Healthcare Report

Healthcare Investments
and Exits
Mid-Year 2016 Report
Written by:
Jonathan Norris Paul Schuber

Managing Director Valuations Associate
Silicon Valley Bank SVB Analytics
Table of Contents
Key Highlights 1H 2016
Healthcare Investments and Fundraising
Analysis of Top 15 Crossovers
Healthcare Big Exit M&A and IPO Review
Glossary
About the Authors
Healthcare Investments and Exits, Mid-Year 2016 Report 2

Key Highlights 1H 2016: New Patterns Emerging
Like investing and exits overall, healthcare saw a bumpy road in the first
half of 2016but also some surprising highlights.
Venture fundraising declines, but Series A investment is up in all three sectors.
We expect healthcare investment to reach $9B-$9.5B for full-year 2016, down
slightly from 2015.
Crossover investment slows, but newly raised funds, corporate venture and family
offices are largely filling the gap. Crossover investors are instead focusing on
getting biopharma portfolio companies to an IPO. [propelling suggests strong
IPO market, which is not the case, see above]
Potential distributions are on pace to reach $15B-$17B for the full-year 2016.
Biopharma round sizes are skyrocketing, while exits continue to focus on early-stage
companies.
Device remains healthy, as M&A deals and dollars are on pace to meet full-year 2015.
Dx sees exit pullback as early commercialization is slow. However, investing is
picking up, as likely will M&A activity.

Healthcare Investments
and Fundraising

Investors See Strong Future in Healthcare
U.S. Healthcare: Venture Dollars Invested and Raised
With very healthy funding over the
11 last few years, we continue to see
$10.5B
10 strong investment into companies
9 and expect it to continue for at
least the next two years.
8
$7.5B
7
Based on Q1 2016 data, we think
$ Billions
6
investment into companies will
5 reach between $9-$9.5B for the
4 full year, down slightly from 2015.
3 This reflects less crossover
2 activity.
1
0 Fundraising in 1H 2016 is down
2009 2010 2011 2012 2013 2014 2015 40%, primarily driven by the
closing of three big funds ($2.75B
Capital Flow
127% 368% 207% 189% 175% 149% 141%
in total) in 2015. But we continue
Ratio
to see LP interest in investing into
the sector.
HC VC $ Invested into Companies HC VC $ Fundraised Gap in Funding
Source: PricewaterhouseCoopers, Thomson Reuters and SVB proprietary data Healthcare Investments and Exits, Mid-Year 2016 Report 5
Series A Activity is Strong across All Sectors
U.S. Company Formation: Deals and Investments in Series A
2013 2014 2015 1H 2016 Biopharma is on pace in 2016 for
120 87
100+ deals (up 30% over 2015) with
75 $2B in invested capital. Both would
# of Deals
BIOPHARMA 80 60 58
be record highs, if investment
40 velocity continues.
0
Total Series A ($M) $1,107 $862 $1,843 $994 Lots of preclinical focus,
especially among platform,
CVC Deals % / # 28% / 17 27% / 20 26% / 23 33% / 19
oncology, anti-infectives,
120 neurology, orphan/rare disease
companies
# of Deals
80
DEVICE 38 42
40 18 24 Device deals already have eclipsed
2015 totals, driven by angel activity.
0
Total Series A ($M) $227 $337 $92 $104 Significant investment activity
CVC Deals % / # 18% / 7 14% / 6 22% / 4 4% / 1 among neurology, cardiovascular
and surgical companies
120
Dx/Tools deals and dollars in 1H
# of Deals
DX/TOOLS 80 2016 have exceeded 2015 totals,

39 34 despite an M&A pullback.
40 17 24
0 Grail raised $125M in Series A

Total Series A ($M) $234 $252 $165 $263 accounting for almost half of
CVC Deals % / # 10% / 4 12% / 4 24% / 4 21% / 5 dollars raised in 1H 2016
Source: CB Insights, PitchBook, press releases and SVB proprietary data Healthcare Investments and Exits, Mid-Year 2016 Report 6
Venture and Corporate Investors Keep Active
Most Active* New Investors in Biopharma 2015 versus 1H 2016
Trends suggest the number of
Top 2015 VC+CVC Biopharma Top 1H 2016 VC+CVC Biopharma deals by the most active investors
will increase 30% over 2015.
INVESTOR DEALS TYPE INVESTOR DEALS TYPE
Pfizer Venture Pfizer, a corporate investor, leads

