1 Small is beautiful.. Winning in the highly competitive generics market

2 It’s not the size, it’s what you do with it that matters!

3 Presented by John Beighton

4 How to grow without losing the “spirit” of what creates value The AMCo case study… An entrepreneur’s dilemma

5 Company Origins £367m 2012 Oct £465m 2012 Aug 2013 Dec 2013 May 2010 Dec

6 Management Team

7 Unique business model with industry leading margins and cash generation, replicable across geographies and therapeutic areas Optimise existing portfolio and acquire niche products Acquire and develop difficult-to-make niche products which are below the radar of larger pharma companies with attractive margins and growth opportunities Leverage market knowledge Local presence in selective markets will enable successful product commercialisation (e.g. pricing, portfolio optimisation, market insight, leveraging distributor network, etc.) Apply asset light model Network of CMOs and distribution partners enables high flexibility and efficient capital utilisation, while driving costs down and securing stable long-term supply of goods and services Use low cost support Low cost Centre of Excellence for support functions in India (e.g. RA, Supply Chain, Finance, IT, Quality, HR) ensures high-quality support and cost effectiveness

8 Unique business model underpinned by three critical enablers Cash generating engine based on asset light, highly profitable business model enables organic and inorganic growth opportunities AMCo has an embedded entrepreneurial mindset with fast decision making and the ability to implement quickly Financial strength Entrepreneurial mindset Right size and scalable Large enough to commercialise multinational product portfolios, while staying nimble and agile Replicable business model across geographies and therapeutic areas

9 Commodity GxDifferentiated Gx (DGx)Branded specialty Extent of geographic diversification Global generics companies with strong presence in commodity Gx; strategic focus on specialty Gx 1 Mid-sized commodity generics players moving up the value chain into differentiated products and mature brands 2 4 Focused R&D players with deep expertise in specific technology platforms; limited front end presence; partner/sell products to large players for marketing/devt Large R&D companies with broad range of branded innovative products being sold across the world 5 Mid-sized Specialty Pharma companies with therapeutically- focused innovative pipelines 7 Commercially- focused players, with primary expertise in a single market 3 NCE / NBE Selective globalisation beyond local markets Mostly local Mostly Global 6 Development- focused co’s, finding new, local customer solutions

10 Five strategic Business Action Plans (BAPs) can be derived from the overarching strategy Leverage AMCo's unique business model to expand in other attractive markets and to broaden niche product portfolio Strategic BAP Description Strategic Growth International Excellence Operational Excellence Compliance and Reputation Integration and Culture We will increase revenues through Portfolio Optimisation, acquisition of products and infrastructure, and through new products launches We will increase revenues through establishing direct market presence and developing internal expertise to support the International markets We will ensure customer satisfaction by ensuring that product is reliably supplied when required We will remain compliant and ethical with all our stakeholders, whilst also being adequately structured to support rapid growth plans Fast and effective integration is critical to support long-term growth and our people are key to supporting it

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12 Strategic Growth Portfolio Optimisation – registering existing AMCo products into new markets where the product isn’t currently registered or sold, and using the existing manufacturers to make the product (at least 40 submissions made in 2014) Product Development – creating new products with a contract development partner, whereby AMCo retains full ownership rights to the product, and freedom to choose who to manufacture the product In-Licensing – buying the rights to sell a third party’s product in a defined territory, and agreeing for the licensor to supply the product to AMCo for an agreed period of time (typically 5 years) Product Acquisitions – buying the permanent rights to own an existing product, in a defined territory (sometimes global e.g. Fucithalmic). The seller may wish to continue making the product, but more often would require AMCo to find a new supplier within 2-3 years

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14 Background: The In-market value chain Market potential Market potential a)Sizing the opportunity b)Product selection c)Dosage / form adaption Coverage Medical Promotion - by Salesforce - Controlling Salesforce / “Managing margin” - Selling discounts - Creating promotion materials - Telesales Regulatory a)Registration of new products b)Pricing regime c)Legal frameworks Pricing Distribution a)Supply chain optimisation / no stock-outs b)Order taking / invoicing / collection c)Box shifting III III VIIVI a)Price elasticity b)Competitive environment The diagram below represents a break down of the in-country value chain and the indicated key strategic drivers / actions related to each part. Sales Marketing Geographic coverage of - Hospitals - Doctors - Wholesalers a)Specialist conferences / KOLs b)E-marketing (B2C for OTC) IVV Reporting Data analysis

15 Global Coverage AMCo offices/direct presence Distributor network >50% of sales in UK

16 International Excellence AMCo offices/direct presence Distributor network Target markets – direct presence

17 Five Distinct go-to-market approaches for AMCo Unmanaged box shifting Strong distributor AMCo Implant AMCo Presence ‘light’ AMCo Presence ‘heavy’ Market potential Market potential Coverage Regulatory Pricing Distribution III III VIIVI Sales Marketing IVV Distributor Joint AMCo / Distributor AMCo Distributor Drivers to increase salesAdditional costs – More “managed service” – Higher margin to distributor – Broader coverage – More products to market faster – Price increase – Volume initiatives – Focus – Personnel costs – Potential 3 rd party Sales Resource – Closer to activities – Additional focus – Office – Regulatory costs – Tax implications – AMCo salesforce – AMCo marketing – Direct labour Distributor 5 5 AMCo 3 rd Parties

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19 Operational Excellence in an asset light context Critical Success Factors Flexibility and having options for supply API Finished dosage form Dual (or triple) sources for key products and APIs That are registered and maintained in the MAs That remain in a validated status Strong Supplier Relationships Contractual protection Results in a low risk supply chain

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