Contents:

Executive Summary 3 Strategic Considerations 3 Stakeholder Implications 3 2006 in Review 4 2006’s Winning Technology 4 Worldwide Sales and Blockbusters 4 2006 MAb Approvals 8 Big Pharma’s Frenzied Acquisition of MAb Companies 8 Disaster Strikes Tysabri 9 Sarah W Fuller, Andrea S Witt, Ph D , Decision Resources The Silver Lining 11 Generics’ Bloody Battlefield 11 Authorized Generics 12 At-Risk Launch of Generics 15 Paul King, M S , J D , Member of the District of Columbia Bar, KING PLLC, Capitol Hill World’s Largest Generics Company 16 Paul King, M S , J D , Member of the District of Columbia Bar, KING PLLC, Capitol Hill Consolidation Woes 17 Serial Consolidation in Big Pharma 17 Barrie G James, Ph D , Pharma Strategy Consulting European Midsize Pharma—End of the Beginning or Beginning of the End? 19 Barrie G James, Ph D , Pharma Strategy Consulting Generics Companies—Bulking Up in 2006 20 Pfizer Burns 22 Four Major Announcements in Five Days 24 Radical Changes at Pfizer—R&D Emphasis Still Out of Touch with Reality 25 John Ansell, M A , John Ansell Consultancy Two Years of Frustrating Productivity 25 Problems of Size 26 Nose-Diving Productivity 26 Rise and Fall of Combination Products 26 2006’s Major Battle for Dominance in Stent Markets 27 2006 Crisis—Thrombosis Linked to Drug-Eluting Stents 30 Outlook 31 Appendix 32 Figures 1. MAbs: From Mouse to Human 5 2. $13 Billion Monoclonal Antibody Sales, First 3 Quarters of 2006 6 3. Tysabri 2004-2006 Timeline 9 4. Dollar Value of Branded Drugs Going Off-Patent, 1995-2010 12 5. Receipts of Original Abbreviated New Drug Applications (ANDAs), 2001-2006 13 6. Top 1984 Pharmaceutical Companies Compared with Top 2004 Generics Companies 16 7. Serial Consolidation in the Pharmaceutical Industry 18 8. Market Capitalization of Select Companies, December 8, 2006 24 9. Drug-Eluting Stents 28 10. Worldwide Sales Comparisons: Boston Scientific’s Taxus Stent vs. Cordis/ Johnson & Johnson’s Cypher Stent 29 Tables 1. Prices of Select Cancer Therapies in the United States, 2001-2005 7 2. Branded Drugs Authorized as Generics in 2006 13 3. Generics Companies Bulk Up, 2006 21 4. Select Pfizer Deals, January to November 2006 23

Companies Mentioned

Abbott Laboratories Abgenix Abmaxis Abrika Pharmaceuticals Actavis Akzo Nobel Allen Allergan Alnylam Pharmaceuticals Altana Amgen Apotex Astex Therapeutics AstraZeneca Banyu Pharmaceuticals Barr Pharmaceuticals Baxter Bayer Be-Tabs Pharmaceuticals Betapharm Biogen Idec Biomarin Pharmaceutical Boston Scientific Bristol-Myers Squibb Cambridge Antibody Technology Conor Medsystems Dr. Reddy’s Laboratories Elan Ethimed Genentech Greenstone Guidant Hospira ImClone Ivax John Ansell Consultancy Johnson & Johnson King PLLC Lehman Brothers Mayne Pharmaceuticals Merck Merck KGaA Merck-Serono Biopharmaceuticals Millennium Research Group Monogram Biosciences Mundogen Neurocrine Biosciences NicOx Novartis Ophthalmics Noxxon Pharma Nycomed Odyssey Thera OrthovitaOscient Pharmaceuticals OSG Norwich Par Pfizer Pfizer Consumer Healthcare Pharma Strategy Consulting Pliva PowderMed Procter & Gamble Quark Biotech Ranbaxy Laboratories Rinat Neuroscience Roche Sandoz Sanofi -Aventis Savient Schering-Plough Schwarz Pharma Sekhsaria Chemicals Shionogi Spectrum Tanabe TeGenero Tepnel Terapia Teva Pharmaceuticals Tianjin Hualida Biotechnology TransTech Pharma Uso Racional Watson Pharmaceuticals