ASPEN PHARMACARE HOLDINGS LIMITED

1
ASPEN PHARMACARE HOLDINGS LIMITED
Group Interim Results as at Dec 2005
2
Income Statement re-analysed
6 months ended 31 Dec 2005 6 months ended 31 Dec 2004 Change
Rm Rm

Revenue 1 687 1 326 27
Cost of sales ( 880) (674)
Gross profit 807 652 24
Net operating expenses (318) (269) 18
EBITA 489 383 28
Amortisation (46) (47)
Operating Profit 443 336 32
FCC write down (14) -
PBIT 429 336 28
Net funding costs (19) (33)
PBT 410 303 35
Tax (122) (101)
PAT 288 202 42

HEPS 86.3 cents 59.4 cents 45
3
Funding Costs
6 months ended 31 Dec 2005 6 months ended 31 Dec 2004
Rm Rm

Interest paid (50) (36)
Interest received 31 16
Net Interest (19) (20)

Preference share dividend paid (14) -
Preference share dividend received 13 -
Net Preference share flows (1) -

Deferred payable finance costs (1) (4)

Foreign exchange gains 3 (3)

Fair value losses on financial instruments (1) (6)
(19) (33)
4
IFRS vs. SA GAAP
6 months ended 31 Dec 2005 6 months ended 31 Dec 2004 12 months ended 30 June 2005
Rm Rm Rm

SA GAAP headline earnings 316 217 493

Share based expenses (14) (6) (12)

Amortisation (9) (12) (21)

Depreciation 2 6 6

Other - (2) 4

IFRS headline earnings 295 203 470

IFRS HEPS 86.3 cents 59.4 cents 138.0 cents

SA GAAP HEPS 92.5 cents 63.7 cents 144.7 cents
5
IFRS 2 Share-Based Payments Employees

• All grants of equity settled share options and
  share appreciation rights
• Awarded after 7 November 2002
• Not yet vested by 1 January 2005
• Implementation dates tend towards lower earlier
  charges escalating as the pipeline fills
• Dec 04 R6 million
• Dec 05 R14 million
• Expense should stabilise after FY07

6
IFRS 2 Share-Based Payments Employees

• Number of variables
• Predicted future share price (higher price
  higher expense)
• Number of shares expected to vest (more shares
  higher expense)
• Risk free rate for period (lower rate lower
  expense)
• Expected volatility in share price based on past
  history (lower volatility lower expense)
• Dividend yield prediction (lower yield higher
  expense)
• Expected period to vesting (affects volatility
  determination and spread of expense)
• Calculated by binomial model
• Charge Valuation of option at grant date.
  Expensed over vesting period.
• No correlation to actual settlement value of
  option/appreciation rights.

7
Segmental EBITA margins(before exceptionals)
6 months ended December 2004 12 months ended June 2005 6 months ended December 2005

Pharmaceuticals
SA 35 37 36
Australia 14 10 10
UK 25 22 28
Total 32 32 32

Consumer
SA 20 21 21
Australia 28 28 27
UK 5 6 15
Total 21 22 22

Group Total 29 30 29
8
Segmental Growth ContributorsRevenue growth
27
Consumer 29
Pharma 71
9
Segmental Growth ContributorsRevenue growth
27
Aus Pharma 18
SA Consumer 28
Aus Consumer 1
SA Pharma 53
10
Segmental Growth ContributorsEBITA (before
exceptionals) growth 28
Consumer 23
Pharma 77
11
Segmental Growth ContributorsEBITA (before
exceptionals) growth 28
Aus Pharma 2
SA Consumer 22
UK Pharma 2
Aus Consumer 1
SA Pharma 73
12
Abridged Balance Sheet
13
Cash Flow from Operations
6 months ended 31 Dec 2005 6 months ended 31 Dec 2004
Rm Rm

Cash operating profit 521 430

Working capital requirements (278) (20)

Cash generated from operations 243 410

Net financing costs (62) (39)

Investment income 44 16

Tax paid (89) (53)

