Therapeutic Categories Outlook
`
`
`October 2006
`
`Comprehensive Study
`
`Pharmaceuticals
`(617) 946-3700
`
`Biotechnology
`(646) 562-1000
`
`Medical Supplies & Devices
`(646) 562-1000
`
`
`Conclusion: The $500B worldwide pharmaceutical industry is positioned to
`deliver mid single-digit growth supported by promising R&D pipelines. This
`comprehensive study forecasts trends in the major therapeutic drug categories
`through 2010. Each category is defined by therapeutic need, market size,
`growth outlook, major new compounds in development, and an assessment of
`individual company prospects. The companies predicted to lead in “Market
`Share”, “Market Share Gain”, “Market Share Loss”, “Total Therapeutic Positions”,
`and “Leading Therapeutic Positions” are detailed below.
`
`
`
`Which Companies Will Lead Industry Through 2010?
`
`Market Share
`Sanofi-Aventis
`Pfizer
`GlaxoSmithKline
`Roche
`Novartis
`AstraZeneca
`
`Market Share Gain
`Sanofi-Aventis
`Roche
`Novartis
`Amgen
`Eli Lilly
`Schering-Plough
`
`Market Share Loss
`Pfizer
`GlaxoSmithKline
`Johnson & Johnson
`AstraZeneca
`Merck
`Bristol-Myers Squibb
`
`Total Therapeutic
`Positions
`Pfizer (12)
`Novartis (11)
`GlaxoSmithKline (9)
`Johnson & Johnson (9)
`Merck (9)
`Sanofi-Aventis (9)
`
`Leading Therapeutic
`Positions
`AstraZeneca (3)
`Eli Lilly (3)
`GlaxoSmithKline (3)
`Sanofi-Aventis (3)
`
`
`
`
`GLOBAL PHARMACEUTICAL INDUSTRY VALUATION PERSPECTIVE
`
`10/02/06
`Price
`Rating
`Ticker
`$48
`1
`ABT
`Abbott Laboratories
`71
`1
`AMGN
`Amgen
`25
`3
`BMY
`Bristol-Myers Squibb
`57
`1
`LLY
`Eli Lilly
`83
`2
`DNA
`Genentech
`55
`2
`GSK
`GlaxoSmithKline
`65
`1
`JNJ
`Johnson & Johnson
`42
`2
`MRK
`Merck
`28
`3
`PFE
`Pfizer
`22
`1
`SGP
`Schering-Plough
`51
`1
`WYE
`Wyeth
`Ratings: 1 Outperform; 2 Neutral; 3 Underperform
`Source: Company reports and Cowen and Company estimates
`
`EPS
`2006E
`$2.53
`3.70
`0.95
`3.12
`2.05
`3.46
`3.68
`2.47
`2.00
`0.70
`3.12
`
`2007E
`$2.92
`4.30
`1.15
`3.30
`2.55
`3.62
`3.98
`2.30
`2.05
`0.90
`3.25
`
`P/E Ratios
`F05-10
`2006
`2007 CAGR
`18.8
`16.3
`+11%
`19.2
`16.5
`+16%
`26.1
`21.5
`+5%
`18.2
`17.2
`+11%
`40.5
`32.6
`+28%
`15.9
`15.2
`+5%
`17.7
`16.4
`+8%
`17.0
`18.2
`+1%
`14.1
`13.8
`+4%
`NM
`NM
`+34%
`16.2
`15.6
`+5%
`
`
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 1
`
`

`
`Therapeutic Categories Outlook
`
`ESTIMATED U.S. MARKET FOR URINARY INCONTINENCE DRUGS*
`2006E
`2007E
`2008P
`2009P
`2010P
`CGR
`Comment
`
`2005
`
`24,218
`+3%
`50%
`18,163
`3%
`12,109
`+3%
`51%
`12,290
`45%
`5,476
`45%
`2,480
`20%
`26,317
`+7%
`
`+3% - 20MM+ Americans with overactive bladder
`- Modest growth assumed
`- Approximately 50% urge and 50% stress
`+3% - Includes portion of patients with mixed UI;
`approximately 25% of patients suffer from mixed UI
`+3% - Includes portion of patients with mixed UI
`
`- Patients seeking treatment increase with better
