Biotech 2006

1
Biotech 2006 Life Sciences A Changing
Prescription
BIO 2006 April 10th 2006
G. Steven Burrill, CEO Burrill Company
2
Burrill Company

• Exclusive focus on life scienceshuman healthcare
  (Rx and Dx),
• nutraceuticals/wellness, agbio, industrial,
  enabling technologies
• Venture Capital Group
• Venture Capitalinvesting across the entire
  spectrum of the life sciences/biotechnology . . .
  over 625 million for investment, raising
  300-500 million for BLSCF III
• Merchant Banking Practice
• Strategic Partnering including licensing,
  research and other collaborations
• Strategic Advisory Services including new company
  formation
• Merger Acquisitions across life sciences
• Spin-outs ranging from products, to research
  divisions to disease area franchises
• Media
• Conferences
• Publications
• Headcount 50 professionals and staff
• Location San Francisco

3
Burrill Venture Capital Funds Under
Management ( millions)

• Burrill Life Sciences Capital Fund III (2005)
  300-500
• Funds Under Management
• BLSCF III (First Close) 110
• Burrill Life Sciences Capital Fund II
  (2002/2003) 211
• Burrill Life Sciences Capital Fund I 302
• Burrill Biotechnology Capital Fund (1999) 140
• Burrill Agbio Capital Funds I II (1998/2001)
  101
• Burrill Nutraceuticals Capital Fund (2000) 61
• Total Under Management at 12/31/05 623

Including substantially invested
reserves/commitments for subsequent financings in
existing portfolio companies
4
Merchant Banking Group Services
Strategic Development

• Early Stage Research to Product Development
  Commercialization
• PG/Taigen
• Wyeth
• ViroPharma/Schering Plough

Spin-Outs Divestitures
Potential Scope of Merchant Banking Group Client
Relationship
5
Burrill Created/Hosted Industry Events
For inquires, contact Thea Schwartz at (415)
591-5477 or tschwartz_at_b-c.com
6
Publishing

• The 2006 Biotech Industry Book
• Life Science Indices (monthly)
• Personalized Medicine
• Stem Cells
• Monthly Quarterly Newsletters China, India,
  Canada, Strategic Partnering/MA
• Burrill Website Online resource for keeping
  up-to-date information about the biotech industry
• Burrill Company is the go to firm for
  industry insight

7
Industry Reports

• The seminal industry report for the last 20 years

To order most recent book visit
www.burrillandco.com
8

• This presentation is available
• for download from our website
• www.burrillandco.com

9
Visit us at BIO Booth 2300
and purchase our book!
10
So whats happened in these 20 years?(By the
wayBiotech started over 10-15 years earlierlate
60s/early 70s so its a 35 year old industry
now!)
11
Were Evolving

• 1986/Then
• Title At the Crossroads
• Industry size 700 Companies
• 150 public
• Market Cap 15B
• Top 5 Companies
• Genentech
• Cetus
• ALZA
• ABI
• Centecor

• 2006/Now
• Title A Changing Prescription
• Industry size 5000 companies
• 500 public
• Market Cap 500B (US only)
• Top 5 US Companies
• Genentech
• Amgen
• Gilead
• Genzyme
• Biogen

12
Themes in 86 book

• At The
  Crossroads
• Science being converted to business
• Products coming to market place
• Are product liability, regulatory reform, patent
  court behavior insurmountable barriers?
• Partner or vertically integrate?
• Acquisitions by pharma desirable?
• How will the industry evolve?

13
Themes in 06 book

• A Changing
  Prescription
• From blockbustersto niche markets
• From genomics, proteomics, and systems biology to
  personalized, predictive and preventative
  medicine (3 Ps)
• From small molecule drugs to MAbs/proteins/stem
  cells
• From reimbursement to payer issues where CMS
  becomes the dominant player
• From a healthcare dominated industry to agbio
  being real and industrial biotech hot
• From a challenging IPO market to MA
• From the U.S. to Chindia, Europe and a global
  industry

14
Conclusions

• 1986/Then
• A time for confidence, not questioning.
• Biotech companies will survive and prosper as a
  unique group, not just subsumed into the pharma
  industry.
• Some of the companies leading today (86) will
  remain industry leaders in the decades ahead.
• The industry will become major contributors to
  the well being and the economy.

