EXECUTIVE SUMMARY REPORT

Pakistan Pharmaceutical Market

1st HALF 2012

The report is for the exclusive use of the recipient and may not be reproduced in any
form without the written consent from IMS. The information contained in the report is confidential and may not be divulged to any other party. Copyright IMS AG, ZUG Switzerland 2011

Executive Summary Report

Pharmaceutical Market

TABLE OF CONTENTS

Foreword by Dr. Aman Ullah Khan 04

World market Company News in Brief Global Pharmaceutical Sales 06 17

Pakistan Pharmaceutical Market Market Overview Commentary Medical Index of PAKISTAN facts Tables 18 33 ..40 43

Clients Feedback Form FEEDBACK FORM 51

FOREWORD We are once again proud to present you the 1st semester of 2012 Executive Summary report based on Q2 2012 with analyses of the Pakistan market. The importance of this report has been highlighted by our respected clients who have time and again requested for this report. IMS Health has always offered accurate, authentic & valuable market insights to the Pharmaceutical industry through this report and has played an important role in delineating the industry trends. We would however, appreciate your valuable comments in the attached feedback form enabling us to further improve the quality and contents of this report.

Yours Sincerely,

Dr. Aman Ullah Khan Chief Executive

Tel Off: 021-34315148 / 34383700 E-mail: akhan@pk.imshealth.com

WORLD MARKET

January 2012
Corporate Developments Both the EMA and FDA approved Sanofi/Genzymes Framingham manufacturing plant, allowing production of Fabry disease therapy Fabrazyme to recommence. Thirteen major manufacturers began an alliance with the WHO and non-profit organisations to provide free treatments for neglected tropical diseases. Actavis said it would shake up the global diabetes market via the formation of a joint venture with Bioton for the development of insulins, including analogue insulins. Following its acquisition of Nycomed, Takeda said it would be consolidating its R&D sites, changing to a more diverse portfolio focused on new products, and laying off approximately 2,800 employees (2,100 in Europe and 700 in the US); the plan is expected to reduce income by 35bn in the financial year to March 2012. Novartis is cutting 2,000 jobs in the US linked to the patent expiry of top-seller Diovan this September and will take a $900m charge related to reduced sales expectations for newer antihypertensive Tekturna/Rasilez. It announced an agreement to resolve the US class action litigation regarding unpaid over-time by sales representatives, providing up to $99m to be shared amongst eligible class members. Johnson & Johnson agreed to pay $158m to settle a case regarding the alleged improper marketing of antipsychotic Risperdal in Texas. The company was also reported to be changing the executives in charge of its Tylenol unit (McNeil Consumer Healthcare), following the string of recalls in 2011. GlaxoSmithKline was fined by an Argentine court for failing to obtain proper parental consent during a trial of pneumonia vaccine Synflorix. Mergers & Acquisitions Amgen entered into a $3.6bn merger agreement with Micromet, a German/US biotech with a Phase II antibody for haematological malignancies, while BristolMyers Squibb is to acquire Inhibitex for $2.5bn, to expand its presence in the hepatitis C market. Watson bought Strides Arcolabs Australian and southeast Asian generics business, Ascent Pharmahealth. Roche made a $44.50 per share offer for Illumina, valuing the DNA sequencing and diagnostics firm at $5.7bn; the bid was hostile, following a number of rebuffs from Illuminas management. Two days later, Illumina adopted a shareholder rights plan but after Roche commenced its tender offer the following day, Illuminas board of directors said it would review the offer and postpone its 2011 financial results announcements. The tender offer will run until February 24th. Roche has also submitted four nominees for election to Illuminas board at its annual meeting.

Product Issues Novartis Consumer Health unit recalled a number of products, including Excedrin and Bufferin, in the US because of the potential of foreign or broken tablets in the packs; the manufacturing problem also led to supply issues for Endos Opana ER and certain other analgesics. Medivation and Pfizer announced further disappointing trial results for dimebon in Alzheimers disease and announced that they would be discontinuing its development for all indications and terminating their collaboration.

February 2012
Corporate Developments Pfizer and Hisun advanced their memorandum of understanding to create Hisun Pfizer Pharmaceutical Co. Ltd, a Chinese generics joint venture that will be 51%-owned by Hisun. Merck & Co announced a new 51%-owned joint venture with Supera Farma for the sale of innovative and branded generic products from Merck and Superas owners, Cristlia and Eurofarma, in Brazil. US sales representatives filed an unpaid overtime suit against LEO Pharma. Apotex paid Sanofi and Bristol-Myers Squibb $442m to satisfy the damages ruling following its launch of a generic version of Plavix in 2006. Mergers & Acquisitions Illuminas board of directors unanimously rejected Roches $44.50 per share cash tender offer as grossly inadequate. Nevertheless, later in the month Roche extended the offer, which commenced on January 27th; Illumina noted that few shares had been tendered. Product Issues Pfizer recalled its Lo/Ovral oral contraceptive and the generic equivalent in the US due to incorrect packaging. Johnson & Johnson recalled another batch of Tylenol, this time the infants Oral Suspension 1oz grape formulation, after some users reported difficulties with the dosing system. Daiichi Sankyos Luitpold subsidiary in the US recalled a batch of phenylephrine infection following the identification of visible particles. Pfizer was sued by a group of plaintiffs who allege that taking its antidepressant Zoloft whilst pregnant caused birth defects in their children. NGOs in India protested against Novartis attempts to patent its cancer drug Glivec in the country. GSK paused enrolment in clinical trials of Anacors GSK 052 as a treatment for complicated urinary tract infections due to a microbiological finding in a small number of patients in one Phase IIb study.

