Life Sciences Venture Equity Market Review: The Evolving Role of Crossover Investors

June 2021

Securities offered in the United States are offered through Torreya Capital LLC, Member FINRA/SIPC. In Europe such services are offered through Torreya Partners (Europe) LLP, which is authorized and regulated by the UK Financial Conduct Authority. The Market for Equity Privates in Life Sciences

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 2 Total Private Venture Financing Volume: 2000-2021 H1 Given volumes in the first half of this year, there is little doubt that 2021 will shape up to be the most active year in history for private financing activity in the life sciences sector.

Total Volume of Private Biopharma, Diagnostics and Tools 50000 Financing Rounds by Year Jan 2000 - June 2021 600 (deals over $25mm, excluding medical devices, worldwide) 45000 523

500 40000

35000 373 400 356 30000 334

25000 300

20000 224 226 Transaction Transaction Count 184 200 15000 145 138 121 122 111 10000 109 88 97 96 81 72 100

Aggregate Aggregate Dollar Volume Private of Financings ($mm) 55 5000 40 35 23

0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1

Transaction Count Dollar Volume ($mm)

Source: Torreya analysis and records, CapitalIQ and Crunchbase

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 3 Fresh Flowing into Life Science Sector We are on track to see record amount raised in life science venture capital in 2021.

Life Sciences Venture Capital Funds – Raised, $Billions $35

$30 $28.9

$25

$20

$15.4 $15 $14.1

$10.3 $10 $9.1 $7.4 $7.5 $7.5 $7.2 $6.6 $6.8

New Capital New Capital Flowing into Venture Funds ($bn) $6.1 $5.5 $5.7 $5 $3.8 $3.6 $3.9 $2.8 $2.7 $2.6 $2.8 $1.8

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1

Source: Venture fund press releases, Torreya analysis and records, CapitalIQ

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 4 Fresh Venture Capital Flowing into Life Science Sector Over $10 billion flowed into life science venture capital funds in Q2 2021 – an all-time high

Life Science Venture Capital Funds, Amounts Raised by Quarter ($millions) $12,000

$10,086 $10,000

$8,000 $7,796

$6,875 $6,467 $6,200 $6,000 $5,164

$4,000 $3,608

$2,412 $2,017 $2,180 $2,000 $1,582 $1,633 $1,564

$0 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Source: Venture fund press releases, Torreya analysis and records, CapitalIQ

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 5 The Role of Crossover Investors

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 6 The Role of Crossover Investors

• We define crossover investors as late-stage investors that typically participate in the public equity markets but “cross over” to the private markets to gain exposure to attractive equity stories prior to an IPO.

• In practice, the presence of crossover investors can be a major plus in structuring and executing a successful IPO. Often, they can reposition or even institutionalize the shareholder profile of a company.

• “Cross-over” institutions offer implicit support for an IPO and often explicitly in the form of either insider commitments or anchor orders at the time of the IPO.

• funds are the key drivers of the crossover market. Many of these funds have become large and are looking for new ways to deploy capital while earning a return, hence their increasing participation in privates.

• Most hedge funds are allowed to put 5 - 10% of their capital into private investments. These investments are typically held in “side pockets” that are infrequently marked to market. There is substantial discretion on how and when such investments get marked to market.

• Several hedge funds and mutual funds have created dedicated teams or subfunds just for crossover investments. For example, Perceptive, RA and RTW have created dedicated venture groups.

• The crossover market is susceptible to closure in periods of financial uncertainty. Nevertheless, the crossover market reestablished itself in 2018. Since 2020 the market has taken off dramatically and activity thus far in 2021 is unabated.

