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3rd International Congress on Nutrition, Fitness and Health

Innovation in Healthcare –an Industry (Roche) Perspective

Andreas Tschirky

Shanghai December 4, 2008

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Topics:

1. The R&D Innovation Model

2. Botanical Drug / Traditional Chinese Medicine (TCM)

3. Quality Assurance

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Healthcare budgets

squeezed

Access

Growing safety requirements

Intensifying challenges in the Healthcare industry

Declining growth rate in traditional markets

Patients Needs

Medical need grows faster than healthcare budgets

New competitors

Patent expiries

Declining R&D productivity

Political environment

4 RMT presentation August 2004

Phase I - (38 NMEs + 1 AI)

Roche R&D pipeline today

DBA Oncology

DBA Inflammation

DBA Virology

DBA Metabolic

DBA CNS

Others

Roche managedGenentech managedChugai managedArQule opt-in

Memory opt-inIsotechnika opt-in

BioTie opt-in

Additional Indication

Phase III - (4 NMEs + 41 AIs)

Phase II - (18 NMEs + 12 AIs)

NME

R-No.GENCHUARQ

MEMISO

BTI

Status as of March 31, 2008

Actemra - RAAntevas – subarach. haemorr.

R1569CHU

Xeloda – mCRC combo 1st lineXeloda–mCRC combo 2nd lineAvastin – RCC

R340R340

R435 1

1 Approved in EU, US to file in 2008

R547R1530R4733R7112R7159

solid tumorssolid tumorssolid tumorsoncologyNHL

R7167 solid tumors

GENGENGENGENGENGEN

anti-cMET – cancer therapyhedgehog ant. – solid tumorsanti-CD20 3rd gen. – hem. malig.IAP ant. – cancer therapyMEK inh. – cancer therapyABT-263–solid tumors & hem. malig.

GENCHU

R1646R1671R3477

CD40 Ab – NHL/MM/rel.large B-CLCRCpainasthmaautoimmune diseases

R7103R7277

GENGEN

COPDRAIFN-alpha Ab - SLEAnti-IL 13 - asthma

R7128R7227

CHUR1511R1512

HCVHCVHCVtype 2 diabetesPVD

R7201R7232R7234

R4929type 2 diabetesdyslipidemiatype 2 diabetes

type 2 diabetesR1663 anticoagulant

R1450R4996

Alzheimer‘sAlzheimer‘s

R1295 MS

R7204 malignant melanoma

GEN PI3 kinase inhibitor – cancer therapy

R4930 OX40L - asthma

BTI VAP-1 – inflammatory diseases

GEN Anti-oxLDL sec. prev CV events

R435R435

Avastin - NSCLC squamousAvastin - NSCLC mCNS treat.

R1273R1415+R

435R1507R3502

GENGENGEN

GENGEN

Tarceva + Avastin – NSCLC 1st line

pertuzumab – ovarian cancerR1273 pertuzumab – EBC HER2+

CD40 Ab – diff. large B Cell lymph.

T-DM1 - mBC

Apomab - sarcomaApomab - cancerApo2L/TRAIL - cancerABT-869 – solid tumors

Ewing‘s sarcoma

GENGEN

R667R3421

ISOR1626R3484R1439R1579

ARQ

Avastin – extensive SCLCAvastin - relapsed MMsolid tumorsRAR gamma - emphysemaPNP inh. – AI / transplant

renal transplantHCV pol - HCVHPV16 – cervical neoplasiaaleglitazar – type 2 diabetesDPP-IV (3) – type 2 diabetesGLP1 - type 2 diabetesR1583

GEN Raptiva - renal transplant

R435 Avastin - glioblastoma

R1594 ocrelizumab – RRMS

MEMR744CHU

Alzheimer‘s / schizophreniaCERA – chemo induced anaemiagastroparesis / IBS

R1678 schizophrenia

MabThera – CLL 1st lineMabThera – CLL relapsedMabThera – iNHL maint. 1st lineMabThera + Avastin – NHL aggr.Xeloda - adj. CC combo oxaliplatinXeloda – adj. CC combo AvastinXeloda – adj. BCAvastin - adj. CC

Avastin – pancreatic cancerAvastin – ovarian cancer 1st line lineadj. rectal cancerAvastin - mBC combo Taxot. 1st lineAvastin–mBC combo std. chem. 1st l.Avastin – mBC combo Hercept. 1st. l.Avastin – adj. NSCLCAvastin – m. gastric cancerAvastin – adj. BC HER2-Herceptin –m. gastric cancer HER2+

