, Analyst, , Table of contents Executive summary 3 Investment thesis Deal tracker 44 Compan

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, Analyst, 3774 7165, jaechul.park@miraeasset.com Table of contents Executive summary 3 Investment thesis 5 5 16 19 23 27 31 41 Deal tracker 44 Company recommendation 46 Bristol-Myers Squibb (BMY US) 47 Roche (ROG VX) 50 AstraZeneca (AZN LN) 53 Novartis (NOVN VX) 56 Appendix 59 60 64 66 68 72 76 2

, Analyst, 3774 7165, jaechul.park@miraeasset.com Executive Summary 3

, Analyst, 3774 7165, jaechul.park@miraeasset.com 4

, Analyst, 3774 7165, jaechul.park@miraeasset.com [Investment thesis] 5

, Analyst, 3774 7165, jaechul.park@miraeasset.com 6

, Analyst, 3774 7165, jaechul.park@miraeasset.com 7

, Analyst, 3774 7165, jaechul.park@miraeasset.com 8

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, Analyst, 3774 7165, jaechul.park@miraeasset.com 10

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, Analyst, 3774 7165, jaechul.park@miraeasset.com β 30

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, Analyst, 3774 7165, jaechul.park@miraeasset.com 42

, Analyst, 3774 7165, jaechul.park@miraeasset.com 43

, Analyst, 3774 7165, jaechul.park@miraeasset.com [Deal tracker] 44

, Analyst, 3774 7165, jaechul.park@miraeasset.com ü 45

, Analyst, 3774 7165, jaechul.park@miraeasset.com Company recommendations Top Picks - Bristol-Myers Squibb - Roche - AstraZeneca - Novartis

Global research / Company update US / Pharmaceutical 4 August 2016 USD 78.00 USD 74.78 124,997 51.82 77.12 5.78 Fiscal year ending Dec-15 Dec-16 E Dec-17 E Dec-18 E, Analyst 3774 7165 jaechul.park@miraeasset.com See the last page of this report for important disclosures 47

