Forward Looking Statements

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Forward Looking Statements
Statements and financial projections in this
presentation about the Companys products,
including anti-IgE, and their prospects for
development and commercialization and about the
Companys potential commercial prospects other
than statements of historical fact, are
forward-looking statements and are subject to a
number of uncertainties that may cause actual
events or results to differ materially from the
statements made. Factors that could affect
actual events or results include risks associated
with the success of clinical trials and research
and development progress, the regulatory approval
process, competitive products, success of future
marketing programs, the outcome of litigation and
the strength of Tanoxs patent portfolio. Risks
that may affect the Company include timelines
that are subject to change, the unpredictability
of clinical trial results and the
unpredictability of decisions by the FDA and
other regulatory agencies, including decisions
regarding whether sufficient data and compliance
with other requirements exist to support product
licensure. Prospective investors should
carefully consider the information contained in
the Companys Prospectus and other SEC filings,
including the sections entitled PROSPECTUS
SUMMARY, RISK FACTORS, USE OF PROCEEDS,
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, BUSINESS AND
FORWARD-LOOKING STATEMENTS when evaluating an
investment in the shares of Common Stock offered
by the Company.
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Company Highlights

• Xolair Breakthrough novel therapeutic for
  allergic diseases
• Phase III trials completed
• BLA filed June 2, 2000
• Projected launch Q3, 2001
• Large target markets/unmet medical needs
• Attractive partnership with Novartis and
  Genentech
• Robust product pipeline
• Solid science/technology platform

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A Breakthrough Product
Xolair

• Anti-IgE antibody for asthma and allergies
• Partnered with Novartis and Genentech
• Completed Phase III clinical trials
• Met all primary and secondary endpoints
• with statistical significance
• Placebo-like safety profile
• BLA submitted on June 2, 2000
• Projected U.S. and EU launch Q3, 2001

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Large Rapidly Growing Markets
Xolair

• Asthma
• 17 million asthmatics in U.S.
• 8.5 million treated
• 4.4 billion was spent in 1999 on
• asthma-related drugs in the U.S.
• Allergic Rhinitis (hay fever)
• 39.5 million allergic rhinitis sufferers in the
  U.S.
• 2.7 billion spent in 1999 on allergic rhinitis-
  related drugs in the U.S.

Need for better therapies
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Targets Root Cause of Asthma Allergic
Diseases
Xolair
IgE
Xolair
Mast Cell
Mediators (Histamine, Leukotrienes,
Cytokines, etc.)
Flovent, Serevent, Claritin, Singulair and Zyflo
Bronchospasm, airway inflammation
Clinical Asthma
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How Anti-IgE Works
Xolair
How Anti-IgE Works
The Allergy Cascade
Ragweed Pollen
Plasma Cell
Anti-IgE
IgE
Plasma Cell
IgE
Mast Cell
Mast Cell
Histamine Release
No Histamine Release
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Asthma Allergic Rhinitis Substantial
Clinical Package
Xolair

• 16 clinical trials
• 1,950 patients (6 to 75 years)
• Substantial long-term follow-up

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Allergic Asthma Phase III Registration Trials
Xolair

• Adults, U.S. (525 patients)
• Adults, EU US (535 patients)
• Children (6-12 years), US (334 patients)
• Trial Design
• multi-center, double-blind,
• placebo-controlled, multiple-dosed
• inhaled steroid dependent adults
• 7-month, parallel group core trial followed
• by 5-month blinded extension
• Subcutaneous injections,
• 2 or 4 week dosing schedule

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Allergic Asthma Phase III Trials
Endpoints
Xolair

• Primary Endpoints
• Reduce number of exacerbations per patient
• Secondary Endpoints
• Reduce requirement of inhaled steroids
• Reduce rescue medication use
• Improve asthma symptoms and lung function
• Reduce number of patients experiencing gt1
  exacerbation
• Improve quality of life
• Long-term safety and tolerability

