RESEARCH 18 January 2007

Code MMG MMI

Market Cap £86.7m
New Year Update 148p at 17/1 close
Year End March
Net cash £7.4m Target Price 435p
Shares in Issue 58.6m
Next Results
Financial Revenue PBT* Tax Rate EPS* DPS PER Yield Forecast
June
Year (£ m) (£ m) (%) (p) (p) (x) (%) change
Sector
Pharmaceuticals & Biotechnology 03/05A 0.4 (1.7) 0 (3.43) 0 Neg 0 unch
03/06A 0.2 (2.8) 0 (5.10) 0 Neg 0 unch

Market 03/07E 0.2 (4.2) 0 (7.10) 0 Neg 0 unch

AIM. FTSE AIM-All Share 1054.3 at 17/1 03/08E 20.1 14.9 0 25.3 0 5.9 0 EPS -7%
close
*normalised fully diluted

Share price Performance

2006 was a year of strengthening the foundations and broadening the base of the
350
300
technology platforms under development within MMI. Big pharma’s increased
250 M&A and licensing activity has helped to de-risk MMI’s approach sufficiently for
200
150
us to revisit and lower risk assumptions, increase our target price to 435p and
100 leave revenue estimates unchanged. We expect 2007 to provide substantial
50
shareholder value-driving news flow.
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♦ MMI’s first six months of FY2007 ended in line with expectations posting revenues
Source: Datastream of £156k (H1 2006: £153k) and pre and post-tax losses of ca. £1.6m (H1 2006:
£979k) reflecting the level of ongoing investment to advance the technology
Company Details platforms. Cash resources at the end of the period were £7.4m, which should be
Medical Marketing International Group plc
The Bioscience Innovation Centre
sufficient to fund operations into early 2008 (calendar).
Cowley Road
Cambridge ♦ Two new clinical targets have been added to the DNA vaccines pipeline and
CB4 0DS
important patents were granted in the EU and the US. The prostate cancer clinical
The: 01223 477 677
Email: email@mmigroup.co.uk trial moved forward by completing patients’ enrolment for the 2nd dose cohort
Web: www.mmigroup.co.uk and preparations for the influenza vaccine have commenced, with clinical
Executive Chairman: David Best programmes expected to start towards the end of calendar 2007.

Activities ♦ Preclinical studies for 2 of the 3 lead chemotherapy compounds are close to
MMI is a biotechnology company focused
on the development of therapeutics in completion and clinical trials remain scheduled to start in H2 2007 (calendar).
cancer and infectious disease
♦ The newly developed lentiviral vector successfully delivered VIR5103 ribozyme to
J. M. Finn Institutional Contacts the targeted cells and maintained the production of the molecules for a prolonged
period of time. In-vivo studies are close to completion with results expected to be
Corporate broking: available in Q2 2007.
Eddie Edmonstone 020 7997 8424
eddie@jmfinn.com The three combined technology platforms provide a wide range of innovative treatment
Andrew Garrett 020 7997 8568 paradigms for major markets with promising clinical milestones which the Company is
andrew.garrett@jmfinn.com expected to achieve in the next year or so. The management is concentrating its efforts
Stephen Norcross 020 7997 8569 on driving the completion of valuable commercial milestones that should secure strategic
stephen.norcross@jmfinn.com
partnerships with financial values in line or above our forecasts.
This research was prepared and written
by Lorenza Castellon of Equity A corporate client of J. M. Finn & Co. This research cannot be classified as objective
Development Ltd. having been under J. M. Finn & Co.’s research policy. Visit www.jmfinn.com for details.
commissioned by J. M. Finn & Co. a
trading name of J. M. Finn & Co. Ltd. Because the rules for AIM are less demanding than for those of the Official List of the
London Stock Exchange, the risks of losing the money invested are higher.
Marketability is often restricted; investors may have difficulty in selling their shares; and
there is often a big difference between the buying and selling price, so that if investors
have to sell them immediately after purchase they may get back much less than they paid
for them.
Shares in companies on AIM should be regarded as a high risk investment. The
investments discussed in this document may not be suitable for all investors. Investors
should make their own investment decisions based upon their own financial objectives
and financial resources and, if in any doubt, should seek professional advice.
Past performance should not be seen as an indication of future performance.
 MMI Target Price 18 January 2007

Interim results
Results for MMI’s first six months of FY2007 were in line with expectations. Revenues of
£156k (H1 2006: £153k) were generated from fee income (£51k) and the full and final
settlement of the agreement between the Company, Octopus Asset Management and
Bioscience VCT plc (now called Hygea VCT plc).

Changed R&D definition
Increased investment in 2 subsidiaries
Operating expenses increased by 54.6% to just over £2.1m (H1 2006: £1.1m) reflecting
the substantial investment made in R&D which trebled to just over £1m (H1 2006:
£332k). During the period MMI changed the definition of R&D expenditure. Fixed assets
used in R&D are written off according to the Company’s depreciation policy and other
R&D expenses i.e. license fees, patent costs, external contactors’ fees, laboratory
consumables are charged as incurred to the profit and loss account. Administrative
expenses reached £1.1m (H1 2006: £829k) due to the increased number of personnel,
salary rises and the inclusion of a £202k charge relating to the adoption of FRS 20.
Retained loss for the period amounted to £1.6m (H1 2006: £986k) resulting in -2.74p
(loss) EPS (H1 2006: -1.93p (loss)).
During the period investment in the two subsidiaries was increased by 4% in DNA
vaccines and 3% in ribozyme bringing MMI’s ownership to 55% and 67% respectively.
Post-period further investment was made and current ownership (as of December ’06)
and Company’s structure is represented in the diagram below. This trend is set to
continue.

Figure 1: MMI’s current structure (January 2007)

M M I G ro u p

G e n v a x L td . O n c o s e n s e L td . V ir a t is L td .
J o in t - v e n tu re w / C o lla b o r a t io n w / J o in t - v e n tu re w /
S c i e n t is t s a t U n iv e r s it y U n iv e r s it y o f E d in b u r g h K in g ’s C o l le g e L o n d o n
S o u th a m p to n Q u e e n M a r y U n iv e r s it y o f L o n d o n

5 6 % 1 0 0 % 6 9 %
O p t io n to in c r e a s e to 5 8 % O p t io n to in c r e a s e to 7 2 %
D N A V a c c in e C y t o t o x ic R ib o z y m e
T e c h n o lo g y T e c h n o lo g y T e c h n o lo g y

5 c o m p o u n d s in P h a s e ll a 3 co m p o u n d s in la t e s ta g e p re - c lin ic a l 3 co m p o u n d s in re se a rc h
2 c o m p o u n d s in p r e - c li n i c a l 1 co m p o u n d in e a r ly s ta g e p re - c lin ic a l
2 c o m p o u n d s in re s e a rch

D e v e lo p m e n t s ta g e

Source: Company data

Cash resources at the end of the period were £7.4m, which should be sufficient to fund
operations into early 2008 (calendar).

Strengthened corporate structure and
IP portfolio
The Senior Management team was strengthened by the appointment of Dr. Simon
Thompson as DNA vaccines Project Manager and a number of new researchers have
been added to the DNA vaccines and chemotherapies research teams and Dr. James
Hoeschele extended, for an unspecified period of time, his initial collaboration agreement
for the development of the ruthenium compounds.
The Board of Directors was also strengthened with the appointment of Dr. Mike Rance
as a Non-executive Director and Mark Burton was promoted to Chief Technical Officer.
In the last six months MMI was notified of the grant in Europe (June 2006) and in the US
of patents that further protect immunostimulants particularly relevant to the prostate,
colon and lung cancers.

