The Global Generic Medicines Market through an Investment Banker's Crystal Ball

Vijay P. Karwal, CFA

Managing Director, Head of Industrials, Consumer and Healthcare, CIMB Investment Bank

5 December 2012

1

Should we trust investment bankers to read the future? Development of market capitalization of investment banks - Jan 2007 to 2012YTD (USDbn)1

0

20

40

60

80

100

120

140

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

GS JMP BofA MS CS UBS Barclays RBS

RBS: -76.2%

JPM: -5.3%

CS: -61.2%

MS: -66.6%

GS: -29.9%

BofA: -57.8%

Barclays: -51.9%

UBS: -52.3%

Sources: Factset as of 30 Nov 2012

Note 1) Market capitalization rebased to 100

2

Perhaps some are getting with the program!

+121%

Development of market capitalization of CIMB - Jan 2007 to 2012YTD (USDbn)

Sources: Factset as of 30 Nov 2012

Note 1) Market capitalization rebased to 100

0

50

100

150

200

250

300

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

3

Following the acquisition of RBS assets, CIMB recently emerged as a leading Asia Pacific investment bank

CIMB’s core markets

India

China S. Korea1

Taiwan

Thailand

Australia

Sri Lanka Malaysia

Philippines

Singapore

Indonesia

Hong Kong

Extensive combined network across Asia Pacific

Sources: CIMB, Dealogic as of 30 Nov 2012

Note 1) New license applied for; 2) Excluding Chinese A shares, Japan, apportioned values

Top rated bookrunner of Asia Pacific IPO2 in 2012YTD

Rank Bookrunner No. USDm

1 CIMB (incl. RBS assets) 13 2,142

2 Deutsche Bank 11 1,425

3 UBS 10 1,141

4 Maybank 10 1,615

5 JP Morgan 10 1,266

Bank No. USDm

1 Goldman Sachs 61 83,453

2 CIMB (incl. RBS assets) 54 34,601

3 Credit Suisse 51 73,267

4 JP Morgan 46 56,327

5 Morgan Stanley 44 62,465

M&A ASEAN league table rankings 2011-12YTD by announced deals

Japan partnership with BTMU

Myanmar

Vietnam

Cambodia

Japan

4

CIMB has been an active advisor to the APAC healthcare sector in 2012

Religare Health Trust

IPO

Joint Global Coordinator, Bookrunner and

Underwriter Coordinator

SGD511 million

2012

IHH Healthcare Berhad

Concurrent Dual-Listing IPO

Joint Principal Advisor, Joint

Global Coordinator, Joint Bookrunner

SGD2.5 billion

2012

Watson Pharmaceuticals

Acquisition of Ascent Pharmahealth Ltd from

Strides Arcolab

Sole Financial Advisor

AUD375 million

2012

Alvogen

Acquisition of up to 67.0% shareholding in Kunwha

Pharmaceuticals by Alvogen Korea Limited

Financial Advisor

KRW 75.7 billion

2012

Alvogen

Investment by IMM into Convertible Bonds and

Redeemable Convertible Preference Shares of

Alvogen Korea Limited Sole Financial Advisor

KRW59.7 billion

2012

First entry of scale

into the APAC

pharmaceutical

market for Watson

Watson becomes a

top 5 player in the

Australian generic

market

Pre-empted a

planned broader

auction process

Simultaneous

signing and closing

Alvogen’s first entry

into Asia

First ever cross-

border controlling

stake acquisition in

a Korean

pharmaceutical

company by a

foreign investor

Quick execution

period of 2 months

from kick-off to

signing

CIMB introduced

IMM PE, a leading

Korean private

equity fund, to co-

invest in Alvogen’s

Asian platform

Demonstrated our

strong capabilities

in executing

complex transaction

involving several

stakeholders

Unprecedented

Business Trust

structure with a

portfolio of Indian

healthcare assets

First ever

international listing

of Indian healthcare

assets

Largest

international listing

from India since

2007

Largest healthcare

sector IPO in Asia

ever

3rd largest IPO

globally YTD 2012

CIMB successfully

secured more than

1/3 of cornerstone

demand and

allocations

5

Topics of today’s presentation

1. Long-term Concerns About Generic Industry

2. Drivers of Future Growth

3. Impact of Merger & Acquisition Activity

4. The Banker’s Crystal Ball: Competitive Outlook

6

Patent cliff raising long-term concerns about generic industry Patent expirations 2005 through 2029

