1. Phospholipids Analogs as a New Anti-Inflammatory Anti- Atherosclerosis Therapy Dror Harats The Institute of Lipids and Atherosclerosis Research, Sheba Medical Center, Tel-Hashomer, & Vascular Biogenics LTD, Israel. Dallas TX, November 2005

2. Confidential – November 2005 2 CI-201 Summary Oral Small Molecule Anti-Atherosclerotic Anti-Inflammatory Reduces Progression Of Disease By Up To 92% In Preclinical Trials Additional Proof of Concept In Rheumatoid Arthritis And Multiple Sclerosis Phase I Clinical Trials In 2006

3. Confidential – November 2005 3 Target: Atherosclerosis Meeting the Challenge of a Critical Clinical and Market Need

4. Confidential – November 2005 4 TIME Magazine Cover (March 2004)

5. Confidential – November 2005 5 Atherosclerosis Timeline FoamCellsFattyStreakIntermediateLesion Atheroma FibrousPlaqueComplicatedLesion/Rupture Endothelial Dysfunction Smooth muscle and collagen From first decadeFrom third decadeFrom fourth decade Growth mainly by inflammation and lipid accumulation Thrombosis, inflammation (Adapted from Stary et al. Circulation. 1995;92:1355.)

6. Confidential – November 2005 6 * Ross, R. Atherosclerosis, an inflammatory disease. N. Engl. J. Med. 1999, 340: 115 - 126 Atherosclerosis Pathophysiology Current solution Abnormal Cholesterol metabolism Cholesterol build up Statins Only 30% decrease in events Inflammatory response* Increased plaque vulnerability No current solution Etiology Current Treatments: Only Partial Solution VBL’s Solution CI-201 Option: Combination Therapy

7. Confidential – November 2005 7 Plaque growth Plaque destabilization / vulnerability Plaque Inflammation Smaller & stable plaque Thrombus Inflammatory Cells Few SMCs Activated Macrophages Lesion Size mm 2 x100 P<0.01 CI-201: SM Ox-LDL Derivative to Address Inflammation CI-201 is a small molecule rationally designed to mimic OxLDL epitopes First proof of concept with OxLDL reducing atherosclerosis by ~ 60% OxLDL

8. Confidential – November 2005 8 CI-201 Inhibits Disease Progression Atherosclerotic Plaques (% Base Line) - 92% 6 month old Apo E KO mice; oral administration with CI-201 or PBS for 3 mos Reduction in Plaques with CI-201 Treatment

9. Confidential – November 2005 9 With No Impact on Metabolism Selected metabolic indices with & without CI-201 treatment IL-10 IFN  β actin PBSCI-201 Aorta IL-12

10. Confidential – November 2005 10 Oral administrations 9 day period 2 weeksTime 04 weeks The effect of CI-201 Administration on Serum Soluble Inflammatory Markers ApoE mice were orally administered with CI-201 5 times every other day. Blood was collected before oral administration began (time 0), 2 wks later (after oral administration period) and 4 wks later. Blood collection

11. Confidential – November 2005 11 IL-10 Serum LevelsSAA Levels ControlCI-201 ControlCI-201 P<0.05 (84%-3053%) (100%-22,850%) (100%-132%) (30%-144%) Baseline14 days28 daysBaseline14 days28 days Anti-inflammatory effects of CI-201 % from baseline

12. CI-201 Anti inflammatory Effect Atherosclerosis Mice Model Rheumatoid Arthritis Rat Model Link: Inflammatory/immunologic responses Prototype of autoimmune disease CI 201 Anti inflammatory Effect Confidential – September 2005

13. Similarities Between Atherosclerosis and Rheumatoid Arthritis Rheumatoid arthritis Atherosclerosis ↑↑ Macrophage activation ↑↑ T-cell activation none or ↑ B-cell activation (oxLDL, HSP Abs) ↑↑ CRP ↑↑ Adhesion molecules Collagen II, Cartilage antigens, HSP, Infectious agents HSP, Ox-LDL, Infectious agents Possible antigens Confidential – September 2005

