GNMX Aevi Genomic Medicine Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

Date of Report (Date of Earliest Event Reported):

September 9, 2015

 

Medgenics, Inc. (Exact Name of Issuer as Specified in Charter)

 

Delaware (State or Other Jurisdiction of Incorporation or Organization)

1-35112 (Commission File Number)

98-0217544 (I.R.S. Employer Identification Number)

 

435 Devon Park Drive, Building 700 Wayne, Pennsylvania (Address of Principal Executive Offices)

19087 (Zip Code)

 

(610) 254-4201 (Registrant’s Telephone Number, Including Area Code)

 

Not applicable (Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨	Written communications pursuant to Rule 425 under the Securities Act
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

Item 1.01. Entry Into a Material Definitive Agreement.

 

neuroFix Purchase Agreement

 

On September 9, 2015, Medgenics, Inc., a Delaware corporation (the “Company”), entered into an Equity Interest Purchase Agreement (the “Purchase Agreement”) with neuroFix therapeutics, inc., a Delaware corporation (“Legacy Corp”), neuroFix, LLC, a Delaware limited liability company (“neuroFix”), The Children’s Hospital Of Philadelphia, a Pennsylvania nonprofit corporation (“CHOP”), Philip Harper, an individual (“Harper”), and Hakon Hakonarson, an individual (“Hakonarson”), pursuant to which the Company acquired the equity of neuroFix (the “Acquisition”). Immediately prior to the execution of the Purchase Agreement, Legacy Corp had contributed its business to neuroFix.

 

Under the terms of the Purchase Agreement, Legacy Corp, neuroFix, CHOP, Harper and Hakonarson agreed to consummate the Acquisition in consideration for certain upfront, milestone and earnout payments related to certain product sales by the Company. The payments by the Company are as follows:

 

·

an upfront payment of $2 million in cash paid upon the consummation of the Acquisition;

 

·

a payment of $6 million in cash and common stock of the Company payable upon the earlier to occur of (i) the achievement of a corporate milestone and (ii) March 31, 2016;

 

·

additional payments of up to $450 million upon the achievement of certain developmental, regulatory and sales milestones related to an oral formulation of NFC-1 (the “Product”) and any new chemical entity developed by the Company covering the same indication as the Product (an “NCE”); and

 

·

earnout payments equal to a percentage of certain product sales by the Company using tiered rates ranging from the mid- to high single digits depending on the Product or NCE.

 

In addition to the foregoing, in the event the Product is approved by the United States Food and Drug Administration (the “FDA”) for additional indications beyond the initial indication, additional payments of $25 million for each such additional indication shall be paid by the Company.

 

The price per share for all common stock of the Company issued in connection with the Acquisition shall equal the lower of (a) the closing price of the Company’s Common Stock as reported by the NYSE MKT exchange on the business day immediately prior to the issuance of such Company Common Stock, and (b) an amount equal to the volume weighted average price for the Company Common Stock as reported by the NYSE MKT for the ten (10) Trading Days immediately prior to the issuance of such Company Common Stock. In addition, pursuant to the Purchase Agreement, the Company shall not issue more than 19.99% of the amount of common stock outstanding on the day it entered into the Purchase Agreement without first obtaining the approval of its stockholders and, in no case, shall the Company issue more than 49.99% of the amount of common stock outstanding on the day it entered into the Purchase Agreement.

 

The Purchase Agreement contains customary representations, warranties and covenants. The Purchase Agreement also contains non-compete and non-solicit covenants pursuant to which Legacy Corp, Harper and Hakonarson agreed not to compete with the Company or solicit the Company’s customers or suppliers after the closing. Pursuant to the terms of the Purchase Agreement, Legacy Corp, CHOP, Harper and Hakonarson will indemnify the Company and its affiliated parties for breaches of their respective representations and warranties, breaches of covenants and certain other matters. The representations and warranties set forth in the Purchase Agreement generally survive for 24 months following the closing of the Acquisition, with longer survival periods with respect to certain fundamental representations and warranties.

 

The complete Purchase Agreement will be attached as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2015 (the “Form 10-Q”). The Company intends to seek confidential treatment for certain terms of the Purchase Agreement at the time of filing such agreements with the Form 10-Q.

