UPDATE REPORT
Biotechnology Industry ● October 16, 2013
KEITH A. MARKEY, PH.D., M.B.A.
212-514-7914
KMARKEY@GRIFFINSECURITIES.COM
ZIOPHARM ONCOLOGY (NASDAQCM: ZIOP)

Gene therapy offers a promising, new paradigm for treating cancer. Ziopharm’s collaboration with
Intrexon Corporation is beginning to pay off with encouraging data from clinical studies. Results from a Phase 1
trial of an interleukin-12 (IL-2) gene therapy provided evidence of safety and efficacy in patients with advanced
melanoma. But that monogenic therapy is just the beginning, as multigenic therapies that generate several
powerful cytokines and/or other anticancer molecules are in the development pipeline. The multigenic
treatments should offer an economical and more effective approach to combating the multiple underlying
genetic abnormalities associated with different cancers.

The latest data set the stage for eight clinical trials to start over the next two years. Ziopharm will present
results from four preclinical studies involving advanced gene therapies for cancer at an international meeting
being held on October 19 – 23. All were designed to provide the foundation for future clinical studies.

Ziopharm has numerous milestones approaching. We believe these will begin to demonstrate the Company’s
intrinsic value and generate considerable interest in ZIOP shares. Two clinical trials testing an interleukin-12
gene therapy for advanced melanoma and recurrent/metastatic breast cancer will probably report interim data
later this year and full data in 2014. Also, new studies will commence in the first half, targeting glioblastoma
with the IL-12 gene therapy and melanoma and breast cancer with combination treatments. Partnering
discussions may also prove fruitful in the months ahead.

