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Biotech / Medical : Biogen
BIIB 228.52-0.4%Dec 2 4:00 PM EST

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From: mopgcw4/9/2011 10:05:37 AM
   of 1682
 
cs Biogen Idec (BIIB) NEUTRAL [V] R. Mehrotra
CP: US$ 73.03 TP: US$ 69 CAP: US$ 17.4b
BG12 - What are the real issues?

! DEFINING the potential of BG12: Biogen has guided to data from the DEFINE study (BG12 vs. placebo in RRMS) being
released in H1 2011. Following our recent deep dive into BG12's putative competitor Laquinimod (published 1st April), we
have conducted similar analysis on BG12. A detailed slide pack of our analysis is available upon request from your CS
sales representative. Top line conclusions:

! The conclusions that could be drawn from the headline DEFINE data release are likely to be limited due to differing primary
endpoint vs. other pivotal placebo-controlled studies. The endpoint of percentage of relapse-free patients differs from the
more commonly seen relapse-rate. Historically a % relapse free endpoint has been harder to achieve.

! BID vs. TID - We are cautious on the ability of BG-12 to hit significance at BID dosing. We think BID dosing needs to work
for BG-12 to be commercially viable as our talks with KOLs suggest few would prescribe the TID regimen to avoid low
compliance, reducing BG-12's "real-life" efficacy. Some scientific logic suggests its total dose drives efficacy.
! We get mixed opinions from physicians on tolerability in "real-life use". BG-12 is an oral dimethyl fumarate which has been
used for psoriasis in Germany since 1994 - physicians are used to the BG-12 side effects (flushing and GI). However, they
titrate the dose (both up and down) frequently with the average dose being 360-480mg. This raises questions about BG-12s
tolerability at high doses in the MS setting.

! We see the biggest wildcard upside for BG12 in combination use. As discussed in our laquinimod work, we think the
biggest upside for oral, oral, non-immunosuppressive agents, with clean safety and a neuroprotective profile is combination
use. BG12 could fit this profile - as does laquinimod. We are focused on BG12 EXPLORE study.

! Aloha - We are attending AAN next week to gain further insight, not just into the ALLEGRO data, but also the
neuroprotective hypothesis and concomitant advances in imaging, dynamics with the current marketed MS therapeutics,
and MS agents in development. If you would like to be added to a specific distribution list for feedback from the meeting
please email or contact your CS sales representative.
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