This document provides a review of key trends and themes occurring within the BioPharmaceutical sector. The digest provides an accessible source of information on current market dynamics, developed through a search of international and trade press by our information team. A wide range of trends and themes have emerged from press articles reviewed over the period September to December 2011. These include consolidation and M&A activity, increasing industry collaboration, entry into emerging markets and continued restructuring and rationalisation. All of these trends will have clear implications for the real estate portfolios of pharmaceutical companies across the globe.

1. EMEA BioPharma Digest - Q4 2011
EMEA BioPharma Digest facing the sector. Restructuring and rationalisation also continue to
dominate corporate and real estate strategy.
Q4 2011
The expansion of partnering and collaboration initiatives in a
Collaboration and partnering range of new areas, and with a growing number of industry sectors
and non-industry bodies, has been in abundance in recent
on the rise as restructuring months. Partnerships have been signed with groups ranging from
McLaren (GSK) to Cognizant (AstraZeneca) and Samsung (Biogen)
continues to John Hopkins University (Eisai pharma). Rather than the
traditional tactical tie ups to expand drug pipelines, these
partnerships are aimed at improving analytics and process, driving
Overview
efficiency in data management or drawing on innovation and
This document provides a review of key trends and themes technology best practice. Large firms are also increasingly
occurring within the BioPharmaceutical sector. The digest provides collaborating with each other to improve the likelihood of drug
an accessible source of information on current market dynamics, discovery and commercialisation, with BMS and J&J agreeing to
developed through a search of international and trade press by our collaborate on hepatitis C research. P&G’s consumer healthcare JV
with Teva provides another example of the rapidly changing
information team.
landscape in the sector. Real estate will increasingly need to cater
for this growing number of collaboration and partnering initiatives.
Restructuring and rationalisation also continue to dominate
strategy. After Merck’s announcement in the summer of a
headcount reduction of 14% or some 13,000 positions, further
restructuring and rationalisation was seen in Q4. Novartis
announced that it would be reducing headcount and closing facilities
in Switzerland and the US, and companies including Pfizer,
AstraZeneca and Sanofi also indicated plans to rationalise and
restructure operations. A further sign of the pressure on the sector
A wide range of trends and themes have emerged from press
to adapt and recast itself as margin pressure intensifies was seen
articles reviewed over the period September to December 2011.
with the case of Abbott, which announced plans to split into two
These include consolidation and M&A activity, increasing industry
quoted companies, in a move that it hopes will boost its valuation.
collaboration, entry into emerging markets and continued
restructuring and rationalisation. All of these trends will have clear
Targeted investment and expansion is also being seen in EMEA
implications for the real estate portfolios of pharmaceutical
and more widely. GSK announced plans to build a new factory in the
companies across the globe.
UK, which will create 1000 jobs, while Roche is set to open a $270m
R&D centre in Basel, and Pfizer announced a $200m investment in
Market Observation
an expansion of its plant in Dublin. Emerging markets also continue
As 2011 draws to a close the pharmaceutical and broader life to see significant investment from the pharmaceutical and life
science industries have witnessed another year of tumultuous science sector with Pfizer building a plant in Saudi Arabia, Teva
change. After the large scale mergers and acquisitions over the first expanding in Russia and a range of companies investing and
half of 2011, the fourth quarter has underlined the importance of expanding in China. 2012 looks set to mark a continuation and
collaboration and partnering in solving many of the challenges acceleration of the rapid change in the structure, geography and
scope of the biopharma and life science industries seen in 2011.

2. Pulse • BioPharma Digest • Q4 2011 2
Financial performance marketing costs. Net income was $969 million, or 56 cents per
share. That's up from $949 million, or 55 cents per share, a year
Sanofi reported a 26% rise in third-quarter net profit, lifted by the
earlier. Associated Press Newswires, 27 October 2011.
inclusion of U.S. biotech firm Genzyme and lower restructuring
costs, but France's No. 1 drug maker is facing increasing pressure
AstraZeneca said net profits more than doubled in the third quarter
from generic competition as patents on its blockbuster drugs expire.
after the sale of its dental division offset modest sales growth.
