Poem Recited by Gail Maderis

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Poem Recited by Gail Maderis, President & CEO

of FivePrime Inc.

at the Club's 2003 Holiday Reception

TWAS THE MONTH BEFORE CHRISTMAS

‘Twas the month before Christmas and from all ‘round the Bay

The Biotech Roundtable gathered to chat and make gay

To reflect on a year of hard work and persistence

And look to the future with hope and resilience.

Lawyers and bankers have been furiously drafting prospectuses

In hopes that an IPO market may still be ahead of us.

But so far investors’ appetite for new offerings has been finicky

And recent IPOs have performed rather sickly.

Acusphere, Avancis, Cancervax, Myogen - all traded down

In fact it seems an up aftermarket is not to be found.

TolerRx and Tercica postponed their debuts

‘Til equity markets give biotech IPOs better reviews.

Meanwhile, profitable companies increased their coffers

With follow-ons and converts that garnered top dollars.

$600 MM each Genzyme and Sepracor just took

Raising money in a flash with oversubscribed book.

Venture capital interest in biotech is rebounding

And the size of funds raised is truly astounding.

MPM and Abingworth each raised over $300 million

And NEA just recently netted $1.1 billion!

Believe it or not, 2003 is the 2^nd best biotech financing year ever

With $17.8 billion raised so far; $3.4 billion of that venture,

A mere $505 million from IPOs year to date

Mostly follow-ons and converts rounding out the plate.

Despite this, the gap between Pharma and Biotech valuation grows wider

We outperform on pipeline, but in market cap we’re much lighter.

And technology platforms are way out of favor

Only late-stage product and earnings stories the market does savor.

At FDA, Mark McClellan has brought a breath of fresh air

Now single cycle reviews and accelerated approvals are no longer rare.

CDER and most of CBER have been merged into one

To standardize reviews and get faster drug approvals done.

Approvals have been many: Cubicin, Amevive and Velcade, too

We’ve brought products to market in disease areas new.

Flumist, Cialis, Bexxar and Levitra

Fuzeon, Levixa and also Emtriva.

Genentech this year is on a drug approval spree:

Raptiva, Zolair….and Avastin could make it three.

And Genzyme also managed to get two

Orphan drugs: Fabryzme and Aldurazyme through.

The market has applauded the slew of NDAs

With higher stock prices and general praise.

But not every filing has been so successful;

The FDA wants to see more data on CV’s Ranexa.

Technology breakthroughs continue to show promise

And capture investor and Pharma interest with fondness:

RNAi, stem cells and nanotechnology,

Whole genome sequencing, and systems biology.

Pharma partnering this year has been a mixed bag,

Competition has increased and timelines have lagged.

Late-stage product deals still get done for large sums,

But technology partnering hasn’t been any fun.

In the longer term partnering is bound to improve

As Pharma, desperate to fill pipelines, must move

And act on deals both large and small -

Early and late stage, there’ll be room for all.

The Biogen/IDEC merger caught the Street by surprise

But from sound strategic logic the deal did arise.

More mergers to leverage infrastructure we may see

For once profitable, critical mass in R&D becomes key.

The industry has some problems to address in the future

Biogenerics make the prospect of long term profits less sure.

And recent rulings on research use exemption cases

May hamper discovery in both academic and commercial places.

We’re working creatively to provide hope and answers

To challenging diseases like AIDS, stroke and cancer.

But payors still complain that our drugs are too expensive

Just what should be the value of helping people live?

The job market’s been tough, acquirers pared down Sugen and Cor

And Bay Area companies like DeltaGen and Signature now are no more.

At small companies like Onyx the pain of layoffs were felt

Even larger companies like Incyte and Exelixis tightened their belts.

We’ve had ups and downs, but it appears the corner has been turned

And perhaps in ‘04 we’ll reap the fruits we have earned.

We look forward to the future with strength and resolve

And we’re pleased overall on how the industry has evolved.

Next June the Bay Area will host the BIO meeting

We’ll pull out all the stops for this industry greeting

And show the world why the Bay Area’s number one

In an industry that has potential second to none.

So now raise up your glasses, let’s toast peace and good cheer

To all Happy Holidays and to all a good year.

Gail's E-mail Address: gail.maderis@fiveprime.com

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