Geert Jan Groeneveld, MD, PhD The Reef Biotech Ltd case – What really happened and take home messages Geert Jan Groeneveld, MD, PhD June 7, 2017 Castle Oud Poelgeest, Oegstgeest The Netherlands

Reef Biotech Ltd. was Xenome Ltd. RB3285 was actually Xen-2174

The rise and fall of a biotech company Both CEO & head drug development leave Xenome Two board members (investors) leave Xenome EU patent US patent Japan patent End of Xenome Ltd $ 1.25 m investment $ 1.25 m investment $ 10 m equity finance $ 6.25 m new funding $ 3.75 m new share issue $ 2.5 m new funding $ 6 m new funding $ 5 m new funding Xenome Ltd is founded Xenome is founded Ziconotide lincensed by FDA for US market Ziconotide lincensed by EMA/EC for EU market 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 2011 2012 2013 2009 Pre-clinical studies on Xen2174 (in vitro, rat and dog) Additional dog studies (required by FDA) Phase I trial HV, IT admin. pain tests & EEG Phase I/II trial oncology patients IT admin. 1st Phase II trial bunion surgery IT admin. 2nd Phase II trial bunion surgery IT admin. (n.d.) Phase I trial HV IV admin. The rise and fall of a biotech company Phase I HV IT admin. / EEG FDA/CDER IND approval for Xen2174 FDA puts 1st Phase II on hold

hypothetical concentration in CSF in case of immediate and homogeneous distribution of intrathecally injected dose Cmax (mg/L) AUC (ng*h/ml)   CNS effects in CSF in plasma In vitro rat dog human (0,26 mg/L) EC50h 183nM 0,6 μg/kg i.t. EC50 human NET in vitro (0,30 mg/L) EC50r 214nM 0.08 μg i.t. EC50 rat NET in vitro (2.4 mg/L) 0.64 μg i.t. ED50 for anti-nociception in Brennan model for post-operative pain (3.1 mg/L) 0.84 μg i.t. ED50 for anti-allodynia effect in CCI model for tactile allodynia (3,2 mg/L) IC50r 2,57μM 0.86 μg i.t. IC50 rat NET in vitro (3,6 mg/L) IC50h 2,26μM 7,7 μg/kg i.t. IC50 human NET in vitro (4.7 mg/L) 0.068 mg/L 93.6 10 μg/kg i.t. PK-study 26 mg/L 0.097 mg/L 1 mg/animal i.t. (23.3 mg/L) 0.345 mg/L 516.2 50 μg/kg i.t. (33.7 mg/L) 9.1 μg i.t. anti-allodynia effect plateaued at this level in Chung model for peripheral neuropathic pain (37.0 mg/L) 10 μg i.t. plateau of post-operative nociception in Brennan model (46.7 mg/L) 0.597 mg/L 855.8 100 μg/kg i.t. (76.9 mg/L) 0.12-0.15 mg/kg i.t. no adverse effects observed (NOAEL for single i.t. administration) (84.4 mg/L) 22.8 μg i.t. ED50 for combined anti-nociception and anti-allodynia in CCI model (93.4 mg/L) 1.58 mg/L 2152 200 μg/kg i.t. (133 mg/L) 20 mg/subject safe and well-tolerated in at least 3 subjects (156.3 mg/L) 42.2 μg i.t. anti-allodynia observed for up to 48 hours in CCI model (154 mg/L) 2 mg/animal i.t. seizures in 1 dog (in cohort of n=10) 257 mg/L 0.13 mg/L (200 mg/L) 30 mg/subject safe and well-tolerated in at least 4 subjects (308 mg/L) 4 mg/animal i.t. seizures in 2 dogs (in cohort of n=10) 514 mg/L 0.243 mg/L (333 mg/L) 0.3 mg/kg i.t. (267 mg/L) 40 mg/subject aseptic drug-induced meningitis (1 subject in 6 subjects dosed) seizure (1 subject in 6 subjects dosed) (370 mg/L) 100 μg/day i.t. no effects on rotarod performance (385 mg/L) 5 mg/animal/day i.t. for 14 days seizure in 1 dog (in cohort of n=3) (615 mg/L) dose up to 8 mg/animal i.t. no seizures and no effects on EEG in Beagle dogs 1445 mg/L 0.797 mg/L 8 mg/animal i.t. (741 mg/L) 0.2 mg/animal/day "significant mortality" (769 mg/L) 10 mg/animal/day i.t. for 14 days (1154 mg/L) 15 mg/animal/day i.t. no effects on Functional Observational Battery (1481 mg/L) 400 μg/day i.t. seizures (2230 mg/L) 29 mg/animal i.t. upper motor neuronal deficits and seizures (3076 mg/L) 40 mg/animal i.t. death

Study design Randomized, double-blind, placebo-controlled, serial-cohort, single ascending dose of Xen2174 or placebo PK/PD study, administered intrathecally in HV Pharmacokinetics: CSF PK up to 32 hours (via intrathecal catheter) Plasma PK Pharmacodynamics: Pain threshold and tolerance levels for each of a battery of nociceptive tests Safety 24h EEG Cohort Xen2174 dose Placebo 1 0.50 mg (n=8) n=3 2 1.00 mg (n=8) 3 2.50 mg (n=8) n=2

PainCart; multidimensional pain test battery Electrical Stimulation Olofsen and Dahan, 2005 Arendt-Nielsen et al., 2007 Pneumatic Pressure Polianskis, 2001 Cold Pressor Eckhardt et al. 1998 and Jones et al. 1988 Conditioned Pain Modulation DNIC Electrical pre/post cold pressor Thermal stimulation Medoc TSA-II 30Thermode CHEPS UVB model Capsaicin (chemical allodynia model)

PD results: electrical stair PTT

PD results: cold pressor PTT

PD results: pressure PTT

PD results: Electrical burst PTT

PK results CSF concentration–time profiles of Xen 2174

Safety issues human equivalent doses of Xen-2174

CSF concentrations humans vs dogs

Out-of-pocket costs Xenome Ltd. 1998-2013 Study phase Costs preclinical $ 2,000.000 Discovery and pharmacology GLP preclinical $ 4,500.000 Toxicology and PK clinical $ 10,500.000 $ 975.000 Phase I study in HV: plasma PK and safety Phase I/II study in cancer patients with pain Phase II study in 200 bunionectomy patients Phase I study in HV with EEG recording (no CSF PK!) Phase I PK/PD study in HV; CSF PK and pain tests Total $ 16,975.000

Take home messages Fail early to fail cheap QBCD: which question needs to be answered first? More (quality) information early on leads to better informed decisions MTD is not (that) relevant for non-cytotoxic drugs Allometric scaling leads to estimates that still have to be confirmed