Deerfield Management Company: investment adviser

An affiliate of the Firm, Deerfield Mgmt, L.P., Deerfield Mgmt HIF, L.P., Deerfield Mgmt HIF II, L.P., Deerfield Mgmt HIFIII, L.P.,Deerfield Mgmt III, L.P. , Deerfield Mgmt IV, L.P. , Deerfield Mgmt V, L.P. , or Deerfield Mgmt SGF, L.P. as applicable, is the general partner for those Funds organized as limited partnerships (each, a “General Partner”). Each General Partneris located at the Firm’s office in New York City. The Firm conducts its investment advisory businessprimarily from its office in New York City. The Firm conducts market and regulatory research on the global healthcare industry from its office in New York City. The Firm provides operational support to some portfolio companies from its New York City office and an office at: Deerfield Management Company,L.P. 300 Interpace Parkway (C3) Parsippany, NJ 07054 A subsidiary of the Firm, Deerfield Discovery and Development, LLC (“ 3DC”), facilitates the incubation, development and operations of certain portfolio companies , and is managedfrom the Firm’s New York City office. An affiliate of the Firm, Genscience LLC (“ Genscience”), provides scientific and technical support related to geneticsto certain portfolio companies and third parties. An affiliate of the Firm , 345 PAS Holding LLC, owns property and a building located at 345 Park Avenue South, referred to as the Cure, and is the landlordfor the Cure. Health Innovation Management, LLC, also an affiliate of the Firm, is the property manager for the Cure . The Firm’s headquarters, itsNew York City office, is located in the Cure. The Cure is a healthcare innovation centerin New York City,designed toprovide laboratories, engineering and computing space, and otherfacilities and servicesto scientists, entrepreneurs and organizations in the healthcare spaceand beyond, including portfolio companies of the Funds.Another affiliate of the Firm, Cure Experience Services LLC, providesancillary services to guests and residents at the Cure and operates a co-working space at the Cure. Certain portfolio companies reimburse or pay the Firm and/or its affiliate(s) for certain services, goods, intellectual propertyand facilitiesprovided by the Firm and/or its affiliates to or for the benefit of such portfolio companies, subject to the governing documents of each Fund.

A subsidiary of the Firm, Deerfield Doha, LLC (“ Deerfield Doha”) established a location in Doha, Qatar in 2025 to foster the Qatari innovation ecosystemby supportingthe upskilling of startups and entrepreneurs , coordinating educational programming, and serving as a resource hub for healthcare -focused activities in the region. Deerfield Doha does not perform any investment advisory functions. As used herein, the term “client” generally refers to each of the Funds. B.

Advisory Services

Each of the Funds has engaged the Firm as its discretionary investment manager. In that capacity, the Firm manages the assets of each Fund and invests the assets of the Funds in accordance with each Fund’s investment strategy. The Firm conducts extensive fundamental research into healthcare sector investment opportunities, including research on individual companies, products and services, drug and device development pipelines,early stage medical research at research institutions,clinical trials, specific product and service markets, intellectual property protection and litigation, political and regulatory developments, evolving business trends and the dynamics of publicand private securities markets. The Firm makes use of this fundamental research to identify investment opportunities, determine how best to structure or “express” an investment thesis, direct the purchase and sale of securities, negotiate structured investment trans actions, support the operations of certain portfolio companies and generally manage and invest the assets of the Funds. The Firm also utilizes analytical, quantitative, systematic and algorithmic techniques or strategies to develop differentiated views on securities and identify investment opportunities . The particular investment objectives, strategies, fees and risks of each Fund, and other relevant information, are contained in each Fund’s confidential offering documents (each, a “ Memorandum”). C.

Tailoring Services to Client Needs

The Firm’s investment management services adjust to accommodate each Fund’s investment strategy, as set forth in each Fund’s Memorandum. In the case ofDeerfield Partners, L.P., whichutilizes the Public Securities Strategy (described below), the Firm expresses its investment theses primarily through exchange traded securities, including derivatives, although italso invests in non-exchange traded securities and in privately structured debt with publicly traded companies . Up to 15% of such Fund’s investments may be in illiquid securitiesand other assets (as defined in the Fund’s governing document). In the case of Funds on whose behalf the Firm utilizes the Private Design Strategy (described below) (the “ Private Design Funds”), the Firm may generally direct investments in any type of asset (subject to the limitations specified in the applicable Fund Memorandum) and employ a variety of transaction structures. Lastly, in the case of the Funds on whose behalf the Firm utilizes the Healthcare Innovations Strategy (described below) (the “Innovations Funds”), the Firm focuses on early stage investing. The Firm has established an advisoryboard (the “Advisory Board”) with which the Managing Partner consults on a periodic and as needed basis regarding the Firm’s management of the Funds. The Advisory Board consists of persons selected bythe Managing Partnerwho are representatives of institutional investors and who have been asked bythe Managing Partnerto serve on the Advisory Board. The size of the Advisory Board is determined by the Managing Partner and may be increased or decreased by him. The subjects addressed by the Advisory Board may include communications between the Firm and Fund investors, the allocation or structuring of investments that affect more than one Fund, strategic development of the Firm, conflicts of interest, amendments to Fund documents and such other matters as may be identified by the

Managing Partneror members of the Advisory Board. The organizational documents of certain Funds also delegate to each such Fund an advisory committee with the authority to advise on or approve certain conflicts of interest andactions proposed by the General Partner of a Fundthat are applicable specifically to such Fund. Members of the Firm’s Advisory Board and of a Fund ’s advisory committee, where applicable, serve without compensation or other pecuniary benefit. Members of the Firm’s Advisory Board may, and currently do, serve as members on one or more Fund advisory committees. Similarly, members ofa Fund’s advisory committee may, and currently do, sit on one or more other Fund advisory committees. Such overlap may create a conflict of interestfor certain memberswho have an incentive to favorthe Fund in which it has the greatest economic interest. D.

Wrap Fee Programs The Firm does not currently provide any investment management services in a wrap fee program. Assets under Management

All Fund assets are managed by the Firm solely on a discretionary basis. As of December 31, 2025, the Firm managed approximately$19,084,000,000 on a discretionary basis.The foregoing is computed using the same method used to report “regulatory assets under management” in Item 5.F in Part 1A of the Firm’s Form ADV. The information provided above about the investment advisory services provided to the Funds is qualified in its entirety by reference to the relevant Fund ’s governing documents andMemorandum.

The Firm and/or the applicable General Partnerhas waived or reduced and may waive or reduce management fees and/or performance-based compensation due with respect to certain investors, including investors who are present or former partners or employees of the Firm or its affiliates and their respective family members and related entities , operating partners and others the Firm determines provide or provided value to the Firm as well as certain investors in Deerfield Private Design Fund V, L.P . The use of fund -level borrowing, including subscription line facilities or other credit facilities, may increase or extend the base on which management fees are calculated (for example, where management fees are calculated with reference to invested capital, cost or other metrics that reflect a borrowing component). The fees applicable to each Fund are disclosed in the Memorandum for such Fund.

Management fees generally range from 0. 50% to 1.75% annually, and will generally be reduced dollar for dollar, but not below zero on a going forward basis, by directors’ fees, consulting fees, advisory fees, transaction fees, commitment fees, broken deal fees or other similar fees received by the Firm from investments made by a Fund (excluding any fees or other such remuneration received by any discovery specialist (generally employees or consultants of the Firm, 3DC or its affiliates who principally support the discovery activities and other operations of one or more portfolio companies and research projects, including persons who are scientific specialists, persons who may serve on a scientific advisory board, persons who are regulatory specialists, manufacturing specialists, intellectual property speci alists, chief medical officers, chief science officers, recruiting specialists, clinical trial specialists, scientific collaboration directors and engineers (“Discovery Specialists ”)), operating partners (including interim operating partners), entrepreneurs-in-residence or other similar consultants to or employees of the Firm or its affiliates). . In addition, the following fees generally do not offset management fees: reimbursement of the Firm’s out -ofpocket expenses relating to a Fund or portfolio company; rent payments for access to facilities owned or leased by theFirm or its affiliates; payments to the Firm or its affiliatesfor the use of services made available through or at the Cure, including catering anddining services, physical security, building use and service , data analytics, programming, event services and space , conferences, lectures and concierge services, video production, graphic design and communications services,and membership and residency programs;fees for the use of or access to equipment or utilities; fees in respect of goods, facilities and intellectual property provided by the Firm or its affiliates; fees in respect of goo ds, facilities, intellectual property and services provided indirectly through third parties; and fees in respect ofDiscovery Specialists. Performance-based compensation is generallyequal to 20% of a Fund’s profits, with the exception of Deerfield Healthcare Innovations Fund, L.P. , which is generally 25% of distributions after 300% of contributed capital with respect to eachportfolio investment has been distributed to investorsuntil 600% of contributed capital with respect to such portfolio investment has been distributed to investors , and thereafter 15% of distributions with respect to such portfolio investment . In Deerfield Partners, L.P., performance-based compensation is subject to a “ modified high water mark” in which the performance based compensation is calculated at one-half the percentage otherwise applicable (that is, 10% instead of 20%) until the sum of accrued net profits for all years subsequent to the previous high water mark (excluding any year in which there is a net loss) e quals 200% of the sum of all accrued net losses for all years subsequent to the prior high water mark (excluding any year in which there is a net profit). In Deerfield Healthcare Innovations Fund, L.P., the performance-based compensation is allocated to the Deerfield Foundation. Performance-based compensation received by the Firm is charged in conformity with Rule 205 -3 under the Investment Advisers Act of 1940, as amended (the “ Advisers Act”). The governing documents of certain Funds utilizing the Private Design Strategy or Healthcare Innovations Strategy provide that such Fund’s management fees will be calculated and charged on a basis that generally is not tied to the Fund’s then-current net asset value.The applicable governing documentsof certain Funds utilizing the Private Design Strategy or Healthcare Innovations Strategy provide that before and including a certain date (the “Fee Reduction Date”), management fees generally will be charged based on a formula tied to the amount of an investor’s capital commitment to the relevant Fund. After the Fee Reduction Date, management fees generally will be charged and calculated based on a formula tied to an investor’s capital commitment to the relevant Fund orcost basis of investments made bythe relevant Fund that have not been disposed of or written off as worthless at a specified date. Accordingly, following the Fee Reduction Date, the amount of management feespayable bysuch a Fund generally will not correspond with fluctuations in the net asset value of individual investments or of a Fund , including following the relevant

investment period, and will not be reduced in connection with any write downs (whether temporary or permanent), except in the case of investments that aredisposed of or written off as worthless at a specified date. In many circumstances, the post -Fee Reduction Date m anagement fee base will include capitalized transaction-specific expenses of unrealized investments. Further, management fees generally will not be reimbursed or refunded under the governing documents in the event of realizations, dispositions or writeoffs that occur partway through the relevant calculation period . The governing documents set forth the full list of terms under which management fees will be reduced, offset, or otherwise limited, and consequently, unless otherwise agreed to by the relevant General Partner, investors should expect to bear the full speci fied managementfee rate in the governing documents until they are reduced in the circumstances and on the date(s) specified therein , if applicable. Notwithstanding the foregoing, with respect to Deerfield Strategic Growth Fund, L.P. (the “Strategic Growth Fund”), the Management Company does not receive a management fee. However, the Management Company will receive an asset based monitoring fee from each portfolio investment of the Strategic Growth Fund, as agreed upon between the General Partnernd a nominating investor with respect to such nominated portfolio investment.Such fee will be calculated by reference to the net asset value of a nominating investor’s interest in the Strategic Growth Fund or another agreed upon value. An affiliate of the Management Company will also receive performance-based compensation pursuant to which it will be entitled to receive, on a portfolio investment-by-portfolio investment basis, a percentage of realized proceeds after invested capital with respect to a portfolio investment hasbeen distributed to investors, as agreed upon between the General Partner and a nominating investor with respect to such nominated portfolio investment. An affiliate of the Management Company will also receive 90% of short -term investment income earned by the Strategic Growth Fund. The General Partner will waive or reduce such performance-based compensation in its sole discretion. Portfolio investment monitoring fees and portfolio investment -based performance -based compensation will be agreed by the General Partner and the relevant nominating investor bilaterally in their sole discretion. As a result, such fees and compensation arexpected to vary by portfolio investment. B.

Payment of Fees

Management fees are payable quarterly and performance -based compensation is generally payable annually or upon a distribution made after all ofa Fund’s investors’ funded capital commitments have been returned (or otherwise when permitted by the Fund’s Memorandum). In the case of Deerfield Healthcare Innovations Fund, L.P., performance-based compensation is payable upon distributionsmade in connection with portfolio investments as provided in the governing documents of the Fund. In the case of the Strategic Growth Fund, performance-based compensationis payableas realized proceeds from portfolio investments and short-term incomes, as applicable, are to be distributed to investors, as provided in the governing documents of the Fund. Management and performance-based fees are paid or allocated directly by each Fund to the Firm or a General Partner or other designated affiliate, or to the Deerfield Foundation in the case of performancebased compensation fromDeerfield HealthcareInnovations Fund, L.P. The applicable General Partner holds a general partner interest in certain of the Funds managed by the Firm and is allocated performance -based compensation in respect of such Funds on the same terms as the performance -based compensation described above. With respect to Deerfield Healthcare Innovations Fund II, L.P., an entity affiliated with the seller of the Cure building is entitled to a minority portion of the applicable General Partner’s performance

based compensation. Certain third parties , including the Deerfield Foundation and Advancium Health Network, receive, or are entitled to receive, a portion of the performance-based compensation received by the applicable General Partner from certain Funds . C.

Other Fees and Expenses

The Funds pay no direct fees to the Firm other than the management fees and the performancebased compensation described above and the fees or reimbursement that are not subject to offset as set forth above (which may be paid by the Funds and/or their actual or prospective portfolio companies) . Each Fund pay s, subject to its governing documents, all expenses related to its operations, including administration, legal, accounting, tax, valuation(including expenses for third party valuation services and independent valuation agents) and audit and director fees and expenses, investment expenses (including brokerage commissions, custodial fees, interest on margin accounts, borrowing charges for securities sold short and short sale dividends, costs related to guarantees of portfolio company obligations,and expenses related to investments, including investments that fail to close), research and data fees and expenses (including third party research charges, expert consultant fees, market survey fees, market and execution data fees , research related technology and tools , and certain scientific and medical periodicals and publications), due diligence expenses;professional fees, including expenses of consultants, bankers, research specialists, quantitative analysis specialists, sub-advisers with special expertise and other experts relating to the investments or operations of the relevant Fund including related overhead and technology costs,filing fees, legal expenses for Fund regulatory filings and compliance, costs relating to any actual or threatened legal proceeding, investigation, litigation or audit involving the Fund, the General Partner, the Firm or their affiliates or personnel in connection with the investments or operations of the Fund, initial offering and organizational expenses and on-going offering expensesincluding legal fees, registration and other filing fees and side letter negotiations, expenses in connection with theFund’s ongoing operations, including updating the Fund’s governing documents, processing transfer or redemption requests, and negotiations with prospective investors, trading counterparties and service providers; insurance costs and indemnification obligations; certain travel expenses, and all other expenses related to theidentification, sourcing,acquisition, management, purchase, sale or holding of investments (including those related to due diligence, informational and diligence platforms, and software, platforms or portals and related infrastructure). The Funds also pay for certain expenses, including , but not limited to, drug and device discovery and development expenses and certain expenses of operations that are provided by third parties through the Firm or 3DC or provided directly by the Firm, 3DC or its affiliates, including the costs of Discovery Specialists. The Firm, in its discretion may, and sometimes does, elect to bear certain Fund expenses, but the Firm has no obligation to do so. Certain of the research expenses paid for by the Funds constitute eligible research services and fall under the safe harbor established under Section 28(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but are nonetheless paid for by the Funds directly as permitted by the applicable governing Fund documents rather than by soft dollars. The Firm generally allocates such research expenses that benefit more than one Fund based on factors such as the relevant Fund’s asset value, leverage and investment activity or the anticipated level of utilization of such research , as the Firm deems fair and reasonable. The Firm and its affiliates, including 3DC,often incur fees, costs and expenses on behalf of more than one Fund. To the extent such fees, costs and expenses are incurred for the account or benefit of more than

one Fund, each Fund will typically bear an allocable portion of any such fees, costs and expenses in proportion to its participationor anticipatedparticipation in a particular investment(subject to the terms of each Fund’s applicable governing documents) or in such other manner as the Firm considers fair and reasonable.With respect to goods, services, facilities and intellectual property provided either by the , Firm its affiliatesor third parties for the benefit of the Funds or their portfolio companies, each Fund will typically bear an allocable portion of such expenses that are not borne by portfolio companies based on allocation methodologies informed by factors such as time spent, anticipated level of participation in the relevant good, facility, intellectual property or service, relative Fund capital commitments, and relative Fund capital available for investment, as the Firm deems fair and reasonable, or in such other manner as the Firm considers fair and reasonable. Allocation determinations involve inherent matters of discretion. Each Fund will likely bear a portion of any applicable expense that is either greater or less than the benefit supplied to such Fund when compared to the benefit supplied to other Funds, portfolio companies or the Firm, including due to timing of payment. Some third party vendors will offer volume or similar discounts that applyto goods and services procured after a threshold is met, such that aFund or portfolio companythat is an early purchaser of goodsor services may pay a higher price thanpaid by the Firm, a Fund or a portfolio company that purchases the same goods or services at a laterdate. The Firm endeavors to allocate fees, costs and expenses on a fair and reasonable basis over time. Notwithstanding the foregoing, the Firm may in the future develop or modify policies and procedures to address the allocation of expenses that differ from its current practice. In the event the Firm presents co-investment opportunities to third parties (which may include investors in the Funds), such co-investors may not under some circumstances agree to bear any, or their proportionate share, of the expenses associated with developing, consummating and monitoring the investment. Where a proposed transaction with potential co -investors is not consummated, broken deal expenses relating to such proposed transaction may be allocated to potential co -investors to the extent practical or pursuant to agreement with such proposed co -investors, or may be fully borne by the applicable Fund(s) that would have made the investment.For example, certainresearch institutions with whichcertain Funds have research collaborations may co -invest in projects funded pursuant to the respective collaboration, and the Funds will bear all expenses associated with developing, and if applicable, consummating and monitoring the investment.As a result, a Fund may bear all or a disproportionate share of broken-deal expenses relative to the anticipated participation of other potential co-investors. This can present a conflict of interest when the Firm controls a potential co-investment vehicleand has discretion in determining howrelated expenses are allocated. As described more fully in the governing documents of the Funds, certain employeesand consultants of the Firm and its affiliates, including 3DC and Genscience, provide services to the Firm, the Funds and portfolio companies. The fees and expenses associated with such employees orconsultants may be allocated to the Fund or portfolio company that is the actual or expected recipient or beneficiary of the services provided and, in such case, would not be paid for out of, or offset against, the management fee paid to the Firm by the relevant Fund(s). Such employees or consultants may also serve on the boards of directors of portfolio companies and may otherwise serve directly as employees of, or consultants to , portfolio companies and may receive directors’ fee s, consulting fees and other compensation(whether in the form of cash, securities or otherwise) in connection with such services from portfolio companies. Such

compensation may be retained by themployees or consultants and will not offset against management fees otherwise payable by the Funds.Similarly, tothe extent a former employeeof the Firm becomes a consultant to, or employed by, a portfolio company, no compensation earned by such former employee will offset the management fee, whether or not such former employee has a remaining interest in the relevant Fund’s General Partner or affiliated entity. Conversely, in the event thathe Firm employs a person that previously received compensation from a portfoliocompany, investors will receive the benefit of any applicable offset only beginning as of the relevant start date of the person’s employment withthe Firm, and not withrespect to any compensation paid prior to such date, including equity grants made prior to the date of employment that vest thereafter. The Firm incurs brokerage costs on behalf of the Funds. Item 12 describes factors that the Firm considers in selecting brokers for Fund transactions and determining the reasonableness of their compensation (e.g., commissions). While it is difficult to predict the future fees and expenses of the Funds, such fees and expenses could be substantial. D.

Timing of Fee Payments

Management fees are due quarterly in advance. The Firm has discretion to defer the payment of management fees. With respect to Deerfield Partners, L.P., performance-based compensation is generally payable annually in arrears (or otherwise when permitted by the Fund’s Memorandum when distributions are made to Fund investors). With respect to the Private Design Strategy, the Healthcare Innovations Strategy and the Strategic Growth Fund , performance-based compensation is paid when distributions are made, although tax distributions to a Fund’s General Partner or other persons entitled to receive carried interest may be paid at a time when corresponding distributions are not made to investors. The Firm’s advisory agreements with the Funds are generally terminable upon either 60 days’written notice prior to the end of the current one- or two-year term or 90 days’prior written notice, without penalty. The Firm’s advisory agreement with Deerfield Healthcare Innovations Fund III, L.P., Deerfield Healthcare Innovations Fund III-A, L.P. and the Strategic Growth Fundis terminable upon 24 hours’ prior notice,without penalty. Advisory fees are pro-rated for partial periods. Upon termination of any Fund advisory agreement, any prepaid, unearned fees will be promptly refunded and any earned, unpaid fees will be due and payable.

Such fee arrangements also create an incentive to favor higher fee paying accounts or accounts for which the Firm has a higher expected probability of receiving

performance-based compensation over other accounts in the allocation of investment opportunities , particularly in instances where theFund governing documents include terms requiringclawback or giveback of performance-based compensation amounts at the end of the relevant Fund’s life or at certain interim intervals. The compensation of Firm personnel will be influenced by the performance of the Funds and the Firm’s profitability. Certainpersonnel receive a percentage of the performance-based compensationearned by a General Partner with respect to one or more Funds; however, the percentage and/or underlying economics of the performance-based compensation for a givenperson will not be identical for eachStrategy (as defined in Item 8)or for each Fund. This creates a conflict by creating an incentive forcertain personnel to favor the profitability of one Strategy or Fund over another if a particular investment would fall within multiple Strategies or Funds. It also creates a conflict, when Strategies overlap, by creating an incentive for certain personnel to favor one Fund over another Fund if performance-based compensation is likely to be paid sooner, or at a higher level,in one than in the other. In addition, if a Fund’s performance makes it unlikely to pay performance-based compensation,certain personnel have an incentive tosuggest allocating desirable investment opportunities to a Fund more likely to pay performance -based compensation. The existence of p erformance-based compensation creates a conflict of interest in valuing assets and there will be situationsin which the Firm is incentivized to influence or adjust the valuation of assets. For example,the Firm may be incentivized toemploy valuationmethodologies that improve aFund’s track record, to defer recognizing losses from investmentsthat have experienced a permanent impairment that must be returned prior to an affiliate receiving performance -based compensation, or to employ valuation methodologies that give rise to a higher valuation in order to increase fees . Since performance-based compensation payable by Deerfield Partners, L.P. is calculated ona basis that includes unrealized appreciation of the Fund’s assets, it may be greater than if it were based solely on realized gains. Each Fund typically holds investments for which market quotations are not readily available. Such investments may be valuedin part or in whole based on valuations provided by the Firm, and such valuationswould be a basis for determining amounts payable to the General Partner of the applicable Fund and the Firm. Fund investments will be valued at fair value , consistent with the Firm’s valuation policy and procedures. The Firm makes valuation determinations in accordance with Accounting Standards Codification ( ASC) 820. For assets that can be priced by the Funds’ administrator, the Firm will utilize the administrator’s valuation. It is expected that a Fund’s administrator will value those assets that are classed Level 1 or Level 2 and that the Firm will value Level 3 assets. If the Funds ’ administrator does not believe it is capable of independently sourcing or validating a valuation, and for all Level 3 assets, the Firm’s internal valuationcommittee assumes responsibility for such valuation in accordance with the Firm’s valuation policies and procedures. Valuation of investments will necessarily be individualized given the customized nature of each investment . At its discretion and at the direction of the Firm’s valuation committee, the Firm uses a third-party independent valuation firm to assist in valuation of certain assets , and thecosts of such valuation agent will be borne by the relevant Fund(s) . While the Firm uses data supported methods and metrics, v aluation of Level 3 assets involves matters of judgement, and there can be no assurance thatthe valuation assigned by the Firmreflects the value that will ultimately be realized upon the eventual disposition of the investment. Accounting rules and guidelines continue to evolve, and such changesmay impact how the Firm values certain assets. Performance-based compensation earned by a Fund’s General Partner that is attributable to gains from the sale or disposition of certain assets that have been held for three years or less is generally treated as short-term capital gains and will betaxed at the higher ordinary income tax rates. As a result , the interests

of the General Partner and Fund investors may not always be aligned with respect to the timing of the disposition of an investment, which timing could have an impact on investment performance. The Firm seeks to ensure that all Funds are treated equitably in the allocation of investment opportunities and tradesover time. Please see Item 11 for more information. Allocation decisions are made by the Managing Partneror the Managing Partner’sdesignee. Portfolio investment -by-portfolio investment performance -based compensation creates an incentive to favor portfolio investments for which the Firm or an affiliate is more likely to receive larger or earlier compensation. The Firm may receive performance-based compensation with respect to a profitable portfolio investment even if investor’s subscriptionto Fund is not profitable overall. Provided that the withdrawal proceeds are used to fund capital commitments in Deerfield Private Design Fund III, L.P., Deerfield Private Design Fund IV, L.P. , Deerfield Healthcare Innovations Fund, L.P., Deerfield Healthcare Innovations Fund II, L.P., Deerfield Private Design Fund V, L.P., Deerfield Healthcare Innovations Fund III, L.P. and/or Deerfield Healthcare Innovations Fund-A,IIIL.P., certain investors in Deerfield Partners, L.P. are permitted to withdraw all or any part of their capital in Deerfield Partners, L.P. (except in the case of funding capital commitments in Deerfield Healthcare Innovations Fund II, L.Pfor which there is a maximum withdrawal of $200,000 per capitalcall for investors not affiliated with the Firm) without being subject to the required lock up, notice and timing of redemptions provisions contained in the relevant Memorandum (the “Unrestricted Withdrawals”). Investors in Deerfield Partners, L.P. that are current and former firm-related personnel and affiliates of the Firm have preferential liquidity rights to the extent the General Partner of the Fund waives the notice or other requirements for a redemption specified in the Fund’s Memorandum, which occurs regularly . Although the Firm generally does not expect an Unrestricted Withdrawal or preferential liquidity set forth in the preceding sentence to materially disadvantage the remaining investors in Deerfield Partners, L.P., including, where applicable,the ability of the Firm to make reasonable projections of the anticipated capital calls for the other Funds or other needs, such investors will be disadvantaged if Deerfield Partners, L.P. needs to sell its positions in securities at undesirable prices or take other actions to fund the withdrawals.

