2015 Dealmaking Outlook Ed Saltzman President Defined Health

NYPF Meeting - New York, NY 23 March 2015

Page 2 NYPF Meeting – 23 March 2015 © Defined Health

Biotech IPOs Are Approaching Historic Highs

http://www.biospace.com/News/biotech-ipos-up-22-since-bubble-year-of-2000-shows/361523

Page 3 NYPF Meeting – 23 March 2015 © Defined Health

As Are Early Stage Deal Valuations

EvaluatePharma

Top Licensing Deals in 2014

Company Deal Partner Product Status on Deal Date (2014)

Deal Value ($m) Upfront

Payment ($m)

Dainippon Sumitomo Edison Mitochondrial Disease Research Research project 4,295 50

Pfizer Merck KGaA MSB0010718C Phase II 2,850 850

Celgene Nogra Pharma GED-0301 Phase II 2,575 710

Merck & Co Ablynx Nanobody Research Research project 2,365 27

Merck & Co Bayer Adempas Marketed 2,100 1,000

Takeda MacroGenics DART Program Research project 1,600 -

Servier Intarcia Therapeutics ITCA 650 Phase III 1,452 171

BMS CytomX Therapeutics CTLA-4 Research Research project 1,242 50

Roche NewLink Genetics NLG919 Phase I 1,150 150

Novartis Ophthotech Fovista Phase III 1,030 200

AstraZeneca BMS Farxiga Marketed 1,000 50

Baxter Merrimack MM-398 Phase III 970 100

J&J Geron Imetelstat Phase II 935 35

Sanofi Mannkind Afrezza Approved 925 150

J&J Aduro BioTech ADU-214 Pre-clinical 847 30

Servier Cellectis UCART19 Pre-clinical 840 -

Page 4 NYPF Meeting – 23 March 2015 © Defined Health

Symptom Not Cause: IPOs are Cyclical but Drivers of Hot Early Stage Deal Market are Fundamental and Will Persist

♦ Pharma’s reduced discovery footprint

Drives need to fill early pipelines externally

♦ Payers increasingly powerful in all major markets

Raising bar for innovation

♦ De-risked deals no longer feasible or affordable for Pharma

Mid and large cap biotechs no longer affordable

Despite “headline deals” clinical stage deal volume and valuations actually declining as majority of programs lack PoR and carry too much commercial risk

♦ Pre-clinical deals proliferating in volume and value

♦ Early deal space hottest in immuno-oncology and regenerative medicine

“Overnight” scientific disruption in areas long shunned by Pharma

Pharma must move quickly and scarcity drives valuations

Page 5 NYPF Meeting – 23 March 2015 © Defined Health

Benefit of Patent Cliff-Driven Cost Reduction Was to Shrink, Focus and Externalize R&D

Company website, EvaluatePharma, GoogleEarth

Page 6 NYPF Meeting – 23 March 2015 © Defined Health

But Especially the “R” Part

Pfizer Plans to Cut Research Spending By Up To $3B February 4, 2010 Pfizer Inc. said Wednesday that it plans to cut research-and-development spending by as much as $3 billion by 2012, in an attempt to wring efficiencies following its take-over of Wyeth without sacrificing future product development. The New York pharmaceutical giant outlined the aggressive cuts, which represent more than a quarter of the two companies' combined research budgets in 2008, as it reported fourth-quarter earnings of $767 million, or 10 cents a share, up from $266 million, or four cents a share, a year earlier. The drug maker also forecast lower financial targets from the Wyeth deal than it provided last year, sending Pfizer shares down 2.3% to $18.62 on the New York Stock Exchange.

Research is considered the lifeblood of pharmaceutical companies. Big drug makers like Eli Lilly & Co. and Bristol-Myers Squibb Co. are increasing their spending to find new products that can replace aging blockbusters. Yet drug discovery is unpredictable, and industry scientists have struggled in coming up with big new products. Pfizer's announcement suggests executives believe its research hasn't been worth the high levels of investment.