 

 

CHOP License Agreement

 

Immediately prior to and in connection with the Acquisition, neuroFix entered into a License Agreement (the “License Agreement”) with CHOP, pursuant to which CHOP would license to neuroFix certain technology owned and controlled by CHOP related to ADHD and certain other neurological and neuropsychological indications. Pursuant to the License Agreement, CHOP licenses to neuroFix (coupled with a right to sublicense) certain patent rights and compound know-how on an exclusive, worldwide, royalty-bearing right and license basis, and certain CHOP know-how (other than compound know-how) on a non-exclusive, worldwide, royalty-bearing right and license basis. CHOP also grants to neuroFix an exclusive option during the term of the License Agreement to negotiate an exclusive license to certain CHOP intellectual property.

 

Pursuant to the License Agreement, CHOP retains rights to the licensed patent rights and know-how to conduct teaching, educational, research and patient care activities itself and to conduct collaborations with certain not-for-profit, governmental, educational or non-commercial third parties and for purposes outside of the field of the license. Under the License Agreement, neuroFix grants to CHOP a non-exclusive, worldwide, fully paid up, royalty-free license under all intellectual property rights controlled by neuroFix to make and use certain products for education and non-commercial research purposes.

 

In addition to neuroFix having issued equity to CHOP in partial consideration for the rights granted under the License Agreement (which such equity was issued immediately prior to the Acquisition described above), CHOP is eligible for certain milestone and royalty payments under the License Agreement as further described below:

 

·

up to $1.5 million in regulatory and sales milestone payments in connection with each FDA-approved indication obtained by neuroFix utilizing intellectual property licensed under the License Agreement;

·

royalty payments equal to a percentage of certain product sales by neuroFix using a fluctuating rate in the low single digits (adjusted downward to the extent third party royalty payments exceed a certain percentage in a given calendar quarter);

·

annual maintenance fees of equal to or less than $100,000 depending on the year; and

·

a certain percentage (ranging from mid-single digits to the mid-teens depending on if other rights of neuroFix are also licensed to the sublicensee at the same time) of all sublicensee income (except any amounts attributable to sublicensed sales by a certain party in Japan).

 

The License Agreement will terminate, with respect to each product and each territory covered by the License Agreement, upon the later of (i) the expiration of the certain CHOP patent rights and (ii) January 1, 2025, at which time the license rights granted to neuroFix become perpetual, irrevocable, fully paid-up and royalty-free. The License Agreement could also be subject to termination by CHOP if neuroFix is not achieving certain specified development plans and diligence events and is not undertaking commercially reasonable efforts to achieve such events.

 

The complete License Agreement will be attached as an exhibit to the Form 10-Q. The Company intends to seek confidential treatment for certain terms of the License Agreement at the time of filing such agreement with the Form 10-Q.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The information set forth in Item 1.01 above is incorporated by reference into this Item 2.01.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02. The issuance of common stock of the Company pursuant to the Purchase Agreement is expected to be issued through a private placement to an accredited investor in a transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder.

 

 

Item 7.01. Regulation FD Disclosure.

 

The Company issued a press release on September 9, 2015, announcing the Acquisition. A copy of such press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference. The Company also placed a Corporate Slide presentation on its corporate website on September 9, 2015, detailing the Acquisition. A copy of such presentation is attached to this Current Report on Form 8-K as Exhibit 99.2 and incorporated herein by reference. These above items shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)	Exhibits: The Exhibit Index annexed hereto is incorporated herein by reference.
99.1	Press Release dated September 9, 2015
99.2	Corporate Slide Presentation

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Medgenics, Inc.
Date:  September 9, 2015	By:	/s/ John Leaman
		John Leaman
		Chief Financial Officer

  

 

EXHIBIT INDEX

 

Exhibit Number	Exhibit
99.1	Press Release dated September 9, 2015
99.2	Corporate Slide Presentation

 

 

 

Exhibit 99.1

 

News Release

 

Medgenics Acquires Phase 2-Ready CNS Program: NFC-1

 

·

Strong Efficacy Signal Established in Genetically Identified Subset of ADHD Patients

·

Development will Include Neuropsychiatric Symptoms of 22q11.2 Deletion Syndrome

 

