Improving T Cell Function Through Targeted Gene Silencing with Self Delivering Rnai

Improving T cell Function Through Targeted Gene Silencing with Self Delivering RNAi

Tumor Targeted Lymphocyte Summit December 11-13, 2018 Boston, MA

www.phiopharma.com NASDAQ: PHIO This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “anticipates,” “plans,” “expects,” “indicates,” “will,” “intends,” “potential,” “suggests” and similar expressions are intended to identify forward-looking statements. These statements are based on Phio Pharmaceuticals Corp.’s (the “Company”) current beliefs and expectations. Such statements include, but are not limited to, statements about the future development of the Company’s products (including timing of clinical trials and related matters associated therewith), the expected timing of certain developmental milestones, the reporting of unblinded data, potential partnership opportunities, the Company’s competition and market opportunity and pro forma estimates. The inclusion of forward-looking statements should not be regarded as a representation by the Company that any of its plans will be achieved. Actual results may differ from those set forth in this presentation due to risks and uncertainties in the Company’s business, including those identified under “Risk Factors” in the Company’s most recently filed Year-End Report on Form 10-K and in other filings the Company periodically makes with the U.S. Securities and Exchange Commission. The Company does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this presentation.

Property of Phio Pharmaceuticals 2 Presentation outline

• Short history of RNAi and the potential of self-delivering RNAi in ACT

• Comparison of self-delivering RNAi technology and other techniques

• Protein targets in TILs, including checkpoint inhibition, and its impact on cell activity

• Considerations for clinical and commercial applicability

Property of Phio Pharmaceuticals 3 Phio Pharma is working on (Nobel Prize winning science)2

"for their discovery of RNA "for their discovery of cancer interference (RNAi) - gene therapy by inhibition of negative silencing by double-stranded immune regulation.” RNA." X =

Andrew Fire Craig Mello James P. Allison Tasuku Honjo

Property of Phio Pharmaceuticals 4 Gartner Hype Cycle - RNAi

RNAi based therapeutics since Early Big  clinical Pharma early 2000s trials enters Nobel  unmodified or minimally Discovery Prize of RNAi modified compounds were Several rushed to the clinic with big trials fail significant investment from big First FDA pharma approval  dose requirements, side New Big advanced effects and limited clinical pharma chemistry leaves efficacy created a dramatically negative view of the technology LNPs: still immune  advancement of core effects technology (chemical modifications / conjugations) triggering first approvals

2000 2005 2010 2015 2020  clinical unmet needs in (cell Innovation trigger Peak of inflated Trough of disillusionment Slope of enlightenment Plateau of based) IO provide additional expectations productivity growth platform for self-      delivering RNAi

Adapted from: Khvorova & Watts, Nature Biotechnology Propertyvolume 35, pagesof Phio 238–248 Pharmaceuticals (2017) 5 History RNAi and ACT concept of using siRNA in T cell ACT

• Morris et al., 2005:

• RNA interference [… makes it possible to have… ] clinical applications of T cells which are modified to have a desired loss of function to improve their immunobiology.

• [Use RNAi] for T cell therapy to render T cells functionally resistant to a cytotoxic stimulus, to remove an endogenous inhibitory signal to endow T cells with supra-physiologic function, [and] to generate T cells that can function in an immunosuppressive tumor microenvironment.

Property of Phio Pharmaceuticals 6 History RNAi and ACT using siRNA to reduce PD-(L)1 expression

• Borkner et al., 2010:

• [… ] long-term siRNA-mediated reduction of PD-1 surface expression could be achieved on murine and human T cells […] resulting in improved immune functions as measured by cytokine pro-duction, cytolytic degranulation, and proliferation.

• This method may be an alternative approach to modulate the function of tumor-specific T cells generated by TCR transduction, or TIL expansion for adoptive T cell therapy.

• Retroviral siRNA transduction

• Iwamura et al., 2012:

• siRNA-mediated knockdown of PD-1 ligands on human T cells [tumor- specific T cells generated by TCR transduction].

• […] augments the function of these cells, including IFN-g production and CTL activity, indicating that PD-1 ligands on human T cells augments the function of these cells.

