Developing Treatments for Orphan Kidney Disease - Diabetic - - PowerPoint PPT Presentation

CSE | XRX INVESTOR PRESENTATION – FEBRUARY 2018 Non Confidential

Developing Treatments for Orphan Kidney Disease - Diabetic Nephropathy and Polycystic Kidney Disease

INVESTOR PRESENTATION

JUNE 2018

This document contains forward-looking information pursuant to applicable securities law. All information that addresses activities or developments that XORTX expects to occur in the future are forward-looking statements. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. However, they should not be regarded as a representation that any of the plans or objectives will be achieved as actual results may differ materially from those expressed or implied by the forward-looking information set forth in this document due to risks and uncertainties affecting XORTX, including access to capital, the successful completion of clinical trials and receipt of all regulatory approvals. The forward-looking statements in this document are based on a number of assumptions which may prove to be incorrect, including assumptions concerning general business and economic conditions, positive clinical trials and the availability of financing. XORTX assumes no responsibility to update forward-looking statements in this document.

FORWARD LOOKING STATEMENT

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INVESTOR PRESENTATION

JUNE 2018

• XORTX Therapeutics is developing therapies to treat kidney disease where no

therapeutic option exists, and based on XORTX patent protection. XORTX has two “first-in-class” opportunities: 1/ Large Market – Type 2 Diabetic Nephropathy; Granted US 9,155,749 2/ Orphan - polycystic kidney disease; Composition/Formulation of Oxypurinol – PCT 2014

• PKD Foundation recognition of XORTX and commitment to collaborate with XORTX

towards the goal of developing a new class of highly active and potentially important treatments for patients with polycystic kidney disease.

ABOUT XORTX

Future Steps Towards Strategic Vision

• OTC – QB listing, followed by NASDAQ uplisting
• License proprietary Xanthine Oxidase Inhibitor for Diabetic Nephropathy from Japan

Pharma Co.

• Two Phase II ready programs - Q3 2018

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INVESTOR PRESENTATION

JUNE 2018

• Dr. Allen W. Davidoff,

Ph.D.

• Mr. Dave Matthews,

CMA, MBA

• Dr. Alan Moore, Ph.D.,

Clinical and Regulatory Brian Mangal Co-founder, CEO CFO Co-founder, Chief Director, BD

• 15 years drug development

experience focused on clinical and regulatory program development as senior management in pharmaceutical R&D (two IND applications, two phase I studies, seven phase II studies, and one NDA

• Former Chief Scientific

Officer, VP Product Development/ co-founder of Stem Cell Therapeutics Corp. (now Trillium TRIL: NASDAQ and TSX) and Senior Scientist and Head of Pharmacology, Cardiome Pharma Corp.

• 25 years in senior finance

roles in the life sciences and technology sector working with companies ranging from start-ups through to large, profitable multinationals in North America and Europe, including Aspreva Pharmaceuticals, Genome DX, and Contextual Genomics Inc.

• Extensive clinical

development experience and 23 years of senior management experience in pharmaceutical R&D. During his esteemed career, he has completed 11 investigational new drug (“IND”) applications or supplemental IND’s, 15 phase I studies, 12 phase II studies, 7 phase III studies and 2 new drug

• applications. Most recently

CEO of BetaStem Inc.

• 15 years of clinical

development experience was former Director of Biostatistics for Cardiome Pharma Corp, Led Biotmetrix

• f Cardiome’s clinical
• programs. Clinical

development experience includes design, analysis and reporting on over 50 clinical trials, three FDA submissions, one TPD submission, a successful EMEA submission. Prior to Cardiome, Everest Clinical Research, specializing in dealings with NIH in the US and Biostatistician at Pharmacia/Pfizer, worked on the successful NDA for Linezolid and numerous successful trials with Celecoxib.

