Background: Narlaprevir (SCH )

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Once Daily Narlaprevir (SCH 9518) in Combination with Peginterferon alfa-2b/ Ribavirin for Treatment-Naive Patients with Genotype-1 Chronic Hepatitis C: Interim Results from the NEXT-1 Study Vierling J, Poordad F, Lawitz E, Ghalib R, Lee W, Ravendhran N, Galati J, Bacon B, Flamm S, Balart L, Freilich B, Schiff E, Jacobson I, Kwo P, Gordon S, Sulkowski M, Boparai N, Chaudhri E, Brass C, Hughes E, and Albrecht J 6th Annual Meeting of the American Association for the Study of Liver Diseases (AASLD) Boston, MA, November 2, 29 1

2 Background: Narlaprevir (SCH 9518) Potent, mechanism-based inhibitor of the HCV NS3 serine protease Metabolism primarily mediated by CYP3A4 PK enhanced by co-administration of ritonavir, allowing once daily dosing Replicon assay using HCV genotype 1b EC 5 = 2 nm, EC 9 = 4 nm IFN-alfa enhanced antiviral activity Resistance profile of narlaprevir in vitro Similar to other NS3 protease inhibitors Reduced emergence of resistance when combined with IFN-α

Methods 3 Treatment Naive HCV-1 Comparison of Narlaprevir (NVR) + Ritonavir (RTV) + SOC SOC alone Endpoint: Undetectable HCV-RNA at Week 4 and Week 12 Goal of study: To guide the design of the Phase 2b NVR study (NEXT-2)

Study Design 4 Arm 1* Standard of care control Peginterferon (PEG-IFN) alfa-2b (1.5 µg/kg/week) plus ribavirin (RBV, 6 14 mg/day) Follow-up Arms 2 and 3 Once daily dosing No Lead-in PEG / RBV NVR 2mg QD PEG / RBV NVR 4mg QD PEG-IFN alfa-2b plus RBV PEG-IFN alfa-2b plus RBV Follow-up Follow-up Arms 4 and 5 Once daily dosing 4 wk Lead-in PEG + RBV PEG + RBV PEG + RBV PEG / RBV NVR 2mg QD PEG / RBV NVR 4mg QD PEG-IFN alfa-2b plus RBV PEG-IFN alfa-2b plus RBV Follow-up Follow-up Arm 6 Twice daily dosing No Lead-in PEG / RBV NVR 1mg BID PEG-IFN alfa-2b plus RBV Follow-up -4 12 24 36 48 6 72 Weeks Each dose of narlaprevir (NVR) administered with ritonavir (RTV) 1mg Erythropoietin and G-CSF use was permitted in the study *Standard of care arm included futility stopping rule at week 12

5 Patient Demographics PEG-IFN alfa-2b (1.5 µg/kg/week) + ribavirin (6-14 mg/day) Arm 1 Control n = 18 Arms 2 & 4 NVR 2mg QD n = 37 Male, n (%) 1 (56) 21 (57) Caucasian, n (%) 13 (72) 35 (95) Age, years (SD) 46 (7) Weight, kg (SD) 81 (2) BMI, kg/m 2 (SD) 28 (6) Genotype 1a, n (%) Viral Load >6, IU/mL, n (%) 11 (61) 15 (83) Arm 2: 43 (9) Arm 4: 45 (1) Arm 2: 8 (11) Arm 4: 76 (16) Arm 2: 29 (5) Arm 4: 26 (5) 22 (59) 27 (73) Arms 3 & 5 NVR 4mg QD n = 39 24 (62) 31 (79) Arm 3: 45 (11) Arm 5: 46 (9) Arm 3: 85 (1) Arm 5: 82 (18) Arm 3: 28 (2) Arm 5: 28 (4) 23 (59) Arm 6 NVR 1mg BID n = 17 9 (53) 15 (88) 46 (9) 8 (18) 27 (4) 12 (71) 31 (79) 14 (82) Each dose of narlaprevir (NVR) administered with ritonavir 1mg Lead-in and no lead-in arms combined for each NVR dose level

