Early in the Clinic, But Drugging Proven Targets Reduces Risk and Hastens Pace of Development: Initiating BUY/$18 TP

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1 Checkpoint Therapeutics, Inc. May 18, 2017 BUY (OTCQX: CKPT, $10.75) Early in the Clinic, But Drugging Proven Targets Reduces Risk and Hastens Pace of Development: Initiating BUY/$18 TP Jonathan Aschoff, Ph.D We are initiating coverage of Checkpoint Pharmaceuticals, Inc. with a Buy rating and 12 month target price of $18. Checkpoint s lead candidate, CK-101, is a 3rd-generation covalent EGFR inhibitor initially in development for non-small cell lung cancer (NSCLC) and currently in Phase 1. Checkpoint s other assets are preclinical and include PARP inhibitor CK-102, anti-pd-l1 antibody CK-301, anti-gitr antibody CK-302, BET inhibitor CK-103, and an anti-caix antibody. To be conservative, given the portfolio s early stage, our valuation is based solely upon projected future revenue to Checkpoint from our projected US co-promotion revenue and EU royalties from CK-101 in NSCLC, CK-102 in breast and ovarian cancer, and CK-301 in NSCLC, with success elsewhere (CK-103, CK- 302, and anti-caix antibody) serving as potential upside to our valuation. The most important investment catalysts for Checkpoint, for the time being, are its future clinical data readouts. Phase 1 CK- 101 results in NSCLC are expected in 2H17 such that Phase 2 can begin by YE17, and we note the absence of any Phase 1 safety concerns thus far. If CK-101 shows strong efficacy early in Phase 2, we would expect Checkpoint to design and submit a straightforward Phase 3 protocol while finishing Phase 2, such that Phase 3 could potentially start by YE18. Streamlining clinical development is facilitated by drugging proven targets with which the FDA is already familiar, as the agency is more likely to allow Phase 3 to begin after success in a single Phase 1/2 trial. Preclinically, CK-101 shows a competitive selectivity for mutant EGFR over wild-type EGFR and a reduced selectivity in this regard with other 3 rd -generation EGFR TKI s has led to the termination of several would-be competitors. Checkpoint is addressing multiple large market opportunities with a broad array of drug candidates. The multiple indications for drugs targeting PD-L1 and PD-1 currently amounts to about $5B in sales, with a projected CAGR of over 20% through 2025, clearly a large market in which a mere 1% market share amounts to about $300M in revenue in The current market for CK-101 can be approximated by the roughly 40,000 mutant EGFR NSCLC patients that competitor Tagrisso could potentially treat, which amounts to a $5B opportunity at Tagrisso s price. The over $1B CK-102 market opportunity in the US in BRCA positive ovarian cancer is currently addressed by 3 other PARP inhibitors, Lynparza, Rubraca, and Zejula. The is also an over $2B CK-102 market opportunity in the US in BRCA positive breast cancer. We project the US launches for CK-101, CK-102 and CK-301 to occur in 2021, 2022, and 2022, respectively, and for the EU launches of same to occur in 2022, 2023, and 2023, respectively. Our financial projections and timing of launches take into account the more rapid clinical pace we expect of drugs directed at known targets and about a 20% WAC price discounting to peer drugs, conservatively assuming that Checkpoint s drugs do not necessarily demonstrate a Phase 3 clinical advantage to their closest peers. A main competitive strategy for Checkpoint is to develop its own combination therapies, such that it can win in the marketplace on price compared to drugs sold individually by competitors and potentially better efficacy. Checkpoint had about $32M in cash at the end of 1Q17, sufficient to support its activities through 2018, by our projections. Source: Big Charts Rev ($M) 2016A 2017E 2018E Ticker CKPT 1Q 0.28A 0.69A - Last Price $ Q 1.25A 0.69E - Mkt Cap ($M) $271 3Q 0.55A 0.69E - Fiscal YE 31-Dec 4Q 0.5A 0.69E - 50d ADV (000) 75.6 Annual 2.57A 2.77E 2.77E Short int (M) 0.0 S/O (M) 25 EPS 2016A 2017E 2018E Annual Hi $ Q -0.17A -0.2A - Annual Lo $5.00 2Q -0.25A -0.19E - Cash ($M) $32 3Q -0.24A -0.2E - Debt ($M) 4Q -0.38A -0.22E - *Note: pricing is as of market close on 5/17/17 Annual -1.04A -0.81E -0.84E Source: Company reports, Opus National Capital Markets estimates Please see pages for Important Disclosures 1

2 Exhibit 1: Product pipeline Source: Company documents Valuation We derive our 1-year target price of $18 via a DCF analysis, assuming a 25% discount rate that is applied to all cash flows and the terminal value, which is based on a 4 multiple of our projected 2025 EBITDA of about $500 million. Checkpoint s most advanced anti-epidermal growth factor receptor (EGFR) candidate, CK-101, is currently in the Phase 1 portion of a Phase 1/2 trial for EGFR mutated non-small cell lung cancer (NSCLC), followed by the company s anti-poly ADP-ribose polymerase (PARP) candidate, CK-102, which should start Phase 1b in 2018 for solid tumors with existing DNA repair defects, including BRCA mutations, and its anti-pd-l1 candidate, CK-301, for which, an investigational new drug (IND) application is expected to be filed in mid We base our valuation for Checkpoint on our forecasted revenue from CK-101 for EGFR-mutated NSCLC, CK-102 for BRCA-positive ovarian and breast cancer, and CK-301 for NSCLC in the US and EU. We project CK-101 s annual cost to be about $86,000 in the US and $58,000 in the EU due to the stricter pricing scheme under the EU s universal healthcare system. Similarly, we assume CK-102 s annual cost to be about $130,000 in the US and $86,000 in the EU, and CK-301 s annual cost to be about $77,000 and $51,000 in the US and EU, respectively. Our financial model takes into account our assumption that Checkpoint builds a US sales team and thus we project the company to outlicense its drugs for all ex-us commercialization (net royalty rate of 20%) as it advances its pipeline behind these drugs. Upon regulatory approval in the US, we project all three drugs to take an additional 6 months for approval in the EU, followed by the typical pricing and reimbursement discussions and therefore to be launched in the EU one year after the US launch date. We forecast CK-101 to be marketed in the US to treat EGFRmutated NSCLC in 2H21, followed by an EU launch in 2H22, and conservatively undergo a low single-digit market penetration. With an s- shaped uptake curve, we project CK-101 to attain peak US net sales and EU net royalty revenue for Checkpoint of about $139 million in 2025 for EGFR-mutated NSCLC. Additionally, we forecast CK-102 to be marketed in the US to treat BRCA-positive ovarian cancer in 1H22, followed by an EU launch in 1H23, and undergo a single-digit market penetration with an s-shaped uptake curve that generates peak US net sales and EU net royalty revenue for Checkpoint of about $42 million in BRCA-positive ovarian cancer. Similarly, we forecast CK-102 to be marketed in the US to treat BRCA-positive breast cancer in 1H22, followed by an EU launch in 1H23, and undergo a conservative single-digit market penetration and generate US net sales and EU net royalty revenue for Checkpoint of about $140 million in BRCApositive breast cancer. Lastly, we project CK-301 to launch for NSCLC in 1H22 in the US and 1H23 in the EU, and undertake a very lowsingle digit s-shaped penetration with a peak US net sales and EU net royalty revenue for Checkpoint of about $303 million. Notably, our valuation is based solely upon revenue from CK-101, CK-102 and CK-301 in only the most advanced indications and thus revenue from May 18,