• siRNA transfection by electroporation

Property of Phio Pharmaceuticals 7 self-delivering RNAi (sd-rxRNA®) Therapeutic Platform

. The sd-rxRNA platform is based on extensive chemical modifications of siRNAs . Such hydrophobically modified siRNA molecules can penetrate all cell types ex vivo and in vivo and achieve long-lasting specific target gene knockdown . sd-rxRNA compounds do not require any additional delivery formulations or techniques

Property of Phio Pharmaceuticals 8 Self-delivering RNAi overcoming limitations & setbacks of conventional siRNA

conventional siRNA self-delivering RNAi (sd-rxRNA®)

• limited intracellular delivery • high spontaneous intracellular delivery • requires use of LNPs and/or electroporation • no need for additional delivery tools • toxicity of LNPs / electroporation • no toxicity related to delivery • limited stability and persistence • high stability and persistence • LNP / conjugates limit clinical use to certain • cell & tissue delivery not restricted tissues

Property of Phio Pharmaceuticals 9 self-delivering RNAi (sd-rxRNA®) Therapeutic Platform

sd-rxRNA can penetrate immune cells, where antibodies fall short, RNAi compound (sd-rxRNA) and block the expression of administered proteins involved in a disease sd-rxRNA enters cell condition

mRNA

RISC target mRNA is cut & destroyed cleaved mRNA Target protein sd-rxRNA loads into expression RNA-induced silencing is blocked cell complex (RISC) membrane

Property of Phio Pharmaceuticals 10 sd-rxRNA in Adoptive Cell Therapy (ACT) no need for LNPs, electroporation, or cell delivery methods

. Self-delivering RNAi (sd-rxRNA) provides an easy way to T cells are obtained from a patient 1 3 modify immune cell or immune cell bank 1 phenotype used for ACT during the ex Expansion/ modification vivo manufacturing Patient Cells are expanded process. 2 sd-rxRNA or Pre-treatment of cells treatment . Enhanced with sd-rxRNA cells Immune 2 compounds can be cell bank used to silence one or Enhanced cells are infused back more genes that 3 into the patient to attack cancer restricts its optimal immunobiology (such as PD-1 and other checkpoints).

Property of Phio Pharmaceuticals 11 High transfection efficiency with high cell viability

Nearly 100% transfection efficiency… … combined with high cell viability

120 140

120 98.6% 100

100 80 Viability (%) Viability

40 40

20 20 Gene Gene expression (% of NTC)

0 0 1uM 0.5uM 0.25uM 0.12uM 0.03uM Property of Phio Pharmaceuticals 12 Silencing of PD-1 in T cells by sd-rxRNA - initial proof of concept

Extracellular PD-1 Intracellular PD-1 PD-1 silencing in healthy T cells UTC sd-rxRNA NTC sd-rxRNA PD-1 by sd-rxRNA

. PD-1 silencing in healthy T cells by using sd-rxRNA led to significant decrease in surface and as well no no intracellular levels of PD-1 beads beads beads beads 0.5uM 1uM 2uM 0.5uM 1uM 2uM

. Activated PD-1 silenced healthy T cells produce more IFN-γ

Courtesy of R. Kiessling group Karolinska Institute no OKT-3 OKT-3 stimulation

UTC sd-rxRNA NTC sd-rxRNA PD-1 Property of Phio Pharmaceuticals 13 sd-rxRNA use is not limited to specific cells

Human T cells Engineered T cells

. Checkpoint . TILs for ovarian cancer or melanoma inhibition and . CAR T . HSCT for modulation optimization for . TCR of GvHD persistence and . / T cells fitness of immune effector cells

Human NK cells Dendritic cells . Improve existing clinical treatment . Autologous or paradigms and Allogeneic Natural expand Killer (NK) cells . Dendritic cell cancer applicability of . Cytokine Induced vaccines engineered cells Killer (CIK) cells . Engineered NK or CIK

Property of Phio Pharmaceuticals 14 Broad applicability of sd-rxRNA platform in adoptive cell therapy

Precise and selective Improved cell based ACT Cells Optimized cells programing of cells for ACT immuno-therapy

TILs sd-rxRNA Immune effector cells that can function in an immunosuppressive tumor micro- Existing cell environment: NKs expansionsd- / rx-NKs manufacturing • Checkpoint inhibition paradigms*rxRNA • Enhancing long- * no delivery vehicle or term survival and electroporation rx-TCR / “metabolic TCR / required rx-CAR T fitness” CAR T * compatible with freeze/thaw cycles • Combinations * straightforward GMP integration Property of Phio Pharmaceuticals 15 Self-delivering RNAi can help unlock effective use of ACT in solid tumors

