Andrew Gallagher Programme Manager

1. Plants as Providers of Fine Chemicals Conference 2012 Andrew Gallagher Programme Manager

2. Introduction An innovative life science company based near Oxford with research facilities in China that uses its plant chemistry platform to develop patented and well-characterised botanical actives for use in pharmaceuticals, nutraceuticals, and personal care products Who is Phynova?

3. Plants as a Source of Medicines • Plants contain a wide array of secondary metabolites with inherent biological activity • As plants can’t evade or fight back against predators, they rely on these chemical defences to fend off animal and micro-organism attack • The ability to synthesize secondary metabolites has been selected throughout course of evolution and address specific needs of the plant, e.g.: • Volatile scents to attract pollinators to enhance fertilization rates • Toxic chemicals to ward off pathogens and herbivorous browsers • Compounds to suppress the growth on neighbouring plants • This diversity of chemical compounds makes plants a valuable source of new medicinal compounds Schmidt et al. (2007). Revisiting the ancient concept of botanical therapeutics. Nature Chemical Biology; 3 (7): 360-366

4. Plants as a Source of Medicines - Continued • A large proportion of small-molecule drugs today are either: • Natural products • Derived from natural products (semi-synthetically), or • Have a natural product inspired pharmacophore • Abundance of natural product-based drugs begs the question of whether plant secondary metabolites & their derivatives perform better than randomly synthesized compounds? • Plant metabolites, enzymes, receptors, and regulatory proteins have common evolutionary roots and they co-evolved to interact with one another • Structures and functions may have diverged over time but, on average, natural products make better ligands for human clinical targets than randomly synthesized compounds Schmidt et al. (2007). Revisiting the ancient concept of botanical therapeutics. Nature Chemical Biology; 3 (7): 360-366

5. Magic Shotgun vs Magic Bullet • Modern drug discovery has traditionally had a magic bullet approach, i.e. one molecule, one receptor • More and more often this approach is seen as inadequate and diseases are being treated with a combination of many single-component drugs • Combination therapies are particularly suited for complex chronic diseases such as cancer, diabetes, infectious diseases • Plants have always relied on mixtures of biologically active molecules to defend themselves from diseases and predation • Plant extracts can act as a combination therapy in a single composition, i.e. one extract, multiple targets Phynova embraces the magic shotgun ethos and all its products are purified plant extracts

6. Phynova’s Development Platform 10 000 plants used in Chinese medicine Patents & Regs (UK) Cost effective Human use reducesrisk Discovery Engine (China) Development Path (UK) • Demand driven • High value markets • Unmet needs THMPs Pharma products Functional ingredients Phynova utilises the rich history of TCM as a discovery engine to identify and develop patented medicinal products for global healthcare markets

7. Pharma Case Study - Melokinex™ The development model utilised by Phynova streamlines the R&D process so that drug candidates in high value, low competition markets are rapidly identified and advanced to proof-of-concept

8. Introduction: Postoperative Ileus Postoperative ileus (POI) is a temporary dysmotility of the GI tract following surgery POI is accepted as an inevitable complication of major surgery Although rarely life-threatening it is associated with: Considerable patient discomfort Increased hospitalisation Increased hospital resource utilisation Incidence of POI following abdominal surgery is 6.3% - 10.7%, but some studies report incidence of up to 20%1 1. Wittbrodt E. The impact of postoperative ileus and emerging therapies. Pharmacy and Therapeutics, 2006; 31(1): 39-59.

9. Economic Burden Associated with POI + 4 days hospitalisation + $6k hospital costs Based on conservative estimates of POI incidence (6%) and the annual number of abdominal surgeries in the USA (~12m) the increased financial burden to US healthcare is $5 billion annually (Taken from: Wittbrodt E. The impact of postoperative ileus and emerging therapies. Pharmacy and Therapeutics, 2006; 31(1): 39-59).

