Jefferies 2014 Healthcare Conference

CONFIDENTIAL

Safe-Harbor Statement

2CONFIDENTIAL

This Presentation contains “forward-looking” statements that are based on our beliefs and assumptions

and on information currently available to us. Forward-looking statements include information concerning

our possible or assumed future results of operations, business strategies, research and development

plans, financing plans, competitive position, industry environment, potential growth opportunities, potential

market opportunities and the effects of competition. Forward-looking statements include all statements

that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,”

“seeks,” “estimates,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or

similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may

cause our actual results, performance or achievements to be materially different from any future results,

performance or achievements expressed or implied by the forward-looking statements. These risks and

uncertainties include, without limitation, those associated with developing and commercializing

pharmaceutical products, the ability to finance continued operations, competition in our target markets

and other risks and uncertainties described in our filings with the Securities and Exchange Commission,

including under the heading ”Risk Factors”. Forward-looking statements represent our beliefs and

assumptions only as of the date of this presentation, and our actual future results may be materially

different from what we expect. Except as required by law, we assume no obligation to update these

forward-looking statements publicly, or to update the reasons actual results could differ materially from

those anticipated in the forward-looking statements, even if new information becomes available in the

future.

Flexion: Investment Highlights

Novel, Targeted Analgesics – Initial

Focus Osteoarthritis

• Portfolio of three product candidates spanning the OA spectrum

• Worldwide commercial rights to all products

• Lead Product FX006: sustained release, intra-articular steroid for moderate to severe OA pain with demonstrated efficacy

3

FX006: Strong Phase 2b Data, Near Term Path

to Market

• Well-tolerated; amongst largest pain relief signals seen in clinical trials

• Well-defined 505(b)(2) regulatory pathway with expeditious path to market

• First sustained release injectable steroid for OA pain with strong proprietary position

Large, Growing, Unsatisfied Market

• OA pain afflicts ~27M in the United States and current therapies provide limited pain relief, have serious side effects

• Global HA market of approximately $2B for intra-articular OA treatments

• Progressive disease – often leading to total joint replacement

Multiple Potential Near Term Value Inflection

Points

• Multiple clinical milestones for FX006 and FX007 within approximately 12 mos.• FX006 synovial PK study data• FX006 repeat dose safety study initiation• FX006 confirmatory Phase 2b data• FX007 proof-of-concept study data• FX006 Phase 3 initiation

CONFIDENTIAL

Products 2012

Robust Product Pipeline

FX005Treatment for OA End-stage Pain

FX007Treatment of Post-Op Pain

FX006Front Line Therapy for OA Pain

2013 2015

4

Ph 2a PoC

Confirmatory Ph 2b Dose-Ranging

Synovial PK Study

Initiate Ph 3

Completed study Ongoing study Planned study

Ph 2b Dose-Ranging

2014

Ph 2a PoC

Pre-clinical studies

CONFIDENTIAL

Initiate Ph 2

Repeat Dose / Safety (into 2016)

Ph 2a PK/PD

Local Tox Studies

Flexion has retained

worldwide commercial

rights to all products

FX006(Sustained release Steroid)Moderate to severe OA pain

FX005(SR p38

inhibitor)End stage OA

pain

FX007(TrkA

Antagonist)Post-Op Pain

5

Total Joint Replacement

(TJR)

Oral Drugs &Physical Therapy

Steroid Injections

Hyaluronic Acid (HA)

Opioids

Treatment Spectrum

Early-stage Post-operative

Mild

Severe

OA

Pain

End-stage

Flexion’s Product Portfolio Spans the OA Pain Spectrum

CONFIDENTIAL

Most common arthritis• Also known as Degenerative Joint Disease• Progressive breakdown and loss of cartilage• One in two Americans is expected to develop

symptomatic OA

Afflicts approximately 27M in the United States with prevalence expected to increase to 45M by 2030

• Growth reflects aging, obesity, sports injuries• Accounts for over $185B in annual healthcare

expenditures

Osteoarthritis (OA) Overview

SOURCES: Arthritis Rheum (2008) 58: 26–35; NIAMS estimates 2012; Arthritis Rheum (2009) 60: 3546-3553