, Analyst, 3774 7165, jaechul.park@miraeasset.com Bristol-Myers Squibb BMY US 48

, Analyst, 3774 7165, jaechul.park@miraeasset.com Bristol-Myers Squibb BMY US Key financial statements Income statements (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Revenue 17,715 18,808 19,484 21,244 17,621 16,385 15,879 16,560 18,794 20,919 22,751 25,123 26,910 Operating profit 3,566 4,671 5,884 6,531 2,260 3,096 2,591 1,890 5,002 6,326 7,625 8,985 9,957 Pretax profit 4,776 5,602 6,071 6,981 2,340 2,891 2,381 2,077 5,762 7,067 8,466 9,958 11,296 Net Income 5,247 10,612 3,102 3,709 1,960 2,563 2,004 1,565 4,435 5,543 6,542 7,613 8,654 R&D Expense 3,512 3,647 3,566 3,839 3,904 3,731 4,534 5,920 (Growth,% YoY) Revenue (2.6) 6.2 3.6 9.0 (17.1) (7.0) (3.1) 4.3 13.5 11.3 8.8 10.4 7.1 Operating profit 12.6 31.0 26.0 11.0 (65.4) 37.0 (16.3) (27.1) 164.7 26.5 20.5 17.8 10.8 Net Income 142.4 17.3 8.4 15.0 (66.5) 23.5 (17.6) (12.8) 177.4 22.6 19.8 17.6 13.4 R&D Expense 8.8 3.8 (2.2) 7.7 1.7 (4.4) 21.5 30.6 Balance sheets (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Current Assets 14,697 13,958 13,273 15,318 9,521 18,916 14,608 10,415 Cash & Near Cash Items 7,976 7,683 5,033 5,776 1,656 3,586 5,571 2,385 Non-current Assets 14,789 17,050 17,803 17,652 26,376 19,676 19,141 21,333 Total Assets 29,486 31,008 31,076 32,970 35,897 38,592 33,749 31,748 Current Liabilities 6,710 6,313 6,739 7,780 8,279 12,440 8,461 8,017 Short-term Borrowings 154 231 117 115 826 359 590 139 Long-term Liabilities 10,568 9,910 8,699 9,323 13,980 10,916 10,305 9,307 Long-Term Borrowings 6,585 4,874 4,618 5,376 6,568 7,981 7,242 6,550 Total Liabilities 17,278 16,223 15,438 17,103 22,259 23,356 18,766 17,324 Total Equity 12,208 14,785 15,638 15,867 13,638 15,236 14,983 14,424 Cash flow (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E CFO 3,707 4,065 4,491 4,840 6,941 3,545 3,148 1,832 CFI 5,079 (4,380) (3,812) (1,437) (6,727) (572) 1,216 (1,572) CAPEX (941) (730) (424) (367) (548) (537) (526) (820) (732) (708) (766) (826) (897) CFF (2,611) 22 (3,329) (2,660) (4,334) (1,043) (2,379) (3,446) Net Changes in Cash 6,175 (293) (2,650) 743 (4,120) 1,930 1,985 (3,186) FCF 2,766 3,335 4,067 4,473 6,393 3,008 2,622 1,012 3,466 5,569 5,982 7,300 8,100 Per share data/key ratios (USD, USD m, %) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E EPS 2.6 5.4 1.8 2.2 1.2 1.6 1.2 0.9 2.6 3.3 3.9 4.6 5.3 BPS 6.2 8.7 9.2 9.5 8.4 9.2 9.0 8.6 9.4 10.9 13.4 DPS 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.6 1.7 1.8 1.8 ROE 46.0 78.4 20.3 23.4 13.3 17.8 13.4 10.7 27.9 31.9 33.6 ROA 18.9 35.1 10.0 11.6 5.7 6.9 5.5 4.8 13.0 16.2 17.4 Div. yield 5.3 5.0 4.9 3.8 4.2 2.7 2.5 2.2 2.0 2.1 2.3 2.4 2.4 Net debts (1,714) (4,778) (5,247) (6,151) 1,042 68 (4,011) (2,241) 944 (1,449) (3,913) (3,731) (7,749) Net debt/equity (14.04) (32.32) (33.55) (38.77) 7.64 0.45 (26.77) (15.54) 49

Global research / Company update Switzerland / Pharmaceutical 4 August 2016 CHF 299.5 CHF 256.7 220,615 229.8 281.7 1,296 Fiscal year ending Dec-15 Dec-16 E Dec-17 E Dec-18 E, Analyst 3774 7165 jaechul.park@miraeasset.com See the last page of this report for important disclosures 50

