VALUATION We continue to maintain our Outperform rating on Access Pharma and reiterate our price target of $7 per share. We believe MuGard will strongly boost the Company s top line in the coming quarters. MuGard has competitive advantages over its competitors for the management of oral mucositis. World-wide sales could exceed $200 million in 2015. We have a high confidence in the successful launch of MuGard. Our confidence is based upon factors including the strong clinical data, unmet medical needs in the mucositis market and the Company s focused marketing strategy. Although initial sales ramp is expected to be slow, sales of MuGard in the US should pick up steam when more and more doctors/nurses are convinced by MuGard s clinical benefits. Sales of MuGard will grow at a tremendous CRGR of 212% from 2011 to 2015 according to our long term model. We are optimistic with the company s pipeline which will provide sustainable growth for the company in the years to come. Both ProLindac and Thiarabine are in middle stage of development and both target the multi-billion dollar cancer market. We see great potential for the Company s three key platform technologies which create multiple product opportunities. We are especially impressed with the Company s CobOral delivery system. The oral insulin and oral human growth hormone have already achieved unprecedented oral bioavailability in preclinical studies. The Company has signed agreements with two major biotech companies to develop oral drugs with its CobOral delivery system. We believe Access will continue to monetize its platform technology in the coming years. We believe Access is undervalued at current share price compared to its peers. The Company will be profitable in fiscal 2013 with EPS of $0.01 per share. From 2011 to 2015, top line will grow at a CAGR of 212%. At current price of $2.2, Access trades at 4.2 x our estimated 2014 EPS of $0.53 and 1.7x our estimated 2015 EPS of $1.34 which are at huge discount compared to its peers. We believe Access should be trading at a P/E multiple of 15x which is only half of the biotech industry mean P/E multiple of 30x which translate into per share price of $7 based on our estimated EPS of $1.34 in fiscal 2015, discounted at 30% for four years.