Advancing

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Advancing oral treatments for bone joint
diseases especially for osteoporosis and arthritis
Paul Hopper Executive Chairman February 2006
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Safe Harbor Statement
This presentation contains forward-looking
statements that involve risks and uncertainties.
These forward-looking statements are not
guarantees of Bone Medical Limiteds future
performance and involve a number of risks and
uncertainties that may cause actual results to
differ materially from the results discussed in
these statements. Factors that might cause the
Companys results to differ materially from those
expressed or implied by such forward-looking
statements include but are not limited to,
development and commercialisation of the
Companys product portfolio development or
acquisition of additional products and other
risks and uncertainties. Bone Medical Limited
undertakes no duty to update any of these
forward-looking statements to confirm them to
actual results.
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Corporate Overview

• Founded December 2002
• Novel, proprietary oral drug delivery technology
  for musculoskeletal disease
• Phase I/IIa clinical trial for oral calcitonin-
  Capsitonin?- completed
• Phase I clinical study for oral parathyroid
  hormone- Perthoxal? completed
• Listed Public August 2004
• Ticker (ASXBNE) (ADRBMEDY.PK)
• Office Bentley, WA, Australia 6102
• Shares Outstanding 64,291,032 (Ordinary)
  9,999,204 (Preferred C)
• Market Cap (13-2-06) AU19.3 million (US15.2
  million)
• Over AU5.1MM spent to date developing two core
  compounds
• Approximately AU1.4 million cash on-hand

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Investment Highlights

• Capsitonin? Phase I/IIa clinical trial for
  osteoporosis completed
• Capsitonin? Pre-IND meeting held with FDA in
  December 2005
• Rapid regulatory process / strategy for
  Capsitonin?- bioequivalence 505(b)(2) NDA
  submission
• Perthoxal?- oral parathyroid hormone for
  osteoporosis Phase I clinical study completed
• New, unique oral formulation technology with
  robust IP and long patent life
• Multi-billion dollar market opportunity(s) for
  both Capsitonin? and Perthoxal?
• Balanced portfolio between lower-risk drug
  delivery programs and potential breakthrough
  future treatments
• Experienced management with experience in
  science, management and capital markets

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Market Opportunity

• Osteoporosis
• Approximately 200 million women worldwide
• Incidence is expected to double in the next 50
  years
• Estimated US48.0 million spent to treat disease
  in North America and in Europe
• Osteoarthritis
• Over 20 million people in the U.S. alone
• Most common form of arthritis, approximately
  5-10 of population will develop
• Treatments
• Calcitonin (sCT) US600 million
• Injectable and Nasal forms only (no oral form
  available)
• Parathyroid Hormone (PTH) US450 million
• Injectable form only (no oral from available)

Sources International Osteoporosis Foundation,
CDC, Mayo Clinic, NIAMS, National Center for
Chronic Disease Prevention and Health Promotion
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Market Need

• Osteoporosis
• Painful and debilitating
• Worldwide cost burden to reach US131.5 billion
  by 2050
• Only 1 in 2 vertebral fractures diagnosed by a
  physician
• Less than 20 of Osteoporosis patients receive
  timely treatment
• Osteoarthritis (and rheumatoid arthritis)
• Painful, physically and emotionally debilitating
• 25 of persons cannot perform major daily
  activities (e.g., lifting, climbing stairs)

There are no oral formulations available for
calcitonin or parathyroid hormone limiting the
number of treated patients
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Product Pipeline
RD
Pre-clinical
Phase I
Phase II
Phase III
NDA
Products / Compounds
Capsitonin? (oral sCT) Therapeutic peptide 1
Osteoporosis, 2Osteoarthritis
Perthoxal? (oral PTH) Therapeutic
peptide Osteoporosis
BN007 (collagen tolerance) Oral Immune
therapy Rheumatoid Arthritis
BN006 (TNF down-regulator) BN008 (Osteoclast
down-reg) BN005 (Osteoblast up-reg)
Novel therapeutic entities Rheumatoid Arthritis,
Osteoarthritis
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Lead Compound
Calcitonin has been used Safely as a
treatment for osteoporosis for over 30 years!

• Mechanism of Action
• Calcitonin aids in the formation of new bone by
  interfering with osteoclast activity.
• Use/Indication
• Osteoporosis, Osteoarthritis
• Side Effects
• Mild, some joint ache, headache

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Novel Oral Formulation
New, proprietary oral drug delivery technology

• Recombinant peptides (Capsitonin? and Perthoxal?)
  are protected from gastric degradation
• Released in the upper intestine in an area with
  high peptide absorption
• Utilizes existing approved substances and/or
  excipients
• Opportunity for rapid 505(b)(2) FDA submission

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Capsitonin? Oral Capsule

• Background
• Existing injectable and nasal formulations of
  calcitonin are difficult to administer affecting
  patient compliance and limiting its use as a
  treatment option
• To date, an oral formulation of calcitonin has
  been unable to be developed
• Capsitonin?
• Pre-clinical / Proof-of-concept