The largest drug makers have been retrenching as blockbuster drugs start facing competition from less expensive generic versions. After early cost cutting focused on trimming sales representatives, companies have set their sights on labs and scientists. Last week, AstraZeneca PLC said it would cut about 3,500 research jobs as part of a larger work-force reduction. Pfizer also targeted research previously, cutting as many as 800 research workers last year and closing six of 20 research sites as part of the Wyeth acquisition completed in October. Meantime, the $68 billion Wyeth takeover and other deals are filling Pfizer's pipeline with therapies discovered elsewhere.

Chief Executive Jeffrey Kindler said he believes Pfizer has struck the "right balance" between efficiency and innovation by embracing deals and partnerships while still investing heavily in internal research. "The days of a monolithic approach to either research or commercialization are behind us," he said. Pfizer said its research expenses would be $8 billion to $8.5 billion in 2012. The combined research spending for the two companies was $11 billion in 2008, the last full year before the merger. Chief Financial Officer Frank D'Amelio said the research cuts are aimed to reduce overlaps in the two companies.The planned cuts are part of a total of $7 billion in savings Pfizer expects to realize from both the Wyeth deal and its cost-cutting efforts begun before the acquisition. Pfizer will still have among the industry's biggest research budgets, company officials said. Chief executives at GlaxoSmithKline PLC and Sanofi-Aventis SA have talked about the poor returns from company labs and reworking their approach to drug development. Sanofi Chief Financial Officer Jerome Contamine said in July that the company planned to cut R&D spending by 20% between 2008 and 2011.Consultants like Terry Hisey, vice chairman and U.S. life sciences leader at Deloitte LLP, is telling drug makers that it is "more cost effective" to bring in promising therapies from the outside than trying to develop them all in-house. Yet Sanford Bernstein analyst Tim Anderson said the research cuts by drug conglomerates could "come back to bite" the companies because they will need new products.

The Wall Street Journal: http://online.wsj.com/article/SB10001424052748704259304575042863590302630.html?mod=WSJ_newsreel_business

Pfizer's announcement suggests executives believe its research hasn't been worth the high levels of investment.

Page 7 NYPF Meeting – 23 March 2015 © Defined Health

Majority of R&D Now Externalized: Trend Will Accelerate and Shift is Permanent

EvaluatePharma, PhRMA website, DH estimates

R&D Spend in US Pharma on Self-Originated vs. Licensed-In Projects

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

% R&D SpendUncategorized

% R&D Spend onLicensed-In Projects

% R&D Spend on Self-Originated Project

<---------------- DH Projected -------------->

Page 8 NYPF Meeting – 23 March 2015 © Defined Health

Cutting R&D Has Created Shareholder Value in Post-Cliff World

EvaluatePharma, Defined Health analysis

Loss of over 1/3 of combined

market cap

0

475

950

1,425

1,900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2014

NVS PFE GSK MRK ROC SNY AZN JNJ ABT BAY BMS LLY

PFE MRK GSK JNJ BMS NVS LLY AZN ROC WYE PHA ABT AVE SGP SNY DNA BAY SHR

WYE->PFE SGP->MRK DNA->ROC AVE->SNY PHA->PFE SHR->BAY

Combined Market Cap ($B) of Top Pharma Companies (2000-2014)

Page 9 NYPF Meeting – 23 March 2015 © Defined Health

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Phase 1

Pre-Clinical

EvaluatePharma

Number of Pre-Clinical and Phase 1 Programs in Top 10 Pharma Pipelines (2003-2013)

But Cuts to Discovery Also Result in Shrunken Early Stage Pipelines That Need to be Refilled

Page 10 NYPF Meeting – 23 March 2015 © Defined Health

Which Defined Health Predicted Nearly Five Years Ago

Page 11 NYPF Meeting – 23 March 2015 © Defined Health

Pharma Long Preferred Commercial Over Scientific Risk

Page 12 NYPF Meeting – 23 March 2015 © Defined Health

Pharma Achieved Historical Success Buying De-Risked Innovation

Page 13 NYPF Meeting – 23 March 2015 © Defined Health

But Innovation via Biotech M&A no Longer Affordable for Pharma

0

50

100

150

200

250

300

Novartis Roche Pfizer Merck Sanofi Gilead Amgen Celgene BiogenIdec

EvaluatePharma; MC as of 20-March-2015

Market Caps of Selected Top Pharma vs Top Biotechs ($ billion)

