Health Care Equity Capital Markets Review

Minneapolis New York HEALTH CARE EQUITY CAPITAL MARKETS REVIEW Boston Chicago 2007 Year-End Review San Francisco Palo Alto Charlotte Piper Jaffray Equity Capital Markets London January 2008 Shanghai

Since 1895. Member SIPC and FINRA THE PIPER JAFFRAY TEAM

Chad Abraham Managing Director Head of Equity Capital Markets (612) 303-6274

Equity Capital Markets

J. West Riggs Neil Riley Co-Head of Health Care Capital Markets Co-Head of Health Care Capital Markets (212) 284-9578 (612) 303-1601

Jessica Gould Jonathan Jewett Kevin Lander Michael Bassett Associate Analyst Analyst Analyst (212) 284-9346 (612) 303-6365 (612) 303-8432 (612) 303-6865

PIPEs / RDs Dave Stadinski Mark Spiegel Managing Director Principal Head of PIPEs / RDs PIPEs / RDs (212) 284-9572 (212) 284-9502 Chad Huber Jason Charpentier Associate Analyst (212) 284-9573 (212) 284-9501

1 TABLE OF CONTENTS

Section I IPO Market Review

Section II Healthcare IPO Market Update

Section III Follow-On Market Overview

Section IV Healthcare Follow-On Market Update

Section V Healthcare PIPE and Registered Direct Market Update

Section VI Piper Jaffray 2007 Healthcare Review

Appendix A Biopharma IPO Market Conditions

2 SECTION III 2007 IPO Market Review IPO Market Review Historical Volume Number IPO by Year IPO Capital Raised by Year 250 $60 IPO activity in 2007 227 $50.7 $50 200 196 was the strongest 188 $44.5 180 $42.5 $39.9 since 2004, both in # $40 150 of deals and $’s raised $30

100 $17.7 76 $20 Capital Raised ($B) Raised Capital Number of IPOs Completed IPOs of Number 50 $10

0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Quarterly IPO Activity – Number of Deals Quarterly IPO Activity – Capital Raised 80 20 72 $18.0 66

60 53 15 $13.5 $11.6 45 $10.9 $11.4 40 37 37 40 10 $8.0 $8.1

# of IPOs 26 $5.6

20 ($B) Raised Capital 5

0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 2006 2006 2007 2007 2007 2007 2006 2006 2006 2006 2007 2007 2007 2007 Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 4 IPO MARKET REVIEW Historical Volume Median IPO Deal Size and Post Deal Market Value Median IPO Dilution & Deal Size as a % of Market Value Median IPO deal size 50% $400 $366 45% 43% and post-deal market $350 40% 37% $300 33% value were $115 MM $265 35% 29% and $366 MM, $250 $232 30% 26% $200 25% 23% respectively in 2007

Percent 20% $ Millions $150 $120 $115 $110 15% $100 10% Primary shares offered $50 5% on IPOs was 23% of $0 0% 2005 2006 2007 2005 2006 2007 the post-deal shares Median IPO Deal Size Median IPO Market Value Dilution (Primary Shares Offered / Post-deal Shares) outstanding in 2007 Deal Size / Post-deal Market Value on average % of IPOs with Selling Shareholders % of Total Shares Offered by Selling Shareholders 60% 50% 45% Selling shareholder 50% 48% 46% 40% 38% 37% participation on IPOs 42% 40% 35% 32% decreased in 2007 30% 30% 25% 20% 20% 15% 10% 10% 5% 0% 0% 2005 2006 2007 2005 2006 2007

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 5 Deal sizes and market values exclude the overallotment option IPO MARKET REVIEW Historical Volume

Capital Raised ($B) by Issuer Market Value 2007 saw an increase $25.0 in the amount of capital raised by $20.1 $19.6 issuers in the $500 $20.0 $18.9

million - $2 billion $16.6 $16.3 $16.4 $15.5 market cap group $14.9 $15.0

Mid-cap issuers, $11.1

$9.6 raised $20.1 billion $10.0 $9.2 $9.5

2007 (78 IPOs) ($B) Capital Raised $6.7 increasing from $16.6 $5.9 $5.0 billion raised in 2006 $5.0 (53 IPOs)

(54)(18) (4) (155)(55) (17) (114)(63) (11) (109)(53) (18) (102)(78) (16) $0.0 2003 2004 2005 2006 2007 Issuer Market Value at IPO

Under $500 MM $500 MM - $2 B Over $2 B

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 6 IPO MARKET REVIEW Performance by Sector 2007 IPO Performance Aftermarket Total Amt % Chg Price % Chg % Chg % Chg performance in 2007 Sector No. Off ($B) File/Offer Offer/1-Day Offer/30-Day Offer/YE'07 Clean Tech 11 $3.0 -6% 16% 17% 79% was modest with the Consumer 10 $2.4 13% 16% 14% 1% Energy 13 $4.1 -5% 6% 9% 13% average IPO gaining Financial 28 $10.3 -1% 9% 6% -3% 13% from its offer Health Care 44 $4.7 -11% 11% 9% 8% Industrials 6 $0.9 -5% 3% 4% -2% price; The S&P gained REIT 1 $0.5 -23% 6% -3% -59% Technology 72 $15.1 5% 20% 17% 16% 2.5% in the same Transportation 5 $0.8 3% 11% 8% 18% Other 6 $2.7 6% 14% 7% -4% period, the Nasdaq Total 196 $44.5 -1% 14% 12% 13% gained roughly 7% and the DJIA returned less than 5% 2006 IPO Performance Total Amt % Chg Price % Chg % Chg % Chg Sector No. Off ($B) File/Offer Offer/1-Day Offer/30-Day Offer/YE'06 Clean Technology was Clean Tech 8 $2.0 9% 11% 4% 2% Consumer 19 $5.8 9% 21% 23% 36% the best performing Energy 9 $3.0 -5% 5% -1% 10% Financial 29 $8.6 -2% 12% 14% 29% sector in 2007 with an Health Care 36 $3.7 -20% 7% 7% 23% Industrials 16 $3.8 -2% 14% 17% 24% average return of 79% REIT 1 $0.2 2% 1% -5% -4% Technology 46 $7.6 2% 16% 19% 33% Transportation 10 $5.5 3% 12% 25% 33% Other 6 $2.3 -11% 8% 13% 2% Total 180 $42.5 -3% 12% 14% 26%

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 7 IPO MARKET REVIEW IPO Aftermarket Performance Relative to Pricing IPO Aftermarket Performance Relative to Pricing 50% IPOs pricing above 40% 1-Day Return Return to YE '07 their initial filed range 36% 36% 30% showed the strongest 20% aftermarket 14% 13% performance in 2007 % Return 10% 8% 8% 0% 1%

-10% -5% Below Range In Range Above Range Overall (57 deals) (83 deals) (56 deals)

The best performing IPO Aftermarket Performance by Sector IPO sectors in 2007 160% Overall IPOs Above Range IPOs were Clean 129% 120% Technology and 79% Transportation 80%

47% 40% 33% % Return 40% 30% 18% 16% 22% 20% 13% 8% 8% 11% 1% 0% -2% -3% -24% -40% Clean Tech Transportation Technology Energy Health Care Consumer Industrials Financial Other

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 8 SECTION IV Healthcare IPO Market Update HEALTH CARE IPO MARKET UPDATE

2007 saw a 22% Healthcare IPO issuance continues to grow significantly, both by the number of deals increase in IPOs, priced and issuance volume: from In 2007, 44 Healthcare IPOs were priced for a total issuance volume of $4.68bn 36 in 2006 to 44 in In 2006, 36 Healthcare IPOs were priced for a total issuance volume of $3.74bn 2007 In 2005, 32 Healthcare IPOs were priced for a total issuance volume of $2.29bn

Q4 in 2007 was the $1,200 16 2nd the busiest 14 14 $1,000 13 quarter for 12 12 11 12 Healthcare IPOs $800 10 9 10 since 2000. Only Q2 8 $600 7 7 8 2004 had more IPOs # of IPO Proceeds ($MM) Proceeds IPO 6 $400 4 completed 4 Healthcare IPOs (18 4 $200 deals) 2

$0 0 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07

Biopharmaceuticals Medical Technology Health Care Services # of IPOs

From 2006 to 2007 Healthcare IPO issuance volume grew by $94MM, or 25%. The number of Healthcare IPOs grew by 8, or 22%

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 10 HEALTH CARE IPO MARKET UPDATE

Health Care

Summary IPO Details Biopharmaceuticals Health Care Services Medical Technology All Healthcare by sector Number of IPOs 2671144

Average $81.0 $172.4 $124.7 $106.6 Biopharma continued Amount Offered Median $56.0 $149.0 $125.0 $76.5 to be the most active Average $11.6 $15.4 $12.9 $12.5 sub-sector of Offer Price Median $11.2 $16.0 $15.0 $13.0 Healthcare Average $310.7 $457.7 $420.8 $361.6 Market Value Median $284.5 $533.8 $356.8 $296.6 Although Health Care Average -16% -1% -7% -11% Services saw the least % Chg Price FTO Median -20% 0% -6% -9% deal activity, it was Average 4% 24% 17% 11% 1 Day Return the best performing Median 0% 13% 7% 5% subsector Average -1% 33% 10% 7% 30 Day Return Median -4% 28% 9% 2%

Average 2% 35% 13% 10% Current Return Median -9% 28% 0% -1%

Return represents pricing data through 12/31/2007

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 11 HEALTH CARE IPO MARKET UPDATE

2007 Top Health Care Top Health Care IPOs of 2007 ($ in Millions) IPOs across all subsectors In 2007, the largest Healthcare IPO was Accuray Inc, $331MM Masimo Corp has the best current aftermarket performance, up 142.2% since the IPO

Gray shading indicates Piper – led or co=managed transaction

By Amount Offered By Pricing Performance

Amt Off Mkt Value % Chg Return Return Amt Off Mkt Value % Chg Return Return Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current

Accuray Inc Med Tech $331.0 $939.8 20.0% 58.2% (14.1%) 3SBio Inc Biopharma $135.0 $343.6 23.1% (7.2%) (6.9%) Skilled Healthcare Group Inc HC Services $297.0 $533.8 3.3% 2.6% 1.5% athenahealth Inc HC Services $130.0 $568.8 20.0% 97.2% 112.5% Simcere Pharmaceutical Group Biopharma $261.0 $906.3 7.4% 5.5% (9.4%) Accuray Inc Med Tech $331.0 $939.8 20.0% 58.2% (14.1%) TomoTherapy Inc Med Tech $257.0 $918.6 18.8% 19.3% 0.4% TomoTherapy Inc Med Tech $257.0 $918.6 18.8% 19.3% 0.4% MedAssets HC Services $245.0 $686.0 6.7% 28.1% 43.8% WuXi PharmaTech Biopharma $212.0 $833.7 16.7% 40.0% 94.6%

By 1-Day Aftermarket Performance By Current Aftermarket Performance

Amt Off Mkt Value % Chg Return Return Amt Off Mkt Value % Chg Return Return Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current

athenahealth Inc HC Services $130.0 $568.8 20.0% 97.2% 112.5% Masimo Corp Med Tech $233.0 $897.9 0.0% 22.9% 142.2% TranS1 Inc Med Tech $95.0 $281.6 15.4% 60.0% 10.0% athenahealth Inc HC Services $130.0 $568.8 20.0% 97.2% 112.5% Accuray Inc Med Tech $331.0 $939.8 20.0% 58.2% (14.1%) WuXi PharmaTech Biopharma $212.0 $833.7 16.7% 40.0% 94.6% Genoptix Inc Biopharma $98.0 $265.5 13.3% 45.3% 77.1% Genoptix Inc Biopharma $98.0 $265.5 13.3% 45.3% 77.1% WuXi PharmaTech Biopharma $212.0 $833.7 16.7% 40.0% 94.6% Insulet Corp Med Tech $125.0 $369.5 0.0% 6.4% 55.9%

The five largest IPOs in 2007 have an average current return of 4.44% The five IPOS with the highest current return have an average size of $213MM

Source: ECM Analytics, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 12 HEALTH CARE IPO MARKET UPDATE

2007 saw an Health Care IPOs Pricing by Subsector 2006 Health Care IPOs Pricing by Subsector 2007 improvement in All 26 11 All 20 24 pricing with 55% of all HC deals pricing Biopharma 18 4 Biopharma 14 12 in or above the range compared to 30% in Med Tech 7 3 Med Tech 4 7 2006 Services 1 Services The biopharma sub- 4 2 5 sector showed the 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% greatest Below Range Above or Within Original Range Below Range Above or Within Original Range improvement with 2006 IPO Volume by Subsector ($ in Millions) 2007 IPO Volume by Subsector ($ in Millions)

46% pricing in or 2006 Total Proceeds = $3,739 MM 2007 Total Proceeds = $4,688 MM Med Tech above the range 29% compared to 18% in Med Tech 26% 2006 $976 Biopharma $1,092 55% $2,068 1,590 Biopharma 45%

$695 $576 Services Services 26% 19%

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 13 HEALTH CARE IPO MARKET UPDATE

