Cytori Therapeutics Comprehensive Compliance Program
  1. Introduction
    Cytori Therapeutics (hereinafter “Cytori” or “Company”), is committed to delivering high quality products to consumers and patients, as well as conducting business in a safe, compliant, lawful and ethical manner. As part of our mission to operate in an appropriate and professional manner, Cytori has adopted a Comprehensive Compliance Program (“Compliance Program”) and intends for all employees to heed guidelines set forth by this Compliance Program.

    The purpose of the Compliance Program is to assist in the detection, response and prevention of violations to Company policy, procedures and applicable laws. Similarly, the program operates in accordance with the policies outlined in the Code of Ethics on Interactions with Health Care Professionals published by the Advanced Medical Technology Association (“AdvaMed Code”). Cytori believes that to the best of our ability, we have established and implemented the proper checks and balances that reflect our continued strive towards excellence in all compliance related activities.

  2. Overview of Compliance Program

    1. Leadership and Structure
      1. Compliance Officer: Cytori has named Jonathan E. Soneff as its Compliance Officer. The Compliance Officer’s duties include the development, monitoring, and enforcement of the Cytori Compliance Program as well as serving as the contact for all compliance related inquires.
      2. Compliance Committee: Cytori’s compliance committee has been developed to function as an interdepartmental advisory group consisting of Medical Affairs, Legal, Human Resources, Regulatory, and Sales and Marketing. This group of individuals assists the Compliance Officer in carrying out day-to-day responsibilities pertaining to the Compliance Program.
    2. Written Standards
      1. Code of Business Conduct and Ethics: Cytori is committed to maintaining the highest standards of business conduct and ethics. Cytori has developed a Code of Business Conduct and Ethics to inform and encourage each employee, officer and director to understand the principles of behavior which support Cytori’s commitment and the Code’s application to the performance of their business responsibilities.
      2. Cytori has developed written policies and procedures to address a variety of potential risk areas including: legal compliance, insider trading, whistleblower policy, international business laws, conflicts of interest, corporate opportunities, financial integrity and public reporting, fair dealing, gifts and entertainment, antitrust, protection and proper use of company assets, confidentiality, media discussions, waivers, compliance standards.
    3. Training and Education
        Critical to the Comprehensive Compliance Program is the education and training of all employees. Cytori takes great strides to regularly review and update its compliance training documents, procedures and trainings on a regular basis. Current education processes include new employee training in Code policies, annual live refresher training and computer-based compliance workshops in the areas of global anti-bribery, workplace harassment, AdvaMed Code, Eucomed Guidelines, medical device regulatory compliance, and HIPAA.
      • Auditing and Monitoring
          Cytori works to evaluate and monitor all components of the Comprehensive Compliance program on an ongoing basis to mitigate potential emerging risks or violation concerns. Our monitoring processes also include regularly evaluating activities of sales personnel, consultants and contractors as well as assessing whether violations are due to internal policies, procedures, or monitoring processes.
        • Responding to Violations and Corrective Action Procedures
          1. i. We believe that employing a Comprehensive Compliance Program decreases the likelihood of employees acting in an unethical and unlawful manner as well as helping to positively identify and respond to violations in a timely fashion. Similarly, Cytori enacts proper disciplinary actions upon the discovery of all violations or infractions and reports major infractions to the Governance and Nominating Committee and the Board of Directors.
          2. ii. Should employees feel uncomfortable speaking with the Compliance Officer for any reason, they may pose questions or concerns through Ethicspoint® hotline, an independent third party we have engaged for this purpose, by telephone at 866-ETHICSP (384-4277) or online at www.ethicspoint.com.

      • California Health and Safety Code §§119400-119402
          For purposes of compliance with the California Health and Safety Code §119400-119402, Cytori has established guidelines and procedures for interactions between healthcare professionals and Company representatives. The purpose of such guidelines and procedures is to protect and enhance Cytori’s relationships with healthcare providers, improve the practice of medicine, and ultimately benefit patient care. California Health and Safety Code §119402 asks that organizations such as Cytori comply with standards surrounding gifts and payments made to healthcare professionals to ensure that patient safety is of the utmost of importance at all times. As such, Cytori has adopted several practices to ensure proper interactions between healthcare professionals and Cytori representatives. For purposes of compliance with the requirements of the California Compliance Law and as part of its Compliance Program, Cytori has established a specific annual aggregate dollar limit of $2000 on gifts, promotional materials, or items or activities that Cytori may give or otherwise provide to an individual medical or healthcare professional in California, provided, however, that such dollar limit may be increased in unique and limited circumstances, and with restrictions, as deemed appropriate by the Company’s Compliance Committee.

          Such items or activities primarily include: medical textbooks and other items that principally entail a patient benefit or are related to the healthcare professional’s practice; modest meals associated with a substantive discussion of a Company product or a disease state; and other items or activities permitted under the PhRMA Code, AdvaMed Code and OIG Compliance Guidance. These items and activities are primarily directed to the dissemination or communication of medical and scientific information as a resource for healthcare professionals to assist in making clinical or other medical judgments. This limit may be revised from time to time, in which case the revised limit will be published in this section of Cytori’s website. This limit represents a spending cap, not a goal or average; in many cases, the amount spent per physician may be substantially less than the cap amount. The Company has established an internal monitoring system designed to help ensure compliance with the annual spending limit in California and is working to establish additional monitoring processes.

          The annual limit does not include the following:

          1. Samples given to physicians and healthcare professionals;
          2. Financial support for continuing medical education forums;
          3. Financial support for health educational scholarships;
          4. Payments for legitimate professionals services, and any meals or expenses associated with the provision of such services;
          5. Items of nominal value with a retail value of less than $10 (e.g., visual aids, reprints of medical journal articles);
          6. Patient educational materials provided to patients by their physician with the purpose of educating the patient or enhancing the patient’s understanding or management of the condition.

        • Cytori Declaration of Compliance
          To the best of our ability, Cytori has developed a Comprehensive Compliance Program which acts to prevent, detect and address potential and actual instances of non-compliance. As a medical device manufacturer, our Compliance Program is additionally designed in accordance with the voluntary AdvaMed Code of Ethics on Interactions with Health Care Providers. The AdvaMed Code is designed to ensure that the collaborative relationships between patients and healthcare professionals meet high ethical standards, are conducted with appropriate transparency and comply with applicable laws, regulations and governmental guidelines.

          Although government standards on compliance programs recognize that no single program can unequivocally prevent individual employees from misconduct, it is Cytori’s expectation that all employees, agents and contractors comply with all policies that support the Compliance Program. Cytori continues to review and update its Comprehensive Compliance Program periodically to incorporate modifications in policy as well as update processes and procedures. It is our belief that the current Cytori Compliance Program description above meets standards set forth by the state of California as well as applicable law.

          A copy of this declaration may be obtained by calling Cytori’s Compliance Officer at +858.458.0900

        • Closing
            At Cytori, we believe that the successful business operation and reputation of Cytori is built upon the principles of fair dealing and ethical conduct of our employees. Our reputation for integrity and excellence requires careful observance of the spirit and letter of all applicable laws and regulations, as well as a scrupulous regard for the highest standards of conduct and personal integrity.

            We are committed to maintaining the highest standards of business conduct and ethics. The Cytori Comprehensive Compliance Program outlined above reflects the business practices and principles of behavior that support this commitment. It is expected that employees provide their best faith effort in complying with guidelines to the best of their ability at all times.

            Last Updated: November 2, 2012
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