RedHill Biopharma Ltd.

(NASDAQ: RDHL; TASE: RDHL)

Presentation / January 2013

2

Disclaimer and Forward Looking Statements

This presentation does not constitute an offer or solicitation to acquire and/or sell Company’s shares and/or warrants or to participate in any investment in the Company. Statements in this presentation that are not historical facts (including statements containing "believes," "anticipates," "plans," "expects," "may," "will," "would," "intends," "estimates" and similar expressions) are forward-looking statements. These statements are based on current expectations of future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including risks that we will not have sufficient working capital, unable to obtain FDA or other regulatory approvals for our products, unable to establish collaborations, or that our products will not be commercially viable, among other risks. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. All forward-looking statements included in this presentation are made only as of the date of this presentation. We assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or other factors.

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Key Highlights

• An emerging Israeli biopharmaceutical company (NASDAQ: RDHL; TASE:RDHL)

developing six patent protected drugs in late clinical stages:

• New formulations and combinations of existing drugs

• Reduced risks, time-to-market and costs

• RHB-104 in preparations for two Phase III efficacy trials in Crohn’s, and a Phase IIa in

Multiple Sclerosis

• RHB-105 in preparations for a Phase II/III efficacy trial in H. pylori

• 2 products (RHB-102 and RHB-103) successfully completed pivotal bioequivalence

trials, and in preparations for U.S. New Drug Applications

• Strong balance sheet with no debt; sufficient funding to complete key

development programs

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Drug Field Pre -

Clinical Phase I/II Phase II/III

Planned FDA filing*

RHB-101 Cardio Under Review**

RHB-102 Oncology 2013

RHB- 103 Migraine

2013

RHB-104

Crohn’s

N. America

2014

Europe

2014

Multiple Sclerosis Under Review

RHB-105 H. pylori 2013/4

RHB-106 Gastro Prep. 2014

RHB-107/8*** Analgesic

/Decongestant

Next step

Complete

* Estimated timeline, subject to changes in development plans and/or regulatory (FDA) requirements including complementary and/or additional studies ** Regulatory path is under review – RedHill is exploring regulatory path in the US and Europe *** Term sheet signed. Consummation of the transaction is subject to RedHill’s due diligence and a definitive agreement

Product Pipeline

Pivotal bioequivalence trial successfully completed

Pivotal bioequivalence trial successfully completed

Under Review

Phase IIa

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Leadership

Management Team*

Dror Ben-Asher, CEO P.C.M.I. Ltd., Harvard ,Oxford

Ori Shilo, Deputy CEO, Finance & Operations P.C.M.I. Ltd., Deloitte Israel

Reza Fathi PhD, Senior VP R&D XTL ,PharmaGenics ,Harvard Inst. of Chem. & Cell Biology

Ira Kalfus MD, Chief Medical Officer Lev Pharmaceuticals, Aetna/US Healthcare

Gilead Raday, Senior VP Product & Corporate Development MSc Neurology, MBE Cambridge, Sepal Pharma

Adi Frish, Senior VP Business Development & Licensing Essex Un., Y. Ben-Dror, MediGus

Guy Goldberg, Chief Business Officer Eagle Pharma, ProQuest, Mckinsey, Yale, Harvard

Tom Lang PhD, VP Clinical & Regulatory Affairs*** Serono US, Ciba-Geigy, Janssen, Warner-Lambert

Patrick Mclean, Product Manager Axcan Pharma, Giaconda

Elkan Gamzu PhD, Product Manager *** Cambridge Neurosciences, XTL, Warner Lambert, Roche

Clara Fehrmann, Product Manager Santhera Pharmaceuticals, Merck Canada, ICON Clinical Research

Board of Directors*

Dan Suesskind Teva, VP Finance, Director

Eric Swenden Alterphama nv, Lifeline Scientific

Kenneth Reed MD Dermatologist; Director Minerva Biotechnologies

Shmuel Cabilly PhD Scientist, Director in several life-science companies

Dror Ben-Asher (see management)

Ori Shilo (see management)

Ofer Tsimchi**

Danbar, Polysack, Director in several companies

Alicia Rotbard**

Director in several companies incl. Discount Bank, Kamada

* Personal background relates to selected former and current positions and education ** External Director *** Part time

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Jeff Leighton, PhD (Chairman, Advisory Board) Glaxo, Exogen, Genesis, Inspire, etc.

