1. Reflections on the Global Generic Pharmaceuticals Market place Dr. Brian W Tempest www.briantempest.com CII Pharma Summit Mumbai Thursday November 1 st 2007

2. DR. BRIAN W. TEMPEST CSci, CChem, MRSC, BSc, PhD Dr. Brian Tempest has worked in the pharma industry for the last 36 years. During this time he has worked for several pharma majors, including Glaxo & Searle, around the world and joined Ranbaxy 12 years ago. During this period Ranbaxy has transformed from a small company focused on the India domestic market, to a top 10 global generic company. Dr. Tempest has lived in New Delhi, India for the last 8 years, and has been President, Managing Director & Chief Executive Officer and, until recently, the Chief Mentor & Executive Vice Chairman of the Board. Dr. Tempest retired from Ranbaxy in December 2007, when he reached 60. Dr. Tempest is one of a few westerners to have held a leadership position in an Indian blue chip MNC, and has an unusual insight into India. Dr Tempest is also a Honorary Professor of the Management School at Lancaster University, UK, and he sits on the Editorial Board of the Journal of Generic Medicines and on the Advisory Board of the India Fund held by JM Financial Investment Managers Ltd in Mumbai. Dr. Tempest is exclusively supplied by ‘Hale & Tempest Co. Ltd’ brian.tempest@gmail.combrian.tempest@gmail.com / brian.tempest@clara.co.ukbrian.tempest@clara.co.uk Mobile +91-98100-91192 / Tel:+44 1753 864 616

3. Asia on the Rise Source – FT

4. The Global Challenge from Asia

5. The Asian Race to Prosperity

6. Reflections  Market drivers  Competition is rising  Branded generics  IP changes in USA & India  M&A and Private Equity  East-West Alliances

7. The Productivity Advantage Indiaa usa Pharma view USA 1 chemist Better education x 1.3 1 chemist 70 hours/week Longer working time x 1.3 50 hours/week $ 800 monthly Lower cost x 20 $ 12,000 monthly Sources: IPHMR Conferences, New Delhi August 2004

8. The Education Advantage

9. Sources: Goldman Sachs 2007 Top 5 Global Pharmaceutical Markets 2020 RankCountrySize 1. 2. 3. 4. 5. USA China Japan France India $ 475b $ 125b $ 61b $ 51b $ 43b

10. Sources: AXA Framlington Company Expiry 2010 Expiry 2012 Expiry 2011 PfizerAricept - $800mLipitor - $12.1bn Xalatan - $1.6bn Viagra - $1.7bn Detrol - $860m Geodon - $1.1bn Astra ZenecaArimidex - $2.2bnSeroquel - $4.7bnSymbicort - $3.7bn Sanofi-AventisTaxotere - $2bnUS Plavix - $3.8bn Avapro - $2.1bn Lovenox - $3.1bn BMSUS Plavix - $4.8bn Avapro - $1.3bn Abilify - $2.1bn GSKAdvair - $3.8bnAvandia - $2.5bn Patent Expiry Dates 41% 38% 34% 30% 23% % at Risk

11. 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

12. Generics – API’s USA DMF filings by India % Share of USA DMF filings India China 2004 27% 9% 2005 37% 10% 2006 44% 14% Q1’07 48% 17% Source: US FDA / J P Morgan, 2 may 2007 Source: US FDA, Credit Suisse India China 2004 18748 2005 25287 2006 357128 Source: US FDA / J P Morgan, 6 th August 2006

13. - One in every four ANDAs filed by Indian Companies in top USA FDA filers Source: KPMG - First Chinese generic company has received tentative FDA approval Generics - ANDAs 24 46 64 144 ANDA Filings in USA by Indian Companies 250

14. R&D Productivity is Falling

15. Global Pharmaceuticals Sales Trends

16. Global Pharmaceuticals Equity Trends

17. Speed of Clinical Trials in India EU India Patients 85650 Sites 225 Time 36m18m Neck Cancer CT Plan Actual Patients 100130 Sites 109 Time 5m2.5m Overactive bladder CT  300 patients, 30 sites $5.6m EU/USA vs $ 1.8m plus 30% faster at $800K per day savings  No. of USA investigators: 2001 - 2006 26,000 18,000 Sources: CT Outsourcing Conference, 24 th July 2007, Mumbai

18. Electronic Data Capture in India % Trials in EDC 2005 2007 25% 45% Savings Paper EDC $2.8m $ 0.5m 2004 data Sources: CT Outsourcing Conference, 24 th July 2007, Mumbai Accuracy - 300 GSK Staff - 2.2m Clinical Data sheets - 450 Trials - No data security issues - Error rate <0.01 / 100k Source: BCG report “Looking Eastward, Sept’2006”

19. 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 the Middle East and North Africa region” Frances Cloud Nomura September 14 2007

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

21. Ranbaxy 2006 Sales by Geography $ 1.34b

22. Ranbaxy H1 2007 Sales by Market

23. IP – USA Pendulum “A key USA Supreme Court ruling KSR VS Teleflex led to Pharmaceutical patents being more easily challenged on the grounds of obviousness, a ruling which immediately came into play when J&J & Merck had a US patent for Pepcid Complete (Famotodine) found to be obvious”. Scrip, July 6 th 2007, p3 The full beneficial impact of this ruling on the generic industry is yet to be seen eg Sanofi-Aventis Ramipril was invalidated as obvious by Lupin in September 2007.

24. Bilateral FTAs - USA Pendulum  Democrats now chairing Committees- Ways & Means  USTR legally required to work within TRIPS  USA has been incorporating TRIPS PLUS IP protection into bilateral free trade agreements  Corrections to bilateral trade agreements eg Peru, Columbia, Panama FTAs TRIPS  Basic product patent  Data protection TRIPS PLUS + Data exclusivity + New forms, isomers etc + New Indications + New Combinations

25. Should IP be the same across all Countries? USAThaiChinaIndiaBrazil USD Sources: World Health Report 2005 Per Capita Expenditure on Healthcare 2002

26. Enforcement versus Evergreening in Developing Countries India IP 02/03 06//07 Filed 11466 28882 Examined 9538 14119 Granted 1379 7359 - 140 patent examiners 2007 - 600 more planned - Attrition an issue - Weekly patent journal - IP Appellate Court Source: Business Standard, 16 th Aug’2007 1995 – 2005 FDA cleared 327 drugs 95% pre 1995 – before WTO deal 16 basic patent molecules possible However 9000 Pharma applications - for evergreen changes - for new indications Source: Gopa Kumar “Centre for Trade & Development, Delhi”

27. PE Deals in Asia (ex-Japan) in H1 2007 CountryNo. of dealsSum Invested - $m China1031489 India901369 Hong Kong5186 Australia2671 Taiwan633 S.Korea3029 Thailand229 Singapore416 New Zealand93 Total2783233 Sources: Thomson Financial

28. PE Investment in India is rising

29. Potential Challenge - Currency Volatility

30. The Tempest Crystal Ball India will continue to be a Key Driver in the Global Generic Industry Competition is rising – Post TRIPs Indian companies will evolve Discovery companies will continue to be attracted to India for CT, EDC, MO. China will be perceived to be stronger in biology/ toxicology IP changes in US & India will slowly favor Generics Alliances between Western Biotech and Asians companies will expand. M&A PE deals will grow How to use Asia will become the key opportunity

31. - Assumes GDP growth of 7.3% for next 20 years with no profound shift in economic policy Sources: McKinsey Quarterly, 3 rd November 2007 The rise of the Indian Middle Class Annual Income< Rs. 90kRs. 90 k - Rs.2L> Rs. 2L 1985 A 1995 A 2005 E 2015 F 2025 F 702 m 742 m 598 m 447 m 314 m 45 m 167 m 454 m 550 m 514 m 8 m 19 m 55 m 281 m 600 m

32. Asia economic strength is returning to levels seen in the past Many advantages for India with some challenges India is a global strategic asset for developed markets India is a rich location for R&D alliances and CT outsourcing MNCs will dip in & out of India & China South East Asian economies will be driven by India & China Japan will continue to represent a huge share of global wealth “China & India represent the future of Asia and quite possibly the future for the global economy” – Steve Roach, Morgan Stanley Summary

33. Thank You