CBI’s 3CBI’s 3rdrd Annual Annual Bio/Pharmaceutical Collaboration Bio/Pharmaceutical Collaboration and Transaction Accounting and Transaction Accounting ConferenceConferenceSeptember 22, 2009September 22, 2009

Joint Finance Committee Joint Finance Committee Perspectives on How to Best Perspectives on How to Best Work with Collaborators and Work with Collaborators and

Manage ExpectationsManage Expectations

Our Panelists:Our Panelists:

• Christian Blin, Vice President, sanofi-aventisChristian Blin, Vice President, sanofi-aventis• Christopher Fenimore, Director of Finance, Christopher Fenimore, Director of Finance,

Regeneron PharmaceuticalsRegeneron Pharmaceuticals• Dominic Piscatelli, Sr. Director Finance, OSI Dominic Piscatelli, Sr. Director Finance, OSI

PharmaceuticalsPharmaceuticals• Thomas Hess, Chief Financial Officer, Thomas Hess, Chief Financial Officer,

Yaupon TherapeuticsYaupon Therapeutics• Christopher Lindblom, Controller, Infinity Christopher Lindblom, Controller, Infinity

PharmaceuticalsPharmaceuticals• Susan Melle, Finance Director, Susan Melle, Finance Director,

GlaxoSmithKlineGlaxoSmithKline• Alan Esenstad, Controller, Human Genome Alan Esenstad, Controller, Human Genome

SciencesSciences

Lessons Learned – JFC Lessons Learned – JFC PerspectivePerspectiveKeys to a Successful Keys to a Successful CollaborationCollaboration Understand and be transparent with your partnersUnderstand and be transparent with your partners– Take into account the differences in your partner’s Take into account the differences in your partner’s

culture, size and objectivesculture, size and objectives– Results in a stronger relationshipResults in a stronger relationship– Develops a level of trust and confidenceDevelops a level of trust and confidence

Know your collaboration agreement (the Know your collaboration agreement (the “contract”) and determine how the contract would “contract”) and determine how the contract would address particular issuesaddress particular issues– Provide “real-world” instances where a deviation from Provide “real-world” instances where a deviation from

the contract may be warrantedthe contract may be warranted– Use the “spirit” of the agreement to determine how Use the “spirit” of the agreement to determine how

issues should be handled that are not specifically issues should be handled that are not specifically defineddefined

Lessons Learned – JFC PerspectiveLessons Learned – JFC PerspectiveKeys to a Successful CollaborationKeys to a Successful Collaboration

Attempt to resolve disputes internally and at the Attempt to resolve disputes internally and at the finance level without having to refer to higher finance level without having to refer to higher governing bodygoverning body– Be aware of your partner’s alternative views; negotiate Be aware of your partner’s alternative views; negotiate

collaboratively, be flexible where prudentcollaboratively, be flexible where prudent Clear and frequent communicationClear and frequent communication

– Develop formal meeting schedules and establish the Develop formal meeting schedules and establish the principles for how the partners will work togetherprinciples for how the partners will work together

– Develop absolute clarity on plans, accountability and statusDevelop absolute clarity on plans, accountability and status– Don’t let key items wait until the next meeting (set the stage Don’t let key items wait until the next meeting (set the stage

via email or phone)via email or phone)– Set meeting agendas and take great minutesSet meeting agendas and take great minutes

3rd Annual Bio/Pharmaceutical Collaboration and Transaction Accounting Conference

September 22, 2009

Christian Blin, Vice President, sanofi-aventis

Christopher Fenimore, Director of Finance, Regeneron

Overview of sanofi-aventis

Sanofi-aventis is a global healthcare company engaged in the research, development, manufacture and marketing of healthcare products

Business is diversified and includes pharmaceuticals comprising Rx (prescription) drugs, OTC/OTX (over-the-counter / combined OTC and Rx drugs) and generics; vaccines and animal health

2008 net sales: €27.8 B; H1 2009 net sales: €14.5B

Pharmaceuticals business focuses on six therapeutic areas: thrombosis, cardiovascular diseases, diabetes, oncology, central nervous system (CNS) and internal medicine

Sanofi-aventis has a commercial presence in approximately 100 countries, and our products are available in more than 170 countries.