CONFIDENTIAL 6

Many OA patients progress to intractable joint pain, debilitating disease and eventually total joint replacement

Controlling pain and delaying surgery are therapy goals

Current OA Therapies: Inadequate with Serious Side Effects

TYPE EFFICACY TOXICITY

ORAL: Acetaminophen Limited pain relief Liver/GI

NSAIDs Limited pain relief GI bleedingCardiovascular

COX II inhibitors Limited pain relief Cardiovascular

Duloxetine Limited pain relief SuicidalityLiver

Opioids Good pain relief AddictionFracture (elderly)

INTRA-ARTICULAR:

(joint injection)

Steroids Limited duration of effect (wanes after 2 – 4 weeks)

Generally well tolerated

Hyaluronic acid (HA)

AAOS: “cannot recommend using HA” because of “lack of

efficacy”¹

Generally well tolerated

OA patients are in need of therapies that:• Provide better and more sustained pain relief• Avoid the risk of serious side effects

CONFIDENTIAL 7

¹American Academy of Orthopedic Surgeons, “Treatment of Osteoarthritis of the Knee,” Evidence-Based Guideline, 2nd Edition, May 18, 2013

FX006 – Sustained Release IA Steroid (Triamcinolone Acetonide)

Extending the potential of an established therapy

• Immediate Release (IR) IA steroids are effective, but effect is short lived

• Triamcinolone acetonide (TCA) 40 mg very commonly prescribed

• Injection is straightforward and fast, ~1 minute start to finish

• Typically performed by physician assistants, no imaging required

• FX006 projected to provide sustained release of TCA from PLGA microspheres for at least three months

• Sustained therapeutic IA concentrations – prolonged efficacy

• Low systemic concentrations – potentially reduce systemic side effects

Well-defined 505(b)(2) registration pathway

• Facilitates efficient and cost-effective clinical development

Front line IA therapy

• Potential to replace IR steroids and HA

8CONFIDENTIAL

Sustained Release Offers Safe and Prolonged Pain Relief

Demonstrated therapeutic drug levels in the joint for weeks to months, achieving optimal efficacy

Low systemic concentrations• Clean safety profiles• Confident registration trials

Use of PLGA* microspheres de-risks the regulatory pathway

• Polymers that metabolize to CO2 and water• Familiar to regulators • Used in marketed IM products (Risperdal

Consta®, Vivitrol®)

We believe we are first to administer these to the human joint

PLGA microsphere

IA Injection

PLGA microspherereleasing drug

*PLGA: poly(lactic-co-glycolic acid)Charts are for illustrative purposes, only

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FX006 PK – Supports Differential Efficacy and Safety

CONFIDENTIAL 1010

19 OA patients on FX006

• 3 dose groups of 5 – 7 patients each

5 OA patients on triamcinolone acetonide immediate release (TCA IR) 40 mg

Study Objective• Characterize PK and HPA axis effects

for 6 weeks following IA injection

PK/PD Study (n=24)3ml IA knee injectionLocation: Australia

10mg

(5)FX006

40mg

(7)FX006

60mg

(7)FX006

40mg

(5)TCA IR

Syn

ovia

l T

CA

(n

g/m

l)

Lower limit of

quantitation

10.1

82.748.6

0.01

0.1

1

10

100

Day 43 Synovial Fluid Concentrations

FX006 10mg

FX006 40 mg

FX006 60 mg

TCA-IR 40 mg

Therapeutic

Concentration

-90

-70

-50

-30

-10

10

30

2 5 8 14 22 29 36 42

FX006 40 mg

TCA IR 40 mg

% C

han

ge in

Seru

m C

ort

iso

l

Time (Days)

Morning Serum Cortisol Levels

Increasing Risk of Adverse Effects

0.01

0.1

1

10

100

0 3 6 9 12 15 18 21 24 27 30 33 36 39 42Time (Days)

FX006 40 mg

TCA IR 40 mg

Pla

sm

a T

CA

(n

g/m

L)

