TRANSCRIPT:

We're all here to talk about this because I think we have consensus now that human milk has tremendous benefits for babies, and particularly those babies that are in the NICU born very low birth weight. The data is telling us the clinical studies are telling us that it's more than just nutrition, that it really is medicine for these infants that there are clinical, many clinical studies over 35 that show that exclusive human milk in these babies, drives improvements in comorbidities, NEC, surgical NEC, but also things that you might not expect, like BPD and ROP, improve in these babies that receive exclusive human milk. But the current definition of milk and the products made from human milk is not that they are medicines, but that they are foods only. Next slide please.

So, as a food, there are many nutritional aspects of human milk, but like blood and plasma and other biologics, this food is not without risk. And we know that many things in biological agents such as viruses and bacteria, to molecular entities such as drugs, can be transmitted through breastmilk to these babies, and that is a risk. So next slide, please.

Coming from a background in in plasma, we really look at dealing with human milk as a multifactorial approach. And that means that we have to be thinking about not only do what do we know today about the rest of human milk, but what do we anticipate might be the risks in the future. And we have to build systems that anticipate and deal with those risks. And that means that we have to be very forward thinking, mainly because there are no national minimum requirements and standards that have been put out there that are in place for every milk bank and every manufacturer of human milk-based products. So each milk bank is following its own, developing its own, and following its own set of protocols to ensure the safety of the products that they were producing, and that that is really problematic when you start to look at the growth of the industry as it's occurring today. There are a number of different ways that we approach safety, we start with screening of donors, and then we proceed to testing of milk and products as the process goes along. Next slide.

What's the difference here between screening and testing? Well, you can see here, there are a number of things that fall into the category of screening. So when we do screening of our donors, and we have a questionnaire that they fill out, that is truly just a screening process - it's asking a set of questions, and getting answers from the donor. That is a one time or an infrequent process that we're going through. Testing on the other hand, indicates that you're actually interrogating the milk that you're receiving itself to ensure that the answers that you got from the donor during the testing process are matched by the answers you're getting during the screening process, which are matched by the answers that you're getting from the milk during the testing process. We found this to be critical when you are dealing with biologics. We found that in the plasma industry and the blood industry, you can certainly screen donor and that is a very important part of the process. But it is not the be all end all. You really do have to do the testing to ensure that you're getting the answers that you expect. So next slide.

The distinction between screening and testing, I think is is lost on many regulators and are not on regulators but on legislators. And so we are really trying to educate people on why this distinction is so important. And here's a one example of a screening of a donor and and even testing of a donor at the beginning of their donation process might tell you what their risk is from a viral standpoint at that moment, but it doesn't tell you anything about their future risk. A donor can be free of infection at the time of screening and blood testing and become positive and zero convert later on. without some sort of testing of the mill on an ongoing basis, you won't know whether that donor Syrah converts, unless you do some testing at a later date. And really, there's no requirements to do that other than in a few very limited circumstances. The other thing is that screening can help you understand what donor a donor is risk is with respect to their environment and their behaviors, but only to the extent that they're willing to disclose those pieces of information, honestly, and that that doesn't change on an ongoing basis. So harmful chemicals, drugs, and even exposures to things like heavy metals in the environment, might not be obvious or might not be the case at the beginning of their donation journey. But that might change over time. Next slide, please.

One example that we use, because it's really very easy for people to understand is, we screen every donor by asking them and every milk bank screens their donors by asking, “Do you smoke?”. And the answer needs to be no. And for us, that needs to have been a no not for the past 12 months, no use of nicotine, no use no smoking or anything. But what the data tells us is that that is a hard thing for some donors to maintain. And in fact, up to 40% of donors, up to 40% of women who smoked prior to pregnancy who quit will relapse at some point in the first six months postpartum. And when we look at the data that we've generated internally by doing an actual cotton or nicotine test of milk, we do see that while 40% is not reflected in the numbers, some level of compliance or lack of compliance is reflected in the numbers. And the interesting thing always to take away from this is we have looked at it from the perspective of non-paid donors with non-remunerated donors and remunerated donors. And there's really no statistical difference between those two populations. We see katene failures at both at essentially the same rate. So clearly, if we are not, if we are not monitoring compliance on an ongoing basis, and then there's just things that we're going to be missing, even if we're screening our donors every six months, as is the requirements of say, for the state of New York tissue bank licensing. Next slide.