• 2006/Now
• A Changing Prescription (the future will be real
  different.)
• 5000 companiesits a worldwide growing
  industry
• Amgen/Genentech will continue as leaders, yet new
  ones have emerged (Gilead, Serono, Biogen Idec).
• It has happened, even more than anticipated, and
  is becoming increasingly important.

• 1986/Then

15
So what are todays take home messages?

• The time is now for life sciences
• Confluence of technologies is changing biotech
  and the healthcare world
• Personalized, predictive and preventative
  medicine is changing healthcare
• Payor/reimbursement world is changing with
  Medicares power (single payors dominate)
• Market opportunities are different today
  (pandemic diseases, memory, obesity, aging, and
  wellness)
• Wellness is a huge growth market
• AgBio is back, animal genomics is ready
• Industrial biotechs time has arrived
• Chindia is hot
• Capital markets worldwide are robust, but
  expensive

16
Industry Overview

• Industry is 30 years old, generating over 85
  billion in revenues
• 5000 companies worldwide, 600 public companies
• Life sciences has a strong performance record,
  even in difficult economic and political times
  outperformed Dow and NASDAQ
• Over 100 products on the market (many gt 1
  billion drugs) 350 biotech drugs are in late
  stage clinical trials (strong pipeline)
• Agbio products are now grown on 200 million acres
  world wide and growing at 20 per year over 1
  billion acres have been planted
• Patents protect product/technology exclusivity,
  rewarding innovation and limiting competition
• Broad applications in healthcare (cure
  provention), food and agriculture, industrial
  (chemicals, fuels materials)

17
Biotechs Globalness Begins Day 1

• Science/technology
• Intellectual property/patents/FTO
• People
• Communications
• Competition
• Capital
• Marketsdiseases know no borders
• Even the smallest biotech is a global player from
  Day One

18
Key Industry Stats
Biotech 2006
Source Burrill Company, Ernst Young
19
Pharma vs. Biotech Industry Market Cap (B)
186
312
1.9x
20
Burrill Select, Amgen,
Genentech vs. Pfizer, Merck
1/1/043/31/05 Performance
Last 12 Months
21
Historical Biotech Market Cap 20002006
BIO 05 to BIO 06
23
22
U.S. Pharma Market Cap (top 5 companies)
-25
Includes BMY, LLY, MRK, PFE, SGP, WYE
Source FBR, Burrill Company
23
Top 5 US Pharma vs. Biotech Market Cap
24
Biotech RD Spending has Outpaced Pharma as a
Function of Market Cap
Cowen Top 100 Biotech Top 10 Pharma
25
so thats the baselineNow, whats really
happening
26
Todays medicine challenge One size doesnt fit
all
27
Pharmacogenomics shapes the healthcare business
in 2000
28
140 Years of Drug Discovery Technology
29
Confluence of Technology/Tools/Knowledge
30
Innovation Gap Getting Wider

31
Drug Development Costs Escalate
Costs are becoming prohibitive
Source Windhovers In Vivo. The Business
Medicine Report. Bain drug economics model, 2003
32
A systems biology approach- follow the pathways
33
Analyzing The Molecular Profiles (Biosignatures)
of Body Functions in Health and Disease
The Molecular Basis of Biological Processes
The Molecular Heterogeneity of Disease
Individual Genetic Variation
Alterations in Disease
Disease Subtypes
Pharmaco- genetics
Disease Predisposition
New Targets for Dx, Rx, Vx
Right Rx for Disease
New Targets for Dx, Rx, Vx
PDx PRx
34
MDx is at the Center of the New Dx World
35
Selected Targeted Treatments

