Analyst Report Coverage initiated June 19th, 2009 Aurgalys is contracted by BioAlliance to provide equity research Mickael Dubourd, Ph.D., SFAF Paris & Evry, France

BioAlliance Pharma E URONEXT : BIO [FR0010095596 – C OMPARTMENT C] July 4th, 2014

Share Price: €8.48 BioAlliance to become Onxeo, the (as of July 4th, 2014) Orphan Oncology Innovator Estimated price: The BioAlliance/Topotarget merger was approved by their respective shareholders at the end of June 2014. The new €10.77 company, Onxeo intends to become a leader in orphan oncology, with a product portfolio aiming at providing therapeutic solutions for diseases of strong unmet medical High/Low since 01.01.14 11.74/4.30 needs: for Peripheral T-Cell (PTCL), (€) Livatag for liver and Validive for radiotherapy-induced oral mucositis. The FDA announced on July 3rd, the approval of Market Cap (€m) 175.4 belinostat in 2nd line treatment of PTCL, triggering a $25M milestone from partner Spectrum Pharmaceuticals and double- Estimated Cash 4.0 digit royalties on sales. Marketing of belinostat is expected as early as July 2014. A full Onxeo update will be published once Position (€m) the merger is completed this summer. Estimated market cap. 222.9 BioAlliance/Topotarget merger approved by (€m) shareholders Number of Shares (m) 20.7 BioAlliance announced last April, its merger agreement with Danish Topotarget. The merger was approved by Topotarget’s and BioAlliance’s shareholders on June 27th and 30th respectively, to create orphan oncology Estimated price (€) 10.77 leader Onxeo. After completion of the merger, due in July/August 2014, Onxeo will be listed on both Euronext Paris and Nasdaq OMX and will benefit from a product portfolio of late-stage products in orphan oncology. The continuating company will be BioAlliance Pharma and 2 newly Volume 3 months 234,000 issued shares of BioAlliance will be exchanged for every 27 Topotarget shares average held. BioAlliance existing shareholders will hold approximately 2/3 of Onxeo while Topotarget’s shareholders, 1/3. Free Float 74.0% Onxeo’s orphan products have all received orphan designation in . Livatag and Belinostat also obtained the orphan status in the US. Moreover,

FDA’s “Fast-Track” designation has been granted to all of Onxeo’s late stage products, allowing a faster review process in the US. The “Fast-Track” status is Dividend Forecast 12 0.0 also the recognition from the US regulatory agency that Onxeo’s products months (€) could be a therapeutic solution for diseases with strong unmet medical needs. Data is as July 4th, 2014, for BioAlliance only and do not take into account Topotarget. An update on Onxeo will be published once the Belinostat’s approval in the US, triggers a $25M BioAlliance/Topotarget merger is completed (Jul./Aug. 2014) milestone payment Belinostat, an inhibitor of histone deacetylases which have been implicated in cancer, is Topotarget’s lead drug candidate. Belinostat has been licensed to American Spectrum Pharmaceuticals since 2010, with marketing exclusivity in the US and India. Topotarget has already received $40M plus 1 million of Spectrum Shares, out of the $350M deal. Belinostat has just been approved by the FDA for the treatment of relapsed/refractory Peripheral T-Cell Lymphoma (PTCL). PTCL is a subtype of non-Hodgkin , with an incidence of 18,000 cases every year (US and European Union) and a 5-year survival rate of only 30%. Most patients are treated in first-line therapy with CHOP, although only a subset of PTCL patients benefit from this (ALCL ALK+ subtype, around 10-20% of PTCL

