Targeted Therapeutics for Inflammatory Disease

Jefferies Global Healthcare Conference – June 2015

Forward Looking Statements / Safe Harbor This presentation and the accompanying oral commentary contain “forward-looking” statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation and the accompanying oral commentary, including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations, are forward looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “might,” “approximately,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or other similar expressions. Forward looking statements appear in a number of places throughout this presentation and the accompanying oral commentary and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for AQX-1125 and our future product candidates, our intellectual property position, the degree of clinical utility of AQX-1125 and our future product candidates, particularly in specific patient populations, our ability to develop commercial functions, expectations regarding clinical trial data, our results of operations, cash needs, financial condition, liquidity, prospects, growth and strategies, the industry in which we operate and the trends that may affect the industry or us.

Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In evaluating these statements, you should specifically consider various factors, including the risks outlined under the caption “Risk Factors” set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which we filed with the Securities and Exchange Commission (“SEC”) on May 12, 2015 and other reports and filings we will make with the SEC from time to time. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

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A Novel Class of Anti-Inflammatory Therapies

AQX-1125, lead SHIP1 activator:

•  Broad anti-inflammatory potential

•  Positive Preclinical and Clinical PoC

•  Ongoing Phase 2 trials:

•  FLAGSHIP (COPD Exacerbations) – Top Line Mid-2015

•  LEADERSHIP (BPS/IC) – Top Line Mid-2015

•  KINSHIP (Atopic Dermatitis) – by Q1 2016

•  Worldwide rights and patent coverage to 2028

Diverse library of next-generation compounds targeting SHIP1

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Experienced Management

David Main, President & CEOINEX Pharmaceuticals, QLT

Stephen Shrewsbury, CMOSarepta, MAP, Chiron, Glaxo

Kamran Alam, CFOAngiotech, AnorMED, PwC

Lloyd Mackenzie, VP Technical OpsQLT, Inflazyme

David Mitchell, VP Global Regulatory Affairs & QAAbbVie, Biogen Idec, Bayer Schering

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Well Capitalized with Large Pharma Investment

•  ~$34.4M cash on hand as at March 31st, 2015

•  Cash to mid-2016 and data from all 3 Phase 2 trials.

•  Backed by Large Pharma Investment:

•  Analyst coverage:

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SHIP1 - Nature’s Path to Resolve Inflammation Potential Next-Gen Anti-Inflammatory Drugs

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PIP3

SHIP1 Activators

Cell activation and function

PI-3,4-P2 SHIP1 Immune cells

Inflammation Cell growth and

survival

PI3K All cells

PTEN All cells

PI-4,5-P2

Cancer

Mucosal  Inflamma-on      

Unmet  Need      

Short  Dura-on  Trials    Acute  Endpoints  –  Exacerba-ons,                                                                                                                                                                      Flares,  Pain  

   

Expand  into    Chronic  Endpoints  

Lung/Airway •  COPD Exacerbations

(Moderate-Severe)

•  Asthma

•  Non-CF Bronchiectasis

•  Churg-Strauss Syndrome

•  Idiopathic Pulmonary Fibrosis

•  Chronic Rhinosinusitis

Focused Strategy & Broad Opportunities Phase 2 trials supported by preclinical and clinical PoC

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Urinary Tract

•  BPS/IC

•  Glomerulonephritis

Gastrointestinal •  Eosinophilic Esophagitis

•  Crohn's Disease

•  Ulcerative Colitis

Epidermal •  Atopic Dermatitis

Clinical Development in Large, Underserved Markets

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AQX-1125 SHIP1

Activator

Next Gen SHIP1

Activator

Research/Preclinical Phase 1 Phase 2

Chronic Obstructive Pulmonary Disease Exacerbations (COPD)

Bladder Pain Syndrome/Interstitial Cystitis (BPS/IC)

Inflammation

Immuno-oncology

SAD / MAD / FE

Chronic Obstructive Pulmonary Disease (COPD) — PoC

Asthma — PoC

Com

plet

edO

ngoi

ngFu

ture

Atopic Dermatitis

Other Respiratory, Urology, Gastrointestinal

AQX-1125 Clinical Program

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Desirable Once Daily, Oral Pharmacokinetics

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Single  Ascending  Dose  PK  

0.1

1.0

10.0

100.0

1000.0

10000.0

0 20 40 60 80 100

Con

cent

rati

on (n

g/m

L)

Time (h)

542 mg400 mg200 mg100 mg50 mg17 mg

t1/2=~21 h

Phase 2a Proof of Concept Achieved

COPD

•  LPS challenge; model of the inflammatory mechanisms seen in COPD

•  Cross-over trial; 40 volunteers, once daily x 7

•  Sputum neutrophils, p<0.1; trend analysis other cell counts

Asthma

•  Allergen challenge; model of inflammatory mechanisms in allergic response

•  Cross-over trial; 22 mild asthmatics, once daily x 7

•  Late Asthmatic Response (LAR), p<0.05; trend analysis for sputum cell counts

Two different challenge models for multiple inflammatory diseases

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COPD PoC: AQX-1125 Inhibits Sputum Neutrophils AQX-1125 met primary endpoint in healthy volunteers

CI (0.82-3.16) CI (2.25-8.12)

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COPD PoC: AQX-1125 Compares Favorably Robust Inhibition of Inflammation

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Drug Class % Neutrophil Inhibition

AQX-1125 SHIP1 activator 62%

Ph-797804 p38 MAP kinase

Inhibitor 50%

Roflumilast (Daxas, Daliresp) PDE4 inhibitor 39%

Prednisolone / Fluticasone Corticosteroids No effect

Current AQX-1125 Phase 2 Development

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COPD Exacerbations Remain Major Problem AQX-1125’s properties and tolerability provide competitive differentiation

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•  Approx. 600 million COPD cases globally with 65 – 200 million moderate to severe. 25 million affected in the US.

