Orchestra BioMed Holdings, Inc. Ordinary Shares Wells Fargo 21st Annual Healthcare Conference

Good afternoon, everyone. It is my pleasure to introduce today David Hochman, Chairman and CEO of Orchestra BioMed, a biomedical innovation company accelerating high-impact technologies to patients through risk/reward sharing partnerships with leading medical device companies. With that, David, I hand the stage over to you.

Appreciate it. I will go over here. It is great to be here and to have the opportunity to present at the Wells Fargo conference and close out the event. Orchestra BioMed is, as Brian said, a company that is advancing high-impact medical innovations through partnerships. Today I really want to talk about, assuming I can advance our slides. There we go. I want to really talk about three things. Our business model, which is partnership driven, which we think is novel and capital efficient in the medtech space. Our two pivotal stage programs that address high impact unmet needs in two of the largest, most established medical device markets. Significantly, the backing we have from strategic partners and strategic investors that has us in a great position as we look at major catalysts coming forward.

Near-term catalysts funded through 2027, really in a position to drive value. The business model, I just want to explain briefly. What we do at Orchestra is focus on being great at innovation in terms of IP and products and clinical execution, and then structuring win-win risk/reward partnerships with strategics that we think are in a much better position to commercialize those technologies into large global markets. We look to those strategics to participate through commercialization, through their outstanding global relationships, and then to leverage their significant established operations and their strong balance sheets. What we do is drive proof through data, and you will see the two trials we are running and the proof we can bring to enable regulatory approval, and secure value through royalty participation. What our partners get are growth programs that are insulated from the P&L burden of R&D as well as the operational burden of R&D.

We have some outstanding partners and two really exciting pivotal stage programs that have common themes that really reflect how we see the world and what our opportunity and model can drive. First and foremost, the two programs, AVIM therapy, which is a potent way of treating hypertension delivered through a pacemaker, and Virtue SAB, have three common themes. One, they target unmet needs and opportunities in two of the largest established markets in cardiovascular medicine. On the AVIM side, we are layering on top of the $4 billion pacemaker market, but looking at the number one comorbidity and unmet need, which is treatment of hypertension. For Virtue, we are looking at bringing a better treatment for coronary artery disease to a $7.5 billion established market. In both cases, you will see that we are bringing powerful new capabilities, but building those on top of proven technologies.

In AVIM, it's a therapy entirely delivered by a pacemaker. Virtue takes a proven drug, sirolimus, and makes a much more powerful delivery through angioplasty. Our Medtronic partnership and our last component is that these lend themselves to our partnership model where there is shared upside and better collaborative execution through partnership. I will talk about our relationship with Medtronic, which opens up a huge opportunity. We think an over $500 million annual royalty opportunity for us and very significant growth and profit potential for them. We have a relationship with Terumo, a little more traditional right of first refusal relationship for our lead application in coronary, which gives us optionality. We've seen a lot of capital into the company from those partners. Medtronic's invested or paid us more than $80 million.

We brought in a great strategic capital investor in Ligand last year that's contributed $40 million and also has a revenue interest in our royalties. Terumo's also invested or paid us $65 million. In total, 21% of the company is owned by strategics, and we have two great long-term fundamental healthcare shareholders in RTW and Perceptive. I am going to dive into the AVIM therapy program, which is importantly our most advanced program. We're going to wrap up enrollment of our pivotal trial before the end of this quarter and see data in the second quarter of next year. What is AVIM therapy? AVIM stands for Atrioventricular Interval Modulation therapy. It is a potent treatment for high blood pressure that works immediately. It has a substantial effect and a sustained effect through two well-understood and complementary mechanisms.

We lower blood pressure immediately by pacing the heart with a very short atrial and ventricular timing in terms of the contractions. This reduces the filling window of the ventricle and immediately reduces cardiac preload. Blood pressure drops. The body's going to react to that. Key to our IP and mechanism is a second part, which allows for a sustained effect where we're changing the AV interval or modulating it so that that reflex response doesn't happen. By that, we're also affecting cardiac afterload and sympathetic tone. Importantly, those three targets, preload, afterload, and sympathetic tone, are what we target with pharmaceuticals to treat hypertension. Patients receiving this don't need, at least in the first indication where we're treating hypertension in pacemaker patients, they don't need a new procedure. It's the same device. The therapy can be programmed the same way those devices are programmed, and it's running in the background, really overcoming the biggest challenge we see with treatment of hypertension, which is compliance, and here it's patients don't need to do anything for AVIM therapy to benefit them.