3 any additional indications and products, such as CK-103, for which an IND is expected to be filed in 2H17, as well as any collaborative revenue from potential future partners, would represent upside to our valuation. Checkpoint Therapeutics overview Checkpoint is an immuno-oncology biopharmaceutical company focused on the acquisition, development and commercialization of novel, non-chemotherapy, immune-enhanced combination treatments for patients with solid tumors. As a currently 35% controlled subsidiary of Fortress Biotech (NASDAQ: FBIO-NR-$3.96), Checkpoint Therapeutics was incorporated in Delaware in 4Q14 with executive offices located in New York City. Checkpoint aims to build a platform to combine anti-cancer targeted agents with immuno-oncology agents to maximize anti-tumor effect and achieve pricing leverage by owning the combination drug assets at least in the US (Exhibit 2). Currently, the company is developing a portfolio of fully human immuno-oncology targeted preclinical antibodies discovered at the Dana-Farber Cancer Institute, including antibodies targeting programmed death-ligand 1 (PD-L1), named CK-301, glucocorticoid-induced tumor necrosis factor receptor related protein (GITR), named CK-302, and carbonic anhydrase IX (CAIX), as both monotherapy and combination therapy with each other or other agents. Checkpoint expects to submit an IND application for its anti-pd-l1 agent in mid-2017, and an application for anti-gitr and anti- CAIX agents in Checkpoint also has an additional preclinical inhibitor of the bromodomain and extra-terminal (BET) protein, named CK-103, for which, the company plans to submit an IND application in 2H17. Checkpoint acquired and is developing two additional oral, small-molecule, targeted anti-cancer agents, consisting of an inhibitor of mutated EGFR, named CK-101, currently being evaluated in the Phase 1 portion of a Phase 1/2 trial, and an inhibitor of poly ADP-ribose polymerase (PARP), named CK-102, which should start Phase 1b in In addition, Checkpoint will seek to add additional immunooncology drugs as well as other targeted therapies to create wholly-owned proprietary combinations that leverage immune function along with complimentary mechanisms and the ability to bundle the drugs to facilitate competing on price in regions where Checkpoint retains full or co-promotion rights. Exhibit 2: Develop targeted anti-cancer agents alone and in combination to treat patients with solid tumors Source: Corporate documents Targeted anti-cancer agents CK-101: mutated EGFR inhibitor program Checkpoint is developing an oral, third-generation covalent EGFR inhibitor against the mutated EGFR T790M in second-line NSCLC as well as against EGFR L858R and del 19 mutations in first-line NSCLC. NSCLC represents about 85% of all lung cancer and has been proven difficult to treat due to poorly understood pathological mechanisms. The 5-year survival rate in advanced NSCLC is less than 5% with a May 18,

4 median survival of less than 2 years. Recent advancement in research on cell signaling pathways that control cell survival has identified genetic and regulatory aberrations to suppress cell death and promote cell division that result in a poor prognosis in NSCLC, including the overexpression of EGFR found in 10% to 35% of NSCLC patients (Lynch et al. 2004). Studies also have shown that EGFR expression is associated with frequent lymph node metastasis and poor chemo-sensitivity that reduce survival time in NSCLC. First-generation EGFR inhibitors, gefitinib and erlotinib, were approved by the FDA over a decade ago to treat advanced NSCLC and have been widely used. Both agents are orally available small molecules that inhibit ATP binding along with subsequent signal transduction and downstream effect, blocking several cellular processes including cell growth, cell proliferation, cell differentiation and cell migration. Data demonstrates that first-generation EGFR inhibitors produce reliable responses and improve objective response rate as well as progression free survival versus chemotherapy in selected patients with advanced NSCLC. Nevertheless, despite initial clinical benefit, acquired resistance to EGFR inhibitors usually develops after an average of 10 to 12 months of treatment. The EGFR T790M mutation, present in approximately 50% to 60% of disease progression cases, has been identified as the predominant mechanism of acquired resistance to first-generation EGFR inhibitors that decreases the affinity of the EGFR inhibitors to bind to the EGFR kinase domain, thereby substantially decreasing efficacy. Second-generation EGFR inhibitors, such as afatinib, form irreversible, covalent attachments to the EGFR kinase domain and thus have an improved in vitro potency against EGFR T790M. However, second-generation EGFR inhibitors have not provided meaningful benefit in NSCLC, as they fail to overcome T790M-mediated resistance in patients due to dose-limiting toxicity resulting from nonselective inhibition of wild-type EGFR, which is believed to drive the commonly observed side effects of skin rash and diarrhea. Therefore, thirdgeneration EGFR inhibitors, including CK-101, emerged to provide high selectivity against the T790M mutation while sparing normal EGFR, thereby resulting in much improved tolerability and safety. In 4Q15, a third-generation EGFR inhibitor, osimertinib, received accelerated FDA approval in patients with metastatic EGFR T790M mutation-positive NSCLC who were refractory to prior treatment, based on an overall response rate of 59% in a pooled analysis of 411 patients from two single-arm trials. Third-generation EGFR inhibitors have also shown preclinical activity against other activating EGFR mutations, including L858R and del 19, in first-line NSCLC. CK-101 has the potential to be effectively used in NSCLC as both a monotherapy or combination therapy with other anti-tumor immune response potentiating compounds and targeted therapies, such as checkpoint inhibitors (PD-1 or PD-L1), cmet inhibitors and MEK inhibitors. Preclinical data in mice xenograft models demonstrated that CK-101 selectively inhibits cancer cell proliferation of cell lines expressing mutant EGFR, with the most sensitive being cell lines with EGFR del 19 and L858R/T790M double mutation. Specifically, in a xenograft study of EGFR del 19, CK-101 selectively inhibited tumor growth by up to 90% at all 3 dose levels tested in a dose-dependent manner (p <0.001; Exhibit 3). In another xenograft study of L858R/T790M double mutation, CK-101 also selectively inhibited tumor growth at all 3 dose levels tested in a dose-dependent manner by up to 95% (p <0.001; Exhibit 3). In addition, CK-101 was over 100-fold less potent against wild-type EGFR than against the L858R/T790M double mutation. CK-101 is expected to demonstrate a more favorable safety profile over the approved drugs osimertinib and afatinib, based on its higher selectivity for mutants and limited targeting of wild-type EGFR. In vitro, CK-101 showed an IC 50 of 689 nm in the A431 cell line representing wild-type EGFR, by contrast to 280 nm for osimertinib and 34 nm for afatinib, suggesting higher selectivity for CK-101 and thus a potentially safer drug. Also, in a xenograft study of A431 cells (containing wild-type EGFR), cell growth was not inhibited by any of the 3 doses of CK-101 examined, but was inhibited by the afatinib positive control (Exhibit 4). CK-101 s selectivity for mutant EGFR over wild-type was also shown in an IC 50 analysis alongside Tagrisso and afatinib (Exhibit 4). Furthermore, by contrast to the hyperglycemia side effects observed with rociletinib (development suspended) due to significant inhibition of herg, leading to QTc prolongation and suppression on insulin-like growth factor 1 receptor (IGF1R) and insulin receptor (INSR), CK-101 did not show either effect in preclinical studies, including a telemetry study in dogs to assess QTc prolongation. In 4Q16, Checkpoint dosed the first patient in a first in human, two part, open label Phase 1/2 trial of CK-101 (NCT ). The Phase 1 dose escalation portion of the trial is evaluating the safety and tolerability of ascending doses of CK 101 in approximately 30 patients with advanced solid tumors to determine the maximum tolerated dose and recommended Phase 2 dose. The Phase 2 portion of the trial is planned to commence in 4Q17 in order to evaluate objective response rate (defined as the rate of complete responses or partial responses per RECIST Version 1.1 as assessed by an independent central review) with monotherapy CK-101 as the primary endpoint in approximately 60 patients with EGFR T790M mutation positive NSCLC. Enrollment for the Phase 1 portion of the Phase 1/2 trial is ongoing, and a few patients have enrolled into the 100 mg, 200 mg, 400 mg and 800 mg QD cohorts and demonstrated that CK-101 has been safely administered at these dose levels, given the absence of adverse events to date. We expect the Phase 2 portion to enroll a total of about 60 patients, but for Checkpoint to design and submit a Phase protocol to the FDA while enrolling the last 30 patients, should it observe a positive efficacy signal in the first 30 patients, thereby streamlining the drug s pace through the clinic. Phase 3 could May 18,