Page 14 NYPF Meeting – 23 March 2015 © Defined Health

Commercial Risk Already Substantial Will Only Get Worse

http://www.fiercepharma.com/special-reports/top-10-drug-launch-disasters

Page 15 NYPF Meeting – 23 March 2015 © Defined Health

So Pharma Clearing Out Products That Cannot Be Sold

Citeline analytics, Parexel Biopharmaceutical R&D Statistical Sourcebook 2013/2014, total reports each year range from 99-209, only drugs with actual declared reasons are included

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 Overall2001-2011

OtherSpecified

Strategic

Financial

Efficacy

AdverseEvents

Reported Reason

Reported Reasons for Drug Discontinuations 2003-2011

Page 16 NYPF Meeting – 23 March 2015 © Defined Health

Longstanding View of Value Inflection in Process of Disruption

http://www.nature.com/bioent/building/planning/012003/fig_tab/nbt0602supp-BE36_F2.html

“Today, the big inflection points are: i. initial P2 results, which suggest efficacy ii. advanced P3 trials, which lead to a New Drug Application (NDA), and iii. market launch.”

Source: Nature Biotechnology 20, BE36-BE39 (June 2002) Based on: Burrill & Co., and Ernst & Young, 1997

Page 17 NYPF Meeting – 23 March 2015 © Defined Health

Supply of “Available” Clinical Stage Programs Remains Healthy

Data analysis provided courtesy of Thomson Pharma IDdb

Number of Unpartnered Compounds Owned by Non-Commercial Stage Biotechs

0

500

1000

1500

2000

2500

2000 2004 2006 2007 2008 2009 2010 2011 2012 2013

Phase 3

Phase 2

Phase 1

Page 18 NYPF Meeting – 23 March 2015 © Defined Health

But Still Far Exceeds Demand

EvaluatePharma, Thomson Reuters

0%

5%

10%

15%

20%

2000 2004 2006 2007 2008 2009 2010 2011 2012 2013

Phase 2

Phase 1

Deals as a Percentage of Biotech Programs by Phase

Page 19 NYPF Meeting – 23 March 2015 © Defined Health

And Clinical Phase Deal Values are Declining

Therapy Area Product deal count Up-front payments ($m) Total deal value ($m)

2010 2011 2012 2013 2010 2011 2012 2013 2010 2011 2012 2013

Oncology & Immunomods 51 93 51 52 713 662 446 425 3,408 6,713 5,360 3,570

Systemic anti-infectives 25 34 33 31 398 50 204 49 1,226 226 774 675

Central nervous system 42 49 22 32 199 297 105 506a 2,884 2,488 874 3,373a

Gastro-intestinal 19 21 13 9 108 23 85 70 1,765 76 504 70

Respiratory 13 14 11 3 10 58 22 0 25 150 82 0

Musculoskeletal 6 13 10 14 145 100 189 45 1,455 347 1,659 560

Endocrine 8 14 8 6 95 409 0 127 2,155 3,146 0 677

Cardiovascular 17 16 7 14 148 2 0 25 2,421 9 54 825b

Dermatology 12 5 6 7 0 0 40 0 0 0 52 0

Various 8 6 6 9 45 5 23 0 373 23 26 0

Blood 8 7 4 9 167 2 0 400c 1,094 364 2 1,000c

Genito-urinary 17 7 3 11 213 0 0 5 1,364 0 0 146

Sensory organs 7 10 1 12 60 45 0 0 230 420 0 0

Totals 233 289 175 229 2,301 1,652 1,114 1,651 18,399 13,961 9,387 10,896

EvaluatePharma report - Therapy area licensing in 2012 – Rags and riches

Phase 1 to Phase 3 Product Deal by Therapy Area

a CNS increase: Lilly/Pfizer deal for Tanezumab; $200M upfront, $1,780M total deal value b CV increase: Forest/Trevana deal for AT-1 antag; $460M total deal value c Blood increase: AZN/Fibrogen deal for Roxadustat; $400M upfront, $815M total deal value

