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IKEV-BOSFOR Biotech Market Penetration Strategies Cuneyt Unutmaz Top Biotech Drug Sales Drug Company Disease Epogen Aranesp Rituxan Enbrel Neulasta Avonex Neupogen Rebif Synagis Cerezyme Viread Gonal-f Avastin Herceptin Visudyne Provigil Renagel Actig Erbitux AmBisome Amgen Amgen Genentech Amgen Amgen Biogen Amgen Sereno MedImmune Genzyme Gilead Sereno Genentech Genentech QLT Cephelon Genzyme Cephelon imClone Gilead Anemia Anemia Non-Hodgkin Lymphoma Arthritis Neutropenia Multiple Sclerosis Neutropenia Multiple Sclerosis Infectious Disease Gaucher Disease HIV Infertility Metastatic Colorectal Cancer Breast Cancer Wet AMD Excessive Daytime Sleepiness End- Stage Disease Breakthrough Cancer Pain Metastatic Colerectal Cancer Infectious Disease 11/08/2007 2004 sales ($M) 2003 Sales ($M) 2601 2473 2326 1900 1740 1417 1175 1091 942 839 783 573 555 483 448 439 364 344 261 212 Confidential. Not to be copied, reproduced or redistributed. 2435 1544 1982 1300 1256 1168 1267 819 849 739 567 526 N/A 425 356 290 282 237 N/A 198 3 Why Biotech Drugs are Expensive? ¾ Extremely high *1Pre-IND failure rate for *2NMEs ¾ 1 in 5 NMEs passes clinical trials ¾ Takes 10 years from IND to market ¾ Multiple review cycles ¾ Development Cost of per NME: ~ $800 million ¾ High cost of clinical trials ¾ High cost of building biopharmaceutical manufacturing facility: $150M to $600M ¾ High cost of facility validation and approval. *1Pre-Investigational New Drug Application *2New Molecular Entities 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 4 Drug approval Process 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 5 Biotech Market Penetration Strategies ¾ Acquire drug companies, with promising drug (Phase II & Phase III) ¾ Obtain a partnership in licensing agreement for regional production and selling rights of the drug. ¾ Outsource biopharmaceutical drug production. “TURKISH PHARMACEUTICAL COMPANIES ARE NEW IN THE BIOTECH ARENA THUS NEED AN EXPERT PARTNER” 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 6 Why Outsource Biomanufacturing? ¾ Eliminate high cost of building facilities ¾ Avoid facility validation and approval ¾ Focus on core business initiatives ¾ Optimize and control operating cost ¾ Free resources ¾ Focus on core business initiatives ¾ Obtain high quality at low cost ¾ Reduce time-to market 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 7 Introduction to Celltrion’s CMO Strategy Capitalizing on its CMO business and manufacturing infrastructure, Celltrion aspires to be a leading global biopharmaceutical company CMO Business Phase I Strong cash flow for development pipeline Advanced process development Capacity: 50,000L (Current) Planned Capacity: 230,000L (One of the World’s Leading CMOs) Strategic capacity expansion Phase II 11/08/2007 Product Development Build clinical development expertise Co-development Proprietary Pipeline Aim to build own product pipelines by 2015 Confidential. Not to be copied, reproduced or redistributed. 8 Facilities Phase I Phase II Capacity Current Facility 1. Land Size - 23 acres (Building: 287K ft2) 2. Capacity 1. Land Size - 24.5 acres (Building: 801K ft2) 2. Capacity - 50K Liter (12.5K X 4) 11/08/2007 Expansion Facility - 192K Liter (15K X 12, 3K X 4) Confidential. Not to be copied, reproduced or redistributed. 9 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 10 Celltrion’s Production Capacity Facility Capacity Configuration Facility Status Location Existing Facility 50,000 L 4 Trains X 12,500 L Commercial Operation Incheon, Site I 1st Expansion Facility 90,000 L 6 Trains X 15,000 L Under Incheon, Construction Site II 2nd Expansion Facility 90,000 L 6 Trains X 15,000 L Small-scale cGMP Facility 12,000 L 4 Trains X 3,000 L Total Capacity 242,000L 11/08/2007 Planned Incheon, Site II Under Incheon, Construction Site II Confidential. Not to be copied, reproduced or redistributed. 11 Flow Chart of Contract Manufacturing Rolling forecast from client Routine Procedure PO PO Production Production Schedule Schedule BDS BDS Production Production Client Client BDS BDS Release Release for for Formulation/Finish Formulation/Finish QC QC Test Test at at both both Celltrion & Client Celltrion & Client Site Site Final Final Product Product Test Test BDS BDS Delivery Delivery to to Client Client Final Final Product Product Release Release Invoice Invoice to to Client Client PATIENT PATIENT C C of of A, A, C C of of C C 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 12 Process Flow 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 13 Typical Production Steps WCB Vials T-Flask T-Flask & & Spinner Spinner Flask Flask Culturing Culturing Inoculum Inoculum Transfer Transfer Vessel Vessel Seed Seed Bioreactor Bioreactor Production Production Bioreactor Bioreactor Harvest Harvest 11/08/2007 LN2 Tank for WCB Storage Confidential. Not to be copied, reproduced or redistributed. 14 Cell Culture: Inoculum Preparation WCB WCB Vials Vials T-Flask & Spinner Flask Culturing Inoculum Transfer Vessel Seed Seed Bioreactor Bioreactor Production Production Bioreactor Bioreactor Harvest Harvest 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 15 Weighing and Dispensing 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 16 Media and Buffer Preparation 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 17 Cell Culture: Seed Bioreactors WCB WCB Vials Vials T-Flask T-Flask & & Spinner Spinner Flask Flask Culturing Culturing Inoculum Inoculum Transfer Transfer Vessel Vessel Seed Bioreactors Production Production Bioreactor Bioreactor Seed Bioreactors Harvest Harvest 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 18 Cell Culture: Production Bioreactors WCB WCB Vials Vials 12,500 L Bioreactors (2 Floor) T-Flask T-Flask & & Spinner Spinner Flask Flask Culturing Culturing Inoculum Inoculum Transfer Transfer Vessel Vessel Seed Seed Bioreactor Bioreactor Production Bioreactors 12,500 L Bioreactor Sampling (1 Floor) Harvest Harvest 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 19 Harvest and Recovery WCB WCB Vials Vials Centrifuge T-Flask T-Flask & & Spinner Spinner Flask Flask Culturing Culturing Inoculum Inoculum Transfer Transfer Vessel Vessel Seed Seed Bioreactor Bioreactor Production Production Bioreactor Bioreactor Depth Filters Harvest and Recovery 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 20 Purification: Chromatography Chromatography Columns and Pumps 4 Chromatography Steps: - Diameters from 1.2 ~ 1.6 m 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 21 Purification: Ultrafiltration & Diafiltration TFF (Tangential Flow Filtration) Equipment 2 TFF Steps: - membrane areas 5 ~ 15 m2 11/08/2007 Confidential. Not to be copied, reproduced or redistributed. 22