March 2012
Corporate Developments Abbott announced that the pharmaceutical company created by its separation would be known as AbbVie. Eisai is extending its UK headquarters to cover the European, Middle Eastern and African business, while GlaxoSmithKline said it would be investing 500m in the UK, building a new biopharmaceutical facility in Cumbria and creating up to 1,000 new jobs partly in response to the British governments pledge to introduce a patent box, which would allow for a lower rate of tax on profits generated by UK-based intellectual property. GSK and Daiichi Sankyo are creating a 50:50 vaccine development and marketing joint venture, known as Japan Vaccine Co., in Japan; it will begin operations in July. Conversely, Pfizer and Biocon decided not to pursue their biosimilar insulin commercialisation agreement, citing differences in individual priorities. Hospira returned the US and Canadian rights to Durects Posidur, a post-operative pain relief depot. The US Department of Justice reportedly turned down a tentative $1bn federal settlement with Johnson & Johnson over the alleged improper marketing of its antipsychotic Risperdal; the company has already settled a case in Texas and trials in other states are ongoing. A former Roche US sales manager won an age discrimation case against the company, while some sales representatives filed an overtime suit against Novo Nordisk. Mergers & Acquisitions Sanofi is to purchase biosurgery company Pluromed, while Shire picked FerroKin BioSciences, which has an iron chelator in Phase II trials. Valeant continued its acquisition trail, absorbing Natur Produkt, a Russian OTC manufacturer; acquiring certain assets from Austrias Gerot Lannach (mainly branded generics sold in Russia and the CIS); and taking a 19.9% stake in Pele Nova, a Brazilian tissue regeneration biotechnology company. Roche received a request for additional information on its hostile bid for Illumina from the FTC, and filed a definitive proxy statement before extending its tender offer for a second time. It then increased its offer price from $44.50 per share to $51, which Illuminas board said it would review. Amylin was reported to have rejected a $3.5bn takeover offer from Bristol-Myers Squibb. Product Issues A US court dismissed an AstraZeneca lawsuit concerning the approval of Seroquel copies, as did the FDA with the companys Citizen Petition, and a number of manufacturers launched generic quetiapine; AstraZeneca subsequently sued the FDA. Conversely, the US Seroquel XR formulation patent

was found to be valid and infringed by a group of generics firms; this was also the case in the Netherlands, but in the UK the extended-release patent for the antipsychotic was ruled to be invalid. In another setback, AstraZeneca said it would not be pursuing the approval of TC-5214 as an adjunct therapy for major depressive disorder; the product, licensed from Targacept, failed to meet the primary endpoints of its latest Phase III studies. Endo filed an amended Citizen Petition trying to prevent the FDA approval of generic versions of its topical analgesic for post-herpetic neuralgia, Lidoderm. Sanofi began shipping Fabrazyme produced at its newly-approved plant in Framingham, MA, allowing US Fabry disease patients to return to full dosing; globally, normal supply levels should start to return in the second quarter. Simultaneously, Shire said it had decided to withdraw the BLA for its Fabry therapy Replagal, after it appeared that the FDA would be requesting additional clinical trials; it had been supplying Replagal to US patients, often free of charge, in response to Sanofis manufacturing deficiencies. Shire also announced that Lialda (SPD476) had not shown efficacy as a treatment for diverticulitis, so no regulatory filing was planned in this indication; the drug is already marketed for ulcerative colitis. British researchers are to examine whether GlaxoSmithKlines Pandemrix pandemic flu vaccine might be linked to cases of narcolepsy in children. BristolMyers Squibb recalled organ storage fluid Viaspan in Europe owing to the possibility of bacterial contamination. The FDA requested more information on Eisais sNDA seeking approval of Dacogen as a treatment for acute myeloid leukaemia. An advisory panel voted against the approval of Merck & Co and Ariads ridaforolimus for sarcoma, citing a poor risk: benefit profile, and Merck said it would be discontinuing development of the oral formulation of Cardiomes vernakalant for atrial fibrillation, based on an assessment of the regulatory environment and projected development timeline; work on the intravenous version (Brinavess) will continue.