• managers in the life science sector are generally very strong scientifically and can often rival the in- depth knowledge of their counterparts in long-only funds. Some of the top life science hedge funds have substantially more highly qualified staff on hand than perhaps do the largest public funds. By way of example, Wellington Management (US) is the largest investor in biotechnology stocks with over $40 billion deployed. They have a handful of analysts (one with a Ph.D.). In contrast, Deerfield and Perceptive with less than $8 billion each, have far more analysts. RA Capital has an order of magnitude more analysts.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 7 Investor Types Most Often Seen in Crossover Rounds

Crossover Funds Venture Capital Investors Family Offices Selected ▪ Adage Capital ▪ Abingworth ▪ ▪ 6 Dimensions ▪ Emerson Collective Examples ▪ Perceptive ▪ ARCH Venture ▪ GTCR ▪ Decheng Capital (Laurene Powell Jobs) ▪ RA Capital ▪ Forbion ▪ KKR ▪ Legend Capital ▪ Founders Fund (Peter ▪ T. Rowe Price ▪ Orbimed ▪ MVM ▪ Qiming Thiel) ▪ ▪ Invus (Eric Wittouck)

Pros ▪ Highly scientifically ▪ Willing to do mid-stage ▪ A commercial launch ▪ Attracted to very good ▪ Attracted to very good knowledgeable ▪ Sophisticated and story can work well for stories stories ▪ Less valuation sensitive medically savvy private equity investors ▪ Tend to be less ▪ Interested in financing ▪ Can dictate terms ▪ Can perform due that are at the borderline governance focused and projects that have ▪ Help get an IPO done diligence that others can of venture (pre- are typically constructive medical impact and ▪ Light hand on leverage near closing commercial) and on boards benefit humanity governance ▪ Many like to lead commercial. ▪ Chinese government ▪ A subset of super high ▪ Supportive and helpful ▪ Collaborative and value ▪ Tend to write larger committed to building net worth investors and add checks than venture out life sciences associated family offices ▪ Less valuation sensitive understanding can invest $50m or more than venture into life sciences companies Cons ▪ Need to be fairly IPO ▪ Valuation sensitive ▪ Can be distracted and ▪ All China investors are ▪ Not always scientifically ready (18 months out or ▪ Can be conflicted very busy government-linked to sophisticated and able to less) ▪ Can have agendas driven ▪ Will often be deep in a some degree. Impacts evaluate opportunities ▪ Distracted. Hard to get by fund life subsector but not as their behavior ▪ Often have idiosyncratic focused on a story ▪ Slow process scientifically strong as ▪ Negotiating with some taste for investment ▪ Not necessarily ▪ Like control and demand crossovers funds not easy opportunities committed to future board representation ▪ Don’t like small check ▪ Communication can be ▪ Relationships with rounds. Less patient. sizes. less direct investor partners ▪ Want to build. important

Key Points ▪ Least valuation sensitive ▪ Gives strong syndicate, ▪ Less valuation sensitive ▪ Very interested in life ▪ Super high net worth investor type time to prep for IPO than venture but more science space investors play an ▪ Not governance focused ▪ Term sheets from VCs committed to the long ▪ Can be valuation friendly increasingly important ▪ Distracted and not are the easiest to run than crossovers. ▪ Very “brand sensitive” role in financing life necessarily in for the long generate and can help a ▪ Can be highly committed sciences companies run. financing process to build-out / add-on ▪ Can be valuation ▪ Does not always need a ▪ Can be tough on terms stories insensitive lead investor and governance ▪ Relationship focused

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 8 Review of Top Life Sciences Crossover Rounds YTD 2021

PreMoney Value Deal Size Lead Date Issuer Field Headquarters Series ($mm) ($mm) Investor(s) Investors Oncology May-21 Irving, TX -- $7,000 $830.0 Diagnostics

