This document provides an overview of recent equity market performance and trends, including: - Major US indices were largely flat in Q3 but pulled back from peaks in September due to geopolitical tensions. - Healthcare and utilities sectors outperformed while energy and industrials underperformed year-to-date. - Biotech and medtech sectors have significantly outperformed the S&P 500 over the past 10 and 5 years. - Ophthalmology has been an attractive area for M&A and biotech IPOs in recent years.

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2. Equity market outlook
1
n Equity markets in Q3’14 closed largely flat on the previous quarter
n From peak to trough, the S&P has fallen 7% from its all-time high on Sept 19 (2,019) to this past Tuesday’s close
(1,877)
n Despite all indices reaching new highs during the quarter, growing geopolitical tensions, and tapering fears muted
markets in September
n It is difficult to attribute the recent pullback/volatility to specific fundamental drivers as the current trading dynamic
reflects a lack of conviction in an illiquid trading environment
n The VIX is currently at 19 with 20+ believed to impact the equity new issue market
n Although there are $22bn in equity inflows 2014YTD, flows have been consistently negative each month since June
n Investors will be focused on the Q3’14 earning season which officially kicked off this week
Summary

3. Equity market overview
2
13.4%
13.0%
8.7%
7.1%
6.3%
3.2%
0.8%
0.0%
(3.4%)
(4.1%)
(5.8%)
3.1%
Healthcare
Utilities
Transportation
Info. Technology
Consumer Staples
Financials
Telecom
Materials
Consumer Disc.
Industrials
Energy
S&P 500
10
12
14
16
18
20
22
24
Jan-14 Mar-14 May-14 Jul-14 Oct-14
VIX Volatility IndexMax 21.4 Feb 3rd
Last 21.2 Oct. 10th
Min 10.3 Jul 3rd
90%
95%
100%
105%
110%
1/1/14 3/12/14 5/22/14 7/31/14 10/10/14
Source: FactSet, as of 10/10/14 Source: FactSet, as of 10/10/14
Equity market performance, 2014YTD Market volatility, 2014YTD
S&P sector perf. 2014YTD and last
week
Domestic equity fund flows excl.
ETF ($bn)
Performance
Q3'14 2014YTD
Last
week
% of 52-
week high
Dow +1.3% -0.2% -2.7% 95.7%
S&P 500 +0.6% +3.1% -3.1% 94.8%
NASDAQ +1.9% +2.4% -4.5% 93.0%
Dow -0.2%
Nasdaq +2.4%
S&P +3.1%
($3)
$14
$19
$7
$40
$6
($22)
($6)
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Industrials
Q3’14 corporate earnings
54%
25%
21%
66%
10%
24%
Above Meet Below
Revenue EPS
S&P 500 companies reported: 28/500Historical fund flows ($bn)
2008-2012 ($378)
2013 $37
2014YTD $18
Avg. of last 4 weeks ($2)
(2.2%)
0.9%
(6.6%)
(4.2%)
0.5%
(3.1%)
(2.6%)
(4.5%)
(3.6%)
(4.7%)
(5.0%)
(3.1%)
Source: Lipper (weekly and monthly data) as of 10/08/14 Source: FactSet, as of 10/10/14Source: Bloomberg, as of 10/10/14

4. Biotech and medtech trading performance
3
50%
100%
150%
200%
250%
300%
350%
400%
450%
2004 2006 2008 2010 2012 2014
10-year stock price performance
58%
297%
Source: FactSet as of 10/10/14
1 Medtech index consists of medical technology companies traded on North American exchanges with market capitalizations over $1bn
73%
Returns summary
10 yr 5 yr YTD
Medtech1
62%
Biotech
234%
S&P 500
77%
16%
16%
4%

5. Source: FactSet as of 10/10/14
1 Ophth index includes Thrombogenics, Santen, Ophthotech, Aerie, Cooper, Ista, STAAR, and Alimera
2 Diversified / Ophth includes Novartis, Abbott, Roche, Bayer, Regneron, Allergan, Valeant
2-year performance of ophthalmic sector participants
4
75%
100%
125%
150%
175%
200%
10/10/2012 3/5/2013 7/29/2013 12/22/2013 5/17/2014 10/10/2014
Relative stock price performance
+125% +30% +56% +71%
Ophth1
33.4%
S&P 500
33.1%
Diversified /
Ophth2
79.9%
Regeneron Santen
Cooper
Companies
Ophthotech

