HIV Market Opportunity Overview

• Worldwide, an estimated 39.5 million people are living with HIV¹
• Between 1.04 and 1.85 million people are living with HIV in the U.S.²
• An estimated 2.2 million people in Europe are living with HIV³
• Emergence of drug resistance has thwarted global efforts to effectively manage HIV infection⁴
• There is a need for safe and convenient drug combinations to improve patient compliance

RDEA806, our lead product candidate for the potential treatment of HIV infection, is a non-nucleoside reverse transcriptase inhibitor (NNRTI). There are three approved NNRTIs, but they have several therapeutic limitations, including the development of HIV strains that are resistant to other drugs within the class; unacceptable adverse side effects; reproductive toxicity, which limits the use of the compounds in women of childbearing potential; and drug-to-drug interactions.

Based on preclinical and clinical studies todate, we believe that RDEA806 may have important competitive advantages compared to currently available NNRTIs.  These include the potential for potent antiviral activity against a wide range of HIV viral isolates, including those that are resistant to efavirenz (Sustiva^(®)) and other currently available NNRTIs; a high genetic barrier to resistance; limited pharmacokinetic interactions with other drugs; no reproductive toxicity based on animal studies; and the potential to be readily co-formulated in a single pill with other HIV antiviral drugs, such as Truvada^® (emtricitabine and tenofovir) from Gilead Sciences, Inc, which is important for patient compliance.

To date, RDEA806 has successfully completed a number of Phase 1 and Phase 2 clinical trials and has been evaluated in over 100 subjects.  A Phase 2a proof-of-concept study of RDEA806 was completed in the second quarter of 2008.  Results from this study demonstrated an up to 2.0 log placebo-adjusted reduction in plasma viral load with once-daily dosing of RDEA806.  In addition, all dosing regimens tested were well tolerated.

Our second-generation NNRTIs are also directed toward the potential treatment of HIV. Compounds in this series are novel, representing new chemical entities, and are in a different chemical class from RDEA806. Based on early preclinical data, we believe that one or more of these compounds may have the potential to share certain positive attributes of RDEA806, but also appear to have even greater activity against a wide range of drug-resistant viral isolates. Our lead product candidate from this series of compounds is RDEA427.