1. Nov.20.2009 GTX – A SHOT IN THE ARM, OR A COSTLY MISTAKE by PEER PRESSURE Cure’s Dilemma

2. 2 Nov.20.2009 Agenda Introduction to Diseases Introduction to Drug Candidates A bit of Scientific Background SWOT Analysis Summary of Financials Signals for Success Recommendations

3. 3 Nov.20.2009 Inflammatory Bowel Disease (IBD) Crohn’s Disease (CD): Affects small intestine & colon Approx. 830,000 cases in the 7 pharma markets Mild to moderate cases served by steroids and immunomodulators Moderate to severe cases served mostly by biologics What Ails the Market? Ulcerative Colitis (UC): Affects colon & rectum Approx. 1.12MM cases in US, EU, and China Mild cases typically served by 5- ASAs Moderate to severe cases served by biologics and immunomodulators

4. 4 Nov.20.2009 GTX-001 GTX-002 Biologic Target Market: - severe cases of CD and UC - Size: ~ 244,000 US & EU Key to success: - positive response - few side effects in patients who don’t react to TNF-α inhibitors IκK Kinase inhibitor Target Market: - mild-moderate cases of CD - Size: ~ 618,000 US & EU Key to success: - overwhelmingly positive response in mild and moderate CD sufferers GTX-001 vs. GTX-002

5. 5 Nov.20.2009 Source: http://www.crohnsdiseasefocus.com/articles/crohns-disease-treatment/crohns-disease-treatment-anti-tnf.php http://www.healthcentral.com/rheumatoid-arthritis/h/list-of-humira-side-effects.html http://www.empr.com/cimzia-approved-for-rheumatoid-arthritis/article/136790/ Novel Approaches to an Old Problem Cytokines, Chemokines, Anti-apoptotic factors VLA-1 GTX002 VLA-1 TNF-α LPS IFNγ IKK NFκB Target gene activation GTX001 NFκB inducers What’s out thereNew Approach

6. 6 Nov.20.2009 GTX-001 – SWOT Analysis Strengths Weaknesses Not a TNF-α inhibitor Humanized (assumption) Effective at low concentrations Works for both CD and UC Can be combined with steroids IV administered May require unstable treatment regimen Unexpected side effects Opportunities Threats CD: 45 – 70% of severe patients react poorly to TNF-α inhibitors UC: 50 – 60% of severe patients react poorly to TNF-α inhibitors Potential to combine with steroids for induction therapy, and continue use for maintenance. Tough competition from other biologic treatments Competitor biologics administered subcutaneously Competitor patent expiry may cause market prices to fall

7. 7 Nov.20.2009 GTX-002 – SWOT Analysis Strengths Weaknesses Orally administered Great in combination with ASA/steroids Effective at treating mild to moderate CD May cause liver and kidney toxicities May alter GI commensal flora Inhibiting IκB kinases blocks beneficial cellular processes Not effective for UC sufferers Opportunities Threats CD: Mild to moderate sufferers don’t react to ASA treatment Comparable treatments cause serious side effects Potential to combine with steroids for induction therapy, and continue use for maintenance. Small target market size Competitor prices are relatively low Low probability of FDA approval due to potential serious side effects Consumers may not differentiate GTX-002 from other IM treatments

8. 8 Nov.20.2009  1) Competitive products’ patents will expire before 2020  2) Patented products have a price range of $10,000-30,000  GTX-001 should be priced at the low end of patented products Summary of Financials – GTX-001 Pricing NPV and IRR Key considerations Market Share Key assumptions PriceNPVExp. Value 10424,91064,562 12684,162220,112 14943,413375,663  23-year time period beginning 2010  Probability of getting FDA’s approval: 60%**  Discount rate: 8%  Biologics market: 45-70% of CD patients and 50-60% of UC patients’ needs are unmet  Among them 10%(CD) and 30%(UC) will try GTX-001 in the first year  This will grow by 10% if effective Price Range Calculated IRR USD 10,000 – 14,000 (In thousand dollars) 14% (price $10,000) * Exp.Value : Expected value of the project considering 60% chance of getting FDA’s approval ** Source: http://www.msnbc.msn.com/id/20321830/

