Anxiety Disorder

PTSD Awareness Day October 26, 2016 Welcome & Introduction Seth Lederman, MD

Version P0035 10-24-16

Certain statements in this presentation regarding strategic plans, expectations and objectives for future operations or results are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, substantial competition; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and risks related to failure to obtain U.S. Food and Drug Administration clearances or approvals and noncompliance with its regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. The forward-looking statements in this presentation are made as of the date of this presentation, even if subsequently made available by the Company on its website or otherwise. Tonix does not undertake an obligation to update or revise any forward-looking statement, except as required by law. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2016, and future periodic reports filed with the SEC on or after the date hereof. All of the Company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.

• Seth Lederman, MD – Tonix Pharmaceuticals President & CEO

• Jonathan Davidson, MD – Emeritus Professor, Duke University

• Thomas Mellman, MD – Professor, Howard University

• Gregory Sullivan, MD – Tonix Pharmaceuticals Chief Medical Officer

Posttraumatic Stress Disorder (PTSD) – TNX-102 SL* Phase 2 trial reported data in May 2016

• Primary focus- PTSD Phase 3 clinical program – Planning to start Phase 3 in Q1 2017 – Targeting interim analysis topline 2H2017

• Discontinued fibromyalgia development – Narrowly missed primary endpoint in first Phase 3 study (September 2016) – Strong effects on sleep quality measures – Redirected resources to PTSD

*TNX-102 SL is an Investigational New Drug and has not been approved for any indication.

Seth Lederman, MD President & CEO Bruce Daugherty, PhD, MBA Chief Scientific Officer Gregory Sullivan, MD Chief Medical Officer Bradley Saenger, CPA Chief Financial Officer Jessica Morris EVP, Operations

Seth Lederman, MD Ernest Mario, PhD Chairman ALZA, Glaxo, Reliant Pharma Stuart Davidson Charles Mather Labrador Ventures, Alkermes, Combion BTIG, Janney, Jefferies, Cowen, Smith Barney Patrick Grace John Rhodes Apollo Philanthropy, WR Grace, Chemed NYSERDA, NRDC, Booz Allen Hamilton Donald Landry, MD, PhD Samuel Saks, MD Chair of Medicine, Columbia University Jazz Pharma, ALZA, Johnson & Johnson

TNX-102 SL – PTSD  Dec. 2015 Entered into Collaborative Research and Development Agreement (CRADA) with the United States Army Medical Materiel Development Activity (USAMMDA)  May 2016 Report results from AtEase study  Aug. 2016 End-of-Phase 2 meeting with FDA - Proposed Phase 3 clinical and NDA plan accepted - Breakthrough Therapy Designation Request can be submitted for review  Q1 2017 Target commencement of Phase 3 study in military-related PTSD  2H 2017 Topline data from interim analysis of Phase 3 study in ~180 military-related PTSD patients

I V PTSD in the Cyclobenzaprine and 21st century the potential efficacy of TNX-102 SL

II IV The neurobiology The current of PTSD treatment landscape

III Sleep and PTSD

The Iliad Henry IV, Part I The Red Badge of Courage Homer William Shakespeare Stephen Crane ca 8th Century BC ca AD 1598 Published AD 1895

Terms referring to PTSD as:

“…soldier’s heart…” “…traumatic neurosis…”

“…shell shock…” “…combat fatigue…”

1Stein D, Friedman M, Blanco C, eds. Post-traumatic Stress Disorder. 1st ed. John Wiley & Sons, Ltd.; 2011

© Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute The classification of PTSD 10 has evolved over time1 Recognition of PTSD in the Diagnostic and Statistical Manual of Mental Disorders (DSM)

DSM-I DSM-II DSM-III DSM-IV DSM-5 1952 1968 1980 1994 2013

1950 1960 1970 1980 1990 2000 2010

Gross Stress Omitted PTSD classified PTSD classified as Reaction as an Anxiety a Trauma- and “Stress response to an Disorder Stressor-Related 2 exceptional Disorder physical or mental stress”

1Andreasen, N.C. Annals of the New York Academy of Sciences. 2010; 2American Psychiatric Association. (2013). Diagnostic and statistical manual of mental disorders (5th ed.). Arlington, VA: American Psychiatric Publishing © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute The DSM-5 (2013) introduced significant 11 changes to the diagnostic criteria for PTSD

Diagnostic Criteria for PTSD (DSM-5) The “A” stressor A. Exposure to actual or threatened death, serious injury or criteria refined and sexual violence now excludes 1. Directly experienced criterion for 2. Witness in person individual’s response 3. Indirectly (close family member or friend) 4. Repeated or extreme exposure (e.g. first responders) to the event

B. Presence of one (or more) intrusion symptoms Avoidance separated C. Persistent avoidance of stimuli associated with traumatic event from negative cognitions and mood D. Negative alterations in cognitions and mood

