Idenix Pharmaceuticals: Building a Leading Antiviral Franchise

Jean-Pierre Sommadossi, Ph.D. Chairman and CEO January 2005

Updated: 12/12/04 Safe Harbor

This presentation includes forward-looking statements about Idenix and its business, including without limitation, statements regarding drug discovery, research and clinical development, regulatory approval processes and commercialization activities. These forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from our current expectations. These risks and uncertainties are detailed in our filings with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this presentation and, except as required by law, we undertake no obligation to update such statements.

2 2 Idenix – Building a Leading Antiviral Franchise

MissionMission Founded in 1998 to discover, develop and commercialize innovative antiviral drugs addressing unmet medical needs in large and growing markets ProductsProducts 3 clinical stage drugs

AllianceAlliance Novartis global alliance enhances commercial and financial position

GlobalGlobal 150 employees at 3 locations in U.S. StructureStructure and Europe

FinancialFinancial Strong balance sheet PositionPosition

3 3 Idenix Platform and Drug Discovery Capabilities A Research Engine Leading to Innovative Small Molecule Antivirals

Well-definedWell-defined targets:targets: The Hepatitis B Virus Replication Cycle viralviral polymerasespolymerases DrugDrug discoverydiscovery focusedfocused ononmodified modified Entry and Uncoating building blocks of viral building blocks of viral Maturation and DNADNA && RNARNA Release (nucleoside(nucleoside analogs)analogs)

MedicinalMedicinal chemistrychemistry (+) Strand DNA andand molecularmolecular telbivudine Synthesis virology/pharmacologyvirology/pharmacology forfor leadlead generationgeneration Viral andand optimizationoptimization polymerase (RT) (-) Strand DNA SpecificitySpecificity toto aa virusvirus Synthesis type type valtorcitabine

4 4 Idenix/Novartis Strategic Alliance Landmark Biotech/Pharma Deal

Co-promotion and profit split in U.S. and 5 major EU countries for all licensed products – Payments to Idenix based on product sales in ROW Novartis has licensed HBV drug programs and has first right of refusal to Idenix pipeline Novartis reimburses 100% of development costs for licensed products Novartis holds ~54% of Idenix (standstill until May 2008) with 2 of 9 board seats

5 5 Building a Leading Antiviral Franchise NDA Filing for Lead Drug Candidate Expected by Year End 2005

Indication Program Preclinical Phase Ib/IIa Phase IIb Phase III Telbivudine (LdT) HBV Valtorcitabine (val-LdC) Valopicitabine (NM283) HCV NV-08

HIV NV-05

90% of antiviral nucleosides with successful Phase I/II results have led to NDA approval 1

6 Source: 1 International Antiviral News Vol.7, No.7 and Vol.8 No.1 (01/00) 6 Telbivudine – To Treat Hepatitis B Potential Best-in-class Therapy

First-line therapy for chronic hepatitis B Oral administration, once daily Phase IIb results:

– Achieved >6 log10 (99.9999%) viral load reduction as early as week 24 and maintained for extended treatment periods Ongoing, fully-enrolled Phase III global clinical trial Favorable safety profile in over 900 treated patients U.S. patent protection through 2019

7 7 Telbivudine - Phase IIb Trial Results Rapid and profound reduction in viral load leads to clinical benefit

Telbivudine Lamivudine monotherapy monotherapy HBV DNA Reduction >6 log* 4.7 log

Seroconversion 31% 22% Patients HBV DNA 61%* 32% negative by PCR Patients with emergence <5%* 21% of resistance ALT normalization 86%* 63%

*p<0.05 52 Week Treatment

8 Source: Lai et al AASLD 10/03 8 Telbivudine Well-Positioned vs. Competition Telbivudine has demonstrated significant clinical benefit

Comparison derived from independent clinical trials Normalization of HBeAg Undetectable Serum ALT Seroconversion Virus (Liver Function)

1 Lamivudine 15-17% 34-48% 41-72% † (Zeffix®,1998)

2 Adefovir 12% 21-26% 48% † (Hepsera®,2002)

Pegasys3 32% 19%* 41% †

Entecavir4 21% 69%* 78% ††

Telbivudine5 31% 61%** 86% †

Sources: * Measured as HBV DNA less 1 Yuen et al, Antivir. Ther. 12/03; JID 1999, 180 :1761 than 400 copies/mL CID 2002;34:1275 **Measured as HBV DNA less Lai et al N. Engl. J. Med 1998;339:61-68 than 100 copies/mL Dienstag et al N. Engl. J. Med 1999; 341:1256-1263 † Measured as < 1.0xULN 2 FDA approved label †† 3 Lau et al AASLD 11/04, Marcellin et al NEJM 2004 Measured as <1.25 x ULN 4 Chang et al AASLD 11/04 5 Lai et al AASLD 10/03 9 9 Telbivudine – Phase III GLOBE Study Largest Pivotal Hepatitis B Clinical Trial