Biopharmaceuticals Amount Filing Filing Offer Market % Chg Price Trade Date Issuer Ticker Offered Return 1-Day Return 30-Day Return Current Biopharma, Health Date Price Price Value ($MM) FTO ($MM) Care Services and 8/30/07 11/7/07 ARYx Therapeutics Inc ARYX 14.00 - 16.00 $10.00 $50 $175 -33% -19% -24% -24% 8/13/07 10/31/07 Nanosphere Inc NSPH 14.00 - 16.00 $14.00 $113 $295 -7% 14% 5% -15% 7/31/07 10/29/07 Genoptix Inc GXDX 14.00 - 16.00 $17.00 $98 $266 13% 45% 53% 78% Med-Tech IPOs 2/14/07 10/25/07 Novabay Pharmaceuticals Inc NBY 4.00 - 6.00 $4.00 $20 $85 -20% -10% -9% -11% 5/11/07 10/9/07 Targanta Therapeutics TARG 12.00 - 14.00 $10.00 $58 $210 -23% -6% -9% -9% 6/18/07 10/4/07 MAP Pharmaceuticals Inc MAPP 14.00 - 16.00 $12.00 $69 $231 -20% 11% 15% 15% completed in 2007 7/24/07 8/8/07 WuXi PharmaTech (Cayman) Inc WX 11.00 - 13.00 $14.00 $212 $834 17% 40% 103% 105% 6/19/06 8/2/07 Sucampo Pharmaceuticals Inc SCMP 14.00 - 16.00 $11.50 $50 $480 -23% 7% 17% 26% 12/21/06 6/5/07 Response Genetics Inc RGDX 7.00 - 8.00 $7.00 $21 $71 -7% 0% -7% -37% 3/9/07 5/31/07 Jazz Pharmaceuticals Inc JAZZ 24.00 - 26.00 $18.00 $108 $442 -28% -2% -8% -15% 3/30/07 5/30/07 Amicus Therapeutics Inc FOLD 14.00 - 16.00 $15.00 $75 $334 0% -4% -23% 5% 2/28/07 5/24/07 Helicos BioSciences Corp HLCS 13.00 - 15.00 $9.00 $52 $185 -36% -7% -8% 11% 3/1/07 5/22/07 Sirtris Pharmaceuticals Inc SIRT 9.00 - 11.00 $10.00 $69 $278 0% 8% 5% 40% 5/1/07 5/16/07 Eurand NV EURX 17.00 - 19.00 $16.00 $112 $702 -11% -4% -175% -1% 2/7/07 5/10/07 Biodel Inc BIOD 14.00 - 16.00 $15.00 $86 $291 0% 20% 20% 30% 2/7/07 5/1/07 Neurogesx Inc NGSX 13.00 - 15.00 $11.00 $44 $137 -21% -7% -26% -46% 5/8/06 4/26/07 Pharmasset Inc VRUS 12.00 - 14.00 $9.00 $45 $185 -31% 1% -5% 53% 12/19/06 4/25/07 OREXIGEN Therapeutics Inc OREX 11.00 - 13.00 $12.00 $97 $298 0% 8% 46% 18% 3/23/07 4/19/07 Simcere Pharmaceutical Group SCR 12.50 - 14.50 $14.50 $261 $906 7% 6% 12% -13% 2/26/07 3/15/07 Tongjitang Chinese Medicines Co TCM 15.00 - 17.00 $10.00 $102 $334 -38% -3% -2% -17% 9/1/06 2/26/07 Rosetta Genomics Ltd ROSG 11.00 - 13.00 $7.00 $30 $79 -42% 5% -1% -29% 11/9/06 2/8/07 Optimer Pharmaceuticals Inc OPTR 12.00 - 14.00 $7.00 $56 $140 -46% 21% 41% 12% 1/19/07 2/6/07 3SBio Inc SSRX 12.00 - 14.00 $16.00 $135 $344 23% -7% -31% -9% 11/22/06 2/6/07 Synta Pharmaceuticals Corp SNTA 14.00 - 16.00 $10.00 $50 $338 -33% -4% -13% -31% 11/8/05 2/1/07 Molecular Insight Pharmaceuticals Inc MIPI 14.00 - 16.00 $14.00 $70 $345 -7% 0% -6% -35% Health7/3/06 1/24/07 Care Oculus Services Innovative Sciences Inc OCLS 12.00 - 14.00 $8.00 $27 $95 -38% 0% 0% -48%

Mean $81 $311 -16% 4% -1% 2% Median $69 $285 -20% 0% -3% -9%

Amount Filing Filing Offer Market % Chg Price Trade Date Issuer Ticker Offered Return 1-Day Return 30-Day Return Current Date Price Price Value ($MM) FTO ($MM)

8/24/07 12/12/07 MedAssets MDAS 14.00 - 16.00 $16.00 $245 $686 7% 28% 39% 39% 4/27/07 12/6/07 Triple-S Management Corp GTS 16.00 - 18.00 $14.50 $233 $542 -15% 4% 28% 28% 8/11/06 11/14/07 Virtual Radiologic Corp VRAD 16.00 - 18.00 $17.00 $78 $279 0% 22% 40% 40% Medical5/14/07 11/8/07 Technology Ensign Group Inc ENSG 20.00 - 22.00 $16.00 $74 $327 -24% 1% 1% -3% 6/22/07 9/19/07 athenahealth Inc ATHN 14.00 - 16.00 $18.00 $130 $569 20% 97% 110% 133% 10/10/06 5/14/07 Skilled Healthcare Group Inc SKH 14.00 - 16.00 $15.50 $297 $534 3% 3% -3% -2% 9/28/06 1/30/07 Animal Health International Inc AHII 10.00 - 12.00 $11.00 $149 $268 0% 13% 17% 6%

Mean $172 $458 -1% 24% 33% 35% Median $149 $534 0% 13% 28% 28%

Amount Filing Filing Offer Market % Chg Price Trade Date Issuer Ticker Offered Return 1-Day Return 30-Day Return Current Date Price Price Value ($MM) FTO ($MM)

5/25/07 11/14/07 EnteroMedics Inc ETRM 14.00 - 16.00 $8.00 $44 $130 -47% 0% 9% 9% 8/20/07 11/6/07 Bioform Medical Inc BFRM 9.00 - 11.00 $8.00 $92 $357 -20% 7% 0% -5% 5/14/07 10/25/07 Power Medical Interventions PMII 12.00 - 14.00 $11.00 $49 $182 -15% 7% 12% 30% Source: Equidesk, company filings. 7/24/07 10/16/07 TranS1 Inc TSON 12.00 - 14.00 $15.00 $95 $282 15% 60% 43% 25% Data excludes transactions less than $20 million,4/17/07 closed-end 8/7/07 Masimofunds, Corp and unit offerings MASI 16.00 - 18.00 $17.00 $233 $898 0% 23% 26% 137% 2/14/07 5/14/07 Insulet Corp PODD 14.00 - 16.0014 $15.00 $125 $369 0% 6% -5% 67% Shading denotes Piper Jaffray as manager 2/12/07 5/8/07 TomoTherapy Inc TTPY 15.00 - 17.00 $19.00 $257 $919 19% 19% 16% -6% 5/25/06 3/28/07 Senorx Inc SENO 11.00 - 13.00 $8.00 $51 $120 -33% 2% 3% 0% 12/29/05 2/9/07 VeriChip Corp CHIP 6.50 - 8.50 $6.50 $20 $67 -13% 0% -25% -52% 11/13/06 2/7/07 Accuray Inc ARAY 14.00 - 16.00 $18.00 $331 $940 20% 58% 44% -19% 8/7/06 1/31/07 Xtent Inc XTNT 16.00 - 18.00 $16.00 $75 $365 -6% 3% -15% -44% SECTION V 2007 Follow-on Market Review FOLLOW-ON OFFERING MARKET REVIEW Historical Volume

Number of Follow-ons by Year The number of follow- 600 514 on offerings 500 462 436 completed in 2007 427 415 400 decreased 10% 300 although capital raised increased slightly 200

100 Number of FOs Completed Number 0 2003 2004 2005 2006 2007

Follow-on Capital Raised by Year $125

$101.5 $100.6 $102.4 $100 $96.4

$75 $72.0

$50

Capital Raised ($B) Raised Capital $25

$0 2003 2004 2005 2006 2007

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 16 FOLLOW-ON OFFERING MARKET REVIEW Historical Volume

Median Follow-on Deal Size and Post-Deal Market Value Median Follow-on Dilution & Deal Size as a % of Market Value Median follow-on deal $1,000 20% $881 size and post-deal $858 $753 16% 15% $800 16% 15% market value in 2007 13% 12% 13% were $124 MM and $600 12% $881 MM, respectively

$400 Percent 8% $ Millions

$200 $124 4% $102 $114

$0 0% 2005 2006 2007 2005 2006 2007 Median Follow-on Deal Size Median Follow-on Market Value Dilution (Primary Shares Offered / Post-deal Shares) 100% selling Deal Size / Post-deal Market Value shareholder offerings % of Follow-on Offerings with Selling Shareholders 100% Selling Shareholder Offerings as a % of Total Offerings were down slightly in 50% 30% 45% 28% 43% 26% 2007, however, still 40% 25% 24% 40% account for nearly ¼ 20% of all follow-on 30% 15% offerings 20% 10%

10% 5%

0% 0% 2005 2006 2007 2005 2006 2007

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 17 Deal sizes and market values exclude the overallotment option FOLLOW-ON OFFERING MARKET REVIEW Historical Volume

Capital Raised ($B) by Issuer Market Value Follow-on offering $75.0 distribution by issuer $66.9 market value has been $64.4 consistent over the $60.0 $57.5 past 3 years $49.6

$45.0

$35.7 $33.5 $30.8 $30.0 $27.9 $27.6

Capital Raised($B) $22.3

$15.9 $15.0 $14.0 $9.2 $9.5 $7.8

(156) (179) (92) (166) (224) (124) (144) (182) (110) (143) (200) (119) (120) (174) (121) $0.0 2003 2004 2005 2006 2007 Issuer Market Value at Follow-on

Under $500 MM $500 MM - $2 B Over $2 B

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 18 FOLLOW-ON OFFERING MARKET REVIEW Performance by Sector

2007 Follow-on Performance 2007 follow-on offering 100 % Total Amt % Chg Price % Chg From % Chg % Chg % Chg activity remained Sector No. Secondary Offered ($B) File/Offer Last Sale Offer/1-Day Offer/30-Day Offer/YE'07 Clean Tech 13 1 $2.4 -9% -5% 1% 2% 40% balanced across each Consumer 28 11 $5.8 -5% -3% 1% -1% -7% of the major market Energy 49 9 $9.1 -7% -4% 2% 0% 3% Financial 73 12 $20.0 -4% -2% 1% 1% -11% sectors Health Care 61 5 $8.8 -5% -5% 2% 2% -1% Industrials 52 20 $23.7 -6% -3% 2% 7% 7% REIT 28 $6.9 -2% -2% 1% -2% -12% Technology 72 29 $15.4 -4% -4% 3% 5% 6% However, Financial, Transportation 29 8 $7.3 -3% -4% 1% 6% 3% Other 10 3 $2.9 -5% -1% 13% 11% -2% Industrials, and Total 415 98 $102.3 -5% -3% 3% 3% 3% Technology issuers accounted for 47% of 2006 Follow-on Performance the deals completed and 58% of the total 100 % Total Amt % Chg Price % Chg From % Chg % Chg % Chg Sector No. Secondary Offered ($B) File/Offer Last Sale Offer/1-Day Offer/30-Day Offer/YE'06 equity raised Clean Tech 7 1 $1.1 -7% -2% 0% 0% 4% Consumer 40 24 $10.7 -3% -2% 2% 3% 12% Energy 42 6 $10.7 -2% -2% 1% 1% 0% Financial 87 19 $20.5 -3% -2% 2% 4% 15% Health Care 81 11 $11.1 -6% -4% 3% 4% 7% Industrials 43 18 $9.8 -6% -3% 2% 5% 9% REIT 59 7 $13.5 -3% -1% 4% 5% 15% Technology 71 29 $16.7 -5% -3% 3% 7% 13% Transportation 17 8 $2.9 -7% -2% 2% 7% 30% Other 15 7 $3.6 -5% -3% 1% 1% 10% Total 462 130 $100.6 -4% -3% 3% 4% 11%

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 19 SECTION VI Health Care Follow-on Market Update HEALTH CARE FOLLOW-ON MARKET UPDATE

2007 Health Care In 2007, the largest Health Care Follow-On issuer was Schering Plough, $1.6bn Follow-on Issuance – Pharmion has the best Year-End performance, up 109.5% since the Follow-On Offering All Marketed and Interestingly, all of the top 5 issuers by 1-day aftermarket performance are biopharma Accelerated issuers Transactions

Top Health Care Follow-ons of 2007 ($ in Millions)

By Amount Offered By Pricing Performance

Amt Off Mkt Value % Chg Return Return Amt Off Mkt Value % Chg Return Return Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current

Schering-Plough Corp Biopharma $1,581.3 $41,250.0 (6.4%) (0.9%) (1.2%) Obagi Medical Products Inc Biopharma $144.9 $452.0 18.4% 4.8% (7.6%) Inverness Medical Innovations Med Tech $848.6 $4,118.9 2.5% 0.0% (7.6%) Vanda Pharmaceuticals Inc Biopharma $119.3 $699.4 13.0% (0.0%) (74.3%) Mylan Inc Biopharma $749.0 $4,233.5 (6.9%) 0.9% (0.9%) BioMimetic Therapeutics Inc Med Tech $55.8 $299.3 9.5% 6.9% 6.4% Mylan Inc Biopharma $510.2 $4,756.2 (11.6%) 3.9% (28.9%) Repros Therapeutics Inc Biopharma $35.9 $175.5 8.4% 0.0% (32.6%) Emeritus Corp HC Services $365.8 $912.6 (21.0%) 2.6% (19.0%) Poniard Pharmaceuticals Biopharma $75.0 $209.5 5.2% 7.4% (17.2%)

By 1-Day Aftermarket Performance By Year End Performance

Amt Off Mkt Value % Chg Return Return Amt Off Mkt Value % Chg Return Return Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current Issuer Subsector ($MM) ($MM) Price FTO 1-Day Current

AP Pharma Inc Biopharma $35.0 $45.5 (62.5%) 24.2% (9.7%) Pharmion Corp Biopharma $138.0 $1,084.5 (3.2%) 0.0% 109.5% Dyax Corp Biopharma $44.3 $177.1 (12.4%) 11.7% 0.3% Bruker Biosciences Corp Biopharma $84.9 $744.0 (10.7%) 4.9% 87.3% Aradigm Corp Biopharma $36.1 $43.7 (33.6%) 10.5% 60.0% Aradigm Corp Biopharma $36.1 $43.7 (33.6%) 10.5% 60.0% Vanda Pharmaceuticals Biopharma $35.0 $206.6 (3.9%) 10.0% OTC Clinical Data Med-Tech $75.9 $286.2 2.1% (3.6%) 51.7% Poniard Pharmaceuticals Biopharma $75.0 $209.5 5.2% 7.4% (17.2%) Alphatec Med-Tech $34.5 $126.9 (2.0%) 4.4% 46.1%