Page 20 NYPF Meeting – 23 March 2015 © Defined Health

Because Too Many Programs Lack PoR

Page 21 NYPF Meeting – 23 March 2015 © Defined Health

PoR has Replaced PoC as Deal Value Driver

Proof of

RelevanceTM

Page 22 NYPF Meeting – 23 March 2015 © Defined Health

PoR Reflects a Balance of Commercial and Scientific Risk Appropriate for Tomorrow’s Environment

Page 23 NYPF Meeting – 23 March 2015 © Defined Health

Cancer Continues to Dominate in Deal Volume

IMS Pharma Deals

Number of Product Deals by Therapeutic Area, 2010-2014

Page 24 NYPF Meeting – 23 March 2015 © Defined Health

Immuno-Oncology Deals Have Largest Upfront Payments

Thomson Reuters

Page 25 NYPF Meeting – 23 March 2015 © Defined Health

Overall Deal Values Highest in Immuno-Oncology

Thomson Reuters

Page 26 NYPF Meeting – 23 March 2015 © Defined Health

Strong Start for Immuno-Oncology Deals in 2015

Date Acquirer Originator Platform/Product Phase Terms

1/5/2015 Amgen Kite ACT: CART PC

Kite to receive a $60M upfront payment; eligible for up to $525M in milestone per Amgen program; tiered high single- to double-digit royalties for sales and license of Kite's IP for CAR T cell products; Amgen eligible to receive up to $525M in milestones per Kite program; plus, tiered single-digit sales royalties

1/9/2015 Incyte Agenus Checpints and costims: GITR, OX40, LAG-3 and TIM-3

PC Agenus to receive $60M ($25M access fee plus $35M equity investment); also up to $350M milestones across the four lead programs

1/12/2015 MedImmune Omnis OV -Genetically engineered strain of VSV

P1 ND

1/21/2015 Celgene Zymeworks Bispecific PC

Zymeworks to receive initial upfront payment, and equity investment; eligible for up to $164M in milestones per successful therapeutic candidate; also to receive royalties on WW net sales

1/27/2015 Janssen Macrogenics Bispecific T-cell engager PC

MacroGenics to receive $50M upfront; J&J also invested $75M in purchase of new shares of MacroGenics common stock; Janssen will be fully responsible for developing MGD011 following submission of IND (2015); also up to and additional $575M in milestones and eligible for double-digit royalties and copromotion in the US

EvaluatePharma, Defined Health

26

Page 27 NYPF Meeting – 23 March 2015 © Defined Health

Strong Start for Immuno-Oncology Deals in 2015

Date Acquirer Originator Platform/Product Phase Terms

2/11/2015 Incyte Advaxis Vaccine: ADXS-HPV P2

Non-exclusive collaboration to evaluate the combination of ADXS-HPV with IDO1 inhibitor for cervical cancer; both companies will collaboratively conduct and fund the study, results to determine whether further clinical development is warranted

2/23/2015 BMS Rigel TGF-beta kinase inhibitors PC

BMS to obtain exclusive, WW rights to develop and commercialize small molecule therapeutics derived from Rigel’s TGF beta library, including, but not limited to, those approved to treat cancer; BMS to pay $30M upfront; Rigel eligible to receive up to $309M in milestones and tiered royalties on sales

2/23/2015 BMS Flexus IDO1 inhibitors PC

BMS buying out Flexus; including $800M upfront for PC immunotherapy that shows promise in treating cancer, with another $450 million set aside for milestones

3/4/2015 BMS Bavarian Nordic Vaccine: Prostvac P3

Bavarian Nordic to receive up to $975M including $80M upon exercise of the option plus additional incremental payments starting at $50M, but with a potential to exceed $230M should the median overall survival benefit of PROSTVAC exceed the efficacy seen in P2 results; also up to $495M in milestones and tiered double-digit royalties on sales

