Biotech Values

[Rocky3]

From Wells:

**IMS data for Sovaldi were released for week ending 8/8/2014.
**The week's total Sovaldi prescriptions were 6,898, a change of -1.86% vs. last week's 7,029, and the week's new
Sovaldi prescriptions were 2,582, a change of -7.59% vs. last week's 2,794.
**Plugging this into our proprietary Sovaldi projector 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 Q4 (base case) -
$10.08B from $10.85B
(2) Rapidly decaying Sovaldi new patient starts rest of year (bear case) - $8.88B from $9.43B
(3) Sovaldi new patient starts level off rest of year -$9.85B from $10.79B
(4) Week-over-week NRx changes match those seen with Incivek+Victrelis at same point in launch - $9.66B from
$10.91B
**We updated our base case several weeks ago to include a steeper increase in scrips immediately following
sofosobuvir/ledipasvir approval, as well as steeper weekly decline and shallower weekly growth in Q3 and Q4 new
patient starts, respectively, and declines to date have slightly outpaced our earlier estimates. For a full chart of our
revenue scenarios, see our IMS scrips summary.
**Q3 2014 sales track at $3.09B (slightly above consensus $2.97B).
**BOTTOM LINE: We believe we're seeing deferral of patients from Sovaldi treatment, in anticipation of the upcoming
launch of the fixed-dose combo. With the sharp upward revision of full-year sell-side estimates over the past quarter,
FactSet consensus of $11.98B is just slightly below our base case scenario projection of WW Sovaldi sales of $12.07B--
though the run rate we believe still confirms potential robust near- and long-term opportunity, and provides additional
evidence high patient volume, once the all-oral cocktail is available, could offset any potential reimbursement restrictions.