Q1 2012 Update

Disease State Primer: Type II Diabetes, Non-Insulins

Table of Contents

Slide Number

I. Introduction • Who is Lumleian and what is a disease state primer?

• What is our perspective on Type II Diabetes?

• 3 – 6

• 7 – 9

II. Disease Overview and Care Paradigm • What is Type II Diabetes?

• Presentation, diagnosis, classification

• Epidemiology by geography and patient segment

• Current care paradigm and clinical evidence

• Emerging care paradigm

11

• 12

• 13

• 14

• 15 – 21

• 22

III. Clinical Development Pipeline • Disease mechanism overview

• Clinical development pipeline mapping

• DPP-IV Inhibitors

• GLP-1 Agonists

• SGLT2 Inhibitors

• PPAR Modulators

• SIRT-1 Activators

• Glucokinase Activators

• NF-kB Inhibitors

24

• 25

• 26 – 28

• 29 - 30

• 31 - 34

• 35 - 36

• 37 – 38

• 39

• 40 - 41

• 42

IV. Commercial Landscape • Global, US, EU, Japan market size and growth by brand

• Wall Street consensus forecasts for pipeline assets

• US growth decomposition: Rx volume, pricing, product mix

• US promotional spending, marketing mix and brand messaging

44

• 45 – 49

• 50

• 51 – 53

• 54 – 56

V. Appendix • Table of Acronyms

• Lumleian Team

• 58 – 59

• 60 - 61

Notes: 1These are a representative sub-set of the publicly available data sources

To ensure real-time knowledge, across disease states, our team of 30+ clinicians and Ph.D.

scientists maintain a comprehensive knowledge management platform, leveraging novel data

mining technology and proprietary analytics.

Data Mining

and Analytics

• Company presentations

• Earnings announcements

• Equity research coverage

• Investor relations transcripts

• Clinical trials

• Conference presentations

• Gene ontology

• Industry pipeline databases

• NIH grants

• Scientific literature & citations

• Business development transactions

• Venture capital investments

• Disease profiles

• Industry publications

• Sales and Rx data

• Treatment algorithms

• Advisory committee transcripts

• FDA and EMA filings

Scientific

& Clinical:

Financial:

Academic

Tech Transfer:

Competitive

Landscape:

• Early stage technologies

• Intellectual property filings

Business

Development:

Regulatory:

• Leverage data mining

technology to access

novel data sources

• Standardize, collate,

and link data sources

• Execute Lumleian’s

proprietary analytical

models

Universe of Public

Information1

• 30+ clinicians and

Ph.D. scientists

- Focused by area

of expertise

• 5 Ph.D. economists

and statisticians

Expert Validation

and Decision Support

4

Our efficient platform and our expertise based teams enable us to both deliver the highest

quality product and tailor our offer, to specific client needs: Either custom decision support or

more standardized research and analytics, e.g. disease state primers.

Decision

Support

• Clinical strategy

• Portfolio optimization

- Pre-Clinical

- Clinical

• Transaction support

- In licensing

- Out licensing Disease

State Primers

Proprietary

Analytics

• Asset valuation

• Epidemiologic forecasts

• Industry benchmarks

- Commercial

- Clinical Development

• Patient segment

valuations

• Promotional

response models

- Healthcare professional

- Direct to consumer

• Royalty monetization

Functional

Drill Downs

• Real-time clinical

data

- Trial strategies

- Results

• In licensing

assessments

- Pre-clinical

- Clinical

• Preliminary

due dilligence

- Scientific

- Clinical

- Commercial

• Disease overview

and care paradigm

• Clinical development

pipeline

• Commercial

landscape Customized

Standardized

5

What information is included in a disease state primer?

• Lumleian’s objective and fact based perspective on the relative attractiveness of investing in a given disease state • Disease overview and care paradigm

- Etiology, Diagnosis and patient segmentation, Global epidemiology, Treatment algorithm, Clinical evidence, Emerging care paradigm • Clinical Development Pipeline

- Validated industry pipeline for all assets in clinical development, Select mechanism of action profiles, trial designs and evidence • Commercial landscape

- Global, US, EU, Japan market and brand revenue, Pipeline forecasts, US growth decomposition, Promotional spend and messaging

What disease states are planned for 2012? • Autoimmune: Inflammatory Bowel Disease, Lupus, Multiple Sclerosis, Psoriasis, Rheumatoid Arthritis • Cardiovascular: Hyperlipidemia • Central Nervous System: Alzheimer’s Disease, Depression, Pain, Schizophrenia • Endocrine: Type II Diabetes, Obesity • Infectious Disease: Gram Negative Bacteria, Hepatitis C Virus • Oncology: Breast, Colorectal, Leukemia(s), Lung, Lymphoma(s), Melanoma, Ovarian, Pancreatic, Prostate • Pulmonary: Chronic Obstructive Pulmonary Disease, Idiopathic Pulmonary Fibrosis

Are disease state primers real-time, based on the latest validated scientific, clinical, and commercial data? • Quarterly primers are validated by our team: 30+ clinicians and Ph.D. scientists, 5 Ph.D. economists and statisticians • Primers are available at the end of quarter, incorporating new commercial and clinical data from the previous quarter

- Particulary dynaimc disease states are updated around key medical conferences, e.g. HCV post EASL in April and post AASLD in November

Do we create specific disease state primers and provide more in-depth functional information? • Yes, we plan to add disease states throughout ’12, per client interest • Yes, we are developing deep drills by function, e.g. Discovery, Clinical development, Business development, Commercial

Why did we create our disease state primers? • We were frustrated by having to repeatedly validate, standardize, and collate pipeline and commercial data • Portfolio optimization requires a standard framework to compare “apples to apples” investment decisions across disease states • Our primers began as a training tool; We require every decision scientist create one from scratch before supporting clients

What is a Lumleian’s disease state primer?