Net inflow from operating activities 136 334
14
Geographic distribution of fund managers31
December 2005
UK 14
USA 13
SA 61
Other INTL 12
15
ASPEN PHARMACARE HOLDINGS LIMITED
Group Interim Results as at Dec 2005
16
SA Pharma Market

• Overall SA private market
• Has contracted 2 by value
• Yet had double digit volume increases
• Caused by price freeze and generic shifts
• SA generic market showing even greater volume
  growth
• Downward sell price pressure caused by increased
  competition
• Margins partially rescued by import component
• Market trapped by Legislative inertia
• No price increases since 2003
• Ratchet effect of price decreases
• Fixed dispensing fee outstanding
• Once agreed will promote generic usage
• Capped wholesale fees and international
  benchmarking still outstanding

17
SA Pharma Market

• Increasing number of new import competitors
• SA local manufacturers/players under pressure
• Bought out
• Closed
• List
• Only the strong or niche players will survive
• Worldwide boom time for generics
• Numerous high value patent expiries
• Increased pricing pressures
• Future market shares will be determined by number
  of successful product launches
• Generics still a small section of the medicine
  spend

18
Ethical / Generic SplitMAT Rand Market Share
(SCH 3-7) December 2005
19
Ethical / Generic SplitMAT Units Market Share
(SCH 3-7) December 2005
20
Ethical / Generic SplitMAT Counting Unit Market
Share (SCH 3-7) December 2005
21
Total Pharma Market Price Comparison
22
Company PerformancePrivate Market - IMS ranking
by value (excludes Public Exports)
0
2
4
6
8
10
12
14
12.7
Adcock
11.2
Aspen
7.5
Pfizer
7.4
Sanofi-Aventis
6.8
Novartis/Hexal
4.6
GSK
3.5
Roche
3.4
AstraZeneca
2.9
JohnsonJohnson
2.8
Merck
2.5
Shering Plough
2.4
Wyeth
2.3
Bayer
2.3
Boehringer Ingelheim
2
Lilly
1.6
Merck KGAA
1.6
Novo Nordisk
1.6
Abbott
1.6
Shering AG
1.4
BMS
Total Private MarketR12.1 billion as at MAT
12/2005
1.4
Servier
1.1
Cipla Enaleni
Including Donmed Vitathion
23
Private Generic Market MAT Rand Shares as at
December 2005
24
Total Pharma Market Monthly Rand Shares as at
December 2005
25
New products

• Aspen has SAs best pipeline
• Heartbeat of the business
• Period characterised by the number and value of
  product launches
• Performance of new products has defined our
  growth (see graphic presentations)

