Diligence Issues / Growth By Acquisition Strategy OVERVIEW - - PowerPoint PPT Presentation

“Diligence Issues / Growth By Acquisition Strategy”

www.canaccordadams.com

OVERVIEW PRESENTATION

Boston – New York – San Francisco – Houston – Chicago – London – Vancouver – Calgary – Toronto – Montreal

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Launched in January 2006 with the merger of Canaccord Capital and Adams Harkness Publicly listed on both the Toronto Stock Exchange as well as London’s Alternative Investment Market 2007, 577 completed transactions (201 lead-managed equity) with a deal value of approximately $42 billion 53% employee owned Able to list companies on seven exchanges in three countries Significant footprint in the Life Sciences

The Ca The Cana naccord Adams Platform ccord Adams Platform

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Global al Pres Presenc ence

The Ca The Cana naccord Adams Platform ccord Adams Platform

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$0 $100 $200 $300 $400 $500 $600 $700 $800 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Re Revenue ( ($mm)

• $20

$0 $20 $40 $60 $80 $100 $120

Ne Net I t Income me ( ($mm) mm) Revenue ($mm) Net Income ($mm)

The Ca The Cana naccord Adams Platform ccord Adams Platform

Ca Cana nacc ccord Ca d Capital’ l’s F Financial Rec ial Record

Note: Excludes one-time charges

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600 com compan anies cov ies covered 67 research an research analysts alysts 8 focus focus sector sectors #1 #1 ranke ranked re rese searc arch

StarMine, Bren arMine, Brendan dan Wood, Wood, Thoms Thomson Exte Extel

Freq Frequen uent me media a dia appearan ppearances ces

CNBC, Bloom CNBC, Bloomberg berg

Over er 1, 1,50 500 i 0 insti stituti utions cov ns covered 100+ 0+ traders, sales/tra traders, sales/traders & ers & marke rket make makers rs Market makin rket making

70 700 com 0 compan anies ies 7 ex 7 exchan change ges

Sales sp les specialists ecialists by geo by geography an raphy and d indu industry stry Ex Experienc perienced private c d private capital group pital group On One in e integr tegrat ated t ed team 80 80 inve investme ment nt ba bank nkers 2007 tr 07 tran ansaction saction exper experien ence ce

57 577 total tran 7 total transaction ions 20 201 lead or co-lead managed 1 lead or co-lead managed equity tran equity transaction ctions $4 $42B in deal value 2B in deal value

Investment Banking Research Sales & Trading

The Ca The Cana naccord Adams Platform ccord Adams Platform

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JSB JSB-

• Partners: Company Overview

Partners: Company Overview

global partners in life science transactions

2008 2008

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Confidential Confidential

Boston Munich Boston Munich

JSB JSB-

• Partners: Adding Value in Product Collaborations

Partners: Adding Value in Product Collaborations

OUR FOCUS:

• Transaction advisory firm with broker-dealer license serving life science companies
• Primary business: product partnering and licenses
• Expertise in running sell-side product auctions

WHO WE ARE:

• Senior team with broad operating experience, providing leverage to management
• Global presence (US, EU, Asian) and deep industry relationships

WHAT WE BRING:

• Track record of successfully closing product deals and M&A

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Confidential Confidential

Boston Munich Boston Munich

100 25 10 4 1

Case Study: Phase I Obesity Compound, Large Pharma Case Study: Phase I Obesity Compound, Large Pharma

Teaser CDA Indicative Offer Term Sheet Close deal Client rNPV Offered terms 5X 4 of top 10 Pharma

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Confidential Confidential

Boston Munich Boston Munich

JSB JSB-

• Partners: Adding Value in Product Collaborations

Partners: Adding Value in Product Collaborations

OUR FOCUS:

• Transaction advisory firm with broker-dealer license serving life science companies
• Primary business: product partnering and licenses
• Expertise in running sell-side product auctions

WHO WE ARE:

• Senior team with broad operating experience, providing leverage to management
• Global presence (US, EU, Asian) and deep industry relationships

WHAT WE BRING:

• Track record of successfully closing product deals and M&A

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Confidential Confidential

Boston Munich Boston Munich

Why JSB Why JSB-

• Partners?

