Certain statements made in this presentation are

forward-looking such as those, among others, relating

to the development, safety and efficacy of

therapeutic drugs and potential applications for

these products. The Company undertakes no

obligation to update the forward-looking statements

contained herein or to reflect events or

circumstances occurring after the date hereof.

Company Highlights

Focus on pharmacophores with history of safe use

Target small molecules modulating key metabolic networks

Completing safety pharm/tox for IND in Type 2 Diabetes

Business Model: conduct Phase 1through 2a POC

clinical trials and seek a partner

Pre-clinical and clinical evidence supporting activity and safety

4Q2009: $20M Series A investment by partner, Alticor

Background

Modified phytochemical extracts demonstrate selective protein kinase modulation

1st Generation Product : R200 (Tetrahydro-iso-acids)

Mixture of 3 chemically distinct analogs

Potent modulation of metabolic and inflammatory

pathways

KDT500: most potent analog

Large patent portfolio protecting our position

Initial development focus on T2D (Type 2 Diabetes)

Greater than 30 million doses administered

R200: 1st Generation Product

R= Isobutyl

KDT500

Global Prevalence of Diabetes

South East Asia

Europe

North America & Caribbean

Western Pacific

South & Central America

Africa

Middle East & North Africa

58.7

55.2

37.4

76.7

18.0

12.1

26.6

2030millions

2010millions

101.0

66.2

53.2

112.8

29.6

23.9

51.7 Source: International DiabetesFederation

IDF Atlas January 2010

Years 20332009Years 20322008

Forecasted Diabetes in US

People (millions)

50

40

30

20

10

0

Established

Cases

Undiagnosed Newly

Diagnosed

Source: Huang et al.

Projecting the Future Diabetes Population Size and Related costs for the US Diabetes Care 32:2225-2229, 2009

Number of cases in US alone forecasted to

double from 24M in 200 to 44M in 2034

Spending on diabetes and related

complications projected to triple in the

same period

2007 $$ (Billions)

250

200

150

100

50

0

300

350

Note: This model does not account for utilization of novel

branded anti-diabetic agents in future.

Expressed in 2007 dollars.

Currently have Diabetes

Diagnosed 2009-2018

Diagnosed 2019-2028

Diagnosed: 2029-2033

Extensive

experience.

Low Cost

High potency

No

Hypoglycemia

as monotherapy

Weight= neutral

Favorable on

lipids

Extensive

experience

Low Cost

High potency

Rapid Reduction of

post-prandial

hyperglycemia &

Potentially less risk of

hypoglycemia

High Potency

No

hypoglycemia

as

monotherapy.

Reduction in

triglycerides

and increase in

HDL.

Benefits

demonstrated

in large post-

marketing

studies

2-4%

weight loss.

Lack of

severe

hypogly-

cemia in

combina-

tion with

Metformin.

Potential

for -cell preservation

Once a day

oral & well

tolerated.

Weight=neutral

No risk of

hypoglycemia.

Potential for

beta cell

preservation

No risk of

hypoglycemia

Weight=neutral

Metformin Secretagogues

SFUs

Secretagogues

GlinidesTZDs GLP-1

AgonistDPP-IV

Inhibitors

-Glucosidase

inhibitors

Upper and/or

lower GI side

effects in10-15%

of pts. Contrain-

dicated in renal

patients. Rare

risk of lactic

acidosis

Significant concerns

regarding

hypoglycemia and

weight gain

Modest potency &

higher cost

compared to SFUs.

Risk of

hypoglycemia still

higher than other

OADs.

TID Dosing

Weight gain &

edema.

Increased risk

of congestive

heart failure.

Increased rick

of fractures in

women.

SC Inject.

Nausea in

significant

# of

patients.

Potential

safety

concerns:

pancreatitis

& cancer

Modest

efficacy.

Modest efficacy.