Approved product with $15-20MM in projected annual sales

9 Ph 3 trials underway … Many shots on goal

Ph 3 data coming in 2010

3 human mAbs in clinic today; target 2-3 new mAbs to enter clinic each year, 2009-2012; balance of novel and validated targets

Cash of $466MM (at 6/30/09) and no debt; resources expected to support operations through 2012

Manufacturing expertise; expanding to 50k liters capacity

Current market cap of approximately $1.7B – among the 20 largest biotechs

Regeneron Today

Aflibercept (VEGF Trap)

cancer

VEGF Trap-Eye

wet AMD

ARCALYST® (rilonacept)

gout

Collaboration Agreements

sanofi-aventis

Bayer HealthCare

sanofi-aventis –

Upfront/milestone payments $130MM $115MM $85MM –

Development costs paid by partner * 100% ~50% ~100%** –

Profit split — Regeneron share

US 50% 100% 50% 100%

Japan ~35% royalty 50% 35-45% 100%

ROW 50% 50% 35-45% 100%

Milestones remaining

Regulatory $400MM $70MM – –

Sales – $135MM $250MM –

* 50% repayment from profits ** plus $475MM of research funding over 5 years

Oncology Eye Disease Antibodies Inflammation

Aflibercept (VEGF Trap)

Aflibercept (VEGF Trap)Phase 3 Oncology Program

Total # of Patients

VELOUR study: 2nd line metastatic colorectal cancer(+ leucovorin, fluorouracil & irinotecan) 1200

VANILLA study: 1st line metastatic pancreatic cancer (+ gemcitabine) 630

VITAL study: 2nd line non-small cell lung cancer (+ docetaxel) 900

VENICE study: 1st line metastatic hormone resistant prostate cancer (+ docetaxel and prednisone)

1240

Patients randomized to standard of care chemotherapy +/- aflibercept

Each study more than 60% enrolled; total of 2,500 patients to date

Studies monitored by Independent Data Monitoring Committees (IDMC)

Results expected starting in 2010

Human Antibodies

Sanofi-Aventis Antibody Collaboration

Global collaboration to discover, develop, and commercialize therapeutic human antibodies

Sanofi-aventis funds $475 million of discovery research over five years through 2012

Sanofi-aventis funds 100% of development costs for collaboration antibodies

Goal is to bring average of 2 to 3 new antibodies into clinical development each year

Three antibodies in Ph 1

Two more INDs planned for 2009

Shaping Medicine, Changing LivesDominic Piscitelli

Sr. Director Finance

September 2009

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An Historical UpdateEvolution From a Technology Platform to a Cancer Company

Tarceva Jointly Discovered in Oncology Partnership With Pfizer

2000: Tarceva Rights Returned to OSI as an FTC Requirement for Pfizer’s Acquisition of Warner-Lambert

2000-2004: Established Oncology Franchise to Ensure Tarceva Success– Acquired Oncology Development & Regulatory Capabilities and Built

Commercial Organization

– Established Alliance With Genentech/Roche to Ensure Global Competitiveness

– Successfully Managed Phase III Trials and FDA Approval of Tarceva in NSCLC & Pancreatic Cancer

2005-2008: Began to Build Framework for a Premier Biotech– Increased Investment in Diabetes/Obesity pipeline

– Continued Investment in Oncology Pipeline

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Tarceva Collaboration Agreements Highlights

Co-Developer of Tarceva

Exclusive Marketing Rights for Tarceva in the US

– OSI has Co-Promotion Rights

Operating Losses and Profits are Shared Equally

OSI is Responsible for Manufacturing of the Product

OSI is Entitled to Certain Milestone Payments

Co-Developer of Tarceva

Exclusive Marketing Rights for Tarceva in the World Excluding the US

OSI receives a 21% Royalty on Net Sales

Roche has Exclusive Manufacturing Capabilities for the World ex-US

OSI is Entitled to Certain Milestone Payments

Three Parties have a Comprehensive Ongoing Clinical Development Program to Support the Long-Term Growth of Tarceva

- Tri-Partite R&D Expenses Shared Three Ways

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Tarceva Sales in the US and Related Revenue Recognition

Sales of Tarceva recorded by Genentech

50/50 net profit split recorded as Revenue by OSI on a quarterly basis

OSI also records Revenue relating to reimbursement for Manufacturing and Commercial costs

Total US Revenue recorded by OSI as a percentage of Tarceva Sales is referred to by OSI as the Conversion Factor

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Key Committees

Global Development Committee (GDC)

– Responsible for directing the clinical development of the product– Review and approve development proposals and budgets

Joint Steering Committee (JSC)

– Approve overall strategy of collaboration– Oversee and manage the product development and commercialization – Manufacturing related activities – Review and approve annual marketing and sales budgets

Joint Finance Team

– Work under direction of JSC– Financial, budgetary and accounting issues

Joint Project Teams – Clinical, Marketing, Sales, etc

Adolor/Pfizer Delta CollaborationAdolor/Pfizer Delta CollaborationThomas Hess

Former Chief Financial Officer of Adolor Corporation Former Chief Financial Officer of Adolor Corporation (currently CFO of Yaupon Therapeutics)(currently CFO of Yaupon Therapeutics)

© 2008 Adolor Corporation. All rights reserved.

n Date: December 2007

n Focus: Delta opioid agonists for pain

n Lead Compound: ADL5859

n Upfront Payment: $30M + $1.9M reimbursement for Phase 2a studies

n Milestones: $232.5MM

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Adolor/Pfizer Collaboration – Highlights

n Back End

United States

Profits/Losses shared 60% to Pfizer and 40% to Adolor

- US development expenses (external) to be shared in same proportion

Rest of World

Adolor to receive royalties on Pfizer net sales

- ROW development expenses – 100% Pfizer

n Provisions for adding compounds and indications

n Development Collaboration

Adolor: IND filings and clinical program through Phase 2a

Pfizer: Subsequent worldwide development and regulatory approvals

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Adolor/Pfizer Collaboration – Highlights

Adolor had the “option” to attend all JSC meetings!

