clda research update 1oct10 final

8/8/2019 CLDA Research Update 1Oct10 Final

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Griffin Securities, Inc., 17 State Street, NY, NY, 10004 y www.GriffinSecurities.com 1Please Review Disclosures on Page 27 of this Research Report

CLINICALDATA,INC. (NASDAQGM:CLDA)

We believe that vilazodone will be approved by the FDA. The PDUFA date is set for January 22,2011. The efficacy and safety data are consistent and robust across multiple studies andmodels.

Stedivaze could be the magic bullet for cardiac stress testing and a bigger value driver forCLDA than vilazodone. Phase III trials are underway.

Clinical Data, Inc. (NasdaqGM: CLDA) is a biotechnologycompany developing therapeutics and genetic tests.

Therapeutic Pipeline:

Late stage:

y Vilazodone NDA Accepted for Review (Depression);PDUFA Date is January 22, 2011

y Stedivaze Phase III ASPECT-1 Trial Underway; SecondPhase III Trial in Advanced Planning (Cardiac Stress Agent)

Selected early stage:

y ATL313 for ophthalmic diseases, including glaucoma(partnered with Santen Pharmaceuticals)

y ATL844 for the treatment of Asthma and/or Diabetes(option agreement for an exclusive license by Novartis)

Genetic Tests:

Commercialized:

yFAMILIONFamily of Cardiac Tests

Genetic Tests in Development:

y PGxPredict: Rituximab

y FC GAMMA Family of Genetic Oncology Tests

We are updating coverage on Clinical Data, Inc. (NasdaqGM: CLDA) with a BUY rating, and we aresetting a 12-month price target of $33.00 for CLDA shares for the following reasons:

PDUFA date for vilazodone quickly approaching. We expect continued momentum as we approach the January11, 2011, PDUFA date. Vilazodone is a new first-in-class treatment for depression due to its novel mechanism ofaction as both a selective serotonin reuptake inhibitor (SSRI) and a 5HT1A partial agonist. Vilazodones trialresults have been impressive with efficacy and safety data consistent and robust across multiple studies and

models. We expect likely FDA approval to drive stock outperformance;

Stedivaze (apadenoson) a potential best-in-class coronary vasodilator for cardiac stress testing is movingaggressively through its first Phase III program and readies for its second Phase III trial, expected to commencein the first quarter 2011. Data to date have demonstrated convincing efficacy and an excellent tolerable safetyprofile. We think Stedivaze has a high chance of success with excellent commercial potential; and

Current discounted cash flow model supports a value of $33.00 per share.

Share Price (9/30/10) $16.87

52-Week Price Low / High $10.87 - $22.39

Mkt. Capitalization (issued) $503.6 MM

Shares Outstanding (issued) 29.85 MM

12-month Target Price $33.00

Cash & Equivalents (6/30/10) $63.5 MM

Convertible Debt (6/30/10) $50.0 MM

Fiscal Year Ends March 31st

Website www.clda.com

Product Line Peak Revenue NPV

Vilazodone $749 MM $518 MM

Stedivaze $448 MM $398 MM

FAMILION $81 MM $25 MM

12-Month Price Chart

Source: BigCharts.com

U.S. Research: Health Care y October 1, 2010UPDATE AND BUY RECOMMENDATION

CHRYSTYNA BEDRIJ212-509-9500

[email protected]

KEITHA.MARKEY,PH.D.212-514-7914

[email protected]

MARKMERRILL646-442-1441

[email protected]


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GRIFFIN SECURITIES EQUITY RESEARCH2

Clinical Data, Inc. October 1 2010

BUSINESSUPDATE

VILAZODONE: ON TRACK FOR APPROVAL. The FDA has established a January 22, 2011,PDUFA date. Vilazodone is a novel, dual-acting serotonergic antidepressant, is a potent and selectiveserotonin reuptake inhibitor (SSRI) and partial agonist of the 5-hydroxytryptamine 1a (5-HT1A)receptor. Vilazodone has completed two randomized, double-blind, placebo-controlled Phase III

clinical trials and a 52-week long-term safety study. The primary endpoints and multiple secondaryendpoints of each trial were achieved with statistical significance related to depression as measuredby the MADRS, HAM-D, and HAM-A scales. In addition, overall dropout rates were low. VilazodonesNDA filing is supported by data from nearly 3,000 patients who have received the drug safely with alow occurrence of side effects. In addition, there was no significant difference between placebo andvilazodone in terms of sexual dysfunction, as measured by validated scales (ASEX and CSFQ)showing numerical comparability to placebo.

1Given that treatment emergence sexual dysfunction is a

frequent adverse effect of most antidepressants and is one of the predominant reasons for prematuredrug discontinuation, the availability of an antidepressant that does not cause sexual dysfunctionwould provide a significant differentiator.2 Neutrality on body weight is also a positive. We believe thatupon approval, vilazodone will represent a major force in the depression market. We forecast peakannual sales reaching approximately $750 million.

VILAZODONE EFFICACY AND SAFETY DATA WERE CONSISTENT AND ROBUST ACROSSMULTIPLE STUDIES AND MODELS.Presentations from this years American Psychiatric Association(APA) annual meeting include: (i) positive results from the second placebo-controlled Phase III clinicaltrial of vilazodone, (ii) results from a long-term, 52-week safety study, and (iii) results from twopharmacokinetic studies in patients with renal and hepatic impairment, respectively.3 Impressively,the efficacy and safety data were consistent and robust across the multiple studies and models.Vilazodone demonstrated a statistically-significant improvement in symptoms in major depressivedisorder patients compared to placebo in the second Phase III trial, replicating the results of the firstPhase III clinical trial. In the 52-week, long-term safety study, vilazodone was well-tolerated at a doseof 40 mg/day, the same dose level used in the second Phase III trial. Adverse events tended to occurearly in treatment and were mild to moderate. The pharmacokinetic studies find that no doseadjustment would be required for patients with renal and hepatic impairment. All of the data supportsvilazodones use as a treatment option for major depressive order and should support the NDA filing.

PRECLINICAL DATA SUPPORT VILAZODONESUNIQUE DUAL MECHANISM OF ACTION ANDPOTENTIAL BENEFITS: ACCELERATED RESPONSE AND POTENCY ARE CRUCIAL FORDEPRESSED PATIENTS.At the Society of Biological Psychiatry (SOBP) meeting an exciting posterwas presented on vilazodone serotonin reuptake inhibition in vitro, showing both (i) potency 30-foldgreater than that of the SSRI fluoxetine and (ii) high selectivity for the inhibition of serotonin reuptake,compared to norepinephrine or dopamine reuptake.4 As a partial agonist, vilazodone has the ability toaffect both auto- and hetero-receptors. The activation of 5-HT1A auto-receptors accelerates thedesensitization of these receptors and potentiates the release of 5-HT throughout the brain, as wellas its SSRI-like effect, crucial to antidepressant efficacy. In a separate study in an in vivo rat model,findings suggest that vilazodone may potentially provide improved antidepressant effects versus anSSRI alone.5

1 Clinical Data Analyst Day. Presentation by Dr. Carol Reed on Depression, Its Treatment, and Sexual Function. October 2009.2

S. Kennedy and S. Rizvi, Sexual Dysfunction, Depression and the Impact of Antidepressants. Journal of ClinicalPsychopharmacology: April 2009- Volume 29 issue 2, pp 157-164.3The American Psychiatric Association (APA) (APA) Efficacy and Tolerability of Vilazodone, a Dual-Acting Serotonergic

Antidepressant, in the Treatment of Patients with Major Depressive Disorder (MDD) ; Presenter: Arif Khan, M.D., Northwest ClinicalResearch Center; Poster #NR4-2, Session 4: Mood Disorders4

The Society of Biological Psychiatry (SOBP). In Vitro Characterization of Vilazodone as a Dual-Acting Serotonin ReuptakeInhibitor and 5-HT1A Receptor Partial Agonist ; Presenter: John H. Kehne, Ph.D., Translational Neuropharmacology Consulting,LLC ; Poster #821, Session 1255The Society of Biological Psychiatry (SOBP). Electrophysiological Assessment of Accelerated 5-HT1A AutoreceptorDesensitization in Rats Produced bu Vilazodone, a Novel Serotonin Reuptake Inhibitor and 5-HT1A Receptor Partial Agonist;Presenter: Charles R. Ashby, Ph.D., St. Johns University; Poster #822, Session 125


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STEDIVAZE CONTINUES TO ADVANCE IN PHASE III CLINICAL TRIALS. Stedivaze(apadenoson) is a selective A2A receptor agonist in development for use as a pharmacologic stressagent in myocardial perfusion imaging (MPI) scans, commonly called cardiac stress tests, used toidentify symptoms of coronary artery disease (CAD). We recently spoke with Dr. Robert C. Hendel,lead investigator and chair of the steering committee, who has been involved with various aspects ofthe drug since 2005, including serving as principal investigator in the Phase II clinical trial. He

indicated that Stedivaze is an extremely exciting agent and data to date suggests that the agent iswell tolerated with an excellent safety profile, including no unexpected increase in side effects,including chest pains, shortness of breath, and flushing. Stedivaze is currently in a Phase III clinicaltrial (called the ASPECT-1 trial), which began in November 2009, and a second Phase III clinical trialis in the advanced planning stages. The two Phase III trials are expected to enroll approximately 750patients each over an 1824 month period from trial initiation. The primary endpoint of the ASPECT-1trial is non-inferiority to adenosine. Additionally, when Stedivaze Phase II data is compared toLexiscan Phase II data, it suggests that Stedivaze should be comparable to Lexiscan in terms ofefficacy, however Stedivaze should better Lexiscans side effect profile. We forecast annual peaksales of $448 million and a net present value of $398 million for the Stedivaze program.

