Topics: The R&D Innovation Model Botanical Drug / Traditional Chinese Medicine (TCM)

1. 3rd International Congress on Nutrition, Fitness and HealthInnovation in Healthcare –an Industry (Roche) PerspectiveAndreas TschirkyShanghai December 4, 2008

2. r • Topics: • The R&D Innovation Model • Botanical Drug /Traditional Chinese Medicine (TCM) • Quality Assurance

3. r Intensifying challenges in the Healthcare industry Political environment Healthcare budgets squeezed Growing safety requirements Medical need grows faster than healthcare budgets Access New competitors Declining R&D productivity Declining growth rate in traditional markets Patients Needs Patent expiries

4. r R547 solid tumors R435 Avastin - glioblastoma R105 MabThera – CLL 1st line R340 Xeloda – mCRC combo 1st line R1530 solid tumors R435 Avastin - NSCLC squamous R105 MabThera – CLL relapsed R340 Xeloda–mCRC combo 2nd line R4733 solid tumors R435 Avastin - NSCLC mCNS treat. R105 MabThera – iNHL maint. 1st line R435 1 Avastin – RCC R7112 oncology R1273 pertuzumab – EBC HER2+ R105 MabThera + Avastin – NHL aggr. R1569 Actemra - RA R7159 NHL R1273 pertuzumab – ovarian cancer R340 Xeloda - adj. CC combo oxaliplatin CHU Antevas – subarach. haemorr. R7167 solid tumors R1415+R435 Tarceva + Avastin – NSCLC 1st line R340 Xeloda – adj. CC combo Avastin R7204 malignant melanoma R1507 Ewing‘s sarcoma R340 Xeloda – adj. BC GEN anti-cMET – cancer therapy R3502 T-DM1 - mBC R435 Avastin - adj. CC GEN hedgehog ant. – solid tumors GEN CD40 Ab – diff. large B Cell lymph. R435 Avastin – prostate cancer GEN anti-CD20 3rd gen. – hem. malig. GEN Apomab - sarcoma R435 Avastin – pancreatic cancer GEN IAP ant. – cancer therapy GEN Apomab - cancer R435 Avastin – ovarian cancer 1st line lineadj. rectal cancer GEN MEK inh. – cancer therapy GEN Apo2L/TRAIL - cancer R435 Avastin - mBC combo Taxot. 1st line GEN ABT-263–solid tumors & hem. malig. GEN ABT-869 – solid tumors R435 Avastin–mBC combo std. chem. 1st l. GEN PI3 kinase inhibitor – cancer therapy GEN Avastin – extensive SCLC R435 Avastin – mBC combo Hercept. 1st. l. GEN CD40 Ab – NHL/MM/rel.large B-CL GEN Avastin - relapsed MM R435 Avastin – adj. NSCLC CHU CRC ARQ solid tumors R435 Avastin – m. gastric cancer R1646 pain R667 RAR gamma - emphysema R435 Avastin – adj. BC HER2- R1671 asthma R3421 PNP inh. – AI / transplant R597 Herceptin –m. gastric cancer HER2+ R3477 autoimmune diseases GEN Raptiva - renal transplant R1273 pertuzumab – mBC Her2+ R4930 OX40L - asthma ISO renal transplant R1415 Tarceva – NSCLC maint 1st line R7103 COPD R1626 HCV pol - HCV R1415 Tarceva – adj. NSCLC R7277 RA R3484 HPV16 – cervical neoplasia R1415+R435 Tarceva+Avastin–NSCLC maint.1st l. GEN IFN-alpha Ab - SLE R1439 aleglitazar – type 2 diabetes R1415+R435 Tarceva + Avastin – NSCLC 2nd line GEN Anti-IL 13 - asthma R1579 DPP-IV (3) – type 2 diabetes GEN Avastin – ovarian cancer 2nd line BTI VAP-1 – inflammatory diseases R1583 GLP1 - type 2 diabetes GEN Avastin – GIST recurr. R7128 HCV R1594 ocrelizumab – RRMS GEN Avastin – adj. rectal cancer R7227 HCV R1678 schizophrenia GEN Avastin – mBC 2nd line CHU HCV MEM Alzheimer‘s / schizophrenia GEN Avastin – high risk carcinoid R1511 type 2 diabetes R744 CERA – chemo induced anaemia R99 CellCept – pemphigus vulgaris R1512 PVD R105 MabThera – RA DMARD IR CHU gastroparesis / IBS R1569 Actemra – sJIA R1663 anticoagulant R4929 type 2 diabetes R1594 ocrelizumab - RA R7201 type 2 diabetes R1594 ocrelizumab – SLE / LN R7232 dyslipidemia CHU ED-71 – osteoporosis R7234 type 2 diabetes GEN MabThera – lupus nephritis GEN Anti-oxLDL sec. prev CV events GEN MabThera – ANCA ass. vascul. GEN MabThera – SLE R1295 MS R1450 Alzheimer‘s GEN Xolair – pediatric asthma R4996 Alzheimer‘s R127 Valcyte – CMV extension R1658 1 CETP inh. - dyslipidemia GEN MabThera – PPMS GEN TNKase – catheter clearance GEN Lucentis – diabetic macular edema GEN Lucentis – renital vein occlusion CHU Epogin – chemo induced anaemia Roche R&D pipeline today Phase II - (18 NMEs + 12 AIs) Phase III - (4 NMEs + 41 AIs) Registration - (2 NMEs + 3 AIs) Phase I - (38 NMEs + 1 AI) Notes 1 Approved in EU, US to file in 2008 Additional Indication NME DBA Oncology DBA Inflammation DBA Virology DBA Metabolic DBA CNS Others Roche managed R-No. Genentech managed GEN Chugai managed CHU ArQule opt-in ARQ BioTie opt-in BTI Memory opt-in MEM Isotechnika opt-in ISO Status as of March 31, 2008 RMT presentation August 2004

