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1 Published:October2012 AGLOBALMARKETOVERVIEW Thestudyreviews,analyzesandprojectstheglobal marketformedicalnutri onfortheperiod IndustryExperts,alrightsreserved industry-experts.com

2 Product Outline Nutrition can be defined in several ways, but in general, all definitions point out to the importance of good and balanced nutrition for maintaining a healthy lifestyle and preventing the onset of diseases. Nutrition is the intake and metabolism of nutrients, such as food and other nourishing materials, by an organism in order to sustain life and promote growth. Nutrition can also be defined as the process by which organisms obtain food and use it for growth, metabolism and repair. The stages of nutrition include ingestion, digestion, absorption, transport, assimilation, and excretion. Key Nutrients A human body requires six categories of nutrients to be acquired from food, which are proteins, carbohydrates, fats, fibers, vitamins & minerals, and water. Proteins Proteins are suppliers of amino acids that help in maintaining healthy body tissues. In all, 20 amino acids are considered to be essential, since the human body requires all of them in the right quantities for proper functioning. Of these, 12 amino acids are produced in the body, while the other eight have to be procured from diet. Animal source foods, such as milk and eggs generally contain all these essential amino acids, and a variety of plant products have to be combined in diets in order to obtain all these required protein component. Fat Fat is used by the body for supplying energy and transporting nutrients. Two categories of fatty acids, omega-3 and omega-6, are considered essential for the body to function normally. Sources of these essential fatty acids include canola oil, flaxseed oil, cold-water fish or fish oil for omega-3, and primrose or black currant seed oil for omega-6. A typical American diet contains a profusion of omega-6 fatty acids and deficient quantities of omega-3 fatty acids. However, consuming increased levels of omega-3 oils has been found to reduce the risk of cardiovascular disease and cancer, in addition to alleviating symptoms of rheumatoid arthritis, premenstrual syndrome, dermatitis, and inflammatory bowel disease. Carbohydrates Carbohydrates constitute the body s primary energy source and should form the major component of total daily dietary regimen. The two types of carbohydrates include simple carbohydrates, such as sugar or honey, and complex carbohydrates, such as gains, beans, peas and potatoes. Complex carbohydrates are more beneficial, since they are more nutritious, even while containing fewer calories per gram in comparison to fat, and cause fewer complications associated with overeating than fat or sugar. Complex carbohydrates are ideal for diabetics compared to simple carbohydrates, as they enable in improved control of blood glucose. -2-

3 Infant Nutrition Overview Infants, children between the ages of birth and one year, grow very rapidly and their nutritional requirements are very dissimilar to those of other age groups. The primary purpose of infant nutrition is aimed at addressing the special requirements of very young children, in order that they have a healthy start in life. Since children less than one year of age do not have fully mature organ systems, it is crucial that they be provided nutrition that is easily digestible, in addition to containing adequate quantities of calories, vitamins, minerals, and other nutrients for normal growth and development. Infants also require sufficient quantities of fluids that can be processed by their immature kidneys. The further goal of infant nutrition is to prevent their exposure to harmful substances that could be detrimental to growth and development. Since infancy is a phase of extremely rapid growth and development, it becomes imperative to provide infants with proper nutrients in precise quantities, while preventing wrong substances, which would offer infants an ideal opportunity for a healthy beginning. The onus of this lies on parents, who have to ensure that their infant is provided with the most appropriate nutrition, so that her/his nutritional needs are fully met. A Brief Overview of USDA s WIC Program Recognizing the importance of infant nutrition, the United States Department of Agriculture has evolved the WIC (Women, Infants and Children) program. This program is aimed at offering nutritious foods, nutrition education (including breastfeeding promotion and support), and referrals to health and other social services to participants free of cost, and its services can be availed by low-income pregnant, postpartum and breastfeeding women, in addition to infants and children up to the age of 5 years who are at risk nutritionally. The WIC program is available in all 50 States, 34 Indian Tribal Organizations, American Samoa, District of Columbia, Guam, Commonwealth Islands of the Northern Marianas, Puerto Rico, and the Virgin Islands, with these 90 WIC State agencies administering the program through about 1890 local agencies and 9000 clinic sites. Eligibility Criteria Pregnant, postpartum, and breastfeeding women, infants, and children up to age 5 are eligible, and they have to satisfy income guidelines, a State residency requirement, and be individually determined to be at nutrition risk by a health professional. On the basis of income, eligible applicants include those whose income falls at or below 185% of the US Poverty Income Guidelines (currently, US$41,348 for a family of four). An individual participating of having family members participating in other specific benefit programs, such as Supplemental Nutrition Assistance Program, Medicaid, or Temporary Assistance for Needy Families, meets the income eligibility requirement by default. -41-

