March 17, 2010

1. Pharma & Biotech Supply Chain World Asia Achieving Effective & Successful Trial through accurate Demand Forecasting of Clinical Supplies March 17, 2010

2. Speaker Profile Dr. Shreekant Sapatnekar Medical Director Karmic Lifesciences Qualifications - MD in General Medicine, MD in Community Medicine- Diploma in Public Health and Diploma in Industrial Health- Diploma in Management from the Jamnalal Bajaj Institute of Management SciencesPrevious Experience -Dean & Director, Clinical Research Education and Management Academy (CREMA), Mumbai - Professor & Head of Dept. of Community Medicine, Grant Medical College, Mumbai- Vice-Chancellor’s nominee to the Academic Council of the University of Mumbai- Medical Administrator of the Mahatma Gandhi Memorial Hospital- Joint Director of Medical Education & Research- Director of the prestigiousHaffkine Institute, Mumbai- Administrator of Maharashtra Medical Council - a licensing/regulatory body of Govt. of Maharahtra for MBBS doctors Contribution - Two Chapters for the API Textbook of Medicine- 21 published research papers, 7 editorials and 61 articles- Presence at International and National Conferences for Presentation of Scientific Papers- Editorials for journal of Association of Physicians of India- Editor of Indian Journal of Occupational Health and My DoctorAwards- Has been awarded three orations and WHO Fellowship- Awarded the Best Referee by Journal of Association of Physicians of India (JAPI), for 2007

3. Achieving effective and successful trial through accurate demand forecasting of clinical supplies • Overcoming "supplies stock out" situation through effective demand forecasting • Building an effective aggregate demand forecasting strategy at the distribution point • How to ensure infrastructure of local depot network for clinical supplies is ready to achieve operation and cost efficiency Agenda

4. Introduction to Clinical Trial Supplies Chain The “Clinical Trial Supply Chain” refers to the activities involved with planning, sourcing, transporting and distributing clinical trial materials including Investigational Product, Clinical Equipment & Supplies to the Clinical Trial Sites and Investigators Site 1 Site 2 Sponsor/ Manufacturer CRO Global Carrier Local Carrier Site 3

5. Applicable Import Application & Approval Illustrative Supply Chain for Clinical Trials Overall IP Trial Related Demand Forecast calculated by Sponsor/CRO IP Delivered to Site in controlled conditions IP Shipped to Site in required shipping conditions • Shipment of Clinical trial Supply as per Shipment order from Sponsor including: • Correct Destination for Shipment • Accurate Packaging Condition • Accurate Quantity • Temperature Integrity IP Reaches at Site, verified for physical appearance, temperature integrity, proper quantity by analyzing data logger IVRS portal automatically predicts inventory & minimum order quantity/Site can manually use portal/phone to order shipment from Central Depot IP Return/Disposal as per Study Protocol IP Shipped & Received at Airport IP Stored at Central Supplies Depot Investigator maintains IP accountability in IP Log

6. Special Conditions Pertaining to Clinical Trials Supply Management • Requirement to manage the supplies involved in supporting clinical trials • Global Trials • Multiple Countries & Regulations • Multiple Locations • Multiple Investigators • Multiple Trial Medications/”Drug Kits” • Data Collection/Reporting Devices (e.g., PDA’s, cell phones, remote sensors) • Need to coordinate delivery of supplies to multiple active sites • Different sites may have different recruitment timelines, recruitment period, rate of recruitment and no. of patients recruited • Randomization of medication administration may trigger resupply at variable intervals requiring variable safety stock at each site • Flexibility and speed of delivery is critical • Consideration of special packaging and handling requirements (e.g. cold shipping) • Historical data from older trials to understand IP and supply chain requirements • Variability in the number of patients enrolled, number of investigators, geographic distribution of trials will create larger variability in inventory and distribution of drug kits

7. Multiple Distribution Interfaces Complex Regulatory Requirements Cold Chain Transport Randomization/ Stratification Expiration Dating/Disposal Variable Enrolment & Drop-Out Rate Adaptive Trial Design Multiple Dosing/Weight Based Dosage Clinical Trial Supplies Challenges

8. Clinical Supply Chain Optimization Clinical Supply Chain Optimization Risk $ • Optimized Transport Costs • Optimized Storage Costs • Optimized Re-Order Frequency • 100% Protocol Adherence • Avoid Stock-Outs • Avoid IP Spoilage

