gnta lsa initiation 11-9-10

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LIFESCI ADVISORS Equity Research

November 9, 2010

Initiation of Coverage

We are initiating coverage on Genta Incorporated. Our research describes Genta’s two lead pipeline candidates, tesetaxel and Genasense® that are currently in late phases of clinical development. Both tesetaxel and Genasense have received “Fast Track” and “Orphan Drug” designation by the Food and Drug Administration (FDA). The Company has a single marketed product, Ganite®, approved in the U.S., which Genta is reformulating to improve dosing convenience.

Andrew I. McDonald, Ph.D.(415) [email protected] Van Buren, [email protected] O’Neil, [email protected]

FY Dec FY Dec 2008A 2009A 2010

EPS: Q1 ($0.29)A ($0.64)A ($0.76)A

(GAAP) Q2 ($1004.84)A ($62.56)A $3.66A

Q3 ($289.23)A ($0.15)A NA

FY ($455.09)A ($0.84)A NA

Ticker GNTA.OB

Price $0.05

Market Cap (M) $4

EV (M) $23

Shares Outstanding (M) 86.0

Avg. Daily Vol. 4,145,872

52-week Range: 0.04-22.00

Cash (M) $15.6

Debt (M) $34.7

Annualized Cash Burn (M) $14.4

Years of Cash Left 1.1

Short Interest (M) N/A

Short Interest (% of Float) N/A

Tesetaxel is a novel, orally administered semi-synthetic taxane with reduced neuropathy and high anti-cancer activity. Its oral administration allows for elimination of infusion reactions, which are common with this class of drugs. The drug has been tested in numerous tumor types, and gastric cancer is the lead indication. Tesetaxel has completed 5 Phase II studies and is currently open (or projected to open in 2010) in 5 additional Phase II studies. The new or ongoing studies include gastric (n=27), advanced melanoma (n=27), bladder (n=27) (initiated 9/24/2010), breast (n=25), and prostate (n=~100, projected opening December 2010).

Gastric Cancer Completed Phase IIa Study. A Phase IIa study for tesetaxel in gastric cancer (GC) was completed by Daiichi (TYO: 4568) before Genta’s acquisition of the compound. Here, tesetaxel was evaluated as a second-line therapy in patients who previously failed a front-line fluoropyrimidine (5-FU)-based regimen. The results of this open-label, single-arm, multi-center study, presented at ASCO 2006, suggested that tesetaxel has strong anti-cancer activity with 20% of patients achieving a partial response and almost 60% reaching stable disease.

Anticipating Results for Gastric Phase IIb. On March 31st, 2010, Genta initiated a confirmatory Phase IIb study in second-line gastric cancer. The two-stage design open-label trial will enroll 27 patients with gastric cancer who have progressed after receiving a single regimen of chemotherapy. The primary endpoint for this study will be response rate, with secondary endpoints of durable response rate, duration of response, disease control rate, and safety. Having converted from weight-based dosing (i.e., mg/m2) in the

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Daiichi study, two flat-dose levels are planned, starting with 40 mg once every 3 weeks in the first cohort and 50 mg in the second cohort, with escalation to tolerance in increments of 10 mg/cycle.

Tesetaxel’s Upcoming Phase III Study. A Phase III trial design and clinical protocol has been formulated by Genta for tesetaxel in advanced gastric cancer. This will be a randomized, double-blind, placebo-controlled Phase III trial. Genta plans to submit a proposed Phase III trial design to FDA in the second half of 2010 to secure a Special Protocol Assessment (SPA). In Europe, the Company announced in November 2010 that it had received “Scientific Advice” from European Medicines Agency (EMA).

Genasense’s Phase III AGENDA Trial for Melanoma. Genta’s second Phase III trial for advanced melanoma, entitled AGENDA, was designed to exploit the observation in the previous GM301 Phase III melanoma trial that patients with low to normal serum LDH levels derived superior survival benefit. Genta completed accrual to AGENDA, with 314 low-normal LDH patients enrolled, and initial PFS results (HR = 0.85) were released in October 2009, with an update of pooled GM301/AGENDA results at ASCO 2010.

Statistical Analysis of AGENDA. These early results were disappointing on the progression free survival (PFS) endpoint, and the Company’s stock price suffered. We have performed a detailed review of data and statistics for Genasense, and explained why we are cautiously optimistic that the drug might still hit the overall survival (OS) endpoint despite missing on PFS. Based upon the final GM301 OS results for low serum LDH that most closely matches AGENDA patients, a HR of 0.64 suggests that there are more than enough subjects in the trial to obtain 90% or higher power. For a worst case scenario and using assumptions from the ITT GM301 OS data, we estimate that the AGENDA trial would have 23% power. Genta’s current situation is analogous to the recent Provenge® story with Dendreon in prostate cancer, and Bristol Myer Squib’s ipilimumab in melanoma, both of which also recently hit on OS after missing PFS in advanced prostate and melanoma, respectively.

Given the market pessimism around Genasense and the minimal value assigned to it by investors, we view this asset as a relatively free call option because if AGENDA hits on OS when final data are completed in 1Q 2011, it will confer significant value on Genta.

2Q10 Financials. In the second quarter of 2010, Genta reported net income of $25.4MM, (or a net loss of $15.6MM excluding mark-to-market income of $41.0 MM) compared to a net loss of $43.1MM in 2Q09, (or a net loss of $16.4MM excluding mark-to-market expense of $26.7MM). Total operating expenses for the quarter were $4.25MM, including $2.42 in R&D expenses. On March 10th, 2010 Genta raised $25MM in gross proceeds through a private placement of convertible notes. This financing should provide ample support for a year plus of expanded operations, which includes tesetaxel’s Phase II studies and the final OS survival results from the AGENDA study.

2009 Financials. For the year ended December 31st, 2009, the net loss was $86.3MM, (or a net loss of $59.6MM excluding mark-to-market expense of $26.7MM) compared to a net loss of $505.8MM the year prior (or $43.8MM excluding mark-to-market expense of $462.0MM). At the end of the year Genta had cash and cash equivalents totaling $1.2MM. Net cash used in operating activities for the year was $21.5MM, which represents an average monthly outflow of $1.8MM.

Recent Financing Activity/Outlook. At June 30th, 2010, Genta had cash and cash equivalents totaling $15.6MM. Net cash used in operating activities for the prior 6 months was $6.3MM and

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Genta expects that the average net monthly cash outflow will be approximately $1.2MM for the remainder of 2010. Genta had approximately 86.0MM outstanding shares of common stock as of October 22h, 2010. Genta’s convertible debt and financial instruments currently convert to approximately 1.4 billion shares. Note that there is a conversion price reset on the instruments scheduled for December 2010.

Expected Upcoming Milestones

Genasense Milestones• H1 2011: AGENDA Trial- Overall Survival (OS) Follow Up

Tesetaxel Milestones√ H2 2010: Initiated Phase 2b Confirmatory Breast Cancer Study• H2 2010: Initiate Phase 2a Prostate Cancer Study• H2 2010: Submit Special Protocol Assessment to the FDA (2nd Line Gastric)• H1 2011: Initiate Phase 2b Gastric Cancer Study as 1st Line Treatment• H1 2011: Initiate Phase 3 Gastric Cancer Study (2nd Line)

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Table of Contents

Key Points of Discussion………………………………………………………….. 1

Expected Upcoming Milestones………………………………………………….. 3

Company Description……………………………………………………………... 5

Tesetaxel: A Novel Oral Taxane…………………………………………………... 5

Commonly Used Therapies in the Taxane Drug Class……………………………… 6

Clinical Development of Tesetaxel……………………………………………….. 11

Gastric Cancer………………………………………………………………….. 12

Tesetaxel in Advanced Melanoma………………………………………………… 17

Tesetaxel in Bladder Cancer……………………………………………………… 18

Advanced Castrate-Resistant Prostate Cancer……………………………………… 18

Advanced Breast Cancer…………………………………………………………. 19

Pharmacokinetic and Combination Studies of Tesetaxel……………………………. 21

Target Disease Epidemiology…………………………………………………….. 22

Taxane Drugs Market……………………………………………………………... 23

Tesetaxel Competitive Landscape………………………………………………... 25

Genasense: an Enhancer of Programmed Cell Death…………………………... 27

Advanced Melanoma Disease Background……………………………………… 31

Melanoma Epidemiology…………………………………………………………. 34

Melanoma Market Information…………………………………………………… 35

Genasense Pre-Clinical Data……………………………………………………… 36

Clinical Data Discussion: Genasense in Advanced Melanoma…………………. 36GM301 Phase III Trial: Genasense plus Dacarbazine in Patients with Advanced Melanoma………………………………………………………………………… 36

AGENDA: A Second Phase III Trial in Advanced Melanoma for Genasense…………..... 42

Discussing the Potential of Success for AGENDA……………………………………. 44

Other New Drugs in Development for the Treatment of Advanced Melanoma………….. 47

Melanoma Drugs Competitive Landscape……………………………………….. 50

Gallium Compounds: Potent, Bone-Strengthening Drugs……………………… 51

Genta’s Oral Formulation of Gallium…………………………………………….. 55Intellectual Property & Licensing………………………………………………… 56

Financial Discussion………………………………………………………………. 58

Management Team……………………………………………………………….... 59

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Company Description

Genta, incorporated in Delaware in February 1988, is a biopharmaceutical company dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. Genta’s research portfolio consists of two major programs: DNA/RNA Medicines, which includes the oncology drug, Genasense, and Small Molecules, which includes tesetaxel and gallium-based compounds (including Ganite®).

Genta’s DNA/RNA Medicines program includes drugs that are based on using modifications of either DNA or RNA as drugs that can be used to treat disease. These technologies include antisense, decoys, and small interfering or micro RNAs. Their lead drug from this program is an investigational antisense compound known as Genasense (oblimersen sodium injection). Genasense is designed to disrupt a specific mRNA, which prevents the production of a protein known as Bcl-2. Current science suggests that Bcl-2 is a fundamental (although not sole) cause of the inherent resistance of cancer cells to anticancer treatments, such as chemotherapy, radiation, and monoclonal antibodies.

While Genasense has displayed some anticancer activity when used alone, Genta is developing the drug primarily as a means of amplifying the cytotoxic effects of other anticancer treatments. Genta is developing tesetaxel as an oral taxane, a drug that targets tubulin in cancer cells, an extremely well-validated cancer target.

Most recently, Genta’s principal goal has been to secure regulatory approval for the marketing of Genasense, which has been studied in combination with a wide variety of anticancer drugs in a number of different cancer indications. Genta has reported results from trials of Genasense in a number of diseases, including melanoma; chronic lymphocytic leukemia (CLL); and non-Hodgkin’s lymphoma (NHL).

Genta’s key strategies in this regard are:• Build on their core competitive strength of oncology development expertise to establish a leadership position in

providing biopharmaceutical products for the treatment of cancer;• Expand their pipeline of products in two therapeutic categories, DNA/RNA Medicines and Small

Molecules, through internal development, licensing and acquisitions;• Establish their lead antisense compound, Genasense®, as the preferred chemosensitizing drug for use in

combination with other cancer therapies in melanoma and other cancers; and• Establish a sales and marketing presence in the U.S. oncology market.

Tesetaxel: A Novel Oral Taxane

Tesetaxel (chemical structure shown in Figure 1) is a novel, oral, semi-synthetic taxane that is the leading taxane currently undergoing clinical development. Daiichi originally discovered the compound, and Genta entered into an exclusive worldwide licensing agreement with them on March 7th, 2008 for the development and commercialization of tesetaxel (formerly known as DJ-927, contract terms described below). Unlike other taxanes, tesetaxel is administered orally, and has the potential to be the first-to-market oral taxane. Compared to other taxanes, the key features of tesetaxel are that it:

• Maintains a high-level of anti-cancer activity • Eliminates infusion/hypersensitivity reactions• Reduces neuropathy

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• Lacks cross-resistance with standard taxanes• Increases patient convenience

Figure 1: Tesetaxel Chemical Compound

Source: Pubchem

COMMONLY USED THERAPIES IN THE TAXANE-DRUG CLASS

In the important class of anti-neoplastic drugs known as taxanes, there are four FDA-approved therapies: docetaxel (Taxotere); paclitaxel (Taxol); Abraxane, a nanoparticle formulation of paclitaxel recently developed by Abraxis Biosciences; and the recently approved cabazitaxel (Jevtana) from Sanofi-Aventis. These agents have proven activity in ovarian, lung, breast, prostate, bladder, head and neck cancers. Taxanes are the first class of drugs with activity against microtubules since vinca akaloids were introduced over 20 years earlier1. The taxanes are a cornerstone in the treatment of epithelial malignancies with current taxanes having broad applications in a wide range of tumor types.

Paclitaxel and Docetaxel. Paclitaxel, which was the first taxane brought to market by BMS under the brand name Taxol, experienced great success and widespread use due its strong efficacy. As a natural product, there were some early challenges around supply because the drug was derived from the bark of a rare tree, the pacific yew. During that period of difficult supply, attempts to find alternatives led to the discovery of docetaxel, an analog derived from the more common European yew.

While both paclitaxel and docetaxel have strong efficacy in multiple tumors, they also share common limitations. There are three main challenges associated with these taxanes:

1) Dose limitation (mainly due to peripheral neuropathy)2) Infusion reactions related to acute hypersensitivity (can be severe, even fatal)3) Development of (or inherent) drug resistance (via overexpression of P-gp)

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1 Journal of the National Cancer Institute, Vol. 91, No. 24, 2077-2078, December 15, 1999

Paclitaxel has been generic since 2002, and docetaxel could face generic competition as soon as this year, based on a recent court decision invalidating some formulation patents that Sanofi had been relying on to extend patent protection beyond the 2010 expiration of their composition of matter patents.

Abraxis BioSciences (NasdaqGS: ABII): Abraxane. The search for next generation taxanes was focused on attempts to overcome one or more of these limitations. The first to market of these is simply a re-formulation of paclitaxel from Abraxis Biosciences called Abraxane. The Abraxane formulation combines paclitaxel with albumin using a nanoparticle approach that eliminates the need for solvents in the administration process. The improved formulation of Abraxane allows for the delivery of a 49% higher dose compared to solvent-based paclitaxel, and there is some evidence that it has better efficacy in metastatic breast cancer, the initial indication for which is was approved. In addition, Abraxane demonstrates a lower rate of infusion/hypersensitivity reactions than traditional paclitaxel formulations. While Abraxane has certain advantages over the original formulations of paclitaxel, the drug causes substantial neuropathy and is cross-resistant with paclitaxel; thus, there is still plenty of room for improvement of the taxanes. Sales of Abraxane have been somewhat modest to date, likely due both the narrow indication and to the difficulty of competing against generic paclitaxel, with $82.1MM reported in 2Q’10. Nonetheless, the Abraxane launch that achieved > $350MM in annual sales by its fourth year provides strong market validation for a reformulated standard taxane that simply reduces acute side effects.

The data announced at ASCO 2010 for Abraxane in first line non-small cell lung cancer and in first line pancreatic cancer were compelling. If additional studies in other tumor types reinforce the improved efficacy observed in metastatic breast cancer for Abraxane over traditional paclitaxel formulations, we see significant future growth for Abraxane. Suitor Celgene apparently agrees, based on the June 2010 announcement that Celgene will acquire Abraxis, whose main asset is Abraxane, for $2.9 Billion.

Sanofi-Aventis (NYSE: SNY): cabazitaxel (Jevtana). The most recent competitor is from Sanofi, with their new taxane, cabazitaxel (Jevtana). Cabazitaxel is a novel intravenous taxane that was approved by FDA in June 2010 for use in combination with prednisone in prostate cancer patients who have become resistant to docetaxel. Patients in the cabazitaxel arm lived for about 15.1 months vs. 12.7 months for the control arm (mitoxantrone and prednisone), though the cabazitaxel arm showed a higher rate of neutropenia (7.5% vs. 1.3%). The drug showed a very low rate of grade 3/4 neuropathy at 0.5%, although as a parenteral compound it causes hypersensitivity and thus requires steroid and antihistamine premedication. Approval of the drug, which had priority status, took place just eleven weeks after Sanofi completed submission of the rolling NDA. Consensus sales estimates for the drug are in the range of $295 million by 2014.

Competitive Positioning of Tesetaxel. An oral formulation would have a major convenience factor for both physicians and patients, by reducing office visits, particularly given recent studies showing improved efficacy for taxane dosing schedules that require weekly IV administration vs. the original standard dosing regimen of every three weeks. The potential to eliminate weekly office visits would confer a financial advantage for payers, and a likely increase in adherence, in addition to being more convenient for both patients and physicians.