E. Marked alterations in arousal and reactivity

F. Duration of disturbance (Criteria B-E) is more than 1 month Reckless and self- destructive behavior G. Disturbance causes clinically significant distress or impairment added H. Disturbance not attributable to physiological effects of a substance or medication

American Psychiatric Association. Diagnostic and statistical manual of mental disorders. 5th ed. Arlington, VA: American Psychiatric Publishing; 2013. © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute Evolving cultural and professional 12 perceptions

Abnormal response Normal response to to normal trauma abnormal trauma

Prevalence of PTSD

2-8% 19-31% 10-21% General population1 Vietnam veterans2 Operation Enduring Freedom (OEF; Afghanistan) / Operation Iraqi Freedom 8.6 million American adults affected5 (OIF) veterans3,4

Women more likely to develop than men5

Susceptibility may run in families5

1Kessler, Arch Gen Psych 2005; 2Norris, PTSD Res Quar. 2013; 3Tanielan, Invisible wounds of war. 2005; 4CBO Report 2012; 5http://www.nimh.nih.gov/health/topics/post-traumatic-stress-disorder-ptsd/index.shtml

Prevalent Population (U.S.) ~8.6 million1

Rx 510,000 6% Veterans Treated in VA3,4 Undiagnosed No Rx 6,788,000 79% 128,000 Diagnosed population 2% Large population (~1.8 million) Majority receive drug treatment Rx Civilians: ~75%2 872,000 Veterans: ~80%4 10% Civilians No Rx Population2 288,000 3%

1Kessler, et al., 2005; ; Prevalence rate of 3.5% applied to U.S. Census estimate of 247 million U.S. adult (>18) population in 2015 (www.census.gov/quickfacts/table/PST045215/00) 2IMS Consulting, Market Sizing & Treatment Dynamics: Posttraumatic Stress Disorder (PTSD) Patients", 2016 3Bowe and Rosenheck, 2015 ((638,451 veterans diagnosed with PTSD in the VA in fiscal year 2012 across all medical centers) 4Bernardy et al., 2012 (80% of veterans diagnosed with PTSD had at least one medication from the Clinical Practice Guidelines) © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute Growing economic and social burden 15 to care for veterans with PTSD

Health care costs associated with PTSD for OEF/OIF veterans:

Direct costs Indirect costs

$6,000-10,000 $2-3 billion per patient per year for estimated yearly cost OEF/OIF Veterans1 to society2

> 2 million Families, social care soldiers deployed since agencies, schools, 2 October 20011 employers, welfare system

1CBO Report 2012; 2Tanielan, Invisible Wounds of War. 2005

I V PTSD in the Cyclobenzaprine and 21st century the potential efficacy of TNX-102 SL

II IV The neurobiology The current of PTSD treatment landscape

III Sleep and PTSD

Stimulus

Phobia Panic

1Stahl SM, Grady MM. Stahl’s Illustrated Anxiety, Stress, and PTSD. New York, NY: Cambridge University Press; 2010. © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute Fear conditioning can result 18 in sustained activation of stress response1

• PTSD patients suffer from repeated/sustained stress through fear conditioning

• Loud noises (explosions), objects (weapons), and smells (burning rubber) can trigger fear response

1Stahl, SM. Stahl's Essential Psychopharmacology. 4th ed. Cambridge, United Kingdom: Cambridge University Press; 2013 © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute The sympathetic nervous system 19 responds to fearful stimuli1

“Fight or Flight”

Pupils Dilate Peristalsis Sympathetic Nervous System Heart Rate Energy Blood Pressure Mobilization Mobilizes the body

for activity Respiratory Rate Urination Defecation

1Fundamental Neuroscience. 2nd ed. Academic Press, Elsevier Science; 2003. © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute The healthy autonomic nervous system 20 orchestrates balanced physiology1

Autonomic Nervous System Sympathetic Parasympathetic Nervous System “Fight “Rest Nervous System or & Mobilizes the body for Flight” Digest” Conserves energy1 activity1

Homeostasis PTSD is decompensated hyper-sympathetic2 Sympathetic > > > Parasympathetic

Compensation Decompensation Hyper-sympathetic Hypo-parasympathetic

1Fundamental Neuroscience. 2nd ed. Academic Press, Elsevier Science; 2003. 2Stahl SM, Grady MM. Stahl’s Illustrated Anxiety, Stress, and PTSD. New York, NY: Cambridge University Press; 2010. © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute 21 Sustained stress can lead to stress sensitization1

Normal Stress Resilience Stress Sensitization Stress response returns to baseline Stress response remains active when when stressor is withdrawn extreme stressor is withdrawn

