Contents:

Chapter 1. Executive summary 3 Key findings 3 Introduction to the PharmaVitae Company Universe 5 Summary of analysis 9 PharmaVitae universe overview 11 Big Pharma overview 12 Mid Pharma overview 14 Biotech overview 16 Japan Pharma overview 18 The PharmaVitae universe will grow at a very modest 2005–11 CAGR of 4.9% 20 Indication broadening in oncology and AIID provides a major opportunity for driving growth and biologics are currently insulated against generic competition 21 Japan, Big and Mid Pharma are all entrenched in slow-growing disease markets 26 Biotech is the most biologics-focused peer set although Big Pharma player Roche has accessed this valuable product set via the acquisition of Genentech 28 Indication broadening boosts sales growth from core marketed products whereas generic competition drives down sales of expired products 30 The financial benefit of Big Pharma scale – increased operating profit margins 32 Strategic options for Big Pharma and consequences for the other peer sets 33 (1) Achieve operating cost efficiencies 34 (2) M&A with another Big Pharma – more mega-mergers? 35 (3) M&A with biotech – access oncology/AIID biologics 35 (4) M&A with Mid Pharma – access promising CNS products 36 (5) M&A with generics companies 36 (6) M&A outside of pharma space 36 Consequences for other peer sets 36 The rest of this report 37 Chapter 2. Big pharma 52 Key findings 52 Big Pharma members 54 Big Pharma members 54 Big Pharma overview 55 Big Pharma sales outlook 56 Company sales performance, 2005–11 58 Big Pharma sales performance, 2005–11 60 Company growth rates, 2005–11 61 Company change in annual sales, 2005–11 62 Big Pharma launch/expiry analysis 64 Company contributions from launches and expiries, 2005–11 70 Company growth rates from launches and expiries, 2005–11 72 Big Pharma contribution from launches and expiries, 2005–11 76 Big Pharma therapeutic area analysis 78 Company by therapeutic area sales, 2005 81 Company by therapeutic area sales, 2005 82 Company by therapeutic area sales, 2011 83 Big Pharma dependency on top three therapy areas, 2005 87 Big Pharma dependency on top three therapy areas, 2011 90 Big Pharma dependency on top five, 10 and 20 products, 2005 92 Big Pharma dependency on top five, 10 and 20 products, 2011 94 Big Pharma molecule type analysis 96 Big Pharma molecule type launch/core/expiry analysis 97 Company by biologics dependency, 2005 99 Company by biologics dependency, 2011 100 Big Pharma growth rate by molecule type 102 Big Pharma financial performance analysis 104 Company total revenues vs. ethical revenues 104 Company total revenues, 2002–06e 105 Company R&D operating expense ratio analysis, 2002–06e 107 Company COGS operating expense ratio analysis, 2002–06e 109 Company S,G&A operating expense ratio analysis, 2002–06e 110 Company EBIT margin analysis, 2002–06e 112 Chapter 3. Mid pharma 115 Key findings 115 Mid Pharma overview 117 Mid Pharma members 117 Mid Pharma overview 118 Mid Pharma sales outlook 120 Company sales performance, 2005–11 120 Mid Pharma sales performance, 2005–11 121 Company growth rates, 2005–11 122 Company change in annual sales, 2005–11 123 Mid Pharma launch/expiry analysis 124 Company contributions from launches and expiries, 2005–11 124 Company growth rates from launches and expiries, 2005–11 127 Mid Pharma contribution from launches and expiries, 2005–11 130 Mid Pharma therapeutic area analysis 131 Company by therapeutic area sales, 2005 131 Company by therapeutic area sales, 2011 133 Mid Pharma molecule type analysis 134 Company by biologics dependency, 2005 134 Company by biologics dependency, 2011 135 Mid Pharma financial performance analysis 136 Company total revenues vs. ethical revenues 136 Company total revenues, 2002–06e 138 Company R&D operating expense ratio analysis, 2002–06e 139 Company COGS operating expense ratio analysis, 2002–06e 141 Company S,G&A operating expense ratio analysis, 2002–06e 142 Company EBIT margin analysis, 2002–06e 143 Chapter 4. Biotech 146 Key findings 146 Biotech overview 148 Biotech members 148 Biotech overview 149 Biotech sales outlook 150 Company sales performance, 2005–11 150 Biotech sales performance, 2005–11 151 Company growth rates, 2005–11 152 Company change in annual sales, 2005–11 154 Biotech launch/expiry analysis 156 Company contributions from launches and expiries, 2005–11 156 Company growth rates from launches and expiries, 2005–11 158 Biotech contribution from launches and expiries, 2005–11 161 Biotech therapeutic area analysis 162 Company by therapeutic area sales, 