Overview of Neurox Pharmaceuticals, Inc. - A Harvard Start-Up for Curing Alzheimer's

1. Neurox Pharmaceuticals, Inc.
A Harvard Startup for Curing Alzheimer’s
H. Rock Liao, PhD
Co-Founder / CEO
Woburn, MA 01801
http://neurox.us
rockliao@neurox.us

2. Neurox Pharmaceuticals, Inc.
Our Mission
Neurox plans to develop the world’s first anti-Alzheimer’s
drugs that restore the growth of injured brain cells to
improve learning and memory.
Neurox is positioned to be the leader in supplying early anti-
Alzheimer’s drugs to the pharmaceutical industry.

3. Neurox Pharmaceuticals, Inc.
Who We Are
All three founders are Harvard neurobiologists who specialize in
brain development:
Michael E. Greenberg, PhD / Non-Executive Chairman
Chair & Professor of Dept of Neurobiology, Harvard Medical School, 2008-Present
Professor & Director, Neurobiology Program, Children’s Hospital Boston, 1994-2008
Member, American Academy of Arts and Sciences
Member, National Academy of Arts and Sciences
Inventor of “Brain Cell-Based In Vitro Synapse Assay”
Chair, Neuroscience Advisory Board, Roche, 2010
Consultant, Constellation Pharmaceuticals
Advisory Board, Upstate Biotechnology Inc, 1996-2006
Advisory Board, Cogent Neuroscience Inc, 1998-2002
Advisory Board, Helicon Inc, 1991-2001
H. Rock Liao, PhD / CEO
Postdoctoral research, Department of Neurobiology, Harvard Medical School, 2007-Present
Predoctoral research, Department of Neuroscience, The Johns Hopkins University, 2001-2006
Inventor of Neurox’s core technologies “High-Throughput, Brain Cell-Based Drug-Screening System” & “Targeted Imaging”
Founder and Developer of TheApps4U.com - an iPhone/iPod/iPad Apps Development company, 2009-Present
Seth S. Margolis, PhD / Chief Scientific Advisor
Assistant Professor, Department of Biochemistry, The Johns Hopkins University School of Medicine, Scheduled for 2012
Postdoctoral research, Department of Neurobiology, Harvard Medical School, 2006-Present
Predoctoral research, Department of Pharmacology and Cancer Biology, Duke University Medical Center, 2000-2005

4. Neurox Pharmaceuticals, Inc.
The Problem We Are Trying to Solve
Alzheimer’s Disease (AD) is a progressive brain
disease. It starts by destroying connections between
brain cells and ultimately leads to the loss of brain
cells. Learning and memory are therefore impaired.
High impact:
35 million AD patients worldwide.
Annual cost to economy exceeds $145B.
Unmet medical need:
There is currently no known cure.

5. Neurox Pharmaceuticals, Inc.
Why Conventional Anti-AD Strategies Do Not Work
The industry has long been focusing on removing toxic substances
(e.g., amyloid beta and tau aggregates) from AD brains.
Why they don’t work:
Normally brain cells form connections with each other to
communicate. However, when a patient is diagnosed with AD,
the connections between brain cells are long gone. The injured
brain cells are unable to re-grow processes and re-make
connections on their own even after disease-causing factors
are removed. Cells eventually die.
What’s missing:
The injured brain cells need additional help (e.g., stimulation)
to re-grow. The industry has not yet found a solution.

6. Neurox Pharmaceuticals, Inc.
Why Our Innovative Strategy Works
We identify drugs that can stimulate the growth and
connectivity of injured AD brain cells.
BEFORE AFTER
Cells re-grow processes and re-make connections
Injured AD brain cells lost processes and connections after drug (2090N12) treatment
Green: Processes of brain cells
Red: Nucleus (center of cell)

7. Neurox Pharmaceuticals, Inc.
Drugs That Revolutionize AD Therapies
We have found, tested, and verified 12 such drugs to date.
They work differently, but all can rescue the growth of the
injured AD brain cells in vitro.
We are the first in the world to show that AD is curable and
its neurodegeneration is reversible. Most importantly, we
already have these drugs identified and tested.
We know what these drugs are and how they work. At
Neurox, we will test these drugs in AD animals to evaluate
their effect on improving cognitive functions.
After animal testing, qualified drugs will be ready for sales
(preclinical drug licensing).
No clinical trials are required in our business model as we will
be a supplier of early drugs to other pharmaceutical
companies in filling their downstream drug pipelines.

8. Neurox Pharmaceuticals, Inc.
Leading the Field
Enabling technology:
In addition to our innovative strategy, we have built a technology that
enables large-scale drug screening using authentic brain cells,
leading to very high-confidence results. The technology is a high-
throughput version of a well-established in vitro assay where
nearly all resulting findings were verified in vivo.
Our technology employs automated high-speed imaging for important
neuronal markers to quantify the fine structures of drug-treated
brain cells and to evaluate a drug’s therapeutic effect on restoring
the growth and connectivity of injured AD brain cells.
Drug Bioimaging
Enhanced growth
& connectivity
Green: Processes of brain cells
Red, Blue: Connections between brain cells

9. Neurox Pharmaceuticals, Inc.
Leading the Field
Lead compounds:
We have verified 12 anti-AD drugs (and counting):
• 9 known/repurposed drugs (FDA-approved, clinical,
or off-patent)
• 3 natural compounds
These compounds have the following advantages:
 Already verified (by us) in rescuing AD brain cells (well-
established in vitro model)
 Relatively safe
 Known target/mechanism
 Higher success rate in animal testing
 Straightforward development of novel
compounds based on known drugs

10. Neurox Pharmaceuticals, Inc.
Intellectual Properties
Technology:
Drs. Greenberg and Liao, inventors of the drug-screening technology,
have obtained the verbal agreement (licensing contingent upon
funding) with Harvard for an exclusive commercial license. The
technology will be kept as a trade secret (i.e., without patent filing)
as it relies heavily on the expertise of the principals.
Lead compounds:
The compounds we’ve identified, to date, are existing drugs and many are
covered by third-party’s patents. Instead of filing patents for the novel
anti-AD use on these known drugs through Harvard (which may or
may not be feasible, depending on each drug’s patent claims), we will
identify novel, better, patentable compounds based on the known
structures of these drugs. The novel-drug screening (using the same,
licensed technology) and new patent filing will be carried out at
Neurox, not Harvard, to save costs and time.

