TR Protocol Number: TR02-107

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TR02-107 A PLACEBO CONTROLLED, RANDOMIZED, PARALLEL COHORT, SAFETY AND TOLERABILITY STUDY OF TWO DOSE LEVELS OF LIPOSOMAL AMIKACIN FOR INHALATION (ARIKACE ) IN PATIENTS WITH BRONCHIECTASIS COMPLICATED BY CHRONIC INFECTION DUE TO PSEUDOMONAS AERUGINOSA Protocol Number: TR02-107 1

Conflicts Financial: Grant support: Transave Inc Unapproved indications: Inhaled antibiotics for non-cf bronchiectasis Other conflicts: Grant Support: Bayer Inc Gilead Inc Pharmaxis Inc 2

TR02-107 Bronchiectasis: Background No approved antibiotic for this indication Inhaled tobramycin: Phase 2 clinical studies Evidence of microbiologic activity Problems with tolerance Increased cough, wheezing, dyspnea Physician assessment of clinical benefit mixed Used sparingly for some patients with frequent exacerbations No Phase 3 studies underway Change in FEV1: May not be prognostic indicator: benefit/decline End-point showing clinical benefit (PSSS/SGRQ/Exacerbations/Rescue Antibiotic Use) 3

Liposomal Amikacin for Inhalation (Arikace ) Liposomes (~0.3 μm) shown to penetrate CF physical barriers Diffusion through CF sputum Biofilm penetration and retention confirmed at Center for Biofilm Engineering at Montana State University Sustained release of drug in the lung Longer t½ and improved AUC to MIC ratio Virulence factors (Rhamnolipids & Phospholipase C) secreted by Pseudomonas facilitate further release of amikacin from Arikace In vitro and in-vivo anti-pseudomonas activity demonstrated Liposomes provide high degree of biocompatibility Natural lipids: DPPC and Cholesterol 3 and 6 month daily dosing toxicology studies in mice, rats and dogs support long-term dosing clinical studies 4

Phase II Study: TR02-107 : Liposomal Amikacin (LA inhaled) Chronic Pseudomonas Infection in Non-CF Bronchiectasis 28 days Off All Antibiotics 28 Days Once Daily Dosing 28 Days Follow Up Screening Begins Day -14 R 280 or 560mg LA i once daily by eflow No inhaled antibiotics Primary end-point: Safety and Tolerability Parallel Cohort Design N~60: R = 1:1:1 (Liposomes in 1.5% saline) once daily by eflow No inhaled antibiotics Key Inclusion and Exclusion Criteria FEV 1 50% Age 18 years Chronic Infection with Pa HRCT confirmed Bronchiectasis in >2 segments History of at least 1 exacerbation, and <3 Exclude patients with Malignancy, active TB & NTM Bi-weekly Safety and Efficacy Evaluation Assessments of Change in Frequency of Cough with Expectoration, PSSS, SGRQ, CFU, Anti-pseudomonal Rescue antibiotic Treatment, Exacerbations, and Hospitalization. PK in sub-group of patients 5

TR02-107 Liposomal amikacin inhaled CLINICAL SITES DISTRIBUTION Total countries = 7 Total initiated clinical sites = 25 (13-Europe), (12-India), 1 USA Active Sites= 16 (10- Europe), (6- India) Country # Active Sites Total Patients Bulgaria 3 16 Greece 1 3 Hungary 1 1 India 6 23 Serbia 2 6 Ukraine 3 15 Total 16 64 6

Patient Disposition Demographics & Characteristics

TR02-107 Liposomal amikacin inhaled PATIENT DISTRIBUTION Patients Randomized N = 64 LIPOSOMAL AMIKACIN INHALED N = 44 N = 20 Cohort 1 ITT=24 Cohort 2 20* ITT=19 Cohort 1 ITT=10 Cohort 2 10* ITT=9 *1 Withdrew prior to Study Drug 8 Table 6.3.2

Arikace TR02-107 Liposomal - TR02-107amikacin- Patient Characteristics 280mg LAi (N=24) 560mg LAi (N=19) (N=19) Age (yrs) Mean (SD) 49.929 (21.129) 58.537 (16.000) 49.395 (13.250) Gender Male 14 (58.3%) 8 (42.1%) 10 (52.6%) Female 10 (41.7%) 11 (57.9%) 9 (47.4%) FEV 1 Mean (SD) 1.917 (0.793) 1.939 (0.515) 1.802 (0.580) FEV 1 (% Pred) Mean (SD) 64.500 (20.680) 71.368 (23.898) 62.579 (15.696) FVC (L) Mean (SD) 2.639 (0.933) 2.504 (0.653) 2.565 (0.758) BMI (kg/m 2 ) Mean (SD) 22.475 (4.750) 24.942 (6.105) 21.774 (3.649) N 17 15 17 Baseline Pa density (log cfu) Mean (SD) 6.662 (0.908) 7.022 (1.115) 6.973 (1.099) Median 6.380 7.079 6.903 Min, Max 5.30, 8.04 4.62, 8.64 5.30, 8.93 (RUN 15JUN2009) RUN 29JUL2009 9 Table 6.4.1

