FWP 1 a5584629.txt OPEXA THERAPEUTICS, INC. FWP Filed Pursuant to Rule 433 Registration Statement No. 333-147167 January 14, 2008 Opexa Therapeutics, Inc. Following is a transcript of a physician question and answer video regarding Tovaxin made available by Opexa Therapeutics, Inc.: Disclaimer The statements made by the physicians in this video, including any statements regarding various drugs and treatments, are their personal opinions and observations and are not the opinions or statements of their respective institutions or of Opexa Therapeutics, Inc. Further, the statements in the video should not be considered medical advice and you should consult your own physician regarding any personal medical problems. The information discussed related to our product candidate is preliminary and investigative. 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The following video contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the use of forward-looking terminology, including "may," "believe," "will," "expect," "anticipate," "estimate," "plan," "intend," and "forecast," or other similar words. Statements contained in this video are based upon information presently available and assumptions believed to be reasonable. We are not assuming any duty to update this information should those facts change or should we no longer believe the assumptions to be reasonable. Investors are cautioned that all such statements involve risks and uncertainties, including without limitation, statements concerning the causes of diseases, the effects of various treatments, the timing and outcomes of clinical trials and anticipated scientific developments. Actual facts and results may differ materially. Important factors that may cause actual results to differ include, but are not limited to: new scientific understandings of diseases, the actual effects of treatments as determined by valid clinical trials and changes in regulatory requirements. For a detailed discussion of these and other cautionary statements, please refer to the Company's most recent filings with the SEC, including its Form 10-KSB for the fiscal year ended December 31, 2006. 1 2 TRANSCRIPTION OF DVD 3 4 5 6 7 8 9 10 11 12 13 By: Denise Ganz Byers, CSR/RPR/RMR/CRR Allied Advanced Reporting, Inc. 14 1647 Colquitt Street Houston, Texas 77006 15 Phone: 713.524.6777 Fax: 713.524.6888 16 aari@alliedadvancedreporting.com 17 18 19 20 21 22 23 24 25 2 1 QUESTION: What is multiple sclerosis? 2 DR. EDWARD FOX: Multiple sclerosis is 3 an autoimmune disease, and like other autoimmune 4 diseases there are specific targets that are 5 involved. 6 In this case with multiple sclerosis, 7 the target is myelin that's on the surface of the 8 nerve cells, the axons or the connecting wires that 9 are within the brain and the spinal cord. 10 And so the symptoms of multiple 11 sclerosis, whether it be weakness or numbness, 12 coordination problems, vision problems or many other 13 symptoms that can occur, may occur either 14 sporadically, coming and going, or can be a 15 continuous course. 16 So multiple sclerosis is not truly one 17 disease. There are several types of MS. 18 What's being looked for in this clinical 19 trial are those patients who have relapsing-remitting 20 disease. And that means they'll have a flareup of 21 symptoms and then that flareup may or may not improve 22 over time, and that's called a remission if there is 23 improvement. 24 Relapsing-remitting multiple sclerosis 25 begins with an individual flareup. There is a 3 1 specific event that may be called a clinically 2 isolated syndrome. If a patient then goes on to have 3 new or worsening symptoms, then it's clinically 4 definite multiple sclerosis. 5 Patients with primary progressive MS do 6 not ever have these types of relapses. They just 7 have a continuous course from the beginning. 8 Our trial is designed to look at those 9 patients with relapsing-remitting multiple sclerosis 10 in an effort to reduce the number of flareups and 11 thereby prevent disability over the years. 12 QUESTION: What is multiple 13 sclerosis? 14 DR. CLYDE MARKOWITZ: In terms of what 15 is MS, we believe it to be an autoimmune reaction to 16 something, we don't know exactly if it's a virus or 17 some toxin, in genetically susceptible individuals 18 that causes their immune cells to attack their 19 myelin. 20 That myelin gets destroyed. Having the 21 myelin stripped away from the nerve cells leaves 22 those nerves nonfunctional. 23 What that ultimately does for patients 24 is it leaves them with some neurologic problems. 