Orthocell : OrthoATI Tendon Clinical Study Success

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OrthoATI™ tendon clinical study success

• Study results show that OrthoATI™ is significantly more effective than steroid injection for treatment of rotator cuff tendinopathy with intrasubstance tendon tear
• 95% of participants at 12 months post OrthoATI™ treatment reported a level of function of the treated shoulder consistent with a successful outcome after having received an average of 4 failed conservative treatments including physiotherapy and steroid injections
• OrthoATI™ patients experienced almost complete resolution of pain by month 1 post-treatmentwhich was sustained over the assessment period
• Participants receiving a steroid injection had no meaningful improvement in function, and only a transient improvement in pain at month 3 before returning to pre-treatmentlevels
• 64% of steroid participants withdrew early from the study due to treatment failure. Of these early withdrawals, 86% requested and received OrthoATI™ treatment due to ongoing pain and loss of shoulder function
• There are currently no proven long-termnon-surgical solutions to treat chronic shoulder tendon injuries
• OrthoATI™ is well positioned to become the first FDA-approved injectable cell therapy in orthopaedics for the treatment of chronic tendon injuries.

Perth, Australia; 08 December 2021: Regenerative medicine company Orthocell Limited (ASX:OCC, "Orthocell" or the "Company") is pleased to announce statistically significant results from its randomised, multicentre, controlled rotator cuff tendon clinical study ('RC Study'). The data confirmed that the study achieved its goals, demonstrating that OrthoATI™ is a safe and effective treatment for patients suffering from rotator cuff tendinopathy with intrasubstance tendon tear compared directly to the standard of care (steroid injections).

In light of these results, the Company is accelerating its US commercialisation plans with technology transfer, FDA engagement and commercial preparation activities for a randomized controlled study under FDA supervision.

Orthocell Managing Director, Paul Anderson, said: "We are absolutely delighted with the study results for this challenging and debilitating condition which clearly demonstrates that OrthoATI™ is more effective than steroid injection for treatment of rotator cuff tendinopathy with intrasubstance tendon tear. This is an important development milestone for OrthoATI™ and the Company.

We are now in a very strong position to progress our US commercialisation strategy to deliver the first injectable cell therapy in orthopaedics that truly addresses the cause of degeneration and returns patients to full use of their chronically damaged tendons."

Rotator cuff tears lead to considerable pain and disability, and conservative treatment options, (such as steroid injections and pain medications which may provide short-term pain relief), do not address the chronic underlying pathology of tendon degeneration. Patients with an intrasubstance tendon tear cannot be surgically repaired if conservative treatment fails. OrthoATI™ represents a potential breakthrough treatment option to resolve pain and return functional mobility for this debilitating condition. Watch videohere.

RC Study participants suffered from pain and loss of shoulder function for almost 2 years (average of 23.5 months in the RC Study) and received an average of 4 failed treatments (including physiotherapy, corticosteroid or Platelet Rich Plasma or 'PRP' injections), prior to enrolment in the study. Following treatment,

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assessment of pain and shoulder function showed that the OrthoATI™ group had significantly better results compared to the steroid group at all post-treatment time points. See attached presentation for further detail on the RC Study and the statistically significant resultshere.

Leading Australian orthopaedic surgeon and clinical trial lead, clinical professor Allan Wang of UWA, commented: "The rotator cuff trial results are very encouraging. OrthoATI™ consistently improved pain and shoulder function in patients suffering chronic shoulder symptoms from rotator cuff tendinopathy and tear. Patients are pleased to have a nonsurgical treatment option available, with reduced recovery times before returning to their work and recreational activity."

Summary of results

• The RC Study demonstrated that OrthoATI™ is significantly more effective than a steroid injection for treatment of rotator cuff tendinopathy with intrasubstance tendon tear.
• Patients in the OrthoATI™ group experienced almost complete resolution of pain by month 1 post- treatment (VAS score less than 3), while patients in the steroid group experienced a transient improvement in pain, which peaked at month 3 then returned to pre-treatment levels;
• The OrthoATI™ group experienced significant improvement in shoulder function between 6 and 12 months post-treatment. The steroid group experienced no meaningful improvement in shoulder function at any time point;
• The mean ASES scores were significantly better in the OrthoATI™ group compared to the steroid group at all post treatment time points: month 1 (p=0.006), month 3 (p=0.026), month 6 (p=0.012) and month 12 (p=<0.001);
• None of the participants in the OrthoATI™ group withdrew from the study due to treatment failure, but 64% (7 of 11) of steroid participants withdrew before month 12 due to steroid treatment failure; 6 of 7 (86%) of those participants requested and received OrthoATI™ treatment after withdrawing from the study;
• Both study treatments were well tolerated, and no safety concerns for OrthoATI™ were identified;

Clinical trial patient, Paul Speering commented: "The steroid treatment didn't work and since the OrthoATI™ treatment, as a drug free and fully drug tested athlete, I have become both a Masters National Powerlifting Champion and the Oceanias Masters Powerlifting Champion, and hold all four State Records in my age and weight category. I was so fortunate to be involved in this study, and I wish that more people would be able to take advantage of the treatment. It truly has been life changing for me."

