IQVIA-山东罗欣制药商业尽职调查报告

CDDonLuckyprojectFinalreportdeckpreparedbyIMSALLYBRIDGEGROUP(HK)LIMITEDContentLuckyoverviewLuckyportfolioassessmentCommercialassessmentR&D,BDcapabilityandpipelineassessmentSalesforecastALLYBRIDGEGROUP(HK)LIMITEDUnderthetideofreform,Luckyiskeepingover17%annualgrowthandreachedover4BnRMBrevenuein201620163.62.8201520144.12.22.520122013+17%Luckyhistoricalsalesperformance*Unit:Bn,RMBKeydriversPrecisepropositionanddifferentiationofproductportfolioSaleschannelexpansionSalesmodelupgradeR&DandBDenhancementAsalocalgenericpharmaco,Luckysuccessfullyinitiatedmanyactions,including:Notes:*IMShasvalidatedLucky’shistoricalsalesbyIMSCHPA,PTR,CHCdatabase,aswellas南方所databaseSource:Lucky’sinternaldataLuckydelivershighergrowththantotalhospitalmarket(12-16CAGR10%)ALLYBRIDGEGROUP(HK)LIMITEDLuckyisrecognizedastoplocalpharmacoswithdistinguishedanddiversifiedproductportfolioscoveringmultipleTAsUnit:Bn,RMBLuckyhasbeenexpandingtomulti-therapeuticareasfromtraditionalantibiotics20122.218%12%21%20142.813%30%41%50%100%OthersRespiratoryAlimentaryAntibiotics20164.123%12%35%30%16%12-16CAGR2%33%18%24%Rank5th,Luckyoutperformsmostofotherpharmacosapprovedclass3.1/3.2

newdrugsExclusiveindicationexpansionandcomprehensiveformulationProductdifferentiationbyR&DbreakthroughSource:Desktopresearch,Lucky’sinternaldata,IMSanalysisClass3.1/3.2newdrugswillenjoy3-4yearsprotectionandfavorablemarketaccesspolicy

Lanchuan®:ExclusiveindicationexpansionofstressulcerLuoxinjin®:ExclusiveformulationFullcoverageofdrugformulationandpackageExampleNotes:*TA=Therapeuticarea;1.LocalpharmacosarerankedbyChinaNationalPharmaceuticalIndustryInformationCenter

排名企业名称批准生产品种数量1正大天晴药业集团股份有限公司152扬子江药业集团10江苏豪森医药集团有限公司10鲁南制药集团股份有限公司103西藏海思科药业集团股份有限公司9江苏恒瑞医药股份有限公司94联邦制药国际控股有限公司7齐鲁制药有限公司7浙江海正药业股份有限公司7上海复兴医药（集团）股份有限公司7山东鲁抗医药股份有限公司75浙江京新药业股份有限公司5华邦颖泰股份有限公司5山东罗欣药业集团股份有限公司5上海医药集团股份有限公司52008-2015年3.1类新药获批生产最多的企业排名ALLYBRIDGEGROUP(HK)LIMITEDExtensiveaccesstohospitalthroughoptimizeddistributionmodelanddirectsalesmodelHospitalchannel(Mainchannel)3rdterminal(Expansion)KeyproductsDirectsalesSelf-recruitmentteamTransferredfromdistributorsDistributorsTraditionaldistributionmodelOptimizeddistributionmodelDirectsalesmodelButonlyfewkeyproductsexpandedto3rdterminalExtendslifecycleofmatureproductsGeneralmolecules/EDLDistributorsTraditionalmodelLuckysalesmodelbychannelandproductsContinuousenrichmentofdedicatedsalesteambyrecruitmentofexternaltalentsandmergingdistributorsTargetinghighvalue-addedproductsinalimentary,respiratoryandoncologyareasIncreasingcoverageoftoptierhospitalsinbigcitiesDirectsalesmodelPrecisiondistributorselection(精细化招商)