PHILADELPHIA (September 9, 2015) – Medgenics, Inc. (NYSE MKT: MDGN) today announced the acquisition of neuroFix Therapeutics, LLC, the developer of NFC-1, a first-in-class, non-stimulant metabotropic glutamate receptor (mGluR) neuromodulator entering Phase 2/3 for the treatment of mGluR network mutation positive Attention Deficit Hyperactivity Disorder (mGluR+ ADHD), as well as neuropsychiatric symptoms resulting from a related rare genetic disorder, 22q11.2 Deletion Syndrome (22q11.2 DS). Hakon Hakonarson, M.D., Ph.D., Professor and Director of the Center for Applied Genomics (CAG) at The Children’s Hospital of Philadelphia (CHOP) founded neuroFix to pursue development of NFC-1 following a breakthrough genetic discovery. Medgenics acquired all outstanding shares of neuroFix for upfront consideration of $2 million cash, a series of performance-based milestone payments and sales royalties.

 

“This acquisition represents the first of a pipeline of opportunities resulting from our collaboration with the Center for Applied Genomics,” said Mike Cola, Chief Executive Officer, Medgenics. “Additionally, it expands our company focus beyond gene therapy to broader genomic capabilities, allowing us to identify and treat pediatric patients with serious, unmet medical needs.”

 

A recently completed five-week Phase 1b dose-escalation study in 30 patients of NFC-1 demonstrated strong efficacy signals in several validated ADHD scales in mGluR+ adolescents with ADHD symptoms. The treatment effect of NFC-1 appeared more robust over time and at higher doses. NFC-1 was well tolerated, with no treatment-related serious adverse events reported. Additionally, 20 of the 30 enrolled patients elected to continue in a long-term safety trial in order to maintain access to therapy. The results of the study will be presented at the 2015 American Academy of Child and Adolescent Psychiatry (AACAP) Annual Meeting on October 26-31 in San Antonio, Texas.

 

"In the NFC-1 GREAT study we observed improvement not only in ADHD symptoms including inattention and hyperactivity, but also in other neurobehavioral symptoms including anxiety, mood and sleep disturbance,” said Study Principal Investigator, Josephine Elia, MD, Neuroscience Center, Department of Child and Adolescent Psychiatry, Nemours/Alfred I. duPont Hospital for Children. “These results are meaningful for patients and their families and the data suggest a compelling clinical profile for NFC-1 for these impairing comorbidities.”

 

 

NFC-1 also has the potential to help the thousands of patients around the world with a rare and severe genetic disorder known as 22q11.2 Deletion Syndrome. Among many other abnormalities, these patients suffer from severe neuropsychiatric disorders. “Surgery can correct the structural abnormalities, such as congenital heart disease and palatal abnormalities, in many of these patients. In contrast, existing therapeutic options for these neuropsychiatric disorders are often inadequate in their effectiveness and may cause unwanted side effects. The discovery that disruptions in the mGluR network underlie these disorders and the promise of NFC-1 to treat them provides new hope for these patients and their families.” said Donna M. McDonald-McGinn, MS, CGC, Associate Director of Clinical Genetics and Program Director of the 22q and You Center at CHOP.

 

“We are elated to have the opportunity to move NFC-1 into Phase 2/3 development. The science underlying this new program allows us to identify the patients who can benefit most with high specificity,” stated Dr. Garry Neil, Chief Scientific Officer, Medgenics.

 

Conference Call

Medgenics management will host a conference call and live audio webcast today, at 10 a.m. ET. In order to participate in the conference call, please dial (844) 466-4113 (domestic) or (765) 507-2652 (international). The conference ID number is 36396869.

 

The live webcast can be accessed under "Events" in the Investors section of the Company's website at www.medgenics.com  or you may use the link: http://edge.media-server.com/m/p/zs4om2gd.

 

A replay of the call will be available two hours after the end of the conference call through September 23, 2015. To access the replay, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and reference the conference ID number. The archived webcast will be available for 30 days in the Investor section of Medgenics' website at www.medgenics.com.

 

About Medgenics, Inc.

