The document discusses the financial landscape of biotech companies from their inception to exit, highlighting how the financial crisis has made capital access more difficult and expensive. It details trends in biotech IPOs and financings from 2004 to 2009, the importance of partnering in the industry, and the role of venture capital as a critical source of funding. Additionally, it explores the impact of global megatrends on biotech opportunities and the economic stimulus provided by various countries to support the biotech sector.

1. Financing of Biotech Companies Inception to Exit: Tailoring Financial Products For The Biotech Industry Moderator: Dr. Simon D. Waddington President & CEO, Abunda Corporation Entrepreneur-in-Residence, Burrill & Company

2. Panelists Mr. Derrik Khoo, CEO ACGT Dr. David Fischhoff, VP Technology Strategy & Dev, Monsanto Mr. Fares Zahir, Director & Head of Research, Khazanah Dr. Pat Gruber, CEO Gevo Mr. David Fong, Chairman Malaysian Venture Capital & Private Equity Association

3. Financial Crisis Impact (on Biotech) Biotech: 30+ years access to relatively cheap capital… Capital markets have been restructured: Resources for small-cap stocks (<$1B) dramatically decreased Buy-side interest/resources reduced (many hedge funds gone, biotech marginalized) VC/private investors - no IPOs for exits Sell-side (investment banks) permanently restructured Capital more difficult to find (more expensive)

4. US IPOs – Not What They Used To Be Source: Burrill & Company Biotech IPOs Completed 1996-2009

5. Coupled With Underperformance * Includes over-allotments ** As of 7/31/09 Source: Burrill & Company Number of IPOs Positive since IPO Negative since IPO Acquired or delisted Amount Raised* ($ Million) Average ∆ % change Since IPO** 2003 7 0 0 7 438 (100%) 2004 29 4 14 11 1,628 (11%) 2005 17 2 7 8 819 (43%) 2006 19 7 6 6 920 1% 2007 28 3 22 3 2,071 (36%) 2008 1 0 0 1 6 (100%) Total 101 16 49 36 5,852 (48%)

6. Growing Influence of Partnering Source: Burrill & Company US Biotech Financings ($m) 2004-2009 2004 2005 2006 2007 2008 1H 2009 Public IPO $1,701 $819 $920 $2,041 $6 $0 Follow-ons $3,388 $4,194 $5,766 $6,311 $1,726 $2,043 PIPEs $2,417 $2,376 $2,027 $1,818 $1,078 $733 Debt $8,418 $5,565 $13,978 $6,569 $2,824 $4,156 Private VC $3,733 $3,518 $4,236 $4,445 $4,175 $2,335 Other $269 $1,114 $425 $611 $294 $56 Public+Priv $19,927 $17,586 $27,352 $21,975 $10,103 $9,321 Partnering $10,933 $17,268 $19,796 $23,365 $20,023 $12,779 Total $30,860 $34,854 $47,148 $45,340 $30,126 $22,100

7. Significant Biopharma Partnering Deals 2009 Pharma/Biotech Roche/PTC Therapeutics $ 1.9 billion Sanofi/Exelixis $ 1.0 billion Merck/Cardiome Pharma $ 700 million BMS/ZymoGenetics $ 1.1 billion Forest Labs/Nycomed $ 600 million Novartis/Portola Pharmaceuticals $ 575 million Wyeth/Catalyst Biosciences $ 500 million Biotech/Biotech Amgen/Cytokinetics $ 650 million Onyx Pharma/S*BIO Pte $ 550 million Celgene/GlobeImmune $ 500 million Biogen/Acorda Therapeutics $ 510 million Cephalon/Immunopharma $ 500 million Glaxo/Concert Pharmaceuticals $ 1.0 billion Glaxo/Chroma Therapeutics $ 1.0 billion Wyeth/Santaris Pharmaceuticals $ 847 million GSK/Idenix Pharmaceuticals $ 450 million Biovail/Acadia Pharmaceuticals $ 395 million Bayer/Ardea Biosciences $ 407 million Source: Burrill & Company

