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A P ROMISE A ND C OMMITMENT to deliver

MERCK SERONO APAC


CONTENTS 2

We are excited by the possibilities

4 8

Favourable healthcare and pharmaceutical policies accelerate high growth

9 12

High potential

We play a leading role in the therapy areas we operate in

18 19

Government policies and initiatives improve health care

Diversity delivers multiple growth prospects

14 15

A new era of high growth dawns across Asia Pacific

Helping families

Success stories


HOW DO WE bring a real difference to people’s lives? HOW CAN WE make our presence felt in emerging high-growth markets and deliver passionately? HOW DO WE positively impact health outcomes around the world?

PROVIDING ANSWERS to these questions represents the cornerstone of our achievements.


AT MERCK SERONO APAC, WE ARE EXCITED BY THE POSSIBILITIES WE SEE AROUND US. Diversity in terms of varying levels of market penetration and affordability, coupled with a rich mix of partnership opportunities. These trends accelerate healthcare industry growth in the APAC region, and we are happy to be a part of this story of optimism.

Tim Kneen Vice President – Asia Pacific

The Asia Pacific (APAC) region has emerged as one of the prominent centres of global economic growth, driven by growing population, rising middle class income, enabling government policies and focus on education and urbanisation. The natural consequence of such a scenario is an enhanced demand for advanced and affordable healthcare. Moreover, the APAC region presents a picture of diversity. 2

We are aware that APAC still has many unmet healthcare needs. As societies and lifestyles change, new ailments are being identified and treatment strategies are being sought. We are striving to facilitate access to quality and innovative medicines, so that patients and their families can lead better lives, away from the shadows of critical and life-altering conditions. We are leveraging the market potential with wider geographic presence and a mature portfolio based on our expertise in specialist therapeutic areas. Our experience drives positive health outcomes for our patients. We are Helping Families lead healthier lives. What is wellspring of our strength? It is our team - the confident and committed people who help us keep our commitments to society and stakeholders. At every step of the way, we are focusing on innovation to adapt to a fastchanging business scenario. We nurture

a culture of ownership, knowledge exchange and result orientation to build competencies across the board. We share best practices to create an ecosystem of effective decision-making. We believe in transparent communication, because transparency breeds trust, and trust creates the foundation for an organization that delivers. When we deliver, we fulfil a promise that better healthcare solutions are possible and affordable for people in need. We are responsible to patients, healthcare professionals, regulators, distributors, partners, regional colleagues and other interdependencies, who repose trust in our ability to bring a real difference to people’s lives. Across the pages, we have many success stories to share, and we expect to elevate the level of our performance even further...Its A Promise And Commitment to deliver greater results! Tim Kneen Vice President – Asia Pacific Merck Serono


VISION

MISSION

To be the market leading biopharmaceutical company in APAC dedicated to improving lives through innovation.

We partner with our global organization, our affiliates, and healthcare communities across APAC by delivering operational excellence by inspiring our colleagues and fostering a high performance culture

to drive broad access to quality, innovative medicines and tailoring solutions for patients and families. 3


A NEW ERA OF HIGH GROWTH DAWNS ACROSS ASIA PACIFIC

8 2

1

3

4 5

10 6 11 12 13 14

9 15

16

1. India, 2. Pakistan, 3. Sri Lanka, 4. Bangladesh, 5. Myanmar, 6. Laos, 7. Thailand, 8. South Korea, 9. Taiwan, 10. Hong Kong, 11. Vietnam, 12. Cambodia, 13. Malaysia, 14. Singapore, 15. Philippines 16. Indonesia

4


The reason for our optimism lies here The world’s most populous region, home to 1/3rd of the global population (2.3 billion people) 6.4% average annual growth rate forecasted between 2012 and 2016* Burgeoning working population Increasing Asian middle-class population - Emerging economies are expected

to reach 30% of global spending on medicines over the next five years**# Growing urbanisation and better education Governments are adopting favourable policies and initiatives towards healthcare improvement