R105R105R105R105R340R340R340R435

R435R435R435R435R435R435R435R435R597

Avastin – prostate cancerR435

Tarceva – NSCLC maint 1st lineR1415

Tarceva+Avastin–NSCLC maint.1st l.Tarceva + Avastin – NSCLC 2nd lineAvastin – ovarian cancer 2nd lineAvastin – GIST recurr.Avastin – adj. rectal cancerAvastin – mBC 2nd line

R1415+R435R1415+R435GEN

GENGENGEN

CellCept – pemphigus vulgarisMabThera – RA DMARD IRActemra – sJIAocrelizumab - RAocrelizumab – SLE / LNED-71 – osteoporosisMabThera – lupus nephritis

R99R105

R1569R1594R1594

CHUGEN

Valcyte – CMV extensionR127

MabThera – PPMSTNKase – catheter clearance

GENGEN

Lucentis – diabetic macular edema

GENLucentis – renital vein occlusionEpogin – chemo induced anaemia

GENCHU

MabThera – ANCA ass. vascul.MabThera – SLEXolair – pediatric asthma

GENGENGEN

pertuzumab – mBC Her2+R1273

Tarceva – adj. NSCLCR1415

Avastin – high risk carcinoidGEN

CETP inh. - dyslipidemiaR1658 1

Registration - (2 NMEs + 3 AIs)

Notes

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Disease Biology Areas (DBAs)

• Integrate exploratory development expertise in cross-functional projects

• Deliver translational medicine approaches to select high-quality compounds for full development

• Apply and implement better-profiled and differentiated molecules in late-stage development

Current R&D Model at Roche

Idea Market

DBA CNS

DBA Oncology

DBLT

DBA Viral

DBA Inflammatory

DBA Metabolic

DBLT

DBLT

DBLT

DBLT

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Starting point: the Medical Needs in ChinaBasic Medical care Needs for Chinese People Huge population (1.3 Billion) From 10% to 80% healthcare insurance coverage within 11th 5 Year State Plan 3000 pharmaceutical companies produce generic and TCM based drugs Product Quality

New Medicine for Emerging Diseases 20 % population will become affluent in 2015 Cancer, Obesity and Type 2 Diabetes, Viral Diseases Alzheimer Disease, Cardio-vascular Diseases

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Change the way of doing drug discoveryM

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NewNewMedicineMedicineProposalProposal

TargetValidation

LeadIdentification

LeadDev.

LeadOptimization

EIH Enabling

EarlyClinicalSafety

EarlyClinicalEfficacy

DevelopmentPortfolio

PreparationPhase

IIPhase

III Launched

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• One size fit all and do it all internally• Extrapolation from test tubes to cells to animal to human• Fix defects vs select the best

projects

Diseases

Targets

Assays

Leads

China Pharma

Ro/Rw

China Biotech

FTIMPOC

CRO

MedSchHospital

MedSchHospital

CN

Aca

dem

ic

Drug Discovery Project Teams

The purpose of drug discovery is to help our patients to live their lives and The purpose of drug discovery is to help our patients to live their lives and improve the quality of their lives. Drug Discovery will lose its drive when we lost improve the quality of their lives. Drug Discovery will lose its drive when we lost our sight on patients. our sight on patients.

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Traditional Innovation Model:• Comprehensive Setup• Limited Flexibility• Majority are fixed costs (>90%)

RRDCC – A Novel Model for Drug Discovery

RRDCC Model:• Core Competencies In-house• Strong external Network• >50% of Research work conducted externally (at CROs, Biotechs and Hospitals

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TargetValidation

LeadIdentification

LeadDev.