• Personalized cancer vaccines
• Favrille FavId for non-Hodgkin's lymphoma
• Genitope MyVax for non-Hodgkin's lymphoma
• Gleevec (Novartis) - pH CML kinase inhibitor
• Iressa (AstraZeneca) EGFR tyrosine kinase
  inhibitor
• Tarceva (Genentech/OSI) HER1/EGFR inhibitor
• Erbitux (ImClone/BMS) HER1/EGFR inhibitor
• Avastin (Genentech) VEGF/VEGFR inhibitor
• Herceptin (Genentech) HER2 inhibitor
• BilDil (NitroMed) - heart failure in African
  American patients
• Other Semi Targeted Treatments (approved or
  late stage trials)
• Nexavar (Bayer/Onyx) multikinase inhibitor
• Tykerb (GSK) - ErbB-2/EGFR inhibitor
• Enzastaurin (Lilly) - PKC-Beta, AKT/P13 inhibitor

36
Obesity Related Diseases

• Diabetes Costs 98 billion
• 90 of Type II diabetics are obese
• 70 of those at risk are obese
• Heart Disease Costs 8.8 billion
• Stroke
• Hypertension - 4.1 billion
• Doubles incidence of hypertension
• Gall bladder disease 3.4 Billion
• Osteoarthritis - 21 billion
• Sleep apnea more prevalent then diabetes !
• Some forms of cancer

37
Aging . . . Is it a disease?

• About 1.4 million Americans are in their 90s, and
  another 64,000 are 100 years old or older
• Baby boomers represent 30 of the total US
  population
• Per person, seniors consume about five times the
  drugs of their working-age counterparts
• By 2030, 20 of US population will be over 65
  years of age

38
Medicines in Development for Older Americans
some medicines are listed in more than one
category
39
Chronic Disease

• 125 million Americans have 1 or more chronic
  conditions (e.g. congestive heart failure,
  diabetes)
• Chronic diseases account for 75 of all health
  care expenditures
• Current costs for chronic diseases is approaching
  1 trillion
• These expenditures are not delivering what is
  possible

40
Stratifying into risk categoriesDiabetes type 1
Whats becoming possible?
41
What is Driving Personalized Medicine?

• Convergence in technologyscientific advances and
  new technology
• Patient care and rising consumerism
• Payors (of all types) have economic
  incentive Government health policy an global
  spending (e.g. CMS)

42
This Confluence of Healthcare Technology is
bringing us

• Targeted therapies (mutation specific),
  personalized medicine
• Drug/device combinations (drug eluding stents)
• Molecular diagnostics/Algorithm based diagnostics
• Non-invasiveness
• Non-hospital based with constant monitoring
• Increased predictions and prevention

43
thats changing the healthcare economy

• Better outcomes/patients living longer
• Costs going up/more patients treatable
• But, US system leaves 25-45m uninsured/underinsur
  ed
• Consumer healthcare is here to stay (copays ),
  individuals empowered and informed

44
Healthcare costs have been raising for a long time
45
US Healthcare Expenditures vs. Drug Costs
Source US National Health Statistics
46
Healthcare costs are growing much faster than
productivity (revenue per employee)
CAGR3
GM Cannot Compete Healthcare costs per car are
1700 more then Toyota
CAGR10
Source Hewitt Health Value Initiative United
States Census Bureau of Labor Statistics (2002
Productivity estimated based on first 3 Quarters)
47
So, healthcare cost increases are on everyones
agenda-

• Politicians/Congress/White House
• Payors/Reimbursors/Insurers
• Physicians/Providers
• Patients/Consumers
• and patients are empowered, have economic costs,
  and really want to stay well!