The scientists who originally made tesetaxel were searching for a taxane derivative with an oral formulation in mind, and specifically looked for compounds that are poor substrates for P-gp, the drug efflux transporter in animal cells. This approach conferred a dual benefit, in that P-gp

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expressed in the gut is largely responsible for blocking absorption of orally administered taxanes, and expression of P-gp overexpression on tumor cells is a key mechanism by which tumors develop resistance to taxanes. By searching for taxane analogs that are poor P-gp substrates, scientists hoped to bring patients a new drug with an oral dosing regimen that also has activity in tumors with acquired resistance to other taxanes. Preclinical and early clinical data both confirm that tesetaxel shows promising activity in taxane resistant tumors, a significant segment of the market.

Another key advantage of tesetaxel is reduced peripheral neuropathy compared to the other taxanes. Neuropathy is the dose-limiting toxicity for many patients taking traditional taxanes, and they must reduce dose or terminate therapy because of it.

Mechanism of Action. Tesetaxel’s mechanism of action (MoA), as with all taxanes, is to hyperstabilize cytoskeletal structures known as microtubules,2 whose primary cellular function is formation of the mitotic spindle during cell division. Microtubules are also critical during interphase for cell motility, intracellular transport, etc. Microtubule stabilization occurs as tesetaxel binds to the beta-tubulin subunit in assembled microtubules and locks them in place by preventing depolymerization. This effect induces potent cytotoxicity in many common tumor cells types. The target protein of tesetaxel, tubulin, is a highly validated target for treatment of cancer.

Tesetaxel inhibits tubulin depolymerization, which interrupts mitosis, and tumor cells become arrested at G2/M. The cytotoxic activity of tesetaxel against various tumor cell types is 3-fold greater than docetaxel and 10-fold greater than paclitaxel. Of particular interest was the observation that tesetaxel exhibited much greater relative cytotoxicity compared to other taxanes in cell lines that are multidrug-resistant due to constitutive over-expression of P-glycoprotein (P-gp). Figure 2 below shows that the anti-tumor activity of tesetaxel was greater than both paclitaxel and docetaxel against P-gp expressing cells. For reference, an IC50 value is the half maximal inhibitory concentration, or the effectiveness of a compound in inhibiting biological or biochemical function.

Figure 2: IC50 of Tesetaxel, Paclitaxel, & Docetaxel in Tumor Cell Lines

Cell LinesIC50 (ng/mL)IC50 (ng/mL)IC50 (ng/mL)

Cell LinesTesetaxel Paclitaxel Docetaxel

All Tumor Cell Lines (n=23) 0.544 5.58 1.73P-gp Negative Cell Lines (n=17) 0.455 1.79 0.774P-gp Positive Cell Lines (n=6) 0.78 15.7 4

Source: Adapted from Cancer Sci 94(5): 459-466 (2003)

Oral Delivery Improves Convenience and Eliminates Safety Issues Associated with Infusions. FDA has approved Taxanes for numerous tumor types, including: breast, lung, gastric, ovarian, and prostate cancers. All currently approved taxanes are delivered by intravenous (IV) infusion and require close medical supervision and premedication regimens due to the risk of anaphylaxis and severe hypersensitivity reactions, which occur in 2-4% of patients and are sometimes fatal, even in pre-medicated patients. As an orally delivered drug, tesetaxel does not have these liabilities, and also confers a convenience advantage.

Other serious adverse reactions associated with taxanes include long-lasting damage to peripheral nerves, or neuropathy. However, pre-clinical studies with tesetaxel have shown that it has the ability

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2 Biol. Pharm. Bull. 27(3) 345—351 (2004)

to reduce nerve damage in treated patients. This will allow patients to extend the broad anticancer therapy of traditional taxanes, for longer periods of time, without having to limit dosing due to neuropathy concerns.

Pre-clinical Data. As discussed previously, cancer cells typically become resistant to taxanes by the mechanism known as multi-drug resistance (MDR), which is mediated by P-gp. Pre-clinical studies confirm that cancer cells do not become resistant to tesetaxel by this mechanism, because of tesetaxel’s low affinity for P-gp. In P-gp positive lung cancer cells, intracellular tesetaxel levels appear to be five times greater than commonly prescribed taxane, paclitaxel3. There is a good chance that this mechanism will extrapolate well in the clinic, in which case tesetaxel could treat patients who have previously become resistant to other conventional taxanes, such as paclitaxel or docetaxel.

Experiments involving tesetaxel in nude mice with various human solid tumor xenografts (DU4475, Breast Cancer) were conducted. Orally-administered tesetaxel showed potent anti-tumor activity and its effects appear to be far superior to intravenously administered paclitaxel and docetaxel in P-gp over-expressing tumors. Specifically, tesetaxel-resistant sub-lines produced few single clones and the overall rate of clonal growth was much lower when compared to paclitaxel and docetaxel.

Another preclinical study was conducted to compare activity of the three taxanes in a taxane-resistant cell line. Results described by Figure 3 indicate that paclitaxel and docetaxel were less effective in treating paclitaxel-resistant clones NCI-H460 (human non-small cell lung cancer cells)/PTX13 (resistance ratios: >20). On the other hand, when these clones were treated with tesetaxel there was potent cytotoxicity activity demonstrated against the parent cell line NCI-H460 and the taxane resistant derivative PTX13 cells (resistance ratio: 1.85). As shown in the figure below, mice inoculated with NCI-H460/PTX13 clone tumors experienced significant anti-tumor activity from tesetaxel (inhibition rate [IR] = 74.9%) at the maximum tolerated dose (MTD). Neither docetaxel nor paclitaxel exhibited anti-tumor effects at their relative MTDs. We believe this in vivo data speaks strongly to tesetaxel as not just another taxane, but a differentiated, taxane that has potential to treat patients previously resistant to other taxanes.

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3 Cancer Sci | May 2003 | Vol. 94 | no. 5 | 461

Figure 3: Changes in Resistance Ratio of Taxane-Resistant NCI-H460 Cells

Source: Company Reports

Another big factor in tesetaxel’s success will be its ability to reduce neuropathy relative to other taxanes in treated patients. Peripheral neuropathy causes pain and numbness in fingers and toes, and it can also permanently impair position sense and walking. Peripheral neuropathy is one of the most common reasons why patients discontinue treatment with taxanes, even in cases when they achieve a significant anti-cancer benefit. One of the key pre-clinical observations for tesetaxel is its relative lack of injury to nerve cells. Figure 4 shows the tesetaxel has significantly reduced neuropathy relative to docetaxel. In these pictures, the tesetaxel image looks markedly similar to control, where docetaxel treated samples have a large amount of myelin debris, vacuolation, and foamy macrophages in the tissue, indicative of damage due to neuropathy.

Figure 4: Pathological Changes in Sciatic Nerve after Equi-Myletoxic Doses of Tesetaxel and Docetaxel (Day 15)


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Clinical Development of Tesetaxel

Phase I and II Studies in Multiple Tumor Types. There have been a number of Phase I and II studies (Figure 5) for tesetaxel, in a total of over 300 patients. Priority indications indentified by Genta for tesetaxel are: gastric, bladder, breast, and prostate cancers.

Based on this early clinical experience, it is clear that tesetaxel has reduced neuropathy and a complete absence of hypersensitivity compared to the standard taxanes, which we believe will be significant competitive advantages, since neuropathy is a common reason that patients reduce or discontinue dosing with the standard taxanes, even in cases where efficacy is good. The most common side effect is neutropenia.

Figure 5: Summary of Tesetaxel Clinical Studies and Total Patients EnrolledDisease Type of Study Number of Patients

Solid Tumors: US Phase I 48Solid Tumors: Japan Phase I 6Solid Tumors: US Phase I with Capecitabine 27

Solid Tumors: US (Genta) Phase I 31+ (ongoing)Gastro-esophageal: EU Phase IIa 35

Colorectal: US Phase II 71Breast: EU Phase II 34

Non-Small Cell Lung: EU Phase II 34Gastro-esophageal: US Phase IIb Ongoing

Melanoma: US Phase II OngoingBladder US & EU Phase II Ongoing

Breast US Phase IIb OngoingSource: Company Reports

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Current Tesetaxel Studies. Figure 6 summarizes the current status of tesetaxel studies in the various tumor types with the exception of the recent initiation of the Phase II study of tesetaxel in advanced bladder cancer in Q3 2010.

Figure 6: Current Status of Tesetaxel Clinical Studies


GASTRIC CANCER

Gastric Cancer Disease Background. Gastric cancer, also known as stomach cancer (Figure 8), can occur in any part of the stomach and can metastasize to other organs such as the esophagus, lungs, lymph nodes, and the liver. According the NCI, It is estimated that 21,000 cases (12,730 men and 8,270 women) of stomach cancer will be diagnosed in the US in 2010. Worldwide, there are many more cases because the incidence rates of stomach cancer are much higher in Asia and in Europe. Figure 7 shows incidence rates worldwide in various geographies. Globocan 2008 estimates that there are 275,000 cases diagnosed each year in the more developed countries of the world.

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Figure 7: Estimated Age-Standardized Rates per 100,000 for Gastric Cancer

Source: Globocan 2008

Stomach cancer is often asymptomatic at early stages, but as it progresses to later stages abdominal pain, diarrhea and constipation, nauseas and vomiting, weight loss, and bleeding may occur. This simple fact often contributes to a poor prognosis when the cancer is finally diagnosed. Some argue that diet has a great impact on one’s chances of developing gastric cancer, but an infection caused by the bacteria H. pylori is a key risk factor in 65%-80% of gastric cancers. Approximately 10% of cases of stomach cancer show a genetic component, and factors such as tobacco use increase risk of developing gastric cancer as well.

The typical age at onset is in the fifth decade, and the disease is more common in men than women (1.7:1) and in African Americans than whites (1.8:1). Several precursor conditions, notably Barrett’s esophagus, markedly increase risk. The incidence of gastric cancer is higher in Asia, and in Japan,

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routine screening by upper endoscopy is recommended beginning at age 50 in Japan. Early stage disease is typically asymptomatic, so screening is important in high risk populations.

Figure 8: Stomach Cancer Diagram

Source: MedicineNet

Gastric cancer is typically diagnosed by a gastroscopic exam, upper gastro-intestinal series, or CT scan of the abdomen. Gastric cancer can be classified by the TNM Staging System or by the most common method of staging that include stages 0-IV. If caught early, gastric cancer can be approached surgically, however as it progresses to the later stages, spreading by direct extension to the liver and lung, and eventually metastasizing, surgery is not an option.

Gastric Cancer Treatment. Approximately 20% of patients, generally those with early stage localized disease, can be fully cured following initial surgery. Patients with regional disease generally undergo surgery followed by adjuvant therapy, but most of them ultimately relapse. Patients with advanced distant and metastatic disease are not candidates for surgery.

A large number of agents have been shown to have some activity in gastric cancer, but there is no clear consensus for standard of care in advanced gastric cancer and typical treatments vary regionally. In the US following surgery, adjuvant chemoradiotherapy, typically a 5-FU based regimen, is generally used. In Europe, newer combination therapies without radiation, notably epirubicin, cisplatin and 5-FU (ECF) are gaining in popularity. However, none of these regimens have compelling efficacy and several sets of guidelines recommend enrollment in clinical trials as the best option for advanced patients.

As of May 22nd, 2007 the National Comprehensive Cancer Network (NCCN)4 panel added oral fluoropyrimidine, capecitabine (Xeloda, Roche) as an option for treatment of esophageal and gastric cancer. This was in response to favorable Phase III trials (ML 17032 and REAL 2). The REAL 2 study was the largest phase III study ever conducted in advanced esophageal and gastric cancer and found that capecitabine may replace 5-FU. Also, the study found that oxaliplatin may replace

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4 NCCN Updates Esophageal and Gastric Cancer Guidelines

cisplatin in triplet regimens used for the treatment of advanced esophageal and gastric cancer. Lastly, based upon positive results from the Medical Research Council Adjuvant Gastric Infusional Chemotherapy (MAGIC) trial, the ECF regimen (epirubicin/cisplatin/5-FU) has been added for pre- and post-operative chemotherapy for surgically treatable and potentially curable gastric cancers. The MAGIC trial showed that patients with gastric cancer had a better 5-year survival rate, decreased tumor size and significantly improved PFS and OS when ECF was used perioperatively.

Tesetaxel in Gastric Cancer: Fast Track and Orphan Drug Designations. In April 2010, the U.S. FDA granted Genta “Fast Track” designation for tesetaxel to treat patients with advanced gastric cancer. This designation will expedite the process for regulatory review of tesetaxel. Also, Genta will be allowed to submit a NDA to the FDA on a rolling basis with ongoing review during the submission process and may also be granted priority review.

In January 2009, the company received Orphan Drug Designation by the FDA for tesetaxel in advanced gastric cancer. Orphan drug status provides a period or marketing exclusivity, certain tax benefits, and an exemption from certain fees upon submission of an NDA. Orphan Drug designation was also granted by EMA in October 2010, which provides similar benefits, as well as 10 years of marketing exclusivity from launch.

Gastric Cancer Phase IIa Study with Tesetaxel. An initial Phase IIa study has been completed for tesetaxel in gastric cancer (GC) as a second-line therapy in patients who had failed a front-line fluoropyrimidine (5-FU)-based regimen.

This study was an open-label, single-arm, multi-center study where tesetaxel was administered orally at doses ranging from 27 mg/m2 to 35 mg/m2 once every 3 weeks. Eligible patients had confirmed advanced GC and with no more than 1 prior systemic 5-FU-containing regimen for advanced disease, and had adequate hematologic, renal and liver functions. All patients had received extensive prior treatment, having failed a combination regimen that included cisplatin plus 5-fluorouracil or Xeloda, and all but 2 patients had received a third chemotherapy drug with this regimen. Pharmacokinetic sampling was performed.

Thirty-six patients were enrolled for this study, though one patient withdrew before receiving drug, so 35 was the figure used in the ITT analysis. An accumulated 104 courses of treatment with tesetaxel were administered, with the median number of courses being 2, but ranging from 1 to 9. Response data are summarized below (Figure 9), with 20% of patients achieving partial response with tesetaxel treatment, while 40% of GC patients had stable disease during the course of the trial, for an overall disease control rate of 60%.

Figure 9: Patient Response Data for Tesetaxel in Phase IIa GC StudyPatient Category Patients % of Patients

Partial Response (PR) 7 20%Stable Disease (SD) 14 40%

Disease Control (DC) 21 60%TOTAL PATIENTS 35


Neutropenia was the dose-limiting adverse event, as expected. Two DLTs (febrile neutropenia; Grade 4 neutropenia > 5 days) occurred at 35 mg/m2 and the optimal starting dose was confirmed

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at 27 mg/m2. Six out of 36 patients were not evaluable for response (<1 complete treatment course) because of the following: 3 patients due to early disease progression, 2 patients due to toxicity, and 1 of the patients did not receive drug. Five patients died on study from differing causes that included intestinal perforation, pneumonia, hepatic failure, hemorrhagic shock, and rapid disease progression. Toxicity (> grade 3) events that were observed in evaluable patients (n = 33) are included in Figure 10.

Figure 10: Percent of Patients Experiencing Grade 3-4 Adverse Events for Phase IIa Tesetaxel GC Study

Adverse Event % of Patients

Neutropenia 37%Anemia 17%

Thrombocytopenia 17%Diarrhea 26%Fatigue 11%

Neutropenic Sepsis 14%Source: Journal of Clinical Oncology, 2006 ASCO Annual Meeting Proceedings Part I. Vol 24, No. 18S (June

20 Supplement), 2006: 4081; Company Reports

The conclusion made from this study was that tesetaxel had modest activity in patients with GC who have previously failed 5-FU non-taxane based regimens. Toxicity events were manageable at the MTD.

Confirmatory Phase IIb Tesetaxel Second Line GC Study Initiated. In March, 2010, Genta initiated a confirmatory Phase IIb study in second-line advanced gastric cancer. This trial reflects a strategy that a regulatory filing for tesetaxel as treatment for 2nd line gastric cancer will comprise two Phase II studies and one Phase III study. Thus, the objective of the current Phase IIb study is to reconfirm the safety and activity of tesetaxel as a single agent administered at a flat dose.