Certain “knowledgeable employees” within the meaning of Rule 3c-5 of the Investment Company Actalso participate in the Funds. The Firm, without notice to or consent of investors, has entered into, and may in the future enter into, side letters with certain investors in the Funds (“Side Letters”). Side Letters may grant preferential liquidity, transparency, reporting, fee or other terms. Fund investors that are c urrent and former Firm13

related personnel and affiliatesof the Firm have preferential liquidity rightsto the extent theGeneral Partner of the Fund waives thenotice or other requirements for a redemptionspecified in the applicable governing Fund documents in connection withsuch redemption, which occurs regularly, and, as disclosed above in Item 6, Unrestricted Withdrawals are permitted for certain investors funding capital commitments to certain Deerfield Funds. Investors who or which redeem their investments ahead of other investorscould adversely impact the remaining investors in the Fund. Similarly, where certain investors in a Fund have preferential transparency rights, those investors would have information before other investors, which could benefit those investors withsuch preferential transparency rights.

The Firm conducts extensive fundamental research into healthcare sector assets and investment opportunities, including research on individual companies, products and services, drug and device development pipelines,scientific research, clinical trials, specific product and service markets, intellectual property protection and litigation, political and regulatory developments, and the dynamics of public and private securities markets. The Firm makes use of this fundamental research to identify investment opportunities, determine how best to structure or “express” an investment thesis, direct the purchase and sale of securities, negotiate structured investment transa ctions, and generally manage and invest the assets of the Funds. The Firm considers the healthcare sector to include, without limitation, pharmaceuticals, biotechnology, DNA and RNA editing and therapy, therapeutic delivery methods, generic drugs, over-thecounter drugs, medical devices, medical equipment, medical technology,diagnostics,sequencing and imaging technologies and devices, clinical trial services, healthcare data collection and delivery, hospital supplies, hospital services, real estate principally used in operations related to the healthcare industry , acute care hospitals, nursing homes, psychiatric hospitals, addiction recovery centers, alternate-site providers, home care, physician practice management,medical and scientific research and development, medical software, healthcare-related artificial intelligence tools and platforms, HMOs, health insurers, benefit management companies, distributors, sales organizations, drugstores, and animal and plant healthcare products and services, and all related technologies, goods, services, financing activities, real estate and enterprises . The majority of Fund investments are made in companies that are organized in the United States or that issue securities available in the U.S. public securities markets. The emphasis on U.S. -based opportunities reflects the fact that the Firm is more knowledgeable aboutU.S. companies, products and services markets, securities markets, and reimbursement and regulatory dynamics. There is no geographic limitation on

potential investments, and the Funds also make investments outside the United States when the Firm believes it has sufficient information tomake such investments. Subject to the foregoing, each Fund advised by the Firm pursues one ofthree partially overlapping investment strategies (the “Strategies”). The fundamental research conducted by the Firm is heavily used in all Strategies. The specific investment Strategies and allocation guidelines of each Fund client are set forth in its Memorandum and are summarized below. 1.

Public Securities Strategy (Deerfield Partners, L.P.)

Investment Strategy. The “Public Securities Strategy” invests primarily in debt and equity securities, including derivative securities, of publicly traded companies in the healthcare and healthcare related sector. When implementing thePublic SecuritiesStrategy, the Firm seeks to achieve capital appreciation through a portfolio strategy that combines security selection based on in -depth fundamental analysis of healthcare companies, and a diversified portfolio comprising stock, debt, and derivative securi ties and a mix of long and short positions. Investments may be expressed through a variety of financial instruments in addition to securities and obligations of publicly traded companies , including, without limitation, privately placed securities, debt obligations, product royalties, revenue participations and other assets issued by public or private companies. The Public Securities Strategy also utilizes analytical , quantitative, systematic and algorithmictechniques or strategies to develop differentiated views on the value and movements of securities. The Firm considers the following factors when making investment decisions and designing a portfolio for this Strategy.

Healthcare Universe. At least 90% ofthe portfolio of a Fund utilizingthis Strategy (and the other Strategies as well)is expected to be invested in healthcareassets, and in practice the Funds have invested almost exclusively in the healthcare and healthcare-related sector. Quantitative, systematic and algorithmictrading in the Public Securities Strategy may have greater exposure outside of healthcare than fundamental investments.

Leverage. Total exposure varies based on market factors and the constantly varying mix of investment opportunities. This Strategy may also guaranteeobligations of portfolio companies, including on a joint and several basis with other Funds.

Diversification. The portfolio consists of a relatively large number of positions, with 0.50% to 3.00% of total Fund assets representing the typical size of an individualfundamentalinvestment. The Firm customarily invests across a number of healthcare industry segments. The Firm does not invest more than 12.5% of the net assets of Deerfield Partners, L.P.(computed at the time the investment is made) in the securities of any one company.

Balance. The portfolio usually has a net long exposure, but its long and short positions may vary significantly, and past exposure may not be indicative of future exposure. At any given time, the portfolio is likely toinclude positions in equity, debt and derivative securities. Geographically, the portfolio is expected to be weighted toward U.S. -based healthcare companies, but it may include substantial non-U.S. exposure.Exposure to foreign investments varies with prevailing investment opportunities.

Holding Periods. Holding periods of both long and short positions are generallydetermined by the underlying investment thesis and developments in the relevant securities. The Firm , when appropriate, may attempt to realize long-term capital gains for domestic taxable investors where possible and prudent, which could result in delayed dispositionof an investment relative to the expected disposition had such tax considerations been disregarded .

Risk. The Firm may take above -average risk in particular situations if the risk-adjusted return justifies the exposure. The risk inherent in any one investment is mitigated to a degree by the diversity of the portfolio within the healthcare sector.

Use of Derivatives. The Firm uses exchange traded derivative instruments or other derivative instruments, including bilateral swaps,when and to the extentthe Firm believesthey provide the best means of achieving a desired result , sometimes in combination with other securities. Currency forward contracts may also be used to hedge currency risk.

Private Market Financing. The Public Securities Strategy focuses primarily on publicly traded securities. It also invests in tradable syndicated debt and in privately structured financings of publicly traded companies. The Public Securities Strategy also invests in opportunities where liquidity may be restricted, such as in privately structured financings ofprivate companies or in other assets where there is a long-term legal or contractual restriction on sale. With respect to Deerfield Partners, L.P.,securities with restricted liquidity in excess of180 daysrepresent no more than 15% of net assets, determined at the time the investment is made.

Investment Selection. The primary determinant of the Public SecuritiesStrategy’s success is the ability of the Firm to assess the value of companies and assetswithin the healthcare securities universe. The Firm pursues in-depth fundamental research of potential investments by developing detailed analytical models, meeting withcompanies, attending medical conferencesand investment seminars, reading medical and trade literature,reviewing intellectual property,consulting with individuals possessing relevant expertise, surveying participants in the healthcare field , analyzing dataand reviewing other forms ofinformation and research . The Firm may also employ other analytical and quantitativetechniques and strategies to identify opportunities, includingportfolio construction models that are based on quantitatively -based relationships developedthrough research and inferences drawn from data . 2.

Private Design Strategy

Investment Strategy. The “Private Design Strategy” invests in public and private companies in the healthcare sector using privately created instruments, structures and transactions. In utilizing the Private Design Strategy, the Firm may, without limitation, (i) initiate or participate in joint ventures, (ii) finance projects, products or companies, (iii) enter into value-added relationships with companies in the healthcare sector for the development or marketing of healthcare products, (iv) contract for revenue streams generated by or tied to healthcare products or services, (v) purchase such products or services outright, including the purchase of underlying intellectual property, (vi) initiate or participate in leveraged buyouts, other restructurings, or outright buyouts of companies, (vii) develop and sell, or participate in the development and sale of, therapeutics, medical devices or healthcare products and services, (viii) acquire, develop, construct, lease and sell healthcare related real property , and (ix) establish any business and form any entity in furtherance of the foregoing. The foregoing list is illustrative, not exhaustive, and a Fund utilizing the

Private Design Strategy may contract with any party, engage in any activity, pursue any investment, and create any business, in the healthcare field, as set forth in each Fund’s Memorandum. A Fund utilizing the Private Design Strategy may buy, sell, and otherwise acquire, hold, dispose of and deal in any type of securities, financial instruments, or assets. Such securities, instruments and assets may or may not be registered, exchange traded or liquid. Investment Approach. The Firm has established long term relationships with the management of many healthcare companies and research institutions, and possesses deep knowledge of the underlying science, development and commercialization pathways, regulatory environment and markets for healthcare products and services. These attributes allow the Firm to identify financing needs of companies and devise customized investment structures that, on a risk adjusted basis, are intended to meet the financing needs of such companies and research institutionsand the return objectives of the Funds utilizing the Private Design Strategy. The Firm considers the following investment guidelines when making investment decisions.

Healthcare Universe. The Funds utilizing the Private Design Strategy will invest primarily in the healthcare sector, including publicly traded and private companies , established and start-up businesses and distressed assets and companies.The Funds utilizing the Private Design Strategy may invest anywhere in the world, though a majority ofthe Funds’ investments are expected to focus on the healthcare industry in the United States. A significant minority of investments could be outside the United States, depending on available opportunities.

Leverage. The Funds utilizing the Private Design Strategy may leverage their investments and will obtain such leverage in any manner deemed appropriate by the Firm, including, but not limited to, borrowing on margin or otherwise, repurchase agreements, derivative transactions , includingthat provide leveraged exposure to various underlying baskets of assets, and loans from the Firm or its affiliates on arm’s-length terms. The Funds utilizing the Private Design Strategy may also obtain credit lines to provide initial funding of investmen ts without drawing down unfunded capital commitments or as a short-term bridge financing of investments pending drawdown of unfunded capital commitments. The Funds utilizing the Private Design Strategy may also guarantee obligationsof portfolio companies, including on a joint and several basis with other Funds.

Portfolio Concentration. Portfolio concentration in the Funds utilizing the Private Design Strategy will vary with available opportunities and at different times in a Fund’s life (being more concentrated at the beginning and end of a Fund). No more than 30% of a Fund’s aggregate committed capital may be invested in a single portfolio company at any point in time.

Levels of Ownership. When investing in healthcare companies, theFunds utilizing the Private Design Strategy may acquire any level of ownership, from passive minority investments to complete ownership and control.

Balance. The Private Design Strategy generally does not engage in stand -alone short transactions but may take short positions as part of a broader transaction, in anticipation of structuring a broader transaction, in managing position exposure, for tax purposes,or in exiting an investment. Exposure to foreign investments is possible , and has occurred, and a significant minority of investments could be outside the United States , dependingon available opportunities.

Duration of Investments. Investmentsmay have any duration, and many investments will haveno specified term. The Firm expectssome investmentswill be restructured overtime in ways that will extend the date by which such investments will be fully realized or that will inherently be longer duration investments. The Firm attempts to realize long -term capital gains or qualified small business stock treatment for domestic taxable investors where possible and prudent , which could result in delayed disposition of an investment relative to the expected dispositionif such tax considerationswere to be disregarded.

Risk. The Private Design Strategymay take above-average risk in particular situations if the Firm believes that the risk -adjusted returns justify the investment.

Use of Derivatives. Derivativesmay be employed when structuring investments or transactions to adjust overall exposure or to enhance performance.

Research Collaborations andResearch Projects. Certain Funds utilizing the Private Design Strategy enter into joint research and development collabo rations with research institutions and companies that have given, and may in the future give, rise to the opportunity to accept and perform multiple separate research projects over a number of years. The se Funds will invest in such projects either directly or indirectly viaportfolio companies founded in connection with such collaborati ons and in companies created to further develop or commercialize one or more projects . Such Funds can also invest in research projects that are conceived internally atthe Firm.

Investment Selection. The Firm seeks opportunities that allow it to apply its understanding of the healthcare sector with creative transactional abilities to meet the funding needs and growth objectives of healthcare companies and research institutions in a way that optimizes the benefits over time for both the participating Private Design Strategy Funds and the relevant organization. The Firm often looks for companies whose funding needs cannot be as efficiently satisfied by conventional forms of debt or equity financing and for funding structures that simultaneously mitigate downside risk while retaining the opportunity for upside reward. In some cases, Funds utilizing thePrivate Design Strategy may acquire all or substantially all of the equity or assets of a portfolio company. The objective is ordinarily to obtain a favorable skew in the expected dollar of reward for dollar of risk. 3.

Healthcare InnovationsStrategy

Investment Strategy. The objective of the“Healthcare Innovations Strategy” is to make investments to achieve attractive absolute returnsin healthcare companies and assets that serve important medical and societal needs. Investments will be made primarily through privately negotiated investments in healthcare enterprises and assets. It is expected that many investments will be made in star t-up and early stage companies, including companies developing unproven technologies and therapeutics having an uncertain possibility of success. The foregoing is illustrative, not exhaustive, and investments may be made in any sector of the healthcare industry and may take any form and include assets of any type. Investment Approach. The Firm has established long term relationships with the management of many healthcare companies and research institutions and possesses deep knowledge of the markets for healthcare products and services. These attributes allow the Firm to assist early stage researchers in devising an efficient research path, managing the complex and changing regulatory processes, and, for those

developments that offer commercial promise, successfully accessing available sources of capital and management expertise to convert scientific insights into commercially viable products that ultimatelymay advance human, animal and plant health and well-being. The Firm considers the following investment guidelines when making investment decisions.

Healthcare Universe. The Funds utilizing the Healthcare Innovations Strategy (the “Innovations Funds”) may invest in any sector of the healthcare industry. The Innovations Funds may invest anywhere in the world, though a majority of the Fund s’ investments are expected to focus on the healthcare industry in the United States. A significant minority of investments could be outside the United States, depending on available opportunities.

Research Collaborations andResearch Projects. The Innovations Funds enter into joint research and developmentcollaborations with research institutions and companiesthat have given, and may in the future give, rise to the opportunity to accept and perform multiple separate research projects over a number of years. The Innovations Fund s will invest in such projects either directly or indirectly via portfolio companies founded in connection with such collaborations and in companies created to further develop or commercialize one or more projects . The Funds can also invest in research projects that are conceived internally at the Firm.

Levels of Ownership. When investing in healthcare companies, the Innovations s Fund may acquire any level of ownership, from passive minority investments to complete ownership and control.

Leverage. The InnovationsFunds generally will not employ leverage at the Fund level when making investments, although the Innovations Funds may obtain credit facilities as short -term bridge funding for investments pending drawdown of unfunded capital commitments , including loans from the Firm or its affiliates. The Innovations Fundsmay also guaranteeobligationsof portfolio companies, including on a joint and several basis with other Funds.

Portfolio Company Debt. Companies in which the Innovations Fund s invest may be leveraged with debt in any manner, including, without limitation, through the use of loans from related or unrelated parties, derivative instruments, including swaps, and purchase/repurchase agreements.

Portfolio Concentration . The Innovations Funds ’ portfolio may be concentrated or more diversified depending on the nature of opportunities that present themselves, and at times (particularly at the outset and end of an Innovations Fund), 100% of their portfolios may be concentrated in a single portfolio company. No more than15% of an InnovationsFund’saggregate committed capital may be invested in a single portfolio company.

Duration of Investments. Investmentsmay have any duration, and many investments will have no specified term. The Firm expects that some investments may be restructured over time in ways that will extend the date by which such investments will be fully realized or that will inherently be longer duration investments. The Firm attempts to realize long-term capital gains or qualified small business stock treatmentfor domestic taxable investors where possible and prudent , which could result in delayed disposition of an investment relative to the expected disposition if such tax considerationswere to be disregarded.

B. Risks All of the Strategies are generally speculative investments and are not intended as a complete investment program. The Strategies areintended solely for sophisticated investors who are able to bear the risk of loss of theirentire investment. There can be no assurances that any Strategy will achieve its investment objective or that there will not be a significant loss of capital. The specific risks associated with a Fund’s investment strategy are described in greater detailin each Fund’s Memorandum , where additional risks are also set forth. The following risks, however, are those that generally may be applicable andshould be carefully evaluated by prospective investors. Investors may lose all, or substantially all, of their investmentany in Fund. General Risks Applicable to All Strategies :

Healthcare Companies; Focused Investment Strategy.The Funds intend to make investments in the healthcare sector. In addition to the risks associated with any strategy seeking capital appreciation through investment in financial instruments or other assets, a Fund’s portfolio will bear the additional risk that many healthcare companies may be subject to, and possibly adversely affected by, some of the same general trends relating to demand for healthcare related products and services and the same regulatory, economic and political factors. Accordingly, a Fund will not enjoy the reduced risks of a broadly diversified po rtfolio, which likely will cause the Fund’s investments to be more susceptible to particular economic, political, demographic, regulatory, technological or industry conditions or occurrences compared with a fund, or a portfolio of funds, that is more diversified or that has a broader focus.

Sector Concentration . Each Fund focuses on investments in the healthcare sector and will not be diversified across multiple industry sectors. Healthcare companies face many common technological, legal,regulatory,and demographic dynamics that can cause their performance to be closely correlated. As a result, the Fund will be affected to a greater extent by factors affecting such companies than would be the case if the Fund held a portfolio more diversified by indus try.

Healthcare Policy. Healthcare policy and changes in healthcare policy and related laws and regulations could have a material and adverse impact on the healthcare companies in which a Fund intends to invest, and the U.S. or non -U.S. government’s role in the healthcare industry could adversely impact aFund’s performance. The success of a Fund’s investmentsis expected to be dependent upon obtaining or failing to obtain certain governmental approvals. The research, development, preclinical and clinical trials, manufacturing, labeling, and marketing related to therapeutics, diagnostics, or medical devices and other healthcare products are subject to an extensive regulatoryapproval process by the FDA and other regulatory agencies in the U.S. and abroad. The process for obtaining FDA and other required regulatory approvals, including the required preclinical and clinical testing, is very lengthy, costly, and uncertain. Therecan be no guarantee that, even after such time and expenditures, a company will be able to obtain the necessary regulatory approvals for clinical testing or for the manufacturing or marketing of any products or that the approved labeling will be sufficient for favorable marketingdan promotional activities. If a company is unable to obtain these approvals in a timely fashion or if after approval for marketing, a product is later determined to be ineffective or to have unacceptable side effects

not discovered duri ng testing, the c ompany may experience significant adverse effects. The success or failure of a company in which the Funds invest will be “binary” where it isdependent on the authorization of a single major product (for example, either the company’s drug will successfully obtain FDA approval, or it iw ll not). In some cases, products of healthcare companies are approved by regulatory authorities on a conditional basis with approval conditioned upon fulfilling the requirements of regulators. Regulatory authorities are placing greater focus on monitoring products originally approved with post-approval conditions and on whether the sponsors of such products subsequently satisfy such conditions. If a company is unable to fulfill the subsequent conditions of its approval, such approval might be withdrawn or subject to a requirement to change the products’ labeled indications, which could have an adverse effect on the value of the company. Moreover, even after approval, products could still be the subject of regulatory action if new facts concerning their safety and efficacy come to light. Healthcare regulation is subject to change and can have a considerable impact on the marketing of products and services by companies. Such reg ulatory changes could affect a company’s ability to obtain or maintain approval of its products, even forcing a company to withdrawits products from the market. In some cases, new regulations can substantially change the marketing conditions for certain healthcare products, such as pharmaceuticals. In addition, in both U.S. and non -U.S. markets, sales of certain healthcare -related products and their success will depend in part on the availability of reimbursement from third -party payors such as government health administration authorities, privatealth he insurers and other organizations. The continuing efforts of governmental and third-party payors to contain or reduce the costs of healthcare affect the revenues and profitability of healthcare companies. Significant uncertainty exists as to the reimbursement status of newly approved healthcare products. There can be no assurance that a company’s proposed products will be considered cost -effective or that adequate third-party reimbursementwill be available to enable a company, or a prospective acquirer of a company or product, to maintain price levels sufficient to realize an appropriate return on its investment in product development. The levels of revenues and profitability of pharmaceutical companies and other healthcare-related companies, including cash flows available to satisfy payment obligations, may be affected by the continuing efforts of governmental and third -party payors to contain or reduce the costs of healthcare. Moreover, if reimbursement rates are reduced, or if healthcare providers anticipate reimbursement being reduced, providers could narrow the circumstances in which they prescribe or administer a company’s products, which could reduce the use or sales of such products and thereby have a material adverse effect on the value of the company. Many healthcare companies are subject to rigorous regulation in their operations. Compliance with these regulations can be costly. Even when healthcare companies develop and institute comprehensive compliance programs, they are not able to guarantee that t hey, their personnel, their consultants and their contractors will be in compliance with all potentially applicable regulations. If a healthcare company fails to comply with applicable regulations, the company could be subject to delays, monetary and administrative penalties, increased compliance costs or a curtailment of its authority to conduct business (including debarment from federally funded programs such as Medicare and Medicaid), any of which could have a material adverse effect no the value of the company.

Healthcare Regulatory Risk. The performance, success and failure of healthcare companies are heavily influenced by governmental regulation, including marketing approval of drugs and devices and establishment of pricing and reimbursement by governmental purchasers of, and third party payors for, healthcare goods and services. The approval processes can be lengthy, costly, unpredictable, and in some cases determinative of the success or failure of a company. In addition, the applicable approval process or substantive standards may cha nge in a manner that adversely (or favorably) affects the time, cost and likelihood of approval. As a consequence, the securities and other obligations of healthcare companies whose revenue model is closely tied to marketing approval or reimbursement decisions, particularly small and mid -sized companies, can be subject to large and unanticipated swings in value. Such changes can significantly affect the performance of a Fund for better and worse.

Product Development Risk . Many healthcare companies may spend many years developing a product before the product can be approved and commercialized. This may occur at a time when the company’s commercialized products are insufficient to fund its product development or when it has no commercialized product. Such companies will generally be consuming cash for a period of years, during which they may need to raise additional capital, and investors providing the additional capital often significantly dilute the interests of earlier investor s. In addition, the failure of a development product to achieve regulatory approvalor a favorable reimbursement position can cause the company itself to fail.

Clinical Development Risk. Clinical trials and related development activities are inherently uncertain and subject to delay, failure and unanticipated adverse events. If a clinical trial or development program being pursued by a Fund portfolio company is unsuccessful, delayed, terminated early or fails to demonstrate sufficient safety or efficacy, the relevant asset may become substantially impaired or entirely worthless, and a Fund may lose all or a significant portion of its investment in that assetor portfolio company.

Commercial Failure. Regulatory approval of a drug or device does not ensure commercial success. Commercial success can be compromised or wholly defeated by failure to achieve acceptance among physicians or patients, by competition from other newly developed or existing products, by failure of intellectual property protection and generic entry, by inability to achieve favorable reimbursement or coverage from government agencies or private insurers, and by safety or manufacturing problems.

Technological Risk . Scientific advances in genetics, immunology, understanding of disease pathways and other elements of human biology, along with developments in materials science, artificial intelligence,nanotechnology and informatics, are transforming healthcare technology and are expected to continue doing so for many years to come. Such technological advances may introduce new therapeutic methods and products and render obsolete many current therapeuti c methods and products. Such technological changes may impact market dynamics andproduce substantial commercial turmoil among healthcare companies, creating winners, losers and unanticipated outcomes. Such turmoil presents both substantial risks and opportunities for healthcare investments.

Intellectual Property. Many healthcare companies are highly dependent upon intellectual property rights, both to ensure a company’s freedom to operate and/or to foreclose others, but intellectual property rights canexpire and canbe subject to substantial uncertainty and risk. Actual or alleged infringement of another’s patents may constrain or entirely foreclose a company’s freedom to pursue its business or may impair its economic returns by requiring the payment of royalties. Conversely, the intellectual property upon which a company relies to protect its business may be challenged by third parties. Such challenges may succeed in whole or in part, and even if unsuccessful, may impose a substantial drain on a company’s economicand human resources. Intellectual property risks are often difficult to foresee, and even when these risks are recognized, it can be difficult to assess the potential value or liability associated with intellectual property disputes.

