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We are a biotechnology company specializing in the development of diagnostics and therapeutics for osteoarthritis (OA), a disease of the joints that renders the afflicted immobile and in constant pain. Our initial product was a biomarker assay for the detection of inflammation in joints and the spine. This discovery led to the development of a therapy that uses a novel protein called A2M (alpha-2-macroglobulin) to halt the progression of osteoarthritis and allow the body to repair itself. Our research attracted the attention of Johnson and Johnson, who invested over $4M and owns ~16% of the company. The National Institute of Health also supported our research and awarded the company a prestigious $1.8M SBIR grant. Over 6,000 patients have been successfully treated to date, cementing Cytonics as a leader in regenerative medicine research and development.

Osteoarthritis (OA) is a crippling disease that is caused by the breakdown of cartilage within joints. While the exact cause of OA remains unknown, post-traumatic injuries (e.g., ACL tear) and age-related wear and tear of the joints significantly increase the incidence of the disease. Over 27 million people are treated for arthritis-related pain in the United States alone, placing a $185B burden on our healthcare system and economy. Missed work, lost productivity, and excessive medical expenditure all result from the lack of an effective treatment. The discovery of a safe, effective therapy for OA would have an enormous impact on the well-being of our nation’s population and significantly reduce the burden placed on our economy.

Our breakthrough technology is based upon a naturally occurring molecule within the body. This molecule, alpha-2-macroglobulin (A2M), is found within our joints and blood to provide a defense against the excessive breakdown of cartilage. Unfortunately, the A2M in our body is found in low concentrations within the joints and is unable to fully protect against the progression of OA in damaged joints and an aging population. We have developed two medical devices that purify and concentrates the A2M in patients’ blood, allowing us to inject the concentrate back into the OA-afflicted joint. The results of the treatment are often observed within hours or days of the procedure and have long-lasting effects of 6 or 12 months. No more than 1 to 2 injections are required per year to stop OA progression and joint pain. Our therapy has allowed over 4,000 patients to reclaim their mobility and live their lives pain-free.

We are currently pursuing FDA clinical trials for a pharmaceutical “recombinant” version of our A2M therapy (recombinant A2M). Not only will the recombinant A2M be manufactured in a lab and produced at an industrial scale, but it will be more effective at treating OA due to increased concentrations and effectiveness. Our recombinant A2M is secured by extensive international patents that protect our ingenuity and design. To date, the recombinant A2M has been proven to be both safe and effective in animals, giving us confidence that we will show similar results in human clinical trials and successfully bring our recombinant A2M drug product to market.

Our approach was very similar to how “over-the-counter” insulin was first developed. Insulin was discovered in the pancreas of animals in the late 1800s and was used to treat patients with diabetes. The extraction and purification of insulin from animals was both costly and time-consuming, limiting the number of patients that could be treated. In the early 1900s, Eli Lilly developed a “recombinant” (synthetic) version of insulin that was based on the naturally-occurring molecule. Now, insulin is produced on an industrial scale and used to treat the entire patient population. Innovations in genetic engineering allowed for enhancements to be made to the insulin molecule to increase its effectiveness. We employed a similar technique, engineering the recombinant A2M molecule (CYT-108) so that it functions similarly to the A2M found within our bodies, but much more effectively.

Due to the time consuming and costly nature of concentrating A2M from a patient’s blood, our APIC therapy is relatively expensive at $1,000 to $3,000 per injection depending on the degree of pain and the size of the joint being treated. Our development and large-scale production of CYT-108 will bring the treatment cost down significantly by opening the door for insurance coverage. Our recombinant A2M drug product will also be more accessible to the patient population and easier to administer for physicians. We anticipate that it will gain widespread adoption as the preeminent treatment for OA.

The current standards of care for osteoarthritis (OA) are merely palliative. Corticosteroids, NSAIDs, and hyaluronic acid are used as first-line treatments to address the significant symptoms of OA (pain and inflammation), but not the cause (cartilage breakdown). Physicians prescribe corticosteroids to subside the inflammation at the expense of the immune system, rendering the patient vulnerable to infection by viruses or bacteria. NSAIDs (e.g., Tylenol) are used to address acute pain at the expense of liver toxicity. In extreme cases, hyaluronic acid may be injected into the joint to increase the strength of the cartilage. Unfortunately, hyaluronic acid provides only temporary relief with a half-life of 12-30 hours, meaning that half of the drug is removed by the body in that timeframe. Routine administration of corticosteroids, pain relievers, and hyaluronic acid are required to bring any amount of relief. However, the harmful side effects of these treatments necessitate the development of an alternative therapy that addresses the root cause of OA and not the symptoms.

Our recombinant A2M addresses this root cause of OA: cartilage damage as a result of injury or naturally occurring as part of the aging process. Our A2M molecule inhibits the enzymes that eat away at the cartilage proteins, preventing the bone-on-bone interaction, swelling, and pain associated with advanced OA. Only 1 to 2 injections per year are required to halt the progression of OA and bring about significant pain relief. Importantly, our recombinant A2M is very similar to the natural A2M found in the body. This similarity gives recombinant A2M an excellent safety profile, as it is not recognized as a foreign substance within the body. With a half-life of 5 to 6 days and the high concentrations injected, the A2M stays in the joint for sufficient time to stop inflammation and cartilage degradation. Our treatment represents a safer, more effective option than the current standards of care.

