Threats and constraints | Onderstepoort Biological Products © |22nd February 2013Page 31 Negative perception – OBP Brand (RVF) Product availability-equipment break down & old outdated production processes OBP cannot compete with current product line Competitors have economies of scale & marketing budget No innovation- cannot afford new technology to develop new products OBP products are becoming obsolete Budget constraints- (not enough marketing budget) RT 12 TENDER BY GOVERNMENT- OBP cannot compete on price OBP is a commercial entity but also carries within its portfolio products earmarked for public good (20:80) Product availability to fulfil orders is a major constraint and its mainly due to technology and equipment constraints.

Short term Solutions | Onderstepoort Biological Products © |22nd February 2013Page 32 Suspension of RT 12 tender and give OBP preferential status so supply all animal vaccines to all government spheres. All animal heath products to be sourced from OBP Financial injection to reserve vaccines for provinces (government to put cash injection of R40 million/annum) (food security) Capital investment on new equipment

Quality of vaccines | Onderstepoort Biological Products © |22nd February 2013Page 33

| Onderstepoort Biological Products © |22nd February 2013Page 34 1.Production 1.1Contamination – poor process/product/people flow, lack of HVAC, open production process (viral) 1.2Production yields – old equipment, outputs decline with use and time 1.3Equipment failure – old equipment, more frequent breakdowns and downtime – affecting lead time to manufacture batches 1.4 Economies of scale – declining demand, public good products 2.Sales 2.1Sales forecast - must meet estimated demand as well as backlog 2.2Overselling/ underselling/ seasonality – need to be able to meet variable demand 2.3Opportunistic sales/disease outbreaks – need to have the products, capacity and equipment to respond timeously 2.7Competitor activities - need to have the products, capacity and equipment to respond timeously Factors affecting Production

| Onderstepoort Biological Products © |22nd February 2013Page 35 The development, production, testing and supply of all vaccines produced by OBP is based on accepted laboratory practices established by International Standards of Operation (ISO) (ISO 9001:2008 certified) and current General Manufacturing Practice (cGMP) guidelines Also, in accordance with specific guidelines and regulations established by the Office International de Epizooties (OIE) In addition, vaccines are developed, produced and supplied to comply with the legislative requirements for the registration of these products in South Africa (eg Act 36 of 1947) The necessary safety, identity, sterility/purity, potency/efficacy tests (in vivo and in vitro) are conducted at various stages in the production of the vaccine i.e. all raw materials, intermediate and final products undergo quality tests Quality and Safety of Vaccines

History of quality 1937 Sulfanilamide 1962 Thalidomide scandal LVP problems 1982 Tylenol tampering 1982 DNSO case 1989 Generic drug scandal | Onderstepoort Biological Products © |22nd February 2013Page 36

Guidelines FDA 1960 WHO (1960) AUSTRALIA 1969 UK (ORANGE GUIDE) PICS (1972) SA MEMBERSHIP 2003 EC GMP GUIDE Registrar responsible for the Fertilisers, Farm Feeds, Agricultural Remedies and Stock Remedies Act 36, 1947 (Act 36) at the Department of Agriculture, Forestry and Fisheries (DAFF) There has been a drive by the Registrar to improve product safety and quality and it is anticipated that there may be further changes to the proposed amended act to encourage and enforce that manufacturers comply to the Pharmaceutical Inspection Convention Pharmaceutical Inspection Co-operation Scheme( PIC(s)) standards International product acceptance based on GMP requirements | Onderstepoort Biological Products © |22nd February 2013Page 37

Quality Management (QM) The holder of a Manufacturing Authorisation must manufacture products - to ensure that they are fit for their intended use (satisfy stated or implied needs), comply with the requirements set, be free of deficiencies and do not place animals at risk due to inadequate safety, quality or efficacy. To achieve the quality objective in a reliable manner, there must be a comprehensively designed and correctly implemented Quality Management System. Everything should be fully documented and its effectiveness monitored. All parts of the QM System should be adequately resourced with competent personnel and suitable and sufficient premises, equipment and facilities. | Onderstepoort Biological Products © |22nd February 2013Page 38

Quality Management Quality Management is a strategic management approach that aims to improve business as a whole and add value to customers. It eliminate mistakes, reduce waste, and improve productivity, leading to continuous improvement of organizational processes and products, and enhancing efficiency of people and machines. Being an international requirement for manufacturing of pharmaceutical products Quality management provide proof and therefore open markets, opportunities and Customer satisfaction | Onderstepoort Biological Products © |22nd February 2013Page 39

Quality Management Quality control := product Quality control is the more traditional way to manage quality. Quality control is a process by which a independent entity, review test and provide proof of the quality of all factors involved in production. (raw material- final product) ; Quality Assurance:= Quality management system Quality Assurance provide a independent audited documented system that overview all systems and processes, to avoid, or minimize issues that can lead to defects or non compliance not detected through final product testing. It provides management with documented proof to make decisions and to allow or deny the release of product. | Onderstepoort Biological Products © |22nd February 2013Page 40

| Onderstepoort Biological Products © |22nd February 2013Page 41 Quality Management Principles (PICs) Quality Management Personnel Premises and Equipment Manufacture of sterile medicinal products Documentation Production Quality Control Complaints and Product recall Contract Manufacture and analysis Self – inspection Purchasing Manufacture of veterinary medicinal products other than immunological Sampling of starting and packaging materials Computerised systems Manufacture of investigational medicinal products (Production, Quality Control) Qualification and validation Reference and Retention Samples Quality Risk Management

What did we do OBP took its first steps towards quality in 1998 introducing a Quality management system including all historical methods Quality control (product) done with available and internal procedures Achieve & maintain ISO 9001 certification from Initiated & implemented some GMP principles into ISO system Key & most important aspect of GMP includes the facility design. All previous investigations and needs were used to compile a draft “Concept design” (lay-out, flow, soil, environmental investigation (2008) This needs to be reviewed to include current and modern accepted requirements ISO | Onderstepoort Biological Products © |22nd February 2013Page 42