Sustainability Report 2012 Lek d.d.

Company Profile Sustainability Report 2012 – Lek d.d. 14 1.3.3.2 Menge‰ production site The Menge‰ site features the development and manufac- ture of active pharmaceutical ingredients, the production of solid dosage forms, the Antiinfectives - Genetics deve- lopment department, and the Quality unit. Furthermore, the site comprises one of the main biopharmaceuticals development and production centers of Sandoz, which is the global leader of biosimilars production. APIs are manufactured by means of biological (fermenta- tion) and chemical procedures (organic syntheses) followed by physical and chemical procedures for isolation and purifi- cation of active ingredients. At the Menge‰ site, the manufac- turing has been carried out since 1946, and since 2000 it has witnessed fast development of biopharmaceuticals. In 2012, the API production volume grew again. Of great importance is the production of tacrolimus where we maintain a competitive advantage through continuous tech- nological improvements. One of the key achievements of the Menge‰ site was the opening of new cell and molecular biology laboratories in the Biopharmaceuticals Development Center. The Menge‰ site successfully passed all the inspections. 1.3.3.3 Lendava site The Lendava site comprises the Antiinfectives production unit and a packaging center. At the Lendava site, we manufacture Potassium clavulana- te, the key ingredient of a broad-spectrum antibiotic, one of Lek’s and Sandoz’ leading products, and Gentamycin sulphate. The manufacture is based on standard biotech- nology which is the result of the company’s own know-how. Lendava is the leading location for the manufacturing of Potassium clavulanate in the Sandoz Group, and demand for it continues to be high. Similarly to the previous years, the production of Potassium clavulanate, the leading product, posted record results, a combination of physical growth and improved technologies. By eliminating the bottlenecks, we increased our production capacities and were able to meet all the market requirements. Additional investment in production capacities and auxilia- ry infrastructure, and several improvements to manufactu- ring processes resulted in lower production costs as well as improved energy and environmental efficiency. The site successfully passed all the inspections. The Packaging Center Lendava (PCL) where the filling and packaging of pharmaceuticals takes place, supplies the markets of more than 60 countries in Europe and worldwide. It is one of the fastest growing Sandoz locations. In 2012, 1.4 billion tablets and capsules were packaged in the PCL, the result due to constant productivity growth. At the same time, the center focuses on its key objective of providing a high le- vel of customer service with a high level of response to the changing market requirements, and with internal flexibility. The total capital investment value exceeds EUR 30 million. According to the 2013 plan, a production capacity of as many as 10 packaging lines is anticipated, which will be further expanded in order to consolidate our position of a strategic manufacturing site within the Sandoz global production network. The Lendava production plant is strengthening its position of one of the major business entities of the south-eastern region of Slovenia. The number of employees, mostly of the local origin, is still growing. 1.3.3.4 Prevalje production site At the Prevalje site, a production plant for penicillin pro- ducts, we manufacture a broad-spectrum antibiotic, one of Lek’s and Sandoz’ leading products. It is manufactured in the form of tablets or powders for oral suspensions, and in the form of mixtures and granules, intermediate products sold for further processing. For the Prevalje site, 2012 was one of the most success- ful years ever. According to the Sandoz guidelines, special emphasis was placed on quality. We successfully passed all the inspections performed at the site, while assuring also the quality of our incoming materials. We manufactured a record 393 million tablets and 13 million oral suspensions, a 30% increase over the plan. In 2013, even a higher growth rate is expected due to the installation of a new tablet-coating pan which will improve the production capacity for coated tablets by almost 50%. We reorganized the dispensing room to provide more space and to improve the flow of materi- als. In addition, we renovated the parking area to meet our employees’ requirements.