Cell and Gene Tx Boston Mar-21 C -- $525.0 Companies Area, MA

Low-cost cancer Boston Jan-21 B $1,070 $500.0 drugs Area, MA

Bay Mar-21 AI drug discovery C $2,100 $400.0 Area, CA

COVID-19 Boston Apr-21 C $1,400 $336.0 antibody Area, MA

Sequencing May-21 Oxford, UK -- $2,500 $270.5 Tools

10 biotechs in Boston Feb-21 A $519 $250.0 one Area, MA

Chengdu, Feb-21 Vaccines C $700 $230.0 China

Boston Jan-21 MAPS Vaccines C $860 $226.0 Area, MA

Apr-21 AI drug discovery Oxford, UK D $861 $225.0

In vivo cancer Jun-21 Seattle, WA B $450 $210.0 immunotherapy

Bay Apr-21 Research Tools E $4,000 $200.0 Area, CA

May-21 Research Tools Singapore A $600 $200.0

Difficult targets May-21 Delaware C $250 $200.0 in cancer

Multicompany New May-21 -- $7,100 $200.0 Platform York, NY

Jan-21 Cardiometabolic Netherlands A -- $196.0

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 Source: Torreya analysis and records, CapitalIQ, Pitchbook and Crunchbase 9 Crossover Venture Financing Volume in Life Sciences There were 123 crossover financings in biopharma, tools and diagnostics in the first half of 2021. If current trends persist to year-end, we are on track for $32 billion in crossover privates this year.

Volume of Biopharma, Diagnostics and Tools Crossover Financing Rounds by Year Jan 2000 - June 2021 (deals over $25mm, excluding medical devices, worldwide) 18000 180 168

16000 160

14000 140 123 12000 120

10000 100 87 78 8000 72 80

6000 60 Transaction Count 46 39 4000 32 40

18 2000 20 10 11 10 12 11

Aggregate Aggregate Dollar Volume Private of Financings ($mm) 8 8 8 8 7 4 5 4 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1

Transaction Count Dollar Volume ($mm)

Source: Torreya analysis and records, CapitalIQ and Crunchbase

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 10 Crossover Activity Strongly Linked to Market Performance Crossover investors typically participate in pre-IPO private rounds when the market is doing well.

Number of Biopharma, Diagnostics and Tools Crossover Financing Rounds by Year Jan 2000 - June 2021 (deals over $25mm, excluding medical devices, worldwide) 180 168 Nasdaq Biotech Index 160

140

123 120

100 87 78 80 72

60 46 39

40 32 Number Number Private of Crossover Financings ($mm)

18 20 10 11 10 12 11 7 8 8 8 8 4 5 4 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1

Transaction Count Source: Torreya analysis and records, CapitalIQ and Crunchbase Nasdaq Biotech Index

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 11 Crossover Financings Increasingly Important Over Half of all Life Sciences Venture Capital Today is Being Raised in the Crossover Format

Crossover Financing Rounds as a Percent of All Life Science Venture Financings by Year, January 2012 - June 2021 (deals over $25mm, excluding medical devices, worldwide) 60%

51% 50%

40% 37% 38% 34% 34%

30% 30% 24% 25% 22% 20% 18% 16% 14% 14% 13% 13% 10% 10% 9% 10% 8% 9% 8%

5% Percent Percent of Rounds with a Crossover Investor

0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1

Source: Torreya analysis and records, CapitalIQ and Crunchbase

The crossover market historically was largely open in very strong bull markets including 2000 and 2004. Starting in 2014 the market matured, and more public funds built up their capabilities to invest in private, less liquid financings. With the most recent bull market in the life sciences the activity of public funds in venture capital has been exceptional.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 12 Crossover Financings Activity Slowed Down in Q2 2021 Volume peaked in March 2021 and has been down slightly in recent months. Despite this, the percent of venture dollars raised via crossovers remains at an all-time high.

Number of Life Sciences Crossover Deals by Dollar Volume of Life Sciences Crossover Quarter, Jan 2020 to June 2021 Deals by Quarter, Jan 2020 to June 2021 80 73 $12,000 70 $10,000 60 55 52 $8,000 50 44 40 33 36 $6,000 30 $4,000 20 Number Number Deals of $2,000

10 Dollar Volume ($mm) 0 $0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Percent of Life Sciences Venture Dollars Percent of Life Sciences Deals Raised via the Raised in the Crossover Format by Crossover Format by Quarter, Jan 2020 to Quarter, Jan 2020 to June 2021 June 2021

60% 53.7% 45% 50.7% 38.2% 40% 50% 33.3% 33.5% 42.0% 40.2% 35% 32.0% 31.9% 31.0% 40% 34.1% 36.4% 30% 25% 30%

20% Percent 20% Percent 15% 10% 10% 5% 0% 0% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Source: Torreya analysis and records, CapitalIQ and Crunchbase. Deals shown worldwide, exclusive of medical device companies. Transactions under $25mm excluded.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 13 20 Most Active Investors in the Crossover Market in 2021 Count of transactions, January 1, 2021 to June 20, 2021

