bioentrepreneurship: effective communications - selling your story

1

effective communications

selling your story

MaRS

BioEntrepreneurship

June 12, 2007

Wayne Schnarr

Senior VP, Life Sciences

The Equicom Group

Forward-looking statement

Certain information included in this document is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. For additional information with respect to certain of these and other factors, see the reports filed by the various companies mentioned in this presentation with the Securities Commissions of Ontario, Alberta and British Columbia. These companies disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document does not constitute an offer to sell or a solicitation of an offer to buy securities in the United States. No securities have been registered under the United States Securities Act of 1933, as amended or any state securities laws.

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always remember

what are YOU selling

to whom are YOU selling

what is the sales process

never stop selling

3

you are selling

or you are on the receiving end of sales pitches

every day

giving lectures

what are you selling

information, passion, ability to think

to whom are you selling

the students in the chairs


lectures plus

never stop selling

or they fall asleep or don’t attend

4

writing grant proposals

what are you selling

your intellectual capabilities

to whom are you selling

granting agencies


annual submissions

selling never stops

unfortunately not

selling your story to

the financial community &

the health care industry

5

the financial community

why do people invest in biotechnology companies?

to make money!

how do VCs make money from investing in biotechnology companies?

through an IPOthrough sale of the company

nobody invests in early stage biotechnology companies for a 10% ROI

“you have to show them the 10-bagger”- Michael Denny

biotech investors buy growth

based on the current and future sales of products and

services

approved products

growth of sales and earnings

no approved productsprogress in preclinical and clinical developmentindependent product validation by partners

6

biotech investors balance risk and reward

rewardmulti-billion dollar marketfirst-in-classbest-in-classcure

riskmarket riskclinical riskscientific risk

biotech investors balance risk and reward

rewardwhat are you selling?• a potential reward that justifies the current valuation• a potential reward that is large enough to allow an IPO or M&A transaction

riskwhat are you selling?• you are NOT selling a risk-free opportunity• that you clearly understand the scientific risk• that you can mitigate the clinical risk• that you understand the market risk

7

effective presentations:

PowerPoint 101

PowerPoint is on your computer –

which does not mean that you are an expert at creating presentations.

8

the presentation should:• be there for the audience, not for the presenter• be useful for multiple audiences• be useful both on the screen and as a handout• not contain every piece of information that is in your business plan• be about 30 slides for a general audience or introductory meeting• have a consistent format, colour scheme and font• be talked to or about, not read• use appropriate animal and human pictures• some slides transmit information

– critical slides SELL

powerpoint 101

what is the hunger?how big is the hunger?

no big hunger …no one cares

need expressed:

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what is the hunger?• what is the specific disease or medical condition• is there a specific subgroup that is being targeted• what are the currently approved drugs, if any, and what are their deficiencies• what is the unmet medical need

how big is the hunger?• be realistic• not every potential patient gets diagnosed or treated• use patient numbers from independent sources• use sales of currently approved drugs where applicable

need expressed

100% validation

<10% validation

Stent Graft

• 400,000 CABG procedures annually• 10 to 20% complications: expensive and life

threatening • 7,000 TMR procedures

• Potentially 30,000 with SPY System

Real-time Cardiac Imaging System

JAMA report on graft failure• Up to 30% of vein grafts used in heart bypass

surgery fail at one year or less

12 peer-reviewed journals - 2000 patient data• Improves clinical outcome: 5 - 8% revisions• Equivalent to X-Ray angiography in real-time

Opportunity and Unmet Need

10

Opportunity and Unmet Need

Real-time Vascular Imaging System

• US Market– 300,000 plastic and reconstructive surgeries– 60,000 solid organ transplants– 100,000+ tumor margin detection

• 30% of breast reconstructive surgeries may experience complications

• Poor perfusion: #1 contributor to complications and failed procedures

• No other practical method of assessing tissue or organ perfusion

Coronary Heart Disease

20%of all deaths

oneNumber

killer!

11

54 millionlow HDL

Americans with

There are

Top 3 drug categories 2004 annual sales

5 blockbuster

Cytostatics(Cancer)

Antiulcerants(GI tract)

Cholesterol & triglyceride

reducers

World’s Largest Drug Market

drugs$23.8B

$25.5B

$30.2B

}

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23| IPO presentation | iCo Therapeutics

Nothing disruptive

No blockbusters

The Old Ophthalmic World Order

Allergan & Alcon



efficacy in treating wAMD 2006 F2007

Decimated incumbent therapies

Revenue

95%

Now Lucentis is a Big Success

*Source: Genentech documents and Rodman & Renshaw analyst reports

$940 million*

$380million*


13


targets one growth factor (VEGF)

monthly injections to retain efficacy

Lucentis is a big success, but it is not over

Only Requires



wAMDis not

Our Focus is DME

DME(diabetic macular edema)

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wAMD DME

VEGF bFGF IGF-I EPO HGF integrins

wAMD vs DME

Acute event

Elderly

Disease progression

Average onset

Gradual deterioration

Working years

Predominantly VEGFPathology


Proliferation of new blood vessels in PDR

More blood brought to area

Vessels are permeable

Blood leaks into retina area

Causes swelling & deformation of retina

DME: Leaking Vasculature at Back of Eye


15


Normal Retina Retina with DME

DME: Disease State


• Even well-timed and adequate laser treatment only effectively controls edema in 50% of patients with CSME and repeated laser therapy (more than three or four treatments) is contraindicated dueto cumulative destruction of the visual field. Patients with diffuseor cystic macular edema tend to have a poorer response to laser.