A2M is a naturally occurring substance found in the blood and concentrated in the joint cavity. It has been shown to protect against cartilage breakdown caused by OA. A2M inhibits a class of deleterious enzymes called proteases, which are overabundant in the joints of patients with OA, and degrade the cartilage cushion and cause inflammation. A2M inhibits all the inflammatory mediators of the process, eliminating the burden on the immune system and allowing the body to heal itself efficiently. Unfortunately, the naturally-occurring A2M is insufficient to completely halt the progression of OA, and only delays the onset of the symptoms. We have demonstrated that concentrating A2M within the joint cavity completely halts the progression of OA, allowing the body to heal itself and bring about significant relief to the suffering patient. Our recombinant A2M, CYT-108, is able to be delivered at high concentrations and low volumes within the joint cavity. Since it is a pure form of A2M, the body will not have to contend with the “junk” that is found in platelet-rich plasma (PRP) formulations and can go about healing the damaged cartilage more efficiently.

Unlike other anti-inflammatory drugs, our product is not injected into the bloodstream for circulation to the joints. Instead, we inject it directly into the damaged joint to limit the potential side effects and concentrate the drug within the joint cavity. The recombinant A2M is a large molecule, which makes it very difficult for it to be diffuse from the joint into the bloodstream and circulate to other organs. What’s great about our method of administration is that the recombinant A2M remains in therapeutic doses within the joint cavity for more extended periods.

Our flagship APICTM-A2M therapy (derived from patients’ blood) has been extensively tested in humans and has been proven to be extraordinarily safe and effective. Our recombinant A2M drug, CYT-108, has demonstrated that it is both safe and effective in a small pre-clinical trial conducted in rodents. In fact, CYT-108’s efficacy surpassed of the natural-occurring A2M! We are very confident that we will be able to repeat these outstanding positive results in human clinical trials.

Our next milestone will be a sizeable pre-clinical trial, where we will conduct a study to show that the recombinant A2M has no adverse effects and is tolerable at therapeutic doses. This study will be initiated and completed in 2020. Once the FDA acknowledges the pre-clinical success of our drug, we will be granted Investigational New Drug (IND) approval to move forward into Phase 1 human clinical trials. Our early success with APICTM allowed us to develop strong relationships within the regenerative medicine community and with large pharmaceutical companies. Once we prove the safety of our drug in Phase 1 clinical trials, we will begin to negotiate with strategic partners to take the drug to market.

Upon successful completion of the Phase 1 studies, we will have the option of selling to Johnson & Johnson, who already owns approximately 16% of the company. J&J has built an entire division dedicated to spine and joint therapies, and CYT-108 will be an excellent addition to their pipeline. Alternatively, venture capitalists will start to take notice because our drug development project will be “de-risked” enough to make a substantial investment. A large VC investment would allow us to complete additional FDA-required testing and build additional value before we seek a buyer for the company.

CYT-108 has the potential to be a blockbuster drug, and we have the clinical evidence to prove it. Our current APICTM-A2M therapy has been used to treat over 6,000 patients nationwide. We have already proven that concentrated doses of A2M (from the patient’s own blood) injected into the joint cavity can bring about relief within 24-48 hours, and have long-lasting anti-arthritis effects. The clinical success of APICTM is a testament to the legitimacy of the core of science.

There are very few opportunities in the pharmaceutical industry to have a protein that can be tested as extensively as we have in humans before you seek FDA approval. The fact that we’ve been able to concentrate this protein from human blood puts CYT-108 in a unique class of its own. We are confident that our drug will be safe to inject into joints because we’ve already done it thousands of times. The solution to treating OA is a “no brainer,” and we are on the cusp of producing the drug capable of curing this disease.

From a management standpoint, we are incredibly well-equipped. We have six orthopedic surgeons, two of which are MD and PhDs, who have worked closely with the company since its inception. Three of those surgeons are well-known clinical researchers from Stanford University. These physicians have guided the company since Day 1, and are heavily vested in its success. Our vital team members have extensive biochemistry research backgrounds from industry and academia. We also have members with comprehensive business management, finance, and fundraising experience. For a company of our size, the sheer number of advanced degree holders, industry experts, and key opinion leaders on our team are exceptional.

We have been very well capitalized to date with approximately $20M in funds raised. We used this capital to develop two A2M therapeutic devices and an advance recombinant A2M drug product, for which we are pursuing clinical trials. All of our preliminary research has been completed and our recombinant A2M has been confirmed both safe and effective in small preclinical trials. We require $1-3 million to manufacture our recombinant A2M for clinical studies, complete the large pre clinical study, and enter Phase 1 clinical trials.