MANAGEMENT

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INVESTOR PRESENTATION

JUNE 2018

CAPITAL STRUCTURE

Market Capitalization ~$16 million Common Shares Outstanding 62,919,691 Warrants 4,004,740 Options 4,561,000 Fully-diluted Shares Outstanding 71,385,431 Cash on Hand $900,000 Current Burn Rate ~$60,000 per month Public Listings XRX : CSE | XRTXF : OTCQB Securities Registration Options TSX up-listing, NASDAQ up-listing

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INVESTOR PRESENTATION

JUNE 2018 ~10,000,000 patients with DN ~700,000 patients per year in end stage renal disease

Diabetes Facts

• ~9.5% of North Americans
• ~40% of patients with diabetes develop

evidence of nephropathy

• In the US, diabetic nephropathy (DN)

accounts for about ~45% of new cases of ESRD (3%)

• US Population - ~360 million
• Progressive Kidney Disease ~46 million
• Diabetes ~32 million
• Diabetic Kidney Disease - ~10 million
• AD-Polycystic Kidney Disease -~120,000

THE PROBLEM & OPPORTUNITY

Progressive Kidney Disease

• Accelerating decline of filtration (GFR)
• Increased creatinine
• Increased urine protein loss
• Abdominal pain
• Declining health / wellness

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INVESTOR PRESENTATION

JUNE 2018

Diabetic Nephropathy is responsible for ~45% of end stage renal disease (ESRD) while, Polycystic Kidney Disease is responsible for ~5%

END STAGE RENAL DISEASE – A CRISIS

ESRD - a life altering event – * 4 hours per day on dialysis

* loss of ability to work full time * dependence on family * pain and declining health are constant burden * shortened survival – only 50% of patients survive two years

Any therapy that can maintain kidney health and avoid dialysis would redefine how kidney disease is treated.

• No drugs are currently approved to treat progressive kidney disease
• An opportunity to provide first-in-class therapy exists

Source: Curr Opin Nephrol Hypertens – 22(2): 185-192, 2013

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INVESTOR PRESENTATION

JUNE 2018

OXYPURINOL – a SAFE and EFFECTIVE XOI

Oxypurinol:

• Well characterized as safe and effective for decreasing uric acid
• Has been administered to >700 patients to date, to treat allopurinol intolerant

gout, and is well tolerated in even patients sensitive to allopurinol

• NDA was submitted to the FDA for the orphan disease “allopurinol intolerant gout”

and received an FDA approvable letter (2005).

• Despite being well characterized, Oxypurinol is not approved for clinical use

anywhere in the world

• XORTX’s new oxypurinol formulation/composition patent/PCT application (beyond

2034) is ideal for positioning as a treatment for orphan disease indications such as ADPKD

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INVESTOR PRESENTATION

JUNE 2018

Lead Program: Autosomal dominant polycystic kidney disease (ADPKD) – an orphan disease.

XORTX TECHNOLOGY PLATFORM

OXYPURINOL Reformulation: ‘Enhanced bioavailability and improved dosing range’ filed as composition of matter - worldwide Patent - ‘PCT’ 2014 Strong reproducible clinical trial evidence:

• uric acid lowering
• improved endothelial function
• superior tolerability compared to

allopurinol

Ideal for repositioning in orphan disease indications.

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INVESTOR PRESENTATION

JUNE 2018

Recent Phase II Clinical Trial Success in progressive kidney disease increases the probability for translational success of this program.

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Lowering and managing Blood Uric acid stops or slows kidney disease progression.

Goicoechea et al. (2010) Effect of allopurinol in CKD progression and CV risk. Clin J Am Soc Nephrol 5:1388-1393

Chronic Kidney Disease ( ~50% diabetic patients)

(Han M, et al., Hyperuricemia and Deterioration of Renal function in ADPKD, BMC Nephrol 15:63-2014)

Polycystic Kidney Disease

(n=57,56) n=32; 21 GFR: Glomerular Filtration Rate UA: Serum Uric Acid

IDENTICAL PHASE II PILOT RESULTS IN:

Chronic Kidney Disease and Polycystic Kidney Disease – Demonstrate a Reproducible Benefit from Uric Acid Lowering