STEDIVAZE: TWO COMPLETED PHASE I TRIALS IN ASTHMA AND COPD PATIENTSEXPECTED TO EXPAND DRUGS UTILITY.Supporting the drugs safety and tolerability profile, earlierthis year, CLDA reported positive data from two Phase I clinical trials of Stedivaze in 49 patients with

asthma and 50 patients with COPD, respectively, an important result because existing commercially-available cardiac stress agents are contraindicated or have warnings for use in asthma and COPDpatients. The positive Phase I results were also presented in two posters at the American Society ofNuclear Cardiology (ASNC) annual meeting in September 2010.

FAMILION FRANCHISE OF GENETIC TESTS TO IDENTIFY INHERITED CARDIAC DISEASESCONTINUES TO GROW. FAMILY OF TESTS IN ONCOLOGY ALSO IN DEVELOPMENT. TheFAMILION tests generated revenue of approximately $3.3 million in Q1 ended June 30, 2010, up 7%from $3.0 million in Q1 2009. Gross profit margins increased to 47% in Q1 2010 from 36% in Q12009. A family of diagnostic tests in oncology based on FC gamma receptors is currently beingdeveloped with various collaborators. In particular, clinical trial results using the rituximab responsetest in follicular lymphoma are expected in the next 12 months.

OUR VALUATION MODEL SUPPORTSVALUE OF $33.00 PER SHARE.WE REITERATE OURBUY RATING.We believe CLDA shares continue to offer an attractive investment opportunity as

vilazodone quickly approaches its likely FDA approval by late January 2011. Vilazodone hasproduced efficacy and safety data that were consistent and robust across the multiple studies andmodels. Stedivaze, CLDAs potential best-in-class coronary vasodilator for cardiac stress testing, alsohas a high chance of success with blockbuster commercial potential. Data to date have demonstratedconvincing efficacy and an excellent tolerable safety profile with potential best-in-category attributesdue to its dosing, selectivity, and side effect profile. Our target price is derived by summing thefollowing base case components of Clinical Datas late stage programs: vilazodone net present value(NPV) of $518 million (based on our base case estimates of peak sales of $749 million in CY2017);Stedivaze NPV of $398 million (based on our base case estimates of peak sales of $448 million inCY2018) and FAMILION test franchise NPV of $25 million (based on our base case estimates ofpeak sales of $80 million in 2020). The company also currently holds in excess of $63M in cash to

support its key business initiatives. Together, with adjustments to calculate free cash flow, these threeprograms by themselves, using a discounted cash flow valuation approach, suggest a target price of$33.00 per share. Other pipeline products (therapeutic and diagnostic) are likely to create additionallong-term value, including ATL844 for the treatment of Asthma and/or Diabetes (option agreement foran exclusive license by Novartis) and ATL313 for ophthalmic diseases, including glaucoma(partnered with Santen Pharmaceuticals).


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TABLE OF CONTENTS

VILAZODONE (ANTIDEPRESSANT) ...........................................................................................................5VILAZODONE NDAACCEPTED FOR REVIEW ..................................................................................................5 VILAZODONE DATA AT THE APAANNUAL MEETING .......................................................................................5 VILAZODONE DATA AT THE SOBPANNUAL MEETING.....................................................................................8 VILAZODONE AND SEXUAL FUNCTION ...........................................................................................................9 VILAZODONE:COMMERCIAL OUTLOOK ....................................................................................................... 10

STEDIVAZE (PHARMACOLOGIC STRESS AGENT) ............................................................................. 12ASNC2010POSTER PRESENTATIONS ....................................................................................................... 12STEDIVAZE:PHASE IIIASPECT-1TRIAL UNDERWAY .................................................................................. 13STEDIVAZE:COMMERCIAL OUTLOOK.......................................................................................................... 14

FAMILIONFAMILY OF CARDIAC TESTS ................................................................................................. 16OTHER THERAPEUTICS AND GENETIC TESTS IN DEVELOPMENT ...................................................... 17INVESTMENT CONCERNS AND RISKS.................................................................................................... 18FINANCIAL FORECASTS & VALUATION ................................................................................................. 19

HISTORICAL BALANCE SHEET .................................................................................................................... 19REVENUE ASSUMPTIONS ........................................................................................................................... 20CASHFLOW MODEL................................................................................................................................... 22INCOME STATEMENT ................................................................................................................................. 25DISCOUNTED CASH FLOW (DCF)MODEL.................................................................................................... 27

DISCLOSURES.......................................................................................................................................... 28

(Intentionally left blank)


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VILAZODONE (ANTIDEPRESSANT)Vilazodone, a novel, dual-acting serotonergic antidepressant, is a potentand selective serotonin reuptake inhibitor, or SSRI, first line therapy for

major depressive disorder (MDD), and partial agonist of the 5-hydroxytryptamine 1a, or 5-HT1A, receptor.

VILAZODONE NDAACCEPTED FOR REVIEW

On May 24, 2010, CLDA announced that the FDA accepted for review theCompanys New Drug Application (NDA) for vilazodone for the treatment ofmajor depressive disorder. The FDA established a January 22, 2011,PDUFA date. Vilazodone, a novel, dual-acting serotonergic antidepressant,is a potent and selective serotonin reuptake inhibitor, or SSRI and partialagonist of the 5-hydroxytryptamine 1a, or 5-HT1A, receptor. Vilazodone hascompleted two randomized, double-blind, placebo-controlled Phase III clinical trials. The primary endpointsand multiple secondary endpoints were achieved with statistical significance in both trials. The NDA filing issupported by data from nearly 3,000 patients who have received vilazodone with a low occurrence of side

effects. Additionally, vilazodones dual mechanism of action also reduced impact on sexual function asmeasured by validated scales (ASEX and CSFQ) showing numerical comparability to placebo.6

Given thatsexual dysfunction is a frequent adverse effect of treatment with most antidepressants and is one of thepredominant reasons for premature drug discontinuation, the availability of an antidepressant that does notcause sexual dysfunction would represent an advance in pharmacotherapy and may be included in thelabeling for vilazodone.7

VILAZODONE DATA AT THE APAANNUAL MEETING

Presentations from this years American Psychiatric Association (APA include: (i) positive results from thesecond placebo-controlled Phase III clinical trial of vilazodone, (ii) results from a long-term, 52-weeksafety study, and (iii) results from two pharmacokinetic studies in patients with renal and hepaticimpairment, respectively.8,9,10,11 Impressively, the efficacy and safety data was consistent and robustacross the multiple studies and models.

SECOND PHASE IIITRIAL RESULTS

Results from the second Phase III clinical trial were presented in a poster entitled Efficacy andTolerability of Vilazdone, a Dual-Acting Serotonergic Antidepressant, in the Treatment of Patients withMajor Depressive Disorder (MDD). Vilazodone demonstrated a statistically significant improvement insymptoms in major depressive disorder patients compared to placebo based on multiple measures(MADRS, HAM-D-17, HAM-A, CGI-S, and CGI-I) in the second Phase III trial, replicating the results of thefirst Phase III clinical trial. These efficacy results are displayed in Table 1 below:

6Clinical Data Analyst Day. Presentation by Dr. Carol Reed on Depression, Its Treatment, and Sexual Function. October 2009.

7 S. Kennedy and S. Rizvi, Sexual Dysfunction, Depression and the Impact of Antidepressants. Journal of ClinicalPsychopharmacology: April 2009- Volume 29 issue 2, pp 157-164.8The American Psychiatric Association (APA) Efficacy and Tolerability of Vilazodone, a Dual-Acting Serotonergic Antidepressant, in

the Treatment of Patients with Major Depressive Disorder (MDD) ; Presenter: Arif Khan, M.D., Northwest Clinical Research Center;Poster #NR4-2, Session 4: Mood Disorders9The American Psychiatric Association (APA) A 1-Year Open-Label Study Assessing the Safety and Tolerability of Vilazodone in

Patients with Major Depressive Disorder; Presenter: Carol Reed, M.D., Clinical Data, Inc.; Poster #NR4-22, Session 4: MoodDisorders10

The American Psychiatric Association (APA) Vilazodone Pharmacokinetics in Subjects with Mild to Moderate Renal Impairment;Presenter: Harry Alcorn, Jr., PharmD., DaVita Clinical Research; Poster #NR4-33, Session 4: Mood Disorders11

The American Psychiatric Association (APA) Vilazodone Pharmacokinetics in Subjects with Mild to Moderate HepaticImpairment; Presenter: James Longstreth, Ph.D., Longstreth & Associates, Inc.; Poster #NR4-37, Session 4: Mood Disorders


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Table 1: Vilazodone Results: Second Phase III Clinical Trial

Source: Khan et al, APAAnnualMeeting 2010

Total enrollment in the trial was 463 patients, and dosing was 40 mg/day for eight weeks, including a two-week titration period. Vilazodone was also well-tolerated with greater than 93% of all adverse eventsclassified as mild or moderate in intensity. Table 2 shows the occurrence of side effects relative toplacebo.

