John A' Scarlett, MD Chief Executive Officer Nasdaq: TRCA

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John A. Scarlett, MDChief Executive Officer
Nasdaq TRCA
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Forward-Looking Statement

• Our presentation today includes forward-looking
  statements relating to 2008 revenues and year end
  cash guidance, 2011 revenue goals, projections of
  markets and profitability, prospects for
  Tercicas growth hormone and IGF-1 combination
  product and pipeline candidates, and our
  expectations, beliefs and plans, all of which
  involve significant risks and uncertainties.
  There are important factors that could cause our
  actual results to differ materially from our
  forward-looking statements. For a detailed
  discussion of these factors, we refer you to
  Tercicas most recently filed Form 10-K for the
  fiscal year ended December 31, 2008 filed with
  the SEC on February 28, 2008. Furthermore, the
  content of this presentation contains
  time-sensitive information that is accurate only
  as of the date of the live broadcast, March 27,
  2008. Tercica undertakes no obligation to revise
  or update any statements to reflect events or
  circumstances after the date of this presentation.

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Endocrine company with a broad and diversified
product portfolio
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Investment Summary

• Two commercial products
• Increlex for short stature
• Somatuline Depot for acromegaly
• Full commercial infrastructure in place
• Combined revenue guidance of 30 to 37M in 2008
• Revenue goal gt100M in 2011 for each product
• Robust pipeline
• Phase III Label extension for Increlex in
  primary IGF-1 deficiency
• Phase II Next generation growth hormone
  (combination of GH/IGF-1)
• Phase II Opt-in rights for IGF-1 for myotonic
  muscular dystrophy
• Rights of first refusal for Ipsens endocrine
  pipeline
• 2007 Year-end cash 113 million

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Acromegaly

• Non-malignant pituitary tumor
• Excess growth hormone and IGF-1
• Significant morbidity and mortality1,2
• 15,000 patients in U.S. and Canada
• gt50 receive drug therapy
• Sandostatin LAR - Market Leader
• Somatostatin Analog
• Decreases GH secretion

1Orme, SM et al. JCEM 83 2730-4, 1998
2Clayton, RN. J Endocrinol 155 (Suppl 1) S23-9,
1997
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Acromegaly Market

• Sandostatin and Sandostatin LAR
• Market leader for somatostatin analogs
• 2007 U.S. CDN revenues 450 million
• Acromegaly market size 160 million
• Other large indication neuroendocrine tumors
  (NET)
• Somatuline Depot in acromegaly
• Superior convenience and attractive
  pharmacokinetic profile
• Proven track record in Europe
• 2007 Sales of 103.6M (160M)
• Up 12.4 vs. 2006

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Somatuline Depot - Ease of Administration
¾ (2 cm) long 19 gauge needle
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Sandostatin LARReconstitution and
Administration
1 ½ (4 cm) long 19-gauge needle
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Strong Competitive Positioning
Route of Administration
?
Subcutaneous
Intramuscular
?
0.3 mL
2.0 mL
Volume Injected
?
20 mm
40 mm
Needle Length
Formulation
Ready-to-usePrefilled Syringe
?
Powder for Reconstitution
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Minimizing Injection-Related Adverse Effects and
Technical Problems
Evaluations at final Sandostatin LAR injection,
and after 24 wks of Somatuline Depot (n25)
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Plt.001
9
3
2
1
1
Percent of patients in whom technical problems
were encountered during prior 6 months of
treatment on Sandostatin LAR and Somatuline Depot
Plt.001
76
0

• Alexopoulou O et al. Eur J Endocrinol 2004 151
  317-324

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Current Status and Guidance

• U.S. launch in mid-November 2007
• 2008 Revenue guidance of 10 to 15M
• 2011 revenue goal gt100 million
• Neuroendocrine Tumors (NET) opportunity
• Doubles revenue potential
• Upcoming FDA dialogue regarding study protocol
  designs
• If positive, clinical trials to start by year end
  2008

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Increlex
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Role of GH IGF-1 in Promoting Growth and Normal
Body Composition
GH/IGF-1 Axis
Growth Hormone
Pituitary
IGF-1
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Short Stature Market
? GH secretion
GH resistance
Non-GH Deficient Short Stature
GH Deficiency1
100,000 Patients2
20,000 Patients2
True GHD

• Suboptimal GH response
• Disease or condition?
• 10-15 rhGH penetration
• Susceptible to improved treatment option

• 90 penetration

1Includes TS, SGA, CRI, PWS 2Approximate
number seen by Ped Endos F inkelstein et. Al.
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Growth Hormone Short Stature Market
Non-GH Deficient Short Stature100,000 Patients
GH Deficiency 20,000 Patients
IGF-1 Deficiency30,000 Patients1
SeverePrimary IGFD 6,000
PrimaryIGFD 24,000
True GHD
IGF-1
1NCGS Analysis
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Increlex in Severe Primary IGFD

• 3 year old girl
• Almost no growth for 2 years
• Height 31 inches (-3.9 SDS)
• IGF-1 35 ng/ml (51-303 normal)
• 20 lbs
• 6 mo on growth hormone
• Gained ¾ inch (4.5 cm/yr)
• 6 mo on Increlex
• Gained 1.8 inches (12.5 cm/yr)
• No adverse events

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Expand to Primary IGFD
Non-GH Deficient Short Stature100,000 Patients
GH Deficiency 20,000 Patients
IGF-1 Deficiency30,000 Patients1
SeverePrimary IGFD 6,000
PrimaryIGFD 24,000
True GHD