6

Disease

Overview and

Care Paradigm

• Type II Diabetes is a chronic, multifactorial condition, with a number of serious comorbidities, including hypertension, dyslipidemia

and hyperglycemia; Type II Diabetes accounts for >90% of the total diabetes patient population

• Type II Diabetes necessitates a wide variety of treatments to adequately control the core hyperglycemic condition and the host of

co-morbidities and complications - Many therapeutic options are available for Type II Diabetes, including three key classes considered first and second line treatments

(Biguanides, Sulfonylureas, Glitazones)

- Subsequently, four classes of anti-diabetic agents are commonly used in third line prior to Insulin (DPP-IV Inhibitors, GLP-1 Agonists, α-

Glucosidase Inhibitors, and Glinides), although use earlier in the paradigm is growing

- DPP-IV fixed dose combinations have also become an important treatment option and are providing branded agents with a foothold in

earlier lines of treatment

Clinical

Development

Pipeline

• Lumleian validated 78 assets in clinical development, the majority of which have MoAs similar to currently marketed agents - DPP-IVs, GLPI-1s (as mono therapy and in combination with Long Acting Insulin), and PPARs are the most common mechanisms in the clinic,

but we believe pipeline assets will likely offer only incremental “clinical” benefit over marketed products

- That said, new formulations will likely provide significant patient benefit, e.g. once weekly GLP-1 Agonists (e.g. Bydureon, Dulaglutide, and

Syncria) and combination DPP-IVs and statins (e.g. MK-0431E) which offer a single co-pay and likely improved real-world control/compliance

• Although novel approaches to treat Type II Diabetes are in clinical development, limited knowledge exists about their side effects and

efficacy attributes over recently launched agents - Foremost, post Dapagliflozin’s complete response letter in January, are the follow on SGLT2 Inhibitors (Empagliflozin, Canagliflozin) and the

first SGLT1//2 dual inhibitor (LX4211)

• Avandia related safety concerns, leading to changes in trial design to evaluate impact on macro-vascular events, has resulted in longer,

larger, and more costly clinical trials and post-marketing requirements

• Substantial need exists for agents able to provide additional benefits, including weight loss, cardio-protection, reduced micro-vascular

complications, and durability; These agents will need clean profiles as has been made clear by recent FDA decisions, e.g. Galvus,

Bydureon, Dapagliflozin

Commercial

Landscape

• Global ‘11 brand revenue for non-Insulin drugs was ~$13.9B and is forecast to grow by ~3.1% annually through ‘15 driven by strong

market growth outside of the United States and new uptake globally, including follow on DPP-IV Inhibitors, once weekly GLP-1 Agonists

and potentially follow on SGLT2 Inhibitors, e.g. Empagliflozin and Canagliflozin - Cost pressure will continue to drive generic (Biguanides and Sulfonylureas) use in the future, reinforcing the need for differentiation; This

will be felt most acutely in the US with the Actos LoE in 08/12

- DPP-IV Inhibitors (fixed dose combinations) will gain share significantly in the US given the recent label change to Actos (bladder cancer

warning), the reduction in DTP advertising associated with Actos LoE (08/12), and Dapagliflozin’s recent FDA complete response letter

- GLP-1 Agonists will also gain share, and the approval of the first once weekly formulation marketed by a large pharma (e.g. Syncria and

Dulaglutide) may be a game changer, particularly with an indication for use in combination with Long Acting Insulin

Source: Lumleian perspective

Executive Summary: Type II Diabetes falls at the intersection of many conditions, and is

associated with a number of serious co-morbidities; Substantial need exists for agents able to

provide additional benefits, including weight loss and cardio-protection.

• The global

7

Key

Questions

• Commercial Opportunity - How will late-stage pipeline agents with established mechanisms be able to achieve clinical and commercial differentiation in

a crowded market, particularly with payors and patients? Will patients convenience continue to be a key driver of market uptake?

- What will be the uptake in the US of the first once weekly GLP-1 Agonist, and how will it compete with the DDP-IV inhibitors,

given superior HbA1c control, safety concerns, and more convenient formulation?

- How will loss of patent exclusivity for key branded agents, e.g. Actos, impact the opportunity and entry point in the treatment

paradigm for future innovative approaches? What will be the positive spill over impact on DPP-IV Inhibitors?

• Clinical Development and Regulatory Risks - How will the global efficacy and safety requirements for novel therapies change? What will be the requirements for demonstrating outcomes

benefits and a favorable safety profile?

- What additional challenges exist that could pose trial and regulatory risks for sponsors looking to develop novel agents in this space?

