Biotech Values

[Rocky3]

From Wells:

**IMS data for Sovaldi were released for week ended 9/19/2014.
**The week's total Sovaldi prescriptions were 5,943, a change of 1.78%
vs. last week's 6,051, and the week's new Sovaldi
prescriptions were 2,205, a change of 3.03%
vs. last week's 2,274.
**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 Q2Q3
then picks up Q4 (base case) $
12.69B
from $10.90B
(2) Rapidly decaying Sovaldi new patient starts rest of year (bear case) $
11.24B from $9.58B
(3) Sovaldi new patient starts level off rest of year $
11.64B from $10.02B
(4) Weekoverweek
NRx changes match those seen with Incivek+Victrelis at same point in launch $11.42B from $9.81B
**WW Q3 2014 sales track at $3.71B (above FactSet consensus $2.97B), though we note this projection has been fluctuating
somewhat week over week.
**BOTTOM LINE: Our base case projects 2014 sales of $14-15B,
as prescription trends were stronger than expected after
Labor Day. We continue to believe, based in part from tracking survey data we have analyzed, that there remains significant
warehousing ahead of the all-oral
launch given potentially compressing Sovaldi+Olysio use, and while very early approval of
sofosbuvir/ledipasvir is unlikely, the uptick postapproval
will likely be substantial and drive continued stock momentum.