INVION LIMITED — Investor Presentation 2012

Sep 10, 2012

ASX / MEDIA ANNOUNCEMENT

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11 September 2012

INVESTOR PRESENTATION – SEPTEMBER 2012

Australian drug development company Invion Limited (ASX:IVX) is pleased to provide the attached company presentation to investors.

About Invion Limited

Invion Limited is a clinical-stage drug development company that targets chronic inflammation. Focussed on the development of treatments for major market opportunities in inflammatory diseases including asthma, chronic bronchitis and lupus, Invion has two phase II proprietary therapeutic candidates: INV102 – a repurposed inverse beta agonist; and Cpn10 – a modified natural immunomodulator. INV102, also known as nadolol, has been used in more than 8 million people for the treatment of high blood pressure, migraine and chest pain. Invion is now targeting INV102 for new indications. To date, two phase II clinical trials of INV102 have been completed which

have demonstrated acceptable safety as well as dose-related activity showing a reduction of airway hyper-responsiveness. Two further phase II trials are due to commence in 2H 2012. The larger of these trials, a phase II $4.4 million study in asthma patients, is being funded by the US National Institutes of Health (NIH). Cpn10 is a potential new anti-inflammatory biologic therapeutic. In clinical trials carried out to date, Cpn10 has demonstrated clear signs of biological activity, including a reduction in disease-relevant pro-inflammatory cytokines. Invion is progressing regulatory preparations to investigate Cpn10 as a treatment for systemic lupus erythematosus (SLE or lupus). Invion’s pre-Investigational New Drug (pre-IND) meeting with the US Food and Drug Administration (FDA) is scheduled for 14 December 2012.

FOR MORE INFORMATION CONTACT:

Corporate

Corporate Investor Relations Media Dr William Garner Rebecca Wilson Tom Donovan Managing Director and CEO Buchan Consulting Buchan Consulting Invion Limited 03 9866 4722 (03) 9866 4722 investor@invion.com.au rwilson@buchanwe.com.au tdonovan@buchanwe.com.au

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Invion Limited ABN 76 094 730 417

Unit 2, 120 Bluestone Circuit, Seventeen Mile Rocks, QLD 4073 P +61 7 3295 0500 F +61 7 3295 0599 www.invion.com.au

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ASX:IVX

Clinical-stage drug development company targeting chronic inflammation

Disclaimer: This presentation does not constitute an offer to sell or a solicitation of an offer to buy any interests in Invion Limited. Any such offering will occur only in accordance with the terms and conditions set forth in the Offering Memorandum pertaining to such funds if and when offered. Investments in Invion will be subject to substantial investment restrictions, and investors are strongly urged to review carefully the relevant Offering Memorandum and other documents pertaining to such interests and to discuss any prospective investment therein with their legal and tax advisers prior to investing. All information herein is strictly confidential, and no part of this presentation may be reproduced or transferred, in whole or in part, to any other party without the express written consent of Invion.

Invion: a merger of peers

30 August 2012, shareholders approve scrip-based merger of CBio Limited and Inverseon Inc. to create Invion Limited

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ASX-listed, Brisbane-based

Private, San Francisco-based

~ $5.5M cash and commitments at merger close Cpn10 IP and clinical data

~ $4.4M NIH grant

Inverse beta agonism IP and clinical data

$10.7M Mkt Cap (30 Aug)

$6.5M (imputed value)

R&D and clinical trial expertise

R&D, clinical and regulatory expertise

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Invion business model mitigates risk

• Two phase II proprietary therapeutic candidates that target chronic inflammation

• From Inverseon: INV102 (repurposed inverse beta agonist)

• From CBio: Cpn10 (modified natural immunomodulator)

• Clinical-stage company with risk significantly mitigated

• Experienced and well credentialed Board, management and scientific support

• Significant FDA experience and strong international KOL networks

• Existing NIH linkage grants with scope for additional non-dilutive capital

• Significant valuation drivers: 12 months and 3 years

• Submission of first NDA (smoking cessation) possible ~ 3years

• Synergy in approaches to drug development

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Complementary approaches to chronic inflammation

INV102: existing drug repurposed for a new target

• Scientific founder defined the field of (beta adrenergic) Inverse Agonism

• Issued patent with new IP applications

• Chemistry and toxicology complete for oral delivery (lead product)

• Significant clinical safety database

• Clinical proof of concept completed in asthma (now funded by NIH)

• Phase IIb and phase III for smoking cessation: regulatory pathway well defined

• Evidence of benefit of non-selective beta blockers in COPD

• Regulatory precedent with carvedilol and metoprolol

• Abbreviated straightforward requirements for inhaled drug

• NCE will provide new patent

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Complementary approaches to chronic inflammation