OrbiMed Advisors 16 VC 9 Corporate all investors with 9 new deals in
Investments
New Enterprise 1H 2016.
9 VC OrbiMed Advisors 8 VC
Associates
Novartis Venture The majority of the most active
9 Corporate Frazier Healthcare 6 VC VCs in 1H 2016 have raised new
Funds
funds between January 2015 and
ARCH Venture Partners 8 VC Novo 6 VC June 2016.
AbbVie Biotech
Sofinnova Ventures 8 VC 5 Corporate Active crossover investors include
Ventures
Deerfield Management (7), Fidelity
Novo 7 VC ARCH Venture Partners 5 VC Investors (4) and Cormorant Asset
Management (4). See slide 13.
Pfizer Venture New Enterprise
7 Corporate 5 VC
Investments Associates
Versant Ventures 7 VC Canaan Partners 4 VC
Celgene 6 Corporate MPM Capital 4 VC
Johnson & Johnson Johnson & Johnson

6 Corporate 3 Corporate
Innovation Innovation
SR One 6 Corporate Roche Venture Fund 3 Corporate
*Most active defined as top 60 investors based on new investments.

Oncology Leads New Biopharma Investments
Most Active* New VC Investments in Biopharma by Indication 20151H 2016
Anti-Infective Metabolic Auto-Immune

Platform 9 deals 6 deals
22 deals 22 deals $232M
$243M
$686M $914M
Oncology
62 deals
$2,419M Gastrointestinal Ophthalmology
6 deals 5 deals
$128M $201M
Neurology Orphan/Rare
22 deals Disease
$816M 19 deals
Cardiovascular Respiratory
$749M 5 deals 4 deals
$109M $155M
Oncology has almost three times the number of deals compared to any other category.
Anti-infective, ranked 9th in deals in our 2014 analysis, is now tied for 2nd.
Platform, orphan/rare disease and neurology continue to receive significant investment. Metabolic and ophthalmology have
decreased.
*Most active defined as top 60 investors based on new investments

Biopharma Deal Size Increases
Median Deal Size by Top 60 VC and Corporate Investors
Median investment round size
$45 $42.8 from most active investors has
increased 40% over 2015.
$40
The median deal size has
increased almost three times since
$35 2013.
$30.0
Median Deal Size ($ Millions)
$30 Recent larger equity raises in

biopharma could compress M&A
$23.0 multiples down the road,
$25
especially as IPO optionality
declines.
$20
$15.3
$15
$10
$5
$0
2013 2014 2015 1H 2016
Device Gains Traction Among Diverse Investors
Active* Investors in Device 1H 2016
Highlights of the Largest 1H 2016
Active Investors Investors Actively Looking for Deals Device Deals:
INVESTOR TYPE INVESTOR TYPE The median deal size jumped to
Action Potential Venture $46M in Q2 2016 the largest
Corporate Endeavour Vision VC
Capital median round size in two years
Aisling Capital VC HealthQuest Capital VC The larger deal sizes
underscore the funding of later-
BioStar Ventures VC KCK Group Family Office stage pivotal trial and/or
commercialization rounds
Deerfield Management Crossover Longitude Capital VC Cardiovascular received the
most investments in 1H 2016;
Edwards Lifesciences Corporate New Enterprise Associates VC this indication requires
significant clinical trial
GE Ventures Corporate Sante Ventures VC investment. We also saw recent
M&A activity in this indication,
Johnson & Johnson
Innovation
Corporate Sofinnova Partners VC with 8 of 17 device big exits in
2015
Medtronic Corporate SV Life Sciences Advisers VC
OrbiMed Advisors VC Venrock VC
Sante Ventures VC Vertex Healthcare VC
*Active defined as investors that are actively investing or actively looking at deals
Top Dx/Tools Round Sizes Increase
Active* Investors in Dx/Tools 1H 2016
Highlights of the Largest 1H 2016
Active Investors Investors Actively Looking for Deals Dx/Tools Deals:
INVESTOR TYPE INVESTOR TYPE
Dx/Tools deal size surged to a
ARCH Venture Partners VC Arboretum Ventures VC median of $41M in Q2, nearly
tripling the 2015 median. Half
Cormorant Asset
Crossover Baird Capital VC of these investments were
Management
either Series A or B
Gilde Investment
Fidelity Investments Crossover VC
Management
The deals were equally split
Foresite Capital
Crossover OrbiMed Advisors VC between Dx and Tools
Management
Illumina Ventures Corporate Qiagen Corporate The number of investments by the

