Serialization – Business Drivers, Building Blocks Riya Cao, Vertical Director of Life Sciences, QAD Guido Van Den Broeck, Senior Product Manager, QAD Rick Seibert, Vice President, Sharp Corporation QAD Explore 2012

2 The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. Safe Harbor Statement Serialization – Business Drivers, Building Blocks

3 Serialization Status Update Industry drivers and requirements Serialization building blocks QAD solutions Customer case study Wrap up Q and A Agenda Serialization – Business Drivers, Building Blocks

4 Riya Cao Overview, Industry Drivers & Requirements Serialization – Business Drivers, Building Blocks

5 Unique identification number Serialization Overview Serialization – Business Drivers, Building Blocks

6 Combat counterfeit -7% all merchandise globally -10% pharmaceutical products globally Industry requirement -Customer requirements -Regulatory requirements Industry Drivers Serialization – Business Drivers, Building Blocks

7 Roch cancer medicine Altuzan found in U.S. Counterfeit hybrid eXtreme Uniclamp(TM) Repair Kits Counterfeit Serialization – Business Drivers, Building Blocks

8 Automotive -OEM -VIN -Sequencing -MMOG/LE Government contracts -Defense -Aerospace -Component level Customer Requirement Serialization – Business Drivers, Building Blocks

9 Consumer products -Walmart -Big box retailer -New vending Electronics -Finished goods -Components Customer Requirement Serialization – Business Drivers, Building Blocks

10 Life sciences -CA ePedigree -FDA serialization guidance -International serialization requirement Turkey China Greece Italy Netherlands (proposed) Regulatory Requirements Serialization – Business Drivers, Building Blocks

11 Life sciences -Wholesalers -Distributors -Hospitals -OEM customers Customer Requirement Serialization – Business Drivers, Building Blocks

12 Guido Van den Broeck Building Blocks and QAD Solutions Serialization – Business Drivers, Building Blocks

13 Operations impacted Serialization for Manufacturers Serialization – Business Drivers, Building Blocks

Packaging Serialized data management Warehouse – serialized inventory Data carrier (labeling) Communication and reporting Serialization - Building Blocks Serialization – Business Drivers, Building Blocks 14

15 Building Block #1 - Packaging Serialization – Business Drivers, Building Blocks Unit Serialization (Lot 123) Each saleable unit is assigned a unique identifier Case Serialization (Lot 123, 24 units per case) Units packed into cases. Each case is assigned a unique identifier and each unit (child) is associated with the case (parent) Pallet Serialization (Lot # 123, 128 cases per pallet) Cases packed onto pallets. Each pallet is assigned a unique identifier and each case (child) is associated with the pallet (parent)

16 Packaging types Packaging structures Default packaging structures per item per origin/destination Label Formats QAD - Packaging Master Data Serialization – Business Drivers, Building Blocks

Multiple serial ID formats (GS1, SSCC, SGTIN) Buyer regulated serial ID ranges Multi-level aggregation serial ID’s Identify inventory by serial ID’s and Lot ID’s Track & trace throughout life cycle serial ID’s Building Block #2 – Serialized Data Serialization – Business Drivers, Building Blocks 17

QAD – Serialized Data Management Serialization – Business Drivers, Building Blocks 18

Building Block #3 – Serialized Inventory Serialization – Business Drivers, Building Blocks Warehouse / Distribution 19

20 Lot control segregated from serial control Aggregation Serialized Packs Integrated with inventory transactions (Native API’s) Packaging transactions (build, remove, repack…) QAD - Serialized Inventory Management Serialization – Business Drivers, Building Blocks

21 Linear 2D Matrix RFID Building Block #4 – Label Printing Serialization – Business Drivers, Building Blocks

22 Setup printers for label printing Print barcode labels directly from key transactions Label design using 3 rd party software (label template) Label format definitions Generate file with fixed and variable data according to label format Connect to hardware via different communication protocols QAD - Label Printing Manager Serialization – Business Drivers, Building Blocks

