Moderator: David R. Guyer, M.D.

CEO and Chairman of the Board - Ophthotech

Ophthalmology Innovation Summit

IPOs in Ophthalmology

October 16, 2014

2

Key Historical IPO Events

•  Early public ophthalmology companies - 1958 – 2007: Bausch & Lomb publicly traded*

- 1970 and 1989: Allergan became a public company#

•  Early 1980s – Biotech began to take off - 1980 - Genentech raised $35 million in its IPO+

•  Considered biotech’s first entry into the capital markets

•  First ophthalmic biotech IPOs - August 3, 2000 – First ophthalmic biotech IPO – Inspire - August 22, 2000 – First ophthalmic “pure play” IPO – ISTA

**New York Times; Bausch & Lomb Plans I.P.O March 22, 2013 6:01pm #USA Life Sciences Database –www.biotechgate.com + New York Times: Cetus in Record Offering; Market Response is Cool – March 7, 1981

O P H T H O T E C H

Ophthalmology IPOs since 2000

Market cap at IPO:

$365mm

Market cap at IPO:

$222mm

Market cap at IPO:

$662mm

Market cap at IPO:

$154mm

Market cap at IPO:

$161mm

Market cap at IPO:

$267mm

Market cap at IPO:

$293mm

Market cap at IPO:

$154mm

Market cap at IPO:

$10bn

Market cap at IPO:

$350mm

Market cap at IPO:

$926mm

Market cap at IPO:

$331mm

Market cap at IPO:

$131mm

Market cap at IPO:

$342mm

Since 2000, ophthalmology companies have had a median market capitalization at IPO of $293 million. Market caps range from $131 million to $10 billion

Source: Company filings, press releases Note: IPOs greater than $100mm Excludes withdrawn IPOs for Oculex, Eyeonics and Bausch & Lomb

O P H T H O T E C H

History of Ophthalmology IPOs: 2000 – 2012 The majority of ophthalmology companies that have gone public between 2000-2012 have been acquired

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

IPO: 08/03/00 Market cap: $293mm

04/05/11 Acquired for $430mm

26% premium

IPO: 08/22/00 Market cap: $154mm

03/26/12 Acquired for $500mm

10% premium

IPO: 03/20/02 Market cap: $10bn

12/16/10 Acquired for $51.6bn

IPO: 06/29/02 Market cap: N/A

01/12/09 Acquired for $1.4bn

150% premium

IPO: 01/29/04 Market cap: $926mm

08/22/05 Acquired for $935mm

43% premium

02/13/12 Undisclosed

IPO: 10/07/04 Market cap: $331mm

01/01/07 Acquired for $808mm

13% premium

IPO: 07/06/06 Market cap: $131mm

IPO: 04/21/10 Market cap: $342mm

Source: Company filings, press releases. Excludes withdrawn IPOs for Oculex, Eyeonics and Bausch & Lomb

Acquired

Acquired

Acquired

Acquired

Acquired

Acquired

Spun off

2008 Private

Acquired

Note: IPOs greater than $100mm

5

2013 – 2014 IPO Observations: US Biotechnology

•  110 U.S. Biotech IPOs in 2013/2014 YTD -  2013: 40

-  2014 YTD: 70

•  Previous record of 64 companies (2000) and 76 in 1999/2000 •  IPO “maturity” in 2014 class remains at the 2013 level

-  77% - lead drug in at least Phase 2 (2014)

•  Average “valuation per predicted approved drug” is lower for the class of 2014 ($601M) than the class of 2013 ($794M)

(Source: Credit Suisse IPO Monitor-Edition 7)

6

2013 – 2014 IPO Observations (cont’d)

•  A “hot” 2014 IPO window, but still lower than 2000 levels w/r to average raise, average post-money valuation, total raised, and total post-money valuation

•  Class of 2013 / 2014 - represent 25 of the top 100 biotechs by market cap (only 10 from the class of 2000 in the top 100 list)

(Source: Credit Suisse IPO Monitor-Edition 7)

O P H T H O T E C H

Ophthalmology IPOs: since 2013

Amount raised: $77 million Current market cap: $482 million

Amount raised: $192 million Current market cap: $1.3 billion

Amount raised: $58 million Current market cap: $178 million

Amount raised: $75 million Current market cap: $299 million

Amount raised: $58 million Current market cap: $283 million

Amount raised: $117 million Current market cap: $702 million

Source: FactSet market data as of 10/07/14

September 2013 October 2013 February 2014

March 2014 July 2014 July 2014

Amount raised from $58mm - $192 million (median $76 million) Market caps range from $178 million - $1.3 billion (median $390 million)

O P H T H O T E C H

Ophthalmology has been one of the most attractive areas for investors in recent biotech IPOs

# of IPOs

Investment ($mm) Performance

Total Average deal size

Average step-up

Offer / current (mean)

Offer / current (median)

Oncology 16 $1,329 $83 1.2x 30% 4%

Specialty 8 $468 $58 1.4x 13% (8%)

Ophthalmology 6 $577 $96 1.8x 53% 60%

Anti-infectives 6 $479 $80 1.3x 78% 54%

Orphan / rare diseases 6 $647 $108 2.0x 52% 34%

Platform 6 $485 $81 1.3x 14% 6%

Hematology 5 $467 $93 1.5x 57% 80%

Cardiovascular 5 $376 $75 1.1x 23% 20%

Inflammation 4 $261 $65 1.9x 75% 1%

CNS 4 $295 $74 1.3x 40% 38%

IPOs since 2013 (>$40mm)

Source: Company filings, Dealogic, press releases, FactSet as of 10/07/14

O P H T H O T E C H

Relative trading performance of recent Ophthalmology IPOs

Source: FactSet as of 10/07/14 1 Ophthalmology IPOs include OPHT, AAVL, AERI, OCUL, AGTC, EBIO 2 Other IPOs includes all biotech IPOs since 2013 greater than $40mm

Ophthalmology IPOs1

Nasdaq Biotech

S&P 500

Indexed stock-price performance

Other IPOs2

Returns summary

73.7% 24.7%

28.5% 17.5%

19.8% 12.5%

14.0% 5.6%

Ophthalmology IPOs have outperformed over the past year

Since Sept 2013 YTD

10

IPOs In Ophthalmology

•  Panelists •  Vicente Anido Jr., PhD

CEO – Aerie Pharmaceuticals •  Thomas W. Chalberg, PhD

Founder & CEO – Avalanche Biotechnologies •  Michael Gaito

Managing Director – Head of West Coast Life Sciences – J.P. Morgan •  Brian Johnson

Partner – WilmerHale •  Amarpreet Sawhney, PhD

President & CEO – Ocular Therapeutix •  Susan Washer

President & CEO – AGTC •  Moderated By

•  David R. Guyer, MD CEO – Ophthotech Corporation