Zenith Epigenetics Webcast – February 20, 2014

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Slide One

At this time, I would like to turn the conference over to Mr. Donald McCaffrey, President and Chief Executive Officer.

DM: Welcome ladies and gentlemen, to the inaugural webcast of Zenith Epigenetics.

Slide Two

Today we will review the corporate history; the platform mechanism of action; we will also look at some pharmacology results; and our clinical development timeline; as well as some finance and IP and future development programs.

After the presentation we will have a short Q&A period as well.

Slide Three

So, on slide three, we’re looking at the steps that resulted in Zenith becoming a private company as of June 3, 2013. As you are probably aware, Zenith owns the intellectual property surrounding the epigenetic technology platform. It also owns a royalty stream of future RVX-208 revenues at a level of up to twelve percent.

Slide Four

On slide four, let’s have a quick look at the main development team for Zenith Epigenetics. Many of the names will look familiar to you, as they’ve been involved with the project via Resverlogix for several years now. However, we have a few notable additions to our strategic and tox advisor roles, with the addition of Dr. Lori Kunkel and Dr. Carl Alden; both very experienced drug developers, with strong and very successful track roles behind them.

Slide Five

Now slide five is the start of our mechanism of action section.

Slide Six

And on slide six, we have a quick review of the mechanism of action behind our very exciting platform technology. As we’ve stated before, industry and science leaders such as Dr. James Watson, the co-discoverer of DNA, are firm believers in the BRD4 inhibition technology. So much so that Dr. Watson’s Cancer Discovery article from two years ago was entitled “Curing ‘Incurable’ Cancers”. The cancer that Dr. Watson refers to was Acute Myelocytic Leukemia, or AML, a dangerous and previously incurable cancer.

Slide Seven

Let’s have a look at slide number seven. This is a chart that we will revisit later in the presentation However I’m highlighting it early on, as this is successful data that you will see nowhere else. This is a mouse model of AML. And yes, not only did we regress the tumor, but we showed complete response plus sustained effect in all ten mice. So to reconfirm, these mice were only in the treatment program for twenty one days, and then completely suspended from the drug. This drug is Zen-3365, and it has been chosen as our lead compound moving forward into our hematological cancers program.

Slide Eight

So on slide eight; let’s discuss how we are accomplishing this feat. Dr. Watson is right in his belief that epigenetics is going to result in huge medical breakthroughs. In the core understanding of epigenetics vs. genetics; genetics, or our DNA, is the computer or the hardware, and epigenetics is the software, having the ability to turn on or off various genes. The older understanding of epigenetic mechanisms involved mainly writers and erasers; adding or removing enzymes that subsequently modify histones. These are basically chemical to chemical interactions. Bromodomains however, involve the readers; these are protein to protein interactions that do not modify the genetic code or the DNA, or the histone code, like the writers and erasers do. Readers such as Zen-3365 can and do affect the reading of the genetic histone code.

Slide Nine

So on slide nine we can discuss a secondary benefit of the BET inhibition process: super-enhancers. Now these involve very new breakthroughs in science. It was only published from a Harvard lab less than a year ago, that these clusters are enriched in factors, including BRD4, that normally specify cell identity; but in cancer can cause high level expression of cancer genes. So what does all this mean? Well, when a cancer cell is developing, there are mutations that cause the cancer cells to proliferate, and at the same time inhibit their death. Therefore, if you inhibit the super-enhancers, like Zen-3365 does, you can cut off some cancer growth pathways, such as the c-myc and Bcl-2. Hence in our mouse model, we have not seen any reoccurrence of the AML in over one hundred and thirty days now. This normally would have reoccurred in a very short period of time.

Slide Ten

So slide ten. It highlights just how many different hematological cancers are affected by this one super-enhancer group that we’re highlighting here, the Ig enhancer, linked to numerous different hematological cancers as listed on the right hand column; several different kinds of myelomas and lymphomas.

Slide Eleven

So on slide eleven this is the start of our pharmacology section.

