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Promote TCM Globalization by Scientific & Technological Innovation

Yan Xijun, Chairman of Tasly Group

August 11, 2011

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I. Innovation in the Standards, Technologies and Methods of TCM Products

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TCM Globalization: 3 steps → Prescription Drug

Go out: out of China (spirit of innovation)Probe, Practice, Pioneer & Push

Go in: to the world (technical upgrading)integration of TCM and western medicine, technical standard synchronization, international “drug”

Go up: to high-end (clinical)(doctors, patients and medical institutions) accept and useTCM

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• Standard Compliance• Language Barrier-free

• Attractive Product• Customer Trust

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Essential StrategyTCM Globalization

Chances and challenges co-exist

Business opportunities and difficulties mix

Scientific Methods

Daring Innovation

Bold Practice

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Systematic Innovation

TCM Globalization Means Systematic Innovation

• Product – Technology – Theory• Basic Study – Application Study – Industrial

Development• Enterprise – Industrial Chain – Industrial Cluster• R&D – Production – Logistics – Marketing – Usage• Individual – Team – Group• Product Export – Brand Building

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1. On the basis of multi-component TCM,

innovate the model of TCM product development and

promote systematic building and overall upgrading

of the industrial chain of modernized TCM

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TCM RebuildingChinese Herb & Prescription

Multi-component TCM

Active Ingredients New Direction

Modernized TCM preparation made from active ingredients of Chinese herbs on the basis of TCM theories and by means of modern technologies

Extract

Active Positions & Ingredients

Specific Pharmacological Actions

Compound of Clear Chemical Composition

Chinese Herb —— New Drug——

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Basically solid physical foundation, roughly clear working mechanism and more precise clinical orientation;

Suitable for modern manufacturing technologies as well as quality standards and requirements;

Favorable for acquiring patent-protected intellectual property rights;

Easy to enter major international markets as prescription drug;

Helpful for differentiated instruction, research, management and development.

Combination Single Component MonomericCompound

MonomericCombination

ComponentDetermination

Direction & Features of Multi-component TCM Studies

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Establish a technical platform for multi-component TCM products and a TCM component library as the technical system and material base

By now 13,000-odd components have been

made from 300 herbs and 20 Chinese drugs,

which physically lays foundations for new TCM

drug development

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International standards (ISO9000, ISO14000 sFDA GMP & TGA GMP) adopted

Compatible with all quality standards on planting (GAP), extraction (cGEP), manufacture (cGMP), lab study (GAP), clinical study (cGCP) and supply (GSP)

CNAS-certified quality inspection center

Build an International Practices-compliantBilingual SOP System & GxP Template

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Form a robust industrial chain: for the purpose of technical integration, industrial collaboration, linkage between the upstream and downstream, and overall standardization

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Speed up IT-based Industrial Upgrading

Build an advanced manufacturing platform for modernized TCM products with standardized management, streamlined operation and informationized control to achieve the qualities as special commodity and modern drug product

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2. Innovate Research Methodologies

by Means of International Registration

of New TCM Drugs

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Philosophies Priorities

• Teamwork• Sharing• Win-win

Feasible Program

Reliable Data

Typical Results

Principles

ScientificPrudentEthicalFaithful

Philosophies, Principles & Priorities for International Registration

Direction of Innovation: International Registration of Prescriptions Used for Years

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Marketing

NDA

IND

ApprovalPhase IIIPhase IIPhase IPre-clinical Study

Discovery

Clinical Use orPhase-IV Clinical Study

UnderstandWorking Mechanism

OptimizeApplication Program Pursue Best Effects

Model of Innovation: Reverse R&D Based on Clinical Experience

From the PhaseFrom the Phase--II clinical study, directly study the best dose, the best II clinical study, directly study the best dose, the best usage program and applicable people with the active ingredientsusage program and applicable people with the active ingredients and and working mechanism roughly understood, and then carry out some working mechanism roughly understood, and then carry out some fundamental research tasksfundamental research tasks

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Create Opportunities Build Platforms

• Know existing gap• Take on an equal basis• Discuss & solve problems

• For technical innovation• For standard compatibility• For talent recruitment• For resource consolidation

Base on the project, consolidate R&D resources, seek breakthroughs in key points, carry out in-depth communication, reach understanding and achieve consensus

TCM Product Registration

Approach of Innovation: Based on TCM Product Registration

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The Road of Dantonic® to FDA-approved Registration in the U.S.