5 potentially start by YE18, as long as an early Phase 2 efficacy signal is observed, making for a straightforward registration strategy. A 1 st line EGFR NSCLC expansion cohort is planned as part of the current CK-101 Phase 1/2 trial, and Checkpoint also plans to evaluate CK-101 as a combination therapy with its proprietary anti-pd-l1 candidate (IND application expected in mid-2017), once the latter has proven efficacy in the clinic, as the combination could enhance the anti-tumor immune response and extend treatment benefit. From a competitive standpoint, the EGFR inhibitor from Clovis Oncology Inc. (NASDAQ: CLVS-NR-$50.50), rociletinib, was terminated in 2Q16 after an unsuccessful attempt at accelerated approval. In 2Q16, Hanmi Pharmaceutical (KRX: NR-358,000KRW) and partner Boehringer Ingelheim (private) received approval for 3 rd -generation EGFR TKI olmutinib, but so far only in South Korea. In 2Q17, Astellas (TYO: 4503-NR-1,429JPY) halted its Phase 3 trial in NSCLC with EGFR TKI ASP8273, but details as to why are limited outside of our speculation that ASP8273 could not be dosed high enough to achieve the required efficacy and safety, likely due to binding the wild-type EGFR. Novartis (NYSE: NVS-NR-$79.86) is developing a 3 rd -generation EGFR TKI, EGF816, currently in Phase 1 and Phase 2 trials alone and in combination with other agents, but it also appears to have a higher than desirable affinity for wild-type EGFR. Pfizer (NYSE: PFE-NR- $32.23) is also developing a 3 rd -generation EGFR TKI, PF , that is in a Phase 1/2 trial. If Tagrisso proves to remain the only viable 3 rd -generation EGFR TKI, CK-101 would have the luxury of sharing an over 40,000 patient mutant EGFR market in the US, a $5 billion annual opportunity at Tagrisso s price, but we ultimately expect more competition than just Tagrisso. Exhibit 3: CK-101 evaluation of efficacy in human xenograft models Source: Company documents Exhibit 4: CK-101 evaluation of selectivity in a human xenograft model and Sources: Company documents and poster from AACR Annual Meeting 2017, respectively May 18,

6 CK-102 (formerly CEP-9722) PARP inhibitor program CK-102 is an oral, small molecule selective inhibitor of PARP-1 and PARP-2 enzymes, in development for multiple solid tumors with existing DNA repair defects, such as BRCA1 and BRCA2 defects. In each cell cycle, DNA is damaged thousands of times, and such damage must be repaired. BRCA1 and BRCA2 are proteins that are important for the repair of double-strand DNA breaks, and if mutated, the defects can lead to errors in DNA repair that may eventually result in cancer. PARP is a family of proteins involved in a number of normal cellular processes, including cell cycle regulation and DNA repair in single-strand DNA breaks. If PARP is inhibited, single-strand DNA would remain unrepaired, which are then converted during replication to irreparably toxic DNA double-strand breaks. In tumors cells with existing DNA repair defects, the double-strand breaks formed cannot be effectively repaired, ultimately causing programmed cell death. Notably, normal cells are able to tolerate the DNA damage generated by PARP inhibition because of an efficient homologous recombination mechanism. In addition, PARP inhibitors are believed to have promising effects when used with radiotherapy. The main function of radiotherapy is to produce DNA double-strand breaks, causing severe and unrepairable DNA damage that results in tumor cell death; however, it can only be given up to a certain level due to intolerable side effects in healthy tissues. Combining radiation therapy with PARP inhibitors offers promise, as the double-strand breaks generated by radiotherapy in tumor cells with BRCA1 and BRCA2 mutations are further accompanied by the unrepairable single-strand breaks induced by the inhibitors, resulting in either a more powerful therapy with the same radiation dose or a similarly powerful therapy with a lower radiation dose. The high selectivity along with the underlying mechanism of action of PARP inhibitors support an efficacious and safe rational for their inclusion in the clinic. Breast and ovarian cancer are the most common tumors associated with BRCA1 and BRCA2 mutations, accounting for about 5-10% of all breast cancer (Antoniou et al, 2003) and 15% of all ovarian cancer (Pal et al, 2005). PARP inhibitors have been proven to show promising activity as monotherapy against multiple tumor types, including breast and ovarian cancer, as well as in combination with anti-cancer agents that induce DNA damage. The FDA has already approved 3 PARP inhibitors, Lynparza (olaparib; $57 million sales in 1Q17) and Rubraca (rucaparib; $7 million sales in 1Q17), and Zejula (niraparib) as monotherapy for germline BRCA-mutated advanced ovarian cancer in 4Q14, 4Q16, and 1Q17 respectively. CK-102 (formerly known as CEP-9722) was previously developed by Cephalon, Inc, a subsidiary of Teva Pharmaceutical Industries, Ltd. (NYSE: TEVA-NR-$30.30) which submitted an IND to the FDA in 4Q10 for trials in advanced or metastatic solid tumors. In a preclinical model, RT4 xenografts with urothelial carcinoma, an indication also commonly associated with DNA-repair proteins, received oral treatment of placebo or CK-102 at 100 or 200 mg/kg/day. Xenografts were subjected to immunohistochemistry for apoptosis (cleaved caspase-3 (cc-3)) and angiogenesis (CD31). Results demonstrated that CK-102 exhibited dose-dependent antitumor activity in RT4 xenografts. CK-102 with 200 mg/kg daily dosing was superior to control (p=0.04) but 100 mg/kg CK-102 was not (p=0.26). Immunohistochemistry of xenografts showed a significant increase in cc-3 and decrease in CD31 with both doses (p<0.05). In addition, biomarker-driven evaluation of PARP inhibitors in urothelial carcinoma was justified, as the activity of CK-102 correlated inversely with homologous recombination repair response to DNA damage. Between 2009 and 2013, Cephalon conducted three Phase 1 trials to evaluate the maximum tolerated dose, safety, pharmacokinetics and pharmacodynamics of CK-102, as a single agent and in combination with chemotherapy in patients with advanced solid tumor cancers. First, Study-1065, a first-in-human trial of CK-102, was an open-label, dose-escalating Phase 1 trial that enrolled 26 patients in France and the UK with advanced solid tumors to determine the maximum tolerated dose of CK-102 and to evaluate the safety, pharmacokinetics and pharmacodynamics of the combination treatment of daily CK- 102 and temozolomide administered at 150 mg/m 2 /day on days 1 to 5 of 28-day cycles. The trial showed that the combination of CK-102 and temozolomide was adequately tolerated with no indication of potentiation of the known toxicities of temozolomide. One patient with melanoma treated with CK-102 at 1,000 mg/day demonstrated a confirmed partial response lasting 5.8 months and the patient did not progress on the trial. Moreover, 4 patients treated with CK-102 at 300 to 750 mg/day experienced stable disease for at least two months. CK-102 at 750 mg/day in combination with standard 150 mg/m 2 /day course of temozolomide was recommended as the regimen for further trials. Second, Study-102, a dose-escalation, open-label Phase 1 trial, enrolled 18 patients in France and Belgium who received at least 1 dose of CK-102 to identify the maximum tolerated dose and to evaluate safety, pharmacokinetics and pharmacodynamics of CK- 102 in combination with gemcitabine and cisplatin in patients with advanced solid tumors. Gemcitabine was administered at 1,250 mg/m 2 intravenously on day 1 and day 8 of each 21-day cycle; cisplatin was administered at 75 mg/m 2 intravenously on day 1 of each 21- day cycle, after the infusion of gemcitabine. Due to the limited tolerability of the cisplatin and gemcitabine regimen and the variable exposure to the active moiety of CK-102 during the trial, the trial was terminated before reaching its objective of determining the maximum tolerated dose of CK-102 when given in combination with cisplatin and gemcitabine. Lastly, Study-2051, a multicenter, openlabel Phase 1 trial, enrolled 44 patients in the US who received at least 1 dose of CK-102 to determine the maximum tolerated dose of CK- May 18,

