Idenix Pharmaceuticals: Building a Leading Antiviral Franchise Jean-Pierre Sommadossi, Ph.D. Chairman and CEO January 2005 Updated: 12/12/04 Safe Harbor This presentation includes forward-looking statements about Idenix and its business, including without limitation, statements regarding drug discovery, research and clinical development, regulatory approval processes and commercialization activities. These forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from our current expectations. These risks and uncertainties are detailed in our filings with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this presentation and, except as required by law, we undertake no obligation to update such statements. 2 2 Idenix – Building a Leading Antiviral Franchise MissionMission Founded in 1998 to discover, develop and commercialize innovative antiviral drugs addressing unmet medical needs in large and growing markets ProductsProducts 3 clinical stage drugs AllianceAlliance Novartis global alliance enhances commercial and financial position GlobalGlobal 150 employees at 3 locations in U.S. StructureStructure and Europe FinancialFinancial Strong balance sheet PositionPosition 3 3 Idenix Platform and Drug Discovery Capabilities A Research Engine Leading to Innovative Small Molecule Antivirals Well-definedWell-defined targets:targets: The Hepatitis B Virus Replication Cycle viralviral polymerasespolymerases DrugDrug discoverydiscovery focusedfocused ononmodified modified Entry and Uncoating building blocks of viral building blocks of viral Maturation and DNADNA && RNARNA Release (nucleoside(nucleoside analogs)analogs) MedicinalMedicinal chemistrychemistry (+) Strand DNA andand molecularmolecular telbivudine Synthesis virology/pharmacologyvirology/pharmacology forfor leadlead generationgeneration Viral andand optimizationoptimization polymerase (RT) (-) Strand DNA SpecificitySpecificity toto aa virusvirus Synthesis type type valtorcitabine 4 4 Idenix/Novartis Strategic Alliance Landmark Biotech/Pharma Deal Co-promotion and profit split in U.S. and 5 major EU countries for all licensed products – Payments to Idenix based on product sales in ROW Novartis has licensed HBV drug programs and has first right of refusal to Idenix pipeline Novartis reimburses 100% of development costs for licensed products Novartis holds ~54% of Idenix (standstill until May 2008) with 2 of 9 board seats 5 5 Building a Leading Antiviral Franchise NDA Filing for Lead Drug Candidate Expected by Year End 2005 Indication Program Preclinical Phase Ib/IIa Phase IIb Phase III Telbivudine (LdT) HBV Valtorcitabine (val-LdC) Valopicitabine (NM283) HCV NV-08 HIV NV-05 90% of antiviral nucleosides with successful Phase I/II results have led to NDA approval 1 6 Source: 1 International Antiviral News Vol.7, No.7 and Vol.8 No.1 (01/00) 6 Telbivudine – To Treat Hepatitis B Potential Best-in-class Therapy First-line therapy for chronic hepatitis B Oral administration, once daily Phase IIb results: – Achieved >6 log10 (99.9999%) viral load reduction as early as week 24 and maintained for extended treatment periods Ongoing, fully-enrolled Phase III global clinical trial Favorable safety profile in over 900 treated patients U.S. patent protection through 2019 7 7 Telbivudine - Phase IIb Trial Results Rapid and profound reduction in viral load leads to clinical benefit Telbivudine Lamivudine monotherapy monotherapy HBV DNA Reduction >6 log* 4.7 log Seroconversion 31% 22% Patients HBV DNA 61%* 32% negative by PCR Patients with emergence <5%* 21% of resistance ALT normalization 86%* 63% *p<0.05 52 Week Treatment 8 Source: Lai et al AASLD 10/03 8 Telbivudine Well-Positioned vs. Competition Telbivudine has demonstrated significant clinical benefit Comparison derived from independent clinical trials Normalization of HBeAg Undetectable Serum ALT Seroconversion Virus (Liver Function) 1 Lamivudine 15-17% 34-48% 41-72% † (Zeffix®,1998) 2 Adefovir 12% 21-26% 48% † (Hepsera®,2002) Pegasys3 32% 19%* 41% † Entecavir4 21% 69%* 78% †† Telbivudine5 31% 61%** 86% † Sources: * Measured as HBV DNA less 1 Yuen et al, Antivir. Ther. 12/03; JID 1999, 180 :1761 than 400 copies/mL CID 2002;34:1275 **Measured as HBV DNA less Lai et al N. Engl. J. Med 1998;339:61-68 than 100 copies/mL Dienstag et al N. Engl. J. Med 1999; 341:1256-1263 † Measured as < 1.0xULN 2 FDA approved label †† 3 Lau et al AASLD 11/04, Marcellin et al NEJM 2004 Measured as <1.25 x ULN 4 Chang et al AASLD 11/04 5 Lai et al AASLD 10/03 9 9 Telbivudine – Phase III GLOBE Study Largest Pivotal Hepatitis B Clinical Trial One-year results will be used for STUDYSTUDY DESIGN DESIGN worldwide marketing applications 22 yearyear headhead toto headhead