Corporate Presentation - TASE

Corporate Presentation December2014

Forward Looking Statement

December 2014

Please be advised that the information and projections provided in this presentation may include forward-looking statements with respect to plans, projections or future performance of the Company, the occurrence of which involves certain risks and uncertainties, some of which may not be under the control of Exalenz, including, but not limited to, changes in regulatory environment, Exalenz's success in implementing its research, development, sales, marketing and manufacturing plans, protection and validity of patents and other intellectual property rights, the impact of currency exchange rates and the effect of competition.

Additionally, please be advised, that certain solutions or applications for Exalenz’s products, included in this presentation, may not yet be commercially available and/or regulatory cleared for marketing. All trademarks and registered trademarks are the property of their respective owners.

Slide No. 2 |

Exalenz Mission

December 2014 Slide No. 3 |

Investment Summary


BreathID® Hp for H. pylori


H. pylori: Potentially Lethal, But Easily Treatable • Spreads quickly through saliva/easily transmitted• H. pylori reduces the stomach’s ability to produce

mucous leading to chronic irritation • If diagnosed, can be treated with PPIs, H2As,

antibiotics • Proven links to:

– Gastritis– Peptic ulcers– Gastric cancer

December 2014

25% PrevalenceOver 75M Infected

Slide No. 6 |

H. pylori Detection – Available Tests

December 2014

Blood Test Stool Test Urea Breath Test (UBT)

Sensitivity 90.6%Specificity 91.5%

Sensitivity 100%Specificity 99.2%

Sensitivity 85%Specificity 79%

UBT has superior clinical efficacy when detecting H. pylori infection

✓

Slide No. 7 |

Our Solution: The BreathID® Hp Test

2CO132CO12

~1% ~99%

ratio: Constant2CO13

2CO12

278%-N

216%-O

25%-CO

December 2014

Baseline measurement Patient drinks 13C-labelled substrate

Real-time Results

Results

30

Start Quick results in 10-15 minutes

Human Exhalation

Slide No. 8 |

BreathID® for H. pylori Testing

December 2014

Point-of-Care device High Volume Lab System

99+% sensitivity & specificity

• Fast: 10-15 minutes total test time - facilitates “test and treat”

• Non-invasive, patient friendly• Significant economic incentive - $65-$110 reimbursement • Small footprint/EMR compatible

• Fast: 3-4 min per test• Automatic analysis of 10 tests

in succession • Significant economic incentive

$55-$100 reimbursement • Integrated into Lab EMR

To be launched in Q1/15~300 US Sites

Slide No. 9 |

BreathID®Lab; Launch in Q3 2015

December 2014

High Volume Lab System

Automatic Analysis of 10 Tests in Succession“Walk-Away Operation”

Slide No. 10 |

Total Hp Test Market, Lab and POC

Note: Requires confirmation of applicability to European markets

All Segments ( Number of tests per year in USA)

Blood Tests

Stool Tests

Urea Breath Tests

4,600,000

600,000

780,000 (140,000 POC)

H. Pylori Total 5,980,000


Three Distinct Opportunities

Note: Requires confirmation of applicability to European markets

Efficiently & profitably serve

diverse customers

Serve customer base but prioritize profitable tests

Treat patients in holistic (and

profitable) manner

National LabsNational Labs Regional LabsRegional Labs IDNs/ACOsIDNs/ACOs


Powerful Clinical and Reimbursement Support


Organization Blood Antibody Test Urea Breath Test (UBT)

Cigna1 “Serology blood testing will not be covered to test for H. pylori...”

“The overall body of literature suggests that non-invasive testing with UBT is as clinically useful as endoscopy in managing select patients with uncomplicated upper gastrointestinal symptoms.”

Aetna2

“Blood antibody testing for H. pylori is experimental and investigational because of insufficient evidence of its effectiveness.”

“Stenstrom et al (2008) stated that urea breath tests are the best way to diagnose currentH. pylori infection.”

Anthem Blue Cross and Blue Shield3

“Serologic (in H. pylori testing) use is no longer recommended because it has poor predictive value, leads to increased antibiotic resistance.”

“UBT (CPT codes 83013, 83014) is FDA-cleared for the initial diagnosis and toconfirm eradication.”

Geisinger Health Plan4

“Eliminate the use of serology testing. Serology testing will not be reimbursed...”

“UBT (CPT codes 83013, 83014) is FDA-cleared for the initial diagnosis andto confirm eradication.”