Amygdala Amygdala

Stressor Extreme/ Repeated PTSD

Compensation Hyper-sympathetic

Decompensation Hypo-parasympathetic Amygdala

• Low/Absent parasympathetic tone – makes it difficult to re-integrate in civilian life and enjoy nurturing interactions and relationships with families and friends

• Hyper sympathetic tone – better suited to deployment and may encourage re-enlisting, particularly if employment in law enforcement is not an option

I V PTSD in the Cyclobenzaprine and 21st century the potential efficacy of TNX-102 SL

II IV The neurobiology The current of PTSD treatment landscape

III Sleep and PTSD

Sleep disturbances are a core feature of PTSD and a component of three of the four major symptom clusters: Diagnostic Criteria for PTSD (DSM-5)2 B. Presence of one (or more) intrusion symptoms C. Persistent avoidance of stimuli associated with traumatic event D. Negative alterations in cognitions and mood E. Marked alterations in arousal and reactivity Arousal/wakefulness Nightmares Avoidance of Sleep

1Germain A. Am J Psychiatry. 2013; 2American Psychiatric Association. Diagnostic and statistical manual of mental disorders. 5th ed. Arlington, VA: American Psychiatric Publishing; 2013. © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute Sleep disturbances in PTSD 25 recognized by the VA1

Sleep Disturbance in VA Guideline:

“One of the most difficult symptoms to address in the immediate aftermath of exposure to a traumatic event is sleep disturbance”

“Theoretically, the more sleep impairment and trauma-related nightmares an individual continues to experience, the more likely he or she is to continue to experience the symptoms of [Acute Stress Disorder] ASD and/or subsequently develop PTSD”

“There is little evidence for the effectiveness of any sleep aids in the immediate aftermath of trauma.”

“Recommend adjunctive treatment with prazosin for sleep/nightmares.”

Restorative Sleep Hypothesis1: Sleep is an active, necessary state for processing emotionally charged memories, replenishing energy, and resetting homeostasis to circuitry in the brain ENERGY

Homeostasis

Depression, Chronic Sleep Deprivation Pain, Anxiety, and Sleep Disturbances PTSD

Clinical observations of sleep complaints in PTSD found1:

NREM Disturbances REM Disturbances Nightmares Insomnia Bad dreams unrelated to traumatic events Nocturnal panic attacks Disruptive behavior (acting out dreams) Sleep terrors Sleep-disordered breathing

Targeted treatment for nightmares and insomnia in PTSD patients found that all symptom domains in PTSD improved2,3 – Normalization of sleep disturbances has beneficial effects on daytime PTSD Symptoms2,3

Dyssomnia: symptom or contributing factor?

1Germain A. Am J Psychiatry. 2013; 2Taylor F. et al. Biol Psychiatry. 2006. 3Raskin M. et al. Biol Psychiatry. 2007

© Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute Hypothesis: Emotionally charged memories can form a 28 mental abscess that is normally resorbed by restorative sleep

Restorative Sleep

Disturbed Sleep

If the memory is too painful, it awakens the PTSD sufferer and prevents processing and resorption

• PTSD patients complain of poor sleep quality as a core symptom – Distressing dreams (nightmares) are part of “re-experiencing” – Restless sleep is part of “hyper-arousal”

• Poor sleep quality after trauma is linked to onset of PTSD – Poor sleep correlates with depression, substance abuse and suicide

I V PTSD in the Cyclobenzaprine and 21st century the potential efficacy of TNX-102 SL

II IV The neurobiology The current of PTSD treatment landscape

III TNX-102 SL in PTSD

• Market highly fragmented, with benzodiazepines being the largest class (but contraindicated1) • Multiple medications per patient (or “Polypharmacy”) is the norm • Approximately 55% of patients receive a benzodiazepine, and 53% receive an SSRI • Selective serotonin reuptake inhibitors (SSRIs) are the only FDA approved drug class Adrenergic Agents Tricyclic Antidepressants All Others Estimated PTSD Market

Non-benzodiazpepine Volume (Civilian Hypnotics Population Only) ~14.1 million TRx*2 Serotonin and norepinephrine reuptake inhibitors Benzodiazepines 2,844,792 TRx

Other Antidepressants

SSRIs 2,839,118 TRx Atypical Antipsychotics

Anticonvulsants/Mood Stabilizers * TRx = Total prescriptions 1VA/DoD Clinical Practice Guideline for the Management of Post-Traumatic Stress, Version 2, 2010 2IMS Consulting, Market Sizing & Treatment Dynamics: Posttraumatic Stress Disorder (PTSD) Patients", 2016 © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute 32 Pharmacotherapy: Standard of Care