Licensing agreements may provide non-dilutive financing. The Company is seeking partners to complete
development of its lead gene therapy and small molecule, legacy drugs. We believe the deals will help to
finance the clinical research planned through 2015.
We reiterate our BUY recommendation with a 12-month price target to $10.75.
Share Price (10/15/2013)
52-Week Price Low / High
Mkt. Capitalization (issued)
Shares Outstanding (issued)
12-month Target Price
Average Daily Volume (3 mos.)
Website
Est’d 2013 Earn’s (Loss)/shr
Est’d 2014 Earn’s (Loss)/shr
$4.09
$1.45 – $5.95
$341.6 million
83.52 million
$10.75
900,991
www.ziopharm.com
($0.65)
($0.57)
Ziopharm Oncology (NasdaqCM: ZIOP) is a clinicalstage company developing gene therapies via an
exclusive channel collaboration focused on oncology
with the synthetic biology specialist Intrexon
Corporation. The most advanced drug is an
adenoviral vector for the powerful cytokine interleukin12 that has shown promise against melanoma and
breast cancer.
The R&D pipeline includes multigenic therapies under
®
control of the RheoSwitch Therapeutic System that
Source: BigCharts.com
may be delivered directly into a target tissue or via a
genetically modified cell, such as a mesenchymal
stem cell. An expansive number of molecules,
including antibody fragments and immunomodulators,
may be combined via controlled gene therapy.
A few anticancer legacy drugs, including palifosfamide, darinaparsin, and indibulin available for
licensing. The most advanced drug, palifosfamide is
in a Phase 3 trial for small cell lung cancer.
Griffin Securities, Inc., 17 State Street, New York, NY, 10004  www.GriffinSecurities.com
Please Review Disclosures on Page 16 of this Research Report
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Ziopharm Oncology
October 16, 2013
TABLE OF CONTENTS
Investment Thesis – Multiple Milestones Approach……………………………………………………………...3
The Long-Term Promise of DNA-Based Medicine ....................................................................................... 3 New Therapies & Indications in the Pipeline................................................................................................. 4 Clinical Studies to Yield Data Soon .............................................................................................................. 7 Treating Melanoma.................................................................................................................................... 7 Phase 2 Breast Cancer Trial ..................................................................................................................... 9 Investment Concerns and Risks ................................................................................................................. 11 Financial Forecasts & Valuation ................................................................................................................. 12 Revenue Sources .................................................................................................................................... 12 Annual Income Statements҂ .................................................................................................................... 14 Quarterly Income Statements҂ ................................................................................................................ 14 Balance Sheet҂ ........................................................................................................................................ 15 Valuation Analysis ................................................................................................................................... 15 Disclosures .................................................................................................................................................. 16 GRIFFIN SECURITIES EQUITIES RESEARCH
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October 16, 2013
INVESTMENT THESIS – MULTIPLE MILESTONES APPROACH
Ziopharm is at the forefront of developing mono- and multi-genic therapies to treat the multigenic disease,
cancer. The lead molecule, which causes cells to express the potent cytokine interleukin-12 under the
control of an activator ligand, is being tested against advanced melanoma and breast cancer. Interim data
from those trials is expected to be announced in late 2013, followed by complete results in 2014. In the
meantime, the Company will make four presentations at the International Conference on Molecular
Targets and Cancer Therapeutics that demonstrate the considerable utility of the underlying platforms
created by its collaborator, Intrexon Corporation. We believe this preclinical research will constitute the
basis for some of the eight investigational new drug applications that Ziopharm has scheduled to file over
the next two years.
These important milestones, plus others related to partnering discussions and its legacy programs
involving small-molecule drugs, are shown in Table 1. We believe they will stimulate interest in Ziopharm
stock and thereby help to raise the valuation of the shares to our 12-month price target of $10.75 a share.
Table 1. Upcoming Ziopharm Milestones
Source: Ziopharm Oncology presentation at the BIO Investor Forum, October 2013
THE LONG-TERM PROMISE OF DNA-BASED MEDICINE
Over the next five years, investors can look forward to a broad range of therapies emerging from the
Ziopharm-Intrexon team’s application of synthetic biology to the multiple malignancies that have eluded
modern medicine. Our optimism stems from the proof-of-concept studies that will be presented at the
upcoming meeting and from the unique properties of the drug-discovery platform that enables
economically feasible therapies, combining cytokines, antibodies, and/or decoy proteins, to target specific
types of cancer. The promise of this disruptive technology is perhaps best understood from Figure 1,
which shows the multiple combinations of effector molecules and cells that may be used strategically to
attack malignant cells and the microenvironment that permits them to survive and proliferate.
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October 16, 2013
Figure 1. The unique toolset available to the Ziopharm-Intrexon team. DNA-based medicine
offers the opportunity to intervene in multiple ways to halt malignant cell survival. The approaches
highlighted in yellow are the effectors, cells, and anti-tumor functions related to potential
therapies developed thus far and are discussed in various levels of detail in this report.
Source: Source: Ziopharm Oncology presentation at the BIO Investor Forum, October 2013
NEW THERAPIES & INDICATIONS IN THE PIPELINE
Ziopharm has four posters based on preclinical research scheduled for presentation at the
AACR/NCI/EORTC International Conference on Molecular Targets and Cancer Therapeutics that will be
held on October 19 – 23. Three expand the applications of synthetic biology to innovative therapies for
cancer and the fourth sets the stage for an upcoming clinical trial targeting a brain malignancy,
glioblastoma. However, it is possible that any or all of the preclinical work summarized below could
support clinical development in the next two years.
