Pitchbook Format 1

8/3/2019 Pitchbook Format 1

1/20

February 27, 2008

Massachusetts Biotechnology Council

Jonathan P Gertler MDManaging Director

Head, BioPharma Investment Banking


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1

TheHealthcare Investment Bank

Entire firm focused solely on healthcare

Unmatched domain expertise

Only investment bank with proprietary MEDACorp resource

Top-ranked institutional equities platform

Long heritage as trusted advisor to increasingly sophisticated healthcare investors

Leading healthcare investment banking franchise Most healthcare equity transactions in 2007

Best aftermarket performance from 2005 to 2007

Differentiated origination and execution in both financing and M&A


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2

Better Information Leads to Better Advice

Differentiated Execution

Equity Issuance

Technology validation

Proprietary investor targeting

Sales force education

Buyer due diligence during transaction

M&A Advisory Services

Proprietary idea generation

Proprietary opportunity assessment/due diligence

Sophisticated domain expertise

After-market Support

Institutional InvestorRankings#1 Ranked Equity Research#1 Ranked Healthcare Sales Force

Proprietary investor forums withphysicians and industry experts

Unique diversity of MEDACorpeducation forums

Proprietary Domain Knowledge

26,000 healthcare experts

Physician & thought leaders

Community physicians

Academic and clinical researchers

Regulatory and reimbursement experts

2,500 experts exclusive to our Firm

Broad healthcare footprint

55 clinical specialties

21 basic sciences

20 business specialties

Banking and Investor Client Focus

Internal team of healthcare expertsidentify, analyze, and share industrytrends with institutional investors andbanking clients


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3

Leadership in Healthcare Investment Banking

Note: Includes all 2007 life sciences equity transactions greater than $15MM; Full credit to all managers.

Success Across All Product Types in 2007Most Active in Equity Capital Raising During 2007

9 IPOsMost in the industry

Leerink IPOs averaged 19% returnvs. Non-Leerink average of 0%

8 Follow-onsRaised in excess of $1.6B

9 PIPEs/RDOsLed 5 deals with aggregate value $213.4mm

M&A

First healthcare company sold to SPAC

6 Lead Managed Private Placements

Aggregate value $174MM

Multiple Repeat Clients

($ in millions)

Deals $ Raised

Avg. $

Raised

Leerink Swann 25 2,605 104Lazard 23 1,188 52

Piper Jaffray 21 2,264 108

JPMorgan 20 2,189 109

UBS 20 2,697 135

CIBC 19 1,304 69

Banc of America 16 2,782 174

Pacific Growth 16 873 55Cowen & Company 15 1,314 88

Jefferies 15 2,254 150
http://chelseatherapeutics.com/index.php


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4

Performance of ourdeals drives investor

confidence

Superior Aftermarket Performance

Note: Includes all life sciences equity transactions greater than $5MM and firms with minimum 30 deals; Full credit to all managers. As of end of 2007.

All Healthcare Deals Since 2005 - 2007Ranked by Post-Deal Performance

($ in millions)

Deals $ Raised

Avg. Aftermarket

Performance

Leerink Swann 57 5,860$ 32.5%

Thomas Weisel 40 3,062 32.3%Merrill Lynch 33 5,669 26.1%

Morgan Stanley 39 6,467 19.4%

UBS 50 5,181 14.5%

Banc of America 45 4,805 11.1%

Piper Jaffray 63 6,299 9.9%

JPMorgan 52 6,318 7.7%

Pacific Growth 42 2,262 3.2%

Jefferies 30 3,048 0.6%

Lazard 58 3,961 (7.2%)

Cowen & Company 79 5,139 (8.0%)

Lehman Brothers 30 2,572 (8.3%)

CIBC 59 3,894 (14.0%)


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5

Best Healthcare Sales Force - 2007 Leading Healthcare Trading

2006Best Healthcare Research - 2007

Top Ranked Institutional Equities Platform

Leerink

Swann

Rank Sector

#1 Biotechnology

#1 Medical Supplies & Devices

#1 Major Pharmaceuticals

#1 Specialty Pharmaceuticals

#1 Healthcare Tech & Dist

Annual survey for Best Boutique

Firmson Wall Street

730 portfolio managers and

analystsat 400 buy-side

institutions voted

Named #1 from 2001-2007in all

major healthcare categories

Prior runners-upinclude: Cowen,

Piper Jaffray, Thomas Weisel,

Lazard, Jefferies, JMP Securities,

Pacific Growth

1. Leerink Swann

2. Bear Stearns

3. Cowen

4. Lehman

5. Merrill Lynch

6. Morgan Stanley7. UBS

8. Citi

9. JPMorgan

10. Banc of America

100% focused on healthcare

23 professionalscovering 600

institutional accounts

Access to MEDACorpduring

transactions and after-market

Unique distributioncapabilities

Influence decisions

Insight into latent demand

Market maker in 500+

healthcare stocks

Leader in creating liquidityforemerging growth companies

Corporate venture services

1. Lehman Brothers

2. Leerink Swann

3. Merrill Lynch

4. Cowen

5. Citigroup

6. Goldman Sachs7. Piper Jaffray

8. Bear Stearns

9. Morgan Stanley

10. UBS
http://www.greenwich.com/WMA/greenwich_home/1,1630,,00.html?rtOrigin=G&vgnvisitor=eKiblaOKog==&vgncontext=


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6

Leerink Swann IPO Performance 2006 - 2007

(US$ in millions, except per share values)

Excellent performance in theafter-market

Strong, consistenttrading support

Filing Data Offering Data Deal Size Post-IPO Stock Price Perf . Trading Rank

Shares Midpoint Shares Price Shares Amt vs 6 Months Since

Filed(1) of Range Amt. Date Offered(1)

