cowen research report

Pharmaceuticals/Specialty

Ohr Pharmaceutical

Equity Research Initiating Coverage

www.cowen.com Please see addendum of this report for important disclosures.

March 2, 2015

Price: $7.69 (02/27/2015)Price Target: $25.00

OUTPERFORM (1)

Initiation: OHR-102 Success In WetAMD Likely To Create Tremendous Value

Tyler Van Buren, [email protected]

Ken [email protected]

Sal Rais, [email protected]

Key DataSymbol NASDAQ: OHRP52-Week Range: $20.00 - 6.01Market Cap (MM): $195.3Net Debt (MM): $(13.2)Cash/Share: $0.52Dil. Shares Out (MM): 33.5Enterprise Value (MM): $184.8ROIC: NAROE (LTM): NABV/Share: $0.90Dividend: NA

FY (Sep) 2014A 2015E 2016EEarnings Per ShareYear $(0.41) $(1.00) $(1.85)P/E NM NM NM

Revenue (MM)Year $0.0 $0.0 $0.0

The Cowen InsightWe are initiating on Ohr with an Outperform and $25 PT. Our rating is predicatedon the potential for OHR-102 to be successfully developed in wet AMD. If it has acompetitive efficacy profile and is ultimately approved, our consultants suggest thatthe vast majority of treated wet AMD patients will be on OHR-102 therapy as it has asuperior product profile relative to other development candidates.

OHR-102 Could Become The First Eye Drop For The Treatment Of Wet AMD

The Companys lead program is OHR-102, which is a first-in-class anti-angiogeniccompound that inhibits growth factors VEGF, PDGF, and bFGF, and is being developedas a combination therapy with anti-VEGFs for wet AMD. OHR-102 is currently in aPhase II clinical development program, which has already reported positive interimvisual acuity data, and final data is expected to readout by mid-to-late March. If thefinal data are positive which we and our consultants believe has a good probabilityof occurring Ohr plans to move OHR-102 into Phase III clinical trials in Q2:2015.Ultimately, our consultants suggest that the vast majority of treated AMD patients willwant better visual acuity and therefore go on PDGF treatment.

Consultants Believe Early Visual Acuity Data Are Surprising And Intriguing

The ongoing Phase II IMPACT study has enrolled 142 patients and is designed tomeasure the impact of twice-daily OHR-102 on visual acuity in combination withPRN Lucentis injections versus placebo drops plus PRN Lucentis. At interim (n=62),the mean change in visual acuity at the end of 9 months for OHR-102 eye dropsplus Lucentis PRN was +10.4 letters versus +6.3 letters for placebo plus LucentisPRN a mean +4.1 letter improvement in visual acuity (p=0.18). Additionally, 48.3%of OHR-102-treated patients showed BCVA gains of >3 lines (Phase III primaryendpoint confirmed with the FDA) compared with 21.2% in the placebo arm, whichwas statistically significant (p=0.025). This result simply needs to be repeated to besuccessful. Overall, our consultants suggest that the visual acuity results look verymuch like Ophthotech's and the curves and outcomes look remarkably similar.

A Risk/Reward Play Skewed Towards The Upside

We assume a potential US OHR-102 approval and launch in early 2019 with a peakpenetration of treated wet AMD patients eligible for anti-PDGF treatment just above35% by year 7, which assumes other PDGF competition. This results in a peak USsales potential of $1B+. Ex-US, we assume an early 2020 launch and an ultimate peakpenetration of 25% by year 6-7 factoring in other PDGF competition. This results ina peak Ex-US sales potential of $750MM+. Providing a necessary high discount rategiven the still early stage of development to these estimates yields an equity value of$800MM+ or $25 per fully-diluted share, which is the basis of our price target. If thefinal Phase II data are successful, our discount rate would correspondingly decreaseresulting in a higher equity value. Worth noting, our valuation does not give any creditto OHR-102s follow-on indications of RVO, PVR, and DME, or the Alcon-partneredsustained-release programs.

This report is intended for world-cowen-morningnotesdistribution@

cowen.com. Unauthorized redistribution of this report is prohibited.

At A GlanceOur Investment Thesis

We assume a potential US OHR-102 approval and launch in early 2019 with a peakpenetration of treated wet AMD patients eligible for anti-PDGF treatment just above35% by year 7, which assumes other PDGF competition. This results in a peak USsales potential of $1B+. Ex-US, we assume an early 2020 launch and an ultimate peakpenetration of 25% by year 6-7 factoring in other PDGF competition. This results ina peak Ex-US sales potential of $750MM+. Providing a necessary high discount rategiven the still early stage of development to these estimates yields an equity value of$800MM+ or $25 per fully-diluted share, which is the basis of our price target. If thefinal Phase II data are successful, our discount rate would correspondingly decreaseresulting in a higher equity value. Worth noting, our valuation does not give any creditto OHR-102s follow-on indications of RVO, PVR, and DME, or the Alcon-partneredsustained-release programs.

Forthcoming Catalysts

Mid-to-late March Final toplinedata readout of the OHR-102 Phase IIIMPACT study for wet AMD

Q2:2015 Potential Phase III globalprogram initiation for OHR-102 in wetAMD

H1:2015 Potential IND filing for oneof four sustained-release programspartnered with Alcon

2015 (potentially by the end of H1) OHR-102 RVO and PVR data readouts

Base Case Assumptions

$25 on positive OHR-102 Phase IIIMPACT data

Upside Scenario

$40 on better than expected IMPACTdata and potential buyout or licensingdeal

Downside Scenario

$2-3 on Phase II IMPACT failure

Price Performance

Feb-15Nov-14Aug-14May-14

$20

18

16

14

12

10

8

6

Source: Bloomberg

Company Description

Ohr Pharma is a development-stage specialty pharmaceutical company with multipleprograms in development for various ophthalmic indications. The Companys leadprogram is OHR-102, which is in Phase II and being developed as a combinationtherapy with anti-VEGFs for wet AMD.

Analyst Top Picks

Ticker Price (02/27/2015) Price Target RatingOhr Pharmaceutical OHRP $7.69 $25.00 Outperform

www.cowen.com2

Cowen and CompanyEquity Research

Ohr PharmaceuticalMarch 2, 2015



Investment Thesis: OHR-102 Success In Wet AMD Likely To Create Tremendous Value

Ohr Pharma is a development-stage specialty pharmaceutical company with multiple

programs in development for various ophthalmic indications. The Companys lead

program is OHR-102, which is being developed as a combination therapy with anti-

VEGFs for wet AMD. OHR-102 is currently in a Phase II clinical development program,

which has already reported positive interim visual acuity data, and final data is

expected to readout by mid-to-late March. If the final data are positive, which we and

our consultants believe has a good probability of occurring, Ohr plans to move OHR-

102 into Phase III clinical trials in Q2:2015. Follow-on indications of PVR, RVO, and

DME are anticipated next for OHR-102 and the approach appears logical given the

success of on-market wet AMD treatments in these areas. For RVO and PVR, OHR-

102 is being tested in investigator-sponsored studies with Phase II data to readout

later this year potentially by the end of H1:2015. For DME, the Company is running

its own Phase II study with a final data to readout around mid-2016. OHR-102 has a

composition of matter patent on OHR-102 lactate salt to 2029 and an additional

broad-base formulation patent to 2030 that is still pending. A couple new filings are

expected and we would also note that these expirations do not consider any potential

extensions from Hatch-Waxman. Nonetheless, OHR-102 appears to be a long-duration

drug. Additionally, the Company has a research agreement with Alcon a Novartis

company which is one of the largest ophthalmology players in the world with over

$10B in annual revenues. Clearly, this provides a source of validation for Ohrs

programs and expertise in ophthalmology. This collaboration is testing Ohrs

sustained-release hydrogel platform technology and encompasses four active

research programs in glaucoma, steroid-induced glaucoma, eye allergy, and retinal

disease. Depending on the outcome of these early programs with partner Alcon, Ohr

anticipates potentially filing an IND for one program by the end of H1:2015. Finally, we

believe Ohr has assembled an impressive management team and group of experts.

Both Dr. Jason Slakter, the CMO, and Dr. Peter Kaiser, the SVP of product

development, are world-renowned retinal specialists. Dr. Avner Ingerman, another

accomplished ophthalmologist who ran the Eylea clinical development program at

Regeneron, just joined as the Companys Chief Clinical Officer. Ohr also has several

other thought leaders involved and consulting on the program including Dr. David

Boyer who presented the recent abicipar pegol/DARPin data and Dr. Jeff Heier, who

has presented PDGF data from the Regeneron and Ophthotech programs, among

others. Needless to say, this is an impressive group of individuals.

One consultant believes that despite previous topical failed programs for wet AMD, it

will only be a matter of time before an eye drop potent enough is found with the right

dosage that reaches the retina. We believe Ohrs OHR-102 (squalamine) might be the

one. OHR-102 is a first-in-class anti-angiogenic compound that inhibits multiple

growth factors: vascular endothelial growth factor (VEGF), platelet-derived growth

factor (PDGF), and basic fibroblast growth factor (bFGF). VEGFs have revolutionized

the treatment of wet AMD, but they produce most of their improvement in about 4

months and then there is a plateau in efficacy. Moreover, patients must be

continuously dosed with frequent anti-VEGF to maintain the plateau; data from several

large trials were shown to suggest that switching from monthly dosing to PRN results

in a loss of efficacy. The biological explanation for this may be that anti-VEGFs cause

regression of tip cells at the distal end of neovascularization, but the bulk of the

vessel outgrowths are protected from the anti-VEGF by a lining of pericytes. Anti-

PDGF agents, in combination with the anti-VEGFs, denude the overgrown vessels of

pericytes and cause regression of the outgrowth. Current development of anti-VEGF

agents is aimed at extending the duration of treatment thereby allowing for a fewer

OHR-102 is currently in Phase II development,

which has already reported positive interim data,

and final data is expected to readout by mid-to-

late March. If the final data are positive, which

we and our consultants believe has a good

probability of occurring, Ohr plans to move OHR-

102 into Phase III clinical trials in Q2:2015.