6. Biopharma and medtech M&A activity has converged
5
M&A transactions
Source: Dealogic, EvaluatePharma, press releases, public filings
Note: Based on US targets only and excludes deals <$50mm. Medtech category excludes diagnostics/tools
1Merck’s ophthalmology assets
10 12
5
9
14
19 18 20 19
16 16 18
23 15
23
18
23
13
31
35 37
25
29
22
18
27
20
24
12
18
0
10
20
30
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Biopharma Medtech
2014 ophthalmology M&A
July $120 million
June $1.2 billion
May $600 million
February $385 million
Aciex Therapeutics Nicox
Sauflon Cooper Companies
Merck1 Santen
Coastal Contacts Essilor

7. Ophthalmology has been an attractive area of investment among biotech IPOs
6
Number of IPOs since 2013 (>$40mm)
52%
26%
9%
78%
40%
9%
56%
16%
67%
39%
Ophthamology Oncology Specialty Anti-infectives Orphan Platform Hematology Cardiovascular Inflammation CNS
IPO performance by sector – Mean offer / current
Source: Company filings, Dealogic, press releases, FactSet as of 10/10/14
6
8
16
6 6 6 5 5 4 4
Ophthamology Specialty Oncology Anti-infectives Orphan Platform Hematology Cardiovascular Inflammation CNS
1.2x1.4x1.8x 1.3x 2.0x 1.3x 1.5x 1.1x 1.9x 1.3x
$577
$468
$1,329
$479
$647
$485 $467 $376
$261 $295
Ophthamology Oncology Specialty Anti-infectives Orphan Platform Hematology Cardiovascular Inflammation CNS
Total $ invested
$83$58$96 $80 $108 $81 $93 $75 $65 $74Average
deal size
Average
step-up
Mean: $538
Median: $474
Mean: 39%
Median: 40%

8. Biopharma is leading an IPO market resurgence
7
IPO activity, 2005-2014 YTD
Source: Dealogic, EvaluatePharma
Note: Excludes IPOs <$50mm in issuance. Medtech category excludes diagnostics/tools.
48
2 2
5 6 7
11
14
0
3
8
4
11
25
62
21
12
4
1
17
5
5 8
1 1 1 2 1 1
7
0
10
20
30
40
50
60
70
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Biopharma Medtech
$585 $1,749 $1,137 $0 $1,217 $657 $389 $771 $2,471
$429 $665 $1,259 $51 $199 $79 $285 $115 $531
Total proceeds raised, 2005-2014 YTD ($mm)
$499
$2,328
$455
$55
$634
$2,960
$138
$1,255
$5,286
$1,891
$5,387
$86

9. Ophthalmic IPO activity
8
(withdrawn)
2000 2002 2004 2007 2010 2013
(withdrawn)
(withdrawn)
09/24/13
$192 / $687
10/25/13
$77 / $228
04/21/10
$72 / $342
01/29/04
$157 / $926
10/07/04
$99 / $331
06/29/02
NA / NA
03/20/02
$2,302 / $9,900
08/22/00
$36 / $154
08/03/00
$76 / $293
07/06/06
€35 / €103
2006
Healthcare IPOs priced / year (2000 to present)1
Source: Dealogic; Note: shaded bubbles indicate companies that have been acquired
1 Includes all lifesciences IPOs > $15mm
Date priced / Size / Post-money market value at IPO (in $ mm):
02/05/14
$58 / $154
03/26/14
$58 / $161
07/24/14
$75 / $267
07/30/14
$117 / $363
2014
50
25
14 8
50 34 35 43
3 9
17 15 12
45
69
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Inspire
ISTA
Oculex
Alcon
AMO
Eyetech
Intralase ThromboGenics
Eyeonics Alimera Bausch +
Lomb
Ophthotech
Aerie
Eleven
AGTC
Ocular
Therapeutix
Avalanche

10. Key success factors observed in recent lifescience IPOs
9
Valuable lead program, sufficiently de-risked with significant market opportunity and ownership retained
Products which also address cost to the system vs. efficacy
Strong management teams led by CEOs with prior public market success
Crossover investors to provide validation as well as support on IPO and in aftermarket
Near-term data / strategic catalysts to answer the “why buy now” question
Extensive interaction with public investors 6 months to 1 year before IPO org meeting
Critical to price appropriately for existing market to ensure strong deal and aftermarket performance
(prudent / attractive cover valuation range)
Potential for competitive M&A takeout
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11. 10
Appendix

