Orion Building well-being 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Your primary source for what Orion is about: Suomeksi: www.orion.fi In English: www.orion.fi/en 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Basics about Orion Name: Orion Oyj / Orion Corporation Businesses: pharmaceuticals (94%) and diagnostic tests (6%) Deep roots in Finland: Established in 1917 as ‘Lääketehdas Orion Oy’, in Helsinki. Re-established in 2006 after a demerger of the former Orion Operational locations in Espoo, Turku, Kuopio, Hanko and Oulu European-wide presence with over 20 marketing companies under names Orion Pharma and Orion Diagnostica Products About 300 medicines and self-care products (Orion Pharma) Active pharmaceutical ingredients, API (Fermion) Diagnostic tests (Orion Diagnostica) Market leader in Finland with 10% market share Recognised world-wide as a specialist in Parkinson’s Disease Listed on Nasdaq OMX Helsinki President & CEO: Timo Lappalainen 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Some figures 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion in the light of key figures 2010 2009 Net sales, EUR million 850 772 International operations, % of net sales 73%  71% Operating profit (EBIT), EUR million 254 207 EBIT % of net sales 30% 27% R&D expenses, EUR million 86 95 R&D % of net sales 10% 12% Employees at the year-end 3 131 3 147 In terms of net sales, Orion ranks nr. 78 among global pharma. The figures for 2011 will be disclosed on 7 February 2012. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Net sales are generated mainly in Europe Breakdown of the EUR 850 million net sales for 2010 By business division By market area Sales through partners 29% 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Half of Orion shares are held by Finnish households By number of shares By number of votes Financial and insurance corporations 1% Financial and insurance corporations 1% Non-profit Organisations 6% Non-profit Organisations 7% Public sector 4% Public sector 7% Private corporations 8% Households 50% Households 65% Private corporations 14% Foreign held and nominee registered 31% Foreign held and nominee registered 6% Altogether 141.3 million shares and over 57 000 shareholders. Both share classes are listed on NASDAQ OMX Helsinki since 1 July 2006– Share A (ORNAV) has 20 votes/share and Share B (ORNBV) has 1 vote/share, in the AGM but they have equal rights to assets and dividends. The market value of Orion Corporation at 31 December 2011 was about 2.2 billion €. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Broad product portfolio. Some might be familiar to you. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Medicines ’over-the-counter’ 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Nutritionals 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Non-medicinals, for personal care and hygiene 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Pharmacy cosmetics 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

For your pet 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Easyhaler® for inhaled asthma medicines 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Some background about world pharma industry 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Some facts about the pharmaceutical industry 1(2) World sales 2010 IMS Health: USD 875 bn in wholesale value Big multinationals and local players 10 biggest companies make 40% of the world total. (Pfizer, Sanofi, Merck (US), Novartis, GSK, Roche, AstraZeneca, J&J, Lilly, Abbott) Important role in healthcare Safe, effective and better - and affordable - medicines. Education of healthcare professionals Innovation Average R&D investment is 10-15% of net sales. The solutions to unmet medical needs are explored in companies, with little if any public financing. High regulation High product responsibility. Compliance with Good Practices (GxP) in manufacturing, laboratory, R&D and marketing. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Some facts about the pharmaceutical industry 2(2) Products registered & authorised All medicines shall be officially approved for marketing and clinical use. National lists. Restrictions on communication All promotional activities of prescription medicines are addressed to healthcare professionals exclusively. No consumer advertising on prescription medicines. Sales arguments must be based on approved product characteristics (= confirmed study results). Retail sales through pharmacies In most countries, medicines are only available via pharmacies. Challenge of counterfeits Counterfeit (falsified, fake) drugs are an increasing global challenge. Trade in internet is very difficult to control. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