, Analyst, 3774 7165, jaechul.park@miraeasset.com Roche ROG VX 51

, Analyst, 3774 7165, jaechul.park@miraeasset.com Roche ROG VX Key financial statements Income statements (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Revenue 42,256 45,310 45,672 48,154 48,544 50,496 51,906 50,050 51,862 54,353 56,997 59,673 61,857 Operating profit 12,994 11,341 12,974 15,233 15,070 17,677 15,409 14,368 18,715 19,825 21,428 23,023 24,387 Pretax profit 13,118 9,452 10,786 13,456 12,973 15,843 13,687 12,461 17,478 18,864 20,875 22,886 24,075 Net Income 8,308 7,190 8,337 10,578 10,058 12,051 10,206 9,214 13,048 14,019 15,340 16,674 17,631 R&D Expense 8,193 9,121 9,646 9,427 10,191 10,006 10,822 9,960 (Growth,% YoY) Revenue 9.8 7.2 0.8 5.4 0.8 4.0 2.8 (3.6) 3.6 4.8 4.9 4.7 3.7 Operating profit 7.7 (12.7) 14.4 17.4 (1.1) 17.3 (12.8) (6.8) 30.3 5.9 8.1 7.4 5.9 Net Income 2.0 (27.9) 14.1 24.8 (3.6) 22.1 (13.6) (9.0) 40.3 7.9 10.7 9.6 5.2 R&D Expense 17.1 11.3 5.8 (2.3) 8.1 (1.8) 8.1 (8.0) Balance sheets (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Current Assets 36,119 37,189 29,566 30,076 34,300 32,820 31,305 28,190 Cash & Near Cash Items 4,599 2,360 1,971 4,106 4,953 4,501 3,765 3,732 Non-current Assets 35,072 34,876 35,773 35,521 36,559 37,140 44,699 47,595 Total Assets 71,191 72,064 65,339 65,597 70,859 69,961 76,004 75,786 Current Liabilities 11,325 21,327 16,038 17,269 22,096 17,736 23,250 23,775 Short-term Borrowings 1,045 6,063 2,357 3,616 7,358 2,498 6,406 6,153 Long-term Liabilities 9,509 41,639 36,813 32,901 30,449 28,321 31,063 28,704 Long-Term Borrowings 2,781 34,931 29,829 24,991 19,528 18,482 19,466 17,105 Total Liabilities 20,834 62,966 52,851 50,169 52,545 46,057 54,313 52,479 Total Equity 50,357 9,098 12,487 15,428 18,314 23,904 21,690 23,307 Cash flow (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E CFO 11,646 15,182 11,968 12,903 14,288 15,671 16,114 14,805 CFI (2,161) (2,970) 3,372 (391) (4,710) (1,454) (12,887) (4,401) CAPEX (2,908) (2,756) (2,570) (2,218) (2,316) (2,646) (3,244) (3,605) (3,501) (3,558) (3,366) (3,565) (3,761) CFF (5,801) (14,496) (15,918) (10,233) (8,857) (14,789) (3,508) (10,415) Net Changes in Cash 3,684 (2,284) (578) 2,279 721 (572) (282) (11) FCF 8,738 12,425 9,398 10,685 11,972 13,025 12,870 11,200 11,797 12,809 14,231 14,612 15,417 Per share data/key ratios (USD, USD m, %) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E EPS 9.7 8.4 9.8 12.5 11.9 14.2 12.0 10.8 15.2 16.3 18.0 19.4 20.4 BPS 48.2 8.3 11.8 14.9 18.7 25.6 23.2 24.6 29.6 35.4 42.0 51.6 59.5 DPS 4.6 5.5 6.3 7.7 7.8 8.4 8.7 8.4 8.8 9.3 10.0 10.9 11.7 ROE 20.0 30.0 103.0 86.7 70.9 66.0 48.0 43.7 52.3 47.8 44.4 38.9 36.3 ROA 11.6 10.3 12.8 15.2 14.9 17.6 13.6 11.7 16.8 16.5 16.6 Div. yield 3.1 3.4 4.8 4.3 4.0 3.1 3.0 2.9 3.4 3.6 3.9 4.3 4.6 Net debts (15,608) 23,067 20,513 16,583 11,589 7,549 14,097 14,084 10,495 4,798 447 (576) (2,419) Net debt/equity (30.99) 253.53 164.27 107.49 63.28 31.58 64.99 60.43 52

Global research / Company update UK / Pharmaceutical 4 August 2016 GBp 4,890 GBp 4,503 84,438 3,680 5,114 2,791 Fiscal year ending Dec-15 Dec-16 E Dec-17 E Dec-18 E, Analyst 3774 7165 jaechul.park@miraeasset.com See the last page of this report for important disclosures 53