2 J. M. Finn & Co.

MMI
…no news maybe is good news…
Prostate cancer results from first
cohort in H1 2007
Added 2 new clinical candidates
Prophylactic pipeline now includes
emerging and pandemic influenza
strains
Target Price 18 January 2007
Technology platforms development and background
DNA vaccines
There are 5 Phase l/ll DNA vaccines clinical trials underway using the Genvax
technology: 4 therapeutic DNA vaccines for both bespoke (follicular lymphoma and
multiple myeloma) and broad-spectrum cancer treatments and one prophylactic
addressing CMV (cytomegalovirus). Results are expected soon, although no specific
timing has been provided by the Company as medical ethics do not permit the
publication of study results while patients are still being recruited and/or the study is
ongoing.
Table 1: DNA vaccines pipeline
Type of DNA Vaccine Therapeutic area Development
phase
Therapeutic: bespoke Non-Hodgkin’s lymphoma Phase l/lla
Multiple myeloma Phase l/lla
Therapeutic: tumour-specific Prostate cancer Phase l/lla
Therapeutic: broad-spectrum Patients expressing CEA* with Phase l/lla
particular focus on lung and colon
cancers
Therapeutic: infectious diseases Tuberculosis Discovery
HPV (Human Papilloma Virus) Discovery
Prophylactic: infectious diseases CMV Phase l/Ila
Influenza Pre-clinical
H5N1 (bird flu) Discovery
Source: MMI Group plc *CEA - Carcino-embryonic antigen, an antigen present in 70% of tumours
The prostate cancer treatment in patients with advanced disease moved forward with the
completion of patients’ enrolment for the 2nd dose cohort. This DNA vaccine addresses
a tumour-specific antigen, epitope PSMA27, a short stretch of 9 amino acids (27
nucleotides) derived from the prostate cancer antigen PSMA (prostate specific
membrane antigen), which has been fused onto a portion of the gene for FrC of TT
(Fragment C of Tetanus toxin).
In the first cohort, half of the patients were administered the vaccine by simple
intramuscular injection whereas the other half were by intramuscular injection with
electroporation. Electroporation consists of the delivery of electrical pulses to destabilise
the cell membrane so that large molecules like pDNA can enter the cell more easily
resulting in a higher concentration of plasmid in the cell. The company has been
informed by the Principal Investigator that results from the first cohort could be
available sometime in calendar H1 2007.
DNA vaccine therapeutic pipeline was extended by adding two new potential clinical
targets: one therapeutic cancer vaccine for the treatment of Human Papilloma Virus
(HPV), the cause of cervical cancer and one for prophylactic purposes addressing H5N1
or “bird flu”.
The preclinical studies for the DNA influenza vaccine have started and the Company
envisages commencing the clinical programme towards the end of calendar 2007. DNA
vaccines have a number of advantages over conventional vaccines such as:

DNA vaccines can be assembled rapidly once the appropriate antigens are
identified;

they can be manufactured in a relative short period of time;

good response can be obtained at low doses;

small quantity of vaccine can vaccinate a large number of people.
J. M. Finn & Co. 3
MMI Target Price 18 January 2007

DNA vaccines have favourable safety profiles and do not use live or attenuated
viruses

Regulatory approval through We believe that DNA vaccines could obtain regulatory approval through a mock-up
mock-up application application whereby the Company goes through many of the stages of regulatory
approval on the basis of one virus strain. Once the emerging/pandemic strain has been
identified, DNA vaccines could simply replace the mock-up strain without having to go
through the entire regulatory process from scratch.

Reported clinical trials results overview

Results from a dose escalation study for follicular lymphoma involving 30 patients,
Results available from one dose
recruited between 2001 and 2004, were presented at the 2nd Annual DNA Vaccine
escalation study for follicular
Forum in London on 18th March 2005. No toxic effects and only mild flu-like symptoms
lymphoma
were reported, which indicates that the vaccine is stimulating the patients’ immune
system. None of the 25 patients withdrew from the study and the majority remained in
remission for the duration of the trial. Blood samples from the patients belonging to the
Southampton part of the study demonstrated that a powerful and sustained immune
response of both antibody and cytotoxic T-Lymphocytes can be obtained clinically.
A review of early data in PNAS reported the use of a bespoke DNA vaccine in patients
with Follicular Lymphoma. In this study, the SCFV-FrC (the non-toxic region of tetanus
toxin from Clostridium tetan) was fused to the 3’ end of the scFv (the single-chain
variable fragment antibody sequence) of the lymphoma idiotype. Ten patients were
administered the vaccine intramuscularly at Weeks 0, 1, 2, 4, 8 and 12 with a dose
escalation from 500 to 2500µg per injection. In 8 of the 10 patients the vaccine
presented the antigen to the immune system but in 2 cases this did not occur as they
might have had residual disease, confirming that vaccination works better when the
tumour burden is very low or absent. T-cell responses were seen in 5 of 7 of those
evaluated among the 8 patients. After 1-2 years from the initial vaccination all 5 patients
remained in remission or with very low volume of local disease.

Table 2: DNA vaccines - Southampton University Hospitals NHS Trust –List of clinical trials &
ID nos.
National Research Project title Sample group description Status
Register - publication
ID

N0231084278 Phase l/ll study of idiotypic 30 patients with FCL in first Completed in 1 reported.
(A multi-centre study vaccination for follicle centre clinical remission 2 centres results being
results refer to 1 lymphoma (FCL) colleted
centre)

N0231155201 A phase I/II trial of idiotypic Non-randomised open label Ongoing

vaccination for multiple myeloma
using a genetic approach in patients
post autologous stem cell
transplantation (MMIFTT)
study in patients aged > 18
with multiple myeloma
treated by high dose chemo
(-radio) therapy and stem
cell autograft.

N0231154842 Phase l/ll study of DNA vaccination Patients awaiting allogenic Ongoing
against a CMV/VrC of tetanus toxin transplant from sibling
fusion gene in allograft donors and (donor)
recipients

N0231155036 Phase l/ll trial of anti-CEA DNA
vaccine (ACVA) with a CEA/pDOM
fusion gene given by intramuscular
injection in patients with carcinomas
expressing CEA.
Patient who are known to Ongoing
be HLA A2+, whose
tumours express CEA by
immuno-histochemistry.

N0231155113 A phase l/ll trial of DNA vaccine with In HLA A2+ patients with Ongoing
a PSMA27/pDom fusion gene prostate carcinomas

Source: www.nrr.nhs.uk

4 J. M. Finn & Co.

MMI Target Price 18 January 2007

DNA vaccine background

Prof. Freda Stevenson and her team have been working for over a decade developing
novel approaches to vaccine design and strategies to utilise DNA vaccines that induce
the immune system to attack cancer cells. Initial work has focused on “bespoke” or
patient-specific vaccines for the treatment of follicular lymphoma, the second largest
non-Hodgkin’s lymphoma (NHL) subtype, and myeloma cancers, for which a customised
preparation and manufacture is required.

The choice of these two cancers was deliberate due to the patient-specific
Developmental step-wise approach
characteristics of the diseases. For example, each follicular lymphoma patient has a
unique idiotype, which is different from the idiotype of all other patients affected by this
condition. For this reason, a single drug/vaccine will not work in all follicular lymphoma’s
patients. This idiotype occurs nowhere else in the patient, making the possibility of
“collateral damage” negligible. By safely delivering the vaccine to these types of patients,
Foundations laid by the development
DNA vaccine scientists formed a foundation for the development of tumour specific and
of bespoke vaccines
“broad-spectrum” treatment, targeting universal tumour specific antigens and giving
shape to the current DNA vaccine pipeline.

The DNA vaccine technology platform uses DNA that encodes specific tumour-derived
antigens fused to a Fragment C (FrC) of tetanus toxin (TT). FrC improves the
presentation of antigens to the immune system resulting in activation of both the humoral
(antibody) immune response through B cells and the cellular immune response through
CD8 cells. The result is that an effective immune response is mounted against otherwise
poorly immunogenic tumour antigens.

