Biotech Values

[Rocky3]

GILD - this week's scripts (a partial holiday week):

**The week's total prescriptions for Sovaldi were 5,291, up 10.9% vs. last week's 4,714.
**The week's new prescriptions for Sovaldi were 3,434, , up 8.9% vs. last week's 3,128.

Wells Fargo calculations:

**Plugging these new numbers 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 again Q4 $ 7.32B, up from $6.82B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) $ 5.44B, up from $4.97B
(3) Sovaldi new patient starts level off for rest of year $10.26B, up from $9.44B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch $9.39B, up from $9.21B

Their take-away:

**BOTTOM LINE: Though there have been some concerns raised recently about the sustainability of the Sovaldi launch, the
drug continues to show no signs of slowing down, with this week's prescription data showing considerable continued growth
in total scrips, retained growth in new patient starts, and sales tracking at over $7B worldwide in a base case that allows for
substantial slowdowns in uptake rates during the middle of the year. We remain buyers of GILD and believe that the worries
over eventual prescription flattening this year miss the ''big picture'' evidence of the very large longterm
market opportunity.

First time that I have seen a $10B number for 2014 from one of the analysts. Me: I think that the range is $8-$14B for 2014 and $12-$18B for 2015. Clearly I think that everyone has grossly underestimated how quickly the uptake will be and the size of the overall market. That should be very good news for ABBV?ENTA for 2015 too.

The GILD ads have hit TV. I have not seen one on TV yet. Again, good news for ABBV/ENTA for 2015.

Others thoughts?