UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2013
NEOSTEM, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware (State or Other Jurisdiction of Incorporation) | 001-33650 (Commission File Number) | 22-2343568 (IRS Employer Identification No.) |
420 Lexington Avenue, Suite 350, New York, New York 10170
(Address of Principal Executive Offices)(Zip Code)
(212) 584-4180
Registrant's Telephone Number
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On November 7, 2013, NeoStem, Inc., a Delaware corporation (the “Company” or “NeoStem”), issued a press release relating to, among other things, the results of the Company's third quarter ended September 30, 2013. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
NeoStem, Inc. intends, from time to time, to present and/or distribute to the investment community and utilize at various industry and other conferences a slide presentation. The slide presentation is accessible on NeoStem’s website at www.neostem.com and is attached hereto as Exhibit 99.2. NeoStem undertakes no obligation to update, supplement or amend the materials attached hereto as Exhibit 99.2.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by reference in such a filing.
Forward Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1 hereto, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically preceded by words such as “believes,” “expects,” “anticipates,” “intends,” “will,” “may,” “should,” or similar expressions, although some forward-looking statements are expressed differently. Forward-looking statements represent the Company's management's judgment regarding future events. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. All statement other than statements of historical fact included in the Current Report on Form 8-K are forward-looking statements. The Company cannot guarantee the accuracy of the forward-looking statements, and you should be aware that the Company's actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including the statements under "Risk Factors" contained in the Company's reports filed with the Securities and Exchange Commission.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description | |
99.1 | Press Release dated November 7, 2013* | |
99.2 | Slide presentation of NeoStem, Inc. dated November 2013* | |
*Exhibit 99.1 and Exhibit 99.2 are furnished as part of this Current Report on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NEOSTEM, INC. | ||||
By: | /s/ Catherine M. Vaczy | |||
Name: | Catherine M. Vaczy, Esq. | |||
Title: | Vice President and General Counsel | |||
Dated: November 11, 2013
Exhibit 99.1
NeoStem Announces Third Quarter 2013 Financial Results and Provides Corporate Update
Company Now Has Cash Reserves in Excess of $50 Million
NEW YORK, November 7, 2013 (GLOBE NEWSWIRE) -- NeoStem, Inc. (NASDAQ: NBS) (“NeoStem” or the "Company"), a leader in the emerging cellular therapy market, today announced its third quarter results and provided highlights of its recent activities.
Robin L. Smith, MD, MBA, Chairman and Chief Executive Officer of NeoStem, commented on the results, “The quarter was marked by excellent progress across several operational and clinical areas. Our pipeline of proprietary cell therapy products continues to develop and we are on track to complete enrollment of our PreSERVE Phase 2 clinical trial with AMR-001 this year. We have expanded our senior management team with several key hires, strengthened our intellectual property portfolio and signed academic collaborations with the University of California, San Francisco (UCSF) and leading researchers relating to our human Regulatory T cells (Treg) platform.”
Dr. Smith added “With the recent, highly successful public equity offering, NeoStem now has cash reserves in excess of $50 million to enable us to advance multiple pipeline projects, grow the contract development and manufacturing business of our wholly-owned subsidiary PCT and position the Company for strategic and business development partnerships. In addition, PCT has reported 50% more Clinical Service active clients, compared to the same period last year. Through Clinical Services, PCT offers its clients and NeoStem process development and clinical manufacturing capabilities on both the East and West Coasts of the U.S., and we expect to complete the expansion of both facilities by the first quarter of 2014.”