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 21 HEALTH CARE FOLLOW-ON MARKET UPDATE

2007 Health Care Health Care Follow-on Activity by Quarter and Sector 36 Follow-on Issuance $3,000 31 30 $2,500 26 24 24 22 22 $2,000 21

18 $1,500 15 14 14

Proceeds ($MM) Proceeds 12 12

12 ofFollow-ons # $1,000 10

6 $500

0 $0 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4'07 Biopharmaceuticals Medical Technology Health Care Services Other Health Care Nbr of Follow-ons

In 2007, 74 follow-on transactions priced for a total of $9.3bn The majority of Health Care follow-on activity in 2007 has been in the Biopharmaceutical space, with 56 transactions priced, representing 76% of the total deal activity and 65% of the total proceeds There were 6 transactions from HC Services issuers and 11 from Medical Technology issuers Healthcare issuers overall continue to experience price sensitivity with the average marketed transaction down -8% from file to offer

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 22 HEALTH CARE FOLLOW-ON MARKET UPDATE

2007 Health Care File / Offer Performance By Quarter Aftermarket Performance by Quarter 0% 50% Follow-on Execution 46% (2%) 40% & Performance (4%) (2.7%) (2.7%) (2.8%) (3.8%) (4.0%) (6%) (4.3%) (4.3%) (4.4%) (5.2%) 30% (6.3%) (8%) (6.7%) (7.4%) (7.9%) (10%) 20% (9.7%) 15% 13% (12%) (10.8%) 9% 10% 6% 6% (14%) 4%5% 6%4% 5% 4% 3% 2% 3% 2% 1% 2% 1% (16%) 0% (0%) (18%) (16.7%) (2%) (2%) Q1 '06Q2 '06Q3 '06Q4 '06Q1 '07Q2 '07Q3 '07Q4'07 -10% (9%) Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4'07 File / Offer Last Trade / Offer Offer / 1 Day Offer / 30 Day Offer / Current

Follow-on Breakdown – 2007 Shelf Takedown Method – 2007

100% 80% 77% 86% 87% 70% 80% 60% 55%

60% 50% 40% % of Total % of % of Total % of 40% 30% 20% 20% 17% 20% 12% 14% 13% 8% 10% 5% 6%

0% 0% S-1 / S-3 Conventional Shelf Takedown Conventionally Spot Secondary Bought Deal Registered Direct Marketed Proceeds Number of Offerings Proceeds Number of Offerings

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 23 HEALTH CARE FOLLOW-ON MARKET UPDATE

• In 2007 overall, marketed transactions accounted for 2007 Health Care Fully Marketed Transactions as a % of Deal Volume 59% of all Health Care follow-ons in terms of number of Follow-on Issuance – deals and 81% in terms of proceeds 100% 95% Marketed – Average deal size for marketed follow-ons in 2007 90% 86% 79% 80% Transactions was $172MM vs. $58MM for accelerated follow- 73% 73% 68% ons 70% 64% 66% 61% 61% 59% 60%61% 60% 52% • In Q4, marketed transactions accounted for 79% of all 51% 50% Health Care follow-ons in terms of number of deals and 50%

95% in terms of proceeds vs. 61% of deals and 60% of % of Total 40%

proceeds in Q4 2006. 30% • Biopharmaceutical issuers continue to be the most 20% active subsector group, accounting for 63% of the 10%

Health Care follow-ons in 2007 0% Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4'07 Proceeds Number of Issuances

Marketed Follow-on Transactions Completed Since 1/1/2007

Total Amt % Chg Price % Chg Last % Chg % Chg % Chg Sector No. Off ($MM) File/Offer Trade/Offer Offer/1 Day Offer/30 Day Offer/Curr Biopharmaceuticals 28 $4,508 -13% -7% 4% 3% -8% Health Care Services 4 $651 -6% -2% 5% 0% 17% Medical Technology 11 $2,233 3% -3% 2% 2% 13% Other Health Care 1 $163 0% 0% 0% -7% -2% Total 44 $7,555 -4% -3% 3% 0% 5%

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 24 HEALTH CARE FOLLOW-ON MARKET UPDATE

• In 2007, 30 accelerated follow-ons were completed for a 2007 Health Care Accelerated Transactions as a % of Deal Volume total of $1.7bn. 4 of the 30 follow-ons were priced in Q4 Follow-on Issuance – 50% 49% 50% • Overall in 2007, accelerated follow-ons accounted for 48% Accelerated 45% 41% 41% of all Health Care follow-ons in terms of number of 40% 40% 39% 39% 39% Transactions deals and 19% in terms of proceeds 36% 34% 35% – Average deal size for accelerated follow-ons in 32% 2007 was $58MM vs. $172MM for marketed 30% 27% 27% 25% follow-ons 21%

% of Total 20% • 93% of accelerated follow-ons in 2007 came from 16% biopharmaceutical issuers. These issuers continue to 15% 10% experience price sensitivity, averaging -6% change in 5% price from file to offer 5% 0% • Both in 2006 and 2007, the proportion of accelerated Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 follow-ons was close to 40% off all healthcare follow-ons Proceeds Number of Issuances

Accelerated Follow-on Transactions Completed Since 1/1/2007

Total Amt % Chg Price % Chg Last % Chg % Chg % Chg Sector No. Off ($MM) File/Offer Trade/Offer Offer/1 Day Offer/30 Day Offer/Curr Biopharmaceuticals 28 $1,568 -6% -5% 2% -1% -11% Health Care Services 2 $178 -1% -1% -4% -19% -33% Medical Technology 0 $0 0% 0% 0% 0% 0% Other Health Care 0 $0 0% 0% 0% 0% 0% Total 30 $1,746 -2% -2% -1% -5% -11%

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 25 HEALTH CARE FOLLOW-ON MARKET UPDATE

Health Care Yearly 2004 Follow-on Volume by Subsector ($ in Millions) 2005 Follow-on Volume by Subsector ($ in Millions) 2004 Total Proceeds = $7,725 MM 2005 Total Proceeds = $8,617 MM Follow-on Execution Med Tech 16% by Subsector Med Tech $1,269 6%

$478

Biopharma 62% $5,404

$4,097 $2,225 Services $2,602 Biopharma 29% 53% Services 30%

$134 $133

Other Other 2% 2% 2006 Follow-on Volume by Subsector ($ in Millions) 2007 Follow-on Volume by Subsector ($ in Millions)

2006 Total Proceeds = $11,022 MM 2007 YTD Total Proceeds = $6,250 MM Med Tech 10%

$1,151 Biopharma Biopharma 65% $4,427 57% Med Tech $6,205 $877 24%

$3,438 Services $783 31%

$228 $163 Services Other Other 9% 2% 2% Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 26 HEALTH CARE FOLLOW-ON MARKET UPDATE

Biopharmaceuticals Health Care Amount Amount Offered / % Change Offer Offered Pre-Deal Pre-Deal Mkt % Chg Price Last Trade/ Return Return Return Filing Date Pricing Date Execution Issuer Price ($MM) Mkt Cap Cap FTO Offer 1 Day 30 Day Current Follow-ons 11/1/07 11/13/07 Marketed Mylan Inc $14.00 $749 $3,484 21% -7% -2% 1% -1% -1% 11/2/07 11/2/07 Accelerated Chelsea Therapeutics International Inc $6.62 $49 $149 33% 0% 0% 4% Delisted Delisted 10/19/07 11/2/07 Marketed Arena Pharmaceuticals Inc $9.91 $109 $596 18% -6% 0% 0% -18% -18% Completed in 2007 8/13/07 10/29/07 Marketed Neurobiological Technologies Inc $2.75 $60 $13 465% -68% -1% -5% 10% 10% 9/24/07 10/26/07 Marketed Bionovo Inc $2.50 $25 $138 18% -37% -21% -2% -28% -28% 10/5/07 10/25/07 Marketed Protalix BioTherapeutics Inc $5.00 $50 -$25 -199% -86% -86% 26% -35% -35% 9/14/07 10/12/07 Marketed Obagi Medical Products Inc $20.00 $145 $436 33% 18% -3% 5% 0% -8% 10/10/07 10/10/07 Accelerated CombinatoRx Inc $6.25 $35 $170 21% -7% -7% 0% -11% -27% 9/24/07 9/24/07 Accelerated Barrier Therapeutics Inc $5.75 $32 $169 19% -11% -11% 8% -12% -32% 9/20/07 9/20/07 Accelerated Progenics Pharmaceuticals Inc $23.15 $60 $507 12% -5% -5% -1% 1% -18% 9/18/07 9/20/07 Accelerated InterMune Inc $19.50 $78 $611 13% -2% -2% 2% -1% -28% 9/10/07 9/10/07 Accelerated Exelixis Inc $10.40 $72 $940 8% -7% -7% -1% 12% -12% 8/15/07 8/15/07 Accelerated Lev Pharmaceuticals Inc $1.50 $35 $172 20% -4% -4% 10% 6% OTC 8/2/07 8/9/07 Marketed Schering-Plough Corp $27.50 $1,581 $39,875 4% -6% 0% -1% 7% -1% 7/10/07 7/17/07 Marketed Clinical Data Inc $22.00 $76 $220 34% 2% -4% -4% 0% 4% 4/27/07 7/16/07 Marketed Sangamo BioSciences Inc $9.15 $30 $291 10% 19% -6% 6% 11% 48% 7/9/07 7/13/07 Marketed Dyax Corp $3.67 $44 $139 32% -12% 0% 12% 14% 0% 6/29/07 6/29/07 Accelerated Peregrine Pharmaceuticals Inc $0.75 $23 $125 18% -3% -3% 3% -1% -49% 6/4/07 6/28/07 Marketed American Oriental Bioengineering Inc $8.50 $83 $554 15% -20% -3% 3% -14% 36% 6/18/07 6/20/07 Accelerated ONYX Pharmaceuticals Inc $28.00 $185 $1,344 14% -9% -1% -1% -4% 109% 4/5/07 6/14/07 Marketed AP Pharma Inc $1.65 $35 $10 334% -63% -16% 24% 47% -10% 6/6/07 6/14/07 Marketed ArQule Inc $7.75 $58 $278 21% -3% -2% 2% -8% -22% 6/7/07 6/7/07 Accelerated Auxilium Pharmaceuticals Inc $14.50 $53 $526 10% 0% 0% 0% 11% 115% 6/4/07 6/7/07 Accelerated Acorda Therapeutics Inc $18.50 $80 $442 18% -6% -2% -1% 4% 23% 5/30/07 5/31/07 Accelerated Cypress Bioscience Inc $15.50 $73 $501 15% -5% -5% -2% -16% -24% 5/24/07 5/24/07 Accelerated Sunesis Pharmaceuticals Inc $4.43 $21 $131 16% 0% 0% -2% -14% -61% 5/14/07 5/21/07 Marketed Genomic Health Inc $15.50 $53 $382 14% -2% -1% 7% 23% 38% 5/2/07 5/10/07 Marketed Javelin Pharmaceutical Inc $6.00 $45 $245 19% -1% -1% -2% 7% -32% 5/2/07 5/10/07 Marketed Pharmion Corp $30.00 $138 $965 14% -3% -2% 0% 4% 114% 5/4/07 5/4/07 Accelerated Spectrum Pharmaceuticals Inc $6.25 $32 $160 20% -5% -5% 5% 8% -53% 5/3/07 5/3/07 Accelerated Progen Pharmaceuticals Ltd $4.75 $33 $221 15% -21% -21% 3% -2% -58% 5/2/07 5/2/07 Accelerated Immunomedics Inc $4.95 $24 $346 7% -7% -7% 9% 12% -48% 4/30/07 5/2/07 Accelerated Rigel Pharmaceuticals Inc $9.75 $56 $246 23% -14% -4% -1% 0% 163% 4/23/07 5/2/07 Marketed Pharmacopeia Drug Discovery Inc $5.00 $40 $71 56% -22% -8% 2% 20% -1% 4/23/07 5/1/07 Marketed Array Biopharma Inc $13.00 $95 $520 18% -7% -4% -1% -4% -35% 4/19/07 4/26/07 Marketed Genitope Corp $3.85 $23 $139 17% -15% 0% -6% -3% -79% 4/26/07 4/26/07 Accelerated Avigen Inc $6.94 $31 $147 21% 0% 0% -3% -3% -44% 4/17/07 4/26/07 Marketed Alexza Pharmaceuticals Inc $10.25 $71 $183 39% -11% -3% 7% -10% -17% 4/13/07 4/24/07 Marketed Poniard Pharmaceuticals Inc $6.33 $75 $144 52% 5% 0% 7% 10% -17% 4/10/07 4/18/07 Marketed Altus Pharmaceuticals Inc $14.75 $96 $354 27% -2% -2% -1% -13% -66% 4/11/07 4/11/07 Accelerated Cell Genesys Inc $5.55 $60 $285 21% -9% -9% -5% -27% -56% 4/2/07 4/4/07 Accelerated Acadia Pharmaceuticals Inc $15.50 $102 $464 22% 3% -1% 1% -13% -21% 4/2/07 4/2/07 Accelerated Discovery Laboratories Inc $2.15 $30 $121 25% -9% -9% 7% 64% 14% 4/2/07 4/2/07 Accelerated Bioenvision Inc $3.75 $30 $162 19% -8% -8% 5% -11% Acquired 3/20/07 3/30/07 Marketed La Jolla Pharmaceutical Co $6.00 $40 $197 20% -14% -11% 1% 6% -36% 2/20/07 3/1/07 Marketed Mylan Laboratories Inc $19.50 $510 $4,313 12% -12% -4% 4% 8% -29% 2/13/07 2/14/07 Accelerated Palatin Technologies Inc $2.00 $28 $142 19% -13% -13% 5% -3% -91% 2/9/07 2/9/07 Accelerated Kosan Biosciences Inc $6.50 $46 $185 25% -6% -6% 3% -19% -37% 2/8/07 2/8/07 Accelerated Myriad Genetics Inc $35.90 $108 $1,427 8% -3% -1% 1% -6% 35% 12/15/06 2/7/07 Marketed Bruker Biosciences Corp $7.10 $85 $728 12% -11% -8% 5% 38% 86% 1/22/07 1/31/07 Marketed Repros Therapeutics Inc $13.75 $36 $140 26% 8% -5% 0% -27% -33% 1/29/07 1/29/07 Accelerated Allos Therapeutics Inc $6.00 $54 $340 16% 0% 0% 4% 3% 17% 10/24/06 1/25/07 Marketed Aradigm Corp $0.95 $36 $12 292% -34% 0% 11% 46% OTC 1/18/07 1/18/07 Accelerated Nastech Pharmaceutical Co Inc $13.20 $42 $248 17% -6% -6% 0% -6% -67% 12/19/06 1/18/07 Marketed Vanda Pharmaceuticals Inc $27.29 $119 $596 20% 13% 0% 0% 0% -74% 1/17/07 1/18/07 Accelerated Cardiome Pharma Corp $10.50 $97 $473 20% -4% -4% 0% 14% -15% Mean $10.75 $109 $1,174 35% -10% -6% 3% 1% -9% Median $7.42 $54 $247 19% -6% -3% 1% 0% -19% Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 27 Shading denotes Piper Jaffray managed transaction (1) Represents all-in discount from last trade before offer HEALTH CARE FOLLOW-ON MARKET UPDATE