INVESTOR PRESENTATION

JUNE 2018

SUA SUA GFR – Rate Decline GFR –Rate Decline

Dialysis Dialysis Renal Events Renal Events

• 15
• 10
• 5

5 10 15 20 25 UnTreated Treated

Effects of SUA lowering on CKD--> DURABILITY after 7 Years

BIG PICTURE - Each year in the US, ~ 650,000 patients

start dialysis at a cost to government of ~90,000 per

• patient. Recent phase II trials suggest this number can be

halved which would save nearly ~$30 B per year. **The data suggests > 5 years delay in ESRD onset

Years of Quality of Life

Goicoechea et al. (2015) Allopurinol and Progression of CKD and Cardiovascular Events: A long-term Follow-up, Am J Kid Dis

CONTROLLING URIC ACID LEVELS

Promises a ‘durable’ life changing therapy for Chronic Kidney Disease

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INVESTOR PRESENTATION

JUNE 2018

Diabetic nephropathy:

• Most common cause of chronic kidney

disease (CKD) and end-stage renal disease (ESRD) worldwide. (Collins et al., 2012)

• A five-year observational study, showed

that a 1 ± S.D. increase in uric acid was associated with a 21% increased incidence

• f CKD (Zoppini et al., 2012)

XRx-221 is a novel, highly potent uric acid lowering agent that can decrease and maintain UA, and has the potential to provide benefit to patients with T2-DN.

Q1< 3.2 mg/dL Q2= 4.4 mg/dL Q3 =5.0 mg/dL Q4 > 6.2 mg/dL

NORMAL Range HIGH Range

(n=1449)

Several large observational studies have shown that hyperuricemia has a pathogenic role in the development and progression of CKD (Jalal, Chonchol, Chen, & Targher, 2013; Zoppini et al., 2012).

Kidneys of TYPE 2 DN patients are exquisitely sensitive to uric acid injury.

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INVESTOR PRESENTATION

JUNE 2018

• No drugs are currently approved in the US, to treat progressive kidney disease caused

by Diabetic Nephropathy or Polycystic Kidney Disease

• XORTX granted patent claims: “use of all uric acid lowering agents” as a therapy

including all classes of agents– Xanthine oxidase inhibitors, Uricosurics and Uricase

• Drugs with similar MoA to oxypurinol: allopurinol and febuxostat have a monograph

warning that affects ‘off label’ use…

• Competitive advantage: Once approved would be the first in class drug for this

purpose and potentially best in class for individual effectiveness, and potency

COMPETITIVE LANDSCAPE & ADVANTAGE

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INVESTOR PRESENTATION

JUNE 2018

PROGRAM 1: T2-DN - Commercial Market Opportunity and High Socio-Economic Impact

• ~10 million individuals have progressive Diabetic Nephropathy in the US
• ~650,000 patients per year begin dialysis as a result of end stage renal disease at an estimated cost

per year per patient of dialysis of ~US$90,000

• Peak sales years four to nine estimated at $2.4 B/year
• A “First-in-class” therapy positioned to re-define how progressive kidney disease is treated and

validated/ de-risked based on existing clinical pilot trial successes with lesser agents

• Phase II proof of concept with this superior agent would be expected to result in a lucrative

licensing agreement.

• Several options for lead molecules i) In-License Japan Co., ii) New US XOI, iii) 2- in-house molecules

MARKET OPPORTUNITY & IMPACT

In-license/(IND) I-----------------------------Phase IIb study Q2 2019----------------------I

$5 M Financing 2018 2019 2020

Type 2 Diabetic Nephropathy

DN License

$18 M Financing 2021

$5M $8M $5M

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INVESTOR PRESENTATION

JUNE 2018

USE OF PROCEEDS | MILESTONES

1 European – Diabetic nephropathy patent grant ~6 months 2 License of proprietary XOI for type 2 DN – Japan Co. ~$5M payment ~6 months 3 $450,000 – FDA Investigational New Drug application – Type DN ~10 months 4 $1.8 Manufacture GMP - Clinical Drug ~10 month 5 $ Pharmacology and Toxicology Testing ~12 months 6 $12 million – Initiate and conduct Phase II Type 2 DN trial ~30 months 7 $500,000 Post phase II – Reporting – FDA ~36 months 8 $3,000,000 Operations For 36 months

