Why Generic Companies should enter the Innovator Space

1. Why Generic Companies should enter the Innovator Space Dr. Brian W Tempest www.briantempest.com The Global Generic Summit – Barcelona, Spain 5th March 2009

2. Asia’s Share of World GDP (at PPP)

3. Asia the Answer for Development Costs Early discovery leads from USA, Europe or Singapore Molecular optimisation from India Toxicology from China, Central Europe, Singapore Electronic Data Capture India API Manufacture India Drug Formulation Manufacture India, USA Phase 1 Clinical Trials Europe Phase 2,3 heavy use of India Corporate back office India

4. Indian Companies feel Confident..

5. ..in a Global Match with USA & China

6. Economic Deregulation source IMF, World Bank

7. The Rise of the Indian Middle Class

8. Leveraging of Indian Companies

9. Innovation & BRICs

10. Filings with a Chinese or Indian Inventor

11. Pfizer Productivity Plans in 2004

12. Pfizer Outsourcing Year Plants R&D% Man O/s 2004A 78 15 8% 2007A 57 10 17% 2009E 44 30% Source May 2008 Citigroup

13. Discovery Services in India

14. Manufacturing Units in India

15. CTs Worldwide source NIH

16. CT Recruitment Attractiveness index

17. Speed of Clinical Trials in India EUIndia Patients 85 650 Sites 22 5 Time 36m 18m Neck Cancer CT • In 2007 Pfizer carried out 44 CTs at 143 sites in India involving 1800 patients in oncology, infectious diseases, CVS, psychiatry, respiratory and metabolic diseases . On par with China. Source Dr Mattina President R&D • No. of USA investigators: 20012006 26,000 18,000 • 300 patients, 30 sites $5.6m EU/USA vs. $ 1.8m plus 30% faster at $800K per day savings Sources: CT Outsourcing Conference, 24th July 2007, Mumbai

18. Electronic Data Capture in India 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” % Trials in EDC 2005 2007 25% 45% Savings Paper EDC $2.8m $ 0.5m 2004 data Sources: CT Outsourcing Conference, 24th July 2007, Mumbai

19. Toxicology in India

20. A Global Deal on Different IP Regions USD Per Capita Expenditure on Healthcare 2002 USA Brazil Thai China India Sources: World Health Report 2005

21. 16 Indian Healthcare Companies • Sales Growth 2Q +30% , 3Q +28% • CRAMS focused companies perform best • Higher regulatory filings continue • China supplies reverted to normal cost levels • M&A activity continues in Europe, Japan, Latam • Citigroup sees best as Cadila, Cipla, Lupin, Piramal

22. The Real Patent Issues in India • In 2007/8 35,000 patents were filed • By Dec 2008 11,500 patents pending & 15,000 granted • By March 2009 45,000 more patents filed • Ranked 11th in World Patent filings • 3rd in PCT filings after S Korea & China • In 2008 number of patent examiners fell from 150 to 118 with 318 vacancies • Lack of patent training institutions • Patent office now hiring 1500 staff

23. PCT Filings from Asia in 2006 Huawei - China LG – S Korea Samsung – S Korea LG – S Korea Elec Telecom – S Korea 2TE – China STR – Singapore Ranbaxy – India CSIR – India NHN – S Korea

24. Different Global Generic Market Sizes $b

25. Emerging Markets $b Novartis Presentation

26. 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 …” Frances Cloud Nomura September 14 2007

27. Downsides to the Asian Scenario

28. Potential Challenge – Infrastructure

29. Access to Renewable Water

30. Indian Beaurocracies -a Civil Servant’s office in Patra, India

31. In Summary Asia is an answer to lower development costs Generic Companies are interested in Innovation Big Pharma Companies are interested in BRICs India is particularly strong in Innovation & CTs CRAMS Indian Companies are more profitable Branded generics are allied to NCE Promotion

32. Thank You