25 They may have loss of vision, they may have sensory 4 1 complaints, numbness, tingling, they may have 2 weakness, bladder problems, and all of these things 3 eventually lead to increasing amounts of disability 4 over time. 5 The problem with MS is that people may 6 have an attack and get better, and then after 7 repeated attacks they don't completely recover and so 8 they are left with some residual neurologic 9 disability. 10 QUESTION: What is multiple sclerosis? 11 DR. BRIAN LOFTUS: Multiple sclerosis 12 falls into a group of diseases that we call 13 autoimmune diseases. What autoimmune diseases mean 14 is the patient's immune systems, which is, of course, 15 designed to fight invading bacteria, viruses and 16 funguses and other bad things that come into your 17 body, gets confused and starts attacking parts of the 18 body. 19 So in multiple sclerosis, the immune 20 system that we think is principally confused is 21 what's called the T-cells, and those T-cells start to 22 attack the myelin. And myelin is the insulation that 23 is around, like a wire, that connects the different 24 parts of the brain together as well as the brain and 25 the spinal cord. 5 1 Unlike electricity, when you strip off 2 the insulation off a wire, the wire still works. In 3 the brain, these wires -- once the insulation is 4 stripped away, those wires no longer work. So the 5 wires themselves are called axons and the myelin gets 6 attacked. And the myelin gets attacked not on a 7 constant basis, but in a way that we don't understand 8 on sort of a periodic basis. 9 So, typically, MS will start with what 10 is termed "an attack." "An attack" just means that 11 you have a series of symptoms that suddenly develop 12 kind of out of nowhere. And common first attacks in 13 MS can be blindness, another common attack in MS can 14 be like numbness over part of the body or weakness 15 over part of the body, and everybody can be 16 different. 17 And then after you have your attack, for 18 most patients there's a period of healing and 19 patients commonly recover back to -- back to normal 20 at first. And then, unfortunately, after a series of 21 attacks, there is generally some permanent damage 22 that occurs and over time people get progressively 23 disabled. 24 How many people get disabled versus how 25 many people have a sort of automatically benign 6 1 disease is actually a very controversial subject, but 2 most people think around 10 to 20 percent of MS 3 patients, even if not treated, will do quite well in 4 their lifetimes, but the majority of MS patients need 5 therapy. 6 QUESTION: How is multiple sclerosis 7 treated? 8 DR. EDWARD FOX: The current medications 9 available that are FDA licensed for MS all work on 10 the immune system in an effort to reduce the 11 inflammatory effects seen in MS. 12 So the medications that are FDA approved 13 right now, by and large, the first-line medicines are 14 injections. There are interferons. There are three 15 different interferons that are FDA approved right 16 now, and there is glatiramer acetate, which is a 17 noninterferon drug. 18 All of these are administered by 19 injections. They can be subcutaneous injections, 20 which are just under the skin, or can be 21 intramuscular injections that are deeper injections. 22 There's a variable timeline for how 23 these medicines are given. They range from once a 24 week up to once a day. 25 On the first-line medications that are 7 1 FDA licensed right now, the benefits of them include 2 a reduction in the number of new MRI lesions or 3 larger MRI lesions. There's also a reduction in the 4 relapse rate, the frequency at which a patient may 5 have new or worsening symptoms. It has also been 6 seen in longer studies that they do have a benefit in 7 terms of reducing sustained accumulation of 8 disability as well. 9 The current medicines that are licensed 10 to treat relapsing-remitting multiple sclerosis are 11 incomplete in terms of their efficacy. There is not 12 a complete reduction in new MRI activity, there is 13 not a complete reduction in the rate of relapses or 14 prevention in disability. 15 There is a gap between where we are in 16 terms of current treatment and where we would like to 17 be in terms of assuring patients that they are not 18 going to progress over time. 19 And so the unmet need right now that we 20 have right in multiple sclerosis is that we want 21 medicines that are -- that are safe and tolerable but 22 also have a greater efficacy than the current 23 medications. 24 The safety of the first-line 25 medications, glatiramer acetate and the interferons, 8 1 is fairly good. These have been on the market long 2 enough that we're fairly certain of their safety. 