Pronai Therapeutics

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• Pronai Therapeutics
• Investment Discussion
• Team Maize
• November 30th, 2007

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ProNAi Outline

• Science
• ProNAi Mechanism of Action
• ProNAi Market Opportunity
• ProNAi Update
• ProNAi Deal Update

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SCIENCE
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Reference Glossary

• DNAA polymeric molecule made of
  deoxyribonucleotides, hence then name
  deoxyribonucleic acid. Most often has the form of
  a "double helix", which consists of two paired
  DNA molecules and resembles a ladder that has
  been twisted. The "rungs" of the ladder are made
  of base pairs, or nucleotides with complementary
  hydrogen bonding patterns.
• RNA A nucleic acid polymer consisting of
  nucleotide monomers that serves as the template
  for translation of genes into proteins,
  transferring amino acids to the ribosome to form
  proteins, and also translating the transcript
  into proteins.
• mRNA A molecule of RNA encoding a chemical
  "blueprint" for a protein product. mRNA is
  transcribed from a DNA template, and carries
  coding information to the sites of protein
  synthesis the ribosomes.
• Transcription is the process through which a DNA
  sequence is enzymatically copied by an RNA
  polymerase to produce a complementary RNA. Or, in
  other words, the transfer of genetic information
  from DNA into RNA. In the case of
  protein-encoding DNA, transcription is the
  beginning of the process that ultimately leads to
  the translation of the genetic code (via the mRNA
  intermediate) into a functional peptide or
  protein.
• Translation is the second process of protein
  biosynthesis (part of the overall process of gene
  expression).Translation occurs in the cytoplasm
  where the ribosomes are located.
• Gene The unit of heredity in living organisms,
  typically encoded in a sequence of nucleotide
  monomers that make up a long strand of DNA, or
  deoxyribonucleic acid. A particular gene can have
  multiple different forms, or alleles, which are
  defined by different sequences of DNA.
• Nucleotides The structural units of RNA, DNA,
  and several cofactors (A,C,G,T,U)
• Oligonucleotide Short sequences of nucleotides
  (RNA or DNA), typically with twenty or fewer
  bases
• Antisense Describes molecules that interact with
  complementary strands of nucleic acids, modifying
  expression of genes.

Source www.wikipedia.org
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Genes are critical in protein formation
1. Replication
2. Transcription
3. Translation
Nuclear Membrane
RNAi suppresses gene expression by targeting the
mRNA strand of nulceotides
4. Protein Function
Source Team analysis
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Malfunctioning proteins are implicated in a
number of diseases
Regulation
Structure
Signaling
Transport
Catalysis
Function
Examples

• Cell replication

• Bone, muscle and connective tissue

• Immune response
• Response to hormones

• Nerve transmission
• Ion channel transport

• Digestion
• In vivo reactions

• Cancer
• Sepsis
• Hypertension
• Hypercholesterolemia

• Alzheimers
• Muscular dystrophy
• Hair loss
• Osteogenesis imperfecta

• Cancer
• Atherosclerosis
• Autoimmune disorders (SLE, RA, Graves)
• Allergies
• Asthma

• Cystic fibrosis
• Parkinsons Disease
• Huntingtons Disease

• Digestive disorders
• Viral hepatitis

Disease
Source Team analysis
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There are many approaches to gene therapy for
oncology
Examples
Evidence
Approach
X

• Traditional cytotoxic chemotherapeutics

• CHOP
• Docetaxol

• In clinical use
• Low specificity ? toxic with many side effects

1. Replication
X
2. Transcription

• PNT100 (Pronai)

• DNAi

• Pre-clinical

X
3. Translation

• Antisense RNA

• Sirna
• Genasense

• Early clinical (Phase 1 and 2)

Nuclear Membrane

• Rituximab (RITUXAN)
• Tamoxifen
• Imatinib (GLEEVAC)

• Antibodies
• Hormonal therapy
• Small molecules

• In clinical use
• Higher specifity
• May not be curative, require chronic use

X
4. Protein Function
Source Team analysis
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ProNAi Mechanism of Action
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Working Hypothesis for MOA - PNT2258
Chromosome Translocation site 5 to BCL2 gene
Induction of ssDNA formation Primed Helix
PNT225X (single stranded DNAi oligo Lipid)
Induction of p53/Sp1 response
Apoptosis in Cancer Cell Not Normal Cell
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Pronais Approach DNAi

• Single-stranded complementary DNA
  oligonucleotides (amino acid chains) silence
  faulty genes
• Liposome encapsulated ? protects and delivers
  DNAi to nucleus
• Targeting specific DNA promoter regions or
  oncogenes (e.g. BCL2) known to be mutated in
  cancer
• Upstream targeting ? less toxicity
• 22 amino acids ? long enough to be specific
  (gt17), short enough to avoid problematic immune
  response
• In vitro and in vivo DNAi drug lead screening
  system (DNAi HiT)
• Bioinformatics-guided screening
• No expensive drug synthesis required for DNAi
  drug lead selection/optimization

Source Team analysis Pronai Investor
Presentation at JPMorgan Healthcare Conference
1/7/07
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The delivery mechanism is critical

• Liposome delivery mechanism SMARTICLES
• Supplied by Novasom (French, www.novosom.com)
• Proprietary technology for nucleic acid therapies
• Worked with Pronais Wendi Rodriguez (formerly
  with Esperion) to perfect lipid delivery
  ?application for joint patent for technology
• Questions regarding competitive risk?