Partners? … … A Successful Transaction A Successful Transaction

• Senior partners manage the project, no delegation
• Global reach – representation in the US, EU, and Asia
• Not only financial expertise, but also extensive bio-pharma industry experience
• Personal contacts with decision makers with both strategic and financial buyers
• Empower the seller by leveraging time and competition
• Complement internal BD resources to manage the surge in capacity
• Track record of success

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Confidential Confidential

Boston Munich Boston Munich

Munich Munich Boston Boston

JSB-Partners GmbH Emil-Geis Str. 4 D-82031 Grünwald Germany

• T. +49-89-64948840
• F. +49-89-64948844

JSB-Partners LP 30, Monument Square Concord, MA 01742 USA

• T. +1-978-318-9799
• F. +1-978-318-6966

mgouy@jsb-partners.com upessara@jsb-partners.com wstoiber@jsb-partners.com kmay@jsb-partners.com tbunt@jsb-partners.com mwfarley@jsb-partners.com tsjohnson@jsb-partners.com akazimi@jsb-partners.com rpage@jsb-partners.com msteiner@jsb-partners.com www.jsb-partners.com

Global Presence Global Presence

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Material Presented for Discussion September 2008

Crosstree Capital Partners Overview – Clinical Development Services

Crosstree Capital Partners Overview

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Crosstree Capital Partners Overview

Exclusive Sales Acquisitions Private Capital Raises Strategic Advisory Fairness Opinions / Valuations

• Crosstree advises shareholders in sales, mergers and divestitures
• Strengths - Our deep industry knowledge and extensive industry contacts

allow for a highly efficient and confidential transaction process

Service Capabilities Target Size

• Crosstree offers equity and debt capital raising advisory to middle-market

companies

• Strengths – Our bankers have structured numerous complex transaction

structures, from venture capital to senior bank debt

• Crosstree provides assessment of strategic alternatives for companies

considering new opportunities and threats

• Strengths – Our bankers have extensive experience in all facets of corporate

finance; we always strive to provide objective, unbiased advice

• Crosstree can perform transaction-related fairness opinions and general

valuation projects

• Strengths – Two of Crosstree’s founders are CFA charterholders, a

designation focused on equity and enterprise valuation

• Crosstree advises institutional and strategic investors pursuing platform, add-
• n and strategy re-defining acquisitions
• Strengths - Our comprehensive coverage of niche industry subsectors

provides powerful insight into possible acquisitions

• $10 - $250 MM

Enterprise Value

• $5 - $50 MM
• Case-by-case
• Case-by-case
• $10 - $250 MM

Enterprise Value

Crosstree Capital Partners Overview

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Crosstree Capital Partners Overview

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Discovery Development & Validation Market Launch

Pre-Clinical Phase I – III Phase IV

ADME/ Tox Animal Models Pharmacokinetics Pathology Phase 0 Technology Health Economics Medical Communications Laboratory Services Adverse Events Outcomes Radioanalysis Genetic Toxicology Neuropathology Patient Registries Online Training Electronic Regulatory Submissions Data Management Monitoring Registries In-Vitro Bio-Informatics Clinical Project Management Staffing Medical Writing Non-Clinical IT Clinical IT Micro- Dosing IRB Phase I Phase II Phase III Recruiting SMO Network ECG Imaging EDC Database CTMS IVRS IRS Regulatory Safety Multimedia Post Marketing Surveillance ePRO Disease Burden Pricing Support Economic Evaluation Drug Interaction Pharmacodynamics Bioavailability Bio-Safety Testing Analytical Bio-Analytical Medical Device CRO

Crosstree Capital Partners Overview

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Crosstree Capital Partners Overview

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Medicinal Chemistry Chemical Synthesis Combinatorial Chemistry Chiral Chemistry Analytical Services Preformulation Development Stability Testing/ Storage Qualification Services QC/ Microbiology Testing Regulatory Support API Development BCP Manufacturing Pre-Clinical Manufacturing Clinical Trial Manufacturing Scale Up Services Adverse Event Reporting API Manufacturing Scale Up/ Pilot Plant Bioprocessing Protein Manufacturing Peptide Manufacturing Protein Synthesis Protein Purification Peptide Synthesis Peptide Purification Fermentation Cell Culture Validation Services Validation Services Secondary Manufacturing Clinical Trial Randomization Clinical Trial Kitting Clinical Trial Labeling Clinical Trial Distribution Clinical Trial Supplies Distribution Lyophilization Contract Labeling Contract Packaging Packaging & Labeling Logistic Services Charecterizaion Services Method Development Formulation Development Drug Delivery Development

