third-quarter 2011 special report late-stage r&d pipeline

www.fitchratings.com December 20, 2011

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Healthcare / Global

Global Pharmaceutical R&D Pipeline Third-Quarter 2011 Special Report

Late-Stage R&D Pipeline Developments

Prior Revenue Declines Reverse: There was a return to positive revenue growth derived from

the human medicines offerings at Fitch-rated large pharmaceutical companies achieved in the

third quarter. The industry remains under pressure from generic competition and government

cost containment; however, Fitch-covered drug manufacturers saw an average weighted

revenue increase of 2.1% in the third quarter after adjusting for currency changes and

consolidation activities within the past 12 months.

Patent Expiration Wave Cresting: The most significant period of key drug patent expiration is

upon the industry. The world’s largest pharmaceutical, Pfizer Inc.’s (Pfizer) Lipitor, lost U.S.

market exclusivity in November, following Eli Lilly & Co.’s (Eli Lilly) top-selling drug, Zyprexa,

which expired in October. The coming year will be the most challenging for the industry,

despite a wealth of new drug approvals in 2011. Four of the industry’s 10 best-selling

medicines will loss patent protection, including Bristol-Myers Squibb Co. (Bristol-Myers Squibb)

and Sanofi SA’s (Sanofi) Plavix, in May.

Drug Approvals Outpace 2010: Fitch notes that total novel drug approvals to-date in 2011

have vastly outnumbered the historically low level cleared during 2010. Through November, 29

new treatments spanning both general and specialty medicines have been approved by the

U.S. Food and Drug Administration (FDA), in comparison to 21 authorized for marketing in

2010. The majority of these novel therapies may reach blockbuster status.

Solid Drug Registration Activity: Pharmaceutical developers covered by Fitch have attained

two-thirds of their goals for regulatory filings so far this year. Specifically, 14 of 21 new

therapeutics, including vaccines, that were originally slated to be registered with drug

regulatory agencies in Europe or the U.S. have been filed at the date of this report. In addition,

regulatory dossiers for four more drug candidates could still be filed prior to the end of the year.

Related Research 2012 Outlook: Pharmaceuticals Companies, Dec. 14, 2011

2012 Outlook: U.S. Healthcare, Dec. 7, 2011

Global Pharmaceutical R&D Pipeline Second-Quarter 2011, Sept. 16, 2011

U.S. Healthcare Sector Legislative and Regulatory Register Summer 2011, June 23, 2011

Rating Pharmaceuticals Companies Sector Credit Factors, July 19, 2010

Analysts Michael Zbinovec +1 312 368-3164 [email protected]

Britta Holt +00 44 20 3530 1335 [email protected]

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NMEs BLAs

Novel Drug Approvals by FDA's CDER

CDER – FDA's Center for Drug Evaluation and Research. NME – New molecular entity. BLA – Biologics license application. CBER – FDA's Center for Biologics Evaluation and Research. Note: No CBER approvals. Source: FDA.

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Global Pharmaceutical R&D Pipeline 2

December 20, 2011

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Late-Stage R&D Pipeline Updates

Pace of New Phase III Projects Picks up after Brief Respite

After a brief pause in the second quarter, late-stage program expansion at Fitch-covered drug

developers returned to the rapid pace witnessed in the first quarter, when 17 novel drug

candidates were added to research portfolios. In the third quarter alone, the research programs

at the large pharmaceutical companies listed in this report increased by 11 new drug projects,

with another three added so far in the fourth quarter. Nearly half of the new drug candidates in

the third quarter progressed from internal research.

Novartis’ Mid-Stage Program Maturing

Novartis AG (Novartis) has included three new drug candidates, which are expected to be

registered by the end of 2013, in the latest October update to its list of planned regulatory

filings for 2011 to beyond 2015. Each investigational medicine AFQ056, TKI258, and

AIN457 is currently under investigation in Phase III testing advancing from the company’s

internal mid-stage pipeline.

Novartis targets the registration of the drug candidate AFQ056 for the treatment of Fragile X

syndrome in 2013. The novel medicine works to address the underlying cause of the inherited

disorder, as opposed to easing behavioral symptoms in typical therapies, by blocking the

activity of mGluR5, a receptor protein on brain cells that is involved in most aspects of normal

brain function, including regulation of the strength of brain connections, a key process required

for learning and memory. Long-term safety trials were initiated for adults in August and for

Late-Stage NME Additions Company Product Lead Indication Developmental Stage Asset Source Bayer Tedizolid Phosphate Skin Structure Infections Phase III started in August 2010. Licensed from Trius Therapeutics in

July 2011. Bristol-Myers Squibb Daclatasvir Hepatitis C Phase III started in September 2011. Internally developed.

MK-3415A Clostridium Difficile Infection Phase III began in October 2011. Partnered with Merck and MBL.

Eli Lilly LY2963016 Diabetes Phase III on type 1 diabetes started in August 2011 and in type 2 in September 2011.

Partnered with Boehringer Ingelheim.

LY2963016 Diabetes Phase III on type 1 diabetes started in December 2011 and in type 2 in October 2011.

Partnered with Boehringer Ingelheim.

Merck Vernakalant (Brinavess) Atrial Fibrillation Phase III for I.V. formulation. Approved in Europe.

Purchased U.S. rights from Cardiome in July 2011.

MK-3415A Clostridium Difficile Infection Phase III began in October 2011. Partnered with Bristol-Myers Squibb and MBL.

Vaniprevir Hepatitis C Phase III began in Japan in treatment-naïve patients in June 2011and treatment-experienced patients in August 2011.

Internally developed for Japan only.

Novartis AFQ056 Fragile X Syndrome Phase III began in August 2011. Internally developed.

TKI258 Renal Cell Carcinoma Phase III began in March 2011. Internally developed. AIN457 Autoimmune Disorders Phase III started in psoriasis in June 2011

and in arthritides in July 2011. Internally developed.

Pfizer ALO-02 Pain Management Phase III in chronic pain started in December 2010.

Acquired with King in February 2011.

Roche Vismodegib Basal Cell Carcinoma Registration to FDA in September 2011 using Phase II data.

Genentech licensed from Curis dating back to 2003.

Tofogliflozin Type 2 Diabetes Phase III started in the third quarter of 2011.

Partnered with Chugai.

Sanofi Sarilumab Rheumatoid Arthritis Phase III began in September 2011. Licensed from Regeneron in a partnership established in 2007.

NME New molecular entity. Source: Company reports, ClinicalTrials.gov.


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adolescents in November, but have yet to begin patient enrollment.

Originally, Novartis looked at an indication for uveitis for the anti-inflammatory drug candidate

AIN457 (secukinumab) with no success. While the drug candidate (an inteleukin-17 inhibitor)

showed little benefit for eye care, mid-stage studies still continued in autoimmune diseases. Over

the past two quarters, Novartis advanced the investigational medicine into Phase III testing for

psoriasis in June, and for rheumatoid arthritis (RA), psoriatic arthritis, and ankylosing spondylitis

in July. The company hopes to file the drug applications for all conditions by the end of 2013.

Finally, the new molecular entity (NME) TKI258 (dovitinib) has been added to Novartis’ list with

a planned filing date in 2013. The drug inhibits fibroblast growth factor receptors and vascular

endothelial growth factor receptors to stem tumor growth. Late-stage clinical work in the

treatment of renal cell carcinoma for the oncology drug candidate began back in March 2011.

Merck Increases Late-Stage Pipeline by Three

Merck and Co. Inc. (Merck) expanded its late-stage research portfolio through the purchase of

global rights to the intravenous formulation of vernakalant in July. Merck purchased the

commercialization rights for the potential medication in the U.S., Canada, and Mexico from

Astellas Pharma Inc., which had acquired the rights from Cardiome Pharma Corp. (Cardiome)

in October 2003. The drug is already approved and marketed as Brinavess for the treatment of

atrial fibrillation in Europe, where the company acquired the rights from Cardiome in April 2009.

A Phase III safety study was initiated in August 2010 following the receipt of an FDA

“approvable” letter in August 2008 and after a clinical hold on a confirmatory trial (ACT V) due

to safety concerns in March 2010.

The experimental Hepatitis C treatment vaniprevir entered late-stage clinical trials in Japan,

where Merck intends to solely sell the drug. The company recently initiated two Phase III

studies for the potential infectious disease medicine, with one investigating treatment-naïve

patients (started in June) and another looking at the treatment-experienced population (begun

in August).

Merck also started Phase III study of the investigational therapy MK-3415A for the treatment of

clostridium difficile infection in October. The unique experimental pharmaceutical combines two

fully humanized monoclonal antibodies to fight both clostridium difficile toxins A and B. Merck

obtained exclusive global rights to the investigational therapy from Medarex Inc. (now part of

Bristol-Myers Squibb) and Massachusetts Biologics Laboratories (MBL) of the University of

Massachusetts Medical School in April 2009.

Bristol-Myers Squibb’s Infectious Disease Agent Enters Phase III

Building on its expertise in infectious diseases, Bristol-Myers Squibb moved its novel internally

developed daclatasvir (BMS-790052) into late-stage clinical trials studying efficacy in hepatitis

C in September. The investigational medicine is a first-in-class NS5A replication complex

inhibitor that is being studied as a once-daily oral treatment of patients with hepatitis C

genotype 1. The company also has signed an agreement with Johnson and Johnson’s (J&J)

subsidiary Tibotec Pharmaceuticals (Tibotec) to develop a combination treatment with Incivek.

Roche, Sanofi, and Eli Lilly Benefit from Partnerships

Coming as a surprise, Hoffman LaRoche (Roche) and its development partner Curis Inc.

(Curis) filed a regulatory dossier for vismodegib (RG3616) to the FDA in September using data

from one single-arm Phase II study (ERIVANCE) seeking an indication for the oral treatment of


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advanced basal cell carcinoma (BCC). Subsequently, the FDA accepted the regulatory

package for a priority review and set a Prescription Drug User Fee Act (PDUFA) on March 8,

2012.

In the third quarter, Roche also saw its Japanese development partner Chugai Pharmaceutical

Co., Ltd. (Chugai) initiate Phase III testing of tofogliflozin (CSG452) in type 2 diabetes. The

drug candidate belongs to the same class as Bristol-Myers Squibb and AstraZeneca plc’s

(AstraZeneca) dapagliflozin sodium-glucose transporter-2 (SGLT2) inhibitors and was

developed in Chugai’s research labs.

Sanofi is reaping rewards from its long-standing relationship with Regeneron Pharmaceuticals,

Inc. (Regeneron). In addition to a recent drug application filing for Zaltrap, the partnership

resulted in the addition of the experimental medicine sarilumab (SAR153191) to Sanofi’s late-

stage pipeline in September. Sarilumab (an interleukin-6 inhibitor) is a novel, high-affinity, fully

human monoclonal antibody designed for the treatment of RA.

Lastly, the diabetes partnership between Eli Lilly and Boehringer Ingelheim Corp. (Boehringer

Ingelheim) continues to achieve research success this year. The basal insulins LY2963016 and

LY2605541, which were part of the agreement established in January 2011, both progressed

into Phase III investigation since the start of the third quarter. Late-stage clinical work in type 1

diabetes began in August for LY2963016 and in December for LY2605541; while Phase III

studies in type 2 diabetes patients were initiated in September for LY2963016 and in October

for LY2605541.

Bayer Licenses Potential Antibiotic

Bayer AG (Bayer) reached a development and marketing agreement in July with Trius

Therapeutics Inc. (Trius) for Trius’ lead drug candidate, tedizolid phosphate (torezolid

phosphate). The investigational antibiotic entered late-stage clinical trials in August 2010,

Late-Stage NME Project Delays Company Project Lead Indication Delay Status AstraZeneca/Bristol-Myers Squibb

Dapagliflozin Type 2 Diabetes FDA advisory committee voted against approval on 7/19/11.

FDA PDUFA extended three months until 1/28/12. EMA validated the regulatory dossier in Jan. 2011.

GlaxoSmithKline Albiglutide Type 2 Diabetes Top-line results in first Phase III study did not show non-inferiority to Victoza.

Enrollment completed in eight Phase III studies. Completion of remaining seven trials expected through early 2013.

Menhibrix Combination Vaccine Received second CRL from FDA in Sept. 2011.

Responded to CRL in Dec. 2011.

J&J Siltuximab Myeloma Withdrew Phase III program prior to recruitment.

Another earlier stage study continues in same patient population.

Merck Telcagepant Migraine Pain Unfavorable data generated by Phase III safety study.

Program terminated in July.

Zoely Oral Contraceptive FDA issued a CRL in Nov. 2011. Discussions with the FDA are planned. Saflutan Glaucoma FDA issued a CRL in Nov. 2011. Discussions with the FDA are planned. Odanacatib Osteoporosis Anticipated filing date moved out from 2012. Filing expected in 2013. Tredaptive Cholesterol Lowering Anticipated filing date moved out from 2012. Filing expected in 2013. Novartis Pasireotide Cushing’s Disease FDA filing withdrawn due to issues with

chemistry, manufacturing, and controls section.

Plans to resubmit after FDA discussions. Decision expected in 2012.

Agomelatine Major Depressive Disorder Filing had been delayed to 2013 from 2009 due to additional clinical work.

Program discontinued in the third quarter of 2011.

Pfizer Neratinib HER-2 Positive Breast Cancer Global rights to drug project sold to Puma in the third quarter of 2011.

Focus of advanced breast cancer research shifted to second-line as opposed to first-line treatment. Phase III to be initiated by Puma in the first half of 2012.

NME New molecular entity. CRL Complete response letter. PDUFA Prescription Drug User Fee Act. Source: Company reports.


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studying efficacy in acute bacterial skin and skin structure infections. Bayer gains commercial

rights to the pharmaceutical throughout most of Asia, with the exception of North and South

Korea, while Trius retains rights in North America, Canada, and Europe.

Pfizer Adds King’s Late-Stage Pain Medication

Pfizer increased its number of experimental pain medications with the acquisition of King

Pharmaceuticals Inc. (King) in February 2011, including the abuse-resistant medicine, ALO-02.

The pain tablet, which combines oxycodone with naltrexone, entered Phase III studies in

chronic pain in December 2010.

Late-Stage Pipeline Problems Temporarily Ease in Third Quarter

Fitch-covered pharmaceutical developers experienced a variety of difficulties since the start of

the third quarter, ranging from unfavorable study results to project discontinuation. On a

positive note, the number of major obstacles (five) encountered in the third quarter was a

dramatic drop from the 11 that arose during the second quarter. However, enthusiasm is

dampened given that the number of problems jumped to 12, including the setbacks seen to-

date in the fourth quarter.

Merck’s Late-Stage Pipeline Woes Loom Large

Early in the third quarter, Merck discontinued the research program for its investigational

migraine drug telcagepant. The company cancelled the program in July after reviewing clinical

trial data in the migraine pain setting that included a recently completed six-month safety study.

Earlier clinical work indicated a potential for elevated liver enzymes concomitant with use of the

experimental medicine.

Into the fourth quarter, Merck and its development partners were issued complete response

letters (CRLs) from the FDA for the experimental oral contraceptive Zoely and the

investigational glaucoma treatment Saflutan. In November, the U.S. regulatory applications for

Zoely, developed in collaboration with Teva Pharmaceutical Industries Ltd. (Teva), and for

Saflutan (tafluprost), licensed for the U.S. from Santen Pharmaceutical Co. Ltd. required

additional information from the FDA. Merck will decide the fate of the potential pharmaceuticals

after discussions with the agency.

At Merck’s R&D review meeting in early November, the company updated the expected filing

dates for its late-stage programs. Both planned registration time frames for the potential

cholesterol-lowering medicine Tredaptive and the investigational osteoporosis treatment

odanacatib were pushed into 2013 from an earlier estimate of 2012. The delay is not surprising

given the large size of the late-stage research programs for the primary care drug candidates.

Progress for Diabetes Projects Snagged

PDUFA for Bristol-Myers Squibb’s Novel Diabetes Candidate Extended

The original review deadline established by the FDA for the potential first-in-class diabetes

medicine dapaglifliozin, being developed in a partnership with Bristol-Myers Squibb and

AstraZeneca, was moved out by three months. The FDA reset the PDUFA date to

Jan. 28, 2012 from Oct. 28, 2011. The recent regulatory setback is the second for the potential

diabetes treatment after an FDA advisory committee vote against approval due to safety

concerns in July. While the drug, which acts by eliminating glucose through the kidneys, had

positive attributes such as weight loss promotion and possible cardio-protection, the panel


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needed more clarification of cancer concerns and additional efficacy data in patients with renal

impairment.

