Answers for Cancer

SwedenBio 2006

2

What are we:

• Incorporated October 2000 – 5½ years• Cancer – small molecules• 8 products in the clinic - Mix of niche and large market products• Fruits of 3½ companies (TT, Prolifix, G2M-Frankfurt)• HDACi, Topoisomerase IIi, mTOR• Inlicensed - diphenal urea-based, oral chloride channel blocker (Endovion – NeuroSearch), and

a recombinant antibody (Zemab – Novartis)• 97 people spread over 3 sites• VCs are – BankInvest (Danish), Healthcap (Swedish),) and Deutche VC. • Raised a total €46m of equity capital– up to IPO (Prolifix was a cash purchase)• Pre money value – just under €90m• In IPO raised €35m – (11.5m shares) – 6 times oversubscribed – first IPO for 4 years.• 94% of our shares are currently free to trade.• Took VCs down from 80% to just under 60% • Market cap at date of float €120m. Trading in a range between -5 +10% for 9 months• Since April 65-75% up

6

8

Estimated costs to make a new drug

• PhRMA – 800 million $

• Tufts University – 900 million $

• Bain & Company – 1,7 billion $

The upside

• US prescription medicine 2003 216 billion $ !!

Biotech exists because the capital markets enable it to…

Computer/Software — customer decides

Biotech — capital market decides

4

The Party in 2000

Source: Venture One

$35$0

2500

2000

Number of Deals

3000

1500

1000

1994•

1995•

1996•

1997•

3500

VC$ Invested ($Billions)

1998•

Get Big FastConcepts FundedTime to IPOYoung EntrepreneursEntrepreneurs

Control Valuations

1999•

… And The “Morning After” Hangover

Get Profitable FastWhere’s the Business

Model?P2P: Path to

ProfitabilityExperienced

Veterans VC Controls

Valuation

NASDAQ Closing

3940

46974573

3861

3400

3000

3200

3400

3600

3800

4000

4200

4400

4600

4800

J an-00 Feb-00 M a r-00 A pr-00 M ay-00

Revitalization by acquisition

13

Broadly based geographical set-up

Copenhagen, Denmark – Headquarters• DNA damage control (topoisomerases)• Medicinal chemistry and cancer models• Clinical, regulatory and data management

TopoTarget UK limited, Oxford, UK• Chromatin (HDAC) and cell cycle control• Biochemistry, compound screening

TopoTarget Germany AG, Frankfurt, Germany• Chromatin (HDAC) control• Clinical and regulatory management• Laboratory unit, cancer models (Karlsruhe)

• 2002 – Acquisition of Prolifix Ltd, now TopoTarget UK Ltd

• 2005 – Acquisition of G2M Cancer Drugs, now TopoTarget Germany AG

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TopoTarget – Strategy

Maintain a broad and risk-balanced product pipeline:

discover and develop novel small-molecule therapeutics with broad potential acquire cancer product candidates and companies with complementary expertise and products repurpose marketed drugs for new cancer indications

Key commercial objectives: market speciality cancer products partly by own sales force market novel cancer therapeutics with broad potential mainly through partners

2006 >2007 >2008

PXD101

Avugane™

Baceca®

Topotect

Savene™ Savicol®

15

Clinical pipeline: 8 drug candidates, >10 indications

Technology Product Indication

Topo IIi

Topo IIi

HDACi

HDACi

HDACi

HDACi

Anti-HER2

VRACi

Savene™

PXD101

Avugane™

Baceca®

Extravasation

MM (mono)

MM (+ Velcade)

T-cell lymphoma

Savicol™

Topotect

Zemab®

Endovion

Acne Vulgaris

BCC

FAP & Colon cancer

Brain tumours

Breast cancer

Cancer

mTOR

HDACi

E2F, HSP90 etc.

TOP216

More candidates

More candidates

Breast and prostate cancerCancer, malaria psoriasis etc.

Cancer

e2006

e2008

e2008+

e2008+

e2008+

e2008+

e2008

e2008+

e2008+

e2008+

e2008+

e2008+

Phase I expected in Q1 2007

Non-cancer indications will be out-licensed

Ovarian cancer

PC Phase I Phase II Phase III Reg. Launch

Constant pipeline in-flow of promising new cancer drug candidates

Colorectal cancer

16

Savene™ for extravasations (EV)

Extravasation- Accidental leaking of chemo to healthy tissue

A very serious complication - Affects 1 in 100 cancer patients

- Current therapy: surgery + rehabilitation Very costly for both patient and hospital

TopoTarget solution:

UK: Registration of extravasation cases

1460

237

121159

182

243295

367

416

0

50

100

150

200

250

300

350

400

450

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04

Source: Extravasation org UK

Complicated necrosis Savene™ treatment Current treatment

Extra-vasation accident

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Savene™ - Approaching the market

2000: Pre-clinical P-o-C published

2004/5: Very convincing phase II/III results– 98% success in prevention of necrosis and surgeries– only one patient in the trial had surgery

