Replies to post #175176 on Biotech Values

[Rocky3]

From Wells this week:

(1) Base case - secondary warehousing - growth in new patient starts slows Q2-Q3 then picks up again Q4 - $10.80B, up
from $7.32B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) - $8.18B, up from $5.44B
(3) Sovaldi new patient starts level off for rest of year - $15.54B, up from $10.26B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch - $14.34B, up from
$9.39B

Base case is now $10.8B.

Level NRx is $15.5B!!!!!!!!!!!!! Wow!!!!!!!!!!!

Even higher than my top number.

**BOTTOM LINE: We believe GILD shares have stalled of late in part due to concerns regarding a potential slowdown in
uptake this year as initial ''warehoused'' patients go through treatment and other untreated patients await the all-oral
regimen. While we fully expect this will happen at some point, with each week of growth we believe the chance for 2014
sales to exceed even high expectations increases, and the large long-term opportunity within this market - especially
once GILD has a more optimal all-oral regimen - becomes clearer and clearer.

Couldn't agree more.

[pollyvonwog]

GILD: Sovaldi Trx @ 6,835 and NRx slipped a little to 3,974.

[Rocky3]

From Wells today:

**The week's total prescriptions for Sovaldi were 6,835, a change of +6.8% vs. last week's 6,398.
**The week's new prescriptions for Sovaldi were 3,974, a change of -3.8% vs. last week's 4,114.
**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 $ 8.73, down from $10.80B
(2) Rapidly decaying Sovaldi new patient starts throughout remainder of year (bear case) $ 6.97B, down from $8.18B
(3) Sovaldi new patient starts level off for rest of year $12.52, down from $15.54B
(4) Week over week NRx changes match those seen with Incivek+Victrelis at same point in launch $ 11.91, down from $14.34B

**BOTTOM LINE: We are not surprised that at some point we are seeing a slowing of new prescriptions; whether this is a
new trend or a oneweek blip remains unclear. We had modeled new patient starts declining in Q2 and Q3 as the initial ''warehoused'' population was worked through and more patients await the all oral regimens expected in Q4. We believe the potential for a slowdown from the initial asymptotic trajectory was an overhang on GILD shares but note that bigger picture, even before the optimal regimen is available scrips still indicate 2014 U.S. sales could approach $9Bsuggesting a robust near and longterm opportunity; we would use any weakness today as an opportunity to add to positions.