26
New products0-12 Months MAT Rand Market Share
December 2005 IMS Data
27
New products0-24 Months MAT Rand Market Share
December 2005 IMS Data
20
18.09
18
16
14
12
10.33
9.78
10
8.63
8
7.23
5.96
6
5.56
4.44
4
3.06
2.89
2.7
2.62
2.34
1.78
2
1.52
1.44
1.27
0
GSK
Pfizer
Hexal
Lilly
Betabs
Adcock
Novartis
Merck
Ranbaxy
Lundbeck
Wyeth
JohnsonJ
Cipla Enaleni
Sanofi Aventis
Astellas Pharma
Pharma Dynamics
28
Pharma Launches
Launch
Launch
Innovator
Active
Strength
Trade Name
Date
Innovator
Active
Strength
Trade Name
Date
Mar
-
05
Mar
-
05
Doxylamine
Succinate
2,5mg
Somnil
Drops
Doxylamine
Succinate
2,5mg
Somnil
Drops
Jun
-
05
Jun
-
05
Eldepryl
Bromocriptine
25mg
Aspen
Bromocriptine
Tablet
Eldepryl
Bromocriptine
25mg
Aspen
Bromocriptine
Tablet
Cataflam
D
46,5mg
Diclofenac
Free acid equivalent to 50mg
Diclofenac
Diclo
-
flam
Blackcurrent
Dispersible Tablet
Jul
-
05
Cataflam
D
46,5mg
Diclofenac
Free acid equivalent to 50mg
Diclofenac
Diclo
-
flam
Blackcurrent
Dispersible Tablet
Jul
-
05
Viramune
Nevirapine
50mg
Aspen
Nevirapine
Suspension
Viramune
Nevirapine
50mg
Aspen
Nevirapine
Suspension
Ritalin
Methylphenidate
HCl
20mg
Adaphen
XL Tablet
Ritalin
Methylphenidate
HCl
20mg
Adaphen
XL Tablet
Aug
-
05
Aug
-
05
Zerit
Stavudine
15mg
Aspen
Stavudine
Capsule
Zerit
Stavudine
15mg
Aspen
Stavudine
Capsule
Myprodol
Paracetamol
/Ibuprofen/Codeine Phosphate
Mybulen Capsule
Myprodol
Paracetamol
/Ibuprofen/Codeine Phosphate
Mybulen Capsule
Sep
-
05
Sep
-
05
Clarityne
Loratadine
5mg/5ml
AP
Loratadine
Syrup
Clarityne
Loratadine
5mg/5ml
AP
Loratadine
Syrup
Aropax
Paroxetine
20mg
Deparoc
Tablet
Aropax
Paroxetine
20mg
Deparoc
Tablet
Rulide
Roxithromycin
150mg
Throsyn
Tablet
Rulide
Roxithromycin
150mg
Throsyn
Tablet
Sectral
Acebutolol
400mg
Butobloc
Tablet
Sectral
Acebutolol
400mg
Butobloc
Tablet
Oct
-
05
Oct
-
05
Zithromax
Azythromycin
500mg
Aspen
Azythromycin
Tablet
Zithromax
Azythromycin
500mg
Aspen
Azythromycin
Tablet
None
Nevirapine/Lamzid
15mg/200mg
ARV Combo Pack Tablet
None
Nevirapine/Lamzid
15mg/200mg
ARV Combo Pack Tablet
Lanzor
Lansoprazole
15mg
Aspen
Lansoprazole
Tablet
Lanzor
Lansoprazole
15mg
Aspen
Lansoprazole
Tablet
Lanzor
Lansoprazole
30mg
Aspen
Lansoprazole
Tablet
Lanzor
Lansoprazole
30mg
Aspen
Lansoprazole
Tablet
Clarityne
Loratidine
5mg/5ml
Clarinese
Syrup
Clarityne
Loratidine
5mg/5ml
Clarinese
Syrup
Nov
-
05
Nov
-
05
Prava
Pravastatin
10mg
Aspen
Pravastatin
Tablet
Prava
Pravastatin
10mg
Aspen
Pravastatin
Tablet
Prava
Pravastatin
20mg
Aspen
Pravastatin
Tablet
Prava
Pravastatin
20mg
Aspen
Pravastatin
Tablet
Prava
Pravastatin
40mg
Aspen
Pravastatin
Tablet
Prava
Pravastatin
40mg
Aspen
Pravastatin
Tablet
29
Pharma Launches
30
Consumer Launches
31
Generic Summary

• Extent of Aspens success will depend on
• keeping the momentum going on new products
• Importance of pipeline accentuated
• decreasing price environment in base business
• Legislation will continue to drive volume growth
  in the base business
• Further volume growth anticipated from SA
• From base business and new products
• Generic Industry should anticipate
• Increasing turnovers
• Margin pressures

32
Consumer / Chemicals

• Consumer base business growing with increased
  consumer spending
• Infant milk formulas
• Shown great growth
• Spike because of competitors out-of-stock
  position
• Likely to flatten at a higher level
• Chemicals
• Fine Chemicals business has excelled with growth
  in the US market
• US FDA market now largest contributor
• Astrix providing certainty in high volume low
  margin ARV industry
• Ability to offer fully integrated solutions
• e.g. BMS Atazanavir
• Key clients Aspen, Cipla Ranbaxy