• MS301 Registration study in Primary IGFD
• Completed enrollment mid-07, data Q4-08
• MS308 Exploratory study as once-daily
• Completed enrollment mid-07, data Q4-08

IGF-1
1NCGS Analysis
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Increlex - Attractive Market Dynamics

• Cumulative patient accrual
• Some patients may stay on therapy 10 years
• Weight-based dosing
• First year net revenues to TRCA of 16K grow to
  about 38K by Yr 6
• Sole IGF-1 therapy
• Orphan drug exclusivity through 2013, patent
  coverage through 2018
• 2007 revenues of 9.6 million
• 2008 revenue guidance of 20 to 22 million
• 2011 revenue goal gt100 million

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Next Generation Growth Hormone Products
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Combination Products

• TRCA worldwide license for Nutropin AQ for
  development of a combination product with
  Increlex
• No upfront or milestone payments to Genentech
• Tercica lead development party
• Genentech has opt-in rights at completion of
  Phase 2
• Multiple potential indications
• Short stature gt2 billion
  worldwide market
• Adult GH deficiency gt500 million worldwide
  market
• Metabolic indications Billions

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Short Stature

• Thesis Improved efficacy will trump convenience
  and cost
• GH fails to deliver optimal catch-up growth in
  many patients
• GH deficient patient 10-11 cm first year
  growth
• Average short stature patient 7-9 cm first year
  growth
• Addition of IGF-1 to GH has shown synergistic
  effects in animals

Hypox Rats
GH IGF-1
80

GH
Longitudinal Bone Growth
IGF-1
60
(µm/day)
40
Excipient
20
0
plt0.05 vs all groups
Clark et al (1995)
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Phase II Short Stature Study

• 100 pt, 25 site, open-label, randomized, parallel
  group comparison
• Fixed daily doses 3 combination arms (ratios of
  GHIGF-1) vs. GH alone
• Primary endpoint Height velocity during first
  year of treatment
• gt90 power to detect a 2 cm/yr difference for any
  combination vs. GH
• Goals
• Demonstrate efficacy and safety compared to GH
• Choose suitable combination ratio for Phase III
• First patient enrolled Jan 2008
• 18 mo planned enrollment period

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Next Generation Growth Hormone Product Adult GH
Deficiency and Metabolic Markets
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GH IGF-1 in Adult Growth Hormone Deficiency

• Adult GH Deficiency
• Increased visceral adipose tissue (VAT),
  decreased lean body mass
• GH improves body composition (regulatory
  endpoint)
• Decreased fat mass (e.g. fat)
• Increased lean body mass (e.g. muscle)
• Synergistic effect of GH IGF-1 on body
  composition
• Phase II start before YE08 subject to FDA input

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Potential Role for GH IGF-1 in Metabolic Disease

• Metabolic Syndrome and/or Obesity
• Abdominal Obesity Increased visceral adipose
  tissue (VAT) low GH
• VAT associated with insulin resistance, increased
  CV risk, IGT, risk of T2DM
• AGHD good surrogate for these conditions
• GH alone inadequate
• Decreases VAT, but has anti-insulin effect
• IGF-1 also reduces VAT, but improves insulin
  sensitivity
• Combo thesis
• VAT decreased (GH IGF-1)
• Insulin sensitivity/HgbA1c maintained or improved
  (IGF-1)

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Synergistic Effects of GH IGF-1 on Fat in
Obesity
ObesePostmenopausalWomen (n33)
Change In Fat Mass in 12 weeks (kg)
Thompson et al JCEM 83 1477-84 (1998)
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Additional Pipeline Opportunities

• Tercica Opt-in rights for Iplex Myotonic
  Muscular Dystrophy (MMD)
• Insmed estimates market size of 800-1,400
  million
• No FDA approved therapies
• Insmed initiated a Phase III enabling Phase II
  study in November 2007
• Phase III enabling clinical data trigger for
  Tercica opt-in
• Commercial rights with 5050 Profit share
• Ipsens Endocrine Product Candidates
• Framework established for joint clinical
  development with Ipsen if Right of First
  Negotiation exercised

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2008 Financial Guidance
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2008 Financial Guidance

• Revenue
• Increlex Net product sales 20-22 million
• Somatuline Depot Net product sales 10-15
  million
• Expenses (Including FAS 123 expense of 7-8M)
• RD expenses 29-31 million
• SGA expenses 50-52 million
• Manufacturing Start-up costs 4 million
• Amortization 3 million
• Gross Margins 50 of net product sales
• Year End Cash 40 million

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Investment Summary

• Two commercial products
• Increlex for short stature
• Somatuline Depot for acromegaly
• Full commercial infrastructure in place
• Combined revenue guidance of 30 to 37M in 2008
• Revenue goal gt100M in 2011 for each product
• Robust pipeline
• Phase III Label extension for Increlex in
  primary IGF-1 deficiency
• Phase II Next generation growth hormone
  (combination of GH/IGF-1)
• Phase II Opt-in rights for IGF-1 for myotonic
  muscular dystrophy
• Rights of first refusal for Ipsens endocrine
  pipeline
• 2007 Year-end cash 113 million

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For further information, please contact Fredrik
Wiklund Senior Director of Investor Relations and
Corporate Development Tercica, Inc. 2000 Sierra
Point Parkway Suite 400 Brisbane, CA
94005 1.650.624.4992