Hospira 2007 Investor Day APAC Region Tim Oldham, Ph.D. President, Asia-Pacific Advancing Wellness through the right people and the right products
The APAC Region Asia in Brief: 58% of the world s population 29% of the world s GDP (including 2 of the top 5 economies) 20% of the world s pharmaceutical spend Direct sales Distributor presence No presence 1 Source: Espicom World Pharma Report 2007, WHO World Health Statistics 2007, USDA 2006
2006 APAC Pro Forma Sales* Devices Rest of Region Pharma Distributors Japan Australia / New Zealand Direct Sales 2 * Including Mayne Pharma
Healthcare Macro Environment Australia Japan China S. Korea India GDP Growth* 2.6% 6.2% 10.6% 8.7% 10.9% Healthcare Spend (U.S.$B) Healthcare Spend (% of GDP) Healthcare Spend (U.S.$ / capita) Government Funding (% of total healthcare spend) Healthcare Spend Growth* Population Aged >65 (% of total) $62 $370 $137 $50 $44 9.0% 7.9% 5.4% 5.6% 5.1% $3,000 $2,899 $104 $1,029 $40 67% 85% 40% 44% 20% 8.2% 6.2% 10.5% 8.7% 11.0% 13% 20% 8% 8.8% 4.9% * Forecast 3 Source: Espicom World Pharma Report 2007, WHO World Health Statistics 2007
APAC Strategies at a Glance Be Hospira s fastest-growing region Protect Australia / New Zealand base Specialty pharmaceuticals pipeline expansion Hospira MedNet and advanced infusion pumps pipeline Grow Japan: Roll out generic pharmaceuticals and medication management systems portfolios Enter major Asian economies carefully: China, South Korea 4
Pharmaceuticals Product Line 5
APAC Pharmaceuticals Market Characteristics Australia Japan Rest of Asia Total Pharma Market* (U.S.$B) $8.5 $66 $54 Injectable Pharma Market** (U.S.$B) Generic Penetration (% / volume, all forms) $1.4 $14.2 n/a 20% 16% n/a Market Drivers Price, differentiation, reliability Quality, safety info. capability Price for most segments; quality for a small niche Key Competitors Novartis Group Sanofi-Aventis BMS Pfizer Ebewe (Interpharma) Proprietary drug makers Nichi-iko Merck Seigaku (Mylan) Sawai Nippon Kayaku Taiyo Many local manufacturers Ebewe * Pharmacy prices ** Ex-manufacturer prices 6 Source: Espicom World Pharma Report 2007, IMS
Hospira s Strengths and Key Competitive Advantages Pharmaceuticals Australia / New Zealand Japan Rest of Asia Market Share #1 injectable generics New entrant Niche player Portfolio Breadth 85+ marketed molecules 12 marketed molecules 66 marketed molecules Product Differentiation 38 sole-supply molecules 22% sales from patent-protected / brands Novel presentations ONCO-TAIN 55% of sales from Precedex 1 proprietary product ONCO-TAIN 2 branded generics Safe-handling education Hospira Positioning The broadest, deepest and most innovative partnership with hospital pharmacy stretching back over 90 years Injectable generics from lead player in U.S. market. Safety information capability on par with proprietary drug makers The solution you turn to for quality, safety and ongoing support 7
APAC Pharmaceuticals Strategies Grow specialty pharmaceuticals Expand Australia / New Zealand portfolio of patent-protected and branded generics Leverage Asian presence for regional deals Roll out biogenerics Capitalize on and drive growth in Japanese generics Expand portfolio especially oncology Deepen / extend partner network Maximize first-to-market potential across region Utilize India manufacturing for early filing in Asia Establish low-cost local manufacturing partners in future Establish Hospira s unique packaging offering as a point of differentiation across region ADD-Vantage, prefilled syringes Integrated device / pharmaceutical offerings 8
Hospital Generic Injectable Manufacturers Australia Approximately AU$161 million for 2005 Arrow 5% Others 8% Alphapharm 10% Novartis 12% Hospira 65% 9 Source: IMS AHI MAT 12/06
Unique Australian Pharmaceuticals Model Optimized specialty sales Economic sell Clinical / attributebased sell Tendering / negotiation capability: Generics sales driven by state pharmaceuticals contracts Sales / marketing capability: Branded sales driven by physician prescriptions Hospira s dual sales channel model has contributed to our leading specialty pharmaceuticals market position 10
Growing Proprietary Sales Share Australia AU$MM $140 $120 $100 $80 $60 $40 $20 Proprietary / Brands include: Eligard Clopine Oxytrol Granocyte Kytril Apo-Go Ketalar Proprietary Generics $0 2003 2004 2005 2006 11 Source: IMS March 2007
Product Differentiation Examples Clopine (clozapine) First generic Novel 50 mg and 200 mg strengths ClopineConnect : Web-based monitoring and dedicated safety support team Eligard (leuprolide) Third generic First 6-month depot Small needle 12 Competitors Hospira
Japanese Strategic Partner Network Taiyo Sales focus on small and regional hospitals Partners E, F Taiyoapproved generics Portfolio of approved partner devices Hospiraapproved generics Partner devices Hospira Japan - Sales focus on large hospitals - Product focus as for rest of APAC Contrast media Precedex Paclitaxel Partner A Sales focus on radiologists Partner B Co-marketing, Co-development Partner C, D Sales focus on oncology Japan Potential to 2010* Taiyo filings / pipeline: 7 molecules, U.S.$460 million LMV Hospira oncology portfolio / pipeline: 5 molecules, U.S.$300 million LMV 13 * Due to ongoing evaluation of development needs and timing, these products are not all included in overall Hospira-disclosed pipeline.
