Howard Lee Ph.D. 李 世 仁 博士 Easy Life Science Management, Inc. July 9, 2011

1. 財團法人亞太金融研究發展基金會 Foundation of Pacific Basin Financial Research and Development Panel Session XVII.  Capital Planning and Capital Market of Biotech Industry 創投(VC)與生技新藥製藥產業的相輔相成共生關係 Howard Lee Ph.D. 李 世 仁 博士 Easy Life Science Management, Inc. July 9, 2011 EasyLife

2. SUMMARY • Bioindustry is a globally recognized main stream growing industry • Venture Capital Fund vs. Knowledge Based Industry • Direct Financing Products/Capital Market Analysis • Taiwan Healthcare Industry Opportunity EasyLife

3. Worldwide consensus：Knowledge-based Industries • US - Barack Obama: bioindustry、new energy、internet-communication、infrastructure • Taiwan - 劉 兆 玄： bioindustry、green energy、telecommunication、infrastructure Early 2009 EasyLife

4. Executive Yuan: six growing focuses in knowledge-based Industry • 生技起飛 biotechnology • 醫療照護 healthcare • 精緻農業 agriculture • 綠色能源 green energy • 文化創意 culture • 觀光拔尖 sightseeing EasyLife

5. Biotechnology Index Chart in past 10 yrs *BTK: AMEX Biotech Index, IXIC: NASDAQ Index, NBI: NASDAQ Biotech Index, DJI: Dow Jones Index Source: Yahoo! Inc. EasyLife 5 二○一四年四月二日

6. SUMMARY Bioindustry is a globally recognized main stream growing industry Venture Capital Fund vs. Knowledge-Based Industry Direct Financing Products/Capital Market Analysis Taiwan Healthcare Industry Opportunity EasyLife 6 二○一四年四月二日

7. Innovative Sourcevs. Biotech Industry Government University Research Institute Hospital • Non-profit organization • Supply 85% innovative sources • Cradle of biotech industry • Death of Valley • Professional supports：incubation center、tech transfer dept.、evaluation corp. • VC、Buyout fund、PE fund • Profit organization • Connection w/ financial industry • Connection w/ capital market • Connection w/ global biotech industry cluster Biotech Industry EasyLife 7 二○一四年四月二日

8. Across Death of Valley Firms play a key role in creating value from biomedical ideas by finding opportunities for value creation and raising funding based on the promise of value capture EasyLife

9. Venture Capital Fund vs. Knowledge Based Industry EasyLife

10. Venture Capital Venture capital may be regarded as an equity investment where investors expect significant capital gains in return for accepting the risk they may lose all their equity EasyLife

11. VC Fundvs. Direct Financing Direct Financingvs. Indirect Financing • Direct Financing(involve in corp. management) - Equity Investment • Indirect Financing(NOT involve in corp. management) - Loan、Grant、Tax Incentive UniMed

12. SUMMARY Bioindustry is a globally recognized main stream growing industry Venture Capital Fund vs. Knowledge-Based Industry Direct Financing Products/Capital Market Analysis Taiwan Healthcare Industry Opportunity EasyLife 12 二○一四年四月二日

13. Capital Market and Related Players Private Market Public Offering Market Public Security Market VC IPO Follow-on PIPEs Debt [Investment Bank] [VC Fund] [Hedge Fund] [Mutual Fund] M&A , Consolidation [Buy-out Fund] [Private Equity Fund] EasyLife

14. Corp. vs. Capital Market BIO€ QUITY Money Distribution in Capital Market Mutual Funds (Hedge Funds) Private Equity Funds Buy-out Funds VC Funds (Angel Fund) EasyLife 14 二○一四年四月二日

15. Capital Market Status decides Industry Type • Large long term bio fundDrug Industry • Small short term bio fundMedical Device Industry • Small flexible Investment moneydiversified small and medium enterprise in biotech industry EasyLife

16. Drug vs. Medical Device • High risk, high return • Need long term money • Need large smart money • IPO vs. M&A Biotech Drug Development HIGH Total Return Medical Devices LOW LOW HIGH Risk • “UnMet Need” • Low risk, low return • Early liquidity • High IRR • Early distributions • IPO vs. M&A EasyLife 16 二○一四年四月二日

17. Drug Development and Approval Process • It takes 11 years on average for an experimental drug to travel from lab to medical chest. • Only 5 in 5,000 compounds screened in preclinical testing make it to human testing. • 1 of these 5 tested in people is approved. Expedited review: Phase II and III combined to shorten approval process on new medicines for serious and life-threatening diseases. EasyLife 17 二○一四年四月二日

18. Taiwan Biotech Industry : small & medium enterprise with flexibility 2009 Taiwan Biotech Corp. Allotment Source：MOEA經濟部生物技術與醫藥工業發展推動小組 2010 EasyLife 18 二○一四年四月二日

19. Taiwan TSE「Biotech Healthcare」Sector-18 Listed Pharma：中化製藥(資本額NT$29.81億元)、永信藥品(資本額NT$25.37億元)、生達製藥、杏輝藥品、旭富、懷特新藥(資本額NT$9.42億元)、台耀、中化生技 Reagent：亞諾法 Drug Store Channel：美吾華 Functional Food：葡萄王、景岳 Medical Device/Channel：五鼎、東貿、雃博、華廣 Exercise Instrument：必翔、喬山 *Daily Trading Volume：200k~4,000k shares EasyLife 19 二○一四年四月二日

20. Taiwan OTC「Biotech sector」- 33 Listed Pharma/Functional Food：東洋藥品、濟生、晟德、南光、中天、天良、健喬信元、生泰、永日、杏昌、德英 Healthcare Service：盛弘、大學光學、訊聯、KY馬光 CRO/Reagent：進階、聯上 Marketing Channel/Functional Food：弘如洋、友華、加捷、天騵 Medial Device/Channel：精華、寶利徠、合世、百略 、紅電、邦拓、聯合骨科、晶宇、太醫、優盛、泰博、曜亞 *Daily trading volume：50k~4,000k shares EasyLife 20 二○一四年四月二日

21. SUMMARY Bioindustry is a globally recognized main stream growing industry Venture Capital Fund vs. Knowledge Based Industry Direct Financing Products/Capital Market Analysis Taiwan Healthcare Industry Opportunity EasyLife 21 二○一四年四月二日

22. 台灣生技起飛鑽石行動方案Taiwan Bioindustry Take-off Action Plan Executive Yuan approved on 10/7/2009 SIC BVC 資料來源：行政院科技顧問組 22 二○一四年四月二日

23. 台灣生技起飛鑽石行動方案Taiwan Bioindustry Take-off Action Plan • Direct and Proactive- BVC (生技創投基金) • Indirect and Passive- TFDA - SIC (生技整合育成中心) - Integration of research Institutions (經濟部產業化研發中心) EasyLife 23 二○一四年四月二日

24. Global Pharmaceutical Market Forecast Sales Europe27% North America 41% Emerging Markets 13% Japan 11% Rest of World 8% • * Russia 2013 estimate based on September 2008 forecast • Source: IMS Health, Market Prognosis

25. Taiwan Bioindustry Opportunity Taiwan Japan China US • Taiwan is in critical position in between three largest markets in the world EasyLife 25 二○一四年四月二日

26. Howard Lee, Ph.D.howardlee@silverbm.com EasyLife