MADISON, Wis., October 5, 2015 – Stratatech Corp., a leading regenerative medicine
company, announced today that it has been awarded a contract valued at up to $247 million by
the Biomedical Advanced Research and Development Authority (BARDA), part of the U.S.
Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness
and Response. The contract is for the advanced development of StrataGraft® skin tissue, the
Company’s flagship skin replacement product, as a medical countermeasure to treat patients
with severe thermal burns. The planned clinical studies will enable Stratatech to file a Biologics
License Application with the FDA for the commercial marketing of StrataGraft tissue, and
confirm efficacy in all key patient populations. The contract also provides for the procurement of
finished product by the U.S. government so as to establish an inventory of StrataGraft tissue for use in case of a natural or man-made mass casualty emergency.

Read this story in the Wisconsin State Journal here.

This five-year BARDA Project BioShield contract is structured with a base period plus defined
contract options covering a series of clinical trials, product procurement and other activities.
Stratatech’s initial award under this contract totals $60 million for the base period and initial
product procurement. This new contract replaces and expands upon a previously awarded $47
million BARDA Advanced Research and Development contract, of which $18 million has been
awarded to date. Together, this brings the combined potential support from BARDA to nearly
$265 million. 

“The financial impact of this new award to Stratatech is unquestionably significant and will
accelerate our transition into a fully integrated, operating company. But the real beneficiaries
here are the severe burn patients who for the first time will have a therapeutic option available to
them in lieu of painful skin transplantation,” said B. Lynn Allen-Hoffmann, Ph.D., Stratatech’s
chief executive and chief scientific officer. “Providing these patients with an off-the-shelf
regenerative skin tissue has the potential to transform severe burn care. Our partnership with
BARDA has been and continues to be instrumental in advancing this orphan product through
clinical development.” 

StrataGraft tissue is a full-thickness, human cell-based skin tissue that was designed to mimic
natural human skin, with both dermal and fully differentiated epidermal layers. The epidermal
layer is comprised of the Company’s NIKS® cells, a human keratinocyte progenitor cell line that
faithfully reproduces normal skin architecture and barrier function. Clinical trial outcomes to
date have been compelling. Trials have been designed to assess whether StrataGraft tissue
can be used in lieu of autograft (skin transplantation) to achieve wound closure. In the most
recently completed study, 27 of 28 evaluable, per-protocol patients achieved complete wound
closure of their StrataGraft treated sites with a single application of tissue. This is the first
therapeutic product to achieve a clinical outcome comparable or superior to autografting. 

There is an urgent need for new treatment options for burns. The American Burn Association
estimates that 1.1 million people suffer burns annually in the U.S. Approximately 40,000
patients require hospitalization. Severe burns and other major skin trauma are life-threatening
injuries that require immediate surgical intervention. Frequently, this involves temporary
coverage of the wounds with cadaver skin or synthetic dressings to prevent infection and
dehydration because there are no full-thickness skin substitutes commercially available for the
treatment of burns. Permanent closure of the wound is generally accomplished through split-thickness skin autografting after the wound bed is sufficiently stable that it will accept the
transplanted tissue. Although this regimen is the standard of care for severe burns, cadaver
skin has limited availability and introduces the potential for pathogen transmission, while the
donor site wounds created during autograft surgery are extremely painful and frequently result
in significant scarring, all of which are serious drawbacks to this approach. 

In the case of a mass casualty thermal burn event, the Government Accountability Office
estimates that more than 10,000 patients might require thermal burn care. The limited number
of specialized burn centers and related medical infrastructure in the U.S. creates a public health
need for therapies that could be deployed quickly for use in these and other care sites.
Successful completion of this contract would position the Company’s StrataGraft skin tissue for
rapid deployment as a medical countermeasure.

The current award is funded pursuant to contract HHSO100201500027C effective September
29, 2015. For more information about BARDA, please visit their website at