Regulus Reports Third Quarter 2013 Financial Results and Recent Highlights

  Regulus Reports Third Quarter 2013 Financial Results and Recent Highlights

- Regulatory Application for RG-101 to be Filed in the Near Term: Clinical
Studies in Man Expected to Commence in Early 2014 -

- 'Road to the Clinic' Strategy On Track: Second microRNA Candidate to be
Nominated for Clinical Development by Year End May Come from miR-21 Fibrosis
Program -

- Significant Progress Demonstrated Across Therapeutic Pipeline: Advanced Key
Programs with Positive Data Presented at Scientific Meetings; New Oncology
Target Selected by AstraZeneca -

- Maintained Strong Financial Position with $123.9M in Cash, Cash Equivalents
and Short-Term Investments for Sale and Continues to Expect to End 2013 with
Approximately $110 Million in Cash, Cash Equivalents and Short-Term
Investments -

PR Newswire

LA JOLLA, Calif., Nov. 13, 2013

LA JOLLA, Calif., Nov. 13, 2013 /PRNewswire/ --Regulus Therapeutics Inc.
(NASDAQ: RGLS), a biopharmaceutical company leading the discovery and
development of innovative medicines targeting microRNAs, today reported
financial results for the quarter ended September 30, 2013 and provided a
summary of recent corporate highlights.

"This was a remarkably productive third quarter and recent period for Regulus
in which we focused on scientific execution and demonstrated significant
progress across our microRNA therapeutic pipeline. Our 'Road to the Clinic'
strategy remains on track and we are working towards filing our first
application with regulatory authorities to commence clinical studies in man of
RG-101, our GalNAc-conjugated anti-miR targeting miR-122, for hepatitis C
virus infection. We believe this program will condition Regulus for future
clinical activities and may provide proof-of-concept, possibly by the end of
next year, for our innovative approach to treating disease with microRNA
therapeutics," said Kleanthis G. Xanthopoulos, Ph.D., President and CEO of
Regulus. "In addition, our strategic alliance partners continue to support
our expertise in discovering and developing new microRNA therapeutics, as
evidenced by the recent selection of a new, pre-clinically validated oncology
target by AstraZeneca. We also continue to focus our proprietary efforts on
oncology and orphan diseases and look forward to identifying attractive new
opportunities to broaden our pipeline. We're very pleased with our progress
and hope to carry our positive momentum into the end of the year and into
2014."

"The significant achievements in the quarter and recent period demonstrate
that our science continues to advance in a meaningful way," said Neil W.
Gibson, Ph.D., Chief Scientific Officer of Regulus. "We are pleased to have
advanced our microRNA therapeutic pipeline by presenting key data at
scientific meetings, preparing to enter the clinic with RG-101 and working
towards the nomination of a second microRNA candidate for clinical
development."

Recent Corporate Highlights

  oPresented Positive Preclinical Data on RG-101, a GalNAc-conjugated
    anti-miR Targeting miR-122 for the Treatment of HCV, in Late-Breaking
    Poster at AASLD Meeting. At the 64^th Annual American Association for the
    Study of Liver Diseases (AASLD) meeting, Regulus presented positive data
    from completed preclinical studies evaluating RG-101 for in vitro and in
    vivo potency, pharmacokinetic/pharmacodynamics, toxicology and safety
    pharmacology and inhibition of HCV replication. Pharmacologic potency of
    RG-101 was significantly enhanced by approximately 20 fold in vivo in both
    mice and non-human primates, relative to the unconjugated oligonucleotide
    of RG-101. RG-101 is rapidly taken up in the liver and metabolized to the
    active oligonucleotide, which has an approximately 14 day tissue
    half-life. In addition to the potency studies, Regulus tested the efficacy
    of RG-101 to reduce HCV viral load titer in a human chimeric liver mouse
    model infected with HCV. Up to a 2 log reduction in HCV viral load titer
    was observed, which is similar to that observed for oral direct-acting
    antivirals as monotherapy in this mouse model. The duration of action
    observed for RG-101 supports the potential for a once-a-month dosing
    regimen. Additionally, RG-101 has demonstrated an excellent preclinical
    safety profile and is well tolerated to date. Regulus expects to file a
    regulatory application for this program in the near term and expects to
    commence clinical studies in man in early 2014.

