NICOX Reliable technology or programed failure AnneSophie Berteloot

NICOX Reliable technology or programed failure ? Anne-Sophie Berteloot Marie Crétal Julienne Gombet Marion Stylemans 1

Safe Harbor This is an independent study performed by students from the Faculté des Sciences Pharmaceutiques de Lille The opinions expressed are our own and not necessarily those of Nic. Ox 2

Contents I) III) IV) V) Nic. Ox company overview Successes and failures Naproxcinod: the last hope? What about the financial health of Nic. Ox? Do we want to work at Nic. Ox? 3

NICOX COMPANY OVERVIEW 4

Nic. Ox in brief … § French Biotechnology Business company (Private placements: 8, 3 M€) § Location : Italian subsidiary US Headquarters Head office : Sofia Antipolis §Core expertise : nitric oxide-donating technology §Application : Drug discovery in the cardiometabolic and inflammatory domain § Nic. Ox’s products don’t target a « niche » but compete with drugs existing in huge markets. 5

Nic. Ox in brief … Corporate statut : § Founded in 1996 in France by Piero Del Soldato, Elizabeth Robinson and Michele Garufi § Chief Executive Officer : Michele Garufi § Public company IPO date : November 3, 1999; 33 million euros Listed on Euronext § 117 employees § Aim : « build itself into a fully integrated biopharmaceutical company » Strategy of development : Partnerships and co-development agreements with pharmaceutical companies 6

An idea … . N « NO-donating technology can bring clear medical and market benefits » « NO-donating drugs are more effective and tolerable than existing compounds » O …A technology concept Established drug + linker + -ONO 2 = Novel Chemical Entity Ester linkage 7

NO regulates biological functions Protects from Gastrointestinal injury ü Maintains mucosal blood flow ü Inhibits platelet adhesion Autoimmune system Anti-inflammatory Cardiovascular system ü Reduces blood pressure ü Vasodilatation Protects against oxidative damage Neurotransmitter 8

Endogenous production NO synthase (NOS) enzymes 3 isoforms: • • Inductible form (i. NOS) “Constitutive” forms - Endothelium (e. NOS) - Neurons (n. NOS) 9

Vascular mechanism of NO NO= key relaxing factor 10

NO in physiopathology When production of NO is impaired, or its bioavailability reduced, the following can result: • vasoconstriction inflammation • vascular hypertrophy and thrombosis stenosis These effects can lead to diseases and conditions such as: hypertension heart failure obesity atherosclerosis dyslipidemias diabetes (I+II) Commercial interest 11

Historical Timeline of Nitric-Oxide (NO) Discovery of NO 1772 NO is nominated « Molecule of the Year » 1987 1996 1992 NO is identified as endothelium-derived relaxing factor (EDFR) Nobel Prize in Medicine for « NO as a signaling molecule in the CV system » 2005 1998 Naproxcinod Phase III Translation of basic knowledge of NO into new medicines 12

INDUSTRIAL STRATEGY OF NICOX AND PARTNERSHIP 13

Industrial strategy of Nic. Ox : From a specialized biotech… Strong intellectual property Strong scientific « idea » License and codevelopment agreements with Pharma companies Development through CROs and contract scale-up / manufacturing The company : • minimal structure • high outsourcing level Research collaboration with world leading experts Strong management team “Focussed” and “lean” internal research structure 14

Industrial strategy of Nic. Ox … …To a fully integrated biopharmaceutical company In-house R&D programmes Fully integrated biopharmaceutical company Selective acquisitions In-licensing 15

Great and attractive communication Lien Nitric Oxid Knowledge Center 16

Nic. Ox Partnership 1996 1998 2002 2003 2004 2005 2006 1 st agreement License agreement with Pfizer and Merck 17

Nic. Ox: a large Pipeline 18

Nic. Ox clinical studies failures Phase I HCT 1026 (Alzheimer) 2002 2005 2003 Phase II AZD 3582 Nic. Ox Astra-Zeneca Phase III ongoing by Nic. Ox Phase II NCX 100 (Portal hypertension) Nic. Ox Axcan Phase II NCX 4016 (AOMI) Nic. Ox Bayer Phase II ongoing by Nic. Ox (Type 2 diabetes) Phase IIa NCX 1020 (COPD) Nic. Ox Topigen 2008 2007 Phase IIa PF-03187207 Nic. Ox Pfizer 19

