Biotech Values

[Rocky3]

From Wells:

**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.