10. Multiple Factors Contribute to POI Anaesthesia Surgical trauma Exogenous opiates for pain relief Hormones and neuropeptides Autonomic nervous system Endogenous opiate release Inflammation Enteric nervous system

11. Current TreatmentsApproaches for POI Only one approved pharmaceutical treatment for POI – alvimopan (Entereg®), a peripherally acting μ-opioid receptor antagonist Treatments in development include ghrelin receptor agonists, 5HT4 receptor antagonists opioid receptor antagonists Other treatment options include use of nasogatric tubes, early postoperative ambulation and feeding, epidural analgesia, Rescue medication such as laxatives, and anti-inflammatories Even though there are treatment options available, benefit is often marginal

12. MelokinexTM: Data Overview In vivo studies show that Melokinex™ improves mechanically-induced and drug-induced bowel immotility in mice and rats Promotes motility in normal mice Long history of safe human usage of the constituent plant – used traditionally as an emetic Clean acute toxicology in mice (LD50 not detectable) MTD is 229x clinical dose Causes no skin irritation or sensitization (allergic reaction) Clinical data shows it significantly alleviates POI

13. Promotion of GI Motility in Normal & Hypofunction Animals Normal mice Atropine & surgery induced hypofunction ** ** ** ** * ** ** ** ** ** ** ** ** ** ** ** * ** ** ** A single administration of Melokinex™ significantly (**p<0.01; *p<0.05) shortened excretion intervals and increased the quantity of the faeces in normal, and chemically & surgically induced hypofunction mice

14. Effective Agent Throughout the GI Tract Intestine enterokinesia in the small intestine (n=10) ** ** ** ** P<0.01 Intestine enterokinesia in the large intestine (n=10) ** ** ** ** ** P<0.01 Melokinex™was shown to be effective in increasing enterokinesia in both the small and large intestine

15. Effects Colon Enterokinesis Proximal colon constriction in anaesthetised rats (n=5) Positive control (neostigmine) Negative control Melokinex 5mg/kg Melokinex 10mg/kg ## ** ## ## ## ** ** ## ** ## ## ## ** ## ## ** ## # ** ** ** ## ** ## ## ** # * ** ** ** * # ## # ## ** ## * # * ## # ** ** * Notes: Compared with self, before medication: # P<0.05, ##P<0.01 Compared with negative control: * P<0.05, ** P<0.01 The contraction waves and amplitude indices significantly increased within 30 minutes after a rectal administration of Melokinex in anaesthetised rats (peak between 30-60 minutes)

16. Phase II Safety & Efficacy Study Design Objective Investigate the efficacy and safety of Melokinex Design Primary: First flatus/stool after surgery Secondary: First bowel sound Sample Size End points Active dose 72 patients Placebo 72 patients Randomised, double blind, placebo controlled, multicentre

17. Kaplan-Meier Survival Curve: 1st Flatus (FAS) Efficacy Analysis – Primary Endpoints Active Placebo First passing flatus after surgery • Data evaluated using Kaplan-Meier survival curve • Median time to first passing flatus after surgery was 87hrs hours on placebo and 58 hours on active (P<0.0001) • Lower and upper quartiles (25%, 75%) were 65 hours and 94 hours for placebo • Lower and upper quartiles (25%, 75%) were 42 hours and 76 hours for active Rate (%) P < 0.0001 Patients receiving Melokinex on average experienced first flatus 29 hours earlier than those who received the placebo Hourspost-surgery

18. Efficacy Analysis – Primary Endpoints Kaplan-Meier Survival Curve: 1st Bowel Movement (FAS) First passage of stool after surgery • Median time to first bowel movement after surgery was 111 hours on placebo and 77 hours on active (P<0.0001) • Lower and upper quartiles (25%, 75%) were 88 hours and 128 hours for placebo • Lower and upper quartiles (25%, 75%) were 43 hours and 92 hours for active Active Placebo Rate (%) P < 0.0001 Hours post-surgery Patients receiving Melokinex on average had a 1st bowel movement 34 hours earlier than those who received the placebo

19. Weak Affinity for Typical GI Motility Targets Melokinex has shown a limited (significant response >±50%) in a series of GI-related enzyme and radioligand binding assays Data does not however support the strong pharmacological effect seen and suggests that the promoting of GI motility might be contributed by a multivalent mechanism of action

20. Functional Ingredients Case Study - IminoNorm™ & PhynoRadiance™ The multiple secondary metabolites not only make plants excellent therapies for complex, multivalent diseases, but also allows them to be used for different conditions

21. The Convergence of Food and Pharma • Global shift from reactive treatment of health disorders through the use of drugs, to proactive, preventative approach by consumers • Two big trends are shaping the health and wellness markets: • Natural movement that centres on a healthy balanced diet • Nutraceutical movement that focuses on adding beneficial active ingredients to achieve specific health functions

22. IminoNorm™ - Solution for ‘Diabesity’ • IminoNorm is a functional ingredient that significantly reduces blood glucose levels and improves the glycaemic index of carbohydrate rich goods • IminoNorm acts on multiple biochemical pathways including • Inhibiting carbohydrate digestion • Output of glucose from glycogen stores