The two-stage design open-label trial will enroll patients with gastric cancer who have progressed after receiving a single regimen of chemotherapy. Genta defines the first-line regimen as one comprising a platinum-containing compound (cisplatin, carboplatin, oxaliplatin) and a fluoropyrimidine (5-fluorouracil, capecitabine, or S-1). The primary endpoint for this study will be response rate, with secondary endpoints of durable response rate, duration of response, disease control rate, and safety. The dose for this new trial is based upon Genta’s recently completed dose-ranging and PK study, with dose adjustments for patients that are +/- 25% of their ideal body weight. An initial cohort will complete treatment at a starting flat dose of 40 mg administered once every 3 weeks. A second cohort will be initiated at a starting dose of 50 mg with escalation every 3 weeks in increments of 10 mg to tolerance, with neutropenia expected to be the dose limiting toxicity.

The study is targeting an enrollment of approximately 27 patients. Initial data are expected in 1H’11.

Planned Phase III Trial for Tesetaxel in Second-Line GC. Genta has announced that its lead indication for registration will be 2nd-line gastric cancer. The Company has proposed a pivotal Phase III trial in patients that have failed a single platinum/FP regimen. The study will be randomized, double-blind, placebo-controlled, and involve combination dosing with an active agent (see Figure 11).

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Figure 11: Phase III Study Design for Tesetaxel in Gastric Cancer


Genta has previously completed a dose-ranging pharmacokinetic study of tesetaxel plus capecitabine (Xeloda, Hoffman LaRoche, Inc.), which demonstrated that full doses of each of these orally administered drugs can be dosed together. Genta plans to submit a proposed Phase III trial design to FDA to secure a Special Protocol Assessment (SPA). In November 2010, the company announced that it had received requested Scientific Advice in Europe from EMA. We anticipate that Genta will announce finalized details of the study design once regulatory feedback is received.. Given the prior work, we expect the study design will include capecitabine in both arms.

Planned Studies for Tesetaxel in First-Line Gastric Cancer. The company has also announced plans to initiate a run-in Phase IIb study in first-line gastric cancer to confirm activity of the new dosing schedule. Analogous to the Phase III second-line study, the first-line study will also be done in combination as shown in Figure 11 above. The company has announced that a Phase III first-line study analogous to the second-line study will follow the Phase IIb run-in.

TESETAXEL IN ADVANCED MELANOMA

Advanced Melanoma Disease Background. Melanoma is a malignant tumor of melanocytes as discussed in more detail in the Genasense section of this report. Early stage tumors can be surgically removed. Later stage melanoma requires adjuvant treatment following surgery, usually in the form of immunotherapy or chemotherapy. In the U.S. most patients will begin up to a year of high-dose interferon (IFN) treatment. Interleukin-2 (IL-2) is also a common biologic treatment option employed. For the most advanced and metastatic patients, outcomes are quite poor. The most commonly prescribed chemotherapy agent, despite its limited efficacy, is the generic dacarbazine (DTIC).

On a hopeful note, there has recently been a significant amount of activity in the space including Genta’s lead-drug candidate Genasense, Bristol Myers Squibb’s ipilimumab, and the Roche/Plexxikon B-RAF inhibitor. Given the activity previously observed with other taxanes in this tumor type, we feel it could be promising. There has been increased use of taxanes for advanced melanoma; however, no drugs in this class are currently approved for this indication. Tesetaxel may have the ability to improve a melanoma patient’s usually poor prognosis and potentially extend their chance of survival.

Tesetaxel Phase II Study in Advanced Melanoma. Genta is currently conducting a Phase II trial for patients with advanced melanoma that have progressed after one chemotherapy regimen. In

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February 2010, Genta announced that they had initiated treatment of the first subject in this Phase II study. Patients enrolled will have a normal serum lactate dehydrogenase (LDH) – a biomarker which, when elevated, is associated with extremely poor outcomes in advanced melanoma.

The primary endpoint for the study is response rate; secondary endpoints include durable response rate, duration of response, disease control rate, and safety. Enrollment is targeted at 27 patients; we expect initial data should be available by ASCO in June 2011.

Tesetaxel has received Orphan Drug Designation in the U.S. by the FDA for advanced melanoma.

TESETAXEL IN BLADDER CANCER

Bladder Cancer Disease Background. Bladder cancer is the fourth most common cancer in the US, and it is three times more common in men than in women. Patients who present early are generally treated surgically via cystoscopy, followed by adjuvant therapy that can include radiation or chemotherapy. Unfortunately, nearly half of patients undergoing cystoscopy relapse and present with metastatic disease. For these patients, and patients who present initially with metastatic disease, chemotherapy is the only option.

Numerous drugs have been shown to have some activity in metastatic bladder cancer. A recent head-to-head study of cisplatin and gemcitabine against an older combination showed superiority, so the cisplatin and gemcitabine combination is now recommended as first line therapy in these patients. However, cisplatin is not well-tolerated in patients with renal dysfunction, who represent a significant fraction of bladder cancer patients, so other options are required.

In addition to the preliminary activity observed by Genta for tesetaxel in this tumor type, there is also evidence for other taxanes that the addition of a taxane to cisplatin and/or gemcitabine enhances activity. Hence, we believe metastatic bladder cancer has both a compelling suggestion of sensitivity to taxanes, and a clear unmet medical need for additional therapies.

Phase II Tesetaxel Study in Bladder Cancer. In September 2010, Genta announced initiation of a Phase II study for tesetaxel in bladder cancer. The study will have sites in both the US and Europe, and will enroll patients who have failed first line therapy, typically the gemcitabine/cisplatin combination. The primary endpoint is overall response rate. Secondary endpoints include durable response, disease control, progression-free survival, and safety.

ADVANCED CASTRATE-RESISTANT PROSTATE CANCER

Prostate Cancer Disease Background. Prostate cancer is often asymptomatic or causes symptoms similarly to benign prostatic hyperplasia (BPH), including frequent urination, painful urination, and blood in the urine. It is typically detected by an elevated prostate-specific antigen (PSA) from a routine blood test, however PSA levels can also be elevated by other illnesses, so there is a significant rate of false positives. Screening can also be done by a digital rectal exam or a biopsy, which is required to confirm diagnosis. Biopsies are evaluated using the Gleason Scale Grading System and the tumor is typically staged using the TNM Staging System by the American Joint Committee on Cancer (AJCC).

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The majority of prostate tumors are slow-growing, and outcomes can be good in many cases. However there are cases of aggressive prostate cancers5 Treatment for prostate cancer varies according to stage, and includes surgery or radical prostatectomy, radiation therapy, high-intensity focused ultrasound (HIFU), cryosurgery, hormonal therapy, or chemotherapy.

Advanced castrate-resistant prostate cancers (CRPC) normally resume growth after 1-3 years, despite hormone therapy. Docetaxel has been used for this indication with a median survival of 2-3 months6. Provenge, an autologous cellular immunotherapy from Dendreon, was recently approved in the US, and has shown to be effective for treatment of prostate cancers7. The high price ($93,000 per year) and technical complexities of Provenge may limit its use. Also, a combination of bevacizumab (Avastin), docetaxel, thalidomide, and prednisone appear to be effective8. It is evident with use of docetaxel, and the recent approval of cabazitaxel, that taxanes have activity in CRPC and could play a significant role in its treatment.

Tesetaxel in Second Line Hormone Refractory Prostate Cancer. Docetaxel is established as a first-line therapy in advanced castrate-resistant prostate cancer (CRPC), though patients go on to develop resistance to it. Genta is interested in exploring the activity of tesetaxel in CRPC to evaluate its therapeutic utility as a potentially improved method of treatment relative to docetaxel.

A Phase II study for tesetaxel in patients with advanced prostate cancer is expected to start in the second half of 2010. This study should include approximately 100 patients and will be conducted at Memorial Sloan Kettering Cancer Center and in conjunction with the U.S. Prostate Cancer Consortium.

ADVANCED BREAST CANCER

Breast Cancer Disease Background. Breast cancer originates from the breast tissue in the inner-lining of the milk ducts (Figure 12) of the lobules that supply the ducts with milk. Cancer that originates from the milk ducts is known as a ductal carcinoma. Cancers that exist in the lobules are lobular carcinomas. 10-year disease free survival has a wide range that includes anywhere from 10% to 98%. The most noticeable symptom and usually the first sign is a lump in the breast. In fact, more than 80% of breast cancers are discovered by feeling this lump9. Other indications of breast cancer may include changes in the size or shape, skin dimpling, nipple inversion, or spontaneous single nipple discharge. The earliest breast cancers are detected by mammograms and lumps found in lymph nodes in the armpit may still be diagnosed as breast cancer. Primary risk factors for breast

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5 What Is Prostate Cancer?" American Cancer Society :: Information and Resources for Cancer: Breast, Colon, Prostate, Lung and Other Forms.6 “Docetaxel for the Treatment of Hormone Refractory Prostate Cancer". http://www.nice.org.uk/nicemedia/live/11577/33321/33321.pdf.7 "Updated Survival Data on Provenge® for Treatment of Hormone Refractory Prostate Cancer Presented". http://professional.cancerconsultants.com/oncology_main_news.aspx?id=44732. Retrieved 9 May 2010.8 "Avastin®, Thalomid®, Taxotere®, and Prednisone Effective for Men with Hormone Refractory Prostate Cancer". March 2010. http://professional.cancerconsultants.com/oncology_main_news.aspx?id=44815. Retrieved 10 May 2010.9 Merck Manual of Diagnosis and Therapy (February 2003). "Breast Disorders: Cancer". http://www.merck.com/mmhe/sec22/ch251/ch251f.html#sec22-ch251-ch251f-525. Retrieved 2008-02-05.

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cancer have been identified as sex, age, lack of childbearing or breast feeding, and higher hormone levels10.

Figure 12: Diagram of Breast Anatomy: Milk Duct

Source: TopNews.in

In the clinical setting, breast cancer is typically diagnosed using a “triple test”. This test includes a clinical breast examination by a trained medical practitioner, mammography, and fine-needle aspiration cytology. Other methods such as self breast exams, genetic screening, ultrasound, and magnetic resonance imaging can be used and are recommended many times to ensure an early diagnosis as this will increase survival. Treatment largely depends on the stage of breast cancer, which can be determined from the TNM Staging system.

Usually, breast cancer is treated with surgery and then with chemotherapy or radiation, or both. For patients with stage 4 metastatic breast cancer, available treatment options only offer a 6 month increase in median survival11. The three main classes of medications used to treat breast cancer are:

1. Hormone Blocking Therapies2. Chemotherapy Agents3. Monoclonal Antibodies

Chemotherapy agents are predominately used for stage 2-4 disease and are usually given in combinations for 3-6 months at a time. One of the most common regimens is cyclophosphamide plus doxorubicin (Adriamycin), termed the AC regimen. In some cases, the taxane drug docetaxel is

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10 Collaborative Group on Hormonal Factors in Breast Cancer (August 2002). "Breast cancer and breastfeeding: collaborative reanalysis of individual data from 47 epidemiological studies in 30 countries, including 50302 women with breast cancer and 96973 women without the disease.". Lancet 360 (9328): 187–95. doi:10.1016/S0140-6736(02)09454-0. PMID 12133652.11 "Breast Cancer: Breast Disorders: Merck Manual Professional". Merck.com. http://www.merck.com/mmpe/sec18/ch253/ch253e.html#sec18-ch253-ch253e-572. Retrieved 2010-05-08.

http://en.wikipedia.org/wiki/Digital_object_identifier

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added to this regimen altering the name to CAT. Tesetaxel may be used in a similar capacity as docetaxel by being added to an existing regimen.

Tesetaxel in Advanced Breast Cancer. Genta completed an open label Phase IIa study of tesetaxel in patients who have progressed after treatment with an anthracycline-containing regimen. In the second- and third-line patients, tesetaxel was administered orally, once every 3 weeks at doses of 27 or 35 mg/m2. Preliminary activity was observed, and neutropenia was dose-limiting. Thirty-four patients were enrolled, 32 were evaluable and 13 patients had partial responses, yielding a 38% major objective response rate. Ten patients were reported to have stable disease, which combine to yield an overall disease control rate of 68%.

In another ongoing trial that enrolled patients with multiple tumor types (see below – “Results of the Tesetaxel Dosing Schedule Studies”), eight patients with advanced breast cancer have been treated with tesetaxel once every 3 weeks after having progressed on a median of five prior chemotherapy regimens. Seven of the eight patients had progressed after receiving either 1 or 2 taxane-containing regimens. Four patients (50%), 3 of whom had progressed on docetaxel or paclitaxel, achieved prolonged stable disease while receiving oral tesetaxel (range of 14+ to 23+ treatment cycles). Despite this extended therapy, no clinically significant neuropathy has been observed in these patients.With the well-validated activity of taxanes in breast cancer, we believe these initial results, are very promising for tesetaxel’s potential as a breast cancer therapeutic.

Genta recently initiated a Phase IIb confirmatory study in metastatic breast cancer. They have chosen first line advanced breast cancer as the indication, and intend to enroll twenty-five patients in the open-label study. The new study includes women with Her2-negative breast cancer who have developed progressive disease after primary surgery but who have not previously received chemotherapy for metastatic disease. Patients who received adjuvant post-operative chemotherapy (that may have included a taxane) are also eligible if they have been disease-free for at least 12 months since the last dose of chemotherapy.

A flat dose of 50 mg will be administered on an every three weeks dosing schedule, with the option to escalate dose by 10 mg based on tolerability beginning in the second round. The primary endpoint of the study is percent overall response. Secondary endpoints include response duration, disease control at 3 months, percent progression-free survival (PFS) at 6 months, durable response > 6 months, and time-to-progression (TTP). Enrollment should be completed in 2011.

PHARMACOKINETIC AND COMBINATION STUDIES OF TESETAXEL

Dose-Ranging and PK Study of “Dose Dense” Tesetaxel Schedule. At ASCO 2010 Genta presented new trial data for tesetaxel. Data from earlier studies had indicated that the dose limiting toxicity for tesetaxel is neutropenia, and that appearance of neutropenia is related to Cmax (peak blood levels). Hence, in an analogy to a dosing schedule that has recently been shown to be superior in breast cancer for paclitaxel, Genta is testing a “dose dense” dosing schedule. Two dosing schedules for these trials were evaluated as depicted in Figure 13. The first dosing schedule is a flat dose once every three weeks with a 10 mg per cycle dose escalation as tolerated. The second, dose dense, dosing schedule gives one dose each week for three weeks with the fourth week including no treatment.

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Figure 13: Dosing Schedules for Tesetaxel Dose-Ranging Trials

Source: LifeSci Advisors

Results of the Tesetaxel Dosing Schedule Studies. Evaluation of the first dosing schedule, of once every three weeks, was completed with accrual of 27 patients. A single oral 40 mg dose of tesetaxel was established for initial confirmatory studies of this dosing schedule. However, incremental dose escalation will be allowed depending on the individual’s tolerance. Accrual to the weekly dosing schedule is ongoing, and the final determination of the maximum tolerable weekly dose is pending. Furthermore, pharmacokinetic (PK) studies have not shown significant drug accumulation on either dosing schedule. No hypersensitivity reactions were observed and similar to previous studies, neutropenia was the dose-limiting adverse event.

These trials were the first trials to evaluate tesetaxel in patients that had previously progressed on taxane-containing regimens. Included in this trial are the eight patients with advanced breast cancer (results described above), who were treated with tesetaxel after progression on a median a five chemotherapy regimens. Other tumor types in which extended stable disease was observed were one patient each with: melanoma (12 cycles), nasopharyngeal cancer (10 cycles), and non-small cell lung cancer (10 cycles). Even though there was extended therapy with tesetaxel in these instances, no clinically significant neuropathy was observed in either schedule.

TARGET DISEASE EPIDEMIOLOGY

The following Figure 14, includes the current U.S. cancer disease key statistics for the five tumor types that Genta will target. Breast and prostate cancer are the two most commonly diagnosed, with the five diseases totaling almost 600,000 diagnoses per year in the US. Approximately 6.3 million Americans are currently living with or have been diagnosed with these diseases. While breast and prostate cancer are the deadliest, over 100,000 people are expected to die from these various forms of cancer in 2010. 1/8 women and 1/6 men will develop breast and prostate cancer, respectively.

