PYC THERAPEUTICS LIMITED — AGM Information 2012

Nov 21, 2012

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Harnessing Biodiversity for Peptide Therapies

Dr
Paul
Wa),
CEO Nick
Woolf,
CFO
&
VP
Corporate
Development AGM,
22
November
2012

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1
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Disclaimer

The 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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2012 highlights

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Signed
alliance
with
Janssen
Biotech
–
our
biggest
and
broadest
deal
to-­‐date Achieved
Pfizer
discovery
milestone
in
therapeuFc
vaccine
collaboraFon Progressed
our
alliances
with
Roche/Genentech
and
MedImmune Upgraded
scale
and
capabiliFes
of
Phylomer
discovery
plaLorm

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Advanced
spin-­‐off
plans
for
JV
with
Cambridge
University
for
target
discovery
and validaFon Extended
IP
estate
with
mulFple
new
granted
patents

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Phylogica’s current partnerships span a wide a range of areas

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Cell penetrating peptides
Phylogica
CNS Delivery Antimicrobials
Vaccines
4
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4

4

Phylomer[Ⓡ] Platform

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4

Rapid growth in peptide drug market

Pep=des
are
one
of
fastest
growing
drug classes

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• § 60
  marketed
  pepFdes
  represent
  $13
  billion market

• § PepFde
  market
  growing
  twice
  as
  fast
  as
  small molecules

• § New
  technologies
  are
  addressing
  tradiFonal pepFde
  challenges
  (eg:
  stability,
  half-­‐life)

• § Increasing
  Pharma
  interest:
  approx
  140 pepFdes
  in
  clinical
  development

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Chemical
&
Engineering
News May
30,
2011 Improving
Pep-des:
Small
firms develop
be6er
pep-de
drug candidates
to
expand
this pharmaceu-cal
class
and
a6ract big
pharma
partners
(picture
of Phylomer)

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6
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Phylomers derive from parts of biodiverse proteins

§ Encoded
from

35
biodiverse
bacterial
genomes,
environments
like
volcanos,
geysers and
undersea
vents

§ Phylomer
libraries
now
contain
126
billion
disFnct
pepFde
sequences

§ Pre-­‐selected
by
evoluFon
to
allow
survival,
such
as
thermal
stability

§ Dominant
intellectual
property
over
enFre
drug
class

§ De-­‐risked
–
drugs
already
approved
from
foreign
protein
fragments
(eg:
Fuzeon)

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7
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Wa)
PM
(2006) Nature
Biotechnology 24
(2):177-­‐83

Bacteria provide richest source of diversity

World’ s
richest
source
of
diverse
natural
secondary
and
terFary
structures

Wa2
PM
(2006),
Nature
Biotechnology,
Vol
24
(2):177-­‐83

Phylomers: a powerful toolbox for drug discovery

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Intracellular Targets Extracellular Targets
Phenotypic
Antimicrobial
Screening
Phylomers
Epitope Mapping Scaffold Discovery
Novel Cell
Vaccines
Penetrating Peptides
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Cell penetrating Phylomers: gaining access to intracellular targets

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Phylomer CPPs
Extracellular
20%
80%
Druggable
Targets
Antibodies
Small
Molecules
(10%)
Scaffolds
Small Molecules Phylomers
Extracellular
targets

Intracellular
targets
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• CPPs
can
expand
the
druggable
landscape
by

10-­‐fold!!

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Phylomers can have intrinsic cell penetrating activity

Phylomers
engage
natural
processes
to
penetrate
cells We
can
use
Phylomers
to
deliver
drugs
into
cells
(PDC)

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�

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Ovarian cells

Capturing a natural virulence factor evolved for cell penetration

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HUVECS (fixed)
Fibronectin enhances delivery
FITC/DAPI
DAPI
FITC BEN_1312
𝛼5𝛽1
FITC/DAPI/Integrin
Integrin
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Fibronectin binding peptide co-localises with Integrin receptor

12

Strategy to realise shareholder value

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13
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Three overlapping strategic phases

