Global Care Group help leading pharmaceutical firms establish manufacturing concerns, grow sales, and overcoming the complexity of licensing and marketing to consumers and healthcare providers in European and African Markets

OVERVIEW A leading pharmaceutical company from Belarus faces tough new challenges in establishing a new market in Europe and Africa. Manufacturers and providers need to establish repeatable processes to comply with increasingly complex EU rules to market pharmaceuticals in the European Market. Medicinal products manufactured and marketed in Europe must have a Marketing Authorisation (MA) to be placed on the market, granted by the Medicines Authority (through national, Mutual Recognition or Decentralised Procedures) or by the European Commission (Community registrations granted through the Centralised Procedure). Manufacturing and Marketing authorisations are granted nationally by the Medicines Authority in accordance with the Medicines Act, 2003 (Chapter 458 of the Laws of Malta) and the Medicines (Marketing Authorisation) Regulations (Subsidiary Legislation 458.34). Marketing Authorisations are granted by the European Commission in accordance with Regulation 726/2004. Global Care Group will assist with the complete process

BACKGROUND The company described in this case study has moved beyond the initial start-up phase and is well established is the official dealer of pharmaceutical products from CEI, Uzbekistan, Azerbaijan, etc. It provides its customers with effective, safe and high quality pharmaceutical products for the prevention and treatment of a wide range of diseases. A significant number of manufactured products are among the vital to treat cancer and tuberculosis, narcotic and psychotropic medicines, and ophthalmic dosage forms. They are producing almost all dosage forms: tablets with different coating, and without it, hard and soft gelatine capsules, solutions for injections and infusions in vials and ampoules, lyophilized and sterile packaged powder for injections and infusions, eye drops, ointments, creams and gels, powder in sachet packets. The company now wish to expend the Market into the EU and the African Market. In order to do that is in the process of studying the prospects of establishing itself centrally to have a base that logistically can reach its clients efficiently passing on the cost savings to its customers

SETUP OF A PHARMACEUTICAL

COMPANY

“NEW NAME LIMITED” OBJECTIVES Location Appointment of PQ Licencing Arrangements Local Gov. Negotiations Property / Factory Facilities Equipment Research & Development Corporate Structure Market Competition Risk Factors Return on Investment Analysis of Operations &

Projections Financial Projections &

Statements Additional Investment

EXPECTED RESULTS Obtain the required

licenses for a number of products to treat cancer and tuberculosis, antibiotics, narcotic and psychotropic medicines, and ophthalmic dosage forms

Negotiate with local authorities on permits and benefits.

Locate suitable Land or property for the factory and its facilities

Produce viable Product the EU and the African Market

WHY MALTA

The island’s political, economic and industrial stability together with a highly skilled and efficient English-speaking workforce make Malta an attractive location for pharmaceutical manufacturers to set up in Malta. Malta’s comparative advantages and strengths are: Familiarity Where English is the official language and corporate legislation is modelled on the British System Peace of Mind Economic, political and social stability More funds to reinvest and grow

your company Lower Tax Burden Lower Labour Costs Competitive cost structure with low social costs Easy to Relocate staff Excellent quality of life and safe environment for families High level of Government

Commitment Attractive Incentives Package, ease of access to regulators and public officials

THE NEW ORGANISATION - “NEW NAME LIMITED” The organisation is made up of a consortium of three companies, all bringing their own strengths. The most important qualities of this consortium is its balance, since it brings together leading industrial partners, who can project, manufacture, market and commercialise the product outputs. The consortium is made up of a local leading research organisation with over 30 years’ experience, with strong project management to bring this project into realisation through its experience and local contacts. The second company will bring the needed high innovation, real world experience of pharmaceuticals and manufacture facilities and its expertise for the project pilots. The Enterprise is a multistage production, based on science intensive technologies, producing over 300 kinds of medicines; whilst the third company will bring in the markets from Northern Africa, Middle East and Europe since it has been operating in these marketplaces for over 30 years with its own transport department allowing them to provide the customers with prompt delivery service «door to door».

