Paradigm Biopharmaceuticals : Quarterly Update and Appendix 4C - quarterly

ASX RELEASE

31st January 2022

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DECEMBER QUARTERLY ACTIVITIES REPORT

KEY HIGHLIGHTS

• Investigational New Drug (IND) Application: Paradigm reported that the US Food and Drug Administration (FDA) has cleared the Company's Investigational New Drug (IND) application to proceed with Paradigm's phase 3 study, evaluating injectable pentosan polysulfate sodium (PPS/Zilosul®) for the treatment of pain associated with knee osteoarthritis (kOA). This was a major milestone for Paradigm. Pain associated with kOA is a potential blockbuster opportunity and the clearance through the FDA was the culmination of many months of dialogue with the FDA.
• CEO Transition: The Company reported in November, CEO, Paul Rennie, was transitioning from his executive role (Managing Director) to a non-executive role (Chairman). Mr Rennie stated "In the non-executive role, I will be focussed on the strategic direction of the Company and work to enhance the strategic relationships which are so important to our Company. I will continue to manage the strategic relationship with bene pharmaChem and forge new commercial partnerships". Dr Donna Skerrett, CMO, has been appointed interim CEO as the company completes a global search for the new CEO.
• Positive Top-line Results in ARDS Preclinical Study: PPS at the post-acutephase of viral infection (21-dayspost infection) demonstrated a statistically significant reduction in pulmonary collagen compared to vehicle treated groups based on histological staining of collagen. PPS administered subcutaneously at Day 0 at 3mg/kg resulted in a statistically significant reduction in inflammatory cell infiltrates in the lungs at 8 days post infection.
• PARA_OA_008: The Australian Human Research Ethics Committee approved an amendment to the Phase 2 study to evaluate the treatment effect of pentosan polysulfate sodium (PPS) (Zilosul®) compared with placebo on synovial fluid biomarkers in participants with kOA pain. The approval was sought to add a once weekly dosing regimen to the trial design with the remaining 30 subjects to be enrolled using a randomisation scheme which will provide a balanced number of patients to each treatment group according to 1:1:1 ratio by the end of the trial. Once weekly dosing is also being assessed in Paradigm's Phase 3, PARA_OA_002 clinical program. An additional follow-up period to 12-months was also accepted by the ethics committee to assist Paradigm in gathering additional data on the medium-long term combined structure-modifying and symptom-modifying effects of PPS on Knee OA. The recently completed market access research with key physicians and funding bodies (payers) in the US and Europe found that longer follow-up is preferred to support safety and efficacy claims for products that manage the symptoms and potentially attenuate disease progression in OA. With the extension of follow-up out to 12-months in PARA_OA_008, the Company aims to acquire data for mechanism of action and the medium-long term combined structure- modifying in addition to symptom modifying effects of PPS on KOA.
• Global Market Research: Global market research to better understand willingness-to-pay and willingness-to prescribe Zilosul® for osteoarthritis was conducted throughout CY2021 and reported During the December Quarter. Research indicated projected price of US$2-3K

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p.a likely for Zilosul® as a therapy to reduce pain and improve function. The research also reported, with a disease modifying indication, physicians would consider Zilosul® much earlier in the therapeutic algorithm and if approved by the FDA with a disease modifying label, the price per year of therapy in the US could increase to US$6,000 and potentially higher.

• Mucopolysaccharidosis type I (MPS I) Interim Phase 2 Data: Preliminary MPS-Iphase 2 data presented at the 14th International Congress of Inborn Errors of Metabolism in Sydney. PPS was well tolerated with no serious adverse events reported over a 24-weekperiod. Meaningful improvements in pain, function, and activities of daily living and an overall improvement in quality of life was observed in this initial cohort of patients.

Paradigm Biopharmaceuticals Ltd (ASX: PAR) ("Paradigm" or "the Company") is pleased to provide its quarterly update for the three months ended 31st December 2021 to accompany its Appendix 4C cash flow report for the period.

• Cash balance as of 31st December 2021 was $55.03m (on 30th September 2021: $64.8) with a net cash outflow during the quarter of $10.41m.
• Research & development expenditure for the quarter was $8.59m compared to the previous quarter of $6.18m. The research and development expenditure are attributed to, PARA_OA_002 site initiations and commencement of participant dosing, PARA_OA_008 resumption of randomising subjects following updated clinical trial protocols and establishment of second site for the study, continuation of MPS I and MPS VI phase II studies, including activating a second site in Brazil, 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 30 September 2021 were $70k. Fees of $66k were Director fee payments to Non-Executive Directors. The additional $4k payment relates to routine legal services for the clinical programs performed by BioMeltzer, of which Amos Meltzer is a director.