Brand sales value of Launches (US$m)

10

,70

0 1

7,2

00

10

,50

0

15

,80

0

17

,30

0

18

,70

0

16

,78

3

35

,51

4

16

,96

6

15

,45

3

19

,61

8

14

,78

0

8,6

22

6,6

10

7,1

27

2,9

52

5,9

70

87

0

2,7

90

86

2,8

78

3,3

46

2,8

68

18

0

81

4

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

Sources: CIMB, broker research

“Patent cliff”

7

Public market valuation of generic leaders at historic lows Biotech, pharma and generic P/E multiples have diverged since the ‘09-’11 convergence

8.0x

12.0x

16.0x

20.0x

24.0x

28.0x

32.0x

Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Biotech Pharma Generic

Biotech: 17.3x

Pharma: 12.8x

Generic: 13.6x

Patent cliff driving optimism on generics, concern on pharma

Convergence Concern about future generic

growth, pharma pipelines recovering

Sources: Factset as of 30 Nov 2012

Note: Biotech index includes BIIB, AMGN, GILD, CELG, ALXN; Pharma index includes PFE, MRK, BMY, LLY, JNJ, ANT; Generic

index includes WPI, MYL, TEVA, PRGO, HSP

8

Visibility on sources of future growth key to outlook

Industry concerns Growth alternatives

• Patent cliff

• US: growth outlook moderate with generic penetration already over 80%

• Europe: impact of crisis on demand

• Increasing competition from lower cost providers accelerating price erosion

• Global pricing pressures from governments, payors, and increasingly concentrated customer channel

• GDUFA impact

• Evolving brand defense strategies

• Profit concentration in early launch opportunities increasing earnings volatility

9

Visibility on sources of future growth key to outlook

Industry concerns Growth alternatives

1. New growth markets 1

2. Niche formulations 2

3. Biosimilars 3

4. Branded drugs 4

5. Scale efficiencies 5

• Patent cliff

• US: growth outlook moderate with generic penetration already over 80%

• Europe: impact of crisis on demand

• Increasing competition from lower cost providers accelerating price erosion

• Global pricing pressures from governments, payors, and increasingly concentrated customer channel

• GDUFA impact

• Evolving brand defense strategies

• Profit concentration in early launch opportunities increasing earnings volatility

10

New growth markets: growth moving away from developed markets Global generics market breakdown by geography

41%

7% 6% 6%

5%

4%

4%

6%

3%

3%

15%

US Germany Brazil France UK Japan Turkey Canada Italy Spain Others

25%

4%

13%

5% 3% 6% 5%

5%

4%

3%

27%

2010 generic market share 2020E generic market share

1

11

Illustration of global growth potential: generic utilization by region Generic utilization (by prescription volume)

81% 75% 73% 71%

65% 59%

52% 51% 50% 46%

41% 40%

24%

89%

1

12

Asian Pharma market growing at double digit rates, driven by strong growth in generics Total Asian pharma market size and growth (USDbn)

90 104 112 131 136 138 140 142

41

51 64

79 92

105 119

130

25

27

31

35

39 42

47 51

156

182

208

246

266

286

306 323

0

50

100

150

200

250

300

350

2008A 2009A 2010A 2011A 2012F 2013F 2014F 2015F

OTC

Generic drugs

Patented drugs

54%

32%

14%

Patented drugs Generic drugs OTC

2011 pharma market breakdown

Sources: BMI

Note: Asian pharma market includes China, India, Japan, South Korea, Indonesia, Thailand, Malaysia, Vietnam, Philippines and Taiwan

