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VCM Technology Backgrounder 4TH QUARTER 2013 Scientific discovery and innovation are the inspiration on which Acucela was founded. The Company is developing potential approaches for the treatment and management of sight-threatening diseases for which we believe current therapies are inadequate. Visual Cycle Modulation (VCM) Technology The visual cycle is the biological conversion of light into an electrical signal in the retina (back of the eye) which is perceived by the brain as vision. During exposure to bright light, the visual cycle is extremely active and may produce toxic by-products that cannot be eliminated. Over time, accumulation of these toxic by-products can compromise function of the visual cycle and damage the retina. Visual cycle modulation is designed to slow the visual cycle and potentially reduce the accumulation of toxic by-products and the extent of oxidative damage to the retina. The Company’s VCM-based product candidate, emixustat hydrochloride, has demonstrated dose-dependent modulation of the visual cycle, is non-retinoid and has a generally favorable systemic safety profile in early clinical trials. Trials are ongoing, and no Acucela products are approved for sale. In addition, Acucela intends to develop its product candidates for additional ophthalmic indications such as diabetic retinopathy/diabetic macular edema, Stargardt disease, retinopathy of prematurity and retinitis pigmentosa. However, there are no clinical studies currently underway for these indications. Age-related Macular Degeneration (AMD) The Disease Age-related macular degeneration (AMD) is an ocular disease which compromises the retina and can result in vision loss, even blindness. The disease exists in two forms, dry (non-exudative) and wet (exudative). The dry form is characterized by the presence of lesions in the back of the eye which can spread over time. The most advanced stage of dry AMD is known as geographic atrophy (GA). Patients with GA can experience a gradual loss of fine central vision that is needed to see objects clearly and to perform common daily tasks, such as reading and driving. The wet form is characterized by the presence of leaky blood vessels in the back of the eye which deposit fluid and blood beneath the retina and is associated with a rapid loss of vision. Advanced AMD (GA and wet AMD) is the leading cause of vision loss and blindness among persons age 50 years and older in the United States. VCM Technology Backgrounder Age-related Macular Degeneration (continued) 4TH QUARTER 2013 Dry AMD is the most common form of AMD, representing approximately 90% of all cases. Approximately 15% of those who suffer from AMD develop intermediate or advanced dry AMD. The risk of developing advanced dry (GA) or wet AMD increases with age. Wet AMD is an advanced According to MarketScope, an independent research firm, the number of people affected by AMD in the United States and worldwide was 11 million and 127 million, respectively, in 2012 and these numbers are expected to be 13 million and 146 million, respectively, in 2017. but less common form of AMD, representing approximately 10% of all cases. The Progress Emixustat Hydrochloride: Drug Development Path The Science Emixustat hydrochloride, Acucela’s VCM investigational product candidate, has been shown in pre-clinical models to specifically target and modulate an enzyme known as RPE65 and reduce the accumulation of toxic by-products in the back of the eye. Acucela believes that the visual cycle could be a target for pharmacologic intervention to potentially slow or halt the progression of various retinal diseases, including AMD, and is evaluating emixustat hydrochloride in clinical trials. 2012 Clinical development Phase 2b/3 trial commences 179 total subjects exposed to emixustat 1 phase 2a trial completed (GA subjects) 5 phase 1 trials completed 2009 First human trial 2008 Non-clinical development 2007 IND Toxicology Proof-of-concept in pre-clinical model 2005 Medical chemistry Emixustat Hydrochloride: Directed at Upstream Therpeutic Target Emixustat hydrocloride is being analyzed to determine whether it intervenes at an early stage to slow lesion progression and preserve the health of retinal tissue. Aging, Oxidative Stress, Light Damage, Genetic Factors (Drusen, RPE de/hyperpigmention, lipofuscin and A2E) RPE Dysfunction Early A Phase 2b/3 clinical trial of emixustat hydrochloride in subjects with GA associated with dry age-related macular degeneration was initiated in early 2013. Clinical data available to date for emixustat hydrochloride demonstrate a generally favorable safety profile. Emixustat hydrochloride has been generally well tolerated in all five completed Phase 1 clinical studies and a Phase 2a proof-of-concept clinical study. 2013 Chronic Inflammation Damage/Death of BPE Cells Inter. Acucela’s emixustat hydrochloride is an investigational VCM product candidate currently in clinical development for the potential treatment of geographic atrophy (GA) associated with dry AMD. Late Photoreceptor Cell Death Geographic Atrophy Choroidal Neovascularization (CNV) Contacts US Headquarters 1301 Second Ave., Suite 1900 Seattle, WA 98101-3805 Phone: 206.805.8300 Fax: 206.805.8301 www.acucela.com Japan Office Level 18 Yebisu Garden Place Tower 4-20-3 Ebisu Shibuya-ku Tokyo 150-6018 Phone: +81.3.5789.5872 Fax: +81.3.5789.5874 www.acucela.jp Business Development Inquiries Keiko Mitsunobu Executive Director Alliance Management and Business Development [email protected] Media Inquiries Francesca Nolan Director Corporate Communications [email protected]