T Cells & Checkpoints ACT (T cells and Tumor The self- others) cell fitness Microenvironment delivering nature makes sd-rxRNA ideally suited for Checkpoint Inhibition Cell Exhaustion / Reduce TME barriers use with: “Release breaks” Persistence for immune cells - ACT “Improve engine and “Pave the road” fuel” treatments • TILs • NK cells • Undisclosed target (ex-vivo use) • Engineered T cells • Dendritic cells cells - direct • T cells therapeutic use (in-vivo)

Property of Phio Pharmaceuticals 16 sd-rxRNA Targeting PD-1 in TILs Enhances Killing of Autologous Tumor Cells

Tumor Infiltrating Lymphocytes (TILs) Against Melanoma in vitro . TILs isolated from melanoma 0.700 patient

0.600 . TILs treated with PD-1 0.500 sd-rxRNA in a clinically used Rapid Expansion Protocol 0.400 (REP)

0.300 . Tumor cell killing by TILs was cytotoxicity,units 0.200 measured by chromium release

0.100 assay in vitro

0.000 Ligtenberg et al., Self-Delivering RNAi Targeting PD-1 No RNAi sd-rxRNA PD-1, sd-rxRNA PD-1, anti PD-1 Improves Tumor-Specific T Cell Functionality for Adoptive Cell 2uM 5uM antibody, 10ug/ml Therapy of Malignant Melanoma, Molecular Therapy (2018) 4 hours 20 hours Property of Phio Pharmaceuticals 17 Targeting Multiple Immunosuppression Pathways* in a Single Therapeutic Entity

140 Simultaneous Silencing of Multiple Genes with sd-rxRNA

*Extracellular *Intracellular 120 Undisclosed Target PD-1 TIGIT LAG-3 . Equal levels of silencing 100 of individual protein targets (whether

80 intracellular or extracellular) or in

60 combination can be obtained with sd-

Gene Expression,Gene rxRNA 40

% of non-targeting% control (NTC) . Simultaneous silencing 20 of multiple genes is a major advantage of sd- 0 rxRNA compared to other technologies

Property of Phio Pharmaceuticals 18 Longevity of sd-rxRNA with ACT in vivo

. Mouse xenograft model of Ovarian Cancer: Meso CAR T-Cells Treated with ovarian cancer sd-rxRNA Targeting PD-1 Reduces Tumor Growth

. Meso CAR T-cells: T cells 350 engineered to target mesothelin, ) 300 overexpressed on many solid 3

tumors 250

. Meso CAR T-cells were pre- 200 treated with sd-rxRNA ex vivo and injected into human ovarian 150 cancer tumors in mice 100

. Reduction of tumor growth is 50 significantly improved by anti- Tumor volume (mm PD-1 sd-rxRNA treatment at 0 PBS Meso Meso Meso one month CAR T CAR T CAR T + + sd-PD-1 anti PD-1 mAb Property of Phio Pharmaceuticals 19 Longevity of sd-rxRNA with ACT in vivo

Percentage of live CD45+PD1+ cells 8 in A1847 tumors . Mouse xenograft model of ovarian cancer

6 . Meso CAR T-cells were pre-treated ex vivo and injected into human ovarian cancer tumors in mice 4

. Tumors harvested after one month

2 and human CD45-expressing cells were extracted and analyzed for PD-1 expression by flow-cytometry

0 PBS . Results show sd-rxRNA induced PD-1 meso CAR T-cells silencing present after 1 month in vivo meso CAR T-cells + PD-1 sd-rxRNA meso CAR T-cells + NTC sd-rxRNA meso CAR T-cells + anti PD-1 antibody

Property of Phio Pharmaceuticals 20 Beyond T cells: Powerful and long gene silencing in NK cells by using sd-rxRNA

A single dose of TIGIT targeting sd-rxRNA is After a single dose of TIGIT targeting sd-rxRNA, able to reduce TIGIT mRNA levels by greater the reduction of TIGIT mRNA by >60% persists than 95% after 72h for up to 7 days

Fresh NK cells, 72 hour – single transfection Fresh NK cells, 7d - single transfection 1.4 1.4

1.2 1.2

1 1

0.8 0.8

RQ 0.6 RQ 0.6

0.4 0.4

0.2 0.2

0 0 TIGIT NTC UTC TIGIT NTC UTC 2uM 1uM 0.5uM 2uM 1uM 0.5uM

Property of Phio Pharmaceuticals 21 Beyond T cells: Weaponizing of NK cells by using sd-rxRNA

Degranulation assay results . CD107 mobilization assay 40% enables detection of cytolytic capacity of NK cells.