NICOX PARTNERSHIPS Overview of the clinical studies 20

Collaborations with Pfizer in ophthalmology PF-03187207 a nitric oxide-donating prostaglandin analog Glaucoma - Phase 2 Partnered with Pfizer Inc First agreement signed in August 2004 for glaucoma New agreement signed on March 2, 2006 21

Elevated intraocular pressure is a risk factor for glaucoma which can lead to vision loss Xalatan® Latanoprost vs PF-03187207 (Pfizer, 2011) (Nic. Ox) 22

Nic. Ox/Pfizer sign Research, Development and Licensing Agreement 2004 Financial terms 24 august, 2004 Nic. Ox will receive: Pfizer should reveive: € 1 million in upfront A worldwide license on NO-Donating + compounds € 1 million six month later + € 32 million in future milestones + royalties 23

2006 agreement in ophtamology Exclusive rights to NO-donating technology in ophthalmology in multiple compound classes and indications Nic. Ox € 5 million upfront technology license fee € 23 million in 2006 € 15 million as equity investment € 3 million as research funding € 3 million in 2007 & 2008 Pfizer as research funding Option of a worldwilde exclusive licence “Total potential milestones >€ 300 million” 24

PF-03187207 in phase 2 clinical development March’ 07: First phase 2 Po. C study initiated in the U. S NAME PF-03187207 NO-donating prostaglandin F 2α analogs for glaucoma OBJECTIVES Compare the safety and efficacy of PF’ 7207 versus Xalatan 0, 005% PRIMARY END-POINTS change in diurnal intraocular pressure (IOP) at day 28 In 215 patients with primary open angle glaucoma or ocular hypertension 28 day randomized Dose-finding double-masked trial Parallel group STRUCTURE RESULTS highest dose of PF-03187207 showed ↘ 12% (1 mm. Hg) 25

PF-03187207 in phase 2 clinical development January’ 08: Second phase 2 Po. C study initiated in Japan CODE PF-03187207 NAME NO-donating prostaglandin F 2α analogs for glaucoma OBJECTIVES Compare the safety and efficacy of PF’ 7207 versus Xalatan change in diurnal intraocular pressure (IOP) at day 28 120 Japanese patients to be enrolled Primary End-points Structure Similar design to U. S. study August 2008 Pfizer won’t continue PF-03187207 26 development to phase. III

Collaboration with Topigen in COPD TPI-1020 novel anti-inflammatory respiratory drug candidate Respiratory disorders - Phase 2 Partnered with TOPIGEN Pharmaceuticals Inc. 27

COPD Chronic Obstructive Pulmonary Disease 28

Agreements details Canadian-based TOPIGEN • • the North American rights develop and market NCX 1020 Nic. Ox would receive - a 2 million Euros upfront payment + - Up to 52. 9 million Euros in milestones + - Commercial success fees in addition to a share in future revenues 29

Safety, Tolerability and PD Activity of Inhaled TPI 1020 Versus Inhaled Budesonide in COPD Patients CODE TPI 1020 NO-donating anti-inflammatory STRUCTURE 61 patients with Chronic Obstructive Pulmonary Disease Primary Outcome Measures: To determine general safety and the tolerability of inhaled TPI 1020 administered via Aerolizer™ in COPD patients. Secondary Outcomes Measures: To assess the effects of TPI 1020 versus those Results of budesonide on sputum neutrophil counts on Days 0 and 42 Reduction of neutrophils in patients expectorations Primary outcome on Safety and torerability is achieved No additional efficacity effects observed!! 30

Major license, development and co-promotion agreement with Merck in the antihypertensive field Agreement signed on March 21, 2006 Nitric oxide-donating antihypertensives Hypertension - phase 1 b Partnered with Merck & Co. , Inc. 31

Prototype compound NCX 899 - Significantly better Blood Pressure lowering in a validated model of hypertension 32