US addressable market

Initial market sizing undertaken by Orthocell suggests that Ortho-ATI® could be applicable to >480,000 rotator cuff patients per year in the US alone, which equates to a market opportunity of approximately US$4-5 billion1. Ongoing work by Orthocell aims to also assess the savings to the health system that may be delivered by OrthoATI® when accounting for more effective pain relief and return of function, return to work and avoidance of surgical costs. Ortho-ATI® can be used in both pre-surgical and post-surgical applications, not only in treating rotator cuff injuries, but many other tendon injuries and is at the forefront of a significant and increasing market opportunity.

Next Steps

The Orthocell team was responsible for the initial development of a similar cell therapy product for the regeneration of cartilage (known as MACI) which is now being commercialised by US company Vericel, which

1 Internal Orthocell modelling based on published epidemiology data and assuming target pricing for a subset of the rotator cuff injury segment.

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generates more than $120 million in sales for one target joint in the body and has a market capitalisation of approximately $2 billion.

Orthocell is in a strong position to advance its US commercialisation strategy to deliver the first injectable cell therapy in orthopaedics for the treatment of chronic tendon injuries.2 The results of this study demonstrate that OrthoATI™ is more effective than steroid injections for treatment of rotator cuff tendinopathy with intrasubstance tendon tear. As a consequence, the Company is now accelerating its US plans with technology transfer, FDA engagement and commercial preparation activities underway to prepare OrthoATI™ for a randomized controlled study under FDA supervision. A number of key US based consultants have joined the team including:

• Matt Kemp - former head of commercialisation for cell therapy company Dendreon who has unique experience in positioning and marketing biologic drugs in orthopedics with Biomet and Allergan;
• Brandon Miller - a co-founder of Rebellion solutions and senior marketing and sales executive with Biomet;
• Dr Lara Silverman - an expert in autologous cell therapies who until recently led the FDA regulated clinical development and manufacturing activities for a spinal disc regeneration product with Discgenics; and
• Leslie Wise - a director of Orthocell and specialist in reimbursement and market entry strategy development and execution with Biomet, Angiodynamics and BMS.

Clinical trial investigators

The RC study has been led by Clinical Professor Allan Wang (former President of the Australian Elbow and Shoulder Society), Dr Jeff Hughes (current President of the Australian Elbow and Shoulder Society), Dr Jane Fitzpatrick, and Professor Ming Hao Zheng (University of Western Australia and co-founder of Orthocell).

Detailed study description

The RC Study was a randomized, multicenter, open-label study designed to assess OrthoATI™, in comparison to steroids (standard of care), as an emerging treatment for patients with rotator cuff tendinopathy with intrasubstance tendon tear. A total of 30 participants verified by MRI with symptom duration >6 months, and who had previously received physiotherapy AND one or more corticosteroid injections were treated. Participants were randomized to receive an ultrasound guided injection of tendon derived cells that had been cultured from a sample drawn from each patient (OrthoATI™; 19 patients), or an ultrasound guided injection into the subacromial space of Celestone Chronodose (steroid; 11 patients). The characteristics of both groups were comparable with respect to age, gender, mean duration and severity of symptoms. Participants had received an average 4 failed prior treatments (including physiotherapy, steroid injection or PRP injection) and had experienced pain and loss of function on average of 23.5 months prior to study participation.

Assessment results

Assessments of shoulder function, pain, quality of life, and tendon structure were performed using validated outcome measures before treatment, and for up to 12 months post-treatment.

2 A thorough search, conducted by the Company, of published literature and key international (US, EU & UK, AU & WHO) clinical trial registries confirmed there are no completed unpublished or published RCT's assessing the effectiveness of an autologous cell therapy for the treatment of chronic tendon injuries in the shoulder.