Figure 14: Current U.S. Cancer Statistics by DiseaseOncologic Disease Diagnoses Prevalence Deaths Lifetime Risk

Bladder 70,530 535,236 14,680 2.39%Breast 207,090 2,591,855 39,840 12.15%

Prostate 217,730 2,276,112 32,050 16.22%Melanoma 68,130 793,283 8,700 1.93%Stomach 21,000 65,639 10,570 0.88%TOTALS 584,480 6,262,125 105,840 19.39%

Source: SEER Incidence and NCHS Mortality Statistics

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On a global basis, the opportunities are even larger, particularly in the case of gastric cancer, where the tumor is much more common in Asia. However, the initial approvals for these tumor types will be for subsets of patients that have advanced disease, with potential for use as first line therapy in the longer term. Presented in Figure 15 are Genta company estimates of treatable patient populations of selected tumor types, broken out by geography.

Figure 15: Treatable Patient Population by Tumor Type and Country


TAXANE DRUGS MARKET

Taxane-containing drugs are the mainstay and go-to treatment options for physicians treating patients with many different types of cancer. Figure 16 lays out the current taxane drug market opportunity by validated class and strategy. The validated class of microtubule inhibitors contains the taxane-based drugs Taxotere (docetaxel), Taxol (paclitaxel, now generic), and Abraxane (albumin conjugated paclitaxel). This class also includes Ixempra, which is a semi-synthetic analog of epothilone b, a non-taxane microtubule inhibitor. This drug was developed by Bristol Myers Squibb was approved by FDA in October 2007 for use in taxane resistant breast cancer. As such, Ixempra sales numbers provide insight into the potential for drugs active in taxane resistant tumors. In 2010, these four approved drugs are estimated to sell a total of $3.669 billion with Taxotere in the lead selling a whopping $2.440 billion.

The validated strategy of bringing an oral alternative to cancer therapy includes Roche’s Xeloda and TS-1, which is an oral fluoropyrimidine by Taiho Japan. Combined, both of these drugs are estimated to sell $1.362 billion in 2010 clearly validating that oncologists and cancer patients are interested in oral version of drugs that were once only available intravenously.

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Figure 16: Taxane Drug Market Opportunity by Validated Class & Strategy


OTHER NEW TAXANE DRUGS

Archer Biosciences: ARC-100 (TPI-287). Archer Biosciences is developing a novel class of taxoids, called abeotaxanes. Archer’s lead product candidate and abeotaxane is ARC-100 (TPI-287), which significantly enhances the antitumor effects of chemotherapy and has shown promising safety and efficacy results in patients with solid tumors. Additionally, ARC-100 is the only abeotaxane molecule in clinical development that has exhibited significant in vivo anti-cancer activity. ARC-100 is being evaluated as an intravenous drug in multiple clinical trials in advanced solid tumors that include neuroblastoma, glioblastoma, and melanoma. Another study is planned for advanced stage breast cancer that is metastatic to brain. ARC-100 is still in Phase I/II12 clinical development and we estimate that Archer is at least 2 years behind Genta for developing the next taxane drug. The company also has an additional compound in pre-clinical development: ARC-200, a follow-on being investigated as an oral therapy.

Indena: IDN-5390. IDN-5390, a natural product derived from the yew tree, is Indena’s lead taxane drug. Pre-clinical test for this drug indicated that IDN-5390 presents low toxicity and has selective activity in angiogenesis. IDN-5390 will be delivered orally and its antitumor activity has been confirmed in a variety of human tumor xenografts that include ovarian cancer, colon carcinoma, and glioblastoma. The compound was shown to target class III beta-tubulin, thus overcoming one form of paclitaxel resistance. Although this compound began early stages of clinical trials, there are no ongoing studies.

Spectrum (NASDAQ: SPPI): Ortataxel. Ortataxel is a third generation taxane in Phase II clinical development. Its target indications are solid tumors such as lung, breast, kidney and others.. It also has the potential to be active in tumors resistant to paclitaxel and docetaxel. It can be delivered either via IV infusion or orally and has a similar safety profile as paclitaxel. Numerous studies have been completed, and antitumor activity has been demonstrated in a Phase II taxane-refractory solid tumor study, though Specturm does not currently have any studies ongoing and development of the compound appears to be suspended.

Taxolog: TL-310. TL-310 is also a novel oral taxane with antitumor activity in taxane-resistant model systems. TL-310 had entered early clinical development, but currently there are no open or actively recruiting studies, and Taxolog has recently filed for bankruptcy.

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12 http://clinicaltrials.gov/ct2/show/NCT00867568?term=archer&rank=18

Bristol Myers Squibb (NYSE: BMY): BMS-275183 [Discontinued]. BMS-275183 is an oral C-4 methyl carbonate analogue of paclitaxel that has the same mechanism of action. This drug was being developed as an oral formulation and multiple Phase I/II studies were conducted. The drug had shown promising activity in late Phase 2 studies in non small cell lung cancer. However, this compound’s clinical program was terminated in Phase II development due to peripheral neuropathy, which is a common side-effect of this class of drugs. Based on the low rates of neuropathy observed to date, we do not expect tesetaxel to run into this issue as it completes Phase II/III clinical development.

Wyeth [Now Pfizer (NYSE:PFE)]: Milataxel [Discontinued]. Milataxel is a novel taxane analogue with evidence of enhanced antitumor activity relative to paclitaxel and docetaxel13. It is an orally bioavailable taxane with a similar mechanism of action to tesetaxel and these previously mentioned taxane drugs. Milataxel also appears to be a poor substrate for the multi-drug resistance (MDR) P-glycoprotein (P-gp) efflux pump, like tesetaxel. Both the IV infusion and oral formulation of milataxel had entered Phase II clinical studies. However, the program was terminated due to excessive gastro-intestinal toxicity. Once again, this highlights the main barrier to entry for taxane-containing drugs, which is overcoming adverse side-effects characteristic to the class of drugs.

Tesetaxel Competitive Landscape

We believe that great potential exists in the current taxane-drug market. While there are only a handful of taxane-based drugs on the market, these drugs are widely used on a global scale, they are likely to remain mainstays of cancer treatment for the foreseeable future, and we expect physicians to be open and accepting to new and improved taxane drug compounds. A lot of activity exists in research and development with several taxane-containing compounds on pharmaceutical companies’ pipelines around the world. Currently, Taxotere (docetaxel) dominates the market accounting for well over half of the total taxane drug sales and market share. However, the patent on Taxotere expired in 2007 opening up the generic Taxotere market. Decision Resources, a leading research and advisory firm finds that, although Sanofi-Aventis's Taxotere will remain the market leader through 2010, generic erosion of Taxotere will reduce the overall value of the taxane market between 2010 and 2015. We find this to be consistent with our expectations with the exception that any new taxane drug approved will act as a catalyst therefore counteracting Taxotere’s decreased sales numbers and further expanding the market. Either way, the generic erosion of Taxotere will offer opportunity for other taxane drugs to consume additional market share.

In order for an approved taxane-based drug to act as a catalyst for the overall market, we believe that is must be a differentiated taxane drug product with distinguishing features and we believe that Genta is seeking that in tesetaxel. First, clinical programs have been terminated by both Bristol Myers Squibb and Wyeth for their taxane-containing compounds exhibiting adverse side effects. These side-effects are unique to the class of drugs and tesetaxel’s clinical data to date suggests that it is not affected by these same adverse events, specifically peripheral neuropathy. Moreover, all taxane drugs on the market are delivered via IV infusion, which – except for Abraxane -- can cause serious infusion reactions, whereas tesetaxel allows for convenient oral dosing. Indeed, the successful launch of Abraxane (almost $400 MM in annual sales 4 years after launch) clearly validates the existence of a market for a paclitaxel-based compound that simply reduces hypersensitivity reactions. The

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13 Cancer Chemotherapy and Pharmacology. Volume 61, Number 3, 453-458, DOI: 10.1007/s00280-007-0489-5

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convenient oral dosing is a big advantage as it will increase the patient’s quality of life and reduce excess medical costs required for IV infusions. In terms of timing, tesetaxel appears to have a very wide lead over any other taxane drug compounds currently undergoing clinical development. For these reasons, we believe that upon regulatory approval Genta’s tesetaxel will be well-positioned for success in the taxane drugs market.

In summary, tesetaxel appears to offer improved convenience, elimination of hypersensitivity reactions and the associated requirements for premedications (antihistamine, steroids), reduced doctor/nursing observation time due to elimination of protracted IV infusions, markedly reduced peripheral neuropathy, and possible expansion of the taxane market due to circumvention of Pgp-mediated drug resistance. The drug has clearly demonstrated activity and is a pending Phase 3 opportunity.

Genta’s clinical development plan demonstrates careful thought and has addressed optimal means of opening up the taxane market by initially addressing areas where existing taxanes have activity, but are less strongly entrenched. Gastric cancer was the last regulatory approval for Taxotere, on the basis of a single study (TAX325) that showed a 2-week improvement in median survival at a cost of approximately 80% Grade 4 (life-threatening) neutropenia. Accordingly, the market share of Taxotere in gastric cancer has remained low at 30-35%, and the drug is broadly viewed by KOLs as providing insufficient benefit relative to risk at the labeled dose. Thus, we believe there is ample room for increased use with an equally active but less toxic alternative.

Similarly, taxanes are known to be active in bladder cancer, but have not yet approved in this tumor type. Two other tubulin-binding drugs from major pharma companies (larotaxel; Sanofi Aventis; and vinflunine; Bristol Myers Squibb/Pierre Fabre) have recently discontinued programs that were widely considered as potentially approvable for bladder cancer, with good efficacy. These competitive failures have provided a substantial opportunity for a new and improved entrant.

Development in breast and prostate cancer, while potentially more lucrative by virtue of larger patient populations, will be substantially more challenging, given the level of competitive activity. Sanofi Aventis has recently launch Jevtana (cabazitaxel) in patients with prostate cancer who progressed on docetaxel, thus potentially creating a new standard of care. In contrast, Genta appears to be focusing on chemotherapy naive patients who have not previously received docetaxel Studies that combine tesetaxel with other new oral drugs, such as Cougar Biotechnology/JNJ’s abiraterone or Medivation/Astellas’ MDV3100, could be significant opportunities for all oral programs that may yield considerably better tolerance for early stage patients. Use of tesetaxel in breast cancer could also benefit from positioning in combination with other oral agents, probably earlier in the disease.

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Genasense: an Enhancer of Programmed Cell Death

Genasense (G3139, oblimerson sodium, Figure 17) a Bcl-2 antisense molecule, 18 bases in length, is one of Genta’s lead drug candidates in late stage clinical development. This investigational anti-cancer agent is undergoing testing to evaluate its safety and efficacy when combined with standard ant-cancer therapies. Its mechanism of targeting the key cell death regulator, Bcl-2, may lead to enhanced ability of standard chemotherapy agents to kill tumor cells.

Genasense is administered for several days via ambulatory infusion pump, followed by standard doses of chemotherapy. This sequence would then be repeated depending on the chemotherapy regimen and the type of cancer affecting the patient. Genasense has potential to be combined with many different types of anti-cancer agents and chemotherapy regimens.

Figure 17: Chemical Structure of Genasense (oblimerson sodium)

Source: Company Report

Antisense Technology. The antisense technology employed by Genasense is used to reduce the expression of Bcl-2 protein. Any protein can be targeted by antisense, and this technology uses modified strands of DNA to target and reduce the expression levels of a particular protein.

Messenger RNA (mRNA) for a specific gene is translated into a particular protein, a process regulated by epigenetic mechanisms, post-transcriptional, and post-translational modifications. Genta scientists used a “message walk” process to isolate and screen a large number of candidate Bcl-2 antisense drugs built from modified strands of DNA 12-22 nucleotides long. Genasense is the molecule proven to be most effective at targeting the Bcl-2 gene.

Genasense binds to the complimentary region of Bcl-2 mRNA via Watson-Crick base pairing. Figure 18 details the mechanism by which the Genasense/Bcl-2 (DNA/RNA) duplex is recognized as foreign by the body, triggering a defense mechanism. RNAse H, an endogenous enzyme that targets and cleaves double stranded nucleic acids, gets recruited to double stranded complex formed when Genasense binds to Bcl-2 mRNA. RNAse H cleaves and destroys the Bcl-2 mRNA, while the antisense DNA (Genasense) is released and free to bind other mRNA. This initiates a repetitive

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bind/release/destroy cycle that is self-amplifying and increases the potency of the drug. The destruction of the Bcl-2 mRNA eliminates its ability to produce a Bcl-2 protein.

Figure 18: Genasense: Antisense DNA Technology Mechanism


Bcl-2: an Anti-apoptotic Protein. Bcl-2, a critical regulator of cell death and has been the focus of research by Genta for over 20 years. More specifically, Bcl-2 is a key inhibitor of a programmed cell death process called apoptosis. Many solid tumors and hematologic cancers show increased expression of Bcl-2, leading to decreased cell death of the tumor cells. There is extensive scientific evidence to suggest that reducing the expression of Bcl-2 would facilitate death of tumor cells and increase patients’ chance of survival or prolong their lives. All of these factors make Bcl-2 an excellent target for new anti-cancer therapeutics.

Bcl-2 is a member of a larger protein family that plays an important role in apoptosis. If an external influence damages a cell, it frequently will undergo apoptosis. This cellular mechanism is important in cancer therapy since chemotherapy- or immunotherapy-induced injuries often cause a cell to undergo apoptosis. The apoptotic pathway that initiates the process of apoptosis is regulated and controlled by Bcl-2 protein family members as shown in Figure 19.

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Figure 19: Role of Bcl-2 Protein Family Members in the Apoptosis Pathway

Source: Apoptotic signal pathways and regulators of apoptosis (Adapted from Johnstone et al. Cell. 2002)

As previous discussed, Bcl-2 is highly expressed in many types of cancer. Below, Figure 20 shows results from a survey of medical literature on patients with various types of cancer. This survey reported the proportion of patients that, at the time of initial diagnosis, over-express Bcl-2 relative to a relevant normal cellular counterpart. Bcl-2 appears to be a major contributor to both inherent and acquired resistance to current anti-cancer therapies.

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Figure 20: Percentage of Patients Whose Tumors Over-express Bcl-2 at Diagnosis

% OF PATIEN

TS OVER

EXPR

ESSING BCL-‐2


Mechanism of Action (MOA). Typically, the Bcl-2 protein is localized between the bilaminar membranes of the mitochondrion. Here, Bcl-2 is believed to prevent the release of cytochrome C from the mitochondria, which is known to activate caspases enzymes that trigger apoptosis. Since most types of chemotherapy induce damage to the cell and induce apoptosis, Bcl-2’s ability to block the release of cytochrome C reduces the drugs’ ability to kill tumor cells (Figure 21).

Figure 21: Bcl-2 Protein Blocks Activation of Cell Death


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By inhibiting Bcl-2 production using Genasense, mitochondrial release of cytochrome C will be unblocked allowing for release to be triggered by chemotherapy, initiating the cascade of caspase activation, leading to cell death. Therefore, Genasense has been designed to increase the ability of chemotherapy to kill cells by blocking Bcl-2 mediated inhibition of cell death.

Genasense has been evaluated for treatment of patients with advanced melanoma (Phase III ongoing), in chronic lymphocytic leukemia (CLL) where it was shown to increase nodular partial and complete response rates, and in non-Hodgkin’s lymphoma (NHL) where it was evaluated in exploratory trials as a single-agent and in combination with alkylators and rituximab.

ADVANCED MELANOMA DISEASE BACKGROUND

Melanoma is a cancer of cells that make the pigment melanin, or melanocytes. It most commonly begins in a mole (Figure 22), but melanoma may also begin in pigmented tissues such as the eye, or intestines.

Figure 22: Melanoma Schematic

Source: Dr. Martin A. Weinstock, American Cancer Society

Early signs of melanoma can be seen by the change in shape, size, or color of a mole, which may also later itch, ulcerate, or bleed. Metastatic melanoma may cause additional non-specific paraneoplastic symptoms of loss of appetite, nausea, vomiting, and fatigue. Melanoma is one of the most aggressive forms of cancer and metastasis of early melanoma is possible, though it is estimated that less than 20% of melanomas diagnosed early become metastatic.

Molecular Pathogenesis. Melanoma is genetically heterogeneous and several loci implicated in its pathogenesis have been identified. The multiple tumor suppressor 1 (CDKN2A/MTS1) gene encodes p16INK4A, which is a low molecular weight inhibitor of cyclin-dependent kinases (CDKs) involved in regulation of the cell cycle14. CDKs are often affected in cancers, leading to loss of cell cycle regulation and uncontrolled cellular growth. One class of mutations that affects CDKN2A leads to the destabilization of p53, which is a transcription factor involved in apoptosis. Other

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14 CDKN2A cyclin-dependent kinase inhibitor 2A (melanoma, p16, inhibits CDK4) from Entrez Gene

http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=gene&cmd=Retrieve&dopt=full_report&list_uids=1029

http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=gene&cmd=Retrieve&dopt=full_report&list_uids=1029

mutations, including mutations that cause the skin disease xeroderma pigmentosum (XP) can also increase the risk of developing melanoma.

