February 27, 2008 Massachusetts Biotechnology Council

1. Jonathan P Gertler MD Managing Director Head, BioPharma Investment Banking February 27, 2008 Massachusetts Biotechnology Council

2. The Healthcare Investment Bank • Entire firm focused solely on healthcare • Unmatched domain expertise • Only investment bank with proprietary MEDACorp resource • Top-ranked institutional equities platform • Long heritage as trusted advisor to increasingly sophisticated healthcare investors • Leading healthcare investment banking franchise • Most healthcare equity transactions in 2007 • Best aftermarket performance from 2005 to 2007 • Differentiated origination and execution in both financing and M&A

3. Better Information Leads to Better Advice

4. Leadership in Healthcare Investment Banking Most Active in Equity Capital Raising During 2007 Success Across All Product Types in 2007 ($ in millions) 9 IPOs Most in the industry Leerink IPOs averaged 19% return vs. Non-Leerink average of 0% 8 Follow-ons Raised in excess of $1.6B 9 PIPEs/RDOs Led 5 deals with aggregate value $213.4mm M&A First healthcare company sold to SPAC 6 Lead Managed Private Placements Aggregate value $174MM Multiple Repeat Clients Note: Includes all 2007 life sciences equity transactions greater than $15MM; Full credit to all managers.

5. Superior Aftermarket Performance ($ in millions) All Healthcare Deals Since 2005 - 2007 Ranked by Post-Deal Performance Performance of our deals drives investor confidence Note: Includes all life sciences equity transactions greater than $5MM and firms with minimum 30 deals; Full credit to all managers. As of end of 2007.

6. Top Ranked Institutional Equities Platform • Annual survey for Best Boutique Firmson Wall Street • 730 portfolio managers and analysts at 400 buy-side institutions voted • Named #1 from 2001-2007 in all major healthcare categories • Prior runners-up include: Cowen, Piper Jaffray, Thomas Weisel, Lazard, Jefferies, JMP Securities, Pacific Growth • Market maker in 500+ healthcare stocks • Leader in creating liquidity for emerging growth companies • Corporate venture services • 100% focused on healthcare • 23 professionalscovering 600 institutional accounts • Access to MEDACorp during transactions and after-market • Unique distributioncapabilities • Influence decisions • Insight into latent demand

7. Leerink Swann IPO Performance 2006 - 2007 (US$ in millions, except per share values) Excellent performance in the after-market Strong, consistent trading support

8. 2006 2007 2008 Dow Jones Industrials 16.3% 6.4% -6.7% S&P 500 13.6% 3.5% -7.9% NASDAQ Composite 9.5% 9.8% -13.2% Russell 2000 17.0% -2.0% -9.1% Life Sciences Capital Markets Overview Market Performance Healthcare IPOs – Total Amount Raised (US$ in millions) Mutual Fund Flows Healthcare IPOs – Pricing Relative to Range (US$ in millions) (US$ in millions)

9. Correlation of Stage and Status With Investor Subtype Hedge Funds/Structured Finance Strategic Investor Public Investors PIPE Investors Private Equity Venture Angel Crossover Investors Start –up Pre-clinical Phase I Phase II Phase III Commercial Private Company Public Company

10. Selected Metrics for 2007 IPO’s Leerink Swann IPOs Leerink deals shaded gray

11. Biopharma IPO Pricing and Performance Pricing vs. Initial Filing Range After Market Performance Most recent IPOs listed at the top

12. Recent IPO Characteristics Shaded column represents company’s lead program.

13. Biopharma IPO Step-Up Analysis Average step-up from post-money of last private to IPO pre-money

14. Select Biotech Crossover Rounds Crossover investors focus on late-stage differentiated assets when investing in private securities

15. Biotech IPO and M&A Activity Summary Biotech IPOs: 2006 – 2007 Biotech M&A: 2006 – 2007 M&A deals under $5 billion.

16. Biotech M&A Activity: 2006-2007 Includes deals under $5 billion

17. Biotech M&A Activity: 2006-2007 Includes deals under $5 billion

18. Reverse Merger Overview A "reverse merger" is an alternative method by which a private company gains access to the public equity market: • Three flavors: • Private company “merger of equals” with a public company focused on the same business • Private company merges with a publicly traded shell company (typically with no assets or liabilities) • Private company merges with a distressed public entity that is currently trading based on cash and debt valuation with little value attributed to the actual business • Newco’s management, board of directors and company name is highly influenced by private company • Reverse merger allows a private company to go public typically with more control over outcome than an IPO • The timing, feasibility and costs of a reverse merger process will depend on the profile of the target company (e.g. shell company, distressed company or MOE)

19. Precedent Reverse Merger Transactions

20. Challenges and Caveats • Match stage to financing source • Dilution less critical than capitalization • Transfer of risk without clear quantum accomplishment doesn’t work • Beware the timing of anticipated step-ups in valuation • Public markets are demanding integrated programs and later stage assets • Building for M&A is fruitful with: differentiated discovery/manufacturing, lead program of differentiated capability in unmet need, gap pipeline filler for specific situations, commanding IP, demonstrated commercial uptake • Exits are a multi-step process – company building and leveraging existing public company assets can work in the setting of financing potential and interest, sponsorship and rational valuation