Corporate Presentation May 3, 2001 Page 1 Internal Use Only — Not For Redistribution FBR Healthcare Investment Banking HEALTHCARE GROUP January 17, 2003 Nelson Campbell

Biotechnology Group January 17, 2003 Page 2 F R I E D M A N B I L L I N G S R A M S E Y Refinancing Driving Consumer Spending in 2001 and 2002 Key Trends: Interest rates had allowed consumers to extract record amounts of equity via cash-out refinancing. Increase in available cash drove consumer spending despite 6% unemployment. In 2002, the U.S. economy grew 3%, broadly in line with its long-term trend

Biotechnology Group January 17, 2003 Page 3 F R I E D M A N B I L L I N G S R A M S E Y The Case for a Capital Spending Recovery in 2003 Source: The Bank Credit Analyst Outside of telecom, fears of a broad-based capital stock overhang are overstated. In 2002, the value of capital stock registered its first annual decline in the post WWII era. Return on capital is historically high relative to the real cost of capital. Cash flow growth has recovered while capital spending has not.

Biotechnology Group January 17, 2003 Page 4 F R I E D M A N B I L L I N G S R A M S E Y The economy will not slide back into recession Corporate profits will increase Monetary and fiscal policy will remain very stimulative (the Federal Reserve will not raise interest rates any time soon). Looking Forward

Biotechnology Group January 17, 2003 Page 5 F R I E D M A N B I L L I N G S R A M S E Y Liquidity is explosive Many measures of sentiment have reached depressed levels Many indicators suggest the economy and corporate earnings are set to recover in the next six months Stocks led economic rebounds by an average of 4.5 months during the past eight market cycles Most of the Pieces are in Place for a Classic Cyclical Bull Market

Biotechnology Group January 17, 2003 Page 6 F R I E D M A N B I L L I N G S R A M S E Y The State of The Public Market Key Trends: The NASDAQ Composite is down 71.3% since its peak, and down 34.0% since 1/1/99 The NASDAQ Biotech Index is down 67.3% since its peak, but up 18.2% since 1/1/99 Selected Market Indices Source: Bloomberg As of: 1/10/ % -24.5% -4.3% 18.2%

Biotechnology Group January 17, 2003 Page 7 F R I E D M A N B I L L I N G S R A M S E Y Small Cap vs. Large Cap Biotech Stocks Key Trends: When the capital markets are weak, investors prefer large cap biotech stocks to small and middle market biotech firms. The NASDAQ Biotech Index was down 0.6% in 2001, but was down 45% in 2002 and reached its lowest level since 1999 Source: Bloomberg

Biotechnology Group January 17, 2003 Page 8 F R I E D M A N B I L L I N G S R A M S E Y Recent Drug Failures GenVec - BioBypass, Phase II, Missed Primary Endpoint in peripheral arterial disease Cook/Guidant - Missed Primary Endpoint in restenosis Icos Corp. - Pafase, Phase III, Failed to Show Benefit in severe sepsis Eli Lilly - Ruboxistaurin, PhaseII/III, Missed Primary Endpoint for diabetic retinopathy ConjuChem - CJC-1008, Phase II, Missed Primary Endpoint Transkaryotic Therapies - Replagal, Phase III, Missed Primary Endpoint in renal function Neurogen - NGB97-1, Failed to Show Therapeutic Effect in Treatment of Alzheimer’s disease Alexion Pharmaceuticals - Eculizumab, Phase II Missed Primary Endpoint of proteinura reduction Endo Pharmaceuticals - MorphiDex, Phase III, Missed Primary Endpoint Immune Network - Dapsone, Phase II data Not Significant Schering AG - Estradiol, Non-Approvable Letter Transkaryotic Therapies - Replagal, FDA Meeting Delayed IntraBiotics Pharmaceuticals - Iseganan, Missed Primary Endpoint for oral mucositis during chemotherapy Genmab A/S - HuMax-CD4, Missed Primary Endpoint for rheumatoid arthritis Incara Pharmaceuticals - Deligoparin, Phase II/III trial Missed Primary Endpoint 9/02 to Present Source: BioCentury, company reports Date Order - Most Recent First

Biotechnology Group January 17, 2003 Page 9 F R I E D M A N B I L L I N G S R A M S E Y Tapping the Public Market: Biotech IPOs Key Trends: The spike in financing in 2000 was an anomaly In 2000, there were 53 biotechnology IPOs which raised $4.2 billion In 2001, there were 5 biotechnology IPOs which raised $304 million In 2002, there were 4 biotechnology IPO which raised $592 million Biotech IPOs and the Amount Raised Source: CommScan EquiDesk

Biotechnology Group January 17, 2003 Page 10 F R I E D M A N B I L L I N G S R A M S E Y Tapping the Public Market: Biotech Secondaries Key Trends: In 2000, there were 57 biotechnology secondary offerings which raised $16.4 billion In 2001, there were 29 biotechnology secondary offerings which have raised $2.93 billion In 2002, there were 11 biotechnology secondary offerings which raised $544.3 million Biotech Secondaries and the Amount Raised Source: CommScan EquiDesk

Biotechnology Group January 17, 2003 Page 11 F R I E D M A N B I L L I N G S R A M S E Y U.S. Venture Capital - Biotechnology Investments vs. Total Domestic investments onlySource: PWC Money Tree

Biotechnology Group January 17, 2003 Page 12 F R I E D M A N B I L L I N G S R A M S E Y Financing Summary Biotechnology and Specialty Pharmaceutical Investments

Biotechnology Group January 17, 2003 Page 13 F R I E D M A N B I L L I N G S R A M S E Y Recent Mergers and Acquisitions in the Biotech Field Chiron/Matrix Pharmaceutical 1/7/02 $61MM deCODE genetics/MediChem Life Sciences 1/8/02 $83.6MM Collateral Therapeutics/Schering AG3/20/02$140.9MM Tibotec-Virco NV/Johnson & Johnson3/22/02$320MM Ethypharm/Biovail4/1/02$127.8MM Rhein Biotech/Berna Biotech5/1/02$225MM Pharmacia/Pfizer7/15/02$60 Billion Genset/Serono7/16/02$107MM Visible Genetics/Bayer AG7/23/02$61.4MM Variagenics/Hyseq11/11/02$55.9MM Synaptic/H. Lundbeck11/21/02$121MM Triangle/Gilead12/4/02$464MM Zentaris/Aeterna1/1/03$51.7MM Source: MergerStat Acquirer/TargetAnnouncement DateValue Acquirer/Target Announcement Date Value

Biotechnology Group January 17, 2003 Page 14 F R I E D M A N B I L L I N G S R A M S E Y Growth in New Drug Approvals Key Trends: There are currently more than 130 biotechnology drug products and vaccines on the market. There are more than 350 biotechnology drug products and vaccines, targeting more than 200 diseases, in clinical trials. 30% of biotech companies have less than 1 year of cash and equivalents. 22% of biotech companies are trading below cash (i.e., their market caps are below the cash on their balance sheets) The growth in drug approvals from the biotechnology industry points to strong fundamentals. Source: Biotechnology Industry Organization

Biotechnology Group January 17, 2003 Page 15 F R I E D M A N B I L L I N G S R A M S E Y Source: Ernst & Young Annual Biotechnology Industry Reports, Biotechnology Industry Organization Growth in Biotechnology Sales and Revenues Key Trends: With the growth in drug approvals comes increased drug sales and increased leverage in collaboration negotiations