OHR-102 has a composition of matter patent on

OHR-102 lactate salt to 2029 and an additional

broad-base formulation patent to 2030 that is still

pending. A couple new filings are expected and

we would also note that these expirations do not

consider any potential extensions from Hatch-

Waxman. Nonetheless, OHR-102 appears to be a

long-duration drug.

OHR-102 is a first-in-class anti-angiogenic

compound that inhibits multiple growth factors:

vascular endothelial growth factor (VEGF),

platelet-derived growth factor (PDGF), and basic

fibroblast growth factor (bFGF).

www.cowen.com 3





number of injections a year, or better compliance as recent agents have largely failed

to meaningfully increase visual acuity in long-term studies. However, this dogma

appears to be changing with advent of anti-PDGF agents. PDGF agents in the case

of OHR-102 and Fovista have demonstrated significant visual acuity gains on top of

anti-VEGF treatments when used in combination. We would remind investors that for

wet AMD, a disease where patients ultimately lose their vision, increased visual acuity

is paramount. Ultimately, our consultants suggest that the vast majority of treated

AMD patients (2/3 and up) will want better visual acuity and therefore go on PDGF

treatment. Lastly, our consultants note that as many as 10-20% of their patients are

not adequately managed by the current anti-VEGF options, and therefore there is also

a need for more potent alternatives to help better manage the disease in refractory

patients

Consultants Believe Early OHR-102 Visual Acuity Data Are Surprising And

Intriguing; Final Phase II Data Due Mid-to-Late March

In June 2014, Ohr announced positive interim topline clinical results of a Phase II

study in wet AMD. Prior to the positive data release, few had any expectations for the

program much less an observed visual acuity benefit. However, since the data

which produced significant visual acuity benefits and our consultants believe is very

surprising and intriguing that perception has changed and we now approach the

final Phase II data readout in mid-to-late March with the expectation of a visual acuity

benefit. While there is still substantial risk to any wet AMD data readout, OHR-102

appears to have a strong possibility of repeating the interim data. If this occurs, not

only would the perception of the program be strengthened even more, but it would be

significantly de-risked as its head into Phase III with the exact same clinical endpoint.

The ongoing Phase II IMPACT study has enrolled 142 patients (completed in April

2014) and is designed to measure the impact of twice-daily OHR-102 on visual acuity

in combination with PRN (as needed) Lucentis versus placebo drops plus PRN

Lucentis. Per the study plan, a pre-specified interim analysis was conducted with

~50% of the planned total patient enrollment completing the study protocol. 62

patients 29 and 33 in the OHR-102 and placebo arms, respectively completed the 9

month treatment period at interim. Not surprisingly, the primary endpoint, the

difference in the frequency of Lucentis injections, did not meet statistical significance

at interim. Given our knowledge of PRN studies (no difference in year 2 of the VIEW

studies with Eylea/Lucentis) and the fact that no study has shown the ability to reduce

Lucentis injections including Ophthotechs Phase II program we were not

surprised by this result. Furthermore, the panelists at our March 2014 Health Care

Conference stated that a fewer injections endpoint largely isnt clinically relevant.

Thus, based on the data (6.2 Lucentis injections for the OHR-102 arm and 6.4 for the

placebo arm), we find it improbable that this endpoint will meet statistical significance

in the final data set nor do we care. Sure a reduction in injections would be an

improvement but ultimately what matters to clinicians is improving visual acuity.

However, when analysis was conducted on the more clinically relevant visual acuity

endpoints, the data suggested a strong visual acuity benefit across the two most

common endpoints mean visual acuity and the proportion of >3 line gainers. The

mean change in visual acuity at the end of 9 months for OHR-102 eye drops plus

Lucentis PRN was +10.4 letters versus +6.3 letters for placebo plus Lucentis PRN a

mean +4.1 letter improvement in visual acuity. Our consultants note that this 65%

visual acuity benefit is impressive, especially considering the potential ceiling effect for

enrolling a good amount of patients with relatively mild disease. However, it was not

statistically significant (p=0.18) given the small study size. With that in mind, our

However, this dogma appears to be changing

with advent of anti-PDGF agents. PDGF agents

in the case of OHR-102 and Fovista have

demonstrated significant visual acuity gains on

top of anti-VEGF treatments when used in

combination. We would remind investors that for

wet AMD, a disease where patients ultimately

lose their vision, increased visual acuity is

paramount. Ultimately, our consultants suggest

that the vast majority of treated AMD patients

(2/3 and up) will want better visual acuity and

therefore go on PDGF treatment.

While there is still substantial risk to any wet

AMD data readout, OHR-102 appears to have a

strong possibility of repeating the interim data. If

this occurs, not only would the perception of the

program be strengthened even more, but it

would be significantly de-risked as its head into

Phase III with the same exact clinical endpoint.

However, when analysis was conducted on the

more clinically relevant visual acuity endpoints,

the data suggested a strong visual acuity benefit

across the two most common endpoints, mean

visual acuity and the proportion of >3 line

gainers. The mean change in visual acuity at the

end of 9 months for OHR-102 eye drops plus

Lucentis PRN was +10.4 letters versus +6.3

letters for placebo plus Lucentis PRN a mean

+4.1 letter improvement in visual acuity. Our

consultants note that this 65% visual acuity

benefit is impressive, especially considering the

potential ceiling effect for enrolling a good

amount of patients with relatively mild disease.

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consultants note that it is still too early and in too few patients to believe that

OHR-102 wont reach statistical significance on visual acuity once the final data reads

out. Additionally, 48.3% of OHR-102-treated patients showed BCVA gains of >3 lines

(>15 letters) on a standard ETDRS eye chart compared with 21.2% in the placebo arm

(p=0.025) a statistically significant observation. Our consultants view both the mean

visual acuity and >3 line gain results as impressive particularly if they hold up when

the final data reads out in the second half of March.

Since the interim readout, Ohr has met with the FDA and received confirmation that

the Phase III endpoint will be the proportion of patients with >3 line visual acuity

gains, which was the exact secondary endpoint that hit statistical significance at the

interim readout per above in only 62 patients. Moreover, our consultants suggest that

this endpoint also has a good chance of reaching statistical significance when the

larger, final 142-patient Phase II data set reads out by the end of March 2015 as the

data in 62 patients gives us a good feel for OHR-102s efficacy. One consultant

remarked that it would be shocking if the final data showed no visual acuity benefit

as the first 62 patients are very typical looking and he would put the odds of success

on the >3 line gainers endpoint pretty high. If it does, our consultants would also

consider the final Phase III program employing the exact same endpoint to be

significantly de-risked. In fact, they believe that upon a successful readout, OHR-102

would have the same probability of success in Phase III as Ophthotech which per

previous physician surveys has been pegged at around 75%. One consultant

believes that successful Phase II wet AMD results tend to have an 80% chance of

translating to Phase III. At the very least, we believe the early interim results suggest

that OHR-102 treats the back of the eye and may cause a significant increase in visual

acuity in wet AMD patients. Overall, our consultants suggest that the mean change in

visual acuity and >3 line gainer results look very much like Ophthotechs and the

curves and outcomes look remarkably similar. While some skepticism will always

remain through the final Phase III data, consultants appear to be looking at the

program very differently now following the interim data.

As we head towards the final results, it is also important to consider that while 62

patients wasnt enough to hit on the mean visual acuity endpoint, 142 patients with

the observed +4.1 letter increase in visual acuity is just reaching the boundary

where there might be enough powering to reach statistical significance, per our

consultants. Of course, a 300-400 patient study would be ideally powered, but the

potential to hit statistical significance on mean visual acuity in the final dataset is a

source of additional upside and would further help to dispel any skeptics. However, it

is important to keep in mind that even if mean visual acuity doesnt hit which could

be a perceived negative all that matters is that the >3 line gainers Phase III endpoint

hits.

Upon potential successful final Phase II data, Ohr has stated that they would be able

to initiate the Phase III program by the end of Q2:2015. We estimate that the time to

topline data could be 2-2.5 years accounting for 12-18 months of enrollment and the 9

month primary endpoint. 2.5 years would put the topline data readout at late 2017.

Since OHR-102 has Fast Track status, it could begin filing a rolling NDA submission

during the trial and then submit the final topline 9 month primary endpoint data last in

early 2018. In essence, Ohr could receive approval even before the ultimate 2 year

study time point just like Eylea. This would allow for a potential approval and launch

by early 2019. Lastly, we would note that this timeline could potentially be conservative

by 6 months.

For Europe, Ohr plans to meet with regulators soon to nail down the requirements for

the Phase III program. However, we would note that Ohr will be measuring the primary

Our consultants suggest that this endpoint is also

has a good chance of reaching statistical

significance when the larger, final 142-patient

Phase II data set reads out by the end of March

2015 as the data in 62 patients gives us a good

feel for OHR-102s efficacy. One consultant

remarked that it would be shocking if the final

data showed no visual acuity benefit as the first

62 patients are very typical looking and he

would put the odds of success on the >3 line

gainers endpoint pretty high.