• Included in products for official promotion of TCM globalization

1996 1997

Stage 1: 1996-2003, take steps, find gaps and determine direction

1998 2003

• First composite CPMaccepted by FDA as IND

• First IND approved (56,956)

• First national GAP-certified Danshen base in Shangluo, Shaanxi

• Concentrate on raising quality standards, building industrial chain and conducting clinical studies after domestic launch rather than rush into international clinical research in haste

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Stage 2: 2004-2010, Phase-II clinical trials completed, Phase III started

2004• Multiple talks with FDA and clinical indication determined:

chronic stable angina pectoris

2006• Second FDA IND approved (70,359)

2007• TGA Approval obtained from AUS & NZ• Worldwide multi-center clinical trials

2008• Marketing in CAN approved as (therapeutic)

traditional drug

2009.12.5• 18-month Phase-II clinical trials completed

2010• Review Phase II and Start Phase III

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Dosages & Dosage Range

Patient Groups,Ages & Baselines

Obedience

Different Dosage

Regimens

PharmacodynamicPeak/Trough

EffectsCourse of TreatmentBasic MedicationCombined Medication

Trial Protocol

Methodological Innovation:

Integrated application of

multiple interdisciplinary

methods in the design of

clinical trial protocol is

essential for feasible

protocol, reliable data and

typical outcomes.

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Protocol of FDA-approved new antianginal drug Ranolazine studied

Study the dosage, dosage range and racial features through interdisciplinary methods and technical models

Based on considerable domestic clinical application experience and safety data

In light of the “gold standard” for cardiovascular drug in EU, US & Japan

Featuring TCM drug

Ensuring standard stringency & consistency

Protocol of Phase-II Clinical Trials of Dantonic® ——

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BID dosage results in significant effectiveness at primary endpoints. The difference between 187.5mg Dantonic® and placebo in prolonging TED (Total Exercise Duration) shows clinical and statistical significance (p < 0.05).As for total exercise duration (TED), Dantonic® shows clear dose-response relationship. In comparison with placebo, the 187.5mg group is better than the 125mg group in terms of trough drug concentration .At each dosing level in week 4 and 8, with regard to the maximalpharmacodynamic effect of Dantonic®, the trough/peak rate >1, larger than the value expected for this type of study.

Conclusions of Phase-II Clinical Trials of Dantonic® (T89-005-0003-US)

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Other secondary endpoints, e.g.: weekly frequency of angina, weekly nitroglycerin consumption, time to chest pain, time to ST depression and some biomarkers, all point to the same direction and almost show identical dose-response relationship, and are of both clinical and statistical significance. Hence a chain of evidence is formed and primary indexes are supported.

No sign indicates that Dantonic® prolongs corrected QT interval on day 14, week 4 and week 8.

Both intention to treat (ITT) analysis and per-protocol (PP) analysis indicate the above outcomes are exactly the same.

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The Significance of FDA-regulated Phase-II Clinical Trials of Dantonic®

Prove the scientific quality of TCM drugs: the outcomes are of clinical and statistical significance, and primary endpoints are positive and secondary endpoints are supportive, forming a chain of evidence for safety, effectiveness and controllable quality;Confirm the stringency of TCM drug standards: TCM drugs can meet the “gold standard” of cardiovascular disease-oriented clinical trials (exercise treadmill test) and challenge the utmost;Pioneer in TCM globalization: by inventing a research model; overcoming research bottlenecks; establishing a research platform; creating a communication channel; building a professional team.

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Understanding:TCM globalization is a process of comprehensive innovation to realize

multiple goals

Integration of TCM& Western MedicineIntegration of TCM

& Western Medicine

Technical InnovationTechnical Innovation

Synchronization ofTechnical StandardsSynchronization of

Technical Standards

China

Target Nation

Sino-foreign Culture ExchangeSino-foreign Culture Exchange

Language ConversionLanguage Conversion

Concept RecognitionConcept Recognition

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II. Resource Sharing via Association & Cooperation

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AllianceAllianceMechanism for Globalization

Organizational Support

Capital Support

Work together to consolidate resource and form a joint force

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Board

Secretariat

Drug Registration andTechnical Research Center

International Marketing andService Trading Center

TCM Technical Service Center

Industrial Fund

Tasly Pharmaceuticals, Inc.

Members&

Projects

Organizational Support for TCM Globalization —— Take TCMA for Example

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International Talent BaseInternational Talent Base

Well-ordered Product LinesWell-ordered

Product Lines- A sustainable

growth-oriented talent base for competence to take on critical tasks

- Solve critical common technical difficulties by joint efforts

- Import advanced foreign technologies

Specific Functions:

Technical Innovation Platform

Technical Innovation Platform

Organization of All-in-1 Functions

Organization of All-in-1 Functions

- Perform all-in-1 functions which a single enterprise “longs for but can not fulfill”

- Screen products, consolidate resources and move forward by echelon

- Standardize clinics and product market, exercise mutual supervision and intensify industrial self-discipline

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Significant progress: North America multifunction center established

Contract signed Jun.

2, 2011 in Shanghai

Tasly invests in a multifunction base of TCM drug making, exhibition and training in Maryland and sets up a TCM product R&D platform at the Johns Hopkins University

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Thank You !