Upgradeofoptimizeddistributormanagement(经销商的优化管理)ParticipateontenderingprocessunderoptimizedmanagementOptimizeddistributionmodel

(优化的经销商模式)HospitalsalesmodelSource:Desktopresearch,Lucky’sinternaldata,EDL=essentialdruglistTopplayerin3rdterminalofLuckyALLYBRIDGEGROUP(HK)LIMITEDLuckypropheticallyestablished3rdterminalsalesteam,whichhelpsLuckysucceedtobetopbrandin3rdterminalUnificationofBasicMedicalInsurancebtwruralandurbanresidents(2016.1《国务院关于整合城乡居民基本医疗保险制度的意见》)Hierarchicalhealthsystem(2015.9《国务院办公厅关于推进分级诊疗制度建设的指导意见》)HospitalchanneldominantforLuckyproducts20162015-20162011Before2011Luckyinitiated3rdterminalexpansionSizable3rd

terminalsalesteamNow&futureHospitalchannelmainlyforkeyproducts3rdterminalisextendinglifecycleofmatureproductBytheendof2016,oneofthelargestdirectsalesteamestablishedRoadmapofLucky’s3rdterminalexpansionSource:Desktopresearch,CIinterview,Lucky’sinternaldata,南方所database~2,700salesrep.covering~3,000countyMarketleaderofwesterndrugsin3rdterminalby2016“DifferentfromRenhe@pharma,directsalesteamwillplaykeyrolein3rdterminalmarket.AndwedothinkLuckyhasoneofthelargestteamwith3Ksalesforce”——CIinterview排名

抗生素领域消化疾病领域1山东罗欣药业集团山东罗欣药业集团2西南药业金华康恩贝生物制药3哈药制药总厂江苏奥赛康药业4国药致君(深圳)制药成都天台山制药5白云山制药总厂辰欣药业2015乡镇卫生院化学药市场排名TwoR&DcenterslocatedinShanghaiandShandong6nationalnewdrugs(class3.1and3.2)and~313*

genericslaunched48genericpipelinecoveringAPIandkeyproductsALLYBRIDGEGROUP(HK)LIMITEDAsoneoftoplocalR&Dpharmacos,Luckyachievedgreatsuccesswithbalancingapproachforgeneric&innovativesSource:Desktopresearch,Lucky’sinternaldata,中国医药工业信息中心排名企业批件数量1江苏恒瑞医药462山东罗欣药业433江苏豪森药业334北京诺华制药315齐鲁制药302015Top5MNF*ofclinicaltrialsapprovalsLuckyranked6thoutoflocalpharmaceuticalsforR&DcapabilityGenericsInnovativedrugsShanghaiR&Dcenterbuiltin2014withover150researchersand100MnrmbofinvestmentCombinationofin-licenseandin-houseR&DMorethan7innovativepipelinestargetingdiseasesareasofoncology,alimentary,respiratory,cardiovascularNotes:*MNF=Manufacture；313genericsarecalculatedbyformulationBalancingapproachforgenericandinnovativedrugdevelopment排名企业1恒瑞医药2正大天晴3先声药业4浙江华海5江苏豪森6山东罗欣7齐鲁制药8绿叶制药9浙江海正10丽珠医药中国医药工业百强研发10强（2016）ALLYBRIDGEGROUP(HK)LIMITEDIntegratedmanufacturingcapabilityisdemonstratedbyhighstandardGMPcertifiedproductionlinesPrepareforGlobalExportAchievedGMPcertificationinJapanandKoreaPreparetoapplyEUGMPAchieved78%GMPpassrateforAPIs,whichishighestacrosslocalAPIsplayersHengxin*:GMPcertifiedAPIproductionlineHighQualityandEnvironmentalFriendlyProductionObtained44APIapprovalsranked18thnationwide43APIstosupport154*products’manufacturingOneplantforAPIproduction,includingpowderinjection,spray,liquidinjection,chemicalsandcephalosporin'sAPIsUpgradingAPIProduction,EnhancingProfitabilityAPIProductionGlobalGMPCertificationLocalGMPCertificationSource:Desktopresearch,Lucky’sinternaldata,IMSanalysisNotes:*Hengxinisa

