APOTEX, INC. and compliance requirements. We value and respect our employees, our business partners, our Preparation questions: Based on your reading of the suppliers, our customers and the communities we materials, together with your understanding of serve while operating with accountability and strategies for manufacturers, what are integrity in everything we do. the key challenges that faces in its market  Background segment? o Apotex Inc. is the largest Canadian-owned pharmaceutical company. From its 2 Contents employees, 5,000 square foot beginning, the A. Company overview (November 2012, updated company has grown to employ over 6,800 October 2013) people in research, development, B. Apotex generic drug approvals in the US, manufacturing and distribution facilities 2001-2012 world-wide. The Canadian operations of the C. Example of a successful introduction (Norvasc) Apotex Group of Companies with 5,800 D. Example of an unsuccessful introduction employees now occupy over 3.4 million (Plavix) square feet in Montreal, Richmond Hill, E. 2008-2012: GMP issues and subsequent , Etobicoke, Mississauga, Brantford, litigation Windsor, Winnipeg, London, Calgary and Vancouver. Apotex produces more than 300 generic pharmaceuticals in approximately A. COMPANY OVERVIEW 4,000 dosages and formats which, in Canada, are used to fill over 85 million prescriptions a Background year - the largest amount of any  Headquarters: 150 Signet Dr., Toronto, ON pharmaceutical company in this country. M9L 1T9 o Today, Apotex is a necessary and trusted member of Canada’s healthcare community.  Employees: 7,500 (2,500 outside Canada) The company’s pharmaceuticals can be found  Estimated sales: Greater than $1 billion in virtually every pharmacy and healthcare (2012 sales in Canada: ~$1.25 billion) facility in Canada and are exported to over  Founded: 1974 115 countries around the globe. Export markets represent an ever growing portion of Production & development the total sales. Apotex has also established a  Global capacity: 30 billion dosages per year. presence through subsidiaries, joint ventures  300 medicines in 4,000 dosages and formats or licensing agreements in Australia,  88 million prescriptions per year Belgium, Czech Republic, Italy, Mexico,  Exported to 115 countries. Netherlands, New Zealand, Poland, Turkey,  600 products under development and the UK, to name just a few. Healthcare  Plans to spend $2 billion over the next 10 years professionals around the world rely on on R&D. Apotex for quality and value. [Note: CapitalIQ estimates that Apotex markets Key executives products through distributors in Argentina,  Dr. Bernard (Barry) Charles Sherman - Aruba, Bahamas, Bahrain, Barbados, Founder Belarus, Bermuda, Botswana, the Cayman  Mr. Jacob (Jack) M. Kay - President and Islands, China, Costa Rica, Curacao, the Chief Operating Officer Eastern Caribbean Islands, El Salvador, Guyana, Haiti, Hong Kong, Hungary, Information from Apotex Home Site (2012-2013) Indonesia, Iran, Jamaica, Kuwait, Lebanon, Libya, Malaysia, Moldova, Nigeria,  Our Mission: Apotex is an independent, Nicaragua, Panama, the Philippines, Russia, dynamic, Canadian pharmaceutical company Saudi Arabia, Singapore, Taiwan, Thailand, committed to R&D, manufacturing and Trinidad and Tobago, Turkey, Ukraine, the distributing a broad range of high-quality, United Arab Emirates, the United Kingdom, affordable medicines to patients, healthcare Vietnam, Yemen, and Zimbabwe; with providers, payers and governments worldwide. facilities in Australia, Belgium, the Czech We will always meet global regulatory, quality Republic, Italy, Mexico, the Netherlands,

