Investor Pitch for new treatment for depression and anxiety

1. Caurnel Morgan, PhD
CEO, President

2. Executive Summary
Problem
2
Solution
Practice
92% of drugs fail clinical trials. They have “unacceptable toxicity” or
“don’t work” ... Robert Califf, MD, Former FDA Commissioner
Select smarter drug targets.
Increase the quality and quantity of drug candidates.
Our preclinical prototypes have low toxicity and high efficacy
Treat multiple diseases with each drug.

3. Overview of Akhu Therapeutics
3
Delaware C-Corp, Oct 30, 2015
Startup, Irvine, CA
Spin-out of Texas A&M University
Location
Formation
Origin

4. Customer Need
Depression
Antidepressant
Market
Unmet Needs
4
o Increases mortality for 350M.
o It is the #1 cause of disability.
o Increases susceptibility to other diseases.
o $15B in 2015
o 30M U.S. users
o Efficacy >> Speed > Duration
o Pipeline is drying up.

5. >1000
MC5R Blockers
<100K
Compounds
5
Smarter Drug Targeting Reduces Risk

6. Selective Melanocortin Blockade in Mice
0 1 2 3 4 5
0
20
40
60
80
Vehicle
Time (weeks)
RewardInvestigation(s)
Prozac
*
MC5R Blocker
• 4X Efficacy
• 800X Speed
• 250X Potency
0 1 2 3 4 5
0
20
40
60
80
Vehicle
Time (weeks)
RewardInvestigation(s)
Prozac
*
Vehicle
MC5R[-]
*
**
**
6
DEPRESSIONDEPRESSION

7. Turner et al. (2008); Kirsch et al. (2014);
McGirr et al. (2015); Pressaud & Bruggen,
(2015); Chancellor [Forbes] (2016); The
Burrill Report (2015); Serebrin (2013);
Wikipedia (2016); Ehrensing et al. (1994);
Feighner et al. (2001)
Onset
Efficacy
Slow Mod Fast
LowModHigh
Prozac
Placebo
Trintellix
Botox
Onset
Efficacy
Slow Mod Fast
LowModHigh
Prozac
Placebo
Ketamine
Trintellix
Botox
Onset
Efficacy
MIF1
Prozac
Placebo
Ketamine
Trintellix
Slow Mod Fast
LowModHigh
Botox
Nemifitide
Representative Treatments for Depression
7

8. Melanocortin
Signal
MC3R
MC4R
MC5R
Non-selective
Melanocortin
Release Blocker Selective
MC5R
Blocker
Why Make Selective Melanocortin Blockers?
Eat More
Fight Depression
Store Fat
Fight Depression
And Anxiety
8
Melanocortin
Signal

9. Potential Adopters – Antidepressant Prescribers
Phone survey of PCPs (33 respondents) Akhu &
KGI Market Analysis Team (2015)
.
Preference(%)
Yes No
0
20
40
60
80
100
79%
21%
Would you consider switching to biologic
for depression treatment?
Adult Prescriptions
79% Adopters
$2,000/year
17.8M
2.81M
$5.62B
Agency for Healthcare Research & Quality,
DHHS, 2011; CDC, National Center for Health
Statistics (2014); Ambulatory Care Use
& Physician Office visits, NCHS, CDC,2014
20% Market Share 3.56M

10. Safe med reduces depression 60% overnight
is worth switch from antidepressants.
.
Preference(%)
S.A
gree
A
greeD
isagreeS.D
isagree
0
10
20
30
40
50
60
70
44%
41%
11%
4%
Potential Adopters Confirm Unmet Needs
10
Twitter Poll; 64 respondents (Akhu, 2016)
30M
6M
$5.28B
Depressed Adults
20% Market Share
2,000/year
CDC, National Center for Health Statistics (2014)
2.64M44% Adopters