Third Quarter Financial Highlights
• | Revenues from continuing operations for the three and nine months ended September 30, 2013 were $3.7 million and $10.6 million, respectively, compared to $4.4 million and $11.6 million for the same periods in 2012. |
• | For both the three and nine months ended September 30, 2013, revenues for Process Development decreased, principally as a result of our accounting policy for revenue recognition of those client services. Those revenues are only recognized at the time that a particular contract is completed. Process Development revenue is expected to continue to fluctuate from period to period because of this policy. |
• | For the three and nine months ended September 30, 2013, net losses from continuing operations were $9.3 million and $26.8 million, respectively, compared to $8.5 million and $23.8 million for the same periods in 2012. |
• | For the nine months ended September 30, 2013, net loss from continuing operations excluding non-cash charges was $19.9 million (see reconciliation in the Appendix below). |
• | NeoStem ended the third quarter with $16.9 million in cash. Subsequent to September 30, 2013, NeoStem completed a public equity offering and received gross proceeds of approximately $40.3 million, before offering expenses, and raised an additional $1.0 million in cash through warrant and option exercises. |
Corporate Highlights for the Third Quarter and Recent Weeks
• | Continued enrollment in the PreSERVE Phase 2 clinical trial investigating NeoStem’s most advanced product candidate, AMR-001, in preserving heart muscle function after a severe heart attack. The data Safety Monitoring Board (DSMB) recommended continuing this trial following a third interim data and safety review. Enrollment is on track for completion in 2013 and data read out is expected 6-8 months after the last patient is infused. |
• | Executed agreements with UCSF and the laboratories of Jeffrey Bluestone, PhD and Qizhi Tang, PhD to collaborate on the development of human Regulatory T cells (Treg) for the treatment of type 1 diabetes. |
• | Continued the expansion of intellectual property including licensing 3 families of patents from UCSF related to the Company’s Treg platform. |
• | Appointed Stephen W. Potter as Executive Vice President. |
• | Appointed Douglas W. Losordo, MD, FACC, FAHA, as Chief Medical Officer. Dr. Losordo is a leader in cell therapy research and a renowned cardiologist. |
• | Appointed Robert Dickey IV as Chief Financial Officer. |
• | NeoStem subsidiary PCT entered into a collaboration with ATMI, Inc., a global technology company and leader in single-use bioprocess solutions. The two companies will collaborate on a non-exclusive basis enabling PCT and PCT’s affiliates to offer to their respective clients access to the Integrity® Xpansion™ technology platform from ATMI in order to develop cell therapies in a more cost effective and robust way. |
• | Transferred listing of shares to NASDAQ from NYSE MKT |
• | Effected a 1-for-10 reverse split of the Company’s common stock. |
Appendix
Use of Non-GAAP Financial Measures
The Company uses Net Loss from Continuing Operations Excluding Non-Cash Charges as a non-GAAP financial measure in evaluating its performance. This measure represents net loss from continuing operations, less equity-based compensation, depreciation and amortization, and other non-cash adjustments included in net loss from continuing operations. The Company believes that providing this measure to investors provides important supplemental information of its performance and permits investors and management to evaluate the core operating performance and cash utilization of the Company by excluding the use of these non-cash adjustments. Additionally, the Company believes this information is frequently used by securities analysts, investors and other interested parties in the evaluation of performance. Management uses, and believes that investors benefit from, this non-GAAP financial measure in assessing the Company's operating results, as well as in planning, forecasting and analyzing future periods.
Net Loss from Continuing Operations Excluding Non-Cash Charges has limitations as an analytical tool, and investors should not consider this measure in isolation, or as a substitute for analysis of the Company's results as reported under generally accepted accounting principles in the United States ("U.S. GAAP"). For example, this measure does not reflect the Company's cash expenditures, future requirements for capital expenditures, contractual commitments, or cash requirements for working capital needs. Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced in the future, and Net Loss from Continuing Operations Excluding Non-Cash Charges does not reflect any cash requirements for such replacements. Given these limitations, the Company relies primarily on its U.S. GAAP results and uses the Net Loss from Continuing Operations Excluding Non-Cash Charges measure only as a supplemental measure of its financial performance and cash utilization.
Nine Months Ended | |
September 30, 2013 | |
GAAP to NON-GAAP Reconciliation (millions) | |
Net Loss from Continuing Operations | $(26.8) |
Equity-Based Compensation | $5.4 |
Depreciation and Amortization | $1.2 |
Bad Debt Recovery | $(0.2) |
Deferred Income Taxes | $0.5 |
Net Loss from Continuing Operations Excluding Non-Cash Charges | $(19.9) |
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. Forward-looking statements include statements herein with respect to the successful execution of the Company's business strategy, including with respect to the Company's research and development and clinical evaluation efforts as well as efforts towards commercialization of cellular therapies, including with respect to AMR-001, the future of the regenerative medicine industry and the role of stem cells and cellular therapy in that industry and the Company's ability to successfully grow its contract development and manufacturing business. The Company's actual results could differ materially from those anticipated in these forward- looking statements as a result of various factors. Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the "Risk Factors" described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2013 and in the Company's periodic filings with the SEC. The Company's further development is highly dependent on future medical and research developments and market acceptance, which is outside its control.
