As has been discussed on this board ad naueam, absent a marketing collaboration with GILD, a 3-drug regimen consisting of Sovaldi and two non-GILD drugs would be tough to position at a competitive price. If the treatment duration of such a regimen were 6 weeks, the pricing dilemma would be hopeless (IMO) and, even at 4 weeks, it would be challenging.

**IMS prescription data for Sovaldi were released for the week ending 6/20/2014, the 28th week of launch.

**The week's total Sovaldi prescriptions were 7,819, a change of -5.20% vs. last week's 8,248, and the week's new
Sovaldi prescriptions were 3,215, a change of -1.98% vs. last week's 3,280. Based on trends from prior weeks, as well as
recent commentary from the company at our conference, we believe scrips data is beginning to reflect increasing effects
of warehousing and patient prioritization.

**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales could reach
the following under these scenarios:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base case) -
$9.11B from $10.41B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $8.26B from $9.19B
(3) Sovaldi new patient starts level off for rest of year -$10.03B, from $11.76B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $9.59B from
$12.43B

**For Q2 2014, in our base case scenario, global sales appear to be tracking at $3.4B, which includes ~$196MM ex-U.S.
sales; this is above our current $2.98B estimate and well above consensus' current $2.6B estimate.

**BOTTOM LINE: We continue to expect some slowing down as the year progresses, although this rate appears to be
slightly higher versus our Q2 base case assumption (-4% versus -2%) but even incorporating that assumption full-year
Sovaldi sales appear to be tracking well above consensus--confirming the potential robust near- and long-term
opportunity, and providing additional evidence that high patient volume, especially once the all-oral cocktail is available,
could offset any reimbursement restrictions.

Endo International plc (ENDP) (ENL.TO) today announced that it has reached a definitive agreement to acquire DAVA Pharmaceuticals, Inc., a privately-held company specializing in marketed, pre-launch and pipeline generic pharmaceuticals, for $575 million in cash, with additional cash consideration of up to $25 million contingent on the achievement of certain sales milestones. The acquisition enhances Endo's attractive commercialization and development platform and is expected to be immediately accretive to Endo's 2014 adjusted earnings per share (EPS).

Today in a filing, additional details regarding MRK's acquisition of IDIX emerged, which we believe have implications both
for ACHN (has an early­stage nuc) and GILD (HCV leader, and currently involved in patent battles with IDIX and MRK). 
 
**The description of the negotiations notes that MRK initially contacted IDIX in 12/2013 to review data when available from
IDX­21437, IDIX's uridine­based nuc which ultimately showed good viral suppression in a 7­day proof­of­concept study, and
throughout the next several months held discussions regarding data and development plans for the nuc. 
 
**The potential for a ''business combination transaction'' was first brought up in April, following the nuc's proof­of­concept
data, and the companies continued to discuss potential development plans that included both companies' HCV drugs. It is
noted that within a month of the nuc proof­of­concept data, IDIX had proposals from two other parties (not specified, but we
imagine likely two large HCV­focused players­­perhaps JNJ and/or ABBV). MRK's proposals began at ~$10/share and
increased to $18 and then $24.50 ­ noting the $18/share ($2.7B), more than double where IDIX was trading at that time, did
not represent the highest offer IDIX received. We note no mention of the potential value of IDIX's IP (though it is possible
the other parties may had an interest in the IP which drove up the price). 
 
**BOTTOM LINE: The confirmation that this appeared to be a competitive bidding process, and seemed centered around the
nuc especially once proof­of­concept was established, we believe has positive read­throughs for ACHN­illustrating the
scarcity value being placed on nucs as a key component of future HCV cocktails, corroborating there are still 2+ large parties
interested in acquiring a nuc for a premium, and suggesting there could be external interest in ACHN once '3422 proof­of­
concept data emerge 4Q14. For GILD, we view as positive the fact that the premium may relate more to nuc scarcity value
than MRK's belief in the merits of IDIX's IP case against GILD. 