4 KEY MARKET TRENDS Diarrhea Incidence Reduced with a FODMAP Low Enteral Nutrition Formula Diarrhea is a common complication associated with enteral nutrition, though causes of the same are as yet not clear. A study was undertaken for identifying factors related to diarrhea in patients on enteral nutrition, where special attention was given to the formula s composition. Methodology Medical histories of in-patients on enteral nutrition have been identified through ICD-10-AM coding, and were selected randomly from the years 2003 to 2008, followed by extracting clinical and demographic data. Classification of formulas was based on osmolality, fiber and FODMAP (fermentable oligo-, di- and mono-saccharides and polyols) content. Outcomes Formula FODMAP levels ranged between 10.6 to 36.5 g/day, and of a total of 160 patients on enteral nutrition, 61% were found to have diarrhea. Univariate analysis revealed the association of diarrhea with length of stay more than 21 days (OR 4.2), duration of enteral nutrition above 11 days (OR 4.0), and use of antibiotics (OR 2.1). A logistic regression model was then used to adjust influencing variables, and more than five-fold reduction in developing risk of diarrhea was observed in patients on Isosource 1.5 (P = 0.029, estimated OR 0.18). The sole unique feature to this formula was its 47%- 71% lower FODMAP content, compared to any other formula. To Conclude Length of stay and duration of enteral nutrition, each on its own, were responsible for predicting the development of diarrhea, and starting off on a formula low in FODMAP content decreased the possibility of diarrhea. Since a cause-effect relationship is not supported by retrospective evaluation, it implies the indication of an interventional study investigating FODMAPs in enteral formula. -67-

5 KEY GLOBAL PLAYERS ABBOTT NUTRITION (UNITED STATES) 625 Cleveland Avenue, Columbus, OH United States Tel: Fax: Website: Business Profile Abbott Nutrition, established in 1903 with headquarters in Columbus, Ohio, is an operating subsidiary of Abbott Laboratories, and was formerly called Ross Products Inc, adopting its present name in November The company is engaged developing, producing and distributing science-based nutritional products that support growth, health, and wellness of people in a range of age classifications. Abbott Nutrition offers globally leading nutrition products for healthcare professionals and patients that address changes in their nutritional requirements. Some of the company s leading formulation brands include Similac for infants, PediaSure and Pedialyte children, Ensure and ZonePerfect for active adults, EAS for athletes and fitness enthusiasts and Glucerna for diabetics. Brand and Product Portfolio Brand/Product Companion EAS EleCare Ensure Enteral Nutrition Bag Feeding Tubes Glucerna Particulars Companion Ambulatory Transporter and Companion Enteral Feeding Pump and Pump Sets 100 pct Whey Protein Powder, AdvantEDGE Carb Control Nutrition Bars, AdvantEDGE Carb Control Ready-to-Drink, EAS Recovery Protein, EAS BetaGen, EAS Lean 15 Bars, EAS Lean 15 Protein Powder, EAS Muscle Armor, EAS Myoplex 30 Bars, EAS Phos Force, Myoplex Carb Control Bar, Myoplex Carb Control Ready-to-Drink, Myoplex Lite Nutrition Bar, Myoplex Lite Powder, Myoplex Lite Ready-to-Drink, Myoplex Original Powder, Myoplex Original Ready-to- Drink, Myoplex Strength Formula Nutrition Bar, Myoplex Strength Formula Ready-to-Drink, Pro Science FINISH Powder and Soy Protein Powder EleCare and EleCare Jr Ensure Clear, Ensure Plus, Ensure, Ensure Clinical Strength, Ensure Enlive, Ensure High Protein, Ensure High Protein Shake, Ensure Immune Health, Ensure Muscle Health, Ensure Powder, Ensure Pudding and Juven Easy-Feed Enteral Nutrition Bag and Top-Fill Enteral Nutrition Bags Easy-Feed Gastrostomy Tubes, Flexiflo Lap G Laparoscopic Gastrostomy Kit, Flexiflo Lap J Laparoscopic Jejunostomy Kit, Flexiflo Introducer Gastrostomy Kit, Flexiflo Jejunostomy Tube, Flexiflo Y-Port Connectors, Magna-Port Gastrostomy and Replacement Gastrostomy Tubes and Nasoenteric Feeding Tubes Glucerna 1.0 Cal Glucerna 1.2 Cal Glucerna 1.5 Cal, Glucerna Hunger Smart Shakes, Glucerna Hunger Smart Snack Bars, Glucerna Meal Bar, Glucerna Mini-Snack Bar, Glucerna Shake (Institutional Can), Glucerna Shake (Retail Bottle), Glucerna Snack Bar and Glucerna Snack Shake -81-