Table 2: Occurrence of Adverse Events in the Second Phase III Clinical Trial

Source: Khan et al, APAAnnualMeeting 2010

Diarrhea and nausea were the most common side effects, but they generally occurred early in treatmentand did not lead to significant termination of dosage. Only approximately 5% of vilazodone patientsdiscontinued treatment due to adverse events. Importantly, sexual function for both men and women wassimilar to placebo in both groups as measured by the CSFQ score.

LONG-TERM SAFETY STUDY RESULTS

Results from a 52-week study of vilazodone were presented in a poster entitled A 1-Year Open-LabelStudy Assessing the Safety and Tolerability of Vilazodone in Patients with Major Depressive Disorder.The objective of the study was to assess the long-term safety profile of vilazodone, though measures ofefficacy were also observed. Notably, vilazodone was well tolerated at a dose of 40 mg/day, the samedose level used in the second Phase III trial. Adverse events tended to occur early in treatment and weremild to moderate in intensity. Nearly 95% of all adverse events were classified as mild or moderate.


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The overall effectiveness of the drug was very good. Symptoms improved throughout the treatmentperiod, though most of the improvement occurred within the first eight weeks. The results are shown inFigure 1 below for symptoms measured by the MADRS and global improvement measured by the CGI-Iscore:

Figure 1: Efficacy Results from the 52-Week Study of Vilazodone

Source: Robinson et al, APAAnnualMeeting 2010

Overall, the effectiveness over a 52-week period was similar to the effectiveness measured in each of theeight-week Phase III trials.

PHARMACOKINETIC RESULTS

Vilazodone pharmacokinetics were presented for patients with renal and hepatic impairment in twoposters entitled Vilazodone Pharmacokinetics in Subjects with Mild to Moderate Renal Impairment andVilazodone Pharmacokinetics in Subjects with Mild to Moderate Hepatic Impairment, respectively. Thepharmacokinetic studies find that no dose adjustment would be required for patients with renal or hepaticimpairment. These results are shown in Figures 2 & 3 below:


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Figure 2: Mean Vilazodone Concentration in Hepatically-Impaired Subjects

Source: Longstreth et al, APAAnnualMeeting 2010

Figure 3: Mean Vilazodone Concentration in Renally-Impaired Subjects

Source: Alcorn, Jr. et al, APAAnnualMeeting 2010

VILAZODONE DATA AT THE SOBPANNUAL MEETING

At the Society of Biological Psychiatry (SOBP) meeting an exciting poster was presented on vilazodoneserotonin reuptake inhibition in vitro, showing both (i) potency 30-fold greater than that of the SSRI

fluoxetine and (ii) high selectivity for the inhibition of serotonin reuptake, compared to norepinephrine ordopamine reuptake.

12As a partial agonist, vilazodone has the ability to affect both auto- and hetero-

receptors. The activation of 5-HT1A auto-receptors accelerates the desensitization of these receptors andpotentiates the release of 5-HT throughout the brain, as well as its SSRI-like effect, crucial to

12The Society of Biological Psychiatry (SOBP). In Vitro Characterization of Vilazodone as a Dual-Acting Serotonin Reuptake

Inhibitor and 5-HT1A Receptor Partial Agonist ; Presenter: John H. Kehne, Ph.D., Translational Neuropharmacology Consulting,LLC ; Poster #821, Session 125


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antidepressant efficacy. In a separate study in an in vivo rat model, findings suggest that vilazodone maypotentially provide improved antidepressant effects versus an SSRI alone.13

VILAZODONE AND SEXUAL FUNCTION

According to the posters presented at the APA annual meeting, both the second Phase III trial and thelong-term safety study confirmed the previously reported result that vilazodones impact on sexualdysfunction is comparable to placebo using the accepted ASEX and CSFQ scales.

Dr. Carol Reed, Chief Medical Officer of Clinical Data, previously presented a detailed review of therelationship between vilazodone and sexual function in October 2009 titled, Depression, Its Treatment,and Sexual Function. It was made clear that patients with depression experience difficulties with sexualfunctioning and that sexual functioning can be worsened with treatment with antidepressants.Vilazodones dual mechanism of action that combines selective serotonin reuptake inhibition (SSRI) andpartial 5-HT1A receptor agonism reduced impact on sexual function as measured by validated scales(ASEX and CSFQ) showing numerical comparability to placebo.

14Data from a report by Landen (1999)

on buspirone provided additional information that the partial agonist of the 5-HT1A receptors may have abeneficial effect of decreasing or reversing sexual dysfunctions induced by SSRIs.

Given the potential for vilazodones lack of effect on sexual functioning (e.g., study findings corroboratethat there was no impairment of sexual function as measured by a validated scales), it is positively andimportantly differentiated from other SSRIs that have been associated with causing sexual dysfunction orexacerbating pre-existing sexual dysfunction.15

State-of-the-art sexual dysfunction research, including rating scales, statistics, and strategies formanaging sexual dysfunction were presented, including:

1) An estimated 70 to 80% of the patients have complaints related to sexual function;16

2) Antidepressant-induced sexual dysfunction is potentially underestimated by a factor of three;17

3) Sexual dysfunction is prevalent in patients on antidepressants in primary care practices;1819 and

4) Sexual dysfunction is often a factor in non-compliance and discontinuation of antidepressanttreatment.

20

Dr. Reed also showed data from published studies on the anti-anxiety drug buspirone (a 5-HT 1A partialagonist) as an antidote to SSRI-induced sexual dysfunction. Buspirone treatment showed a reversal ofsymptoms of sexual dysfunction in 69% of patients with SSRI induced sexual dysfunction, and thebenefits of 5-HT1A partial agonism provides a possible explanation of why rates of vilazodone-relatedsexual dysfunction as measured by quantitative scales is similar to placebo.21 It was also noted that,using qualitative data, vilazodone was associated with more adverse events related to sexual functioningthan placebo however, the only adverse event related to sexual function with a frequency >2% invilazodone-treated patients was decreased libido, occurring in 3.7% of patients.

Finally, Dr. Reed reviewed the vilazodone trials as they related to sexual dysfunction measures. BothPhase III trials were randomized, placebo-controlled, double-blind, 8-week studies of vilazodone in thetreatment of adult outpatients with major depressive disorder (MDD). Patients were treated with 40mg/day of vilazodone for 8 weeks.

13 The Society of Biological Psychiatry (SOBP). Electrophysiological Assessment of Accelerated 5-HT1A AutoreceptorDesensitization in Rats Produced bu Vilazodone, a Novel Serotonin Reuptake Inhibitor and 5-HT1A Receptor Partial Agonist;Presenter: Charles R. Ashby, Ph.D., St. Johns University; Poster #822, Session 125 14

Clinical Data Analyst Day. Presentation by Dr. Carol Reed on Depression, Its Treatment, and Sexual Function. October 2009.15

Bahrick, Audrey S., Persistence of sexual dysfunction Side Effects after Discontinuation of Antidepressant Medications: EmergingEvidence. The Open Psychology Journal, 2008, 1, 42-50.16

Laumann et al., JAMA 1999; Casper et al., Arch Gen Pshych 1985.17

Montejo-Gonzalez. J Sex Marital Ther. 1997.18

Clayton et al. J Clinical Psychiatry. 2002.19

Clayton et al. Journal of Affective Disorders 2006.20

Ashton AK et al. Curr. Ther Res. 2006; 66:96-106.21

Norden, Depression, 1994; 2(2): 109-112.


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The effect of vilazodone on sexual dysfunction was measured using the Arizona Sexual Experience Scale(ASEX) in the first Phase III trial and the Changes in Sexual Function Questionnaire (CSFQ) in thesecond Phase III trial. Negative changes in the ASEX indicate improvement in sexual function, whilepositive changes indicate worsening of sexual function as determined by patient answers to a fivequestion survey. To sumup, mean changes from baseline forpatients treated with either vilazodone orplacebo showed numerically similar improvement in these two studies.

The Changes in Sexual Functioning Questionnaire (CSFQ) is a 14-item scale that quantifies fivedomains of sexual function. Total scores range from 5 to 70, with increasing scores indicative of sexualfunction improvement. The CSFQ is brief and reliable with published norms, and it assesses all phasesand both genders.

The Arizona Sexual Experience Scale (ASEX) is a five-item scale that quantifies five domains of sexualfunction. Total scores range from 5 to 30, with decreasing scores indicative of sexual functionimprovement. The ASEX is reliable and assesses all phases and both genders.

VILAZODONE:COMMERCIAL OUTLOOK

Based on our internal assumptions and revenue model, we project peak revenue of $749 million inCY2017. We estimate that vilazodone will be approved by the FDA and launched in CY2011 (FY2012).Figure 4 shows our projected sales for MDD in the U.S.

Figure 4: Griffin Securities: Vilazodone Revenue Forecast for MDD in the U.S. ($ in 000s)

Source: Griffin Securities, Inc.