•  Despite numerous therapies, majority of moderate to severe patients still suffer exacerbations

•  High unmet need for effective oral anti-inflammatories that reduce exacerbations, decrease hospitalization and slow/prevent disease progression

FLAGSHIP: Targeting Exacerbations

Objective:

•  Evaluate AQX-1125 in COPD patients post exacerbation

•  ~400 moderate to severe COPD patients from EU, AUS NZ and USA

•  IND Accepted by FDA in June, 2014

Endpoints: •  Primary: Sized to detect effect of AQX-1125 (200 mg capsule q.d.) vs. placebo on recurrent

COPD exacerbations over 12 weeks (reduction of AAC for EXACT-PRO*) utilizing eDiaries

•  Secondary: CAT, PFT, safety, PK, healthcare utilization (rescue meds / hospitalization)

*EXACT-­‐PRO=  EXAcerba2ons  of  Chronic  obstruc2ve  pulmonary  disease  Tool  –  Pa2ent  Reported  Outcome  

Key Milestones: First  Pa2ent   Q4  2013  ✔  

Top-­‐line  data   Mid-­‐2015  (Enrollment  Complete)  

Full  data   At  Scien2fic  Mee2ng  TBD  

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EXACT: Comprehensive COPD Symptom Assessment Offers robust and data rich evaluation of response to therapy

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•  AZ, Almirall, Bayer, BI, Forest, GSK, Merck, Novartis, Ortho-McNeil, Pfizer, Sepracor

•  FDA guidance received January 2014; EMA guidance received April 2015

•  Designed to standardize the method for evaluating the frequency, severity, and duration of acute exacerbations of COPD

•  Patient reported outcome (PRO) daily questionnaire utilizing eDiaries

•  Developed with considerable regulatory consultation (FDA and EMA)

Developed by Specialists in Outcome Measurement & Pharma Consortium

BPS/IC: Getting to the Source of the Pain AQX-1125’s distribution and anti-inflammatory properties compelling

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•  Up to 14 million may be affected in the US

•  Disease driven by chronic inflammation and pain following damage to bladder lining

•  Common treatment approach: direct instillation for short-term relief of symptoms

•  Oral administration of AQX-1125 results in bladder exposure systemically and through urine.

LEADERSHIP: Potential Once Daily, Oral Pain Relief

Objective: •  Evaluate AQX-1125 in subjects with BPS/IC pain

•  ~70 moderate to severe patients from Canadian and US sites

•  IND Accepted by FDA in May, 2014

Endpoints: •  Primary: Sized to detect effect of AQX-1125 (200 mg capsule once daily) vs.

placebo on reduction of mean pain score (11 point NRS*) at 6 weeks vs. baseline utilizing eDiaries

•  Secondary: urinary symptoms, safety, PK, QOL

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Key Milestones: First  Pa2ent   Q3  2013  ✔  

Top-­‐line  data   Mid-­‐2015  (Enrollment  Complete)  

Full  data   At  Scien2fic  Mee2ng  TBD  *NRS=  Numerical  Ra2ng  Scale  

A Novel Approach to Atopic Dermatitis Link between SHIP1 and dermatitis creates opportunity for AQX-1125

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•  Estimated 17.8 million affected with all forms of AD in the US (2/3 with moderate to severe form).

•  Global prevalence of AD varies between 1%-20%.

•  Disease characterized by excessive dermal immune cell activation and mobilization.

•  Severe AD (11% of AD population) treated with corticosteroids, cytotoxics and immunosuppressants not suitable for long term treatment.

•  Large market and limited competition for oral, well tolerated treatment.

KINSHIP: Potential Oral Relief of AD Symptoms

Objective: •  Evaluate AQX-1125 in subjects with mild to moderate AD

•  ~50 mild to moderate patients from Canadian sites

Endpoints: •  Primary: Sized to detect effect of AQX-1125 (200 mg capsule once daily) vs.

placebo on change from baseline in Total Lesion Symptom Score (TLSS) after 12 weeks of treatment

•  Secondary: AD symptoms, safety, PK

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Key Milestones: First  Pa2ent   Q4  2014  ✔  

Top-­‐line  data   Q1  2016  (Enrollment  Complete)  

Full  data   At  Scien2fic  Mee2ng  TBD  

Key Milestones: Near-term data, expanded market opportunities and pipeline advancement

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COPD Exacerbations •  First patient: Q4 2013 ✔

(Enrollment Complete)

•  Top-line Data: Mid-2015

•  Scientific Meeting: TBD

Atopic Dermatitis: •  First patient: Q4 2014 ✔

(Enrollment Complete)

•  Top-line Data: Q1 2016

•  Scientific Meeting: TBD

BPS/IC •  First patient: Q3 2013 ✔

(Enrollment Complete)

•  Top-line Data: Mid-2015

•  Scientific Meeting: TBD

Additional AQX-1125 Trials: •  CRS Trial Initiated: 2015

Next Generation Compounds: •  Lead Selection: H2 2015

Targeted Therapeutics for Inflammatory Disease