wellestablishedAPIplant;154productsarecalculatedbyformulationALLYBRIDGEGROUP(HK)LIMITEDBy2021,Lucky’srevenueisexpectedtokeepincreasingwith16%CAGRinbasecaseand20%CAGRinhighcase20153.620143.610.72.9+10%+20%202414.32.5202213.320239.711.52.111.8201710.38.61.720208.87.71.120197.26.60.620182.920133.20.14.74.120164.85.50.320215.920122.92.92.94.13.2Luckysalesrevenueforecast(2017-2024)*Unit:Bn,RMBHighcase

16-21CAGR:20%Basecase

16-21CAGR:16%KeyforecastperiodNotes:*2022-2024forecastresultistrendedbasedonallforeseenfactorsof2017-2021growth,butIMSdoesnotguaranteeallcompetition,relatedpolicyandLucky’sportfolioarepredictableSource:Lucky’sinternaldata,IMSanalysisKeydifferencebtwbasevs.highcase1)Progressoftendering(incl.pricecut);2)reimb.enlistmentforkeyproductsLucky’spromotioninvestmentandbrandawarenessinhospitalchanneland3rdterminalALLYBRIDGEGROUP(HK)LIMITEDLucky’shighgrowthisdrivenbyfourkeyfactors,includingportfolio,channel,salesmodelandR&DdevelopmentProductportfoliodevelopmentDrugdistributionchannelcoverageSalesmodeltransformationR&DandBDenhancementKeydriversKeyproductsGeneralproductsFavorablepolicyofmarketaccessanddifferentiatedcompetitionthrough“exclusive”superiorityExclusiveindication,eg.Lanchuan®Superiorposition,eg.Kapeilai®,LXJ®,KalunXi®Matureproductswillbegraduallyshiftedto3rdterminalsfromhospitalchannelProductivity/capitawillincreaseas3rdterminalsalesteamgrowingDirectsalesteamexpansionMoreprecisionmanagementofdistributorsDirectsalesteampenetrationin3rdterminalsDistributorssalesmodelGenericpipelinewithhighvalue-addedInnovativedrugslaunchGenericpipelineCommongenerics,facingfiercecompetitionMainlythroughhospitalchannelSource:Lucky’sinternaldata,IMSanalysisNotes:*Lanchuan®=brandnameofLansoprazoleinjection;Kapeilai®=brandnameofRebaprazoleinjection;LXJ®=brandnameofRoxithromycinandAmbroxolcombo;Kalunxi®=brandnameofCafezedoneinjection