Impact of Government Regulation, Reimbursement and Reform. Certain industry segments in which a Fund invests or intends to invest, including various segments of the healthcare industry or relevant sub-industries, are (or may become)(i) highly regulated at both the federal and state levels in the United States and internationally and (ii) subject to frequent regulatory change. Certain segments may be highly dependent upon various government or private reimbursement programs. While each Fund intends to invest in companies that seek to comply with applicable laws and regulations, t he laws and regulations relating to certain industries, including , in particular, the healthcare industry, are complex, may be ambiguous or may lack clear judicial or regulatory interpretive guidance. An adverse review or determination by any applicable judicial or regulatory authority of any such law or regulation, or an adverse change in applicable regulatory requirements or reimbursement programs, could have a material adverse effect on the operations and/or financial performance of a company. The healthcare industry will likely continue to be significantly impacted bypolitical leaders, executive andlegislative changes, and various U.S. federal, state or local or non -U.S. legislative proposals related to such industries are introduced from time to time, which, if adopted, could have a significant impact on such industries in general and/or on companies in which a Fund may invest. These efforts to reform the healthcare delivery system in the United States and Europe have resulted in increased pressure on healthcare providers and other participants in the healthcare industry to reduce costs. These forces place constraints on the levels of overall pricing, and thus could have a material adverse effect on profit margins for healthcare companies. There are various federal and state laws that regulate the operation of healthcare providers, including those that prohibit fraudulent and abusive business practices by health care providers, suppliers, and parties that contract with such providers and sup pliers who participate in, receive payments from or are in a position to make or influence referrals in connection with government-sponsored health care programs, including the Medicare and Medicaid programs. Of particular relevance are: o

The federal Ethics in Patient Referrals Act, commonly referred to as the Stark Law, that, unless one of the statutory or regulatory exceptions apply, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certai n “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibit s the entity from billing Medicare or Medicaid for

such designated health services. Sanctions for violating the Stark Law include denial of payment, civil monetary penalties per claim submitted and exclusion from the federal health care programs. Failure to refund amounts received as a result ofa prohibited referral on a timely basis may constitute a false or fraudulent claim and may result in civil penalties and additional penalties under the False Claims Act. The statute also provides for a penalty for a circumvention scheme; o

The federal Anti -Kickback Statute that prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending ro arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal health care program, such as Medicare and Medicaid. Remuneration has been interpreted broadl y to be anything of value, and could include compensation, discounts or free marketing services. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti -Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Violations of the federal Anti Kickback Statute may result in civil monetary penalties for each violation, plus up to three times the remuneration involved. Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations can also result in criminal penalties, including criminal fines and imprisonment. Similarly, violations can result in exclusion from participation in government health care programs, including Medicare and Medicaid;

o

The criminal health care fraud provisions of the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which are collec tively referred to as (“HIPAA”), and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any health care benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. Similar to the federal Anti -Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

o

HIPAA, and its implementing regulations, which also impose certain regulatory and contractual requirements regarding the privacy, security and transmission of protected health information;

o

The federal False Claims Act that imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a fa lse claim paid, and in addition provides for qui tam, or whistleblower, suits to be brought in the name of the government;

o

The federal Civil Monetary Penalties Law prohibits, among other things, the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the

person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; o

The Physician Payments Sunshine Act is designed to increase transparency around the financial relationshipsbetween physicians, teaching hospitals and manufacturers of drugs, medical devices and biologics;

o

Reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs;

o

Similar state law provisions pertaining to anti-kickback, self-referral and false claims issues, some of which may apply to items or services reimbursed by any third party payor, including commercial insurers or services paid out-of-pocket by patients;

o

State laws that prohibit general business corporationsfrom practicing medicine, controlling physicians’ medical decisions or engaging in some practices such as splitting fees with physicians and psychologists;

o

State laws th at require notice and review for certain healthcare transactions involving private equityinvestments.;

o

The Federal Trade Commission Act and federal and state consumer protection, advertisement and unfair competition laws, which broadly regulate marketplace activities and activities that could potentially harm consumers;

o

Laws that regulate debt collection practices as applied to a company’s debt collection practices;

o

A provision of the Social Security Act that imposes criminal penalties on health care providers who fail to disclose or refund known overpayments;

o

Federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered;

o

Risks related to employing or contracting with individuals or entities that are sanctioned or excluded from participation in government health care programs;

o

The Federal Substance Abuse Confidentiality Regulations;

o

Federal and state laws and policies that require health care providers to maintain licensure, certification or accreditation to provide physician and other professional services, to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs, as well as state insurance laws; and

o

State and federal statutes and regulations that govern workplace health and safety.

Changes in applicable laws or regulations, enforcement priorities, or in the interpretations of these laws and regulations, could result inliability, increased compliance costs or the need for additional capital expendituresfor the Firm, Funds or portfolio companies. To enforce compliance with the federal laws, the U.S. Department of Justice and the U.S. Department of Health and Human Services (“HHS”) Office of Inspector General have continued their scrutiny of health care providers and companies, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time - and resource-consuming and can divert management’s attention from the business. Any such investigation or settlement could incr ease costs or otherwise have an adverse effect on operations. In addition, because of the potential for large monetary exposure under the federal False Claims Act, healthcare companies often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages and civil penalties that may be awarded in litigation proceedings. Such settlements often contain additional compliance and reporting requirements as part of a consent decree, settlement agreement or corporate integrity agreement. Given the significant size of actual and pote ntial settlements, the government may continue to devote substantial resources to investigating health care providers’ compliance with the health care reimbursement rules and fraud and abuse laws. The provision of healthcare is subject to vast and complicated regulatory systems at federal, state and local levels that impose numerous licensing, permitting, certification and other approvals on a host of individuals and activities, requirements that may be subject to change from time to time and place to place. Such regulations and changes in regulations could increase the cost, and even compromise the ability, of a company to operate some or all aspects of its business. Regulatory requirements may also prevent a c ompany from entering into certain transactions or cause transactions to be structured in ways that are not optimal for the Fund. Noncompliance with applicable regulations could subject a portfolio c ompany to civil or criminal liability and fines or the loss of the right to operate or provide certain goods or services.Eased regulatory approval pathways could facilitate faster commercialization of pharmaceuticals and other healthcare products which could increase competition in the marketplace and impact market dynamics.

FCPA Considerations . The Firm and Funds seek to comply with the U.S. Foreign Corrupt Practices Act (“ FCPA”) and other anti -corruption, anti -bribery and anti -boycott laws and regulations to which they are subject. As a result, a Fund may be adversely affected because of its unwillingness to participate in transactions that violate such laws or regulations. Such laws and regulations may make it difficult in certain circumstances for a Fund to act successfully on investment opportunities and for portfolio companies to obtain or retain business. While the Firm has policies and procedures designed to help ensure compliance by the Firm and its personnel with the FCPA, such policies and procedures may not be effective to prevent violations in all instances. In addition, notwithstanding the Firm’s policies and procedures, portfolio companies, their affiliates or third-party service providers may engage in activities that could result in FCPA violations , absent direct knowledge or participation by the Firm . Any

determination that the Firm, Fund or any portfolio company has violated the FCPA, or other applicable anti-corruption or anti-bribery laws, could subject the Fund to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation, reputational harm, and a general loss of investor confidence, any one of which could adversely affect the Firm’s and the Fund’s business prospects and/or financial position, as well as the Fund’s ability to achieve its investment objective and/or conduct its operations.

Investment Clearances. Certain investments by a Fund that involve the acquisition or divestiture of a business connected with or related to certain emerging and foundational technologies may be subject to or require review and approval by the U.S. Committee on Foreign Investment in the United States and/or non-U.S. investment clearance regulators. In the event that a regulator reviews one or more of a Fund’s proposed or existing investments, or the disposition or incremental capitalization of an investment, the Fund may not be able to maintain, or proceed with, such transactions on terms acceptable to the Fund.

Uncertainty of Financial Results. The acquisition of interests in the Funds and the investments made by the Funds are highly speculative, involve a high degree of business and financial risk and could involve the risk of total loss of an investor’s capital. The prior performance of inves tment vehicles managed by the Firm is not necessarily indicative of any Fund’s future results. There can be no assurance that investments by any Fund will achieve returns comparable to the historical performance of any investment vehicles managed by the Fi rm. Any given investment made by a Fund may prove to be worthless, and an investor may lose all or a portion of the capital contributed to a Fund.

Concentration of Investments. Because as much as 30% ofa Private Design Fund’s, or 15% of an Innovations Fund’s, aggregate committed capital (and 100% of portfolio investments) may be invested in a single portfolio company at any point in time, any single loss may have a significant adverse impact on a Private Design Fund’s or an Innovation Fund’s capital. The foregoing risks are also applicable to the Public Securities Strategy, which may not have exposure to a single company exceeding 12.5% of net assets at the time of purchase .

Funding Reliance. Funds managed by the Firm, individually or collectively, are often a significant or sole source of capital for certain portfolio companies. If a Fund does not participate in future financing rounds, other investors may be unwilling or unable to provide sufficient capital on acceptable terms, which could lead to a portfolio company’s financial distress or failure and a significant reduction in the value of a Fund’s investment.

Market Risks. The profitability of a significant portion of each Strategy’s investment program depends to a great extentupon correctly assessing the future course of the price movements of securities and other assets. There can be no assurance that the Firm will be able to accurately predict these movements. Although the Firm attempts to mitigate certain market risks thr ough the use of long and short positions when available and deemed appropriate , a significant degree of market risk remains.

Equity Risk. A principal risk of investing in a Fund is equity risk, which is the risk that the value of equity securities held by the Fund will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securitie s held by the Fund participate, and the circumstances, financial condition and performance of particular companies whose securities the Fund holds. An investment in a Fund represents an indirect investment in the securities owned by the Fund. The value ofthese securities, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of an investment in a Fund may at any point in time be worth less than the original investment.

Short Sales. The investment activities of the Firm for the Public Securities Strategy routinely include short selling. The Firm generally does not engage in stand -alone short transactions for the Private Design Strategyor the Healthcare Innovations Strategybut may take short positions as a component of a broader transaction, in managing risk, for tax purposes,or in exiting an investment. In certain circumstances, short sales can substantially increase the impact of adverse price movements on a Fund’s portfolio. A short sale of a security involves the risk of a theoretically unlimited increase in the market price of the security which could result in an inability to cover the short position on a timely basis and a theoretically unlimited loss. There can be no assurance that securities necessary to cover a short position will be available for purchase.

Newly Issued Securities. The purchase of newly issued securities involves significant risk, because the prices of newly issued securities can increase or decrease significantly and quickly.

Small and Medium Capitalization Companies. A Fund may invest in companies with small- to medium-sized market capitalizations, including start-up and growth stage companies, for all Strategies. The securities of small- to medium-sized companies and start-up companies involve higher risks in some respects than do investments in larger companies. For example, prices of small-capitalization and medium -capitalization stocks are often more volatile than prices of large capitalization stocks, and the risk of bankruptcy or insolvency of many smaller companies is higher than for larger, “blue-chip” companies and is higher for start -ups than for established companies. In addition, due to thin trading in some small -capitalization stocks, an investment in those stocks may take time to liquidate, and investments in privatecompanies may be wholly illiquid. Some small companies have limited product lines, distribution channels and financial and managerial resources. Some of the companies in which the Firm invests may have product lines that have, in whole or in part, only recently been introduced to the market or that are still in the research or development stage. Such companies may also be dependent on personnel (including key personnel) with limited experience.

Preferred Stock . Investments in preferred stock involve risks related to priority in the event of bankruptcy, insolvency or liquidation of the issuing company and how dividends are declared. Preferred stock ranks junior to debt securities and, accordingly, is subordinate to all debt in bankruptcy.As such, preferred stock generally entitle s holders to an interest in the assets of the issuer, if any, remaining after all more senior claims to such assets have been satisfied. Preferred stock generally has a preference as to dividends. Such dividends are generally paid in cash (or additional sh ares of preferred stock) at a defined rate, but unlike interest payments on debt securities, preferred stock dividends are usually payable only if declared by

the issuer’s board of directors. Preferred stock may also be subject to optional or mandatory redemption provisions.

Warrants. Warrants are securities or instruments granting the right to or otherwise permitting, but not obligating, holders to purchase a specified number of shares of an issuing corporation at a specified price during a specified period of time, and they do not rep resent any rights in the assets of the issuer. Warrants may be exercisable only at prices that exceed the value of the underlying security and involve the risk of a loss of the purchase value of the warrant if the right to subscribe to additional shares is notexercised prior to the warrants’ expiration. Furthermore, a Fund may be adversely affected in the event that the securities underlying such warrants decline in value. As a result, warrants may be considered more speculative than other types of equity investments.

Convertible Securities and Investments in Equity -Linked Convertible Securities . A Fund may invest a portion of its capital in convertible securities and equity-related convertible securities. Convertible securities are equities, bonds, debentures, preferred stocks or other securities that may be converted into or exchanged for a specified fixed or variable amount of common stock or other security of the same (or less commonly,a different issuer) within a particular period of time at a specified price or formula. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s indenture or other governing instrument. If a convertible security held by a Fund is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Any of these actions could have an adverse effect on a Fund’s ability to achieve its investment objective. Convertible securities may offer lower interest or dividend yields than non-convertible securities of similar quality.In the event of a liquidation of the issuing company, holders of convertible preferred securities would be paid after the company’s creditors but before the company’s common stockholders. Consequently, the issuer’s convertible preferred securities may often be viewed as having more risk than its debt securities, but less risk than its common stock.

Derivative Financial Instruments. The Firm uses derivative financial instruments that may be subject to wide and sudden fluctuations in market value, with resulting fluctuations in profits and losses. Derivative instruments present various risks, including (i) an imperfect or variable degree of correlation between price movements or value of the derivative instrument and the underlying investment that may preventa Fund from achieving the intended hedging or return effect, (ii) difficulty closing a position without a loss, especially large positions, when market liquidity is tight or volatility is high, and (iii) the amplification of gains and losses due to the leverage inherent in derivative instruments.

Swaps. Swap agreements are two-party contracts entered into for periods ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which can be adjusted for an interest factor. The Funds may use swaps to implementtheir strategies synthetically, which may be volatile and speculative. Certain positions may be subject to wide and sudden fluctuations in market value, with a resulting fluctuation in the amount of profits and losses. Use of swaps presents risks similar to other

derivative instruments, including: (i) an imperfect or variable degree of correlation between price movements of the derivative instrument and the underlying investment sought to be hedged may prevent the Fund from achieving the intended economic effect or expose the Fund to greater risk of loss; (ii) derivative financial instruments may not be liquid in all circumstances , and the Fund may not be able to close out a position without incurring a substantial delay or loss; and (iii) derivative financial instruments can result in large amounts of leverage which may magnify the gains and losses experienced by the Fund and could cause its investments to be subject to wide fluctuations in value. Swaps are subject to the risk of non-performance by the counterparty, including risks relating to the financial soundness and creditworthiness of the counterparty. Swaps and other forms of over -the-counter derivative instruments may not be currently guaranteed by an exchange or clearing house. Regulatory changes in the United States and other countries may significantly impact the trading of swaps and other derivatives in the future.

Leverage. While the use of borrowed funds can substantially improve the return on invested capital, leverage can also magnify the loss on an investment. The cost and availability of leverage is highly dependent on the state of the broader credit markets (and such credit markets may be impacted by regulatory restrictions and guidelines), which state is difficult to accurately forecast, and at times it may be difficult to obtain or maintain the desired degree of leverage. Leverage at the portfolio company level often imposes restrictive financial and operating covenants on a company, in addition to the burden of debt service, and potentially will constrain its ability to operate its business as desired and/or finance future operations and capital needs.

Investments in Debt Securities Generally . The Funds may hold debt and debt-related instruments that expose the Funds to credit risk. Credit risk refers to the likelihood that an issuer will default on the payment of principal and/or interest on a debt instrument. Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument.Interest rate risk refers to the risks associated with market changes in interest rates. Interest rate changes may affect the value of a debt instrument directly and indirectly. In general, rising interest rates will negatively impact the price of a fixed rate tdeb instrument and falling interest rates will have a positive effect on price. Adjustable-rate instruments also react to interest rate changes in a similar manner although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including the index chosen, frequency of reset and reset caps or floors, among other factors). Interest rate sensitivity is generally more pronounced and less predictable in instruments with uncertain payment or prepayment schedules.It cannot be predicted with certainty when, or how, the Federal Reserve and other global central banks may change their policies with respect to interest rates, but further actions by the Federal Reserve and other central bankers may have a significant effect on interest rates and on the U.S. and world economies generally, which in turn may affect the performance of the Funds’ investments.

Illiquid Investments; Limited Markets. Private investments, at least initially, are generally illiquid financial instruments or other illiquid assets. The risk of investing in such assets generally is greater than the risk of investing in registered, publicly traded financial instruments. There is a significant risk that a Private Design Fund or an Innovations Fund will be unable to realize its

investment objectives by sale or other disposition at attractive prices or will otherwise be unable to complete any exit strategy. In some cases, a Private Design Fund or an Innovations Fund may be prohibited by contract from selling financial instruments for a period of time or otherwise may be restricted from disposing of such financial instruments. Furthermore, the types of investments made sometimes require a substantial length of time to liquidate. Lack of an active secondary market and resale restrictions may result in the inability of a Private Design Fund or an Innovations Fund to sell a financial instrument at a fair price and may substantially delay the sale of part or all of an investment which a Private Design Fund oran Innovations Fund seeks to sell. Although investors may have certain registration rights, the exercise of these registration rights will likely be dependent upon various conditions, and there is no assurance that such conditions will occur or that such registration ri ghts will otherwise be exercisable. Even upon registration, financial instruments of emerging healthcare companies may lack an active secondary market and may be relatively illiquid. Therefore, it may be difficult to sell large positions without adversely affecting the price of such financial instruments. Additionally, such financial instruments may be subject to more abrupt or erratic price movements than financial instruments of larger, more established companies or stock market averages in general. Such factors may negatively impacta Private Design Fund’s or an Innovations Fund’sexit strategy. The success of a Fund’s investment in a private company depends on the Fund’s ability to exit the investment, often only through a merger, acquisition or IPO, and the likelihood of such an exit occurring may be materially affected by prevailing market con ditions. Even if a private company in which a Fund invests is ultimately successful, such success may occur only after a recapitalization of the company which significantly dilutes the value of the Fund’s investment, or such success may not occur during a timeframe in which it is feasible for the Fund to maintain its investment. The Funds may make minority investments in private companies where they may have limited influence and/or access to financial or operating information. Such a company may develop economic or business interests or goals that are not consistent with those of the Funds, and the Funds may not bein a position to limit or otherwise protect the value of their investment in such company. The foregoing risks are also applicable tothe Public Securities Strategyto the extent it makes private investments.

Private Debt Transactions. The Funds may invest in loans, make loans directly toborrowers and engage in other types of private debt transactions. There are no restrictions on the credit quality of the Funds’ loan investments. Loans held by the Funds may have substantial vulnerability to default in payment of interest and/or principal. Certain of the loans the Funds may own may have large uncertainties or major risk exposures to adverse conditions and may be considered to be predominantly speculative. Generally, such loans offer a higher return potential than higher quality loans but involve greater risk of loss of income and principal. The value of certain of these loans may also be more sensitive to changes in economic conditions than higher -quality loans. Although loans originated by a Fundmay be collateralized, such Fund may be exposed to losses resulting from default and foreclosure. Therefore, the value of the underlying collateral , if any, the creditworthiness of the borrower and the existence and priority of any lien are of great importance to the Fund. A Fund cannot guarantee the adequacy of the protection of the Fund’s interest in any loan, including the validity or enforceability of the loan or the maintenance of the anticipated priority and perfection of theapplicable security interests. Furthermore, claims may be asserted by other parties that might interfere with enforcement of the Fund’s rights. In the

event of a foreclosure by a Fund , the Fund or an affiliate of the Fund may assume direct ownership of the underlying asset. The liquidation proceeds upon the sale of such asset may not satisfy the entire outstanding balance of principal and interest on the loan, resulting in a loss to the Fund. Any costs or delays in effecting a foreclosure or the liquidation of any underlying collateral will further reduce the proceeds and thus increase the Fund’s loss. The Funds may acquire or participate in both performing and non -performing loans. Performing loans may become non -performing or impaired for a variety of reasons. Nonperforming or impaired loans may require substantial workout negotiations or restructuringthat may entail a substantial write-down of the value of the loan. Loans may encounter trading delays due to their unique and customized nature, and transfers may require the consent of an agent bank and/or borrower. Risks associated witha Fund’s investment by way of an assignment or participation in bank loans include the fact that prepayments may generally occur at any time without premium or penalty. As a lender, the Funds may be exposed to certain lender liability risks under various legal theories. Lenders are also potentially subject to risks of fraudulent conveyance or avoidable preference or otherwise subject to the risk of equitable subordination . In addition, settlement of corporate loans may take an extended time period. In the case of a loan participation, the Fund will have only an indirect claim to the related loan and will assumeboth the credit risk of the corporate borrower as well as the credit risk of the interposed financial intermediary. Purchasers of loans are mainly commercial banks, investment funds, mutual funds and investment banks. As secondary market trading volumes increase, new loans are frequently adopting standardized documentation to facilitate loan trading which may improve market liquidity. There can be no assurance, however, that future levels of supply and demand in loan trading will provide an adequate degree of liquidity or that the current level of liquidity will continue. Because of the provision to holders of such loans of confidential informationrelating to the borrower, the unique and customized nature of the loan agreement s, and the private syndication of the loans, loans are not as easily purchased or sold as a publicly traded security, and historically the trading volume in the loan market has been small relative to, for instance, the high-yield debt market. Loans originated or held by the Funds may be sufficientl y bespoke such that such loans may not benefit from the secondary markets .

Foreign Securities. Investing in foreign securities, including privately structured investments in foreign companies, involves risks not typically associated with investing in securities of United States issuers. These risks include changes in exchange rates and exchangecontrol regulations, political and social instability, expropriation of assets, the imposition of foreign taxes, less liquid markets and less available information on companies than is generally the case in the United States. Other risks of foreign securi ties and investments include higher transaction costs, less government supervision of exchanges, brokers and issuers, difficulty in enforcing contractual obligations, the lack of uniform accounting and auditing standards, and greater price volatility. In addition,upon disposition of foreign securities, p aymentof proceedsmay be subject to withholding reviewsunder local law, which may delay the release of funds to the Fund until necessary determinations are made in respect of withholding requirements.

Currencies. A Fund may invest in securities denominated in currencies other than the U.S. dollar or the price of which is determined with reference to currencies other than the U.S. dollar. Unless the Fund hedges the currency exchange risk, the value of such assets (m easured in U.S. dollars) will fluctuate with U.S. dollar exchange rates as well as with price changes in the applicable local markets and currencies.

Options. A Fund may invest in, or write, options. The purchaser of a put or call option runs the risk of losing the purchaser’s entire investment if the option expires out of the money. The uncovered writer of a call option is subject to a risk of loss should the price of the underlying security increase, and the uncovered writer of a put option is subject to a risk of loss should the price of the underlying security decrease.

Bonds. A Fund may invest in bonds or other fixed income securities, including high yielding debt securities when the Firm believes that such securities offer attractive yields or capital appreciation. A Fund may invest in “distressed debt” that carries a significant risk of default by the issuer. Such securities are generally below “investment grade” and face ongoing uncertainties and exposure to adverse business, financial or economic conditions that could lead to the issuer’s inability to meet timely interest an d principal payments. The market values of lower rated debt securities tend to reflect individual corporate developments to a greater extent than do higher rated securities and tend to be more sensitive to economic conditions than are higher rated securities. Issuers of such securities often have less access to other sources of capital and, in the event of an adverse economic event, may be unable to satisfy their debt obligations in full. In the case of distressed debt, the issuing company may be at a subst antial risk of bankruptcy.

Investments in SPACs . A Fund may invest in, sponsor or otherwise facilitate the acquisition of companies by, and exit portfolio investments through the use of, special purpose acquisition companies (“SPACs”). A SPAC is a single -use vehicle incorporated for the purpose of raising capital to fund the acquisition, through a merger, asset acquisition or other similar business combination, of one or more operating businesses, by a predetermined deadline. Investors in a SPAC typically would receive a return on their investment in the event that a target company is acquired by the SPAC and such target company’s value increased. However, the value of any target company could decrease following its acquisitionby a SPAC. A SPAC may fail to identify a specific target, and, as a result, it may never execute a business combination. If a SPAC is unable to locate and acquire a target company (or target companies) by the deadline, the SPAC would be forced to liquidate its assets, which could result in losses due to the SPAC’s expenses and liabilities and cause a Fund to incur the opportunity cost of missed investment opportunities from which a Fund otherwise may have benefited. If a SPAC is unsuccessful in identifying an attractive investment (or obtaining any requisite approvals for a business combination) and consummating a business combination, investors in the SPAC may be required to wait until the deadline before liquidating distributions are made. A transaction once identified or effected may prove unsuccessful and an investment in the SPAC may lose value; the warrants or other rights with respect to the SPAC held bya Fund may expire worthless,or may be repurchased or retired by the SPAC at an unfavorable price; and an investment in a SPAC may be diluted by additional later offerings of interests in the SPAC or by other investors exercising existing rights to purchase shares of the SPAC. In addition, a SPAC target company may have limited operating experience,

a smaller size, limited product lines, markets, distribution channels and financial and managerial resources. Investing in the securities of smaller companies involves greater risk, and portfolio price volatility. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices. In addition,SPAC securities, which are typically traded on an exchange, may be subject to restrictions on resale. SPACs could generate substantial fees, costs and expenses, which are typically borne by the investors therein (in some cases, regardless of whether, or when, the SPAC consummates a transaction). A Fund may also invest in the equity securities of the sponsor of a SPAC (“ SPAC Sponsor Equity ”). Investments in SPAC Sponsor Equity involve even greater risks because the SPAC Sponsor Equity will typically be required to absorb certain expenses of the related SPAC if the SPAC does not successfully complete a business combination transaction before the relevant deadline. In connection with the risks described above, a SPAC has an increased risk of shareholder litigations and regulatory scrutiny, which could lead to costly investigations, fines and settlements, and could adversely impact the value of a SPAC investment.