Lumleian’s

Perspective

• Commercial Opportunity: The Type II Diabetes market represents an attractive long-term opportunity for companies willing

to dedicate resources to satisfy regulatory requirements and compete in a crowded market increasingly driven by patients and payors - The Type II Diabetes market will continue to grow, particularly in the mid-to-long-term, given the likelihood that large pipelines will support

future innovation; In the near term growth will be driven largely outside of the United States

- In the US significant opportunity exists for the DDP-IVs to gain share absent Actos marketing post LoE; Further recent Actos safety concerns

(e.g. bladder cancer) put payors in check and near-term we see the US as highly attractive for Januvia, Onglyza and Tradjenta • United States ‘11 brand revenue was ~$8.0B and is forecast to be flat in ’12 and decline in ’13 due to Actos LoE; Thereafter the market is forecast

to grow by an ~5.8% CAGR driven by the uptake of marketed and pipeline DPP-IV Inhibitors and GLP-1 Agonists

• We posit this uptake (consensus Wall Street estimates) is understated and believe DPP-IV share gains will be more aggressive given substantial

marketing investment, Actos LoE and safety concerns, and Dapagliflozin’s complete response letter

- Guidelines will continue to influence payer coverage, enabling entry of new premium-priced agents able to drive guideline

acceptance through clinically meaningful differentiation

- Payers are increasingly looking for relevant cost-benefit metrics (e.g., long-term mortality) over surrogate markers (e.g. HbA1c), placing a

premium on clinical outcomes data from trials

• Clinical Development and Regulatory Risk: FDA will necessitate long-term safety requirements and strong clinical trial design - Inclusion of more high-risk and better-controlled patients with lower baseline HbA1c levels will also make it more challenging to

demonstrate significant benefits for novel agents

- The majority of future market growth in 2020 and beyond will be dependent upon successful development of novel classes able to achieve

significant differentiation beyond HbA1c with clean safety profiles

- Leaders in Type II Diabetes need to pursue multiple clinical development programs, including established and innovative mechanisms, to

ensure continued presence and significant future market share; We see the market as particularly attractive for entrenched players

What are the key questions for 2012?

8

0

1

2

3

4

5

Level of Unmet Need Likelihood of Technical Success Regulatory Impetus

Source: Lumleian perspective

Type II Diabetes may offer significant returns for a company willing to make multiple high-risk/reward

investments – given generic availability, the regulatory environment, and need to invest heavily in

clinical development and marketing; We see it as particularly attractive for entrenched players to

invest in marketing and Phase IV studies; Strong regulatory capabilities are a requisite.

Average

Type II Diabetes: Relative Attractiveness of Greenfield Investment in Late Stage Clinical Development

High

Low

Type II

Diabetes

Required

Investment

Phase III Investment

• ~3,000 patients in 2 trials

• 3-5 years duration

• Show CV events including

CV mortality

Commercial Spend

• In July ’10 the average

brand spent ~$20 M a

month on promotion - Healthcare professional

(86% of spend)

- Direct to consumer

(14% of spend)

• DTC investment will likely

be important to educate

patients on HbA1c control,

e.g. once weekly GLP-1s

Phase IV Investment

• Current and future trials

will need to show CV

events and mortality - Trial and regulatory costs

could exceed $500 M for

a single asset

Level of

Unmet Need

Clinical Unmet Need

• High, focused on targeting

weight loss, specific

physiology, durability, and

greater standalone

efficacy

Global Epidemiology

• ~292 M prevalence ‘10

• ~2.1% CAGR ‘10-’15

Disease Burden

• Economic cost of $150-

$200B annually (US)

• Type II Diabetes is a major

cause of mortality and

results in 240,000 deaths

(US)

Significant Co-morbidities

• Type II Diabetes falls at

the intersection of many

conditions

Commercial

Attractiveness

Market Size

• ~$13.9 B market in ’11

Global Epidemiology

• ~290 M prevalence ‘10

• ~2.1% CAGR ‘10-’15

Market Expansion

• Significant opportunity

to penetrate globally,

e.g. DPP-IVs and GLP-1s

Generic Penetration

• ~70% TRx in US ‘10

• US/EU LoEs through ’15

- Actos (10/12)

• This creates a significant

opportunity for the DDP-

IVs absent Actos

marketing

- Actos safety concerns

put payors in check

Competitive Launches

• 13 Ph. III /US Reg. assets

• Dapagliflozin complete

response creates

opportunity for DPP-IVs

Likelihood of

Technical Success

Etiology

• Improved understanding

of complex physiology

Historic Phase III Failures

• Taspoglutide (Roche)

• Dutogliptin (Forest)

- Terminated

Clinical Challenges

• Improved HbA1c is

closely tied to

increased cases of

hypoglycemia

Differentiation vs. Existing

Therapies

• Syncria vs. Victoza in

its first phase III trial

Target Patient

Populations

• Need to target patients

with lower baseline

HbA1c that are better

controlled

Regulatory

Environment

Clinical Unmet Need

• Significant interest in

targeting co-morbidities

such as weight loss and

CV disease

Historical Precedents

• Intense focus on long-

term safety and CV risks

post Avandia

• Approval delays

resulting in new, longer

safety studies to satisfy

FDA concerns (e.g.,

Galvus, Bydureon,

Dapagliflozin)

• Challenging to show

significant and durable

efficacy improvements

Advocacy

• Highly active advocacy

but less involved

patient population

9

25.6 35.2 52.8 64.2 8.9

11.7

204.3

315.5

291.6

426.6

0

100

200

300

400

500

600

2010 2030

Sources: IDF Diabetes Atlas, fifth edition, 2011, International Diabetes Federations; American Diabetes Association, Practice guideline for the

treatment of Type II Diabetes (2008)

Notes: Global incidence and prevalence estimates exclude undiagnosed Type II Diabetes

Global Type II Diabetes prevalence was ~290M in ‘10, with an incidence of ~12.9M; Prevalence

is forecast to grow by ~2.1% to ~536M in ’30; US ’10 prevalence was ~25.6M in ‘10, with

incidence of ~1.9M; Obesity and aging are primary risk factors.