12. Investors remain selective and pricing and aftermarket outcomes have been mixed
in recent months
11
Healthcare IPOs since June 2014 (>$40mm)
Source: Dealogic for IPOs >$40mm, Company filings, Factset as of 10/10/14
Pricing
date Issuer
Size
($mm)
Mkt cap
($mm) Filing Range Revised Range
Offer
price
Price
rel to range
File /
offer
Offer /
1-day
Offer /
1-week
Offer /
current Subsector
Priced above the range
07/30/14 Avalanche Biotechnologies Inc 117 363 13.00 - 15.00 16.00 -17.00 17.00 $2 above 21% 65% 37% 76% Biotech
07/17/14 Sage Therapeutics Inc 104 449 14.00 - 16.00 17.00 - 18.00 18.00 $2 above 20% 67% 51% 85% Biotech
06/19/14 Kite Pharma Inc 147 632 12.00 - 14.00 15.00 - 16.00 17.00 $3 above 31% 71% 72% 92% Biotech
06/17/14 ZS Pharma Inc 123 355 15.00 - 17.00 18.00 $1 above 13% 58% 61% 99% Biotech
Priced within the range
10/02/14 Dermira Inc 125 310 14.00 - 16.00 16.00 High end 7% -3% n/a -12% Biotech
08/12/14 Otonomy Inc. 115 325 14.00 - 15.00 16.00 High end 7% 7% -1% 36% Biotech
07/31/14 Loxo Oncology Inc 77 207 12.00 - 14.00 13.00 Midpoint 0% 0% 0% -15% Biotech
07/23/14 Immune Design Corp 60 189 12.00 - 14.00 12.00 Low end -8% 0% 0% 92% Biotech
07/23/14 Intersect ENT Inc 63 248 11.00 - 13.00 11.00 Low end -8% 17% 14% 45% Medtech
06/18/14 Zafgen Inc 110 349 14.00 - 16.00 16.00 High end 7% 23% 23% 10% Biotech
06/18/14 Ardelyx Inc 69 250 13.00 - 15.00 14.00 Midpoint 0% 1% 10% 40% Biotech
Priced below the range
10/01/14 Calithera Biosciences Inc 80 179 13.00 - 15.00 10.00 $3 below -29% -6% n/a -25% Biotech
09/30/14 Vascular Biogenics Ltd 40 119 13.00 - 15.00 6.00 - 6.00 6.00 $7 below -57% -3% n/a 3% Biotech
09/23/14 Vitae Pharmaceuticals Inc 55 139 11.00 - 13.00 8.00 $3 below -33% -5% -5% -20% Biotech
09/17/14 Foamix Pharmaceuticals Ltd 40 129 10.00 - 12.00 6.00 $4 below -45% 4% -7% -15% Biotech
09/11/14 Affimed Therapeutics BV 56 168 11.00 - 13.00 7.00 $4 below -42% -19% -13% -26% Biotech
09/11/14 ReWalk Robotics Ltd 41 134 14.00 - 16.00 12.00 $2 below -20% 113% 135% 142% Medtech
08/05/14 Auris Medical Holding AG 56 169 10.00 - 12.00 6.00 - 6.00 6.00 $4 below -45% 0% 13% -18% Biotech
07/31/14 Marinus Pharmaceuticals Inc 45 110 12.00 - 14.00 8.00 $4 below -38% 0% 1% -19% Biotech
07/30/14 Macrocure Ltd 54 162 13.00 - 15.00 10.00 $3 below -29% -28% -18% -28% Biotech
07/24/14 Pfenex Inc 50 115 12.00 - 14.00 8.00 - 8.00 6.00 $6 below -54% -12% -3% 13% Biotech
07/24/14 Innocoll AG 59 178 13.00 - 15.00 9.00 $4 below -36% 0% -6% -41% Biotech
07/24/14 Ocular Therapeutix Inc 65 267 14.00 - 16.00 13.00 $1 below -13% 1% -1% 10% Biotech
06/24/14 Amphastar Pharmaceuticals Inc 64 304 10.00 - 12.00 7.00 $3 below -36% 25% 39% 56% Biotech
06/18/14 Parnell Pharmaceuticals 50 133 17.00 - 19.00 10.00 - 10.00 10.00 $7 below -44% -24% -20% -49% Biotech
06/05/14 Radius Health Inc 56 232 14.00 - 16.00 8.00 - 8.00 8.00 $6 below -47% 0% 0% 159% Biotech
Mean $74 $239 -18% 14% 17% 26%
Median $62 $198 -24% 0% 0% 10%