GlaxoSmithKline receives more Bad News on Diabetes Research

GlaxoSmithKline plc (GlaxoSmithKline) announced unfavorable top-line data in November for

its experimental diabetes drug albiglutide, researched in partnership with Human Genome

Sciences Inc. (HGS). The preliminary results from the first of eight late-stage studies being

conducted on the once-weekly glucagon-like peptide-1 (GLP-1) agonist for type 2 treatment did

not prove non-inferiority of the drug candidate to Novo Nordisk A/S’s (Novo Nordisk) once-

weekly Victoza. The seven other clinical trials continue, with study completion expected

through early 2013. The news comes on top of the cancellation of the Phase III program

investigating otelixizumab for the treatment of type 1 diabetes in the second quarter.

Specialty Therapeutics Delayed

Issue Arises with Novartis’ Drug Applications

Novartis recently withdrew the new drug application (NDA) for its specialty drug candidate

pasireotide from the FDA citing issues with the chemistry, manufacturing and controls section

of the regulatory package. The regulatory filing for the potential new treatment for Cushing’s

disease will be re-filed pending a discussion with the U.S. drug regulator. The identical concern

is expected to delay authorization of the marketing application that had been submitted to the

European Medicines Agency (EMA) in October 2010. Novartis believes that an approval

decision from the EMA will now be determined next year versus an original expectation for this

year. The experimental medicine is also under Phase III clinical investigation for acromegaly

and refractory carcinoid syndrome.

Secondly, plagued by repeated registration delays stemming from additional clinical work

needed for U.S. marketing clearance, Novartis pulled the plug on the experimental anti-

depressant agomelatine in the third quarter. The company licensed U.S. rights to the major

depression treatment, which has been marketed in Europe as Valdoxan since February 2009,

from Servier Laboratories.

J&J Withdraws Late-Stage Oncology Study

The Phase III study that was investigating J&J’s experimental cancer therapy siltuximab for the

treatment of myeloma was withdrawn prior to patient recruitment. The Web site

ClinicalTrials.gov stated the cancellation of the Phase III clinical trial was, “based on results of

different study with similar hypothesis, investigational agent, and patient population another

study underway in the same patient population.” Fitch has removed the investigational

oncology medicine from J&J’s late-stage research pipeline.

GlaxoSmithKline gets Second CRL for Menhibrix

GlaxoSmithKline has been working diligently to address regulatory concerns pertaining to its

potential meningitis vaccine Menhibrix that were listed in a CRL issued in June 2010. While the

company formally responded to the questions from the FDA in April 2011, another CRL for the

experimental combination vaccine was issued in September. The company remains committed

to achieving U.S. approval of the investigational vaccine for protection of invasive infection from

two strains of meningitis bacteria and Haemophilus influenzae type b (Hib). Subsequently, the

company addressed the new concerns in the second CRL on Dec. 1, 2011.


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Pfizer Divests Oncology Candidate

In October, Pfizer sold the worldwide commercialization rights to the experimental breast cancer

treatment neratinib to Puma Biotechnology Inc. (Puma). The drug candidate arose from the

Wyeth research program that was acquired in 2009. Simultaneously, Puma announced that the

current research focus would be shifted to second-line treatment of HER-2 positive metastatic

breast cancer from the first-line setting in the same condition as well as from early-stage disease.

Drug Product Regulatory Registration

Two-Thirds of Planned Drug Applications Filed

The table “NME Filings Tracker Full-Year 2011” details the new drug registrations

planned for 2011 by Fitch-covered pharmaceutical developers, based on updated late-stage

pipeline information from the most recent earnings conference calls, analyst meetings, and

company press releases.

In total, 21 new pharmaceuticals and vaccines originally were slated to be registered with drug

regulatory agencies before the end of the year. Currently, 14 drug candidates have been filed

with the FDA or the EMA as planned, two projects are still progressing, two drug registrations

were pushed into 2012, and three investigational drug programs were either cancelled or their

status is unknown at this time. Pfizer’s tofacitinib and Sanofi’s semuloparin and teriflunomide

were introduced to the table during the year.

Third-Quarter Regulatory Registrations Remain High

Fitch-rated drug developers continued the string of above-average drug application filings to

regulatory agencies in the third quarter as nine NMEs were registered to drug regulators in

NME Filings Tracker Full-Year 2011 Company Project Lead Indication FDA Registration EMA Registration Bayer VEGF Trap-Eye (Eylea) Age-related Macular Degeneration N.A. Filed Alpharadin Bone metastases in Prostate Cancer Mid-2012a Mid-2012a Bristol-Myers Squibb Apixaban (Eliquis) VTE Prevention Filed for stroke prevention. Filed and Approved Brivanib Hepatocellular Carcinoma 2011 2011 GlaxoSmithKline IPX066 Parkinson’s Disease N.A. 2012a Nimenrix Meningitis Vaccine Filed Johnson & Johnson Dacogen AML N.A. Filed Merck Ridaforolimus Metastatic Sarcomas Filed Filed Talcagepant Migraine Pain Project Cancelled Project Cancelled Novartis Ruxolitinib (INCB018424) Myelofibrosis N.A. Filed Pasireotide Cushing’s Disease Filed Filed Pfizer Apixaban (Eliquis) VTE Prevention Filed for stroke prevention. Filed Axitinib Renal Cell Carcinoma Filed Filed Crizotinib (Xalkori) NSCLC Filed and Approved Filed Bosutinib Chronic Myelogenous Leukemia 2011 Filed Tofacitinib Rheumatoid Arthritis Filed Filed Roche Pertuzumab HER+ Metastatic Breast Cancer 2011 2011 Vemurafenib (Zelboraf) Metastatic Melanoma Filed and Approved Filed Sanofi Ombrabulin Advanced Sarcoma Unknown Unknown Zaltrap (aflibercept) Metastatic CRC Filed Fourth-quarter 2011 Iniparib Breast Cancer Unknown Unknown Lixisenatide (Lyxumia) Diabetes Second half of 2012 Filed Mipomersen (Kynamro) Familial Hypercholesterolemia Fourth-quarter 2011 Filed Semuloparin (Visamerin) Anticoagulant Filed Filed Teriflunomide (Aubagio) Multiple Sclerosis Filed First-quarter 2012 aRepresents movement to a later date from prior company estimate. NME New molecular entity. N.A. Not applicable. TBD To be determined. AML Acute myeloid leukemia. CRC Colorectal cancer. NSCLC Non-small cell lung cancer. VTE Venous thromboembolism. Source: Company reports.


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Europe or the U.S. The number compares with the eight NMEs applied for regulatory approval

during the second quarter and four in the first quarter. Two “re-filings” or responses to CRLs

issued by the FDA were also completed in the third quarter. Once again, the majority of drug

application registrations were made for specialty medicines. Three more experimental

medicines were filed to the FDA and EMA after the end of the third quarter.

Breadth of Sanofi’s R&D Pipeline Displayed

Sanofi saw the highest activity of all Fitch-covered drug developers pertaining to drug

application filings since the beginning of the third quarter, given an expanded research program

due in part to the Genzyme Corp. (Genzyme) acquisition finalized in the second quarter of

2011. Over that time frame, the company registered six NMEs with European and American

drug regulators that evenly spanned the primary care and specialty medicine spaces.

Kynamro

Sanofi obtained an existing partnership with Isis Pharmaceuticals Inc. for the specialty drug

agent Kynamro (mipomersen) with the acquisition of Genzyme. In July, the companies filed the

drug application to the EMA seeking approval of the investigational therapy for the treatment of

homozygous and severe heterozygous familial hypercholesterolemia. The first-in-class drug

project uses a unique mode of action that prevents the formation of bad cholesterol by blocking

the synthesis of a key protein component (apolipoprotein-B). The condition is typically treated

with high doses of statins, most of which have become generic, including Pfizer’s Lipitor.

Aubagio

Secondly, the FDA filing for Aubagio (teriflunomide), an oral medicine with anti-inflammatory

properties which is designed for the treatment of relapsing forms of multiple sclerosis, occurred

in August. Subsequently, the FDA accepted the new drug application for review in October.

Sanofi plans to submit the regulatory dossier to the EMA in the first quarter of 2012. The

experimental medication is the active metabolite of Sanofi’s Arava, which is currently used to

treat RA. If approved, the new drug would enter a marketplace with well-established brands:

Teva’s Copaxone; Elan Pharmaceuticals, Inc. and Biogen Idec Inc.’s (Biogen) Tysabri; Merck

KGaA’s (and Pfizer’s) Rebif; and Biogen’s Avonex.

Visamerin/Mulsevo

Third, Sanofi submitted the regulatory package for its anti-thrombotic drug candidate

semuloparin, known as Visamerin in the EU and Mulsevo in the U.S., to both the FDA and the

EMA in September. The investigational medicine belongs to the same therapeutic class as

Lovenox low molecular weight heparins. The company is first looking for approval of the

potential mediation for the prevention of venous thromboembolism events in cancer patients

starting a chemotherapy treatment. Typically, this patient population is treated with anti-

coagulant therapy that includes warfarin and other low molecular weight heparins such as

Lovenox (enoxaparin).

Lyxumia

Sanofi, in partnership with the Danish pharmaceutical company Zealand Pharma, submitted

the marketing authorization application for the type 2 diabetes drug candidate lixisenatide

(Lyxumia) to the European regulatory authority in late October. The companies expect to file to

the FDA in the fourth quarter of 2012. If commercialized, the once-daily injectable glucagon-like

peptide-1 agonist (GLP-1) receptor agonist would be the third drug in the therapeutic class,

joining Amylin Pharamceuticals Inc.’s Byetta (and Bydureon) and Novo Nordisk’s Victoza.


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Zaltrap

Further collaboration is bearing fruit for Sanofi given that the regulatory application filing for

aflibercept (Zaltrap) was made, under an agreement with Regeneron, to the FDA for the

second-line treatment of metastatic colorectal cancer in October. The marketing application for

experimental inhibitor of vascular endothelial growth factor (VEGF) is still expected to be

submitted by the end of the year. A host of other chemotherapeutic drugs, both generic and

brand name, are available to treat advanced colorectal cancer, including Roche’s Avastin;

Amgen Inc.’s (Amgen) Vectibix; and Merck KGaA and Bristol-Myers Squibb’s Erbitux.

Hexaxim

In July, Sanofi sought regulatory approval for countries outside of Europe for its six-valent

vaccine, Hexaxim. The new vaccine would be the only combination to shield infants from

diphtheria, tetanus, pertussis, hepatitis B, polio, and infections due to Hib. The company

submitted a “Common Technical Document” (which starts the review of any medicinal product

to be sold outside of Europe) for the potential vaccine to the EMA.

Pfizer R&D Program Bearing Fruit

Pfizer recently has been striking oil with its research program, as seen with the regulatory

filings of five NMEs, in both the primary care and specialty drug areas. Since the start of the

third quarter, the company registered with drug regulators the application for two promising

tyrosine kinase inhibitors (TKIs) to treat a range of cancers crizotinib and bosutinib as

well as for two potential blockbuster general medicines Eliquis (apixaban) and tofacitinib. In

addition, FDA concerns listed in a CRL pertaining to the orphan drug taliglucerase alfa were

addressed in third quarter.

Eliquis

Pfizer and its co-developer Bristol-Myers Squibb submitted the drug dossier for the anti-

coagulant Eliquis (apixaban) to the FDA in September after holding off on U.S. registration in

order to complete one extensive filing pending the accumulation of study data from the

ARISTOTLE trial, which compares the experimental drug with warfarin. The companies are

looking to gain marketing clearance for the prevention of stroke and systemic embolism in

patients suffering from atrial fibrillation. The FDA granted a priority review for the new drug

application and established a PDUFA deadline of March 28, 2012. The new anti-coagulant

would directly compete with the brand-name pharmaceuticals J&J and Bayer’s Xarelto and

Boehringer Ingelheim’s Pradaxa.

Crizotinib

Pfizer announced that the marketing application for crizotinib, to be marketed as Xalkori, was

accepted by the EMA for review for the treatment of non-small cell lung cancer (NSCLC) in

August. In late August, the FDA approved the first-in-class oral medication for use in advanced

NSCLC patients who carry a mutation in the anaplastic lymphoma kinase (ALK) gene, which

represents as much as 5% of the general lung cancer population. The new drug competes with

other TKIs such as Roche’s Tarceva and AstraZeneca’s Iressa; and targeted therapies like

Roche’s Avastin; and various generic pharmaceuticals, including gemicitabine (Gemzar),

paclitaxol (Taxol), and docetaxol (Taxotere).


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Bosutinib

The marketing application for a second potential oncology medication, bosutinib, was

submitted to the EMA in the third quarter seeking clearance for the treatment of chronic

myeloid leukemia (CML). The investigational oral drug is yet another TKI, but is novel because

it targets two kinases as opposed to single-site activity. The EMA’s acceptance of the

regulatory filing for review was announced on August 17. Pfizer still hopes to register the novel

pharmaceutical to the FDA by the end of the year. The TKIs Novartis’ Gleevec and Tasigna,

and Bristol-Myers Squibb’s Sprycel are the current standard of care for CML.

Tofacitinib

Pfizer is looking to be the first to offer an oral immunomodulator for the treatment of RA as it

registered tofacitinib to the U.S. and European drug agencies in the fourth quarter. The FDA

accepted the marketing application for review for the treatment of moderate to severe disease, as

announced by the company on December 20. The EMA also accepted the application for review

on November 17. If approved, the oral drug would be the first-in-class JAK3 inhibitor that would

mainly compete with the anti-tumor necrosis factors (anti-TNFs), Abbott’s Humira, J&J and

Merck’s Simponi and Remicade, and Amgen and Pfizer’s own Enbrel.

Taliglucerase Alfa

Lastly, Pfizer responded in August to the FDA’s February CRL, which raised concerns

pertaining to the orphan drug taliglucerase alfa. The enzyme replacement drug candidate has

been studied in partnership with Protalix BioTherapeutics Inc. (Protalix) for the treatment of

Gaucher’s disease. The FDA accepted the drug application for review on August 16.

Oncology Drugs Progress

Taking a page from the registration strategy undertaken for trastuzumab-DMI, Roche filed a

regulatory dossier for vismodegib (RG3616) to the FDA using data from one single-arm Phase II

study (ERIVANCE). The company and its development partner Curis are seeking an indication for

the oral treatment of advanced BCC, having registered the investigational drug in the U.S. in

September. A single-arm study for BCC was conducted given the lack of a comparator drug. In

an encouraging sign, the FDA accepted the regulatory package for a priority review and set a

PDUFA on March 8, 2012. The medical condition is highly treatable through surgery; however, a

low percentage of patients that develop an advanced form are offered little remedy.

In August, Merck and Ariad Pharmaceuticals Inc. announced that an NDA for ridaforolimus was

filed to the FDA, and that the EMA validated the marketing application for review. The

companies are seeking approval of the oral oncology drug candidate for the treatment of

metastatic soft tissue and bone sarcomas. The drug registrations were based on favorable data

from the SUCCEED trial that reported a significant improvement in progression-free survival. A

multipronged treatment approach is usually taken to fight sarcoma, including some combination

of surgery, radiation, and chemotherapy, depending on the type and severity of the condition.

Eli Lilly Looks to Specialty Therapeutics beyond Oncology

In a diversification play from reliance on pharmaceuticals, Eli Lilly acquired Avid

Radiopharmaceuticals Inc. in December 2010, which brought in the lead product Amyvid

(flobetapir), a positron emission tomography (PET) imaging agent for the detection of beta

amyloid plaque in the brain. In January, an advisory committee at the FDA did not endorse the

imaging agent for the detection of Alzheimer’s disease, but unanimously voted for approval of

the imaging chemical if a training program could be established that, “demonstrates reader


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accuracy and consistency through a re-read of previously acquired scans.” During the third

quarter, Eli Lilly formally responded to the concerns.

Potential Near-Term Novel Drug Approvals Add to Gain Over 2010

The number of NMEs from Fitch-rated pharmaceutical developers that could still see marketing

clearance in Europe or the U.S. before the end of the year has dwindled considerably given the

large amount of drug approvals during the course of the year. At the date of this report, the

FDA’s drug division has already approved far more NMEs in 2011 than in the full-year 2010. As

shown in the Near-Term Novel Drug Approval Tracker table, only seven NMEs are under

review by drug regulators with estimated near-term regulatory action time frames, of which

Fitch sees slight potential for only one approval by the end of 2011 dapagliflozin in Europe.

AstraZeneca Nearing Three New Drug Approvals

AstraZeneca and its collaborators have three drug candidates vandetanib, dapagliflozin, and

Zinforo being reviewed by drug regulatory agencies that could be approved in the near term.