Value Proposition derived from activities – ~ $15M spent over ~36 months has potential to translate into post phase II licensing deal Typical deals …~$800M upfront/milestones and ~15% royalty for 10 year product life

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INVESTOR PRESENTATION

JUNE 2018

PROGRAM 2: Polycystic Kidney Disease – Commercial Market Opportunity

• ~120,000 individuals ADPKD in the US
• Given population estimate, premium pricing is estimated to be ~$35,000/ patient
• Peak sales years four to seven estimated at $1.8 B/year
• Currently, eight specialty pharmas have expressed interest in ADPKD program upon phase

II clinical study PoC

• Average Licensing deal - ~US$300M upfront/milestones
• Royalties at ~20%

MARKET OPPORTUNITY & IMPACT

$10 M Financing $5 M Financing 2018 2019 2020

ADPKD License

Polycystic Kidney Disease Program pre-IND Orphan Designation IND Manufacturing I---Phase II study Q1, 2019---------------------------------------------

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INVESTOR PRESENTATION

JUNE 2018

Value Proposition derived from activities – ~$15M spent over ~36 months has the potential to become a post-phase II licensing deal. Typically, ~$400M upfront/milestones and ~15% royalty for 10 year product life.

USE OF PROCEEDS | MILESTONES

1 $450,000 – FDA Investigational New Drug application – PKD Phase II ~6 months 2 $150,000 – Orphan Designation – Polycystic Kidney Disease (PKD) ~4 months 3 $1.6 million manufacture of clinical grade GMP drug for Phase II PKD trial ~10 months 4 $7.5 million – Initiate and conduct Phase II PKD trial ~30 months 5 $500,000 post Phase II reporting and FDA meetings @~32 months 6 Post phase II - Complete Licensing deal for PKD program ~36 months 7 ~3,000,000 - Operations for ~36 month

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INVESTOR PRESENTATION

JUNE 2018 IND ----------------------Phase IIb study Q2 2019------------------------------

$10 M Financing $5 M Financing 2018 2019 2020 Type 2 Diabetic Nephropathy DN License ADPKD License Polycystic Kidney Disease

Orphan Designation -- IND/ Mfg --Phase II study Q2 2017------------------------------

$18 M Financing Value Creation and Advancements to date:

• new formulation and Intellectual Property – XRx-008 (Composition of Matter – PCT -> 2034)
• characterization bioavailability
• two new classes of dual action Xanthine Oxidase Inhibitors
• Granted – US Patent for Diabetic Nephropathy … awaiting EU grant.
• potential co-development deal for new highly potent XOI uric acid lowering agent

Currently undertaking $10 - $15M mezzanine round, followed by NASDAQ IPO of US$50M

CONSOLIDATED FINANCING NEEDS | MILESTONES

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CSE | XRX INVESTOR PRESENTATION – FEBRUARY 2018 XRX:CSE

Contact Information:

• Dr. Allen Davidoff

adavidoff@xortx.com 1-403-455-7727

INVESTOR PRESENTATION

JUNE 2018

Allen W. Davidoff, Ph.D.

• W. Bruce Rowlands

Paul van Damme Allan Williams Co-founder, CEO Chairman Director / Audit Chair Director

• 15 years drug development

experience including broad range of clinical and regulatory experience and senior management experience in pharmaceutical R&D (two IND applications, two phase I studies, seven phase II studies, and one NDA

• Former Chief Scientific

Officer, VP Product Development and co- founder of Stem Cell Therapeutics Corp. (now Trillium Therapeutics listed

• n TSX and Nasdaq) and

Scientist and Head of Pharmacology, Cardiome Pharma Corp.

