Initiating Coverage February 27, 2017

OSE Immunotherapeutics (OSE.PA) Initiation Report

LifeSci Investment Abstract

OSE Immunotherapeutics (EPA: OSE.PA) is a biotechnology company focused on the Analysts development of therapies directed toward modulating immune cell function to treat advanced Jerry Isaacson, Ph.D. (AC) cancer and autoimmune diseases. OSE Immunotherapeutics’ lead clinical asset, Tedopi, is (646) 597-6991 a neo-epitope based immunotherapy developed for the treatment of patients with HLA- [email protected] A2+ non-small cell lung cancer (NSCLC). Tedopi is currently being evaluated in a Phase III trial that is expected to report topline data in late 2018. OSE is also planning to initiate a Phase II trial to evaluate this asset in combination with checkpoint inhibitors. In Market Data addition to Tedopi, the Company is developing Effi-DEM, a new immune checkpoint inhibitor. Price $6.87 Finally, OSE Immunotherapeutics is developing FR-104 and Effi-7, both for the treatment Market Cap (M) $98 of autoimmune disease. These assets are partnered with established biopharmaceutical EV (M) $75 companies for their clinical development and commercialization, offering validation for OSE Shares Outstanding (M) 14.3 Immunotherapeutics’ discovery platform. Fully Diluted Shares (M) 15.0 Key Points of Discussion Avg Daily Vol 16,260 52-week Range: $5.30 - $8.59 Cash (M) $25.4 ■ Tedopi is a Neoantigen-based Immunotherapy Targeting Tumor Cells in HLA- A2+ NSCLC. OSE Immunotherapeutics’ lead clinical immune oncology asset is Tedopi, a Net Cash/Share $1.62 neoantigen-based immunotherapy in development for the treatment of HLA-A2+ NSCLC. Annualized Cash Burn (M) $7.0 OSE Immunotherapeutics has initiated a Phase III clinical trial to evaluate Tedopi in patients Years of Cash Left 3.6 with advanced, HLA-A2+ NSCLC who have progressed on platinum based chemotherapy Debt (M) $2.3 or second-line immune checkpoint inhibitors. The trial is expected to enroll 500 patients, Financials and the primary endpoint is overall survival after 24 months of therapy. Topline results are expected in late 2018. FY Dec 2014A 2015A 2016A EPS H1 NA (0.32)A 2.28A ■ Potential Synergies for the Combination of Tedopi and Immune Checkpoint H2 NA NA NA Inhibitors. Although peptide based immunotherapies have potential in multiple cancer FY (0.36)A (0.59)A NA indications, induction of immunosuppressive factors such as CTLA-4 and PD-1 often hamper their effects. Recent studies using anti-CTLA-4, anti-PD-1, and anti-PD-L1 immune checkpoint inhibitors have shown durable clinical responses in a wide range of cancers. As result, these therapies have garnered a great deal of excitement in the medical community and have prompted many combination trials. Tedopi’s safety profile and potential

Expected Upcoming Milestones

■ H1 2017 - DSMB meeting for pivotal Phase III trial for Tedopi in HLA-A2+ NSCLC ■ H1 2017 - Publications regarding Effi-7 and Effi-DEM ■ H1 2017 - Initiation of Phase II trial of Tedopi in combination with immune checkpoint inhibitors in HLA-A2+ NSCLC ■ 2017 - Evaluation of Tedopi in other cancer indications ■ H2 2018 - Phase I clinical trial evaluating Effi-7 ■ 2018 - Phase I clinical trial evaluating Effi-DEM ■ H2 2018 - Topline results of Atalante-1 pivotal Phase III trial for Tedopi in HLA-A2+ NSCLC

Page 1 For analyst certification and disclosures please see page 47 February 27, 2017

for secondary immunosuppressive effects make it an ideal candidate to combine with immune checkpoint inhibitors. With that in mind, OSE Immunotherapeutics is planning to initiate a Phase II clinical trial to explore the combination of Tedopi and anti-PD1/ PD-L1 therapy in HLA-A2+ NSCLC. Enrollment of the first patient is expected during the first half of 2017.

▪ Promising Phase II Results for Tedopi in HLA-A2+ NSCLC. OSE Immunotherapeutics completed a Phase II open-label, single-arm clinical trial to evaluate the clinical efficacy, safety, and immune response of Tedopi in 63 patients with histologically confirmed stage IIIb or IV, HLA-A2+ NSCLC. Subjects were treated with 13 doses of Tedopi over two years, administered subcutaneously every 3 weeks over 15 weeks, then every two months through first year, and every quarter for the second year. Overall survival after 24 months was the primary endpoint of the study and progression free survival, and objective response rate, were among the secondary endpoints. Results from the study found that median survival was 17.3 months in treated patients, with 60% of all patients surviving at least one year. Of note, patients who mounted an immune response to 4-5 epitopes, experienced a trend towards increased survival, which was statistically significant compared to patients reacting to 0-1 epitopes (p<0.001). Immune response in patient PBMCs were measured using interferon gamma expression.

▪ Pivotal Phase III Trial for Tedopi in HLA-A2+ NSCLC. OSE Immunotherapeutics has an ongoing, 500 patient, randomized, open-label Phase III clinical trial to evaluate efficacy of Tedopi. This trial is enrolling HLA-A2+ NSCLC patients without EGFR or ALK alterations who have progressed on platinum based chemotherapy or second-line immune checkpoint inhibitors. The primary endpoint for trial is overall survival and secondary endpoints include progression-free survival, quality of life, overall response rate, and tolerability. The trial is currently enrolling patients and topline data are expected at the end of 2018.

▪ Market Opportunity for Tedopi in NSCLC. Epidemiological studies suggest that approximately 224,000 new cases of lung cancer were diagnosed in 2016, and roughly 85 % of these cases were NSCLCs. With Tedopi, OSE Immunotherapeutics hopes to target the HLA-A2+ fraction of patients, which makes up about 45% of all NSCLCs. Recent estimates suggest that the global NSCLC market is approximately $5.5 billion, and could increase to $7 billion by 2020. Until the recent approval of checkpoint inhibitors, NSCLC was mostly managed with chemotherapy and EGFR-targeted small molecules. Bristol-Meyers Squibb’s (NYSE: BMY) nivolumab (Opdivo) and Merck’s (NYSE: MRK) pembrolizumab (Keytruda), both PD-1 checkpoint inhibitors, were recently approved for some NSCLC patients and combined sales for these drugs totaled approximately $5.2 billion in 2016. Because immunotherapies are likely to be combined with existing treatment regimens, there is significant market potential for these programs.

▪ Partnership with Janssen Validates OSE Immunotherapeutics’ Approach to Treating Autoimmune Diseases. OSE Immunotherapeutics has established partnerships with major biotech and pharmaceuticals companies for the development and commercialization of two early stage assets, FR104 and Effi-7. FR104 is the fragment antigen-binding (Fab) region of an antibody which binds to the cell surface receptor CD28, and acts as a pure antagonist of the receptor. In July of 2016, Janssen exercised its option, based on previous agreement with OSE Immunotherapeutics, for the development and commercialization of FR104 for the treatment of autoimmune diseases. As a result of the agreement, OSE Immunotherapeutics received $11 million and has the potential to receive up to $172 million in regulatory and commercial milestones. A completed Phase I study found that FR104 has a good safety profile without serious adverse events. A Phase II study designed to evaluate the efficacy of FR104 is currently being planned.

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▪ Agreement with Servier Supports OSE Immunotherapeutics Pipeline Development for Autoimmune Disease Indications. OSE’s second partnered asset is Effi-7, a humanized monoclonal antibody that targets interleukin-7 receptor-alpha. Various reports linking autoimmune diseases to abnormal interleukin-7 function and/or signaling have emerged, suggesting IL-7 pathway antagonist would be beneficial. In fact, OSE Immunotherapeutics has promising preclinical data showing the efficacy of Effi-7 in a model of ulcerative colitis. In December 2016, OSE Immunotherapeutics established a partnership with Servier (private) for the development and commercialization of Effi-7. The deal included an upfront payment $10.8 million and $31.6 million in two separate milestone payments, the last one upon completion of a Phase II clinical trial in ulcerative colitis. The structured agreement has the potential of bringing in $284.3 million in regulatory and sales milestones for the Company. OSE Immunotherapeutics plans to initiate a Phase I trial to evaluate Effi-7 in ulcerative colitis in the second half of 2018.

▪ Effi-DEM, a New Immune Checkpoint Inhibitor. Immune suppression of the tumor microenvironment is one on the ways cancers evade immune surveillance. At the moment, there are no targeted therapies directed toward downregulation of myeloid derived suppressor cells (MDSC) or tumor associated macrophages. Identification of therapies to attenuate these immunosuppressive cells could ultimately improve efficacy in combination with established treatments, including other immunotherapies. OSE Immunotherapeutics is developing, Effi-DEM, a first in class monoclonal antibody that targets signal regulatory peptide alpha (SIRP-), which is expressed in myeloid and macrophage suppressor cells and is part of the SIRP-/CD47 pathway. The Company has presented promising preclinical data in an orthotopic mammary tumor model and in a PD-L1/Effi-DEM combination study in a mouse model of hepatocellular carcinoma. The positive findings argue for its clinical evaluation as a monotherapy and in combination with checkpoint inhibitors.

Financial Discussion

On September 8, 2016, OSE Immunotherapeutics reported half-year financial results for the period ending June 30, 2016. The Company reported operating income of €22.3 million, which was largely driven by an executed license option by Janssen for FR104. This was in comparison to a €2.8 million loss in the first half of 2015. Operating expenses amounted to €3.3 million, including €2 million in research and development compared to €2.8 million in during the same period in 2015. OSE Immunotherapeutics reported a net gain of €24.5 million for the first half of 2016 compared to a loss of €2.9 million during the same period in 2015. OSE Immunotherapeutics reported €15 million in available cash, not including a provision for reimbursement of some research development expenses from the French government.

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Table of Contents

Financial Discussion ...... 3 Company Description ...... 5 Tedopi: A Specific T-Cell Activation Immunotherapy for Oncology...... 6 Pre-Clinical Data for Tedopi ...... 7 Non-Small Cell Lung Cancer (NSCLC) ...... 9 Pathogenesis...... 10 Immune Markers of NSCLC...... 10 Symptoms, Diagnosis, and Treatment Options...... 12 Market Information for Non-Small Cell Lung Carcinoma ...... 13 Epidemiology...... 13 NSCLC Market Estimates...... 13 Clinical Data Discussion- Tedopi ...... 14 Phase II Trial – Safety and overall survival in chemotherapy refractory NSLC...... 14 Phase III Trial- Atalante-1...... 15 Phase II Combination Study ...... 16 Competitive Landscape and Other Drugs in Development ...... 17 FR104: An Inhibitor of CD28 ...... 18 Mechanism of Action for FR104 ...... 18 Preclinical Data ...... 20 Safety Profile ...... 26 Target Indications for FR104 – GvHD and Rheumatoid Arthritis ...... 27 Graft versus Host Disease ...... 27 Symptoms, Diagnosis and Staging of GvHD ...... 28 Treatment for GvHD ...... 29 Rheumatoid Arthritis ...... 31 Rheumatoid Arthritis Market Information ...... 33 Clinical Discussion ...... 34 Safety Profile ...... 36 Other Drugs in Development ...... 36 Trial Design...... 37 Effi-7: A Potential Role for an IL-7 Antagonist in the Treatment of Autoimmune Diseases ...... 39 Effi-7 Demonstrated Efficacy in Preclinical Model of Ulcerative Colitis...... 39 Effi-DEM: A Next-Generation Checkpoint Inhibitor ...... 39 Preclinical Data ...... 41 Intellectual Property ...... 42 Memopi and Tedopi ...... 42 FR104 ...... 43 Management Team ...... 44 Risk to an Investment ...... 46 Analyst Certification ...... 47 Disclosures ...... 47

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Company Description

OSE Immunotherapeutics is a clinical stage biotechnology company focused on the development of therapies aiming to either inhibit or activate immune cell function to treat advanced cancer and autoimmune diseases. The Company’s full pipeline is shown in Figure 1. OSE Immunotherapeutics has 4 development programs, and the lead program Tedopi is being studied for the treatment of patients with advanced non-small cell lung cancer (NSCLC). The Company also has 2 assets in development for the treatment of autoimmune diseases that have been partnered with established pharmaceutical companies. Their lead asset Tedopi, is a neo-epitope immunotherapy in development for the treatment of patients with HLA-A2+ NSCLC. Another trial is being planned to test the drug in combination with immune checkpoint inhibitors for advanced NSCLC. A pivotal Phase III clinical trial is currently underway in HLA-A2+ NSCLC patients to evaluate efficacy of Tedopi versus chemotherapy in the second line setting.

