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Focus: Private and public companies with novel product programs & product platforms
Investments in the biopharmaceutical sector within NLV-III will target companies that are developing products that address clinically important unmet medical needs with competitively differentiated technologies. The Fund will invest across all stages, usually in companies that fit one of two different profiles. The first is companies with clearly differentiated, clinical stage proprietary product programs focused on significant market opportunities, where value can be built around a product(s) by financing it through one or more stages of clinical development, and in some cases to regulatory approval and commercialization. The second are companies with novel product platforms that are at or near the clinical stage with a lead product(s). These companies build value around both the product(s) itself as it advances through clinical development and around the product platform as its utility as a product creation engine is validated through the progress of the lead product(s).

The Fund Managers expect to identify investment opportunities within private or public companies whose primary asset(s) fall within one of the following categories:

• Early and mid-clinical stage product programs targeting a well validated mechanism of action in a disease with significant unmet medical need. The therapeutic areas and specific mechanisms of action will be known to be of high strategic interest to a number of larger biopharmaceutical companies. The target product profiles of the therapeutic product(s) for these assets will have clear points of competitive differentiation around efficacy and/or safety versus available therapeutics (and known clinical stage programs), and the clinical development programs behind them will be designed to provide clear data in support of these. Examples of these types of biopharmaceutical investments in the NLV portfolio are Array BioPharma (NLV-II, NASDAQ: ARRY, oncology, exited at 2.25x), Chimerix (NLV-II, private initially, now public on NASDAQ: CMRX, novel anti-viral therapy), and Versartis (NLV-II, private, novel, long-acting human growth hormone).

• Novel product platforms that offer the potential to target known, and well understood pharmacologic mechanisms of action in entirely new ways, or a product platform that has the potential to open up a field of entirely new pharmacologic mechanisms in diseases with large unmet medical need and rapidly advancing understanding of the underlying biology (e.g., hematologic and solid tumors). These platforms will be supported by validating data that provide strong support for the underlying biological hypotheses, and the companies will be at or approaching the clinical stage with an owned or partnered lead product program. The product platforms will usually have strong evidence of strategic interest from large or mid-sized biopharmaceutical companies through one or more partnerships that have generated non-dilutive capital for the company. Examples of three novel product platform companies in the NLV portfolio are Pearl Therapeutics (NLV-I, private, pulmonology, exited at 2.5x plus milestones), Epizyme (NLV-II, NASDAQ: EPZM, oncology, exited at 2.0x), and Principia (NLV-II, private, immunology & oncology).

• Later development stage and commercial stage, biopharmaceutical investments, where the investment theses will be to create value by funding companies through Phase 3 clinical trials, regulatory approval, and into early commercialization. In some cases, the

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