Accelerator Overview By Carl Weissman

1. 6/20/2011

2. 6/20/2011 Overview: Accelerator Mission: Efficient and disciplined Identification Evaluation Capitalization; and, Development of emerging biotechnologies Focus: Quality of deals Capital efficiency Bandwidth efficiency Milestoneachievement Path: Provide key Resources Leverage unique Sources

3. 6/20/2011 Institute for Systems Biology (ISB) Lee Hood ARCH Venture Partners Steve Gillis OVP Venture Partners Chad Waite, Carl Weissman Amgen Ventures Janis Naeve, Andrew Gengos PPD, Inc. Fred Eshelman WRF Capital Thong Le Alexandria Real Estate Equities Joel Marcus Accelerator Stakeholders

4. 6/20/2011 Accelerator: Summary of Highlights Ten investments since 2003 Diverse portfolio – multiple therapeutic areas and clinical diagnostics >$187M raised to back Accelerator companies >$35M in Series A investments in first ten companies $7.9M to expand activities in early successes Spaltudaq: $2.9M Series A-2 Allozyne: $3.0M Convertible Note Seredigm: $2.0M ($2.0M from Accelerator insiders) – June 2008 $144M in Series B investments in four graduates VLST: $55M ($34M from Accelerator insiders) – June 2006 Spaltudaq: $29M ($14M from Accelerator insiders) – March 2007 Allozyne: $30M ($30M from Accelerator insiders) – October 2007 Integrated Diagnostics: $30M (new investors) – August 2009

5. 6/20/2011 Accelerator: Summary of Highlights $44.3M Committed for Investments $22.5M committed in Accelerator III (7/2007 - $13.9M invested) $11.8M committed in Accelerator II (11/2004 – fully invested) $10.0M committed in Accelerator I (5/2003 – fully invested) Capital Efficiency Maintained low operational burn Push technologies/companies further on fewer $’s Bandwidth Efficiency Multiple investments for the effort of one One management team with whom to interact Proprietary Dealflow Of the ten deals, only one (Allozyne) was shopped extensively in the venture community

6. 6/20/2011 Accelerator: Summary of Highlights

7. 6/20/2011 Sources World-class sources of proprietary deal flow unmatched in access to the most exciting emerging biotechnologies Four primary categories of Sources ISB technology Referenced by ISB Referenced by Investors Accelerator Proprietary deal flow Of the ten investments made through Accelerator, only one (Allozyne) was widely seen in the venture community

8. 6/20/2011 Sources: ISB Lee Hood – President & Co-Founder Founder of Integrative Diagnostics Founded or Co-founded: Integrative Diagnostics Applied Biosystems SyStemix Darwin Rosetta Inpharmatics World Class Faculty Co-founders RuediAebersold Alan Aderem Up-and-coming young faculty Prolific generator of commercial opportunities Since founding in 1999, has spun out or formed: Cytopeia Macrogenics Nanostring Integrative Diagnostics (InDi)

9. 6/20/2011 Sources: Referenced by ISB “Moths to a porch lamp” Lee, Ruedi, Alan, et. al. attract entrepreneurs looking for: Advice/Consulting Service on their SAB Introductions to VC’s Prior to Accelerator, no formal place to direct these emerging opportunities

10. 6/20/2011 Sources: Referenced by Investors “Too Early” Biotech venture firms still see high quality early-stage opportunities Accelerator syndicate has global reach Top-tier investors Extensive networks

11. 6/20/2011 Sources: Accelerator “Push” More than 600 unsolicited business plans since 2003 inception “Pull” Accelerator management is well connected in biotech and venture capital communities

12. 6/20/2011 Resources In one entity, all of the resources necessary to give emerging biotechnology start-ups the greatest likelihood of success: Scientific Expertise & Technical Support Venture Capital Management Facility

13. 6/20/2011 Resources: Scientific Expertise & Support ISB World class faculty and staff available to assist in: Identification Evaluation Development Core Facilities Excess capacity in expert-operated core facilities available to Accelerator companies Investor Network Cadre of scientific advisors and other connections to thought leaders in virtually any area of interest

14. 6/20/2011 Resources: Venture Capital Not just $’s, but value added $’s Proven track record for building great companies Extensive network within pharma and biotech to make appropriate partnership introductions Extensive network within venture capital to enable high quality syndication in future rounds Deep pockets to enable participation all the way to the finish line

15. 6/20/2011 Resources: Management All non-technical functions including: Administration Business Development Finance Human Resources Operations Pre-negotiated contracts with key service providers: Audit/Tax – PricewaterhouseCoopers Facility Maintenance – Alexandria Real Estate Equities Insurance – AH&T, Inc. Legal Corporate counsel – Foster Pepper, Goodwin Procter, Fenwick Intellectual Property – Seed IP Network Administration – IS Outsource Professional Development – Nofsinger Group 401k – Acumen Financial

16. 6/20/2011 Resources: Facility Ideal Location 1616 Eastlake Avenue E., Seattle, WA 98102 5-10 minute drive to the ISB Emerging South Lake Union biotech hub Thoughtful Design Efficient use of 18,000 sf of space to: Foster synergistic interactions between companies Protect proprietary nature of individual technologies Flexibly adapt to changing space requirements Eliminate start-up lag time Designed to enable companies to do science on Day 1

17. 6/20/2011 Accelerator Candidates Leading-edge biotechnology which would benefit from access to Accelerator Resources: ISB Venture Capital Management Facility “Too Early” Technology not sufficiently developed to attract significant top-tier venture capital independently Milestones within reach Identifiable fundable Milestones Clear R&D Plan to reach Milestones Timeline and Budget that relate to that Plan Driven Innovators, brilliant Innovations “Old School” technology-based investment

18. 6/20/2011 Accelerator: Investment Process Rigorous technical and IP due diligence Tap into world leading scientific and industrial experts at ISB and network of scientific advisors affiliated with the Investors Utilize Seed IP, successful boutique IP firm in Seattle, to provide IP due diligence Satisfy investment criteria of all Accelerator Investors Milestone-based investments Identify financeable Milestones Structure R&D plan to fit milestones Build budget & timelines to match R&D plan Standard Series A Preferred Stock investments with customary terms

19. 6/20/2011 Summary Vehicle for Emerging Biotech Investment Capital efficient Bandwidth efficient Focused development (milestone achievement) Disciplined assessment World-Class Stakeholders Top-tier syndicate Anchored by Institute for Systems Biology Track Record >$44M committed for investments ($35M invested) >$187M invested in Accelerator Companies

20. Accelerator: Then and Now… 2003 Today Biotech incubators miserable failures $10M committed 0 companies Accelerator (one of a kind) Accelerator working (others in the making) $187M invested 10 companies Accelerators 6/20/2011