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HEMOSTEMIX CONTINUES TO FOCUS ON BUILDING VALUE

February 3, 2016

2016 has brought the bears out of hibernation early. As the market continues to ebb and flow, we continue to focus our efforts on increasing our value. I am optimistic that 2016 will be a turning point. Here’s a brief synopsis of where we are now, where we are going, and how we will get there.

WHERE WE ARE NOW

It bears repeating that Hemostemix is the only biotech company in the world in the unique space of evaluating our lead product ACP-01 for critical limb ischemia (CLI). Success in treating this devastating condition is a gateway to other significant markets where decreased blood flow is the problem, as in, for example, ischemic cardiomyopathy associated with chronic congestive heart failure and acute myocardial infarction.

It has been just over a year since I joined Hemostemix. I believed then, and have more reason to believe now, that this Company has an exceptional future. In 2015 the company continued to address and achieve the following important objectives:

  1. Focused on improving key aspects of our clinical-trial process. This work was essential to enable the expansion of our clinical trial to multiple countries and to facilitate enrollment and follow-up on patients. We recently synchronized our clinical trial protocols across the countries where we are continuing to recruit patients.
  2. Upgraded the Health Canada clinical-trial protocol. This upgrade was essential because all clinical trial sites demand consistent protocols to ensure results are valid worldwide.
  3. Received approval from the U.S. Food and Drug Administration (FDA) in record time to expand our clinical trial to the United State. We are currently in advanced stages of discussions with several leading clinical U.S. academic centers to commence trial activity in the United States.
  4. Continued to expand our IP portfolio.
  5. Expanded our trial to South Africa.
  6. Entered into a strategic alliance with Hemostemix (Asia) to expand our clinical trial to Taipei.
  7. Listed our stock on the OTCQX marketplace in the United States under the ticker symbol HMTXF.

 

WHERE WE ARE GOING

We have five main goals for the first half of 2016:

  1. Secure financing to complete the interim analysis.
  2. Significantly accelerate the clinical trial enrolment by expanding the geographic reach of the trial. This strategy also has the potential to reduce the cost of the trial and the time to complete our interim analysis.
  3. Generate proof-of-mechanism data to show that our lead product supports the growth of blood vessels in patients.
  4. Engage in discussions with pharmaceutical and biotech companies to form alliances around our promising platform.
  5. Strengthen our management team and Board.

 

HOW WE WILL GET THERE

SECURE FINANCING TO COMPLETE THE INTERIM ANALYSIS

The Company is in discussions with several groups to provide some or all of the financing necessary to reach the interim analysis. We already have encouraging commitments to further finance the Company’s growth as soon as we complete this milestone. We will then pursue a NASDAQ listing to improve access to financial markets, increase our trading volume, and increase our shareholder base.

Parallel to pursuing financing and business opportunities, the Company is also actively analyzing partnership opportunities, which could offer the Company a depth of financial resources, management resources and expertise, and business/biotechnology support to the Board. Hemostemix will only pursue partnerships that offer the potential to create significant shareholder value.

At the same time, we continue discussions with major pharmaceutical and biotech companies that have shown a high degree of interest in our technology and our rigorous scientific approach to develop our product.

 

ACCELERATE CLINICAL TRIAL ENROLLMENT, REDUCE COST OF THE TRIAL, ADVANCE MECHANISTIC STUDY, AND CONTINUE TO PURSUE STRATEGIC ALLIANCE

This past year we focused our efforts on building the foundation of the clinical-trial protocol. We made over 3,000 modifications and additions to the clinical trial documents leading to an easier screening and follow-up on our patients. These improvements also will lead to faster patient accrual as well as the ability to operate under the same enhanced protocol across several countries.

The Company has treated approximately half of the patient number needed to reach the interim analysis. The lab in Israel is fully trained and is expecting to handle increased capacity.

Discussions are underway with clinical research organizations to significantly increase the number of patients treated at substantial cost reductions.

I personally met with representatives from the two German Heart Centers in Berlin and Bad Oeynhausen in mid-January to discuss with them aspects of a mechanistic study. This study will allow us to visualize the formation of new blood vessels and to measure increases in blood flow that are the result of the injection of our cell product. This study is critical to prove that our therapy can lead to the growth of new blood vessels and to increased blood flow. With this additional information, we will unlock the value of our platform not just for CLI, but also for other significant markets where decreased blood flow is the problem, as in, for example, ischemic cardiomyopathy associated with chronic congestive heart failure and acute myocardial infarction.

 

STRENGTHEN OUR MANAGEMENT TEAM AND BOARD

I am not aware of any biotech company at our market cap that is operating at a lower burn rate and conducting advanced-stage international clinical trials.

The Company has a four-person management team (CEO, VP of clinical research and development,  VP of clinical research and operations, and consulting CFO). The management team is resourceful and cost-effective. Except for a physical lab in Israel that houses our research team, Management and the Board operate in virtual offices tokeep our overhead to a minimum. We are extremely cost-conscious when it comes to traveling and utilize electronic communications extensively. As a result, our financial resources have largely gone to supporting the clinical trials and research, which are fundamental to the success of a biotech company.

Since early January I have logged over 20,000 air kilometers to expedite clinical trial and financial opportunities, including the following trips:

  1. Travelled to San Francisco to attend the J.P. Morgan conference where the Chairman of the Board of Hemostemix, Bill Baker, and I held serial meetings with potential investors, strategic alliance partners, and potential joint venture partners.
  2.  Travelled to Germany to expedite our mechanistic study.
  3.  Travelled to Washington, DC, where I was an invited guest speaker at the Phacilitate Cell & Gene Therapy World 2016.

The Board and Management recognize the need to add resources to strengthen the Company’s investor relations program and manage an expanded clinical trial program. We will continue to update investors as key initiatives unfold and have taken significant steps in the past several weeks to expand the awareness of our investment opportunity.  

Once again, I thank you for your patience, support, and understanding as we navigate uncertain markets. Our management team is fully committed to the goal of bringing Hemostemix one-step closer to commercialization and increasing shareholder value.

On behalf of the Board of Directors and Management,

Warm regards,

Elmar Reinhold Burchardt, MD, PhD

CEO, President, and Director

 




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