Additionally, 48.3% of OHR-102-treated patients

showed BCVA gains of >3 lines (>15 letters) on

a standard ETDRS eye chart compared with

21.2% in the placebo arm (p=0.025) a

statistically significant observation. Overall, our

consultants view both the mean visual acuity and

>3 line gain results as impressive particularly if

they hold up when the final data reads out in the

second half of March.

Upon potential successful final Phase II data, Ohr

has stated that they would be able to initiate the

Phase III program by the end of Q2:2015. We

estimate that the time to topline data could be 2-

2.5 years accounting for 12-18 months of

enrollment and the 9 month primary endpoint.

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endpoint out to 12 months in Phase III in case they require the standard 12 month

endpoint. Additionally, it will be a global trial with clinical sites in the US and EU. It is

quite possible that the EU submission could come shortly after the US submission, but

we conservatively assume a year delay in the European launch.

Anticipated Upcoming Milestones For Ohr Pharma Are:

2015

Mid-to-late March Final topline data readout of the OHR-102 Phase II IMPACT study for wet AMD

Q2:2015 Potential Phase III global program initiation for OHR-102 in wet AMD

H1:2015 Potential IND filing for one of four sustained-release programs partnered with Alcon

2015 (potentially by the end of H1) OHR-102 RVO and PVR data readouts from investigator-sponsored studies

2016

Mid-2016 OHR-102 Phase II DME study readout

2017

Late 2017 Potential OHR-102 Phase III program data readout

2018

Early 2018 Potential OHR-102 NDA filing for wet AMD

2019

Early 2019 Potential approval of OHR-102 for wet AMD

Valuation Analysis: A Risk/Reward Play Skewed Towards The Upside

For our OHR-102 global market build, we assume that 2/3 of treated wet AMD

patients will be eligible for anti-PDGF combination treatment, which will most likely

prove to be conservative per our consultants. In the US, we assume a per bottle net

price for OHR-102 of $750, which could also be conservative considering that branded

wet AMD agents command just under $2,000 per injection over either one or two

months. We are pricing OHR-102 to capture significant market uptake and to

potentially be used prophylactically, or in the larger patient population, since it is an

eye drop vs. an injection. We assume a potential US approval and launch in early 2019

with a peak penetration of eligible patients just above 35% by year 7, which assumes

other PDGF competition. This results in a peak US sales potential of $1B+. Ex-US, we

assume an early 2020 launch. We were generally more conservative for the EU and

assume a net price of $500 with an ultimate peak penetration of 25% by year 6-7 this

too assumes other PDGF competition. This results in a peak Ex-US sales potential of

$750MM+.

On the following pages, we provide our US and Ex-US wet AMD market models for

OHR-102.

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Figure 1 US Wet AMD Market Model

Source: Cowen and Company; PriceRx

2013A 2014A 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 5Y CGR Comments

U.S. Wet AMD

Prevalence of moderate-advanced wet AMD pt.s ('000) 454 476 500 525 552 579 608 632 658 684 711 740 769

% diagnosed 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%

# diagnosed patients ('000) 361 381 400 420 441 463 486 506 526 547 569 592 615

% of diagnosed pt.s Tx with anti-VEGFs 95% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96%

# treated patients ('000) 343 364 384 403 424 445 467 486 505 525 546 568 591

% growth +6% +6% +6% +5% +5% +5% +5% +4% +4% +4% +4% +4% +4%

Avastin

% Avastin patient penetration 26% 33% 37% 40% 40% 41% 42% 42% 42% 42% 42% 42% 42% - 4 week treatment duration; 5-6 weeks in practice

# patients receiving Avastin each year ('000) 89 120 142 161 169 182 196 204 212 221 229 239 248 - Increased payor pressure to drive growth

Average # vials per patient per year 5.6 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5

Avastin price per dose $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 - Low cost due to compounding

U.S. Avast in Sa les In Wet AMD ($MM) $25 $35 $40 $45 $45 $50 $55 $55 $60 $60 $65 $65 $70 +7% - Recognized by compounders

% growth +757% +40% +14% +13% +0% +11% +10% +0% +9% +0% +8% +0% +8%

Lucentis

% Lucentis patient penetration 35% 23% 17% 16% 15% 15% 15% 15% 15% 15% 15% 15% 15% - 4 week treatment duration; 6-7 weeks in practice

# patients receiving Lucentis each year ('000) 120 84 65 65 64 67 70 73 76 79 82 85 89


Lucentis price per dose $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950

U.S. Lucentis Sa les In Wet AMD ($MM) $1 ,310 $900 $700 $690 $680 $715 $750 $780 $815 $845 $880 $915 $950 +2%

% growth +4% -31% -22% -1% -1% +5% +5% +4% +4% +4% +4% +4% +4%

Eylea

% Eylea patient penetration 39% 44% 46% 45% 45% 44% 43% 43% 43% 43% 43% 43% 43% - 8 week treatment duration

% penetration of non-Avastin market 53% 66% 73% 74% 75% 75% 72% 66% 59% 53% 50% 48% 46% - Very rapid uptake upon launch

# patients receiving Eylea each year ('000) 134 160 177 182 191 196 201 209 217 226 235 244 254


Eylea price per dose $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850

U.S. Ey lea Sa les In Wet AMD ($MM) $1 ,334 $1 ,540 $1 ,700 $1 ,745 $1 ,835 $1 ,880 $1 ,930 $2 ,010 $2 ,090 $2 ,175 $2 ,260 $2 ,350 $2 ,445 +3% - Market leader

% growth +64% +15% +10% +3% +5% +2% +3% +4% +4% +4% +4% +4% +4%

OHR-102

% treated patients eligible for anti-PDGF treatment 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% - Per consultants; most will want better vision

# treated patients eligible for anti-PDGF treatment ('000) 226 240 254 266 280 294 308 321 333 347 361 375 390 - Potential launch in early 2019

% OHR-102 patient penetration 2% 8% 15% 23% 28% 32% 36% - Assumes PDGF competition

# patients receiving OHR-102 each year ('000) 6 24 50 78 99 120 140 - Assumes 2.5 years from start-finish for PIII

Average # bottles per patient per year 11.0 10.7 10.5 10.3 10.0 10.0 10.0 - Assume it stabilizes around 10 bottles per year

OHR-102 price per dose $750 $750 $750 $750 $750 $750 $750 - Priced between $500-$1,000 for market uptake

U.S. OHR-102 Sa les In Wet AMD ($MM) $50 $195 $395 $600 $745 $900 $1 ,055 +78% - Should exper ience rapid uptake

% gr ow th +290% +103% +52% +24% +21% +17%

U.S. Wet AMD

Lucentis Sales ($MM) $1,310 $900 $700 $690 $680 $715 $750 $780 $815 $845 $880 $915 $950 +2%

% growth +4% -31% -22% -1% -1% +5% +5% +4% +4% +4% +4% +4% +4%

Eylea Sales ($MM) $1,334 $1,540 $1,700 $1,745 $1,835 $1,880 $1,930 $2,010 $2,090 $2,175 $2,260 $2,350 $2,445 +3%

% growth +64% +15% +10% +3% +5% +2% +3% +4% +4% +4% +4% +4% +4%

OHR-102 Sales ($MM) $50 $195 $395 $600 $745 $900 $1,055 +78% - Assumes PDGF competition

% growth +290% +103% +52% +24% +21% +17%

TOTAL U.S. WET AMD SALES ($MM) $2 ,644 $2 ,440 $2 ,400 $2 ,435 $2 ,515 $2 ,595 $2 ,730 $2 ,985 $3 ,300 $3 ,620 $3 ,885 $4 ,165 $4 ,450 +4%

% gr ow th +27% -8% -2% +1% +3% +3% +5% +9% +11% +10% +7% +7% +7%

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Figure 2 Ex-US Wet AMD Market Model

Source: Cowen and Company; PriceRx

For our DCF valuation, we included the peak sales potentials from above and assumed

gross margins of 90%+. We also assumed the Phase III program will cost $75MM and

include SG&A expense within the range of normal industry standards. We expect that

Ohr will begin hiring commercial employees in mid-2016 and hire an initial OHR-102

US sales force of 50 reps upon approval, which will be later expanded. Similar

assumptions are made for an EU launch, although we suspect that Ohr may look to

partner Ex-US, similarly to the Fovista/Novartis deal, which resulted in ~$1B in

potential milestones and royalties on Ex-US sales. Providing a necessary high discount

rate given the still early stage of development to these estimates yields in an equity

value of $800MM+ or $25 per fully-diluted share, which is the basis of our price

target. If the final Phase II data are successful, our discount rate would

correspondingly decrease resulting in a higher equity value. Additionally, OHR-102 is

the only late-stage, unpartnered anti-PDGF program and we expect it to receive a lot

of interest from large ophthalmology players if the results are successful in March. Put

simply, as OHR-102 moves through the clinic, we expect the valuation gap between

OHRP and OPHT (~$1.6B currently) will narrow. We also note that our valuation does

not give any credit to OHR-102s follow-on indications of RVO, PVR, or DME or the

Alcon-partnered sustained-release programs.

2013A 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 5Y CGR Comments

Ex-U.S. Wet AMD

Prevalence of moderate-advanced wet AMD pt.s ('000) 681 715 750 788 827 869 912 949 986 1,026 1,067 1,110 1,154 - We estimate 50% larger than U.S.