The Paris-based pharmaceutical major said net profit increased to
Earnings after taxation surged 124 percent to $3.48 billion (€2.48
€2.03 billion in the quarter ended Sept. 30, compared with €1.61
billion) in the three months to September from $1.55 billion in the
billion a year earlier. Dow Jones, 03 November 2011.
same period of last year, the company said in a results statement.
Agence France Presse, 27 October 2011.
Pfizer's third-quarter net income of $3.74 billion and revenue of
$17.2 billion beat expectations, but revenue growth all came from an
Bayer said bottom-line profits more than doubled in the third
acquisition and favourable exchange rates. Associated Press, 01
quarter, driven in part by strong sales in emerging markets. Bayer
November 2011.
said in a statement that group net profit jumped 125.3 % to €642
million ($899.3 million) in the period from July to September. Agence
Watson Pharmaceuticals that its third-quarter net revenues to 30
France Presse, 27 October 2011.
September 2011 rose by 23% to $1.1bn (€804m), compared with
$882.4m in the same quarter of 2010. M2 Pharma, 01 November
Merck KGaA has posted a good set of figures for the third quarter,
2011.
driven by sales of its multiple sclerosis blockbuster Rebif. The
Darmstadt, Germany-based group recorded a 7.5% rise in net
GlaxoSmithKline GlaxoSmithKline posted its third-quarter results
profits to €226.6 million, helped by a 56% reduction in taxes. Group
which reveal a 3% increase in operating profit, before major
revenues increased 3.8% to €2.44 billion euros. Turnover at the
restructuring, to £2.18 billion, while group turnover was up 3% at
Merck Serono drugs unit rose 5.4% to €1.47 billion. Pharmatimes,
constant exchange rates, to £7.10 billion. Pharmaceutical and
26 October 2011
vaccines sales inched up 1% to £4.63 billion. Pharmatimes, 26
October 2011
Eli Lilly, whose top-selling schizophrenia drug will face cheaper
generics, said quarterly earnings fell due to higher expenses, and
Astellas Pharma has posted a strong set of financials for the six
the company's shares fell 1%. While third-quarter profit matched
months ended September 30 which show that net income rose
Wall Street forecasts, Lilly warned that Zyprexa will face a "rapid
17.0% to 51.33 billion yen, about $657.2 million, due in part to lower
and severe decline" in revenue after the $4.5 billion-a-year product
R&D costs. Sales were up 4.8% to 483.93 billion yen. For the full
begins facing competition from cheaper generics in the United
year, the Tokyo-based firm says it now expects net profit of 85
States. Reuters News, 20 October 2011.
billion yen, up from an earlier forecast of 81 billion yen.
Pharmatimes, 1 November 2011
Johnson & Johnson posted a solid set of figures for the third
quarter, with sales of pharmaceuticals outside the USA making up
Merck & Co unveiled yesterday a sharp rise in third-quarter
for declines at home. Group net earnings fell 6.3% to $3.20 billion,
earnings, driven by a surge in vaccine sales and cost-cutting
while turnover rose 6.8% to just over $16.00 billion. Worldwide
measures, the Financial Times reported. Revenues climbed 8% on
pharmaceutical sales were up 8.9% to $5.98 billion, but they fell
the year to $12 billion (€8.5bn), while net income soared to $1.69
6.1% in the USA, hurt by generic competition to key products.
billion from $342 million, or from $0.11 per share to $0.55. British
Pharmatimes 19 October 2011
Business Monitor, 29 October 2011.
Roche posted a 15% fall in third-quarter sales, hit by the surging
Shire announced that its net profit jumped to $192.9m ($136.4m), or
Swiss currency, the Financial Times reported. The company said
$0.35 per share, for the third quarter of 2011 from $96.3m, or $0.17
that in the first nine months of the year its sales fell 13% to CHF
for the same period of 2010. M2 Pharma,28 October 2011.
