1. 1 EuropaBio’s Most Innovative Biotech SME Awards October 2, 2013 Brussels, Belgium G. Steven Burrill Chief Executive Officer Burrill & Company Biotech In 2020: Is Europe Still Relevant?

2. 2 What’s Ahead for Europe? Can European life sciences companies gain access to capital they need? Is European Big Pharma leading or following today? Will austerity quash innovation? Will price pressures in Europe cause companies to focus on other markets? Will price pressures in Europe force companies to focus on developing products with true value? Will resistance to GMOs delay progress for European companies? Will Europe serve as a model on regulation? Healthcare? Does Europe still matter?

3. 3 Healthcare: A Menu Without Prices

4. 4 Healthcare: Procedures Cost Outcomes Value

5. 5 Layoffs slow but so is hiring Housing market hot again Sequester takes effect Debt-ceiling battle ahead U.S. Federal Reserve’s policy for continued economic support uncertain Fed more pragmatic than doctrinaire… helps sustain a growing economy (rather than sharply higher interest rates) Capital goods purchases increase; consumer confidence building Economic growth is real but Economic Signs in U.S. Show Some Improvement Austerity is still the watchword of the day

6. 6 Plenty of Mixed Signals Internationally Eurozone economy declines for six consecutive quarters German economy will grow at a slower pace than previously expected this year and next China’s manufacturing numbers shrink International Monetary Fund trims global gross-domestic-product growth forecast to 3.1 from 3.3 percent Japan recovery well underway Rising middle class globally is spending money Economic sentiment indicator in the E.U. rose above its long-term average for the first time since July 2011

7. 7 Globally Markets Are Improving And Capital Is Available Major indices hit record highs Life sciences first and information technology second in IPO performance Half of executives in 50 country survey say credit availability improved versus one year ago.

8. 8 For the first time, the advanced economies, including: Japan The United States Europe Source: Bridgewater Associates collectively contribute more to growth in the $74 trillion global economy than the emerging nations, including: China India Brazil Emerging Markets Losing Steam

9. 9 Mixed Global Life Sciences Financings Since Last SME Awards In USD M Source: Burrill & Company Type 10/1/11- 9/30/12 10/1/12- 9/30/13Change Global Venture Capital 11,726 12,3195.1% IPOs (56 vs 37) 2,308 6,391176.9% Global PIPEs 4,616 4,7031.9% Global Follow-ons 6,157 13,792124.0% Global Other Equity 2,726 1,067-60.9% Global Debt Offerings 51,947 53,6423.3% Global Other Debt 13,993 8,813-37.0% Total Global Public Financings 81,747 88,3468.1% Global Partnering 39,373 36,759-6.6% Total121,120125,1053.3%

10. 10 Biotech Outperforms Major Indices Since Last Year’s Awards

11. 11 And Small Companies Also Doing Well

12. 12 2012 (16 total) Raised vs. Target-5.2% Price vs. Target-23% Shares sold beyond Target31% Change as of 9/26/1376% 2013 (37 total) Raised vs. Target11.4% Price vs. Target-9.8% Shares sold beyond Target27.5% Change as of 9/26/1361.3% With Record U.S. Life Sciences IPOs in 2012 and 2013

13. 13 Life sciences markets are hot (…in some places)

14. 14 Index Price 9/20/2012 (USD) Price 9/20/2013 (USD) Percent Change DJIA13,59715,45113.6% S&P 5001,4601,71017.1% Nasdaq Composite3,1763,77518.9% Nasdaq Biotechnology1,4982,19446.5% NYSE Pharmaceutical36943818.7% NYSE Biotechnology1,5852,21739.9% FTSE 350 Pharma/Biotechnology9,76811,06013.2% Euro STOXX 502,5532,92714.7% Germany DAX7,3898,67617.4% Swiss SMI6,5568,10523.6% Not All Global Markets Up As Much As Biotech in the U.S.

