Welcome. This is Bruce Booth, one of the partners at Atlas Venture, and it's my privilege to present the 2025 year in review. As in past years, we're going to cover the biioarma industry, a deep dive on the venture capital ecosystem, and a brief update on Atlas Venture. But this year, I'm going to start with a preamble on macro policy. Given how important that has been since the last election, it's fair to say that from a macro policy perspective, it's been unpredictable and unsettling. Trump's policy by tweet, ready, fire, aim approach to problems, treating everything like it needs a sledgehammer rather than a scapple has really amped up the uncertainty for investors and operators alike. We've been playing whack-a-ole across a whole range of macro and pricing issues. It's hard to see the merit or rationale around the chaos in a number of these areas, but at least a couple of them have legitimate problem statements, and drug pricing is one of those. We need to fix the global drug pricing regime. The US has been paying far more than our rich developed peers as part of this 40-year Fouian bargain of high prices in the US, low prices elsewhere extracting just marginal revenues. This is not acceptable any longer. We need a reequilibration of US prices coming down and the rich developed world coming up. drastic most favored nation pricing that benchmarks US prices off of references in Europe is really not the way forward here, especially not for existing and legacy products. Fortunately, the backroom deals that have been done and announced aren't really most favored nation deals, which is why no one has had to reforcast their net revenues. But fundamentally, this issue does need to be addressed over the long term. Another issue that needs to be addressed is around manufacturing. Onethird of all of our imports come from two small countries, Ireland and Switzerland. And this isn't because they're exceptional at manufacturing. It's because they're exceptional at tax policy. Parking IP there, parking profits there in low tax jurisdictions at the expense of places like the US. We're running our largest pharma trade deficit of all time, 140 billion this year. In addition, 75% of medicines deemed essential here in the United States aren't actually manufactured here. And so under the gentle persuasion of tariffs from the administration, pharma has responded $360 billion of commitments for building onshore manufacturing plants. Now, this won't happen overnight. This is a 5 to sevenyear process. But this direction of travel of onshoring key manufacturing capabilities is the right thing to do. Another area of chaos has been the FDA. We need stability, transparency, and standards here. We've lost 20% of the staff at the FDA. The leadership roller coaster and turnover has been incredibly chaos inducing, though it's really uncertain what the impact is on FDA reviewers. Certainly in our own portfolio, we have not seen wholesale delays. We've had good interactions with the agency and we're hearing the same across others pipelines. Dr. McCari has said that the FDA is going to stand by the gold standard of efficacy and safety, which we think is a good thing to do with appropriate flexibility for rare diseases. He's also said the FDA is going to be more innovation friendly, addressing fast to the clinic with transparency. All of these are great words and we're looking forward to seeing actions come in behind them to help stabilize the way the FDA interacts with our industry. An area of some concern in particular earlier this year has been around the crown jewel of the US research enterprise, the NIH, the largest extra mural funding body in the world by tall order. 60,000 extramural grants given every year to nearly 3,000 institutions. Drastic cuts to the NIH would be very detrimental over the long term, especially from a perspective of the pipeline of talent, graduate students and postocs, the lifeblood of our industry, as well as just fundamental basic science progress. Of course, there are ways to improve to make the NIH more effective. Addressing things like the publish or parish approach to academic literature and the reproducibility crisis in early stage science, addressing the age of young investigators being able to get their own grants for their labs. These are real issues and we need to solve them. But we do need to protect the NIH. An area of grave concern has been the antivax bias through parts of this administration. The bottom line is vaccines have been the most successful medical breakthrough in the history of humanity. That said, it's fair to have science-based discussions about timing of vaccines. Should it be infants, pedds, adults? Should it be risk-based stratification of which patient segments we should be vaccinating? And should these be mandated or voluntary? But those conversations need to be had in a science first datadriven manner which appears to be lacking in the current administration. Lots of other uh potential macro concerns around data integrity around the pressure on the Fed and around geopolitics as a whole. Fundamentally though, if we step back at the sort of 60,000 foot view of the macro and policy arena, I'm reminded of the British poster keep calm and carry on. I'm thankful for all the leaders in the pharma and