Z-CUBE: THE NEXT GENERATION OF LIFE SCIENCES INVESTING

1. Z-CUBE: THE NEXT GENERATION OF LIFE SCIENCES INVESTING “The link between venture capital and research: synergies and collaboration” – INSME-UNIDO Rome, november 30, 2006 Claudio Semeraro – CEO Z-Cube srl

2. Drug industry R&D expenditures greatly outpacing US NCE approvals Number of New Biotech — Big Pharma Collaborations continuously increases Biotech companies start to attract VC capitals at a more advanced development stage than before Significant funding and expertise “gaps” exist for early-stage life science companies Public capital market thresholds for liquidity in both North America and the EU continue to rise Background Themes • These factors demand a unique approach to life sciences investing…

3. High candidate drug failure rate <20% of drugs entering human testing get approved a drug entering phase I in 2000 less likely to reach market than one entering Phase I in 1985 ~50% of phase 3 studies fail due to lack of efficacy The Primary Problem: failure to develop therapeutics addressing unmet needs Source: FDA clinical productivity, ACPS Meeting, October 19, 2004Rosemberg A.

4. Lengthening Clinical Times Have Increased Total Times for Approval of New Biological Drugs Tufts Outlook 2003

5. Current scenario: the pharma innovation gap The increasing R&D costs and the reduced R&D efficiency increase challenges and opportunities for biotech companies Source: Burrill & Co 2006

6. Opportunities and challenges for biotech companies

7. 517 502 425 450 411 384 373 400 350 300 229 228 224 250 180 200 165 150 117 100 69 50 0 2005 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: BioWorld Financial Watch, American Health Consultants, BioCentury, all biotech Number of New Biotech — Big Pharma Collaborations 1993-2005

8. Biogen/Protein Design Labs $800M Alnylam/Novartis $700M Medarex/BMS $530M Pfizer/Coley $505M Shire/New River $500M Plexxikon/Wyeth $372M Nastech/Merck $341M Avanir/Astra Zeneca $340M Cilag/Basilea Pharma $308M Pharmasset/Roche $300M CancerVax/Serono $278M Astex/AstraZeneca $275M GSK/Theravance $252M Sirna/Allergan $250M GenMab/Serono $215M Sucampo/Takeda $210M Novartis/Avanir $210M Selected Biotech Partnering in the Last 12 Months Source: Burrill &Co, 2006, all biotech

9. Medicis/Inamed $2.8B Solvay/Fournier Pharma $2.1B Pfizer/Vicuron $1.7B Shire/TKT $1.6B GSK/ID Biomedical $1.4B Meda/Viatris $1.0B OSI/Eyetech $0.9B Genzyme/BoneCare $0.6B Danisco/Genencor $0.6B Pfizer/Angiosyn $0.5B Protein Design Labs/ESP Pharma $0.5B GSK/Corixa $0.4B Selected Biotech M&A in the Last 12 Months Source: Burrill &Co, 2006, all biotech

10. The VC gap… The challenge of early stage financing

11. Total Biotech VC Funding • In spite of the increase in total biotech VC funding seed investments are down Sources for R&D costs: Pharmaceutical R&D Spending: Pharmaceutical Research and Manufacturers of America, PhRNA Annual Membership Survey, 2003. NIH Budget: National Institutes of Health, Office of Budget, History of Congressional Appropriations, 1992-2003, www.nih.gov 2003

12. Seed investments remain low… …attrition rate in early financing rounds is high with less than 50% of companies progressing to the following round. Attrition in later stages could be influenced by exits Source: DataMonitor, 2006,only lifescience therapeutics

13. Fewer deals at research stage Source: DataMonitor, 2006,only lifescience therapeutics

14. Tech. Platform Hits Leads/Drug candidate Preclinical/clinical development Start-up and seed Growth capital Development capital Mainstream VC Tech Specialists Equity gap Regional VC Angels UCSF* Grants and Matched Equity 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 * University Challenge Seed Funds Source: Modified from European Biopharmaceutical Review, Spring 2006 Funding range £ x 000 The “equity gap”

15. Biotech companies start attracting VC capitals at a more advanced development stage than before Seed investments in early stage companies remain low Early stage companies increasingly need industrial know-how to transform academic innovation into a winning industrial project Increasing need of industrial management Marketable, VC-grade Business Plan Significant funding and expertise “gaps” exist for early-stage life science companies The challenges

16. Early stage investing is far from an exact science Early-stage companies are often comprised of little more than an entrepreneur with an idea Valuations at the “seed stage” are generally driven by factors that by their nature are subjective These include: appraisals of the CEO and management team novelty of the value proposition evaluation of intellectual property expected time-to-market expected path to profitability estimated capital needs and burn rate syndicate risk The VC perspective • Source: Understanding Valuation: A Venture Investor’s Perspective • A. Dana Callow, Jr. Managing General Partner, Boston Millennia Partners • Michael Larsen, Senior Associate, Life Sciences

