Biotech Values

[Rocky3]

From Wells:

**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.