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LD Micro Main Event XIX Investor Conference

Oct 20, 2025

Adam Levy
CEO, NEXGEL

Decided, let's just throw something up on Amazon and see what happens. That was the beginning of us becoming a consumer products company. Those products resonated very well. Today we have about an $8 million a year direct-to-consumer products division. This is a little bit just about our facilities. We have a 16,500 square foot facility in Langhorne, Pennsylvania, that houses the electron beam accelerator. There are only two facilities in the world that make hydrogels this way. We own one. Medtronic owns the other. Medtronic does not compete with us. In fact, Medtronic is one of our customers. They do not do contract manufacturing. They only make one kind of gel. They don't compete with us at all. They don't do consumer products. We actually make two hydrogels for them because they don't ever want to come offline on their product line.

They're a small customer for us, a steady customer for us, but certainly not a competitive issue. In 2023, we entered into a joint venture with a company called CG Converting and Packaging. The one bottleneck we had in our original business model was that we could make all the hydrogel that we needed. When I walked into the facility, we were at 4% capacity. Today we're at about 18% capacity, still very low. Where we did have a bottleneck was in converting and packaging. It was a very manual process. We only had a small white room. I didn't want to build that out ourselves. At that time, our growth was still uncertain. The last thing you want to do is go into a business you don't know that well, buy a lot of expensive machinery, and then if it doesn't work out, you've actually made the problem worse.

We went out and reached out to one of our largest customers that was already a profitable business and said, listen, why don't we join forces? We'd like to buy into that. That way it de-risked the trade. Knowing that we had some big customers such as Cintas Corporation, AbbVie, etc , on the horizon, this was a way for us to be able to deal with the capacity issues because we really struggled with orders over 25,000 units prior to this acquisition. This has worked out extremely well for us. Hydrogels for consumer and medical applications, and this is the beginning of our medical device program. Where do we shine? As people get older in age, they get fragile, crepey skin, skin allergies, skin irritation.

We make a biocompatible, gentle adhesive and/or wound care product that really shines any place that a medical device spends considerable time on the skin. Think about monitoring devices, think about wound care, a whole host of applications that we'll get into as we move down this presentation. Currently, we'll talk a little bit about our medical device program. These are what I would call our aspirational programs. These are larger-sized opportunities that we are looking to partner. We have a drug delivery pipeline. We've done some proof of concept studies on diclofenac. We showed that we can actually deliver diclofenac in comparison to Voltaren cream at about 2.5 times the speed to get to full dosage. It is also a patch that can be worn for up to 48 hours. Therefore, there's no measuring, no cream, no mess. We do not have a commercialization plan for diclofenac right now.

This was really sort of experimental work that we did. We didn't spend a ton of money on it, but we wanted to show that we have a delivery platform that could be applicable to a lot of different compounds. We also now are working on our apremilast patch. You may notice that on our Board of Directors is Dr. Jerry Zeldis. Dr. Zeldis was the Chief Medical Officer of Celgene, almost from its beginning. Obviously, you're very familiar with the apremilast. Dr. Zeldis had the idea that if you're taking either a biologic or apremilast itself, you generally get really good results, 80% to 90% clear up of your lesions. What about the stubborn lesions that remain? What about the 15% of patients who can't tolerate the systemic apremilast? What about mild to moderate, which don't qualify for a systemic delivery?

His idea was that if we could take a patch and we could deliver directly into the lesion, the patients could see some result. We first did our in vitro studies and showed we could get four to five times the systemic dose into the lesion using our gel technology. Again, why is this important? You can't put acrylic adhesive on a psoriatic lesion. It will irritate it. You can't use a chemical hydrogel. You have to use something that's gentle. Our adhesive is actually moisturizing. This is a very unique delivery system for this type of application. We then did just a proof of concept study, five patients up in Canada. They generally showed, and these were stubborn lesions, folks that had been on Skyrizi, had been on apremilast, had been on other medications.

We did it with a compounding pharmacy, which you can do with a prescription up in Canada. They saw a 60% to 90%, 60% improvement in their lesions after four weeks, 90% after eight weeks. Promising stuff, super early, not a program that we are going to take ourselves, but certainly we're going to continue to accumulate some data and seek some kind of a strategic partnership or alliance. Moving into consumer health and beauty, this was part of that sort of accidental success that we had. We currently have the NEXGEL branded products, which center around our hydrogels. Silverseal is the flagship product. Silverseal is made using our electron beam accelerator. It is a 94% water wound dressing with 1.5% ionized silver. It kills staph, MRSA, and strep. It is an FDA-cleared 510(k) class II medical device.