Figure 1. OSE Immunotherapeutics Developmental Pipeline

Source: LifeSci Capital

OSE Immunotherapeutics was formed in 2016 through the merger of OSE Pharma and Effimune, companies focused on developing therapies in immune-oncology and immune regulation. Prior to the merger, OSE Pharma’s main focus was the development of therapies designed to remove malignant cancer cells by re-educating the body’s cytotoxic T cells. Effimume emerged from the Institute of Transplantation of Nantes and focused on the discovery and development of therapeutic molecules and antibodies for the treatment of auto-immune diseases. Effimume’s lead asset, FR-104, is a pegylated monovalent antibody directed toward CD28 that was recently licensed to Janssen, who is now responsible for clinical development, registration and commercialization.

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The Company is currently developing two preclinical assets, one to treat autoimmune disease and another that is a new immune checkpoint inhibitor for oncology. Effi-7 is a humanized antibody directed against the alpha chain of the interleukin-7 receptor (IL-7R) for the treatment of autoimmune disease, which was recently partnered with Servier (private) for development and commercialization. Effi-DEM is a monoclonal antibody directed against signal regulatory peptide alpha (SIRP-), which is expressed on myeloid and macrophage suppressor cells. Effi-DEM is being developed as novel immune checkpoint inhibitor intended to prevent immunosuppressive activities of myeloid suppressive cells.

Tedopi: A Specific T-Cell Activation Immunotherapy for Oncology

OSE Immunotherapeutics develops therapies intended to harness the body’s immune system to activate a subset of immune cells to attack and eliminate cancer cells. Tedopi, OSE’s lead clinical asset, is a subcutaneously delivered mixture of 9 chemically optimized neo-epitopes and 1 epitope directed toward stimulating T helper lymphocytes. The patented combination of 10 epitopes was selected and optimized using a proprietary technology called Memopi, a stringent epitope screening platform that identified neo-epitopes with high affinity to HLA-A2 and T-cell receptor (TCR), depicted in Figure 2. Some of the epitopes identified are from tumor antigens expressed in 90% of cancers, including HER2/neu, carcinoembryonic antigen (CEA), MAG-2,-3, as well as TP-53, a commonly mutated tumor suppressor.

Figure 2. Neo-Epitopes with High Affinity to HLA-A2 and TCR)

Source: Company Presentation

One of the hallmarks of cancer cells is their ability to elude immune surveillance by T-cells, resulting in increased proliferation and invasion. In certain cancers, deregulation of cell physiology is achieved by an increased mutational load, which often correlates with high expression of tumor antigens. These highly mutated cancers may ultimately be exploited by the engineering a cytotoxic immune response to specific epitopes expressed by cancer cells and in this way curb malignant proliferation. Once in a patient, the cancer associated antigens in Tedopi are presented by HLA- A2, an MHC-I class protein, so that they can then be expressed on antigen presenting cells such as dendritic cells. As shown in Figure 3, recognition of the epitope is mediated by the T cell receptor expressed on CD8+ T cells leading to its activation, replication, and cytotoxic activity against cancer cells, which leads to a reduction in tumor size.

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Figure 3. Mechanism of Action for Tedopi

Source: Company Presentation

Pre-Clinical Data for Tedopi

Recent advances in cancer therapeutics have resulted from leveraging the patient’s own immune system to attack the disease.1 One strategy to eliminate cancer cells is to generate an immune response directed against specific cancer associated antigens that is carried out by effector cytotoxic lymphocytes (CTL). Preclinical characterization of Tedopi, formally EP-2101, was performed in HLA-A*2101/kb transgenic mice. In order to assess whether the neo-epitope therapy was immunogenic and induced a CTL response, HLA-A*2101/kb mice were immunized with either 50 ug the individual epitope and PADRE epitope, an epitope stimulating T helper cells (black bars), or 50 ug of Tedopi (hatched bars). Cytotoxic lymphocyte (CTL) response was measured by interferon- (IFN-) secretion as detected by ELISA and as a control, naïve splenocytes were stimulated in vitro with each individual epitope (grey bars) and subjected to the same assay Figure 4.

As shown in Figure 4, the majority of the peptides (black bars) that make up Tedopi induced an immunogenic response that was comparable to Tedopi activity (hatched bars), as judged by IFN- secretion. In particular, CEA, HER2, and MAG2-3 epitopes (outlined along the x-axis), in combination with PADRE (black bars), induced similar levels of IFN- release when compared to Tedopi with PADRE, depicted with hatched bars, validating the immunogenicity of Tedopi in vivo. These data also suggest a lack of epitope dominance, since the response to the mixture of epitopes was comparable to that of each epitope.

1 Hirayama, M. 2016. The present status and future prospects of peptide-based vaccines. International Immunology. 28(7), pp 319- 328.

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Figure 4. In Vivo Immunogenicity of Tedopi

Beebe, M. et al. 2008

CD8+ cells are cytotoxic T cells involved in targeting and eliminating cells expressing cancer associated antigens, and also secrete IFN-. In addition to CD8+ cells, IFN- is secreted by other immune cells including, natural killer cells, and CD4 Th1 cells. To confirm that the observed responses were CD8+ specific, splenocytes from Tedopi- primed mice were measured using ELISPOT assay, which allows visualization of secretory products from individually active or responding cells. Splenocytes from Tedopi-primed mice showed strong responses for CEA, HER2/neu.689, MAG3, MAG2 epitopes, and relatively weak responses for p53 epitopes, as measured by IFN-. These data are illustrated in Figure 5. The researchers then measured CD4+ responses to PADRE using ELISPOT in Tedopi-immunized mice to evaluate the capacity of Tedopi to induce a CD4+ response. CD4+ purified cells from Tedopi immunized mice showed IFN- levels that were comparable to the PADRE epitope on its own, and in other adjuvant formulations2. As a whole, these data validate Tedopi as a multi-epitope immunotherapy and suggest that the PADRE epitope may help augment and support the maintenance of the cytotoxic lymphocyte response in vivo.

2 Beebe, M. 2008. Formulation and characterization of a ten-peptide single-vial vaccine, EP-2101, designed to induce cytotoxic T-lymphocyte responses for cancer immunotherapy. Human Vaccines. 4(3), pp210-218.

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Figure 5. Tedopi Induces CD8+ Response

Beebe, M. et al. 2008

Safety profile for Tedopi. Tedopi was previously studied in two completed clinical trials where it showed a positive safety profile and immunological data supporting further clinical development. In a Phase II clinical trial testing Tedopi’s ability to induce an immune response and early signs of clinical efficacy, the drug induced one grade 3 fever and grade 1 to 2 adverse events including, injection site erythema (21%), fatigue (16%), injection site pain (14%), and fever (16%).

Non-Small Cell Lung Cancer (NSCLC)

Non-small cell lung cancer is a disease in which malignant cells form in the tissues of the lung. There are several types of NSCLC including squamous cell carcinoma, large cell carcinoma, adenocarcinoma, and other less common types. Approximately 85% of lung cancer patients have NSCLC, 3 and of these 45% of are HLA-2A+, which is the patient population that OSE Immunotherapeutics is targeting with Tedopi. Compared to small-cell lung carcinoma, NSCLC tends to grow more slowly meaning that early detection and curative surgical resection has a higher probability of success. According to the National Cancer Institute, the 5-year survival rates for localized, regional and distant NSCLC tumors are 53.5%, 26.1% and 3.9%, respectively. NSCLC is predominately caused by tobacco smoke. However, approximately 20% of cases are not associated with smoking. Other risk factors include radon and asbestos exposure, exposure to certain chemicals, air pollution, radiation treatment of the lungs, arsenic in drinking water, and genetic predisposition.

3 Herbst, R.S. et al., 2008. Lung Cancer. The New England Journal of Medicine, 359, pp1367-1380.

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Pathogenesis. Like all cancers, mutations in a variety of genes are the predominant cause of disease. In NSCLC, the p53 gene is inactivated in nearly 50% of patients. Epidermal growth factor receptor (EGFR) has been shown to play a significant role in NSCLC and activation of the PIK3 catalytic alpha gene was found in almost half of squamous cell carcinoma cases.4 Figure 6 shows the percentage distribution of some of the different cancer-driving mutations that have been identified in patients with lung cancer, including those with NSCLC.

Figure 6. Molecular Subsets of Adenocarcinoma

Source: Nature Medicine, 20125

Immune Markers of NSCLC. NSCLC tumors express a range of tumor-specific antigens that could be recognized by the immune system under the right conditions. These markers are useful both for the development of diagnostic criteria to gauge tumor progression and the development of immunotherapies. The anti-tumor activity of the immune system is largely mediated by cell-based immunity; therefore antigens that trigger efficient T-cell activation are believed to be essential for the development of therapeutics.6 The NSCLC-specific antigens that activate killer CD8+ or helper CD4+ T-cells are presented in Figure 7 and fall into several different categories including cancer- testis antigens, oncofetal and lineage-restricted differentiation antigens, viral antigens, broadly expressed or overexpressed normal antigens, and finally antigens that are unique to the individual tumor.7

4 Kitamura, H. et al., 2008. Molecular and genetic pathogenesis of lung cancer: differences between small-cell and non-small- cell Carcinomas. The Open Pathology Journal, 2, pp106-14. 5 Pao, W. & Hutchenson, K.E., 2012. Chipping away at the lung cancer genome. Nature Medicine, 18, pp349-351. 6 Klebanoff, C.A. et al., 2006. CD8+ T-cell memory in tumor immunology and immunotherapy. Immunological Reviews, 211, pp214-224. 7 Kakimi, K. et al., 2009. Active specific immunotherapy and cell-transfer therapy for the treatment of non-small cell lung cancer. Lung Cancer, 65, pp1-8.

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Unique antigens created by a mutation in the tumor or common mutations shared by tumors but not normal tissues would be advantageous in the development of neo-epitope therapies. For example, mutations in tp53, which codes for a tumor suppressing gene and is mutated in 50% cancers and CAE, overexpressed in 70% of NSCLC, are valuable potential targets for immunotherapy. Figure 7 shows a list of tumor antigens listed by the gene name, cross reactivity, and localization with in the cell.

Figure 7. NSCLC Antigens Recognized by T-Cells

Gene Name Cross Reactivity Localization

BAGE B melanoma antigen Testis Cytoplasmic

Embryonic gastro- CEA Carcinoembryonic antigen Membrane intestinal

Cyp-B Cyclophilin B Ubiquitous Cytoplasmic

GAGE G melanoma antigen Testis, placenta Cytoplasmic, nucleus

Human epidermal HER2 Epithelial Membrane receptor 2 Human telomerase reverse hTERT Hematopoietic stem cells Nucleus transcriptase MAGE-A1, Melanoma-associated Testis, placenta Membrane -A2, -A3, -A6 antigen

MUC1 Mucin 1 None Membrane, secreted

MUC2 Mucin 2 Gastro-intestinal Secreted

NY-ESO-1 New York esophagus 1 Testis Cytoplasmic

Preferentially expressed Membrane, PRAME Testis, ovary, brain, skin antigen of melanoma cytoplasmic

RU1 Renal ubiquitous 1 Testis, kidney, heart, skin Unknown

Squamous antigen SART-2 None Membrane rejecting tumor 1 Kidney, ovary, testis, WT1 Wilms’ tumor 1 Nucleus spleen

Source: Renkvist, N. et al.8

8 Renkvist, N. et al., 2001. A listing of human tumor antigens recognized by T cells. Cancer Immunology, Immunotherapy: CII, 50(3), pp3-15.

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OSE Immunotherapeutics has developed a neo-epitope therapy using 10 epitope combo, including CEA, HER2/neu, MAGE, p53 and a one CD4+ specific epitope to further stimulate immune surveillance and target NSCLC cells in HLA-A2 positive patients.

Symptoms, Diagnosis, and Treatment Options. Early stage NSCLC does not initially cause noticeable symptoms, but eventually patients experience persistent coughing, trouble breathing, and constant chest pain. Patients presenting with these symptoms are subjected to biopsies and other diagnostic tests. If a cancer diagnosis is confirmed by biopsy, additional tests are performed to determine the stage of NSCLC. Staging is assessed according to the TNM classification system developed by the International Union Against Cancer (IUAC) and recommended by the American Joint Committee on Cancer (AJCC). The TNM staging criteria, which divide NSCLC into five stages, are used to determine appropriate treatment options. The stages are based on the degree of metastasis.

The treatment of NSCLC is stage dependent, and if the disease is identified early, surgical resection of the tumor is often the only treatment needed. Figure 8 provides a general overview of the major treatment options for patients with different stages of NSCLC. Once the cancer moves to stage I, external radiation becomes an option for patients who have not received surgery. At stage II, chemotherapy followed by surgery is recommended. The treatment intensity increases for stage III patients, who may opt for surgery followed by chemotherapy with radiation treatment. Stage IV patients are often prescribed targeted therapies, such as RTK inhibitors, in addition to chemotherapy and radiation. Several drugs are currently available for these patients, and include Roche’s (VTX: ROG) Tarceva (erlotinib) and Avastin (bevacizumab), Pfizer’s (NYSE: PFE) Xalkori (crizotinib), and AstraZeneca’s (NYSE:AZN) Iressa (gefitinib), and Taxol (paclitaxel). Stage IV patients have advanced to the point where the cancer has spread to other organs, and therapies that target secondary metastases are indicated.