Communications, integration and reporting Building Block #5 – Communication, Reporting Serialization – Business Drivers, Building Blocks 23

24 Native API’s Q-Docs (QAD QXtend) Serialization logic integrated in API’s for inventory transactions Outbound ASN support serialized packs / items(RxASN) Reporting Serialization Data Communication/Integration Serialization – Business Drivers, Building Blocks

25 Business Flow Example – Item Serialization Serialization – Business Drivers, Building Blocks Receive sales order Receive authorized ID ranges Work order preparations Work order execution Pack receipt by WO Pack move to warehouse Pick goodsPack goods Load packs in truck Confirm shipments RxASN Serial reporting

26 Rick Seibert Sharp Corporation Company Overview & Case Study Serialization – Business Drivers, Building Blocks

27 Package specialized products Oral Solid dose Specialized drug delivery systems -OTF/TD Liquids Creams Powders Ointments Contract Services / Programs Standard Packaging -Blisters -Bottles -Pouches Compliance Packages Vial Labeling/Kit Design Serialization & Track & Trace Clinical Trial Materials Packaging Specialty Distribution -Physician Samples -Cold Chain Sharp Capabilities Sharp Corporation – Company Overview & Case Study

28 Customer Base Sharp Corporation – Company Overview & Case Study

29 United Drugs Packaging Group Sharp Corporation – Company Overview & Case Study European Packaging Centre Heerenveen, Oudehaske The Netherlands Sharp Corporation Allentown, Pennsylvania Conshohocken, Pennsylvania United States TD-Packaging Swindon UK Enestia Hamont-Achel Belgium UDPG – ‘International Reach, Local Focus, One voice to the customer’

30 US Locations Sharp Corporation – Company Overview & Case Study 3 Primary locations in the US 9 Account Executives covering the US ~ 500,000 sq. ft. of packaging space Approx. $120 million in turnover Approx. 750 Full Time Employees Approx. 120 Pharmaceutical Customers Acquired by United Drug, plc 2008

31 Packaging Sharp Corporation – Company Overview & Case Study Packaging is becoming a strategic function within the supply chain Packaging Functional Strategic Protect the drug Protect the user – child resistant (CR), senior friendly, braille. Protect the brand and user through: Increased compliance Reduced diversion Reduced counterfeiting Reduced reimbursement fraud

32 Project Consulting and Project Management -Package and process definition Serial number management services Data Carrier selection and line integration -2D barcodes, RFID Tags -Pre-serialized carton/tag aggregation services ERP integration services Flexible solutions custom fit into value added programs -REMs solutions -Physician, patient and care giver training and counseling programs -Patient registries -Event based reporting -Data management and customer interface Specialty distribution, cold chain distribution ST&T Services Provided Sharp Corporation – Company Overview & Case Study

33 QAD -QAD EA ™ -QAD WMS ™, QAD TMS ™, QAD Serialization ™ Covectra AuthentiTrak™ Solution -Saas and on-site system configuration/integration -ERP interface -Serial number management services -Solution development and integration services Systech International – Serialized Product Tracking (SPT)™ - Systech Guardian™, Systech Advisor™, Systech Sentri™ Technology Partners Sharp Corporation – Company Overview & Case Study

34 Sharp Architecture Serialization Sharp Corporation – Company Overview & Case Study

35 Regulatory Compliance -Federal, State, and International requirements -PDMA requirements Product diversion REMs Programs Product counterfeiting, safety Supply Chain Efficiency -Returns processing -Charge-Back authentication, verification Compliance and Adherence programs Patient, Physician and Care Taker education/counseling Market Drivers for ST&T Implementation Sharp Corporation – Company Overview & Case Study

