1. Venture Healthcare – Industry Update JLABS Presentation December 2 2015 Jon Norris, Managing Director, SVB

2. Jon Norris - jnorris@svb.com2  Manage West Coast Healthcare Relationships for SVB across the SVB Platform, including  Fund of Funds (Investment as LP)  Direct Equity (Co-Investments and Rights to Invest)  Commercial Bank (Venture/Mezzanine Debt, Asset-based Debt, New Fundings)  Equity Financing Strategy for Early Stage and Venture-Backed Companies  Industry Thought Leadership Jon Norris: Managing Director, SVB Capital Jonathan Norris Managing Director, Healthcare Silicon Valley Bank Mobile 650.575.1377 jnorris@svb.com Twitter: @jonnysvb  Publications  Trends in Healthcare Investments and Exits (2015)  A Year of Dazzling Returns: 2014 Healthcare Investments and Exits (2015)  Trends in Healthcare Investments and Exits (2014)  Strong Momentum in Healthcare (2013)  First Mover Advantage (2012)  Continued Rebound (2012)  Trends in M&A (2011)  Bringing Home the Bacon (2010)

3. Jon Norris - jnorris@svb.com3 What Are We Talking About Today? 1 2 3 4 Venture Capital Financing Overview/Fundraising Who Are The Most Active Investors in BioPharma Deals? *What Role Have Cross Over Investors Played? M&A and IPO Trends in Venture Backed BioPharma Companies What Do We Expect for 2016?

4. Jon Norris - jnorris@svb.com4 2000200120022003200420052006200720082009201020112012201320143Q2015 Total VC Dollars ($B) $99$38$21$19$22$23$27$31$30$20$23$28$27$30$50$47 Biopharma 4%9%15%19% 16%17% 15%19%17% 16%15%12% Device 2%5%9%8% 10%11%12%11%13%10% 9%7%5%4% US Venture Investment (Through 3Q’15) Source: PricewaterhouseCoopers, and SVB proprietary data $99

5. Jon Norris - jnorris@svb.com5 Source: PricewaterhouseCoopers, Thompson Reuters, and SVB proprietary data US Healthcare: Venture Dollars Invested and Raised 2015 HC Fundraising Thru Q3 Almost Exceeds Full 2014 Numbers $ Invested into Companies will be a new high for HC

6. Jon Norris - jnorris@svb.com6 US Venture Series A Financings Source: SVB proprietary data, VentureSource, Pitchbook and CB Insights Biopharma CVC % 22%30%28% Median/Avg. Series A ($M) $6 / $10$10 / $19$7 / $11 201220132014 Total Dollars Invested ($M)VC OnlyCorporate VC in Syndicate

7. Jon Norris - jnorris@svb.com7 Q3 ‘15 Bio Financing Update Q3 ‘15 Biotech Update: Top 10 VC Equity Rds 4 Deals raising >$100M rounds in Q3 No deal smaller than $75M 8/10 Deals w/ Cross Over participation; 8/10 in Q2 too 4 Series B, 3 Series A, 3 Series C 5 Oncology, 3 TGP, 2 Rare/Orphan 4/10 OUS – 2UK, Swiss, Netherlands What is Happening in Q4???

8. Jon Norris - jnorris@svb.com8 Biopharma Pre Money Valuations in Private Companies 2013 – 3Q 2015 Data Courtesy: SVB Analytics Proprietary Data

9. Jon Norris - jnorris@svb.com9 Largest Biopharma Series B Venture Rounds and Step-up Trends (Q1 – Q2 2015) If no Crossover participation, Median Series B step-up is 25% With Crossover participation, median Series B step-up is 78% with a wide range of 30% to 154% RA Capital and Wellington were the most active investors in the largest 2015 Series B rounds, with 4 investments each Source: CB Insights and SVB proprietary data

10. Jon Norris - jnorris@svb.com10 IPOs = VC backed IPOs raising > $25M IPO Performance of Crossover Backed Companies vs. Peers (2013 – 1H 2015) Median pre-money valuations were 88% higher than peer group Median dollars raised at IPO were 60% higher than peer group Median value, 9 months after IPO, was 15% higher than IPO price; Average value was 45% * higher than IPO price Source: CB Insights and SVB proprietary data *Calculation excludes one outlier (1,828%)

11. Jon Norris - jnorris@svb.com11 VC-Backed Healthcare IPOs and Big Exit M&A (2005- Q3 2015) M&A = Pvt. VC Backed M&A >$50M Upfront for Tools/Dx & Device & >$75M Upfront for Bio IPO = VC Backed IPO raising >$25M Source: Investment bank reports, VentureSource, PitchBook, press releases, and discussions with life science professionals 20052006200720082009201020112012201320143Q2015 Big Exit M&A 1920241722283536274335 VC- Backed IPOs 3229212312711378348

12. Jon Norris - jnorris@svb.com12 Potential Distributions* From VC-Backed IPOs and M&A (2005 – Q3 2015) Source: Investment bank reports, VentureSource, press releases, CB Insights, and discussions with life science professionals 2015: Projected numbers outpace 2013 and approach last year’s record returns

13. Frazier Life Sciences Retreat Biopharma VC backed Exits by Quarter 2013- Q32015 Q1Q2Q3Q4 Total 2013IPO31011832 M&A334414 2014IPO2412171366 M&A346114 2015IPO11139 33 M&A746 17 Q3: another 6 M&A to exceed 2014 full year numbers – now at 20 in Q4 9 VC backed IPOs so far in Q4 – discounted IPO new norm? Source: CB Insights, press releases, and SVB proprietary data 13

14. 14Jon Norris - jnorris@svb.com Biopharma VC-Backed IPOs by Stage (2012 – 3Q 2015) Year201220132014Thru 3Q 2015 Total Pre-Clinical 119617 Phase I 0820735 Phase II 312261556 Phase III 686424 Dev Stage - Veterinarian 02002 Commercial 01517 Total 10326633 Source: CB Insights, press releases, and SVB proprietary data 2.1x 3.2x 44% of early stage IPOs in 2014 were Pre-Clinical or Phase I 39% of early stage IPOs thru 3Q 2015 were Pre-Clinical or Phase I

15. Jon Norris - jnorris@svb.com15 VC-Backed Biopharma IPOs: Median Pre-Money and $s Raised (2012 – 3Q 2015) Source: CB Insights, press releases, and SVB proprietary data 20132014Thru 3Q 2015 # of IPOs Raised Over $100MM81211 % of IPOs Raised over $100MM25%18%33%

16. 16Jon Norris - jnorris@svb.com VC-Backed Biopharma Big Exit M&A Source: Investment bank reports, press releases, and discussions with life science professionals 2008200920102011201220132014 Thru Q3 2015 Upfront $: Median ($M)200 158208155200225200 Total Deal $: Median285403380407350440413485

17. Jon Norris - jnorris@svb.com17 VC-Backed Biopharma Big Exit M&A by Stage 2009 Thru 3Q 2015 Source: Investment bank reports, press releases, CB Insights, and discussions with life science professionals

18. Jon Norris - jnorris@svb.com18 VC-Backed Biopharma IPOs and Big Exit M&A by Top Indication (2013 – 3Q 2015) Source: Investment bank reports, press releases, CB Insights, and discussions with life science professionals Represents # of IPOs Represents Big Exit Pre-ClinicalPhase I Phase II Phase IIICommercial

19. Thank you!!!