LOCATION - MALTA Located in the centre of the Mediterranean, the Maltese Islands have been traditionally known for their thriving tourism industry. Their strategic location, a clear political commitment to ensure sustainable economic development and the islands’ highly qualified workforce, have ensured that the Maltese Islands’ become increasingly respected in the areas of trade and investment. In recent years, Malta has demonstrated both economic resilience as well as an ability to thrive. In fact, Government has developed a clear strategy for sustainable economic development through Vision 2015 and Beyond, identifying key sectors with high growth potential and the way in which Government plans to support their consolidation and success.

Malta’s Economy Malta’s GDP in 2013 amounted to €7.2 billion. During the same year, Malta’s economy in real terms grew at the rate of 2.4 per cent, contrasting very positively with the EU’s 28 average. In 2014 Malta’s economy kept its growth momentum, registering GDP growth of 3.5 per cent. Most of Malta’s key economic sectors have contributed to these results. The tourism industry has enjoyed another record year, while financial services are growing at a healthy rate. Online gaming and other IT-related activities, the aviation and maritime industries and, most notably, the manufacture of pharmaceutical products, all contributed to the Island’s above average performance. The Maltese economy is expected to continue to grow at a steady pace. Private consumption is expected to remain strong in 2015 reflecting strong labour market developments, moderate appreciation in wages, lower energy prices and lower effective income tax.

MALTA’S PHARMACEUTICALS INDUSTRY Malta boasts of a long history in the health care industry, dating back to the hospital Sacra Infermeria built in 1574 by the Knights of St John, which was considered as one of the most advanced hospitals of its time within Europe and which was used up until the end of the First World War. Malta’s dedication to this sector has ever been increasing, resulting in Malta being dubbed as having one of the best medical services within Europe. In recent years, Malta has witnessed significant growth in the Pharmaceuticals industry with exports of pharmaceuticals products increasing from approximately Euro 56m in 2005 to Euro 256m in 2012. Malta’s Pharmaceuticals industry today is host to a number of reputable Pharmaceuticals Manufacturers including Actavis, Sigfried, CombinoPharm, StarParhma and Aurobindo. This cluster is primarily composed of generic manufacturers engaged in the production of: • Active ingredients • Solid dosage formulations and capsules • Batch release, testing and validation

LICENSING OF PHARMACEUTICAL ACTIVITIES “NEW NAME LIMITED” plans to license all its products through the Malta Medicines Authority. Since its establishment the Medicines Authority has acquired a sound reputation for providing all the services efficiently and cost effectively which are required by the local pharmaceutical manufacturing companies. These services include the conducting of inspections of manufacturing plants and laboratories, in accordance with the EU principles and guidance of Good Manufacturing Practices (GMP). GMP certification may be granted in a timely fashion to suit the investing company’s start up plans.

“NEW NAME LIMITED”FACTORY

“NEW NAME LIMITED” plans to have state of the art factory set up to produce both Sterile and Solids. It plans to produce Vial, Tablets, and Capsules at the new Plant.

AUTHORISATION OF MEDICINAL PRODUCTS

Every medicinal product is granted a marketing authorisation before being placed on the market based on a positive risk/benefit assessment of quality, safety and efficiency according to EU and national legislation.

The Malta Medicines Authority processes applications for the granting, withdrawal, variations, renewals and revocation for all medicinal products related to licenses and authorisations. The Authority has also acquired the ability to allow Malta to act as a Reference Member state in the European Union.

“NEW NAME LIMITED” FACILITIES “NEW NAME LIMITED” plans to have a state of the art facility with the latest in technology meets ISO 5 – 8 cleanliness requirements, Transparent panels allow full visibility into a clean room. All-stainless steel, free-fixtures, including ceiling grid and hardware; no external bracing required. HEPA or ULPA fan/filter units will provide laminar flow of clean air Bi-swing door with self-closing hinges to maintain room pressure.

