ArcticZymes Technologies — Investor Presentation 2016

Feb 11, 2016

Biotec Pharmacon

Capital Markets Day 11. February 2016

Agenda

Time	Presentation	Presenter
0900 – 0905	Introduction – Setting the scene	CEO Svein Lien
0905 – 0925	Innate immunity and Biotec's beta-glucans Woulgan® product development	CSO Rolf Engstad
0925 – 0950	Woulgan® - wound care: Vision, positioning and market opportunity • Market updates and commercial activities • Product potential and outlook •	VP Marketing Stuart Devine
0950 - 1000	Immunotherapy of Cancer	CSO Rolf Engstad
1000 – 1010	Q&A	All
1010 - 1045	ArcticZymes value proposition	MD Jethro Holter
1045 – 1055	Q&A	All
1055 – 1100	Closing remarks and outlook	CEO Svein Lien

Biotec in brief

A corporation of two independent versatile technology platforms

Beta-Glucans:

• Proprietary Beta-Glucans
• Immuno-modulatory substance activating the immune system
• Building up international sales organization in wound care
• Bulk sales of products for Animal Health and Nutrition
• Strong and experienced scientific team with in-house production

Enzymes - ArcticZymes:

• Unique Cold-adapted Enzymes for the life science industry based on species from the Barents Sea
• International marketing and sales team
• Established relation with core industrial companies (B2B)
• Strong and experienced scientific team with in house production

Biotec in brief

A corporation of two independent versatile technology platforms

Value proposition Beta-Glucans:

To become a competitive supplier of advanced wound care products under the Woulgan® brand while continue to build the other business areas including cancer

Value proposition Enzymes:

To expand the business into key platform technologies with a ground breaking strategic value

Biotec is emerging into a commercially driven company

Objectives with the Capital Market Day:

• Up to 2015 both business units have been establishing their respective strategic platforms
• During 2015 both took major steps towards fulfilling the value propositions:
• ArcticZymes reached break-even results with good growth, strengthen its management and used the established co-operation with industry's market leaders to initiate development of new products with a substantial strategic value
• Beta-Glucans started the build up of a wound care company with at least a \$100M potential, employing a number of experienced commercial key people, appointed distributors and started pre-launch activities
• The objectives with the CMD is to describe to you what Biotec has accomplished and where the Company is going

Time	Presentation	Presenter
0900 – 0905	Introduction – Setting the scene	CEO Svein Lien
0905 – 0925	Innate immunity and Biotec's beta-glucans Woulgan® product development	CSO Rolf Engstad
0925 – 0950	Woulgan® - wound care: Vision, positioning and market opportunity • Market updates and commercial activities • Product potential and outlook •	VP Marketing Stuart Devine
0950 - 1000	Immunotherapy of Cancer	CSO Rolf Engstad
1000 – 1010	Q&A	All
1010 - 1045	ArcticZymes value proposition	MD Jethro Holter
1045 – 1055	Q&A	All
1055 – 1100	Closing remarks and outlook	CEO Svein Lien

Innate immunity – how is it triggered?

	Innate immunity	Adaptive immunity
Main function	Prevent microorganisms (bacterial, fungal and viral pathogens) to invade the host & eliminate «non-self»
How are pathogens recognised	By fixed structures on pathogen groups	Learn to recognise any structure on pathogens
Response time	Immediate	Need days/weeks
Cells involved	Neutrophils, NK-cells Macrophages	T- and B-cells (antibodies)

Metchnikoff Elia (1887). "Sur la lutte des cellules de l'organisme contre l'invasion des microbes- On fighting cells of the body against invading microbes. Ann. Inst. Pasteur 1: 32

• Macrophages are known as Metchnikoffs soldiers killing pathogens & instructing the immune system
• Beta-glucans are recognised by macrophages as «representatives» for a fungal attack
• «Training of macrophages by beta-glucan» Saeed et al. Science 2014 ⁷

Beta-Glucan product portfolio

• Animal Health: Deliver feed ingredients to improve animal health in e.g. fish farming
• Nutrition: Deliver bulk ingredients for food supplements
• Cosmetic: Deliver bulk ingredients for cosmetic products
• Medicinal: Produces SBG for use in medical devices and for clinical trials as adjuvant in cancer treatment

M-Glucan® in aquaculture

Anti-viral response to M-Glucan in fish feed

Biotec's SBG® triggers innate immune responses

• Biotec SBG® is tailored for optimal binding to cells of the innate immune system, especially the macrophages triggering controlled and well regulated production of:
• Signal molecules alerting the immune system
• Growth factors supporting cell growth
• Increased bacterial killing and phagocytosis

