1. Market Segment Training

2. AA ~$2,000M* GC ~$1,650M* Biotech ~$7,500M* Liquid ~$4,100M* (growth at ~6% per annum) *based on figures from SDI 2004 All prices quoted in USD Instrumentation Market Value Overview

3. North America and Europe – largest markets ~ 60-65% of the LC market Asia and Japan – each have 10-15% Rest of the world – 5-10% Geographical Market Distribution

4. Total LC sales $2,800M –Instrument sales $1,500M –Service $300M –Consumables and data systems $1,000M Correlates to 20,000 systems – 20% prep, 80% analytical Less than 1,000 units were UPLC or other systems Unit price for conventional system ~$40,000 Market Breakdown - 04

5. Pharmaceutical – 25% Independent test labs, Research and Development – 10% Environmental – 20% Other industries include – Petrochemical, Food and Agriculture, Bio-analysis, Research and Regulatory and polymer – all make up less than 10% each Note – a 1% market is still $1.5 billion dollar area!!! LC Sales Market by Industry

6. Widely accepted that Waters and Agilent control 40% of the market Cover most relevant industries Companies standardise on Empower, Chemstation etc. Thermo, Shimadzu, Dionex, Varian and others share the remaining 50- 60% of market Market Share Breakdown

7. Greater range of product coverage than other vendors Sample prep, consumables, columns, hardware, software, distribution, worldwide service and other technologies Waters and Agilent until now the only other vendors with this complete package offering What Advantages Does Varian Have?

8. ProcessPrepAnalyticalLCMSGPCGC/MSOtherColumnsService VarianYYYYYYYYY AgilentN½YYYYYYContract WatersNYYYYNNYY KnauerN½YNNNNNLimited ThermoNNYYNNYNY Where Varian Sits in Respect to the Rest of the Competition in Terms of Product and Service Offerings

9. Buy many instruments from nano scale to super prep Most pharma companies have R and D and QC functions Most pharma companies work with both large and small molecules Generic pharma companies tend to be more production – QC with less R and D Pharma Business

10. Purchased La Jolla pharmaceuticals for $372M Invested $150M in improvements at the La Jolla site Research in high throughput screening, discovery technologies, rational drug design, combinatorial and medicinal chemistry, cancer, HIV, hepatitis, blindness, diabetes and obesity 13,000 scientists work on over 600 R and D projects In 2004 Pfizer will invest $7.5Bn in R and D projects worldwide Example of a Pharma Business - Pfizer

11. Regulatory compliance, reliable methods on fully characterised columns and software Excellent service response times, reduced downtimes Resistance to change based on large investment in vendors data system and strategies Low cost, reproducible consumables key to these accounts which can lead to hardware and software sales Pharma QA/QC Requirements

12. Can lock the Pharma customer in with complete package Service can make or break the relationship Data system can determine future purchases Seamless method translation from R and D to QA/QC Pharma QA/QC Requirements Cont.

13. Knowledgeable users, troubleshooting role Develop methods to pass onto QC/QA Gradient pumps, PDA, column heaters, ELSD Very analytical buyers of equipment Require reliable, robust equipment and data systems Pharma Methods Development/Validation

14. Interested in a diverse range of techniques – capillary, analytical to semi- prep. Hyphenated techniques – NMR, MS, MS/MS, TOF etc. Money is generally not an issue if the technology gives the user an edge Data package must have a useability and offer control of information rich instrumentation Pharma Research and Development

15. Driven by EPA or equivalent organisations around the world Consists of contract labs carrying out analyses such as PAHs, Carbamates, PCBs Strong offerings in associated techniques like GC, GCMS, AAS and ICP Environmental

16. Varied applications Usually budget systems, robust, easy to use, easy to service are strong drivers High end research units in high visibility proteomics research groups similar to Biotech companies Target research groups/students, long term strategy Academic Research

17. Fast growing, diverse and large budgets Large range of techniques used HPLC, NMR, CE, MS and X-ray crystallography Proteins are target compounds, very sensitive, biocompatible systems and consumables required Need to know if system is to be used for characterisation, quantitation or preparative Can probe deeper to customise system for the customer Biotech Industry