48
CMS Becomes Dominate Customer(40 of market in
2008)
2002 Rx Payment Sources (bil)
2008 Projected (bil)
Total 260
Total 162.4
Source 2002 data Health Affairs Volume 23,
Number 1 January 2004. 2008
data Tag Associates estimate.
49

• . . . and whats happening
• to big pharma?
• Putting Biotech into Context

50
Worldwide Global Pharmaceutical Sales
51
by the way, the Global Nutraceuticals Industry
is 196 Billion
Source Nutrition Business Journal/Burrill
Company
52
Despite All Efforts, Total Shareholder Returns
Have Fallen by26 Percentage Points Since 1998
Source IBM Life Sciences Solutions
53
Looking Forward, Patent Exposure is Set to
Increase Significantly
54
Biogeneric Status of Biotech Drugs
55
Manufacturer Reported Serious Adverse Events Per
Fiscal Year


56
Pulled from the Market
Date Approved Drug Name Use Risks Date Withdrawn
2004 2001 Tysabri Bextra Multiple Sclerosis Pain reliever Rare, frequently fatal demyleinating disease of CNS Heart attack/stroke fatal skin reactions 2005 2005
1999 Vioxx Pain reliever Heart attack/stroke 2004
1997 Baycol Cholesterol Severe damage to muscle, that is sometimes fatal 2001
1999 Raplon Anesthesia An inability to breathe normally 2001
1993 Propulsid Heartburn Fatal heart rhythm abnormalities 2000
1997 Rezulin Type 2 diabetes Severe liver toxicity 2000
1988 Hismanal Antihistamine Fatal heart rhythm abnormalities 1999
1997 Raxar Antibiotic Fatal heart rhythm abnormalities 1999
1997 Posicor High blood pressure Dangerous interactions with other drugs 1998
1997 Duract Pain reliever Severe liver damage 1998
1985 Seldane Antihistamine Fatal heart rhythm abnormalities 1998
1973 Pondimin Obesity Heart valve abnormalities 1997
1996 Redux Obesity Heart valve abnormalities 1997
Blockbuster drugs pulled from the market gave
investors concern
57
Number of New Biotech Big Pharma
Collaborations 1993-2005
517
502
425
450
411
384
373
400
350
300
229
228
224
250
180
200
165
150
117
69
100
50
0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Source BioWorld Financial Watch, American Health
Consultants, BioCentury
58
Selected Biotech Partnering Last 12 Months

• Biogen/Protein Design Labs 800M
• Alnylam/Novartis 700M
• Medarex/BMS 530M
• Pfizer/Coley 505M
• Shire/New River 500M
• Plexxikon/Wyeth 372M
• Nastech/Merck 341M
• Avanir/Astra Zeneca 340M
• Cilag/Basilea Pharma 308M
• Pharmasset/Roche 300M
• CancerVax/Serono 278M
• Astex/AstraZeneca 275M
• GSK/Theravance 252M
• Sirna/Allergan 250M
• GenMab/Serono 215M
• Sucampo/Takeda 210M
• Novartis/Avanir 210M

17 Billion Deals in 2005!
59
2005 Partnering Highlights

• Partnering continues to play an important role in
  our industry over 17 B in transaction values
  in 2005
• Significant jump in average total Phase I deal
  values
• From 57M in 2004 to 82M in 2005
• Big Pharma continues to partner early to access
  key technologies, targets and products

60
Selected Biotech MA Last 12 Months

• Medicis/Inamed 2.8B
• Solvay/Fourier Pharma 2.1B
• Pfizer/Vicuron 1.7B
• Shire/TKT 1.6B
• GSK/ID Biomedical 1.4B
• Meda/Viatris 1.0B
• OSI/Eyetech 0.9B
• Genzyme/BoneCare 0.6B
• Danisco/Genencor 0.6B
• Pfizer/Angiosyn 0.5B
• Protein Design Labs/ESP Pharma 0.5B
• GSK/Corixa 0.4B

MA a better exit for investors then IPOs
61
2005 MA Highlights

• Continued generic consolidation
• Sandoz-Hexal/Eon Teva-Ivax
• Japanese big pharma acquisitions
• Sankyo-Daiichi Takeda-Syrrx Sosei-Arakis
• With the 2005 IPO window tight, MA became an
  increasingly attractive exit mechanism
• Big Pharma acquired for single products
  (JJ-Peninsula) and strategic technologies
  (Roche-GlyCart)
• Amgen remained acquisitive with Abgenix
  transaction