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April 2012
Corporate Developments Johnson & Johnson launched Janssen Therapeutics EMEA, a new European subsidiary that will focus on the commercialization of TMC435 for hepatitis C, while Mylan is expanding its operations in Ireland. Novo Nordisk intends to increase its US workforce by 15% this year, and Ipsen opened a new commercial HQ in New Jersey. Meda announced that it had established an affiliate in Hong Kong. J&Js new CEO Alex Gorsky said he would be focusing on the recall problems at the companys OTC unit, while AstraZeneca CEO David Brennan is making an abrupt departure in light of the firms recent poor performance. Mergers & Acquisitions It was a busy month for deal announcements, led by Watsons 4.25bn acquisition of Icelands Actavis, which could create the third-largest generics manufacturer. In smaller transactions, Amgen is to buy KAI, which has a Phase II candidate for secondary hyperparathyroidism, and Mustafa Nevzat of Turkey; Takeda went for URL, which markets Colcrys for gout; and AstraZeneca is paying $1.26bn for Ardea, whose lead compound is also for gout. Valeants latest acquisition is Pedinol, a podiatry specialist, while Shire picked up most of the assets of Pervasis, which has a regenerative medicine endothelial cell technology platform. Human Genome Sciences rejected a $13 per share ($2.6bn) offer from Benlysta partner GlaxoSmithKline, saying that it undervalued the company, but added that its board would be exploring strategic alternatives and that GSK had been invited to participate in the process. Warner Chilcott didnt identify its potential suitors, but said it was also examining ways of enhancing shareholder value; Bayer was reported to be considering a bid. Pfizer divested its nutrition business to Nestl, for $11.85bn. After being rejected by both board and shareholders, Roche said it would not be extending its tender offer for Illumina, or increasing the price of its $51 per share ($6.8bn) hostile bid. Product Issues Novartis announced that a patient using its oral multiple sclerosis therapy Gilenya had developed progressive multifocal leukoencephalopathy; however, the patient had previously used Biogen Idec and Elans Tysabri, which is associated with the rare viral disease.

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A few days later, the EMA concluded its review of Gilenyas safety, and recommended stronger warnings; simultaneously, Novartis agreed to make similar changes to the products US label. The FDA placed Novartis hepatitis C candidate alisporivir on clinical hold following the death of a patient in a trial. Bayer updated the US labels for its oral contraceptives containing drospirenone, regarding the higher risk of venous thromboembolism compared with products using levonorgestrel or other progestins, while the FDA warned that Merck & Cos Propecia and Proscar finasteride products, used for male pattern baldness and benign prostatic hypertrophy respectively, might be associated with sexual side-effects. Johnson & Johnson was ordered to pay a $1.1bn penalty by an Arkansas court after being found guilty of improperly marketing its antipsychotic Risperdal.

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May 2012
Corporate Developments Abbott agreed to pay a total of $1.6bn to US federal and state authorities to settle claims that it improperly promoted anticonvulsant Depakote for off-label indications, and entered into a five-year Corporate Integrity Agreement. Pfizer said it had reached an amicable settlement in the case brought by Brigham Young University and Daniel Simmons, regarding the latters involvement in the development of Celebrex: Pfizer will fund a chair at BYU in Simmons name. In France, a trial against Servier commenced concerning its now withdrawn diabetes drug Mediator, which has been linked to more than 500 deaths. Endo Pharmaceutical Holdings shareholders approved a change in the companys name, to Endo Health Solutions, while Bayer was reported to be considering the sale of its Diabetes Care unit. Activist investor Carl Icahn is again seeking to secure representatives on the Forest board of directors. Lilly opened a new R&D centre in Shanghai, which will focus on diabetes. The Indian government said officials at the countrys drug regulator had been colluding with both domestic and international manufacturers to speed up drug approvals, which sometimes meant products were not tested sufficiently. Mergers & Acquisitions Despite being rejected by the board in April, GlaxoSmithKline launched a tender offer directly to Human Genome Sciences shareholders, prompting HGS to adopt a stockholder rights plan; GSK was later reported to be considering a move to replace the entire HGS board of directors, and to extend its tender offer beyond June 7th. Takeda announced an agreement to acquire Multilab, a Brazilian manufacturer of branded generic and over-the-counter drugs. Valeant bought certain assets from Canadian nutraceutical firm Swiss Herbal Remedies, plus the AcneFree skin treatment and other assets from University Medical of the US. Johnson & Johnson acquired Guangzhou Bioseal Biotechnology, which has a porcine plasma-derived product for the control of bleeding during surgery. Product Issues Daiichi Sankyo began a strategic collaboration with Coherus BioSciences for the development and commercialisation of Enbrel and Rituxan/MabThera biosimilars in Japan, South Korea and Taiwan. After making a concerted effort to maintain sales following the loss of its US exclusivity last November, Pfizer told The Wall Street Journal that it would no

