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BRIEF Healthcare Finance 09.04.12

Medical Meetings

■ The European Respiratory Society (ERS) Annual Congress, Vienna, Austria (Sept. 1-5)

■ International Spinal Cord Society (IS-CoS) Annual Scientific Meeting, London, U.K. (Sept. 3-5)

■ Society for the Study of Inborn Errors of Metabolism (SSIEM) Annual Symposium, Birmingham, U.K. (Sept. 4-7)

■ Chicago Multidisciplinary Symposium in Thoracic Oncology, Chicago (Sept. 6-8)

■ European Society of Retina Specialists (EURETINA) Congress, Milan, Italy (Sept. 6-9)

■ American Society of Surgery of the Hand (ASSH) Annual Meeting, Chicago (Sept. 6-8)

■ European Federation of Neurological Societies (EFNS) Congress, Stockholm, Sweden (Sept. 8-11)

■ European Thyroid Association (ETA) Annual Meeting, Pisa, Italy (Sept. 8-12)

clinical catalysts

■ Threshold Pharmaceuticals-TH-302: Updated top-line data including survival data from the Phase II study in pancreatic cancer (2H12)

■ Roche-Herceptin: Data from final 2-year vs. 1-year analysis of Phase III HERA trial in adjuvant HER2-positive breast cancer (2H12)

■ Roche-RG7652 (anti-PCSK9): Phase II data and Phase III development plan in hypercholesterolemia at Investor Day (Sept. 5)

■ Teva/Active Biotech-laquinimod: Data from Phase II trial in Crohn’s disease (2H2012)

For a Full list oF clinical cata-lysts see the BloomBerg industries

catalyst calendar: Bi Phrm sBcalend <go>

By ANDREw BERENS, MD, SENIOR HEALTHCARE ANALyST, GRACE GUO, BLOOMBERG INDUS-TRIES

amicus therapeutics will provide additional data for two of its drugs, known as pharmacological chaperones, at the Annual Symposium of the Society for the Study of Inborn Errors of Metabolism (SSIEM), which begins today in the U.K.

Screening results from a Phase III trial, named Facets (Study 011), will be pre-

Amicus to Present Pompe and Fabry Disease Data

the Week ahead: Immunogen, Peregrine, Auxilium present data at medical meetings; Salix, Nuvo, Galderma may see FDA approv-als; Novartis’ Podhaler will be reviewed. Pages 1-3.

BlooMBerg insight: Japanese drug approvals may increase; Sanofi’s Lemtrada may still trigger Genzyme CVR payment despite delay; Recent court decision leaves device companies open to litigation. Pages 4-5.

Week in revieW: Idenix faces second clinical hold; Roche, Immunogen’s T-DM1 ex-tends survival; J&J’s Zytiga gets priority review; St. Jude plans reorganization. Pages 6-8.

key catalyst insight: Glaxo and Teva’s drugs for rare asthma have large market op-portunity. Page 9.

theMes and drivers: Rise in incidence of respiratory disorders creates target for pharma companies. 0.

iPo & short interest tracker: European pharma and biotech IPOs have poor performance; Navidea gains support ahead of FDA decision. Pages 12-13.

HEALTHCARE wATCH

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Amicus, GSK Expected to Have Slow Start in Fabry Disease

Amicus/GSK's Amigal

Sanofi's Fabrazyme

Shire's Replagal

Source: Bloomberg

2012-2017 reflects consensus estimates

www.bloombergbriefs.com

This document is being provided for the exclusive use of <[email protected]>

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sented on Sept. 5. This trial assesses migalastat HCl, anticipated trade name Amigal, in a genetic disorder called Fabry disease.

Amicus and glaxosmithkline collaborate to develop therapeutics for Fabry disease. Amicus will market products in the U.S. while Glaxo will do so in the rest of the world. sanofi’s Fabrazyme is marketed globally for Fabry disease. shire markets Replagal in the EU and other countries for Fabry disease but withdrew an application to sell the drug in the U.S.

Preliminary data from the Phase II drug-drug interaction trial (Study 010), which looks at a second drug called AT2220 co-administered with enzyme replacement therapy for Pompe disease will be presented on Sept. 5. Pre-clinical data for a direct co-formulation of the two therapies will also be available.

Amicus intends to present full data on all four doses tested in Study 010 later this year. The company will also update its development plan for the drug in Pompe disease. Lumi-zyme, an enzyme replacement therapy marketed by sanofi, is the only approved drug for this genetic disease.

Immunogen, Peregrine to Present on Lung Cancer DrugsBy ANDREw BERENS, MD, SENIOR HEALTHCARE ANALyST, GRACE GUO, BLOOMBERG INDUSTRIES

The Chicago Multidisciplinary Symposium in Thoracic Oncology will feature data on immunogen’s IMGN901, a treatment for small-cell lung cancer (SCLC), and Peregrine’s bavituximab for non-small cell lung cancer (NSCLC).

Immunogen will present Phase I dose-finding data in first-line SCLC. IMGN901 has advanced into Phase II development in the North trial, with interim data expected in the second half of 2013.

Peregrine will present data from its Phase IIb trial of bavituximab in combination with docetaxel in second-line NSCLC. This is the company’s lead product, which it expects to advance into pivotal Phase III trials mid-2013.

Data for Auxilium, Pfizer’s Drug for Hand Condition FeaturedBy ANDREw BERENS, MD, SENIOR HEALTHCARE ANALyST, GRACE GUO, BLOOMBERG INDUSTRIES

This week at the Annual Meeting of the American Society of Surgery of the Hand, data on auxilium/Pfizer/Biospecifics’ injectable drug for a debilitating hand condition known as Dupuytren’s contracture will be presented.

The disease affects the connective tissue in the palm of the hand and causes the for-mation of rope-like cords that prevent a patient from properly straightening their fingers.

The drug, currently marketed by Auxilium as Xiaflex in the U.S and by Pfizer as Xiapex in Europe, is approved to dissolve the tissue in patients with one palpable cord. The data scheduled to be presented at the conference is from a Phase IIIb trial that tested multiple concurrent injections of Xiaflex in patients with more than one cord.

Auxilium plans to initiate a larger trial for multiple palpable cords in the third quarter, with data expected in the first half of 2014 and regulatory filings planned for the second

the week ahead…

AUDE GERSPACHER, INTELLECTUAL PROPERTy, BLAw

recent lawsuits filed:

■ Purdue Pharmaceuticals Prod-ucts L.P. v. watson Pharmaceuti-cals, Inc., No. 12-cv-05390, Com-plaint (D. N.J. Aug. 27, 2012); U.S. Patent No. 7,682,628 (zolpidem tartrate); Brand name: INTERMEZ-ZO (insomnia)

■ Merck & Co., Inc. et al v. Sun Pharmaceutical Industries, Ltd et al, No. 12-CV-05374, Complaint (D. N.J. Aug. 27, 2012); U.S. Patent Nos. 5,757,082; 6,653,286 (ganirelix acetate); Brand name: GANIRELIX ACETATE INJECTION (IVF)

■ Janssen Products, L.P. et al v. Lu-pin Limited et al, No. 12-CV-05358, Complaint (D. N.J. Aug. 24, 2012); U.S. Patent No. RE43,596 (daruna-vir); Brand name: PREZISTA (hu-man immunodeficiency virus (HIV))

■ Purdue Pharmaceuticals Products L.P. et al v. Actavis Elizabeth LLC, No. 12-CV-05311, Complaint (D. N.J. Aug. 23, 2012); U.S. Patent No. 7,682,628 (zolpidem tartrate); Brand name: INTERMEZZO (insomnia)

track ongoing us litigation: Bi Phrm liti <go>

PAtent WAtCH

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the week ahead…

half of that year to expand the drug’s label for this additional use.

Salix, napo Pursue U.S. Crofelemer ApprovalBy ANDREw BERENS, MD, SENIOR HEALTHCARE ANALyST, GRACE GUO, BLOOMBERG INDUSTRIES

salix and napo’s gastro-intestinal compound crofelemer, which is under review by the FDA as a treatment for chronic diarrhea in HIV/AIDS patients on anti-retroviral drugs, may be approved by Sept. 5.

The regulatory authority was expected to issue a decision in June but extended its review without asking for additional studies. The FDA has given crofelemer priority review status.

Discovered by Napo, crofelemer is a novel, first-in-class compound for the condition, which, according to the Center for Disease Control (CDC), affects around 338,000 of the 1.2 million patients living with HIV/AIDS in the U.S.

