Why Invest in Lifesciences and Biotechnology?

Demographics are compelling

The graying of America - >65 growing at 15%/year and the >85 growing at 40%/year
Demographic shift spells an increase in the demand for pharmaceuticals
1997 US healthcare expenditure =$1,092 B
Drugs account for approximately 10% of Health Care costs but growing
Mergers and patent expirations in big pharma create the need for robust pipelines and need to in license compounds from biotech companies

Drugs make sense

Intervention with therapeutics prevent other more expensive treatments

• Surgeries
• Long term care
• Long hospital stays
• Medical devices
• Psychiatric wards

Drugs enjoy high margins and long product cycles
Functional genomics will produce many new targets

The industry is maturing

125 biotech therapeutics and diagnostics have been approved by the FDA and are on the market

• 600 phase III trials ongoing World Wide
• 321 phase II trials

Several hundred additional compounds are in human clinical trials
Ever-growing percentage of companies becoming profitable and attaining critical mass

Biotech as an investment - what do we look for?

Broad-based proprietary technology platform

• Strong intellectual property position
• Novel technology

Products that address major market opportunities (large unmet needs)
Management team that is scientifically grounded yet practical
Clear strategy for commercialization of products
Attractive valuation on risk/reward basis



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