1. BEST PRACTICES, ® LLC Pharmaceutical New Product Planning Role and Activities for Medical Affairs Report Summary Best Practices, LLC

2. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 2 Key Study Objectives  Assess current state of New Product Planning in pharma  Provide overview of New Product Planning activities and timing during development process  Review the main Medical Affairs activities carried out during the development process and drill down on their timing, intended outcomes, and value for the organization  Assess current state of New Product Planning in pharma  Provide overview of New Product Planning activities and timing during development process  Review the main Medical Affairs activities carried out during the development process and drill down on their timing, intended outcomes, and value for the organization Study Objective & Methodology This benchmarking study examines the role and impact of NPP groups on product commercialization efforts in pharmaceutical and biotech companies. It provides reliable benchmarks, observations, and best practice insights to inform and shape executive thinking around the challenges of new product development in Medical Affairs Data was collected using an online survey instrument covering topics related to roles, activities and value. More than a dozen in- depth interviews were conducted with participants to gather more detailed information pertinent to this study. This benchmarking study examines the role and impact of NPP groups on product commercialization efforts in pharmaceutical and biotech companies. It provides reliable benchmarks, observations, and best practice insights to inform and shape executive thinking around the challenges of new product development in Medical Affairs Data was collected using an online survey instrument covering topics related to roles, activities and value. More than a dozen in- depth interviews were conducted with participants to gather more detailed information pertinent to this study. Data for this study was collected utilizing an online survey instrument and over a dozen in-depth qualitative interviews. Twenty-five organizations participated in this study. Research Objective and Methodology

3. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 3 Benchmark Class Data for this study was collected utilizing an online survey instrument and over a dozen in-depth qualitative interviews: 27 participants from 25 organizations participated in this study.

4. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 4 The central challenge is to ensure that the right new products get developed efficiently— with minimum risk and maximum value—to allow senior management to make smart decisions confidently. New Product Planning New Product Planning Bridging the Gap Between R&D and Commercial Interests R&DCOMMERCIAL pipeline marketing clinical patent brands molecules market competition phase I me-too lifecycle commercial pre-clinical co-promotion FDA submission pharmaceutical New Product physicians medical affairs Planning disease state compounds phase II sales development research forecast biotech blockbuster therapeutic area phase III drug “…with pressure on all stakeholders in the pharma industry and the few new drugs that came to the market in recent years, NPP should take on more and more importance in driving what projects to dedicate resources to…”

5. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 5 Key Findings Key Findings Key Activities and Patterns NPP activities generally follow established patterns of drug development. Market planning and research must support meeting development milestones, although the focus of NPP activity must be geared to align development with market potential, not just getting past regulatory hurdles.  More activities are starting early in the process, even in Pre-Clinical stages To ensure that later (costlier) development efforts are devoted to the right commercial targets To enforce the market perspective and marketing discipline as early as possible  Variations in the performance or timing of particular activities usually depend on attributes of the particular drug or therapeutic area Drugs with novel mechanisms of action, for instance, regularly triggered earlier use of KOLs and ad boards, if only to seed the discussion among thought leaders

6. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 6 NPP activities adhere to a fairly common schedule. Some are started in the early stages and continuously refined throughout the development process; others do not start until Phase III. NPP plays only a minor role at some of the benchmarked companies after P3. NPP Shapes Development Activity NPP Shapes Development Activity NPP’s Role Adheres to Common Development Milestones and Guidelines Identify Unmet Medical Need Disease State Evaluation Preliminary Market and Competitive Assessment Target Product Profile Disease State Opportunity Competitive Assessment Market Assessment Generic Naming Draft Launch Label Epidemiology Lifecycle Planning Managed Care Research Patient Flow Ad Boards KOL ID & Mgmt. Med. Meeting Plan. Publication Planning Prelim. Positioning Core Message Development Labeling Healthcare Prof. Segmentation Patient Segmentation Positioning & Pricing Publications Dev. of Brand Trade Naming & Packaging  Preliminary Forecast of Market  TPP with Financial Forecasts and Competitive Profile  Indication Prioritization  Disease Models  Branding, Positioning & Publication Docs  Pricing Schedules Phase II Phase III Phase I Pre-Clinical

7. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 7 Key Findings Key Findings Medical Affairs Activities Medical Affairs should begin with understanding how best to reach the medical community, and this involves identifying KOLs. You must plan well in advance to have a consistent message about your product, and to generate buzz early on based upon what you seek to accomplish. Early Medical Affairs must focus on the theoretical aspects of the drug and engaging with the medical community. Once clinical data is available, Medical Affairs can shift to presenting the facts.Medical Affairs  Identify KOLs as early as possible, preferably in Pre-Clinical To gain a deeper understanding of the medical need To provide insight into how the new drug can fit into the market and what it must accomplish to be considered effective To provide insights on lifecycle management issues as indications become clearer In Phase 1, use input from KOLs to guide clinical trials and establish market-driven endpoints In Phase 2, set up Ad Boards to help guide positioning and messaging to doctors and to provide insight for conducting Phase 3 trials In Phase 3, KOLs should be heavily influencing the clinical trial processes  Manage KOLs in two groups: one to guide the development process and provide insight as data comes back, the other to work more closely with publications and messaging  Branding of the Science, like all marketing activities, must be updated regularly As data comes back about the drug at each phase, focus on positive effects Carefully avoid messages that, with the benefit of new data, could cause a lack of trust among doctors or regulatory agencies

8. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 8 Small Company NPP Groups Often Use Ad Boards Early Half of the Small Pharma Segment NPP groups get involved with advisory boards in Pre-Clinical, while Large Pharma Segment NPP groups get involved more in Phase 1. Smaller companies have a greater need to reach out for support for their development, and this is the primary reason for starting earlier. Many Regional NPP groups however don’t get involved until Phase 3, and there is the possibility that this may impact the effectiveness of reaching advisory boards early on. Advisory Boards Global NPP-SPS Regional NPP-LPS Global NPP-LPS n=10n=8 n=9 Percentage of each segment performing activity at each phase

9. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 9 KOL Management Insight  Pre-Clinical: Use KOL’s to Fill in Expertise Gaps: “We’re a biotech company and so we don’t have expertise in every single disease. So very early on, if we have a discovery, we will bring in experts to tell us where we might want to go if we have a discovery or a product with a mechanism of action. So let’s say we have a mechanism of action against a certain target. Our scientists say this could apply to all kinds of autoimmune diseases or whatever. We’ll bring in experts before we even go forward and get their input on where they think the science will lead us, and sometimes they’ll want to do some studies or they’ll look at our pre-clinical data or they’ll make some suggestions and they’ll help guide us toward what could be our first indications with the product.” Information Shared: “We’ll share all of our pre-clinical data, and whether that’s test tube data...for some indication we have a lot of different kinds of in vitro data, but then any kind of animal data as well.”  Phase 1: Employ KOL’s to Lead Phase 1 Studies: “Quite often those people (KOL’s) also are people that do some of the Phase 1 studies. Not always, but they can help guide on how we’d want to go that direction.”  Phase 2 & 3: Change Roles for Current KOL’s and Add KOL’s as Development Proceeds to Meet Needs: “Some of our KOLs stay with us through the entire process, but their role changes. Then when you get more in the clinic, you try to bring in KOLs that are more savvy on the clinical part of it, and then eventually you want people that are more savvy on the commercial end. We continue to work within our scientific KOLs to say what other indications should we be considering? What investigator-initiated trials, where should we try to take this product, what do you think about a second-generation product, what kinds of things should we be doing to make sure we don’t have any safety issues down the road?”

10. BEST PRACTICES, ® LLC Copyright © Best Practices®, LLC 10 Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning strategies of world-class companies. Best Practices, LLC 6350 Quadrangle Drive, Suite 200 Chapel Hill, NC 27517 (919) 403-0251 bestpractices@best-in-class.com www.best-in-class.com About Best Practices, LLC Link for Report: Pharmaceutical New Product PlanningPharmaceutical New Product Planning