biotech community that are sharing their voices down in DC, bio and pharma, and we need to continue those efforts to educate our lawmakers. But fundamentally, I am confident that with a resilient and relentless focus on innovation, we're going to be able to overcome these policy challenges. So with that as preamble, let's dive in to the broader industry. Taking a look first at the barometer of where stock prices have traveled. We look at the DRG, a pharma index or the XBI, a biotech index, relative to the S&P over the last 12 months. Can certainly see that um since the spring through most of the summer, the S&P 500 was significantly outperforming both the DRG and the XBI. In the last couple months, as some of the macro concerns have faded, we've seen a resurgence in the biioarma sector as a whole. A lot of the challenges in the middle of the year were because of investor anxiety on those macro points. Valuations got compressed. We saw 25% reduction in PTE ratios in pharma over the last three quarters, really since election day. Farm and Biotech, if you take a 30-year view, are trading at the very bottom end of their 30-year range relative to the rest of the market on valuations. With strong revenues, with strong global earnings and a expansion of price to earnings multiples, that could create a good backdrop. As we look at the world as a whole, the farm industry just recently crossed an important and interesting milestone. 3.6 6 trillion defined daily doses were administered last year. That's one drug per person per day on the earth. Enormous reach for our sector. So with that as backdrop, we ask the question, how can we improve performance of the biioarma sector? Well, there's really two levers. We can increase sales or we can increase efficiency. On the sales side, we can do that by launching new products or growing existing approved drugs. And let's look at each of those. On the new launches side of things and using the FDA as a proxy for global new innovation, we're on track for roughly 50 FDA approvals this year in line with the 10-year historic averages. Lots of interesting drugs. We have prep for HIV, first-in-class pain meds, potentially best-in-class ADCs, hemophilia, RNAI products. There is a lot of great drugs in here that we as an industry should be enormously proud of. Three that I'd like to call attention to are three new drugs this year that got approved for the rare disease called hereditary angioadema. When I first started in the business 20 years ago, one of the early deals we looked at as a firm was in this disease, HAE. There was not a single drug approved at that time. Fast forward 17 years later, and Donzera is the 11th drug approved for HE, giving patients, caregivers, and physicians lots of tools to treat this grievous illness. Rare diseases have indeed been a really important part of the biotech and biioarma community as well as FDA approvals over the last five years. Over half of all approvals are for rare diseases. Just less than half have been first inclass new targets getting validated getting precedented as new drugs in the last 5 years. That's 120 new mechanisms of action. And about one out of every six new approvals has been accelerated using surrogate endpoints rather than long-term clinical endpoints to help speed their progress towards patients. Super important. Where do these types of drugs come from? 85% of new drugs originate outside of the largest pharmaceutical companies. Many of these target specific and smaller and targeted indications such that I was surprised to see twothirds of the recent approvals have less than 200 patients in their approval studies. So real target indications which have allowed 60% of those drugs made by small companies to be launched by small companies. The old short the launch thesis has now transformed into long the launch. Lots of successful companies are launching their own drugs. What about the 40% or so originating in smaller companies that find their way into partners? That remains an enormous source of value. If you look at all of the revenues in 2024, nearly twothirds are from externally sourced assets, either partnered or acquired. Super important success driver in our industry is the collaborative aspect of partnership. So those are for some of the drugs that have been approved. What about the drugs in the pipeline in past years? We've highlighted a bunch of drugs for the first time. Last year was Merk's PCSK9 J&J 23. Some really transformative medicines. Here's a handful that we'd like to call attention to this year. Starting with teicada's erection program for narcolepsy discovered in-house in Shona. Merc with its TL1A antagonist in IBD acquired through Prometheus. Astroenica with its oral surge for breast cancer also internally discovered Biogen working with Iionis around antisense or tal a set a basket of programs against LP little a that key cardiovascular target all through a set of collaborations. And then lastly, Abivavivax with its mystery mechanism perhaps, but great data in IBD internally discovered. Two more assets I'd like to mention externally sourced and sourced from the Atlas portfolio. The Maggramab muscle sparing obesity approach at Lily acquired through Versus and Zazoitanib selective Tick 2 inhibitor acquired through Nimbus being