Salix holds exclusive rights for the drug in this indication, pediatric diarrhea and acute infectious diarrhea in North America, Europe and Japan, as well as a worldwide license to all other possible human indications.

nuvo, Galderma May Reintroduce Anesthetic Cream By ANDREw BERENS, MD, SENIOR HEALTHCARE ANALyST, GRACE GUO, BLOOMBERG INDUSTRIES

nuvo research and galderma laboratories may soon be able to market Pliaglis in the U.S. again if the FDA is satisfied with the manufacturing transfer of the drug. Bloom-berg Industries estimates that the regulatory body may issue a decision by Sept. 4.

Galderma, which licensed worldwide marketing rights for the drug, voluntarily removed Pliaglis from the U.S. market in 2008, citing manufacturing issues at a third-party contract manufacturer. Galderma subsequently transferred manufacturing to its own facilities and resolved the issues.

The FDA failed to approve market re-introduction on April 16 this year, requesting ad-ditional information on the manufacturing transfer as well as additional stability data and proposed labeling revisions. New clinical or toxicology studies were not required. The application was resubmitted on May 4.

Pliaglis is a topical local anesthetic cream that would be approved for use on intact skin in adults undergoing superficial dermatological procedures like dermal filler injections. It employs Nuvo’s proprietary phase-changing technology to form a pliable peel on the skin when exposed to air. According to Nuvo, there are no FDA-approved competing products. The drug will compete with local anesthetics that can be injectable or topical.

Panel to Advise FDA on novartis’ new tOBI FormulationBy ANDREw BERENS, MD, SENIOR HEALTHCARE ANALyST, GRACE GUO, BLOOMBERG INDUSTRIES

The FDA Anti-Infective Drugs Advisory Committee will meet tomorrow to review a new formulation of novartis’ drug TOBI that treats an infection in cystic fibrosis patients. Panel members will advise the agency ahead of its expected decision date in October, as per Bloomberg Industries estimates.

TOBI is approved as a nebulized formulation of the antibiotic tobramycin and is used to treat an infection called Pseudomonas aeruginosa in patients with the lung disease. The FDA is considering the TOBI Podhaler, which delivers tobramycin as an inhalable dry powder. The Podhaler is meant to be more convenient for patients since it delivers the antibiotic in a portable and disposable device and does not require refrigeration or a power source.

Documents reviewing the application were released late last week. Reviewers ques-tioned whether the inhaled powder was as safe and effective as the nebulized form and whether the response was durable.

The reviewers also noted that patients in one study were less compliant with the TOBI Podhaler compared to TOBI.

■ Cornerstone Therapeutics- lix-ivaptan: FDA release of briefing documents for Sept. 13 Cardiovas-cular and Renal Drugs Advisory Committee meeting to discuss the proposed indication of the treatment of symptomatic hypervolemic and euvolemic hyponatremia associated with heart failure and syndrome of inappropriate antidiuretic hormone (SIADH), respectively (Sept. 11)

■ Sanofi-Aubagio: PDUFA date for relapsing multiple sclerosis (Sept. 12)

■ Amgen/GlaxoSmithKline/Daiichi Sankyo-Prolia: PDUFA date for male osteoporosis (Sept. 20)

■ FDA Public Meeting to discuss implementation of GDUFA and recent communications concerning GDUFA implementation to provide an opportunity for the public to pres-ent views on material (Sept. 21)

■ Regeneron/Bayer-Eylea: PDUFA date for BLA in central retinal vein occlusion (Sept. 23)

■ FDA Office of Orphan Products Development workshop (Pediatric Medical Devices)-meeting to focus on challenges in pediatric device development--namely, business planning and funding concerns; and how sponsors can most effectively interact with the FDA. The goal of this meeting is to engage and edu-cate pediatric innovators and device industry sponsors. This educational meeting will consist of live presenta-tions provided by FDA experts from various Centers and Offices, as well as from outside experts (Sept. 24)

For a Full list oF regulatory catalysts see the BloomBerg industries catalyst calendar Bi Phrm sBcalend <go>

ReGULAtORyCAtALyStS



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BLOOMBeRG InSIGHt

sanofi’s lemtrada May trigger $1 genzyme cvr PaymentBy ANDREw BERENS, MD, SENIOR HEALTH-CARE ANALyST, BLOOMBERG INDUSTRIES

sanofi’s multiple sclerosis (MS) drug Lemtrada may still receive FDA approval by April 2013 even after the FDA’s re-fusal of an application for approval early last week.

The drug must be approved by then in order for former shareholders of gen-zyme, which was acquired by Sanofi, to receive a $1-per-share contingent value right (CVR) payment. Genzyme share-holders received CVRs that trigger upon various events, resulting in eventual pay-ments of up to $14, when Sanofi bought the company.

Sanofi will resubmit the application in a new format as soon as possible. Since FDA did not seek additional data or fur-ther studies there may be only a slight de-lay such that approval by April 2013 is still a possibility assuming the drug is given a standard review. novartis’ MS drug Gilenya was reviewed in nine months, in-cluding a three-month extension, after the company submitted additional data.

Sanofi has already missed the deadline for one CVR triggering event. It said a year ago the enzyme manufacturing goals for Cerezyme and Fabrazyme wouldn’t be met, meaning the first $1 CVR wasn’t paid out. There are a number of other, more valuable CVR payments that may be trig-gered by 2020.

Lemtrada was previously sold as Cam-path for leukemia. The companies have indicated that Campath will be withdrawn from the market to prepare for a launch in MS, allowing Sanofi to price it at a pre-mium consistent with rival therapeutics. Lemtrada could be priced competitively given the fact that it has demonstrated the ability to halt the progression of MS with two doses. Novartis’ Gilenya commands a $40,000 per year price tag.

There are about 200,000 drug-treated MS patients, according to Bloomberg Industries analysis. Novartis’ Gilenya captured 2 percent of the U.S. MS market within 8 months. If Lemtrada is priced at $100,000 per patient, a 2 percent share of the $13 billion MS market could trigger a payment of $2 per share contingency to CVR holders.

court says device companies Must Face state-law claimsBy JASON M. BROCKS, BLOOMBERG LAw

The New Jersey Supreme Court recently handed down a decision with potentially far-reaching effects on products liability litigation involving FDA-approved medical devices, opening another avenue for po-tentially costly, protracted, and uncertain litigation against device companies.

while limited to litigation taking place in New Jersey, the court’s decision is significant for medical device companies headquartered in the state and for any medical device company whose products are or had been used in New Jersey.

The decision in Cornett v. Johnson & Johnson allows plaintiffs to sue medical de-vice companies based on state law “failure

to warn” and “breach of express warranty” claims. Johnson & Johnson and cordis, inc., which manufactured the device at issue in the case (Cordis is a wholly-owned subsidiary of Johnson & Johnson), argued that such state law claims were entirely preempted by federal law. However, the court found that the claims could proceed to the extent that they were sufficiently independent of federal law.

Specifically, the court’s opinion permits state common law-based suits against medical device companies where a plain-tiff alleges that the company withheld in-formation from the general public and the medical community about the limitations of the device or safe use of the device, or where it is alleged that the company pro-moted an “off-label” use of the device that

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Japanese Government Attempts to Fill Drug Lag

Source: PMDA

sanofi-genzyme contingent value right (cvr) termsPAyMent (USD PeR CVR) MILeStOne DeADLIne StAtUS

1.00 Cerezyme/Fabrazyme production levels are met 12/31/11 Expired

1.00 Final FDA approval of Lemtrada for MS 3/31/14 Pending

2.00 Sales of Lemtrada exceed $400 million aggregate (within specified periods per territory)

Dependent upon launch date Pending

3.00 Global net sales of Lemtrada exceed $1.8 billion 12/31/20 Pending



14.00 Total contingent value rights payments 12/31/20 Pending

Sources: SEC Filings

The PMDA plans to expedite drug reviews in order to address the so called “drug lag,” which refers to the lower number of approvals in Japan versus the U.S. and EU.



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

was not explicitly permitted by federal law. The opinion also allows claims for breach of express warranty claims that are based on statements that had not been ap-proved or mandated by the FDA.

The court devoted a significant por-tion of its opinion to statute of limitations issues and concluded that the master complaint was not filed in a timely way, and dismissed it.

Since the dismissal didn’t affect the other complaints comprising the lawsuit, the court turned to the substantive is-sue—whether the state-based claims for failure to warn and breach of express war-ranty were preempted by federal law. The fundamental question was whether the existence of federal regulation of medi-cal devices by the FDA meant that state law could not serve as a basis for claims against the medical device companies.

The court found that the plaintiffs could proceed with their state law claims, as long as those claims did not rely on the FDA’s rules and regulations. For example, the court recognized that there was a separate and distinct state interest in litigating a failure to warn claim alleging that a medical device company did not inform the general public or the medical community of dan-gers associated with a device. According to the court, the FDA’s rules and regulations did not adequately address such obliga-tions on the part of device manufacturers.

