Transcript Format 1 – Sample Bullet Slide

John A. Scarlett, MD
Chief Executive Officer
Nasdaq: TRCA
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 Tercica’s 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 Tercica’s 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.
2
Endocrine company with a broad and
diversified product portfolio
3
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 >$100M 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 Ipsen’s endocrine pipeline

4
2007 Year-end cash: $113 million
5
Acromegaly

Non-malignant pituitary tumor
– Excess growth hormone and IGF-1

Significant morbidity and mortality1,2

15,000 patients in U.S. and Canada

>50% receive drug therapy

Sandostatin® LAR® - Market Leader
– Somatostatin Analog
– Decreases GH secretion
1Orme,
6
SM et al. JCEM 83: 2730-4, 1998
2Clayton,
RN. J Endocrinol 155 (Suppl 1): S23-9, 1997
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
7
Somatuline Depot® Ease of Administration
¾” (2 cm) long 19 gauge needle
8
Sandostatin® LAR®
Reconstitution and Administration
1 ½” (4 cm) long 19-gauge
needle
9
Strong Competitive Positioning
Sandostatin® LAR®
Somatuline® Depot
Route of
Administration
Intramuscular
Subcutaneous

Volume Injected
2.0 mL
0.3 mL

Needle Length
40 mm
20 mm

Formulation
10
Powder for
Reconstitution
Ready-to-use
Prefilled Syringe

Minimizing Injection-Related Adverse
Effects and Technical Problems
Evaluations at final Sandostatin LAR injection, and after 24 wks of Somatuline Depot (n=25)
19
20
20
20
15
15
15
10
10
10
5
0
1
Erythema
1
3
5
0
P<.001
5
0
Pain
Sandostatin
LAR (n=25)
9
2
Somatuline
Depot (n=25)
Swelling
Percent of patients in whom technical problems were encountered during prior 6 months
of treatment on Sandostatin LAR and Somatuline Depot
P<.001
100%
76%
80%
60%
40%
20%
0%
0%
Technical Problems
Encountered
Alexopoulou O et al. Eur J Endocrinol 2004; 151: 317-324
11
Current Status and Guidance

U.S. launch in mid-November 2007

2008 Revenue guidance of $10 to $15M

2011 revenue goal >$100 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
12
Increlex®
13
Role of GH & IGF-1 in Promoting Growth
and Normal Body Composition
GH/IGF-1 Axis
Pituitary
Growth Hormone
IGF-1
14
Statural Growth
Normal Fat
Normal Muscle
Short Stature Market
GH secretion
GH resistance
GH Deficiency1
20,000 Patients2
Non-GH Deficient Short Stature
100,000 Patients2
“True”
GHD
• 90% penetration
• Suboptimal GH response
• Disease or condition?
• 10-15% rhGH penetration
• Susceptible to improved treatment option
1Includes
15
TS, SGA, CRI, PWS
2Approximate
number seen by Ped Endos; F inkelstein et. Al.
Growth Hormone Short Stature Market
GH Deficiency
20,000 Patients
Non-GH Deficient Short Stature
100,000 Patients
IGF-1 Deficiency
30,000 Patients1
“True”
GHD
Primary
IGFD
24,000
Severe
Primary
IGFD
6,000
IGF-1
1NCGS
16
Analysis
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
17
Expand to Primary IGFD
GH Deficiency
20,000 Patients
Non-GH Deficient Short Stature
100,000 Patients
IGF-1 Deficiency
30,000 Patients1
“True”
GHD

MS301: Registration study in Primary IGFD
– Completed enrollment mid-07, data Q4-08

Primary
IGFD
24,000
Severe
Primary
IGFD
6,000
IGF-1
MS308: Exploratory study as once-daily
– Completed enrollment mid-07, data Q4-08
1NCGS
18
Analysis
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
19

2007 revenues of $9.6 million

2008 revenue guidance of $20 to $22 million

2011 revenue goal >$100 million
Next Generation Growth
Hormone Products
20
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

21
Multiple potential indications
– Short stature:
>$2 billion worldwide market
– Adult GH deficiency:
>$500 million worldwide market
– Metabolic indications:
$ Billions
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
Longitudinal
60
Bone
Growth
(µm/day) 40
GH
IGF-1
Excipient
20
Clark et al (1995)
22
0
* p<0.05 vs all groups
*
Phase II Short Stature Study

100 pt, 25 site, open-label, randomized, parallel group comparison
– Fixed daily doses: 3 combination arms (ratios of GH:IGF-1) vs. GH alone
– Primary endpoint: Height velocity during first year of treatment
– >90% 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
23
Next Generation Growth
Hormone Product
Adult GH Deficiency
and Metabolic Markets
24
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
dw/dw rats

Phase II start before YE08
subject to FDA input
8000
6000
Fat
Depot
Weight
(mg)
4000
2000
0
25
Lean Excipient IGF-1
Controls
GH
GH
+IGF-1
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)
26
Synergistic Effects of GH + IGF-1
on Fat in Obesity
Obese
Postmenopausal
Women (n=33)
0
Change
In Fat - 5
Mass in
12 weeks
(kg)
- 10
Placebo
Thompson et al
JCEM 83: 1477-84 (1998)
27
GH alone
IGF-1 alone
0.025 mg/kg
0.015 mg/kg
Combo
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 50:50 Profit share

Ipsen’s Endocrine Product Candidates
– Framework established for joint clinical development with Ipsen if Right of
First Negotiation exercised
28
2008 Financial Guidance
29
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)

R&D expenses
$29-$31 million

SG&A expenses
$50-$52 million

Manufacturing Start-up costs
$4 million

Amortization
$3 million

Gross Margins
~50% of net product sales
Year End Cash
30
$40 million
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 >$100M 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 Ipsen’s endocrine pipeline

31
2007 Year-end cash: $113 million
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