We also did a 44-patient double-blinded study showing that it reduces the incidence of scarring. We think that that scar data will fit nicely with some products from one of our new partners. You may notice the new product up there, which is Histosolve. We released Histosolve about a year ago as part of our partnership with STADA. I'll talk about STADA in a minute. That's the beginning of an entire product launch line there, which will also be synergistic with Silverseal. We also have an M&A acquisition. I'm a roll-up kind of guy. I like roll-up strategies. Hydrogels are fantastic and have a lot of applications we'll talk about. They're not always the answer to everything. We purchased a product line called Kenkoderm. It fit the ethos of our company, being gentle to the skin.

It was a line of gentle-to-the-skin soaps, cream, shampoo, conditioner, developed by a dermatologist for her husband who had psoriasis. During the pandemic, he wanted a prescription from her for Skyrizi. She said, I don't really like putting you on an immune suppressant during a pandemic. Why don't we just try to create some products that will give you some relief? The products were very, very successful. We now sell them both in the U.S. and Canada. We just received new formulations and clearance. We're getting ready to launch these products in Europe, probably by Q2. The other brand acquisition that we made was in May of last year. We acquired the Silly George beauty brand. Silly George at that time was doing about $2 million a year in sales, which I announced to the street. We released a new product called the Pop-On Lashes, which immediately took off.

Silly George is now on about a $5.5 million to $6 million a year run rate. Sales are very steady. We are about to release several new products to expand Silly George away from just being an eyelash company. We're releasing a line of lip glosses that came out about two weeks ago, five different colors. We'll be doing under eyes using our hydrogel technology, which is synergistic to both companies. We'll have mascaras. We have all sorts of products coming out on Silly George as that brand continues to grow. One of the key partnerships that happened at the end of last year is our deal with Cintas Corporation. This revolves around Silverseal. Cintas, as many of you know, is the company that provides—they're known as the uniform company, but they do more than that. They provide all sorts of products, dispensers.

You've seen Cintas if you've walked in almost any office building anywhere in the United States. They have the third largest truck fleet in North America, and they are distributing Silverseal into all of their kits. That partnership started with initial shipments to them in Q4 and Q1 of this year. Now the products are fully available in their offices and other locations. The reorder pattern so far has been quite strong. We think they're going to be a very important customer for us and a very steady customer for us. It's going very well. I mentioned Histosolve in one of the earlier slides. One of our partnerships is with a company called STADA. For those of you who may not be familiar, STADA is the fourth largest consumer healthcare company in Europe. They do about $4 billion a year in sales.

We have a joint venture with them to release their products here in the U.S. They've chosen us as their U.S. marketing partner. The first of those products, which was Histosolve, was released in August of last year, actually September of last year. It's about a year old. The sales have ramped and grown every year, month after month, to the point where we recently announced an expansion of our relationship with STADA. They're giving us 9 to 11 more products. We're still finalizing which SKUs are coming out when, but those will be released in Q4, Q1, and Q2. Additionally, one of the things we said to STADA, being a small company, is I was very concerned that we had the financial capability or capital to put out all those products at the same time. STADA actually gave us $1 million of non-dilutive capital to support our joint venture.

This is to be used for marketing, inventory, anything that we need to try to ramp this partnership. It's very significant because we basically have a deep-pocketed partner who has said, we want you to break these products. We're building a business together, but we're going to give you the money for that. We're grateful to them. So far, so good. Everything is going very, very well. The next product will be Histosolve, a product for histamine sensitivity, which is probably the smallest of the indications that will be coming out. The next one will be Glutason for gluten sensitivity. The Trofolastin line of products are products for stretch marks, scar reduction patches, things of that nature, which fit beautifully with Silverseal if you think about it.

Silverseal will, if you, let's say, you have a wound or a surgery or some kind of an injury, you put Silverseal on it. It's got antimicrobial properties. It helps heal the wound. It reduces the formation of scarring. We have clinical data that shows that. Then you have products like Trofolastin to use after that to reduce the scar even further. Another big opportunity for us is the Resonic by AbbVie. About three years ago, AbbVie purchased a machine from—they bought the whole company, actually—of Soliton. They paid $550 million for the rights to the Resonic. The Resonic is a treatment for cellulite. It's FDA-cleared. It reduces cellulite for more than a year. It is non-invasive, pain-free, and is a tremendous product. They've had some delays that have hurt us. They were originally supposed to have launched this product, and we were beginning shipping them in July of 2024.