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longer be negotiating new contracts to sell Lipitor to health plans, and also that no advertising or sales force promotion for the drug would be continued; multiple generics were able to enter the US market on May 31. Pfizer also reported disappointing results for Lyrica in inadequately treated painful diabetic peripheral neuropathy, and halted a Phase III trial of the product for HIV neuropathy. Sanofi and Bristol-Myers Squibbs Plavix, the worlds second best-selling drug after Lipitor, lost US exclusivity on May 17th. Onyx and Bayers Nexavar, marketed for liver and kidney cancers, did not improve overall survival in a nonsmall cell lung cancer trial, while Roche halted development of dalcetrapib after suggestions of lack of efficacy in a Phase III trial: it was designed to raise levels of good HDL cholesterol. The US National Institutes of Health is to work with AstraZeneca, Lilly and Pfizer: the companies will make a number of their discontinued compounds available to the NIH, which will investigate their potential in the treatment of different diseases. All the products target a specific gene, have already been found to be safe in humans, and any profits from commercialization would be shared.

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June 2012
Corporate Developments Pfizer announced that would be running a partial IPO for its animal health unit, with the standalone company being known as Zoetis; separately, the patent expiry of Lipitor was linked to the company cutting 177 jobs in Ireland. Roche is making 1,000 US employees redundant as part of a restructuring of its R&D operations; some work will be transferred to Germany and Switzerland, and the head of pharmaceutical research, Jean-Jacques Garaud, left the company. Activist investor Carl Icahn continued his criticism of the executives at Forest, and sought to add more of his representatives to its board of directors. Johnson & Johnson said it would record a charge of $600m in the second quarter related to the litigation over Risperdal, Invega, Natrecor and Omnicare Inc. In a case involving GlaxoSmithKline but relevant to a number of other major pharmaceutical companies, the US Supreme Court ruled that the firm did not owe its sales personnel overtime wages as they were exempt from a federal wage-and-hour law. In China, a former researcher at WuXi PharmaTech was accused of stealing and selling two Merck & Co compounds his then company had been testing on behalf of the US giant. The government introduced new legislation that could see it overrule patent protection in certain circumstances, and was reported to be looking at doing so for Gileads antiretroviral tenofovir, a key component of many HIV treatment regimens. Mergers & Acquisitions Bristol-Myers Squibb is to buy diabetes specialist Amylin in a complicated deal valuing the smaller firm at $5.3bn. BMS will pay out another $1.7bn comprising Amylins net debt and a contractual payment obligation to former Byetta partner Lilly, but in turn will receive $3.4bn from AstraZeneca, which will enter into a development and commercialisation collaboration with Amylin once the acquisition has been completed. AstraZeneca, Novartis, Sanofi and Merck & Co had also reportedly been interested in Amylin, which recently launched the extended-release exanatide product Bydureon in the US. GSK again extended its $2.6bn tender offer to buy Benlysta partner Human Genome Sciences, until June 29, despite the latters repeated rejection of the bid as being undervalued. Lilly CEO John Lechleiter again said he wasnt interested in any major acquisitions or diversification.

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Product Issues Merck & Co and AstraZeneca amended their historical partnership relating to a former US joint venture: AstraZeneca will not exercise its option to acquire Mercks remaining interest in the joint venture in 2012, and will receive a new option to do so in June 2014. The decision will boost Mercks revenue, thanks to an interest in Nexium and Prilosec, by $200m annually. Merck KGaA began a collaboration with Dr Reddys for the development and commercialisation of biosimilars, with a focus on monoclonal antibodies for cancer. Forest revised its 2013 earnings guidance downwards owing to a more severe drop in sales for antidepressant Lexapro than previously expected following the loss of US exclusivity in March. Amgen said Sensipar/Mimpara had not led to a statistically significant improvement in mortality/cardiovascular event rates in patients with secondary hyperparathyroidism and chronic kidney disease on dialysis. Sanofi Pasteur recalled all its BCG vaccine in Canada because of manufacturing problems, while Novartis withdrew a batch of oral contraceptive Introvale owing to a packaging error. J&J is being sued over problems with its vaginal mesh products. AstraZeneca halted a Phase I study of AZD2820, a subcutaneous melanocortin-4 receptor partial agonist for obesity co-developed with Palatin, after one recipient suffered a serious adverse event, possibly an allergic reaction.

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GLOBAL MARKET SALES Sales Through Retail Pharmacies (Twelve months to June 2012)
Total world Market $853.2 Bn NORTH AMERICA $250.7 Bn U.S.A. $231.1 Bn CANADA $19.6 Bn EUROPE $107.8 Bn GERMANY $28 Bn FRANCE $15.2 Bn ITALY $28 Bn SPAIN $13.9 Bn UK $13.2 Bn JAPAN (including hospitals) $102.2 Bn CHINA (hospital) $45.3 Bn LATIN AMERICA $41.3 Bn BRAZIL $22.1 Bn MEXICO $8.1 Bn ARGENTINA $5.3 Bn AUSTRALIA/NZ $12 Bn The top 5 therapy classes at ATC3 level in the 12 months to June 2012 were:

1. 2. 3. 4. 5.