Plasma TCA Concentrations

Lower limit of quantitation

FX006 Phase 2b – Demonstrated Superiority to TCA IR

177 OA patients on FX006

• 3 dose groups of 58 – 60 patients each

51 OA patients on triamcinolone acetonide immediate release (TCA IR) 40 mg

Study Objective• Identify a safe and well tolerated dose

of FX006 which demonstrates superiority to TCA IR in magnitude and duration of pain relief

Ph 2b Design (n=228)3ml IA knee injectionLocation: US, Canada, Australia

Pain measured on 0 – 10 Numeric Rating Scale

• 0 = no pain; 10 = pain as bad as you can imagine

• Baseline index knee pain between 5 and 9

• Primary outcome measure - weekly mean of average daily pain intensity score

• Primary endpoint predicated on demonstrating pain relief with 60 mg at 8, 10 or 12 weeks

Secondary outcome measures

• Pain by WOMAC A (pain), B (stiffness), C (function)

• Time to onset of pain relief

• Responder status

• Patient and clinical global impression of change

• Rescue medication consumption

Treatment groups well balanced

• Gender, race, age, BMI, OA grade by X-ray

• Mean pain at baseline = 6.4 – 6.6

11

10mg

(58)FX006

40mg

(59)FX006

60mg

(60)FX006

40mg

(51)TCA IR

CONFIDENTIAL

FX006 Phase 2b-Weekly Mean of Average Daily Pain Intensity

-4.7

-4.2

-3.7

-3.2

-2.7

-2.2

Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12

LS M

ean

Ch

ange

fro

m B

ase

line

, 0-1

0 S

cale

Weeks Post Treatment

TCA IR 40 mg FX006 10 mg FX006 40 mg

12CONFIDENTIAL

FX006 60mg: PLGA Aggregates May Accelerate TCA Release

13CONFIDENTIAL

-5.0

-4.5

-4.0

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

Wk 0 Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12

LS M

ean

Ch

ange

fro

m B

ase

line

(SE

), 0

-10

Sca

le

Weeks Post Treatment

Weekly Mean of Average Daily Pain Score

TCA IR 40 mg FX006 10 mg FX006 40 mg FX006 60 mg

60mg Aggregates

FX006 40 mg: Significant, Clinically Meaningful Pain Relief

-4.7

-4.2

-3.7

-3.2

-2.7

-2.2

Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12

LS M

ean

Ch

ange

fro

m B

ase

line

(SE

), 0

-10

Sca

le

Weeks Post Treatment

TCA IR 40 mg FX006 40 mg

Note: 2-sided t-test

14CONFIDENTIAL

1-12 weeks AUC Analysis (p=0.0382)

p=0.051 p=0.022 p=0.006p=0.025

p=0.049p=0.047

>1 unit on 10

point scale

FX006 Phase 2b – Summary of Adverse Events

FX006 10 mgN=58n (%)

FX006 40 mgN=59n (%)

FX006 60 mgN=60n (%)

TCA IR 40 mgN=51n (%)

Number of Patients with at Least 1 TEAE¹ 27 (46.6) 33 (55.9) 34 (56.7) 28 (54.9)

Number of Patients with at Least 1 Serious TEAE 0 2 (3.4)* 1 (1.7)† 0

Number of Patients with at Least 1 TEAE Leading to Study Withdrawal

1 (1.7) 0 0 0

Number of Patients with TEAEs by Maximum Severity

Mild 17 (29.3) 20 (33.9) 19 (31.7) 14 (27.5)

Moderate 9 (15.5) 13 (22.0) 15 (25.0) 12 (23.5)

Severe 1 (1.7) 0 0 2 (3.9)

Number of Patients with TEAEs by Maximum Relationship

Not Related 17 (29.3) 24 (40.7) 22 (36.7) 15 (29.4)

Unlikely 3 (5.2) 4 (6.8) 5 (8.3) 4 (7.8)

Possibly Related 3 (5.2) 2 (3.4) 4 (6.7) 3 (5.9)

Probably Related 2 (3.4) 3 (5.1) 2 (3.3) 5 (9.8)

