CONFIDENTIAL Royalty Pharma Trends in the Royalty Interest Market CONFIDENTIAL | January2009 Copyright © 2009 by RP Management, LLC. All rights reserved. No part of this presentation may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, without the express written permission of RP Management, LLC.

CONFIDENTIAL 1 Royalties Paid to Academic Institutions  North American academic institutions received nearly $1.7bn in royalty revenue in 2006, the most recent year for which there are data  Since 2001, this figure has trended upwards from $1.1bn at the beginning of the decade to a high of nearly $1.8bn in 2005; the CAGR from was 7.9%  The drop in the academic institutions in 2006 is due to Emory reporting its $525m sale of the emtricitabine royalties as “royalties received” in 2005; excluding this item, growth in royalties to US universities has continued to rise gradually Source: AUTM Surveys

CONFIDENTIAL 2 Royalty Interests Sold  Nearly $3.6bn has been paid to academic holders of royalty interests since 1998 for these assets  Proceeds raised from the sales of royalty interests by academic holders have increased significantly over the past several years; in aggregate, total proceeds per annum were in the $10s of millions in the late 90’s and early 00’s, but have grown to several hundreds of millions each year, reaching $1.8bn in 2007  The number of these transactions has also increased as the holders of these assets become more familiar with the risks underlying the future sales of a single biopharmaceutical product and understand the concentration risk they maintain by not selling them Source: Royalty Pharma

CONFIDENTIAL 3 Royalty Interest Market Statistics & Trends  Structures In approximately 75% of these sales, the holder divested the entire royalty stream Twice as many of these transactions had no sharing provisions as did have this mechanism; there does not seem to be a correlation between the size of the deal and a sharing component In two of these transaction s, stock was paid as part of the consideration Only a handful have milestone provisions; these are typically patent extension related  Sellers Approximately 75% of these transactions have involved both the institution and inventors Of the 25% executed by either the institution OR the inventor(s), two thirds of these were followed by the other royalty holder(s) consummating a transaction Of the institutions who have sold royalties, 70% of these have been private institutions