Company Update

November 9, 2017

Sierra Oncology (SRRA)

Sierra Reported Q3 2017 Earnings, Update with SRA737 Expected in
February
 
On November 8 th, Sierra Oncology (NasdaqGM: SRRA) announced third quarter 2017 Analysts
earnings and provided an update on its developmental programs. Most notably, the Company
remains on track to provide an update with SRA737, a Chk1 inhibitor, in February 2018, Sam Slutsky
with more comprehensive results coming at a medical conference during the second half of (212) 915-2573
2018. Additionally, the Company has expanded the number of UK clinical sites in the SRA737 sslutsky@lifescicapital.com
monotherapy trial from 3 to 8, with plans to on board more sites in the future. Sierra recently
presented preclinical data at the AACR-NCI-EORTC Conference in October, highlighting
Market Data
the synergies between low dose gemcitabine and SRA737, which has mechanistic rationale,
as SRA737 works best in cancers with high levels of replicative stress. As of September 30, Price $1.93
2017, the Company had cash and cash equivalents of $107.8 million, which is expected to Market Cap (M) $101
fund operations through approximately mid-2019. EV (M) $(7)
Shares Outstanding (M) 52.3
■ Preclinical Data at AACR-NCI-EORTC Supports Clinical Development of SRA737. Fully Diluted Shares (M) 60.0
Sierra presented preclinical data at the AACR-NCI-EORTC conference in October, further Avg Daily Vol 358,430
demonstrating that SRA737 has synergistic activity when combined with replication stress- 52-week Range: $1.10 - $2.25
inducing agents, such as gemcitabine. To showcase the activity, SRA737 was combined with Cash (M)* $107.8
a sub-therapeutic dose of gemcitabine in several tumor models, including those resistant Net Cash/Share $2.06
to gemcitabine monotherapy. Strong tumor growth inhibition was seen in each, which Annualized Cash Burn (M) $38.0
translated into a survival advantage for mice. Sierra is currently evaluating the combination Years of Cash Left 2.8
of SRA737 and low dose gemcitabine in a Phase I solid tumor study. Debt (M) $0.0
Short Interest (M) 0.30
There is mechanistic rationale to use this combination, as Chk1 inhibition appears to be Short Interest (% of Float) 0.8%
most effective in cancers with high levels of replicative stress, which low-dose gemcitabine *As of September 30, 2017
promotes. Chk1 is an essential component of maintaining cell viability after replicative
stress by stabilizing replication forks, preventing origin firing, and inhibiting cell cycle Financials
progression while promoting DNA repair. By inhibiting Chk1’s activity in the face of FY Dec 2015A 2016A 2017A
replication stress, the replication fork collapses, replication cannot resume, and cell death EPS Q1 NA NA (0.26)A
may ultimately occur. Q2 NA NA (0.20)A
Q3 NA NA (0.19)A
Q4 NA NA NA
FY NA NA NA
Expected Upcoming Milestones

■ February 2018 – Preliminary update from Phase I studies with SRA737 for solid
tumors.
■ H2 2018 – Present interim data at medical meeting from Phase I studies with SRA737
for solid tumors.
■ 2018 – Potentially begin Phase I studies combining SRA737 with PARP inhibitors or
immunotherapy.

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For analyst certification and disclosures please see page 3
 November 9, 2017

■ Update with SRA737 Expected in February. When Sierra in-licensed SRA737 in January 2017, it was being evaluated in two Phase I
studies for advanced solid tumors in the UK. Following the acquisition of SRA737, Sierra has extensively studied the drug’s mechanism
of action and the DDR pathway. Based on the potential for SRA737 to induce synthetic lethality in patients who have specific genetic
alterations, the Company has amended the trials to enroll patients into expansion cohorts who have predefined mutations that are
hypothesized to induce synthetic lethality when Chk1 is inhibited. This enrollment strategy should provide more clarity on the activity of
SRA737 compared to conventional Phase I studies, which have less targeted enrollment criteria. One of the trials is evaluating SRA737
as a monotherapy, and the other is focused on combining SRA737 with low-dose gemcitabine due to the potential for gemcitabine
to induce replication stress, which is implicated to potentiate SRA737’s activity. An update on the clinical programs with SRA737 is
expected in February, with a more comprehensive interim analysis coming during the second half of 2018 at a medical conference.
■ IND Enabling Studies Ongoing with SRA141. SRA141 is a highly-selective orally administered small molecule inhibitor of the cell
division cycle 7 (Cdc7) protein, a serine-threonine kinase that is essential for origin firing during DNA replication, and is also involved in
the DDR network during the S Phase of the cell cycle. The Company is currently conducting preclinical studies to evaluate dosing and
the activity of SRA141 across a number of solid and liquid tumor types. Treatment using SRA141 could have several implications for
cancer, since the over-expression of Cdc7 has been correlated with poor outcomes in both solid tumors and hematological malignancies.
The Company is evaluating when to best advance SRA141 into the clinic, as its primary focus is expanding the development of SRA737.
■ Third Quarter 2017 Financial Results. Sierra’s research and development expenses for the third quarter 2017 were $7.4 million
compared to $12.3 million during the same period in 2016. General and administrative expenses totaled $2.8 million for the third
quarter, compared to $3.0 million during the third quarter of 2016. Sierra reported a net loss for the third quarter 2017 of $10.0 million,
or $0.19 per share, compared to a net loss of $15.2 million, or $0.50 per share for the third quarter 2016. As of September 30, 2017,
the Company had cash and cash equivalents of $107.8 million, which is expected to fund operations through approximately mid-2019.

Risk to Invesment

We consider an investment in Sierra Oncology to be a high-risk investment. Sierra Oncology is a development stage company with no
history of taking a treatment to market and currently has no FDA approved drugs in its portfolio. The Company’s programs have limited
data to date. Furthermore, early indications of efficacy do not necessarily translate into positive late-stage results. Clinical trials will result
in significant additional expenses to the Company and may require additional rounds of dilutive financing. As with any company, Sierra
Oncology may be unable to obtain sufficient capital to fund planned development programs. There are regulatory risks associated with
the development of any drug and Sierra Oncology may not receive FDA approval for its candidates despite significant time and financial
investments. Regulatory approval to market and sell a drug does not guarantee that the drug will penetrate the market, and sales may
not meet expectations.

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Analyst Certification
The research analyst denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily responsible
for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies), with respect to each
security or subject company that the research analyst covers in this research, that: (1) all of the views expressed in this report accurately
reflect his or her personal views about any and all of the subject securities or subject companies, and (2) no part of any of the research
analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research
analyst(s) in this report.

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to seek compensation for investment banking services from the subject company in the next three months. LSC (or an affiliate) has also
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a market in the securities of the subject company.

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