Near-Term Novel Drug Approval Tracker Company Product Lead Indication FDA Filing Status EMA Application Status AstraZeneca Brilinta/Brilique Arterial Thrombosis Approved. Approved. Vandetanib (Caprelsa) Advanced Medullary Thyroid Cancer Approved. Accepted for review in September

2010. CHMP adopted a positive opinion on 11/17/11.

Dapagliflozin Type 2 Diabetes PDUFA moved out three months to 1/28/12, advisory panel voted against approval on 7/19/11.

Accepted for review in January 2011.

Bayer Rivaroxaban (Xarelto) VTE Prevention Approved. Also approved for prevention of stroke and systemic embolism in atrial fibrillation on 11/4/11 after a favorable advisory panel scheduled on 9/8/11.

Approved in 2008. Filed on 1/5/11 for prevention of stroke, DVT, and pulmonary embolism, which the CHMP adopted a positive opinion on 9/22/11.

Bristol-Myers Squibb Belatacept (Nulojix) Solid Organ Transplant Rejection Prevention

Approved. Approved.

Iplilmumab (Yervoy) Metastatic Melanoma Approved. Approved. Dapagliflozin Type 2 Diabetes PDUFA moved out three months to

1/28/12, advisory panel voted against approval on 7/19/11.

Accepted for review in January 2011.

Eli Lilly/Boehringer Ingelheim

Linagliptin (Tradjenta) Type 2 Diabetes Approved. Approved.

GlaxoSmithKline Benlysta Systemic Lupus Erythematosus Approved. Approved. Menhibrix Meningitis Combination Vaccine A second CRL was received on

9/23/11; responded on 12/1/11. N.A.

Johnson & Johnson Abiraterone Acetate (Zytiga) Metastatic Castrate-Resistant Prostate Cancer

Approved. Approved.

Telaprevir (Incivek/Incivio) HCV Approved for Vertex, J&J’s partner. Approved. Rilpivirine (Edurant) HIV Approved. Approved. Rivaroxaban (Xarelto) VTE Prevention Approved. Also approved for

prevention of stroke and systemic embolism in atrial fibrillation on 11/4/11 after a favorable advisory panel scheduled on 9/8/11.

Approved in 2008. Filed on 1/5/11 for prevention of stroke, DVT, and pulmonary embolism, which the CHMP adopted a positive opinion on 9/22/11.

Merck Boceprevir (Victrelis) HCV Approved. Approved. Nomac/E2 (Zoely) Oral Contraceptive CRL issued on 11/4/11. Approved. Novartis Arcapta Neohaler COPD Approved. Approved. Pfizer Remoxy Pain Management Received a CRL on 6/23/11, may

take one year to address concerns. N.A.

Crizotinib (Xalkori) Advanced NSCLC Approved. Accepted filing for review as announced on 8/17/11.

Roche Vemurafenib (Zelboraf) Metastatic Melanoma Approved. Filing announced on 5/11/11. Approval expected in the first quarter of 2012.

COPD Chronic Obstructive Pulmonary Disease. CRL – FDA Complete Response Letter. DVT Deep Vein Thrombosis. HCV Hepatitis C Virus. HIV Human Immunodeficiency Virus. NSCLC Non-Small Cell Lung Cancer. VTE Venous Thromboembolism. Source: FDA, EMA, and company reports.


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The oncology medicine, vandetanib, may soon see European approval following a positive

opinion recently adopted by the Committee for Medicinal Products for Human Use (CHMP) on

Nov. 11, 2011. The probability that potential orphan cancer medicine may be approved by the

EMA may have been increased by FDA approval of the drug, known as Caprelsa, for use in

advanced medullary thyroid cancer patients in April. Caprelsa is the only medication approved

to treat the specific rare cancer.

While the original FDA review deadline for the NDA for the diabetes treatment dapagliflozin,

developed under an agreement between AstraZeneca and Bristol-Myers Squibb, has been

extended by three months, a decision is likely in the first quarter of 2012. In October, the FDA

moved the review action date for the sodium-glucose cotransporter-2 inhibitor out to

Jan. 28, 2012. The drug candidate faces an uphill battle after an FDA advisory committee

voted against approval in July. In Europe, the marketing authorization application seeking use

as a once-daily oral treatment for adult patients with type 2 diabetes is still being reviewed by

the EMA, which validated the regulatory dossier in January.

Lastly, authorization by the EMA for AstraZeneca’s drug candidate, Zinforo, may be

forthcoming given that the regulatory dossier was submitted in December 2010. The new

antibiotic is licensed from Forest Laboratories, Inc. and has been available as Teflaro to U.S.

patients since October 2010.

Roche Awaits EMA Decision on Zelboraf

Roche and its partner Daiichi Sankyo, Inc. (Daiichi Sankyo) announced the submission of the

marketing authorization application to the EMA in May for their experimental oncology drug

vemurafenib, for the potential use in metastatic melanoma patients. The potential

pharmaceutical works via the inhibition of a mutant BRAF protein, which represents more than

one-half of patients afflicted with advanced skin cancer. The companies expect full drug

approval in the first quarter of 2012. In August, the FDA quickly cleared the drug candidate (as

Zelboraf) for the second-line treatment of metastatic melanoma under a priority review.

Pfizer’s Orphan Medicine May be Approved in Europe

Also, looking back to the original regulatory filing time frame, Pfizer may see near-term

European approval of the orphan drug taliglucerase alfa, which is being developed in

partnership with Protalix. The marketing application for the enzyme replacement drug

candidate had been filed to the EMA seeking an indication for the treatment of Gaucher’s

disease in late November 2010.

Branded Drug Approvals Already Exceed 2010 Total

By the end of the third quarter, the total NMEs approved by the FDA had exceeded the entire

amount in 2010. Moreover, considering the NMEs approved by the FDA through November, a

total of 29 new drugs were cleared for marketing, compared with 21 novel medicines approved

during 2010. During third quarter alone, the FDA approved seven NMEs while the EMA cleared

12 NMEs for marketing within the E.U. At the same time, the Japanese drug regulator

authorized nine drugs for marketing that are new to the region, but have all been authorized for

sale in Europe and the U.S. in prior years.

J&J and Merck experienced the most research success across the globe in the third quarter as

each company received marketing authorization at least four new drugs developed in-house or


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in partnership with other drug developers. Merck received most of its approvals in Japan for

medicines already being sold in Europe and the U.S.

Merck Leads in Research Productivity for the Third Quarter

Merck gained the highest number of drug approvals in the third quarter with five marketing

clearances, including Victrelis and Zoely. Japan’s Ministry of Health, Labor and Welfare

(MHLW) .approved three older medications for commercialization in Japan: Gardasil, Cubicin

(in partnership with Banyu), and Zolinza.

Merck increased its infectious disease medicine chest in Europe with the authorization of the

new protease inhibitor Victrelis (boceprevir) for the treatment of hepatitis C in treatment-naïve

and -experienced patients in the middle of July. The highly touted medicine was cleared by the

FDA in May. The highly underserved hepatitis C market had not seen a new therapy in 20

years before Victerlis and Incivek/Incivio, developed by Vertex Pharmaceuticals Inc. (Vertex)

and J&J, were approved virtually back to back in the second quarter in the U.S. and in the third

quarter in Europe.

In addition, the new oral contraceptive Zoely (nomegestrol acetate/estadiol) was cleared for

marketing in Europe in early August. EMA approval of the marketing authorization application

was supported by a positive opinion adopted by the CHMP in March. The experimental drug

was developed under a licensing agreement with Teva following its acquisition of Merck

KGaA’s women’s health business, Theramex, in October 2010. Schering-Plough Corp.

(Schering-Plough) had originally established the licensing arrangement with Theramex.

Numerous brand-name and generic oral contraceptives are available on the market.

J&J Takes Second Place

Just behind Merck, J&J achieved marketing authorization during the third quarter of four new

drug candidates, including three potential blockbusters: Xarelto, Zytiga, and Incivio. The

company increased the geographical reach of its autoimmune disorder therapy Simponi when

Japanese drug regulators cleared the drug for RA treatment in July. Moreover, another highly

promising infectious disease agent, Edurant, was authorized for the European market in the

fourth quarter.

First, J&J and Bayer finally received FDA approval of their investigational anti-coagulant

Xarelto (rivaroxaban) for the prevention of VTE in patients undergoing hip or knee replacement

in early July. Full approval came after the NDA floundered at the FDA since July 2008 due to

time needed to resolve concerns listed in a CRL issued back in May 2009. Clotting following

orthopedic surgery is prevented through the use of the age-old standard of treatment warfarin,

the injectable drug enoxaparin (generic Lovenox), or the oral drug Pradaxa (from Boehringer

Ingelheim). In November, the FDA further approved Xarelto for the prevention of stroke and

systemic embolism in atrial fibrillation patients following a favorable recommendation by an

advisory panel in September.

In early September, the EMA authorized J&J’s oral medicine Zytiga (abiraterone acetate) for

the second-line treatment of advanced prostate cancer in combination with prednisone under

an accelerated assessment. The CHMP adopted an opinion favoring approval of the

investigation medicine in July, lending support for the drug approval. J&J received full

regulatory clearance in the U.S. in late April for use in men whose prostate cancer has spread

and is resistant to traditional hormonal therapies. The new medicine joins Sanofi’s Jevtana;


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Dendreon Corp.’s novel immunotherapy, Provenge; and generic docetaxol (Taxotere) in the

metastatic prostate cancer setting.

Since September, J&J increased its European medicine bag with two new infectious disease

treatments Incivio (telaprevir) and Edurant (rilpirivine) already approved by the FDA in

May. In September, Incivio (telaprevir) was authorized for marketing in Europe for the

treatment of genotype-1 hepatitis C in treatment-naïve and treatment-experienced patients

after the CHMP adopted a positive opinion in July. European rights to the novel medicine were

licensed from Vertex, which earlier received FDA approval of the investigational drug as Incivek

for hepatitis C treatment in combination with the current standard treatment (peglyated

interferon and ribavirin) in new patients as well as those who have failed prior therapies.

Secondly, J&J’s subsidiary Tibotec gained EMA approval in November of a new non-

nucleoside reverse transcriptase inhibitor (NNRTI), Edurant (rilpirivine), for the combination

treatment of treatment-naïve patients afflicted with HIV. The once-daily tablet is the third HIV

pharmaceutical to arise from Tibotec’s R&D pipeline. The marketing authorization application

was submitted in September 2010 and the CHMP gave a vote of confidence through a positive

opinion adopted on September 22. A pill combining Edurant with Gilead Sciences’ (Gilead)

Truvada, was approved by the FDA as Complera on August 10, and by the EMA as Eviplera on

November 28. Other NNRTIs currently marketed include Bristol-Myers Squibb’s Sustiva (also

used in the combination pill, Atripla), and Boehringer Ingelheim’s Viramune.

Pfizer Achieves Two Specialty Drug Approvals

Pfizer achieved the FDA approval of its investigational lung cancer therapy Xalkori (crizotinib)

in rapid fashion. The FDA cleared Xalkori for the treatment of advanced NSCLC in August,

shortly after Pfizer announced the acceptance of the regulatory filing for a priority review for the

first-in-class oral drug candidate in May. The novel medication blocks ALK and thus inhibits a

number of cell pathways needed for tumor growth and survival. Many treatments are available

Approvals of Novel Drugs per Geography Third-Quarter 2011 Product Company Indication FDA Approval EMA Approval MHLW Approval

Arcapta Neohaler Novartis Chronic Obstructive Pulmonary Disease 7/1/11 July 2011Xarelto J&J/Bayer Prevention of Venous Thromboembolism 7/1/11 Benlysta GlaxoSmithKline Lupus Erythematosus 7/13/11 Yervoy Bristol-Myers Squibb Metastatic Melanoma 7/13/11 Xgeva Amgen Bone Metastases 7/13/11 Victrelis Merck HCV 7/18/11 Tobi Podhaler Novartis Antibiotic 7/20/11 Fampyra Biogen Multiple Sclerosis Improved Walking 7/20/11 Zoely Merck Oral Contraceptive 7/27/11 Zelboraf Roche/Daiichi Sankyo Metastatic Melanoma 8/17/11 Adcetris Seattle Genetics Third-line Hodgkin’s Lymphoma 8/19/11 Firazyr Shire Hereditary Angioedema 8/25/11 Trajenta Boehringer Ingelheim Type 2 Diabetes 8/24/11 July 2011Xalkori Pfizer Advanced Non-small Cell Lung Cancer 8/26/11 Votubia Novartis Subependymal Giant Cell Astrocytoma 9/2/11 Vibativ Astellas Nosocomial Pneumonia 9/2/11 Zytiga J&J Advanced Castrate-Resistant Prostate Cancer 9/5/11 Incivio J&J HCV 9/19/11 Nexium AstraZeneca Stomach Ulcers July 2011Rotarix GlaxoSmithKline Rotavirus Vaccine July 2011Simponi J&J Rheumatoid Arthritis July 2011Cubicin Merck Antibiotic July 2011Zolinza Merck T-cell Lymphoma July 2011Gardasil Merck Human Papillomavirus Vaccine July 2011Gilenya Novartis Multiple Sclerosis 3Q11

MHLW Japan’s Ministry of Health, Labor and Welfare. Source: FDA, EMA, MHLW, and company reports.


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to treat NSCLC, including TKIs such as Roche’s Tarceva and AstraZeneca’s Iressa; other

targeted therapies like Roche’s Avastin; and various generic pharmaceuticals, including

gemicitabine (Gemzar), paclitaxol (Taxol), and docetaxol (Taxotere).

As anticipated after the CHMP adopted a positive opinion on July 21, the EMA cleared Pfizer’s

tafamidis meglumine (to be called Vyndaqel) for marketing in Europe on November 16. The

experimental medicine, obtained through its acquisition of FoldRx Pharmaceuticals, Inc.,, was

registered to the EMA in July 2010. The orphan drug is indicated for slowing progression of

transthyretin amyloid polyneuropathy, an inherited incurable and fatal disease which attacks

the liver. Vyndaqel is the only treatment option, other than liver transplant, to treat the genetic

disorder. Pfizer is also working to address FDA concerns listed in a refusal-to-file letter issued

in early April, which did not include a request for additional clinical work prior to approval.

Melanoma Treatment Options Increase

Two novel oncology drug candidates Yervoy (ipilimumab) and Zelboraf (vemurafenib)

were approved for sale in the U.S. or Europe during the third quarter that will provide welcome

relief to melanoma patients with few treatment alternatives. The highly deadly disease

historically lacked treatment options prior to the recent introduction of the two oncology

medicines. Previously, patients were limited to immunotherapy using interleukin-2 in high

doses (which can be toxic), and chemotherapy with limited utility in advanced stages of the

disease.

In mid-July, Bristol-Myers Squibb was granted marketing authorization from the EMA for the

very promising skin cancer treatment, Yervoy. The new monoclonal antibody was cleared for

the second-line treatment of metastatic melanoma, the same indication approved by the FDA in

March of this year.

Like Bristol-Myers Squibb, Roche and Daiichi Sankyo also launched their metastatic melanoma

pharmaceutical, Zelboraf (vemurafenib), in the second-line setting following FDA approval of

the novel medicine in August. Marketing clearance of vemurafenib in Europe could come in the

near term, given that the marketing authorization application for the new cancer therapy was

submitted in May.

AstraZeneca Finally Launches Potential Blockbuster to U.S. Market

The oft-delayed anti-platelet drug Brilinta was approved by the FDA for the prevention of

thrombotic events in patients with acute coronary syndromes on July 20, the twice-extended

PDUFA date from the original deadline in September 2010. The delay arose as the FDA was

pondering a discrepancy in the PLATO study data that showed less benefit to North American

patients, specifically those in the U.S. The FDA seemed satisfied with AstraZeneca’s

explanation that the U.S. clinical practice favoring high aspirin dosages is behind the lower

benefit. In the U.S., Brilinta enters a three-horse race, competing directly with Eli Lilly’s Effient

and Bristol-Myers Squibb’s Plavix, which goes generic in May 2012.

Primary Care Medicines Introduced

Early in the third quarter, Novartis gained FDA approval of the lowest dosage of its once-daily

bronchodilator, Arcapta Neohaler, for chronic obstructive pulmonary disease (COPD). The

ultimate approval decision, which came after extensive delays due to dosing regimen concerns,

paralleled the recommendations of a FDA advisory committee held in March, which called for

approval of only the lowest dosage (75 mcg), given no efficacy benefit at the higher 150 mcg


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dose. Marketing clearance was finally granted on the extended review deadline of July 1 after

languishing at the FDA since the original filing in December 2008. Other treatments that

alleviate symptoms of COPD include AstraZeneca’s bronchodilator, Symbicort; and Boehringer

Ingleheim’s anti-cholinergics, Atrovent and Spiriva.

