Hale & Tempest Moving Beyond the Commodity Market: What Future is there in added Value Generics, Niche Products and Biosimilars? Dr. Brian W Tempest 14 th EGA Annual Conference – Paris, France June 3rd 2008

Hale & Tempest

Hale & Tempest Healthcare pressures to 2050

Hale & Tempest Healthcare Reform & Transition is Everywhere

Hale & Tempest Healthcare Reform & Transition is Everywhere

Hale & Tempest Big Pharma R&D Productivity is Falling

Hale & Tempest Big Pharma Sales Concentration...

Hale & Tempest But the Product Pipeline is not with the top 10

Hale & Tempest Big Pharma Generic Exposure

Hale & Tempest A 20- Year Historic Low

Hale & Tempest 45,000 Pharma Jobs

Hale & Tempest double digit growth to single growth focus on 7 developed markets to 7 emerging markets primary care to specialists small molecules to biotech molecules a slump in R&D innovation - the next 5 years being similar $84b patent expiries in 2010, 2011, M&As in 2007 at a value >$50m 15 out of 18 top companies have announced restructuring Big Pharma in Transition

Hale & Tempest Generic Competition is Rising CPHI Attendees, Milan, 2 nd – 4 th Oct’07 1.China467 – 33% 2.India189 – 13% 3.Germany96 4.Italy80 5.USA75 6.UK55 7.France55 8.ROW387 Total1404 As registered on July 25, 2007

Hale & Tempest Generics – USA Filings USA ANDA filings by India % Share of USA DMF filings India China % 9% % 10% % 14% Q1’07 48% 17% Q4’07 48% Source: US FDA / J P Morgan, 2 may 2007 Source: US FDA, Credit Suisse

Hale & Tempest Indian Healthcare’s 1987 Companies

Hale & Tempest Asia roaring Ahead

Hale & Tempest A Recent M&A Success

Hale & Tempest Sources: 1.IMS Midas, March Earth Trend Data Tables % of the world population accounts for only 12% of the Global pharmaceutical sales RegionPharma SalesPopulation North America Europe Japan $255 b 47% $158 b 30% $59 b 11% 332 5% % 128 2% Asia/Africa/Aus Latam 88% $41 b 8% $20 b 4% 18% % 558 9% 12% 82% Worldwide$533 b 100% %

Hale & Tempest Competition is rising, India feels confidant and strong Cost containment in European countries Importance of Branded Generic countries Focus in the hospital Injectables sector Zhejiang Huahai Pharma Co –first tentative ANDA FTC deals in 06/07 at 45 are double 05/06 & 04/05 M&A - 30% of added value from synergy Indian Manufacturing units to double 2010 on 2000 Generics Sector in Transition

Hale & Tempest Germany Reimbursement Uncertainty

Hale & Tempest South Europe Investment

Hale & Tempest Sources: Goldman Sachs 2007 Top 5 Global Pharmaceutical Markets 2020 RankCountrySize USA China Japan France India $ 475b $ 125b $ 61b $ 51b $ 43b

Hale & Tempest Wholesaler Brand Ranked 2 nd in UK

Hale & Tempest Pharmacy Chains

Hale & Tempest KSR vs. Teleflex USA Supreme Court decision USA Bilateral FTAs amended –Columbia, Peru, Panama Compulsory Licensing by Thailand, Canada under WTO German reimbursement review, UK PPRS, Poland, Hungary FDA setting up 5 offices in China & then India, ME, SA,EU Brazil generics booming, Japan generics rising Impact of wholesaler brands and pharmacy chains West Europe vs. Central/East Europe vs. South Europe Pharma Markets in Transition

Hale & Tempest In this Era of Transition there is a Serious Search for Profitable Sectors

Hale & Tempest Impact of Competition on Price

Hale & Tempest Added Value Generics, Niches & Biosimilars  Branded Generics  Recombinant DNA technology/Biosimilars - 20% of CTs  Injectables & Hospitals  OTC - brands last forever  NDDS - once a day technology  Chemistry e.g. hormones, penems, peptides - 5% of CTs  Natural Products - 5% of CTs  Fermentation technology, China power costs- 8% of CTs  Aerosols, Implants, Patches  Para days USA exclusivity/first day EU launches  CRAMS - $24b global market in 2006, $48b in 2010 with India forecasting $1b and $3b share

Hale & Tempest Branded Generics- the analyst’s view  “Branded Generics are the most profitable place to be in generics and there are a few markets with better branded characteristics than those of …” Frances Cloud Nomura September

Hale & Tempest Different Global Generic Market Sizes $bn RegionSandoz 2006 IMS 2008 USA2368 West Europe1419 East Europe13NA Japan33 Latam/Canada103 (Canada only) ROW377 Total100

Hale & Tempest Europe’s largest Branded Generic market

Hale & Tempest Biologics Share of Patent Expiries

Hale & Tempest Biotech Share of Patent Applications

Hale & Tempest Biosimilars Most Companies expect Europe to be the stepping stone to the USA. Clarity on EPO,GCSF, HGH,I with Interferon, LMW Heparin to come Monoclonals next on the agenda USA regulations will not be clear until at least Biosimilars are expected not to be AB rated so field forces will be required for marketing. Generics market size $30b USA & $25b Europe. Indian Companies will be active players. Chinese & Korean Companies are already active. Some Big Pharma Companies are interested in this sector The earlier Biosimilar products may not be as profitable as some forecast owing to hospital discounts. Monoclonals will probably be more profitable. Need to be there

Hale & Tempest Irinotecan – 7 first day launches in USA

Hale & Tempest In Summary Big Pharma, Generics & Pharma Markets are all in Transition - with lots of Change Relatively easy to achieve Generic Sales But Profits and Cash are Challenging Everybody will be looking for profitable niches

Hale & Tempest Thank You