NEW PRODUCT DEVELOPMENT FINAL PRESENTATION ML March 2006

LAVIPHARM S.A. Headquarters: Peania, Attica

L.ppt LAVIPHARM SA-ACTIVITIES STRUCTURE PRODUCTION Lavipharm S.A. Liquids Solids (tablets, capsules) Transdermals Epidermals Creams, Emulsions Shampoos, Lotions MARKETING & SALES Lavipharm Hellas Ethical OTC Castalia Laboratoires Dermatologiques Dermocosmetics LOGISTICS Pharma Logistics Logistics Service Provider for the Group Companies and Third Parties WHOLESALING LAS # 1 Pharmaceutical Wholesaler RETAILING Pharma PLUS Franchise Provision of complete services to pharmacy clients

MARKETING & SALES ACTIVITY Five separate sales forces intensely visit over 13,000 doctors and 4,000 pharmacies all over Greece. Approximately 120 marketing, sales and medical reps from different business units deal with pharmacists on a daily basis offering a full spectrum of services ranging from the promotion and sale of products to the organisation, training and follow up of the pharmacist and his/her business unit.

DERMOCOSMETIC DIVISION Promoted to Dermatologists Sold Exclusively in Pharmacies Not advertised

OUR PHILOSOPHY: “ WE RESPECT THE PHYSIOLOGY OF THE EPIDERMIS ”  We develop products that perform their intended action while maintaining the balance of the epidermis. OUR VALUES: SAFETY AND EFFICACY  We carefully select safe, highly effective, and dermatologically proven ingredients to develop innovative formulae.  We perform hypoallergenic and non-comedogenic tests  We conduct clinical and laboratory studies  We manufacture our products according to the current European Legislation regarding production, packaging, quality control and quality Assurance (GMP) OUR PRODUCTS: HEALTH & BEAUTY care  Castalia cosmetic products combine efficacy and safety with pleasant use. They are specifically designed to treat and enhance the healthy appearance of the skin.

 SENSIAL: Intense hydration and soothing for the dehydrated, dry or atopic skin  CHRONODERM: Intense anti-wrinkle and repair care with Retinol for the face and the eye area  DERMOPUR: Intense care for oily or acne prone skin  HELIODERM: Effective solar protection  ECLIPSIS: Preventive and repairing action against photoaging

CHANGE IN THE DIRECTION OF EARTH’S AXIS FOLLOWING COMET CRASH

Gate 4 Stage 1 Post Launch Review Discovery Stage Gate Process Stage 5Stage 2Stage 3Stage 4 Gate 5 Gate 2 Gate 1 Gate 3 Ideation Create Idea Bank Assign Coordiinator Idea Screen against broad criteria Scoping Preliminary Assessment: Market Technical Financial Second Screen Technical Legal Sales/Mktg involved Payback period Business Case (Detailed Inves) Product Concept Competition Technical Evaluation Project Plan Third Screen Decision to spend Confirm Case Development Quality execution Product development Prototype Testing Customer feedback Forth Screen Review execution Revised financials go to test Testing Extensive validation In-house tests Customer acceptance Revised financials Fifth Screen Testing properly executed Financial return Implement approval Launch Gate 1 Stage 1 Gate 2 Stage 2 Gate 3 R&D Development Discovery

DISCOVERY Idea Generation  Create a “bank Idea” over a period of time  Consultants / Medical advisory board  Sales Force & Distributors Market and product feedback Brainstorming  Build in voice-of-customer through surveys & focus group (derms, pharnacists & consumers  Atend trade shows - new trends/opportunities on new ingredients, delivery systems, packaging  Research Web/Library/Periodicals/Journals  How to improve existing product line  Analyse competitors to offer better value  Use Funnel model and try to expand it  NPD coordinator * Future trend: “broad audience input”? Gate 1 Idea Screen  Is the idea aligned with the company’s mission, goals and philosophy?  Is the market attractive (size, growth, and opportunities)?  Does the idea offer competitive advantage over competitors?  Does the company have expertise to manufacture the product?  Are there any killer variables (patents, registration, legal issues)?

SCOPING  Concept: Preliminary Market Assessment (size, potential, acceptance, competitors) - Internet/library search - Focus group - Concept test - User test  Feasibility: Preliminary Technical Assessment - Define product requirements/specifications - Assess technical feasibility and determine whether the product can be produce internally - Determine time/cost to execute - Analyse technical, regulatory risks Gate 2 Second Screen Using the information of Stage 1 we will respond to the same questions we asked in Gate 1: Is the idea aligned with the company’s mission, goals and philosophy? Is the market attractive (size, growth, and opportunities)? Does the idea offer competitive advantage over competitors? Does the company have expertise to manufacture the product? Are there any killer variables (patents, registration, legal issues)? Evaluate R&D’s final “stage gate proposal” We will also perform a quick and simple financial calculation (e.g. break even) Stage 1 Scoping

BUSINESS CASE  Define Target Market - Product Concept/ Positioning Strategy - Benefits to be delivered / value proposition - Desired features, attributes, requirements and specifications  Competitive Analysis - SWOT  Concept Testing - Present to customes proposed new product, gauge reactions and determine acceptance  Technical Appraisal (quick and dirty) - Manufacturability / cost to manufacture - Detailed legal, patent, and regulatory assessment. - Investment review Determine Project leader and cross functional groups  Create a business Plan - marketing and financial analysis -Agree on Product Definition and develop -Project justification and detailed plan Gate 3 Go to Development / “to a real spending”  Were all activities in Stage 2 undertaken?  Go over stage 2 criteria  Financial analysis  Approval of development, marketing and preliminary operations plans by managment  Project leader and functional groups assigned / duties designated Stage 2 Building Business Case - Critical Homework

DEVELOPMENT  Implementation of Development plan  Undertake lab tests, in-house tests and alpha tests  Revise financial analysis with update information  Parallel Marketing operations activities (market analysis, customer feedback  Project leader effectively coordinates cross functional groups Gate 4 Go to Testing  Is product development progressing as set in G3?  Is the product still attractive to the market?  Revision of financial analysis using updated data  Selection and approval of the test / validation plans to be used in Stage 4  Review marketing and operations plan Stage 3 Development

TESTING & VALIDATION  Carry out an extensive validation of the entire project  Implement in-house product tests (stability)  Run clinical studies (University, Laboratories) for product efficacy and safety  Pilot production  Customer acceptance - Realize field trials of the product - pretest market, test market, or trial sell  Revised business and financial analysis to check on the continued business and economic viability of the project  Meet with Ad and PR agency Gate 5 Go to Launch / Last chance to kill the project  Was the testing & validation activities reliable and credible?  Expected financial return?  Operations and marketing plans review Stage 4 Testing & Validation

LAUNCH & POST LAUNCH  Implement marketing launch plan - Distribution - Promotion / PR / Communications approx 6 months prior to launch - Appropriate resources  Review project and product performance  Gauge performance by comparing actual with expected revenues, costs, expenditures, profits and timing  % of demographics reached?  Post-audit: Project’s strengths and weaknesses, things learnt for future projects Stage 5 Launch Post-Launch Review Time to learn