Harnessing Biodiversity for Peptide Therapeutics

Dr Paul Watt, CEO

Mr Nick Woolf, CFO & VP Corporate Development

19 June 2013

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DisclaimerThe purpose of the presentation is to provide an update of the business of Phylogica Limited (ASX:PYC) [‘Phylogica’]. These slides have been prepared as a presentation aid only and the information they contain may require further explanation and/or clarification. Accordingly, these slides and the information they contain should be read in conjunction with past and future announcements made by Phylogica and should not be relied upon as an independent source of information. Please contact Phylogica and/or refer to the Company's website for further information.

The views expressed in this presentation contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information.

Any forward looking statements in this presentation have been prepared on the basis of a number of assumptions which may prove incorrect and the current intentions, plans, expectations and beliefs about future events are subject to risks, uncertainties and other factors, many of which are outside Phylogica’s control. Important factors that could cause actual results to differ materially from assumptions or expectations expressed or implied in this presentation include known and unknown risks. Because actual results could differ materially to assumptions made and Phylogica’s current intentions, plans, expectations and beliefs about the future, you are urged to view all forward looking statements contained in this presentation with caution.

This presentation should not be relied on as a recommendation or forecast by Phylogica. Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

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About Phylogica

Listed on Australian Stock Exchange in 2005

Provide peptide drug discovery services to the Pharmaceutical industry

Own unique proprietary class of peptide therapeutics (Phylomers®)

Broad IP estate with multiple granted patents from 11 patent families

‘Discovery Alliance’ business model

Alliances with Roche/Genentech, MedImmune, Pfizer and Janssen

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Top-20 shareholders

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Position Holder name Shares % of issued

1 Hockings Family 35,251,999 7.55%

2 Telethon Institute 20,605,501 4.41%

3 Andrew Swift 18,186,088 3.90%

4 Ascent BioMedical 16,949,152 3.63%

5 Paul Watt 16,758,730 3.59%

6 John Jelbert 11,492,398 2.46%

7 Anthony Torresan 9,400,000 2.01%

8 Richard Hopkins 8,958,779 1.92%

9 Nick Woolf 7,871,956 1.69%

10 Yellowrock PL 7,761,298 1.66%

11 Achim Schenk 6,974,535 1.49%

12 Paul Fielding 6,935,000 1.49%

13 Fitel Nom Ltd 6,141,230 1.32%

14 Bonaddio Family 6,120,801 1.31%

15 Peter Hui 5,200,000 1.11%

16 JMN SVCS 4,050,000 0.87%

17 Rossbel PL 4,000,000 0.86%

19 Red Boot 3,483,400 0.75%

20 Baron Ward 3,220,000 0.68%

Top-20 199,360,867 42.70%

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Leadership and experience

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Dr Douglas Wilson - Chairman• Former Senior Vice-President, Medicine for Boehringer Ingelheim • Overseen multiple drugs at all phases of development • Overseen many drugs successfully to the market in the USA

Dr Paul Watt – CEO• Commonwealth overseas scholarship recipient; Doctorate at the University of Oxford, • >45 publications, including several high-impact papers, inventor on 20 patent families • Post Doctoral appointments at Oxford and Harvard Universities• Over 10 years commercial biotech experience

Mr Nick Woolf – CFO & VP Corporate Development• 18 years experience in biotech industry, equity research & investment banking • Previously Chief Business Officer of Oxford BioMedica plc in the UK• Former Head of European Biotech Equity Research at ABN Amro • Qualified accountant and MA in Chemistry from the University of Oxford

Dr Richard Hopkins – COO & VP Research & Development• Doctorate from Murdoch University, Western Australia• Over 10 years commercial biotech experience • Overseen development of the Phylomer platform. • Over 20 publications and inventor on 13 patent families

Encoded from >35 biodiverse genomes derived from environments such volcanoes, geysers and undersea vents

Phylomer libraries contain >400 billion distinct peptide sequences

Pre-selected by evolution to allow survival, such as thermal stability

Dominant intellectual property over entire drug class

Watt PM (2006) Nature Biotechnology 24 (2):177-83

Phylomers derive from parts of biodiverse proteins

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Worlds richest source of diverse natural secondary and tertiary structures

Sourced from different evolutionary species

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Watt PM (2006), Nature Biotechnology, Vol 24 (2):177-83

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Uniquely integrated capabilities of Phylomer platform

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Citron(Citron Homology Domain)

Phylogica’s unique discovery platform:

Discover and validate new therapeutic targets found inside cells (Phenomica)

Develop therapeutic peptide leads against such targets

Deliver therapeutic cargoes into cells with cell penetrating peptides

Cell penetrating Phylomers: gaining access to intracellular targets

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Phylomers can expand the druggable landscape by >10-fold!!

