Paradigm Biocapital Advisors LP

Item 5: Fees and Compensation

As an investment adviser to the Funds, as further described in the Offering Documents, PBCA receives
an annual management fee generally equal to 1.5%. The management fees are paid by the Master Fund
monthly in advance on the first day of each month, depending upon the net asset value of the Funds
and each particular investment by an Investor in the Funds. Management fees are generally pro-rated
for partial periods. Once paid, management fees are non-refundable.

The Firm or its affiliates may reduce, waive or calculate differently the management fee for certain
Investors, including but not limited to, members, employees and affiliates of PBCA.

Other Fees and Expenses

The Feeder Funds will bear their own expenses and their pro rata share of the Master Fund’s expenses,
including, without limitation, Operating Expenses (as hereinafter defined) and Organizational Expenses
(as hereinafter defined), and shall reimburse PBCA, the General Partner or any of their respective
affiliates for any Operating Expenses and Organizational Expenses incurred by such persons.

Organizational and Initial Offering Expenses

The Feeder Funds will pay or reimburse PBCA, the General Partner, and/or affiliates of PBCA for all
organizational and initial offering expenses of the Funds, including, but not limited to, legal and
accounting fees, printing and mailing expenses and government filing fees (including “blue sky” filing
fees). The Funds’ organizational and initial offering expenses may be, for accounting purposes,
capitalized and amortized by the Funds for up to 60 months from the date the Funds commence
operations. Amortization of such expenses is a divergence from U.S. generally accepted accounting
principles (“GAAP”). In certain circumstances, this divergence may result in a qualification of the
Funds’ annual audited financial statements. In such instances, the Funds may elect to: (i) avoid the
qualification by recognizing the unamortized expenses, or (ii) make GAAP-conforming changes for
financial reporting purposes, but capitalize and amortize expenses for purposes of calculating the
Funds’ Net Asset Value (resulting in a divergence in fiscal year-end Net Asset Values reported in the
Funds’ financial statements, and as otherwise applicable under the provisions of the Offering
Documents). If the Funds capitalize and amortize such expenses and are then terminated within 60
months of their commencement, any unamortized expenses will be recognized. If an Investor in a Fund
makes a withdrawal prior to the end of the period during which the particular Fund is capitalizing and
amortizing expenses, the Fund may, but is not required to, accelerate a proportionate share of the
unamortized expenses based upon the amount being withdrawn and reduce withdrawal proceeds
accordingly.

Operating Expenses

Each Fund will incur its own expenses. The expenses and results of operations of the Master Fund will
be allocated to the Feeder Funds and the other Investors in the Master Fund, in proportion to the
capital accounts of the Feeder Funds and such other investors in the Master Fund, from time to time.

The Funds will pay or reimburse PBCA, the General Partner, and/or affiliates of PBCA for: (i) all
expenses incurred in connection with the ongoing offer and sale of interests, including, but not limited
to, printing of the Offering Documents and exhibits, marketing expenses and documentation of
performance and the admission of Investors, (ii) all operating expenses of the Funds, such as tax
preparation fees, governmental fees and taxes, administration fees paid to the Fund Administrator
providing services to the Funds, costs of communications with Investors, and ongoing legal, accounting,
auditing, bookkeeping, consulting and other professional fees and expenses, (iii) all research, trading
and investment-related costs and expenses (e.g., brokerage commissions, research fees, margin

Paradigm BioCapital Advisors LP                                             Form ADV Part 2A

interest, expenses related to short sales, custodial fees, bank service fees, and clearing and settlement
charges) of the Funds, (iv) technology-related costs and expenses, including, but not limited to,
software licenses, data feeds and colocation expenses, (v) all expenses related to attending any
conference or seminar related to alternative investments (e.g., registration, transportation,
accommodation or meal expenses), (vi) regulatory and other filing fees and expenses, and compliance
costs and expenses of the Funds, including, but not limited to, all fees and expenses incurred by PBCA
and/or its affiliates directly in connection with examinations by the SEC and other regulatory
authorities that are attributable to the Funds, as well as fees and expenses associated with the
completion of regulatory filings that are attributable to the Funds (including, without limitation, Form
PF filings), (vii) travel expenses related to meeting with management teams, or related to any of the
other categories of expenses set forth herein, (viii) any costs and expenses incurred by the Funds in
connection with converting from a “feeder fund” as part of a master-feeder structure into a stand-
alone fund, (ix) director and officer liability insurance or other insurance premiums for any principal
or employee of the Funds, PBCA, the General Partner, or any affiliates of PBCA, (x) all fees and other
expenses incurred in connection with the investigation, prosecution or defense of any claims, assertion
of rights or pursuit of remedies, by or against the Funds, including, without limitation, professional and
other advisory and consulting expenses, and (xi) any and all costs and expenses incurred in connection
with the dissolution, winding-up, or termination of one or more of the Funds.

Each of PBCA, the General Partner, or any affiliates of PBCA, in its sole discretion, may from time to
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Item 7: Types of Clients

Paradigm BioCapital Advisors LP                                           Form ADV Part 2A

Currently, PBCA provides investment advice to the Funds and the SMA. Each of the Funds set forth
the eligibility criteria and minimum investment requirements for Investors. Initial and additional
subscription minimums are disclosed in the Offering Documents for each Fund, which may be waived
at the discretion of PBCA.

Each Investor generally must be (i) an “accredited investor”, as defined in Regulation D under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and (ii) a “qualified client”, as defined in
the Advisers Act. The subscription agreement contains representations and questionnaires relating to
these qualifications.

The minimum initial investment that will be accepted from a prospective Investor into the Feeder
Funds is $5,000,000. The minimum additional capital contribution that will be accepted from an existing
Investor is $250,000. In each case, PBCA has discretion to accept lesser amounts.

In addition to providing investment management services to the Funds, PBCA may advise other clients
in the future that may include additional private funds or separately managed accounts.