The following revenue assumptions refer to our internal forecast for US sales of vilazodone in majordepressive disorder (MDD) only, excluding potential sales for GAD and/or other indications. The revenue

assumptions also exclude international sales or partnership or collaboration opportunities.

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E


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Key assumptions:

P There are 211,000,000 antidepressant prescriptions written annually22;

P Approximately 60% of the antidepressant prescriptions written are written for the major depressivedisorder (MDD) indication23;

P Vilazodone penetrates the market beginning in FY2012 (CY2011) at a price of $114 perprescription24;

P The price per prescription grows at an annual rate of 4%25;

P Vilazodone penetrates 0.3% of the addressable market in launch year and reaches a peakpenetration of 3% of the addressable market in FY201826; and

P The vilazodone patent expires in FY2020.


22IMS Healths National Prescription Audit 2009.

23IMS Healths National Drug and Therapeutic Index 2006.

24IMS Healths National Prescription Audit 2008. The estimated price of $114.36 is the weighted-average price of branded

antidepressants with total number of prescriptions greater than 10 million in 2008 (Lexapro, Cymbalta, and Effexor) discounted witha blended rebate of 6%.25

The average annual prescription price growth rates for Lexapro, Cymbalta, and Effexor XR since 2004 are 7%, 5%, and 5%,respectively.26

Vilazodones estimated launch curve is consistent with the launch curves of Cymbalta and Lexapro.

Vilazodone: Depression

Number of Total Prescriptions 211,000,000 Year penetration starts 2012

Percent of Total Addressable 60% Starting penetration as % of peak 10.0%

Addressable Market Growth Rate 2% Years to reach peak penetration 6

Price per Prescription (Net) $114 Peak penetration 3%

Treatment price growth 4% Duration of peak penetration in years 3

Clinical Progress 2nd Phase III Royalty rate (payable to MRK) 10%


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STEDIVAZE

(P

HARMACOLOGICS

TRESSA

GENT)Stedivaze (apadenoson), a selective A2A receptor agonist, is in clinical

development for use as a pharmacologic stress agent in myocardialperfusion imaging (MPI) scans. MPI scans, commonly called cardiac stresstests, are used to identify symptoms of coronary artery disease (CAD),including areas of poor blood flow in the heart caused by the formation ofatheromatous plaques. A pharmacologic stress agent is used to temporarilyincrease blood flow through coronary arteries during stress testing so arteryfunctionality can be accurately assessed. The A2A adenosine receptor is thereceptor subtype responsible for coronary vasodilation, or the widening ofblood vessels.

27We believe that a pharmacologic stress agent like

Stedivaze, with the potential for a reduced side-effect profile, would offer apotentially best in class option for diagnosing coronary artery disease in patients who cannot undergo an

exercise test. Stedivaze has completed Phase II studies, and a Phase III study commenced in November2009.

ASNC2010POSTER PRESENTATIONS

CLDA presented two posters summarizing the Phase I data of Stedivaze in patients with asthma andCOPD at the American Society of Nuclear Cardiology (ASNC) 2010 annual meeting.

28,29The results

demonstrate Stedivazes overall safety and tolerability in the subset of patients with underlying asthma orCOPD. Currently available cardiac stress agents are contraindicated or cautioned against use in thesepatients, so these positive results may help to differentiate Stedivaze from competing cardiac stressagents and expand the market potential.

The first poster, entitled A Randomized, Double-Blind, Placebo-Controlled Study of the Safety ofApadenoson [Stedivaze] in Subjects with Mild or Moderate Asthma, summarized results from 49 patients

using a single IV bolus dose, the same that is being used in the Phase III ASPECT-1 trial. Treatment with

27Shryock, J.C., Snowdy, S., Baraldi, P.G., et al., A2A Adenosine Receptor Reserve for Coronary Vasodilation, Circulation, 1998:

98, pp. 711-718.28

The American Society of Nuclear Cardiology (ASNC) A Randomized, Double-Blind, Placebo-Controlled Study of the Safety of Apadenoson [Stedivaze] in Subjects with Mild or Moderate Asthma; Presenter: Amy Lankford, Ph.D., and Carol Reed, M.D.,Clinical Data, Inc.; Poster #9.1229

The American Society of Nuclear Cardiology (ASNC) A Randomized, Double-Blind, Placebo-Controlled Study of the Safety of Apadenoson [Stedivaze] in Subjects with Moderate to Severe Chronic Obstructive Pulmonary Disease (COPD); Presenter:Shannon Williams, Ph.D., and Carol Reed, M.D., Clinical Data, Inc.; Poster #9.13


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Stedivaze did not lead to serious adverse events, including brochoconstriction, and showed no othernegative effects on pulmonary function. Table 3 shows this result:

Table 3: Pulmonary Function Tests in Patients with Mild to Moderate Asthma

Source: Williams et al., ASNCAnnualMeeting 2010

The second poster, entitled A Randomized, Double-Blind, Placebo-Controlled Study of the Safety ofApadenoson [Stedivaze] in Subjects with Moderate to Severe Chronic Obstructive Pulmonary Disease(CPOD), summarized results from 50 patients. The same single IV bolus dose was used, and like theresults for patients with asthma, there were no negative effects on pulmonary function in patients withCOPD. In addition, the overall occurrence of side effects was very low. The results of pulmonary functioncompared to placebo are shown in Table 4 below:

Table 4: Pulmonary Function Tests in Patients with Moderate to Severe COPD

Source: Williams et al., ASNCAnnualMeeting 2010

STEDIVAZE:PHASE IIIASPECT-1TRIAL UNDERWAY

CLDA announced on November 18, 2009, that the first patient was enrolled in its initial Phase III clinicaltrial (ASPECT-1). The trial is a randomized, double blind, active control study that will enrollapproximately 750 patients over an 18 to 24 month time period. The Phase III trial will evaluate theefficacy of Stedivaze as a pharmacologic stress agent and compare its safety and tolerability to

adenosine, a current standard option used for pharmacologic stress testing.30

Stedivaze Phase III ASPECT-1 Study Details

Dosing: Single bolus IV injection of 100 or 150 ug

Patients: Estimated enrollment of approximately 750 patients.

Endpoints:

30Clinical Data, Inc. press release, Clinical Data Initiates Phase III Trial of Stedivaze for Cardiac Stress Testing Nov. 18, 2009.


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Primary: Presence of myocardial perfusion defect as based on SPECT-MPI.

Secondary: Incidence and patient rated intensity of most commonly reported side effects associated withuse of adenosine in SPECT-MPI.

STEDIVAZE:COMMERCIAL OUTLOOK

Based on our internal assumptions and revenue model, we project peak revenue of $523 million inCY2018 (FY2019). Figure 5 shows our projected Stedivaze sales.

Figure 5: Griffin Securities: Stedivaze Revenue Forecast in the U.S. ($ in 000s)

Source: Griffin Securities, Inc.The following revenue assumptions refer to US sales of Stedivaze as a pharmacologic stress agent foruse in MPI scans. The revenue assumptions exclude international sales or partnership or collaborationopportunities.


$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E

Ste iva e (a a e s ): Car i vascular Imagi gYear penetration

tart

FY2015 Number of Proedure

4,200,000

Starting penetration rate 4.0% Perent addre

able 100%

Year

between penetration

tart and pea

4 Addre

able Mar

et Growth Rate 10%,3%

Pea

penetration 30.0% Prie per S

an $188

Duration of pea

penetration in

ear

2

reatment prie growth 3%

Clini al Progre

Pha

e III Ro

alt

rate 5%


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Key Assumptions:

PApproximately 16 million Americans are affected by coronary artery disease on an annual basis andbetween 7.5 million and 9.3 million patients (approximately 50%) will receive myocardial perfusionimaging scans. Approximately 50% of the 8.4 million patients, or 4.2 million, require the use of apharmacologic stress agent31,32;

P Of the patients that receive a pharmacologic stress agent, 100% are addressable by Stedivaze;

P The addressable market will grow at an annual rate of 10% from FY2010 through FY2015 and anannual rate of 3% from FY2015 through perpetuity33;

P Stedivaze penetrates the market beginning in FY2015 at a price of $188 per vial growing 3%annually34;

P Stedivaze penetrates 4% of the market in launch year with a peak penetration of 30% reached inFY2019. Assumes penetration rates begin to decline following the expiration of CorVues patent inFY2018 and following the expiration of Lexiscans patent in FY2025

35; and

P Stedivazes patent expires in FY2027.36


31 According to the American Heart Association (2008), approximately 16 million Americans have coronary heart disease.32

According to Astellas Pharma US, Inc., 7.5 million to 9.3 million MPI scans are performed annually, and 50% require apharmacologic stress agent.. Astellas press release, June 24, 2008, Astellas Launches Lexiscan (Regadenoson) Injection for useas a Pharmacologic Stress Agent in Radionuclide Myocardial Perfusion Imaging (MPI). 33

