January 3, 2003 Kevin Rakin President and Chief Executive Officer Kevin Rakin President and Chief Executive Officer Economic Summit and Outlook 2003

CT'S Bioscience Cluster Continues to Have Impressive Economic Impact…. Connecticut biotechnology companies raised nearly $557M in private and public capital in 2001 Total 2001 R&D investments of $3.6B including biotechnology R&D of $277M Employment level in 2001 increased to 16,500 jobs with average R&D annual salary at ~ $63,000 Seventh Annual Economic Report of Connecticut United for Research Excellence (CURE), Connecticut's BioScience Cluster

Results from the Biotechnology Sector….  > 325M people worldwide have been helped by >130 drugs and vaccines (U.S. FDA approved)  70 % of medicines on the market were approved in the last 6 yrs  > 350 drug products and vaccines currently in clinical trials for > 200 diseases, incl. cancers, Alzheimer's disease, heart disease, diabetes, multiple sclerosis, AIDS and arthritis  Biotechnology is responsible for hundreds of medical diagnostic tests Source:BIO

 Total 1,457 (342 are publicly held)  Total value $224B as of early May 2002  Have > tripled in size since 1992, with revenues increasing from $8B in 1992 to $27.6B in 2001  Currently employ 179,000 people; that's more than those employed by the toy and sporting goods industries  Spent $15.6B on R&D in 2001 Source:BIO Some Interesting Statistics… US Biotech Companies

U.S. Biotech Revenues,

*Projections from – avg. of analyst est. Source:Zacks Investment Research; Lehman Bro.; PWC Projected EPS Growth Rates*Productivity Requirements NCEs per year Historical Requirement fold increase in NCEs Pharma needs product … Pfizer Pharmacia Schering Aventis J&J BMS Merck Novartis AstraZeneca GSK S&P 500

… increasing collaborations with innovative life science companies … Source: Lehman Brothers; Recombinant Capital Number of Pharma Collaborations in 1995 and

Source:Signals (Recombinant Capital) … and driving biotech deal revenue Biotech Deal Revenue from Pharma Millions CAGR %

Source: NIH NIH Funding Millions NIH funding provides critical support for research activities NIH funding also critical for funding seed/early- stage companies NIH funding fuels growth of new enterprises …

$ Dana-Farber Cancer Institute $ Boston University $ Brigham and Women’s Hospital $ Massachusetts General Hospital $ Harvard University Total NIH Support (2000, millions) Research Grants (2000) Research Institution … at major research institutions … Source:NIH Yale University $

*Includes private and public companies Source:Ernst & Young, 2001 … creating a global center of commercial biotech development Number of Companies by Region* % = 1,379 Companies

U.S. Biotech IPOs

Public Offerings (Public Companies) Private Offerings (Public Companies) Venture Investments (Private Companies) est. Source:Signals (Recombinant Capital) … VC investing has remained consistent … Equity Investments in Life Sciences Billions

Recovery of life science sector may occur in 2003 or 2004 … Life science investing has been cyclical with each cycle lasting 3-4 years Biotechnology industry has endured several Wall Street slumps over its 20-year history - the overall trends however, have been positive resulting in a new peak

In Summary  The biotech sector is a major U.S. industry  Cluster has critical mass in Connnecticut  Drivers exist for continued growth: –Pharma needs biotech for new products and revenue growth –NIH Funding fuels early stage research –Private Investment in the biotech sector continues  Capital markets should improve 2003/04: –Emerging from bottom of the cycle –Companies are becoming more commercially oriented

From Genomics to Drugs Personalized Medicine From Genomics™