UBT Vs. Blood Test; Leading Reimbursement Positions

1) Helicobacter pylori Serology Testing, Cigna, Cigna Medical Coverage Policy, Aug 2014 (https://cignaforhcp.cigna.com/public/content/pdf/coveragePolicies/medical/mm_0308_coveragepositioncriteria_urea_breath_test_for_heliobacter_pylori.pdf). 2) Clinical Policy Bulletin: Helicobacter Pylori Infection Testing, Aetna, April 2014, (http://www.aetna.com/cpb/medical/data/100_199/0177.html). 3) Anthem Adopts AGA and ACG Recommendations for Helicobacter Pylori Testing, Anthem Blue Cross and Blue Shield, Jan 2011, Network Rapid Update (http://www.anthem.com/provider/noapplication/f1/s0/t0/pw_b156793.pdf?refer=ahpprovider). 4) Operations Bulletin: Helicobacter pylori (H. pylori), Geisinger Health Plan, Jun 2011, (http://www.thehealthplan.com/providers_us/opsbulletins/Ops%2006_11%20Hpylori.pdf).


Attractive Lab Testing Economics

Blood Testing Urea BreathReimb. Code 86677 83013

CMS Reimb. $8 - 20 $70 - 95Private Insur. $8 - 12 $50 - 75Materials $5 $35

Potential Revenue $3 - 15 $15 - 60

Regional Labs


The US H. pylori Opportunity

December 2014

Q3 2015, IDN, HMOs in H2/2015

Q3 2015, IDN, HMOs in H2/2015

• Leverage national footprint, favorable reimbursement support, society guidelines

• Direct sales-force razor-razorblade business model

• Leverage national footprint, favorable reimbursement support, society guidelines

• Direct sales-force razor-razorblade business model

• Economic incentive – average breath test reimbursement 65$ to $100 (serology $8-20)

• Effective Aug 18, 2014,

Cigna (14M insured) to no longer reimburse for H. pylori blood tests

• Economic incentive – average breath test reimbursement 65$ to $100 (serology $8-20)

• Effective Aug 18,

2014, Cigna (14M insured) to no longer reimburse for H. pylori blood tests

Launch into Laboratory market

Launch into Laboratory market

Gain Market Share in POC Market

Gain Market Share in POC Market

Transform 3M Serology Tests into

Breath Tests

Transform 3M Serology Tests into

Breath Tests

Slide No. 16 |

Broad Pipeline of Diagnostic Solutions for Liver Diseases


Underscoring the Need

December 2014

“

Scott L. Friedman, MDIcahn School of Medicine at Mount Sinai Medical Center

“There is an acute need for well-validated functional test(s) in liver that correlate(s) with clinical

outcomes and/or fibrosis progression and with the response to anti-fibrotic therapy, not only in advanced disease, but also in patients with

intermediate stages of fibrosis”

“The development of non-invasive correlates to

HVPG is a high priority.”

Trial Designs and Endpoints for Liver Disease Secondary to Nonalcoholic Fatty Liver Disease (NAFLD) Meeting sponsored by September 5-6, 2013 FDA White Oak Campus

Guadalupe Garcia-Tsao MDProfessor of Medicine, Yale Medical Group

Slide No. 18 |

The Optimal Solution

®


Exalenz Liver Applications Opportunity

December 2014

Indication Clinical Relevance Market Potential

NASHThe most extreme form of NAFLD (non-alcoholic fatty liver disease) major cause of: cirrhosis, need for liver transplantation and liver cancer

OBT may be used to rule-in NAFLD patients for liver biopsy which is required for treatment initiation .MBT and HVPG are being used as end points for the new treatments that are being developed for NASH

$2.6B (33M Patients with

NAFLD)

CSPHAn increase in portal hypertension is a complication of chronic liver disease and cirrhosis, closely related to increase in liver associated complications.

A $100M annual (US only) market potential as non-invasive measure of CSPH replacing HVPG $100M

(US Only)

HCCHCC is Primary liver cancer mostly related to chronic liver disease. 700,000 people die every year from HCC, majority in China.

A $380M annual (China only) market potential as a tool for early deduction of HCC in HBV and cirrhotic patients

$380M(China Only)

ALFAcute liver failure in patients not previously suffering from liver disease is a rare and fatal condition

Prediction of spontaneous recovery/deterioration of acute liver failure patients may be life saving and supported by the NIH N/A

Slide No. 20 |

Exalenz Liver Pipeline Development

December 2014

Indication Intended Use Status Pipeline Development Market Potential

2014 2015 2016 2017 2018

NASHDiagnosis of NASH and follow up on pts. under treatment

OBT - Completed phase IIa (58 pts)MBT (vs. HVPG) -Completed phase II (120 pts)

$2.6B (33M Patients with NAFLD)

CSPHDiagnostic of significant portal hypertension

Completed phase II (120 pts) $100M

(US Only)

HCC Diagnosis of HCCCompleted phase IIA ( 45 pts) $380M

(China Only)

ALF Prediction of death/recovery

Completed phase II ( 71 pts) N/A

Approval

Clinical studies with strategic partners

Approval

Phase IIb (China)

Approval

Phase IIb (NIH)

Approval

Phase III

Slide No. 21 |

Exalenz NASH/NAFLD Strategy

• Exalenz’s breath test is used to identify NAFLD patients who are very likely (>90%) to have advanced NASH• Enrich study population and accelerate time for

approval• Discriminating severe from non –severe NAFLD• Monitoring response to treatment

• Signing partnerships with major pharmaceutical players to incorporate BreathID®

Market Potential $2.6B - 33M Patients with NAFLD

Active development of Drugs to treat NASH

FDA mandate biopsy proven NASH as inclusion criteria

A major impediment on drug development and future potential.