According to AMR data, the compounded annual growth rate of pharmacologic MPIs since 1996 is 11.6%. We assume an annualgrowth rate of 10% will continue through 2014 as better agents (like selective A2A agonists) drive adoption of pharmacologic scansdo to improved AE profiles and ease of use. Additionally, our model does not take into account other modalities such as MRI andEcho which are likely to contribute to growth rates as switchover occurs. Finally, changing demographics, such as population agingand greater rates of obesity, are expected to contribute to overall growth in cardiovascular disease and related cardiovascularimaging market..34

The Red Book average wholesale price (AWP) of Lexiscan is $242.82. The Wholesale Acquisition Cost (WAC) for Lexiscan is$202.35. We assume approximately 7% in total discounts (including a 2% wholesaler discount and a 5% hospital/GPO discount)from the WAC, which results in a discounted price of $188.19 in 2009. Given that Stedivaze has best-in-class potential, it mayeventually command a premium price to Lexiscan; however, our model does not include this upside.35

We assume a 35% penetration for several reasons. First, the market is relatively undeveloped with two primary products,AdenoScan (adenosine) and Persantine (dipyridamole), holding combined 90% market share. Second, it is expected that Lexiscanwill cannibalize AdenoScan as both are marketed by Astellas. Third, Stedivaze has best-in-class attributes as compared toAdenoScan, Lexiscan, and CorVue because it is administered by bolus injection and it has an improved AE profile. Note Corvuesfate is unclear given that the FDA panel voted against CorVue in October 2009, saying the data did not prove the drug was aseffective as adenosine. While Lexiscan and CorVue (if ever approved) are administered by bolus injection, they have comparableAE profiles to AdenoScan. Fourth, AdenoScan (adenosine) will only become generic in 2012 (although it should be largely replacedby Lexiscan). CorVue (if ever approved) will be generic in 2017, and Lexiscan will be generic in 2024; thus, we anticipate minimalgeneric competition until 2017. We also assume Lexiscan will have substantially cannibalized AdenoScan by the time a genericversion is available, and physicians will be hesitant to switch due to the reduced costs and ease of use associated with bolusdosing.36

The Stedivaze patent estate includes a 1999 composition of matter patent that provides protection through 2024 (assuming a five-year extension from expiration in 2019) and a 2008 unit dosing patent that provides coverage through 2033 (assuming a five-yearextension from expiration in 2028). The model assumes the unit-dose patent will provide protection through 2026.


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FAMILIONFAMILY OF CARDIAC TESTSClinical Datas FAMILIONtest franchise of commercialized tests includes:

Table 5: FAMILION Tests

FAMILIONLQTSThe FAMILION LQTS test is comprised of five genes (KCNQ1, KCNH2,SCN5A, KCNE1 and KCNE2). The FAMILION LQTS test will identify amutation in approximately 75% of patients with a high index of suspicion forLQTS.

FAMILIONCPVTThe FAMILION CPVT test is comprised of a single gene (RYR2). TheFAMILION CPVT Test will identify a mutation in approximately 55% ofpatients with a high index of suspicion for CPVT.

FAMILIONBrS

The FAMILION BrS test is comprised of a single gene (SCN5A). The

FAMILIONBrugada Syndrome Test will identify a mutation in approximately25% of patients with a high index of suspicion for Brugada Syndrome.

FAMILIONHCMThe FAMILIONHCM test is comprised of nine sarcomeric genes and threeHCM mimicker genes). The FAMILIONHCM Test will identify a mutation inapproximately 50%-60% of patients with a high index of suspicion for HCM.

FAMILIONARVCThe FAMILION ARVC test is comprised of five genes (PKP2, DSP, DSG2,DSC2, and TMEM43). The FAMILIONARVC Test will identify a mutation inapproximately 40%-50% of patients with a high index of suspicion for ARVC.

FAMILIONDCMThe FAMILION DCM test is comprised of 12 genes most commonlyassociated with DCM. FAMILION DCM Test will also identify mutations inSCN5Aand ANKRD1, two genes known to account for 5% of gene mutationsin familial DCM patients.

FAMILIONCD-DCMThe FAMILION CD-DCM test is comprised of 2 genes most commonlyassociated with CD-DCM (LMNA andSCN5A). The FAMILIONCD-DCM Testwill identify a mutation in approximately 40%-50% of patients with conductiondisease.

FAMILIONSQTSThe FAMILION SQTS test is comprised of 3 genes most commonlyassociated with SQTS. FAMILION SQTS Test will identify mutations inKCNH2, KCNQ1, and KCNJ2.


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OTHER THERAPEUTICS AND GENETIC TESTS IN DEVELOPMENTTherapeutic Programs

y ATL313 (Ophthalmic diseases & B-cell cancers). ATL313 is a selective AR2A agonist inpreclinical development as a topical treatment for glaucoma that has shown significant effects onlowering intra-ocular pressure in both small and large animal models. Santen Pharmaceutical,CLDAs ophthalmic partner, has exercised its option to further develop ATL313 for the treatmentof glaucoma and plans to file an IND for the drug with the FDA for this indication, expected withinthe next 12 months. ATL313 is also in development as a treatment option for B-cell cancers, suchas multiple myeloma, subject to a license agreement with Zalicus Inc. (NasdaqGM: ZLCS)(formerly CombinatoRx, Inc.). Zalicus is responsible for both preclinical and clinical developmentunder the terms of the collaboration.

y ATL844 (Asthma & Diabetes). CLDA is developing ATL844 for the treatment of asthma and/ordiabetes. Acting as an AR2B antagonist, this compound has shown significant pharmacodynamiceffects in animal models for both asthma and diabetes. The Company is proceeding with atoxicology and chemistry program and, with success, it is expected that they will file and IND tocontinue development of this compound in human trials. ATL844 is also the subject of an optionagreement for an exclusive license by Novartis for the treatment of asthma and diabetes.

y ATL1222 (Inflammation). ATL1222 is a highly selective adenosine 2A receptor agonist indevelopment as an anti-inflammatory agent for the treatment of acute inflammatory conditionsbased on effects demonstrated in animal models. ATL1222 is being evaluated inpharmacodynamic studies and, with success, we would expect to file an IND to continue thedevelopment of this compound in human trials.

y ATL316 (Indications TBD). AVN316 is a small molecule that potently inhibits the beta-cateninpathway in a variety of model systems. This compound and program is under consideration forfurther development and potential partnering.

Genetic Testing Programs

y PGxPredict: Rituximab. The PGxPredict: Rituximab test is used to indentify follicularlymphoma patients who are more like to respond to rituximab monotherapy. The test is based onvariations in the FCGR3A gene. Approximately 20% of patients with a certain isoform of FCGR3Aare predicted to respond better to the drug than patients with alternative isoforms.


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y Other FCGR (Fc Gamma Receptor) Tests. CLDA is working on various collaborations todevelop genetic tests to determine a patients response to other monoclonal antibody therapies.


INVESTMENT CONCERNS AND RISKSFor a complete description of risks and uncertainties related to Clinical Data, Inc.s business, seethe Risk Factors section in Clinical Datas SEC filings, which can be accessed directly from theSEC Edgar filings at www.sec.gov. Potential risks include:

Stock risk and market risk: There is a limited trading market for the Companys common stock.There can be no assurance that an active and liquid trading market will develop or, if developed, thatit will be sustained, which could limit ones ability to buy or sell the Companys common stock at adesired price. Investors should also consider technical risks common to many small-cap or micro-capstock investments, such as small float, risk of dilution, dependence upon key personnel, and thestrength of competitors that may be larger and better capitalized.

New and rapidly changing field: The pharmaceutical and biotechnological markets are rapidlyevolving, and research and development are expected to continue at an accelerated pace withincreased frequency. Other companies are also actively engaged in the development of therapies todirectly or indirectly treat those disorders being pursued by Clinical Data. These companies may havesubstantially greater research and development capabilities, as well as significantly greatermarketing, financial, and human resources abilities than Clinical Data.

Products still in development phases: Although the Company intends to continue with clinicaldevelopment of vilazodone for depression, Stedivaze a cardiac stress agent, and other pipelinecandidates in various indications, the successful development of the Companys product candidatesis uncertain. Product development costs and timelines can vary significantly for each productcandidate and are difficult to accurately predict. In addition, products in development that appear tobe promising may not reach commercialization for various reasons, including failure to achieve

regulatory approvals, safety concerns, and/or the inability to be manufactured at a reasonable cost. Funding requirements: It is difficult to predict the Companys future capital requirements. The

Company may need additional financing to continue funding the research and development of itsproducts and to expand its business. There is no guarantee that it can secure the desired futurecapital or, if sufficient capital is secured, that current shareholders will not suffer significant dilution.

Regulatory risk: Various statutes and regulations also govern or influence the manufacturing, safety,labeling, storage, record keeping and marketing of each product. The lengthy process of seekingapproval and the subsequent compliance with applicable statutes and regulations require theexpenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory


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approvals could materially adversely affect Clinical Datas business. There is no guarantee thatClinical Datas products will be approved by the U.S. Food and Drug Administration (FDA) orinternational regulatory bodies for marketing in the U.S. or abroad.

The Company may need to raise additional capital, which may not be available on termsacceptable to them, if at all:As the Company continues to expand their research and developmentand sales and marketing activities, they may need to raise additional capital, which may not be

available on terms acceptable to them, if at all. If the Company cannot raise necessary additionalcapital on acceptable terms, they may not be able to increase sales, develop or enhance theirproducts and services, take advantage of future opportunities, or respond to competitive pressures orunanticipated requirements, any of which could cause their business to suffer.