Abstract B127: Pharmacodynamics and functionality of RheoSwitch regulated immunomodulatory
proteins, expressed from a multigenic embedded cellular bioreactor following intramuscular
electroporation in mice.
Malignant growth is a multigenic disease that is not readily treated with monotherapies. Ziopharm has
examined the anticancer activities of three immunomodulators, human interleukin-12 (IL-12), interferon-α
(INF-α), and a CTLA-4 decoy, in single, dual, and triple combinations in gene therapies controlled by
Intrexon’s RheoSwitch. (See next page for a discussion of these molecules.) Expression of the
immunomodulators was controlled via oral administration of the activator ligand veledimex (INXN-1001).
Expression of seven transgenes in cell cultures and in vivo were compared: three encoding for each gene
of interest, three containing a combination of two genes of interest, and one plasmid expressing all three
immunomodulators. A single intramuscular injection and electroporation of the transgenes, followed by
administration of INXN-1001, increased levels of IL-12, INF-α, and/or CTLA-4 decoy. No expression was
seen in cell culture or in vivo absent the activator ligand. This research shows for the first time the
feasibility of systemic expression of three immunomodulators from a single RheoSwitch-controlled
multigenic construct.
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IL-12 or interleukin-12 is a multifunctional cytokine that influences innate and adaptive immunities,
notably regulating cell-mediated immune responses. Specifically, it promotes the production of the
cytokine interferon-γ, which has multiple effects including inhibiting blood vessel formation, and it
stimulates the proliferation and cytotoxic activities of both natural killer cells and T cells.1 (See also Figure
5 on page 8.) Preclinical research has indicated that IL-12 has potent anticancer activity, but due at least
in part to dose-limiting adverse side effects its clinical usefulness has been limited.2 Thus far, IL-12 has
not been approved for commercial sale.
INF-α or interferon-α is a cytokine that causes inflammation that can be either beneficial (e.g., alerting the
immune system to an infectious agent or malignant growth) or harmful (e.g., autoimmune diseases, such
as systemic lupus erythematosus and colitis). The molecule also stimulates hematopoietic stem cell
cycling to maintain the immune cell balance.3 INF-α has been approved for treating cancer.4 And a longacting INF-α (a pegylated version) has been created to provide a more sustained effect.
CTLA-4 or cytotoxic T-lymphocyte antigen-4 is an immunomodulatory agent that down-regulates
activation of T-cells.5 Its expression is elevated in many tumors to prevent an immune attack, and multiple
variants have been identified in various cancers, including lung, oral carcinoma, and breast.6,7,8 A decoy
against this molecule interferes with its function and thereby enhances immune surveillance and activity
against malignant cells. No therapies targeting CTLA-4 have been approved thus far.
Abstract C234: Regulated immunomodulators expression using the RheoSwitch Therapeutic System
platform in human mesenchymal stem cells.
We find the thrust of this research to be truly innovative – it utilizes the natural proclivity of stem cells to
home into areas of tissue damage to deliver an immunotherapeutic gene. Stem cells are probably
attracted to malignant growths, much as they are to traumatized tissue by cytokines that signal a part of
the body is in need of repair.9 Moreover, the persistence of mesenchymal stem cells in the body is
typically measured in months. As such, we believe they are an excellent delivery vehicle for a gene
therapy against cancer.
The research conducted by Ziopharm and Intrexon demonstrates that human mesenchymal stem cells
may be transduced to create genetically modified stem cells that are phenotypically similar to the original
cells based upon marker expression. The transduction was achieved with adenoviral vectors for either
human or mouse IL-12 with an efficiency of about 90% and with a multiplicity of infection of 20,000/cell.
Expression of the cytokine, which was controlled in the expected off-on-off kinetics of a RheoSwitch, was
observed for up to 53 days when the activator ligand INXN-1001 was added to or removed from the
culture medium.
Another experiment tested the expression of three immunomodulators human IL-12, human INFα, and
CTLA4 decoy in single, dual, and triple combinations in genetically modified mesenchymal stem cells.
Expression of these molecules was controlled by the RheoSwitch and activator ligand, and the human IL-
1
Trinchieri, G. Interleukin-12 and the regulation of innate resistance and adaptive immunity. Nat Rev Immunol (2003); 3(2): 133.
Car, BD, et al. The toxicology of Interleukin-12: A review. Toxicol Pathol (1999); 27(1): 58.
3
Essers, MA, et al. INFalpha activates dormant haematopoietic stem cells in vivo. Nature (2009); 458(7240): 904.
4
Mocellin, S, et al. Interferon alpha adjuvant therapy in patients with high-risk melanoma: A systemic review and meta-analysis. J
Natl Cancer Inst (2010); 102(7): 493.
5
Sotomayor, EM, et al. In vivo blockade of CTLA-4 enhances the priming of responsive T cells but fails to prevent the induction of
tumor antigen-specific tolerance. Proc Natl Acad Sci USA (1999); 96(20): 11476.
6
Antczak, A, et al. CTLA-4 expression and polymorphism in lung tissue of patients with diagnosed non-small-cell lung cancer.
BioMed Res Intl (2013); Article ID 576486.
7
Bharti, et al. Functional genetic variants of CTLA-4 risk of tobacco-related oral carcinoma in high-risk North Indian population. Hum
Immunol (2013); 74(3): 348.
8
Zhang, B, et al. Genetic variants associated with breast-cancer risk: comprehensive research synopsis, meta-analysis, and
epidemiological evidence. Lancet Oncol (2011); 12(5): 477.
9
Nakamizo, A, et al. Human bone marrow-derived mesenchymal stem cells in the treatment of gliomas. Cancer Res (2005); 65(8):
3307.
2
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October 16, 2013
12 and INFα were found to be fully bio-functional. At the time of the abstract’s preparation the function of
the CTLA4 decoy was being tested.
This research shows that mesenchymal stem cells retained their natural phenotype after transduction, yet
they were capable of expressing the three immunomodulators from single and multigenic constructs.
Based on the natural characteristics of these cells, Ziopharm and Intrexon have created a genetically
modified cell that will deliver RheoSwitch-controlled, single or multiple cancer immunotherapies directly to
tumors. Thus, the collaborators have created a gene therapy with an appropriate delivery vehicle for
combating cancer anywhere in the body.
Abstract B247: Integration of a modularized protein engineering technology and the RheoSwitch
Therapeutic System platform to develop high affinity trastuzumab single chain variable fragment-Fc
proteins for gene therapy applications.
This research was conducted to demonstrate the utility of a platform for the conversion and assay of
monoclonal antibodies into functional single chain variable fragment-Fc fusion proteins that may be