• Kenalog is gaining usage in these patients, and those with vitreous traction are candidates for vitrectomy.

Kenalog or Vitrectomy

Laser Photocoagulation

Unsuccessful

Successful

DME1.6 MM pts

DR5.3 MM pts

Recurrent

Kenalog or Vitrectomy

DH Insight Briefing – Ophthalmology | November, 2005 pg. 44

DME Treatment Options are Currently Limited

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T S X : M S

Inappropriate immune attack on the protective coating (myelin) surrounding the nerves of the brain and spinal cord

MBP8298 suppresses immune attack at the most common molecular target

Multiple Sclerosis (MS)

T S X : M S

Geography Genetics

of all MS patients have HLA-DR2 or HLA-DR4 genes (our responder group)

75%up to

MS Susceptibility Factors

2.5 million patients

T S X : M S

DR2/DR4

DR2/DR4

DR2/DR4

32

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T S X : M ST S X : M S

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T S X : M SMS has Two Major Populations

MBP8298 Phase II trial

MBP8298 Phase III trials

Market40-45%of MS patients

Market40-45%of MS patients

Relapsing Remitting MS(RRMS)

Secondary Progressive MS (SPMS)

50% convert in 10 yrs

90% convert in 25 yrs

18

T S X : M SMS has Two Major Markets

US$5.8B current market

Blockbuster market potential



~500,000 treated patients annually of >1 million patients

Few patients treated of>1 million patients

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T S X : M SMS has Two Major Markets

Approved ProductsBiogen Idec: Avonex®

Bayer Schering Pharma AG: Betaseron®

Teva: Copaxone®

Merck Serono S.A: Rebif®

Biogen Idec/Elan: Tysabri®



US$5.8B currentmarket

Approved ProductsBetaseron® (No proven delay in progression, only approved with relapses)Novantrone® (Cardiotoxicity limits use to 2 – 3 years)

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Blockbuster market potential

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B R E A K I N G T H R O U G H

6 millionpatients in the worldAnnual incidence: 700,000

arrhythmias 1 in 4 adults will get AF (age 40+)

* Wang et al. Circulation: Journal of the American Heart Association. August 2004.

AF Incidence


Current treatment drawbacks

drugs heat ablation

treats symptoms only

30 – 60% effectivenessdiminishes over time

serious side effects

used in <3% of casesonly when drugs fail

high procedural risks:PV stenosisThrombosisEsophageal perforation

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Healthcare ramifications and risks

1

2

3

4

>15%

>20%

415,000 (U.S.)

US$6.6 billion

leading cause of stroke

leads to chronic heart failure

leading cause of hospitalizations

cost to healthcare

* Donald M Lloyd-Jones, Md, ScM, FACC. Medscape Cardiology 8 (2). 2004.

no practical solution!

AF Business OpportunityUntreated Pool New Cases/Year

2.2 million 160,000

2.1 million 145,000

4.3 million 305,000

>$2 BillionAnnual Business Opportunity

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solution to the hunger -

the valueproposition

need addressed:

what is your product?• type of drug, device, diagnostic• what is the mechanism of action

what is the value of your product?• the value is in the data• human data is more valuable than animal data• if you have human data, eliminate or minimize the animal data• consider the audience when assessing the complexity and presentation of the data being used

need addressed

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Neuradiab Survival Data

Clinically compelling difference

42%

1980 to

2004

2005

91Surgery + Radiation + Temozolomide + Neuradiab

Surgery + Radiation + Temozolomide

Surgery + Radiation

Survival in weeks

75604515 30 105900

weeks

43

64weeks

53weeks

iCo–007for the treatment of

DME

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iCo-007: Method of Action (MOA) - VEGF Plus

Signal through c-Raf

Growth factors

initiate signal

c-Raf

Retina


VEGF

HGF

EPO


iCo-007: MOA - VEGF Plus

iCo-007 inhibits the production of c-raf, thereby preventing the signaling of growth factors, which in turn prevents the production of new and permeable blood vessels

Growth factors

Modulatesignal

Retina


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iCo-007: MOA - VEGF Plus

iCo-007Inhibits c-Raf production which prevents cell growth and permeability

ribosome

The production of c-RafSignal pathway Signal pathway interrupted

The inhibition of c-Raf

mRNA



c-Raf immunostainingof porcine eye

107189Treated

Control

120

100

80

60

40

20

0Saline D7

34μgD7

180μgD14

180μg

% Saline Control

Preclinical Evidence: Inhibition of c-Raf


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Preclinical Evidence: Inhibition of new blood vessel growth in mouse eye