pushed into phase three by Teada. Not everything in Atlas is partnered of course and so I'll call attention to six emerging clinical assets in the Atlas portfolio. Vitapertton up for FDA approval got one of the early priority vouchers the new priority vouchers at DISC medicine. You have Chimera with 621 our firstass stat 6 degrader dine working in both DM1 and DMD. Kylera advancing its dual gip glip uh agonist in obesity. Siona just started phase two with its MBD1 correctors in combination and Treveni KK57 antagonist going after barrier dysfunction in attopic dermatitis. So these six and the eight prior as well as all of the other assets deep in the industry pipeline have the potential to move the needle on new drug launches over the next 5 to seven years. What about growing existing drugs? You think about growing existing drugs, there's really two levers, price or volume. The pricing side of the equation a decade ago was the primary driver. Double-digit list price increases, strong net price increases. That's no longer the case. The forecast for net pricing is actually negative over the next handful of years due to both competition and formulary PBM access. So the real way to drive value from existing products is more uptake largely driven through new indications. Good examples of that Vivgart recently FCRN got approved in my graas now going after a host of other bell auto antibbody diseases. And vutra at alnum started in amaloidosis three years later in cardiomyopathy and is off like a rocket and similar with testpire started in asthma moving now into a number of other indications. A really important part of driving value from existing products that run squarely against some of the provisions in the IRA highlighting the importance of getting that legislation properly corrected. we step back at sort of new and growing drugs and the tailwinds supporting them. There are of course some headwinds on those failures, rejections at the agency or delays at the agency and loss of exclusivity of existing products. Let's walk through each of those. On the failure side, we had a pair of 33 antagonists. Both fail in respiratory diseases. We had two capa opioid antagonists fail in depression. We also had the uh Caravel schizophrenia asset fail at Abby and at Cargo next generation CARTT exaggerated toxicity took down not only the program but the company in obesity super hot but safety is critical fiser's oral program safety around livertox and bioge uh IPO last year also taken down for livertox and then most recently two asset centric late stage failures at Moon Lake and at Kala sending those stocks down 90% in the days that followed. Now I highlight these to celebrate that these were reasonable credible R&D bets that just didn't play out favorably on the risk curve. By my estimate three and a half billion dollars of direct cost went into these 10 programs. Probably 10 billion in total invested capital went into these programs. You think about all of the other failures and how much was spent advancing these drugs that won't make it. This is why we need a drug pricing regime that rewards success, rewards risk-taking, and allows us to pay for these failures. Beyond outright failures, delays will also affect the sales curve. Over the summer, the FDA released 270 complete response letters that articulated why drugs got delayed for drugs that eventually largely got approved. 50% of them were received those complete response letters for manufacturing and CMC quality related issues. For all the biotech CEOs listening to this, this is the boring part of the business, but you can't underestimate the importance of investing in great manufacturing in CMC. And then lastly on the loss of exclusivity, the last five years we've been running at 10 to 15 billion a year in global revenues at risk of generic entry. In the next five years, that number is going to triple to 40 to 45 billion per year of industry revenues at risk. You can see some of the huge franchises on the right years five between five and seven years away of gigantic franchises that are going to face generic entry. Now, this is important. It is the social contract. We have a monopoly and then we have generic entry, lowcost generic entry. But the challenge with that is we need to replace 8 to 10 mega blockbusters per year over the next five years. Some of this will come from internal discoveries, but a large portion will need to come from external sourcing of innovation. And so that's a wrap on how we think about the puts and takes on increasing sales. What about increasing efficiency? This is about R&D productivity and then operational efficiencies. R&D productivity of course being risk time and costs. On the risk side of the equation, things haven't gotten any better. 