Cowan Emerging Company Research PolyMedix — Outperform (1) PYMX files 10K; focus remains on antibiotic & heptagonist data expected 1H12

1. Biotechnology
Emerging Company Research
PolyMedix — Outperform (1)
PYMX files 10K; focus remains on antibiotic &
March 14, 2012
heptagonist data expected 1H12
Analysts Summary: PolyMedix filed its 2011 10K last night, reporting 4Q11/FY11
Simos Simeonidis, Ph.D. numbers. There were no significant updates in the 10K, other than the
(646) 562-1386
simos.simeonidis
financials, and investors' attention remains focused on the PMX-30063
@cowen.com (antibiotic) and PMX-60056 (heptagonist) Phase II data expected in 1H12.
Yatin Suneja Antibiotic data, expected in a few weeks, represent the moment
(646) 562-1388
yatin.suneja@cowen.com
of truth for PYMX. We believe that the full data from PMX-30063's trial in
ABSSSI, which will include data from MRSA patients, will be a very significant
milestone for PYMX shares, since it will represent the first time that one of
the company's compounds will have been tested in 1) a relatively large 2)
patient population. If the full Phase II data replicate what we saw in the first
~80 patients, especially if the drug continues to demonstrate 1) very high
clinical response rates, averaging 92% among the four groups, and 2) a clean
safety profile, we expect the market to start paying much closer attention to
PYMX. Given the compound's first-in-class status, coupled with its
mechanism of action, that carries the theoretical potential to overcome
resistance, we believe that if the full Phase II data corroborate what we saw
in the interim look, investors will start viewing PMX-30063 as a compound
with significant commercial potential.
Data from two PMX-60056 trials expected in 1H12. In addition to
PMX-30063, investors will be watching for data from: 1) the 40-patient Phase
II trial of PMX-60056 in PCI (Percutaneous Coronary Intervention), and 2) the
Phase Ib/II dose-ranging trial of PMX-60056 in the reversal of Lovenox.
4Q11/FY11 numbers reported. PYMX spent $6.7M ($4.9M in R&D, $1.9M
in SG&A) in 4Q11 and $21M ($13.8M in R&D, $7.2M in SG&A) in FY11, and
ended 2011 with $14.6M in net cash ($21.4M in cash, minus $6.8M in debt).
PYMX (03/13) $1.31 Revenue $MM
Mkt cap $227.4MM FY 2011 2012E 2013E
Dil shares out 173.6MM Dec Actual Prior Current Prior Current
Avg daily vol 372.4K Q1 0.8 — 0.5 — —
52-wk range $0.5-1.5 Q2 0.3 — 0.4 — —
Dividend Nil Q3 0.4 — 0.4 — —
Dividend yield Nil Q4 0.9 — 0.5 — —
BV/sh $0.03 Year 2.5 — 1.8 — 20.4
Net cash/sh $0.08 EV/S — — 116.7x — 10.3x
Debt/cap NA
ROA (LTM) NA
5-yr fwd EPS NA EPS $
growth (Norm) FY 2011 2012E 2013E
Dec Actual Prior Current Prior Current
Q1 (0.04) — (0.06) — —
Q2 (0.05) (0.06) (0.07) — —
Q3 (0.04) — (0.05) — —
S&P 500 1396.0 Q4 (0.07) — (0.04) — —
Year (0.20) — (0.21) — (0.07)
CY — — — — —
P/E — — — — —
Please see addendum of this report for important disclosures. www.cowen.com

