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Biotech / Medical : Biogen
BIIB 256.94-0.2%1:30 PM EDT

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To: tuck who wrote (1650)6/29/2009 2:02:29 PM
From: mopgcw   of 1686
CS: Biogen Idec. Inc. (BIIB) NEUTRAL [V] M. Aberman
CP: US$ 50.07 TP: US$ 54 CAP: US$ 14.4b

Is PML Risk Dependent on Tysabri Duration?

• Conclusion: One of the major risks to Tysabri is the potential that longer duration of therapy increases the risk of PML. This
would limit duration of therapy and slow (if not stop) growth as patients cycle off drug - think about filling a bath tub with the
drain open. As recently as the 2009 AAN meeting in April, Biogen presented data to the academic community trying to
minimize the risk of duration as an increased risk by showing that the PML cases up to that point did not to show increased
risk with longer duration. However, since AAN there have been four new cases, all in patients on >24 months of therapy.
With 6 PML cases in the 6,800 patient on Tysabri for >24 months, the incidence of PML is approaching the 1/1000 assumed
at launch. Further, with 4 cases at >30 months of therapy, the incidence at >30 months is likely greater than 1/1000. While
the number of PML cases is still low and there is an unexplained imbalance between the US and EU (particularly Germany),
these new cases increase our caution regarding PML risk increasing with longer duration of therapy.

• What's New? Biogen reported its tenth case of PML since re-launch of Tysabri. The patient was in the EU, developed PML
after 30 months of Tysabri treatment, and was not in a clinical trial.

• Implication: On the positive side, since AAN, we have become less concerned about the competitive threats of oral MS agents
given toxicity associated with FTY720 and regulatory risk for cladribine. However, our cautious stance on Biogen has also
been driven by the risk of PML increasing with duration of Tysabri. In the near term, we believe the PML risk will be of greater
concern, and as such, we remain Neutral rated with a $54 Price Target and expect the stock to continue to be weak on this
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