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Visual Analogue Scale Pain Assessment

The Visual Analogue Scale (VAS) pain score rates pain from 0 (no pain) to 10 (worst pain). Participants were asked to rate their pain at its worst, at rest, lifting a heavy object, performing a repetitive task, and at night. An overall pain score for each participant visit was calculated by taking the mean of reported scores for individual ratings. A change in VAS pain score of 1.4 points (from pre-treatment score) represents the smallest change in score that patients would perceive as a meaningful improvement. A VAS pain score of 3 or less is considered by patients as a "successful outcome".

OrthoATI™ participant group

Patients receiving OrthoATI™ experienced significant and sustained reduction in pain after treatment.

• Patients experienced meaningful improvement in pain as early as 1-monthpost-treatment;
• The average VAS pain score reduced 3.2 points, from 4.8 pre-treatment to 1.6 at 12 months post- treatment (Figure 1). The reduction in VAS pain score was continuous and sustained over the assessment period; and
• At 6 months post-treatment, 67% (12 of 18) of participants reported a VAS pain score of 3 or less ("successful outcome"), improving to 84% (16 of 19) of participants at 12 months post-treatment.

Corticosteroid participant group

Patients receiving Corticosteroid experienced a transient improvement in pain which was not sustained, peaking at 3 months then returning to pain levels experienced pre-treatment.

• The average VAS pain score reduced 0.9 points from 5.2 pre-treatment to 4.3 at 12 months post- treatment (Figure 1). The average VAS pain score improved to 2.8 at month 3, but worsened to 4.2 by 6 months post-treatment;
• The mean improvement in VAS pain score from pre-treatment to 6 months (1.0) was below the threshold for meaningful improvement; and
• Only 27% (3 of 11) of participants achieved a VAS pain score of 3 or less ("successful outcome") 6 months post-treatment.

Figure 1 - Visual Analogue Scale Pain Assessment (VAS Pain)

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VAS pain score

10			*p=0.002
9			**p=0.047
8
		¥p=0.010
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*		¥¥p<0.001
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¥	¥¥
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	**	ATI
4
3			CS
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1
0
Baseline	Month 1 Month 3 Month 6 Month 12

Mean overall VAS pain score at baseline (pre-treatment) and at 1,3, 6 and 12 months post-treatment with ATI or CS.

Dashed line indicates that there was a significant dropout in the CS group at month 6, with only 4 patients remaining by month 12

*/¥ - statistically significant

differences between treatment groups

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Assessment of Shoulder Disability and Function

The American Shoulder and Elbow Surgeons Shoulder Assessment (ASES) score is a standardized method for assessing outcomes of shoulder and elbow surgery. It comprises assessments of pain and function with a combined ASES/Shoulder Function score ranging from 0-100, with a higher score indicating better outcomes. A change in ASES score of 12 points (from pre-treatment score) represents the smallest change in score that patients would perceive as a meaningful improvement. An ASES score of 78.6 or more is considered by patients as a "successful outcome".

OrthoATI™ participant group

Patients receiving OrthoATI™ experienced a significant and sustained improvement in pain and return of shoulder function after treatment.

• The average ASES score improved 19.1 points from 74.2 pre-treatment to 93.3 at 12 months post- treatment (Figure 2). The improvement in ASES score was continuous and sustained over the assessment period;
• The mean improvement in ASES score pre-treatment to 6 (14.4) and 12 (19.1) months post-treatment was greater than the smallest change (12) that would be considered as a meaningful improvement; and
• At 6 months post-treatment, 72% (13 of 18) of participants reported an ASES score of 78.6 or better (successful outcome), improving to 95% (18 of 19) of participants at 12 months post-treatment, i.e achieved a level of shoulder function consistent with a successful outcome

Corticosteroid participant group

Patients receiving Corticosteroid did not experience a significant or sustained improvement in pain and shoulder function after treatment.

• The average ASES score improved 0.3 points from 62.6 pre-treatment to 62.9 at 12 months post- treatment (Figure 2);
• The mean ASES score remained essentially unchanged from 62.6 pre-treatment to 63.6 at 1 month post-treatment, increasing at 3 months post-treatment to 74.8 and then declining at 6 months post- treatment to 74.0 (Figure 2);
• The mean change in ASES score was too low to be considered a meaningful improvement;
• There was not enough data to accurately assess change from pre-treatment to 12 months post treatment because 7 of 11 (64%) participants withdrew from the study prior to month 12. Reason for withdrawal was due to worsening symptoms or lack of improvement. The remaining 4 (of 11) participants who completed month 12 recorded an average ASES score of 62.9, also below the threshold considered to be successful outcome; and
• 6 of 7 (86%) participants who withdrew from the study requested and received OrthoATI™ treatment after withdrawing from the study.

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