How are we planning to manage? Orion’s strategy How are we planning to manage? 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion concentrates own operations within Europe Scandinavia Strong domestic market position Western and Central Europe Strong position with proprietary products Eastern Europe Presence with branded generics Southern Europe Progress with proprietary products in hospital markets Finland Market leadership 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Strategic aim: Profitable growth and increased shareholder value whilst keeping business risks under control Partners and networking Flexible and efficient operations Competitive product portfolio Strengthening market position in Europe M ANAGEMENT OF COMPLEXITY IN COST-EFFICIENT WAYS 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Networking and partnering throughout the value chain R&D R&D partnerships and networks cover all phases from preclinical to product registration Balances risks and enables an increasing number of new research projects Supply Chain Supply Chain operations are global and partnerships cover the whole chain of operations Improved efficiency by “make or buy” decisions Sales & Marketing Partnerships in sales and marketing ensure a broad network of distribution channels Orion’s proprietary drugs distributed worldwide Product portfolio expanded by selling partners’ products 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

We invest in R&D to build our future and to fight illnesses R&D is part of our mission to build well-being 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Our main product looks simple, doesn’t it Our main product looks simple, doesn’t it? … But its road to market took over 10 years. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

It’s all about an ideal molecule The active substance in a medicine is like a key in a lock: it either opens or closes a pathway, activates or blocks its target, typically a receptor in a cell. Entacapone, Orion’s drug discovery, acts on COMT, a very common enzyme present in the body. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