15. 15 European Life Sciences Companies Financing by Debt

16. 16 Company Market Cap (USD Billions) Closing price (USD) 9/26/13 85.0$113 96.1$63 57.8$243 77.3$47 55.8$51 40.6$52 206$267 171$77 Some Big Biotechs Surpass Big Pharma

17. 17 Global climate change, sustainability of the planet Clean water Energy security, energy self-sufficiency Food security and food production Wellness Emergence of new viruses to which we are not immune A Host of Problems Face the World The life sciences industry has the tools to develop solutions

18. 18 The Impact of Urbanization, Longevity and Better Lifestyles More than 371 million people have diabetes. Source: International Diabetes Foundation

19. 19 Non-Communicable Diseases Take a Growing Toll Worldwide Account for 63% of deaths worldwide Cost more than $30 trillion over the next 20 years Cause nearly 80% of deaths in low- and middle-income countries Source: World Economic Health Forum and the Harvard School of Public Health; World Health Organization

20. 20 Half of Deaths from Diabetes Are In the Under 60 Age Group and in 2012 alone 4.8 million people died worldwide due to diabetes Source: International Diabetes Foundation

21. 21 Hepatitis C: A Silent Epidemic One of every 33 baby boomers are infected with hepatitis C - Centers for Disease Control and Prevention

22. 22 Healthcare Cost Rapidly Increasing Not Only in the U.S. Source: PricewaterhouseCoopers Health Research Institute Health Costs as a Percent of GDP 21 19 17 15 13 11 9 U.S.OECD outside of the U.S. 2010201420122016 20202018 20062008

23. 23 Spending Does Not Equate to Quality U.S. spends two-and-a-half times the OECD average Source: OECD Health Data 2012 1.In the Netherlands, it is not possible to distinguish the public and private share related to investments. 2.Total Expenditure excluding investments Per capita healthcare expenditures in USD

24. 24 As Costs Rise, Governments Demand Value for Their Money Germany’s drug pricing law AMNOG U.K.’s National Institute for Health and Clinical Excellence U.S.’s Independent Payment Advisory Board India’s Department of Pharmaceuticals Cost-based systems become value-based Pricing pressures will alter pharmaceutical development strategies

25. 25 Same pressures on healthcare driving pressures on agriculture and energy

26. 26 The Biogreentech Opportunity Opportunities within the agricultural and cleantech sectors that apply biotechnology and associated technologies, such as chemistry, biomaterial science and nano-technology to: Enhance productivity Enhance sustainability From agriculture to renewable chemicals

27. 27 Source: FAO 2008, Food Vs. Fuel, Frank Rosillo-Calle and Francis X. Johnson editors Biofuel Crops, Feedstocks, and Fuels Food vs. Fuel: Food Crops Used for Fuel ETHANOL BIODIESEL FERMENTATION AND DISTILLATION EXTRACTION AND ESTERIFICATION SACCARIFICATION, FERMENTATION, AND DISTILLATION SUGAR CROPS Sugarcane Sugar beet Sweet sorghum Maize Wheat Barley Rye Potatoes Cassava Switchgrass Miscanthus Willow Poplar Crop stover Rapeseed Oil palm Soybean Sunflower Peanut Jatropha

28. 28 EU Fourth for New Biorefineries Projected Biorefineries by 2025 Source: Biofuels Digest 200 130 60 40 60 135

29. 29 Evolving Business Models Move to Bio-based Chemicals Chemicals are a nearer term opportunity compared to fuels Smaller scale and volumes Lower capex requirements Less biomass required Better economic margins Market pull from the consumer product industry Access to ready partners

30. 30 A convergence of technology with healthcare and biogreentech

31. 31 Convergence with IT Creating A New Healthcare Model Passive / active data collection Analytics and network architecture Electronic medical record / patient medical record Performance and outcomes analysis Integrated technology platforms Data mining and integration services Increasingly targeted care and efficient use of finite resources Consumers Healthcare IT Diagnostics/ Devices Therapeutics Patients Services for Integrated Care

32. 32 Emerging Technologies Create New Possibilities New digital technologies provide powerful weapons in the arsenal against disease Remote patient monitoring systems Mobile early interventions Health consumer wellness apps Genomics and personalized therapies Data analytics for improved patient AND provider outcomes

33. 33 A New Future Drives the Bio-economy Productivity Reliability Quality Integration of native and biotech traits Pest protection Stress alleviation Superior nutrient use High nutrient density Processor efficiency Pest control Nutrition Growth regulators Microbes and biofilms / chemicals Breeding traitsGenetic traits