62
Selected Significant Mergers Involving Biotechs-
1990-2006
Companies Year Value (M) Novartis/Chiron
2006 5.4B Amgen/Abgenix 2005
2.2 UCB/Celltech 2004 2.7 Amgen/Tularik
2004 1.3 Amgen/Immunex 2001 16.0
Millennium/Cor Therapeutics 2001 2.0
MedImmune/Aviron 2001 1.5 Shire
Pharma/Biochem Pharma 2000 4.0 Invitrogen/Life
Technologies 2000 1.5 Ciba-Geigy/Chiron
1994 2.1 Roche/Genentech (60) 1990
2.1
63
So what does Big Pharma do better than anyone
else?

• Discovery?
• Development?
• Manufacturing?
• Distribution?
• Disease Management?
• Answer ???

64
Wellness Its time has come

• Rising healthcare costs are impacting individuals
• Rising incidence of chronic disease
• Recognition of the importance of genetic
  variation
• Scientific knowledge base for
• Personalization
• Cost effective technologies
• Financial markets beginning to recognize
  opportunity

65
Food and Lifestyle can Influence our Genes and
How they Work

• Diet Gene Interactions
• Exercise Gene Interactions

66
What you eat or what your mother ate can
determine your health!
Genetically identical mice from genetically
identical mothers were fed different amounts of
specific nutrients during pregnancy
67
The Emerging Health Wellness Market
Genotyping
Science Based bioactives
Biomarker monitoring
Prognosis of Predisposition
Diet Functional Foods Medical Foods Drugs
Health Wellness management against a set of
personalized biomarkers
Personalized nutrition
68
Many New Players in an Emerging Market
Agriculture Companies
Food Companies
Biotechs Genomics
Bioactives
Functional Foods
Biomarkers Targets
Health and Wellness Market
Pharmaceutical Companies
Consumer Products Companies
Personal Care Products
Medical Foods
Dietary supplements
Alternative Health DS Companies
79
69
Performance of the Healthy Living and Obesity
Indices
vs. the SP 500 Russell 2000
Obesity
Healthy Living
70
Whole Foods Market (WFMI) Stock Performance
71
And what about the regulators?

• Leadership changes
• Phase III/IV (Pharmacovigilance)
• Drug Safety Review Board (Vioxx, Tysabri)
• GMPChiron vaccine problems, others
• Generics
• Theranostics (Rx/Dx)critical path initiative

72
Number of Products Approved 19802005
73
Biotechs Big Drugs
74
Biotechnology Drugs in Clinical Development
75

• . . . and the marketplace
• is changing too

76
Big new markets

• Obesity/diabetes/metabolic disease
• Alzheimer's/memory
• Anti-aging
• Anti infectives (antibiotic resistance)
• Wellness (preventative/predictive cure)

77
Is the blockbuster Model Really Dead?

• From a strategic standpoint, of meeting the
  needs of our customers, the current blockbuster
• model doesnt work.
• Sidney Taurel, Chairman CEO, Eli Lilly
  Co.
• Drugs Get Smart, Business Week, September 5,
  2005

78
The Personalized Medicine ModelThe right drug
for the right patient at the right time

• Utilizes pharmacogenomics, which benefits from
  the recent advances of genomics/proteomics
  technology
• Reduced development cost shorter development
  time from discovery to launch
• Smaller clinical trials required to prove
  efficacy in target population
• Greater probability of clinical compounds
  reaching market
• Better safety profile
• Treat specific populations based on biomarkers or
  molecular diagnostics/imaging results
• Product focus personalized medicines
  (nichebusters) that do not require
  blockbuster-sized sales to generate attractive
  returns

79
Market Trends and Drivers Revolutionary
Technologiesand Evolutionary Practices
80
Who cares and who will drive change?