Health Care Follow- Health Care Services ons Completed in

Amount Amount Offered / % Change 2007 Offer Offered Pre-Deal Pre-Deal Mkt % Chg Price Last Trade/ Return Return Return Filing Date Pricing Date Execution Issuer Price ($MM) Mkt Cap Cap FTO Offer 1 Day 30 Day Current 11/7/07 11/7/07 Accelerated Hythiam Inc $4.79 $46 $214 22% 0% 0% -4% -41% -41% 6/18/07 6/28/07 Marketed Emeritus Corp $31.00 $366 $587 62% -21% -3% 3% -13% -19% 5/9/07 5/23/07 Marketed Phase Forward Inc $15.00 $95 $534 18% -3% -2% 7% 8% 45% 5/14/07 5/22/07 Marketed Omnicell Inc $21.50 $96 $540 18% -3% -2% 8% -2% 27% 5/16/07 5/16/07 Accelerated Medcath Corp $33.07 $132 $696 19% -3% -3% -3% 3% -25% 4/9/07 4/17/07 Marketed MWI Veterinary Supply Co $35.00 $94 $408 23% 3% 0% 3% 7% 15% Mean $23.39 $138 $497 27% -4% -2% 2% -6% 0% Median $26.25 $96 $537 20% -3% -2% 3% 0% -2%

Medical Technology

Amount Amount Offered / % Change Offer Offered Pre-Deal Pre-Deal Mkt % Chg Price Last Trade/ Return Return Return Filing Date Pricing Date Execution Issuer Price ($MM) Mkt Cap Cap FTO Offer 1 Day 30 Day Current 11/8/07 11/15/07 Marketed Inverness Medical Innovations Inc $61.49 $849 $3,391 25% 2% 0% 0% -8% -8% 10/29/07 11/8/07 Marketed Cardica Inc $8.50 $35 $116 30% -25% -7% -5% 21% 21% 10/19/07 11/6/07 Marketed Insulet Corp $23.25 $125 $614 20% -2% -1% 0% 1% 1% 10/9/07 10/17/07 Marketed Volcano Corp $16.25 $131 $612 21% -5% -2% 3% 0% -18% 9/21/07 10/10/07 Marketed TomoTherapy Inc $22.25 $217 $910 24% -11% -4% 7% -8% -14% 9/12/07 9/21/07 Marketed Alphatec Holdings Inc $3.45 $35 $97 36% -2% -1% 4% 22% 48% 4/3/07 4/19/07 Marketed ev3 Inc $19.00 $166 $1,105 15% -4% -5% 0% -10% -33% 3/13/07 3/21/07 Marketed ABIOMED Inc $13.75 $70 $374 19% 5% -2% 0% 0% 15% 12/12/06 2/9/07 Marketed BioMimetic Therapeutics Inc $17.15 $56 $263 21% 10% -2% 7% -7% 6% 1/17/07 1/31/07 Marketed Mindray Medical International Ltd $24.50 $277 $2,590 11% -7% -2% -1% -1% 77% 1/19/07 1/26/07 Marketed Inverness Medical Innovations Inc $39.65 $274 $1,537 18% 1% 0% 4% 10% 43% Mean $22.66 $203.00 $1,055.42 22% -3% -3% 2% 2% 13% Median $19.00 $130.81 $614.44 21% -2% -2% 0% 0% 6%

Other Health Care

Amount Amount Offered / % Change Filin Offer Offered Pre-Deal Pre-Deal Mkt % Chg Price Last Trade/ Return Return Return g Date Pricing Date Execution Issuer Price ($MM) Mkt Cap Cap FTO Offer 1 Day 30 Day Current 5/16/07 5/22/07 Marketed Advanced Magnetics Inc $65.14 $163 $765 21% 0% 0% 0% -7% -2%

Source: Equidesk, company filings. Data excludes transactions less than $20 million, closed-end funds, and unit offerings 28 Shading denotes Piper Jaffray managed transaction (1) Represents all-in discount from last trade before offer SECTION VII PIPE & Registered Direct Market Update PIPE AND REGISTERED DIRECT MARKET UPDATE

Total PIPE/RD 2007 PIPE/RD Activity market activity All PIPE/RD Activity by Quarter (a)

accounted for $22.7 $9 225 209 192 200 185 $8 billion ($17.6 billion 174 173 common stock) 175 156 158 $7 150 $6 131 119 raised in 2007, 115 125 102 $5 96 slightly higher than 100 $4

2006’s record PIPEs/RDs of # 75 $3 Capital Raised ($B) Raised Capital issuance 50 $2 25 $1 $4.6 $4.2 $6.1 $4.7 $6.0 $5.7 $3.4$8.1 $5.9 $7.9 $3.6 $5.3 0 $0 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Capital Raised ($B) PIPEs/RDs Completed 2007 Common Stock PIPEs/RDs Total Amt % Chg % Chg Sector No. Off (B) Offer/30 Day Offer/Curr Clean Tech 27 $0.6 23% 71% Consumer 35 $1.5 32% 6% Energy 72 $5.3 16% 11% Financial 27 $2.2 20% 3% Health Care 133 $3.8 14% -8% Industrial Growth 84 $2.3 23% 28% Technology 56 $1.8 39% 6% Transportation 0 — — — Total 434 $17.6 22% 11%

(a) Source: PlacementTracker.com as of December 31, 2007. Includes all common stock, convertible preferred and convertible debt PIPEs/RDs greater than $10 million. 30 PIPE AND REGISTERED DIRECT MARKET UPDATE

Total PIPE market 2007 PIPE Activity activity accounted for All PIPE Activity by Quarter (a)

$20.0 billion ($15.1 200 $8 174 168 167 billion common 175 $7 155 151 146 stock) raised in 2007, 150 134 $6 125 $5 slightly below 2006’s 108 104 101 94 100 $4 record issuance 77

# of PIPEs of # 75 $3 Capital Raised ($B) Raised Capital 50 $2

25 $1 $3.8 $3.9 $5.5 $4.2 $5.1 $5.3 $3.1$6.8 $5.5 $7.1 $2.9 $4.5 0 $0 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Capital Raised ($B) PIPEs Completed 2007 Common Stock PIPEs Total Amt % Chg % Chg Sector No. Off (B) Offer/30 Day Offer/Curr Clean Tech 19 $0.4 37% 97% Consumer 35 $1.5 32% 6% Energy 65 $5.0 18% 12% Financial 22 $1.8 26% 10% Health Care 89 $2.5 25% -2% Industrial Growth 81 $2.2 24% 30% Technology 49 $1.6 46% 8% Transportation 0 — — — Total 360 $15.1 28% 16%

(a) Source: PlacementTracker.com as of December 31, 2007. Includes all common stock, convertible preferred and convertible debt PIPEs greater than $10 million. 31 PIPE AND REGISTERED DIRECT MARKET UPDATE

Health Care 2007 RD Activity accounted for 59% of All RD Activity by Quarter (a) 40 $2,000 common stock RDs 36 in 2007 35 $1,750

30 $1,500 26 24 25 22 22 $1,250 21 19 18 20 17 $1,000 # of RDs 15 13 $750 11

10 8 $500 ($MM) Raised Capital

5 $250 $834 $250 $595 $570 $869 $418 $350$1,303 $342$806 $724 $752 0 $0 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Capital Raised ($MM) RDs Completed 2007 Common Stock RDs Total Amt % Chg % Chg Sector No. Off (MM) Offer/30 Day Offer/Curr Clean Tech 8 $233 -7% 9% Consumer 0 — — — Energy 7 $326 -9% -5% Financial 5 $371 0% -22% Health Care 44 $1,326 -5% -20% Industrial Growth 3 $74 -3% -15% Technology 7 $195 -5% -11% Transportation 0 — — — Total 74 $2,525 -5% -14%

(a) Source: PlacementTracker.com as of December 31, 2007. Includes all common stock, convertible preferred and convertible debt PIPEs greater than $10 million. 32 PIPE AND REGISTERED DIRECT MARKET UPDATE

(a, b) Traditional common 2007 Common Stock PIPE/RD Activity % of Traditional Agented PIPEs/RDs stock PIPEs and RDs Agented PIPEs/RDs Structure Breakdown With Warrant Coverage account for the 100% 100% majority of issuance 89% 81% 80% 80% 73%

60% 60% 52% 48% % of Total % of 40% Total % of 40% 27% 19% 20% 20% 11%

0% 0% PIPEs RDs PIPEs RDs Traditional "At-Market" No Warrants Warrants Traditional Agented PIPE/RD Transaction Size Agented PIPE/RD Issuer Market Cap as % of Market Cap

27% 28%

19% 22% 26% 37% 12% 15% 5% 9%

Less than $50MM $50MM to $100MM 0% to 5% 5% to 10% 10% to 15% $100MM to $200MM $200MM to $400MM 15% to 20% Greater than 20% Greater than $400MM (a) Source: PlacementTracker.com as of December 31, 2007. Includes all common stock PIPEs/RDs greater than $10 million. 33 (b) Percentage indicated is based on number of offerings. PIPE AND REGISTERED DIRECT MARKET UPDATE

Biopharmaceuticals 2007 Health Care PIPE/RD Activity

issuers have led All Health Care PIPE/RD Activity by Quarter and Subsector (a) health care PIPE/RD $1,600 100 issuance in each of 90 $1,400 the last three years 73 80 $1,200 70 59 $1,000 60

$800 44 45 50 39 40 39 36 40 $600 31

29 PIPEs/RDs of # Capital Raised ($MM) 23 21 30 $400 20 $200 10

$0 0 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Biopharmaceuticals Medical Technology Health Care Services # of PIPEs/RDs

2007 Health Care Common Stock PIPEs/RDs Total Amt % Chg % Chg Sector No. Off (MM) Offer/30 Day Offer/Curr Biopharmaceuticals 104 $3,290 16% -11% Medical Technology 22 $384 6% 6% Services 7 $155 27% 10% Total 133 $3,829 14% -8%

(a) Source: PlacementTracker.com as of December 31, 2007. Includes all health care common stock, convertible preferred and convertible debt PIPEs greater than $10 million. 34 PIPE AND REGISTERED DIRECT MARKET UPDATE

2007 Health Care 2007 Health Care PIPE/RD Issuance PIPE/RD Issuance • The Health Care sector was the most active industry in the PIPE/RD market in 2007, with 133 common stock PIPEs/RDs completed raising $3.8 billion, or 31% of all common stock PIPEs/RDs that came to market. • The majority of Health Care activity in 2007 was in the Biopharmaceuticals space, with 104 common stock transactions priced, 78% of the total Health Care common stock deal activity, and over $3.2 billion raised, or 86% of total capital raised in the sector. • Medical Technology PIPE issuers were the top performers, returning on average 18% from offer price to end of 4th quarter. • In 2007, “at-market” transactions with warrant coverage accounted for 32% and 25% of Health Care common stock PIPEs and RDs, respectively.

2007 Health Care Common Stock PIPEs (a) Total Amt % Chg % Chg Subsector No. Off (MM) Offer/30 Day Offer/Curr Biopharmaceuticals 68 $2,152 28% -6% Medical Technology 16 $269 11% 18% Services 5 $82 32% -5% Total 89 $2,503 25% -2%

2007 Health Care Common Stock RDs (a) Total Amt % Chg % Chg Subsector No. Off (MM) Offer/30 Day Offer/Curr Biopharmaceuticals 36 $1,138 -4% -20% Medical Technology 6 $115 -6% -23% Services 2 $73 -6% -11% Total 44 $1,326 -5% -20%

(a) Source: PlacementTracker.com as of December 31, 2007. 35 PIPE AND REGISTERED DIRECT MARKET UPDATE

(a, b) 29% of 2007 Health 2007 Health Care Common Stock PIPE/RD Activity % of Traditional Agented Health Care Care common stock Agented Health Care PIPEs/RDs Structure Breakdown PIPEs/RDs With Warrant Coverage PIPEs/RDs raised 100% 100% greater than 20% of 80% 75% 80% the issuer’s market 68% 63% cap 60% 60% 56% 44% 37% % of Total % of 40% Total % of 40% 32% 25%

20% 20%

0% 0% PIPEs RDs PIPEs RDs Traditional "At-Market" No Warrants Warrants

Traditional Agented Health Care Agented Health Care PIPE/RD Issuer Market Cap PIPE/RD Transaction Size as % of Market Cap

38% 33% 37% 21% 29% 16% 9% 10%

3% 4%

Less than $50MM $50MM to $100MM 0% to 5% 5% to 10% 10% to 15% $100MM to $200MM $200MM to $400MM 15% to 20% Greater than 20% Greater than $400MM (a) Source: PlacementTracker.com as of December 31, 2007. Includes all health care common stock PIPEs/RDs greater than $10 million. 36 (b) Percentage indicated is based on number of offerings. PIPE AND REGISTERED DIRECT MARKET UPDATE