Saline 14μg ISIS 15770


Single intravitreal

injection

Preclinical Evidence: 3 month dosing achievable

(90 μg)

Half life

44 days


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T S X : M SMBP8298: Overview

* Based on previous clinical trial results

IV ’push’ every six monthsConvenient administration

Synthetic peptide for specific responder group (up to 75% of MS patients)

Designer drug

Delayed median time to progression for 5 years in responder groupLong-term efficacy*

Epitope-specific tolerance, not general immunosuppressantUnique mechanism

Side effect: minor injection site irritationVery safe*

Indications: SPMS & RRMSOnly novel agent for SPMS in Phase III trials

T S X : M ST S X : M S

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MBP8298 slows the progression of MS

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T S X : M S

Analysis of CSF autoantibodies guided development• RRMS: Autoantibodies detectable only during relapse events• SPMS/PPMS: Autoantibodies continuously present – useful indicator of drug effect

Drug concept: Induction of antigen-specific tolerance• Observed in early vaccine development• High dose intravenous administration of soluble antigen

MBP8298 was designed to replicate the most common antibody target• IV administration suppressed CSF autoantibody levels in most patients• HLA-DR2-restricted T-cells target the same sequence

HLA-DR genes• Direct the fine specificity of immune responses • HLA-DR2 and -DR4 predispose to MS and make up the majority of patients• Easy genetic test for HLA type

MBP8298: Drug discovery/ development for progressive MS

T S X : M SMBP8298 Replicates the Myelin Target

MBP829817 amino acid peptideIdentical to the natural

sequenceBlood Vessel Blood Brain

BarrierNerve Fiber

T-cells & B-cells from immune system attack 82-98 portion of myelin in HLA-DR2 (and other) patients1

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T S X : M SMBP8298 Treatment Induces Tolerization

Blood Vessel Blood Brain Barrier

Nerve Fiber

MBP8298synthetic peptide identical to dominant site of immune attack

500mg dose every six months

“Classic” Tolerization Principle:

“Reverse” of vaccination

Established in vaccine research 50+ years ago

Shown to cure or prevent EAE animal models of MS

2

T S X : M SImmune System is Tolerized

Tolerization Result:

Eliminates antibodies to MBP8298 for six+ months

Requires dose every six months

Clinical delay in disease progression

Blood Vessel Blood Brain Barrier

Nerve Fiber

3

4

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T S X : M SPublished Efficacy Results

“Long-term follow-up treatment and assessment of patients in this responder group showed a median time to progression of 78 months for MBP8298 treated patients compared with 18 months for placebo-treatment (Kaplan–Meier analysis, P = 0.004…)”

T S X : M SFive Year Delay in Progression

Placebo18 months MBP8298

78 months

Phase II Trial: Kaplan-Meier Analysis of HLA-DR2 and/or DR4 patients at 84 Months

% N

ot P

rogr

esse

d

Endpoint: Time to 1st confirmed progression on EDSS

MBP8298

Placebo

20

40

60

80

100

0

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Insulin - Exploding Demand

2006

2012

6,000 kg

16,000 kgWho is going to fill the gap?

Company estimates 13

Fermentation is One Alternative

$

4 to 6 yearsLong lead times

2006: 6,000 kg of insulin

2012: 16,000 kg of insulin

1 (est.)Capital invested in existing manufacturing plants

2.5XMore capital required

B.2

14

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Supplying World Insulin Demand

15,0003 commercial farms

Supplyfor the entire planetin 2012

15

acres or

1 commercial farm

1 mile

0

Economics of Plant-Produced Insulin

insulin expression oftotal seed protein

acre produces 1 kg of insulin

acres to supply 2012 projected insulin demand

est. capital cost for 1,000 kgof plant-produced insulin

Enabling technology to meet insulin demand

% Capital cost reductioncompared to fermentation

1.2 %~1.015,000$80M

Floret Seed

Safflower

16

7

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Insulin - Chemical Equivalence

Safflower-derived insulin:Molecular mass 5807 Da

Safflower-derived insulin:

• chemically equivalent to commercially-available human insulin

• folds identically to commercially-available human insulin

V8 protease fingerprinting

Commercial pharmaceutical-grade insulin:Molecular mass 5807 Da

Electrospray Mass Spectrometry

17

Insulin - Functional Equivalence (mouse)

Saline

USP Insulin (pharma grade standard)

Insulin (Humulin® R-Eli Lilly)

Insulin (SemBioSys)

Safflower Insulin Tolerance Test

18

error bars = +/- SEM20

40

60

80

100

120

0 50 100 150Minutes Post Injection

% In

itial

Blo

od G

luco

se

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the action plancreating value:

you have already sold them:• the unmet medical need• the value proposition

what is left to sell them?• that you can increase the value of the product by appropriately spending their money

action plan

34

Reversesplaque build-up

Regulatory Path

There is a clear

Conclusions from the meeting:

• Insulin can follow the abbreviated 505(b)(2) rule

• First human trial will be a Phase II for pharmacokinetics & pharmacodynamics

• 50 subjects, 1 month study

• Second human trial will be aPhase III for longer-term safety

• 500 subjects, 6 months, 2 arms safflower insulin and Humulin®

• 500 subjects, 6 months, 1 arm safflower insulin only

• No special regulations related to plant, QC/OA requirements cover all host related issues

safflower-derived insulin

Met with the FDA for a pre IND consultation in October 2006

processregulatory

for

19


- 6 month follow-up

- Open label

- Secondary efficacy endpoint

Dr. Philip RosenfeldMiami FL

Trial Design

- 15-30 patients

- Single administration

- Ascending dosage

- 3 planned centres

Dr. Scott CousinsDurham NC

Dr. David BoyerBeverly Hills CA

35


In-license

Initiate Phase 1

- 15-30 patient trial

- Dose escalation study

Phase 1Results P2

Out License

iCo-007: Achievements and Milestones

H22007

H22008

H22005

Safety

H12007

- IND Accepted

- Manufacturing scale-up

- License from ISIS- World wide rights

- All therapeutic indications

- Minimal upfront payment- Back-end loaded milestones

- Royalty rate doesn’t impede partnering

NDAP3

T S X : M SOngoing Clinical Development

MAESTRO-01Pivotal Phase III SPMS trial – Canada and Europe

• Powered for HLA DR2 & DR4 responder group• Placebo-controlled, double blind, 2-year treatment period• Recruitment is complete

• Includes approximately 550 patients • Interim analysis: mid-2008

MAESTRO-02Open-Label, Follow-on Portion to MAESTRO-01

• After patients have completed 2 years of treatment in MAESTRO-01, patients may chose to receive MBP8298

• MAESTRO-02 will primarily evaluate long-term safety • Support regulatory submissions

36

T S X : M SOngoing Clinical Development

MAESTRO-03Pivotal Phase III SPMS trial – United States

• Received FDA clearance to proceed with pivotal phase III• Placebo-controlled, double blind, 2-year treatment period• Powered for HLA DR2 & DR4 responder group• Up to 510 patients

MINDSET-01Phase II RRMS trial – Europe

• Fifteen month, double-blind, placebo-controlled • Up to 215 patients from 30 sites• Followed by 12-month active treatment open label extension

period

T S X : M S

LeadInvestigatorsDr. Mark FreedmanOttawa General HospitalCanada

Dr. Carolyn YoungThe Walton CentreClinical Trials CentreLiverpool, UK

Dr. Tomas OlssonKarolinskaUniversitetssjukhuset, SolnaStockholm, Sweden

Professor Hans-Peter Hartung Neurologische KlinikHeinrich-Heine-UniversitätDüsseldorf, Germany

MAESTRO-01 Phase III SPMS TrialT S X : M S

Trial sites around the world

Canada & Europe• 48 trial sites• 10 countries

72

37

T S X : M STarget Clinical Timelines

2007 2008 2009 2010 2011

MBP8298 Timelines

Phase III SPMS Trial MAESTRO-01

Phase III SPMS Trial (US Trial)

MAESTRO-03

Phase II RRMS Trial MINDSET-01

Trial Data Analysis & submission

Enrollment TrialRegulatorySubmission

Open Label Extension

Trial Completion

Phase III Trial

Interim Analysis

Data Analysis & submission

Data Analysis & submission

Interim Analysis

Enrollment Trial

T S X : M SNear-Term Milestones

Interim analysis in MAESTRO-01 trial (mid-2008)

Initiate enrolment in Phase III MAESTRO-03 trial in United States (mid-2007)

Complete enrolment in Phase II MINDSET-01 RRMS trial in Europe (mid-2007)

Completion of MINDSET-01 Phase II trial (mid-2008)