6 to 7%, yes, six, seven percent of drugs that enter phase 1 will make it all the way to approval. Across every major modality, we've seen drop offs in success rates over the last decade, suggesting that perhaps the lowhanging fruit of many of these new modalities has been picked. One potential bright spot is around partnered assets. Partnered assets continue to significantly outperform on attrition metrics relative to non-partnered or organic assets. This suggests that perhaps the stringency and diligence of bringing an asset in from the outside creates a higher bar for quality. That's the risk side of the equation. We think about time. Unfortunately, time hasn't gotten any faster. It's still 8 to 10 years to bring a drug all the way through clinical development and registration. Couple that to four or five years in drug discovery and preclinical and you end up with 12 to 15 years from idea to market. An enormously long duration R&D process. Add in the costs and you get to return on investment metrics for productivity. This is a McKenzie analysis. You can see last year is the lowest performing from a productivity return on investment perspective over the last 10 plus years following a blip during COVID and some of the GLPS. R&D productivity remains a real challenge for the industry. What about the operational metrics? R&D is a percent of sales. COGS is a percent of sales. SGNA all city expects slightly trend down over the next five years. All of the pharma companies on the right hand side have been belt tightening. Most large pharma companies have shutting down different groups, restructuring and the like. That's what this slight downturn starts to reflect. Of course, this leads to higher gross margins and higher EBIT dot margins. You know, as earnings start to increase and potentially, you know, price to earnings multiples start to expand again, that creates a nice tailwind for the sector. Another thing that will drive investor interest is around stock buybacks and deploying capital to support shareholder equity. We've had 15 to 25 billion a year over the last few years of share buybacks. In 2025 alone, $30 billion was announced. Um these buybacks deliver value to shareholders and attempt to optimize the capital structures. Even emerging biotech companies are now engaged. Exelixus and Neurocrine, two 10 billion-ish market cap companies, both deploying capital in terms of share buybacks. And as an extreme example, Arvinus, an emerging biotech company, deployed hund00 million of its balance sheet to buy its highly undervalued stock as part of its recent restructuring. It'll be interesting to see if other companies follow suit. So as we step back to this framework around improved performance, you can see some real opportunities and some real challenges to the sector here. But that's the 60,000 foot view. Why don't we drill into five really critical issues facing the industry in a perennial way. China, obesity, AI, crowding, and new modalities. On the China side, the China biotech market is super hot. It's up 90 plus% um year to date. We've seen the one of the largest pharma IPOs of all time, Hungre went public on that exchange. Over 40 companies have filed to go public. Dozen or more really great offerings. We're seeing liquidity and sentiment be very bullish in the Hong Kong stock exchange for biotech. Now, why is that? Big part of it is China's increasing role in the innovation ecosystem. 10 years ago, 5% of all clinical trial starts happened in China. Today, that number is 30%. Essentially on par with the United States. If we look at just oncology trials and the total delta in the world of new cancer starts between 2010 and today, that entire delta can be accounted for by studies started in China. This enormous amount of activity has led to a plethora of interesting assets being developed there and burgeoning pipelines. A decade or more ago, of the top 50 largest R&D pipelines in the world, only three of those companies were Chinese. Today, over 20 or 40% of the largest pipelines in the world. really a staggering expansion of the portfolio of innovative interesting assets coming to China. This has of course supported an incredible amount of east to west deal making. These deals China having a China participant about a third of all global licensing deals in the last year have had some China Chinese component to them. Over 130 billion dollars of value in these licensing deals. Some of this has been new codes like we've done at Chilera and ISOs with our partner at Hungre, but a lot of it has been more traditional licensing, exchina global licensing and partnership arrangements. But assets and dollars aren't the only thing that's flowing back and forth. So is people. We took a look at the top 20 emerging bioarma companies out of China at their leadership teams. And at least one if not more than one of the leaders of these companies were trained in the west either academically or more commonly through stints leadership roles in western pharmaceutical companies. In the west today especially this administration has made immigration and work visas more challenging really exacerbating this potential brain drain back to China. We need to address this. China remains an incredibly cost-effective place to build teams. Here, taking a look at compensation changes. Billiondoll IPOs in the US, what what CEOs make is over a million dollars a year. In China, similar scaled companies, billion-dollar companies, the CEO makes 60% less. A similar delta around chemists, nearly 70% less. If you roll this through a 200 person emerging biotech company, that's tens and tens of millions of dollars a year saved by building your company in China. This cost differential is why for the last decade or more, almost all of our drug discovery companies have worked with global