Prof. Colin Blakemore PhD (Scientific) Oxford ; Past CEO, Medical Research Council, BTG

Prof. Chezy Barenholz (PhD) Scientific) Head Laboratory of Membrane & Liposome R&D Hadassah (Jerusalem), Co-inventor of Doxil™

Werner Tschollar MD (Clinical and Regulatory) Past Senior VP for Worldwide R&D at Novartis

Prof. Ran Oren, MD (Medical) Digestive and Liver expert – Hadassa and The Hebrew University (Jerusalem)

Prof. Thomas Borody MD (Medical) Founder, Centre for Digestive Diseases (Sydney); Mayo Clinic, inventor of RHB - 104

Joshua Schein PhD (Strategic) Past CEO and Co-founder Lev Pharma, Founder Depomed Inc. and Callisto Pharma

Mr. Abe Shwartz (Strategic) Covalon Tech., CEO Cedara Software, Director Merge Healthcare Inc.

Jerry Rosenblatt PhD (Marketing) IIBD Consulting, IMS Health, Professor of marketing Concordia University

*Personal background relates to former and current positions and education

Advisory Board*

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2012/2013 – Recent and Upcoming Milestones

Financing Successful completion of approximately $6.5 million private placement; Strong balance sheet with no debt; sufficient funding to complete key development programs

RHB-104 Planned initiation of the first of two Phase III clinical trials in Crohn’s - H1 2013

Planned initiation of Phase IIa clinical trial in Multiple Sclerosis - January 2013

RHB-105 Planned initiation of Phase II/III clinical trial for treatment of H. pylori - Q1 2013

RHB-103 Planned NDA filing – Q1 2013, following successful completion of a pivotal bioequivalence trial with RHB-103 - an oral thin film formulation for treatment of acute migraine

RHB-102 Planned NDA filing – 2013, following successful completion of a pivotal bioequivalence trial with RHB-102 for the prevention of nausea and vomiting in cancer patients

NASDAQ NASDAQ listing completed December 27th 2012, through a Level II ADR (American Depository Receipt) facility; RedHill’s NASDAQ and TASE ticker: “RDHL”

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Where There is Inflammation, Look For Infection

RHB-104 (Crohn’s and MS) and RHB-105 (H. pylori) build on the

success of Professor Thomas Borody, a leading innovator of

therapeutic approaches to Gastrointestinal (GI) tract diseases and

infections

- RedHill’s Advisory Board member, Professor Borody,

developed the original triple therapy for peptic ulcer disease

associated with H. pylori

- RedHill is developing Professor Borody’s two next generation

combination GI therapies: RHB-104 and RHB-105

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The Emerging Microbiome Revolution

Growing awareness in the scientific community AND public at

large about the microbiome as a critical SYSTEMIC actor

“Looking at human beings as

ecosystems that contain many

collaborating and competing species

could change the practice of medicine”

(Economist, Aug. 2012)

The clinical possibilities of the

microbiome is “the most exciting

and important work of my

lifetime” (scientist quoted in New

Yorker, Oct. 2012)

“from obesity and diabetes,

via heart disease, asthma and

multiple sclerosis, to

neurological conditions such as

autism, the microbiome seems

to play a crucial role”

(Economist, Aug. 2012)

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RHB-104 (Crohn’s)

The Disease Crohn’s – a severe inflammatory disease in the gastrointestinal tract

Planned Indication Treatment of Crohn’s disease in adult patients

In addition, Orphan Drug Designation for pediatric

Drug Patent protected combination of three antibiotic ingredients in a single capsule (clarithromycin, clofazimine and rifabutin)

Potential Advantages

Existing drugs only treat the symptoms and are widely considered of limited efficacy in the long term

Diagnostics RedHill’s diagnostic test for MAP (Mycobacterium Avium Paratuberculosis) detection is

developed with Quest Diagnostics

Market Size Worldwide market of $3 billion in 2011*

Development Status

Several clinical trials were conducted, including two Phase II (2002 and 2005 respectively) and a Phase III (2007) in Australia **

Planned Phase III in North America and Israel (H1 2013), Phase III in Europe and other supplementary studies as part of the development program and regulatory strategy

Estimated Costs Total $13-14 million to complete a Phase III trial in North America and Israel and a Phase III

trial in Europe

*EaluatePharma (2011) ** RHB-104 formulation includes certain improvements as compared to the drug used in the Australian trial

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RHB-104 (Crohn’s) – The Unmet Need

A welcome alternative for Crohn’s patients

• Existing drugs treat symptoms and are widely considered to have limited efficacy in

the long term

• Significant failure rate with current standard of care (Remicade® Phase III trial)*

• 42% of enrolled patients in infliximab (Remicade®) Phase III trial failed to qualify as

“responders”

• On intent-to-treat basis, only 23-26% in remission at 30 weeks

• Increasing number of safety issues reported to FDA for infliximab (Remicade®)**