Definitely Related 2 (3.4) 0 1 (1.7) 1 (2.0)

Possibly, Probably, or Definitely Related 7 (12.1) 5 (8.5) 7 (11.7) 9 (17.6)

15

¹ TEAE=Treatment Emergent Adverse Event*Coronary artery disease and stroke – both judged to be not related to drug treatment†Axillary abscess – judged to be not related to drug treatment

CONFIDENTIAL

CONFIDENTIAL 16

FX006 Commercial Opportunity

IMS Sales & Claims Data (85 health plans, 70mm patients ~40% of total medical claims)

• Many OA patients receive IA injections annually

• >3MM patients with OA knee steroid injections (of a total 12MM office visits)

• >1MM patients with OA knee HA injections

• >1MM patients with non-knee OA steroid injections

• Potential market expansion: >10MM other musculoskeletal steroid injections

• Rotator cuff, low back pain, etc.

CONFIDENTIAL 17

FX006 Commercial Opportunity

Potential for premium pricing

• Multiple rounds of payer research covering >70 million lives

• Pain is a major driver to subscriber resource consumption

• Office and ER visits

• Progression to more expensive medicine

• Nucynta® and Cymbalta® average $177 per month; $531/3 months

• Synvisc: average of approx. $500 per treatment (up to every six months)

• Crossing threshold for joint replacement surgery

Focused U.S. sales effort can address relatively few administering physicians

• 60 – 100 sales reps should be able to cover the 9,000 orthopedists and rheumatologists who do > 75% of injections

• Genzyme, now acquired by Sanofi, was U.S. market leader in HA with SYNVISC®, supported by approximately 100 sales reps

Microsphere Manufacturing Process for FX006

Microsphere particles with encapsulated drug uniformly dispersed inside

Green PLGA Red TCA

18

Microspheres are formed through a patented rotating disk atomizer

as shown here

• For Phase 3/Commercial, increasing batch size can be done through process time increase without new equipment

• Flexion CMC team includes deep expertise in PLGA manufacturing and commercial production

CONFIDENTIAL

FX006 – The Potential for Long Term Exclusivity

The Flexion patent applications are based upon narrow, non-obvious specifications that are critical for effective drug delivery

•Lactic Acid:Glycolic Acid ratio - inversion of the release profile

•Polymer Molecular Weight - inversion of the release profile

•Optimum drug load is 22 – 28% w/w

In addition

•Clinical efficacy is achieved in a narrow dose range (between 10 and 50 mg)

•TCA release from FX006 does not adversely affect cortisol production

Potential for patent coverage until 2031

Manufacturing: trade secrets, substantial know-how and exclusive license to patented rotating disk technology add to strong FX006 protection

19CONFIDENTIAL

FX006 Value Drivers

Persistently superior pain relief vs standard of care• Amongst the largest pain relief signals seen in clinical trials

Attractive, potentially differentiated, safety profile

Strong proprietary position

Well-defined registration path using 505(b)(2) and placebo comparator

Familiarity of prescribing physicians with existing IA TCA therapy

Anticipated pharmacoeconomic benefits reflecting durable pain relief

Could compete effectively with all existing IA medicines

20CONFIDENTIAL

Treatment Spectrum

Early-stage Post-operative

Mild

Severe

OA

Pain

Flexion has retained

worldwide commercial

rights to all products

FX006(Sustained release Steroid)Moderate to severe OA pain)

FX005(SR p38

inhibitor)End-stage OA pain

FX007(TrkA

Antagonist)Post-Op Pain

21

Total Joint Replacement

(TJR)

Oral Drugs &Physical Therapy

Steroid Injections

Hyaluronic Acid (HA)

Opioids

CONFIDENTIAL

End-stage

Flexion’s Product Portfolio Spans the OA Pain Spectrum

FX007 – TrkA Antagonist for Post-Operative Pain

Nerve Growth Factor (NGF) is a validated target for reducing pain

• Inhibition of NGF has shown sizable efficacy signal in clinical trials

• Systemic use associated with side effects

• TrkA is the high affinity receptor to NGF; blocking receptor inhibits NGF binding