Figure 8. Treatment Options at Different Stages of NSCLC

Stage Degree of Metastasis Common Treatments Cancer has not spread beyond inner 0 Surgery lining of lung. Cancer is small and has not spread to I Surgery; possible chemotherapy and radiation. lymph nodes. Cancer has spread to some lymph II Surgery; surgery with adjuvant chemotherapy nodes near tumor location. Cancer has spread to nearby tissue to Surgery; surgery with adjuvant chemotherapy or III distant lymph nodes. radiation. Surgery; chemotherapy; combination chemotherapy; IV Cancer has spread to other organs. radiation; targeted treatment (RTK inhibitors).

Source: LifeSci Capital

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Market Information for Non-Small Cell Lung Carcinoma

Epidemiology. According to the American Cancer Society, approximately 224,000 new cases of lung cancer were be diagnosed in 2016, and nearly 160,000 died from the disease, accounting for 27% of all cancer deaths. Approximately 85% of all lung cancers are NSCLC,9 and 45% of NSCLC patients are HLA-A+. It is difficult to determine the exact revenue attributed to NSCLC from different cancer drugs because many are indicated for multiple tumor types. However, the global NSCLC market is believed to be approximately $5.5 billion, and could increase to $7 billion by 2020.

NSCLC Market Estimates. Drugs used in the treatment of NSCLC rank among the best-selling therapeutics in the world, as shown in Figure 9. The 2015 sales for each treatment are listed. Some drugs are indicated for multiple diseases so the sales figures do not exclusively represent revenue related to the treatment of NSCLC. NSCLC therapies are dominated by chemotherapies and EGFR-targeted small molecules. Because immunotherapies can in principle be integrated into existing treatment regimens, there is significant market potential for these programs. Indeed, Bristol-Meyers Squibb’s (NYSE: BMY) nivolumab (Opdivo) and Merck’s (NYSE: MRK) pembrolizumab (Keytruda), both PD-1 checkpoint inhibitors, were recently approved for some NSCLC patients. In 2015 Keytruda was approved as first-line therapy for treatment of NSCLC. Opdivo is currently in clinical development in combination with established chemotherapies or anti-CTLA therapy patients with advanced NSCLC. The annual figures for these immunotherapies are highlighted in Figure 9. Tedopi’s mechanism of action make it a potential candidate for combination with anti-PD-1 therapy.

Figure 9. Sales of NSCLC Approved Therapies

Drug Name Company Indications 2016 Sales NSCLC, colorectal, Avastin Roche glioblastoma, cervical, $6.78 billion (bevacizumab) renal cell Alimta Eli Lilly NSCLC, mesothelioma $2.28 billion (pemetrexed) Tarceva Roche NSCLC, pancreatic $1.02 billion (erlotinib) Iressa AstraZeneca NSCLC $513 million (gefitinib) NSCLC, renal cell cancer, Opidivo Bristol-Meyers melanoma, hodgkin’s $3.8 billion (nivolumab) Squibb lymphoma, and head and neck cancer Keytruda NSCLC, melanoma, head Merck & Co., Inc $1.4 billion (pembrolizumab) and neck cancer.

Source: LifeSci Capital

9 Herbst, R.S. et al., 2008. Lung Cancer. The New England Journal of Medicine, 359, pp1367-1380.

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Clinical Data Discussion- Tedopi

OSE Immunotherapeutics completed a Phase II clinical trial for Tedopi in metastatic, HLA-A2+ NSCLC patients. This trial produced encouraging findings for median overall survival, which prompted the Company to advance Tedopi into Phase III clinical trials in patients with advanced NSCLC who are refractory to combination cytotoxic therapy. In January 2016, OSE initiated the Phase III Atalante 1 trial to evaluate the safety and efficacy of Tedopi versus chemotherapy in HLA-A2+ patients who have progressed on platinum based chemotherapy or second-line immune checkpoint inhibitors. Results from the Atalante 1 trial are expected in 2018.

In this section, we will focus on two separate trials. The first is a Phase II trial that evaluated Tedopi for safety and overall survival in HLA-A2 patients who are refractory to chemotherapy. The second is an ongoing pivotal Phase III randomized trial to evaluate Tedopi in comparison to chemotherapy in HLA-A2 patients with invasive or metastatic stage NSCLC. At the end of this section, we will present the rationale for combining Tedopi with approved immune- checkpoint inhibitors in advanced NSCLC patients that are resistant to immune checkpoint inhibitor therapy.

Phase II Trial – Safety and overall survival in chemotherapy refractory NSLC.

Trial Design. OSE Immunotherapeutics conducted a Phase II open-label, single-arm clinical trial to evaluate the clinical efficacy, safety and immune response of Tedopi in 63 patients with histologically confirmed stage IIIb or IV, HLA-A2+ NSCLC.10 Tedopi was administered subcutaneously at 5mg/mL total peptide every 3 weeks for the first 15 weeks, then every 2 months through year 1, and quarterly through year 2, for a total of 13 doses. The primary endpoints of the trial were safety, immune response as measured by interferon gamma (IFN-) secretion, and survival.

Efficacy Results. Patients treated with Tedopi had a median survival of 17.3 months and one-year survival for these patients was 60%. One patient experienced a complete response and one patient had a partial response. 86% of patients had stable disease after 3 months of treatment as measured by RECIST and 89% of patients benefited from therapy as measured by stable or partial/complete response.11 This study also measured immunogenicity of Tedopi as quantified by IFN- release from harvested peripheral-blood mononuclear cells. All nine neo-epitopes were immunogenic in at least one patient and 91% of patients experienced a cytotoxic T cell response to at least one the five strongest epitopes, namely, CEA24, p53-139, CAE605, and MAGE-112.

Cytotoxic response to each neo-epitope peptide was measured in vitro, by stimulating patient PBMCs with each neo- epitope and subsequently measuring Spot-forming cells in a ELISPOT assay. Of note, patients treated with Tedopi who experienced a longer time to progression also experienced a benefit in survival, which correlated with the number of immunogenic epitopes. Figure 10 shows that patients with higher CTL response, measured as the number of epitopes reacting in vitro, experienced a trend towards increased survival that was statistically significant compared to patients that induced a low CTL response (p<0.001).

10 https://clinicaltrial.gov/ct2/show/NCT00104780 11 Barve, M. et. al., 2008, Induction of Immune Response and Clinical Efficacy in Phase II Trial of IDM-2101, a 10- Epitope Cytotoxic T-Lymphocyte Vaccine, in Metastatic Non-Small-Cell Lung Cancer. Journal of Clinical Oncology, (26)27, pp 4418-4425

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Figure 10. Cytotoxic Lymphocyte Immune Response and Survival

CTL Immune Number of Epitopes Survival (days) response Low 0-1 406 ± 58 Medium 2-3 778 ±72 High 4-5 875± 67

Source: Company Presentation

Safety Analysis. Tedopi induced one grade 3 fever and grade 1 to 2 adverse events, including injection site erythema (21%), fatigue (16%), injection site pain (14%), and fever (16%).

Phase III Trial- Atalante-1.

Trial Design. OSE Immunotherapeutics initiated a Phase III randomized parallel group, open-label clinical trial to evaluate efficacy of Tedopi in patients with advanced, HLA-A2+ NSCLC without EGFR or ALK alteration who have progressed on platinum based chemotherapy or second-line immune checkpoint inhibitors.12 A total of 500 patients will be randomized 1:1 to receive either:

▪ Subcutaneous Tedopi at 5mg of peptide, every 3 weeks over 6 courses, then every 2 months for the remainder of the year and then finally every 3 months. ▪ Standard treatment: Squamous NSCLC patients receive 75mg/m docetaxel every 3 weeks and non- squamous NSCLC patients receive 500 mg/m pemetrexed every 3 weeks.

In both arms, treatment will continue until there is evidence of progression, intolerability, or withdrawal of consent. In the Tedopi arm, patients will remain on therapy until there is unequivocal Recist 1.1-defined disease progression as determined by the investigator. Randomization is stratified by non-squamous and squamous histology, and by partial or complete response versus stabilization or progression to first line chemotherapy. Tumor assessment is performed every 6 weeks and biopsies will be archived to determine PD-1 status. The primary endpoint for this study is overall survival and secondary endpoints include progression-free survival, quality of life, overall response rate, and tolerance. The proposed study is a superiority study with a hazard ratio of 0.7391, a two-sided alpha 5% and power 80% after 356 events are observed among 500 patients. The trial enrolled its first patient in January 2016 and is currently enrolling patients in Europe and the US. Data from the trial are expected at the end of 2018.

12 https://clinicaltrials.gov/ct2/show/NCT02654587

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Phase II Combination Study

Recent studies using anti-CTLA-4, anti-PD-1, and anti-PD-L1 immune checkpoint inhibitors have shown durable clinical responses in a wide range of cancers. As result, the combination of cancer vaccines with immune checkpoint blockade has been proposed as an avenue to improve efficacy over either monotherapy. Preclinical studies have shown that the combination of immune checkpoint inhibition and cancer vaccines resulted in increased vaccine- induced cytotoxic lymphocyte activation and synergistic anti-tumor effects.13

An animal model showed that the effects of checkpoint blockade are in part mediated by reactivation of neoantigen- specific T cells thereby enhancing immune surveillance.14 Clinical data suggest that patients with elevated mutational load benefitted most from immune checkpoint inhibition. With these studies in mind, OSE Immunotherapeutics will move to explore the combination of Tedopi and anti-PD1/ PD-L1 therapy as a way to enhance efficacy and is planning a Phase II trial for 2017.

The rationale for combining Tedopi with anti-PD-1/PD-L1 therapy is borne out of recent data suggesting a potential for synergistic action. Namely, a recent study showing that increased expression of factors associated with immune surveillance correlated with prolonged survival across a variety cancers. These markers include HLA-A, a MHC I protein involved in presenting antigens to cytotoxic lymphocytes, and CD8A, a marker for CD8+ tumor infiltrating leukocytes.15 Ectopic induction of IFN- resulted in concomitant expression of PD-L1 and MHC-1 in a variety of cancer cell lines.16 These data suggest that HLA-A2, CD8A, and PD-L1 could be used as prognostic factors to determine which patients would benefit from Tedopi plus a checkpoint blockade. Finally, a recent report showed that an increase in neoantigen burden correlated with a durable clinical benefit and progression free survival in NSCLC patients treated with anti-PD-1 therapy Keytruda.17 These data support exploring the synergy between Tedopi and immune checkpoint inhibitors, and point to clinical development of Tedopi in combination with immune checkpoint inhibitors for NSCLC.

13 Duraiswamy, J et al., 2013. Dual blockade of PD-1 and CTLA-4 combined with tumor vaccine effectively restores T–cell rejection function in tumors. Cancer Research, 73; pp3591-3609. 14 Gubin, M et al., 2014. Checkpoint blockade cancer immunotherapy target tumor-specific mutant antigen. Nature, (515); pp577-581. 15 Brown, S.D. et al., 2014. Neo-antigens predicted by tumor genome meta-analysis correlate with increased patient survival. Genome Research, (24); pp 743-750. 16 Grenga, I. et al., 2014. PD-L1 and MHC-I expression 19 human tumor cell lines and modulation of interferon-gamma treatment. Journal of Immunotherapy of Cancer, Poster Presentation. 17 McGranahan, N et al., 2016. Clonal neoantigens elicit T cell immunoreactivity and sensitivity to immune checkpoint blockage. Science. 351(6280); pp 1463-1469.

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Competitive Landscape and Other Drugs in Development

Small molecules targeting either EGFR or ALK have become the first line of treatment against NSLSCs harboring either of these alterations. The leaders in this group with respect to sales are Roche’s (VTX:ROG) Tarceva (erlotinib) and AstraZeneca’s (NYSE: AZN) Iressa (gefitinib) for tumors carrying mutation in EGFR and Pfizer’s (NYSE: PFE) Xalkori (crizotinib) and Roche’s Alecensa (alectinib) in tumors where ALK is the main driver of disease. Although targeted therapy has benefited many patients with these mutations, most patients relapse, possibly due to the acquisition of mutations that are resistant to first line therapy. In fact, almost 50% of patients with EGFR mutated NSCLC develop the T790M mutation exon 20 of EGFR while on EGFR targeted therapy, contributing to resistance to this first line targeted therapy. In 2016 AstraZeneca announced that Tagrisso (osimertinib), an irreversible inhibitor of EGFR sensitizing and resistance mutants, had demonstrated superior progression-free survival compared to platinum based chemotherapy as a second line therapy in NSCLC.

Alterations in EGFR and ALK account for 10-30% and 4-9% of NSCLC driver mutations, respectively, suggesting that the molecular pathogenesis of the majority of NSCLs remains unknown. 18,19 Recently, immune checkpoint inhibitors have demonstrated efficacy in non-EGFR or ALK mutated NSCLC patients who have failed first line chemotherapy. The main players in this space are Bristol-Meyers Squibb’s Opdivo, AstraZeneca’s Keytruda, and Roche’s Tecentriq. Opdivo and Keytruda generated approximately $5.2 billion combined in 2016. Currently, Opdivo is the main treatment for NSCLC patients who have failed first line chemotherapy and do not carry mutations in either EGFR or ALK.