Prof. Stevenson’s research work is internationally well documented through the

publication of a significant number of papers on the findings emerging from the research
on immunology, DNA vaccines and DNA fusion technology in renowned, peer-reviewed
international scientific journals like:

European Journal of Immunology (Vol. 36, Issue 5, pp 1070-1073, Apr 2006);

Discovery Medicine (Vol. 5, No 25, pp 37-42, Feb 2005);

PNAS (Proceedings of the National Academy of Science of United States of
America) (Vol. 101, suppl. 2, pp 14646-14652, Oct 2004)

A more extended list of published papers is available in Appendix ll at the back of this
document.

J. M. Finn & Co. 5

MMI Target Price 18 January 2007

Chemotherapies
The organometallic ruthenium(ll)-arene anticancer complexes ONCO 4402 and ONCO
2 compounds have almost completed
4403 are at the final stages of the pre-clinical trials with key in-vivo studies expected to
the pre-clinical studies
be completed in early Q1 2007 and results available shortly afterward. Stability,
safety and efficacy are three key tests that must be completed before a CTA (Clinical
Trial Application) can be submitted to the regulators. The therapeutic window for these
compounds remains open for the time being, until the results have been reviewed.
Clinical trials are expected to start sometime in early H2 2007.

Table 3: Tests status for ONCO 4402 and ONCO 4403

Stability Continuous type testing that is done throughout the life of the
compound.
Safe dosage Ongoing – MTD (Maximum Tolerated Dosage) studies have
moved forward. Completion expected in early Q1 2007.
Efficacy Ongoing – Completed efficacy tests in laboratory models in
about two thirds of a wide range of human cancer cells
considered. Completion expected in early Q1 2007.
Tissue distribution study Initial radio-label and bio-distribution studies completed further
studies planned
Source: MMI Group

Ruthenium (ll) complexes
have demonstrated important
differentiating advantages
3rd compound successfully
manufactured
So far, pre-clinical data in solid tumours have demonstrated important diffentiating
advantages over platinum group compounds including lower toxicity and the induction of
high anti-cancer activity especially in lung cancer. The data has also shown non-cross
resistance and as allergies to platinum are well known, no allergic reactions to ruthenium
were observed. Current marketed platinum group compounds include cisplatin (1978)
used in testicular and ovarian cancers; carboplatin (1985) used extensively in small cell,
non small cell lung cancer and ovarian cancer; and oxaliplatin (1998) for colorectal
cancer.
ONCO 4417 is the third compound also in pre-clinical development, which is at a slightly
earlier stage of development when compared to ONCO 4402 and ONCO4403. This
compound has been successfully manufactured to a clinical grade.

These compounds are at an early pre-clinical stage of development. A number of

Pineapple protease in early
pineapple protease enzymes with cancer killing activity have been identified and a novel
development stage
delivery system has been discovered, which enables the compound to reach directly the
cancer cells avoiding collateral damage.

Ruthenium – Background information

Between 2002 and 2004, Oncosense licensed a portfolio c.8,000 patented compounds
from its inventors, the research group headed by Prof. Peter Sadler and Prof. Duncan
Jodrell within the Departments of Chemistry and Clinical Oncology respectively at
Edinburgh University, who are also consultants to the ruthenium chemistry project on an
exclusive basis. Dr. James Hoeschele, co-inventor of the best selling platinum based
chemotherapy drug Carboplatin joined Prof. Sadler’s research team to conduct a number
of key studies, and his involvement continues.

Prof. Sadler’s research work is internationally well documented through the publication of
a significant number of papers on renowned, peer-reviewed international scientific
journals. A list of some of the published papers is available in Appendix ll at the back of
this document.

6 J. M. Finn & Co.

MMI
Results from advanced in-vivo studies
are expected in Q2 2007
Preventing HIV entrance to the host
cell membrane by silencing the
genes of two chemokine receptors
using ribozymes
Ribozyme-based technology
demonstrating significant reduction
in HIV-1
Single-stranded antisense RNA
Target Price 18 January 2007
Ribozyme anti-viral compounds
In-vitro studies showed that VIR5103 is able to block HIV infection and the lentiviral
vector has been successful in delivering VIR5103 to the targeted cells and maintained
the production of the molecules for a prolonged period of time.
Advanced in-vivo studies will be commenced soon and the initial results are expected to
be available in Q2 2007.
Should the delivery mechanism prove as efficient in-vivo as in-vitro it will not only
allow the Company to push forward with the preclinical programme but will further
strengthen MMI’s negotiating position with interested parties.
VIR5103 background
VIR5103 belongs to the fusion inhibitor class of ARV (antiretroviral) drugs that work on
the outside of the host CD4+ cell to prevent HIV from fusing with and infecting it. Fusion
inhibitors act by binding to an envelope protein and blocking the structural changes
necessary for the virus to fuse with the host CD4+ cell. If HIV cannot penetrate the host
cell membrane and infect the cell, HIV cannot replicate within the host cell. Fusion
inhibitors are usually prescribed to those patients that have developed a resistance to
the other available treatments.
MMI uses specifically designed and proprietary hammerhead ribozymes. Hammerhead
ribozymes are synthetically engineered molecules constructed to act as "molecular
scissors" capable of cleaving target RNA in a highly specific manner. Ribozymes are
used to deplete simultaneously the mRNA (messenger RNA) of two transmembrane
chemokine receptors, CCR5 and CXCR4, normally present together with the CD4
receptor on the membrane of human PBMCs (peripheral blood mononuclear cells), the
natural host cells of the virus in adults, and to silence the genes of these two co-
receptors using siRNA (small interfering RNAs). The result is to inhibit the entry of HIV-1
into human cells. Depending on which co-receptor is used on the membrane of the
PBMCs the HIV-1 strain is classified as R5 M-tropic (Macrophage-tropic) and X4 T-
tropic (T-cell tropic) if CCR5 and CXCR4 are respectively involved or dual-tropic (also
known as “Fusin”) if both of them are expressed.
In in-vitro results demonstrated that the use of ribozyme-based technology
simultaneously depleted the expression of both CCR5 and CXCR4 leading to a
significant reduction in HIV-1 infection in PBMCs. A substantial decrease in the mRNA
levels for both chemokine receptors was obtained 2 days after transfection of PBMCs in
culture and a reduction of cell-surface receptors occurred 3-5 days after transfection,
depending on the donor sample. Although the loss of the receptors on the cell surface
was not total it was sufficient to inhibit HIV replication.
Most of the available HIV treatments aim at the inhibition of specific proteins that are
unique to the virus, but given its high mutation/adaptation propensity patients over time
have developed increasing resistance. VIR5103 targets the cellular gene making
adaptive mutations unlikely and therefore resistance is improbable.
J. M. Finn & Co. 7
MMI Target Price 18 January 2007

Clinical results from VIRxSYS Corp. HIV gene therapy

At the beginning of November 2006, results from VIRxSYS Corp. Phase I, open-label,
non-randomised clinical trial evaluating VRX496, a gene-based immunotherapy for the
treatment of HIV were published in the Proceedings of the National Academy of
Sciences. The trial was conducted at the University of Pennsylvania, School of Medicine
and evaluated the safety and tolerability of VRX496 on 5 subjects with chronic HIV
infection who had failed to respond to at least two ARV (antiretroviral) drug regimes.
Each of the five patients tolerated the gene therapy treatment and experienced a
decrease in viral load and either a stable or increased CD4 T-cell counts.

These results validate and VRX496 is the first and only lentiviral vector currently administered to human
conceptually de-risk Viratis’ approach clinical trials approved by a regulator (FDA).

The results from this study are particularly important for MMI’s VIR5103 ribozyme as it
validates and conceptually de-risks its approach given that both Companies’ anti-HIV
programmes are based on lentiviral delivery mechanism and targeting RNA. VIRxSYS
has successfully pioneered the manufacturing and moved forward with the clinical trial
Useful insight on the regulatory (Phase II trial underway, preliminary results should be available in 2007). The fact that
procedures VRX496 has made it to the clinic provide companies like MMI with a useful insight into
the regulatory procedures, assessment criteria and material required to ease the various
approval stages.