1. PARTNERING (2012/2013) : Short term revenue growth from Pharma fee-for-service alliances

2. TECHNOLOGICAL LEADERSHIP (2013/2014): Building capital value by enhancing Phylomer drug discovery platform

3. PRODUCTS AND POSITIONING (2014/2015): Positioning Phylogica for trade sale exit by advancing internal programs against high-value targets

Partnering Technological Leadership Products and Positioning 2012 2013 2014 2015

14

Growing the capital value while growing revenue streams

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Potential to grow revenues over time Potential to grow capital value over time

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Pharma alliances build accumulating stake in downstream milestones/royalties Extend and renew IP value around the platform and products Build portfolio of Phylomer-derived assets against high-value disease targets

15

The main game: what do the acquirers value most?

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Biologics library companies are valued for the impact of their discovery platform and products on the future pipeline of acquirer

Plan to exit via a trade sale to big pharma company or a specialist pharma/biotech

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No correlation between exit value of companies with proprietary libraries and their revenue

• § Almost all of the biologics library companies with high value exits (in hundreds of millions to billions of dollars) have negligible revenue (eg. Avidia, Domantis, Adnexus, Applied Molecular Evolution, Evogenix, Abgenix, Glycofi, Medarex)

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Valuations of library companies are driven by the degree of validation of the discovery platform and (in some cases), the development of preclinical/clinical assets Main value ascribed to biologics library companies is not due to their revenue streams, but the projected impact of the platform on future drug revenue streams of the acquirer

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What does the ideal library acquisition candidate look like?

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Has validated its drug lead discovery engine against multiple targets Technology addresses unmet needs not addressed by other approaches (small molecules, antibodies, conventional peptides, protein scaffolds)

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Has shown sophisticated approaches to addressing key challenges:

• § Affinity

• § Selectivity

• § Potency

• § Solubility

• § Reliable production and formulation

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• Technology is scalable

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• The IP covering technology is controlled and company has FTO

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Technology is validated to yield candidates at least to IND level

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Strategic Scorecard: 1[st] phase

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Maximising near-term revenue

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Generate near-term revenue from fee-for-service drug discovery alliances Seek partners for internal assets: § Neuroprotective Phylomers § Antimicrobial Phylomers § Phylomer for UV/thermal burns (Le Metier de Beauté) § CD40 ligand for anti-inflammatory diseases, eg: rheumatoid arthritis

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Four pharma partnerships in three years

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Roche/Genentech

§ CollaboraFon
to
discover
brain
delivery
pepFdes
in
December
2009

§ Expanded
to
discover
pepFdes
that
cross
blood-­‐brain
barrier
in
May
2011

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MedImmune
(AstraZeneca)

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§ CollaboraFon
to
discover
anFbioFc
pepFdes
in
August
2010

§ Progressed
to
final
stage
of
research
plan
in
November
2011

§ Total
deal
value
of
up
to
US$100M
&
royalFes
on
worldwide
sales

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Pfizer

§ CollaboraFon
to
discover
pepFde
vaccines
in
December
2010

§ Milestone
payments
triggered
in
December
2011
and
May
2012

§ Total
deal
value
of
up
to
US$135M
&
royalFes
on
worldwide
sales

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Janssen
(Johnson
&
Johnson)

§ CollaboraFon
to
discover
cell-­‐penetraFng
pepFdes
in
December
2011 § MulF-­‐product
agreement
with
minimum
of
18
months
research
funding

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Specialisation is paying off!

