Pershing Square Activist Presentation Deck

Traditional Pharma R&D Model is Broken High-risk, low-return ►The Traditional model ■ Large, fixed-cost R&D organization ■ Discovery➡ Formulation Pre-clinical trials➡➡Scale-up➡Clinical trials ► High-Risk ■ Only 4% of pre-clinical compounds become approved medications (1) ► Low-Return ■ Total cost per drug $1.3bn, up 10x since 1975(2) ■ A 10- to 15-year investment to develop a novel drug (2) ■ 4.8% industry average ROI on R&D investment(³) (1) "Getting Pharmaceutical R&D Back on Target"; Mark E. Bunnage; Nature America, Inc. (2) "The Pharmaceutical Industry and Global Health Facts and Figures 2012"; IFPMA. (3) "Measuring the Return from Pharmaceutical Innovation in 2013, Deloitte / Thomson Reuters. 33

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