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Investor FAQ

DIABETES

What is diabetes? Diabetes is the inability to process ingested sugars, leading to excess sugar in the blood. The ability of the body to process sugar is regulated by insulin.

What is type 2 diabetes? There are two types of diabetes. Type 1 diabetes or childhood-onset diabetes is an autoimmune disease in which the individual cannot produce insulin (5-10% of diabetics). Type 1 diabetics must take insulin. Type 2 diabetes is often called ‘adult-onset’ or ‘lifestyle’ diabetes (90-95% of diabetics). The body loses the ability to use insulin properly, often as a result of poor diet and exercise habits. Most people with type 2 diabetes do not take insulin shots – their condition is controlled through a combination of medication, diet and exercise.

Why is type 2 diabetes a problem? Type 2 diabetes often leads to serious complications: kidney failure, blindness, and heart disease, among others. These complications cause misery for millions and exact a huge cost to society.

What causes diabetes complications, and how can complications be avoided or lessened? Excess sugar (glucose) in the blood binds to proteins in the blood and damages them. This is called glycation – we talk about glycated proteins. Glycated (damaged) proteins are a significant cause of damage to the kidneys, the retina, and the heart, and are also a means to measure the risk of present and future complications. Complications can be minimized by monitoring glycation in the blood and by taking steps to reduce excess sugar levels, which may include diet, exercise, medication, and, sometimes, insulin.

Don’t all diabetics take insulin? 75% of type 2 diabetics (9 million of the 12 million diagnosed type 2 diabetics in the United States) do not take insulin. They are treated with a combination of diet, exercise and non-insulin medications. They do not need to do multiple daily blood glucose tests in order to regulate their insulin, although at present almost all are advised to do blood glucose testing as a way to monitor their condition.

DIABETES MONITORING

How is glycation monitored now? Doctors now use two methods to control glycation: Diabetics test themselves for blood glucose daily or several times a day. This does NOT test glycation, but gives an instant snapshot of whether there is excess sugar AT THAT MOMENT. Theory: if sugar is under immediate control, then chances of long-term risk are lower. Drawbacks: doesn’t actually measure glycation, testing is painful, expensive, and difficult to maintain consistently.

Doctors test diabetics for levels of glycated hemoglobin, the protein in red blood cells – the “HbA1c” test. This test can only be done every 3 months. This test looks “backward” over the time period and says whether the diabetic has been successful in controlling their risk. If HbA1c levels are high, the damage has already been done.

How should glycation be monitored? According to the Epinex survey of endocrinologists, it would be much better to monitor glycation on a shorter cycle, every month. This would provide better feedback to the doctor and the patient and give them the opportunity to control and modify treatment before long-term risk increases. The Epinex G1A™ test, which measures a different protein in the blood (albumin), provides that monthly glycation report (which HbA1c cannot do).

Wasn’t there a home test in the 1990s that was supposed to provide a measurement of intermediate glycation? Why was the test unsuccessful? There was a test in the 1990s (the fructosamine test) that measured intermediate glycation. However, the test had a number of inherent problems. Primarily, there is no actual molecule “fructosamine;” it is a name for a series of products formed when serum proteins are glycated by excess sugar. The test was initially developed because it was inexpensive and easy to automate. However, since it measures a variable and constantly shifting set of serum proteins, the results were unstable and difficult to interpret or use for an index.

Why will the Epinex G1A™ test be better than HbA1c for diagnosis of diabetes or pre-diabetes? HbA1c is not considered suitable as a diagnostic test because it does not always accurately reflect the actual state of blood sugar metabolism. The moving average of hemoglobin glycation is too slow and is subject to various interferences. The Epinex G1A™ test measures glycated albumin in combination with a measurement of total albumin. This creates an index which inherently corrects for physiological conditions that may affect albumin levels. It also directly measures the glycated protein that is responsible for many complications.

Does the G1A™ test also serve as an indicator of the morbidities associated with diabetes? Recent research has established a correlation between glycated albumin levels and cardiovascular risk. The Company believes that future clinical trials will provide the Company with evidence to support the correlation between glycated albumin levels and other morbidities associated with diabetes such as diabetic neuropathy and renal (kidney) failure.

THE MARKET

The diagnostics market for diabetes is crowded. There are currently two diabetes-monitoring methods: 1) blood glucose monitoring and 2) the glycated hemoglobin test (“HbA1c”). The diagnostic market for diabetes is crowded primarily for “glucose monitoring” diagnostic devices. The G1A™ test is not a glucose-monitoring device. The G1A™ rapid test measures glycation on a monthly basis by measuring glycated albumin.

What is the expectation for FDA Approval for the G1A™ test? The G1A™ test is a “Class 2” Device, with the potential to be approved under 510(k) regulations. The approval process is expected to be 90 days post filing. The Company believes this opinion will be supported based on existing predicate devices such as 1) the fructosamine test approved for OTC and professional use in the mid-1990s, 2) the Metrika OTC HbA1c test and 3) the affinity chromatography test for glycated albumin currently performed in clinical laboratories.

Could there be competition from a future home test for HbA1c that would be similar to the Epinex G1A™ test? Any HbA1c test, no matter how convenient or where it is given, will always be subject to the same inherent limitation of the test: it cannot provide meaningful results about glycation over a period of less than 3 months – too long for an effective plan for treatment and therapeutic intervention, no matter how often it may be administered. A home HbA1c test cannot compete directly against our test – it cannot do what the G1A™ test does.

How do patients benefit? Endocrinologists have indicated that they would recommend reducing the frequency of daily blood glucose testing in conjunction with our monthly test. This would reduce the discomfort of frequent blood testing and would encourage patients to be more compliant with their treatment program. Most important, it would SAVE patients a substantial amount of money every month.

How do investors benefit? Adoption of the monthly Epinex G1A™ test would result in savings of billions of dollars through reduced daily blood glucose testing. These savings would drive insurers and other payers to support adoption of our test, thus increasing company revenues and investor returns.

Why does the G1A™ test represent a good investment? The potential market for the test is extremely large: 15-20 million type 2 diabetics in the United States, over 200 million worldwide. The Company believes that the test will be applicable not only for monitoring existing patients, but for routine screening as well in clinics, workplaces and emergency rooms. The G1A™ test has the potential to become the diagnostic test for diabetes.

Does the Company have any other diagnostic products in its pipeline? The Company has undertaken initial stages of market identification and technical development for rapid testing of (i) Rheumatoid Arthritis (ii) Advanced Glycation Endproducts (iii) Down syndrome (iv) Neo-natal HIV test.