Actavis as a Generic Company

in Indonesia

Dr. Leiman SutantoOperations Director

PT Actavis Indonesia

30 November 2010

Why generics?

“If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half the price for the thing that’s going to make you well?” - Barack Obama -

A generic:US$34.34

* Source: the Generic Handbook 3rd edition published 2009

Average prescription retail prices in the US in 2007*

No sustainable healthcare reformwithout a robust generics industry

A brand name:US$119.51

Why not more Generics

Why is big pharmalooking into generics?

Growth in key markets steadily declining

New product pipelines disappointing

No sign that drug discovery is going to be

easier

Opportunities in emerging markets:

Brazil, Russia, India, China, Mexico, Turkey

and S-Korea

Recognising the economic trends that led to

increasing collaboration between big pharma

and generics

Consolidation & collaboration

Many originators moving into genericsin some forms:

• GSK• Aspen, Dr Reddy's

• Pfizer• Aurobindo, Claris

• Sanofi-Aventis • Winthrop, Zentiva, Medley, Kendrick

• Novartis – Sandoz• Several looking towards India

• Daiichi Sankyo- Ranbaxy

Generic players must master the game

Building capabilities on many fronts at the same time as maintaining their area of excellence

Complexity increasesProducts & Market reach

Healthcare reforms

Increasing competition Price erosion

Regulatory reforms

• Build scale

• Integrate and capture synergies

• Achieve levels of operational and supply excellence, beyond ever seen

• Investment in pipeline to fuel future growth:

• R&D • Regulatory & IP

• Dynamic approach to S&M• Innovation• Customised market approach

Current challenges Building excellence

Trend in Generic World

Two main factors of success for future winners:

1. Technical capabilities

2. Selling skills

Future winners execute their strategies

The industry will changeProduct complexity will drive

industry transformation

Global Top 20 Brands 2009

The industry will changeProduct complexity will drive

industry transformation

Global Top 20 Brands 2016

Biologics

37% 46% 13% 12%25% 23% 40% 72% 25% 8% 6% 12% 60% 25% 24% 38% 106% 19%

39% 36%

% CAGR 2005 - 2009

Technical Capabilities:R&D expenses benchmark

Company reports 09, Zentiva 08

In m

io €

*) estimated 100 mio Momenta R&D not shown here**) 2008 published figures

Who has the resources to execute?

Selling skillsfrom “essential similar” to “essential different”

Cytotoxics

Hormones

ß lactams

Devices

Formulation

Biologics

API

Steriles

Liquids

r&d complexity

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ufac

turi

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arri

erlo

whi

gh

low high

Actavis Manufacturing Sites

Cost competitive, quality, global manufacturing base

Capacity of 24 billion tablets & capsules

• 16 pharmaceutical manufacturing plants in 13 countries• Plus one manufacturing plant in Norway for plasters

and two API manufacturing sites in Chennai, India and Hangzhou, China

Compliance• All fulfill local regulatory

requirements • 14 plants EU and/or FDA compliant• One of two API facilities with FDA

compliance

Actavis in

INDONESIA

From acquisitions & expansion …..to having achieved a strong platform for growthto growth through pipeline, optimisation andefficiency

Actavis is evolving

A remarkablegrowth story

• Over 10,000 employees• Present in over 40 countries• Over EUR 1.7 billion in sales 2009• 850 products on the market• 333 projects in pipeline• 24 billion tablets/capsules capacity

• 146 employees• Present in 1 country• EUR 57 million in sales

Actavis in 1999 Actavis today

Development Status – end 1H 2009

Early Development

Full Development

Biostudy / Stability Registration

80 91 25 137

Total pipeline: 333 projects

EU US ROW TotalDevelopment projects 87 84 25 196Molecules 71 73 21 165Ongoing registrations 51 81 5 137

Source: IMS, Total Market, Ethical Only Q2 2010

Top 25 Manufacturers Ethical in MATQ2 2010

RANK MAT MANUF DESC'05 '06 '07 '08 '09 JUN '10 VALUE (MIDR) MARKET SHARE GROWTH (vs. MAT 06/2009)

ETHICAL MARKET 20,722,418 100.00 13.74

3 3 1 1 1 1 KALBE FARMA 1,596,592 7.70 13.791 1 2 2 2 2 SANBE 1,235,058 5.96 1.302 2 3 3 3 3 DEXA MEDICA 1,021,671 4.93 11.364 4 4 4 4 4 PFIZER 810,134 3.91 6.66

12 9 8 7 6 5 FAHRENHEIT 757,380 3.65 27.169 10 9 5 5 6 INTERBAT 722,861 3.49 8.846 6 6 6 7 7 SANOFI-AVENTIS 683,564 3.30 12.477 7 7 9 8 8 KIMIA FARMA 607,541 2.93 21.44

22 17 12 10 10 9 DANKOS 570,360 2.75 16.7314 20 15 14 12 10 HEXPHARM JAYA 537,611 2.59 34.8613 12 11 11 11 11 BAYER INDONESIA 515,694 2.49 15.325 5 5 8 9 12 INDOFARMA 490,245 2.37 0.75

