Capstone Holding Corp. · NASDAQ:CAPS
Capstone — Capstone Therapeutics — Shareholder Meeting (June 2012)
22 slides from Capstone's shareholder meeting presentation, Jun 15, 2012
Slide 1: Annual Meeting of Stockholders Business Update
CAPSTONE THERAPEUTICS CORP. ANNUAL MEETING OF STOCKHOLDERS BUSINESS UPDATE JUNE 15, 2012 Aa CAPSTONE Confidential
Slide 2: Operating Status
OPERATING STATUS Cash and Investments of $13.1 million at March 31, 2012 Cash Burn of $661,000 for the three months ended March 31, 2012 No change in guidance of 2012 Cash Burn in $2.5 million range Current Staffing of 2% dropping to 1% in July 2012 + CFO (Principal Accounting Officer) (at 40% of pr
Slide 3: Expense Reduction
EXPENSE REDUCTION >» Cash Burn in 2013 is expected to significantly decline >» Major Expense Categories: = Facility Lease (expires 2/28/13) = Intellectual Property » Legal fees for general corporate activity and SEC filings = Accounting fees (Annual Audits, Quarterly Reviews) = Insurance (D&O, Produ
Slide 4: Qui Tam Litigation Summary
Qui Tam Litigation Summary > Started in 2005 and unsealed in 2009 = Multiple Defendants — all who sold BGS Devices — Smith & Nephew/Biomet/Orthofix/djOrthopaedics/Others = Joint Defense / Summary Dismissal Declined 12/10 = Currently waiting for discovery to start — Likely stalled due to DOJ actions
Slide 5: Effect of Qui Tam Litigation on Corporate Strategy
Effect of Qui Tam Litigation on Corporate Strategy > Delaware law effectively precludes distribution of assets in the face of an undetermined contingent liability, so no liquidation or distribution of cash until lawsuit is settled > Not possible to value Capstone for purpose of reverse merger or acq
Slide 6: Status of Qui Tam Lawsuit
Status of Qui Tam Lawsuit > Department of Justice and Orthofix have announced $43 million settlement of fraud and kickback and Bierman claims >» Capstone and other bone stim companies awaiting further action in Bierman case a) Move into discovery? b) Settlement? Date of Resolution Remains Unknown a
Slide 7: AZX100 Dermal Efficacy / Safety
AZX100 Dermal Efficacy / Safety > Phase 2a Clinical Trial in Surgical (Trocar Site) Scars > Phase 2a Clinical Trials in Keloid Scar Revision Aa CAPSTONE Confidential
Slide 8: AZX100 Phase 2a Pilot Clinical Trial - Surgical (Trocar Site) Scars
AZX100 Phase 2a Pilot Clinical Trial - Surgical (Trocar Site) Scars > One Study: * OL-ASCAR-03: 3.0, 10.0 mg or placebo > Objective: * Scar reduction in trocar sites >» Study Design: = Comparison of three trocar site scars following arthroscopic shoulder surgery + Five clinical sites; usual and cust
Slide 9: AZX100 Phase 2a Pilot Trial in Trocar Site Scars — Final Results
AZX100 Phase 2a Pilot Clinical Trial in Surgical (Trocar Site) Scars — Final Results > Final Analysis Reveals Signals of Efficacy = Monthly statistical tests performed: Months 3-12 = 8 tests yielded statistically significant or near significant results; 7 of these 8 favored AZX100 « Significant or n
Slide 10: Using Response Surface Methods to Find a Good Time Interval: Trocar Site Scars
Using Response Surface Methods to Find a Good (or Best) Time Interval for Evidence of Efficacy Trocar Site Scars Table IC; ASCAR-05, p-values for 3.0 mg and 10,0 mg, all p-values from repeated measures regression models adjusted for age, gender, and scar location. 5 ‘Treatment Effect P-values Using
Slide 11: Baseline Month Month Month Month