5. r Current R&D Model at Roche Disease Biology Areas (DBAs) Idea Market • Integrate exploratory development expertise in cross-functional projects • Deliver translational medicine approaches to select high-quality compounds for full development • Apply and implement better-profiled and differentiated molecules in late-stage development DBA Oncology DBLT DBA Metabolic DBLT DBA CNS DBLT DBA Inflammatory DBLT DBA Viral DBLT

6. r Starting point: the Medical Needs in China Basic Medical care Needs for Chinese People • Huge population (1.3 Billion) • From 10% to 80% healthcare insurance coverage within 11th 5 Year State Plan • 3000 pharmaceutical companies produce generic and TCM based drugs • Product Quality New Medicine for Emerging Diseases • 20 % population will become affluent in 2015 • Cancer, Obesity and Type 2 Diabetes, Viral Diseases • Alzheimer Disease, Cardio-vascular Diseases

7. New Early Early Development New Medicine Target Lead Lead Lead EIH Clinical Clinical Portfolio Phase Phase Medicine Proposal Validation Identification Dev. Optimization Enabling Safety Efficacy Preparation II III Launched Proposal MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MedSch Hospital China Pharma Diseases projects CN Academic FTIM POC Ro/Rw Leads Targets China Biotech CRO Assays r Change the way of doing drug discovery • One size fit all and do it all internally • Extrapolation from test tubes to cells to animal to human • Fix defects vs select the best Drug Discovery Project Teams The purpose of drug discovery is to help our patients to live their lives and improve the quality of their lives. Drug Discovery will lose its drive when we lost our sight on patients.

8. New Early Early Development New Medicine Medicine Target Lead Lead Lead EIH Clinical Clinical Portfolio Phase Phase Proposal Validation Identification Dev. Optimization Enabling Safety Efficacy Preparation II III Launched Proposal MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE r RRDCC – A Novel Model for Drug Discovery Management Model that captures the Best of Both Worlds External research • RRDCC Model: • Core Competencies • In-house • Strong external Network • >50% of Research work • conducted externally (at • CROs, Biotechs and • Hospitals • Traditional Innovation Model: • Comprehensive Setup • Limited Flexibility • Majority are fixed costs • (>90%) Internal research Management Model that captures the Best of Both Worlds: All of the advantages of being “Biotech-Like” a. Highly focused and in house expertise b. Rapid decision making to drive quality and value c. Strong common sense of purpose d. Avenue for growth expanding globally e. Empowerment All of the benefits of being a part of a global R&D organization: a. Information and Knowledge b. Access to expertise c. Common standards and best practices d. Budget

