Hale & Tempest

Strategic Changes in the Global Pharmaceutical Market

Dr. Brian W Tempest

www.briantempest.com

Zurich, Switzerland October 2011

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Dr Brian Tempest advises Companies, Banks, High Net Worth Individuals and Investment Funds on their Strategy in the Emerging World based on his wide experience in China, Japan, South East Asia

and India where he has lived for the last decade.Brian has 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 40 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 sessions at Investor Meetings held around the world.

He is now Independent Chairman of Religare Capital Markets PLC and Non Executive Director of SRL the largest Indian Diagnostic Company. Brian is an international advisor to MAPE, India and the United Nations (UNCTAD) in addition to being a member of the SCRIP Global awards panel he is on the Editorial Board of the Journal of Generic Medicines. Brian speaks at global conferences and more

information on these presentations can be found on his website 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 which ranks 4 th in the 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 now Chairman and Senior Partner of Hale & Tempest

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Generic Medicines are part of the Solution for Ageing Populations

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China/India with 37% population, 14% of wealth and most of the GDP growth

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Structural Change -

Big Pharma

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Only 21 2010 FDA New Drug Approvals Source: Fiercebiotech 22 Jan 2011

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USA DOJ Fines on Big PharmaSource: Chemistry World Jan 2011

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USA Batch RecallsSource: Deutche Bank 29 March 2011

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Approvals & Reimbursements Source: Pharmatimes UK July-August 2010

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Big Pharma Losing to Local Players Source GSK Presentation

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Emerging World Share of PharmaSource EIU, OECD, WHO, IMS, Roland Berger

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Top 8 Cos in Emerging Markets 2008

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Increasing Pace of Emerging Markets Acquisitions

Emerging Market Investor Days

March 16, 2010

December 10, 2009

July 2, 2009

Large Cap Pharma Entering Generics

(Egypt, Pakistan, Near East )

(MENA, LatAm, Asia-Pac)(Algeria)

With the slow-down of Western markets, Pharma are rapidly repositioning to focus on emerging markets for growth

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Sales Force Job Cuts in Press since 2009

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Structural Change

Generic Companies

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Asia vs. the Western Generic CompaniesSource: Factset, Religare

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Pricing PressuresSource: Watson

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European Generic Prices Source Ranbaxy

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European Generic Prices Source Ranbaxy

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USA - ANDA Growing Approval TimesSource FDA Chief M Hamburg, GpHA Conference February 2010

2005 16.3 months average

2009 26.7 months average

Around 2000 ANDAs awaiting approval

FDA explained as a result of staff shortages

Regulatory filing fees needed

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Season of Warning Letters/Import AlertsSource: Deutche Bank July 2011

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USA - Litigation Success Rates Source RBC Capital Markets January 15 2010

Patent Challenges on rise - 65 FTFs in 2009 Success rate at 48% - or 76% including deals 3 courts hold 69% with 36% success e.g. NJ 4 courts never ruled against generics e.g. NY At risk launches on the rise – 6 in 2009 Teva has 12 of the 28 at risk launches – 2002/9 Settlements on the rise – 54 in 2009 Teva accounts for a third of all settlements Authorized generics on the rise – 25 in 2009 Watson represents a fifth of all AGs

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Generic Profit Margin Profile in descending order source: Deutsche Bank July 2010

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Top 25 Global Generic CompaniesSource: Generics Bulletin 10 June 2011

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Next 24 Global Generic CompaniesSource: Generics Bulletin 10 June 2011

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Patent Expiries Source: Sandoz

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In 2016 Top 10 8 will be Biologic/RespSource: Sandoz EGA Conference 2011

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Structural Changes

Indian Pharma Companies

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WHO Pre Qualified Products

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Indian Generic FDA ANDA Approvals

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Niche TechnologySource: MAPE

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India – Share of CRAMS Market

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Lots of Opportunity for CROs in IndiaSource: clinicaltrials.gov 16 Feb 2011

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Macro Structural Changes

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Pfizer & Hisun

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Pharma Wholesaler sets up China JV UK Coop – the world’s largest consumer cooperative

GBP£10b UK company running food stores, banks, insurance, funeral

homes, travel agents, farms and pharmacies 3rd rank pharmacy chain in UK with 800 stores Owns UK pharmaceutical wholesaler Sants Opus Marketing JV with Day Lewis Pharmacy

Chain offers 113 products under Prospect brand Tianjin Tasly Sants Manufacturing JV opened

2010, “production under way” Jun 2011 With Investment GBP£20m, 200 staff

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China Pharma Industry Capex PlansSource: Stravencom

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India Pharma Industry Capex PlansSource: MAPE

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FDA DMFs from India

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FDA DMFs from China

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Chinese ANDAs

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Endangered Elements Source: Chemistry World 2011

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A New World Order is Coming

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Thank Youbrian.tempest@clara.co.uk

www.briantempest.com