% diagnosed 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%

# diagnosed patients ('000) 541 572 600 630 662 695 730 759 789 821 854 888 923

% of diagnosed pt.s Tx with anti-VEGFs 95% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96%

# treated patients ('000) 514 546 576 605 635 667 700 728 758 788 819 852 886

% growth +6% +6% +6% +5% +5% +5% +5% +4% +4% +4% +4% +4% +4%

Avastin

% Avastin patient penetration 55% 48% 44% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% - 4 week treatment duration; 5-6 weeks in practice

# patients receiving Avastin each year ('000) 282 262 254 260 273 287 301 313 326 339 352 366 381 - Increased payor pressure to drive growth


Avastin price per dose $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 - Low cost due to compounding

Ex-U.S. Avast in Sa les In Wet AMD ($MM) $79 $70 $70 $70 $75 $80 $85 $85 $90 $95 $95 $100 $105 +4% - Recognized by compounders

% growth -11% -11% +0% +0% +7% +7% +6% +0% +6% +6% +0% +5% +5%

Lucentis

% Lucentis patient penetration 38% 36% 34% 32% 30% 29% 28% 27% 26% 25% 24% 23% 22% - 4 week treatment duration; 6-7 weeks in practice

# patients receiving Lucentis each year ('000) 195 197 196 194 191 193 196 197 197 197 197 196 195


Lucentis price per dose $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950

Ex-U.S. Lucentis Sa les In Wet AMD ($MM) $2 ,133 $2 ,110 $2 ,100 $2 ,075 $2 ,045 $2 ,075 $2 ,105 $2 ,110 $2 ,115 $2 ,115 $2 ,110 $2 ,100 $2 ,090 +0% - Market leader

% growth +10% -1% -0% -1% -1% +1% +1% +0% +0% +0% -0% -0% -0%

Eylea

% Eylea patient penetration 7% 16% 22% 25% 27% 28% 29% 30% 31% 32% 33% 34% 35% - 8 week treatment duration

% penetration of non-Avastin market 16% 31% 39% 44% 47% 49% 51% 52% 49% 46% 44% 43% 43% - Rapid uptake, but less so than the U.S.

# patients receiving Eylea each year ('000) 37 87 127 151 172 187 203 219 235 252 270 290 310


Eylea price per dose $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850 $1,850

Ex-U.S. Ey lea Sa les In Wet AMD ($MM) $370 $760 $1 ,010 $1 ,205 $1 ,365 $1 ,485 $1 ,615 $1 ,740 $1 ,870 $2 ,005 $2 ,150 $2 ,305 $2 ,470 +11%

% growth +1847% +105% +33% +19% +13% +9% +9% +8% +7% +7% +7% +7% +7%

OHR-102

% treated patients eligible for anti-PDGF treatment 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% 66% - Per consultants; most will want better vision

# treated patients eligible for anti-PDGF treatment ('000) 339 360 380 399 419 440 462 481 500 520 541 562 585 - Potential launch in early 2020; could be conserv.

% OHR-102 patient penetration 1% 6% 13% 18% 22% 25% - Assumes PDGF competition

# patients receiving OHR-102 each year ('000) 5 30 65 97 124 146 - Assumes 2.5 years from start-finish for PIII

Average # bottles per patient per year 11.0 10.8 10.5 10.3 10.0 10.0 - Assume it stabilizes around 10 bottles per year

OHR-102 price per dose $500 $500 $500 $500 $500 $500 - Assume price 2/3 of U.S.

Ex-U.S.OHR-102 Sa les In Wet AMD ($MM) $25 $160 $340 $500 $620 $730 +96% - Quick uptake , but s lower than U.S.

% gr ow th +540% +113% +47% +24% +18%

Ex-U.S. Wet AMD

Lucentis Sales ($MM) $2,133 $2,110 $2,100 $2,075 $2,045 $2,075 $2,105 $2,110 $2,115 $2,115 $2,110 $2,100 $2,090 +0%

% growth +10% -1% -0% -1% -1% +1% +1% +0% +0% +0% -0% -0% -0%

Eylea Sales ($MM) $370 $760 $1,010 $1,205 $1,365 $1,485 $1,615 $1,740 $1,870 $2,005 $2,150 $2,305 $2,470 +11%

% growth +1847% +105% +33% +19% +13% +9% +9% +8% +7% +7% +7% +7% +7%

OHR-102 Sales ($MM) $25 $160 $340 $500 $620 $730 +96% - Assumes PDGF competition

% growth +540% +113% +47% +24% +18%

TOTAL Ex-U.S. WET AMD SALES ($MM) $2 ,503 $2 ,870 $3 ,110 $3 ,280 $3 ,410 $3 ,560 $3 ,720 $3 ,875 $4 ,145 $4 ,460 $4 ,760 $5 ,025 $5 ,290 +4%

% gr ow th +27% +15% +8% +5% +4% +4% +4% +4% +7% +8% +7% +6% +5%

W.W. Wet AMD

Lucentis Sales ($MM) $3,443 $3,010 $2,800 $2,765 $2,725 $2,790 $2,855 $2,890 $2,930 $2,960 $2,990 $3,015 $3,040 +1%

% growth +7% -13% -7% -1% -1% +2% +2% +1% +1% +1% +1% +1% +1%

Eylea Sales ($MM) $1,704 $2,300 $2,710 $2,950 $3,200 $3,365 $3,545 $3,750 $3,960 $4,180 $4,410 $4,655 $4,915 +7%

% growth +105% +35% +18% +9% +8% +5% +5% +6% +6% +6% +6% +6% +6%

OHR-102 Sales ($MM) $50 $220 $555 $940 $1,245 $1,520 $1,785 +98% - Assumes PDGF competition

% growth +340% +152% +69% +32% +22% +17%

TOTAL W.W. WET AMD SALES ($MM) $5 ,147 $5 ,310 $5 ,510 $5 ,715 $5 ,925 $6 ,155 $6 ,450 $6 ,860 $7 ,445 $8 ,080 $8 ,645 $9 ,190 $9 ,740 +4%

% gr ow th +27% +3% +4% +4% +4% +4% +5% +6% +9% +9% +7% +6% +6%

www.cowen.com8





On the following pages, we provide our Ohr Pharma annual P&L and DCF.

Figure 3 Ohr Pharma Annual P&L

Source: Cowen and Company

Fiscal Year E nded September 30 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 5YR C GR C omments

O HR-102

U.S. Wet AMD Sales ($MM) $50.0 $195.0 $395.0 $600.0 $745.0 $900.0 $1,055.0 +78% - Topical anti-angiogenic eye drop for wet AMD

% Growth +290% +103% +52% +24% +21% +17% - Currently being tested in other retina disorders

Ex-U.S. Wet AMD Sales ($MM) $25.0 $160.0 $340.0 $500.0 $620.0 $730.0 +96% - COM patent to 2029; formulation to 2030

% Growth +540% +113% +47% +24% +18% - Final Phase II data by end of March; Potential Q2:2015 Phase III start

Total O hr Rev enues $0.0 $0.0 $0.0 $0.0 $0.0 $50.0 $220.0 $555.0 $940.0 $1,245.0 $1,520.0 $1,785.0 +98% - Rapid uptake ex pected; assumes PDGF compet it ion

% Growth NM NM NM NM NM +340% +152% +69% +32% +22% +17%

Cost of Goods $0.0 $0.0 $0.0 $0.0 $0.0 $5.0 $22.0 $50.0 $84.6 $99.6 $121.6 $125.0

Gross Profit $0.0 $0.0 $0.0 $0.0 $0.0 $45.0 $198.0 $505.1 $855.4 $1,145.4 $1,398.4 $1,660.1

Gross Margin NM NM NM NM NM 90.0% 90.0% 91.0% 91.0% 92.0% 92.0% 93.0% - 90%+ margins; easy to manufacture

SG&A $5.1 $7.5 $15.0 $20.0 $25.0 $50.0 $90.0 $150.0 $240.0 $290.0 $340.0 $390.0 +64% - Assumes an initial sales force of 50 reps

% of Revs NM NM NM NM NM 100.0% 40.9% 27.0% 25.5% 23.3% 22.4% 21.8% - Commercial hiring to begin in mid-2016

R&D $4.0 $20.0 $40.0 $30.0 $20.0 $15.0 $15.0 $10.0 $10.0 $10.0 $10.0 $10.0 -6% - Phase III wet AMD program expected to cost $75MM; bell curve-like

% of Revs NM NM NM NM NM 30.0% 6.8% 1.8% 1.1% 0.8% 0.7% 0.6%

Operating Expenses $9.1 $27.5 $55.0 $50.0 $45.0 $65.0 $105.0 $160.0 $250.0 $300.0 $350.0 $400.0 +31%

% of Revs NM NM NM NM NM 130.0% 47.7% 28.8% 26.6% 24.1% 23.0% 22.4%

Operating Income ($9.1) ($27.5) ($55.0) ($50.0) ($45.0) ($20.0) $93.0 $345.1 $605.4 $845.4 $1,048.4 $1,260.1 NM

% Operating Margin NM NM NM NM NM NM 42.3% 62.2% 64.4% 67.9% 69.0% 70.6%

Non-Operating Income

Interest Income $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Interest 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

Other Income (0.0) (2.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non-Operating Income ($0.0) ($2.0) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Pretax Income ($9.1) ($29.5) ($55.0) ($50.0) ($45.0) ($20.0) $93.0 $345.1 $605.4 $845.4 $1,048.4 $1,260.1 NM

% of Revs NM NM NM NM NM NM 42.3% 62.2% 64.4% 67.9% 69.0% 70.6%

Income Taxes $32.6 $120.8 $211.9 $295.9 $366.9 $441.0 NM - Assumes no NOLs

Income Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% - Standard U.S. corporate tax rate

