TOPADUR PHARMA AG Finance | Strategy GRABENSTRASSE 11A 8952 SCHLIEREN T +41 44 755 44 61 investors@topadur.com

INVESTMENTS IN BIOTECHNOLOGY – GROUNDBREAKING, SUSTAINABLE AND SETTING NEW TRENDS!

Dear investor,

2017 was a very important second year in our dynamic biotech start-up success

story. The focus in 2018 will be made on the transition from a mere pre-clinical to

a clinical stage biotech company, which will create another key milestone in our

company history. Furthermore, and due to our main objective to achieve proof of

concept as quickly as possible, TOPADUR will in fact become much more attractive

for you as our existing or new investor, as such a progress does automatically

create a significant increase in product and company valuation of our company

over the next few years.

Secondly, the overall global economic situation and the outlook on the investment

environment in 2018 most certainly creates an ideal time window to lean back for

a short moment and spend a few thoughts and reflections which we hope will

allow you to reflect on the biotechnology environment in general and more

specifically a possible investment in our dynamic Swiss start-up, namely an

investment in TOPADUR.

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What will make an investment in TOPADUR a sustainable and profitable

investment asset in your portfolio?

On the one side this will very much depend on the progress made in the next few

months in TOPADUR’s Research & Development unit («R&D») as accurately defined

in our ambitious and challenging business strategy headed by our very

experienced senior management. On the other hand, almost always factors of the

general market environment do play a crucial and significant role, as traditionally

this will influence potential investors strongly in one way or the other.

Therefore, you are invited to follow us in an exciting short review to the pulse of

a booming and prospering investment sector. Additionally, a very positive general

economic outlook for 2018 is proof for a rapid development of the

BIOTECHNOLOGY SECTOR, which is expected by leading analysts to continue over

the next few years as we further outline below. It goes without saying that this

will also have major positive impacts and will not only engrave but also influence

our young and ambitious early-stage start-up company. It will also create a clear

momentum in stimulating us to achieve major peak performances in our endeavor

to create state-of-the-art scientific research over the years to come.

A GENERAL OUTLOOK FOR 2018 IN OUR BIOTECHNOLOGY SECTOR

To overcome volatility and growing political pressure in the global health sector by way of consolidation

Usually analysts use quoted biotechnology shares as benchmark due to the fact that they reflect clear trends and they subsequently allow them to obtain needed conclusions.

However, direct investments (i.e. private equity) within the framework of early-stage start-up companies in the biotechnology sector (e.g. so called «early-stage biotech start-up’s») for the widest part are statistically not even encompassed and if available will only be commented on

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an individual company level. Besides and due to the current interest situation (i.e. current negative interests on bank account holdings in Switzerland) they are still very much in demand with a lot of interested investors and of course a very good alternative investment for potential investors who are not risk-averse.

If we look at the variety of quoted biotechnology shares at the stock exchanges generally most biotechnology shares did recover during the course of 2017 after a clear but short decline in the U.S. in 2017 due to the disappointing bedazzlement of rhetorics of the historic presidential elections back in November 2016, which was named the driving element for those sales. Yet they did not recover successfully to their historic peak values before back in July 2015. According to various key figures and compared to most periods in the past 20 years biotechnology shares were lower priced related to their financially rewarding price-earning ratios (« P/E ratios »)

Towards the end of last year, the majority of leading bank analysts in fact saw strong fundamental signals in the biotech and pharma sectors despite the latest volatilities in the share prices and the political turbulences in the health sector in general which kept the interest alive to invest in biotechnology companies for 2018 and in our opinion with a big likelihood that this trend will even be strengthened.

Even though neutral observers did underline the interest of the investor in biotechnology in the period of 2016 until year-end 2017, it could be noted though that a very competitive environment and the valuation in general stabilized the biotechnology sector, despite occasional fights which did happen. This was mainly due to the worries and anxiety with regard to the drug pricing in the health sector.

Nonetheless long-term growth prospects for the biotechnology and the pharmaceutical sectors in fact did not change. The contrary is the case. The interest in investing in biotechnology particularly in Switzerland still increases month by month which allows us today and in the years ahead to apply a very positive outlook not only for our sector but also for TOPADUR.

Moreover, with hard-earned additional publicity in the public – On November 23, 2017 TOPADUR was awarded with the acclaimed «Swiss Innovation Award 2017» after winning the «Swiss Technology Award 2016» the year before – our company will continue to call the interest of many investors and actually with every step closer to marketability we become much more attractive for the profit-oriented investor.