“NEW NAME LIMITED” MANUFACTURED PRODUCTS “NEW NAME LIMITED” plans to manufacture a number of products in different dosage and packaging. These may include but not limited to; TABLETS & CAPCULES Alendronic acid, tablets 70 mg №4 4 tablets in pack Anastrozole, tablets 1mg №30 30 tablets in pack Temozolomide, capsules 250 mg №6 6 capsules in pack Hydroxycarbamide, capsules 250 mg № 10 10 capsules in pack Mercaptopurine, tablets 50 mg № 50 50 tablets in pack Methotrexate, coated tablets 2,5 mg № 20 20 tablets in pack Methotrexate, coated tablets 5 mg № 20 20 tablets in pack

VIAL PACKAGING Calcium folinate, powder lyophilized 100 mg 1 vial in pack Calcium folinate, powder lyophilized 50 mg 1 vial in pack Cyсlophosphan, powder for injection 200 mg 1 vial in pack Cуtarabine, powder for injection 100 mg № 1 1 vials in pack Cуtarabine, powder for injection 1000 mg 1 vial in pack Docetaxel, powder for infusions 20mg/ml 4ml 1 vial in pack Doxorubicin hydrochloride, powder for injection 10 mg 1 vial in pack Fludarabine, powder for infusions 0,05 g № 1 1 vials in pack Gemcitabine, powder for infusions 1000mg 50ml 1 vial in pack Gemcitabine, powder for infusions 200mg 10ml 1 vial in pack Leucladin, solution for injection 0,1% - 5 ml № 5 5 ampoules in pack Leucladin, solution for injection 0,1% - 10 ml № 1 1 vial in pack Methotrexate, powder for injection 0,01 g № 1 1 vial in pack Methotrexate, powder for injection 0,05 g № 1 1 vial in pack Methotrexate, powder for injection 1000 mg № 1 1 vial in pack Oxaliplatin, powder for infusion 50mg 1 vial in pack Oxaliplatin, powder for infusion 100mg 1 vial in pack Paclitaxel, concentrat for prepare solution for infusion 30mg/5ml 1 vial in pack Paclitaxel, concentrat for prepare solution for infusion 100mg/16,7ml 1 vial in pack Photolon, powder for injection 100 mg 1 vial in pack Vinorelbine, powder for infusions 10 mg/ml 1ml 1 vial in pack Zoledronic acid, powder for injection 4 mg 1 vial in pack

The Plans are to expend the product range as the business grows and depending on the demand

FOCUS MARKETS The Consortium was formed to create a manufacturing concern that can market its product to Europe, the Middle East, and Africa. It provides its customers with effective, safe and high quality pharmaceutical products for the prevention and treatment of a wide range of diseases; topical remedy will be using MALTA Medicines Authority approved homeopathic ingredients for the simple purpose of healing the masses. The company is formed by 3 individual parties who will all contribute in order to market products internationally.

GUIDELINE CONSIDERATIONS Malta follows two EU directives and the rules governing manufacturing medicinal products. The pharmaceutical industry of the European Union maintains high standards of Quality Management in the development, manufacture and control of medicinal products. A system of marketing authorisations ensures that all medicinal products are assessed by a competent authority to ensure compliance with contemporary requirements of safety, quality and efficiency. A system of manufacturing authorisations ensures that all products authorised on the European market are manufactured/ imported only by authorised manufacturers, whose activities are regularly inspected by the competent authorities, using Quality Risk Management principles. Manufacturing authorisations are required by all pharmaceutical manufacturers in the European Union whether the products are sold within or outside of the Union Guidance for the interpretation of the principles and guidelines of good manufacturing practices for medicinal products for human and veterinary use laid down in Commission Directives 91/356/EEC, as amended by Directive 2003/94/EC, and 91/412/EEC respectively. Global Care Group will assist with the complete process

APPLICATION FOR A

MANUFACTURER’S/IMPORTER’S LICENCE FOR

MEDICINAL PRODUCTS AND/OR

INVESTIGATIONAL MEDICINAL PRODUCTS

FOR USE IN HUMANS

This is a 27 page document that is completed for the license application process to begin. There are also 2 other applications Required

APPLICATION FOR A CERTIFICATE FOR

GMP COMPLIANCE OF A MANUFACTURER

& APPLICATION FOR REGISTRATION FOR API IMPORT & DISTRIBUTION ACTIVITY

GLOBAL CARE GROUP

has full support from the Malta

Government, Malta Enterprise, Trade

Malta, Malta Grant &

Investment, Medicine Authority,

Science Park,

other Assistance from Idenity Malta,

Jobsplus and Mcast.