The 7-17 year-long road of a molecule candidate to a new drug ”Pipeline” Target identification and validation 8–24 months Lead Molecule 12–24 months optimisation 18–36 months Molecule candidate selection, preclinical dev. Clinical Phase I in healthy humans 12–14 months Clinical Phase II in a small number of real patients 12–36 months Clinical Phase III in a large number of real patients 18–48 months Late stage development Early development Research A partner company may join the work at any stage of the project In the R&D process, the compound’s efficacy as a treatment option for the target disease and safety for the patient are explored with a purpose to confirm the compound’s superiority to already existing medicines. Each step is subject to approval of medicinal authorities (FDA or EMA). The hundreds of parallel and sequential studies generate an enormous documentation of detailed data. If successful, the results are filed into a marketing application to EMA and/or FDA. The review of the application takes 1-2 years. If OK, a marketing authorisation is granted. The compound is patented at an early stage. The protection expires after 20 years. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Pharmaceutical R&D takes: Patience One molecule in a million shows some promise. Only 20-30 completely new drugs (NCEs/NBEs) are approved/introduced annually Time It takes at least 10–15 years to develop a completely new drug from idea to market Money The average cost of developing a new drug is USD 700 million. The risk of failure is high Expertise Ca. 115 000 scientists and other industry staff members are engaged in pharma R&D in the EU alone 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Pharmaceutical R&D also gives: New treatments Every new treatment gives more hope to manage with a disease. For the patients and their caregivers it also means improved quality of life. Knowledge Understanding of diseases and their mechanisms accumulates with every single study. Even failed projects add our knowledge. Money The R&D investment generates earnings some years after the new product’s launch. Healthcare economics Effective medicinal treatments may save expensive days at hospital, e.g. Innovation Discoveries generate more disoveries to solve unmet medical needs of challenging diseases. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s R&D activity Orion is one of Finland’s biggest investors in R&D R&D costs are ca. 10% of our net sales Research staff accounts for 20% of our total workforce Our purpose is to introduce new innovative treatments to global markets Since late 1980’s we have developed 7 molecules into commercialised medicines. They now generate 50% of our net sales We currently explore new medicinal approaches for: central nervous system disorders cancer critical care respiratory diseases (inhalable drugs) 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Proprietary products generated 50% of Orion’s net sales for 2010 Indication EUR million 2010 Stalevo®, Comtess® and Comtan® (entacapone) Parkinson’s Disease 253 Simdax® (levosimendan) Severe heart failure 40 Easyhaler® product family (beclomethasone, budesonide, formoterol) Asthma, COPD 28 Dexdor® and Precedex® (dexmedetomidine) Sedative for patients in intensive care 27 Dexdomitor®, Domitor®, Domosedan® and Antisedan® (dexmedetomidine, detomidine, atipamezole ) Animal sedatives 24 Divina® range (estrogen) Menopausal symptoms 13 Fareston® (toremifene) Breast cancer 12 Total 397 % of pharmaceutical net sales 49 % 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Some helpful terms OTC product (over the counter) Can be bought without doctor’s prescription Proprietary product A medicine developed in-house all the way throughout the pipeline. The originator holds full rights for the product until patent expiry. Generic medicine Off-patent. A medicine whose patent has expired. Can be copied by anyone. NCE, NBE New Chemical (Biological) Entity. An active substance based on a completely new chemical or biological mechanism of action API Active Pharmaceutical Ingredient, the substance that induces the medicinal effect of the drug Marketing authorisation (MA) The license granted by a medicinal authority (FDA, EMA, Fimea, e.g.) to sell a drug Pipeline New drug development process all the way through preclinical and clinical phases 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion and the environment Sirpa Pelttari 16.1.2012 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Environmental legislation: important acts, decrees and decisions for Orion Environmental protection act 4.2.2000/86 Act on Changing the Environmental Protection Act 647/2011 enters into force 1.5.2012 Environmental Protection Decree 18.2.2000/169 Old Waste Act 1072/1993 New Waste Act 646/2011 enters into force on 1.5.2012 Waste Decree 1390/1993 VOC Decree 435/2001, Government Decree on the limitation of emissions of volatile organic compounds due to the use of organic solvents in certain activities and installations Government Decree on Substances Dangerous and Harmful to the Aquatic Environment 1022/2006 Government decison on information to be provided on hazardous waste and the packing and labelling of hazardous waste 659/1996 Ministry of the Environment Decree on the list of the most common wastes and of hazardous wastes 1129/2001 Chemicals Act 744/1989 Nature Conservation Act 1096/1996 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Environmental Protection Act General principles provided in Section 4 for activities that pose a risk of pollution: Pollution prevention and minimizing harmful impact: harmful environmental impact shall be prevented or, when it cannot be prevented completely, reduced to a minimum Caution and care: proper care and caution shall be taken to prevent pollution as entailed by the nature of the activity, and the probability of pollution, risk of accident and opportunities to prevent accidents and limit their effects shall be taken into account Best available techniques, BAT: the best available technique shall be used Best environmental practice: combinations of various methods, such as work methods, shall be used and such raw materials and fuels shall be selected as provide appropriate and cost-efficient means to prevent pollution ‘Polluter pays’: It is the duty of parties engaged in activities that pose a risk of pollution to prevent impact and eliminate or minimize harmful environmental effects 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Environmental Protection Act General duties provided in Section 5 Knowledge requirement: Operators must have sufficient knowledge of their activities' environmental impact and risks and of ways to reduce harmful effects Obligation to prevent pollution: If the activities cause or may directly result in environmental pollution, the operator must take the appropriate action without delay in order to prevent pollution, or, if pollution has already resulted, to reduce it to a minimum (385/2009) In addition, the general duties and principles laid down Chapter 2 of the Waste Act (646/2011) must be observed in activities posing a risk of pollution. (647/2011) 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Environmental Protection Act General permit requirement provided in Section 28: Environmental permit: A permit is required for activities that pose a threat of environmental pollution. Activities subject to a permit are prescribed in more detail by decree. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

