Approaches for targeting intracellular and extracellular tau oligomers. Small molecule inhibitors target intracellular formation of tau oligomers and subsequent higher order aggregates. Extracellular tau oligomers are targeted by small molecules that can dissociate disulfide mediated tau oligomers and by immunotherapeutic approaches. Reagents and methods developed in these programs to detect tau oligomers also have utility for biomarker development to diagnose and monitor disease progression.

The Company has programs for targeting both intracellular and extracellular tau oligomers for the development of therapeutics for AD and related tauopathies.

Product development programs:

• Small molecule inhibitors of tau oligomer formation (NIH, ADDF)
• Tau oligomer specific antibody discovery and development (NIH)
• In vivo tau oligomer mouse model for drug screening (ADDF)
• T au oligomer biomarker assays (NIH)
• T au oligomer specific protease target

Small molecule inhibitors of tau oligomer formation - The Company is currently initiating a high throughput screen of the Michigan High Throughput Screening Center (MHTSC) focused library of 110,000 compounds that was assembled from numerous compound libraries by "cherry picking" compounds using algorithms developed at Upjohn and a research team that ultimately founded MHTSC. This library was carefully designed for maximum chemical diversity (redundant structures were eliminated) and drug-like properties using Lipinski's rules, and known toxic compounds were eliminated. Comparison of the chemical diversity of this library to standard commercial libraries shows that the MHTSC library has more diversity than the Chembridge library (300,000 compounds).

Three to five lead candidates/novel chemical entities will be identified, optimized and selected during the phase II program and further optimized by medicinal chemistry and small library synthesis during the phase III program to enable in vivo studies in a tauopathy mouse model to select candidates for IND enabling studies. Ultimately, the Company will select its lead compounds from the Phase II/Phase III studies that will go into clinical studies. The Company anticipates a strategic partnership for clinical development of its lead compounds.

Advantages of the Company's small molecule discovery approach

Small molecules dissociating disulfide mediated tau oligomers - The Company has initiated a program to develop small molecules to dissociate disulfide mediated tau oligomers based on rational design. These compounds will reduce extracellular tau oligomers and inhibit disease progression. Compounds are being designed based on the Company's understanding of tau oligomer structure and the expertise of Dr. Iyer in medicinal chemistry (member SAB). These compounds will be screened in the Company's in vitro assays and animal model.

Tau oligomer specific antibody fragments, immunotherapeutic uses - It has recently become apparent that extracellular tau may be pathogenic, may impair synaptic function, and may be responsible for the transmission of pathology from diseased to healthy neurons (see Scientific Background). These results have generated an interest amongst major pharmaceutical companies for evaluating an immunotherapeutic approach targeting extracellular tau oligomers. Tau oligomer specific antibodies that are identified, optimized and selected during the phase II program will be considered for further development as immunotherapeutic agents. The Company intends to form a strategic partnership to advance these molecules and to out-license all immunotherapeutic uses to a major pharmaceutical entity within three years.

Tau oligomer specific antibody fragments, diagnostic uses - Tau oligomer specific monoclonal antibodies have potential utility as biomarkers for AD. Preliminary evaluations that the Company has performed on AD specimens from postmortem samples have demonstrated that tau oligomers increase progressively in CSF and may represent markers useful for disease staging. Developing highly specific monoclonal antibodies for tau oligomers would have the potential of increasing the sensitivity and specificity of this approach. The utility of these reagents will also be determined for noninvasive imaging for early diagnosis and monitoring of disease progression. The Company plans to out-license diagnostic uses of its antibodies to a major diagnostic player interest in the AD/neurodegenerative disease space.

Tau oligomer specific antibody fragments, research uses - There are research use opportunities for any monoclonal antibodies developed during the Phase II/Phase III program. The Company intends to enter into an agreement with a life science company to make these important reagents available to the scientific community.
Expansion of the tau oligomer platform into other tauopathies - The drug discovery platform is being developed to target early aggregation intermediates for AD. There may be the opportunity to apply some of the technology developed under this program to develop a drug-screening platform for other tauopathies. Furthermore, it is likely that lead candidate small molecules and antibodies targeting tau oligomers developed for AD will also have efficacy for tauopathies with a similar tau oligomer-based mechanism for disease. It is the Company's intention to exploit these opportunities to develop novel approaches for these rare diseases that could result in potential new approaches. Many of these diseases fall under the category of "orphan designation" and the possibility of extended exclusivity would be an added incentive to pursuing these disease targets as later stage programs.

In summary, the Company is expecting to enter into one or more strategic collaborations for several of its products during the phase III portion of the program. The Company anticipates funding the phase III development program through a combination of equity investment, and from anticipated revenue from initial and milestone payments from strategic partners to fund its IND enabling studies and its clinical development programs.