C10A-Cholesterol And Triglyceride Regulating preparations A2B-Antiulcerants N5A-Antipsychotics N6A-Antidepressents & mood stabilizers A10C-Human Insulin and Analogues

The top 5 products in the 12 months to June 2012 were: 1. 2. 3. 4. 5. Lipitor Crestor Plavix Seretide Nexium

The top 5 corporations in the 12 months to June 2012 were: 1. 2. 3. 4. 5. Pfizer Novartis Merck & Co AstraZeneca GlaxoSmithKline

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MARKET OVERVIEW
The 1st Half 2012 saw a double digit growth for both MNCs and NATs. With the market touching 180.083 billion Pak Rupees, the industry grew exceptionally well with the phenomenal positive growth of +17.03% in MAT Q212. Nationals continued to gain market share with a growth of +19.28% while Multinationals also grew with a double digit growth of +14.24% (Q2 2012- MAT BASIS).
VALUE WISE GROWTH LAST 12 QTRS - MAT BASIS
25.00 20.00 15.00 10.00 5.00 0.00 Q3-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 19.28 17.03 14.24

Q2-12

Growth +/-

TOTAL

NATIONAL

MULTI-NATIONAL

VALUE WISE GROWTH LAST 12 QTRS - QTR BASIS

30.00 25.00 20.00 15.00 10.00 5.00 0.00 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 18.54 17.02 15.06

Q1-12

Q2-12

Growth +/-

TOTAL

NATIONAL

MULTI-NATIONAL

The fast onward march of the national companies continued capturing share of 56.40%, leaving multinationals behind. Nationals also dominated unit market share with 52.64% as compared to Multi-Nationals 47.36% (based on Q2 2012).

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NEW PRODUCT LAUNCHES

The past trend of National companies launching large number of New Products continued during the first half of 2012.The value and total number of new products launched by the industry in different segments/ ATC level I during Jan 2012 Jun 2012 are: TOTAL NATIONAL MULTI-NATIONAL Value 438,517,459 380,741,787 57,775,672 Number of New Products 212 196 16

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As evident by above table, more new products were launched in J and A therapeutic segments which prompts us to think that despite their large size and crowded market place, there is still potential and growth opportunities which cannot be neglected by the market players.

Month wise Products Launched

As per monthly activity in the industry in term of New Product launches, we can see that March 2012 was the most active month with 57 launches while January had fewest New product launches 22 only. Interestingly January 2012, despite being the lowest month in term of New product launches, has the highest per product yield. February 2012 although being better than January 2012 in new product launches has the lowest per product yield. During the period under discussion, May 2012 was the highest month in terms of sales value but it is the 2nd lowest month after February 2012 in per product yield.

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MULTINATIONAL Vs NATIONAL ANALYSIS (SPLY)

The 25 MNCs in Pakistan have a cumulative share of 43.60% in value. The per company average market share comes to 1.74 %. A historical comparison of MNCs share analysis over the last five years is shown in the chart below. The graph shows a gradual decline in share of MNCs with balance of power clearly shifting in favor of National companies. During 2012, MNCs have lost 1.07% in value while in units, they have lost .79%. Main segments C class. where national companies have gained are J, A and

The evolution index of MNCs is 97.62 & NATs is 101.92 in the 1st Half of 2012 (MAT Basis); a yard stick to guage gain or loss of market share. The current market share of 56.40% in value and 52.64% in units that national companies enjoy in this

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market is through 8,107 Active products (currently available in the market and sales reported in IMS), whereas MNCs have 43.60% share in value and 47.36% in units through currently 993 Active products.

DERIVED /REDEFINED MARKET ANALYSIS

As market share analysis is one of the key yardsticks to measure performance, it would be more pertinent to analyze Corporates in their own competing grounds. As would be observed below, there are major shifts for some companies creating new ranking dimensions to corporate listings. The results are tabulated as under:

Searle which was first in term of operating market size during same period last year 1st half of 2011 is still at no 1 position in 1st half 2012. The playing area of Searle which was 113 billion has now expanded up to 121 billion and Pfizer stood at 2nd position with 118 billion followed by GSK, Novartis and Barrett Hodgson. Thus, on the basis of the above and according to redefined market shares, descending order would be: Roche, Nestle, the top 10 corporate rankings in GlaxoSmithKline, Abbott, Bayer, Sami,

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Sanofi-Aventis, Getz, Novartis and Pfizer. Its interesting to note that although both Novartis and Getz enjoy same market share in total market but in terms of real market share Getz clearly surpasses Novartis. Though Nestle is ranked 2nd in terms of real market share, however, Nestles sales are mainly from its consumer (nonpharmaceutical) products.

Per Product Yield

The Per Product Yield for top 20 Corporates is tabulated as under:

GSK, Abbott, Sami, Nestle and Roche are proud members of the club who have achieved over Rs 100 Mn in per product yield. Sami has created history by becoming the first national company to be a member of this prestigious club. GSK has got the highest

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number of active products i.e.; 162 while within the top 20, Nestle with 21 products sits at the bottom of the list.