14. Confidential – November 2005 14 Effect of CI-201 on Arthritic Score Adjuvant-induced RA Model Treatment effected 65% reduction in paw swelling Arthritis Score

15. CI-201 Treatment Attenuates Inflammatory Cells Infiltration Within The Joint Lewis Male rats were orally treated with CI-201 before and after adjuvant induced arthritis. Joints were collected on day 24 (arthritis peak) decalcified and stained with H&E. Severe bone destruction (red arrows), new bone formation and destruction of the synovial lining (n=6). No evidence of disease or mild lymphocytic infiltrate (n=6) CI-201Control Confidential – September 2005

16. CI-201 (1,10µg/mouse) Treatment Decreased Clinical Signs of Arthritis Set of 5 oral administrations every day Confidential – September 2005

17. Confidential – November 2005 17 Multiple Sclerosis

18. Confidential – November 2005 18 CI-201: Results Summary CI-201 Atherosclerosis Rheumatoid Arthritis Multiple Sclerosis IL-10 SAA Atherosclerotic Progression 92% Cytokine Marker (Test in Progress) Clinical Improvement Paw Swelling (65%) Reduction of Inflammatory Markers Correlative to Reduction in Inflammatory Conditions Cytokine Marker (Test in Progress) Preliminary very encouraging results

19. Confidential – November 2005 19 Adapted from Witztum et al. Cell 104;503-516, 2001 Atherosclerosis TNF-  Via Immune System Direct Anti- Inflammation (other?)

20. Confidential – November 2005 20 CI-201 Radiolabeling

21. Confidential – November 2005 21 3 H oxPL Analog Uptake by Human monocytes (U937) Total DPM / Well Time (hr)

22. Confidential – November 2005 22 Does oxLDL Compete with oxPL Analog on its Uptake by Monocytes? DPM / Well oxLDL concentrations No pre- incubation 2hr pre- incubation (cells+oxLDL) 2hr pre- incubation (oxPL+oxLDL)

23. Confidential – November 2005 23 Cells Involved in the “Game” Antigen presenting cells (APC) B cells Dendritic cells Macrophages Activated T-cells Primary stimulation-Signal I Secondary costimulation-Signal II

24. Confidential – November 2005 24 3 H oxPL Analog Uptake by Immune Cells DPM / Well

25. Confidential – November 2005 25 CI-201 Anti-Inflammatory Response in Atherosclerosis

26. Confidential – November 2005 26 Observations In all animal models tested hence; atherosclerosis, RA and MS, IFN-  was shown to be involved in disease pathogenesis. Several lines of evidence that CI-201 reduces the level of IFN- 

27. Confidential – November 2005 27 CI-201: Proposed Mechanism of Action I APC Thp IFN-γ Th1 Th2 IL-4 IL-4 IL-10 CI-201 IL-12 IL-27 IL-18

28. Confidential – November 2005 28 CI-201: Proposed Mechanism of Action II APC Thp IFN-γ Th1 Th2 IL-4 IL-10 CI-201 T-bet Stat-4Jak-2 IL-12R IL-12 IL-27 IL-18

29. Confidential – November 2005 29 Hypothesis APC ’ s TNF  CD40 IL10 INf  And ??? T cell Atherosclerosis MS RA Other Inflammatory diseases Inflammation Ox-PL analog - CI-201 x

30. Confidential – November 2005 30 Summary of Results First-in-class anti-atherosclerotic / anti inflammatory drug Proof of concept in additional inflammatory diseases (RA, MS) Oral administration Effective at low doses Potentially synergistic application with Statins Safe – as shown by preliminary safety data Phase I Clinical Trials to begin Q2 2006

31. Confidential – November 2005 31 Thank You!!