Top 15 Crossovers in 1H 2016
Paladin Capital Group VC Sequoia Capital VC equaled all of 2015.
Pfizer Venture Investments Corporate Venrock VC
Roche Venture Fund Corporate Wuxi Venture Fund VC
*Active defined as investors that are actively investing or actively looking at deals
Analysis of Top 15 Crossovers:
Investments Decline as
Investors Focus on IPOs

Top 15 Crossovers:
Investments in Biopharma Decline Rapidly
2013 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Total
PRIVATE
15 68 27 46 68 22 16 13 275
INVESTMENTS
MOST ACTIVE CROSSOVER INVESTORS 1H 2016

INVESTOR DEALS
Deerfield Mgmt 7
Fidelity Investments 4
Cormorant Asset Mgmt 4
Sectoral Asset Mgmt 3
Crossover investment dropped almost 70% from 2H 2015. However, we still see crossover investor activity, and this group continues
to be an important part of the biopharma ecosystem.
In 1H 2016, 70% of crossover deals were in Series A and B.
Interesting thought: Will crossover investors continue to support portfolio companies that need to raise another private round?
Top 15 Crossover Investors: Adage Capital Management, Casdin Capital, Cormorant Asset Management, Deerfield Management, EcoR1 Capital, Fidelity Investments, Foresite Capital
Management, Jennison Associates, Perceptive Advisors, RA Capital Management, Redmile Group, Rock Springs Capital, Sectoral Asset Management, Wellington Management, Woodford
Investment Management
Top 15 Crossovers:
Investors Push for Biopharma IPOs
70
60 58
Crossover IPOs as Percentage of Exits
50
IPO / Total Exits (M&A + IPO) 55/61 (90%)
40
# of IPOs
32
30
Top 15
23 Crossover
22
20
Private Company Backlog
19
8
10
2 8 Still Private / Total Deals 74/135 (55%)
Other Investors
0
2013 2014 2015 2016*
*Estimate based on 1H 2016 IPOs
Our analysis shows that biopharma companies with a top 15 crossover investor are much more likely to go public. Of a remarkable
45%+ exit rate (IPOs/M&As) since 2013, 90% of those exits have been IPOs.
In 1H 2016, 11 of 15 VC-backed biopharma IPOs had a top 15 crossover as a private investor. The number of top 15 crossover IPOs is
on pace to match 2015, which is remarkable in a declining IPO market.
The challenge ahead: 55% of the Top 15 crossovers portfolio is still private. This suggests in 2H 2016 the focus will be on getting
companies public instead of making new private investments.
Top 15 Crossover Investors: Adage Capital Management, Casdin Capital, Cormorant Asset Management, Deerfield Management, EcoR1 Capital, Fidelity Investments, Foresite Capital
Management, Jennison Associates, Perceptive Advisors, RA Capital Management, Redmile Group, Rock Springs Capital, Sectoral Asset Management, Wellington Management, Woodford
Investment Management
Healthcare Big Exit M&A and IPO Review:
Robust M&A Activity
Continues as IPOs Slow

Large Stemcentrx Deal Propels Overall
Distributions
Potential Distributions* from VC-Backed IPOs
and Big Exit M&A 20121H 2016
One deal, Stemcentrxs acquisition
24
by AbbVie, contributed almost half
22
of all 1H 2016 total potential
20 distributions.
Total Value ($ Billionis)
18
16 Barring another multibillion-dollar
14 exit in 2H 2016, potential
12 distributions are on pace to reach
10 between $15B-$17B.
8 While below the record 2015 high,
6 this signals another good year for
4 investors.
2
0
2012 2013 2014 2015 1H 2016
Biopharma 64% 80% 69% 69% 85%
*Potential distributions are