` diagnosis, availability of newer treatments
`- Drug therapy market share expands modestly
`
`- Newer products with fewer side effects and longer
` duration drive usage
`
`+5%
`
`+6%
`
`+8%
`
`+8% - Newer products for urge incontinence drive
` growth; Medicare drug benefit an opportunity
`
`- Once-daily LA launched 1/01
`- Improved side-effect profile compared to Detrol
`
`36%
`9,520
`$2.43
`$825
`1%
`142
`$3.00
`$15
`3%
`820
`$2.59
`$70
`- Sold by Pfizer to Novartis in Q1:2003
`11%
`- Launched in Q1:05; co-promoted by P&G
`2,942
`- Darifenacin; M3 antagonist
`$2.43
`+48% - Side-effect profile expected to clip potential
`$250
`- Approved 5/04; Q3:2004 launch
`6%
`- Twice-daily dosing; XR formulation in Phase III
`1,476
`
`- Esprit licensed via Indevus/ Odyssey July '05
`$2.42
`$125 +33% - Once-daily XR version is in Phase III trials
`- NDA Filing 12/02; launched in Q1:05
`12%
`3,178
`- GlaxoSmithKline co-marketing in U.S.
`$2.43
`- Astellas (Yamanouchi + Fujisawa) holds rights
`$270
`1%
`349
`$2.43
`$30
`19%
`4,878
`$70
`
`+6%
`
`-47%
`
`+11%
`
`+43%
`
`-15%
`
`+19%
`
`- Generics expected to clip in 2006
`- Launched 2/99 for overactive bladder
`- Patent exclusivity lost in 2006
`
`- Oxybutynin patch; improved side-effect profile
`- WPI has reduced marketing support
`
`- Continued conversion to LA
`
`- Price increases bolster switch to Detrol LA
`
`- Share decline with launch of new UUI therapies
`- Ditropan XL patent exclusivity lost in 2006
`
`22,827
`+3%
`50%
`17,121
`3%
`11,414
`+3%
`50%
`11,471
`43%
`4,963
`43%
`2,113
`19%
`22,497
`+7%
`
`38%
`8,654
`$2.43
`$750
`1%
`142
`$3.00
`$15
`3%
`703
`$2.59
`$60
`8%
`1,765
`$2.43
`$150
`2%
`531
`
`$2.42
`$45
`10%
`2,295
`$2.43
`$195
`2%
`466
`$2.43
`$40
`24%
`5,349
`$80
`
`23,512
`+3%
`50%
`17,634
`3%
`11,756
`+3%
`50%
`11,815
`44%
`5,143
`45%
`2,304
`20%
`24,491
`+9%
`
`37%
`9,116
`$2.43
`$790
`1%
`142
`$3.00
`$15
`3%
`762
`$2.59
`$65
`10%
`2,354
`$2.43
`$200
`4%
`886
`
`$2.42
`$75
`12%
`2,825
`$2.43
`$240
`2%
`408
`$2.43
`$35
`21%
`5,135
`$75
`
`U.S. Population/Prescriptions (000's)
`Overactive Bladder Sufferers
` % Growth
` % With Urge Symptoms
`Stress/Stress Predominant UI Sufferers
` % Growth
`Urge/Urge Predominant UI Sufferers
` % Growth
`% Incontinence Pts Seeking Treatment
` Incontinence Pts Seeking Treatment
`Drug Therapy Market Share
`Incontinence Pts Placed On Drug Tx
`Drug Therapy Retention Factor
`Incontinence Pts Compliant With Tx
`% Incontinence Pts Compliant With Tx
`Total # of Rx's
` % Growth
`
`Detrol LA (PFE) Market Share
` Prescriptions (000's)
` Price Therapy/Day
`Detrol LA Sales ($MM)
`Ditropan XL (JNJ/AZA) Market Share
` Prescriptions (000's)
` Price Therapy/Day
`Ditropan XL Sales ($MM)
`Oxytrol (WPI) Market Share
` Prescriptions (000's)
` Price Therapy/Day
`Oxytrol Sales ($MM)
`Enablex (NVS) Market Share