While we have shown the recombinant A2M is both safe and effective in small rodent models of osteoarthritis, there is always the chance that additional trials might not give us sufficient results for FDA approval. This can happen for a variety of reasons. One of the most common reasons is that statistical significance cannot be demonstrated, meaning that the results from the treatment are not substantially better than placebo treatment (e.g., an injection of saline).

A common reason statistical significance fails to be observed is that the number of subjects in the trial is too small. To compensate for this risk, we will expand the size of our study and include a large number of subjects. Another reason that FDA approval may not be granted is due to how the study is constructed. If the study protocol is not adequate, then the FDA may view the data as insufficient. We are scheduling a meeting with the FDA to review our large animal pre-clinical study protocol and Phase 1 clinical trial protocol to make sure that we meet all of their requirements.

An excellent way to determine the size of the osteoarthritis (OA) market is to look at the current market for rheumatoid arthritis (RA) treatments. Historically, rheumatoid arthritis was treated by anti-inflammatories and painkillers much like osteoarthritis. These palliative measures were not adequate. Fortunately, researchers discovered that RA was caused by the overproduction of a single protein called TNF-alpha. One of the researchers won a Nobel Prize for this discovery. Not long after, drug companies developed a way to stop TNF-alpha via TNF-alpha Inhibitors. Three of the top ten selling drugs in the world are TNF-alpha Inhibitors, with over $30 billion worth of world-wide sales last year.

We know that the incidence of OA is six times that of RA. Six times the current sales of TNFalpha Inhibitors equates to a $180 billion market for any therapy that can treat OA like our A2M product does. Even if we grab 1% of that market, we would be a $1.8 billion company (almost a double unicorn!).

It is also important to consider that unlike rheumatoid arthritis, osteoarthritis can also result from injury to the joint. Our estimate of $180 billion is very conservative and the actual number is likely much more significant. Just think about how many athletes suffer from ACL, MCL, and rotator cuff tears each year. Our founder and CEO, Dr. Guy Scuderi, is a fourth-degree black belt in jujitsu and regularly incurs sparring-related injuries. He routinely gives himself A2M injections and usually is back in fighting form within a week. His training partners also swear by the effectiveness of this therapy, and we have an ever growing population of patients who strongly endorse Cytonics’ A2M therapies as the cure for their pain and OA.

We have been very well capitalized to-date ($20M raised since inception), and while we have a strong track record of fundraising, funding is always an issue for biotech companies looking to enter FDA clinical trials. We recently closed a financing round where we raised $794,000, from a network of physicians and patients who use APICTM, in only two months! People understand our technology and the high potential return on investment. Once we successfully complete our SeedInvest campaign, we will be in a very strong position to complete pre-clinical and Phase 1 clinical trials for our recombinant A2M drug, CYT-108.

The reason that large pharmaceutical companies have not been able to do what we’ve done is that they have adopted a very narrow approach to treating osteoarthritis (OA). Big Pharma has tried to imitate the successful discovery of a treatment for rheumatoid arthritis (RA) by looking for a single cause of OA. They failed to realize that the cause of OA is multi-faceted and cannot be distilled down to one root cause. Their attempts failed because they didn’t see the bigger picture, which is that OA is much more complex and that a successful therapeutic would have to inhibit multiple targets instead of just one. Fortunately, our lab has proven that A2M is a broad spectrum inhibitor of all proteins that could potentially cause OA.

Another reason that Big Pharma hasn’t been able to develop a therapeutic like ours is that their focus has historically been on developing small molecule drugs (think pills that come in a bottle) instead of biologic therapies (like our recombinant A2M). By establishing a biologic treatment, we open ourselves up to potential fast-track status by the FDA, which would bring our recombinant A2M drug to market much faster and at a significantly lower cost. Biologics have taken off in recent years, and we are at the forefront of this innovation.

We are very proud of the fact that we have not required any venture capital funding and have raised close to $20 million on our own! The secret to our fundraising success has been the innovation of our technology, our ability to demonstrate clinical efficacy, and our relationships within the regenerative medicine community. We were able to pique the interest of Johnson and Johnson, who made a substantial investment in the company, and the NIH, who awarded us $1.8 million worth of SBIR grants. The majority of our investors are orthopedic surgeons, physicians, and patients that use our technology and understand how effective it is. We recently raised $794,000 in two months from our current investor base! Because we haven’t relied on venture capital funding in the past, we are going to be a desirable acquisition target in the future.

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Cytonics has received over $15M in funding to-date, including $1.8M in grants from the National Institute of Health and a $4M investment from Synthes (a Johnson and Johnson company). We are seeking to raise $1M by conducting a public offering under Regulation CF. Proceeds will be used to advance our lead drug candidate, Cyt-108, into FDA clinical trials and fund ongoing business operations.

Cytonics Corporation is offering securities under Regulation CF and Rule 506(c) of Regulation D through SI Securities, LLC (“SI Securities”). The Company has filed a Form C with the Securities and Exchange Commission in connection with its offering, a copy of which may be obtained at: https://seedinvest.com/cytonics