**IMS prescription data for Sovaldi were released for the week ending 6/13/2014, the 27th week of launch.
**The week's total Sovaldi prescriptions were 8,248, a change of -4.23% vs. last week's 8,639, and the week's new
Sovaldi prescriptions were 3,280, a change of -4.98% vs. last week's 3,452. Based on trends from prior weeks, as well as
recent commentary from the company at our conference, we believe this week's data likely reflects some increasing
effects of warehousing (though at a slower place than we had projected) and patient prioritization.
**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales could reach
the following under these scenarios:
(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base case) -
$10.41B from $9.80B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $9.19B from $8.64B
(3) Sovaldi new patient starts level off for rest of year -$11.76B, from $11.13B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $12.43B from
$10.14B
**For Q2 2014, in our base case scenario, global sales appear to be tracking at $3.5B, which includes ~$121MM in
inventory and ~$196MM ex-U.S. sales; this is above our current $2.98B estimate and well above consensus' current
$2.6B estimate.
**BOTTOM LINE: We continue to expect some slowing down as the year progresses, but even incorporating that
assumption Q2 and full-year Sovaldi sales appear to be tracking well above consensus - confirming the potential robust
near- and long-term opportunity, and providing additional evidence that high patient volume, especially once the all-oral
cocktail is available, could offset any reimbursement restrictions.

The regimen currently involves four pills a day plus typically 2 ribavirin pills a day.

Chatting with colleague trying to figure how we'd ever need to use the $abbv regimen -- (and the threat of triple class resistance) $gild

biotechnicality ?@biotechnicality 22h
@MDsearchlight 1 pill vs 9, daily vs bid, DDIs vs no DDIs, RIBA vs no RIBA, norvir vs no norvir $abbv $gild

**IMS prescription data for Sovaldi were released for the week ending 6/6/2014, the 26th week of launch.

**The week's total Sovaldi prescriptions were 8,639, a change of +13.76% vs. last week's 7,594, and the week's new
Sovaldi prescriptions were 3,452, a change of +16.31% vs. last week's 2,968. This week's data reflects reversion to the
prior trend following the Memorial Day holiday, and continue to show steady uptake.

**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales could reach
the following under these scenarios:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base case) -
$9.80B from $9.59B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $8.64B from $8.4B
(3) Sovaldi new patient starts level off for rest of year -$11.13B, from $10.98B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $10.14B from
$9.81B

**For Q2 2014, in our base case scenario, global sales appear to be tracking at $3.4B, which includes ~$121MM in
inventory and ~$196MM ex-U.S. sales; this is above our current $2.98B estimate and well above consensus' current
$2.6B estimate.

**We are extrapolating IMS's capture rate with two quarters of actual historical sales.

**BOTTOM LINE: We continue to expect some slowing down as the year progresses, but even incorporating that
assumption Q2 and full-year Sovaldi sales appear to be tracking well above consensus - confirming the potential robust
near- and long-term opportunity, and providing additional evidence that high patient volume, especially once the all-oral
cocktail is available, could offset any reimbursement restrictions.

ACHN is the only independent biotech with a nuke in clinical trials now ;)

For a long time, I assumed that the all-oral would be priced at $84,000 for the 8 week treatment ($1,500/pill). I still think that it will be under that due to the political drama, but I may be underestimating GILD's price toughness (and ABBV's).

Because of the Memorial Day holiday, I'm considering the Sovaldi NRx and TRx numbers reported today as throwaways for modeling purposes

**IMS prescription data for Sovaldi were released for the week ending 5/30/2014, the 25th week of launch.

**The week's total Sovaldi prescriptions were 7,594, a change of -12.29% vs. last week's 8,658, and the week's
new Sovaldi prescriptions were 2,968, a change of -13.27% vs. last week's 3,422. We note that this week
included the Memorial Day holiday; our future projections assume some reversion starting next to the prior
run rate.

**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales
could reach the following under these scenarios:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base
case) - $9.59B from $10.4B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $8.4B from $9.0B
(3) Sovaldi new patient starts level off for rest of year -$10.98B, from $12.2B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $9.81B
from $10.4B

**For Q2 2014, in our base case scenario, global sales appear to be tracking at $3.21B, which includes ~$100M
in inventory and ~$180M ex-U.S. sales; this is above our current $2.98B estimate at well above consensus'
current $2.5B estimate.

**We are extrapolating IMS's capture rate with two quarters of actual historical sales.

**BOTTOM LINE: We continue to expect some slowing down as the year progresses, but even incorporating
that assumption Q2 and full-year Sovaldi sales appear to be tracking well above consensus - confirming the
potential robust near- and long-term opportunity, and providing additional evidence that high patient volume,
especially once the all-oral cocktail is available, could offset any reimbursement restrictions.

