Demy-Colton and EBD Group

Biotech Showcase™ 2019 Investment Trends SurveyDecember 7, 2018

• Survey included 10 questions on biotech industry investment trends for 2019

• Survey was sent to the 2018 list of registered Biotech Showcase attendees

• 80 people provided responses

Survey Overview

Which of the following best describes your professional role?• Venture capitalist• Corporate investor• Investment banker/banker• Private investor• Buy side/sell side research analyst• Executive or upper management of biotech or pharma company• Research and development executive• Government official• Professional service provider• Press and media

QuesBon 1:

Survey Responder Demographics - Chart

Investors, 33.75%

Executives and Upper

Management, 48.75%

Government official, 2.50%

Professional service provider,

11.25%

Press and media, 3.75%2.50%2.50%

5.00%

7.50%

16.25%

Buy side/sell side research analystCorporate Investor

Investment Banker

Private Investor

Venture Capitalist

Based on 80 responses to survey

Survey Responder Demographics - TableRESPONDER OCCUPATION

# OF RESPONDERS

PERCENT OF TOTAL

INVESTOR (Total of subcategories below) 27 33.75%Venture capitalist 13 16.25%Corporate investor 2 2.50%Investment banker/banker 4 5.00%Private investor 6 7.50%Buy side/sell side research analyst 2 2.50%

EXECUTIVE/UPPER MANAGEMENT (Total of subcategories below) 39 48.75%

Executive or upper management of biotech or pharma company 35 43.75%Research and development executive 4 5.00%

Government official 2 2.50%Professional service provider 9 11.25%Press and media 3 3.75%

Total Responders 80

Overall, you expect to see ________ in life science investments in 2019 compared to 2018.• Increase• Decrease• No change

Question 2:

The majority of life science investors and executives expect to see an increase in investment during 2019

20.00%

6.25% 7.50%

37.50%

2.50%

8.75%

7.50%

3.75%

6.25%

0%

10%

20%

30%

40%

50%

60%

70%

Increase Decrease No Change

Investors

Executives

Media, Services, Gov

Sixty percent of life science investors expect to see an increase in investment in 2019

0%

10%

20%

30%

40%

50%

60%

70%

Increase Decrease No Change

Of the following areas, which do you think is poised to have the biggest near-term breakthrough?• Alzheimer’s and CNS diseases• Cell and gene therapy• Immuno-oncology• NASH• RNA therapeutics• Rare and orphan disease• Digital medicine• Other (please specify)

Question 3:

Of the major therapeutic areas, biotech leaders think cell and gene therapy is poised to have biggest breakthrough in 2019

15.00%

6.25%1.25% 2.50% 3.75%

1.25% 2.50% 1.25%

12.50%

11.25%

7.50% 5.00% 2.50%5.00% 1.25% 3.75%

3.75%

5.00%

1.25% 2.50%1.25%

2.50% 1.25%

0%

5%

10%

15%

20%

25%

30%

35%

Cell an

d gene

thera

py

Immun

o-onco

logy

Rare an

d orph

an di

seas

e

Digital

med

icine

Alzheim

er’s a

nd CNSNASH

RNA thera

peuti

csOther

Of the factors listed below, what is the biggest challenge biotech companies face in securing funds in the coming year?• Crowded market or sector• Economic volatility• Inexperienced management team• Lack of achieved milestones• Inability to manage pipeline progression or clinical trials• Other (please specify)

Question 4:

Biggest challenges for securing funds in the coming year are crowded markets, economic volatility, and inexperienced management

0%

5%

10%

15%

20%

25%

Crowded market or sector Economic volatility Inexperiencedmanagement team

Lack of achievedmilestones

Inability to manage pipelineprogression or clinical trials

Other

US Outlook

Do you expect the recent stock market volatility to affect overall biotech investment in 2019?• Yes• No• Unsure

Question 5:

Most biotech leaders expect the stock market volatility to have an overall effect on 2019 investments

20.00%

7.50% 6.25%

27.50%

11.25%10.00%

11.25%

3.75%2.50%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No Unsure

Question 6:

• Boston• Los Angeles• New York• Philadelphia• Raleigh-Durham• San Diego

• San Francisco• Seattle• Other (please specify)

What US city/region will see the biggest percent increase in investment dollars in the biotechnology industry in 2019?

Boston holds #1 seat for predicted influx of investment dollars among the major U.S. cities

8.75%

2.50%

7.50%5.00% 3.75%

1.25%3.75%

1.25%

12.50%

11.25%

8.75%

5.00%5.00%

3.75%1.25%

1.25%

10.00%

2.50%

3.75%

1.25%

0%

5%

10%

15%

20%

25%

30%

35%

Boston San Diego San Francisco New York Other* Los Angeles Philadelphia Raleigh-Durham Seattle

*Texas (3), New Jersey, Maryland

8.75%7.50%

5.00%3.75% 3.75%

2.50%1.25% 1.25%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Boston

San Fr

ancis

co

New York

Other*

Philad

elphia

San D

iego

Los A

ngele

s

Raleigh

-Durh

amSea

ttle

Investors think New York is the next city, after Boston and San Francisco, to see an influx of investment dollars in 2019

*Texas (3), New Jersey, Maryland

Global Outlook

Ques%on 7:

Which region outside the United States will see the biggest percent increase in investment dollars in the biotechnology industry in 2019?• China• UK• Germany• Benelux• Japan• France• Spain• Scandinavia• South Korea• Other*

China predicted to see the biggest percent increase in 2019 biotech investment dollars when compared to other global biotech hot spots

12.50%

5.00% 5.00% 3.75% 2.50% 1.25% 2.50%

25.00%

5.00%2.50% 3.75%

6.25% 2.50%1.25%

1.25%1.25%

7.50%

2.50% 1.25%1.25%

1.25%1.25%

2.50%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

China UK Germany Benelux Japan France Spain Scandinavia S. Korea Other*

*Israel (3), Singapore, Unspecified

Question 8 & 9:

What impact will US/China trade war have on strategy for investment, partnerships, or expansion in China? • Negative Impact• No Impact

Will this trade war have a long-term impact on biotech investments originating from China?• Yes• No• Unsure

While life science leaders do not expect the U.S./China trade warto have an impact on their regional strategies, they do expect it will have long-term impact on investments coming from that region

One third of biotech execuAves think the trade war will have a long term impact on investments originaAng from China

15.15% 13.64% 12.12%

33.33%

7.58%18.18%

0%

10%

20%

30%

40%

50%

60%

Yes No UnsureInvestors Executives

3035

Investor and Executive Responses

Negative Impact No Impact

More than half of biotech leaders think the trade war with China will have no impact on their strategy for partnerships, investments, or expansion in this region

Question 10:

What impact will the UK exit from the EU in March 2019 have on investment in the regions below? • United Kingdom, North America, European Union, Other

Global Markets• Increase• Decrease• No change

When the UK exits from the EU in March, investors expect to see a decrease in investments in the UK while other markets will see an increase or remain unchanged

34%

5%

61%

North America

15%

76%

10%

United Kingdom

41%

30%

30%

European Union

19%

6%

75%

Other Global Markets

Increase Decrease No Change