CONTACT: NeoStem
Eric Powers
Manager of Communications and Marketing
Phone: +1-212-584-4173
Email: epowers@neostem.com
NASDAQ: NBS | 1 Investor Presentation NASDAQ: NBS November 2013 Transforming the Treatment of Chronic Disease
NASDAQ: NBS | 2 Forward-Looking Statements This presentation includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as well as historical information. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from anticipated results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentation, statements that are not statements of current or historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “plan,” “intend,” “may,” “will,” “expect,” “believe,” “could,” “anticipate,” “estimate,” or “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements, although some forward-looking statements are expressed differently. Additionally, statements regarding the future of the regenerative medicine industry and the role of stem cells and cellular therapy in that future, our ability to successfully develop and grow our business, including with regard to our research and development and clinical evaluation efforts and future marketing and sales in respect of AMR-001 and other cell therapies, the marketing and performance of our contract development and manufacturing business and our adult stem cell collection, processing and storage business are forward looking statements. Our future operating results are dependent upon many factors and our further development is highly dependent on future medical and research developments and market acceptance, which is outside our control. Forward-looking statements, including with respect to the successful execution of the Company's strategy, may not be realized due to a variety of factors and we cannot guarantee their accuracy or that our expectations about future events will prove to be correct. Such factors include, without limitation, (i) our ability to manage our business despite operating losses and cash outflows; (ii) our ability to obtain sufficient capital or strategic business arrangements to fund our operations and expansion plans, including meeting our financial obligations under various licensing and other strategic arrangements, the funding of our clinical trials for AMR-001 and Tregs, and the commercialization of the relevant technology; (iii) our ability to build the management and human resources and infrastructure necessary to support the growth of our business; (iv) our ability to integrate our acquired businesses successfully and grow such acquired businesses as anticipated, including expanding our PCT business internationally; (v) whether a large global market is established for our cellular-based products and services and our ability to capture a share of this market; (vi) competitive factors and developments beyond our control; (vii) scientific and medical developments beyond our control; (viii) our ability to obtain appropriate governmental licenses, accreditations or certifications or comply with healthcare laws and regulations or any other adverse effect or limitations caused by government regulation of our business; (ix) whether any of our current or future patent applications result in issued patents, the scope of those patents and our ability to obtain and maintain other rights to technology required or desirable for the conduct of our business; (x) whether any potential strategic benefits of various licensing transactions will be realized and whether any potential benefits from the acquisition of these licensed technologies will be realized; (xi) the results of our development activities, including our current Phase 2 clinical trial of AMR-001; (xii) our ability to complete our Phase 2 clinical trial of AMR-001 (or initiate future trials) in accordance with our estimated timeline due to delays associated with enrolling patients due to the novelty of the treatment, the size of the patient population and the need of patients to meet the inclusion criteria of the trial or otherwise; and (xiii) the other factors discussed in “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission (“the SEC”) on March 11, 2013 and elsewhere in this presentation and in the Company's other periodic filings with the SEC which are available for review at www.sec.gov under “Search for Company Filings.” All forward-looking statements attributable to us are expressly qualified in their entirety by these and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