Only the mentioned fact at the beginning of these lines that TOPADUR will in fact enter «clinical study stage» in 2018 and that we leave the pre-clinical phase behind us is an indication of increased value creation of our early-stage start-up. Consequently, this will reflect quite positively on the TOPADUR share price and consequently also on our overall company valuation.

In the view of TOPADUR Finance | Strategy and on a much broader base, fundamental improvements in biotechnology can also be observed in biotechnology investments. At bottom and most notable in 2017 compared to the previous year 2016 more pharmaceutical products found market access and realized higher prices. Both the biotechnology as well as the

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pharmaceutical industry did in fact profit from increased approvals by the US regulatory authority FDA (U.S. Food and Drug Administration), including the admission of a completely novel (and possibly ground-breaking) cancer therapy which was strongly commented in the market and which attracted major interest in Switzerland. Just to pick out the major M&A event of 2017: the recent acquisition of Advanced Accelerator by NOVARTIS in the health care/biotech sector which was announced back on November 30, 2017.

Generally, also innovation quickened the overall «revival of drug approvals» in the biotechnology sector in 2017. TOPADUR as an early-stage biotechnology R&D company equally very much stands for such a strong innovation and will be a highly interested candidate for «big pharma» in this sector.

Fig. Innovation quickened the overall «revival of drug approvals» in 2017 (drug approvals according to FDA – 1997 – 10.11.2017)

In the past year particular political pressure in the USA did occasionally extract quite some breath in growth and performance of the health sector and could flare-up again in 2018. Uncertainties over the final ramifications of legal changes based on the efforts of the Republican Party in relation to the Affordable Care Act (ACA), which regulates access to public health insurance, was at times a burden to the investment atmosphere in general and in fact did lead to an escape of investment capital of the health care and biotechnology sector. First

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attempts by President Trump to completely abolish « Obama-Care » failed as is well-known, but concerning this matter Trump will continue to put pressure on this topic in 2018.

Although Trump showed his discontent with regard to overprized prescription drugs, his latest tweets and insinuations towards year-end do suggest that his final health care policy could finally turn out surprisingly benevolent. However, it is effectively difficult to find a clear and straight-forward solution with the exception that the FDA would finally want to begin to control prices.

Ultimately, we are of the opinion that it is not constructive to scare or even terrify potential investors with prescription drug regulations which as a matter of fact obviously happened in the past year.

The latest reform proposals in the US did concentrate on initiatives such as a reduction of the deterrent fee of medical costs and the evaluation of « value based » pricing models (in which the compensation for drug producers will be tied to the effectiveness of their compounds). As a matter of fact, these proposals to a wide extent will be extensively supported by the pharma and biotechnology sector. Meanwhile and based on fundamental data, plenty of medical breakthroughs (and some mergers and acquisitions) did recently stimulate biotech shares.

Outlook on a potentially long innovative cycle in biotechnology

According to our internal assessment, innovation in this sector did achieve an unprecedented level. Investors are especially interested in the extensive progress made in gene therapy, immuno-oncology and dual-mode antibodies, but also promising early stage start-ups in the biotechnology sector, such as TOPADUR, in the area of severe wound treatment by way of new and innovative vulnerary drugs do draw interest with private equity investors.

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Furthermore, also biotechnology analysts are pleased that biotech companies concentrate on platforms for the discovery of new compounds and new products, as they do offer many more and much more versatile investment opportunities. TOPADUR is one of them.

TOP-N53

One of the most fascinating new medical therapies, which we currently develop, contains the scientific research for a dual compound for the healing of diabetic foot ulcer (DFU) and chronic wounds in cases where an urgent medical need is a given fact. Reasons for this pressing need for novel and effective therapies are:

• DFU is a leading cause of hospitalizations in diabetes

• 75% of all amputations are diabetic patients

• Only 21% of patients with lower leg amputation survive a 5-year period

• 50 million out of 422 m diabetes patients (WHO 2016) are affected

• Globally DFU is a huge burden to patients and payors with overall estimated costs of EUR 12 bn per year.

Unfortunately, todays available medical therapies only promise limited success. Amongst others this concerns not only the already long-term vacuum therapy and skin transplantations but also blood-oxygen enrichment and more and more growth factors (Becaplermin/only U.S.).