11. Neurox Pharmaceuticals, Inc.
How We Find New, Patentable Drugs Based on A Known Drug
Finding novel therapeutic compounds based on a known drug is
straightforward. With our powerful drug-screening platform, we screen a
collection of random molecules (commercially available) that are structurally
similar to the known drug. An example is drug S008-0063, a novel, patentable
molecule similar to a market drug named imipramine (an FDA-approved anti-
depressant also known to enhance connectivity between brain cells).
S008-0063 was identified in just a month and shown to be very effective and
even better than its reference drug imipramine in enhancing brain cell’s
connectivity.
3.0
O
2.5
Index of Neuronal
N
N
H
Connectivity
2.0 No Drug Treatment
O
N
1.5 Imipramine
S008-0063 Imipramine S008-0063
1.0
0.5
0.0 Note: Both drugs are capable of enhancing connectivity only in normal
but not AD brain cells. They are only for demonstrating the principle
of new drug discovery. Due to confidentiality consideration, our anti-
AD drugs are not shown here, but the same principle applies.

12. Neurox Pharmaceuticals, Inc.
How Do We Generate Revenue?
Products / Revenue:
Neurox will sell preclinical anti-AD drugs to other pharmaceutical
companies through licensing. The revenue includes upfront cash,
milestone payments and royalties.
Customers:
Pharmaceutical companies that R&D drugs for AD
Facts:
The top 50 pharmaceutical companies, by number of drugs,
develop 60% of their formulas in-house and acquire the remaining 40%
from external sources through licensing, M&A, or forming alliances.
Price tag:
The average upfront cash for early drug licensing (including preclinical
and Phase-I drugs) ranges from $25 Mil to $42 Mil. We conservatively
price our product (preclinical drug) at $10 Mil per licensing, not
including milestone payments and royalties.

13. Neurox Pharmaceuticals, Inc.
Time to Revenue
Our niche – early drug supplier feeding the drug R&D pipeline in industry:
Neurox focuses on the preclinical phase of drug development (green
area below). It will take, on average, 2 years (mostly animal testing)
to finalize an end product. We expect to make our first sales (3 anti-
AD preclinical drugs) by the end of the 2nd year.
Our business model has the following advantages:
 No risky, costly and lengthy clinical trials
 No hurdles of FDA approval
 Time to revenue is much shorter
Sales /
Where we are End product:
now Preclinical drug
2 years
Clinical Development
Basic Drug Preclinical FDA
Research Discovery Development Approval
Phase I Phase II Phase III
Animal models
of disease

14. Neurox Pharmaceuticals, Inc.
Cash Flow
Neurox will continue to generate new, patentable anti-AD drugs, with a total
of 36 preclinical drugs for sale within 5 years. Note that from the 3rd year on
(after attaining profitability) we will increase the output capacity through
purchasing additional equipment, hiring more staff and re-allocating
resources.
We plan to raise $5 Mil and $10 Mil in Series A and B, respectively, to
fund the operations in the first 2 years. The company will be self-
sustaining financially from the 3rd year.
Capital (Series A) (Series B)
input $5 Mil $10 Mil Profitable
300
Million ($USD)
Revenue
200
1st year 2nd year 3rd year 4th year 5th year
100 Gross Margin
0 Net Profit after
Revenue $30 Mil $42 Mil $77 Mil $255 Mil
Tax
(3 drugs) (4 drugs) (7 drugs) (22 drugs)
Note that only upfront cash from licensing is included in the financial analysis shown here. Milestone
payments and royalties are beyond the 5-year scope.

15. Neurox Pharmaceuticals, Inc.
Exit Strategy
Cash dividends:
Neurox plans to distribute 30% of the net profit (after tax) among
shareholders annually.
FY2012 FY2013 FY2014 FY2015 FY2016
Cash Dividend ($Mil) - 5.9 8.1 15.4 54.0
Company sale:
We plan to grow the company to be highly profitable in preparation for a
sale in 5 years. Its unadjusted equity book value (lower-end estimate of
company’s value) is expected to reach $340 Mil. However, comparable
sales have reached $500 Mil to $650 Mil in the past.
Note that the milestone payments and royalties (not realizable within 5
years) will potentially reach a total value of $1.4B at the time of sale.

16. Neurox Pharmaceuticals, Inc.
Conclusion
Neurox is positioned to be the leader in supplying anti-AD preclinical
drugs. We are ready to show the world, for the very first time, that
AD is curable. While the industry still employs conventional
approaches and continues to suffer from the lack of progress in
treating AD, Neurox has found the solution. Our drugs are about to
revolutionize AD therapies.
Early drug development particularly depends on high level of
intellectual input. Our Harvard team brings in the best expertise,
experience and innovation to guarantee Neurox’s success.
It is our intention to enhance and extend the lives of millions, and in
that process, create a successful company.