encoded as a gene therapy. The molecule contains an antigen-binding region (the single chain variable
fragment, scFv) and the constant portion, Fc, of a normal antibody that enables it to interact with proteins
of the complement system. (See Figure 2.) The scFv module must be designed for each cancer antigen,
such as trastuzumab’s target, human epidermal growth factor receptor-2 (HER-2), which is associated
with breast cancer, while the Fc module may be used with any/all such therapies.
Figure 2. Structures of a Normal Antibody
Source: www.abdesignlabs.com
The collaborators used this platform to create a version of trastuzumab (sold by Roche as Herceptin®)
and compared the fusion protein with the commercially available antibody. The results showed that the
affinity of the scFv-Fc protein expressed by genetically modified cell lines was comparable to that of
trastuzumab (Kd: 0.15 nM versus 0.08 nM, respectively) and that the antibody-dependent, cell-mediated
cytotoxicities of the two molecules were similar (EC50: 3.6 ng/mL versus 0.94 ng/mL, respectively).
In a separate experiment, the platform was used to create a vector for two scFv-Fc molecules having the
antigen-binding regions of trastuzumab and cetuximab (an antibody that binds to the epidermal growth
factor receptor with a specific gene mutation and that is sold by Bristol-Myers Squibb and Eli Lilly as
Erbitux®). The RheoSwitch-controlled multigenic vector was transduced into a myocyte cell line and
expression of the two scFv-Fc proteins was controlled by the activator ligand. The results demonstrate the
feasibility of creating inducible multigenic antibody therapies for the treatment of cancer.
Abstract B298: The controlled expression of IL-12 as an immunotherapeutic treatment of glioma through
the use of the RheoSwitch Therapeutic System platform.
Details of this research were not available at the time of this writing, due to an embargo on the data.
However, we believe the Company tested its adenoviral vector for IL-12, controlled by the RheoSwitch,
against a deadly brain cancer. As shown in Figure 3, preclinical results have indicated that the vector has
good activity against a glioma model. Accordingly, the foundation has been laid for a clinical study
focusing on brain cancer that is scheduled to commence early next year.
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Figure 3. Kaplan-Meier survival plots related to a mouse glioma model treated with an
IL-12 gene therapy. Glioma is deadly cancer that results in death of the animal within 55
days after implantation of the cells. Administration of Ad-RTS-IL12 or dendritic cells
genetically modified with RTS-IL12 (DC-RTS-IL12) on day 5 and daily dosing with
activator ligand (AL) resulted in 100% survival up to 80 days post-glioma cell
implantation. Controls included dendritic cells (DC) or AL alone, both of which had no
effect. Similarly, the two therapeutic agents without the AL had little/no effect.
Source: Source: Ziopharm Oncology presentation at the BIO Investor Forum,
October 2013
CLINICAL STUDIES TO YIELD DATA SOON
Ziopharm is conducting two Phase 2 clinical trials of its lead gene therapy, Adv-RTS-IL-12, as a treatment
for advanced melanoma and for breast cancer. Interim data will likely be available later this year and final
results should be released in 2014. That information may lead to a licensing agreement, but it probably
will also serve as basis for a combination trial(s) of the therapy that is scheduled to start in the first half of
next year. Descriptions of the two ongoing trials follow:
TREATING MELANOMA
The Phase 2 trial was initiated in October 2012 upon completion of a Phase 1 dose-escalation study that
reported clinical activity in five of the seven patients treated at the two highest doses tested.10 An example
of the therapy’s efficacy is presented in Figure 4, showing a tumor at three time points, on cycle 1 day 1
(start of activator ligand treatment), cycle 1 day 15 (prominent inflammation in the vicinity of the tumor)
and cycle 2 day 1 (no observable tumor). Each patient received an intratumoral injection of Ad-RTS-IL12
on day 1 of each 21-day cycle and INXN-1001 (5mg, 20mg, 100mg or 160mg) on days 1 – 7.
Figure 4. A Tumor Response to Ad-RTS-IL1210
The four doses of ligand tested yielded a dose-dependent increase in serum levels of IL-12 (ranging from
50pg/mL (5mg INXN-1001 cohort) to 420pg/mL (160mg INXN-1001 cohort) and a similar increase in
10
Linette, GP, et al. A phase 1 open-label study of Ad-RTS-hIL-12, an adenoviral vector engineered to express hIL-12, in
combination with an oral activator ligand in subjects with unresectable stage III/IV melanoma. 2013 ASCO Poster #3022.
GRIFFIN SECURITIES EQUITIES RESEARCH
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levels of the cytokine interferon-γ that is induced by IL-12 (100pg/mL – 1000pg/mL). At the highest doses
of activator ligand, CD3+ and cytotoxic CD8+ T cells were increased by 7- and 4-fold respectively relative
to the levels observed in low-dose cohorts. Most patients experienced immune-related adverse events
that are typical with a “cytokine storm” and include fever and chills (73%), fatigue (60%), and vomiting
(33%).11 However, unlike the severity seen with prior clinical studies of IL-12, the patients rapidly
recovered after INXN-1001 administration ended.
The Phase 2 trial, whose design is outlined in Table 2, is being conducted to expand upon the findings of
the Phase 1 study by providing a more in-depth assessment of the effects of the gene therapy at a
molecular level and on the clinical outcome.
Table 2. Melanoma Phase 2 Trial Design
Brief Title
Safety study of adenovirus vector engineered to express hIL-12 in combination with
activator ligand to treat melanoma
NCT Number
NCT 01397708
Summary
This study involves two investigational drugs, an activator ligand (INXN-1001) in
combination with an adenovirus vector engineered to express hIL-12. IL-12 is a protein
that may enhance the immune system’s ability to kill tumor cells and may interfere with
blood flow to the tumor.
Estimated Enrollment
30 stage III or IV melanoma patients
Estimated Primary Completion Date
January 28, 2014
Intervention
Ad-RTS-hIL-12 – approximately 1.0 x 10 viral particles per injection
one intratumoral injection per study cycle
maximum of 6 study cycles
INXN 1001
1 dose cohorts at a single dose of 160 mg/day
7 oral daily doses per study cycle (up to 6 cycles)
Primary Outcomes
Safety and tolerability of intratumoral injections of Ad-RTS-hIL-12 at a constant dose in
combination with inter-cohort escalating doses of INXN-1001
Evaluation of the incidence, intensity, and type of adverse events, including clinically
significant
Secondary Outcomes
Determine a recommended dose of INXN-1001 for further study in combination with AdRTS-hIL-12
Obtain preliminary anti-tumor activity according to RECIST 1.1 criteria
Evaluate the immunological effect of the treatment in terms of cellular and tumoral
responses
Evaluate the extent of uptake of of Ad-RTS-hIL-12 into tumor cells and tumor-infiltrating
immune cells
Eligibility Criteria
Inclusion criteria
Unresectable stage III or IV melanoma, other than ocular melanoma
A minimum of 2 accessible nonvisceral lesions or palpable tumor-involved lymph
