Paradigm Biopharmaceuticals : Quarterly Update and Appendix 4C - quarterly

ASX RELEASE

28th July 2022

For personal use only

JUNE QUARTERLY ACTIVITIES REPORT

KEY HIGHLIGHTS

• FDA Fast Track Designation: Paradigm reported in April it had received US FDA Fast Track Designation for its osteoarthritis (OA) clinical program. The FDA Fast Track Designation for pentosan polysulphate sodium (PPS/Zilosul®) offers an expedited pathway for development of Paradigm's osteoarthritis clinical program. The designation has been granted for Paradigm's broad OA program and not specific to OA of the knee. It allows Paradigm the opportunity to interact and collaborate with the FDA more frequently during program development, enabling a stronger overall program in line with the FDA's expectations and provides opportunity for shorter review timelines.
• First UK subject dosed in phase 3 trial: Regulatory and ethics approval was received on 16th March from the Medicines & Healthcare products Regulatory Agency (MHRA) in the UK. The confirmation from the MHRA means that all required approvals are in place to commence clinical trial activities in the UK for the global Phase 3 PARA_OA_002 clinical trial.
• R&D Tax Incentive: The Company reported during the June quarter it had received the R&D tax incentive refund of $8,212,492 as part of Australia's R&D Tax Incentive Scheme.
• 100% Enrolment in Synovial Fluid Biomarker Trial: The phase 2 clinical trial evaluating the treatment effects of Zilosul® against placebo on synovial fluid biomarkers in participants with knee OA pain, completed recruitment (n=60) during the June quarter. Paradigm confirmed its expected timing of top-linedata to be reported to the market during Q3 of CY2022.
• CEO Appointment: Paradigm welcomed experienced US based pharmaceutical executive, Marco Polizzi, as its new CEO. Mr. Polizzi joins Paradigm with over 30 years of experience in the pharmaceutical industry in various commercially focused roles, including the creation of new divisions within branded and generic pharmaceutical businesses. Mr Polizzi commented on his appointment: "With my pharmaceutical experience, I strongly believe that I will be able to make a significant contribution to the Paradigm business in the short and long term. I have had the opportunity to meet the Paradigm Board and key management personnel and I can say that Paradigm's potential to help millions of people, excites me".
• Peer Reviewed Publication: A peer reviewed article titled "Pentosan Polysulfate inhibits
  attachment and infection by SARS-CoV-2 in vitro: Insight into structural requirements for binding" was published in the online journal Thrombosis and Haemostasis in April 2022. The publication is a result of work on the effectiveness of PPS performed by the Ronzoni Institute as part of the bene pharmaChem and Paradigm research collaboration agreement (ASX release 31/03/21). The in vitro study demonstrated that PPS inhibited the uptake of SARS- CoV2 in the established Vero cells that are used as an industry model. Mechanistically, PPS demonstrated binding to the S1 receptor binding domain (RBD) on SARS-CoV2which led to the inhibition of viral uptake and viral propagation by Vero cells. These observations suggest that PPS is a potential novel inhibitor of SARS-CoV2infection and transmission.
  The peer reviewed publication can be viewed at: https://www.thieme-connect.com/products/ejournals/html/10.1055/a-1807-0168

For personal use only

• Intellectual Property: During the quarter, Paradigm received official acceptance of the Australian patent application "Treatment of bone marrow pathologies with polysulfated polysaccharides (Australian application number (2021201198)". The patent acceptance adds strength to Paradigm's portfolio of patents that continues to expand through prosecution of additional patents in multiple jurisdictions.
• BIO International Partnering Conference: Dr Donna Skerrett (Chief Medical Officer) and Dr Michael Imperiale (Global Head of Safety) attended the BIO International partnering conference that was held in June in San Diego. During the conference, Dr Skerrett delivered a presentation on Paradigm's clinical development program and with Dr Imperiale undertook many 1 on 1 meetings with potential partner companies.