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New Zealand, Poland, Turkey, and the skills and experience needed to succeed in United Kingdom.] areas of sales, marketing, product o Although the company’s own business is development, clinical development, developing and manufacturing generic regulatory and medical affairs. pharmaceuticals, the success of Apotex has o Apotex has strong relationships with enabled it to diversify into a number of other regulatory agencies enabling us to develop health-related areas. The Apotex successful registration strategies in all major Pharmaceutical Group of Companies also markets. researches, develops, manufactures and o The success of Apotex has been built not distributes fine chemicals, non-prescription only on developing a broad product portfolio and private label medicines, and disposable but also in launching the difficult to do plastics for medical use. generics — taking on challenges of developing difficult APIs and formulations,  Research and Development products with difficult clinical and regulatory o Research at Apotex includes the development pathways, and patent challenges. Some of our of both generic and innovative successes have been achieved in pharmaceuticals. collaboration with third parties. New generic products have been a critical o o Apotex offers a cost effective alternative to component of Apotex's growth and have potential partners who are interested in resulted in the development of substantial registering and commercializing their generic expertise in formulation development, pharmaceuticals in Apotex target markets. synthetic and analytical chemistry. o Our interest in in-licensing varies depending o Research on new chemical entities is carried on territory. We welcome you to submit your out by ApoPharma Inc., a Subsidiary of opportunity for our consideration. Apotex, where our current focus is in the areas of hematology, neurodegenerative  Recent activity: 2011-2012 diseases and psoriasis. Apotex's first o October 2012: Opens offices in Saudi Arabia innovative drug, Ferriprox™, is approved in o October 2012: Divest ten older products to over 50 countries for treating iron overload in AA Pharma [Note: AA Pharma is based in Thalassemia. More recently, extensive Vaughan, ; Hoovers estimates the research has begun on developing permeant company has about ten employees and annual iron chelators for the treatment of several sales of $1 million; the company states that it neurodegenerative diseases where the impact focuses on “legacy pharmaceuticals”, with a of modifying intracellular iron metabolism is product line of over 50 drugs in 2012] being studied both in animals and humans. o April 2012: Launch of Apo-Rosuvastatin Our newest area of research, psoriasis, saw (Crestor statin; AstraZeneca) ApoPharma initiate clinical trials in 2008 to o December 2011: Federal Court of Canada evaluate the safety and efficacy of a novel ruled in favour of Apotex for generic Plavix dipeptide that has demonstrated a remarkable in Canada. Apotex challenged the - safety profile in animal toxicity testing. aventis Plavix® patents for over 8 years; o R & D expenditures for Apotex in 2007 was annual Plavix market in Canada is about over $181 million, representing close to 18% $300 million. of sales, placing Apotex in the top 10 o November 2011: Launched generic research and development companies and in Esomeprazole version of AstraZeneca's the top two pharmaceutical companies in Nexium®, a gastric proton pump inhibitor Canada (PPI). Brand product market is about $300 million per year. Apotex now offer 4 out of 5  Business Development: Partnering major gastric PPI molecules - Omeprazole, o Opportunity: Apotex offers a cost effective Pantoprazole, Lansoprazole, & alternative to potential partners who are Esomeprazole. interested in registering and commercializing o October 2011: Successful patent challenge their generic pharmaceuticals in Apotex for generic Xalatan® (eye pressure drug; target markets. ), nearly three years prior to patent o Committed to advancing generics, Apotex expiry. has been in the business for over 36 years and during that time has developed a deep understanding of the global market and the

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Information from Hoovers (2011-2012) Apotex's overall strategy of  Apotex strives to be at the apex of the continually evaluating its portfolio and selling Canadian generics industry. The company is one those medications it thinks could be better of Canada's leading generic drug makers, marketed by another pharmaceutical company. producing more than 250 generic drugs AA Pharma will attempt to boost sales of the in thousands of dosages and formulations. Its acquired prescription medications. product line includes generic equivalents  Making generic versions of other companies' of Merck's Claritin (allergy medication), Pfizer's products can be a risky business. For example, Norvasc (hypertension), and GlaxoSmithKline's Apotex came into the spotlight in 2006 when it antidepressant, Paxil. Apotex markets its drugs flooded the market with a generic version throughout Canada and the US, as well as in of Sanofi and Bristol-Myers Squibb's blood about 115 other countries in the Asia/Pacific thinner Plavix (one of the world's top-selling region, Africa, Europe, Latin America, and the drugs). The two companies sued and Apotex was Middle East. The company also has a ordered to stop distribution of its generic version manufacturing agreement with The Harvard of the drug about a month after sales began, but Drug Group. the bout of competition had already had a  Apotex conducts most of its business in North significant negative impact on Plavix's America, but it is expanding its global sales sales. Litigation over the matter dragged on for network through partnerships and about four years before a judge in late acquisitions. It operates across a full range of 2010 ordered Apotex to pay Bristol-Myers pharmaceutical services, including Squibb and Sanofi about $442 million (half of manufacturing of active ingredients and final the income Apotex earned from three week's of drug products; packaging; marketing and sales of the generic Plavix, plus interest). distribution; and the research and development  Though that lawsuit may be over, Apotex is of new products. pretty constantly facing litigation from one  The development of new generic formulations is pharmaceutical company or another claiming key to Apotex's growth strategy and the patent infringement. Case in company annually reinvests about 20% of point, AstraZeneca has successfully sued to keep its revenue in research and development. Apotex the company from marketing a generic version of performs research on new chemical entities asthma drug, Pulmicort Respules. Pfizer filed a through its ApoPharma subsidiary. It is focused similar suit to block sales of generic versions of on the clinical areas of hematology, erectile-dysfunction treatment, Viagra. neurodegenerative diseases, and  Using its powers for good, in 2007 Apotex was psoriasis. Another Apotex subsidiary, Cangene, granted permission to produce a three-in-one develops and manufactures plasma products. AIDS drug (Apo-TriAvir) destined for shipment  Outside of generic pharmaceuticals, Apotex has to , with specific permission affiliates and subsidiaries that make over-the- from GlaxoSmithKline (its rival in other arenas) counter (OTC) and private label and the Canadian government. Apotex received pharmaceuticals, fine chemicals, and disposable final approval from the Rwandan government to medical supplies. distribute the drug in 2008 and made two large  In mid-2010, the company sold about 40 (or shipments of the drug in 2008 and 2009. nearly 15%) of its pharmaceutical products to AA Pharma. The sale of the drugs is part of