  oPresented Positive Preclinical Data on microRNA-21 (miR-21) in Alport
    Syndrome at The American Society of Nephrology (ASN) Kidney Week Meeting;
    Program Subject to Exclusive Option Agreement with Sanofi. At the ASN
    Kidney Week 2013 meeting,  Regulus and its strategic alliance partner,
    Sanofi, and its collaborator at the University of Washington, presented
    positive preclinical data in a poster and oral presentations demonstrating
    that miR-21 plays an important role in the disease progression of Alport
    Syndrome in collagen 4A3 deficient mice. According to the National
    Institutes of Health, Alport Syndrome occurs in approximately 1 in 50,000
    newborns. Alport Syndrome is a genetic condition characterized by kidney
    disease, hearing loss, and eye abnormalities. The kidneys become less able
    to function as this condition progresses, resulting in end-stage renal
    disease. These results demonstrate that treatment with an anti-miR-21
    candidate significantly improved renal function, significantly reversed
    regulated genes and pathways associated with renal pathology, and
    increased the lifespan of the mice by 20 percent.

    Regulus and Sanofi entered into an Option Agreement to enable exclusive
    negotiation of a potential new co-development and commercialization
    agreement. Under the terms of the Option Agreement, Regulus has the
    exclusive right to negotiate with Sanofi to enter into a co-development
    and commercialization agreement for certain miR-21 anti-miRs in oncology
    and in Alport Syndrome. Regulus anticipates that the second microRNA
    candidate to be nominated for clinical development by the end of the year
    under its 'Road to the Clinic' strategy may come from the miR-21 fibrosis
    program.

  oAchieved Significant Progress in Strategic Alliance with AstraZeneca; New
    Pre-Clinically Validated microRNA Oncology Target Selected. Under Regulus'
    strategic alliance to discover, develop, and commercialize microRNA
    therapeutics with AstraZeneca, an undisclosed, pre-clinically validated
    oncology target was selected by AstraZeneca. The companies continue to
    collaborate on three exclusive microRNA targets in cardiovascular and
    metabolic diseases and oncology.

Third Quarter 2013 Highlights

  oAdvanced Additional Therapeutic Programs; Proprietary Efforts Focused on
    Oncology and Orphan Diseases. Regulus continued to pursue several
    additional programs, both independently and with its strategic alliance
    partners, targeting miR-21 for oncology indications, targeting miR-221 for
    the treatment of HCC, targeting miR-10b for the treatment of glioblastoma,
    and targeting miR-33 for atherosclerosis. Additionally, Regulus continues
    to advance its proprietary efforts with the identification of several
    attractive microRNA targets, namely for oncology indications and orphan
    diseases.

  oCompleted Successful Public Offering of Common Stock. Regulus completed an
    underwritten public offering of 5,175,000 shares of common stock resulting
    in $45.8 million of aggregate net proceeds, after deducting underwriting
    discounts and commissions and estimated offering expenses payable by
    Regulus. Primarily as a result of the successful offering, Regulus revised
    its prior year-end cash guidance of ending 2013 with at least $60 million
    in cash, cash equivalents and short-term investments to ending 2013 with
    approximately $110 million in cash, cash equivalents and short-term
    investments.

Third Quarter 2013 Financial Results & Highlights

As of September 30, 2013, Regulus had $123.9 million in cash, cash equivalents
and short-term investments, including $45.8 million in net proceeds from a
public offering of 5,175,000 shares of common stock issued at an offering
price of $9.50 per share, which was completed in July 2013. 

Regulus reported a net loss of $2.2 million for the three months ended
September 30, 2013, compared to a net loss of $5.7 million for the same period
in 2012. Basic and diluted net loss per share was $0.05 and $0.07 for the
three months ended September 30, 2013, respectively, compared to basic and
diluted net loss per share of $15.98 for the same period in 2012. The
comparability of net loss per share for the periods presented is significantly
impacted by our initial public offering and concurrent common stock issuances
in October 2012, and our public offering of common stock in July 2013.

Regulus recognized revenue of $6.1 million for the three months ended
September 30, 2013, compared to $2.8 million for the same period in 2012.
Revenue during these periods consisted primarily of amortization of upfront
payments received from our strategic alliances and collaborations, which is
recognized over the estimated period of performance. Revenue in the three
months ended September 30, 2013 included $5.4 million from the Sanofi
collaboration and license agreement and $0.5 million from the AstraZeneca
collaboration and license agreement. On a comparative basis, revenue
increased in the three months ended September 30, 2013 primarily due to the
incremental recognition of $3.6 million from the change in our estimated
period of performance for the research term within the Sanofi collaboration
and license agreement, which originally expired in June 2013, but was
effectively extended through the end of December 2013 under the terms of our
Option Agreement with Sanofi.

Research and development expenses were $7.1 million for the three months ended
September 30, 2013, compared to $5.2 million for the same period in 2012. The
increase was substantially attributable to IND-enabling activities for RG-101
during the quarter. No such costs were incurred in the same period in 2012.
The Company expects our research and development expenses to increase over the
coming quarters to the extent it commences clinical studies and initiates
additional IND-enabling activities.