Selected 2007 Agented Biopharmaceuticals Common Stock PIPE Offerings (a) Mkt Cap at Announcement Proceeds Announcement Proceeds / 90-Day ADTV at CloseWarrant / Warrant Date Issuer Ticker (MM) (MM) Mkt Cap Announcement(b) OfferCoverage Premium 12/26/2007 NeurogesX NGSX $25 $83 30.1% 15,349 3.0% 30% 30% 12/20/2007 AspenBio Pharma APPY $18 $237 7.7% 331,067 -13.8% — — 12/20/2007 Ardea Biosciences RDEA $40 $132 30.2% 17,624 1.9% — — 12/18/2007 Titan Pharmaceuticals TTP $21 $72 29.6% 183,419 0.0% 50% 25% 12/17/2007 Cougar Biotechnology CGRB $87 $525 16.6% 32,915 -2.6% — — 12/11/2007 Advanced Life Sciences ADLS $20 $51 39.3% 205,109 3.3% 50% 20% 11/20/2007 SGX Pharmaceuticals SGXP $25 $79 31.8% 24,870 0.0% 30% 14% 11/12/2007 EPIX Pharmaceuticals EPIX $16 $137 11.9% 418,615 -16.9% — — 10/30/2007 DUSA Pharmaceuticals DUSA $11 $47 23.6% 57,272 -11.4% 25% 19% 10/26/2007 Sequenom SQNM $31 $388 7.9% 593,676 -9.8% — — 10/24/2007 Optimer Pharmaceuticals OPTR $36 $202 17.7% 65,937 -6.8% — — 8/24/2007 Vermillion CIPH $21 $34 61.0% 79,419 13.5% 80% 8% 8/21/2007 Medicure MCU $16 $132 12.2% 163,462 -6.5% 30% 33% 8/8/2007 Oculus Innovative Sciences OCLS $10 $98 10.3% 48,408 -14.3% 33% 15% 8/6/2007 Marshall Edwards MSHL $16 $187 8.8% 12,176 4.9% 40% 22% 6/29/2007 Antares Pharma AIS $16 $92 17.4% 214,935 -8.6% 35% 18% 6/29/2007 VIA Pharmaceuticals VIAP $25 $91 27.5% 9,885 -47.2% — — 6/29/2007 Epicept EPCT $10 $76 13.1% 204,360 -20.1% 50% 24% 6/29/2007 Cytogen CYTO $10 $47 21.7% 244,298 -10.9% 50% 42% 6/27/2007 Ista Pharmaceuticals ISTA $37 $202 18.2% 90,058 -4.4% — — 6/22/2007 Targeted Genetics TGEN $19 $36 53.4% 59,478 4.5% 100% 17% 6/20/2007 Micromet MITI $25 $84 30.2% 43,153 2.3% 50% 16% 5/25/2007 BioSante Pharmaceuticals BPA $18 $158 11.6% 100,660 -12.4% 25% 17% 5/25/2007 Avalon Pharmaceuticals AVRX $20 $68 29.4% 26,632 1.0% 25% 16% 5/18/2007 Vasogen VSGN $16 $42 38.3% 140,058 1.9% 75% 32% 5/3/2007 Cougar Biotechnology CGRB $50 $315 15.9% 32,915 -5.9% — — 4/25/2007 Innovive Pharmaceuticals IVPH $15 $30 50.5% 7,334 -22.0% 50% 15% 4/18/2007 CytRx CYTR $37 $345 10.7% 987,967 -10.4% — — 4/9/2007 MiddleBrook Pharmaceuticals MBRK $24 $102 23.6% 63,669 4.1% 75% -19% 3/28/2007 Lpath LPTN $17 $30 55.9% 26,285 -27.5% 35% -14% 3/19/2007 Chelsea Therapeutics CHTP $13 $93 13.4% 29,394 0.0% 30% 20% 3/9/2007 Neose Technologies NTEC $43 $64 67.9% 115,990 2.9% 45% 2% 3/2/2007 Iomai IOMI $32 $96 33.2% 70,110 1.4% 70% 5% 2/16/2007 ZIOPHARM Oncology ZIOP $31 $79 38.9% 35,008 0.0% 20% 11% 2/7/2007 Gentium Spa GENT $47 $249 19.1% 60,459 -2.8% — — 1/22/2007 Bionovo BNVI $16 $162 9.8% 386,361 -53.1% 35% -29% 1/22/2007 Avalon Pharmaceuticals AVRX $10 $31 32.1% 26,632 8.4% — —

Mean $25 $132 26% 141,215 -14.5% 46% 14% Median $20 $92 24% 63,669 -10.9% 40% 17%

(a) Source: PlacementTracker.com as of December 31, 2007. Excludes offerings less than $10 million. 37 (b) Actual Premium/(Discount) may differ from estimated percentage indicated. Mean and median exclude “at-market” offerings. PIPE AND REGISTERED DIRECT MARKET UPDATE

Selected 2007 Agented Medical Technology Common Stock PIPE Offerings (a) Mkt Cap at Announcement Proceeds Announcement Proceeds / 90-Day ADTV at CloseWarrant / Warrant Date Issuer Ticker (MM) (MM) Mkt Cap Announcement (b) OfferCoverage Premium 11/29/2007 Rockwell Medical RMTI $13 $87 14.9% 27,096 -20.0% 50% -4% 8/1/2007 Electro-Optical Sciences MELA $12 $88 13.1% 28,062 -11.9% 25% 22% 7/31/2007 Vyteris VYHN $13 $170 7.5% 192,295 -14.3% 100% 40% 7/6/2007 MIV Therapeutics MIVT $13 $52 24.4% 149,888 -13.8% 50% -13% 6/19/2007 ATS Medical ATSI $16 $76 21.5% 256,930 8.1% 20% 6% 6/7/2007 Cardica CRDC $12 $58 20.4% 413,344 0.0% 25% 10% 5/24/2007 AtriCure ATRC $15 $128 12.0% 36,256 -11.3% — — 4/18/2007 CEL-SCI CVM $15 $63 24.0% 132,493 0.0% 50% 85% 4/10/2007 Tutogen Medical TTG $12 $147 8.1% 122,299 -17.2% — — 3/16/2007 ATS Medical ATSI $16 $83 19.7% 256,930 -6.5% 40% 17% 3/6/2007 Cardium Therapeutics CDTP $22 $102 21.2% 47,138 -21.9% 35% 17% 2/1/2007 Occulogix OCCX $10 $94 10.7% 377,678 -18.9% 40% 19%

Mean $14 $96 16.5% 170,034 -15.1% 44% 20% Median $13 $88 17.3% 141,191 -14.3% 40% 17%

Selected 2007 Agented Health Care Services Common Stock PIPE Offerings (a) Mkt Cap at Announcement Proceeds Announcement Proceeds / 90-Day ADTV at CloseWarrant / Warrant Date Issuer Ticker (MM) (MM) Mkt Cap Announcement (b) OfferCoverage Premium 7/18/2007 Flagship Global Health FGHH $15 $133 11.3% 8,638 4.8% 30% 33% 5/18/2007 Quest Group International QSTG $20 $51 39.5% 1,028 -28.6% — — 5/15/2007 Arcadia Resources KAD $13 $145 9.0% 189,568 -11.2% 25% 34% 3/30/2007 Health Benefits Direct HBDT $11 $77 14.6% 68,768 -16.7% 40% 11%

Mean $15 $102 18.6% 67,001 -18.8% 32% 26% Median $14 $105 12.9% 38,703 -16.7% 30% 33%

(a) Source: PlacementTracker.com as of December 31, 2007. Excludes offerings less than $10 million. 38 (b) Actual Premium/(Discount) may differ from estimated percentage indicated. Mean and median exclude “at-market” offerings. PIPE AND REGISTERED DIRECT MARKET UPDATE

Selected 2007 Agented Biopharmaceuticals Common Stock RD Offerings (a)

Mkt Cap at Announcement Proceeds Announcement Proceeds / 90-Day ADTV at CloseWarrant / Warrant Date Issuer Ticker (MM) (MM) Mkt Cap Announcement (b) OfferCoverage Premium 12/13/2007 AVI BioPharma AVII $20 $75 27.0% 421,395 -14.8% 50% 75% 12/7/2007 Discovery Laboratories DSCO $25 $226 11.1% 883,274 -17.8% — — 11/2/2007 Chelsea Therapeutics CHTP $49 $155 31.6% 29,394 0.0% — — 11/2/2007 Favrille FVRL $21 $94 22.4% 70,392 2.0% 60% 0% 10/16/2007 Aastrom Biosciences ASTM $14 $133 10.2% 1,091,149 -10.2% 50% 44% 10/11/2007 Combinatorx CRXX $35 $195 18.0% 110,021 -6.6% — — 9/26/2007 Genelabs Technologies GNLB $24 $55 42.9% 166,267 0.0% 20% 14% 9/24/2007 Barrier Therapeutics BTRX $32 $190 16.8% 79,904 -10.7% — — 8/24/2007 Cortex Pharmaceuticals COR $14 $70 20.1% 351,822 -24.2% 40% 52% 8/20/2007 Encysive Pharmaceuticals ENCY $15 $140 10.7% 1,083,380 0.0% 100% 0% 8/14/2007 Lev Pharmaceuticals LEVP $35 $183 19.1% 463,105 -7.4% 20% 16% 7/17/2007 Sangamo BioSciences SGMO $30 $342 8.8% 643,853 -6.3% — — 7/2/2007 pSivida PSDV $18 $71 25.4% 66,532 -17.8% 40% 32% 6/28/2007 Peregrine Pharmaceuticals PPHM $23 $177 12.7% 671,175 -16.7% — — 6/21/2007 IDM Pharma IDMI $25 $74 33.6% 173,213 -15.5% 33% 0% 6/12/2007 Acusphere ACUS $20 $85 23.4% 230,606 0.0% 40% 40% 6/8/2007 Auxilium Pharmaceuticals AUXL $53 $526 10.1% 360,174 0.0% — — 5/24/2007 NitroMed NTMD $20 $125 15.8% 138,395 -20.5% — — 5/4/2007 Spectrum Pharmaceuticals SPPI $32 $166 19.3% 205,414 -4.1% — — 5/4/2007 Insmed INSM $18 $100 18.2% 893,044 -10.9% 10% 11% 5/3/2007 Progen Pharmaceuticals PGLA $33 $245 13.4% 19,061 -21.2% — — 5/2/2007 Immunomedics IMMU $24 $331 7.2% 744,778 -7.5% — — 4/25/2007 Sequenom SQNM $20 $110 18.2% 593,676 0.0% — — 4/25/2007 Titan Pharmaceuticals TTP $11 $90 12.2% 183,419 -12.6% — — 4/11/2007 Cell Genesys CEGE $60 $378 15.9% 939,166 -8.7% 20% 18% 4/3/2007 Discovery Laboratories DSCO $30 $167 18.1% 883,274 -7.3% — — 4/2/2007 Bioenvision BIVN $30 $176 17.0% 43,459 -8.3% — — 3/14/2007 Genta GNTA $11 $74 14.6% 232,307 -23.4% — — 2/26/2007 Cytori Therapeutics CYTX $22 $109 19.7% 57,878 0.0% 50% 7% 2/13/2007 Cyclacel Pharmaceuticals CYCC $36 $137 26.2% 99,183 0.0% 25% -1% 2/9/2007 Kosan Biosciences KOSN $46 $246 18.5% 208,784 -6.5% — —

Mean $27 $169 18.7% 391,532 -10.0% 40% 22% Median $24 $140 18.1% 230,606 -7.5% 40% 15%

(a) Source: PlacementTracker.com as of December 31, 2007. Excludes offerings less than $10 million. 39 (b) Actual Premium/(Discount) may differ from estimated percentage indicated. Mean and median exclude offerings with warrant coverage. PIPE AND REGISTERED DIRECT MARKET UPDATE

Selected 2007 Agented Medical Technology Common Stock RD Offerings (a)

Mkt Cap at Announcement Proceeds Announcement Proceeds / 90-Day ADTV at Close / Warrant Warrant Date Issuer Ticker (MM) (MM) Mkt Cap Announcement Offer (b) Coverage Premium 9/18/2007 Delcath Systems DCTH $14 $73 19.5% 93,246 -8.6% 50% 33% 3/23/2007 IsoRay ISRY $17 $74 22.3% 56,591 -11.1% 20% 14% 2/5/2007 Enzo Biochem ENZ $15 $487 3.1% 339,566 0.0% — —

Mean $15 $211 15.0% 163,134 0.0% 35% 23% Median $15 $74 19.5% 93,246 0.0% 35% 23%

Selected 2007 Agented Health Care Services Common Stock RD Offerings (a)

Mkt Cap at Announcement Proceeds Announcement Proceeds / 90-Day ADTV at WarrantClose / Warrant Date Issuer Ticker (MM) (MM) Mkt Cap Announcement(b) CoverageOffer Premium 11/7/2007 Hythiam HYTM $41 $241 17.0% 738,880 0.0% 25% 7% 8/21/2007 Beijing Med-Pharm BJGP $33 $255 12.8% 140,005 -1.4% 20% -1%

Mean $37 $248 14.9% 439,443 -1.4% 23% 3% Median $37 $248 14.9% 439,443 -1.4% 23% 3%

(a) Source: PlacementTracker.com as of December 31, 2007. Excludes offerings less than $10 million. 40 (b) Actual Premium/(Discount) may differ from estimated percentage indicated. Mean and median exclude offerings with warrant coverage. SECTION II PIPER JAFFRAY 2007 HEALTHCARE REVIEW PIPER JAFFRAY FIRM OVERVIEW

Piper Jaffray has Life Sciences Financings Leadership completed 67 2005 – 2008 YTD Life Sciences financings in the life Total sciences sector since Number Number of Number of Total Proceeds Rank Manager of IPOs Follow-Ons Converts Deals ($million) 2005, #2 of all 1 JP Morgan 21 34 20 75 $24,965 investment banks. 2 Piper Jaffray* 21 31 15 67 $8,307 This includes 28 3 UBS 14 34 17 65 $14,118 4 CIBC World Markets 17 38 5 60 $6,681 bookrun financings 5 Cowen & Co. 23 28 6 57 $7,751 6 Merrill Lynch 14 22 19 55 $24,475 7 Morgan Stanley 16 25 11 52 $21,865 7 Banc of America Securities 12 22 18 52 $20,195 9 Goldman Sachs 4 16 19 39 $25,916 10 Lazard 17 15 3 35 $2,322 10 Deutsche Bank 12 14 9 35 $9,607 12 Lehman Brothers 7 19 8 34 $9,816 13 Pacific Growth Equities 14 17 1 32 $2,328 13 Thomas Weisel 15 14 3 32 $4,150 15 Citigroup 4 10 16 30 $20,627 16 Bear Stearns 6 17 4 27 $14,426 17 Jefferies 10 12 1 23 $3,337 18 Credit Suisse 6 7 6 19 $12,234 19 RBC Capital Markets 7 3 2 12 $2,647 19 William Blair 7 5 0 12 $1,325

* As of 1/22/2008. Full credit to each manager.

