas Medical Branch Lung Regeneration
Research Team.
Tom McNaughton, CPA
Chief Financial Officer
Experienced financial executive with a background that spans start-ups
and large companies.
Prior: Harvard Bioscience, Cabot Corporation, Tivoli, Deloitte.
Laura Mondano
VP, Regulatory Affairs
Regulatory affairs certified with more than 20 years experience supporting
development, commercialization and post-approval life-cycle management.
Prior: Histogenics Corporation, Genzyme, Anika Therapeutics, Boston Scientific.
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Accomplished Board of Directors
John F. Kennedy
Chairman
Jim McGorry, MBA
Director and CEO
John J. Canepa
Director
Blaine H. McKee, PhD
Director
Thomas Robinson
Director
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Rapid Pivot Toward Clinical Stage Company
POSITIVE
CONFIRMATORY
POC PRECLINICAL
STUDY RESULTS
GROWING BODY OF
PRECLINICAL DATA
FROM ONGOING
STUDIES
PRE-IND MEETING
WITH FDA PROVIDES
CLARITY
COMPANY ON
TRACK TO INITIATE
FIRST IN-HUMAN
STUDY
WITH MAYO CLINIC
DEMONSTRATE
SUCCESSFUL
ESOPHAGUS
REGENERATION,
ADDRESSING
URGENT, UNMET
MEDICAL NEED
CONTINUES TO SHOW
CLEAR PATTERN OF
REGENERATION
FOR REQUIREMENTS
FOR ESOPHAGEAL
IMPLANT IND FILING (Q3
2017)
FOR ESOPHAGEAL
IMPLANT WITH
ORPHAN DESIGNATION
(Q4 2017)
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Summary
• Building on a strong foundation from 2016
• Continued progress with our Cellframe™ technology
TRANSITIONING TO
A CLINICAL STAGE
COMPANY IN 2017
• Growing body of data and commitment to communicating progress
• Strong surgeon clinical interest
• Clear roadmap and strategic imperatives
• Commitment to collaborations: hospitals, surgeons, industry
• On track to file IND in Q3
• 2017 positioned to be a transformational year
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