11. Portfolio of Intellectual Property
Licensed IP
9 Patent Applications
Univ Arizona and Texas A&M Univ
1,100 Peptide MC5R Blockers
CNS Disorders
Original IP
Trade Secrets
Akhu Therapeutics, Inc
MC5R & Other Targets
Multiple Disorders
Negotiating IP
58 Patents and 14 Applications
Mimetica Pty, Ltd
1,150 Chemical MC5R Blockers
Multiple Disorders
Bonus IP
5 Patent Applications
University of Arizona
MC1R Activators
Skin Disorders
11

12. Startup Financing
Founder $50,000
Crowdfund $16,500
Total $66,500
12

13. Cost of Developing a New Drug: Tufts Center for the Study of Drug Development (2014)
Examination of Clinical Trial Costs & Barriers for Drug Development: DHHS, ASPE (2014)
Path to New Drug Application
13
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total
Phase Preclinical Phase 0 Phase 1/2 Phase 3
Patients 15 80 1,000
Milestone IND Safety POC Efficacy & Dosage NDA
Cost $0.6M $0.7M $5.3M $90.3M $96.9M

14. Akhu’s Management
Caurnel Morgan, PhD
CEO & President
Neurobiology & Physiology
27 years
Stanley Watson, MD, PhD
Scientific Consultant
Psychiatry Research
40 years
James Gibbs, MD
Medical Consultant
Psychiatry and Research
40 years
14

15. Assumption: Price point is $2,000 per year
Five-Year Financial Projections
15
Year 1 Year 2 Year 3 Year 4 Year 5
Sales $298M $570M $939M $1,254M $1,532M
Expenses $8.5M $8.8M $9.1M $9.5M $9.8M
Net Profit $284M $550M $913M $1,223M $1,495M
Customers 148,901 284,723 469,328 626,965 765,816

16. Summary
Products
Market
Need
Team
Competitive
Advantages
MC5R blockers lead our alternative treatments.
Unmet needs plague depression and other areas.
Alternative treatments are severely limited.
We have the highest level of domain expertise.
Our prototypes have potential for high efficacy,
tolerability, and ROI.
16

17. Caurnel Morgan, PhD
CEO, President
Address: 383 Shadow Oaks, Irvine, CA 92618
Tel: 949-545-9972
Email: camorgan@akhutherapeutics.com
Website: http://akhutherapeutics.com

18. Preclinical Studies, Akhu Therapeutics;
Health News (2016)
Clinical Trials:
JNJ-10229570, Janssen, NCT01492647 (2013)
MTC896, Mimetica, NCT02395549 (2016)
18
More Attributes of MC5R Blockers
Anxiety: 50M in USA
Unmet Needs: Efficacy; Safety
USA Market: $1B (2016)
Mostly generics
Acne: 40-50M in USA
Harris Williams & Co (2016)
Unmet Needs: Efficacy; Safety
USA Market: $10B (2013)
$13B (2017)

19. MC5R Blocker for Pet Separation Anxiety
Twitter Polls, Akhu (2016); Federal Trade
Commission (2015); Dodman, Tufts University
Veterinary School (2016); Braitman, Salon (2014);
Pollack, New York Times (2014); AVMA (2015)
Unmet Need: Efficacy
First Movers:
Clomicalm (clomipramine) Novartis
Reconcile (fluoxetine) Elanco/Eli Lilly
SILEO (dexmedetomidine) Pfizer/Zoetis
Distribution: 44,000 U.S. Veterinarians
for companion animals
SOM: $100M
SAM: $14.4B (24M x $600/year)
R&D Remaining: $2M over 2 years
19

20. Disloyalty to Antidepressants
.
Preference(%)
O
ne
Tw
o
Three
Four
0
10
20
30
40
50
60
70How many times do depressed people switch
medicines in 1 year?
20
Twitter Poll: 50 respondents (Akhu, 2016)

21. .
Preference(%)
Effective
Fast
M
ild
Lasting
0
10
20
30
40
50
Unmet Needs – Antidepressant Users
Most important feature of new medicine for
depression or anxiety:
Twitter Poll; 78 respondents (Akhu, 2016)