Top 10 MNCs and Nationals Sales and Market share

GSK leads the MNCs with highest sales and the only corporate with double digit market share. At Nationals front top 5 Companies each have greater than 2% share from total market. Top 10 Nationals occupy nearly of the total industry sales (23.03%).

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ACTIVE MARKET
A fair idea could be extracted from the following table, where the top 20 ATCs are analyzed under corporate contribution (Multinational & National), formulation and number of brands available.

Of the 20 TCs analyzed, the honors are nearly equally shared by MNCs and Nationals as MNCs dominate in 7 ATCs while Nationals dominate in the rest 13. M01A has highest no of products, making it the toughest battle ground among the leading segments. A few ATCs level III worth mentioning which have clear cut MNC domination are J01C-BROAD SPECTRUM PENICILLIN (81.76), N02B-NON-NARCOTIC ANALGESICS (71.43), A12A-CALCIUM (54.47), A11E- VITAMIN B COMPLEX (81.46), J05B-ANTIVIRALS EXCL. ANTI HIV (56.94) and A10C- HUMAN INSULIN + ANALOGUES (95.10). Similarly some ATCs level III where Nationals have clear domination are J01D-CEPHALOSPORINS & COMBINATIONS (77.35), J01G- FLUOROQUINOLONES (76.93), A02BANTIULCERANTS (87.06), P01D-ANTI-MALARIALS (88.17), C10A-CHOLESTROL & TRIGLY. REGULATOR (92.36) R05C-EXPECTORANTS (83.70) and

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FORMULATION WISE CONTRIBUTION: Whats happening at this front?

The above table shows that Oral solid dominates the market with 50% share for total market and as well as MNCs and Nationals. Although it has a lions share in all formulation, its growth is less than the total market and respective segments. Oral liquid despite being 2nd in market share is growing faster than the total market and MNC/ National segments.

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Corporate Matrix Q2-2012 Performance (MAT BASIS)

*CONT. TO PK.PM = Contribution to Pakistan Pharmaceutical Market

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Top 20 Corporations (Excl. V06 & V07) formulation wise Contribution %

Solid, liquid and Injectable % contribution for the top 20 corporations in total Pharmaceutical Industry of Pakistan in Q2-2012 on MAT Basis is tabulated as under:

In Solid formulation, GSK is on top position with 5.89% share followed by Getz, Novartis and Abbott having more than 3% contribution. In Liquids, GSK again remains on top with 2.77% share followed by Abbott and Pfizer having more than 1% contribution. Searle and Novartis stand on 4th and 5th positions respectively. In Injectable market, Sanofi-Aventis is on top position with a share of 1.55% followed by Sami, Roche and BOSCH with more than 1% contribution.

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Absolute Growth of Top 10 Corporations

Total industry had an absolute growth of Rs 26.23 Bn on MAT Q2-2012 basis and it was Rs 21.68 Bn on MAT Q2-2011. If we analyze the absolute growth of top 10 Corporations contributed 45.7% of total Absolute growth of the Industry. We come to the conclusion that in the top 10 corporations, GSK is the first corporate which achieved Rs 2 Bn in absolute growth followed by Abbott which has achieved 1.94 Bn and another 3 Corporates have crossed One billion plus in absolute growth. As can we seen below that two National Corporates are in pursuit of reaching/surpassing the two MNC giants in term of absolute growth.

Elements of Growth (EGS)

A deep dive into the Elements of growth show that on an average 72% of Absolute Growth is coming from Volume, 8.36% from New Product launches, 5.29% from Line Extensions while 14.32% from Price change of top 10 Corporates.

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Top 10 Corporations Per Day Yield (January -June 2012)

The table shows PDY (Per Day Yield) of top 10 corporations of the Pakistan Pharma Industry. Following are the key findings from the table:

Most Productive Month

The average productivity of the Industry per month for the months of January to June 2012 comes to Rs. 516,066,902. The highest productivity is seen in the month of May with Rs. 546,648,523. If we analyze the productivity of individual corporations: Company GSK Abbott, Pfizer, Getz & Searle Novartis, Sami & Merck Sanofi & Hilton Most Productive Month March April May June

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Least Productive Month

January was the least productive month for the Industry and as well as for the top 10 Corporates.

Growth Per Day Productivity June / January

If we calculate the growth on per day productivity of Industry for the period June over January it is 17.40%. This calculation in percentage is derived by dividing the per day productivity of industry in the month of June by the per day productivity in January. For the individual corporations, Sanofi has the highest growth on per day productivity i.e. (+44.03%) while GSK has the lowest growth on per day productivity i.e. (0.33%).