Eli Lilly’s DDP-4 inhibitor Trajenta (linagliptin), developed through a diabetes partnership with

Boehringer Ingelheim, was granted marketing authorization for the treatment of type 2 diabetes

in Europe in late August and in Japan in early July. The FDA already cleared the diabetes drug,

called Tradjenta, for the U.S. marketplace in May. Trajenta is the third DPP-4 inhibitor to the

U.S. and E.U. marketplaces, joining Merck’s Januvia (and combination pill Janumet) and

AstraZeneca and Bristol-Myers Squibb’s Onglyza (and combination tablet Kombiglyze).

GlaxoSmithKline Extends Geographic Reach of Benlysta

The first medicine to treat lupus erythematosus in more than 50 years, Benylsta was authorized

for commercialization in the E.U. as an add-on therapy in the middle of July. GlaxoSmithKline

and its licensing partner HGS had already received FDA approval for the treatment of systemic

lupus in March. The marketing authorization application was submitted to the EMA in early

June 2010.

No Key Drug Patent Expiries in Third Quarter

The third quarter of the year represented a lull before the storm in regard to patent expiration in

the pharmaceutical industry. However, two highly important pharmaceuticals Lipitor and

Zyprexa have already lost U.S. market protection in the fourth quarter.

Industry’s Top-Selling Pharmaceuticals see Generic Competition

The pharmaceutical industry’s overall patent cliff ramped up in the fourth quarter as two of the

world’s 10 best-selling medicines (based on 2010 sales) Pfizer’s Lipitor and Eli Lilly’s

Zyprexa lost market exclusivity in the U.S. marketplace. Another two of the 10 top-selling

drugs Bristol-Myers Squibb and Sanofi’s Plavix, and AstraZeneca’s immediate-release

Seroquel face potential generic competition in the first half of 2012. Key drug patent lapses

are nonexistent for the remainder of 2011.

Pfizer Battles Lipitor Generics

Pfizer saw the inevitable happen on Nov. 30, 2011 as generic competition entered the U.S. for

its top-selling medicine Lipitor per a 2008 patent settlement agreement established with the

Near-Term Key Patent Expirations LTM 3Q11 Sales ($ Mil.) Product Company U.S. Sales ROW Sales Potential U.S. Patent Expiry Zyprexa Eli Lilly 2,541 2,667 Expired 10/23/11 with PE Lipitor Pfizer 5,595 4,612 Expired 11/30/11 per Ranbaxy agreement Geodon Pfizer 849 168 3/2/12 Seroquel IR AstraZeneca 3,204 1,010 3/26/12 with PE Viagra Pfizer 995 962 3/27/12 Avapro BMS/Sanofi Aventis 513 1,987 3/30/12 with PE Plavix BMS/Sanofi Aventis 6,430 2,957 5/17/12 with PE

PE Six-month pediatric exclusivity extension. ROW Rest of world. Source: FDA and company reports.


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first-to-file applicant, Ranbaxy Laboratories (Ranbaxy). Upon the loss, Watson

Pharmaceuticals Inc. (Watson) launched an authorized generic version of Lipitor while

Ranbaxy introduced its generic copies later in the day due to a delay related to resolution with

the FDA of quality issues at two of its manufacturing facilities in India. The world’s top-selling

drug generated $10.2 billion in sales for the LTM period ending Sept. 30, 2011, with $5.6 billion

coming from the U.S.

Pfizer has devised a handful of methods to minimize sales erosion of Lipitor as it competes

with Watson and Ranbaxy during the 180-day exclusivity period. The company has negotiated

unique deals with insurers and pharmacy benefit managers offering rebates to drive prices

below generics for favorably formulary placement, as well as reaching out directly to insured

patients with a $4 co-payment discount card through a multifaceted promotional strategy. Pfizer

also is collaborating with pharmacies to mail offers to patients for its co-payment discount card.

All in all, it is still uncertain whether Pfizer can gain market share in excess of the normally

anticipated share in a three-player market over the next six months.

Eli Lilly Loses Bestseller

Eli Lilly’s schizophrenia medicine Zyprexa was hit by generic drug competition when Teva

launched its tablets on October 24 following the drug patent expiration the day before. Tablets

in six different formulations and dosages were introduced with 180 days of market protection

due in part to an agreement between Teva and Dr. Reddy’s Laboratories Ltd. for the 20 mg

strength tablet. Teva will directly compete with its product offerings against authorized generic

versions offered by Prasco Laboratories. Total U.S. sales of Eli Lilly’s highest revenue

generator were $2.54 billion for the LTM period ending Sept. 30, 2011.

Pfizer Successfully Defends Viagra Use Patent

Pfizer’s Viagra was set to lose market exclusivity in the U.S. in March 2012; however, the

method-of-use patent pertaining to the treatment of erectile dysfunction (expiring in October

2019) was upheld in the third quarter. In August 2011, the U.S. District Court of the Eastern

District of Virginia ruled in favor of Pfizer, denying claims made by Teva including invalidity due

to obviousness and inequitable conduct in obtaining the use patent. Teva has not yet filed an

appeal. In addition, six other generic drug developers wait in the wings as their cases are under

consideration by the courts. The medication generated $1.96 billion of sales for the LTM period

at the end of the third quarter.

Seroquel-IR Still the Majority of Franchise Ahead of Expiration

Another atypical anti-psychotic medication may turn generic in the near term as the immediate-

release formulation of AstraZeneca’s Seroquel expires in the U.S. in late March 2012.

Seroquel-IR, with sales of $4.2 billion for the LTM period ending Sept. 30, 2011, represented

most of the franchise sales given that the extended form of Seroquel (Seroquel-XR) generated

$1.41 billion in the same period.

Switching to the newer formulation will help to stem the expected sales decline; however,

Seroquel-XR accounted for only about 17% of franchise prescriptions and 19% of revenues in

the U.S., as reported by AstraZeneca in its third-quarter earnings release. In the meantime,

AstraZenca has filed two citizen petitions that ask the FDA to refrain from approving any

ANDAs for Seroquel that omit a supplement to the product labeling supplement pertaining to

safety risks that is protected by data exclusivity for the bipolar disorder indications until early


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April 2012 and major depression until December 2012. The FDA has not yet ruled on the

requests.

Bristol-Myers Squibb, Sanofi Await Plavix and Avapro Expirations

The partnership between Bristol-Myers Squibb and Sanofi may see two major medicines

Plavix and Avapro lose patent protection in the first half of 2012. The greatest impact will be

felt by Bristol-Myers Squibb following the expiration in May of the U.S. patent for the anti-

platelet drug Plavix, which represents about one-third of total company revenues. U.S. sales

alone of the drug were $6.43 billion for the LTM period at the end of the third quarter. Sanofi

has been contending with generic competition to Plavix across Europe since May 2009. While

Bristol-Myers Squibb has been preparing for the U.S. patent expiration in recent years,

operational recovery prospects are still uncertain, especially in light of the patent expiration of

its schizophrenia medicine Abilify in 2015.

On the flip side, Sanofi will see a larger effect from the patent lapse of Aprovel (Avapro) than

Bristol-Myers Squibb, as the majority of revenues are generated in Sanofi’s marketing

territories. Sales of the blood pressure treatment already are declining in Europe due to

expanding penetration of generic medicines, and in the U.S. ahead of the patent loss. Sales

totaled $2.5 billion for the LTM period ending Sept. 30, 2011.

Third-Quarter 2011 Review

Negative Sales Trend Modestly Easing

Virtually all the Fitch-rated large drug manufacturers generated positive sales growth from their

medicine offerings on a constant-currency basis in the third quarter with one exception:

AstraZeneca. As such, the weighted average pharmaceutical-only revenues as a whole

reversed the modest declines seen in the first half of the year, as growth of 2.1% was achieved

in the third quarter. The figure adjusts for currency changes and consolidation activities that

were completed within the past 12 months involving Sanofi and Pfizer.

Fitch expects sustained overall drug sales growth in the fourth quarter may be difficult to obtain

with the U.S. patent lapses of both Pfizer’s Lipitor and Eli Lilly’s Zyprexa. The coming year will

continue to be tough, with the expected generic competition to Bristol-Myers Squibb’s Plavix in

the U.S. upon the patent’s expiration in May 2012.

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Third-Quarter Pharmaceutical-Only Sales Growth


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U.S. Pharmaceuticals

Each of the seven Fitch-rated drug developers based in the U.S. achieved revenue growth

from their pharmaceutical portfolios in the third quarter. In fact, only Amgen reported a sales

increase below that of the global market growth of 5% to 7% predicted for 2011 by IMS Health.

On a constant currency basis, Abbott and Bristol-Myers Squibb exceeded the expected range

during the quarter.

Abbott and Bristol-Myers Squibb Report Double-Digit Growth

Combining revenues from Abbott’s proprietary and established pharmaceutical showed growth

of 9.4% at constant currency and 15.2% on a reported basis in the third quarter. Total

pharmaceutical sales continue to be driven by Abbott’s top-selling drug, Humira, which

increased 18.4% at constant currency and represented 37.1% of the drug portfolio in the third

period. The company recently announced its intention to split off the proprietary pharmaceutical

division as a separate corporate entity; the remaining businesses will keep the medical devices

as well as the established pharmaceutical segment. The company’s five best-selling brand

name drugs Humira, the TriCor franchise, Kaletra, Niaspan, and Lupron represented a

whopping 76.4% of the proprietary pharmaceutical portfolio alone and generated solid growth

of 16.3% in the third quarter.

Bristol-Myers Squibb sustained the solid sales growth of its biopharmaceutical portfolio into the

third quarter, when revenues grew 8.4% at constant currency and 11.4% reported. The strong

performance was supported by growing demand for the company’s top five pharmaceuticals

Plavix, Abilify, Reyataz, Sustiva, and Baraclude which represented 66.2% of total revenues

and rose 10.2% after adjusting for the newest addition to the top five, Baraclude. Plavix, the

company’s top pharmaceutical, still reported solid revenue growth in the quarter at 7.8% (and

about 7% excluding the foreign exchange benefit) ahead of the anticipated loss of patent

protection in the U.S. in May 2012.

J&J Emerging from Patent Cliff

International revenues generated by J&J’s medicine chest, which now represent 52% of sales

and grew 18.5%, drove overall pharmaceutical segment growth of 4.9% at constant exchange

rate (or 8.9% reported) in the third quarter. Sales were up despite generic competition to the

antibiotic Levaquin that started in June 2011 and to the attention-deficit hyperactivity disorder

drug Concerta in May 2011. Following the loss of U.S. market exclusivity for Levaquin, the

company does not see another key drug patent expiration until May 2013, when the heartburn

drug Aciphex may lose patent protection in the U.S. A relatively refreshed drug portfolio, which

includes Zytiga, Simponi, and Stelara, is helping to offset the revenue pressure from patent

expiration. Revenues were also boosted in the third quarter from a re-negotiated agreement

with Merck pertaining to the autoimmune disease treatments, Remicade and Simponi.

Eli Lilly, Amgen, and Merck Nearing Market Growth

Eli Lilly is unlikely to will repeat the good operating performance of the third quarter when

revenues from the pharmaceutical product offering, including drug collaborations, increased by

3.5% at constant currency and 7.5% on a reported basis. The company lost U.S. market

exclusivity in late October for its top-selling pharmaceutical Zyprexa, which represented 19.2%

of total company sales (including the animal health business), and sales of which already fell

by 7% in the U.S. in the third quarter. A mitigating factor for future demand pressure on

Zyprexa is strong growth of the company’s four other top five selling medicines Cymbalta,


December 20, 2011

Corporates

Alimta, Humalog, and Cialis which collectively increased 21.8% in the third quarter. Eli Lilly

still targets a sales gain in the mid-single-digit range in 2011.

Merck’s overall human medicine portfolio generated 2.2% sales growth at constant currency,

7.2% on a reported basis in the third quarter, led by solid demand for the top-five selling drugs

Singulair, Januvia, Remicade, Zetia, and Vytorin which rose 8.3% as a whole and

constituted 31% of entire company revenues. The company also faces looming patent expiry,

albeit more modest than Eli Lilly, with the potential loss of marketing exclusivity for top-selling

pharmaceutical, Singulair, in August 2012. The asthma drug now represents only 11.1% of

total revenues, falling from about 18% in 2008 due to increased diversification with the

acquisition of Schering-Plough in 2009.

Amgen achieved a total revenue increase in the third quarter of 2.4% at constant foreign

exchange (or 3.4% reported growth) despite continued demand pressure on its erythropoietin

stimulating agents (ESAs) Epogen and Aranesp, which fell by 27.1% and 3.7, respectively. The

company expects that reimbursement changes in the U.S. pertaining to bundling of services in

the renal care setting are expected to decrease dose utilization of Epogen by 20% to 25% in

2011. Offsetting declines of the ESA franchises is growing uptake of newer products, Xgeva,

Prolia, and Nplate, which added $160 million on sales over the same period last year and

increased overall growth by 4.2%.

Pfizer Sales Stagnate Ahead of Lipitor Loss

Pfizer’s overall biopharmaceutical revenues were once again held down by sales pressure on

the industry’s top-selling medicine, Lipitor, during the third quarter. Prescription drug sales were

flat (reported sales were up 5.8%) compared to last year’s third quarter, as demand for the high

cholesterol treatment Lipitor fell 2% at constant currency (and increased 2% on a reported

basis) due to generic competition outside of the U.S. Moreover, the King acquisition in

February added $263 million in sales and 1.9% to overall growth in the quarter. Pfizer is now in

the midst of industry’s largest patent cliff (in dollars), given the loss of market exclusivity for

Lipitor in the U.S. in November.

European Pharmaceuticals

The negative pharmaceuticals sales growth trend for the six European drug developers

covered by Fitch was reversed in the third quarter, with AstraZeneca being the only European

company to report negative sales growth. Both GlaxoSmithKline and Novartis produced

positive quarterly sales growth of 3%, while Bayer and Roche recorded flat revenue growth.

Sanofi reported double-digit sales growth, driven entirely by the purchase of Genzyme in April

this year.

Novartis and GlaxoSmithKline Achieved Low Single-Digit Sales Growth

Along with GlaxoSmithKline, Novartis showed a sales increase of 3% at constant currency in

the third quarter in pharmaceuticals. Volume growth for Novartis of 10% was offset by a

negative pricing impact of 1% and a 6% negative impact from the effects of generic entries and

product divestments. Recently launched products were the main force behind the revenue

increase, representing a 36% rise in sales year over year at constant currency and accounting

for 29% of pharmaceuticals sales in the third quarter.

After two quarters of negative sales growth in 2011, GlaxoSmithKline’s pharmaceutical sales

increased during the quarter as well, by 3% at constant exchange rates, driven by a 14%


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Corporates

increase in vaccines sales, while pharmaceuticals were up 1%. Vaccines were particularly

strong in the quarter due to phasing-in benefits related to the sales of Cervarix for the rollout of

Japan’s national human papillomavirus program. Factors holding back the quarterly revenue

growth were a significant decrease in pandemic-related products, Avandia and Valtrex, which

decreased by 12% and 67%, respectively. In addition, pricing pressures, austerity price cuts,

and U.S. healthcare reform measures reduced revenue growth in the quarter by 1%.

Stagnant Sales at Bayer and Roche

Bayer recorded a small 0.3% growth in year-over-year sales in constant currency for the third

quarter. General medicine revenues improved 1.8% while specialty medicine revenues

declined by 2% over the same period in 2010. Overall growth was helped by a 16.5% increase

in the YAZ/Yasmin/Yasminelle frachise. In addition, marketing activities in China helped raise

overall Aspirin Cardio revenues by 11.4%; however, the partial reorganization of distribution for

general medicine in the U.S. contributed to a 31% fall in Levitra sales. A 3.9% decline in

Kogenate was mostly offset by a 4.5% improvement in Nexavar sales. Regionally, the largest

pharmaceutical sales gains occurred in China and Brazil while health system reforms have led

to sales declines in North America and Europe of 5% and 6.1%, respectively.

Third-quarter 2011 sales for Roche were flat at constant currency rates. Tamiflu sales were still

rapidly falling at 51% year over year, slightly less than the 88% sales decline seen in the

previous quarter, and Avastin, the second best-selling franchise, saw revenue declines by 10%

due to regulatory and reimbursement uncertainty regarding the metastatic breast cancer

indication in the U.S. On the positive side, three of Roche’s top four selling drugs Rituxan,

Herceptin, and Lucentis had revenue increases for the quarter of 7%, 4%, and 17%,

respectively. Other significant product sales growth/declines include Actemra, increasing by

69%; Mircera, growing by 82%; and Bonviva, falling by 24% during the quarter.