31.49 billion ($35bn/€25.5bn), while when translated into dollars
they grew 6% and were flat at constant exchange rates. British
Bristol-Myers Squibb reported a 2% increase in its third-quarter
Business Monitor, 13 October 2011
profit, as price increases and higher sales of several key medicines
were mostly offset by higher taxes and increased research and

3. Pulse • BioPharma Digest • Q4 2011 3
Consolidation, Mergers and Acquisitions Acino’s acquisition of Cephalons MEA operations and Valeant’s
purchase of Australia’s iNova for $615m provide good examples of
2011 has seen a continuation of the steady flow of merger and these.
acquisition activity seen throughout 2010 with a number of multi-
billion dollar deals agreed. In the fourth quarter Gilead Sciences The table below examines some of the key mergers and
acquisition of Pharmasset was the largest deal at $11bn, but a acquisitions that were planned, agreed or completed in the last
significant number of smaller deals were done between big pharma quarter.
and biotech companies and with companies looking to expand their
geographic footprint.
Notes / transaction
Company Target Deal size / stake Region Source / Date
stage
Cephalon (MEA
Acino €80 million MEA Global insight, 18/10/11 Agreed
operations only)
Baxter Baxa corp $380 m US, UK Reuters, 25/09/11 Agreed
Pathway Medical
Bayer undisclosed US Dow Jones, 01/09/11 Completed
Technologies
Italy,
Biogen Dompe undisclosed M2 Pharma, 12/09/11 Completed
Switzerland
Gilead Sciences Pharmasset $11 bn Global Telegraph, 22/11/11 Agreed
Autifony
GSK £1.25m UK InPharm, 22/08/11 Agreed
therapeutics
Pfizer Icagen undisclosed Global India Pharma news Completed
Pfizer Excaliard n/a US India Pharma news, 23/11/11 Completed
Roche Anadys Pharma $230 million Global EP Vantage, 17/10/11 Agreed
Universal
Sanofi undisclosed India AFP, 24/08/11 Agreed
Medicare Unit
Lectus
UCB therapeutics undisclosed UK M2 Pharma, 23/11/11 Completed
Valeant iNova $615 m Australia Pharmatimes, 22/11/11 Agreed

4. Pulse • BioPharma Digest • Q4 2011 4
Collaboration, Partnering, Joint Ventures
In addition to M&A activity collaboration and partnering continued
to be a key focus for the sector over the last quarter, as the table
below demonstrates, with collaboration and partnering seen
between a number of organizations and in a wide range of fields:
Company Partner Field Source Notes
Clinical trial process Data management and
AstraZeneca Cognizant Pharmatimes, 01/12/11
efficiency analysis
Development and
Biogen Samsung Biosimilars Pharmatimes, 07/12/11
Sales
BMS J&J Hepatitis C Pharmatimes, 05/12/11 Drug development
Discovery,
Eisai Pharma John Hopkins University Neurological disorders Pharmatimes,19/10/11 development and
commercialisation
Turkey-focused
Eli Lilly Mustafa Nevzat Generics WSJ, 02/09/11
collaboration
Chermical business Partnership, joint
GSK McLaren Engineering, analysis,
newsbase, 26/09/11 projects
Discovery,
Merck BGI Genomic technology Pharmchem, 30/10/11 development and
diagnostics
India Pharma news, Partnership and JV
P&G Teva Consumer healthcare
03/11/11 (PGT Healthcare)
Healthcare
Pfizer Humana Pharmatimes, 14/10/11 Research collaboration
management
Pfizer Medco health solutions Product efficiency AFP, 27/10/11 Research collaboration
Jilin Guoyuan animal health India Pharma news,
Pfizer Animal Health Animal health vaccines China-focused collaboration
08/09/11
Development and
Roche PTC Therapeutics Genetic disorders Pharmatimes, 29/11/11
commercialisation
Servier Miragen Therapeutics Cardiovascular Pharmatimes, 19/10/11 Drug development

5. Pulse • BioPharma Digest • Q4 2011 5
Rationalisation, Restructuring, Relocation mid-2012 and 2014. European Intelligence Wire, 23rd September
2011.