Deals in 2021 Deals in 2021 Investor Locale (through June 20) Investor Locale (through June 20)

Boston 39 18

Boston 36 San Diego 17

Denver 29 San Francisco 17

New York 26 Zurich 17

New York 25 New York 17

San Francisco 25 New York 17

San Francisco 19 New York 16

New York 19 Baltimore 16

Boston 18 Baltimore 16

New York 18 San Francisco 14

Source: Torreya analysis and records, CapitalIQ and Crunchbase. Deals shown worldwide, exclusive of medical device companies. Transactions under $25mm excluded. TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 14 Other Active Investors in the Crossover Market in 2021 January 1, 2021 to June 20, 2021

7 to 13 Transactions 5 to 6 Transactions 3 to 5 Transactions EcoR1 Capital Avoro Capital NEA Quan Capital Fairmount Funds

Farallon Capital Northpond Ventures Sands Capital Management

GV Catalio Capital Osage University Partners SR One Capital Forbion Capital Partners

Vivo Capital Eventide Pontifax Temasek F-Prime Capital

Wellington Management LifeSci Venture Suvretta 5AM Ventures Gilde Healthcare

Arch Venture Partners Nextech Invest Tekla Capital Abingworth GT Healthcare

Eli Lilly PFM Health Sciences Versant Ventures Acorn Bioventures Intermediate Capital

Octagon Capital Advisors SoftBank ArrowMark Partners Agent Capital Lundbeckfonden Ventures

Deerfield Management TCG Crossover Leaps by Bayer Aisling Capital Management

Foresite Capital Vida Ventures Bristol-Myers Squibb Ally Bridge Group LYFE Capital

Omega Fund Management Woodline Partners CHI Advisors LLC LP M Ventures

Polaris Partners Access Biotechnology Cowen Healthcare Altium Capital LLP

Ridgeback Capital aMoon Fund Emerson Collective LLC Apeiron Investment Group Novartis Venture Funds

Viking Global Investors CaaS Capital Gilead Asymmetry Capital Parian Global Management

Acuta Capital Partners Franklin Templeton Pavilion Capital

Adage Capital JJDC MPM Capital Atlas Venture L.P. PBM Capital

Novo Holdings Longitude Capital Oxford Innovation CAM Capital Peter Thiel

Soleus Capital Presight Capital Commodore Capital Ventures

Venrock Partners Mirae Asset Capital Pura Vida Investments Driehaus Capital Pivotal BioVenture

Avidity Partners Monashee EDBI Point72 Ventures

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 15 Does Crossover Participation in a Private Round Help a Company to Get Public?

Likelihood of Going Public of Cohort of Life Sciences Companies that Did a Private Round between June 2020 and March 2021 (includes going public via IPO, SPAC or Reverse Merger) Percent of Percent of Non- Percent of All Crossover Crossover Companies Number of Companies Companies Size of Last Private Round that Later Crossover that Later Other Types of that Later (4 to 18 months ago) Total Rounds Went Public Rounds Went Public Rounds Went Public > $500mm 8 50.0% 5 80.0% 3 0% $150mm to 500mm 35 51.4% 23 56.5% 12 42% $75mm to 150mm 151 31.1% 88 39.8% 63 19% $50mm to 75mm 115 13.9% 37 37.8% 78 3% $25mm to 50mm 175 6.9% 20 15.0% 155 6% Grand Total 484 20.0% 173 39.9% 311 9% Average Private Round Size $82 million $112 million $66.6 million

Source: Torreya analysis and records, CapitalIQ and Crunchbase. Life sciences universe globally included. Transactions under $25mm excluded.