Sanofi’s Growth Helped by Genzyme

The Genzyme acquisition in April continues to bolster Sanofi’s sales by contributing EUR768

million to third-quarter revenues of EUR8.28 billion, including vaccines. Growth of 11.1% over

the third quarter of 2010 was driven by a Genzyme sales increase of 6.9%. Sanofi suffered

from generic competition for Plavix and Taxotere in the EU; Lovenox, Ambien CR and Taxotere

in the U.S.; and the impact of EU austerity measures and U.S. healthcare reform.

Pharmaceutical sales were also boosted by the two flagship products, Eloxatin and Multaq,

which achieved year-over-year sales growth rates of 179.2% and 52.2%, respectively.

Sales Drop Continues for AstraZeneca

AstraZeneca’s third-quarter revenue was down 2% at constant currency rates, also negatively

affected by the loss of $350 million to generic competition and government price interventions.

Western European sales dropped 15% due to volume declines from generic competition and

price reductions. Although emerging market revenues increased by 7%, growth is slower than

in previous quarters due to the loss of exclusivity for Crestor and Seroquel-IR in Brazil, and

delays in Middle East government tender orders that will now be shipped in the fourth quarter.

AstraZeneca’s third largest selling product, Nexium, also saw a 16% sales decline due to both

volume decline and a decrease in average realized selling prices.


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Corporates

Shareholder Returns

Fitch-rated pharmaceutical companies continue to shift the focus of shareholder returns to

share buybacks versus dividends that started in the second quarter. The total value returned to

shareholders declined to $19.8 billion from $21.1 billion in the second quarter and $28.1 billion

in the first reporting period. The decrease arises from dividend payments skewed to the first

half of the year due to most European pharmaceutical firms paying out the entire dividend at

annual general meetings held in the first half of the year, or shortly thereafter, depending on the

particular dividend policy.

In the third quarter, the primary method of returning value to equity holders was via share

repurchases. Fitch notes a trend of increasing equity purchasing, as $11.0 billion was bought in

the third quarter, compared with $9.8 billion in the second quarter and $6.1 billion in the first

quarter. The increasingly aggressive activity will continue into the fourth quarter, considering

Amgen’s Dutch tender offer for $5 billion in shares and Pfizer’s ever-increasing share

repurchase target for 2011, which presently ranges from $7 billion to $9 billion.

Shareholder Returns ($ Mil.)

Company 3Q11 Dividends

3Q11 Share Repurchases Repurchase Program Authorization (End of 3Q11)

Abbott 752 0.6 Approximately $2.5 Bil. remained of a $5 Bil. program authorized in Oct. 2008. Amgen 255 2,272 $4.1 Bil. remained including 5 Bil. authorized in April 2011. Increased $6.1 Bil. to $10 Bil. in Oct. 2011 AstraZeneca 1,118 1,712 $5 Bil. of repurchases are now planned in 2011. $3.9 Bil. bought in first nine months. Bayer None None N.A. Bristol-Myers Squibb 564 474 Approximately $1.8 Bil. remained of a $3 Bil. program authorized in May 2010. Eli Lilly 541 None Approximately $420 million remained under a $3 Bil. program. GlaxoSmithKline GBP814 GBP934 GBP2- 3 Bil. program to be completed in 2011. Johnson & Johnson 1,558 743 A $10 Bil. program from 2007 was completed by Jan. 2, 2011. Evergreen program in place. Merck 1,175 1,045 Approximately $5.0 Bil. remained including $5 Bil. authorization granted in April 2011. Novartis None 643 Approximately CHF7.7 Bil. remains of a CHF10 Bil. program established in Feb. 2008. The program was

reactivated in Dec. 2011 after suspending in April 2008 due to the Alcon purchase. Pfizer 1,551 2,110 $2.5 Bil. remained including $5 Bil. authorization from Feb. 2011; $6.5 Bil. has been purchased as of Oct. 31,

2011 out of a goal to buy back $7 Bil.$9 Bil. in 2011. Roche N.D. N.D. Approximately $0.5 Bil. remains from a $10 Bil. program authorized in April 2008. Sanofi None EUR387 A share repurchase program up to a maximum of EUR3 Bil. over 18 months was authorized in May 2010.

N.D. Not disclosed. Source: Company reports.


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Corporates

Appendix

The Appendix contains the latest detailed late-stage R&D portfolios, reflecting changes since

the publication of Fitch’s Special Report, “Global Pharmaceutical R&D Pipeline (Second-

Quarter 2011),” on Sept. 16, 2011, available at www.fitchratings.com.

Current New Molecular Entities by Company

Company Brand or Generic Name Treatment Area

Internally Developed or Licensed Status

Abbott Laboratories Linifanib (ABT-869) Cancer Partnered with Roche

Phase III started in HCC in 10/09.

Daclizumab Multiple Sclerosis Partnered with Biogen

Phase III initiated in 3/10 for relapsing remitting multiple sclerosis patients.

Elotuzumab (BMS-901608)

Cancer Partnered with Bristol-Myers Squibb

Phase III began in 5/11 in multiple myeloma.

Bardoxolone Methyl Kidney Disease Licensed outside the U.S., Reata

Phase III in ESRD started in 6/11.

Briakinumab (ABT-874)

Autoimmune Diseases

Internally Developed

Phase III for psoriasis initiated in 12/07; global filing for psoriasis in the third quarter of 2010, but was withdrawn in 1/11 given a need for further clinical work.

Amgen Motesanib Diphosphate (AMG-706)

Cancer Partnered with Takeda

Phase III for advanced NSCLC started in 7/07; MONET-1 trial in non-squamous NSCLC patients did not meet primary endpoint of overall survival as announced on 3/30/11.

AMG-386 Cancer Partnered with Takeda

Phase III in ovarian cancer (TRINOVA-1) started in 10/10.

Ganitumab (AMG-479)

Cancer Internally Developed

Phase III in pancreatic cancer initiated in 1/11.

Talimogene laherparepvec (OncoVex)

Cancer Vaccine Internally Developed from BioVex

Phase III began in melanoma in 4/09 and is fully enrolled; program in head and neck cancer was terminated in the second quarter of 2011 due to potential trial design modifications.

AstraZeneca Caprelsa (vandetanib)


EMA filing was accepted for review in 9/10, CHMP adopted a positive opinion on 11/17/11.

Brilinta/Brilnique (AZD6140)

Arterial Thrombosis


FDA approved on the extended PDUFA date of 7/20/11, an advisory panel voted in favor of approval on 7/28/10, full approval was delayed due to a CRL received on 12/16/10.

Zinforo (ceftaroline) Antibiotic Licensed outside the U.S., Forest

Filed to the EMA in 12/10.

Dapagliflozin Diabetes Licensed, Bristol-Myers Squibb

Filed to EMA and FDA in 12/10; FDA accepted for review in 3/11 and set a PDUFA of 10/28/11 which has been extended to 1/28/12, advisory panel did not favor approval on 7/19/11; EMA validated the application for review in 1/11.

Zibotentan (ZD4054)


A third Phase III trial (Study 33) in advanced castrate resistant prostate cancer (CRPC) patients failed to show improvement in overall survival, development in CRPC has been terminated. Work in earlier-stage prostate cancer treatment was already discontinued in 2/2011.

TC-5214 Major Depressive Disorder

Licensed, Targacept

Phase III studies as an adjunct to existing therapies for the treatment of major depressive disorder began on 6/23/10; FDA filing expected in second half of 2012; EMA filing expected in 2015.

Fostamatinib disodium (R788)

Autoimmune Disorders

Licensed, Rigel Phase III started in RA in 9/10; FDA and EMA filings expected in 2013.

NKTR-118 Opioid-induced Constipation

Licensed, Nektar Phase III trial started in 3/11; FDA and EMA filings expected in 2013.

Bayer Xarelto (rivaroxaban)

Prevention of VTE Partnered with J&J FDA approved for VTE prevention on 7/1/11 after a response was filed in 12/10 to a CRL issued on 5/28/09 and an advisory committee recommended approval on 3/19/09; FDA also approved for stroke and systemic embolism prevention on 11/4/11 after another advisory panel favored approval on 9/8/11. EMA filing for stroke prevention in atrial fibrillation, and treatment and prevention of DVT and pulmonary embolism was announced on 1/5/11; CHMP positive opinion adopted on 9/22/11. Stroke prevention filed in Japan on 4/14/11.

Eylea (VEGF-Trap Eye)

Wet Age-Related Macular Degeneration (AMD)

Licensed outside U.S., Regeneron

Phase III in AMD began in 8/07 and met primary endpoint; Phase III for CRVO began in 4/09, myopic choroidal neovascularization in 1/11, and diabetic macular edema in 4/11. EU filing for AMD was announced on 6/7/11 while filing for CRVO is expected in 2012. Filed in Japan in 6/11.

ADHD Attention-Deficit Hyperactivity Disorder. AF Atrial fibrillation. AMD Age-Related Macular Degeneration. AML Acute Myeloid Leukemia. ASM Aggressive Systemic Mastocytosis. CLL Chronic Lymphocytic Leukemia. COPD Chronic Obstructive Pulmonary Disease. CRC Colorectal Cancer. CRL Complete Response Letter. CRVO Central Retinal Vein Occlusion. DVT Deep Vein Thrombosis. ESRD End-Stage Renal Disease. GIST Gastrointestinal Stromal Tumor. GMP Good Manufacturing Practices. HCC Hepatocellular Carcinoma. HIV Human Immunodeficiency Virus. HPV Human Papillomavirus. MS Multiple Sclerosis. NSCLC Non-Small Cell Lung Cancer. NHL Non-Hodgkin’s Lymphoma. PAH Pulmonary Arterial Hypertension. PDUFA Prescription Drug User Fee Act. RA Rheumatoid Arthritis. REMS Risk Evaluation and Mitigation Strategy. VMS Vasomotor Symptoms. VTE Venous Thromboembolism. Continued on next page. Source: FDA, EMA, MHLW, ClinicalTrials.gov., and company reports.


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Corporates

Current New Molecular Entities by Company (Continued)



Bayer (Cont.) Riociguat PAH Internally Developed Phase III started in PAH in 12/08 with completion expected in 2012; in Phase III for chronic thromboembolic pulmonary hypertension beginning in 2/09.

Alpharadin Bone Metastases Licensed, Algeta Phase III for bone metastases in hormone-refractory prostate cancer (ALSYMPCA) initiated in 6/08 was ended early in 6/11 due to superiority and met endpoint as announced in 9//11. FDA granted fast-track approval status. Filings now expected in mid-2012.

Florbetaben Imaging Agent for Alzheimer’s Disease

Internally Developed Phase III began in 11/09.

Regorafenib Cancer Internally Developed Phase III in 3rd and 4th-line metastatic CRC began in 5/10 and in 3rd-line GIST cancer in 1/11. FDA granted orphan drug and fast-track review status to the GIST indication and a fast track review for CRC.

ATX-101 Reduction of Chin Fat

Licensed, Kythera Phase III initiated in 1/11.

Tedizolid Phosphate (TR701)

Anitbiotic Licensed, Trius Therapeutics

Phase III in acute skin structural infections began in 8/10.

Bristol-Myers Squibb

Yervoy (ipilimumab) Cancer Internally Developed EMA approved on 7/13/11 after the CHMP adopted a positive opinion on 5/19/11.

Dapagliflozin Diabetes Partnered with AstraZeneca

Filed to EMA and FDA in 12/10; FDA accepted for review in 3/11 and set a PDUFA of 10/28/11 which has been extended to 1/28/12, advisory panel did not favor approval on 7/19/11; EMA validated the application for review in 1/11.

Eliquis (apixaban) Prevention of Stroke

Partnered with Pfizer Filed to the FDA for prevention of stroke and systemic embolism in patients with atrial fibrillation in 9/11; accepted for priority review with a PDUFA of 3/28/12.

Brivanib Cancer Internally Developed Phase III studies for metastatic CRC began in 5/08 and HCC started in 2/09; filings for HCC expected in 2011.

Necitumumab (IMC-11F8)

Cancer Licensed, Eli Lilly Phase III trial (INSPIRE) in combination with Alimta in advanced non-squamous NSCLC was discontinued in 2/11, but a Phase III trial (SQUIRE) in combination with Gemzar in squamous NSCLC continues.

Elotuzumab BMS-901608)

Cancer Partnered with Abbott Phase III began in 5/11 in multiple myeloma.

Ixempra (Ixabepilone)

Cancer Internally Developed Filed in Japan in 12/07.

daclatasvir (BMS-790052)

Hepatitis C Internally Developed Phase III initiated in 9/2011

MK-3415A (CDA-1, CDB-1)

Clostridium difficile infection

Licensed, Merck and MBL

Phase III started in 10/2011, regulatory filings expected in 2014

Eli Lilly Tradjenta (linagliptin)

Diabetes Licensed, Boehringer Ingelheim

EMA approved on 8/25/11 after CHMP adopted a positive opinion on 6/23/11.

Solpura (liprotamase)

Pancreatic Insufficiency

Internally Developed, from Alnara

CRL issued on 4/15/11 asking that additional studies be conducted in line with an advisory panel that did not favor approval on 1/12/11.

Enzastaurin Cancer Internally Developed Phase III for diffuse B-cell lymphoma began in 6/06. Filing expected in mid-2013.

Ramucirumab (IMC-1121B)

Cancer Internally Developed, from ImClone

Phase III studies started for breast cancer in 8/08.

Solanezumab (LLY2062430)

Alzheimer's Disease

Internally Developed Phase III for mild-to-moderate Alzheimer's disease began in 5/09, expected completion in 2012.

Necitumumab (IMC-11F8)

Cancer Internally Developed, from ImClone

Phase III trial (INSPIRE) in combination with Alimta in advanced non-squamous NSCLC was discontinued in 2/11, but a Phase III trial (SQUIRE) in combination withGemzar in squamous NSCLC continues.

Dulaglutide (GLP-1Fc, LY2189265)

Diabetes Internally Developed Phase III AWARD-1 trial started in 2/10, four of five trials fully enrolled as of 7/11. Type 2 diabetes study completion anticipated in 2012.

Edivoxetine (LY2216684)

Depression/ADHD Internally Developed Phase III programs in major depression began in 10/10 and in ADHD in 6/09.

LY2127399 Automimmune Diseases

Internally Developed Phase III studies in lupus and RA initiated in 12/10.

Empagliflozin (BI-10773)

Diabetes Licensed, Boehringer Ingelheim

Phase III programs started in 7/10. Type 2 diabetes study completion expected in 2012.

Pomaglumetad methionil (LLY2140023)

Schizophrenia Internally Developed Phase III initiated in 2/11.

LY2963016 Diabetes Licensed, Boehringer Ingelheim

Phase III studies in Type 1 diabetes started in 8/11 and in Type 2 diabetes in 9/11.

LY2605541 Diabetes Licensed, Boehringer Ingelheim

Phase III studies in Type 1 diabetes started in 12/11 and in Type 2 diabetes in 10/11.

Amyvid PET Imaging Agent

Internally Developed, from Avid

FDA issued a CRL on 3/18/11; company responded in the third quarter of 2011.



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Corporates




GlaxoSmithKline Benlysta (belimumab)

Lupus Erythematosus Licensed, Human Genome Sciences

EMA approved on 7/13/11, CHMP adopted a positive on 5/20/11.

Migalastat (Amigal) Fabry Disease Licensed, Amicus Phase III initiated in 8/09, second late-stage study to last 18 months comparing to enzyme replacement therapy started in 9/11.

Revolair (Horizon) Chronic Obstructive Pulmonary Disease

Licensed, Theravance Phase III started in 10/09; Phase III asthma trial began in 2/10. Both programs are fully enrolled.

Darapladib (Tyrisa) Atherosclerosis Licensed, Human Genome Sciences

Phase III trials began in 12/08; second Phase III study began in 12/09.

Albiglutide (Syncria)

Diabetes Licensed, Human Genome Sciences

Phase III studies started in 2/09; enrollment completed for eight studies. Top-line results of first study did not achieve non-inferiority to Victoza as announced on 11/16/11.

Dolutegravir (GSK1349572)

HIV Developed with Shionogi via ViiV Healthcare

Phase III started on 10/21/10.

GSK1120212 (MEK inhibitor)

Cancer Internally Developed Phase III studies in metastatic melanoma began in 11/10, enrollment completed in the third quarter of 2011; regulatory filings expected beyond 2012.

GSK2118436 (BRaf inhibitor)

Cancer Internally Developed Phase III in metastatic melanoma initiated in 1/11 and recruitment completed in the third quarter of 2011.