Potential Partnerships

38

Milestones

Q3 2005 Q4 2005 Q1 2006

X

X

X

X

X

X

U.S. sales partner

Installed in 25 U.S. hospitals

Initiate studies for expanded indications

Initiate North American multi-centre trial

Initiate combo trial with multi-national partner

File for Canadian and European approval

SPY System

OPTTX System

Pipeline Strategy & Corporate OverviewReal-time medical imaging in the

operating room

39

Real-time Image Guidance in the Operating Room

Pipeline Product Strategy

Design / POPFDA Clearance

Trialsfor FDA

Market Development Launch

Install base in US 70+ devices

Install base in US 150+ devices

Launch H2-07

Launch H1-08

Launch 2008

Launch H1-08

FDA clearance

Q3-07

Human POP

Human POPH2-07

Human POPH2-07MINI

Other Urological Procedures

Prostate

Plastic / Recon / Transplant

TMR

Cardiac

SurgicalUrology

FDA cleared Q1 2007

Health Canada Approved

MIS

$900 million

Recurring revenue model

Average kit price $700Cost of goods $200

Marketed products opportunity &


$600MM+860,000 / year $250MM*

400,000 / year$50MM*60,000 / year

*Selling Price Country-specific

40

$1 Billion


$700MM1,000,000 / year $250MM*

400,000 / year$50MM*60,000 / year

Pipeline product opportunity & MINI

Recurring revenue model

Average kit price $700Cost of goods $200

*Selling Price Country-specific

Structure: Newly Diagnosed GBM Endpoints

Multi-Center Pivotal Trial Design

Randomized1 arm is standard of care1 arm adds Neuradiab as adjunct therapy

310 patients per arm30-40 sitesLarger than Temodar study

PrimaryOverall SurvivalFinal analysis at 456 events

Secondary1 and 2 year survivalProgression-free survival

11

Multicenter

Exploratory AnalysisPotential to see incremental benefit in non-Temodarresponders

80

41

FDA consultation CRO selection

CRO selected by Bradmerfor Phase III trial

Prologue Research International

Oncology specialist; former oncology clinical op’s team from Pharmacia-Adria

Big pharma and biotech clients

Experience with radiopharmaceutical trials

1181

Trial Design Recent Events

FDA approved Bradmer’s plan for Phase III trialNovember 2006End of Phase II meeting

Q2 2007Final protocol and manufacturing data to be submitted

Laureate Pharma MDS Nordion

cGMP Manufacturing – Transition to Commercial

Antibody Producer Radiolabeling Partner

1182

Status Report:Antibody scale-up complete

Sufficient supply to complete Phase IIIcGMP antibody product completed in January

> 2 dozen successful equivalence testsFinal formulation, optimization of radiolabel process ongoing at NordionClinical trial material to be released mid year

82

42

Neuradiab Pivotal Trial Timeline

2006 2007 2008 2009 2010

Trial Preparation Mfg / FDA / Site

Prep / Svc Providers

Trial LaunchMid 2007

Enrollment Complete

2011

NDAsubmission

License from DukeQ4 2005

Full DataAnalysis

83

“Open Label” Trial

can you do it all in a few slides?

yes!

43

PAC-113

Uncontrolled Infectious Disease

Healthy State Immune Compromised

Immune system controls growth of resident

fungus and bacteria

75%present in up to

of the population

Impaired immune system permits attack by resident

fungus and bacteria

High probability of recurrence

Patients being treated for cancer and diabetes

30% of asthma patients treated with corticosteroids

90% of AIDS patients (and up to 43% of HIV patients)

Oral CandidiasisCandida albicans

44

Current Treatments Deficient

Current treatments are ineffective, cause drug resistance, cause severe side effects

A novel, safe and effective treatment has the potential to generate US$300 – US$400 million per year worldwide.

Amphotericin BSystemic

Severe side effects

NystatinTopical

52% efficacy

AzolesSystemic/Topical

Potential for resistance

Fighting Infectious Disease: PAC-113

Based on natural antimicrobial peptide occurring in saliva

PAC-113, delivered as mouthwash, binds to fungus surface and kills quickly

Highly active against Candida, greater than 95% efficacy in vitro

45

Four safety and efficacy trials completedIndication: gingivitis (gum disease)300+ patientsConducted in the U.S. by Periodontix Inc.

Safety Established Clinically

Well tolerated

No drug related adverse events

Dose related improvement in clinical endpoints

PAC-113 Clinical Strategy

Initiated Phase I/II trial

Q1-06

Results from Phase I/II trial

Q1-07

Initiate dosing in Phase II trial

Q3-07

Clinical objectives:Safety and tolerability

Efficacy in eliminating or reducing clinical signs and symptoms of infectionMicrobiological response

PAC-113 NystatinHead to head comparisonRandomized, examiner-blinded, parallel design

44 HIV patients per arm

14-day treatment phase 14-day follow-up period day 28 follow-up visit

46

Significant Market Potential

– C. albicans– C. glabrata– C. parapsilosis– C. tropicalis

90% of all AIDS patients30% of asthmatics on steroidspatients on chemotherapy /

radiation

US $300-$400M US $1.6B

Treatment of topical fungal infections

Treatment of oral candidiasis

PAC-113 has demonstrated activity against:

PAC-G31P

47

Uncontrolled Immune Response

Healthy State Diseased State

1.Pathogens induce an inflammatory response by the immune system

2.One component of the inflammatory response is neutrophilinfiltration

3. Excess neutrophilscan create serious medical complications

ARDSAsthmaCOPD

Pneumonia

Regulating Immune Responses: PAC-G31P

Cytokines bind to CXCR1 and CXCR2

receptors, attracting and activating

neutrophils

PAC-G31P closely resembles cytokines and blocks CXCR 1/2

cytokine

neutrophil

CXCR1

CXCR2

48

Low

dos

e PA

C-G

31P

Endo

toxi

nco

ntro

l

PAC-G31P Effective in Animal ModelsN

eutr

ophi

lco

unt

30

0

15

October 2005, The Journal of Leukocyte Biology

Nor

mal

ani

mal

Hig

h do

se P

AC-G

31P

PAC-G31P Clinical Strategy

Currently manufacturing clinical materials

Proceed with preclinical toxicology work for systemic administration

Proof-of-concept clinical study in Asia in 2007 in collaboration with a third party