Orphan Drug status in Europe and the US

Market launch expected Q4 2006 in Europe and the US

— Europe: MAA filed in August 2005

— US: NDA process initiated

•n •Surgery•Success

•rate

51 1 98%

TT01: P value < 0.025

TT02:P value < 0.025

From idea to brand in only 7 years!!1999

First results

2006

18

PXD101: unique HDAC inhibitor profile– highly potent prevents cancer cell growth– broad ranged potential against several tumours– Reduces cancer cell chemo resistance

Highly promising clinical results— Tumour reduction seen in a number of patients — Stable disease registered in cancer patients — no significant bone marrow toxicity

highly promising for use of PXD101 in combination therapy

Substantial clinical trial programme - 2 Phase II trials; multiple myeloma (MM) and T-cell lymphoma- 3 Phase Ib/II combination trials in ovarian and colon cancer + MM - NCI will initiate and finance 9-11 PhI or II trials; first trial initiated

PXD101 – Promising HDAC inhibitor

First Proof-of-concept data anticipated Q3 2006 (MM Phase II trial)

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BCC is the most common of all cancers– 5m patients annually and incidence is growing– usually treated by surgical procedures

TopoTarget solution: Baceca®– Patent protected use of valproic acid (VPA),

a mild HDAC inhibitor– Potential as first effective topical treatment– 100% response in clinical efficacy study (pilot)

Two Phase IIb trials started in Q4 2005– Treatment: Retinoid (Vitamin A) +/- Baceca®– placebo-controlled, randomised (basis for

registration filing)

Commercial strategy– Baceca® will be partnered (dermatology player)

Baceca® for basal cell carcinoma (BCC)

•n•Full

response•Partial

response

•4

•No response

•0

Clinical efficacy data

Pictures shown for illustrative purposes

6 weeks

BACECA® & retinoid

Before treatment

•10 •6

20

Avugane™ for acne vulgaris

Large clinical need– ineffective therapies and adverse effects

Avugane™ – reformulation of the HDAC inhibitor valproic acid (VPA) – targets crucial causes of acne via inhibition of HDACs– provides an effective topical treatment – utilises synergistic activity of HDAC inhibition and retinoid function

Promising results from randomised Phase II trial - comparable efficacy compared to standard retinoid treatment- advantageous tolerability compared to standard retinoid treatment- indications of accelerated clinical response

Commercial strategy– to be out-licensed to experienced dermatology player

Approval expected in > 2008

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Patient 1-3AVUGANE treated

Patient 4-5Isotretinoin treated

Avugane™: Phase II trial data / efficacy

22

Savicol™ for FAP and colon cancer

Clinical problem: FAP leads to colon cancer – FAP (Familial Adenomatous Polyposis) is a niche indication– Current therapy: removal of the colon

TopoTarget solution

– Savicol™ is a new formulation of VPA (HDACi)– Prevents polyp growth

Orphan Drug status in Europe and the US

Pivotal Phase II trial initiated in FAB in Feb06– 66 patients approved by EMEA

Commercial strategy– Sell in Europe through own sales force– Out-licence to partner in the US– Successful Savicol™ treatment can be applied to colon cancer

FAP colonic polyps

FAP disease model

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Strong news flow since IPO

IPO with DKK 259m raised in new capital June

Closing of Savene™ (extravasation) multi-centre phase II/III trial June

FDA grants Orphan Drug Designation for Savicol™ against FAP July

Start Phase II PXD101 monotherapy trials in multiple myeloma in the US August

Submission of Savene™ (extravasation) registration file to EMEA August

Licensing agreement with NeuroSearch regarding NSD-551 against cancer August

Start of phase Ib PXD101 combination study against ovarian cancer Sept

Start of phase Ib PXD101 combination trial in colorectal cancer in the US Sept

Start of randomized, blinded proof-of-concept Baceca® phase II study in BCC October

Presentation at AACR-EORTC of phase I and pre-clinical results on PXD101 November

Presentation at American Society of Hematology Annual Meeting:PXD101 demonstrates promising safety profile and potential anti-tumour effect December

Pipeline expansion: Acquisition of promising mTOR drug programme December

Savene™ promotion agreement covering Eastern Europe and Austria December

Start of randomized, pivotal Savicol™ phase II study in FAP February

Start of phase II with PXD101 for t-cell lymphomas February

Start Phase Ib/II PXD101 and Velcade combination trials in multiple myeloma March

Start of first NCI sponsored PXD101 clinical trial April

Completion of Phase II of Avugane™ in acne vulgaris April

FDA grants priority review status to Savene™ April•

Event Timing

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2006 – A continuously strong news flow

Savene™ for Extravasation: Marketing approval in Europe Marketing approval in the US Launch in both Europe and the US

PXD101 for cancer: Preliminary proof-of-concept data from first phase II trial in MM Results from phase Ib combination trial in ovarian cancer Results from phase Ib combination trial in colorectal cancer Start randomized phase II trials in multiple myeloma Start of several phase I or II trials under the NCI deal