Table 5: Viratis Ltd. vs. VIRxSYS, Corp.

VIR5103 (Viratis Ltd.) VRX496 (VIRxSYS, Corp)
Targeting cellular gene Targeting HIV envelope gene

the type of target makes adaptive mutations

unlikely and therefore resistance is
improbable
Treatment activity level kept over time as
ribozymes are catalytic and are not consumed.
Leading to increased activity and possibly
sustained activity
Blocks HIV entry
HIV may be able to generate adaptive
mutations to overcome the therapy and
possibly develop resistance, similarly to PI
(protease inhibitors) like saquinavir, ritonavir,
amprenavir and others
Antisense RNA is consumed as it eliminates viral
RNA decreasing the activity of the treatment
Autologous (patient specific) CD4+ T cells are
re-engineered with a lentiviral vector expressing
a genetic long antisense sequence and re-
introduced into the body to repopulate the
patient’s immune system
Blocks HIV replication in CD4+ T cells

Source: Company data

MMI is applying its ribozyme technology expertise to develop an additional ribozyme

Pipeline extended
compound, for which further IP was licensed in the earlier part of the year, addressing
Hepatitis B virus (HBV), currently in in-vitro proof-of-concept studies.

Hepatitis is an inflammation of the liver that can be caused by viruses, medications or

HBV description and statistical data
toxic agents. Currently there are at least 5 forms of viral hepatitis (A, B, C, D and E) with
HBV being the most serious form. The HBV attacks the liver and can cause liver failure,
liver cirrhosis and eventually primary liver carcinoma. Although HBV is treated with
drugs, it cannot be cured. About 1.25m Americans have been infected with HBV, 20-30%
of whom acquired the virus in childhood. HBV is endemic in sub-Saharan Africa, parts of
East Asia and Western Pacific Islands. According to the WHO (World Health
Organisation) 2bn people have been infected with HBV and 350m worldwide have a
chronic (lifelong) disease. This infection is the 9th leading cause of death worldwide,
accounting for 1.2m deaths annually. HBV is transmitted via blood or sexual activity, but
also may be transmitted from mother to child during childbirth.

8 J. M. Finn & Co.

MMI Target Price 18 January 2007

MMI has licensed from the inventors of the ribozyme technology a technology known as
“immune sponge” that will be utilised to develop a compound for the treatment of
rheumatoid arthritis.

Rheumatoid arthritis (RA) is an autoimmune disease that causes chronic inflammation of

Rheumatoid arthritis description and
statistical data
joints, surrounding tissue and other organs in the body. RA has a worldwide estimated
prevalence of 1 to 2%. Prevalence increases with age, approaching 5% in women over
age 55. The average annual incidence in the United States is about 70 per 100,000
annually. Both incidence and prevalence of RA are 2 to 3 times greater in women than in
men. Although RA may present at any age, patients most commonly are first affected in
their sixties.

MMI’s upcoming events

The three combined technology platforms provide a wide range of innovative treatment
paradigms with promising clinical milestones, which the Company expect to achieve this
year, developed by highly technologically skilled and experienced scientific teams. The
seasoned management is concentrating its efforts on driving the compounds through the
various hurdles that will lead to the completion of valuable commercial partnerships in
line with the current trends in the sector (see below). We expect substantial value-driving
news flow in the coming months as per the table below.

Table 6: Summary of upcoming events in chronological

Subsidiary Date (calendar) Event
Chemotherapies Q1 2007 Completion of pre-clinical studies
Chemotherapies Q1 2007 Report data on pre-clinical studies
Ribozymes Early Q1 2007 Data from proof-of-principle studies
st
DNA vaccines Q2 2007 Report data from prostate cancer Phase l/ll 1 cohort
Chemotherapies H2 2007 Clinical trials expected to commence
Ribozymes Q2 2007 Report data on Proof-of-principle studies
DNA vaccines Q4 2007 Influenza vaccine clinical programme expected to
start
DNA vaccines, 2007/2008 Seeking to secure licensing deals
chemotherapies,
ribozymes

Source: MMI Group and JM Finn’s estimates

J. M. Finn & Co. 9

MMI Target Price 18 January 2007

NEWS FLOW – INDUSTRY OUT-LICENSING and M&A ACTIVITIES

Big pharma under the dual
pressure of massive research
costs and patent expirations
Pharmaceutical industry …adapting strategies to keep the engine of discovery
purring
Indisputably, profitability of the world’s leading pharmaceutical companies over the
coming decades will depend on the ability of their R&D operations to bring new effective
drugs/technologies to market. Big pharma is under dual pressure of massive research
costs and patent expirations. Between 1992 and 2005, we have seen the development of
an inverse relationship between the scale of R&D investment and the number of new
drug approvals, as represented in the graph below.

Figure 2: New drugs approvals vs. R&D spending 1992-2005

53
39.4
38.8

39 33.2
32.1
35
29.8
30 26.0
28 27
26 25 22.7 24
22 21.0 21
19.0
16.9 17 16
15.2
12.7 13.4 11
11.5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

New drugs approvals (NMEs) PhRMA Member R&D spending (US$bn)

Source: Burrill & Co presentation given at the Wellcome Trust Translation Event, London, 29/06/06

According to analysis prepared by Scrip Magazine the 2004 R&D spending per NME
(new molecular entities) submission was estimated to be c.US$1.25bn: almost four times
what it was in 1995 (US$317m/NME submission). Worldwide pharma R&D spending per
global NME launch spiked to a record US$2.3bn in 2004, up 43% from 2003. CMR
International estimates that worldwide pharmaceutical R&D spending will reach
US$62bn by 2007 (from US$53bn in 2004).

Mega mergers did not increase R&D
productivity
Mega mergers within the industry do not seem to have resulted in a greater “breadth” of
activity across therapy areas nor have increased research productivity. In some cases
the amalgamation of pipelines has had a deleterious effect on R&D output driving “big
pharma” to devise alternative development strategies. For example, in 2000,
GlaxoSmithKline (GSK) created seven Centres of Excellence for Drug Discovery (CEDD)
to develop the most promising drugs that hit the proof-of-concept, but over the years
found that this strategy was not paying back adequately and in response changed its
approach to pipeline building by creating instead the Centres of Excellence for External
Drug Discovery (CEED): finding partners for earlier-stage candidates, while still retaining
buyback rights in lieu of a profit sharing or preferential royalty rate arrangement.

With c.US$100bn (i.e. US$23bn in 2006 and US$19bn in 2007 (source: IMS)) worth of
c.US$100bn worth of branded drugs branded drugs losing patent protection in the next five years and stagnant sales, large
losing patent protection pharmaceutical companies are enhancing their thinning pipelines by licensing new drugs
from smaller companies or buying them outright.

During the past year, there has been a
strong upswing in ”big pharma” M&A
activity
During the past year, there has been a strong upswing in M&A activity with leading
pharmaceutical companies acquiring products at an increasingly early development
stage. In 2006 there were some US$50-55bn of M&A transactions. Since the beginning
of October seven US companies made acquisitions worth around US$12bn, two of which
are of particular significance for MMI as these companies are active in DNA vaccines
and RNAi compounds respectively. The hefty prices paid by big pharma is a clear
indication of these companies’ pipeline problems.