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Mean Exacerbations Per Patient
Xolair
plt 0.001 (58 decrease)
p 0.001 (52 decrease)
0.9
0.8
0.7
0.75
0.6
0.66
Mean Exacerbations per Patient
0.5
0.4
0.36
0.3
0.28
0.2
0.1
0
Steroid Reduction Period
Stabilization Period
(Study 009)
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Inhaled Steroid Use
Xolair
43
p lt0.001
p lt0.001
40
100
83
30
75
of Patients
20
50
Steroid Reduction
20
50
10
25
0
0
100 Steroid Withdrawal
Median Steroid Reduction
(Study 009)
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Hospitalizations Over 1 Year of Treatment
Xolair

• Number of patients with serious asthma
  exacerbations leading to hospitalization
• Placebo 19
• Xolair 2
• (Studies 008, 009 and 010 combined
  including extensions)

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Quality of Life
Xolair
plt0.025
1
Activities Emotions
Symptoms Overall Score

0.6

Mean Score Change From Baseline
0.5

0.5
0.5
0.45
0.2
0.1
0.1
0
0
(n169)
(n81)
Mean Baseline Score
(Study 010)
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For Uncontrolled Asthma and Allergy Patients -
New Hope
Xolair

• Improved disease control over standard treatment
  alone
• New class drug, targeting root cause of disease
• Efficacious in multiple allergic diseases caused
  by
• many different allergens
• No anti-Xolair response
• Convenient dosing schedule well accepted by
  patients
• Potential opportunity for disease modification
• Placebo like safety profile and well tolerated

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WABC Video
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Development Timeline
Estimated Launch in U.S. EU
Q3-2001
March August, 2000
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Partnership

• Novartis and Genentech
• all development costs in U.S. and Europe
• manufacturing
• share U.S. marketing rights
• Novartis responsible for ex-U.S. marketing
• Tanox receives 63.5 million
• milestones (18.5 million already received)
• Royalties and profit share

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Product Development Pipeline
Product Research
Preclinical Phase I Phase II
Phase III
Xolair (Allergic Asthma)
Xolair (Allergic Rhinitis)
Hu-901 (Severe Peanut Allergy)
E26 (Asthma, Allergy)
CD40 / 5D12 (Crohns Disease)
CD40 / 5D12 (Other Autoimmune)
CD4 / 5A8 (HIV/AIDS)
Factor-D / 166-32 (Acute Inflammation)
G-CSF / 163-93 (Neutropenia)
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Technology Foundation

• Discovery and design of novel therapeutic
  monoclonal antibodies for major disease targets
• Scientific know-how in immunology, infectious
  diseases and oncology
• Proprietary technology base of developing
  high-producing cell lines and manufacturing
  processes for biologics
• Novel screening assays for drug discovery

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Tanox Financial Highlights
YR/YR
(Amounts in thousands except EPS)
Revenues Net loss Loss per share Cash and
Investments Total assets Stockholders equity
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What Investors See Tanox Value

• A blockbuster drug to be approved
• Robust pipeline and discovery capabilities
• Experienced management team
• First class science and proven technology
  platform
• As a result, we went public successfully
• Tanox IPO netted 226 M, the biggest IPO ever in
  biotech industry
• Strong underwriters who believe us and commit
  market support before and after the IPO

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Strategies and Paths to Where We are Today

• Focused on developing high valued-added products
• Managed resources conservatively to minimize
  risks
• Committed and focused on what we believed and
  drove it all the way through commercialization
• Managed corporate alliances for the success of
  our prodouct
• Maintained organizational stability and
  hired/retained good people
• Held not to go public too early to maximize
  company value

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Lessons Learned

• Protect intellectual properties rigorously
• Balance risk against the desire to grow
• Develop around core capabilities with sharp focus
  on developing products
• Be decisive in decision making
• Foster entrepreneurial, innovative, and
  productive corporate culture
• Work with investors who have patience and share
  the companys vision and strategy
• Have a sound business plan before IPO

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Going Forward towards Integration

• Enhance and expand R D capabilities
• Develop and build commercial manufacturing
  capabilities
• Retain marketing rights on products that can be
  marketed by Tanox own sales force
• Acquire or license new product candidates
• Leverage on our core competency in antibody
  technology and apply functional genomics to
  enhance productivity in drug discovery and
  development

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Tanox Highlights

• Near Term Product Opportunity
• Addresses Multiple Disease Indications
• Large Unsatisfied Markets
• Robust Product Pipeline
• Strong Cash Position
• Experienced Management Team

TANOX, INC.