CAGR

11.1%

10.8%

18.0%

6.7%

1

13

Asian pharma markets remain relatively fragmented

Market share of top 10 pharma companies by country (by value)

1

Sources: IMS Health, BMI, broker research

74%

50%

44% 41%

38% 37% 32%

25%

10%

14

ASEAN Harmonization – significant future single market opportunity Association of Southeast Asian Nations (ASEAN) Harmonisation of process for pharmaceutical

product approval

Brunei

Myanmar

Cambodia

Philippines

Indonesia

Singapore

Laos

Thailand

Malaysia

Vietnam

Pharmaceutical Products Working Group

Approval times for generic MAs:

- ~15-18 months in Singapore, Malaysia and Vietnam

- ~18-24 months in Hong Kong, Thailand and Brunei

…'develop harmonization of pharmaceutical regulations of

the Member Countries to complement and facilitate the

objective of AFTA (elimination of technical barriers to trade)

without compromising on drug quality, safety and efficacy’…

Establishment of ASEAN

1999

1992

1967

ASEAN Free Trade Area (AFTA)

Pharmaceutical Products Working Group

Decentralized Procedure for medicinal products 2013

ASEAN Economic Community 2020

ASEAN Common Technical

Document (A-CTO)

Common Technical

Requirements

(A-CTR)

• In 1999, the ACCSQ created Pharmaceutical Products Working Group with the objective to

'develop harmonisation of pharmaceutical regulations of the Member Countries to

complement and facilitate the objective of AFTA (elimination of technical barriers to trade)

without compromising on drug quality, safety and efficacy’

• It introduced the ASEAN Common Technical Document (A-CTO) and Common Technical

Requirements (A-CTR) for the registration of pharmaceuticals for human use across member

countries

• The implementation of the requirements significantly simplified the process for obtaining

marketing authorisations. By the end of 2013, the AFTA aims to introduce Decentralised

Procedure to facilitate the launch of the same medicinal product in more than one country in

the ASEAN region

• Singapore and Malaysia were the first two countries to implement the new format in 2005

while the remaining eight members implemented by 2008

• Singapore is considered to have the most stringent requirements among ASEAN countries;

dossiers with marketing authorisations (MAs) that meet Singapore's standards are on

average 90% compliant with the requirements of other ASEAN countries while the remaining

10% relates to country-specific requirements such as administrative declarations or

language translations

• A-CTD requirements were created to mirror those of European Union Common Technical

Dossier (EU CTD) format

• The approval process for drugs authorised in Singapore or other developed reference

markets such as the United States, United Kingdom, Europe or Australia can be fast-tracked

• Approval times for generic MAs from time of submission are circa 15-18 months in

Singapore, Malaysia and Vietnam and 18-24 months in Hong Kong, Thailand and Brunei

• In Singapore, applications for Mas may be submitted no earlier than 18 months prior to the

expiry of a product patent whereas in other ASEAN markets MAs may be submitted at any

time

• ASEAN-specific requirements for A-CTO dossier are as follows:

– Stability data as per Zone IV B requirements for three batches for a minimum period of 12

months to account for the higher ambient temperature of 30 degrees centigrade in the

region;

– Bioequivalence to be conducted using reference samples procured in country;

– Bioequivalence to be conducted using volunteers based in country of proposed

submission for marketing authorisation (only relevant for Thailand);

– Process validation report; and

– GMP inspection report from benchmark country authorities such as the U .S. FDA, EU

GMP, UK MHRA and Australian TGA

• A-CTR has four technical guidelines each led by a member country that is updated

periodically to account for developments in international guidelines: conduct bioavailability I

bioequivalence studies (led by Malaysia), manufacturing process validation (led by

Singapore), validation of analytical procedures (led by Thailand) and stability studies of drug

product (led by Indonesia)

Common Technical Dossier

(A-CTD)

