Funding Strategy

To date, the Company has received funding from private, institutional and corporate investors. In January 2006 the Company received $1.5 million from Sanderling Ventures to fund clinical development of Anginera. In February, Guidant Corporation, now Boston Scientific, made an additional equity investment. Additional capital has and will be used for the acquisition of the intellectual property, research at academic institutions, and corporate activities and operations for conducting Anginera human clinical trials. Theregen believes that it can further develop its products using a business funding model that enables corporate partnering and licensing agreements coupled with a low cost structure. Where appropriate, the company leverages external research and manufacturing facilities and the expertise of independent investigators and academic institutions.

Corporate Collaborations and Strategic Alliances

Theregen is committed to establishing strategic alliances by targeting specific corporate partners. This will enable the Company to expand its resources, strengthen its patent and technology base, and increase its ability to develop and commercialize products in the areas of cardiovascular and vascular health. In addition, Theregen expects to advance its development activities on several related fronts:

• Develop Anginera for applications in patients suffering from congestive heart failure (CHF)
• Perfect a minimally-invasive delivery method for Anginera that would permit treatment of individuals without the need for open-chest surgical procedures (diffuse small vessel disease is a problem long before the need for heart bypass intervention is necessary)
• Advance an existing program from pre-clinical to clinical trials for peripheral vascular disease indications
• Develop vascular grafts for peripheral and cardiac indications

Potential Business Risks

The Company is at an early stage of development, has operating losses and anticipates future losses until its lead products demonstrate positive efficacy in humans and related corporate partnerships are established.

Theregen will require additional funding, which may be available in the public or private capital markets and through collaboration agreements with partners. If the Company obtains additional funding by selling more stock, share ownership by current stockholders will subsequently be diluted.

Additional risks associated with operation of the business include:

• The uncertainty related to patents owned by other companies
• The inability to enter into collaborative arrangements
• Delays in patient enrollment, increasing costs and program delays
• FDA delays due to request for additional information and/or studies

Anginera will be classified as a biologic product by the Center for Biologic Evaluation and Research (CBER) at FDA. Theregen has established a good working relationship with CBER to meet the regulatory requirements leading to product approval. There is no assurance that the new product classification of Anginera may not lead to delays in product approval. Dermagraft is currently approved as a medical device for various aerobic, external, wound-healing applications, but Anginera's manufacturing process will have to meet the CBER requirements as a biologic for product approval.

It is the intent of Management to anticipate external scientific and economic factors and manage the uncertainty intrinsic to an early-stage regenerative medicine company with the inherent risks while maximizing the significant upside potential of the Company.

 

This information is provided to the recipient for information purposes only and is not a solicitation or offer to buy or sell securities of Theregen Corporation.