IBM Confronts Need to Modernize Pharmaceutical Development and Manufacturing

Market Wire, May, 2005

IBM Healthcare & Life Sciences today announced a new initiative to support the pharmaceutical industry in its drive towards operational excellence, quality by design and risk-based compliance. As part of this program, IBM teamed with leading technology providers to develop a new solution aimed at enabling the transformation of pharmaceutical development and manufacturing capabilities of large pharmaceutical and biotech companies.

IBM Healthcare and Life Sciences has developed a Proof of Concept (PoC) that demonstrates how the FDA's Science of Design and Manufacturing Science concepts can be enabled in a Service Oriented Architecture.

"The business transformation is highly complex, and the route map of activities and changes an organization needs to take is not always clear. Companies need a framework to help take them to the end state of higher production efficiency, lower operational costs, and effective regulatory compliance," said Steve Arlington, global pharmaceutical industry leader, IBM Business Consulting Services. "With the PoC, we demonstrate how a Compliance Centric Architecture can enable our clients to transform their development and manufacturing processes."

IBM forecasts that, by managing risk and applying scientific- and systems-based approaches throughout development and manufacturing, the top 30 Pharma companies alone can protect up to $60 billion of future revenues, accelerate time to peak sales by two years or more, and reduce Cost of Goods Sold (COGS) by up to 16%.

IBM and IBM Business Partners, Rockwell Automation and SAP and potentially others, offer pharmaceutical companies unmatched expertise in life sciences and enterprise applications. IBM Global Services consists of more than 136,000 professionals with a range of knowledge and experience, including pharmaceutical, biotech and medical device operations and enterprise application implementation.

IBM, with IBM Business Partners, delivers proven validated solutions designed to support enhanced innovation and collaboration, improve manufacturing and distribution and help boost sales and marketing campaigns. In forming strategic alliances, IBM offers pharmaceutical companies a single, comprehensive source of expertise, experience, technology and worldwide support to help improve business operations for increased return on investment and overall competitive advantage.

In 2002, Rockwell Automation and IBM developed a strategic relationship which delivers value to clients in improving their manufacturing processes leveraging the strengths of both enterprises. Ninety-five percent of Fortune 50 pharmaceutical companies use Rockwell Automation solutions to optimize their manufacturing and meet regulatory compliance requirements. IBM, with Rockwell, can help life sciences companies further enhance the value of their installations and operations with improved integration of manufacturing information across an enterprise.

The SAP and IBM alliance reflects more than 30 years of leadership based on continuous collaboration, innovation and service. IBM BCS has been an SAP global alliance partner since 1989 and was SAP's first global alliance partner. Together, IBM and SAP have had over 4,000 successful engagements at over 6,000 sites

About IBM Healthcare and Life Sciences

IBM Healthcare and Life Sciences brings together IBM resources, from information technology to deep industry insights and research expertise, to help clients transform the development and delivery of safer, more affordable and more effective diagnostics, drugs and medical care. The fastest way to get more information about IBM Healthcare and Life Sciences is through its Web site, http://www.ibm.com/lifesciences.

About IBM Business Consulting Services

With consultants and professional staff in more than 160 countries globally, IBM Business Consulting Services is the world's largest consulting services organization. IBM Business Consulting Services provides clients with business process and industry expertise, and the ability to translate that expertise into integrated, adaptive, on demand business solutions that deliver bottom-line business value. For more information, visit www.ibm.com/bcs.

Contact: Jorge Alberni (914) 766-3336 alberni@us.ibm.com