1

15

Valuations reflect attractive outlook: multiples for Asian generic players well above developed market peers

5

10

15

20

25

30

35

40

45

50

55

Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12

Europe US Korea Japan India H-Share A-Share Indonesia

Source: Factset as of 28 Nov 2012 Note: Europe generic index includes KRKG. SAZ, HIK, RICHTER; US generic index includes WPI, MYL, TEVA, PRGO, HSP; Korea generic index includes Daewoong, Daehwa, Hanmi and

Green Cross; Japan generic index includes Nichi-iko, Towa, Kaken and Sawai; India generic index includes Cipla, Ranbaxy, DRRD, Lupin and Sun Pharma; H-Share generic index includes

Shanghai Pharma, China Shineway, Sino Biopharm, Guangzhou Pharma and Sihuan Pharma; A-share generic index includes CRC Sanjiu, Yunnan Baiyao, North China Pharma, Harbin Pharma

and Shanghai Pharma; Indonesia generic index includes Kalbe Farma, Indofarma and Tempo Scan Pharma

1-Year forward P/E development in past 5 years

Europe: 10.2x US: 13.6x Japan: 13.9x H-Share: 15.0x India: 21.9x A-share: 22.4x Indonesia: 24.9x Korea: 26.3x

5-Year average: 17.8x

1

16

Global leaders adjusting focus to new geographies

Geographic sales (2008 vs. 2012E)

51%

28%

21%

56%

22%

22%

1

Sources: Company report, broker report, CIMB estimate

Note 1) Include sales in other part of Americas; 2) Pro forma of acquisition of Actavis

1

2006:

2012E:

60% 24%

16%

65% 12%

23%

100%

75%

25%

US EMEA Asia RoW

1

2

17

Niche formulations: injectables illustrative example

Limited competitors for generic injectables in the US

Drug shortages driving demand and rapid approvals – US drug shortages by form type

0 20 40 60 80

1

2

3

4

5

6

7

8

9

10

No. of companies

Injectables 82%

Orals 15%

Inserts/Implants 1%

Rectals/Topical 1%

Dermatology 1%

3.0

4.8 5.4

6.8

7.7

8.6 9.1

20

08

A

20

10

A

20

11

E

20

13

E

20

15

E

20

17

E

20

19

E

Attractive market opportunity – Estimated US generic injectable sales

2

Sources: Broker research

No. of products

18

Biosimilars: significant future opportunity but equally significant execution challenges

17

76

93

165

2009 2015E

Off patent Patented

Off patent biologic sales to exceed

$100 billion in 2020

3

Significant market opportunity

Sources: Broker research

Significant execution challenges

• Cost of manufacturing assets

• R&D capability in large molecules

• Clinical development capabilities

• Absence of clear regulatory pathway

• Need for active detailing in absence of true bioequivalence rating

• Reimbursement and payor support

19

Diversifying product portfolio into branded drugs

Product Mix (2008 vs. 2012E)

Sources: Company report, broker report, CIMB estimate

2008:

2012E:

73%

22%

5%

51% 40%

9%

91%

9%

87%

12% 1%

58% 17%

25%

74%

8%

18%

Generic Branded Others

4

20

Scale efficiencies: big are getting bigger – emergence of oligopoly? Revenue development for top 15 generic companies globally (USDbn)

16.5%

11.1

7.6

5.1

2.5 2.4 1.7 1.2 0.8 1.4 0.7 1.0 0.6 0.8 0.6 0.5

20.4

8.7

6.8 5.9

2.4 2.2 2.0 1.9 1.5 1.6 1.5 1.1 1.0 1.1 0.9

2008 2012E

3.5% 7.3% 23.5% 0.3% 6.2% 13.4% 22.8% 1.8% 24.2% 10.1% 17.3% 3.8% 17.5% 14.5% ‘08-’12 CAGR

5

Big getting bigger However significant fragmentation remains

21

Measuring size by value – global industry dominated by US listed companies Combined market capitalization for key generic players (USDbn)