Moderate

Type II Diabetes Global Prevalence (M) Type II Diabetes US Prevalence by Patient Segment (M)

5.2 7.1

13.4

18.5

7.0

9.6 25.6

35.2

0

10

20

30

40

2010 2030

CAGR

(‘11-’30)

Mild:

1.5%

Severe:

Epidemiologic Studies: Solid bars Lumleian Estimate: Hashed bars

2010 Type II Diabetes Global Incidence (M)

Total=12.9M

• Weight: Obesity is the dominant risk factor with BMI over 30

• Age: Risk doubles every 5 years after the age of 45

• HDL cholesterol level: lower than 35 mg/dl will double the risk

of diabetes

• Blood pressure: Greater than or equal to 140/90 mmHg

• Genetics: Risk significant increase with a Type II Diabetes family

history

- Strong correlation with many metabolism related genes

• Sedentary lifestyle: Exercising fewer than three times a week

• Race: Diabetes occurs more often in Hispanic/Latino

Americans, African-Americans, Native Americans, Asian-

Americans, Pacific Islanders, and Alaska natives

• Pregnancy: Women who have had a baby weighing nine

pounds or more at birth have higher risk of Type II Diabetes

Primary Risk Factors

EU:

1.6%

JP

RW:

CAGR

(’11-’30)

2.1%

US:

1.0%

1.3%

2.3%

WW:

1.2%

Moder

ate:

2.0%

Secondary Risk Factors

1.9 2.1

0.3

8.6

0.0

1.5

3.0

4.5

6.0

7.5

9.0

10.5

US EU JP RW

14

Diagnosis:

Treatment:

First line:

Second line:

Third line:

Screening and Diagnosis (Current)

• Screening is based on blood tests of glycated hemoglobin (HbA1c)

level, a reading of greater than 6.5% is indicative of Type II

Diabetes

• Frequent HbA1c tests, in a fasting state, are used as a diagnostic

to evaluate disease control, progression and severity

Treatment (Current)

• Existing treatments provide symptomatic relief by improving

Insulin function and sensitivity

• First line: Metformin, Glitazone and Sulfonylurea are the first line

choices for moderate diabetic patients - Biguanides improve hyperglycemia primarily by suppressing glucose

production in the liver, e.g. Glucophage (Metformin)

- Glitazones activate PPARγ to increase Insulin sensitivity, e.g. Avandia

(Rosiglitazone), Actos (Pioglitazone)

- Sulfonylureas lower blood sugar by stimulating the release of Insulin

from pancreatic beta cells and by inducing increased activity of

intracellular Insulin receptors, e.g. Amaryl (Glimepiride), Prandin

(Repaglinide)

• Second line: DPP-IV Inhibitors and GLP-1 Agonists are used as

second line agents for severe diabetic patients and moderate

patients; DPP-IVs work by increasing the secretion of Insulin and

suppress the release of glucagon in the pancreas - DPP-IV Inhibitors: Januvia (Sitagliptin), Onglyza (Saxagliptin), Tradjenta

(Linagliptin), Galvus (Vildagliptin) in EU and Nesina (Alogliptin) in Japan

- GLP-1 Agonists: Byetta (Exenatide), Bydureon (Exenatide ER),Victoza

(Liraglutide)

• Third line: Insulin is used for severe diabetic patients either as

mono therapy or in combination with orals or GLP-1 Agonists

• Prognosis (Current) - Type II Diabetes is a life-long chronic disease

- Improper management leads to complications including non-traumatic

blindness and kidney failure

Mild 100<FPG<125

Severe FPG>300

Moderate 126<FPG<300

Biguanides Glitazones

Sulfonylureas

Initiate

DPP-IV Inhibitors

GLP-1 Agonists

Add /

Switch

HbA1c >6.5%

Sources: American Diabetes Association, Practice guideline for the treatment of Type II Diabetes (2008)

Treatment selection is guided by a number of factors; Standard of care is a step-wise treatment

approach, using a variety of therapeutic options; The clinical focus is primarily on getting patient blood glucose (e.g. HbA1c) to goal.