Competitive risk: The biotechnology industry is extremely competitive, mainly due to its large marketpotential. Many companies are developing products for the same therapeutic indications targeted byClinical Data. These companies may have substantially more resources than Clinical Data, whichcould adversely affect the Companys position in the market place.

FINANCIAL FORECASTS&VALUATIONThe following assumptions refer to CLDAs revenue model, annual earnings model, and valuationanalysis. The revenue estimates are for: vilazodone sales revenue in the US (excluding revenue frominternational sales orpartnershipor collaboration opportunities in the USor internationally); Stedivazesales revenue in the US (excluding revenue from international sales or partnership or collaborationopportunities in the USor internationally): andFAMILION test sales revenue in the US. We have also notincludedpotentialupfront fees ormilestone revenue from, nor expenses associated with, CLDAs earlystage product candidates. Given that we expectCLDA to seekpartnerships and/ormonetize some ofthese assets, we treat these products as valuation-neutral toourmodel.

HISTORICAL BALANCE SHEET


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REVENUE ASSUMPTIONS

The following revenue assumptions refer to US sales of vilazodone in major depressive disorder(MDD)only, excludingpotential sales fromother indications such as general anxiety disorder(GAD); USsalesof Stedivaze; and US sales of the FAMILION family ofproducts. The revenue assumptions excludeinternational sales and/orpartnershipor collaboration opportunities in the USor internationalmarkets.

$ in thousands, exceptper share data

FY ending March 31

ASSETS 30-Jun-10 31-Mar-10

Current Assets:

Cash and cash equivalents 63,487$ 49,245$

Marketable securities - -

Accounts receivable, net 3,057 2,851Prepaid expenses / other current assets 1,291 1,488

Assets of discontinued operations - -

Total Current Assets: 67,835 53,584

Marketable securities - -

Property, plant and equipment, net 2,567 2,795

Goodwill 31,849 31,849

Intangible assets, net 10,227 10,665

Other assets, net 62 62Assets of discontinued operations - -

TOTAL ASSETS: 112,540$ 98,955$

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Current portion of long-term debt 6,541$ 6,635$

Current portion of capital leases 140 138

Accounts payable 7,304 5,550

Accrued expenses 7,029 25,065

Customer advances and deferred revenue - -

Other current liabilities - -

Liabilities of discountinued operations - -

Total current liabilities: 21,014 37,388

Long-Term Liabilities:

Long-term debt, net of current portion 9,900 11,329

Convertible note payable, net of unamortized discount 30,501 30,129

Capital lease obligations, net of current portion 121 157

Contingent acquisition costs 15,372 16,039

Other Long-term Liabilities 18 20

Liabilities of discontinued operations - -

Total long-term liabilities: 55,912 57,674

Stockholders' Equity:

Preferred Stock - -

Common stock 298 265

Additional paid-in capital 388,953 343,345

Accumulated deficit (353,637) (339,717)

Treasury stock - -

Deferred compensation - -

Accumulated other comprehensive income - -

Total stockholders' equity: 35,614 3,893

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 112,540$ 98,955$


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Vilazodone Assumptions:

P There are 211,000,000 antidepressant prescriptions written annually37;

P Approximately 60% of the antidepressant prescriptions written are written for the major depressivedisorder (MDD) indication38;

P Vilazodone penetrates the market beginning in FY2012 (CY2011) at a price of $114 perprescription39;

P The price per prescription grows at an annual rate of 4%40;

P Vilazodone penetrates 0.3% of the addressable market in launch year and reaches a peakpenetration of 3% of the addressable market in FY201841

; and

P The vilazodone patent expires in FY2020.

Stedivaze Assumptions:PApproximately 16 million Americans are affected by coronary artery disease on an annual basis and

between 7.5 million and 9.3 million patients (approximately 50%) will receive myocardial perfusionimaging scans. Approximately 50% of the 8.4 million patients, or 4.2 million, require the use of apharmacologic stress agent42,43;

P Of the patients that receive a pharmacologic stress agent, 100% are addressable by Stedivaze;

P The addressable market will grow at an annual rate of 10% from FY2010 through FY2015 and anannual rate of 3% from FY2015 through perpetuity44;

37IMS Healths National Prescription Audit 2009.

38IMS Healths National Drug and Therapeutic Index 2006.

39IMS Healths National Prescription Audit 2008. The estimated price of $114.36 is the weighted-average price of branded

antidepressants with total number of prescriptions greater than 10 million in 2008 (Lexapro, Cymbalta, and Effexor) discounted with

a blended rebate of 6%.40The average annual prescription price growth rates for Lexapro, Cymbalta, and Effexor XR since 2004 are 7%, 5%, and 5%,

respectively.41

Vilazodones estimated launch curve is consistent with the launch curves of Cymbalta and Lexapro. 42

According to the American Heart Association (2008), approximately 16 million Americans have coronary heart disease.43

According to Astellas Pharma US, Inc., 7.5 million to 9.3 million MPI scans are performed annually, and 50% require apharmacologic stress agent.. Astellas press release, June 24, 2008, Astellas Launches Lexiscan (Regadenoson) Injection for useas a Pharmacologic Stress Agent in Radionuclide Myocardial Perfusion Imaging (MPI). 44

According to AMR data, the compounded annual growth rate of pharmacologic MPIs since 1996 is 11.6%. We assume an annualgrowth rate of 10% will continue through 2014 as better agents (like selective A2A agonists) drive adoption of pharmacologic scansdo to improved AE profiles and ease of use. Additionally, our model does not take into account other modalities such as MRI andEcho which are likely to contribute to growth rates as switchover occurs. Finally, changing demographics, such as population aging

Vilazodone: Depression

Number of Total Prescriptions 211,000,000 Year penetration starts 2012

Percent of Total Addressable 60% Starting penetration as % of peak 10.0%

Addressable Market Growth Rate 2% Years to reach peak penetration 6

Price per Prescription (Net) $114 Peak penetration 3%

Treatment price growth 4% Duration of peak penetration in years 3

Clinical Progress 2nd Phase III Royalty rate (payable to MRK) 10%

Stedivaze (apadenoson): Cardiovascular Imaging

Year penetration starts FY2015 Number of Procedures 4,200,000

Starting penetration rate 4.0% Percent addressable 100%

Years between penetration start and peak 4 Addressable Market Growth Rate 10%,3%

Peak penetration 30.0% Price per Scan $188

Duration of peak penetration in years 2 Treatment price growth 3%

Clinical Progress Phase III Royalty rate 5%


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P Stedivaze penetrates the market beginning in FY2015 at a price of $188 per vial growing 3%annually45;

P Stedivaze penetrates 4% of the market in launch year with a peak penetration of 30% reached inFY2019. Assumes penetration rates begin to decline following the expiration of CorVues patent inFY2018 and following the expiration of Lexiscans patent in FY202546; and

P Stedivazes patent expires in FY2027.47


CASHFLOW MODELVilazodone

and greater rates of obesity, are expected to contribute to overall growth in cardiovascular disease and related cardiovascularimaging market..45

The Red Book average wholesale price (AWP) of Lexiscan is $242.82. The Wholesale Acquisition Cost (WAC) for Lexiscan is$202.35. We assume approximately 7% in total discounts (including a 2% wholesaler discount and a 5% hospital/GPO discount)from the WAC, which results in a discounted price of $188.19 in 2009. Given that Stedivaze has best-in-class potential, it mayeventually command a premium price to Lexiscan; however, our model does not include this upside.46

We assume a 35% penetration for several reasons. First, the market is relatively undeveloped with two primary products,AdenoScan (adenosine) and Persantine (dipyridamole), holding combined 90% market share. Second, it is expected that Lexiscanwill cannibalize AdenoScan as both are marketed by Astellas. Third, Stedivaze has best-in-class attributes as compared toAdenoScan, Lexiscan, and CorVue because it is administered by bolus injection and it has an improved AE profile. Note Corvuesfate is unclear given that the FDA panel voted against CorVue in October 2009, saying the data did not prove the drug was aseffective as adenosine. While Lexiscan and CorVue (if ever approved) are administered by bolus injection, they have comparableAE profiles to AdenoScan. Fourth, AdenoScan (adenosine) will only become generic in 2012 (although it should be largely replacedby Lexiscan). CorVue (if ever approved) will be generic in 2017, and Lexiscan will be generic in 2024; thus, we anticipate minimalgeneric competition until 2017. We also assume Lexiscan will have substantially cannibalized AdenoScan by the time a genericversion is available, and physicians will be hesitant to switch due to the reduced costs and ease of use associated with bolusdosing.47

The Stedivaze patent estate includes a 1999 composition of matter patent that provides protection through 2024 (assuming a five-year extension from expiration in 2019) and a 2008 unit dosing patent that provides coverage through 2033 (assuming a five-yearextension from expiration in 2028). The model assumes the unit-dose patent will provide protection through 2026.