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MARKET COMMENTARY (MAT Q2 2012 Vs MAT Q2 2011)

LEADING 20 CORPORATES (DETAIL ON TABLE 1)

The overall market reached 180.083 Bn rupee mark with a growth of +17.03% on MAT Q2 2012 basis. The top 8 Corporates have crossed 5 billion mark. In the top 20 Corporates, 9 are multinationals and 11 are nationals. The top 20 Corporates contribute 62.37% of the total Market. GLAXOSMITHKLINE and ABBOTT were the main contributors with 10.95% and 6.52% share respectively of the total market. In the top twenty Corporates ranking the first four Corporates (GSK, Abbott, Pfizer and Novartis) maintained their rankings. However shift in rank was observed as follows

The Corporates who managed to grow more than the market (having evolution indices above 100) are ABBOTT, GETZ, SAMI, BOSCH, GLOBAL and ATCO. Amongst the top 20 Corporates, SAMI was the fastest growing company (+30.11%) followed by GETZ (+28.24%), GLOBAL (+27.48%), and ATCO (+22.31%). The top 20 Corporates cumulative value is 112.27 billion (62.34% market share) this year and in 2011 it was 96.96 billion (63.01% market share). If we analyze the growth contribution from the total Pakistan Pharma market, the top 20 grew 15.79% while rest of the market grew 19.12% which is higher than the total Pharma market. This slower growth of the top 20 club made them loose 0.67% market share this year in 2Q 2012 MAT Vs 2Q 2011 MAT.

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LEADING 20 MULTINATIONAL CORPORATES (DETAIL ON TABLE-2)

Although the MNCs grew with double digit +14.24%, they lost around 1.07% share in value to National companies at MAT Q2 - 2012 as compared to MAT Q2 2011. Total market size of MNCs moved from Rs. 68.73 Bn to Rs 78.52 Bn. The fastest growing corporate is ALCON +26.11% followed by JOHNSONS & JOHNSONS +25.14%, LUNDBECK +22.42% and NOVO NORDISK +19.04%. Within the top 20, movements in slots in last one year MAT Q2 2012 Vs MAT Q2 2011 are as follow:

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LEADING 20 NATIONAL CORPORATES (DETAIL ON TABLE-3)

The National Corporates are consistently gaining market share in the Pakistan Pharmaceutical Industry, owing to their higher than market growth i.e. +19.28% Vs +17.03% (MAT Q2 2012). The Nationals have a value of Rs. 101.56 billions with a share of 56.40% with an increase of 1.07% as compared to same period last year. The top 5 slots remained in the same hands while there were some shifts in other Corporates rankings. In top 20s club, we saw 5 National corporations improve their ranking this year Vs last year while 5 corporations on the other hand have slipped down their ranks during the same period. Within the top 20, movements in slot in last one year MAT Q2 2012 Vs MAT Q2 2011 are as follows:

Amongst the top 20 Nationals, the fastest growing was SAMI (+30.11%) followed by PHARMEVO (+28.75%), GETZ (+28.24%), HIGH-Q INTL (+28.0%) and GLOBAL (+27.48%)

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LEADING 20 ATCs (DETAIL ON TABLE-4)

In the top 20 ATCs, J01D - CEPHALOSPORINS & COMBINATION remained on top of the list with 14.81 Billion sales and growing at a rate of 14.77%. The next six (6) ATCs have all crossed the MAT sales of five billion rupees. The top 2 ATCs remained in the same position while INFANT FORMULAS, NON-NARCOTIC ANALGESICS, ANTIHISTAMINES SYSTEMIC and ANTI-EPILEPTICS have retained their ranking while rest of the ATCs that underwent rank movements are:

Amongst the top 20 ATCs, 9 had faster growth than the total market. The fastest growing ATC was R05C-Expectorants +26.06%, +29.32% followed by A10C-HUMAN A02BINSULIN+ANALOUGES double digit growth. P10D-ANTI-MALARIALS +25.30%,

ANTIULCERANTS +22.51% and A12A-CALCIUM +21.57%. All the ATCs had positive and

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Where is the growth coming from for the above mentioned 5 fastest growing ATCs?

Despite observing new launches and periodic price increase (hardship cases + using the price cushion), volume change is the main growth driver for these ATCs. R05C has observed Price Change as the major component of growth where we have seen significant price increases as described above.

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LEADING 20 PRODUCTS (DETAIL ON TABLE-5)

AUGMENTIN with sales of 3.27 billion is heading the leading top 20 products table. It is ahead of the next product in the list by a very big margin of 1.83 billion and has a growth of +8.54%. It has 1.82% share from total Pakistan Pharma market. Again, the Multinationals are leading the top 20 products list with 15 products against 5 products of Nationals. Among the leading 20 products, 6 products belong to GSK, 3 products belong to Abbott and 2 products belong to Sami. The top 20 products contributed 13.59% of the total market. Among the top 20, highest growth was seen in CAC 1000 Plus +120.38%, ENSURE +40.56%, PANADOL +36.25%, RISEK +34.62%, OXIDIL +31.35% and NOVIDAT +30.93% followed by HUMULIN 70/30 +27.87%. In the top 20, 16 products show double digit growth. Among the leading 20 products, 7 belong to ANTI-INFECTIVE class, 5 belong to ALIMENTARY TRACT SYSTEM and 3 belong to NON-NARCOTIC ANALGESICS.