Price Amt. vs Mdpt vs Filed Filed After IPO After IPO After IPO IPO

5.0 15.00$ 75.0$ 11/15/07 5.0 8.00$ 40.0$ 53% 100% 53% 8.7% NA NA 5

5.0 15.00 75.0 11/7/07 5.0 10.00 50.0 67% 100% 67% (24.0%) NA NA 3

7.0 15.00 105.0 11/1/07 7.0 14.00 98.0 93% 100% 93% 3.0% NA NA 5

5.8 13.00 74.8 10/10/07 5.8 10.00 57.5 77% 100% 77% (7.0%) NA NA NA

3.8 15.00 56.3 8/2/07 3.8 11.50 43.1 77% 100% 77% 10.8% (3.9%) 5 5

5.4 12.00 64.8 5/24/07 5.4 9.00 48.6 75% 100% 75% (6.2%) 22.2% 3 2

6.7 15.00 100.5 5/15/07 8.4 15.00 125.5 100% 125% 125% (5.5%) 16.9% 7 7

5.8 15.00 86.3 5/10/07 5.0 15.00 75.0 100% 87% 87% 15.7% (5.1%) 3 4

6.0 12.00 72.0 4/26/07 7.0 12.00 84.0 100% 117% 117% 46.1% (0.1%) 3 4

6.3 12.00 75.0 11/15/06 6.3 12.00 75.0 100% 100% 100% (8.8%) 69.8% 7 7

3.5 12.00 42.0 8/3/06 3.5 11.00 38.5 92% 100% 92% (0.4%) 124.3% 8 8

6.0 13.00 78.0 5/5/06 7.1 15.00 106.5 115% 118% 137% (6.6%) (12.3%) 3 3

3.4 16.00 55.0 4/20/06 3.4 10.00 34.4 63% 100% 63% 33.2% 87.4% 4 11

Leerink Swann Mean 67.4$ 85.5% 103.6% 89.3% 4.5% 33.2% 4.8 5.3

IPO's Median 57.5 91.7% 100.0% 87.0% -0.4% 16.9% 4 5.0

6 MonthsOne Month
http://www.targanta.com/http://www.targanta.com/


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7

Life Sciences Capital Markets Overview

Market Performance Healthcare IPOs Total Amount Raised

Mutual Fund Flows Healthcare IPOs Pricing Relative to Range

(US$ in millions)

(US$ in millions) (US$ in millions)

Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08

85

90

95

100

105

110

115

120

Dow Jones Industr ial s S&P 500 N ASDAQ R ussel l 2000

2006 2007Dow Jones Industrials 16.3% 6.4%

S&P 500 13.6% 3.5%NASDAQ Composite 9.5% 9.8%

Russell 2000 17.0% -2.0%

2008-6.7%-7.9%-13.2%-9.1%

$(15,000)

$(10,000)

$(5,000)

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Jan-05

Feb-05

Mar-05

Apr-05

May-05

Jun-05

Jul-05

Aug-05

Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

Apr-06

May-06

Jun-06

Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

# IPOs 5 5 8 7 7 10 2 11 9 11 2 9 1

$271

$329

$446

$318

$567

$814

$1,037

$283

$589

$51

$327

$309

$598

$-

$200

$400

$600

$800

$1,000

Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08

80% 80%

25%

43%

57%

90%

73%

56%

45%50%

78%

100%

20% 20%

75%43%

43%

50%

18%

22% 45%

50%

11%

14%10%

50%

22%

11%9%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08

Priced Below Priced Within Priced Above


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8

Start up Pre-clinical Phase I Phase II Phase III Commercial

Angel

Venture

Private Equity

Strategic Investor

Private Company

Public Company

PIPE Investors

Public Investors

Crossover Investors

Hedge Funds/Structured Finance

Correlation of Stage and Status With Investor Subtype


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9

US$ in millions, except per share Midpoint IPO Valuation Current Performance

Offer Shares of Filing Pre- Post- Market Midpoint / Offer / vs. Russ.

Company Industry Ticker Date Filed Offer Range Price Amount Money Money Price Cap. Pricing Current 2000

MAKO Surgical Medtech MAKO 2/14/08 5.1 5.1 15.00$ 10.00$ 51.0$ 133.4$ 184.4$ 9.55$ 176.1$ (33.3%) (4.5%) (3.1%)Enteromedics Medtech ETRM 11/15/07 5.0 5.5 15.00 8.00 43.9 90.5 134.4 8.56 143.8 (46.7%) 7.0% 16.9%BioForm Medical Medtech BFRM 11/7/07 10.0 11.5 10.00 8.00 92.0 276.8 368.8 5.86 270.1 (20.0%) (26.8%) (16.4%)ARYx Therapeutics Biotech ARYX 11/7/07 5.0 5.0 15.00 10.00 50.0 125.4 175.4 7.75 135.9 (33.3%) (22.5%) (12.1%)Nanosphere Medtech NSPH 11/1/07 7.0 8.1 15.00 14.00 112.7 196.9 309.6 9.80 216.7 (6.7%) (30.0%) (17.5%)Novabay Pharmaceuticals Biotech NBY 10/26/07 5.0 5.0 5.00 4.00 20.0 64.6 84.6 2.85 60.2 (20.0%) (28.8%) (13.4%)Power Medical Interventions Medtech PMII 10/26/07 3.9 4.4 13.00 11.00 48.7 139.5 188.2 13.71 234.5 (15.4%) 24.6% 40.0%TranS1 Medtech TSON 10/17/07 5.5 6.3 13.00 15.00 94.9 199.1 294.0 15.18 297.6 15.4% 1.2% 16.9%Targanta Therapeutics Biotech TARG 10/10/07 5.8 5.8 13.00 10.00 57.5 152.2 209.7 8.63 181.0 (23.1%) (13.7%) 4.0%MAP Pharmaceuticals Spec. Pharma MAPP 10/5/07 5.0 5.8 15.00 12.00 69.0 162.3 231.3 13.94 268.7 (20.0%) 16.2% 33.9%Masimo Corp. Medtech MASI 8/8/07 11.9 13.7 17.00 17.00 233.0 872.4 928.3 32.66 1,783.4 0.0% 92.1% 104.7%Sucampo Pharmaceuticals Spec. Pharma SCMP 8/2/07 3.8 4.3 15.00 11.50 49.6 425.5 468.6 11.05 463.4 (23.3%) (3.9%) 7.4%