Keytruda is approved as a first line treatment in NSCLC, with a requirement that the patient has PD-L1 expression above 50%. In tumors with PD-L1 expression under the 50% threshold, patients receive first-line carboplatin followed by an anti-PD-1 inhibitor upon progression. The clinical success of immune-checkpoint inhibitors for the treatment of NSCLC and other cancers indications is a promising sign for immunotherapies moving forward. Ongoing clinical studies evaluating immunotherapies in combination with approved and experimental treatments signal the continued interest and growth in this in this space.

The molecular pathogenesis of the majority of NSCLC remains unknown, therefore the available targeted small molecule therapy may not of benefit these patients. Although immune checkpoint inhibitor therapy is poised to have wide applicability in this space, threshold requirements may limit its potential. However, for patients who do meet the threshold criteria, there is space for improvement upon anti-PD-1 monotherapy since only 18% of patients responded to Keytruda responded to monotherapy. OSE Immunotherapeutics is exploring the combination of anti- PD-1 therapy with neo-epitope therapies as a way to improve efficacy of immune checkpoint blockade therapy.

18 Stewart, E.L. et al., 2015. Known and putative mechanisms of resistance to EGFR targeted therapies in NSCLC patients with EGFR mutations- a review. Translational Lung Cancer Research, 4(1), pp 67-81. 19 Shackelford, R.E. et al., 2014. ALK-rearrangements and testing methods in non-small cell lung cancer: a review. Genes & Cancer, 5(1-2), pp 1-14.

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FR104: An Inhibitor of CD28

OSE Immunotherapeutics’ second development candidate FR104 is an intravenously administered, pegylated, humanized monovalent fragment antigen-binding region of an antibody that acts as an antagonist of the CD28 receptor in development for the treatment of autoimmune diseases including rheumatoid arthritis, graft versus host disease (GvHD), and organ transplant rejection. CD28 is a co-receptor in the T cell receptor (TCR) complex that is necessary for the activation of T cells, their subsequent proliferation, and inflammatory cytokine production. T cells are aberrantly activated during many autoimmune conditions and attack the patient’s own organ systems. CD28 inhibition using FR104 has been the centerpiece of a European collaborative research project20 called Tolerance Restoration In Autoimmune Disease (TRIAD), which is testing the drug in multiple animal models of autoimmune disease.

Pre-clinical studies using FR104 demonstrated that the drug can prevent disease in rodent and non-human primate autoimmunity and transplant models. A Phase I clinical trial testing FR104 in 64 healthy human subjects has been completed and found the drug to be safe and well tolerated with no adverse events reported.21 Ex-vivo activation of blood cells after Staphylococcus aureus and LPS stimulation was blocked in FR104 treated patients, showing that the drug was acting as expected immunologically. The Phase I clinical trial results have recently been published in the Journal of Immunology and in July 2016 Janssen exercised their option to continue with Phase II development of FR104.

Mechanism of Action for FR104

FR104 is the fragment antigen-binding (Fab) region of an antibody which binds to the cell surface receptor CD28, and acts as a pure antagonist of the receptor. Figure 11 shows that by specifically binding CD28, FR104 prevents CD80/86 from activating downstream signaling events from the receptor, which subsequently prevents proper T cell activation and results in blockage of an effector immune response. The specificity of FR104 for CD28 is based on its ability to bind the epitope on CD28 formed by the C-D-E-F loops, which is distinct from other CD28 antibodies known to impart so-called superantagonist effects by binding the C-D loop epitope.

T cells are normally activated when antigens from infectious agents are presented to them by antigen presenting cells (APCs). They then proliferate and release inflammatory cytokines in order to help the immune system clear the infection. In autoimmune disease and transplant situations, T cells become aberrantly activated and attack the patient’s own cells or the transplanted cells, resulting in tissue destruction which can lead to disability or death. Inhibiting CD28 is intended to stop the activation of T cells resulting in decreased T cell proliferation, pro- inflammatory cytokine production, T cell function, and ultimately attenuation of autoimmune-mediated disease.

20 https://www.triad-cd28.eu/ 21 Poirier N. etal., 2016. First-in-Human Study in Healthy Subjects with FR104, a Pegylated Monoclonal Antibody Fragment Antagonist of CD28. Journal of Immunology. 1601538 (Published ahead of print).

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CTLA-4 is an inhibitory receptor that suppresses aberrant immune response and is important for inducing tolerance toward transplanted tissue. Selective agonistic ligation of CTLA-4 by CD80/86 dampens T cell responses and negates autoimmunity. As a result, targeting this pathway has become a promising approach to treat autoimmunity. However, inhibition of CD80/86 signaling blocks signals required for proper evolution of an immune response and does not reproducibly induce transplant tolerance. 22 As depicted in Figure 11, FR104 specifically blocks the activation of T cell effectors, while inducing positive activation of T regulatory cells. As a consequence, T cell effector cell function is attenuated by the agonistic activity of CTLA-4 and PD-L1. In addition, T regulatory cells are stimulated by positive activity of CTLA-4. The precise orchestration of CD28 modulation may result in tolerogenic immune response and further suppression of autoimmunity.

Figure 11. FR104 Effect on Effector and Regulatory T cells

Source: OSE Immunotherapeutics Presentation

CD28 Background. As shown in Figure 12, CD28 is part of the T cell receptor (TCR) complex on the surface of T cells and acts as a co-receptor for the TCR itself. 23 CD28 binds to CD80, CD86 (the B7 receptors) and CD275 (ICOSL), which are expressed on APCs. Activation of T cells occurs through the stimulation of the TCR binding to the peptide-MHC complex on APCs in an antigen specific manner in addition to CD28 binding to its ligands on the same APC in an antigen non-specific manner. Both CD28 and the TCR must be stimulated in order for normal T cell activation to occur.

22 Sansom D. et al., 2014. Understanding the CD28/CTLA-4 (CD152) Pathway and Its Implications for Costimulatory Blockade. American Journal of Transplantation. 14 pp1985–1991. 23 Oreste A. et al., 2003. CD28-mediated co-stimulation: a quantitative support for TCR signalling. Nature Reviews Immunology. 3, pp939-951

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Figure 12. The CD28/TCR Complex

Source: Oreste A. et al., 2003

Anti-CD28 Antibodies. Anti-CD28 antibodies have been typically used in research in conjunction with anti-CD3 antibodies, which stimulate the TCR. Combined, these two antibodies can activate T cells by simulating the presence of an APC presenting the TCR’s cognate antigen. Generating anti-CD28 antibodies that lack stimulatory activity has been difficult and the possibility of activating this receptor is a risk. In particular, the IgG form of the anti-CD28 antibodies are homodimeric nature often leading to CD28 cross-linking and T cell co-stimulation in synergy with TCR signals. OSE Immunotherapeutics has developed monovalent humanized Fab antibody fragment antagonist of CD28 that is not susceptible co-stimulation. Bristol-Myers Squibb (NYSE: BMY) is currently conducting Phase II clinical trials for lulizumab pegol, a CD28 antagonist, for the treatment of two autoimmune diseases, Sjögren’s syndrome and systemic lupus erythematosus.

Preclinical Data

FR104 has been tested in multiple preclinical animal models of autoimmunity and transplant induced autoimmune disease in both rodents and non-human primates. Some of these preclinical studies and their key findings are highlighted in Figure 13. Below, we present a detailed description of an in vitro and in vivo study validating FR104 in T cells, and a separate study describing its effects in a primate model of collagen-induced arthritis.

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Figure 13. Preclinical Animal Studies Involving FR104

Indication Model Highlight FR104/anti-CTLA-4 combination prevented GvHD Humanized mouse model disease onset. 4 Adoptive transfer of non-human GvHD FR104 prevented disease onset. 24 primate PBMCs into mice Autoimmune Uveitis Mouse model FR104 lowered histological disease score. 25 Experimental Autoimmune Non-human primates FR104 prevented onset of paralysis. 26 Encephalomyelitis (EAE) Blunted memory immune response FR104 GvHD Non-human primates blocked skin inflammation. 27 FR104 in combination with tacrolimus prevented Organ transplant Non-human primates acute rejection, alloantibody development, and rejection prolonged allograft survival. 28 FR104 was superior to anti-CTLA-4 treatment at Organ transplant Non-human primates preventing acute cellular rejection after tacrolimus rejection withdrawal. 29

Source: Life Capital

FR104 is a CD28 Antagonist in Human T cells in vitro and in vivo. Studies performed in vitro using human T cells incubated in the presence of FR104 showed that the drug was able to bind CD28 at low concentrations with a median effective dose of 0.32 ± 0.05ug/mL. FR104 blocked cell proliferation in a mixed lymphocyte reaction with an IC50 of 0.16 ± 0.04ug/mL and was able to block IL-2 production, a sign of activation. In a T cell derived Jurkat cell line stimulated with superantigens, FR104 blocked IL-2 production at an IC50 of 0.027 ± 0.007ug/mL. Importantly, FR104 does not stimulate human T cells to proliferate and produce cytokines by itself, even in the presence of an anti-CD3 antibody or when FR104 was crosslinked to another secondary antibody.30

24 Hippen K. et al., 2016. Preclinical Testing of Antihuman CD28 Fab′ Antibody in a Novel Nonhuman Primate Small Animal Rodent Model of Xenogenic Graft-Versus-Host Disease. Transplantation. 100(12), pp2630-2639. 25 Rizzo P. et al., 2014. Immunotherapeutic strategies in autoimmune uveitis. Autoimmunity Reviews. 13 (2014) pp909–916 26 Haanstra K, et al. 2015. Selective Blockade of CD28-Mediated T Cell Costimulation Protects Rhesus Monkeys against Acute Fatal Experimental Autoimmune Encephalomyelitis. Journal of Immunology. 194 pp1454-1466. 27 Poirier N. et al., 2016. Selective CD28 Antagonist Blunts Memory Immune Responses and Promotes Long-Term Control of Skin Inflammation in Nonhuman Primates. Journal of Immunology. 196 pp274-283. 28 Poirier N. et al., 2014. FR104, an Antagonist Anti-CD28 Monovalent Fab’ Antibody, Prevents Alloimmunization and Allows Calcineurin Inhibitor Minimization in Nonhuman Primate Renal Allograft. American Journal of Transplantation. 15(1) pp88-100. 29Ville S. et al., 2016. Anti-CD28 Antibody and Belatacept Exert Differential Effects on Mechanisms of Renal Allograft Rejection. Journal of the American Society of Nephrology. 27 pp3577-3588. 30Poirier N. et al., 2012. Preclinical efficacy and immunological safety of FR104, an antagonist anti-CD28 monovalent Fab' antibody. American Journal of Transplantation. 12(10) pp2630-40.

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In order to test the antagonistic activity of FR104 in vivo, researchers used humanized NOD/SCID mice, which initially had no immune system and were reconstituted with 50x106 human peripheral blood mononuclear cells (PBMC). As shown in Figure 14, treatment with 5mg/kg of FR104 (filled-in circle) elicited an immune response that was comparable to vehicle control (open diamond), as measured by a lack of increase in secretion of the cytokines IFN-, IL-8, IL-6, and TNF-α compared to the vehicle control. In the same study, treatment with a superagonist of CD28 (open square) and a divalent anti-CD28 antibody (filled in square), both at 5mg/kg, resulted in increased levels of IL-8 and IL-6 compared to FR104 treated and vehicle treated animals.

Figure 14. Levels of Activation In Vivo Using Various CD28 Antibodies

Source: Poirier et al. 2012

In addition to decreased cytokine release in FR104 treated animals, CD25 and CD69 positive cells in these animals were similar to vehicle treated animals. CD25 and CD69 are markers of T cell activation.30 Taken together these data suggest that FR104 does not induce cytokine release and T cell activation in a humanized in vivo mouse model and underscore the importance of monovalency for antagonistic activity of anti-CD28 therapy.

FR-104 in a Primate Model of Collagen-Induced Arthritis. Using a primate model of collagen-induced arthritis researchers evaluated the efficacy of FR-104 against Bristol Meyer Squibb’s (NYSE: BMY) Orencia (abatacept), a CTLA-4 antagonist that is clinically approved treatment for rheumatoid arthritis. The main goal of this study was to evaluate FR-104’s tolerability and to compare its efficacy to that of abatacept. Abatacept binds the CD80/ 86, preventing T cell activation. Its drug class and mechanism of action make it a suitable candidate comparator to FR104. To test the drug’s ability to inhibit a primary response in T cells, four allogeneic MHC-II mismatched PBMCs, depicted as the black, green, blue, purple bars in Figure 15, were treated with either FR-104, abatacept, or cyclosporin, a DMARD used as a positive control, and compared to medium alone.

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As described in Figure 15 panel A, FR-104 (+FR104) inhibited proliferation to the same degree as the benchmark compounds, Orencia (+CTLA4) and cyclosporin A (+CsA). A secondary T cell response was measured using PBMCs from collagen type II (CII)-immunized monkeys that were stimulated with the immunizing antigen and then measured proliferation in presence of FR-104, Orencia, or cyclpsporin. Panel B of Figure 15 describes the inhibitory effects of FR-104 on collagen type II mediated proliferation of T cells, which were comparable to Orencia and cyclosporin A in two separate rhesus monkeys, depicted with black and green bars. These data suggest that FR104 induces an inhibitory response comparable to that of Orencia and cyclosporin.

