Swedish-American Life Science Summit 2008

Biotech under Dire Conditions

Aug 20, 2008

Thomas von Koch

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Entrepreneurs with an industrial orientation and a strong will to drive change

Part of the Wallenberg network

Strong record of delivering superior returns to investors over time

Founded in 1994, over €12Bn in capital raised

3 business lines

– Buy-out in Europe and Greater China

– Mezzanine

– Special Opportunities

178 people

13 offices

EQT today: Northern European private equity fund with local knowledge

New York1 Partners3 Other Professionals

Hong Kong2 Partners7 Other Professionals

Helsinki1 Partner6 Other Professionals

Copenhagen 3 Partners5 Other Professionals

Oslo1 Partner2 Other Professionals

Stockholm12 Partners18 Other Professionals

Munich7 Partners14 Other Professionals

Zurich1 Partner

Frankfurt 2 Partners5 Other Professionals

Shanghai3 Professionals

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Approx. 30 divestments (1997 – 2008)Analysis of value creation in all EQT Equity’s exits

% of equity created

5%

46%

Label

32%

17%

Sales growth

Margin expansion

Strategic re-positioning

Debt pay down

Value Driver

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Proof of industrial model

Yearly growth during ownership period in all investments held more than 1 year

Sales13%

Sales13%

EBITDA20%

EBITDA20%

Number of employees

12%

Number of employees

12%

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Opportunities exist across segments, so far EQT has made acquisitions in Medtech mainly

Pharmaceuticals

Large cap pharma

Niche pharma

Biotech

Medtech*

Diagnostic & Monitoring

PI&D, Consumables

& Supplies

Service providers

Primary Acute carePost- sub-acute care

B2B healthcare services (& intermediaries)

Healthcare IT CXOsProduct

distributionPhysician

Practice MgmtDisease

ManagementOther

® 2008 EQT – All Rights ReservedStrictly private and Confidential

”

® 2008 EQT – All Rights ReservedStrictly private and Confidential

50

84 91

155

99

59 45

93

149

235

245

133

27

31

46

90

77

28 35

86

94 77

90

26

0

50

100

150

200

250

300

350

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1H08

US Europe

Private Equity fundraising still strong – albeit slowing down

US

D (

Bill

ion

)

Source: US Data: Private Equity Analyst, Europe Data: EVCADoes not include Real Estate or Fund of Funds

BO = 64%

BO = 90%

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Asset Managers over-allocated to PE

PE Managers performance rapidly deteriorating

Risk/ Reward for asset class in current market not appealing

Fundraising – Dire Future

PE Fund Managers will hold on to their money

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Current financing situation- deal volume and deal count

0

5

10

15

20

25

30

35

40

45

50

0

10

20

30

40

50

60

70

80Q4

Q1

Deal count

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Q2

Q3

Source: Thomson Financial, JP Morgan

Volume (in €bn) Deal count

® 2008 EQT – All Rights ReservedStrictly private and Confidential

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

Debt Market Closed

Very few LBO transactions will be made

® 2008 EQT – All Rights ReservedStrictly private and Confidential

Not a functioning debt market

No exit market available

– IPO closed

– PE semi-closed

– Industrial buyers window closing

Business cycle in decline

Deal Activity Collapsing

® 2008 EQT – All Rights ReservedStrictly private and Confidential

MBA Incorporado Nmas 1 Private Equity 2008 S. Europe 184

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 CapVest 2007 UK & Ireland 347

Casa Reha III HgCapital 2007 Germanic 346

Ultralase 3i 2007 UK & Ireland 254

Integrated Dental Holdings Merrill Lynch 2008 UK & Ireland 427

Active Pharmaceutical Ingredients (API) 3i 2008 Scandinavia 289

Premier Research Group ECI Partners 2008 UK & Ireland 87

Alliance Medical III Dubai International Capital 2007 UK & Ireland 912

Oasis Healthcare Duke Street 2007 UK & Ireland 130

Penn Pharmaceuticals LDC 2007 UK & Ireland 98

Synerlab AXA PE 2007 France 90

During last 18 months 24 major PE deals have been made in European healthcare

MED

TEC

H*

HEA

LTH

CA

RE

PR

OV

IDER

S

PH

AR

MA

, B

IOTEC

H &

O

TH

ER

H

EA

LTH

CA

RE

COMPANY BUYER YEAR REGION DEAL SIZE (€M)

Note: * Medtech includes medical devices and supplies; Includes all LBO transactions involving European targets valued >$75M by European- and foreign-based firms

Source: Bain European Private Equity database

® 2008 EQT – All Rights ReservedStrictly private and Confidential

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. Todayequity returns for taking junior debt risk

Risk Aversion – where will the money go?

® 2008 EQT – All Rights ReservedStrictly private and Confidential

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

Concluding remarks

It will take time until Private Equity is back to normal