Discovery Development & Validation Commercial Services

Warehousing/ Storage Clinical Trial Packaging Chemistry Services Fill/ Finish Product Development Primary Manufacturing Sterile Fill/ Finish Finished Dosage Form

Crosstree Capital Partners Overview

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Crosstree Capital Partners Overview

DIAGNOSTIC SERVICES

• Routine diagnostic testing
• Esoteric testing
• Diagnostic imaging

DIAGNOSTIC LABORATORIES

• Central laboratories
• Reference laboratories
• Specialty laboratories
• Core laboratories
• Imaging core laboratories
• Cardiovascular core

laboratories LIFE SCIENCES TOOLS & CONSUMABLES

• Analytical Instruments
• Chromatography
• Spectroscopy
• NMR / IR, etc.
• Molecular Biology Tools & Reagents
• Genomic tools and reagents
• Protein Analysis
• Micro array technologies
• Chemistry Based Reagents
• Lab Consumables

IN VITRO DIAGNOSTIC PRODUCTS

• Immunodiagnostics
• Microbiology testing
• Molecular diagnostics
• Point of care testing

IN VITRO DIAGNOSTIC INSTRUMENTS AND CONSUMABLES

• Automated immunoassay
• Clinical Chemistry
• Genetic Testing
• Molecular diagnostics
• Reagents
• Collection devices

IN VIVO DIAGNOSTIC PRODUCTS

• Contrast media
• Film

IN VIVO DIAGNOSTIC INSTRUMENTS

• Radiography
• Mammography
• Sonography
• Magnetic resonance imaging
• Nuclear Imaging
• Imaging enabling tools

CLINICAL DEVELOPMENT SERVICES

• Contract research organizations
• Site management organizations
• Clinical recruiting
• Trial management systems

PRE-CLINICAL DEVELOPMENT SERVICES

• Discovery research services
• Bio analytical services
• Chemistry services
• Pre-clinical pharmacology
• Combinatorial chemistry, screening

and optimization

• Target selection and validation

CONTRACT SALES AND MARKETING

• Contract sales organizations
• CRM software providers
• Educational services

CONTRACT MANUFACTURING ORGANIZATIONS

• Pharmaceutical packaging and

supplies

• APIs/Bulk pharmaceuticals and

chemicals (APIs and BPCs)

• Finished dosage forms (FDFs)
• Specialty pharmaceuticals

Crosstree Capital Partners Overview

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Crosstree Capital Partners Overview

Current Engagement Prior/ Closed Engagement

M&A Overview

www.canaccordadams.com

Boston – New York – San Francisco – Houston – Chicago – London – Vancouver – Calgary – Toronto – Montreal

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Biotech M&A Review

Key Life Sciences Trends Driving M&A Dialogue

Focus of drug development shifts from organs to molecular pathways Dramatic expansion in number of potentially “druggable” proteins

R&D Geographical Diversification Large-Cap Pharma Regulatory / Political Financial Clinical Diversification

Worldwide diversification of assets and customers Pharma patent expiries and large stockpiles of cash Pharma buying biologics capabilities: Organon, CAT, MedImmune, Serono, GlycoFi, and Sirna Increased regulatory / political pressure (e.g. FDA’s focus on post-approval studies) Potential shifts in the ways drugs are tested, approved, marketed, and reimbursed – everything is on the table Burn rates accelerating Desire of innovator companies to retain downstream economics Diversification of clinical development risk

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Biotech M&A Review

The IPO Market Continues to be Selective

While 2007 saw an increase in pre-money equity valuations, most of the companies can be considered specialty pharma or later stage life sciences companies Only late stage biotech companies are accessing the public markets through an IPO Only Sirtris and Amicus priced in 2007 with Phase II data Investors want to fund companies with meaningful catalysts within six to twelve months of IPO pricing M&A is viewed as a viable exit alternative to an IPO financing (Agensys, NovaCardia, Ilypsa, Domantis, Syntonix, Corus, GlycoFi) Increased valuations driven by marketed products Investors favoring less risky, later stage opportunities Near-term milestones are essential Robust M&A environment – a viable alternative