ALLYBRIDGEGROUP(HK)LIMITEDMeanwhile,manyrisksanduncertaintieslieinmarketaccessprogress,pipelinelaunchtimelineandetc.Industryrelatedrisks,whichwillinfluenceallpharmacosLucky-specificuncertaintiesTenderingprogressforrecentlylaunchedkeyproductsduetotenderingtimewindowsReimbursementenlistmentprogressforkeyproductsoutof2017NRDLPricecutforkeyproductsinnextroundtendering,butLuckyiscapabletomaintainpricebyproductdifferentiationDistributormodelimpactedby“Twoinvoice”policyMarketaccessprogressR&DpipelineLaunchtimelineforgenericsandinnovativedrugsTimelineandpolicyrelatedtoQualityConsistencyEvaluationforinjectionsBrandpromotionInhospitalchannel,directsalesteamexpansionprogressandpromotionIn3rdterminal,dedicatedsalesteampromotionKeyuncertaintiesforLuckyALLYBRIDGEGROUP(HK)LIMITEDContentLuckyoverviewLuckyportfolioassessmentOverviewAlimentarydiseaseareaRespiratorydiseaseareaAntibioticsareaCommercialassessmentR&D,BDcapabilityandpipelineassessmentSalesforecastALLYBRIDGEGROUP(HK)LIMITEDAllthekeyproductsofLuckyshowscompetitiveadvantageandenjoyshighmarketgrowthAlimentaryRespiratoryAntibioticsTotalmarketHighgrowthAsanewcompound,veryhighgrowthKeyproductCompetitiveadvantageUncertaintyLanchuan®(Lansoprazole)Kapeilai®(Rabeprazole)Luoxinjin®(CompoundofAmbroxolandRoxithromycin)MeropenemKalunxi®(Cefazedone)Cefoperazone+TazobactamAsanewmolecule,veryhighgrowthHighgrowthasadvancedABXHighgrowthasanewmoleculeHighgrowthasadvancedcephalosporinLucky:Exclusiveindicationwithclass3.4newdrugsLucky:classof3.1newdrugswithhigherpriceandfavorablecompetitionenvironmentLesscompetitorspressureLucky:perceivedas1stproductpassingQCEMildcompetitionenvironmentMildcompetitionenvironmentPricecutinnextroundoftenderingPRDLexpansionprogressandnon-hospitalchannelcompetitionPRDLexpansionprogressPolicydynamiconQCEPRDLexpansionTenderingpolicyoncompoundStrengthSource:IMSAnalysisNotes:HighgrowthoftotalmarketmeansLucky’stargetmoleculegrowthishigherthanaverageMOAmarketgrowthImportanceLowHighALLYBRIDGEGROUP(HK)LIMITEDBasedonIMSforecast,allkeyproductsareexpectedtohaveapromisinggrowth,whichishigherthantotalmarketAlimentaryRespiratoryAntibioticsTotalmarket16-21CAGRKeyproductLanchuan®(Lansoprazole)Kapeilai®(Rabeprazole)Luoxinjin®(CompoundofAmbroxolandRoxithromycin)MeropenemKalunxi®(Cefazedone)Cefoperazone+TazobactamProduct2016revenue1Product2021revenue2Product16-21CAGRNote:1.Unit:MnRMB;2.Unit:MnRMB,inbasecase.Source:Lucky’sinternaldata,IMSanalysis9751,81113.3%5260163.4%5727536.9%-3774934247.3%-30317~19:153%,19~21:63%11.3%49.8%35.9%13.4%27.8%16.1%17~19:102%,19~21:27%ALLYBRIDGEGROUP(HK)LIMITEDContentLuckyoverviewLuckyportfolioassessmentOverviewAlimentarydiseaseareaRespiratorydiseaseareaAntibioticsareaCommercialassessmentR&D,BDcapabilityandpipelineassessmentSalesforecast37%201211.317%5%6%23%39%32%29%35%27%7%2%16.220162015201313.330%37%0%25%7%15.0201430%26%Rabeprazole7%0%15.5Omeprazole

38%LansoprazoleEsomeprazole+9%41%PantoprazoleALLYBRIDGEGROUP(HK)LIMITEDPPI*injectionmarket,whereLuckyhasafullportfolio,iskeeping~10%ofgrowthdrivenbynewgenerationPPIPPIinjectionsalesvaluebymoleculeinhospitalmarketMoleculeLaunchYear20082014200120081990No.ofActiveMNFs133631376CAGR(12-16)Source:IMSCHPA,Desktopresearch,CIinterview,IMSAnalysisAlimentaryRespiratoryAntibiotics

Lucky’sfootprintandbrandrankingLaunchedin2015,No.3Launchedin2010,No.2

Tobelaunchedin2019Launchedin2007Launchedin2005(Unit:BnRMB,hospitallistingprice)NewgenerationofPPITraditionalgenerationofPPIExceptforEsomeprazoleinpipeline,LuckylaunchedallPPIinjectionproductsNotes:*PPI=

