The Weekly Shot Biotech Issue a Weekly Summary of Healthcare Industry Valuation and Near-Term Catalysts June 17, 2010

Home , Anthera Pharmaceuticals, Cleveland BioLabs, NovaBay Pharmaceuticals, Repros Therapeutics, Trubion

Small Cap The Weekly Shot Biotech Issue A weekly summary of healthcare industry valuation and near-term catalysts June 17, 2010

The Weekly Shot: Overview and Comment - Small Cap Biotechnology  Next week's sector highlights include LGND’s Thursday analyst event at the Eventi - Pharmaceuticals and Large Cap Biotech Hotel in NYC. The company on 6/15 announced updated 2010 revenue guidance of approx $25M, op ex of approx $30M, and expects to finish the year with $30M - Generics and Specialty Pharmaceuticals in cash (vs approx $43M as of 1Q10). Management will likely focus on partner GSK’s progress with add’l trials of Promacta (for ITP), which could potentially expand the drug’s label to Hep C, AML, and MDS (LGND receives <10% royalty from GSK). Investors should focus on pipeline plans following LGND’s opportunistic 2008/09 M&A activity. Key pipeline programs include LGD-4033 (ph.I, SARM

candidate from PCOP) and RG7348, partnered with Roche (ph.I, Hep C candidate from MBRX). We do not expect major data announcements at the event.

 FDA’s Pediatric Drugs Advisory Committee will meet Monday to discuss pediatric safety reviews of multiple approved drugs, including Kogenate, Casodex, Apidra,

NovoLog, Arimidex, Desmopressin, Prevacid, Nexium, Aciphex, Priolex, OraVerse, Zemuron, and Suprane . While important from a public safety perspective, we do not anticipate regulatory activity to be announced.

Brian Lian, Ph.D.  Small caps biotechs rebounded mid-week as elevated volatility continued across 212.500.6646 [email protected] the broader market. Investors are struggling to balance economic data supporting a modest recovery against concerns on EU debt loads, financial reform legislation, and aggressive govt rhetoric on BP’s oil spill. Despite the volatility, the NBI index Meridian Equity Partners closed Weds at 859, up approx 2.4% from Friday’s 839 close. In an encouraging st 5 Hanover Square, 21 Floor sign, financing activity in small cap biotechs was strong this week, suggesting risk New York, NY 10004 appetite remains steady for some investors. Speculative names HRBR, DSCO, 212.500.6650 GTCB, SNGX all announced deals. In the large caps, both GENZ and TEVA offered www.meptraders.com new debt. We view this as a positive undertone to investor attitudes re: risk here.

PLEASE REFER TO  Two banking conferences next week include Piper Jaffray’s European Healthcare IMPORTANT DISCLOSURES Conf, Tues – Thurs in London (agenda NA), and the Wells Fargo Securities ON PAGE 15 OF THIS Healthcare Conf, Weds – Thurs in Boston (agenda: REPORT. https://www.wellsfargoresearch.com/Conferences/Conference%20Invitations/2010HealthcareSchedule.pdf

Nasdaq Biotech Index NBI Russell 2000 Small Cap Index RUT Nasdaq Composite Index 1000 2600 750 950 2500 2400 900 700 2300 850 650 2200 800 2100 600 750 2000 550 1900 700 1800 500 650 1700 600 450 1600

Last 859.0 668.8 2305.9 Weekly change 6.8% 8.2% 6.8% YTD 1.8% 6.9% 1.6%

52 week range 644 - 964 413 - 693 1499 - 2432

Sector cash multiples have ticked up since late May; NBI index up 1.8% YTD

 Small cap biotech valuations have increased slightly from late May but remain depressed from April levels. The overall sector currently trades at approx 4.3x cash vs 4.2x at the end of May, and 4.9x in mid-April. Years of cash on hand have decreased to 2.4 from 2.8 in mid-April, likely reflecting updated figures following the 1Q10 reporting period. Average cash per share in the small cap space is approx $1.97 vs $2.11 in April. As a reminder, our data include small cap biotechs from approx $2B down to approx $20M market cap, excluding those trading >35x cash. Similar to what our database suggests, the NBI index, comprised of mainly small to mid-cap names, has contracted approx 10% since mid- April, while the broader Russell 2000 Small Cap Index RUT has fallen by approx 7%.

 The data suggest that the caution among investors in late May has followed through into June. While not yet a concern, further market turmoil resulting in tighter financing opportunities could lead to reduced cash levels into 2H10. This could potentially discourage certain investors from considering small caps. As discussed on page one, however, the financing window remains robust at this point; a positive sign. We continue to believe that many small caps represent attractive values for investors with longer-term horizons who can ignore the volatility observed in recent trading. Focusing on names with cash runways over 18-months without company-defining binary events could be an attractive means of gaining exposure to the sector and capturing a market turnaround.

Lowest 20 Cash Multiples in the Small Cap Biotech Space

 Per our normal practice for the Small Cap Biotech Issue, we are highlighting those companies in the space trading at valuation extremes as measured by cash multiples. The bottom 20, by cash multiple, are listed below. As in our last Small Cap Biotech issue, of interest in this list is IRWD. The company is approaching a 4Q10 release of key phase III data for linaclotide, for irritable bowel syndrome with constipation. If successful, IRWD and partner FRX would file in mid- 2011. With approx $300M in cash and a runway of nearly 3-years, the approach of data release (and ultimately a positive trial outcome), could result in upside from current levels. The overhang on the stock is due to a large tranche of VC-owned shares that convert to common shares, which could potentially lead to significant dilution.

 Other interesting entrants in this list include MYRX, which recently announced a corporate restructuring, VNDA, and CAPS. Each has ample cash to avoid financing surprises, and all trade well-below the 4.3x sector average.

Market Cash Cash per Cash Yrs of Company Ticker Price cap ($M) ($M) share multiple Burn cash Novogen Ltd ADS NVGN $0.75 $15 $27 $1.32 0.57 $16.6 1.6 Adventrx ANX $1.91 $27 $33 $3.22 0.59 $12.8 2.6 Myriad Pharmaceuticals MYRX $3.84 $96 $159 $6.37 0.60 $44.0 3.6 CombinatoRx, Incorporated CRXX $1.43 $127 $55 $0.62 0.66 $12.4 4.4 Molecular Insight Pharm'ls MIPI $1.82 $46 $64 $2.55 0.71 $47.6 1.4 Ironwood Pharma IRWD $12.18 $233 $307 $16.00 0.76 $105.7 2.9 Insmed Inc INSM $0.75 $98 $125 $0.96 0.78 $0.0 - Capstone Therapeutics CAPS $0.69 $28 $33 $0.81 0.85 $9.1 3.6 Adolor Corp ADLR $1.49 $69 $73 $1.57 0.95 $42.6 1.7 Amicus Therapeutics FOLD $2.81 $78 $81 $2.95 0.95 $53.7 1.5 Vanda Pharmaceuticals, Inc. VNDA $6.96 $194 $203 $7.27 0.96 $19.3 10.5 Marshall Edwards MSHL $1.51 $11 $11 $1.54 0.98 $10.3 1.1 Trimeris Inc TRMS $2.18 $49 $48 $2.13 1.02 $2.0 24.2 GTC Biotherapeutics GTCB $0.42 $13 $12 $0.41 1.03 $23.5 0.5 Poniard Pharmaceuticals PARD $0.86 $40 $39 $0.82 1.05 $33.4 1.2 harbor BioSciences HRBR $0.31 $11 $10 $0.29 1.06 $5.6 1.9 Prana Biotechnology Ltd. PRAN $1.45 $34 $13 $1.34 1.08 $5.9 2.3 MediciNova Inc. MNOV $5.06 $63 $56 $4.52 1.12 $22.4 2.5 Maxygen Inc MAXY $5.81 $180 $159 $5.10 1.14 - - Telik TELK $0.77 $41 $35 $0.65 1.18 $17.8 2.0 Sector averages - - $262 $88 $1.97 4.30 $32.4 2.4 © 2010 Meridian Equity Partners | [email protected] | Wednesday, June 16, 2010 2

Highest 10 Cash Multiples in the Small Cap Space

 In contrast to the table above, the following table highlights the ten highest cash multiples in the small cap space. Excluded from this list are those companies trading above 20x current cash levels. Such firms, which often do not trade on major exchanges, are included in the tables on the following pages. High cash multiples can indicate a variety of issues, such as extreme distress due to low cash levels (CUR), expectations for future growth (BSTC), and high investor interest in pipeline progress (PCYC). However, some investors may use high multiples to identify potential short plays.