Medgenics is dedicated to unlocking the potential of genomic medicine to identify and treat patients with life-altering conditions. Its efforts, including its internal research and development and ongoing sponsored research and licensing agreements with a well-respected pediatric academic medical center, give Medgenics the ability to focus on the underlying genetic pathway of pediatric diseases with the goal of finding therapeutic solutions for subpopulations of both children and adults living with rare and other difficult-to-treat diseases. For more information, visit the Company's website at www.medgenics.com.

 

 

About the NFC-1 GREAT trial

The NFC-1 GREAT trial was a 30 patient Phase 1b study in adolescents with ADHD and disruptions in the metabotropic glutamate receptor (mGluR) gene network. The objectives of the study were to evaluate the safety, tolerability, and pharmacokinetics of NFC-1 and to evaluate the effect of NFC-1 on ADHD during four weeks of continuous treatment following one week of placebo therapy. The study was conducted at Jefferson University Hospital in Philadelphia, PA.

 

Subjects were stratified by mGluR mutations. In addition to several exploratory measures, efficacy was assessed using the Clinical Global Impressions of Severity (CGI-S) and Improvement (CGI-I) scales, and the Vanderbilt Parent Assessment Score. Clinical improvement based on CGI-S, CGI-I scores and Vanderbilt scores was demonstrated in analyses of all patients. Mean declines in scores after four weeks of active treatment were as follows: CGI-S declined from 3.97 to 3.00 (p<0.001), CGI-I scores declined from 3.83 to 2.24 (P<0.001) and the Vanderbilt score declined from 29.1 to 22.5 (p<0.001). Improvement was greatest in the Tier-1/Tier-2 mGluR mutation positive patients (P<0.001). In this group 80% were deemed to be responders.

 

NFC-1 was well tolerated, with no treatment-related serious adverse events reported.

  

Forward-looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995, which include all statements other than statements of historical fact, including (without limitation) those regarding the Company's financial position, its development and business strategy, its product candidates and the plans and objectives of management for future operations. The Company intends that such forward-looking statements be subject to the safe harbors created by such laws. Forward-looking statements are sometimes identified by their use of the terms and phrases such as "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning, "expect," "believe," "will," "will likely," "should," "could," "would," "may" or the negative of such terms and other comparable terminology. All such forward-looking statements are based on current expectations and are subject to risks and uncertainties. Should any of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may differ materially from those included within these forward-looking statements. Accordingly, no undue reliance should be placed on these forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements contained in this release may not occur.

 

# # #

 

 

Contacts:

Medgenics, Inc.
John Leaman
john.leaman@medgenics.com

 

Brian Piper

Brian.piper@medgenics.com

Stern Investor Relations

Beth DelGiacco

212-362-1200

Beth@sternir.com

 

 

 

Exhibit 99.2

 

NFC - 1: Phase 2 Ready CNS Asset September 9 , 2015

Forward Looking Statement This presentation includes certain estimates and other forward - looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934 , as amended, including statements with respect to anticipated operating and financial performance, clinical results, potential partnerships, licensing opportunities and other statements of expectation . Words such as “ expects, ” “ anticipates, ” “ intends, ” “ plans, ” “ believes, ” “ assumes, ” “ seeks, ” “ estimates, ” “ should ” and variations of these words and similar expressions, are intended to identify these forward - looking statements . While we believe these statements are accurate, forward - looking statements are inherently uncertain and we cannot assure you that these expectations will occur and our actual results may be significantly different . These statements by the Company and its management are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance . Important factors that could cause actual results to differ from those in the forward - looking statements include the factors described in the Company ’ s filings with the U . S . Securities and Exchange Commission . The Company disclaims any obligation to update or revise any forward - looking statement based on the occurrence of future events, the receipt of new information, or otherwise . CONFIDENTIAL

Sections • Executive Summary • MDGN/CHOP Collaboration • neuroFix / NFC - 1 Acquisition • NFC - 1 Phase 1b Clinical Trial in ADHD • 22q11.2 Deletion Syndrome • Summary 3

