1. Laquinimod, an Oral Product in Development for the Treatment of Relapsing Remitting Multiple Sclerosis Steve Glenski, PharmD Medical Affairs Teva Neuroscience Teva Pharmaceuticals, Inc.

2. Teva Innovative Research & Development  Oral Agent –Once Daily Dosing  Product of Rational Drug Design –A novel oral synthetic compound, licensed from Active Biotech (Lund, Sweden) in September 2004 –A quinoline-3-carboxamide derivative, structurally related to roquinimex (Linomide) – laquinimod designed to maximize safety and efficacy  Immunomodulator, not a general immunosuppressor  Reduced disease activity in two phase II clinical trials  Tolerability and safety profile –No opportunistic infections –Transient self-limiting elevations in liver enzymes Introduction to Laquinimod Unique Features of Laquinimod

3. Teva Innovative Research & Development Mechanism of Action  Lack of immunosuppression  Down-regulation of antigen presenting, pro-inflammatory, NK and B cell pathway genes  Th2 shift  Decreased IL-17 in splenocytes  Reduced T cell infiltration  Independent of IFN-β mode of action  Prevents demyelination and axonal loss

4. Teva Innovative Research & Development Prevention of Demyelination and Axonal Loss Effect on Demyelination Area Wegner C, et al. Presented at the 24 th Congress of the European Committee for Treatment and Research in Multiple Sclerosis September 17-20, 2008 Montreal, Canada.

5. Teva Innovative Research & Development  Double-blind study  Duration – 36 weeks  Patient population – RRMS, with ≥1 enhancing lesions in screening MRI scan –Laquinimod 0.6mg – 106 patients –Laquinimod 0.3mg – 98 patients –Placebo – 102 patients  MRI (Gd/T1/T2) performed at weeks 12, 16, 20, 24, 28, 32 and 36  Safety assessment performed every 4 weeks LAQ/5062 STUDY (PHASE IIb) Study Design Comi, et al (LAQ/5062 Study Group). Lancet. 2008;371:2085-92.

6. Teva Innovative Research & Development Effect of Laquinimod on T1 Gd Enhancing Lesions 51% Reduction (Week 12-36) (Mean) p < 0.0001 60% Reduction (Week 12-36) (Median) p < 0.0001 0.3 mg Laquinimod 0.6 mg Laquinimod Placebo Median Number of Cumulative Gd Enhancing Lesions (week 12-36) Mean Number of Cumulative Gd Enhancing Lesions (week 12-36) Adapted from Comi, et al (LAQ/5062 Study Group). Lancet. 2008;371:2085-92.

7. Teva Innovative Research & Development Laquinimod’s Effect on Annual Relapse Rate Annualized Relapse Rate 0.3 mg Laquinimod 0.6 mg Laquinimod Placebo 33%  Trend (p=0.0978) toward reduction of annualized relapse rate  Study was not powered to detect a statistical effect on relapse rate Adapted from Comi, et al (LAQ/5062 Study Group). Lancet. 2008;371:2085-92. 0.759 0.522 0.775 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9

8. Teva Innovative Research & Development Safety and Tolerability * Assessed as possibly related to study drug in both placebo-controlled and active extension studies Data from both Phase IIb Study and its Extension  No deaths  No effect on vital signs or ECGs  Transient self-limiting elevations in liver enzymes  No opportunistic or life-threatening infections  Serious Adverse Events:* –Budd-Chiari Syndrome (n=1): reversible, in a patient with Factor V Leiden mutation –Pituitary Adenoma (n=1): incidental MRI finding. Was present before initiation of study drug. No signs of adenoma on histology –Liver enzymes elevation (n=1): reversible, without elevations in bilirubin. Re-appeared in same magnitude 5 months after laquinimod was stopped Comi G, et al (LAQ/5062 Study Group). Lancet. 2008;371:2085-92.

9. Teva Innovative Research & Development Conclusions  In the Phase IIb study, an oral, once-daily dose of Laquinimod 0.6mg has shown: –A robust, consistent and early effect on MRI disease activity in RRMS patients –A trend in reducing the number of relapses (the study was powered to detect an effect on MRI disease activity) –A trend in slowing the progression of brain atrophy  The effect of Laquinimod 0.6mg on MRI disease activity was sustained and reproducible in the 36 wks extension phase of the study  Good safety profile  Excellent tolerability

10. Teva Innovative Research & Development Clinical Development Plan Two Phase III Studies  Two Phase III Studies: –MS-LAQ-301(ALLEGRO):  Double-blind, placebo-controlled, 1000 patients with RRMS  Global study (NA/EU/ROW - 40/102/30 sites)  Recruitment initiated – Nov 2007 –MS-LAQ-302 (BRAVO):  Placebo-controlled, active-controlled (Avonex ® ), 1200 patients with RRMS  Global study (NA/EU/ROW - 40/67/49 sites)  Recruitment initiated – Apr 2008 ORAL LAQUINIMOD 0.6 MG OD; 500 RRMS PATIENTS ORAL MATCHING PLACEBO; 500 RRMS PATIENTS 24 MONTHS OF DOUBLE-BLIND TREATMENT ORAL LAQUINIMOD 0.6 MG OD; 400 RRMS PATIENTS ORAL MATCHING PLACEBO; 400 RRMS PATIENTS 24 MONTHS OF TREATMENT; DOUBLE BLIND FOR ORAL, RATER BLINDED FOR AVONEX ® AVONEX ® 30MCG/WEEK; 400 PATIENTS ENDPOINTS: CONFIRMED RELAPSES, PROGRESSION OF DISABILITY (EDSS), MRI (T1/T2/BH/ BRAIN VOLUME), MSFC ENDPOINTS: RELAPSES, EDSS, MRI (T1/T2/BLACK HOLES, BRAIN VOLUME), MSFC

11. Teva Innovative Research & Development Laquinimod Clinical Development Plan Two Phase III Studies Enrollment completed Nov 2008 Results expected early 2011 Enrollment completed June 2009 Results expected late 2011