Market Cash Cash per Cash Yrs of Company Ticker Price cap ($M) ($M) share multiple Burn cash MDRNA MRNA $1.05 $51 $5 $0.05 20.38 $17.6 0.3 Neuralstem Inc CUR $3.44 $146 $8 $0.18 19.38 $8.5 0.9 GeoVax (1) GOVX $2.90 $45 $3 $0.17 17.44 $3.6 0.7 SIGA Technologies SIGA $6.89 $300 $17 $0.40 17.40 $12.7 1.4 Repros Therapeutics RPRX $0.50 $16 $1 $0.03 16.28 $4.6 0.2 Cleveland BioLabs CBLI $3.18 $85 $5 $0.20 16.28 $0.6 8.1 Advanced Cell Technology (1) ACTC $0.08 $74 $5 $0.01 14.22 $11.7 0.4 BioSpecifics Technologies BSTC $24.40 $153 $11 $1.80 13.57 - - Pharmathene PIP $1.50 $45 $3 $0.11 13.53 $17.5 0.2 Pharmacyclics Inc. PCYC $6.51 $332 $27 $0.55 11.90 $13.8 2.0 Oculus Innovative Sciences OCLS $2.18 $57 $5 $0.21 10.54 $6.8 0.8 Peregrine Pharmaceuticals PPHM $3.09 $159 $17 $0.33 9.44 $13.0 1.3 Oxygen Biotherapeutics (1) OXBT $2.90 $67 $7 $0.32 9.18 $8.4 0.9 Corcept Therapeutics CORT $3.50 $235 $26 $0.38 9.10 $23.5 1.1 Rexahn Pharmaceuticals RNN $1.15 $86 $10 $0.13 8.85 $4.2 2.3 Provectus (1) PVCT $1.20 $94 $11 $0.15 8.18 $10.4 1.1 Cardiome Pharma CRME $8.38 $508 $64 $1.05 8.00 $15.8 4.0 Protalix BioTherapeutics PLX $6.62 $535 $69 $0.86 7.72 $35.8 1.9 Keryx Biopharmaceuticals KERX $4.18 $245 $32 $0.55 7.64 $14.4 2.2 Gentium GENT $4.50 $67 $9 $0.60 7.55 $18.3 0.5 Sector averages - - $262 $88 $1.97 4.30 $32.4 2.4

Banking and investor conferences next week Piper Jaffray European Healthcare Conference; Tues – Thurs, London.

Wells Fargo Securities Healthcare Conference; Weds – Thurs, Boston.

Upcoming Events: June 20 - 26

Monday, June 21 Company Ticker Event Consensus Dial-in info (Eastern times given) FDA Pediatric Advisory Committee to discuss pediatric safety reviews of multiple approved therapies, including Kogenate, Casodex, Apidra, Multiple large caps - NovoLog, Arimidex, Desmopressin, - - Prevacid, Nexium, Aciphex, Priolex, OraVerse, Zemuron, Suprane. Not expected to have major impact on relevant company shares. Misc: No major events

Tuesday, June 22 Company Ticker Event Consensus Dial-in Piper Jaffray European Healthcare Various small and mid- - Conference; Tues – Thurs in London. - - caps Agenda NA. Misc: Existing home sales for - 10am - - May FHFA Home Price - 10am - - Index for April

Wednesday, June 23 Company Ticker Event Consensus Dial-in Various small and mid- Wells Fargo Securities Healthcare - caps Conference; Weds – Thurs in Boston. Misc: MBA purchase - 7am - - applications New home sales for - 10am - - May EIA petroleum status - 10:30am - - report FOMC meeting - 2:15pm - - announcement

Thursday, June 24 Company Ticker Event Consensus Dial-in Analyst and investor event, Eventi Ligand LGND - Webcast begins 4:15pm Hotel, NYC. Misc: Jobless claims - 8:30am - - Durable goods orders - 8:30am - -

Friday, June 25 Company Ticker Event Consensus Dial-in No major events - - - - Misc: Final 1Q10 GDP - 8:30am - - numbers Consumer sentiment - 9:55am - - Sources: Bloomberg, Reuters, Company Reports

Upcoming FDA Panels Where possible, drugs under discussion are listed

Date Panel Topic Indication Company Monday, Pediatric Advisory Committee Safety reviews for Kogenate, Various pediatric indications (all are Various June 21 Casodex, Apidra, NovoLog, Arimidex, approved therapies) Desmopressin, Prevacid, Nexium, Aciphex, Prilosec, OraVerse, Zemuron. Tuesday, Pediatric Advisory Committee - - - June 22 Wednesday, Anesthesiology and Respiratory Therapy Devices Panel - - - June 23 Thursday, Ophthalmic Devices Panel - - - June 24 Friday, Ophthalmic Devices Panel - - - June 25 Monday, Dermatologic and Ophthalmic Devices Panel Voclosporin Non-infectious uveitis Lux June 28 Biosciences Thursday, Hematology and Pathology Devices Panel - - - July 8 Neurological Devices Panel - - - Friday, Hematology and Pathology Devices Panel - - - July 9 Neurological Devices Panel - - - Tuesday, Dental Products Panel - - - July 13 Endocrinologic and Metabolic Drugs Advisory Committee Cardiovascular safety of Avandia Diabetes GSK and Drug Saftey and Risk Management Advisory Committee

Wednesday, Endocrinologic and Metabolic Drugs Advisory Committee Cardiovascular safety of Avandia Diabetes GSK July 14 and Drug Saftey and Risk Management Advisory Committee

Thursday, Endocrinologic and Metabolic Drugs Advisory Committee Qnexa Obesity VVUS July 15 Obstetrics and Gynecology Devices Panel - - - Tobacco Products Scientific Advisory Committee Dissolvable tobacco products, - - menthol issues Friday, Obstetrics and Gynecology Devices Panel - - - July 16 Tobacco Products Scientific Advisory Committee Dissolvable tobacco products, - - menthol issues Tuesday, Oncologic Drugs Advisory Committee Avastin, 2 sBLAs 1st-line HER-2 negative breast RHHBY July 20 cancer in various taxane and other combo regimens Wednesday, Radiological Devices Panel - - - July 21 Thursday, Device Good Mfg Practice Advisory Committee - - - July 22 Joint meeting of the Anesthetic and Life Support Drugs and Discussion of REMS strategies for - - Drug Safety & Risk Mgmt Advisory Committees extended release opioids Friday, Joint meeting of the Anesthetic and Life Support Drugs and Discussion of REMS strategies for - - July 23 Drug Safety & Risk Mgmt Advisory Committees extended release opioids Monday, Blood Products Advisory Committee - - - July 26 Tuesday, Blood Products Advisory Committee - - - July 27 Orthopedic and Rehabilitation Drugs Advisory Committee - - - Wednesday, Cardiovascular and Renal Drugs Advisory Committee Ticagrelor tablets Acute coronary syndrome AZN July 28 General Hospital and Personal Drugs Advisory Committee - - - Thursday, General Hospital and Personal Drugs Advisory Committee - - - July 29 Cardiovascular and Renal Drugs Advisory Committee - - - Friday, Ophthalmic Devices Panel - - - July 30 - - -