9. Framework for Managing Effective Clinical Supplies Accurate Demand Forecasting Transport in Controlled Conditions Robust Site Inventory Mgmt Proper IP Storage & Disposal Correct Procurement • No. of Patients • No. of Sites • Correct IP Dosing Determination (Multiple/Weight Based etc.) • Duration of Treatment • Patient Randomization • Patient Recruitment Rate • Patient Drop-out Rate • Back-up Site Supplies • Type of Medication • Source of IP Procurement (COA etc.) • Supply Lead Time • Delivery Conditions • Patient Randomization • Patient Recruitment Rate • Patient Drop-out Rate • Use of IVRS for Automated Inventory Mgmt • Back-up Site Supplies • Supply Lead Times • Advance “Stock-Out” Intimation • Type of Packaging • Country Of Shipment • Import Regulations • Mode of Transport (Air Connectivity) • Time to Shipment • Storage Conditions during transit (Cold Chain etc.) • Local Support for clearing • Type of Medication • Storage Conditions as per Study Protocol • Drug Stability • Capacity Limitation • Disposal as per Protocol • Disposal Facility • Hazard to Environment • Documentation

10. Accurate Demand Forecasting Overcoming “Supplies Stock-Out” Situations • Safety Stocks • Calculating Safety Buffers Accurately based on previous statistics and data • Minimum Stock Level for Re-order • Determining appropriate Trigger Points for Stock Re-Order • Cognizance of Supply Lead Times • Integrating Supply Lead Times with Re-Order Trigger Points • Cognizance of IP Expiry Dates • Factoring IP Expiry Dates into Demand Forecasting • Close Monitoring of Recruitment & Drop-out Rate at Sites • Monitoring of recruitment & drop-out rates • Updating demand forecast for next 90 days • Use of IVRS/IWRS • Automated Inventory Management, Patient Randomization, Visits & Related IP Usage • Seamless integration from Central Storage to Sites • Trigger-Based: Min/Max Stock Levels • Predictive: Safety Stock + Prediction Window

11. Accurate Demand Forecasting Aggregate Demand Forecasting Strategy at Distribution Point • Use of Demand Forecasting, Decision Modeling Tools & Monte Carlo Simulation • Determining correct overall IP quantity • IP Unit Packaging • Weight & Volume Calculations • Dosing Schedule/Multiple Dosing • Weight Based Dosing • Determing IP quantity for individual sites • Planned Recruitment Rates • Planned Drop-Out Rates • Provision for moving IP to rescue sites • Monitoring of recruitment & drop-out rates • Updating demand forecast for next 90 days • Calculating Safety Stocks • Provisioning for Buffers • Superimposing IP quantity on weekly time scale • Refining and updating forecast on a weekly basis

12. Investigational site Investigational site Investigational site Investigational site Q Q Q Q Q Q Safety Stock Safety Stock Safety Stock Safety Stock Safety Stock Safety Stock 0 0 0 0 0 0 Illustrative Demand Forecasting at Central Depot & Sites

13. Managing Clinical Supplies for Cost & Operational Efficiency Ensuring Robust Infrastructure of local depot network for clinical supplies • Infrastructure Specifications • Space Requirements • Storage Requirements • Cold Chain • Packaging • Distance • Connectivity • IT & Technology Automation (Tracking, IVRS etc.) • Vendor RFP & Selection • Get capability data & quotes from multiple vendors • Select highest quality vendor • Negotiate bulk costs • Training of Local Depot Staff • Processes • Systems • Defined Depot Workflow • Defined Workflow & Process Chart • Defined Shipment Frequency (Days/No. Of Pick-up/Drop times etc.)

14. Managing Clinical Supplies for Cost & Operational Efficiency Continuous Data Generation, Tracking, MIS & Analysis of SLAs • Use of Web Based CTMS/IVRS • Clinical Supplies Operational Reports • Supplies Shipped • Supplies Used • Supplies Expired • Supplies Returned • No. Of Inventory Turns • Frequency of Order • Stock-outs faced • Clinical Supplies Cost Reports • Shipping Costs • Local Storage Costs’ • Expiry Costs • Costs Per Patient

15. Clinical Trials in India • Key Statistics • $ 300 Mn Clinical Research Industry • 1200 ongoing clinical trials • $ 1.2 Bn Clinical Research Industryby 2012 growing at a 40% CAGR • 1.3 Bn Patient Population, more than 70% treatment naïve • 1500+ hospitals with potential for clinical research activities • 31,000+ medical graduates and 700,000 science graduates pass out every year • India Advantages • Faster, cost-effective studies~ 30% reduction in trial completion timelines with extremely fast patient recruitment • ~ 50-60% cost reduction compared to other locations including USA and Europe • Large treatment-naive patient population with a population of 1.3 Bn+ • Strong, well-credentialed physician base with 1 Mn+ qualified and practicing doctors • Strong ICH-GCP Compliance and increasing quality levels at par with global standard • Government Initiatives and support via an increasingly progressive regulatory environment A recent survey led by 'A.T. Kearney' ranks India very close, or even slightly more advanced than China, due to the progressive regulatory environment and commitment to tight timelines; allowing global biopharmaceutical companies the ability and confidence to conduct clinical trials in country.