EvaluatePharma, Defined Health

27

Page 28 NYPF Meeting – 23 March 2015 © Defined Health

Soon This Type of Thing Will No Longer Be News

Novartis Announces Clinical Collaboration to Evaluate Bristol-Myers Squibb's Novel Immunotherapy in Combination Treatments for NSCLC October 06, 2014

Phase I/II studies will evaluate Zykadia(TM), INC280 and EGF816 in combination with Bristol-Myers Squibb's investigational immunotherapy Opdivo®

Combination studies will evaluate compounds that have demonstrated evidence of targeting mutations associated with tumor growth in patients with NSCLC

Collaboration highlights promising new treatment approach for patients and underscores Novartis' commitment to patients and the lung cancer community

Novartis announced today that it has entered into a clinical collaboration with Bristol-Myers Squibb Company (NYSE: BMY) to evaluate the safety, tolerability and preliminary efficacy of three molecularly targeted compounds in combination with Bristol-Myers Squibb's investigational PD-1 immune checkpoint inhibitor, Opdivo® (nivolumab), in Phase I/II trials of patients with non-small cell lung cancer (NSCLC). "Preclinical data suggests that combining molecularly targeted agents with immunotherapies such as nivolumab may have synergistic effects and lead to better outcomes for patients," said Alessandro Riva, MD, Global Head, Novartis Oncology Development and Medical Affairs. "This collaboration enables us to study several key compounds, including our new highly-potent ALK inhibitor Zykadia, together with a promising, novel immunotherapy agent, paving the way for potential new treatment approaches for patients with NSCLC."

Both studies will be conducted by Novartis. One trial will evaluate the combination of Opdivo with Zykadia(TM) (ceritinib), an FDA-approved treatment for patients with anaplastic lymphoma kinase-positive (ALK+) metastatic NSCLC who have progressed on or are intolerant to crizotinib[1]. A second study will investigate Opdivo with INC280, a potent and highly selective inhibitor of c-MET receptor tyrosine kinase, and separately with EGF816, a potent, third-generation EGFR tyrosine kinase inhibitor that is active against T790 mutations. INC280 and EGF816 are currently being investigated in various Phase I/II NSCLC trials. Additional details of the collaboration were not disclosed.

This collaboration with Bristol-Myers Squibb further advances Novartis' development efforts in the field of immunotherapy. Earlier this year, Novartis acquired CoStim Pharmaceuticals Inc., adding late discovery stage immunotherapy programs focused on key oncogenic targets, including PD-1. Novartis is also actively investigating the potential of chimeric antigen receptor (CAR) T cell technologies in the treatment of various liquid and solid tumors through its alliance with the University of Pennsylvania.

About Zykadia: Zykadia (ceritinib) is indicated in the US for the treatment of patients with ALK+ metastatic NSCLC who have progressed on or are intolerant to crizotinib. This indication is approved under accelerated approval based on tumor response rate and duration of response. An improvement in survival or disease-related symptoms has not been established. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials. Outside of the US, Zykadia (ceritinib) is an investigational agent and has not been approved by regulatory authorities. Regulatory reviews are currently underway in the European Union and several countries within South America, Central America and Asia.

About INC280 and EGF816 Because these are investigational compounds, the safety and efficacy profiles of INC280 and EGF816 have not yet been established. Access to these investigational compounds is available only through carefully controlled and monitored clinical trials. These trials are designed to better understand the potential benefits and risks of the treatments. Because of the uncertainty of clinical trials, there is no guarantee that INC280 and EGF816 will ever be commercially available anywhere in the world. Novartis licensed INC280 from Incyte Corporation and holds exclusive worldwide development and commercialization rights to the compound in all indications.