7 102 when administered as a single-agent in patients with advanced or metastatic solid tumors. 750 mg twice daily (1,500 mg total) was determined to be the maximum tolerated dose for single agent CK of the 44 patients achieved stable disease in the trial, but the variable systemic exposure to the active moiety of CK-102 within each cohort precluded any definitive efficacy conclusions. Checkpoint plans to develop CK-102 as both a monotherapy and in combination with other anti-tumor agents (to achieve a pricing advantage and given the arguably crowded nature of the PARP inhibitor market), including its novel immuno-oncology and checkpoint inhibitor antibodies currently in development, such as CK-301. Due to the variable systemic exposure of the active moiety of CK-102 in the prior Phase 1 trials caused by poor absorption, Checkpoint is evaluating a reformulation of CK-102 to improve its bioavailability and plans to have the new formulation ready by 2H17. Checkpoint anticipates initiating a Phase 1b trial in the next 12 months in advanced or metastatic solid tumors with existing DNA repair defects. CK-103 BET inhibitor program Checkpoint is developing CK-103, an oral, preclinical inhibitor of BET protein, BRD4, for the treatment of advanced and metastatic solid tumors, including those associated with an elevated level of c-myc oncogene expression, a growth promoting transcription factor. BET inhibitors are potential therapeutic targets in cancer, because they play critical roles in regulating the transcription of key regulators for cancer cell growth and survival, such as c-myc, as the binding of the drug inhibits interaction between BET proteins and acetylated histones and transcription factors. Though the FDA has not approved any BET inhibitor, research has shown that small molecule inhibition of BET bromodomains can lead to selective killing of tumor cells across multiple hematologic cancers and solid tumors. In a preclinical MV4:11 xenograft model with acute myeloid leukemia, oral administration of CK-103 (formerly known as JBET050) resulted in a much stronger tumor growth inhibition than MK-8628 (also known as OTX015; suspended) at comparable doses (Exhibit 5). Recent studies also showed that BET inhibitors can be instrumental in overcoming resistance to other targeted therapies when used in combination. Examples include the use of BET inhibitors in combination with γ-secretase inhibitors for T cell acute lymphoblastic leukemia and RAFinhibitor for RAF-inhibitor resistant melanomas carrying the BRAFV600E mutation. Checkpoint needs to complete repeat dosing in dogs with GLP grade CK-103 and then plans to file an IND for the drug by YE17. Exhibit 5: Molecular imaging for CK-103 in human AML SCID beige mice Source: Company documents Anti-CAIX research program Checkpoint is developing an anti-caix monoclonal antibody (mab) for the treatment of patients with renal cell carcinoma (RCC) in combination with an anti-pd-l1 and/or anti-gitr antibody, as well as with other anti-tumor immune response potentiating compounds and/or targeted therapies. The drug is designed to recognize and destroy CAIX expressing cells via antibody dependent cell mediated May 18,