9. 9 Nov.20.2009  All other immunomodulator products are currently off-patent Summary of Financials – GTX-002 Pricing NPV and IRR Key considerations Market Share Key assumptions PriceNPVExp. Value 1-562,671-527,987 2-253,995-342,781 354,681-157,576  23-year time period beginning 2010  Probability of getting FDA’s approval: 60%  Discount rate: 8%  5% of patients with no treatment or 5- ASA only will try GTX-002 in 1 st yr  10% of patients with steroids will be likely to try GTX-002 due to steroids’ long-term side effects  This will grow by 10% if effective Price Range USD 1,000 – 3,000 (In thousand dollars) * Exp.Value : Expected value of the project considering 60% chance of getting FDA’s approval

10. 10 Nov.20.2009 Signals for Success Preclinical Stage Clinical Stage GTX-001 GTX-002 Anti VLA-1 antibody Effective & safe Positive dose response Anti VLA-1 antibody Effective & safe Positive dose response IKK inhibitor Can be used with ASA and steroids Toxicity & susceptibility to infections Distinct gut flora IKK inhibitor Can be used with ASA and steroids Toxicity & susceptibility to infections Distinct gut flora Remission in CD & UC patients unresponsive to TNFα inhibitors With steroids: refractory CD & UC patients Humanized: lower side effects & no change in gut flora Oral administration and compliance Mild-moderate CD refractory to 5-ASAs

11. 11 Nov.20.2009 Recommendations License Marketing License only GTX-001 Market GTX-001 for both CD and UC Price GTX-001 at $10,000/annual supply Market GTX-001 primarily to health professionals Advertise heavily in professional health journals Host conferences promoting new treatment

12. 12 Nov.20.2009 APPENDIX

13. 13 Nov.20.2009 Appendix 1 Source: Peyrin-Biroulet L, Desreumaux P, Sandborn WJ, Colombel JF Volume 372, Issue 9632, 5 July 2008-11 July 2008, Pages 67-81

14. 14 Nov.20.2009 Appendix 2 – Market Landscape Projection GTX-001 Patients Population Market Size (in USD) Crohn’s Disease Ulcerative Colitis Total number of patients using biologics: 145,000 (US+EU) Total number of patients using biologics: 99,000 (US+EU) Number of patients for competitive products are calculated by 2008 sales divided by yearly cost Number of patients for GTX-001 is based on the previous assumptions. Competitors’ sales are based on the scenario of 10% drop in price after gone off-patent

15. 15 Nov.20.2009 Appendix 3 – Assumptions for financials Revenues Cost Allocation GTX-001(in thousand dollars) Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 year20102011201220132014201520162017201820192020 Revenue CD000000000065,250 UC0000000000148,500 TOTAL0000000000213,750 Cost licensing fee (10,000) late-stage dev cost (60,000) milestone payment (40,000) promotion al costs (100,000) royalty cost (21,375) TOTAL(50,000)(40,000) (100,000) (121,375) Profit(50,000)(40,000) (100,000) 92,375 Present Values(50,000)(37,037)(34,294)(31,753)(29,401)(68,058)(63,017)(58,349)(54,027)(50,025)42,787 NPV424,910 NPV(60% of FDA approval) 64,562  Late-state development costs occur at last 5 years of development (Phase 3)  Equal amount of annual milestone payments  No returns, allowances thus net sales equal total revenues  The probability of getting FDA’s approval

16. 16 Nov.20.2009 Appendix 4 – Sensitivity Analysis GTX-001 GTX-002 inc. rate price 91011121314 5%-182,001-122,979-63,958-4,93754,084113,106 7%-121,261-55,49110,27976,049141,819207,590 10%-13,21464,562142,337220,112297,888375,663 12%72,092159,346246,600333,854421,107508,361 15%223,973328,102432,232536,361640,491744,620 20%557,454698,637839,820981,0031,122,1861,263,369 inc. rate price 0.811.522.53 5%-600,755-572,646-502,373-432,099-361,826-291,553 7%-587,898-556,575-478,266-399,957-321,649-243,340 10%-565,028-527,987-435,384-342,781-250,179-157,576 12%-546,971-505,416-401,528-297,640-193,752-89,863 15%-514,823-465,230-341,249-217,268-93,28730,694 20%-444,235-376,995-208,897-40,798127,300295,399 (In thousand dollars) Sensitivity analysis for NPV reflecting 60% chance of getting FDA’s approval