Big picture: We reiterate our Outperform on GILD as our thesis is playing
out: 1) Sovaldi is still tracking well above consensus estimates for 2014-15,
2) Street is still under-appreciating the current run-rate for 2014 of $10B
+ which means at least $12B+ next year including some OUS sales, 3)
which should drive massive earnings leverage of $9-10 in earnings power,
4) adjusting for which has the stock trading around an 8-9x P/E –a big
disconnect from fundamentals and cash flow. We think concerns around
"tail" and "pricing" risk are overblown and headline scary but that they
ultimately won't play out as poorly as people think because competitors
can be expected to be relatively rational on pricing, market size is big over
next few years, and as described above – reimbursement will generally
support coverage and not deny access. In fact the new all-oral comboswill likely be cheaper at $80-100k than current Sovaldi/Olysio which is ~$150k, thus implicitly
saving the payor money and allowing more pts to be treated....Even if it ultimately starts
to limit coverage to F3-4 (such as in Europe) this only prolongs the revenue tail longer than
expected...

**IMS prescription data for Sovaldi were released for the week ending 5/23/2014, the 24th week of launch.

**The week's total Sovaldi prescriptions were 8,658, a change of +7.01% vs. last week's 8,091.

**The week's new Sovaldi prescriptions were 3,422, a change of -0.67% vs. last week's 3,445.

**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales could reach
the following under these scenarios:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base case) -
$10.4B from $8.9B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $9.0B from $7.7B
(3) Sovaldi new patient starts level off for rest of year -$12.2B, from $10.4B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $10.4B from $8.7B

**We are extrapolating IMS's capture rate with two quarters of actual historical sales.

**BOTTOM LINE: We had have seen new prescriptions at 3,500-3,600 scripts/week in the first half of this quarter, with
these last two weeks' new scrips number representing a return to that baseline from launch week 22's''break-out'' of
3,891 new scrips. Scrips are not decreasing as fast as we had anticipated with our secondary warehousing scenario, suggesting the volume of patients coming onto Sovaldi may be a counterweight against that phenomenon. We continue
to expect some slowing down as the year progresses, but a pause in the decline of new patients starts suggest to us
2014 U.S. sales could still exceed $10B --suggesting a robust near- and long-term opportunity, and providing additional
evidence that high patient volume, especially once the all-oral cocktail is available, could offset more restrictive
reimbursement from public payers.

the market value of shares actually owned shows how much money an insider has placed at risk, and hence it has information value apart from its contribution to the market-value sum of shares plus vested options.

After the exercise and sale in the above link, Bischofberger still owned 119K shares with a market value of $9.8M.

• Module 3 – “Managed Medicaid in the Era of Healthcare Reform: Converging Approaches to
HCV”: Experts discussed the pros/cons of state methods of paying for Medicaid spend on hep C. These
include: carve-outs, which have the drawback of absence of plan-driven utilization management; carve-ins,
which have the drawback of difficulty in estimating costs and ensuring that one plan does not get too many
hep C patients, while another avoids hep C patients, but gets paid for it anyway; and pass-throughs, which
have the advantage of allowing utilization management by the plans, but also allow for the adjustment of
payments to plans based on exposure. The experts believed California was ahead of many states in planning
for the rise in hep C costs, but that other states were mostly caught off-guard. They also noted that the
anticipated prevalence of HCV and costs would likely drive the states’ decisions on how to pay for hep C
spending. Our experts noted disappointment amongst the states that ABBV does not plan to compete on
price once the all-oral cocktails become available next year.

• Module 4 – “Cost of a Cure: Negotiating The Right Price For New HCV Drugs”: Based on our
discussion with this consultant, it appears that commercial payers, and to some extent Medicare Part D, have
been less restrictive regarding access to Sovaldi, focusing more on ensuring appropriate use of the drug
rather than controlling volume, something we view as a positive for GILD. At this point, he said he has
observed minimal discounting and expects relatively modest discounts even when multiple all-oral cocktails
become available, though he did note that bundling could be something payers find attractive (e.g., GILD
with HIV drugs, ABBV with RA). He also noted that PBMs have already taken a margin hit for Sovaldi and
therefore are unlikely to reduce costs further. He seemed to think that ESRX’s coalition would not survive
long after new drugs arrived, as payers would likely follow whatever path led to lowest costs. Further, he
noted that past specialty drug GPOs were only modestly successful in lowering costs. Finally, he said that the
influx of warehoused patients seeking Sovaldi in the first 3-4 months of launch has waned and referrals have
declined with anticipation of the all-oral regimens – something we continue to model in our 2014 Sovaldi
prescription-based projector.

