1. Success Stories of Globalization in Korean Pharma

2. Contents I. Current Status of Korean Pharma
II. Strategies for the Global Market Entry
III. A Success Case : LG Life Sciences

3. I. Current Status of Korean Pharma

4. Korean pharma industry
Size
Market: $7B (~ 1% of the global market)
No. of KGMP-compliant pharmaceutical companies : 270
85% of these are small-cap companies with less than $10M in revenue
Product focus
Mostly generics and in-licensed products
Lack of proprietary global product
R&D
Small R&D expenditure compared to advanced countries
Lack of innovation in R&D
No. of new drugs approved in Korea : 11 (KFDA), 1 (US FDA)
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5. Increased needs for the entry into the new market
Recent environmental changes and challenges
Separation of Dispensary from Medical Practice (’00.8)
Increase in imports : $1.8B (’99)  $3.7B (’04)
Increased market share by MNCs: 10% (’99) → 30% (’04)
Korea - US FTA Negotiations
Adoption of a Positive Listing System
Increased needs for the entry into the new market
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6. II. Strategies for the Global Market Entry

7. Requirements for the global development
CAPABILITIES
RESOURCES
Clinical development
Regulatory affairs
Marketing infrastructure
Manufacturing facilities
Long development time
High development cost
Sharing the development risks through strategic alliances
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8. Strategic alliances
Maximize the value of the product through partner’s expertise
Research, clinical development and regulatory affairs
Marketing and manufacturing infrastructure
Lower the R&D risks by sharing the expenses & resources
Build internal capability and expertise through partnership
Research, clinical development and marketing
Profit
Short term : milestones & royalty
Long term : global market entry by co-promotion
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9. License-out by domestic pharmas
Since early ’90s over 25 licensing deals were closed between domestic and global pharmas
Year
Company
Partner
Country
Product
’97. 07
LG Life Sciences
Warner Lambert US
Anti-coagulant
’99. 11
Dong-A
Stiefel
NSAID
’00. 10
Yuhan
SKB UK
Anti-ulcer
’00. 11 SK
J&J
Anti-depressant
’02. 11
GeneSoft
Antibiotics
’04. 02
Pacific Pharm.
Schwarz
Germany
Painkiller
Source : KDRA, 2004
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10. III. A Success Case : LG Life Sciences

11. Key milestones
LG Life Sciences has been the leading player in paving the way in Korean pharmaceutical industry
Initiation of biotech research (1983)
First launch of biopharmaceuticals (Intermax™-①) in Korea (1990)
Approval of FACTIVE™② from US FDA (2003)
Approval of Valtropin™③ from EMEA④ (2006)
① Intermax-g (recombinant interferon-g)
② Factive : Quinolone antibiotics approved for the used against pneumonia and bronchitis
③ Valtropin (recombinant human growth hormone)
④ EMEA (European Agency for the Evaluation of Medical Products)
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12. R&D Focus Bio-Pharmaceuticals New Chemical Entities
Equipped with key functions for lead discovery and optimization
Increased focus on metabolic disease and liver disease
Efficiency and speed
Accumulated expertise through development and launching of key products recombinant human growth hormone, hepatitis B vaccine, interferon a, erythropoietin
Proprietary formulation technologies
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13. Global market entry through strategic alliances with major pharmas
R&D strategies
Global market entry through strategic alliances with major pharmas
Research
Preclinical
Clinical
Regulatory
Global
Market
LG Life Sciences
Partners
Innovation
Speed
Focused therapeutic area
Distinguished product pipelines
Expertise : clinical development, RA
Marketing & sales
infrastructure
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14. History of Alliances
LB20304a, Novel Fluoroquinolone
LB30057, Oral Thrombin Inhibitor
Biogeneric Drugs
LB71350, HIV infection
1997
Anti-viral Research Program
1998
Anti-cancer Research Program
2000
Anti-obesity/Anti-hyperlipidemia
2001
Factive™, Novel Fluoroquinolone
2002
LB80380, HBV infection
2004
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15. Products ① Factive TM Factive TM : A novel quinolone antibiotics
Korea’s 1st FDA approved drug
Out-licensed to SmithKline Beecham after Phase I
Marketing alliance with GeneSoft (now Oscient) for US & EU market
Research
Initiated
NDA
Filed (’99)
FDA
Approval (’03)
US launch
Phase I LG
GSK
OSCIENT
1991
1997
2002
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16. 11/14

17. ② EutropinTM / ValtropinTM
Recombinant human growth hormone
Indication: Growth hormone deficiency
Co-development in alliance with BioPartners (Switzerland)
First recombinant hormone in Korea
Market Leader (M/S >65%)
Domestic
Approved in Europe (May, 2006)
2nd biogenerics to receive an approval
Approval from US FDA expected (4Q, 2006)
Overseas
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18. Globalization through utilization of the core technology
③ SR-hGH
SR② Technology
SR-hGH
hGH①
Once weekly injection
↑ patient compliance due
to lower frequency of
injection
Multinational Phase 3 trial
Once a day injection
Globalization through utilization of the core technology
① hGH : human growth hormone
② SR : Sustained-Release
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19. Lessons R&D Network Competency Focused research
Establishment of efficient R&D process
More focus on increasing the effectiveness of R&D
Building distinguished product pipelines
R&D
Global market entry through strategic alliances
Active investment into areas of innovation
Building networks with complementary organizations (ventures, academia...)
Network
Identification and strengthening of the core competency
Procurement of global competitiveness
Establishment of development infrastructure (clinical, regulatory...)
Competency
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20. Thank You LG Life Sciences, Ltd. 20, Yoido-dong, Youngdungpo-gu,
Seoul, , Korea