The IP Investment Bank Seeing Value Others Do Not . . . Creating Value Others Can Not ™

The IP Investment BankSeeing Value Others Do Not . . . Creating Value Others Can Not ™

Merchant Banking – Life Sciences

The IP Investment BankSeeing Value Others Do Not . . . Creating Value Others Can Not

MDB - Overview

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• Founded in 1997 by securities professionals with a “principal vs. agent approach”. MDB more interested in participating in market cap expansion as opposed to simply earning a fee.

• MDB has conceived, founded and funded several start up companies that have achieved market values in excess of $200MM .

• Approach is to see value where others only see risk, then go about “unlocking” that value through innovative thinking and hard work.

• “Rifle Shot vs. Shotgun” approach….deeply understand the opportunities we are backing and provide superior execution as a result of our credibility with investors and industry peers.

• Focus is on fundamental value investors vs. transaction oriented investors that are all too common today

MDB – Overview cont.

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• Private Placements for private and public companies.• Public Offerings: IPOs and secondary public offerings.

Equity Offerings

• Strategic advice on joint ventures, recapitalizations, mergers, corporate restructurings, spin-offs, exchange offers and leveraged buyouts. • Divesting an entire company or a division. • Acquiring businesses or new products.• IP valuation and sale.• Valuation analysis.

Advisory Services

• Refinancing and restructuring.• Recruiting management, directors and scientific advisors.• Refining a business strategy to match a credible financing plan.• Recruiting appropriate legal and accounting professionals.• Developing and communicating a compelling vision of the company for investors.

Merchant Banking/Private Equity

MDB – Overview cont.

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• Institutional equity research.• IP based research through PatentVest.• Institutional research road shows.

Research

• Active aftermarket support.• Relationships with quality emerging growth investors.• Experienced traders.• Equity and fixed income sales & trading.

Capital Markets

• Santa Monica, CA – Headquarters• New York City• San Francisco / Sacramento• Austin, TX• Managua (Nicaragua)

Offices

BIOGRAPHIES

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• Co-founder of MDB Capital.• Over 17 years experience in small company investment banking.• Focuses on corporate finance and capital formation for growth-oriented companies.• Experience includes all phases of corporate finance from the completion of initial pubic offerings, secondary offerings, PIPEs and strategic consulting. • MDB’s clients have included companies as varied as biotechnology, medical products, entertainment and nutritional supplements.

Christopher A. Marlett – CEO

Other Experience• Managing Director with Laidlaw Equities, an investment firm focused on financing small capitalization growth companies• Director of several public companies

Education• Bachelors of Science Degree in Finance from the University of Southern California

BIOGRAPHIES

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• Over 20 years of institutional research, equity capital markets and investment banking experience; joined MDB in August 2005• Co-founder of The Analytiq Group (2002-2005)

Peter J. Conley - Managing Director

• Focus on intellectual property analysis of emerging and enabling technologies• Ranked in Top 10 from over 100 brokerage firms by Investars & Integrity Research Associates, research utilized by majority of the Global Investor 100

• Co-founder of E*Offering, the investment bank of E*Trade (1999-2000)• Head of Equity Capital Markets, IDD #1 Online Investment Bank 1999-2000.• Involved in 1 out of 2 Internet IPOs, underwriting over $3 billion for 132 companies; played integral role in several of Wall Street’s largest offerings including $5.8 bln UPS IPO, $660mm Phone.com, $600mm CarsDirect mezzanine plus innovative underwritings like $84mm RedHat (affinity IPO), $78mm First Sierra (largest online deal), $84mm Sina (1st China IPO) among others.

• Cruttenden Roth / Roth Capital Partners (1991-1998)• Started firm’s institutional equity business in 1991.• Head of Institutional Equity Sales; Member Executive, Research & Capital Commitment Committees.• IDD #1 Small-Cap Investment Bank (1994-1997), financed over 100 companies raising over $1.6 billion

• Lehman Brothers (1988-1991)• Vice-President, Private Client Services Group

RESEARCH

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• Provide insightful, independent and detailed research.

Strategy

• Intellectual property portfolios that position them to lead their industry into the future

• Value not yet recognized or understood by the investment community – where MDB’s deep technical expertise allows early recognition of value, catalyzing future exponential market growth

• Highlight market misconceptions and dispel them, uncovering opportunities to achieve significant, sustained performance results.

• Distribute through Bloomberg Professional, Reuters/Multex, Thomson First Call, and Capital IQ.

• Identify companies with:

RESEARCH – Life Sciences

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Akesis (AKES): Development of organic vanadium for diabetesAllos Therapeutics (ALTH): Novel, next generation anti-folate for oncologyBioMarin Pharmaceuticals (BMRN): Enzyme-replacement therapy for inherited lysosomal storage diseaseCaliper Life Sciences (CALP): Life sciences instruments, reagents, softwareClarient Diagnostics (CLRT): Cancer diagnosticsCuris (CRIS): Small-molecule modulators of cell signaling pathways involved in disease. Partnered with Genentech.Dendreon (DNDN): Autologous dendritic cell cancer vaccine for prostate cancer under FDA review processEmisphere Technologies (EMIS): Oral drug delivery of injected protein-based therapeutics and optimization of current oral drug deliveryEncysive Therapeutics (ENCY, acquired by Pfizer): Development of small-molecule drugs targeted for pulmonary arterial hypertensionEyetech (EYET, acquired by OSI Pharma): Developed Macugen for age-related macular degeneration (AMD).