Jazz Pharmaceuticals Spec. Pharma JAZZ 6/1/07 6.0 6.0 25.00 18.00 108.0 333.9 441.9 12.27 301.2 (28.0%) (31.8%) (13.3%)Amicus Therapeutics Biotech FOLD 5/31/07 5.0 5.0 15.00 15.00 75.0 258.5 333.5 9.95 223.0 0.0% (33.7%) (15.8%)Helicos Biosciences Medtech HLCS 5/24/07 5.4 5.8 14.00 9.00 52.2 136.1 188.3 11.00 231.7 (35.7%) 22.2% 37.8%Sirtris Pharmaceuticals Biotech SIRT 5/23/07 5.0 6.9 10.00 10.00 69.0 217.9 286.9 11.58 316.3 0.0% 15.8% 32.7%Eurand Spec. Pharma EURX 5/18/07 7.0 7.0 18.00 16.00 112.0 589.7 701.7 13.81 595.9 (11.1%) (13.7%) 1.9%Insulet Medtech PODD 5/15/07 6.7 8.4 15.00 15.00 125.5 269.0 394.5 17.53 453.8 0.0% 16.9% 31.5%Biodel Biotech BIOD 5/10/07 5.0 5.8 15.00 15.00 86.3 216.2 302.4 14.24 319.9 0.0% (5.1%) 10.0%TomoTherapy Medtech TOMO 5/9/07 10.9 11.7 16.00 19.00 223.1 724.8 926.2 14.71 706.0 18.8% (22.6%) (5.9%)NeurogesX Spec. Pharma NGSX 5/2/07 4.0 4.0 14.00 11.00 44.0 93.4 137.4 6.25 108.5 (21.4%) (43.2%) (27.1%)Pharmasset Biotech VRUS 4/27/07 6.0 5.0 13.00 9.00 45.0 139.7 184.7 18.37 375.1 (30.8%) 104.1% 120.3%Orexigen Biotech OREX 4/26/07 6.0 8.1 12.00 12.00 96.6 226.3 322.9 11.99 385.0 0.0% (0.1%) 16.5%SenoRx Medtech SENO 3/29/07 5.5 6.3 12.00 8.00 50.6 75.8 126.4 8.55 147.6 (33.3%) 6.9% 19.8%Rosetta Genomics Medtech ROSG 2/26/07 3.0 4.3 12.00 7.00 30.2 52.6 82.8 4.99 57.7 (41.7%) (28.7%) (13.1%)Optimer Pharmaceuticals Biotech OPTR 2/9/07 5.3 8.1 13.00 7.00 56.4 103.2 159.6 6.53 174.7 (46.2%) (6.7%) 7.1%Accuray Medtech ARAY 2/8/07 13.3 18.4 15.00 18.00 331.2 759.8 947.0 10.51 578.8 20.0% (41.6%) (26.8%)3sBio Biotech SSRX 2/7/07 7.7 7.7 13.00 16.00 123.2 220.4 343.6 7.89 181.4 23.1% (50.7%) (35.9%)

Synta Pharmaceuticals Biotech SNTA 2/6/07 6.0 5.0 15.00 10.00 50.0 288.2 338.2 8.75 310.3 (33.3%) (12.5%) 1.7%Molecular Insight Biotech MIPI 2/2/07 4.7 5.0 15.00 14.00 70.0 275.0 345.0 7.55 184.2 (6.7%) (46.1%) (32.0%)XTENT Medtech XTNT 2/1/07 4.7 4.7 17.00 16.00 75.2 289.5 364.7 7.65 183.4 (5.9%) (52.2%) (38.3%)Oculus Innovative Sciences Medtech OCLS 1/26/07 3.1 3.4 13.00 8.00 26.8 67.2 94.0 5.50 74.8 (38.5%) (31.3%) (19.5%)

2007-2008 Total 2,772.4$

Mean 6.0 6.8 14.16$ 11.98$ 86.6$ 255.5$ 331.2$ 10.91$ 316.9$ (15.5%) (7.6%) 6.7%

Median 5.3 5.8 15.00 11.25 69.0 207.7 298.2 9.88 233.1 (20.0%) (13.1%) 1.8%

2007-2008 Total 674.2$

Mean 5.5 6.3 14.33$ 11.61$ 74.9$ 204.2$ 278.4$ 11.17$ 281.2$ (18.8%) (3.2%) 10.5%

Median 5.4 5.8 15.00 11.50 57.5 196.9 302.4 11.00 231.7 (23.1%) (3.9%) 10.0%Leerink Swann IPOs

Leerink deals shaded gray

Selected Metrics for 2007 IPOs


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10

Biopharma IPO Pricing and Performance

Pricing vs. Initial Filing Range After Market Performance

Most recent IPOs listed at the top

(12.5%)(46.2%)

(27.3%)(53.3%)

(21.4%)(30.0%)

(58.3%)6.7%

(30.0%)(4.5%)

(11.1%)(36.4%)

(21.4%)(23.1%)

0.0%

(18.2%)

(27.3%)

(23.1%)

(33.3%)

(7.1%)

(23.3%)

(16.7%)

8.7%(6.7%)

(46.2%)0.0%

(30.8%)(21.4%)

0.0%(11.1%)

0.0%0.0%

(28.0%)(23.3%)(23.3%)(23.1%)

0.0%(33.3%)

(50.0%)

(40.0%)

(25.0%)

(45.8%)

(8.3%)

(25.0%)

(50.0%)

(53.8%)

(33.3%)

( 65.0% ) (55.0% ) (45.0% ) ( 35.0%) ( 25.0% ) (15.0% ) ( 5.0% ) 5.0% 15.0%

ViaCellFavrilleIcagen

ThresholdAsprevaXenoPort

ALSColey

SunesisAvalon

AccentiaCombinatoRx

SomaxonNucryst

AltusSGX

ValeraAcordaAlexza

TargaceptVanda

NovaceaReplidyne

OsirisTrubion

CadenceAchillionCatalyst

EmergentObagi Medical

AffymaxMolecular Insight

Synta3sBio

OptimerOrexigen

PharmassetNeurogesX

BiodelEurandSirtris

AmicusJazz

SucampoMAP Pharma.