PAGE 2 July 4th, 2014 – BioAlliance Pharma Analyst Report

patients). There are no standard therapies for this condition. Marketing authorization by the FDA triggers a $25M milestone payment by Spectrum Pharmaceuticals to Topotarget. The payment expected by the end of 2014 will strengthen Onxeo’s cash position. Onxeo will also be receiving double- Euronext since January 1st, 2014 digit royalties on sales. Spectrum Pharmaceuticals is also assessing Belinostat in combination with /, in non-small cell (NSCLC). The Phase I/II BioAlliance +98.1 % trial is co-jointly funded by Spectrum and Topotarget and patient recruitment has been completed. Alys France* +24.5 % Livatag in Phase III, 25% of patients recruited CAC 40 +4.0 % BioAlliance’s most advanced drug candidate is Livatag for the treatment of Next Biotech +30.8 % primary liver cancer. There are 750,000 new cases of liver cancer worldwide CAC Pharma & Bio +1.8 % every year. Most of late-stage liver cancer patients treated with Sorafenib (Bayer) – the only approved therapy for unresectable liver cancer – relapse or are intolerant to this drug (~70%). Livatag, currently in phase III clinical trials in Europe and the US, is a formulation of doxorubicin with nanoparticles. 25% of the 400 patients have been recruited and the Last Patient In (LPI) is expected in 2015 for top-line results in 2016. Validive in Phase II, results in Q4-2014 $25M cash BioAlliance’s second late-stage product is Validive for the treatment of expected radiotherapy-induced oral mucositis (OM). The incidence of OM Q4-2014 (inflammation of the oral mucosa) in patients treated by radiotherapy is almost 100%. 50% of them will suffer from the most severe for Onxeo form of OM, a highly debilitating condition where patients are required to be hospitalized. For instance, the pain is so severe that patients cannot eat (need of parenteral feeding) and may have to interrupt their radiation therapy, thus reducing its effectiveness in fighting cancer. The recruitment of Validive’s phase II was completed in Q2-2014 and the preliminary results are expected at the end of the year. Positive results would definitely increase Onxeo’s value and help in securing a partner to bring Validive in Phase III clinical trials. Valuation of BioAlliance Pharma, Topotarget and Onxeo th Peak As of July 4 , 2014, we value BioAlliance Pharma at €222.9M or Prob. rNPV Product Sales €10.77/share. From our last update we reduced the value of 2014 Success (M€) launch (M€) Loramyc/Oravig to €28.3M, following its poor sales performance in Europe BioAlliance 222.9* and the US. We adjusted Livatag’s NPV to €90.8M, to account for updated Livatag 600 50% 90.8 2017 incidence data (Globocan 2012). Validive 200 30% 20.5 2019 We value Topotarget at €127.2M (or DKK 948.9M, DKK 6.51/share at an AMEP 160 15% 8.0 2022 exchange rate of €1.00 = DKK 7.46). Topotarget’s valuation was based on sales forecast of belinostat as 2nd line treatment of PTCL, 1st line treatment Sitavig 230 100% 75.3 Licensed of PTCL (phase III to start in 2015), and in combination with Loramyc 50 100% 28.3 Marketed carboplatin/paclitaxel in NSCLC (Phase I/II recruitment completed). Topotarget 127.2* Belinostat is currently being actively developed by Topotarget’s partner Spectrum Pharmaceuticals in these indications. Other indications for Belinostat 300t 100% 107.8t Approved PTCL (2nd line) (2nd line) Belinostat have yet to be determined and would represent significant Belinostat 700 25% 19.4 2022 upside should clinical trials be successful. NSCLC When the merger is effective, we value Onxeo at €350.1M or €11.12/share Onxeo 350.1* (31,482,333 shares after completion of merger). Sales performance of * Sum may not add up due to rounding belinostat in 2nd line treatment of PTCL and positive Phase II results for t for 1st line and 2nd line treatment Validive could represent short-term upside. Expected news events • Jul 2014 Belinostat product launch in the US • Jul/Aug-2014: Listing of Onxeo on Euronext and Nasdaq OMX • H2-2014: Launch of Sitavig in the US • Q4-2014: Validive’s phase II preliminary results • Q4-2014: Livatag’s Data Safety Monitoring Board • 2014: Licensing deals for Sitavig in Europe

July 4th, 2014 – BioAlliance Pharma Analyst Report PAGE 3

(BioAlliance: EURONEXT PARIS - Euronext - Local Securities – Ordinary stock – Continuous trading - Compartment C – One-year chart dated July 4th, 2014)

