How We Invest-Venture Capital Opportunities for

Biotech Sector

Biomass and Green Technology Financing Opportunities

Kuala Lumpur

20th April 2011

• $162 million Venture Capital Fund focused on investments across the Life Sciences

• 50-50 partnership between Burrill & Company and Malaysian Technology Development Corporation.

• Labuan based fund with office in KL

Background on MLSCF

3

Burrill Malaysia MTDC Labuan

MLSCF

MLSCFMC

100% 100%

50% 50%

100% Management Shares

Investors

100% Participating Shares

Direct Investment70%

Investment inBLSCF III

30%

MLSCF Structure

4

MLSCF Portfolio

CompanyCompanyCompanyCompany Role:Role:Role:Role:Board Board Board Board

Seat:Seat:Seat:Seat:Investment Partners:Investment Partners:Investment Partners:Investment Partners:

FoundedFoundedFoundedFounded

LeadLeadLeadLead

LeadLeadLeadLead

CoCoCoCo----InvestorInvestorInvestorInvestor

CoCoCoCo----LeadLeadLeadLead

CoCoCoCo----InvestorInvestorInvestorInvestor

5

MLSCF Portfolio

CompanyCompanyCompanyCompany Role:Role:Role:Role:Board Board Board Board

Seat:Seat:Seat:Seat:Investment Partners:Investment Partners:Investment Partners:Investment Partners:

LeadLeadLeadLead

CoCoCoCo----InvestorInvestorInvestorInvestor

CoCoCoCo----InvestorInvestorInvestorInvestor Observer

CoCoCoCo----InvestorInvestorInvestorInvestor Observer

LeadLeadLeadLead

LeadLeadLeadLead

Energy industry evolved from bio to fossil fuels since 1875

Alternative Energy?

7

Rationale for BioGreentech

• Time is right for biogreentech i.e. biotechnology applied to sustainability concerns of energy security, climate change and food & water security

• Instrument to deliver on Malaysia’s aspirations– Accelerate transformation to a high value, innovation

driven economy

– Support green economy strategy

– Support biotechnology policy and greentech policy

• Window to innovative companies and understanding of best practice biogreentechinvesting

8

Built On Long-Term Megatrends

ENERGY SECURITYAll nations desire greater energy independence

US imports >60% of liquid transportation fuels

Oil prices will rise as demand outstrips supply

GLOBAL CLIMATE CHANGEStrong societal and environmental pressure to reduce carbon footprint

Stringent regional and state GHG regulations being enacted

Low-carbon energy and renewables in demand

FOOD AND WATER SECURITYGrowing global population with coincident loss of prime farm land

Great need to increase productivity per unit of land with reduced inputs particularly water and fertilizer

Social unrest will increase pressure for increased production

Need for new technologies for water sources and supply

SUSTAINABILITYIncreased social, political pressure to lower the environmental impact of energy generation, food production and chemicals

Major consumer brands focusing on “sustainable and green” practices, i.e., Wal-Mart, Unilever, Staples, P&G etc

The chemical industry seeking biorenewable feedstocks as an alternative to highly volatile fossil carbon sources

Worldwide Mandates and Subsidies-Biofuel

Revenue Potential by 2020

$ Billions across the value chain from Ag inputs to end products

WEF Report 2010

Venture Capital Relative to Other Forms of Finance

VC is a Relatively Small Piece of Global Cleantech Investment

Venture Investment in Biofuels is a Modest Piece of Cleantech Venture Investment

BioGreentech Private Financings > $20M

1Q’10 2Q’10 3Q’10 4Q’10 1Q’11*

$100M

$50M

Quarter Totals: $144M $357M $270M $217M $162M

* As of Feb 2011

Emerging Eco System

Large Corporates

Private

Investment

DEAL OPPORTUNITY

Govt. Support & Mandate

VC and PE Investment in Cleantech on the rise.

Stimulus, DOE, RFS2, future CO2

Shell, Total, Samsung Exxon, Wal-Mart… to name a few

Venture Capital is NOT Project Finance or Private Equity

• Challenges to Venture Investment in Biofuels

– VC’s must target 5-10X returns for their early money in

– Targeted return requires investment in game changing technology, IP

– Typical $ timeline for a VC-backed biofuels project

– Bench scale demonstration of technology, ~$5M

– Pilot facility scale-up ~$10M

– Refinement of pilot operations/ contingency ~$5M

– Small scale commercial facility ~$20-50M

– Large scale commercial facility ~$100-200M

– Project finance is not available until the 1st facility is up and running at the appropriate scale

Who will fill the funding gap??