• Increased antigen presentation

• Ideal candidate for many immunotherapeutic applications

• SBG is patent protected by a number of patent families covering production, formulation and application

SBG® in wound care – the results of macrophage activation

Proliferating cell count (fov)

• SBG® activates macrophages to produce signal molecules and growth factors resulting in:
• Increased wound contraction (bringing the wound edges closer to each other)
• Increased cell proliferation (new cells to support the healing process)
• New formation of blood vessels (angiogenesis)

(ref.: Skjæveland & Engstad 2013)

Product development Woulgan® A technology platform in Wound care

• Next generation products:
• Woulgan® compositions have been formulated as a dry dressing and spray
• The dressing composition is aimed for use on large exuding wounds where the gel format is less suitable
• The spray formulation is aimed for use on larger surface wounds like burns
• The products were tested in slow healing mice model (db/db mice). Ten mice used in each treatment group

Woulgan® in Spray - Proof of concept obtained

"Woulgan®" Spray in healing of wounds in db/db mice. Spray applied at Day 0, 2, 4 and 6.

• Spray control without SBG (water, CMC, glycerol)
• "Woulgan®" spray with SBG
• Woulgan® gel
• Water water control with occlusive dressing only.

Woulgan® in Dressings - Proof of concept obtained

Dry "Woulgan®" Dressing in healing of wounds in db/db mice. Dressing applied at Day 0, 3, 6 and 9.

• Dressing control without SBG
• "Woulgan" dressing with SBG;
• Water water control with occlusive dressing only.

Woulgan® development program

Product	Discovery/ formulation	Pre-clinical proof of concept	Clinical evaluation (medical device)	Approval	Market access Launch growth
Woulgan® Gel			Current
Woulgan® Spray	Current		2016/2017	2017/2018
Woulgan® «Hydrofiber» Dressing	Current		2016-2018	2018/2019
Woulgan® «Combination» Dressing	Current	2016-2017	2017-2019	2019/2020

Agenda

Time	Presentation	Presenter
0900 – 0905	Introduction – Setting the scene	CEO Svein Lien
0905 – 0925	Innate immunity and Biotec's beta-glucans Woulgan® product development	CSO Rolf Engstad
0925 – 0950	Woulgan® - wound care: Vision, positioning and market opportunity • Market updates and commercial activities • • Product potential and outlook	VP Marketing Stuart Devine
0950 - 1000	Immunotherapy of Cancer	CSO Rolf Engstad
1000 – 1010	Q&A	All
1010 - 1045	ArcticZymes value proposition	MD Jethro Holter
1045 – 1055	Q&A	All
1055 – 1100	Closing remarks and outlook	CEO Svein Lien

Vision: "Building a >USD100M Wound Care Company"

Bioactive Beta-Glucan technology demonstrated ability to kick-start "stalled wounds" where healing slowed or stopped:

Positioning for stalled wounds allows Woulgan to show:

• more healing benefit versus standard of care
• stronger, positive clinician experiences

Clear, clean and credible message on when to use and when to not use Woulgan across multiple wound types

Stalled Wounds: A Growing, Global Issue

• US: DFU costs \$9-13 billion per annum*
• US: diabetic population to double to 44 million by 2034
• US: VLU incidence at 2.2% of population, costing \$14.9 billion**
• China: diabetes prevalence at 11.6% of population‡

Globally >5M stalled wounds‡‡ ( >60% of all chronic wounds):

Stalled Wounds by Market

Biotec Pharmacon ASA 18 *Rice JB1, Diabetes Care. 2014;37(3):651-8. **Rice JB1, J Med Econ. 2014 May;17(5):347-56 ‡Prof. Xiaobing Fu EWMA Journal 2015 vol 15 no 1 ‡‡BBG analysis:not responding after 4 weeks treatments with standard of care

A Substantial Burden: UK† Example

• UK NHS managed 600K chronic wounds
• £3.0 billion annual cost of treating unhealed wounds (all types)
• Time to heal is main driver of cost in wound care

35 Million Visits to Care for Chronic Wounds in UK

Woulgan® Improves Outcomes AND Reduces Costs

• 2.3 times more patients healed at 8 weeks* (44% vs. 17% in control)

• Woulgan® heals faster, saving 44% costs**

Cost to Reach Standard Healing rates (12 weeks)

19

Woulgan® Value Proposition

Patients

Comfortable, effective therapy proven to accelerate healing

Clinicians

Delivering improved quality of care, proven to give faster results

Familiar format, easy to apply & well tolerated by patients

Payers

Demonstrated value release from broad adoption of an effective therapy & the associated improved outcomes