2. PolyMedix
Company Description
PolyMedix is a biotech company that is developing compounds for the treatment of
infectious diseases and acute cardiovascular disorders using its proprietary
computational drug design technology. The company’s lead compound, PMX-30063,
is a novel defensin-mimetic antibiotic, and is currently in a 200-patient Phase II trial
in acute bacterial skin and skin structure infections (ABSSSI). PolyMedix’s second
development program, PMX-60056, is a non-peptide small molecule designed to
reverse the action of heparin and low molecular weight heparin (LMWH), and is
currently in Phase II testing in the reversal of heparin in patients undergoing
percutaneous coronary intervention (PCI) and in a Phase I/II dose-ranging study in
the reversal of Lovenox. PolyMedix is also developing a number of compounds that
are currently in preclinical development and include an oral version of PMX-30063,
PMX-10072, an anti-tuberculosis compound, and PMX-30024, an anti-malaria
compound. The company was founded in 2002, is headquartered in Radnor,
Pennsylvania and currently has 28 employees.
PolyMedix Upcoming Milestones
M ilestone Timing
IND filing for PMX-30063 (oral and t opical) 1H12
Complet e enrollment and report dat a from t he Phase II t rial of PMX-60056 in PCI 1H12
Dat a from Phase Ib/ II dose-ranging t rial of PMX-60056 in t he reversal of Lovenox in healt hy subject s 1H12
Full dat a from t he Phase II t rial of PMX-30063 in ABSSSI 1H12
Init iat e a second Phase II st udy of PMX-30063 2H12
Pot ent ial part nerships for PMX-60056 and PMX-30063 2013
Source: Cowen and Company, PolyMedix
PolyMedix R&D Pipeline
Therapeutic Class/Product Indication P-C I II III FILING MKT Comments
PMX-30063 (Antibiotic IV) ABSSSI •
PMX-60056 (Heparin/LMWH antagonist) Anticoagulation reversal •
PMX-30063 (Antibiotic: oral, topical) ABSSSI •
PMX-50003,
PMX-70004 (Polymer biomaterials) Bacterial infections •
PMX-10072 (Anti-tuberculosis) Tuberculosis •
PMX-30024 (Anti-malaria) Malaria •
PMX-10098 (Anti-fungal) Fungal infections •
PMX-30016 (Biodefense) Biodefense •
PMX-20005 (Angiogenesis inhibitor) Oncology •
Total Drugs in Development 7 0 2 0 0 0
Radnor, PA Investor Relations Contact: Lisa Caperelli - 484.598.2406
Source: Cowen and Company, PolyMedix
2 March 14, 2012

3. PolyMedix
Investment Thesis
PolyMedix is a development stage biotechnology company that uses its proprietary
computational drug design technology to develop non-peptide small molecules for
the treatment of infectious diseases and acute cardiovascular disorders. The
company is currently developing two lead clinical programs, both of which were
internally discovered and developed, and are fully owned.
1) PMX-30063 for ABSSSI. PMX-30063 is a novel antibiotic small molecule, designed
to overcome the resistance that eventually develops with most antibiotics. PMX-
30063 is designed to act as a synthetic version of the naturally occurring defensins,
peptides with antimicrobial activities that have been part of the innate immune
response throughout evolution. By attempting to emulate the action of the
defensins, and disrupting the structural integrity of bacteria (i.e. via a biophysical
approach), as opposed to interfering via a biochemical approach, as most classes of
antibiotics do, PMX-30063 has the potential to become an antibiotic against which
resistance is less likely to develop. Given the increasing problem of antibiotic
resistance, and with the obvious caveat that the compound is currently in its first
trial in patients, we believe that if PMX-30063 is able to differentiate itself in terms
of resistance, and assuming it would be able to get through its clinical trials with a
reasonable efficacy and safety profile, it has the potential to become a significant
agent in the large antibiotic market. PMX-30063 is currently in a 200-patient Phase II
trial in patients with acute bacterial skin and skin structure infections (ABSSSI). In
December 2011, the company announced positive interim results from the first 80
patients enrolled in the study. The data showed that PMX-30063 was safe and well-
tolerated, with a combined cure rate of 92%, across the four dosing arm (~20
patients in each arm). The study is currently ongoing and PolyMedix expects to
present full data from the study in the first half of 2012.
2) PMX-60056 for the reversal of heparin and LMWH. PMX-60056 is a small
molecule designed to reverse anticoagulation following administration of heparin
during cardiothoracic surgery and low molecular weight heparin (LMWH) in the
prevention of deep vein thrombosis (DVT) and pulmonary embolism (PE) settings.
PMX-60056 was designed to bind to a specific pentasaccharide sequence that is
present in both heparin and LMWH, inactivating them and thus reversing their
anticoagulant effects. The only drug currently approved for the reversal of heparin
is protamine, an agent which is cheap and fairly effective, but comes with significant
safety concerns. There are currently no approved agents for the reversal of LMWH,
despite the fact that bleeding while being treated with LMWH can lead to serious
and, in some cases, life-threatening complications. Thus, we believe that a
compound that can safely and effectively reverse the action of both heparin and
LMWH could take significant market share in both settings and become
commercially successful. PMX-60056 is currently in a Phase II trial in patients
undergoing percutaneous coronary intervention (PCI) and a Phase Ib/II dose-ranging
trial in the reversal of Lovenox, with data from both the trials expected in the first
half of 2012.
Data from Phase I studies and from small numbers of subjects make for a
high risk investment; so, proceed with eyes wide open. The main and obvious
risk to our call on PYMX is that comes with a significant amount of risk, since we are
basing our thesis on the available, very early stage data. The promising results from
the company’s two lead compounds come from 1) Phase I trials (even though in PMX-
60056’s case, we are able to judge the compound’s efficacy, given its mechanism of
March 14, 2012 3