Upcoming Conferences

Date Conference Location 6/16 - 6/19 European League Against Rheumatism (EULAR) 2010 Rome 6/16 - 6/19 International Society for Stem Cell Research Annual Meeting San Francisco 6/19 - 6/22 Endocrine Society (ENDO 2010) San Diego 6/19 - 6/23 European Neurological Society Annual Meeting Berlin 6/20 - 6/23 The 78th Eurpoean Atherosclerosis Society (EAS) Congress Hamburg 6/25 - 6/29 American Diabetes Association, 70th Scientific Session Orlando 7/10 - 7/14 Controlled Release Society Portland 7/10 - 7/15 Int'l Conference on Alzheimer's Disease Honolulu 7/18 - 7/20 Int'l AIDS Society Conference Vienna 8/4 - 8/8 American Academy of Dermatology ACADEMY Chicago 8/28 - 9/1 European Society for Cardiology Stockholm 9/12 - 9/15 ICAAC 2010 Boston 9/12 - 9/15 Heart Failure Society of America (HFSA) Annual Meeting San Diego 9/18 - 9/22 ERS - European Respiratory Annual Congress Barcelona 9/20 - 9/24 EASD - European Association for the Study of Diabetes Stockholm 9/21 - 9/25 Transcatheter Cardiovascular Therapeutics (TCT) 2010 Washington 9/23 - 9/26 1st World Congress on Controversies in Gastroenterology and Liver Diseases Prague 9/24 - 9/26 ASTRO/ASCO Breast Cancer Symposium National Harbor MD 9/27 - 9/30 AACR Molecular Diagnostics in Cancer Therapeutics Denver 10/1 - 10/4 ISBTC - International Society for Biological Therapy of Cancer Washington 10/4 - 10/6 World Stem Cell Summit Baltimore 10/8 10/12 European Society for Medical Oncology 2010 Congress Milan 10/8 - 10/13 NAASO - The Obesity Society Annual Scientific Meeting San Diego 10/12 - 10/15 ANA - American Neurological Association San Francisco 10/13 - 10/16 ECTRIMS - Congress of the European Committee for Treatment and Research in MS Goteborg 10/15 - 10/19 ASBMR American Society for Bone and Mineral Research Toronto 10/15 - 10/20 ACG - American College of Gastroenterology Scientific Meeting San Antonio 10/16 - 10/19 AAO - American Academy of Ophthalmology Annual Meeting Chicago 10/21 - 10/22 Molecular Diagnostics World Congress San Francisco 10/21 - 10/24 IDSA - Infectious Disease Society of America Conference Vancouver 10/23 - 10/27 United European Gastroenterology Week (UEGW) Barcelona 10/29 - 11/2 AASLD - American Association for the Study of Liver Diseases Boston 10/30 - 11/4 CHEST 2010 Vancouver 10/31 - 11/4 ASTRO - American Society for Therapeutic Radiology and Oncology Mtg San Diego 11/6 - 11/11 ACR - American College of Rheumatology Annual Meeting Atlanta 11/13 - 11/17 AHA - American Heart Association Annual Meeting Chicago 11/16 - 11/24 ASN - American Society of Nephrology Annual Meeting, Renal Week Denver 11/16 - 11/19 EORTC Molecular Targets and Cancer Therapeutics Berlin

A quick note on our financial tables (following pages)

Each week we scan our proprietary database and aggregate key metrics of interest to investors and industry leaders. As our database is updated on a live, ongoing basis, we believe these weekly tables provide a potentially more accurate window into the sector than sources relying solely on quarterly financial statements.

Our database groups companies according to primary operating focus. This provides a single-source comp table that allows rapid comparisons between firms with similar business models. We believe this may serve a useful purpose for investors seeking new ideas for deeper analysis or for management teams assessing competitors and/or opportunities.

We have separated the overall sector into four broad categories. Each issue of The Weekly Shot highlights data from one of the following:

 Pharmaceuticals and Large Cap Biotechnology  Generics and Specialty Pharmaceuticals  Small Cap Biotechnology  Tools and Diagnostics

Our weekly data generally focus on the central themes:

 Growth  Value  Operating performance

Each table on the following pages seeks to highlight financial metrics of importance to these three areas. We make an exception for small cap biotechnology companies as these often trade on newsflow or alternative value metrics. Accordingly, the weekly data highlight different measures for this group.

This week’s issue covers the small cap biotechnology space. Also included are emerging specialty pharmaceutical companies.

Overview: Small Cap Biotechnology companies <$2B Market cap.

Market Cash Cash per Cash Yrs of 2010E Revenue Avg 1 mo Company Ticker Price cap ($M) ($M) share multiple Burn (2) cash revs (3) Multiple Focus (4) Lead program (partner) vol Aastrom Biosciences ASTM $1.55 $44 $23 $0.81 1.92 $15.2 1.5 - - Regenerative medicine Phase II - Cardiac repair cells 195,766 ACADIA Pharmaceuticals ACAD $1.30 $50 $41 $1.06 1.23 $25.8 1.6 - - Neurology Phase III - Pimavanserin (BVF) 332,713 Achillion Pharmaceuticals ACHN $2.48 $96 $25 $0.65 3.82 $26.8 0.9 - - Anti-infectives Phase I - ACH-1625 170,738 Acorda Therapeutics ACOR $33.37 $1,292 $244 $6.30 5.30 $96.0 2.5 124 10.4 Neurology Marketed - Ampyra (BIIB, ex-U.S.) 527,693 Adolor Corp ADLR $1.49 $69 $73 $1.57 0.95 $42.6 1.7 52 1.3 Neurology Marketed - Entereg (GSK) 351,025 Advanced Cell Technology (1) ACTC $0.08 $74 $5 $0.01 14.22 $11.7 0.4 - - Regenerative medicine Phase I - Myoblast program 3,264,390 Adventrx ANX $1.91 $27 $33 $3.22 0.59 $12.8 2.6 - - Oncology NDA to re-file (505(b)2) - ANX-530 659,952 aEterna Zentaris AEZS $1.31 $97 $52 $0.63 2.09 $21.2 2.5 26 3.8 Endocrine Phase III - Perifosine (KERX) 6,139,431 Affymax Inc AFFY $23.42 $563 $154 $6.41 3.66 $58.8 2.6 140 4.0 Hematology Phase III - Hematide (Takeda) 287,572 Allos Therapeutics ALTH $6.88 $724 $143 $1.36 5.07 $93.2 1.5 58 12.5 Cancer Marketed - Folotyn 1,129,948 Alnylam Pharmaceuticals ALNY $15.98 $671 $419 $9.99 1.60 $62.4 6.7 103 6.5 RNAi Phase II - ALN-RSV01 (CBST) 253,925 AMAG Pharmaceuticals AMAG $34.93 $734 $342 $16.29 2.14 $49.8 6.9 76 9.7 Hematology Marketed - Feraheme (Takeda ex-US) 332,673 Amicus Therapeutics FOLD $2.81 $78 $81 $2.95 0.95 $53.7 1.5 - - Metabolic disorders Phase III - Amigal 75,248 Anadys Pharmaceuticals ANDS $2.37 $102 $26 $0.61 3.91 $22.1 1.2 - - Anti-infectives Phase II - ANA598 328,271 Anthera Pharmaceuticals ANTH $6.53 $146 $57 $2.54 2.57 $14.0 4.0 - - Cardiovascular Phase III - A-002 6,602 Antigenics Inc AGEN $0.98 $92 $24 $0.25 3.86 $23.6 1.0 - - Cancer Phase II - Oncophage 2,917,504 ARCA biopharma ABIO $4.21 $37 $17 $1.99 2.12 $41.7 0.4 - - Cardiovascular Phase III planned - Gencaro 388,366 Ardea Biosciences Inc RDEA $24.04 $548 $115 $5.06 4.75 $49.3 2.3 - - Anti-infectives, inflammation Phase II - RDEA594 208,502 Arena Pharmaceuticals ARNA $2.95 $299 $142 $1.26 2.34 $120.0 1.2 - - Obesity NDA submitted - Lorcaserin 2,902,458 ARIAD Pharmaceuticals ARIA $3.50 $387 $95 $0.86 4.07 $56.9 1.7 - - Cancer Phase III - Ridaforolimus (MRK) 2,828,122 ArQule Inc ARQL $5.18 $232 $147 $3.28 1.58 $38.2 3.8 27 8.7 Cancer Phase II - ARQ-197 (Daiichi) 567,104 Array BioPharma ARRY $3.24 $172 $145 $2.74 1.18 $64.2 2.3 52 3.3 Cancer, inflammation Phase I - ARRY-162 (NVS) 435,827 ARYx Therapeutics ARYX $0.50 $17 $7 $0.22 2.25 $25.7 0.3 - - Cardiovascular Phase II/III complete - Tecarfarin 312,053 Athersys ATHX $3.18 $60 $22 $1.19 2.68 $14.3 1.6 - - Regenerative medicine Phase I - Multistem (PFE) 85,444 Auxilium Pharmaceuticals AUXL $26.82 $1,272 $179 $3.76 7.13 $80.1 2.2 229 5.6 Endocrine Marketed - Xiaflex (PFE ex-U.S.) 909,485 Avanex Life Sciences (1) AVXL $3.47 $73 $0 $0.01 NM $3.7 0.0 - - Neurology Preclinical - Avanex 2-73 37,523 AVANIR Pharmaceuticals AVNR $2.81 $263 $47 $0.50 5.64 $22.4 2.1 - - Neurology NDA refiled - Zenvia 1,308,922 AVEO Pharmaceuticals AVEO $7.22 $216 $113 $3.66 1.97 $70.0 1.6 42 5.1 Cancer Phase III - Tivozanib 32,514 AVI BioPharma AVII $1.61 $178 $42 $0.38 4.27 $25.2 1.6 - - RNAi Phase I - AVI-4658 1,336,992 BioCryst Pharm'l BCRX $6.47 $285 $89 $2.00 3.24 $20.8 4.3 87 3.3 Anti-infectives, cancer Phase III - Peramivir 672,091 Bionovo BNVI $0.43 $47 $12 $0.11 3.98 $11.9 1.0 - - Cancer Phase II - Menerba 496,098 BioSpecifics Technologies BSTC $24.40 $153 $11 $1.80 13.57 - - - - Endocrine Marketed - Xiaflex (AUXL markets) 14,278 BioSphere Medical BSMD $4.29 $80 $17 $0.88 4.85 $5.3 3.1 35 2.3 Endocrine Marketed - Embospheres 327,888 Cadence Pharmaceuticals CADX $7.12 $360 $68 $1.34 5.31 $48.0 1.4 - - Neurology NDA to re-file - Ofirmev (acetavance) 270,188 Capstone Therapeutics CAPS $0.69 $28 $33 $0.81 0.85 $9.1 3.6 79 0.4 Inflammation Phase II - AZX100 24,888 Cardiome Pharma CRME $8.38 $508 $64 $1.05 8.00 $15.8 4.0 - - Cardiovascular Phase III - Vernakalent (Astellas, MRK) 381,658 Cardium Therapeutics CXM $0.46 $36 $12 $0.16 2.96 $7.7 1.6 - - Cardiovascular Phase III planned - Generx 1,022,701 Cell Therapeutics CTIC $0.47 $308 $80 $0.11 4.16 $92.8 0.9 - - Cancer Phase III planned - Pixuvri (pixantrone) 9,831,739 Cellceutix (1) CTIX $0.00 $0 $0 $0.00 0.00 $0.9 0.1 - - Cancer Preclinical - Kevetrin 2,941 Celldex Therapeutics CLDX $5.32 $169 $75 $2.37 2.24 $27.8 2.7 - - Cancer Phase II - CDX-110 (PFE) 1,203,255 Cel-Sci Corp CVM $0.53 $108 $34 $0.17 3.19 $12.1 2.8 - - Cancer Phase III to begin - Multikine 1,185,831 Celsion Corp CLSN $3.53 $43 $10 $0.78 4.51 $12.1 0.8 - - Cancer Phase III - Thermodox 53,880 Chelsea Therapeutics Intl CHTP $3.02 $121 $43 $1.07 2.82 $29.8 1.4 - - Neurology Phase III - Droxidopa 250,871 Sector averages - - $262 $88 $1.97 4.30 $32.4 2.4 $35.5 2.4 - - 885,656 Notes: Data in millions except multiples and per-share figures. (1) Does not trade on major exchange. (2) Approximate burn estimated from operating cash flow excluding deferred revenue. (3) Current year consensus ests from Thomson-Reuters. (4) Generally refers to most advanced or highest profile program.