And there's a lot of misconception around the risk associated with these things. We pasteurize the product, doesn't that ultimately make the product safe? Well, in fact, pasteurization is a pretty amazingly good viral reduction and risk reduction technique. And it's used across a variety of different industries. We did, every drop of LP albumin that is produced out of human plasma is in fact pasteurized. It's pasteurized under requirements in the CFR for Biologics, very effective, albumin is a very safe product. There has not been a transmission of virus using albumin in decades, many, many decades. It's also used as we know in the dairy industry, and that customization is one of the ways that that dairies do pasteurize and in the dairy industry, pasteurization is highly controlled and regulated. There's the pasteurized milk ordinance. That is, the FDA has a set of requirements for equipment and process monitoring of pasteurization. And it is incredibly rigorous and very specific. So every drop of dairy milk follows that process. And then we also have other processes that are kind of like pasteurization, like retort processing, it's really more of a sterilization, it's a high temperature high pressure sterilization, if it falls slightly short of what we would consider sterilization like would be used for production of surgical instruments. But it's pretty close. It produces a commercially sterile product. It also, as we know, destroys a lot of the bio activity and bioavailability of the components of milk, but it is highly effective in in pasteurization. What none of these do is universally address small molecules and contaminants that might be in the milk. So while there are likely some contaminants that are that are sensitive to heat, even at lower pasteurization temperatures, the vast majority of these molecular entities are going to make it through just fine. A great example is THC. At these temperatures that you're going to expect to see and pasteurization, you're gonna have very little effect on THC up to 200 degrees C, you know, then you might see a small reduction in THC coming through in the final product. But pasteurization is not a panacea. It is a great step in the process for safety, but it does not address a large number of problems. And I'll highlight one other area that pasteurization does not deal with, and that is bacterial enterotoxins. Many of the neurotoxins produced by bacteria, such as staph, Bacillus cereus, these toxins are not destroyed even in retort processing. So if the bacteria is present, and allowed to produce toxin in the milk up front, that toxin will remain and will end up going in, fully active, into the patient. So these are all things that need to be considered when we talk about human milk donations. Next slide, please.

So we talked about the regulation of dairy milk. Is human milk regulated the same way? It is not. Dairy milk has its own specific set of regulations. Human milk is regulated in a variety of different ways. At its most basic donor milk is regulated as a food by the FDA. It's covered by the Center for Food Safety and Applied Nutrition. There are no specific regulations at the federal level for human milk, but it does, in theory, need to comply with all regulations that all other foods comply with. For some types of human milk products, like our fortifier, the FDA has applied a stricter standard of infant formula. And formula has its own set of regulations, they're still foods, but they have their own set of regulations. And they're much more strictly manage, for example, there are very strict requirements on testing and labeling of infant formula products. There are notification processes with the FDA before you can market, a new infant formula or a modified infant formula. And we do get inspected much more frequently than your average food producer. In theory, we should see them every year in practice, they get around to us about every two years. But like clockwork, they come into our facility and audit us every two years. And then there's another set of state level regulations that have been in place for a while. And those are tissue bank regulations. California, Maryland and New York do classify human milk as tissue and require that you hold a valid tissue banking license. And in our case, both California and New York inspect us, California more frequently. In New York, obviously less frequently that every five years, they show up and they do a full compliance inspection against their regulations. Next slide. So as I said, human milk donor milk itself, though, is just regulated as a food. That means that it has a lower level of inspection, food manufacturers are generally not inspected. on a routine basis, they are generally inspected on a for cause basis, when there's a problem, the FDA will show up. They do not require any pre market notification. So a new human milk donor donor milk bank, would not be required to notify the FDA and provide him any information to the FDA beyond registering their facility as a food manufacturing facility. So the question is, you know, how is the why is it that the milk that you're seeing on the left of your screen, that dairy milk going to these kids? How is it that that's more regulated than the donor milk that's going to the baby and make you on the right side of the screen. And that's really why we're here today and why we are talking with different states about the level of regulation of human milk. Next slide, please.

What we've been able to do is to is to work with different states, like Arkansas, like New Jersey and like Pennsylvania, to put in place common sense, regular common sense law that says we are at least going to require that that donor milk and milk human milk based products in our state that are given to fragile Mickey babies meet some minimum standard of safety and, and purity. And so as you can see here, there are six states now That have some level of regulation, some level of law have a law in place, and that are actually putting licensing requirements in place and writing regulations to oversee donor milk banks and the milk that's coming into their states. And there's four additional states that are in the process of writing that legislation, and are, you know, talking with constituents talking with stakeholders about what that should look like. Next slide, please. So, as we look at the variety of different ways that the state is right, the states are regulating human milk, you know, what really is the best approach is it to go all the way to the calling it a tissue and regulate it just like you would tissue banks that exist in your states. Ultimately, we believe that the best approach is for states to put in common sense requirement, common sense legislation that says we're going to we're going to provide state level oversight. And we are going to provide a set of minimum requirements that the milk banks must meet. And those minimum requirements should address the broad concerns around the safety of the milk provided to these infants. Next slide, please.

And we are getting good response as we talk to state legislators. Because as you can see, here, you look at the timeline from the last 20 years of the human milk industry, starting with when we were established, and there were really just a handful of donor milk banks in the US until today, where we have well over 25 nonprofit note banks. And we have four different entities, not a for profit entities that are in various stages of producing donor milk of a variety of types, or even starting to talk about producing human milk fortifiers. And those types of products. This is we know as it as an industry grows, and the faster it grows, the more risk there is to the patient if there's not appropriate legislation in place. And just to give you an idea, next slide, please, of what that looks like in terms of total volume. This is what Havana has put out in terms of their growth of their milk banks and the number of ounces that they are producing. So that's pretty amazing growth that you're seeing on the donor milk side. And on the one hand, that is fantastic for babies. That means that more hospitals, more preterm infants have a human milk available to them. But on the other side, it means that there are more no banks in play. More people are getting interested in this because they see the volumes and that there is a demand and that's where we really need to begin managing the risk.