10 J. M. Finn & Co.

 MMI
Pharmaceutical companies under
increasing pressure to replenish
their pipelines
Merck pays US$1.1bn in cash for early
stage pipeline and no products on the
market
SR Pharma expected to receive a total
of US$95m from a sub-licensing
agreement
A “pure” RNAi company has been
formed in the US
Such deals validate MMI technology
Target Price 18 January 2007
Table 7: Big Pharma M&A activity in Q4 2006
Company Target Price Reason for the purchase
Pfizer PowerMed Ltd ≤US$400m* DNA vaccines
Genzyme AnorMED US$584m Mozobil for haematopoietic stem-cell
transplantation
Genentech Tanox US$919m Improve return on Xolair (omalizumab)
Merck & Co Sirna US$1.1bn RNA interference technology (RNAi)
Therapeutics
Eli Lilly ICOS US$2.1bn Full ownership of Cialis (tadalafil)
Gilead Myogen US$2.5bn Bolster pulmonary programme
Abbott Labs Kos US$3.7bn Cholesterol treatments
Pharmaceuticals
Vol. 5, December 2006 *according to press reports
Merck’s acquisition was for US$1.1bn in cash, of Sirna Therapeutics (Sirna), formerly
known as Rybozyme, a San Francisco biotechnology company with an early stage
development pipeline and no products on the market. Sirna's lead drug candidate, Sirna-
027, is being developed as a treatment for wet, age-related macular degeneration
(AMD). The deal was priced at 100% premium to Sirna’s closing price of US$6.45. Sirna
specialises in RNA interference technology (RNAi), a gene-silencing mechanism in
which double-stranded RNA instigates the degradation of mRNA (messenger RNA) from
specific genes.
Merck is not new to RNAi technology, in 2001 it acquired Rosetta Inpharmatics, Inc. and
in 2003 signed a collaboration with Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY) for
an undisclosed set of targets that was followed by a second agreement in 2004 which
focused on AMD. In September 2005, Alnylam announced a licensing agreement with
Novartis SA for a total value of US$770m.
In 1958 Francis Crick, one of the two scientists that discovered the structure of DNA in
1953, gave an oversimplified outline of genetics: “DNA makes RNA makes protein” and
we can appropriately add to it “RNAi makes big money”.
Another important transaction within the same field is the sub-licensing deal, announced
in September 2006, between Quark Biotech Inc, Atugen AG (SR Pharma plc subsidiary)
and Pfizer Inc. SR Pharma is expected to receive milestones payments of up to
US$95m. The agreement includes an initial payment of US$2m and a first milestone of
US$1.5m on the start of Phase l. The therapeutic entity in question is also a siRNAi
product for the treatment of AMD. Although both companies have a pre-clinical product
for the same condition, RNAi represents one of the most promising new frontiers in drug
discovery as it holds a number of inherent and fundamental benefits that allow its use in
a variety of therapeutic areas like oncology, neurology, dermatology, ophthalmology,
respiratory and viral conditions.
Also, CytRx, Corp a US biotechnology company has just announced the creation of a
subsidiary solely focused on RNAi technology. CytRx will own 85% of the subsidiary,
called RXi Pharmaceuticals Corp, with the Company's scientific advisory team holding
the remaining 15 percent. The advisory team consists of Craig C. Mellow, winner of the
Nobel Prize in Medicine for his role in co-discovering RNAi. Gregory J. Hannon, Tariq M.
Rana and Michael P. Czech are also on the board. Each member boasts key discoveries
for the uses of RNAi technology.
The above-mentioned transactions represent a confirmation of the major shift in
perception by world leading pharmaceutical companies about the prospects for RNAi
molecules as a novel therapeutic class, joining the ranks of small molecules and
antibodies as key drug modalities. These deals are particularly positive for MMI as it
J. M. Finn & Co. 11
MMI Target Price 18 January 2007

validates the technology and provides the first long-term commitment made by large
pharmaceutical organisations in this area.

…DNA vaccines…
Pfizer’s first purchase of human vaccine technology is a strategic opportunity to
enter the vaccine market

Powermed Ltd. acquisition
Pfizer’s acquired for ca. US$400m (according to press speculations as the amount paid
remains undisclosed) PowderMed Ltd. - a privately held immunotherapeutic company
based in Oxford and created two years ago when Chiron spun off the powder injection
part of the PowderJet Pharmaceuticals business it had acquired in 2003. Chiron itself
has since been acquired by Novartis AG.

Therapeutic and prophylactic
DNA vaccines
PowderMed focuses on the clinical development and manufacture of therapeutic and
prophylactic DNA-based vaccines for cancer and viral diseases with 4 clinical (1 Phase ll
and 3 Phase l) and 3 pre-clinical stage projects. PowderMed’s vaccines are delivered
using PMEDTM (Particle Mediated Epidermal Delivery), a needle-free, virtually painless
delivery system that requires minimal medical training, allows self-administration and
requires no refrigeration for stockpiling.

GlaxoSmithKline Plc (GSK) predicted in September 2006 that global vaccine sales would
Vaccine market is predicted to
triple by 2015, from about US$11bn in 2005, helped by the arrival of several modern new
triple by 2015
vaccines. DNA vaccines are believed to be the best way to overhaul the cumbersome,
although safe, 50-year old manufacturing system.

12 J. M. Finn & Co.

MMI Target Price 18 January 2007

FINANCIALS and VALUATION

Maintained our forecasts We have maintained our overall forecast for the years 2007 and 2008. We remain
confident that the Company is well positioned to secure a licensing deal within the next
6-8 months, which could include upfront fees, milestone payments and royalties on sales
ranging between 10 and 50%.

Confirmed that discussions are MMI’s management has confirmed once again that they are in discussions with a
continuing number of large pharmaceutical players but no further information is available with
regard to which of the three technology platforms or products are included in the talks.
We have not changed our revenue forecast and maintained a £20m upfront fee in 2008
as per comparable amounts paid in recent transactions in the cancer vaccine arena (for
more information please refer to our July 2006 note).

As MMI’s extensive R&D pipeline progresses, the Company’s direct involvement will
increase and we expect the cost profile to rise proportionately. We have only made the
necessary adjustments to include figures that reflect the Company’s investment made in
the subsidiaries, the revised definition of R&D expenditure and the adoption of FRS20
that refers to the value of the share options granted to employees, which is treated as an
expense.

The cash resources at the end of September were £7.4m, which should allow the
Cash resources of £7.4m Company to be operational for the next year or so (on our cash estimates) and continue
to give them leverage in their negotiations with commercial partners.

Future revenues highly dependant Although we feel confident that the licensing negotiations will reach a positive conclusion
on a licensing deal we are also very aware that any delay or cancellation of the talks would imply MMI
returning to the market to raise additional capital to fund operations.

July’s price target valuation took into
consideration only two of the three
technology platforms
VALUATION
The valuation of any young company such as MMI is a challenging task. MMI is moving
towards the next major development phase. In our July note we indicated a conservative
price target of 250p based on the mid-point marker value of companies in the cancer
vaccine arena: Cell Genesys (GEGE US), Cerus (CERS US), Dendreon (DNDN US),
Genitope (GTOP US) and Oxford Biomedica (OXB LN). This gave at the time an
approximate market value between £110m and £190m, after making a proportional
adjustment to take into consideration the MMI ownership of DNA vaccines and
chemotherapies and excluded rybozymes.

The preclinical development progress made in the last few months and the ever
increasing news flow emerging from the relentless M&A and licensing activity in the
industry have greatly de-risked MMI’s approach. Given the fact that there are no listed
direct comparable companies in terms of the technology platforms covered by MMI we
have decided to value MMI using a discounted P/E multiple analysis and not to use a
discounted cash flow due to the current difficulty in accurately forecasting MMI’s future
revenues and earning given the lack of clarity on the licensing pattern.

Our fair value for the share is 435p and we arrive at this price by applying a 25x PER
multiple to our estimated 2008 EPS forecast of 25.3p discounted back to the present
time by 35%. We believe that a 25 multiple would be typical for a young company just
achieving profitability. The 35% discount represents our broad estimation of the
continuing risks associated with achieving our forecasts and, by implication, the
development milestone we have described elsewhere in this note.