CRO with footprints in China to be able to access and capture some of that comparative cost advantage. Couple that to a fasttocl clinic regulatory strategy by the Chinese FDA and it creates the real challenge of cheaper and faster. This is the call to action for western biotechs. The need to rise up to the challenge and do things cheaper, faster and better. The second major topic is around obesity. This is the bullseye chart in the center proof drugs on the outside uh phase one. You can see there's a ton of activity in the obesity space about a third of which is GLPS and related pathways probably the most important pathway from a health impact perspective of new medicines in our lifetime. Investors have deployed capital not only in more GLPs but also in lots of other novel mechanisms. Investors have really loved this space. So much so that they have priced lots of public stocks probably to perfection because few drugs have been able to actually surpass the best-in-class profile of the market leader today. Take a look at Viking. Small blemish in their profile in in August led to a billion dollar bad day, losing 42% of its stock price. At Lily, their oral stumbled in the middle of July, didn't meet the very high expectations investors had. Lily lost 60 to 70 billion dollars of market value in a single day. So many of these public companies and public portfolios have really been priced to perfection. Another area investors have loved is of course AI. We know AI is going to transform lots of industries, bioarma included. About 50% of US GDP growth this year is driven by AI machine learning investments. Drug discovery will also be transformed. There are a number of current and emerging use cases here on the right hand side. But in a space so prone to hype and overpromotion, it's important to understand the reality of what's it like on the ground today in terms of contributions from AI and machine learning and where are we on that journey of transformation. As an example, I'm going to look at protein co-folding. So being able to predict whether a small molecule binds a protein. New publication came out really saying you take foundational models or derivative models and you look success rates as you go from further away from a training set with lower similarity to your training set less and less success essentially becoming less than a coin toss at being able to predict. Similarly, if you use AI machine learning around known pockets, you have a high success rate. But as soon as you move into novel pockets, it's very hard to predict. And so today, AI machine learning in that area of protein lian co-olding, it's really been looking under the lampost. It's very helpful with known targets and known chemistries, but true novelty, generative chemical novelty remains challenging. Novelty also remains challenging more broadly across the industry, which brings up the topic of hyperccrowding. There's over 36 drug targets with 50 or more programs against them worldwide. According to a recent analysis from LK, this is an enormous amount of competition on nearly every mechanism that's moving the needle for patients. In addition to competition over time, it's been speeding up. 20 years ago, 25 years ago, in the golden era of pharma, it took 15 years for the third drug in a given class of medicines to make it to market. Today, that's less than two years. So, competition is coming fierce and fast. Like other risk capital asset classes, we're going to see many losers emerge in these spaces that can't get to best-in-class products, but there will be a handful of winners. One way to think about trying to win in our space has been tapping into the undruggable with new modalities. Can we use new modalities to do something different than those existing medicines and aim for a best-in-class profile? On the left here is an explosion of different kinds of modalities that the industry has worked on over the last 10 years. Each one of these modalities offers great promise but also adds significant complexity. Looking at pharma pipelines today, the average large pharma pipeline has a dozen different modalities in it. Enormous complexity around CMC, bioanalytics, manufacturing, how you think about clinical development and distribution. In addition to that complexity risk, there's also commercial risk of taking all of that, will it play through from a commercial perspective? Looking at the cell therapy space in cancer, despite eight approvals in this space, including one over seven or eight years ago, they remain only 2% of the global revenues in oncology in those cell and gene therapies. So real sales and distribution challenges despite real impacts on patients. In addition to that, when we're embarked on some of these new modalities, we're taking the unknown unknown risks. And these are real risks not only to companies, but most importantly to patients. We've seen almost two dozen deaths in recent years associated with systemic gene therapies and gene editing approaches, not only in AEV, but also in leiviral gene therapies. These are really critical for us to understand that our patients are taking risks to use our medicines. And we have to ask ourselves why are we doing this? We are doing this because we believe some of these new modalities will have profound