Simplicity and Convenience add to Competitive Advantage

• Existing Standard of Care is our target; there are no dominant competitive "active" therapies in advanced wound care
• WOULGAN® is a powerful accelerator of healing, delivered in a gel format which is already routinely used by healthcare practitioners; making it simple to include in their existing treatment plans
• "Reactivate the healing process with a small step in clinical practice"

Woulgan® Holds a High Potential Value

A higher potential value based on the stronger evidence supporting class III registration:

Launching in Key Markets:

• UK
• Scandinavia
• Germany

22

UK wound care market

Market size

• 195K stalled wounds* across acute and community
• €65m stalled wound opportunity

Market Access (reimbursment/tenders)

• In community Woulgan® is prescribed and reimbursed
• National Pricing Mechanism is Drug Tariff
• In hospital availability via NHS Supply Chain allows convenient supply

Clinical Practice

• 232 local formularies (guidelines for prescribing) guides generalist use

UK launch update: H1 activities

Nordic wound care market

Market size

• 77K stalled wounds*; acute and primary care
• €28m stalled wound opportunity

Market Access (reimbursment/tenders)

• No reimbursement but several counties tender for medical devices
• HCP may buy outside tenders but not preferred (low volumes)
• Sometimes home care patients pay out-of-pocket (low volumes)

Clinical Practice

• KOLs and influencers based in hospitals (only see 20% of wounds)
• 80% management of stalled wounds in primary care

Nordic launch update: H1 activities

German wound care market and update

Market size:

• 240K stalled wounds*; acute and primary care
• €86m stalled wound opportunity

Market Access (reimbursment/tenders)

• In community 'dressings' are prescribed and reimbursed
• National decision on outpatient reimbursement by G-BA
• 132 Sick Funds reimburse agreed outpatient treatments

How to achieve strong US Reimbursement

• Beginning with 510K application (predicated on MacroPro gel by Mölnlycke)
• Recommended first step in registration
• Define market access strategy:
• US clinical trial?
• Registration
• Reimbursement
• After effective reimbursement is available then execute launch

2016 Milestones:

• 510K application to be sent Q1
• 510K approval: expected end
• Start partner process autumn

Outlook: the next three years

By end 2016

• UK reimbursement approved
• Growing sales UK and Scandinavia
• Building and development of sales support organisation
• Distribution agreement and pre-launch activities in Germany

By end 2018

• Established market position in UK and Scandinavia and good traction in Germany
• Distribution in selected European countries
• US process at advanced stage
• Canada follows US
• China and Japan in progress

Woulgan® has a potential of at least USD 100M

• By 2020 Woulgan® brand offers multiple solutions for different types of stalled wound
• By 2025 we foresee Woulgan® share between 8-13% of stalled wounds in key global markets

Time	Presentation	Presenter
0900 – 0905	Introduction – Setting the scene	CEO Svein Lien
0905 – 0925	Innate immunity and Biotec's beta-glucans Woulgan® product development	CSO Rolf Engstad
0925 – 0950	Woulgan® - wound care: Vision, positioning and market opportunity • Market updates and commercial activities • Product potential and outlook •	VP Marketing Stuart Devine
0950 - 1000	Immunotherapy of Cancer	CSO Rolf Engstad
1000 – 1010	Q&A	All
1010 - 1045	ArcticZymes value proposition	MD Jethro Holter
1045 – 1055	Q&A	All
1055 – 1100	Closing remarks and outlook	CEO Svein Lien

SBG® in immunotherapy of cancer

• Phase I studies (safety) performed in four different cancer studies:
• Non-Hodgkins lymphoma combining SBG with mAb Rituximab
• Breast cancer combining SBG with mAb Herceptin
• Neuroblastoma combining SBG with Memorial Sloan Ketterings proprietary mAb 3F8
• Neuroblastoma combining SBG with Memorial Sloan Ketterings proprietary vaccine against ganglioside D2 and D3 (Kushner et al 2014, Clinical Cancer Research 20: 1375-1382).

