26 November 2013 Americas/United States Equity Research Biotechnology Global Biotech & Pharma: The HCV Revolution - Edition 2 Research Analysts COMMENT Ravi Mehrotra PhD 212 325 3487 [email protected] What Is The N Number: Keeping An Eye On Vamil Divan, MD 212 538 5394 Potential Longer Term Pricing Disruption [email protected] Koon Ching PhD ■ No pricing disruption expected in the near-term, but potential exists in 212 325 6286 the medium- to long-term. OK this is somewhat obvious, but bear with us: [email protected] Value/NPV = Price x Mkt Share x Mkt Size x Mkt Longevity. This is the Bruce Nudell PhD second note in our "The HCV Revolution" series. HCV is clearly a highly 212 325 9122 competitive therapeutic area with many players vying for their share of the [email protected] potentially >$15B/year HCV market. We previously addressed immediate- European Pharma Team 44 207 888 0304 term pricing of next-generation regimens, specifically for Sofosbuvir (LINK). [email protected] In this note, we simply highlight the potential number of competing all-oral, Ronak H. Shah, Pharm.D., CFA IFN-free regimens, and timing of key data, in HCV (Exhibits 1-7). The 212 325 9799 number of ultimate competitors has important implications for the HCV [email protected] market. In our view, in a HCV market with up to 4−5 players, we expect Lee Kalowski "normal drug rules" to apply: i.e. the order to market, overall clinical profile of 212 325 9683 drug, and commercial prowess will primarily dictate market share, with price [email protected] used as a tool but not in a "disruptive" way. However, in a HCV market with Jason Kantor, PhD >5−6 players, we caution that pricing disruption may be used by later 415 249 7942 [email protected] entrants. There are currently 3 key combinations from ABBV/ENTA, BMY, Ari Jahja and GILD in late-stage clinical development. However, there are >10 212 325 0767 regimens in mid-stage clinical development (with POC PII data readouts [email protected] from now through 2014) that could enter the market in 2017 and beyond. Jeremiah Shepard, PhD 415 249 7933 Exhibit 1: Launch Timeline for All-Oral, Interferon-Free Combinations [email protected] 2013 2014 2015 2016 2017 2018 2019 2020 Anuj Shah US 212 325 6931 Sofosbuvir/ [email protected] Ledipasvir Sofosbuvir Jeremy Joseph 212 325 3870 ABT-450/r Asunaprevir [email protected] ABT-267 Daclatasvir ABT-333 BMS-791325 Matthew Keeler 212 325 9008 [email protected] Faldaprevir Deleobuvir Jacob Lundberg 212 325 6785 [email protected] Ex-US Sofosbuvir/ Ledipasvir Sofosbuvir ABT-450/r Asunaprevir ABT-267 Daclatasvir ABT-333 Faldaprevir BMS-791325 Deleobuvir J Asunaprevir Daclatasvir Source: Company data, Credit Suisse research DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ON TRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION® Client-Driven Solutions, Insights, and Access Revolution HCV The Pharma: & Biotech Global Exhibit 2: Potential Launch Timeline for All-Oral, Interferon-Free