Executive Summary 4 • Medgenics will acquire neuroFix – Provides access to a Phase 2 - ready program, NFC - 1 – P rivate company f ounded by Dr. Hakonarson, Director, Center for Applied Genomics (CAG ) at The Children’s Hospital of Philadelphia (CHOP) – Breakthrough discovery: mGluR mutations cause ~20% of ADHD • NFC - 1 – Strong efficacy signal in Phase 1 b study of mGluR + ADHD – MDGN will progress NFC - 1 to Phase 2 in: • mGluR+ pediatric ADHD • 22q11.2 Deletion Syndrome (large mGluR+ orphan population) • Additional mGluR+ neuropsychiatric disorders • Deal Terms – Low cash up - front payment ($2 million) – Success - based Development and Sales Milestones – Single digit royalties

Medgenics/CHOP Collaboration 5 • C ollaboration allows MDGN option to discoveries made by CAG: – Rare and Orphan diseases – Unique, druggable targets in high - need patients • Distinct, genetically identified participants allow for rapid clinical development including: – Comparatively small trials – Rapid proof - of - concept – Increased response rates and probability of success • NFC - 1 represents the first program of the collaboration

CAG/CHOP Capabilities 6 Datasets (Genomics EMR) ▪ Over 60K pediatric and 150K related adult patients GWAS genotyped with associated longitudinal EMR since 2006 Data Analytics ▪ End to end internal Next - Gen sequencing capabilities ▪ Integrated bioinformatics ▪ Rapid identification of novel genetic biomarkers Biobank (BB) ▪ Fully automated robotic biorepository Consented Patients • 85 % of the BB patients are consented for longitudinal follow up and are eligible for call back for future studies ▪ ~1.2M patient visits/year ▪ 10% of all R/O disease patients in N. America are treated at CHOP CAG’s pediatric biobank contains a high percentage of rare genetic variants ▪ Population is unique in that it represents the most severe forms of common diseases ▪ Global reach in many therapy areas In the last 8 years CAG has had over 400 peer reviewed publications focused on novel genetic discoveries H ighly scalable infrastructure to support translational research

Business Model Evolution: Gene Therapy to Genomic Medicine 7 Diverse Limited Medgenics capabilities Ex vivo Gene Therapy • TARGT EPO • TARGT GLP - 2 Time Genomic Medicine • C ommercial capabilities • Further pipeline diversification Genomic Drug Development • World - class biobank and analytics • G enetically defined pediatric biosamples MDGN growth and diversification enhanced by CAG collaboration TM

NFC - 1, a first - in - class Metabotopic Glutamate Receptor ( mGluR ) Neuromodulator 8

Elia, Glessner et al. Nature Genetic s, 2012 CAG Breakthrough Discovery 9 Research by Dr. Hakonarson indicated approximately 20% of ADHD patients have an underlying mGluR network mutations • 10 fold increased frequency of copy number variations (CNV ) in the mGluR gene network detected in ADHD population vs. normal controls • Dr. Hakonarson found these mutations in several related neuropsychiatric diseases

NFC - 1, first - in - class mGluR Neuromodulator 10 • Small molecule, non - stimulant agonist of multiple mGluRs : • 1, 3, 5, 7, 8 • Up - regulates GABA B receptors • Positive effects seen in animal models • Ameliorate cognitive impairment • Reduce hyperactivity • Enhance memory • Antipsychotic activity Dr . Hakonarson identified NFC - 1 as a drug with potential to address mGluR network disruptions caused by genetic mutations

NFC - 1, An Excellent Candidate for R epositioning 11 • Failed on efficacy measure • Excellent safety profile in >1,000 patients • No addiction potential • Excellent oral bioavailability and predictable PK – Twice - daily dosing NFC - 1 tested in a large scale clinical trial in Vascular Dementia patients not enriched for mGluR mutations

NFC - 1 GREAT Study: mGluR mutation positive adolescents with ADHD symptoms 12

NFC - 1 GREAT Study: Design and Execution • Part 1: Single Ascending Dose(SAD)/Pharmacokinetics(PK) – SAD 24 hour PK 50 - 800mg • Part 2 : Ascending Dose Trial – 1 week of placebo followed by 4 weeks active therapy – Dose escalated: 50mg BID* - 400mg BID* weekly (x4) – Efficacy endpoints CGI, Vanderbilt, exploratory – Single - blinded (to patients/families) To be presented at American Academy of Child and Adolescent Psychiatry (AACAP). October 26 - 31, San Antonio. 13 Two - part Phase 1B trial, n=30 Trial was completed Q3 2015 *Twice a day