LEADING 20 NEW PRODUCTS (DETAIL ON TABLE-6)

National Companies have a major dominance in the new product market (product < 25 months old). Thirteen (13) out of the top 20 new products belong to National companies and Seven (7) belong to Multi-National PEG-INF is the leading product with a sales value of Rupees 323.5 million and having 04.12% share from the total new products market. PEG-INF has set a new record and has raised the bar very high for future new products. We feel that it would be difficult for a new product to beat this record in near future. In terms of market share within new products, PREVENAR 13 of PFIZER has 03.85%, UNIPEG of GETZ has 02.68% and OSNATE-D of AGP has 01.53% occupying the next three positions.

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LEADING 20 SINGLE MOLECULES (DETAIL ON TABLE-7)

The single molecule market reached at Rs. 120 Billion mark having share of 67% with a growth of +15.81% which is lower than the total market growth in MAT Q2 2012. In this semester 8 out of top 20 single molecules crossed Rupees 2 billion mark with the addition of 1 molecule in this club while all top 20 single molecules have crossed the Rupees 1 billion mark. Among the top 20, only CEFTRIAXONE, CEFIXIME, OMEPRAZOLE, PARACETAMOL, AMOXICILIN, PEGINTERFERON ALFA-2A, CLARITHROMYCIN, and AMLODIPINE maintained their ranks, while significant changes were seen in the ranking of the remaining molecules as shown in the table below:

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MEDICAL INDEX OF PAKISTAN (MIP) FACTS BASED ON MAT JUNE 2012

CONSULTATIONS
The total number of consultations in Pakistan is 802 million on MAT June 2012 and if we analyze top 10 consultations we observed that they alone contribute 33.92%. In top 10 consultations we observed 80% are coming from Acute and 20% are from chronic therapeutic class areas.

LEADING 10 CONSULTATION IN PAKISTAN

1. FEVER UNSPECIFIED 2. ESSENTIAL (PRIMARY) HYPERTENSION 3. DIARREOHA & GASTROENTERITIS OF ORIGIN 4. MALAISE AND FATIGUE 5. COUGH 6. OTHER SPEC RESPIRATORY DISORDERS 7. NAUSEA AND VOMITING 8. UNSPECIFIED DIABETES MELLITIS WITHOUT COMPLICATIONS 9. URINARY TRACT INFECTION 10. UNSPECIFIED ACUTE TONSILLITIS UNSPECIFIED PRESUMED INFECTIOUS

In the leading 10 consultations in Pakistan, Unspecified Diabetes Mellitis without complications goes 1 position up (from 9 to 8 position) as compared to last semester (Q4-2011)

PRESCRIPTIONS
The total prescriptions from all doctor specialties in Pakistan are 1.460 Bn on MAT June 2012 in which MNCs have 51.69% and Nationals have 48.31% share. This is interesting to note that although MNCs have lost significant share to National in sales but they are maintaining lead in Rx. If we analyze total MNCs prescriptions the top ten MNCs share is 95.89 and within total National prescriptions, the top ten Nationals have 48.51% share.

LEADING 10 CORPORATES IN PAKISTAN

The leading 10 Corporates contribute 861 Mn prescriptions and their share is 58.95% on MAT June 2012 basis of total Pakistan prescriptions. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. GlaxoSmithKline Abbott Pfizer Sanofi Aventis Novartis Searle Sami Getz Merck Hilton

6 out of 10 Corporates i.e., 60% Corporates are MNCs again showing supremacy at this front.

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FASTEST GROWING CORPORATES IN PAKISTAN

If we analyze the fastest growing Corporates in terms of prescriptions in Pakistan, Nationals are growing faster than MNCs and in top 5 Corporates 4 belong to National and one belongs to MNC, which are: 1. Atco 2. Bosch 3. Helix 4. Servier

5. Asian Continental PRODUCT PRESCRIBED SPECIALITY WISE

An in depth analysis of specialties in terms of their prescribing habits shows that GPs are prescribing PANADOL as the no 1 drug followed by CALPOL on second place and AUGMENTIN on third place. For prescribing habits of other specialties please refer to the chart below:

Out of the brands occupying first 3 positions an all doctor specialties, 12 belong to MNCs and 5 belong to Nationals.

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TABLES
TABLE 1-TOP 20 CORPORATES TABLE 2-TOP 20 MULTINATIONAL CORPORATES TABLE 3-TOP 20 NATIONAL CORPORATES TABLE 4-TOP 20 THERAPEUTIC CLASSES TABLE 5-TOP 20 SINGLE MOLECULES TABLE 6-TOP 20 LEADING PRODUCTS TABLE 7-TOP 20 NEW PRODUCTS

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EXECUTIVE SUMMARY 1ST HALF 2012

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