One-year results will be used for STUDYSTUDY DESIGN DESIGN worldwide marketing applications 22 yearyear headhead toto headhead trialtrial vs.vs. lamivudinelamivudine Phase III trial status – Ongoing; expected US NDA filing by 12001200 treatment-naïvetreatment-naïve year end 2005 patientspatients inin 2020 – Fully enrolled with more than 1370 countriescountries patients PrimaryPrimary endpoint:endpoint: – No pattern of patient discontinuations SerumSerum HBVHBV DNADNA due to serious adverse events; <4% <5<5 loglog1010 coupledcoupled withwith discontinued ALTALT normalizationnormalization oror lossloss ofof detectabledetectable > 90% powered for statistical hepatitishepatitis BB “e”“e” antigen antigen significance on primary endpoint

10 10 Valtorcitabine – To Treat Hepatitis B Combination Therapy to Expand Market

Fixed dose combination therapy with telbivudine for difficult-to-treat chronic hepatitis B patients Oral, once daily administration Successful U.S. IND Phase I/II

– Monotherapy data indicate more than 3 log10 (99.9%) viral load reduction by week 4 with optimal dosing Well-tolerated with no pattern of drug-related adverse events – over 40 patients to date Phase IIb combination program (telbivudine + valtorcitabine) underway U.S. patent (notice of allowance) protection through 2021

11 11 Chronic Hepatitis B Market Dynamics Novel Antivirals Drive Increased Diagnosis and Treatment Rates

Patients Diagnosed Increases by ~10%

Represents a Represents a Represents $600M WW $1B WW a $1.7B WW market market market

9% 11% 14%

91% 89% 86%

2003 2006 2009

Patients Diagnosed and Treated Drivers of Market Growth Drivers of Market Growth Patients Diagnosed but Not Treated 44 ProductProduct launcheslaunches ––Adefovir Adefovir (Asia)(Asia) ––Entecavir Entecavir && PegasysPegasys (Global) (Global) ––Telbivudine Telbivudine (Global)(Global) CombinationCombination therapytherapy ContinuedContinued premiumpremium pricingpricing CompetitionCompetition drivesdrives increasedincreased promotionpromotion

12 Sources: Idenix Internal Global Forecast Estimates, IMS, Decision Resources 12 HBV Market Research Telbivudine Profile Satisfies Unmet Needs in Market

Prescribers are unsatisfied with current hepatitis B treatment options Prescribers and patients identified three key attributes as the most important for differentiating a new therapy – Potent viral load suppression – Histological improvement – Higher HBeAg seroconversion rates Prescribers are attracted to telbivudine's ability to achieve better results than current therapies – “I’m more enthusiastic about telbivudine because it’s more rapid and profound, early in treatment. More (HBeAg) seroconversion. Higher rate of PCR negativity. … It’s always better if you have a problem to solve it as soon as possible.”

13 Source: Idenix Market Research 13 Novartis Has Licensed HBV Programs 100% of Development Costs Reimbursed by Novartis

LicensedLicensed hepatitishepatitis BB programsprograms (telbivudine(telbivudine andand valtorcitabine)valtorcitabine) inin MayMay 20032003 UpfrontUpfront licensinglicensing paymentpayment ofof $75$75 millionmillion UpUp toto $35$35 millionmillion inin regulatoryregulatory milestonesmilestones SalesSales milestonesmilestones Co-promotionCo-promotion andand profitprofit splitsplit inin U.S.U.S. andand 55 majormajor EUEU countriescountries forfor allall licensedlicensed productsproducts ––Payments Payments toto IdenixIdenix basedbased onon productproduct salessales inin ROWROW

14 14 Building a Leading Antiviral Franchise Most Advanced Antiviral in Development for Hepatitis C Treatment

Indication Program Preclinical Phase Ib/IIa Phase IIb Phase III Telbivudine (LdT) HBV Valtorcitabine (val-LdC) Valopicitabine (NM283) HCV NV-08

HIV NV-05

90% of antiviral nucleosides with successful Phase I/II results have led to NDA approval 1

15 Source: 1International Antiviral News Vol.7, No.7 and Vol.8 No.1 (01/00) 15 Chronic HCV Market – Large and Underserved $3 Billion Market in 2003 Projected to Grow to $5.1 Billion in 20071