Potentially severe

GI tolerability issues

(bloating, diarrhea

& cramps)

Advantages

Disadvantages

Issues with Current Drug Classes for T2D Treatment

R200 in animal safety

and efficacy models

1st Generation Product Efficacy in Murine T2D Model

R200 Metformin

db/db Mouse Type 2

Diabetes model

Treatment:

100 mg/kg/ day

7 day treatment

Glucose Reductionmg/ml

Insulin Reductionng/ml

R200 Safety

Cell free In Vitro Animal Human

Multi-target selective

modulator

Gini Coefficient

calculation

demonstrates high

kinase specificity

Cytochrome p450

Studies- IC50 (ug/ml)

-indicates CYP450

2C9 is the route of

metabolism

Extensive R200

Toxicology studies

in animal models

Bioavailable in humans (orally

absorbed within one hour &

persists in serum for over 8

hours)

Does not decrease

prostacyclin formation

indicating CV safety

No elevation of liver enzymes

No elevation of fecal

Calprotectin indicating

GI safety

Safe to GI system when orally

consumed at therapeutic

doses

KDT500/501 in animal

efficacy studies

KDT500 in High Fat Diet Mouse Obesity Model

C57BL/6J mice were 6 weeks old at the start of the

experiment and maintained on test diets for 12 weeks.

Treatment Groups:

Experimental groups were maintained on a high fat diet (HFD) in

which 45% of calories came from fat

Control mice (LFD) were maintained on a control 10% calories from fat

KDT500 was administered to deliver approximately 100 mg/kg in the diet

KDT500 Reduces Weight Gain

p<.001

p<.05

% body fat (dexa)40

20

0

Diet

10 % fat

45 % fat +100 mpkKDT500

45 % fat

Mice Age (weeks)6 18

Body Weight (g)

32

28

24

20

C57BL/6J mice: high susceptibility to diet-induced obesity, type 2 diabetes

and atherosclerosis.

Jackson Laboratories

KDT501 in ZDF Model of T2D

Zucker Diabetic Fatty Rats were 6 weeks old at the start

of the experiment with glucose levels of 175-300 mg/dL

Treatment Groups: Drugs administered orally 2x/day for 33 days

Vehicle Only (negative control)

4 Doses of KDT501: 25, 50, 100, & 200 mg/kg

Metformin 200mg/kg

Metformin 200mg/kg + KDT501 100 mg/kg

Pioglitazone 30mg/kg (positive control)

Sample Collection:

Blood samples collected by tail bleed 3 days prior to randomization, day 15

and day 29. Whole blood glucose evaluations and triglyceride levels were measured pre-glucose bolus and at 15, 30, 60, 90, and 120 minutes post-glucose bolus (2g dextrose/kg of body weight).

Body composition tested by qNMR on day 2 and 29.

Oral Glucose Tolerance Test (OGTT) performed on days 31 and 32.

On day 33, cardiac puncture was performed for PK analysis

ZDF Rat Model: Whole Blood Glucose

Z D F R a t s : Type 2 Diabetes model, male

Covance Laboratories

600

500

400

300

200

100

0

Day1 15 29

Blood Glucose(mg/dL)

Vehicle

KDT501: 25 mg/mg

KDT501: 50 mg/kg

KDT501:100 mg/kg

Metformin: 200mg/kg

Metformin: 200mg/kg+

KDT501 (100mg/kg)

KDT501:200 mg/kg

Pioglitazone: 30mg/kg

ZDF Rat Model: Body Weight

Body Weight (grams) 550

500

450

400

350

300

250

Day1 15 298 22

KDT501: 25 mg/mg

KDT501: 50 mg/kg

KDT501:100 mg/kg

Metformin: 200mg/kg

Metformin: 200mg/kg+

KDT501 (100mg/kg)

KDT501:200 mg/kg

Pioglitazone: 30mg/kg

Vehicle

ZDF Rat model: Oral Glucose Tolerance Test

Blood Glucose(mg/dL)