33
Branded Pharma / Offshore

• Branded Pharma
• One of the marketing agreement with AstraZeneca
  expired
• Income loss of R10m in this year (R20m
  annualised)
• Once patented, Flixonase, Zantac injection and
  Zestoretic all now face intense generic
  competition
• Offshore
• Australia continues to perform
• Novartis to contribute meaningfully to
  profitability from 2008

34
Anti-retrovirals (ARVs)

• Voluntary Licenses and Access Arrangements
• Aspen successfully negotiated several
  arrangements which facilitate access to a variety
  of patented ARV molecules
• Aspen continues to identify key anti-retroviral
  molecules and negotiate with owners of
  intellectual property to secure affordable access
• Aspen is the ONLY company in the world to have
  all these valuable arrangements
• Boehringher Ingelheim
• Nevirapine
• Aspen secured a voluntary license
• Aspen developed a tablet and suspension dosage
  form

35
ARVs

• Bristol Myers Squibb
• Stavudine and Didanosine
• Aspen has developed a range of Stavudine (15mg,
  20mg, 30mg and 40mg) capsules as well as a range
  of Didanosine (50mg, 100mg, 150mg, 200mg)
  dispersible tablets
• Atazanavir
• Technology transfer collaboration agreement for
  manufacture and distribution of a generic version
  of the product
• Gilead
• Tenofovir and Emtricitabine
• Technology transfer agreement for manufacture and
  distribution of Viread and Truvada

36
ARVs

• GlaxoSmithKline
• Lamivudine and Zidovudine
• Voluntary license
• Aspen has developed forms containing both
  molecules individually
• Zidovudine 300mg tablets
• Zidovudine 100mg 200mg capsules
• Zidovudine 10mg/ml syrup, and
• Lamivudine 150mg tablet
• Lamivudine 10mg/ml syrup
• As well as the combination tablet Lamzid
• Lamivudine 150mg and Zidovudine 300mg
• Merck
• Efavirenz
• Voluntary license
• Aspen is developing tablet and capsule dosage
  forms for registration

37
ARVsProducts registered at Medicines Control
Council (MCC)

• Stavudine 15mg, 20mg, 30mg and 40mg
• Didanosine buffered tablet 50mg, 100mg, 150mg and
  200mg
• Zidovudine 100mg and 200mg capsules, 300mg tablet
  and 10mg/ml syrup
• Lamivudine 150mg tablet and 10mg/ml syrup
• Lamivudine 150mg and Zidovudine 300mg tablet
• Nevirapine 200mg tablet and Nevirapine 50mg/5ml
  suspension
• Aspen Lamzid and Nevirapine Co-pack

38
ARVs WHO Pre-Qualification

• The Aspen oral solid dosage (OSD) manufacturing
  site in Port Elizabeth has been approved by WHO
  for manufacture of the listed products
• Products already prequalified
• Aspen Stavudine 20mg, 30mg and 40mg capsules
• Aspen Lamivudine Tablets 150mg
• The following products are pending
  pre-qualification
• Aspen Lamzid Tablets (Lamivudine/Zidovudine
  combination)
• Aspen Nevirapine 200mg Tablets
• Aspen Zidovudine 300mg Tablets
• The following product is listed on the
  pre-qualification list by virtue of its FDA
  tentative approval
• Aspen Lamzid and Nevirapine Co-Pack
• Between 14 to 24 future developments will be
  submitted to WHO for pre-qualification within a
  year

39
ARVsUnited States Food and Drug Administration
(FDA) (for access to PEPFAR funding)

• Products submitted either as New Drug
  Applications (NDA) or abbreviated New Drug
  Applications (ANDA) to the FDA
• Tentatively approved
• Aspen Lamzid and Nevirapine Co-Pack
• Awaiting tentative approval
• Aspen Lamzid
• To be submitted in the foreseeable future (/- 12
  months)
• At least 14 products as a combination of NDAs
  and ANDAs

40
ARVsRegistration with African Regulatory
Authorities

• Products submitted or pending submission include
  the various presentations of
• Stavudine
• Didanosine
• Zidovudine
• Lamivudine
• Lamivudine/Zidovudine combination,
• Nevirapine
• Combination pack
• Gilead molecules and BMS Atazanavir handled
  separately

