SKIN BIOLOGY A VALUABLE TOOL FOR THE INNOVATION AND DEVELOPMENT OF NOVEL THERAPEUTIC ALTERNATIVES IN DERMATOLOGY

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1 SKIN BIOLOGY A VALUABLE TOOL FOR THE INNOVATION AND DEVELOPMENT OF NOVEL THERAPEUTIC ALTERNATIVES IN DERMATOLOGY

2 COMPANY BACKGROUND Specializes in liquid and semi-solid topical products Rx, OTC & Therapeutic Skincare Founded in 1983 Located in metro Charlotte area 250 employees FDA, EMA and EPA inspected Privately held and profitable subsidiary of Product Quest Significantly expanded capabilities and facilities

3 OUR PEOPLE Five Teams o Pharmaceutical Development o Skin Biology o Analytical Development o Project Management o Regulatory Affairs 29 Employees o 6 PhDs o 3 Masters

4 NC Research Campus David H. Murdock Core Laboratory OUR HOME

5 OUR SERVICES Custom Formulation & Development Diverse Topical Formulation Experience Aesthetics Skin Biology Q1/Q2 or de Novo Capability In-house Analytical Development Stability Indicating Method Development Validation per Compendial, 21 CFR 211, and ICH Guidelines AET/PET Photostability Method Transfer Regulatory Compliance Regulatory Filing Strategy Submission Requirements FDA Filing Capable Lifecycle Maintenance Label Review Technical Services Scale Up Design of Experiments Technical Transfer API Expertise Packaging Development Intellectual Property Development Antimicrobial Assay

6 SKIN BIOLOGY CAPABILITY Early Safety Screening Skin Irritation Skin Sensitization Ocular Irritation Phototoxicity Drug Delivery & Early DMPK Skin Penetration (Distribution & Flux) In Vitro Release Testing (IVRT) Skin Protein Binding Early DMPK PK/PD modeling Drug Activity/Target Engagement Models Retinoid Activity Anti-Oxidant UV Protection Skin Pigmentation/Lightening Ex Vivo Tissue Culture Reconstructed/3D Human Skin Genetically-Modified Human Skin Histology Skin Morphology (H&E Staining) ImmunoHistoChemistry (IHC) Laser Capture Microdissection Confocal Microscopy

7 OUR EQUIPMENT Franz Cells Pros Easy set-up & low cost Most widely used Cons Static System sink conditions Manual sampling PermeGear, Inc In-Line (flow through) PermeGear, Inc Pros Flow-through less sink issues Automated sample collection Cons More difficult to set-up Possible static layer Large skin waste Laborious sample processing Pros Optimized fluid dynamics Smaller skin sections 96 well throughput collection Cons New technology/least data available

8 OUR EQUIPMENT Plate washer & Multi-Reader MagPix Evos Microscope Waters G2-XS QToF QuantStudio 12K qpcr Zeiss Axio Imager II Microscope

9 IN VITRO & EX VIVO SKIN MODELS Reconstructed Human Epidermis Full Thickness Living Skin Equivalent Ex Vivo Human Skin Culture Early Safety Screening Drug Delivery Drug Activity/Target Engagement

10 Drugs screening Toxicity POTENTIAL APPLICATIONS Sunscreens Anti-aging Cosmetics In vitro In vivo Skin Disease Models Sebum Production Wound healing Carcinogenesis Pigmentation Hair Regeneration Gene therapy

11 CHALLENGES IN DERMAL DRUG DEVELOPMENT Clinical Efficacy Delivery Bioavailability Dose/ Dosing Regimen Safety/Irritancy

12 STRATEGY TO DE-RISK FORMULATION

13 SKIN PENETRATION - Rate of API penetration - Skin distribution (epidermis, dermis..) - Permeation/Skin Flux - Use of ex-vivo human skin Collection of receiving fluid at various times Epidermis and dermis extracts Analysis by Mass Spectrometer Automated inline diffusion system Tissue homogenizer - Skin penetration - Skin distribution

14 DERMAL IRRITATION Two types of validated assay: Modified Epiderm Skin Irritation Testing (SIT) Irritant or Non-Irritant Epiderm Skin Model Expected In Vivo Irritancy Suitable for topical dosing of products Human-derived Increased throughput Consistent with 3 Rs principle Regulatory acceptance (chemicals, cosmetic ingredients) OECD TG 431/439 (US) Chapters B.40/B.46 (EU)

15 TARGET ENGAGEMENT 24 hr topical pretreatment 24 hr Stimulation RNA Isolation + qpcr +

16 CASE STUDY #2: NEW TECHNOLOGY VALIDATION The Company The Technology Stability Clinical Study

17 RETINOID ACTIVITY ASSAY Assay Protocol - Place RHE cultures in 60 mm petri dishes containing 3.0 ml growth media. - Apply 6 ul of test articles to triplicate cultures - Incubate at 37 C for 72hrs - At the end of the incubation period, collect growth media and store at -20 C. - For the tissues, cut in half ½ in 10% NBF for histology ½ in 1.5 ml placed at -20 C - RNA isolation using Qiagen kit - Gene expression by qrt-pcr (K10, K19, filaggrin)

18 RETINOIDS ACTIVITY Retinoid activity is defined by a downregulation of the biomarkers K10 and Filaggrin, and an upregulation of K19 when compared to untreated/placebo/vehicle control

19 OUR VALUE PROPOSITION Critical Intellectual Mass Resourcefulness, Dexterity, and Expertise = Results Best in Class Facilities and Equipment Ability to apply advanced techniques to quickly solve problems and move projects forward. Advanced Skin Biology Capability De-risks development programs through drug safety, drug target engagement, and drug delivery models. Important tool for technology assessment. Purposeful, Meaningful Work Minimize wasted motion by Identifying critical project goals to obtain the intended result. Vertical Integration Providing a true from concept to launch capability by partnering with our commercial manufacturing facility.

20 150 North Research Campus Drive Suite 3700 Kannapolis, NC 28081