Cpn10: immunomodulator

• Strong IP position with issued patents for Cpn10 composition

• Pre-clinical proof of concept in industry-standard models of chronic inflammatory diseases

• Chemistry (CMC) and toxicology support 3 months dosing

• Safety database in >250 patients with MS, RA or psoriasis

• “ ”

• Independent analyses suggest systemic lupus erythematosus ( lupus ) as target

• RA study and pre-clinical data provides strong rationale for study design and endpoints in lupus

• US FDA Pre-IND Meeting 14 December 2012

• Dosing 1Q13*

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• Dependent on outcome of pre-IND meeting with FDA

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Invion pipeline 2012

Research Phase I

Phase II

Oral INV102

Smoking cessation* Asthma NIH funded

Cpn10

Lupus (SLE)

Inhaled INV102

Chronic bronchitis Cystic fibrosis

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NCE development Beta-2 adrenergic Academic alliance inverse agonist

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*Smoking cessation in patients with chronic bronchitis (added to Standard of Care)

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Invion pipeline 2012-2015

		2012		2013		2014		2015
Oral INV102
Smoking cessation		Phase IIa		Proof of principle		Phase IIb/phase III		NDA submission
Asthma		Phase II		Phase II		Partner		Phase III (partner)
Cpn10
Lupus (SLE)		Submit IND to FDA		Phase IIa		Partner		Phase IIb/phase III
Inhaled INV102
Chronic bronchitis		Pre-IND		IND, Phase I		Phase II		Partner
Cystic fibrosis		development		Seek grant funding		Phase II		Partner
NCE development
Beta-2 adrenergic inverse agonist		Research		Medicinal chemistry		Pre-clinical		Submit IND

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Experienced Board and Management

William J. Garner MD, CEO

• EGB Advisors, Roche, Founder of Urigen and DelMar Pharmaceuticals

• Serially successful founder and executive

Mitchell Glass MD, EVP R&D and CMO

• 24 year veteran of Pharma (AZ, GSK) and Biotech (AGIX)

• Managed more than 40 drug developments including “first in class”

• 5 approved drugs (Accolate® /asthma, Coreg®/ heart failure, AVANDIA)

Ralph Craven, B Eng PhD, Chairman of the Board

• Broad experience as company director, respected member of international energy industry

• Ergon Energy, Arrow Energy, Tully Sugar

James Campbell, PhD MBA, Executive Director

• Senior biotechnology executive with 20+ years experience in research, research management, advisory

• COO and CFO, ChemGenex Pharmaceuticals; Principal, Gemini Biotechnology

Brett Heading, BCom LLB (Hons), Non-executive Director

• Experienced corporate lawyer/ company director across property, agribusiness and life sciences sectors

• Chairman of Partners, McCullough Robertson Lawyers

Warren Brown, B Eng, Non-executive Director

• Experienced in corporate strategy and project management

• Background in consulting engineering and contract negotiation

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INV102 (nadolol)

A beta blocker repurposed for obstructive inflammatory lung disorders

• Nadolol: An inverse -agonist

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• non-selective beta blocker (1 and 2)

• indicated for the treatment of high blood pressure, migraine headaches and chest pain

INV102 (nadolol) is a synthetic nonselective beta-adrenergic receptor blocking agent designated chemically as 1-(tertbutylamino)-3-[(5,6,7,8-tetrahydrocis-6,7-dihydroxy-1-naphthyl)oxy]2-propanol.

• marketed as Corgard, Novo-Nadolol, etc.

• one of three  adrenergic inverse agonists - a subset of beta blockers - that:

  • block agonist stimulation of the receptor; AND

  • inactivate intracellular inflammatory events that are stimulated spontaneously or by  agonists

• nadolol has best inverse agonist activity in the airways

• Beta blockers (14/17 marketed) that are only antagonists:  block agonist stimulation of the receptor; BUT

• do not inactivate spontaneously active receptors

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INV102 intellectual property

• First patent issued 2009

• • Airway Disease Issued Patent:

• “

• Method of Treating Airway Diseases with Beta Adrenergic ”

• Inverse Agonists

• US Patent #7,528,175 Issued May 5, 2009

• divisional filing in 2009 for additional claims

• covers inhaled and combination drugs

• Smoking Cessation Provisional patent filed 2Q11: PCT

• Corticosteroid synergy and sparing provisional filed 3Q11

• Novel process for inhaled formulation will provide new IP

• Device patent for inhaled INV102 will provide protection through at least 2025

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INV102 precedent: Parallel pharmacology of congestive heart failure and obstructive lung disease

