R-Pharm’s approach to innovative partnership December 20, 2010

1. R-Pharm’s approach to innovative partnership December 20, 2010

2. Russian Pharmaceutical Market

3. Russian Pharmaceutical and Medical Equipment Market – Still Quite Small from the Global Prospective 750+ Pharmaceuticals 250+ 3 Med equipment The Ministry of Industry and Trade of RF, 31.08.2009

4. Per Capita Consumption of Pharmaceuticals, 2008-2009 $272 $680 $495 USA JAPAN POLAND PharmExpert, February 2010; CIS Statistics Committee, January 2010

5. Russian Pharmaceutical Market Growth Forecast (retail prices, bln Rbl, VAT incl) Forecast The Ministry of Industry and Trade of RF, 31.08.2009

6. Strategy of the Russian Healthcare Development to 2020: To ensure stable social and economical development One of the state priorities is preservation and improvement of the Russian population’s health based on healthy life style and further increase of accessibility and quality of medical services Major tasks of the Strategy: - population increase up to 145 mln people - life expectancy increase to 75 years - newborn mortality rate decrease to 7,5 to 1,000 (minus 20% from 2007) - maternity mortality rate decrease to 18,6 to 100,000 (minus 15,7% from 2007) - formation of the healthy life style of the Russian population - increase of accessibility and quality of medical services, guaranteed for the population of the Russian Federation www.zdravo2020.ru; The Ministry of Health and Social Development of the Russian Federation

7. Strategy of the Russian Pharmaceutical Industry Development to 2020: Priorities • Innovative model of development • Quality, efficacy and safety of pharmaceuticals • Preferences for National Pharmaceutical Industry in the State Program of medicines’ supply • Manufacturing high-tech APIs in Russia • Exports of locally manufactured pharmaceuticals • Local development of new molecules • Substitution of imported pharmaceuticals with locally produced preferably with the full manufacturing cycle in Russia • Development of local technological and especially R&D competences through partnerships and strategic alliances with international leaders www.pharma2020.ru; The Ministry of Industry and Trade of the Russian Federation

8. Innovative Partnerships – the Optimal Approach to Access Russian Pharma Market Potential Successful partnership – result of efforts by all interested parties

9. R-Pharm Distribution

10. R-Pharm Sales Performance, mln USD 10 R-Pharm, internal data

11. R-Pharm Key Account ManagersCover All Major Regions of Russia 26 representative offices 210 Key Account Managers 71 cities covered St-Petersburg Tver Ivanovo Bryansk Moscow N Novgorod Tula Perm Voronezh Kazan Saratov Ekaterinburg Samara Rostov-on-Don Tumen Khabarovsk Chelyabinsk Volgograd Krasnodar Novosibirsk Omsk Krasnoyarsk Astrakhan Irkutsk Kemerovo Vladivostok

12. R-Pharm in the National Project “Health” • Antiretroviral products RUR 331.1 mln • IPV RUR 122.3 mln • Hepatitis RUR 8.6 mln 2006 • Antiretroviral products RUR 550.5 mln • IPV RUR 106.1 mln • Hepatitis RUR 1337.0 mln 2007 • Antiretroviral products RUR 610.6 mln • IPV RUR 1242.3 mln • Hepatitis RUR 830.0 mln 2008 • Antiretroviral products RUR 690.8 mln • IPV RUR 1314.9 mln • Hepatitis RUR 1388.9 mln 2009 • Antiretroviral products RUR 3918.9 mln • IPV RUR 1411.4 mln • Hepatitis RUR 2393.6 mln 2010 Zakupki.gov.ru October 2010

13. R-Pharm Sales & Marketing Structure Marketing department Company marketing PR/GR Business unit structure Hospital (Anti-Infectives) BU (120 MRs) Virology BU (30MRs) Oncology BU (20 MRs) Immunology/transplantology BU (10 MRs)