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B. APOTEX GENERIC DRUG C. EXAMPLE OF A SUCCESSFULL APPROVALS IN THE US, 2001-2012 INTRODUCTION: NORVASC, 2007 Sequence All ANDA 1st Generic  2007( March): Apotex Invalidates Norvasc Apotex approvals ANDAs Patent  2007 (May): Apotex Launches Generic Norvasc 2012 29 12

2011 22 4 1. 2007 (March): Apotex Press Release 2010 5 1 Apotex Invalidates Norvasc® Patent

2009 11 4 Company to Launch In Near Future Weston, FL (March 21, 2007) - Apotex Corp. 2008 19 4 announced today the Federal Circuit Court of Appeals in the case of Pfizer, Inc. v. Apotex, Inc. 2007 23 3 reversed a trial court's ruling and found that Pfizer's U.S. Patent 4,879,303 (the '303 patent) covering the 2006 17 3 Pfizer product Norvasc® was invalid. The '303 patent covers amlodipine besylate the active ingredient in 2005 20 3 Norvasc® as well as tablets made from amlodipine 2004 15 2 besylate. Because the limiting patent expires in two days, no company will have exclusivity over the 2003 1 0 product. Apotex expects to launch the product in the very near future. 2002 8 0 The Federal Circuit found that Apotex had proven that the '303 patent was invalid because it was 2001 5 1 obvious. In other words, the patent should never had been issued because someone skilled in the art would

have known to make amlodipine besylate from materials, called prior art, that were publicly C. available. The Federal Circuit cited as some of the prior art an earlier Pfizer patent that taught amlodipine maleate as well as amlodipine with other pharmaceutically acceptable salts. The earlier Pfizer patent did not specifically mention besylate but the Court found that it was sufficient that besylate salt was discussed in other pieces of prior art. By finding the Pfizer '303 patent invalid and not infringed by Apotex's ANDA, the Court is allowing Apotex to obtain final approval for its generic amlodipine besylate product. By finding Pfizer'303 patent invalid the Court also causes Pfizer to lose the additional six months of pediatric exclusivity that they had obtained. "Our pursuit of this case after losing at the District Court level was rooted in Apotex's belief that the right thing to do for consumers and customers is to never, ever stop fighting to bring generics to market at the earliest possible time," said Apotex CEO . "There was no guarantee when we appealed the case that we would be able to enter the market if we won. The odds, in fact, were against us achieving that outcome. But we believed we have an

4 obligation to consumers to keep fighting, and are and rehearing en banc of its case with Apotex. extremely pleased that our victory in the courts will Apotex CEO Barry Sherman said, "While we are bring significant savings in short order to the US pleased that we are finally able to enter the market health care system." with our generic Norvasc®, we continue to believe "It goes without saying that we will continue to press this case screams out for reform of the generic drug on all fronts for changes in the US legislative and approval process. We disagree unequivocally with regulatory framework that will better serve the decision of the FDA that kept us off the market consumers . The commitment to the consumer that following our invalidation of the '303 patent. We guided our actions in this case will continue to guide should have been able to immediately enter the our efforts in Washington, DC, for instance, to work market." with policymakers to put an end to anti-competitive "Moreover," Sherman added "this case illustrates the patents settlements that delay consumer access to perversity of a generic drug approval system that affordable, quality generic medicines," Sherman prohibits the company that is the first to successfully added. open the market to generic competition from entering "Today's decision also has implications for the that market while allowing the company that lost its outcome of the clopidogrel case as some of the same case to reap huge rewards from a victory it did not legal principles are at stake in that trial. As today's achieve simply because it was the first to file its ruling underscores, consumers can be sure we will do application with the FDA. That makes no sense. The everything in our power to prevail in that case as system should allow the first company that wins in well," Sherman added. the courts to enter the market irrespective of whether that company is the first to file. Allowing the first to The Apotex Group manufactures more than 200 successfully defend the patent lawsuit to enter the different high-quality generic pharmaceuticals, used market immediately will benefit consumers by by millions of patients worldwide. Its product line ensuring subsequent filers have the appropriate includes oral solids, liquids, injectables, nasal sprays, incentive to continue the patent fight - and thereby opthalmics, and inhalation solutions. increase the chance of an earlier generic launch -- even though they might not have first to file status. Such a system would also benefit consumers by bringing a swift and needed end to the anti-consumer 2. 2007 (May): Apotex Press Release 'bottleneck' problem caused by anticompetitive patent settlements between brand and generic Apotex Launches Generic Norvasc® pharmaceutical companies that delay timely access to Weston, FL (May 24, 2007) - Apotex Corp. generic competition." announced today that it has launched amlodipine "We have been advocating for such a change to besylate tablets (2.5 mg, 5 mg, and 10 mg), the policymakers in Washington, DC and hope this generic equivalent of Pfizer's Norvasc®. The launch example will help bring about the change in the follows Monday's issuance of the mandate by the US system that is so sorely needed," Sherman added. Court of Appeals for the Federal Circuit's decision of March 22 invalidating Pfizer's US Patent 4,879,303 (the '303 patent) covering amlodipine besylate. The decision came in an action brought by Pfizer against Apotex. Apotex successfully invalidated the Pfizer patent. Following Mylan's successful petitioning of the Court to enjoin FDA approval of all competitors' amlodipine applications after its March 23 launch of the product, the FDA announced on April 20th that because Apotex invalidated the '303 patent, Apotex would be eligible to enter the market once the mandate issued. The Agency did not indicate at that time how the issuance of the mandate would affect the status of other amlodipine applications. The issuance of the mandate came in concert with the Court's rejection of Pfizer's petition for a rehearing

