Phylogica Ltd2008 Annual General Meeting

www.phylogica.com

Harry Karelis, Deputy Chairman

26th November 2008For

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Corporate Snapshot

Phylogica is a biotechnology company that has developed a unique proprietary class of protein/peptide biologic drug – Phylomer® peptides.

Phylomer peptides exhibit competitive therapeutic, manufacturing and commercial advantages over smallmolecules, over other more traditional targeted biologics such as proteins, monoclonal antibodies and most current therapeutic peptides.

Phylomer peptides are suitable for a wide range of diseases targeting proteins and their interactions. The Company is applying its unique technology to develop peptide-based therapies for inflammatory diseases and is exploring other indications such as infectious diseases and cancer via partnerships.

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Macro Issues

Global sentiment at depressed levels

Capital markets factoring in deep, long recessionary environment

Risk is being avoided by investors – across all sectors

Ability of companies to raise capital at constrained levels

Managing expenses very aggressively

Focusing spend on core areas

Deferring hire of new CEOFor

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Year in ReviewAnnounced a re-focus early 2008 with the sole aim of generating a data-pack supporting our claims over the potential of our technology

Significantly positive data has been generated providing a large body of evidence that our technology can be consistently used to generate drug leads of interest

This data has led to a re-engagement with big pharma and biotech players at a completely different level to the past

Working towards converting this enthusiasm into deals and relationships

The prospect of Phylogica being acquired to fill key technology gaps has never been stronger

Internalised Dynamic Microbial due to very exciting results being achieved

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Sector Dynamics - Big Pharma have a problem with renewing pipeline

Drug pipelines drying up

Blockbuster drugs coming off patent

Traditional chemistry approaches not generating new drugs

No real culture or skill set in developing drugs via novel techniques

Some companies missed the ‘biologics revolution’ of antibodies, proteins and peptides and are playing catch-up

Pharmaceutical industry is crying out for new sources of drugs and increasingly partnering and acquiring smaller companiesFor

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What Big Pharma is doing to address their pipeline problem

Initially, merging with other big pharma to cut costs and extract synergies. Followed by partnering with smaller groups including biotech companies. Now we are seeing extensive corporate activity amongst small to medium size biotech companies.

The success of protein drugs such as Enbrel, Remicade and Herceptin is fueling the search for new protein-based therapeutic agents in many chronic diseases

Protein-based products exhibit exquisite specificity and ability to affect unique biological functions. Additionally they provide a source of cost-effective, safe and reliable drugsF

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M&A activity in protein/peptide-based field

Eight acquisitions of companies that developed protein/ peptide-based therapeutics within the last two year.

Companies that have developed new classes of peptide/ protein based drug have been acquired for an average valuation of A$450M

* All companies with the exception of CAT were at pre-clinical stage of development at the time of acquisition

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Peptides: one of the fastest growing classes of drugsApproximately 38 therapeutic peptides have reached the market with sales of US$8.7 billion1

1 – Bionest Partners July 2007 “Overview of the Peptide Market”

Examples: Goserelin (US$1.1 billion in 2007), Exenatide (US$621 million in 2007), Teriparatide, Bivalirudin, Eptifibatide, Enfuvirtide

Huge market for peptide-based product for multiple human diseases ranging from inflammatory diseases, cancer, infectious agents, diabetes

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Drug-like properties of PhylomersPhylogica has shown that its platform can generate phylomer peptides with drug like properties:

• Specificity• Potency• Stability• Flexible manufacturing (allowing for chemical or recombinant

approaches)

Phylogica has already created and validated potential therapeutic drug leads in vitro and in vivo against a range of targets:

• intra-cellular• extra-cellular• intact microorganisms

We have shown these leads can be readily improved:• Higher specificity• Longer duration in the body• Lower doses• Lower toxicity and immunogenicity

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Multiple advantages of Phylomers® as a new class of peptide drugs

Diverse collectionof protein shapes

Derived fromsequenced microbial genomes

Small size (less than 50 amino acids)

Adaptable pharmacologicalproperties

Intellectual Property

Delivered quality hits against intracellular, extracellular targets and cell based screensCan access different interfaces of drug targets

Rich source of SAR2 dataPotential to identify families of related Phylomer structures blocking target epitopes