Diagnosis and Treatment of Melanoma. Although the incidence of melanoma has markedly increased over the last 40 years, the survival of patients with advanced melanoma has not improved over the corresponding period. Hence, advanced melanoma remains a significant unmet need in oncology.

The initial diagnosis of primary melanoma typically follows the biopsy of a suspicious mole or lesion. If the melanoma is localized at diagnosis, then prognosis is good following appropriate excision surgery. For patients whose initial local tumors show adverse signs such as thickness, positive deep margins or lymphovascular invasion, a biopsy of the sentinel lymph node is recommended. The sentinel node is the first node in the node basin to which the tumor drains, and is therefore at greatest risk of metastasis. It is identified preoperatively by lymphoscintigraphy using vital blue dye and intraoperatively by radio colloid injection. Patients with more advanced tumors, for example those with deep cutaneous tumors (Stage II), nodal involvement (Stage III) and distant metastases (Stage IV), result in progressively worse outcomes. Among Stage IV patients, those expressing high levels of serum lactose dehydrogenase (LDH) are considered the most advanced. High serum LDH is believed to reflect the presence of liver metastases and is correlated with decreased survival, with a median of less than 6 months.

For the treatment of locally advanced or metastatic disease physicians have used radiation therapy, chemotherapy, immunotherapy, or biochemotherapy. However, even with a large number of chemotherapy agents and combined-modality treatments, the prognosis of metastatic melanoma remains quite poor, and is almost uniformly fatal. Single-agent therapy has yield low response rates thus far. Even though combination chemotherapy allows for higher response rates, there has not been significant improvement in overall survival. Figure 23 outlines treatment options recommended by the National Comprehensive Cancer Network (NCCN) for patients with advanced melanoma. Recommended therapies are very limited, and in fact, the recommended first choice treatment for Stage IV patients is to enter a clinical trial for a new exploratory drug.

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Figure 23: NCCN Guidelines for Treatment of Stage IV Melanoma

Source: NCNN Melanoma Treatment Guidelines for Patients

Current Standard of Care Therapy for Advanced Melanoma. To date, only single-agent therapies have been improved, with no combination therapies. Hydroxyurea, dacarbazine (DTIC), and Aldesleukin (Proleukin, IL-2) were approved in 1967, 1975, and 1998, respectively. Dacarbazine is the most commonly used chemotherapeutic agent in advanced melanoma, yet it shows a response rate of only 7-13%15 and it has not been shown to provide a survival benefit16. It is used as monotherapy or in combination with other agents. A combination called the MD Anderson regimen is dacarbazine plus cisplatin and vinblastine, while the Dartmouth regimen consists of dacarbazine plus cisplatin, carmustine and tamoxifen. While these two combination regimens do show higher response rates, neither of them has ever showed a survival benefit over dacarbazine alone.

Proleukin is a recombinant form of interleukin-2 (IL-2), which is a T-lymphocyte growth factor cytokine, and its use is limited due to significant toxicity. In addition, the drug must be dosed intravenously every 8 hours for up to 14 doses per course. Dosing is generally administered in an in-patient acute care setting, and is only available at select specialized centers. The drug shows a response rate of just 16%, though a subset of those patients (6% of total) do experience durable response. Proleukin was approved on the basis of durable response. This is worth pointing out, since response rate (RR) and durable response (DR) are now typically considered as secondary endpoints by FDA and generally not used as the basis for approval. In addition, these approved agents had no controlled studies, showed no significant survival benefit, and exhibited substantial toxicity.

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15 Eggermont and Kirkwood, EJC, 200416 May 3rd, FDA ODAC Advisory Committee Briefing Document

Other agents of interest include interferon alfa-2b (Intron A), which showed promising results in a Phase 2b study for metastatic melanoma that were not reproduced in Phase 3, and is now used mainly as adjuvant therapy following surgery in patients with Stage IIb or III disease.

Temozolomide (TMZ), an orally administered analog of the intravenously dosed dacarbazine has demonstrated a limited survival benefit similar to dacarbazine17. In 1998 Schering submitted an NDA for temozolomide based upon one Phase III trial. FDA failed to approve the application on the basis that they failed to show a survival benefit, despite showing a benefit in PFS (Figure 24)

Figure 24: TMZ Results ITT PopulationTMZ

N=156DTICN=149

Hazard Ratio p value

Median Survival 7.7 mo 6.4 mo 0.85 0.20 *Median PFS 53 days 42 days 0.67 0.002 *

Overall Response Rate 12.2 % 9.4 % 0.43 **

* log rank, ** Chi square* log rank, ** Chi square* log rank, ** Chi square* log rank, ** Chi square* log rank, ** Chi square

Source: ODAC Meeting Presentation, March 23, 1999

MELANOMA EPIDEMIOLOGY

Metastatic melanoma comprises 4% of new cancers, and the incidence of melanoma is increasing greater than 5% annually. A significant mortality increase is observed for males above the age of 60. Overall, it is estimated that the productive life-year loss of melanoma exceeds prostate cancer, which is also one of the leading causes of death in the U.S.

In 2010, it is estimated that in the US, 68,130 cases (38,870 men and 29,260 women) will be diagnosed with melanoma of the skin and that 8,700 total people will die from the disease18. Based on the National Cancer Institute’s (NCI) SEER Cancer and Statistics Review19, the median age of diagnosis is 60 and the age-adjusted rate of incidence was 20.1 per 100,000 men and women per year. The age-adjusted death rate is 2.7 per 100,000 per year. While the trend of incidence of melanoma had been increasing over the past several decades, the rate of incidence has actually begun decreasing more recently. From 1985-2007, the overall rate of incidence and mortality is 2.6% and -0.1%, respectively.

Figure 25: Stage Distribution & 5-year Relative Survival by Stage of Diagnosis

Stage at Diagnosis Stage Distribution (%)

5-year Relative Survival (%)

Localized (confined to primary site) 84 98.0Regional (spread to regional lymph nodes) 8 62.1

Distant (cancer has metastasized) 4 15.9Unknown (unstaged) 4 76.0

Source: NCI SEER Cancer Statistics Review

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17 J Clin Oncol 18 (2000), pp. 158–16618 National Cancer Institute19 SEER Cancer Statistics Review

Currently, there are approximately 800,000 men and women in the US with a history of melanoma. Figure 25 indicates that early stage, localized melanoma is the most common stage at diagnosis, with more advanced forms being diagnosed less often. More importantly, as the stage of melanoma diagnosed gets more advanced, the 5-year relative survival plummets to as low as 15.9%. Currently, there are very few options for patients with advanced melanoma, contributing to the low survival rate. Hence, it is very important to bring new therapeutics to combat melanoma in patients with advanced or late-stage melanoma.

MELANOMA MARKET INFORMATION

Overall, the worldwide cancer drug market is estimated to be a $52 billion market and with melanoma being the seventh deadliest cancer. GlobalData estimated the global melanoma disease market to be valued at $330MM in 2008 with a CAGR of 14%, implying that by 2015, the melanoma market should be $800MM. These market size numbers are small relative to other tumor types with similar patient numbers for two main reasons. First, a majority of melanoma patients are diagnosed at very early stages, where simple tumor excision procedures are highly effective, so no drug therapy is given to those patients. Secondly, in more advanced patients with multiple metastases where surgery is not effective, drug therapy options are quite limited, and the most commonly used drug, DTIC, is available generically.

Hence, we believe that a new drug with notable efficacy would be rapidly adopted, creating rapid growth in the overall size of the melanoma market. Currently, the most visible drug candidate is ipilimumab from Bristol Myers Squibb, who presented favorable results at ASCO 2010. It is estimated that if approved, ipilmumab could reach $1-1.5 billion in sales within five years, which would rapidly expand the melanoma market. We estimate that, if approved, ipilimumab could reach 50-60% market share. Figure 26 below depicts the approximate global melanoma market with and without the impact regulatory approval of ipilimumab would have.

Figure 26: Melanoma Market Forecast

Source: LifeSci Advisor Estimates

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GENASENSE PRE-CLINICAL DATA

Chemoresistance of malignant melanoma is linked to increased expression of the proto-oncogene Bcl-2. Genasense has been shown to decrease Bcl-2 protein concentrations, increase tumor-cell apoptosis, and lead to tumor responses in mouse xenotransplantation models when combined with systemic dacarbazine. A phase I/II clinical study20 was conducted by Genta to evaluate Genasense and dacarbazine in patients with advanced malignant melanoma with tumors that express Bcl-2.

Fourteen patients with advanced malignant melanoma were each given escalating doses of Genasense intravenously or subcutaneously in daily doses of 0.6-6.5 mg/kg plus dacarbazine treatment (total doses up to 1000 mg/m2 per cycle). The combination regimen was reported to be well-tolerated with no dose-limiting toxicity. In terms of adverse events (AEs) hematological abnormalities were mild to moderate, lymphopenia was common, and higher doses of Genasense were associated with a transient fever. By day 5 of treatment, daily doses of 1.7 mg/kg and higher lead to a median 40% decrease of Bcl-2 protein in malignant melanoma samples when compared with baseline. Additionally, tumor cell apoptosis was increased after treatment with dacarbazine, 6 out of 14 patients experienced anti-tumor responses to treatment, and median survival of all patients exceeded 12 months. This initial data demonstrated that Genasense, when combined with standard anti-cancer therapies, might offer a new approach to treating patients with resistant neoplasms.

Figure 27: Bcl-2 Downregulation: 5 Days of Genasense Tx in Melanoma Serial Biopsies

Bcl-2

Actin

% ofBaseline

100%Day 0

30%Day 5

Source: Lancet. 2000 Nov 18;356(9243):1728-33

Clinical Data Discussion: Genasense in Advanced Melanoma

A significant amount of clinical data is available for Genasense. Phase I, II, and III trials have been conducted in a variety of tumor types including: melanoma, acute and chronic leukemias, non-Hodgkin’s lymphoma (NHL), prostate, colon, lung, breast, and other tumor types. To date, Genasense has been tested in more than 2,500 patients.

GM301 Phase III Trial: Genasense plus Dacarbazine in Patients with Advanced Melanoma

Based upon the pre-clinical and clinical evidence suggesting Genasense can target and reduce levels of the Bcl-2 protein, which is linked to chemotherapy resistance, Genta conducted a Phase III trial

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20 Lancet. 2000 Nov 18;356(9243):1728-33

(GM301)21 to evaluate the effect of Genasense on improving the efficacy of systemic chemotherapy in patients with advanced melanoma. This trial was the largest randomized study ever conducted in patients with advanced melanoma. This trial, which began in July 2000, formed the basis of a New Drug Application (NDA) that was submitted to FDA in December 2003.

GM301 Phase III Study Design. This large, randomized, controlled, open label trial was conducted with patients who had not previously received any systemic chemotherapy. 771 patients in total (139 sites and 9 countries) were first stratified according to several criteria: ECOG performance status (0 vs 1 or 2); extent of metastases and LDH level (skin subcutaneous and/or lymph node metastases without visceral involvement with normal LDH vs any visceral metastases or elevated LDH); and liver metastases (yes vs no), and then randomized to receive Genasense plus dacarbazine or dacarbazine alone. Patients were dosed with dacarbazine (1000mg/m2 IV), either alone or preceded by a 5-day continuous intravenous infusion of Genasense (7 mg/kg/d) every 3 weeks for up to 8 cycles (Figure 28).

Figure 28: GM301 Study Design


The primary endpoint of the study was overall survival (OS), with secondary endpoints of overall response, durable response (defined as major response lasting >6 months), and progression-free survival (PFS).

GM301 Results. Historically, response rates to dacarbazine monotherapy has ranged from 10% to 20%, but more recent studies where this regimen is used as a control have yielded even lower response rates22, with complete responses being quite rare23. Despite the low activity of dacarbazine, no other therapy has demonstrated improved durable/complete responses or overall survival in a randomized trial for advanced melanoma,24 until just recently with the BMS announcement regarding ipilimumab in June at ASCO 2010 (see below).

Primary Endpoint in GM301: Overall Survival (OS). Figure 29 is a Kaplan-Meier plot of overall survival from the intent-to-treat (ITT) population of 771 patients in GM301, and shows a trend towards improved survival at the 24-month follow-up (median survival 9.0 vs. 7.8 months, p = 0.077, hazard ratio = 0.87 with 95% CI 0.75 to 1.01).

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21 J. Clinical Oncology, Vol 24, No 29 (October 10), 2006: pp. 4738-474522 J Clin Oncol 22:1118-1125, 200423 J Exp Clin Cancer Res 19:21-34, 200024 J Clin Oncol 22:1118-1125, 2004

Figure 29: Overall Survival in GM301 for Patients with Advanced Melanoma

Source: J. Clinical Oncology, Vol 24, No 29 (October 10), 2006: pp. 4738-4745

Serum LDH May Determine Genasense Benefit. High serum LDH in patients with advanced melanoma is a well-validated biomarker indicative of very advanced disease. High LDH is associated with decreased survival of less than 6 months median survival. In the GM301 study, patients were stratified by LDH level prior to randomization.

Figure 30 shows subset analysis of OS from the GM301 study for two subsets of patients: those with normal LDH (≤1.1x ULN, 508 patients), which corresponds to the LDH cutoff defined in the stratification for the GM301 study; and those with low-normal LDH (≤0.8x ULN, 274 patients), which corresponds to the LDH cutoff used as an enrollment criterion in the current Phase III Genasense study, AGENDA. From previous data with Genasense, we would expect the exclusion of high LDH patients from the analysis to be favorable and lead to an increased OS for Genasense. In fact, OS did improve in the Genasense arm for both LDH cutoff subsets. The normal LDH subset (≤1.1x ULN) showed an OS of 11.4 months versus 9.7 months in the control arm, with a p value of 0.018 and a hazard ratio of 0.79. The corresponding numbers for the low LDH subset (≤0.8x ULN) are 12.3 months vs. 9.9 months with a p value of 0.0009 and a hazard ratio of 0.64.

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Figure 30: GM301 Subset Analysis: Overall Survival for Two Serum LDH Cutoff Subset

Source: Oligonucleotides vol 17, pp.345–348 (2007)

By contrast, patients with elevated LDH (>1.1x ULN) in both GM301 arms fared poorly regardless of treatment, and had very similar median OS of less than 5 months (p=0.53, hazard ration = 1.09), confirming literature observations that this patient subset has more advanced disease and worse outcomes. We believe the exclusion of patients with elevated LDH from the AGENDA study based on this result will improve results from the study.

GM301 Secondary Endpoints. Statistically significant increases were observed in all secondary endpoints for this study, as noted in Figure 31. Multiple sensitivity analyses were completed for PFS to evaluate the impact of missing data and differences in interval assessments. Results favored the Genasense plus dacarbazine cohort each time, further demonstrating the validity of the increase in PFS. A total of 11 complete responses (CR) were observed with Genasense plus dacarbazine. Of the 11 patients, 9 patients were alive 24 months post randomization and the other two lived for 19 and 22 months. In the dacarbazine group, just 3 patients had complete responses and only 2 of those patients were alive after 24 months post randomization.

Figure 31: Secondary Endpoint Results from GM301 Phase III Trial in Advanced Melanoma

Endpoint dacarbazine + Genasense

dacarbazine p-Value

Progression-free Survival 2.6 Mo. 1.6 Mo. <0.001Overall Response Rate 13.5% 7.5% 0.007

Durable Response 7.3% 3.6% 0.03Complete Response 2.8% 0.8%

Source: J. Clinical Oncology, Vol 24, No 29 (October 10), 2006: pp. 4738-4745 and LifeSci Advisors

In short, GM301 met all of its secondary endpoints, but narrowly missed its primary endpoint with a final ITT p-value of 0.077. The results of this Phase III study suggest that Genasense when combined with dacarbazine improved multiple clinical endpoints including PFS, ORR, DR, and CR. Overall survival was also increased in patients with low or low-normal serum LDH at baseline.

FDA Analysis of PFS Data for GM301. In May 2004, FDA’s Oncologic Drugs Advisory Committee (ODAC) met to discuss Genta’s completed Phase III Genasense trial, GM301 and their potential regulatory filing. At that time, because Genasense had narrowly missed the overall survival

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endpoint (p=0.077) and strongly hit on PFS (p=<0.001), Genta had hoped FDA would consider approval based on the PFS data.

