ASSUMPTIONS

Russia Territory of Sales

Oct-2015 Sales Launch Igrel 4% 10ml
5% Target Market Annual Sales Growth in RUB
7% Price Annual Growth of Igrel and main Competitor Taufon
6.5% COGS Annual Growth
10% Royalty (% of Net Sales)
1 # of FTEs
0.5 M RUB for distribution installation for 5 pharmacy chains
10.0 M RUB - milestone payments in total

TARGET MARKET 2015 2016 2017 2018 2019 2020

Total Market, M RUB 1023 1074 1128 1184 1244 1306

Sales Growth YoY, % 5% 5% 5% 5% 5% 5%
Total Units, M # 10.2 11.6 12.0 12.4 12.9 13.5
Unit Growth YoY, % -32% 13% 4% 3% 4% 5%
Taufon Avg Ret Price, RUB 130 139 149 159 170 182

NOVAMEDICA
NM Sales Units (Ord), % 85% 80% 75% 73% 71% 69%
NM Sales Units (UCTM), % 15% 20% 25% 27% 29% 31%
Sales RUB Share, % 0.40% 2% 5% 9% 11% 13%
Units, M # 0.1 0.4 0.8 1.5 1.9 2.2
Units Share, % 0.65% 4% 8% 15% 20% 24%
Ret Price, RUB 90 96 103 110 118 126
NM Price vs Market, % -31% -31% -31% -31% -31% -31%
NM Net Price (Ordinary), RUB 65 70 75 80 85 91
NM Net Price (UCTM), RUB 36 38 41 44 47 50
Price Growth, % - 7% 7% 7% 7% 7%
COGS per pack, RUB 25 27 23 24 26 27
A&P (Total) % of Price List 51% 40% 29% 15% 15% 15%
GPM (Total PL), % 59% 58% 66% 66% 65% 65%
main Competitor Taufon

for 5 pharmacy chains

Forecasted P&L
Eye Drop 4% 10ml
Total

M RUB 1 2 3 4 5 6
10.2015 2016 2017 2018 2019 2020
Ass-s YTD YTD YTD YTD YTD YTD

NM Sales Units (Ord), M # 0.1 0.3 0.6 1.1 1.3 1.5

NM Sales Units (UCTM), M # 0.0 0.1 0.2 0.4 0.6 0.7
NM Net Price (Ord), RUB 65 70 75 80 85 91
NM Net Price (UCTM), RUB 36 38 41 44 47 50
NM Net Sales, M RUB 5% 4 25 52 102 141 176
COGS, M RUB (2) (10) (18) (35) (49) (61)
Gross Profit 2.4 14 34 67 92 115
GPM % 59% 58% 66% 66% 65% 65%
FTEs (1.5) (3) (3) (3) (4) (4)
A&P % 51% 40% 29% 15% 15% 15%
A&P (Pharmacy Chain) (2) (10) (15) (16) (22) (27) Yes
Total S&M (4) (13) (19) (19) (25) (31)
S&M % -88% -53% -36% -19% -18% -17%

Operating Margin (1) 1 16 48 67 84

Operating Margin % -29% 6% 30% 47% 48% 48%
G&A 10% (3) (9) (9) (9) (9) (9) (6)
Acquisition costs -
Distribution initiation (0.5)
Milestone payment (5.0) (5.0)
7% 7% 7% 10% 10% 13%
Royalty 10% (0.3) (1.7) (3.7) (10.2) (14.1) (22.9)
OPEX (7) (24) (32) (39) (49) (63)
OPEX % 176% 98% 61% 38% 35% 36%
EBIT (5) (10) 3 28 43 52
EBIT % -117% -39% 5% 27% 31% 29%
accumulated profit (5) (15) (12) 16 59 111
Taxes 20% - - - 6 9 10
NOPAT (5) (10) 3 22 35 41
NOPAT % -117% -39% 5% 22% 25% 24%
WC (4) (11) (16) (24) (19) 1
FCF (9) (20) (13) (2) 15 42 4%

200 100%
Discount Rate 15%
180
80%
NPV 5Y 20.6
IRR 5Y 29%
160
PEAK SALES, M RUB 176 60%
140
48%
Negative CF (44) 47% 48%
FCF Break Even Year 2019
120
40%
Payback Year 2020
100 30%

13% 20%
80
6% 9% 11%
2% 5%
60 0% 0%
40
-20%
20
-29%
- -40%
10.2015 2016 2017 2018 2019 2020
 NM Ret Price 2015 in RUB, change %
63 72 81 90 99 108
12%
13.3%
NM Units MS
by 2020, %
15%
17%
18%
20%
21%
%
117

2015 2016 2017 2018 2019 2020

Total Units 10.2 11.6 12.0 12.4 12.9 13.5
NM units
70% 0.0 0.3 0.6 1.0 1.3 1.6
80% 0.1 0.3 0.6 1.2 1.5 1.8
90% 0.1 0.4 0.7 1.3 1.7 2.0
100% 0.1 0.4 0.8 1.5 1.9 2.2
110% 0.1 0.4 0.9 1.6 2.1 2.5
120% 0.1 0.5 0.9 1.7 2.3 2.7
130% 0.1 0.5 1.0 1.9 2.5 2.9
NM Units MS 5Y, %
12%
13%
15%
17%
18%
20%
21%