Figure 15. FR-104 Effects on Proliferation

Source: Vierboom et al. 2015

The initiation and progression of collagen induced arthritis in rhesus monkeys is mediated via anti-CII antibodies and T cells. To measure the effects of FR-104 or abatacept on ex vivo proliferation of mononuclear cells isolated from spleen, lymph nodes, and blood; mononuclear cells from these organs were stimulated with chicken collagen type II antigen (chCII). Figure 16 depicts data showing FR-104 treatment resulted in a noticeable trend towards suppression of proliferation mononuclear cells.

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Figure 16. chCII- induced Proliferation of Mononuclear Cells after Treatment with FR104

Source: Vierboom et al. 2015

In the rhesus monkey model, an increase in IL-6 and C-reactive protein (CRP) expression is associated with onset of collagen-induced arthritis. To investigate the effects of FR-104 compared to abatacept and placebo, the investigators measured IL-6 and CRP levels twice a week 70 days across all conditions. The data depicted in Figure 17 show an increase in both IL-6 and CRP in multiple animals, in the placebo treated cohort, represented by the different colored lines. By contrast, there was a decrease in IL-6 and CRP levels in animals treated with FR104 or abatacept, suggesting FR104 is comparable to abatacept in its ability to restrict IL-6 and CRP levels in this model.

Diagnosing collagen-induced arthritis in the rhesus monkey model is often variable and complex, requiring the use body weight and clinical index based on soft tissue swelling and redness of affected joints to assess its onset. The authors reported a delayed, but not a statistically significant, onset of collagen induced arthritis in FR-104 treated animals compared to placebo treated animals. Most importantly, overall survival was significantly increased in FR- 104 and abatacept treated animals compared to placebo.

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Figure 17. IL-6 and CRP Levels in FR104 Treated Monkeys

Source: Vierboom et al. 2015

One of the characteristics of collagen-induced arthritis is severe inflammatory and erosive changes in the synovial joints. The authors applied a score, adapted from a previous study, to measure the degree of inflammation, cartilage, and bone damage, with scores ranging from 0 to 5; 5 being the most severe. Figure 18 shows inflammation was significantly reduced in both the FR-104 and abatacept treated animals, represented by the red and blue dots, respectively, when compared placebo treated animals, represented by the black dots. Interestingly, FR-104 and abatacept did not differ significantly in their ability to curb bone and cartilage damage when compared to placebo, as represented in the middle and right panels of Figure 18. As a whole these clinical and immunological data indicate that inhibition of CD28 with FR-104 is comparable to the standard of care in a preclinical rhesus monkey model, underscoring its potential as a treatment for rheumatoid arthritis.

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Figure 18. Effects of FR104 on Joint Histopathology

Source: Vierboom et al. 2015

Safety Profile

Toxicity is a major cause for concern in using anti-CD28 antibodies because of a previous incident with another anti-CD28 antibody, TGN1412. TGN1412 was developed by TeGenero Immuno Therapeutics as a CD28 superantagonist for the treatment of RA. During the first few hours of TGN1412 treatment in a Phase I clinical trial healthy human subjects succumbed to cytokine storm, an extremely dangerous inflammatory condition. 31 After its Phase I failure due to safety concerns, preclinical assays were restructured, and TGN1412 is and now being developed by TheraMAB Bioscience (private) for the treatment of RA.

FR104 was engineered in the wake of TGN1412’s clinical failure to be a complete antagonist, with no agonistic function and it purposefully lacks an antibody Fc region which could have potentially activated Fc receptors through antibody crosslinking and elicited an unsafe immune response. In vitro studies have shown that FR104 does not activate human T cells. Moreover, human T cells transplanted into lymphopenic mice showed no activation, proliferation, or cytokine secretion upon FR104 treatment. No adverse immune activation has been seen in any of the animal models tested using human or non-human primate immune cells.

A 36-week Phase I clinical trial in 64 healthy human subjects, using dosages ranging from 0.02mg/kg to 1.5mg/kg in single and double infusions, revealed that there were no serious adverse events observed with FR104 treatment during the study. This included no signs of cytokine storm and no difference in immune cell subsets. Back pain, head ache, vomiting, diarrhea, and influenza-like illness were among the reported treatment associated adverse effects.32

31 Panoskaltsis N. et al., 2006. Cytokine Storm in a Phase 1 Trial of the Anti-CD28 Monoclonal Antibody TGN1412. The New England Journal of Medicine. 355 pp1018-28. 32 Poirier, N. et al., 2016. First-in-Human Study in Healthy Subjects with FR104, a Pegylated Monoclonal Antibody Fragment Antagonist of CD28. Journal of Immunology, 197(12): pp4593-4602.

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Target Indications for FR104 – GvHD and Rheumatoid Arthritis

Graft versus Host Disease

Organ transplantation is currently the treatment of choice for patients with late stage organ failure or injury, which led to a marked decrease in both morbidity and mortality. Improved surgical technique and immunosuppression are some of the factors that have greatly improved the short-term acceptance of the donor tissue, however long-term acceptance of the grafted tissue still remains a challenge due to chronic rejection and toxicity of the immunosuppressive drugs, which can cause infections, organ failure, and cancer. 33 Organs that are routinely transplanted include heart, intestine, lung, liver, and blood. Hematopoietic stem cell transplantation is an established procedure that infuses autologous, syngeneic, or allogeneic stem cells into a recipient to help alleviate several high risk hematological malignancies.

Graft-versus-host disease (GvHD) is a potentially life threatening complication of donor-derived hematopoietic cell after an allogeneic bone marrow transplant (alloHCT). alloHCT is used to treat blood cancers and anemia, and involves the reconstitution of a patient’s immune system with cells from a healthy donor. GvHD arises when transplanted donor white blood cells called T lymphocytes (T-cells) begin attacking the patient’s tissues, causing inflammation and organ damage.

According to the Center for International Blood and Marrow Transplant Research (CIBMTR), approximately 7,500 patients undergo alloHCT in the US each year34 and approximately 60% are expected to develop GvHD.35 First-line treatment for GvHD is steroids, however less than 50% of patients will achieve durable responses with this therapy.36 Steroid refractory GvHD remains a major cause of alloHCT-related morbidity, and overall mortality estimates are as high as 95%.37,38,39 There is a high unmet medical need for a treatments that protect against a graft- vs-host reaction while maintaining robust immune function that is capable of combating infections.

33 Romano, M. et al., 2016. Treg therapy in transplantation a general overview. Transplant International. 2016. 34 CIBMTR, 35 Jagasia, M. et al. 2012. Risk factors for acute GvHD and survival after hematopoietic cell transplantation. Blood, 119(1), pp296-307. 36 Arai, S. et al., 2002. Poor outcome in steroid refractory graft-versus-host disease with antithymocyte globulin treatment. Biology of Bone and Marrow Transplantation, 8, pp155-160. 37 Bolanos-Meade, J. et al., 2001. Outcome of 21 patients undergoing unrelated bone marrow transplant for hematologic malignancies at a single institution. Blood, 98, 382B. 38 Arai, S. et al., 2000. Management of graft-versus-host disease. Blood Reviews, 14, pp190-204. 39 Westin, J.R., et al. 2011. Steroid-Refractory Acute GvHD: Predictors and Outcomes. Advances in Hematology, 2011, pp1-8

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Symptoms, Diagnosis and Staging of GvHD

GvHD occurs following a transplant procedure when donor T-cells attack the patient’s organ systems. The immune attack causes severe and potentially life-threatening organ damage. There is no definitive test for GvHD but a positive diagnosis can be made based on patient symptoms.40 Symptoms typically occur within 100 days post- transplant, and most commonly involve the skin, liver, and gastrointestinal tract. Usually the first sign of disease is a skin rash on the neck, ears, shoulders, palms, or feet. The rash can be followed by upper and lower gastrointestinal track symptoms, which include bloody diarrhea, abdominal pain, nausea, and vomiting. These features together with elevated levels of the liver biomarker bilirubin suggest a graft-versus-host reaction, and would lead clinicians to suspect GvHD. A biopsy of the involved organs can be used to confirm disease and rule out other non-GvHD complications.

The Keystone GvHD Clinical Grade Scale was established in 1994 and is widely used to characterize the severity of GvHD.41 In this system, the severity of disease corresponds directly to the degree of organ involvement. The top half of Figure 19 shows the four stages of disease for each of the three most commonly affected organs – the skin, liver, and gastrointestinal track. Organ staging is combined with the patient’s performance to produce an overall grade, which helps clinicians determine prognosis and select appropriate treatment options. Patients with a Grade II- IV moderate-to-severe GvHD have a significantly higher mortality rate than those with milder Grade I disease. Estimated five-year survival rates of patients with Grade III and Grade IV disease are 25% and 5%, respectively.42

40 Firoz, B.F. et al., 2006. Role of skin biopsy to confirm suspected acute graft-vs-host disease: results of decision analysis. Archives of Dermatology, 142(2), pp175. 41 Przepioka, D. et al., 1995. 1994 Consensus Conference on Acute GvHD Grading. Bone Marrow Transplantation, 15, pp825-864. 42 Cahn, J.Y. et al., 2005. Prospective evaluation of 2 acute graft-versus-host (GVHD) grading systems: a joint Société Française de Greffe de Moëlle et Thérapie Cellulaire (SFGM-TC), Dana Farber Cancer Institute (DFCI), and International Bone Marrow Transplant Registry (IBMTR) prospective study. Blood, 106(4), p1495.

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Figure 19. Keystone Clinical Grade Scale

Stage Skin Liver GI Tract

Rash <25% of body surface 1 Bilirubin 2-3 mg/dL Diarrhea >500 ml/day area

Rash ≥25-50% of body 2 Bilirubin 3.1-6 mg/dL Diarrhea >1000 ml/day surface area

Rash on > 50% of body 3 Bilirubin 6.1-15 mg/dL Diarrhea >1,500 ml/day surface area

Generalized erythroderma Diarrhea >1,500 ml/day 4 Bilirubin >15 mg/dL with bullous formation or severe abdominal pain

Grade I Stage 1-2 None None II Stage 3 or Stage 1 or Stage 1

III N/A Stage 2-3 or Stage 2-4

IV Stage 4 or Stage 4 N/A

Source: Przepiorka, D. et al., 1995

It is worth noting that patients with the same grade but different patterns of organ involvement often have significantly different outcomes. For example, a patient with Stage 4 skin GvHD would be expected to have a much more favorable outcome than a patient with Stage 4 liver GvHD, although both have overall Grade IV disease.

Treatment for GvHD

Prophylactic treatments are used to prevent aGvHD but approximately 60% of alloHCT patients will still develop disease. There is not an agreed upon prophylactic therapy, however most treatments combine methotrexate (MTX) with a calcineurin inhibitor (CNI) such as tacrolimus or cyclosporine A. When prophylaxis fails, clinicians are presented with few treatment options to reverse disease progression. Below we discuss the therapies for Grade I, Grades II-IV, and steroid refractory disease. We also note the potential benefits of mild GvHD on cancer eradication and highlight the secondary risks associated with all treatments options.

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Treatment for Grade I GvHD. Patients with Grade I disease present with rash over ≤ 50% of their body, and show no signs of liver or gastrointestinal involvement. First-line treatment for this form of the disease usually involves topical steroids. For the approximately 60-75% of patients with Grade I who become refractory to steroid treatment, a topical formulation of the CNI tacrolimus has been used as a second-line therapy.43

Treatment for Grades II-IV GvHD. First-line treatment for Grades II-IV GvHD is off label use of steroids,44 which have been shown to be superior to immunosuppressants including cyclosporine A and anti-thymocyte globulin (ATG).45,46 Initial treatment is usually systemic glucocorticoids, such as methylprednisolone. Approximately 25%-40% of patients receiving methylprednisolone will have a complete response, defined as the complete resolution of GvHD symptoms in all affected organs.47, 48 It is estimated that 40-50% of Grades II-IV patients will experience improvement in symptoms, such as resolution of skin rashes, and a reduction in gastrointestinal and liver symptoms.49, 50 We note that response rates decrease as the severity of disease increases, with grade IV patients having the lowest overall response rate. Patients who do not respond to steroids seven days following treatment are diagnosed with steroid refractory GvHD.

Steroid Refractory GvHD Treatments. There are no approved therapies for steroid refractory GvHD, highlighting a significant unmet medical need for these patients. Current treatment options include a variety of immunosuppressive agents and experimental therapies. The most widely used agents include antithymocyte globulin (ATG) and TNF-α inhibitors. Approximately 20-50% of patients respond to ATG therapy,51 however less than 20% achieve durable responses. ATG treatment can cause severe side effects, including acute febrile reactions, hypotension, thrombocytopenia, and, in rare instances, the development of post-transplantation lymphoproliferative disorders,52 so there is a need for safer and more durable treatment options.