2.9 M2 2.7 M1 people people

1.5 M2 people

U.S. EU Japan

U.S. Top 5 EU Japan Treatment Avg.Cost Est. 2003 Avg. Cost Est. 2003 Avg. Cost Est. 2003 per patient2 Sales3 per patient2 Sales3 per patient2 Sales3 Pegylated- $ 13,200 $980 M $10,360 $460 M $10,490 $250 M interferon Ribavirin $ 10,000 $800 M $7,275 $310 M $11,130 $70 M

1 2 3 16 Sources: Decision Resources 05/03; CDC N Hanes III; WHO; 16 HCV Market Dynamics No Direct Antivirals on the Market

TreatmentTreatment FailureFailure PatientsPatients TreatmentTreatment NaïveNaïve PatientsPatients 400,000400,000 patientspatients inin U.S.U.S. 170170 millionmillion patientspatients WWWW havehave failedfailed thethe currentcurrent areare infectedinfected withwith HCVHCV standardstandard ofof carecare ––60-70% 60-70% inin majormajor marketsmarkets ––10% 10% ofof thesethese respond respond toto areare HCVHCV typetype 1,1, respondingresponding retreatmentretreatment poorlypoorly toto treatmenttreatment ––Valopicitabine Valopicitabine (NM283)(NM283) ––ValopicitabineValopicitabine (NM283)(NM283) plusplus pegylatedpegylated interferoninterferon inin plusplus pegylatedpegylated interferoninterferon inin phasephase IIbIIb phasephase IIaIIa

17 Source: Company research; Strader et al. Hepatology 04/04; WHO 17 Hepatitis C Competitive Landscape NM283 is Most Advanced Specifically Targeting HCV Replication

Brand Name Target/Type Company U.S. Status

Valopicitabine (NM283) Nucleoside analog Idenix Phase IIb BILN-2061 Protease inhibitor Boehringer Ingelheim Phase II (hold) ISIS 14803 Antisense Isis Pharmaceuticals Phase II MBI-3253 Glucosidase inhibitor Migenix Phase II JTK-003 Non-nucleoside Japan Tobacco/Akros Phase I / II Isatoribine (ANA245) TLR7/Nucleoside analog Anadys Phase Ib HCV-086 Non-nucleoside Wyeth/Viropharma Phase Ib

VX-950 Protease inhibitor Vertex Phase Ib

SCH Protease inhibitor Schering-Plough Phase I R803 (prodrug Non-nucleoside Rigel Phase I development)

18 Source: Company Research 18 Valopicitabine (NM283) – To Treat Hepatitis C Potential First-to-market Direct HCV Antiviral Drug

Development of a more effective treatment than ribavirin, in combination with pegylated interferon Oral, once-daily administration Successful phase I clinical trial in 95 HCV type 1 patients (87% prior treatment failures) with a mean HCV RNA

reduction of 1.2 log10 at 800 mg/day with 2 weeks of treatment U.S. patent (notice of allowance) protection through 2021

19 19 Valopicitabine (NM283) – Clinical Development

TreatmentTreatment FailureFailure PatientsPatients TreatmentTreatment NaïveNaïve PatientsPatients PhasePhase IIbIIb trialtrial PhasePhase IIaIIa trialtrial ––170+ 170+ non-respondersnon-responders ––4 4 weekweek drug-drugdrug-drug ––HCV HCV genotypegenotype 11 interactioninteraction trialtrial ––6-month 6-month trialtrial withwith analysisanalysis ofof ––Trial Trial extendedextended fromfrom 33 toto 66 datadata atat 1212 andand 2424 weeksweeks monthsmonths ––3 3 treatmenttreatment regimensregimens ••NM283 NM283 alonealone PhasePhase IIbIIb trialtrial plannedplanned forfor ••NM283 NM283 plusplus pegylated-interferonpegylated-interferon 20052005 ••pegylated-interferon pegylated-interferon plusplus ribavirinribavirin

Phase III Development Program Contemplates First NDA in Treatment Failure Patients

20 20 Valopicitabine (NM283) Phase IIa Trial 12-week Interim Data – HCV RNA Responses by Treatment

Weekly Peg-IFN dosing commenced on Day 8 (then Day 15, 22 etc.)