The case was a group of 48 similar lawsuits from 17 states that had been con-solidated for case management purposes. The “master complaint” was brought by the widow of a patient who had a drug-coated coronary stent manufactured by Cordis implanted to treat coronary heart disease. The patient also had diabetes. The use of the device to treat the heart disease of a patient with diabetes was, according to the court, “considered ‘off-label’ but not necessarily medically contraindicated.” The patient later died as a result of “a subacute stent thrombosis in the area where the stent was placed.”

The parties will now proceed to litigate the failure to warn and breach of ex-press warranty claims in the New Jersey Superior Court.

The court’s opinion sheds light on a complex but largely misunderstood legal issue with serious potential downside risks for medical device companies.

Similar legal challenges are being made across the country. Corporate executives, compliance officers, risk managers, and their legal teams should study the New Jersey Supreme Court’s opinion and follow the case as it continues to wind its way through the courts.

Managed care consolidation likely to continueBy MICHAEL MANNS, SENIOR EqUITy ANA-LyST, BLOOMBERG INDUSTRIES

Recent consolidation within the man-aged care industry is likely to continue as organizations look to increase their exposure to government programs, diver-sify away from commercial risk products and broaden their exposure to individual and small group commercial products in anticipation of the state health insurance exchanges. Companies like Wellcare, centene, Molina health and healthnet have exposure to products that will benefit from future industry trends.

Provisions of the Patient Protection and Affordable Care Act (PPACA) placed caps on the profitability of commercial risk products and mandated that at least 80 cents of every commercial risk premium dollar be spent on health care benefits un-der so-called medical loss ratios (MLRs). Medicare Advantage, Medicare Part D and a majority of Medicaid products are

not subject to such requirements.Of the publically traded companies that

have not aligned with partners, wellcare and humana have greater than 5 percent of enrollment tied to Medicare Advan-tage products. cigna sought commercial diversification in its acquisition of health-spring in early 2012. HealthSpring is a Medicare Advantage provider with a his-torical MLR less than 80 percent, which could offset anticipated cost pressure on Cigna in the face of the minimum medical loss ratio provisions of PPACA.

States have been outsourcing com-ponents of their Medicaid programs to managed care organizations over the past three years, a trend that is likely to increase with the introduction of state demonstration programs designed to coordinate the care of members who are eligible for both Medicare and Medicaid.

Of the remaining independent pub-licly traded companies, Centene, Molina Health, wellcare and HealthNet have greater than 40% of their enrollments tied to Medicaid products. These organizations may be attractive to an acquirer looking to increase exposure to Medicaid programs, similar to WellPoint in its acquisition of managed care provider aMerigroUP in July 2012. They may also command a higher deal multiple since multiples in re-cent transactions appear to place a much

BloomBerg InsIght...

Managed care enrollment exposure as % of total in 2Q 2012Aet AGP CI CnC CVH Hnt

Commercial Risk Enrollment 25.9% 0.0% 14.9% 2.0% 28.8% 49.9%

Commercial ASO Enrollment 62.7% 0.0% 81.6% 0.0% 20.5% 0.0%

Medicare Advantage Enrollment 2.4% 1.3% 3.3% 0.0% 4.8% 8.9%

Medicare Part D Enrollment 2.6% 0.0% 0.2% 0.0% 28.3% 0.0%

Medicare Supplement Enrollment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Medicaid Enrollment 6.5% 98.7% 0.0% 98.0% 17.6% 41.3%

HUM MOH UAM UnH WCG WLP

Commercial Risk Enrollment 32.6% 0.0% 0.0% 23.3% 0.0% 28.7%

Commercial ASO Enrollment 11.5% 0.0% 0.0% 42.6% 0.0% 58.1%

Medicare Advantage Enrollment 21.7% 1.5% 100.0% 6.4% 6.2% 4.4%

Medicare Part D Enrollment 27.9% 0.0% 0.0% 10.5% 34.6% 3.4%

Medicare Supplement Enrollment 0.7% 0.0% 0.0% 7.7% 0.0% 0.0%

Medicaid Enrollment 5.7% 98.5% 0.0% 9.5% 59.3% 5.4%

Denotes Greater than 40% Commercial Risk Enrollment as % of Total Sources: SEC FilingsDenotes Greater than 40% Medicaid Enrollment as % of TotalSource: Company Filings and Bloomberg Industries Estimates



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Managed care acquisition comparisons

DAte ACqUIReR nAMe tARGet nAMe PRIMARy tARGet BUSIneSS LIne DeAL VALUe IMPLIeD eV/

eBItDAS&P 500 eV/

eBItDA

2011-2012

8/20/12 Aetna Coventry Health Commercial $5,590.6 5.88x 9.56

7/9/12 Wellpoint AMERIGROUP Medicaid $4,462.1 14.42x Pending

10/24/11 Cigna HealthSpring Medicare $3,803.2 7.51x Completed

Average 9.27

S&P 500 9.47%

2003 - 2004

10/27/03 Anthem Wellpoint Commercial $14.747.5 10.67x Completed

4/26/04 UnitedHealth Group Oxford Health Commercial $4,790.6 8.74x Completed

10/27/03 UnitedHealth Group

Mid-Atlantic Medical Commercial $3,122.2 12.28x Completed

Average 10.56

S&P 500 12.61

Source: Company Filings and Bloomberg LP and Bloomberg Industries Estimates

higher value on Medicaid exposure than commercial exposure.

According to Bloomberg data, wellPoint is valuing AMERIGROUP, a Medicaid managed care company at 14.42x trailing 12 month ebitda, while Aetna values Cov-entry Health, a diversified managed care operator at a more modest 5.9x trailing 12 month ebitda.

Managed care companies will likely look to broaden their exposure to individual and small group commercial products in anticipation of state health insurance exchanges, similar to aetna in its pro-posal to acquire coventry health. Among remaining targets, only HealthNet has greater than 40% of its enrollment tied to commercial risk products. However, according to AM Best, the majority of its membership is based in California, a very competitive market.

BloomBerg InsIght...

2012 08 30 v1 AAG RR Horizontal Ad.indd 1 8/30/12 2:34 PM



http://www.rodm.com/2012conference

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tHe Week In ReVIeW

clinical Updatesteva Pharmaceutical industries is

recruiting about 1,800 patients for a new trial called Concerto that tests its multiple sclerosis pill laquinimod and its ability to slow a patient’s descent into disability. This is the third round of research for the drug, which has failed to beat compet-ing products on the industry standard of reducing the rates at which patients experience relapses.

— David Wainer

novartis’ fifth qVA149 Phase III study, SPARK, met its primary endpoint of reducing the rate of moderate-to-severe COPD exacerbations. Initial regulatory filings in Europe and Japan expected are expected in the fourth quarter with U.S. filings planned for the end of 2014.

— Cormac Mullen

idenix Pharmaceuticals inc. faces a second clinical hold following safety issues with Bristol-Myers squibb co.’s hepatitis C drug that led to termination of development. The drug, IDX19368, had not yet been tested in humans but belongs to the same class of drugs as Bristol’s failed drug and the company’s more advanced agent IDX184 that was placed on hold for cardiac testing.

— Meg Tirrell

roche holding ag’s breast cancer drug T-DM1 “significantly” extended the lives of breast cancer patients in a Phase III trial called Emila that may improve the likeli-hood of approval of the medicine. The drug uses immunogen inc.’s technology to combine Roche’s Herceptin with an older chemotherapy. Roche has applied to the FDA for approval and said it will “shortly” submit an application to the EU’s drug regulator. The FDA rejected a request in 2010 to accelerate the approval process.

— Phil Serafino and Naomi Kresge

resverlogix corp.’s RVX-208 raised the level of good cholesterol in a Phase IIb trial, dubbed Sustain, in patients with atherosclerotic cardiovascular disease.

— Jeremy van Loon

Pozen’s PA32540, a combination of enteric-coated aspirin and omeprazole, given at least 10 hours apart from clopi-

dogrel had greater blood clotting effects than all three drugs administered synchro-nously, according to data presented at the European Society of Cardiology Meeting.

— Catherine Larkin

eli lilly & co. stopped the Phase III study of pomaglumetad methionil for schizophre-nia, saying it was unlikely to work.

— Bruce Rule

regulatory newsThe FDA refused to accept sanofi’s ap-

plication for approval of its multiple scle-rosis drug Lemtrada. Sanofi’s genzyme unit will work with the agency “over the coming weeks” to resubmit the application as soon as possible. The regulator asked that the company modify the presentation of data to allow it to “better navigate the application,” but did not ask for additional data or more studies.

— Phil Serafino

Medivation inc. won approval from U.S. regulators for a late-stage prostate cancer treatment, which will be sold under the name Xtandi. It was developed with astel-las Pharma inc., and the companies will split sales.

— Drew Armstrong

novo nordisk’s diabetes drug Tresiba received a positive review from the U.K. National Health Service, which noted the drug has clear benefits on nocturnal hypo-glycaemia and flexible dosing.

— Gelu Sulugiuc

The Medicare Evidence Development & Coverage Advisory Committee will meet Jan. 30 to review data on the use of beta-amyloid plaque imaging in PET scans to manage dementia and neurodegenerative diseases, which are currently not covered. eli lilly and cardinal health’s Amyvid imaging agent was approved for use in detecting Alzheimer’s disease by binding to amyloid plaque in the brain. ge, Bayer/Piramal healthcare are also developing amyloid imaging agents.

—Catherine Larkin

novartis and incyte’s Jakavi won EU approval to treat myelofibrosis.

— Chris Malpass

exelixis’ application for cabozan-tinib will not need to be reviewed by an advisory committee ahead of its Nov. 29 decision date for metastatic medullary thyroid cancer.

— Sasha Damouni

ariad submitted a marketing authoriza-tion application to the EMA for ponatinib to treat resistant or intolerant chronic my-eloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL).

— Cristin Flanagan

European regulators have approved an additional indication for Boston scien-tific’s watchman Left Atrial Appendage (LAA) Closure Device. The approval allows for use in reducing stroke in patients with atrial fibrillation and a con-traindication to warfarin and newer oral anticoagulants

— James Ludden

Boston scientific received CE Mark approval for its Precision Plus spinal cord stimulator system, a rechargeable device, in patients with chronic intractable pain of the trunk.

— Gelu Sulugiuc

gilead sciences inc. won U.S. approval to sell a pill called Stribild for new HIV pa-tients that combines four of the company’s drugs into one. The drug will cost as much as $29,000 a year. Gilead is required to conduct additional studies that test the drug’s safety in women and children, how resistance develops to Stribild and the possibility of interactions between the treatment and other drugs.

— Anna Edney

The FDA’s Vaccines and Related Bio-logical Products Advisory Committee is scheduled to discuss dynavax’s Heplisav vaccine during a Nov. 14-15 meeting. A final decision is expected by Feb. 24


Johnson & Johnson received FDA approval for a new use of Nucynta ER (tapentadol) extended-release tablets, as an oral analgesic for management of neuropathic pain associated with diabetic peripheral neuropathy in adults.


AstraZeneca Selects CeO, Gilead’s HIV Pill Approved, Achillion Becomes HCV target



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

week In revIew...

abbott laboratories’ rheumatoid arthri-tis drug Humira won the backing of panel advising the FDA for patients with moder-ate to severe ulcerative colitis who don’t re-spond to conventional therapies. The FDA is scheduled to decide whether to approve the drug by the end of September.

— Drew Armstrong and Anna Edney

angiodynamics was granted FDA 510(k) clearance for its BioFlo peripher-ally inserted central catheters with Endexo technology that are designed to cut the accumulation of catheter-related throm-bus. The company will release the product in the second quarter next year.


The FDA gave conditional approval for Medtronic to begin testing its CoreValve system in patients at intermediate risk for open-heart aortic valve replacement in the Surtavi trial. The study has already enrolled more than 1,500 high or extreme risk patients.


The FDA granted priority review to Johnson & Johnson’s supplemental application for Zytiga in treating meta-static castration-resistant prostate cancer in asymptomatic or mildly symptomatic patients after failure of androgen depriva-tion therapy. A decision should be issued within six months of submission, which was made in June.


teva Pharmaceutical industries ltd. received FDA approval to market tbo-filgrastim, a competitor to amgen inc.’s Neupogen, which helps cancer patients grow white blood cells. Teva is barred from selling the biosimilar copy of Neupogen, until November 2013, according to a settlement reached last year.

— David Wainer

Bayer and onyx have filed for FDA approval of regorafenib to treat meta-static and/or unresectable gastrointestinal stromal tumors for patients whose disease has progressed despite prior treatment.

— Sasha Damouni

ironwood Pharmaceuticals inc. and Forest laboratories inc. won U.S. regu-latory approval for linaclotide as a treat-ment for irritable bowel syndrome with constipation and chronic constipation.

— Meg Tirrell

Pfizer’s Revatio, a drug for adults with pulmonary hypertension, shouldn’t be prescribed for children and teenag-ers because of safety and effectiveness concerns, U.S. regulators said. A warning about the drug’s effects in children will be added to its label, the agency said.

— Andrew Pollack

dealsachillion Pharmaceuticals inc., the

developer of hepatitis C treatments that was passed over by potential acquirers in the last year, is poised to draw renewed interest after setbacks by rival drugmak-ers. Bristol-Myers squibb co. aban-doned development of the drug it gained in its purchase of inhibitex inc. and Idenix Pharmaceuticals inc. said U.S. regulators halted two of its trials.

The company could be a takeover can-didate for Merck & co., roche holding ag and vertex Pharmaceuticals inc., according to Piper Jaffray Cos. and william Blair & Co. A suitor could pay a premium of as much as 79 percent to Achillion’s stock price and still acquire the company for less than its peak market value earlier this year.

— Ryan Flinn and Will Robinson

depomed licensed its Acuform patents to Johnson & Johnson for an upfront payment of $10 million and it will receive a low single digit royalty on net sales of Nu-cynta ER through 2021. It is also eligible for a one time sales milestone.

—Catherine Larkin and Brian Welcher

dainippon’s sunovion will buy eleva-tion Pharmaceuticals inc for $100m upfront plus up to $90m in development milestones for experimental lung treat-ment EP-101. The company will also pay up to $210m in commercial milestone pay-ments after approval of the drug and may pay an additional $30m if new programs are successful.


litigationexpress scripts inc. persuaded a judge

to dismiss most of the legal claims filed by groups of retail drug stores challenging its $29.1 billion acquisition of Medco health solutions inc. The judge threw out the retailer’s claims saying any injuries they’d

suffer from a loss of competition would be compensable with cash while they’d sought only injunctive relief. A spokesman for Express Scripts declined to comment.

— Andrew Harris and Tom Schoenberg

Johnson & Johnson will pay $181 million to resolve claims by 36 states that it improperly advertised antipsychotic drugs Risperdal and Invega. The company settled “to resolve the concerns of the attorneys general under state consumer protection laws and to avoid unnecessary expense and a prolonged legal process,” it said in a statement.

— David Voreacos and Margaret Cronin Fisk

ManagementastraZeneca Plc named Pascal Soriot,

roche holding ag’s head of pharma-ceuticals, as CEO. Simon Lowth, who has been interim CEO, will return to his position as CFO.

— Allison Connolly

WellPoint inc. has started the search for a replacement to right the company’s financial performance and integrate ameri-group corp. and 1-800-contacts inc., following the resignation of CEO Angela Braly. John Cannon, wellPoint’s general counsel, will serve as interim CEO.

— Drew Armstrong

strategyForest laboratories inc., the subject of

two proxy fights led by investor Carl Icahn, adopted a shareholder rights plan to pro-tect against a takeover effort. The plan will be triggered if a person or group acquires 12 percent or more of Forest’s common stock and will expire in a year unless rati-fied by the shareholders.

— Andrew Pollack and Ryan Flinn

st. Jude Medical inc. is firing 300 work-ers in a reorganization that will save $50 million to $60 million in annual pretax ex-penses starting next year. The company is merging its four divisions into two product operating units, the implantable electronic systems division and the cardiovascular and ablation technologies division. Sales of devices that manage heart rhythms fell six percent in the second quarter from a year earlier and overall sales are expected to decline 1 percent year-over year in 2012.

— Ryan Flinn and Michelle Fay Cortez



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glaxosmithkline’s mepolizumab represents a significant opportunity for the company as a treatment for a rare form of severe asthma. while the type of asthma mepolizumab treats affects only 4 percent of all asthma patients, Bloomberg Indus-tries epidemiology data suggest around 1.9 million individuals will be afflicted with this form of asthma by 2016 in the U.S. and western Europe.

The drug targets eosinophilia, which is a swelling of the lungs caused by an in-crease in white blood cells. Mepolizumab may be used with symptomatic therapies to reduce the risk of asthma attacks.

Glaxo recently published Phase II data showing that mepolizumab significantly reduced the rate of asthma exacerbations in patients treated with three different doses of the drug. This data is available in the Aug.18 issue of the medical journal, the Lancet.

In the study, known as the Dream trial, 621 patients ages 12 to 74 who had a history of recurrent, severe asthma exacerbations and signs of eosinophilic inflammation were randomized to receive one of three doses of intravenous mepo-lizumab (75, 250, or 750 mg) or placebo for a total of 13 infusions.

Previous studies found that the drug failed to ease symptoms or improve lung func-tion in a broad group of asthma patients. However, in patients with severe asthma, the drug reduced the number of exacer-bations requiring hospital admission or a visit to an emergency room compared with placebo even at the lower dose.

The authors of the paper concluded that different strategies may be needed to manage separate aspects of the disease since mepolizumab did not produce im-provements in symptoms or lung function but did reduce the number of attacks.

Three patients deaths during the study weren’t related to treatment, according to the researchers.

Glaxo plans to continue studying the drug and will begin late-stage trials by the end of the year.

Mepolizumab is a monoclonal antibody against interleukin 5 (IL-5), a chemical messenger that increases the amount of white blood cells that cause the lungs to become inflamed.

Other antibody therapies for asthma have been unsuccessful. roche’s Xolair is the only approved antibody for the respiratory disorder. Xolair, an injectable drug, is ap-proved for patients with moderate to severe persistent allergic asthma caused by year-round allergens. Roche reported $682 m in sales from the drug last year. New ap-proaches like mepolizumab and others that target interleukins like IL-13 and IL-17 may be successful.

teva/cephalon’s reslizumab, which also targets IL-5, may directly compete with mepolizumab. The drug is in Phase III trials. Comparison of mepolizumab and reslizumab is not currently possible, though data from an ongoing Phase III trial with reslizumab using comparable endpoints may allow for preliminary comparisons. The Phase II trial used an Asthma-Control questionnaire to assess efficacy.

Cephalon initiated two Phase III trials that compare reslizumab to placebo. One study will assess improvements in forced expiratory volume and is expect-ed to be completed later this year. The second study has a primary endpoint of asthma exacerbations, like the Dream trial, and is expected to be completed by September 2013, according to clinicaltri-als.gov. In the Phase II trial, Cephalon reported that fewer patients on reslizum-ab experienced clinical asthma exacer-bations compared to placebo. Teva plans to submit regulatory filings in 2014.

Glaxo withdrew an application for Euro-pean approval for mepolizumab in 2009, then known as Bosatria, after a commit-

tee advising the regulatory authorities said the available data did not suggest the drug had a positive benefit-risk balance. The committee said additional data would be required to demonstrate a benefit. whether data from this study will suffice remains unclear.

Bosatria was expected to be used for the treatment of hypereosinophilic syndrome in adult patients without the FIP1L1-PDG-FR fusion gene, to reduce or eliminate the need for corticosteroid therapy and to reduce blood eosinophil counts.

Glaxo presented the Phase II mepoli-zumab data at the European Respiratory Society (ERS) Meeting. Glaxo will also hold an investor event during which it will provide an update in its respiratory portfo-lio on Sept. 4.

Roche’s anti-IL-13 antibody lebrikizumab is also in Phase III development for severe asthma, with regulatory filings planned for 2016. Roche presented data for lebriki-zumab on its ability to reduce serum peri-ostin at ERS. Data from two Phase II trials MILLy and MOLLy were first presented at last year’s ERS. The company may develop the drug with a diagnostic that identifies which patients are most likely to respond. Patients with higher levels of periostin, which correlates with IL-13 activity, experienced a greater reduction in severe exacerbations with treatment. The Phase III trial will stratify patients on the basis of this marker.

Compiled by Sam Fazeli, Director, Bloomberg Industries Europe and Elizabeth Krutoholow

key CAtALyStS

GlaxoSmithkline May Capture Significant Market with Mepolizumab in Rare Asthma

glaxo’s Phase iii dream data

PLACeBO MePOLIZUMAB 75MG

MePOLIZUMAB 250 MG

MePOLIZUMAB 750 MG

Number of patients 155 153 152 156

Average Age 46.4 50.2 49.4 48.6

Duration of asthma 17.9 19.0 20.4 19.1

Reduction in clinically significant exacerbations (per patient year) 2.4 1.24 1.46 1.15

Blood eosinophil count 0.28 0.25 0.23 0.25

Placebo adjusted 1.16 (48%) 0.94 (39%) 1.26 (52%)

Reduction in clinically significant exacerbations 0.22 0.14 0.12

Reduction in eosinophil count (x10^9/L)

Source: The Lancet, Volume 380, Issue 9842, Pages 651 - 659, 18 August 2012



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Incidence of COPD to Reach 13 Million in U.S. by 2019

Ages 75+

Ages 65 - 74

Ages 55 - 64

Ages 40 - 54

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Source: Foster Rosenblatt

tHeMeS & DRIVeRS By SAM FAZELI, DIRECTOR, BLOOMBERG INDUSTRIES EUROPE

The seasonal fall in Advair weekly prescriptions normally reaches its nadir in mid-July. Although overall Advair volumes have declined by 10% since July 2009, Advair’s volume decline may be stabilizing.

The incidence of asthma in the U.S. is expected to rise by a compounded annual growth rate (CAGR) of 1.7 percent from a base of 26.9 million individuals in 2011. Growth of the asthmatic population will be more modest in the EU, with a CAGR of 0.7 percent. Since asthma occurs more in younger patients, the higher rate of growth of adolescents in the U.S. may be respon-sible for this difference.

The number of patients with chronic obstructive pulmonary disease (COPD) in the U.S. is expected to rise by a CAGR of 1.7 percent. Slower growth is expected in western Europe with a CAGR of 0.8 percent because of the larger baby boomer popula-tion in the U.S..

Asthma and COPD drug sales grew to $29.3 billion in 2011 from $17.8 billion in 2006, a CAGR of 10.4 percent. Pfizer, GlaxoS-mithKline, Novartis and Merck are targeting this lucrative market. Smaller companies like Theravance, Almirall and Pearl Therapeu-tics have joined the fray. For additional data, visit the newly launched BloomBerg industries asthma/coPd dashBoard at Bi coPdg.

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Ages 05 - 14

Ages 00 - 04

Source: Foster Rosenblatt

Almost 9 percent of the U.S. population had asthma in 2011. Although asthma can occur in people of all ages, the majority of sufferers were either above age 35 or 14 years old or younger.

AstraZeneca’s Symbicort and Merck’s Dulera, both “LABA+ICS” drugs, compete in the asthma and COPD markets, which are dominated by Glaxo’s Advair. Both drugs are beginning to capture some market share.

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AstraZeneca's Symbicort Market Share Has Grown to 22%

Symbicort market shareDulera Market ShareDulera Weekly RxAdvair Weekly RxSymbicort Weekly Rx


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Pfizer's Spiriva Fends Off Generics With Once-Daily Dosing

Spiriva Weekly RxGeneric and Branded ipratropium Weekly RxGeneric and branded ipratropium plus albuterol Weekly Rx


COPD is most prevalent in people over the age of 40. The CDC has estimated that there may be as many as an additional 14 million patients in the U.S. still undiagnosed.

Pfizer’s Spiriva is the only once-daily long-acting muscarinic antagonist with FDA approval. Marketing of the drug and its once-daily dosing have helped Pfizer maintain market share in the face of cheaper alternatives.



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CLInICAL CAtALyStS

COMPAny DRUG DAte InDICAtIOn & ACtIOn SHORt InteReSt 1M % CHAnGe

BUy/HOLD/SeLL

Synta Pharma ganetespib September Non-small cell lung cancer: Final data from Phase IIb trial with progression-free survival and overall survival data at ESMO 24.94 6/2/1

Mannkind Afrezza September Type I diabetes: Complete sreening for Study 171 (Affinity 1) trial of next-generation inhaler device 0.99 3/3/3

Sunesis vosaroxin Sepetmber Acute myeloid leukemia: Interim analysis of Phase III VALOR trial in relapsed/refractory patients 0.98 6/0/1

Achillion Pharma ACH-3102 3Q12 Hepatitis C: Proof-of-concept Phase Ib data 8.46 12/2/2

MorphoSys MOR103 3Q12 Rheumatoid arthritis: Data from Phase Ib/IIa trial -49.48 9/1/1

Zalicus Synavive 3Q12 Rheumatoid arthritis: Data from Phase IIb SYNERGY trial 13.19 5/0/1

Oxford BioMedica TroVax 3Q12 Ovarian Cancer: Initiate Phase II trial N/A 1/0/1

Biomarin PEG-PAL 3Q12 Phenylketonuria: Phase II data -8.45 16/5/0

Medivation/Astellas enzalutamide 3Q12 Prostate Cancer: Data from Phase II trial in hormone-naïve patients 11.88 12/1/1

Acadia pimavanserin 3Q12 Parkinson’s Disease Psychosis: Phase III results study 020 2.29 5/1/0

Biogen/Elan Tysabri 3Q12 Multiple Sclerosis:Final data from STRATIFY 1 trial to define prevalence of serum JC virus antibody -12.03 19/9/0

UCB/amgen AMG-785 Oct 12-16 Osteoporosis: Present data from Phase III trial in post-menopausal patients at ASBMR -2.07 16/13/1

Sanofi/Zealand Pharma lixisenatide October Type II diabetes-Data from cardiovascular outcome trial ELIXA to be included in NDA filing 19.72 2/2/0

Biocryst/ Shionogi peramivir Q412 Influenza: Interim analysis (with futility analysis) of Phase III trial 301 in i.v. peramivir for hospitalized patients 4.30 4/1/1

Medicines Company Cangrelor YE12 Antiplatelet therapy bridging: Data from Phase III CHAMPION PHOENIX trial -1.79 3/3/0

Teva Nuvigil YE12 Bipolar depression: Data from first Phase III trial as adjunctive treatment 12.85 21/12/0

ZIOPHARM Oncology Zymafos 4Q12 Front-line metastatic soft tissue sarcoma: Data from Phase III registration PICASSO III trial in combi-nation with doxorubicin 3.57 4/1/1

vertex/ Alios ALS-2200 Nov 9-13 2012 Hepatitis C: Present data (including seven-day viral kinetic data) from Phase I trial in healthy volun-teers and genotype 1 patients, possibly at AASLD -7.71 22/5/0

abbott/ Enanta Pharma ABT-450/ABT-267 /ABT-333 Nov 9-13 2013 Hepatitis C: Present initial data from Phase IIb trials in interferon-free combination regimens at

AASLD -20.21 12/11/1

Eli Lilly/incyte baricitinib Nov 9-14 Rheumatoid arthritis Present 6-month data from Phase IIb trial at ACR 9.93 13/4/1

Pfizer/ Takeda tofacitinib Nov 9-14 2012 Rheumatoid Arthritis: Present additional analyses from Phase III trials at ACR 11.47 22/4/2

Emergent BioSolutions TRU-016 Dec 8-11Relapsed indolent non-Hodgkin's B-cell lymphoma: Potentially present data from Phase Ib portion of the Phase Ib/II trial in combination with bendamustine and Rituxan in patients including follicular lymphoma, small lymphocytic lymphoma and marginal zone lymphoma at ASH

-10.40 7/0/0

Pharmacyclics/ Johnson & Johnson

ibrutinib (PCI-32765) Dec 8-12

Diffuse large B-cell lymphoma: Present preliminary data from Phase II trial PCYC-1106 of mono-therapy in relapsed or refractory patients with two genetically distinct subtypes: the activated B-cell (ABC) subtype and the germinal center (GC) subtype at ASH

7.01 6/6/0

Curis CUDC-101 4Q12 Head and neck cancer: Complete dose escalation portion of Phase I trial of IV formulation in combi-nation with cisplatin and radiation in first-line HPV-negative patients 0.30 11/0/0

Keryx Zerenex 4Q12 Hyperphosphatemia -Complete long-term 58 week safety and efficacy study of Phase III registra-tional program 5.22 8/0/1

spectrum Pharma/ Topo-Target belinostat 4Q12 Relapsed or refractory peripheral T-cell lymphoma: Data from Phase II registrational trial BELIEF 18.34 3/0/0

“Percent change in the total number of shares investors have sold short but have not bought back for the last month API: current value available”Bolded company used for Short Interest and Rating



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IPO tRACkeR

The offer size of pharma and biotech IPOs in North America has largely kept pace with offerings in the Asia-Pacific region throughout the year.

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Average Offer Size

Number IPOs

Source: Bloomberg

-14.54

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European Pharma, Biotech IPOs Underperform

Bio/Pharma

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Source: Bloomberg

11.27

23.31

-25.37

iPo snapshot: ovascienceCommon stock offered by selling stockholders 7,630,683 shares

Common stock outstanding 14,262,276 shares

Use of Proceeds Company will not will not receive any proceeds

Involved Parties

Role Name

transfer Agent(s) Computershare Trust Company Inc

Registrar(s) Computershare Trust Company Inc

Auditor Ernst & Young

Legal Adviser to the Issuer Wilmer Cutler Pickering Hale & Dorr LLP

Bessemer Venture Partners 16.77%

Pharma/Biotech/healthcare services offerings calendar

DAte ACtIOn ISSUeR nAMe ISSUeR tICkeR

oFFer siZe

(Usd M)oFFer tyPe

Aug. 29 Announced OvaScience 0175162D US 41.97 iPo

Aug. 29 Trading Laser-Med SA LSR PW 0.02 iPo

Aug. 30 Expected to Trade Tsuki Corp 2398 JP 46.40 additional

Aug. 30 Lock-up expiring Hainan Haiyao Co Ltd 000566 CH 127.97 additional

UPCOMInG

Sept. 12 Lock-up expiring Aegerion Pharma AEGR US 50.15 additional

Sept. 17 Lock-up expiring Aspen Bio Pharma APPY US 12.20 additional

Sept. 18 Lock-up expiring Cytokinetics CYTK US 42.48 additional

Sept. 19 Lock-up expiring Galectin Thera-peutics GALT US 12.00 additional

Sept. 20 Lock-up expiring Coronado BioSciences CNDO US 28.75 additional

Sept. 24 Lock-up expiringMerrimack Pharmaceu-ticals

MACK US 105.30 iPo

Sept. 25 Lock-up expiring ThromboGenics THR BB 103.37 additional

Sept. 25 Lock-up expiring DBV Technolo-gies DBV FP 53.10 iPo

Sept. 25 Lock-up expiring Omeros Corp OMER US 34.50 additional

regional Breakdown of 2012 Pharma/Biotech iPos and Performance to date

ISSUeR nAMe tICkeR oFFer siZe (Usd M)

oFFer Price

last close

oFFer to

date (%)

north america

Merrimack Pharmaceuticals Inc MACK US 105.30 7.00 7.59 8.43TESARO Inc TSRO US 86.81 13.50 11.34 -16.00Durata Therapeutics Inc DRTX US 77.63 9.00 8.18 -9.11Verastem Inc VSTM US 63.25 10.00 8.85 -11.50Puma Biotechnology Inc PBYI US 60.00 0.00 14.00 0.00Cempra Inc CEMP US 57.60 6.00 8.03 33.83Hyperion Therapeutics Inc HPTX US 57.50 10.00 10.17 1.70Supernus Pharmaceuticals Inc SUPN US 52.25 5.00 12.25 145.00ChemoCentryx Inc CCXI US 51.75 10.00 10.36 3.60Global Green Inc GOGC US 36.88 0.00 0.18 0.00Premier Biomedical Inc BIEI US 0.24 0.00 1.60 0.00Western europe

DBV Technologies SA DBV FP 53.10 8.86 8.00 -9.71Adocia SAS ADOC FP 41.35 15.88 8.74 -44.96Respiratorius AB RESP SS 1.07 0.50 0.27 -46.00asia-Pacific

Xizang Haisco Pharmaceutical G 002653 CH 126.56 20.00 30.90 50.85Yantai Dongcheng Biochemicals 002675 CH 111.43 26.00 24.43 -6.69Hainan Shuangcheng Phar-maceuti 002693 CH 94.89 20.00 23.58 17.25

Jinhe Biotechnology Co Ltd 002688 CH 77.08 18.00 26.28 43.17Jiangxi Boya Bio-Pharmaceutica 300294 CH 73.56 25.00 31.57 23.08Propanc Health Group Corp PPCH US 29.07 0.00 0.00 0.00Cordlife Group Ltd CLGL SP 23.72 0.50 0.53 5.05Adimmune Corp 4142 TT 21.38 38.00 38.60 -2.37TSH Biopharm Corp Ltd 8432 TT 9.76 88.00 101.00 25.63Genovate Biotechnologies Co Lt 4130 TT 4.28 13.00 28.70 118.46Dong-A PharmTech Co Ltd 140410 KS 47.00 24000.00 20200.00 -20.83

Pharma and biotech IPOs in Europe have underperformed in 2012 as IPOs in general have made gains since their initial offering the region.



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SHORt InteReSt tRACkeR

Salix received a complete response letter from the FDA in July for subcuta-neous Relistor. Most analysts were bullish on its approval prospects.

This week’s short interest tracker analyzes companies with key pending FDA decisions

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Short Interest in Regeneron Declines Over 2012

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The original decision regarding Navidea’s Lymphoseek was delayed 90 days. The fact that the FDA has not convened an advisory panel as the new date approaches has increased confidence ahead of the decision.

COMPAny nAMe tICkeR SI AS % OF SHAReS OUtStAnDInG

% SI CHAnGe SInCe LASt PeRIOD DAyS tO COVeR SeCtOR

Sunrise Senior Living Inc SRZ us equity 13.52 0.38 22.39 Healthcare Facilities

PSS World Medical Inc PSSI us equity 11.47 -5.01 7.1 Distributers

Centene Corp CNC us equity 10.41 -2.36 3.35 Managed Care

Owens & Minor Inc OMI us equity 9.07 0.03 17.77 Distributers

AmerisourceBergen Corp ABC us equity 8.79 -11.06 1.37 Distributers

AMERIGROUP Corp AGP us equity 7.85 -8.87 7.8 Managed Care

Kindred Healthcare Inc KND us equity 7.56 -1.07 12.31 Healthcare Facilities

VCA Antech Inc WOOF us equity 6.51 -3.34 6.04 Healthcare Facilities

HealthSouth Corp HLS us equity 5.03 2.34 8.81 Healthcare Facilities

Following the successful launch of Eylea and recent approval of Zaltrap, investors have become more confident in Regeneron.

United Therapeutics is looking for FDA approval of oral Remodulin on the basis of one study. The drug showed a significant benefit (p= 0.0125) that was just above the threshold for filing on the basis of one trial.



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

AMGEN INC amgn us 64,683 83.92 31.41% 13.23 12.09 9.70 9.28GILEAD SCIENCES gild us 43,646 57.69 40.51% 15.24 13.18 11.56 10.27CELGENE CORP celg us 31,080 72.04 4.78% 14.78 13.05 11.55 10.62BIOGEN IDEC INC biib us 34,646 146.59 32.62% 22.93 20.17 14.67 12.81ROCHE HLDG-GENUS rog vx 150,649 173.80 13.03% 12.73 11.53 9.45 8.59NOVO NORDISK-B novob dc 522,480 933.00 43.39% 25.30 21.51 16.60 14.96MERCK KGAA mrk gy 19,795 90.94 18.89% 12.41 11.34 8.62 7.67UCB SA ucb bb 7,151 39.00 22.96% 24.24 21.20 13.51 12.38IPSEN ipn fp 1,603 19.03 -17.29% 12.04 11.57 7.16 6.43ALEXION PHARM alxn us 20,698 107.21 47.69% 56.61 40.78 46.10 32.08BIOMARIN PHARMAC bmrn us 4,614 37.34 9.42% N/A N/A 32335.26 N/AUNITED THERAPEUT uthr us 2,799 54.12 14.22% 6.66 6.59 5.28 4.85ONYX PHARM onxx us 4,682 71.92 62.03% N/A N/A N/A N/ASTALLERGENES genp fp 587 43.64 5.65% 14.92 13.71 7.57 6.92PDL BIOPHARMA IN pdli us 1,030 7.36 24.23% 5.01 4.25 N/A N/AALK-ABELLO A/S alkb dc 3,808 376.00 18.20% 39.50 33.25 11.05 12.03

JOHNSON&JOHNSON jnj us 185,907 67.43 5.33% 13.30 12.32 8.79 8.03SANOFI san ft 86,196 65.05 19.23% 10.73 10.37 7.70 7.32PFIZER INC pfe us 178,222 23.86 13.43% 10.79 10.31 6.32 6.31ROCHE HLDG-GENUS rog vx 150,649 173.80 13.03% 12.73 11.53 9.45 8.59NOVO NORDISK-B novob dc 522,480 933.00 43.39% 25.30 21.51 16.60 14.96MERCK & CO mrk us 131,114 43.05 16.90% 11.30 11.46 6.91 7.32ELI LILLY & CO lly us 52,115 44.91 11.97% 13.29 11.90 8.52 7.85GLAXOSMITHKLINE gsk ln 70,877 1425.00 1.99% 12.19 11.35 8.11 7.83ASTRAZENECA PLC azn ln 36,625 2936.50 5.75% 7.76 7.87 5.47 5.41ABBOTT LABS abt us 102,854 65.54 19.24% 12.98 12.22 8.70 8.26ASTELLAS PHARMA 4503 jp 1,787,625 3820.00 24.37% 17.25 15.04 7.57 7.06TAKEDA PHARMACEU 4502 jp 2,898,075 3670.00 11.27% 9.95 12.79 8.88 8.21

REGENERON PHARM regn us 14,222 148.05 162.51% 3.96 0.93 48.4 THERAVANCE thrx us 2,584 26.67 22.62% -0.63 1.03 31.4 ALKERMES PLC alks us 2,401 18.35 6.74% -1.95 1.10 117.4 AMYLIN PHARM INC amln us 5,089 30.98 N/A -9.81 1.86 N/ADENDREON CORP dndn us 693 4.49 -40.26% -0.20 1.03 24.1 ARIAD PHARM aria us 3,417 20.56 67.43% 1.86 0.85 67.2 ACORDA THERAPEUT acor us 916 22.85 -3.40% 7.36 0.69 N/AMEDICINES COMP mdco us 1,374 25.69 37.02% 6.27 0.66 N/ANPS PHARM INC npsp us 658 7.62 16.39% -0.76 1.12 32.4 ARIAD PHARM aria us 3,417 20.56 67.43% 1.86 0.85 67.2 SAVIENT PHARMACE svnt us 96 1.32 -40.36% -0.08 1.04 17.4 AMAG PHARMACEUTI amag us 316 14.79 -22.16% 9.96 0.47 39.6 ALLOS THERAPEUT alth us 194 1.81 28.17% 0.92 0.35 1,406.8 BAVARIAN NORDIC bava dc 1,245 48.10 27.60% 18.58 0.52 17.2 INTERCELL AG icll av 102 1.85 -4.21% -0.27 1.14 14.3 CANGENE CORP cnj cn 109 1.64 -23.23% 0.68 0.59 N/ASEATTLE GENETICS sgen us 3,137 26.54 59.74% 2.85 0.83 29.3 INCYTE CORP incy us 2,617 20.01 32.71% -0.30 1.02 20.1 INTERMUNE INC itmn us 484 7.37 -39.92% 2.83 0.78 36.5 ALGETA ASA algeta 6,294 148.00 -6.50% 7.80 0.95 19.6 IMMUNOGEN INC imgn us 1,210 14.39 23.06% 1.97 0.88 51.9 THROMBOGENICS NV thr bb 1,000 27.92 47.41% 2.48 0.87 46.9 EXELIXIS INC exel us 792 4.43 -8.55% 0.09 0.98 14.5 AVEO PHARMACEUTI aveo us 419 9.59 -44.59% 5.81 0.66 N/A

LARGE PHARMA

30D CHARTCASH BURN IN

MONTHS*TICKERCOMPANY NAME LAST PRICE

YTD TOTAL RETURN

NET CASH/ SHARE

EV/MKT CAP

MATURE/PROFITABLE BIOTECH

COMPANY NAMEMARKET CAP IN

$ MLNLAST PRICE

YTD TOTAL RETURN

2012 P/ETICKER 2013 P/E 2012 EV/EBITDA 2013 EV/EBITDA

EARLY COMMERCIAL/DEVELOPMENTAL STAGE BIOTECH

MARKET CAP IN $ MLN

HeAL

tH In

DICA

tORS



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

ISIS PHARM isis us 1,369 13.61 88.90% 1.25 0.83 33.8 HALOZYME THERAPE halo us 654 5.80 -39.96% 0.51 0.95 18.0 MEDIVATION INC mdvn us 3,862 104.86 111.28% 4.06 0.91 22.8 MORPHOSYS AG mor gr 452 19.43 10.81% 5.81 0.67 N/ARIGEL PHARMACEUT rigl us 668 9.32 19.39% 3.47 0.56 41.5 MANNKIND CORP mnkd us 538 2.70 5.60% -3.68 2.47 0.3 PROTALIX BIOTHER plx us 493 5.43 10.55% 0.24 0.95 11.1 TRANSGENE SA tng fp 255 8.06 4.81% -0.84 1.11 0.4 ENZON PHARMACEUT enzn us 317 6.76 1.34% 4.01 0.40 290.5 LEXICON PHARMACE lxrx us 1,107 2.24 74.42% 0.53 0.59 37.9 ACTIVE BIOTECH acti ss 3,274 47.50 112.67% 3.23 0.85 117.5 ALNYLAM PHARMACE alny us 956 18.29 126.26% 6.10 0.25 35.4 GERON CORP gern us 362 2.76 77.70% 1.17 0.21 29.2 LIGAND PHARM-B lgnd us 345 17.29 45.66% -2.47 1.21 163.6 GENMAB A/S gen dc 3,525 78.50 109.44% 24.25 0.36 29.7 ABLYNX NV ablx bb 129 2.95 -12.90% 1.79 0.47 28.3 IMMUNOMEDICS INC immu us 255 3.37 2.10% 0.43 0.88 N/ASANGAMO BIOSCIEN sgmo us 283 5.37 85.56% 1.60 0.44 38.1 CURIS INC cris us 350 4.40 -6.62% 0.49 0.90 93.8 DYNAVAX TECHNOLO dvax us 695 3.91 19.28% N/A 0.80 28.3 GALAPAGOS NV glpg bb 347 13.15 29.07% 1.20 0.88 23.8 ZEALAND PHARMA A zeal dc 2,157 93.00 61.40% N/A N/A 386.4 CARDIOME PHARMA crme us 20 0.33 -88.59% N/A 0.85 20.6 YM BIOSCIENCES ym cn 295 1.87 13.17% 0.68 0.75 38.3 THERATECHNOLOGIE th cn 41 0.67 -77.78% 0.60 0.74 16.1 NOVAVAX INC nvax us 273 2.04 58.73% 0.15 0.88 9.1 VICAL INC vicl us 312 3.63 -19.05% 0.66 0.85 138.7 BIOINVENT INTL binv ss 217 2.93 -81.86% 2.67 0.83 34.6 OSIRIS THERAPEUT osir us 297 9.05 65.42% 1.44 0.73 27.6 MAXYGEN INC maxy us 171 6.14 9.06% 5.82 N/A 320.3 AFFYMAX INC affy us 640 17.69 165.51% 2.76 0.58 16.1 MOLMED SPA mlm im 88 0.42 -11.62% 0.10 0.79 11.9 SAREPTA THERAPEU srpt us 358 15.82 222.15% 1.68 0.62 19.3 DYAX CORP dyax us 224 2.26 66.91% -0.18 1.13 18.1 BIOCRYST PHARM bcrx us 221 4.37 72.06% 0.26 0.90 15.5 MOLOGEN AG mgn gr 157 10.21 45.23% 0.44 0.94 10.4 ARRAY BIOPHARMA arry us 510 5.54 161.57% -0.03 1.03 30.8 CELLDEX THERAPEU cldx us 334 5.64 111.92% 0.86 0.67 17.7 REPLIGEN CORP rgen us 176 5.69 58.21% 1.61 0.57 N/A4SC AG vsc gr 72 1.42 17.65% 0.37 0.69 15.3 PEREGRINE PHARMA pphm us 265 2.54 143.69% 0.18 0.62 5.8 CEL-SCI CORP cvm us 87 0.32 10.74% -0.01 1.02 2.2 OXFORD BIOMEDICA oxb ln 32 2.24 -37.14% 0.02 0.57 10.4 NABI BIOPHARMA nabi us 69 1.60 -12.77% 2.25 N/A 76.3 INOVIO PHARMACEU ino us 74 0.55 28.50% 0.22 0.49 18.2 MEDIGENE AG mdg gr 42 1.13 13.40% 0.35 0.64 N/AXOMA CORP xoma us 237 3.47 194.78% 0.34 0.70 17.9 TOPOTARGET A/S topo dc 127 0.96 -57.37% 0.94 0.63 16.3 DIAMYD MEDICAL-B diamb ss 211 7.30 -19.55% N/A N/A 19.7 ANTISOMA PLC asm ln 10 1.63 -12.16% 0.02 0.27 7.5 CYTOS BIOTECHNOL cytn sw 57 2.54 44.57% -1.25 1.70 34.1

MEDTRONIC INC MDT US 41,678 40.66 7.87% 11.1 10.6 8.3COVIDIEN PLC COV US 26,909 56.05 25.65% 13.2 12.7 9.2ST JUDE MEDICAL STJ US 11,856 37.76 11.44% 11.0 10.5 7.6BOSTON SCIENTIFC BSX US 7,663 5.40 1.69% 12.7 11.9 6.9

LAST PRICEYTD TOTAL

RETURN2012 P/E 2013 P/E 30D CHART 2012 EV/EBITDATICKERCOMPANY NAME

MARKET CAP IN $ MLN

MARKET CAP IN $ MLN

LAST PRICE

CARDIOVASCULAR DEVICES

CASH BURN IN MONTHS*

YTD TOTAL RETURN

NET CASH/ SHARE

EV/MKT CAP 30D CHARTCOMPANY NAME TICKER

HeAL

tH In

DICA

tORS



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

CR BARD INC BCR US 8,224 98.11 15.04% 14.8 13.8 9.2VOLCANO CORP VOLC US 1,515 28.28 17.65% 142.1 58.0 28.6BIOSENSORS INTL BIG SP 2,129 1.24 -13.64% 13.4 11.8 8.5VASCULAR SOLUTIO VASC US 213 13.11 16.62% 22.6 19.2 10.2SURMODICS INC SRDX US 327 18.64 27.76% 28.8 22.7 10.8THORATEC CORP THOR US 1,994 33.89 0.00% 19.9 19.4 10.6HEARTWARE INTERN HTWR US 1,279 89.57 31.38% N/A N/A 12.9GREATBATCH INC GB US 548 23.15 5.34% 13.4 12.2 N/ALEMAITRE VASCULA ZOLL US 92 6.07 5.28% 34.7 25.3 11.0ABIOMED INC ABMD US 883 22.33 19.87% 74.4 44.2 N/AARTHROCARE CORP ARTC US 820 29.58 -7.29% 21.6 19.5 6.4CARDIONET INC BEAT US 57 2.27 -6.33% N/A N/A N/A

UNITEDHEALTH GRP UNH US 56076 54.30 8.62% 10.8 9.7 5.6WELLPOINT INC WLP US 19469 59.87 -7.94% 8.1 7.5 2.3AETNA INC AET US 12837 38.41 -6.90% 7.6 6.9 4.3HUMANA INC HUM US 11333 70.08 -20.83% 9.9 8.9 0.7CIGNA CORP CI US 13198 45.77 8.86% 8.2 7.4 N/ACOVENTRY HEALTH CVH US 5573 41.63 38.27% 15.8 12.7 6.7HEALTH NET INC HNT US 1895 23.25 -23.77% 23.0 11.9 N/AAMERIGROUP CORP AGP US 4421 90.92 53.66% 22.9 18.2 1.5WELLCARE HEALTH WCG US 2443 56.69 7.79% 10.5 10.8 10.4CENTENE CORP CNC US 2094 40.61 2.68% 28.1 15.2 2.9MAGELLAN HEALTH MGLN US 1357 49.61 0.16% 13.5 11.9 10.0UNIVERSAL AMERIC UAM US 801 9.05 -28.72% 14.5 12.7 4.2MOLINA HEALTHCAR MOH US 1128 24.24 8.96% N/A 17.9 N/AHEALTHWAYS INC HWAY US 351 10.48 53.21% 23.3 16.7 6.7METRO HEALTH MDF US 356 8.04 5.89% 13.1 9.5 7.0

HCA HOLDINGS INC HCA US 12581 28.55 39.7% 7.88 7.58 6.3UNIVERSAL HLTH-B UHS US 3870 39.95 3.3% 9.22 8.37 6.3TENET HEALTHCARE THC US 2163 5.19 2.9% 9.87 7.95 5.6LIFEPOINT HOSPIT LPNT US 1976 40.42 8.9% 11.98 10.87 6.2HEALTH MGMT AS-A HMA US 1964 7.66 3.7% 9.03 8.04 5.8COMMUNITY HEALTH CYH US 2460 27.04 55.0% 7.17 6.70 6.3VANGUARD HEALTH VHS US 751 9.75 -4.9% 11.85 9.29 5.4KINDRED HEALTHCA KND US 591 11.16 -4.8% 7.48 8.31 4.9

CVS CAREMARK COR CVS US 57950 45.55 12.1% 13.53 12.05 7.4EXPRESS SCRIPTS ESRX US 50769 62.62 38.1% 16.92 13.95 12.6OMNICARE INC OCR US 3612 32.38 -6.5% 9.96 9.37 7.5PHARMERICA CORP PMC US 372 12.60 -16.1% 10.32 9.57 6.1BIOSCRIP INC BIOS US 502 8.50 54.4% N/A 28.33 14.8MCKESSON CORP MCK US 20559 87.11 12.2% 11.98 10.85 7.0CARDINAL HEALTH CAH US 13490 39.55 -1.5% 11.47 10.49 6.2AMERISOURCEBERGE ABC US 9693 38.52 3.5% 13.59 12.19 7.1HENRY SCHEIN INC HSIC US 6800 76.81 18.7% 17.62 15.94 10.2PATTERSON COS PDCO US 3745 33.97 16.7% 16.01 14.46 9.5OWENS & MINOR OMI US 1777 27.99 2.1% 14.19 13.12 7.0PSS WORLD MEDICA PSSI US 1086 21.59 -10.5% 19.45 15.58 9.7WALGREEN CO WAG US 33681 35.76 8.8% 13.81 11.68 7.0RITE AID CORP RAD US 1070 1.19 -5.6% N/A N/A 7.0* Based on data from most recent quarterly filings Source: Bloomberg LP Market Close Aug. 31, 2012

SUPPLY CHAIN MANAGEMENT

MANAGED CARE

HOSPITALS

COMPANY NAME TICKERMARKET CAP IN

$ MLNLAST PRICE

YTD TOTAL RETURN

2012 P/E 2013 P/E 30D CHART 2012 EV/EBITDA

HeAL

tH In

DICA

tORS



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