Source: Factset as of 28 Nov 2012 Note: Europe generic index includes KRKG. SAZ, HIK, RICHTER; US generic index includes WPI, MYL, TEVA, PRGO, HSP; Korea generic index includes Daewoong, Daehwa, Hanmi and

Green Cross; Japan generic index includes Nichi-iko, Towa, Kaken and Sawai; India generic index includes Cipla, Ranbaxy, DRRD, Lupin and Sun Pharma; H-Share generic index includes

Shanghai Pharma, China Shineway, Sino Biopharm, Guangzhou Pharma and Sihuan Pharma; A-share generic index includes CRC Sanjiu, Yunnan Baiyao, North China Pharma, Harbin Pharma

and Shanghai Pharma; Indonesia generic index includes Kalbe Farma, Indofarma and Tempo Scan Pharma

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

2010 2012

2010 2012

2010 2012

2010 2012

2010 2012

2010 2012

2010 2012

2010 2012

5

22

M&A has been the key strategic tool to pursue growth alternatives Industry participants Growth alternatives

• Big pharma

• Generic majors

• Specialty generics

• Asian majors

• National / regional operators

1. New growth markets 1

2. Niche formulations 2

3. Biosimilars 3

4. Branded drugs 4

5. Scale efficiencies 5

M&A

23

8

10 9

12

19

21

17

6

8 9

8

0

5

10

15

20

25

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

YTD

Generic pharma industry has experienced a record wave of M&A in the past decade

(USDbn) Number of deals

1.4

3.8 3.0

22.3

12.9 12.1

26.3

3.8

12.6 13.9

11.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

YTD

Generics transactions by value 2002-12YTD1

Sources: Mergermarket, Dealogic

Note 1) Based on transaction announcement date

Emergence of global industry – positioning for patent opportunities Positioning for post patent

cliff world

24

Major generic pharma players have spent over USD60bn on acquisitions in past 10 years Key acquisitions done by major generic and specialty pharma players in past 10 years

Company Year Value

(USD m)

Barr 2008 8,766

IVAX 2006 8,128

Cephalon 2011 6,171

Ratiopharm 2010 4,933

Sicor 2003 3,419

Taiyo

Pharma 2012 1,426

CoGenesys 2008 400

Theramex 2010 369

Bentley 2008 321

Procter &

Gamble 2011 N/A

Total 33,933

Company Year Value

(USD m)

Merck

Generics 2007 6,625

Matrix 2006 723

Bioniche 2010 550

Total 7,898

Company Year Value

(USD m)

Actavis 2012 5,597

Arrow 2009 1,750

Andrx 2006 1,618

Specifar

Pharma 2011 619

Ascent

Pharma-

health

2012 393

Total 9,977

Company Year Value

(USD m)

Agis

Industries 2004 822

PBM

Holdings 2010 808

Paddock

Lab 2011 540

Sergeant’s

Pet Care 2012 285

Total 2,455

Company Year Value

(USD m)

Medicis

Pharma 2012 2,807

iNova 2011 700

Pharma-

Swiss 2011 518

Sanitas 2011 457

OraPharma 2012 426

Ortho

Derma-

tologics

2011 345

Xcel

Pharma 2005 324

Aton

Pharma 2010 318

Total 5,895

25

Consolidation has still largely been focused on developed markets

Americas 44%

Europe 37%

Asia 11%

Australia 6%

Africa 2%

Geographic breakdown by target1

Sources: Mergermarket, Dealogic

Note 1) For transactions of deal size over USD50m

26

The banker’s crystal ball

27

Future positioning of industry participants

Big Pharma

Generics a “Band-Aid” for absence of R&D driven growth?