Device 27% 12% 21% 23% 13%
calculated assuming 75 percent
venture ownership for upfront
Dx/Tools 9% 8% 10% 8% 2% payments. IPOs are based on the
pre-money valuation assuming 75
Big Exit Upfront Payments Big Exit Milestones to be Earned Pre-Money IPO Value percent venture ownership. M&A
milestone payments are
discounted to 25 percent.
Strong Biopharma M&A Continues, while
IPO Market Slows
VC-backed Biopharma Exits by Quarter 2013-1H 2016
Based on 1H 2016, biopharma
Q1 Q2 Q3 Q4 Total IPOs are on pace to reach a full-
year total similar to 2013.
IPO 3 10 13 8 34
Of the 15 IPOs in 1H 2016, 7
2013 companies were trading above
M&A 3 3 3 3 12 their IPO price and 8 below at the
end of the first half of 2016.
IPO 24 12 17 13 66
We expect M&A deals to pick up in
2014
2H 2016 and exceed 2015 totals.
M&A 3 4 6 1 14
IPO 11 12 9 10 42
2015
M&A 7 4 6 4 21
IPO 7 8 15
2016
M&A 5 4 9
Early-Stage Companies Dominate
Biopharma IPOs
VC-backed Biopharma IPOs by Stage 20121H 2016
Stage 2012 2013 2014 2015 1H 2016
Pre-Clinical /
1 9 29 18 9
Phase 1
Total Biopharma
10 34 66 41 15
IPOs
% Early-Stage IPOs 10% 26% 44% 44% 60%
Biopharma IPOs were focused predominantly on early-stage companies in 1H 2016.
Median IPO dollars raised was $54M, a decrease from 2015. Median pre-money valuation of $172M is healthy, but is below the 2H
2015 median of $200M+.
Following a strong 2015 for neurology and anti-infective IPOs, these indications had none in 1H 2016. This may be related to some
clinical setbacks from newly public companies over the last six months.
Biopharma M&A Multiples Surge;
Early-Stage Focus Continues
VC-backed Biopharma Big Exit M&A by Stage 20121H 2016
Biopharma deals in 1H 2016 had a
20 strong median upfront multiple of
4.7X. Even more impressive, the
18 median all-in multiple reached 14X
(up significantly from 2014 and
16 2015).
14 Seven out of nine M&A deals were

pre-clinical or Phase I:
12
# of Big Exits
Pre-clinical deals were in

10 neurology, auto-immune and
orphan/rare disease
8
Phase I deals were in oncology
6 (2 deals), metabolic and
aesthetics/dermatology
4
0
2012 2013 2014 2015 1H 2016
Pre-Clinical Phase I Phase II Phase III Commercial
Early-Stage Biopharma M&A Deal Value
Increases as Exit Time Decreases
Deal Size and Time to Exit (Pre-Clinical & Phase I) Median upfront dollars are
increasing ($300M+), even as IPO
5.3 5.6 optionality is decreasing.
5.0 4.7
4.1 $600M This suggests competition among
$600M
$500M
acquirers, leading them to pay up
$413M at deal close to acquire early stage
$325M assets.
Biopharma M&A continues to show

n=5 n=3 n=8 n=11 n=7 a quick time to exit.
2012 2013 2014 2015 1H 2016
Median Total Deal Size Median Time to Exit (years)
Median Deal Size (Pre-Clinical & Phase I)

$325M $500M $413M $600M $600M
26.0%
48.3% 48.8%
68.2% 63.1%
74.0%
51.7% 51.2%
31.8% 36.9%
2012 2013 2014 2015 1H 2016

Upfront % Milestone %
Device Big Exit M&A Charges On
as IPOs Disappear
VC-backed Device Exits by Quarter 20131H 2016
There were no device IPOs in 1H
Q1 Q2 Q3 Q4 Total 2016, but we did see some reverse
merger activity.
IPO 0 0 0 2 2 At the same time, there were 9

2013 M&A deals on pace to match
M&A 2 2 6 2 12 2015s total.
In each of the past five quarters,

IPO 1 5 1 3 10
there have been at least four M&A
2014 device big exits.
M&A 2 9 5 2 18
IPO 3 4 3 1 11
2015
M&A 0 4 9 4 17
IPO 0 0 0
2016
M&A 5 4 9
Device Big Exit M&A Trends to Later Stage
VC-backed Device Big Exit M&A by Stage 20121H 2016
The orthopedic indication leads
18 with three deals in 1H 2016.
16
There were no Medtronic venture-
14 backed acquisitions in 1H 2016
(13 big exit acquisitions in 2014-
12 15). However, we expect Medtronic
# of Big Exits
activity in 2H 2016.
10
8 Discussions with investors suggest

that the next flurry of early stage
6 acquisitions will focus on atrial
7 8 fibrillation, heart failure, stroke or
4
2 2
neurostimulation.
2
1 2 1 1
0
2012 2013 2014 2015 1H 2016
Represents # of IPOs Represents Big Exits

Non-Approved CE Mark U.S. Commercial
Device Big Exit M&A Propels Higher
Median Values
VC-backed Device Big Exit M&A Deal Structure 20121H 2016
In 1H 2016, 7 out of 9 M&A device
20 deals were structured. There have
18 never been more than 50%
16
structured deals in any year.
14 Looking at regulatory pathways in