SHAREHOLDING Depending on the strenghts of each partner the following shareholding structure was esteblished and forms part of the Memorandum and Articals of the Company. Further tweaking may be necessary due to investment prospects.

ORGANISATIONAL STRUCTURE An organizational structure defines how job tasks are formally divided in to groups and coordinated. The new rules of operating in today’s global pharmasutical business environment make structure design even more critical. There are three key elements that needs to address for the organisational designs structure setup. These are: Administration & Finance, Production and Marketing. Work can be performed more efficiently if members and employees are allowed to specialize in their area of expertise.

Global Care (Malta)

50% Bernard Delhez

Karim Bendhaou

Brian Bondin

Paul Degiorgio

Joe Brincat

3rd Party Investor

50%

SENIOR MOST LEVEL JOB POSITIONS In “NEW NAME LIMITED”pharmaceuticals company, the senior most levels are taken by administrators, owners, board of directors and other important employees who are responsible for the overall management and running of the organization. The senior employees or working positions decide and set the goals for the rest of the employees to achieve and are also responsible for handling finances which form an important part of the success of any company.

QUALIFIED PERSON – QP (CHIEF MEDICAL OFFICER, CMO) The application is submitted by a QP and must be approved by the Medicen Authority; Applicant must either be an EU citizen (providing proof through a valid passport or identity card) or if a non EU citizen has a permanent Maltese residence and a Maltese working permit The applicant must have at least worked full time for a minimum of four years in an EU/EEA/MRA Competent Authority GMP certified manufacturing facility producing medicinal products for human use and covering the dosage form/s for which s/he will be interviewed and eventually accepted. Must have a primary degree, extending over a period of not less than four years, in a scientific discipline as specified in Subsidiary Legalisation 458.36 under the Medicines Act (in either pharmacy, medicine, chemistry, pharmaceutical chemistry and technology, or biology) issued by a University (MQRIC equivalence certification for foreign universities must be provided) The eligibility for QP status will only be for those dosage forms which the applicant had experience in, at the time of application and of the interview, and hence for additional dosage form/s, a new application has to be submitted and the above criteria have to be adhered to once again, as applicable. Global Care Group will provide a PQ to complete process

MIDDLE LEVEL JOB POSITIONS After the senior level employees comes the category of the middle level workers or employees who execute the plans and projects formed by the senior level employees. They supervise the lower level employees and make sure that the company and its operations run smoothly. The middle level executives hold the most important positions which decide the profit and success results of the company

ENTRY LEVEL JOB POSITIONS As far as authority is concerned, those working at entry level positions don’t hold important roles but they still form an important part of the company and are responsible for day to day tasks and functions. The entry level positions are held by those who are not very experienced

STARTUP BUDGET The estimated start up investment requirement is estimated at around €30 million Euros. Investor to provide 100% for a 50% Share

START-UP COSTS Cost (€)

Registrations

Business name

Licences

Permits

Domain names

Trade marks/designs/patents

Vehicle registration

Membership fees

Accountant fees

Solicitor fees

Rental lease cost or Mortgage (deposit)

Utility connections & bonds (Electricity, water)

Phone connection

Internet connection

Computer software

Training

Wages

Stock/raw materials

Initial Regulatory Preparation and Submission

Covers the staff time associated with preparation/submission

Research Fees: One time fees

Sponsored Research Coordinator Start-up

Admin Start-up Cost

Insurance

Building & contents

Vehicle

Public liability

Professional indemnity

Product liability

Workers compensation

Business assets

Business revenue

Other Expenses

Printing

Stationery & office supplies

Marketing & advertising

Total start-up costs

ESTEMATED BUDGET Income Statement Distribution (Start)