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Capsitonin? - Phase I/IIa

• Study Objective
• Phase I/IIa open label safety tolerability and
  preliminary efficacy / activity
• Study Design
• 12 post-menopausal, female volunteers
• Sequential, cross-over design
• Positive control (Miacalcin? Nasal) active
  comparator
• 1250iu Capsitonin?
• 2500iu Capsitonin?
• Measurement of key biomarkers serum calcitonin,
  serum CTX, and blood calcium

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Capsitonin? - Phase I/IIa

• Study Results / Outcomes
• The study showed that Capsitonin? can be
  delivered orally and exert a statistically
  significant biological effect
• Measurement of markers of bone breakdown in the
  blood showed that Capsitonin? reduced bone
  destruction
• Calcitonin (in a small number of patients) was
  measured in blood
• Calcium levels in the blood were also reduced as
  expected
• Safe and well tolerated

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Lead Compound
The bone forming effects of parathyroid hormone
have been known for 70 years!

• Mechanism of Action
• A controlling agent for maintaining normal
  calcium levels in the blood for strong bone
  formation of new bone.
• Use/Indication
• Osteoporosis
• Side Effects
• Some leg cramps, mild headache

CONFIDENTIAL
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Perthoxal? Oral Capsule

• Background
• Existing injectable and nasal formulations of
  parathyroid hormone (PTH) are difficult to
  administer affecting patient compliance and
  limiting its use as a treatment option
• To date, an oral formulation of PTH has been
  unable to be developed
• Perthoxal?
• Pre-clinical / Proof-of-concept

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Perthoxal? - Phase I

• Study Objective
• Phase I open label safety tolerability study
  and preliminary pharmacodynamic effects
• Study Design
• 18 post-menopausal, female volunteers
• Sequential, cross-over design (12 of 18 patients
  only) of two different formulations of Perthoxal?
• Positive control (s.c. injected PTH) active
  comparator
• Formulation (1) 450ug Perthoxal?
• Formulation (2) 400ug Perthoxal?
• Measurement of key biomarker serum calcium
  concentration

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Perthoxal? - Phase I

• Study Results / Outcomes
• The study showed that Perthoxal? was able to be
  delivered safely and that measurable amounts of
  calcium were able to be detected in serum
• One Perthoxal? formulation showed levels of
  measurable calcium
• Both Perthoxal? formulations were shown to be
  safe and well tolerated

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Competition

• Calcitonin
• Nasal Spray (commercially available)
• Miacalcin Nasal (Novartis), Fortical? Nasal
  (Unigene Laboratories), Calcitonin-Salmon Nasal
  Spray (Nastech)
• Injectable (commercially available)
• Forcaltonin (Unigene Laboratories)
• Oral
• Emisphere Technologies (w/Novartis), Unigene
  Laboratories

Nasal Spray
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Competition

• Parathyroid Hormone
• Injectable (commercially available)
• Forteo? (Lilly)
• Nasal Spray
• Nastech Pharmaceuticals
• Oral
• Zelos Therapeutics, Emisphere Technologies
  (w/Novartis), Unigene Laboratories (w/GSK)

Injectable pen device
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Intellectual Property

• Bone Medical has been granted exclusive worldwide
  rights to oral drug delivery technology in the
  field of musculoskeletal disease under three
  patent pending applications for each product
• the use of aromatic alcohols to enhance the
  uptake of peptides across the small intestine
• pharmaceutical compositions containing certain
  proportions of aromatic alcohols and
• methods of solubilisation.

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Key Management
Corporate SecretaryGabriel Chiappini
Board of Directors
Capitalization, governance, BD Innovate Oncology,
Evolve Oncology,
RD, formulation, development Proxima
RD, development, regulatory Covance, Parke-Davis
Operations, commercialization, BD,
development Mitos Pharmaceuticals, Pfizer, Roche
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Business Strategy

• Minimal infrastructure cost and savings
• Corporate / management focus

• Rapidity to market and market up-take
• Minimize infrastructure build capital needs

• Broaden drug pipeline and product offerings
• Increase revenues and corporate growth

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Value Proposition

• Two products in clinical trials
• Capsitonin? - Oral calcitonin for osteoporosis
  and osteoarthritis
• Perthoxal? - Oral parathyroid hormone for
  osteoporosis
• Rapid regulatory process potential
  bioequivalence and/or 505(b)(2) FDA
  submissions
• Multi-billion dollar market opportunity(s)
• New, unique oral formulation technology with
  robust IP and long patent life
• Balanced portfolio between lower-risk drug
  delivery programs and potential breakthrough
  future treatments
• Experienced management

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Contact

• Paul Hopper
• Executive Chairman
• Tel [phone] (San Diego, CA)
• Hopper_at_bone-ltd.com
• Patrick J. Mallon
• VP Commercial Operations
• Tel [phone] (San Diego, CA)
• pmallon_at_bone-ltd.com

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Contact

• Leon Ivory
• Director
• Tel [phone] (Western Australia)
• leonivory_at_bone-ltd.com
• Ed Daquino
• Chief Financial Officer
• Tel [phone] (Western Australia)
• eddaquino_at_bone-ltd.com

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