AstraZeneca says it will reduce its US sales force by 1,150
managers and reps as part of its strategy to operate more
Pfizer is likely to cut 220 jobs in Spain. It is for the second time in
efficiently in the country. This equates to about 24% of the
less than a week that the company has revealed plans to cut
company’s sales organisation in the USA and is on top of a
hundreds of jobs in a market. The company is working with
streamlining plan announced in October for its commercial
Spanish officials on a 11 percent workforce reduction there, or
business, which will result in the loss of 400 posts. The cuts are
about 220 jobs, on the heels of 500 job cuts in Germany. India
also in addition to the major restructuring programme the Anglo-
Pharma News, 22 September 2011.
Swedish drugmaker announced in January 2010; that
programme will see 8,000 jobs shed by 2014. Pharmatimes, 7
GlaxoSmithKline merged its consumer and nutritional
December 2011.
healthcare divisions in the UK to create a £1bn business and
bring together its brands including Lucozade, Ribena, and
Teva said that it will merge two Japanese subsidiaries around
NiQuitin. The healthcare firm hopes that merging the two
mid-2012. The integration of Taiyo Pharmaceutical Industry Co.
divisions will help it become the world’s “first fast-moving
and Teva-Kowa Pharma Co. will give birth to Japan's largest
consumer healthcare (FMCH) company” by combining science
generics manufacturer, with annual sales of about 70 billion yen.
with insight-driven consumer innovation. Marketing Week, 16th
Nikkei Report, 18 November 2011
September 2011.
Sanofi is in the process of restructuring its research and
Pfizer plans to launch a reorganisation process at its French unit,
development operations and may cut more than 1,400 jobs in the
in view of the expected loss of the patent of its flagship drug
division. The company's spokesman refused to comment on the
Tahor in May 2012. Les Echos, 16th September 2011.
figures given by the CGT union saying that the company is still in
the process of evaluating on how many jobs would be impacted.
Merck & Co. will eliminate up to 13,000 jobs, about 14% of its
India Pharma News, 14 November 2011.
work force, in the latest cost-cutting effort by a big drug maker
coping with an aging product lineup. The drug giant said the
Novartis will shrink its domestic workforce by nearly 10% and
layoffs would be in addition to some 17,000 job cuts already
shut down two plants as part of its ongoing efforts to offset pricing
planned and would cut spending by an extra $1.3 billion when
pressures. Novartis will let go of 1,100 Swiss employees and
finished at the end of 2015. Also contributing to the savings are
eliminate 900 US jobs. It plans to create 700 jobs in lower-cost
the closings of unspecified offices and manufacturing plants. Dow
countries within three to five years but no specific locations were
Jones Chinese Financial Wire, 01 August 2011.
revealed. British Business Monitor, 30 October 2011.
Abbott of the US is to split into two quoted companies, in a move
that it hopes will boost its valuation. Its decision will create fresh
pressure on other diversified healthcare groups to separate their
pharmaceuticals activities from medical devices and other
products. The group plans by the end of this year to spin off its
patented drugs arm into a separate “proprietary pharmaceuticals”
company with a new name. It will operate independently from
Abbott’s remaining “diversified medical products” business, which
will continue to develop and sell medical devices, diagnostics,
nutritional products and branded generic drugs. FT, 19/10/11
Merck-Sharp & Dohme, a subsidiary of US pharmaceutical firm
Merck, announced its intention to close the San Agustin de
Guadalix production unit in Madrid, which will result in the layoff
of 140 people. The workers will leave work gradually between

6. Pulse • BioPharma Digest • Q4 2011 6
Strategy expanding in China. T Handelsblatt Wirtschafts- und
Finanzzeitung 02 September 2011.
Eli Lilly will continue to build its business in China, even as it
faces challenges ranging from intellectual property theft to a bias
in medical benefits schemes against brand-name medicines, Expansion and investment
Chief Executive John Lechleiter said in a recent interview. Dow
Jones, 21 November 2011. Roche announced the opening of a new CHF250 million ($271
million) technical research and development center in Basel,
Bayer expects sales to increase 60% in the Asian region by 2015 Switzerland. Dow Jones, 25 November 2011.
and plans to further expand its production, distribution network
Pfizer will build its first production plant in the GCC in Saudi
and research activities in the region. "We aim to achieve a more
Arabia’s King Abdullah Economic City (KAEC) on a land plot of
than 60% increase in our sales in Asia by 2015," Chief Executive
65,000 sq m. The manufacturing facility will be located at the
Marijn Dekkers said at a press conference in China. Dow Jones,
Industrial Valley of the city on the Red Sea coast. Middle East
15 November 2011.
and North Africa Today, 15 November 2011.
