Immunity for Life TM · Phase II, Russia Q2-05 X Phase II, UK Q3-06 Partnering = Clinical trial = Partnering X = Trial data = Conclusion of patient treatment and expected results

Immunity for Life TM

DnB NOR MarketsHealth Care Summit 2006

Prof. Dr. Jan Raa, Chief Scientific Officer

19 September 2006

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Pharmaceutical development program+

Cash generating businesses

A biomedical company

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Business structure

Biotec Pharmacon ASA(Tromsø/Oslo)

Immunocorp AS(Oslo)

• Consumer health products (Immutol, Immuderm)• Animal health products (MacroGard)

Immunocorp(Irvine, California)

Marine bioproducts and bioprospecting

(Tromsø)

100%

100%

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Cash generating businessesHigh-margin non-pharmaceutical products with good growth potentials, based on immune modulating compounds and DNA-modifying enzymes

Consumer health BiochemicalsAnimal health & nutrition

33,8 MNOK in 2005 11,2 MNOK in 200523,8 MNOK in 2005

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The pharmaceutical program1) Basic R&D (Tromsø, Oslo, USA, Berlin)2) Clinical trials:

A) Treatment of diabetic ulcers– Phase II study completed (Russia)– Phase II study ready to start (England)

B) Immunotherapy of cancer – Phase I/II - Neuroblastoma (New York)– Phase I/II - Breast cancer (Oslo)– Phase I/II - Non-Hodgkins lymphoma (Oslo)

C) Prevention of oral mucositis– Phase II study completed (England)

D) Treatment of burn wounds (Bergen)

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How it started

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Scientific foundation: Biochemistryand innate immunity

*

Two cutting-edge discoveries (1980-ies) on the effect of beta-glucans on:

1) Cancer: Beta-glucan caused complete disappearance of tumors in mice

2) Resistance to infections: Oral beta-glucan enhanced resistance to infectionsand the efficacy of injected vaccines(first demonstrated with salmon)

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The pharmaceutical product candidateSBG – Soluble Beta-Glucan

• An ”alarm signal molecule” - present in cell walls of yeast (a beta-1,3/1,6-glucan)

- alien to the human body

• Mobilizes immune mechanisms involved in:- the body’s own destruction of cancer cells

- infection defence

- wound healingCH2OH

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Biotec Pharmacon’s in-house GMP-production of pharmaceutical gradeSBG (approved by Norwegian authorities, SLV)

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Mode of action

Enhanced • wound/ulcer healing

• anti-cancer mechanisms

• infection defence

• vaccine efficiency

SBG binds to specific receptors on macrophages and other white blood cells in the body’s innate front-line defence, resulting in:

Receptors

SBG

Macrophage

”There is at bottom only one genuinelyscientific treatmentfor all diseases, and that is to stimulate the phagocytes”.

In ”The DoctorsDilemma” by G.B.Shaw, inspired by Metchnikoff’s Nobel Prize adress in 1908.

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SBG in diabetic ulcers

• Wound healing– Wounds will normally heal without complications in individuals with

normal immune functions and active macrophages– Macrophages play a key role in regeneration of damaged tissues and in

infection defence• Diabetic ulcers

– Macrophage activity is impaired in individuals with diabetes - a reasonwhy wounds may develop into chronic ulcers (in particular leg and foot ulcers)

– Scientists affiliated with Biotec Pharmacon discovered that beta-glucan reactivates diabetic macrophages and enhances wound healing in animals

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Proof-of-concept study in humans

• Open clinical study with 20 patients:– The results showed extraordinary good effect of SBG compared to best

available alternative treatment (control group)– Most of the ulcers treated with SBG had healed in 35 days compared to

only two in the control group

(Dr. T. Zykova, University Hospital, Archangelsk)

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Clinical studies (phase II) with SBG on diabetic ulcers

• A double-blinded phase II study with diabetic ulcer patients has been completed in Russia

• A second phase II study has been approved in the U.K.and is ready for start up

• Planning of a phase III study

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Timeline 2006 - 2008:

Start oftrial Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Phase II, Russia Q2-05 X

Phase II, UK Q3-06

Partnering

= Clinical trial = Partnering X = Trial data

= Conclusion of patient treatment and expected results

20082006 2007

Timeline Diabetic ulcers

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• 70 million people with diabetes in OECD

• 3.5 million patients are treated for diabetic foot ulcers annually

• Estimated market of USD 3.5 billion growing at 12-15% per year

• High cost of treatment; wound healing products account for approximately 10% of total cost

• Blockbuster potential if proved effective; current treatment cost of Regranex from Johnson & Johnsonmore than $1,000

Diabetic ulcers – market

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Immunotherapy of cancer

Basic ideaThe body’s immune system should ”perceive” tumor cells as alien and destroy them like it destroys infectious microorganisms

Two strategies:1) Vaccination with components unique for cells in the tumor2) Injection of pre-fabricated antibodies (mAbs = monoclonal antibodies)