Size amenable to synthetic and recombinant manufacturing approaches

Stability, affinity & half life using synthetic peptide chemistry approach

Phylomers are unencumbered by antibody patent claims

Quality functional hitsOpportunity to capture new IP1 around proprietarytargets

Bioinformatic advantagesin processing the hits

Phylomers amenable to cheap high throughput synthetic manufacturing

Modulate pharmacologicalproperties

No third party royalty stack

1 IP – Intellectual Property2 SAR – Structure Activity Relationship

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Partnerships

The breadth of applications of our technology is beyond our capacity to exploit internally

Have adopted a partnership model for areas such as cancer and infectious disease

Other opportunities exist around diagnostic applications

Importantly, these third party groups are generating very positive results

• Dynamic Microbials – targeting novel drugs against “superbugs”

• Hutchison Centre Cambridge – targeting cancer

• Swiss Institute of Allergy and Asthma Research – targeting allergy For

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Phylomers® represent a new class of peptides derived from natural protein fragments encoded by biodiverse ancient bacterial genomes

From 25 characterised bacterial genomes we have derived 260 million distinct Phylomer®peptides with thousands of classes of protein structural folds

Phylogica owns the most comprehensive collection of peptide shapes found in nature

Patents cover methods of making and screening Phylomer libraries and composition-of-matter on peptides

14 patent families, 26 granted/ allowed patents and 27 patent applications covering the markets of US, Europe, Japan and Australia

Intellectual PropertyF

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Dynamic MicrobialsFocused on generating novel anti-microbial drugs by exploiting the Phylomer technology

Initially established as a spin-out utilising external funds to progress high-risk proof of concept experiments

Generated promising hits against important drug-resistant bugs

Followed up by more impressive data against clinical isolates

Strong interest from third parties looking for novel drugs in this area prompted Phylogica Board to acquire 100% of Dynamic and bring it back “in-house”F

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Significant antibacterial activity by screening for cell bindingF

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Business ModelF

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ObjectivesImmediate goals• Build relationships• License deals• Partnerships• Co-development deals• Collaborations• Strategic placement

Progressing….with usual long lead times

Medium to longer term goals•Unequivocally demonstrate the utility of our technology

•Attract corporate interest in the form of a strategic partnership or acquisitionFor

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SummarySignificant positive progress has been made over past six months

Numerous discussions underway with partners

Macro environment expected to remain difficult

Focus internal resources

Spin out or collaborate non-core areas

Continue to explore corporate opportunities

Maximise financial runway – low overhead, strategic placement

Remain focused on trade sale as end gameFor

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Corporate InformationPhylogicaASX Code: PYC

Issued Capital143,501,764 ordinary shares

Top 20 hold 59.94%

Substantial shareholdersBioTech Capital 20.32%

Institute for Child Health Research 14.36%

Anthony Barton & Associates 8.18%

Cash at 30 Sep 2008

$2.15 million

ContactMr Harry Karelis

Deputy Chairman

hkarelis@titanbioventures.com

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Technical Slides

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Phylogica: a highly competitive biologics discovery company

Features

AdnexusBMS

AvidiaAmgen

Affibody Molecular Partners

Phylogica

Diversity of Library 1 scaffold -Fibronectin

1 scaffold –A-domain

1 scaffold –Protein A

1 scaffold -Ankyrin repeat

Multiple scaffolds -protein domains and sub-domains

Low-mid nM primary hits

- - - - ✔

Efficacy Against Intracellular Targets

- - - ✔ ✔

Hits from Multiple Sequence Families

✔ ✔ ✔ ✔ ✔✔

High hit-rates for biological efficacy

- - - ✔ ✔

Straightforward Synthetic Production

- - ✔ - ✔

Rapid Affinity Maturation

✔ ✔ ✔ ✔ ✔✔

Amenable toSynthetic half-life extension approaches

- - ✔ - ✔

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High Throughput Synthesis (Pepset)

Pure Peptide

Specificity

Affinity

Functional Validation

PKPKMaturationMaturationFilterFilterSynthesisSynthesis

Flexible Approach to Converting Hits intoDrug-Leads

Mammalian

Phage Display

Yeast Two Hybrid

Mutagenesis

Multimerisation

PEGylation

HSA Binding

ScreeningScreening

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Versatile Screening Formats

Screening

✔

✔

NA

High Hit Rates High Functional Hit Rates

✔

✔

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Selected primary hit Phylomer peptides cause significant growth inhibition of A. baumannii