NASDAQ: NBS | 3 Company Overview • Leader in cell therapy developing potentially transformative treatments for patients in several indications • Founded in 2006 • Integrated entity with 3 pipeline technology platforms and revenue generating contract development and manufacturing organization (CDMO) • 27.0M common shares outstanding (34.7M fully diluted) • 4.9M warrants that can bring in $80.9M to the Company • Market Capitalization: $177M • Over $50M in cash as of November 7, 2013 • Shares listed on NASDAQ, Ticker: NBS • Headquarters in New York City • GMP-compliant facilities in Allendale, NJ and Mountain View, CA • 110 employees as of October 31, 2013
NASDAQ: NBS | 4 Regenerative Medicine •Repair or replace damaged tissue and restore function •Novel regenerative therapies with potential to: Improve clinical outcomes Reduce overall healthcare costs
NASDAQ: NBS | 5 Investment Highlights • Unique business model that combines development of novel proprietary cell therapy products with a cell therapy manufacturing business • Diversified product development pipeline focused on cardiovascular disease, autoimmune disorders and tissue regeneration • Deep pipeline with near term catalysts • AMR-001, currently in a Phase 2 trial in patients with acute myocardial infarction, data expected in 2014 • Treg (T regulatory cell) program, IND planned to initiate a Phase 2 trial in type 1 diabetes • Progenitor Cell Therapy (PCT): wholly owned subsidiary and leading CDMO in the cellular therapy industry • Provides manufacturing, regulatory, and commercialization expertise for therapeutics development • Immediate revenue and cash flow generation • Experienced management team with broad industry and academic experience
NASDAQ: NBS | 6 NeoStem Has an Integrated Business Model • Develops breakthrough therapeutic products in cell therapy for unmet medical needs around a significant IP portfolio • Benefits from growth of the regenerative medicine industry through revenue generating development and manufacturing service business
NASDAQ: NBS | 7 Developing a Portfolio of Cell Therapy Products that Leverages the Body’s Natural Ability to Heal and Fight Disease
NASDAQ: NBS | 8 Built for Success in Regenerative Medicine Cardiovascular disease* • Acute myocardial infarction – PreSERVE Phase 2 Study • Congestive heart failure – Preparing for Phase 1b/2a • Traumatic brain injury – Preclinical * These cells (AMR-001) are autologous and not expanded Autoimmune disorders • Type 1 diabetes – Phase 2 IND preparation • Steroid resistant asthma – Preparing for Phase 1b/2a • Organ transplant tolerance – Phase 1 IND submitted Tissue regeneration • IND expected to be filed in one of the following indications: macular degeneration, wound healing, bone regeneration
NASDAQ: NBS | 9 Enhancing the Body’s Natural Repair Mechanism to Treat Cardiovascular Disease
NASDAQ: NBS | 10 AMR-001 Brings Repair System to the Heart in Order to Preserve Function After a STEMI • CD34⁺CXCR4+ Cells are a natural repair mechanism • A consequence of inadequate perfusion (microvascular insufficiency) after a heart attack is apoptosis and progressive cardiomyocyte loss in the peri- infarct zone, leading to infarct expansion • ST Segment Elevation MI (STEMI) patients are at a high risk of a progressive deterioration in heart muscle function that leads to arrhythmia, recurrent myocardial infarction, congestive heart failure and premature death
NASDAQ: NBS | 11 Indication Post-AMI preservation of cardiac function Key Inclusion Criteria Confirmation of ST Elevation MI (STEMI); ejection fraction < 48% at day 4; state of the art care post stenting Location and Number of Subjects United States, 60 centers, 150 of 160 patients infused as of 11/11/2013 Design Double blind, placebo controlled, randomized (1:1) Primary Endpoint Change in cardiac perfusion (RTSS by SPECT) from baseline to 6 months Other Endpoints Secondary endpoints to determine preservation of cardiac function and clinical events: • CMR to measure LVEF, LVESV, LVEDV, regional myocardial strain, infarct/peri-infarct regional wall motion abnormalities, and infarct size (baseline and 6 months) • Quality of Life measures: (KCCQ & SAQ) • Reduction in cumulative MACE and other adverse clinical cardiac events at 6, 12, 18, 24, and 36 months Treatment Single dose via infarct related artery with minimum dose for release >10MM CD34+ cells PreSERVE Phase 2 Study