Overview: Small Cap Biotechnology companies <$2B Market cap., cont’d.

Market Cash Cash per Cash Yrs of 2010E Revenue Avg 1 mo Company Ticker Price cap ($M) ($M) share multiple Burn (2) cash revs (3) Multiple Focus (4) Lead program (partner) vol Cleveland BioLabs CBLI $3.18 $85 $5 $0.20 16.28 $0.6 8.1 - - Cancer, other Phase I - CBLB502 50,600 CombinatoRx, Incorporated CRXX $1.43 $127 $55 $0.62 0.66 $12.4 4.4 - - Neurology Approved - Exalgo 1,891,339 Compugen CGEN $4.05 $108 $23 $0.70 5.79 $10.8 2.1 - - Cardiovascular, Inflamm. Preclinical - various 122,825 Corcept Therapeutics CORT $3.50 $235 $26 $0.38 9.10 $23.5 1.1 - - Neurology Phase III - Corlux 53,313 Cubist Pharmaceuticals CBST $20.85 $1,218 $506 $8.67 2.41 - - 649 1.9 Anti-infectives Marketed - Cubicin 816,090 Curis Inc CRIS $3.26 $247 $49 $0.65 5.04 $20.6 2.4 - - Cancer Phase II - GDC-0449 (Roche) 468,072 Cyclacel CYCC $1.73 $64 $24 $0.68 2.53 $23.1 1.0 - - Cancer Phase II - Sapacitibine 1,223,293 Cytokinetics Inc CYTK $2.92 $188 $112 $1.74 1.67 48.8 2.3 - - Cardiovascular Phase II - CK-1827452 (AMGN) 282,680 Cytori Therapeutics CYTX $4.50 $203 $41 $0.90 4.98 $29.6 1.4 - - Regenerative medicine Marketed (Europe) - Celbrush 688,553 CytRx Corp CYTR $0.93 $101 $34 $0.31 3.03 $11.8 2.8 - - Cancer Phase II - Tamibarotene 696,503 Discovery Laboratories DSCO $0.37 $58 $25 $0.16 2.37 $25.6 1.0 - - Respiratory NDA to refile - Surfaxin 2,510,771 Dyax Corp DYAX $2.72 $266 $98 $1.00 2.72 $64.4 1.5 53 5.0 Inflammation Marketed - Kalbitor (ecallantide, DX-88) 648,568 Dynavax Technologies DVAX $1.97 $171 $71 $0.82 2.40 $30.0 2.4 23 7.3 Anti-infectives Phase III - Heplisav 820,698 Emergent BioSolutions EBS $15.93 $494 $130 $4.19 3.80 - - 244 2.0 Anti-infectives Licensed - Biothrax 208,338 Entremed ENMD $0.49 $50 $10 $0.10 5.18 $10.2 0.9 - - Cancer Phase II - ENMD-2076 351,636 Exelixis Inc EXEL $4.86 $528 $310 $2.86 1.70 $215.0 1.4 222 2.4 Cancer Phase III - XL184 (BMY) 1,407,990 Genta (1) GETA $0.04 $32 $20 $0.03 1.62 $9.1 2.2 - - Cancer Phase III complete - Genasense 23,533,648 Gentium GENT $4.50 $67 $9 $0.60 7.55 $18.3 0.5 - - Cardiovascular, other Phase III complete - Defibrotide 35,769 GenVec Inc GNVC $0.51 $66 $43 $0.33 1.53 $23.7 1.8 - - Cancer Phase III discontinued - TNFerade 1,321,073 GeoVax (1) GOVX $2.90 $45 $3 $0.17 17.44 $3.6 0.7 N/A NA Anti-infectives Phase II - HIV vaccine 14,167 Geron Corp GERN $5.23 $513 $167 $1.70 3.08 $37.5 4.4 - - Cancer Phase II - GRN163L 1,213,856 GTC Biotherapeutics GTCB $0.42 $13 $12 $0.41 1.03 $23.5 0.5 - - Hematology Marketed - Atryn 7,255 GTx Inc GTXI $3.00 $109 $39 $1.06 2.82 $41.0 0.9 68 1.6 Metabolic disorders NDA not approved - Toremifene 80mg 539,274 harbor BioSciences HRBR $0.31 $11 $10 $0.29 1.06 $5.6 1.9 113 0.1 Endocrine, immunology Phase I - Apoptone 320,692 Hemispherx BioPharma HEB $0.59 $79 $54 $0.40 1.47 $15.7 3.4 - - Immunology NDA not approved - Ampligen 905,620 Icagen ICGN $0.47 $23 $14 $0.30 1.58 $13.9 1.0 - - Immunology, Pain Phase II - ICA-105665 116,908 Idenix Pharmaceuticals IDIX $4.96 $361 $60 $0.82 6.03 $57.2 1.0 - - Anti-infectives Phase II - IDX184 314,101 Idera Pharmaceuticals IDRA $4.16 $98 $38 $1.61 2.59 $10.0 3.8 29 3.4 Immunology, Cancer Phase I - IMO-2055 (Merck KGaA) 82,760 ImmunoGen Inc IMGN $8.70 $578 $112 $1.70 5.11 $41.1 2.7 - - Cancer BLA planned - T-DM1 (Roche) 931,743 Immunomedics Inc IMMU $3.44 $259 $42 $0.56 6.12 $10.0 4.2 57 4.6 Cancer Phase III planned - Epratuzumab (UCB) 888,322 Incyte Corp INCY $13.34 $1,616 $441 $3.64 3.66 $221.6 2.0 104 15.5 Inflammation Phase III - INCB18424 (NVS ex-U.S.) 2,454,633 Infinity Pharmaceuticals INFI $6.39 $168 $127 $4.85 1.32 $12.6 10.1 64 2.6 Cancer Phase II - IPI-504 51,788 Inhibitex INHX $2.50 $154 $34 $0.55 4.53 $14.0 2.4 - - Anti-infectives Phase II - FV-100 202,320 Inovio INO $1.15 $118 $39 $0.38 3.01 $30.0 1.3 - - Anti-infectives Phase I - Pennvax B 427,896 Insmed Inc INSM $0.75 $98 $125 $0.96 0.78 $0.0 - - - Musculoskeletal disorders Phase I - INSM18 605,477 InterMune Inc ITMN $10.30 $570 $178 $3.22 3.20 $143.9 1.2 28 20.3 Pulmonology NDA to refile - Espriet (pirfenidone) 5,775,268 International Stem Cells (1) ISCO $1.30 $93 $3 $0.04 NM $5.8 0.4 - - Regenerative medicine Preclinical 555,144 Ironwood Pharma IRWD $12.18 $233 $307 $16.00 0.76 $105.7 2.9 37 6.2 Endocrinology Phase III - Linaclotide (FRX) 107,849 Isis Pharmaceuticals ISIS $9.71 $962 $519 $5.24 1.85 $86.8 6.0 107 8.9 Cardiovascular Phase III - Mipomerson (GENZ) 1,422,633 Keryx Biopharmaceuticals KERX $4.18 $245 $32 $0.55 7.64 $14.4 2.2 - - Cancer Phase III - Perifosine 4,043,080 Lexicon Pharmaceuticals LXRX $1.38 $466 $314 $0.93 1.48 $86.8 3.6 - - Inflammation, other Phase II - LX1031 1,296,880 Ligand Pharmaceuticals LGND $1.59 $187 $43 $0.36 4.38 $15.0 2.8 30 6.1 Endocrine Marketed - Promacta, others (partners) 604,406 Lpath (1) LPTN $0.62 $33 $7 $0.13 4.81 $0.0 - - - Cancer, other Phase II planned - Asonep (Merck Serono) 11,641 Sector averages - - $262 $88 $1.97 4.30 $32.4 2.4 $35.5 2.4 - - 885,656 Notes: Data in millions except multiples and per-share figures. (1) Does not trade on major exchange. (2) Approximate burn estimated from operating cash flow excluding deferred revenue. (3) Current year consensus ests from Thomson-Reuters. (4) Generally refers to most advanced or highest profile program.