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Assumptions:P CLDA will receive 100% of total sales, net a 10% royalty due to Merck KGaA for acquiring the rights to

vilazodone;

P Any potential milestones payable to Merck KGaA will be paid in stock; therefore, they will have noimpact on cashflows;

P COGS are approximately 9% of total sales;

P SG&A expenses include a sales force of 500 reps at a fully-loaded cost of $225,000 per rep plus

expenses for promotional materials, samples, advertising agency, and journal ads. There are anumber of sales force options that could be pursued, such as, a highly specialized sales force totarget the internal, high prescribers, a co promotion agreement with another pharmaceutical company,or operating through a contract sales organization (CSO).

P R&D expenses of $30.9 million in FY2010 for manufacturing batches, NDA filing, and other pre-launchactivities, $2 million in FY2011 for launch preparation, $5 million in FY2012, $10 million from FY2013to FY2020, and $1 million from FY2020 through perpetuity following patent expiration in FY2020.

Stedivaze

$ in thousands 2010A 2011E 2012E 2013E 2014E 2015E

Revenue

Drug Sales - - 52,569 167,297 354,938 502,024

Milestones - - - - - -

Total Revenue -$ -$ 52,569$ 167,297$ 354,938$ 502,024$

COGS - - 4,731 15,057 31,944 45,182

%Margin 0

%0

% 9% 9% 9% 9%

MerckRoyalties 10% 10% 10% 10% 10% 10%

- - 5,257 16,730 35,494 50,202

Gross Profit -$ -$ 42,581$ 135,511$ 287,499$ 406,639$% Margin 0 % 0% 81% 81% 81% 81%

OperatingExpenses

S&M 1,212 35,000 120,000 125,000 130,000 133,209

% of Revenue 0 % 0% 228% 75% 37% 27%

R&D 30,900 2,000 5,000 10,000 10,000 10,000

% of Revenue 0 % 0% 10% 6% 3% 2%

G&A 1,500 3,000 3,500 4,000 4,500 5,000

% of Revenue 0 % 0% 7% 2% 1% 1%

Operating Profit (33,612)$ (40,000)$ (85,919)$ (3,489)$ 142,999$ 258,430$

% Margin 0 % 0% -163% -2% 40% 51%

Taxes - - - (1,326) 54,340 98,203

Post-Tax Profit (33,612)$ (40,000)$ (85,919)$ (2,163)$ 88,660$ 160,226$


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Assumptions:P CLDA will receive 100% of total sales, net a 5% royalty due to the University of Virginia for the rights to

Stedivaze;

P CLDA will pay ATG cash milestones of $5 million in FY2014, $10 million in FY2015, and $15 million inFY2017;

P CLDA is responsible for all Stedivaze-related costs, including COGS, SG&A, and R&D;

P COGS are approximately $4.75 per vial, including approximately $1.50 per vial for shipping anddistribution, $1.75 per vial for warehousing, and $1.50 per vial for manufacturing;48

P S&M expenses includes a sales force of 100 reps at a fully-loaded cost of $200,000 per rep andexpenses for promotional materials, advertising agency, and journal ads;

P R&D expenses of $5.8 million in FY2010, $28 million in FY2011, $25,000 million in FY2012, $15,000million in FY 2013, $2 million in FY2014, and $1 million in FY2015 through perpetuity. Theseassumptions include expenses for two pivotal Phase III trials of Stedivaze, two Phase I feasibilitystudies in patients with asthma and COPD, as well as various other small proof-of-concept-studies.

48Favorable COGS are driven by the potency of apadenoson (Stedivaze). On average, each dose contains approximately 125 g of

apadenoson active pharmaceutical ingredient (API); thus, one gram of apadenoson API should yield approximately 8000 doses.


RevenueDr - - - - - ,

t - - - - - -

TotalRevenue -$ -$ -$ -$ -$ 66,404$

G!

- - - - -",

# $ %

% Margin 0 % 0% 0% 0% 0% 2%

Royaltiesto&

VA 5% 5% 5% 5% 5% 5%

- - - - - ' , ' ( )

MilestonestoATG - - - 0 , ) ) ) 1 ) , ) ) )

Gross Profit -$ -$ -$ -$ (5,000)$ 51,756$

% Margin 0 % 0% 0% 0% 0% 78%

OperatingExpenses

S&M - - - -2

, 3 4 4 5 6 , 6 6 6% of Revenue 0 % 0% 0% 0% 0% 30%

R&D 5, 7 6 6 5 7 , 6 6 6 5 5, 6 6 6 8 5, 6 6 6 5 , 6 6 6 8 , 6 6 6

% of Revenue 0 % 0% 0% 0% 0% 2%

9 &A 500 500 8 ,000 8 ,500 4 ,000 3 ,000

% of Revenue 0 % 0% 0% 0% 0% 9%

Operating Profit (6,300)$ (28,500)$ (26,000)$ (16,500)$ (14,633)$ 24,756$

% Margin 0 % 0% 0% 0% 0% 37%

Taxes - - - - -@,

A

07

Post-Tax Profit (6,300)$ (28,500)$ (26,000)$ (16,500)$ (14,633)$ 15,349$


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FAMILION

Assumptions:P Revenue growth from $13.085 million in FY2010 to $27 million in FY2014, followed by 20% annual

revenue growth from FY2014 through FY2020;

P COGS of 48% of revenue in FY2010, 40% of revenue in FY2011, and 35% of revenue in FY2012through FY2020;

P S&M expenses include a sales force of 15 reps at a fully-loaded cost of $200,000 per rep andexpenses for promotional materials, advertising agency, and journal ads;

P R&D expenses are 2% of revenue from FY2010 through FY2020;and

P G&A expenses include patient pre-authorization process expenses plus other administrative costs.

INCOME STATEMENT


RevenueTest Sales 13,085 15,702 18,842 22,611 27,133 32,560

Total Revenue 13,085$ 15,702$ 18,842$ 22,611$ 27,133$ 32,560$

COGS 6,244 6,281 6,595 7,914 9,497 11,396% Margin 48 % 40% 35% 35% 35% 35%

Gross Profit 6,841$ 9,421$ 12,248$ 14,697$ 17,636$ 21,164$

% Margin 52% 6 0% 65% 65% 65% 65%

OperatingExpenses

S&M 8,100 6,400 6,500 8,000 9,000 10,000

% of Revenue 62% 41% 34% 35% 33% 31%

R&D 262 314 377 452 543 651

% of Revenue 2% 2% 2% 2% 2% 2%

G&A 3,500 3,500 3,500 3,500 3,500 3,500

% of Revenue 27% 22% 19% 15% 13% 11%

Operating Profit (5,021)$ (793)$ 1,871$ 2,745$ 4,594$ 7,013$

% Margin -38% -5% 10% 12% 17% 22%

Taxes - - - - 1,746 2,665

Post-Tax Profit (5,021)$ (793)$ 1,871$ 2,745$ 2,848$ 4,348$


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Income StatementAssumptions:P Interest expense includes interest and principal payments for the $22 million, five-year note bearing

interest at 6% and the $3.2 million, 32-month note bearing interest at 11% entered into during theacquisition of Adenosine Therapeutics in August 2008, and the $50 million convertible debt financingbearing interest at 9.72% due February 2017;

P Diluted shares outstanding include approximately 6.1 million shares issuable upon the conversion ofconvertible notes and approximately 4.3 million shares issuable upon the exercise of warrants;

P Mix of debt and equity financings in FY2011 and FY2012 to fund ongoing clinical trials for Stedivazeand sales and marketing efforts for the commercialization of vilazodone and Stedivaze; and

P SG&A includes $6 million annually for, among other expenses, costs associated with audits,insurance, Sarbanes-Oxley, as well as M&A activity. SG&A also includes sample manufacturing anddistribution expenses along with other costs associated with pre-launch activity for vilazodone.

FYending March 31 2010 2011 2012 2013 2014 2015

($ in thouB

andB

, except perB

hare data)

2010 2011 2012 2013 2014 2015

Total revenue 13,085$ 15,702$ 71,C

12$ 189,908$ 382,071$D

00,988$

COGE

D

,244D

,281 11,326 22,971 41,441 57,906

Grossprofit 6,841$ 9,421$ 60,086$ 166,937$ 340,630$ 543,082$

Operatingexpenses

F & G 56,785 43,200 40,000 20,000 12,543 11,651

SG&A 31,854 45,000 140,500 148,000 160,633 183,709

- - - - - -

Totalexpense 88,639 88,200 180,500 168,000 173,176 195,361

Operatingprofit (81,798)$ (78,779)$ (120,414)$ (1,063)$ 167,454$ 347,721$

Non-operatingincome/expense

IHtere

I

t eP

penI

e (12,790) (11,007) (15,308) (14,728) (12,288) (9,860)

Intere

I

tQ

ncome - - - - - -R

t S er 200 250 300 350 400 450

Totalnon-operating (12,590) (10,757) (15,008) (14,378) (11,888) (9,410)

Pretaxprofit (94,388)$ (89,536)$ (135,422)$ (15,441)$ 155,566$ 338,311$

Income taP

- - - - 59,115 128,558

Netincome (94,388)$ (89,536)$ (135,422)$ (15,441)$ 96,451$ 209,753$

Earnings (loss)pershare (3.16)$ (2.77)$ (3.86)$ (0.44)$ 2.75$ 5.89$

Dilutedsharesoutstanding 44,233 46,733 49,483 49,483 49,483 49,983


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DISCOUNTED CASH FLOW (DCF)MODEL

Our DCF model, using a discount rate of 12.5%, suggests a value of $33.11 for CLDA shares.

