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

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From: mopgcw10/9/2009 7:14:24 PM
   of 1684
CS: CP: US$ 48.60 TP: US$ CAP: US$ 14b
Briefing Docs Raise Questions on Fampridine

• Action/Event: The FDA briefing documents for the Fampridine-SR Advisory Committee Panel were released today. FDA
raised concerns on both the safety and efficacy of Fampridine. Ultimately, we believe Fampridine will get through the panel
and NDA process, but not without significant risk.

• Investment Case: While both Phase III trials hit primary endpoints, secondary endpoints such as walking speed did not
confirm efficacy, leading FDA to question whether the data were sufficiently robust. In addition, while reviewers acknowledge
there was no true increase in risk of seizure at 10 mg bid dose, they are concerned about therapeutic window with 10-fold
increase in seizure risk at 20 mg bid and the fact that in this trial patients were pre-screened with EEG to rule out seizure risk,
confounding the comparison of seizure risk with a historical control in the open label extension. The bottom line is these
panels are notoriously unpredictable and this panel will not be straightforward, either. However, given the widespread use of
compounded 4-aminopyridine and the presence of nine neurologists on the panel who may believe the Fampridine-SR
provides better risk/benefit than the compounded version, we think the panel will have a more positive view than reflected in
the FDA briefing document.

• Catalysts: While the near term focus will be on the Fampridine-SR FDA Advisory Panel on October 14th, a more significant
catalyst for Biogen is 3Q earnings/Tysabri patient additions on October 20th.

• Valuation: Our 12-month price target of $54 for Biogen is based on a DCF analysis. For our DCF analysis, we use cost of
equity of 10.2%, and assume 4.0% annual cash flow growth rate in 2013-2016 and a terminal growth rate of 2.0% in 2016.
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