SBG® in immunotherapy of cancer

• Investigator driven single arm vaccine trial in children with neuroblastoma initiated by MSKCC using their own developed bivalent vaccine against neuroblastoma antigens (GD2L and GD3L).
• Biotec's SBG® given p.o. to increase tumor killing activity of white blood cells
• Phase I part (safety) of studie (15 patients) finalised in 2013
• Combination was safe and positive responses observed
• Phase II part (efficacy) of study ongoing aiming to recruite 100 patients (115 in total)
• Currently 53 patients treated
• Expeceted to recruite about 20 patients per year

Kushner et al 2014, Clinical Cancer Research 20: 1375-1382

IPR - SBG® in immunotherapy of cancer

• Patents filed in: USA, Europe, Canada, Australia, China, Japan, India, South-Korea, Brazil and Mexico
• Presently overall 16 patents granted; 6 patent applications pending
• Patent and application claim scope:
• Composition of matter (beta-glucans/monoclonal antibodies)
• Method of treatment of cancer by applying the above concepts
• Use of concepts in cancer therapy

Outlook – immunotherapy of cancer

• The results the ongoing study at Memorial Sloan Kettering Cancer Center (MSKKC) will be important references of SBG® as an adjuvant for cancer therapies
• The Company will consider the possibilities of doing similar studies as performed by MSKCC at other hospitals running investigator driven trials within immunotherapy of cancer – both in combination with cancer vaccines and with mAb therapy but are not prepared to pay for such studies
• The company will consider partnerships to pursue this opportunity to retain its main focus in the wound care area
• The patent portfolio covers a broad range of combination therapies, and the company is open for possible out-licensing opportunities

Time	Presentation	Presenter
0900 – 0905	Introduction – Setting the scene	CEO Svein Lien
0905 – 0925	Innate immunity and Biotec's beta-glucans Woulgan® product development	CSO Rolf Engstad
0925 – 0950	Woulgan® - wound care: Vision, positioning and market opportunity • Market updates and commercial activities • Product potential and outlook •	VP Marketing Stuart Devine
0950 - 1000	Immunotherapy of Cancer	CSO Rolf Engstad
1000 – 1010	Q&A	All
1010 - 1045	ArcticZymes value proposition	MD Jethro Holter
1045 – 1055	Q&A	All
1055 – 1100	Closing remarks and outlook	CEO Svein Lien

ArcticZymes AS

Oslo, 11th February 2016 Jethro Holter – Managing Director

Agenda

• What is an enzyme & their utility
• Target markets
• ArcticZymes unique value proposition
• Arctic Access: Leveraging uniqueness
• Commercial Capabilities: Products & pipeline
• B2B Approach: Commercial partnering
• Outlook for ArcticZymes

What is a Molecular Enzyme?

Enzyme – a protein that performs a specific job = "Engine" Molecular Enzymes – do jobs associated with DNA or other genetic material

ArcticZymes' core business is centred around novel molecular enzymes

ArcticZymes Enzymes are Utilised in Molecular Workflows

Simplified Workflow:

• Workflows form the basis of activities in Molecular Research and Molecular Diagnostics
• Many commercial players offer either partial or complete workflows e.g. Thermo, Roche, Siemens, Abbott, Alere
• ArcticZymes' core business is about supporting its commercial partners to market in developing leading edge workflows through its novel enzymes

The Human Genome - Sequencing

Sequencing Market 2016 – Estimated \$2,4 Bil (16% CAGR)

Molecular Diagnostics (MDx)

Large platforms Points Of Care Specialised/Lab Developed Test

• DNA or genetic tests used to diagnose, and prevent disease as well as guides treatment:
• Infectious Disease (HIV, HCV, Influenza)
• Cancer (colorectal, prostate)
• Prenatal care (Down Syndrome, Turners, Edwards)
• Dominated by instrument platforms running integrated workflows
• Highly regulated FDA/EU regulatory authorities
• Enzymes are very essential components. Unique features are often demanded
• Market Size: \$6,5 Bil (8,5% CAGR) in 2016

Molecular Research

Qiagen kit Isolate DNA

Thermo kit Amplification (PCR)

Affymetrix kit Clean up

• Advancing our understanding and knowledge about DNA and other genetic material
• Kits are used in sequential fashion in performing workflows
• Large diversity of kits on the market which can be combined to achieve the desired workflow
• Majority of kits are driven by enzymes. Leading technologies demand novel enzymes
• Market size: \$8,9 Bil (6% CAGR) in 2016

Molecular Enzymes - \$1,5 Bil today (8,3% CAGR)

ArcticZymes Unique Value Proposition

Arctic Access

Direct access to unique bioprospecting libraries via University of Tromsø

Internal capabilities to translate into high value & novel enzyme products

B2B Approach

Commercial Partnering - collaborate and provide our solutions to global players in Molecular Research & Diagnostics

Commercialising the Arctic's Uniqueness

Leveraging Uniqueness

Arctic Bioprospecting

• Driven by University of Tromsø (UiT)
• Large biobank of novel enzymes

Discovery

• Identifying commercially attractive & novel enzymes
• Engineering & formulation to enhance desired features

Product Development & Manufacturing

• Cost efficient manufacturing
• Scalability & customisation

Commercialisation

• B2B product offering => Early access
• Support for application development (integration into customer workflows)

Product Portfolio's & Pipeline

Key Elements

• Market Relevance: Focus on most commercial relevant enzymes
• Existing: Extracting maximum value from existing enzymes – new uses in workflows & new formulations
• Pipeline: Regular introduction of new enzymes
• Synergistic Fit: Develop enzymes that can be combined together into customers kits and workflows

Molecular Enzyme Market \$1.5 Bil (2016)

Adapted from Molecular Biology Enzymes and Kits & Reagents market – Global Forecast to 2018; MarketsandMarkets 2014. Data excludes restriction enzymes.