They are negatively charged under physiological
conditions, but as the pH drops down to 5 or 4
during endocytosis, the vector surface becomes
neutral and eventually positively charged. This
unique property guarantees stable and
aggregate-free travel within the bloodstream, but
the acidification from endocytosis switches the
charge of SMARTICLES, leading to membrane fusion
and the escape of the cargo from the endosome.
Source Team analysis www.novasom.com
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Theory of DNAi Response

• Key Takeaways
• Mutated BCL2 gene implicated in cancer and
  multidrug resistance
• Oligonucleotide (22 aa long) specifically binds
  to mutated BCL2
• Genetic machinery detects altered chromosome ?
  apoptosis (cell death)

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DNAi - Drug Design and Concept
PNT2258 PNT100 (24-mer oligonucleotide) Lipid
delivery vehicle
Smarticle
PNT100
Systemic delivery nuclease protection
Target cell membrane fusion
BCL2 DNA sequence target
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Benefits of Pronais approach
The therapeutic Window is the difference between
the average effective dose and the average toxic
dose.

• High specificity and up-stream target
• Low dosage
• Optimal efficacy at 10mg/kg
• Improved Safety profile
• Up to 75mg/kg
• Superior Therapeutic Window
• From 520mg/kg
• Potentially curative
• Possible adjunct to many cytotoxic therapies

Note A wide therapeutic window is desirable,
though a narrow therapeutic window may be
acceptable in cancer therapeutics.
Source Team analysis Pronai Investor
Presentation at JPMorgan Healthcare Conference
1/7/07
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ProNAi Market Opportunity
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Future cancer incidence is in Pronais favor

• Certain cancers are expected to increase in
  incidence in 2020 breast, prostate, and
  colorectal
• Pronais first product (PNT225X) will target
  breast and prostate. Future products will target
  inflammatory deceases (RA) and other cancers
  (i.e. colorectal)

Source MarketResearch.com
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The projected market for novel nucleic-acid
therapeutics (like DNAi) is large
Factors that make nucleic acid based technologies
promising

• Improved specificity ? improved effectiveness
• Improved specificity ? less toxicity (fewer side
  effects)
• Changing paradigm that cancer should be managed
  not killed

Source MarketResearch.com
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Pronais DNAi technology may apply to an even
broader market

• DNAi is a platform technology that may have
  capabilities with not only other cancers, but
  also other diseases (i.e. HIV, RA, etc)
• Therefore, the nucleic acid based therapeutics
  market is much broader than cancer alone

Pronais DNAi products market potential
ultimately hinge around the success of the
technology
Source MarketResearch.com
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However, there are many competitors involved in
cancer therapeutics
Number of Agents/Pharmaceuticals per Category
Source MarketResearch.com
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And the pharmaceuticals market is highly
regulated, thus increasing risk, cost and time to
market
Pronai
Time
Risk
Note INDInvestigational New Drug Application
NDANew Drug Application Source
www.medscape.com Team Analysis
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ProNAi Update
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Early 2006 Screen ProNAi Therapeutics

• Recommendation PURSUE
• Company Description
• Dedicated to developing and commercializing a new
  class of therapies that target DNA to treat
  patients with cancer and other complex genetic
  diseases.
• Interesting Aspects
• First IND expected by first half 2007
• By acting at the DNA level, where only one or two
  copies of the gene exist per cell, treatment can
  be targeted more efficiently. With fewer targets,
  the activity of a DNAi drug is expected to last
  longer at lower doses, and reduce some of the
  toxicity issues prevalent with other marketed
  therapies. Additionally, DNA-related therapies
  will also be more cost effective to produce.
• Reasons for PURSUE
• Competition Upon first evaluation, there
  doesnt seem to be any other large players in
  this space
• LARGE market opportunity Lead candidate just
  months from clinic with multiple cancer treatment
  opportunities for blockbuster revenues
• Point of differentiation No unmet customer need
  Proposed product does not have unique advantage
  over existing CWS products