Slide Twelve

On slide twelve, this is a chart that shows clearly that Zen-3365 causes cell apoptosis or death, in AML cells. So Zen-3365 is a hundred-fold more selective to cell death in AML cells than it is in normal lymphoid cells.

Slide Thirteen

Now, back to one of my favorite slides; on thirteen; the tumor regression and sustained response. On the left side you’ll note that the size of the tumor at the beginning of the treatment was about 200 millimeters cubed. Now the right side shows that the drug also worked very well on much larger tumors, this one being 500 millimeters cubed at the commencement of treatment.

Slide Fourteen

Now on slide fourteen, this shows a different type of a study as well as an alternate compound from our own drug platform. This is still an AML model, and the study utilizes Zen-3118. This compound was an earlier version of Zen-3365, and it still performs exceptionally well. The top slide shows you the progression of this cancer in the bone marrow. By day forty-one this cancer has clearly progressed to a life threatening stage. The top right hand slide shows the effects of Cytarabine, one of the lead standard-of-care drugs that are on the market today. It can slow the progression, but not stop the cancer on its own. Now the bottom two slides show Zen-3118 at both 15 and 50 milligrams per kilogram. As you can clearly see in the bottom right hand corner, the tumor has been controlled and regressed. And Zen 3365 is several times more potent than Zen-3118.

Slide Fifteen

Now on slide fifteen, we are looking at human cell results. This study had AML bone marrow cells being exposed to Zen-3365. So patients one through five all had been diagnosed with AML, and they have donated bone marrow samples for this study. The Zen-3365 treated AML cells show strong cell apoptosis or death in all of the patients, except patient number one. The other three drugs being used in this comparison are current standard-of-care drugs; Mitox, Idarubicin, Daunorubicin. And as highlighted in patient number four, we see some very strong cell apoptosis in our treated drug, in Zen-3365, even though this patient is resistant to both Idarubicin and Daunorubicin. So ongoing research and clinical trials will allow us to determine various sensitivities and study various synergisms with other drugs, with other standard-of-care drugs.

Slide Sixteen

On slide sixteen, this shows that we have also successfully studied Zen 3365 in multiple myeloma, with the result showing a complete inhibition of tumor progression. Two well-known oncology genes are shown on the right hand side, depicting that in just three hours they are shut way down or nearly off. Now other oncology genes are also affected. They are not shown here because they have not yet appeared in published literature, but some of these were completely shut off in three hours.

Slide Seventeen

So the next slide, slide seventeen is a chart showing some of Zenith’s advantages over known competitors in the bromodomain space. You know, due to the exciting potential of this space, we assume there will be more companies joining this list in the coming years. However at the present time, we appear to enjoy a lead in most of these selected categories; especially the sheer volume of IP protected, and the ability to demonstrate regression without relapse post cessation of treatment.

Slide Eighteen

Now slide eighteen is the start of the clinical development slides.

Slide Nineteen

So slide nineteen is a timeline listing some of the development targets that we have completed and have in progress. Last year we completed the lead optimization, the PK ADME and the exploratory toxicology work prior to selecting Zen-3365 as our lead candidate last fall. Since that time we have been completing the pre-IND work, executing the IND enabling studies and manufacturing the supply drug. We expect to file the IND mid-year, with the first clinical patients entering trials shortly thereafter.

Slide Twenty

Now on slide twenty, this is a very well designed trial that will allow us to not only show a proof of mechanism in Phase I, but also allow us to provide data on potential expansion indications derived from a general hematological malignancy population; meaning that post the first dose escalation study, we could already have identified four or five various hematological cancer indications for future trials.

Slide Twenty-One

On slide twenty-one, this helps to explain the size of the potential market. On the right hand side you see a Nature Journal chart that describes the sheer complexity of these types of cancers. A hundred years ago, scientists viewed leukemias and lymphomas as one type of cancer. Through the advancement of science and genomics, it’s now known to be ninety different types of cancer with varying mechanisms of action. And on the left side you see that the annual numbers involved and the death rates are very high. In reoccurring versions of some of these cancers, the death rate can be well into the ninety percent region. And that is why a targeted drug such as Zen-3365 will be so important in this particular market.