Paradigm Biopharmaceuticals Ltd (ASX: PAR) ("Paradigm" or "the Company") is pleased to provide its quarterly update for the three months ended 30th June 2022 to accompany its Appendix 4C cash flow report for the period.

• Cash balance as of 30th June 2022 was $39.72m (on 31st March 2022 was $39.89m) with a net cash outflow during the quarter of $0.28m. The June quarter saw a receipt of R&D tax incentive refund of $8.21m.
• Research & development expenditure for the quarter was $7.5m compared to the previous quarter of $14.03m. The difference in spend on Q3 is related to the milestone payment of US$5m to Paradigm's CRO during the March quarter. Spend during Q4 is associated with PARA_OA_008 complete enrolment of participants in the study and PARA_OA_002 continuing trial activities. The quarter also saw spend related to continuation of MPS I and MPS VI phase 2 studies, as well as continuing activities described in the outlook below.
• In accordance with Listing Rule 4.7C.3 and as noted in item 6 of the Appendix 4C Cashflow Statement, payments to related parties and their associates during the quarter ended 30th June 2022 were fees of $124k, which included Chairman fees and Director fee payments to Non-Executive Directors.

OUTLOOK

Paradigm is pleased to provide an update on achievements and upcoming events for the 2H 2022.

PARA_OA_002 Phase 3 Clinical Trial

• On 6 July, Paradigm reported it had activated the first UK site in the global phase 3 clinical trial. This first site is located at the University of Leeds under lead investigator Prof. Hemant Pandit, with participant screening and enrollment commencing during Q3. Paradigm aims to activate a total of seven sites across the UK for the phase 3 study.
• Regulatory approval from Health Canada for the phase 3 study was also reported in July. Paradigm can also confirm it has since achieved ethics approval from the research ethics board in Canada. The Company may now commence clinical trial site activation in Canada where it plans to activate up to 10 sites. First participant enrolled into the PARA_OA_002 study will be reported once achieved.

For personal use only

• The first formal review by the Data Safety Management Board (DSMB) for stage 1 of the PARA_OA_002 phase 3 trial is expected to occur in Q4 CY2022. Paradigm expects to provide an update on the progress for the phase 3 clinical program following this review.

Synovial Fluid Biomarker Study (PARA_OA_008)

• Paradigm expects to report top-line data in Q3 CY2022 from the phase 2 study exploring change in synovial fluid biomarkers associated with joint destruction in knee OA patients. Data reported will include the change in baseline of synovial fluid biomarkers following treatment once and twice weekly with Zilosul® versus placebo. Clinical endpoints of improvements in WOMAC® pain and function following Zilosul® treatment versus placebo at day 56 will also be reported. The data collected from this phase 2 study will be the first OA clinical trial data reported by Paradigm since the release of the Phase 2B (PARA_OA_005) clinical trial data in 2018. The collective analyses of pain, function, joint structure, and biomarker levels following PPS therapy will provide informative data to assess the potential of PPS as a disease-modifying osteoarthritis drug (DMOAD).

Mucopolysaccharidosis (MPS I and VI)

• The Open-Label MPS I trial includes 1 active subject and 3 completed subjects. PPS is well tolerated in this population with no Serious Adverse Events reported to date. Additionally, to date, there appears to be an overall trend toward meaningful improvements in pain, function, ADLs, and overall improvement in quality of life. Further data will be reported on this study following the final patient completing PPS treatment.
• The Double-Blinded,Multi-Centre, MPS VI trial is actively recruiting. To date, a total of 50% of subjects have been enrolled. Fifty-two weeks of cumulative data across the 3 adult subjects (all data through Week 4 of subject 3) have been assessed as required by the protocol. No significant safety signals were noted. Enrollment has now begun in subjects between 9 and 16 years of age to assess the safety and tolerability of PPS among pediatric populations.