Income Statement %

Gross Revenues 100.00%

Less: Cost of Goods 60.00%

Gross Margin 40.00%

Operating Expenses 20.00%

Salaries & Benefits 2.00%

Utilities 4.00%

Other Expenses 2.80%

Depreciation 28.80%

Total Operating Expenses 11.20%

Net Income Before Interest &

Tax -0.50%

Net Interest Income (Expense) 3.00%

Net Income (Loss) 32%

Balace Sheet (Start)

Balance Sheet K €

Assets

Cash & Equivalents 500

Inventory 2,000

Accounts Receivable 800

Property, Plant, Equipment 28,100

Less: Depreciation - 500

Total Assets € 30,900

Liabilities

Accounts Payable 400

Debt 1,000

Deferred Taxes -

Total Liabilities 1,400

Equity 28,100

Total Liabilities & Equity € 30,900

At this stage it is estimated that the building would be purchased with the help of Government Land. An alternative is the purchause of a pre-existing factory

EQUIPMENT/CAPITAL COSTS Cost (€)

Business / Property purchase price

Other renovation costs

Start-up capital

Plant & equipment

Vehicles

Computer equipment

Computer software

Phones

Staff Room Equipment

Security system

Packing Machines

Conveyors

Clean Room Equipment

Manufacturing Equipment

Office equipment

Furniture

fit out & Decoration

Air-conditions

Total equipment/capital costs

Return on Investment is estimated and expected in around 5 years

QUICK AND DIRTY P&L FORCAST

P&L 2019 2020 2021 2022 2023

Sales 2,512 6,580 10,200 16,400 23,000

Total Headcount 18 20 30 40 60

Gross Revenues 6,280 12,500 24,000 32,000 55,000

Less COGS 3,768 6,990 13,800 16,600 32,000

Gross Margin 2,512 5,510 10,200 15,400 23,000

Operating Exp.

Start-Up Exp. Dep. - 30,000 - 28,363 - 24,353 - 16,753 - 6,853

Other Exp. & Headcount

- 875 - 1,500 - 2,600 - 5,500 - 12,000

Net Income (Before Taxes)

-28,363 -24,353 -16,753 -6,853 4,147

Cash & Distribution (Start)

Cash Flow K €

Starting Cash 500

Receipts

Collections 500

Financings -

Total Receipts € 500

Disbursements

Payments to Suppliers 400

Salaries & Benefits 200

Utilities 20

Other Expenses 40

Interest Expense 5

Tax Payments -

Total Disbursements 665

Net Increase (Decrease) in Cash - 165

Ending Cash € 335

MORE ACCURATE FIGURES TO FOLLOW

OUR MISSION

To contribute to the enrichment of quality of life around the world through the creation of innovative pharmaceuticals, and through the provision of pharmaceuticals addressing diverse medical needs.

VISION To be an innovator with Competitive Advantage in Oncology and other Pharma products To have Specialty area business centered on the core business To have enriched regional value products aligned with regional market To have innovative products and pipeline changing SOC To realize shareholders’ value through highly efficient management

CORE VALUES AND COMMITMENTS In alignment with our mission, we have identified "Core Values and Commitments" as the basis for an attitude of cooperation and proper value judgments and as the criteria for our business activities and decision making. In addition, we have established Corporate Conduct Charter to act with the highest ethical standards and a good social conscience appropriate for a company engaged in a business that affects human lives. Core Values comprise the following: Innovation, Integrity, and Accountability. Based on our "Core Values", we have formulated our "Commitments". Each member of the company should look back to the Core Values and Commitments before embarking on a course of action.

Core Values Innovation Integrity Accountability Notes

Innovation the introduction of new ideas, methods, or invention

Integrity the quality of being honest and of always having high moral principles

Accountability being responsible for the effects of your actions, and being willing to explain or be criticized for them

Commitments 1. To create innovative medicines changing SOC 2. To take a global perspective, and respect regional values 3. To foster intellectual curiosity and strategic insight 4. To provide the highest quality medical information 5. To provide a stable supply of top-quality pharmaceutical products 6. To be an ethical, trusted, and respectful partner 7. To be accountable for achieving our goals 8. To demonstrate professionalism, respect for others and teamwork