GREAT Study Enrolled Complex, Severe Patients Inclusion Criteria • ADHD patients age 12 – 17 • mGluR network mutation positive ( mGluR +) Severe ADHD symptoms and high comorbidity • 73% had severe ADHD (CGI - S >5 at baseline) • 67% had co - morbid psychiatric conditions – Anxiety, ODD, Insomnia • 30% on antipsychotics and/or antidepressants • 70% had previous treatment with ADHD drugs 14

15 Strong Efficacy Signal in Key Endpoints – CGI - I 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 1 2 3 4 5 CGI - I: Proportion of Responders at E ach Week for All Subjects W eek W eek W eek W eek W eek Treatment effect appeared more robust over time and at higher doses CGI - I, Clinical Global Impression of Symptom Improvement Responder – Global rating of much or very much improved

16 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Week 1 Week 2 Week 3 Week 4 Week 5 Vanderbilt Scores: Proportion of Patients Improved from Pre - study Baseline for All Patients Improvement defined as 25% improvement in hyperactivity/inattention domains Strong Efficacy Signal in Key Endpoints – Vanderbilt Parent Rating Treatment effect appeared more robust over time and at higher doses

Statistically Significant Improvement in Key Endpoints 17 Week 1 Week 2 Week 3 Week 4 Week 5 Mean 29.1 26.4 24.0 23.3 22.5 Week 1 Week 2 Week 3 Week 4 Week 5 Mean 3.79 3.13 2.79 2.79 2.21 P < 0.001 P < 0.001 Average Vanderbilt score at each week – all patients Average CGI - I score at the end of each week – all patients Repeated Measures Analysis: mean scores by week CGI - I Scale: 1 - 7 Vanderbilt Scale (Questions 1 - 18): 0 - 54 Improvement magnitude comparable to best in class drugs in complex, severe patients

18 mGluR Network Mutation Classification: “Genetic Tiers” Tier 3 • 800+ Genes • 30% of ADHD Tier 2 • 279 Genes • 20% of ADHD Tier 1 • 79 Genes • 10% of ADHD Tier 1 Mutations in genes in mGluR receptors or that directly influence mGluR signaling. n=17 Tier 2 Mutations in genes that encode proteins that influence mGluR . n=7 Tier 3 Mutations in genes that encode for proteins that interact with Tier 1 and 2 genes. n=6 • G enetic tiers optimized for Tier 1 (not balanced) • Prevalence of ADHD estimated Genetic Tiers Defined by Proximity to mGluR Network

Core Mutations (Tier1/2) Predict Higher Response 19 0.00 0.20 0.40 0.60 0.80 1.00 Tier 1 Tier 2 Tier 3 CGI - I Proportion of Responders at Week 5 by Genetic Tier ( with 95% confidence intervals) Proportion of Responders (CGI - I) Note: genetic tiers were not balanced Note: Data is for the subset of patients who titrated to the highest dose (N=18)

20 Proportion of Responders (Vanderbilt) Note: genetic tiers were not balanced Note: Data is for the subset of patients who titrated to the highest dose (N=18) 0.00 0.20 0.40 0.60 0.80 1.00 Tier 1 Tier 2 Tier 3 Vanderbilt - Proportion of Responders at Week 5 by Genetic Tier ( with 95% confidence intervals) Core Mutations (Tier1/2) Predict Higher Response

NFC - 1 GREAT Study Summary • Strong efficacy signal detected in several validated ADHD scales • Improvement in multiple symptoms noted by caregivers – I nattention, hyperactivity, anxiety, mood disorders • Treatment effect more robust over time & higher doses • Genetic biomarker predictive of response to NFC - 1 (Tier 1 & 2) • Confirmation of PK profile – C omparable to previous PK study; BID dosing • W ell tolerated, no treatment related serious adverse events • 20 of the 30 patients chose to continue in a long - term safety trial – Study began August 2015 21

Efficacy & Safety Profile De - risk Pivotal Trials Phase 2/3 trial in Tier 1/2 mGluR + ADHD • Objective: Identify optimal dose and confirm enhanced response in mGluR network mutation positive patients – Primary endpoints: ADHD RS, CGI - I – Powered to serve as pivotal trial – Top - line data anticipated H216 • Additional study for approval: – Confirmatory Phase 3 trial in target population (ages 6 – 19) 22