OUTLOOK

• Paradigm expects to complete 100% recruitment in the PARA_OA_008 during 1H 2022. The program is recruiting and treating at two sites across Australia with top-line data expected Q3 CY2022.
• Paradigm will present at the WORLDSymposium in San Diego, California, the annual research conference focused on new therapies for lysosomal storage diseases such as MPS VI. The presentation will be conducted by leading geneticist and principal investigator Dr Roberto Giugliani on Paradigm's phase 2 trial for mucopolysaccharidosis type-VI (MPS VI). The Company during the conference will release a MPS VI patient focus group study. The study is the largest of its kind in the world and has attracted the interest of medical researchers and MPS patient advocacy groups globally.
• Paradigm recently reported the first participant dosing in Australia in the PARA_OA_002 clinical trial. Eight sites have been initiated in Australia and are currently screening subjects. Initiation of sites in the US continues to ramp up with 65 sites identified in the

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US and AUS to participate in the clinical program. The Company expects to report first participant dosing in the US during Q1 CY 2022.

• The Company expects to continue initiation activities for the PARA_OA_002 clinical study sites in the UK and Europe and will update shareholders on key activities as they are achieved.
• The Paradigm Remuneration and Nominations Committee continues its consultation with a global executive search firm and meetings with shortlisted candidates with the identified experience in the global pharma industry. The market will be notified on Identification of the CEO.

• The peer review publication of the company's Phase 2b study (PARA_005) in knee OA is planned to coincide with publication of ongoing PARA_008. Topline data of PARA-005 have been previously announced in company presentations.

• An Expanded Access Program protocol (EAP) in the US for re-treatment of Zilosul® is being designed following discussions with the participants and their physician who have expressed strong interest in a follow-up retreatment program approximately 18 months following their initial treatment.

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]

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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	31 December 2021

Consolidated statement of cash flows	Current quarter	Year to date (6
			$A'000	months)
				$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	26	55
1.2	Payments for
	(a)	research and development	(8,588)	(14,769)
	(b) product manufacturing and operating	-	-
		costs
	(c)	advertising and marketing	(511)	(511)
	(d)	leased assets	(23)	(43)
	(e)	staff costs	(676)	(1,569)
	(f) administration and corporate costs	(659)	(1,225)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	22	34
1.5	Interest and other costs of finance paid	(6)	(14)
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	-	1,314
1.8	Other (provide details if material)
1.9	Net cash from / (used in) operating	(10,415)	(16,728)
	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.

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Appendix 4C

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

Consolidated statement of cash flows	Current quarter	Year to date (6
			$A'000	months)
				$A'000
2.2	Proceeds from disposal of:
	(a)	entities	-	-
	(b)	businesses	-	-
	(c)	property, plant and equipment	-	-
	(d)	investments	-	-
	(e)	intellectual property	-	-
	(f)	other non-current assets	-	-
2.3	Cash flows from loans to other entities	-	-
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material)	-	-
2.6	Net cash from / (used in) investing	-	-
	activities

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3. Cash flows from financing activities

1. Proceeds from issues of equity securities (excluding convertible debt securities)
2. Proceeds from issue of convertible debt securities

3.3 Proceeds from exercise of options

3.4 Transaction costs related to issues of equity securities or convertible debt securities

3.5 Proceeds from borrowings

3.6 Repayment of borrowings (lease liabilities)

3.7 Transaction costs related to loans and borrowings

3.8 Dividends paid

1. Other (Limited recourse loan repaid under ESP)
2. Net cash from / (used in) financing activities

-	-
-	-
-	-
-	-
-	-
(33)	(66)
-	-
-	-
46	79
13	13

4. Net increase / (decrease) in cash and cash equivalents for the period

1. Cash and cash equivalents at beginning of period
2. Net cash from / (used in) operating activities (item 1.9 above)

64,768	71,081
(10,415)	(16,728)

ASX Listing Rules Appendix 4C (17/07/20)	Page 2
+ See chapter 19 of the ASX Listing Rules for defined terms.