14. Established regional structure with clear focus on high tech products Professional Key account structure Marketing oriented sales force Ongoing cooperation with innovative companies Distribution Co-promotional activity in niche therapeutic areas Experienced medical representatives Constant co-operation with charity funds taking care on patients with rare diseases R-Pharm Competitiveness

15. R-Pharm Transparency of Business Practices • R-Pharm has FCPA agreement signed with the majority of the partners • R-Pharm has Trace International Certificate since 2007 (http://www.traceinternational.org/)

16. R-Pharm - What Next? R-Pharm Group – full-cycle Russian pharmaceutical company R-Pharm Manufacturing R-Pharm Distribution R-Pharm Sales & Marketing R-Pharm R&D

17. Russian Partner Can Provide Proactive Value-Added Management of Product Development and Commercialization Source molecules Invest based on milestones MNC R&D from Phase III Registration and commercialization globally Source molecules Invest Actively manage development Conduct R&D till Phase III Coordinated with global Phase III and filing Commercialize locally R-Pharm Target identification Target validation Lead optimization Pre-clinical development Phase I Phase II Phase III Registration Commercialization Focused, and experienced management team efficiently moves a portfolio of molecules through pre-defined milestones to complete commercialization in a time- and cost-efficient manner R-Pharm locally, MNC globally Source; The Ministry of Industry and Trade of the Russian Federation

18. R-Pharm – Where Patient Comes First Company mission – to bring affordable innovative methods of treatment to Russian patients Ensure constant availability of specialty care pharmaceuticals through state-of-art logistics and distribution Launch of new medicines, starting from registration and clinical trials Decrease of treatment costs by implementing INN generic substitution and localization of manufacturing Research and development of local and in-licensed innovative products

19. R-Pharm Strategy Several modern GMP-compliant pharmaceutical facilities in Russia Transfer of innovative technologies API manufacturing site Venture investments in promising scientific data and research Educational programs’ support

20. R-Pharm – From Distribution to Production Yaroslavl manufacturing site (1st stage to be completed by 2011) Yaroslavl Kostroma Novosibirsk manufacturing site Moscow Kostroma packaging site Novosibirsk

21. R-Pharm State-of-the-art Manufacturing Site in Yaroslavl Implementation: Consulting, engineering, construction and validation provided by NNE PharmaPlan - the world’s leading engineering and consulting company focused on pharma and biotech. Plant to be fully operational by mid-2011. Fully complies or exceeds the requirements of FDA/EMEA: 21 CFR Part 210 - Current Good Manufacturing Practice In Manufacturing, Processing, Packing, or Holding of Drugs, General 21 CFR Part 211 - Current Good Manufacturing Practice For Finished Pharmaceuticals GAMP 5 - Quality control systems based on Good Automation Manufacturing Practice 5 guidelines implemented. R-Pharm project complies with the quality standardsASTM E2500 Main production line: Isolator – all technological processes are conducted automatically in sterile closed containers (the 1ST line of such type in Russia) Energy-saving concept of production

22. R-Pharm Packaging Facility in Kostroma Region Location: 340 km North-East of Moscow Production facilities: Complies with cGMP requirements Packaging of solid, liquid and soft forms Production capacity – 500 blisters per minute Unique cold chain manufacturing shop with 800 sq m of storage and packaging facilities in temperature controlled environment. Contractors: 6 ‘Big Pharma’ companies Warehousing facilities: 3 warehouse buildings The total of 2 800 pallets storage capacity Space and utilities allow significant expansion including full manufacturing of solid forms

23. R-Pharm Manufacturing Facility in Novosibirsk Location: The city of Novosibirsk Production facilities: Cheap ‘commodity’ generics in ampoules Patches Warehousing facilities: 2 warehouse buildings The total of 1 500 pallets’ storage capacity Site development plans: Ampoules production to be upgraded by 2012 Renovated ready for fit-out 4000 sq m facility available for JV project

24. Areas to be Considered for Cooperation Distribution Market Access Promotion Manufacturing R&D • Oncology • Virology • Antibiotics • Neurology • Immunology

25. Thank you for your attention