Innovative Product Shelved in US

Due to Unacceptable Regulatory

Hurdles

One Example and Lessons Learned

February 10, 2014

Jane Metcalf

(949) 525 - 1493

Innovative Treatment for Chronic Lower Back

Pain Due to Degenerative Disc Disease (DDD)

30 million US citizens afflicted with lower

back pain and @ 3 million suffer from

debilitating chronic back pain.

Present Therapeutic Options

Present Therapeutic Options

Potential Area of Treatment

by Innovative Device

Innovative Treatment for Chronic Lower

Back Pain - Benefits and Risks

Benefits • Relieves Pain

• Less invasive than

fusion surgery

• Lower cost

• Faster return to normal

activities

• Potential to delay further

degeneration

• Reversible

Risks • Long term results not

studied

• Same as minimally

invasive facet screws

Obstacle in Pathway to US Market: FDA

Designated “Gold Standard” Control

IDE for Pivotal Trial (2 years in FDA negotiation)

• Multicenter, prospective, randomized control, 250+

patients, followed for 24 months

Control versus Test Arms of Study

• Control: Fusion surgery with interbody cage, several

days in hospital, general anesthesia, six week

recovery, cost @ $28K

• Test: Percutaneous out-patient surgery, local

anesthesia, 3 day recovery, cost @ $3K

Issues

• Patient enrollment rate much slower than

expected – increasing project study duration by

2 years

• Costs much higher (@ $15 million) than

expected

• Population for new device indication not

addressed

Lessons Learned

• Early understanding of FDA requirements for

determining safety and efficacy is key in

managing investor expectations