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Cell penetrating peptides
Phylogica
CNS Delivery Antimicrobials
Vaccines
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21

21

Extensive pipeline of partnering opportunities

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**Progressing

25
discussions
with
prospec=ve
or
exis=ng
partners
on
new
deals** § Four
prospects
at
stage
of
term-­‐sheet
or
contractual
negoFaFons

Phylomer Platform Opportunity	In-House Activities & Partnerships	No. of Deal Discussions
Peptide drugs against intractable extracellular targets	- In-house anti-CD40L program for Lupus & rheumatoid arthritis - Developing new screening assays against high-value GPCRs1	8
Peptide drugs against intractable intracellular targets	- In-house program against Sonic Hedgehog cancer pathway - Initiating new screens against high-value intracellular targets	4
Cell-penetrating & organ-specific delivery peptides (CPPs)	- In-house screening programs to discover proprietary CPPs - Janssen deal to discover tissue-specific CPPs	3
Blood-brain barrier delivery peptides (BBBPs)	- Constructing 2ndgeneration brain-targeting Phylomer library - Roche/Genentech deal to evaluate 1stgeneration BBBPs	5
RNAi delivery peptides (RNAPs)	- In-house proof-of-concept program to show RNAi delivery	2
Phenomica target identification (ID) & validation	- Validated platform with collaborators at Cambridge University - In-house target ID program against high-value cancer pathway	6

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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
convenFonal
small
molecule or
anFbody
drugs
because
of
their
complex
biological
shapes

Pharma interest continues to be real and tangible

31 October 2012 “Our scientists were delighted to meet you and inspired by your presentation. They Platform Enhancements would like to consider the collaboration. Our competitive edge requires ongoing investment They will draft outlines of research plan and discuss with you to estimate the cost for collaboration.”

Revenue Guidance Timing of contingent milestones is difficult to predict

23

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Strategic Scorecard: 2[nd] phase

24

Internal platform development

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Investment in platform required to retain technological leadership Improvements allow significant value enhancements for partners & PYC Build next generation libraries to renew Phylogica’s core IP Accelerate screening against internal targets

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Delivering on platform upgrades

Successfully enhanced efficiency and capacity of Phylomer platform § Commissioned upgraded screening facility including advanced robotics § Upgraded libraries by 47-fold to total complexity of >126 billion individual Phylomers § Validated discovery of custom scaffolds from Phylomer library

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Building internal assets

§ Used Pepscan alliance for CLIPS technology to generate 11-fold improvement in aureus potency of Phylomer antimicrobials against Golden Staph ( Staphylococcus § Accessing new capabilities through collaborations with leading academic groups § Applying upgraded optimisation capabilities to enhance in-house programs

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Corporate Summary

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Financial snapshot

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ASX
=cker: PYC Market
cap :
circa $10
million

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Revenue
FY2012: $2
million Capital
raising
October
2012 :
$1.6
million R&D
Tax
Credit
received
October
2012 :
$1.9
million Pro
forma
net
cash
posi=on
30
September
2012: $4.9
million Cash
burn
FY2012: $4
million Issued
capital: 466
million
shares

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What is unique about the Phylomer platform

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Phenotypic
Screening
Phylomer
Libraries
Blocking
Intracellular
Discovery
of
specific
Cell

Protein/protein
InteracRons
PenetraRng
PepRdes
Phylogica has developed an integrated discovery platform to:
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Discover and validate new therapeutic targets found inside cells ( via Phenomica) Develop therapeutic peptide leads against such targets Citron (Citron
Homology
Domain) Discover cell penetrating peptides that can deliver therapeutic cargoes into cells

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Summary

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Assembled
world-­‐class
pepFde
drug
discovery
plaLorm ‘ ’ Successfully
validated Alliance
Model with
four
partnerships Delivering
on
collaboraFve
discovery
objecFves
for
exisFng
Pharma
partners Upgrading
screeening
capabiliFes
and
Phylomer
libraries
for
maximum
compeFFveness Building
value
through
in-­‐house
R&D
programs
against
high-­‐value
targets AnFcipate
rapid
revenue
growth
based
on
current
and
prospecFve
deals

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Contact Details

Dr.
Paul
Wa) Chief
Execu=ve
Officer Tel:
+61
8
9489
7777 Fax:
+61
8
9489
7700 Mobile:
+61
421
550
213 paulw@phylogica.com

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www.phylogica.com

Nick
Woolf CFO,
VP
Corporate
Development Tel:
+61
8
9489
7777 Fax:
+61
8
9489
7700 Mobile:
+61
417
986
005 nwoolf@phylogica.com