APAC region promises immense potential

* Source: World Bank (2012) & IMF (2011) **Source: Frost and Sullivan Asia-Pacific Healthcare outlook report # Including China and Japan

5


APAC shows considerable economic stability

GDP Annual Percentage Changes (%)

10 8 6 4 2 0

2010 India

2011

2012e

2013f

APAC excl. China

World

Source: World Bank (2012)

Better healthcare affordability is made possible by growing young and working population Ratio of working-age to non-working population

3.0

South Asia Indonesia

WORKING-AGE POPULATION RATIO

Brazil China

2.5

Peak in SE Asia in 2020 (as represented by Indonesia)

2.0

Peak in South Asia in 2040

1.5

1.0

1950

1960 1970 1980

1990 2000 2010

2020 2030

2040 2050

Source: UN report (2010)

6


Growing urbanisation triggers higher healthcare demand 100

Percentage Urban Population 80

US

Western Europe

60

Brazil 40

Southeast Asia

India

20

Forecast 0

1950

1960

1970

1980

1990

2000

2010

2020

2030

2040

Source: “CEIC Data” company & The Economist (2011)

ANOTHER 250M PEOPLE IN CITIES BY 2025 SE Asia: 50% urban population in 2025 India: 50% urban population in 2045

HIGHER DEMAND FOR HEALTHCARE Increased awareness about health issues Better access to healthcare

7


FAVOURABLE HEALTHCARE AND PHARMACEUTICAL POLICIES IS ACCELERATING HIGH GROWTH Government policies and increased per capita health care expenditure across emerging economies are paving the way for stupendous growth across APAC vis-a-vis the world.

INDIA Foreign investment in health care reached US$ 630 MILLION in the first half of 2012, from US$ 181 million in 2011.

INDONESIA Integration of GOVERNMENT INSURANCE SCHEMES and universal health care by 2019.

MALAYSIA Expected to introduce national health - insurance system; US$ 3.5 BILLION government purchase of regional hospital chain.

VIETNAM UNIVERSAL HEALTH CARE coverage by 2014, with increased government funding.

Source: News Reports

8


SOUTH KOREA National health insurance (NHI) covered 96.3% of the population. A medical-aid programme exists for the remaining 3.7% of the population.

ASEAN COOPERATION: IMPROVING THE STANDARD OF THE HEALTH CARE PROVISIONS Regional harmonization of regulatory Professional standards in healthcare sector Free flow of services within the region

TAIWAN Over 90% of all healthcare facilities in Taiwan have contracts with the National Health Insurance programme and are reimbursed on a fee-for-service.

Harmonized educational and professional standards Regional accreditation system for quality hospitals

Source: News Reports

9


High growth rates in Health Care expenditure Large variance among markets, high growth potential of developing economics, especially in India, Malaysia and Indonesia. 2,500

14 11.6

2,093

2,000

9.8

9.5

1,553

1,500

8.1

7.4

1,000

9.0

8

6.4

4.9

6

5.8

5.3

519 109

107

96

29

Source: The Economist Intelligence Unit report (2012)

Pakistan

Thailand

Malaysia

Taiwan

South Korea

Singapore

Hong Kong

0

4 2

114

India

183

Vietnam

2.5

Indonesia

500

10

10

Philippines

US$/Capita

1,746

12

0

% Growth

2,161


APAC Pharmaceutical Market Outpaces the Global Market Growth

Annual Growth Rate

20% LatAM China 15% APAC 10% GLOBAL 5%

0%

US Japan Europe 2012

2013

2014

2015

2016

Data Source: IMS Prognosis, March 2012

11


DIVERSITY DELIVERS MULTIPLE GROWTH PROSPECTS Diversified market requirements, combined with low market penetration, varying affordability, increased funding and partnership opportunities will catalyse future industry growth.