TargantaNovabay Pharma

ARYx

7.3%(73.3%)

(79.3%)(93.4%)

136.4%

(82.0%)(50.0%)

(79.7%)(77.1%)

(67.0%)(28.6%)

(58.8%)(80.5%)

(61.9%)(35.7%)

(18.4%)

(22.0%)(8.7%)

(55.1%)(57.7%)

(81.1%)7.4%

(37.7%)(33.7%)

(58.9%)(45.0%)(43.4%)

46.1%(23.5%)

(46.1%)(12.5%)

(50.7%)(6.7%)

(0.1%)104.1%

(43.2%)(5.1%)

(13.7%)15.8%

(33.7%)(31.8%)

(3.9%)16.2%

(13.7%)(43.0%)

(22.0%)

(110.0%) (60.0%) (10.0%) 40.0% 90.0% 140.0% 190.0%

ViaCellFavrilleIcagen

ThresholdAsprevaXenoPort

ALSColey

SunesisAvalon

AccentiaCombinatoRx

SomaxonNucryst

AltusSGX

ValeraAcordaAlexza

TargaceptVanda

NovaceaReplidyne

OsirisTrubion

CadenceAchillionCatalystEmergent

ObagiAffymax

MolecularSynta3sBio

OptimerOrexigen

PharmassetNeurogesX

BiodelEurandSirtris

AmicusJazz

SucampoMAP Pharma.

TargantaNovabay

ARYx


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11

Recent IPO Characteristics

Shaded column represents companys lead program.

($ in millions)

Therapeutic Pre-money Number of Drug Candidates (1)Company Focus Value Pre-clin. Phase I Phase II Phase III Marketed

ARYx Therapeutics Gastro / Cardio 125.4$ 0 0 3 0 0Novabay Pharmaceuticals Infections 64.6 2 1 0 1 0Targanta Therapeutics Infections 152.2 2 1 1 1 0MAP Pharmaceuticals Pediatric Asthma 162.3 0 1 1 2 0Sucampo Pharmaceuticals Idiopathic constipation 432.7 8 1 1 1 1Jazz Pharmaceuticals Daytime sleepiness 333.9 0 1 1 2 2Amicus Therapeutics Fabry Disease 258.5 2 1 2 0 0Sirtris Pharmaceuticals Diabetes / Aging 217.9 2 0 0 0 0Eurand Allergy 589.7 1 1 0 2 1Biodel Diabetes 216.2 2 0 1 1 0NeurogesX Hepatitis 93.4 0 1 1 1 0Pharmasset Hepatitis 139.7 0 1 1 1 0Orexigen Therapeutics Obesity 226.3 0 0 1 1 0Optimer Pharmaceuticals Anti-infective 103.2 3 1 1 2 03sBio Anemia 220.4 0 0 0 3 6Synta Pharmaceuticals Cancer 288.2 2 0 2 0 0Molecular Insight Cancer - Imaging 275.0 1 1 2 0 0Affymax Anemia 265.3 0 1 1 0 0Obagi Medical Dermatology/Aesthetics 180.9 0 0 0 0 5Emergent Biosolutions Biodefense/Vaccines 280.3 4 3 1 0 1Achillion Pharmaceuticals Anti-virals 119.0 1 1 1 0 0Cadence Pharmaceuticals Pain & Anti-infective 190.3 0 0 0 2 1Trubion Pharmaceuticals Inflammation & Cancer 167.8 2 1 1 0 0Osiris Therapeutics Stem Cells 260.0 0 1 2 1 1Replidyne Anti-infective 219.3 1 1 1 1 NDANovacea Oncology 104.1 0 1 1 1 0Vanda CNS 156.8 0 0 2 2 0Targacept CNS 126.9 1 1 3 0 0Alexza Pharmaceuticals Migraines 137.2 0 3 1 0 0Acorda Therapeutics CNS 77.9 3 0 0 1 1Valera Pharmaceuticals Urology 98.2 2 1 1 1 1Iomai Corp. 83.3 1 2 1 0 0Altus Pharmaceuticals Metabolic Disorders 210.0 2 0 2 0 0SGX Pharmaceuticals Oncology 60.6 1 1 2 2 0

Mean 195.2$ 1.3 0.8 1.1 0.9 0.6


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12

Last Private Financing Step

Pre-Money Post-Money Post-Money Last Private Interval Up ToCompany Low High Price Size Valuation Valuation Valuation (1) Financing (Mos.) Pricing

ARYx Therapeutics $14.00 $16.00 $15.00 $ 50.0 $ 125.4 175.4$ $ 150.0 07-Feb-06 21 0.8x

Novabay Pharmaceuticals 4.00 6.00 4.00 20.0 64.6 84.6 31.6 01-Sep-06 14 2.0x

Targanta Therapeutics 12.00 14.00 10.00 57.5 152.2 209.7 150.0 09-Feb-07 8 1.0x

MAP Pharmaceuticals 14.00 16.00 12.00 69.0 162.3 231.3 171.6 27-Mar-07 6 0.9x

Sucampo Pharmaceuticals 14.00 16.00 11.50 43.1 432.7 468.6 79.0 31-Mar-06 16 5.5x

Jazz Pharmaceuticals 24.00 26.00 18.00 108.0 333.9 441.9 279.9 24-Mar-04 39 1.2x

Amicus Therapeutics 14.00 16.00 15.00 75.0 258.5 333.5 208.4 16-Sep-06 9 1.2x

Sirtris Pharmaceuticals 9.00 11.00 10.00 69.0 217.9 286.9 190.7 23-Jan-07 4 1.1x

Orexigen Therapeutics 11.00 13.00 12.00 96.6 254.6 351.2 149.9 22-Nov-06 5 1.7xOptimer Pharmaceuticals 12.00 14.00 7.00 49.0 103.2 152.2 95.4 29-Jul-05 19 1.1x