Rapid growth in peptide drug market

Peptides are one of fastest growing drug classes

– 60 marketed peptides represent $13 billion market

– Peptide market growing twice as fast as small molecules

– New technologies are addressing traditional challenges for peptide development (eg: short half-life, poor stability)

– Growing Pharma interest: ~140 peptides in clinical development

Unmet need for therapeutic peptides against new target classes

Chemical & Engineering NewsMay 30, 2011Improving Peptides: Small firms develop better peptide drug candidates to expand this pharmaceutical class and attract big pharma partners (picture of Phylomer)

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Demand for novel approaches to peptide drug discovery

Find new structures within proteins selected by evolution for diversity,

stability and biological compatibility

Guess peptide sequence from random combinatorial libraries

(e.g. Affymax, Dyax, Isogenica, Ra, Bicycle, Peptidream)

Design peptide inhibitors that mimic known natural interfaces

(e.g. Kai, Aileron, Trimeris)

Limited success with conventional approaches has increased demand for

novel approaches

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Peers

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Co-development pathPhylogica HumansCo-development/Partner

HumansDiscovery

Fee-for-service screening against third party targets

Building long-term value through milestones and royalties

Increasing deal economics and share of down-stream value

Surplus cash flow funding platform enhancements and in-house R&D

Monetizing in-house Phylomers (eg: skincare cosmetics with Le Métier de Beauté)

Focus on near-term revenue

Collaborations and commercial partners validate Phylogica’s Phylomers

Janssen (Johnson & Johnson)– Collaboration to discover cell-penetrating peptides in Dec 2011– Multi-product agreement with minimum of 18 months research funding– Collaboration expanded in Jan 2013

Pfizer– Collaboration to discover peptide vaccines in Dec 2010– Milestone payments triggered in Dec 2011 and May 2012– Total deal value of up to US$135M & royalties on worldwide sales

MedImmune (AstraZeneca)– Collaboration to discover antibiotic peptides in Aug 2010– Progressed to final stage of research plan in Nov 2011– Total deal value of up to US$100M & royalties on worldwide sales

Roche/Genentech– Collaboration to discover brain delivery peptides in Dec 2009– Expanded to discover peptides that cross blood-brain barrier in May 2011

Le Métier de Beauté – License to commercialize a skin-repair peptide in cosmetic products in Sep 2012

Scope of deals underscores breadth of Phylomer platform

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Discussions ongoing with prospective or existing partners on new deals

Extensive pipeline of partnering opportunities

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Phylomer Platform Opportunity

In-House Activities & Partnerships

Peptide drugs against intractable intracellular targets

- Initiating new screens against high-value intracellular targets

Cell-penetrating & organ-specific delivery peptides (CPPs)

- 2nd generation libraries containing pathogenic genomes that penetrate specific cell types

- Janssen deal to discover tissue-specific CPPs

Peptide drugs against intractable extracellular targets

- In-house anti-CD40L program for Lupus & rheumatoid arthritis

- Developing new screening assays against high-value GPCRs1

Anti-microbial peptides - In-house discovery program against gram-negative bacteria

Phenomica target identification (ID) & validation

- Validated platform with collaborators at Cambridge University

- In-house target ID program against high-value cancer pathway

RNAi delivery peptides (RNAPs) - In-house proof-of-concept program to show RNAi delivery

1 G protein-coupled receptors are one of the largest classes of drug targets. These receptors are key regulators of cell biology, but some have been challenging to hit with conventional small molecule or antibody drugs because of their complex biological shapes

Increasing Pharma interest

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Three overlapping strategic phases

1. Partnering: generate near-term revenue from discovery alliances

2. Technological leadership: enhance platform through value-adding upgrades

3. In-house drug development: build value by advancing internal products

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Revenue Generation

Technological Enhancements

In-house Pipeline

2009 2011 2013

Anticipated technology milestones

Each milestone provides value-adding enhancement to Phylomer platform

- Boosts our attractiveness to discovery alliance partners and potential acquirers

Technology Purpose Estimated validation date

Endosomal Escape Trap Identifying new generation cell-penetrating peptides

Q4 FY2013

Functional CPP Trap Selecting peptides that have biological function

Q4 FY2013

Structure Trap Enriching libraries for drug-like structures

Q1 FY2014

Structure Clamp Locking transient structures into stable conformations

Q1 FY2014

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Comparable company: Peptidream Inc.

IPO DAY ONE DAY TWO DAY THREE250000%

450000%

650000%

850000%

1050000%

1250000%

Raised $50m in IPO at ¥2,500 giving market cap of $330m

Trading on Mothers Board in Tokyo – 1st day of trade 11th June 2013

Closing price after three days of ¥ 13,010 giving market cap of $1.7bn

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¥

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Phylogica vs. Peptidream

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Phylogica Peptidream

Listing ASX (PYC) Tokyo (4587)

Founded 2003 2006

Number of employees 30 60

Number of partnerships signed 4 9

Revenue 2012 $2 million $9 million

Net profit/loss 2012 Loss $4 million Profit $0.1 million

Cash 31/03/2013 $3 million $10 million (pre-IPO)

IPO March 2005 June 2013

Pre-money valuation at IPO $16 million $278 million

Current valuation $10 million $1.8 billion*

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PeptiDream's Peptide Discovery Platform System enables incorporation of modified unnatural amino acids into peptide libraries

PeptiDream has active discovery deals with nine companies, including Novartis, Ipsen, MedImmune and Amgen – deals are of similar size and economics to PYC’s deals

*at market close 17 June 2013

Summary

Assembled world-class peptide drug discovery platform – enormous value

Patent protection on worlds largest source of natural peptides and screening technologies

Successfully validated ‘Alliance Model’ with four blue chip partners

Anticipate near-term revenue growth and cash sustainability

Building value through technical enhancements and in-house R&D

Peer comparison provides first time indication of potential value

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Dr. Paul WattChief Executive OfficerTel: +61 8 9489 7777Fax: +61 8 9489 7700Mobile: +61 421 550 213paulw@phylogica.com

Nick WoolfCFO, VP Corporate Development

Tel: +61 8 9489 7777Fax: +61 8 9489 7700

Mobile: +61 417 986 005nwoolf@phylogica.com

Contact Details

www.phylogica.com