Overview: Small Cap Biotechnology companies <$2B Market cap., cont’d.

Market Cash Cash per Cash Yrs of 2010E Revenue Avg 1 mo Company Ticker Price cap ($M) ($M) share multiple Burn (2) cash revs (3) Multiple Focus (4) Lead program (partner) vol MabCure (1) MBCI $0.36 $22 $0 $0.01 NM $1.0 0.4 - - Cancer Preclinical 38,117 MAP Pharmaceuticals MAPP $13.24 $350 $69 $2.62 5.05 $57.0 1.2 - - Respiratory Phase III - Levadex (dihydroergotamine) 249,710 Marshall Edwards MSHL $1.51 $11 $11 $1.54 0.98 $10.3 1.1 - - Cancer Phase III - Phenoxodiol (NVGN) 35,391 Maxygen Inc MAXY $5.81 $180 $159 $5.10 1.14 - - - - Immunology Phase II - MAXY-G34 196,978 MDRNA MRNA $1.05 $51 $5 $0.05 20.38 $17.6 0.3 - - RNAi, Cancer Preclinical - DiLA-based delivery 379,331 Medicines Co MDCO $7.86 $418 $192 $3.60 2.18 - - 417 1.0 Cardiovascular Marketed - Angiomax 933,173 MediciNova Inc. MNOV $5.06 $63 $56 $4.52 1.12 $22.4 2.5 - - Respiratory, Neurology Phase II - MN-221 2,199 Medivation Inc MDVN $11.08 $377 $256 $7.54 1.47 $109.9 2.3 82 4.6 Neurology Ph.III - Dimebon (Pfizer); Ph.III MDV3100 (Astellas) 632,322 Micromet Inc MITI $7.22 $584 $189 $2.34 3.09 $44.8 4.2 25 23.0 Cancer Phase II - Adecatumumab (Merck Serono) 509,696 Molecular Insight Pharm'ls MIPI $1.82 $46 $64 $2.55 0.71 $47.6 1.4 - - Cardiovascular, Cancer Phase II - Azedra 298,265 Momenta Pharmaceuticals MNTA $13.85 $622 $84 $1.86 7.45 $52.6 1.6 57 10.9 Cardiovascular ANDA filed - Enoxaparin (NVS) 333,533 Myriad Pharmaceuticals MYRX $3.84 $96 $159 $6.37 0.60 $44.0 3.6 - - Cancer Phase II - MPC-4326 180,915 Nabi Biopharmaceuticals NABI $5.71 $256 $137 $3.34 1.71 $53.9 2.6 21 11.9 Neurology Phase III - NicVAX (GSK) 359,000 Nanoviricides (1) NNVC $1.76 $233 $7 $0.06 31.25 $2.3 3.2 - - Anti-infectives Preclinical 545,687 Neuralstem Inc CUR $3.44 $146 $8 $0.18 19.38 $8.5 0.9 - - Neurology Preclinical - Stem cell therapies 361,566 Neurocrine Biosciences NBIX $4.70 $258 $76 $1.38 3.41 $48.8 1.5 - - Endocrine Phase II - Eligolix 1,493,279 NeurogesX Inc NGSX $8.15 $145 $80 $4.52 1.80 $39.6 2.0 - - Neurology Marketed - Qutenza 63,780 Neurologix (1) NRGX $0.00 $0 $6 $0.23 0.00 $12.3 0.5 - - Neurology Phase II - Gene therapy 2,498 Nile Therapeutics NLTX $0.44 $15 $7 $0.19 2.30 $4.6 1.4 - - Cardiovascular Phase II - CD-NP 59,697 NovaBay Pharmaceuticals NBY $2.31 $54 $14 $0.59 3.92 $6.0 2.3 - - Anti-infectives Phase II - AgaNase 28,896 Novavax Inc NVAX $2.30 $231 $33 $0.33 7.03 $37.5 0.9 - - Anti-infectives Phase II - NCT00903552 1,053,325 Novelos (1) NVLT $0.13 $12 $6 $0.06 2.10 $13.3 0.4 - - Cancer, anti-infectives Phase III - NOV-002 (Purdue) 397,288 Novogen Ltd ADS NVGN $0.75 $15 $27 $1.32 0.57 $16.6 1.6 - - Cancer Phase III - Phenoxodiol (MSHL) 70,247 NPS Pharmaceuticals NPSP $7.00 $412 $175 $2.98 2.35 $80.0 2.2 90 4.6 Endocrine Phase III - Gattex 384,482 Oculus Innovative Sciences OCLS $2.18 $57 $5 $0.21 10.54 $6.8 0.8 - - Anti-infectives Marketed - Microcyn gel 76,360 Omeros Corp. OMER $6.00 $128 $51 $2.39 2.51 $30.3 1.7 - - Inflammation, neurology Phase III - OMS103HP 48,806 OncoGenex Pharmaceuticals OGXI $14.08 $90 $51 $8.03 1.75 $68.6 0.7 - - Cancer Phase III to begin - OGX-011 (TEVA) 62,099 Oncolytics Biotech ONCY $2.95 $182 $29 $0.47 6.30 $19.8 1.5 N/A NA Cancer Phase II - Reolysin 94,327 Oncothyreon ONTY $3.65 $94 $29 $1.12 3.26 $17.0 1.7 - - Cancer Phase III - Stimuvax (Merck KGaA) 112,840 ONYX Pharmaceuticals ONXX $24.24 $1,518 $613 $9.78 2.48 - - 280 5.4 Cancer Marketed - Nexavar (BAY) 1,403,104 Opexa Therapeutics OPXA $1.71 $30 $7 $0.45 3.77 $4.5 1.6 - - Regenerative medicine Phase II - Tovaxin 109,595 Optimer Pharmaceuticals OPTR $9.62 $368 $82 $2.15 4.48 $33.8 2.4 - - Anti-infectives NDA planned - Fidaxomicin/OPT-080 218,751 Orexigen Therapeutics OREX $4.65 $220 $77 $1.62 2.87 $57.7 1.3 - - Obesity NDA filed - Contrave 589,867 Osiris Therapeutics OSIR $5.74 $188 $90 $2.74 2.09 $42.3 2.1 43 4.4 Regenerative medicine Phase III - Prochymal (GENZ) 114,451 OXiGENE Inc OXGN $0.63 $44 $14 $0.20 3.10 $26.4 0.5 - - Cancer Phase III - Zybrestat 469,217 Oxygen Biotherapeutics (1) OXBT $2.90 $67 $7 $0.32 9.18 $8.4 0.9 - - Tissue repair Phase II - Oxycyte 38,834 Palatin Technologies PTN $0.26 $28 $11 $0.10 2.65 $10.1 1.1 - - Cardiovascular Phase I - PL3994 607,746 PDL BioPharma PDLI $5.60 $670 $242 $2.03 2.76 - - 331 2.0 Cancer Marketed - various indications 2,872,357 Peregrine Pharmaceuticals PPHM $3.09 $159 $17 $0.33 9.44 $13.0 1.3 31 5.2 Cancer Phase II - Bavituximab 361,713 Pharmacyclics Inc. PCYC $6.51 $332 $27 $0.55 11.90 $13.8 2.0 - - Cancer Phase II - Motexafin gadolinium 381,716 Pharmasset Inc VRUS $32.43 $1,085 $149 $4.45 7.28 $54.7 2.7 - - Anti-infectives Phase II - R7128 (Roche) 282,702 Pharmathene PIP $1.50 $45 $3 $0.11 13.53 $17.5 0.2 27 1.7 Anti-infectives Phase II - SparVax 138,530 Polymedix (1) PYMX $1.08 $87 $31 $0.38 2.82 $10.8 2.9 - - Anti-infectives Phase I - PMX-30063 169,634 Poniard Pharmaceuticals PARD $0.86 $40 $39 $0.82 1.05 $33.4 1.2 - - Cancer Phase III - Picoplatin 1,140,144 Sector averages - - $262 $88 $1.97 4.30 $32.4 2.4 $35.5 2.4 - - 885,656 Notes: Data in millions except multiples and per-share figures. (1) Does not trade on major exchange. (2) Approximate burn estimated from operating cash flow excluding deferred revenue. (3) Current year consensus ests from Thomson-Reuters. (4) Generally refers to most advanced or highest profile program.