Key Observations: 1. Not surprisingly, companies that carried out a crossover round were four times more likely to go public than those that did not. 2. Companies that carried out a crossover financing had rounds that averaged $112 million in size versus $66.6 million for non-crossover rounds. 3. Companies that carried out rounds that were under $75 million in size were much less likely to go public than companies with larger rounds.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 16 June 2021 Biopharma IPOs Listed in the US

Pre-Money Time from of Last Size of Last Last IPO Last Round a Private Private Round Deal Valuation Step IPO Pricing Crossover Financing Round to IPO Size up from Last Date Target/Issuer Stage – Therapeutic Area Financing? ($mm) ($mm) (days) ($mm) Private Round

06/25/2021 Phase 1 - rare disease Yes $104 $151 106 $238 2.70x

06/24/2021 Phase 2 - oncology Yes $71 $65 226 $100 1.95x

06/24/2021 Phase 2 - neuroscience Yes $374 $125 84 $160 1.30x

06/23/2021 Preclinical - oncology Yes $126 $95 103 $222 1.81x

06/17/2021 Phase 1 - oncology Yes $174 $200 220 $126 1.48x

06/17/2021 Preclinical - cardiology Yes $267 $94 155 $224 1.68x

06/17/2021 Phase 1 - oncology Yes $193 $80 132 $133 1.44x

06/17/2021 Preclinical - oncology Yes $535 $160 112 $243 1.23x

06/17/2021 Phase 2 - neuroscience No $726 $157 106 $225 1.55x

06/16/2021 Preclinical - cardiology No $2,010 $493 458 $425 1.48x

06/11/2021 Preclinical - oncology Yes $221 $125 57 $223 1.40x

Source: Company press releases, SEC Form S-1 and F-1 filings, Torreya calculations. Deals where less than $50 million was raised were excluded.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 17 April and May 2021 Biopharma IPOs Listed in the US

Pre-Money Time from of Last Size of Last Last IPO Last Round a Private Private Round Deal Valuation Step IPO Pricing Crossover Financing Round to IPO Size up from Last Date Target/Issuer Stage – Therapeutic Area Financing? ($mm) ($mm) (days) ($mm) Private Round

05/27/2021 Phase 3 - renal Yes $519 $245 118 $330 1.82x

05/26/2021 Phase 2 - oncology Yes $162 $130 114 $160 2.76x

05/06/2021 Phase 3 - renal Yes $204 $115 226 $150 1.73x

04/29/2021 Preclinical - oncology Yes $88 $72 128 $120 2.01x

04/29/2021 Preclinical - vaccines Yes $261 $125 43 $111 1.21x

04/22/2021 Phase 1 - oncology Yes $48 $64 231 $125 2.64x

04/22/2021 NDA - neuroscience No $96 $68 868 $80 1.29x

04/15/2021 Phase 1 - rare disease Yes $679 $246 226 $502 4.03x

04/15/2021 Preclinical - oncology Yes $101 $56 113 $153 2.14x

04/08/2021 Phase 3 - GI Yes $91 $55 175 $147 2.95x

04/08/2021 Phase 1 - rare disease Yes $68 $95 122 $94 1.66x

Source: Company press releases, SEC Form S-1 and F-1 filings, Torreya calculations. Deals where less than $50 million was raised were excluded.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 18 Observations on IPOs and Crossover Investors The presence of crossover investors is consistently associated with better valuation step-ups and better after-market performance

2014 Q2 2021

Step-up Multiple from Last Round into IPO Valuation – Q2 2021 2.5

2

1.5 2.0x 1 1.3x 0.5

0 With Crossover Without Crossover Investors Investors

In 2021, the second and third observations hold as they did in 2014. Bruce Booth wrote an article on crossover investors Valuation step-ups were higher with crossover investor in the life sciences and noted that in 2014 the involvement in Q2 2021. While not shown (and data are limited), presence of these investors was associated with: post-IPO performance was also significantly better. We should note, however, that of the 22 biotech IPOs in the U.S. in Q2 2021 1. Higher pre-money valuations only 3 did not use crossover investors in their rounds. Two of these 2. Higher step-up multiples from last round to IPO employed investors and one went with traditional VC’s and from its prior round. The shares of the latter company are down 3. Better post-IPO performance more than 60% since deal pricing. Because the two deals with family office investors came out with high IPO valuations (ATAI and Lyell) we are not able to say that the crossover format is associated Source: www.forbes.com/sites/brucebooth/2014/11/07/the-biotech-cross-over-phenom- with higher valuations. biomarker-of-quality/ Source: Torreya analysis of S-1/F-1 filing data.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 19 Benefits to Public Investors of Participating in a Crossover Round