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Scientific Successes

• Established 2004 The DNAi Company
• Lead drug candidate PNT100 just months from
  clinic as Drug Product PNT2258 with multiple
  cancer treatment opportunities for blockbuster
  revenues
• Product business model with pipeline of six lead
  candidates PNT200 entering preclinical studies
  additional leads for revenue generating
  partnership opportunities
• DNAi solves the technical issues that have
  prevented the medical use of oligonucleotides
  Anti-tumor activity demonstrated in multiple
  cancers
• OBD 10-20mg/kg
• Initial indications Non-Hodgkins Lymphoma,
  Prostate Melanoma
• Successful Pre IND FDA briefing meeting April
  2006
• Preclinical efficacy safety studies completed
• MTD 75-100mg/kg
• IND-directed studies completed
• IND Submission Dec 2007

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ProNAi Summary Value Proposition

• Established 2004 The DNAi Company
• Lead drug candidate PNT100 just months from
  clinic as Drug Product PNT2258 with multiple
  cancer treatment opportunities for blockbuster
  revenues
• Product business model with pipeline of six lead
  candidates PNT200 entering preclinical studies
• DNAi-HiT provides ability to design additional
  leads for revenue generating partnership
  opportunities
• DNAi solves the technical issues that have
  prevented the medical use of oligonucleotides
• Can Do / Have Done It / Will Do It Again Team
• 13M invested to date (Apjohn, Grand Angels,
  Amherst Fund, Sigvion, MEDC, BRCC, Other
  Angels in MI)

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Lead Drug Candidate - PNT100/PNT2258

• Targets Bcl2 oncogene chromosomal translocation
  breakpoint region to drive apoptosis and reduce
  gene expression
• Anti-tumor activity demonstrated in multiple
  cancers
• OBD 10-20mg/kg
• Initial indications Non-Hodgkins Lymphoma,
  Prostate Melanoma
• Successful Pre IND FDA briefing meeting April
  2006
• Preclinical efficacy safety studies completed
• MTD 75-100mg/kg
• IND-directed studies completed
• IND Submission Dec 2007

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ProNAi Management Team Board

• Richard D Gill, PhD Signet Laboratories, Genome
  Therapeutics,
• President and CEO BTG, Unilever
• Robert Forgey Pfizer, Pharmacia-Upjohn,
• COO Searle, Monsanto
• Donald Anderson, MD Advancis, Aventis, Pharmacia
  Upjohn,
• CMO Baylor
• Patrick McGovren, PhD Pfizer, Pharmacia
• VP Preclinical Development
• Wendi Rodriqueza, PhD Novartis, Esperion
• VP Product Development
• ProNAi Board Don Parfet, Mina Sooch, Mike Pape,
  Richard Gill, Bob Forgey

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ProNAi Deal Update
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Financing Update

• Issue in April
• Could not close a full round of financing
• Possible causes
• Skeptical of technology
• Location! Location! Location!
• Management does not have a superstar
• This technology might not fit the portfolio
  profile of other VC
• Solution
• IND submission mitigates technology issue
• We will not invest unless until venture syndicate
  is closed
• Note Current termsheet is a down round to get
  investors. We can get in for cheap

Source Team analysis
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ProNAi - Financing Plan Status - Funding to
date 13M

• Series A Financing 2.5 M
• Angel Funds
• Venture Capital
• Convertible Notes from MEDC 5.0M
• Bridge Financing 5.55M
• Converts at Series B financing
• To take PNT2258 to IND submission
• Series B Financing 12M
• Anticipated closing Q4 07
• (Triathlon lead 3M)
• (Apjohn Ventures 1M)
• To take PNT2258 into the clinic
• Complete Phase I thru Phase IIa

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ProNAi 2008-2009 Milestones - Technology Update

• Publish/present PNT2258 preclinical data
• Demonstrate Phase IIa proof-of-concept efficacy
  data for PNT2258
• Advance PNT200 into Phase I clinical trials
• Determine MOA in oncology
• Validate DNAi-HiT platform/identify new drug
  leads
• Position company for major alliance or
  acquisition

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ProNAi 2007 to 2009 27.7M- Portfolio
Development/Use of Proceeds
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ProNAi Exit Opportunities

• Market comparables and growing interest in
  Gene-Silencing companies
• Merck acquisition of Sirna RNAi for 1Bn in
  Dec 2006
• Alnylam ALNY market cap over 1Bn in 4Q07
  (with Roche, Novartis, other partnerships)
• Dicerna, RXi, and Regulus launched by VCs or
  Niche Players in 2H07 at preclinical stage
• Pfizer acquisition bid for Coley for 160M in
  Nov 2007

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2007-2008 Wolverine Venture Fund Investment

• Recommendation Invest!
• Reasons
• Improved technology
• Animal studies successful
• Ready for IND submission and entrance into the
  clinic
• Finance issue mitigated
• Wont invest until syndicate is closed
• Getting in cheap!
• How much? 50,000 (our suggestion) -100,000
  (Minas suggestion)

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Discussion