Molecular Insight 14.00 16.00 14.00 70.0 275.0 345.0 90.5 14-Apr-05 22 3.0x

Affymax 22.00 24.00 25.00 92.5 265.3 357.8 155.0 15-Jul-05 17 1.7x

Achillion Pharmaceuticals 14.00 16.00 11.50 51.8 119.0 170.8 102.0 16-Dec-05 10 1.2x

Cadence Pharmaceuticals 11.00 13.00 9.00 54.0 198.4 252.4 94.0 21-Feb-06 8 2.1x

Trubion Pharmaceuticals 13.00 15.00 13.00 52.0 167.8 219.8 52.9 14-Jul-04 28 3.2x

Osiris Therapeutics 11.00 13.00 11.00 38.5 258.9 297.4 250.0 15-Jun-05 14 1.0x

Replidyne, Inc. 14.00 16.00 10.00 45.0 219.3 264.3 189.6 08-Sep-05 10 1.2x

Novacea, Inc. 11.00 13.00 6.50 40.6 104.5 145.1 137.6 20-Dec-05 5 0.8x

Vanda Pharmaceuticals 12.00 14.00 10.00 57.5 158.9 216.4 64.7 28-Sep-04 19 2.5x

Targacept, Inc. 11.00 13.00 9.00 45.0 126.9 171.9 125.0 06-Dec-04 16 1.0x

Alexza Pharmaceuticals 10.00 12.00 8.00 44.0 137.2 181.2 118.6 31-Dec-04 14 1.2x

Acorda Therapeutics 11.00 13.00 6.00 33.0 81.3 114.3 132.5 04-Mar-04 24 0.6x

Valera Pharmaceuticals 10.00 12.00 9.00 33.8 98.5 132.3 60.1 16-Aug-04 18 1.6x

Altus Pharmaceuticals 14.00 16.00 15.00 105.0 210.0 315.0 244.9 21-May-04 21 0.9x

SGX Pharmaceuticals 11.00 13.00 6.00 24.0 61.2 85.2 79.6 22-Apr-05 9 0.8x

Mean 1.6xMedian 1.2x

Min 0.6xMax 5.5x

Filing Range

Initial Public Offering

Biopharma IPO Step-Up Analysis

Averagestep-up

from post-money of

last privateto IPO pre-

money


14/20

13

Select Biotech Crossover Rounds

Date Company Business Description Stage Round Amount Val. Investors

10-Jul-07 Light SciencesOncology

Developer of a light-activated treatment for solid tumors P3 B 30.0$ 106.1$ Unnamed

22-May-07 QuatRxPharmaceuticals

Developer of therapeutic compounds for the treatment of endocrine,metabolic, and cardiovascular diseases.

P3 E 44.0 120.0 T. Rowe Price

7-May-07 PortolaPharmaceuticals

Developer of therapeutics for acute and chronic cardiovascular andvascular disease.

P2 C 70.0 W/H Alliance Bernstein LP; Brookside Capital; T. RowePrice; Goldman Sachs; Teachers Private Capital

19-Apr-07 Metabolex Developer of novel therapeutics for the treatment of diabetes andrelated metabolic disorders.

P3 D 32.0 W/H Alliance Bernstein LP; Deerfield Capital Management;T. Rowe Price; Lombard Odier; MPM BioEquities

27-Mar-07 MAP Pharmaceuticals Developer of treatments for respiratory and CNS diseases. P2 D 50.0 121.6 Brookside Capital; Perseus-Soros BioPharmaceuticalFund; D.E. Shaw Group

8-Mar-07 Phenomix Developer of a therapeutic portfolio of kinase and protease inhibitorsfor the treatment of immune disease and metabolic syndrome.

P2 C 55.0 82.7 Baker Brothers; JPMorgan Partners

1-Mar-07 Microbia Developer of drug candidates for the treatment of gastrointestinaldisorders, dyslipidemia, pain, and fungal infections.

P2 F 50.0 W/H Ridgeback Capital; Morgan Stanley; and otherinvestors

9-Feb-07 TargantaTherapeutics

Developer of antibacterial agents. P3 C 70.0 80.0 Brookside Capital

24-Aug-06 ChemoCentryx Developer of orally-administered therapeutics for autoimmunediseases, inflammatory disorders, and cancer.

P2 C 17.7 W/H Jennison Associates; OrbiMed Advisors

16-Aug-06 Tolerx Developer of therapies to treat patients with immune-mediateddiseases.

P2 E 35.6 104.4 FrontPoint Partners

2-Aug-06 Biodel Developer of insulin-based produc ts to treat endocrine disordersincluding diabetes and osteoporosis.

P3 B 21.0 41.2 Great Point Partners; OrbiMed Advisors; VivoVentures

3-Apr-06 MerrimackPharmaceuticals

Discoverer and developer of drugs for the treatment of diseases in theareas of autoimmune disease and cancer.

P2 E 65.0 W/H Jennison Associates; Noonday Asset Management;TPG-Axon

27-Feb-06 Microbia Developer of drug candidates for the treatment of gastrointestinaldisorders, dyslipidemia, pain, and fungal infections.

P2 E 75.0 W/H Sigma Capital; Jennison Associates; MaverickCapital; and other investors

25-Jan-06 MAP Pharmaceuticals Developer of treatments for respiratory and CNS diseases. P2 C 25.3 45.4 Brookside Capital; Perseus-Soros BioPharmaceuticalFund; Pequot Ventures

Crossover investors focus on late-stage differentiated assets when investing in private securities


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Biotech IPO and M&A Activity Summary

Biotech IPOs: 2006 2007 Biotech M&A: 2006 2007

M&A deals under $5 billion.