General and administrative expenses were $1.9 million for the three months
ended September 30, 2013, compared to $1.1 million for the same period in
2012. The increase was primarily attributable to additional headcount and
incremental operating costs associated with being a public company.

Net loss in the three months ended September 30, 2013 included a non-cash gain
of $0.7 million from the change in value of the amended and restated
convertible promissory note originally issued to GlaxoSmithKline plc in 2010,
with such change in value attributable to a decrease in value of the common
stock of the Company during the quarter. Net loss in the three months ended
September 30, 2012 included a non-cash charge of $1.7 million resulting from a
loss on extinguishment of debt associated with the modification of the
convertible promissory note, and a $0.3 million non-cash charge from the
increase in value of the common stock of the Company during the quarter.

Conference Call & Webcast Information

Regulus will host a conference call and webcast at 5:00 p.m. Eastern Standard
Time today to discuss its third quarter 2013 financial results and recent
corporate highlights. A live webcast of the call will be available online at
www.regulusrx.com. To access the call, please dial (877) 257-8599 (domestic)
or (970) 315-0459 (international) and refer to conference ID 93095033. To
access the telephone replay of the call, dial (855) 859-2056 (domestic) or
(404) 537-3406 (international), passcode 93095033. The webcast and telephone
replay will be archived on the company's website following the call.

About the 'Road to the Clinic' Strategy in 2013

Launched in February 2013, the 'Road to the Clinic' Strategy outlines certain
corporate goals that seek to advance our microRNA therapeutic pipeline toward
the clinic this year. Specifically, Regulus set the goal of nominating two
microRNA candidates for clinical development in 2013, be positioned to file
its first applications with regulatory authorities by the first half of 2014
and maintain a strong year-end cash position to support these goals.

Regulus has demonstrated excellent progress on its 'Road to the Clinic'
Strategy. In May, Regulus nominated its first microRNA candidate for clinical
development, RG-101, a GalNAc-conjugated microRNA antagonist or anti-miR,
which targets miR-122 for the treatment of HCV. Regulus expects to file its
first application with regulatory authorities for RG-101 in the near term and
expects to commence clinical studies in man in early 2014. Additionally,
Regulus' strong financial position continues to support these stated goals and
the Company continues to expect to end 2013 with approximately $110 million in
cash, cash equivalents and short-term investments. Lastly, Regulus expects
that the second microRNA candidate to be nominated for clinical development by
the end of the year may come from the miR-21 fibrosis program.

About RG-101 for the Treatment of HCV

RG-101 is a key program in Regulus' 'Road to the Clinic' Strategy for 2013, in
which the Company expects to nominate two microRNA candidates for clinical
development, be positioned to file its first applications with regulatory
authorities by the first half of 2014 and maintain a strong year-end cash
position to support these goals. RG-101 was the first microRNA candidate
nominated for clinical development under this strategy.

microRNA-122 (miR-122) is the most abundant microRNA in hepatocytes and is a
critical host factor for survival and replication of all know HCV genotypes.
RG-101 is a novel anti-miR-122 oligonucleotide therapeutic that is effectively
targeted to hepatocytes for the treatment of HCV through conjugation to
GalNAc, a carbohydrate-based chemistry approach for asialoglycoprotein
receptor-mediated delivery of oligonucleotides to hepatocyte cells of the
liver. Utilizing the GalNAc conjugate chemistry has significantly improved the
potency of the active oligonucleotide of RG-101 by achieving targeted delivery
of the oligonucleotide to the infected hepatocytes. Given its attractive
properties and positive preclinical profile seen to date, Regulus believes
that RG-101 may be an attractive agent to add to existing HCV therapeutic
regimens. The Company plans to develop RG-101 as a key component of an HCV
combination regimen for patients who have failed, or are intolerant of, the
current standard of care and specific patient populations such as HCV/HIV
co-infection. Regulus expects to file a regulatory application for RG-101 in
the near term and expects to commence clinical studies in man in early 2014.