42 Piper Jaffray Review Most Active Health Care Underwriters since 1/1/2004 Health Care Companies < $2 B Market Capitalization

Piper Jaffray is the 2004-2007 2007 # of Capital # of Capital most active Rank Manager Deals Raised ($B) Rank Manager Deals Raised ($B) 1 Piper Jaffray & Co 109 $12.6 1 Piper Jaffray & Co 29 $4.1 underwriter for growth 1 UBS Securities Inc 109 $12.5 2 UBS Securities Inc 27 $4.0 3 Cowen & Co 93 $9.1 3 JP Morgan 26 $3.7 companies in the 4 CIBC World Markets 88 $8.0 4 Banc of America Securities LLC 22 $3.0 5 JP Morgan 86 $11.2 5 CIBC World Markets 21 $2.2 Health Care sector 6 Banc of America Securities LLC 78 $8.9 6 Merrill Lynch & Co Inc 18 $2.2 7 Merrill Lynch & Co Inc 66 $10.1 7 Morgan Stanley 17 $1.8 8 Morgan Stanley 65 $8.1 7 Leerink Swann & Co 17 $1.6 9 Lehman Brothers 54 $7.4 9 Deutsche Bank 15 $2.2 9 Thomas Weisel Partners 54 $5.3 9 Jefferies 15 $1.9 11 Deutsche Bank 51 $6.6 11 Goldman Sachs 14 $2.8 12 Goldman Sachs 47 $9.0 11 Lazard Capital Markets 14 $1.2 13 Lazard Capital Markets 45 $3.5 13 Cowen & Co 13 $1.4

Source: Dealogic & Piper Jaffray ECM Includes deals greater than $20 million in deal size 43 PIPER JAFFRAY FIRM OVERVIEW

Completion Ratio of Bookrun Health Care IPOs Since 1/1/2001 Getting across the finish 95% line is what we do 90% 88% 88% best……..in any market 86% 85% 83% 80% 80% 79% 80% 75% 75% 75% 73% Avg. = 76% % of IPOs 69% 70% 68% 65% 65% 65% 63%

60% ey ca ns sel BC sse oup UBS fray CI gr Lynch l ti l Morgan t Sui Ci per Jaf per edi J.P. dm an Sachs Merri Pi Cowen & Co. Cowen Bear Stear Bear Cr Th om as W ei Morgan Stanl Morgan Deutsche Bank Deutsche Gol BancAm of eri Lehm Brothers an

$92,000,000 $94,875,000 $232,970,040 $56,350,000 $75,200,000 $62,560,000 $50,600,000 $24,917,424

IPOIPOIPOIPOIPOIPOIPOIPO

November 2007 October 2007 August 2007 February 2007 February 2007 June 2006 March 2006 January 2006

$55,200,000 $167,650,000 $56,400,000 $72,450,000 $80,639,925 $30,000,000 $73,312,500 $56,865,200

IPOIPOIPOIPOIPOIPOIPOIPO

August 2005 June 2005 April 2005 October 2004 October 2004 October 2004 May 2004 March 2004 Source: Dealogic, Banks with >10 Bookrun transactions Health Care IPOs filed through December 31, 2007

44 PIPER JAFFRAY RECENT LEAD TRANSACTIONS Book-Run IPOs Piper Jaffray has ~$86,250,000 ~$75,000,000 $92,000,000 EUR 85,195,775 $94,875,000 $232,970,040 acted as book- running manager on Initial Public Initial Public Initial Public Initial Public Initial Public Initial Public high profile Offering Offering Offering Offering Offering Offering In Registration In Registration November 2007 November 2007 October 2007 August 2007 transactions in the EUR 46,000,000 $56,350,000 $75,200,000 $62,650,000 $50,600,000 £15,120,000 life sciences

Initial Public Initial Public Initial Public Initial Public Initial Public Initial Public Offering Offering Offering Offering Offering Offering March 2007 February 2007 February 2007 June 2006 March 2006 February 2006

$24,917,424 EUR 30,000,012 $55,200,000 $167,591,200 $56,400,000 £20,992,000

Initial Public Initial Public Initial Public Initial Public Initial Public Initial Public Offering Offering Offering Offering Offering Offering January 2006 December 2005 August 2005 June 2005 April 2005 March 2005

£37,949,999 $72,450,000 $80,639,925 $30,000,000 £20,075,054 $73,312,500

Initial Public Initial Public Initial Public Initial Public Initial Public Initial Public Offering Offering Offering Offering Offering Offering November 2004 October 2004 October 2004 October 2004 June 2004 May 2004

$56,865,200 $33,600,000 $209,576,000 $103,500,000 $131,100,000 $86,250,000

™ POZENINC The Pharmaceutical Development Company™

Initial Public Initial Public Initial Public Initial Public Initial Public Initial Public Offering Offering Offering Offering Offering Offering March 2004 March 2004 June 2002 May 2002 October 2001 October 2000

45 PIPER JAFFRAY RECENT LEAD TRANSACTIONS

Book-Run Follow-ons / PIPEs / RDs Piper Jaffray has $40,000,000 £37,400,000 $130,812,000 $35,900,000 $30,000,000 $83,100,000 acted as book- running manager on PIPE Placing & Follow-on PIPE Registered Direct Follow-on numerous high Offering Open Offer Offering Offering Offering Offering December 2007 November 2007 October 2007 October 2007 July 2007 June 2007 profile transactions $16,500,000 $166,250,000 $21,500,000 DKK 64,000,000 $9,600,000 $138,941,250 in the life sciences

PIPE Follow-on Registered Direct Cash PIPE Follow-on Offering Offering Offering Placing Offering Offering May 2007 April 2007 February 2007 February 2007 December 2006 December 2006

£26,300,000 £38,200,000 £14,500,000 £11,000,000 $16,800,000 $12,000,000

Placing Placing Placing Placing and Registered Direct PIPE Open Offer Offering Offering December 2006 December 2006 December 2006 September 2006 August 2006 August 2006

£11,300,000 $20,900,000 £45,000,000 $131,997,000 £29,300,000 £41,000,000

Placing Registered Direct Placing Follow-on Placing & Transfer to AIM Offering Offering Open Offer July 2006 June 2006 June 2006 April 2006 April 2006 March 2006

£35,000,000 $84,600,000 £58,000,000 £29,300,000 $19,600,000 $12,000,000

Vendor Follow-on Vendor Cash Registered Direct PIPE Placing Offering Placing Placing Offering Offering March 2006 February 2006 December 2005 December 2005 November 2005 November 2005

46 PIPER JAFFRAY RECENT LEAD TRANSACTIONS

Book-Run Convertible Offerings Our convertible $200,000,000 $165,000,000 Exch $117,000,000 Exch $60,000,000 $30,000,000 $151,800,000 team is known for its $60,000,000 New $80,000,000 New

creativity and Convertible Convertible Convertible Convertible Convertible Senior Senior Convertible Senior Senior Senior Subordinated leading presence in NotesNotesNotesNotesNotesNotes July 2007 April 2007 April 2007 March 2007 January 2007 September 2006

the life sciences $373,750,000 $12,000,000 $22,400,000 $20,000,000 $45,000,000 $75,000,000

Convertible Convertible Convertible Convertible Convertible Convertible Subordinated Senior Senior Preferred Preferred Senior Notes Notes & SNAPs Notes Stock Stock Notes June 2006 February 2006 October 2005 March 2005 February 2005 January 2005 We are the “go to” Sole Advisory Transactions Undisclosed $200,000,000 $71,000,000 $135,000,000 $223,000,000 $37,000,000 advisor for life sciences M&A

Acquired by Acquired by Acquired by Acquired by Acquired by Aesthetics Division Bausch & Lomb Warburg Pincus AstraZeneca Noven AngioDynamics Acquired by IRIDEX January 2008 January 2008 September 2007 August 2007 January 2007 January 2007

$115,000,000 $71,500,000 $20,500,000 $245,000,000 $690,000,000 $94,000,000

Acquired by Merger with Acquired Acquired by Acquired Merger with Endo Axonyx 3F Therapeutics Covidien Laserscope Micromet October 2006 October 2006 October 2006 July 2006 June 2006 May 2006

$518,600,000 Undisclosed $38,100,000 $133,200,000 $1,189,000,000 $150,000,000

Acquired by Acquired by Acquired by Acquired Acquired by Acquired by Johnson & Johnson Johnson & Johnson EpiCept AlgoRX St. Jude Medical Fisher Scientific February 2006 January 2006 January 2006 December 2005 November 2005 August 2005

47 APPENDIX A Biopharmaceutical IPO Market Conditions BIOPHARMACEUTICAL IPO MARKET CONDITIONS

2007 saw an Median Pre-Money Value and Proceeds(1) Median IPO Step-Up(2)

increase in # of deals at bottom # of deals at bottom $250 $70 biopharmaceutical $60.0 1.5x 1.45x IPOs as investors’ $60 $200 appetite for risk $44.4 $45.0 1.4x $43.5 $50 1.36x increased $150 $40 throughout most of 1.3x $216.6 $30 1.26x 1.25x the year; $100

$152.4 $161.3 $20 ($mm) Proceeds investors continue $136.8 1.2x $50 28 16 20 25 to be receptive to ($mm) Value IPO Pre-Money $10 28 16 20 25 pre-revenue $0 $0 1.1x biopharmaceutical 2004 2005 2006 2007 2004 2005 2006 2007 companies but Median Pre-Money Value and Proceeds(1) Median IPO Step-Up(2) later-stage companies continue # of deals at bottom # of deals at bottom to attract greater $350 $70 demand and higher$300 $60 3.5x 3.2x $53 $60 valuations $250 3.0x $50 $50 2.5x $200 1.8x $40 2.0x 1.7x $150 1.4x 1.5x $32 1.3x 1.3x 1.4x 1.3x 1.3x $30 1.5x 1.2x 1.2x 1.2x $100 1.1x $20 1.0x 0.6x $50 0.5x $10 $0 0.0x 0.0x 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007$0 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007

P h . I o r e a rlie r P h . II P h . III M k t d Ph. I or earlier Ph. II Ph. III Mktd

2206738715775445722067387157754457 Source: Equidesk, company filings, VentureSource Data excludes transactions less than $20 million (1) Fully diluted according to treasury stock method 49 (2) Represents IPO pre-money value divided by post-money value as of last private round of financing BIOPHARMACEUTICAL IPO MARKET CONDITIONS

The pricing IPO Price vs. Initial Filing Range Median % Change File / Offer Price # of deals at bottom # of deals at top environment for Below Range Within Range Above Range 100% 5% 0% biopharmaceutical 7% 6% 12% 90% 15% IPOs continues to 21% 28 # of deals 16 2 0 25 80% 31% (10%) be challenging but 70% 36% has improved over 60% the course of 2007 50% (20%) (20.0%) - 48% of IPOs 40% 80% (22.3%) 71% (24.2%) 30% 63% priced in or above 52% (30%) 20% their initial filing 28 16 20 25 range vs. 20% in 10% 0% (40%) (37.4%) 2006 2004 2005 2006 2007 2004 2005 2006 2007 IPO Price vs. Initial Filing Range Median % Change File / Offer Price Later-stage # of deals at bottom Below Range Within Range Above Range# of deals at bottom companies have 0% experienced -10% slightly less 10 0 % -20% challenging pricing 80%

conditions than 60% -30% earlier-stage 40% -40% companies 20% -50% 0% 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 20062004 2007 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007

Ph. I Ph. II Ph. III Mktd P h . I o r e a rlie r P h . II P h . III M k t d

2206738715775445722067387157754457

Source: Equidesk, company filings, VentureSource Data excludes transactions less than $20 million 50 BIOPHARMACEUTICAL IPO MARKET CONDITIONS

Biopharmaceutical Median % Change Offer / Current Price % of Companies Currently Above Issue deals have struggled # of deals at top # of deals at bottom in the aftermarket 10% 2 8 16 2 0 2 5 50%

0% 40.0% 37.5% (10%) 40% (8.7%) (15.9%) (20%) 30.0% 43% of all 30% (30%) 25.0% biopharmaceutical (40%) 20% IPOs completed (50%) (53.4%) 10% since 2004 are (60%) 28 16 2 0 25 currently trading (70%) (67.6%) 0% above issue price (80%) 2004 2005 2006 2007 2004 2005 2006 2007

Median % Change Offer / Current Price Number of Companies Currently Above Issue

# of deals at bottom # of deals at bottom

10 0 % 10 0 % 10 0 % 80%

60% 80% 40% 60% 20% 50% 43% 0% 40% 40% 33% 33% -20% 29% 29% -40% 20% 14 % 13 % -60% 0% 0% -80% 0% 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 P h. I o r e a rlie r P h. II P h. III M ktd Ph. I or earlier Ph. II Ph. III Mktd

2206738715775445722067387157754457

Source: Equidesk, company filings, VentureSource Data excludes transactions less than $20 million 51 BIOPHARMACEUTICAL IPO MARKET CONDITIONS Biopharmaceuticals IPOs Completed since 1/1/2004