Genta was asked to conduct additional analysis to determine the validity of the positive results for the secondary endpoints and FDA also conducted separate additional simulations. In addition, an independent contract organization (RadPharm) was hired to independently do a blinded review of data (radiological films and photographs), an analysis that confirmed the endpoints, though to a lesser degree.

These FDA simulations focused on a concern in the PFS data, centered on differences in the timing of early assessment visits, which showed that in such a large study (GM301) with a small systematic study arm bias in assessment intervals between the study arms, it is possible that in fact these observed statistically significant differences are false positives.

Patients that progress in the study are said to do so on the day that any test first indicates their tumor has grown. Hence, a component of timing of appointments comes into play. FDA noted in their briefing document that there is a systematic difference between arms in the number of days between randomization and lesion assessment (see Figure 32). This could be the result of a real effect (i.e., patients in the control arm do less well and therefore schedule appointments sooner), or it could an artificial bias due to differences between arms in this unblinded study (i.e., patients in the active arm receive 5 days of Genasense infusion prior to their dose of DTIC, and perhaps the sites scheduled first visits at 6 weeks following DTIC dosing rather than 6 weeks following randomization).

Figure 32: Kaplan-Meier Curve of Time from Randomization to 1st and 2nd Lesion Assessments (FDA Reviewer’s Figures)

Source: FDA ODAC Briefing Document, NDA 21-649, May 3, 2004

FDA performed a statistical analysis involving Monte Carlo simulations and showed a systematic bias of as little as two days could produce a misleading false positive PFS result.

FDA’s analysis has since been extensively criticized for its several flaws, and a recent peer-reviewed paper25 has shown that the FDA assumptions and procedure lead to faulty conclusions. Nonetheless, these facts will not alter the overall conclusion that there was insufficient evidence to recommend approval.

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25 Oligonucleotides vol 17, pp.345–348 (2007)

After the negative vote from the ODAC meeting, Genta elected to withdraw the NDA for Genasense, which provides an opportunity to resubmit the file at a later date.

GM301 Safety. The Data and Safety Monitoring Board (DSMB) review of adverse events (AEs) in this study revealed no safety concerns. There was no increase observed in serious infections or bleeding events. Figure 33 lists the adverse events that occurred in patients between both treatment groups. The majority of patients experienced at least one AE, with 67% of the combined treatment group and 43% of the dacarbazine alone experiencing at least one grade 3 or 4 event. Neutropenia and thrombocytopenia were increased in the Genasense cohort, though the incidence is still substantially lower when compared to other drugs or regimens for patients with advanced melanoma26.

Furthermore, Grade 1 or 2 bleeding events were increased in the Genasense arm (13.7% vs. 9.2% for control), however Grade 3 or 4 bleeding events were decreased (2.2% vs. 3.1% for control). Catheter-related events that include AEs such as venous thrombosis, infections, and device blockage/breakage occurred 19.1% in the Genasense arm and 8.6% in the control arm. Although, given the route of administration (prolonged central venous access and ambulatory pump required), it was not surprising to see an increase in these events. Although these events were generally not serious, the Company is exploring short intravenous infusions for possible future studies.

Safety findings in patients with low-normal LDH levels demonstrate an enhanced risk/benefit ratio based on lower rates of AEs associated with death, discontinuation, and seriousness.

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26 J Clin Oncol 20:2045-2052, 2002

Figure 33: Serious Adverse Events in GM301 Grade 3 & 4 AEsGrade 3 & 4 AEsGrade 3 & 4 AEsGrade 3 & 4 AEs

Genasense + dacarbazine

(n= 371)

Genasense + dacarbazine

(n= 371)

dacarbazine (n= 360)

dacarbazine (n= 360)

Adverse Event # % # %

Nausea* 25 6.7 9 2.5Vomiting 16 4.3 7 1.9Constipation 8 2.2 3 0.8Diarrhea 6 1.6 3 0.8Thrombocytopenia* 59 15.9 23 6.4

Neutropenia* 79 21.3 45 12.5Anemia 27 7.3 17 4.7Leukopenia* 28 7.5 14 3.9Infection (any)* 42 11.3 13 3.6Pyrexia 16 4.3 7 1.9Fatigue 17 4.6 11 3.1Anorexia* 9 2.4 1 0.3Headache* 10 2.7 1 0.3Rigors 3 0.8 0 0.0Dizziness 2 0.5 0 0.0Pain 14 3.8 6 1.7*Denotes statistically significant difference between groups with grade 3 or 4

of the event*Denotes statistically significant difference between groups with grade 3 or 4




of the eventSource: modified from J. Clinical Oncology, Vol 24, No 29 (October 10), 2006: pp. 4738-4745

AGENDA: A Second Phase III Trial in Advanced Melanoma for Genasense

Genta’s second Phase III trial for advanced melanoma, entitled AGENDA, was designed to take advantage of the observation in the previous GM301 Phase III melanoma trial that patients with low-normal serum LDH levels derived superior benefit from Genasense. Genta completed accrual to AGENDA in 2009. Interim results of secondary endpoints were released in October 2009 and at ASCO 2010. Patient followup for overall survival will be completed on March 31, 2011, and we expect data release shortly thereafter.

Study Design for AGENDA: Phase III Study of Genasense in Advanced Melanoma. AGENDA is a randomized, double-blind, placebo-controlled study for patients with no previous systemic chemotherapy and, based on subset analysis of the GM301 study, a requirement was added for patients to have a baseline serum LDH ≤0.8x ULN. Patients were randomized to Genasense plus dacarbazine or dacarbazine alone. The key differences between AGENDA and GM301 are noted in Figure 34, and include the addition of placebo in the control arm along with double-blinding for AGENDA, plus the addition of the LDH enrollment limitation, and elevation of progression-free survival to be a co-primary endpoint rather than a secondary endpoint as it was in GM301. We view this change in study design as favorable for AGENDA. Enrollment is now

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complete, with 314 patients in total enrolled from sites in the U.S., Canada, Western Europe, and Australia.

Figure 34: A Phase III Trial Comparison of GM301 and AGENDA


This study has co-primary endpoints of progression-free survival (PFS) and overall survival (OS). Secondary endpoints are durable response (DR), overall response rate (ORR), disease-control rate (DCR), and overall safety.

AGENDA Results. In October 2009, Genta announced that they had performed an initial analysis of the partial AGENDA data that were available at that time. While they observed that PFS, ORR, and DCR endpoint differences were numerically superior in the Genasense arm, they were not statistically significant increases. At that time, it was too early to evaluate two other endpoints, durable response (a secondary endpoint measuring response ≥ 6 months in duration) or overall survival, a co-primary endpoint.

In addition, a stringent futility analysis was conducted by the independent DSMB, who was charged with determining the conditional probability of observing a statistically significant difference in overall survival based on actual data that were available up to that point. Moreover, whereas futility analyses are commonly performed with conditional probabilities of 15-20%, this analysis, with an increase to 50% conditional probability, posed a substantial statistical hurdle, especially when combined using the prospectively specified assumed hazard ratio (HR) of 0.69 established prior to initiating the study. This analysis showed that the conditional power did exceed 50%, and the DSMB recommended that the study continue to completion in order to determine the overall survival benefit.

AGENDA Update at ASCO 2010. At the 2010 annual meeting of the American Society of Clinical Oncology (ASCO) in June, Genta presented some data and additional analysis from the AGENDA trial. These data included a pooled analysis from both the GM301 trial and AGENDA trial of early endpoints progression-free survival and overall response. Figure 35 summarizes the data presented, included the pooled analysis, which was created with data from a total of 1,085 patients from both studies, as well as data from intent-to-treat populations in both trials, and the low-normal LDH subset patients in the GM301 study.

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Figure 35: Results of Early Endpoints from AGENDA and GM301 Phase III TrialsOVERALL RESPONSE GM301GM301 AGENDA

Observed Intent-to-Treat Low-Normal LDH

Low-Normal LDH

Genasense/dacarbazine 13.5% 20.8% 17.2%dacarbazine alone 7.5% 7.2% 12.1%

p value 0.007 - 0.30

Pooled Analysis Intent-to-TreatIntent-to-Treat Low-Normal LDHGenasense/dacarbazine 14.5%14.5% 19.0%

DTIC alone 8.9%8.9% 9.9%p value 0.0040.004 0.002

PFS GM301GM301 AGENDA

Observed Intent-to-Treat Low-Normal LDH

Low-Normal LDH

Hazard Ratio 0.75 0.58 0.85p value 0.007 - 0.23

Pooled Analysis Intent-to-TreatIntent-to-Treat Low-Normal LDH

Hazard Ratio 0.780.78 0.71p value 0.00040.0004 0.0004


Discussing the Potential of Success for AGENDA

In order to evaluate Genasense’s chances of successfully hitting the overall survival endpoint in 1Q11, we conducted our own statistical analysis. The following analysis used the results from the GM301 study to formulate a range of assumptions. We used the following general assumptions for the AGENDA trial:

(a) Two-arm trial with 1:1 randomization (b) Total sample size is 314 subjects (c) Primary analysis will be carried out using a two-sided test at the 5% level of significance(d) Accrual time of 20 months (e) Follow-up time of 23 months

Because sample size and power considerations (when expressed in terms of the number of subjects) are dependent on the accrual and follow-up duration, assumptions (d) and (e) come from the following dates:

• First patient enrolled: 8/07 • Last patient enrolled: 4/09 • Study completion: 3/11

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There are several sources of assumptions concerning the treatment difference. We created four cases for use in our analysis based on data from the GM301 study. These cases expected treatment differences in the order from "most conservative" to "most aggressive":

Case 1: Medians of 9.0 and 7.8 months Case 2: Medians of 11.4 and 9.7 months Case 3: Medians of 12.3 and 9.9 months Case 4: Hazard ratio (HR) of 0.64

Case 1 comes from the Journal of Clinical Oncology (JCO) paper published in 2006 with results from the GM301 study. Case 2 also comes from the JCO paper. This is from a subgroup analysis of 508 patients with normal LDH levels. Please note that AGENDA recruited patients with low-normal LDH levels, so this assumption may not be entirely accurate. While interpreting the results from subgroup analyses is inherently risky, the big advantage of this subgroup is that it was prospectively defined (based on the randomization stratification). The sponsor decided before doing the trial that the randomization should be stratified this way; it is in essence, therefore, a pre-defined subgroup. Cases 3 and 4 are both derived from what many would consider a very speculative subgroup (the 274 subjects with low-normal LDH). The distinction between 3 and 4 is whether the two medians are used, or whether the hazard ratio (HR) (plus either one of the two medians) is used. We believe that the HR of 0.64 will be an accurate assumption to use, since it is obtained from the final overall survival results for the GM301 study.

A basic assumption that is used in the planning of studies with time-to-event endpoints is that there's equivalence between the HR and the ratio of medians. This can be illustrated with reference to Case 1. The HR estimated from the ratio of medians would be 7.8/9.0=0.867. In the final GM301 survival results, the HR for this case is reported as 0.87, which agrees to two decimal places. However, the HR estimated from Case 3 is 9.9/12.3=0.805. This is very different from the reported HR of 0.64. This sort of thing can happen, but it's usually indicative of something unusual in the survival distributions. If GNTA decided to design the AGENDA trial based on a HR of 0.64, then they would obtain a much smaller estimate of the required sample size than if they had used the two medians.

The power of the trial is "the probability that they will achieve statistical significance at the end of the study". Of course, the power depends on the assumptions concerning the survival distributions. The AGENDA trial is blinded, so there is no way to obtain that data. With that background, here are the power estimates for each of the four cases:

Figure 36: Power Estimates for 4 Treatment CasesCase Power

1 23%2 27%3 43%4 95%

Source: LifeSci Advisors Equity Research

As is usually the case, the power estimates are dependent upon the assumptions. If one believes that the estimated HR of 0.64 is an unbiased estimate of the HR that can be expected in the AGENDA trial, then the estimated power of AGENDA is greater than 90%.

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We also looked at this in an alternative way. The assumptions concerning accrual and follow-up may not be precise. In addition, a key assumption is that the subject accrual occurs uniformly over the accrual period. This is often not an accurate approximation. Some trials have a lot of early enrollment, and then enrollment slows down later on in the study. Other trials are just the opposite, with a slow ramp-up and then very high accrual near the end of the enrollment phase. As a result, another approach is to estimate the number of events (deaths in this case) required for specified power. For the same 4 cases, Figure 37 displays the total number of events (in both treatment groups combined) required in order to have 70%, 75%, 80%, 85%, and 90% power.

Figure 37: Number of Events Required for Specified PowerCase 70% 75% 80% 85% 90%

1 1206 1356 1534 1754 20532 947 1065 1204 1378 16123 524 590 667 763 8934 124 140 158 181 212

Source: LifeSci Advisor Equity Research

As one can see, a total sample size of 314 patients makes it impossible to have even 70% power for any of cases 1-3. With that being said, one must keep in mind that these cases have assumptions derived from the previously conducted study GM301, which is being used to predict the potential outcome of the AGENDA trial. The AGENDA trial is being stratified for patients with low-normal serum LDH. Therefore, the HR of 0.64, which comes from the low-normal LDH population survival results in the GM301 study, may be the most accurate case.

If the assumption of a HR of 0.64 is reasonable, there are more than enough subjects in the trial to obtain 90% or higher power as in case 4. The strongest argument for success of the AGENDA trial would be an argument that the "true" HR is very likely to be as large as 0.64. With this magnitude of HR, a study of 314 patients has very high power.

Making Comparisons: Dendreon’s (NASDAQ: DNDN) FDA-approved Provenge

On April 29th, 2010, after 15 years of research and development, FDA approved the first autologous cellular immunotherapy product, Provenge (sipuleucel-T) from Dendreon. Provenge is indicated for use in treatment of asymptomatic or minimally symptomatic metastatic, castrate-resistant (hormone-refractory) prostate cancer (CPRC). Provenge works by inducing an immune response against prostatic acid phosphatase (PAP), an antigen expressed in most prostate cancers. Provenge is a first-in-class product and represents a new treatment paradigm for patients with all forms of cancer.

Three Phase III trials that involved 737 patients were submitted to the FDA for approval. However, the primary study of interest was the IMPACT27 (IMmunotherapy for Prostate AdenoCarcinoma Treatment) trial, D9902B). This study was a multi-center, randomized, placebo-controlled study that evaluated 512 men with asymptomatic or minimally symptomatic metastatic CPRC. The study design for the IMPACT trial is described in Figure 38.

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27 ClinicalTrials.gov Identifier: NCT00065442

Figure 38: Dendreon’s Phase III IMPACT Trial Design for Provenge

Source: IMPACT Trial Presentation, Philip Kantoff, MD, Dana-Farber Cancer Institute

IMPACT-ful Results. The primary endpoint of the IMPACT study was overall survival. Provenge extended median survival in these men beyond two years and demonstrated a median improvement of 4.1 months compared to the control arm (25.8 months vs. 21.7 months). Provenge also reduced the risk of death by 22.5% (just 0.5% above the FDA’s 22% “reduction in risk of death” standard) when compared to the control group (HR= 0.775). Results from a related study28 D9901, in asymptomatic metastatic CPRC also demonstrated a survival advantage of similar magnitude as the IMPACT study.

PFS vs. OS Endpoints. There are several parallels that can be made between Genasense’s and Provenge’s clinical programs. Both products target treatment tumors that have historically been difficult to get new products approved for. Both offer unique mechanisms of action (MOAs) to combat an aggressive disease and have shown positive results in patient endpoints. IMPACT was a large trial with the primary endpoint of overall survival and so is AGENDA. Additionally, Provenge did not improve progression-free survival (PFS) in IMPACT, but the overall survival (OS) endpoint was met.

BMS’s recent ipilimumab data in metastatic melanoma is another example of a drug that hit an OS (45.6%) endpoint while missing on PFS (57.7%). Combined with FDA’s analysis showing a systematic bias in the PFS data may have created an error in the strongly positive PFS signal in GM301, we are cautiously optimistic that the missed PFS endpoint in AGENDA may not be of concern particularly knowing what we know about PFS measurements in melanoma (ilipimumab experience), and that there is still a reasonable likelihood that the AGENDA will hit on OS.

OTHER NEW DRUGS IN DEVELOPMENT FOR TREATMENT OF MELANOMA

BRISTOL-MYERS SQUIBB (NYSE: BMY): IPILIMUMAB. During this year’s ASCO meeting and on June 5th in The New England Journal of Medicine29, Bristol-Myers Squibb presented favorable Phase III data for their lead drug candidate to treat patients with metastatic melanoma, ipilimumab. This human mAb candidate blocks cytotoxic T-lymphocyte-associated antigen 4 (CTLA-4) to induce an antitumor T-cell response.