Net Income - Operations ($9.1) ($29.5) ($55.0) ($50.0) ($45.0) ($20.0) $60.5 $224.3 $393.5 $549.5 $681.5 $819.0 NM

% Net Margin NM NM NM NM NM NM 27.5% 40.4% 41.9% 44.1% 44.8% 45.9%

Extraordinary Items

Adjusted Net Income ($9.1) ($29.5) ($55.0) ($50.0) ($45.0) ($20.0) $60.5 $224.3 $393.5 $549.5 $681.5 $819.0 NM

Interest Add-Back $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

E PS (Non-GAAP) - B efore E x . It ems ($0.41) ($1.00) ($1.85) ($1.60) ($1.40) ($0.60) $1.80 $6.40 $10.95 $14.85 $17.95 $21.00 NM - True prof it abilit y reached in 2020

% Growth NM NM NM NM NM NM NM +256% +71% 36% 21% 17%

EPS - Extraordinary Items $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

EPS - Adjusted ($0.41) ($1.00) ($1.85) ($1.60) ($1.40) ($0.60) $1.80 $6.40 $10.95 $14.85 $17.95 $21.00 NM

Shares Outstanding (MM) 22.1 29.0 30.0 31.0 32.0 33.0 34.0 35.0 36.0 37.0 38.0 39.0 +3% - Aassuming some onward dilution from options

OHR PHARMA - 2015-2025 EST IMATED ANNUAL EPS BUILDUP ($MM)

www.cowen.com 9





Figure 4 Ohr Pharma DCF Suggests $25 Per Share

Source: Cowen and Company

Assumptions: Output:

Increase in WC 5.0% Equity Value $829.1

Discount Rate 19.5% Est. Sha re Pr i ce $25 .0

Fully Diluted Shares 33.5 Debt $0.0 Notes:

Cash $35.0 Netted $26-27MM from Feb 11 offering

Enterprise Value $794.1 Burned ~$2.8MM Q1; expected to be higher in Q2

2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E

Total Revenues $0.0 $0.0 $0.0 $0.0 $0.0 $50.0 $220.0 $555.0 $940.0 $1,245.0 $1,520.0 $1,785.0 $2,040.0 $2,275.0 $2,500.0 $2,140.0 $1,250.0 $550.0 $200.0 $100.0 $100.0 $100.0

% Change NM NM NM NM NM NM +340% +152% +69% +32% +22% +17% +14% +12% +10% -14% -42% -56% -64% -50% +0% +0%

Cost of Goods $0.0 $0.0 $0.0 $0.0 $0.0 $5.0 $22.0 $50.0 $84.6 $99.6 $121.6 $125.0 $142.8 $159.3 $175.0 $149.8 $87.5 $38.5 $14.0 $7.0 $7.0 $7.0

Gross Profit $0.0 $0.0 $0.0 $0.0 $0.0 $45.0 $198.0 $505.1 $855.4 $1,145.4 $1,398.4 $1,660.1 $1,897.2 $2,115.8 $2,325.0 $1,990.2 $1,162.5 $511.5 $186.0 $93.0 $93.0 $93.0

Gross Margin - Total NM NM NM NM NM 90.0% 90.0% 91.0% 91.0% 92.0% 92.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0% 93.0%

SG&A $5.1 $7.5 $15.0 $20.0 $25.0 $50.0 $90.0 $150.0 $240.0 $290.0 $340.0 $390.0 $430.0 $475.0 $500.0 $450.0 $250.0 $125.0 $50.0 $25.0 $20.0 $20.0

% of Revs NM NM NM NM NM 100.0% 40.9% 27.0% 25.5% 23.3% 22.4% 21.8% 21.1% 20.9% 20.0% 21.0% 20.0% 22.7% 25.0% 25.0% 20.0% 20.0%

R&D $4.0 $20.0 $40.0 $30.0 $20.0 $15.0 $15.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $7.5 $5.0 $5.0 $5.0 $5.0

% of Revs NM NM NM NM NM 30.0% 6.8% 1.8% 1.1% 0.8% 0.7% 0.6% 0.5% 0.4% 0.4% 0.5% 0.8% 1.4% 2.5% 5.0% 5.0% 5.0%

Operating Expenses $9.1 $27.5 $55.0 $50.0 $45.0 $65.0 $105.0 $160.0 $250.0 $300.0 $350.0 $400.0 $440.0 $485.0 $510.0 $460.0 $260.0 $132.5 $55.0 $30.0 $25.0 $25.0

% of Revenues NM NM NM NM NM 130.0% 47.7% 28.8% 26.6% 24.1% 23.0% 22.4% 21.6% 21.3% 20.4% 21.5% 20.8% 24.1% 27.5% 30.0% 25.0% 25.0%

Operating Income ($9.1) ($27.5) ($55.0) ($50.0) ($45.0) ($20.0) $93.0 $345.1 $605.4 $845.4 $1,048.4 $1,260.1 $1,457.2 $1,630.8 $1,815.0 $1,530.2 $902.5 $379.0 $131.0 $63.0 $68.0 $68.0

% Operating Margin NM NM NM NM NM NM 42.3% 62.2% 64.4% 67.9% 69.0% 70.6% 71.4% 71.7% 72.6% 71.5% 72.2% 68.9% 65.5% 63.0% 68.0% 68.0%

Other Income (0.0) (2.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Adjusted EBIT ($9.1) ($29.5) ($55.0) ($50.0) ($45.0) ($20.0) $93.0 $345.1 $605.4 $845.4 $1,048.4 $1,260.1 $1,457.2 $1,630.8 $1,815.0 $1,530.2 $902.5 $379.0 $131.0 $63.0 $68.0 $68.0

% of Revs NM NM NM NM NM NM 42.3% 62.2% 64.4% 67.9% 69.0% 70.6% 71.4% 71.7% 72.6% 71.5% 72.2% 68.9% 65.5% 63.0% 68.0% 68.0%

Taxes $32.6 $120.8 $211.9 $295.9 $366.9 $441.0 $510.0 $570.8 $635.3 $535.6 $315.9 $132.7 $45.9 $22.1 $23.8 $23.8

Income Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

NOPAT ($9.1) ($29.5) ($55.0) ($50.0) ($45.0) ($20.0) $60.5 $224.3 $393.5 $549.5 $681.5 $819.0 $947.2 $1,060.0 $1,179.8 $994.6 $586.6 $246.4 $85.2 $41.0 $44.2 $44.2

Adjustments: Terminal

Capex ($0.1) ($0.3) ($0.5) ($1.0) ($2.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) ($3.0)

Depreciation & Amortization ($0.5) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0)

Change In Working Capital $3.4 $5.0 $2.5 $0.0 ($5.0) ($10.0) ($10.5) ($11.0) ($11.6) ($12.2) ($12.8) ($13.4) ($14.1) ($14.8) ($15.5) ($16.3) ($17.1) ($18.0) ($18.9) ($19.8) ($20.8) ($21.8)

Free Cash Flow ($6.3) ($25.8) ($54.0) ($52.0) ($53.0) ($34.0) $46.0 $209.3 $377.9 $533.4 $664.7 $801.6 $929.1 $1,041.2 $1,160.2 $974.3 $565.5 $224.4 $62.3 $17.2 $19.4 $18.4 $94.21

OHR PHARMA DCF

www.cowen.com10





Ohr Pharma Is Going All In On Ophthalmology

The Companys lead program is OHR-102, which is being developed as a combination

therapy with anti-VEGFs for wet AMD. OHR-102 is currently in a Phase II clinical

development program, which has already reported positive interim data, and final data

is expected to readout by mid-to-late March. If the final data is positive, which we and

our consultants believe has a good probability of occurring, Ohr plans to move OHR-

102 into Phase III clinical trials in Q2:2015. Worth noting, Ohr has already met with the

FDA and confirmed potential Phase III plans for the program. Follow-on indications of

PVR, RVO, and DME are anticipated next for OHR-102 and the approach appears

logical given the success of on-market wet AMD treatments in these areas. For RVO

and PVR, OHR-102 is being tested in investigator-sponsored studies with Phase II data

to readout later this year, potentially by the end of H1:2015. For DME, the Company is

running its own Phase II study with a final data to readout around mid-2016.

Additionally, the Company has a research agreement with Alcon a Novartis company

which is one of the largest ophthalmology players in the world with over $10B in

annual revenues. Clearly, this provides a source of validation for Ohrs programs and

expertise in ophthalmology. This collaboration is testing Ohrs sustained-release

hydrogel platform technology and encompasses four active research programs in

glaucoma, steroid-induced glaucoma, eye allergy, and retinal disease. Depending on

the outcome of these early programs with partner Alcon, Ohr anticipates potentially

filing an IND for one program by the end of H1:2015.

Figure 5 Ohr Pharmaceuticals Clinical Development Pipeline

Source: Ohr Pharma

OHR-102 Has The Potential To Be The First Topical Eye Drop For Retinal Disease

Our consultants believe that despite previous topical failed programs for wet AMD, it

will only be a matter of time before an eye drop potent enough is found with the right

dosage that reaches the retina. We believe Ohrs OHR-102 (squalamine) might be the

one. OHR-102 is a first-in-class molecule anti-angiogenic compound that inhibits

multiple growth factors: vascular endothelial growth factor (VEGF), platelet-derived

growth factor (PDGF), and basic fibroblast growth factor (bFGF). VEGF is a signaling

If the final data is positive, which we and our

consultants believe has a good probability of

occurring, Ohr plans to move OHR-102 into

Phase III clinical trials in Q2:2015. Worth noting,

Ohr has already met with the FDA and confirmed

potential Phase III plans for the program.