ADHD Market Opportunity Overall US Market • 2015 Sales in excess of $10B* (> 60M total prescriptions**) • Approximately 6M pediatric patients • Stimulants dominate market with 90+% of total prescriptions NFC - 1 Opportunity • Genetic Biomarker identifies eligible patients (20 % of all ADHD) and response • Superior clinical profile in mGluR + ADHD patients – Not scheduled – No cardiovascular risk – Potential to address broad range of symptoms ( eg . a nxiety, conduct, mood) – Should lead to broad reimbursement coverage and premium pricing – Great clinical profile for Europe 23 *IBIS World.com **IMS, 2014

22q11.2 Deletion Syndrome (DS) Overview 24

Orphan Opportunity - 22q11.2 DS • 90% of 22q11.2DS patients have at least one mGluR network related deletion (RANBP1) 25 Micro deletion occurs in chromosome 22 Hypothesis: neuropsychiatric symptoms in 22q11.2DS patients are causally related to mGluR CNV/mutations and will respond to NFC - 1

26 Orphan Opportunity - 22q11.2 DS Physical Symptoms • Heart defects • Cleft palate • Gastrointestinal problems • Poor wound healing • Skeletal abnormalities Surgical / medical therapies mortality <4% after CV surgery (excluding critically ill infants) No effective therapy Approx. 40% progress to schizophrenia Psychiatric Symptoms* Prevalence estimates range from 1/2,000 to 1/4,000 *Jonas et al Biol Pyschiatry 2014;75:351 - 360

22q11.2 Patient in GREAT Study 27 T wo 22q11.2 p atients in the trial; one deletion and one duplication • Parents reported significant symptom improvement in both • M arked improvement in CGI - I and Vanderbilt • Both families elected to enroll in long - term safety trial to maintain access to NFC - 1

Orphan Pathway - 22q11.2 Deletion Syndrome • Phase 1/2 indication & dose finding study – File IND 4Q15 – Explore major neuropsychiatric disorders: ADHD, Anxiety, Mood – Initial data expected mid - 2016 – Transition to pivotal trial in one or more disorders – Rapid path to approval based on potential of Orphan Designation 28

Opportunity to work with the Leading 22q11.2 Center • “ 22q and You” Center at The Children’s Hospital of Philadelphia (CHOP) – World’s leading 22q11.2 Deletion Syndrome (DS) Center – Caring for > 1,300 children with a 22q11.2 deletion – Draws families from around the world – Staffed by geneticists, genetic counselors and physicians 29

Summary 30

NFC - 1 Summary • First program from the collaboration – Phase 2 ready program via neuroFix acquisition • P rogram in mGluR + ADHD is highly de - risked – Extensive safety database – Compelling Phase 1b efficacy signal in mGluR+ ADHD • Potential rapid path to approval in 22q11.2 DS – Potentially large orphan indication – Compelling genetic hypothesis and positive signal in one patient – Potential for rapid development path with single pivotal trial • Opportunity in additional mGluR+ CNS/psych diseases 31

Regulatory & IP Summary • Regulatory Exclusivity (approximately 7 years) – NFC - 1 has not been registered in the US – S hould receive New Chemical Entity status – 5 years Hatch - Waxman exclusivity – Additional 30 - month stay upon challenge – Potential for Orphan Indication in 22q11.2DS • IP Position – Multiple “ Test and Treat” patent applications pending – S upported by companion diagnostic tied to the therapeutic – Could allow for IP protection for 20+ years – Patent estate will continue to build over time 32

NFC - 1 Near - term Milestones 33 PROGRAM TIMING mGluR + ADHD GREAT Study Data presented at AACAP Oct 15 Request type “C” meeting with the FDA Q4 15 Initiate Phase 2/3 dose finding pivotal trial Q1 16 Initial data readout H2 16 22q11.2 Deletion Syndrome Submit IND for 22q11.2 DS Q4 15 Initiate exploratory study of psychiatric symptoms Q1 16 Initial data readout Mid 16