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Apotex is not releasing details regarding the possible D. EXAMPLEOF UNSUCCESSFUL launch of the product at this time. INTRODUCTION: PLAVIX, 2001-2010 Apotex Chief Executive Officer Dr. Barry Sherman Sequence said: "Apotex is confident that the patent will be held  2001: Initial challenge invalid and that an affordable generic alternative to  2006 (January): Apotex Receives Approval Plavix® will be available to consumers. We have for First Generic Plavix® been fighting for this for years and are committed to  2006 (August): Apotex Launches First Generic ensuring that the product comes to market as soon as Plavix® the time is right."  2006 (August): Marketers of Plavix Outfoxed on a Deal Clopidogrel is the generic equivalent of Sanofi's Plavix®, which is marketed in the U.S by Bristol  2006 (August): The Great Plavix Disaster Myers Squibb. Annual sales for Clopidogrel 75 mg  2006 (August): Court Halts Sales of Generic tablets in the U.S. are approximately $3.3 billion. Plavix  2006 (September): Plavix Plot Twists The Apotex Group manufactures more than 200  2008: Appeals Court Affirms Plavix Patent different high-quality generic pharmaceuticals, used  2010: Apotex's Plavix Adventure: Four by millions of patients worldwide. Its product line Years Later includes oral solids, liquids, injectables, nasal sprays,  BMS Plavix sales, 1998-2009 ($ million) ophthalmics and inhalation solutions.

1. 2001: Initial court challenge to Plavix 3. 2006 (August 8): Apotex Press Release patent Apotex Launches First Generic Plavix® Apotex files an application with the U.S. Food Consumers Have Immediate Access to an Affordable and Drug Administration to sell clopidogrel Version of this Important Product bisulfate, the active ingredient in Plavix. Apotex maintains that Sanofi's original 1985 Weston, FL (August 8, 2006) - Apotex Corp. patent on the drug doesn't cover this ingredient, announced that it has today launched clopidogrel and a subsequent patent issued in 1989 is bisulfate 75 mg tablets. Clopidogrel is the generic invalid because the French company misled the equivalent of Sanofi's Plavix®, which is marketed in patent office in seeking it. The original patent the U.S. by . should therefore have expired in 2003, Apotex As the first generic company to file an Abbreviated argues. Sanofi and Bristol-Myers deny New Drug Application (ANDA) with the Food and misleading the office and say the second patent Drug Administration (FDA) for clopidogrel, Apotex involved a new molecular compound, and is will have 180 days of market exclusivity for the therefore valid until 2011. product. Sales for clopidogrel 75 mg tablets in the U.S. for the twelve month period ending June 2006 are approximately $3.77 billion according to IMS 2. 2006 (January): Apotex Press Release Health. Apotex Receives Approval for First Generic On July 28, the States' Attorneys General reviewing Plavix® the modified settlement submitted in June by Apotex, Weston, FL (January 25, 2006) - Apotex Corp. today BMS, and Sanofi to the Federal Trade Commission announced that it has received final approval from (FTC) and the states rejected the agreement. The the U.S. Food and Drug Administration (FDA) for its proposed settlement, which was first announced in Abbreviated New Drug Application (ANDA) for March, halted the trial over the infringement case Clopidogrel bisulfate 75 mg tablets. filed by Sanofi/BMS against Apotex over U.S Patent No. 4,847,265 (the '265 patent) that had been Apotex is currently involved in patent litigation with scheduled for June. [WM: Legal rejection of Sanofi - Aventis over the validity and enforceability attempted “pay to delay” settlement strategy of U.S. Patent No. 4,847,265 pending in U.S. District when Sanofi/BMS thought they had a weak case in Court of the Southern District of New York. The trial the Paragraph IV litigation] currently is set to begin in April 2006. Apotex was the first generic to file with the FDA, and thus is Apotex Chief Executive Officer Dr. Barry Sherman entitled to 180-days of generic market exclusivity. said: "Apotex believes its clopidogrel launch to be 6 the largest and most successful launch in the history Apotex' clopidogrel tablets are packaged in bottles of of the generic industry. We are confident that the 30s, 90s, 1000s, and 100 count unit dose blisters. patent will be held invalid and that the courts will find inequitable conduct before the Patent Office on the part of Sanofi. Accordingly, Apotex has launched 4. 2006 (August 9): New York Times prior to trial so that patients and public and private health care payers can begin benefiting from a Marketers of Plavix Outfoxed on a Deal (by Stephanie Saul) quality, low-cost alternative to Plavix® immediately rather than years from now." [WM: Taking risk of The generic drug maker Apotex yesterday began launching before litigation determines outcome of shipping a cheaper form of Plavix, the anticlotting Paragraph IV challenge] agent that is one of the world’s best-selling drugs, in "There should be no mistaking," Sherman added "that an embarrassing setback for the drug’s brand-name our decision to launch a generic version of this marketers, Sanofi-Aventis and Bristol-Myers Squibb. blockbuster product at risk is a testament to our A year ago, analysts had predicted that the companies commitment to patients, consumers, and taxpayers." had a better than 60 percent chance of winning a patent dispute with Apotex. But an attempt by the The U.S. Food and Drug Administration approved Apotex's ANDA for clopidogrel in January following companies to settle the dispute has backfired, the expiration of the automatic 30 month stay of opening the way for Apotex to enter the market. approval imposed by federal law when a brand “It looks like a much smaller generic private company files an infringement suit against a generic company completely outmaneuvered two of the manufacturer challenging its patents. At the time of giants of the ,” said Gbola the ANDA's approval, Apotex was in the midst of Amusa, European pharmaceutical analyst for Sanford patent litigation with Sanofi-Aventis concerning C. Bernstein & Company. “It’s not clear how or why clopidogrel in the U.S. District Court of the Southern that happened. The reaction from investors and District of New York, over the validity and analysts has ranged from shock to outright anger.” enforceability the '265 patent. The generic version, called clopidogrel, is expected In March, Apotex, Sanofi and BMS announced a to be available in the United States beginning today proposed settlement of the litigation. at prices about 30 percent below the $4-a-day retail After reviewing the proposed settlement, the States' price for Plavix. The drug, used for preventing heart Attorneys General advised that they would not attacks and strokes, had sales of more than $6 billion last year. approve the agreement in its then current form. In June, Apotex, BMS, and Sanofi announced a Shares of Bristol-Myers, which gets nearly one-fifth modified agreement had been submitted to the FTC of its revenue from Plavix, were down 6.85 percent and the states for review. Both agreements would yesterday on the prospect of a major erosion of those have resolved the litigation and would have granted sales. The American depository receipts of Sanofi, a Apotex a license to market the generic product French company that sells Plavix outside the United several months in advance of the expiration of the States, were off by nearly 1 percent. patent in return for settling the suit. On July 28 the States' Attorneys General announced their rejection Barry Sherman, Apotex’s chief executive, predicted of the modified agreement. The latter agreement that clopidogrel, the biggest-selling drug ever to go contained provisions assuring a smooth launch by generic, would mark the “largest and most successful Apotex in the event approval of the agreement's launch” of a generic drug in history. Apotex’s move settlement terms was not obtained. Under the into the market follows the government’s recent agreement, Sanofi and BMS have agreed not to seek rejection of the proposed patent settlement, which a temporary restraining order in the event Apotex Bristol-Myers and Sanofi had hoped would keep the launched sales of the generic product and not to seek generic drug off the market until 2011. a preliminary injunction until at least five business Despite the government’s rejection of the deal, some days after Apotex began shipments. In the event terms of that agreement remain in effect. And they Sanofi and BMS ultimately seek a preliminary hold at least two significant disadvantages for Bristol injunction, Apotex believes it has strong defenses to and Sanofi. Under the terms, the companies must such an effort. wait five business days before seeking a federal As a result, Apotex has decided to immediately injunction against Apotex’s shipments, giving the launch clopidogrel. generic company an opportunity to potentially flood the market with its generic drug before a court can 7 step in. 5. 2006 (August 10): Derek Low – In the Pipeline The big companies also negotiated away their rights under federal law to seek triple financial damages if The Great Plavix Disaster they eventually win the patent dispute in court. That I've been remiss in not covering the Plavix situation, proviso removed one of the major deterrents to a which is quite a story. The huge-selling anticoagulant generic competitor’s entering the market while a drug is marketed in the US by Bristol-Meyers Squibb and is still under patent. in the rest of the world by Sanofi-Aventis. It's been Analysts said the developments raised doubts about the target of the Canadian generic firm Apotex, the leadership of Bristol-Myers and Sanofi and the who've maintained that key parts of its patent wisdom of the concessions they had made to Apotex. coverage are invalid. They won the right from the And because the abortive patent settlement is also FDA back in January to sell their generic form - but now the subject of a federal criminal inquiry, some keep in mind that the FDA is not concerned with analysts raised questions about whether Peter R. patent law, only the drug's manufacturing standards Dolan, Bristol-Myers’s chief executive, can survive. and identity with the original version. “On the surface, it doesn’t look good,” said Jami The company was in the middle of their patent suit Rubin, a Morgan Stanley analyst. “Credibility, I with BMS and S-A, and were holding back to see think, has been severely set back.” how that would go. In March, though, a deal was cut: Apotex agreed to wait until 2011, the lifetime of the In a letter to employees yesterday, Mr. Dolan warned (unchallenged) patent, and in return they got paid by that there would be negative news accounts of the the larger firms and received a guarantee that they generic introduction, but he defended the company’s wouldn't be undercut until then. efforts to protect its intellectual property rights. Paying generic firms to go away is not unheard of, A Bristol-Myers spokesman, Tony Plohoros, said the but companies can put themselves at risk when such company was evaluating its legal and commercial deals are made too blatantly. This one fell apart, big- options. Those could include a decision by the time, last month. Not only was it rejected by various company to drastically lower the price of Plavix or to state attorneys-general, but a criminal investigation introduce its own generic equivalent. was launched into the whole matter. In a statement, the French company Sanofi said it The ceiling tiles really began to rain down at that was also evaluating possible remedies against point. There was a clause in the agreement that if the Apotex, which a lawyer for Bristol-Myers accused in deal didn't go through, Apotex could start selling its court of intentionally sabotaging the deal. generic version with five days notice, and that's Mr. Sherman, in a telephone interview, all but exactly what they've started doing as of earlier this ridiculed his two big rivals, saying they had naïvely week. The generic isn't all that much cheaper, but it's agreed to conditions that allowed his company to enough to torpedo the branded version. bring its product to market even though the deal was What's more, it appears that BMS and Sanofi-Aventis rejected by regulators. limited their potential recourse. Under the usual rules, “I think they acted foolishly in a number of ways,” they'd be able to sue and obtain triple damages if they said Mr. Sherman, a Toronto billionaire who amassed won, but they seem to have waived that right, along his fortune in the generic drug business. with several others. This would seem to be an indicator of just how much they wanted to keep the Mr. Sherman said that he had never expected the generic off the market, and how hard a bargain American government to approve the deal, but that he Apotex drove. It's enough to make you wonder if had conducted the negotiations in a way to let him Apotex factored in, up front, the chance of the whole push the Apotex drug onto the market. thing being rejected and decided to give their rivals Mr. Sherman said Apotex was engaged in an “all-out enough rope with which to hang themselves. launch” and has already shipped most of its inventory Update: as pointed out in the comments, the CEO of while manufacturing continues. Apotex is making it sound like that was exactly the plan. Perhaps he's laying it on a bit thick, but he's in a position to, isn't he? Shares of both Bristol-Meyers Squibb and Sanofi- Aventis took a fine hammering, as you can well imagine, since Plavix represents about 30% of BMS's

8 profits. Apotex is privately held, which is a shame in year. a way, because it would have been something to see Apotex Chief Executive Officer Dr. Barry Sherman what the trading in their stock would have been like. said "We remain steadfast in our belief that the '265 Sanofi may try to obtain an injunction to stop the patent will be held invalid and that the courts will generic sales, but no one seems to think that it will be find inequitable conduct on the part of Sanofi. granted - partly because of all those Apotex-favoring Today's decision to stop Apotex from continuing to terms that the companies agreed to originally. sell our generic Plavix® is first and foremost a blow It's difficult to see how this could have worked out to consumers, patients, taxpayers, and businesses. more horribly for the two big companies here: their And the $400 million bond is grossly inadequate to best-selling drug is under attack five years early, compensate Apotex for the damages we are now in they've signed away their rights to do much about it, jeopardy of incurring. Apotex is moving immediately the analysts are downgrading their stock and the and aggressively to reverse the court's decision." financial rating agencies are looking at lowering their "We launched this product at-risk because Apotex credit ratings, and the criminal investigation is rolling always strives to make quality, affordable generic right along. Short of a meteor strike or a plague of medicines accessible to those who need them at the frogs, I'm not sure what else could go wrong. And the earliest possible time," Sherman added. "With that worst part is, they brought it on themselves. Their commitment at the forefront of our effort, we will do patent position should have been stronger in the first everything we can to swiftly restore access to our place to protect a compound of this importance, and quality, affordable generic version of this important they shouldn't have pushed the envelope so much medicine for all the constituencies of the U.S. health with their go-away payments to Apotex. It didn't have care system." to be this way. Did it?

Supplemental information (, 6. 2006 (August 31): Apotex Press Release September 2, 2006): In granting the injunction, Court Halts Sales of Generic Plavix® Judge Stein found "Sanofi has demonstrated a likelihood of success on the merits" of its case in the Apotex to File Emergency Motion to Stay Injunction pending patent trial. That prompted analysts to Weston, FL (August 31, 2006) - Apotex Corp. today predict Bristol-Myers and Sanofi would beat announced that the U.S. District Court of the Apotex's challenge. "The opinion implies a high Southern District of New York has granted the probability associated with a favourable outcome for request of Bristol Myers Squibb and Sanofi to issue a Bristol-Myers/Sanofi in January '07," wrote Bear preliminary injunction to prevent further sales of Stearns analyst John Boris in a research note. Mr. Apotex's generic version of Sanofi's Plavix® Boris said investors shared that belief, pushing (clopidogrel 75mg tablets). The Court denied BMS Bristol-Myers stock up about 5% yesterday. and Sanofi's request to force Apotex to recall product it has already shipped. 7. 2006 (Sept): Derek Lowe, In the Pipeline Apotex will immediately appeal the decision and is filing an emergency motion with the Court of Plavix Plot Twists Appeals for the Federal Circuit to stay the injunction The mighty Plavix battle has taken another pending the appeal. unexpected twist. In the last installment, Canadian In granting the injunction, the Court has required generic company Apotex had snookered (a BMS to post a $400 million bond to compensate completely accurate description) Bristol-Meyers Apotex for damages should it prevail in its patent Squibb and Sanofi/Aventis into an ill-advised dispute with BMS and Sanofi over U.S. Patent No. agreement that ended up destroying the drug's patent 4,847,265 (the '265 patent). Apotex had asked the protection. Apotex had begun gleefully shipping their Court to set the bond at $4 billion. generic, while the two larger companies sought relief in court from what appears to have been largely a Apotex began shipping clopidogrel on August 8. problem of their own making. Launch of the product followed the July 28th rejection by the States' Attorneys General of a To my surprise, that relief has been granted. Last proposed settlement of the patent dispute concerning week, a judge issued an injunction against further the '265 patent, which was submitted to the states and sales by Apotex in the U.S. until the patent Federal Trade Commission by the parties earlier this infringement trial is completed. That's not even going

9 to begin until early next year, and you can be sure Apotex Chief Executive Officer Dr. Barry Sherman that BMS and S-A are going to drag it out as much as said, "We believe the Appeals Court made the wrong possible. No legal bills can compare with the hit decision and will continue fighting to bring this they've taken over generic Plavix. Sanofi-Aventis, for product back into the market place. We will pursue example, has lowered its profit forecast to a 2% all options available to us in our effort to once again increase over last year, instead of 12%, claiming that provide the public with a quality, affordable generic Apotex has clogged up all the distribution channels Plavix®." with their generic. I'm a little sceptical of the size of Apotex launched its generic Plavix® on August 8, that effect - it's not unheard of for companies to 2006. On August 31, 2006 the U.S. District Court for unload other types of bad news under a convenient the Southern District of New York granted banner, given the chance - but there's no doubt that BMS/Sanofi's motion for an injunction against it's been a nasty experience. Apotex, halting any further sales of the product. The Apotex may have just had its moment of glory, at August 8, 2006 launch followed the rejection of a least as far as Plavix is concerned. I'm sure that they revised settlement between Apotex and BMS/Sanofi made money during this adventure, so if they were by a group of states' attorneys general a week earlier. going to lose the patent case anyway, they're still Apotex and BMS had reached an earlier settlement in ahead. No doubt they'd have been even happier to go March of 2006 but BMS withdrew it from on selling it, but they'll take what they can get. consideration after regulators expressed initial concern about some of its provisions. Under the Meanwhile, the Federal Trade Commission is making terms of the settlement, Apotex was entitled to launch threatening noises about investigating other pay-the- the product if either the states' attorneys general or generic-to-go-away deals. The courts have ruled that Federal Trade Commission rejected the settlement. such deals are legal if they don't push past the patent expiration of the drug, so I'm not sure what the FTC The District Court deferred any litigation over is going to be able to do. But they're clearly unhappy damages Apotex may be liable for as a result of about the situation. For my part, I'd as soon see the having lost the case after introducing generic Plavix® generic companies go ahead and challenge the patent- into the market pending the decision of the Appeals holding ones, as long as the decisions are made in a Court. Should Apotex's petition for a competent legal venue. By which I mean, not like the rehearing/rehearing en banc be rejected, the damages one that upheld Ariad's patent. Keeping everyone on litigation will proceed. their toes is a good thing, as long as it's done fairly.

9. 2010 (October): Derek Lowe – In the Pipeline 8. 2008: Apotex Press Release Apotex's Plavix Adventure: Four Years Later Appeals Court Affirms Plavix® Patent Remember the Plavix Confusion of 2006? That's Apotex to Seek Rehearing of Decision when Canadian generic company Apotex managed to jump onto the market for a few weeks with its own Weston, FL (December 12, 2008) - Apotex Corp. version of the BMS/Sanofi-Aventis blockbuster. It announced today that the U.S. Court of Appeals for was always a bit unclear whether they had the right to the Federal Circuit (CAFC) in the case of Bristol do that - there was a case that the company had Myers Squib/Sanofi v. Apotex, Inc. has found that played rough but fair with some tricky language in U.S. Patent 4,847,265 (the '265 patent) covering their agreements with the two pharmas. Still, Apotex Plavix® is valid and enforceable. The ruling upholds racked up over 800 million dollars in sales while the U.S. District Court for the Southern District of everyone was sorting that out. New York's June 2007 decision regarding the '265 patent. The '265 patent covers clopidogrel bisulfate, Well, four years down the road, a judge has ruled that the active ingredient in Plavix®. Apotex owes BMS and S-A damages for their adventure: half the sales, plus interest. That's still less Apotex will simultaneously pursue a than the triple damages that could be obtained in an rehearing/rehearing en banc of today's decision. If the open-and-shut case of patent infringement, but it's Court grants a rehearing, the case would be review by pretty substantial. I wonder how much of the money the same three judge CAFC panel that ruled today. If Apotex still has handy? the Court grants a rehearing en banc, the case would be reviewed by the entire appeals court and all its Comments in response members.  John Doe (October 21, 2010) ... Don't worry, we are fine. 10