Our consultants believe that despite previous

topical failed programs for wet AMD, it will only

be a matter of time before a drop potent enough

is found with the right dosage that reaches the

retina. We believe Ohrs OHR-102 (squalamine)

might be the one.

www.cowen.com 11





protein that stimulates vasculogenesis and angiogenesis. In other words, VEGF

promotes the growth and formation of blood vessels. PDGF has a similar function in

blood vessel formation as it helps regulate cell growth and division. bFGF is present in

basement membranes and in the subendothelial extracellular matrix of blood vessels

and when activated, it is thought to also aid in the formation of new blood vessels.

Thus, OHR-102 has a three-pronged anti-angiogenic approach/mechanism. Inhibiting

VEGF has been well-validated by the market leading treatments for retinal disease,

Eylea, Lucentis, and Avastin. Targeting PDGF has largely gained credibility over the

past few years as Ophthotech and now Ohr has reported significant visual acuity

benefits in Phase II. Also, several large players in the ophthalmology space, such as

Regeneron and Allergan have early PDGF programs earlier in clinical development.

Interestingly, elevated bFGF has been implicated in the pathophysiology of

proliferative diabetic retinopathy (PVR) and retinal vein occlusions (RVO). Additionally,

Eylea, Lucentis, Avastin, and Fovista are all large biologic molecules (recombinant

proteins; monoclonal antibodies; aptamers) and are therefore too large to enter the

cell. They remain in the extracellular space and work by neutralizing freely diffusible

proteins. Alternatively, OHR-102 is a small molecule and it therefore is able to enter

the intracellular space of vascular endothelial cells. Our consultants note that steroids

work by an intracellular mechanism and are of course, very effective. Not only do

intracellular drugs tend to work well, but our consultants note that they also tend to

have a longer duration of effect well beyond what the kinetics suggest.

Figure 6 Mechanism Comparison Of Wet AMD Agents

Source: Ohr Pharma

The OHR-102 eye drop formulation 0.2% squalamine lactate has emollient

properties to soothe the ocular surface, which results in increased comfort for

Alternatively, OHR-102 is a small molecule and it

therefore is able to enter the intracellular space

of vascular endothelial cells. Our consultants

note that steroids work by an intracellular

mechanism and are of course, very effective. Not

only do intracellular drugs tend to work well, but

our consultants note that they also tend to have a

longer duration of effect well beyond what the

kinetics suggest.

www.cowen.com12





patients, particularly in the elderly patient population which is the vast majority of wet

AMD patients. Moreover, OHR-102 has been shown to have improved residence time

on the ocular surface along with minimized uptake into the aqueous humor.

Additionally, OHR-102 has demonstrated trans-scleral permeability into the choroid

with increased retention time in the posterior sclera/choroid. The sclera is known as

the white of the eye and it is the opaque, fibrous, protective outer layer of the eye. Just

inside that is the choroid, which is the vascular layer of the eye, contains connective

tissue, and lies between the retina and the sclera. Hence, OHR-102 has been shown

penetrate the tissue immediate to the retina, which is the primary target of treatment

for wet AMD and other retinal diseases.

Figure 7 OHR-102 Reaches The Posterior

Sclera/Choroid

Source: Ohr Pharma

Per below and as presented at ARVO 2012, a preclinical single-dose biodistribution

study was conducted by administering OHR-102 to the front of the eye in Dutch

belted rabbits. We would note that all the large ophthalmology players depend on

these standardized preclinical models and our consultants believe results in these

models to be fairly predictive of drug effects in the human eye. In this study, OHR-102

was shown to achieve supratherapeutic levels of ~90ng/g in sclera/choroid tissue. Of

note, Ohr estimates that approximate levels of 12ng/g in the sclera/chroid tissue are

the threshold drug concentration required to inhibit neovascularization. Interestingly,

these supratherapeutic levels of OHR-102 are reached rapidly in 15 minutes after

administration and maintained up to 24 hours resulting in significant residence time.

We would note that this is just a single dose, not the BID dosing regimen that is being

tested in clinical trials. Therefore, BID dosing of OHR-102 appears to deliver more than

sufficient drug levels to the eye.

OHR-102 has been shown to have improved

residence time on the ocular surface along with

minimized uptake into the aqueous humor.

Additionally, OHR-102 has demonstrated trans-

scleral permeability into the choroid with

increased retention time in the posterior

sclera/choroid.

Interestingly, these supratherapeutic levels of

OHR-102 are reached rapidly in 15 minutes after

administration and maintained up to 24 hours

resulting in significant residence time.

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Figure 8 Single Dose Biodistribution: OHR-102 Concentrations In The

Sclera/Choroid

Source: Ohr Pharma

Ohr also measured multi-dose biodistribution of OHR-102 in rabbit posterior

sclera/choroid tissue. Trough level drug concentrations of OHR-102 were measured

over 14 days and the data was presented at ARVO 2012. Both once-daily and twice-

daily dosing regimens were employed. At day 7, supratherapeutic and statistically

significant (p

We acknowledge that despite this data, many are still skeptical on the ability for drops

to get to the back of the eye. We believe this is largely because previous topical wet

AMD eye drop programs including GSKs pazopanib or Votrient have failed.

Additionally, there was an old IV formulation of squalamine that was terminated in wet

AMD, but this was due to its short half-life, which didnt provide adequate coverage

when dosed weekly, and the systemic dosing, which led to subtherapeutic drug levels

in the eye and systemic safety concerns. With that said, the IV formulation did show a

dose response and positive visual and anatomical benefits. Per the data above, OHR-

102 is clearly not systemic and certainly has an adequate coverage of 24 hours.

Whether or not investors believe eye drops can reach the back of the eye, the clinical

data with OHR-102 should ultimately win out and put this controversy to bed and we

believe that the interim data was a solid start in the right direction.

AMD Is The Leading Cause Of Blindness In People Over 55

Age-related Macular Degeneration (AMD) is the leading cause of blindness in people

over the age of 55. Legal blindness is defined as a person who is only able to see

20/200 or less with glasses. According to the National Eye Institute, more than 1MM

people are diagnosed with AMD annually and the incidence is expected to grow as

the population ages. Approximately 15M people in the U.S. have macular

degeneration, of which 10-15% have active blood vessel growth and leakage (wet

AMD). The medical literature suggests there are approximately 1.5M people with wet

AMD in the U.S., although Roche/Genentech estimates the size of the treatable

market is at least a third of that. We estimate the U.S. AMD market opportunity at

$3B+, with a similar opportunity ex-U.S. The market opportunity for AMD drugs may

be further expanded by penetration into other back-of-the-eye conditions such as

retinal vein occlusion or diabetic retinopathy and adjuncts/improvement to existing

therapies such as the new PDGF drugs in development.

What Is AMD?

AMD is subdivided into wet lesions (characterized by excessive new blood vessel

formation in the retina and fluid buildup) and dry AMD (a precursor of the wet form;

thinning of the macular tissues and disturbances in its pigmentation). AMD gradually

destroys a persons central vision function. The early stages of the disease may be

barely noticeable to some, but symptoms can vary. Sometimes only one eye loses

vision and the other maintains good vision for many years. Some patients have milder

symptoms in both eyes that may not impair vision significantly for many years. Other

frequent symptoms include distortion, or when straight lines look wavy, such as the

lines on an Amsler grid (an ophthalmic diagnostic tool in the picture below) or if a

doorframe or blinds look bent. Sometimes colors don't look quite right or there may be

a purple or gray spot in the center vision. (See picture below.)

According to the National Eye Institute, more

than 1MM people are diagnosed with AMD

annually and the incidence is expected to grow

as the population ages. Approximately 15M

people in the U.S. have macular degeneration, of

which 10-15% have active blood vessel growth

and leakage (wet AMD). The medical literature

suggests there are approximately 1.5M people

with wet AMD in the U.S., although

Roche/Genentech estimates the size of the

treatable market is at least a third of that.

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Figure 10 AMD & Amsler Grid Diagnostic Tool

Source: Cowen and Company; Macular Degeneration Foundation

Upon onset of macular degeneration, many people have trouble adjusting quickly

between bright sunlight or dim light or shadows. This may be especially dangerous

when driving in bright sunlight and then entering the shade or vice versa. Whereas a

normal retina takes 3-5 minutes to adjust from bright light to dim (when entering a

movie theater, for example), a person with macular degeneration may take 8-12

minutes or longer.

Figure 11 The Progression Of Wet AMD

Source: Molecular Partners

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Etiology Of AMD Not Well Understood, But VEGF Is Clearly An Important Player

Any number of factors, including genetics, age, race, gender, menopause, nutrition,

smoking, and exposure to sunlight, may cause AMD. Based on the original striking

results from pan-VEGF inhibition therapy with Roches Lucentis, it is clear that VEGF is

an important driver of new blood vessel formation in the retina and conversion from

dry to wet AMD. Research is ongoing to identify additional molecules that drive the

wet AMD process and to better understand the pathophysiologic processes that result

in VEGF overexpression.