8 cytotoxicity (ADCC) and complement dependent cytotoxicity (CDC). CAIX is upregulated by hypoxia inducible factors and represents a prototypic tumor-associated antigen that is overexpressed in over 85% of RCC cases. Preclinical data published in Molecular Cancer (Chang et al, 2015) validated that human anti-caix mabs inhibit carbonic anhydrase activity, thereby leading to immune-mediated killing of RCC cells, including nature killer (NK) cell-mediated ADCC and CDC as well as macrophage-mediated antibody-dependent cellular phagocytosis. The killing activity correlated positively with the level of CAIX expression on RCC tumor cell lines. Results also demonstrate that anti-caix mabs inhibit migration of RCC cells in vitro and are shown to be capable of mediating the human immune response, including tumor infiltration of NK cells and activation of T cells in an orthotopic tumor xenograft humanized mouse model. Checkpoint s anti-caix program is currently preclinical, a relatively low priority program, and the company anticipates submitting an IND to the FDA in the latter part of 2018 or earlier part of Immuno-oncology agents CK-301 anti-pd-l1 research program Checkpoint s preclinical high affinity anti-pd-l1 mab, CK-301, is a fully human antagonistic antibody designed to bind to PD-L1 and block the interaction between PD-L1 and programmed cell death protein 1 (PD-1). The immune system employs a series of checkpoint proteins to protect normal and healthy tissues from being attacked by the immune response and thus induce self-tolerance and prevent autoimmune diseases. Checkpoint proteins are composed of receptors on the surface of activated T cells and their corresponding ligands on the surface of antigen-presenting cells. A key immune checkpoint is triggered when PD-1 engages with its ligand PD-L1, resulting in a negative regulation of effector T cell function and proliferation. This mechanism is often co-opted by multiple tumors types, in which, PD- L1 is upregulated and its high expression level contributes to the malignancy of various cancer types by interacting with PD-1 to inhibit anti-tumor T cell function (Exhibit 6). The FDA approved atezolizumab for the treatment of bladder cancer and NSCLC in 2Q16 and 4Q16, respectively, and extensive target validation has also been shown through multiple Phase 2 and 3 trials in other drugs in development. A number of preclinical and clinical studies conducted with multiple third party drugs have demonstrated that antibodies which block the interaction of PD-1 with its ligands can induce anti-tumor T cell responses and lead to complete and lasting tumor eradication in selected patient populations. Also, confirmed ORR was cited in the range of 20% to 30% in the FDA labels for the approved anti-pd-1 drugs in patients with metastatic melanoma. We note that durvalumab received accelerated approval after showing only a 17% response rate in 182 advanced bladder cancer patients, not exactly a high bar to hurdle, in our view. The currently $5 billion global market for PD-1 and PD-L1 inhibitors is expected to grow at a 23% CAGR through 2025, which yields a market of over $30 billion, a mere 1% of which yields $300 million in revenue to Checkpoint as a valuation base case, especially if Checkpoint can enhance its ability to compete by bundling 2 or more of its drugs in a very competitively priced combination therapy. In preclinical studies involving CK-301 and surrogate antibody molecules that were produced from the sequences of avelumab, atezolizumab or durvalumab, CK-301 showed similar binding to PD-L1 as did the surrogate antibodies in enzyme-linked immunosorbent assays (ELISA) and cell-based competition assays (Exhibit 7). Also, in an assay measuring inhibition of a nuclear factor of activated T cells (NFAT) reporter caused by PD-L1 binding to PD-1, CK-301 completely reversed reporter inhibition at concentrations of less than 1 µg/ml, and the IC 50 of the dose response curve was 80 ng/ml (Exhibit 8). In addition, CK-301 demonstrated its ability to enhance IFN-gamma secretion in an allogeneic mixed lymphocyte reaction (MLR) assay using primary human T-cells and immature dendritic cells and also trigger ADCC and CDC processes. Earlier findings suggested that CK-301 had similar sub-nanomolar affinity for cynomolgus monkey PD-L1 as human PD-L1, hence Macaca fascicularis was chosen for preclinical toxicology and safety pharmacology studies. Single dose administration of CK-301 in these monkeys up to the highest tested dose of 100 mg/kg was shown to be safe and exhibited linear dosedependent pharmacokinetics over the 1 to 100 mg/kg dose range, with a half-life of 15 days at 100 mg/kg. Checkpoint plans to develop CK-301 for multiple oncology indications, including NSCLC and RCC, in which, potent therapeutic anti-tumor responses due to blocking of PD-1 and PD-L1 interaction have been demonstrated with approved products. Checkpoint believes that CK- 301 has the potential to be effective in many oncological indications as a monotherapy, or in combination with other anti-tumor and targeted therapies. Checkpoint expects to file an IND for CK-301 in mid-2017, start a dose escalation Phase 1 in 3Q17, be done with determining a proper dose by mid-2018, with a potential Phase 3 start in early 2019 in the US and other countries, a speedy clinical path much like has been done with other anti-pd-l1 drugs. The Phase 3 primary endpoint is expected to be PFS in high PD-L1 expressing patients and the intended label would resemble that of Keytruda. We expect Phase 1 to be a standard 3 by 3 dose escalation design in the intended patient population (i.e., not all comers) of those who express the drug s target and have 1 st or 2 nd -line lung cancer, melanoma, bladder cancer, head and neck cancer, or classic Hodgkin s lymphoma, essentially any indication in which an anti-pd-l1 is May 18,

9 already approved. Phase 1 will first be conducted in Australia and New Zealand, with patient expansion cohorts, and with enrollment eventually expanded to Asia to accelerate recruitment. Notably, in early 2016, Checkpoint commenced chemistry, manufacturing and control development activities, which included the construction and testing of a production cell line, the development of a manufacturing process for production of its antibodies, as well as the development of suitable analytical methods to characterize them. The company developed control mechanisms to satisfy Good Manufacturing Practice (GMP) requirements and scaled-up manufacturing capacities in 2H16 to accommodate future manufacturing needs. Notably, the anti-pd-1/l1 space represents an over $30 billion market size. Checkpoint plans to offer a meaningful price discount on CK-301, once approved, and given the large market size, even a minimal market penetration, in light of the high competition, would result in reasonable sales for Checkpoint. Our valuation only includes CK-301 for NSCLC, and thus including other relevant indications would provide upside to our valuation. Exhibit 6: PD-L1 and effect of anti-pd-l1 antibodies Source: Company documents Exhibit 7: CK-301 shows similar binding to PD-L1 by ELISA as other clinical antibodies Source: Company documents May 18,

10 Exhibit 8: CK-301 reverses T-cell inhibition caused by PD-L1 in the NFAT reporter assay Source: Company documents CK-302 anti-gitr research program Checkpoint s preclinical anti-gitr mab, CK-302, is a fully human agonistic antibody that is designed to bind and trigger signaling in GITR expressing cells and downregulate the immunosuppressive activity of natural regulatory T (Treg) cells in order to induce the activity of effector T cells (Exhibit 9). GITR is a co-stimulatory molecule of the tumor necrosis factor receptor (TNFR) family that is expressed on activated T cells, B cells, natural killer (NK) cells as well as Treg cells. Inhibition of GITR has been shown to increase proliferation, activation and cytokine production of CD4+ and CD8+ T cells. Though there has been no FDA approved drug targeting GITR, third party developmental GITR-specific agonistic mabs have been shown to induce tumor regression in vivo through the activation of CD4+ T cells, CD8+ T cells and NK cells in a number of tumor cell lines. Notably, compared to the class competitors in development, CK-302 demonstrated a stronger effect in activating the TNFa pathway than TRX518 (Phase 1) from Leap Therapeutics (NASDAQ: LPTX-NR-$7.95) and MK-4166 from Merck (NYSE: MRK-NR-$63.00) (Phase 1; Exhibit 10). Comparable effects were also observed in the measurements of cytokine release and T-cell proliferation. Checkpoint plans to develop an anti-gitr antibody for multiple oncology indications, including NSCLC and RCC, in which, potential antitumor effects of anti-gitr therapy has been supported preclinically and clinically. Anti-GITR antibodies have the potential to be effectively used in many oncological indications as a monotherapy, or in combination with anti-pd-l1 or anti-caix antibodies, as well as with other anti-tumor immune response potentiating compounds and targeted therapies. Checkpoint has completed the process of identifying and optimizing a lead compound to select as an initial clinical candidate. The company commenced IND-enabling studies for CK-302 in 4Q16 and plans to file an IND application in Exhibit 9: GITR and effect of anti-gitr antibodies Source: Corporate documents May 18,

