Biotech Values

[Rocky3]

From Wells ($GILD):

**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.