2005 162 Company by therapeutic area sales, 2011 163 Biotech molecule type analysis 164 Company by biologics dependency, 2005 164 Company by biologics dependency, 2011 165 Biotech financial performance analysis 166 Company total revenues vs. ethical revenues 166 Company total revenues, 2002–06e 167 Company operating expense ratio analysis, 2002–06e 168 EBIT margin analysis, 2002–06e 170 Chapter 5. Japan pharma 171 Key findings 171 Japan Pharma overview 172 Japan Pharma members 172 Japan Pharma overview 173 Japan Pharma sales outlook 174 Company sales performance, 2005–11 174 Japan Pharma sales performance, 2005–11 175 Company growth rates, 2005–11 176 Company change in annual sales, 2005–11 177 Japan Pharma launch/expiry analysis 178 Company contributions from launches and expiries, 2005–11 178 Company growth rates from launches and expiries, 2005–11 179 Japan Pharma contribution from launches and expiries, 2005–11 182 Japan Pharma therapeutic area analysis 183 Company by therapeutic area sales, 2005 183 Company by therapeutic area sales, 2011 184 Japan Pharma molecule type analysis 185 Company by biologics dependency, 2005 185 Company by biologics dependency, 2011 186 Japan Pharma financial performance analysis 187 Company total revenues vs. ethical revenues 187 Company total revenues, 2002–06e 188 Company operating expense ratio analysis, 2002–06e 189 EBIT margin analysis, 2002–06e 191 Chapter 6. Appendix 192 References 192 Exchange rates List of Tables Table 1: Big Pharma members 6 Table 2: Mid Pharma members 7 Table 3: Biotech members 7 Table 4: Japan Pharma members 8 Table 5: Therapy area abbreviations (used throughout report) 8 Table 6: Summary of analysis 9 Table 7: Big Pharma members 54 Table 8: Big Pharma ethical sales forecasts ($m), 2005–11 56 Table 9: Company contributions from launches and expiries, 2005–11 70 Table 10: Company growth rates from launches and expiries, 2005–11 72 Table 11: Big Pharma therapy area sales, 2005–11 79 Table 12: Big Pharma therapy area launch/core/expiry analysis, 2005–11 80 Table 13: Big Pharma dependency on top three therapy areas, 2005 89 Table 14: Big Pharma dependency on top three therapy areas, 2011 91 Table 15: Big Pharma top five products, 2005 93 Table 16: Big Pharma top five products, 2011 95 Table 17: Company contributions from launches and expiries, 2005–11 96 Table 18: Big Pharma therapy area launch/core/expiry analysis, 2005–11 97 Table 19: Mid Pharma members 117 Table 20: Company contributions from launches and expiries ($m), 2005–11 125 Table 21: Company growth rates from launches and expiries, 2005–11 127 Table 22: Biotech members 148 Table 23: Company contributions from launches and expiries ($m), 2005–11 156 Table 24: Company growth rates from launches and expiries, 2005–11 158 Table 25: Japan Pharma members 172 Table 26: Company contributions from launches and expiries ($m), 2005–11 178 Table 27: Company growth rates from launches and expiries, 2005–11 180 Table 28: Exchange rates, 2005 List of Figures Figure 1: PharmaVitae universe overview, share of 2005 and 2011 sales (%) 11 Figure 2: Big Pharma overview, share of 2005 and 2011 sales (%) 12 Figure 3: Mid Pharma overview, share of 2005 and 2011 sales (%) 14 Figure 4: Biotech overview, share of 2005 and 2011 sales (%) 16 Figure 5: Japan Pharma overview, share of 2005 and 2011 sales (%) 18 Figure 6: PharmaVitae universe sales ($m), 2005–11 20 Figure 7: Therapy area x product attractiveness landscape 21 Figure 8: Therapy area x product landscape: PFE, ROG and DNA 24 Figure 9: Peer set therapeutic area focus, 2005 26 Figure 10: Peer set therapy area growth rates (% CAGR), 2005–11 28 Figure 11: Peer set launch/core/expiry analysis, total growth rate over the six years between 2005–11 (%) 30 Figure 12: Peer set EBIT/total revenues, 2006e 32 Figure 13: Strategic options for Big Pharma 33 Figure 14: Big Pharma overview, share of 2005 and 2011 sales (%) 55 Figure 15: Company sales performance ($m), 2005–11 58 Figure 16: Big Pharma sales performance, 2005–11 60 Figure 17: Company growth rates (% CAGR), 2005–11 61 Figure 18: Company change in annual sales ($m), 2005–11 62 Figure 19: GlaxoSmithKline’s launch portfolio, sales ($m), 2005–11 65 Figure 20: GlaxoSmithKline’s expiry portfolio, sales ($m), 2005–11 66 Figure 21: GlaxoSmithKline’s core portfolio, sales ($m), 2005–11 67 Figure 22: GlaxoSmithKline launch/core/expiry analysis, absolute growth ($m), 2005–11 69 Figure 23: Company growth rates from launches and expiries, 2005–11 73 Figure 24: Big Pharma contribution from launches and expiries ($m), 2005–11 76 Figure 25: Company by therapeutic area sales, 2005 81 Figure 26: Company by therapeutic area sales, 2005 82 Figure 27: Company by therapy area sales, 2011 83 Figure 28: Big Pharma therapy area focus vs. growth rate 85 Figure 29: Big Pharma dependency on top three therapy areas (% of total ethical sales), 2005 88 Figure 30: Big Pharma dependency on top three therapy areas (% of total ethical sales), 2011 90 Figure 31: Big Pharma dependency on top five, 10 and 20 products(% of total ethical sales), 2005 92 Figure 32: Big Pharma dependency on top five, 10 and 20 products (% of total ethical sales), 2011 94 Figure 33: Big Pharma launch/core/expiry by product type (% 2005 sales), 2005–11 98 Figure 34: Company by biologics dependency (% total ethical sales), 2005 100 Figure 35: Company by biologics dependency (% total ethical sales), 2011 101 Figure 36: Big Pharma growth rate by molecule type (% CAGR), 2005–11 102 Figure 37: Company total revenues vs. ethical revenues ($m), 2005 104 Figure 38: Company total revenues ($m), 2002–06e 106 Figure 39: Company R&D operating expense ratio analysis (% total revenues), 2002–06e 108 Figure 40: Company COGS operating expense ratio analysis (% total revenues), 2002–06e 109 Figure 41: Company S,G&A operating expense ratio analysis (% total revenues), 2002–06e 111 Figure 42: Company EBIT margin analysis, 2002–06e 112 Figure 43: Big Pharma EBIT vs. total revenues ($m), 2006e 114 Figure 44: Mid Pharma overview, share of 2005 and 2011 sales (%) 119 Figure 45: Company sales performance ($m), 2005–11 120 Figure 46: Mid Pharma sales performance ($m), 2005–11 121 Figure 47: Company growth rates (% CAGR), 2005–11 122 Figure 48: Company change in annual sales ($m), 2005–11 124 Figure 49: Company growth rates from launches and expiries, 2005–11 128 Figure 50: Mid Pharma contribution from launches and expiries ($m), 2005–11 130 Figure 51: Company by therapeutic area sales, 2005 132 Figure 52: Company by therapeutic area sales, 2011 133 Figure 53: Company by biologics dependency (% total ethical sales), 2005 134 Figure 54: Company by biologics dependency (% total ethical sales), 2011 135 Figure 55: Company total revenues vs. ethical revenues ($m) 137 Figure 56: Company total revenues ($m), 2002–06e 138 Figure 57: Company R&D operating expense ratio analysis (% total revenues), 2002–06e 139 Figure 58: Company COGS operating expense ratio analysis (% total revenues), 2002–06e 141 Figure 59: Company S,G&A operating expense ratio analysis (% total revenues), 2002–06e 142 Figure 60: Company EBIT margin analysis, 2002–06e 144 Figure 61: Mid Pharma EBIT vs. total revenues ($m), 2006e 145 Figure 62: Biotech overview, share of 2005 and 2011 sales (%) 149 Figure 63: Company sales performance ($m), 2005–11 150 Figure 64: Biotech sales performance ($m), 2005–11 151 Figure 65: Company growth rates (CAGR %), 2005–11 153 Figure 66: Company change in annual sales ($m), 2005–11 155 Figure 67: Company growth rates from launches and expiries, 2005–11 159 Figure 68: Biotech contribution from launches and expiries ($m), 2005–11 161 Figure 69: Company by therapeutic area sales, 2005 162 Figure 70: Company by therapeutic area sales, 2011 163 Figure 71: Company by biologics dependency (% total ethical sales), 2005 164 Figure 72: Company by biologics dependency (% total ethical sales), 2011 165 Figure 73: Company total revenues vs. ethical revenues ($m) 166 Figure 74: Company total revenues ($m), 2002–06e 167 Figure 75: Company operating cost analysis (% total revenues), 2002–06e 169 Figure 76: Company EBIT/total revenues, 2002–06e 170 Figure 77: Japan Pharma overview, share of 2005 and 2011 sales (%) 173 Figure 78: Company sales performance ($m), 2005–11 174 Figure 79: Japan Pharma sales performance ($m), 2005–11 175 Figure 80: Company growth rates (% CAGR), 2005–11 176 Figure 81: Company change in annual sales ($m), 2005–11 177 Figure 82: Company growth rates from launches and expiries, 2005–11 181 Figure 83: Japan Pharma contribution from launches and expiries ($m), 2005–11 182 Figure 84: Company by therapeutic area sales, 2005 183 Figure 85: Company by therapeutic area sales, 2011 184 Figure 86: Company by biologics dependency (% total ethical sales), 2005 185 Figure 87: Company by biologics dependency (% total ethical sales), 2011 186 Figure 88: Company total revenues vs. ethical revenues ($m) 187 Figure 89: Company total revenues ($m), 2002–06e 188 Figure 90: Company operating cost analysis (% total revenues), 2002–06e 190 Figure 91: Company EBIT vs. total revenues, 2002–06e 191