ArcticZymes Polymerases

Next Generation Sequencing

Molecular Diagnostics

• Status:
• By virtue of bioprospecting enzyme properties nicely fit the underserved market

Launch at least 2-3 different polymerase enzymes over the next 3 years

Provisional timeline - commercialise our first polymerase in 2016 or early 2017

Patenting is in process

Biology

• Represents the largest opportunity in the market for ArcticZymes
• Polymerase market is largest enzyme segment valued at \$460 Mil (12% CAGR) 76% – Thermostable Polymerases
• 24% Other Polymerase => Focus for ArcticZymes
• Polymerases represent the main engines driving the majority of workflows…
• Overwhelming need in market for «Other polymerases» to serve «unmet» technical needs: Direct request from our commercial partners
• Recent acquisitions
• Companies have develop their own polymerases

Technical and Market Importance of Polymerases (compared to car industry)

Technical Importance Market Importance

Wing mirror motor (DNAases, Cod UNG, rSAP) – Accessory products; alternatives available.

Engine (Polymerases) – car cannot go without engine= polymerases are essential engines in workflows.

Polymerases are engines that drive the majority of molecular workflows

Thermostable polymerases resemble traditional fossil fuel engines

Other polymerases resemble electric engines for electric cars

AZ will serve market with several versions of Other Polymerases (No one enzyme fit all!)

ArcticZymes Polymerases

Next Generation Sequencing

Molecular Diagnostics

• Status:
• By virtue of bioprospecting enzyme properties nicely fit the underserved market

Launch at least 2-3 different polymerase enzymes over the next 3 years

Provisional timeline - commercialise our first polymerase in 2016 or early 2017

Patenting is in process

Synthetic Biology

• Represents the largest opportunity in the market for ArcticZymes
• Polymerase market is largest enzyme segment valued at \$460 Mil (12% CAGR) 76% – Thermostable Polymerases
• 24% Other Polymerase => Focus for ArcticZymes
• Polymerases represent the main engines driving the majority of workflows…
• Overwhelming need in market for «Other polymerases» to serve «unmet» technical needs: Direct request from our commercial partners
• Recent acquisitions
• Companies have develop their own polymerases

ArcticZymes Approach to B2B Partnerships

It's not just simply product – it's a complete package offering

Stages of customers commercial developments:

Molecular Diagnostics (MDx): 2-4 years Molecular Research: 1-2 years

Stages (B2B Sales Cycle)

Short and Long-Term Priorities

2018

Focus on new product launches	Leverage value from synergic portfolio
Embracing new relationships in MDx	Recognised as a primary B2B supplier
Global presence beyond USA	Revenues in excess of 50MNOK

2016

Time	Presentation	Presenter
0900 – 0905	Introduction – Setting the scene	CEO Svein Lien
0905 – 0925	Innate immunity and Biotec's beta-glucans Woulgan® product development	CSO Rolf Engstad
0925 – 0950	Woulgan® - wound care: • Vision, positioning and market opportunity Market updates and commercial activities • Product potential and outlook •	VP Marketing Stuart Devine
0950 - 1000	Immunotherapy of Cancer	CSO Rolf Engstad
1000 – 1010	Q&A	All
1010 - 1045	ArcticZymes value proposition	MD Jethro Holter
1045 – 1055	Q&A	All
1055 – 1100	Closing remarks and outlook	CEO Svein Lien

Closing remarks and outlook

4

Biotec Pharmacon ASA 5

OUTLOOK 2018

• Full commercialization of Woulgan® in key markets
• NOK100M in Group Revenues
• A cash positive and fully funded operation
• A strong product pipeline
• Enhance the value creation of ArcticZymes through organic growth, partnerships and strategic opportunities in the fast growing market for molecular enzymes

OUTLOOK 2016

• Enter into distribution agreement(s) for Woulgan® in Germany
• Finalize the UK reimbursement process in the high-end category of the market
• Full launch in UK and Scandinavia
• Grow business further in Animal Health and Nutrition
• Achieve important milestones in the organic development of the ArcticZymes business and in the new enzyme development projects