Investments in PIPEs. A Fund may invest in privately sourced and structuredequity and equitylinked securities of public companies (“ PIPEs”), including PIPES issued by SPACs . PIPE investments offer the opportunity for significant gains, but also involve a high degree of risk, including the complete loss of capital. Among these risks are the general risks associated with investing in companies operating at a loss or with subst antial variations in operating results from period to period and investing in companies with the need for substantial additional capital to support expansion or to achieve or maintain a competitive position. Such companies may face intense competition, including competition from companies with greater financial resources, more expansive development, manufacturing, marketing and service capabilities, and a greater number of qualified managerial and technical personnel. Securities of companies that issue PIPEs are often thinly traded, and the companies may be under -capitalized, and therefore such securities may be more sensitive to adverse business or financial developments. The ability of a Fund to liquidate its positions and generate profits from its investm ent activities may also be adversely affected by a failure of issuers to comply with registration, conversion, exchange or other obligations under the agreements pursuant to which such securities have been sold to a Fund or by burdensome requirements imposed by an issuer or its advisors in connection with potential sales.

Special Situations. A Fund may invest in the financial instruments of an issuer based upon, or in anticipation of, an extraordinary corporate event, such as clinical trial results, regulatory action, a spin-off, merger, or other reorganization, or which may be highly leverage d or operating in an out-of-favor industry sector. In addition to all ofthe risks set forth herein, there is the additional risk that the anticipated special situation will not occur or the anticipated benefit of the special situation will not be realized.

Changes toBenchmark Rates. To the extent that a Fund’s investments, borrowing facilities, hedging activities, or other assets or structures are tied to interest rates based on benchmark or reference rates, includingthe Secured Overnight Financing Rate (“ SOFR”) or other rates (each, a “ Benchmark

Rate”), the Fund may be subject to certain material risks, including the risk that a Benchmark Rate is terminated, ceases to be published or otherwise ceases to be broadly used by the market. Transitions to and from Benchmark Rateshave the potential to: increase volatility or illiquidity in markets; cause delays in or reductions to financing options for the Funds and their portfolio companies; increase the cost of borrowing; reduce the value of certain instruments or the effectiveness of certain hedges; cause uncertainty under applicable legal documentation; or otherwise impose costs and administrative burdens relating to factors that include document amendments and changes in systems.

Financial Institution Risk; Distress Events. An investment in a Fund is subject to the risk that one of the banks, brokers, counterparties, clearinghouses, exchanges, lenders or other custodians (each, a “Financial Institution”) of some or all of the Fund’s (or any portfolio company’s) assets fails to timely perform or otherwise defaults on its obligations or experiences insolvency, closure, seizure, receivership or other financial distress or difficulty (each, a “Distress Event”). Distress Events can be caused by factors including eroding market sentiment, significant withdrawals, fraud, malfeasance, poor performance, undercapitalization, market forces or accounting irregularities. If a Financial Institution experiences a Distress Event, the Firm, its affiliates, the Funds and/or any of the portfolio companies may be unable to access deposits, borrowing facilities or other services, either permanently or for an indeterminate period of time . Although assets held by regulated Financial Institutions in the United States frequently are insured up to stated balance amounts by organizations such as the Federal Deposit Insurance Corporation, in the case of banks, and the Securities Investor Protec tion Corporation, in the case of certain broker-dealers, amounts in excess of the relevant insurance are subject to risk of total loss, and any non-U.S. Financial Institutions that are not subject to similar regimes pose potentially increased risk of loss. While in recent years governmental intervention has often resulted in additional protections for depositors and counterparties in connection with Distress Events, there can be no assurance that any intervention will occur, be successful or avoid the risks of loss, substantial delays or negative impact on banking or brokerage conditions or markets. Any Distress Event has a potentially adverse effect on the ability of the Firm to manage the Funds and their investments, and on the ability of the Firm, its aff iliates, any Fund or any portfolio company to maintain operations, which in each case could result in operational burdens, significant losses and unconsummated investment acquisitions and dispositions. Such losses could include, without limitation: a loss of funds; an obligation to pay fees and expenses in the event a Fund or portfolio company is unable to close a transaction (whether due to the inability to draw capital on a credit line provided by a Financial Institution experiencing a Distress E vent, the inability of the Fund to access capital contributions or otherwise); the inability of the Fund or portfolio company to acquire or dispose of investments, including at prices that the Firm believes reflect the fair value of such investments; and/o r the inability of the Firm, its affiliates or portfolio companies to make payroll, fulfill obligations and/or maintain operations. If a Distress Event leads to a loss of access to a Financial Institution’s services, it is also possible that the Firm, its affiliates, the Funds or portfolio companies will experience operational burdens and expenses, will incur additional expenses and/or delays in putting in place alternative arrangements and/or that such alternative arrangements will be less favorable than t hose formerly in place (with respect to economic terms, service levels, access to capital or otherwise). There can be no assurance that the Firm, its affiliates, the Funds or portfolio companies will be able to exercise contractual remedies under the agreements with Financial Institutions in the event of a Distress

Event, or that such remedies will be successful or avoid losses, delays or other negative impacts. The Funds and their portfolio companies are subject to additional risks in the event a Financial Institution utilized by investors of a Fund or suppliers, ve ndors, service providers or other counterparties of a portfolio company become subject to Distress Events, which could have a material adverse effect on a Fund, its investors or such portfolio companies, including the risk of investor defaults. Many Financial Institutions require, as a condition to using their services (including lending services), that the Firm, Fund or portfolio company maintain all or a set amount or percentage oftheir respective accounts or assets with the Financial Institution, which heightens the risks associated with a Distress Event with respect to such Financial Institutions. Although the Firm seeks to do business with Financial Institutions that it believes are creditworthy and capable of fulfilling their respective obligations to the Funds, the Firm is under no obligation to use a minimum number of Financial Institutions with respect to any Fund, or to maintain account balances at or below the relevant insured amo unts.

Social Media Risks.The use of social media platforms presents risks and challenges to issuers in which the Funds invest. Social media platformsallow individuals access to a broad audience of consumers and other interested persons. The popularity of social media and other consumeroriented technologies has increased the speed and accessibility of information dissemination. Many social media platforms immediately publish the content their subscribers and participants post, often withoutindependent or authoritative verificationof the content posted. Information posted on such platforms at any time may be adverse to the interests of issuers in which the Funds invest. The dissemination of negative or inaccurate information about such issuers via social media could harm their bus iness, reputation, financial condition, and results of operations, which could adversely affect the Funds, or may influence the Firm’s decisions as to whether to remain invested in such issuers. If a Fund holds a short or other derivatives position in suc h issuers, the price volatility of such issuer could magnify the risks of short sales or the use of other derivatives to the Fund.Any such information or misinformation regarding the Firm, the Funds or one or more portfolio companies could have a material and adverse effect on the value of the Funds.

Control Group Disclosure . Section 13(d) of the Exchange Act provides that any “group” acquiring in excess of 5% of a public company’s equity must make certain public disclosures on Schedule 13D or 13G. Should a Fund, either alone or together as a “group” with other Funds or other persons, acquire in excess of 5% of apublic company’s equity securities, such Fund would be required to file a Schedule 13D or 13G. The filing of such a Schedule might adversely affect such Fund’s ability to acquire sufficient additional securities at appropriate prices to pursue its strategy with respect to that company. In addition, even if a Fund is not acting as part of a “group” in acquiring a company’s equity securities, the company or the SEC could challenge such Fund’s strategy by alleging that it is part of a “group” and should have made a S ection 13 filing. If such a challenge were successful, such Fund could be treated as having violated the Exchange Act, which could have a material adverse effect on the Fund. The determination of what constitutes a “group” is fact-specific; however, the Firm does not intend to possess voting or investment control, either alone or together with other persons, over more than 5% of apublic company’s equity without making the required filings.

Material, Non-Public Information; Other Regulatory Restrictions. As a result of the operations of the Firm and its affiliates as well as in connection with directorships of Firm personnel, the Firm frequently comes into possession of confidentialor material, non-public information.If the Firm has access to confidential and material, non-public information, applicable securities laws or internal policies and procedures may restrict a Fund from initiating a transaction or selling an investment which, if such information had not been known to the Firm , may have been undertaken. Investments are generally selected for a Fund based primarily on fundamental analysis, which may include paid consultations and surveys with experts in various disciplines, including, for example, the scientific, medical, mathematical, commercial, business , regulatory, and legal fields. Individuals with sufficient expertise to provide the Firm with useful information may also possess material, nonpublic and/or confidential information, the receipt of which could cause a Fund to be restricted from trading in relevant securities. Similarly, anti-money laundering, anti -boycott and economic and trade sanction laws and regulations in the United States and other jurisdictions may prevent the Firm or a Fund from entering into transactions with certain individuals or jurisdictions. The United States Department of the Treasury’s Office of Foreign Assets Control (“ OFAC ”) and other governmental bodies administer and enforce laws, regulations and other pronouncements that establish economic and trade sanctions on behalf of the United States. Among other things, these sanctions may prohibit transactions with , or the provision of services to, certain individuals or portfolio companies owned or operated by such persons, or located in jurisdictions identified from time to time by OFAC. If after subscribing to a Fund a n investor is included on a list of prohibited persons maintained by a relevant regulatory or governmental authority (including OFAC or equivalent non-U.S. authorities) (a “Sanctions List”), the relevant General Partner willhave the discretion to determine the resolution, remedy and manner of compliance of the Fund with applicable laws, including without limitation a “freeze” on distributions and/or capital calls from the relevant investor and reporting to the relevant authorities. Adverse actions by any such authorities, including temporary or permanent stays or holds on the Fund’s activities, could materially and adversely affect the Funds . Additionally, antitrust laws in the United States and other jurisdictions give broad discretion to the U.S. Federal Trade Commission, the U.S. Department of Justice and other U.S. and non -U.S. regulators and governmental bodies to challenge, impose conditi ons on, or reject certain transactions and even investment strategies (such as roll -ups of smaller players in a fragmented industry). In certain circumstances, antitrust restrictions relating to one Fund’s acquisition of a portfolio company may preclude other Funds from making an attractive acquisitionor require one or more other Funds to sell all or a portion of certain portfolio companies owned by them . As a result of any of the foregoing, a Fund may be adversely affected because of the Firm’s inability or unwillingness to participate in transactions that may violate such laws or regulations, or by remedies imposed by any regulators or governmental bodies . Any such laws or regulations may make it difficult or may prevent a Fund from pursuing investment opportunities, require the sale of part or all of certain portfolio companies on a timeline or in a manner deemed undesirable

by the Firm or may limit the ability of one or more portfolio companies from conducting their intended business in whole or in part. Consequently, there can be no assurance that any Fund will be able to participate in all potential investment opportunities that fall within its investment objectives. Certain laws or regulations may also impact the ability of the Firm, its affiliates or portfolio companies to engage, or continue to engage, certain service providers, in particular those operating outside the U.S.

Non-U.S. Investments. A Fund may invest in companies that are organized, headquartered and/or have substantial sales or operations outside of the United States, its territories and possessions. Such investments may be subject to certain additional risks due, among other s, thing to potentially unsettled points of applicable governing law s, changes in tariff, trade and regulatory regimes , the risks associated with fluctuating currency exchange rates and capital repatriation regulations (as such regulations may be given effect during the term of a Fund) and the application of complex tax rules to cross border investments, possible imposition of non-U.S. taxes on a Fund and/or the partners with respect to such Fund’s income, and possible non -U.S. tax return filing requirements for such Fund and/or theinvestors.

Investment Adviser Regulatory Risk . There are routinely discussions regarding enhanced governmental scrutiny and/or increased regulation of the private funds industry. SEC rulemaking can materially impacthe Firm and its affiliates, the Funds and/or their investments. In addition, the Funds may bear increased costs as a result of such rules. Significant time and resources are often required to comply with new regulations, which may detract from the time and resources dedicated to the Funds.

Diligence. The Firm seeks to conduct reasonable and appropriate due diligence and analysis of prospective investments based on the facts and circumstances applicable to each investment opportunity, with the objective of identifying attractive investment opportunities and identifying possible risks associated with the potential investment. Depending on the circumstances and nature of the particular investment opportunity, d ue diligencecan often involve an evaluation of important and complexissues, includingbusiness, financial, tax, accounting , regulatory and legal issues, as well as an assessment of technological and other relevant factors. Consultants, legal advisers, accountants, regulatory experts and other third parties can be involved in the due diligence process to varying degrees, depending on the nature and type of the investment opportunity. Involvement of third party advisers or consultants presents a number of risks , including relating to the Firm’s reduced control of the functions that are outsourced. The due diligence conducted with respect to any particular investment opportunity by or on behalf of the Firm will not always reveal all relevant facts or information necessary in evaluating the opportunity optimally. Instances of fraud and other deceptive practices committed by the management teams of prospective or existing portfolio companies of the Funds, for instance, could undermine the Firm’s due diligence efforts with respect to such companiesand could have an adverse effect on the Funds. The analysis of potential investments by the Firmmay need to be undertaken on an expedited basis to take advantage of certain investment opportunities. In such cases, the information available to the Firm at the time of making an investment decision may be limited, and the Firm might not have access to detailed information regarding the investment opportunity. Therefore, there can be no assurance that the Firm will havecomplete knowledge of all potential circumstances, and that may adversely affect any investment by the

Funds. In general, the Firm does not undertake such diligence in respect of investments made through algorithmic, quantitative or systematic strategies.

Use of Alternative Data. The Firm obtains and uses alternative data in its investment process. Alternative data (sometimes also referred to as “big data”) generally refers to data collected, including by webscraping,from a variety of sources, either by theFirm or third parties, including medical, hospital and insurance records, surveys of doctors and other service providers and participants in the healthcare industry, payment records, internet usage, financial transactions, applications and devices (such as smartphones) that generate location and mobility data, data gathered by satellites, and government and other public records and databases. The Firm intends to use alternative data to better identify trends and themes in the healthcare industry. There is no assurance that theFirm will be successful in utilizing alternative data in its investment process. There has been increased scrutiny from a variety of regulators regarding the use of alternative data for investment purposes, and the use or misuse of alternative data under curre nt or future laws and regulations could create liability for theFirm or a Fund in numerous jurisdictions. The Firm cannot predict what, if any, regulatory or other actions may be asserted with regard to the use of alternative data, but any adverse inquiries or formal actions could cause reputational, financial, or other harm to theFirm or a Fund, and any future limitations on the use of alternative data could have a material adverse impact on the performance of a Fund. Although the Firm conducts due diligence reviews of data providers and , where possible and appropriate,requires that they make certain representations about the sources of the data that they provide, such actions may not be effective to protect against the effect of misrepresentations or violations of law by such data providers.

Artificial Intelligence and Machine Learning. Recent and emerging technological advances in artificial intelligence, large language models , neural networks, data science technology, and machine learning technology (collectively, “ AI Technology”) offer tremendous potential benefits but also present risksto the Firm, the Funds and portfolio companiesthat should be considered. Risks may include, without limitation, that outputs are inaccurate , misleading or incomplete ; that a user can direct an tool to ignore previous instructions or perform prohibited or unintended actions; embedded bias;the risk of unauthorized transmission of information or data to external parties; lack of transparency into the underpinnings of a tool(e.g., AI Technology may rely on techniques that are less transparent or interpretable and may produc e unexpected results); intellectual propertyconsiderations; regulatory uncertainty;and responses that undermine the accuracy, fairness and utility of the AI Technology. These could lead to errors in the Firm’s decision-making or other activities, which could have a negative impact on the Funds. While the Firm utilizes AI Technology in connection with its business activities, including investment and operational activities, the Firm periodically evaluates and, where appropriate, adjusts internal policies governing use of AI Technology by its personnel. Notwithstanding any such policies,Firm personnel could utilizeAI Technology in contravention of such policies.There can also be no assurance that Machine Learning Technology will function as intended or that associated risks will not adversely impact the Funds . The Firm, the Funds and portfolio companies could be further exposed to the risks ofAI Technology if third-party service providers or counterparties, whether or not known to the Firm, use AI Technology in their business activities. The Firm will generally not be able to control the use of AI Technology in third-party

products or services. Use of AI Technology may include the input of confidential information into AI Technology applications, resulting in such confidential information becoming part of a dataset that is accessible by other third-party AI Technology applications and users. Independent of its context of use,AI Technology is generally highly reliant on the collection and analysis of large amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that AI Technology utilizes to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error — potentially materially so — and could otherwise be inadequate or flawed, which would be likely to degrade the effectiveness of AI Technology. To the extent that the Firm, the Funds or portfolio companies are exposed to the risks of AI Technology, any such inaccuracies or errors could have adverse impacts on the Firm, the Funds or portfolio companies. Conversely, to the extent competitors of the Firm and its portfolio companies utilize AI Technology more extensively than the Firm and its portfolio companies, there is a possibility that such competitors will gain a competitive advantage. Use of AI Technology creates exposure to cybersecurity risks. Data utilized in connection with AI Technology could be exposed to third parties through unauthorized access, system vulnerabilities, or misuse.AI Technology may also be susceptible to manipulation. Despite the Firm’s efforts to implement appropriate safeguards, policies, and oversight, security cannot be guaranteed, and the use of AI Technology may increase the risk of data breaches, operational disruptions, or other cybersecurity incidents. AI Technology may include agentic or autonomous tools that can initiate or sequence tasksor workflows, interact with other systems, or generate content without direct human prompting. Use of such agentic AI Technology involves additional risk such as unauthorized access to or misuse of data , sharing of information across interconnected system s, access management vulnerabilities, and executing actions that were not specifically anticipated when set up by a human. Despite controls, there can be no guarantee thatagents will function as intended. AI Technology and its applications, including in the financialand healthcaresectors, continue to develop rapidly, and it is impossible to predict the future risks that may arise from such developments.In addition, legal and regulatory frameworks governing the use of AI are evolving and may impose additional compliance obligationsand costs in the future. Failure to properly manage the use of AI Technology could result in reputational harm, competitive harm, legal liability, and other adverse consequences. Further, use ofAI Technology may result in litigation risk against the Firm, Funds or portfolio companies related to third-party intellectual property rights and breach of contractual obligations. Given the rapid pace of innovation, any use of or reliance upon any AI Technology is accompanied by a meaningfulrisk of obsolescence.

Programming, Data and Models. The Firm uses a range of data and models , both developed internally and supplied by third parties, in its investment process. There is no guarantee that any specific data or type of data will be utilized in generating models or informing investment decisions, and the decision whether or not to use specific data, data types or data products is informed by factors including the cost effectiveness of utilizing suchdata, and any risk thatmay be associated with it. There can be no guarantee that the data actually utilized in generating forecasts or making trading decisions underlying the models will be the most accurate data

available or free of errors.Errors in data reliedupon in making investment decisions expose the Funds to risks, including that investments are purchased at prices that are too high, sold at prices that are too low, or that potentially favorable investment opportunities are missed .

QuantitativeModels. The Public Securities Strategymay utilizeportfolio construction models that are based on quantitatively-based relationships developed based on research and inferences drawn from data. The success of such models will generally depend on their ability to accurately predict future market prices and volatility, which in turn may depend upon a continuation of past correlations between equity market prices and the factors used in the models. To the extent that such models, or the assumptions underlying them, are not correct, the Fund may sustain losses. Even if such correlations exist in the future, they may not exist over the period of any particular investment in the Fund.Any one or all of these assumptions, whether or not supported by past experience, could proveover time to be incorrect. Even if such assumptions are correct, there can be no assurance that the software code used by the portfolio construction models will successfully or optimally translate the Firm’s quantitative analyses into successful trading r esults. Portfolio construction models generally need to be updated regularly as market and fundamental data and dynamics shift over time in order to remain effective. A previously successful model often becomes outdated or inaccurate, perhaps without a quantitative research or portfolio manager recognizing that fact before substantial losses are incurred .

Cybersecurity Risk. Increased reliance upon internet -based programs and applications to conduct transactions and store data creates growing security and operational risks. Targeted cyberattacks (including phishing attempts) as well as accidental events, can lead to a breach in computer and data systems security and subsequent unauthorized access to sensitive transactional or personal information. Data taken in breaches may be used by criminals in committing identity theft, obtaining loans or payments under false identities, and in other crimes that could affect the value of assets in which a Fund invests. Cybersecurity breaches at the Firm , affiliates, portfolios companies or their vendors and service providers may also lead to theft,ransom demands,data corruption, or overall disruption in operational systems. These threats may also directly or indirectly affect a Fund through cyber incidents with third party service providers or counterparties. Cybersecurity risks can disrupt the Firm’s ability to engage in investment-related and transactional business, cause direct financial loss or reputational damage, or lead to violations of applicable laws, including those related to data and privacy protection. These risks also result in ongoing prevention and compliance costs.Cybersecurity risks can also disrupt the operations of, and impose additional financial burdens on, portfolio companies, which could harm a Fund’s investment returns.

Data Privacy Protection. Legal requirements relating to the collection, maintenance, use and transfer of personal data relating to individuals continue to develop across many jurisdictions. Certain activities of the Firm or its affiliates, the Funds and portfolio companies, including the those relating todata analytics and artificial intelligence , may be subject to data protection laws . Many of these laws are new or not yet fully implemented, and it can therefore be difficult to accurately anticipate how these laws will be applied or interpreted. If the Firm, the Funds and portfolio companies do not comply with applicable data privacy protection laws, they may incur reputational damage and significant costs, including those associated with litigation, settlements, regulatory action, or penalties. Any proceeding involving the Firm or Funds may also divert time

and effort of the Firm’s personnel who are otherwise focused on investment activities of the Funds. Depending on how data protection laws are implemented, interpreted or applied, business practices may need to be modified in a manner that adversely impacts the Funds or portfolio companies.

Business Continuity and Disaster Recovery. The Firm maintains business continuity and disaster recovery plans designed to mitigate the impact of significant business disruptions. However, catastrophic events such as natural disasters, fires, power outages, pandemics, terrorist attacks, geopolitical instability, public health crises, cyber incidents or other extraordinary events could materially disrupt the Firm’s or Funds’ operations or those of their service providers, counterparties or portfolio companies. Although the Firm seeks to implement reasonable contingency planning, not all risks can be anticipated, and there can be no assurance that the Firm’s business continuity plans will operate as intended under all circumstances.

Governmental Export and Import Controls. Various countries regulate the import of certain technology, including through import permitting and licensing requirements, and have enacted laws that could limit the ability of the Funds or their portfolio companies to offer or distribute their products. Further, U.S. export control laws and economic sanctions prohibit the shipment of certain products and the provision of funds and services to countries, governments and persons targeted by U.S. sanctions. Such governmental export and import controls could negatively impact a Fund by impairing the ability of its portfolio companies to compete in international markets or subject it to liability for violations, including possible civil and criminal penalties and repercussions. In addition, as a result of export controls, the Firm and portfolio companies may be unable to share information with persons outside the U.S. or with non-U.S. persons in the U.S., thus effectively preventing them from engaging in business with service providers located outside, and with certain service provider s inside, of the United States.

Possibility of Misconduct of Personnel and Service Providers. Misconduct by personnel of the Firm or by service providers of the Firm or Funds could result in significant losses to the Funds. Misconduct could include fraud, entering into transactions without authorization, the failure to comply with policies and procedures, including due diligence procedures, misrepresentations as to investments being considered by the Funds, the improper use or disclosure of confidential information, non-compliance with applicable laws or regulations (including in the workplace via inappropriate or unlawful behavior or actions directed to otherpersonnel) and the concealing of any of the foregoing. Such misconduct could result in reputational damage, litigation, business disruption and/or financial losses to the Funds. The Firm has controls and procedures through which it seeks to minimize the risk of su ch misconduct occurring, but no assurances can be given that the Firm will be able to identify or prevent such misconduct.

Side Letters. A General Partner and/or a Fund will enter into other written agreements , uch as Side Letters with one or more investors. Side Letters may entitle an investor to make an investment in a Fund on terms other than those set forth in the Fund Memorandum and governing documents. Any such terms, including with respect to (i) opting out of particular investments, (ii) notice or reporting obligations of a Fund, (iii) co-investment opportunities, (iv) fee or fee structures, (v) transparency rights or (vi) any other matters, may be more favorable than those offered to any other investors. If a General Partner and/or a Fund enter into a Side

Letter entitling an investor to opt out of a particular investment, any election to opt out by such investor may increase any other investor’s pro rata interest in that particular investment. A General Partner and/or a Fund may enter into Side Letters with certain investors that have investment arrangements with respect to one or more other Funds, and such Side Letters may contain differing economic, governance or related arrangements to those offered and/or disclosed to other investors, and many of which will not be subject to “most -favored nation” provisions. Except in the circumstances and on the timing required by a Fund’s governing documents and/or applicable law, such agreements will be disclosed only to those actual or potential investors that have separately negotiated with a General Partner for the right to review such agreements. In addition, certain investors may be strategic investors to which the Firm provides rights that it does not provide to all investors, which may include investment opportunity rights as well as access to portfolio company management teams. In addition to these conflicts of interest for the Firm, the Firm’s relationship with strategic investors may lead to conflicts of interests because strategic investors may have interests and relationships, including with the Firm or certain portfolio companies,that conflict with the interests of other investors.

