EcoR1 Capital LLC

Item 5.        Fees and Compensation

With respect to the Capital Funds, EcoR1 charges an annual management fee of 2.0% of each
investor’s capital account balance, which amount is payable in quarterly installments at the
beginning of each calendar quarter based on each investor’s capital account balance on that date.
EcoR1 also typically receives a performance-based allocation with respect to each investor equal
to 20% of net profits (including both realized and unrealized gains and losses) otherwise allocable
to such investor. Performance allocations are assessed in arrears on an annual basis (and on
withdrawals with respect to the amount withdrawn), and are only applied to the portion of profits
that exceed the cumulative losses previously allocated to or incurred by clients. EcoR1 complies
with Rule 205-3 under the Investment Advisers Act of 1940, to the extent required by applicable

law. Performance allocations and fees may create an incentive for EcoR1 to make more risky and
speculative investments than it would otherwise make.

Investors in the Venture Funds and the SPVs are all “qualified purchasers” as defined in Section
2(a)(51) of the Investment Company Act of 1940. As a result, detailed information regarding the
fees and compensation payable to EcoR1 and its affiliates by those funds is not required to be
provided herein. EcoR1 and its affiliates are entitled to management fees and performance-based
distributions from the Venture Funds that are calculated differently from the Capital Funds. EcoR1
does not receive a management fee from the existing SPV and the performance-based distributions
are calculated differently from the Capital Funds.

EcoR1 may waive or reduce all or any portion of the management or performance-based
allocations and distributions with respect to any investor or client.

EcoR1 deducts management fees and performance-based allocations and distributions directly
from client accounts.

To the extent that a client invests in mutual funds or ETFs, such client also bears indirectly the
investment advisory fees to the managers of those funds.

EcoR1 and its affiliates (including Mr. Nodelman) sit on company boards of directors or act as
consultants to companies, in which companies EcoR1’s clients may have invested or may invest
in the future. In such cases, EcoR1 or its affiliates may receive consideration for such services
(including cash and securities). EcoR1 will waive a portion of the management fees to which it
otherwise would be entitled in an amount equal to the value of such consideration. EcoR1 may
choose to value the securities (such as options or warrants) and apply the management fee waiver
as of the grant date, the exercise date or the date on which those securities are sold or become
freely tradable.

EcoR1 believes that its fees are competitive with fees charged by other investment advisers for
comparable services. Comparable services may be available, however, from other sources for
lower fees.

Relationships with EcoR1’s investment fund clients are terminable on the termination of the
applicable investment management agreement and, with respect to EcoR1’s investment
partnership clients, on expiration of the partnership’s term, dissolution of the partnership or on
EcoR1’s withdrawal as general partner. An investor in a Capital Fund may withdraw/redeem from
that fund over eight consecutive withdrawal/redemption dates, on specified prior written notice,
on the last day of any June or December beginning on or after the day preceding the first
anniversary of such investor’s admission to the fund. Investors in the Venture Funds and the SPVs
generally cannot withdraw from those funds but receive distributions when provided in the
governing documents for those funds.

In all cases, expenses, the pro rata portion of the management fee and the performance allocation
or fee through the date of termination are charged to the account. All prepaid but unearned
advisory fees are refunded on termination of a client’s account. An investor who withdraws from
a fund on a date other than the last day of a quarter or other appropriate period, however, does not
receive a refund of the management fee previously paid.

Each fund or other client is responsible for its own costs and expenses as detailed in the governing
documents for such fund. Such costs and expenses include, but are not limited to, trading costs
and expenses (such as brokerage commissions, expenses related to short sales, and clearing and
settlement charges), ongoing legal, accounting and bookkeeping fees and expenses, and the fees
and expenses charged by any fund administrator for its accounting, bookkeeping and other
services.

The Capital Funds and the Venture Funds will likely bear more than their pro rata share of
investment expenses (compared to the SPVs). For example, when EcoR1 identifies an investment
opportunity, it will incur research and other out-of-pocket expenses, and will allocate those
expenses between the Capital Funds and the Venture Funds on such basis as it determines fair and
equitable. If an SPV is subsequently established and participates in that investment opportunity,
that SPV may benefit from some or all of those earlier expenses without having to reimburse the
Capital Funds or the Venture Funds. If an investment opportunity for an SPV is identified but not
made, the Capital Funds and/or the Venture Funds would likely bear more than their pro rata share
of any “broken deal” expenses.

EcoR1 bears its own operating, general, administrative and overhead costs and expenses, other
than the expenses described above. All or part of these costs and expenses may be paid, however,
by securities brokerage firms and futures commission merchants that execute clients’ securities
trades, as discussed in Item 12 below.

Item 7.        Types of Clients

EcoR1 provides investment advice to investment funds and may provide investment advice to
other accounts. Investors in the funds are required to invest a minimum of $25 million, but EcoR1
may waive this minimum. EcoR1 generally requires a minimum of $500 million to open an
individually managed account, but may waive this minimum. EcoR1’s separate account clients
may include high-net-worth individuals, institutions, trusts, endowments and pension plans.