• Biotechnology and

investment banking background

• Former Senior VP, Lorus

Therapeutics, a leading Canadian biotechnology company and VP and Director, Dominick and Dominick Securities Canada

• Current director and

former Chairman and CEO, Eurocontrol Technics Group Inc., a TSX Venture Exchange listed company

• Extensive career in industry

and finance including senior positions with a number of Canadian and US public companies

• Biotech industry focus

through experience with GlycoDesign, Allelix Pharmaceuticals Inc. including participating in the sale of Allelix to NPS Pharmaceuticals, Inc.

• Currently Managing

Director, WCM Capital, Director, OncoQuest Inc. and CFO, Structural Genomics Consortium

• 30+ years capital market

and public company experience including being instrumental in raising over $250 million in project capital

• Extensive mergers and

acquisitions experience, most recently relating to the acquisition of Calico Resources Corp., a TSX Venture listed company by Paramount Gold Nevada Corp., a New York Stock Exchange listed company

• Current director,

Greatbanks Resources Inc., Maritime Resources Corp., both TSX Venture listed companies and True Grit Resources Inc., a NEX listed company

BOARD OF DIRECTORS

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INVESTOR PRESENTATION

JUNE 2018

• Dr. Richard J. Johnson Jr.,

MD

• Dr. Henk E. D. J. ter

Keurs, MD, Ph.D.

• Dr. Daniel Feig,

MD

• Dr. William R. Hiatt,

MD Scientific Advisory Board Scientific Advisory Board Clinical Advisory Board Clinical Advisory Board

• Professor of Pediatrics and

Associate Dean for Research and Development, University of Colorado School of Medicine

• Cardiologist, LIBIN

Cardiovascular Institute of Alberta

• Nephrologist, Children’s of

Alabama and Director of the Pediatric Hypertension Program and Pediatric Renal Transplant Program at the University of Alabama, Birmingham

• Novartis Foundation

Endowed Professor for Cardiovascular Research at the University of Colorado School of Medicine, Division of Cardiology, FDA advisory committee – CardioRenal Division

SCIENTIFIC & CLINICIAL ADVISORY BOARDS

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INVESTOR PRESENTATION

JUNE 2018

All Uric Acid Agents | Oxypurinol Form | XRx-221

Composition of Matter (2035) Composition of Matter (2034) Method of Use

All Uric Acid Agents Oxypurinol Formulation

XR XRx-221

PATENT PROTECTION COVERAGE LAYERS

High Blood Pressure √ Granted – US Pending WW Hyperuricemia and health consequences

• f Hyperuricemia

Insulin Resistance √ Granted – US Pending WW Metabolic Syndrome √ Pending Pending WW Fatty Liver Disease √ Pending Pending WW Cardiovascular Diabetes Pending WW Diabetes Diabetic Nephropathy Diabetic Neuropathy Diabetic Retinopathy Diabetic Limb Loss √ Granted – US Pending WW Pending WW Pending WW Pending WW Kidney Disease Pending WW US 9,155,740 Diabetic Nephropathy Allowed Claims:

• 1. A method of improving nitric oxide

bioavailability in renal arteriole and glomerular cells to treat uric acid-induced diabetic nephropathy in a patient in need, wherein said patient in need has diabetes, a uric acid level higher than 5.5 mg/dl, impaired endothelial function, and elevated albumin excretion, said method comprising administering to said patient a composition comprising a uric acid lowering agent (UALA) according to a regimen effective to maintain said patient’s average serum uric acid level at or below 5.5 mg/dl and to increase nitric

• xide bioavailability in renal arteriole and

glomerular cells, wherein said UALA is a xanthine oxidase inhibitor.

• 2. The method of claim 28, wherein said xanthine
• xidase inhibitor is allopurinol or febuxostat, or

both.

• 3. The method of claim 28, wherein said regimen is

effective to maintain said patient's average serum uric acid level at or below 5.5 mg/dl for at least 12 weeks.

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