J. M. Finn & Co. 13

MMI Target Price 18 January 2007

RISKS

The primary risk with MMI’s shares is the clinical risk where data from ongoing or
future trials could be disappointing and have a significant negative impact on MMI as
future profitability and potential milestone payments depend on the results of these
trials. Products that appear to have a promising profile in early clinical trials may
falter in later development trials.

Difficulties in enrolling patients for clinical trials could delay the drug development
process.

There are regulatory risks associated with most of MMI’s drugs due to their novel
approach as i.e. no cancer vaccine has been approved yet, which may raise new
regulatory issues that could delay or make a regulatory approval more difficult and
even with positive data there is no guarantee that the drug will be recommended by
the regulators advisory panel and later approved.

The ever-present financial risks for most companies in this industry. MMI has
sufficient cash resources to fund operations for the 14 months but, we believe,
would have to raise additional capital if a licensing agreement is not signed within
this time frame. The highly competitive nature of the industry could prevent
significant product penetration and revenues.

Figure 3: Major Shareholders

David Best 21.3%

M&G 17.1%

Margaret Mitchell 11.3%

USS 7.9%

Man Financial 4.0%

Mars AM 1.7%

Gartm ore 1.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Source: Thomson-One-Financials

14 J. M. Finn & Co.

MMI Target Price 18 January 2007

Table 8: Profit & Loss Account

Y-end March - (£m) 2004A 2005A 2006A H1 H2 2007E 2008E
‘07A ‘07E
Fee Income 0.1 0.2 0.2 0.1 0.1 0.1 0.1
Rental Income 0.2 0.1 - - - - -
Investment Management 0.1 0.1 0.0 0.1 - 0.1 -
Upfront Fees & Milestones - - - - - - 20.0
Revenues 0.4 0.4 0.2 0.2 0.0 0.2 20.1

COGS - - - - - - -

Gross Profit 0.4 0.4 0.2 0.2 0.0 0.2 20.1

R&D and patent costs 0.2 0.5 1.2 1.0 1.0 2.0 2.0

Administration costs 2.7 2.4 2.3 1.2 1.9 3.1 3.6

EBITDA -2.5 -2.4 -3.3 -2.1 -2.7 -4.8 14.5

Depreciation 0.1 0.1 0.1 0.1 0.0 0.1 0.1

Amortisation & impairment of goodwill 0.1 0.1 0.1 0.1 0.1 0.2 0.1

EBIT 2.4 -2.2 -3.1 -2.0 -2.6 -4.6 14.7

Interest receivable 0.0 0.1 0.2 0.2 0.1 0.2 0.1

Interest payable 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net interest 0.0 0.1 0.2 0.2 0.1 0.2 0.1

Profit/Loss Before Taxation -2.3 -2.2 -2.9 -1.8 -2.6 -4.4 14.9

Tax - 0.0 0.0 - - - -

Profit/Loss After Taxation 2.3 -2.2 -2.9 -1.8 -2.6 -4.4 14.9

Equity minority interests - - 0.1 0.2 - 0.2 -

Net Profit/Loss for the year -2.3 -2.2 -2.8 -1.6 -2.6 -4.2 14.9

Av. no. of shares 42.2 42.2 48.8 58.6 58.6 58.6 58.6

EPS -5.27 -4.43 -5.10 -2.74 -4.36 -7.10 25.33

Source: JM Finn estimates

J. M. Finn & Co. 15

MMI Target Price 18 January 2007

Table 9: Balance Sheet

Y-end March - (£m) 2004A 2005A 2006A 2007E 2008E

Fixed assets 1.8 1.8 1.8 2.2 2.1

Current assets 1.6 2.1 9.7 5.8 21.0

Current liabilities 0.3 0.3 0.6 1.2 1.6

Net current assets 1.3 1.8 9.1 4.6 19.4

TOTAL CURRENT ASSETS 3.2 3.6 10.9 6.8 21.5

Creditors (falling >1 yr) 0.0 0.0 0.0 0.0 0.0

Provisions 0.1 - 0.2 0.2 0.3

Long-term liabilities 0.1 0.0 0.2 0.2 0.3

NET ASSETS 3.0 3.6 10.7 6.6 21.2

Capital & Reserves

Called up share capital 0.1 0.1 0.1 0.1 0.1

Share premium account 6.7 9.0 18.8 18.8 18.8

Other reserves 1.5 1.7 1.7 1.7 1.7

Profit & Loss reserves -5.5 -7.2 -9.9 -14.1 0.8

Equity shareholders’ funds 3.0 3.6 10.7 6.5 21.1

Equity minority interests - 0.0 0.0 0.1 0.1

Capital employed 3.0 3.6 10.7 6.6 21.2

Source: JM Finn estimates

Table 10: Cash Flow

Y-end March - (£m) 2004A 2005A 2006A 2007E 2008E

Cash flow from operations -1.5 -1.5 -2.5 -4.0 15.6

Cash flow from investing -0.1 -0.2 -0.1 -0.3 -0.3
Net interest 0.0 0.0 0.1 0.2 0.1

Net cash flow before financing -1.5 -1.6 -2.5 -4.0 15.5

Cash flow from financing 1.8 2.2 9.8 0.0 0.0

Change in liquid funds 0.2 0.6 7.3 -4.0 15.5

Cash at the bank at the beginning of the period 1.0 1.2 1.9 9.2 5.2

Cash at the bank at the end of the period 1.2 1.9 9.2 5.2 20.6

Source: JM Finn estimates

16 J. M. Finn & Co.

MMI
Current flu-vaccine manufacturing
process is lengthy, complicated
and 50 years old
Three types of viruses can cause
influenza
… and further classification by
strain and subtype
Target Price 18 January 2007
APPENDIX I DNA vaccines: Influenza and H5N1 (bird flu)
Traditional flu vaccines use weakened elements of the actual flu virus in their
composition and take many months to produce in large scale. Scientists are forced to
predict months in advance the likely strain of flu that will circulate each year, then take
samples of those viruses and grow them in massive numbers of chicken eggs and if
paradoxically should the avian flu sweeps through the world's henhouses, there may not
be enough chickens left to lay the eggs. Current flu-vaccine manufacturing process is
over 50 years old and cannot respond rapidly to a different emerging strain of annual flu
or a potential pandemic of a mutated avian strain as it takes between nine and ten
months to produce each year’s flu shots.
Figure 3: Current flu-vaccine manufacturing process
Source:
DNA-based vaccines work in a completely different way. They employ snippets of DNA
constructed in the laboratory that match genetic elements of the flu virus. When the
DNA-vaccine is administered, it begins to express the protective proteins, which the host
recognises as part of flu, thereby initiating an immune response. DNA vaccines can be
manufactured in a relative short period of time and as good response can be obtained at
low doses a small quantity of vaccine can be used to inoculate a large number of people.
Influenza (flu) – Brief overview
The name influenza or flu for short goes back several centuries when it was thought that
the disease was caused by supernatural “influences”.
Human influenza is a viral infection of the respiratory tract caused by three types of
orthomyxoviruses: A, B and C. Most cases of flu, especially those that occur in
epidemics or pandemics, are caused by the influenza A virus, which can affect a variety
of animal species, whilst the B virus, which normally is only found in humans, is
responsible for many localized outbreaks. The influenza C virus is morphologically and
genetically different than the other two viruses and is generally non-symptomatic and of
little medical concern.
Influenza A and B viruses are further classified by strains and subtype on the basis of
changes that occur in two genes that contain the genetic material for the production of
two glycoprotein spikes that are embedded in the envelope of the virus: haemagglutinin
(HA) and neuraminidase (NA). These two proteins are primarily responsible for the
viruses’ ability to cause infections since HA helps the virus to get into the host cell and
NA facilitates the release of the newly produced virus particles from the host cell.
J. M. Finn & Co. 17
MMI Target Price 18 January 2007

The influenza genome for type A and B is organised in 8 pieces of single stranded RNA
whereas type C has 7 segments. Each segment functions as an individual gene coding
for one of the virus proteins. Segment number 4 contains the gene for HA and segment 6
encodes the gene for NA. The other segments and genes are important for other parts of
the virus’ structure (capsid) or function (replication). There are 16 known HA subtypes
and 9 known NA subtypes and each combination represents a new virus strain for which
the immune system has to make new antibodies to combat it. This sudden form of
evolution is known as “antigenic shift” and can only be found in type A but not in type B
or C.

