• Proceeds to enable advancement of lead drug candidates – once-weekly basal insulin and once-weekly Vasoactive Intestinal Peptide

Malvern, PA, March 12, 2015 — PhaseBio Pharmaceuticals, Inc., a leading company in the field of biopolymer-based drugs and focused on developing treatments for metabolic and specialty cardiopulmonary disorders, today announced that it has closed a $40 million Series C financing round led by AstraZeneca. Investment by AstraZeneca and existing investors New Enterprise Associates, Hatteras Venture Partners, Johnson & Johnson Innovation – JJDC and Fletcher Spaght Ventures will enable progression of PhaseBio’s once-weekly insulin (PE0139) into Phase 2a testing for type 2 diabetes and once-weekly Vasoactive Intestinal Peptide (PB1046) into separate Phase 2a trials for heart failure and for cardiomyopathy in Duchenne and Becker muscular dystrophy. Michael Gutch, Ph.D., M.B.A., Executive Director of Corporate Development at AstraZeneca, has joined PhaseBio’s board of directors. Donald Dwyer, M.B.A., Executive Director of Evaluations at AstraZeneca has joined as a board observer of PhaseBio.

PE0139 is a first-in-class, super long-acting, fully native basal insulin intended for once-weekly subcutaneous administration, either as a monotherapy or in combination with other treatments for type 2 diabetes. PB1046 is comprised of a recombinant form of the human peptide hormone Vasoactive Intestinal Peptide (VIP) that stimulates biological pathways important in the regulation of the cardiopulmonary and immune systems. Both compounds utilize PhaseBio’s proprietary Elastin-Like Polypeptide (ELP) technology to provide longer half-life and greater stability in circulation while retaining similar potency to the native sequences.

“AstraZeneca is committed to bringing innovative treatments to improve the life of diabetic patients,” said Dr. Gutch. “The ELP technology developed by PhaseBio might offer to patients the opportunity to manage their diabetes by injecting once-weekly, long-acting basal insulin.”

“The investment from AstraZeneca, together with our existing investors, provides PhaseBio with a great deal of operational flexibility and resources to advance PE0139 into a Phase 2a study, as well as to initiate Phase 2a trials of PB1046 for acute heart failure and for cardiomyopathy in Duchenne and Becker muscular dystrophy patients,” said Jonathan P. Mow, Chief Executive Officer of PhaseBio. “Given the broad potential for PB1046 to treat both heart failure and orphan diseases, we have the flexibility to either develop and launch the product on our own or in collaboration with a partner.”

About PE0139

PE0139 is the result of PhaseBio’s internal research efforts, which enabled native human insulin to be produced in E. coli as a correctly folded soluble protein when fused to an Elastin-Like Polypeptide (ELP). The product is formulated in an aqueous solution at a neutral pH and has been shown to be highly potent in vivo, with a more prolonged effect on blood glucose than insulin glargine. PE0139 is differentiated from currently available basal insulins as the only agent to be based on the native insulin sequence, rather than a mutated sequence, and by its ability to remain stable in monomeric form in a simple aqueous formulation. PE0139 has an extremely flat pharmacokinetic profile that is essential for the once-weekly delivery of insulin.

About PB1046

PB1046 is based on Vasoactive Intestinal Peptide (VIP), a naturally occurring peptide with multiple pleiotropic effects on the cardiovascular, pulmonary and immune systems. However, the extremely short in vivo half-life has precluded its therapeutic use. Utilizing ELP technology, PhaseBio has overcome these limitations, demonstrating prolonged circulatory drug exposure in humans. PB1046 was highly effective in animal models of hypertension, pulmonary arterial hypertension and heart failure, with positive cardiac inotropic (contractility) and lusitropic (relaxation) effects without an increase in myocardial oxygen demand.

About PhaseBio

PhaseBio Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company developing novel drugs to treat diabetes and cardiovascular dysfunction in patients suffering from rare diseases. The Company’s proprietary discovery platform technology uses recombinant ELP biopolymers to control the half-life, bioavailability and physical characteristics of molecules for ease of administration. The resulting compounds are tuned for a specific rate of absorption, thereby increasing efficacy and reducing side effects. The Company’s lead development candidates are PE0139, a novel basal insulin ELP-fusion with the potential for weekly dosing; and PB1046, a weekly VIP agonist for treatment of acute and chronic heart failure and Duchenne muscular dystrophy-associated cardiomyopathy. PhaseBio is privately owned, with headquarters and research laboratories in Malvern, PA.