Yea, fairenough Reg – I knew that was a dumb thing to say when I...

Yea, fairenough Reg – I knew that was a dumb thing to say when I said it, I was justmeant to be working and my rants take some time.

I willbreakdown CLBP, ARDS, and GvHD also – but I will spread them out as they can bequite time-consuming.

Opiatesparing pain medications are one of the hot indications that venture capital firmsare looking at currently, as the return on investment is projected to be superhigh.

In 2019,nearly 50,000 people in the United States died from opioid-involved overdoses.¹The Centers for Disease Control and Prevention estimates that the total"economic burden" of prescription opioid misuse alone in the UnitedStates is $78.5 billion a year, including the costs of healthcare, lostproductivity, addiction treatment, and criminal justice involvement.² This figure is over double the estimated economic burden of CHF, which we have already established as a massive unmet medical need.

• Roughly 21 to 29 percent of patients prescribed opioids for chronic pain misuse them. ³(>11 million people)
• Between 8 and 12 percent of people using an opioid for chronic pain develop an opioid use disorder.³
• An estimated 4 to 6 percent who misuse prescription opioids transition to heroin.^4-6
• About 80 percent of people who use heroin first misused prescription opioids.⁶
• In 2017, health care providers across the US wrote more than 191 million prescriptions for opioid pain medication—a rate of 58.7 prescriptions per 100 people.⁷
• Every day, more than 1,000 people are treated in emergency departments for misusing prescription opioids.⁷

People inchronic pain turn to pain relief, in the form of NSAIDs (ibuprofen, celecoxib,etc.), acetaminophen (Panadol), ketamine (rarely due to psychotic sideeffects), and opiates. Other options include surgery, which is often unsuccessful as the constricture of the scaring material during a disk removal causes its own problems and the fusing of disks cause their own on-going pain and restrict motion. As SI has pointed out, back pain is responsible for 50% of opiate use in the USA. Consider this when you look at the above numbers.

People maynot understand how this process works. Major depression is thought to be four times greater in people with chronic back pain than in the general population (Sullivan, Reesor, Mikail & Fisher, 1992).⁸ These people turn to pain relief to get by and retain some functionality. Opiates lead to dependence and tolerance. If an individual that is dependant on opiates come off opiates, they can constantly be in pain as the body has adapted to that level of circulating opioids. As an individual continues using a set dose of opiates, tolerance sets in and the individual needs a higher dose for the same effect. These people may have their prescriptions revoked, and so they return to a street source for their fix to avoid having the withdrawal symptoms from their dependence on prescription opioids. Fentanyl is an extremely potent opioid and is often mixed in with heroin so that dealers get more bang for their buck. This is not precisely done, and what people get on the street is hardly quantifiable. I’m sure you have seen this image:

Not muchroom between a functional dose and a lethal overdose.

Now similarto CHF, MSBs barrier to market for CLBP is regulatory and regulatory alone.

This targetindication is no longer a financial liability for MSB as Gruenthal would be nutsto not honour the partnership – they got a crazy good deal because MSB wasdesperate for cash and external third party validation at the time with limiteddata. Gruenthal will fund the future trial which will be used for European approval and US approval if required. This also will provide some milestone payments for MSB to get by until they become profitable.

We now havea data set that is incredibly compelling. A massive reduction in pain, especially in those who are in the early stages of their disease. Now let us look at our data: “Further, minimal to no pain (VAS < 20) was seen in 60% of these patients treated with MPC + HA at 12 months and in 54% at 24 months (p=0.011 and p=0.036, respectively, compared to saline controls).” Looks like it works to me ?

Let us lookat our opiate sparing data. The test population reduced opiate use by 40%, while those that were in the placebo group increased their opiate use. Therefore, by the end of the trial, the placebo group was using >2x the opiates that the test group was. Pretty significant for a disease that is responsible for 50% of opiate use in a population that has 50,000 dead per year and a $70 billion economic burden.

Something I don't believe is priced in is that this trial was always going to take two trials to get tothe US market. With this news regarding the opiate pathway, an approval pathway that was previously not known or expected by investors was introduced that could hasten this therapy to market by 2-3 years. Let us see if it works for us.

Until nexttime,

Gang gang

1: CDC/NCHS,National Vital Statistics System, Mortality. CDC WONDER, Atlanta, GA: USDepartment of Health and Human Services, CDC; 2019. https://wonder.cdc.gov.

2: FlorenceCS, Zhou C, Luo F, Xu L. The Economic Burden of Prescription Opioid Overdose,Abuse, and Dependence in the United States, 2013. Med Care.2016;54(10):901-906. doi:10.1097/MLR.0000000000000625.

3: VowlesKE, McEntee ML, Julnes PS, Frohe T, Ney JP, van der Goes DN. Rates of opioidmisuse, abuse, and addiction in chronic pain: a systematic review and datasynthesis. Pain. 2015;156(4):569-576.doi:10.1097/01.j.pain.0000460357.01998.f1.

4: Muhuri PK,Gfroerer JC, Davies MC. Associations of Nonmedical Pain Reliever Use andInitiation of Heroin Use in the United States. CBHSQ Data Rev. August 2013.

5: Cicero TJ,Ellis MS, Surratt HL, Kurtz SP. The Changing Face of Heroin Use in the UnitedStates: A Retrospective Analysis of the Past 50 Years. JAMA Psychiatry.2014;71(7):821-826. doi:10.1001/jamapsychiatry.2014.366.

6: Carlson RG,Nahhas RW, Martins SS, Daniulaityte R. Predictors of transition to heroin useamong initially non-opioid dependent illicit pharmaceutical opioid users: Anatural history study. Drug Alcohol Depend. 2016;160:127-134.doi:10.1016/j.drugalcdep.2015.12.026.

7: Centers for Disease Control and Prevention. USprescribing rate maps. Updated October 3, 2018. Accessed August 21, 2019.

8: Sullivan MJ, Reesor K, Mikail S, Fisher R. The treatment of depression in chronic low back pain: Review and recommendations. Pain. 1992;52:249.