Signal Genetics and miRagen Therapeutics Investor Conference Call

Signal Genetics and miRagen Therapeutics

Investor Conference Call

Signal Genetics and miRagen Therapeutics Investor Conference Call, November 1, 2016

CORPORATE PARTICIPANTS

Samuel D. Riccitelli, President and Chief Executive Officer, Signal Genetics

William S. Marshall, Chief Executive Officer, miRagen Therapeutics

CONFERENCE CALL PARTICIPANTS

Edward A. Tenthoff, Piper Jaffray

Good morning. My name is Lauren and I ll be your conference Operator today. At this time, I would like to welcome everyone to the Signal

Genetics and miRagen Therapeutics Investor Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to David Burke from The Ruth Group. Sir, you may begin your conference.

Good morning. It s a pleasure to

host this conference call alongside the Executives of Signal Genetics and miRagen Therapeutics to discuss the proposed merger of these companies. Joining me for today s call are Signal Genetics President and Chief Executive Officer,

Sam Riccitelli; Signal s Chief Financial Officer, Tamara Seymour; miRagen s Chief Executive Officer, Bill Marshall; miRagen s Chief Financial Officer, Jason Leverone; and miRagen s Chief Business Officer, Adam Levy.

Following the prepared remarks, we will open up the call for your questions. I d like to remind everyone that this call is being recorded and will

be available for web and telephone replay for 10 days. Please refer to the joint press release issued last night, Monday, October 31, or Signal s website, for the replay information.

First, I would like to take a moment to indicate where Signal stockholders may obtain more information regarding the proposed transaction, as well as cover

Signal s Safe Harbor cautionary statement. In connection with the proposed merger, Signal and miRagen intend to file relevant materials with the Securities and Exchange Commission. Investors and security holders of Signal and miRagen are urged

to read these materials when they become available, because they will contain important information about Signal, miRagen and the proposed merger. These materials and any other documents filed by Signal with the SEC may be obtained for free of

charge at the SEC website, www.sec.com. In addition,

ViaVid has made considerable efforts to

provide an accurate transcription. There may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.

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Signal Genetics and miRagen Therapeutics Investor Conference Call, November 1, 2016

investors and security holders may obtain free copies of the documents filed with the

SEC by Signal by directing a written request to Signal Genetics, Inc., at 5740 Fleet Street, Carlsbad, California, 92008, Attention: Investor Relations. Investors and security holders are urged to read these materials before making any voting

or investment decision with respect to the proposed merger.

During this call we will discuss some factors and matters regarding the proposed merger

between Signal and miRagen and regarding their respective businesses going forward. Any matters discussed today that are not historical facts constitute forward-looking statements. Such statements include, but are not limited to, statements

regarding the proposed merger between Signal and miRagen and the potential for stockholder approval, the expectations regarding the potential equity investment, capitalization, resources and ownership structure of the combined organization,

Signal s continued NASDAQ listing, and the safety, efficacy and projected development and regulatory timelines and commercial potential of any product candidates. These forward-looking statements are subject to risks and uncertainties which

could cause actual results or events to differ materially from those suggested by any forward-looking statements. These risks and uncertainties include, among other factors, the ability of Signal and miRagen to receive the necessary stockholder

approval for the proposed merger; the ability of the combined Company to maintain its NASDAQ listing; and the timing and nature of the planned equity investment by the investor syndicate in connection with the proposed merger. Additional risk

factors may be found in Signal s filings with the SEC. As a result of these risks and uncertainties, you should not place undue reliance on any forward-looking statements. We encourage all listeners to review Signal s SEC filings for a

more complete description of these risks and uncertainties, including Signal s recently filed Form 10-Q. Signal undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after this

With those disclosures out of the way, I would like to turn the call over to Sam Riccitelli, Signal s President and Chief Executive Officer.

Samuel D. Riccitelli:

David. Good morning, everyone. Thank you for joining us to review Signal s proposed merger with miRagen. First, I would like to recap the announcement we issued last night, provide some additional insights into our strategic

decision, and then invite Bill Marshal, CEO of miRagen, to introduce miRagen and describe their strategic vision.

After a thorough review of several

strategic alternatives dating back to earlier this year, Signal s Executive Team and our Board of Directors unanimously believe this transaction provides our Stockholders with an attractive opportunity for both short-term and long-term value

appreciation. With our strategic advisors, the Signal Board and Management Team pursued a variety of alternatives to maximize Stockholder value, including a potential merger, a sale of some or all of the Company s assets, or the potential

liquidation of the Company. Ultimately, Signal s Management and Board determined that our proposed merger with miRagen will be in the best interests of our Stockholders, and our Board has unanimously recommended that Signal s Stockholders

approve the proposed merger.

We believe Signal s investors and the investment community at large will come to see the potential of miRagen s

product-focused platform, developing microRNA therapies for unmet medical needs. We also believe the proposed merger provides Signal Stockholders with an attractive opportunity for long-term value appreciation, based on a portfolio of product

candidates. The merger will result in a clinical stage Company with a diversified portfolio including two programs in Phase 1 clinical trials.

also announced yesterday that we have entered into a non-binding letter of intent with a large global diagnostic laboratory for the sale of intellectual property assets related to Signal s MyPRS test. If the MyPRS transaction is consummated,

the net proceeds to Signal are currently expected to be approximately equal to the anticipated costs of operating the MyPRS business through the projected date of

ViaVid has made considerable efforts to

provide an accurate transcription. There may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.

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Signal Genetics and miRagen Therapeutics Investor Conference Call, November 1, 2016

closing, thus resulting, from a cash perspective, in an outcome similar to an immediate

cessation of the MyPRS business. Completion of this transaction will be subject to the negotiation of a definitive asset purchase agreement, satisfaction of closing conditions, and approval by Signal s Stockholders.

