North American Neuromodulation Society Meeting 2012 Harnessing the Inflammatory Reflex: Using Neuromodulation as a Novel Approach to Treat Chronic Inflammatory Diseases R Zitnik, Y Levine, M Faltys, T Arnold SetPoint Medical Corporation, Valencia, California 112/7/12

North American Neuromodulation Society Meeting 2012 Rheumatoid Arthritis Inflammatory Bowel Disease: Crohn’s and Ulcerative Colitis Psoriasis, Ankylosing Spondylitis, Psoriatic Arthritis, Lupus Inflammatory Disorders Have Significant Morbidity and Mortality- Medical Need Remains High Common disorders- up to 2% of population Affects young and middle aged adults Severe, “life-impacting” symptoms Systemic inflammation associated with highly elevated cardiovascular mortality risk 212/7/12

North American Neuromodulation Society Meeting 2012 Current Drugs and Biologics are an Important Advance- Yet Have Major Drawbacks Lack of efficacy in 1/3 (RA) to 2/3 (Crohn’s) Rare but serious safety issues: Infection, TB, CHF, cancer risk, MS, PML, hypercholesterolemia $30 billion in annual sales with per patient cost of $25-35K/year 312/7/12 Goal is to improve the treatment of these diseases using neuromodulation

North American Neuromodulation Society Meeting 2012 CNS Regulates the Immune System via the “Inflammatory Reflex” Afferent vagus and CNS sense inflammatory mediators (should this read: CNS senses inflammation via the afferent vagus) Efferent vagus signals resident T cells and macrophages in the spleen and GI tract Pro-inflammatory cytokine production reduced Circulating immune cells traversing the spleen are altered: Reduced capacity to express inflammatory mediators and adhesion molecules as cells move into diseased tissue 412/7/12 Tracey, Cell 2012 Rosas-Ballina, Science 2011 In inflammatory diseases, activity of pathway is decreased

North American Neuromodulation Society Meeting 2012 Stimulating this Reflex Using Neuromodulation will Reduce Inflammation and Improve Clinical Disease Andersson U, Tracey K. Ann Rev Immunol 2012; 30:313 Rheumatoid Arthritis Inflammatory Bowel Disease 512/7/12

North American Neuromodulation Society Meeting 2012 VNS Lead for Rodent Inflammation Models 612/7/12

North American Neuromodulation Society Meeting 2012 Bolder BioPATH, Inc. n=4/Normal Controls n=12/disease control n=9/ stimulation group *p≤0.05 t-test to Disease Controls Joint Swelling Was Reduced in Standard Collagen- Induced Arthritis Model 712/7/12

North American Neuromodulation Society Meeting 2012 Bolder BioPATH, Inc. n=12/disease control n=9/ stimulation group *p≤0.05 t-test to Disease Controls * * * * Importantly, Structural Damage to the Joint was Also Reduced 812/7/12

North American Neuromodulation Society Meeting 2012 Clinical Study of Neuromodulation in Rheumatoid Arthritis “Methotrexate Failure” Population Active RA despite treatment with first line agent methotrexate Patients would otherwise have been candidates for a TNF antagonist Standard RA clinical endpoints: DAS28 (Tender and Swollen Joint score, CRP, Patient VAS) ACR 20/50/70 Response Rate EULAR Response and Remission Rate Commercially purchased VNS devices were used for the study 912/7/12

North American Neuromodulation Society Meeting 2012 Individual Patient DAS Scores Show Rapid and Marked Improvement in 6 of the 8 Subjects 1012/7/12 EULAR Remission

North American Neuromodulation Society Meeting 2012 Clinical Response Rates are Comparable to Those Seen with Biologics 1112/7/121112/7/12

North American Neuromodulation Society Meeting 2012 Future Studies Will Utilize SetPoint’s Proprietary Neuromodulation Platform MicroRegulator Pod Patient ChargerPrescription Pad Surgical Implant 1212/7/12

North American Neuromodulation Society Meeting 2012 Summary and Conclusions Inflammatory diseases are a $30B market with significant unmet need Using neuromodulation to drive the inflammatory reflex has a sound biological foundation: Use in clinic is supported by strong preclinical evidence This is the first demonstration that an implantable neuromodulation device improves clinical manifestations of RA: Significant and clinically meaningful improvement in signs and symptoms Response rates were comparable to those with current biologic agents Further larger controlled studies in RA and other chronic inflammatory diseases are warranted. Our microregulator offers significant advantages over current vagal nerve stimulation devices SetPoint intends to offer a novel therapy that will significantly increases patient QOL, while bending per-patient cost curves down by more than 60% 1312/7/12