22. Value of New Alternative
If brand name antidepressants cost $4000/year,
effective, fast, safe alternatives are worth:
.
Preference(%)
$2K
/yr
$4K
/yr
$8K
/yr
$10K
/yr
0
10
20
30
40
50
60
70
Twitter Poll; 35 respondents (Akhu, 2016)

23. .
Preference(%)
Efficacy
O
nsetD
uration
Price
0
20
40
60
80
100
Physicians Confirm Unmet Needs
Causes of antidepressant discontinuation.
23
Phone survey of PCPs (33 respondents);
Akhu & KGI Market Analysis Team (2015)

24. Phone Interviews of KOLs (4 respondents)
Akhu & KGI Market Analysis Team (2015)
“Remission & response rates are lower than what we would like.”
“Of the 60% … that somewhat respond …, half are almost having a full
remission and … half are getting a 50% benefit.”
“STAR*D revealed ~50% better, but the problem … is relapse.”
24
Key Opinion Leaders Confirm Unmet Needs

25. FDA Fast Track: superior characteristics;
imminent need (6-months vs 12-18 months)
Source: www.fda.gov
2008 FDA First Cycle Review
Performance
.
1stCycleApproval(%)
Nonlife Life Nonlife Life
0
20
40
60
80
100 2003-2007
Follow-On Novel
.
1stCycleApproval(%)
Chemicals Biologics
0
20
40
60
80
100 2003-2007
Regulatory Hurdles
25

26. Abilify
Cymbalta
Lexapro
Pristiq
Viibryd
Trintellix
0 1 2 3 4 5
0
300
600
900
1200
1500
Time (years)
Users(1000s)
Akhu
Predicted Market Performance
0 1 2 3 4 5
0
1
2
3
4
Time (years)
Sales($B)
Pri/Vii/Tri
0 1 2 3 4 5
0
1
2
3
4
Time (years)
Sales($B)
Abi/Cym/Lex
Pri/Vii/Tri
National Center for Health Statistics
(2011); Statistica (2012); Drugs.com
(2016)
0 1 2 3 4 5
0
300
600
900
1200
1500
Time (years)$Millions
Sales
Costs
Break-Even
26

27. Responses to Antidepressants
NormalDepressedTreatment for 6 WeeksDiscontinuation 1 Week

28. Responses to Non-selective Melanocortin Blockers
NormalDepressedTreatment for 2-5 daysTreatment for 2-5 daysDiscontinuation 100 DaysDiscontinuation 100 Days

29. Poorly Defined Drug Targets for Depression
Low efficacy
Slow onset
Low tolerability

30. Best Defined Drug Target for Depression
High efficacy
Fast onset
High tolerability

31. Depression Treatment Efficacy
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
Sources:
Turner et al., 2008
Kirsch et al., 2014
McGirr et al., 2015
Ehrensing et al., 1994
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
3 d
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
6 d
Hamilton Scale
.
PatientScore
N
ullPlacebo
SSR
I
K
etam
ine
M
IF1
0
5
10
15
20
25
30
Normal
Mild
Moderate
Severe
Very Severe
13 d

32. Potential for Acquisition
Naurex acquired by Allergan, 2015
$560M upfront Undisclosed milestones
Phase II injectable antidepressant adjuvant
CNS Therapeutics, 2005-12
$205M upfront $153M milestones
Phase II
Healthcare Report, Silicon Valley Bank (2013);
FierceBiotech (2015)
32

33. Assumptions Year 1 Year 2 Year 3 Year 4 Year 5
Customers Targeted 4,024,354 4,326,180 4,650,644 4,999,442 5,374,400
Customer Acquisition Rate (%) 4% 4% 6% 6% 6%
Customer Retention Rate (%) 100% 75% 75% 75% 75%
Customers Acquired 148,901 284,723 469,328 626,965 765,816
Annual Price $2,000 $2,000 $2,000 $2,000 $2,000
Assumptions for Financial Statements
33