Cytomedix is a biotechnology company that develops and licenses autologous cellular processes (i.e., using the patient’s own body products), including Cytomedix’s proprietary AutoloGel™ System. The AutoloGel System produces platelet-rich plasma (PRP) gel. Scientific studies have documented that platelets contain multiple growth factors and plasma contains fibrinogen. When activated, fibrinogen develops a fibrin matrix scaffold.

The Company currently markets the AutoloGel™ Centrifuge II, the AutoloGel™ Wound Dressing Kit, and the AutoloGel™ Reagent Kit containing certain commercially available reagents needed for the AutoloGel™ process The AutoloGel™ Centrifuge II can be used for the production of PRP. The AutoloGel™ Wound Dressing and Reagent Kits can be used according to the instructions for use under the direction of a physician.

Multiple growth factors have not been widely used in the traditional clinical setting because their use have generally not been available or widely known by clinicians. Until a few years ago, the autologous process of securing multiple growth factors from a patient’s blood products was, substantially, an exclusive process available through outpatient wound care centers affiliated with Curative Health Services (“Curative”). In January 2001, the Company purchased certain technology, assets and intellectual property rights associated with use of autologous multiple growth factors from Curative. Autologous PRP is currently used by our licensees in orthopedic and surgical applications.

The Company has initiated a broad-based patent and licensing strategy intended to enforce the rights under the Company’s patents in order to ensure that Cytomedix shareholders derive economic benefit from the Company’s intellectual property. In 2005 and 2006, the Company identified and successfully pursued numerous companies, both small and large, that market products similar to AutoloGel™, that the Company believed were infringing or inducing infringement of its intellectual property rights. The Company intends to press forward aggressively in other instances of infringement with aggressive legal and business actions to defend its intellectual property and, where possible, arrive at equitable settlements with infringers.

Cytomedix has conducted clinical trial, wound/patient registries and cohort studies specific to the use of PRP on chronic wounds and continues to explore research opportunities for the use of the AutoloGel Process. Chronic wounds are a significant public health issue and segment of the wound management market in the U.S.

   

According to the American Diabetes Association (“ADA”)(1), there are approximately 20.8 million people with diabetes in the U.S., or 7% of the total population. It is estimated that 15-20% of these people with diabetes will develop a foot ulcer in their lifetime and that 14-24% of diabetic foot ulcers result in amputation.(2) Over 82,000 amputations per year have been documented.(3) Estimated amputation costs are between $20,000 and $60,000 per procedure (4), implying an aggregate cost of between $1.6 billion and $4.9 billion per year. The chances of a second amputation within 3-5 years may be as high as 50%, with a 5 year post-amputation mortality rate of 39-68%.(5).

Venous Stasis Leg Ulcers

Venous leg ulcers are the most frequently occurring type of chronic wound. The prevalence rises dramatically with age, increasing to 1% of the population over age 60. It is estimated that treatment costs total between $2.5 to $3.5 billion annually and a loss of 2 million workdays per year. (4)

Pressure Ulcers

Over 2.0 million pressure ulcers occur each year with an annual cost greater than $1.3 billion. One study indicates that nearly 15% of hospitalized patients age 65 or older developed a pressure ulcer during a 5-day or longer stay. Furthermore, up to one-fifth of all home health service visits involve care of a pressure ulcer, and more than one-third of people with spinal cord injuries develop pressure ulcers. (4)

Cytomedix is well-positioned to expand its product and intellectual property portfolios through opportunistic acquisitions. These will enable the company to be a leader in the development and commercialization of cellular therapies. The company’s key infrastructure and cellular material processing capabilities will enable Cytomedix to be the partner of choice for biotechnology, device and pharmaceutical companies pursuing cellular therapies.

References

(1) www.diabetes.org, 2006
(2) H.R 3203 Submitted to the House of Representatives, Sept 30, 2003
(3) National Diabetes Statistics, National Diabetes Information Clearinghouse, National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), NIH, 2004
(4) Advanced Wound Management: Healing and Restoring Lives; Advanced Medical Technology Association (AdvaMed); June 2006
(5) Reiber GE, Boyko EJ, Smith DG: Lower Extremity Foot Ulcers and Amputations in Diabetes. In Diabetes in America. 2nd ed., National Institutes of Health, NIDDK, NIH Pub No. 95-1468, 1995.
(6) Growth Factors: Indications, Products, and Markets; Kalorama Publications; October 2003