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Fund will seek to fund companies much later into commercialization to the point of sustainable profitability. These investments will be into private or small capitalization public companies in situations where the Fund Managers believe that the key risk inflection and the period of greatest value creation will be around regulatory approval and demonstration of commercial attractiveness of the product. These investments will focus on products where the level of clinical and regulatory risk is relatively low, and where commercial penetration can be driven by smaller, highly targeted sales and marketing activities. Biopharmaceutical companies at this stage have historically been attractive acquisition targets, and have consistently demonstrated that they can access public markets through IPOs in a broad range of market conditions. Examples of this type of later stage investment in the New Leaf portfolio include Acadia Pharmaceuticals (NLV-II, NASDAQ: ACAD, exited at 2.5x), Phase III, focused on psychosis associated with neurodegenerative diseases, Durata Therapeutics (NLV-II, private initially, now public on NASDAQ: DRTX), Phase III, focused on a late stage antibiotic development program spun out of Pfizer, and InterCept Pharmaceuticals (NLV-II, NASDAQ: ICPT, exited at 3.2x), Phase III, focused on an orphan indication in liver disease.

• Investments in public companies at any stage, whose primary assets are product programs or product platforms. Most of these investments will be focused on small capitalization companies at the clinical or early commercialization stage. New Leaf’s focus on investment opportunities in small capitalization public biotech companies leverage the broad investment capabilities within the firm and benefit from the focused efforts of a small team of investment professionals dedicated exclusively to public market activities. As a result of this integrated approach, investments in public companies often target companies the Fund Managers have tracked over a number of years, some from the time when they were private companies. The dedicated public market team proactively tracks and screens the aggregate universe of biotech companies, with the goal of identifying compelling risk/reward investment opportunities. The primary focus of the screening efforts is to identify high-quality companies with attractive valuations that require financing to fund the company through key development milestones. The Fund will generally look to source or augment transformative, structured transactions in public companies, where a New Leaf partner will have the opportunity to join the board of directors. An example of an investment that resulted from New Leaf’s focus on public market opportunities includes MEI Pharma (NLV-II, NASDAQ: MEIP), an investment the Fund Managers made to recapitalize the company after it had acquired a lead asset, Pracinostat, and needed capital to advance the program through clinical development. Pracinostat was an asset that was well known to New Leaf, as members of the team had followed it closely for several years while it was owned by a private company (S*Bio), and had made attempts to acquire and spin out the asset in the past. In addition to sourcing opportunities, the public market team assists the broader biopharmaceutical investment efforts by managing the sale and exit of New Leaf’s larger positions in public securities, and by providing real-time insight into evolving market sentiment to the biotechnology and broader healthcare technology sectors that helps guide decisions around new investments and exit decisions.

For a complete list of investments made by the Fund Managers in healthcare technology companies see Appendices 1 and 4.

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