VC“Comfort Zone”

MSCF BioGreentech Portfolio

• Gevo – C4 platform (isobutanol); potential extensions

• Cobalt – C4 Platform (n-butanol); cellulosic focused

• Codexis – Broad bioprocessing platform

• Akermin – CO2 capture; Gas separations

• Abunda – Food and wellness ingredients

• Chromatin – Designer Chromosomes, feedstock

• Glori Oil – BEOR

• Segetis – Ketal Chemistry for next gen monomers/oligo/polymers

• Mascoma – Consolidated Cellulosic processing

17

MLSCF in BioGreentech rankings

MLSCF investments ranked among the top 30 companies in bioenergy

– Mascoma (2008, #8; 2009, #10 )

– Cobalt Biofuels (2008, #17; 2009, #30)

– Gevo (2008, #27; 2009, #13)

– Codexis (2009, #35)

MLSCF investments were listed in the largest 15 biofuelstransactions in 2008

– Mascoma ($61M)

– Cobalt Biofuels ($25M)

– Gevo ($17M)

MLSCF investments successful in highly competitive award of US DOE grants

– Cobalt Biofuels ($30M)

Large Corporate Partners Step-Up

Date Transaction

PartiesTechnology / Application

Scale / Location

Time to

Market

Est. Value1

(M)

Deal Structure

Comments

June 2010

Biorefinery technology / high-value performance chemicals, advanced biofuels, oleochemicals

180-360 kMT output / Indonesia

< 1 year

na Joint ventureBiorefinery utilizes renewable oil feedstocks

June 2010

Engineered yeast strains / sugarcane fermentation to farnesene-based specialty chemicals for industrial and automotive applications

na / Brazil

na $80-100 Joint ventureDefinitive agreement to be signed in 2010; initial markets in US, Europe, Brazil

June 2010

Synthetic biology platform / discovery of novel compounds and pathways for renewable fuels and chemicals

na na $180+

R&D collaboration, JV at commercialization stage

Total acquired 17% equity stake, contributed $50M in R&D costs, 50/50 cost sharing going forward

April 2010

Engineered yeast strain / sugarcane fermentation to farnesene-based specialty chemicals

> 2 mMT input / Brazil

1-2 years

$80-100

Joint venture (50/50 ownership), shared capex, Amyris to commercialize

Follows 12/09 acquisition of 40% stake in sugar cane mill for $80M

March 2008

BioForming catalyst technology / conversion of plant sugars to gasoline and gasoline blend components

na na na

R&D collaboration on technology improvement and scale-up

First demonstration biogasoline plant in 03/10, 38,000 L/yr capacity

April 2007

Polyhydroxyalkonoate (PHA) production from renewable feedstock / biodegradable plastics for injection molding, paper coating, cast film and sheet, etc.

50 kMT output / Clinton, IA

< 1 year

$300+

Joint venture (50/50 ownership), milestones, royalties, profit sharing

Continuation of 2004 technology alliance; Metabolixto receive reimbursement for R&D and other services plus royalties

Source: company websites, regulatory filings

1 Capex value for the JV deals and total value of payments and equity investment for the R&D collaboration

Opportunity for Biomass Rich CountriesInnovation Travels to the Feedstock

• Wilmar investment in Elevance

• Biorefinery to be established in Indonesia

• Production of olefin waxes, lubricants, other

• Feedstock: Palm Oil

• GlycosBio partners with Bio-XCell, Malaysia

• GlycosBio & Bio-XCell will construct a commercial scale facility and R&D center in Malaysia

• Production of ethanol from glycerol

• Production of isoprene

Global Sales of Chemicals

Global Crude oil Sales = $2,500 Billion Global Biofuel Sales = $52 Billion2% total fuel sales

1.5%

4.8%5.4%

19.2%

Biofuels a Piece of the Growing White Biotech PieWhite biotech sales expected to grow significantly and increase share

over the next 5 years…

10

90

White biotech

Sales chemical industry*

Market growth; process conversion; new bio-based ingredients

Growth with customer markets; new applications

Assumptions

* Current chemical industry sales excluding B2C sales in pharma and personal care** Top-down estimate based on industry interviews