As other European companies of the life sciences and healthcare sectors, BioAlliance’s share price has shown strong performance since the beginning of the year (+98.1%). The increase was initiated when the company received the Fast- Track status from the FDA for Validive. After a correction in March 2014, due to the strong decline of US and European Biotech stocks, BioAlliance’s share price has remained relatively steady (around €8.00) despite positive news: licensing deals for Sitavig in the US, South Korea, and more recently Brazil, status granted to Livatag, merger with Topotarget… With the FDA approval of belinostat in the US, BioAlliance’s share closed at €8.48 on July 4th, 2014, an 8.0% increase from the previous day. BioAlliance has outperformed the Next Biotech and Alys France indices which increased 30.8% and 24.5% respectively since January 1st, 2014.

Résumé en français La fusion avec Topotarget, annoncée en avril 2014, a été approuvée par les deux assemblées générales extraordinaires de BioAlliance et Topotarget. La nouvelle entité, Onxeo, s’inscrira en tant que leader dans le développement de médicaments contre les rares et sera cotée à la fois sur Euronext Paris et le Nasdaq OMX Copenhague. Onxeo bénéficiera d’un portefeuille de produits avancés dans leur développement avec des échéances à court terme, créatrices de valeur.

Le belinostat, issu de la société Topotarget, vient juste d’être accepté aux USA pour le traitement de 2e ligne du lymphome T périphérique. L’accord de la FDA reçu 5 semaines plus tôt que prévu, déclenche un versement de 25M$ par le partenaire Spectrum Pharmaceuticals qui possède les droits aux USA et en Inde du produit (accord de licence de 350M$, dont 40M$ déjà versés, signé en 2010 et qui prévoit aussi des royalties à 2 chiffres sur les ventes). Les premières ventes sont attendues dès le mois de juillet 2014. Le Livatag, issu de BioAlliance, est en phase III, dernière étape clinique avant l’obtention de l’autorisation de mise sur le marché. 25% des patients ont déjà été recrutés et les résultats sont attendus en 2016. Le cancer du foie est une pathologie qui touche 750,000 personnes dans le monde chaque année. Seul le sorafenib (Bayer) est approuvé dans le traitement du cancer du foie avancé. Avec environ 70% de patients réfractaires ou intolérants au sorafenib, BioAlliance pourrait apporter une nouvelle solution thérapeutique innovante pour ces patients.

Le Validive, 2e produit le plus avancé de BioAlliance a pour but de traiter la mucite orale induite par la radiothérapie chez les patients souffrant de cancers ORL. La mucite, lorsqu’elle est sévère, provoque de fortes douleurs au niveau de la cavité buccale pouvant provoquer l’hospitalisation des patients ne pouvant plus se nourrir. Les patients sont parfois amenés à réduire ou retarder le protocole de radiothérapie, réduisant ainsi l’efficacité de ce traitement sur leur cancer. Il n’y pas à ce jour de médicament pour traiter et prévenir la mucite orale des cancers ORL. Le recrutement de la phase II s’est achevé en mai dernier et les résultats préliminaires sont attendus en fin d’année. S’ils sont positifs, cela pourrait faciliter un possible partenariat pour amener le produit en phase III. Ces trois produits ont tous obtenu le statut de médicament orphelin en Europe. Le Livatag et le belinostat ont reçu ce même statut aux USA. Tous ces produits ont aussi acquis le statut Fast Track de la FDA, permettant une procédure réglementaire accélérée aux USA. Nous valorisons BioAlliance à 222,9 M€ et Topotarget à 127,2 M€, soit une capitalisation boursière pour le groupe Onxeo de 350,1 M€. Nous publierons une analyse complète d’Onxeo lorsque la fusion sera effective (juillet/août 2014) avec l’apport des actions Topotarget à BioAlliance.

PAGE 4 July 4th, 2014 – BioAlliance Pharma Analyst Report

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Acknowledgements

Special thanks to:  Chris Wilkinson (B.Sc. Pharmacy, US trader) for her detailed and constructive comments

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