As stated in our press release, at the closing of this merger, the Directors and the Executive Officers of Signal will resign from their positions, and the

combined Company will be under the leadership of Bill Marshall and miRagen s current Management Team. The Board of Directors of our combined Company is expected to consist of eight members, all of whom will be designated by

miRagen. Upon closing of this transaction, which is expected to take place during the first quarter of 2017, security-holders of miRagen, including investors in the financing, are currently estimated to become holders of approximately 96% of

Signal s outstanding common stock on a fully-diluted basis.

Signal s common stock currently trades on the NASDAQ Capital Market. At

closing, Signal will be renamed Miragen Therapeutics, Inc., and apply for listing on the NASDAQ Global Market under a new trading symbol.

with the closing of the merger, an investor syndicate including miRagen s existing investors and new investors have committed to invest approximately $40.7 million of new equity in the combined Company.

On a pro forma and fully diluted basis for the combined company, following the closing of the proposed merger, (a) current Signal Stockholders are expected to

own approximately 4%; (b) current miRagen stockholders are expected to own approximately 69%, excluding shares issued to them in the concurrent financing; and (c) the investors participating in the concurrent financing are expected to own

approximately 27%, excluding shares previously held by them.

This transaction has been unanimously approved by the Boards of Directors of both Companies,

and, importantly, more than a majority of miRagen Stockholders have agreed to vote in favor of the transaction. The Holders of a majority of the outstanding shares of Signal must approve the transaction at a special meeting of Stockholders,

which we expect to occur in the first quarter of 2017. All Holders of Signal stock on the record date will be entitled to vote on the merger. The record date has not yet been set, but will be set in advance of the mailing of a proxy

statement to Signal s Stockholders, which will take place once our merger-related SEC filings have cleared the SEC s review.

Board of Directors has approved a 1-for-15 reverse stock split of our common stock which will become effective immediately following the close of trading on November 4, 2016. Signal s shares of common stock will begin trading on a

split-adjusted basis on November 7, 2016, on the NASDAQ Capital Market. The reverse stock split is intended to enable our stock to regain compliance with NASDAQ s minimum bid price listing standard.

I ll now turn the call over to Bill Marshall, Chief Executive Officer of miRagen, and we will leave time for a Q&A session at the end of this

William S. Marshall:

Right. Thank you for the introduction, Sam, and good morning. We welcome this chance to introduce miRagen to the Stockholders of Signal. I want

to thank Sam, the entire Signal team, and the Board for their professionalism and collaborative approach as we have worked through this process. We share their enthusiasm for this merger and the potential it has to create value for our combined

Thank you for the opportunity to tell investors about miRagen Therapeutics. miRagen is a clinical-stage biopharmaceutical

Company focused on the discovery and development of innovative microRNA

ViaVid has made considerable efforts to

provide an accurate transcription. There may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.

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Signal Genetics and miRagen Therapeutics Investor Conference Call, November 1, 2016

targeting therapies in disease areas of high unmet medical need. MicroRNAs are

short RNA molecules that regulate gene expression and whose dysregulation has been implicated in many disease states.

Since our inception, our operations

have focused on developing core competencies in nucleic acid-targeting therapeutics and analysis of systems biology. Our translational medicine strategy is to progress rapidly to first in human studies, once we have established pharmacokinetics

/ pharmacodynamics and shown that the drug candidate is safe in preclinical studies. The initial indication is typically a genetically defined or rare disease where dysregulation of a microRNA has been implicated. At the same time, the

microRNA imbalance has been implicated in other disease areas that will allow for an eventual expansion of the potential use of the drug in other indications.

We believe that the skills we have developed have positioned the Company to discover and develop potential drug candidates that may be beneficial in a variety

of diseases. To that end, we have advanced two candidates into clinical trials intended to evaluate for safety and tolerability while at the same time exploring molecular changes that could create a plausible link to clinical benefit in early

MRG106 is our lead anti-cancer product candidate and an inhibitor of microRNA-155. It is currently in a Phase One multiple ascending

dose study in patients with mycosis fungoides, which is the most common form of cutaneous T-cell lymphoma. This is a rare disease where we believe elevation of microRNA-155 is common and contributes to the disease. While our primary

objectives are to evaluate for safety and tolerability, the trial includes many exploratory endpoints based on biomarker and clinical evaluation that may allow us to better understand the potential of the drug to provide clinical benefit to the

patients. miR-155 overexpression has been observed in other lymphomas, leukemia and solid tumors that may provide additional indications for the drug candidate.

MRG201 is our lead anti-fibrosis drug candidate and a synthetic microRNA mimic or promiR to microRNA-29, that is currently being evaluated in healthy

volunteers in which fibrosis has been induced. Again, while the clinical trial s primary endpoints are safety and tolerability, we have designed the trial to measure a host of exploratory, biomarker-driven endpoints that help to validate

the drug candidate s mechanism of action in man. MRG201 is a synthetic analog of microRNA 29, whose expression is abnormally low in a number of pathologic fibrotic conditions, including cutaneous, pulmonary, hepatic, retinal, cardiac, and

In addition to our clinical programs, we are developing a pipeline of pre-clinical candidates. This includes the assets which are

the subject of the strategic collaboration and licensing agreement with Servier that focuses in cardiovascular disease.

In addition to our clinical stage

assets and the preclinical pipeline, we believe that the financial position of the combined Company represents another important asset to potentially bring long-term value to Stockholders. In connection with the closing of the merger, we have

commitments for approximately $40.7 million from an investor syndicate that includes existing and new investors.