($ in millions, except per share) % Change File / Offer Fully-Diluted Valuation(2) Pricing Filing Offer Days in Orig. Amt. Amt. Stock Amount Pre- Post- Step- IPO as % of Offer / Phase of Issuer Date Midpoint Price Registration Filed Offered Price Offered(1) Money Money Up(3) Post-Money Current(4) Lead Product Indication of Lead Product ARYx Therapeutics Inc 11/07/07 15.00 10.00 69 75.0 50.0 (33.3%) (33.3%) 139.6 189.6 0.9x 26.4% (25.0%) Ph. II Gastrointestinal disorders; anticoagulation Nanosphere Inc 10/31/07 15.00 14.00 79 105.0 98.0 (6.7%) 7.3% 216.6 329.3 N/A 29.8% (3.5%) Ph. III or later Testing for genetic disorders Genoptix Inc 10/29/07 15.00 17.00 90 75.0 85.0 13.3% 30.3% 206.6 290.4 5.2x 29.3% 92.9% Ph. III or later Molecular diagnostics testing for cancer Novabay Pharmaceuticals Inc 10/25/07 5.00 4.00 253 25.0 20.0 (20.0%) (20.0%) 71.8 91.8 N/A 21.8% (5.0%) Ph. I or earlier Infections in hospital/non hospital settings Targanta Therapeutics 10/09/07 13.00 10.00 151 74.8 57.5 (23.1%) (23.1%) 166.3 223.8 1.1x 25.7% (9.0%) Ph. II Infections in hospitals/institutional settings MAP Pharmaceuticals Inc 10/04/07 15.00 12.00 108 75.0 60.0 (20.0%) (8.0%) 188.3 257.3 1.1x 23.3% 28.8% Ph.II Pediatric asthma; Migraine WuXi PharmaTech (Cayman) Inc 08/08/07 10.75 14.00 35 158.3 212.3 30.2% 16.7% 837.1 946.7 N/A 22.4% 106.0% Mktd R&D Outsourcing Sucampo Pharmaceuticals Inc 08/02/07 1.25 11.50 27 56.3 49.6 820.0% (23.3%) 450.5 483.6 N/A 10.3% 7.3% Mktd Ophthalmic, Gastro, Liver and Circ. Diseases Response Genetics Inc 06/05/07 7.50 7.00 166 22.5 21.0 (6.7%) (6.7%) 50.7 71.7 N/A 29.3% (28.6%) Ph. I Cancer Jazz Pharmaceuticals Inc 05/31/07 25.00 18.00 83 150.0 108.0 (28.0%) (28.0%) 333.9 441.9 1.2x 24.4% (18.7%) Ph. III Daytime Sleepiness, OCD & Social Anxiety Amicus Therapeutics Inc 05/30/07 15.00 15.00 61 75.0 75.0 0.0% 0.0% 278.3 353.3 1.3x 21.2% (29.6%) Ph. II Fabry, Gaucher, and Pompe Diseases Helicos BioSciences Corp 05/24/07 14.00 9.00 85 75.6 52.2 (35.7%) (35.7%) 139.8 188.4 0.7x 27.7% 16.7% Ph. I Genetic Analysis Sirtris Pharmaceuticals Inc 05/22/07 10.00 10.00 82 50.0 69.0 0.0% 20.0% 241.5 301.5 1.3x 22.9% 35.6% Ph. I MELAS (muscle failure) and Type 2 Diabetes Biodel Inc 05/10/07 15.00 15.00 92 75.0 86.3 0.0% 0.0% 229.6 304.6 3.7x 28.3% 60.6% Ph. III Type 1 and 2 Diabetes Neurogesx Inc 05/01/07 14.00 11.00 83 56.0 44.0 (21.4%) (21.4%) 98.8 142.8 1.0x 30.8% (48.1%) Ph. III PHN and HIV-DSP Pharmasset Inc 04/26/07 13.00 9.00 353 78.0 45.5 (30.8%) (42.3%) 154.0 199.0 1.2x 22.8% 198.4% Ph. II Hept. B.(HBV), Hept. C. (HCV), HIV OREXIGEN Therapeutics Inc 04/25/07 12.00 12.00 127 72.0 96.6 0.0% 16.7% 251.1 335.1 1.7x 28.8% 12.2% Ph. III CNS Disorders (obesity focus) Simcere Pharmaceutical Group 04/19/07 13.50 14.50 27 210.9 260.5 7.4% 7.4% 725.0 906.3 N/A 28.7% (11.3%) Mktd Antibiotics (e.g. amoxicillin) Tongjitang Chinese Medicines Co 03/15/07 16.00 10.00 17 157.8 101.8 (37.5%) (37.5%) 250.7 334.2 N/A 30.4% (8.7%) Mktd OTC (over the counter) medicines Rosetta Genomics Ltd 02/26/07 12.00 7.00 178 36.0 30.2 (41.7%) (27.1%) 56.2 82.5 N/A 36.6% (11.7%) Ph. I MicroRNA (gene) products Optimer Pharmaceuticals Inc 02/08/07 13.00 7.00 91 68.3 56.4 (46.2%) (28.2%) 123.0 172.0 1.3x 32.8% (3.6%) Ph. II Anti-infective products Synta Pharmaceuticals Corp 02/06/07 15.00 10.00 76 90.0 50.0 (33.3%) (44.4%) 288.2 338.2 N/A 14.8% (40.5%) Ph. II Molecular medicine 3SBio Inc 02/06/07 13.00 16.00 18 100.1 135.2 23.1% 23.1% 229.3 344.3 N/A 39.3% (12.8%) Mktd Inflammation and infectious diseases Molecular Insight Pharmaceuticals Inc 02/01/07 15.00 14.00 450 75.0 70.0 (6.7%) (6.7%) 308.4 378.4 3.4x 18.5% (36.8%) Ph. I Molecular medicine Oculus Innovative Sciences Inc 01/24/07 13.00 8.00 205 40.0 26.8 (38.5%) (39.5%) 73.9 98.1 N/A 27.4% (39.3%) NDA; Off label Wound infection treatment Affymax Inc 12/14/06 23.00 25.00 139 80.5 106.4 8.7% 14.9% 294.2 386.7 1.7x 27.5% (16.4%) Ph. II Kidney disease and cancer treatment Obagi Medical Products Inc 12/13/06 14.00 11.00 91 74.9 58.9 (21.4%) (21.4%) 196.7 240.7 N/A 24.4% 62.4% Mktd Therapeutic skin health systems Emergent BioSolutions Inc 11/14/06 15.00 12.50 92 75.0 62.5 (16.7%) (16.7%) 311.2 373.7 N/A 16.7% (42.6%) Ph. II Vaccines - Anthrax and Typhoid Catalyst Pharmaceutical Partners Inc 11/07/06 12.00 6.00 105 36.0 20.1 (50.0%) (44.2%) 66.4 86.5 2.5x 23.2% (47.5%) Ph. II Cocaine addiction Achillion Pharmaceuticals Inc 10/25/06 15.00 11.50 208 67.5 59.5 (23.3%) (23.3%) 128.3 180.0 1.3x 33.1% (62.5%) Ph. II HIV Cadence Pharmaceuticals Inc 10/24/06 12.00 9.00 99 72.0 62.1 (25.0%) (25.0%) 209.7 263.7 2.2x 23.6% 56.1% Ph. III Acute pain Trubion Pharmaceuticals Inc 10/17/06 14.00 13.00 137 56.0 59.8 (7.1%) (7.1%) 183.2 235.2 3.5x 25.4% (23.3%) Ph. II Rheumatoid Arthritis Warner Chilcott Ltd 09/20/06 18.00 15.00 103 1,270.8 1,059.0 (16.7%) (16.7%) 2,519.4 3,507.8 N/A 30.2% 16.0% Mktd Women's Health; Dermatology Osiris Therapeutics Inc. 08/03/06 12.00 11.00 83 42.0 38.5 (8.3%) (8.3%) 267.8 306.3 0.9x 12.6% 20.7% Ph. III Graft Versus Host Disease; Crohn's Disease Replidyne Inc. 06/27/06 15.00 10.00 83 75.0 50.1 (33.3%) (40.0%) 231.8 276.8 1.2x 18.1% (76.0%) NDA Sinusitis, Pneumonia, Bronchitis Novacea Inc. 05/09/06 12.00 6.50 88 75.0 44.9 (45.8%) (45.8%) 113.2 153.8 0.7x 29.2% (54.3%) Ph. III Androgen-independent Prostate Cancer Omrix Biopharmaceuticals Inc. 04/20/06 16.00 10.00 92 55.0 39.5 (37.5%) (37.5%) 109.9 144.3 1.1x 27.4% 231.5% Mktd Hemostasis in surgical procedures Vanda Pharmaceuticals Inc. 04/12/06 13.00 10.00 104 74.8 59.6 (23.1%) (23.1%) 172.6 230.1 1.2x 25.9% (40.8%) Ph. III Schizophrenia and Bipolar Disorder Targacept Inc. 04/11/06 12.00 9.00 84 60.0 45.0 (25.0%) (25.0%) 136.9 181.9 1.1x 24.7% (10.1%) Ph. II Alzheimer's Disease Alexza Pharmaceuticals Inc. 03/08/06 11.00 8.00 76 60.5 50.6 (27.3%) (27.3%) 150.1 194.1 1.4x 26.1% (7.5%) Ph. II Acute Migraine Headaches Acorda Therapeutics Inc. 02/09/06 12.00 6.00 127 66.0 36.5 (50.0%) (50.0%) 82.9 115.9 0.8x 31.5% 253.5% Mktd Spasticity; Multiple Sclerosis Iomai Corp. 02/01/06 12.00 7.00 121 75.0 35.0 (41.7%) (53.3%) 93.5 128.5 1.3x 27.2% (85.3%) Ph. II Travelers' Diarrhea Valera Pharmaceuticals Inc. 02/01/06 11.00 9.00 324 41.3 34.8 (18.2%) (18.2%) 104.5 138.3 1.7x 25.1% (5.7%) Mktd Prostate Cancer; Central Precocious Puberty SGX Pharmaceuticals Inc. 01/31/06 12.00 6.00 151 48.0 24.9 (50.0%) (50.0%) 65.9 89.9 0.4x 27.7% (15.3%) Ph. III Third-line treatment of AML Altus Pharmaceuticals Inc. 01/25/06 15.00 15.00 100 90.0 120.8 0.0% 16.7% 275.1 380.1 2.3x 31.8% (65.1%) Ph. III Exocrine Pancreatic Insufficiency Nucryst Pharmaceuticals Corp. 12/21/05 13.00 10.00 19 75.0 45.0 (23.1%) (40.0%) 140.9 185.9 0.6x 24.2% (84.9%) Mktd Wound care; Atopic Dermatitis Somaxon Pharmaceuticals Inc. 12/14/05 14.00 11.00 68 70.0 55.0 (21.4%) (21.4%) 152.4 207.4 1.4x 26.5% (62.5%) Ph. III Insomnia CombinatoRx Inc. 11/09/05 11.00 7.00 334 66.0 48.3 (36.4%) (36.4%) 130.3 172.3 1.4x 28.0% (34.4%) Ph. II Immuno-inflammatory diseases Genomic Health Inc 09/28/05 13.00 12.00 75 65.2 60.2 (7.7%) (7.7%) 246.5 306.7 1.6x 19.6% 100.7% Mktd Cancer Diagnostics Avalon Pharmaceuticals Inc. 09/28/05 11.00 10.50 148 49.5 28.9 (4.5%) (41.7%) 63.6 92.4 0.6x 31.2% (70.9%) Ph. I Leukemia, Lymphoma

Source: Equidesk, company filings, FactSet, VentureSource Data as of December 2007 (1) Represents change from original filing amount to amount offered (2) Fully diluted according to treasury stock method (3) Represents IPO pre-money value divided by post-money value as of the last private round of financing (4) For acquired companies, represents percent change in price from IPO to last trading day; Split-adjusted where applicable

