Contents:

Chapter 1 The corporate landscape: the winners and losers in 2005 and beyond Prescription sales growth 9 Prescription sales growth, 2004–05 9 Forecast prescription sales growth, 2005–06 12 The best and worst performers, 2004–06 14 As the market sees it: the winners and losers in 2005 by share price 16 Winner: Genentech tops the list 17 Winner: 2005 signals a turn around in Schwarz Pharma’s fortunes 17 Winner: AstraZeneca’s strong sales growth and new partnerships drive investor confidence 18 Loser: Pfizer hit by poor results 18 Mergers and acquisitions 19 2005 19 2006 26 Generics mergers and acquisitions – consolidation will be necessary to maintain growth 28 Licensing 30 2005 – revenue generated by top companies from in-licensed products surpasses $100 billion for the first time 30 2006 – companies are expected to increasingly focus on licensing 32 Chapter 2 Products: the big stories of 2005 and beyond Introduction 36 Key products driving industry growth 37 Top-selling products, 2005 37 Biggest dollar sales growth, 2004-2005 43 Biggest percentage sales growth, 2004-2005 46 Major new launches 49 The key restraint on pharmaceutical market growth in 2006 will be generic competition 59 A favorable environment for generics, but pressures mean the landscape is changing 59 Significant patent expiries in 2005 have led to steep growth in generic competition 60 2006 – over $20 billion of sales at-risk for generic competition 61 Major patent challenges dominated the headlines in 2005 64 Pharmacovigilance will play an increasingly important role – post-Vioxx, safety is everything 68 2005 – significant new pharmacovigilance regulations introduced in the EU 69 2006 and beyond – major changes in the US expected 70 Pharmacogenomics comes under the spotlight 71 Disclosure of clinical trial results could become mandatory 72 Product withdrawals due to safety continued in 2005 72 Safety warnings abound in a period of intense scrutiny 74 Several drugs failed in the final stages of approval in 2005 75 Pipeline setbacks also hit the headlines in 2005 79 Pharmaceutical marketing practices under the spotlight 80 DTC advertising blamed for the COX-II disaster – changes now afoot 81 Further reduction in sales forces expected 82 Medicare Part D reforms will provide a short term boost, but longer term the impact is less certain 83 Chapter 3 Appendix: supporting data Supporting Data 85 Financial data 87 Exchange rates List of Tables Table 1: The top 55 pharmaceutical companies’ ethical sales between 2004 and 2005, ranked by sales growth: mid-cap and small players were the fastest growing companies 9 Table 2: The top 55 pharmaceutical companies’ ethical sales between 2004 and 2005, ranked by sales growth 12 Table 3: Major healthcare-related merger and acquisition deals announced by the top 55 pharmaceutical companies worldwide during 2005 20 Table 4: Top 10 pharmaceutical companies with the highest licensing dependence in 2005: Forest Laboratories remains at the top 31 Table 5: Top 10 companies that are forecast to have the highest licensing dependence in 2006: Roche makes an appearance 33 Table 6: Top 20 pharmaceutical products worldwide, ranked by 2005 global sales 37 Table 7: Roche products dominate in the list of the products which have demonstrated the highest absolute growth between 2004 and 2005 Error! Bookmark not defined. Table 8: Newly launched products have shown the greatest percentage sales growth between 2004 and 2005 47 Table 9: Top 20 new product launches in 2005, ranked by their forecast sales in 2009 51 Table 10: Top 20 new product launches in 2006, ranked by their forecast sales in 2010 54 Table 11: Despite a higher number of new product launches, 2005 was disappointing in terms of potential commercial success 58 Table 12: 2004 was a much stronger year for blockbuster launches: six products launched in 2004 are forecast to surpass $1 billion in global sales within four years 58 Table 13: Share price performance of top publicly-listed pharmaceutical companies during 2005 85 Table 14: Exchange rates, 2004 List of Figures Figure 1: Fastest growing and slowest growing companies: Genentech is way ahead of the game 15 Figure 2: Share price performance in 2005: overall, a positive year 16 Figure 3: Growth from marketed products and new launches must offset negative factors to ensure continued market growth 36

Companies Mentioned

Genentech Schwarz Pharma AstraZeneca Pfizer