OTraces Inc'

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OTraces Inc.

• Diagnostics Oncology Screening Technology
• Delivering Simple Blood Tests for Breast,
  Ovarian, Prostate, Lung and Other Cancers

Keith Lingenfelter CEO OTraces Inc. keith.lingenfe
lter_at_otraces.com
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Summary of Business

• Screening Cancer Diagnostics (breast, ovarian,
  prostate, lung colon)
• Experienced Management Team, high tech startups,
  2 IPOs, 35 years diagnostics experience, 350
  million raised, senior management at fortune 200
  companies
• Cancer Screening currently poor false negative
  rates from 15 to 40
• OTraces has shown 2 false positive and negative
  rates.
• Super Sensitive Immunoassay test for a panel of
  Proteins
• Patented Expert System
• Products ready for clinical trials
• !.2 billion screening market for Breast Cancer ,
  72. billion for all cancers
• Razor Blade Razor Business Model 10 to 15 per
  test, 100,000 for the instrument at 80 margin.

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Summary of Business

• Technology developed by BioTraces
• 15 year Virginia Research company
• Not a commercialization company
• 7 million and 7 years invested in technology
• OTraces formed to commercialize Screening
  Oncology
• Worldwide exclusive license
• Need 5 million funding for Breast Cancer
  Clinical Trial
• Buyout or MA for exit.

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OTraces, Management

• CEO, Mr. Keith Lingenfelter
• VP Diagnostics Program IGEN International,
• Program Manager and Strategic Marketing at Abbott
  Labs for a number of clinical systems
• IGEN IPO 1994, on NASDAQ 200 MM market cap,
  Sold to Roche Diagnostics in 2004 1.5 billion
• Strategic Partnerships with Roche Diagnostics,
  Eisai Inc., Akzo Pharmaceuticals, and ABI/Perkin
  Elmer (300 MM Net Present Value of the Deals)
• CSO, Dr. Andrew Drukier
• Collaborated with Leading Academic Centers Max
  Plank Institute, Harvard, Princeton and National
  Laboratories and Leading Hospitals
• Founder, CEO /CSO of Successful Biotech Company
• CFO, Mr. Richard Wathen
• Technology Finance Executive with 20 Years
  Experience
• IPO (Careerbuilder.com) and MA (Legent and
  netASPx)
• Raised Over 180 million in Public and Private
  Equity Capital

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The Total Available Market (TAM)

• Over 100 million women worldwide and 57 million
  Women in the US Access Screening Mammography
  today.
• Breast Cancer Screening Market is 570 million US
  and 1.2 billion Worldwide.
• OTraces will charge 10 per Test Result.
• Breast, Ovarian, Prostate, Colon, Lung and
  Melanoma Represent 3.2 billion US and 7.2
  billion Worldwide, 720 million Tests per Year.

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The Problem

• Poor Prior Art Diagnostic Oncology Methods
• No Simple Blood Test for Screening Beast Cancer
• For Breast Cancer Screening Imaging Methods
  Suffer High False Positive (20) and Negatives
  (20)
• Other Diagnostic Methods Suffer the Same Problem
• MRI (expensive)
• CAT Scan (expensive)
• Ultrasound
• DNA Diagnostic Methods Have Low Sensitivity but
  High Specificity When Applied to Specific
  Subtypes of Specific Cancers, Not Suitable for
  Screening.
• High Abundance Protein markers such as PSA suffer
  high false positive rates, 15 out of 100 men
  tested for PSA will be positive. Of these, only
  three will be positive in Biopsy.
• Protein Molecular Methods have Been Limited to
  High Abundance Proteins (gt1,000,000 molecules/ml)
  Due to Technology Limitations.

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OTraces Solution

• A new Class of Biomarkers, Low Abundance
  Signaling Proteins.
• Below Limit of Detection for Current Clinical Lab
  Immunochemistry Methods.
• Measurements Down to 50 Femtograms/ml are
  Required.
• A Five to Six Test Panel of Selected Signaling
  Proteins are Measured.
• They are Actively Up-Regulated or Down-Regulated
  in Blood Concentration When Disease State is
  Present.
• Pro-inflammatory, Cell Apoptosis,
  Vascularization, Cancer Markers
• A Proprietary Multi-dimensional Correlation
  Calculation Creates the Cancer Score
• The Solution is Highly Automated and Suitable for
  the Clinical Lab

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New Class of Biomarker Panels, New Disease Marker
Platform
Breast Cancer 868 Cohort
Ovarian Cancer 107 Cohort
Discrimination of BPH vs. Prostate Cancer 259
Cohort
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Breast Cancer Study