• Module 5 – “Contextualizing HCV Costs in the Bigger BioPharma Picture”: Our panel member
talked about the buzz generated by Sovaldi as indicative of a bigger-picture issue – the need for a
“frameshift” in a system set up for chronic care, rather than for high-priced acute care where value accrues
over decades. In this context, she views the Sovaldi launch as less of a watershed event and instead more of
an excuse to talk about the issues; she does not believe Sovaldi by itself will significantly change the way
drugs are priced in the future. From an innovator’s perspective, she believes generating pharmacoeconomic
data is of increasing importance to make one’s value case, though noted challenges in both gathering and
disseminating such information. Lastly, given the effectiveness of the drug, the expert would not expect
Sovaldi to be excluded from drug formularies.

• Module 6 – “Understanding Political and Legislative Influences on HCV Drug Pricing and
Access”: Our DC consultant noted that Sovaldi has become a big topic in Washington, discussed regularly,
but it seemed unlikely to spur significant new legislation, particularly with two congressmen historically vocal on drug price regulation - Senator Jay Rockefeller (D-WV) and Representative Henry Waxman (D-CA)
- both retiring. The expert noted that the recent letter from House Democrats to Gilead requesting more
information was a normal part of Congressional oversight and not indicative of future actions, and that a
hearing, if one occurs, might be more telling. It seemed understood that Medicare Part D costs would rise for
the plans, seniors, and the federal government. Hence, it seemed likely that regulations or formularies might
change in the future as costs grow. However, a legislated change seemed less likely in the short term even
though the government Medicare program would be responsible for paying for much of Sovaldi’s cost
through the Part D reinsurance program. This was partly due to a lack of health care legislative vehicles likely
to get much attention prior to the election. The concept of “mortgages” for high-cost drugs, in which costs of
a curative therapy are spread out over a number of years, appears to be an increasingly discussed idea.
However, while we believe this could help combat some of the initial barriers, we would foresee such a
concept more likely implemented in countries other than the U.S., where a single-payer system might make it
more feasible.

• Module 7 – “What The New HCV Drugs Mean To Private/Commercial Payers”: Commercial
plans had reacted differently to the introduction of Sovaldi. The expert noted that it seemed difficult to nail
down demand, but that commercial plans seemed to have done less to limit prescriptions than Medicaid
plans. PBMs have begun webinars and other training for plan sponsors to understand the cost of hepatitis C
treatments, and perhaps to better prepare plan sponsors for the next ramp in utilization, which we expect
will begin in Q4.

The Seeking Alpha author is way too low (IMO) on projected 3-DAA sales of $1.0B in 2015 and $1.6B in 2016. Even the most zealous GILD market-share bulls have higher projections for ABBV/ENTA’s regimen than that.

Two words sum up why biotech giant Biogen Idec has lost $13 billion in market value since March 19: "baby" and "bathwater."

The selloff that has ravaged biotech stocks over the past several months marks a drastic change in sentiment. Amid excitement over cutting-edge drug therapies, investors sent the biotech index soaring 120% over three years. Biogen (ticker: BIIB ) did even better, tripling in value during the same period. But since hitting a peak of more than $358 a share almost two months ago, the stock dropped as much as 23% amid the biotech bloodbath as investors fled from high-flying sectors in search of safety.

Biogen has recovered somewhat, and now trades just under $300, but other "Big Biotech" names have bounced back more strongly. This looks like a compelling opportunity for investors.

Granted, at 21 times estimated 2015 earnings, Biogen trades at a 30% premium to the broader biotech industry. But with profit growth averaging 20% a year, that multiple is justified. Meanwhile, the company's pipeline of innovative new drugs makes it one of the best bets for long-term growth in the industry.