Roche will start selling its products at a discount in developing
GlaxoSmithKline is moving ahead with plans to build its first
economies in an important change in strategy by pharmaceutical
new UK factory for 30 years. The maker of Panadol and
companies that have been selling expensive biological
Lucozade wants to expand in the UK following tax breaks on
medicines, the Financial Times reported. Agence France Presse,
innovation introduced by Chancellor George Osborne. Around
28 September 2011
15,000 of its 96,000 employees are based in Britain. The
company hopes to create 1,000 more jobs at its new plant, which
Bayer intends to double the investments in research and
will also result in more taxes flowing in to the UK Exchequer.
development (R&D) in bio-science by 2015 in line with the new
Daily Mail, 1st November 2011.
strategy of its plant protection division CropScience to focus on
eco-friendly insecticides. Financial Times Deutschland, 19th Teva signed an investment agreement for the construction of a
September 2011. production facility in the pharmaceutical cluster region in
Yaroslavl in Russia . Pharmazeutische Industrie, 31 October
Novartis is targeting further savings in marketing and production, 2011.
Chief Executive Joe Jimenez tells Swiss newspaper
Handelszeitung. "We have spent too much money on marketing Merck is expanding its presence in Singapore by investing in
and selling our drugs," Jimenez says in an interview to be new manufacturing, marketing and research activities. The move
published Thursday. Further savings are also planned in the is part of an agreement between Merck and Singapore's
production area, Jimenez says, which could mean plant closures. Economic Development Board (EDB). As part of the agreement,
Dow Jones, 13 September 2011. Merck will invest more than US$250 million (S$318 million) over
the next decade to improve its manufacturing facilities in Tuas.
Sanofi said it is on target for 5% average sales growth between Straits Times, 22 October 2011
2012 and 2015, despite taking profit hits from the loss of drug
patents. The drug company is going to focus on new projects and Novartis has resumed plans to build a vaccines plant in Brazil.
the integration of its U.S. acquisition Genzyme, as well as Novartis plans to invest $300 million in the factory, which will be
bolstering its emerging markets program, which it expects to built in the northeastern Brazilian state of Pernambuco. AE Brazil
represent 38%-40% of its sales by 2015. The company said it is Newswire 19 October 2011.
centering activities around six growth areas: emerging markets,
Genzyme has formally opened its €150m expansion of its facility
human vaccines, diabetes, consumer health care, innovative
on the Old Kilmeaden Road in Waterford, Ireland. Waterford
products, and animal health care. DowJones, 06 September
News and Star, 17th October 2011.
2011.
Sanofi has unveiled groundbreaking regeneration plans to open
Chemical and drugs company Merck is to strengthen its position
a supermarket and a multi-million pound firefighters’ academy in
in laboratory equipment by undertaking smaller acquisitions and
Dagenham. The company’s “legacy plans” have taken giant
strides with proposals to turn its ailing factory in Rainham Road

7. Pulse • BioPharma Digest • Q4 2011 7
South into a major business park, including a large supermarket, children, the latest move by global medical product companies to
high-tech industries and a 20,000-patient polyclinic and dental increase sales in the country. Abbott expects the Jiaxing plant to
school. The 108-acre cancer drug factory will shut in 2013 with open in 2013 and employ about 300 people. The company
the loss of 450 jobs but Sanofi anticipates the thriving hub, called forecast sales of its nutritional products in China would surpass
businesseast, will triple job creation with up to 1,300 people $1 billion by the end of 2014, up from more than $350 million last
employed on site. Barking and Dagenham Post, 17th October year. Reuters News, 16 August 2011.
2011.