600

500

400

300

200

100

0

Time (minutes)0 60 12015 9030

Effect of 4 weeks of Oral Dosing on Glucose Tolerance in MaleZDF Rats dosed 2g of Glucose/kg of body weight

following 16 hr. fast

KDT501: 25 mg/mg

KDT501: 50 mg/kg

KDT501:100 mg/kg

Metformin: 200mg/kg

Metformin: 200mg/kg+

KDT501 (100mg/kg)

KDT501:200 mg/kg

Pioglitazone: 30mg/kg

Vehicle

ZDF Rat Model: Oral Glucose Tolerance Test

60000

3000

2000

1000

0

50000

40000

Vehicle KDT501(mg/kg)

25 50 100 200

Metformin200 mg/kg

Metformin

200 mg/kg

+ KDT501 (100mg/mg)

Pioglitazone30 mg/kg

Area Under the Curve (AUC) values calculated from Oral Glucose Tolerance test

p-Value= 0.0017 p-Value < 0.0001

p-Values: Compared to Vehicle Control using Dunnett’s Method

ZDF Rat Model: AUC Insulin Values

6e5

4e5

2e5

0

10e5

8e5

VehicleKDT501(mg/kg)

25 50 100 200

Metformin200 mg/kg

Metformin

200 mg/kg

+ KDT501 (100mg/mg)

Pioglitazone30 mg/kg

Area Under the Curve (AUC) values calculated from Oral Glucose Tolerance test(one vehicle outlier removed)

p-Values: Compared to Vehicle Control using Dunnett’s Method

p-Value=

0.0292

p-Value=

0.0033

p-Value=

.0016

ZDF Rat Model: Triglycerides

1500

1000

500

0

2500

2000

Triglycerides (mg/dL)

Vehicle KDT501(mg/kg)

25 50 100 200

Metformin200 mg/kg

Metformin

200 mg/kg

+ KDT501 (100mg/mg)

Pioglitazone30 mg/kg

Neg.Control

KDT501Doses

Pos.Control

Day 15

Day 29

-640 %

+380 %

-470%

KDT501 Competitive Advantages

KDT501 Multiple actions

Decrease in whole blood glucose and fasting glucose levels in ZDF rat model; superior to Metformin in whole blood glucose

Significant impact on weight gain in both high fat diet mouse and ZDF rat models, unlike pioglitazone

Mixture has history of safe use in humans

No elevation of liver enzymes

No elevation of fecal calprotectin

Large improvement in lipid values; superior to pioglitazone by end of study

Progress to KDT501 IND

CMC

Manufacture of 3cGMP batches of KDT501

Clinical Formulation

Metabolism

PK (rat, mouse, dog, monkey)

In vitro hepatocyte metabolism

Toxicology

Dose range finding studies in rats and dogs

Dose range finding studies in monkeys

28 day GLP tox

Safety

Gene toxicology (AMes, chromosomal aberration, rat in vivo micronucleus)

GLP respiratory safety pharmacology

CNS safety pharmacology

Cardiovascular (in vitro hERG and in vivo)

Product Pipeline

Mid-shaded arrows illustrate pipeline through 1H2011

KDT 501 (Type 2 Diabetes)

KDT 501 (Inflammation)

KDT 600 (Obesity)

New Candidates

Pre-clinical

Development

Discovery &

Candidate SelectionIND Phase 1

Experienced Management and Advisory Team

Jeffrey Bland, Ph.D.President and CEO

Metagenics, Healthcomm International

Linus Pauling Institute

Matthew Tripp, Ph.D.Sr. V.P. R&D

Neile Grayson, Ph.D.V.P. Drug Development

John Kozarich, Ph.D.SAB Member

Benjamin Cravatt, Ph.D.SAB Member

Paul Schimmel, Ph.DSenior Advisor and Board Member

Metagenics, Kellogg

Phillip Morris Biotechnology

Sonus Pharmaceuticals, NeoRx

Mallinckrodt, NIH

ActivX Biosciences, Merck Research

Labs, Scripps Research Institute,

Yale School of Medicine

Scripps Research Institute

Scripps Research

Institute, Sirtris, Alnylam, Repligen, Mo

menta, Cubist