The individual members of the MDB Life Sciences team have written research on numerous companies, including, but not limited to, the following:

RESEARCH cont.

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Genaera Corporation (GENR): Development of PTP-1B inhibitor for obesity and diabetes, antibody to IL-9 partnered with MedImmune/Astra ZenecaIdera Therapeutics (IDRA): Leader in toll-like receptor drug development platform for cancer, infectious disease, autoimmunity. Partnered with Merck, Merck KGa, NovartisMankind Therapeutics (MNKD): Inhaled insulin developmentMaxygen (MAXY): Optimized protein therapeutics, proprietary MolecularBreeding directed evolution technologies and protein modification to improve on existing protein drugsMethylGene (MYG.TO): Novel inhibitors HDAC inhibitors for oncology and fungal disease, emerging c-Met inhibitor program for oncology.Opexa Therapeutics (OPXA): Autologous cell therapy for multiple sclerosis – based on re-aligning the TH1/TH2 balance and controlling self-directed T-cells.Palatin Technologies (PTN): Melanocortin-receptor and peptide based therapeutics for heart failure, sexual dysfunction and obesity, Partnered with Astra ZenecaPraecis Pharmaceuticals (PRCS, acquired by Glaxo SmithKline): Gonadotropin antagonist for prostate cancer; small-molecule drug discovery platformStaar Surgical (STAAR): Surgical vision correction products


RESEARCH cont.

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Supergen (SUPG): Oncology pipeline with focused on kinase inhibitors and DNA methyltransferase inhibitors and other cell signaling inhibitorsSynvista Therapeutics (SYI): Diagnostic for assessing the cardiovascular complications of diabetes, inhibitors of advanced glycation end-products (AGE) for cardiovascular diseaseThermogenesis (KOOL): Blood processing and wound management, cord blood storageVioQuest Therapeutics (VQPH): Tumor cell signaling targeted cancer therapy


Examples of MDB’s technology assessment and biotechnology industry expertise follow…

RESEARCH – CASE STUDY

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Technology assessment and valuation of toll-like receptor drug discovery platform revealed superiority over competition. Elucidated why IDRA was superior to competing technologies and communicated investment thesis to sophisticated institutional investors that resulted in a 3X increase in market value within 15 months

Idera Pharmaceuticals (IDRA)

• Intense due-diligence to understand the nuanced medicinal chemistry and structure-activity relationships between Toll-like Receptors (TLR) and agonist/antagonist as therapeutics

• Unlike IDRA, competing TLR development technologies understood TLR 7/8/9 biology but not the chemistry and structure-activity relationship between TLR 7/8/9 and their oligonucleotide-based agonist/antagonist

• Notably, the competition has failed (e.g. Coley, Dynavax, Anadys), while Idera evolved as the leader inking 3 successful big Pharma partnerships with Merck, Novartis and Merck KGa.

• Of some surprise is Deerfield Management’s (a $1.5B healthcare dedicated fund) up to $30M investment in Dynavax’s TLR9 allergy program, when it was clear to us that Dynavax’s TLR9 agonist was poorly engineered to bind its target and headed for failure.

• We also found Coley’s lack of understanding of the structure activity relationship of TLRs and their modulators contributed to the failure of its hepatitis C program

While competitors ran into development failures, IDRA prospered, inking 3 lucrative Big Pharma partnerships.


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Intellectual property (IP) analysis to determine if MAXY’s optimized protein G-CSF has distinct IP from Amgen’s currently marketed version, Neulasta.

Maxygen (MAXY)

• Intellectual Property (IP) analysis: Does a novel, optimized G-CSF (MAXY-G34) under development by Maxygen (MAXY) have distinct IP from Amgen’s G-CSF (Neulasta, $3B in annual sales)

Our review of the IP revealed that MAXY’s optimized G-CSF is distinct from Amgen’s Neulasta at several sites in the amino acid sequence and has novel PEGylation sites that

are outside of AMGN patents.

• IP analysis involved an extensive review of the patent landscape of MAXY-G34 versus Neulasta.

• Specifically, MAXY-G34 contains amino acid substitutions at lysine residues 16, 34, and 40 which are replaced with arginines, preventing the PEGylation of these sites. New lysine residues are introduced at positions 105 and 159 by amino acid substitutions, resulting in the addition of two novel sites available for PEGylation.

• Analysis affirmed that MAXY G-34 is distinct from Amgen’s Neulasta and outside of the IP scope of Neulasta i.e. MAXY’s optimized G-CSF was distinct from the wild type G-CSF variants to which Amgen’s IP had claim. MAXY-G-34 is currently in Phase 2 development


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MDB understood early the potential of a novel anti-folate with mechanistic advantages over current anti-folates in the treatment of various cancers. Presented and communicated investment thesis to investors.

