PowerPitch Presentation

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mruszczy NEED LOGOS!!
Transition Therapeutics (TSX TTH)
Building a Sustainable Biotech Company
November 28, 2005
Western Investment Club Braga, Nensi, Co.
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Innovative Leader in New Therapies

• Business Strategy
• Mid-term value maximization ? develop
  high-potential technologies
• Advance compounds through Phase II
• Partner with major Pharma to develop long-term
  revenue streams
• Therapeutic Focus
• Diabetes ? insufficient insulin production 18
  million people
• Multiple Sclerosis ? failed traditional
  treatments 2.5 million people
• Hepatitis C ? super interferon USD 1 billion
• Alzheimers ? break-down of protein buildup 4
  million patients

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Role in the Industry Value-Chain
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Experienced CEO CRITICAL

• Dr. Tony Cruz
• Top Canadian serial entrepreneur
• Strong track-record (essential in junior biotech)
• Many biotechs and Angiotech Pharmaceuticals ?100
  M to 1.5 B
• Senior Scientist at Mount Sinai Hospital since
  1995
• President of the Canadian Arthritis Network until
  2001

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Strong Network of Contacts

• Board of Directors
• Tony Cruz (Chairman) 5 members
• Experience in major pharma (Merck, Pfizer,
  CIBA-GEIGY), Investment banking, Academia,
  Venture capital, Law
• Broad experience ? big network necessary
• Scientific Advisory Board
• - Member of the National Academy of Sciences,
  Director of the Banting and Best Diabetes Center
  at the Toronto General Hospital, Head of the
  Muttart Diabetes Center (U. Alberta), Professor
  of Microbiology, Massachusetts Institute of
  Technology, Director of the Division of
  Endocrinology U. Miami, Editor-in-chief of the
  journal Diabetes

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Mid to Long Term Cash-Flow

• 16 million in cash _at_ burn rate of 6-8
  million/year 2 years of cash
• May need to refinance earlier, new
  acquisition/RD (i.e. Protana)
• Valuation may increase with new technologies
• Current licensing deal with Novo-Nordisk for INT
• 48 million in development milestones
• Milestones expected in 2008 onward (cash-flow
  ? dilution)
• Additional commercial milestones royalties
  (10-15)
• Potential for new partners (i.e. IET) ? capital
  infusion
• Upfront payments milestones

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Sustainable Revenue Model
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Financial Model to 2011
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Biotech Market Time for a Renewal?
Nasdaq Biotech Index- 5 year
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TTH Valuation
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Diabetes INT GLP Technology

• E1-INT First regenerative therapy (re-grow
  insulin producing cells)
• GLP1-INT Best-in-Class (regulates blood glucose
  levels)
• Published in Nature ? top scientific journal
  credibility

New Cells
TTH Technology
Diseased Cells
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MS, HEP C IET Technology

• Super-interferon
• Better results, without toxicity
• Best-in-class MS product
• Best-in-class Hepatitis C product

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Alzheimer AZD-103

• New class of Alzheimers drugs
• Reduce amyloid plaques (pathogenic)
• Oral drug ? cross blood-brain barrier
• Proven effectiveness in animal model

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Lucrative IP/Pipeline High Potential
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Fiscal 2006 Development Pipeline
Valuation explodes past Phase III (Milestones)
Late Summer 06
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INT Market Novel Therapy
Effective islet cell regeneration therapies
could redefine the treatment of diabetes by
providing patients with a therapy that has the
potential to modify the underlying cause of this
disease
Current mkt size 3.73 B Grow to 4.56 B by 2025
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MS-IET Market Growing, Best in Class
MS-I.E.T. could become an option to the many MS
patients who are losing or have lost
responsiveness to traditional MS therapies and
whose only remaining treatment alternative is
chemotherapy
2.5 million people affected Growing market older
popln
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HCV-IET Market Growing, Best in Class
Give hope to the large population of hepatitis C
patients who have failed standard treatment
regimes and face long-term life-threatening
complications of the disease
45 of patient fail treatment 0.95B market
potential
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AZD Market New Therapy
The strong preclinical efficacy data with
AZD-103 supports the potential of this compound
to alter the course of Alzheimers disease
leading to an improved quality of life for
patients and their families
Market expected to double in 20 years (US 3.1B
to 6.2B)
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Partnerships for the Future?
Hepatitis C
Alzheimer
Multiple Sclerosis
Currently, no gold-standard treatment ? untapped
market
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Risk vs. Reward

• No product yet ? hopes
• High volatility ? sentiment
• Market risk ? competitors

• Strong CEO ? credibility
• Superior pipeline IP
• Sustainable business model

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Investment Thesis

• Strong company with real business model
  (critical for biotech)
• Needed diversification for portfolio (higher
  risk/return)
• Above average prospects within biotech ?
  under-valued
• Strong industry to be in long-term ? currently
  cheap
• Buy 3,000 shares _at_ C0.78 C2,340 (2 of
  portfolio)
• Our valuation 2.34 using dEPS (3x
  undervaluation)
• 12 month price targets 1.50, 2x (Orion) ?
  3.00, 4x (Dlouhy)

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Remember
Greed is Good