Start North American Phase I single dose clinical trial in healthy volunteers by the end of 2007

Manufacturing

Ongoing

Toxicity Study

H1-07

Asian Clinical Study

H1-07

North American Ph. I

H2-07

49

Markets

ARDS:– Mortality is 30% to 40%– No approved drugs for prevention or treatment

Asthma:– 1.8 million emergency room visits in 2004– Total cost to the U.S. in 2004 was $16.1 billion

COPD:– 4th leading cause of death in the U.S.– The cost to the U.S. in 2004 was in excess of $37 billion

150,000people affected

annually in the U.S.

10.7 millionAmerican adults were believed to have COPD (2003)

COPDARDS20.5 millionAmericans were

estimated to have Asthma (2004)

Asthma

are you finished selling?

never!

50

don’t stop selling

What is left to sell?managementboard and other advisorsintellectual propertymanufacturingquality of current shareholdersfinancial situationexit opportunitiesinvestment highlightsetc.

Product Pipeline

OTC / Topical RxStratoDerm™

DHA Rich Oil

GLA Rich Oil

ImmunoSphere™

DermaSphere®

Apo AI

Insulin

Nutritional supplements

Nutritional supplements

Animal health

Personal care

Atherosclerosis

Diabetes

2008

2010

2014

2008

2010

Non

-pha

rmac

eutic

alP

harm

aceu

tical

Class Product Indication Launch

2008

35

2005

51

Corporate Overview

36

Established: 1994: Spin out –University of Calgary

Stock Market: TSX: SBS.TO

Market cap: $67MM

Cash: $28.8MM (31/03/07)

Burn rate: - 2006: $1.0 MM per month- Cash to early 2009

Employees: 65 (19 Ph.D.s)

Board of Directors

Richard Smith (Chairman) Former President & CEO Dow AgroSciences Canada, Inc.

Andrew Baum Director, President & CEOSemBioSys Genetics Inc.

Alexander R. Giaquinto, Ph.D. Former, Sr. VP, Global ComplianceSchering-Plough

Douglass Given M.D., Ph.D. Partner, Bay City Capital

Nancy Harrison Former Senior VPVentures West Management Inc.

David Howard ChairpersonAngiotech Pharmaceuticals, Inc.

37

52

Patents

Protecting the platform11 U.S. patents and applicationsProduction of recombinant proteins in plants using the oilbody-oleosin technology platform

Protecting the tools8 U.S. patents and applicationsTools and techniques to make our products

Protecting the products16 U.S. patents and applicationsComposition of matter, manufacturing method, and method of use claims directed to formulations comprising oilbodies

As of January 12, 2007

patents issued(19 U.S.)

patents pending(16 U.S.)

139

139

38

Upcoming Milestones

39

Initiation of new pharmaceutical product development program Complete Dermasphere Facility and begin full scale manufacturing and salesExecute commercialization plan for ImmunoSphere™product and launch in Q1 2008

Other

Q3 2007 Q3 2007

Q2 2007 - Q1 2008

Animal Data in Model System – ArabidopsisAchieve commercial levels of Apo AI expression in safflowerPartnership Opportunities

Apo A1Q3 2007Q3 2007Q4 2007 - Q2 2008

Submit insulin IND to FDA Initiate Phase II trials with completion by Q2, 2008Partnership Opportunities

Q4 2007 Q1 - Q2 2008Q2 - Q4 2008

Insulin

53


Vancouver, BC, CanadaHead Office

$600,000 monthBurn-rate

$2.7 millionCash on Hand

$7.5 millionRaised to Date

2005Founded

Corporate Data


Andrew Rae, MBAFounder & CEO

John Clement, PhDFounder & Chief Technical & Development Officer

Santa Jeremy Ono, PhDChief Scientific Officer

Peter Hnik, MD, MHSc.Chief Medical Officer

John Meekison, BA, CIM, P. Log.Founder & Chief Financial Officer

Sidney Himmel, CAChairmanPresident and Chief Executive Officer, Trigon Uranium Corp.