Have entered and exited the industry before

More sustainable as cornerstone of emerging markets strategy

“Life cycle” strategy potentially less relevant after end of age of blockbusters

Convergence in biosimilars

Generic Majors

“Mind the gap” – will fill in all white space from perspective of geography and formulations

Brand strategies important for sustainable top-line and margin growth

Specialty Generics

Segment of players driven by technical excellence and /or therapeutic depth

Selective marketing strategies in different end-markets

Entrepreneurial vision - build for sale

Asia Players

Will dominate commodity generics globally

Significant consolidation required to reach global scale

Pick the right battles

National/Regional Operators

Lack scale and funding

Sustainable position may require local market leadership position

Unless differentiated, challenging position long-term

28

Positioning of Asian companies for future growth

India China ASEAN

First movers in globalizing their business

Achieved success as a block

However, largely lack scale or individual basis

Dominance in global API

First steps towards global FDF

Home market remains key focus

Lively to rival India in near decade – steep learning curve remaining

Generic or brand focus?

Some protection from strong home-market positions

Opportunity for regional strategy

Determine how to compete against globals outside home market

4%

9%

14%

19%

24%

2006 2007 2008 2009 2010 2011

Japan

Global generic strategy of majors less clear

National generic players lack international scale

Time to consider long term strategy

US TRx market share for 9 leading India pharma

Sources: CIMB, IMS Health

29

Asian companies increasingly using overseas acquisitions to drive growth

Announcement Date

Target Target

Nationality Acquiror

Acquiror Nationality

Stake % EV (USDm) EV/ EBITDA EV / Sales

LTM FY+1 LTM FY+1

Nov-12 DUSA Pharma Netherlands Sun Pharma India 100% 171 34.9x 20.9x 4.7x 3.8x

Oct-12 OctoPlus US DRRD India 100% 45 n.m. n.m. 4.2x 4.5x

Apr-12 URL Pharma US Takeda Japan 100% 800 n.a. n.a. 1.3x n.a.

Nov-11 I’rom Pharma Japan Lupin India 100% n.a. n.a. n.a. n.a. n.a.

Oct-11 Taro Pharmaceutical Israel Sun Pharmaceutical India 34% 1,665 10.8x n.a. 3.6x n.a.

May-11 Nycomed (ex-derma. business)

Switzerland Takeda Japan 100% 13,739 12.5x n.a. 3.4x 2.7x

Dec-10 Ascent Pharmahealth Australia Strides India 40% 109 6.9x 4.5x 0.8x 0.7x

Sept-09 BMS Indonesia Indonesia Taisho Japan 98% 310 11.9x n.a. 6.6x n.a.

Jun-08 Ranbaxy India Daiichi Sankyo Japan 58% 8,802 27.8x n.a. 5.4x 0.3x

Apr-08 Draxis Health Canada Jubilant Organosys India 100% 203 13.0x 10.1x 2.3x 2.4x

Oct-07 Morton Grove US Wockhardt India 100% 38 n.a. n.a. n.a. n.a.

Oct-07 Zenotech India Ranbaxy India 38% 150 32.5x 21.0x n.m. n.a.

May-07 Negma - Labo Eur Pour Recherche

France Wockhardt India 100% 265 9.7x n.a. 1.8x n.a.

May-07 Taro Pharmaceutical Israel Sun Pharmaceutical India 100% 528 34.7x n.a. 1.8x 1.5x

Dec-06 Be-Tabs South Africa Ranbaxy India 100% 70 7.7x n.a. 2.2x n.a.

Mar-06 Terapia SA Cluj Napoca Romania Ranbaxy India 97% 335 12.0x n.a. 1.4x n.a.

Feb-06 Betapharm Germany DRRD India 100% 578 15.2x n.a. n.a. n.a.

Nov-05 Able Laboratories US Sun Pharmaceutical India 100% 23 0.7x n.a. 0.1x n.a.

Dec-12 RPG Aventis France Ranbaxy India 100% n.a. n.a. n.a. n.a. n.a.