AstraZeneca PLC, one of the world's leading pharmaceutical
Other
companies, said it would invest $200 million to launch a new
manufacturing facility in China to meet growing demand, AstraZeneca is to hand over free of charge to external
including in rural areas. Construction work on the project, in the scientists full access to more than 20 experimental drugs on
China Medical City in Taizhou of East China's Jiangsu province, which it has ceased research, in a pioneering effort to boost
is scheduled for completion by the end of 2013, creating medical discovery. The Anglo-Swedish pharmaceutical group will
approximately 600 jobs. Industry updates, 13 October 2011 offer academics the chance to use its compounds – nearly all of
them still on patent – and to examine the results of safety and
Pfizer is investing a further $200 million at its Grange Castle
efficacy tests it has already conducted in animals and humans.
plant in Dublin. The US group is expanding the number of
By “crowdsourcing” the compounds to top scientists, the move
processing suites and the biotechnology manufacturing plant in
could lead to the development of new treatments, offering
Clondalkin to allow it increase production capacity. The Irish
AstraZeneca the prospect of commercial gain while reducing the
Times, 28 September 2011.
amount of investment it will make itself. If the initiative is
successful, it could be a model for future collaboration that other
Taoiseach Enda Kenny has opened a new €100m research and
pharma companies would use. FT, 05 December 2011
development centre at the Merck Sharp and Dohme
pharmaceutical plant in South Tipperary. The Nationalist and
The value generated by a dollar invested in pharmaceutical
Tipperary Star, 23rd September 2011.
R&D has fallen by more than 70% in recent years, and the
The France-based Sanofi Group plans to build a high tech industry is in worse shape than many realise. They are some of
pharmaceutical plant in Vietnam’s southern economic hub of Ho the key points to come out of a new study from the consulting
Chi Minh City, said Thomas Kelly, senior vice president of Sanofi firm Oliver Wyman, which looked at the 450 new molecular
Asia. Vietnam News Brief Service, 1st September 2011. entities approved by the US Food and Drug Administration
between 1996 and 2010. The report claims that this period
Novo Nordisk has announced that the company is investing covers an 'era of abundance' from 1996 to 2004 and an 'era of
around €134 million in two new office buildings with surrounding scarcity' from 2005 to 2010, divided by the September 2004
green space in Bagsvaerd, Denmark. The project is expected to withdrawal of Merck & Co's Vioxx (rofecoxib). Pharmatimes, 2
create more than 300 jobs during the construction phase. The December 2011
new office premises will house Novo Nordisk's top management,
1,100 administrative employees and a number of shared Pharmaceutical industry groups have broadly welcomed a
facilities. This will take place in October 2011, and the new landmark ruling by the Court of Justice of the European Union
corporate centre is expected to be ready for occupancy at the (CJEU) clarifying the rules on extended patent protection for
end of 2013. Datamonitor, 26 August 2011. multi-disease products. The Association of the British
Pharmaceutical Industry (ABPI) said the ruling will mean "greater
Amgen is to create up to 100 new permanent jobs in Dun patent protection for medicines developed by the pharmaceutical
Laoghaire, Co Dublin, when it completes the expansion of its industry, which in turn will encourage the research and
plant there. The biotechnology company has already promised to development of new treatments for unmet clinical need.
keep the 280 jobs in the facility, which it acquired from Pfizer in Specifically, companies involved in the development and sale of
March this year. The Sunday Times, 21 August 2011. products that contain multiple active ingredients, we trust will
benefit from the ruling," said a spokesman. Pharmatimes, 25
Abbott Laboratories said it will spend $230 million to build a November 2011
facility in China to make powdered milk products for infants and

8. Business Contact: Corporate Solutions
Charles Tillett
Life Sciences Sector Lead
EMEA Corporate Solutions
Jones Lang LaSalle
London
+44 (0)20 7852 4643
charles.tillett@eu.jll.com
Report Contact: Research
Tom Carroll
Associate Director
EMEA Research
Jones Lang LaSalle
London
+44 (0)20 3147 1207
tom.carroll@eu.jll.com
BioPharma Digest – Q4 2011
Pulse reports from Jones Lang LaSalle are frequent updates on real estate market dynamics.
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