William Jarosz, JDCartesian Capital Group, LLC

Richard Barker, PhDDirector General of the Association of the British Pharmaceutical Industry

Richard GlickmanCo-founder, CEO and Chairman, Aspreva Pharmaceuticals

George Lasezkay, JD Principal, Turning Point Consultants, LLC

Julia Levy, PhDCo-founder of QLT

Alan C. Bird, MDEmeritus Professor, UCL

David Boyer, MDRetina-Vitreous Associates Medical Group

Philip Rosenfeld, MD, PhDProfessor, Bascom Palmer Eye Institute, University of Miami, School of Medicine

Jason Slakter, MDClinical Professor, NYU School of Medicine

Non-Executive Directors Strategic Advisory Board

Extensive public company and life science experience | Solid operational and product development expertise | Ophthalmic specific expertise

Management and Directors

Management

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PfizerEyetech(wAMD)

NovartisGenentech(wAMD)

BayerRegeneron(wAMD)

MerckSirna(wAMD)

NovartisQLT(wAMD)

AlconAmgen(Ophthalmic Therapies)

PfizerAngiosyn(wAMD)

AllerganSirna(wAMD + other ophthalmic diseases)

OSIEyetech(wAMD)

Hot Therapeutic Arena


Investment Highlights

Very attractive valuationManagement team / advisory board with extensive ocular experience

Initial market - $100 million potentialPhase 2 commencing now

iCo 008 targets multiple indications

>$1 billion potential Phase 1 commencing now

iCo-007 has large market/blockbuster potential

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An example

Investor Presentation

June 2007

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Forward-looking statement

Certain information included in this document is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. For additional information with respect to certain of these and other factors, see the reports filed by ARIUS Research Inc. with the Securities Commissions of Ontario, Alberta and British Columbia. ARIUS Research Inc. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document does not constitute an offer to sell or a solicitation of an offer to buy securities in the United States. No securities have been registered under the United States Securities Act of 1933, as amended or any state securities laws.

“The mission of ARIUS is to discover and develop the next wave of antibody drugs to

address the needs of patients and physicians for safe, effective treatments.”

Breakthrough antibody drugs

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Hitting a target doesn’t guarantee success

1000’s of high affinity Antibodies have been identified

In the last decade,

only ~20 havebeen approved and

successful

There is a target within the target

The desired effect (cell death / cell signaling) will only be triggered by

specific areas within the targeted antigen

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ARIUS focuses on

“Does the antibody kill cancer cells while leaving normal cells alone?”

we have successfully If YES, then,

hit the target within the target

FunctionFIRST™

Select antibodies for function(In vivo activity)

Immunize with primary human tumor

ARIUS Discovery Paradigm

Generate Antibodies

Identify target and eliminate those with prior patents

Patent ARIUS antibody and all epitopes on target with positive efficacy

Proprietary antibody discovery and selection platform

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FunctionFIRST™ yields results

400A pipeline of

antibodies

lead candidatesThree

partnershipsFive

$400 Millionin potential milestone payments

Genentech Oxford bioMedica

Takeda PDL BioPharma

Medarex

Our Partners

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Genentech exclusive antibody license

Top oncology antibody company with blockbuster successes:

• Avastin©• Rituxan©• Herceptin©

Partnership signed March 2006• Upfront licensing fee• Milestone payments based

on clinical milestones• Royalties

Prevents tumor growth and enhances survival in breast cancer models

Tum

or V

olum

e (m

m3 )

Days Post-ImplantationPe

rcen

t Su

r viv

al (

% )Antibody Dosing: 15 mg/kg i.p. 3x /week x 10 doses

0 50 100 150 2000

20

40

60

80

100

120Isotype controlAR7BD-33-11A

Treatment period

0

250

500

750

1000

1250

1500

0 10 20 30 40 50 60 70 80

Treatment period

Other leaders partnered with ARIUS

Takeda• Japan’s largest pharma

• Multi-product collaboration

• $1M in cash upfront/$1M equity

• Fund research activities for life of deal

PDL BioPharma• Leader in antibody humanization

• Partnership to discover and develop antibodies

• Option for in-license antibodies

Medarex• Joint research program using

Medarex’s UltiMab Human Antibody Development System

• The combination of technologies eliminates the humanization step in the FunctionFIRST™ platform

Oxford BioMedica• Agreement to jointly develop products

for cancer therapy

• Oxford characterized the antibodies and identify cognate antigens

• Liver cancer target identified - 37LRP –(AACR 2006) and being developed

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Our Products

CD44 Cancer Stem Cell ProgramAntibody AR001

CD44 cancer stem cell program

0

100

200

300

400

500

600

700

800

0 10 20 30 40 50

Buffer Control

20mg/kg

10mg/kg

2mg/kg

0.2mg/kg

Treatment Period

• Aberrant expression of CD44 occurs in a variety of tumors

• CD44 implicated as a functional cancer stem cell marker in leukemia, breast and prostate cancer

• Arius lead antibody targets the CD44 antigen

• ARH460-16-2 efficacy shown in breast and prostate tumors

Produces Breast Cancer Regression

Tum

or V

olum

e (m

m3 )

Days Post-Implantation

Perc

ent

Sur v

ival

(% )

0 20 40 60 80 100 120 140

0

20

40

60

80

100

120

Buffer Control Isotype Control ARH460-16-2

Treatment period post-treatment period

Increased Survival in Breast Cancer

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CD44 – cancer stem cell marker

Cancer stem cells are the factory of the tumour

Chemotherapy shrinks tumour

Tumour returns

Targeting cancer stem cells may be more effective

Cancer building ability is reduced

Survival is extended

AR001 demonstrates Significant inhibition oftumor growth and metastases in a dose response, human liver cancer model