FY T U V i U W MarX Y ` a 2011 2012 2013 2014 2015

($ib

tc

de

sf b

g

s,h

ip h q

tq h

r sc

f

rh

g

f

tf

)

2011 2012 2013 2014 2015

Revenue 15, r s tu r 1,v

12$ 189,908$ w 82,071$ x 00,988$

y erating income (78,779) (120,v

14) (1,063) 167,454 347,721

Net income (89,536) (135,422) (15,441) 96,451 209,753

epreciation/amorti ation 3,200 3,200 3,200 3,200 3,200

Stock- asedcompensation 8,000 8,500 9,000 9,500 10,000

Tax losscarr

for

ards - - - 59,115 128,558

apital expenditures (500) (750) (1,000) (1,250) (1,500)

Asset purchases - - - - -

yther - - - - -

Total cash flowadjustments 10,700 10,950 11,200 70,565 140,258Freecash flow (78,836)$ (124,472)$ (4,241)$ 167,016$ 350,011$

Disc unt ate 2.0% 3.0% 4.0% 2.0% 3.0% 4.0%

7.5% 2,136,434$ 791,420$ 976,775$ 1,268,046$ 2,927,854$ 3,113,208$ 3,404,479$

10.0% 1,733,075$ 385,404$ 444,780$ 523,948$ 2,118,479$ 2,177,855$ 2,257,023$

12.5% 1,415,098$ 209,614$ 233,950$ 264,012$ 1,624,711$ 1,649,047$ 1,679,109$

15.0% 1,162,144$ 121,755$ 133,194$ 146,713$ 1,283,898$ 1,295,338$ 1,308,857$

17.5% 959,212$ 73,960$ 79,836$ 86,582$ 1,033,172$ 1,039,047$ 1,045,794$

Disc unt ate NetDebt 2.0% 3.0% 4.0% 2.0% 3.0% 4.0%

7.5% 10,814$ 2,917,040$ 3,113,208$ 3,393,665$ 58.95$ 62.91$ 68.58$

10.0% 10,814$ 2,107,665$ 2,167,041$ 2,246,209$ 42.59$ 43.79$ 45.39$

12.5% 10,814$ 1,613,897$ 1,638,233$ 1,668,295$ 32.62$ 33.11$ 33.71$

15.0% 10,814$ 1,273,084$ 1,284,524$ 1,298,043$ 25.73$ 25.96$ 26.23$

17.5% 10,814$ 1,022,358$ 1,028,233$ 1,034,980$ 20.66$ 20.78$ 20.92$

Disc

unt

ate 2.0% 3.0% 4.0% 2.0% 3.0% 4.0%

7.5% 27.0% 31.4% 37.2% 12.52 15.45 20.06

10.0% 18.2% 20.4% 23.2% 8.61 9.93 11.70

12.5% 12.9% 14.2% 15.7% 6.56 7.32 8.26

15.0% 9.5% 10.3% 11.2% 5.30 5.79 6.38

17.5% 7.2% 7.7% 8.3% 4.44 4.80 5.20

Terminal

alue as% Enterprise

alue Implied E ITD

Multiple

Disc unted

Cash Fl ws

(2008-2023)

PV ofTerminalValue at a

Perpetual growthrate of rFCF EnterpriseValue

Total Equit Value ValueperDiluted Share


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DISCLOSURESANALYST(s) CERTIFICATION: The analyst(s) responsible for covering the securities in this report certify that theviews expressed in this research report accurately reflect their personal views about Clinical Data, Inc. (theCompany) and its securities. The analyst(s) responsible for covering the securities in this report certify that no partof their compensation was, is, or will be directly or indirectly related to the specific recommendation or view containedin this research report.

MEANINGS OF RATINGS: Our rating system is based upon 12 to 36 month price targets. BUY describes stocksthat we expect to appreciate by more than 20%. HOLD describes stocks that we expect to change plus or minus20%. SELL describes stocks that we expect to decline by more than 20%. SC describes stocks that Griffin Securitieshas Suspended Coverage of this Company and price target, if any, for this stock, because it does not currently havea sufficient basis for determining a rating or target and/or Griffin Securities is redirecting its research resources. Theprevious investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon.NR describes stocks that are Not Rated, indicating that Griffin Securities does not cover or rate this Company.

DISTRIBUTION OF RATINGS: Currently Griffin Securities has assigned BUY ratings or NO RATINGS on all of thecompanies it covers. The Company has provided investment-banking services for 18% of companies in which it hashad BUY ratings in the past 12 months, 0% for companies in which it has had NR or no coverage in the past 12months or has suspended coverage (SC) in the past 12 months.

MARKET MAKING: Griffin Securities does not maintain a market in the shares of this Company or any otherCompany mentioned in the report.

COMPENSATION OR SECURITIES OWNERSHIP: The analyst(s) responsible for covering the securities in thisreport receive compensation based upon, among other factors, the overall profitability of Griffin Securities, includingprofits derived from investment banking revenue. The analyst(s) that prepared the research report did not receive anycompensation from the Company or any other companies mentioned in this report in connection with the preparationof this report. The analysts responsible for covering the securities in this report currently do not own common stock inthe Company, but in the future may from time to time engage in transactions with respect to the Company or othercompanies mentioned in the report. Griffin Securities from time to time in the future may request expenses to be paidfor copying, printing, mailing and distribution of the report by the Company and other companies mentioned in thisreport. Griffin Securities has received compensation from the Company in the past 12 months for investment banking-related services. Griffin Securities expects to receive, or intends to seek, compensation for investment bankingservices from the Company in the next three months.

PRICE CHART

Source: BigCharts.com

3/05/2007 Initiating Coverage: share price: $13.82; rating: BUY; 12-month price target: $23.00 (adjusted for 3:2stock split); 12/21/2007 Research Update: share price: $22.63; rating: BUY; 12-month price target: $45.00;7/23/2008 Research Update: share price: $16.13; rating: BUY; 12-month price target: $45.00; 8/06/2008 Research Update: share price: $17.43; rating: BUY; 12-month price target: $52.00; 6/22/2009 Research Update:share price: $12.30; rating: BUY; 12-month price target: $38.00. 11/25/2009 Research Update: share price: $15.96;

BUY

BUY

BUY BUY

BUY

BUY


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rating: BUY; 12-month price target: $38.00. 10/1/2010 Research Update: share price: $16.87; rating: BUY; 12-month price target: $33.00.

FORWARD-LOOKING STATEMENTS: This Report contains forward-looking statements, which involve risks anduncertainties. Actual results may differ significantly from such forward-looking statements. Factors that might causesuch a difference include, but are not limited to, those discussed in the Risk Factors section in the SEC filingsavailable in electronic format through SEC Edgar filings at www.SEC.gov on the Internet.

GENERAL: Griffin Securities, Inc. (Griffin Securities) a FINRA member firm with its principal office in New York,New York, USA is an investment banking firm providing corporate finance, merger and acquisitions, brokerage, andinvestment opportunities for institutional, corporate, and private clients. The analyst(s) are employed by GriffinSecurities. Our research professionals provide important input into our investment banking and other businessselection processes. Our salespeople, traders, and other professionals may provide oral or written marketcommentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressedherein, and our proprietary trading and investing businesses may make investment decisions that are inconsistentwith the recommendations expressed herein.

Griffin Securities may from time to time perform corporate finance or other services for some companies describedherein and may occasionally possess material, nonpublic information regarding such companies. This information isnot used in preparation of the opinions and estimates herein. While the information contained in this report and theopinions contained herein are based on sources believed to be reliable, Griffin Securities has not independentlyverified the facts, assumptions and estimates contained in this report. Accordingly, no representation or warranty,

express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness orcorrectness of the information and opinions contained in this report.

The information contained herein is not a complete analysis of every material fact in respect to any company, industryor security. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security inany jurisdiction where such an offer or solicitation would be illegal. We are not soliciting any action based on thismaterial. It is for the general information of clients of Griffin Securities. It does not take into account the particularinvestment objectives, financial situations, or needs of individual clients. Before acting on any advice orrecommendation in this material, clients should consider whether it is suitable for their particular circumstances and, ifnecessary, seek professional advice. Certain transactions - including those involving futures, options, and otherderivatives as well as non-investment-grade securities - give rise to substantial risk and are not suitable for allinvestors. The material is based on information that we consider reliable, but we do not represent that it is accurate orcomplete, and it should not be relied on as such. The information contained in this report is subject to change withoutnotice and Griffin Securities assumes no responsibility to update the report. In addition, regulatory, compliance, orother reasons may prevent us from providing updates.

DISCLOSURES FOR OTHER COMPANIES MENTIONED IN THIS REPORT: To obtain applicable currentdisclosures in electronic format for the subject companies in this report, please refer to SEC Edgar filings atwww.SEC.gov. In particular, for a description of risks and uncertainties related to subject companies businesses inthis report, see the Risk Factors section in the SEC filings.


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clda research update 1oct10 final

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