Appendix 34

Glossary of Terms 35 TERM DEFINITION CGI - S Clinical Global Impression – Severity. Clinician - rated assessment used to measure treatment effect. Used in all FDA regulated ADHD trials. CGI - I Clinical Global Impression – Improvement. Clinician - rated assessment used to measure treatment effect. Used in all FDA regulated ADHD trials. Vanderbilt Parent - rated assessment based upon frequency of occurrence of 47 different symptoms. (GREAT study used 18 questions, making it comparable to the ADHD RS). BRIEF Behavior Rating Inventory of Executive Function. Parent and child - rated assessment. 86 - item questionnaire that measures behaviors related to 8 clinical domains of executive function. PERMP Permanent Product Measure of Performance Math Pre - Test and Test. 5 page test consisting of 80 math problems per page. Subjects asked to complete as many math problems as possible in 10 minutes. Scoring based on problems completed plus problems completed correctly. ADHD RS ADHD Rating Scale - IV. Obtains parent ratings regarding the frequency of each ADHD symptom based on DSM - IV criteria. mGluR Metabotropic glutamate receptor. mGluR’s perform a variety of functions in the central and peripheral nervous systems involving learning, memory, anxiety, etc.

mGluR : Important Components of Brain Signaling Network 36 • Widespread distribution and function makes mGluRs attractive drug targets for neuropsychiatric disease • K ey neuronal signaling functions regulated by mGluRs : • Cognition • Memory • Attention • Learning • Activity • Behavior • mGluR modulators have been studied as therapies for autism, mood disorders anxiety and schizophrenia Ohashi et al Z . Naturforsch ., C, J. Biosci . 57 (3 - 4): 348 – 55 Dunayievich et al Neuropsychopharmacology 33 (7): 1603 – 10.

NFC - 1 GREAT Study Efficacy Measures and Results Efficacy Measure Result Comments CGI - S Strong positive signal • Clinician was blinded to genetic tier CGI - I Strong positive signal • Clinician was blinded to genetic tier Vanderbilt (Parent) Strong positive signal • Only used the first 18 questions for the assessment making this assessment comparable to the ADHD RS BRIEF (Parent) Positive signal* • All three domains trended positively BRIEF (Self) Weak positive signal* • Subjects often do not see themselves as impaired PERMP Inconclusive* • Multiple protocol violators and poorly administered Quotient ADHD Test Weak positive signal* • Signal in tier - 1 subjects at high dose, poorly administered Actigraphy Weak positive signal* • Reduced medium/high burst of activities on highest dose *Qualitative assessment of results 37

NFC - 1 GREAT Study Phase 1b Trial Design: Active Treatment Phase 38 Part 2 5 - week Daily Dosing Weekly Dose - Escalation Notes: - S tudy was single blinded (to patient/family) - Animal tox initially limited the max exposure to 200 mg BID initially (per FDA) - 18/30 patients were titrated to the highest dose 50mg BID Week 1 Week 2 Week 3 Week 4 Week 5 100mg BID Placebo 2 00mg BID 400mg BID Active Treatment Phase; Weekly Measures of Drug Levels Weekly ADHD Scales and Measures

2015 TARGT EPO Milestones 39 PROGRAM TIMING RENAL ANEMIA Complete enrollment in low dose MDGN - 201 cohort ✓ Initiate enrollment in mid dose MDGN - 201 cohort ✓ Initiate Phase 2 study in Peritoneal Dialysis (PD), including: ✓ - Renal Anemia Transplant patients - ESA Hypo - responsive patients Oral presentation at ESGCT Sep 15 HEMATOLOGICAL DISORDERS Initiate Phase 2 study in Myelodysplastic Syndrome (MDS) H2 15 Pre - IMPD meeting for Beta Thalassemia Intermedia ✓ PRECLINICAL Pre - IMPD meeting for GLP - 2 ✓ Lead program from CHOP collaboration ✓

Medgenics Vision 40 Driven by our commitment to patients we strive to create the premier rare and orphan disease company by : • Having unparalleled understanding of the underlying science of rare diseases from genotype to phenotype • Developing first - to - market or best - in - class therapies that are transformative to patients suffering from life - altering rare genetic diseases • Pushing the boundaries of medicine and technology to develop unique and better therapies • Working with patient s, families and advocacy groups to increase awareness and commitment to research and improve access to therapies