34. 34 New Forms of Medical Intervention in Development

35. 35 Europe pushes the envelope

36. 36 Gene Therapy Advances in Europe UniQure’s Glybera wins regulatory approval Rescues lipoprotein lipase deficiency Relies on adeno-associated virus serotype 1 EMA grants first approval for a gene therapy in the western world Approval for exceptional circumstances only and requires outcomes reporting

37. 37 Europe A Leader In Using Sequence Data To Advance Understanding of Ourselves: Single-stranded library preparation at Max Planck Institute for Evolutionary Anthropology, Germany Reconstruction of the genome by sequencing DNA from frozen finger fragments Advances knowledge of our evolutionary past To Advance Rapid Interventions: Practical application of whole genome sequencing by Sanger Institute, Britain and Addenbrooke’s Hospital, Cambridge First case of rapid whole genome DNA sequencing to lead to intervention of an infectious disease outbreak

38. 38 Europe Provides Innovation to Pharma and Biotech Oxford-based Immunocore Key platform technology to develop immune mobilizing monoclonal T cell receptors against cancer, or ImmTACs GSK will pay more than $5 million USD total to gain access to treatments for cancer and other diseases Genentech will pay between $10 million and $30 million USD each for new cancer immunotherapy

39. 39 CompanyCountry Academia/ NonProfitReason Affimed TherapeuticsGermany The Leukemia & Lymphoma Society AFM13, antibody against human CD30 and CD16A for Hodgkin’s lymphoma AstraZenecaUK NEOMED (Canada) AstraZeneca’s 250,000 high-quality small molecule compounds library Bayer HealthcareGermanyBroad Institute Bayer’s oncogenomics and drug discovery EvotecGermanyYale University Evotec's drug discovery infrastructure EvotecGermany Harvard University Evotec's drug discovery infrastructure for antibacterials EvotecGermany Harvard Stem Cell Institute Evotec's drug discovery infrastructure for amyotrophic lateral sclerosis United States Reaches to Europe for Innovation Source: Burrill

40. 40 CompanyCountry Academia/ NonProfitReason IpsenFrance Harvard University Ipsen’s drug discovery and R&D expertise for botulinum toxins for the treatment of neurologic diseases Karolinska InstituteSwedenMayo Clinic Karolinska Development to evaluate Mayo Clinic innovations LEO PharmaDenmark US National Psoriasis Foundation LEO Pharma's psoriasis care solutions to-BBB technologiesNetherlands ALS Therapy Development Institute BBB's CNS-targeted liposomal drug delivery system United States Reaches to Europe for Innovation - cont Source: Burrill

41. 41 CompanyCountry Academia/ NonProfitCountryReason ICONIreland National Taiwan University HospitalTaiwan ICON set-up and management of clinical studies in Taiwan QuantuMDxUK A*STAR: Genome Institute of SingaporeSingapore Asia-specific point-of-care genetic tests for use with QMDx’s handheld device RocheSwitzerland Institute Pasteur Korea South Korea Discover and develop drug candidates for infectious diseases ServierFranceA*STARSingapore Discover and develop compounds for cancer and autoimmuine diseases Asian Governments Look to Europe Too Source: Burrill

42. 42 And Europe Leverages China’s Power BGI Europe in Denmark and the LUCAMP initiative, a collaboration with 9 Danish universities/institutes Focus on the human genome and the gut microbiome to understand variations in metabolic and cardiovascular disease To improve the health of at-risk populations

43. 43 2018 Rank CompanyCountryGlobal Spending (USD M) Increase 2012- 2018 (USD M) 20122018 1SiemensGermany1,7062,023317 2J&JUSA1,6811,899218 3MedtronicUSA1,5571,823266 4Abbott LaboratoriesUSA8481,280432 5PhilipsNetherlands1,0321,180148 6RocheSweden1,0091,157148 12StrykerUSA471616145 13Becton DickinsonUSA472591119 16Essilor InternationalFrance208340132 17NovartisSweden28533550 19B. Braun MelsungenGermany24632983 20bioMerieuxFrance21727255 Healthy Medtech R&D Spending in Europe Source: EvaluateMedTech

44. 44 A leader in public-private initiatives to solve big problems that hamper innovation and productivity in drug development