41
ARVs African Product Registration
StatusPriority Countries initially targeted
Pending
Dossiers
Registrations
Pending
Dossiers
Registrations
Pending
Dossiers
Registrations
Pending
Dossiers
Registrations
Submission
Submitted
Received
Submission
Submitted
Received
Submission
Submitted
Received
Submission
Submitted
Received
2
8
47
87
2
8
47
87
Deficit
Receive ART
Require ART
Deficit
Receive ART
Require ART
Country
Country
35,000
65,000
100,000
Botswana
35,000
65,000
100,000
Botswana
184,000
6,000
190,000
DRC
184,000
6,000
190,000
DRC
182,000
29,000
211,000
Ethiopia
182,000
29,000
211,000
Ethiopia
52,000
8,000
60,000
Ghana
52,000
8,000
60,000
Ghana
210,000
30,000
240,000
Kenya
210,000
30,000
240,000
Kenya
55,000
5,000
60,000
Lesotho
55,000
5,000
60,000
Lesotho
198,000
12,000
210,000
Mocambique
198,000
12,000
210,000
Mocambique
570,000
30,000
600,000
Nigeria
570,000
30,000
600,000
Nigeria

790,000
130,000
920,000
South Africa
790,000
130,000
920,000
South Africa
270,000
10,000
280,000
Tanzania
270,000
10,000
280,000
Tanzania
79,000
62,000
115,000
Uganda
79,000
62,000
115,000
Uganda
129,000
20,000
149,000
Zambia
129,000
20,000
149,000
Zambia
287,000
13,000
300,000
Zimbabwe
287,000
13,000
300,000
Zimbabwe
817,000
88,000
905,000
Other
817,000
88,000
905,000
Other
3,858,000
508,000
4,340,000
3,858,000
508,000
4,340,000
Total
Total
Above are some of the key African countries that
are presently rolling out ARV treatment.
Includes Public Private Sectors
42
ARVs

• Product registration status
• Dossiers submitted key registrations imminent
  in many territories
• Dossiers under compilation for submission into
  the following countries
• Cameroon, Benin, Burundi, Mali, Burkino Faso,
  Sudan, Cote DIvoire, Angola, Madagascar,
  Mauritius and Seychelles.
• Other countries to be added where required
• Products in Development
• A number of anti-retroviral products are in
  development
• Include fixed dose combinations, new molecules
  and new strengths of existing molecules
• There are 14 products currently in development
  which will all be submitted to MCC, WHO and FDA
  within the next 12 months

43
Gilead

• Aspen to manufacture innovator product
• Viread which contains Tenofovir 300mg
• Truvada which contains Tenofovir 300mg and
  Emtricitabine 200mg
• License agreement makes provision for Aspen to
  manufacture and distribute in the following
  countries
• Algeria, Angola, Benin, Botswana, Burkina Faso,
  Burundi, Cameroon, Cape Verde, Central African
  Republic, Chad, Comoros, Congo, Congo, Dem. Rep.
  of the Côte d'Ivoire, Djibouti, Egypt, Equatorial
  Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana,
  Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia,
  Libya, Madagascar, Malawi, Mali, Mauritania,
  Mauritius, Morocco, Mozambique, Namibia, Niger,
  Nigeria, Rwanda, Sao Tome and Principe, Senegal,
  Seychelles, Sierra Leone, Somalia, South Africa,
  Sudan, Swaziland, United Republic of Tanzania,
  Togo, Tunisia, Uganda, Zambia, Zimbabwe