` Prescriptions (000's)
` Price Therapy/Day
`Enablex Sales ($MM)
`Sanctura (Esprit) Market Share
` Prescriptions 000's)
` Price Therapy/Day
`Sanctura Sales ($MM)
`Vesicare (Astellas/GSK) Market Share
` Prescriptions (000's)
` Price Therapy/Day
`Vesicare Sales ($MM)
`Detrol (PFE) Market Share
` Prescriptions (000's)
` Price Therapy/Day
`Detrol Sales ($MM)
`Generic Oxybutynin Market Share
` Prescriptions 000's)
`Oxybutynin Generics Sales ($MM)
`
`20,890
`+3%
`50%
`15,668
`3%
`10,445
`+3%
`47%
`9,766
`41%
`4,044
`41%
`1,677
`16%
`17,723
`+6%
`
`40%
`7,016
`$2.43
`$608
`20%
`3,562
`$3.00
`$375
`3%
`492
`$2.59
`$42
`2%
`385
`$2.60
`$35
`2%
`354
`
`$2.42
`$30
`3%
`459
`$2.80
`$45
`4%
`780
`$2.43
`$67
`15%
`2,654
`$30
`
`21,517
`+3%
`50%
`16,138
`3%
`10,759
`+3%
`49%
`10,584
`41%
`4,359
`43%
`1,871
`17%
`19,875
`+12%
`
`40%
`7,962
`$2.43
`$690
`9%
`1,805
`$3.00
`$190
`3%
`586
`$2.59
`$50
`4%
`883
`$2.43
`$75
`2%
`413
`
`$2.42
`$35
`5%
`1,059
`$2.43
`$90
`3%
`582
`$2.43
`$50
`22%
`4,323
`$85
`
`$35
`$30
`Other Therapies Sales ($MM)
`$1,300
`$1,262
`U.S. Incontinence Drug Sales ($MM)
`+3%
`+11%
` % Growth
`Source: Cowen and Company estimates, IMS Monthly Prescriptions.
`* Patient population and scrips in 000's; sales in $MM.
`
`
`
`22,163
`+3%
`50%
`16,622
`3%
`11,081
`+3%
`50%
`11,070
`43%
`4,742
`42%
`1,981
`18%
`21,065
`+6%
`
`40%
`8,366
`$2.43
`$725
`4%
`855
`$3.00
`$90
`3%
`644
`$2.59
`$55
`6%
`1,354
`$2.43
`$115
`2%
`472
`
`$2.42
`$40
`8%
`1,648
`$2.43
`$140
`2%
`524
`$2.43
`$45
`23%
`4,745
`$85
`
`$35
`$1,330
`+2%
`
`
`
`$40
`$1,375
`+3%
`
`$40
`$1,535
`+12%
`
`$45
`$1,700
`+11%
`
`+9% - Other generics (flavoxate, imipramine, etc.)
`+6% - Improved treatments, better compliance
`- Clipped in 2006 by Ditropan XL generics
`
`
`
`804
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 2
`
`

`
`Therapeutic Categories Outlook
`
`Notes
`
`
`
`
`
`
`
`
`
`816
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 3
`
`

`
`
`
`Therapeutic Categories Outlook
`
`Notes
`
`817
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 4
`
`

`
`
`
`Therapeutic Categories Outlook
`
`Notes
`
`818
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 5
`
`

`
`Therapeutic Categories Outlook
`
`Addendum
`
`STOCKS MENTIONED IN IMPORTANT DISCLOSURES
`Company Name
`Abbott Labs
`Amgen
`Bristol-Myers Squibb
`Genentech
`GlaxoSmithKline plc (ADR)
`Johnson & Johnson
`Eli Lilly
`Merck
`Pfizer
`Schering-Plough
`Wyeth
`
`
`
`
`
`Ticker
`ABT
`AMGN
`BMY
`DNA
`GSK
`JNJ
`LLY
`MRK
`PFE
`SGP
`WYE
`
`
`
`ANALYST CERTIFICATION
`Each author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her
`personal views about any and all of the subject securities or issuers, and (ii) no part of his or her compensation was, is, or will be
`related, directly or indirectly, to the specific recommendations or views expressed in this report.