17. Venture-backed companies need: greater degree of R & D and business development expertise than ever before easier access to seed financing to progress at a stage attractive for VC capitals Z-Cube brings both sets of skills with a pharma company level of competency Filling the gap…

18. Z-Cube: the venture capital arm of Zambon Group • Focus: life sciences and biopharmaceuticals • Main therapeutic areas: respiratory, pain and inflammation, allergy and immunology, anti-infectives • Business activity • Corporate venture capital, investing mainly in early stage. • NewCos to be developed: ~12-15 • Expert support • Strategic Advisory activities for NewCo formation and development • Strategic partnering for NewCo development • Leverage from pharma company expertise in different areas • Location: Bresso (Milan, Italy)

19. THE POTENTIAL OF YOUR RESEARCH, CUBED…..

20. Subsidiary of the Zambon Group focused on identifying and supporting pharma projects with potential to become a NewCo Z-Cube provides skilled project coordinators, capital and an extensive network of experts and relationships to prepare a a validated and marketable business plan with maximum financing potential Z-Cube adds value via the type and quality of R & D and business support provided Z-Cube srl: An Entreprenurial Corporate Incubator

21. Z-Cube integrates competencies for NewCo success • Zambon Group SpA • Competitive Intelligence • Corporate Marketing • Intellectual Property • Finance • Scientific Advisory Board • D. Bellet • E. De Clercq • A. Lanzavecchia • C. Page • Z. Wiesenfeld-Halllin • Advisor • Business advisor (US) Inpharzam Medicinal Chemistry and Biology also devoted to service activities for Drug Optimization Z-CUBE MANAGEMENT TEAM

22. Z-Cube: from Application to NewCo Z-CUBE INCUBATION-DILIGENCE ROAD MAP Max Time to NewCo (months) 0 12 1 3 Pre- screening Business Plan Screening NewCo yes yes Z-Cube Advisory Board Project Coordinator Z-Cube and Zambon Group team CDA Investment partners: - Z-Cube - Financial investors Application Seed investment TWO THREE ONE

23. CAPITAL TO GET UNDERWAY EXPERT SUPPORT GROWTH CAPITAL AND RELATIONSHIP NETWORK Realizing a Project’s Potential

24. The Z-Cube Process for Start-up Companies CAPITAL TO GET UNDERWAY • Z-CUBEwill fund selected projects with a preliminary investment to develop the Business Plan EXPERT SUPPORT • Each project will be assigned aproject coordinatorandprofessional team from Z-Cube/Zambon. This will ensure the development of a validate and marketable business plan with maximum financing potential GROWTH CAPITAL AND RELATIONSHIP NETWORK • Z-Cube designed to invest in and syndicate the early financing rounds for the NewCos • Z-Cube will support the NewCo with growth capital and its relationship network going forward.

25. Target for incubation start The proponent: • Dynamic researchers/team of scientists with a track record of publications in peer reviewed journals • Strong enterpreneurial attitude and willingness to support a NewCo creation OR • Company recently formed The project: • Innovative projects with potential to become a new therapeutic for unmet medical needs with significant commercial potential • Active molecules identified (lead series) and supported by at least: • IP filed • In vitro/in vivo data in relevant models

26. Target for NewCo launch at the end of incubation Company created/consolidated Minimal staff on board or committed (at least CEO) Business plan finalized and approved IP secured Lead project no more than 12-18 months from IND Pipeline: more than a single product/project Z-Cube designed to invest in and syndicate the early financing rounds for the NewCos with other VCs The following characteristics are required:

27. Executive Summary About 1000 projects screened 8 projects selected for sponsorship (5 in Europe, 3 in U.S.) 3 companies launched and financed Elagen Inc. (Boston, USA): HPV replication inhibitors SuppreMol Gmbh (Munich, Germany): soluble Fc receptors PharmEste Srl (Ferrara, Italy): TRPV1 antagonists and others coming soon… Track record

28. Experienced industrial team with on average 20 years expertise in all major therapeutic areas First class competences in R&D, clinical developement, project management, strategic support for regulatory strategy and market positioning, business development Leverage from Zambon Pharma key competences in intellectual property, legal, finance, strategic marketing Leverage from DOIT research centre for technical assessments, drug optimization and library testing Delivering of a marketable VC-grade Business Plan Granting interim management and leading company staffing and financing As lead investor, syndicating capitals from third party investors Z-Cube: Adding value to create business opportunities

29. Filling the gap… Tech. Platform Hits Leads/Drug candidate Preclinical/clinical development Start-up and seed Growth capital Development capital Mainstream VC Z-Cube Regional VC Angels UCSF * Grants and Matched Equity * University Challenge Seed Funds 4,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Source: Modified from European Biopharmaceutical Review, Spring 2006 Funding range £ x 000 A unique approach and an efficacious response to the challenging scenario in life science investing