impacts to help patients and indeed they do. This is why we take the risks. the recent work in Huntington's from Unicure around AAV looks like a real medicine finally in such a grievous disease or KJ who had his liver fixed through uh N of one crisper gene editing. These are the kinds of inspirational stories that we're all in this biotech biioarma business together with that where do these drugs come from? A lot of them come from biotech. So, let's shift to the biotech venture ecosystem. The venture capital cycle in biotech has certainly been challenged over the last few years. Um, so I'd like to take a 10-year step back. If we look at the first half of 2015 compared to the first half of 2025, 15 there was $6 billion of venture capital funding in almost 400 companies. We were in the early innings of the super cycle of IPOs that were happening. 2015 was a boom year for IPOs and investors were leaning in and generalists were participating. You take a look today, nearly a doubling, almost 12 billion in venture capital funding this year, roughly the same number of companies, but we're in this postbubble reset period. Investors feel burned for much of the year until recently. There was definitely a negative sentiment overall. Fortunately, that has started to change. But a big part of that negative sentiment has been the journey that we've been on. If we look at the quarterly journey we've been on, you can see the peak in the first quarter of 2021 with over 12 billion in a single quarter. We've settled out at kind of five to six billion dollars of biotech venture funding in the United States. For context, the US represents about twothirds of global VC and about half of this pool of capital is going to mid and later stage companies series B's and beyond. What are some of the themes underpinning the deployment of capital in venture today? Concentrated funding, constrained creation, and a conservative posture towards risk-taking. On the concentrated funding perspective, roughly 8% of financings were mega rounds larger than hundred million this year. That represents a full half of the entire pie of all the venture funding. So enormous concentration in fewer halves than have nots. Importantly, the pace of mega rounds continues. It has not reset back to prepandemic levels. We're running at about $600 million financings per month in our space. So capital is being deployed in these large financings. On the venture creation side of things, this is where we actually have reverted back probably to 2015 levels in terms of the numbers of new startups getting created. Lots of tourists came into the venture creation space in the 2020 pandemic bubble period of time. They have largely left. venture creation firms. We've all stayed in the space and remained very active. It's tougher for lots of companies to raise money in this environment without an affiliation to some of the venture creation firms in our industry. And then what about risk-taking around talent, geography, and business models? On the talent side, lots of investments and investors are backing serial CEOs. previous CEOs who've already demonstrated their ability to add value. I will say this may be across the industry. Atlas is different. The vast majority of our CEOs are actually firsttime CEOs but with industry experience. So there's less risk being taken at least at the industry level in terms of leadership teams in our companies. We're not taking much geography risk. 60 cents of every dollar deployed across the entire United States goes into a small handful of zip codes in Boston or in the Bay Area. And then lastly on business model, this always cycles and fluctuates. Right now we are pinned very tightly towards more asset centric investing. Investors are looking for line of sight to development, line of sight to clinical data, and platforms are tougher to build in this type of an environment. You really need early partners to help you build these interesting new platforms. Which brings up the subject of business development. If you look at this white line, that's the number of partnerships in our industry. You can see that that has come off quite significantly actually in the last five years. But fortunately the blue line total deal value has not. Meaningful large deals are still getting done across our space and these are really critical for the industry. Some notable BD partnerships. These are biobuck deal values on the side. These represent deals with China, deals for single assets, deals for portfolios, deals within the US and Europe. There's really a significant and broad level of activity. It is important to be engaged in the business development process for a couple of reasons. There's financial value to the biotech company. We all are going to take dilution of some sort. It's inevitable. But what kind of dilution are you taking in tough capital markets? Equity dilution can be incredibly painful. So being able to take asset dilution to be able to fund you through the next capital market cycle is super helpful. But in addition to that financial value, there's real strategic value to being engaged in business development. Licensing discussions create that longitudinal relationship that allows companies to feel comfortable to move towards M&A. 80% of M&A today begins as a