Insulin +/-

Oral anti-

diabetics

Diet control

Exercises

Disease Progression

15

Type II Diabetes Pipeline: Current (N=78)

Mechanism

of Action

US

Reg./Phase

III

(N=13)

Phase II

(N=39)

Phase I

(N=24)

Insulin Release

Promoters

DPP-IV Inhibitors 2 10

GLP-1 Agonists 4 3 4

Glucose Metabolism

Targeting MoAs

Glucokinase

Activators 3 1

PPAR Modulators 1 5 1

SIRT-1 Activators 2

Others 4 3

Immune System

Targeting MoAs

IL-1 Inhibitors 3 2

NF-kB Inhibitors 1 1

Others 1 1

Glucose Uptake

Targeting MoAs

SGLT2 Inhibitors 4 3 2

SGLT1 Inhibitors 1

Others 1 5 10

Sources: Lumleian estimates based on publicly available data from bio-pharmaceutical companies (financial statements, investor presentations, pipeline

presentations, analyst day transcripts); 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; CenterWatch

Insulin Release Promoters (e.g. DPP-IV Inhibitors and GLP-1 Agonists) dominate the

industry’s late stage pipeline; Glucose Metabolism Targeting MoAs and Glucose Uptake

Targeting MoAs are also being pursued.

Type II Diabetes Pipeline: Recent History

• Multiple MoAs are in the clinic, including: - DPP-IV Inhibitors

- GLP-1 Agonists

- Glucokinase Activators

- IL-1 and NF-kB Inhibitors

• In recent FDA reviews and advisory panels, safety

has received notable emphasis

• Risk vs. benefit concerns have stymied multiple

submissions: - Nesina (Takeda)

- Galvus (NVS)

- Bydureon (Amylin), approved 01/12

- Dapagliflozin (BMS), complete response letter 01/12

Type II Diabetes Pipeline: Upcoming Catalysts

• Nesina/Liovel (Takeda) PDUFA (03/12)

• Lyxumia (SNY/Zealand) - FDA NDA filing, Q2 ’12

- Filed for approval with EMA (11/11)

• Syncria (GSK/HGS) - Top line phase III results (US trials), H2 ’12

• Dulaglutide (BI/LLY) - The AWARD trial reads-out initial Phase III

data in 2H ‘12

26

Source: May M, Novo awaits green light for diabetes drug, Nature Biotechnology, 27, 682-687, (2009)

Nesina, a DPP-IV Inhibitor under FDA review, hopes to compete with three marketed agents

based on a comparable risk-benefit profile; A key differentiator is the Liovel formulation

combining Alogliptin and Pioglitazone; Actos bladder cancer concerns are a red flag.

Physiology • DPP-IV is an enzyme expressed by most of cell types

that increases blood glucose and decreases Insulin

secretion through degradation of GLP-1 - In Type II diabetics, over expression of DPP-IV disrupts

GLP-1 increasing blood glucose level

Hypothesized

Mechanism

• Inhibits DPP-IV function to protect GLP-1 and increase

Insulin secretion - Nesina, now under FDA regulatory review, shows a

comparable efficacy and safety profile vs. marketed

products

- Pioglitazone safety concerns are a red flag for Liovel, and

the FDA issued a warning for Actos in July ‘11; Use has

been suspended in some European countries, e.g. France

and Germany

- Adverse effects, including nasopharyngitis (the common

cold), headache, nausea, hypersensitivity and skin

reactions, have been observed in clinical studies

• In particular skin lesions with blistering observed in

nonhuman primate toxicology were a primary concern

for the FDA in issuing Galvus (NVS) a complete response

US Reg. / Phase III • Nesina / Liovel (Takeda)

Phase II • SYR-472 (Takeda) • PF-4971729 (PFE) • MK-3102 (MRK) • GRC8200 (Glenmark) • Carmegliptin (Roche) • KRP-104 (ActivX) • Teneligliptin (Mitsubishi Tanabe) • Gemigliptin (LG Life Sciences) • SK-0403 (Sanwa Kagaku) • MK-0431E (MRK)

- Sitagliptin/Atorvastatin

Pipeline

29

Clinical Results (Phase III)

Efficacy: • Significant mean change from baseline HbA1c levels (p<0.001), for both 12.5 mg and 25 mg Nesina doses

vs. placebo

• HbA1c was reduced by more than 7% in 47% (12.5 mg) and 44% (25 mg) patients treated with Nesina

• Reduced effectiveness at 12.5mg and 25mg QD is modest and in line with the class

Safety: • In all mono therapy and combination Phase III studies, Nesina was well tolerated, however CV data did not met FDA’s

guideline, largely due to short Phase III trial length

Lumleian Commentary: • Takeda reached agreement with FDA on the design of a CV outcomes study which will enroll 5,400 patients

• Takeda is also pursuing Liovel (a fixed-dose Alogliptin/Pioglitazone combination), that was recently approved in Japan

• We are optimistic regarding approval as mono therapy in April, but are circumspect regarding combination approval

Phase II Program (Completed) Phase III Program (Completed)

Patient Segment: • Moderate Type II Diabetes • Moderate Type II Diabetes

Studies:

(Target Enrollment)

• Single Phase II (N=265) • Two Phase III studies (N=329 and 480) and

EXAMINE study of CV events ongoing (N=5,400)

Comparator: • Placebo • Placebo

Dosing: • 6.25; 12.5; 25; 50; 100 mg QD • 6.25; 12.5; 25 mg QD

Duration: • 12 weeks • 16 weeks (EXAMINE study 5 years)

Primary End-Points: • Efficacy: Change from baseline in HbA1c • Efficacy: Change from baseline in HbA1c

• CV events: Time from randomization to the occurrence

of the primary major adverse cardiac events

Secondary End-Points: • Efficacy: Change from baseline in HbA1c

• Efficacy: Change from baseline in fasting plasma glucose

• Efficacy: Change from baseline in HbA1c

• Efficacy: Change from baseline in fasting plasma glucose

• Efficacy: Change from baseline in body weight

Sources: Company press releases; 3rd party equity research reports; Bio-Pharma Insight; Clinical Trials.gov; FDA.gov

EXAMINE study (CV safety) and recent bladder cancer concerns with Actos will likely be focal

points at Nesina and Liovel’s PDUFA (April 25th); We are optimistic regarding approval as mono

therapy, but are circumspect regarding combination approval.