36 “Use of mass serialization to uniquely identify all drug products intended for use in the United States is the single most powerful tool available to secure the US drug supply” – FDA Counterfeit Drug Task Force 2004 Pfizer have ear marked €150 million for investment in serialization in 2012 AstraZeneca has implemented serialization on 25 packaging lines in the UK, Sweden and China. Regulation is driving this relationship through serialization

Substance Addiction “A Case for Integrated Solutions” Sharp Corporation – Company Overview & Case Study The Key Stakeholders -PharmaCo – Our “Customer” -The Patient -The Clinician -The Payer/PBM (Pharmacy Benefits Managers) -Regulatory Agencies The FDA The DEA

38 Losing patent protection/exclusivity on the existing formulation -Pending generic entry Launching a new formulation which changes prescribing habits Different product requirements for US and ROW Limited physician demographics (training and monitoring) Regulatory approval risks – REMs, delays, etc. Customer Challenges Sharp Corporation – Company Overview & Case Study

39 Withdrawal Confidentiality – “stigma” Isolation Disease state itself Need for information and access Convenience Education Cost Patient Challenges Sharp Corporation – Company Overview & Case Study

40 Training Practice Management Technology access Clinical support – clinical outcomes Patient base monitoring Certification - regulation Clinician Challenges Sharp Corporation – Company Overview & Case Study

41 Clinical endpoint? Efficacy Availability Compliance and Adherence Control of supply chain Therapeutic choices -Efficacy Diversion Payer/PBM Challenges Sharp Corporation – Company Overview & Case Study

42 Drug Diversion and Black Market Patient Safety Community Safety/Child Safety Crime Monitoring Physician accounting REMs Regulatory Agency Challenges Sharp Corporation – Company Overview & Case Study

43 Integrated Multi-Channel Strategy Sharp Corporation – Company Overview & Case Study 16 years experience designing compliance and persistency programs In-Out bound support HCPs & Patients Multi-Channel Compliance Technologies Fulfillment Department for Direct mail solutions Tele-ServicesTele-Services Nurse Educators PackagingDesignPackagingDesign HCP/ Patient Educational Programs Select Targets & Deciles ‘Total Office Call’ Synergy with Sales Force COLLABORATION Multi-Channel Compliance Solution COLLABORATION Engaging Patients Informing Patients Guiding Patients By Design

44 Wrap-Up Serialization – Business Drivers, Building Blocks

45 Meeting Regulatory Requirements -Compliancy California ePedigree Act (2015) -Similar requirements other countries Enhanced product Safety and Integrity -Increased granularity in tracking and tracing inventory -Speed Up and reduced cost of product recall process -Detect and eliminate counterfeiting Business Values Serialization Serialization – Business Drivers, Building Blocks

46 Opportunity for Business Value -Compliancy Customer Requirements -Branding & customer Loyalty -Explore New Markets Improving Business Operations -Accuracy Inventory / Order Fullfilment / Shipping Performance -Increased Inventory Visibility accross Supply Chain Business Values Serialization Serialization – Business Drivers, Building Blocks

QAD Serialization Summary Serialization – Business Drivers, Building Blocks 47 Packaging Serialized Data Management Data Carriers/ Label Printing Serialized Inventory (Transactions) Communications / Integration QAD Serialization QAD Serialization QAD Serialization QAD Serialization QAD Serialization

Mar AprMayJunAugSepOctNov Jul 2012 JulAugSepOctNovDecJanFeb 2013 Serialization+ Solution Timeline Serialization – Business Drivers, Building Blocks 48 Early Adopter Generally Available

Demo Theater -Demo Demo Theater 7 PM Expo QAD Booth Engage with your QAD account manager Next Steps Serialization – Business Drivers, Building Blocks 49

50 Riya Cao Vertical Director of Life Sciences, QAD Guido Van den Broeck Senior Product Manager, QAD Rick Seibert Vice President, Sharp Corporation Questions & Answers Serialization – Business Drivers, Building Blocks

51 © QAD Inc 2012