11 F o ld in c re a s e o f N F -k B lu c ife r a s e r e p o r te r a c tiv ity o v e r b c k g rd Opus National Capital Markets Exhibit 10: TNFa pathway activation 2 0 T R X (L e a p ) C K (C h e c k p o in t) M K (M e rc k ) g /m l Source: Corporate documents Intellectual property and licensing deals In 1Q15, Fortress Biotech announced the formation of a new subsidiary company, Checkpoint Therapeutics, to develop a portfolio of fully human immuno-oncology antibodies and targeted therapies. In 1Q15, Checkpoint entered into a license agreement with Dana-Farber Cancer Institute, Inc., and in 4Q15, Checkpoint obtained an exclusive, worldwide license to Dana-Farber s patents for the Dana-Farber antibodies. The field of use license includes all prophylactic, therapeutic or diagnostic uses in humans or animals excluding use in chimeric antigen receptor technology. The Dana-Farber antibodies were generated in the laboratory of Dr. Wayne Marasco, MD, PhD, a Professor in the Department of Cancer Immunology and AIDS at Dana-Farber. Under the terms of the agreement, Checkpoint paid Dana-Farber an up-front fee of $1 million and granted Dana-Farber 5% of its common stock on a fully-diluted basis, equal to 500,000 shares valued back then at $32,500. The agreement included an anti-dilution clause that maintained Dana-Farber s ownership at 5% until such time that Checkpoint raised $10 million in cash in exchange for common shares. Pursuant to this provision, at the end of 3Q15, Checkpoint granted to Dana-Farber an additional 136,830 shares of common stock valued at approximately $0.6 million and the anti-dilution clause thereafter expired. Dana-Farber is eligible to receive payments of up to an aggregate of approximately $21.5 million for each licensed product upon Checkpoint s successful achievement of certain clinical development, regulatory and first commercial sale milestones. In addition, Dana-Farber is eligible to receive up to an aggregate of $60 million upon Checkpoint s successful achievement of certain sales milestones based on aggregate net sales, in addition to royalty payments based on a tiered low to mid-single digit percentage of net sales. Following the second anniversary of the effective date of the agreement, Dana-Farber will receive an annual license maintenance fee, which is creditable against milestone payments or royalties due to Dana-Farber. The license will terminate on a country-by-country and product-by-product basis until the royalty term in such country with respect to such product expires, at which time the agreement will expire in its entirety with respect to such licensed product in such country. To date, Checkpoint has incurred $1 million of upfront licensing and milestone payments under the license agreement. The licensing also granted Checkpoint intellectual property related to certain antibodies. The intellectual property includes issued patents in a number of countries, including the US and EU, as well as pending patent applications in several countries elsewhere. The issued patents and pending patent applications relate generally to compositions and methods of treatment involving antibodies against CAIX, PD-L1 and GITR. In particular, Checkpoint has exclusive rights under US Patent No. 8,466,263, directed to CAIX antibodies, which is scheduled to expire no earlier than July Its EU counterpart is in force in Switzerland, Liechtenstein, Germany, France and the United Kingdom. A Canadian counterpart patent has also issued. Both the EU and Canadian counterpart patents, as well as any pending applications outside the US, are scheduled to expire no sooner than December The PD-L1 segment of the portfolio includes patent applications pending in the US, Australia, Canada, EU, Israel and Korea. Any patents maturing from these pending applications will expire no sooner than October The GITR segment of the portfolio includes May 18,

12 international application No. PCT/US2015/054010, filed in October Any national stage applications, which are pursued off of this international application (including one in the US), would expire no earlier than October In connection with the license agreement with Dana-Farber, in 1Q15, Checkpoint entered into a global collaboration agreement with TG Therapeutics (NASDAQ: TGTX-NR-$11.10) to develop and commercialize the anti-pd-l1 and anti-gitr antibody research programs in the field of hematological malignancies. Checkpoint retains the right to develop and commercialize these antibodies in solid tumors. TG paid Checkpoint $500,000, representing a reimbursement for their share of the licensing fee, and Checkpoint is eligible to receive potential milestone payments up to an aggregate of approximately $21.5 million for each product upon TG s successful achievement of certain clinical development, regulatory and first commercial sale milestones. This is comprised of up to approximately $7 million upon TG s successful completion of clinical development milestones, and up to approximately $14.5 million upon first commercial sales in specified territories. In addition, Checkpoint is eligible to receive up to an aggregate of $60 million upon TG s successful achievement of certain sales milestones based on aggregate net sales, in addition to royalty payments based on a tiered high single digit percentage of net sales. Following the second anniversary of the effective date of the agreement, Checkpoint will receive an annual license maintenance fee, which is creditable against milestone payments or royalties due to TG. The agreement will terminate on a product-by-product and country-by country basis upon the expiration of the last licensed patent right, unless the agreement is terminated earlier. In 1Q15, Fortress entered into a license agreement with NeuPharma, which was assigned to Checkpoint by Fortress on the same date, whereby Checkpoint obtained an exclusive, worldwide license, other than certain Asian countries, to NeuPharma s patents to a library of EGFR inhibitors. Under the terms of the agreement, Checkpoint paid NeuPharma an up-front licensing fee of $1 million, and NeuPharma is eligible to receive payments of up to an aggregate of approximately $40 million per licensed product upon Checkpoint s successful achievement of certain clinical development and regulatory milestones in up to three indications, of which $22.5 million are due upon various regulatory approvals to commercialize the products. In addition, NeuPharma is eligible to receive payments of up to an aggregate of $40 million upon Checkpoint successful achievement of certain sales milestones based on aggregate net sales, in addition to royalty payments based on a tiered mid to high single-digit percentage of net sales. The license will terminate on a country-by-country and product-by-product basis until the royalty term in such country with respect to such product expires, at which time the agreement will expire in its entirety with respect to such licensed product in such country. To date, Checkpoint has incurred $1 million of upfront licensing and milestone payments. The licensing also granted Checkpoint intellectual property pertaining to technology involving small molecules that are inhibitors of EGFR (CK-101) and kinase mutants. The in-licensed patent estate includes an international application and a pending US non-provisional application. In 1Q16, Checkpoint filed separate national stage applications in the relevant territories worldwide. Additionally, in 1Q17, Checkpoint was issued a composition of matter patent with US Patent No. 9,550,770, specifically covering the compound, CK-101, and a broad range of related compounds, salts, pharmaceutical compositions and various dosage forms of such pharmaceutical compositions. Pursuant to Checkpoint s existing license agreement with NeuPharma, Inc., the US patent protects CK-101 through at least August 2034, exclusive of any additional patent-term extensions that might become available. In connection with the license agreement with NeuPharma, Checkpoint entered into a Sponsored Research Agreement with NeuPharma for certain research and development activities. Effective January 11, 2016, TG agreed to assume all costs associated with this Sponsored Research Agreement and reimbursed Checkpoint for all amounts that Checkpoint had paid NeuPharma. Accordingly, TG reimbursed Checkpoint $0.5 million in the six months ended June 30, In connection with the license agreement with NeuPharma, on March 17, 2015, Fortress entered into an option agreement with TG, which was assigned to Checkpoint on the same date, granting TG the right, but not the obligation, to enter into a global collaboration to develop and commercialize NeuPharma s patents to a library of EGFR inhibitors in the field of hematological malignancies. Checkpoint retains the right to develop and commercialize the EGFR inhibitors in solid tumors. Under the terms of the option agreement, TG paid Checkpoint $25,000, representing consideration for granting the option. If the option is exercised, Checkpoint is eligible to receive up to an aggregate of approximately $14.5 million upon TG s successful achievement of certain clinical development and regulatory milestones under a collaboration agreement. In addition, Checkpoint is eligible to receive up to an aggregate of $40 million upon TG s successful achievement of certain sales milestones based on aggregate net sales by TG, in addition to royalty payments based on a tiered mid to high-single digit percentage of net sales by TG. On December 18, 2015, Fortress entered into a license agreement with Teva through its Cephalon subsidiary, which was assigned to Checkpoint by Fortress on the same date, whereby Checkpoint obtained an exclusive, worldwide license to Cephalon s patents relating to CEP-8983 and its small molecule prodrug, CEP-9722, which Checkpoint renamed CK-102. Checkpoint paid Cephalon an up-front licensing fee of $0.5 million, and Cephalon is eligible to receive milestone payments of up to an aggregate of approximately $220 million upon Checkpoint s successful achievement of certain clinical development, regulatory approval and product sales milestones, of which May 18,

