Biotech Values

[Rocky3]

From Wells:

**IMS prescription data for Sovaldi were released for the week ending 4/18/2014, the 19th week of launch.
**The week's total Sovaldi prescriptions were 7,949, a change of +1.1% vs. last week's 7,870.
**The week's new Sovaldi prescriptions were 3,649, a change of +0.1% vs. last week's 3,645.
**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) -
$9.0B from $8.9B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $7.4B from $7.3B
(3) Sovaldi new patient starts level off for rest of year -$11.1B from $11.4B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $9.9B from $10.2B
**We are extrapolating IMS's capture rate with two quarters of actual historical sales.
**BOTTOM LINE: We are not surprised at some point we would see a stabilization of new prescriptions; we have seen
new prescriptions fluctuating from 3,800-3,900 scripts/week from weeks 12-17. Our base case projection is modestly
increased this week because TRx and NRx demonstrated a mild uptick or flatness vs. our expectation for them to begin
to decline as initial ''warehoused'' patients are worked through. We remain positive on GILD based on the long-term
Sovaldi opportunity, HIV foundation, and pipeline, 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.