licensing discussion. And most of the time, 80% of the first biders, the first movers out of licensing to M&A actually win the deal. And so this is a great segue to talking about the exit environment in venture capital. Talk about private and public M&As where there's really been a lot of momentum especially in the latter half of the year as well as the public capital markets where there is glimmers of hope. On the M&A side private M&A we're going to top probably 23 to2 billion dollars of deal value this year. One of the biggest years for private M&A over the last five. So real significant amounts of activity. We've seen um this being in the cancer space like Scorpion, one of our companies. More recently, Halda adding to this where J&J acquired it for over three billion. But in things like Invivo Carti, in vaccines, and cancer, a broad range of other types of deals. So lots of excitement on the private side that's being matched really by M&A activity on the public side. We're at 90 billion so far this year. It's going to be north of that. Probably north of a hundred billion dollars of deal value this year. Really a lot of activity in that sort of multi-billion dollar category with recent deals like Avidity from Novartis, Metser at Fizer and the drama with Novo. What's interesting to note on the chart on the left is in 2023 there was a $43 billion deal of Seattle Genetics and in 2020 there was the $40 billion deal for Alexion. If you remove those, the activity this year is certainly the highest of the last six in terms of the number and frequency of deals in that 5 to10 billion range. All of this capital that comes in through M&A gets recycled and that recycling helps to create real momentum and tailwind into the equity capital markets. Unfortunately, over the last five years, the capital markets have not been a pretty place for biotech. looking at either a clinical stage index, the BBC or the XBI. Heading into this year, we had a number of IPOs in the beginning of the year and things really did not mature, but a lot of those IPOs have actually performed quite well. You know, we've had eight IPOs uh to date. The last two just snuck in here in October and November, but most of the IPO activity was there in that first quarter. I expect this to change. There seems to be lots more appetite and interest in taking companies public in part because in the last six months we've seen an enormous run in the biotech capital markets. The clinical stage companies up almost 60 70% over the last 6 months. The larger XBI index up 30 or 40%. since the bottoms back in the spring. This of course has supported interest of investors in putting capital to work in such an environment and we've seen that with follow-on financings. The first two quarters of the year were incredibly challenging for getting followon public financings done in pipes. Registered directs and marketed follow-ons. Third quarter saw real momentum. A lot of catalyst driven raises were done in the uh in the third quarter really continued into the fourth quarter. October was actually the largest month in something like 18 months over 5 billion in a single month of follow-on financings beating both Q1 and Q2 outright. So green shoots are emerging here. Investor engagement including some generalist investors coming back into the space and mostly catalysts driven follow-on financings with some opportunistic capital raises as well. Importantly, we need more of this because there are a lot of public companies to feed. But thankfully, there's fewer public companies than we've had in the recent past. The total number is now down about 20% from where we were just a few years ago. Some of this is because of what you might call fallen angel M&A or perhaps bottom feeding M&A of companies buying assets at very low valuations. We've also seen activist acquirers show up, firms like Concentra or Zoma coming in and buying companies for cash and R&D tax shields. And then of course we've had boards making the tough and disciplined call to shut down companies and distribute capital like we did at Third Harmonic. And so that's a little bit of a wrap on the exits picture. I think as you step back to the venture capital cycle, you would say that sentiment is trending positive over the last few months with interest rate directions, macro risks fading, some of the hopeful new stability coming into the FDA and some positive data readouts. On the venture creation side, while it's constrained, it has stabilized and good ideas can find traction and are getting backed. On the building and scaling side of things, there is capital to deploy here. We have a lot of capital, much of it being concentrated into a smaller number of names. Importantly, a slightly different risk appetite than in more exuberant times. And then on the exit environment, we have real M&A momentum in the space today, especially in the, you know, last couple quarters. And the equity capital markets have responded to that and we're seeing real signs of life. And so it could be a pretty exciting next, uh, six to nine months for our industry. That's how venture in the biotech space works. How does biotech fit into the venture capital space? For the first time in my investing experience over the last 20 years, biotech has actually fallen as a share