Primary hits as potent as natural antimicrobial peptidesF

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Potent activity on 50 different clinical isolates of Acinetobacterbaumannii including multiresistant strains

MHC10 = the minimum concentration required for >10% haemolysis

Potent activity of Phylomers before maturation with minimal hemolytic activity (blood toxicity)

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Affinities

On-rates

Off-rates

FilterFilter

MBP-Peptide KD

M1_28.5 nM

M1_4 10 nM

M1_6 11 nM

M1_7106 nM

M1_98.3 nM

Fc-CD40 R

5.6 nM

Screening

Filter

Synthesis

Maturation

Half-life Extension

In vivo Validation

Filtering the primary Phylomer™ HitsF

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Phylomers Antagonise CD40L/CD40 Interaction(In vitro Proximity Assay)

Alpha screenAlpha screen®® is a registered trademark of PerkinElmeris a registered trademark of PerkinElmer

ExcitationExcitation680 nm680 nm

OO22

EmissionEmission520520--620 nm620 nm

Protein A conjugated Protein A conjugated AcceptorAcceptorStreptavidinStreptavidin--coatedcoated

DonorDonor

rCD40LrCD40L

rCD40rCD40--FcFc

Solution-based proximity assay Phylomer-mediated inhibition of CD40L activity

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Phylomers Antagonise CD40L Activity(functional B cell assay)

rCD40LrCD40L CD40CD40

MHCIIMHCII

CD86CD86

rCD40LrCD40L

rCD40LrCD40L--mediated upregulationmediated upregulation

GlymCD40L (50 ng/µL)

EC50: 9nM

rCD40L Induced Receptor Expression

M1_18CD

86CD

86

Dose-dependent inhibition of rCD40L activity

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rTNFrTNF--induced cytoxicityinduced cytoxicity

CD40CD40 TLR 2/4TLR 2/4

TNFTNF--RR

CD40L-Binding Phylomers are Highly Specific

LPSLPS--mediated upregulationmediated upregulationMHCIIMHCII

CD86CD86

LPSLPS

TNFTNFαα

Cell DeathCell Death

Cell DeathCell Death

LPSLPS

Phylomers do not affect LPS activity

M1_18

CD86

Phylomers do not affect TNF cytotoxicity

-9 -8 -7 -6 -5-100

102030405060708090

100M1_2SM1_4SM1_6SM1_7SM1_9SM1_18*SshTNFRII

Concentration phylomer (logM)

% In

hibi

tion

cell

deat

h

EC50 4.106e-009

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Activity in Alphascreen

Activity in Bioassays

Phylomers Offer High Functional Hit Rates

56 Unique Synthetic Peptides Screened

Validation of 56 Synthetic Phylomers using 2 Independent Functional Assays

18%30% +ve inBioassay

50% +ve inProximity

Assay

Functional Hit Rate = 18%Functional Hit Rate = 18%

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M1_18rd

-10 -9 -8 -7 -6 -50

25

50

75

100M1_18rdPEG(40K) M1_18rd

Phylomer concentration (logM)

% In

hibi

tion

EC50M1_18rd 1.27uMPEG(40K)-M1_18rd 3.86nM

PEGylated Phylomers are potent before maturation(functional bioassay: upregulation of CD86 on B cells)

EC50PEG(40K)-M1_18rd 4nMPEG(40K branched)-M1_18rd 9nMPEG40K-M1_9s 14nMPEG40K-M1_6s 90nMPEG40K-M7_206 140nMPEG40K-M1_42(b)s ~1-2uM

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Enhancing Phylomer® Half-life

Retroinverted Phylomer® peptides have been demonstrated to be highly stable (>6 months at -20 and >2 months at room temperature in buffer)

Retro-inverted Phylomers are stable and protease-resistant in human plasma- >50% of retroinverso peptides present after 12 hrs incubation in human plasma- Retroinverted Phylomers® show greatly extended in vivo half-life in rat plasma without further modification (e.g.PEGylation)

Peptide Levels Detected by LC/MS

05

101520253035404550

0 15 30 45 60 120 240 480 720

D-PYC35-TATD-PYC36-TAT

Time [min]

Phyl

omer

®[µ

g/m

l]

UnPEGylated PYC35/PY36 Half life in vivo (rats) of 100 minutes(Comparable with T1/2 of many unPEGylated domain antibodies )

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