CONTRACTION IN HEALTHCARE VENTURE CAPITAL INDUSTRY & CAPITAL MARKET DYNAMICS MORE BROADLY CREATE OPPORTUNITY IN DEVELOPMENT STAGE AND EARLY COMMERCIAL STAGE COMPANIES For the last several decades the healthcare venture capital industry has been the predominant source of early and growth stage funding for smaller, technology focused companies while they pursue product development, regulatory approval, and early commercialization. Over the last several years, there has been a significant contraction in the size of the healthcare venture capital industry in terms of amount of capital available to fund new companies, and the number of active firms investing in new companies. This contraction creates significant opportunity for those funds that remain active, as fewer firms and less capital is translating into less competition for deals. The Fund Managers have benefited from the reduced level of competition during the new investment period for NLV-II, and they believe these conditions will remain in place for at least part of the new investment period of NLV-II. It is too soon to know for sure, but it is likely the industry may have already reached the bottom of this cycle of contraction and could see a re-set that begins to shift the industry to more normalized conditions due to the recent stronger IPO and M&A markets. Life Sciences Venture Fundraising - Dollars Raised ($B) ** Life Sciences Venture Financings — $ Invested ($B) and Count $10.0 $15.0. $A ____________. 700 $78 $78 $12.0 Sal pm $8.0 , 485 500 499 498 500 «so sao 208 422 | aa 422 | ao 7.2 sso 60 $61 gga ; SO 563 . $6.5 | 500 ee | | ee - $2.0 $3.0 | | | | | | 08 2007 2008 “ 2009 7 2010 2011 2012 | *00 2004 2005 2006 2007 2008 2009 2010 2011 2012 re Venture Capital Fundraising Allocated to Life Sciences M=Biopharmaceuticals Mim Therapeutic Medical Devices -®- Deal Count Source: Venture investments data from VentureSource (US. only). Includes therapeutic medical devices only. ** “Life Sciences Venture Fundraisi