Slide Twenty-Two

So on slide twenty-two just a brief summary, our therapeutic area will be acute and chronic myeloid and lymphatic leukemia and lymphomas. We will initially focus on the unmet needs in hematological malignancies with BCL-2 and MYC drivers. Patient populations will be further delineated through the dose escalation phase. And the value drivers here are the ability to select patients that will be responders, the lack of approved targeted therapies in these indications, our unique pathways and our clear opportunity to adopt orphan status and request fast track approval.

Slide Twenty-Three

So on slide twenty-three we start the business-oriented section

Slide Twenty-Four

On slide twenty-four we can review the current business model.

Zenith’s current holdings include the entire bromodomain IP platform, the very valuable RVX-208 royalty stream, and now the emerging hematology program. So, future R&D directions are focused on solid tumors and autoimmune programs.

So highlighted in the green box on this slide are some of our go-forward options. Because of our confirmed ability to show rapid development in our hematology program, and our in-depth understanding of our technology platform in general, we are now in a position to form partnering and licensing initiatives with pharmas and/or other biotech companies. Those particular programs would be funded by payments and collaborations from the new partners.

For internal and clinical development programs we will access the private equities market, as we are currently doing. We currently are doing a private placement round at one dollar U.S. per share. And we have already begun receiving subscription agreements, and anticipate a final closing in this project in the coming weeks.

So Item number four on this particular slide is also discussing another serious option that Zenith has been analyzing. We’ve been looking at the possibility of going public, mainly for shareholder liquidity reasons; and at this time it still does not appear to be the proper move. The main reason for that is that the Zenith IPO would include the future IPS, that’s like the autoimmune program and solid tumors, and the future RVX-208 royalties would also be included, and they would likely be valued extremely low. Therefore, the only real value in that IPO would be the very exciting hematology program that we have just described. So the alternative that may still provide shareholders liquidity is to roll out the hematology group as a separate company and file an IPO. This could be done in 2014. And we’ll only proceed if future market conditions and scientific development allow.

Slide Twenty-Five

Now in side twenty five let’s talk about some of our future directions in research and development. One major direction will be further development of the autoimmune program. In the past we have presented early data on both rheumatoid arthritis and multiple sclerosis animal models, and this work will soon be re-commenced as we advance our autoimmune program going forward.

Slide Twenty-Six

On slide number twenty-six, in addition to adding to the autoimmune program, we will continue to advance our medicinal chemistry efforts, and therefore even further expand our IP portfolio. Last year alone in under eleven months we filed six new patents and we will continue to do so throughout 2014.

Slide Twenty-Seven

So on the final slide twenty-seven it’s the program summary highlights. We do have novel therapeutic target for oncology and autoimmune disorders. Clinical studies will be initiating in the second half of 2014 with our new drug Zen-3365. It has outstanding drug properties; very strong in vitro and in vivo data packages; and data supports both single agent or combined therapy, combined with current standard-of-care drugs. So the tox profile is reversible, manageable and on target. Robust chemistry and IP platforms continue. We have in vivo proof of concept in multiple models of autoimmune disorders, and we have significant experience in oncology and epigenetics with existing staff, and we’re doing a fund raising, expanding the programs, and considering a sub-company public spin out in the future.

We do appreciate everybody attending today. And as you can see the science has gone exceptionally well and we’ll be able to translate that into business terms shortly. So please feel free to give me a call if you have any direct questions you want to ask off-line. Thank you very much, and we’ll talk to you later.

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So thank you very much for attending today’s presentation, I look forward to some questions and _ _ ?

We will now begin the question and answer portion of our presentation

Anyone who has a question may press * and 1 at this time.

There are currently no questions. I will turn this back over to Mr. McCaffrey for

….

Thank you very much we’ll talk to you later. ]

Ladies and gentlemen this concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.