Allos Therapeutics (ALTH)

Subsequent to our research, institutional investors, including Warburg Pincus and Baker Brothers took large positions. ALTH increased in market cap from $65M to almost

$700M

• ALTH is developing a novel anti-folate (PDX) with improved membrane transport and polyglutamylation in tumor cells.

• Crucial to the investment thesis was an understanding of the mechanistic advantages of PDX at several pivotal points in the folic acid metabolism pathway – transport into the cell, inhibition of crucial enzymes in folic acid metabolism, and longer retention in the cell. Furthermore, PDX was effective in a niche refractory leukemia for which there was no available therapy that provided an accelerated path for regulatory approval – a registration, single-arm Phase 2 trial.

• Akin to another anti-folate, Alimta, that was first approved for mesothelioma but then gained approval for non-small cell lung cancer to expand its markets, PDX has similar prospects and has several advantages over Alimta.


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Assessed the feasibility of collagen coated stentsPrivate Company

Advised management and shareholders that collagen's inherent thrombogenicity and poor drug delivery profile does not make it suitable as a stent coat. Company dropped

plans to pursue program.

• Consulting study undertaken to determine the potential of collagen and/or other extracellular matrix components purified from fibroblast culture, as a coating for stents used in vascular procedures, to reduce the incidence of late restenosis.

• The likelihood of successfully entering into a commercial collaboration with a stent manufacturer, with the data set available, was low.

Published a comprehensive, proprietary due-diligence analysis report based on technology assessment, primary research with key opinion leaders and industry experts.


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Therapeutic Workshop – Invited to organize and moderate therapeutic panel at BIO CEO Investor Conference, New York, NY, February 2008

“Non-Cancer Immunotherapy”

• While therapeutic cancer vaccines and immunotherapy approaches have met with consistent failure over the last decade, non-cancer based immunotherapy has continued to make progress.

• Panelists included: Richard Furie, MD., Chief, Division of Rheumatology and Allergy-Clinical Immunology, North Shore LIJ Health System, Associate Professor of Medicine, NYU School of Medicine; Charles Nicolette, Ph.D., Chief Scientific Officer, Research and Development, Argos Therapeutics; Sudhir Agrawal, D. Phil. Chief Executive Officer & Chief Scientific Officer, Idera Pharmaceuticals; Eldon R. Smith, MD, Senior Vice President, Scientific Affairs Chief Medical Officer, Vasogen.


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Business Panel - Invited to organize and moderate business panel at BIO Investor Forum, San Francisco, October 2007

“Recognizing Biotech Turnaround Investments”

• Focus on the performance of biotech blow-ups and the impressive turnarounds that have rewarded new investors.

• Panelists included: Robert Karr, MD., President, Idera Pharmaceuticals; Jerry McMahon, PhD., Chairman and Chief Executive Officer Poniard Pharmaceuticals; Selena Chaisson, MD., Director of Healthcare Investments, Bailard; Oleg Nodelman, Portfolio Manager, Biotechnology Value Fund

MERGERS AND ACQUISITIONS

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MDB’s experience goes well beyond conventional investment banking to include hands-on senior corporate management and

governance, clinical practice, and the founding of several companies. This has enabled us to develop extensive industry

contacts and unparalleled expertise.


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The individual members of the MDB team have participated in numerous transactions, including, but not limited to, the following:

M&A Experience

• Botswinger Strasse, GmbH (Acquisition) • Climo, S.A. (Acquisition)• Dental Division of Howmedica Inc. (Sale)• Dr. Hammer & Co., GmbH (Sale)• Holgrath Corporation (Sale)• Hollis Eden (HEPH) (Merger with Initial Acquisition Corp.)• Howmedica Inc. (Sale)• Industrias Faimon, S.A. (Acquisition)• Jaquet Orthopedie (Acquisition)• Leibinger, GmbH (Acquisition) • Leibinger, Inc. (Acquisition)• Lipid Sciences, Inc. (Merger with NZ Corp.)


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The individual members of the MDB team have participated in numerous transactions, including, but not limited to, the following:

M&A Experience

• Medivation, Inc (Merger into Orion Acquisition Corp)• Norian Corporation (Technology Licensing and Equity Investment)• Orthovita, Inc. (Technology Licensing and Equity Investment)• The Glass Group, Inc. (Purchase of molded glass operations from Wheaton USA)• Unidental Holdings Ltd. (Acquisition)• United Ostomy Division of Howmedica Inc. (Sale)• Valleylab Inc. (Sale)• VirnetX Inc. (Founding and Equity Investment)• VirnetX Inc. (Merger into PASW, Inc. / Now VirnetX Holding Corp. (AMEX: VHC))

TRANSACTION - CASE STUDY

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The IP Investment BankSeeing Value Others Do Not… Creating Value Others Can Not ™

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Santa Monica, Ca401 Wilshire BoulevardSuite 1020Santa Monica, CA 90401p 310.526.5000f 310.526.5020

New York Office575 Madison AvenueSuite 1006New York, NY 10022p 310.526.5018f 917.591.2174

www.mdb.com

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The IP Investment Bank Seeing Value Others Do Not . . . Creating Value Others Can Not ™