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October 05, 2015

Stratatech Awarded BARDA Project BioShield Contract Valued up to $247 Million for StrataGraft® Skin Tissue for Thermal Burns

MADISON, Wis., October 5, 2015 – Stratatech Corp., a leading regenerative medicine company, announced today that it has been awarded a contract valued at up to $247 million by the Biomedical Advanced Research and Development Authority (BARDA), part of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response. The contract is for the advanced development of StrataGraft® skin tissue, the Company’s flagship skin replacement product, as a medical countermeasure to treat patients with severe thermal burns. The planned clinical studies will enable Stratatech to file a Biologics License Application with the FDA for the commercial marketing of StrataGraft tissue, and confirm efficacy in all key patient populations. The contract also provides for the procurement of finished product by the U.S. government so as to establish an inventory of StrataGraft tissue for use in case of a natural or man-made mass casualty emergency.

This five-year BARDA Project BioShield contract is structured with a base period plus defined contract options covering a series of clinical trials, product procurement and other activities. Stratatech’s initial award under this contract totals $60 million for the base period and initial product procurement. This new contract replaces and expands upon a previously awarded $47 million BARDA Advanced Research and Development contract, of which $18 million has been awarded to date. Together, this brings the combined potential support from BARDA to nearly $265 million.

“The financial impact of this new award to Stratatech is unquestionably significant and will accelerate our transition into a fully integrated, operating company. But the real beneficiaries here are the severe burn patients who for the first time will have a therapeutic option available to them in lieu of painful skin transplantation,” said B. Lynn Allen-Hoffmann, Ph.D., Stratatech’s chief executive and chief scientific officer. “Providing these patients with an off-the-shelf regenerative skin tissue has the potential to transform severe burn care. Our partnership with BARDA has been and continues to be instrumental in advancing this orphan product through clinical development.”

StrataGraft tissue is a full-thickness, human cell-based skin tissue that was designed to mimic natural human skin, with both dermal and fully differentiated epidermal layers. The epidermal layer is comprised of the Company’s NIKS® cells, a human keratinocyte progenitor cell line that faithfully reproduces normal skin architecture and barrier function. Clinical trial outcomes to date have been compelling. Trials have been designed to assess whether StrataGraft tissue can be used in lieu of autograft (skin transplantation) to achieve wound closure. In the most recently completed study, 27 of 28 evaluable, per-protocol patients achieved complete wound closure of their StrataGraft treated sites with a single application of tissue. This is the first therapeutic product to achieve a clinical outcome comparable or superior to autografting.

There is an urgent need for new treatment options for burns. The American Burn Association estimates that 1.1 million people suffer burns annually in the U.S. Approximately 40,000 patients require hospitalization. Severe burns and other major skin trauma are life-threatening injuries that require immediate surgical intervention. Frequently, this involves temporary coverage of the wounds with cadaver skin or synthetic dressings to prevent infection and dehydration because there are no full-thickness skin substitutes commercially available for the treatment of burns. Permanent closure of the wound is generally accomplished through split-thickness skin autografting after the wound bed is sufficiently stable that it will accept the transplanted tissue. Although this regimen is the standard of care for severe burns, cadaver skin has limited availability and introduces the potential for pathogen transmission, while the donor site wounds created during autograft surgery are extremely painful and frequently result in significant scarring, all of which are serious drawbacks to this approach.

In the case of a mass casualty thermal burn event, the Government Accountability Office estimates that more than 10,000 patients might require thermal burn care. The limited number of specialized burn centers and related medical infrastructure in the U.S. creates a public health need for therapies that could be deployed quickly for use in these and other care sites. Successful completion of this contract would position the Company’s StrataGraft skin tissue for rapid deployment as a medical countermeasure.

The current award is funded pursuant to contract HHSO100201500027C effective September 29, 2015. For more information about BARDA, please visit their website at www.phe.gov/barda.

About Stratatech Corporation
Stratatech is a privately held regenerative medicine company focused on skin regeneration therapies. These products are made using the company’s proprietary NIKS® cells – a consistent and well-characterized source of human keratinocyte progenitor cells that faithfully reproduces normal epidermal skin architecture and barrier function. The company is using these progenitor cells to create a portfolio of therapeutic tissues to treat orphan and ultra-orphan indications such as severe burns and other complex skin defects, as well as large and growing indications such as non-healing ulcers. The company’s flagship product, StrataGraft® tissue, is in Phase III clinical development for the treatment of severe burns. The company’s second therapeutic product, ExpressGraft™ anti-infective tissue, has recently received FDA approval to enter clinical testing as a treatment for non-healing diabetic foot ulcers.

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