Congestive Heart Failure	Congestive Heart Failure
β-Agonist	β-Inverse Agonist Contraindicated for >25 years
Acutely Beneficial	Acutely Detrimental
Chronically Detrimental	Coreg / Toprol XL Mortality reduction in CHF Standard of care

COPD (asthma and chronic bronchitis)	COPD (asthma and chronic bronchitis)
β-Agonist	β-Inverse Agonist Contraindicated for >25 years
Acutely Beneficial	Acutely Detrimental
Chronically Detrimental/ not helpful	Chronic INV102 for Asthma, COPD and chronic cough

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Metaplasia of lung epithelial cells

• Healthy airway consists of mostly ciliated epithelial cells with smaller numbers of (secretory) goblet cells

• With chronic insults, the proportion of goblet cells increases, lining the lung with a “mucous plug” that acts as culture medium for infection

Airspace

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Ciliated epithelia Goblet cell Smoking Healing Asthma INV102

Airway surface liquid

Mucous plug

• This change , which occurs with cigarette smoking (chronic bronchitis) is reversible with treatment or smoking cessation BUT causes cough and mucus

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Airway healing: effect of oral INV102

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Control lung tissue

Lung tissue of ‘asthmatic’ mice - epithelial cells have been converted to mucus producing goblet cells No effect of alprenolol

Lung tissue of asthmatic mice treated with  -adrenergic inverse agonist INV102 for 28days: restored epithelium

Proof of concept has been achieved with pre-clinical studies with inhaled INV102

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Chronic Exposure to Beta-Blockers Attenuates Inflammation and Mucin Content in a Murine Asthma Model. Nguyen et al. Am J Respir Cell Mol Biol. 2008 Mar;38(3):256-62. See also. β-Adrenoceptor signaling is required for the development of an asthma phenotype in a murine model. Nguyen et al. Proc Natl Acad Sci U S A. 2009 Feb 17;106(7):2435-40.

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Demonstrated positive dose response in phase IIa trial

Objective : proof-of-concept to evaluate safety and effects on airway with escalating doses administered to 19 subjects with mild asthma

Primary endpoint : objective measure of airway hyperresponsiveness (PC20 MeChFEV1), the diagnostic hallmark of asthma

Key Findings: led NIH to fund 6 month phase IIb study in asthma:

• Safety: well tolerated in doses up to 40mg

• Efficacy: Airway hyper-responsiveness:

• dose response with ineffective dose at 10mg/day

• 9 -10 weeks of treatment produced a dose-dependent decrease in airway hyper-responsiveness that achieved clinically significant improvement

• Lung function:

• attenuation of first dose decrease in FEV1 by titration

• same benefit and commercial strategy as carvedilol in CHF

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Development strategy

• Oral INV102 could be approved/partnered in < 36 months

• chronic bronchitis (COPD) patients with chronic cough have difficulty quitting smoking (indication) and increased post-operative complications (indication)

• INV102 can be added to standard of care in quit programs

• total treatment period less than 5 months including titration

• titration doses provide market exclusivity (e.g. COREG®)

• asthma (funded by NIH): $4.4 million 2012- 2015 provides safety data

• Inhaled INV102 provides more IP and no systemic absorption

• chronic bronchitis

• cystic fibrosis

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Oral INV102 for patients with chronic bronchitis: smoking cessation and reduced peri-operative complications

• Rationale: INV102 can treat underlying cause of chronic cough and mucus secretion which are a major barrier to smoking cessation and cause of peri-operative complications in patients with COPD

• Low regulatory approval hurdle

• Trials are for short-term treatment (3 months), and use data package and materials from DMF and NIMA (NIH funded asthma trial)

• Cost: Proof of concept to end of phase II can be completed with existing funds

• Protocol development and subject identification ongoing

• Value at 12 months & < 3 years

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1.

Respiratory Inflammation market $64B+

• Smoking-Cessation Drug Market worth $2.4B in 2012[2. ]

• Large COPD /Asthma drug market, valued at ~$34B[1.]

  • Advair Diskus[®] , approved for asthma and COPD, ($8.1B peak annual sales)[3.]

  • Singulair[®] , approved for asthma ($5.5B peak annual sales)[4.]

  • Symbicort[®] , approved for asthma and COPD ($3.1B worldwide sales)[1.]