Experienced Management Team Lawrence Cohen, CEO

Susan Alpert, MD, PhD, Executive VP Regulatory

Ted Foltyn, VP WW Marketing & Bizdev

Gavin Doree, VP Sales

Raffi Werner, COO, General Manager

Dudy Stolick, CFO

Yaron Ilan, MD, Medical Director

Ilan Ben-Oren, CTO


Financials• Traded on Tel Aviv Stock Exchange (TASE) since 2007

• Current market cap- ~ $17.5M

• Shareholders:– Arkin Holdings – 60%– Migdal Insurance – 14% – Public (mostly funds that hold <2% each ) - 26%

• Current Burn rate - ~$700k monthly

• Cash in the bank - ~$4.1M

• H. pylori business break-even point – Q1/2016


Near-term Milestones

December 2014

Co-marketing agreement with large laboratories Co-marketing agreement with large laboratories

Launch of H. pylori Lab SystemLaunch of H. pylori Lab SystemQ3/15Q3/15

Q3/15Q3/15

Slide No. 25 |

CFDA approval of Breath ID HpCFDA approval of Breath ID HpQ2/15Q2/15

Launch Breath ID Hp in ChinaLaunch Breath ID Hp in ChinaQ3/15Q3/15

H. pylori

CSPH pivotal study -StartCSPH pivotal study -Start

NASH clinical trial for Algorithm development (OBT)NASH clinical trial for Algorithm development (OBT)

HCC phase II study in ChinaHCC phase II study in China

NASH Clinical trials in collaboration with Pharma (OBT+MBT)NASH Clinical trials in collaboration with Pharma (OBT+MBT)

Q4/14Q4/14

Q1/15Q1/15

Q1/15Q1/15

Q2/15Q2/15

Liver

Investment Risk Factors


Thank You.

Liver Applications Appendix


NASH- Non-Alcoholic Steatohepatitis

How is NASH diagnosed? Liver biopsy – an invasive, complex, operator dependent procedure with high degree of sampling error.

What is the relation between NASH and OBT?•NASH is associated with a defect in the mitochondrial beta oxidation, a pathway that is associated with the metabolism of fats•Octanoate Breath Test (OBT) - highly sensitive breath test using Octanoate, a fat molecule being metabolized via the mitochondrial beta oxidation•OBT highly correlates with NASH on liver biopsy, and can differentiate NASH from simple steatosis

OBT may be used to rule-in NAFLD patients for liver

biopsy which is required for treatment initiation

OBT may be used to rule-in NAFLD patients for liver

biopsy which is required for treatment initiation

What is NASH? •The most extreme form of NAFLD (non-alcoholic fatty liver disease) marked by inflammation and fibrosis of the liver •Regarded as a major cause of cirrhosis accompanied by varying stages of fibrosis •Considered as a major risk factor for the need for liver transplantation and for development of hepatocellular carcinoma (HCC, primary liver cancer)


CSPH - Clinically Significant Portal Hypertension (HVPG test)

What is the relation between HVPG and MBT?CSPH results in impaired hepatic function as measured by MBT

A $100M annual (US only) market potential as non-invasive measure of CSPH replacing HVPG

A $100M annual (US only) market potential as non-invasive measure of CSPH replacing HVPG

What is CSPH? An increase in portal hypertension is a complication of chronic liver disease and cirrhosis, closely related to increase in liver associated complications.

How is CSPH diagnosed? • CSPH is measured by Hepatic Vein Portal Gradient (HVPG), an invasive, complex, and highly operator dependent procedure, involving radiation and contrast material injection.• HVPG is measured in order to:

• Assess the risk of developing complications• Monitor/adjust therapies to reduce portal hypertension


HCC - Hepatocellular Carcinoma

What is the relation between HCC and OBT?•Mitochondrial beta oxidation in the liver is defective in patients with HCC. This is independent of tumor size.

•OBT can detect defects in mitochondrial beta oxidation, thereby serving as a highly sensitive tool for early detection of liver cancer patients.

A $380M annual (China only) market potential as a tool for early detection

of HCC in HBV and cirrhotic patients

A $380M annual (China only) market potential as a tool for early detection

of HCC in HBV and cirrhotic patients

What is HCC? HCC is Primary liver cancer mostly related to chronic liver disease. 700,000 people die every year from HCC, majority in China.

How is HCC diagnosed? HCC is diagnosed by expensive MRI or CT studies. Screening can be done with ultrasound and AFP both of which have low (<60%) sensitivity. Resulting in delay diagnostics for most patients.


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Corporate Presentation - TASE