About Opdivo (nivolumab) Cancer cells may exploit "regulatory" pathways, such as checkpoint pathways, to hide from the immune system and shield the tumor from immune attack. Opdivo is an investigational, fully-human PD-1 immune checkpoint inhibitor that binds to the checkpoint receptor PD-1 (programmed death-1) expressed on activated T-cells. Bristol-Myers Squibb has a broad, global development program to study Opdivo in multiple tumor types consisting of more than 35 trials - as monotherapy or in combination with other therapies - in which more than 7,000 patients have been enrolled worldwide. Among these are several potentially registrational trials in NSCLC, melanoma, renal cell carcinoma (RCC), head and neck cancer, glioblastoma and non-Hodgkin lymphoma. In July, 2014, Opdivo received manufacturing and marketing approval in Japan for the treatment of patients with unresectable melanoma. Opdivo is also under review by the U.S. Food and Drug Administration and European Medicines Agency. Bristol-Myers Squibb has proposed the name Opdivo (pronounced op-dee-voh), which, if approved by health authorities, will serve as the trademark for nivolumab.

http://www.novartis.com/newsroom/media-releases/en/2014/1860778.shtml

One trial will evaluate the combination of Opdivo with Zykadia(TM) (ceritinib), an FDA-approved treatment for patients with anaplastic lymphoma kinase-positive (ALK+) metastatic NSCLC who have progressed on or are intolerant to crizotinib. A second study will investigate Opdivo with INC280, a potent and highly selective inhibitor of c-MET receptor tyrosine kinase, and separately with EGF816, a potent, third-generation EGFR tyrosine kinase inhibitor that is active against T790 mutations. INC280 and EGF816 are currently being investigated in various Phase I/II NSCLC trials.

Page 29 NYPF Meeting – 23 March 2015 © Defined Health

Spike in Collaborative R&D Deals Driven by Immuno-Oncology

IMS Pharma Deals

Page 30 NYPF Meeting – 23 March 2015 © Defined Health

Regenerative Medicine Getting Hot as Programs Near or Beyond PoC

Sectors to Watch in Biotech and Healthcare Investing: Regenerative Medicine 5 August 2014

Regenerative medicine has far-reaching implications for treating numerous devastating and costly diseases. The Alliance for Regenerative Medicine (ARM), a multi-stakeholder advocacy organization, defines regenerative medicine research as that which “translates fundamental knowledge in biology, chemistry and physics into materials, devices, systems and a variety of therapeutic strategies, which augment, repair, replace or regenerate organs and tissue.”

Regenerative medicine has the potential to treat a wide range of chronic and life-threatening diseases and conditions, including cancer, diabetes, genetic disorders, Parkinson’s, Alzheimer’s, ALS, macular degeneration, cardiovascular disease, and stroke. In addition, these advances have the potential to change the economics of both healthcare delivery and drug discovery by allowing for the treatment of the fundamental causes of disease and damage from injury and age. But regenerative medicine isn’t limited to just stem cell or cellular therapies, as is commonly thought. In addition to therapeutics (either alone or in combination with other technologies such as gene editing or bioengineering), regenerative medicine companies are also developing tools to aid in drug development, such as the creation of in vitro models of human disease to enable drug discovery, as well as drug efficacy and toxicity testing. Lastly, companies also are developing drugs that stimulate the body’s own innate capacity to regenerate or repair itself.

According to a recent report from ARM, the field has reached critical mass and has matured enough to be ready for commercial development. There are more than 700 companies worldwide with a regenerative medicine focus and the field is drawing an increasing level of interest and investment from industry, as evidenced by many of the major biopharma companies having active programs underway.

The combined regenerative medicine field, including cell, gene, and gene-modified cell therapies, generated $4.74 billion through partnering deals, acquisitions, and public and private investments from March 2013 to March 2014. There are close to 700 clinical trials currently underway with the largest areas of focus in oncology, CNS disorders, and cardiovascular diseases. And, the clinical pipeline is maturing with over one-third of those trials in later stages (Phase II or III). The rate of growth is reflected in the public markets: 25% of the biotech IPOs in the second half of 2013 were regenerative medicine companies. Gene therapy companies bluebird bio (Nasdaq: BLUE) and uniQure NV (Nasdaq: QURE) raised $116 million and $91.8 million, respectively, in their IPOs; Cellular Dynamics International (Nasdaq: ICEL), a manufacturer of stem cell tools, raised $46.1 million in its IPO. In the private markets, Juno Therapeutics, a cancer immunotherapy company, raised $145 million in its Series A round, one of the biggest ever in biotech.