`
`
`
`IMPORTANT DISCLOSURES
`
`
`Cowen and Company, LLC makes a market in AMGN securities.
`
`The author(s) of this report and/or members of their households own a Long position in the Common shares issued by MRK, PFE.
`
`Cowen and Company, LLC compensates research analysts for activities and services intended to benefit the firm's investor
`clients. Individual compensation determinations for research analysts, including the author(s) of this report, are based on a
`variety of factors, including the overall profitability of the firm and the total revenue derived from all sources, including
`revenues from investment banking. Cowen and Company, LLC does not compensate research analysts based on specific
`investment banking transactions.
`
`Cowen and Company, LLC does and seeks to do business with companies covered in its research reports. As a result, investors
`should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
`
`
`
`DISCLAIMER
`
`
`This research is for our clients only. Our research is disseminated primarily electronically and, in some cases, in printed form.
`Research distributed electronically is available simultaneously to all Cowen and Company, LLC clients. All published research,
`including required disclosures, can be obtained on the Firm’s client website, www.cowenresearch.com.
`
`Further information on any of the above securities may be obtained from our offices. This report is published solely for
`information purposes, and is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any state
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`herein is based on sources we believe to be reliable but is not guaranteed by us and does not purport to be a complete statement
`or summary of the available data. Any opinions expressed herein are statements of our judgment on this date and are subject to
`change without notice.
`
`Notice to UK Investors: This publication is issued in the United Kingdom by or through Cowen International Limited. In the
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`
`The contents and appearance of this report are Copyright© and Trademark™ Cowen and Company, LLC 2006. Member NYSE,
`NASD and SIPC. All rights reserved.
`
`Cowen and Company, LLC. New York (646) 562-1000 Boston (617) 946-3700 San Francisco (415) 646-7200 Chicago
`(312) 516-4690 Cleveland (440) 331-3531 Denver (303) 282-3100 London (affiliate) 44-207-071-7500 Geneva 41-22-
`707-6900
`
`
`
`
`819
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 6
`
`

`
`
`
`
`Therapeutic Categories Outlook
`
`COWEN AND COMPANY RATING DEFINITIONS (a)
`
`Rating
`Outperform (1)
`Neutral (2)
`Underperform (3)
`(a) Assumptions: Time horizon is 12 months; S&P 500 is flat over forecast period.
`
`Definition
`Stock expected to outperform the S&P 500
`Stock expected to perform in line with the S&P 500
`Stock expected to underperform the S&P 500
`
`
`
`COWEN AND COMPANY RATING ALLOCATION (a)
`Pct of companies under
`Pct for which Investment Banking services
`coverage with this rating
`have been provided within the past 12 months
`Rating
`48.5%
`9.9%
`Buy (b)
`44.1%
`2.3%
`Hold (c)
`7.4%
`0.0%
`Sell (d)
`(a) As of 09/30/2006. (b) Corresponds to "Outperform" rated stocks as defined in Cowen and Company's rating definitions (see above). (c) Corresponds to
`"Neutral" as defined in Cowen and Company's ratings definitions (see above). (d) Corresponds to "Underperform" as defined in Cowen and Company's ratings
`definitions (see above). Note: "Buy," "Hold" and "Sell" are not terms that Cowen and Company uses in its ratings system and should not be construed as
`investment options. Rather, these ratings terms are used illustratively to comply with NASD and NYSE regulations.
`
`
`
`
`820
`
`Petitioner Mylan Pharmaceuticals Inc. - Exhibit 1061 - Page 7