• Black box warning related to serious infections and malignancy

• Costs of current anti-TNFɑ drug treatments is approximately $18-30k / year

*Hanauer at al (2002), Lancet Infectious Diseases 359:1541-1549 ** Moore et al (2007), Arch Intern Med 167:1752-1759

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• Phase III conducted by Pharmacia in Australia (2007) and focused on relapse as primary endpoint • Study failed to demonstrate efficacy in relapse but showed promising remission results compared** to Remicade®*:

16 weeks

66% remission

p = .017

52 weeks

42% remission

p = .006

104 weeks

33% remission

p = .010

104 weeks

18% remission

52 weeks

25% remission

16 weeks

50% remission

111 Placebo

+ prednisolone

Weaned (100%)

213 Patients

(100%)

102 Active

+ prednisolone

Weaned (100%)

RHB-104***

Phase III Results

Previous Phase III Study – Design Flaws but Showed Promising Results (Retrospective Analysis)

*A leading drug for symptomatic treatment of Crohn’s **The two studies (“RHB-104” and “Remicade®”) were conducted separately. See Behr and Hanley (2008), Lancet Infectious Diseases 8:344 ***RHB-104 formulation includes certain improvements as compared to the drug used in the Australian trial

30 weeks

39% remission

ITT = 23%

54 weeks

ITT = 15%

Remicade®

Active

Arm

Placebo

Arm

Separate trials; Theoretical comparison only

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Phase II Study Pictures in Crohn’s Patients*

*Borody et al (2002), Digest Liver Dis 34:29-38

Deep colonic ulcers

Before therapy

Healing, with scarring,

after 20 months on

therapy

Extensive pseudo-

polyps before therapy

Recovered mucosa

after 20 months on

therapy

BEFORE AFTER

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RHB-104 (Crohn’s) – Progress Since the Australian Phase III Study

•Improved formulation •Acquired rights to, and developing MAP detection diagnostic test

•Obtained Orphan Drug status for pediatric usage

•Developed the patent estate • Engaged with CRO and CMO

•Appointed Prof. David Graham as lead investigator for the North American study

•Amended the IND and in advanced preparations to initiate the first of two Phase III studies

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RHB-104 (Multiple Sclerosis)

Planned Indication Treatment of Relapsing Remitting Multiple Sclerosis (MS)

Drug Patent protected combination of three antibiotic ingredients in a single capsule (clarithromycin, clofazimine and rifabutin)

Potential Advantages

Existing drugs – symptomatic treatment Oral administration

Market Size Worldwide market of over $8 billion*

Development Status

Performed 3 pre-clinical studies using MS EAE model

Phase IIa in Israel planned to commence January 2013

*Datamonitor (2011) – Market and Product Forecast – MS

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0

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3

4

6 8 10 12 14 16 18 20 22 24 26 28

Day After Immunization

Me

an

Cli

nic

al

Sc

ore

+/-

SE

M

Vehicle

RHB-104, 36 mg/kg, p.o., BID

**EAE* severity (mean clinical score) vs. time

Demyelination (LFB staining) + SEM

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Vehicle RHB-104, 36 mg/kg

Average demyelination score**

RHB-104 Multiple Sclerosis Therapy Success in 3 pre-clinical studies toward a Phase IIa trial

Study No. 1 (Cytokine concentrations )

Significant reduction of pro-inflammatory cytokine concentrations of IL-6 and TNF, which are associated with inflammation and MS

Study No. 2 (Prophylaxis)

Significant reduction in the inflammatory area and level of demyelination

Study No. 3 (Relapse)

Significant reduction of incidences of relapse

Pre-clinical results demonstrated efficacy:

* The three pre-clinical studies were conducted using the experimental autoimmune encephalomyelitis (EAE) MS model ** Selected charts from Study No. 2

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RHB-105 (H. pylori)

Planned Indication H. pylori / Ulcers

Drug Patent protected combination of three known

and approved substances (rifabutin, amoxicillin and omeprazole)

Potential Advantages Potential to become the leading effective treatment

Market Size U.S. market is estimated at approximately $1-1.5 billion*

Development Status

Phase IIa conducted (2005) in Australia

Phase II/III planned to commence Q1 2013

Estimated Cost

$2 million to complete Phase II/III

*Approximately three million H. pylori infected patients are treated per annum in the U.S. (Colin W. Howden, MD, et. Al (2007), The American Journal of Managed Care). Market size is estimated by the Company based on the above and the price of current treatments

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RHB-105 (H. pylori)

• H. pylori bacteria has critical role in gastritis, peptic ulcer and gastric cancer