of venture capital to the mid- single digits. This is in part because tech BC has exploded with AI and machine learning investments and so facing the denominator problem, but you know just a much smaller portion of the pie than we were in the last 10 or 15 years. This in part reflects the number of venture capital investors that are active in um private biotech investing. It's a measure of private biotech investors who do at least two deals in a given year. During the pandemic bubble, it peaked close to 900 and that number has been cut by more than half or we're closer to 400 active investors here in 2025. But for those investors that remain, good investors have been able to raise money. We've seen a number of VC funds being raised. Bunch of our peers have raised nice funds. We also raised capital in the last 12 months. Top cortile managers continue to perform. And you look at one in fiveyear outperformance relative to both the XBI and the Russell 2000, you can see at least at the top cortile very significant outperformance both at the one-year and the five-year view of venture capital investing. And so with that, it's a good time to transition to a quick update on Atlas Venture. And I'll walk through each of the components of the venture capital cycle here. On the venture creation and investing side, we've done 16 new deals in the last two years. Six of them have come out of stealth mode and are public and well known. About 10 deals currently remain in stealth mode where we've helped build these companies. be finance seed or series A rounds across the broad range of areas. You'll see some immunology, some cancer, radio, autoimmune, we even backed an early stage osteoporosis program recently. Once these companies are up and running, how's the building and scaling looking? We've done a number of postse private financings. Chilera being the largest at 600 million for its series B, but a bunch of other companies have raised ample amounts of capital on the equity dilution side of the equation. How else do you fund companies? Well, you also fund it through asset dilution. And we've done a number of compelling partnerships for early stage assets, bringing in over 300 million of upfront cash to help fund some of these programs and businesses. What has all this gone into in our portfolio? Well, we've built the mini Atlas uh pharma pipeline. Over 130 programs, declared programs across our portfolio. About 50 of these programs are in clinical development, turning clinical cards, that super important exciting part of having impact on patients. Importantly, this whole pipeline is about 20% smaller than it was just two years ago, reflecting the kind of pipeline discipline that we've expected from our companies. And we've also rolled that up into the overall portfolio, putting more capital behind really priority assets and programs. We remain disease area and modality agnostic as we always have. We haven't shifted our investing behaviors in light of the market turmoil in the last year or two. Rare disease, oncology, ini all remain significant portions of our portfolio as well as metabolic disease, CNS and others. But we fundamentally do remain a true science first investment firm. So how has this translated onto the exit side of things? We've had two M&A exits. Scorpion was private. Vigil was a public company. Santa Fe picked up our frame 2 agonist program for Alzheimer's. We took Siona public back in the first quarter. They're up nearly 90 plus% and have capital to really turn the card on some exciting phase 2 data. And we've sent significant amount of capital home at Third Harmonic with the tough call to dissolve that company. Bottom line, Atlas has realized about a billion dollars over the last 24 months. How do you put that into context? Well, you can compare it to how much we put into the ground. So, we've invested 500 million and returned a billion. So, that's a net surplus of about 500 million over the last two years. Five years, that's 1.4 billion. And at 10 years, that's $1.8 8 billion of net surplus, more realizations than investments, nearly $4 billion of realizations over that period of time. These realizations have of course driven very good overall fund performance. If you look at our main early stage funds, outperforming the XBI and Russell 2000 by 40 to 50% and our later stage opportunity funds also outperforming those indices. This has of course allowed us to raise capital from our LPS. We raised a $450 million fund late last year, fund 14, and we raised our third opportunity fund just more recently here in the fall. We couldn't do this without just an exceptional investment team. I couldn't be more proud to be a part of this group. The bench strength is uh is deep and enormous. Fantastic group of investors supported by the brains behind the operation our our finance ops talent legal teams really crucial part of delivering the value in our seedstage companies and portfolio so thank you to this fantastic team and I'll close just with a reminder of the core tenants of the strategy seedled venture creation here at Atlas in a science first way finding great science globally and building locally 100% into therapeutics and really important that double bottom line of doing well by doing good. So with that, thank you very much.