30% . A dose dependent reduction of TIGIT protein by TIGIT targeting sd-rxRNA results in a dose 20% dependent increase in cytotoxic

% CD107a+% capacity of NK cells 10%

0% TIGIT NTC UTC no K562 Treatment

2uM 1uM 0.5uM

Property of Phio Pharmaceuticals 22 Extramural collaborations – TILs and TCRs

Center for Cancer Immune Therapy (CCIT) Medigene AG (FRA: MDG1)

• Evaluating sd-rxRNA compounds targeting immune • Evaluating sd-rxRNA compounds targeting immune checkpoints in preclinical screening models of matched checkpoints and/or other immuno-suppressive targets in TIL/tumor cell pairs from melanoma and ovarian cancer combination with Medigene’s recombinant TCRs to develop patients modified T cells with enhanced efficacy for the treatment of solid tumors.

Marked PD-1 Reduction on Surface of TILs in Pilot Rapid Expansion Observe reduction* of PD-1 surface Levels in Activated T cells (non- Protocol engineered) as well as Transduced (engineered) re-activated T cells

Untransduced Activated T Cells Transduced Re-activated T Cells 48 hrs post reactivation Cells treated with Cells treated with 2 uM PD-1 targeting sd-rxRNA 2 uM NTC sd-rxRNA MFI

Untransduced TCR-1 TCR-2 T cells (T cells) (T cells$)

*) silencing activity not optimized for maximal effect PropertyCourtesy of ofPhio Dr. Pharmaceuticals Özcan Met & Christina Friese – CCIT-DK 23Courtesy of Dr. Manon Weis – Medigene AG $) Day 7 PD-1 treated TCR-2 cells not measured Iovance Biotherapeutics collaboration

. Testing of sd-rxRNA mediated gene silencing in Iovance’s TIL manufacturing process, evaluating TIL phenotype

. sd-rxRNA-mediated knock down of PD-1 was associated with phenotypic changes indicative of TIL activation

. Next steps include: . further evaluation of impact of sd- rxRNA mediated gene silencing on Fold change toFold NTC(control) TIL tumor reactivity 5 7 8 6 5 0 4 . implementation of optimized CR7 1BB x CD2 CD2 CD2 CD5 CD9 4 O silencing protocols and scale-up C thereof PD-1, n>6, preps from pre-REP melanoma/Fresh breast cancer TILs, 2uM sd-rxRNA

PropertyCourtesy of Phio of Pharmaceuticals Dr. Inbar Alfaguter - Iovance Biotherapeutics, Inc. 24 Beyond immune-checkpoints: impacting cell metabolism and differentiation

Naïve Activated Effector Memory T cell T cell T cell T cell

• Signaling pathways • Metabolic targets • Transcription factors • Epigenetic regulators Figure adapted from : Hongbo Chi - Nature Reviews Immunology 12: 325–338 (2012)

. Advances in the field of immunology show cellular metabolism as a driver and regulator of immune cell function and differentiation. . T cell activation is correlated with metabolic shifts toward glycolysis, activating energy promoting pathways required for high rates of proliferation or signaling.