Acute local tissue administration should avoid systemic side effects

• Transient binding to TrkA vs. complete persistent blockade of NGF

• Planned indication is post-op pain - high unmet need

Unlikely to require formulation in PLGA

Effective in preclinical models of OA and post-operative pain

Next steps:

• Initiate PoC bunionectomy clinical trial H2 2014

22CONFIDENTIAL

FX007 – Commercial Opportunity

Post-Operative pain market – large and valuable

• ~51 million surgeries performed in the United States each year

• Global post-operative pain market was estimated to be $5.9 billion in 2010

Control of post-operative pain is important for patients, physicians and payers

• Impacts recovery from surgery, healthcare cost, functional improvement

Numerous post-operative pain treatments exist but have limitations:

• Inadequate efficacy: > 80% of patients experience moderate – severe post-op pain

• Troubling side effects:

• Respiratory depression

• Increased risk of cardiovascular and gastrointestinal events

• Side effects require additional medications or treatments

23CONFIDENTIAL

Strong Intellectual Property Portfolio

FX006 (SR steroid)

• Formulation, method of manufacture and method of use

• Potential for coverage into 2031

FX007 (SR TrkA antagonist)

• Composition of matter

• Formulation

• Potential for coverage into 2031

Status

CONFIDENTIAL 24

Granted Granted

Published Granted

Published Published

US EU

FX005 (SR p38 inhibitor)

• Composition of matter

• Formulation

• Potential for coverage into 2029

Granted Granted

Published Granted

Leadership

• Michael Clayman MD, Chief Executive Officer- 20+ years of pharma development

Eli Lilly, Advanced Cardiovascular Systems, Chorus

• Neil Bodick MD PhD, Chief Medical Officer- 15+ years of pharma development

Eli Lilly, Chorus

• Fred Driscoll, Chief Financial Officer- 35+ years of pharma/financial experience

Novavax, Genelabs, OXiGENE, Instrumentation Laboratory

Financial Position

Cash 3/31/14 $ 79 millionTotal Shares Outs. 15.6 million

Major InvestorsVCs- Versant Ventures, Soffinova Partners, 5AM Ventures, Pfizer Ventures, Novo VenturesTop 10 Institutional Investors- Jennison, Capital World, Redmile, Fidelity, BlackRock,

JP Morgan, Kingdon, Broadfin, Visium, RA Capital

CONFIDENTIAL 25

Proven Management Team

Early Investors and Board

Ventures

Ventures

CONFIDENTIAL 26

Brad BolzonVersant Ventures

Sam ColellaVersant Ventures

Heath LukatchNovo Ventures

Andrew Schwab5AM Ventures

Michael ClaymanFlexion Therapeutics

Alan MilinazzoInspireMD

Rafaéle TordjmanSofinnova Partners

Elaine JonesPfizer Ventures

Patrick Mahaffy (Chairman)Clovis Oncology

Flexion: Investment Highlights

Novel, Targeted Analgesics – Initial

Focus Osteoarthritis

• Portfolio of three product candidates spanning the OA spectrum

• Worldwide commercial rights to all products

• Lead Product FX006: sustained release, intra-articular steroid for moderate to severe OA pain with demonstrated efficacy

27

FX006: Strong Phase 2b Data, Near Term Path

to Market

• Well-tolerated; amongst largest pain relief signals seen in clinical trials

• Well-defined 505(b)(2) regulatory pathway with expeditious path to market

• First sustained release injectable steroid for OA pain with strong proprietary position

Large, Growing, Unsatisfied Market

• OA pain afflicts ~27M in the United States and current therapies provide limited pain relief, have serious side effects

• Global HA market of approximately $2B for intra-articular OA treatments

• Progressive disease – often leading to total joint replacement

Multiple Potential Near Term Value Inflection

Points

• Multiple clinical milestones for FX006 and FX007 within approximately 12 mos.• FX006 synovial PK study data• FX006 repeat dose safety study initiation• FX006 confirmatory Phase 2b data• FX007 proof-of-concept study data• FX006 Phase 3 initiation

CONFIDENTIAL