Overview: Small Cap Biotechnology companies <$2B Market cap., cont’d.

Market Cash Cash per Cash Yrs of 2010E Revenue Avg 1 mo Company Ticker Price cap ($M) ($M) share multiple Burn (2) cash revs (3) Multiple Focus (4) Lead program (partner) vol POZEN Inc POZN $7.70 $230 $57 $1.90 4.06 $40.5 - 49 4.7 Neurology Marketed - Treximet (GSK) 895,043 Prana Biotechnology Ltd. PRAN $1.45 $34 $13 $1.34 1.08 $5.9 2.3 - - Neurology Phase II - PBT-2 77,616 Progenics Pharmaceuticals PGNX $6.41 $208 $84 $2.58 2.48 $50.6 1.7 23 9.1 Immunology Marketed - Relistor 181,788 Protalix BioTherapeutics PLX $6.62 $535 $69 $0.86 7.72 $35.8 1.9 - - Metabolic disorders NDA filed - Uplyso (PFE) 354,973 Proteo Biotech (1) PTEO $0.53 $13 $0 $0.02 28.19 $0.8 0.5 - - Inflammation Phase II - Elafin 161 Provectus (1) PVCT $1.20 $94 $11 $0.15 8.18 $10.4 1.1 - - Cancer, inflammation Phase II - PV10 278,284 QLT Inc QLTI $6.25 $336 $190 $3.55 1.76 17.4 10.9 - - Ophthalimic Marketed - Visudyne (NVS) 175,890 Regeneron Pharmaceuticals REGN $27.44 $2,188 $414 $5.19 5.29 $54.1 7.7 417 5.2 Cancer Phase III - Aflibercept (SNY, BAY) 915,670 RegeneRx Biopharmaceuticals RGN $0.30 $22 $11 $0.15 2.07 $4.6 2.3 - - Wound healing Phase II - RGN-137 380,459 Repligen Corp RGEN $3.45 $106 $60 $1.95 1.76 $2.4 24.6 22 4.9 Neurology Phase III complete - RG1068 100,109 Repros Therapeutics RPRX $0.50 $16 $1 $0.03 16.28 $4.6 0.2 - - Endocrine Phase III on hold - Proellex 1,248,385 Rexahn Pharmaceuticals RNN $1.15 $86 $10 $0.13 8.85 $4.2 2.3 - - Cancer Phase II - Archexin 678,250 Rigel Pharmaceuticals RIGL $7.75 $403 $210 $4.03 1.92 $102.8 2.0 127 3.2 Immunology, Inflammation Phase II - R788 (AZN) 475,942 RXi Pharmaceuticals RXII $3.07 $56 $15 $0.81 3.80 $9.8 1.5 - - RNAi Preclinical 202,208 Sangamo BioSciences SGMO $4.39 $198 $77 $1.70 2.59 $31.8 2.4 22 8.8 Neurology, Anti-infectives Phase II - SB-509 332,828 SciClone Pharmaceuticals SCLN $3.49 $165 $39 $0.82 4.28 - - 83 2.0 Cancer Phase II - SCV - 07 516,792 Seattle Genetics SGEN $13.40 $1,351 $341 $3.38 3.97 $86.9 3.9 103 13.1 Cancer Phase III - SGN-35 954,976 SIGA Technologies SIGA $6.89 $300 $17 $0.40 17.40 $12.7 1.4 22 13.5 Anti-infectives Phase I - ST-246 315,393 Sinovac Biotech SVA $4.13 $223 $119 $2.20 1.88 $40.6 2.9 - - Anti-infectives Marketed - various vaccines 595,872 Soligenix (1) SNGX $0.25 $47 $11 $0.05 4.78 $7.2 1.5 - - Cancer Phase III - orBec 316,999 Somaxon SOMX $4.97 $170 $59 $1.71 2.91 $2.8 20.8 - - Neurology Approved - Silenor, to launch 2H10 1,418,817 Spectrum Pharmaceuticals SPPI $4.18 $207 $98 $1.99 2.10 - - 51 4.1 Cancer Marketed - multiple products 794,580 StemCells Inc STEM $1.00 $120 $31 $0.26 3.82 $31.2 1.0 - - Regenerative medicine Phase I - HuCNS-SC 1,008,025 SuperGen Inc SUPG $2.25 $136 $106 $1.75 1.29 - - 44 3.1 Cancer Marketed - Dacogen (Eisai) 312,791 Sunesis SNSS $0.59 $34 $15 $0.25 2.33 $15.0 1.0 - - Cancer Phase III planned - Voreloxin 3,370,682 Synta Pharmaceuticals SNTA $4.08 $165 $58 $1.43 2.85 $50.4 1.2 - - Cancer Phase III to resume - Elesclomol 205,244 Targacept Inc TRGT $22.55 $642 $285 $10.01 2.25 $102.6 2.8 83 7.7 Neurology Phase II - AZD3480 (AZN) 144,450 Telik TELK $0.77 $41 $35 $0.65 1.18 $17.8 2.0 - - Cancer Phase I/II - Telintra 221,043 Theravance Inc THRX $15.42 $1,128 $225 $3.54 4.36 $94.6 2.4 30 37.6 Anti-infectives Marketed - Vibativ (telavancin; Astellas) 583,582 Threshold Pharmaceuticals THLD $1.25 $42 $32 $0.95 1.32 $21.6 1.5 - - Cancer Phase I - TH-302 58,147 Transition Therapeutics TTHI $3.65 $85 $30 $1.29 2.82 $19.4 1.5 - - Neurology Phase II - AZD-103 (ELN) 27,332 Trimeris Inc TRMS $2.18 $49 $48 $2.13 1.02 $2.0 24.2 - - Anti-infectives Marketed - Fuzeon (Roche) 48,595 Trubion Pharmaceuticals TRBN $3.41 $70 $46 $2.27 1.50 $33.1 1.4 23 3.0 Inflammation Phase II - TRU-015 (PFE) 25,135 Vanda Pharmaceuticals, Inc. VNDA $6.96 $194 $203 $7.27 0.96 $19.3 10.5 40 5.1 Neurology Marketed - Fanapt (NVS) 607,062 Vical Inc VICL $3.42 $192 $48 $0.85 4.04 $39.3 1.2 - - Anti-infectives Phase III - Allovectin 287,357 ViroPharma Inc VPHM $12.01 $935 $372 $4.78 2.51 - - 328 2.8 Anti-infectives Marketed - Vancocin, Cinryze 1,029,749 Vivus Inc VVUS $10.95 $885 $195 $2.41 4.54 $51.3 3.8 21 42.6 Obesity NDA submitted - Qnexa 6,372,822 XenoPort Inc XNPT $10.65 $325 $123 $4.04 2.63 $64.6 1.9 - - Neurology NDA to re-file - Horizant (GSK) 628,262 XOMA Ltd XOMA $0.49 $128 $29 $0.11 4.35 $65.5 0.4 49 2.6 Inflammation Phase II - XOMA 052 2,463,510 YM BioSciences YMI $1.16 $96 $51 $0.64 1.82 $14.7 3.5 - - Cancer Phase III - Nimotuzumab 534,208 Ziopharm Oncology ZIOP $4.93 $241 $78 $1.60 3.09 $15.2 5.1 - - Cancer Phase II - Palifosfamide 549,560 ZymoGenetics Inc ZGEN $4.89 $419 $228 $2.60 1.88 $80.5 2.8 134 3.1 Hematology Marketed - Recothrom 651,503 Sector averages - - $262 $88 $1.97 4.30 $32.4 2.4 $35.5 2.4 - - 885,656 Notes: Data in millions except multiples and per-share figures. (1) Does not trade on major exchange. (2) Approximate burn estimated from operating cash flow excluding deferred revenue. (3) Current year consensus ests from Thomson-Reuters. (4) Generally refers to most advanced or highest profile program.

