Carl Deirmengian MD Scientific Founder and Chief Scientific

Carl Deirmengian, MD Scientific Founder and Chief Scientific Officer January 18, 2011 - PCCI OVERVIEW

Two Epidemics 1 - Arthritis 2 - Infection Periprosthetic Joint Infection: The Economic Impact of Methicillin -Resistant Infections Journal of Arthroplasty Joint Replacement need The orthopedic community has begun to witness a worrisome rise in the incidence of periprosthetic joint infections (PJIs) caused by resistant organisms. Cost: $107, 000 per case

The Problem Infections are not obvious Antibiotics alone do not cure deep joint infections The U. S. standard of care involves a two-stage surgical procedure over three months

Standard Diagnostics • Blood tests – CRP, ESR • Intuitively suboptimal • Joint Tests – WBC count, Cultures • Subjective, inconsistent • Radiographic – MRI, Bone scan, PET scan THE SURGEON IS LEFT WITHOUT CONFIDENCE

r Cygnasure Addresses an unmet clinical market need • Tests the local joint fluid • Objective analytic laboratory test • Rapid point-of-care • Improved accuracy

Technology Based on antibody technology (ELISA) • > 25 year history • No technological barriers • Multiple platforms • Low cost of development

3 Clinical Studies #1 – Coventry Award Publication 12 knees – defined genetic signature for infection #2 – Confirmation study 16 knees – confirmed genetic signature #3 – Clinical Orthopaedics 51 knees – ELISA benchmark study

The Technology

The Technology Marker Candidates Fold Elevation Accuracy 1 258 1. 00 2 27 1. 00 3 120 0. 96 4 112 0. 94 5 2 0. 86 6 24 0. 94 CRP 13 0. 82 ESR 3 0. 76 WBC 31 0. 86

Clinical Awards • 2006 American Academy of Orthopaedic Surgery Poster Award • 2005 The Knee Society, Mark Coventry National Award (1 st) • 2005 OREF/Zimmer Career Development Award • 2004 OREF Resident Research Grant/Award • 2004 The Smith & Nephew National Research Award (1 st) • 2004 National Arthroscopy Association Resident Award (1 st)

Intellectual Property USPTO # 7598080 October 6, 2009 Diagnostic Assay for the Source of Inflammation

Management Team CEO CMO COO CFO Search Underway January, 2010 Carl Deirmengian, MD -Scientific Founder -Princeton University, Harvard Medical School, -Rush Presbyterian Orthopaedic Surgery Fellow Mike Behr -20 years in medical device industry - J&J, Zimmer -CEO of CD Diagnostics since founding in 2008 Greg Lumpkin -25 years as operations/finance manager -Tarsa Therapeutics, Tobira Therapeutics, Cortria

Board of Directors Richard P. Schwarz, Ph. D. Chairman Member -32 years in the Pharmaceutical & Biotech industry -Senior Management Experience -Immunomedics, Astra Pharmaceutical, Texas Bio -Interim CEO for numerous start-up companies Dave Pfeiffer -20 years in the life sciences industry -COO, Nitric Bio -VP, Collagenix. -Smith. Kline Beecham, Zeneca. Robert E. Booth Jr. , MD -International leader in total joint replacement surgery -Lead designer of the Legacy® total knee system -Sir John Charnley Award

Scientific Advisory Board Javad Parvizi, MD – International Leader in Orthopaedic Infection BOD – Orthopaedic Research Society and Musculoskeletal Infections Jess Lonner, MD – International Leader in Orthopaedic Infection BOD – Orthopaedic Research Society Craig Della Valle, MD – International Leader in Orthopaedic Infection Chairman AAOS Infection Guidelines Committee Alan Wu, Ph. D. – Chief Clinical Chemistry, UCSF >20 awards in the field of molecular diagnostics, protein biomarkers Sam Niedbala, Ph. D. – Founder and Chief Scientific Officer, Orasure

Market Potential Synovial fluid – second most tested body fluid Primary Joint Replacements – 2010 – 1 million Revision Joint Replacements – 2010 – 100 K Operating room, Emergency room, MD office, Hospital Laboratory ($50 -125 per test)

Market Potential Synovial fluid – second most tested body fluid Rheumatoid arthritis, Lupus, Lyme disease, Gout, pseudoseptic infection, pseudogout

Funding Strategy 2010 2011 Funding & Source Use of Funds $700 K Convertible notes Research and Development, Legal fees, Operations $2. 7 M venture/grants Product Development Regulatory Strategy CMS strategy FDA study design and pre-meeting Clinical Trial Completion, $4. 6 M 2012 Corporate Partners Regulatory submission, Completion 2013 of licensing/partnering deal

Successful Exit CD Diagnostics – The Synovial Fluid Company - Intellectual property portfolio Inflection point – FDA approval 1. 2. 3. Licensing to a corporate partner - large diagnostics Strategic buyer - mid-range diagnostics, orthopaedics IPO

Next Step • Identify and hire CEO • Create and Execute - Product development plan - Clinical trial plan - Regulatory strategy • Close additional financings

Questions 1. CD Diagnostics has a solid technology with a strong patent that might increase in scope with a patent continuance that looks promising. Is it a better idea for CD Diagnostics to put all of it’s energy into developing one product and selling the company, with it’s technology, to a potential buyer or would it be better to develop an extended line of applications for this technology and then approach a potential buyer/partner? 2. CD Diagnostics has been approached by a couple of large companies that might be interested in a strategic partnership. Is a strategic partnership a good idea at this point for CD Diagnostics? What models for a strategic partnership would make sense? 3. CD Diagnostics is looking at models for pricing of Cygnasure®. What models exist to determine an appropriate price for a product like Cygnasure®? How should we begin to determine a price for Cygnasure®.