FigureProperty adapted of Phiofrom: PharmaceuticalsGattinoni L, et al. -Nat Med. 2017 6;23(1):18-27 25 Beyond immune-checkpoints: impacting cell metabolism and differentiation

Agilent Seahorse XFp

Cell Mito Stress Test sd-rxRNA PD-1 control

sd-rxRNA (undisclosed) control

Figure from: Kawalekar OU et al. – Immunity 16;44(2):380-90 (2016)

Property of Phio Pharmaceuticals 26 Beyond ACT – reprogramming TME to optimize T cell function

• Development of sd-rxRNA compounds against TME targets Gustave Roussy • based on clinical experience with • Evaluating sd-rxRNA compounds for intra-tumoral injection in tissue injection of sd-rxRNA a mouse model of melanoma. therapeutics (proven safety & efficacy) • Undisclosed target is a protein isoform

• in-vivo proof of concept studies Identified potent sd-rxRNA (0.5 uM) and observed 80-85% reduction showing high level reduction of target of target gene in a mouse model of melanoma (intratumoral injection) gene with a level of selectivity In vitro results In vivo results impossible with other therapies target mRNA sd81 sd101 Ctl sd80 NTC sd79 control gene mRNA (other isoform) 1.20

• potential synergistic effect of 100% 77% 24% 21% 6% 28% 1.00 Target therapies with sd-rxRNA 0.80 reprogrammed ACT cells and sd- 0.60 rxRNA reprogrammed TME 0.40

0.20

Relative expression Relative 0.00 Gapdh fl-sd-rxRNA79 fl-sd-rxRNA79 PBS CourtesyProperty of ofPhio Delphine Pharmaceuticals Allard – Gustave Roussy 27 Beyond ACT – reprogramming TME to optimize T cell function

• Evaluation of RNAi compounds impacting dendritic cell (DC) function

• use of DCs as vaccines for cancer immunotherapy requires the DCs to Target cells + Naïve retain an immunostimulatory (mature) T only phenotype + DC only • many soluble inhibitory factors in TME + DC (UTC) can inhibit T cells both directly and primed T indirectly by inhibiting DC maturation. cells + DC (NTC) • potential synergistic effect of RNAi primed T cells reprogrammed ACT therapy and RNAi + DC (RNAi*) reprogrammed DC cancer vaccines primed T cells

*) undisclosed target Dendritic cells : T cells = 1:15 T cells : Target cells = 5:1

Property of Phio Pharmaceuticals 28 sd-rxRNA: Filling the Unmet Need of Other Therapeutic Approaches

Gene Small Feature / Advantage sd-rxRNA Antibodies editing molecules Act upstream in protein synthesis + + - - Can target intra- & extracellular proteins + + - + Can be used for “undruggable” targets + + - - Does not permanently change genome + - + + Potential for long duration of action +/- + - - Can target multiple proteins w/o issues + - - +/- Potentially “off-the shelf” / personalized Tx + - + + Low regulatory hurdle + - + + Low cost of goods + - - + Straightforward GMP integration + - +/- +

Property of Phio Pharmaceuticals 29 Logistical, clinical and commercial considerations

Consideration Commentary . 100% transfection with ex-vivo use in ACT & no major changes required in current manufacturing approach. Delivery . Extensive tissue distribution and cellular uptake with tissue injection but use in IO is limited to injectable tumors . Platform with proven safety in preclinical and clinical settings at high doses Safety . Low / no impact on cell viability in ACT setting

logistical Extending Tx potential of current ACT and other IO therapies

Scientific & . Efficacy . Potential to treat otherwise undruggable targets & . Potential for more personalized treatments

. FDA & EMA have shown favorable attitudes towards RNAi therapeutics Regulatory aspects . Clean regulatory track w/ clinical development for non life threatening diseases . Low intrinsic cost of RNAi molecules Cost / Pricing . Can lower overall treatment cost (e.g. limit checkpoint antibody use, lower complexity of cell manufacturing) . Approved ASO and RNAi therapeutics (as well as approved cell-based IO therapeutics) Commercial Market potential have established the commercial potential

Property of Phio Pharmaceuticals 30 Acknowledgements:

Phio Pharmaceuticals team: Iovance Biotherapeutics team: • Winnie Tam, PhD • Inbar Alfaguter, PhD • Melissa Maxwell • Cecile Chartier, PhD • Dingxue Yan • James Cardia, PhD Karolinska Institutet team: • Rolf Kiessling, MD, PhD CCIT Danmark team: • Maarten Ligtenberg, PhD* • Özcan Met, PhD • Christina Friese Gustave Roussy team: • Inge Marie Svane • Delphine Allard • Caroline Robert, MD PhD Medigene AG team: • Manon Weis, PhD • Luis Contreras, MSc

*)Currently at NKI, The Netherlands

Property of Phio Pharmaceuticals 31