global pharmaceutical growth

8/8/2019 Global Pharmaceutical Growth

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7/27/2010

BioFunding Conference 2010Kuala Lumpur, Malaysia

7/27/2010

Lilly Asian Ventures

Yi Shi, Ph.D.Managing Director


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Industry background


Our portfolio companies

Agenda


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Global Pharmaceutical Landscape

Japan

Size: US$82-100bn

Growth: 1-4 %

North America

Size: US$ 274-346bn

Growth: -1-2%

Global market

Size: $766-962bn

3-6% CAGR

Source: IMS

Western Europe

Size: US$ 177-219bn

Growth: 2-5%

Latin America

Size: US$ 54-70bn

Growth: 10-13 %

Central & East Europe

Size: US$ 54-71bn

Growth: 8-11 %

Middle East & Africa

Size: US$ 16-20bn

Growth: 5-8%Asia Pacific

Size: US$98-122bn

Growth: 13-16 %

Global: IMS Regional Pharmaceutical Outlook in 2012 (US$ Billions)


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TargetIdentification

andValidation

AssayDevelopment

LeadGeneration

Hypothesis

GenerationCandidate Development Commercial izat ion

PhaseIII

Submit GlobalLaunch

GlobalOptimization

Lead

Optimization

First

Human

Dose

Phase

IA PhaseIB/II

Pharmaceutical R&D Value Chain

Average cost of developing a new drug > $1B Average time: 10-15 years

10,000 compounds

10 compounds

1 compound


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Copyright 2008 Eli Lilly and Company

Pharma R&D Productivity Challenge


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Big Pharma Shifting R&D to Asia

4Q09

3Q09

2Q09

1Q09

NovartisTo invest $1.25B to build the 4th global R&D center in China (14-buildings complex with headcounts

growing from 300 to 1400 in 3 yrs)Merck SeronoTo invest $223M in R&D center in BeijingNovo NordiskTo double investment in China R&D in 3 years, making it the 2nd largest global R&D siteLast year, announced a $400M expansion of manufacturing facility in Tianjin.

GSKFormed two JVs with Chinese companies for local production of vaccinesShanghai R&D Center consolidated as the sole global neuroscience R&D siteBITo invest $240M in R&D and manufacturing in ChinaAstraZenecaLaid foundation for the $100M China headquarter in ShanghaiTo move most of API production to Asia, mainly China

BaxterTo invest $150M in China to ramp up production capacity in China

BayerTo invest $130M in R&D center in Beijing


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Asian Biotech Companies

Led by experienced returnees, fueled with substantiallocal talents

Significant cost advantage (~25% of US) and highcapital-efficiency

Large government incentives including non-dilutivefunding


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Healthcare VC Markets

US China

$8.2B invested in 623 Healthcare Cos $300M invested in 47Healthcare Cos

Healthcare ~30% of total VC dollars Healthcare < 5% of total VC dollars

Dozens of healthcare domain VC firms


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Deal Stage Analysis (China healthcare 2008)

Stage

Pre-Revenue

Early Revenue

Growth Capital

Pre-IPO

Deals (%)

8 (17%)

10 (21%)

25 (53%)

4 (9%)

Total = 47 deals


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7/27/2010Company Confidential

Copyright 2009 Eli Lilly and Company 9

Industry background



Agenda


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Founded in 1876 in US

$21.8B sales in 2009

~40,000 employees worldwide

Operations in 87 countries andsales in 138 countries

Eli Lilly and Company


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Lilly Global Presence

San Diego:Bioproduct

R&D

Indianapolis:Global R&D HQ

Canada: Bioproduct

Analytical R&D

Singapore: Drug

Discovery andBiomarker R&D

China: DrugDiscovery R&D

Spain: MedicinalChemistry


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Innovation-Driven Corporate Strategy and Culture

R&D As a Percent of Sales

15%

17%

15%15%

19%

0%

5%

10%

15%

20%

25%

$10M spent on R&D each day


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1920s: First Insulin product (Iletin)

1950s: First macrolide antibiotic (Erythromycin)

1960s: First cephalosporin antibiotic (Cephalothin)

1970s: First vinca alkaloid oncolytic (Oncovin, Velban)

1980s: First rDNA product (Humulin)

First SSRI (Prozac)

1990s: First to widely market a therapeutic mab (ReoPro)

First insulin analog (Humalog)

First SERM (Evista)

2000s: First drug for sepsis (Xigris)

First anabolic peptide for building bone (Forteo/Forsteo)

First non-stimulant drug for ADHD (Strattera)

First incretin mimetic (Byetta)

Lilly Historical Firsts


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Lilly Asian Ventures: Overview

History Established in 2007

First corporate venture fund to focus on Asia healthcare investment

Scope Focus on Pharmaceutical

Also consider Medical Device, Diagnostics, and Healthcare Service

Size

$100M under management $5-10M per investment


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Investment Focus

Growth Capital Emerging leader in an attractive market segment

Typically over 50% sales growth

Little technology risk

Advanced R&D New drugs in clinical phase III

< 2 years from market

> 70% probability of technical success

Early-stage R&D Extraordinary team, revolutionary technology/product

High risk, potentially high return


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Investment Philosophy

Active investor Typically take board seat

Work closely with management in business development andstrategic decision-making

Value-Adds Share R&D expertise with portfolio companies

Leverage sales & marketing capability in over 100 countries


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7/27/2010Company Confidential

Copyright 2009 Eli Lilly and Company 17

Industry background



Agenda


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LAV Portfolio Company:Citic Pharmaceuticals

Top 3 privately-owned drugdistributors in China, ~$700M annualsales, majority business from MNCcustomers

Fastest growing, >30% CAGR

State-of-art infrastructure, cold-chaincapability


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LAV Portfolio Company: Novast

First and only Chinesecompany with FDA-auditeddrug product manufacturingfacility

Proprietary formulationtechnologies, low-cost

Multiple generic productlaunches in US market in 2010


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LAV Portfolio Company: HD Biosciences

Leading biology CRO specialized inbiological screening services

Clients including 8 out of the top 10

big pharma

Well positioned to capitalized onglobal R&D outsourcing trend


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LAV Portfolio Company:Chipscreen Biosciences

Innovative, capital-efficient biotech withoncology and diabetes focus

Best-in-class HDAC inhibitor in Phase

II/III for NHL; first orphan drug statusever granted by SFDA


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LAV Portfolio Company: Beta Pharma

Integrated biotech with oncology focus

Icotinib, a novel, oral target therapy for

NSCLC, currently in Phase III

Promising early stage pipeline


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THANK YOU

Yi Shi, Ph.D.

[email protected]

global pharmaceutical growth

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