GSK2402968 (PRO-051)

Duchenne Muscular Dystrophy

Licensed for EU, Prosensa Phase III started in 12/10.

GSK1605786 (CCX282)

Automimmune Diseases

Licensed, ChemoCentryx Phase III in Crohn’s disease began in 12/10.

IPX066 Parkinson’s Disease Licensed outside the U.S., Impax

Phase III clinical work initiated in 4/09; ADVANCE-PD and APEX-PD studies met primary endpoints as announced in 4/11 and 6/11; EMA filing strategy under review.

MAGE-A3 (GSK1572932A)

Cancer Vaccine Internally Developed Phase III for NSCLC started in 10/07 and for multiple myeloma in 11/03.

Nimenrix (MenACWY)

Neisseria Meningitis A, C, W &Y Vaccine

Internally Developed Phase III; EMA filing announced on 3/2/11.

Menhibrix (Hib-MenCY-TT)

Neisseria Meningitis C&Y, Haemophilus Influenza b Vaccine

Internally Developed A second FDA CRL was issued on 9/23/11 to which the company responded on 12/1/11; the first CRL was received on 6/11/10; FDA filing occurred on 8/12/09.

Mosquirix Malaria Vaccine Internally Developed Phase III started in 5/09. Positive data was reported in 10/11

Herpes Zoster Shingles Vaccine Internally Developed Phase III started in 8/10.

Johnson & Johnson Zytiga (abiraterone acetate)

Cancer Internally Developed EMA approved for metastatic prostate cancer on 9/7/11 under an accelerated review. CHMP adopted a positive opinion on 7/21/11.

Incivio (telaprevir) Chronic Hepatitis C Licensed for EU, Vertex EMA approved on 9/20/11 under an accelerated assessment. CHMP adopted a positive opinion on 7/21/11.

Edurant (rilpivirine) HIV Internally Developed EMA approved on 11/28/11 after a CHMP positive opinion was adopted on 9/22/11.

Xarelto (Rivaroxaban)

Prevention of VTE Licensed, Bayer FDA approved for VTE prevention on 7/1/11 after a response was filed in 12/10 to a CRL issued on 5/28/09 and an advisory committee recommended approval on 3/19/09; FDA also approved for stroke and systemic embolism prevention on 11/4/11 after another advisory panel favored approval on 9/8/11.

Dacogen Cancer Licensed for EU, Eisai Phase III (U.S.) for AML initiated 11/05, discontinued clinical work in myelodysplastic syndromes; EMA filing for AML occurred in 5/11.

Bapineuzumab (AAB-001)

Alzheimer's Disease Partnered with Pfizer Phase III trials initiated in 12/07; granted FDA fast-track designation for mild-to-moderate Alzheimer’s disease; North American trial to complete in mid-2012, expects to file to the FDA in 2012-2013.

Canagliflozin Type 2 Diabetes Licensed, Mitsubishi Tanabe First Phase III trial initiated in 8/09. EU and US filings expected in the first half of 2012.

TMC435 Hepatitis C Internally Developed Phase III studies in treatment-naïve and –experienced patients began in 2/11. FDA granted a fast-track review.

Siltuximab (CNTO328)

Cancer Internally Developed Myeloma treatment is the lead indication, Phase III withdrawn prior to recruiting patients.

Priligy (Dapoxetine) Premature Ejaculation Licensed, Furiex “Non-approvable” letter received by FDA in 10/05.

Merck Victrelis (boceprevir)

Hepatitis C Internally Developed, from Schering-Plough

EMA approved for both treatment-naïve and –experienced patients on 7/18/11 under an accelerated assessment; CHMP adopted a positive opinion on 5/19/11.

Zoely (Nomac/E2) Oral Contraceptive Licensed, Merck KGaA EMA approved on 8/2/11, CHMP positive opinion adopted on 3/17/11. FDA filing was accepted for a standard review in 3/11; a CRL was issued on 11/4/11.



December 20, 2011

Corporates




Merck (Cont.) Ridaforolimus (MK-8669 or AP-23573)

Cancer Licensed, Ariad Pharmaceuticals

Phase III for sarcoma began in 9/07; met primary endpoint in SUCCEED trial, granted orphan drug status in U.S. and EU. FDA filing occurred in 8/11 and accepted for a standard review on 10/5/11. EMA filing submitted on 7/29/11 and accepted for review on 8/18/11.

MK-7243 (Sublingual Tablet-Based Immunotherapy, SCH 697243)

Grass Pollen and Ragweed Allergy Vaccine

Licensed, ALK-Abello Endpoint was met in new Phase III trial that began in 3/08, announced in 2/10; FDA filings expected in 2013.

Telcagepant (MK-0974)

Migraine Pain Internally Developed Project terminated in 7/11 following review of unfavorable data from a recently completed 6-month safety study.

Saflutan (tafluprost, MK-2452)

Glaucoma Licensed, Santen FDA filing was accepted for a standard review in 3/11; a CRL was received on 11/7/11.

Bridion (Sugammadex)

Anesthesia Adjuvant

Internally Developed, from Schering-Plough

FDA issued a “non-approvable” letter despite an advisory committee recommending approval on 3/11/08; a new clinical study protocol currently under FDA review; assessing FDA feedback; a response is expected in 2012.

Vorapaxar (MK-5348, Thrombin Receptor Antagonist)

Anti-thrombotic Internally Developed, from Schering-Plough

Two Phase III studies for MACE prevention initiated in 10/07; received FDA fast-track status. TRACER study in acute coronary syndrome patients was halted and TRA-2P study has been limited to patients with prior heart attack and peripheral arterial disease (not stroke) in 1/11. Filing status to be determined on data from TRACER and TRA-P studies.

Odanacatib (MK-0822)

Osteoporosis Licensed, Celera Phase III began in 9/07; expected filings in 2013.

Elonva (MK-8962, SCH-900962)

Fertility Internally Developed, from Schering-Plough

FDA filing expected in 2012.

Preladenant (MK-3814)

Parkinson’s Disease

Internally Developed, from Schering-Plough

Phase III started in 7/10; granted FDA fast-track status. Filing is expected in 2014.

Tredaptive (MK-0524A)

Cholesterol-Lowering

Internally Developed Received “non-approvable” letter from FDA on 4/28/08; FDA has requested data from HPS-2 THRIVE study expected to be completed in 2012; FDA filing expected in 2013.

Suvorexant (MK-4305)

Insomnia Internally Developed Phase III trial began in 12/09; filing expected in 2012.

Anacetrapib (MK-0859)

Cholesterol-Lowering

Internally Developed Phase III (DEFINE) began in 4/08 for patients with coronary heart disease; FDA filing expected beyond 2015.

Brinavess (vernakalant)

Atrial Fibrillation Licensed, Cardiome FDA issued an “approvable” letter on 8/11/08 for intravenous formulation. Phase II has been completed for oral formulation with Phase III to commence in 2011.

Vaniprevir Hepatitis C Internally Developed, Japan only

Long term Phase III studies in Japanese patients initiated in 9/11; filing expected in 2014.

V503 Nine-Valent HPV Vaccine

Licensed, CSL Phase III started in 9/08; filings expected in 2012.

V212 Herpes Zoster Vaccine

Internally Developed Phase III began in 12/10; regulatory filings expected in 2014.

V419 DTaP, Hep B, Polio, and Influenza Type H Vaccine

Through Sanofi Pasteur, the joint venture with Sanofi

Phase III studies began in 4/11; regulatory filings expected in 2014.

MK-3415A (CDA-1, CDB-1)

Clostridium difficile infection

Licensed, Bristol-Myers squibb and MBL

Phase III started in 10/2011, regulatory filings expected in 2014

Novartis Arcapta Neohaler (QAB149)

COPD Internally Developed FDA approved on 7/1/11 following a 3-month extension to the PDUFA date. An FDA advisory panel voted in favor of approval of lowest dosage only on 3/9/11. Approved for sale in Japan in 7/11.

Panobinostat (LBH589)

Cancer Internally Developed Phase III for multiple myeloma continues with a filing estimate of 2013. Will not pursue an indication for treating Hodgkin’s lymphoma.

Jakafi (ruxolitinib, INCB018424)

Myelofibrosis Licensed outside U.S., Incyte Phase III trials began in 7/09, of which two met the primary endpoints as announced in 12/10 and 3/11. EMA filing took place in the second quarter of 2011. EMA granted orphan drug status.

Agomelatine (AGO178)

Major Depressive Disorder

Licensed, Servier Project was discontinued in the third quarter of 2011.

Pasireotide (SOM230)

Cushing’s Disease Internally Developed EU filing for Cushing’s disease took place in 10/10 and the FDA filing occurred in the second quarter of 2011. FDA filing was withdrawn due to issues with the chemistry, manufacturing and controls section, company plans to respond after FDA discussions. EMA filing delayed from same issues; decision now expected in 2012. Phase III studies continue for acromegaly and refractory carcinoid syndrome with filings expected in 2012-2013.



December 20, 2011

Corporates




Novartis (Cont.)

Relaxin (RLX030) Acute Heart Failure Internally Developed, from Corthera

Phase III began in 10/07. FDA granted fast-track approval status. EMA and FDA filings expected in 2013.

Bexsero (MenB) Meningitis (serotype B) Vaccine

Internally Developed EMA filing for use in infants and children occurred in 12/10. U.S. filing expected beyond 2013.

Midostaurin (PKC412)

Cancer Internally Developed Phase III trials investigating AML began in 4/08; filings for ASM now planned in 2013 and for AML in 2014.

LCZ696 Heart Failure/ Internally Developed Phase III mortality and morbidity study commenced in 12/09; expected EMA and FDA filings in 2014.

Hypertension DEB025

(alisporivir) Hepatitis C Licensed, Debiopharm Phase III trials started in 3/11; regulatory filings planned in 2013.

AFQ056 Fragile X Syndrome Internally Developed Phase III long term extension study started in 8/11; filing expected in 2012.

TKI-258 (dovitinib) Cancer Internally Developed Phase III in renal cell carcinoma began in 3/11; filing expected in 2013.

AIN457 (secukinumab)

Autoimmune Diseases Internally Developed Phase III in psoriasis initiated in 6/11 and in arthritides (RA, psoriatic arthritis, ankylosing spondylitis) in 7/11. Filing for all indications planned in 2013.

Pfizer Eliquis (apixaban) Prevention of Stroke Licensed, Bristol-Myers Squibb

Filed to the FDA for prevention of stroke and systemic embolism in patients with atrial fibrillation in 9/11; accepted for priority review with a PDUFA of 3/28/12.

Vyndaqel (tafamidis meglumine)

TTR Amyloid Polyneuropathy

Internally Developed, from FoldRx

EMA approved orphan drug status on 11/16/11 after the CHMP adopted a positive opinion on 7/21/11. FDA also granted orphan drug status and a fast track review. FDA filing was made in 2/11 and was issued a “refusal to file” letter on 4/4/11, to which the company hopes to respond quickly as no additional clinical work is required.

Xalkori (crizotinib) Cancer Internally Developed FDA approved the orphan drug on 8/26/11 for advanced NSCLC under a priority review. The rolling FDA filing began in 1/11. Filed and granted orphan drug status in Japan. Acceptance of filing by EMA was announced on 8/17/11.

Taliglucerase alfa Gaucher’s Disease Licensed, Protalix Rolling filing to FDA completed in 4/10. Despite fast-track approval and orphan drug status, CRL issued on PDUFA date of 2/25/11. The re-filing on 8/1/11 was accepted for review as announced on 8/17/11; PDUFA reset to 5/1/12. EMA filing announced on 11/29/10, also granted orphan drug status from EMA.

Inlyta (axitinib) Cancer Internally Developed Phase III trials for metastatic renal cell carcinoma began in 6/08; filed to the EMA and accepted for review on 6/1/11; FDA accepted filing for standard review on 6/28/11; advisory committee unanimously recommended approval on 12/7/11.

Bosutinib (SKI-606) Cancer Internally Developed, from Wyeth

Phase III trials started for chronic myelogenous leukemia in 12/07. EMA accepted filing for review as announced on 8/17/11. FDA filing expected in 2011.

Tofacitinib (CP-690550)

Rheumatoid Arthritis Internally Developed Phase III trials started in the U.S. for RA in 2/09. EMA accepted for review for moderate to severe RA as announced on 11/21/11. FDA and Japan filings expected in 2011.

Bapineuzumab (AAB-001)

Alzheimer's Disease Partnered with J&J Phase III trials initiated in 12/07; granted FDA fast track designation for mild to moderate Alzheimer’s disease; North American trial to complete in mid-2012 and Pfizer trials to end in 2014.

Viviant (bazedoxifene)

Osteoporosis Prevention and Treatment

Licensed, Ligand Received second FDA “approvable” letter for prevention indication on 12/24/07, and received an approvable letter for treatment indication on 5/23/08; FDA advised in 2/08 that an Advisory Committee will be held to discuss prevention and treatment indications.

Aprela (bazedoxifene/ conjugated estrogens)

Relief of VMS due to Menopause

Licensed, Ligand Phase III completed; must first successfully complete additional work including a proposed formulation change, and link it to that used in clinical trials; additional clinical work may be necessary; plans currently contemplate an initial filing for only a lower dose.

Pristiq (desvenlafaxine)

Relief of VMS due to Menopause

Internally Developed, from Wyeth

Received FDA “approvable” letter 7/07 for VMS necessitating a new clinical trial that was recently completed and data was submitted to the FDA in 12/10.

Neratinib (HKI-272) Cancer Internally Developed, from Wyeth

Out-licensed drug project to Puma in 10/11.

Dacomitinib (PF-299804)

Cancer Internally Developed Phase III started in advanced NSCLC in 9/09.

Inotuzumab ozogamicin (CMC-544)

Cancer Internally Developed, from Wyeth

Phase III trials for non-Hodgkin’s lymphoma started in 2/11.

Remoxy Pain Management Licensed, Pain Therapeutics, from King

Received CRL from FDA on PDUFA date of 6/23/11, which may take a year to resolve the manufacturing concerns raised in the letter; response details in several months. Already received an FDA approvable letter in 12/08.

ALO-02 (oxycodone / naltrexone)

Pain Management Internally Developed, from King

Phase III in chronic pain began in 12/10.



December 20, 2011

Corporates




Roche Zelboraf (vemurafenib)

Cancer Licensed, Daiichi Sankyo (Plexxikon)

Approved by FDA on 8/17/11 under a priority review. Filings to the EMA announced on 5/11/11, approval expected in the first quarter of 2012.

Pertuzumab (RG1273)


Phase III for HER-2+ metastatic breast cancer began in 12/07; CLEOPATRA trial (in combination with Herceptin and chemotherapy) met its primary endpoint. Filings anticipated in 2011.

RG7159 (GA101, RO50772759)


Phase III trials in CLL started in 12/09 and in NHL in 2/10; filings for CLL expected in 2013 and for NHL after 2014.

Dalcetrapib (JTT-705)

Dyslipidemia Licensed, Japan Tobacco

Phase III trials started in 4/08 and enrollment was completed in the second quarter of 2010; filings expected in 2013.

Aleglitazar Cardio-protection in Diabetes


Phase III trials began in 2/10; filing planned after 2014.

RG1678 (RO4917838)

Schizophrenia Internally Developed

Phase III began in 11/10 for suboptimal controlled positive symptoms and in 7/10 for negative symptoms; filing expected in 2013.

Ocrelizumab (RG1594)

Multiple Sclerosis Licensed, Biogen Phase III trials opened in 1/11 in primary progressive MS and in 8/11 for relapsing remitting MS; filing expected in 2014.

Vismodegib (RG3616)

Cancer Licensed, Curis Phase II registration studies in advanced basal cell carcinoma started in 1/09; filed to FDA in 9/11 using single-arm Phase II (ERIVANCE) data; priority review was granted with a PDUFA of 3/8/12.

Tofogliflozin (CSC452)

Diabetes Partnered, Chugai

Phase III initiated in the third quarter of 2011.

Sanofi Iniparib (BSI-201) Cancer Internally Developed

Phase III studies in breast cancer began in 7/09. Study results did not achieve primary endpoints of overall and progression-free survival, however, there was improvement in the second- and third-line settings. Discussions are ongoing with the FDA and EMA regarding next steps. Granted fast-track status by the FDA.

Ombrabulin (AVE8062)

Cancer Licensed, Ajinimoto

Phase III in advanced sarcoma started in 6/08 and enrollment is complete.

Zaltrap (aflibercept, VEGF-Trap)

Cancer Licensed, Regeneron

Phase III studies in prostate (began 8/07), and colorectal (11/07) cancers. Top-line results in metastatic CRC showed overall and progression-free survival benefit. FDA filing in second-line treatment of advanced CRC occurred in 10/11. EMA submission is expected in the fourth quarter of 2011.