• FDA sanctions on Long-Acting Beta Agonists (LABAs)

  • Drugs associated with excess mortality

  • Black box warning on all LABAs and LABA/Steroid combinations, including Advair Diskus[®] and Symbicort[®] : increased risk of death

1. Respiratory and Inflammation, AstraZeneca Annual Report, 2011

2. Smoking Cessation Drugs: World Market Prospects 2012-2022 , Visiongain Reports 2012 3. Healthcare Finance , Bloomberg Brief, 13 August 2012

4. Full-Year and Fourth-Quarter 2011 Financial Results , Merck & Co

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Cpn10 overview

• Potential new anti-inflammatory biologic therapeutic

• Strong patent position covering composition of matter and trade secrets

• Novel mechanism: effect on inflammatory markers is different to current leading therapies, i.e. immune response is dampened not ablated

• Ala-Cpn10, most progressed from >100 synthesized candidates

• Adequate cGMP material and toxicology coverage to support clinical trial in SLE 1Q13

• Clear signs of biological activity in clinical trials

• strong safety profile in >250 patients (9 trials)

• a

• biomarker array supportive of clinical benefit (reduction in TNF , IL-6)

• trends for clinical benefit; long term follow-up analysis ongoing

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Cpn10 intellectual property

• Composition of matter patent granted

• drug candidate human Ala-Cpn10

• 2026 in USA, 2023 in Europe, Japan, etc

• potential extension up to 5 years in most jurisdictions

• Composition of matter claims on numerous Cpn10 variants

• pending in all major jurisdictions

• favourable preliminary reports issued by International Search Authority

• patent term 2029/2030 + extensions

NB: Non-core IP assets provide early opportunity for deal and revenue

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Cpn10 in systemic lupus erythematosus (“lupus”)

• As a molecule that reduces pro-inflammatory cytokine production Cpn10 has potential utility across a range of indications

• Analysis of therapeutic potential, clinical need and commercial attractiveness identified lupus as appropriate target indication

• Strong pre-clinical data in lupus model (3 studies)

• improved kidney function

• resolved cutaneous lupus

• reduced renal and circulating levels

of TNF-α and IL-6

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Untreated

Cpn10 treated

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Cpn10: lupus development plan

• Target: Under-served lupus market, only 1 drug approved by FDA in 50 years

• Regulatory: file US IND (2H12)

• Plan: Chemistry: re-qualify existing material for IND IV formulation

• Assessment: Toxicology: package adequate for lupus IV dosing

• Clinical: Rapid, cost-effective means of determining clinical potential (2Q13)

• duration of phase IIa study, endpoints and sample size

• Primary endpoint: IL-6, which is implicated in lupus vasculitis

• Secondary endpoints (under development at Invion):

• safety; proteomics; clinical benefit; combination scoring

• proteinuria

• RESULT: Go/No Go for Cpn10 at Invion

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Potential value drivers

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----- Start of picture text -----

Oral INV102:
Proof of concept results in short
term use in chronic bronchitis &
asthma
Inhaled INV102:
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In phase I in chronic bronchitis and cystic fibrosis

Cpn10: Interim (cohort) results (3Q) in lupus

Oral INV102: Asthma phase II results (and potential phase III program) Approvable package in chronic bronchitis (smoking cessation & peri-operative complications) Inhaled INV102: Proof of concept in chronic bronchitis; clinical program in cystic fibrosis

New Chemical Entity: Lead identification on NCE Pre-IND meeting

Cpn10:

Lupus end of phase II data

2013

2012

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2015

Company Snapshot

Sector	Biotechnology
Principal activities	Clinical-stage drug development
ASX code	IVX
Last trade (7 Sep 2012)	$0.063 (6.3cents)
Shares on issue	384,531,941
Market cap (7 Sep 2012)	$24.2 million
Major shareholders	Dr William Garner 16.4%
	Dr Mitchell Glass 3.6%
	Himstedt & Co (and associates) 3.6%
Cash at bank (30 June 2012)	$4.18 million
Anticipated cash inflows	$2.22 million R&D tax rebate (3Q12)
Current drug phase	2 drug candidates in phase II

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Activities to watch

2H 2012 ― Initiation of phase II study in asthma ― Initiation of phase II study in patients with chronic bronchitis undergoing smoking cessation ― Pre-IND meeting with FDA re: Cpn10 in lupus ― Filing of IND for Cpn10 in lupus*

1Q 2013

― Initiation of lupus clinical trial*

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• Dependent on outcome of pre-IND meeting with FDA

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Invion: summary

1. Clinical-stage company targeting inflammation

2. Two primary clinical assets: INV102 and Cpn10 and multiple clinical-stage programs

3. Management team who have taken drugs through FDA

4. Opportunities for expansion within three years

5. Mitigated risk

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Managing Director & CEO Dr William Garner william.garner@invion.com.au

Corporate and Financial Melanie Farris, Company Secretary melanie.farris@invion.com.au

Investor & Media Relations Buchan Consulting rwilson@buchanwe.com.au tdonovan@buchanwe.com.au

Invion Limited 2/120 Bluestone Circuit Seventeen Mile Rocks QLD 4073 Australia P: +61 7 3295 0500 F: +61 7 3295 0599