1. Hale & Tempest Biosimilars in Developing Countries: Key Issues Dr. Brian W Tempest Editor, Journal of Generic Medicines www.briantempest.com Bangladesh University of Health Services Dhaka, Bangladesh 5 October 2015

2. Hale & Tempest Dr Brian Tempest advises Companies, Banks, High Net Worth Individuals and Mutual Funds on their Strategy in the Emerging World based on his wide experience in China, Japan and India. Brian is the Editor of the Journal of Generic Medicines and represents the global generic industry as a Non Executive Director on the United Nations Patent Pool. Previously he worked for Ranbaxy Laboratories since 1995 holding the position of Managing Director and Chief Executive Officer until 2005. He was then Chief Mentor and Non Executive Director until 2008 when he retired. He is one of the few westerners to have led a Sensex Nifty 50 Indian blue Chip MNC and as a result has a valuable insight into India. Brian has also worked for Glaxo as Regional Director Far East and Regional Director Middle East & Africa from 1985 to 1992. Brian has worked in the Pharmaceutical Industry for the last 44 years and has managed Healthcare businesses in North America, South America, Europe, Africa, Middle East, Australasia, China, Japan and India. He has also led many Investor Meetings held around the world from Tokyo to Las Vegas. He is now a Non Executive Director of Religare Capital Markets, Fortis Healthcare, SRL Diagnostics and Glenmark Pharmaceuticals. He is a member of the SCRIP Global awards panel. Brian speaks at global conferences and more information on these presentations can be found on his website www.briantempest.com. He is also an international advisor to UNCTAD and MAPE www.briantempest.com Brian has a PhD in Polymer Chemistry from Lancaster University in 1971 and in 2009 he became Chairman of the Advisory Board for the Lancaster University Management School, UK. He is a Fellow of the Royal Society of Medicine and a Fellow of the Royal Society of Chemistry and is a Chartered Chemist. He is also Executive Chairman of Hale & Tempest Co Ltd

3. Hale & Tempest Biosimilars, Biologics - Which Way?

4. Hale & Tempest USA FDA NME Approvals Doubling source: Evaluate July 2015

5. Hale & Tempest In 2016, Biologics will be Half the Top 20 Source: Cowen

6. Hale & Tempest USA Medicines getting More Expensive source: Evaluate 2014

7. Hale & Tempest USA Healthcare Costs source: thinkprogress.org/health./

8. Hale & Tempest Japan Drug Price Increases source: Evaluate 2015

9. Hale & Tempest Blockbuster Biologic Patented Products source: Bio Plan Associates April 2015 $m

10. Hale & Tempest 40% Brazil Hospital Contract Sales 2014 source: Evaluate August 2015

11. Hale & Tempest Big Pharma Profit Margins from Biologics source: Fiscal Year 2011 Roche 2014

12. Hale & Tempest By 2020, Patent Expiries 40% Biologics source: Evaluate 2014, EGA June 2015

13. Hale & Tempest Developing World - India Disease Profile source: Planning Commission India, Gyan Research 2014

14. Hale & Tempest Rising Cancer Drug Spending source: FT 3 June 2015

15. Hale & Tempest Biosimilar Global Sales Estimates source: PhillipCapital September 2015

16. Hale & Tempest Three Waves of Biosimilars source: SG EGA conference 2013

17. Hale & Tempest Access in EU Improving from Biosimilars source: IMS December 2011

18. Hale & Tempest S Korea, Celltrion Manufacturing Facility source: Celltrion website, 140,000L expanding to 230,000L capacity

19. Hale & Tempest Pfizer Biosimilars source: Pfizer presentation January 2015

20. Hale & Tempest Biosimilar $50m loan source: Generics Bulletin June 2015

21. Hale & Tempest Global Biosimilars source: brian tempest research 1 September 2015 Celltrion from South Korea with 2 brands/huge capacity Samsung Biopsis from South Korea with 2 brands Novartis/Sandoz Pfizer Amgen/Actavis/Allergan Innovator with authorised generic now 10 th brand and beyond India - DRL, Intas, Zydus, Hetero, Cipla, Emcure, Biocon Europe – Polpharma, Biocad, E Merck USA - Epirus, Harvest Moon Latam –Bionovis, China – FosunPharma, Gen Sci etc Asia – Incepta Biotech, Kalbe, Hanwha Chemical