3 The tolerability of the medicines is 4 somewhat limited, however, because they are available 5 in injection form that are generally 6 self-administered at home and fairly frequently 7 administered as well. So the tolerability is 8 something that has always been an issue with the 9 current medications, but the safety has been fairly 10 good. 11 There are newer agents that have been 12 FDA approved. Natalizumab is an intravenous 13 medication that has been approved generally for 14 patients who have had an incomplete response to other 15 medications, and safety has been a greater concern 16 for those medications. The reason is because the 17 stronger a medicine is on the immune system, the more 18 likely it is to suppress the normal immune system and 19 lead to an increased incidence of complications. 20 We have had incomplete ability to keep 21 patients on the current medications because of 22 tolerability issues. Injections cause local 23 reactions and can cause reactions that definitely 24 limit a patient's desire to stay on the medication. 25 We have been working very closely with 9 1 patients for a number of years to attempt to find a 2 medication that both is effective and tolerable, but 3 we have struggled with that. 4 The current therapies are fairly 5 frequent and ranging between weekly and daily and are 6 usually self-administered by the patient in the home. 7 Any medication which is given less 8 frequently is more apt to cause better compliance or 9 adherence to that therapy, because if a patient is 10 well aware of how many injections are going to be 11 necessary during the course of the treatment and what 12 the follow-up is going to be, I think that a patient 13 can enter into the research protocol or into the 14 treatment plan with expectations of continuing on the 15 therapy. 16 QUESTION: How is multiple sclerosis 17 treated? 18 DR. BRIAN LOFTUS: So the therapies we 19 have are sort of two different arms at this point. 20 We do have the acute treatment attack 21 therapy, which is steroids. So you use a high dose 22 of IV steroids or a high dose of oral steroids in 23 order to limit that first attack or some subsequent 24 attack. 25 And then we have a bunch of therapies 10 1 that we think alters the natural history of the MS 2 disease, and these therapies are, therefore, called 3 disease-modifying drugs and there are several on the 4 market. 5 The ones that are approved by the FDA 6 are Avonex, Betaseron, Copaxone and Rebif. And those 7 are simply in alphabetical order. I don't have a 8 preference among them. 9 They belong in two groups. So one group 10 is the interferons, and that's the Avonex, Rebif and 11 Betaseron; and then Copaxone is its own group. 12 And then recently a new immunomodulating 13 drug on the market is Tysabri. Tysabri is one of the 14 newer agents available. It's a broad spectrum 15 immunosuppressant that basically prevents the T-cells 16 from getting into the brain as well as some other 17 places on the body, and it's sort of the first of a 18 whole series of new drugs that sort of approach the 19 treatment of MS the same way, and that's to keep part 20 of the immune system out of the brain. 21 The upside is they are very powerful 22 drugs and they work extremely well. The downside is 23 they may cause lots of serious side effects. In 24 fact, Tysabri was pulled off the market for a period 25 of time because of one of these side effects. 11 1 The final drug that's available now is 2 Novantrone. It is the only agent that is really used 3 for secondary progressive MS, and it does seem to 4 help patients for the couple of years that they can 5 take it. Unfortunately, because of the toxicity of 6 this drug, its use is limited for only about two 7 years of therapy. 8 QUESTION: What are the current 9 treatments and unmet needs? 10 DR. CLYDE MARKOWITZ: Over the last 15 11 or so, maybe even 20 years, we've started to look at 12 compounds that look like they affect the immune 13 system. Not immunosuppressants, but 14 immunomodulators. And these immunomodulators 15 ultimately regulate parts of the immune system in a 16 way that prevents some of the damaging effects from 17 the inflammation that occurs in MS. 18 The Interferon products were the first 19 ones that actually came to market, and we've been 20 using them safely for the last 15 years without any 21 major problems. They reduce the number of lesions 22 that are seen on an MRI scan, they reduce clinical 23 relapses and they slow disability progression. 24 Glatiramer came to market a little bit 25 after the interferons and that also has shown the 12 1 same effects in terms of slowing the disease and 2 preventing the lesions. 