New Waste Act 2011 The new Waste Act and ca. 20 other acts linked to it were confirmed on 17.6.2011. Those acts will enter into force on 1.5.2012. The acts have been published in Statutes of Finland (Suomen säädöskokoelma), numbers 646-666/2011. The purpose is to harmonise the waste legislation in line with today’s waste and environmental policies and the requirements of EU legislation. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Waste hierarchy A waste hierarchy which complies with the EU Waste Directive (2008/98/EC) and specifies the priority of measures concerning the amount of waste, harm mitigation, and waste management: Preventing the emergence of waste Re-using items as such, e.g. metal barrels Recycling waste as material, e.g. polyethylene plastic Utilising waste as energy; energy waste is combustible waste Safe landfill disposal of waste Waste that cannot be disposed of by other means, e.g. grease trap sludge 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion operates under environmental permits Environmental permits are required for Orion’s pharmaceutical manufacturing operations, as specified in the Environmental Protection Decree of Finland. The environmental permits are granted and supervised by regional environmental authorities. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s main site and headquarters are in Espoo Orion’s site in Espoo is located in Mankkaa, next to the Tapiola sports park. About half of the Group’s employees work here. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s Turku site Orion’s manufacturing operations in Turku include certain tablets, hormonal products, cancer medicines and basic ointments. A major research centre is here too. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Fermion’s Hanko plant Fermion is a so-called fine chemicals manufacturer. It produces active ingredients for pharmaceuticals in chemical synthesis at its plants in Hanko and Oulu. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s environmental activities Our environmental management focus is on the following areas: Waste and materials management Air and soil protection Energy and water consumption Wastewater Environmental burden of our products We monitor the environmental impacts of our operations by e.g measuring and calculating the volumes of chemicals, solvents and other substances, consumption of packaging materials, water and energy, emissions into water and air and keeping track of waste and recording waste statistics. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

ISO 14001 based system under construction Orion wants to overperform the minimum requirements set by laws and regulations for environmental affairs Orion publishes GRI-compliant Sustainability Reports since 2009. The ones for 2009 and 2010 are accessible at www.orion.fi/sustainability Our management approaches and performance indicators of environmental responsibility are presented here. An ISO 14001 based environmental management system is currently being built for Orion, first comprising the pharmaceutical preparations business (Espoo, Turku and Kuopio plants). More systematic practices and continuous improvement in environmental affairs  An Environmental Policy will be confirmed for Orion in Q1/2012. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s current environmental engagements Responsible Care (RC)  Orion is a member of Responsible Care, the global voluntary initiative under which chemical industries work together to continuously improve their health, safety and environmental performance. Environmental performance is reported annually to RC Energy Efficiency Programme of EK  As a member in the Energy Efficiency Programme initiated and coordinated by the Confederation of Finnish Industries (EK)Orion aims to cut its proportional energy consumption by 9 per cent by 2016, compared with the 2005 level. This includes the consumption of electricity, heating energy and fuels. Carbon Disclosure Orion reports its CO2 emissions to the Carbon Disclosure Project, CDP  18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s environmental impacts The manufacturing processes of pharmaceutical products, active pharmaceutical ingredients (API) and diagnostics products differ very much from each other. Accordingly, they also consume materials and generate emissions and waste differently both in terms of amounts and types. Common to all is Uncompromised cleanliness Massive air conditioning systems 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Absolute cleanliness is a must 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Water consumption and discharges Water discharges Orion is a heavy user of water. Most of the water goes to washing the production equipment. The waste waters from are drained to municipal treatment plants in accordance with agreements with environmental authorities. Fermion’s Hanko plant has its own water purification plant where waste water is pre-treated before drained to the municipal treatment system. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Solid waste Orion monitors its waste volumes using three indicators: hazardous waste to be transported for disposal recovered waste to be recycled, including energy waste and landfill waste All such solid waste as contains pharmaceuticals is classified as hazardous waste and is sent to Ekokem Oy at Riihimäki Fermion produces the relatively largest amount of Orion’s total hazardous waste The Espoo, Turku and Kuopio operations produce mostly non-hazardous recyclable materials and landfill waste. About 20% of their total solid waste is hazardous. Orion aims to reduce waste by all applicable means. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion’s objectives in waste management Orion's objectives to reduce the production of waste are aligned with the priority targets specified in the EU-level waste strategy (waste hierarchy of the Directive 2008/98/EC on waste, Waste Framework Directive), which are included in the New Waste Act. Avoiding the production of waste by all possible means Efficient sorting and recycling of the produced waste materials Hereby we also decrease the cost of waste. Seeking ways to re-use materials Minimised landfill waste. 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Emissions into air Since 2007, companies in Finland have had to comply with very stringent emission limits for VOC quantities and concentrations. (Government Decree on the limitation of VOC emissions due to the use of organic solvents in certain activities and installations, 435/2001 at the end of October 2007) Orion’s VOC emissions come from several solvents used by Fermion in its chemical synthesis processes, and mainly ethanol used in tablet mass production and tablet coating in the Turku and Espoo plants Fermion accounts for ca. 97% of the total solvents used by Orion, and for about 75% of Orion’s total VOC emissions. Thanks to process investments in Hanko and Oulu, Orion’s total VOC emissions dropped dramatically from 2007 (in 2010 we experienced some technical problems at Fermion’s Oulu plant). Very small amounts of dust. Combustion gases from the steam boiler of Espoo and Kuopio. The sulphur content of the oil is low (less than 1%) CO2 emissions are reported for direct and indirect energy comsumption 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Environmental challenges for Orion to cope with We try to minimize the use of volatile organic solvents by changing processes. We are studying possibilities to burn the volatile solvents that evaporate from the tablet manufacturing processes and get mixed with the outlet air. Today, more than 90% of the volatile solvents in the plants of Espoo and Turku pass through the gas scrubbers into waste waters. An important goal for Orion is to continuously reduce emissions in the waste water and particularly the amount of harmful substances in them. The means to achieve this include more efficient pre-cleaning of the manufacturing equipment. Even better control of energy and water consumption (heat recovery systems, e.g.). 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Orion building environmental well-being with HH students 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

