EFTA01193509.pdf

From: Tazia Smith c:1 To: jeevacation®gmail.com Cc: Paul Morris Vinit Sahni , Nay Gu to , Vahe Stepanian Subject: Biotech Sell-Off.... [I] Date: Tue, 25 Mar 2014 13:30:05 +0000 Inline-Images: unnamed; unnamed( l); unnamed(2); unnamed(3); unnamed(4); unnamed(5); unnamed(6); unnamed(7); unnamed(8); unnamed(9); unnamed(I 0); unnamed(I I); unnamed(12) Classification: For internal use only Jeffrey - Biotech posted sharp declines. You are ua.,12712/2 across your basket of names as of yesterdays (3/24) dose (detail below along with chart of Nasdaq Biotech Index and your holdings). Consider unwinding or hedging now and watching for entry point via total return swap or zero cost risk reversal as this negative momentum bottoms out. Note: Mad an outlier (incrementally positive news on drug, Idusig). The Financial Times features an article this morning suggesting that the sell-off in Biotech is a signal of a broader market peak. A letter from congressional representatives to Gilead questioning its plans to sell a hepatitis C drug (named Sovaldi) for $84,000 per dose has put the spotlight on Congress' concerns that the expense might saddle state Medicaid programs with steep costs. US is the only major health-care market remaining without any meaningful drug price controls — increased risk for the sector once the Congress gets involved, especially if focused primarily on pricing. Description Trade Date Quantity Last Price* Unit Cost Market Value Unrealized G/L SANGAMO BIOSCIENCES 05/28/2013 50,000.00 $ 19.80 § 8.44 § 990,000.00 $ 567,786.00 BIOGEN 02/14/2012 2,095.00 $ 312.60 $ 119.55 $ 654,897.00 $ 404,442.05 FOUNDATION MEDICINE 01/13/2014 25,000.00 $ 36.40 $ 27.51 910,000.00 $ 222,336.50 GILEAD SCIENCES INC 2/5/14, 3/7/14 8,100.00 $ 72.13 $ 79.41 $ 584,253.00 $ (58,951.00) ARIAD PHARMACEUTICALS 2/14/12, 1/24/13 16,535.00 $ 7.60 $ 17.60 $ 125,666.00 $ (165 331.40) Total Biotec $3,264,816.00 $ 970,282.15 Nasdaq Biotech Index - lyr Price History EFTA01193509  NBI ( 2499.44 -77.77 On 24 Mar 0 2587.92 h 2587.92 L 2434.16 Prey 2499.44 99 Save As 98 Actions 93 Edit - 9$ Table Line Chart 03125/23:4 Las: Price n _ Cc - pre --- Volurre "Mr ID 3D Dt OM YID ! 11 SY Max Daily • secumwso_cy 01 Event 0 + Track Annotate News Zoom 2800 • Last Price 2499.44 I T High on 02/25/14 2854.26 e Average 2155.07 i Low on 03/25/13 1619.16 7&)O 2499.44 2400 2200 2000 1800 1600 • Volume 83.0411; , • Y • SHAVG (15L62.3MM 1 1 0 Jun Sep Mar 2013 2014 Ariad - 1 r Price Histor ARIA US Market K7.86 /7.88K 15x10 Prey 7.60 Vol 171,991 99 Actions - 93 Edit -' in ID 3D 1M n Save As 6M YTD Last Price P1 Lire 11, , SY Max Daily • n _ Con-3are 910 Table vov Ai__ =MI= * 1—mmilillnirre VC C Security/SD-4y IT Eve t NEI" a + Track z Annotate News ZoOm ■ Last-Price 7.60 20 T High an 09/10/13 22.52 Average 12.8235 1 an 10/31/1r- 220 15 10 5 100M Jun Sep Mar 2013 2014 Biogen - 1yr Price History EFTA01193510 18IIB US Q314.75 /315.50Q 1 x1 Pr r. 312.60 Uri 715 =rpm 99 Save As -- NIERIMmoir/IPRIK•swgr119,0"' tine uteri. :3125/20:4 Last !once EE L.-4 g 3' Compare Moy. Ave i is n= a ID 3D 114 6/I YT: 1 SY MAX Daily • ix Security/Study • Event 191 4> Track . Annotate E News O. awn 350 N Last Price 312.60 I T High on 03/18/14 351.94 -•• Average 250.467 1 Low on 03/25/13 176.22 MEI 300 250 200 • Volume 715 C • StIAVG (15) i 11.806M I L . Jun Sep Mar 2013 2014 Foundation Medical - 1 r Price Histor IFMI US $ Market P35.25 /38.78K 1x1 • Prey 36.40 Vol 543 200 LineutENT. ust once ri Line R 3I Compare Mow. Avgs "r7rragnarniffnliiiiiiiiirgi Vo Sal ID 30 IM 614 YID 1Y SY r.,. :JI • to Seetelyesly le Event it. Track / Annotate TZ News Zoom '45 • • 40 0-30 . Last Price 36.40 I T High on 03/13/14 43.62 +-Average 30.1647 0-20 1 Low on 09/24/13 18.00 op Vohme 0:543M • 5M L. L SMAVG (15) 0.265M Sep Oct Nov Dec Jan Feb Mar 2013 2014 Gilead - 1yr Price History EFTA01193511  GILD US I Market - P72.64 /72.82K 1 <1 11 Prey 72 . 