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28 ClinicalTrials.gov Identifier: NCT0113370429 N Engl J Med 2010; 363:711-723

Ipilimumab was originally discovered by Medarex, who BMS acquired in 2009. The drug has previously been tested as monotherapy and in combination with dacarbazine, with unsatisfactory results in both cases that delayed the original plan to file a BLA in 2008. The latest study tests the drug alone and in combination with vaccine gp100 vs. gp100 alone.

Phase III Ipilimumab Study 020 Design. This Phase III study had a total of 676 metastatic melanoma patients with late-stage, inoperable tumors. This global study was randomized, double-blinded and enrolled patients with unresectable Stage III or IV metastatic melanoma that have received prior therapies. Patients were required to be HLA-A*0201 positive because the gp100 vaccine component specifically targets those patients. Patients were randomized 3:1:1 to receive:

1. Ipilimumab + gp100 (3 mg/kg and 1mg/kg every three weeks for four doses (n=403), or2. Ipilimumab (3 mg/kg every three weeks for four doses) + placebo (n=137), or 3. Gp100 + placebo (n=136)

The primary endpoint was overall survival (OS) (ipilimumab + gp100 vs. gp100) and secondary endpoints included OS comparison (ipilimumab alone vs. gp100), progression free survival (PFS), best objective response rate (BORR) at Week 24, disease control rate (DCR) and safety.

Ipilimumab Study 020 Results. Data from the 020 study were quite impressive, and were a key component in the media coverage surrounding ASCO this year, primarily because this is the first time an agent has shown a significant survival benefit for malignant melanoma (Figure 39). Interestingly, median PFS is very similar in all three arms of the study, yet there are significant differences for reduction in risk of progression for both ipilimumab arms relative to the gp100 alone arm. This is because a small group of patients received a very strong benefit.

Figure 39: Data Highlights from Ipilimumab 020 Study

gp100 alone Ipilimumab monotherapy

Ipilimumab + gp100

Median survival(hazard ratio vs. gp 100)

6.4 monthsN/A

10.1 months(0.66, p=0.003)

10 months(0.68, p<0.001)

% survival at time points12, 18, 24 months

25.3%16.3%13.7%

45.6%33.2%23.5%

43.6%30.3%21.6%

Median PFS 2.76 months 2.86 months 2.76 monthsReduction in risk of

progression vs. gp100(hazard ratio)

N/A 36%(0.64, p<0.001)

19%(0.81, p<0.05)

%PFS at 12 weeks 48.5% 57.7% 49.1%Source: N Engl J Med 2010; 363:711-723

As seen in previous trials, ipilimumab did demonstrate some serious and potentially fatal side effects. 60% of patients treated with ipilimumab experienced immune-related events, which were the most common type, while only 32% of patient in the gp100 cohort experienced these. Grade 3 or 4 immune-related adverse events were experienced in 10-15% of patients on ipilimumab while only 3% of the gp100 vaccine alone experienced these. There were also 14 deaths (8 from the combination arm, 4 from the ipilimumab monotherapy arm, and 2 from the control arm) related to the study drugs and half of those were associated with immune-related adverse events.

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While the 020 study was performed only in HLA-A*0201 positive patients because of the gp100 component of the study, there has been evidence from previous studies that ipilimumab is also active in non-carriers. Even if FDA were to initially approve the drug only in patients carrying this mutation, we believe there could be substantial off-label use in non-carriers.

Ipilimumab Granted Priority Review. In August 2010, FDA accepted the BLA for ipilimumab and granted the application priority review designation. FDA requested some additional data analysis, which was considered by FDA to be a major amendment requiring additional time to review, so they have recently announced a revised FDA action date of March 26, 2011.

ROCHE (SIX: ROG): RG7204 (PLX4032). This small molecule drug is being developed by Roche and Plexxikon and is a BRAF inhibitor that selectively targets the V600E mutant of BRAF for the treatment of malignant melanoma. It is a potential first-in-class inhibitor of cancer-causing BRAF mutations. These mutations occur in ~50% of people with advanced melanoma.

On August 25th, 2010 they reported data from a Phase I study of RG7204 that included both a dose escalation phase in several tumor types, and an extension phase in melanoma at the maximum tolerated dose (MTD). RG7204 shrank tumors in 81% of the 32 patients in the extension phase, all of whom had malignant melanoma carrying the V600E mutation. Among the patients in the extension phase, two patients had complete responses and 24 others experienced partial responses (30% reduction in tumor size). However, the drug’s effects appear to be temporary so the companies are considering developing this drug in combination with another drug, analogous to the AIDS cocktails used to treat HIV. Following the success of the initial study, the companies have initiated simultaneous Phase II and Phase III trials ongoing, outlined in Figure 40.

Figure 40: Ongoing Clinical Trials for RG7204

Stage StudyName

Patients Design Size Primary Endpoint

Study Completion

Phase II BRIM2 Second line Single arm 132 ORR Sept. 2010

Phase III BRIM3 First lineOpen label,

randomized vs. dacarbazine

500-1000 OS March 2014

Source: www.clinicaltrials.gov

On November 4th, both partners announced that RG7204 (PLX4032) met the primary endpoint of overall response rate in the Phase II BRIM2 trial in 132 patients with previously-treated BRAF V600E mutation-positive metastatic melanoma. The twice-daily RG7204 achieved an ORR of 52%, which Roche said exceeds the pre-defined threshold of 30%. In the data presented at the Melanoma Research Meeting in Sydney, RG7204 produced 66 partial response and 39 cases of stable disease with a median duration of response of 6.8 months and median PFS at 6.2 months. Historically, the PFS for melanoma patients with the BRAF V600E mutation has been approximately 2 months. Median overall survival has not yet been reached. With these promising Phase II results, we look forward to seeing the outcome from their Phase III study.

GLAXOSMITHKLINE (NYSE: GSK): 241502, MAGE-A3, MEK & BRAF INHIBITORS. 241502 is a domain antibody targeted multi-component vaccine for treatment of malignant melanoma and is in Phase I clinical trials. The other compound GSK is developing for treatment of

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http://www.clinicaltrials.gov

http://www.clinicaltrials.gov

melanoma is MAGE-A3 and it is a recombinant antigen-specific cancer immunotherapeutic. This vaccine is in Phase III development and mobilizes the immune system to fight the disease.

Their MEK and BRAF inhibitors (on their own and in combination) have shown promise for the treatment of malignant melanoma in early clinical trials. Scientific abstracts released for ASCO this year showed that 18 out of 30 patients with certain gene mutations and were treated with the BRAF inhibitor experienced a reduction in tumor volume. The MEK inhibitor compound showed 5 partial responses with greater than 50% tumor reduction in 20 evaluable melanoma patients.

Melanoma Drugs Competitive Landscape

The outlook for patients with advanced melanoma has always been bleak with available therapies having limited efficacy. Furthermore, current therapies were mainly approved on the basis of response rates, with no evidence of an improvement in overall survival. As FDA’s criteria have evolved, potential therapeutics must now demonstrate a significant improvement in overall survival, which is quite difficult to do. Receiving FDA approval will be the most significant roadblock here for any potential melanoma drug.

Bristol Myer’s Squibb’s ipilimumab is the melanoma drug candidate to keep a close eye on. With ipilimumab’s positive Phase III results at the recent ASCO meeting and its FDA Priority Review designation, the drug could receive FDA approval as soon as 1Q’11 next year and be in doctor’s hands shortly thereafter. Based on the efficacy data to date and despite a less than favorable safety profile, ipilimumab is situated to be the next standard of care in many advanced melanoma patients. If approved, the dynamics of the entire market would change considerably. However, there is some concern that because the ipilimumab second line trial was conducted using a vaccine (gp100) that may have partly compromised outcomes of the control group, than using either an active comparator or a placebo. Also interesting to note is the fact that, BMS/Medarex completed accrual in 2008 to a 1st-line study of ipilimumab compared with DTIC (similar to the Genta trials, using what we believe is a superior control arm in the study design). Given the prolonged delay in data release, we feel there is a possibility that this trial has not shown a benefit, which complicates both the approval process and market adoption for ipilimumab.

Should Genasense show an overall survival benefit in the AGENDA trial, particularly if the magnitude of benefit is in the range of that observed with ipilimumab, then we would expect to see successful commercial adoption of Genasense. If the OS data are positive, we expect Genta to re-file its withdrawn NDA in melanoma during 2011. It should be noted that Genta has now conducted two very high quality studies, and that all endpoints in both studies have pointed in the same positive direction. The drug’s side-effect profile has been well-characterized and is well within the range of other oncology products. Thus, while substantial clinical risk remains until the final Phase III data are revealed, we believe that the regulatory risk – if the survival data are positive – should be relatively low.

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Gallium Compounds: Potent, Bone-Strengthening Drugs

Ganite, Genta’s gallium nitrate injection was approved for cancer related hypercalcemia in 1991, and is now off-patent. The currently marketed formulation is intravenous, and is primarily used in an acute setting in hospitalized cancer patients with symptomatic hypercalcemia that has not responded to hydration therapy. Given the inconvenience of administration, current use is largely confined to patients who are resistant to bisphosphonates. Genta is also developing a new oral formulation of gallium, that could potentially be used to treat bone metabolism disorders ranging from a broader group of patients suffering from cancer-related hypercalcemia, to diseases with less extreme bone loss such as bone metastasis, Paget’s disease and osteoporosis (Figure 41). A unique aspect of this new formulation is that it could be used for extended periods at low doses to maintain bone integrity and prevent complications associated with loss of bone mass (fractures and pain). The oral formulation will increase ease of use in patients, in addition to being more convenient and cost effective via elimination of physician administration.

Figure 41: Genta Clinical Development Strategy for Oral Gallium


Mechanism of Action. Gallium inhibits calcium resorption from bone, thereby reducing bone loss. Pre-clinical evidence to date suggests that gallium’s mechanism of action is multi-factorial and differentiated from other current therapies to treat bone loss. Gallium preferentially accumulates in metabolically active regions of the bone to inhibit osteoclast-mediated bone resorption and favorably altering bone mineral composition and properties as shown in Figure 42.

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Figure 42: Gallium Mechanism of Action


The active component in these drugs, ionic gallium (Ga3+), is a trivalent metal that shares certain chemical characteristics with Fe3+, Al3+ and In3+, and has potent anti-resorptive activity as well as some anabolic effects. The compound is reversibly incorporated into areas of high metabolic skeletal activity (i.e., metaphyseal and epiphyseal regions) where remodeling occurs, and synchrotron-generated x-ray microscopy contour maps of animals treated for 14 days confirm this. On the other hand, low levels of gallium are found in mid-cortical regions where metabolic activity and calcium turnover are low.

Osteoclasts, the cells responsible for bone resorption, are the cells regulated by gallium. The process of normal bone remodeling is outlined below in Figure 43. Osteoclasts promote bone resorption via acidification of mineralized bone matrix. The principal mechanism of action for this drug is thought to be its ability to decrease the activity of proton pumps in osteoclasts. Specifically, gallium has been shown to inhibit ATPase-dependent hydrogen ion transport in osteoclasts, which in turn inhibits acidification of mineralized bone matrix and significantly reduces resorption. In vivo, gallium promotes hydroxyapatite maturation by producing bone particles that have increased bone density, and larger or more perfect crystallites with greater calcium and phosphate content and lower carbonate content. These changes have been associated with substantial decrease in the solubility of treated bone in acid buffer solution after just two weeks of treatment. Lastly, radiolabeled calcium injected into gallium-treated rodents showed accretion of new calcium into bone relative to control. These data suggest gallium might also have mild anabolic effects and increase mineralization of newly forming bones. Gallium has also been show to enhance the content and synthesis of Type-I collagen, which is a major protein found in skeletal matrix. Put simply, gallium is a clinically potent

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active ingredient to treat diseases associated with decreased bone density due to its ability to inhibit bone resorption and possibly enhance new bone formation.

Figure 43: Normal Bone Remodeling

Source: Mundy, GR. In Mundy (ed.)., Calcium Homeostasis: Hypercalcemia and Hypocalcemia. (1989).

The overall concept of using medicinal therapies as adjuncts to traditional anticancer treatment to strengthen bone against erosion is well established. The ideal therapy would both inhibit further bone loss and strengthen the bone that has been eroded. Gallium appears to have the ideal mechanism of action to addresses both of these needs. To date, multiple clinical trials have been completed with the active ingredient gallium, which was administered parenterally as a citrated solution of gallium nitrate Ganite.

Pre-Clinical Data. Drug disposition studies have been completed for gallium in animal models. The results of these studies were favorable as they showed that gallium has a long plasma half-life of up to 338 hours in dogs and achieves a 15% tissue concentration (Figure 44).

Figure 44: Gallium Drug Disposition Data

Animal Half-life (hours)

Tissue Concentration

Rat 101 12%Dog 338 15%


Ionic gallium alone is poorly absorbed in the GI tract most likely due to the formation of insoluble complexes. To overcome this issue in the development of oral formulations, the gallium ion is protected by complex anionic counter ions . The combination of these counter ions with ionic gallium prevent insoluble complexes from forming in the GI tract and improves passive transcellular transport and absorption.

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Unmet Need: Hypercalcemia in Cancer. Cancer-related hypercalcemia is a common problem in hospitalized patients with malignancy. It may affect 10-20%30 of patients with cancer, and can be life-threatening. Different types of malignancy vary in their propensity to cause hypercalcemia. A higher incidence has been observed in patients with non-small cell lung cancer, breast cancer, multiple myeloma, kidney cancer, and cancer of head and neck. Hypercalcemia of malignancy is the result of an imbalance between the net resorption of bone and urinary excretion of calcium.

Patients with extensive osteolytic bone metastases frequently develop hypercalcemia. This type of hypercalcemia is common with primary breast cancer. Some of these patients have been reported to have increased renal tubular calcium resorption. Breast cancer cells have been reported to produce several potential bone-resorbing factors which stimulate the local osteoclast activity.

Humoral hypercalcemia is common with the solid tumors of the lung, head and neck, kidney, and ovaries. Systemic factors (e.g., PTH-rP) produced either by the tumor or host cells have been implicated for the altered calcium fluxes between the extracellular fluid, the kidney, and the skeleton. About 30% of patients with myeloma develop hypercalcemia associated with extensive osteolytic lesions and impaired glomerular filtration. Myeloma cells have been reported to produce local factors that stimulate adjacent osteoclasts.

Signs, Symptoms and Diagnosis of Hypercalcemia. Hypercalcemia may produce a spectrum of signs and symptoms including: anorexia, lethargy, fatigue, nausea, vomiting, constipation, dehydration, renal insufficiency, impaired mental status, coma and cardiac arrest. A rapid rise in serum calcium may cause more severe symptoms for a given level of hypercalcemia, so absolute calcium blood levels do not always correlate with level of symptoms. Since calcium is bound to serum proteins, which may fluctuate in concentration as a response to changes in blood volume, changes in total serum calcium (especially during rehydration) may not accurately reflect changes in the concentration of free-ionized calcium. In the absence of a direct measurement of free-ionized calcium, measurement of the serum albumin concentration and correction of the total serum calcium concentration may help in assessing the severity of hypercalcemia. The patient’s acid-base status should also be taken into consideration while assessing the degree of hypercalcemia.

Treating Hypercalcemia in Cancer Patients. Initial therapy for patients with hypercalcemia includes replenishment of extracellular fluid, restoration of intravascular volume, and maintenance of saline diuresis. Patients tend to be severely dehydrated and may require high volumes of fluid, and must therefore be monitored closely. In most patients, it is necessary to use a pharmaceutical agent to inhibit the effects of abnormally increased osteoclastic resorption. By using a pharmaceutical agent to do so, long-term control and maintenance of serum calcium may be achieved. When selecting an anti-hypercalcemic agent, factors that must be taken into account are severity of the hypercalcemia, patient’s renal function, bone marrow reserves available, and anticipated response to antineoplastic agents.

Bisphosphonates including zoledronic acid, pamidronate and etidronate are commonly used, and have an onset of action ranging from 24 to 48 hours, with maximal effect at around 72 hours. Gallium can be even more effective (Figure 45), though its maximal drug effect occurs days after administration, so patients must be monitored and taken off therapy when normocalcemia is achieved. Calcitonin has a rapid onset of action and is often given first, in combination with the

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30 Semin Oncol. 1990 Apr;17(2 Suppl 5):26-33.

slower acting, but more efficacious drugs. In severe cases, hemodialysis can be used, particularly in patients who have neurologic symptoms but are hemodynamically stable.