6 September 2012 Arla Introduces Whey Protein KEY BUSINESS TRENDS Arla Foods Ingredients has introduced Lacprodan DI-7017, a pure whey protein concentrate in the clinical nutrition market. Lacprodan DI-7017 is stable in formulation with ultra-high temperature (UHT) at neutral ph and the company is positive in creating and producing 100% whey protein in the clinical nutrition field. The advantages of whey protein over other proteins are that it passes through the gut faster than casein, leading to absorption of protein and quicker gastric clearing. In addition, whey supplies twice the quantity of muscle synthesis as casein. Lacprodan DI-7017 is available in powder form and is utilized both in ph neutral and ph acid formulations. The protein is ideal for milky beverages that are conventionally used in clinical nutrition, as also for beverages having low viscosity, helping the cause of some patients in easily drinking it. July 2012 Danone Takes over Wockhardt s Nutrition Business Danone, a major France-based nutrition and dairy company, has acquired Indian nutrition firm Wockhardt for a consideration of US$35 million. This deal enables Danone in managing Wockhardt s Indian baby foods and nutrition brands, which include Protinex, Farex, Dexolac and Nusobee. The acquired entity would be renamed Nutricia International and comprise two divisions. The Nutricia Medical Nutrition division would look after the medical nutrition business, while the Nutricia Baby Nutrition & Shared Organization division would be responsible for the baby nutrition business. Thus, Wockhardt proposes to aim on its human pharmaceutical business after the completion of the acquisition

7 Enteral Medical Nutrition Market by Product Type Standardized Enteral Medical Nutrition constitutes the largest sub-segment in the global market for Enteral Medical Nutrition, accounting for an estimated xx.x% in 2012, which equates to US$x.x billion in that year. However, fastest growth is expected from Specialized Enteral Medical Nutrition, forecast to record a compounded annual rate of x.x% in reaching US$x.x billion by 2018, as against an estimated US$xxx.x million in Elemental/Semi-Elemental Enteral Medical Nutrition is expected to register the second fastest growth of x.x% over the same period to reach US$x.x billion in 2018, compared to an estimated US$x.x billion in Chart 20: Global Enteral Medical Nutrition Market Analysis ( ) by Product Type Standardized, Elemental/Semi-Elemental and Specialized in USD Million Year Standardized Elemental/Semi-Elemental Specialized Total 2008 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2009 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2010 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2011 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2012 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2013 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2014 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2015 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2016 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2017 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx 2018 xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx % CAGR x.xx x.xx x.xx x.xx Standardized Elemental/Semi-Elemental Specialized -145-