They had some issues with their console, nothing to do with us. Now this product is back online. We expect our first order shortly, at least for validation and verification. While those won't be huge orders for that type of a study, it does show that the project is moving forward. They have a great history with Allergan. If you look at the launch of CoolSculpt, they put between 900 and 1,000 units in the field every year for about four or five years, peaking at about 5,500 units. We are essentially the razor blade in that product. Every treatment requires two of our gel pads at minimum, depending on the size of the procedure. If they ever get that product out and running, this could be the most significant revenue opportunity that the company has. New partnerships and customers are coming along all the time.

We have a robust pipeline of research and development projects that we're doing with different companies. One of the ones that we recently weren't able to do a press release for because that was a legal issue for their legal team. We did announce that in an 8K, they've allowed us to disclose our relationship, and they've allowed us to use their logo in our presentation. We just simply couldn't do a press release. iRhythm's Zio patch is now using our gel as an adhesive. This is a prime example of where we shine, where a medical device contacts the skin. They are a great company with a fast-growing business, and we're very excited that they chose us as their adhesive. Another project that we're working on right now is with a company called Innovative Optics.

They have had an idea to actually, for laser hair removal, shoot the laser through our gel. They just completed a clinical study, which has excellent results that I can't talk about because we're waiting for publication. The idea is that there is a carcinogenic plume that is released when you use laser hair removal. That plume isn't a big deal to the patient who may go in there four or five or six or eight times, but it is a big deal to the practitioner. In fact, several states now, OSHA has mandated that the clinics use some sort of a suppression for the plume. The current one is a vacuum that is not completely 100% effective. We believe that our patch will be, and we'll be announcing those results shortly.

There is a whole opportunity, we believe, for us in that aesthetic space, both for post-treatment masks, where your face feels like it's on fire, as well as actual laser treatments where they shoot the laser through the actual hydrogel. In the study, the main primary endpoint was suppression of the plume. The secondary endpoints were reduced pain. Hydrogel, in general, is a great non-analgesic pain reliever. The mechanism of action is very simple. If you ever burned your finger really bad and it's throbbing, you stick it in water, the pain goes away. You take it out of the water, the water starts to evaporate, the throbbing comes back. Our patches can be 94% water, so it's like putting your finger in the glass of water and never taking it out. It is really one of the best burn products ever, and it's also very good for irritated skin.

We think that there's a big market for us in cosmetic and dermatological offices as well. The company's been growing nicely. We posted in Q2 another more than 100% revenue growth. A lot of it's driven by our consumer product sales. A lot of it's driven by really good growth across the board in our contract manufacturing. The difference is when we buy a consumer product company, you see that revenue change immediately. Whereas on the medical device side, you're talking about much longer lead times. They're whales. They're big companies like AbbVie. You can have delays. You have development costs. They're applying for their 510(k)s. You're doing validation runs. It can take us two years to onboard a company of that size and complexity. We're pretty good at it. We do have a very nice pipeline.

Just like I've been saying in every presentation I do, we have a good pipeline. There will be more customers coming. iRhythm was a perfect example of that. There will be more in the next coming couple of quarters. At quarter end, we received that $1 million of non-dilutive funding from STADA. We just decided to raise $1 million side by side. We feel we have a lot of marketing opportunities. We didn't want to be short and wanted to make sure that we had lots of cash to move all of these projects forward. That's the presentation. I'll open it up for any questions. Yes.

Is it, I mean, that machine looks huge. Is it expensive to make it? I mean, is it a useful product?

Expensive is a relative term. Generally, these machines are very reliable. They can run for a long time. They can run 24 hours a day, which obviously we don't. We run one shift because we're not at that kind of capacity. We will have general little maintenance items that come up. Sometimes you'll have to buy a chiller. Those can be $10,000. Nothing really exorbitant unless something major blows, like the cyclon tube. That could be $100,000. Repairs and maintenance is relatively low. Actually, the electrical costs, which you'd think would be very high, our electric bills run about $5,000 a month. It's not crazy. Yes.

Any idea as to when the AbbVie product will be like fully out of town?

I'm not the first person that AbbVie calls to share all their marketing plans with us, but they do give us forecasts, and they do kind of tell us when we should be getting ready for stuff. The program seems to be moving along very nicely. It seems like they're getting ready. We're about to probably get that validation order, which will be interesting when we get it because that really fully means that they're back online. How quickly they'll launch it, I'm not 100% sure. I wouldn't imagine, given the amount of money that they spent on it, that it would take extra time. It's already been delayed a couple of times. We're expecting that we start to see revenue from them shortly, and probably the real ramp will come in the second half of next year. That's my guess. I don't really know.

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