3 So overall I'd say, you know, 15 years 4 into this we have some therapies, but there's a lot 5 of unmet needs. 6 First of all, all of these compounds are 7 injectable therapies. Patients have issues about not 8 wanting to take these self-injectable therapies. 9 They have side effects. You know, there are a 10 variety of issues that have to be managed. 11 And after taking injectable therapies 12 for many years, some of these injections leave people 13 with some dermatologic things. They end up with some 14 loss of the normal skin and they end up with little 15 divots that end up creating cosmetic problems for 16 them. 17 After injecting many years, you get scar 18 tissue below the injection sites, and that makes it 19 more difficult to actually inject and can be more 20 painful. 21 From an efficacy standpoint, you know, 22 the therapies that we currently use are modest in 23 their effects. You know, they reduce the activity on 24 MRI and they reduce clinical relapses, but patients 25 still have attacks and still have new lesions, so 13 1 over time there's breakthrough disease activity. 2 We as investigators have to look for new 3 compounds that will be easier to tolerate, more 4 effective and, you know, ultimately compliance will 5 be better. 6 QUESTION: What is Tovaxin? 7 DR. EDWARD FOX: The concept of Tovaxin 8 is very different than existing medications because 9 it is tailored to an individual. It is not a 10 medication that is exactly the same one person to the 11 next. 12 When looking at somebody's immune 13 system, which is extraordinarily complicated and 14 quite variable from one person to the other, it's 15 reasonable to assume that the type of cells that are 16 causing MS in one person may not be exactly the type 17 of cells that are causing the disease in another 18 person, and so with the concept of Tovaxin we are 19 hopefully tailoring it to the individual. 20 The way Tovaxin is made is via blood 21 products from the individual patient, and so using 22 those cells as the target for the immune system, the 23 idea is to reduce the cell count that is available 24 within a person of cells that would attack myelin and 25 thereby cause the disease. 14 1 The potential advantages of 2 immunotherapy such as Tovaxin is that it is tailored 3 to the individual. Because the variability exists in 4 the disease, it may be that targeting specific cells 5 that are causing the pathology of MS will have a 6 better outcome in terms of reducing the pathology of 7 the disease. 8 In the Tovaxin trial currently, the 9 patients are coming into the clinic to get the 10 administration of the medication and they are not 11 self-administering at home. 12 It would be expected, as with all other 13 medicines that are administered within a doctor's 14 office or some other medical facility, that 15 compliance or adherence to the therapy would be 16 easier for both the patient and the physician. 17 In the current trial of Tovaxin, there 18 are five injections that are being given, and 19 certainly we're looking at the tolerability of those 20 five injections. 21 It would be expected, given our 22 knowledge that the current injectable medications are 23 given very frequently, that a less frequently given 24 treatment for MS would be met with a greater ease of 25 administration and hopefully an equal or better 15 1 tolerability. 2 QUESTION: What is Tovaxin? 3 DR. CLYDE MARKOWITZ: So Tovaxin is an 4 interesting compound because, first of all, it really 5 relies on the patient's own cells in their body to be 6 the treatment, in essence. 7 One of the problems you look at with all 8 of the current therapies that are in development 9 right now is that safety is a concern. A variety of 10 the compounds we're testing right now may have other 11 issues, some of which are that they may develop some 12 autoimmune conditions, there may be some liver 13 toxicity, some of them are immunosuppressant, they 14 may raise risks for infections. So all of those 15 issues of safety are of big concern. 16 Where Tovaxin comes into play is that 17 right now what you're asking the patient's body to do 18 is to generate suppressor cells, and the mechanism of 19 how this drug works is kind of unique. 20 First of all, what's done is that they 21 harvest blood for patients and they first determine 22 whether or not they carry a certain level of 23 reactivity to myelin antigens. 24 If they carry that level of myelin 25 antigen reactivity a larger sample is taken, it is 16 1 grown up, those cells then get irradiated. Once they 2 get irradiated they no longer divide and they now can 3 serve as a target for the immune system, and so 4 they're given back to that patient and that patient's 5 own cells in their body will go and attack and 6 suppress these myelin-reactive cells. 