, Analyst, 3774 7165, jaechul.park@miraeasset.com AstraZeneca AZN LN 54

, Analyst, 3774 7165, jaechul.park@miraeasset.com AstraZeneca AZN LN Key financial statements Income statements (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Revenue 31,601 32,804 33,269 33,591 27,973 25,711 26,547 24,708 23,597 22,849 24,091 26,277 28,541 Operating profit 9,037 11,543 11,494 12,795 8,148 3,712 2,235 4,136 6,808 6,629 6,939 8,198 9,358 Pretax profit 8,681 10,807 10,977 12,367 7,646 3,267 1,246 3,069 6,179 6,051 6,393 7,407 8,683 Net Income 6,101 7,521 8,053 9,983 6,240 2,556 1,233 2,825 5,116 4,975 5,469 6,217 7,162 R&D Expense 5,179 4,409 5,318 5,523 5,243 4,821 5,579 5,997 (Growth,% YoY) Revenue 6.9 3.8 1.4 1.0 (16.7) (8.1) 3.3 (6.9) (4.5) (3.2) 5.4 9.1 8.6 Operating profit (0.3) 27.7 (0.4) 11.3 (36.3) (54.4) (39.8) 85.1 64.6 (2.6) 4.7 18.2 14.1 Net Income 9.0 24.5 1.6 12.7 (38.2) (57.3) (61.9) 146.3 101.3 (2.1) 5.6 15.8 17.2 R&D Expense 0.3 (14.9) 20.6 3.9 (5.1) (8.0) 15.7 7.5 Balance sheets (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Current Assets 15,979 23,760 25,131 23,506 19,048 20,335 16,697 16,007 Cash & Near Cash Items 4,286 9,918 11,068 7,571 7,701 9,217 6,360 6,240 Non-current Assets 30,805 31,160 30,996 29,324 34,486 35,564 41,898 44,117 Total Assets 46,784 54,920 56,127 52,830 53,534 55,899 58,595 60,124 Current Liabilities 13,320 17,640 16,787 15,752 13,903 16,051 17,330 14,869 Short-term Borrowings 1,156 1,926 125 1,990 901 1,788 2,446 916 Long-term Liabilities 17,404 16,459 15,930 13,606 15,685 16,595 21,619 26,746 Long-Term Borrowings 10,855 9,137 9,097 7,338 9,409 8,588 8,397 14,137 Total Liabilities 30,724 34,099 32,717 29,358 29,588 32,646 38,949 41,615 Total Equity 16,060 20,821 23,410 23,472 23,946 23,253 19,646 18,509 Cash flow (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E CFO 8,891 11,852 10,854 7,992 7,100 7,514 7,198 3,447 CFI (4,008) (2,589) (2,400) (2,193) (2,011) (3,003) (7,172) (4,362) CAPEX (1,095) (962) (791) (839) (672) (742) (1,012) (1,328) (1,092) (1,156) (1,119) (1,133) (1,244) CFF (6,487) (3,558) (7,301) (9,346) (4,927) (3,112) (2,857) 802 Net Changes in Cash (1,604) 5,705 1,153 (3,547) 162 1,399 (2,831) (113) FCF 7,796 10,890 10,063 7,153 6,428 6,772 6,186 2,119 1,736 3,047 3,615 5,208 6,128 Per share data/key ratios (USD, USD m, %) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E EPS 4.2 5.2 5.6 7.3 5.0 2.0 1.0 2.2 4.0 3.9 4.3 5.1 5.9 BPS 11.0 14.2 16.5 18.0 19.0 18.5 15.5 14.6 13.7 12.9 12.7 12.0 15.0 DPS 2.1 2.1 2.4 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 3.2 3.5 ROE 39.8 41.1 36.7 43.0 26.6 10.9 5.8 14.8 14.7 16.3 20.9 28.3 31.2 ROA 12.9 14.8 14.5 18.3 11.7 4.7 2.2 4.8 4.0 4.2 5.9 7.4 9.1 Div. yield 5.0 4.4 5.3 6.1 5.9 4.7 3.9 4.1 4.2 4.2 4.2 4.8 5.3 Net debts 7,337 (339) (3,328) (2,491) 1,786 363 3,186 7,742 11,678 12,831 13,256 13,643 10,912 Net debt/equity 45.68 (1.63) (14.22) (10.61) 7.46 1.56 16.22 41.83 55

Global research / Company update Switzerland / Pharmaceutical 4 August 2016 CHF 86.76 CHF 80.45 217,661 67.0 101.8 4,801 Fiscal year ending Dec-15 Dec-16 E Dec-17 E Dec-18 E α, Analyst 3774 7165 jaechul.park@miraeasset.com See the last page of this report for important disclosures 56

