Transgene Biotek Ltd Management Discussions.

CAUTION

Shareholders are cautioned that certain data and information external to the Company is included in this section. Though these data and information are based on sources believed to be reliable, no representation is made on their accuracy or comprehensiveness. Further, though utmost care has been taken to ensure that the opinions expressed by the management herein contain their perceptions on most of the important trends having a material impact on the Companys operations, no representation is made that the following presents an exhaustive coverage on and of all issues related to the same. The opinions expressed by the management may contain certain forward-looking statements in the current scenario, which is extremely dynamic and increasingly fraught with risks and uncertainties. Actual results, performances, achievements or sequence of events may be materially different from the views expressed herein. Shareholders are hence cautioned not to place undue reliance on these statements and are advised to conduct their own investigation and analysis of the information contained or referred to in this section before taking any action with regard to their own specific objectives. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice. The Company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this section, consequent to new information, future events, or otherwise.

(a) Global Pharma Market:

As per a recent IQVIA report, the global medicine spending is expected to reach nearly USD 1.5 trillion by 2023, representing 3-6% CAGR over the next five years. The increase in spending will be driven by net price increases on patented products, focus on new specialty drugs and expansion of access to healthcare services through government reforms on insurance in various emerging markets including India. On the other hand, the loss of exclusivity and launch of generic versions in Diabetology, Oncology, Cardiology and Autoimmune will continue to be key therapeutic areas driving the increased spending. These therapeutic areas are of relevance and likely to provide the impetus for Transgenes oral delivery platform and AAV platform.

(b) Oral delivery technologies

The Global Drug Delivery Technologies Market is poised to grow at a CAGR of around 7.9% over the next decade to reach approximately $2,222 billion by 2025.

The prevalence of diabetes is increasing throughout the world. The International Diabetes Federation estimated 366 million people had diabetes in 2011 and is expected rise to 552 million by 2030. Though type 2 diabetes mellitus (T2DM) accounts for 85-95% of diabetes, the prevalence of T1DM has increased by 2-3% in certain parts of Europe and USA. Thus, diabetes has become one of the most common non communicable diseases worldwide. India, China and the United States will have the highest number of patients suffering from diabetes.

Fueled by the growing prevalence of diabetes and the progressive nature of the disease, the insulin market has grown at a healthy 7% annual rate by volume during the past decade. Meanwhile, global insulin sales reached $16.7 billion in 2011. According to The Insulin Intelligence Center, the global human insulin drugs market is expected to register a CAGR of 4.93% during the forecast period (2018-2023), and is valued at USD 24 billion by 2018.

The global monoclonal antibodies (mAbs) market accounted for USD 85.4 billion in 2015 and is expected to exhibit a growth rate of 5.7% with expected sales reaching to USD 140 billion by 2024.

TrabiORAL with its demonstrable versatility in oral delivery of small molecule like Insulin (5.8 kD) and large molecule such as mAbs (150 kD) is well poised to take advantage of these markets.

AAV platform

At Transgene, soon after reaching a conclusive milestone in aligning strategic partnership for TrabiORAL, the management plans to move in reactivating its AAV platform, another unique and exciting technology that fits in with the emerging cutting technologies such as CRISPR and Gene therapies apart from delivery of miRNAs with wide ranging clinical applications such as Cancers, inflammatory bowel diseases, auto-immune diseases etc.

Internal Auditing and Controls

Internal auditing and controls cover the aspects of reviewing with the management, performance of internal auditors and, adequacy of the internal control systems. It covers:

• Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, scope of internal audit, reporting structure coverage and frequency of internal audit;

• Discussion with internal auditors of any significant findings and follow up there on;

• Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

• Review with the management letters of internal control weaknesses issued by the internal auditors.

• Evaluation of internal financial controls and risk management systems.