Arikace TR02-107 Liposomal - TR02-107amikacin - Patient Characteristics 280mg LAi (N=24) 560mg LAi (N=19) (N=19) N 21 19 18 SGRQ Total Score Mean (SD) 57.022 (18.757) 57.184 (17.583) 55.847 (20.776) Median 61.530 58.020 58.775 Min, Max 13.86, 88.08 20.75, 78.74 11.47, 82.72 N 24 19 19 PSSS Total Score Mean (SD) 7.542 (3.526) 8.263 (3.664) 6.316 (2.405) Median 7.000 7.000 7.000 Min, Max 2.00, 16.00 4.00, 18.00 3.00, 11.00 (RUN 15JUN2009) RUN 29JUL2009 10 Table 6.4.1

Safety

TR02-107 OVERVIEW OF ADVERSE EVENTS (ITT) Overview of Adverse Events by Treatment Group LA i 280 mg (N=24) LA i 560 mg (N=19) (N=19) Number of Adverse Events 24 39 71 Patients with Adverse Events 11 (45.8%) 11 (57.9%) 11 (57.9%) Number of Treatment-Related Adverse Events (Probably or Possibly Related) Patients with Treatment-Related Adverse Events 4 15 26 2 (8.3%) 5 (26.3%) 4(21.1%) Deaths 0 (0.0%) 0 (0.0%) 0 Patients with Serious Adverse Events 1 (4.2%) 1 (5.3%) 1(5.3%) Patients Permanently Discontinuing Therapy Due to Adverse Events 0 (0.0%) 1 (5.3%) 0 RUN 27JUL2009 12 Table 6.6.27

Arikace - TR02-107 - CHANGE IN OXYGEN SATURATION 1 Hour Post-Dose Change from Pre-Dose 4 Hours Post-Dose Change from Pre-Dose 1 Hour Post-Dose Change from Pre-Dose(%) 10 5 0-5 -10 24/19/19 24/16/18 LAi 560 LAi 280 24/14/18 1 14 28 Visit Day 4 Hours Post-Dose Change from Pre-Dose(%) 10 5 0-5 -10 23/19/19 24/16/18 LAi 560 LAi 280 24/14/18 1 14 28 Visit Day LA i 280 mg * -0.0 (1.5) -0.2 (1.3) 0.2 (1.2) LA i 560 mg * -0.7 (2.2) -0.4 (1.5) -0.3 (1.4) Pooled * 0.1 (1.1) 0.2 (1.2) 0.0 (0.7) LA i 280 mg * 0.2 (1.7) 0.2 (1.3) 0.4 (1.4) LAi 560 mg * -0.5 (1.9) -0.3 (1.2) 0.1 (0.7) Pooled * -0.2 (1.7) 0.3 (0.8) 0.1 (0.9) * Mean (SD) (RUN 16JUN2009) RUN 29JUL2009 13 Table 6.6.16

Arikace - TR02-107 - FEV 1 Relative Change - ITT Percent Change in FEV1 from Baseline 20 15 10 5 0-5 -10-15 -20 LA i 280 0.976 0.896 0.654 0.760 0.632 0.183 0.592 0.468 LA i 560 24/17/18 24/17/18 24/17/18 24/18/18 0 14 28 42 56 Visit Day LA i 280 * 0.17% (14.14) 2.05% (13.94) 0.74% (14.99) 0.29% (15.58) LA i 560 * -2.81% (18.54) -4.47% (18.08) -3.80% (16.57) -3.92% (13.31) * -0.36% (10.74) 2.17% (9.88) -1.19% (11.73) -1.01% (10.31) * Mean (SD) (RUN 15JUN2009) RUN 29JUL2009 Table 6.6.5 14

Arikace - TR02-107 SAFETY: >15% Decline in FEV 1 LA i 280mg LA i 560 mg Patients 6/24 (25.0%) 4/19 (21.0%) 4/19 (21.1%) 15

Efficacy

Arikace - TR02-107 - Frequency of Cough with Expectoration-ITT 4 Change in Number of Expectorations from Baseline 3 2 1 0-1 -2-3 -4 LA i 560 0.141 LA i 280 0.006 0.290 0.190 24/17/18 24/18/18 24/17/18 24/18/18 0 14 28 42 56 Visit Day LA i 280 * -0.542 (2.766) -1.750 (3.274) -2.875 (2.455) -3.792 (3.349) LA i 560 * -0.118 (5.797) -1.944 (3.489) -2.706 (6.039) -3.833 (4.743) * -0.389 (3.534) -0.222 (4.387) -0.222 (3.422) -2.167 (4.554) * Mean (SD) (RUN 30JUN2009) RUN 27JUL2009 17 Table 6.7.17