The mentioned transition from a mere pre-clinical to a clinical stage biotech company with our medical compound TOP-N53 will create additional positive effects for the investor. After PoC (Proof of Concept) will be achieved, an increase of both product (TOP-N53) valuation and an overall increase of the company value of TOPADUR will take effect as such a scientific progress automatically increases TOPADUR’s value and subsequently will increase our market potential over the next few years.

TOP-N44

The second major scientific research area of TOPADUR, where we put a major focus on, is scar and keloid prevention. Our research in this area does reflect the worldwide strong need for innovative, anti-fibrotic and anti-inflammatory treatments.

Reasons for this are as follows:

• Up to 15% of general population affected with hypertrophic scars following wounds

• 70% of patients with burns develop hypertrophic scars

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• Keloids occur to 5-16 % in high risk population e.g. Asian, African, Hispanic, which in our view reflects a huge core patient market for such a medical compound

• Annual treatment costs amount to EUR 12 bn

Also in these cases todays available medical treatments and therapies only provide limited

success rates, i.e. corticosteroids (triamcinolone), 5-Fluorouracil, Cryotherapy, Surgery.

The outlook for TOPADUR and its innovative medical compound candidates in this very important and global segment of severe burn-wounds are in our opinion extremely positive and promising for an interested investor due to profit margins inherent thereto.

This second medical compound will in fact provide another huge entrepreneurial potential and with the experience of the market-ready first compound we will concentrate our efforts to this second promising research area which will be underlined by entering clinical phase I during the course of 2018 reflecting TOPADUR’s entrepreneurial ambitions and efforts to provide sustainable R&D development progress for our society.

But back to our general assessment of the biotechnology sector:

Besides clinical data, a decline of the political uncertainty will continue to minimise take-over activities in the biotechnology sector as analysts outlined: concretely, by way of changed corporate taxation, uncertainty of health care politics and increasing perspectives and expectations towards higher drug product pricing for prescriptive drugs made purchasers hesitate in 2017 to buy biotechnology shares. We believe that this will continue to be the case in 2018 and that the investors climate will be quite similar.

On the regulatory side bigger and more significant changes from FDA are not widely expected as they continue to cooperate closely with the biotechnology and the pharma industry which more and more shows a clear commitment to allow patients easy access to new and important new medical drug products, which looks very favourable. Furthermore, there are several higher-ranking trends of importance, both in the health system and in the biotechnology sector, which according to our assessment will continue to support our sector.

One particular aspect being the demographic trend that the world population is aging rapidly (particularly in the industrialized countries). As a consequence, the group of elderly and seasoned patients will need significantly higher volumes of products and services for health care than the younger generation.

Secondly, on the level of the individual corporations, we continue to still see huge progress not only in the scientific area of diabetes research but also in gene-therapy and cancer research as mentioned earlier. Therefore, significant innovation waves will reflect exponential progress in basic research and in the more comprehensive understanding of human biology which slowly start to bear fruit. At the same time, we continue to hold on to our proven and highly tested disciplined scientific approach despite these latest and extremely exciting developments of our competitors in other important biotech research areas.

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We are convinced to offer not a day-to-day investment alternative to our existing and potential investors looking for the not so mundane investment. TOPADUR is going to cover the scientifically relevant field of acute diabetes key medical cases combined with an absolutely central global medical need with a huge marketing and earning potential.

TOPADUR truly an alternative investment for you to consider!

Our dynamic team at TOPADUR; photograph taken in December 2017 in our laboratories in Schlieren/Zurich.

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WHAT EXACTLY IS BIOTECHNOLOGY?

The OECD defines the term «biotechnology» as follows:

« The use of science and technology on living organisms including their components, products and models with the objective to change living and not living materials for the production of knowledge, products and services. »

In this sense, one could also talk about a multi-disciplinary science for the well-being of humanity. Amongst the specific scientific areas found in biotechnology we define biology and bio-chemistry but also physics, biological chemistry, process engineering, materials science and information technology. If we look at it a little bit more closely we can indeed segregate between white, green and red biotechnology. The «red biotechnology» is a relatively young but more and more important discipline which evolved only with modern genome scientific research. Its focus lies in the development and the improvement of medical drugs and clinical diagnostics. TOPADUR’s central focus in this specific research field lies in the development of innovative drugs for severe wound healing problems in hospitals for which we contribute with ground-breaking new ideas with the aim to set new medical therapy standards. (Would you mind contacting our website for further and more detailed information www.topadur.com).