43 Antin, J. et al., 2004. Novel approaches to the therapy of steroid-resistant acute graft-versus-host disease. Biology of Blood and Marrow Transplantation, 10(10), pp655-668. 44 Martin, P.J. et al., 2012. First- and second-line systemic treatment of acute graft-versus-host disease: recommendations of the American Society of Blood and Marrow Transplantation. Biology of Blood and Marrow Transplantation. 18(8), pp1150-1163. 45 Martin, P.J. et al., 1991. A retrospective analysis of therapy for acute graft-versus-host disease: secondary treatment. Blood, 77, pp1821- 1828. 46 Martin, P.J. et al., 1990. A retrospective analysis of therapy for acute graft-versus-host disease: initial treatment. Blood, 76, pp1464-1472. 47 Hings, I.M. et al., 1994. Treatment of moderate and severe acute GVHD after allogeneic bone marrow transplantation. Transplantation, 58(4), pp437. 48 Lee, S.J. et al., 2004. Effect of up-front daclizumab when combined with steroids for the treatment of acute graft-versus-host disease: results of a randomized trial. Blood, 104(5), pp1559. 49 Chao, N. et al., 2015. Treatment of acute graft-versus-host disease. Wolters Kluwer. 50 Deeg, J., 2007. How I treat refractory acute GVHD. Blood. 109(10), pp4119-4126. 51 Doney, K. et al., 1985. A randomized trial of antihuman thymocyte globulin versus murine monoclonal antihuman T-cell antibodies as immunosuppressive therapy for aplastic anemia. Experimental Hematology. 13(6), pp520-524. 52 Curtis, R.E. et al., 1999. Risk of lymphoproliferative disorders after bone marrow transplantation: a multi-institutional study. Blood, 94(7), pp2208-2216.

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Other immunosuppressants available for the treatment of steroid refractory GvHD include TNF-α inhibitors, as well as anti-IL-2 receptor, anti-IL6 receptor, anti-CD20, and anti-CD52–targeted therapies. These agents have not been rigorously tested in clinical trials, making it very hard to determine efficacy. There is also a safety risk with these therapies, since they broadly suppress immune function and leave patients susceptible to opportunistic bacterial and viral infections. OSE Immunotherapeutics has developed FR104 to solely block activation signals mediated by CD28 without affecting CD80/86, which is linked to inefficient immune suppression. By selectively targeting CD28, OSE Immunotherapeutics is seeking induce a tolerable immune response by modulating autoimmunity.

Rheumatoid Arthritis

Rheumatoid arthritis (RA) is a chronic, systemic, autoimmune disorder that affects more than 1.3 million patients in the US, and 11.3 million around the world. Patients with RA experience joint pain due to inflammation in the capsule surrounding the joint, swelling of synovial cells, excess synovial fluid, and eventually the development of fibrous tissue. Epidemiology studies have found that women are about two times as likely as men to suffer from the disease. The course of RA varies widely from patient to patient, with some individuals experiencing only short term and mild symptoms. However, for most patients the disease continues to progress, and in late stages causes pain and greatly affects quality of life.53 Most patients are treated with anti-TNF-α agents. However, these are injectable drugs are and carry the risk for severe infection due a mechanism that broadly dampens immune function. OSE Immunotherapeutics is developing FR-104 as a potentially more targeted and safer therapy for the treatment of RA.

Causes and Pathogenesis of Rheumatoid Arthritis. The pathogenesis of RA involves unknown antigens triggering an autoimmune response. Through co-stimulatory signals, T-cells become activated leading to stimulation of monocytes, macrophages, and synovial fibroblasts. This leads to the production of pro-inflammatory cytokines, including TNF-α, interleukin-6, -12, -17, and -23 (IL-6, IL-12, IL-17 and IL-23). Each of these factors recruit other cells and stimulate proliferation, which further induces and sustains joint inflammation. This causes damage to connective tissue and also drives bone destruction.

Symptoms and Diagnosis of Rheumatoid Arthritis. RA is diagnosed following a physical examination by a rheumatologist. The main symptoms of RA include joint swelling, tenderness, and limited mobility. These symptoms tend to affect joints in the upper and lower extremities, and on both sides of the body. Early stages of the disease may display features of other forms of inflammatory arthritis, so clinicians will use a combination of tests to arrive at positive diagnosis. These may include blood tests to determine levels of inflammation and look for certain biomarkers associated with RA.

53 Wasserman, A.M., 2011. Diagnosis and management of rheumatoid arthritis. American Family Physician, 84(11), pp1245-1252.

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Quantifying Responses to RA Treatments. The American College of Rheumatology (ACR) criteria are used to assess the effectiveness of RA treatments in clinical trials. The ACR is reported as percentage improvement, comparing disease activity at two discrete time points, which are usually baseline and week 24. The ACR measures improvement in tender or swollen joint counts, and the improvement in at least three of the following parameters:

▪ Patient assessment ▪ Physician assessment ▪ Pain scale ▪ Disability/functional questionnaire ▪ Acute phase reactant (ESR or CRP).

ACR20, which is used as the primary endpoint in most clinical trials for RA, indicates a greater than or equal to 20% improvement in tender or swollen joint counts and 20% or greater improvement in 3 of the 5 above parameters. ACR50 would correspond to 50% or greater improvement, and ACR70 is a 70% or greater improvement.

Treatments for Rheumatoid Arthritis. Early-stage RA can be managed with corticosteroids and non-steroid anti- inflammatory drugs (NSAIDs). However, as the disease progresses, patients often receive non-biological disease modifying antirheumatic drugs (DMARDs), such as sulfasalazine, hydroxychloroquine, and methotrexate (MTX). Most patients only partially respond to these agents, so many are eventually treated with anti-TNF-α agents. These include Johnson & Johnson’s (NYSE:JNJ) Remicade (infliximab) and Simponi (golimumab), AbbVie’s (NYSE: ABBV) Humira (adalimumab), Amgen’s (NASDAQGS:AMGN) Enbrel (etanercept), and UCB's (EBR:UCB) Cimzia (certolizumab pegol). Pivotal trials supporting the approval of biologics have demonstrated that the agents in combination with MTX can significantly reduce patient symptoms. However, there is a risk of developing severe infections with these agents because of their broad immunosuppressive effects. OSE Immunotherapeutics’ strategy of specifically targeting CD28 aims to curtail the broad effects of available immunosuppressive agents, namely the blockade of co-inhibitory signals such as CD80/86/PD-1 interaction.

Conditions with Similar Features as Rheumatoid Arthritis. In addition to RA, a number of other autoimmune and inflammatory diseases are known to have similar mechanisms of action, and many RA drugs have also been approved for these indications. These could represent follow-on indications for FR104. Some of the RA-related conditions include:

▪ Plaque Psoriasis – This is a skin affliction causing itchy red or white scaly patches to appear on the epidermis. It is an autoimmune disease that is related to an immune reaction to healthy skin cells that speeds up skin cell growth. ▪ Psoriatic Arthritis – This is a type of inflammatory arthritis that develops in about 30% of psoriasis patients and can cause joint swelling and pain, dactylitis, pain in the feet and ankles, and changes to nails. ▪ Juvenile Idiopathic Arthritis – This is the most common form of arthritis in adolescents and children. It is an inflammatory autoimmune disorder that can be limited and transient or in some cases chronic. ▪ Ankylosing Spondylitis – This is a chronic inflammatory disease of the axial skeleton that sometimes involves peripheral joints and non-articular structures. It is an autoimmune condition that usually affects spine and pelvis, sometimes resulting in spinal fusion. ▪ Crohn’s Disease – This is a chronic inflammatory bowel disease affecting any part of the gastrointestinal tract, causing symptoms such as abdominal pain, diarrhea that may contain blood, vomiting, and weight loss, as well as skin rashes, arthritis, and eye inflammation.

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▪ Ulcerative Colitis – This is a type of inflammatory bowel disease of the colon causing characteristic ulcers; the primary symptom is progressively worsening, constant bloody diarrhea.

Rheumatoid Arthritis Market Information

Epidemiology. According to the CDC, there are an estimated 1.3 million individuals in the US and 30 million around the world with RA.54,66 Onset typically occurs between 30 and 50 years of age,55 with an estimated incidence in the United States of 41 per 100,000 people.56,57 This translates to over 130,000 new cases of the disease each year. Women are affected by RA more than men, but this difference diminishes in older age groups.58 The earlier the disease starts, the more likely it is that patients will become severely disabled. Up to 50% of RA patients cease work within 10 years of diagnosis, and an estimated 26% leave the workforce before they reach 65 years of age.59

Market Size. RA poses a significant economic burden to both patients and society. Annual total direct and indirect costs of RA in the United States are estimated to be $19.3 billion, which translates to approximately $14,900 per patient. Additionally, when intangible costs such as those associated with premature mortality and quality-of-life deterioration are factored in, costs for RA are estimated to equal $39 billion or approximately $30,000 per patient.60 Approved drugs for RA include non-steroidal anti-inflammatory agents (NSAIDs), corticosteroids, conventional disease modifying anti-rheumatic drugs (DMARDs), targeted oral treatments, and biologic DMARDs. Some of these drugs are among the best-selling therapeutics in the world. Figure 20 shows the worldwide annual sales figures for select RA treatments. Each agent is approved for multiple autoimmune indications, meaning that the sales figures below are not exclusive to RA. These drugs are representative of the potential market opportunity available to FR- 104 if it is approved.

54 Kahlenberg, J. M., & Fox, D. A. 2011. Advances in the Medical Treatment of Rheumatoid Arthritis. Hand Clinics, 27(1), pp11– 20. 55 Stoll, J. G., & Yasothan, U. 2009. Rheumatoid arthritis market. Nature reviews. Drug discovery, 8(9), p693. 56 Alamanos, Yannis, Paraskevi V. Voulgari, and Alexandros A. Drosos. 2006. Incidence and Prevalence of Rheumatoid Arthritis, Based on the 1987 American College of Rheumatology Criteria: A Systematic Review.” Seminars in Arthritis and Rheumatism 36 (3): 182–88. doi:10.1016/j.semarthrit.2006.08.006. 57 Areskoug-Josefsson, Kristina, and Ulrika Oberg. 2009. “A Literature Review of the Sexual Health of Women with Rheumatoid Arthritis.” Musculoskeletal Care 7 (4): 219–26. doi:10.1002/msc.152 58 Ahlmén, M, B Svensson, K Albertsson, K Forslind, and I Hafström. 2010. “Influence of Gender on Assessments of Disease Activity and Function in Early Rheumatoid Arthritis in Relation to Radiographic Joint Damage.” Annals of the Rheumatic Diseases 69 (1): 230–33. doi:10.1136/ard.2008.102244 59 https://www.cdc.gov/arthritis/basics/rheumatoid.htm 60 Birnbaum, “Societal Cost” (see footnote above)

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Figure 20. Sales of Top Rheumatoid Arthritis Drugs (in $ millions)

Treatment Company 2012 2013 2014 2015 2016* Cimzia UCB SA $610 $789 $1,058 $1,679 $1,728 (certolizumab pegol)

Enbrel (etanercept) Amgen $4,236 $4,551 $4,688 $5,364 $5,746

Humira (adalimumab) AbbVie $9,265 $10,659 $12,543 $14,012 $15,675

Johnson & Remicade (infliximab) $6,139 $6,673 $6,868 $6,561 $7,104 Johnson Johnson & Simponi (golimumab) $607 $932 $1,187 $1328 $1,754 Johnson *Projected sales for 2016

Source: Company Financial Reports

Clinical Discussion

Phase I Trial. The safety of intravenous FR104 was evaluated in 64 healthy subjects in a completed Phase I study. 61 This trial reported a good safety profile without any serious adverse effects for the trial duration of 113 days. Janssen Biotech, through a licensing agreement with OSE Immunotherapeutics, is responsible for developing FR104. OSE Immunotherapeutics plans to launch a Phase II clinical trial evaluating FR104’s efficacy in 2018.

Trial Design. OSE Immunotherapeutics conducted a randomized, double-blind, placebo controlled Phase I study, which was the first ever to evaluate the safety of FR104 in healthy subjects. Cohort A enrolled 22 subjects that were randomized into 4 groups to receive a single ascending dose (SAD) of 0.005 mg/kg, 0.05 mg/kg, 0.2 mg/kg, or 0.5 mg/kg of FR104. In each group, at least one subject was also randomized to receive placebo control. Cohort B randomized 28 subjects into four groups to be challenged with keyhole limpet hemocyanin (KLH) and receive on the same day either 0.5 mg/kg, 0.2 mg/kg, 1.5 mg/k, or 0.02 mg/kg of FR104.

Lastly, a separate multiple ascending cohort (MAD), enrolled 14 subjects to receive two doses, separated by 28 days, of either 0.2 mg/kg or 0.5 mg/kg of FR104. The primary endpoints at 4 months was safety as measured by adverse events. This includes the incidence, severity, timing, seriousness, and any abnormal laboratory biomarkers. Secondary endpoints included measuring FR104’s pharmacokinetic and pharmacodynamic properties, the presence of any activated T-cell cytokine responses, and the generation of anti-FR104 or anti-KLH antibodies.

