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Biotech / Medical : Biogen
BIIB 199.65+3.4%May 20 4:00 PM EDT

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From: mopgcw8/26/2009 7:49:28 PM
   of 1684
DB: ***FDA approved a branded generic form of Bayers Betaseron, beta-interferon,
for multiple sclerosis: launch expected for fall'09. While generic
betaseron could have a modest impact to Avonex revenues, we believe
ultimately near term pricing pressure forces will be mostly offset by greater
convenience and better tolerability for Avonex. Every $100M of Avonex
represents $0.22 in BIIB EPS.***

*Generic betaseron already available in EU. Novartis conducted trials in
2000 patients to attain approval of their generic betaseron, branded as Extavia.
The drug is available in 12 countries in the EU, at a 20% discount to
Betseron. We note that manufacturing issues/supply constraints have limited
the uptake of the drug in the EU.

*Avonex most expensive ABCR but also most convenient. Avonex,
Betaseron, Copaxone, Rebif & Tysabri price/patient/year is $30K, $23-25K,
$28K, $27-28K, $29K. Dosing for the ABCR's is as follows: Avonex: 1x/
week, Betaseron: every-other day, Copaxone: 1x/day, Rebif: 3 days/week .
Additionally we note that physicians consider Betaseron to be less tolerable
than Avonex. Thus while pricing pressure is a concern, greater convenience
and better tolerability for Avonex should provide a buffer to large scale pricing
and volume erosion.

*We model some limited impact from Extavia. Our current 2009 US
Avonex estimate of $1.45B takes into consideration 9.5% price increase
and stabilizing demand. We forecast limited 2%, 0%, -5% growth rate in
2010, 2011, 2012 given the presence of Extavia. We forecast greater declines
post 2013 (-10% and -15% every year there-after) when Avonex's
patent expires.
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