nodes
Expected survival of at least 6 months
Exclusion criteria
Prior cancer therapy within 28 days prior to first Ad-RTS-hIL-12 dose; steroid or other
immunosuppressive therapy
Infection requiring antibacterial, antifungal or antiviral therapy within 2 weeks of the
first dose of study drug
HIV infection, symptomatic brain metastases, or other clinically active malignant
disease
12
Given the estimated completion date, the trial’s final results should be available by early spring.
11
Nemunaitis, J. Nonclinical and Phase I clinical studies with a regulated adenoviral gene delivery of IL-12 show promising clinical
activity in unresectable stage III/IV melanoma. Presented at the ASGCT Meeting, June 2013.
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PHASE 2 BREAST CANCER TRIAL
There is ample evidence suggesting that Ziopharm’s IL-12 gene therapy will benefit patients with breast
cancer. Intratumoral administration of a liposomal preparation of the cytokine in a preclinical model has
found that the cytokine reactivates quiescent memory T cells to proliferate and produce interferon-γ (INFγ).12 That is in keeping with the central role that INF-γ plays in mediating some of the effects of IL-12, as
shown in Figure 5.13
Figure 5. Interferon-γ plays a central role in
mediating many anticancer effects of IL-12.
Cells that respond to IL-12 by producing
INF-γ include natural killer-T cells (NKT),
natural killer cells (NK), CD4 T helper cells,
and cytotoxic CD8 T cells. IL-12 increases T
cell priming, effector function, and cell
survival. INF-γ helps to reduce new blood
vessel formation and extracellular matrix
remodeling, which is important in facilitating
malignant cell proliferation. INF-γ also
increases chemokines with anticancer
activities and antigen processing (LMP 2
and LMP7 proteasome subunits).
Source: Del Vecchio, M, et al.
13
Other studies have shown that IL-12 alters myeloid-derived suppressor cells in the vicinity of tumors in a
preclinical breast cancer model and an adenoviral vector for the cytokine significantly increased animal
survival.14 Similarly, an IL-12-based gene therapy delivered via herpes simplex virus proved effective
against cancer metastases in the brain, while two combination drugs involving an IL-12 DNA gene
therapy and anti-angiogenesis treatments (an antibody against vascular endothelial growth factor, VEGF,
and a gene therapy for murine angiostatin) had an additive effect against breast cancer models.15,16,17 The
results of these preclinical studies not only provide a basis for Ziopharm’s ongoing Phase 2 breast cancer
trial, but also for the development of multigenic therapies including vectors for IL-12 and/or a VEGF sdFvFc.
12
Simpson-Abelson, MR, et al. IL-12 delivered intratumorally by multilamellar liposomes reactivates memory T cells in human tumor
microenvironments. Clin Immunol (2009); 132(1): 71.
13
Del Vecchio, M, et al. Interleukin-12: Biological properties and clinical application. Clin Cancer Res (2007); 13(16): 4677.
14
Steding, CE, et al. The role of interleukin-12 on modulating myeloid-derived suppressor cells, increasing overall survival and
reducing metastasis. Immunology (2011); 133(2): 221.
15
Cody, JJ, et al. Preclinical evaluation of oncolytic ∆γ1 34.5 herpes simplex virus expressing interleukin-12 for therapy of breast
cancer brain metastases. Int J Breast Cancer (2012); 2012: Article ID 628697.
16
Gyorffy, S, et al. Combined treatment of a murine breast cancer model with type 5 adenovirus vectors expressing murine
angiostatin and IL-12: A role for combined anti-angiogenesis and immunotherapy. J Immunol (2001); 166(10): 6212.
17
Rakhmilevich, AL, et al. Treatment of experimental breast cancer using interleukin-12 gene therapy combined with anti-vascular
endothelial growth factor receptor-2 antibody. Mol Cancer Ther (2004); 3(8): 969.
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Information on the Company’s clinical trial evaluating the IL-12 adenoviral vector against breast cancer is
provided in Table 3.
Table 3. Breast Cancer Phase 2 Trial Design
Brief Title
A randomized, open-label study of Ad-RTS-IL-12 monotherapy or in combination with
palifosfamide in patients with recurrent/metastatic breast cancer and accessible/visible
lesions
NCT Number
NCT01703754
Summary
This is a two-part, Phase 2 randomized, safety and efficacy study involving
recurrent/metastatic breast cancer with accessible lesions. The first part is a safety run-in
for Ad-RTS-IL-12 alone arm and palifosfamide alone arm that will report out by early next
year. This will be followed by a combination therapy in a safety run-in arm. The second
part is an efficacy evaluation of Ad-RTS-IL-12 as a monotherapy and in combination with
the standard-of-care medicines.
Estimated Enrollment
68 patients with recurrent/metastatic breast cancer
Estimated Primary Completion Date
December 2015 (final data collection for primary outcome measure)
Intervention
Ad-RTS-hIL-12 with the oral activator ligand
Palifosfamide, IV administration
Primary Outcomes
Safety and tolerability of study drug therapy based on the type and rate of adverse events
16-week progression free survival rate, calculated as the number of subjects who had not
progressed or died prior to 16 weeks from the date of their first dose, divided by the
number of subjects in the study arm
Secondary Outcomes
Objective response rate by modified RECIST v1.1
Number of patients achieving a confirmed partial or complete response according to
modified RECIST v1.1
Clinical benefit rate: proportion of patients with a complete response, partial response, or
stable disease
Estimate of progression free survival at 24 weeks post-initiation of therapy
Pharmacodynamic tumor markers in tumor tissue samples that may correlate with
objective tumor response and/or clinical outcome
Eligibility Criteria
Inclusion criteria
Histologically or cytologically confirmed adenocarcinoma of the breast, either locally
recurrent or metastatic disease with injectable lesions. Locally recurrent must not
be amenable to surgical resection or radiation with curative intent.
Disease progression on at least 1 prior systemic chemotherapy + biologic
experimental therapy
Adequate bone marrow reserve, liver function and renal function.
ECOG performance score of 0, 1, or 2.
Exclusion criteria
HER2/neu-positive cancer
Concomitant anticancer therapies, including endocrine therapies
Any condition limiting an immune response, immunosuppressive therapy, meningeal
carcinomatosis, hypersensitivity to the study drugs or localized infection at the site
of the injectable lesion site
Results from the first part of this trial, which are expected by early 2014, should provide information that
may help in the design of a breast cancer study evaluating a combination therapy scheduled to
commence shortly thereafter.
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Ziopharm Oncology
October 16, 2013
INVESTMENT CONCERNS AND RISKS
For a complete description of risks and uncertainties related to Ziopharm Oncology’s business,
see the “Risk Factors” section in Ziopharm’s SEC filings, which can be accessed directly from the
SEC Edgar filings at www.sec.gov. Potential risks include:

Stock risk and market risk: There is a limited trading market for the Company’s common stock.
There can be no assurance that an active and liquid trading market will develop or, if developed, that
it will be sustained, which could limit one’s ability to buy or sell the Company’s common stock at a
desired price. Investors should also consider technical risks common to many small-cap or micro-cap
stock investments, such as small float, risk of dilution, dependence upon key personnel, and the
strength of competitors that may be larger and better capitalized.

New and rapidly changing field: The pharmaceutical and biotechnological markets are rapidly
evolving, and research and development are expected to continue at an accelerated pace with
increased frequency. Other companies are also actively engaged in the development of therapies to
directly or indirectly treat those disorders being pursued by Ziopharm. These companies may have
substantially greater research and development capabilities, as well as significantly greater
marketing, financial, and human resources abilities than Ziopharm.

Products still in development phases: Successful development of the therapies in the R&D
pipeline is uncertain, despite the science underpinning the programs. Product development costs and
timelines can vary significantly for each product candidate and are difficult to accurately predict. In
addition, products in development that appear to be promising may not reach commercialization for
various reasons, including failure to achieve regulatory approvals, safety concerns, and/or the inability
to be manufactured at a competitive cost.

Funding requirements: It is difficult to predict the Company’s future capital requirements. Ziopharm
may need additional financing to continue funding the research and development of its products and
to expand its business. There is no guarantee that it can secure the desired future capital or, if
sufficient capital is secured, that current shareholders will not suffer significant dilution.

Regulatory risk: Various statutes and regulations govern or influence the manufacturing, safety,
labeling, storage, recordkeeping and marketing of each product. The lengthy process of seeking
approval and the subsequent compliance with applicable statutes and regulations require the
expenditure of substantial resources. Any failure to obtain, or any delay in obtaining, regulatory
approvals could materially adversely affect Ziopharm’s business. There is no guarantee that
Ziopharm’s products will be approved by the U.S. Food and Drug Administration (FDA) or
international regulatory bodies for marketing in the U.S. or abroad.

