Contents:

Chapter 1 Executive summary 4 Objective of the analysis 4 Our insight into the asthma/COPD market 4 Chapter 2 Market definition and forecasting assumptions 11 Indication sales split 15 Strategic scoping and focus 16 Data definitions, limitations and assumptions 16 Standard Units 16 Japanese Market Data 17 Regional launch dates for new products 17 Derivation of Sales Forecasts and Pricing Trends 17 Patent expiries 17 General event information 19 Forecast methodology 20 Report methodology 20 Chapter 3 Market overview 21 ICS/LABA combination class is and will remain largest class by value 22 Top-selling product in 2005 was Seretide/Advair ($4.7 billion) 23 Asthma remains most important indication in respiratory market 26 US represents 61% of respiratory market in seven major markets 28 Key events shape future of respiratory market 29 Chapter 4 Country market assessments 32 Global opportunities and threats 32 Change to generic entry is delayed by new HFA formulations 32 Asthma/COPD patient populations are stabilizing 35 Stronger generic competition in US compared to EU 36 Non-compliance implies costs for patient and healthcare system 37 Improved safety and dosing is key to success of new products 38 Monoclonal antibody market is one of the fastest growing classes 39 Summary 41 US: opportunities and threats 41 FDA focuses on mortality associated with LABA monotherapy 41 Medicare Part D insures more senior citizens 45 Medicare Modernization Act stimulates generic entry 46 Medicare may limit reimbursement for nebulizers 47 FDA accepts new endpoints in asthma drug trials 47 Summary 49 Japan: opportunities and threats 49 PMDA still not up to speed 49 Generic penetration is slowly on the rise 50 New pricing restrictions to be implemented 51 COPD remains underdiagnosed and undertreated 52 Summary 53 Europe: opportunities and threats 53 Impact of pricing controls lowered by lack of generics 53 Pulmonologists less common in Europe 56 Summary 57 Chapter 5 Forecast analysis 58 ICS/LABA combinations 58 Symbicort SMART indication may put AstraZeneca ahead 59 Success of anticipated Symbicort US launch will depend on price 66 TORCH study backs Advair/Seretide for COPD 70 Super Advair: generic defense or genuine progress? 71 Seretide is expected to generate $600 million in Japan 77 Symbicort and Advair profits will soon be threatened by several novel ICS/LABA combinations 78 Success of Altanas ciclesonide/formoterol depends on US approval of highest dose 79 Novartis and SkyePharma combinations compete on price 82 Price is key to success for Chiesis combination 84 Anticholinergics 86 Spiriva expected to generate $1.9 billion in 2015 86 UPLIFT Trial may contribute to Spirivas success 89 Atrovent sales continue to decline 90 SABA/SAMA combinations sales remain stable 91 Anticholinergic pipeline drugs battle for second-to-market position 91 Biologicals 95 Xolair is expected to generate peak sales of $1.1 billion 96 Generic threat to Xolair is minimal 100 Pipeline products 102 Oral anti-inflammatories 103 Singulair to remain dominant in the oral US asthma market until patent expiry 104 Zileuton Controlled Release may achieve US peak sales of $228 million 106 Other pipeline drugs are unconvincing 109 Beta2-agonists 113 LABA sales will decline in near future 113 First once-daily LABA product expected to be launched in 2009 113 Generic CFC SABA market will convert into branded HFA SABA market 121 Xopenex is forecast to be best-selling SABA in 2015 123 Inhaled corticosteroids 126 Respules give boost to Pulmicort 127 Asmanex will have limited time before patent expiry 128 Approval of highest dose is key to Alvescos success in US 129 Chapter 6 Bibliography 135 Bibliography 135 Presentations 143 Press releases 143 Websites 144 APPENDIX - MARKET FORECAST DATA 145 Seven major markets 145 Five major European markets 148 US 151 Japan 153 France 155 Germany 157 Italy 159 Spain 161 UK 163 List of Tables Table 1: Generic erosion in the seven major markets (%) over three years 18 Table 2: Generic price discounts in the seven major markets (%) 19 Table 3: Sales of major brands 2005-2015 25 Table 4: Sales in seven major markets by indication, by class, 2005 26 Table 5: US approved HFA-MDIs, 2006 34 Table 6: Monoclonal antibodies in clinical development for asthma, 2006 40 Table 7: Number of chest physicians per 100,000 population in 5EU 56 Table 8: Symbicort, Seretide and Super Advair sales, 5EU, 2005-15 66 