Litigation Risk. The Funds may be subject to a variety of litigation risks, which may include, without limitation, claims relating to alleged breach of fiduciary duties or breach of contract. This can arise, for example, as a result of Firm personnel actively assisting portfolio companies in differing capacities (including by serving as directors or advisors). The Fund s may also participate in portfolio company financings at implicit valuations lower than the valuations implicit in preceding rounds of financing, vote portfolio company shares in a manner contrary to the interests of other shareholders, or be exposed to fl ow-through liability for portfolio company debts and obligations. In the event of a dispute arising from any of the foregoing activities or other activities relating to the operation of the Fundand/or portfolio companies, it is possible that the Fund, the Firm, their respective affiliates or their respective personnel may be named as defendants. Under most circumstances, the Fund will indemnify the Firm, its affiliates and personnel for any costs they incur in connection with such disputes. Beyond direct costs, such disputes may adversely affect the Fund in a variety of ways, including by distracting the Firm and harming relationships between the Fund and its portfolio companies or other investors in such portfolio companies. To the extent set forth in governing documents of a Fund, investor may be required to return distributions previously received by them from the Fund, including for purposes of enabling the Fund to make indemnification payments to the Firm, its personnel or other indemnified persons. The outcome of any legal proceedings, which may materially adversely affect the value of a Fund, is unpredictable, and such proceedings may continue without resolution for long periods of time.

U.S. Taxation of Carried Interest. U.S. federal income tax law treats certain allocations of capital gains to service providers by partnerships such as the Funds as short -term capital gain (taxed at higher ordinary income rates) unless the partnership has held the asset that generatedchsugain for more than three years.This creates potential incentives for the Firm to cause a Fund to hold investments for a longer period than would be the case if such greater -than-three-year holding period requirement did not exist.Additionally, Congress has considered proposed legislation that would treat certain income allocations to service providers by partnerships such as a Fund

(including any carried interest) as ordinary income for U.S. federal income tax purposes that under current law are treated as an allocation of the partnership’s income (and which may be taxed at lower rates than ordinary income). Such rules, as well as yansuch legislation that may be enacted in the future, could apply to reduce the after -tax returns of individuals associated with a Fund, its General Partner, orthe Firm who were or may in the future be granted direct or indirect interests in carried interest, which could make it more difficult for the relevant General Partner and its affiliates to incentivize, attract and retain individuals to perform services for a .Fund

Secondaries and other G eneral Partner-Led Transactions. There continues to be a significant market for secondary sales, General Partner-led transactions, continuation funds, successor fund investments and other transactions, and the Firm reserves the right to dispose of (or seek additional capital for) Fund investments through such means. Some of these transactions may involve result in the Firm continuing to manage or have an interest inall or a portion of one or more investments following the transaction. These types of transactions are permitted to be undertaken for various reasons, including, for example, to balance competing interests between offering liquidity to existing investorsand maintaining exposure to an asset where the Firmbelieves there is the potential for additional value generation. Where undertaken, existing investorsmay be offered certain options relating to receiving liquidity from the transaction or continuing to maintain exposure to the asset, assets or a new portfolio of assets (including a portfolio that combines assets from multiple Funds sponsored by theFirm and its affiliates), often on different terms than their original investment in the . Fund However,certain of such transactionsmay involve an investor investing (or being required to invest) additional capital in the existing Fund and/or other investment vehicles, a greater exposure to one or more particular portfolio companies, and/or a delay in the full liquidation of the Fund’s investment. In other circumstances, even investors that elect to continue to hold a direct or indirect interest in the relevant portfolio company will have their interest adjusted as if distributed (i.e., a portion of such interest will be allocated to the relevant General Partner to the extent of itst to righreceive carried interest, if any), effectively diluting their interests. In some instances,existing investorsmay only beoffered liquidity and not the opportunityto continue to maintain exposure toan asset. Each of these transactions has the potential for conflicts between the interests of a Fund or investor and those of the Firm or any buyer group that typically are not applicable to more traditional investment sales. For example, in circumstances wherethe Firm or an affiliate will continue to manage and receive fees and/or performance-based compensation relating to the subject assets following the transaction (potentially in addition to performance-based compensation earned by the relevant General Partner on the sale of an asset from an existing Fund in such transaction),their incentives are expected to diverge from those of investors who elect to sell their interests.Similarly, there are potential conflicts of interest among the selling Fund, the Firm, the relevant General Partner and any buyer group relating to the valuation and consideration offered for thesubject investment(s).To the extentthe Firmrequires existinginvestorsand/or new buyers to commit capital to a continuation fund or another Fund managed by the Firm in addition to the purchase amount paid in a transaction (including commitments to the relevant Fund in specified ratios to the purchase price), such requirement is expected to have a dilutive effect on the purchase price for the selling Fund and itsinvestors. In circumstances wherethe Firm or an affiliate willbe the buyer or part of the buyer group, it will have incentiveto encourage, enable or facilitate such transaction and transact at a lower price than it would absent such conflicts of

interest. There can be no assurance that any transaction will accurately reflect the fair market value of the investment(s) being sold. Further, the relevant General Partner is expected to be incentivized, including through the possibility of receiving additional compensation, to make investments in portfolio companies with the view of holding such investments for longer periods of time or to make investments that it would not otherwise have made if the possibility of liquidity through a secondary transaction did not exist. Wh ere co-investors are invested in an investment subject to such a transaction, there can be no assurance that they will receive the same liquidity or other options as investors in the relevant Fund, and in such circumstancesa co-investor may be compelled to receive cash or continue to hold an interest in the relevant investment. In other circumstances, certaininvestors may not be permitted to continue to maintain exposure to the asset(s) due to a lack of eligibility to invest in a continuation vehicle under relevant securities, tax or other considerations. Although relevant potential conflicts of interestwould be disclosed to investors and/or the relevant advisory committee, if applicable, prior to the closing of the transaction, there can be no assurance thatthe Firm would successfully identify all conflicts of interest or resolve or mitigate all such conflicts of interest in favor ofthe Fund or any individual investor or group of investors. However, the Firm reserves the right, in its sole discretion, to determine to engage in such transactions, subject to any approvals required in the relevant Fund governing documents. The Firm is permitted to seek the consent of the relevant Fund advisory committee(s), to the extent applicable, to approve conflicts associated with such transactions and accordingly not allinvestorsmay necessarily be able to approve or disapprove of such transactions. Similar to any prospective sale or disposition of Fund investments, to the extent such transactions are not consummated, the relevant Fund is expected to bear all of the related costs in the absence of an agreement with other parties to bear a portion of such costs.

Public Health Emergencies. Pandemics and other widespread public health emergencies, have resulted in significant market disruptions, and future such emergencies have the potential to materially and adversely impact economic production and activity in ways that are impossible to predict, all of which may result in significant losses to the Funds. The ultimate impact of any such health emergency— and any resulting decline in economic and commercial activity— on global economic conditions, and on the operations, financial condition and performance of any particular industry or business, is impossib le to predict, but could have a significant adverse impact and result in significant losses to the Funds. The extent of the impact on the Funds’ and their portfolio companies’ operational and financial performance will depend on many factors, all of whichare highly uncertain and cannot be predicted, and this impact may include significant reductions in revenue and growth, unexpected operational losses and liabilities, impairments to credit quality and reductions in the availability of capital. These same factors may limit the ability of the Funds to source, diligence and execute new investments and to manage, finance and exit investments in the future, and governmental mitigation actions may constrain or alter existing financial, legal and regulatory framew orks in ways that are adverse to the investment strategy the Funds intend to pursue, all of which could adversely affect the Funds’ ability to fulfill their investment objectives. They may also impair the ability of portfolio companies or their counterpart ies to perform their respective obligations under debt instruments and other commercial agreements (including their ability to pay obligations as they become due), potentially leading to defaults with uncertain consequences. In addition, the operations of the Funds, their portfolio companiesand the Firm may be significantly impacted,

or even temporarily or permanently halted, as a result of any such health emergencies, or any measures, restrictions, remote -working requirements and other factors related thereto, including its potential adverse impact on the health of any such entity’s p ersonnel. These measures may also hinder such entities’ ability to conduct their affairs and activities as they normally would, including by impairing usual communication channels and methods, hampering the performance of administrative functions such as p rocessing payments and invoices, and diminishing their ability to make accurate and timely projections of financial performance.

InternationalConflicts. Wars and other international conflicts, such as the conflict in the Middle East and the ongoing military conflict between Russia and Ukraine have caused disruption to global financial systems, trade and transport, among other things. In response, multiple countries have put in place sanctions and other severe restrictions or prohibitions on certain of the countries involved, as well as related individuals and businesses. However, the ultimate impact of these conflicts and their effect on global economic and commercial activity and conditions, and on the operations, financial condition and performance of the Funds or any particular industry, business or investee country and the duration and severity of those effects, is impossible to predict. These conflicts may have a significant adverse impact and result in significant losses to the Funds. This impact may include reductions in revenue and growth, unexpected operational losses and liabilities and reductions in the availability of capital. It may also limit the ability of a Fund to source, diligence and execute new investments and to manage, finance and exit investments in the future. Developing and further governmental actions (military or otherwise) may cause additional disruption and constrain or alter existing financial, legal and regulatory frameworks and systems in ways that are adverse to the investment strategy which any Fund in tends to pursue, all of which could adversely affect the Fund’s ability to fulfill its investment objectives.

Risks Applicable to the Private Design Strategy and Healthcare Innovations Strategy :

Nature of Early Stage Investments . While early stage investments offer the opportunity for significant gains, such investments also involve a high degree of business and financial risk that can result in substantial losses. The Innovations Funds emphasize investment in companies in their early stage of development or with little or no operating history , and a Private Design Fund will also have meaningful exposure to such companies . Many of these companies will operate at a loss (or with no operating revenue), or with substantial variations in operating results from period to period. In addition, many of these companies will need substantial additional capital to support additional research and development activities, expansion or to achieve or maintain a competitive position. These companies may require multiple rounds of financing , and the amount of additional financing, whether from the Fund(s) or other investors or third parties, is typically intended to provide them with enough capital to reach their next major milestone. If the funds provided are not sufficient, these companies mayneed to raise additional capital at a price unfavorable to existing investors, including the Fund(s).The Fund(s) may make additional investments in order to preservetheir proportionate ownership when a subsequent financing is planned, or to protect their investment when such companies’ performance does not meet

expectations. If additional capital is needed by such companies, it may not be available on reasonable terms, or at all, which could adverselyimpact the investment by the Fund(s). Such companies may face intense competition, including from companies with greater financial resources, more extensive development, manufacturing, marketing and service capabilities and a larger number of qualified managerial and technical personnel. Furth ermore, the task of investing in early stage companies developing technology involves additional risk, including , without limitation: failure to develop or perfect the technology as planned; obsolescence; patent infringement and similar claims that prevent technology from being used or license d; and lack of market acceptance of the technology. Often the success ofsuch an investment will dependnot only on the efforts of the Firm, but also upon actions of other key individuals or extraneous factors, including political or economic developmentsover which the Firm or Funds have little or no control. Manyearly stageinvestments are heavilydependent on support providedby 3DC. There is a high failure rate of early stage companies, particularly early stage companies focusing on research and development, and anysuch investment made bya Fund may prove worthless. There is a risk that investors could lose some or all of their money.

Deal Sourcing – Research Collaborations . In addition to the Firm’s traditional sourcing mechanisms, the Firm believes that a differentiating feature forInnovations Funds and certain Private Design Funds is access to a significant number of very early stage investment opportunities arising out of joint research and development arrangements (“ Research Collaborations”) between (1) certain universities, other non -profit research institutions, and healthcare industry partners (“Research Partners”) and (2) a Fund and other investment vehicles managed by the Firm. It is anticipated that the Research Collaborations will give rise to the opportunity to invest into multiple separate research projects (each, a “ Collaboration Project”) over a number of years. Investments made a byFund in connection with Research Collaborations and Collaboration Projects will result in risks and conflicts of interest described more fully in “Certain Conflicts of Interest in Providing Services to Funds – Joint Research and Development Arrangements” in Item 10 below.

Subscription Lines and Fund Level Borrowing . An Innovations Fund or Private Design Fund generally is permitted to enter into a subscription line or other type of borrowing facility with one or more lenders in order to finance its operations including the acquisition , financing or refinancing of the Fund’s investments, as well as to consolidate or make less frequent capital calls to investors. Fund-level borrowing subjects investors to certain risks and costs. For example, because amounts borrowed under a subscription line or other borrowing facility typically are secured by pledges of the relevant General Partner’s right to call capital from investors, investors may be obligated to contribute capital on an accelerated basis ifa Fund fails to repay the amounts borrowed under a subscription line or other borrowing facility or experiences an event of default thereunder. Moreover, any investor claim against a Fund would likely be subordinate toa Fund’s obligations to a subscription line’sor other borrowing facility’s creditors. In addition, Fund-level borrowing will result in additional Fund expenses that will be borne by investors. These expenses typically include interest on the amounts borrowed, unused commitment fees on the committed but unfunded portion of a subscription lineor borrowing facility, an upfront fee for establishing a subscription line or borrowing facility, and other one47

time and recurring fees and/or expenses, as well as legal fees (including the lender’s legal fees) relating to the establishment, structuring and negotiation of the terms of the borrowing facility, as well as expenses relating to themaintaining, renegotiating or terminating the facility. Because a subscription line’s or other borrowing facility’s interest rate is based in part on the creditworthiness of investors and the terms of a Fund’s governing documents, it may be higher than the interest rate an investor could obtain individually. To the extent a particularinvestor’s cost of capital is lower than a Fund’s cost of borrowing, Fund -level borrowing can negatively impact an investor’s overall individual financial returns even if it increases a Fund’s reported net returns in certain methods of calculation. Conflicts of interest have the potential to arise in that the use of Fund-level borrowing typically delays the need forinvestors to make contributionsto a Fund, or results in short -term gains to a Fund, which in certain circumstances enhances a Fund’s return calculations and thereby may be deemed to benefit the marketing efforts of the Firm and its affiliates. A portfolio company financing from a subscription lineor other borrowing facility, rather than from a Fund -level equity commitment, has the potential to increase such returns, particularly in instances where the relevant amount has been drawn for an extended period of time.In other circumstances the use of Fund-level borrowing can increase the base of a Fund’s managementfee calculation, such as during periods wheremanagementfees are based in whole or in part on an acquisition cost that includes a borrowing component. Because management fees are incurred whether an investment is financed through capital calls or borrowings, the relevant General Partne r has an incentive to cause the Fund to make investments and/or pay suchamounts using a subscription lineor other borrowing facilityrather than making capital calls.Conflicts of interest also have the potential to arise to the extent that a subscription line or other borrowing facility is used to make an investment that is later sold in part to co-investors (including one or more co-investing Funds), to the extent co-investors are not required to act as guarantors under the relevant facility or pay related costs or expenses, since co-investors nevertheless stand to receive the benefit of the use of the subscription line or other borrowing facility and neither a Fund nor investors generally will be compensated for providing the relevant guarantee(s) or being subject to the related costs, expenses and/or liabilities. A credit agreement or borrowing facility frequently will contain other terms that restrict the activities of a Fund and its investors or impose additional obligations on them. For example, certain lenders or facilities are expected to impose restrictions on the relevant General Partner’s ability to consent to the transfer of an investor’s interest in a Fund or impose concentration or other limits on a Fund’s investments, and/or financial or other covenants, which could affect the implementation of a Fund’s investment strategy. In addition, in order to secure a subscription line or other borrowing facility , the relevant General Partner may request certain financial information and other documentation from investors to share with lenders. The relevant General Partner will have significant discretion in negotiating the terms of any subscription line and may agree to terms that are not the most favorable to one or moreinvestors. Fund-level borrowing involves a number of additional risks. For example, drawing down on a subscription line or other borrowing facility allows a General Partner to fund investments and pay Fund expenses without calling capital, potentially for extended periods of time. Calling a large amount of capital at once to repay the then-current amount outstanding under a subscription line or other borrowing facility could cause short -term liquidity concerns for investors that

would not arise had the relevant General Partner called smaller amounts of capital incrementally over time as needed bya Fund. This risk would be heightened for na investor with commitments to other investment funds that employ similar borrowing strategies or with respect to other leveraged assets in its portfolio; a single market event could trigger simultaneous capital calls, requiring the investor to meet the accumulated, larger capital calls at the same time.A General Partner is authorized touse Fund-level borrowing to pay management fees and to reimburse the Firm and its affiliates for expenses incurred on behalf of a Fund.In certain cases and subject to the applicable limitationsin a Fund’s governing documents, a Fund may guarantee borrowings, including on a joint and several basis with other Funds. While this can enableborrowing of higher amounts and/or on better terms than if theFund did not provide a guarantee, theFund will be financially responsible if a borrower defaults on its debt obligation. The Fund may also be independently liable for thefull amount of a guaranteed indebtedness if another Fund with which it is jointly and severally liable is unableto satisfy its portion of the guarantee. Such guarantees could result in additional losses for the Fund and could cause the Fund to reserve cash to support such guarantees that it might otherwise use for different purposes .. In certain cases and subject to the applicable limitations in a Fund’s governing documents, a Fund may guarantee borrowings by portfolio companies, including on a joint and several basis with other Funds. While this can enable a portfolio company to borrow higher amounts and/or on better terms than if theFund did not provide a guarantee, theFund will be financially responsible if a portfolio company defaults on its debt obligation. The Fund may also be independently liable for the full amount of a guaranteed indebtedness if another Fund with which it is jointly and severally liable is unableto satisfy its portion of the guarantee. Such guarantees could result in additional losses for the Fund with respect to such portfolio companies and could cause the Fund to reserve cash to support such guarantees that it might otherwise use for different purposes. Accordingly, any event that adversely affects the value of an investment by the Fund may be magnified to the extent that aportfolio company in which the Fund invests is leveraged. A Fund may also enter into letters of credit in support of one or more of its investments, including for the purpose of such Fund agreeing to fund additional equity financing or capital expenditures into a portfolio company (regardless of who the beneficiary to such r lette of credit may be) at a certain time or upon the occurrence of a certain event. Although in many cases the governing documents impose limits on borrowings at the Fund level, portfolio investments and intermediate entities generally do not have such limitson their ability to engage in borrowings or incur leverage with respect to all or a portion of the relevant investments. The foregoing risks are also applicable tothe Public Securities Strategy.

Valuation of Early Stage Healthcare Companies or Investments . Generally, there will be no readily available market for a substantial portion of a n Innovations Fund’s or Private Design Fund’s investments and, therefore, most of such portfolio investments will be difficult to value. The valuation of certain earlystage health care companiesor investments, including those pursuing regulatory approvals required for commercialization, are often less predictable than later -stage companies or companies in other sectors. Valuations of earlystage investments or companies invested in by a Private Design Fu nd or an Innovations Fund might not be as reliable as valuations of later-stage companies with more observable valuation inputs or readily available market pricing. For assets valued based on the most recent financing round or at cost , the Firm may continue to utilize such recent financing roundor cost for extended periods, which may exceed

twelve months, where the Firm believes it is appropriate . Moreover, certain financial and scientific challenges specific to early stage health care companies, such as the inherent uncertainty in the evaluation of the cost, risk and time of research and development, the outcomes of clinical trials, receipt of regulatory approvals and achievement of key milestones, could further adversely affect the reliability of the Firm’s or the applicable General Partner’s valuations of these investments.

Need for Follow On Investments . Following an initial investment in a given portfolio company, the Firm anticipates that a Fund will be called upon frequently to provide additional funds to such portfolio company or will have the opportunity to increase its investment in such portfolio company. Although the Firm may use capital commitments to make follow -on investments, there is no assurance that the Fund and its co -investors, if any, will provide all necessary follow-on capital. Accordingly, third-party sources of financing may be required, bu t there is no assurance that such additional sources of financing will be available, or, if available, will be on terms favorable to the Fund. Furthermore, the Fund’s capital is limited and may not be adequate to protect the Fund from dilution resulting fr om multiple rounds of financings of portfolio companies. If the Fund does not have capital available to participate in subsequent rounds of financing, failure to participate may have a significant negative impact on the portfolio company (including an event of default under applicable debt documents ) and the Fund. Additionally, such failure to make such investments may result in a lost opportunity for the Fund to increase its participation in a successful portfolio company or the dilution of the Fund’s ownership in a portfolio company if a third party invests in suchportfolio company.

Control Liability. In many cases,a Private Design Fund or an Innovations Fundwill, individually or collectively with other Funds, own a significant or controlling percentage of the equity of a portfolio company. Significant or controlling ownership and serving on the board of directors of portfolio company exposes a Fund’s representatives(including the Firm and its personnel), and ultimately the Fund, to potential liability because the Fund or its representatives may in certain cases be viewed asparticipating in the management of,influencing the conduct of, or controlling a portfolio company. Although portfolio companies often have insurance to protect directors and officers from such liability, such insurance may not be obtained by allportfolio companies in which a Private Design Fund or an Innovations Fund may have a significant or controlling interest and may be insufficient to cover the cost of liability if obtained. The possibility of successful claims cannot be eliminated, and such events may have a significant adverse effect on a Fund.

Real Estate Investments. Certain Private Design Funds and Innovations Funds may invest in real estate associated with healthcare related companies and, therefore, may be subject to risks associated with the direct ownership of real estate, such as local real estate conditions,operating problems arising out of the absence of certain construction materials, changes in supply of, or demand for, competing properties in an area , the financial condition of tenants, buyers and sellers of properties, changes in availability and cost of debt financing, changes in the tax, real estate, environmental and zoning laws and regulations,various uninsured or uninsurable risks, natural disaster, andthe ability to manage the real properties and/or obtain necessary occupancy or operating permits.

The foregoing risk factors do not purport to be a complete explanation of all of the risks involved in the Strategies utilized by the Firm. Additional risk factors are set forth in the Memorandum of each Fund. There can be no assurances that an investorwill achieve its investment objective or that the Strategies pursued and methods utilized by the Firm will be successful under all or any market conditions. Past performance is no guarantee of future performance , and market conditions may change .

On the same day, the SEC filed a complaint against one of those individuals, alleging that he recommended trading in shares of certain securities during 2012 on the basis of material nonpublic information, in violation of Section 10(b) of the Exchange Act and Rule10b-5 thereunder and Section 17(a)(1) of the Securities Act.The Firm was not named in either proceeding.In May2018, both individuals were convicted in the criminal proceeding on five counts of conversion of government property, conspiracy, wire fraud, and securities fraud. Both individuals were sentenced in September 2018 and appealed the verdict. A divided panel of the Court of Appeals for the Second Circuit affirmed the verdictin December 2019. The Court denied rehearingen banc in April 2020. In July 2020, the Court of Appeals for the Second Circuit granted the individuals’ motions to stay the mandate pending filing of petitions for a writ of certiorari in the Supreme Court.In January 2021, the Supreme Court granted the individuals’ petitions for a writ of certiorari, vacated the decision of the Court of Appeals for the Second Circuit , and remanded the case to the Court of Appeals for the Second Circuit for further consideration in light of the Supreme Court decision in Kelly v. United States. In December 2022, the Court of Appeals for the Second Circuit vacated the convictions of the two individuals formerly associated with the Firm and remanded the case to the District Court for the dismissal of all counts against them except for one conspiracy count, which it remanded to the District Court for further proceedings. In October 2023, pursuant to the terms of a deferred prosecution agreement with each individual, the one remaining charge was dismissed. In November 2023, the SEC dismissed the complaint it had filed. The individuals are no longer with the Firm. In August 2017, the Firm voluntarily agreed to settle an SEC administrative proceeding relating to alleged violations of Section 204A of the Advisers Act, without admitting or denying the SEC’s allegations, pursuant to an order under Section 203(e) and 203(k) of the Advisers Act (the “Order”). The Order resolved the SEC’s allegations that the Firm, from 2012 through 2014, failed to establish, maintain, and enforce policies and procedures reasonably designed to prevent the misuse of material, nonpublic information, particularly taking into consideration the nature of the Firm’s business. The Order alleged that, as part of the Firm’s research in the healthcare sector, the Firm engaged third party consultants and research firms, including firms that specialized in providing “political intelligence” regarding upcoming regulatory and legislative decisions, that Firm personnel based trading recommendations on such information, and that hedge funds advised by the Firm then made those trades.Based on the foregoing conduct, the SEC alleged that the Firm violated Section 204A of the Advisers Act, which requires investment adviser s to establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of the

investment adviser’s business, to prevent the misuse of material, nonpublic information by such investment adviser or any person associated with such investment adviser. The Order required the Firm to cease and desist from committing or causing any violations and any future violations of Section 204A of the Advisers Act, censured the Firm and provided that the Firm pay disgorgement of $714,110, prejudgment interest of $97,585 and a civil money penalty of $3,946,267.Additional details regarding the settlement can be found in the Firm’s Form ADV Part 1A, which can be accessed through the Investment Adviser Public Disclosure website at https://adviserinfo.sec.gov .

