About IFF

LIFE SCIENCES OPPORTUNITY

Following is a summary of the factors that CFIG, which is the manager of the fund and the fund investment group of Credit Suisse, believes will contribute to the creation of value in the life science sector in the future.

RISE IN HEALTH CARE SPENDING

Healthcare spending in the U.S. has risen steadily for more than three decades, and is expected to continue to grow. It has been estimated that the compound annual growth rate for healthcare spending will be 7.1% for the period from 2002 to 2012. Healthcare spending is expected to total $1.7 trillion in 2003, which represents approximately 15.2% of U.S. gross domestic product. This percentage is expected to increase to 17.7% by 2012.

AN AGING POPULATION

Industry experts believe that the current generation of Americans, aged 35 to 54, will generate increased demand for health care services and prescription drugs due to favorable demographic trends such as longer life span and a substantial aging segment of the population (12.4% of population 65 years or older). Expect aging "baby boomers" to target health care spending on drugs and services that promise prolonged life or enhanced quality of life. Moreover, aging Americans will place a premium on better medical care and medicines of convenience. These trends should create ample opportunities for R&D in the development of a single drug addressing multiple ailments, or the invention of noninvasive means of monitoring conditions that currently require the use of needles or blood draws.

FAVORABLE ENVIRONMENT FOR SMALLER COMPANIES

Small biotech companies have increasingly benefited from the misfortune of large pharmaceutical institutions. Many large pharma companies, unable to satisfy revenue and earnings growth expectations, now outsource their research programs to smaller institutions. Furthermore, in an effort to boost product pipelines, many large pharmaceutical companies engaged in mega-mergers, such as Glaxo Wellcome and SmithKine Beecham or Pfizer and Pharmacia. This trend propelled many highly skilled scientists and executives displaced in such mergers to form their own start-ups or to join established life sciences companies. Small Indiana-based companies working to develop technologies transferred out of Indiana's Universities, or large Indiana-based companies such as Eli Lilly can take advantage of a highly skilled workforce trained in some of the nation's leading pharmaceutical concerns.

CONTINUED INCREASE IN LIFE SCIENCES FUNDING

Governments worldwide have gone to great lengths to create biotechnology friendly business environments with the expectation of enhancing commitments to the life sciences industry. The US, for example, has done so by offering R&D tax credits, building biotech incubator facilities, and in some cases even forming their own venture capital funds in recognition of the importance of the life science sector. As a result, the budget for the US National Institute of Health has doubled since 1998.

SEQUENCING OF THE HUMAN GENOME

The mapping of the human genome has opened the door for exciting possibilities within healthcare, most notably the introduction of "personalized medicine". Since 1995, the number of FDA-approved biotech products has nearly quadrupled, accounting for over $25 billion in sales in 2002. During that same period, the industry has created more than $180 billion in new equity market value; total market capitalization has risen from approximately $40 billion in 1995 to over $225 billion today. These trends will continue to stimulate the creation of outstanding venture capital investment opportunities. In this context, the Indiana Proteomics Consortium is well positioned to leverage the analytical chemistry expertise of Indiana's universities in collaboration with large pharmaceutical concerns present in the State.

INDIANA LIFE SCIENCES SUB-SECTORS

The Fund will identify investment opportunities positioned to take advantage of Indiana's unique capabilities in research and life sciences in the following broadly defined sectors:

MEDICAL DEVICES & DIAGNOSTICS

Market potential for this sector continues to grow as rapid technological breakthroughs have begun to address unmet medical needs through the development of innovative diagnosis and treatments for chronic diseases.

PHARMACEUTICALS

The pharmaceutical sector continues to generate opportunities for growth as a result of increased use of pharmaceutical drugs. This trend can be attributed to the changing demographics of the population, the increased use of prescription drugs as preventative treatment and the development of more effective prescription drugs.

BIOTECHNOLOGY

Technological advancements in genomics and proteomics are revolutionizing the drug discovery process and are creating an enormous opportunity to develop new drugs.

HEALTHCARE SERVICES AND INFORMATION TECHNOLOGY

Within the sector, there is a significant opportunity for businesses that capitalize on generating cost efficiencies and improving patient outcomes. This includes implementing a shift towards paperless healthcare transactions, which will not only reduce costs, but will also track patient data more efficiently and effectively.