About Regulus

Regulus Therapeutics Inc. (NASDAQ: RGLS) is a biopharmaceutical company
leading the discovery and development of innovative medicines targeting
microRNAs.Regulus is uniquely positioned to leverage a mature therapeutic
platform that harnesses the oligonucleotide drug discovery and development
expertise of Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc.,
which founded the company. Regulus has a well-balanced microRNA therapeutic
pipeline entering clinical development, an emerging microRNA biomarkers
platform to support its therapeutic programs, and a rich intellectual property
estate to retain its leadership in the microRNA field. Regulus intends to
focus its proprietary efforts on developing microRNA therapeutics for oncology
indications and orphan diseases and is currently advancing several programs
toward clinical development in oncology, fibrosis and metabolic diseases.
Regulus is also developing RG-101, a GalNAc-conjugated anti-miR targeting
microRNA-122, for the treatment of chronic hepatitis C virus infection.
Regulus' commitment to innovation and its leadership in the microRNA field
have enabled the formation of strategic alliances with AstraZeneca,
GlaxoSmithKline and Sanofi. In addition, Regulus has formed a research
collaboration with Biogen Idec around its emerging microRNA biomarkers
platform.

For more information, please visithttp://www.regulusrx.com.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not
historical facts are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements
associated with financial estimates (including Regulus' projected cash at the
end of 2013), the projected sufficiency of Regulus' capital position for
future periods, the future negotiation and execution of a co-development
agreement with Sanofi, the expected ability of Regulus to undertake certain
activities and accomplish certain goals (including with respect to development
and other activities related to RG-101 and Alnylam's proprietary process for
manufacturing GalNAc conjugates and with respect to the nomination of a second
microRNA candidate for clinical development), the projected timeline of
clinical development activities, and expectations regarding future therapeutic
and commercial potential of Regulus' business plans, technologies and
intellectual property related to microRNA therapeutics being discovered and
developed by Regulus. Because such statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "intends," "will," "goal," "potential" and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements are based upon Regulus' current expectations and
involve assumptions that may never materialize or may prove to be incorrect.
Actual results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of various risks
and uncertainties, which include, without limitation, risks associated with
the process of discovering, developing and commercializing drugs that are safe
and effective for use as human therapeutics, and in the endeavor of building a
business around such drugs. These and other risks concerning Regulus'
financial position and programs are described in additional detail in Regulus'
SEC filings. All forward-looking statements contained in this press release
speak only as of the date on which they were made. Regulus undertakes no
obligation to update such statements to reflect events that occur or
circumstances that exist after the date on which they were made.



Regulus Therapeutics Inc.

Selected Financial Information

Condensed Statement of Operations

(In thousands, except share and per share data)
                                         Three months ended         Nine months ended

                                         September 30,              September 30,
                                         2013           2012        2013          2012
                                         (Unaudited)
Revenues:
Revenue under strategic                  $ 6,118        $ 2,809     $ 14,115      $ 9,462
alliances
Total revenues                           6,118          2,809       14,115        9,462
Operating expenses:
Research and development                 7,106          5,248       21,710        14,735
General and administrative               1,917          1,093       5,545         2,998
Total operating expenses                 9,023          6,341       27,255        17,733
Loss from operations                     (2,905)        (3,532)     (13,140)      (8,271)
Other income (expense), net              736            (2,159)     (3,605)       (2,289)
Loss before income taxes                 (2,169)        (5,691)     (16,745)      (10,560)
Income tax (benefit) expense               (5)            (6)       (4)           (28)
Net loss                                 $ (2,164)      $ (5,685)   $ (16,741)    $  (10,532)
Net loss per share:
 Basic                                $ (0.05)       $ (15.98)   $ (0.45)      $  (41.03)
 Diluted                              $ (0.07)       $ (15.98)   $ (0.45)      $  (41.03)
Weighted average shares used to compute
net loss per share:
 Basic                                 40,154,812      355,735     37,367,368     256,682
 Diluted                                41,555,660     355,735     37,367,368     256,682



Regulus Therapeutics Inc.

Condensed Balance Sheets

(In thousands)
                                                   September 30,  December 31,
                                                   2013           2012
                                                   (Unaudited)
Assets
Cash, cash equivalents and short-term investments  $   123,903    $   98,100
Other current assets                               1,383          829
Non-current assets                                 5,304          4,589
Total assets                                       $   130,590    $   103,518
Liabilities and stockholders' equity
Current liabilities                                $   4,073      $   2,317
Current portion of deferred revenue                9,454          10,451
Convertible notes payable, at fair value           13,921         10,134
Other long-term liabilities                        1,558          767
Deferred revenue, less current portion             7,138          17,756
Stockholders' equity                               94,446         62,093
Total liabilities and stockholders' equity         $   130,590    $   103,518





SOURCE Regulus Therapeutics Inc.

Website: http://www.regulusrx.com
Contact: Amy Conrad, Director, Investor Relations and Corporate
Communications, Regulus Therapeutics Inc., 858-202-6321,
aconrad@regulusrx.com; or Media, Liz Bryan, Spectrum Science,
lbryan@spectrumscience.com, 202-955-6222 x2526