52 BIOPHARMACEUTICAL IPO MARKET CONDITIONS

Biopharmaceuticals IPOs Completed since 1/1/2004 – cont’d

(2) ($ in millions, except per share) % Change File / Offer Fully-Diluted Valuation Pricing Filing Offer Days in Orig. Amt. Amt. Stock AmountPre- Post- Step- IPO as % of Offer / Phase of Issuer Date Midpoint Price Registration Filed Offered OfferedPrice(1) Money Money Up(3) Post-Money Current(4) Lead Product Indication of Lead Product Sunesis Pharmaceuticals Inc. 09/26/05 $10.00 $7.00 277 $60.0 $42.0 (30.0%) (30.0%) $115.2 $157.2 0.6x 26.7% (71.9%) Ph. I Cancer Coley Pharmaceutical Group Inc. 08/09/05 15.00 16.00 111 90.0 110.4 6.7% 6.7% 361.7 457.7 3.6x 24.1% NA Ph. II Non-Small Cell Lung Cancer Advanced Life Sciences Holdings Inc. 08/04/05 12.00 5.00 98 54.0 35.0 (58.3%) (35.2%) 56.9 91.9 N/A 38.1% (67.6%) Ph. III Respiratory Tract infections Adams Respiratory Therapeutics Inc. 07/20/05 15.00 17.00 117 106.2 155.4 13.3% 27.3% 501.5 598.3 5.0x 26.0% 251.2% Mktd Respiratory conditions Gentium S.p.A. 06/16/05 10.00 9.00 143 27.0 24.3 (10.0%) (20.0%) 48.5 70.1 3.0x 34.7% 43.8% Ph. III Hepatic Veno-Occlusive Disease XenoPort Inc. 06/02/05 15.00 10.50 134 75.0 52.6 (30.0%) (30.0%) 156.7 209.2 0.8x 25.1% 470.3% Ph. II Restless Legs Syndrome Aspreva Pharmaceuticals Corp. 03/03/05 14.00 11.00 38 100.8 91.1 (21.4%) (21.4%) 298.5 377.7 2.5x 24.1% NA Ph. III Myasthenia Gravis Threshold Pharmaceuticals Inc. 02/03/05 15.00 7.00 300 80.0 42.8 (53.3%) (53.3%) 169.3 206.6 2.2x 20.7% (93.3%) Ph. III Pancreatic Cancer Favrille Inc. 02/02/05 13.00 7.00 300 78.0 44.0 (46.2%) (46.2%) 105.5 147.5 1.2x 29.8% (79.3%) Ph. III Indolent B-Cell Non−Hodgkin’s Lymphoma Icagen Inc. 02/02/05 11.00 8.00 300 55.0 40.8 (27.3%) (27.3%) 152.5 192.5 1.0x 21.2% (80.0%) Ph. III Sickle Cell Disease ViaCell Inc. 01/20/05 8.00 7.00 290 60.0 60.4 (12.5%) (12.5%) 227.3 279.8 1.0x 21.6% NA Mktd Umbilical Cord blood preservation CoTherix Inc. 10/15/04 13.00 6.00 218 65.0 30.0 (53.8%) (53.8%) 95.6 125.6 1.2x 23.9% 124.8% NDA Pulmonary Arterial Hypertension Theravance Inc. 10/04/04 14.00 16.00 116 72.8 113.2 14.3% 35.2% 810.1 908.5 1.6x 12.5% 29.9% Ph. III Infections of the skin and soft tissue New River Pharmaceuticals Inc. 08/05/04 12.00 8.00 91 50.4 33.6 (33.3%) (33.3%) 113.0 146.6 1.7x 22.9% 1499.5% Ph. I ADHD MannKind Corp. 07/27/04 14.00 14.00 88 77.0 91.8 0.0% 13.6% 374.4 461.9 1.3x 19.9% (42.6%) Ph. II Diabetes Auxilium Pharmaceuticals Inc. 07/23/04 13.00 7.50 93 78.0 41.3 (42.3%) (47.1%) 118.7 159.9 1.1x 25.8% 294.8% Mktd Hypogonadism Idenix Pharmaceuticals Inc. 07/21/04 15.00 14.00 219 87.0 81.2 (6.7%) (6.7%) 627.6 691.7 1.3x 11.7% (79.0%) Ph. III Chronic Hepatitis B Xenogen Corporation 07/16/04 10.00 7.00 105 45.0 29.4 (30.0%) (34.7%) 80.2 109.6 2.1x 26.8% (64.1%) Mktd Biophotonic Imaging System Senomyx Inc. 06/21/04 14.00 6.00 84 84.0 38.7 (57.1%) (57.1%) 116.8 152.8 1.3x 25.3% 1.8% Mktd Taste-masking technology Momenta Pharmaceuticals Inc. 06/21/04 14.00 6.50 102 74.9 40.0 (53.6%) (53.6%) 131.7 166.5 1.1x 24.0% (8.2%) Pre-sNDA Deep Vein Thrombosis Metabasis Therapeutics Inc. 06/15/04 12.00 7.00 133 72.0 35.5 (41.7%) (51.4%) 95.3 130.3 1.0x 27.3% (65.0%) Ph. II Diabetes - Type II Inhibitex Inc. 06/03/04 11.00 7.00 92 64.9 38.7 (36.4%) (46.1%) 93.7 128.7 0.8x 30.1% (87.9%) Ph. III Hospital-associated infections Alnylam Pharmaceuticals Inc. 05/27/04 11.00 6.00 90 55.0 34.5 (45.5%) (45.5%) 96.2 126.2 0.8x 27.3% 436.2% Preclinical Age-related Macular Degeneration Critical Therapeutics Inc. 05/26/04 12.00 7.00 68 72.0 42.8 (41.7%) (41.7%) 136.0 178.0 1.5x 24.0% (82.6%) Ph. III Asthma ACADIA Pharmaceuticals Inc. 05/26/04 13.00 7.00 89 65.0 35.0 (46.2%) (46.2%) 91.2 126.2 1.5x 27.7% 64.9% Ph. II Parkinson's Disease Cytokinetics Inc. 04/29/04 12.00 13.00 93 69.6 103.2 8.3% 28.9% 286.1 375.8 1.4x 27.5% (66.5%) Ph. II Non-Small Cell Lung Cancer Barrier Therapeutics Inc. 04/28/04 15.00 15.00 82 75.0 75.0 0.0% 0.0% 255.2 330.2 2.0x 22.7% (74.1%) Ph. III Seborrheic Dermatitis Immunicon Corp 04/15/04 13.00 8.00 129 78.0 55.2 (38.5%) (38.5%) 142.7 190.7 1.3x 28.9% (89.9%) Mktd Cancer Diagnostics Corcept Therapeutics Inc. 04/14/04 16.00 12.00 64 80.0 54.0 (25.0%) (32.5%) 222.2 276.2 1.6x 19.6% (77.9%) Ph. III Major psychotic Depression Memory Pharmaceuticals Corp. 04/05/04 14.00 7.00 104 70.0 40.3 (50.0%) (50.0%) 116.1 151.1 1.4x 26.6% (92.3%) Ph. II Alzheimer's Disease Santarus Inc. 03/31/04 12.00 9.00 99 85.2 62.1 (25.0%) (36.6%) 218.5 272.5 1.9x 22.8% (72.2%) NDA Heartburn Anadys Pharmaceuticals Inc. 03/25/04 12.00 7.00 132 75.0 49.0 (41.7%) (41.7%) 110.6 154.4 1.0x 31.7% (78.6%) Ph. II Chronic HBV Infection Tercica Inc. 03/16/04 15.00 9.00 186 75.0 56.9 (40.0%) (34.0%) 168.1 217.6 2.0x 26.2% (22.2%) Ph. III Severe Pediatric IGF-1 Deficiency Cyclacel Pharmaceuticals Inc. 03/16/04 14.00 8.00 158 56.0 33.6 (42.9%) (40.0%) 87.3 120.9 0.7x 27.8% (34.4%) Ph. II Chronic Lymphocytic Leukemia Dynavax Technologies Corp. 02/18/04 13.00 7.50 117 78.0 51.8 (42.3%) (42.3%) 137.6 182.6 1.7x 28.3% (30.4%) Ph. III Ragweed allergies Anesiva Inc. 02/11/04 15.00 16.00 69 75.0 110.4 6.7% 28.0% 356.2 452.2 1.9x 24.4% (70.6%) Ph. III Vein Graft failure prevention Renovis Inc. 02/04/04 14.00 12.00 110 77.0 75.9 (14.3%) (14.3%) 235.2 301.2 2.3x 25.2% (74.3%) Ph. III Acute Ischemic Stroke GTx Inc. 02/02/04 14.00 14.50 110 75.6 78.3 3.6% 3.6% 285.2 363.5 2.2x 21.5% (6.8%) Ph. III Androgen Deprivation Therapy Eyetech Pharmaceuticals Inc. 01/29/04 19.00 21.00 139 123.5 157.0 10.5% 10.5% 774.4 910.9 2.9x 17.2% (13.4%) Ph. III Wet Age-related Macular Degeneration

# of Completed Biopharma IPOs Since 2004: 89 High: 450 $1,270.8 $1,059.0 820.0% 35.2% $2,519.4 $3,507.8 5.2x 39.3% 1499.5% Biopharma IPO Proceeds Since 2004: $6,653.4 Average: 127 $87.0 $74.8 (13.2%) (21.6%) $237.4 $304.3 1.6x 25.5% 20.4% Median: 102 $74.9 $52.2 (25.0%) (27.1%) $156.7 $207.4 1.3x 25.9% (20.4%) Low: 17 $22.5 $20.0 (58.3%) (57.1%) $48.5 $70.1 0.4x 10.3% (93.3%)

53 BIOPHARMACEUTICAL IPO MARKET CONDITIONS Biopharmaceuticals IPOs Withdrawn/Postponed since 1/1/2004

Filing WD/PP Filing Revised Original Amt Revised Amt Phase of Date Date Issuer Range Range Filed ($MM) Filed ($MM) Managers Lead Product Indication Withdrawn/Postponed comment 8/24/07 12/6/07 Precision Therapeutics $81 JPMHQ, PIPER Mktd individualized cancer therapy Due to acquisition by Oracle Healthcare Acquisition Corp 8/21/07 9/24/07 Adnexus Therapeutics $86 LAZARD, COWEN I Targeted biologics Due to merger with Bristol-Myers Squibb Co. 3/29/07 9/5/07 NovaCardia Inc $86 JPMHQ, CSFB, PACGRE, FALBNY III Congestive Heart Failure & A-Fib Due to announced acquisition by Merck & Co. 5/1/07 8/6/07 Cumberland Pharmaceuticals Inc 14.00 - 16.00 $94 UBSW, JEFFER, WCHV, MJC Mktd Acute Care & Gastroenterology Due to market conditions. 3/30/07 7/27/07 Quark Pharmaceuticals Inc 12.00 - 14.00 $65 JPMHQ, BOFA, CIBC, UNTERB I Diseases associated w/ Oxidated Stress Due to market conditions. 2/27/07 6/26/07 Endoceutics Inc 11.00 - 13.00 7.00 - 9.00 $69 $46 FALBNY, OPCO, STIFEL III Breast Cancer Due to market conditions and changes in phase III scheduling plans. 3/21/07 6/15/07 Aegerion Pharmaceuticals Inc 12.00 - 14.00 $65 LEHMAN, CIBC, WEISEL, UNTERB II Cholestoral & Trygliceride Inhibitor Due to market conditions. 4/10/06 5/1/07 Perlegen Sciences $115 LEHMAN, ALEX, PIPER, ALLEN II Genetically Targeted Diabetes Due to material accounting inconsistencies. 3/31/06 4/20/07 PTC Therapeutics Inc $86 MS, JPMHQ, PACGRE II Cycstic Fibrosis & Duchenne Due to market conditions. 12/13/06 3/7/07 OncoGenex Technologies Inc 10.00 - 12.00 7.50 - 8.50 $50 $40 RBC, NECOIN, LAZD, CAADIN, SUSQUE II Cancer Treatment resistance Due to market conditions. 5/19/06 12/5/06 ImaRx Therapeutics Inc 10.00 - 12.00 $55 CIBC, JEFFER, FALBNY III Ischemic Stroke & Pulmonary Embolism Due to market conditions. 8/14/06 11/13/06 ActivBiotics Inc 12.00 - 14.00 8.00 - 10.00 $52 $36 HSBS, NECOIN, BMO, SUSQUE III Intermittent Claudication / PAD Due to market conditions. 6/20/06 10/20/06 BioVex Group Inc 11.00 - 13.00 $41 JANNEY, STIFEL II Oncolytic Virus Technology Due to market conditions. 4/21/06 10/12/06 Light Sciences Oncology Inc 14.00 - 16.00 $79 COWEN, WCHV, JEFFER, WEISEL III Light Infusion Therapy for Tumors Due to market conditions. 5/17/06 8/2/06 Amicus Therapeutics Inc $86 MS, GS, PACGRE II Fabry, Gaucher, & Pompe Disease To pursue an additional round of private financing. 2/3/06 7/7/06 QuatRx Pharmaceuticals Co 11.00 - 13.00 $72 BOFA, COWEN, LAZD, PACGRE III Vaginal Atrophy Due to market conditions. 6/8/04 6/9/06 Bionumerik Pharmaceuticals Inc 14.00 - 16.00 $75 UBSW, NECOIN, LEER, PUNK III Cancer Treatment Neuropathy Due to market conditions. 8/27/04 2/16/06 Corus Pharma Inc $100 ML, PACGRE, STRH, JOLMER II Cycstic Fibrosis Due to market conditions. 4/22/05 12/20/05 Prestwick Pharmaceuticals Inc $75 UBSW, ALEX, CIBC Mktd Hyperkinetic Movement Disorders Due to market conditions. 11/24/04 12/15/05 AlgoRx Pharmaceuticals Inc 10.00 - 12.00 7.00 - 8.00 $75 $51 CRSFB, CITI, PIPER, LAZARD III Osteoarthritis and Tendonitis Due to market conditions. 9/9/05 12/13/05 Voyager Pharmaceutical Corp 15.00 - 19.00 11.00 - 15.00 $100 $59 WRHACO III Alzheimer's Disease Due to market conditions. 5/20/05 11/17/05 Reliant Pharmaceuticals LLC $300 GS, BOFA, ALEX, JPMHQ, BLAIR, LAZD Mktd Branded Cardiovascular Pharmaceuticals Due to market conditions. 8/3/05 10/26/05 Predix Pharmaceuticals Holdings 10.00 - 12.00 $55 UBSW, ALEX, CIBC, THINKE III Generalized Anxiety Disorder Due to market conditions. 4/27/05 10/20/05 SkinMedica Inc 11.00 - 13.00 $63 SGCOW, PIPER, WEISEL, UNTERB Mktd Prescription Neutraceuticals Due to market conditions. 2/7/05 9/21/05 Intarcia Therapeutics Inc 12.00 - 14.00 $65 CRSFB, PACGRE, LAZARD III Hormone-Dependent Breast Cancer Due to market conditions. 12/16/03 6/23/05 Peninsula Pharmaceuticals Inc 12.00 - 14.00 $75 CRSFB, BEAR, FALBNY, LEGG III Bacterial Infections in Hospitals The company has entered into discussions to be acquired by J&J 1/18/05 6/13/05 Synta Pharmaceuticals Corp 14.00 - 16.00 $90 MS, LEHMAN, LAZARD II Crohn's Disease, Psoriasis, & Cancer Due to market conditions. 1/10/05 5/19/05 EpiCept Corp 11.00 - 13.00 6.00 - 7.00 $66 $36 WCHV, UNTERB, JEFFER III Topical Pain Management Therapeutics Due to market conditions and strategic reasons. 4/23/04 5/12/05 Salmedix Inc $86 SGCOW, PACGRE, THINKE, JOLMER II Hematologic Malignacies Due to market conditions. 5/14/04 3/16/05 Targacept Inc 11.00 - 13.00 $75 ALEX, PACGRE, CIBC, LAZARD II Age Associated Memory Impairment Due to market conditions. 8/26/03 7/26/04 TolerRx Inc 12.00 - 14.00 $61 JPMHQ, SGCOW, LEER II Type I Diabetes Due to market conditions. 7/2/04 7/26/04 Cyclacel Group plc 11.00 - 13.00 $48 MS, SGCOW, NECOIN, LEER II Cyclin Dependent Kinase Ihibition Due to market conditions. 8/22/03 4/9/04 Xcel Pharmaceuticals Inc $75 SGCOW, CIBC, WEISEL, PIPER Mktd Epileptic Fits and Migraines Due to market conditions.

Source: Equidesk, company filings Withdrawn/Postponed Comment from company request for withdrawl filing

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