Canine OA Model Evaluating Disease Modification by PPS

• To generate further data establishing the in vivo mechanism of action of PPS in disease modification and provide complementary data in parallel with the PARA_OA_008 human clinical trial, Paradigm is concurrently conducting a trial in dogs with naturally occurring OA at the U-Vet Werribee Animal Hospital. The longer 20-weekfollow-up period (equates to approximately 3 years in a human lifespan) from the cessation of treatment in the study is designed to assess the durability of response and structural changes following therapy. Paradigm intends to have data from the canine OA model available for release to the market along with the interim analysis data from PARA_OA_008 in Q3 CY2022.

NFL Alumni Health Research Partnership

• Paradigm reported on July 13 that it entered into a research partnership with the NFL Alumni Health to inform its members about OA and potential clinical trial participation. Paradigm is working closely with the NFL Alumni Health team and Alumni members to

inform them of the onset and progression of OA and Paradigm's clinical progress through phase 3 as we strive to bring Zilosul® to commercialisation for the millions suffering from the debilitating effects of OA. Updates on the progress of the research partnership are expected throughout the remainder of CY2022.

For personal use only

R&D Tax Incentive

• Paradigm is finalising its application for the FY22 R&D tax incentive for lodgment. The Company expects to receive the R&D tax incentive refund in the coming months.

Investor Webinar

• On the 21st of July, Paradigm conducted an investor webinar with its new CEO, Marco Polizzi, and Dr Donna Skerrett, CMO, who provided a clinical program update for all shareholders. Mr Polizzi, Dr Skerrett and Chairman, Paul Rennie, also answered several investor questions at the conclusion of the presentation. We would like to thank all investors for participating and submitting questions during the webinar.
  The investor webinar is available to view via the link: https://us02web.zoom.us/webinar/register/WN_W_Zh6750RaiC2Oda0t32SQ

About Paradigm Biopharmaceuticals

Paradigm Biopharmaceuticals Ltd (ASX: PAR) is a late-stage drug development company with the mission to develop and commercialise pentosan polysulfate sodium for the treatment of pain associated with musculoskeletal disorders driven by injury, inflammation, ageing, degenerative disease, infection, or genetic predisposition. Paradigm is also exploring proof-of-concept studies for the use of PPS in respiratory and heart failure indications.

Forward Looking Statements

This Company announcement contains forward-looking statements, including statements regarding anticipated commencement dates or completions dates of preclinical or clinical trials, regulatory developments, and regulatory approval. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this presentation. Readers are cautioned not to put undue reliance on forward-looking statements.

Authorised for release by the Paradigm Board of Directors.

FOR FURTHER INFORMATION PLEASE CONTACT:

Simon White

Director of Investor Relations

Tel: [phone]

Paradigm Biopharmaceuticals Ltd

ABN: 94 169 346 963

Level 15, 500 Collins St, Melbourne, VIC, 3000, AUSTRALIA

Email:[e-mail]

For personal use only

Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Paradigm Biopharmaceuticals Limited
ABN	Quarter ended ("current quarter")
94 169 346 963	30 June 2022

Consolidated statement of cash flows	Current quarter	Year to date (12
			$A'000	months)
				$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	13	81
1.2	Payments for
	(a)	research and development	(7,563)	(36,367)
	(b) product manufacturing and operating	-	-
		costs
	(c)	advertising and marketing	(121)	(845)
	(d)	leased assets	(39)	(86)
	(e)	staff costs	(441)	(2,459)
	(f) administration and corporate costs	(337)	(2,074)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	2	48
1.5	Interest and other costs of finance paid	(7)	(29)
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	8,212	9,526
1.8	Other (provide details if material)
1.9	Net cash from / (used in) operating	(281)	(32,205)
	activities
2.	Cash flows from investing activities
2.1	Payments to acquire or for:
	(a)	entities	-	-
	(b)	businesses	-	-
	(c)	property, plant and equipment	-	-
	(d)	investments	-	-
	(e)	intellectual property	-	-
	(f)	other non-current assets	-	-

ASX Listing Rules Appendix 4C (17/07/20)	Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.