ProtonPumpInhibitor;MNF=Manufacturer,Launchyearisderivedfromapprovalnumber(国药准字)+3%+5%+22%+19%N/AALLYBRIDGEGROUP(HK)LIMITEDLeveragingitsinnovationandpromotion,LuckyiswellpositionedtostrengthenitsmarketpositionStrengthRiskComprehensivePPIportfoliocoveringtraditionalandnewgenerationPPIHighgrowthofnewgenerationPPISeveralnationalandprovincialawardstocertifyLucky’sinnovativeabilityFavorablecompetitiveenvironmentforrabeprazoleinjectionGrowthofKapeilai®(rabeprazole)ishighlydependentonPRDLenlistment,whichiscriticaltoboostvolumegrowthPricecutuncertaintyofLanchuan®duetotenderingpressureDescriptionSource:IMSAnalysisAlimentaryRespiratoryAntibioticsNotes:*PPI=

ProtonPumpInhibitorImportanceImportanceLowHighALLYBRIDGEGROUP(HK)LIMITEDAsanewgenerationofPPI,Lansoprazoleinjectionmarketkeepshighergrowthandisdominatedby3localplayersAlllansoprazoleinjectioninmarketareproducedby

local

manufacturersThreemajorplayers

(Aosaikang1,LuckyandYouCare2)dominatethemarketandmaintainover80%marketshareintotal13manufacturersTherearethreelocalgenericpipelines,whichwillbelaunchedin2017-2018LansoprazoleInjectionmarketdynamicinhospital(value)28%49%27%20%20%20125%1.9Lanchuan®Lucky

+27%YouCare

+20%Others

+68%45%Aosaikang

+11%38%201431%12%4.0201534%32%19%4.316%2016+22%21%21%6%3.1201344%27%8%3.8Severecompetitioninlansoprazoleinjectionmarketresultsincontinual-decliningprice(average)intendering#ofMNFs4771113AlimentaryRespiratoryAntibiotics(Unit:BnRMB,hospitallistingprice)CompetitionLandscapePriceTrendMNF12-16CAGRSource:IMSCHPA,Desktopresearch,CIinterview,IMSAnalysisNotes:1:Aosaikang

（奥赛康);2:YouCare（悦康）ALLYBRIDGEGROUP(HK)LIMITEDLanchuan®outperformsthemarketwith“exclusive”sellingpointsWideacceptanceinclinicalpracticebecause,Lanchuan®achievedseveralnationalandprovincialawardstohighlightitshighqualityandinnovationObtained“Type3.4newdrug”statusforitsexclusiveindicationonstressulcermakesLanchuan®outstandingamongotherproductsSeparategroupontenderingallowsLanchuan®tomaintainpricingandhospitalaccessadvantageComparedwithAosaikang(lansoprazole),Lanchuan®maintainedhigherpriceinnationalwidewithlesspricecutinthelatesttenderingUnit:%Lansoprazoleinjection22%PPIinjection9%18%Lanchuan27%“Exclusive”superiorityofLuckySource:IMSCHPA,Lucky’sinternaldata,Desktopresearch,IMSAnalysis*Notes:differencesofpricebetweentwotenderingroundLanchuan®showsbetterpricestabilitythan