13 approximately $206.5 million are due on or following regulatory approvals to commercialize the product. In addition, Cephalon is eligible to receive royalty payments based on a tiered low double digit percentage of net sales. To date, Checkpoint has incurred $0.5 million of payments to Cephalon. Cephalon granted Checkpoint exclusive, worldwide rights under Cephalon s patents and know-how covering small molecule inhibitors of PARP. Cephalon s patents include four patent families covering certain compounds and pharmaceutical compositions, including claims to the compound, certain salts, and crystalline polymorphs of the pro-drug, CK-102, processes for preparing same, pharmaceutical compositions of same and certain methods of inhibition or prevention associated with certain indications. Cephalon s patents include three granted US patents, which are scheduled to expire as early as January 2023 and as late as September Foreign counterparts included in each patent family exist in numerous jurisdictions around the world having expected expiration dates ranging from May 2021 to June 2027 (November 2027 for certain methods of sensitizing tumors), August 2030 for claims directed to novel polymorphs, and November 2035 for certain salts of CK-102. Jubilant Biosys Limited In 2Q16, Checkpoint entered into a license agreement with Jubilant, whereby Checkpoint obtained an exclusive, worldwide license to Jubilant s family of patents covering compounds that inhibit BRD4, a member of the BET domain for cancer treatment, which Checkpoint refers to as CK-103. Checkpoint paid Jubilant an up-front licensing fee of $2 million, and Jubilant is eligible to receive payments up to an aggregate of approximately $89 million upon Checkpoint s successful achievement of certain preclinical, clinical development, and regulatory milestones, of which $59.5 million are due upon various regulatory approvals to commercialize the products. In addition, Jubilant is eligible to receive payments up to an aggregate of $89 million upon Checkpoint s successful achievement of certain sales milestones based on aggregate net sales, in addition to royalty payments based on a tiered low to mid-single digit percentage of net sales. To date, Checkpoint has incurred $2 million of payments to Jubilant. Jubilant granted Checkpoint exclusive, worldwide rights under Jubilant s patents and know-how covering small molecule inhibitors of BET, specifically targeting BRD4, a member of the BET family which is often required for the expression of c-myc. The in-licensed patent estate includes a pending international application filed in March 2016 and an Indian provisional application from which a second international application was filed in September Any patents maturing from this patent estate are expected to expire no sooner than March In connection with the Jubilant deal, in 2Q16, Checkpoint entered into a sublicense agreement with TG to develop and commercialize the Jubilant family of patents covering compounds that inhibit BRD4, a member of the BET domain for cancer treatment in the field of hematological malignancies. Checkpoint retained the right to develop and commercialize the BET inhibitors in solid tumors. TG paid Checkpoint $1 million, representing a reimbursement for its share of the licensing fee and Checkpoint is eligible to receive substantive potential milestone payments up to an aggregate of approximately $87.5 million upon TG s successful achievement of preclinical, clinical development, and regulatory milestones. This is comprised of up to approximately $0.3 million upon TG s successful achievement of one preclinical milestone, up to approximately $25.5 million upon TG s successful completion of three clinical development milestones for two licensed products, and up to approximately $61.7 million upon the achievement of five regulatory approvals and first commercial sales in specified territories for two licensed products. In addition, Checkpoint is eligible to receive potential milestone payments of up to an aggregate of $89 million upon TG s successful achievement of three sales milestones based on aggregate net sales by TG, for two licensed products, in addition to royalty payments based on a mid-single digit percentage of net sales by TG. By partnering with TG to develop the compounds in therapeutic areas outside of Checkpoint s solid tumor focus, Checkpoint can substantially offset its costs related to the development and marketing of these compounds in solid tumor indications. Financials Revenue. Our projected revenue stems only from potential CK-101 sales in EGFR-mutated NSCLC, CK-102 sales in BRCA-related ovarian and breast cancer, and CK-301 for NSCLC in the US and EU, and thus revenue from any additional indications and products would represent upside to our valuation. Our model assumes Checkpoint to enter into a co-promotion deal in the US and otherwise license its drugs globally and collect royalties on all ex-us sales (net royalty rate of 20%). With an estimated initial US price of about $86,000 per year and an estimated average EU price of about $58,000 for NSCLC, we project CK-101 to generate about $139 million in US net sales and EU net royalty revenue to Checkpoint for NSCLC in With an estimated initial US price of about $130,000 per year and an estimated average EU price of about $86,000, we project CK-102 to generate about $42 million and $140 million in US net sales and EU net royalty revenue to Checkpoint in 2025, from use in ovarian and breast cancer, respectively. With an estimated initial annual US price of about $77,000 and an EU price of about $51,000, we forecast CK-301 to attain US net sales and EU net royalty revenue to Checkpoint of about $303 million for NSCLC in In the US, we project CK-101 to be launched in 2H21 for NSCLC, CK-102 to be launched in 1H22 May 18,

14 for ovarian and breast cancer, and CK-301 to be launched for NSCLC in 1H22, followed by an EU launch one year after the US launch for each drug in each indication. Our assumption of a US co-promotion would most likely bring with it upfront and milestone payments to Checkpoint, but we are not yet including that potential collaborative revenue in our valuation, and thus any such revenue would provide upside to our valuation. Expense. We model Checkpoint as being responsible for all CK-101, CK-102 and CK-301 R&D expense. Since we project that Checkpoint ultimately will enter into US a co-promotion agreement and otherwise out-license products ex-us rather than assemble its own sales force, we do not forecast any ex-us COGS for any drug or any ex-us sales and marketing component to SG&A. We also are not modeling milestones to potentially be paid by Checkpoint to its partners. Bottom Line. Given its early developmental stage, we project Checkpoint to be profitable in 2022, due primarily to US net co-promotion sales and EU net royalty revenue for CK-101, CK-102 and CK-301. As of March 31, 2017, Checkpoint had outstanding unvested restricted stock and warrants, as well as options that can be converted into 6.9 million common shares. 3.5 million of the warrants strike at $7, expire 5 years from issue, and the shares upon exercise must be held by the investor for at least 6 months. As of May 4, 2017, Checkpoint had about 25 million shares of common stock outstanding. Finally, we are not projecting income tax until 2023, given the amount of NOLs accumulated. Balance Sheet. The company s current cash position of $32 million should be sufficient to support its activities through Checkpoint has no debt. Risks Clinical risk. Checkpoint s clinical stage products could fail to deliver statistically significant results in late-stage clinical trials, substantially reducing the value of Checkpoint s product candidates and therefore our target price. Regulatory risk. Even if successful in the clinic, Checkpoint s products could fail to be approved by domestic and/or foreign regulatory bodies, which would reduce Checkpoint s value and therefore our target price. Financing risk. Checkpoint could need capital to fund its operations, should its marketed or soon to be marketed products fail to deliver the anticipated revenue, and such financing may not occur or it could be substantially dilutive to existing investors. Competitive risk. For any approved Checkpoint products, they may not be well adopted in a competitive marketplace, which would adversely affect Checkpoint s value and therefore our target price. High stock price volatility. This issue is common among small-cap biotechnology companies with relatively low trading volumes. May 18,