Material Relationships or Arrangements with Industry Participants An affiliate of the Firm, 345 PAS Holding LLC, obtained financing from financial institutions in connection with its ongoing operation of and activities at the Cure. The Firm is a guarantor of certain obligations under the financingarrangement. Relationships with Other Investment Advisers The Firm is a related person of each General Partner. See Item 4. In addition, certain of the Firm’s supervised persons were principals of ABV, LLC (“ABV”), which acts as general partner to private funds (“ABV Private Funds”) and receives performance-based compensation from such ABV Private Funds. The investment period for the ABV Private Funds has expired, and ABV does not expect to receive additional capital for new investment funds. Certain of the Funds are currently invested in the ABV Private Funds. The supervised persons have an incentive to recommend that such Funds invest additional capital, or that other Funds invest their capital, in the ABV Private Funds or ABV portfolio companies, or that portfolio companies of the Funds acquire or enter into financial transactions with ABV portfolio companies. Certain Funds have invested, and may in the future invest, in ABV portfolio companies and may purchase securities from ABV Funds through secondary transactions.These potential conflicts are mitigated, however, by the fact that such supervised persons are not authorized to make final investment decisions for the Funds, and personnel of the Firm who have such authority donot receive any financial or

other benefits from ABV or the ABV Private Funds. Portfolio companies of the Funds may acquire or enter into financial transactions with ABV portfolio companies.This conflict is mitigated, however, by the fact that such supervised persons do not control portfolio companies of the Funds , and proposed transactions involving portfolio companies of Fundsand ABV portfolio companies involve independent personnel and/or are reviewed and approvedby personnel of the Firm who do not receive any financial or other benefits from ABV or the ABV Private Funds. The Firm does not recommend or select other investment advisers for its clients. Certain Conflicts of Interest in Providing Services toFunds The Firm recognizes that conflicts arise and endeavors to treat all clients fairly and equitably. Management of Multiple Funds. Certain inherent conflicts of interest arise from the fact that the Firm and its affiliatesprovide investment management services to more than oneFund, and the Funds have overlapping investment objectivesand strategies. The Firm and its affiliates are also generally permitted to establish and manage additional investment funds and accounts , which may have investment strategies that are similar to,different from, or overlap with, existing Funds. These activities may adversely affect the prices and availability of securities held by or potentially considered for one or more of the Funds. Certain affiliates of the Firmand the Deerfield Foundationreceive an allocation of profits earned by each of the Funds. The General Partner of Deerfield Healthcare Innovations Fund, L.P., however, does not receive any portion of the profits earned by the Fund, as profits not allocated to investors are received by the Deerfield Foundation. The Firm will have an incentive to allocate investment opportunities to Funds in which the applicableGeneral Partneris likely toreceive an allocation of profits.Similarly, the Foundation and certain third parties are entitled to receive a portion of the performance -based fees received by theGeneral Partner from certain Funds. The Firm will have an incentive to allocate investment opportunities to Funds in which such third parties do not receive anallocation of profits. The Firm and its affiliates have an obligation to make investment decisions for the purpose of benefiting the Funds and not for purposes of benefiting the Firm, the General Partners or affiliated entities. To meet that obligation, the Firm has adopted allocation procedures designed to mitigate these conflicts of interest. See Item 11 below for additional information on the Firm’s allocation policies. Conflicting Interests in respect of Portfolio Companies in which the Funds Invest.A Fund may invest in a portfolio company in which another Fund may simultaneously investor has already invested. In such case, such Funds may hold interests in different classes of securities in the portfolio company’s capital structure. Accordingly, such Funds may have conflicting interests and investment objectives, including with respect to the value of the investment (e.g., for purposes of the issuance of new securities ), the targeted returns from the investment, the timeframe for disposing of the investment, and the manner in which to pursue a return on the investment if the portfolio company becomes distressed and is unable to satisfy its obligations to all of its investors. In addition, the Firm may cause a portfolio company or Collaboration Project in which a Fund is invested to be combined with a portfolio company or Collaboration Project in which another Fund is invested. The combination may ultimately result in economics or returns that are different, and possibly less favorable, than if the combination had not occurred. In other circumstances, during the period that a portfolio company is owned by a Fund, such portfolio company could become a suitable investment for one or more other Fundsdue to size, revenue, earnings, change in business focus or

other characteristics. In certain circumstances, the approval of a Fund advisory committee may be required. In the case of a Fund that does not have an advisory committee pursuant to its governing documents, the Firm may consult the Firm’s Advisory Board, which currently consists of investor representatives from one or more of the Funds, regarding a conflict. A Fund may also invest in or sponsor a SPAC that identifies a portfolio company of another Fund as a potential target for an initial business combination. A conflict of interest existsin that the Firmmay be incentivized to cause the SPAC to target and/orconsummate a business combination with a portfolio company ofanother Fund. This conflict is mitigated by the fact that the Firm is generally not in a position to influence or participate in the activities of a SPAC in which a Fund is invested unless the Fund is also the SPAC sponsor, and with respect to a SPAC for which the Fund is a SPAC sponsor, the SPAC officers and directors owe certain duties to SPAC investors. A conflict of interest also exists in that the Firm may be incentivized to cause a portfolio company of a Fund to consummate a business combination with a SPAC in which another Fund has an investment or sponsorship. This potential conflict is mitigated by the fact that the Firm is generally not in a position to influencebusiness combinationdecisions of a SPAC in which a Fund is invested unless the Fund is also the SPAC sponsor , and with respect to a SPAC for which the Fund is a SPAC sponsor, the Firm’s personnel serving on theportfolio company’s board owe duties to other shareholders of the portfolio company. Joint Research and Development Arrangements. The Innovation Funds and certain Private Design Funds have entered into Research Collaborations. Although the terms of each Research Collaboration are negotiated and can vary, each Research Collaboration typically provides for (a) payments to the Research Partner for research relating to Collaboration Projects, (b) access to information regarding the Research Partner’s scientific research and/or background intellectual property owned or controlled by the Research Partner, (c) the grant by the Research Partner to a Fund or an entity owned by one or more Funds that is formed in relation to a Research Collaboration for the primary purposeof conducting early stage research and development(a “Collaboration Company”) of certain options, licenses, preferential rights of negotiation or first refusal or similar rights or benefits with respect to background intellectual property, research results and intellectual property relating to Collaboration Projects, and (d) potent ial investment by a Fund or Collaboration Company in one or more Collaboration Projects or companies formed to further develop products and technologies resulting from Collaboration Projects (each, a “ Research Company”). Multiple Funds may invest in a Collaboration Company that undertakes multiple Collaboration Projects, and any given Collaboration Project may be invested in by both a Fund and one or more o ther Funds; however, each Collaboration Project is treated as a separate investment, sohe t investments of the Fund and toher Funds in a given Collaboration P roject may not be proportionate to the investment of such entities in the Collaboration Company. Expenses and liabilities associated with aCollaboration Project will be apportioned to a Fund and other Funds invested in that particularCollaboration Project; however, there is no guarantee that liabilities associated with a Collaboration Project will be limited to the investors participating in such Collaboration Project. Overhead and general expenses of a Collaboration Company that cannot be precisely attributed to a given Collaboration Project may be allocated to a Fund and other Funds invested in the Collaboration Company in a manner determined by the Firm to be fair and reasonable. At any time, a Collaboration Company may contribute the assets of a Collaboration Project to a Research Company, and it is expected that, subject to available capital, remaining fund life, investment concentration and other ors fact that the Firm may consider, a Fund and other Funds that invest in a Collaboration Project will also invest in the Research Company to which such research project may be contributed, and subject to such considerations Funds that did not invest in the Collaboration Project may invest in the Research Company. As a result, Funds that did not originally invest in a Collaboration Project may in the future benefit, directly

or indirectly, from Collaboration Projects funded by a Fund, and a Fund may benefit from Collaboration Projects, and resulting ResearchCompanies, initially funded by toher Funds. It is also expected that Research Companies (related to the same or different Research Partners) will often be engaged in the development of related products and technologies, may collaborate extensively with each other, may rely on some of the same person nel (especially academic and research personnel within the same Research Partner, where applicable), may share ideas and other information, including proprietary information, may enter into licensing, joint development or other commercial transactions with each other, and otherwise may engage in a wide range of joint or related activities. Accordingly, it is likely that certain Collaboration Companies and Research Companies in which a Fund is not an investor will benefit from certain activities of Collaboration Companies and Research Companies in which a Fund is an investor, and under Research Collaborations to whicha Fund is a party, and that certain Collaboration Companies and Research Companies in whicha Fund is an investor will benefit from certain activities of Collaboration Companies and Research Companies in whicha Fund is not an investor, and under Research Collaborations to whicha Fund is not a party. The Firm believes that this environment of cooperation and joint development activities involving multiple Research Partners will benefit all of the Collaboration Companies and Research Companies, and indirectly the Funds, by creating an environment that will foster an enriched research environment and serve as an incubator for the development and commercialization of new products and technologies, and that any costs, in terms of the potential benefits provided to Funds and their portfolio investments (which will be inherently difficult to quantify), will be offset in whole or in part by the potential benefits provided to each Fund and its portfolio companies. A Research Partner that is a party to a Research Collaboration, or one or more of its affiliates, may be a current or prospective investor in the Fund or have another relationship with theFirm or its affiliates, such as leasing space from 345 PAS Holding LLC at the Cure building. A Research Partner that is a party to a Research Collaboration could also become involved in one or more transactions with a Fund, or with a portfolio company of a Fund. The Firm and its affiliates have an incentive to cause a Fund to enter into a Research Collaboration in order to encourage or maintain an investment by the Research Partner or its affiliates insuch Fund or other Funds or in other transactions involving the Research Partner.In connection with a Research Partner’s residency at the Cure, the Firm has incentive to cause the Funds to invest in Collaboration Projectsgenerated through such Research Partner in order to receive certain financial benefits relating to ownership of the Cure by an affiliate of the Firm. This conflict is mitigated by the rigorousdiligence process that potential research projects undergo and the consensus-driven approach to investing in and advancing such potential research projects. In many instances, a Research Collaboration will entitle investment vehicles managed or advised by the Firm to invest up to a pre -determined amount into any Research Company arising as a result of such Research Collaboration at a pre-determined pre-money valuation. Such pre-determined pre-money valuation may not equal the then fair market valuation of such e Rsearch Company. To the extent other Funds have invested in a Research Company prior to a Fund, such Fund (and any other Funds) may be harmed or benefited, as a result of such arrangement. Similarly, to the extent Funds invest into a Research Company aftera Fund has invested, such Fund (and such other Funds) similarly may be harmed or benefited, depending on whether the actual fair market value of such Research Company is more or less than the pre -determined pre-money valuation. Although theFirm may take steps to ameliorate this harm or benefit, it is not obligated to do so.

The Firm and its affiliates, Collaboration Companies and/or Research Companies will employ personnel with scientific and technical skills to assist in the evaluation of research and development proposals received from Research Partners and theirpersonnel. It is anticipated that these personnel may cooperate closely with each other and make relevant expertise available on a regular ongoing basis. Accordingly, certain Collaboration Companies and Research Companies in which a Fund is not an investor may benefit from certain activities and expertise of personnel of Collaboration Companies and Research Companies in which a Fund is an investor, and vice versa. The Firm or its affiliates will also receive benefits from personnel of Collaboration Companies and Research Companies in the form of information, ideas, consulting or other services, which benefits, subject to any applicable confidentiality agreements, may be used by theFirm or its affiliates for their own purposes or shared by the Firm or its affiliates with or for the benefit of other Funds or other Collaboration Companies and Research Companies, including other Collaboration Companies and Research Companies in whicha Fund is not an investor. Although theFirm may impose intercompany fees and expense reimbursement arrangements that it considers reasonable under the circumstances in connection with any of the activities and arrangements described in this paragraph and the preceding paragraphs, the Firm makes no representation that such reimbursement arrangements will be entered into or that intercompany fee and expense reimbursement arrangements will be appropriate, reasonable or sufficient for any purpose. Operating Partners. The Firm has retained, andexpects to retain, for the benefit ofthe Innovations Funds and Private Design Funds and/or their portfolio c ompanies, as applicable, “operating partners”, “venture partners”, “entrepreneurs -in-residence”, “strategic partners”, “executive partners”, “senior advisors” or other similar consultants of the Fund or its affiliates (collectively, “ Operating Partners”). Operating Partners may regularly provide services to one or more portfolio c ompanies in relation to the identification, acquisition, holding,management,improvement and disposition of suchportfolio companies, including operational aspects of such companies. Certain Operating Partners may also provide services to, or in connection with,one or more Funds in relation to their activities. Pursuant to a Fund’s governing documents, fees and expenses associated with the services provided by Operating Partners (collectively “Operating Partner Fees and Expenses”) may be paid and/or reimbursed by applicable portfolio companies and/or, in many instances,the applicable Funds, and Operating Partner Fees and Expenses do not offset the management fee. In certain cases, including where a Fund does not own a controlling interest in a portfolio company, the portfolio company, its management and/or equity holders potentially will not agree to engage and/or bear the costs of Operating Partners. In such cases, where the relevant General Partner believes theservices of the Operating Partners will benefit a portfolio company, it may cause the Fund to bear such costs directly, resulting in the Fund bearing a disproportionate share of those costs vis-à-vis other equity holders of a portfolio company,notwithstanding that other equity holders in that portfolio company will receive the benefit of any returns that result fromOperating Partners services. Operating Partner Fees and Expenses may include, without limitation, cash fees, profits or equity interests in a portfolio c ompany, a share of proceeds upon sale of a portfolio company and/or other compensation, including incentive-based compensation, to the Operating Partner. Operating Partner Fees and Expenses may be determined according to one or more methods, including, without limitation, the value of the time (including an a llocation for overhead and other fixed costs) of the Operating Partner, a percentage, or percentage of the value, of the portfolio company, the invested capital exposed to such portfolio company, amounts charged by other providers for comparable services and/or a percentage of cash flows from such company. Additionally, portfolio companies may provide opportunities for Operating Partners to invest in such portfolio c ompanies and reimburse costs and expenses incurred by Operating Partners. Operating Partners also may receive remuneration from theFirm and/ora Fund or affiliates and/or be entitled to other

forms of compensation. Such investment opportunities, reimbursements and other compensation paid to an Operating Partner, including Operating Partner fees and expenses, will not offset the management f ee. Operating Partners may have a limited partnership or profit interest in a Fund, a General Partner, one or more other investment funds sponsored by such General Partner or in an affiliate ofsuch General Partner. Although the Firm intends to retain Operating Par tners with a view to enhancing portfolio c ompany performance, a number of factors may result in limited or no benefit. In addition, the Firm intends to retain only such Operating Partners which it believes provide a level of service consistent with other relevant market alternatives. However, there can be no assurance that no other service provider is more qualified to provide the applicable services or could provide such services at lesser cost. It is also expected that employees of theFirm, 3DC and/or their respective affiliateswill take on temporary, interim or permanent roles and positions at portfolio companies, and will receive remuneration (whether in the form of cash, securities or otherwise) for service in such roles and positions. Subject to advisory committee consent rights underapplicableFund governing documents, where applicable,any such employee (or former employee) designated as an Operating Partner, may (subject to agreement with theFirm or its affiliates) retain all remuneration paid by the applicable portfolio c ompany to such Operating Partner in exchange for serving in the applicable role or position at such portfolio c ompany, and no portion of such remuneration will constitute Fees Subject to Offset, and the management fee rate of the investors will not be reduced by the amount of such remuneration (in each instance, regardless of whether such Operating Partner continues to receive remuneration directly from, or later returns, to the Firm, 3DC or their respective affiliates on a full-time (or part-time) basis, and with respect to any securities received by such employee, regardless of the date on which such securities are vested,exchanged, exercised, converted, sold or otherwise monetized, which, for the sake of clarity, may occur on a date on or after an Operating Partner returns to the Firm, 3DC or their respective affiliates on a full -time (or part -time) basis). For the avoidance of d oubt, remuneration paid by any portfolio company attributable to an Operating Partner, in his or her capacity as such, will not be treated as normal administrative and overhead expenses ofa General Partner and/or the Firm. Additionally,subject to advisory committee consent rights under Fund governing documents, if any, if the applicable role or position assumed by suchemployee (or former employee) is “permanent”, then such employee (or former employee) shall be deemed an Operati ng Partner with respect to all portfolio companies such person serves for so long as such treatment is applicable. 3DC and Genscience. The Firm has created 3DC and Genscience, and may create additional entities, to provide access to Discovery Specialists who may or may not be employees of theFirm, 3DC, Genscience or their affiliates. 3DC and Genscience are affiliates of the Firm. 3DC and Genscience are engaged by prospective or actual portfolio c ompanies of the Funds to facilitate the incubation, development and/or operations of certain portfolio c ompanies by providing access to certain goods, facilities, intellectual property and services (directly and indirectly through contracts with third parties), as well as access to Discovery Specialists. Such services may include, without limitation, the fol lowing: access to laboratory (including wet laboratory), office and meeting space; office support and administrative services, including communications systems, website development, internet connections, human resources and recruiting services (including recruiting of Discovery Specialists) and bookkeeping and accounting services; drug and device development and discovery, including software and services (such as computational chemistry, computational biology, genomics, genetics analytics , and electronic laboratory notebooks), genomic sequencing facilities and services, molecular imaging services, scheduling, planning, logistics, and project management services, proprietary animal models, chemical compound libraries, tissue banks, virtual and tangible compound libraries and tissue samples, assays, laboratory hardware, reagents and data, databases,

information, research and other libraries including genomic and phenotypic data and related data and information services; artificial intelligence, biomarker development, machine learning and data analysis; software, platform or portal and related infrastr ucture for research project evaluation and execution, academic and industry outreach, and business development in relation to portfolio companies and Research Collaborations, including development and maintenance thereof; three dimensional printing (such as for medical devices and therapeutics); services useful for the performance of drug and device development, including medicinal chemistry, assay development, data storage, compound handling, toxicology, product and manufacturing engineering, manufacturing and project management; other goods, facilities, intellectual property and services useful or necessary for the incubation, development and/or operations of start-up companies that engage in drug, device or diagnostics development and discovery, other medical research; and other items that will assist in the research, discovery and/or development, testing, regulatory approval process, manufacturing, licensing, business development and/or marketing and other operations ofor or the benefit of one or more portfolio companies or the creation or delivery of healthcare services.Such goods, facilities, intellectual property and services will be provided (i) by the Firm, 3DC, Genscienceor their affiliates (including by Discovery Specialists) and (ii) by way of contracts with third parties (as defined more specifically above, the “Third Party Services”), and will include a broad range of goods, facilities, services and intellectual property useful to one or more portfolio companies, that may be used by Firm, 3DC, Genscience or their affiliates in furtherance of providing services and in enabling the Discovery Specialists to pro vide services to the portfolio companies (and the Funds). While it is expected that access to facilities, goods, services and intellectual property via the Firm, 3DC, Genscience or their affiliateswill result in greater and more efficient access to discovery and medical research capabilities as well as i mproved economic terms for the portfolio companies, this could be incorrect, and the portfolio companies may have been able to obtain equivalent or better economic terms by not contracting with or through the Firm, 3DC or their affiliates. To the extent the Firm, 3DC, Genscience, the Funds, their affiliates and/or other portfolio companies avail themselves of facilities, goods, services and intellectual property provided by third parties via theFirm, 3DC, Genscience and/or their affiliates , they similarly may be able to obtain such improved economic terms. In addition, it is likely that certain portfolio companies will receive a disproportionate benefit as a result of contracting with or through the Firm, 3DC , Genscience and/ortheir affiliates and other portfolio companies of other Funds will ultimately not receive a benefit (for example, when 3DC initially contracts with a third party for a portfolio company, the costs may be greater than the costs when 3DC subsequently contracts for the same or similar goods or services for another (additional) portfolio company). Furthermore, while it is anticipated that any intellectual property developed by the Firm, 3DC, Genscience and their affiliates in respect of services con tracted for the benefit of any portfolio company will accrue to the benefit of such portfolio c ompany, it is expected that the Firm, 3DC and/or their affiliates will retain rights to use certain intellectual property, in particular intellectual property that the Firm characterizes (in its discretion) as “platform” intellectual property, including the ability to license such intellectual property, or otherwise provide services using such intellectual property, to other portfolio companies as well as to other third parties, including for profit. The portfolio companies that benefit from the services of 3DC and/or Genscience will either bear certain costs associated with such services (including the services of the Discovery Specialists) directly or be required to pay to the Firm, 3DC, Genscience and/oror their affiliates its share (as determined by theFirm, 3DC or their affiliates) of any costs incurred by the Firm, 3DC, Genscience and/or their affiliates on such portfolio companies’ behalf or otherwise apportioned to such portfolio companies. Except in limited circumstances as disclosed below, any such expenses will not be subject to the management fee offset of a

Fund. Additionally, as disclosed above, theFirm will need to apportion expenses associated with theFirm’s, 3DC’s, Genscience’sor their affiliates’services, including the Discovery Specialists, among the Funds and their portfolio companies. While any such expenses paid with respect to the Firm’s, 3DC’s, Genscience’s and/or their affiliates’services are expected to be reasonable, theFirm makes no representation that such expenses will be reasonable. In addition, theFirm will use a variety of methodologies in apportioning expenses among the Funds, their portfolio companies and, to the extent applicable, theFirm and its affiliates. While theFirm will apportion such expenses in a manner it believes to be fair and equitable, there wil l be situations where the portfolio companies and Funds bear more (or less) than their actual benefit. The Firm may cause a portfolio c ompany to make its “platform” intellectual propert y available to other portfolio companies, including the portfolio companies of other Funds,on economic terms that may, from the providing entity’s perspective, be less remunerative than the terms on which it makes such intellectual property available to other parties and could cause such providing entity to forego more profitable work. This may not be in the best interest of the portfolio company providing such “platform” intellectual property. 3DC has limited operating history and its ability to provide benefits to companies is not yet fully tested; anticipated benefits as a result of transactions between a Fund and its portfolio companies on the one hand, and the Firm, 3DC and/or their affiliateson the other hand, may not materialize. The Firm, 3DC, Genscience and their affiliates may provide goods, services, facilities and intellectual property to unaffiliated third parties, including those which may compete with the Firm, 3DC, Genscience, their affiliates, or portfolio companies, for profit.For example,Genscience makes goods, services and intellectual property available tounaffiliated third party customersfor profit. Discovery Specialists. 3DC, Genscience, the Firm and/or their affiliatesretain or will retain Discovery Specialists as employees or consultants to support the discovery activities (e.g., drug discovery, medical device discovery) and operations or o ther activities of one or more portfolio c ompanies of the Funds (including portfolio companies of multiple Funds ). Portfolio c ompanies will be charged for services performed by such Discovery Specialists, and the amounts charged will not exceed the “all-in” cost of such Discovery Specialists (e.g., including salaries, bonuses, benefits and expenses, office expenses (including an allocated portion of overhead and insurance)), office and equipment rental or acquisition expenses (e.g., computers, 3D printers and other equipment), entertainment expenses and travel expenses (including in relation to attending symposiums, presentations, lectures and specialized conferences). The Firm will apportion the fees associated with such services among the portfolio companies and the Funds on a basis that the Firm determines to be fair and equitable. While the amounts paid with respect to Discovery Specialists are expected to be reasonable, the Firm makes no representation that such amounts will be reasonable.Such amounts charged for services performed by Discovery Specialistswill not be offset against the management fee as described below. Fees and charges for services, facilities, intellectual property and personnel provided by the Firm or its affiliates, including Discovery Specialists,are often bespoke in nature and may not have direct third-party market benchmarks. As a result, the amounts paid by the Funds or their portfolio companies for such services and arrangements are determined by the Firm using its reasonable judgment whichmay be based on internal estimates of value and other factors rather than readily observable market rates.

Discovery Specialists and employees and consultants of theFirm, 3DC or Genscience, in addition to assisting portfolio companies, will provide assistance to theFirm, its affiliates and other entities, and such assistance will often be provided without charge. In addit ion, while portfolio c ompanies will generally enter into contracts for services provided by the Discovery Specialists , 3DC and Genscience, certain services will be provided either in the absence of contracts or without charge. Accordingly, theFirm, its affiliates and other entities will benefit from the provision of services by Discovery Specialists and employe es and consultants of 3DC and Genscience to portfolio companies , and other portfolio c ompanies of a Fund and portfolio companies of other Funds may benefit from such services. Allocation of Investment Opportunities. The Firm expects that investment opportunities that it determines are within the strategy ofa Fund may in certain circumstances be allocated to one or more other Funds, and that such investment opportunities that are allocated toa Fund will also be allocated to one or more other Funds. In particular, but not in limitation of the foregoing, it is generally expected that one or more Innovations Funds will co-invest alongside one or more Private Design Fundsin early stage investments made by Innovations Funds. Such allocations may be more advantageous toa Fund relative to one or all of the other Funds, or vice versa. Accordingly,a Fund may not invest in a particular opportunity, and a Fund may acquire less than the entire amount of an opportunity that is otherwise available to such Fund. When an investment is appropriate for more than one Fund, the Firm attempts to appropriately size and fairly allocate the opportunity among the applicable Funds. The appropriate sizing of a position in a giveninvestment will vary among Funds. Each Fund is equally entitled to participate in a new investment opportunity provided that the opportunity fits within the Fund’s strategy.A description of the Firm’s investment allocation approach is described in Item 11, below. There can be no assurance that the allocation of investment opportunities by the Firm will not give rise to conflicts of interest among a Fund, other Funds and their respective investors or that the terms on which the allocation is made will be as favorable as they would be if the conflicts of interest to which the Firm may be subject did not exist. In the event that the available amount of an investment opportunity in whichthe Funds will invest exceeds an amount appropriate forsuch Funds, such excess may also be offered to one or more potential investors. In addition, investors (or their affiliates) that are party to a Research Collaboration may be entitled to invest alongside the Fund in their capacity as a Research Partner party to a Research Collaboration, in investments by the Fund arising as a result of (or in connection with) such Research Collaboration. Furthermore, such investment by such investor (or its affiliate) is expected to reduce the total amount that the Fund may invest in the applicable investment opportunity. Fund Advisory Committees. Certain Funds have an advisory committee that consist s of representatives of certain investors in such Fund.Any approval or consent given by such advisory committee is generally binding on such Fund and all of its investors. Advisory committees are also generally authorized to give approvals or consents required under the Advisers Act, including under Section 206(3) thereof. Members of a Fundadvisory committee may themselves have conflicts of interest that do not disqualify them from voting or consenting to matters submitted for review to the advisory committee on which they serve. If a member has an interest adverse to the Fund,such member may not act in the best interest of the Fund. Members of one Fund’s advisory committee may, and currently do, sit on one or more other Fund advisory committees. Such overlap may create a conflict of interest for certain members, in which a member may have an incentive to favor a Fund in which it has a greater economic interest. While the Firm may adopt policies or procedures to address such conflicts in the future, it has not done so to date, and it may not be possible to eliminate such conflictscompletely.