Complete Cancer Management Pharmaceuticals Safe, effective chemo infusions Widest range Unique high-dose strengths Attractive pipeline Safety devices Safe handling 14 ONCO-TAIN Phaseal International quality standards: FDA / MHRA / TGA Source: Hospira South Asia Educational resource Training
Devices Product Line 15
APAC Medication Management Systems Market Characteristics Australia Japan Rest of Asia Total MMS Market (est. 2006, U.S.$MM) Technology Sophistication Infusion Pump Types Market Drivers Key Competitors ~$40 ~$200 n/a High High Medium-low Volumetric Syringe PCA Ambulatory Features Safety software systems Price Cardinal / Alaris Baxter Fresenius B. Braun Syringe Volumetric PCA Quality Supply reliability 24-hour support Technology Terumo NiPro JMS Volumetric PCA / Ambulatory Syringe Price for most segments Baxter Cardinal / Alaris Fresenius JMS Terumo 16 Source: Hospira estimates electronic infusion market
Hospira s Strengths and Key Competitive Advantages Medication Management Systems Australia Japan Rest of Asia Market Share Portfolio Breadth Product Differentiation Hospira Positioning Market leader in volumetric and ambulatory segments Plum A+, GemStar, LifeCare PCA, Hospira MedNet Service and support levels Server-based Hospira MedNet Partner of choice for integrated infusion management New entrant Market leader in volumetric pumps in HK and Taiwan; new entrant elsewhere Plum A+ filed Plum XLD / Plum A+ GemStar Older ambulatory pump in various markets Hospira MedNet (in future) Partner of choice for infusion error reduction Quality and reliability: focus on quality sensitive niche The solution you turn to for quality, safety and ongoing support 17
APAC Medication Management Systems Strategies Get portfolio region-wide to establish meaningful installed pump base in all markets Roll out Plum XLD, Plum A+ and GemStar offerings across region Enter Japan with Plum A+ Establish Hospira MedNet systems as standard in technically advanced markets (Australia, Japan) Protect leadership positions Leverage Taiwan and Hong Kong leadership as steppingstone to China Up-sell and cross-sell region-wide 18
Cost Constraints Drive Different Choices in Asia Australia / New Zealand, Japan High affordability Patient safety paramount Highly trained clinical staff Standardization of devices (multi-function) Custom sets Pumps sold Sophisticated safety software Service charged Quality Rest of Asia Low affordability Access to care paramount Staff shortages Multitude of single-function, inexpensive devices Generic sets Pumps placed Price 19
Pump Portfolio Rollout Potential Marketed R Regulatory filing U Under late-stage development Philippines China S. Korea H.K. Taiwan Australia Japan Plum XLD R R Plum A+ R U Symbiq U U LifeCare PCA U GemStar U R Hospira MedNet 20
Integrated Regional Business 21
Hospira s Sweet Spot in APAC Drug Delivery Medication Error Reduction ICU / CCU / OR Antiinfectives Pain Anesthesia Oncology Patient and Caregiver Safety Cost-effective, Quality Infusion Delivery 22
Priorities Over Next 12-24 Months Integrate Mayne Pharma Establish generic pharmaceuticals / generic oncology pipeline for Japan Achieve infusion pump entry in all direct-sell markets Install wireless Hospira MedNet systems in several Australian hospitals Evaluate direct entries to China and Korea, and execute if viable Maximize new product launches 23
APAC: Ideally Placed for Region s Opportunities Higher-growth region Favorable demographics Highly variable local market dynamics Solid Australian pharmaceuticals base Significant growth opportunities Pharmaceuticals: Japan (near-term), China and Korea (longer-term) Medication management systems: region-wide Realizing these growth opportunities will take time and smart moves 24
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