45. 45 Working together to overcome obstacles

46. 46 The European Lead Factory European public-private partnership that seeks to speed translation of academic research into innovative therapies 30 international partners, including 7 European Pharmas and 13 E.U. Universities Founded by Innovative Medicines Initiative Provides public partners with industry-like discovery platform Unifies 500,000 small molecule compounds into a Joint European Compound Collection for drug discovery screening $261.9 million (€196 million) effort

47. 47 CompanyCountry Academia/ NonProfitCountryReason AbcodiaUK Austrian Institute of TechnologyAustria Biomarkers for early detection of lung and colorectal cancers Almac DiscoveryIreland Queen's University BelfastIreland Accelerate cancer-focused drug discovery in Northern Ireland AstraZenecaUKKarolinska InstituteSweden Center for preclinical and clinical research for cardiovascular and metabolic disease AstraZenecaUK Univ. of Cambridge; Cancer Research UKUK Identify changes in tumor cells and test drug combinations Janssen R&DIrelandPATHIntl Develop pre-exposure prophylaxis against HIV infection SanofiFranceCurie InstituteFrance Large collection of cryopreserved tumor samples at Institute Curie Select European Government and Non-profit Initiatives 2013 Source: Burrill

48. 48 Public-Private Partnerships to Advance Biogreentech THANAPLAST private-public consortium: one of the largest projects in plastics technology Private partners include lead company Carbios, specializing in new approaches for recovering plastic waste and producing biopolymers Public partners are National Center for Scientific Research (CNRS) and Poitiers University Funds €3.2-million collaboration to develop new plastics technologies

49. 49 Healthcare Solutions Redefined Treating sickness with: Drugs Devices Dx Promoting wellness with: Patient management Health incentives Individual and efficient treatments

50. 50 Global Initiatives to Engage Patients Worldwide Improve patient outcomes globally through interactive web application for patients and doctors Enhances the patient experience via U.K. consumers main point of contact: their pharmacist Digital health diabetes self-management program using digital coaching and wireless glucose meter to transmit data to clinical monitors

51. 51 Challenges and Opportunities for Europe

52. 52 European Regulators More Proactive than U.S. U.S. contract research organization, Cetero Research, found to have falsified pre-clinical and clinical trial data Nearly 100 U.S. for drug approvals, ranging from blood thinners to chemotherapeutics and painkillers, relied on the falsified data European Medicines Agency recalled seven of the drugs, but the U.S. Food and Drug Administration has done little to address the problem

53. 53 Unified Patent Protection Still Uncertain Unified patent system is designed to cut costs and eliminate burdensome filing procedures Will provide uniform legal protection in 25 European countries In 1973, the Munich Convention created a unified community patent, but it was never adopted Attempts again in 1989, 2000, proposal tabled in 2011 Current agreement takes effect January 1, 2014 or after thirteen contracting states ratify it, provided that the signatories include the United Kingdom, France, and Germany

54. 54 Uncertain Future for Med Devices European Parliament committee proposes U.S.-style premarketing approval system with randomized clinical trials for implantable devices Will be controlled by the European Medicines Agency In response to breast implants made in France with industrial- grade silicone used by hundreds of thousands of women around the world E.U. trade group Eucomed says it will delay patient access to lifesaving medical technology and deliver a devastating financial blow to Europe's 25,000 small and medium-sized device makers

55. 55 Offsetting Stagnation in Europe by Global Arbitrage Companies look to emerging markets: Amgen acquires Turkish drug maker Mustafa Nevzat Teva Pharmaceutical opens $110 M plant in Hungary Novo Nordisk hiring in emerging markets, including Ukraine

56. 56 The Potential For Cell Phones As Partners in Health Out of the world’s estimated 7 billion people, 6 billion have access to mobile phones Kaiser Permanente’s 9 million members around the world have 24/7 access to their medical information via free apps Healthcare app downloads expected to be 142 million in 2016 The benefits of mobile: – Personal and immediate – Context aware; acts as a sensor – Distributes instant rewards Source: International Telecommunication Union

