Wayra Technology Showcase 22 October 2013
About Us E n Xray Limited is a private UK company. Our scientists have successfully developed an innovative & patented method of generating low-energy X-rays (LEXRs) & demonstrated its ability to sterilize material at high speed. We offer superior sterilization solutions to the health care sector, initially focusing on OEM (1) medical device sterilization. We have attracted serious commercial interest from a number of OEM medical device manufacturers and already have several reference customers committed. Endorsements from large medical device cos & the Chartered Institute of Purchasing & Supply’s Health Technology Group. We are raising £3MM ($5MM) to: build our first industrial scale prototype; obtain regulatory approvals; build & deliver our first products into the market; and reach break-even by Year 3. (1) OEM: Original Equipment Manufacturers. 2
The Sterilization Market A large market with a clear entry point The global sterilization market totalled US$3.8 billion in 2011 (including equipment & consumables). Sterilization is performed in a variety of methods & in a number of diverse markets, including: Medical Devices; Pharmaceuticals; Hospitals; Agriculture; and Food & FMCG Packaging. Methods: Thermal, Chemical, Radiation & Filtration. High costs & environmental impact of existing methods create attractive market opportunities for new entrants, particularly in the OEM Medical Device sector. 3
Medical Device Sterilization Our technology initially addresses over 40% of the market OEM medical device sterilization represents a global market in excess of US$2 billion. The main sterilization methods for OEM medical devices include: 3% Ionizing Ethylene 36% Oxide (ETO) Radiation 43% 54% 5% 2% ETO Other (H2O2, Steam, etc) Gamma electron beam HEXR (high energy x-ray) E n Xray is first targeting products already sterilized with some form of ionizing radiation (Gamma, e-beam or HEXR), which represents 43% of the market today ($860 million). 4
Potential Markets for E n Xray Medical devices Contact lenses Pharma & Biotech (Replace 3rd party Gamma (Potential high volume (Terminal sterilization) e-beam & HEXR) market) Blood & other IV products Agricultural products FMCG Packaging (X-ray is used to sterilize (Licensing opportunity) (Licensing opportunity) blood) 5
Sterilization Logistics Existing methods are time consuming & costly Medical devices are shipped in large batches to 3 rd parties for Med Med Med sterilization. Dev Dev Dev Co 2 Co 3 Co 1 The process can take up to 2 weeks to complete. Products are returned to Receiving / the manufacturer before Shipping Bay being shipped to customers. Return Products to Customers Average annual cost is estimated to be in Sterilization excess of $200k per Process company , excluding inventory holding costs. 6
Problems with Existing Methods 3 rd Party Service Providers have no incentive to change Large, capital intensive systems comprise whole buildings, and require significant volume throughput to be economical. (see next slide) Pallet-load batch processing creates product recall risk. Except for the largest companies, sterilization is performed by external 3 rd party service companies, such as Steris, Sterigenics & Synergy Health. OEM Medical Device manufacturers retain regulatory responsibility for sterilizing their products, without controlling the process itself. 7
Traditional X-ray Sterilization Units Sterilization facilities Very large footprint occupy whole machines buildings (left) and require thick lead shielding (above) 8
Our Technology is Different Working with Cambridge Consultants, these are some initial concepts for the prototype device (2) to sterilize OEM medical devices, such as those pictured below, left. (2) Anticipated “footprint”: 2.5m x 1.5m. 9
Comparison of LEXR and HEXR Our technology delivers equivalent sterilizing energy 1000 X-axis shows 20 keV 5 keV energy of X-rays generated on a Grenz-ray region Log scale. -1 ] 2 g 100 E en / [ keV cm Y-axis indicates equal "dose efficacy" 8 keV the level of energy absorbed by the target in kGy (3) . 10 E n Xray is able to deliver the same Similar levels of amount of sterilizing energy sterilizing energy 1 absorbed by because of higher target. absorption rate of 1 10 100 1000 LEXR vs. HEXR. HEXR LEXR E [keV] (3) kGy: Kilogray is the unit of measurement of radiation dosage. 10