$3,133

$1,870$2,567

$4,537

$13,937 $14,098

$721

$193

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-070

3

6

9

12

15

$ Volume # Deals

$194.9

$399.8

$299.6

$635.9

$196.5

$49.6$38.5

$286.7

$-

$150

$300

$450

$600

Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-070

1

2

3

4

5

6

7

8

$ Raised # Deals


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Biotech M&A Activity: 2006-2007

Includes deals under $5 billion

($ in US millions) Equity Target Information

Date Purchase Enterprise Financial Info. Lead Product Info.

Announce Target Acquirer Price Value LTM Rev. Cash Stage Indication

2/25/08 Proprius Pharmaceuticals, Inc. Cypress Bioscience, Inc. 37.5 37.5 NA NA P2 Rheumatoid Arthritis, Osteoarthritis

2/20/08 Encysive Pharmaceuticals Inc. Pfizer, Inc. 195.0 195.0 28.6 54.1 Mkt EU Pulmonary Ar terial Hypertension (PAH)

2/3/08 CellGate, Inc. Progen Pharmaceuticals Limited (ASX:PGL) 21.8 21.8 NA NA P1 Cancer

1/22/08 CoGenesys, Inc. Teva Pharmaceutical Industries Ltd. 400.0 400.0 NA NA NA NA (Biotechnology research)

12/24/07 Illumigen Biosciences Cubist Pharmaceuticals 341.5 341.5 NA NA Preclin. Hepatitis C Virus

12/18/07 CovX Pfizer Inc. (NYSE:PFE) NA NA NA NA Preclin. Cancer

12/17/07 PDL BioPharma (IV Busulfex) Otsuka Phamaceutical 200.0 200.0 NA NA Mkt Cancer

12/10/07 MGI Pharma, Inc. Eisai Corporation (N. Amer.) 3,900.0 3,900.0 NA NA Mkt Oncology and acute care

12/5/07 Ester Neurosciences Amarin (NAsdaqNM:AMRN) 32.0 32.0 NA NA Preclin. CNS

11/29/07 Axcan Pharma Inc. (TSX:AXP) TPG Capital 1,293.7 1,123.8 328.7 170.7 Mkt Gastrointestinal

11/26/07 Agensys, Inc. Astellas Pharma US, Inc. 537.0 537.0 NA NA P1 Cancer

11/21/07 Reliant Pharmaceuticals, Inc. GlaxoSmithKline plc (LSE:GSK) 2,751.3 2,784.2 474.9 181.0 Mkt Cardiovascular

11/18/07 Pharmion Corp. (NasdaqNM:PHRM) Celgene Corporation (NasdaqNM:CELG) 2,967.0 2,832.0 255.9 135.0 Mkt Hematology, O ncology

11/15/07 Coley Pharmaceutical Group, Inc. (NasdaqNM:C Pfizer Inc. (NYSE:PFE) 230.3 146.0 31.2 87.8 P3 Cancer

11/12/07 Raven biotechnologies, inc. VaxGen Inc. (OTCPK:VXGN) 38.6 38.6 NA NA P1 Cancer

10/29/07 Bradley Pharmaceuticals Inc. (NYSE:BDY) ALTANA Inc. 429.7 438.4 142.9 53.7 Mkt Spec pharma

10/19/07 Celldex Therapeutics AVANT Immunotherapeutics 66.7 66.7 NA NA Mkt Oncology, autoimmune

10 /17 /0 7 As preva Ph arma ceu tic als Corpo ration (Na sda qN Gal enic a Ho ldin g AG (SW X:GALN) 932 .2 579.0 237.8 353.2 P3 Lupus

10/9/07 Crawford Pharmaceuticals Limited York Pharma plc (AIM:YRK) 35.5 35.5 NA NA Mkt Dermatology

10/9/07 ForSight Newco II QLT (NasdaqNM: QLTI) 42.0 42.0 NA NA P1 Glaucoma

10/5/07 Haptogen Wyeth (NYSE: WYE) NA NA NA NA Disc. Antibodies

10/1/07 ViaCell Inc. (NasdaqNM:VIAC) PerkinElmer Inc. (NYSE:PKI) 300.5 256.6 59.0 44.0 Mkt Stem cell bank

9/27/07 Symphony GenIsis Inc. ISIS Pharmaceuticals Inc. (NasdaqNM:ISIS) 120.0 120.0 NA NA P1 Diabetes

9/24/07 Adnexus Therapeutics Inc. Bristol-Myers Squibb Co. (NYSE:BMY) 553.7 534.9 3.0 22.7 P1 Oncology

9/18/07 Esprit Pharma, Inc. Allergan Inc. (NYSE:AGN) 370.0 370.0 NA NA Mkt. Genitourinary

9/18/07 Renovis Inc. (NasdaqNM:RNVS) Evotec AG (DB:EVT) 145.7 145.7 11.4 85.8 Preclin. Platform / CNS

8/1/07 Brookwood Pharmaceuticals, Inc. SurModics Inc. (NasdaqNM:SRDX) 62.0 62.0 NA NA Prod. Drug delivery

7/25/07 NovaCardia, Inc. Merck & Co. Inc. (NYSE:MRK) 352.7 312.8 NA 42.5 P3 CHF

7/24/07 Systems Medicine, Inc. Cell Therapeutics Inc. (NasdaqNM:CTIC) 35.0 35.0 NA NA P2 Cancer

7/20/07 MedPointe, Inc. Meda AB (OM:MEDA A) 792.9 792.9 243.3 NA Mkt Allergy

7/9/07 JDS Pharmaceuticals, LLC Noven Pharmaceuticals Inc. (NasdaqNM:NOVN) 135.0 135.0 NA NA Mkt Depression, bi-polar disorder

6/6/07 Alantos Pharmaceuticals Holding, Inc. Amgen Inc. (NasdaqNM:AMGN) 300.0 300.0 NA NA P2 Type 2 diabetes

6/4/07 Ilypsa, Inc. Amgen Inc. (NasdaqNM:AMGN) 420.0 420.0 NA NA P2 Chronic kidney disease

