hale & tempest the sustainability of the generics industry – rethinking the future dr. brian w...

Hale & Tempest

The Sustainability of the Generics Industry – rethinking the future

Dr. Brian W Tempest

www.briantempest.com

World Generics Congress, London, UK 29 February 2012

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Dr Brian Tempest advises Companies, Banks, High Net Worth Individuals and Investment Funds on their Strategy in the Emerging World based on his wide experience in China, Japan, South East Asia

and India where he has lived for the last decade.Brian has worked for Ranbaxy Laboratories since 1995 holding the position of Managing Director and Chief Executive Officer until 2005. He was then Chief Mentor and Non Executive Director until 2008 when he retired. He is one of the few westerners to have led a Sensex Nifty 50 Indian blue Chip MNC and as a result has a valuable insight into India. Brian has also worked for Glaxo as Regional Director

Far East and Regional Director Middle East & Africa from 1985 to 1992.Brian has worked in the Pharmaceutical Industry for the last 41 years and has managed Healthcare

businesses in North America, South America, Europe, Africa, Middle East, Australasia, China, Japan and India. He has also led many sessions at Investor Meetings held around the world.

He is now Independent Chairman of Religare Capital Markets PLC , a Non Executive Director of Fortis Healthcare the leading Asian Healthcare Company, a Non Executive Director of SRL the

largest Indian Diagnostic Company and a Non Executive Director of Glenmark Pharmaceuticals. He is a member of the SCRIP Global awards panel and is on the Editorial Board of the Journal of

Generic Medicines. Brian speaks at global conferences and more information on these presentations can be found on his website www.briantempest.com.

Brian has a PhD in Polymer Chemistry from Lancaster University in 1971 and in 2009 he became Chairman of the Advisory Board for the Lancaster University Management School, UK. He is a

Fellow of the Royal Society of Medicine and a Fellow of the Royal Society of Chemistry and is a Chartered Chemist. He is now Chairman and Senior Partner of Hale & Tempest Co Ltd

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Healthcare Pressures Forever - 2050

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Healthcare will explode further in Asia

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Consolidation in Generics 2003 - 2010

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Structural Changes -

Big Pharma

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Fewer New Molecules Approved

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Only 21 2010 FDA New Drug Approvals Source: Fiercebiotech 22 Jan 2011

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Approvals & Reimbursements Source: Pharmatimes UK August 2011

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US 2010 False Claims Fines Chemistry World Jan 2011

2011 False Claims Fines - Pfizer $2.3b, Lilly $1.4b, J&J $1.b

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Top Five US Industries for layoffs in 09/10Source Challenger, Gray & Christmas

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Merck – No 1 Layoffs in 2011 source FiercePharma

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Big Pharma Strategies

Share repurchase - AZ, Pfizer, Sanofi Aventis Shedding businesses – Pfizer $1.9b nutrition,

$3.6b animal health, £2.4b Capsugel Eye Care - Novartis & Alcon Consumer Healthcare – Sanofi Aventis, GSK OTC – P&G with Teva DPI Inhaler – Pfizer & Mylan Generics – Pfizer, Sanofi Aventis, AZ Pharmemerging – GSK, Abbott, Daichi Sankyo

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M&A Deals in Pharmemerging MarketsSource: Company Filings, Mape Securities

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Structural Changes -

Generic Companies

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Pricing PressuresSource: Watson

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Mylan won’t follow “irrational behavior” Source : Generics Bulletin 5 August 2011

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India Pharma Stock has consistently outperformed Global Peers Bloomberg

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Emerging Market Equities in last 12mSource: 30 Jan 2012 Business Standard

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Rising CompetitionSource: JM Financials 24 August 2011, Deutche Bank 8 July 2011

With generic Lotrel higher strengths there was an unexpected excessive number of generics approved after the exclusive period ended

Increased competitive activity with para 4 filings. Multiple players for small opportunities.

Small new Indian players in para 4 - Macleods for Lipitor, Hetero for Nexium

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Top 25 Global Generic CompaniesSource: Generics Bulletin 10 June 2011

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Next 24 Global Generic CompaniesSource: Generics Bulletin 10 June 2011

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USA Generics Filings Source: Deutsche bank July 2010

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Pending ANDAs source: Deutsche Bank Jan 2012

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US Litigation Risks are Substantial

Patent Challenges on rise - 65 FTFs in 2009 Generic success rate at 48% (76% with deals) 3 courts hold 69%, with 36% success e.g. NJ 4 courts never ruled against generics e.g. NY At Risk launches on the rise - 6 in 2009 Teva has 12 of the 28 At Risk launches 2002/9

Source RBC Capital Markets January 15 2010

Recent At Risk launch damages include – Apotex $0.3b, Sun $0.9b, Teva $1b+ Famvir

Teva rethinking At Risk strategy

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China Pharma Industry Capex PlansSource: Stravencom

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India Pharma Industry Capex PlansSource: MAPE

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FDA DMFs from China 3Q 2011

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Indian Companies Changing HandsSource Mint Research December 13 2011

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Frost & Sullivan forecast the Global Generic Market at $231b in 2017 FiercePharma

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70% of Top products will be Biologic-2016Source: Sandoz EGA Conference 2011

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Biosimilar Patent Expiries $17b in 2015 Source: Sandoz

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Biosimilar Patent Expires $64b in 2015Source: IMS

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Number of mABs entering the clinic annually rose to 54 in 2008 Source: Tufts

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How much is a Biosimilar worth?Source: Datamonitor

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Recent Biosimilar Deals

Cipla & Biomab, China $165m 12 products Richter & Stada – mABs Celltrion, Korea & Hospira, Egis, Hikma, BB Biocon & Mylan, USA Teva & Lonza, EU Biocon Idec & Samsung, Japan Watson & Amgen, USA Fuji Film & Kyowa Hakko Kirin Baxter & Momenta, USA Actavis & Bioton,Poland Pfizer & Hisun, China

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A New World Order in Generics is Coming

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Thank Youbrian.tempest@clara.co.uk

www.briantempest.com