There Are Three Categories Of Wet AMD: Occult, Minimally Classic, and Classic

Based on the appearance of the blood vessels at the back of the eye when visualized

using fluorescein angiography, wet AMD can be subdivided into predominantly classic

(25%), minimally classic (35%) and occult (40%). In predominantly classic choroidal

neovascularization (CNV), greater than 50% of the neovascular AMD lesions can be

clearly defined, and this is generally regarded as the most aggressive subtype. In

minimally classic choroidal neovascularization, 1% to 50% of the neovascular AMD

lesions can be clearly defined, and this is generally regarded as the intermediate

subtype in terms of progression. In occult choroidal neovascularization, none of the

neovascular lesions can be clearly defined, and this is generally regarded as being the

least aggressive subtype. It is helpful to think of the AMD lesion as an expanding

vascular membrane which penetrates into an area underneath the retina. Angiography

lights up the blood vessels in this membrane, and physicians use the angiogram to

discern the outline of the membrane. However, leakage of dye from these blood

vessels can obscure a physicians ability to clearly see the membrane, and the extent

to which this visibility is obscured determines its classification. While it is important to

identify lesion subtypes to determine potential eligibility for photodynamic therapy

with Visudyne, the intra-vitreous anti-VEGF therapies have utility across wet AMD

subtypes, making differentiation less critical.

The Wet AMD Treatment Paradigm Has And Is Expected To Continue To Evolve

Rapidly

Current treatment methodologies for wet AMD include three options: anti-VEGF

therapy, photodynamic therapy (PDT), and laser photocoagulation. Retina specialists

are quick to adopt new therapies, often before they have undergone rigorous clinical

testing or have received FDA approval. The wet AMD treatment paradigm therefore

evolves rapidly and sometimes unexpectedly.

The First Wave Of AMD Treatment Used Lasers

Until March 2000, the only primary treatment for neovascular wet AMD was laser

coagulation. This technique involves the use of a strong light source targeted on

extrafoveal and juxtafoveal CNV lesions to coagulate the diseased tissue. The laser

produces a thermal effect within the lesion that causes necrosis of its cellular

components. In the 1980s, the National Eye Institute conducted the Macular

Degeneration Photocoagulation Studies (MPS), and the results demonstrated that

photocoagulation of well-demarcated CNV membranes effectively prevented large

decreases in visual acuity compared with observation for CNV. However, the thermal

effect of the laser can damage viable photoreceptor cells, resulting in retinal scarring

and loss of visual acuity. As such, use of laser coagulation in the current practice

setting is rare, as superior treatment options discussed below have emerged.

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Visudyne: An Outdated Procedure For Wet AMD

Visudyne was originally approved in 2000 and was most recently acquired by Valeant

(from QLT) in September 2012 for $125MM suggesting that its use is very limited.

Visudyne is a photosensitizer that attaches to lipoproteins, which tend to accumulate

in rapidly proliferating cells. Visudyne traps energy from light and converts oxygen in

cells to a highly energized state that results in cell death. Visudyne therefore must be

activated at the site of desired effect by light. Photodynamic therapy (PDT) with

Visudyne consists of administering the light-activated drug by intravenous infusion

and then shining a light to the back of the eye to activate Visudyne in the retina.

Clinicians must therefore purchase the machinery to administer the light (up to $40K

in fixed costs), and hire personnel to administer the intravenous infusion. Therapy is

repeated every three months if patients continue to have active lesions, and our

consultants estimate that, on average, patients receive three to four treatments before

the CNV lesion is converted to a quiescent scar. Side effects of Visudyne include

transient skin sensitivity to bright light, acute onset and transient back pain, and

rarely, acute visual deterioration, which may not be reversible. Successful pan-VEGF

therapies Lucentis, Avastin, and Eylea have since significantly eroded Visudynes

commercial presence.

Anti-Angiogenesis Treatments Dominate The Wet AMD Market

Eyetechs Macugen, the first anti-VEGF therapy, was approved for wet AMD in 2004

and rapidly gained widespread adoption with an outstanding commercial launch.

Macugen is an aptamer that binds to and inhibits activity of the VEGF165 isoform and

was shown to decrease the rate of visual acuity loss in wet AMD patients versus

placebo in the Phase II/III VISION trials. Macugen revenue plummeted in 2005-2007 as

pan-VEGF antibodies emerged as a superior treatment option for preserving or

restoring vision of wet AMD patients. Roches/Novartiss Lucentis is a monoclonal

antibody fragment targeting all VEGF isoforms and has set a new bar for wet AMD

therapies. Data from the Phase II/III MARINA trial of Lucentis demonstrated an

impressive ability to improve visual acuity in wet AMD patients, a goal never before

achieved in advanced clinical trials for this indication. Lucentis secured U.S. approval

in June 2006 and EMEA approval in January 2007. The drugs U.S. launch was very

impressive (Roche/Genentech estimated that Lucentis achieved 55% penetration of

the wet AMD market just 6 months after FDA approval), relegating Macugen and

photodynamic therapy to niche market roles. While waiting for Lucentis to reach the

market, retina specialists began to use off-label, compounded intravitreous Avastin, a

cheap and commercially available anti-VEGF option. Even before there was Phase III

data to support its use, intravitreous Avastin nonetheless captured the majority of the

remaining (non-Lucentis treated) market and is the most commonly used anti-VEGF

for the treatment of wet AMD.

In June 2011, the FDAs Dermatologic and Ophthalmic Drugs Advisory Committee

voted unanimously in favor of approving Eylea for wet AMD at a dose of 2mg Q8W,

following three initial doses given monthly. The panel was benign with no real points

of contention. After a minor hiccup in which the PDUFA date was pushed back due to

clarifying questions from the FDA regarding the CMC section, Eylea was FDA

approved in November 2011. In line with the panels conclusions, Eyleas

recommended dose is 2mg Q8W, following three initial loading doses given monthly.

In turn, the growth of Regenerons Eylea is the most recent example of the rapid

market transformation in this market and has expanded upon advances made by the

earlier agents by offering a less frequent injection schedule (every 8 weeks vs. every 4

weeks). Following the success of anti-VEGF therapies Lucentis, Eylea, and Avastin, the

most effective treatment for wet AMD is acknowledged to be angiogenesis inhibition.

Given its vascular and progressive nature, AMD thrives on new blood vessel growth.

In turn, the growth of Regenerons Eylea is the

most recent example of the rapid market

transformation in this market and has expanded

upon advances made by the earlier agents by

offering a less frequent injection schedule (every

8 weeks vs. every 4 weeks).

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By blocking the development of new blood vessels, supply of oxygen and nutrients is

cut off and, therefore, the diseases proliferation throughout the back of the eye.

Over the past 1-2 years, surveyed physicians believe that the number of wet AMD

patients in their practice has grown modestly by 5-10% and that approximately 50% of

patients are treated with Roches Avastin. The physician panelists believe that the slow

increase in wet AMD patients is due to the chronic nature of the disease. Additionally,

the amount of Avastin use depends on the size of the practice as larger groups are

more familiar with billing and will therefore use more Avastin (perhaps more than

50%), while smaller private groups may be closer to using Avastin in 25% of patients.

Avastin substitution has and continues to be a barrier to Lucentiss commercial

success in the U.S. Compounding pharmacies reconstitute the significantly cheaper

Avastin ($50 versus just under $2000 a dose) for intraocular injection despite its lack

of FDA approval for AMD. However, the current main competition is from Eylea, which

our Biotech team estimates will reach approximately $2.2B and $2.8B in 2015 and 2019

U.S. sales, respectively. In the U.S., our Pharma team estimates Lucentis sales of $1.7B

in 2015, decreasing to $1.5B in 2019 due to increased competition and as U.S. patents

begin to expire. Our Pharma team estimates ex-U.S. Lucentis sales of $2.5B in 2015,

declining to $1.8B in 2019 as the ex-US patents expire and competition continues to

increase.

Combination Therapy With Anti-PDGFs To Come Next For Retinal Disease

Fovista, an anti-PDGF aptamer, is the PDGF program that is furthest along in clinical

development. It is used in combination with anti-VEGF therapy (rather than in place of

it). OHR-102 due to potentially enter Phase III by the end of H1:2015 upon successful

final Phase II data is the second drug furthest along in clinical development and is

catching up to Fovista quickly. Allergan/Molecular Partners and Regeneron also have

PDGF programs, but they are much earlier-stage than Fovista and OHR-102. Anti-

VEGFs have revolutionized the treatment of wet AMD, but they produce most of their

improvement in about 4 months and then there is a plateau in efficacy. Moreover,

patients must be continuously dosed with frequent anti-VEGF to maintain the plateau;

data from several large trials were shown to suggest that switching from monthly

dosing to PRN results in a loss of efficacy. The biological explanation for this may be

that anti-VEGFs cause regression of tip cells at the distal end of neovascularization,

but the bulk of the vessel outgrowths are protected from the anti-VEGF by a lining of

pericytes. Anti-PDGF agents, in combination with the anti-VEGFs, denude the

overgrown vessels of pericytes and cause regression of the outgrowth. Current

development of anti-VEGF agents is aimed at extending the duration of treatment

thereby allowing for a fewer number of injections a year, or better compliance as

recent agents have largely failed to meaningfully increase visual acuity in long-term

studies. However, this dogma appears to be changing with advent of anti-PDGF

agents. PDGF agents in the case of Fovista and OHR-102 have demonstrated

significant visual acuity gains on top of anti-VEGF treatments when used in

combination. For wet AMD, a disease where patients ultimately lose their vision,

increased visual acuity is paramount. Ultimately, our consultants suggest that the vast

majority of treated AMD patients (2/3 and up) will want better visual acuity and

therefore go on PDGF treatment. Lastly, our consultants note that as many as 10-20%

of their patients are not adequately managed by the current anti-VEGF options, and

therefore there is also a need for more potent alternatives to help better manage the

disease in refractory patients.

