International Market EntryAnalysis - Planning - Engagement - Operations

Prepared by: Asa CoxFounder

Founded in 2008 as Genericlicensing Ltd, the business launched the first searchable database of dossiers available for licensing. Swelled from 500 products to 9000 products in 2012. 3000 licensing teams worldwide access the data from 150 developers.

In 2011 the company became Generic Pharma 2.0; branching into the OTC & Biosimilar sectors.

In 2012 a publishing division was created with the launch of New Pharma Thinkers in; followed by a Digital Engagement business, connecting multiple industry websites to generate leads worldwide.

These innovative communication and data businesses have helped create an unparalleled industry network; creating a unique channel for new opportunities and a platform to offer growth consulting services.

For a more detailed background view this presentation

About Generic Pharma 2.0

Generic Pharma 2.0 is unique its in position as the only industry specialist with a global footprint. We cover all of the major regions with on-the-ground experts.

Offices in London (UK) and Toronto (Canada)

Exclusive consulting associates in:

Asia Western Europe MENA- Tokyo (Japan) - Hamburg (Germany) - Damascus (Syria)- Singapore - Madrid & Barcelona (Spain) - Algiers (Algeria)- Shanghai (China)- Dhaka (Bangladesh) Eastern Europe Central Asia

- Warsaw (Poland) - via Athens (Greece)Latin America - Sofia (Bulgaria)- Buenos Aires (Argentina) Baltics- Sao Paulo (Brazil) Russia and CIS - Vilnius (Lithuania)

- via Switzerland

All of our team has deep experience in the pharmaceutical industry. Many have been senior managers in global generic companies; responsible for significant growth and strategic projects.

Growth Consulting Services

Analysis of market entry portfolio Competitor analysisQualitative analysis Direct competitors in segment- Validation of IMS data by in-market expert - Market shareSegment characteristics - Tactics and stated plans- Trends and changes - Strengths & Weaknesses- MOH plans Opportunities & Threats

Priorities & Pricing Expectations- Sequence of introduction - Market penetration scenarios- Optimal price level - Initial sales projections

Market Entry Options Overview Review of findings- Regulatory & legal requirements - Select market entry option to investigate- Likely investment requirement- Challenges Deliverable- Probability of success - Written report with data, analysis & recommendations

Cost: $5,000-10,000 per country

Step 1 - Analysis

SWOT Analysis- Extensive, in-depth evaluation of chosen market entry strategy- Select primary research with market 'players' to validate assumptions

Infrastructure & know-how requirementsRegulatory - submissions, updates, PV, reportingSales - number of reps, experience, geographical spread, knowledgeMarketing - design, implementation, managementFinance - government filing, processing, management, reporting, taxLegal - trading entity, management, reporting, timetablesSupply Chain - purchasing, logistics, importation, documentation

Review of findings- Investment requirements- Timelines- Business challenges

Deliverable- Written report with data, analysis & recommendations

Cost: $5,000-7,500 per country

Step 2 - Planning

Business Model & Product Validation- Preliminary discussions with 'friendly' contacts to confirm likely success- Obtain initial feedback on proposed portfolio by long term contacts- Report competitor intelligence and deal valuations for business case validation

Partners & Customers- Engage partners with presentation and specific product opportunities- Build partnership or product business case- Present rationale and recommendations before next steps

Arrange Meetings- Set up week long meeting trip with all selected companies

Follow Up- Work through business evaluation, contract negotiation and relationship building- Can act as local representative or only provide support when required (ie, face-to-face meetings)

Cost: $10,000-15,000 per 10 qualified meetings with follow up$5,000-10,000 success fee per agreement signed

Step 3 - Engagement

Business Set Up RecruitmentIntroduction to : - Recommend and engage key operational team- Lawyers & accountants - Provide cross references and industry reputation checks- Recommend office space- Regulatory consultants Cost: $250/hour or $1000/day + expenses- Ministry of Health agents- Pharmacovigilance partner- Importation & logistics partners etc- Contract sales

Marketing launch- Improve profile to establish credibility and invite inquiries- Build trade and channel relationships- Local language website and marketing materials

Cost: $1500-$5000/month + $2500-5000 for designNote: We have a dedicated marketing division - DigitalGiants

Step 4 - Operations

Generic Pharma 2.0 can offer market entry services on a per country basis or across a whole region.