Table 9: Symbicort, Seretide and Super Advair sales, US, 2005-15 68 Table 10: Seretide, Super Advair and generics sales, 5EU, 2005-2015 74 Table 11: Seretide, Super Advair and generics sales, US, 2005-2015 76 Table 12: Ratio of Flixotide sales in 2000 to Seretide sales in 2004 77 Table 13: ICS/LABA combination sales in the seven major markets, 2005-2015 81 Table 14: Market share of ICS/LABA class of Chiesis beclometasone/formoterol in 5EU 85 Table 15: Xolair sales, US, 2003-2006 96 Table 16: Antileukotriene sales in the seven major markets, 2005-2015 103 Table 17: Pool of LABA candidates in Phase II trials 114 Table 18: Sales of short-acting beta2-agonists in the seven major markets, 2005-2015 124 Table 19: Inhaled corticosteroids sales in the seven major markets, 2005-2015 127 Table 20: Forecast sales, seven major markets, 2005-2015 ($m 2005 figures are actuals) 145 Table 21: Forecast sales, five major European markets, 2005-2015 ($m 2005 figures are actuals) 148 Table 22: Forecast sales, US, 2005-2015 ($m 2005 figures are actuals) 151 Table 23: Forecast sales, Japan, 2005-2015 ($m 2005 figures are actuals) 153 Table 24: Forecast sales, France, 2005-2015 ($m 2005 figures are actuals) 155 Table 25: Forecast sales, Germany, 2005-2015 ($m 2005 figures are actuals) 157 Table 26: Forecast sales, Italy, 2005-2015 ($m 2005 figures are actuals) 159 Table 27: Forecast sales, Spain, 2005-2015 ($m 2005 figures are actuals) 161 Table 28: Forecast sales, UK, 2005-2015 ($m: 2005 figures are actuals) List of Figures Figure 1: Classification of asthma disease severity 11 Figure 2: Classification of COPD disease severity 13 Figure 3: Asthma/COPD growth in the seven major markets, 2002-2005 21 Figure 4: Asthma/COPD market by class and value, 2005 22 Figure 5: Top three fastest-growing classes in the asthma/COPD market, 2002-2005 23 Figure 6: Top five brands by sales in seven major markets ($billion), 2005 24 Figure 7: Anticholinergics are popular in the treatment of COPD ($millions, 2005) 27 Figure 8: Geographical sales split of the respiratory market, 2005-2015 28 Figure 9: Outlook for the asthma and COPD market past 2006 30 Figure 10: Generic prices and erosion in the seven major markets 36 Figure 11: Global opportunities and threats for asthma/COPD market, 2006 41 Figure 12: Black box warning on Serevent Diskus package insert and Warnings section of the package insert 43 Figure 13: Opportunities and threats in the US asthma/COPD market, 2006 49 Figure 14: Opportunities and threats in the Japanese asthma/COPD market, 2006 53 Figure 15: Pricing controls in Europe 55 Figure 16: Opportunities and threats in the European asthma/COPD market, 2006 57 Figure 17: Symbicort adjustable maintenance dosing (AMD) regime 59 Figure 18: Adjustable maintenance dosing versus stable dosing regimes 60 Figure 19: Symbicort SMART dosing regime 61 Figure 20: Exacerbations should be treated sooner than current practice 65 Figure 21: Symbicort, Seretide and Super Advair sales, 5EU, 2005-2015 66 Figure 22: Symbicort, Seretide and Super Advair sales, US, 2005-2015 69 Figure 23: Potential dream ticket: ciclesonide/QAB-149 combination 79 Figure 24: ICS/LABA combination sales in the seven major markets, 2005-2015 81 Figure 25: The battle to be second to the once-daily LAMA market is between Almirall, Novartis and GSK 92 Figure 26: Patient potential breakdown for Xolair in the US 98 Figure 27: Patient potential breakdown for Xolair in Europe 100 Figure 28: Singulair and generic montelukast sales in the seven major markets, 2005-2015 105 Figure 29: Patient potential breakdown for Zileuton CR in the US 108 Figure 30: Results from roflumilast RECORD and RATIO studies 111 Figure 31: Adjusted mean time-standardized FEV1 AUC obtained on Days 1 and 8 of treatment with tiotropium (open-label extension period) compared with data for the same patients from Days 1 and 7 of double-blind treatment 116 Figure 32: Patient potential breakdown for arformoterol in the US 120 Figure 33: The (levo)salbutamol market according to type of delivery device 122 Figure 34: The volume and sales values of the (levo)salbutamol market according to type of delivery device 123 Figure 35: Xopenex sales, US, 2005-2015 125 Figure 36: Asmanex and generic mometasone sales in the seven major markets, 2005-2015 129 Figure 37: Advantages and disadvantages of Altanas Alvesco 131 Figure 38: Alvesco and generic ciclesonide sales in the seven major markets, 2005-2015 134