Biotech Values

[walk]

IDIX OPINION-Yaron Weber (citigroup)

Tyzeka (telbivudine) was approved by the FDA on Wednesday for the treatment of
HBV. The approval was in-line with our expectations and came slightly ahead of
the product's October 31st PDUFA date.

U.S. Launch: We expect Idenix and partner Novartis to launch Tyzeka within the
next 30 days. Idenix and Novartis have established a sales force of 35-40 reps
to promote Tyzeka in the U.S. Recall that Idenix and Novartis will share
equally in the profits from Tyzeka sales in the U.S.

European launch: Novartis has filed for regulatory approval of Sebivo
(telbivudine) in the E.U., Canada, China, South Korea, and Taiwan. Novartis is
currently holding label discussions with regulatory authorities in the E.U.;
following the conclusion of these discussion as well as discussion regarding
pricing and reimbursement, we forecast a launch in early '07.

Based on our checks, we do not believe that Tyzeka will be a strong player in
the HBV market due to lower potency than Bristol-Myers Squibb's Baraclude and
higher viral resistance profile than Baraclude or Gilead's Hepsera. We view
Tyzeka as a niche product that will likely garner minimal share in what is
becoming an increasingly crowded and competitive HBV market.

The HBV market is also a small commercial opportunity and the recent launch of
Baraclude, a best-in-class product, has been lackluster. Given the slow launch
of Baraclude following its approval by the FDA in March 2005, we forecast
modest sales for Tyzeka. Baraclude sales in the U.S. were $11 million in 2005,
and we forecast sales growing to $47 million in 2006 and $95 million by 2008.
Our 2007 and 2008 estimates for Tyzeka are $11 million and $28 million,
respectively.

In addition, we believe that NM283 is not potent enough to become a strong
seller in the HCV market. At the present time, the outlook for NM283 is also
uncertain since the drug has not established safety when dosed with ribavirin
yet. The drug/drug interaction studies with ribavirin have recently commenced,
and data are expected in H1:07. If positive, this will lead to a lengthy phase
III program.

Thus, we continue to hold a cautious view on the stock. However, we maintain
our Hold rating since we think our concerns are largely reflected at the
current stock price (trading at 2.6x cash).