Cina e Ricerca Roma 16 Marzo 2005

1
Bracco-Sine Growth Strategy
Cina e Ricerca Roma 16 Marzo 2005
2
China is not one China.
3
High Tech and Intensive labor
4
China Pharmaceutical Scenario

• 1.3 billion people 65000 Hospitals
• 7th world largest Pharmaceutical market, expected
  to become top 3 within 10 years
• Now 10 billion USD both Western and Chinese
  medicine (Italy 12 US Billon)
• World fastest growth 11-12 per year
• Drug consumption below 2 of GDP
• Medical insurance 25 of population
• Among top 2 for Imaging Equipment could become
  N.1
• Still small for Contrast media (1,5 of World)
• with a forecasted growth of over 20 expected
  for the next 5 years

5
Bracco presence in China step by step

• 1988 Importation of product through Hong Kong
• Iopamidol on the Market
• Establishment of Bracco representative office
  in Beijng
• Regulatory and clinical development
• 2001 Direct Bracco promotion
• 33 promotion and marketing staff
• 3 representative offices
• 2002 Establishment of Bracco-Sine joint-venture
• Fully integrated J-V (sales, marketing,
  production)
• Complete imaging product portfolio
• Export to Hong Kong and Macau

6

• Joint-venture partner Sine Pharmaceutical Co.
  Ltd.
• The joint-venture agreement was signed on June
  26th, 2001
• Based in Shangai, the leading industrial and
  commercial center of China
• 2002 start of construction of plant and building
  up of promotion and marketing infrastructure
• General Manager appointed 1st January 2003
• Production capacity 1,5 million vials initially
• Number of employees 70

7
Bracco-Sine HQ
8
Solution Preparation System
9
Filling and Capping Line
10
Research and development

• In parallel to the manufacturing JV, Bracco has
  established in Bejing its own unit for clinical
  development and regulatory affairs
• Chinese personnel highly professional,
  motivated and willing to learn.
• - Qualified Pharma workers are now in high
  demand causing a tight labor market situation.
  Language sometimes still a problem.

11
RD Regulatory affairs

• Experience in Regulatory domain
• Rapid implementation of Good Laboratory-, Good
  Manufacturing-, Good Clinical-Practices
• Harmonization with Western regulations
• - Frequent changes of regulations and laws
• moving target situation
• - Some subjectivity in interpretation of
  rules
• Importance of direct local experience and
  of personal relationships
• Overall fast decisions approvals

12
RD preclinical and clinical

• Skilled clinical investigators and good
  compliance with GCP regulations (in the main
  institutions) allow Bracco running in China
  clinical trials which qualify also for Europe and
  America.
• Best Chinese students, researchers get training
  at best Western institutions and usually come
  back to China bringing their international
  experience.
• Some excellent Chinese researchers at Bracco
  Research Centers in Geneva and Princeton

13
RD Intellectual Property

• Intellectual property rights are now recognised
  by a legislation similar to the one prevailing in
  Europe.
• Bracco is routinely filing its patent
  applications in China through PCT route.
• Patents are examined for novelty and
  inventiveness (examiners trained at Eur. Pat
  .Office)

14
RD scientific educational programs

• Our Contrast-enhanced ultrasonography program
• Educate Medical Community about the new concept
  of Contrast Enhanced Ultrasonography
• Widely disseminate the clinical benefit of
  Ultrasound Contrast Agents through Medical
  Communication
• Establish privileged priority channels with local
  Scientific Societies and Groups
• Establish Chinese Contrast Enhanced Ultrasound
  guidelines in harmonization with corresponding
  European guidelines
• Open the China world helping Chinese doctors in
  receiving international scientific value
  recognition

15
RD future

• Some major multinational pharma Companies have
  started Chinese RD operations in cooperation
  with local Universities or Research Institutions.
• Bracco is at present considering both the
  possible development of Chinese products for
  Europe and the establishment of a preclinical
  research unit in China.

16
In summary

• China is one of the most important Countries in
  Braccos growth strategy
• The China Contrast Media usage will outperform
  rest of the world
• China has a unique situation for Ultrasound
  medical practice
• Bracco-Sine is well positioned for growth in
  terms of
• Product Portfolio and active JV local Presence
• Bracco Imaging has a Chinese RD unit (clinical
  development and regulatory affairs) which is
  synergistic with JV activities
• Bracco has full confidence in Chinese progress
  and will continue to strengthen its presence to
  achieve its goals
• To be ranked as a leading player
• To build the most competent sales and training
  force
• To be the most admired Contrast Media company in
  China
• To be the leading developer in Contrast-enhanced
  Ultrasound

17
Forward vision and endurance