Our Initial Prototype Demonstrated ability to generate LEXRs Circular emitting head , 10 cm in Our scientists produced a lab-based diameter. prototype that generated LEXRs to sterilize through plastic and other materials. Gas-filled chamber The prototype (pictured right) was used in a randomized dosage trial to measure the levels required to achieve sterility of a bacterial spore test strip. The trial results were validated by an independent lab, WFC Analytics. 11
Independent Sterilization Trials LEXR delivers industry standard Log10 -6 Reduction An independently verified trial of our technology confirmed the efficiency of our 5.0 kGy LEXR sterilization capabilities. Irradiation target: Bacterial spore strips, B. atrophaeus , (a 1.8 kGy safe equivalent of anthrax), supplied by Raven Biological Laboratories. The results: 2.7 kGy Log10 -6 reduction (less than 1 spore per 1 million survived) observed for irradiation doses as low as 1.8 kGy, a 2.4 kGy dose that typically results in a 1 Log reduction by other irradiation methods. Gamma irradiation requires ~20 kGy to achieve Log10 -6 reduction. 6.5 kGy 12
Our USPs LEXR is ideal for sterilizing most medical grade polymers & metal surfaces using HIGH powered yet LOW energy X-rays. LEXRs penetrate up to 10cm in open air & several cm of plastic, reducing the need for expensive shielding, so the safety profile will allow for easy operation at customer facilities. High local absorption rates enable high dosage / throughput rates. The equipment will be a compact design to sterilize on site, eliminating time-consuming & costly logistics. Very affordable compared to existing technologies, with significant indirect cost savings (inventory holding cost). Individual product sterilization & labelling will provide greater traceability, reducing the likelihood of broad product recalls. 13
IP Position & Strategy E n Xray has recently filed its core patent on the method of generating LEXRs at an industrial scale, and will file additional patents, as appropriate. This patent gives us a strong position relative to other companies seeking to generate LEXRs for a wide range of industrial applications. We will maintain certain IP as know-how or trade secrets, and will retain ownership of our technology via an equipment lease model. Our ability to monitor other parties seeking to apply LEXR in the medical field can be managed by tracking changes to OEM’s sterilization methods. 14
Regulatory Strategy The regulatory pathway Is clear Regulatory approval of LEXR is expected to be via CE mark in Europe and a 510k application in the US. ISO 11137 governs sterilization of medical devices using ionizing radiation, and is dependent upon the kGy dosage delivered, rather than the source of the radiation. Data for regulatory approval will be generated quickly, as no clinical trials involving patients will be required. Initial talks with regulators have all be very encouraging. Prof. Alan Tallentire is the founder of our SAB. 15
Competitive Landscape Large incumbent players will find it difficult to respond 3 rd party sterilization companies (i.e. Steris, Sterigenics or Synergy Health) have business models built around maintaining existing facilities at high throughput rates. Their pricing models are based upon large volumes, hence small orders are uneconomic to process. E n Xray’s product offering will initially provide a low cost alternative for smaller “rush orders” which existing service providers cannot easily accommodate. OEM’s QA & RA managers are attracted by the concept of having direct control of their own sterilization processes. 16
Commercialization Strategy Market entry strategy designed for rapid market adoption E n Xray will lease its technology to OEM medical device companies on a 5 year term with an annual minimum + per unit sterilization charges, removing cap-ex decisions. Initial target customers will be those currently sterilizing products with Gamma & other forms of ionizing radiation. Over time, we plan to develop our technology to treat products currently sterilized with Ethylene Oxide, and may be able to develop applications for terminal sterilization of pharmaceuticals & biotechnology products. Maintaining ownership of our technology by leasing it to customers, combined with our patents & know-how, will help create barriers to entry for OEM on site sterilization. 17
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