We have spoken to many crossover investors about the pros and cons of participating in these rounds. The reasons given in favor of participating are as follows:

Knowledge. Investors thrive on understanding of complex subject matter in the life sciences. Numerous investors cited the ability to learn about a company and its area with a CDA in place as the top reason for participating in crossovers. Investors have noted that traditional IPO marketing processes, particularly during the pandemic, leave precious little time to really under the merits of an investment.

Speed and Certainty. Traditionally crossover investments have involved making illiquid investments that can be outstanding for years at a time. But the median time from last round to IPO pricing in 2021 has been 125 days. Because most IPOs take eight months from start to finish, these rounds are taking place inside the IPO window and thereby are relatively low risk.

Access and Return. While crossover rounds involve higher illiquidity than public investments they offer public investors relatively low risk step-ups from IPOs – hence excellent returns, on average. Importantly, it is often difficult to accumulate positions in high quality companies even after an IPO. Thus, the pre-IPO round facilitates building a position.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 20 Comparison of Approaches to Going Public

Traditional IPO SPAC Merger Reverse Merger

Going public through merger and S-3 filing. Going public through merger and S-3 filing / Description Go public through an S-1 filing and marketed sale Target is a special purpose acquiror with no proxy statement. Target is an operating company operating history • Public biotech valuations are at peak levels • Consideration and structure determined at • Can capture cash at a target firm • Ability to conduct advance investor marketing deal signing • Avoids some costs of IPO • Optionality in filing publicly and launching • SPAC incentivized to complete a transaction – • Can be synergies with existing programs / roadshow provides target shareholders leverage in management teams • Investor base comprised of Top Tier negotiation • Can be “hidden assets” in target firm institutional investors • Higher potential for shareholder liquidity • • Substantially faster timetable to closing Pros Coverage by market-leading equity research analysts compared to IPO • Aftermarket trading and liquidity support from • SPAC sponsor may bring ancillary benefits to UW syndicate target company (experience, credibility, • IPO process may also catalyze pre-emptive connections, etc.) strategic interest • Path to long-term liquidity for existing shareholders

• Generally executed in stable market • Potential future dilution to SPAC / Sponsor • Limited track record for successful life environments (VIX < 25) from warrants sciences transactions • Typically, 20-week process (however, Piper • Deal subject to SPAC shareholder vote • Not easy to get a “good deal” versus an IPO experience plus sponsor commitment may • Risk SPAC shareholders approve deal but • Lack of sponsorship from either an investor or accelerate this timetable) redeem their cash preventing purchase price an investment bank • Market-based pricing mechanism from being funded; sponsor may backstop • Integration cost could be significant • Punitive failed deal consequences – proxy • Cons Historically, reverses associated with poor statement and financials are public, yet target post merger returns remains private • Torreya study shows median 1-year market- • May have longer-term Lock-up provisions adjusted return following a reverse merger of - • Typically, a non-fundamental investor base 33% and -59% by year 2 • Limited equity research coverage or awareness • Limited aftermarket trading & liquidity support

Time to Completion 7 to 9 months 3 months 4 to 6 months

Years of Audited 3 years 2 years 2 years Financials Needed

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 21 About Torreya

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 22 Torreya is a Global Healthcare Firm We have over 50 employees working from offices in New York, London and Mumbai

We are known for: Representative Transaction Work Mergers & • Deep Relationships Acquisitions We have strong personal Advisor in its merger Acquisition of Sale of 100% Sale to Acquisition of relationships across the with generics business of equity stake to pharmaceutical and healthcare sectors. $1.5 billion $1.05 billion $225 million $106 million + milestones October 2020 June 2017 Pending September 2020 March 2021

