Biotech Start Up Life Cycle

CONFIDENTIAL 1

Founders

• Technical Founders• Universities/Academia• Large Pharma

Growth Investors

• Venture Institutions• Corporate VCs• Hedge Funds

Large Pharma

Public Investors

• Mutual Funds• Hedge Funds

Venture Investors

• Venture Institutions• Corporate VCs

Seed Investors

• Family & Friends• Angel Investors• Government Grants

Biotech Start Up Maturing Biotech

Independent Public Biotech

Acquired

$ Acquisition

Intellectual Property

Start Up Capital

Growth Capital

CapitalExpertiseContacts

Public Capital

Valuation/Dilution Cascade

CONFIDENTIAL 2

FounderIP/Idea

Value = $1 Million

Seed InvestorsSeed Capital

$2 Million

Start UpValue = $3 Million

Founder: 33%Seed Investors: 67%

Start UpValue = $9 Million

Founder: 33%Seed Investors: 67%

Venture InvestorsSeries A Capital

$15 Million

Start Up

Value = $24 MillionFounder: 13%

Seed Investors: 25%Venture Investors:

62%

Founders Stake has been diluted 100% to 13% in two roundsBUT Value has increased $1 Million to >$3 Million

Capital spent to advance drug candidates

+

+

Assets and Needs of Biotech Companies by Stage

Concept/Gestation

Infancy Adolescence Maturity

• Idea

• Some relevant technical/management expertise

• Company founded

• Idea advancing

• Clear development/ implementation plan

• Seed capital in place

• Growing company

• Idea/intellectual property progressing

• Clinical data

• Supportive VC investor base

• POC data

• Growing pipeline

• Lead candidates in Phase 2/3

• Corporate organization with strong management

• Capital

• Structure

• Management

• Capital to fund advancing programs

• Governance

• Entrepreneurial expertise

• Contacts

• Structure

• Capital to fund later stage/larger trials

• Proof of concept data

• Additional expertise

• Even more capital

• Liquidity for founders and VC investors

CONFIDENTIAL 3

Ass

ets

Nee

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