NASDAQ: NBS | 12 Phase 1 Results Point to AMR-001 Potential Dose Response Correlated with Mobile CD34+ Cells RTSS (Hypoperfusion) Cohort Base Line 6 months Delta % Change Control 259.0 273.5 +14.5 +5.6 5M Cells 714.2 722.0 +7.8 +1.1 10M Cells 998.6 635.8 -362.8 -36.4 15M Cells 584.0 462.0 -122.0 -20.9 • DSMB determined that no adverse events were related to therapy • Bone marrow derived cells: Likely safe and positive impact on mortality (Cochrane Collaboration Review, 2012) • Patients dosed ≥ the threshold dose of 10 million cells showed significant improvement in perfusion • Increasing doses of CD34+CXCR4+/ SDF-1 mobile cells reduced the size of the infarct region as measured by CMR 0 20 40 60 0 5 10 15 CD34+ cells (millions) % of individuals with decrease in left ventricular ejection fraction (LVEF) Threshold No individuals showed a decrease in LVEF Quyyumi AmHtJ 2011 and data on file Y = Δ Infarct % LV Mass, X = Dose of SDF1 mobile CD34 cells • At threshold dose of 10 million cells or more, no individuals showed decrease in LVEF
NASDAQ: NBS | 13 • Broad and growing patent portfolio supports cardiac and other ischemic conditions • Amorcyte’s patent claims cover a pharmaceutical composition that contains a therapeutic concentration of non-expanded CD34+ CXCR4+ stem cells that move in response to SDF-1, together with a stabilizing amount of serum, and that can be delivered parenterally through a catheter to repair an injury caused by vascular insufficiency. • 4 issued and allowed US composition of matter and methods patents: • 8 issued OUS composition of matter and method patents: - Japan, South Africa, Malaysia, Philippines, Canada, Russia • Patent Applications: 24 active US and OUS patents pending • Issued and pending claims can be applied to other conditions caused by underlying ischemia, including: chronic myocardial ischemia post-AMI, congestive heart failure, critical limb ischemia and ischemic brain injury Intellectual Property
NASDAQ: NBS | 14 What’s Next? Congestive Heart Failure • Additional indication for AMR-001 autologous therapy • Plan to leverage AMI data to accelerate CHF development • Significant need - prevalence of over 23 million worldwide • Preparing for IND filing and Phase 1b/2a clinical trial • Therapy would enable larger distribution (not limited to mapping systems)
NASDAQ: NBS | 15 Adapted from Vrtovec et al, Circ Res published online 10/12/12 Note: 110 patients (open label, 55 treated with cells and 55 standard of care) CD34+ Stem Cell Therapy Significantly Improves Event Free Survival at 5 Years in Patients with Dilated Cardiomyopathy Pump Failure Deaths Sudden Cardiac Deaths Heart Transplantations
NASDAQ: NBS | 16 The Ability to Reestablish Immune Tolerance in Order to Turn Off Autoimmunity
NASDAQ: NBS | 17 1) Chai, Jian-Guo et al, Journal of Immunology 2008; 180;858-869 • Treg therapy represents a novel approach for restoring immune balance by enhancing T-regulatory cell number and function1 • Partnership with Becton Dickinson (16.7% ownership of Athelos) • Immune-mediated diseases such as graft-versus-host-disease (GVHD), autoimmune disorders such as type 1 diabetes and multiple sclerosis, and allergic conditions, are a result of an imbalance between T-effector cells and T-regulatory cells (Treg) • Exclusive rights to 22 issued patents covering isolation, activation, expansion and methods of treating or preventing certain conditions and/or diseases using Tregs in US and major international markets Using Treg Cells to Restore Immune Balance
NASDAQ: NBS | 18 • Type 1 diabetes affects over 34 million worldwide • Advancing to Phase 2 study expected to launch in 2014 through collaboration with Drs. Jeffrey Bluestone and Qizhi Tang (UCSF), expected to be partially funded by NeoStem and expected to take two years to complete • Severe asthma affects 60 million worldwide • Designing protocol for Phase 1b/2a steroid resistant asthma study with Drs. William Busse (University of Wisconsin), Mario Castro (Washington University, St. Louis), Prescott Woodruff (UCSF), expected to launch in 2H 2014 Recent Advancements in the Treg Program
NASDAQ: NBS | 19 VSELs™ Hold Promise to Repair Damaged Tissue Throughout a Patient’s Life
