Joel S.Marcus, Chairman/CEO Alexandria Real Estate Equities, Inc. IASP World Conference on Science & Technology Parks D. EQUITIES, INC.
ALL RIGHTS RESERV 1 © 2009, ALEXANDRIA REAL ESTAT Life Science Industry Drivers Industry Drivers Healthcare Policy/Trends " Continued Unmet Medical Needs " Aging population " Emerging markets " Rising costs of US healthcare " Stimulus Funding " Maturing Biotech Industry " Biotech validated as innovator/partner " Growing appetite for " . or " $3.6B for NSF/NIST " FDA Conservatism " Safet /Efficac bar is risin LL RIGHTS RESERVED. " Pharma Under Pressure " Patent expiration " Thinning pipelines " Comparative Effectiveness " Payer Reimbursement Trends NDRIA REAL ESTATE EQUITIES, INC.
" " Consolidation of pharma " Motivated buyer and partner " May erode patent value " Proposed Biosimilar Legislation 2 © 2009, ALEX Capital Raised by the Bi hn l In r LL RIGHTS RESERVED. NDRIA REAL ESTATE EQUITIES, INC. 3 © 2009, ALEX Source: Burrill & Company U.S.
Healthcare Spending N i n l H l h r Ex n i r How Each Healthcare Dollar is S ent Rx Drugs Administrative and Net Costs 10% 8% 7% Home Health Nursing and Home Care LL RIGHTS RESERVED. 21% 31% Physicians and Clinical ... more. less.
Services Hospital Care NDRIA REAL ESTATE EQUITIES, INC. 23% Other 4 © 2009, ALEX Source: Centers for Medicare & Medicaid Services, January 2008 Source: CMS, Office of the Actuary, National Health Statistics Group.<br><br> Projections are based on the 2006 version of the NHE released in January 2008 Life Science Investing Climate " IPO window remains shut " M&A continues to be the only exit for private biotechs " 44% of publicl listed biotech companies have less than a ear of cash " Small-cap public biotechs low valuations - sometimes beating the private side LL RIGHTS RESERVED. " Life Science venture funds continue to raise funds, but sometimes falling short of goals due to cash constrained LPs (endowments & pension funds) NDRIA REAL ESTATE EQUITIES, INC. Over 90% of VCs believe it will be more difficult to sustain existing portfolio companies & harder for new companies to get funded in 2009 according to a recent NVCA survey 5 © 2009, ALEX Emerging Trends for Life Science Investing " Focus on capital efficiency " Investors seeking companies with near term milestones, assets that partners will pay for, limited debt exposure, management teams that efficiently manage capital " Syndication increasingly important to ensure co-investors with deep pockets " Top up financings instead of next round financings more LL RIGHTS RESERVED.<br><br> " Some VCs less concerned about dilution " Corporate VCs helping fill the gap on private investments NDRIA REAL ESTATE EQUITIES, INC. " VCs are investing in undervalued public biotechs through PIPE financings (with warrant coverage for upside protection) " VCs will continue to fund the most promising companies, investing more cash in fewer companies over longer periods of time 6 © 2009, ALEX New Breed of Life Science Financing Venture Investin in Undervalued Biotechs " Slightly down is the new cup d Venture Vehicles " New venture models emerging 3 capital and bandwidth efficient " VCs are seeking work-outs/restarts of public biotechs through PIPE financings " Accelerator Corporation is an alternative investment vehicle designed to conserve capital and de-risk investments LL RIGHTS RESERVED. Increased Corporate Venture Activity " NDRIA REAL ESTATE EQUITIES, INC.<br><br> " Increasing number of new venture rounds are including corporate venture investments 7 © 2009, ALEX Panelists . , . ., .<br><br> . . Chairman/CEO - Alexandria Real Estate Equities, Inc.<br><br> aren e er CEO and Co-founder, Southeast TechInventures, Inc. LL RIGHTS RESERVED. Art Pappas Managing Partner and Founder, Pappas Ventures NDRIA REAL ESTATE EQUITIES, INC.<br><br> Garheng Kong General Partner, Intersouth Partners 8 © 2009, ALEX