8. Venture Capital – Lifeblood of the Biotech Industry THE SPECTRUM OF PRIVATE (RISK) EQUITY CAPITAL Expansion Financing stage Seed Start-up Early stage Buy-outs, buy-ins Pre-seed Price Risk Idea, concept Proof-of-Concept Market estab-lished Clinical Studies Trade sale, IPO Venture capital M&A Incubators Business angels “ Triple F” (Family, friends & fools) Private equity

9. Biotech Financing Models “ Reasonable” Scenario (“In The Old Days”) Round Pre-money $ In Post-value Source Seed $1M $1M $2M Angels A $4M $6M $10M VCs B $20M $20M $40M VCs Mezz $80M $50M $130M VCs/Mezz IPO $250M $80M $340M Market & 2-3 Corporate Deals ($10-50+M)

10. Which Required Multiple Financing Rounds & Multiple VCs Seed Series-A Series-B Series-C Angel/VC 1 VC 2 VC 3 VC 4 Exit (IPO/Trade sale) Years 1 2 3 4

11. Changing Face of Syndication Seed Series-A Series-B Series-C VC 1 VC 2 VC 3 VC 4 Exit (IPO/Trade sale) Years 1 2 3 4

12. Changing Business Models FIPCO (Fully Integrated Pharma Co.) Research Technology Manufacturing Clinical & Regulatory Sales & Distribution CSO CMO CROs Partnerships Academia, Scientific, Institutions R&D Preclinical Support Clinical Development Manufacturing Sales & Distribution Preclinical CRO VIPCO (Virtually Integrated Pharma Co.)

13. BioGreenTech Opportunity A sector driven by long-term global megatrends Food Security – How provide a growing population with low cost, nutritious, stable food supply on limited land and water Energy Security – Secure supply of energy at economically sustainable prices Global Climate Change – Reducing GHG emissions generated by human activity Sustainability – Reduce environmental impact, ensure social equity, and economic fairness in the production of food, feed, fiber, and fuel. Renewables …and biotech can tackle all of them

14. Example: Industrial Biotech Solutions for Energy and Materials The opportunity – multibillion dollars, rural economic growth  Attracting new kinds of investors (Oil & Gas, Utilities, Local Regions etc) Oxygenates Petrol Diesel Electricity Biomass Bio-monomers Biopolymers Specialty Chemicals

15. Biomass Feedstock is Key Investment Opportunities Increased productivity New Energy Crops Conversion technologies Fermentation Products Carbon sequestration Technology integration & adaption Food Feed Renewable Feedstocks Enhanced Yields Lower Inputs Energy Crops Conversion

16. Global Biotech Financing: Economic Stimulus (Partial List) Country Biotech Economic Stimulus Malaysia $21.5 B for R&D US China $4.81 B in 2009, $4.4B in 2010 for “11 technology projects” $129 B in healthcare infrastructure Norway $2.87 B for biotech industry Taiwan $1.83 B to biotech VC fund UK $1.5 B “fund of funds” Canada $200 M for science and technology RM182m in Second Stimulus Package

17. Regional Issues Capital providers: local & global VCs Partnering with corporates Public (governments, regions) etc What kinds of things are they looking for? Sectors of interest Financial return vs. “strategic” (differences in “perceived” value creation) Softer factors: disciplined approach to value creation; financing to milestones; etc Role of emerging players (oil & gas, utilities etc) What is working/not working?

18. Panelists Mr. Derrik Khoo, CEO ACGT Dr. David Fischhoff, VP Technology Strategy & Dev, Monsanto Mr. Fares Zahir, Director & Head of Research, Khazanah Dr. Pat Gruber, CEO Gevo Mr. David Fong, Chairman Malaysian Venture Capital & Private Equity Association