This year promises to be a banner year with several companies expected to announce clinical trial results in stroke, cardiovascular diseases, cancer, and HIV, and more investigational new drug applications expected for the companies seeking to treat diabetes, Parkinson’s disease, and congestive heart failure, among other diseases.

http://www.poliwogg.com/news/125-sectors-to-watch-in-biotech-and-healthcare-investing

The combined regenerative medicine field, including cell, gene, and gene-modified cell therapies, generated $4.74B through partnering deals, acquisitions, and public and private investments from March 2013 to March 2014. There are close to 700 clinical trials currently underway with the largest areas of focus in oncology, CNS disorders, and cardiovascular diseases. And, the clinical pipeline is maturing with over one-third of those trials in later stages (P2 or P3). The rate of growth is reflected in the public markets: 25% of the biotech IPOs in the second half of 2013 were regenerative medicine companies.

Page 31 NYPF Meeting – 23 March 2015 © Defined Health

Gene and Cell Therapies Becoming Larger Force in Deal Space

Alliance Deal Type Asset / Class Indication (Phase)

Upfront ($MM)

Total ($MM)

Notes

Amgen/ BioVex ACQ

talimogene laherparepvec (HSV-1 Oncolytic vaccine & GM-CSF)

Melanoma (P2)

425 (575 in

Milestones) 1,000

Jan-2011: Amgen definitive agreement to acquire BioVex for $425M in cash plus up to $575M in milestone payments. BioVex will become a wholly owned subsidiary.

Amgen/ Merck Collab.

talimogene laherparepvec in combination with MK-3475

Melanoma (P2)

N/A N/A

Feb-2014: Amgen agreement with Merck to evaluate the safety and efficacy of talimogene laherparepvec in combination with MK-3475 in a P1b/2 study in patients with mid-to-late stage melanoma

Novartis/ UPenn

In-license WW Rights

CTL-019, CAR19-TCells

B-Cell malignancies

N/A

N/A

Novartis exclusive WW license to CARs for all indications & CART-19. Includes up-front payment + research funding + establishment of CACT + milestone payments.

Celgene/ Bluebird

License CAR T-Cell Technology

Juno/ MSKCC/ FHCRC/Seattle Children’s

License, Venture Funding

CAR T-Cell Technology

120 N/A

Juno Therapeutics landed $120 million in series A startup financing in a deal led by Arch Venture Partners and the Alaska Permanent Fund.

EvaluatePharma

2011-2014 Highlighted Cancer Gene Therapy Deals

Page 32 NYPF Meeting – 23 March 2015 © Defined Health

And Large Early Stage Deals Now More Common

Alliance License / Acq Class Phase at signing Upfront ($MM)

Total ($MM)

Pfizer/ Cellectis - T cell therapy Research project 80 2,855

Servier/ Cellectis In-licensed CD19 cell therapy Pre-clinical - 840

GSK/ Adaptimmune In-licensed Anti-NY-ESO-1 T cell therapy Phase II - 350

Intrexon/ MDACC/ U. Minn In-licensed Chimeric antigen receptor (CAR) T cell therapy

Research project - 110

ZIOPHARM Oncology/ MDACC/ U. Minn

In-licensed Chimeric antigen receptor (CAR) T cell therapy

Research project - 110

Amgen/Kite Pharma In-licensed Chimeric antigen receptor (CAR) T cell therapy

Research project - -

Celgene/ bluebird bio In-licensed Anti-cancer agent Research project - -

Juno Therapeutics/ Opus Bio

In-licensed CD22 cell therapy Phase I - -

Atara Biotherapeutics/ MSKCC In-licensed Anti-cancer agent Phase II - -

Ascend Bio/ Transgene In-licensed Oncolytic virus Phase II - -

Oxford BioMedica/ Novartis Out-licensed technology

T cell therapy Phase II - -

EvaluatePharma

Page 33 NYPF Meeting – 23 March 2015 © Defined Health

IPOs for Regenerative Platforms Now Common Across Development Stages

Company Class Highest Phase IPO Date Amount Raised by IPO ($MM)