44
Gilead

• Aspen manufacture for Gilead distribution in the
  following territories
• Afghanistan, Antigua and Barbuda, Bahamas,
  Bangladesh, Barbados, Bhutan, Bolivia, Cambodia,
  Dominica, Dominican Republic, Grenada, Guatemala,
  Guyana, Haiti , Honduras, Indonesia, Jamaica,
  Kiribati, Kyrgyzstan, Lao People's Dem. Rep.
  (Laos), Maldives, Moldova, Rep. of Mongolia,
  Myanmar, Nepal, Nicaragua, Pakistan, Papua New
  Guinea, Saint Kitts and Nevis, Saint Lucia, Saint
  Vincent the Grenadines, Samoa, Solomon Islands,
  Syria, Tajikistan, Timor-Leste, Trinidad and
  Tobago, Tuvalu, Uzbekistan, Vanuatu, Vietnam,
  Yemen

45
Gilead

• Viread Registration Status

• Truvada Registration Status

• Gilead Products
• Submission of files into all countries to be
  completed within a year
• Aspen manufacturing cutover for supply due in May
  2006 for Viread and July 2006 for Truvada
• Validation batches completed

46
BMS

• Atazanavir
• 3 strengths 20mg, 100mg and 200mg capsules
• License agreement offered to only two
  manufacturers
• Aspen Emcure (India)
• License agreement makes provision for Aspen to
  manufacture and distribute in the following
  countries
• Angola, Benin, Botswana, Burkina Faso, Burundi,
  Cameroon, Cape Verde, Central African Republic,
  Chad, Comoros, Congo, Democratic Republic of
  Congo, Côte d'Ivoire, Djibouti, Equatorial
  Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana,
  Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia,
  Madagascar, Malawi, Mali, Mauritania, Mauritius,
  Mozambique, Namibia, Niger, Nigeria, Reunion,
  Rwanda, Sao Tome and Principe, Senegal,
  Seychelles, Sierra Leone, Somalia, South Africa,
  Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia,
  Zimbabwe
• Products to be submitted for registration
  following successful generation of data required
• Critical product as WHO estimate because of
  resistances 500 000 patients will need 2nd line
  regimens in the next 2 years

47
ARVsWHO ART guidelines for Adults and
Adolescents (revised 2005)

• 1st Line Regimen
• 2nd Line Regimen

Zidovudine or Stavudine
Nevirapine
Lamivudine or Emtricitabine
Tenofovir or Abacavir
Efavirenz
Didanosine or Tenofovir
Abacavir
Atazanavir/Ritonavir or Lopinavir/r or
Sequinavir/r
Efavirenz or Nevirapine
Zidovudine (/- Lamivudine)
48
ARV Statistics

• 96 of Africa on 1st line time ARVs
• Projections
• WHO/UNAIDS tableting treatment in
• 2008 5.2m lives
• 2020 10.0m lives
• 50 of these lives will be in Africa
• We believe these to be too ambitious
• Clinton projection for 2008 is
• High 5.2m patients
• Low 2.3m patients
• Currently 400 000 treated in Africa (excluding
  SA)
• Aspen has a meaningful share
• Africa volume demand is for fixed dose
  combination
• Development of fixed dosage combination will
  increase volume opportunities
• Developed individual molecules first

49
ARVs

• Our ARV volumes and values are increasing monthly
• Our three key markets are
• SA private market
• SA public market
• African Export market
• SA private market is increasing and should
  increase further
• ARVs included in prescribed minimum benefits
• Increased patient acceptance of Aspen generics
• SA public market
• Aspen has the lions share of the three year SA
  tender market
• patients have increased from /-20 000 a year ago
  to our estimate of 80 000 today
• this will increase substantially over the next
  twelve months

50
ARVs

• Exports are the largest growth area
• In recent months have now exceeded the SA market
  sales
• Have been limited by individual countrys
  registration requirements
• Registrations now trickling through giving
  increased growth opportunities
• Key registrations and approvals expected within 8
  weeks
• Exports focus has absorbed human
  resources/production etc. but starting to show
  off-take

51
Tuberculosis (TB)

• Why TB?
• Aspens social commitment is to provide quality
  care at affordable pricing for infectious
  diseases with a focus on
• HIV/AIDS
• TB including Multi-drug resistant TB (MDR-TB)
• Malaria
• In 2004 there were 529 000 new TB cases
• 66 of all TB cases in SA were also infected with
  HIV
• 83 of TB cases in KZN were also HIV positive