With a steadily increasing significance of bio-pharmaceuticals the limitations between pharma and biotechnology are truly becoming blurred. Today, most of the leading « big pharma » companies - which clearly do set the trend in our industry in recent years - changed their traditional business models and migrated to expand with biotechnology departments and units. Mostly, thanks to liquidity reserves they were very active in take-overs or insourcing which they continuously seek and find in the biotechnology markets worldwide. Our company TOPADUR is in the process to become a very interesting candidate for strategic partnership or alliances not only for « big pharma ».

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OUR BIOTECHNOLOGY SECTOR – SOME FIGURES

BiotechPark in Schlieren near Zurich (Switzerland) – «Home of Topadur»

The biotechnology industry did undergo a significant growth phase in the past couple of years and returned as a very good alternative investment opportunity to investors which are not risk-averse: after the burst of the technology bubble around the turn of the millennium, biotechnology started to become more than a niche player again and the days of holding back were over. Today, biotechnology is indeed a multi-billion dollar industry and besides «big pharma» is heavily courted by Venture Capital (VC) firms which underlines the huge earning potential also for private investors. A lot of companies found their way to profitability and are represented today with one or several products on the market. 2015 biotechnology companies generated a turnover of roughly USD 120 bn which represents a doubling of the figure compared to 2010. The future tendency is continuingly fast growing with the respective earning potential.

The above figures are also underlined by the following diagram:

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2016 an overall total of 22 medical drugs obtained readiness for marketing. In the meantime in 2018 every second approved medical drug stem from the laboratories of biotechnology companies in which the biotechnology center in Zurich near the University of Zurich – the «BiotechPark Schlieren» - contributes significantly with its innovation due to undeniable advantages and the close proximity to the prime leading university (ETH Zurich) which raised the standards in scientific research in Switzerland. The biotech information company IMS Health assumes that until year-end of 2018 approximately 30 to 40 new products will be accepted for «readiness for marketing» by the relevant authorities in Europe (EMA) and the USA (FDA). With such additional income by way of scientific alliances more and more biotech companies accomplish the jump into their profit zone.

Fig. « PROFITABILITY AND PERFORMANCE OF US BIOTECH-COMPANIES (NBI)

In the upcoming years of all sectors in the health care industry, biotechnology will retain its sustainable and dynamic growth rates thanks to its innovation power. Another argument for the increased growth potential of biotechnology is stated in the fact that their scientific research focus primarily lies in medical diseases for which so far, no adequate treatment was available. Likewise, TOPADUR set its R&D focus on infectious diseases (i.e. acute diabetes mellitus (DFU) and severe brand-wounds for which no adequate medical therapy is available which will make TOPADUR a first-entrant in the market once market readiness will be achieved. For the overall biotechnology sector other main illnesses cover scientific research on the one side for illnesses which occur more and more with advanced age, such as cancer, arthritis and most of all so called neurodegenerative diseases such as Alzheimer’s or Parkinson’s disease which according to statistical data will heavily augment in the years to come.

On the other side, biotechnology companies do also address diseases such as hepatitis, multiple sclerosis or certain genetic diseases which today suffer from an insufficient medical therapy drug offering. The annual potential for peak sales for new medical drug treatments in the above disease sectors almost always lies in the USD billions which of course will also be reflected in the growth figures and estimates for the period 2017 – 2019:

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FIG. GROWTH RATES 2017 until 2019E

Global Pharma 4%

Global Biotech 10%

Quel le: PHARMA: Bloomberg Intel l igence (BRLPHACV Index); BIOT ECH: NBI + ex U S Biotech from Bloomberg;

Apri l 2017.

The partially very high therapeutical costs lead to basic discussions over financing of medical drugs for such therapies. By contrast, we see the costs which accumulate for public health insurance fund coverage and governmental health systems which could be drastically reduced by way of those new therapies and add another important public argument for investors to support such biotechnology inventions. Annual spending for medical drugs do continue to be significantly lower than those which would arise for hospital treatment which again is in favour of investments in biotechnology.

Thus, an investment in biotechnology is not only forward-looking but also creates a vey personal momentum for you as investor as you will become part of a success story. Have a look at the next presentation and why a private equity investment (on a convertible loan basis) will make sense for you and offer you above-average profit expectations and finally why it will make sense to grant us your appreciated trust.

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25.01.2018 MD/em