Aosaikang2012-2016CAGRcomparisonacrossdifferentmarketsNationalaverageprice,RMB/vial-15%Aosaikang-27%Lanchuan®LuckyUpdateTenderingPriceLastTenderingPriceALLYBRIDGEGROUP(HK)LIMITEDFastgrowingmarketandlesscompetitorsprovideLuckyopportunitytoexpandintorabeprazolemarket14-16RabeprazoleInjectionHospitalSalesValueLessplayerswithrelativelylesspressureofpricingRabeprazolerevealsrobustgrowingtrendsinceitlaunchedin2014Similartothelandscapeoflansoprazole,themarketisdominatedbythreemanufacturersandChangao,asfirstgeneric,quicklycapturedmostmarketshareLessplayersbringlesscompetitionandpricingpressureRabeprazoleinjectionisnotlistedinNRDLwhichhinderitsadoptioninnationalwidePRDLlistingisstillpromisingforallmanufacturestocapturethemarket+2,704%2016254.820%16%64%201541.91%2%96%20140.3100%AosaikangNJ.ChangaoLuoxinAlimentaryRespiratoryAntibiotics(Unit:MnRMB,hospitallistingprice)Source:IMSCHPA,Desktopresearch,CIinterview,IMSAnalysisALLYBRIDGEGROUP(HK)LIMITEDDespiteAosaikanghasbeenmarketleaderovertheyears,LuckymanagestorapidlytakemarketshareCompanyOverviewVSStrongPPIinjectionproductportfolioFullPPIportfoliowithbothoralandinjectionMajorlocalPPImanufacturerWentpublicin2005(HK8058)InnovativeandawardedSource:IMSCHPA,interview,IMSAnalysisAlimentaryRespiratoryAntibioticsCasestudy7.7%8.1%8.4%2016201515.5%201214.5%6.0%7.4%15.4%15.7%201416.3%2013LuckyAosaikangLargestlocalPPImanufacturerPrivatecompanybutfailedtoIPOin2014(Valueshare%,hospitalmarket)TotalPPIPortfolioCompetitioninHospital(Aosaikangvs.Lucky)SalesValueCAGR20%12%InjectionOmeprazolePantoprazoleLansoprazoleRabeprazoleEsomeprazoleInjectionOmeprazolePantoprazoleLansoprazoleRabeprazoleOralOmeprazolePantoprazoleLansoprazoleNo.1No.3RankingNo.2-AstraZenecaQualityandindication:BothAosaikangandLuckysetLanprazoleastheirstrategicemphasisbutLanchuan®hasqualityandindicationstrengthsintenderingandclinicalpracticeBroadmarketopportunity:LuckyisdedicatedindevelopingcountylevelhospitalandbroadmarketLansoprazole(launchedin2008)Marketleaderwith2012-2016CAGR11%GraduallyreducepromotioninvestmentOmeprazoleInjection(launchedin1997)Rabeprazole(launchedin2015):First3genericsLanchuan®(Lansoprazolelaunchedin2007)Robustgrowth:2012-2016CAGR27%(higherthanAosaikang)Developednewindicationsin2014,includingstressulcerOmeprazoleInjection(launchedin2005):replacedbyLansoprazoleRabeprazole(launchedin2015):first3genericsinmarketALLYBRIDGEGROUP(HK)LIMITEDLucky’sdifferentiatedmarketingstrategyfuelsitsgrowthtogainopportunitiestoexpandCommercialStrategyFocusonLevelIIandabovehospitalsindevelopedcitiesStrategicemphasisLucky’sStrengthSource:IMSCHPA,interview,IMSAnalysisAlimentaryRespiratoryAntibiotics201632%34%201531%38%201427%44%201328%45%201227%49%AosaikangLuckyCasestudyKeyProductAnalysisNo.1No.2RankingLansoprazoleinjectionhospitalmarketshare(Aosaikangvs.Lucky)ALLYBRIDGEGROUP(HK)LIMITEDContentLuckyoverviewLuckyportfolioassessmentOverviewAlimentarydiseaseareaRespiratorydiseaseareaAntibioticsareaCommercialassessmentR&D,BDcapabilityandpipelineassessmentSalesforecast6.375%20156.725%+7%20165.120%80%25%75%20146.023%77%20135.422%78%2012Oral