Combinations Potential Launch Timeline for All-Oral, Interferon-Free Combinations 2013 2014 2015 2016 2017 2018 2019 2020 US Sofosbuvir/ Ledipasvir Sofosbuvir - Edition 2 Edition ABT-450/r Asunaprevir ABT-267 Daclatasvir ABT-333 BMS-791325 Faldaprevir Deleobuvir Ex-US Sofosbuvir/ Ledipasvir Sofosbuvir ABT-450/r Asunaprevir ABT-267 Daclatasvir ABT-333 Faldaprevir BMS-791325 Deleobuvir J Asunaprevir Daclatasvir 26 November 2013 November 26 Source: Company data, Credit Suisse estimates 2 Revolution HCV The Pharma: & Biotech Global Exhibit 3: Current Late-Stage HCV Pipeline – All-Oral, IFN-Free Combinations Current Late-Stage HCV Pipeline – All-Oral, IFN-Free Combinations Combination Company Patient Population US EU Japan Launch Launch Launch Sofosbuvir/Ledipasvir +/- RBV GILD G1 Naïve Late 2014/ 2015 Late 2015 G1 Experienced Early 2015 Sofosbuvir + RBV GILD G2/3 Naïve Late 2013 2014 2015 - Edition 2 Edition G2/3 Experienced ABT-450/r/ABT-267 + ABT-333 +/- RBV ABBV/ENTA G1 Naïve Late 2014/ 2015 - - - - - G1 Experienced Early 2015 ABT-450/r/ABT-267 ABBV/ENTA G1b Naïve 2016 2017 2017 G1b Experienced BMS-791325/Daclatasvir + Asunaprevir BMY G1 Naïve 2016 2017 - - - - - G1 Experienced G4 Naïve Asunaprevir + Daclatasvir BMY G1b Naïve - - - - - - - - - - 2015 G1b Experienced Faldaprevir + Deleobuvir +/- RBV BI G1b Naïve 2015 2016 - - - - - G1b IFN-Ineligible BI = Boehringer Ingelheim 2013 November 26 Source: Company data, BioMedTracker, Credit Suisse research 3 Revolution HCV The Pharma: & Biotech Global Exhibit 4: Current Mid-Stage HCV Pipeline – Combinations Current Mid-Stage HCV Pipeline – Combinations Combination Company Treatment Duration G1 G2 G3 G4 G5 G6 Topline Data Sofosbuvir + GS-5816 GILD 8 and 12 weeks Q4’13 ABT-493 + ABT-530 ABBV/ENTA Not Disclosed Not Disclosed 2014 MK-5172 + MK-8742 MRK 8,12, and 18 weeks 2014* Simeprevir + GSK’805 + TMC’055/r JNJ/MVIR Not Disclosed Not Disclosed 2014 Simeprevir + Daclatasvir JNJ/MVIR/BMY 12 weeks Q4’13/H1’14 - Edition 2 Edition Simeprevir + Samatasvir JNJ/MVIR/BMY 12 weeks Q4’13 Simeprevir + Samatasvir + TMC’055/r JNJ/MVIR/IDIX 12 weeks Not Disclosed 2014 Simeprevir + VX-135 JNJ/VRTX 12 weeks 2014 VX-135 + Daclatasvir VRTX/BMY 12 weeks Early 2014 MK-5172 + Daclatasvir MRK/BMY Not Disclosed 2014? Faldaprevir + Deleobuvir + PPI-668 BI/Presidio 12 weeks Q2’14** ACH-3422 + ACH-3402 ACHN Not Disclosed Not Disclosed Late ’14/Early ‘15 ACH-2684 + ACH-3102 ACHN Not Disclosed Not Disclosed Late ’14/Early ‘15 IDX20963 + Samatasvir IDIX Not Disclosed Not Disclosed Late ’14/Early ‘15 XXX + EDP-239 NVS/ENTA Not Disclosed Not Disclosed Late ’14/Early ‘15 Danoprevir/r + Setrobuvir + Mericitabine ROG 12 and 24 weeks AASLD 2013**** Danoprevir/r + Setrobuvir ROG 12 and 24 weeks AASLD 2013**** Danoprevir/r + Mericitabine ROG 24 weeks AASLD 2012**** *MRK presented topline PII data at AASLD 2013. Additional PII data will be presented in 2014. **BI/Presidio presented preliminary topline PII data at