57. 57 Nearly 70 percent of adults use a social networking site like Facebook, Google+, LinkedIn Nearly 60 percent of physicians think social media is engaging, beneficial, and a good way to get current high-quality information Physicians in Europe, particularly in Italy and France, are the most conservative in use of public social media sites, medical community sites, or the internet for professional networking, compared to physicians in the emerging markets or U.S. Source: Physiciandesign.com and Cegedim Strategic Data Social Media for Patients And Providers: Global Access

58. 58 The need for innovation

59. 59 Innovate or Die Kodak Nokia Vinyl records  8 track tape  CDs  iTunes  cloud

60. 60 Why Is Innovation Important? Global competition Sustainable economic growth Enhanced shareholder (and societal) value Faster, smaller, cheaper, more mobile

61. 61 Faster

62. 62 CellScope for Rapid And Remote Diagnosis of Infections Attachable devices turn smartphone into a microscope Transmits high-magnification diagnostic- quality images to physician for remote diagnosis and treatment Smart Otoscope for ear infections Smart Dermascope for skin infections No need to make an appointment with the doctor

63. 63 Smaller

64. 64 New Products Connect Patient Data to Doctor for Feedback Applications that report data to individual and doctor Use: Improve compliance, provide early interventions, collect better quality data Glow CapsZio Patch Compliance Long-term cardiac monitors ViSi Mobile Wireless platform for vital signs monitoring

65. 65 Cheaper

66. 66 Save Money on Prescriptions Prescription Saver searches for the prices of prescription drugs at local pharmacies App makes it easy to find the nearest pharmacy, get directions, click to call and save the pharmacies in favorites Share savings through Facebook, Twitter, and email Phunware

67. 67 Digital diapers from Pixie Scientific Detects possible urinary tract infections, kidney dysfunction, dehydration Accompanied by smartphone app that transmits the information to a physician Intended to help in screening for disease so subject to regulation by the FDA; require clinical trials and 510(k) approval Crowdfunded through Smart Diapers Connect Data

68. 68 Allow Elderly to Live Independently Longer Remote patient monitoring Smart sensors for senior living communities Wellness surveys, brain fitness games, medication compliance reminders keep members engaged Simple, secure interface to interact online through a private social network to promote physical, social, and mental health Helps staff monitor seniors’ wellness and identify potential problems early

69. 69 Innovation Takes Two Principal Forms Brave new world of new ideas, new products, new industries – Fax – GPS – Email – iPhone Better, faster, cheaper modifications to existing products with new features/new industries – US mail  FedEx – Crops with new traits – Microsoft Office  cloud computing

70. 70 Strategies for Promoting Innovation PROVIDE THE FOUNDATION - Promote innovative culture – Executive commitment – Mission statement – Reward it TECHNICAL CAPABILITIES - Establish internal research & development – Time – Financial resources – Leverage others R&D LEVERAGE OTHER’S IDEAS AND $$ - Acquire or partner for innovation KEEP THE INNOVATION WINDOW OPEN - Engage with venture capital

71. 71 The Necessity of Building A Culture of Innovation “I can’t do it all. I don’t have all the ideas. That isn’t my job. My job is to build a culture of innovation. That’s something that we try to enforce. We encourage it. We value it. We notice it. We compensate for it. We require it.” Salesforce Founder Marc Benioff to Forbes Magazine Number 1 on Forbes Most Innovative Companies list in 2011, 2012, 2013

72. 72 Innovation Can Be Acquired “I’m willing to acquire a company that might not have a lot of revenue but has a lot of innovation. We’ll take innovation any way you can give it to us. … I don’t care if it’s my idea, an employee’s idea, a competitor’s idea, a partner’s idea or some other associate’s idea.” Marc Benioff, Salesforce Founder Source: Forbes Salesforce has spent nearly $4 billion since 2011 buying smaller software firms

73. 73 Innovating Into New Markets Microsoft acquires handset and services business of Nokia for $7.2 billion Consumers moving away from low-end mobile phones, Nokia’s lead product Microsoft needs mobile device for software Hope is to reduce intellectual property conflicts and increase agility of unified company Innovate by increasing efficiencies

74. 74 Innovation By Integration New uses of existing technologies Integration of existing technologies for new applications Big data convergence – Robotics – Synthetic biology – Biocontrol The key is integration of innovation, not just new science or technology