7 Now, from a theoretical standpoint, it's 8 a very, very powerful way to treat a disease that you 9 don't know exactly which antigen is responsible for 10 this disease. And, you know, when you look at 11 proteins as antigens, certain sequences of the 12 protein will be important for one patient and 13 different for another patient. So if you use the 14 same protein for everybody, you may end up getting 15 some responders and some nonresponders. 16 But if you go ahead and give them a full 17 panel of all of the available proteins, you let that 18 patient's immune cells pick the ones that they're 19 reactive to, they grow up against that and then those 20 are the ones that you're going to use as the, so to 21 speak, target for their own cells to suppress. 22 So what's believed to be happening in MS 23 is that there must be some sort of a regulatory loop 24 that keeps these myelin-reactive cells in check in 25 most people normally. If you lose that suppressor 17 1 activity, they can grab hold and cause activity and 2 disease, and there have been studies over the years 3 that have shown that MS patients lack some suppressor 4 activity. 5 So, the strategy with Tovaxin is to go 6 ahead and try and boost that suppressor activity, and 7 the way it's done is by saying these are the 8 myelin-reactive cells, these are the ones that we 9 need to get suppressed, we can boost their 10 suppression by giving the patient large quantities of 11 it. 12 But since they can't divide or react 13 because they've been irradiated, you're just 14 stimulating those suppressor cells to develop, they 15 can then go in to the brain and go ahead kill the 16 cells that are normally driving the immune response. 17 So I'm an investigator for the clinical 18 trial that's ongoing right now in a Phase II study 19 and, you know, there have been some initial hurdles 20 that we've had to deal with in terms of harvesting 21 the blood, making sure that, you know, patients get 22 their vaccination, but in reality it's gone pretty 23 smoothly. So I'm hopeful that this will be a 24 therapeutic intervention that will move forward. 25 QUESTION: What is Tovaxin? 18 1 DR. BRIAN LOFTUS: The company takes the 2 patient's blood and identifies the T-cell clones that 3 are responsible for causing the multiple sclerosis in 4 the patient. 5 These T-cells are then multiplied up and 6 they are then irradiated and made them -- and are 7 made inactive and are then given back to the patients 8 in very large amounts, and then the rest of the 9 immune system recognizes these T-cells as being sort 10 of like an invading T-cell and then the rest of the 11 T-cells then attack these T-cells. So it's thought 12 to be like a T-cell vaccine where you trigger the 13 immune system to then attack these T-cells. 14 The biggest advantage of a product like 15 Tovaxin is that it is very narrowly targeting the bad 16 part of the immune system. So all of our therapies 17 for multiple sclerosis target whole classes of the 18 immune system that are felt to be important in the 19 multiple sclerosis disease, but are probably 20 important in defense against disease as well. 21 In the case of Tovaxin, we are 22 especially targeting those immune cells that are 23 causing the damage with very little relative effect 24 to the rest of the immune system. So the side effect 25 profile from an immune system standpoint should be 19 1 very good with this kind of therapy. 2 The other advantages would simply be the 3 relatively few number of treatments in a year a 4 patient would need compared to taking the current 5 drugs that require injections from once a week to 6 every day and the ability to potentially put the 7 disease into remission for extended lengths of time. 8 QUESTION: What are the results of the 9 PhaseI/II dosing study? 10 DR. BRIAN LOFTUS: I have been the 11 principal investigators on two studies for Tovaxin. 12 The first of these was a dose-ranging 13 study to determine how much of these T-cells should 14 be given back to the patient as the vaccine. And 15 basically in this study there was three groups, a low 16 group, a mid group and a high group, and there were 17 approximately five patients in each group. 