30

Sources: Lumleian estimates based on publicly available data from bio-pharmaceutical companies (financial statements, investor presentations,

analyst day transcripts); 3rd party equity research reports; Bio-Pharma Insight

Notes: Branded sales excludes generic revenues and Insulins; Pipeline includes: Aleglitazar, Canagliflozin, Lyxumia, and Nesina; *Includes pipeline

revenues

Global ‘11 brand revenue for non-Insulin drugs was ~$13.9B and is forecast to grow by ~3.1%

annually through ‘15 driven by strong growth outside of the United States and new product

launches, including follow on DPP-IV inhibitors and once weekly GLP-1 Agonists.

$10.4 $12.1

$13.9 $15.1 $14.7

$15.7 $16.6

$0.0

$10.0

$20.0

09A 10A 11A 12F 13F 14F 15F

’11 Revenue

($B)

’10–’11A

CAGR

’11-’12F

CAGR

’12–’15F

CAGR

Global &

Pipeline $13.9 15.7% 8.5% 3.1%

US* $8.0 10.6% -0.4% -2.2%

EU* $3.2 52.6% 20.7% 8.7%

JP* $1.4 -5.1% 19.8% 7.9%

RW* $1.3 6.9% 21.1% 8.9%

EU

US

JP

RW

Type II Diabetes Global Brand Revenue ($B)

Updated: 02/15/12

Actual: Solid bars Consensus Wall Street Forecast: Hashed bars

Global

Pipeline

Baseline Epidemiological Growth (Prevalence)

• US: 1.6% • EU: 1.0% • JP: 1.3%

Recent and Anticipated New Product Launches - Global

• Novo Nordisk: Victoza (03/11)

• Eli Lilly/Boerhinger Ingelheim: Tradjenta (08/11)

• Takeda: Nesina (’12)

• Sanofi/Zealand: Lyxumia (‘13)

• Roche: Aleglitazar (’13)

Recent and Anticipated New Product Launches - Japan

• Takeda: Liovel, Alogliptin and Pioglitazone (09/11)

• Takeda: Nesina (04/10)

• JNJ/Mitsubishi Tanabe: Canagliflozin (’13)

Recent and Anticipated Line Extensions

• Merck: Janumet XR, Sitagliptin and Metformin QD (02/12)

• Amylin: Bydureon, Exenatide ER (01/12)

• Eli Lilly/Boerhinger: Jentadueto, Tradjenta and Metformin (01/12)

• Merck: Juvisync, Sitagliptin and Simvastatin (10/11)

Recent and Anticipated Loss of Exclusivity

• US: Avandia (09/11), Actos (08/12)

45

Sources: Consensus estimates based on publicly available equity research forecasts that have been updated in the past 12 months (since 1/1/11);

Consensus estimate is the ‘straight line’ average with each bank’s forecast weighted equally

Notes: These forecasts are not representative of Lumleian’s viewpoint; Ad-hoc Lumleian develops its own forecasts

for clients based on its proprietary analytics and research; Pipeline includes: Aleglitazar, Canagliflozin, Lyxumia, and Nesina

Global Pipeline Assets Wall Street Consensus Forecast ($B)

Wall Street consensus estimates forecast new products will increase the ‘15 global market by

~$1.5B, driven largely by anticipated launches for Takeda’s Nesina, a DPP-IV Inhibitor, outside

Japan, Roche’s NF-kB Modulator Aleglitazar, and Sanofi’s GLP-1 Agonist Lyxumia.

Wall Street Consensus Forecast: Hashed bars

$0.2

$0.7

$1.1

$1.5

$0.0

$1.0

$2.0

09A 10A 11A/F 12F 13F 14F 15F

Canagliflozin (JNJ)

Aleglitazar (Roche)

Lyxumia (SNY)

Nesina (Takeda)

Updated: 02/15/12

Nota Bene: Dapagliflozin forecast omitted, premised

on recent FDA complete response

Global Aleglitazar (Roche)

Equity Research Forecasts ($B)

Global Nesina (Takeda)

Equity Research Forecasts ($B)

Global Lyxumia (SNY)

Equity Research Forecasts ($B)

$0.0

$0.5

$1.0

12F 13F 14F 15F

Thousa

nds

0

0.5

1

12F 13F 14F 15F

Thousa

nds

0

0.3

0.6

12F 13F 14F 15F

Thousa

nds

15F Consensus: $0.3B 15F Consensus: $0.8B 15F Consensus: $0.3B

50

Others

DPP-4

GLP-1

Glitazone

Sources: SDI (IMS) Promotion Audits, Kantar Media Research 2010 - 2011

Note: Insulins are excluded; Healthcare Professional (HCP) spend includes marketing to physicians, nurse practitioners, physician assistants through marketing

& event promotions, journals, and online promotions; Direct to Consumer (DTC) includes marketing channels in television, radio, newspapers, magazines,

outdoor advertisements, and internet; 3MR (3 months rolling) compares avg. monthly spend for the 3 months 10/11-8/11 vs. the 3 months 7/11-5/11

In the three months ending October ‘11 total promotional spend grew ~14.9%; Healthcare

professional spend grew ~11.6% with DPP-IV Inhibitors accounting for ~60% of spend; Direct to

Consumer spending grew in October with Januvia launching the first campaign since Q1 ‘11.

