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Hale & Tempest Exploring the Structural Changes in the Global Pharmaceutical Marketplace: an India-China Emerging World Webcast Dr. Brian W Tempest www.briantempest.com.

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Presentation on theme: "Hale & Tempest Exploring the Structural Changes in the Global Pharmaceutical Marketplace: an India-China Emerging World Webcast Dr. Brian W Tempest www.briantempest.com."— Presentation transcript:

1 Hale & Tempest Exploring the Structural Changes in the Global Pharmaceutical Marketplace: an India-China Emerging World Webcast Dr. Brian W Tempest GLG New York Webcast 5 October 2010

2 Hale & Tempest 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 He was then Chief Mentor and Non Executive Director until 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 been Regional Director, Far East for Glaxo where he was responsible for businesses in Japan, China, Korea, and Taiwan. Brian has worked in the Pharmaceutical Industry for the last 39 years and led Healthcare businesses in North America, South America, Europe, Africa, Middle East, Asia and India. He has also led sessions at Investor Meetings across Asia, Europe and USA. He is now an International Advisor to MAPE – India, Religare -India and UNCTAD - Switzerland. In addition he is a member of the SCRIP Global awards panel. Brian speaks at global conferences on the Challenge from India and China and more information on these presentations can be found on his website Brian has a PhD in Polymer Chemistry from Lancaster University and is a member of the Royal Society of Medicine, the Royal Society of Chemistry and is a Chartered Chemist. He is now Chairman of Hale & Tempest Co Ltd.

3 Hale & Tempest Healthcare Pressures to 2050

4 Hale & Tempest Whilst GDP Growth has Declined, Healthcare Costs continue to Grow

5 Hale & Tempest Emerging World’s Perceived Economic Health in 2009

6 Hale & Tempest Asian View of World Trade - Europe not really a player

7 Hale & Tempest The Future? - Pharma Vending Machines Currently being test marketed in UK Hospitals 2010

8 Hale & Tempest Structural Change: Big Pharma

9 Hale & Tempest Big Pharma- Despite increasing R&D NCE Productivity continues to fall

10 Hale & Tempest Generic Exposure

11 Hale & Tempest Many Drugs withdrawn this Decade Source: Deutsche bank, FDA

12 Hale & Tempest EC Surprise Anti Trust Raids 2008/9  1 st - GSK, Astra Zeneca, Sanofi Aventis, Pfizer, Wyeth, Teva in January 2008  2 nd – Teva, Servier, Kirka in November 2008  3 rd – Sanofi Aventis France, Novartis France, Teva France in October 2009  4 th – Lundbeck Italy, Teva UK in December 2009

13 Hale & Tempest Approvals becoming Difficult Source: Pharmatimes UK July-August 2010

14 Hale & Tempest Sales Force Job Cuts in Press since 2009

15 Hale & Tempest USA – Many OTC Switches this Decade Source: Deutsche Bank

16 Hale & Tempest Sources: 1.IMS Midas, March Earth Trend Data Tables % of the world population accounts for only 12% of the global pharma sales RegionPharma SalesPopulation North America Europe Japan $255 b 47% $158 b 30% $59 b 11% 332 5% % 128 2% Asia/Africa/Aus Latam 88% $41 b 8% $20 b 4% 18% % 558 9% 12% 82% Worldwide$533 b 100% %

17 Hale & Tempest Emerging World Share of Pharma Growth source IMS

18 Hale & Tempest Emerging World Share of Pharma Source EIU, OECD, WHO, IMS, Roland Berger

19 Hale & Tempest Profitability in Branded Generic Markets

20 Hale & Tempest Big Pharma & the Emerging World source IMS - BRIC, Mexico, Turkey, South Korea

21 Hale & Tempest Emerging Markets & Big Pharma

22 Hale & Tempest India Rankings Abbott now has 7000 reps & 7% Market Share

23 Hale & Tempest A New World Order is Coming with New Alliances - Pfizer & Aurobindo

24 Hale & Tempest Structural Change: Generic Companies

25 Hale & Tempest Patent Expiries (in 8 Markets)

26 Hale & Tempest USA Generics Filings Source: Deutsche bank July 2010

27 Hale & Tempest USA - Legal Scorecard for Generics Source Impax Feb 2009

28 Hale & Tempest Top 22 Generic Companies over $1b Source: Company Reports Generics Bulletin 28 May 2010 (excludes Apotex & Actavis Private Companies)

29 Hale & Tempest Next18 Generic Companies < $1b Source: Company Reports Generics Bulletin 28 May 2010 (excludes Recalcine Private Company)

30 Hale & Tempest Generic consolidation will continue

31 Hale & Tempest Generic Profit Margin Profile in descending order source: Deutsche Bank July 2010

32 Hale & Tempest Different Global Generic Market Sizes $b - the hidden branded generic markets RegionSandoz 2006 IMS 2008 USA2368 West Europe1419 East Europe13NA Japan33 Latam/Canada103 (Canada only) ROW377 Total100

33 Hale & Tempest USA - First to File Lawsuits Source RBC Capital Markets January

34 Hale & Tempest USA - Litigation Success Rates Source RBC Capital Markets January  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

35 Hale & Tempest USA Challenge – Size of Product Basket Source: Deutsche Bank

36 Hale & Tempest Japan - Generics supported by Politicians

37 Hale & Tempest Distributors moving into Generics UK Coop – the world’s largest consumer cooperative  GBP£10b UK company  running food stores, banks, insurance, funeral homes, travel agents, farms and pharmacies  3 rd 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 opens 2010/11  With Investment GBP£20m, 200 staff

38 Hale & Tempest Structural Changes: Indian Pharma Companies

39 Hale & Tempest Indian Generics have consistently outperformed USA Generics

40 Hale & Tempest To understand India, understand the promoter families McKinsey Quarterly 16 Jan 2010  Family ownership -often overlooked  1/3 of S&P500 index, 40% of top 250 Cos Fr/Ge  <30% survive into the 3 rd generation  Survivors do better than their corporate peers  Family Councils, Wealth Management Offices  Every generation has a liquidity event  Families renew their portfolios over time

41 Hale & Tempest India - The Education Advantage

42 Hale & Tempest Indian Deals Roaring Ahead July 2010 Grant Thornton Deal Tracker

43 Hale & Tempest Indian DMFs 62% April 2010

44 Hale & Tempest Chinese DMFs 22% April 2010

45 Hale & Tempest India represents 50% of USA ANDAs

46 Hale & Tempest FDA Approved Manufacturing Sites source FDA

47 Hale & Tempest Early discovery leads from US, Europe, Taiwan, Singapore Molecular optimisation from India Toxicology from China, Central Europe, Singapore Electronic Data Capture from India API Manufacture from India with Raw Materials from China Drug Formulation Manufacture from India, USA Phase 1 Clinical Trials from Europe Phase 2,3 heavy use of India Corporate back office from India The Indian Drug Development Model

48 Hale & Tempest India – Share of CRAMS Market

49 Hale & Tempest Chinese ANDAs are Coming

50 Hale & Tempest The Tempest Crystal Ball Asia has become the Centre of Gravity for global business Big Pharma will develop Emerging World Strategies, Generics Strategies, OTC Strategies, Vaccine Strategies, VC Strategies Big Pharma will continue to be attracted to India for CT, EDC, MO. and to China for RM/Biology/Toxicology Big Pharma will develop dual IP as well as dual pricing Many Indian families are reviewing their family portfolios and will optimize their holdings. M&A will consequently expand further Generics – Risks and Competition are rising Branded Generics will continue to be very attractive

51 Hale & Tempest Thank You


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