Figure 45: Efficacy of Ganite Compared to Other Agents in Cancer-Related Hypercalcemia


Genta’s Oral Formulation of Gallium

Genta has developed and tested an initial oral formulation of gallium called G4544(a) in collaboration with Emisphere Technologies. They completed a single-dose Phase 1 study of an initial formulation of this new drug, the results of which were presented in 2008. They are currently evaluating other formulations, including one known as G4544(b). Once selected, they plan to evaluate whether an expedited regulatory approval may be possible.

Although current sales of Ganite, now off patent, are low, we believe the product has strategic importance for their franchise of gallium-containing compounds.

Future Opportunities for Oral Gallium

Gallium has clearly validated activity for reversing bone loss and treating hypercalcemia. There are several large disease areas where an oral gallium drug could serve an unmet medical need, including:

Bone Metastases. Bone is one of the most common sites of cancer metastases. This problem is particularly prevalent in the most common types of cancers, including myeloma, and cancers of the breast, prostate, lung, and head and neck. Bone metastases lead to erosion and loss of bone strength. Common complications include pain, immobility, fractures, spinal cord compression, paralysis, and hypercalcemia.

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Paget's Disease. This condition is quite prevalent in older persons and is characterized by disordered bone formation and resorption. These processes eventually lead to pain, hearing loss, skeletal deformities, and fractures.

Osteoporosis. This disorder is the most common bone disease, and it affects both men and women. Unlike hypercalcemia (which can be acutely life-threatening within several days), bone loss in osteoporosis occurs over a period of years until bone strength is sufficiently reduced such that the risk of sudden fracture becomes very high. The most common sites of osteoporotic fractures are the hips, wrists, and vertebrae.

These disease areas affect large numbers of patients in established markets (Figure 46)

Figure 46: Oral Gallium Opportunities: Large Patient Populations

Source: IntrinsiQ

In addition to the hypercalcemia opportunities, several academic investigators have shown interest testing Ganite against serious infections in patients with advanced cystic fibrosis. A trial is currently ongoing at the University of Washington and at the University of Iowa testing the drug in these patients. Gallium has been shown to have anti-bacterial activity in vitro, and cystic fibrosis patients dosed with Ganite have high concentrations of gallium in their sputum, above the levels found in their blood, so there is hope that Ganite may help patients with these serious infections.

Intellectual Property & Licensing

TESETAXEL IP AND LICENSE

Tesetaxel, its potential uses, composition, and methods of manufacturing are covered under a variety of patents licensed exclusively from Daiichi Sankyo, Inc. Genta believes that composition-of-matter claims on tesetaxel extend to at least 2020 in the U.S. and Europe and to 2022 in Japan. The composition patents are eligible for term extensions in the U.S. and Japan, and there is a 10-year period for exclusivity in the EU following approval of any NCE. A number of other patents have

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been filed worldwide for this compound. Genta itself has filed additional patent applications that cover manufacturing processes and intermediate compounds related to tesetaxel.

Daiichi Sankyo License for Tesetaxel. Genta’s license agreement with Daiichi Sankyo Company, Limited, dated March 7, 2008, has a term that continues until they have no remaining royalty payment obligations to Daiichi Sankyo. Moreoever, Daiichi Sakyo has not retained any “clawback” rights to the compound or its IP. The royalty rate ranges in the low to mid teens of aggregate annual net sales, on a sliding scale depending on sales volume. Genta also may be required to pay certain milestone payments in the aggregate of $68,000,000, chiefly contingent upon achieving a number of regulatory approvals. From incepetion, aggregate payments made to Daiichi Sankyo under the agreement through September 30, 2009 were $3.5 million.

GENASENSE IP AND LICENSES

University of Pennsylvania. Genta has licensed 10 U.S. patents relating to the composition of Genasense. The Company acquired exclusive rights from the University of Pennsylvania to antisense oligonucleotides directed against the Bcl-2 mRNA, as well as methods of their use for the treatment of cancer. Genta’s license agreement with the University of Pennsylvania, dated August 1, 1991, as most recently amended on October 23, 2003, has a term for the royalty obligations. They are required to pay royalties until the later of 12 years from (i) the date of first commercial sale of licensed product or (ii) the date of expiration of the last to expire licensed patent with a valid claim covering the licensed product (which is currently scheduled to expire in 2015). They believe this patent may be eligible for up to 5 years of extension under Waxman-Hatch provisions, (i.e., to 2020). Additional patents have been licensed from the U.S. National Institutes of Health (NIH) that are jointly owned by ISIS, Inc. The NIH patents, which relate to uses of oligonucleotides that regulate the expression of certain oncogenes, have limited times to expiration, although they may also be subject to Waxman-Hatch extensions. The patent term extensions noted for tesetaxel (above) in various geographies also apply to Genasense.

The royalty rate that Genta may be obligated to pay to the University of Pennsylvania ranges from 2% to 4% of the net sales, with an additional royalty for compensation received from any sublicense of rights under this agreement. Genta also may be required to pay certain aggregate milestone payments and certain additional fees in the aggregate of $4,770,000 contingent upon certain preclinical, clinical and regulatory events. The aggregate payments Genta made to the University of Pennsylvania under this agreement from the date of execution of the agreement through December 31, 2009 are approximately $1.3 million.

Genta has also filed a number of U.S. patent applications relating to methods of using Genasense expected to expire in 2020 and 2026, with approximately 50 corresponding foreign patent applications and granted patents. In addition, Genasense will have status as an Orphan Drug in both the U.S. and in the EU for its major diseases, which are associated with 7 and 10 years of marketing exclusivity, respectively. In the EU, Genasense will also enjoy 10 years of exclusivity as a “New Chemical Entity”.

IP ON GALLIUM-CONTAINING COMPOUNDS

The patents covering Genta’s currently marketed parenteral gallium product, Ganite, expired in 2005, but the company has been very active in pursuing new intellectual property to cover their new oral formulations of gallium. Two issued patents, US 7,354,952B2 and US 7,456,215B2, provide for

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the therapeutic use of gallium complexed with various agents that increase the oral bioavailability of the active ingredient and yield superior pharmacokinetics compared with the active ingredient used alone. International applications similar to these patents are pending worldwide, and several additional applications that address other compositions and uses have been filed in the U.S. and other territories. These patents and filings provide for claims of compositions and uses of gallium compounds that can be taken by mouth over extended periods for treatment of skeletal diseases as well as other indications.

TECHNOLOGY IP

Genta owns or has licensed several patents and applications to numerous aspects of oligonucleotide technology, including novel compositions of matter, methods of large-scale synthesis, methods of controlling gene expression and methods of treating disease. Genta’s patent portfolio includes approximately 65 granted patents and 66 pending applications in the U.S. and foreign countries.

Financial Discussion

In March and April, 2010 Genta raised $26MM in gross proceeds through a private placement of convertible notes and warrants. This financing should provide ample support for over a year of expanded operations, which includes tesetaxel’s Phase II studies and the final OS survival results from the AGENDA study. On the dates that Genta completed its financings there were an insufficient number of authorized shares of common stock in order to permit conversion of all of the notes and warrants. GAAP accounting required the Company to determine fair value of the beneficial conversion feature of its notes and warrant liabilities and use mark-to-market accounting until there were sufficient shares to accommodate the conversion of all the instruments. Similar accounting was used in the prior-year period. In the second quarter of 2010, Genta reported net income of $25.4MM, (or a net loss of $15.6MM excluding mark-to-market income of $41.0MM), compared to a net loss of $43.1MM in 2Q09, (or a net loss of $16.4MM excluding mark-to-market expense of $26.7MM). Total operating expenses for the quarter were $4.25MM, including $2.42MM in R&D expenses. Genta recorded net product sales from their marketed product Ganite of $110,000 for the first 6 months of 2010. For the year ended December 31st, 2009, the net loss was $86.3MM (or a net loss of $59.6MM excluding mark-to-market expense of $26.7MM), compared to a net loss of $505.8MM the year prior (or $43.8MM excluding mark-to-market expense of $462.0MM). At the end of the year Genta had cash and cash equivalents totaling $1.2MM. Net cash used in operating activities for the year was $21.5MM, which represents an average monthly outflow of $1.8MM.

At June 30th, 2010, Genta had cash and cash equivalents totaling $15.6MM. Net cash used in operating activities for the prior 6 months was $6.3MM and Genta expects that the average net monthly cash outflow will be approximately $1.2MM for the remainder of 2010.

At June 30th, 2010, Genta had face value of convertible notes of $34.7MM convertible into 34.7MM shares of common stock, Debt warrants and warrants of $10.6MM convertible into 10.6MM common stock and Purchase rights of $13.2MM convertible into 13.2MM common stock. The notes had a conversion price reset built in and on October 11, the notes conversion price was reset to $0.0396, resulting in the potential conversion of 1.4B shares. There is another conversion price reset in December 2010. With the reduction in the conversion price, Genta’s noteholders have converted portions of their notes, resulting in the Company reporting 86MM outstanding shares on October 22, 2010.

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In addition, on November 5, 2010, the Company filed a preliminary proxy with the SEC for a Special Meeting of Stockholders to vote on two measures:

1. To provide for an increase in the authorized number of shares from 6 billion to 100 billion;2. To authorize the Board of Directors to effect up to two reverse splits of the Company's Common Stock at any time prior to December 31, 2011.

Management Team

Raymond P. Warrell, Jr., M.D.Chairman and Chief Executive Officer

Raymond P. Warrell, Jr., M.D. has been Chief Executive Officer and a member of the Board since December 1999, and Chairman since January 2001. From 1978 to 1999, Dr. Warrell worked in positions of increasing responsibility as a full-time faculty member and attending physician at the Memorial Sloan-Kettering Cancer Center in New York. At Sloan-Kettering, he held tenured positions as Member, Attending Physician, and Associate Physician-in-Chief. He was also a tenured Professor of Medicine at the Cornell University Medical College.

Dr. Warrell also has more than 30 years of development and consulting experience in pharmaceuticals and biotechnology products. He was a co-founder and chairman of the scientific advisory board of PolaRx Biopharmaceuticals, Inc., which originated Trisenox®, a drug for the treatment of acute promyelocytic leukemia.

Dr. Warrell holds or has filed numerous patents and patent applications for biomedical therapeutic or diagnostic agents. He has published more than 100 peer-reviewed papers and has authored more than 240 book chapters and abstracts, most of which are focused upon drug development in oncology.

Dr. Warrell is a member of the American Society of Clinical Investigation, the American Society of Hematology, the American Association for Cancer Research and the American Society of Clinical Oncology. Among many awards, he has received the U.S. Public Health Service Award for Exceptional Achievement in Orphan Drug Development from the Food and Drug Administration. Loretta M. Itri, M.D., F.A.C.P.President, Pharmaceutical Development and Chief Medical Officer

Dr. Itri is President, Pharmaceutical Development, and Chief Medical Officer. Previously, Dr. Itri was Senior Vice President, Worldwide Clinical Affairs, and Chief Medical Officer at Ortho Biotech Inc., a Johnson & Johnson (JNJ) company.

As the senior clinical leader at Ortho Biotech and previously at JNJ’s R.W. Johnson Pharmaceutical Research Institute (PRI), she led the clinical teams responsible for NDA approvals for Procrit® (epoetin alpha), that company’s largest single product. She had similar leadership responsibilities for the approvals of Leustatin®, Renova®, Topamax®, Levaquin®, and Ultram®.

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Prior to joining JNJ, Dr. Itri was associated with Hoffmann-La Roche, most recently as Assistant Vice President and Senior Director of Clinical Investigations, where she was responsible for all phases of clinical development programs in immunology, infectious diseases, antivirals, AIDS, hematology, and oncology.

Under her leadership in the areas of recombinant proteins, cytotoxic drugs and differentiation agents, the first successful Product License Application (PLA) for any interferon product Roferon-A® (interferon alfa) was compiled.

Dr. Itri has published more than 60 peer-reviewed original articles and book chapters in the field of oncology and has served as a member of the NIH Board of Scientific Counselors in the Division of Cancer Treatment as well as the Division of Cancer Prevention and Control. Gary SiegelVice President, Finance

Gary Siegel joined Genta in May 2003 as Director, Financial Services, was appointed Senior Director, Financial Services in April 2004 and was appointed Vice President, Finance in September 2007. During his tenure at Genta, Mr. Siegel has been responsible for the day-to-day accounting and financial operations of the Company including public and management reporting, treasury operations, planning, financial controls and compliance.

Prior to joining Genta, he worked for two years at Geller & Company, a private consulting firm, where he led the management reporting for a multi-billion dollar client. His twenty-two years of experience in the pharmaceutical industry include leadership roles at Warner-Lambert Company and Pfizer Inc., where he held positions of progressively increasing levels of responsibility including Director, Corporate Finance and Director, Financial Planning & Reporting. Edward C. Spindler, Jr.Associate Vice President, Project Management and Technology Development

Edward C. Spindler, Jr., is Associate Vice President, Project Management and Technology Development. Prior to joining Genta in 2003, Mr. Spindler was lead biopharmaceutical analyst for Rosemont Research, a biopharmaceutical consulting company providing pharmacokinetic and pharmacodynamic analysis services to both large and mid-sized companies. Previously, he also held positions of increasing responsibility at AT&T Communications and Nortel Networks. Mr. Spindler is a licensed respiratory therapist. He received a B.S. from Rutgers University and an M.B.A. from the Wharton Business School. Jane Z. Wu, Ph.D., Associate Vice President, Data Management and Statistics

Jane Z. Wu, Ph.D. is Associate Vice President, Data Management and Statistics. Prior to joining Genta in 2002, Dr. Wu was Director of Biostatistics at Forest Laboratories. Previously, she was a Manager of Biostatistics at the Janssen Research Foundation (Johnson & Johnson). Dr. Wu has more than 18 years of pharmaceutical industry experience, having worked on products in a broad range of therapeutic areas including Oncology, CNS, Infectious Diseases, Cardiovascular, Respiratory, and GI. She has prepared multiple regulatory submissions for the Food and Drug

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Administration (FDA) and the European Medicines Agency (EMA). Dr. Wu received a B.S. and M.S. in Mathematics from Nankai University and a Ph.D. in Statistics from the University of Cincinnati.

Risk to an Investment

An investment in Genta Incorporated is a high-risk investment. Genta currently has one marketed product and is currently pursuing the clinical development and marketing approval of three agents, Genasense, Tesetaxel, and Oral Gallium. The two developmental stage agents, Genasense and Tesetaxel represent the primary value drivers for Genta. Failure of either of these agents to successfully complete their pivotal clinical studies, achieve regulatory approval by FDA or EMA, or achieve commercial success, once approved, could materially negatively impact Genta’s stock price. Additionally, Genta is not profitable and may have insufficient funds to complete the development and commercialization of their products. Genta may need to seek additional financing from the public markets, which may result in dilution to existing shareholders and negatively impact Genta stock price.

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DISCLOSURESThe material presented in this report is provided for information purposes only and is not to be used or considered as a recommendation to buy, hold or sell any securities or other financial instruments. Information contained herein has been compiled by LifeSci Advisors and prepared from various public and industry sources that we believe to be reliable, but no representation or warranty, expressed or implied is made by LifeSci Advisors, its affiliates or any other person as to the accuracy or completeness of the information. Such information is provided with the expectation that it will be read as part of a broader analysis and should not be relied upon on a stand-alone basis. Past performance should not be taken as an indication or guarantee of future performance, and we make no representation or warranty regarding future performance. The opinions expressed in this report reflect the judgment of LifeSci Advisors as of the date of this report and are subject to change without notice. This report is not an offer to sell or a solicitation of an offer to buy any securities. The offer and sale of securities are regulated generally in various jurisdictions, particularly the manner in which securities may be offered and sold to residents of a particular country or jurisdiction. Securities discussed in this report may not be eligible for sale in some jurisdictions. To the full extent provided by law, neither LifeSci Advisors nor any of its affiliates, nor any other person accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No LifeSci Advisors directors, officers or employees are on the Board of Directors of a covered company and no one at a covered company is on the Board of Directors of LifeSci Advisors. Neither the analyst who authored this report nor any of LifeSci Advisors’ directors, officers, employees invest in the securities of the company that is the subject of this report. LifeSci Advisors has been compensated by the company that is the subject of this report for this and future research reports, investor relations services, and general consulting services.

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