CD44 cancer stem cell program

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Trop-2 Signal Transduction ProgramAntibody AR002

Trop-2 signal transduction program

0

200

400

600

800

1000

1200

1400

0 10 20 30

Days Post-Implantation

Tum

or V

olum

e (m

m 3 )

BufferAR002

Treatment Period

• Trop-2 identified as a major determinant of tumor growth and metastasis

• Over-expression of Trop-2 increases growth rates in several types of cancer

• ARIUS Trop-2 antibodies are the first to demonstrate efficacy

Inhibits tumor growth and increases survival in prostate cancer models

Days Post Implantation0 20 40 60 80 100

Per

cent

Sur

viva

l (%

)

0

20

40

60

80

100

120 Buffer ControlAR002.

Treatment Period

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Cell Proliferation

Erbitux, Herceptin, VectibixErbitux, Herceptin, Vectibix

Tarceva, IressaLapatinib, TarcevaTarceva, , IressaIressaLapatinibLapatinib, ,

AvastinAvastin

GleevacGleevacGleevac

GleevacGleevacGleevac

SHP-2Shc

VEGFRVEGFREGFREGFR PDGFRPDGFR

MEK

RAF

Grb2

SOS

RAS

MAPK

Antibodies

Small molecule inhibitors

TROPTROP--22

AR47A6.4.2AR47A6.4.2

Novel target in key cancer pathway

CD59 Immune Modulator ProgramAntibody AR003

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CD59 immune modulator program

Increases survival in lung cancer models

Shrinks tumors in breast cancer

• CD59 widely expressed in malignant tumors, allowing cancer cells to evade immune system

• AR36A36.11.1 could help activate immune system in addition to targeting cells directly

• AR36A36.11.1 has been demonstrated effective in a number of tumor types

MDA-MB-468 in female athymic nude mice

0

50

100

150

200

250

300

350

400

30 35 40 45 50 55 60 65 70 75 80

No TreatmentVehicleAR003 (20mg/kg)Taxotere (30mg/kg)

Treatment Period

Tum

or V

olum

e (m

m3 )

Days Post Implantation

Treatment Period

Days Post-Implantation0 20 40 60 80 100

Surv

ival

(%)

0

20

40

60

80

100

120 Buffer Control AR003

Epitope location for function-blocking antibodies

Epitope location for Non-function-blocking antibodies

Epitope location for ARIUS Antibodies

CD59 immune modulator program

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Arius antibody pipeline

Robust and growing intellectual property estate

16 issued and allowed patents- Composition of matter of antibodies- Methods of treatment- Antibody discovery technology platform

61 published patent applications

149 patents pending

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Opportunities

9 licensing deals in 90 days!

AstraZeneca and Regeneron

Pharmaceuticals

US$120Mplus royalties

Genentech and Seattle Genetics


Genentech and BioInvent


GSK and Antitope Limited

PDL BioPharmaand Trellis Bioscience

Cambridge Antibody and

iCoTherapeutics

Medarexand

Compugen

Wyeth and Raven

Biotechnologies

Pfizer and Elusys

Therapeutics

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Multiple acquisitions in last 12 months

May 2006Merck

acquiresAbmaxis

US$80M

May 2006Merck

acquiresGlycoFi

US$400M

March 2007Eisai

acquiresMorphotek

US$350M

November 2006GenentechacquiresTanox

US$919M

August 2006 AstraZeneca

acquires Cambridge Antibody

US$1.3B

December 2006GSK

acquiresDomantis

US$454M

ARIUS Milestones 2007

• Sign additional strategic collaboration/partnering agreements

• Advance our programs:– Complete pre-clinical toxicity studies for stem cell program

– Pre-IND meeting with the FDA

– Develop expression cell lines for other 2 lead programs and transfer to cGMP manufacturer

– Advance IND enabling studies for 2 additional programs

• Expand intellectual property and library of antibody drug candidates

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About ARIUS

Headquarters: Toronto, Canada

Symbol: TSX:ARI

Employees: 40 current (18 last year)

Cash: $19 million

Burn-rate: $2.3 million (Q1, 2007)

ManagementDavid S. YoungChairman, President and Chief Executive Officer

Helen FindlayExecutive Vice President and Chief Business Officer

Warren WhiteheadChief Financial Officer

Susan HahnDirector of Development

Daniel PereiraVice President of Research

Daniel RubensteinChief Medical Officer

Robert GundelChief Scientific Officer

Board of DirectorsWilliam T. BodenhamerDirector

Carl L. GordonDirector

Joe ZakrewzskiDirector

Diane KalinaDirector

Dan AndersenBoard Observer

Chau Q. KhuongBoard Observer

Management and Board

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Investor Presentation

June 2007

closing thoughts

71

if you had only one slide

need expressed: hunger

market opportunity: greed

need addressed: value proposition

creating value: the action plan

entrepreneurs

life sciences