16. India Clinical Supply Chain Highlights • Clinical Trials Import Regulations • T-License from DGFT for all clinical trials • Application made along with DCGI Form 44 • Application Processed in 4 weeks • Samples Export Regulations • ICMR Norms for export of samples including tissue, blood, plasma samples etc. • Approval for specific sample exports • Transport Infrastructure • Presence of Global Carriers including World Courier, Blue Dart, DTDC etc. • Use of Cold Chain and transport in dry ice conditions as necessary • Few Central Labs have own local transport & supply chain infrastructure e.g. Metropolis • IT Infrastructure • Automated Tracking • Use of Data Loggers • Use of IVRS increasing • Site Storage Infrastructure • All large clinical sites have -2 to -8 and upto -80 degree cold storage facility • Most Sites have IT & Telecom infrastructure for use of IVRS

17. Karmic Clinical Supply Chain Management IP distributed to Trial Site(s) as per quantities calculated IP Quantity Calculation IP distribution per site (No of patients * Duration of Treatment) IP T-License Procurement & Import YES If Favorable Results IP Delivered @ the Airport with appropriate storage conditions NO Reporting the results on “0” min IP Delivered @ Karmic with appropriate storage conditions Root Cause Analysis IP shipment checked at sites for transit time, breakage, storage conditions etc. IP Accountability, Storage & Site requirement calculation Corrective Action Dummy/Dry Run carried out (i.e. Dummy IP is sent to the site with the temperature logger in the shipment) Sites informed about Dry Run IP Dispatched to Site

18. Illustrative Clinical Supplies Case Study Karmic Approach • Import License from DGFT procured in 4 weeks • IP reached Mumbai airport in cold chain with proper packaging and storage conditions • Karmic team had informed Sponsor of Custom Clearance process as well as a local festival holiday well in advance and requested them to make necessary arrangements to store the study drug at the airport for 48 hours before custom clearance • Karmic further got exact no. of boxes and packaging dimensions for the consignment in advance as well for planning shipping to sites • Custom clearance formalities were completed after the holiday was over. Karmic personnel were personally present to collect shipment at clearing house and the study drug was transferred within 4 hrs from the airport to Karmic’s outsourced Central Storage Depot within controlled conditions • The Central Storage Depot made necessary arrangements to unpack the consignment, make smaller batches and ship pre-determined initial order quantities to the sites on the same day through the use of the local carrier. The shipment was done in controlled cold chain conditions using dry ice and data loggers • The balance study drug was stored at -2 to -8 degrees for a period of upto 12 months post which the IP would expire • The average time for the study drug to reach at site was 14+ hrs (including air transport and local transfer). All the sites received the study drug as per the appropriate condition with “Zero” damage. • Study Description • No. of Patients: 210 • Phase : III • Therapeutic Area: Oncology • Screen failure: 25% • Patient drop-out rate: 15% • Treatment Groups: 2 • Dose Level: 2 • Study-Level Randomization • Weight-Based Dosing • Kit Types: 2 • Product Storage Conditions: -2 to -8 degrees C • Product Shelf-life: 12 months • IVRS Method: Predictive

19. Planning • Start forecasting at the time of regulatory application. • Identify shipment services provider and documentation well before study approval from regulatory agency • Site inspection and feasibility report for IP Management • Training for the Site & IP handling staff Procurement Transport • Provide study medication type and storage condition to courier service provider so that it will help for good packaging and shipment to different trial location • Identify the cycles of shipment to all study sites. • Target time to reach final destination (Study site) Therefore Tracking • - Site selection strategy should incorporate special transport regulation requirement of local region (e.g. 2 different rules for Octroi duty; UP vs. Bengal) • Site selection strategy should include air and local transport facility • Confirm the temperature requirements during shipment and local transitbefore initiating the shipment process • Before shipment initiation, find out local holiday and weather conditions Key Steps for Success Storage & Disposal • - Consider storage facility at site and make necessary arrangement before study supply shipment reach to site including training • Conduct a dry run before sending actual the study supply at sites • Disposal facility should be available near site • Disposal facility should comply with local Environmental Laws • Adhere to SOPs for disposal of surplus • Check list of documents to be produced before & after supply disposal

20. Supply Chain Management in Outsourced Clinical Research conducted by a CRO is a challenge of moderate degree Criticalities are few but important Modern techniques like Demand Forecasting, Use of IVRS/IWRS and IT based Tracking are essential Human behavioral factors as important as the external factors that result in uncertainties. These must be considered in the planning and training process Anticipation of pitfalls, planning, capacity building, adherence to SOPs and constant monitoring can address most of the issues Neither easy – nor difficult. Doable with specific inputs. Conclusion

21. Thank You Dr. Shreekant Sapatnekar Medical Director Karmic Lifesciences Tel: +91-22-32597223 (D) +91-22-25650404 (O) Ext. 215 +91-22-25610403 (F) +91-9833192331 (M) E-Mail: shreekant.sapatnekar@karmiclifesciences.com Web: www.karmiclifesciences.com Enabling> Global Pharma