Decrease in Mean Plasma HCV-RNA 6 Mean HCV RNA, IU/mL* 1,, 1,, 1, 1, 1, 1 Lead-In phase (4 weeks) P/R control P/R + NVR 2 mg QD P/R + NVR 4 mg QD Lead-in P/R + NVR 2 mg QD Lead-in P/R + NVR 4 mg QD P/R + NVR 1 mg BID 1 Week -4 Add Narlaprevir Week 2 Week 4 *Roche Taqman 2. LLQ 25 IU/mL / LLD 1 IU/mL Each dose of narlaprevir (NVR) administered with ritonavir 1mg Week 8 Weeks after Starting Narlaprevir Week 12

7 Undetectable* HCV-RNA by Treatment Week 9 8 P/R control P/R + NVR 2mg QD P/R + NVR 4mg QD Lead-in P/R + NVR 2mg QD Lead-in P/R + NVR 4mg QD P/R + NVR 1mg BID 8 75 87 85 85 84 87 85 Patient % 7 6 5 4 3 2 1 6 5 15 6 5 6 Each dose of narlaprevir (NVR) administered with ritonavir 1mg *HCV RNA < 1 IU/mL (includes all patients that received at least one dose of NVR, excluding control) 35 16 Lead-in Week 1 Week 2 Week 4 Week 12 Add Narlaprevir Weeks after Starting Narlaprevir 6 29 58 53 17 65

1 Plasma HCV-RNA Levels for 11 Individual Null Responders Ŧ 8 * HCV RNA, IU/mL* 1 1 1 1 1 Lead-in P/R + NVR 2 mg QD Lead-in P/R + NVR 4 mg QD 1 Week -4 n = 2 Add Narlaprevir Week 4 n = 19 Week 8 n = 17 Weeks after Starting Narlaprevir Week 12 n = 17 *Roche Taqman 2. LLQ 25 IU/mL / LLD 1 IU/mL Ŧ Defined as < 1 log decline in HCV-RNA after 4 weeks of PEG-IFN/RBV Each dose of narlaprevir (NVR) administered with ritonavir 1 mg

9 Mean Narlaprevir Concentration/Time Profiles Based on Daily or Twice Daily Dosing from NEXT-1* 35 Narlaprevir (2 mg QD) Narlaprevir Plasma Conc. (ng/ml) 3 25 2 15 1 5 Narlaprevir (4 mg QD) Narlaprevir (1 mg BID) Cmin 25 x EC 9 15 x EC 9 11 x EC 9 2 4 6 8 1 12 14 16 18 2 22 24 Time (hr) Daily and twice daily dosing achieved by metabolic inhibition with ritonavir *Generated using Sparse Sampling and Population PK Model (No Lead-in Arms)

Patient Discontinuations Arm 1 Control n = 18 PEG-IFN alfa-2b (1.5 µg/kg/week) + ribavirin (6-14 mg/day) Arms 2 & 4 NVR 2mg QD n = 37 Arms 3 & 5 NVR 4mg QD n = 39 Arm 6 NVR 1mg BID n = 17 1 Total discontinued, n (%) 7 (39) 6 (16) 5 (13) 2 (12) Adverse events* 1 (6) 3 (8) 5 (13) Treatment failure 1 (6) Lost to follow-up 4 (22) Investigator decision to D/C 1 (3) Patient declined to continue 2 (11) 1 (3) Non-compliance 1 (3) 1 (6) *nausea, GERD, depression, homicidal ideation, suicidal ideation, lethargy, hypoaesthesia, tinnitus, retinal exudates, AST/ALT/CPK, anorexia Each dose of narlaprevir (NVR) administered with ritonavir 1mg Lead-in and no lead-in arms combined for each NVR dose level