• Standard therapy fails in up to 30-40% of patients who remain H. pylori positive

• Growing resistance of H. pylori to clarithromycin and metronidazole • RHB-105 is a novel combination of two antibiotics and a PPI: rifabutin,

amoxicillin and omeprazole

• Phase II study demonstrated over 90% eradication in 130 patients who had previously failed standard therapy*

*Borody et al (2005), Ailment Pharmacol Ther 23: 481-488

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RHB-102 (Oncology Support – Nausea & Vomiting)

Planned Indication Prevention of chemotherapy and radiotherapy induced nausea and vomiting

Drug Patent protected, once-daily controlled release tablet formulation

of ondansetron (GSK’s brand name “Zofran®”)

Potential Advantages Allows once-daily oral administration during radiation therapy treatment

Market Size Worldwide market for serotonin (5-HT3 ) receptor is estimated at $1 billion*

Development Status

Pilot clinical trial conducted Successfully completed pivotal bioequivalence clinical trial

Planned NDA filing - 2013

*BCC Research (2010). RHB-102 belongs to the family of 5-HT3 serotonin receptor inhibitors

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-1

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

0 5 10 15 20 25 30 35

ln(C

on

cen

trati

on

)

Time (hours)

LOGARITHMIC PROFILE OF THE MEAN

TEST 2 REFERENCE RHB-102 Zofran 8mg

Pharmacokinetic comparison between GSK’s Zofran® and RHB-102

Low Coefficient of Variance

Fast Onset

Bioequivalence

Trial results:

RHB-102 (once-daily formulation of the antiemetic ondansetron) – Successfully completed pivotal bioequivalence clinical trial

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RHB-103 (Migraine)

Planned Indication Migraine – one of the most common neurologic episodes

Drug Patent protected, oral thin film formulation of rizatriptan

Potential Advantages Ease of use; Discrete; No need to swallow water

Market Size Worldwide triptan market for the treatment of

migraine exceeds $2 billion*

Development Status

Pilot clinical trial conducted Successfully completed a pivotal bioequivalence trial

NDA filing planned Q1 2013

Acquired from IntelGenx Corp.

Co-development agreement in place

*Business Insights report (2011)

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Pharmacokinetic comparison between Merck’s Maxalt MLT®

and RHB-103

Low Coefficient of Variance

Fast Onset

Bioequivalence

RHB-103 (oral thin film of the migraine drug rizatriptan) – Successfully completed pivotal bioequivalence clinical trial

Trial results:

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RHB-106 (Gastrointestinal Preparation)

Planned Indication Preparation of the Gastrointestinal (GI) tract for

GI procedures/surgeries (such as colonoscopy)

Drug Patent protected encapsulated formulation for bowel preparation

Potential Advantages No need to consume liquid solution; No bad taste

Potential Market Size Worldwide potential market is estimated at approximately $1.4 billion*

Development Status Phase IIa conducted in 62 patients (2005) in Australia**

*EvaluatePharma (2012) ** Borody et al (2006), Journal of Gastr and Hepat, 21: 87-88

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RHB-101 (Cardio)

Planned Indication Congestive heart failure (CHF), hypertension (high blood pressure )

Drug Patent protected, controlled release formulation of Carvedilol (GSK’s

brand name “Coreg®”)

Potential Advantages

Once-daily oral administration, Price

Potential Market Size Worldwide potential target market of $500 million*

Development Status

Several clinical trials were conducted

Examination of regulatory path in the US and Europe on the basis of existing clinical data

*Sales data from Scrip Intelligence (2012); GlaxoSmithKlinet annual report (2011) ; IMS Health sales data for carvedilol (2011)

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Operational Results* (USD, in millions)

Balance Sheet (USD, in millions)

5.2

R&D costs

13.7

Cash and cash equivalent (additional $6.5 million was raised in December 2012)

1.7 G&A costs 15.3 Total assets

6.9 Operating loss 1.8 Liabilities**

5.2

Net cash - used for operating activities

13.5 Equity

Financial Highlights – nine months period ended Sept. 30, 2012

* For the nine months period ended September 30, 2012 ** Primarily due to potential future royalty liabilities to Company investors. The royalties are revenue-based and will only be paid subject to certain future revenues actually being generated

December 2012 - Successful completion of approximately $6.5 million private placement, following which RedHill’s cash balance will be approximately $19 million

Thank You!

RedHill Biopharma Ltd. 21 Ha’arba’a St. Tel-Aviv, 64739 Israel E:mail: info@redhillbio.com Web: www.redhillbio.com Tel: +972-3-541-3131