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Summary
Epigenesis Pharmaceuticals is a privately held biopharmaceutical company developing inhaled respiratory medicines for the treatment of asthma and chronic obstructive pulmonary disease (COPD). Epigenesis is focused on inhaled delivery to leverage the enhanced safety profile of topical therapy over systemic therapy. The Company’s lead compound, EPI-12323, is a once daily, small molecule, inhaled non-glucocorticoid steroid that targets the inflammatory and airway obstruction cascade in the irritated lung. EPI-12323 has broad anti-inflammatory and bronchodilator activities, and does not exhibit any of the classical side effects of glucocorticoid steroids, that comprise 30% of all current asthma sales.

Market Opportunity
Respiratory disease represents one of the most attractive pharmaceutical sectors, with sales expected to grow from the current $35 billion in 2009 to an estimated $65 billion in 2014. Asthma and chronic obstructive pulmonary disease (COPD) represent 40% and 16% of the respiratory market, respectively, and are the initial indications in development by Epigenesis. Allergic rhinitis represents 25% of the respiratory market, and Epigenesis is planning to target this indication in the near future.

Our initial target disease, asthma, has been called a national epidemic and COPD is the fourth leading cause of death worldwide and is expected to be the third leading cause by 2020. It is estimated that 16 million Americans have COPD and an equal number are undiagnosed. Allergic rhinitis is also growing at alarming rates, especially in children. The need for a new generation of respiratory therapeutics is both great and growing.

Our Strategy
In spite of the escalating medical need, only two new therapeutic classes of medicines have been introduced into the marketplace over the past 25 years. We are committed to improving this situation for all patients with common respiratory disease. Epigenesis is creating a series of medicines for the treatment of respiratory diseases through small molecule discovery methods. Our business model is to streamline early clinical development through Phase II studies and then partner our compounds with global pharmaceutical companies. Part of the Company's strategy is to use sophisticated preclinical models to select only those compounds that have the best chance of clinical and commercial success. We create value for our shareholders by maximizing the opportunity for each drug and by reducing risk in clinical development. With our expertise in respiratory medicine and respiratory pharmaceutics, we are able to streamline early clinical development. Our current lead compound, EPI-12323, emerged from a small molecule discovery method that targets asthmatic pathways.

Our Technology
The Company is committed to developing a series of inhaled respiratory medicines through Phase II studies using small molecule discovery methods.

Initial clinical results indicate that EPI-12323 has pronounced anti-inflammatory and bronchodilator activity and does not exhibit any of the classical side effects of glucocorticoid steroids. EPI-12323 does not bind to the glucocorticoid receptor and no adverse effects have been observed on cortisol, bone or androgenic metabolism. In addition, EPI-12323 is effective in reducing airway inflammation and improving airways resistance and compliance and reducing hyperresponsiveness in three preclinical models.

EPI-12323 was identified as a candidate for development in asthma since it is a non-glucocorticoid steroid and due to its ability to delete adenosine pools believed to be important in asthma. EPI-12323 has demonstrated anti-asthma effects in three separate preclinical models of human asthma. Such an extensive evaluation is a part of the Company's strategy to use sophisticated preclinical models to select only those compounds that have the best chance of clinical and commercial success.

The pharmacology profile for EPI-12323 compares favorably to glucocorticoid steroids, and in some cases exceeds the market leading corticosteroid class. Specifically, EPI-12323 exhibits a long duration of action (perhaps once per day treatment) and a pronounced effect on neutrophils. Neutrophils are believed to play an important role in severe asthma cases that result in death, and are also a key effector cell in COPD.

Our Clinical Results
EPI-12323 administered once daily has been studied in hundreds of patients having mild to severe asthma and COPD and has shown an excellent safety profile in all clinical studies, with no adverse effects observed on cortisol, bone or androgenic metabolism.  EPI-12323 has shown efficacy in an allergen challenge study and clinical improvement in FEV1 over 4-weeks in mild to moderate asthma.  EPI-12323 produced a clinical improvement in FEV1 over 9-weeks in moderate to severe COPD. 

In a recent Phase 2 clinical study in 271 symptomatic moderate to severe asthmatics using a high efficiency nebulizer device, EPI-12323 administered once daily showed statistically and clinically meaningful improvement in a validated asthma control questionnaire (ACQ) versus placebo at 6-weeks, and in the average change in ACQ score.  Further, significantly more responders were in the EPI-12323 group than in the placebo group.  Improvement trends were also noted in rescue beta-agonist use and in the overall asthma symptom score.  In this study, patients were being treated with high dose ICS and long-acting beta-agonist (LABA), and during a five-week run-in period, the patient’s high dose ICS was reduced in two steps by 80% while continuing a constant LABA dose.  Patients were randomized to either EPI-12323 or the vehicle control for 6-weeks, while continuing on a low dose of ICS and LABA.  EPI-12323 showed statistically and clinically meaningful improvement in patient’s ACQ score while on low dose ICS and LABA.

As a result of EPI-12323's ability to decrease both eosinophilic and neutrophilic inflammation in the lungs, it is also being developed for COPD. By specifically targeting the neutrophilic inflammation, EPI-12323 is expected to reduce the ongoing tissue destruction and improve small airway obstruction in COPD.

Combination Products: The successful development of EPI-12323 as a single agent opens the opportunity to combine it with other known effective agents in asthma, COPD and other respiratory disorders to maximize the compound’s value. Therefore, EPI-12323 is currently being developed in combination with other drug classes for both asthma and COPD. Using one device to deliver two medications permits customization of the drug combination for individual patient symptoms and offers convenience. For COPD patients, the ability to customize therapy represents a novel approach to a very heterogeneous disease. Epigenesis has completed preclinical pharmacology studies combining EPI-12323 with a long acting beta agonist as well as other drug classes, and has filed patent applications for these combinations.

Our expertise in respiratory medicine and respiratory pharmaceutics enables us to streamline early clinical development thereby saving valuable time and resources.

Our Intellectual Property
The Company has a strong portfolio of patents, trademarks and trade secrets that provides strong protection for its therapeutic approach. Epigenesis has strong intellectual property barriers protecting its advanced proprietary preclinical models of human respiratory disease, its compounds (i.e. EPI-12323), and specific product formulations for the treatment of respiratory diseases.

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