18 And what we did is we injected them with 19 T-cell vaccine at different doses and we measured the 20 number of bad T-cells that we could find. And over 21 the course of a year, it was determined that clearly 22 the mid dose and the higher dose did a better job of 23 eliminating the bad T-cells than the low dose. 24 Technically, it's easier to make the mid dose than 25 the high dose, so the future studies have gone 20 1 forward using the mid dose. 2 In the dose-escalation study, this group 3 of patients is entering an experimental protocol and 4 are the first ones to receive a vaccine of this type. 5 So if you can put your shoes in the patient's shoes, 6 what kind of patient would want to come into a study 7 like that, and basically it's people who have tried 8 the other treatments that are available and they have 9 not been helped by them. 10 So in order to get into the initial 11 dose-escalation study, you had to have failed 12 multiple other therapies for your multiple sclerosis. 13 Because of that, these patients are relatively far 14 along and most of them were quite disabled. 15 This in contrast to the TERMS Study and 16 to where we would ordinarily think that we would look 17 to use Tovaxin in the future, which is when people 18 are in that early relapsing phase before they become 19 disabled. But having said that, those are the kind 20 of folks that are studied. 21 So what we'd found over the year in all 22 groups was that the T-cell vaccine Tovaxin did 23 accomplish what was expected of it, namely that it 24 eliminated or at least decreased, in the case of the 25 low dose, the bad T-cell lines that we were targeting 21 1 to be -- to be eliminated by the Tovaxin. 2 So if the theory is correct that these 3 bad T-cells cause the MS attacks, then Tovaxin, by 4 eliminating those bad T-cells, would be thought to 5 prevent those MS attacks. We did find that the 6 number of MS attacks did drop among those patients as 7 well. 8 The study is five patients in each group 9 and, therefore, it's a very small study. Also, to 10 see changes in disability generally take longer than 11 one year, so there was a trend toward some improved 12 disability, but nothing that was statistically 13 significant, but given the small numbers of patients 14 involved, that is not a surprise. 15 QUESTION: What are the results of the 16 Phase I/II retreatment study? 17 DR. BRIAN LOFTUS: The second study, 18 which I was an investigator on, was a study to treat 19 patients who'd previously had another kind of T-cell 20 vaccine. So Tovaxin is referred to as a trivalent 21 vaccine because it has T-cells potentially in three 22 different myelin components. Older T-cell vaccines 23 had only one or two. 24 In this case, we used patients who had 25 had a T-cell vaccine that we would refer to now as a 22 1 monovalent vaccine who had done well with that 2 vaccine who desired to be vaccinated again, to come 3 in and follow a group of them along over time. 4 The advantage of this was to see if we 5 could show that, even after having had prior T-cell 6 vaccine, would Tovaxin still be helpful for this 7 group of patients. 8 What was demonstrated, again using the 9 mid dose that was determined from the first study, is 10 that we can -- we can eliminate the bad T-cells from 11 patients who had had prior T-cell vaccines as well. 12 The extension study patients were chosen 13 from a pool of patients who had previously received 14 monovalent vaccine and then after they no longer had 15 access to the vaccine has had a recurrence of their 16 MS symptoms. 17 And these patients were successfully 18 treated with Tovaxin and their T-cell counts did go 19 down dramatically. And actually in this group, even 20 though it was a one-year study only, a significant 21 percentage of them actually had improvement in their 22 disabilities course as well. That's somewhat of a 23 surprise given, again, a very small study and a short 24 length of time. 25 23 1 QUESTION: What is the TERMS Phase IIb 2 Study? 3 DR. EDWARD FOX: I'm the lead 4 investigator for the TERMS trial, the Phase IIb 5 trial, regarding Tovaxin treatment of early MS. This 6 is a trial that is investigating whether Tovaxin is a 7 clinical benefit to those patients who have been 8 newly diagnosed with multiple sclerosis or have had a 9 clinically isolated syndrome where they have very 10 high risk of converting to clinically definite 11 multiple sclerosis. 12 The design of the trial was to 13 investigate whether these patients would benefit, 14 first of all, in terms of reduction on new lesions 15 seen on MRI of the brain. And so the design of this 16 trial is a double-blind, placebo-controlled trial 17 where neither the patients nor I know whether the 18 Tovaxin or a placebo is being administered as an 19 injection. 20 We're following these patients with 21 serial MRIs and the primary end point that we're 22 looking for is reduction in development of new 23 enhancing lesions seen on MRI for the patients who 24 are receiving Tovaxin when compared to those patients 25 receiving the placebo. 