Over $60 Billion Dollars of Lost Sales

Part Partner ner 200 2007A 7A 20 2008 08E 2009 009E 201 010E 0E 201 2011E 1E 20 2012E 12E Key P Paten tent Expiry $2.18 $2.30 $2.45 $2.42 $2.11 $1.81 Lipitor, Caduet, Viagra, Detrol, Geodon, Xalatan $7.22 $8.06 $8.42 $9.09 $8.52 $8.35 Plavix, Taxotere $4.20 $4.50 $4.80 $4.96 $4.58 $4.10 Seroquel, Crestor $3.21 $3.30 $3.72 $4.00 $4.45 $4.02 Cozaar / Hyzaar, Singulair $3.52 $3.45 $3.51 $3.34 $3.07 $3.22 Effexor, Prevnar, Protonix $1.38 $1.68 $2.00 $2.28 $2.34 $2.16 Plavix, Avapro $3.55 $3.95 $4.45 $4.85 $5.16 $4.17 Zyprexa EPS E Esti timates tes

Source: Wall Street Research

Biotech M&A Review

Large-Cap Pharma Companies Face Earnings Gaps

$1 4.4 $7.0 $1 7.9 $30.6 $26.4 $1 6.5

$0 $5 $10 $15 $20 $25 $30 $35 $40 2003 2004 2005 2006 2007 2008 YTD

Aggreg egate T e Transaction V Value ( e ($bn) Aggregate Transaction Value Me Merger and Acquisition Acti rger and Acquisition Activity in the Biotech Secto vity in the Biotech Sector

Source: SDC and Company press releases Notes: Excludes transactions less than $50 million or deals with undisclosed values 2008 YTD as of 10/22/08

Biotech M&A Review

M&A Activity

Therapeutic Area Stage of Development

Oncology 27% Infectious Disease 19% Immunology 16% Respiratory 8% Opthalmology 3% Genito-urinary 2% Other 25% Pre-Clinical 17% Phase I 13% Phase II 21% Phase III 19% Marketed 30%

Source: SDC and Company press releases Notes: Excludes transactions less than $50 million or deals with undisclosed values from 2005 – 2008 YTD

Biotech M&A Review

Overview of Targets

Bolt-On vs. New Therapeutics Average Premia Paid

25.1% 43.2% 62.5% 66.8%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2005 2006 2007 2008 YTD Range 30- 30-Day P Premia

Bolt-On 89% New Therapeutics 11%

Source: SDC and Company press releases Notes: Excludes transactions less than $50 million or deals with undisclosed values from 2005 – 2008 YTD as of 10/22/08

Biotech M&A Review

Premia Paid have Increased

Source: Company filings and press releases Notes: Transaction value in millions of $USD

Acquiror / Target Strategic Rationale Date Announced Transaction Value

$725 $8,493 04/22/08 04/10/08

Significantly enhances GSK’s metabolic, neurology, immunology, and inflammation research efforts by establishing a presence in the field sirtuins, a recently-discovered class of enzymes that are believed to be involved in the aging process Strengthens Takeda’s global oncology portfolio, led by Millennium’s flagship product Velcade, and further enhances its pipeline Expands Takeda’s global pipeline in GI, adding a novel anti-aplha4beta7 antibody and an oral CCR9 inhibitor for treatment of IBD

$338 05/28/08

Significantly enhances BMY’s development and commercialization capabilities to bring new treatment options for patients Adds to BMY’s portfolio of clinical programs

$300 06/16/08

Broadens MRX’s aesthetics portfolio pipeline with LipoSonix’s body contouring technology Provides access to the U.S. aesthetics market sooner with new technology

$567 06/08/08

Broadens HOLX’s range of diagnostic product offerings, and enhances the revenue and earnings growth potentials Better positions HOLX to take products quickly and effectively to market

$581 07/15/08

Enhances VPHM’s pipeline with a replacement therapy for patients with hereditary angioedema Allows VPHM to enter a therapeutic market that is in need of more treatment options

$3,261 08/12/08

Expands R&D pipeline, especially in life-enhancing plasma-derived therapies and integrates manufacturing with greater efficiency Creates a combined company with one of the broadest portfolios in the plasma-derived therapeutics industry

Biotech M&A Review

Overview of Recent M&A Activity

MARKET UPDATE

28 Project Liferay

MARKET UPDATE

29 Project Liferay

MARKET UPDATE

30 Project Liferay

MARKET UPDATE

31 Project Liferay

MARKET UPDATE

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Panel Discussion