RTW Investments LP

Item 5: Fees and Compensation

Detailed information with respect to how RTW is compensated for the advisory services it
provides is contained within the offering document for each Fund. Generally, RTW is
compensated by the receipt of management fees and certain performance-based fees as
described below. Prospective investors should carefully review the offering documents for the
relevant investment vehicle prior to making an investment.

As compensation for its services, RTW will generally receive a management fee in accordance
with the offering documents. RTW will receive from the Flagship Fund an annual management
fee of 2.00% or 1.25% of each Limited Partner’s Basic Capital Account and any Designated
Capital Accounts (as those accounts are defined in the offering documents) to be collected
on a monthly basis in advance (0.167% or 0.104%, respectively, to be collected per month).

RTW will receive from the Innovation Fund an annual administrative allocation of 2.00% or1.25%
of the net asset value of each Limited Partner’s Basic Capital Account and any Designated
Capital Accounts (as those accounts are defined in the offering documents) to be collected

RTW Investments, LP                                                          Form ADV Part 2A
on a quarterly basis as of the last day of the fiscal quarter (0.50% or 0.3125%, respectively, to
be collected per quarter), provided there were net profits equal to the applicable
administrative allocation during that quarter. If all or a portion of the administrative allocation
for any quarter has not been allocated due to insufficient net profits, the unallocated portion
of such administrative allocation (the “Unallocated Amount”) will be rolled over and
added to the administrative allocation for the following quarter and any future quarter. If
there were a net loss for each of the immediately preceding four consecutive quarters, then
the Unallocated Amount shall be reduced by the administrative allocation that was not made
in respect of each of those four preceding consecutive quarters. For the avoidance of doubt,
the administrative allocation is not subject to a loss carryforward and will be made even if
the Innovation Fund is below its high-water mark.

RTW will receive management fees from the Royalty Fund in an annual amount equal to (i)
during the investment period which begins after the first investor closing (“Initial Closing”)
and will end on the third anniversary of the Initial Closing (“the Investment Period”), the
product of 2.0% and “Net Invested Capital” (generally, with respect to each investment, the
lesser of cost and fair market value), and (ii) after the Investment Period, the product of 2.0% and
Net Invested Capital.

RTW will receive from the Biotech Opportunities Fund an annual management fee of
1.25% of the net asset value to be collected on a monthly basis in advance (0.104%, to be
collected per month). The monthly management fee for the Flagship Fund and the Biotech
Opportunities Fund, the quarterly administrative allocation for the Innovation Fund, and
the quarterly management fee for the Royalty Fund will be drawn from the Flagship Fund,
the Biotech Opportunities Fund, the Innovation Fund, and the Royalty Fund respectively,
and paid or allocated to RTW.

Management fees are deducted from the relevant Funds’ account by the applicable Funds’
administrator. At its sole discretion, RTW may elect to waive or modify the management
fee or administrative allocation for investors who are members, partners, employees or
affiliates of RTW, relatives of such persons and for certain strategic investors.

RTW is responsible for all overhead expenses, including office rent; furniture and fixtures;
stationery; secretarial/internal administrative services; salaries and bonuses; entertainment
expenses; employee insurance and payroll taxes. All other expenses are paid by the Funds and
include the management fees; expenses incurred in connection with identifying, evaluating,
researching (including attending related industry conferences), structuring and negotiating
proposed Fund investments (including those that are not ultimately consummated by the
Funds), as well as research related travel and associated meals and entertainment; expenses
associated with investment monitoring, such as meetings with portfolio company management
teams (including meetings of the board of directors); the Funds’ organizational expenses; Fund-
related compliance expenses; valuation expenses; brokers’ or other third-party deal sourcers’
fees and expenses (including retainers and similar fees and advancement of expenses), sales
commissions and fees, commitment fees, non-refundable deposits and costs and expenses
incurred in connection with the acquisition or disposition of actual or potential investments
(whether or not consummated); principal and interest and fees, commissions, costs and
expenses and other amounts payable related to or arising from any indebtedness, any
subscription facility, guarantees or hedging activities of the Funds (including in connection
with the negotiation and establishment of the relevant subscription facility, credit support or
other relevant arrangements); costs related to the operations of the Funds, including, without
limitation, fees, costs and expenses of any third-party administrator, software, experts,
appraisers, custodians, outside counsel, advisors, bona fide consultants, accountants, auditors,
tax return preparers and other professionals, including expenses associated with the
preparation of the financial statements and tax returns and other tax filings of the Funds and
its subsidiaries; expenses related to organizing, maintaining, operating, restructuring, winding
up, liquidating and/or dissolving entities through or in which investments may be made
(including any general partner (or equivalent) of such entities); taxes and other governmental
...

Item 7: Types of Clients

The Firm’s clients are the Funds. The initial and additional subscription minimums for each
Fund are disclosed in the offering documents which are provided to investors or prospective
investors of the Funds.