The follow pages contact some specific markets believed to be of interest

Market Details

Top Level Information$70bn regional pharma market. 119% growth forecast to 2021.7 of top 10 highest GDP growth countries are in Latin America.Considered commercially High Risk by PhRMA, worry of anti-American sentiment. 50/50 in BMI Risk/Reward index. Brazil, Argentina & Mexico above 60% positive.Strong socialist governments spend big on healthcare but protect domestic industry.

Recommended StrategyJV/Partner with local company with strong local position and own manufacturing (esp. Brazil).Set up regional hub in smaller market (e.g Columbia or Chile) where approval times are quicker.

Success CriteriaValue added products; standard generics are all made locally.Finding the right partner for sales and marketing to compete with major domestic players

Local ExpertFormer LATAM Head for leading global generic player

Case StudyEstablished local business unit for international pharma company; created from ground up to multi-million revenue operation. Devised strategy, portfolio and oversaw all business operations.

Latin America

Top Level Information203million population. $3.8trillion GDP, growing 7.5% p/a. $12,000 per capita. 21% still below poverty line.$25billion drug market. Growing middle class provides strong growth (doubled in 10 years!)Foreign market entrants grew 40% in 3 years to 2011. $2billion of deals with domestic players closed.Major companies have sales force of 2000; middle management often have $200,000 salaries.

Recommended StrategyJV/Partner with local company with strong local position and own manufacturing.Distribution evolving to tech transfer and supply of supply elements (e.g API)

Success CriteriaValue added products; standard generics are all made locally.Finding the right partner.

Local ExpertsFormer Director of Brazil subsidiary for major international generic company.

Case StudyEstablished local business unit for international pharma company; created from ground up to multi-million revenue operation. Devised strategy, portfolio and oversaw all business operations.

Brazil

Top Level Information42m people, concentrated in the Buenos Aires state, the largest state of the country (25%). 27% GDP growth forecast for 5 years. Current GDP $500 billion$5.7bn Pharma market. 44% of total sales belong to local companies; the generic sector is 20%.40-50% reimbursed to the patients: 15% by Pharma Co's, 15% Medical Insurance..Local industry is very strong. Imports replacement enforced by government where available.

Recommended StrategyJV/Partner with local company (who must own majority). Local manufacturing highly suggested.Generics pharma to be sold directly to public and private hospitals and also directly to health insurance.

Success CriteriaValue added products; standard generics are mostly made by local branded generics producers.Finding the right partner who has connections with major public buyers.

Local ExpertFormer International Business Manager for LATAM Spanish region of an Argentinean company. Broadknowledge and expertise in commercial, regulatory and operations.

Case StudyDesign, development and management of two companies, one in Brazil and the other in Mexico as well aslicensing management all over LATAM. National responsibility for all Argentina.

Argentina

Top Level Information'Pure' generic market dominated by major players and multinational Indian companies; especially for simple formulations. 505b2 sector increasingly saturated, but still opportunities for complex products. Paragraph IV / first-to-file projects still provides greatest return but are highly competitive and litigation is expensive ($3-5m). Many mid-size companies seeking to grow portfolio quickly. Number of small development companies seeking partners. Few competitive manufacturing sites except for niche formulations or special handling.

Recommended StrategyProgressive approach; licensing to strategic partnership to JV/acquisition or greenfield set up. Model depends on investment capital, risk tolerance, portfolio and long term intent.

Success CriteriaSales are controlled by a small number of large wholesalers/distributors; it is imperative to have a partner or sales team with deep relationships. Differentiated portfolio will get most interest, although flexible business models on holder products are attractive (if reasonable competition).

Local Experts- CEO Asa Cox is highly connected in the US industry- 2 Former VP's Business Development for leading global player

Case StudyEngaged all major marketing players and select upcoming speciality companies to license niche European generic product. Competitive bid scenario resulted in multi-million licensing fee and option for future products.