• Clinical samples supplied by
• Charite University of Medicine, Berlin
• The University of Pennsylvania Hospital Center,
  Philadelphia
• I. Curie, Paris. France.
• University of Maryland, Baltimore
• Duke University
• 495 Women diagnosed with breast cancer
• BIRAD 4 score (100)
• 70 with positive Biopsy
• 10 BiRad 4 score Biopsy Negative.
• 373 putatively healthy women drawn from general
  population
• All samples run Blind at OTraces Labs

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Low Abundance Signaling Proteins Tell the Story
Patents Pending
Pg/ml 10-12 gm/ml
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Background Reduction Techniques Gains 100 Fold
Improvement in Detection Limit
High Abundance Proteins
Low Abundance Proteins
50 of Relevant Proteins are Below the LOD for
Current Methods
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How Does OTraces Do It?
Red Area Shows Proteins Detected by OTraces
Patented Methods
Yellow Area Shows Limited Proteins Detected by
Older Methods

• PSA and IL-8 in Breast Cancer and healthy Women
• Two Probative, Breast Cancer, Low Abundance
  Proteins
• Older Methods Cannot Detect these Proteins

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OTraces Method Clearly Delineates Healthy vs.
Cancer
Plot of Cancer Scores 3 D Surface Composite
Scores with Linear vs. Squared Weights
Red Mountains are Breast Cancer
Patents Pending
Light green area has zero patient population
Blue Valley is Healthy
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Important New DataDuke Univ. Samples

• 80 Women All Called Positive by Imaging for
  Breast Cancer
• 40 women culled who are BIRAD 4 or 5 (Positive)
  in Imaging but Found Benign When Biopsied
  (Relatively Rare).
• 40 Positive by Imaging and Malignant by Biopsy
  (Usual).
• All called At Risk with OTraces Standard
  Screening Correlation Model
• With Malignant Correlation Model
• Only one biopsy benign patient called Malignant
  by OTraces Blood Test.
• Only one biopsy malignant patient called benign
  by OTraces Blood Test (close call).
• Biopsies can be incorrect 5 to 10 or higher for
  younger women.

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Current Imaging Diagnostic Methods for Breast
Cancer Produce High False Positives and Negatives
Annual Physical Includes Manual Exam
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Current Imaging Diagnostic Methods for Breast
Cancer Produce High False Positives and Negatives
Patient Must Schedule Mammogram at Radiologic
Center
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Current Imaging Diagnostic Methods for Breast
Cancer Produce High False Positives and Negatives
If The Mammogram is Positive a Face to Face is
Needed to Discuss Options
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Current Imaging Diagnostic Methods for Breast
Cancer Produce High False Positives and Negatives
Patient Must Schedule Confirmatory Imaging Test
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Current Imaging Diagnostic Methods for Breast
Cancer Produce High False Positives and Negatives
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OTraces Solution Fits in the Current Diagnostic
Process and Produces Far Better Results
Blood May Be Drawn at Doctors Office or at Major
Clinical Lab (Lab Corp) at Patients Convenience.
Blood Drawn is Used to Diagnose Breast Cancer as
Well as Overall Health
OTraces Blood Tests Run at Major Reference Labs
or Oncology Centers in Usual Lab Work Flow
Screening Mammogram
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OTraces Solution Fits in the Current Diagnostic
Process and Produces Far Better Results
OTraces Blood Tests Run at Major Reference Labs
or Oncology Centers in Usual Lab Work Flow
If OTraces Blood Test is Positive a Face to Face
is Needed to Discuss Options
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OTraces Solution Fits in the Current Diagnostic
Process and Produces Far Better Results
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OTraces Solution Fits in the Current Diagnostic
Process and Produces Far Better Results
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Development Complete
Instrument Covers Open
Instrument Covers On
Computer Screen Shot
Industry Standard Microtiter Plate
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Competition
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Regulatory Strategy

• Low Risk First Steps
• Confirmatory for premenopausal Women with
  Positive CBE
• Confirmatory for 2nd Indication, could be
• Post menopausal Women Confirmatory
• Ovarian
• Prostate
• Full General Population Screening Test
• Likely Breast Cancer

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FDA IDE Pre-Meeting

• FDA team that will evaluate our submission has
  been met.
• The Technology has been Introduced with favorable
  reception at the FDA IDE Pre-meeting.
• Possible 510k vs. PMA regulatory paths evaluated.
  (Fujirebio was allowed a 510k for its ROMA
  proteomics test)
• Critical dialog opened with key members of our
  FDA reviewing team.