5/29/07 Bioenvision Inc. Genzyme Corp. (NasdaqNM:GENZ) 308.2 287.6 14.1 20.6 Mkt Pediatric ALL

5/18/07 Taro Pharmaceutical Industries Ltd. (OTCPK:TARSun Pharmaceutical Industries Ltd. (BSE:524715) 451.1 451.1 297.7 NA Mkt Generic

5/7/07 Evogenix Pty Ltd. (ASX:EGX) Peptech Ltd. (ASX:PTD) 125.0 118.3 1.3 6.7 P1 Antibodies

4/24/07 Alliant Pharmaceuticals, Inc. Sciele Pharma Inc. (NasdaqNM:SCRX) 177.3 177.3 NA NA Mkt Spec Pharma - Inflammation / ADHD

4/9/07 Fermavir Pharmaceuticals Inhibitex Inc. 31.8 31.3 NA 0.5 Preclin Shingles

4/2/07 Therapeutic Human Polyclonals Roche Holding AG 56.5 56.5 NA NA Disc. Antibodies

3/30/07 VIVUS, Inc., EvaMist KV Pharmaceutical Co. 180.0 180.0 NA NA Mkt Estrogen replacement therapy

3/22/07 Morphotek, Inc. Eisai Corporation (N. Amer.) 325.0 325.0 NA NA P1/2 Ovarian cancer

3/12/07 Oxxon Therapeutics, Inc. Oxford BioMedica plc 30.7 30.7 NA NA P2 HBV, Melanoma

3/5/07 Hypnion Eli Lilly & Co. 315.0 315.0 NA NA P2 Insomnia

3/2/07 OPi EUSA 131.7 131.7 NA NA Mkt ALL


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Biotech M&A Activity: 2006-2007

Includes deals under $5 billion

($ in US millions) Equity Target Information

Date Purchase Enterprise Financial Info. Lead Product Info.

Announce Target Acquirer Price Value LTM Rev. Cash Stage Indication

2/22/07 INO Therapeutics, Inc. Ikaria Inc. 670.0 670.0 NA NA NA Chronic lung disease, hypertension

2/20/07 New River Pharmaceuticals Shire 2,600.0 2,600.0 31.9 162.8 Mkt ADHD, Pain

2/1/07 Arrow Therapeutics AstraZeneca 150.0 150.0 NA NA P2 Anti-viral

1/19/07 DOR Biopharma Cell Therapeutics 49.3 49.3 2.5 0.6 P3 GVHD

1/4/07 Syntonix Biogen Idec 40.0 40.0 NA NA P1 Anemia

1/4/07 Caprion Ecopia BioSciences 45.0 45.0 NA NA P2 Cancer

12/20/06 Praecis GSK 54.8 2.0 4.5 63.4 P1 Cancer

12/13/06 Cerexa Forest Laboratories 480.0 480.0 NA NA P2 Anti-bacterial

12/11/06 Valera Indevus 120.0 101.2 19.9 18.9 Mkt Urology

12/11/06 MacroMed Protherics 23.7 23.7 NA NA Mkt Critical Care, Oncology

12/8/06 Domantis GSK 453.2 453.7 NA NA Preclin Immunology

11/19/06 CoTherix Actelion 418.4 334.7 60.0 83.7 Mkt PAH

11/15/06 Cabrellis Pharmaceuticals Pharmion 59.0 59.0 NA NA P2 Cancer

11/9/06 Tanox Genentech 905.0 740.8 60.9 164.2 Mkt Asthma11/5/06 KOS Pharmaceuticals Abbott Laboratories 4,161.0 3,647.4 849.3 543.7 Mkt Cardiovascular

10/31/06 ProlX Pharmaceutiacals Biomira 24.2 24.2 NA NA P1 Cancer

10/30/06 Sirna Therapeutics Merck 1,133.4 1,050.5 4.2 82.8 P2 Acute Macular Degeneration

10/22/06 Connetics Corporation Stiefel Laboratories 712.7 758.4 158.1 244.3 Mkt Dermatology

10/16/06 ICOS Corp. Eli Lilly & Co. 2,287.2 2,459.5 76.7 106.4 Mkt Erectile dysfunction

10/12/06 RxKinetix, Inc. Endo Pharmaceuticals 20.0 20.0 NA NA P2 Oral mucositis, cancer

10/7/06 AnorMed Genzyme Corporation 584.0 542.0 0.2 42.0 P3 Stem Cells

10/2/06 Myogen Gilead 2,500.0 2,311.9 11.5 188.1 P3 PAH

9/29/06 Avidia Amgen 290.0 290.0 NA NA P1 Auto-immune

8/31/06 Avidex MediGene AG 65.8 65.8 NA NA Preclin Rheumatoid arthritis

7/19/06 Corus Pharma Gilead 365.0 365.0 NA NA P3 Cystic fibrosis

6/8/06 TorreyPines Therapeutics Axonyx 83.2 56.2 NA 27.0 P2 Migraine

6/7/06 NeuTec Pharma Plc Novartis 569.0 569.0 NA 44.7 Mkt Fungal & Bacterial Infections

5/31/06 Fumapharm AG Biogen Idec NA NA NA NA Mkt Psoriasis

5/23/06 Alamo Pharmaceuticals Avanir Pharmaceuticals 29.0 29.0 10.0 NA Mkt Schizophrenia5/15/06 Cambridge Antibody Technology AstraZeneca 1,065.5 823.2 93.3 334.0 Mkt Rheumatoid Arthritis

5/9/06 Glycofi, Inc. Merck 400.0 400.0 NA NA Preclin Technology

5/9/06 Abmaxis, Inc. Merck 80.0 80.0 NA NA Preclin Technology

5/3/06 Conforma Therapeutics Biogen Idec 150.0 150.0 NA NA P1 Oncology

4/13/06 Eximias Pharmaceutical Corp. YM Biosciences 33.0 33.0 NA NA P3 Oncology

4/12/06 Infinity Pharmaceuticals Discovery Partners Intl. 141.8 141.8 32.4 80.0 P1 Cancer