Officers and Directors of Portfolio Companies. Firm personnel serve as officers or directors of, or acquire board observer or information rights with respect to, portfolio companiesin connection with Fund investments. In the event the Firm or a related person obtains material non -public information in such capacity with respect to any such companyor another companyor is subject to trading restrictions pursuant to the internal policies of such company, the Firm may be prohibited from engaging in transactions with respect to the securities of such company or another company, which may have an adverse effect on the Funds. In addition to any fiduciary duties Firm personnel owe to the Funds, Firm personnel owe fiduciary duties to the shareholders of the portfolio companies for which they serve as officers or directors. While officer and director positions are often important to a Fund’s investment strategy, especially the Private Design Strategy and Healthcare Innovations Strategy, such positions may have the effect of impairing the ability of all Funds, includingDeerfield Partners, L.P., to purchase or sell the related securities when, and upon the terms, they may otherwise desire. Because of the potential conflicting fiduciary duties that Firm personnel owe to a portfolio company, on the one hand, and to the Funds, on the other hand, such officer or director positions may place Firm personnel in a position where they must make a decision that is either not in the best interests of a Fund or not in the best interests of theshareholders of a portfolio company. Should Firm personnel make a decision that is not in the best interests of the shareholders of a portfolio company, such decision may subject the Firm and any applicable Fund to claims they would not otherwise be subject to as an investor, including claims of breach of the duty of loyalty, securities claims and otherofficer- or directorrelated claims. In general, the applicable Funds will indemnify the Firm and its personnel from such claims. Absence of Information Walls and the Restricted List. With the exception of a compliance wallfor the screening of certain confidentially marketed inv estment opportunities, the Firm has an integrated approach andotherwise currently operates without an information barrier or wall that other firms implement to separate those who make investment decisions from others who might possess material non -public information. Consequently, if personnel acquire material non-public information in respect of a portfolio company or prospective portfolio company, the Funds will likelynot be free to act upon any such information, and the possession of such informationwill likelypreclude the Funds from engaging in transactions thatthey might otherwise have undertaken.The Compliance department maintains a list of restricted securities as to which the Firm may have access to materialnon-public information and in which the Funds are not permitted to trade without prior approval from the Compliance department. The Firm also maintains a Code of Ethics, as described in Item 11, and provides training to personnel with respect to conflicts of interest and how such conflicts are resolved under the Firm’s policies and procedures. Limitations of Insurance Coverage. The Funds and certain affiliates of the Firm are covered under the Firm’s professional liability insurance policy and do not maintain separate professional liability insurance coverage. To the extent a claim arises during a policy period that erodes some or all of the limits under the Firm’s policy, there will be less coverage, or potentially no coverage, available for all of the insured Funds under the policy for the remainder of the policy period. Transactions between Portfolio Companies . Portfolio companies of one Fund and portfolio companies of the same or another Fund may engage in commercialor other transactions with one another, which transactions may be recommended and/or caused by the Firm. Such transactions may arise in the context, for example, where a portfolio company owned by one Fund is acquired by a portfolio company acquired by another Fund. In addition, certain “platform” intellectual property portfolio companies of one Fund will permit other portfolio companies of the same Fund or other Funds to license or otherwise use “platform” intellectual property, which may be at a discount price. Such price may be less remunerative to

the providing portfolio company than the terms on which it makes such intellectual property available to other parties, which could cause the providing portfolio company to forego more profitable work. However, it is expected that the providing portfolio company would not provide such goods, services or intellectual property if it is unprofitable to do so. It is expected that a portfolio company will use the goods, services or intellectual property of anotherportfolio company only if the same or equivalent quality are not available at lower prices from third parties, but the Firm, a Fund anda portfolio company may be conflicted in its choice. Development and Licensing of Technology . The Firm and its affiliates may develop proprietary software and other technologies (collectively,“Products") that may be sold, licensed, distributed or otherwise made available to portfolio companies of the Funds and to unaffiliated third parties, including entities that may compete with the Firm, its affiliates, or portfolio companies. The Firm and its affiliates may provide ancillary services relating to Products, such as implementation or managed services, and may also provide consulting services relating to software and technology products including in respect ofidentifying, vetting, and integrating technology products. Products may be developed using resources,infrastructure,expertise, data, or insights gained through work in connection with the operation of the Funds and/or portfolio companies. The Firm and its affiliates may generate revenue and profits from the , sale license or distribution of Products to third parties, and such revenue will not offset management fees payable by the Funds.The Firm may be incentivized to allocate resources toward the development of Products that can be commercialized to third parties rather than developing bespoke solutions exclusively for portfolio companies. Additionally, the Firm may have an incentive to c ause portfolio companies to use Products developed by the Firm or its affiliates even when comparable, superior or lower cost alternatives may be available from third parties. This conflict is mitigated by the fact that many purchases of such Products are at the sole discretion of portfolio company personnel. Allocation of Fees and Expenses; Incubation of Portfolio Companies. The Funds pay, subject to the governing documents of each Fund, all expenses related to their respective operations. In addition, the incubation, development and operations of certain portfolio companies of certain Funds are conducted through or supported by the Firm or 3DC, with such portfolio companies paying feesto the Firm or 3DC for goods, services, intellectual property and facilities,which fees are not treated as a reduction or offset to the relevant Fund’s management fee. A conflict of interest arises in the determination by the Firm whether certain expenses that are incurred within the operation of a Fund constitute operating expenses for which the Fund is responsible under the terms of its governing documents.Further, a conflict of interest arises in the determinationby the Firm, a Fund and a portfolio company that the portfolio company should incur fees owed to the Firm or 3DC for goods, services, intellectual property and facilities . A Fund will be reliant on the determinations of the Firm in this regard and in regard to the allocation of expenses generally, including between a Fund and any other affiliated Fund or entity. Certain goods and services will have utility for multiple Funds and portfolio companies and be used for a variety of purposes and are allocated fairly based on methodologies developed by the Firm . Certain portfolio companies lease and will lease office and /or laboratory space from an affiliate of the Firm. The leasing of space and the terms on which such space will be leased by portfolio companies will give rise to conflicts of interest, though the Firm expects to mitigate such conflicts by reducing management fees by any rent paid by portfolio companies controlled by the Firm that is in excess of “reasonable rent”.A conflict of interest arises in the determination by the Firm as to what constitutes reasonable rent, and aFund will be reliant on the determinations of the Firm in this regard. Funds and/or portfolio companies will reimburse the Firm for the all -in costs of employees and consultants who are Discovery Specialists. A conflict of interest arisesin determining which activities of suchDiscovery Specialists are traced and charged to specific actual or prospective portfolio companies as opposed to other non62

specified matters which do not lend themselves to tracing to a particular portfolio company (such as preliminary scientific diligence activities), and Funds and portfolio companies will be reliant on the Firm’s periodic time tracking and allocationmethodology procedures. A conflict of interest also arises to the extent such Discovery Specialists engage inactivities that benefit the Firm or its affiliates. To mitigate conflicts of interest, and as set forth in more particularity in the applicable governing Fund documents, the Firm has agreed with respect to certain of the Private Design Funds and Innovation Funds to a process to evaluate, and potentially make the Funds whole,if “Fees Subject to Review”(as defined below) exceed an agreed threshold with respect to each Fund and are not reasonable. “Fees Subject to Review” is generallydefined asany fees paid to theFirm, 3DC or their respectivesubsidiaries by any portfolio company (i) for the use or access to equipment owned by theFirm, 3DC or their respective subsidiaries, (ii) in respect of goods and services provided by theFirm, 3DC or their respective subsidiaries, (iii) in respect of intellectual property licensed from the Firm, 3DC or their respective subsidiaries and (i v) in respect of Discovery Specialists, whether in cash, stock, options, warrants or other forms of participation ; provided, however, that Fees Subject to Review excludes (a) any amounts paid in respect of third party services to the extent such amounts do not exceed amounts paid by the Firm, 3DC or their respective affiliates in respect of such services and (b) any payments of rent for access to facilities owned or leased by the Firm, 3DC or their respective affiliates. If Fees Subject to Review for certain Funds in a given year, when combined with the management fee payable tothe Firm by such Fund in such year, exceed 2% of capital commitments of such Fund, the Fees Subject to R eview will be subject to review by the Fund’s advisory committee. If the 2% threshold is exceeded, theadvisory committee may elect to (but is not required to) causethe Firm to engage an independent third party to review the Fees Subject to Review to determine (i) if all fees have been properly classified and (ii) whether the aggregate Fees Subject to Review in respect of such year are in excess of the amount such independent third party determines is reasonable in the aggregate. The portion of the Fees Subject to Review (on an aggregate basis) that are notreasonable, and that are attributable to the applicable Fund, will reduce the management fee for suchFund in subsequent quarters.For this purpose, Fees Subject to Review in any calendar year are deemed “reasonable” if in the aggregate all Fees Subject to Review for such calendar year do not exceed the sum of the cost that the third party determines that portfolio companies controlled by the Firm would have paid a third party on an arm’s length basis for substantially similar (and of the same quality) services, goods, facilities, and intellectual property that were provided in exchange for the Fees Subject to Review for such year. Written Off Investments. The governing documents provide theFirm with wide-ranging authority to make determinations, including those related to investment purchases and dispositions (and their timing), valuation and other matters that in each case have the potential to affect the Firm’s compensation. In making such determinations, theFirm is subject to potential conflicts of interest. For example, the potential to earn additional compensation creates an incentive for theFirm or its affiliates to make investments and to hold investments longer than otherwisemay be the case in the absence of the relevant Fund’smanagement fee and carried interest compensation arrangements. The Firm may be incentivized to cause a Fund to make, hold, value and/or dispose of investments , and/or to delay or forego a determination that the investments are written off as worthless,in order to receive greater ongoingmanagementfees and, potentially, earlier and/or larger carried interest distributions than would otherwise be the case. Where themanagementfee is calculated taking into account the valuation of an investment, the Firm will have an incentive to make determinations that result in the continued payment of, or a higher, management fee. Where the governing documents do not require management fees to be reduced in

connection with investment reorganizations, restructurings, roll-over investments, extraordinary dividends or similar transactions, the Firm is incentivized to pursue such transactions. Additionally, the amount of carried interest owed to the relevant General Partner is dependent in part on the amount and timing of investment dispositions, as well as in certain instances determinations that investments are written off as worthless, and theFirm expects to be subject to related potential conflicts of interest in determining whether and when to dispose of investments, make distributions, and/or determine that an investment is written off as worthless, within the requirements of the relevantgoverning documents. The Firm’s wide-ranging authority on the determination whether an investment is written off as worthless, and the criteria used by theFirm in valuing an investment, or determining whether an investment is written off as worthless, have the potential to be subjective, to be influenced by market information and other factors and to vary over time. There can be no assurance that a third party or investor would agree with the substance or timing of the relevant General Partner’s determination that an investment iswritten off as worthless, and except as set forth in thegoverning documents, the Firm is not obligated to follow any third-party methodology in making its determination on whether an investment meets the relevant standards or whether value can be recovered or retained during the Fund’s holding period. The Firm is entitled to make its own determination taking into account all facts and circumstances it deems relevant, subject to the provisions of the governing documents. As a general matter, the standards for determining whether an investment is written off as worthlessare intended to be high, and are not intended to applyto investments that are written down (regardless of the magnitude of the write down) or to investments believed to be experiencing temporary declinesto zero value. Because the amount of the Firm’s compensation is dependent in part on an investment’s status as aninvestment written off as worthless,the Firm faces potential conflicts of interest in determining whether an investment meets, or continues to meet, the relevant criteria. Although the Firm intends to operate in accordance with the governing documents, as well as its valuation policy, in order to mitigate the potential for subjectivity in making such determinations, there can be no assurance that such policy will address all of the necessary factors to do so, or completely eliminate all potenti al conflicts of interest in such determinations. Cure Activities. Certain personnel of the Firm will spend significant time developingand operating the Cure building, a life sciences innovation center that is owned by an affiliate of the Firm. Such activities will reduce the time and attentionthat such personnel would otherwise have available to spend on the Funds. It is expected that theFunds will, over time,indirectly benefit from theCure healthcare ecosystem. Tenants of the Cure (referred to as residents) and participants in the Cure includecurrent portfolio companies and are expected to include future portfolio companies of the Funds as well as other organizations that may collaborate with the Funds or their portfolio companies. A conflict of interest may arise in which the Firm’s actions with respect to a Fund’s investment in a portfolio company that is a Cureresident or participant or that relates to a collaborator at the Cure could be influenced by the desire to manage and maintain Cure’s relationship with the portfoliocompany or collaborator. A conflict may also arise to the extent the Firm has an ability to influence the decision of Fund portfolio companies to lease space within the Cure. It is expected that portfolio companiesthat decide to become resident at the Cure will do so if they expect to benefit from the Cure amenities and ecosystem. The Firm is required to disclose to the advisory committees of certain Private Design Funds and Innovations Funds all rent paid by such Funds’ portfolio companies for access to facilities owned or leased by the Firm or its affiliates and the basis for determining that such rent is reasonable. Any such rent paid to the Firm or its affiliates that is not reasonable generally will reduce fees payable by the relevant Fund(s), as set forth in the Funds’ governing documents. In addition, one or more affiliates of the Firm, such as Cure Experience Services LLC, will offer residents and other participants in Cure,

including portfolio companies of the Funds, a range of ancillary services through or at the Cure that they may, though are not obligated to, use. Such services are expected to include, without limitation, catering and dining services, physical security, event services and space, building use and service data analytics , programming (including programs providing academic or professional instruction, training, credits or certificates and other programs) conferences, lectures and concierge services, video production, graphic design and communications services, and membership and residency programs. Payments received by the Firm and its affiliates for such services do not offset any fees payable by the Funds and are not included in fees that are subject to review by a Fund’s advisory committee. A conflict of interest exists because the Firm will be incentivized to encourage portfolio companies to purchase such services. This conflict is mitigated by the fact that many purchases of such services are at the sole discretion ofportfolio company personnel. The Firm has incentive to cause the Funds to invest in certain companies in order to receive certain financial benefits relating to ownership of the Cure by an affiliate of the Firm. This conflict is mitigated by the rigorous diligence process that potent ial investments undergo and the consensus-driven approach to investing in and advancing such potential investments. Residents at the Cureinclude public and private healthcare companies, including companies in which the Funds are invested or may seek to invest.In some instances, 345 PAS Holding or an affiliate may permit residents to pay rent in the form of securities. As a result,the Firm or its affiliates mayown securities in such company separate from any securities held by the Funds. This creates an incentive for the Firm to seek to preserve or enhance the value ofsuch companies, may influence decisions about whether, when and on what terms the Funds transact in such companies’ securities , and may create competitionbetween the Funds and the Firm or its affiliate in respect of transaction involving such companies’ securities . This conflict is mitigated by the fact that any sales of such securities would be subject to the Firm’s Code of Ethics and that Fund investments are made through aconsensus-driven approach to investing. Investments by the Deerfield Foundation. The Deerfield Foundation is a charitable organization managed bypersonnel of the Firm and largely supported by the Firm and individualpersonnel of the Firm. In addition to philanthropic funding of non -profit healthcare causes, the Deerfield Foundation occasionally invests in for profit healthcare companies. A potential conflict of interest exists with respect to the allocation of investment opportunities. This potential conflict is mitigated because any investment opportunity that is suitable for any of the Funds will be made available first to the applicable Funds. The Firm , through its personnel that control the Deerfield Foundation, will not cause the Deerfield Foundation to make an investment in a for-profit healthcare companywithout first determining that the Funds do not wish to invest. In some instances, a Fund may conduct diligence in furtherance of a prospective investment and determine that the investment is not expected to produce desired returns or is too risky . Such opportunity may subsequently bepresented to andpursued by the Deerfield Foundation. To the extent a Fund incurs diligence costs evaluating an investment opportunity that is subsequently evaluated and/orultimately made by the Deerfield Foundation, such Fund is expected to bear the costs of diligence conducted at the Fund’s initiative. Costs incurred at the direction of the Deerfield Foundation will be borne by the Deerfield Foundation. Research Supported by Advancium Health Network. The Firm and Deerfield Foundation helped launch in 2021 Advancium Health Network, Inc. (“Advancium”), a public charity with a mission to advance solutions for underserved patientsthrough strategic and philanthropic partnerships. Advancium’s approach includes moving forward healthcare projects in areas of compelling need but questionable commercial viability. Certain supervised persons are on the board of Advancium or otherwise support Advancium and

its activities. A dvancium initiatives include identifying and developing potential medical discoveries and technologies that address unmet needs, including in rare disease and disease impacting children.The Firm and Deerfield Foundation provide certain financial support to Advancium and personnel of the Firm and Deerfield Foundation help support the activities at Advancium. Advancium’s efforts to support healthcare research and discovery could overlap with early stage discovery and later stage activities of the Funds or portfolio companies. This conflict is mitigated by the fact that projects supported by Advancium are not expected to attract for-profit investors at the time of funding by Advancium. For example, Advancium may advance life science and medical research projects that require exploratory work to de-risk targets and/or further develop therapeutic concepts or technologies in order to be deemed viable, with funding from Advancium to be used for costs relating to exploratory work for which there is a well -defined therapeutic hypothesis but a lack of critical data to reliably predict the probability of success for drug discovery and development. Similarly, Advancium, through its subsidiary CobiCure, intendsto acquire, license or develop medical technologies that may be advanced toward regulatory approvals and clinical trials that address unmet medical needs in the pediatric population and that otherwise would not receive funding due to their uncertain viability, scalability,market potential or efficacy. It is expected thatthe Firm will be a source of such projects or technologies; however, any project sourced from the Firm that is suitable for any of the Funds will be made available first to the applicable Funds . Moreover, funding of such projects or technologies by Advancium or its subsidiaries does not preclude the possibility of subsequent investment by the Funds. Similar to the Deerfield Foundation, in some instances, a Fund may conduct diligence in furtherance of a prospective investment and determine thatthat the investment is not expected to produce desired returns or is too risky. Such opportunity may subsequently be presented to and pursued by Advancium. To the extent a Fund incurs diligence costs evaluating an investment opportunity that is subsequent ly evaluated and/or ultimately made by Advancium, such Fund is expected to bear the costs of diligence conducted at the Fund’s initiative. Costs incurred at the direction of Advancium will be borne by Advancium. Employees of the Firm involved with Advancium do not intend to cause Advancium to invest in companies in which a Fund wishes to invest. Moreover, Advancium is an independent organization that is not controlled by the Firm or the Deerfield Foundation.

Accordingly, the Code incorporates the principles that the Firm and its employees must place the interests of the Funds first , not take inappropriate advantage of their positions, maintain independence in the investment -decision making process and comply with applicable laws. With respect to personal trading by the Firm’sprincipals and employees,such persons are required to observe the Firm’s Code of Ethics and generally may not, without express approval from the Firm’s Chief Compliance Officer, establish a new investment position in any company on the Firm’s restricted list orin the healthcare sector, public or private, but may maintain investment positions in such companies if the position

was established prior to 2011 or prior to the individual becoming anemployee, or if the position is received without action by the employee (for instance, by bequest). Employees may make trades to exit from such publicly traded positions only with priorcompliance approval. Such approval willtypically be given only if (i) the Firm is not restricted from trading in the relevant security, and (ii) the requested trade is not adverse to, or could not be expected tomaterially affect, any trading strategy in which the Firm is engaged, whether in terms of the direction of a trade or by materially affecting price or trading volume in the relevant security. Employees may, without express approval from the Firm’s Chief Compliance Officer, invest in healthcare focused open end mutual funds that are not exchange traded funds. With prior compliance approval, employees may make investments in private companies operating outside of the healthcare sector. Employees may generally trade in publicly traded securities outside of the healthcare sector; however,employees may not trade in any security, regardless of sector, if the Firm or the employee is in possession of material non -public information regarding such security. Employees must submit holdings reports annually and transaction reports on a quarterly basis for securities holdings (excluding securities exempt from such reporting under the Advisers Act and applicable regulations), regardless of , sector and submission requirements are generally satisfied through brokerage feeds to, or other information input into, ComplianceAlpha, a software platform used by the . Firm The Firm provides investment advisory services only to the Funds, which, although certain Funds are permitted to investa portionof assets outside the healthcare sector, invest almost exclusivelyin the healthcare sector. If any of the Funds were to invest materiallyoutside the healthcare sector, theFirm expects that the Code wouldbe updated toapply such other controls as the Chief Compliance Officer deems appropriate . The Firm’s Code is available to anyinvestor or prospective investor upon request by contacting the Firm’s Chief Compliance Officer at (212) 551 -1600. Occasionally, it may be appropriate for more than one of the accounts managed by the Firm to trade or invest in the same securities at the same time. When an investment is appropriate for more than one strategy or more than one Fund, it is the policy of the Firm to attempt to appropriately size and fairly allocate the opportunity among the applicable Funds. A fair allocation does not necessarily mean an equal or proportionate allocation. There can be no assurance the application of the Firm’s policy will result in a Fund participating in all investment opportunities that may fall within the Fund’s Strategy. The appropriate sizing of a position in a given investment will vary among Funds. Each Fund is equally entitled to participate in a new investment opportunity provided that the opportunity fits within the Fund’s Strategy. In determining theappropriate sizing of an investment for a particular Fund, the Firm may consider many factors, including the Fund’s: investment policies, guidelines or restrictions; existing diversification among healthcare subsectors; gross and net exposure; return objectives; correlated investments; tax considerations; cash availability and liquidity constraints; available and committed capital (where applicable) ; expected duration of investment; sector, sub-sector and individual security weightings; hedging activity; anticipated amount of securities received; and such other factors as the Firm considers relevant consistent with its fiduciary duties (“Sizing Factors”). Sizing decisions are made for each of the Funds with respect to a purchase or sale of a security (“Sizing Amount”) based on the Sizing Factors(and, with respect to the Private Design Funds and the Innovations Funds, based on additional factors as described below) . The Firm attempts to execute the decision to purchase or sell the Sizing Amount for each of the participating Funds. The Sizing Amount may be adjusted if there are changes to the Sizing Factors.Investment sizing decisions in the Public

Securities Strategy are determined and executed independently for the fundamental based strategy and the algorithmic, quantitative orsystematic trading strategy. In the case of a n investment opportunity that is eligible for various Private Design Funds and/or Innovations Funds, which have different investment periods, the following additional factors will be considered. If the investment opportunity contemplates a term extending beyond the life of one Fund, it may be allocated to another Fund having sufficient remaining life. If the investment opportunity constitutes an extension, restructuring, replacement, refinancing or follow-on financing of an existing investment made by one or more Funds, the new investmentwill typically bemade available to the Fund (s) that made the initial investment (subject to such Fund having a sufficient remaining life and capital , its return objectives, position size, expected duration and liquidity objectives, and such other factors as the Firm determines to be appropriate); however,if the Firm expects a company’s equity securities to become publicly traded within 18 months of the date of investment and the Fund using the Public Securities Strategy has not madethe initial investment, the new investment will typically also be made available to such Fund in equal share to the Fund(s) that made the initial investment. If the investment opportunity fits the strategy of different Private Design Funds and/or Innovations Fund s and occurs within the investment period of such Funds, contemplates exit within the life of such Funds, and does not constitute the extension, restructuring , replacement, refinancing or follow-on financing of an existing investment that could, and is desired to,be funded entirely by the Fund(s) that made the initial investment, then the Sizing Amount of the investment for each of the Private Design Fundsand/or the Innovations Fund s eligible to participatein the investment will be determined in a manner the relevant General Partner and Managing Partner consider fair based on the Sizing Factors including amounts a Fund must reserve to satisfy existingor expected investment obligations. When placing orders to purchase or sell the same security with the same price limit and other dimensions for more than one Fund, it is expected that the Firm will usually aggregate for all participating Funds purchases or sales of such a security (“block trading”) provided the Firm deems it appropriate and in the best interests of the Funds. All eligible Funds generally participate in the block purchases or sales according to the Sizing Amounts established for each participating Fund and bear the commission cost s pro rata based on the amount purchased or sold by each Fund on a trade -by-trade basis. If partial sales or purchases are made, the allocation of securities to the participating Funds shall generally be in the same ratio as the actual transactions bear to the intended Sizing Amounts (the “ Allocation Ratio”). Where an allocationwill not be made according to the Allocation Ratio for various reasons, including, but not limited to: (a) if a pro rata allocation results inde a minimis allocation to certain Funds, or an amount less than the minimum denomination available for a particular security; (b) if the allocation would result in unbalancing the diversification of one or more Funds (based on factors including, but not limited to, r isk, sector, subsector, geography, issuer, and credit quality); (c) if a pro rata allocation would result in one or more Funds not meeting an investment objectiveor violating an investment restriction; or (d) other factors in the Firm’s professional judgment consistent with its fiduciary duties. It is the policy of the Firm that transactions in a security in the same directioni.e. ( , purchase or sale) and with the same order instructions (i.e.,price limit, speed, duration) during a day will be allocated to each of the Funds that received or sold a portion of the security at the average price obtained during the day. Within the Public SecuritiesStrategy, fundamental based investment orders andalgorithmic, quantitative or systematic trading orders generally are not aggregated, regardless of whether the same direction orders are

identical (e.g., same price limit and other dimensions), or netted, regardless of whether the opposite direction orders are identical. In the public securities markets, it can take several hours, days or weeks(or longer) for the Firm to reach the Sizing Amounts originally established for a particular investment. The Firmmay change the Sizing Amount for any Fund any time prior to a trade being made based on a reevaluation of the Sizing Factors in light of the most current circumstances related to the management of the Fund. Although the Firm’s goal is to be fundamentally fair on an overall basis with respect to all Funds, there can be no assurance on a trade-by-trade basis that one Fund will not be treated differently from another or disadvantaged by the trading of another Fu nd. If the Firm did not manage multiple Fund accounts , each Fund individually at times would be able to receive or sell a greater percentage of all financial instruments purchased or sold. Consequently, when multiple Funds participate in limited opportunity trades or investments, each participating account often reduces the opportunity available to other participating accounts. Investment allocations made with respect to public securities are generally entered in the Firm’s order management system. Private investment allocation decisions are generally memorializedin investment memoranda and/or transaction documents. The Firm does not engage in principal transactions with client accounts unless it first obtains consent from the client(s) for the specific transaction.Principal transactions are generally defined as transactions where an adviser, acting as principal for its own account, buys a security from or sells a security to an advisory client. If the Firm engages in principal transactions, the Firm prices financial instruments in accordance with the Firm’s valuation policies. Subject to the governing documents of each Fund, the Firm maylend money to a Fund, which loans are repayable upon demand by theFirm. The Firm occasionally effects cross trades between Fund accounts. Cross trades between Funds utilizing different strategies are effected on occasion , fortoexample,avoid liquidity leakage and reduce transactions costs, if the Firm determines that doing so is in the best interest of each participating Fund. The Firm may also conduct a cross trade when a Fund that initially entered into an investment faces a situation in which the investment will require additional capital that would cause the investment to exceed the desired Sizing Amount for such Fund, but which remains a desirable investment. In such instances, the initially investing Fund may trade a portion of its position to one or more other Funds such that all of the relevant Funds par ticipate in both the existing position and the additional investment. The Firm may consult the Firm’s Advisory Board and/or obtain consent from the advisory committees of the relevant Funds, if applicable. The Firm prices financial instruments that are traded in Fund to Fund transactions in accordance with the Firm’s valuation policies.A controlled portfolio company of one or more Funds may acquire securities owned byone or more Funds that are not invested in such portfolio company. In addition, a controlled portfolio company may acquire another controlled portfolio company. In such instances, the Firm may elect to consult the Firm’s Advisory Board and/orobtain consent from the advisory committees of the relevant Funds. Cross trades are also expected to arise in the context of automatic or other re -balancing of investments amongparallel investing entities, and in such circumstances the Firm generally will not seek a fairness opinion or advisory committee consent given that such transactions typically are effected close in time to the initial Fund’s investment or pursuant to authorizing provisions in the relevant governing documents.