Merck agreement details € 9. 2 million in up front In 2006 € 279 million potential milestone • January 2007: € 5 million milestone • Initiation of toxicology studies on first development candidate selected • July 2007: € 5 million milestone • A series trials on the first drug candidate which is a phase 1 • dose escalating study in healthy volunteers ? ? 33

Nic. Ox pipeline ? ? 34

NAPROXCINOD: THE LAST HOPE ? Nic. Ox future blockbuster? Will it come in the market without a hitch? 35

Naproxcinod: A new anti-inflammatory agent Code Derived from AZD 3582 / HCT 3012 Naproxen Non-steroidal anti-inflammatory drug (NSAID) Mechanism: COX-1 and COX-2 inhibitor Indications: To moderate pain, inflammation and fever in Osteoarthritis, rheumatoid arthritis, ankylosing spondylitis, tendinitis, bursitis… Side effects: - Raise blood pressure in hypertensive patients - Gastroduodenal ulcers now generics, market = 13, 3 billion $ 36

Naproxcinod’s profile Code AZD 3582 / HCT 3012 Derived from Naproxen Structure: NONaproxen NO-donating gr Naproxen Class Indication Ester linkage Leading drug of a new class: CINOD (COX Inhibiting Nitric Oxid Donators) Phase III clinical trials completed Treatment of the signs and symptoms of osteoarthritis 37

Naproxcinod’s profile Expected benefits - At least as effective as Naproxen - No negative effects on blood pressure different from all NSAIDs - Better gastrointestinal safety Commercial - Future blockbuster: potential sales > $ 1 billion - Opportunity of the market in osteoarthitis benefits treatment … expected 38

Opportunity of the market § Osteoarthritis: > 70 M Patients in the US and in Europe § NSAIDs market > $ 12 billion / year § 40 % of people suffering from osteoarthritis are hypertensive § Significant opportunity for Naproxcinod since the withdrawal of Cox-2 inhibitor Vioxx® (Rofecoxib) from the market in 2004. Celebrex is now the only one NSAIDs promoted in the US § Most of NSAIDs raise blood pressure § End of patents for most NSAIDs: generics A need of an effective NSAID without negative effects on blood pressure 39

Naproxcinod’s history Positive results from phase III annonced by Nic. Ox Co-development with Astra-Zeneca $ 37 M 2003 mid 2009 2005 Different partnerships 1998 Naproxcinod Phase III Naproxcinod phase II: Disappointing results Astra-Zeneca cancels the deal Nic. Ox wants to pursue a phase III study 2007 2008 2010 Planned filling in Europe Planned NDA filling in the US Search for Partnering activities 40

Pharmacokinetics datas Esterases Ester linkage The lenght and chemical nature of the ester linkage can influence the rate of release of NO from the molecule 41

Intracellular Release of NO from NO-aspirin Method: Confocal microscopy 1)Human endothelial cells were loaded with a dye that becomes fluorescent on reaction with NO 2)Cells were exposed to NO-aspirin Results: POTENTIAL CARDIOPROTECTIVE ACTIONS OF NO-RELEASING ASPIRIN NATURE REVIEWS/DRUG DISCOVERY, volume 1, May 2002 42

Phase 2 study: AZD 3582 vs naproxen in osteoarthritis Objective Primary endpoints To evaluate the gastrointestinal safety and efficacy of AZD 3582 in patients with hip or knee osteoarthritis. The six week incidence of endoscopic gastroduodenal ulcers (diameter >3 mm) Design AZD 3582 750 mg n=970 Naproxen 500 mg a six week double blind randomised trial Placebo 43

Gastrointestinal safety Placebo: 0 AZD 3582: 9, 7% Naproxen: 13, 7% But the results didn’t achieve statistical significance (p=0, 07) 44

The Astra. Zeneca « Affair » 02/2003: Disappointing phase II results for Naproxcinod Nic. Ox’s action is incotable for 2 days Nic. Ox’s action collapse: - 85 % Nic. Ox is convinced of the efficacy and safety of naproxcinod and critizes the methodology used 09/2003: Astra-Zeneca ends the partnership Nic. Ox wants to pursue a phase III study (2005) 45