52
TB

• The Medical Research Council (MRC) stated that
  SA faces one of the most devastating TB epidemics
  in the world. There are several reasons for
  this
• Large proportion of population are
• very poor
• immune-compromised
• 44 of population estimated to be in rural areas
  in 2005
• 67 of people experience problems with transport
• Therefore its not surprising multi-drug
  resistant TB (MDR-TB) is becoming more
  prevalent in SA
• MDR-sufferer transmits MDR-TB
• The WHO defines an MDR-TB hotspot as one in which
  the prevalence level is 3. In SA the current
  level of MDR-TB is 2.7

53
TB

• Global TB
• 8.6m fresh TB cases diagnosed every year
• Market size estimated at 550m - 600m
• Proposed global joint venture with Lupin which
  gives us access to their API capabilities
  costings. MoU signed
• Key customers could include
• Multi-lateral TB agencies e.g.
• Global Development Fund (GDF)
• Green Light Committee (GLC)
• Procurement agencies in individual countries
• Donor agencies
• Other agencies many of which overlap as current
  ARV funders
• Through this global joint venture Aspen will
  with Lupin become the world leader by volume in
  supplying finished dosage form TB products with
  backward integration of APIs

54
TB

• TB in South Africa
• Through Lupin Aspen has acquired the rights to
  key molecules required by State Tender
• Have local manufacturing rights
• Aspen owns all intellectual property
• Aspen has access to Lupins development pipeline
• For three of the four actives in first line TB
  treatment
• Lupin make
• 45 of worldwide Rifampicin
• 85 of worldwide Ethambutol
• 30 of worldwide Pyrazinamide
• Rifampicin and Ethambutol the key cost drivers

55
MDR-TB

• Aspens OSD facility now manufacturing
  Cycloserine
• Aspens new sterile facility together with tech
  transfer for Lilly to provide a cost effective
  solution to MDR-TB product Capreomycin
• Aspen seeking registration from the WHO for the
  above products
• All TB including MDR-TB is curable
• Aspen and Lupin will provide a cost-effective
  solution

56
Production

• A second IGS line is being installed
• Facing production challenges
• Particularly blister packaging
• Private market switch to small packs and ARVs
  impacted heavily on this area
• New product launches also mainly blister packed
• Impacting negatively on service delivery
• Cannot take advantage of opportunistic business
  in either Public or Private sectors
• New product start up were well managed
• Capacity is sufficient
• Challenge bringing it on line timeously
• As there are Regulatory, Tech transfer,
  time-consuming start-up validation requirements
  and numerous new products
• Given current forecasts and no further changes in
  the private market demand for small packs,
  production issues largely resolved by calendar
  year end

57
Production

• Pain will be short term
• Our investment in capacity will put us at the
  forefront of meeting the expected increase in
  future volumes in SA, Africa and the developed
  world.
• Receiving management focus
• Steriles will offer exciting opportunities
• Aspen currently manufactures more than 100
  tablets per annum for each and every South
  African, our challenge is to extend our reach

58
Summary

• Great first half, more challenging second half to
  follow
• Financial ratios positive
• Turnover, Profit, HEPS
• Achievement given current market conditions
• Excessive pressures on the business
• Working capital effected by the need to hold more
  ARV stocks
• Aspen is not one dimensional
• Income streams diversified with exports to become
  a material contributor
• Affordable basket of chronic medication
• Offshore presence continues to grow
• Already have over 100 ARV registrations in Africa
• SAs best pipeline
• World class manufacturer

59
Summary

• Aspen positioned to be global generic leader in
  infectious diseases
• Eagerly await finalisation of legislative changes
• Production delays negatively affecting our
  ability to make opportunistic sales in SA market
• Consumer base business growing with increased
  consumer spending
• Quality affordable medicines synonymous with
  Aspen product

60
ASPEN PHARMACARE HOLDINGS LIMITED
Group Interim Results as at Dec 2005