• Individuals
• Bearing more of the burden
• Already spend almost 30 of drug spend
• Role of Self Care consumer-driven health care
• HMOs
• Re-insurers
• Corporations
• Baby boomers aging activists!
• Governments (CMS in the US)

81
Ag-BiotechnologyOutlook for the Future
82
The Demands for Agriculture Stay the Same
More food on less land with half the water.
1999-United Nations
83
Market Overview Agriculture
84
Global Area of Biotech Crops 1996 to 2005 by Crop
85
GM Acreage Continues to Grow Mostly in the
Developing World
Increase 2003-2004
Countries
India Spain Brazil China S. Africa Canada Argentin
a USA
400 80 66 32 25 23 17 11
Source Bio 2005
86
Monsanto Relative Performance vs. Merck Pfizer
Pfizer Merck
87
Animal genomics Its time has finally come

• Chicken, Cow sequenced with pig in progress
• Marker assisted breeding now possible
• Traceability and animal sorting creating value
• Comparative genomics brings validity and funding
• Major opportunity in emerging infectious diseases
• SARS, BSE, Avian Flu

88
Industrial Bio is here, finally 2005 was the
Year of the Tipping Point

• Robust technology
• Broad applications
• EU has led White Biotech
• Waiting for market pull
• Concerns over energy addiction

89
In 2005 Many of the Drivers Aligned
Cost of crude oil escalated dramatically !
90
Loss of Energy Security

• Geopolitical unrest wherever oil is produced
• Extreme weather demonstrated the vulnerability of
  supply

91
Growing Worldwide Demand for Energy

• Finite reserves will cost more to extract
• Demand is growing rapidly, much in Pac Rim
  countries, especially China India
• 420 x 1015 currently going to 650 x 1015 btu by
  2030

92
All This Accelerated Policy Changes Worldwide

• Just a few examples
• US Farm and Energy bill
• EU Biodiesel subsidies
• China Sustainable energy
• Malaysia Biodiesel
• In 2004 2005 things began to move quickly

93
The Biorefinery Platform Using Agricultural Feed
Stocks
94
Industrial Biotech is hot

• The limitless potential of IB was there
• The fundamental technology was in place
• Sure it will improve and even enable exotic
  solutions
• But the economics, markets and policies were not
  in alignment
• In 2005 demands for energy pushed IB over the
  tipping point
• More to come - quickly

95

• (China/India)
• Whats happening?
• Impact

96
China Has A Large And Rapidly Growing Economy
Projected Accumulative GDP Growth (2004-2010)
Real GDP in US billions (Based on Purchasing
Power Parity) 2004
2010
U.S.
China
Japan
India
Germany
U.K.
France
Italy
Brazil
Russia
Average 17
Source CIA world Fact book
97
Unprecedented Growth in China Life Sciences
Markets
Total Health Care Spending (US Billion Dollars)
Total Biotechnology Market (US Billion Dollars)

• 5th largest pharmaceutical market by 2010 (Boston
  Consulting Group)
• 3rd largest medical devices market by 2010
  (Goldman Sachs)
• Excellent investment and merchant banking
  opportunities

CAGR 16
CAGR 19
2000
2005
2010
2000
2005
2010
Total Pharmaceutical Market (US Billion Dollars)
Total Medical Devices Market (US Billion Dollars)
CAGR 17
CAGR 19
2000
2005
2010
2000
2005
2010
Source IMS Frost Sullivan EY literatures
search, World Bank Burrill Analysis, Goldman
Sachs, BCG
98
China Life Sciences Strengths

• Low costs in drug RD and manufacturing
• High growth potential in domestic market driven
  by aging population and improved personal income
• Large researcher talent pool with technology and
  industry knowledge and skills
• Strong central and local government support, with
  favorable tax policies and grants
• Special strengths Gene therapy, stem cell
  research, Traditional Chinese Medicine (TCM),
  chemistry services

Sources IMS Global Health
99
Chinas market size for ethical OTC drugs in
USDBillion
Chinas Pharma Market To Become 5 World Wide by
2010