61 Poirier, N. et al., 2016. First-in-Human Study in Healthy Subjects with FR104, a Pegylated Monoclonal Antibody Fragment Antagonist of CD28. Journal of Immunology, 197(12): pp4593-4602.

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Trial Results. No serious adverse events were reported for the 46 subjects that received any dose of FR104. 62 No study subject was withdrawn due to any treatment adverse event. The most common reported FR104 treatment related adverse event (TRAE) was a headache. Including placebo responses, most TRAEs were reported as mild or moderate. One patient developed nephrolithiasis, which was determined by the investigator not to be related to FR104 (0.5 mg/kg) or KLH administration. Another patient did not receive a second dose of FR104 (0.5 mg/kg) on day 29 due to having received in the interim a prohibited medication for the treatment of myalgia.

It should be noted that unexpected negative clinical outcomes, secondary to activated T-cell cytokine responses, have been previously reported in rheumatoid arthritis patients who received monoclonal anti-CD28 antibodies.63, 64 As shown in Figure 21, concentrations of different activated T-cell cytokines (y-axis), including: IFN-, TNF-, IL- 6, IL-8, and IL-10, were monitored over time (x-axis) for patients in Cohort A who received different single doses of FR104. In addition to Cohort A, no clinically meaningful cytokine response was observed in all groups for all cohorts, including Cohort B and the MAD cohort. The investigators also reported a similar conclusion when looking at cytokines IL 12p70, IL-1B, IL-2, and IL-4.

Figure 21. Cytokine Responses in Cohort A to Single Ascending Dose (SAD) of FR104

Source: Poirier, et al. 2016

62 Poirier, N. et al., 2016. First-in-Human Study in Healthy Subjects with FR104, a Pegylated Monoclonal Antibody Fragment Antagonist of CD28. Journal of Immunology, 197(12): pp4593-4602. 63 Suntharalingam, G. et al., 2006. Cytokine storm in a phase 1 trial of the anti-CD28 monoclonal antibody TGN1412. New England Journal of Medicine, 355(10): pp1018-28. 64 Shiao, S.L. et al., 2007. Immunomodulatory properties of FK734, a humanized anti-CD28 monoclonal antibody with agonistic and antagonistic activities. Transplantation, 83(3): pp304-13.

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Safety Profile

The field of anti-CD28 therapy has major toxicity concerns because of the history related to the anti-CD28 monoclonal antibody, TGN1412. During the first few hours after TGN1412 treatment in a Phase I clinical trial, despite positive and safe preclinical data, six healthy human subjects experienced clinical inflammatory conditions secondary to abnormal T-cell cytokine activation responses. As all 6 volunteers subsequently developed multi-organ failure and required hospitalization with ICU coverage, careful and purposeful efforts went into creating FR104 as a monovalent pegylated antibody that did not elicit similar cytokine responses in mice or baboons before reexamining its role in humans. 65,66,67 Specifically, FR104 was engineered to be a complete antagonist, without any agonist capacity, as it lacks a Fc region that could potentially activate other Fc receptors through crosslinking.

Other Drugs in Development

There are several late-stage drugs in development for the treatment of RA. Regeneron’s (NasdaqGS: REGN) sarilumab and Eli Lilly’s (NYSE: LLY) baricitinib are two product candidates with PDUFA dates in Q1 2017 and Q2 2017, respectively. Sarilumab is a monoclonal antibody targeting the interleukin-6 receptor, while baricitinib is a small molecule inhibitor of Janus (JAK) 1 and 2 kinases. In addition to Regeneron’s pivotal Phase III data showing statistically significant efficacy compared to placebo, recent data from another Phase III trial showed a mean change in disease activity score 28 – erythrocyte sedimentation (DAS28-ESR) of -3.28 at 24 weeks from baseline in sarilumab treated subjects compared to -2.20 in subjects treated with adalimumab (p<0.0001). DAS28-ESR is combined index to measure disease activity in patients with RA. Similarly, Lilly’s recently completed Phase III program with baricitinib met its primary endpoint, demonstrating superiority to placebo and active comparators after 12 weeks of treatment based on ACR20 response. We highlight the design and results of these trials in the section below. Figure 22 lists programs in Phase III development or later for the treatment of RA.

65 Suntharalingam, G. et al., 2006. Cytokine storm in a phase 1 trial of the anti-CD28 monoclonal antibody TGN1412. New England Journal of Medicine, 355(10): pp1018-28. 66 Poirier, N. et al., 2012. Preclinical efficacy and immunological safety of FR104, an antagonist anti-CD28 monovalent Fab' antibody. American Journal of Transplant, 12(10): pp2630-40. 67 Poirier, N. et al., 2014. Advantages of Papio anubis for preclinical testing of immunotoxicity of candidate therapeutic antagonist antibodies targeting CD28. MAbs, 6(3): pp697-707.

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Figure 22. Late-Stage Rheumatoid Arthritis Drugs in Development

Drug Company Status in RA Regeneron (NasdaqGS: REGN) & Sarilumab Q1 2017 PDUFA date Sanofi (NYSE: SNY) Eli Lilly & Company (NYSE: LLY) & Baricitinib Q2 2017 PDUFA date Incyte (NasdaqGS: INCY) Abbvie Upadacitinib Ongoing Phase III68 (NYSE: ABBV) Johnson & Johnson Sirukumab Ongoing Phase III trials69,70 (NYSE: JNJ)

Filgotinib Giliead Ongoing Phase III trials71,72,73

Source: LifeSci Capital

Regeneron Pharmaceuticals – Phase III Program for Sarilumab in Rheumatoid Arthritis

Trial Design. Regeneron Pharmaceuticals is currently conducting the MONARCH study, a randomized, double- blind, parallel-group study assessing the efficacy and safety of sarilumab monotherapy versus AbbVie’s (NYSE: ABBV) Humira (adalimumab) monotherapy in patients with RA.74 The inclusion criteria for the study were subjects diagnosed RA for 3 months or more who were intolerant of methotrexate, or after at least 12 weeks of continued methotrexate treatment, or inadequately responders treated with methotrexate at an adequate dose for at least 12 weeks. 369 patients were randomized to receive subcutaneous injection of sarilumab or the comparator, adalimumab, every two weeks for 24 weeks. The primary endpoint for this trial was change from baseline in DAS28- ESR after 24 weeks of treatment.

Trial Results. On November 16, 2016 Regeneron announced updated results from the MONARCH trial demonstrating the superiority of sarilumab versus adalimumab monotherapy in improving clinical signs and symptoms of RA. Figure 23 shows the mean difference in DAS23-ESR after 24 weeks of treatment. 200 mg of sarilumab was found to be superior to 40 mg of adalimumab (p<0.0001). In addition to a change in DAS28-ESR, secondary endpoints measuring criteria outlined by the American College of Rheumatology; ACR20, ACR50, and ACR70 were used to measure improvement. These metrics represent an improvement of 20%, 30%, and 70%, respectively, in tender and joint count, as well as other standardized clinical parameters. 72% of the sarilumab group achieved ACR20 at 24 weeks compared to 58% adalimumab treated patients (p<0.01). At week 24, a proportion of sarilumab treated patients experienced ACR50 and ACR70, compared to adalimumab treated subjects (p=0.0017 and p=0.0036, respectively).

68 https://clinicaltrials.gov/ct2/show/NCT02629159 69 https://clinicaltrials.gov/ct2/show/NCT01604343 70 https://clinicaltrials.gov/ct2/show/NCT01606761 71 https://clinicaltrials.gov/ct2/show/NCT02873936 72 https://clinicaltrials.gov/ct2/show/NCT02886728 73 https://clinicaltrials.gov/ct2/show/NCT02889796 74 https://clinicaltrials.gov/show/NCT02332590

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Figure 23. MONARCH Results Comparing Sarilumab to Adalimumab

Endpoint Adalimumab 40 mg Sarilumab 200 mg Mean change in DAS28- -2.20 -3.28 P<0.0001 ESR (24 weeks) Score ACR20 response 58% 72% P<0.01

ACR50 response 29% 45% P=0.0017

ACR70 response 11% 23% P=0.0036

Source: LifeSci Capital

Safety. Both groups showed a 64% incidence of adverse effects, with 5% of sarilumab treated subjects experiencing serious adverse effects compared to 7% of the adalimumab treated subjects. The incidence of infection was similar between groups. Neutropenia and injection erythema was higher in sarilumab treated subjects, 14% and 8%, respectively, compared to the adalimumab group, 1% and 3%. In general, the overall incidences and seriousness of adverse effects were similar between groups.

Eli Lilly & Incyte – Registration Program for Baricitinib in Rheumatoid Arthritis

Trial Design. Eli Lilly and Incyte conducted two randomized, double-blind, active- and placebo-controlled Phase III trials with baricitinib in patients with moderate to severe RA.75,76 These studies, named RA-BEGIN and RA- BEAM, were designed to evaluate baricitinib as a first-line treatment for RA.

584 subjects were randomized 1:1:1 to baricitinib 4 mg, baricitinib 4 mg plus methotrexate, or methotrexate alone. The primary endpoint was the proportion of patients achieving ACR20 at week 24. In the RA-BEAM study, 1,304 subjects were randomized 1:1:1 to baricitinib 4 mg plus subcutaneous placebo, oral placebo plus 40 mg Humira (adalimumab), or oral placebo plus subcutaneous placebo. The primary endpoint was the proportion of patients achieving ACR20 at 24 weeks.

Trial Results. Eli Lilly announced positive results for RA-BEGIN and RA-BEAM studies. The RA-BEGIN trial met the primary endpoint of baricitinib’s non-inferiority to methotrexate, as determined by ACR20 response at 24 weeks. Treatment groups improved in all of the metrics that compose the ACR score, including swollen and tender joints, pain, and patient and physician assessments. The RA-BEAM study also met its primary endpoint, demonstrating baricitinib’s superiority to placebo.

Safety. The frequency of treatment-emergent adverse events (TEAE) was similar between treatment groups. The safety findings of these studies were consistent with prior studies.

75 https://clinicaltrials.gov/ct2/show/NCT01710358 76 https://clinicaltrials.gov/ct2/show/NCT01711359

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Effi-7: A Potential Role for an IL-7 Antagonist in the Treatment of Autoimmune Diseases

The incidence of autoimmune diseases is rising, with an estimated 50 million adults in the US currently suffering from different autoimmune diseases such as rheumatoid arthritis (RA), ulcerative colitis (UC), systemic lupus erythematosus (SLE), and fibromyalgia.77 In light of these numbers and the paucity of drugs that successfully treat autoimmune diseases, there is a clear and significant unmet medical need for innovative therapeutics. As there are increasing numbers of reports demonstrating abnormal IL-7 function and/or signaling in numerous autoimmune diseases, there is a clear rationale for OSE’s development of Effi-7, a humanized monoclonal antibody that targets the CD127 receptor, also known as interleukin-7 receptor-alpha.78,79,80 On December 26th, 2016, OSE announced a licensing agreement with Servier for the development and commercialization of Effi-7.

Effi-7 Demonstrated Efficacy in Preclinical Model of Ulcerative Colitis

OSE Immunotherapeutics reported promising preclinical data at the Federation of Clinical Immunology Societies in June of 2016 using Effi-7. 81 As mentioned above, pathological concentrations of IL-7 are found in UC. As IL-7 is an inducer of the integrin ⍺4-ß7 in human T-cells, and ⍺4-ß7 is the main intestinal lymphocyte homing receptor, IL- 7 mediated ⍺4-ß7 upregulation is one mechanism for pathogenic T-cells to infiltrate the bowel in UC. This leads to inflammatory damage to colon mucosa. This provides the rationale for developing Effi-7, which blocks IL-7R. OSE’s preclinical results show that IL-7R antagonism using Effi-7 in an animal model of UC prevented ⍺4-ß7 upregulation.82 These results setup Effi-7 as a potential treatment option for inflammatory bowel disease and other autoimmune conditions and support further investigation for IL-7R antagonism using Effi-7 in the clinical.

Effi-DEM: A Next-Generation Checkpoint Inhibitor

Immunesuppression of the microenvironment by T regulator cells is one of the ways in which cancers evade immune surveillance in the tumor microenvironment. In addition to the immune suppressive effect of T regulatory cells, myeloid derived suppressor cells (MDSC) inhibit immune surveillance by silencing the response of cytotoxic lymphocyte and T helper lymphocytes, while concomitantly promoting the generation of regulatory T cells. 83 MDSCs secrete IL-10 and transforming growth factor beta (TGF-), which ultimately inhibit anti-tumor immune effects. Tumor associated macrophages with suppressor functions are also recruited to the tumor microenvironment and allow tumor growth.