LeadOptimization

EIH Enabling

EarlyClinicalSafety

EarlyClinicalEfficacy

DevelopmentPortfolio

PreparationPhase

IIPhase

III Launched

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TO

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External External researchresearchInternal Internal researchresearch

All of the benefits of being a part

of a global R&D organization:

a. Information and Knowledge

b. Access to expertise

c. Common standards and best practices

d. Budget

All of the advantages of being “Biotech-Like”

a. Highly focused and in house expertise

b. Rapid decision making to drive quality and value

c. Strong common sense of purpose

d. Avenue for growth expanding globally

e. Empowerment

Management Model that captures the Best of Both Worlds:

Management Model that captures the Best of Both Worlds

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Our analysis lead to a conclusion that active drug discovery efforts in China are focused on Oncology, Virology and Metabolic Disease

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Reach out to China Basic Research Groups

● Virology

● Metabolic Disease

● Oncology

Bohai Zone

Yangtze Delta

Zhujiang Delta

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Individualized Medicine

Non-Responders

Responders

Adverse Drug Events

A drug does not work in every patientsEfficacy rate ranging from 25-80%

Non-Responders

Responders

Adverse Drug Events

MolecularDiagnosis

A

B

C

Now we look closer to patient differentiation=> Individualized Medicine

11 RMT presentation August 2004

A growing Need for a range of Healthcare solutions

Consultation with themedical community: Patient focus Self testing: Prevention

Research activities

Diagnostics: Predisposition Prescriptions & consumption

of drugs: Reimbursement and Product Distribution

Medical therapies

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Topics:

1. The R&D Innovation Model

2. Botanical Drug / Traditional Chinese Medicine (TCM)

3. Quality Assurance

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0

2

4

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Preclinical Clinical Phase I Phase II Launched NotApplicable

PMI-001, Rheumatoid Arthritis, Phytomedics (Originator)

•PHY-X, Hemorrhagic Stroke, PhytoCeutica (Originator) •PLT-732, Lipoprotein Disorders, Gene Smarth Health (Originator)•QR-440, QR-443, QR-449, Antiarthritic Drugs, Type 2 Diabetes, Quigley Pharma (Originator)

•Veregen , Sinecatechins, Treatment for Genital Warts and Inflammatory etc., Polyphenon Pharma (Originator)•NIX-0699, Multi-herbals, Sickle Cell Anemia, National Inst. Pharm. Res. and Develop. (Originator) •THC-CBD, Cannabinoids Herbals, Inflammatory Bowel Disease etc., Bayer GW Pharmaceuticals (Originator)•Piceid Polydatin Resveratrol-O3'-glucoside, Antiinfectives, Shanghai Amadis Bio-Technology etc.•HMPL-002, Radiosensitizers, Hutchison China MediTech (Originator)

The Botanical Drug / TCM in Drug Discovery

Search from http://integrity.prous.com

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Natural Products in Roche

Globally, Roche screening library (synthetic compounds) has passed the "magic" line of 1 million compounds in October, 2007!

Locally in Chugai, Natural Products screening library (extracts and isolated compounds) has passed the line of 100K samples in September, 2007

Actinomycetes

33,778

Fungi

60,900

PurifiedCompound

4,767Myxobacteria

88

99,533 samples as of Sept. 2008

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Exploration of TCM with Modern Science and Technology

Traditional Usage

Current Research

Drug Discovery

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TCM at RRDCC

Natural product base drug discovery -- Compound from natural product -- Assay compound bio-activity -- Hit generation and validated -- Lead identification and optimization -- Clinical Candidates Selection

Folk Medicine -- TCM base drug discovery project -- TCM effect on metabolic disease, such as Type 2 diabetes, hyperlipidemia etc. (Collaboration research with Ruijin Hospital) -- TCM for liver health, (Collaboration research with Shanghai University of Traditional Chinese Medicine) -- Evaluation of other programs on TCM research

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Topics:

1. The R&D Innovation Model

2. Botanical Drug / Traditional Chinese Medicine (TCM)

3. Quality Assurance

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What is the Quality Assurance?

Represents the sum total of the organized

arrangements made with the objective of ensuring that all

products are of the quality required for their intended

use

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Focus Areas

Desired outcome

What is the scope of QA?

Raw/PackingMaterial

Management

Good supplier

management to

achieve the quality raw

material

GMP Compliance

Establish GMP

awareness in the

organization

Qualification Validation

Management

Facilitate and organize

the Q/V activities in

Tech Division

Finished Goods

Management

Provide good

service to customer to add value to our product

Cold chain distribution managemen

t

To manage cold chain

distributors to ensure

good product quality.

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What is the global Roche standard of QA?Quality Policy of Roche Pharmaceuticals division

An effective and comprehensive Quality Assurance must be

designed to avoid faulty products and services thus ensuring

the effective protection of our customers and at the same

time protecting our company and its employees

from economic damage or legal consequences.

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Acknowledgement

• RRDCC TEAM

• Lee Babiss, Head of Pharma Research

• Li Chen, Chief Scientific Officer