January Bob DeSutter Managing Director Co-Head of Health Care

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1 January 2007 Dear Friends and Clients, For much of our 112 year history, serving innovative health care companies has been an important part of our mission at Piper Jaffray. Our goal is to be lead advisor to our corporate clients and assist them in navigating through mergers and acquisitions, company sales and financing transactions. We seek to build these relationships by advising companies early and often as they move from start-up to public-ready to sale exit or industry consolidator. Our deep industry knowledge and powerful capital markets distribution have served us well over the last two decades. In 2006, the Piper Jaffray Health Care Group had a record year, added new staff to meet our significant growth initiatives and gained tremendous momentum entering Last year was a growth year for the Piper Jaffray Health Care Group as we expanded our leading life science banking business in the UK, and added experienced senior banking talent in New York (tools and diagnostics), Charlotte (high-yield debt), Minneapolis (medical technology M&A) and San Francisco (medical technology). Importantly, in January 2007, we welcomed back Stuart Duty, Co-Head of Health Care, to lead our Biotechnology Team in New York. Stuart led our Biotechnology Team from 1999 to 2001, and we are extremely excited to have one of the most experienced financiers and advisors in the life science market back to our significantly expanded platform. Today, we offer clients more services on more continents and in more health care markets than ever. We have found a strong interest in the debt, equity and convertible markets for financing growth companies in biotechnology, life science tools and diagnostics, medical technology and health care services. Our investments in world class M&A advisory, capital markets and convertible securities for health care companies have yielded extraordinary results for our clients. Our global expansion in Europe and China, debt capital/high-yield initiatives and our strategic partnership with CIT Group will further expand our capability to serve our health care clients in 2007 and beyond. Key highlights for the Piper Jaffray Health Care Group in 2006: #1 underwriter in the life sciences industry in the aggregate U.S. and UK markets* Raised more than $8 billion in worldwide health care equity, convertible and debt offerings M&A advisor in transactions with Smith & Nephew, American Medical Systems, Johnson & Johnson, Tyco, Henry Schein and Endo Pharmaceuticals, among others M&A advisor, senior lender, sub-debt arranger, bridge loan provider, convertible financing book runner to American Medical Systems on the $715 million acquisition of Laserscope Book running manager on the $152 million convertible offering and restructuring for Incyte Book running manager on secondary stock offerings for MWI Veterinary Supply, DexCom, Vital Signs, Volcano, Vital Images, Vectura, Protherics, Antisoma, Alizyme, Ardana, Ark Therapeutics and Sinclair Five private placement transactions raising more than $110 million for some of the highest quality growth health care companies The Piper Jaffray Health Care Group has been decades in the making and is stronger than ever. Congratulations to our many clients in completing highly successful transactions in Without our clients trust, Piper Jaffray would not be able to continue to exhibit our commitment to and enthusiasm for health care. To our many clients, we thank you! For others seeking a powerful partner committed to your health care mission, let Piper Jaffray be your guide. Bob DeSutter Co-Head of Health Care

2 Jon W. Salveson Senior Head of Investment Banking Robert A. DeSutter Co-Head of Health Care Stuart M. Duty Co-Head of Health Care Daniel J. Gulbrandson Richard M. Innenberg Roderick J. O Neill roderick.j.oneill@pjc.com David L. Parrot david.l.parrot@pjc.com Brett A. Skolnik brett.a.skolnik@pjc.com *Source: Securities Data Corporation 27 LOCATIONS SERVING THE CAPITAL MARKETS INCLUDING 25 U.S. OFFICES, LONDON AND SHANGHAI Since Member SIPC and NYSE. Piper Jaffray Ltd. is an affiliate of Piper Jaffray & Co., incorporated under the laws of England and Wales, authorized and regulated by the Financial Services Authority and a member of the London Stock Exchange Piper Jaffray & Co. 1/07 CM GLS

3 LEADERSHIP IN HEALTH CARE INVESTMENT BANKING We ve been where you want to go. Record year in 2006 and tremendous momentum and growth initiatives for 2007 #1 underwriter in the life sciences industry in the aggregate U.S. and UK markets* Raised more than $8 billion in worldwide health care equity, convertible and debt offerings More services on more continents and in more health care markets than ever Intensely focused on serving the investment banking needs of premier companies within the Biotechnology, Medical Technology, Life Science Tools and Diagnostics and Health Care Services sectors

4 PUBLIC, PRIVATE, CONVERTIBLE & DEBT SECURITIES Select 2006 Transactions $174,702,250 $138,941,250 38,200,000 26,300,000 CO-LEAD MANAGED & OPEN OFFER 14,500,000 $9,550,000 $1,032,000,000 $148,350,000 PIPE $103,974,093 CHF88,500,000 $80,000,000 $52,900,000 CONVERTIBLE OFFERING $117,012,500 $120,000,000 $96,600,000 $310,500,000 LEAD ADVISOR 2 1 /2% CONVERTIBLE SUBORDINATED NOTES AMERICAN DEPOSITORY RECEIPT $151,800,000 $91,072,920 11,000,000 $16,779,966 CONVERTIBLE OFFERING CO-LEAD MANAGED AND OPEN OFFER REGISTERED DIRECT AUGUST 2006 $13,000,000 $12,000,000 $430,000,000 $100,695,110 SERIES F CONVERTIBLE PIPE LEAD ARRANGER SENIOR DEBT PLACEMENT LEAD BOOKRUN AUGUST 2006 AUGUST 2006

5 $45,200,000 45,000,000 $25,000,000 $373,750,000 SERIES C CONVERTIBLE SERIES A CONVERTIBLE CONVERTIBLE OFFERING $180,000,000 $21,500,000 $20,925,000 $62,560,000 SUBORDINATED DEBT BRIDGE PROVIDER AND ARRANGER SERIES A CONVERTIBLE $131,997,000 $63,429,672 45,520,000 29,300,000 PIPE AND OPEN OFFER $50,600,000 $40,000,000 35,000,000 $3,000,000,000 REGISTERED DIRECT SENIOR NOTES $149,011,250 $115,920,000 $97,290,000 $36,453,684 $72,480,000 $179,774,156 $66,507,493 $24,917,424 FUNDED EXCHANGE OFFER FOR 6.5% CONVERTIBLE NOTES

6 MERGERS & ACQUISITIONS $220,000,000 $38,000,000 $131,000,000 $25,800,000 HAS AGREED TO BE ACQUIRED BY HAS AGREED TO DIVEST ITS AESTHETICS BUSINESS TO ANNOUNCED ANNOUNCED $71,500,000 $58,000,000 $20,000,000 $245,000,000 $715,000,000 $95,500,000 A PORTFOLIO COMPANY OF THE RIVERSIDE COMPANY A PORTFOLIO COMPANY OF OLYMPUS PARTNERS $94,000,000 $35,000,000 DERMAGRAFT AND TRANSCYTE ASSOCIATED CENTER BUSINESS ASSETS HAVE BEEN ACQUIRED BY MAY 2006 MAY 2006 $518,600,000 $38,100,000 26,000,000 A PORTFOLIO COMPANY OF BEAR STEARNS MERCHANT BANKING