77 http://www.cdc.gov/arthritis/data_statistics/arthritis_related_stats.htm 78 van Roon, J.A. et al., 2005. Increased intraarticular interleukin-7 in rheumatoid arthritis patients stimulates cell contact- dependent activation of CD4(+) T cells and macrophages. Arthritis Rheumatology, 52(6): pp1700-10. 79 Harrison, C., 2012. Autoimmune disease: Targeting IL-7 reverses type 1 diabetes. Nature Review Drug Discovery, 11(8): pp599. 80 Liu, X. et al., 2010. Crucial role of interleukin-7 in T helper type 17 survival and expansion in autoimmune disease. Nature Medicine, 16(2): pp191-7. 81 http://ose-immuno.com/site/wp-content/uploads/160627_Effi-7-Poster-FOCIS_EN_final.pdf 82 L. Belarif., et. al., 2016. IL-7 receptor blockage prevents intestinal human T cells infiltration by modulation of alpha4-beta7 integrin expression. FOCIS Conference; Poster Presentation. 83 Vanneman, M., et. al, 2012. Combining immunotherapy and targeted therapies in cancer treatment. Nature Reviews, Cancer. 12. pp. 237-251

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At the moment, there are no targeted therapies directed toward downregulation of MDSC or tumor associated macrophages. Identification of therapies to attenuate these immunosuppressive networks could ultimately improve the efficacy of established immunotherapies. OSE is developing, Effi-DEM, a monoclonal antibody that targets signal regulatory peptide alpha (SIRP-), which is expressed in myeloid and macrophage suppressor cells and is part of the SIRP-/CD47 pathway. Increased expression of CD47 correlates with poor prognosis in AML as well as various solid tumors.84 As depicted in Figure 24, increased expression of CD47 on tumor cells results in the induction of immunosuppressive effects by MDSCs and tumor associated macrophages within the tumor microenvironment. OSE Immunotherapeutics developed Eff-Dem to directly bind SIRP- on MDSC and tumor associated macrophages leading to the induction of markers associated with inflammatory macrophages resulting in subsequent phagocytosis of cancerous cells.

Figure 24. Mechanism of Action for Effi-DEM

Source: Company Presentation

84 Willingham, J., et al., 2012. The CD47-signal regulatory protein alpha (SIRPa) interaction is a therapeutic target for human solid tumors. PNAS. (109)17. pp 6662-6667.

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Preclinical Data

Blocking the SIRP-/CD47 pathway has been proposed as a way to treat both hematological malignancies and solid tumors.85 In this section we present data supporting the use of the anti-SIRP- antibody Effi-DEM as a therapy to treat solid tumors. To evaluate the effects of SIRP- blockade on markers associated with macrophages, researchers used an in vitro rat MDSC model and treated cells with either a SIRP- monoclonal antibody or a control antibody over a 48h time period and subsequently assessed markers associated with M1 macrophages. Treatment led to an increase in markers and cytokines associated with M1 inflammatory macrophages compared to control, suggesting SIRP- was able to differentiate MDSCs to the M1 macrophage lineage.86

Researchers also investigated the in vivo effects of SIRP-/CD47 blockade using anti-SIRP- therapy in an orthotopic mouse model of mammary carcinoma. Mice were treated with either a SIRP- monoclonal antibody or a control antibody three times per week over a one month period and measured tumor volume. Tumors in SIRP- treated animals grew at slower rate compared to control treated animals, suggesting beneficial effects of anti-SIRP- therapy in this setting.87

In addition to immunosuppressive effects of regulatory T-cells and MDSCs, T cells activate negative regulatory signals, such as PD-1, in order to further dampen immune surveillance. Antibody mediated targeting of PD-L1 is attractive in this setting as it may enhance PD-1 independent immune effector functions of anti-SIRP, namely macrophage mediated activation and priming of anti-tumor T cells. This in turn could lead to enhanced selective amplification of anti-tumor T cells, which could lower the threshold of checkpoint blockade required to have antitumor effects, resulting in synergism. In an orthotopic model of hepatocellular carcinoma outlined in Figure 25, animals were treated with either a control antibody, depicted with a black line, anti-SIRP monotherapy, blue line, anti-PD-L1, green line, or anti- SIRP/anti-PD-L1combination therapy, depicted in with an orange line. The data indicate a noticeable benefit in mice treated with anti-SIRP/anti-PD-L1 combination therapy, compared to anti- SIRP monotherapy.

85 Lui, J., et al., 2015. Pre-Clinical Development of a Humanized Anti-CD47 Antibody with Anti-Cancer Therapeutic Potential. PLoS One. 10(9). pp 1-23. 86 Poirier, N. er al., 2016. Control of immune tolerance by the SIRP-CD47 pathway and Myeloid-Derived Suppressor Cells. Abstract. 87 Gauttier, V et al., 2016. Selective targeting of the SIRP immune checkpoint, but not CD47, controls polarization of macrophages. Abstract.

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Figure 25. Effect of Combined Anti-SIRP and Anti-PD-L1 Therapy

Source: Company Abstract. Gauttier, V et al., 2016.88

The promising preclinical results outlined in this study support clinical evaluation of anti-SIRP- therapy as way block the MDSC and macrophage induced immune suppression in solid tumor indications. These data argue for its evaluation combination with immune checkpoint inhibitors in hepatocellular carcinomas that are refractory to anti- PD-1 and anti-PD-L1 therapy.

Intellectual Property

Memopi and Tedopi

The Memopi technology platform and Tedopi are covered by a family of patent applications, namely WO 04/094454, filed by OSE Immunotherapeutics and include a series of issued patents set to expire in 2024. OSE Immunotherapeutics owns worldwide rights to Tedopi through its wholly-owned subsidiary, OPI. In addition to patents covering Memopi and Tedopoi, OSE Immunotherapeutics has claims to a patent covering the combination of peptides that make up Tedopi as well as a patent application covering the use of Tedopi for the treatment of advanced chemo- and radiotherapy refractory cancer. The aforementioned family of patents are supplemented by an additional set of patents covering the SMPPGTRV peptide, a component of Tedopi. OSE Immunotherapeutics recently filed a patent application covering treatment of brain metastasis in HLA-A2+ patients using T cell specific immunotherapy and an early T cell memory response, expanding the potential use of Tedopi in indications where cerebral metastasis is prevalent. Figure 26 outlines the countries covered be the forenamed patents and their dates of expiration.

88 Gauttier, V et al., 2016. Dual targeting of adaptive and innate checkpoints induce potent memory anti-tumor response. Abstract.

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Figure 26. Countries and Expiration Dates for Patents Covering Memopi and Tedopi

Patent Expiration Countries Covering Memopi technology and Tedopi Europe, US, (OSE2101) and the composition of CTL April 2024 Canada, Japan, peptides optimized for enhanced binding to and Australia HLA-A2 receptor November 2034 November 2035 Application covering T-cell immunotherapy International, (Argentina) in HLA-A2+ brain metastasis Argentina, Taiwan October 2035 (Taiwan) Covering T-immune therapy inducing an early T-cell memory response in HLA-A2 June 2035 International patients June 2019 Covering a peptide encoding SMPPPGTRV (Europe) Europe and US June 2018 (US)

Source: OSE Immunotherapeutics

FR104

OSE Immunotherapeutics owns 7 issued patents covering FR-104, its preparation, the technology surrounding selection of the antibodies directed toward the CD28 receptor, as well as humanized antibodies derived from CD28.3. The expiration for these patents and their ownership are outlined in Figure 27.

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Figure 27. Patent Families Covering FR104

Patent Family Expiration Countries Ownership FR-104 Family 1 US, France, Japan Covering antibodies related to CD28.3 December 2021 INSERM Europe Family 2 Japan (Issued), US Covering preparation of a recombinant January 2030 and Canada OSE and INSERM monovalent derivative of CD28.3 (pending) Family 3

Covering technology used for the selection October 2030 Europe and US OSE and INSERM a monovalent ligand of the CD28 receptor

Family 4 Covering for humanized antibodies derived February 2031 OSE and INSERM from CD28.3

Source: OSE Immunotherapeutics

OSE Immunotherapeutics also has patent applications under review for their remaining clinical assets, which cover anti-IL-7R antagonist antibodies and antibodies recognizing a conformational epitope on IL-7R. The Company also has a methods and composition patent application for the use agents to block the interaction between the signal regulatory protein alpha and at least one of its ligands in order to induce differentiation of myeloid derived suppressor cells to treat cancer and infectious diseases.

Management Team

Dominique Costantini, MD Chief Executive Officer

With more than 20 years of experience in the pharmaceutical industry, Dr. Dominique Costantini has overseen many therapeutic innovations in the international framework of oncology. Throughout her career, she held a of management positions within HMR, now Sanofi Aventis, where she led medico-marketing activities to commercialize products (notably in immunology, endocrinology, infectious illnesses and oncology). While there, Ms. Costantini also participated in the development of various medicines, from conception to product approval and commercialization.

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In 1997, Ms.Costantini founded BioAlliance Pharma, where she held the position of Chief Executive Officer until 2011 and during which time, she led BioAlliance Pharma’s IPO on Euronext in 2005. BioAlliance Pharma originated Livatag, an anti-cancer nanotechnology in primary liver cancer, currently in Phase 3 in Europe and the US. In her experience, Ms. Costantini has been the source of many international industrial partnerships within Europe, US, China, Japan, and Korea. To date, BioAlliance Pharma, now Onxeo, is the only French biotechnology company to have two FDA drug approvals. In 2012, Ms. Costantini co-founded and led OSE Pharma as Chief Executive Officer. Dr. Dominique Costantini is a doctor at Paris V University, where she specializes in immunology.

Maryvonne Hiance Vice Chairman and Director of Strategy

Maryvonne Hiance specializes in nuclear science and served as manager of neutron studies at FRAMATOME for 14 years. Over a 20-year period, she held the position of general manager at innovative biotechnology companies including SangStat Atlantic, DrugAbuse Sciences and TcLand. Ms. Hiance also founded and served as general manager of Strategic Ventures, a consulting company providing support to technological companies. Ms. Hiance has been a member of the French Strategic Council for Innovation and has served as advisor to the French small and medium sized entrepreneurships and industry ministry.

In 2008, Ms. Hiance co-founded and served as Chairman of the Board of Effimune, a biotechnology company specialized in immune regulation with clinical applications in autoimmunity, transplantation and immune-oncology. In addition to Vice Chairman of the Board of OSE Immunotherapeutics, Ms. Hiance also serves as strategy advisor to the company’s Management. Ms. Hiance holds an Engineering Degree from the Ecole Polytechnique Feminine, Paris, and a Nuclear Engineering Degree from the Institut des Sciences et Techniques, Grenoble.

Alexis Peyroles Chief Operating Officer, in charge of Finance, Business Development and Operations

Alexis Peyroles has more than 15 years of management and financial experience. Alexis Peyroles joined Sanofi- Aventis in 1996, working first as Financial Controller in Japan before becoming Head of financial control for the Baltic states. He was subsequently named Head of activities for business development in Eastern Europe. In 2005, he joined the Guerbet group, as financial control Manager, and in 2009, became Chief Executive Officer for Latin America.

In 2013, Alexis Peyroles became as Chief Financial Officer of OSE Pharma and was in charge of business development. Upon the merger of OSE Pharma with Effimune in May 2016, he was appointed Chief Operating Officer of OSE Immunotherapeutics, in charge of Finance, Business Development and Operations. Alexis Peyroles graduated from EDHEC Business School and holds an Imperial Executive MBA.

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Bernard Vanhove Chief Operating Officer, in charge of R&D and International Scientific Collaborations

Prior to joining OSE Immunotherapeutics Bernard Vanhove gained extensive scientific experience as an investigator at the Research Institute of Sandoz in Vienna, Austria. He currently serves as Research Director at the French National Scientific Research Institute, the National Institute for Health and Medical Research, and the Institute of Transplantation in Immuno-urology. He has also conducted research activities at the European Center for Transplantation and Immunotherapy Sciences.

In 2013, Bernard Vanhove was awarded a Prize from France Transplant for his pharmacological preclinical studies evaluating the efficacy of FR104, a pegylated monovalent anti-CD28 Fab antibody in immunology. Moreover, he was the coordinator of the European FP7 network Tolerance Restoration in Autoimmune Diseases (TRIAD) in autoimmune diseases. He is the author of more than 80 international publications in the area of immune restoration. In 2008, Bernard Vanhove co-founded Effimune, and became Chief Executive Officer in July 2014. Upon the merger of Effimune with OSE Pharma in May 2016, he was appointed Chief Operating Officer of OSE Immunotherapeutics, in charge of R&D and International Scientific Collaborations. Bernard Vanhove holds a Ph.D. in Immunology from the Louvain University in Belgium.

Risk to an Investment

We consider an investment in OSE Immunotherapeutics to be a high-risk investment. OSE Immunotherapeutics is a development stage company with no history of taking a treatment to market and currently has no FDA or EMA approved drugs in its portfolio. The Company’s clinical programs have not yet completed Phase III trials. Furthermore, early indications of efficacy do not necessarily translate into positive late-stage results. Ongoing clinical trials will result in significant additional expenses to the Company and may require additional rounds of dilutive financing. As with any company, OSE Immunotherapeutics may be unable to obtain sufficient capital to fund planned development programs. There are regulatory risks associated with the development of any drug and OSE Immunotherapeutics may not receive FDA or EMA approval for its candidate despite significant time and financial investments. Regulatory approval to market and sell a drug does not guarantee that the drug will penetrate the market, and sales may not meet expectations.

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