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from RBS...

ChemGenex (CXS) has two key milestones approaching. Firstly, we are expecting the
US FDA to provide CXS with a priority review date next week. Secondly, we are
expecting a partnering deal (ex-US) to be signed before Christmas. Buy CSX today in
anticipation of the FDA granting priority review over the weekend and trade the stock
as the two key milestones are achieved.

Table 1 : Milestones to focus on
Estimated date Milestone Impact
Achieved Complete submission of rolling NDA for Omapro to the FDA Positive
November 2009 FDA decision on whether Omapro is eligible for Priority Review Positive
End CY09 Complete non-US partnering discussions concerning Omapro Major positive
4QCY09 Initiate European regulatory filing for Omapro Positive
2QCY10 Anticipated approval and commercial launch of Omapro in the US Major positive
3QCY10 Anticipated approval and commercial launch of Omapro in EU Major positive

The biotech sector has matured significantly
Life science stocks have long been considered speculative. While still high risk, we believe
the sector has matured significantly over the last three years, with a number of companies
reporting late stage clinical trial results, applying for product approvals or being acquired. To
this end, we closely monitor approaching milestones of a number of the life science
companies, with the goal of clearly highlighting potential value inflection points. Cancer
company ChemGenex (CXS), has two key near-term milestones, which if achieved will be
significant for the company and may lead to a rerating of its shareprice. We always
acknowledge the higher risk nature of these companies and encourage investors to take
profits once milestones are achieved.
Receipt of priority review would be positive, as it sets out a schedule for approval
CXS’ lead drug, Omapro, is under development to treat a type of leukaemia. In early
September 2009, CXS announced submission of its New Drug Application (NDA) to the US
FDA for Omapro. As part of this CXS applied to the FDA for Priority Review. For products
believed to address unmet needs (like Omapro), the receipt of Priority Review can shorten
the average amount of time from application to a decision by the FDA on whether to approve
the drug for sale, from 10 months to 6 months, accelerating market launch and ultimately
revenues. We expect CXS to receive notification on whether or not it is eligible for priority
review in early November (our estimate is 8 November US time - which is this weekend). If
priority review is received, we expect the FDA to make a decision on whether to approve
Omapro for sale in early March; a company making event. If priority review is not received in
November this would be negative for sentiment, although it is unlikely to have a material
impact on the company’s long term ambitions.
European partner due to be announced by year-end
The next milestone we are focused on is a partnering deal for Omapro in Europe, which is
expected before the end of CY09. If achieved, this will be a major positive for CXS and will
reduce the need for additional capital to be raised to fund the US launch in CY10. Buy CXS
today in anticipation of the FDA granting priority review over the weekend and take some
profits as the two key milestones are achieved.