+14%Injection

+5%ALLYBRIDGEGROUP(HK)LIMITEDExpectorantmarketiskeeping~7%growthandLuckyhascoveredbothoralandinjectionformulationCAGR(12-16)Source:IMSCHPA,IMSAnalysisAlimentaryRespiratoryAntibiotics(Unit:BnRMB,hospitallistingprice)Notes:RoxithromycinandAmbroxolcombowillbeabbreviatedtoA+RExpectorantmarketkeepshighgrowthledbyoralformulationLuckyhascoveredbothoralandinjectionexpectorantdrugsDriversIncreasingprevalenceoftargeteddiseasesIncreasingincidenceofrespiratorydiseasescausedbypoorairqualityOralAmbroxolHydrochlorideTabletsRoxithromycinAmbroxolcombo1(A+R)TabletsInjectionAmbroxolHydrochlorideInjectionAmbroxolHydrochlorideDryLucky’sproductportfolioinexpectorantmarketKeyproductfornext5yrsALLYBRIDGEGROUP(HK)LIMITEDLXJ®1showsadvantagesonMoA*,competitiveposition,marketaccess,whilefacesuncertaintyonPRDLenlistmentStrengthRisksDescriptionsImportanceA+RmarketispromisingforitsnovelMoAwithbetterefficacyandcomplianceLesscompetitionpressureasonlytwoplayersinthismarketProductsynergyfromambroxalanddirectsalesmodelwillhelpLXJ®penetrateintohospitalchannelrapidlyLuckyenjoysprivilegemarketaccessastype3.2newdrugLXJ®haslimitedpossibilitytobelistedintoNRDLinnext5yrs,whilestillhasuncertaintyofPRDLenlistmentprogressCompetitionlandscapeinnon-hospitalchannelisuncertainastheonlycompetitor(ZKSE2)willenterthismarketanytimeNote:*MoA=mechanismofaction;1.Luoxinjin®willbeabbreviatedtoLXJ,whichisthebrandnameofA+R;2.ZKSE=ZhenKeShuEr,whichisanotherbrandofA+ZAlimentaryRespiratoryAntibioticsImportanceLowHighA+Rmarketgrewat67%CAGRinpast5yearsoutpacedthewholeexpectorantmarketALLYBRIDGEGROUP(HK)LIMITEDA+Rhasbeenshowingrobustgrowthinrecentyearsduetoitsnovelmechanism282012234410%90%2013201445%16255%38%62%20152016180Non-hospital

+290%Hospital

+48%+67%Note:1.A&R=AmbroxolandroxithromycinaretakingseparatelySource:IMSCHPA&Midasdata,KOLandphysiciansinterview,DesktopresearchA+RisrecognizedasanovelMoAwithbetterefficacyandcomplianceEfficacyComplianceA+RAmbroxolA&R1RationaleCAGRUnit:MnRMB,ex-MNFpriceEfficacysynergyisobservedforcomboofroxithromycinandambroxolintermsofanti-bacteriaandexpectorantBettercomplianceforpatientstakingcompoundthanseparatedosageAlimentaryRespiratoryAntibioticsPoorExcellentALLYBRIDGEGROUP(HK)LIMITEDInthismarket,thereareonlytwoplayerswithZKSE®dominatinginhospitalswhileLXJ®innon-hospitalchannel2015100%0%100%2014ZKSE2016100%5%96%100%0%100%LXJZKSE®dominateshospitalchannelduetoitsfirstmoveradvantage…whileLXJ®currentlydominatesnon-hospitalchannelandstrategicallyexpandsintohospitalchannelRationaleZKSE®isthefirstA+RproductinChinaMainly

focusonhospitalchannel15%2015LXJ100%85%100%ZKSE201690%11%2014100%0%100%Marketshareinhospitalchannel,%Marketshareinnon-hospitalchannel,%RationaleLucky’sproductlaunchedsecondlyShiftitsfocusfromnon-hospitalchanneltohospitalchannelSource:IMSCHPA&MIDASdata,CIinterview,LuckyinternalinterviewAlimentaryRespiratoryAntibioticsALLYBRIDGEGROUP(HK)LIMITEDProductsynergyfromambroxalanddirectsalesmodelwillhelpLXJ®penetrateintohospitalchannelSynergyfromLucky’sambroxolinchannelandpromotionDedicatedteamengagedinacademicpromotion202020182019+19%20212017LuckyisestablishingitsownsalesforceinrespiratoryareaDistributorsalesmodelwillbekeptforZKSEinnext3~5years“Wewillstilldistributeourproductsmainlythroughagentsandarelookingforwidercoveragebyrecruitingmoreagents.

