Strategic Changes in the Global Pharmaceutical Market

1. Strategic Changes in the Global Pharmaceutical Market Dr. Brian W Tempest www.briantempest.com Zurich, Switzerland October 2011

2. 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 4th 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

3. Generic Medicines are part of the Solution for Ageing Populations

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

5. Structural Change - Big Pharma

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

7. USA DOJ Fines on Big Pharma Source: Chemistry World Jan 2011

8. USA Batch Recalls Source: Deutche Bank 29 March 2011

9. Approvals & Reimbursements Source: Pharmatimes UK July-August 2010

10. Big Pharma Losing to Local Players Source GSK Presentation

11. Emerging World Share of Pharma Source EIU, OECD, WHO, IMS, Roland Berger

12. Top 8 Cos in Emerging Markets 2008

13. Large Cap Pharma Entering Generics With the slow-down of Western markets, Pharma are rapidly repositioning to focus on emerging markets for growth • Emerging Market Investor Days • March 16, 2010 • December 10, 2009 • July 2, 2009 Increasing Pace of Emerging Markets Acquisitions (Algeria) (MENA, LatAm, Asia-Pac) (Egypt, Pakistan, Near East )

14. Sales Force Job Cuts in Press since 2009

15. Structural Change Generic Companies

16. Asia vs. the Western Generic Companies Source: Factset, Religare

17. Pricing Pressures Source: Watson

18. European Generic Prices Source Ranbaxy

19. European Generic Prices Source Ranbaxy

20. 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

21. Season of Warning Letters/Import Alerts Source: Deutche Bank July 2011

22. 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

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

24. Top 25 Global Generic Companies Source: Generics Bulletin 10 June 2011

25. Next 24 Global Generic Companies Source: Generics Bulletin 10 June 2011

26. Patent Expiries Source: Sandoz

27. In 2016 Top 10 8 will be Biologic/Resp Source: Sandoz EGA Conference 2011

28. Structural Changes Indian Pharma Companies

29. WHO Pre Qualified Products

30. Indian Generic FDA ANDA Approvals

31. Niche Technology Source: MAPE

32. India – Share of CRAMS Market

33. Lots of Opportunity for CROs in India Source: clinicaltrials.gov 16 Feb 2011

34. Macro Structural Changes

35. Pfizer & Hisun

36. Pharma Wholesaler sets up China JVUK 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

37. China Pharma Industry Capex Plans Source: Stravencom

38. India Pharma Industry Capex Plans Source: MAPE

39. FDA DMFs from India

40. FDA DMFs from China

41. Chinese ANDAs

42. Endangered Elements Source: Chemistry World 2011

43. A New World Order is Coming

44. Thank You brian.tempest@clara.co.uk www.briantempest.com