Emerging Specialty Pharmaceutical and Drug Delivery Companies

Market Cash Cash per Cash Yrs of 2010E Revenue Avg 1 mo Spec Pharma Companies Ticker Price cap ($M) ($M) share multiple Burn (1) cash revs (2) Multiple Focus (3) Lead program (Partner) vol Acura Pharmaceuticals ACUR $3.00 $131 $27 $0.63 4.80 11 2.4 9 14.6 Neurology NDA to refile - Acurox (KG) 85,574 Akorn AKRX $3.07 $283 $3 $0.03 NM - NM 77 3.7 Ophthamology, infectious disease, rheum. Marketed - Various 962,248 Alimera Sciences ALIM $9.47 $294 $68 $2.18 4.34 44 1.5 - NM Opththamology Phase III - Iluvien 73,517 Alexza Pharmaceuticals ALXA $3.15 $167 $56 $1.06 2.98 34 1.6 2 89.7 Neurology NDA filed - Staccato loxapine 235,313 Angiotech Pharmaceuticals ANPI $0.89 $76 $52 $0.62 1.45 22 2.4 - NM Cardiovascular Marketed -Taxus stent (BSX) 361,343 BioMimetic Therapeutics BMTI $12.30 $272 $67 $3.03 4.05 31 2.2 2 141.3 Regenerative medicine Phase III - Augment bone graft 74,055 Biosante Pharmaceuticals BPAX $2.03 $129 $41 $0.65 3.14 25 1.7 2 67.1 Women's health Marketed - Elestrin, others 505,460 Columbia Laboratories CBRX $1.08 $71 $26 $0.40 2.70 14 1.9 50 1.4 Women's health Marketed - Crinone 299,768 Cypress Bioscience CYPB $4.21 $162 $138 $3.59 1.17 15 8.9 37 4.4 Rheumatology Marketed - Savella (FRX) 321,836 Depomed Inc DEPO $3.10 $162 $81 $1.56 1.99 38 2.1 73 2.2 Neurology, metabolic disorders, other Marketed - Glumetza (SNTS) 316,644 DUSA Pharmaceuticals DUSA $2.10 $51 $18 $0.73 2.89 - NM 36 1.4 Dermatology Marketed - Levulan 52,474 EpiCept Corp EPCT $1.54 $68 $7 $0.16 9.44 18 0.4 4 16.6 Cancer NDA planned - Ceplene 25,313 InSite Vision INSV $0.34 $32 $22 $0.24 1.45 10 2.3 16 2.1 Ophthamology Marketed - AzaSite (ISPH) 69,800 Inspire Pharmaceuticals ISPH $5.29 $437 $114 $1.39 3.82 28 4.0 103 4.2 Ophthalimic Marketed - Various ophthalmic 451,137 ISTA Pharmaceuticals ISTA $2.70 $90 $43 $1.29 2.09 41 1.0 152 0.6 Ophthamology Marketed - Various 127,391 Javelin Pharmaceuticals JAV $1.44 $93 $1 $0.02 87.18 25 0.0 13 7.2 Neurology NDA filed - Dyloject 2,347,407 Jazz Pharmaceuticals JAZZ $8.57 $330 $78 $2.01 4.25 - NM 158 2.1 Neurology Marketed - Xyrem 452,396 Labopharm Inc DDSS $1.06 $76 $46 $0.65 1.62 19 2.5 60 1.3 Neurology Approved - Oleptro (tramadol) 711,216 Opko Health OPK $2.13 $544 $39 $0.15 14.06 11 3.6 - NM Ophthamology Phase II - Doxovir 192,545 Pain Therapeutics PTIE $5.51 $235 $176 $4.12 1.34 3 NM 12 19.2 Pain NDA to refile - Remoxy (KG) 129,180 Santarus Inc SNTS $2.86 $167 $92 $1.58 1.81 12 7.7 143 1.2 GI disorders Marketed - Zegerid 640,758 Savient Pharmaceuticals SVNT $12.60 $850 $99 $1.47 8.57 56 1.8 7 116.3 Inflammation BLA re-filed - Krystexxa 1,169,197 Transcept Pharmaceuticals TSPT $9.87 $132 $83 $6.19 1.59 21 3.9 13 10.6 Neurology NDA to refile - Intermezzo 27,034 Sector averages - - $211 $60 $1.47 7.58 $21 2.7 $42 25.4 - - 418,766