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Regulatory StrategyThird Party Preclinical
Validation

• A third party validation is now underway at one
  clinical site for Breast Cancer
• University of Pennsylvania Hospital Center
• John Tomaszewski MD. Principle Investigator
• Trial Goals
• Prove that an independent clinical lab can
  reproduce concentration measurements using
  OTraces methods and Instruments
• Prove that an Independent Party can act as a
  Clinical Lab and produce accurate Cancer Scores
• Completion by July 15, 2009

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Regulatory Status
Breast Cancer Status for PMA
Regulatory Approval in 12 -18 Months
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Breast Cancer Clinical Sites

• University of Pennsylvania Health System,
  Philadelphia
• (50,000 BC Tests per year)
• University of Maryland, Baltimore
• (50,000 BC Tests per year)
• Duke University
• (45,000 BC Tests per year)

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OTraces Sales Proposition

• Razor Blade/Razor Strategy
• Instrument 100,000 (80 Margin)
• Test Kits, 10 - 15 per Test (80 margin)
• Installed System Will Generate at Least 25,000
  Revenue/Month
• System Can Be Rented on a Test Use Basis
• Returns Manufacturing Cost in about 6 Months
• Returns Full List Price in 3 years

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Business Forecast
Dollars in thousands
Management Expects 150 million Run Rate 3 years
after approval of one cancer and market launch
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Proposed Financing and Use of Funds

• 5.0 million Sought - 0.7 Raised
• Complete US Clinical Approval and Limited Market
  Launch
• Keep burn rate low, focus on trials only.
• Management compensated with stock and modest
  salaries.
• Additional funds will be needed to get a second
  US and EU Approval, and execute a comprehensive
  world wide market launch.

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Use of Funds
Dollars in Thousands
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OTraces Intellectual Property

• 20 Patents
• 500 Claims
• OTraces has Patented The Notion and Methods of
  Using LAPs to Detect Cancer, Greatly Increased
  Protection
• Many Single Protein Marker Patents Cover
  Specific Binding Sites, ergo Other Competitors
  Simply Reconstruct the Assay around the Patent.
• OTraces IP is Enabling New Classes of Biomarkers

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Comparable Companies

• Digene, Cervical Cancer Screening
• Developed Technology over 10 year period
• FDA Approval, April 2003
• 2006 revenue for screening test, 150 million
• Bought by Qiagen for 1.6 billion 2007
• Digene had competition in Europe
• IGEN, Broad Based Automation Techniques
• Developed Technology over 5 years 8 million
• Excellent Business Development Platform
• Licensed to BMG now Roche for 300 million
• Launched Product 1996
• IGEN Sold to Roche for 1.5 billion

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OTraces Comparison

• Technology Developed over 10 years 7 million
  by BioTraces
• Ready for regulatory Approval
• Multiple Cancers, Breast, Prostate, Lung,
  Ovarian, Others
• Excellent Business Development Platform (Tertiary
  Markets and Therapy Monitoring to Big Pharma)
• Based Upon Digene Comp each cancer is worth 1.5
  billion valuation, (two cancers worth 2x plus)
• OTraces Sales forecasts 150 million in sales by
  year three after launch

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Exit Strategy

• Breast cancer screening markets are 570 million
  US and 1.2 billion worldwide.
• Regulatory approval for breast cancer can be
  achieved in the next 18 months.
• A potential MA of at least several hundred
  million dollars (discounted for early stage
  market entry), as market penetration proceeds and
  other cancer test panels are added the company
  valuation increases.
• One Confirmatory Cancer Test gt 200 million
• One Screening Cancer Test 1.5 billion
• Multiple Screening Cancer tests gt 3 billion
• The major candidates for MA or Buyout are
• Roche Diagnostics, the diagnostics market leader
• Abbott Labs
• Mammography equipment suppliers
• General Electric
• Siemens
• Varian
• IPO

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Investor Check List

• Multi-Billion Dollar Markets Served
• Breakthrough Product Opportunity in Breast,
  Ovarian Cancer Screening
• Quick Exit, 2 3 year Liquidity Event Possible
• Breakthrough Intellectual Property Platform (20
  patents pending and issued, 500 Claims)
• Experienced Management Team, High Tech Startups,
  Fortune 200 management, 2 IPOs 480 million
  Raised, World Class Science
• Lucrative Business Development Platform Also
  Minimizes Need for Additional capital infusions
• Excellent Buyout Opportunity

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Description of the Business

• Simple Screening Blood Tests for Cancers Breast,
  Ovarian, Prostate, Colon, Lung, and Melanoma.
• Considerably Improved Specificity and
  Sensitivity, 98 Predictive Power, i.e. 2
  False Negative, 2 false Positive.
• First Regulatory Approval Can Be Achieved in 18
  months
• Over 900 Breast Cancer Patient Samples Already
  Analyzed for Regulatory Submission.
• Assays Instruments Ready for Regulatory
  Submission.
• Proprietary Expert System