Average 19.0x 17.0x 2.3x 1.4x

Median 18.7x 17.0x 2.0x 1.4x

Asian outbound deals

30

However, foreign entry likely to pick up pace

Announcement Date

Target Target

Nationality Acquiror

Acquiror Nationality

Stake % EV (USDm) EV/ EBITDA EV / Sales

LTM FY+1 LTM FY+1

Oct-12 Kunwha Pharma Korea Alvogen US 37% 69 13.2x n.a. 1.1x n.a.

Mar-12 Ahlcon Parenterals India B Braun Melsungen Germany 75% 53 30.1x n.a. 5.7x n.a.

Nov-11 iNova Pharma Australia Valeant Canada 100% 626 8.9x 7.8x 3.5x 3.1x

Nov-11 Invida Singapore Menarini Italy 100% n.a. n.a. n.a. n.a. n.a.

May-11 Taiyo Pharma Japan Teva US 100% 1,427 9.6x n.a. 2.7x n.a.

Aug-10 Sigma (pharma division) Asutralia Aspen Pharmacare South Africa 100% 808 8.4x 7.5x 1.3x 1.4x

May-10 Piramal Healthcare India Abbott US 100% 3,720 31.9x n.a. 8.8x n.a.

Dec-09 Orchid (Generic injectable)

India Hospira United States

100% 400 n.a. n.a. n.a. n.a.

Sept-09 BMS Indonesia Indonesia Taisho Japan 98% 310 11.9x n.a. 6.6x n.a.

Jun-08 Zenotech India Rabanxy India 38% 151 32.5x 21.0x n.m. n.m.

Jun-08 Ranbaxy India Daiichi Sankyo Japan 58% 8,802 27.8x n.a. 5.4x 0.3x

Apr-08 Dabur India Fresenius Germany 73% 356 11.3x n.a. 0.1x n.a.

Apr-08 Strides (Asia and Australia business)

India Genepharm Australia 100% 61 n.a. n.a. n.a. n.a.

Oct-07 Kyowa Pharma Japan Lupin India 100% 60 n.a. n.a. n.a. n.a.

Apr-07 Nippon Universal Japan Zydus India 100% n.a. n.a. n.a. n.a. n.a.

Aug-06 Matrix India Mylan US 72% 1,222 24.0x 17.3x 3.9x 3.0x

Nov-04 Agis Industries Israel Perrigo US 100% 851 14.2x 13.7x 2.0x 1.9x

Average 18.7x 13.5x 3.7x 1.9x

Median 13.7x 13.7x 3.5x 1.9x

Asian inbound deals

31

Relative firepower: Financing capacity of major pharma companies Financing capacity as measured as 3x 2012E EBITDA minus current net debt (USDbn)

72

45 34 33

24

12 10

8

6

3 3 3 2 2 1 1 1 1 1 1

(0) (0) (2)

(5)

-

5

10

15

20

25

70

(10)

-

10

20

30

40

50

60

70

80

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Optimizing long-term strategic position – case study of Kunwha sale to Alvogen

Alvogen

Emerging specialty generic company

Focus on developing complex formulations

Objective to leverage global portfolio across generic frontier markets where can complete

Lead by former Actavis management team headed by Robert Wessman

Kunwha

Transaction offers access to high value portfolio to support position in fragmented Korea market

Leverage global R&D capability

Internalize best practice sourcing and manufacturing capabilities

Opportunity to broaden market focus beyond Korea

Access deeper capital base

Transaction positioned Kunwha for long-term competitiveness in Korea and across Asia

Alvogen

Acquisition of up to 67.0% shareholding in Kunwha

Pharmaceuticals by Alvogen Korea Limited

Financial Advisor

KRW 75.7 billion

2012

33

Generics 2022

Highly differentiated strategies

3-5 global dominant players present in all markets

Majors will have diversified portfolios across complete range of formulations

Limited number of legacy generic players will participate in biosimilars but not dominate it

Convergence of brand and generics

Regional champions leveraging local knowledge and brand equity

Asia players dominate commodity generics

1-2 Asian players among globals?

Big pharma will ultimately remain R&D driven

34

ASEAN FOR YOU

35

Important Notice

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