301 study (October 2006) Objective To evaluate safety and efficacy of Naproxcinod Primary endpoints - WOMAC* pain and WOMAC function subscales and patient’s global assessment - Safety focused on adverse effects and blood pressure *WOMAC = index assessing pain, disability and joint stiffness using a battery of 24 questions Design In patients with OA of the knee Naproxcinod 375 mg Naproxcinod 750 mg n = 918 Naproxen 500 mg 13 -week double-blind randomized trial Placebo 46

Results of the 301 study § High statistical significance for superiority to placebo (p<0. 001) Naproxcinod > Placebo But… Naproxcinod ≡ Naproxen Yes but…. For gastrointestinal safety: Naproxcinod ≡ Naproxen 47

Pooled analysis Objective To evaluate the profile of Naproxcinod on blood pressure, compared to placebo and naproxen (13 weeks) Primary endpoints OBPMs = Office blood pressure measurements collected at each visit to the treatment centers from the 3 studies 48

Pooled analysis Yes but… A significantly proportion of patients on Naproxcinod experienced an increase in SBP of 5 mm. Hg or more, compared to Naproxen Interesting for hypertensive patients but the others ? ? ? Is reduction of blood pressure sufficient to be a good commercial argument? 49

Naproxcinod’s differenciated profile 50

Will Naproxcinod come in the market without a hit? STRENGHTS • Reduces blood pressure OPPORTUNITIES • Interesting for hypertensive patients WEAKNESSES • Not more effective than Naproxen • No scientific communication on study results: credibility? • No direct confrontation Naproxen/Naproxcinod • Decrease in blood pressure not really convincing • Nicox cannot cope with commercialisation fees • Time of development • SMR evaluation: weak • No Economic interest compare to generics THREATS • FDA is reluctant to approve NSAID since CV problems with Vioxx, COX inhibitor as well 51

WHAT ABOUT FINANCIAL HEALTH OF NICOX ? 52

Financial revenues Market revenues: Initial Public Offering on Euronext Paris: € 33, 2 M((November 1999) Follow-on public offerings: September 2004( € 26 M), May 2006 (€ 45, 5 M), February 2007 (€ 130 M). Increase of capital € 15 M reserved to its partner Pfizer (June 2006) Private placements (€ 8, 3 M) % of shares Co-funders 53

Operational revenues Payments received under collaboration agreements with pharmaceutical partners ( € 52, 1 M) Agreements with Pfizer and Merck End of the collaboration agreements 54

Operating expenses 86, 4 Increase +++ in R&D expenses results mainly from the cost related to the phase 3 development of Naproxcinod 61, 3 24, 2 20, 9 16, 6 21, 4 36, 3 55

R&D expenses focused on naproxcinod (2007) 56

Nic. Ox loss 57

Nic. Ox : a speculative investment Astra. Zeneca deal Pfizer and Merck deals Naproxcinod results and share offer Termination of Astra. Zeneca deal 58

Nic. Ox : a speculative investment Historic chart : 1 year + 70%: agreement signed with Archimica for the production of naproxcinod Positive treasury New positive results for naproxcinod Financial crisis Less attraction for investors 59

Enough treasury? In thousand euros In 2010 ? ? ? ? « We currently believe that we have sufficient cash to finance the activities of the commpany until the end of 2010 » Eric Castaldi, Chief Financial Officer of Nic. Ox 60

Future time of Nic. Ox linked to Naproxcinod! Positive approbation for naproxcinod Takeover bid Partnership Is it realistic? Setback of naproxcinod Failure 61

SWOT Study If I were a pharmacist, I would / would not like to work in Nic. Ox and why ? Strenghts Weaknesses • Biotech = opportunity of quick • credibility of NO technology? progression • loss of € 74 million in 2008 • One product well-advanced in the clinical • A lot of failures in Nic. Ox pipeline trials • No liabilities Opportunities • positive approbation for the naproxcinod reflation of partnerships and takeover bid Threats • no scientific support • cessation of the partnerships 62

CONCLUSION 63

husband-to-be was too handsome to be real … 64

Special thanks We especially want to thank Guy Dausque, Ms Gras, Mr Tartar and Julien Samier for their help and the time they gave us Any questions? 65