# of Big Exits
12 1H 2016, the majority of deals (6

of 9) are 510k pathway, which
10
typically require revenue ramp
8 prior to acquisition. This helps to
6 explain the longer time to exit and
later stage focus.
4
2
0
2012 2013 2014 2015 1H 2016
Median
Upfront ($M) $95 $127 $180 $150 $120
Median
Total Deal ($M) $195 $175 $185 $219 $300
Median
Years to Exit 7.0 6.6 6.9 5.5 9.2
# of Structured Deals # of All-In Deals
Dx/Tools Faces Exit Slowdown
VC-backed Dx/Tools Exits by Quarter 20131H 2016
Q1 Q2 Q3 Q4 Total While there have been multiple

public Dx/tools acquisitions of
public companies in 1H 2016, there
IPO 1 0 2 1 4
have been only two private M&A
2013 deals. Both deals were tools
M&A 1 1 1 0 3 companies focused on drug
discovery.
IPO 2 2 3 0 7
Dx/tools IPOs in 2015 performed
2014
poorly, and there were none in 1H
M&A 2 3 0 5 10 2016.
IPO 1 2 1 1 5 2015*
2015
M&A 3 0 2 1 6
IPO 0 0 0
2016
M&A 1 1 2
Dx/Tools Hits Big Exit M&A Slump
VC-backed Dx/Tools Big Exit M&A Deal Structure
10
The two 1H 2016 deals were
9 commercial-stage tools companies
8 with no milestones. A third tools
deal was announced in early Q3
7
2016. Revenue traction is likely the
# of Big Exits
6 main predictor of M&A success.

5
In the Dx space, uncertainty
4
existed for most of 1H 2016. This
3 was due to Medicare lab test
2 pricing and FDA regulation of lab-
developed tests. With more clarity
1 on the horizon, activity should
0 increase.
2012 2013 2014 2015 1H 2016
Median
Upfront ($M) $127 $350 $133 $184 $108
Median
Total Deal ($M) $127 $450 $239 $189 $108
Median
Years to Exit 5.6 8.2 6.0 4.5 6.1
# of Structured Deals # of All-In Deals
Glossary
Big Exit Regulatory Definitions:
Big Exits are defined as private, venture-backed merger and acquisition Non-approved
transactions in which the upfront payment is $75 million or more for Non-approved refers to a device company that has no regulatory approval
biopharma deals and $50 million or more for device and dx/tools deals. for its product.
CE Mark
Initial Public Offering CE Mark refers to a device company that has a CE Mark-only product. CE
IPO defined as venture-backed company raising IPO proceeds more than Mark is a European Union designation that is less difficult to obtain than
$25 million. FDA approval, and the approval process typically has a faster timeline.
U.S. Commercial
Deal Descriptions: Commercial refers to a device company that has an FDA-approved
Structured Deal product, and typically is in commercial stage.
This is a pay-for-performance system that pays some of the consideration Series A
upfront, but sets milestones in development that must be achieved before Series A companies are defined as U.S. companies raising their first
the full value of the transaction will be realized. round greater than $2 million in equity or backed by institutional or
All-in Deal corporate venture capital.
All consideration for the deal is paid when deal closes.
Big Exit Upfront Payments Indication Definition:
The upfront payment refers to payments in a structured deal that are
made at the close of the deal; it does not include milestones. Neurology
CNS, Pain, and Psychology comprise Neurology
Big Exit Milestones to be Earned
The milestones to be earned refer to payments in a structured deal that
are made after the pre-determined goals are met.
Total Deal Value
The total deal value of a structured deal includes both the upfront
payment and the milestones to be earned.