The Firm may present co-investment opportunities to third partiesin its sole discretion, which may include Fund investors.The allocation of co-investment opportunities may involve a benefit to the Firm or its affiliates.Such co-investment opportunities may arise, for example, in connection with a proposed investment by the Funds(i) in which there is investment capacity in excess of the participating Funds’ investment appetite , or (ii) relating to early stageresearch arising from aResearch Partnerthat is also an investor in one or more of the Funds. Unless specifically provided in a collaboration agreement between a Fund and such Research Partner, the Firm has no obligation to make such co -investment opportunities available to any investors . Investors in the Funds should have no expectation of receiving co-investment opportunities. In determining how to allocate any such opportunities to co -invest alongsidea Fund, if any, theFirm may consider numerous factors, including, without limitation, the size of investor commitments or potential commitments to the Fund or other Funds managed by the Firmand/or its affiliates , strategic value of such co -investor (including theFirm’s perception of the strategic value of a prospective co -investor to the underlying investment opportunity), timing, and whether the co-investor will make a good syndicate partner. In addition, certain investors or their affiliates have(and other investors or their affiliates in the future may have) rights to co-invest alongsidea Fund in priority to other investors in certain circumstances (for example, with respect to investments made by a Fund relating to a Research Collaboration with suchinvestor (or an affiliate thereof). Investors should not invest ina Fund with any expectation of receiving co -investment opportunities. TheFirm or an affiliate thereof may form committed co-investment vehicles to participate alongside the Fund in investment opportunities that the Firm has determined in good faith exceeda Fund’s interest in the opportunity or for a potential investment opportunity that the Firm has determined warrants “up-front” co-investors, due to the size or timing of the opportunity, confidentiality concerns,or requirements imposed by the portfolio company. The Firm, in its sole discretion, may determine to offer participation in a committed co-investment vehicle only to select investors, such as investors with substantial capital commitments a toFund or capital commitments to otherFunds managed by the Firm or its affiliates. The allocation of co -investment opportunities may not be in the best interests of the Fund or any individual investor, and may be made to one or more persons for any number of reasons as determined by theFirm in its sole discretion, including, but not limited to: (i) the ability of a potential -investor co to react promptly to a co-investment opportunity; (ii) any strategic advantages that may result from a potential co investor’s participation in a co-investment opportunity; (iii) a potential co-investor’s commitment to the Fund(s); (iv) the likelihood that a potential co investor may invest in a future Fund; (v) the potential co -investor’s investable assets relative to the size of the co -investment opportunity; (vi) tax, regulatory and/or securities law considerations (e.g., qualified purchaser or qualified institutional buyer status); (vii) confidentiality concerns that arise in connection with providing the potential co -investor with specific information relating to the co investment opportunity; (viii) whether the potential co -investor’s participation in an investment opportunity may subject a Fund to legal, regulatory, reporting or other burdens or could impair the ability of the Firm to execute the relevant transaction in the desired time or on desired terms; (ix) the size of the investment allocation and practicality of dividing it among multiple potential co -investors; (x) lender requirements; and/or (xi) whether the Firm believes that allocating investment opportunities to the potential co -investor will help establish, recognize, strengthen and/or cultivate relationships that have the potential to provide longer -term benefits toone or more Funds. The allocation of co-investment opportunities may involve a benefit to the Firm or one or more of its affiliates, including, without limitation, management fees, carried interest or other transaction -based compensation in connection with the co -investment opportunity, additional capital commitmentsatoFund(s), and/or capital commitments . A Fund’s expenses for a particular investment opportunity will generally not be impacted by the participation or potential participation of third party investors in a co -investment opportunity, and expenses relating to the Firm’s development, consummation and oversight of an investment are generally

borne exclusively by the participating Fund(s). Except where the relevant governing document or Side Letter(s) expressly provide to the contrary,fi a proposed transaction with potential co-investors is not consummated, certain broken deal expenses relating to such proposed transaction incurred by the Firm may be allocated to potential co-investors to the extent practical or pursuant to agreement with such proposed co -investors, if one exists, or may be fully borne by the applicable Fund that would have made the investment . As a result, theFirm and its affiliates may be subject to conflicting interests with respect to offering co -investment opportunities.In the event a co-investment opportunityis made available to any third party, the Firm will not ordinarilyprovide investment adviceto any such third party or receive any compensation from such third party relating to the prospective co-investment. The Firm does not ordinarilyundertake due diligence or make investment decisions or recommendations on behalf of prospective co -investors. The Funds are permitted to co-invest with third parties through partnerships, joint ventures or other entities or arrangements. Such investments may involve risks not present in investments where a third party is not involved, including the po ssibility that a third party co -venturer or partner may at any time have economic or business interests or goals that are inconsistent with those aofFund, or may be in a position to take action contrary to the investment objectives ofa Fund. In addition,a Fund may in certain circumstances be liable for actions of its third party co -venturer or partner. There can be no assurance that a Fund’s return from a transaction would be equal to and not less than the return of another party that was allocated a co -investment opportunity and that is participating in the same transaction. Furthermore, decisions regarding whether and to whom to offer co -investment opportunities may be made by theFirm in consultation with other participants in the relevant transactions, such as a co -sponsor. Coinvestment opportunities may, and typically will, be offered to some and not to other Fund investors, if offered at all. Non-binding acknowledgments of interest in co-investment opportunities do not requirethe Firm to notify recipients of such acknowledgments in the event a co -investment opportunity arises. The Firm is permitted to offer co -investment opportunities to the same co -investor or subset of co -investors more frequently than otherinvestors in its sole discretion and without any notice to other investors, including those that have requested non-binding acknowledgements of interest in co -investment opportunities. When and to the extent that employees and related persons of the Firm make capital investments in or alongside a Fund, the Firm is subject to conflicting interests in connection with these investments. The Firm’s allocation of coinvestment opportunities among the persons and in the manner discussed herein may not, and often will not, result in proportional allocations among such persons, and such allocations may be more or less advantageous to some such persons relative to others.

best execution, the Firm also evaluates qualitative execution factors, such as research capabilities, ability to execute trades,access to management of issuers,nature and frequency of sales coverage, depth of services provided, including back office and processing capabilities, financial stability and responsibility, reputation, commission rates, markups and markdowns, responsiveness to the Firm and the value of research and brokerage products and services provided by such brokers (as discussed below). The determinative factor is not the lowest possible commission cost alone. The Firm considers research and soft dollar benefits in selecting brokers. “ Soft dollar” benefits arise when a Fund pays a brokerage commission that is not the lowest possible commission available from the broker. When soft dollars are used to obtain research and other benefits, those benefits are being paid for by higher commissions incurred in connection with tradesof Fund securities. The Firm’s investment approach emphasizes detailed research of individual healthcare companies, the healthcare sector generally, particular subsectors within the healthcare industry, and particular products, services and technologies and related commercial, legal, political, and regulatory dynamics. Consequently, the Firm considers the value of research and other products and services that may be able availfrom a broker when selecting and engaging brokers. Such research and brokerage services may be provided directly by the broker or by third parties that are paid by the broker , either directly or throughanother broker-dealer thataggregates commissions. Researchand other products andservices furnished or paid for by brokers may include, but are not limited to, written information and analyses concerning specific securities, companies or sectors; market, financial and economic studies and forecasts; the costs of executing and obtaining responses to surveys of healthcare professionals; financial and industry publications; market, financial, economic, and similar data; healthcare related data and analytical software; statistics and pricing services; discussions with research personnel and other expert consultants; software, databases and other technical services utilized in the investment management and trade execution process; access to portfolio company management; and attendance at conferences. Soft dollars are not used to pay or reimburse the Firm’s internal expenses, such as paying Firm personnel, rent, utilities, or overhead expenses. The Firm applies soft dollars only to pay for research and brokerage services that fall within the safe harbor established under Section 28(e) of the Exchange Act. Brokerage products and servicespaid for with soft dollarsinclude, but are not limited to,dedicated lines and message services that connecthe Firm to othermarket participants (such as broker -dealers and custodians), software used to route orders to market centers or to direct market access systems or that provide algorithmic trading strategies, including software incorporated in order management systems, and certain post-trade services incidental to executing a transaction, such as post -trade matching of trade information, and the use of electronic confirmation and affirmation of institutional trades in connection with settlement processing. Certain items obtainable with soft dollars will not be used exclusively for eitherbrokerage or research services. Under such circumstances, the Firm makes agood faith effort to determine the percentage of such products or services that may be considered as Section 28(e) eligible research or brokerage services and will use soft dollars to pay for only that portion of the product or service used by the Firmfor Section 28(e) eligible purposes. Those portions of the product or service that are used for other purposes will be allocated to the Funds to the extent they are allowable Fund expenses or to the Firm to the extent theynot areallowableFund expenses. In allocating the costs of a mixed -use product or service, the Firm has an incentive to designate as much as possible of the costs to eligible Section 28(e)soft dollar expenses to minimize the amount that the Firm and/or the Funds must pay directly. To address this conflict of interest, the Firm maintains documentation

of its methodology for allocating the costs of mixed-use products and services between allowable and non allowable soft dollar expenses. Such documentation is periodically reviewed by the Chief Compliance Officer to determine that the allocations were rea sonable. In its discretion,the Firm maycause a Fund or the Firm, as applicable and to the extent permissible under relevant Fund documents, to pay for the portion of a product or service that is Section 28(e) eligible directly rather than through soft dollars. The Firm’s Commission Sharing Arrangements (CSA) Committee reviews on a n approximately quarterly basis the Firm’s use of soft dollars . The Firm participates in a client commission management arrangement under which it may effect transactions th rough a broker-dealer and request that the broker -dealer allocate a portion of the commissions to another broker -dealer that aggregates these client monies and, with the Firm’s oversight and approval, pays service providers of qualified research and brokerage services. This arrangement enablesthe Firmto efficiently consolidate payments for qualified research and brokerage services. For administrative reasons, this broker -dealer aggregator doesnot process payments for certain services that qualify underSection 28(e), including surveys and consultations conducted by Deerfield Intelligence. Expenses for certain surveys and consultations conducted by Deerfield Intelligence are paid by the Funds and are allocated based onthe expected benefit to the relevant Funds , or in such other way that the Firm deems fair and equitable. The relationship with brokerage firms that offer commission sharing arrangements to the Firm influences the Firm’s judgment in allocating brokerage business. By using Fund brokerage commissions to obtain research, the Firm receives a benefit because it does not have to produce or pay for the research. Therefore, the Firm has an incentive to select a broker based on its interest in receiving research or other products or services, rather than on a Fund’s interest in receivingbest execution and thereby is subject to a conflict of interest in using the services of those brokers to execute a Fund’s brokerage transactions. Although the Firm believes that these relationships will be beneficial to both the Firm and the Funds, a Fund will sometimes pay commissions higher than those charged by other brokers that do not provide soft dollar benefits.The Firm also effects client transactionsthat generate soft dollarsthrough electronic communication networks and other alternative trading plat forms. Because the Firm uses its research of the healthcare industry to analyze investment opportunities across all Fund Strategies, all Funds advised by the Firm may benefit directly or indirectly, immediately or over time, from research provided or paid for with soft dollars. The Firm does not attempt to allocate the benefits of soft dollars among the Funds in proportion to the trades that generate the soft dollars. Consequently, soft dollars generated by any one of the Funds will pay for products and services the exclusive, primary , disproportionalor immediate benefit of whichwill inure to one or more of the other Funds, including Funds that have little or no soft dollar generating trading activity . In such cases , certain clients will obtain a disproportionate benefit in soft dollar paid research and/or services compared to the amount of soft dollars they generate, or vice versa. In addition, the Firm at times shares research paid for with soft dollars with portfolio companies in which the Funds invest. The Firm believes that doing so may benefit such portfolio companies and, in such cases,therefore, indirectly benefits the Funds’ investment in such companies. On occasion, the Firm, as a matter of good corporate citizenship, shares with the public research conducted byDeerfieldIntelligenceor other groups at the Firmthrough surveys, inter views, consultations, and data that has been paid for with soft dollars. The results of such research may be conveyed to the public through the publication of articles, sharing the research with not -for-profit healthcare associations, institutes

and organizations or through other means. The primary goal of sharing such research with the public is to advance healthcare through the sharing of information. In addition, at times, DeerfieldIntelligenceconducts research at the request of thirdparties that are involved in advancing healthcare. If the Firm makes a determination that conducting such research will also benefit the Funds, it may pay for such research with soft dollars. To the extentthat the Firm determines that any part of such research will not benefit the Funds , that portion of the research will be paid for by the Firmor by one or morethird parties. The Firm has a conflict of interest in properly allocating the costs of such research because it has an incentive to pay for as much of such research as possible with soft dollars. To address this conflict of interest, Deerfield Intelligence collaborates with the Chief Compliance Officer to review and document the Firm’sallocation methodology for such research. Although theprimary goal of the Firm in sharing research with the public and/or conduct ing research on behalf of thirdparties that may be paid for with soft dollars is to contribute towards advancing healthcare, the Firm and its affiliates may receive indirect benefits through providing such research to the public. For example, providing research to the public through various venues may improve the Firm’s reputation as an investment manager in the healthcare sector, thus possibly leading to additional investors in the Funds and/or new investment opportunities for the Firm and/or the Funds. In such instances, the soft lars dol generated by the Funds will havepaid for these indirect benefits received by the Firm. The Funds, and not the Firm, will be responsible for any losses resulting from portfolio management, trading or administrative errors in connection with the relevant Fund’s investment activities, in the absence of gross negligence, bad faith or willful misconduct by the Firm, the relevant General Partner (if applicable) or their affiliates or personnel. A Fund’s responsibility for such errors might include, for example, incorrect entry of a trade into an electronic trading system, errors when reconciling trade activity, or drafting errors related to derivatives contracts or confirmations. Given the volume of transactions executed by the Firm on behalf of the Funds, investors should know that such errors do occur (although the Firm does not expect them to occur frequently), and that the Fund will be responsible for any resulting losses, even if such losses result from the negligence (but not gross negligence) of the Firm, the relevantGeneral Partner (if applicable) or its affiliates or personnel. Although the governing documents generally contain broad exculpation and indemnification provisions,the Firm will not interpret such provisions to constitute awaiver of any person’s non-waivable federal fiduciary duties to the relevant Fund under the Advisers Act. When placing orders to purchase or sell the same security with the same price limit and other dimensions for more than one Fund, the Firm will generally aggregate for all participating Funds purchases or sales of such security provided the Firm deems it appropriate and in the best interests of the Funds. Such aggregation may result in better prices and lower execution costs for the participatingFunds. All participating Funds generally bear the commission costs pro rata based on the amount purchasedor sold by each Fund, and securities purchased or soldare generallyallocated on an average price basis . If partial sales or purchases are made,the Firm will allocate the order as described in Item11 above.

are open, which orders are reviewed and executed by a member of the Firm’s trading team. The investments of the Private Design Strategyand Healthcare Innovations Strategy are generallylong-term, illiquid, and made less frequently than investments in the Public Securities Strategy. C onsequently, the Firm reviews the Private Design Strategy and Healthcare Innovations Strategyportfolios regularly, on an as needed basis, including upon the occurrence of actionable events and in connection with the making and exiting of investments. The Firm reviews theportfolios of the Private Design Strategy and the Healthcare Innovations Strategy to assess whether to pursue transactions that may expand or reduce exposure to a portfolio company, restructure an investment to more closely conform to a portfolio company’s business dynamics and the applicable Fund’s desired return profile, or to initiate an exit or liquidity event such as a merger, initial public offering or sale of the portfolio company. Portfolio reviews are conducted under the supervision of the Firm’s Managing Partner, or the Managing Partner’sdesignee. The Firm does not provide personalized advice to individual investors and does not review individual Fund investor accounts or financial plans. Fund investors receive monthly (in the case of Deerfield Partners, L.P.) or quarterly (in the case of Funds utilizing the Private Design Strategy or the Healthcare Innovations Strategy) reports on the value of assets in the relevant Funds. The Firm p rovides commentary on the performance of all Funds and the state of the markets on a quarterly basis. Annually, Fund investors also receive audited fiscal year-end financial informationwithin 120 days of the applicable Fund’s fiscal year ,end except that with respect to the Strategic Growth Fund, such information is provided with in 180 days of the Fund’s fiscal year end.

The Firm will receive benefits from employeesor consultants of portfolio companies in the form of information, ideas, consulting or other services,which may be provided without charge andwhich benefits may be used by theFirm for its own purposes. The Firm will receive benefits from employees and consultants who are Discovery Specialists engaged to support the discovery activities and operations of portfolio companies, whose costs are borne exclusively by the Funds and portfolio companies, in the form of information, ideas or other support in connection with the Firm’s business. In addition, certain portfolio companies may reimburse or pay the Firm or its affiliates, including 3DC, for services, goods or facilities provided to such portfolio companies by third parties including other portfolio companies or by the Firm and its affiliates. Such services, goods and facilities are expected to be provided to such portfolio companies on comparable or improved economic terms relative to those that any portfolio company could obtain individually, and the Firm may also procure such services, goods and facilities for its own use on the same

economic terms. Furthermore, while it is anticipated that any intellectual property developed by the Firm or its affiliates in respect of services contracted by the Firm or its affiliates for the benefit of any portfolio company will accrue to the benefit of suchportfolio company, it is expected that theFirm or its affiliateswill retain rights to use certain intellectual property, including the ability to license such intellectual property to third parties, including other portfolio companies. The Firm and its affiliates also expect to have access to certain information generated by Fund portfolio companies and to be able to generate insights and additional information through analysis of such data, the benefits of which may be reaped by the Firm, its affiliates, other Funds and other portfolio companies. An affiliate of the Firm owns a property and a building in New York City, known as the Cure, which provides laboratories, engineering and computing space, and other facilities and services to portfolio companies of the Funds. Certain ancillary services are provided by another affiliate of the Firm, Cure Experience Services LLC. The Firm’s affiliates may benefit from the payment by portfolio companies for rent and fees for such space, facilities and services , includingthrough increased occupancydue to the Firm’s ability to direct portfolio companies to lease space and facilities and consume services and through appreciation in the value of the property. To ameliorate conflicts, management fees payable by the Funds will be reduced by any rent paid by portfolio companies controlled by the Firm that is in excess of “reasonable rent”. In addition, the governing documents of certain Funds include a mechanism for review by the relevant Fund advisory committee of certain fees and expenses paid by portfolio companies to the Firm or certain affiliates. The Firm accepted two investors ina Private Design Fundvintage that were introduced by a solicitor with whom the Firm no longer has an ongoing arrangement, but to whom the Firm paid placement agent compensation upon receipt of performance-based compensation attributable to such investors in respect of their investment insuch Funds. The Firm entered into a consulting agreementwith an individualto provide professional services and strategic advice relating to business development opportunities in the Middle East. Under the terms of the arrangement,the individualassists the Firm in the development ofthe business of it, its affiliates and portfolio companies by making introductions through a variety of methods. While such introductions have included potentialnon-U.S. investors that may consider investing capital in funds managed by Deerfield,the individualhas not been engaged as a placement agent, finder, broker -dealer or underwriter or to provide an y such services. Pursuant to the arrangement, the individual generally may not conduct business in or engage with potential investors or transaction counterparties in the United States. The individual receives a flat monthly payment and discretionary bonus , plus reimbursement of reasonable business expenses, in consideration of his services.The Firm utilizes capital introduction services offered by unaffiliatedbrokers-dealers with which the Firm has relationships .

financial statements are furnished annually to all investors in such Funds within 120 days of the end of each Fund’s fiscal year. With respect to the Strategic Growth Fund, Ernst & Young, an independent public accountant is retained to conduct an independent verification of the Strategic Growth Fund’s funds and securities in accordance with theCustody Ruleunder the Advisers Act(a “surprise examination”) . at leastonce during each calendar year. The Strategic Growth Fund’squalified custodianwill send account statements of the investors in the Strategic Growth Fundquarterly in accordance with the Custody Rule . Investors in the Funds are urged to carefully review all account statements and to contact the Firm if they have any questions.

In the case of certain Funds utilizing the Private Design Strategyand the Healthcare Innovations Strategy, each investor in such Funds has also granted the Firm a power of attorney to establish such “alternative investment structures” as the Firm s deem appropriate for purposes of a given investment and to call capital directly into such alternative investment structures. Limitations on the Firm’s authority are guided by, among other things, (i) its responsibility to act as a fiduciary when handling Fund accounts, (ii) the investment Strategies and objectives each of Fund, (iii) a Fund’s Memorandumand other governing documents , and (iv) the obligation to seek best execution for Fund trades.

pursuant any quantitative, systematic, or algorithmic strategies, it is the Firm’s policy to generallyvote to abstain, or to abstain from voting proxies,except that if voting securitiesof the same issuerare also held by the Fund pursuant to other strategies, suchaas fundamental strategy, or held by other Funds, the Firm will generallyvote proxies in respect of securitiesheld pursuant to quantitative, systematic, or algorithmic strategies in the same manner as voting securities held pursuantsuch other strategies or other Funds. Individual investors in the Funds do not have a right to direct how the Firm exercises its voting discretion. Proxiesfor Fund securities are generallyreviewed bythe Managing Partneror the Managing Partner’s designee, who makes final decisions regarding the voting of such proxies. Voting proxies in respect of securities held pursuant to quantitative, systematic, or algorithmic strategies is generally made without further review or consultation by the Managing Partner or the Managing Partner’s designee. The Firm’s Chief Financial Officeror the Chief Financial Officer’sdesigneegenerallyreviews andmakes decisions regarding the voting of proxies relating to Fund investment s in short-term money market funds.

The Firm acts as a fiduciary when voting proxies on behalf of the Funds.The Firm will seek to avoid possible conflicts of interest in connection with proxy voting. The Firm itself generallyholds no direct position in the companies in which the Funds invest and, therefore, should have no interest independent of the Funds in how Fund securities are voted.If the Managing Partner, or the Managing Partner’sdesignee, or the Chief Financial Officer, or the Chief Financial Officer’s designee, as applicable,nevertheless believes there may be a potential conflict of interest between Funds or between the Firm and any Fund with regard to the voting of securities, such person will notify the Chief Compliance Officer. The Chief Compliance Officer will review the potential conflict of interest and determine whether such potential conflict is material. Where the Chief Compliance Officer determines there is the potential for a ma terial conflict of interest regarding a proxy, the Chief Compliance Officer will consult with the ManagingPartner, or the Managing Partner’sdesignee, and sector analysts who follow the company and/or the Chief Financial Officer, or the Chief Financial Officer’s designee, as applicable, and a determination will be made as to whether one or more of the following steps will be taken: (i) discuss the proxy vote with the relevant Fund advisory committee, Board of Directors, or Firm Advisory Board; and/or (ii) seek the recommendations of an independent third party. Investors may obtain the Firm’s proxy voting policy and procedures and/or a record of the Firm’s proxy voting by contacting the Firm’s Chief Compliance Officer at (212) 551 -1600. The Firm has retained a third party service provider to facilitate its submission of claims in class actions involving securities held by Funds that have given the Firm the authority to do so.