Influenza viruses are very All influenza viruses are very dynamic with a high mutation rate due to the presence of
dynamic RNA in their genetic material. The progressive accumulation of individual mutations is
known as “antigenic drift” because the shape of the antigen slowly drifts into a different
shape with each generation of virus. Eventually, the changes will be such that the
original antibodies are no longer able to bind to it and an individual can become infected
with this newly evolved virus. Both A and B influenza viruses continually undergo
antigenic drift. This is one of the main reasons people can become infected with
influenza viruses more than one time and why global surveillance is critical in order to
monitor the evolution of human influenza virus strains for selection of which strain should
be included in the annual production of influenza vaccine. There are three known A
subtypes of influenza viruses currently circulating among humans: H1N1, H1N2 and
H3N2. In most years, one or two of the three virus strains are active.

A(H1N1) killed 20m people In 1918 a strain of influenza A designated H1N1 killed over 20m people worldwide. Forty
worldwide years later, after considerable antigenic drifting and shifting, a new type A had evolved
with completely different looking HA and NA called H2N2 and killed thousands of people
in the USA alone. In 1968, a strain designated H3N2 appeared. It had the same old NA
but a slightly new HA (H3) so it was a partial antigenic shift and was milder in its severity.
In 1976 the dreaded H1N1 made a brief and frightening comeback on a military base in
the USA. Although it was designated the same as the big killer of 1918, this H1N1 was
slightly different due to antigenic drift.

Avian influenza (bird flu/H5N1) - Brief overview

A(H5N1) first discovered in South
Africa
Bird flu is a very contagious infection that occurs naturally among migratory birds such
as wild ducks and geese and is caused by the A(H5N1) influenza virus subtype that was
first discovered in South Africa in 1961. Wild birds worldwide carry the virus in their
intestines and usually do not get sick from them but domesticated birds (e.g. chickens,
ducks and turkeys) are particularly vulnerable and may become infected as a result of
close and direct contact with infected waterfowl or other poultry, surfaces smeared with
droppings, water and animal feed.

Infections in domestic poultry are
classified according to virulence
Infections in domestic poultry are present in two main forms and are distinguished by low
and high extremes of virulence. The “low pathogenic avian influenza” (LPAI) is usually
associated with mild symptoms such as ruffled feathers and a drop in egg production,
whereas the “highly pathogenic avian influenza” (HPAI) to which the subtypes H5N1,
H7N7 and H7N3 belong to, spread more rapidly through flocks of poultry affecting
multiple internal organs and has a mortality rate that can reach 90-100% often within 48
hours.

Most cases in human have
resulted from becoming in direct
contact with infected poultry or
contaminated surfaces
Although, the risk of bird flu to the population is generally low, most cases of infection in
humans have resulted from coming in direct contact with infected or dead poultry or with
surfaces contaminated with secretion/excretions from infected birds. Symptoms of bird
flu in humans have ranged from typical human influenza-like symptoms like fever, cough,
sore throat and muscle aches to eye infections, pneumonia, severe respiratory diseases
such as acute respiratory distress and other severe and life-threatening complications.
The symptoms may depend on which virus cased the infection.

Avian flu outbreaks affecting humans

18 J. M. Finn & Co.

MMI Target Price 18 January 2007

Scientists fear that H5N1 virus could trigger the next pandemic as it has demonstrated
the ability to infect people and has the ability to mutate and could exchange genes with a
human flu virus, producing a completely new virus strain capable of spreading easily
between people.

6 out of 18 people infected with
an H5N1 virus strain died
The first documented cases in humans appeared in Hong Kong in 1997, when 18 people
infected with an H5N1 virus strain were admitted to hospital and 6 of them died. It is
worth noting that the most of the people that died had direct contact with poultry infected
with H5N1. There have been a few cases that appear to be human-to-human
transmission and in these cases the spread has not continued beyond one person. The
table below shows the global reported cases and deaths for the period 2003-November
2006.

Table 2: Global no. of “bird flu” cases and related deaths

Country 2003 2004 2005 2006 TOTAL

cases deaths cases deaths cases deaths cases deaths cases deaths

Azerbaijan 0 0 0 0 0 0 8 5 8 5
Vietnam and Indonesia the Cambodia 0 0 0 0 4 4 2 2 6 6
most affected countries China 1 1 0 0 8 5 12 8 21 14
Djibouti 0 0 0 0 0 0 1 0 1 0

Egypt 0 0 0 0 0 0 15 7 15 7

Indonesia 0 0 0 0 19 12 53 43 72 55

Iraq 0 0 0 0 0 0 3 2 3 2

Thailand 0 0 17 12 5 2 3 3 25 17

Turkey 0 0 0 0 0 0 12 4 12 4

Vietnam 3 3 29 20 61 19 0 0 93 42
TOTAL 4 4 46 32 97 42 109 74 256* 152*

Source: World Health Organisation (WHO) (*WHO reports only laboratory confirmed cases)

New cases being reported
beginning of the year
The incidence of human cases peaked in each of the three years in which cases have
since occurred during the period roughly corresponding to winter and spring in the northern
hemisphere. If this pattern continues, an upsurge in cases could be anticipated in late
2006 or early 2007. Since the beginning of the year some South East Asian countries
have began to report an increasing number of cases.

Figure 4: Graphical representation of table 3

97 109

74
46

42
32
4
4
2003 2004 2005 2006

Deaths Cases

Source: WHO

Figure 5: “H5N1 is moving west “

J. M. Finn & Co. 19

MMI Target Price 18 January 2007

Source: WHO
Countries with poultry or wild birds killed by H5N1.
Countries with humans, poultry and wild birds killed by H5N1

20 J. M. Finn & Co.

MMI Target Price 18 January 2007

APPENDIX ll Bibliography
Genvax Ltd.
Listed below are some of Prof. Freda Stevenson’s and Dr. Ottensmeier’s published
papers on DNA vaccines. The list does not represent the exhaustive list:

Savelyeva N, King CA, Vitetta ES, Stevenson FK.

Inhibition of a vaccine-induced anti-tumor B cell response by soluble protein antigen in
the absence of continuing T cell help
Proc Natl Acad Sci U S A. 2005 Aug 2; 102(31): 10987-92. Epub 2005 Jul 21.
PMID: 16037207 [PubMed - indexed for MEDLINE]

Sahota SS, Townsend M, Stevenson FK.

Identification and assembly of V genes as idiotype-specific DNA fusion vaccines in
multiple Myeloma
Methods Mol Med. 2005; 113:105-19.
PMID: 15968098 [PubMed - indexed for MEDLINE]

Buchan S, Gronevik E, Mathiesen I, King CA, Stevenson FK, Rice J.

Electroporation as a "prime/boost" strategy for naked DNA vaccination against a tumour
antigen.
J Immunol. 2005 May 15; 174(10):6292-8.
PMID: 15879128 [PubMed - indexed for MEDLINE]

Stevenson FK, Rice J, Ottensmeier CH, Thirdborough SM, Zhu D.

DNA fusion gene vaccines against cancer: from the laboratory to the clinic.
Immunol Rev. 2004 Jun;199: 156-80. Review.
PMID: 15233733 [PubMed - indexed for MEDLINE]

Stevenson FK, King A, Ottensmeier CH.

Vaccine therapy in NHL: future promises and current limitations.
Leuk Lymphoma. 2003; 44 Suppl 3:S85-90. Review.
PMID: 15202530 [PubMed - indexed for MEDLINE]

Rice J, Buchan S, Stevenson FK.