13 Vol 29 340 GILD US ui 99 Save As r nicns Ac rer ne w Line Chart 0312512013 03/15/2014 Last Price M Line _ co—Dare • In= Vc_me NEP SM VI SY Max Daily V « i Security/StLdy M Event O + Track / Annotate News 85 • Last Price 72.13 80 (f T High on 02/25/14 83.95 4- Average 64.4132 i Low on 03/25/13 44.98 75 50 45 y • Volume 29340 . .............. 29340 Jun p Dec Mar 2013 2014 San.amo - 1 r Price Histor SGMO US $ S nu: ket 19.85 21.40 2 2 Prey 19.80 Vol 2,907,036 SGMO US -•ui 99 Save As 96/ Actions 94 Edit - 9$ Table Line Chart 03.:25/201.3 03/25/2014 Last Price Y:.- 2' •;, Volume "Min SD 3D .:4•• r 11. SY Max Daily • a ty. "1 Event O t Track r Annotate News O, Zoom 24.00 ll • Last Price 19.80 22.00 I High on 03/19/14 23.86 19.30 -- Average 12.1209 I. Low on 06/26/13 7.31 18.00 16.00 14.00 12.00 10.00 8.00 1011 M Volume 2.907M L • SMAVG (15) 2.74r Jun Sep Dec Mar 2013 2014 Healthcare sector has outperformed S&P500 last 4 years and has been the best-performing sector YTD Improving R&D returns Ongoing efficiency gains due to various 'self-help' measures More supportive regulatory and payor environment Increasing number of financings and IPOs in Q1 Frequent upward revisions lately to sales estimates at the largest biotechnology companies Nasdaq Biotech Index (NBI) dropped 4.4% Friday • Sharpest decline since Oct-11 EFTA01193512 • Triggered by a letter from congressional representatives to a biotech company Gilead Sciences, questioning its plans to sell a hepatitis C drug (named Sovaldi) for 584,000 per dose • Gilead required to give briefing by 03-Apr • Sovaldi expected to generate >S4bn in sales this year • The drug's expense might saddle state Medicaid programs with steep costs The whole sector is es_OS5 US is the only major health-care market remaining without any meaningful drug price controls Risk for the whole sector once the Congress gets involved, especially if focused primarily on pricing The biggest NBI firms sold-off significantly Id chg (%) Index Wt (%) BIOGEN IDEC INC -8.2 7.9 AMGEN INC -3.2 7.8 GILEAD SCIENCES INC -4.6 7.0 REGENERON PHARMACEUTICALS -5.4 6.9 CELGENE CORP -3.7 6.5 ALEXION PHARMACEUTICALS INC -8.0 4.6 ILLUMINA INC -5.4 4.6 MYLAN INC -0.9 4.3 VERTEX PHARMACEUTICALS INC -5.1 3.8 BIOMARIN PHARMACEUTICAL INC -5.9 2.5 Ways to hedge exposure to the US biotech sector • ProShares UltraShort Nasdaq Biotech Fund (BIS US Equity): designed to be 2x short the NBI • Options on iSharesNasdaq Biotech ETF (IBB US Equity) NBI - last 5_years 30 -J0 2577.21 2000 1500 1000 500 2009 I 2010 2011 2012 2013 201• €I Index (Nasdaq Biotechnology Index) Copyright! 2014 Blccoterg Pittance L.P. 23-Itar-2014 14:3S:20 NBI vs S&P500 - last 1 year EFTA01193513  Normalized As Of 03/23/2013 Hi - 57.370 Co o• NBI Index - SPX Index 38.8807 38.8807 20 Jun Sep Dec Mar 2013 2014 NBI - last 1 year 2900 2600 2700 2500 2400 2300 2200 2100 2000 Sep Oct Nov Dec Jan Feb Mar 2013 I 2014 Nil Index flosdaq Biotechnology Index) Daily MSEF2013-23PIARXI14 Copyright 2014 Blomberg Finance ahar-2014 14:35:52 KCP Capital Markets This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail n error) please notify the sender inmediately and destroy this e-mail.My unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Tazia Smith Director I Key Client Partners - US Deutsche Bank Securities Inc Deutsche Asset & Wealth Management 345 Park Avenue. 26th Floor New Tel. Fax Emai Pascritn,-trr Perftrnt, This communication may contain confidential and/or privileged information. EFTA01193514 If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Deutsche Dank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01193515