23. IminoNorm™ In vivo Activity • IminoNorm™ was shown to potently reduce post-prandial blood glucose levels in vivo • ig50mg/kg test sample is as effective as miglitol(Glyset®)at lowering blood glucose levels • Interestingly, the ip route also reduced blood glucose levels, supporting the multiple mechanism of actions suggested by enzyme studies

24. Human Glucose Tolerance Study • Co-ingestion with 50g soft sugar resulted in a reduction of the AUC 2hr and AUC 3hr by 53.5% and 50.8% respectively compared with placebo • Activity comparable with the control, 50mg miglitol • The strong efficacy supports the magic shotgun approach as lower levels of synergistically acting compounds work together to produce a potent result

25. Other Roles of α-Glucosidase in the Body CNX/CRT Folding α-glucosidase I α-glucosidase II α-glucosidase II Copper incorporation Cu2+ Cu2+ • Glucosidase plays a key role in the glycan processing and maturation of the enzyme tyrosinase • The glycan is sequentially trimmed by α-glucosidase I and II allowing the attachment of molecular chaperones calnexin (CNX) and calreticulin (CRT) through their recognition on monoglucosylated N-glycans of tyrosinase • Tyrosinase is folded by the chaperones resulting in active tyrosinase • α-Glucosidase inhibitors prevent the necessary oligosaccharide trimming required for chaperone attachment and folding. Symbols: blue square = N-acetyl glucosamine, blue circle = mannose, green triangle = glucose 25

26. Role of Tyrosinase in Melanin Synthesis Tyrosinase, the rate-limiting enzyme in the biosynthesis of melanin, is an ideal therapeutic target in combating hyperpigmentation. Reduction of the activity of tyrosinase has dramatic consequences on pigmentation. 26

27. PhynoRadiance™ - A Novel Ingredient for Skin Whitening Produced from same plant as IminoNorm Inhibits melanin formation through a novel mechanism of action Reduces skin hyperpigmentation Clinical proven safe and efficacious 27

28. PhynoRadiance™ - Clinical Results The study reported that the formulation induced a significant lightening effect after 28-days of twice-daily usage There was a significant increase in skin lightness (L* parameter) There was a significant decrease in skin pigmentation (ITA parameter) 86% of subjects reported they perceived their skin to be more uniform in colour 81% of subjects reported that they found their skin clearer 86% of subjects would continue to use the product and 96%would purchase it

29. Advantages & Challenges of Botanical Drugs • Botanical drugs offer many advantages over NCEs: • Historical use reduces product failure rate • Lower concentrations of multiple active reduces toxic burden • Botanical drugs are however a highly specialised field with unique challenges • High cost of screening and difficulty in isolation and characterisation of active fractions • Prior knowledge of the plants reduces this cost • Product quality and batch-to-batch consistency are essential in order to satisfy both regulatory and consumer demands • Standardisation only possible when bulk of bioactive components is known and their range of levels has been established • Products have to be produced to pharmaceutical GMP

30. Strict Process Control from Plant Raw Material to Finished Product Plant growing site selection Application of GAP guidance QC on raw materials including authenticity of the plant species, microscopic identification, impurity tests and assay for chemical markers Contamination tests including heavy metals, pesticides and aflatoxins

31. Strict Process Control from Plant Raw Material to Finished Product • GMP manufacturing of the plant extracts and the finished product • Batch-to batch consistency ensured through use of: • Qualitative and quantitative fingerprinting of marker compounds e.g. HPLC, GC-MS, HPTLC • Bioassays to ensure biological activity (marker compound may not be the active component) • EU pharmacopoeial contaminant levels

32. Regulatory Support for Botanical Drugs • Botanical drugs represent the third paradigm in drug development • Detailed guidelines on toxicology requirements if previous human use • Shorter development times and reduced development costs • Regulatory parity with synthetics& biologicals

33. Global Interest in TCM • Asian medicine has been receiving a lot of attention recently: • Dec 2011 Nature Outlook supplement on Asian medicine

34. New GSK R&D Unit Focusing on TCM

35. Contact Details Andrew Gallagher Programme Manager Email: agallagher@phynova.com Tel: +44(0) 1993 880 700 PHYNOVA GROUP LTD PHYNOVA HOUSE, 16 BLENHEIM OFFICE PARK, LONG HANBOROUGH, OXON OX29 8LN, UK www.phynova.com