Adverse Events Reported During 12 Weeks of Narlaprevir Treatment ( 15% total combined) 11 Arm 1 Control N=18 PEG-IFN alfa-2b (1.5 µg/kg/week) + ribavirin (6-14 mg/day) Arms 2 & 4 NVR 2mg QD N=37 Arms 3 & 5 NVR 4mg QD N=39 Arm 6 NVR 1mg BID N=17 Fatigue 56 % 57 % 56 % 47 % Nausea 5 % 51 % 49 % 53 % Flu-like illness 44 % 32 % 54 % 53 % Headache 39 % 35 % 38 % 35 % Insomnia 28 % 35 % 33 % 29 % Anemia 6 % 3 % 44 % 18 % Arthralgia 28 % 19 % 33 % 18 % Diarrhea 17 % 16 % 28 % 35 % Pyrexia 17 % 22 % 26 % 29 % Irritability 28 % 22 % 18 % 18 % Alopecia 17 % 22 % 1 % 18 % Dizziness 6 % 24 % 26 % 18 % Vomiting 28 % 19 % 13 % 35 % Chills 17 % 11 % 26 % 29 % Anxiety 17 % 19 % 15 % 12 % Decreased Appetite 17 % 11 % 23 % 18 % Depression 22 % 14 % 18 % 6 % Each dose of narlaprevir (NVR) administered with ritonavir 1mg Lead-in and no lead-in arms combined for each NVR dose level

Nadir Hemoglobin During 12 Weeks of Narlaprevir Treatment 12 Patients, % 1 75 5 25 53 43 23 59 41 46 P/R control (n = 18) P/R + NVR 2 mg QD (n = 37) P/R + NVR 4 mg QD (n = 39) P/R + NVR 1 mg BID (n = 17) 62 29 6 11 13 12 3 >11. 9.5 - <11. 8. - <9.5 6.5 - <8. Nadir hemoglobin levels (g/dl) EPO use 1/18 (6%) 12/37 (32%) 14/39 (36%) 2/17 (12%) Each dose of narlaprevir (NVR) administered with ritonavir 1mg Lead-in and no lead-in treatment arms pooled for the NVR 2 mg QD & 4 mg QD dosages

Nadir Neutrophils During 12 Weeks of Narlaprevir Treatment 13 Patients, % 75 5 25 29 27 29 31 27 13 12 47 24 27 36 29 12 16 18 12 6 3 3 >1.5 1. - 1.5.75 - <1..5 - <.75 <.5 Nadir neutrophil levels (x1 9 /L) P/R control (n = 18) P/R + NVR 2 mg QD (n = 37) P/R + NVR 4 mg QD (n = 39) P/R + NVR 1 mg BID (n = 17) Each dose of narlaprevir (NVR) administered with ritonavir 1mg Lead-in and no lead-in treatment arms pooled for the NVR 2 mg QD & 4 mg QD dosages

Summary 14 NVR QD with RTV has potent anti-hcv activity Trough NVR concentrations achieved 11-25 times the EC 9 2 mg / 4 mg NVR QD rapidly achieved undetectable HCV-RNA levels Week 4-58-87% of patients Week 12-84-87% of patients No unique or treatment limiting adverse events Use of low-dose RTV as a metabolic inhibitor was well tolerated AE profile consistent with PEG/RBV with the following observations Increased frequency of anemia; no discontinuations due to anemia Similar rates of nadir neutrophil levels below.75 x 1 9 /L Studies evaluating 2 mg and 4 mg NVR QD with RTV (with and without a lead-in) are currently planned

15 Acknowledgements We wish to thank the patients who participated in this study We also wish to thank the following people for their participation and contribution: Participating Investigators: Vierling J, Poordad F, Lawitz E, Ghalib R, Lee W, Ravendhran N, Galati J, Bacon B, Flamm S, Balart L, Freilich B, Schiff E, Jacobson I, Kwo P, Gordon S, Sulkowski M SPRI Team: Valanzola R, Linaberry M, Treitel M, Li J, Keung A, Chaudhri E, Boparai N, Brass C, Hughes E, Albrecht J