Dominant HIV Treatments And Introduction Of GS9350 Non Protease Booster And Elvitegravir Integrase Inhibitor Should Boost Returns To Gilead Investors According To UBS Equity Analyst

• On 5:32 pm EDT, Monday October 19, 2009

67 WALL STREET, New York - October 19, 2009 - The Wall Street Transcript has just published its Biotechnology Report offering a timely review of the sector to serious investors and industry executives. This 70 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Trend Toward Orphan Disease Drug Development - Generic Drug Competition - Current Length Of FDA Approval Process - Ownership Ego Preventing Shareholder Returns - IPO And Secondary Offering Window Opening - Big Pharma R&D Pipeline - Decreased Clinical Development Risk - Impact Of Health Care Reform - Convergence Of Large-Cap Biotech And Pharmaceutical Companies - Easier Credit For Small Cap Biotech Companies - Developments In Cancer Chemotherapeutics - Gene Delivery Technology

Companies include: ADVENTRX (ANX); Abbott Labs (ABT); Advaxis (ADVX); Amedisys (AMED); Amgen (AMGN); Amylin Pharmaceuticals (AMLN); Antares Pharma (AIS); BioDelivery Sciences (BDSI); Biogen Idec (BIIB); Biomarin (BMRN); Boston Scientific (BSX); Bristol Myers (BMY); CVS Caremark (CVS); Celgene (CELG); Cerner (CRN); Cerus (CERS); Coke (KO); CombiMatrix (CBMX); Coventry Health Care (CVH); DARA (DARA); Eisai (ESALY); Eli Lilly (LLY); GenVec (GNVC); Gilead (GILD); GlaxoSmithKline (GSK); Health Management Associates (HMA); Human Genome Sciences (HGSI); Inspire Pharmaceuticals (ISPH); Intellect Neurosciences (ILNS.OB); InterMune (ITMN); International Stem Cell (ISCO.OB); Javelin Pharmaceuticals (JAV); Johnson & Johnson (JNJ); Keryx Biopharmaceuticals (KERX); Kraft (KFT); MAP Pharmaceuticals (MAPP); Medco (MHS); Merck (MRK); Merit Medical (MMSI); Novartis (NVS); Novelos (NVLT.OB); Novo Nordisk (NVO); Nutrisystem (NTRI); OSI Pharmaceutical (OSIP); Orexigen (OREX); Pepsi (PEP); Pfizer (PFE); Rite Aid (RAD); Schering-Plough (SGP); Takeda (TKPHF); Teva Pharmaceuticals (TEVA); Viropro (VPRO.PK); Walgreens (WAG); Wyeth (WYE); XOMA (XOMA); ZIOPHARM (ZIOP).

In the following brief excerpt from just one of the 17 in depth interviews in the 70 page report, Biotech industry expert Maged Shenouda discusses the outlook for the sector and for investors.

MAGED SHENOUDA is an Executive Director in the health care group of UBS Investment Research, specializing in coverage of large-cap biotechnology companies. An Analyst since 1999, he joined UBS in 2004 from J.P. Morgan, where he had served as a Biotechnology Analyst since 2000. Mr. Shenouda earlier worked as biotech and European Pharmaceuticals Analyst at Bear, Stearns & Co., and as an Associate Pharmaceuticals Analyst at Solomon Smith Barney. Prior to that, he was a Management Consultant with Price Waterhouse, focusing on the pharmaceutical industry, and he served as a Pharmaceutical Sales Representative for Abbott Laboratories. Mr. Shenouda holds an MBA in marketing from Rutgers University and a B.S. in pharmacy from St. John's University's College of Pharmacy. He is a registered pharmacist in New Jersey and California.

TWST: What do you expect the sector to look like in five years?

Mr. Shenouda: We probably will have fewer large-cap names. I think we'll probably see some acquisitions - I think Biogen Idec (BIIB) is on its way to being acquired at some point, with Carl Icahn involved in the name as well and having put themselves on the block about a year ago. That seems to be a foregone conclusion now. But the big question is at what price will it be acquired? Then we could see maybe one other name going. With one or two names going away, the sector becomes a few large caps with most companies in the mid- and small-cap categories. We're also going to see more and more collaborations between biotech and pharma and/or large-cap biotech.

TWST: How does it impact the sector if there are fewer large-cap players?

Mr. Shenouda: From an investor perspective, it would drive less generalist money into the sector. However, operationally, small- and mid-cap companies view large-cap biotech in the same way as they view large-cap pharma, which is to say as a means to financing through development and commercialization partnerships. Taking that a step further, if you have fewer large players, you will have less collaboration partners to work with if you're a small-cap player. To the extent that impacts the sector, you may have ultimately fewer companies because there are fewer financing alternatives.

TWST: Is there much investor interest right now in this sector?

Mr. Shenouda: Yes, and I think it is building. There is certainly interest in the small caps just because they've been doing so well this year. There is also interest in large caps, and we think that's going to grow significantly with resolution of the health care reform efforts in Washington.

TWST: Who are your top picks in the sector and why?

Mr. Shenouda: So right now, we like Gilead. They have a dominant HIV franchise. Their base business is doing well. We also expect upside from clinical data releases next year with a product called GS 9350, their non-protease booster, as well as elvitegravir, their integrase inhibitor. Combine that with potential changes for HIV treatment guidelines, where patients would be treated earlier at CD4 counts of 500 and less versus 350 currently. This would bring more patients into treatment. So that's more of a shorter-term commercial upside opportunity.

TWST: Who else?

Mr. Shenouda: Then we like Celgene (CELG). We think it's the best growth story in biotech. Its geographic expansion outside of the U.S. is going to maintain its top-line growth at the top of its peer group. We also expect positive data releases. Specifically, we anticipate positive detailed data from the MM-015 trial at the ASH meeting in December. We also like Human Genome Sciences (HGSI). We're excited about the prospects of BENLYSTA, that's its lead development-stage product for the treatment of lupus or SLE. They had a positive readout with the first Benlysta Phase III trial. We think that they are likely to have a positive readout with the second Phase III trial, called BLISS-76, reading out in November. We also believe this is a strong acquisition target.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 70 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

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