Market Cash Cash per Cash Yrs of 2010E Revenue Avg 1 mo Drug Delivery Companies Ticker Price cap ($M) ($M) share multiple Burn (1) cash revs (2) Multiple Focus (3) Lead program vol Access Pharmaceuticals ACCP $2.45 $38 $4 $0.28 8.86 9 0.5 3 13.5 Polymer and nanoparticle delivery systems Approved - MuGard 27,687 AP Pharma APPA $0.72 $28 $8 $0.19 3.76 0 31.0 26 1.1 Bioerodible delivery polymers NDA to re-file - APF530 189,538 Biodel Inc BIOD $4.65 $111 $33 $1.37 3.40 44 0.7 9 12.6 Reformulations of approved drugs NDA filed - VIAject 394,345 BioDelivery Sciences Intl BDSI $2.75 $66 $27 $1.12 2.47 17 1.6 19 3.4 Reformulations of approved drugs Marketed, Onsolis (Meda) 140,618 CPEX Pharmaceuticals CPEX $28.85 $73 $13 $5.24 5.50 1 9.6 21 3.4 Transdermal/mucosal delivery Marketed - Testim (AUXL) 13,996 DURECT Corp DRRX $2.88 $250 $36 $0.41 7.00 23 1.6 29 8.7 Sustained release and transdermal formulations NDA to refile - Remoxy (PTIE/KG) 259,400 Emisphere Technologies EMIS $3.35 $144 $3 $0.08 43.86 10 0.3 10 14.4 Improved availability of oral/injectible agents Phase III - Calcitonin (NVS) 144,737 Flamel Technologies ADS FLML $6.71 $164 $35 $1.45 4.63 14 2.5 48 3.4 Polymer-based sustained release systems Marketed - Coreg CR (GSK) 39,618 Generex Biotechnology GNBT $0.35 $108 $24 $0.09 3.84 18 1.3 - NM Oral-based delivery formulations Phase III - Oral-lyn 3,273,323 Halozyme Therapeutics HALO $7.20 $662 $55 $0.60 11.99 50 1.1 17 39.2 Hyaluronidase-based delivery formulations Marketed - Hylenex (BAX) 535,833 MannKind Corp MNKD $6.12 $694 $32 $0.28 22.01 154 0.2 34 20.5 Inhaled nanoparticle delivery formulations NDA to re-file - Afrezza 1,840,625 NexMed NEXM $0.31 $42 $5 $0.04 8.00 5 1.1 38 1.1 Transdermal delivery formulations Phase III - NM1000060 1,966,305 Penwest Pharmaceuticals PPCO $3.53 $113 $12 $0.36 9.75 - NM 45 2.5 Various extended release technologies Marketed - Various 262,324 Prolor Biotech PBTH $7.79 $360 $26 $0.57 13.69 7 3.7 - NM Long-acting therapeutic proteins Phase I - hGH-CTP 364,277 Transdel Pharmaceuticals TDLP $1.20 $19 $2 $0.12 9.62 3 0.8 - NM Pain Phase III - Ketotransdel 3,350 Unigene Laboratories UGNE $0.77 $71 $13 $0.15 5.28 11 1.3 66 1.1 Oral/nasal-based peptide delivery formulations Marketed - Fortical (Upsher-Smith) 35,832 Sector averages - - $191 $21 $0.81 10.56 $24 4.0 $20 10.3 - - 630,398 Notes: Data in millions except multiples and per-share figures. (1) Approximate burn estimated from operating cash flow excluding deferred revenue. (2) Current year consensus ests from Thomson-Reuters. (3) Generally refers to most advanced or highest profile program.

Small Cap Biotech The Weekly Shot Issue A weekly summary of healthcare industry valuation and near-term catalysts

The Weekly Shot: Important notes, methods and assumptions. - Small Cap Biotechnology Please review the Important Disclosures found on the last page of this report. - Pharmaceuticals and Large Consensus estimates are from Thomson Reuters. Cap Biotech - Generics and Specialty Approximate cash burn for small cap biotech and specialty pharmaceutical companies is generally estimated Pharmaceuticals from a firm’s stated operating cash flows, less deferred revenue. In some instances, large payments or one- time expenditures are excluded to best reflect underlying operating burn. Figures are taken from most recent 10-K filings, or from extrapolating reported cash consumption over a prior period as reported in 10-Q filings. Company guidance may also be taken into consideration.

Cash for small cap firms generally includes cash equivalents and restricted cash. Product sales data for small-cap companies are generally displayed when firms have products for sale. Serial

partnering or contract revenue streams are generally excluded. Many firms defy clear categorization. For small cap firms, the term “focus” is used to describe a company’s primary portfolio activity or its most high profile program. This may or may not coincide with its most

advanced pipeline program or marketed product(s). Debt/Capital = Total debt/(Total debt + Shareholders’ equity), using most recently reported quarter.

Price/T.Book = Recent price/(Book value excluding goodwill and intangibles), using most recently reported quarter.

Approximate EBITDA estimated from recent run rates.

Average forward PE ratios calculated from (Average 1H closing price)/(Year-end as-reported EPS), over a 3-year window. For example, a firm’s 2006 PE would be determined as: (Average closing prices 1H06)/(As-reported 2006 EPS). Meridian Equity Partners Prior 3-year sales, income, and cash flow data are taken from relevant quarterly and annual filings. As these 5 Hanover Square, 21st Floor are usually GAAP figures, they may diverge from estimates based on “as-reported” numbers, such as EPS New York, NY 10004 growth estimates. 212.500.6650 ROE = (GAAP net income)/(Prior year-end shareholders’ equity). [email protected] www.meptraders.com ROC = (EBIT)/(Prior year-end total debt + shareholders’ equity).

Errors and omissions will occur, please notify us when you see one.

Don’t be silly, I feel fine

Important Disclosures and Disclaimers

This document does not constitute an offer or solicitation to buy or sell any securities discussed herein, or to offer for compensation any investment advisory services or any securities brokerage services, in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation, or specific needs of any specific client of Meridian equity Partners Inc. Recipients should consider this report, if at all, as only a single factor in making an investment decision, and should not rely, if at all, solely on the investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment on the merits and risks of any particular investment.

This report is for informational purposes only and should not be construed as a solicitation to purchase or sell securities of any kind.

The authors of this report do not have the actual or implied authority to act on behalf of any issuer mentioned herein. Before making an investment decision with respect to any security mentioned in this report, the recipient, if authorized to receive this report, should consider whether such a decision is appropriate given the recipient’s particular investment needs, objectives, and financial circumstances. Investors should always independently evaluate their particular investments and strategies. Meridian Equity Partners Inc. will not treat persons who obtain this report as clients solely by virtue of their receiving or possessing this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income, if any, they produce may fluctuate and/or be adversely affected by interest rates, exchange rates, and general economic conditions, and investors should expect to realize losses as well as gains on investments in such securities, including the loss of investment principal. Meridian Equity Partners Inc. and the author(s) of this report accept no liability for any loss arising from the use of information contained in this report, except to the extent that liability may arise under applicable statutes and regulations.

The information and statistical data contained in this report were obtained or derived from public sources believed to be reliable, and Meridian Equity Partners Inc. does not represent that any such information or statistical data are free from errors or omissions and accepts no responsibility for such data (with the exception of the information contained under the caption “Important Disclosures”); accordingly, the information and statistical data contained herein should not be relied upon as such. Any estimates, opinions and recommendations expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. As with any investment having potential tax implications, clients should consult with their own tax advisers.

The managing members and employees of Meridian Equity Partners Inc. may hold securities of issuers that are reviewed or covered in this report. As a result, recipients should be aware that Meridian Equity Partners Inc. may have a conflict of interest that could affect the objectivity of the report. In addition, the managing members or an employee may dispose of a security of an issuer that the report covers favorably or, alternatively, purchase or hold a security of an issuer that the report covers negatively. Any investment decision with respect to a security of an issuer covered in this report should be made as part of a diversified portfolio of equity securities and in light of a recipient’s particular investment objectives and circumstances.

NO RESEARCH PRODUCTS FROM MERIDIAN EQUITY PARTNERS INC.OF ANY KIND, IN ANY FORMAT - ELECTRONIC, HARDCOPY, OR OTHERWISE PRESENTED - MAY BE FORWARDED OR COPIED WITHOUT PRIOR WRITTEN PERMISSION FROM MERIDIAN EQUITY PARTNERS INC.

ALL RESEARCH PRODUCTS FROM MERIDIAN EQUITY PARTNERS INC. ARE PROTECTED BY FEDERAL AND INTERNATIONAL COPYWRIGHT LAWS. MERIDIAN EQUITY PARTNERS INC. IS THE EXCLUSIVE OWNER OF ALL RESEARCH PRODUCTS CREATED, ALL RIGHTS THEREIN, AND RETAINS ALL PROPRIETARY RIGHTS TO SUCH RESEARCH. THIS INFORMATION SHOULD NOT AND CANNOT BE COPIED OR ARCHIVED OR USED BY ANYONE OTHER THAN A CLIENT OF THE AGAVE GROUP LLC WHO RECEIVED SUCH INFORMATION FROM THE AGAVEGROUPLLC.COM DOMAIN. ALL CONTENTS OF THIS RESEARCH ARE FURNISHED ON A CONFIDENTIAL BASIS.

The securities described herein may not be appropriate or suitable for all investors. Options trading is not suitable for all investors and involves a number of inherent risks including risk of loss. The Options Clearing Corp. ("OCC") Option Disclosure Document should be carefully read before investing. A copy may be obtained from Meridian Equity Partners Inc. at 5 Hanover Square, 21st Floor, New York, N.Y. 10004, 212-742-8472 or from the OCC web site, http://www.optionsclearing.com/publications/risks/riskchap1.jsp