24 1 In a Phase IIb trial that is designed to 2 be a fairly short-term, maybe one year in this trial, 3 other trials go on as long as two years, you're 4 looking for a surrogate marker for disease activity. 5 You're looking for a way to see how a patient is 6 doing without necessarily having to wait until they 7 have sustained accumulation of disability. 8 There have been a number of trials 9 looking at MRI markers as a measure of disease 10 activity and it certainly has been found that the 11 more enhancing lesions a patient has early in the 12 course of the disease, the more likely they are to 13 have another relapse or to have a clinical change 14 early in the course of the disease. So at this stage 15 what we're looking for in the Phase IIb trial is a 16 reduction in new MRI activity. 17 The earliest stages of any trial are 18 usually to determine the appropriate dosing of an 19 agent that's being used and also be able to look 20 preliminarily at markers that can be used to follow 21 patients to determine whether they're having a 22 clinical benefit. 23 And so the earlier trials that were done 24 on Tovaxin were used to help design this trial to 25 determine when the injections should be performed and 25 1 when the MRI should be performed in order to see a 2 clinical benefit. 3 Safety issues are always a concern in 4 any clinical trial, so that is being monitored 5 carefully in this trial and will be monitored as well 6 in the future. It is unknown right now whether the 7 safety profile will be better for a specified 8 immunotherapy such as Tovaxin, but it's certainly our 9 hope that we are going to target a therapy that is 10 extremely well tolerated and safe as well as 11 effective. 12 13 QUESTION: What is the TERMS Phase IIb 14 Study? 15 DR. BRIAN LOFTUS: The current TERMS 16 Study that's being run by Dr. Ed Fox is really going 17 to prove or disprove the entire concept behind 18 Tovaxin. 19 It is a double-blind, placebo-controlled 20 study where two-thirds of the patients get treated 21 with Tovaxin and one-third of the patients are 22 treated with placebo. 23 Double-blind means neither the patients 24 who are being given the vaccine or the physicians who 25 are running the study know who is getting the active 26 1 treatment and who is not. 2 In order to preserve the blind, the 3 person who is doing the vaccine injection is not part 4 of the study team. So, therefore, the doctors don't 5 have a way to know who is getting the vaccine. 6 Because it is an experimental therapy, 7 the study must be monitored by some group who, at 8 least if they needed to, would be able to know who 9 was getting the real treatment and who was getting 10 the placebo. That group is called the Disease Safety 11 and Monitoring Board, and I am the Chairman of that 12 board. 13 So we meet by phone on a periodic basis 14 and review the data from the study to ensure that the 15 study is being safely conducted and that there is no 16 reason to believe that the Tovaxin is causing any 17 harm. If there was harm that was occurring to those 18 patients who were being treated, then we would be -- 19 then we would either stop the study or change it. 20 If there is harm to an individual 21 patient because they are doing poorly, the principal 22 investigator at each site can pull any patient out of 23 the study, it really doesn't matter if they're on 24 placebo or on the active drug, but we are to ensure 25 that the entire study is going on in a safe manner. 27 1 QUESTION: What are the end points in 2 multiple sclerosis trials? 3 DR. CLYDE MARKOWITZ: Whenever -- in the 4 MS clinical trial arena we've looked at markers for 5 disease activity, and at this point, you know, 6 historically in the past, the primary end points we 7 used, at least in these three clinical trials, has 8 been relapse rates. 9 The reason why we do that is because 10 it's very objective measurable information. You can 11 count the number of relapses a patient has during a 12 trial, you can compare the placebo group to the 13 active drug group, and you can make a statement and 14 say your treatment affected the relapse rate by 50 15 percent or something. 16 The problem with doing that metric in 17 clinical trials is that it takes at least a couple of 18 years for you to gather enough information that will 19 allow you to measure it because the average rate of 20 attacks may only be one attack per year and a half or 21 so. So you need something that's a little bit more 22 frequently, you know, going to occur for you to be 23 able to measure it. 24 So MRI has evolved over the last 20 25 years or so as a very useful surrogate marker of 28 1 disease activity in MS, and in particular we've used 2 what's known as the gadolinium-enhancing lesion where 3 you can actually see areas of active inflammation in 4 the brain, you can quantitate it numerically, you can 5 also look at volume of lesions and you can say let's 6 count the number of lesions in relation to a 7 treatment. 