trialtrial vs.vs. lamivudinelamivudine Phase III trial status – Ongoing; expected US NDA filing by 12001200 treatment-naïvetreatment-naïve year end 2005 patientspatients inin 2020 – Fully enrolled with more than 1370 countriescountries patients PrimaryPrimary endpoint:endpoint: – No pattern of patient discontinuations SerumSerum HBVHBV DNADNA due to serious adverse events; <4% <5<5 loglog1010 coupledcoupled withwith discontinued ALTALT normalizationnormalization oror lossloss ofof detectabledetectable > 90% powered for statistical hepatitishepatitis BB “e”“e” antigen antigen significance on primary endpoint 10 10 Valtorcitabine – To Treat Hepatitis B Combination Therapy to Expand Market Fixed dose combination therapy with telbivudine for difficult-to-treat chronic hepatitis B patients Oral, once daily administration Successful U.S. IND Phase I/II – Monotherapy data indicate more than 3 log10 (99.9%) viral load reduction by week 4 with optimal dosing Well-tolerated with no pattern of drug-related adverse events – over 40 patients to date Phase IIb combination program (telbivudine + valtorcitabine) underway U.S. patent (notice of allowance) protection through 2021 11 11 Chronic Hepatitis B Market Dynamics Novel Antivirals Drive Increased Diagnosis and Treatment Rates Patients Diagnosed Increases by ~10% Represents a Represents a Represents $600M WW $1B WW a $1.7B WW market market market 9% 14% 11% 91% 89% 86% 2003 2006 2009 Patients Diagnosed and Treated Drivers of Market Growth Drivers of Market Growth Patients Diagnosed but Not Treated 44 ProductProduct launcheslaunches ––Adefovir Adefovir (Asia)(Asia) ––Entecavir Entecavir && PegasysPegasys (Global) (Global) ––Telbivudine Telbivudine (Global)(Global) CombinationCombination therapytherapy ContinuedContinued premiumpremium pricingpricing CompetitionCompetition drivesdrives increasedincreased promotionpromotion 12 Sources: Idenix Internal Global Forecast Estimates, IMS, Decision Resources 12 HBV Market Research Telbivudine Profile Satisfies Unmet Needs in Market Prescribers are unsatisfied with current hepatitis B treatment options Prescribers and patients identified three key attributes as the most important for differentiating a new therapy – Potent viral load suppression – Histological improvement – Higher HBeAg seroconversion rates Prescribers are attracted to telbivudine's ability to achieve better results than current therapies – “I’m more enthusiastic about telbivudine because it’s more rapid and profound, early in treatment. More (HBeAg) seroconversion. Higher rate of PCR negativity. … It’s always better if you have a problem to solve it as soon as possible.” 13 Source: Idenix Market Research 13 Novartis Has Licensed HBV Programs 100% of Development Costs Reimbursed by Novartis LicensedLicensed hepatitishepatitis BB programsprograms (telbivudine(telbivudine andand valtorcitabine)valtorcitabine) inin MayMay 20032003 UpfrontUpfront licensinglicensing paymentpayment ofof $75$75 millionmillion UpUp toto $35$35 millionmillion inin regulatoryregulatory milestonesmilestones SalesSales milestonesmilestones Co-promotionCo-promotion andand profitprofit splitsplit inin U.S.U.S. andand 55 majormajor EUEU countriescountries forfor allall licensedlicensed productsproducts ––Payments Payments toto IdenixIdenix basedbased onon productproduct salessales inin ROWROW 14 14 Building a Leading Antiviral Franchise Most Advanced Antiviral in Development for Hepatitis C Treatment Indication Program Preclinical Phase Ib/IIa Phase IIb Phase III Telbivudine (LdT) HBV Valtorcitabine (val-LdC) Valopicitabine (NM283) HCV NV-08 HIV NV-05 90% of antiviral nucleosides with successful Phase I/II results have led to NDA approval 1 15 Source: 1International Antiviral News Vol.7, No.7 and Vol.8 No.1 (01/00) 15 Chronic HCV Market – Large and Underserved $3 Billion Market in 2003 Projected to Grow to $5.1 Billion in 20071 2.9 M2 2.7 M1 people people 1.5 M2 people U.S. EU Japan U.S. Top 5 EU Japan Treatment Avg.Cost Est. 2003 Avg. Cost Est. 2003 Avg. Cost Est. 2003 per patient2 Sales3 per patient2 Sales3 per patient2 Sales3 Pegylated- $ 13,200 $980 M $10,360 $460 M $10,490 $250 M interferon Ribavirin $ 10,000 $800 M $7,275 $310 M $11,130 $70 M 1 2 3 16 Sources: Decision Resources 05/03; CDC N Hanes III; WHO; 16 HCV Market Dynamics No Direct Antivirals on the Market TreatmentTreatment FailureFailure PatientsPatients TreatmentTreatment NaïveNaïve PatientsPatients 400,000400,000 patientspatients inin U.S.U.S. 170170 millionmillion patientspatients WWWW havehave failedfailed thethe currentcurrent areare infectedinfected withwith HCVHCV standardstandard ofof carecare ––60-70% 60-70% inin majormajor marketsmarkets ––10% 10% ofof