Swedish-American Life Science Summit 2008 Biotech under Dire

Swedish-American Life Science Summit 2008 Biotech under Dire Conditions Aug 20, 2008 Thomas von Koch

EQT today: Northern European private equity fund with local knowledge Stockholm Entrepreneurs with an industrial orientation and a strong will to drive change Part of the Wallenberg network New York 1 Partners 3 Other Professionals 12 Partners Oslo 18 Other Professionals 1 Partner 2 Other Professionals Helsinki 1 Partner 6 Other Professionals Copenhagen 3 Partners 5 Other Professionals Strong record of delivering superior returns to investors over time Founded in 1994, over € 12 Bn in capital raised 3 business lines – Buy-out in Europe and Greater China – Mezzanine – Special Opportunities Frankfurt 2 Partners 5 Other Professionals Zurich 1 Partner Munich 7 Partners 14 Other Professionals 178 people Shanghai 3 Professionals 13 offices Hong Kong 2 Partners 7 Other Professionals ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Approx. 30 divestments (1997 – 2008) Analysis of value creation in all EQT Equity’s exits % of equity created Value Driver Sales growth Margin expansion 32% Strategic re-positioning 17% Debt pay down Label ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Proof of industrial model Yearly growth during ownership period in all investments held more than 1 year Sales 13% EBITDA 20% Number of employees 12% ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Opportunities exist across segments, so far EQT has made acquisitions in Medtech mainly Pharmaceuticals Large cap pharma Niche pharma Medtech* Biotech Diagnostic & Monitoring PI&D, Consumables & Supplies Service providers Primary Acute care Post- subacute care B 2 B healthcare services (& intermediaries) Healthcare IT CXOs Product distribution Physician Practice Mgmt Disease Management Other ® 2008 EQT – All Rights Reserved Strictly private and Confidential

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USD (Billion) Private Equity fundraising still strong – albeit slowing down BO = 90% BO = 64% Source: US Data: Private Equity Analyst, Europe Data: EVCA Does not include Real Estate or Fund of Funds ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Fundraising – Dire Future Asset Managers over-allocated to PE Managers performance rapidly deteriorating Risk/ Reward for asset class in current market not appealing PE Fund Managers will hold on to their money ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Current financing situation - deal volume and deal count Volume (in €bn) Deal count Q 4 Q 3 Q 2 Q 1 Deal count 1998 1999 2000 2001 Source: Thomson Financial, JP Morgan 2002 2003 2004 2005 2006 2007 2008 ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Debt Market Closed 300 Bn USD of LBO debt “stuck” in banks’ balance sheets All LBO debt trading below nominal value London/ NY bank syndication markets closed – uncertain when/ if they will open Very hard to make transactions in excess of 1 Bn Euro Very few LBO transactions will be made ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Deal Activity Collapsing Not a functioning debt market No exit market available – IPO closed – PE semi-closed – Industrial buyers window closing Business cycle in decline ® 2008 EQT – All Rights Reserved Strictly private and Confidential

During last 18 months 24 major PE deals have been made in European healthcare MEDTECH* COMPANY BUYER YEAR REGION DEAL SIZE (€M) Nmas 1 Private Equity 2008 S. Europe Verna Group II Bank of Scotland 2008 UK & Ireland 72 Molnlycke Health Care III Investor & Morgan Stanley 2007 Scandinavia 2 704 Dako EQT 2007 Scandinavia 943 Laboratorios Indas Vista Capital 2007 S. Europe 361 Barloworld Scientific Nova Capital 2007 UK & Ireland 112 Craegmoor Healthcare II Advent International 2008 UK & Ireland 424 Healthcare Homes Bowmark Capital 2008 UK & Ireland 109 BUPA Hospitals Cinven 2007 UK & Ireland 2 083 USP Hospitales II Cinven 2007 S. Europe 672 Gambro Healthcare Bridgepoint 2007 Scandinavia 596 Medi-Partenaires II LBO France 2007 France 567 Care Principles II Delta Three 2007 UK & Ireland 400 Healthcare at Home II Hutton Collins 2007 UK & Ireland 373 Mater Private II Cap. Vest 2007 UK & Ireland 347 Casa Reha III Hg. Capital 2007 Germanic 346 Ultralase 3 i 2007 UK & Ireland 254 Integrated Dental Holdings HEALTHCARE PROVIDERS MBA Incorporado 184 Merrill Lynch 289 ECI Partners 2008 UK & Ireland 87 Dubai International Capital 2007 UK & Ireland 912 Oasis Healthcare Duke Street 2007 UK & Ireland 130 Penn Pharmaceuticals LDC 2007 UK & Ireland 98 Synerlab PHARMA, BIOTECH & OTHER HEALTHCARE 427 Scandinavia Alliance Medical III Source: UK & Ireland 2008 Premier Research Group Note: 2008 Active Pharmaceutical Ingredients (API) 3 i AXA PE 2007 France 90 * Medtech includes medical devices and supplies; Includes all LBO transactions involving European targets valued >$75 M by European- and foreign-based firms Bain European Private Equity database ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Risk Aversion – where will the money go? Private market almost closed Buy out liquidity low/ Venture Capital worse Trend of PE money becoming public activist money Trend of PE money becoming debt oriented money. Today equity returns for taking junior debt risk ® 2008 EQT – All Rights Reserved Strictly private and Confidential

Concluding remarks Risk aversion at a high point Nuclear melt down in financial markets must be resolved Negative business cycle sentiment must turn Only positive Healthcare is a defensive sector It will take time until Private Equity is back to normal ® 2008 EQT – All Rights Reserved Strictly private and Confidential