AASLD 2013. Additional PII data will be presented in Q2’14. ****ROG has already presented PII data on these regimens. BI = Boehringer Ingelheim 2013 November 26 Source: Company data, BioMedTracker, Credit Suisse research 4 Revolution HCV The Pharma: & Biotech Global Exhibit 5: GILD's HCV Franchise Timeline GILD’s HCV Franchise Timeline NEUTRINO NEUTRINO Enrolling Topline Data Jul 2012 Feb 2013 FUSION FUSION CHMP Enrolling Topline Data Opinion Jun 2012 Feb 2013 Q1’14 POSITRON POSITRON NDA/MAA FDA - Edition 2 Edition Enrolling Topline Data Filing PDUFA Mar 2012 Nov 2012 Apr 2013 Dec 8, 2013 Sofosbuvir FISSION FISSION FDA Enrolling Topline Data AdCom Dec 2011 Feb 2013 Oct 25, 2013 VALENCE VALENCE Enrolling Topline Data Sep 2012 Oct 2013 . 2011 2012 2013 2014 2015 ION-1 ION-1 Enrolling Topline Data Oct 2012 Q1’14 ION-2 ION-2 NDA/MAA FDA/EMA Enrolling Topline Data Filing Approval Jan 2013 Q4’13 Q2’14 2015 ION-3 ION-3 Enrolling Topline Data May 2013 Q4’13 26 November 2013 November 26 Sofosbuvir/LedipasvirFDC Source: Company data, Credit Suisse estimates 5 Revolution HCV The Pharma: & Biotech Global Exhibit 6: ABBV/ENTA – Expected Topline PIII Data ABBV/ENTA and GILD – Expected Topline PIII Data Expected ABBV/ENTA Patient Setting N Regimen Treatment Duration Topline Data SAPPHIRE-I G1 Naïve 631 3 DAA + RBV 12 weeks 96% SVR12 (Nov 18, 2013) SAPPHIRE-II G1 Experienced 400 3 DAA + RBV 12 weeks Q4’13/Q1’14 - PEARL-II G1b Experienced 200 3 DAA +/- RBV 12 weeks Q1’14 Edition 2 Edition PEARL-III G1b Naïve 400 3 DAA +/- RBV 12 weeks Q1’14 PEARL-IV G1a Naïve 300 3 DAA +/- RBV 12 weeks Q4’13 TURQUOISE-I HCV/HIV G1 300 3 DAA + RBV 12 and 24 weeks H2’14 Naïve/Experienced TURQUOISE-II Compensated Cirrhotic G1 300 3 DAA + RBV 12 and 24 weeks Q1’14 Naïve/Experienced Expected GILD Patient Setting N Regimen Treatment Duration Topline Data ION-1 G1 Naïve 800 2 DAA +/- RBV 12 or 24 weeks Q1’14 ION-2 G1 Experienced 400 2 DAA + RBV 12 or 24 weeks Q4’13 ION-3 G1 Experienced 600 2 DAA +/- RBV 8 or 12 weeks Q4’13 26 November 2013 November 26 . Source: www.clinicaltrials.gov, Company data, BioMedTracker, Credit Suisse research 6 Revolution HCV The Pharma: & Biotech Global Exhibit 7: Current HCV Pipeline – Direct Acting Antivirals Current HCV Pipeline – Direct Acting Antivirals Phase I Phase II Phase III BZF961 MK-2748 ABT-493 ACH-2684 ABT-450 Faldaprevir Novartis Merck AbbVie/Enanta Achillion AbbVie/Enanta BI MK-6325 Danoprevir GS-9256 Asunaprevir Simeprevir F Merck Roche Gilead BMS J&J/Medivir GS-9451 MK-5172 Gilead Merck - Edition 2 Edition Sovaprevir Vaniprevir Achillion Merck JNJ-47910382 EDP-239 ACH-3102 GS-5816 Daclatasvir Ledipasvir J&J Novartis/Enanta Achillion Gilead BMS Gilead JNJ-56914845 MK-8742 ABT-267 J&J Merck AbbVie Samatasvir PPI-668 Idenix Presidio ABT-530 AbbVie GSK2878175 PPI-383 ABT-072 GS-9669 ABT-333 BMS-791325 GSK Presidio AbbVie Gilead AbbVie BMS Tegobuvir TMC647055 Deleobuvir Gilead J&J BI Legend: Setrobuvir Protease Inhibitor Roche NS5A