A Letter to Our Shareholders

This is an important moment in cancer immunotherapy and we believe OncoSec is poised to make a real impact. During this pivotal time, it is important that we outline the core fundamentals of our company and our technology, so that you as shareholders will understand why all of us here at OncoSec are excited for the future.

So far, 2014 has been a year of unprecedented growth for the company. As we continue to advance our technology and expand our team, our goal is for all of our shareholders to know our company as we know our company, and thus share our same confidence and excitement moving forward.

A Revolutionary Platform

When we began our journey just three years ago, we knew that intratumoral electroporation had the potential to be a revolutionary drug delivery platform. Our original goal was to demonstrate that this technology could be used to deliver potent immune-stimulating proteins, such as DNA-based interleukin-12 (IL-12), in a safe and effective manner. We set out to develop ImmunoPulse as a monotherapy, and soon realized that we had something potentially bigger on our hands. ImmunoPulse has broad applications and robust potential. Clinical results have been extremely encouraging, and we now have the foundation to expand and adapt this technology to address a wide variety of diseases, as both a monotherapy and as a synergistic component of combination-based approaches.

Near-final data from our Phase 2 metastatic melanoma study were recently presented at the 2014 ASCO Annual Meeting, a significant milestone for the company. Results demonstrated that, of evaluable patients, 11 percent (3/28) achieved complete response, 32 percent (9/28) achieved an objective response and 59 percent (13/22) displayed the induction of a systemic anti-tumor immune response. Correlative data were also presented for a subset of eight patients that supported the hypothesis that IL-12 electroporation leads to the induction of interferon-gamma and downstream interferon-gamma-inducible genes, including key modulators of antigen presentation and processing machinery and chemokines.

Our Chief Medical Officer, Dr. Robert Pierce, M.D., said of the data, “Taken together, these data—the systemic clinical responses, the gene expression pattern in the treated lesions in patients and our analysis of treated and untreated tumors in B16 mouse model—form a coherent picture of IL-12’s mechanism of action as a potent enhancer of tumor immunogenicity. In summary, intratumoral IL-12 appears to ‘de-cloak’ the tumor, allowing the immune system to see the tumor as ‘foreign’ and generate the CD8 T cells needed to mount an attack. These findings are incredibly important given the emerging understanding that a prerequisite for response to T cell checkpoint therapies such as anti-PD-1 mAbs is the presence of the PD-1+ CD8 T cells.”

ImmunoPulse: A Team Player

The next step in our clinical development strategy for melanoma is to initiate a Phase 2b trial that combines ImmunoPulse and a checkpoint inhibitor, such as the anti-PD-1 or PD-L1 antibody. The pairing of these two therapies represents a “natural” combination from both a scientific rationale and business development perspective. First, there is a well-defined correlation between specific patient biomarkers and the effectiveness of anti-PD-1 therapy. Knowledge of this correlation and the distinction between responders and non-responders exists because of the work done by researchers like Dr. Robert Pierce, M.D., who prior to joining OncoSec served as a key member of Merck’s PD-1 development team, focusing on translational oncology research. As was discussed at ASCO, our technology is demonstrating an ability to enhance these specific biomarkers and convert anti-PD-1 non-responders into responders. We believe this could be game-changing from a clinical perspective, as the majority of late stage melanoma patients (60-80 percent) do not respond to this effective monoclonal antibody treatment, which may soon become standard of care for a variety of cancers. From a business development perspective, expanding the responder population could lead to a significant market opportunity for OncoSec. An important aspect to note is the highly immunogenic nature of melanoma, meaning that the percentage of anti-PD-1 non-responders is likely to be even higher in other types of cancer. As checkpoint inhibitors make their way into the market and expand to other disease indications, the demand for a transformative treatment will be even greater, and will constitute a huge unmet medical need. Therefore, our goal with ImmunoPulse is to close the gap between non-responders and responders, and let the incredible successes of this class of monoclonal antibodies resonate out to many more of those affected by these devastating diseases.

A Robust Pipeline

Up until recently, we have been defined by our use of DNA IL-12 to treat cutaneous cancers. Although our work in this realm has certainly laid a strong foundation for the future, we want to be clear that OncoSec is not confined to DNA IL-12 or skin cancer. Our goal is to be the premier intratumoral immunotherapy company, and we believe that we have the technology, the team and the financial backing to see this goal become a reality. In the past few months, we have significantly ramped up our R&D and pre-clinical capabilities to address the broad applications of our technology. We expanded operations in Seattle and San Diego and tasked these new teams with exploring and investigating new immune targets and novel DNA plasmid constructs. As we continue to define the mechanism of action of our ImmunoPulse treatment platform through clinical and correlative analysis and related research efforts, our engineering department is developing next-generation devices capable of addressing a wide variety of indications.

A Spotlight on the Future

We hope that by gaining a better understanding of our technology and business development strategy, our shareholders can similarly understand that they are part of a company with a robust pipeline, solid infrastructure and a clear path forward. The latest cash raise was the largest financing in company history and involved highly respected institutional biotechnology investors. Proceeds from this offering give OncoSec a strengthened cash runway and the ability to completely fund a Phase 2b program to completion. Additionally, these capital resources will allow us to advance our research and development activities by identifying new target candidates, while continuing to move our DNA IL-12 program forward toward commercialization. Our goal has always been to focus on advancing our technology, product pipeline and people to push our development strategy forward, and I believe that this financing is a major step toward achieving these milestones. I’m thankful for our wonderful team that continues to demonstrate resilience and a determined focus toward achieving our corporate goals. We are not only driven by knowing what is immediately possible, but also by the knowledge that an open-mind can one day help us realize the impossible. With more than 30 full-time employees and – at the time of writing this letter – 12 open positions remaining, we are building a team with the potential to position OncoSec as a leader in intratumoral cancer immunotherapy.

As we continue to execute on our objectives for the year and break new ground in cancer immunotherapy, I want to lend my sincere thanks to all of our shareholders. I also want to thank our patients, who motivate us to work tirelessly in advancing innovative immunotherapies, and without whom we could never hope to succeed. Because of your support, OncoSec is poised to deliver on its promise to fundamentally impact the cancer treatment landscape and bring much-needed relief to patients faced with unmet medical needs. I appreciate your continued support, and look forward to sharing our future success with you.

Thank You.

Punit Dhillon

President & CEO