At a Glance
Biogen Idec (BIIB)

Stock Price: $299.69
52-Week High: $358.89
52-Week Low: $194.66
Market Value: $71 billion
Est. 2015 EPS: $14.23
2015 P/E: 21
Est. Long-Term EPS Growth:* 20%
Est. (2015/2014) EPS Growth: 23.70%
Revenue (trailing 12 months): $7.6 billion
Dividend Yield: None
CEO: George A. Scangos
Headquarters: Cambridge, Mass.
*Based on analyst estimates looking ahead three to five years.
Sources: Thomson Reuters and Yahoo! Finance

"They have an embarrassment of riches with new drug candidates," says Eric Schmidt, an analyst at Cowen & Co. "The company can sustain a high growth rate and a high P/E multiple."

This year alone, Biogen could launch three new drugs in the U.S. Meanwhile, it is expected to unveil clinical trial results on several others. If all goes well, Biogen could climb more than 20% to $370 a share by this time next year, or 26 times 2015 earnings. Last year, Biogen earned almost $9 a share. This year, the company sees revenue growing as much as 28% and expects per share profit of $11.35 to $11.45.

**IMS prescription data for Sovaldi were released for the week ending 5/16/2014, the 23rd week of launch.

**The week's total Sovaldi prescriptions were 8,091, a change of -10.6% vs. last week's 9,054.

**The week's new Sovaldi prescriptions were 3,445, a change of -11.5% vs. last week's 3,891.

**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales could reach
the following under these scenarios:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base case) -
$8.9B from $10.6B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $7.7B from $8.9B
(3) Sovaldi new patient starts level off for rest of year -$10.4B, from $12.7B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $8.7B from $10.9B

**We are extrapolating IMS's capture rate with two quarters of actual historical sales.

**BOTTOM LINE: We had have seen new prescriptions at 3,500-3,600 scripts/week in weeks 18-22, with this week's new
scrips number representing a return to that baseline from last week's ''break-out'' of 3,891 new scrips. We would continue
watching trends before attributing this week's drop to secondary warehousing or insurer issues. We do expect some
slowing down as the year progresses, but scripts still indicate 2014 U.S. sales could approach $9B --suggesting a robust
near- and long-term opportunity.

$8B - $6.00/sh+
$10B - $7.00/sh+
$12B - $8.00/sh+
$15B - $9.50/sh+
$20B - $12.00/sh+

Since I am now looking for $10-12B (which has been moving up every week), I am still looking for $7-8.00 earnings. At a p/e of 20, it would be a price of 140-160.

My worst case is $8B and $6.00/sh with a 12 p/e (no growth, but not a big decline), so a price of $72.

**IMS prescription data for Sovaldi were released for the week ending 5/2/2014, the 22nd week of launch.

**The week's total Sovaldi prescriptions were 9,054, a change of +5.5% vs. last week's 8,588.

**The week's new Sovaldi prescriptions were 3,891, a change of +5.4% vs. last week's 3,689.

**Plugging this into our proprietary Sovaldi projector (available upon request), we believe U.S. Sovaldi sales could reach
the following under these scenarios:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 (base case) -
$10.6B from $9.6B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $8.9B from $8.0B
(3) Sovaldi new patient starts level off for rest of year -$12.7B, from $11.6B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $10.9B from $10.0B

**We are extrapolating IMS's capture rate with two quarters of actual historical sales.

**BOTTOM LINE: While both IMS reported Sovaldi NRx and TRx are both up week-over-week, our model of new patient
starts calculates an all-time high of 4,609 starts for the prior week, which increases our base case projection this week.
We have seen new prescriptions fluctuating from 3,800-3,900 scripts/week from weeks 12-17, and falling to 3,500-3,600
scripts/week in the prior four weeks, with this week's NRx of 3,891 representing a possible ''break-out'' from that trend (or
at least an indication of stability). We remain bullish on GILD and believe that each week going by in which Sovaldi sales
do not show meaningful erosion provides evidence of the large, untapped patient pool likely to provide good long-term
revenue sustainability

That comparison is somewhat misleading insofar as a substantial portion of the payment for the WL, Pharmacia, and Wyeth deals was in stock rather than cash.

Moreover, one should take into account PFE’s $40B+ of divestitures, including animal health (ZTS), infant formula (Nestlé), and OTC products (JNJ).

I haven’t posted what I think the odds of TAF failure are, so how can anybody say that my opinion with respect to TAF is unduly bearish?