1. Achieving Leadership Positions In The Booming (Bumpy?) BioTech Sector Dinesh V. Patel, Ph.D. Vice President, Drug Discovery Versicor Inc. 34790 ArdenTech Court Fremont, CA 94555 Ph: 510-739-3008 Fax: 510-739-3050 E-mail: dpatel@versicor.com EPPIC Meeting: March 22, 2000

2. The BioTech Sector BioTech vs. Big Pharma Market Size: $ 280 Billion Research Expense vs. # of Products BioTech vs. The Economy Food Industry, HealthCare, etc.. Aging Population

3. The Current BioTech Boom: How Long can this Last? Year 2000: $ 13 Billion & Running 12 0 2 4 6 8 10 14 1994199519961997199819992000 $ Billion Today’s valuations do not reflect any change in current fundamentals of the sector. It’s a Bubble. Markets are catching up to the true value of this cash-starved sector. It’s a long awaited, well deserved Correction.

4. Managing beyond the Bull The only sin in Biotech is running out of Money. S. Panem The robust strength of current market provides a unique opportunity to create massive fundamental value that is sustainable. Valuation is less important than Value. Value is created by Products, not Perception.

5. BioTechnology Products Drugs Proteins Antibodies Gene Therapy Small Molecules ICE’s, etc. Tools Combinatorial Chemistry High Throughput Screening Genomics BioInformatics, etc.

6. BioTechnology Careers Research Chemists Biologists & MDs Engineers, etc. Management Leadership On-site MBA ??? Fortunately, it’s not a rigid Paradigm.

7. From BigPharma to a Public BioTech to a Start-Up Company 1985-1993: Bristol-Myers Squibb, Group Leader 1993: Following the Mentor. Affymax, Asst. Director Affy:Brilliant but naive Scientists-Typical ‘93 BioTech Strategic Inflection Point: Transitioning Combinatorial Chemistry from ‘Peptides’ to ‘Small Molecules’ 1994-95: Pioneering the Drug Discovery Revolution. March 1995: Fame follows Fortune. GW Merger Inflection Point: Technology becomes a commodity. 1996: What’s next for me? Big Pharma vs. Start-Up There is nothing wrong with change, if it is in the right Direction. Winston Churchill

8. 7 Laws of Success in a Public BioTech: Research & Management Leadership 1 Technical: Know-how. Awareness & Respect for other disciplines, e.g. Chemistry vs. Biology 2 Perspiration: If the power to do hard work is not talent, it is the best possible substitute for it - James A. Garfield 3 Result Orientation: Bring things to a closure (quickly) 4 Paper-WorK: Publications & Patents are useful. Reports are a waste of time. 5 Sponsorship: both from Superiors & Subordinates. Talent does you no good unless it’s recognized by someone else - R Half 6Salesmanship, not just presentation skills. No matter what a man’s vocation may be, the nature of his progress through life is largely dependent on his ability to sell - F Nichol 7 Professional Relationships & Networking: It’s not what you know, but who you know, that matters most.

9. From BioTech to a Start-Up: Versicor April 1996: Abbott vs. Versicor (Senior Director) Easy Money: Versicor, a spin-off of Sepracor Combi-Chem: From Technology to Application. The ‘Anti-bacterial’ Drug Discovery Focus Unmet Need: Emerging resistance to current drugs Success: 50% of Phase I products become drugs. Cost-efficient: Well defined clinical end points December 1996: Where are the Deals? The Year of 1997: Proof of Concept vs. Preclinical Candidates. The Du-Pont Merck Experience. December 1997: Meet the VC’s; $ 22M financing.

10. Reinventing Versicor: Jan ‘98 to Present Questions: Expertise, resources, focus, management. June 1998: Executive Director August 1998: Parting of Mentor; VP, Drug-Discovery The New regime & The New Company Mission Less Projects, more focus Need vs.Expertise. Customer 1st; your Talent 2nd Less Spending; Minimal Expansion There is danger in reckless change, but greater danger in blind conservatism. Henry George

11. Versicor: A Fully-Integrated Infectious Disease Drug Development & Discovery Company 6) Ligase HTS (Novartis) 7) Small mol leads Genomics 5) BIOCOR: Nat Prod Leads 3) 2nd Genern OD PNU Collaboration 4) Def Inhibitors Novartis Collaboration 1) LY303366 ECB Antifungal 2) BI-397 GP Antibiotic ScreensHitsLeads Preclinical Candidates Ph IDrugsPh IIPh IIITargets Research & Development

12. How to create the next Amgen? $ 100 M Venture stage BioTech The 5 year, 10X Growth Formula - George Rathmann $ 1 Billion Mid-Cap BioTech $ 10 Billion Large-Cap BioTech $ 100 Billion Big-Pharma Blue Chip

13. 7 Laws of Success for a Start-Up 1 Employees: Hire the best people. 2Teams vs. Individuals: Matrix Orgnzn Team-work vs. individual recognition 3 Paranoia: Andy Groove Philospohy; avoid comfort zones 4 Reinvention: More powerful than Invention 5 Product: Applied vs. Basic Research 6Differentiate: Niche Markets, niche Products 7Customer: is King. Find them & keep them Leadership at a Start-Up: Your Priorities are indistinguishable from the Company’s Priorities.

14. 7 Secrets to Maintaining “Active” Leadership 1 Technical Competence 2 Communicate Clearly 3 Delegate Effectively 4 Reward Results 5 Stay Approachable 6 Take Care of Your People 7 Find a Successor

15. The 1st Generation Immigrant Perspective It’s a Blessing, not a Curse. Your Self-Confidence & Performance should overshadow any Racial Disadvantages. Don’t forget your Roots. Always Communicate in English at Work. Avoid being too Emotional at Work. Don’t Pretend what you’re not. Keep the Big Picture in Mind. Don’t get too hung up on a Promotion or Salary Raise. Take Management Courses. Experiment with New Hobbies. Read books on Diverse Subjects.

16. My Favorite Reading List How to become a CEO - Jeffrey J. Fox Power of Positive Thinking - Norman Vincent Peale 7 Spiritual Laws of Success - Deepak Chopra 7 habits of highly effective people - Stephen Covey Buffet, making of an American Capitalist - Roger Lowenstein Direct from Dell - Michael Dell A Bend in the River - V Naipul Iacocca, An Autobiography - Lee Iacocca Forbes Book for Business Quotations - Ted Goodman Scientific Journals: J Med Chem, J Org Chem, Tet Lett, BMCL, etc.

17. How to become a CEO (Leader) : J. Fox Get & Keep Customers Arrive 45 minutes early and leave 15 minutes late. Never Panic….or Lose your Temper. Don’t have a drink with the Gang; avoid Office Parties. Don’t get Buddy-Buddy with your Superiors. Stay out of Office Politics. Never surprise your Boss. Make your Boss look Good. Overinvest in People. Overpay your People. Learn to Speak and Write in Plain English. Put the importance on the bright idea, not the source of idea. Concept doesn’t have to be Perfect; but it’s Execution does. Be a Credit Maker, not a Credit Taker. Don’t hide an Elephant. Be a Flag-Waving Company Patriot. Add one big new thing to your life each year. Keep Physically Fit. Do something hard and lonely. Treat your Family as your #1 Client.

18. What Really Matters 1 Wealth: A mere score-card 2 Recognition 3 Satisfaction 4 Health 5 Family & Friends