Arikace - TR02-107 - SUMMARY OF PSSS TOTAL SCORE - ITT 4 3 Change in Score from Baseline 2 1 0-1 -2-3 -4 LA i 560 0.447 0.132 0.604 0.034 0.352 0.018 LA i 280 24/17/18 24/18/18 24/17/18 24/18/18 0 14 28 42 56 Visit Day LA i 280 * -1.125 (2.213) -2.167 (2.988) -2.458 (3.476) -2.458 (2.874) LA i 560 * -0.471 (2.035) -1.000 (4.087) -1.882 (4.285) -2.167 (3.053) Pooled * -0.222 (1.734) -0.056 (3.226) -0.056 (2.532) -1.722 (1.904) * Mean (SD) (RUN 30JUN2009) RUN 27JUL2009 18 Table 6.7.17

Arikace - TR02-107 - SUMMARY OF SGRQ TOTAL SCORE (ITT) 6 4 Change in Score from Baseline 2 0-2 -4-6 -8-10 LA i 280 0.366 LA i 560 0.308 21/17/15 20/18/16 21/16/16 21/17/17 0 14 28 42 56 0.550 0.294 Visit Day LA i 280 * -4.024 (8.558) -6.205 (13.661) -7.611 (13.274) -7.937 (16.281) LA I 560 * -6.101 (12.164) -6.200 (11.855) -8.196 (12.332) -9.282 (10.302) Pld * -4.933 (8.114) -6.903 (12.102) -3.741 (11.985) -5.010 (12.888) * Mean (SD) (RUN 30JUN2009) RUN 27JUL2009 Table 6.7.9 19

QUANTITATIVE MICROBIOLOGY

Arikace - TR02-107 - CHANGE IN LOG 10 CFU (ITT-m) 4 280 mg & 560 mg Cohorts 2 LA i280 Change from Baseline 0-2 0.535 0.007 0.772 0.204 0.285 0.012 LA I 560-4 14/12/13 11/12/12 15/12/15 0 14 28 42 Visit Day LA i 280 * -0.227 (0.805) -0.094 (0.975) 0.101 (0.788) LA i 560 * -2.016 (1.942) -1.013 (1.099) 0.046 (0.705) Pooled * -0.387 (0.459) 0.006 (0.661) -0.291 (0.860) * Mean (SD) (RUN 01JUL2009) RUN 27JUL2009 21 No Table #

Arikace - TR02-107 Protocol Defined Pulmonary Exacerbations LA i Patients 1*/43 (2.3%) 2/19 (10.5%) *2/43 (4.7%) Any exacerbation 22

Arikace - TR02-107: Anti-Pseudomonal Rescue Treatment LA inhaled Patients 0/43 (0%) 3*/19 (15.7%) * 1 Received IV antibiotics 23

Arikace - TR02-107 SAFETY : Conclusions Liposomal amikacin inhaled 280 mg and 560 mg, administered once daily for 28 days is safe and well tolerated AEs were consistent with underlying chronic lung disease in bronchiectasis patients No evidence of renal or ototoxicity Patients in the 560mg cohort appear to have a slightly higher frequency of dry cough post administration than in the 280 mg cohort. Cough was of short duration, and self-limiting. One patient discontinued due to dysphonia and cough. 24

Arikace TR02-107 - TR02-107Conclusions, continued EFFICACY: Statistically significant reduction in Pseudomonas aeruginosa density was observed in the 560 mg arm vs placebo. Patients receiving LA inhaled experienced fewer pulmonary exacerbations (4.7%) vs those receiving (10.5%) No patients in the LA inhaled group required antipseudomonal rescue treatment while 3 patients in the placebo group required treatment. Greater frequency of any cause Hospitalization was noted in the placebo group (5.3%) vs active treated group (2.3%). Patients receiving active drug demonstrated sustained superior clinical benefit vs patients receiving placebo as measured by improvement in Patient Respiratory Symptoms and Quality of Life assessment. 25

Arikace - TR02-107: Conclusions, continued Arikace technology provides high levels of sustained release of antibiotic in the lung, with drug concentrations well above the MICs for Pseudomonas aeruginosa during the dosing interval, and biofilm penetration. These features likely contribute to clinical efficacy. We believe, this Phase 2 placebo controlled study has demonstrated safety, tolerability and clinically meaningful efficacy of lipsomal amikacin inhaled in the treatment of chronic Pseudomonas aeruginosa infection in non-cf patients with bronchiectasis that warrants confirmation in a Phase 3 trial. 26

Arikace - TR02-107 - Acknowledgements Principal Investigators Animesh Arya, MD Diana Bilton, MD Katerina Dimakou, MD Alexander Dziublyk, MD K. Gowrinath, MD Zorica Lazic, MD, PhD Tamás Major, MD Rosen Marinov, MD Vasyl Melnik, MD Marija Mitic-Milikic, MD, PhD Penka Nikolova, MD Anne O Donnell, MD Anton Penev, MD T. Manmadha Rao, MD Mohd. Samiuddin, MD Rajesh Swarnakar, MD Gregory Tino, MD Pradyut Waghray, MD Liydmyla Yashina, MD Accelsiors CRO and Consultancy Services Asian Clinical Trials Axio Research PARI Pharma GmbH St. Georges, University of London University of Edinburgh John R.W. Govan, DSc Catherine Doherty Co-PIs and Study Coordinators 27