Biotech Values

[marthambles]

ML on VRUS risk/reward

Price Objective Change Pharmasset, Inc. (VRUS, US$82.54, C-1-9) Upside options substantially outweigh downside We are substantially raising our VRUS price objective from $72 to $149 following our scenario analysis of the multiple upside options VRUS is pursuing with its HCV development stage nucleoside (nuc) based drug portfolio. Based on new data presented last week for VRUS' lead nuc (PSI-7977), we have increased confidence that this drug will play a major role in the future HCV treatment paradigm (in 2015+) by maximizing viral cure rates, both with interferon but also in an all oral HCV treatment cocktail. We view the risk/reward as very favorable into the next key data catalyst for VRUS (est Sept/Oct), as we believe shares have potential to double from current levels on the upside, with 20% downside on disappointing results.