Two SSRI Antidepressants are FDA approved for the treatment of PTSD

• Nearly all guidelines recommend SSRIs or serotonin- norepinephrine reuptake inhibitors (SNRIs) at Grade A level of evidence – ISTSS Practice Guidelines 2009, “The best evidence supports the use of SSRIs and SNRIs as first-line drugs…” 1 – VA/DoD Guidelines 2010, “Strongly recommend SSRI or SNRI”2 • ISTSS for tricyclic antidepressants (TCAs) – level A • VA/DoD for TCAs – level B

1ISTSS Guidelines 2009; Foa, E. Pharmacotherapy for Adults; 2VA/DoD Clinical Practice Guideline for Management of Post- Guideline 6. Traumatic Stress. 2010 © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute Interpreting Guidelines: Questions and 33 challenges for military-related PTSD

Little supporting data for military-related PTSD treatments

• Reasons to doubt applicability of the results from non-VA/non-combat populations – Civilian PTSD is predominantly female, may be associated with less nightmares • SSRI and SNRI drugs have performed poorly in VA studies, yet remain first level recommended treatment – New drug studies are challenging because of drop-outs, concomitant meds and suicidal symptoms

Military-related PTSD is not well-served by FDA- approved therapies

• No clear treatment response observed in U.S. military population1

• Inconsistent treatment response observed in males2

• Important tolerability issues with SSRIs in this population3,4

1Friedman et al., J Clin Psychiatry 2007; 68:711, 2Zoloft Package Insert, August, 2014, 3Paxil Package Insert, June, 2014, 4Fava et al., Psychother Psychosom 84:72-81, 2015

I V PTSD in the Cyclobenzaprine and 21st century the potential efficacy of TNX-102 SL

II IV The neurobiology The current of PTSD treatment landscape

III Sleep and PTSD

Cyclobenzaprine Amitriptyline

CH3 CH3 Single Bond

• TCAs were developed before CNS receptors were identified or characterized – Today it’s understood that each TCA has a unique signature of receptor interactions and activities1 • CBP was considered ~2x more potent than AMI in a 6 month dose-escalating fibromyalgia study1

1Daugherty and Lederman, 2015 2Carrette S. 1994 Arth Rheum 37(1):32-40)

New paradigm: low dose CBP exposure during sleep

• Targeting sleep quality1,2 – Harness the effect of bedtime TNX-102 SL for a potential therapeutic effect in PTSD • Active sleep improvement dose confirmed in fibromyalgia – Oral CBP studied in dose escalating Phase 2a study in fibromyalgia3 and TNX-102 SL activity confirmed in Phase 2B study (BESTFIT)4 and a Phase 3 study (AFFIRM)5: consistent and durable activity improving sleep quality – Bedtime dosing time for TNX-102 SL – Effects seen in 10-14 days in fibromyalgia

1Iglehart IW. Methods for treating or preventing fibromyalgia using very low doses of cyclobenzaprine. 22003, US Patent 6,541,523, 3Moldofsky et al, J. Rheum. 2011; 4Tonix Pharmaceuticals data; 5Tonix Pharmaceuticals data © Copyright 2016 Tonix Pharmaceuticals - Confidential - Do not duplicate or distribute 38 TNX-102 SL is a sublingual tablet formulation optimized for long-term use at bedtime

COMPARE:

TNX-102 SL sublingual tablets TNX-102 capsules • Transmucosal absorption

GI absorption • 10× faster absorption than capsule formulation*

BENEFITS OF SUBLINGUAL FORMULATION: Bedtime administration • Fast onset aligns exposure with sleeping period • Designed to optimize ease-of-use and compliance

Daytime tolerability • Low dose sublingual tablets: 5.6 mg daily at bedtime (compared to 15 or 30 mg/day dosing for relief of muscle spasms) • Developed for long-term use

* Absorption lag time (tlag) based on clinical pharmacokinetic data.

S erotonin and Serotonin 5HT2A receptor

N orepinephrine α1 adrenergic receptor A ntagonist and

Serotonin Transporter (SERT) R euptake Norepinephrine Transporter (NET) I nhibitor Let’s take a closer look…

• TNX-102 SL binds to 5HT2a, α1, and H1 and is a functional antagonist at each receptor1

5-HT2A 5-HT2C H1 α1 adrenergic TNX-102 SL1

Sleep quality Sedative Treating Anxiolytic nightmares

1Daugherty B and Lederman S, unpublished

Military-related Posttraumatic Stress Disorder (PTSD) is a chronic debilitating disorder that has shown responsiveness to certain tricyclic antidepressants (TCAs): TNX-102 SL is a potent analogue of amitriptyline

Sleep quality is a new target for PTSD therapy: TNX-102 SL is designed for bedtime use. CBP is multifunctional agent that functions as an antagonist at:

– 5HT2A, α1 adrenergic, and H1 receptors

The pharmacodynamic profile and sublingual formulation of TNX-102 SL suggested that it may have therapeutic potential for military-related PTSD and related conditions