Title to go here

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The Adult Stem Cell Company Building Blocks for
Better Health
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Our Mission

• Mesoblast Limited is a corporation whose sole
  focus is the rapid and successful
  commercialisation of a proprietary, high-margin,
  adult stem cell therapy platform for orthopaedic
  applications in a very large, unmet international
  market.

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Presentation Agenda

• 1. Organisational History
• 2. Corporate Structure
• 3. Stem Cells - why and what?
• 4. Mesenchymal Precursor Cells (MPC)
• 5. The MPC technology
• novel isolation technique
• technology advantages
• applications (orthopaedic, cardiovascular)
• 6. Business model
• 7. Commercial strategy
• 8. Focus on delivery
• 9. Board of Directors
• 10. Details of the offer

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Organisational History

• company founder and Chief Scientist world
  authority
• 2001, founder established Angioblast Systems Inc.
  to commercialise state-of-the-art adult stem cell
  technology
• 3. 2003, identified IMVS/Hanson Institute stem
  cell technology
• world-leading technology
• over 10 years in development
• substantial RD investment
• outstanding commercial prospects
• 2004, Angioblast acquired the platform technology
  
• 2004, Mesoblast established to exclusively
  develop and commercialize Orthopaedic
  Applications

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Enhancing Shareholder Value Through Corporate
Structure
Assignment of Platform Technology (subject to
Mesoblast Licence)
ANGIOBLAST Systems, Inc. (USA)
IMVS/Hanson Institute (MEDVET)

Proprietary Licence for Orthopaedic Applications
10m investment for 33.3 Shareholding
MESOBLAST LTD. (Australia)
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Stem Cells Are Human Building Blocks

• Stem Cells
• building blocks for blood, bone, cartilage, fat,
  vasculature, heart muscle
• can be extracted from various sites
• can be used to repair and regenerate a wide range
  of tissues and organs
• Advantages Of Stem Cells Over Other Medical
  Therapies
• natural biologicals, safer, less likely to have
  side-effects
• regenerate tissues, reducing long-term health
  care costs
• restore function and quality of life

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Adult Stem Cells The Right Building Blocks

• Advantages Of Adult Stem Cells Over Embryonic
  Stem Cells
• no ethical issues surrounding embryo creation and
  destruction
• more mature, hence shorter and less costly
  development processes
• significantly reduced risk of cancer formation
• not recognized as foreign by immune system of an
  unrelated party
• Therefore, Adult Stem Cells Are Much Closer To
  Market

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Adult Stem Cells Haematopoietic vs Mesenchymal

• Adult Tissue Contains Two Types of Stem Cells
• haematopoietic precursor cells
• frequent blood, bone marrow precursors
• mesenchymal precursor cells (MPC)
• rare bone, cartilage, fat, muscle, artery
  precursors
• Advantages Of Mesenchymal Precursors Over
  Haematopoietic Precursors
• if isolated, can be easily cultured and expanded
• can generate various tissue types needed for
  functional restoration
• not recognized as foreign by immune system of an
  unrelated party

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Proprietary MPC Isolation
Bone Marrow
Bone Marrow (BM)
adhere to dish
spin
BM stem cell-binding antibody
1 hour, on ice
second binding reagent
density solution
1/2 hour, on ice

microbeads (Miltenyi)
mixed cell culture
1/4 hour, on ice
MACS magnet
Historical Isolation Method

• Competitive Advantages
• Precise identification, ease of isolation and
  scale-up
• 1000-fold purer initial stem cell pool
• homogeneous population, high rate cell division
• efficient large-scale expansion
• lower costs of cell culture process
• greater potency of expanded, cultured product

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MPCs Give Rise To Various Tissue
Types Potential Therapeutic Markets!
Orthopaedic
Mesenchymal Precursor Cell, MPC
bone
MPC Isolated and Cultured
cartilage
other cell types
heart muscle
Adult Stem Cell Self-Renewing
Cardiac
artery wall
Stem cell
Differentiated cell
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Very Large, Unmet Orthopaedic Markets

• Poorly Healing Bone Fractures
• gt500,000 delayed or non-union fractures in US
  annually
• existing therapies not effective, significant
  adverse events
• Chronic Cartilage Degeneration and Acute Meniscal
  Tears
• gt800,000 patients undergo arthroscopic knee
  surgery in US annually
• existing therapies do not repair lost
  cartilage, offer temporary relief
• Vertebral Disc Degeneration
• affects 20 of population, back pain and nerve
  impingement
• existing therapies - anti-inflammatory drugs,
  surgical spinal fusion

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Does The MPC Therapy Work?