Over the past 1-2 years, surveyed physicians

believe that the number of wet AMD patients in

their practice has grown modestly by 5-10% and

that approximately 50% of patients are treated

with Roches Avastin. The physician panelists

believe that the slow increase in wet AMD

patients is due to the chronic nature of the

disease.

For wet AMD, a disease where patients ultimately

lose their vision, increased visual acuity is

paramount. Ultimately, our consultants suggest

that the vast majority of treated AMD patients

(2/3 and up) will want better visual acuity and

therefore go on PDGF treatment. Lastly, our

consultants note that as many as 10-20% of their

patients are not adequately managed by the

current anti-VEGF options, and therefore there is

also a need for more potent alternatives to help

better manage the disease in refractory patients

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Consultants Believe Early OHR-102 Visual Acuity Data Are Surprising And Intriguing; Final Phase II Data Due Mid-to-Late March

In June 2014, Ohr announced positive interim topline clinical results of a Phase II

study in wet AMD. Prior to the positive data release, few had any expectations for the

program much less an observed visual acuity benefit. However, since the data

which produced significant visual acuity benefits and our consultants believe is very

surprising and intriguing that perception has changed and we now approach the

final Phase II data readout in mid-to-late March with expectations of a visual acuity

benefit. While there is still substantial risk to any wet AMD data readout, OHR-102

appears to have a strong possibility of repeating the interim data. If this occurs, not

only would the perception of the program be strengthened even more, but it would be

significantly de-risked as it heads into Phase III with the same exact clinical endpoint.

Upon potential successful final Phase II data, Ohr has stated that they would be able

to initiate the Phase III program by the end of Q2:2015. We estimate that the time to

topline data could be 2-2.5 years accounting for 12-18 months of enrollment and the 9

month primary endpoint. 2.5 years would put the topline data readout at late 2017.

Since Ohr has Fast Track status, it could begin filing a rolling NDA submission during

the trial and then submit the final topline 9 month primary endpoint data in early 2018.

In essence, Ohr could receive approval even before the final 2-year study time point

just like Eylea. This would allow for a potential approval and launch by early 2019.

Lastly, we would note that this timeline could potentially be conservative by 6 months.

For Europe, Ohr plans to meet with regulators soon to nail down the requirements for

the Phase III program. However, we would note that Ohr will be measuring the primary

endpoint out to 12 months in case they require the standard 12 month endpoint.

Additionally, it will be a global program with clinical sites in the US and EU. It is quite

possible that the EU submission could come shortly after the US submission, but we

conservatively assume a year delay in the European launch.

The ongoing Phase II IMPACT study has enrolled 142 patients (completed in April

2014) and is designed to measure the impact of twice-daily OHR-102 on visual acuity

in combination with PRN (as needed) Lucentis versus placebo drops plus PRN

Lucentis. Lucentis retreatment is mandated if any of the following present on SD-OCT:

retinal cystic changes, retinal fluid, subretinal fluid, or meaningful RPE elevation. The

primary endpoint was the reduction in frequency of Lucentis injections at 9 months.

Secondary visual acuity endpoints included mean visual acuity and the proportion of

patients gaining >3 lines (>15 letters; >3 line gainers) of vision acuity at 9 months.

The study was randomized, double-masked, and placebo controlled and enrolled

patients at 23 sites across the US. Enrollment criteria allowed for treatment nave wet

AMD patients with all lesion compositions (classic and occult),

strip pericytes, which can cause serious health consequences. We wonder if Ohrs

topical formulation as opposed to Ophthotechs intravitreal injection may have a

less destructive effect on pericytes and ultimately be safer for diabetic patients. This

could have significant implications for the DME indication for which Ohr has a Phase

II program ongoing and is arguably the largest follow-on indication.

Figure 12 Phase II IMPACT Study Design

Source: Ohr Pharma

The baseline demographics for the IMPACT study were consistent with the enrollment

criteria described above, which called for enrollment of a wide swath of patients with

varying disease severity mild, moderate, and severe patients. Most importantly, the

mean baseline vision of the overall study patient population was 7-10 letters better

than most other wet AMD programs, including the Fovista Phase II program. In

general, this means that Ohr enrolled relatively healthier patients with better vision.

Again, this could have provided a ceiling effect. Similarly, 47% of patients had occult

CNV, which is more moderate disease, while Ophthotechs Phase II studies enrolled

patients with only classic CNV or more aggressive disease. Average lesion size was

also on the larger end of the spectrum for the population and 16% of patients were

diabetic.

Most importantly, the mean baseline vision of the

overall study patient population was 7-10 letters

better than most other wet AMD programs,

including the Fovista Phase II program. In

general, this means that Ohr enrolled relatively

healthier patients with better vision. Again, this

could have provided a ceiling effect.

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Figure 13 Baseline Demographics Of Phase II Impact Study

Source: Ohr Pharma; modified by Cowen and Company

The Reduction Of Lucentis Injection Frequency Endpoint Is Not A Point Of Focus For

Us

Per the study plan, a pre-specified interim analysis was conducted with ~50% of the

planned total patient enrollment completing the study protocol. 62 patients 29 and

33 in the OHR-102 and placebo arms, respectively completed the 9 month treatment

period at interim. Not surprisingly, the primary endpoint, the difference in the

frequency of Lucentis injections, did not meet statistical significance at interim. Given

our knowledge of PRN studies (no difference in year 2 of the VIEW studies with

Eylea/Lucentis) and the fact that no study has shown the ability to reduce Lucentis

injections including Ophthotechs Phase II program we were not surprised by this

result. Furthermore, our panelists at our March 2014 Health Care Conference stated

that a fewer injections endpoint largely isnt clinically relevant. Thus, based on the

data (6.2 Lucentis injections for the OHR-102 arm and 6.4 for the placebo arm), we

find it improbable that this endpoint will meet statistical significance in the final data

set nor do we care. Sure a reduction in injections would be a positive outcome, but

ultimately what matters to clinicians is improving visual acuity. To Ohrs defense, this

primary endpoint was picked almost 4 years ago, where the role of anti-PDGFs in wet

AMD was significantly less defined. This will not be the primary endpoint in Phase III.

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Visual Acuity Endpoints Are All That Matter

When analysis was conducted on secondary, more clinically relevant visual acuity

endpoints, the data suggested a strong visual acuity benefit across the two most

common endpoints, mean visual acuity and the proportion of >3 line gainers. The

mean change in visual acuity at the end of 9 months for OHR-102 eye drops plus

Lucentis PRN was +10.4 letters versus +6.3 letters for placebo plus Lucentis PRN a

mean +4.1 letter improvement in visual acuity. Our consultants note that this 65%

visual acuity benefit is impressive, especially considering the potential ceiling effect,

described previously. However, it was not statistically significant (p=0.18) given the

small study size. With that in mind, our consultants note that it is too early and in too

few patients to believe that OHR-102 wont reach statistical significance on visual

acuity once the final data reads out. Ohr notes that meaningful visual acuity

improvements were seen as early as four weeks and the relative difference in visual

acuity appeared to increase throughout the study as depicted by the figure below. At

all times points evaluated from 4 to 38 weeks, visual acuity gains in the OHR-102

group relative to placebo were observed.

Figure 14 Mean Change In Visual Acuity For OHR-102 +Lucentis vs. Placebo + Lucentis

Source: Ohr Pharma

OHR-102 Hit On The Planned Phase III Primary Endpoint In Few Patients

Additionally, 48.3% of OHR-102-treated patients showed BCVA gains of >3 lines (>15

letters) on a standard ETDRS eye chart compared with 21.2% in the placebo arm

(p=0.025) a statistically significant observation. Additionally, the effect was

sustained throughout the end of the study with no saw tooth-like effects that can be

observed with anti-VEGF agent like Lucentis. Overall, our consultants view both the

mean visual acuity and >3 line gain results as impressive particularly if they hold up

when the final data reads out in the second half of March. Since the interim readout,

Ohr has met with the FDA and received confirmation that the Phase III endpoint will

be the proportion of patients with >3 line visual acuity gains, which was the exact

secondary endpoint that hit statistical significance at the interim readout per above in

The mean change in visual acuity at the end of 9

months for OHR-102 eye drops plus Lucentis

PRN was +10.4 letters versus +6.3 letters for

placebo plus Lucentis PRN a mean +4.1 letter

improvement in visual acuity. Our consultants

note that this 65% visual acuity benefit is

impressive, especially considering the potential

ceiling effect, described previously.

Additionally, 48.3% of OHR-102-treated patients

showed BCVA gains of >3 lines (>15 letters) on

a standard ETDRS eye chart compared with

21.2% in the placebo arm (p=0.025) a

statistically significant observation. Additionally,

the effect was sustained throughout the end of

the study with no saw tooth-like effects that

can be observed with anti-VEGF agent like

Lucentis. Overall, our consultants view both the

mean visual acuity and >3 line gain results as

impressive particularly if they hold up when the

final data reads out in the second half of March.

www.cowen.com 23





only 62 patients. Moreover, our consultants suggest that this endpoint also has a good

chance of reaching statistical significance when the larger, final 142-patient Phase II

data set reads out by the end of March 2015 as the data in 62 patients gives us a

good feel for OHR-102s efficacy. One consultant remarked that it would be

shocking if the final data showed no visual acuity benefit as the first 62 patients are

very typical looking and he would put the odds of success on the >3 line gainers

endpoint pretty high. If it does, our consultants would also consider the final Phase

III program employing the exact same endpoint and study design to be

significantly de-risked. In fact, they believe that upon a successful readout, OHR-102

would have the same probability of success in Phase III as Ophthotech which per

previous physician surveys has been pegged at around 75%. One consultant

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