Lek's expertise plays a crucial role in the development of biosimilars, which are an important pillar in the Sandoz strategy – Sandoz is the first in the world to offer two biosimilars, registered according to the centralized European Union procedure

Lek opens Biopharmaceuticals Development Center

4. 10. 2007

Menges, October 4 – “Today we are witnessing an event of which we at Lek are immensely proud,” said Vojmir Urlep, CEO of Lek, a Sandoz company, at the official opening ceremony for the Lek Biopharmaceuticals Development Center in Menges. The Development Center, which is one of six biopharmaceuticals centers at Novartis, will help consolidate Lek and Sandoz’s position in biopharmaceuticals, and Lek’s expertise will contribute to developing new biosimilars for Sandoz global markets, including Slovenia.

Lek began construction of the Biopharmaceuticals Development Center last autumn, during the celebration of the company’s 60th anniversary. The new Development Center complements PORT 1, the first manufacturing plant for recombinant technologies in Slovenia, which Lek opened in Menges in February 2004. To date, Lek has invested nearly 40 million euros in biopharmaceuticals, of which the investment in the first stage of the Development Center in Menges was valued at nearly seven million euros, while in the future Lek will continue to invest in laboratory equipment in order to upgrade the pilot development capacities.

“The opening of the Development Center for biopharmaceuticals, a field which develops, manufactures and markets biosimilars, is a major step towards the future. We are opening a top-notch development center, the result of the expertise of Lek’s professionals and the only one of its kind in Slovenia, which will strengthen the leading position of Lek and Sandoz in the pharmaceuticals industry of tomorrow. By entering the biopharmaceuticals field we are breaking the ice and creating access to new knowledge which will not be available only to our employees, but also to the universities and institutions with whom we have been cooperating closely for all these years. The opening of the Biopharmaceuticals Development Center is not only a source of pride for Lek, but also a significant recognition of Slovene expertise. Lek is closely involved in several fields of Slovene research and development. Therefore today is the result of the joint efforts of Slovene science,” said Lek CEO Vojmir Urlep.

100 Lek associates in the fields of microbiology, biology, biochemistry, chemistry, pharmacology and other sciences work on the development of biosimilars, and their expertise will make a crucial contribution to the development of these medicines for Sandoz global markets. “The PORT 1 plant for biosimilars, which we opened three years ago, is being joined by a modern development center where all important development functions will be located in one place. This allows us to carry out our activities faster and better, and thus lower development times. The center will include bioprocessing laboratories with bioreactors, which are designed to develop and optimize bioprocesses. Part of the building will be dedicated to laboratories for the development of isolation and purification processes, and the center will also include analytical laboratories where analytic methods will be developed and support for development processes will be provided,” explained >b>Dr. Violeta Gabrijelčič, Head Biopharmaceuticals at Lek>/b<, who added that the state-of-the-art technology at the nearly three thousand square meter Development Center is designed to be environmentally friendly.

At the opening of the new Biopharmaceuticals Development Center, >b/b<, said: “Biosimilars are an important pillar in the Sandoz strategy. And the site here in Menges is a cornerstone for implementing it. It will further enhance our development capabilities and strengthen our leadership position in this new area. Besides highly qualified employees, the political and social environment is an essential factor for investment decisions. In this respect, Slovenia has a lot to offer, making it an attractive location for high-tech investments like this Center.”

>b/b> Biopharmaceuticals is the most modern and fastest growing branch of pharmacology. Lek began in-house development of genetic technologies in the 1980s. The Biopharmaceuticals unit was established at the beginning of 2002, and is responsible for the development, manufacturing and analysis of biological active ingredients. In Menges in February 2004, Lek opened PORT 1, the first manufacturing plant for recombinant technologies in Slovenia.

The first biopharmaceuticals were registered around 20 years ago, and with the expiration of their patent protection the opportunity to develop biosimilars arose. At the end of 2005, Europe was the first in the world to adopt legal bases for the registration of biosimilars (EU Directive 2004/27/EC), thus enabling their registration for the first time in history. In April of 2006, the European Commission issued Sandoz a marketing authorization for recombinant growth hormone (somatotropin), which is used for the treatment of deficient growth in children and adults, and is the first biosimilar in the world to be registered in the EU, the USA and Australia. In August of this year the European Commission issued Sandoz a marketing authorization for recombinant erythropoietin (Epoetin alpha). Epoetin alpha, which is used to treat anemia in cancer and kidney patients. The acquisition of this marketing authorization is therefore an important milestone in the Sandoz commitment to the biosimilars sector.

In Slovenia and around the world, the market for biopharmaceuticals is growing twice as fast as the overall pharmaceuticals market. Due to the difficulty of researching and developing them, biopharmaceuticals are very expensive. Biosimilars will be less expensive and thus accessible for more people. The concept of biosimilarity, as set out in the European medicines law, requires the highest level of professionalism in the fields of science, technology and logistics. Therefore for pharmacists, doctors and patients, the phrase “biosimilar” means a biological medicine which is as high-quality, safe and effective as the original drug, but is available at a lower price.

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Lek, a Sandoz company, is one of the pillars of leading world generics company Sandoz. It operates as a global development center for products and technologies, as a global manufacturing center for active pharmaceutical ingredients and medicines, as a competence center for the development of vertically integrated products, as a Sandoz competence center in the field of development and manufacturing of biopharmaceutical products and as a supply center for the markets of CEE, SEE and CIS, sales Slovenia and sales services for Sandoz’s global markets. Lek d.d. employs about 2,820 people and achieved total sales of USD 904 million in 2006. For further information please consult http://www.lek.si

Sandoz, a Division of the Novartis group, is a global leader in the field of generic pharmaceuticals, offering a wide array of high-quality, affordable products that are no longer protected by patents. Sandoz has a portfolio of more than 840 active substances in over 5 000 forms worldwide. Key product groups include antibiotics, treatments for central nervous system disorders, gastrointestinal medicines, cardiovascular treatments and hormone therapies. Sandoz develops, produces and markets these drugs along with pharmaceutical and biotechnological active substances and anti-infectives. In addition to the strong organic growth in recent years, Sandoz has made a series of acquisitions including Lek (Slovenia), Sabex (Canada), Hexal (Germany) and EonLabs (U.S.) and sells its products in more than 110 countries. In 2006, Sandoz employed around 21,000 people worldwide and posted sales of USD 6 billion.

Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. Novartis is the only company with leadership positions in both patented and generic pharmaceuticals. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics and leading self-medication OTC brands. In 2006, the Group’s businesses achieved net sales of USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 101,000 people and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.

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This press release contains statements and conclusions based on projections of Lek’s future business operations. These estimates are derived from the best information currently available. In case these forecasts prove unreliable, the actual results could prove different from those projected.

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For further information contact:

Katarina Klemenc Dinjaški

Corporate Communications

Lek Pharmaceuticals d.d.

Phone: + 386 1 580 22 43

Fax: + 386 1 580 24 32