The world’s top 20 pharmaceutical companies 1-10 http:// Pfizer www.pfizer.com Sanofi www.sanofi.com Merck & Co www.merck.com Novartis www.novartis.com GlaxoSmithKline www.gsk.com Roche www.roche.com AstraZeneca www.astrazeneca.com Johnson&Johnson www.jns.com Eli Lilly & Co www.lilly.com Abbott www.abbott.com 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

The world’s top 20 pharmaceutical companies 11-20 http:// Bristol-Myers Squibb www.bms.com Teva www.tevapharm.com Amgen www.amgen.com Bayer www.bayer.com Takeda www.takeda.com Boehringer Ingelheim www.boehringer-ingelheim.com Astellas www.astellas.com Novo Nordisk www.novonordisk.com Daiichi Sankyo www.daiichisankyo.com Eisai www.eisai.com 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Finland’s top 20 pharmaceutical companies 1-10 http:// Orion www.orion.fi Pfizer www.pfizer.fi (MSD) ( www.msd.fi ) fuusio US-Merckin kanssa GlaxoSmithKline www.glaxosmithkline.fi/ AstraZeneca www.astrazeneca.fi/ Sanofi www.sanofi.fi Novartis www.novartis.fi Roche www.roche.fi Leiras www.leiras.fi Abbott www.abbott.fi www.bmsfinland.fi/ 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Finland’s top 20 pharmaceutical companies 11-20 Novo Nordisk www.novonordisk.fi Ratiopharm www.ratiopharm.fi Bayer Schering www.bayer.fi Lilly www.lilly.fi Boehringer Ingelheim www.boehringer-ingelheim.fi Janssen-Cilag www.janssen.fi Amgen www.amgen.com Actavis www.actavis.fi Lundbeck www.lundbeck.fi Baxter www.baxter.fi 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

These companies are also interesting ones http:// Merck KGaA www.merckgroup.com Shire www.shire.com Leo Pharma www.leo-pharma.com Santen www.santen.com Meda www.meda.se Indian pharmaceutical companies Sun www.sunpharmaceuticals.com Dr Reddy’s www.drreddys.com Wockhardt www.wockhardt.com Aurobindo www.aurobindo.com Ranbaxy www.ranbaxy.com Torrent www.torrentpharma.com 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Contact Anne & Sirpa Anne Allo Corporate Responsibility Officer Orion Oyj | Orion Corporation P.O.Box 65, 02101 Espoo Orionintie 1 A, 02200 Espoo +358 50 966 3735 +358 10 426 3735 anne.allo@orion.fi Sirpa Pelttari EHS Specialist Orion Oyj | Orion Corporation P.O.Box 65, 02101 Espoo Orionintie 1 A, 02200 Espoo +358 50 966 3118 +358 10 426 3118 Sirpa.pelttari@orion.fi 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Welcome onboard to building well-being with us! 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation