Trends in Regulatory Compliance

1. Trends in Regulatory Compliance November 8, 2000

2. Today’s agenda • Overview of ESPS • The state of electronic submissions • ESPS solutions: people, process, and technology • Question & Answer session

3. ESPS company overview 191 employees worldwide. Corporate Headquarters in Fort Washington, PA. Other locations include: La Jolla, CA Raleigh, NC Boston, MA London, UK Public company since 6/17/99 (Nasdaq: ESPS) Signed Xerox re-seller & technology agreement in March 2000

4. ESPS Highlights • Leader in “Regulatory Publishing” Space (70%+) • Leader in the emerging multi-billion dollar knowledge publishing space. • First mover advantage with knowledge publishing suite of products and services with Expanded “Knowledge Publishing Suite” • Average revenue growth of 55% (last 3 years) • Strong Financial Position • Cash positive, virtually debt free, • Strong balance sheet, Strong Cash position

5. 55% average three year growth Revenue Growth $ Millions Fiscal years ended March 31

6. ESPS mission statement • ESPS, Inc., is the premier provider of knowledge publishing solutions that accelerate the assembly, management, and exchange of diverse, business-critical information for the eWorld.

7. Knowledge Publishing The process of consolidating multiple documents to communicate a concept effectively. • Convey information through publication organization, layout and cross-references. My: • Report • SOPs • Proposals

8. 1 content is authored in one of 135 supported native applications 2 source files are collected, organized and rendered to a common PDF format TitlePage New Employee Guide Ver 3.5 footer 4 publication is distributed to recipients or approvers via portal, e-mail, or in hard copy 3 common document level elements are defined and applied across the compiled publication Knowledge Publishing Cycle

9. ESPS Life Sciences customers 3M (E) Abbott (E) Agouron (E) Alcon Laboratories (MD) Allergan, Inc. (MD) Alliance Pharm (E) Alza (B) American Home Products -Wyeth Ayerst (E) -Whitehall Robbins (OTC) Amgen (B) AstraZeneca (E) AstraZeneca (Ag) Aventis (E) BASF (Ag) Baxter Healthcare (MD) Bayer (Ag) Biogen (B) Centocor (E) Chiron (B) Chugai (E) Coulter Pharm (E) Covance (CRO) DuPont Pharm. (E) DuPont (Ag) Dura Pharm (E) Elan (E) Genentech (B) Glaxo -SKB (E) Hoffmann LaRoche (E) Immunex (E) Isis Pharm (E) Johnson & Johnson(E) Ligand (B) Molecular Biosystems (B) Mylan Pharmaceuticals (G) NPS Pharm (E) Novartis Pharm (E) Novartis Animal Health (VM) NV Organon (E) Otsuka (E) PRA (CRO) Parke-Davis (E) Pfizer (E) Pharmacia (E) PharmaNet (CRO) Proctor and Gamble (E) Purdue Pharm (E) Quintiles (CRO) Sankyo USA (E) Santen Pharm (E) Schering-Plough (E) Solvay Pharmaceuticals (E) TAP Holdings (E)

10. Highly-Regulated Global IndustriesExternal Requirements Vertical Industries:Regulatory Agencies: Pharmaceutical: FDA, EMEA, OSHA... Biotech: FDA, EMEA, SEC, HPB... CROs: FDA, EMEA, HPB... Chemical: EPA, OSHA, PMRA, EEA... Utilities: NRC, DOE, FERC, PUC, EPA... Telecom: FCC, PUC, SEC, EPA, OSHA...

11. Highly-Regulated Global Industries • Plus internal compliance: • SOPs • GMPs • Risk Management Plans • Process Safety Management • ISO 9000 • ISO 14000 standards • And other critical information

12. The Burden of Compliance:Pharmaceutical • There are 4,000 global pharmaceutical/ medical products companies • In the US, companies spent over 22.7 million hours • Servicing 111 separate reporting/record-keeping programs • Resulting in 13.7 million annual responses

13. The Burden of Compliance: Chemical • Environmental Protection Agency has • 324separate information collection programs • Resulting in over 84.3 million annual responses • And over 119 million burden hours per year

14. Worldwide Web Users (millions) 350 300 250 200 150 320 131 227 70 97 173 100 50 Global “Paperwork” Compliance Costs Compliance Costs (millions) 175 150 $144 billion $147 billion $141 billion $139 billion $138 billion $135 billion 125 94 98 100 93 96 90 92 75 50 47 49 46 48 45 46 25 1997 1998 1999 2000 2001 2002 Non-U.S. Source: Thomas D. Hopkins, “Regulatory Costs in Profile,” August 1996, 1997 OECD Data and IDC 1998 U.S.

15. Traditional Regulatory Submissions: Publish 3 copies each 500,000+ pages Final submission fills a tractor trailer truck Two year development & publishing timeframe Project staff of 30 - 40 people Lengthy regulatory agency review cycle impeded by millions of pages of paper Enter the CoreDossier solution... The Truckload of Paper Dilemma CoreDossier Internet

16. Electronic Regulatory Submissions: Dramatically changes the internal review cycle: Develop, review, approve and publish concurrently Publish electronically to Internet, corporate intranet, using HTML, XML, PDF, TIFF— and publish direct to paper. Reduce cycle time and cuts required staff May shorten regulatory agency review cycle The Truckload of Paper Solution

17. The State of Electronic Submissions

18. From FDA CDER… Since November 1997: • 45% of all applications had some electronic component • 80% have electronic CRTs and/or CRFs • 15% are complete submissions

19. Current regulatory trends • One FDA reviewer states: “I  electronic submissions” • Your competition is doing more in less time • Producing higher quality deliverables • Achieving simultaneous registration • Providing increased navigability • FDA views the program a great success • More guidances are coming

20. What is on the horizon?

21. What is on the horizon? • EMEA • Product information management • EFPIA guidance on electronic submission of MAAs • CDER • Guidance on electronic submission of investigator information

22. Why electronic submissions? • Better quality than paper • Better organized information • Easier to process and to find documents • Same technology used for all reviews • Improved reviewer efficiency • Electronic submissions will be required

23. Starting with the end in mind “We are taking millions of dollars of information and turning it into a common document – it’s no easy task.” - Chris Tanner GlaxoWellcome

24. Submission challenges • Comply with latest electronic guidances • Produce identical paper & electronic output • Meet submission deadlines • Increase efficiency

25. Submission challenges: “NDA” 70 Customers…70 Methods…1 NDA

26. Overall benefits • Fewer resources needed • Quality improvements • Cost savings • Increased publishing capacity for simultaneous agency submissions • Compliant with FDA requirements for electronic submissions

27. Sample CoreDossier case studies • Immunex • 12/98 - Installed CoreDossier • 3/99 - Shipped BLA to CBER; e-Sub shipped prior to paper “[ESPS] has been great. Oh, and your software is pretty darn awesome!”

28. Sample CoreDossier case studies • ISIS • 3/98 - Used CoreDossier to electronically assemble 10-volume CMC section. • 4/98 - Submitted the full 366-volume NDA to the FDA, then prepared an 80-volume MAA to EMEA. • “CoreDossier streamlined the internal review time by approximately four weeks. CoreDossier was one of the reasons that we were able to meet our partner deadlines, achieve our milestones, and receive progress payouts”

29. Case Study: Pfizer One recent NDA filing by Pfizer using CoreDossier yielded $600,000 in specific cost reduction.

30. ESPS Product Suite

31. kPublisher and CoreDossier • CoreDossier • Typical User is Regulatory Operations/Regulatory Affairs • Large, multi-volume, highly structured, often government defined, relatively infrequent • Supports regulatory and pre-market approval publishing and complex functional requirements • (CDER, CBER, DAMOS, CADDY, etc.) • kPublisher • Occasional/casual publisher • Smaller, single volume, more frequent • Simple user interface, low training requirement • Designed for larger user community within the enterprise

32. Provide enterprise-wide web based access to publications • Web-based review and approval of publications • No client side technology ( no plug-ins or Acrobat ) • Annotation and status based review model • Full Text and meta data searching • Ability to organize and manage large collections of publications • Customizable interface by user and role