Kynamro (mipomersen)

Familial Hypercholesterolemia

Licensed, Isis (from Genzyme)

Phase III studies started in 9/07. EMA filing occurred in 7/01. FDA filing is anticipated in the fourth quarter of 2011.

Lyxumia (lixisenatide, AVE0010)

Diabetes Licensed, Zealand Pharma

Phase III started in 6/08, a total of nine studies are being conducted with most completed by the end of 2011, of which four trials have reported positive results. EMA filing took place in 10/11. FDA filing planned for second half of 2012.

Aubagio (teriflunomide)

Multiple Sclerosis Internally Developed

Phase III started 9/04, another Phase III comparing drug vs. placebo began in 2/08. FDA filing occurred in 8/11 and accepted for review in 10/11. EMA filing expected in the first quarter of 2012.

Visamerin / Mulsevo (semuloparin)

Anticoagulant Internally Developed

Phase III began in 6/08 for the prevention of VTE in cancer patients undergoing chemotherapy; only pursuing oncology setting. EMA and FDA filings in 9/11.

Eliglustat Gaucher’s Disease Internally Developed, from Genzyme

Phase III trials began in 8/09.

Otamixaban Anticoagulant Internally Developed

Phase III started in 3/10.

Ataluren (PTC124) Cystic Fibrosis Licensed, PTC Therapeutics (from Genzyme)

Phase III trials started in 7/09.

Sarilumab (SAR153191)

Autoimmune Diseases

Licensed, Regeneron

Phase III studies in RA initiated in 9/11.

V419 DTaP, Hep B, Polio, and Influenza Type H Vaccine

Through Sanofi Pasteur, the joint venture with Merck

Phase III studies began in 4/11; regulatory filings expected in 2014.

Hexaxim DTaP, Hep B, Polio, and Influenza Type H Vaccine


Phase III. Licensing procedure for territories outside of Europe started in 7/11.

ADHD Attention-Deficit Hyperactivity Disorder. AF Atrial fibrillation. AMD Age-Related Macular Degeneration. AML Acute Myeloid Leukemia. ASM Aggressive Systemic Mastocytosis. CLL Chronic Lymphocytic Leukemia. COPD Chronic Obstructive Pulmonary Disease. CRC Colorectal Cancer. CRL Complete Response Letter. CRVO Central Retinal Vein Occlusion. DVT Deep Vein Thrombosis. ESRD End-Stage Renal Disease. GIST Gastrointestinal Stromal Tumor. GMP Good Manufacturing Practices. HCC Hepatocellular Carcinoma. HIV Human Immunodeficiency Virus. HPV Human Papillomavirus. MS Multiple Sclerosis. NSCLC Non-Small Cell Lung Cancer. NHL Non-Hodgkin’s Lymphoma. PAH Pulmonary Arterial Hypertension. PDUFA Prescription Drug User Fee Act. RA Rheumatoid Arthritis. REMS Risk Evaluation and Mitigation Strategy. VMS Vasomotor Symptoms. VTE Venous Thromboembolism. Source: FDA, EMA, MHLW, ClinicalTrials.gov., and company reports.


December 20, 2011

Corporates

Key Statistics

The U.S. figures are presented in quarterly and yearly formats. The broader key statistics are

calculated only yearly for European companies due to the timing of financial reporting. Three-

year periods are used to calculate “Sales At-Risk” (revenues potentially subject to generic

competition) on a forward-looking basis and “New Drug Product Sales” on a historical basis

from the point of market introduction.

Pharmaceutical Comparisons U.S. Quarterly Statistics

($ Mil.) Abbott

Laboratories AmgenBristol-Myers

Squibb Co. Eli Lilly & Co Johnson &

Johnson Merck &Co., Inc. Pfizer Inc.

Three Months Ended Sept. 30, 2011 Total Revenues 9,816.7 3,944.0 5,345.0 6,147.9 16,005.0 12,022.0 17,193.0YOY Quarterly Revenue Growth (%) 13.2 3.4 11.4 8.7 6.8 8.1 6.3Sequential Quarterly Revenue Growth (%) 2.1 (0.4) (1.6) (1.7) (3.6) (1.1) 1.2Total Pharmaceutical Sales 5,687.0 3,944.0 5,345.0 5,696.9 5,982.0 10,354.0 17,193.0% of Sales 57.9 100.0 100.0 92.7 37.4 86.1 100.0YOY Quarterly Revenue Growth (%) 15.2 3.4 11.4 7.5 8.9 7.2 23.3Sequential Quarterly Revenue Growth (%) 3.4 (0.4) (1.6) (2.8) (4.0) (0.1) 17.4Top-Selling Product 2,111.0 1,003.0 1,788.0 1,182.3 1,408.0 1,336.0 2,602.0% of Sales 21.5 25.4 33.5 19.2 8.8 11.1 15.1YOY Quarterly Revenue Growth (%) 25.7 9.5 7.8 (2.5) 14.6 9.9 2.7Sequential Quarterly Revenue Growth (%) 5.7 (1.2) (4.1) (16.1) 2.7 (1.3) 0.4Top Five Products 3,285.0 3,336.0 3,540.0 3,943.6 2,792.0 3,826.0 6,169.0% of Sales 33.5 84.6 66.2 64.2 17.4 31.8 35.9YOY Quarterly Revenue Growth (%) 16.3 (3.1) 7.7 12.7 7.5 8.3 14.2Sequential Quarterly Revenue Growth (%) 2.5 (2.2) (2.5) (3.6) (5.2) (5.0) 5.3Sales "At-Risk" 419.0 1,585.0 2,122.0 3,114.2 235.0 2,528.0 5,279.0% of Sales 4.3 40.2 39.7 50.7 1.5 21.0 30.7R&D Expense 1,009.6 761.0 973.0 1,280.9 1,773.0 1,932.0 2,034.0% of Sales 10.3 19.3 18.2 20.8 11.1 16.1 11.8New Drug Product Sales 230.0 248.0 88.7 318.0 127.0 1,006.0% of Sales 5.8 4.6 1.4 2.0 1.1 5.9YOY Quarterly Revenue Growth (%) 228.6 226.3 144.4 (58.4) 17.9Sequential Quarterly Revenue Growth (%) 19.8 18.7 20.0 30.9 (27.4) 22.5Operating LTM EBITDA 9,693.2 6,525.0 7,447.0 8,169.7 19,999.0 14,739.7 29,594.0Operating EBITDA Margin (%) 25.2 42.2 35.6 33.5 31.1 30.8 43.4Free Cash Flow Margin (%) 14.3 30.8 10.8 19.1 9.1 12.7 19.6Net Acquisitions and Divestitures (985.7) (701.0) (982.0) (951.9) (1,548.0) (801.2) (1,085.0)Total Debt with Equity Credit/ Operating LTM EBITDA (x)

1.7 2.2 0.7 0.9 0.9 1.2 1.4

Net Debt 8,744.9 (3,223.0) (3,296.0) 295.7 (12,570.0) 2,571.0 12,073.0LTM Dividends (2,878.1) (255.0) (2,243.0) (2,180.3) (6,082.0) (4,819.8) (6,254.0) Three Months Ended June 30, 2011 Total Revenues 9,616.30 3,959.00 5,434.00 6,252.80 16,597.00 12,151.00 16,984.00YOY Quarterly Revenue Growth (%) 9 4.1 14 8.8 8.3 7.1 (2.0)Sequential Quarterly Revenue Growth (%) 6.4 6.8 8.4 7.1 2.6 4.9 2.9Total Pharmaceutical Sales 5,501.00 3,959.00 5,434.00 5,863.30 6,233.00 10,360.00 14,640.00% of Sales 57.2 100 100 93.8 37.6 85.3 86.2YOY Quarterly Revenue Growth (%) 12 4.1 14 8.1 12.3 6 (2.5)Sequential Quarterly Revenue Growth (%) 8.3 6.8 8.4 7.2 2.9 5.5 2.9Top-Selling Product 1,997.00 1,015.00 1,865.00 1,408.30 1,371.00 1,354.00 2,591.00% of Sales 20.8 25.6 34.3 22.5 8.3 11.1 15.3YOY Quarterly Revenue Growth (%) 25.4 15.7 14.6 11.5 21.3 7.7 (7.9)Sequential Quarterly Revenue Growth (%) 21.3 8.4 5.9 9.9 6.7 2 8.6Top Five Products 3,204.00 3,410.00 3,630.00 4,089.20 2,946.00 4,026.00 5,856.00% of Sales 33.3 86.1 66.8 65.4 17.8 33.1 34.5YOY Quarterly Revenue Growth (%) 19.9 3 11.5 13.4 11.9 12.5 4.4Sequential Quarterly Revenue Growth (%) 19.7 5.8 7.2 9.6 2.2 3.7 3.3Sales "At-risk" 419 1,611.00 2,238.00 3,262.10 247 2,330.00 5,788.00% of Sales 4.4 40.7 41.2 52.2 1.5 18.9 34.1R&D Expense 1,037.80 819 923 1,260.60 1,882.00 1,936.00 2,069.00% of Sales 10.8 20.7 17 20.2 11.3 15.9 12.2New Drug Product Sales 192 209 73.9 243 175 821% of Sales 4.9 3.9 1.2 1.5 1.4 4.8YOY Quarterly Revenue Growth (%) 231 280 222.7 (65.3) 20.4Sequential Quarterly Revenue Growth (%) 43.3 158 31.3 (26.4) 47.1 (27.0)Operating LTM EBITDA 10,558.40 6,698.00 7,255.00 8,307.90 20,067.00 16,136.90 28,786.00Operating EBITDA Margin (%) 28.3 43.7 35.6 34.7 31.7 34.4 42.8Free Cash Flow Margin (%) 14.2 34.9 9.6 18.2 10.3 8.9 23.5

Continued on next page. Source: Company reports.


December 20, 2011

Corporates

Pharmaceutical Comparisons U.S. Quarterly Statistics (Continued)

($ Mil.) Abbott




Three Months Ended June 30, 2011 (Cont.) Net Acquisitions and Divestitures (2,700.70) (701.00) (677.00) (824.40) (1,889.00) (811.7) (3,442.00)Total Debt with Equity Credit/ Operating LTM EBITDA (x) 1.7 2.1 0.7 0.8 0.9 1.1 1.5Net Debt 9,325.60 (4,989.00) (2,699.00) 398.8 (10,956.00) 4,325.00 16,227.00LTM Dividends (2,805.90) 0 (2,229.00) (2,184.70) (6,008.00) (4,826.10) (6,252.00) Three Months Ended March 31, 2011 Total Revenues 9,040.90 3,706.00 5,011.00 5,839.20 16,173.00 11,580.00 16,502.00YOY Quarterly Revenue Growth (%) 17.4 3.2 4.2 6.5 3.5 1.4 (1.5)Sequential Quarterly Revenue Growth (%) (9.3) (3.5) (2.0) (5.6) 3.4 (4.3) (6.0)Total Pharmaceutical Sales 3,783.00 3,706.00 5,011.00 5,469.40 6,059.00 9,820.00 14,224.00% of Sales 41.8 100 100 93.7 37.5 84.8 86.2YOY Quarterly Revenue Growth (%) (7.8) 3.2 4.2 5.3 7.5 0.3 (1.9)Sequential Quarterly Revenue Growth (%) (36.3) (3.5) (2.0) (5.1) 6.1 (7.2) (5.5)Top-Selling Product 1,646.00 936 1,762.00 1,281.90 1,285.00 1,328.00 2,385.00% of Sales 18.2 25.3 35.2 22.0 8 11.5 14.5YOY Quarterly Revenue Growth (%) 17.8 8.5 5.8 5.5 8.2 14 (13.5)Sequential Quarterly Revenue Growth (%) (12.4) (0.3) 2.7 (4.0) 20.7 (1.6) (9.3)Top Five Products 2,676.00 3,222.00 3,385.00 3,730.40 2,882.00 3,882.00 5,668.00% of Sales 29.6 86.9 67.6 63.9 17.8 33.5 34.4YOY Quarterly Revenue Growth (%) 13.5 (0.3) 2.4 7.8 3.3 5.9 1.8Sequential Quarterly Revenue Growth (%) (16.5) (5.2) (0.7) (4.4) 6.7 91.1) (1.70Sales "At-risk" 372 1,501.00 2,165.00 2,982.20 1,035.00 2,277.00 4,818.00% of Sales 4.1 40.5 43.2 51.1 6.4 19.7 29.2R&D Expense 912.4 736 935 1,124.00 1,738.00 2,158.00 2,027.00% of Sales 10.1 19.9 18.7 19.3 10.8 18.6 12.3New Drug Product Sales 134 81 56.3 330 119 1,125.00% of Sales 3.6 1.6 1.0 2.0 1 6.8YOY Quarterly Revenue Growth (%) 173.5 107.7 539.8 205.6 (73.1) 184.1Sequential Quarterly Revenue Growth (%) 57.7 (21.4) 19.8 (69.9) 18.3Operating LTM EBITDA 10,165.00 6,874.00 7,021.00 8,377.00 19,930.00 11,538.30 29,448.00Operating EBITDA Margin (%) 27.8 45.3 35.7 35.8 32.1 25 43.6Free Cash Flow Margin (%) 14.6 35.1 9.8 18.1 10.7 10.1 21.9Net Acquisitions and Divestitures (3,017.60) (403.00) (685.00) (972.8) (2,003.00) 181.3 (3,442.00)Total Debt with Equity Credit/ Operating LTM EBITDA (x) 1.9 1.6 0.7 0.8 0.9 1.6 1.4Net Debt 12,279.80 (4,197.00) (1,861.00) (40.8) (9,037.00) 4,817.00 17,392.00LTM Dividends (2,734.70) 0 (2,216.00) (2,169.30) (5,934.00) (4,839.40) (6,238.00) Three Months Ended Dec. 31, 2010 Total Revenues 9,967.80 3,841.00 5,111.00 6,187.00 15,644.00 12,093.60 17,561.00YOY Quarterly Revenue Growth (%) 13.4 0.8 1.6 4.3 (5.5) 19.8 6.2Sequential Quarterly Revenue Growth (%) 14.9 0.7 6.5 9.4 4.4 8.7 8.6Total Pharmaceutical Sales 5,939.00 3,841.00 5,111.00 5,762.70 5,710.00 10,581.00 15,051.00% of Sales 59.6 100 100 93.1 36.5 87.5 85.7YOY Quarterly Revenue Growth (%) 22.5 0.8 1.6 3.3 (4.7) 16.6 3.1Sequential Quarterly Revenue Growth (%) 20.3 0.7 6.5 8.7 3.9 9.5 7.9Top-Selling Product 1,879.00 939 1,715.00 1,335.80 1,065.00 1,349.00 2,629.00% of Sales 18.9 24.5 33.6 21.6 6.8 11.2 15YOY Quarterly Revenue Growth (%) 13.1 (1.1) 6 (2.3) (6.4) 7.1 (17.2)Sequential Quarterly Revenue Growth (%) 11.9 2.5 3.4 10.2 (13.3) 11 3.8Top Five Products 3,205.00 3,400.00 3,408.00 3,902.00 2,700.00 3,925.00 5,763.00% of Sales 32.2 88.5 66.7 63.1 17.3 32.5 32.8YOY Quarterly Revenue Growth (%) 9.5 (1.9) (0.1) 5.7 (8.4) 8.9 1.1Sequential Quarterly Revenue Growth (%) 13.5 (1.3) 3.7 11.5 3.9 11.1 6.7Sales "At-risk" 499 1,606.00 2,086.00 2,867.10 1,020.00 1,946.00 5,754.00% of Sales 5 41.8 40.8 46.3 6.5 16.1 32.8R&D Expense 1,057.40 854 1,010.00 1,438.10 1,982.00 4,510.60 2,819.00% of Sales 10.6 22.2 19.8 23.2 12.7 37.3 16.1New Drug Product Sales 85 103 47 395 951% of Sales 2.2 2 0.8 3.3 5.4YOY Quarterly Revenue Growth (%) 28.8 221.9 1,136.80 (59.9) 440.3Sequential Quarterly Revenue Growth (%) 21.4 35.5 29.5 29.6 11.5Operating LTM EBITDA 9,410.20 7,032.00 6,915.00 8,331.40 20,080.00 11,375.00 29,682.00Operating EBITDA Margin (%) 26.8 46.7 35.5 36.1 32.6 24.7 43.8Free Cash Flow Margin (%) 14.4 34.6 9.6 17.3 13.3 9.3 5.7Net Acquisitions and Divestitures (9,433.20) 0 (762.0) (634.8) (745.0) (256.0) (273.0)Total Debt with Equity Credit/ Operating LTM EBITDA (x) 2.0 2.0 0.7 0.8 0.8 1.6 1.5Net Debt 13,466.80 (3,739.00) (2,435.00) 199.5 (10,885.00) 5,681.00 16,021.00LTM Dividends (2,671.50) 0.00 (2,202.00) (2,165.30) (5,804.00) (4,853.00) (6,088.00)

Source: Company reports.