4/6/06 Rinat Neuroscience Pfizer 500.0 500.0 NA NA P2 Osteoarthritis pain

4/3/06 Predix Pharmaceuticals EPIX Pharmaceuticals 81.6 81.6 NA NA P3 Anxiety

3/15/06 Vela Pharmaceuticals Pharmos 29.7 29.7 NA NA P2 Irritable Bowel

2/1/06 Resistys, Inc. Avantogen Oncology, Inc. (OTCBB:AVTO) 59.2 NA NA NA NA NA

1/27/06 Montigen Pharmaceuticals SuperGen, Inc. 18.0 18.0 NA NA Preclin Cancer

1/9/06 Micromet AG CancerVax Corporation 86.3 86.3 NA NA P2 Breast Cancer

Mean $294.4 $392.4 $118.5 $114.8Median 45.0 142.4 60.0 81.4


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Reverse Merger Overview

Three flavors:

Private company merger of equals with a public company focused on the same business

Private company merges with a publicly traded shell company (typically with no assets or liabilities)

Private company merges with a distressed public entity that is currently trading based on cash and

debt valuation with little value attributed to the actual business

Newcos management, board of directors and company name is highly influenced byprivate company

Reverse merger allows a private company to go public typically with more control overoutcome than an IPO

The timing, feasibility and costs of a reverse merger process will depend on the profileof the target company (e.g. shell company, distressed company or MOE)

A "reverse merger" is an alternative method by which a private company gains access tothe public equity market:


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Precedent Reverse Merger Transactions

(US$ in millions)Pro Financing Info Current Mkt Val. Price

Announced/ Public / Private Company Equity Enterprise Forma # Days Post Market Current Mkt Val @ Price @ 3M Since 3M SinceCompleted Private Company Description Value Value Ownership Merger Amount Value Price Ann. Ann. Ann. Ann.

Public / Private MergersNov-07 VaxGen 38.1$ (8.7)$ 50% NA NA 22.5$ 0.67$ 38.1$ 1.15$ 44.4$ 0.67$Pending Raven Biotechnologies 50%

Oct-07 AVANT Immunotherapeutics 71.7 64.8 42% NA NA 54.4 0.73 51.9 0.70 97.2 0.55Pending Celldex Therapeutics 58%

Sep-07 Point Therapeutics 37.7 35.4 4% NA NA 5.9 0.19 1.6 0.04 186.7 0.19Pending Dara Biosciences 96%

Jan-07 Corautus Genetics Inc. 19.7 7.7 24% 24 25.0 57.2 2.95 7.3 0.37 25.1 0.34May-07 VIA Pharmaceuticals 73%

Dec-06 Intrabiotics Pharmaceuticals 23.0 (25.4) NA 253 20.0 187.8 14.40 23.0 3.90 31.0 5.25Dec-06 Ardea Biosciences (Valeant Pharma NA

Jun-06 Axonyx 83.2 56.2 38% NA NA 35.4 2.15 134.2 7.60 141.3 8.00Oct-06 TorreyPines Therapeutics 62%

Apr-06 EPIX Pharmaceuticals 81.5 75.3 53% NA NA 106.7 2.87 153.8 3.50 191.1 4.35Aug-06 Predix Pharmaceuticals 47%

Jan-06 CancerVax Corporation 86.3 125.9 33% NA NA 55.7 1.91 211.4 7.40 206.9 7.23May-06 Micromet AG 68%

Dec-05 Xcyte 25.2 6.3 20% 28 45.3 89.3 4.32 31.5 3.20 69.9 7.10Mar-06 Cyclacel 80%

Sep-05 Corgentech (Anesiva) 121.8 181.4 38% NA NA 182.8 4.68 196.1 10.64 184.4 9.98Dec-05 AlgoRx 62%

Sep-05 Maxim Pharmaceuticals 97.9 136.2 28% 34 11.6 67.0 1.37 136.9 1.34 124.8 1.23Jan-06 EpiCept 72%

Mar-05 Epimmune Inc 75.0 37.4 22% NA NA 42.2 2.24 96.1 9.24 62.6 6.02Aug-05 Immuno-Designed Molecules SA 78%

Jun-04 V.I. Technologies Inc 245.7 236.7 55% 0 20.0 35.9 0.59 107.0 10.80 89.5 9.00Mar-05 Panacos Pharmaceuticals, Inc. 45%

Dec-04 Intrac, Inc. 28.5% 1 18.0 163.6 3.28Dec-04 IDDS (Javelin Pharmaceuticals) 71.5%

Mean 77.4$ 71.5$ 68 24.4$ 72.5$ 3.01 91.5$ 4.61 111.9 4.61Median 75.0 56.2 28 20.0 55.7 2.15 96.1 3.50 97.2 5.25

Develops antibody-based therapeutics for

cancer.

Developing small molecules for multiple

indications; pain, diabetes, dermatology

Developing monoclonal antibodytherapeutics to target the immune system

Develops and commercializestherapeutics for pain

Developes novel antibody based drugs totreat cancer

Discovers and develops drugs for the

treatment of HIV.

Develops mechanism targeted drugs for

treatment of cancer

Develops small-molecule GPCRs for

neuro disorders

Developes novel drugs for the treatment

of cancer.

Developing monoclonal antibody

therapeutics for oncology

Develops small molecule drugs for CNSdiseases

Developing small-moleculecompounds for cardiovascular

Develops products for HIV, cancer, and

inflammatory diseases

Develops genomics analysis solutions


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Challenges and Caveats

Match stage to financing source

Dilution less critical than capitalization

Transfer of risk without clear quantum accomplishment doesnt work

Beware the timing of anticipated step-ups in valuation

Public markets are demanding integrated programs and later stage assets

Building for M&A is fruitful with: differentiated discovery/manufacturing,lead program of differentiated capability in unmet need, gap pipeline fillerfor specific situations, commanding IP, demonstrated commercial uptake

Exits are a multi-step process company building and leveraging existingpublic company assets can work in the setting of financing potential andinterest, sponsorship and rational valuation

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