Source: SRI, FO Licht, Frost and Sullivan, Press clippings, McKinsey

EUR billions

100% = EUR 1,300 billion

Increase share of oleo vs. synthetic surfactants but decreasing prices

Moderate growth in new products/services

Continuation of current very strong growth in biofuels

Moderate growth in hydrocolloids, strong growth in botanicals

Increasing use of biocatalysis and higher share of biologics

Moderate penetration of new bio-polymers and bio-based bulk chemicals

Bio-dependent sales 2010Segment

2005 basis

2005 - 10 growth

Biofuels

Pharmaceutical ingredients

Bulk/polymers

Food/ feed

ingredients

Oleochemicals

Enzymes

Others

Total Bio

Plant extracts

42

23

20

15

11

8

4

2

125

Biofuel Focused Startups Must be Opportunistic

Most biofuel companies are entering the chemical market place first with “gateway” chemicals like butanol, succinic acid, etc.

• Versatile, novel and robust platforms will be the big winners.

Partnerships-especially JV’s will be essential for accessing innovation.

• Partnerships are forming well before commercial scale-up and therefore early access is key.

The “End-Game” for VCs: The EXITBiofuel IPOs: Market Performance

$0

$5

$10

$15

$20

$25

$30

$35

$40

Apr-10 Jul-10 Oct-10 Jan-11

CDXS

AMRS

GEVO

Sh

are

Pri

ce

$1.4B

MarketCap

$0.5B

$0.4B

24

Era of BioGreentech Solutions & Markets

Massive institutional support

• US DOE facilitating by investing heavily in enabling technologies, encouraging private sector investment, reducing tech risk and time to market

• Greentech a significant part of countries’ stimulus packages

Well developed global markets for biogreentech products

• Major corporations seek sustainable technologies, processes and products

• Industries asking for alternatives to petro-based processes as well as new bio-based value-added products

• Food vs fuel debate now in perspective

Progressive govt policy in US & Europe

• Renewable Fuels Standard sets aggressive targets, complete with incentives and penalties

• Project funding will leverage private sector investments

Valuations on the side of investors

• Buyers’ market due to global financial crisis

• Rational risk-adjusted valuations are occurring

25

The Biomass Feed Stock is Key

Investment Opportunities

– Increased productivity technologies

–Conversion technologies

–Fermentation Products

–Carbon sequestration

Malaysia has biomass but needs technology and partnerships to build a bio-based renewablesindustry

Food

Feed

RenewableFeedstocks

EnhancedYields

Lower Inputs

EnergyCrops

Conversion

2626

Where To Invest ?

Feedstocks

Energy CropsCrop technologiesTrait technologySyngas technologiesBiomass to sugarsLignin conversionBiosolar systemsBiomass intelligence& logistics

Processing

Synthetic BiologyBiocatalysisGreen chemistryAdvanced catalysisAlgal/CyanobacterialtechnologiesFermentationBiorefineriesProcess intensification

Products

Biofuels/powerElectrofuelsBiopolymersBiochemicalsPackaging materialsBioconstructionmaterialsPulp, fiber & paper

Environment

Water & SoilGreen House GasesCarbon Capture &SequestrationNutrient recyclingFertiliser technologiesBioremediations

27

Malaysia’s Landscape & Strengths Provide Unique Opportunity

LandscapeLandscape

Government Commitment• Launching of National

Biotechnology Policy and National Green Tech Policy

• Establishment of Ministry of Green Tech

• Commitment to reduce Malaysia’s carbon intensity of GDP by 40% of 2005 levels

Local sustainability concerns• Oil palm sustainability

(upstream)• Downstream oil palm products

acceptance• Maturing/depleting oil&gas

reserves• Fast-growing GHG emissions• Food security

StrengthsStrengths

The Equatorial Advantage• Abundant sunlight and plentiful

rainfall lends to high carbon capture by crops/plants

• Strong in commodities• Proximity to major markets e.g.

China and India

Strong Economic History• Close ties to Middle

East/Islamic markets• Long-standing manufacturing

and design base, both MNC and highly-skilled local SMEs

• One of the strongest corporate cultures in Southeast Asia with global reach and value chain integration

Summary

• Diverse factors are shaping national and business policies regarding use of natural resources and energy – “The beginning of the end”

• On the supply side - Access, Security, Competitiveness, Cost

• On the demand side – Economic prosperity in emerging economies, convenience, luxury

• On the regulatory side – Climate Change, Life Cycle, Foot Print

• Substantial head space for innovation led businesses in renewables

• Significant investments coupled with optimum policies needed for the businesses to develop

Thank You