Adolor is not obligated to attend collaboration meetings.

Two compounds in the clinic as of the collaboration date.

Adolor responsible for the development of each compound through

Phase 2a and then Pfizer assumes all responsibility.

Adolor’s project management projected that compound I & II would

be completed in February 2010 (26 months from collaboration

inception). Therefore, amortize upfront payment over 26 months.

Adjust if Phase II takes more/less time.

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Revenue Recognition Considerations

Innovative. Independent. Inspired.

Purdue Alliance: $500M potential over 5 years

Hedgehog inhibitor program and discovery pipeline

Economics

Independence

• $75 million equity purchase at avg. price of $12.50• $50 million line of credit, 10 year balloon note at prime• ~$400 million R&D funding over 5 years• Up to $200 million in warrant purchases at $15 - $40/share• Up to 20% royalties on all ex-U.S. sales

• Infinity leadership of worldwide discovery and development• Infinity to commercialize oncology products in the U.S.

Innovative. Independent. Inspired.

• Worldwide collaboration: R&D and commercial

• Compelling economics: Control INFI cash burn, significant downstream participation

– $70M upfront; $215M potential milestones

– R&D cost share and 50/50 WW profit split

– Co-promotion rights in US

• Provided global oncology infrastructure and reach

MedImmune/AstraZeneca alliance on Hsp90

HGS / GSK Collaboration

GSK / HGS Historical Collaborations GSK is a global pharmaceutical company, with annual sales in

excess of US$38B (£24B), arising from pharmaceutical and consumer products over 8 major therapeutic areas. These sales and much of our R&D efforts arise in part from a diverse range of collaborations.

HGS is a late-stage biotech company, with three products in Phase 3 development, one of which is being co-developed with GSK.

Ground breaking HGS/SB Genomic collaborative agreement signed in 1993

– Shared access to HGS’ sequence dB for target discovery

GSK exercised option to co-develop and co-promote BENLYSTATM in 2005.

– Agreement signed in 2006.

GSK / HGS BENLYSTA Collaboration

HGS wrapping up Phase 3 development

50 \ 50 cost sharing of development costs since 2006 (Clinical expenses, FTEs, drug supply, certain outside services)

Global commercialization

– HGS \ GSK share U.S. and ex-U.S. commercialization

Roles & Responsibilities

HGS\GSK Governance Structure

Joint Steering

Committee

Joint Manufacturing

Committee

Joint Development Committee

Global Joint Marketing Committee

Joint FinanceCommittee &

Sub-teams

Joint Finance Committee

Lead representative from each partner, with additional financial personnel on team

Participation from project management, operations and other areas (either ongoing or ad-hoc)

Joint Finance Committee RoleRole:

Prepare and monitor budgets and forecasts and changes to plan

Participate in operational team meetingsSupport collaboration governance committeesSupport analysis and evaluation of program changes

Establish and maintain effective financial oversightMonthly or ad-hoc meetings, facilitated by standard financial

reviews and templatesReview and approval process through governance structure

for life cycle plans or annual budgets, actual expenses, changes or other key items

Panelist Q&APanelist Q&A

JFC Panel Contact InformationJFC Panel Contact Information

• Doug McCorkle (Regeneron):Doug McCorkle (Regeneron): douglas.mccorkle@regeneron.com

• Christian Blin (sanofi aventis):Christian Blin (sanofi aventis): Christian.Blin@sanofi-aventis.com

• Christopher Fenimore (Regeneron):Christopher Fenimore (Regeneron): christopher.fenimore@regeneron.com

• Dominic Piscatelli (OSI):Dominic Piscatelli (OSI): DPiscatelli@OSIP.com• Thomas Hess (Yaupon):Thomas Hess (Yaupon): THess@yaupontherapeutics.com• Christopher Lindblom (Infinity):Christopher Lindblom (Infinity):

Christopher.Lindblom@infi.com• Susan Melle (GlaxoSmithKline):Susan Melle (GlaxoSmithKline): Susan.M.Melle@gsk.com• Alan Esenstad (Humane Genome Sciences):Alan Esenstad (Humane Genome Sciences):

Alan_Esenstad@hgsi.com