USA

Top Level Information1.4billion population. 20% of world population. By 2040 China will have a $124trillion economy.Non-state companies produced 70% of GDP. 20% of luxury good are bought in China. Chinese hospitals spent $3.5bn; revenue from pharmacies is nearly $7bn. 350m have state pension. 10% personal budget spent on healthcare. Trading up is a mega-trend.China dominates the API industry, 3000-4000 domestic finished dose manufacturers. 95% generics.

Recommended StrategyPartner/JV with local manufacturer who owns product approvals; build relationships with key distributors over time and with strong management team.

Success CriteriaConnections at highest levels of corporations and government. Long term view.

Local ExpertEstablished international business development business in 1987; connected at all levels and across broad spectrum of health care industry. Local team on hand to run projects.

Case StudyEvaluated international portfolio for market potential in China; identified suitable partners and engaged. Build business case, business model and managed all transactional requirements.

China

Top Level Information36m people (80m including neighbouring Morocco & Tunisia), concentrate in north of country.10% GDP growth forecast for 5 years. $190bn positive trade balance; 99% oil. $3bn Pharma market. 86% public funded. 79% generic market. 80-100% reimbursed. Strong Gx incentives.Industry focused internally, many imports banned. Value still 64% on imports.

Recommended StrategyJV/Partner with local company (who must own majority).Distribution evolving to tech transfer and supply of supply elements (e.g API)

Success CriteriaValue added products; standard generics are all made locally.Finding the right partner.

Local ExpertEstablished local businesses for European clients. Founder of only pharmaceutical exhibition in country.Business background with best network of decision makers available.

Case StudyEvaluated portfolio for major international generic company. Provided 5-year forecasts based on tiered partnership recommendation. Engaged local companies and established local JV.

Algeria

Top Level Information6.5 million population (3m-LIT, 2.2-LV, 1.3-EE), $138 million GDP, growing 3% p/a.$20,000 per capita, all 3 countries are European Union members. 800 million Eurodrug market, growing 3% p/a; 90%-retail, 10%-hospital; 70%-Rx, 30%-OTCgenerics by value (38%-LIT; 34%-LV; 28%-EE), generics by units (53%-LIT, 58%-LV, 49%-EE)Reimbursement budgets for pharmaceuticals are flat; 0.5 million Euro - average sales.Recommended major companies have sales force of 30 to target pharmacy chains.

Recommended Strategy1) Licensing to one or several partners 2) JV/acquisition 3) Representative office. Model depends on investment capital, risk tolerance, portfolio and long term intent.

Success CriteriaSales are controlled by a small number of large pharmacy chains; it is imperative to have a partner or salesteam with deep relationships. Differentiated portfolio will get most interest, although flexible businessmodels on holder products are attractive (if reasonable competition).

Local ExpertFormer Lithuania country manager and regional head for leading ethical and generic manufacturingcompanies. Former member of the board of the pharma industry association. Strong relationshipsthroughout region since launching independent consulting business for licensing in/out

Case StudyEstablished local business unit for several international pharma companies; created from ground up to aseveral million revenue operation. Devised strategy, portfolio and oversaw all business operations.

Baltics

Top Level InformationThe CIS market in 2011 was $25.5bn of which Russia was $18.8bn where the growth rate in 2012and 2012 will be ±10%. In Russia there is the so-called “2020 Vision” where the declared aim of theRussian government is to have 50% (by value) of all medicines sold in Russian to be made locally.Corruption is an issue with most CIS countries at position 130 or below; the exceptions are Moldova(36) and Georgia (51). (Canada has position 9).

Recommended StrategyIn view of the current long registration time in Russia (>2.5 years), it is best to start in in parallel toRussia with some of the smaller markets where sales can be achieved faster. Choose a local distributorwith adequate promotional capabilities; representative office in larger markets.

Success CriteriaValue added products: standard generics are either made locally or imported from India, sometimesChina; finding the right partners; long term view.

Local ExpertFormer Export Director of Middle sized companies active in the CIS, Balkans and Baltic States with>20 years’ experience; contacts at all levels throughout the CIS.

Case StudyEstablished business from scratch in all the CIS markets for ethical and generic manufacturers.Devised strategy, portfolio and oversaw all business activities.

Russia & CIS

Generic Pharma 2.0 Incwww.genericpharma20.comCanada: +1 705 615 1500UK: +44 (0)845 453 1376

asa.cox@genericpharma20.com