Critical Success Factors for the Korean Generic and API Industry in a post FTA Environment DAVID HARDING SEOUL JUNE 28-29, 2007

AGENDA About Thomson Reuters Possible effect of KORUS Free Trade Agreement on Korean generic and API industries The role of information in generic product development Horizon Global™: an industry standard for generic product selection

ABOUT API INTELLIGENCE (fmr Newport Strategies) Founded in 1990 A business of the $7bn Thomson Reuters Corporation A unique research focus: tracking global generic API development and manufacturing activities High quality, “must have” information delivery to executives in –Strategy, Planning and Product Targeting –Business Development & Licensing –Competitive & Business Intelligence –R&D and Regulatory Affairs –API Sourcing –Patents & Intellectual Property Relied upon by the majority of the world’s generic pharmaceutical companies and API manufacturers Headquartered in Portland, Maine, USA

GENERICS: A $90B GLOBAL OPPORTUNITY Total World Pharmaceutical Sales: $600bn US, Canada: $50bn Latin America: $2bn Western Europe $17bn Rest of World: $4bn Eastern Europe & Russia: $10bn Source: TS Research, IMS Health, VOI PharmaHandbook Japan: $4bn China: $3bn

KOREA & THE KORUS FREE TRADE AGREEMENT Korean drug industry was $7.8 billion in 2005 of which generic drugs accounted for 15% of the market¹ Korean population is aging more rapidly than any other country with healthcare spending by those over 65 years old growing by 10% to 20% annually¹ KORUS FTA includes commitments to improve access of US innovative and generic pharmaceutical products to South Korean market² As of 2005, foreign company share of the Korean market was at 26%¹ Source: ¹ VOI PharmaHandbook 2006,IMS Health; ² Trade Factswww.ustr.gov

HOW COULD THE FTA IMPACT KOREAN GENERICS & API COMPANIES It will drive more branded sales as generics will see increased barriers to entry in Korean market It will increase foreign company share of Korean market It will provide enhanced access to the US market for Korean API and dose outsourcing supply It will have negative impact on Korean companies (both dose and API) given Indian and Chinese competition It will increase competition for domestic company share of Korean market Korea has the expertise to compete in other regulated markets and should look to US and EU supply opportunities for growth!

WHAT CHALLENGES WILL KOREAN GENERIC & API COMPANIES FACE IN THIS NEW ENVIRONMENT? India is excellent at low-cost, high quality finished dose products China is known for low-cost, high quality API and intermediates In- and out-licensing will be as important as domestic in-house product development A number of products worldwide coming off patent with a growing number of competing generic companies Early access to API is still the key to speed to market and success

AVAILABILITY OF HIGH-QUALITY API IN INDIA, CHINA & KOREA Source: Newport Strategies Horizon Global ™

US DMF FILINGS BY INDIAN, CHINESE & KOREAN API MANUFACTURERS Source: Newport Strategies Horizon Global ™

COS FILINGS BY INDIAN, CHINESE & KOREAN API MANUFACTURERS

TYPE I JAPANESE DMF FILINGS BY INDIA, CHINESE & KOREAN API MANUFACTURERES, Source: Newport Strategies Horizon Global ™

NUMBER OF API PLANTS INSPECTED BY THE US FDA SINCE 1990 IN INDIA, CHINA & SOUTH KOREA Source: Newport Strategies Horizon Global ™

ANDA APPROVALS BY INDIAN GENERICS Source: Newport Strategies Horizon Global ™

GENERIC DRUG & API MANUFACTURERES HAVE MANY QUESTIONS… What should I develop? How big is the market? What is the patent or exclusivity situation? Where do I source the API? Who is competing with us? Do I partner or develop alone? Where should I launch? Should I focus on regulated markets?

THE GENERIC PRODUCT DEVELOPMENT PROCESS Targeting Evaluation Deal Making Formulation Dev’t Registration & Review Launch Target possible candidates for development Research product candidates in detail Find the right partners Make products quickly and safely Get first approval Deliver to the customer! LaunchL – 18 months L – 8 yearsL – 7 yearsL – 6 years

THE ROLE OF INFORMATION IN THE GENERIC PROCESS Information Needs - Data Manufacturing Capabilities* Bioequivalence Stability Pharmacodynamics Toxicity Country Regulations* Pack Pricing* Reimbursement Sales* Dose Form and Strength* Patents, Patent Challenges* Labeling Chemistry, Synthesis Data Exclusivity* Market Exclusivity* Approvals API Sources* Company Data* Targeting Evaluation Deal Making Formulation Dev’t Registration & Review Launch *Available from Thomson Scientific

KEY BUSINESS NEEDS IN THE GENERIC PROCESS Business Needs - Functionality Access global market, intellectual property and product info* Predict key data in advance (e.g. competitiveness, generic launch date)* Flexible, fast searching across multiple, exacting criteria* Identify early, viable source of API supply and backup sources* Spot in- and out-licensing capabilities* Identify potential partner companies with multiple, exacting criteria* Keep a watchful eye on potential acquisition targets, track competitors* Targeting Evaluation Deal Making Formulation Dev’t Registration & Review Launch *Available from Thomson Scientific

HORIZONS GLOBAL: A GENERIC INDUSTRY STANDARD First launched in December 2002 –Version 3.5 released December 2006 –Version 4.0 targeted for summer 2007 Used by at least 3 of the top 5 companies in every generic market –100+ companies –2,500+ users Used by companies to strategically target products for development, find partners, and attract customers

Designed to meet key generic business needs: –Target products and companies –Evaluate products and companies –Find early API sources –Identify licensing opportunities –Track competitive developments Searchable content includes: –10,000 launched APIs –18,000 corporate groups and 3,500 API manufacturing sites –92 patent countries Incorporates unique intelligence and analysis on API development HORIZONS GLOBAL: A GENERIC INDUSTRY STANDARD (cont)

Please Come and Visit Us at our Booth James Noh Sales Manager Thomson Reuters Asia Pacific Tel : Fax: Mobile: David Harding Newport Sales Support Specialist Thomson Reuters 215 Commercial Street Portland, Maine USA + 1 (207) x27