, Analyst, 3774 7165, jaechul.park@miraeasset.com Novartis NOVN VX 57

, Analyst, 3774 7165, jaechul.park@miraeasset.com Novartis NOVN VX Key financial statements Income statements (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Revenue 41,459 45,103 51,561 59,375 56,673 52,090 52,419 49,440 48,865 50,132 53,260 56,844 58,824 Operating profit 9,439 9,982 11,526 10,998 11,193 10,983 11,089 8,977 8,683 9,381 11,292 13,753 14,604 Pretax profit 9,499 9,922 11,702 10,773 10,925 10,807 12,272 8,134 11,996 12,482 14,885 16,624 17,452 Net Income 8,195 8,400 9,794 9,113 9,270 9,175 10,210 17,783 11,326 12,058 13,593 15,001 15,912 R&D Expense 7,217 7,469 9,070 9,583 9,332 9,071 9,086 8,935 (Growth,% YoY) Revenue 8.9 8.8 14.3 15.2 (4.6) (8.1) 0.6 (5.7) (1.2) 2.6 6.2 6.7 3.5 Operating profit 30.0 5.8 15.5 (4.6) 1.8 (1.9) 1.0 (19.0) (3.3) 8.0 20.4 21.8 6.2 Net Income (31.4) 4.5 17.9 (7.9) 1.4 (1.1) 13.6 (33.7) 47.5 4.0 19.3 11.7 5.0 R&D Expense 12.2 3.5 21.4 5.7 (2.6) (2.8) 0.2 (1.7) Balance sheets (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Current Assets 20,881 33,691 26,685 24,084 28,004 30,542 37,561 22,845 Cash & Near Cash Items 2,038 2,894 5,319 3,709 5,552 6,687 13,023 4,674 Non-current Assets 57,418 61,814 96,633 93,412 96,187 95,712 87,826 108,711 Total Assets 78,299 95,505 123,318 117,496 124,191 126,254 125,387 131,556 Current Liabilities 16,487 19,470 24,658 23,148 24,051 26,368 26,973 23,708 Short-term Borrowings 4,840 5,313 8,627 6,374 5,945 6,673 6,560 5,574 Long-term Liabilities 11,375 18,573 28,891 28,408 30,877 25,414 27,570 30,726 Long-Term Borrowings 2,195 8,675 14,360 13,855 13,781 11,242 13,799 16,327 Total Liabilities 27,862 38,043 53,549 51,556 54,928 51,782 54,543 54,434 Total Equity 50,437 57,462 69,769 65,940 69,263 74,472 70,844 77,122 Cash flow (USD m) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E CFO 9,532 12,191 14,067 14,309 14,194 13,174 13,897 11,897 CFI (10,235) (14,219) (15,756) (792) (5,675) (3,352) 881 (10,784) CAPEX (2,106) (1,887) (1,678) (2,167) (2,698) (2,903) (2,624) (2,367) (2,324) (2,315) (2,413) (2,367) (2,416) CFF (2,619) 2,884 4,114 (15,127) (6,676) (8,687) (8,442) (9,462) Net Changes in Cash (3,322) 856 2,425 (1,610) 1,843 1,135 6,336 (8,349) FCF 7,426 10,304 12,389 12,142 11,496 10,271 11,273 9,530 9,824 10,498 11,770 13,845 13,778 Per share data/key ratios (USD, USD m, %) 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E EPS 3.62 3.70 4.28 3.83 3.83 3.76 4.21 7.40 4.75 5.13 5.77 6.61 7.09 BPS 22.20 25.23 27.60 27.36 28.56 30.64 29.50 32.46 32.56 32.66 33.31 36.48 38.09 DPS 1.9 2.0 2.1 2.5 2.5 2.6 2.8 2.8 2.8 3.0 3.2 3.5 3.8 ROE 16.5 15.6 16.2 14.1 13.7 12.8 14.1 24.1 12.8 14.0 16.5 14.9 15.5 ROA 10.7 9.7 9.0 7.6 7.7 7.3 8.1 13.8 6.5 7.0 8.8 8.3 8.7 Div. yield 3.8 3.7 3.6 4.5 3.9 3.3 3.0 3.2 3.4 3.6 3.9 4.2 4.5 Net debts 918 (3,461) 14,853 15,154 11,607 8,693 6,497 15,191 15,841 14,208 11,393 8,098 4,954 Net debt/equity 1.8-6.0 21.3 23.0 16.8 11.7 9.2 19.7 58

, Analyst, 3774 7165, jaechul.park@miraeasset.com Appendix

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, Analyst, 3774 7165, jaechul.park@miraeasset.com Recommendations Compliance Notice Distribution of Ratings 77