1. SUCCESS FACTORS IN THE PHARMACEUTICAL MARKETPLACE
BRIAN A. MARKISON
Chairman, President and Chief Executive Officer

2. CAREER SUMMARY July 2004 – Present King Pharmaceuticals, Inc.
Chairman, President and Chief Executive Officer
President and Chief Executive Officer
Acting President and Chief Executive Officer
Chief Operating Officer
Bristol-Myers Squibb
President, MBSOV / OTN
President, BMSOV / OTN, DuPont Integration
Vice President, Operational Excellence and Productivity
Senior Vice President, Licensing & External Development
President, Neuroscience, Infectious, Dermatology/Apothecon
U.S. Managed Care
President, Neuroscience / Infectious Disease / Dermatology
Senior Vice President, Neuroscience / Infectious Disease
Vice President, Northeast Sales
Vice Present, Strategy & Economics
General Manager, Netherlands
Vice President, Marketing & Advanced Medical Services
Vice President, Marketing & Business Development
Senior Director, Marketing & Business Development
Director, Marketing & Commercial Development
Group Product Director
Director, Business Development and Planning
Senior Manager, Strategic Planning
Product Manager
Sales Representative, Oncology, Primary Care

3. CRITICAL SUCCESS FACTORS
Focused expertise and resources, “trends” toward a higher probability of success.
Industry metrics for predicting the probabilities associated with each stage of drug development are useful but may not be reliable.
Life cycle management is essential.
Licensing and acquisition talent needs to be “best in class”.
The ability to generate meaningful free cash flow is the ultimate predictor of sustainability.

4. WHAT’S GOING ON IN PHARMA
Intellectual property is under siege.
Managed care and the Government are continuing to exert stronger controls over pricing.
Innovation within Big Pharma is not keeping pace with expectations for growth.
Biotechnology will emerge as the fastest growing segment.
Regulatory environment is increasingly more difficult to navigate.

5. PROJECTED US PHARMA MARKET, 2007-12
Market (US$ billions) % of Healthcare Expenditure
Source: Datamonitor

6. SWOT OF THE US PHARMA MARKET
Strengths
Weaknesses
The world’s largest market due to population
High prices
Highest per capital GDP
Highly litigious market
Strong manufacturing & R&D capabilities
Enormous cost of developing new drugs
Poor R&D pipelines
Opportunities
Threats
Patients and physicians demand best
treatments
Parallel imports from Canada, EU, Israel ‘
• ‘Big Pharma ’
has a poor public image
Increasing cost awareness offers good
Drug safety issues in the wake of Vioxx
opportunities for generic manufacturers
Competition from low cost manufacturing/R&D
companies in India/China
2006 Medicare reform
Forthcoming patent expiries for major drugs

7. BIG PHARMA GROWTH RATES FROM LAUNCHES AND EXPIRIES, 2005–11

8. SELECTED COMPANY GROWTH RATES 2005-2011

9. BLOCKBUSTER US PATENT EXPIRIES 2004-2011

11. CRITICAL SUCCESS FACTORS
1. Focused expertise and use of resources . . .
Research and Development
Therapeutic area(s)
Technology platform(s)
Sales / Marketing / Market Research
Managed Markets
Regulatory
Legal

12. CRITICAL SUCCESS FACTORS
2. Industry metrics for predicting success are useful but may not be reliable.
Preclinical
First human
First approval
decision
dose
First submission
The R&D
Process
Early
Late
Other
Research
Development
Phase II
Development
Phase III-NDA
Activities
Pre
Clinical evaluation -
Target discovery
Lead discovery
Lead optimization
Assay development
clinical evaluation
Duration
(median)
3.4 yrs
1.5 yrs
2.9 yrs
2.0 yrs
1.0 yr
Probability of
Success (%)
≥15%
<35%
<65%
<85%

13. INNOVATION GAP IN PHARMA R&D 1999-2004

14. CRITICAL SUCCESS FACTORS 3. Life cycle management is essential
■ Requires a continuous R&D focus
■ A willingness to invest (even on the down slope)
■ Demands creativity
■ Pediatric exclusivity tends to have the highest NPV associated with any life cycle program

15. CRITICAL SUCCESS FACTORS 4
CRITICAL SUCCESS FACTORS 4. Business Development Talent must be best in class
Companies tend to leverage core capabilities
- however -
Companies are: moving to earlier technologies and even discovery tools looking globally for assets hoping that novel delivery approaches can provide meaningful differentiation

16. CONCLUDING THOUGHTS…
Molecule
R&D
Commercial
Unmet Medical Need

17. CONCLUDING THOUGHTS (CON’T)
If you do not feel passionately about what you do…
Goal achievement becomes less likely
Your personal values and your environmental values (culture) need to resonate.