NASDAQ: NBS | 20 • Preliminary data generated by third party collaborators in animal models have indicated that highly enriched human very small embryonic-like stem cells (VSELs™) are able to integrate, differentiate and potentially regenerate into all basic cell types (mesoderm, ectoderm, endoderm) • Unlike classically defined “pluripotent” stem cells, it is believed that VSELs™ do not contribute to teratoma formation • NeoStem has 7 families of patents pending for method of treatment and isolation claims that dovetail with the indications that we are pursuing • Pre-clinical work financed largely by grants and DOD funding with total active grant awards of over $4.5 million • Treatment indications being explored include macular degeneration, wound healing, and bone regeneration Bone mesoderm Neuron ectoderm Pancreas endoderm VSELs™ Regenerative Medicine Potential
NASDAQ: NBS | 21 • Preliminary data in a preclinical model of severe complex wounds suggest that VSELs™ may be more effective in accelerating healing than mesenchymal stromal cells % R e -ep it he lia liz at io n p < 0.05 Days Post-wounding VSELs vs. MSCs % R e -epi thel ia liz at io n 2,500 human VSELS 500,000 human MSCs Fibrin Control Human VSELs™ Accelerate Healing in a SCID Mouse Complex Tail Wound Model
NASDAQ: NBS | 22 PKH-26/Recoverin PKH-26 positive cells co-labeled with Recoverin (400x). ONL INL GCL RPE PKH-26/rhodopsin PKH-26 positive cells co-labeled with rhodopsin (400x). ONL INL RPE GCL Eminli, S. et al. Exploring the use of human very small embryonic-like stem cells (VSELs) isolated from adult peripheral blood for therapy of dry age- related macular degeneration (AMD). ISSCR 2012 Annual Meeting, Yokohama, Japan. Poster presentation. Preliminary Data Suggest Human VSELs™ Injected into a Mouse Sub-Retinal Space Integrate and Show Differentiation Potential in situ
NASDAQ: NBS | 23 Large and Small Companies in The Cell Therapy Industry Outsource Services For All or Part of Their Manufacturing Needs
NASDAQ: NBS | 24 • Provides established, high quality manufacturing capabilities and support to developers of cell-based therapies, from preclinical supplies through to commercialization at two strategically located facilities • Outsourcing improves efficiencies and profitability and reduces capital investment • Demonstrated regulatory expertise having successfully completed 50+ EU and US regulatory filings and worked with a client through all phases of clinical trials, to BLA submission, and product approval by FDA • Initiatives focused on lowering cost of goods and increasing gross profits through innovation, engineering and automation • Pursue commercial expansion of manufacturing in the US and internationally 15-Year Track Record of Success Mountain View, California (25,000 ft2) ISO Class 7 / Class 10,000 suites Additional build out underway – expected online 1Q 2014 Allendale, New Jersey (30,000 ft2) ISO Class 7 / Class 10,000 suites ISO Class 6 / Class 1,000 suite Additional build out underway – expected online 1Q 2014
NASDAQ: NBS | 25 Low Complexity Product Medium Complexity Product High Complexity Product Pre-clinical Drug Discovery Contracts Phase 2 Clinical Trial Manufacturing Contract Phase 1 Clinical Trial Manufacturing Contract Phase 3 Clinical Trial Manufacturing Contract Commercial Manufacturing Contract 12 to 18 Month Engagement $50,000 to $250,000 12 to 24 Month Engagement $250,000 to $500,000 24 to 36 Month Engagement $500,000 to $1,000,000 6 to 12 Month Eng. 5 to 25 Units Produced $250,000 to $750,000 12 to 18 Month Eng. 25 to 50 Units Produced $625,000 to $1,250,000 12 to 24 Month Eng. 50 to 100 Units Produced $1,000,000 to $2,000,000 12 to 18 Month Eng. 25 to 50 Units Produced $625,000 to $1,250,000 12 to 24 Month Eng. 100 to 200 Units Mfg. $2,000,000 to $4,000,000 18 to 36 Month Eng. 200 to 400 Units Mfg. $3,000,000 to $6,000,000 12 to 18 Month Eng. 50 to 100 Units Produced $1,000,000 to $2,000,000 24 to 48 Month Eng. 200 to 400 Units Mfg. $3,000,000 to $6,000,000 24 to 48 Month Eng. 400 to 1,000 Units Mfg. $4,000,000 to $10,000,000 Est. Peak Annual Sales 2,500 to 5,000 Units $38M to $75M / Yr. Est. Peak Annual Sales 10,000 to 25,000 Units $80M to $200M / Yr. Est. Peak Annual Sales 25,000 to 50,000 Units $125 to $250M / Yr. *Based on industry experience and estimated potential future commercial manufacturing in the industry Examples of Contract Services Potential from Conception to Commercialization* What Could Outsourced Manufacturing Ultimately Mean For The Company?