About the Authors
Jonathan Norris
Jonathan Norris is a managing director for SVB's Healthcare practice. Norris oversees business
development efforts for banking and lending opportunities as well as spearheading strategic relationships
with many healthcare venture capital firms. He also helps SVB Capital through sourcing and advising on
limited partnership allocations.
Managing Director
Silicon Valley Bank
jnorris@svb.com In addition, he speaks at major investor and industry conferences and authors widely cited analyses
of healthcare venture capital trends. Norris has more than sixteen years of banking experience
working with healthcare companies and venture capital firms. Norris earned a bachelor's degree in
business administration from the University of California, Riverside and a juris doctorate from
Santa Clara University.
Paul Schuber
Paul Schuber is an associate with SVB Analytics leading valuation engagements and specializing in the life
sciences. Prior to SVB Analytics, Schuber facilitated clinical trials on behalf of pharmaceutical sponsors
and pre-clinical trials to advance medical school research, which included writing and implementing IRB
and IACUC protocols. Schubers healthcare experience also consists of working as an emergency medical
Valuations Associate technician and an electrocardiogram technician. He has a background in technology as well, working in
SVB Analytics
pschuber@svb.com many roles, including chief technology officer of an e-commerce company.
Schuber earned a masters degree in the business of bioscience from Keck Graduate Institute of Applied
Life Sciences while also studying at Claremont McKenna College at the Robert Day School of Economics
and Finance.

About Silicon Valley Bank About SVB Analytics
For more than 30 years, Silicon Valley Bank has helped SVB Analytics, a non-bank affiliate of Silicon Valley Bank, serves the
innovative companies and their investors move bold ideas strategic business needs of entrepreneurs, corporates and investors
forward, fast. SVB provides targeted financial services and in the global innovation economy. For more than a decade, SVB
expertise through its offices in innovation centers around the Analytics has helped global business leaders make informed
world. With commercial, international and private banking decisions by providing market intelligence, research, and consulting
services, SVB helps address the unique needs of innovators. services. Powered by proprietary data, SVB Analytics has a unique
view into the technology and life science sectors.
This material, including without limitation to the statistical information herein, is provided for informational purposes only. The material is based in part on
information from third-party sources that we believe to be reliable, but which have not been independently verified by us and for this reason we do not represent
that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an
investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material
should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction.
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Healthcare Investments

Jonathan Norris Paul Schuber

Key Highlights 1H 2016

Healthcare Investments and Fundraising

Analysis of Top 15 Crossovers

Healthcare Big Exit M&A and IPO Review

About the Authors

Healthcare Investments and Exits, Mid-Year 2016 Report 2

Healthcare Investments and Exits, Mid-Year 2016 Report 3

Healthcare Investments and Exits, Mid-Year 2016 Report 4

DX/TOOLS 80 2016 have exceeded 2015 totals,

0 Grail raised $125M in Series A

Pfizer Venture Pfizer, a corporate investor, leads

Versant Ventures 7 VC Canaan Partners 4 VC

Celgene 6 Corporate MPM Capital 4 VC

Johnson & Johnson Johnson & Johnson

SR One 6 Corporate Roche Venture Fund 3 Corporate

*Most active defined as top 60 investors based on new investments.

Anti-Infective Metabolic Auto-Immune

*Most active defined as top 60 investors based on new investments

$30 Recent larger equity raises in

OrbiMed Advisors VC Venrock VC

Sante Ventures VC Vertex Healthcare VC

Illumina Ventures Corporate Qiagen Corporate The number of investments by the

Pfizer Venture Investments Corporate Venrock VC

Roche Venture Fund Corporate Wuxi Venture Fund VC

Healthcare Investments and Exits, Mid-Year 2016 Report 12

MOST ACTIVE CROSSOVER INVESTORS 1H 2016

Healthcare Investments and Exits, Mid-Year 2016 Report 15

Biopharma 64% 80% 69% 69% 85%

*Potential distributions are

Stage 2012 2013 2014 2015 1H 2016

% Early-Stage IPOs 10% 26% 44% 44% 60%

Biopharma IPOs were focused predominantly on early-stage companies in 1H 2016.

14 Seven out of nine M&A deals were

Pre-clinical deals were in

Pre-Clinical Phase I Phase II Phase III Commercial

Biopharma M&A continues to show

2012 2013 2014 2015 1H 2016

Median Total Deal Size Median Time to Exit (years)

Median Deal Size (Pre-Clinical & Phase I)

2012 2013 2014 2015 1H 2016

IPO 0 0 0 2 2 At the same time, there were 9

In each of the past five quarters,

8 Discussions with investors suggest

Represents # of IPOs Represents Big Exits

14 Looking at regulatory pathways in

12 1H 2016, the majority of deals (6

# of Structured Deals # of All-In Deals

Q1 Q2 Q3 Q4 Total While there have been multiple

6 main predictor of M&A success.

# of Structured Deals # of All-In Deals

Healthcare Investments and Exits, Mid-Year 2016 Report 26

Healthcare Investments and Exits, Mid-Year 2016 Report 27

Healthcare Investments and Exits, Mid-Year 2016 Report 28

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