Advanced Asia (KOREA, HONG KONG, TAIWAN, SINGAPORE)

Functional national health insurance schemes provide relatively comprehensive coverage for the majority of the population (Korea & Taiwan) High affordability level, hence high share of biotech products GDP/Capita US$ 31,220-59,710 (PPP) Health Care Expenditure/Capita US$ 1,553-2,161 Source: Frost and Sullivan Asia-Pacific Healthcare Outlook Report

12


South Asia (INDIA, PAKISTAN)

Health insurance schemes provide minimal benefits and only small population groups Low income level Yet high growth Generic products dominating the market GDP/Capita US$ 2,768 – 3,663 (PPP)

Source: Frost and Sullivan Asia-Pacific Healthcare Outlook Report

Health Care Expenditure/Capita US$ 29-96

South East Asia (INDONESIA, MALAYSIA, THAILAND, THE PHILIPPINES, VIETNAM)

Barring the Philippines, national health insurance schemes cover a subset of the population with non-comprehensive coverage Burgeoning middle class can afford branded general medicine products GDP/Capita US$ 3,359 – 16,240 (PPP) Health Care Expenditure/Capita US$ 107-519

Source: Frost and Sullivan Asia-Pacific Healthcare Outlook Report

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SHAKING HANDS WITH HIGH POTENTIAL COMMITTED TO DELIVER - MERCK SERONO APAC

BEATING INDUSTRY GROWTH

9% Market CAGR (2009 - 2012) Merck Serono is building on the APAC market potential with a wide presence across geographies, a balanced portfolio and talented teams. Ranked 13th among all multinational companies in APAC in 2011 Growing share of total company business (6% in 2012, estimated 8% in 2015 and 10% in 2018) Strong ability to grow innovative products and leverage mature portfolio Consistently growing faster than the market

14

14% M-S CAGR (2009 - 2012)

Merck Serono registered growth above APAC pharmaceutical market 2009 2012


APAC - WE PLAY A LEADING ROLE IN THE THERAPY AREAS WE OPERATE IN

Market leader in Fertility

Market leader in Growth Hormones therapy

Regional Leader in Colorectal / Head & Neck cancer

Market leader in thyroid diseases

The only first line therapy for treatment of Diabetes

Fastest growing Beta Blocker in many markets

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GEOGRAPHIC MIX, 2012 6.0% Vietnam

3.5% Singapore

BUSINESS MIX, 2012

2.6% Other (Expert Sales)

4.8% Hong Kong

20.5% Local GM

5.0% Others

13.7% Erbitux

19.5% India

5.6% Malaysia

14.6% Korea 5.8% Thailand

5.8% Philippines

6.1% Endocrine

8.4% Indonesia

10.4% Taiwan

12.6% Pakistan

67% of revenue from top 5 affiliates, led by India and Korea 16

11.5% Neurobion

12.4% CV

14.9% Diabetes

15.7% Fertility

General medicine products represent 64.3% and special product 35.7% of business


PEOPLE Diverse and stable team Talented, young, passionate and dedicated team of 2,800 members Motivated and cohesive leadership team Significant cross-country collaboration Proven track record of meeting and exceeding expectations

The strength of Merck Serono is our people and our continuous focus on operational excellence. 17


In Helping Families, central in our Asian societies, we are transforming medical science into solutions that make a difference to people’s lives

In Asia, Merck Serono is focussed on diseases with a high and growing prevalence in Asia including fertility disorders, cancer, cardiovascular disease and diabetes. We are investing in global research and development programs and are bringing high quality, new medicines to Asia; and are committed to helping families gain access to these medicines.