Therapeutic efficiencyNot in line with expectations

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Total sales of mAbs

• Currently, 19 different mAbs approved for therapeutic use

• Revenue in 2004: Excess of $10.5 billion, an increase of 44% from 2003

• Projected sale of mAbs of $30 billion by 2010 (50 % cancer)

Cancer mAbs sales in 2005:

- Rituxan: US$ 3.3 billion

- Herceptin: US$ 1.7 billion

- Avastin: US$ 1.3 billion

Global sales of Antibody therapeutics

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Immunotherapy of cancer

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Biotec Pharmacon’s concept

Oral SBG + injected mAbs: • SBG mobilizes innate immune mechanisms that kill cancer cells

”tagged” by injected mAbs• Proof of concept data from Memorial Sloan-Kettering Cancer Center

(MSKCC), New York, in 2003 and 2004 showed that SBG elicits strong antitumour effect of injected mAbs

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Immunotherapy of cancer• Monoclonal antibodies (mAbs) bind to (”tag”) cancer cells • SBG triggers immune destruction of cancer cells ”tagged” by mAbs

mAb

SBG + mAb

EXAMPLE:

Effect of a monoclonalantibody (mAb) alone and in combination with oral SBG on tumour development in miceinoculated with human cancer cells

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“Moreover, mAbs that have virtually no tumorregression activity when used alone are able to

mediate complete regression when given in combination with beta-glucan”.

Trends in Immunology, Vol.25 No.3 March 2004

Literature quotation

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Clinical studies (phase I/II) with SBG +mAbs

• Memorial Sloan-Kettering Cancer Center, New York:– Neuroblastoma (15 patients)– SBG + mAb 3F8

• Ullevål University Hospital/ Tromsø University Hospital :– Breast cancer (12 patients)– SBG + Herceptin

• Rikshospitalet-Radiumhospitalet HF:– Lymphoma (12 patients)– SBG + Rituxan/MabThera

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Timeline Immunotherapy of cancer

Timeline 2006 - 2008:

Start oftrial Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Immunotherapy of cancer:Phase I/II, MSKCC, New York Q4-05

Phase I/II, Ullevaal, Oslo Q4-06

Phase I/II, Radiumhospitalet, Oslo Q4-06

Partnering, cancer

= Clinical trial = Partnering X = Trial data

= Conclusion of patient treatment and expected results

20082006 2007

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• Approximately 5 million new cancer incidents each year in OECD

• Sales of cancer antibodies (mAbs) reached USD 5 billion in 2004; expected to triple by 2010.

• Roche and Genentech major players

• High cost of treatment with mAbs and modest therapeutic effect

• Blockbuster potential if SBG can show improved effect of mAbs; current treatment cost with mAbs $20-$45,000.

Immunotherapy of cancer – market

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Perspective and implications

If human clinical studies confirm proof-of-concept data with animals, showing that SBG improves the effectiveness of cancer monoclonal antibodies - even to a small degree - SBG represents block-buster potential within cancer treatment!

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Other clinical trials

• Prevention of oral mucositis in cancer patients- A clinical phase II trial completed at the Royal Marsden &

The Institute of Cancer Research in London

- EMEA has granted Orphan drug designation for SBG used in the prevention of oral mucositis

• Burn wounds- A clinical phase I/II trial on patients with burn wounds

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Business model – pharmaceuticals• Retain ownership and strategic flexibility by completing on-going

clinical studies• Partner with international pharmaceutical or biotechnology companies

with capabilities in late stage clinical development, regulatorycompliance, marketing and sales

• Income through up-front licence fees, milestone fees, royalty and salesof SBG to licencees

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Product pipeline

1) Immunotherapeutic and -prophylactic treatmentof influenza

2) New antibiotic principles from marine genes

3) New marine gene products for Life science applications

4) Product formulations preventing and treating gingivitis and periodontitis

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Share information

Number of shares outstanding: 21.489.010Own shares: 832.000 (3.9%)Number of shareholders: 475

Market cap (14.09.06): MNOK 902

20 largest shareholders:Listed on Oslo Børs in November 2005

TICKER: BIOTEC

Share price development since IPO

Paro AS 17.84%Four Seasons Private Equity AS 10.25%Ludwig Mack AS 8.92%Odin Norge 8.77%Hartvig Wennberg AS 4.00%Nordea Bank Denmark AS 3.78%Gunnar Rørstad 3.75%Jan Raa 2.83%NorgesInvestor Proto AS 2.38%Knut Eirik Andersen 2.13%B Skaugen AS 1.78%MP Pensjon 1.63%Anchor Secondary 2 Holding AS 1.12%VPF Avanse Norden 1.09%Arne Handeland 0.94%Holberg Norden Verdi 0.85%Hilde Raa 0.85%DnB NOR Norden (III) 0.69%Cat Invest I 0.69%Violina AS 0.69%