Thereisnoplanforconstructionofhospitalsalesteams.”----ZKSECommercialManagerLucky’sambroxolhascoveredmostofprovincesinChinawithdeeppenetrationinhospitals“LXJisanicedrugwithbetterefficacyandsafety,comparedwithotherexpectorant.Butcurrently,fewphysiciansrecognizeitsclinicalvalueduetolimitedpromotion.ButLucky’sproductistrustworthybasedonitswellreputationonAmbroxol”----PhysicianofaTertiaryHospitalLuckyhasestablishedcorporateimagebypromotionofambroxolSalesforceexpansionplaninrespiratoryareaSource:KOLinterview,CIinterview,LuckyinternaldataAlimentaryRespiratoryAntibioticsUnit:ppl.ALLYBRIDGEGROUP(HK)LIMITEDLXJ®enjoysprivilegeintenderingduetoitsuniqueformulationandinnovativeawardExclusiveformulationandapprovedasclass3.2newdrug…thus,ithasprivilegeintenderingasaseparategroup5provinceshavecompletedtenderinginthisroundandLXJhaswonthebiddingin3of55100%NotwinLXJWinthebiddingHighertenderingpricethanZKSE®Tenderpricecomparison,RMBSource:Desktopresearch,Insightdatabase,

IMSanalysis+22.1%ShanXiGuangXi+9.8%LXJZKSEAlimentaryRespiratoryAntibioticsLXJ®enjoysexclusiveformulationLXJ®

isintabletformulation,whileZKSE®isformulatedindispersibletabletLXJ®hasgottheapprovaloftype3.2newdrugwith3yearsofprotectionperiodtill2017ALLYBRIDGEGROUP(HK)LIMITEDHowever,adoptionofA+RmarkethighlydependsonprovincialreimbursementlistingandcompetitiondynamicFuturePRDLenlistmentprogressremainsuncertainInnon-hospitalchannel,competitionlandscapealsoshowssuchuncertaintyUncertain-tiesofNRDLlistingHighuncertain-tyofPRDLprogress+23%2021195201668EstimatedsalesforecastofA+Rinnon-hospitalchannel“Retailchannelislimited,whichismainlyconsistofveryfewpharmacies.Ifretailchannelsalesgrow,wewillconsiderfurtherretailchannelconstruction”----ZKSECommercialManagerSource:Governmentofficerinterview,physicianinterview,CIinterview,IMSanalysisA+Ranticipatesarobustgrowthinnextfewyearsinnon-hospitalchannelZKSE®isalsoaimingtoexpandinnon-hospitalchannelAlimentaryRespiratoryAntibioticsUnit:Mn

RMB,Ex-MNFprice“There’reuncertaintiesonPRDLlisting.First,eachprovincehasdifferentperiodtoupdate,somenewdrugsmightmissthiswindow.Second,someprovincesdon’thaveenoughbudgettocoverdrugsthatdon’thaveclinicalrecognition”----GovernmentOfficerLowpossibilityforA+RtobeinclusiveinNRDLinnext5yrsCurrentlylimitedrecognitionfromphysiciansPriceofA+Ris5timeshigherthanA&R,whichwillincreaseburdenofhealthinsuranceUnpredictablePRDLenlistmentprogressALLYBRIDGEGROUP(HK)LIMITEDContentLuckyoverviewLuckyportfolioassessmentOverviewAlimentarydiseaseareaRespiratorydiseaseareaAntibioticsareaCommercialassessmentR&D,BDcapabilityandpipelineassessmentSalesforecastOverallantibioticsmarketgrowthwasslowingdownsincerestrictiononantibioticswasreleasedAntibioticsmarketdynamicinhospitalchannel(2005~2016)20063179732010201249200869+15%8420162014+4%Unit:BnRMB,hospitallistingpricePolicyonRestrictiononAntibioticsreleasedRestrictiononantibiotics(限抗令)Source:IMSCHPA,IMSMidas,Desktopresearch,IMSAnalysisAlimentaryRespiratoryAntibioticsHospitallis