$0

$50

$100

N D J F M A M J J A S O

Millions

HCP DTC

$0

$50

$100

N D J F M A M J J A S O

Others Glitazone

GLP-1 DPP-IV

$0

$15

$30

N D J F M A M J J A S O

Others

Glitazones

GLP-1

DPP-IV

• ~$105.3M was spent on total promotion in October, a ~14.7%

increase (3 month rolling), with ~86% of the expenditure

focused on health care professionals

– DDP-IV Inhibitors accounted for ~61% of HCP spend, and the average

brand (Januvia, Onglyza, and Tradjenta) spent ~$18.5M in October

• Class DTP spending rose in parallel with Tradjenta approval (08/11)

– GLP-1 Agonists (Byetta, Victoza) spent on average ~$10.2M in October

• After two quarters of inactivity, Januvia launched a DTC

campaign in September, spending ~$13M in October

- Onglyza did not pursue DTC advertising, nor did either of the two

GLP-1 Agonists

$105.3M

(10/11)

$91.6M

(10/11)

Exelon

$13.8M

(10/11)

2010 2011

Total Promotional Spend ($M)

Healthcare Professional Spend ($M) Direct to Consumer Spend ($M)

2010 2011

2010 2011

Share of

Wallet CAGR

(Oct-11) (3MR)

HCP 86.9% 11.6%

DTC 13.1% 84.1%

Share of

Voice CAGR

(Oct-11) (3MR)

DPP-IV 60.8% 12.2%

GLP-1 22.3% -4.5%

Glitazones 10.0% 33.9%

Others 5.7% 17.2%

Share of

Voice CAGR

(Oct-11) (3MR)

DPP-IV 95.1% 165.5%

GLP-1 3.0% -18.8%

Glitazones 0.1%

Others 1.9%

14.9% (3MR)

CAGR

11.6% (3MR) CAGR 84.1% (3MR) CAGR

Updated: 02/15/12

54

Table of Acronyms (1 of 2)

11A 2011 Actual

12F 2012 Forecast

2H Second Half

3MR Three Months Rolling

ABT Abbott

ANLG-B Analog-B

AMG Amgen

AMPK Adenosine Monophosphate-Activated

Protein Kinase

AZN AstraZeneca

B Billions

BI Boerhinger-Ingelheim

BID Bis in Die (Twice daily)

BMS Bristol-Myers Squibb

CAGR Compound Annual Growth Rate

CCL2 Chemokine (C-C Motif) Ligand 2

CCR2 chemokine (C-C Motif) Receptor 2

CHF Congestive Heart Failure

CMS Centers for Medicare & Medicaid

Services

CV Cardiovascular

dL Deciliter

DPP-IV Dipeptidyl peptidase-4

DTC Direct to Consumer

EU European Union

FDA US Food and Drug Administration

FPG Fasting Plasma Glucose

GI Gastrointestinal

GLP-1 Glucagon-Like Peptide-1

GPR119 G Protein-Coupled Receptor 119

GSK GlaxoSmithKline

HbA1c Glycosylated Hemoglobin

HCP Health Care Professional

HDL High-Density Lipoprotein

IDF International Diabetes Federation

IgG2 Immunoglobulin G 2

IL-1 Interleukin-1

JNJ Johnson and Johnson

JP Japan

kg Kilogram

LLY Eli Lilly

LoE Loss of Exclusivity

LT Long Term

M Millions

mg Milligrams

µg Microgram

mmHG millimeters of Mercury

MoA Mechanism of Action

MRK Merck

MTD Month to Date

N Number

NDA New Drug Application

NF-kB Nuclear factor Kappa-Light-Chain-

Enhancer of Activated B Cells

NOVO Novo Nordisk

NVS Novartis

PCP Primary Care Physician

PFE Pfizer

Ph. Phase

Ph.D. Doctor of Philosophy

PPAR Peroxisome Proliferator-Activated

Receptors

PPARγ Peroxisome Proliferator-Activated

Receptors Gamma

PPG Postprandial Plasma Glucose

Q1 First Quarter

Q2 Second Quarter

Q3 Third Quarter

Q4 Fourth Quarter

QD Quaque Die (Once Daily)

QTD Quarter To Date

58

Table of Acronyms (2 of 2)

Reg. Reglatory

RN Registered Nurse

ROCH Roche

RW Rest of World

Rx Prescription

SGLT Sodium-Dependent Glucose

Cotransporter

SIRT Sirtuin (Silent Mating Type Information

Regulation 2 Homolog)