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SUCCESS STORIES

‘Nectar - improving multidisciplinary care of mCRC patients’

‘Starting Families Asia’, the largest fertility study in APAC

Merck Serono has established a long term partnership with surgical and oncological key thought leaders across APAC to create an Asian Network of multidisciplinary care Centers for mCRC. This program is known as the NECTAR and partners with Prof Rene Adam in France with links to his LiverMet registry. The aim is to improve multidisciplinary care across the region to optimise management of potentially resectable mCRC patients among surgeons & medical oncologists.

The study is commissioned by Merck Serono and is conducted in collaboration with one of Asia’s leading fertility experts, Professor P. C. Wong from the National University Hospital in Singapore (NUH). It reveals key insights on the barriers and critical knowledge gaps that impact women and families regarding their ability and decision-making skills to conceive and start families.

The NECTAR group will define treatment protocols for the management of liver metastatic mCRC, collect and publish Asian data on mCRC patients, drive further awareness and education across the region via high quality preceptorship and scientific educational programs.

A survey was conducted across 1,000 women in 10 countries, who were trying to conceive. The objective was to gather insights into contemporary decisionmaking, regarding child conception and the barriers women and couples face, when they seek medical help during infertility.

India starts DReAMing

Diabetes Mellitus Registry for Antidiabetic Medications (DReAM), India is an ongoing, systematic listing of individuals with Type 2 diabetes. It is an observational, prospective, multi-centric database, which focuses on generating data on the epidemiological profile, clinical characteristics, investigational features and management trend of diabetic patients across the country. Merck Serono expects the campaign to lead India to an improved management of diabetes. It will further strengthen the Company’s image as leaders in the diabetes segment.

The study was modelled on a similar study undertaken by Merck Serono in collaboration with Cardiff University in 2009-2010. 19


APAC LEADERSHIP

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Hong Kong

Malaysia

Taiwan

Merck Pharmaceutical (HK) Ltd. Room 2212, Paul Y Centre 51 Hung To Road, Kwun Tong Kowloon, Hong Kong

Merck Sdn. Bhd. Level 3 Menara Sunway Annexe, Jalan Lagoon Timur, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia

Merck Ltd. Taiwan 6F., No 89, Sec.2, Tiding Blvd., Neihu Dist., Taipei City 11493, Taiwan

Tel. No. +852-2389-6278

Tel. No. +886-2-2162-1111

Tel. No. +603-7494-3688

India

Pakistan

Thailand

Merck Limited Shiv Sagar Estate A Wing, Dr. Annie Besant Road, 7th Floor, Worli, Mumbai 400 018, India

Merck (Private) Ltd. D-7, Parveen Building, Shaheed-e-Millat Road, Karachi-75350. Pakistan

Merck Ltd. 622 Emporium Tower, 19th Floor Sukhumvit Rd., Klongton, Klongtoey, Bangkok 10110 / Thailand

Tel. No. +92-21-3455-9210

Tel. No. +91-22-6660-9000

Tel. No. +66-2-667-8000

Indonesia

Philippines

Vietnam

PT Merck TBK - Indonesia Perkantoran Hijau Arkadia, Tower F, 15th Floor, Jl. TB Simatupang Kav 88, Pasar Minggu, Jakarta 12520, Indonesia

Merck Inc. 24th Floor GT Tower International Building, 6813 Ayala Avenue cor HV dela Costa St. Salcedo Village, 1227 Makati City, Philippines

Merck Vietnam Representative Office 9th Floor, Centre Point Building, 106 Nguyen Van Troi Street, Phu Nhuan District, Ho Chi Minh City, Vietnam

Tel. No. +62-21-2856-5600

Tel. No. +63-2-815-4067

Tel. No. +84-8-3842-0100

Korea

Singapore

Merck Ltd. Korea 15FL, 942-10, Haesung 2 Bldg., Daechi 3-dong Kangnam-gu, Seoul 135-725, South Korea

Merck Pte Ltd. 3 International Business Park, #02-01 Nordic European Center Singapore 609927

Tel. No. +82-2-2185-3960

Tel. No. +65-6890-6638


www.merckserono.com


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