1. To List or Not to List? A Study of the Capital Careers of Acrux and Mesoblast David Blake – Co-editor, Bioshares 23-3-2012 University of Auckland Bioscience Enterprise

2. ASX Listed Life Science Companies – Capital Raised 1999-2011

3. What is a Capital Career? A terminology to address stages in capital requirements Key concept – a capital career must correspond to the aspirations of the owners of the business Capital supply is staged in immature businesses because of multiple contingent events; value accrues with mitigation of technical and regulatory risk, clarification of product and market plans Key concept – managing execution risk, also known as funding risk, is paramount to all other endeavours Securing and replacing the owners of the business is the central task in a capital career Key concept – restricted versus unrestricted owners

4. Comparison ACR and MSB Mesoblast Platform – Novel (No Proven Products) Unrestricted investors Tech license 2004 [Patents - Priority 1999] Phase II uplift No Failure (yet) Broad sweep “Owner-manager” – 1 CEO Manufacturing key plank Multiple IND Filings accepted Recent Funding ($250m) (in exchange for 20% of the firm) Capital history – pre CEPH/TEVA ($117 m) Platform – 505(b)2 Unrestricted investors Time to deal & app.- 12 yrs [founded 1998] Phase III uplift Failure/Discontinuations Tight Product Focus Management changes – 3 CEOs Products on market (licensed out) $100 M dividend paid Capital history ($79 m) [$5+$11.3+$9.8+$30 @ IPO +$22.5] Acrux

5. Acrux (ACR) – Share Price Chart

6. Mesoblast (MSB) – Share Price Chart & Equity Capital Raisings

9. Ownership Comparison No VC history with MSB or ACR MSB IPOd with 24% Insto v ACR with 15% MSB IPOd with 46% Founder/s v ACR with 25% …. MSB now with 20% Insto v ACR with 50% MSB now with 24% Founder/s v ACR with 3% …. MSB now with 20% Partner as Owner v ACR with 0%

10. Conclusion A business will have multiple vintages of ownership – careful management is required Investors are technology agnostic but are ‘true believers’ in expecting income from the sale of goods and services to occur Investors respond to credible* plans backed by credible and intelligent** management Successful managers place a high priority on investor relations *more difficult to produce than you could possibly believe ** quite rare