SNY Sanofi-Aventis

SOC Standard of Care

SS Statistically Significant

SSD Statistically Significant Difference

Type II

Diabetes Type II Diabetes

TRx Total Prescriptions

US United States

WW World Wide

Yrs. Years

YTD Year to date

59

• Frank Deane, Ph.D. is a Director of Decision Science and Founder of Lumleian. Frank has over ten years experience

working with life science companies and concurrently holds an appointment in the department of strategy at the

Carroll School of Management, Boston College, where he teaches ‘Strategic Issues in Pharma and Bio-Tech,’ to MBA

students. Prior to founding Lumleian, Frank was a director with Leerink Swann and a case team leader with Bain,

where he gained substantial operational experience growing and operating a diverse set of businesses. Frank

entered consulting after spending three years in the bio-pharmaceutical industry with Eli Lilly, supporting portfolio

optimization and business unit strategic planning. He began his career, as a quantitative risk analyst working at

BlackRock. Frank earned a Ph.D. in econometrics from the Krannert School of Management at Purdue University,

where his dissertation focused on applying game theory and statistical modeling to optimize pharmaceutical sales

and marketing resources. Frank has a bachelor of arts in economics from Princeton University.

As a leadership team, we designed Lumleian’s business model based on our collective

experience in: academic R&D, bio-pharmaceutical industry, equity research and strategy

consulting …

• Mark Hochstetler, MBA is a Director of Decision Science at Lumleian. Mark has over ten years experience working

with life science companies. Prior to joining Lumleian, Mark served as the CFO at OPK Biotech, which focuses on

developing oxygen therapeutics for the treatment of anemia, ischemia, and trauma. Before segueing to industry,

Mark spent 5 years as a strategy consultant and equity research analyst at Leerink Swann, where he covered:

Array, Arqule, Ariad, Celgene, Chelsea, Cougar, Cubist, Genentech, GTx, Hana, Idenix, InterMune, Kosan,

Millennium, MGI Pharma, Onyx, Poniard and Vertex. Mark earned an MBA from Duke University’s Fuqua School of

Business with a concentration in health sector management. Mark has a bachelor of arts in political science from

Stanford University.

• Sarah Haigh Molina, Ph.D. is a Manager of Decision Science at Lumleian, where she leads the Academia and Non-

profit practice. Sarah has over ten years experience working and researching in the life sciences. Prior to joining

Lumleian, Sarah was an Assistant Professor of Medicine at Boston University School of Medicine where she served

as the Director of High-throughput Screening. Before returning to academia, Sarah was US Operations Manager at

Molecular Cytomics. Sarah earned a Ph.D. in biology from York University, an MBA from Boston University with a

concentration in entrepreneurship, and a bachelors of science in biochemistry from Dundee University.

60

… Having lived the client experience, we know quality is paramount, and pioneered our

approach with quality and process efficiency as dual mantras.

• Jean Kung, M.S.E, MBA as Manager of Process Efficiency and Quality Control oversees day-to-day operations and

finances at Lumleian and has over five years experience working in the life sciences. Jean designed the process

by which Lumleian efficiently and effectively creates and quarterly updates its disease state primers and serves as

the final point of quality control. Prior to joining Lumleian, Jean served as a contract project manager to various

life science clients. Before entrepreneurship, Jean was a clinical research associate at Health Policy Associates

and a researcher at the Harris Orthopedic Biomaterials and Biomechanics Laboratory, Massachusetts General

Hospital. Jean earned a masters of science in biological engineering from Cornell University and an MBA in the

Health Sector Management Program from Boston University with a concentration in operations and technology

management. Jean has a bachelor of science in biological engineering, also from Cornell University.

• Morgen Caroll, MBA as Manager of the Customer Experience at Lumleian, aspires to provide Lumleian's clients with

superior care and service based on their particular needs. Morgen brings over five years life science experience

and has a background in Marketing, Sales, and Public Relations. Prior to joining Lumleian, Morgen worked at

GlaxoSmithKline, with responsibility for the company’s flagship cardiology and endocrinology products. At

GlaxoSmithKline, Morgen was a primary care and specialty care sales representative while serving as a liaison

between product management teams and field sales. As a representative, Morgen consistently ranked in the top

10% of GSK’s sales force, despite working in an inner city territory with significant access challenges. Prior to

entering the life sciences Morgen worked on the sales and marketing staff at Philadelphia Magazine and Food &

Wine Magazine. Morgen earned an MBA from the Villanova School of Business with a concentration in marketing,

and a bachelor of arts in English from Gettysburg College.

• Qingwei Sun, M.S.E, MPH as a Decision Science Analyst oversees secondary data collection, synthesis and analysis

and designed analytical methodologies fundamental to Lumleian’s knowledge management platform. KM

database. Using meta-analysis method, he aggregates the clinical and commercial data required to generate

Lumleian’s disease state primers. His work has wide application in product development, portfolio management,

and investment strategy for both large pharmaceutical companies and emerging bio-techs. Qingwei, who is fluent

in Chinese and Japanese, leads our work with Asian clients. Qingwei joined Lumleian after obtaining a Master of

Science degree from Harvard School of Public Health. He earned both Bachelor and Master of Engineering degrees

from Kyoto University, Japan, concentrating in materials science.

61