Hypertension is the number one modifiable risk factor for death and disease worldwide. It affects 1.4 billion patients, and I really want to highlight the fact that if you can bring systolic blood pressure down by 10 millimeters of mercury, that can have profound effects on relative risk of heart attack, stroke, progression to heart failure, progression of atherosclerotic coronary disease, and kidney disease. When we look at our launch population, which is the pacemaker population, this is a high-need population where over 1 million patients every year are getting a pacemaker that also have hypertension. It's the number one comorbidity.

And let's keep in mind that pacemaker patients are older, between 65 and 85 generally. They have known comorbidities and are at higher risk. Given that as our launch population, it is really important, given the model, that Medtronic, who is the dominant global leader in cardiac pacing therapy, will be the commercial engine for this therapy under a partnership that we put in place in 2022. What we brought to the table was the technology and intellectual property. We have nearly 150 issued patents on AVIM therapy, including a large body, around 125, on hypertension and nearly 25 related to heart failure. We ran two prior studies. I'll summarize some of the key data from MODERATO II, which was our double-blind randomized pilot study, and we are the sponsor and are funding the pivotal trial, the BACKBEAT study, which I'll also describe.

We get uncapped significant royalties on future sales of AVIM-enabled devices. I'll walk through those economics. What we have in Medtronic is the global leader. Medtronic, in our estimation, controls half the global market, more than that in the U.S. They have exclusive rights to the launch market, which is a treatment of hypertension in the pacemaker population. They're incorporating our therapy as firmware in their next-generation transvenous pacemaker and in future generation dual-chamber leadless pacemakers. And they will be responsible for regulatory submissions, manufacturing, marketing, sales, and support. So our role really shifts significantly upon success of the trial. The market opportunity for this therapy in the launch market is quite significant. The pacemaker market is one of the most established markets there is in medical device. Been around for seven decades and was essentially the core business around which Medtronic was built.

That market has been commoditized, but it still is a $4 billion global market, seeing about 1.4 million implants every year. Upwards of 1 million of those patients have hypertension. As I said, the number one comorbidity. We see opportunities to help Medtronic grow their top line, their bottom line, and their market share, one, by enabling differentiation and clinical impact that can lead to premium pricing that we think could grow the market by as much as $1 billion for Medtronic. And we see an enhanced reimbursement opportunity that we're really increasingly excited about. Importantly, we have two Breakthrough Device designations for AVIM therapy, and that could drive another $1 billion of growth. We get to participate meaningfully through our royalty interest. We think that annual royalty opportunity is $500 million or more for Orchestra.

And it's important to note our revenue share expressed in dollars starts at a minimum of $500 per device, and limited by the current payments and reimbursement can go up to $1,600. The minimum 500 is for outside the U.S., excluding China and Japan. There's a higher, materially higher minimum for China and even higher for Japan and the U.S., but it is uncapped. So higher reimbursement could lead to even higher royalties than this range, and we're excited about that opportunity. So once again, very significant royalty, but with significant revenue and profitability implications for us and Medtronic. We entered in this partnership in 2022 after more than a decade of evidence development, both pre-clinical and then clinical of our therapy, and now are nearing the completion of the BACKBEAT pivotal study that we've run in collaboration with Medtronic.

Here is the key data from MODERATO II, which is the pilot study. What you are seeing here is, first off, consistently greater than 10 millimeters. Remember that 10-millimeter mark in terms of its material impact on risk. Greater than 10-millimeter consistent signal of efficacy. What is notable is first on the left before randomization, both in MODERATO II and in our BACKBEAT study, patients have AVIM therapy set up. As we see, an immediate blood pressure drop. To qualify for randomization, they need to see at least 5 millimeters of drop. 97% of our patients in this study that qualified for randomization saw that drop, and in fact, the average was 13.2 millimeters. We look at that through the lens of ambulatory systolic blood pressure. Patients are wearing a device that is measuring blood pressure 40 times for the full day.

We saw over 15 millimeters on day 1, statistically significant versus control, and at 6 months, significant results over 11 millimeters. Long-term results consistent. Safety looked better, and medication burden actually trended down for our patients. We are looking at disease-modifying effects for blood pressure, but also when we think about an older comorbid population, significant challenges in adherence, compliance to drugs. This is an always-on therapy running in the background. It can target pulse pressure. A lot of these patients have isolated systolic hypertension, and they have significant heart failure risk. We have also seen improvement in cardiac function, both in terms of diastolic function and positive reverse remodeling of the ventricle. So really a therapy that is looking like it not just treats blood pressure risk, but improves function and can be a potential treatment for heart failure.