75. 75 Applying Technologies from Human Health to Agriculture Repurposes health technologies for agricultural use Acquires RNAi technologies Moves towards “point-of-care” gene sequencing Consistently present on Forbes’ innovative companies list: 34th in 2013 9th in 2012 10th in 2011 In 2013 number 14 on Great Place to Work Institute’s Top 25 world’s best multinational workplaces- the only ag company in the award’s second year of existence

76. 76 Innovate By Capturing Value Outside the Product Amazon: Builds cloud computing business Google: AdWords pay-per-click advertising Facebook: Establishes gifts program Twitter: Charges for promoting tweets and trends

77. 77 Life Sciences Companies Doing the Same 23andMe Business focused on selling DNA analysis for ancestry and health data But finds value outside product: Company wins patent for polymorphisms associated with Parkinson’s disease Hired by Genentech to enlist breast cancer patients in a study to predict which patients benefit from the use of Avastin

78. 78 All bring value to healthcare

79. 79 Promotes wellness/improves outcomes Prevention Early intervention Behavior modification Treats illness Targeted therapies Rx/Dx combos Pharmacogenetics A Transition from Illness to Wellness Genomics Diagnostics Digital health Bioinformatics Treating SymptomsPromoting Health

80. 80 Changing Roles of Doctors Health advisors Data driven decisions using health IT and diagnostics Focus on prevention and wellness Integrated with specialists, labs, and pharmacists Unquestioned authorities Trial and error approach Treat disease Disconnected from others in the healthcare system PastFuture

81. 81 Changing Roles of Patients Active managers of their healthcare Armed with knowledge of genetic risks Have access to their own digital health records Rely on Internet, social networks, for medical information Monitor health and wellness with digital devices Passive about their healthcare Armed with family history Relied on doctors to maintain health records Relied on doctors as primary source of medical information Received annual check-up PastFuture

82. 82 Healthcare Systems Are Changing Globally PastFuture Acute care Chronic care (to wellness care) People = dying patients Systems / Software Place = hospitals Consumer digital health Payment = Cost-based care Value-based care

83. 83 Technology Is Changing Dysfunctional Sickness Care… …to personalized, predictive, and preemptive medicine Treat sick people effectively and well people preemptively Treat the molecular mechanisms of disease rather than the symptoms Deliver the right drug at the right dose at the right time to the right patient, for the right cost! Shifting towards integrated care of higher quality at lower cost would benefit everyone, everywhere

84. 84 A Shift in Emphasis Medical care system Primary/pre-primary care system Primary and pre- primary care care Medical care From treating illnessTo promoting wellness

85. 85 But Innovation Is Not Enough

86. 86 Value Creation Is Different Than Value Capture Value Creation -customer perspective- more for less Value Creation -company perspective- higher value products greater profits Value Capture -everyone's perspective- what payers will pay for Targeted therapies Rare diseases Unmet medical needs Faster regulatory path Less competition High margin products Dominant market share Broad markets Reduced competition Generics OTC products Biosimilars Cheaper products

87. 87 Why Europe Matters Big important market Still a source of innovation Ahead of U.S. on some policy issues Range of approaches to healthcare challenges being faced Integrating cost-effectiveness into pricing Financing remains difficult in Europe - companies forced to seek capital elsewhere

88. 88 What Can Others Learn from Europe Collaborative efforts to promote innovation and answer the big questions in healthcare Leverage global resources Innovative government funding strategies Market size of Europe is still significant and companies shouldn’t ignore it Ahead of others in applying cost effectiveness: companies will need to learn to live in a world of NICE/AMNOGS As healthcare systems try to improve quality and reduce costs, there are successes in Europe that provide models to others

89. 89 Where Are the Biggest Opportunities Transformational healthcare delivery Disruptive therapeutics / vaccines / diagnostics…each with a special pathway to market Personalized and predictive medicine Medical devices / platforms / tools Data analytics Digital health Significant opportunity to address global needs for food, energy, fiber To address societal needs, investments are needed not only in technology development but also infrastructure for deployment Emerging market opportunities / global arbitrage

90. 90 The very best opportunities in Life Sciences are now. Go for it!

91. 91 EuropaBio’s Most Innovative Biotech SME Awards October 2, 2013 Brussels, Belgium G. Steven Burrill Chief Executive Officer Burrill & Company Biotech In 2020: Is Europe Still Relevant?