1. Hale & Tempest Moving Beyond the Commodity Market: What Future is there in added Value Generics, Niche Products and Biosimilars? Dr. Brian W Tempest www.briantempest.com 14 th EGA Annual Conference – Paris, France June 3rd 2008

2. Hale & Tempest www.briantempest.com

3. Hale & Tempest Healthcare pressures to 2050

4. Hale & Tempest Healthcare Reform & Transition is Everywhere

5. Hale & Tempest Healthcare Reform & Transition is Everywhere

6. Hale & Tempest Big Pharma R&D Productivity is Falling

7. Hale & Tempest Big Pharma Sales Concentration...

8. Hale & Tempest But the Product Pipeline is not with the top 10

9. Hale & Tempest Big Pharma Generic Exposure

10. Hale & Tempest A 20- Year Historic Low

11. Hale & Tempest 45,000 Pharma Jobs

12. Hale & Tempest double digit growth to single growth focus on 7 developed markets to 7 emerging markets primary care to specialists small molecules to biotech molecules a slump in R&D innovation - the next 5 years being similar $84b patent expiries in 2010, 2011, 2012 48 M&As in 2007 at a value >$50m 15 out of 18 top companies have announced restructuring Big Pharma in Transition

13. Hale & Tempest Generic Competition is Rising CPHI Attendees, Milan, 2 nd – 4 th Oct’07 1.China467 – 33% 2.India189 – 13% 3.Germany96 4.Italy80 5.USA75 6.UK55 7.France55 8.ROW387 Total1404 As registered on July 25, 2007

14. Hale & Tempest Generics – USA Filings USA ANDA filings by India % Share of USA DMF filings India China 2004 27% 9% 2005 37% 10% 2006 44% 14% Q1’07 48% 17% Q4’07 48% Source: US FDA / J P Morgan, 2 may 2007 Source: US FDA, Credit Suisse

15. Hale & Tempest Indian Healthcare’s 1987 Companies

16. Hale & Tempest Asia roaring Ahead

17. Hale & Tempest A Recent M&A Success

18. Hale & Tempest Sources: 1.IMS Midas, March 2005 2.Earth Trend Data Tables 2005 82% of the world population accounts for only 12% of the Global pharmaceutical sales RegionPharma SalesPopulation North America Europe Japan $255 b 47% $158 b 30% $59 b 11% 332 5% 725 11% 128 2% Asia/Africa/Aus Latam 88% $41 b 8% $20 b 4% 18% 4711 73% 558 9% 12% 82% Worldwide$533 b 100%6454 100%

19. Hale & Tempest Competition is rising, India feels confidant and strong Cost containment in European countries Importance of Branded Generic countries Focus in the hospital Injectables sector Zhejiang Huahai Pharma Co –first tentative ANDA FTC deals in 06/07 at 45 are double 05/06 & 04/05 M&A - 30% of added value from synergy Indian Manufacturing units to double 2010 on 2000 Generics Sector in Transition

20. Hale & Tempest Germany Reimbursement Uncertainty

21. Hale & Tempest South Europe Investment

22. Hale & Tempest Sources: Goldman Sachs 2007 Top 5 Global Pharmaceutical Markets 2020 RankCountrySize 1. 2. 3. 4. 5. USA China Japan France India $ 475b $ 125b $ 61b $ 51b $ 43b

23. Hale & Tempest Wholesaler Brand Ranked 2 nd in UK

24. Hale & Tempest Pharmacy Chains

25. Hale & Tempest KSR vs. Teleflex USA Supreme Court decision USA Bilateral FTAs amended –Columbia, Peru, Panama Compulsory Licensing by Thailand, Canada under WTO German reimbursement review, UK PPRS, Poland, Hungary FDA setting up 5 offices in China & then India, ME, SA,EU Brazil generics booming, Japan generics rising Impact of wholesaler brands and pharmacy chains West Europe vs. Central/East Europe vs. South Europe Pharma Markets in Transition

26. Hale & Tempest In this Era of Transition there is a Serious Search for Profitable Sectors

27. Hale & Tempest Impact of Competition on Price

28. Hale & Tempest Added Value Generics, Niches & Biosimilars  Branded Generics  Recombinant DNA technology/Biosimilars - 20% of CTs  Injectables & Hospitals  OTC - brands last forever  NDDS - once a day technology  Chemistry e.g. hormones, penems, peptides - 5% of CTs  Natural Products - 5% of CTs  Fermentation technology, China power costs- 8% of CTs  Aerosols, Implants, Patches  Para 4 180 days USA exclusivity/first day EU launches  CRAMS - $24b global market in 2006, $48b in 2010 with India forecasting $1b and $3b share

29. Hale & Tempest 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

30. Hale & Tempest Different Global Generic Market Sizes $bn RegionSandoz 2006 IMS 2008 USA2368 West Europe1419 East Europe13NA Japan33 Latam/Canada103 (Canada only) ROW377 Total100

31. Hale & Tempest Europe’s largest Branded Generic market

32. Hale & Tempest Biologics Share of Patent Expiries

33. Hale & Tempest Biotech Share of Patent Applications

34. Hale & Tempest Biosimilars Most Companies expect Europe to be the stepping stone to the USA. Clarity on EPO,GCSF, HGH,I with Interferon, LMW Heparin to come Monoclonals next on the agenda USA regulations will not be clear until at least 2009. Biosimilars are expected not to be AB rated so field forces will be required for marketing. Generics market size $30b USA & $25b Europe. Indian Companies will be active players. Chinese & Korean Companies are already active. Some Big Pharma Companies are interested in this sector The earlier Biosimilar products may not be as profitable as some forecast owing to hospital discounts. Monoclonals will probably be more profitable. Need to be there

35. Hale & Tempest Irinotecan – 7 first day launches in USA

36. Hale & Tempest In Summary Big Pharma, Generics & Pharma Markets are all in Transition - with lots of Change Relatively easy to achieve Generic Sales But Profits and Cash are Challenging Everybody will be looking for profitable niches

37. Hale & Tempest Thank You