4. PolyMedix
action, and we have seen interim data from PMX-30063’s Phase II trial in ABSSSI), 2)
very small numbers of subjects. In addition, PMX-30063 is currently in its first trial in
patients, and even though we have seen impressive topline interim data from the
first 80 patients enrolled in the Phase II trial in ABSSSI, we are still relatively early in
the compound’s development. Finally, even though both lead compounds have
relatively benign safety profiles thus far, the hypotension signal seen in the PMX-
60056 trials, and the paresthesias, transient liver enzyme elevations and
cardiovascular effects seen in the PMX-30036 Phase I trials, have to be further
examined in the Phase II setting before investors become more comfortable with
either compound.
PolyMedix P&L ($MM)
($MM) 2010A Q1:11A Q2:11A Q3:11A Q4:11A 2011A Q1:12E Q2:12E Q3:12E Q4:12E 2012E 2013E
Revenues
US PMX-60056 sales 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EU PMX-60056 royalties 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
US PMX-30063 sales 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EU PMX-30063 royalties 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Upfront and Milestones- PMX 60056 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 9.0
Upfront and Milestones- PMX 30063 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.0
Grants and Contract Revenues 2.1 0.8 0.3 0.4 0.9 2.5 0.5 0.4 0.4 0.5 1.8 1.4
Total Revenues 2.1 0.8 0.3 0.4 0.9 2.5 0.5 0.4 0.4 0.5 1.8 20.4
COGS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gross margin
G&A 5.8 1.5 1.9 1.9 1.9 7.2 2.0 2.0 2.1 2.2 8.3 10.0
Sales and Marketing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Research and Development 11.0 2.6 2.7 3.6 4.9 13.8 5.1 5.3 5.5 5.6 21.5 25.0
Total Operating Expenses 16.7 4.1 4.6 5.5 6.7 21.0 7.1 7.3 7.6 7.8 29.8 35.0
Operating Income/Loss (14.6) (3.3) (4.2) (5.1) (5.8) (18.5) (6.6) (6.9) (7.2) (7.4) (28.1) (14.6)
Interest Income and other expenses (0.9) (0.3) (1.0) 1.0 (1.1) (1.4) (0.2) (0.2) (0.2) (0.2) (0.6) 1.4
Pretax income (15.5) (3.6) (5.2) (4.1) (6.9) (19.9) (6.8) (7.1) (7.4) (7.5) (28.7) (13.2)
Income tax benefit (expense) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
tax rate
Net Income (Loss) (15.5) (3.6) (5.2) (4.1) (6.9) (19.9) (6.8) (7.1) (7.4) (7.5) (28.7) (13.2)
EPS
Basic $ (0.19) $ (0.04) $ (0.05) $ (0.04) $ (0.07) $ (0.20) $ (0.06) $ (0.07) $ (0.05) $ (0.04) $ (0.21) $ (0.07)
Diluted $ (0.19) $ (0.04) $ (0.05) $ (0.04) $ (0.07) $ (0.20) $ (0.06) $ (0.07) $ (0.05) $ (0.04) $ (0.21) $ (0.07)
Shares Outstanding
Basic 81.0 81.0 103.2 106.0 106.0 99.1 107.1 108.1 150.9 193.6 139.9 201.4
Diluted 137.3 136.7 171.6 174.9 173.6 164.2 175.4 177.1 212.2 214.3 194.8 222.9
Source: Cowen and Company
4 March 14, 2012

5. PolyMedix
Positives
1. PMX-30063, is an antibiotic with a novel mechanism of action, with the potential
to address the issue of antibiotic resistance.
2. PMX-60056 has shown promising efficacy and safety in the reversal of heparin
and LMWH in its trials thus far.
3. Both lead programs could be promoted in the U.S. by PolyMedix by a relatively
small, hospital-based sales force.
Negatives
1. Both lead compounds have been tested in relatively small number of subjects.
2. Impact of hypotension in PMX-60056 trials and of paresthesias and
cardiovascular effects in PMX-30063 trials need to be further evaluated in the
Phase II setting.
3. Both compounds would have to be tested in a large Phase III program before
commercialization and may need a partner before entering Phase III testing.
March 14, 2012 5

6. PolyMedix
Addendum
STOCKS MENTIONED IN IMPORTANT DISCLOSURES
Ticker Company Name
PYMX PolyMedix
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7. PolyMedix
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March 14, 2012 7

8. PolyMedix
8 March 14, 2012