• 25-30 of the mid portion of the femur is
  resected.
• Structural stability maintained by
  intramedullary nail locked proximally and
  distally by transfixing screws.

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MPC Therapy Causes Long-Term Bone Regeneration
TEST ANIMAL 12 months post- MPC transplant
CONTROL ANIMAL 6 months post- sham transplant
TEST ANIMAL 6 months post- MPC transplant
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Very Large, Unmet Cardiovascular Markets

• 1. Acute Myocardial Infarction (AMI or Heart
  Attack)
• gt1.1 million heart attacks in US annually
• 46 develop heart failure due to loss of heart
  muscle lt6 years
• existing therapies inadequate
• MPC can increase blood flow, protect and rebuild
  heart muscle
• 2. Congestive Heart Failure (CHF)
• affects 5 million Americans (2 of the
  population)
• 550,000 new US cases annually
• existing therapies modest efficacy, symptomatic
  relief only
• MPC can rebuild heart muscle, alleviating the
  condition
• 3. Peripheral Artery Disease (PAD) and Wound
  Healing
• gt8 million in US suffer from PAD
• gt400,000 angioplasties annually to prevent limb
  amputation
• gt800,000 diabetic foot ulcers annually
• MPC increase blood flow

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MPC Therapy Results In Improved Heart Function

• Injection of MPC in heart results in
• increased number of blood vessels
• regeneration of heart muscle
• reduced scar tissue
• long-term improvement in heart function

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12
10
arteriole number
8
6
4
2
0
0.2x106 MPC
saline
1x106 MPC
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Delivering A High-Margin Business Model An
Off-the-Shelf Product

• lack of immune activation
• one universal donor provides MPC for multiple
  unrelated recipients (allogeneic), contrasting
  with other cell therapies (autologous)
• purity of MPC starting material
• one universal donor can provide easy
  scale-up, many dosages
• easy access to source material
• pay universal donors using existing FDA
  guidelines
• centralised manufacture and distribution
• commercial quantities of clinical-grade MPC
  product easily delivered to market as an off
  the shelf product
• pharmaceutical range profit margins
• proprietary MPC technology -- long term market
  protection

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Executing Results-Oriented Commercial Strategy

• milestone-driven and outcome-focused
• continuous engagement of strategic corporate
  partners to generate early revenues in multiple
  fields, geographies
• e.g. orthopaedic delivery companies,
• cardiac catheter companies,
• Big pharma
• minimise corporate costs, whilst maximising
  intelligent use of outsourcing
• deliver therapeutic products to increase
  quality of life and materially reduce health
  care costs

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• Clinical trial protocol
• Australian human trials
• orthopaedic
• cardiovascular
• Safety/toxicology
• GMP process
• FDA/IND filing
• orthopaedic
• cardiovascular
• IND approval/US trials
• IP development
• Corporate partnerships

Milestone-Driven, Rapid Commercialisation
2006
2005
2007
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Experienced Board of Directors
Chair Mesoblast Michael Spooner - ex
Ventracor MD CEO Directors Donal ODwyer -
ex worldwide President Cordis (JJ) Byron
McAllister - ex VP Ares-Serono (FDA
expert) Prof. Silviu Itescu - Columbia (USA)
and Melb. Uni., Corp FDA advisor Chair
Angioblast Carter Eckert - ex CEO Knoll, ex Pres
Baxter Pharmaceuticals Chair SAB Prof. Silviu
Itescu Members Prof. Stephen Graves -
Director Orthopaedic Research, Royal Melbourne
Prof. Robert Graham - Exec. Director Victor
Chang Institute, Sydney Prof. Henry Krum -
Pfizer Global Advisory Board Prof. Richard
Gilbert - Consultant LillyCo., Merck,
GlaxoSmithKline
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Details of the Offer
Capital Raised 21 M Issue
price 0.50/share Market Cap (at issue price)
on listing 46.76 M Use of Funds Acquisition of
33.3 Angioblast 10.0 M Development of
Orthopaedic applications 7.7 M Working
capital 1.5 M Expenses of the offer
1.8 M TOTAL 21.0 M
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Capital Structure
Founding Shareholders 47 Medvet
3 Pre-IPO Investors 6 IPO Investors
44 TOTAL 100 Total options on
issue - 5.48 million at exercise prices of
0.55/share and above
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Indicative Timetable
Lodgement of Prospectus at ASIC 16/11 Opening
of Offer 24/11 Closing of Offer 10/12 Mes
oblast Ltd shares quoted on ASX 16/12 This
timetable is indicative only and may move in time
in accordance with the company, the
underwriters, ASIC the ASX.