Baceca® for BCC: Completion of phase II trials

Avugane™ for acne vulgaris: Final phase II proof-of-concept data

Topotect for BM: Completion of phase I/II etoposide combination trial Initiation of further phase I and of phase II trials

Savicol™ for FAP: Completion of first phase II trial

Zemab® for breast cancer: Initiation of phase II trial

Event

25

What do you need

• Capable management – can stand up to close scrutiny • Low risk - product close to market• Large market product – blue sky on horizon – opportunity for high reward to compensate for

high risk.• Science validated through partnering deals.• A full pipeline – constant stream of news.• A pre-money value approaching €100m – critical mass• Capability to replenish the pipeline • Cash in the bank – pre-IPO round – convince them that you don’t need them.• Not too many hurdles. (Product supply sourced)• Economic cycle in right phase (growth) – high beta stock do better in early stage of economic

cycle. Ramp up existing biotechs, become too expensive will look at new biotechs. • If not buying shares in proven biotechs, even less chance will buy in unproven.• List on right market - have Bankers appropriate to that market (Alfred Berg, Danske Bank and

Handelbanken). Local Hero.• Good team of auditors and lawyers, public relations firm. (Deloitte, Price Waterhouse,

Mazanti, Davis Polke – 144A compliance)• Don’t listen to market tittle tattle• Get offer price right – don’t be too greedy.

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Pro’s

– Better access to capital – Allows M&A strategy using shares as a currency – Profile helps keep and attract best employees – Eases collaboration especially abroad – Success story to get through the eye of the needle– Strengthens project and financial revision – Increases focus on goals and P2P

– Exit opportunity for our VC’s and a healthy evolution out of VC era – Trade sale at a good price only for “first mover” platform-or single

project companies

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Con’s

The IPO Process • Takes time – very time consuming and eats management resources • Dangerous for the day to day business • Challenging Logistics• Expensive • May fail

Post-IPO• No control of ownership – risk of hostile takeover – especially if traded below real value • Focus on long term value creation hampered by impatient market • Resource demanding • A challenge to secure correct interpretation of company messages – and control anticipation • New routes of communication, width and exposure • Stock exchange and market demands on visibility in strategy and projects may be a competitive

disadvantage

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Relationships: Reputation

www.whateveryoudodontbuyacompaq.com

29

Disclose

“Returns to transparency . . . exceed returns to secrecy.”

To Tell the Truth: Consider adding an “intangibles audit” to your annual report. The audit can spell out your thinking about intangibles, communicate your goals, and assess your performance.

The Shell Report

31

Share information

IPO price (10 June 2005): DKK 22.50 RIC: TOPO.CO No. of shares (29 May 2006) : 40,674,207 Price (29 May 2006): DKK 40,20 Market Cap: DKK 1,635 million

IPO lock-up period for VC investors expired 10 Dec 2005

Main investors > 5%:BankInvestHealthCapAntiAnthra

Free float: > 94%

32

TopoTarget – Answers for Cancers

Early cash-flow from niche products Long-term growth from blockbuster products A leading European oncology company

Answers for Cancer

Technology Product Indication

Topo IIi

Topo IIi

HDACi

HDACi

HDACi

HDACi

Anti-HER2

VRACi

Savene™

PXD101

Avugane™

Baceca®

Extravasation

MM (mono)

MM (+ Velcade)

T-cell lymphoma

Savicol™

Topotect

Zemab®

Endovion

Acne Vulgaris

BCC

FAP & Colon cancer

Brain tumours

Breast cancer

Cancer

mTOR

HDACi

E2F, HSP90 etc.

TOP216

More candidatesMore candidates

Breast and prostate cancerCancer, malaria psoriasis etc.

Cancer

e2006

e2008

e2008+

e2008+

e2008+

e2008+

e2008

e2008+

e2008+

e2008+

e2008+

e2008+

Phase I expected in Q1 2007

Non-cancer indications will be out-licensed

Ovarian cancer

PC Phase I Phase II Phase III Reg. Launch

Constant pipeline in-flow of promising new cancer drug candidates

Colorectal cancer

Technology Product Indication

Topo IIi

Topo IIi

HDACi

HDACi

HDACi

HDACi

Anti-HER2

VRACi

Savene™

PXD101

Avugane™

Baceca®

Extravasation

MM (mono)

MM (+ Velcade)

T-cell lymphoma

Savicol™

Topotect

Zemab®

Endovion

Acne Vulgaris

BCC

FAP & Colon cancer

Brain tumours

Breast cancer

Cancer

mTOR

HDACi

E2F, HSP90 etc.

TOP216

More candidatesMore candidates

Breast and prostate cancerCancer, malaria psoriasis etc.

Cancer

e2006

e2008

e2008+

e2008+

e2008+

e2008+

e2008

e2008+

e2008+

e2008+

e2008+

e2008+

Phase I expected in Q1 2007

Non-cancer indications will be out-licensed

Ovarian cancer

PC Phase I Phase II Phase III Reg. Launch

Constant pipeline in-flow of promising new cancer drug candidates

Colorectal cancer

“It’s not enough that we succeed. Cats must also fail.”

MOTIVATION