December 20, 2011

Corporates

Pharmaceutical Comparisons U.S. Yearly Statistics

($ Mil.) Abbott




2010 Total Revenues 35,166.70 15,053.00 19,484.00 23,076.00 61,587.00 45,987.00 67,809.00Year-Over-Year Revenue Growth (%) 14.3 2.8 3.6 5.7 (0.5) 67.7 35.6Total Pharmaceutical Sales 19,894.00 15,053.00 19,484.00 21,684.60 22,396.00 39,811.00 58,523.00% of Sales 56.6 100 100 94 36.4 86.6 86.3Year-Over-Year Revenue Growth (%) 20.7 2.8 3.6 5.1 (0.6) 57.8 28.5Top-Selling Product 6,548.00 3,558.00 6,666.00 5,026.40 4,612.00 4,987.00 10,733.00% of Sales 18.6 23.6 34.2 21.8 7.5 10.8 15.8Year-Over-Year Revenue Growth (%) 19.3 1.9 8.5 2.3 7.2 7 (6.1)Top Five Products 11,060.00 13,388.00 13,254.00 14,447.60 10,722.00 14,488.00 21,860.00% of Sales 31.5 88.9 68 62.6 17.4 31.5 32.2Year-Over-Year Revenue Growth (%) 12.3 0.2 4.4 9.3 (1.2) 17.2 6.5Sales "At Risk" 1,582.00 6,203.00 8,293.00 10,539.70 3,682.00 7,256.00 22,893.00% of Sales 4.5 41.2 42.6 45.7 6.0 15.8 33.8R&D Expense 3,724.40 2,894.00 3,566.00 4,884.20 6,844.00 10,937.00 9,379.00% of Sales 10.6 19.2 18.3 21.2 11.1 23.8 13.8New Drug Product Sales 262 275 115 619 1,290.00 2,882.00% of Sales 1.7 1.4 0.5 1.0 2.8 4.3Year-Over-Year Revenue Growth (%) 12.5 (50.8) 335.6 (37.2) (68.7) 213.3Operating EBITDA 9,410.20 7,032.00 6,915.00 8,331.40 20,080.00 11,375.00 29,682.00Operating EBITDA Margin (%) 26.8 46.7 35.5 36.1 32.6 24.7 43.8Free Cash Flow Margin (%) 14.4 34.6 9.6 17.3 13.3 9.3 5.7Net Acquisitions and Divestitures (9,433.20) 0.0 (762.0) (634.8) (745.0) (256.0) (273.0)Total Debt with Equity Credit/ Operating EBITDA (x) 2.0 2 0.7 0.8 0.8 1.6 1.5Net Debt 13,466.80 (3,739.00) (2,435.00) 199.5 (10,885.00) 5,681.00 16,021.00Dividends (2,671.50) 0 (2,202.00) (2,165.30) (5,804.00) (4,853.00) (6,088.00) 2009 Total Revenues 30,764.70 14,642.00 18,808.00 21,836.00 61,897.00 27,428.30 50,009.00Year-Over-Year Revenue Growth (%) 4.2 (2.4) (8.7) 7.2 (2.9) 15 3.6Total Pharmaceutical Sales 16,486.00 14,642.00 18,808.00 20,628.80 22,520.00 25,236.00 45,558.00% of Sales 53.6 100 100 94.5 36.4 92 91.1Year-Over-Year Revenue Growth (%) (1.3) (2.4) 6.2 7.0 (8.3) 5.8 3.1Top-Selling Product 5,488.00 3,493.00 6,146.00 4,915.70 4,304.00 4,659.70 11,434.00% of Sales 17.8 23.9 32.7 22.5 7.0 17 22.9Year-Over-Year Revenue Growth (%) 21.4 (2.9) 9.7 4.7 14.8 7.4 (7.8)Top Five Products 9,846.00 13,357.00 12,699.00 13,214.50 10,850.00 12,360.70 20,522.00% of Sales 32.0 91.2 67.5 60.5 17.5 45.1 41.0Year-Over-Year Revenue Growth (%) 3.0 (3.6) 10.6 7.5 (15.1) 0.9 (5.2)Sales "At Risk" 1,337.00 4,894.00 7,429.00 7,309.30 1,550.00 8,220.40 20,418.00% of Sales 4.4 33.4 39.5 33.5 2.5 30.0 40.8R&D Expense 2,743.70 2,864.00 3,647.00 4,326.50 6,986.00 5,845.00 7,754.00% of Sales 8.9 19.6 19.4 19.8 11.3 21.3 15.5New Drug Product Sales 233 559 26.4 985.0 4,118.50 920.0% of Sales 1.6 3.0 0.1 1.6 15.0 1.8Year-Over-Year Revenue Growth (%) 52.3 (41.8) (8.6) (61.3)Operating EBITDA 8,861.70 6,873.00 5,829.00 8,036.30 20,065.00 7,012.70 21,115.00Operating EBITDA Margin (%) 28.8 46.9 31.0 36.8 32.4 25.6 42.2Free Cash Flow Margin (%) 12.3 39.7 4.5 6.5 14.3 (5.6) 19.7Net Acquisitions and Divestitures (2,370.60) 0.00 (1,675.00) (72.3) (2,316.00) (8,972.60) (43,123.00)Total Debt with Equity Credit/ Operating EBITDA (x) 1.9 1.5 1.1 0.8 0.7 2.5 2.3Net Debt 6,523.90 (2,841.00) (2,153.00) 2,164.50 (4,884.00) 7,849.60 22,693.00Dividends (2,414.50) 0.0 (2,483.00) (2,152.10) (5,327.00) (3,479.10) (95,548.00) 2008 Total Revenues 29,527.60 15,003.00 20,597.00 20,378.00 63,747.00 23,850.30 48,296.00Year-Over-Year Revenue Growth (%) 13.9 1.6 6.5 109.4 4.3 (1.4) (0.3)Total Pharmaceutical Sales 16,708.00 15,003.00 17,715.00 19,284.70 24,567.00 23,850.30 44,174.00% of Sales 56.6 100.0 86 94.6 38.5 100.0 91.5Year-Over-Year Revenue Growth (%) 14.2 1.6 13.4 9.3 (1.2) (1.4) (0.6)Top-Selling Product 4,522.00 3,598.00 5,603.00 4,696.10 3,748.00 4,336.90 12,401.00% of Sales 15.3 24.0 27.2 23.0 5.9 18.2 25.7Year-Over-Year Revenue Growth (%) 47.6 (0.4) 17.8 (1.4) (20.2) 1.7 (2.2)Top Five Products 9,558.00 13,850.00 11,487.00 12,293.30 12,773.00 12,247.20 21,641.00% of Sales 32.4 92.3 55.8 60.3 20.0 51.4 44.8Year-Over-Year Revenue Growth (%) 20.4 1.8 18.4 10.3 (14.8) (6.30 9.3Sales "At Risk" 1,341.00 2,299.00 6,893.00 6,415.90 5,480.00 4,318.10 12,990.00



December 20, 2011

Corporates

Pharmaceutical Comparisons U.S. Yearly Statistics (Continued)

($ Mil.) Abbott




2008 (Cont.) % of Sales 4.5 15.3 33.5 31.5 8.6 18.1 26.9R&D Expense 2,688.80 3,030.00 3,531.00 3,840.90 7,577.00 4,805.30 7,512.00% of Sales 9.1 20.2 17.1 18.9 11.9 20.2 15.6New Drug Product Sales 153.00 960.00 4,505.00 2,379.00% of Sales 1.0 4.7 18.9 4.9Year-Over-Year Revenue Growth (%) (60.1) (4.1) 5.0 (38.2)Operating EBITDA 7,977.00 6,929.00 5,271.00 6,905.80 19,628.00 8,064.70 22,099.00Operating EBITDA Margin (%) 27.0 46.2 25.6 33.9 30.8 33.8 45.8Free Cash Flow Margin (%) 13.2 35.4 1.5 21.1 10.8 7.8 16.5Net Acquisitions and Divestitures (250.00) (56.0) 4,648.00 (6,179.30) (429.00) 0.00 (1,172.00)Total Debt with Equity Credit/ Operating EBITDA (x) 1.4 1.5 1.3 1.5 0.6 0.8 0.8Net Debt 6,365.70 624 (1,526.00) 4,535.90 (957.00) 754.00 (6,448.00)Dividends (2,174.30) 0.00 (2,461.00) (2,056.70) (5,024.00) (3,278.50) (8,541.00)



December 20, 2011

Corporates

Pharmaceutical Comparisons European Yearly Statistics ($ Mil.) GlaxoSmithKline Sanofi AstraZeneca Roche Novartis Bayer2010 Total Revenues 44,007.60 39,978.90 33,269.00 45,574.10 50,624.00 46,316.20Year-Over-Year Revenue Growth (%) 0.1 3.7 1.4 (3.2) 14.4 12.6Total Pharmaceutical Sales 36,242.00 35,043.40 33,269.00 35,575.70 30,558.00 14,398.60% of Sales 82.0 87.7 100.0 78.0 60.4 31.0Year-Over-Year Revenue Growth (%) (1.4) 3.0 1.4 (5.00) 7.1 4.2Top-Selling Product 7,965.00 4,618.40 5,691.00 6,202.60 6,053.00 1,591.90% of Sales 18.0 11.6 17.0 14.0 12.0 3.0Year-Over-Year Revenue Growth (%) 3.3 14 14.8 3.8 0.7 (5.6)Top Five Products 13,260.00 15,589.00 20,220.00 20,495.00 14,738.00 6,190.00% of Sales 30.00 39 60.8 45 29.1 13Year-Over-Year Revenue Growth (%) (1.7) (2.6) 11.3 (4.8) 6.4 1.6Sales "At Risk" 502.00 2,173.70 3,503.00 505 4,665.00 150.5% of Sales 1.1 5.4 10.5 1.0 9.2 0.3R&D Expense 4,812.75 5,790.80 5,318.00 8,726.00 7,081.00 2,727.00% of Sales 11.0 14.5 16.0 19.0 14.0 6.0New Drug Product Sales 1,612.00 751.3 1,621.00 381.12 302 % of Sales 4.0 1.9 5.0 1.0 0.6 Growth % Year-over-year (52.7) 55 (75.6) (92.2) Operating EBITDA 10,301.30 16,582.90 13,315.00 18,377.30 14,024.00 9,150.00Operating EBITDA Margin (%) 23 41.5 40.0 40.3 27.7 20Free Cash Flow Margin (%) 3.0 15.9 15.1 23.0 15.3 4.4Net Acquisitions and Divestitures (643.25) (2,280.3) (348.0) (483.8) (26,675.00) 80.5Total Debt/EBITDA (x) 2.27 0.66 0.69 1.57 1.64 1.62Net Debt 13,820.00 8,570.60 (2,958.00) 20,306.40 14,853.00 11,253.30Net Debt with Equity Credit/Operating EBITDA (x) 1.34 0.18 (0.22) 1.00 1.06 1.48Dividends (5,150.70) (4,129.00) (3,371.00) (5,054.40) (4,582.00) (1,531.20) 2009 Total Revenues 44,254.10 40,859.30 32,804.00 45,274.10 44,267.00 43,455.40Year-Over-Year Revenue Growth (%) 16.5 6.3 3.8 7.5 6.8 (5.3)Total Pharmaceutical Sales 36,993.80 36,003.20 32,804.00 35,993.30 28,538.00 14,593.40% of Sales 83.6 88.1 100.0 79.5 64.5 33.6Year-Over-Year Revenue Growth (%) 16.4 4.5 3.8 8.4 8.4 4.4Top-Selling Product 7,764.10 4,294.20 4,959.00 5, 742.90 6,013.00 1,781.80% of Sales 17.5 10.5 15.1 12.7 13.6 4.1Year-Over-Year Revenue Growth (%) 20.3 12.5 (4.6) 5 4.8 4.6Top Five Products 13,572.00 16,952.40 18,542.00 20,702.90 13,847.00 6,437.20% of Sales 30.7 41.5 56.5 45.7 31.3 14.8Year-Over-Year Revenue Growth (%) 12.3 8.7 8.4 11.6 6.2 7.3Sales "At Risk" 5,534.00 4,002.80 3,641.00 976.5 3,631.00 147.8% of Sales 12.5 9.8 11.1 2.2 8.2 0.3R&D Expense 4,807.90 6,389.80 4,409.00 8,211.00 5,840.00 2,575.10% of Sales 10.9 15.6 13.4 18.1 13.2 5.9New Drug Product Sales 3,432.00 513.1 1,503.60 3,882.00 % of Sales 7.8 1.3 3.3 8.8 Growth % Year-over-year 37.3 (21.0) 32.4 Operating EBITDA 15,749.80 17,440.40 12,770.00 16,341.70 12,248.00 8,716.70Operating EBITDA Margin (%) 35.6 42.7 38.9 36.1 27.7 20.1Free Cash Flow Margin (%) 7.4 13.1 17.9 18.0 14.1 7.2Net Acquisitions and Divestitures (4,123.10) (7,763.10) (73.8) (1,801.00) (259.3)Total Debt/EBITDA (x) 1.6 0.7 0.9 2.4 1.1 2.0Net Debt 15,204.80 6,542.60 (290.00) 22,993.50 (3,461.00) 13,759.20Net Debt with Equity Credit/Operating EBITDA (x) 1.0 0.4 0.0 1.4 (0.2) 1.8Dividends (4,823.50) (4,012.60) (2,988.00) (4,056.60) (3,993.00) (1,356.60) 2008 Total Revenues 45,177.30 40,672.20 31,601.00 42,261.40 41,459.00 48,565.20Year-Over-Year Revenue Growth (%) 7.0 (1.7) 6.9 (1.1) 8.9 1.6Total Pharmaceutical Sales 37,810.40 40,672.20 31,601.00 33,315.70 26,331.00 15,792.00% of Sales 83.7 100.0 100.0 78.8 63.5 32.5Year-Over-Year Revenue Growth (%) 6.4 (1.7) 6.9 (4.0) 9.6 4.3Top-Selling Product 7,674.90 4,039.50 5,200.00 5,487.30 5,740.00 1,802.90% of Sales 17.0 9.9 16.5 13.0 13.8 3.7Year-Over-Year Revenue Growth (%) 18.3 4.8 (0.3) 16.0 15.0 17.3Top Five Products 14,337.60 16,501.70 17,110.00 18,616.80 13,044.00 6,346.90% of Sales 31.8 40.6 54.1 44.1 31.5 13.1Year-Over-Year Revenue Growth (%) 4.3 6.9 11.5 7.7 15.2 9.0Sales "At Risk" 8,177.00 1,341.10 1,099.00 1,322.00 483 169.7% of Sales 18.1 3.3 3.5 3.1 1.2 0.3



December 20, 2011

Corporates

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Pharmaceutical Comparisons European Yearly Statistics (Continued) ($ Mil.) GlaxoSmithKline Sanofi AstraZeneca Roche Novartis Bayer2009 (Continued) R&D Expense 6,486.00 6,731.40 5,179.00 7,322.60 5,716.00 2,265.90% of Sales 14.4 16.6 16.4 17.3 13.8 4.7New Drug Product Sales 2,498.00 1,903.00 2,931.00 % of Sales 5.5 4.5 7.1 Growth % Year-Over-Year (33.4) 19.2 104.0 Operating EBITDA 17,566.70 16,172.70 10,903.00 15,324.20 11,724.00 10,058.90Operating EBITDA Margin (%) 38.9 39.8 34.5 36.3 28.3 20.7Free Cash Flow Margin (%) 7.9 15.3 6.4 10.9 10.3 (1.3)Net Acquisitions and Divestitures (825.6) (984.1) 32 (2,746.00) (11,601.00) (2,385.60)Total Debt/EBITDA (x) 1.7 0.5 1.1 0.3 0.6 2.3Net Debt 14,729.50 3,114.00 7,452.00 15,802.90 1,247.00 19,733.00Net Debt with Equity Credit/Operating EBITDA (x) 1.2 0.4 1.2 (1.0) 0.1 1.8Dividends (5,580.40) (3,987.80) (2,776.00) (3,748.40) (3,395.00) (1,661.20)


third-quarter 2011 special report late-stage r&d pipeline

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