StudyStudy DesignDesign 3030 HCVHCV TypeType 11 NM283 patients;patients; DataData onon 0 (n=7) 1919 patientspatients outout -0.9 log10 toto WeekWeek 1212 -0.5 IU/mL TreatmentTreatment naïvenaïve -1 RandomizedRandomized 2:32:3 to NM 283 to NM 283 -1.5 monotherapymonotherapy or or

NMNM 283283 inin from Baseline Change -2 combinationcombination withwith 10 pegylatedpegylated NM283 + interferoninterferon -2.5 Peg-IFNα (n=12) Endpoints: Endpoints: Log Mean -3 -3.2 log antiviralantiviral activity,activity, 10 400→600→800 mg NM283 QD IU/mL safety,safety, PKPK -3.5 1258911 15 1822 29 43 57 71 85 Study Day

21 21 Valopicitabine (NM283) Phase IIa Trial 12-week Data: Individual Patient HCV RNA Responses for NM283+Peg-IFNα

0 -0.11

-1

-1.7, -1.7 -2 -2.0 -2.4 -3 -3.4, -3.3 -3.6, -3.6 -4 EVR

Change from Baseline Change -4.7

10 -5 -5.2 Log

-6 -6.2 400→ 600→800 mg NM283 QD -7 1 2589 11 15 1822 29 43 57 71 85 Study Day Weekly Peg-IFN dosing commenced on Day 8 (then Day 15, 22 etc.) 22 22 Novartis Licensing Option Terms – Valopicitabine (NM283) Option to License Prior to Initiation of Phase III

$25$25 millionmillion milestonemilestone receivedreceived JuneJune 20042004 UponUpon licensing,licensing, NovartisNovartis willwill reimbursereimburse 100%100% ofof developmentdevelopment costscosts UpUp toto $525$525 millionmillion inin licenselicense feesfees andand regulatoryregulatory milestonemilestone paymentspayments SalesSales milestonesmilestones

23 23 Management Team Focused on Execution

20+ years experience in HIV and hepatitis drug discovery Jean-Pierre Sommadossi, Ph.D. and development (Videx®, Zerit®, Epivir®, Lamivudine, Chairman and Chief Executive Officer Emtriva®, Agenerase®)

David Arkowitz 13+ years experience with Merck & Co, VP & Controller, Chief Financial Officer Merck U.S. Human Health 25+ years clinical infectious disease experience with >12 years in antiviral drug development at Glaxo Wellcome; Nathaniel Brown, M.D. responsible for worldwide development and registration of 6 EVP, Clinical Development & CMO antivirals for HIV, HBV and HCV including lamivudine and Wellferon

Andrea Corcoran Extensive experience in corporate law and securities; CPA, EVP, Legal & Administration JD; formerly with Kelley, Drye & Warren LLP

20+ years experience with > 15 major pharmaceutical James Egan product-based agreements (Abbott, Searle) with an SVP, Business & Corp. Development aggregate commercial value of over $2 billion Guy Macdonald 20+ years experience with Merck & Co., most recently as EVP, Operations VP, Anti-Infectives; Launched 5 major anti-infectives

24 24 Cash Flow – Summary ($ in millions)

12/31/03 Cash Balance $43.5 1Q04 Cash Flow ($9.2) 2Q04 Cash Flow $14.3 Milestone $25.0 All Other ($10.7) 6/30/04 Cash Balance $48.6 3Q04 Cash Flow $125.6 Net Proceeds from Offering $135.5 All Other ($9.9) 9/30/04 Cash Balance, incl. marketable sec. $174.2

Strong Cash Position

25 25 Achieved All 2004 Milestones

; Completed phase III enrollment for telbivudine ; Received NM283 $25 million milestone ; Initiated phase IIb for NM283 ; Filed U.S. IND for NM283 (IV formulation) ; Initiated phase IIb combination study for valtorcitabine and telbivudine

26 26 2005 – Expected to be an Event-driven Year

Telbivudine 2-year phase IIb data – Spring Phase III data – Fall NDA filing – by year-end Valopicitabine (NM283) Complete phase IIa in treatment naïve population – 12-week data on all patients in Spring – Complete data (24 weeks) in Fall Complete phase IIb in treatment-failure population – 12-week data in Fall Pre-clinical Advance HCV and HIV drug candidates to IND

27 27 Investment Highlights Commercializing Best-in-Class Antiviral Therapeutics

Late-stage pipeline – One program in phase III, two in phase IIb Large and growing markets with major unmet medical needs Novartis strategic alliance Sustainable pipeline fueled by organic growth producing innovative small molecule antivirals 2005 expected to be an event-driven year

28 28 Idenix Pharmaceuticals: Building a Leading Antiviral Franchise

Investor Contact: Amy Sullivan Executive Director, Corp. Comm. 617-995-9838 [email protected] www.idenix.com