Stakeholders in CVBT’s Success

In all enterprises there are stakeholders, those who have a vested interest in the enterprise’s success. CVBT like all companies has traditional stakeholders, including shareholders, employees and suppliers. CVBT however, has special stakeholders; the millions of people suffering from diseases we believe we can treat.

Lack of blood flow to a tissue or organ is a disease that is responsible for over half of the deaths in the United States, Europe, Asia and the Middle East. Whether it is clogged arteries in the heart, brain, kidney, intestine, or complications from diabetes, each symptom is basically the same disease. We believe, based upon evidence, our drug grows new blood vessels that by-pass blockages. These new blood vessels re-establish the flow of blood, diminishing damage to the tissue or organ, and could save millions of people from pain, suffering and potential death from these diseases.

The team at CVBT is highly committed to achieving success. We have a duty and an obligation to all our stakeholders to succeed. Each of us has been touched by someone whose life has suffered due to these diseases. At CVBT, we have enjoyed meeting people who have been treated in the clinical trials. These are people who tell us how their lives have been saved and/or improved by Dr. Stegmann’s discovery. These people intensify our commitment to succeed.

Methods to achieve our objectives

To understand what we are trying to achieve, it is important to understand that we do not view the space CVBT fills from the traditional biotechnology perspective. Why we are different? Why are we not following the traditional biotechnology formula? I have been told that 99 out of 100 biotechnology companies fail. As a businessman that sounds like poor odds to me. Why would I choose to follow an established formula that fails 99% of the time? As a rational businessman who has built successful businesses before, I would rather take normal business risk, which I believe we can succeed with, rather than follow blindly a business formula that has a 99% failure rate.

How are we different?

We are not following the traditional biotechnology business model espoused by most biotechnology experts. We are focused on making sound business decisions, not just taking the advice of the talking heads. We are not chasing a theory. Our science is tested and we now endeavor to prove it to the regulators. We have raised over $52 million dollars carefully from investors who believe in what we are doing. We have not turned over control of the company to venture capitalists who focus on short-term gain and are not focused on our stakeholders or their long term aspirations. Our company is owned and controlled by people who believe in our mission. We do not have the bureaucratic management that some big pharma companies deal with, so we are nimble and able to respond quickly to challenges. We are in this for the long run and do not plan to walk away from our life’s greatest purpose.

It is amazing to me how many people think we need to sell out or join up with others who have a track record of failure. If we believe in CVBT’s drug candidates and the medical benefits they bring to millions of people, why would we entrust its success to anyone else? We are going to advance our company and our drug as we believe is best for all our stakeholders. This will be based on rational business logic and financial discipline, not on a failed formula.

Progress of CVBT

In our Annual Review we have updated you on the significant scientific and medical progress we have made over the previous two months. Our progress advances continuously and I would advise visiting our website www.cvbt.com to obtain further updates. Our progress is dependent upon many things outside of our control. However, regardless of how frustrating these issues and delays are, they are not important. What is important is that at each new barrier we adjust, modify, overcome and move forward. We deal with whatever problem comes our way and advance towards our objective.

Clarity of CVBT Situation and Position

As Chairman of the Board, a major responsibility of mine is to guide the company towards our objectives. To do this, I meet with many people from biotechnology experts to regular individuals, all of whom have advice. What amazes me is the lack of vision and understanding of some of these experts. Many do not know the difference between a protein therapy and a gene therapy. Many believe all cleared FDA Phase I trials are the same. Many are unable to grasp the difference in marketplace opportunity and size. You need to understand all of the aforementioned factors to understand why CVBT is different and appreciate its current position.

In 1992, Dr. Stegmann started his lonely journey to test his idea; could a protein trigger angiogenesis in the human heart to by-pass blockage? There were no venture capitalists or big pharma supporting his view. Even the medical experts believed he was wrong. Dr Stegmann was alone in his belief. However his belief was vindicated when in February 998 the American Heart Association published his medical research report in their publication Circulation.

Dr. Wolfgang Priemer, Grant Gordon, Alexander Montano and I were convinced in March of 1998 that Dr. Stegmann’s medical discovery was real. We believed that Dr. Stegmann had discovered a major medical breakthrough and possibly the biggest biotechnology business opportunity yet. In early 1998, we founded CVBT with Dr. Stegmann. For 8 years, with the support of our investors, we have been working towards proving what we believe to be true.

Dr. Ralph Bradshaw, Dr. Jack Jacobs and Dr. Ken Thomas all scientists of molecular biology, studied Dr. Stegmann’s work. After their analysis they joined us in this quest to prove what we believe to be real. Mr. Mike Flaa joined us as our CFO to build a finance and administrative team of excellence.

Many others have completed their own investigation and become believers. Now we must journey through the regulatory authorities’ approval process. Our goal is regulatory approval of the different drug candidates containing FGF-1141 for multiple medical indications and then its use by the medical public.

I believe within 36 months we will have the required proof for the regulatory authorities. Although three years seems a long time for many of us, it is the final quarter of the championship game and we are winning. I believe I can speak for most of our major shareholders and employees, that if our life’s legacy was saving millions of people’s lives and lessening their pain and suffering, it would be our ultimate business accolade.

CVBT has a passionate team of stakeholders. To us failure is not an option. We must succeed. It is the most important task in our lives.

I thank you for your faith in us, your trust in us, and your commitment. Our management team and major shareholders share with you their faith, their trust and most importantly their commitment to achieve our ultimate goal; to lessen the pain, suffering and death for the millions of people affected by these diseases by obtaining regulatory approval and ultimately the sale of our drug candidates.

Sincerely,

Daniel C. Montano
Chairman, President and CEO
April 24, 2006