17 15 13 15 15 13 NOVARTIS 474,565 2.29 34.8716 13 14 13 13 14 GLAXOSMITHKLINE PH 430,691 2.08 13.8910 11 10 12 14 15 OTSUKA 389,158 1.88 1.9518 14 16 16 16 16 ASTRAZENECA 354,027 1.71 11.3525 21 17 17 17 17 OTTO 343,816 1.66 8.7989 87 77 70 59 18 MERCK SHARP&DOHME 324,798 1.57 3.3311 22 20 18 19 19 FERRON PAR PHARM 322,501 1.56 8.1123 18 18 19 18 20 COMBIPHAR 320,328 1.55 5.3315 23 23 22 21 21 PHAROS INDONESIA 318,562 1.54 19.3920 19 21 21 20 22 ROCHE 312,080 1.51 14.5424 25 25 23 22 23 MERCK KGAA 295,367 1.43 14.8328 24 26 24 23 24 B.INGELHEIM 292,074 1.41 18.7926 28 27 25 24 25 SANDOZ 270,999 1.31 12.5038 34 35 33 30 26 ACTAVIS 269,596 1.30 38.95

MAT JUNE '10RANK AT MAT DEC

Actavis is well-positioned to capitalize on OGB growth while leveraging existing

strengths

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

2003

2004

2005

2006

2007

2008

2009

2010

Actavis Strong in Key Anti-Infectives TA*

11% 11%

18%

0%

20%

40%

60%

80%

100%

Mkt MATQ1 2009

Mkt MATQ1 2010

ACTAVISMAT Q12010

OTHERS (<4%)

M MUSCULO

V VARIOUS

D DERM

C CARDIO

R RESPI

N NERVOUS

J ANTI INFECT

A ALIMENTARY

Actavis Demonstrating Consistent MS

IMS MIDAS Data *Sales by ATC1

Mar

ket

Shar

e

% S

ales

Indonesia’s Healthcare Expenditure isset to grow over the coming Decades

Historically, ASEAN had lower health expenditure levels; Now with the growth of GDP, spending has began to increase

Source: IMF World Economic Outlook Databases, ASEAN statistics 2008

Market Summary

• The fragmented Indonesian healthcare system consists of a mixture of public and private healthcare providers, with most private facilities located in Jakarta and other urban areas

• High share of out-of-pocket spending for most healthcare provision and pharmaceutical purchases

• Significant market growth potential in line with increasing income and fast growing population

• Well established local industry

• Introduction of GMP standards

Industry Opportunities & Challenges

• Fast, double-digit growing generic market

• Demand for generic drugs to increase with the continuing expansion of the healthcare sector and rising cost awareness

• Government plans to increase the coverage of health insurance to 100% of the population will include more than 100 mio additional people to the health insurance

• Escalating API cost and taxation of imports

• Poor efficacy of counterfeit drugs leading to a distrust of pharmaceuticals

Market Dynamics

Regulation & Regional Business Environment

Business Environment Overview: Indonesia

USD mio

2009 2013 CAGR

Total Market 3,022 4,233 9%

Patented 1.128 1,463 6%

Generics 0.685 1,140 14%

OTC 1,125 1,693 8%Business Monitor Report Indonesia Q1/2010

• ASEAN had lower health expenditure level, however with the growth of GDP, spending has begun to increase

• AFTA & ACFTA in 2011

• One single ASEAN market in 2015

• SJSN will boost the growth of non-branded market to the additional coverage of >100 mio people

• 10/10 regulation makes local production of most products mandatory, resulting in high number of transfers

Healthcare Industriesneed

Government’s support

INDONESIA

Drug RegistrationSome Issues

• Limitation on new drug application (copy product) – only 1 product per week per Company, and only ca. 15 Cos/week

• First copy product, Company has to provide “self assessment on patent status” – no G2G link (BPOM – Patent office)

• No product list at BPOM for products require BA/BE study – needs consultation every time

• Long registration lead time – more than 2 years for NDA

• Also lead time for exported products – more than 1 year, require stability testing for CZ IV although exporting to CZ II

• BPOM needs additional HR to cover pending registration approval

Export / ImportSome Issues

• Pharmaceutical business has not got sufficient support from the attache of trade of Indonesian embassy in the targetted countries – focus only on big businesses/commodities

• They do not promote Indonesian Pharmaceutical Products –Companies have to promote their own products

• Improve the knowledge / networking of our businessman in the targeted countries – each country has their own regulations

Export / ImportOther Issues

• Simplification of permit application in order to shorten lead time in the government offices, such as BPOM, Ministry of Health, Custom Office, etc.

• Comply to the international quality standard

• Domestic market oriented and less export oriented in the globalization environment

• Professionalism of local players when dealing with foreign customers

• International business knowledge should be taught intensively starting at the university

Thank you!