22. Hale & Tempest Biosimilar Prices in Norway source: Steiner Madsen June 2015, EGA June 2015

23. Hale & Tempest France Biosimilar Pricing -45% source: Generics Bulletin 10 July 2015

24. Hale & Tempest New Japanese Biosimilar Company source: Fujifilm

25. Hale & Tempest Biologic/Biosimilar Contract Plants source: Roots Analysis 18 June 2015 About 160 CMOs making biologics and biosimilars Leaders are Lonza, BI & Fujifilm-Diosynth From India, Kemwell Biopharma & Shasun Pharma From China, WuxiAppTec For proteins and monoclonal antibodies 70% offer clinical & manufacturing services An excess global capacity for biosimilars is available 80 are located in USA & 20 in EU with multiple sites

26. Hale & Tempest Biosimilars EU Manufacturing Sites source: EGA June 2015

27. Hale & Tempest Eight Hurdles with Biosimilars source: Brian Tempest Research September 2015 Cost of manufacturing facility, $50/$100m Cost of clinical trials including innovator costs, $2/$5m Cost of teams of sales reps to call on doctors Strong interface between patent holders and patients Doctor anxiety on changing therapy for very ill patients Multiple competitors in biosimilars, prices -45% to -71% Pharmacy interchangeability with patented medicine Break even on investment

28. Hale & Tempest Sandoz Business Model by an Analyst source: Pharmacloud June 2012

29. Hale & Tempest Alternative Biosimilar Strategy: the IBs source: Roots Analysis 18 June 2015 Non Tyrosine Kinase Inhibitors – IBs Small molecule manufacturing assets required Future therapy targeted at cancer Latest blockbusters is Nexavar (sorafenib) Seven other IBs launched on the market Pipeline is rich with 140 IBs under development Combination therapies will be the main driver

30. Hale & Tempest Bangladesh Opportunity, LDC Countries

31. Hale & Tempest Bangladesh Opportunity, Energy Costs source: BAPI

32. Hale & Tempest Strengths of Manufacturing Biosimilars in Developing Countries  Huge Financial Savings  In 2016 11 out of top 20 pharma products will be biologics  Access by the poor people to these valuable products

33. Hale & Tempest Weaknesses of Manufacturing Biosimilar in Developing Countries  Up front investment between $100m and $200m  It takes many years before the products will be available  Existing small molecule pharmaceutical manufacturing assets are unlikely to be relevant  Variation in the nomenclature and regulatory pathway around the world

34. Hale & Tempest Opportunities of Manufacturing Biosimilars in Developing Countries  Will allow independence from other countries for their complex, valuable medicines  Once in the monoclonal segment other monoclonal antibodies will follow  Substitution by the pharmacist should be allowed by local laws to encourage access

35. Hale & Tempest Threats of Manufacturing Biosimilars in Developing Countries  12 year rate of return with a huge investment  Innovator companies are very protective  Many global alliances between many companies - a single country model difficult  There will be great competition – cost issue  A team of expensive salesmen will be needed  Doctors don’t like changing ill patients over  Price cuts could be larger than expected at 45%-70%

36. Hale & Tempest Some Recommendations for Developing Countries considering Biosimilars  Use existing, working regulatory pathways  Manufacturing may be based on Regional Clusters or Private Public Partnerships  Product substitution by pharmacists should be allowed  Accept that biosimilar generic prices will not fall below a certain level owing to the upfront cost  Nomenclatures of biosimilars should be kept simple  Offer Government financial incentives

37. Hale & Tempest Thank You brian.tempest@clara.co.uk www.briantempest.com