Licensing risk: Ziopharm intends to outlicense its legacy small molecule drugs for clinical
development and commercialization by partners. This strategy may not yield significant upfront fees
or subsequent royalties to offset costs of the gene therapy program. In addition, the Company plans
to seek a partner(s) to commercialize at least its initial gene therapies and genetically modified cells.
Accordingly, the timing of their development and commercialization will not be under the control of the
Company.
GRIFFIN SECURITIES EQUITIES RESEARCH
11
Ziopharm Oncology
October 16, 2013
FINANCIAL FORECASTS & VALUATION
Our financial forecasts and valuation analysis are based on the Company’s lead drug for three
indications, melanoma, breast cancer, and glioblastoma. Our model also takes into consideration
Ziopharm’s financial obligation under its ECC with Intrexon and its strategy to outlicense its drugs for final
development and commercialization by licensees.
REVENUE SOURCES
We have broken down our estimates for melanoma and breast cancer indications into the United States
and “other developed countries” as defined by the U.S. Census Bureau to allow for differences in pricing
and rates of acceptance of the novel gene therapy. In contrast, we have made a single set of
assumptions related to glioblastoma, based on “all developed countries”. The assumptions related to the
therapy’s acceptance are provided in the boxes below for each indication/geographic population. A
discussion of the assumptions is provided in the closing portion of this section.
Melanoma – United States
Year penetration starts
Starting penetration rate
Years between penetration start and peak
Peak penetration
Duration of peak penetration in years
Retention rate in decline years
Stage of development
2017
8%
Incidence
76,690
Percent addressable
5
40%
Price per patient
6
90%
Phase 2
15%
Market growth rate
2.5%
$84,000
Treatment price growth
3%
Royalty rate
30%
Probability of commercialization
25%
Melanoma – Other Developed Countries
Year penetration starts
Starting penetration rate
Years between penetration start and peak
Peak penetration
Duration of peak penetration in years
Retention rate in decline years
Stage of development
2017
3%
Incidence
92,368
Percent addressable
9
15%
Price per patient
6
90%
Phase 2
15%
Market growth rate
2.5%
$60,000
Treatment price growth
3%
Royalty rate
30%
Probability of commercialization
25%
Breast Cancer – United States
Year penetration starts
Starting penetration rate
Years between penetration start and peak
Peak penetration
Duration of peak penetration in years
Retention rate in decline years
Stage of development
2018
3%
Incidence
234,580
Percent addressable
5
27%
Price per patient
4
90%
Phase 2
38%
Market growth rate
2.5%
$84,000
Treatment price growth
3%
Royalty rate
30%
Probability of commercialization
25%
Breast Cancer – Other Developed Countries
Year penetration starts
Starting penetration rate
Years between penetration start and peak
Peak penetration
Duration of peak penetration in years
Retention rate in decline years
Stage of development
2018
1%
Incidence
9
15%
Phase 2
GRIFFIN SECURITIES EQUITIES RESEARCH
38%
Market growth rate
Price per patient
4
90%
458,054
Percent addressable
2.5%
$60,000
Treatment price growth
3%
Royalty rate
30%
Probability of commercialization
25%
12
Ziopharm Oncology
October 16, 2013
Glioblastoma – More Developed Countries
Year penetration starts
Starting penetration rate
Years between penetration start and peak
Peak penetration
Duration of peak penetration in years
Retention rate in decline years
Stage of development
2019
3%
Incidence
8
20%
Preclinical
70%
Market growth rate
Price per patient
5
90%
63,597
Percent addressable
1%
$75,000
Treatment price growth
3%
Royalty rate
30%
Probability of commercialization
25%
A Discussion of our Assumptions:
Launch dates: We are looking for Ad-RTS-IL12 to launch first for melanoma in 2017, followed by breast
cancer in 2018 and glioblastoma in 2019.
Population estimates: The sizes of the melanoma and breast cancer patient populations reflect
GLOBOCAN 2008 estimates, adjusted for population growth, while we have applied an incidence rate of
5.1 patients per 100,000 individuals to arrive at the glioblastoma population in more developed countries
where the incidence rate is higher than in less developed regions.18 In addition, the percent of the
population that is considered addressable reflects the proportion of patients who are diagnosed with
advanced/metastatic disease in the cases of melanoma and breast cancer. For glioblastoma, we have
assumed that 70% of the patients would be eligible to receive the gene therapy given the rapidity with
which the disease normally progresses.
Market penetration rates: We have assumed very low initial acceptance rates for melanoma and breast
cancer, reflecting the novelty of the therapy, the availability of alternative treatment options, and the need
to gain insurance coverage. Peak penetration rates were made after taking into consideration alternative
therapies currently in existence and under development.
Pricing: The prices of Ad-RTS-IL12 treatment for different cancers are unknown. Accordingly, we have
calculated our estimates using the price of a full course of Herceptin ($70,000 in the United States in
2012) and adding a 20% premium to arrive at our U.S. price. Overseas prices vary, but to set a single
value, we selected $60,000, or about 30% less than the domestic cost. The estimate for glioblastoma,
$75,000, is a blended fee, based on a 60:40 split between U.S. and foreign patients.
Royalty rate: This figure (30%), which is the amount that Ziopharm will receive based on a marketer’s
sales, is consistent with historical licensing fees paid for innovative drugs.
Probability of commercialization: Based on the completion of the Phase 1 clinical trial of Ad-RTS-IL12
for melanoma, we have set this probability at 25% after taking into consideration historical success rates
for drugs at a similar stage of development.
18
Central Brain Tumor Registry of the United States, Fact Sheet.
GRIFFIN SECURITIES EQUITIES RESEARCH
13
Ziopharm Oncology
October 16, 2013
ANNUAL INCOME STATEMENTS҂
҂
st
(Fiscal year ends December 31 .)
Data are in thousands, except for per-share figures. Estimates are in italics.
Total Revenue
Operating expenses
R&D expense
Licensing fee
G&A expense
Total operating costs
Operating profit/(loss)
Other income (expense) net
Warrant valuation adj
Pretax profit/(loss)
Income taxes
Net profit/(loss)
Earnings/(loss) per share
Shares outstanding
2012
2013
2014
2015
2016
2017
2018
$ 800 $ 800 $ 6,800 $ 13,300 $ 16,500 $ 52,357 $ 245,028
$ 83,446
‐
19,523
102,969
$ (102,169)
(13)
6,050
$ (96,132)
‐
$ (96,132)
$ 50,900
‐
15,500
66,400
$ (65,600)
11
10,385
$ (55,204)
‐
$ (55,204)
47,000
‐
14,000
61,000
$ (54,200)
‐
‐
$ (54,200)
‐
$ (54,200)
$ 45,000
‐
14,000
59,000
$ (45,700)
‐
‐
$ (45,700)
‐
$ (45,700)
$ 35,000
‐
14,000
49,000
$ (32,500)
‐
‐
$ (32,500)
‐
$ (32,500)
$ 36,000
‐
16,000
52,000
$ 357
‐
‐
$ 357
136
$ 221
$ 44,105
10,729
17,152
71,986
$ 173,042
‐
‐
$ 173,042
65,756
$ 107,286
$ (1.22) $ (0.66) $ (0.58) $ (0.47) $ (0.33) $ 0.00 $ 0.89
78,546 83,335
93,188
98000
100,000
120,000
120,250
Assumptions:

We have assumed that Ziopharm receives a $50 million upfront licensing fees in the second half of 2014 for its
Ad-RTS-IL12 therapy and legacy small molecule drugs. This amount is spread evenly over 48 months, which is
an approximate time to commercial launch.

R&D expenses should decline in the second half of 2013 since the ongoing clinical trials are nearly completed. In
2014, investments in new product development should ramp up as more clinical studies begin. Thereafter, we’ve
allowed R&D expenditures to ease as some costs are borne by licensees. In 2018, we’ve assumed that R&D
costs approximate 18% of revenues.

General & administrative costs will likely be decline modestly in the near term and then hold fairly constant until
the Company’s revenues permit an expansion of the infrastructure to accommodate more drug and business
development activities.

In 2018, the first full year in which we figure operations will be profitable, we have included a licensing fee due
Intrexon for its contribution to Ziopharm’s drugs that are on the market.

We have included provisions for tax liabilities at a 38% rate for financial reporting purposes, although the cash
outlay will be limited by net operating loss carryforwards of $111.5 million and R&D tax credits of $20 million as
of December 31, 2012.

The number of shares outstanding reflects anticipated equity financings in 2014 and 2016, as well as allowances
for stock-based compensation. Our per-share figures are based on basic shares outstanding in years in which
the Company books a loss, and on fully diluted during periods of profitability.
QUARTERLY INCOME STATEMENTS҂
҂
st
(Fiscal year ends December 31 .)
Data are in thousands, except for per-share figures. Estimates are in italics.
2012
Research Contract Revenue
Operating expenses
R&D expense
G&A expense
Total operating costs
Operating profit/(loss)
Other income (expense) net
Warrant valuation adj
Pretax profit/(loss)
Income taxes
Net profit/(loss)
2013
2014
Q1
$ 200
Q2
$ 200
Q3
$ 200
Q4
$ 200
Q1
$ 200
Q2
$ 200
Q3
$ 200
Q4
$ 200
Q1
$ 200
Q2
$ 200
Q3
$ 3,200
Q4
$ 3,200
$ 13,985
4,848
18,833
$ (18,633)
(26)
(5,811)
$ (24,470)
‐
$ (24,470)
$ 18,264
4,902
23,166
$ (22,966)
3
(650)
$ (23,613)
‐
$ (23,613)
$ 16,215
5,712
21,927
$ (21,727)
(42)
3,945
$ (17,824)
‐
$ (17,824)
$ 34,982
4,061
39,043
$ (38,843)
52
8,566
$ (30,225)
‐
$ (30,225)
$ 19,112
4,671
23,783
$ (23,583)
(4)
10,788
$ (12,799)
‐
$ (12,799)
$ 14,775
3,721
18,496
$ (18,296)
7
(403)
$ (18,692)
‐
$ (18,692)
$ 9,013
3,608
12,621
$ (12,421)
4
‐
$ (12,417)
‐
$ (12,417)
$ 8,000
3,500
11,500
$ (11,300)
4
‐
$ (11,296)
‐
$ (11,296)
$ 9,000
3,500
12,500
$ (12,300)
‐
‐
$ (12,300)
‐
$ (12,300)
$ 11,500
3,500
15,000
$ (14,800)
‐
‐
$ (14,800)
‐
$ (14,800)
$ 13,000
3,500
16,500
$ (13,300)
‐
‐
$ (13,300)
‐
$ (13,300)
$ 13,500
3,500
17,000
$ (13,800)
‐
‐
$ (13,800)
‐
$ (13,800)
Earnings/(loss) per share $ (0.32) $ (0.30) $ (0.23) $ (0.37)
Shares outstanding 75,620 78,515 78,670 81,379
GRIFFIN SECURITIES EQUITIES RESEARCH
$ (0.15) $ (0.22) $ (0.15) $ (0.13)
82,906 83,083 83,600 83,750
$ (0.13) $ (0.16) $ (0.14) $ (0.15)
92,500 93,000 93,500 93,750
14
Ziopharm Oncology
BALANCE SHEET҂
҂
October 16, 2013
st
(Fiscal year ends December 31 .)
Data are in thousands.
ASSETS
6/30/2013
12/31/2012
Current Assets
Cash & equivalents
38,932
Accounts Receivable
Prepaid expenses & other
Total Current Assets
Property & equipment
73,306
31
58
4,067
6,912
$
43,030
$
$
1,713
$
Other
860
$
otal Assets
80,276
1,994
1,134
45,603
$
83,404
1,165
$
1,509
18,969
$
16,516
20,997
$
18,864
-
$
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
$
Accrued expenses
Other
863
Total Current Liabilities
Long-term debt
$
$
Deferred revenue
839
2,333
Deferred rent
$
Warrant liabilities
365
$
2,576
Total Liabilities
$
2,733
400
12,962
26,271
$
84
$
34,959
Shareholders Equity
Common Stock, par value
$
Additional Paid-In Capital
334,463
Accumulated Deficit
Total Shareholders Equity
Total Liabilities & Equity
83
332,086
(315,215)
(283,724)
$
19,332
$
48,445
$
45,603
$
83,404
VALUATION ANALYSIS
Our valuation analysis was conducted via a discounted future price method. We applied a price-earnings
multiple of 40x to the Company’s projected earnings of $0.89 in 2018, resulting in a future price of $35.60.
That figure was discounted back four years, to 2014, using an annual rate of 35%, which we believe
adequately represents the risks inherent in the drug development program. The result was a share price
of $10.72. Accordingly, we have raised our 12-month price target to $10.75.
GRIFFIN SECURITIES EQUITIES RESEARCH
15
Ziopharm Oncology
October 16, 2013
DISCLOSURES
ANALYST(s) CERTIFICATION: The analyst(s) responsible for covering the securities in this report certify that the
views expressed in this research report accurately reflect their personal views about Ziopharm, Inc. (the “Company”)
and its securities. The analyst(s) responsible for covering the securities in this report certify that no part of their
compensation was, is, or will be directly or indirectly related to the specific recommendation or view contained in this
research report.
RATINGS: Griffin Securities, Inc. currently has BUY ratings on shares of Intrexon Corp. (NYSE: XON) and
ZIOPHARM Oncology, Inc. (NasdaqCM: ZIOP). Griffin Securities, Inc. has no investment ratings on any of the other
companies mentioned in this report.
MEANINGS OF RATINGS: Our rating system is based upon 12 to 36 month price targets. BUY describes stocks that
we expect to appreciate by more than 20%. HOLD/NEUTRAL describes stocks that we expect to change plus or
minus 20%. SELL describes stocks that we expect to decline by more than 20%. SC describes stocks that Griffin
Securities has Suspended Coverage of this Company and price target, if any, for this stock, because it does not
currently have a sufficient basis for determining a rating or target and/or Griffin Securities is redirecting its research
resources. The previous investment rating and price target, if any, are no longer in effect for this stock and should not
be relied upon. NR describes stocks that are Not Rated, indicating that Griffin Securities does not cover or rate this
Company.
DISTRIBUTION OF RATINGS: Currently Griffin Securities has assigned BUY ratings on 82% of companies it covers,
HOLD/NEUTRAL ratings on 18%, and SELL ratings on 0%. Griffin Securities has provided investment banking
services for 12% of companies in which it has had BUY ratings in the past 12 months and 0% for companies in which
it has had HOLD/NEUTRAL, NR, or no coverage in the past 12 months or has suspended coverage (SC) in the past
12 months.
COMPENSATION OR SECURITIES OWNERSHIP: The analyst(s) responsible for covering the securities in this
report receive compensation based upon, among other factors, the overall profitability of Griffin Securities, including
profits derived from investment banking revenue. The analyst(s) that prepared the research report did not receive any
compensation from the Company or any other companies mentioned in this report in connection with the preparation
of this report. The analyst responsible for covering the securities in this report currently does not own common stock
in the Company, but in the future may from time to time engage in transactions with respect to the Company or other
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Griffin Securities has managed or co-managed a public offering for Intrexon Corp. in the past 12 months. Griffin
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FORWARD-LOOKING STATEMENTS: This Report contains forward-looking statements, which involve risks and
uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in the “Risk Factors” section in the SEC filings
available in electronic format through SEC Edgar filings at www.SEC.gov on the Internet.
GENERAL: Griffin Securities, Inc. (“Griffin Securities”) a FINRA (formerly known as the NASD) member firm with its
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GRIFFIN SECURITIES EQUITIES RESEARCH
16
Ziopharm Oncology
October 16, 2013
The information contained herein is not a complete analysis of every material fact in respect to any company, industry
or security. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in
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ZIOP PRICE CHART – 2 Year
BUY
BUY
BUY
Source: BigCharts.com
6/26/2006 – Initiating Coverage: share price: $5.05; rating: BUY; 12-month price target: $18.00. Updating
coverage: 12/07/2006: share price $6.36; rating: BUY; 12-month price target: $20; 5/03/2007: share price $5.80;
rating: BUY; 12-month price target: $20.00; 3/13/2008: share price: $2.52; rating: BUY; 12-month price target:
$15.00; 7/02/2008: share price: $1.87; rating: BUY; 12-month price target: $15.00; 5/18/2009: share price: $0.77;
rating: BUY; 12-month price target: $3.00; 6/09/2009: share price: $1.87; rating: BUY; 12-month price target: $3.00;
3/4/2010: share price: $3.53; rating: BUY; 12-month price target: $8.00; 1/20/2011: share price: $5.60; rating: BUY;
12-month price target: $11.00; 4/25/2011: share price: $6.36; rating: BUY; 12-month price target: $11.00; 5/18/2011:
share price: $6.85; rating: BUY; 12-month price target: $11.00; 9/21/2011: share price: $4.57; rating: BUY; 12-month
price target: $11.00; 3/30/2012: share price: $5.40; rating: BUY; 12-month price target: $12.00; 12/12/2012: share
price: $4.44; rating: BUY; 12-month price target: $12.00; 10/16/2013: share price, $4.09; rating, BUY; 12-month price
target, $10.75.
XON 3-Month Price Chart
BUY
BUY
Source: BigCharts.com
9/30/13 – Initiating Coverage: share price, $23.01; rating, BUY; 12-month price target, $36.00; 10/4/2013 Update:
share price, $25.10; rating, BUY, 12-month price target, $36.00.
GRIFFIN SECURITIES EQUITIES RESEARCH
17