Baseline Month 3 Month 6 Month 9 Month 12 AZX100 3.0 mg Placebo ms CAPSTONE Confidential
Slide 12: AZX100 Phase 2a Clinical Trials — Keloid Scars
AZX100 Phase 2a Clinical Trials — Keloid Scars > Two Studies: * OL-ASCAR-04: 3.0, 10.0 mg per linear cm or placebo * OL-ASCAR-05: 0.3, 1.0 mg per linear cm or placebo > Objective: « Reduction or prevention of recurrence following keloid scar excision > Study Design: « Placebo-controlled; n=59 in eac
Slide 13: AZX100 Phase 2a Results — Keloid Scars
AZX100 Phase 2a Results — Keloid Scars >» Consistent Pattern Favoring AZX100 Treatment (1.0mg per cm) Across Multiple Outcomes & Time Points = Small sample size (n=19); signals not statistically significant > Trend of Efficacy Observed at Earlier Time Points (Months 2-9) » Mean Observer POSAS Total
Slide 14: Using Response Surface Methods to Find a Good Time Interval: Keloid Scars
Using Response Surface Methods to Find a Good (or Best) Time Interval for Evidence of Efficacy Keloid Scars age, gender, and pre-surgery keloid length/width Table I; ASCAR-05, p-values for 0.3 mg/em and | mg/om, all p-values from repeated measures regression models adjusted for ‘Treatment Effect P-v
Slide 15: Corporate Partnering — Dermal Scarring
Corporate Partnering — Dermal Scarring > Embraced Formal Process Targeting over 30 Names > Retained Notable Licensing / BD Advisor > Retained Investment Bank Advisor with Specific Dermatology Expertise To Date: No Partnering Deal Consummated Aa CAPSTONE
Slide 16: Preclinical Studies in Progress
Preclinical Studies in Progress > Rabbit Epidural (Spine) Fibrosis Study > Rodent Radiation Pulmonary Fibrosis Study (Both studies are follow-on studies to previous successful studies. Both were contracted and substantially paid for in 2011. Both represent potential partnering/development value crea
Slide 17: AZX100 in the Rabbit Epidural Fibrosis Model
AZX100 in the Rabbit Epidural Fibrosis Model: Drug Dose and Timing, Duration of Effect > Objective: To assess effectiveness of different dosing regimens of AZX100 in preventing or reducing epidural fibrosis after laminectomy in the rabbit model > Investigator: BNI — Phoenix, AZ > Study Design: = 60
Slide 18: AZX100 in Epidural Fibrosis
AZX100 in Epidural Fibrosis
Slide 19: Idiopathic Pulmonary Fibrosis
Idiopathic Pulmonary Fibrosis >» Chronic, progressive, fibrosing and ultimately fatal interstitial lung disease = Most patients present at an advanced stage of disease >» Unknown etiology; characterized by poor prognosis Survival time from diagnosis: two to four years Proven effective available ther
Slide 20: C57BL/6 mice irradiated with Gy delivered to thorax only
C57BL/6 mice irradiated with 14 Gy delivered to thorax only — Philips X-ray Therapy Unit (250 Kev) Progress of radiation-induced lung injury was monitored after sacrifice of 8 mice at interim time points: 1, 4, 8 and 16 weeks — Lavage fluid and cells collected; the latter were enumerated and differe
Slide 21: Strategic Options
STRATEGIC OPTIONS > Wait (for qui tam claim to be resolved) and Liquidate > Wait and Merge > Create Value through Internal/External Biotech Programs ALL OPTIONS ARE ON THE TABLE a CAPSTONE aiaseaian a
Slide 22: Capstone Therapeutics
NS CAPSTONE THERAPEUTICS OTCQB: CAPS www.capstonethx.com Capstone Therapeutics 1275 West Washington Street - Suite 101 Tempe, AZ 85281 (602) 286-5520 ——~ CAPSTONE Confidential 22
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