9. ● Oncology ● Virology ● Metabolic Disease r Reach out to China Basic Research Groups Our analysis lead to a conclusion that active drug discovery efforts in China are focused on Oncology, Virology and Metabolic Disease Bohai Zone Yangtze Delta Zhujiang Delta

10. Responders Responders Non-Responders Non-Responders Adverse Drug Events Adverse Drug Events r Individualized Medicine A drug does not work in every patientsEfficacy rate ranging from 25-80% A Now we look closer to patient differentiation => Individualized Medicine Molecular Diagnosis B C

11. r A growing Need for a range of Healthcare solutions Medical therapies Consultation with the medical community: Patient focus Self testing: Prevention Diagnostics: Predisposition Prescriptions & consumption of drugs: Reimbursement and Product Distribution Research activities RMT presentation August 2004

12. r • Topics: • The R&D Innovation Model • Botanical Drug / Traditional Chinese Medicine (TCM) • Quality Assurance

13. r The Botanical Drug / TCM in Drug Discovery • Veregen , Sinecatechins, Treatment for Genital Warts and Inflammatory etc., Polyphenon Pharma (Originator) • NIX-0699, Multi-herbals, Sickle Cell Anemia, National Inst. Pharm. Res. and Develop. (Originator) • THC-CBD, Cannabinoids Herbals, Inflammatory Bowel Disease etc., Bayer GW Pharmaceuticals (Originator) • Piceid Polydatin Resveratrol-O3'-glucoside, Antiinfectives, Shanghai Amadis Bio-Technology etc. • HMPL-002, Radiosensitizers, Hutchison China MediTech (Originator) • PHY-X, Hemorrhagic Stroke, PhytoCeutica (Originator) • PLT-732, Lipoprotein Disorders, Gene Smarth Health (Originator) • QR-440, QR-443, QR-449, Antiarthritic Drugs, Type 2 Diabetes, Quigley Pharma (Originator) PMI-001, Rheumatoid Arthritis, Phytomedics (Originator) Search from http://integrity.prous.com

14. r Natural Products in Roche Globally, Roche screening library (synthetic compounds) has passed the "magic" line of 1 million compounds in October, 2007! Locally in Chugai, Natural Products screening library (extracts and isolated compounds) has passed the line of 100K samples in September, 2007 99,533 samples as of Sept. 2008

15. r Exploration of TCM with Modern Science and Technology Traditional Usage Current Research Drug Discovery

16. r TCM at RRDCC Natural product base drug discovery -- Compound from natural product -- Assay compound bio-activity -- Hit generation and validated -- Lead identification and optimization -- Clinical Candidates Selection Folk Medicine -- TCM base drug discovery project -- TCM effect on metabolic disease, such as Type 2 diabetes, hyperlipidemia etc. (Collaboration research with Ruijin Hospital) -- TCM for liver health, (Collaboration research with Shanghai University of Traditional Chinese Medicine) -- Evaluation of other programs on TCM research

17. r • Topics: • The R&D Innovation Model • Botanical Drug /Traditional Chinese Medicine (TCM) • Quality Assurance

18. r What is the Quality Assurance? Represents the sum total of the organized arrangements made with the objective of ensuring that all products are of the quality requiredfor their intended use

19. Raw/PackingMaterialManagement Good supplier management to achieve the quality raw material GMP Compliance Establish GMP awareness in the organization Qualification Validation Management Facilitate and organize the Q/V activities in Tech Division Finished Goods Management Provide good service to customer to add value to our product Cold chain distribution management To manage cold chain distributors to ensure good product quality. r What is the scope of QA? Focus Areas Desired outcome

20. r What is the global Roche standard of QA? Quality Policy of Roche Pharmaceuticals division An effective and comprehensive Quality Assurance must be designed to avoid faulty products and services thus ensuring the effective protection of our customers and at the same time protecting our company and its employees from economic damage or legal consequences.

21. r Acknowledgement • RRDCC TEAM • Lee Babiss, Head of Pharma Research • Li Chen, Chief Scientific Officer Thank you!