 BFS (October 21, 2010) ... While Apotex was 10. BMS Plavix sales, 1998-2011 ($ million) deemed liable for $442M in damages, plus $108M in prejudgment interest, the company still made about $300M from their foray [WM: this is gross sales revenue, without factoring in PLAVIX costs]. Not bad, considering the drug was only on the market for three weeks before the PI $8,000 issued.  Brian (October 21, 2010) ... I am not sure how $6,000 much money Apotex does have, but I can tell you that when I started my career working for $4,000 them as an Analytical R & D chemist, I certainly worked on several drugs. It was a great way to $2,000 get initiated into the field of pharmaceuticals because there was a method for everything. $0 Having worked for both a brand-name and a 1999200120032005200720092011 generic company, I can get a feel for both sides of a product, the cost of R & D for the development of the new product and marketing Plavix patents end: EU (2008), US and Canada versus the fight to provide a lower-cost generic (2011-2012) version.  Peej (October 27, 2010) ... The reason why it wasn’t triple damages was that the BMS CEO, Peter Dolan, signed that provision away in a deal with Apotex in negotiations.  Terry (June 12, 2011) ... Indeed, in China there is a company named Salubris got the exclusivity in China for this drug, the annual sales now is around 100 million dollars, sometimes it is easier to start a generic drug in China, and the medical market of China … will exceed US market in 2030. [Note (WM): Salubris is based in Shenzhen and markets APIs globally plus multiple products in China, with 2010 sales of about US$201 million ($55 million net income), up from $54 million ($11 million net income) in 2007]

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E. GMP ISSUES AND LITIGATION investments under NAFTA Article 1110. That case concerns two different generic GMP issues drugs, sertraline, and pravastatin, and was  2008-2010 – inspections and warning about unsuccessful litigation to deprive the letters: Apotex received warning letters 180 days of market exclusivity to from the U.S. FDA regarding the Etobicoke companies that first challenged the patents. plant and Signet plant regarding good In this suit, Apotex requested $16 million manufacturing practice (GMP) violations, in damages. In that case, the U.S. based on observed issues with the quality Government began by stating that "Apotex systems, including alleged use of Inc., a Canadian manufacturer of generic contaminated ingredients. FDA issued an drugs that never had an investment in the import ban on all drugs manufactured at United States, that lost no property rights these two plants and prevented the through adverse U.S. Government action, company from seeking new marketing that brought its NAFTA claims late, and authorizations in the U.S on August 28, that failed to exhaust its domestic judicial 2009. remedies . . ."  May 2011: The FDA lifted the import ban  October 2012: Apotex is taking the FDA to following review of the plants. court for failing to grant timely approval of its ANDAs for two Sanofi hypertension Subsequent litigation treatments, Avapro and Avalide. The Office  February 2012: Apotex filed a claim to the of Generic Drugs (OGD) has yet to approve International Centre for Settlement of the ANDAs because the agency’s Office of Investment Disputes seeking arbitration Compliance cannot locate an inspection with the U.S.A. In the filing, Apotex cited report it should have long ago created and unfair treatment by FDA which constituted reviewed, the Canadian generic-drug maker a violation of the North American Free says. Trade Agreement (NAFTA). Apotex further claimed that the action of FDA ‘decimated its business’ by about $500 million.  Excerpts from [http://www.fdalawyersblog.com/2012/03/a potex-sues-us-government-unde.html]  Apotex alleged that during the relevant time period, FDA accorded more favorable treatment to other U.S.-owned investments having issues similar to Apotex, in that these other investors were not subjected to a measure as severe as the import alert imposed on the Apotex companies. These issues and the resolution of the issues by a FDA re-inspection were far more protracted to resolve than say those by Teva who, according to Apotex, appeared to have similar or analogous problems.  This is not the first time that Apotex has used the NAFTA agreement to bring a case against the U.S. Government. In June 2009, Apotex alleged that the U.S. courts and administrative agencies committed errors in interpreting federal law, and that such errors are in violation of NAFTA Article 1102 (national treatment) and Article 1105 (minimum standard of treatment under international law). According to Apotex, these decisions expropriated Apotex's

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