8 Market Overview by Product Segment CANADA Canadian market for Medical Nutrition is estimated at US$xxx.x million in 2012, forecast to be US$xxx million in 2013 and projected to maintain a CAGR of x.x% over in reaching US$x.x billion by Infant Medical Nutrition forms the largest segment, accounting for an estimated 2012 share of xx%, equating to US$xxx million, which is projected to reach US$xxx million in 2018 at a CAGR of x.x%. Enteral Medical Nutrition, however, is forecast to emerge as the fastest growing segment, with a compounded annual rate of x.x% to stand at US$xxx.x million in 2018 from an estimated US$xxx.x million in Parenteral Medical Nutrition is expected to witness the slowest CAGR of x.x% over the analysis period in reaching US$xxx.x million by 2018, compared to an estimated US$xxx.x million in Chart 59: Canadian Medical Nutrition Market Analysis ( ) by Product Segment Infant, Enteral and Parenteral in USD Million Year Infant Enteral Parenteral Total 2008 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2009 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2010 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2011 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2012 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2013 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2014 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2015 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2016 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2017 xxxxxxc xxxxxxx xxxxxxx xxxxxxx 2018 xxxxxxc xxxxxxx xxxxxxx xxxxxxx % CAGR x.xx x.xx x.xx x.xx Infant Enteral Parenteral -224-

9 Market Overview by Geographic Region EUROPE Medical Nutrition demand in Europe is estimated at US$x billion in 2012 and forecast to be US$x.x billion in Maintaining a CAGR of x.x%, European Market for Medical Nutrition is further forecast to reach US$xx.x billion by Germany forms the largest market for Medical Nutrition in Europe, with an estimated 2012 share of xx.x% (US$x.x billion), followed by France with xx.x% and the United Kingdom with xx.x% estimated in that year. The United Kingdom is also forecast as the fastest growing European market for Medical Nutrition, anticipated to record a CAGR of x.x% in reaching a projected US$x.x billion by 2018, as against an estimated US$x.x billion in Spain is expected to be the second fastest growing market, while Germany would retain its number one position as the leading market for Medical Nutrition, with a share of xx.x% in Chart 67: European Medical Nutrition Market Analysis ( ) by Geographic Region Germany, France, United Kingdom, Italy, Spain and Rest of Europe in USD Million Year Germany France United Kingdom Italy Spain Rest of Europe Total 2008 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2009 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2010 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2011 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2012 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2013 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2014 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2015 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2016 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2017 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx 2018 xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx % CAGR x.xx x.xx x.xx x.xx x.xx x.xx x.xx Germany France United Kingdom Italy Spain Rest of Europe -232-

10 Market Overview by Product Segment Asia-Pacific Market Overview by Country JAPAN The market for Medical Nutrition in Japan, estimated at US$x.x billion in 2012 and forecast to be US$x.x billion in 2013, is further projected to exceed US$x.x billion by 2018, thereby exhibiting a CAGR of x.x%. Infant Medical Nutrition constitutes the largest segment, with an estimated 2012 share of xx.x%, which equates to US$xxx.x million, and is expected to register a CAGR of x.x% in reaching US$x billion by Parenteral Medical Nutrition market in Japan is forecast as the slowest, with a CAGR of x% during the similar period, while Enteral Medical Nutrition is anticipated to be the fastest growing segment, with a compounded annual rate of x.x%, enabling in reaching US$xxx.x million in 2018 from an estimated US$xxx.x million in Chart 127: Japanese Medical Nutrition Market Analysis ( ) by Product Segment Infant, Enteral and Parenteral in USD Million Year Infant Enteral Parenteral Total 2008 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2009 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2010 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2011 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2012 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2013 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2014 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2015 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2016 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2017 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx 2018 xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx % CAGR x.xx x.xx x.xx x.xx Infant Enteral Parenteral -322-

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