15 Checkpoint Therapeutics, Inc. Income Statement Fiscal Year ends December (in 000, except per share items) 1Q16A 2Q16A 3Q16A 4Q16A 2016A 1Q17A 2Q17E 3Q17E 4Q17E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Revenue - related party , ,772 2,772 2,772 2,772 2,772 2,772 2,772 2,772 2,772 CK-101 (US co-pro & ex-us royalty) - - 2,144 39,318 84, , ,295 CK-102 (US co-pro & ex-us royalty) ,716 94, , ,326 CK-301 (US co-pro & ex-us royalty) - 46, , , ,184 Total revenue , ,772 2,772 2,772 2,772 4, , , , ,576 COGS ,343 39,425 56,092 65,952 R&D expense ,713 7,743 20,267 3,704 4,074 4,482 4,930 17,190 23,207 32,490 42,236 46,460 41,814 37,633 35,751 36,109 SG&A expense ,090 4,467 1,403 1,417 1,431 1,446 5,697 5,811 5,927 6,816 12,269 22,084 23,188 24,347 25,565 Total operating expenses ,685 8,833 24,734 5,107 5,491 5,913 6,376 22,887 29,018 38,416 49,052 58,943 79, , , ,625 Operating income (3,272) (5,418) (5,139) (8,335) (22,164) (4,414) (4,798) (5,220) (5,683) (20,115) (26,246) (35,644) (46,280) (54,028) 30, , , ,951 Interest income (expense), net (333) (297) Total other income (333) (297) Income before tax (3,605) (5,405) (5,128) (8,323) (22,461) (4,383) (4,771) (5,195) (5,660) (20,008) (26,086) (35,501) (46,151) (53,911) 30, , , ,078 Provision for income tax (benefit) 21, , ,027 Net Income (3,605) (5,405) (5,128) (8,323) (22,461) (4,383) (4,771) (5,195) (5,660) (20,008) (26,086) (35,501) (46,151) (53,911) 30, , , ,051 Net loss basic and diluted (3,605) (5,405) (5,128) (8,323) (22,461) (4,383) (4,771) (5,195) (5,660) (20,008) (26,086) (35,501) (46,151) (53,911) 30, , , ,051 EPS basic (0.17) (0.25) (0.24) (0.38) (1.04) (0.20) (0.19) (0.20) (0.22) (0.81) (0.84) (1.13) (1.34) (1.55) EPS diluted (0.17) (0.25) (0.24) (0.38) (1.04) (0.20) (0.19) (0.20) (0.22) (0.81) (0.84) (1.13) (1.34) (1.55) Basic shares outstanding 20,775 21,728 21,798 21,875 21,544 22,056 25,365 25,619 25,875 24,729 31,050 31,360 34,496 34,841 35,190 35,541 35,897 36,256 Diluted shares outstanding 20,775 21,728 21,798 21,875 21,544 22,056 25,365 25,619 25,875 24,729 31,050 31,360 34,496 34,841 42,113 42,465 42,821 43,180 Source: Company reports, Opus National Capital Markets estimates May 18,

16 IMPORTANT DISCLOSURES: Opus National Capital Markets is a DBA for National Securities Corporation 410 Park Avenue, 14th Floor, New York, NY REG AC ANALYST CERTIFICATION The research analyst named on this report, Jonathan Aschoff, Ph.D., certifies the following: (1) that all of the views expressed in this research report accurately reflect his personal views about any and all of the subject securities or issuers; and (2) that no part of his compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by him in this research report. IMPORTANT DISCLOSURES This publication does not constitute and should not be construed as an offer or the solicitation of any transaction to buy or sell any securities or any instruments or any derivatives of the securities mentioned herein, or to participate in any particular trading strategies. Although the information contained herein has been obtained from recognized services, and sources believed to be reliable, its accuracy or completeness cannot be guaranteed. Opinions, estimates or projections expressed in this report may make assumptions regarding economic, industry, company and political considerations, and constitute current opinions, at the time of issuance, which are subject to change without notice. This report is being furnished for informational purposes only, and on the condition that it will not form a primary basis for any investment decision. Any recommendation(s) contained in this report is/are not intended to be, nor should it / they construed or inferred to be, investment advice, as such investments may not be suitable for all investors. When preparing this report, no consideration to one s investment objectives, risk tolerance and other individual factors was given; as such, as with all investments, purchase or sale of any securities mentioned herein may not be suitable for all investors. By virtue of this publication, neither the Firm nor any of its employees shall be responsible for any investment decisions. Before committing funds to ANY investment, an investor should seek professional advice. Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice, or to be used by anyone to provide tax advice. Investors are urged to consult an independent tax professional for advice concerning their particular circumstances. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, either expressed or implied, is made regarding future performance. National Securities Corporation (NSC) and its affiliated companies, shareholders, officers, directors and / or employees (including persons involved with the preparation or issuance of this report) may, from time to time, have long or short positions in, and buy or sell the securities or derivatives (including options) thereof, of the companies mentioned herein. One or more directors, officers, and / or employees of NSC and its affiliated May 18,

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18 or more of the securities of the issuer 5 In the past twelve (12) month period, NSC was a member of the selling group of a public offering of the security (ies) of the issuer 6 One or more directors, officers, and / or employees of NSC and / or its affiliated companies is / are a director (s) of the issuer of the security which is the subject of this report 7 NSC and / or its affiliates expects to receive or intends to seek compensation for investment banking services from the subject company at some point during the next three (3) months 8 A research analyst or a member of his / her household has a financial interest in the securities of the subject company as follows: a) long common stock; b) short common stock; c) long calls; d) short calls; e) long puts; f) short puts; g) long rights; h) short rights; i) long warrants; j) short warrants; k) long futures; l) short futures; m) long preferred stock; n) short preferred stock 9 As of the end of the month immediately preceding the date of publication of this report or the end of the prior month if the publication is within ten (10) days following the end of the month, NSC and / or its affiliates beneficially owned one percent (1%) or more of any class of common equity securities of the subject company. 10 Please see below for other relevant disclosures Shares of this security may be sold to residents of all 50 states, Puerto Rico, Guam, the US Virgin Islands and the District of Columbia. Distribution of Ratings Investment Banking* Rating # % # % BUY % % NEUTRAL % 1 1.8% SELL 4 7.0% 2 3.5% *Investment banking services provided in the previous 12 months MEANING OF RATINGS: BUY: the stock is likely to generate a total return of at least 10% over the next 12 months and should outperform relative to the industry. NEUTRAL: the stock is likely to perform in-line with the industry over the next 12 months. SELL: the stock is likely to underperform (from a total return perspective) relative to the industry over the next 12 months. NR: Not Rated SP: Suspended May 18,

19 Charts CKPT Source: Big Charts CKPT Date Rating Price Target Initiation May 18, 2017 BUY $18 May 18,