Slide 1: Capstone Therapeutics Operating Update
Capstone Therapeutics Operating Update August 8, 2012 AS CAPSTONE
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation or otherwise attributable to Capstone regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and
Slide 3: Cash Report
Cash Report 1Q 2012 2Q 2012 Cash Expenses $ (662,000) $(292,000) * Cash Balance $13,116,000 $12,824,000 * Includes proceeds from sale of lab equipment ($170,000) and AZ R&D tax refund ($158,000) Maintain guidance for 2012 full year cash burn of approximately $2.5 M, excluding JV contribution
Slide 4: Qui Tam Lawsuit Update
Qui Tam Lawsuit Update > No lawsuit discovery initiated — duration of discovery process uncertain >» Lawsuit progress is stalled, awaiting DOJ settlement on fraud and kickback claims by other non-CAPS defendants > Settlement/Trial: Timing Unknown AS CAPSTONE 4
Slide 5: Strategic Challenge
Strategic Challenge Situation: Minimized cash burn but pending lawsuit limits strategic options (Ongoing public company reporting obligations/costs) Challenge: Create additional stockholder value while incurring ongoing public company administrative infrastructure costs Capstone Response: Entered in
Slide 6: Capstone Target Program Profile
Capstone Target Program Profile @ Target Profile: »Proprietary molecule w/solid IP > High value indications > Well-defined regulatory pathway » Demonstration of safety/efficacy »>$5M - $7M buys clinical data to value inflection point > High level of pharma interest in indications/big deals being don
Slide 7: LipimetiX Development LLC (JV)
C LipimetiX Development LLC (JV) LLC Format CAPS contributed $6M for 60% (ownership) 2 tranche funding milestone to IND allowance $5M of CAPS contribution has preferential distribution right Lipimetix LLC (Lipi) contributes UAB license for current/future IP, pre- clinical data for 40% (ownership) JV
Slide 8: LipimetiX Development LLC - JDC Members Management Team
LipimetiX Development LLC JDC Members — Management Team @ Dennis Goldberg, Ph.D. » 25 years biotech/pharma experience » Specialized Center of Research on Atherosclerosis - UCSD > Biology Lead Atherosclerosis Discovery Program — Pfizer Central Research @ VP Prod. Dev. And Reg. Affairs - GelTex Pharma
Slide 9: LipimetiX Development LLC - JDC Members Management Team
LipimetiX Development LLC JDC Members — Management Team @ Eric Morrel, PhD — Clinical Research » 20 years biotech experience > PhD from MIT specializing in LDL transport into artery wall » Clinical development at Ascent Pediatrics, Transport Pharmaceuticals > Gene therapy clinical program at TKT @ P
Slide 10: Scientific Advisory Board
Scientific Advisory Board G.M. Anantharamaiah, PhD - Inventing Scientist > Professor, Dept of Medicine, Division of Gerontology & Geriatric Medicine > University of Alabama, Birmingham Ira Tabas, MD, PhD > Vice-Chaitman of Research, Department of Medicine, Columbia University > Professor of Medicine
Slide 11: AEM-28 Rational Design at UAB
AEM-28 Rational Design at UAB — 299 aa down to 28 aa with full function Tings regen ASS S2 ny Apolipoprotein E Bx: Lipimerf ) CAPSTONE 11
Slide 12: Target Indications
Target Indications @ Homozygous Familial Hypercholesterolemia (HoFH) > Absence of LDL receptor function > Cannot clear LDL or control cholesterol levels > Orphan indication, potential for rapid development/ approval > Potential $200 million market @ Severe Refractory Hypercholesterolemia > Not respo
Slide 13: Target Indications -2
Target Indications -2 @ Acute Coronary Syndrome » 2,000,000 hospitalizations/year in US alone > 10-25% recurrence rate in first year after event >» Reduce atherosclerosis burden and mortality > Potential $11 Billion annual market > Will require an outcome study oS ipit CAPSTONE i pine)
Slide 14: Fast-Track Development
Fast-Track Development due to high unmet need, orphan drug status ‘ive Cash 6 5 a4 53 = 2 =e i) 3 € 3 oO 8 OQ BS 2 Q S 8 9) & 2 Q NS QD a + Phase 1 - Single ascending-dose study + (MTD, safety) in LDL>160 mg/dl ¥ Preliminary dose ranging ¥ Demonstrate LDL lowering + Phase 1b/2a- Multiple ascending d
Slide 15: Homozygous FH Animal Evidence: AEM-28 Reduces LDL & VLDL
Homozygous FH Animal Evidence: AEM -28 Reduces LDL & VLDL >» Watanabe Heritable Hyperlipidemic (WHHL) Rabbits have same genetic defect as human FH patients > WHHL rabbits are refractory to statins, bile acid sequestrants, etc. » Single dose of AEM-28 reduces non-HDL cholesterol 45% at 18 hours al eV
Slide 16: ACS Animal Evidence: Direct Artery Wall Effects
ACS Animal Evidence: Direct Artery Wall Effects Reduce Atherosclerosis Reduction in Atherosclerosis far Exceeds Cholesterol Drop Control Animal Plasma Cholesterol = 1600 mg/dl 51% of aorta covered by fatty streaks AEM-28 Animal Plasma Cholesterol = 1100 mg/dl 8% of aorta covered by fatty streaks Lip
Slide 17: Industry Investing in Next Generation of Atherosclerosis Drugs
Industry Investing in Next Generation of Atherosclerosis Drugs @ Raise HDL cholesterol levels (good cholesterol) »4 consecutive failures in HDL elevating approach » Roche CETP inhibitor failure follows Pfizer's ~$1B failure with torcetrapib « Merck and Lilly in Phase 3 > Niacin and Fibrate Phase 3 t
Slide 18: Comparable Deals Suggest Licensing Terms at Different Stages
Comparable Deals Suggest Licensing Terms at Different Stages - in Us$ mittions F - Upi Total e pee |tveme [owe [et | cin | Profit sharing for Isis Genzyme 1/08 $325 $1,900 Mipomersen in Ph3 for FH and other indications Pfizer Medicines 12/09 $17 $417 ApoA-| Milano with Ph1-2 Company results PCSkK¢ i
Slide 19: Summary — Apo E Mimetics
Summary — Apo E Mimetics @ Novel mimetics of key lipid/cholesterol metabolism protein > Utilizes alternate receptors on liver to clear atherogenic lipoproteins > Direct anti-inflammatory and lesion regression effects on artery > Believed to be only product in development with both effects @ Does not
Slide 20: Capstone Summary
Capstone Summary @ Three Programs: > Apo E Mimetic Peptide AEM-28 in LDL Reduction >» AZX100 in Pulmonary Fibrosis > AZX100 in Spinal (Epidural) Fibrosis @ Continue Virtual Operation (1.5 Employees/ Consultants) to Preserve Cash @ Cash Resources Believed to be Adequate to Reach Value Milestones AS i
Slide 21: APSTON
C WD APSTON THERAPEUT OTCQB: CAPS www.capstonethx.com Capstone Therapeutics 1275 West Washington Street - Suite 101 Tempe, AZ 95281 (602) 286-5520 IE AS CAPSTONE 2