NASDAQ: NBS | 26 Management Highlights Robin Smith, MD, MBA CEO & Chairman of the Board Robert Dickey IV Chief Financial Officer • Over 15 years management experience at life sciences companies, following a career as an investment banker Andrew L. Pecora, MD, FACP Chief Visionary Officer, CMO of PCT, CSO of Amorcyte • Chief Innovations Officer at John Theurer Cancer Center at Hackensack University Medical Center • Co-founder of PCT with significant experience in design and conduct of clinical trials, IRB practices, and payor relationships Douglas W. Losordo, MD, FACC, FAHA Chief Medical Officer • Leader in cell therapy research and renowned cardiologist • Obtained over $35 million in NIH funding during career-long efforts to develop novel therapeutics Robert A. Preti, PhD Chief Scientific Officer, President of PCT • One of the country’s leading authorities on cell engineering and co-founder of PCT • 10 years experience as Director of Hematopoietic Stem Cell Processing & Research Laboratory Stephen W. Potter, MBA Executive Vice President • Biotech and pharma experience: Osiris Therapeutics (approval of Prochymal®, first- ever stem cell drug therapy), Genzyme, DuPont Pharmaceuticals, Booz Allen & Hamilton Jonathan Sackner-Bernstein, MD, FACC VP, Clinical Development and Regulatory Affairs • Internationally recognized clinical researcher in cardiology • 20 years experience in clinical practice, medical research and healthcare management • Leading NeoStem since 2006, completing five acquisitions & one divestiture, raising over $180 million • Extensive and diversified experience in executive and board level capacities for medical enterprises and healthcare-based entities
NASDAQ: NBS | 27 Board of Directors Robin Smith, MD, MBA CEO & Chairman of the Board MD – Yale; MBA – The Wharton School Formerly President & CEO IP2M, EVP & CMO HealthHelp Experience - Trustee of NYU Medical Center; Chairman of the Board of NYU Hospital for Joint Diseases (through November 2009) and Stem for Life Foundation Richard Berman (Independent) Over 35 years of venture capital, management, M&A experience Experience – Current Board of Directors of Apricus Biosciences, Easylink Services International, Inc., Advaxis, Inc., Broadcaster, Inc., National Investment Managers Drew Bernstein, CPA (Independent) BS – University of Maryland Business School Licensed in State of New York; member AICPA, NYSSCPA and NSA Experience – Bernstein & Pinchuk LLP (member of BDO Seidman Alliance); PRC auditing; 200+ real estate transactions with $3B+ aggregate value; accountant and business advisor Martyn Greenacre, MBA (Independent) BA – Harvard College; MBA – Harvard Business School Experience – Board and executive positions for multiple biopharmaceutical companies; Former CEO of Delsys Pharmaceutical Corporation and Zynaxis Inc; Chairman of the Board of BMP Sunstone Corporation Steven Myers (Independent) BS Mathematics – Stanford University Experience – Founder/Chairman/CEO SM&A (competition management services); career in aerospace and defense sectors supporting DoD & NASA programs Andrew Pecora, MD, FACP Chief Visionary Officer, CMO of PCT, CSO of Amorcyte MD — University of Medicine and Dentistry of New Jersey Experience – Chief Innovations Officer, Professor and Vice President of Cancer Services at John Theurer Cancer Center at Hackensack University Medical Center, and Managing Partner of the Northern New Jersey Cancer Center Eric Wei Managing Partner, RimAsia Capital Partners BS Mathematics & Economics – Amherst College; MBA – Wharton Experience – Founder/Managing Partner of RimAsia Capital Partners (private equity); Peregrine Capital, Prudential Securities, Lazard Freres, Citibank; Gilbert Global Equity Partners Crimson Asia Capital Partners
NASDAQ: NBS | 28 Market Metrics Market Capitalization(1) $177M Recent Price(2) $6.53 52 Week Range(2) $5.00 - $9.89 Float(1) 23.9M Insider Holdings(2) 11.6% 1) As of November 6, 2013, based on 27.0 million shares outstanding and a $6.53 share price 2) As of November 6, 2013 (Source: NeoStem) 3) As of September 30, 2013 (Source: NBS September 30, 2013 10Q) 4) Net proceeds raised through warrant and option exercises and issuance of stock between October 1, 2013 and November 6, 2013 (Source: NeoStem) Financial Metrics Revenue(3) $10.6M (Jan. – Sept. 2013) Cash(3) $16.9M Additional Cash(4) $38.4M Common Shares Outstanding(1) 27.0M Warrants(2) 4.9M (avg. warrant exercise price of $16.61 – mostly callable) Options(2) 2.8M (avg. option exercise price of $11.16) Key Metrics - Cash position is expected to be sufficient to fund current operations into 2015 -
NASDAQ: NBS | 29 • Therapeutic Pipeline - Complete enrollment PreSERVE-AMI Phase 2 trial - 1st data readout 6-8 months after last patient infused - File IND and commence enrollment for Phase 1b/2a AMR-001 CHF trial in 2014 - Advancing towards VSELTM human trials - Advancing Treg cell program to launch Phase 2 trial in type 1 diabetes in 2014 - Advancing Treg cell program to launch Phase 1b/2a trial in steroid resistant asthma in 2H 2014 - Grow through strategic transactions and business development relationships • Commercial Operations - Product and service expansion transaction(s) - Cell therapy automation to lower cost and improve efficiency - Manufacturing expansion in US and internationally NeoStem Milestones
NASDAQ: NBS | 30 Drive shareholder value through… 1) Growing a successful global cell therapy contract development and manufacturing business 2) Developing breakthrough therapeutic products in cell therapy for unmet medical needs around a strong IP portfolio, becoming a global leader in regenerative medicine, improving clinical outcomes and driving the reduction of overall healthcare costs through the development of cell therapies 3) Continuing to build the Company through strategic transactions, partnerships and relationships (Vatican, DoD) including M&A with a demonstrated track record having completed multiple mergers and one divestiture 4) Educating consumers and the investor community on the paradigm shift in medicine and benefits of cell therapy Corporate Goals
NASDAQ: NBS | 31 Contact Information NeoStem, Inc. NASDAQ: NBS www.neostem.com Robin Smith, MD, MBA Chairman & CEO Phone: (212) 584-4174 Email: rsmith@neostem.com
NASDAQ: NBS | 32 Appendix
NASDAQ: NBS | 33 Since 2006, We Have Accessed Over $183 Million and Completed Multiple M&A Transactions and One Divestiture Acquired Stem Cell Technologies, Inc. Acquired CBH (51% of Erye) Divested Began partnership with Vatican Acquired 80% Acquired Acquired Phase III Medical, Inc. Acquired NeoStem, Inc.