Source Boston Consulting Group
100
China Biopharmaceutical Roadmap
101
India Innovation is Increasing

• State of Innovation
• Innovation historically has been in process
  improvement
• However, there are a growing number of patents
  and publications from government and academic
  labs

-Nature Magazine
102
Findings Innovation stems from both Govt. Labs
and Industry

• The Government of India (GOI) has doubled biotech
  research spending from 175 million from
  1997-2002 to 350 million from 2002 -2007
• RD investments of the top 5 pharma companies had
  crossed 270 million mark in 2004

103
Selected FDA Approved Plants Outside the U.S.
61
60
25
22
9
5
7
Number of Plants
Source Businessworld
104
Capital Markets
105
US Biotech Industry Fundraising ( in Millions)
1999
2000
2001
2002
2003
2004
2005
Q106
Public
IPO Follow-on PIPEs Debt Private VC Other Total
Financing Partnering Total
670 5,805 1,433 1,520 1,084 237 10,749 5
,844 16,593
6,490 12,651 4,061 5,728 2,872 203 32,005
6,901 38,906
440 2,540 1,741 4,848 2,397 9 11,976 7,4
86 19,462
445 979 1,007 5,251 2,688 178 10,548 7,4
96 18,044
456 3,536 2,051 7,170 2,841 294 16,348 8
,933 25,281
1,701 3,388 2,417 8,418 3,733 269 19,927
10,933 30,860
819 4,194 2,376 5,565 3,518 1,114 17,586
17,268 34,854
303 1,522 1,042 5,421 734 115 9,137 6,43
6 15,573
Source Burrill Company
106
US Biotech Industry Fundraising ( in Millions)
Bio 05 to Bio 06
Q106
Q305
Q405
Total
Public
286 1,337 858 2,508 845 176 6,010 3,2
79 9,289
IPO Follow-on PIPEs Debt Private VC Other Total
Financing Partnering Total
168 1,217 533 247 955 524 3,644 7,745
11,389
303 1,522 1,042 5,421 734 115 9,137 6,43
6 15,573
757 4,076 2,433 7,726 2,534 815 18,791 1
7,460 36,251
Source Burrill Company
107
Capital Raised 1980-2005
108
Biotechs Five Cycles Length of Rallies/Droughts
in Months

Droughts Rallies

109
2005 US Biotech IPOs
17 Companies
110
2006 US Biotech IPOs
6 Companies
111
IPO Window Summary 2003-2006 (as of 3/31/06)

• of IPOs Amount Raised Perf. since
  IPO Ups / Downs
• 2003 7 438 M -6
  2 / 5
• 2004 29 1,628 M
  30 14 / 14/ 1acq.
• 2005 17 819 M 21 10 /
  7
• 2006 6 303 M 18
  4 / 2
• TOTAL 60 2,892 M
  16 30 / 29 / 1acq.

Includes over-allotments
112
IPO Valuations
113
IPO Market Capitalization History 2003-2006
114
DJIA, NASDAQ and Burrill Select 2005-Early 2006
115
Burrill Large-, Mid- and Small-Cap 2005-Early
2006
116
Biotech 2006

• The time is now for life sciences
• Confluence of technologies is changing biotech
  and the healthcare world
• Personalized, predictive and preventative
  medicine is changing healthcare
• Payor/reimbursement world is changing with
  Medicares power
• Market opportunities are different today
  (pandemic diseases, memory, obesity, aging, and
  wellness)
• Wellness is a huge growth market
• AgBio is back, animal genomics is ready
• Industrial biotechs time has arrived
• Capital markets worldwide are robust, but
  expensive

• Biotech is a global business
• Be aggressive, be boldthe competition is

117
the next 12 months will be the industrys best!
Biotechs on a roll
118
Biotech 2006 Life Sciences A Changing
Prescription
BIO 2006 April 10th 2006
G. Steven Burrill, CEO Burrill Company