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

1 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

2 Better Information Leads to Better Advice Differentiated Execution Equity Issuance − Technology validation − Proprietary investor targeting − Sales force education − Buyer due diligence during transaction M&A Advisory Services − Proprietary idea generation − Proprietary opportunity assessment/ due diligence −Sophisticated domain expertise After-market Support −Institutional Investor Rankings #1 Ranked Equity Research #1 Ranked Healthcare Sales Force − Proprietary investor forums with physicians and industry experts − Unique diversity of MEDACorp education forums Proprietary Domain Knowledge 26,000 healthcare experts –Physician & thought leaders –Community physicians –Academic and clinical researchers –Regulatory and reimbursement experts 2,500 experts exclusive to our Firm Broad healthcare footprint –55 clinical specialties –21 basic sciences –20 business specialties Banking and Investor Client Focus –Internal team of healthcare experts identify, analyze, and share industry trends with institutional investors and banking clients

3 Leadership in Healthcare Investment Banking Note: Includes all 2007 life sciences equity transactions greater than $15MM; Full credit to all managers. Success Across All Product Types in 2007 Most Active in Equity Capital Raising During 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 $174MM Multiple Repeat Clients ($ in millions)

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

5 Best Healthcare Sales Force Leading Healthcare Trading – 2006 Best Healthcare Research Top Ranked Institutional Equities Platform Leerink Swann Rank Sector #1Biotechnology #1Medical Supplies & Devices #1Major Pharmaceuticals #1Specialty Pharmaceuticals #1Healthcare Tech & Dist Annual survey for Best Boutique Firms on Wall Street 730 portfolio managers and analysts at 400 buy-side institutions voted Named #1 from in all major healthcare categories Prior runners-up include: Cowen, Piper Jaffray, Thomas Weisel, Lazard, Jefferies, JMP Securities, Pacific Growth 1. Leerink Swann 2. Bear Stearns 3. Cowen 4. Lehman 5. Merrill Lynch 6. Morgan Stanley 7. UBS 8. Citi 9. JPMorgan 10. Banc of America 100% focused on healthcare 23 professionals covering 600 institutional accounts Access to MEDACorp during transactions and after-market Unique distribution capabilities –Influence decisions –Insight into latent demand Market maker in 500+ healthcare stocks Leader in creating liquidity for emerging growth companies Corporate venture services 1. Lehman Brothers 2. Leerink Swann 3. Merrill Lynch 4. Cowen 5. Citigroup 6. Goldman Sachs 7. Piper Jaffray 8. Bear Stearns 9. Morgan Stanley 10. UBS

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

7 Life Sciences Capital Markets Overview Market PerformanceHealthcare IPOs – Total Amount Raised Mutual Fund FlowsHealthcare IPOs – Pricing Relative to Range (US$ in millions) Dow Jones Industrials 16.3%6.4% S&P %3.5% NASDAQ Composite 9.5%9.8% Russell %-2.0% % -7.9% -13.2% -9.1% # IPOs

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

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

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

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

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

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

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

15 Biotech M&A Activity: Includes deals under $5 billion

16 Biotech M&A Activity: Includes deals under $5 billion

17 Reverse Merger Overview 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) A "reverse merger" is an alternative method by which a private company gains access to the public equity market:

18 Precedent Reverse Merger Transactions

19 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