NASDAQ: NBS | 34 Amorcyte Scientific Advisory Board Eugene Braunwald, MD, FRCP Brigham & Women’s Hospital Bernard J. Gersh, MD, ChB, DPhil, FRCP The Mayo Clinic Dean J. Kereiakes, MD, FACC The Christ Hospital Heart of Greater Cincinnati Douglas L. Mann, MD, FACC Washington University School of Medicine Emerson C. Perin, MD, PhD, FACC Texas Heart Institute Bertram Pitt, MD University of Michigan School of Medicine Arshed Quyyumi, MD, FRCP, FACC, Principal Investigator, PreSERVE Trial Emory University School of Medicine Edmund K. Waller, MD, PhD, FACP Emory University School of Medicine James T. Willerson, MD University Texas Health Science Center Joseph Wu, MD, PhD Stanford University School of Medicine Andrew L. Pecora, MD, FACP, CPE, SAB Administrative Chairman Hackensack University Medical Center Chief Scientific Officer, Amorcyte
NASDAQ: NBS | 35 Athelos Scientific Advisory Board Robert A. Preti, PhD SAB Administrative Chairman CSO of NeoStem and President of PCT Jeffrey Bluestone, PhD University of California, San Francisco, Diabetes Center David A. Horwitz, MD University of Southern California Robert Korngold, PhD Hackensack University Medical Center Robert S. Negrin, MD Stanford University David Peritt, PhD Hospira Noel L. Warner, PhD BD Biosciences
NASDAQ: NBS | 36 VSEL™ Technology Academic Collaborators Mariusz Ratajczak, MD, PhD, Dsci University of Louisville Russell Taichman, DMD, DMSc University of Michigan Vincent Falanga, MD Boston University Kameran Lashkari, MD Schepens Eye Institute, Harvard Medical School Song Li, PhD University of California, Berkeley
NASDAQ: NBS | 37 High Cost of Cardiovascular Disease • $2.7 trillion dollars is spent annually on health care costs, currently 18% of US GDP1 • Cardiovascular disease costs over $445 billion today and projected to increase to $1 trillion by 20302 1) Center for Medicare and Medicaid, statistics for 2011 2) American Heart Association, Policy Statement January 24, 2011
NASDAQ: NBS | 38 Indication Post-AMI with LVEF ≤50% and wall motion abnormality in the myocardium of the IRA Primary Endpoint Safety in post-AMI patients Other Endpoints RTSS* (Perfusion); LVEF; ESV; SDF mobility Key Inclusion Criteria Confirmation of ST Elevation MI; Ejection fraction ≤ 50% 96 hours post stenting Dosing Frequency Single dose Groups and Randomization 3 dose cohorts (5, 10, 15 million cells, randomized 1:1, open-label) Number of Subjects N=31 Number of Sites 4 (incl. Emory University, Texas Heart Institute, Vanderbilt, Cincinnati) Geography United States Trial Duration 6 months Day 4: CMR Day 1: Ventriculography Day 6-10: Injection into the IRA Day 5-8: 6-8 Hour Cell Separation Process Phase 1 Trial Design for AMR-001
NASDAQ: NBS | 39 T effector to nTreg ratio CD4 SS C CD25 CD 1 2 7 Post-sort nTreg : >90% P re -s o rt P o st -s o rt Ex vivo Expanded Human Tregs Show Safety and Potential Efficacy in Early Clinical Trials