8 And what we've actually seen where we've 9 done serial studies of MRI, even on a monthly basis, 10 is that the disease is way more active radiologically 11 than it is clinically where you may end up seeing 12 many more, maybe five to ten times more frequent 13 gadolinium-enhancing lesions than you do clinical 14 attacks. 15 So all of our Phase II trials these days 16 are using MRI as the marker of disease activity in a 17 relatively short time point, so you can actually do a 18 one-year clinical trial and be able to capture enough 19 data in that one year on MRI that it would take you 20 two years to get on a relapse from that point. 21 QUESTION: What is the potential for a 22 selective T-cell therapy? 23 DR. CLYDE MARKOWITZ: When you think 24 about some of the trials that have been done to date, 25 including compounds like Tysabri or Campath, we know 29 1 that if you can prevent these T-cells from getting 2 into the brain, you can either do that by blocking 3 entry or by actually depleting them from the 4 periphery, you end up getting a significant benefit 5 in terms of disease activity. 6 You can see it shut down MRI activity. 7 It can shut down clinical relapses to a very large 8 extent. So we know that these T-cells are, so to 9 speak, pathogenic, they are involved with 10 pathogenesis, they are definitely going to be causing 11 tissue damage. 12 So one of the strategies that you want 13 to look at is, well, can you selectively get rid of 14 these myelin-reactive cells and not necessarily give 15 you a complete blockage of all cells, because you 16 will need to have some surveillance of the brain with 17 some T-cells, you just don't want them to be reactive 18 to your myelin. 19 So that's where Tovaxin comes into play, 20 that you really are looking at a specific therapy 21 directed toward myelin reactivity and not preventing 22 all T-cells from getting into the brain. 23 When you think about having a 24 suppressive effect that you want to have to suppress 25 these immune cells, there are a couple different 30 1 strategies you can take. One would be if you knew of 2 a very specific antigen, you could target that 3 antigen, very selective. You could also have a more 4 global approach where you say, okay, let's just 5 suppress the immune system. 6 And when we've done that, you do get 7 some benefits in terms of the global approach, but 8 you also carry with that the side effect of that 9 global immunosuppression. And one of the major 10 issues are going to be what are the risks about 11 certain kinds of infection. We believe that the 12 immune system also plays a role in tumor 13 surveillance, so there may be issues on that side. 14 So we don't really like the idea of a general 15 immunosuppressant approach just because these other 16 safety issues are at risk. 17 Ideally, you want to have something 18 that's a selective approach that does not have 19 widespread immunologic effects, but is very targeted 20 to a specific area of that disease pathogenesis. 21 So if you knew that you had a selective 22 affect on myelin-reactive cells, which would keep 23 this really isolated to just the myelin, it wouldn't 24 have any effects on your liver, any effects on other 25 parts of the body or anything, you would have an 31 1 approach that would have a much better safety profile 2 because you would not be having the risks associated 3 with other immunosuppressants. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 32 1 THE STATE OF TEXAS: 2 COUNTY OF HARRIS: 3 4 I, Denise Ganz Byers, Certified Shorthand 5 Reporter in and for the State of Texas, do hereby 6 certify that the foregoing Transcription of DVD was 7 taken by me and transcribed to the best of my ability 8 from machine shorthand to typewritten form by me. 9 I further certify that the above and 10 foregoing Transcription of DVD, as set forth in 11 typewriting, is a full, true and correct transcript. 12 13 GIVEN under my hand and seal of office 14 on this, the 10th day of January, 2008. 15 16 _________________________________ 17 Denise Ganz Byers, CSR/RPR/RMR/CRR C.S.R. No. 2037, Expires 12/31/2008 18 Notary Public, State of Texas Commission expires 6/03/2010 19 Allied Advanced Reporting, Inc. 20 CRCB Firm No. 252 1647 Colquitt Street 21 Houston, Texas 77006 Phone: (713) 524 - 6777 22 Fax: (713) 524 - 6888 23 24 25