• Operating Perspective Biotech Generic Pharma Specialty Pharma Specialty Pharma Specialty Pharma Many of our senior Licensing, colleagues come from Asset Sales Sale of License of NOV03 in License of JV Partnership industry and bring decades & JVs Sale of FXR program to Intrathecal business to North America to Navicixizumab to in China with of experience. • Deal Excellence Up to $470 million $203 million Up to $306 million $50 Million Torreya is known as a firm January 2015 March 2017 December 2019 January 2020 December 2018 Divestiture / that gets tough deals done. Asset Sale / Biotech Licensing / Biotech Licensing / Biotech JV / Specialty Pharma Specialty Pharma Our team is skilled in highly Growth structured transactions. Equity, Debt recapitalization & Equity investment from Structured Sale of majority stake to acquisition of NextWave • Healthcare Focus Pharmaceuticals from Series E equity financing Equity financing round Our healthcare focus spans Financings & PE Recaps pharma, biotech, $200 million $125 million $125 million $104 million €44.5 million bioproduction, pharma February 2021 April 2019 September 2018 May 2021 October 2020 services, physician services Growth Equity / PE Recap / Debt / Growth Equity / Equity / Pharma Services Generics Specialty Pharma Diagnostics Biotech and HCIT.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 23 Torreya: Global Presence With 50+ Professionals Focused on the Life Sciences Sector

• Life Sciences advisory in Moscow North America, Europe London and Asia New York Seoul • Focused on strategic Tokyo transaction and financing Riyadh Mexico City transactions Mumbai • M+A: Corporate & asset-level • Royalty monetizations Rio de Janeiro • Licensing TORREYA • Acquisition financing AFFILIATE RELATIONSHIP* • Recapitalizations • Structured Debt • Equity Financings • 34 people based in New York • We cover Latin America, South Africa and • 11 people based in London parts of Asia through affiliate relationships • 5 people based in Mumbai • 3 people cover Japan and China in partnership • 1 person in Tokyo with local advisory firms

* Key affiliate partners are Kybora in Africa and MidEast; Novus Capital in Russia; Natixis in China and Korea; Panarea in Latin America; and GCA in Japan.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 24 Strong Capabilities in Arranging Private Equity Capital Raises

Successful Execution of Private Equity Markets Transactions Venture Raises in Principal Investments

Equity investment from Investor Advisor in Series A Series B Crossover Pre-IPO Equity financing round Series C Private Equity Raise Crossover Equity Raise Financing Round Private Equity Placement $104 million $200 million €44.5 million $30 million $6 million $100 million May 2021 February 2021 October 2020 October 2020 March 2021 September 2020

Sale of Equity stake to Series A Registered direct Disposal of stake in Investment by Convertible Preferred Equity Capital Raise common equity offering Equity Placement

$15 million $68 million $125 million $15 million $14 million August 2020 May 2020 February 2020 April 2019 January 2019 Pending

Torreya’s team takes on selective equity capital raises for venture stage and growth stage companies and has strong capabilities to place shares among crossover investors, family offices, private equity groups and venture funds. Our team maintains relationships with several hundred investors worldwide. In addition, Torreya has an active principal investments area which does not act as placement agent in raises on its own but has supported a number of recent financings in companies started by Torreya.

TORREYA | PRIVATE LIFE SCIENCES VENTURE FINANCING MARKET REVIEW – JUNE 2021 25 Disclaimer

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These described in these materials and thus will not be responsible for providing you the protections materials have been prepared by Torreya and its affiliates and accordingly information reflected or afforded to clients of Torreya (Europe) LLP or for advising you in connection with any potential incorporated into these materials may be shared with employees of Torreya and its affiliates and transaction(s) as described in these materials except and unless subject to a subsequent specific agents regardless of location. This presentation speaks only as of the date it is given, and the views written agreement relating to such potential transaction(s) between you and Torreya (Europe) LLP. expressed are subject to change based upon a number of factors, including market conditions. Torreya (Europe) LLP is authorised and regulated by the Financial Conduct Distribution of this presentation to any person other than the recipient is unauthorized. This material Authority. Securities offered in the United States are offered through Torreya must not be copied, reproduced, distributed or passed to others at any time without the prior written Capital LLC, Member FINRA/SIPC. consent of Torreya. This presentation has been prepared solely for informational purposes and is not

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