Atara Biotherapeutics Cell therapy Phase II 10/16/2014 63.3

Bellicum Pharmaceuticals T cell therapy/Anti-GD2 cell therapy/Mesenchymal stem cell therapy

Phase II 12/18/2014 160.6

Bio-Matrix Scientific Group Cell therapy Preclinical 8/14/2014 -

Cardio3 BioSciences T cell therapy Phase I 6/20/2013 30.0

Juno Therapeutics Chimeric antigen receptor (CAR) T cell therapy/Anti-CD19 cell therapy/CD22 cell therapy

Phase II 12/19/2014 304.2

Kite Pharma Dendritic cell therapy/CAR T cell therapy/Anti-NY-ESO-1 T cell therapy

Phase II 6/20/2014 146.6

Lion Biotechnologies Cell therapy Phase II 9/26/2013 -

MabVax Therapeutics CAR T cell therapy Research 5/12/2014 -

TxCell Cell therapy Research 4/11/2014 22.4

Vascular Biogenics Gene therapy Phase II 10/1/2014 46.0

EvaluatePharma

Page 34 NYPF Meeting – 23 March 2015 © Defined Health

VCs Continue to be Very Active, Especially in Cell Therapies

Company Class Most Recent Financing Round

Financing Date

Investment ($MM)

Atara Biotherapeutics Cell therapy Series B 1/10/14 13.5

Bellicum Pharma T cell therapy/Anti-GD2 cell therapy/Mesenchymal stem cell therapy

Series C 8/27/2014 55

Cardio3 BioSciences T cell therapy PIPE 12/16/2013 3.4

Juno Therapeutics CAR T cell therapy/Anti-CD19 cell therapy/CD22 cell therapy

Series B 8/5/2014 134

Kite Pharma CAR T cell therapy/Anti-NY-ESO-1 T cell therapy Series A 5/15/2013 20

Lion Biotechnologies TIL Cell therapy PIPE 11/6/2013 23.3

MabVax Therapeutics CAR T cell therapy Series D 7/9/2014 3

Cellectis IL-2/Anti-CD19/Anti-BCMA/Anti-CD38/Anti-EgfrVIII CAR T cell therapy

PIPE 3/31/2014 28

Sorrento Therapeutics NK cell therapy PIPE 12/15/2014 -

Adaptimmune Anti-NY-ESO-1 T cell therapy Series A 9/25/2014 104

Cell Medica Stem cell therapy Series B 11/25/2014 80.4

Conkwest NK cell therapy, HER2 (ErbB-2) inhibitor, CD20 inhibitor,

Undisclosed 12/24/2014 50

EvaluatePharma

Page 35 NYPF Meeting – 23 March 2015 © Defined Health

Areas Outside of Oncology Continue to Lag in the Pipeline, Though Early Stage Interest Growing in CNS and Obesity

Thomson Reuters Cortellis, ADIS R&D Insight

0

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Filed Phase III Phase II Phase I Preclinical Research

Nu

mb

er

of

Dru

gs

Number of Drugs in Development by Therapeutic Category

CVD Diabetes

Obesity CNS

Genito-Urinary Musculo-skeletal

Oncology Respiratory

Systematic Anti-infectives Others

Page 36 NYPF Meeting – 23 March 2015 © Defined Health

202015 Dealmaking Outlook 205 Dealmaking Outlook 2

2015 Dealmaking Outlook

SPEAKERS:

♦ Elaine Jones, PhD Executive Director, Venture Capital, Pfizer Venture Investments

♦ Alan Paau, MBA, PhD, CLP Chairman, Guangda Cooperation International Technology Center, Co. Ltd. (China); Former Vice Provost for Technology Commercialization - Global Initiatives Cornell University

♦ Jocelyn Trokenheim, Senior Director, Global Licensing and Business Development, Takeda Pharmaceuticals International

♦ Brianne Weingarten, Executive Director, Licensing & Business Development Alliance Management, Purdue Pharma L.P.

MODERATOR:

♦ Ed Saltzman, President & Founder, Defined Health

New York Pharma Forum March Program