Critical components of a DNA fusion vaccine able to induce protective cytotoxic T cells
against a single epitope of a tumour antigen.
J Immunol. 2002 Oct 1; 169(7): 3908-13.
PMID: 12244189 [PubMed - indexed for MEDLINE]

Forconi F, King CA, Sahota SS, Kennaway CK, Russell NH, Stevenson FK.
Insight into the potential for DNA idiotypic fusion vaccines designed for patients by
analysing xenogeneic anti-idiotypic antibody responses.
Immunology. 2002 Sep; 107(1):39-45.
PMID: 12225361 [PubMed - indexed for MEDLINE]

Thirdborough SM, Radcliffe JN, Friedmann PS, Stevenson FK.

Vaccination with DNA encoding a single-chain TCR fusion protein induces anticlonotypic
immunity and protects against T-cell lymphoma.
Cancer Res. 2002 Mar 15; 62(6): 1757-60.
PMID: 11912151 [PubMed - indexed for MEDLINE]

Stevenson FK, Zhu D, Rice J.

New strategies for vaccination and immunomodulation in NHL.
Ann Hematol. 2001; 80 Suppl 3: B132-4. Review
PMID: 11757697 [PubMed - indexed for MEDLINE]

Zhu D, Rice J, Savelyeva N, Stevenson FK.

J. M. Finn & Co. 21

MMI Target Price 18 January 2007

DNA fusion vaccines against B-cell tumours.

Trends Mol Med. 2001 Dec; 7(12): 566-72.
PMID: 11733220 [PubMed - indexed for MEDLINE]

Savelyeva N, Munday R, Spellerberg MB, Lomonossoff GP, Stevenson FK.

Plant viral genes in DNA idiotypic vaccines activate linked CD4+ T-cell mediated
immunity against B-cell malignancies.
Nat Biotechnol. 2001 Aug; 19(8): 760-4.
PMID: 11479570 [PubMed - indexed for MEDLINE]

Rice J, Elliott T, Buchan S, Stevenson FK.

DNA fusion vaccine designed to induce cytotoxic T cell responses against defined
peptide motifs: implications for cancer vaccines.
J Immunol. 2001 Aug 1; 167(3): 1558-65.
PMID: 11466377 [PubMed - indexed for MEDLINE]

Stevenson FK.
DNA vaccines against cancer: from genes to therapy.
Ann Oncol. 1999 Dec; 10(12):1413-8. Review.
PMID: 10643531 [PubMed - indexed for MEDLINE]

King CA, Spellerberg MB, Zhu D, Rice J, Sahota SS, Thompsett AR, Hamblin TJ,
Radl J, Stevenson FK.
DNA vaccines with single-chain Fv fused to fragment C of tetanus toxin induce protective
immunity against lymphoma and myeloma.
Nat Med. 1998 Nov; 4(11): 1281-6.
PMID: 9809552 [PubMed - indexed for MEDLINE]

Spellerberg MB, Zhu D, Thompsett A, King CA, Hamblin TJ, Stevenson FK.
DNA vaccines against lymphoma: promotion of anti-idiotypic antibody responses induced
by single chain Fv genes by fusion to tetanus toxin fragment C.
J Immunol. 1997 Aug 15; 159(4): 1885-92.
PMID: 9257853 [PubMed - indexed for MEDLINE]

Oncosense Ltd.
Listed below are some of Prof. Peter Sadler’s published papers on ruthenium. The list
does not represent the exhaustive list:

Liu HK, Berners-Price SJ, Wang F, Parkinson JA, Xu J, Bella J, Sadler PJ.
Diversity in Guanine-Selective DNA Binding Modes for an Organometallic Ruthenium
Arene Complex.
Angew Chem Int Ed Engl. 2006 Nov 22; 45(48): 8153-8156 [Epub ahead of print] No
abstract available. PMID: 17120267 [PubMed - as supplied by publisher]

Hunter TM, McNae IW, Simpson DP, Smith AM, Moggach S, White F, Walkinshaw
MD, Parsons S, Sadler PJ.
Configurations of Nickel-Cyclam Antiviral Complexes and Protein Recognition.
Chemistry. 2006 Nov 22; [Epub ahead of print] PMID: 17120266 [PubMed - as supplied
by publisher]

Liu HK, Wang F, Parkinson JA, Bella J, Sadler PJ.

Ruthenation of duplex and single-stranded d(CGGCCG) by organometallic anticancer
complexes.
Chemistry. 2006 Aug 7; 12(23): 6151-65. PMID: 16807967 [PubMed - in process]

Yan YK, Melchart M, Habtemariam A, Peacock AF, Sadler PJ.

Catalysis of regioselective reduction of NAD+ by ruthenium(II) arene complexes under
biologically relevant conditions.

22 J. M. Finn & Co.

MMI Target Price 18 January 2007

J Biol Inorg Chem. 2006 Jun; 11(4): 483-8. Epub 2006 Apr 8. PMID: 16604356 [PubMed
- indexed for MEDLINE]

Peacock AF, Habtemariam A, Fernandez R, Walland V, Fabbiani FP, Parsons S,

Aird RE, Jodrell DI, Sadler PJ.
Tuning the reactivity of osmium(II) and ruthenium(II) arene complexes under
physiological conditions.
J Am Chem Soc. 2006 Feb 8; 128(5): 1739-48. PMID: 16448150 [PubMed - indexed for
MEDLINE]

Guichard SM, Else R, Reid E, Zeitlin B, Aird R, Muir M, Dodds M, Fiebig H, Sadler
PJ, Jodrell DI.
Anti-tumour activity in non-small cell lung cancer models and toxicity profiles for novel
ruthenium(II) based organo-metallic compounds.
Biochem Pharmacol. 2006 Feb 14; 71(4):408-15. Epub 2005 Dec 19. PMID: 16360645
[PubMed - indexed for MEDLINE]

Wang F, Habtemariam A, van der Geer EP, Fernandez R, Melchart M, Deeth RJ,
Aird R, Guichard S, Fabbiani FP, Lozano-Casal P, Oswald ID, Jodrell DI, Parsons S,
Sadler PJ.
Controlling ligand substitution reactions of organometallic complexes: tuning cancer cell
cytotoxicity.
Proc Natl Acad Sci U S A. 2005 Dec 20; 102(51):18269-74. Epub 2005 Dec 13. PMID:
16352726 [PubMed - indexed for MEDLINE]

Wang F, Xu J, Habtemariam A, Bella J, Sadler PJ.

Competition between glutathione and guanine for a ruthenium(II) arene anticancer
complex: detection of a sulfenato intermediate.
J Am Chem Soc. 2005 Dec 21; 127(50):17734-43. PMID: 16351102 [PubMed - indexed
for MEDLINE]

Yan YK, Melchart M, Habtemariam A, Sadler PJ.

Organometallic chemistry, biology and medicine: ruthenium arene anticancer complexes.
Chem Commun (Camb). 2005 Oct 14;(38):4764-76. Epub 2005 Aug 26. PMID:
16193110 [PubMed - in process]

Wang F, Bella J, Parkinson JA, Sadler PJ.

Competitive reactions of a ruthenium arene anticancer complex with histidine,
cytochrome c and an oligonucleotide.
J Biol Inorg Chem. 2005 Mar;10(2):147-55. Epub 2005 Feb 26. PMID: 15735959
[PubMed - indexed for MEDLINE]

Viratis Ltd
Qureshi A, Zheng R, Parlett T, Shi X, Balaraman P, Cheloufi S, Murphy B,
Guntermann C, Eagles P.
Gene silencing of HIV chemokine receptors using ribozymes and single-stranded
antisense RNA.
Biochem J. 2006 Mar 1; 394(Pt 2):511-8. PMID: 16293105 [PubMed - indexed for
MEDLINE]

J. M. Finn & Co. 23


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