EFTA01168073

From: Tazia Smith To: jeevacation@gmail.com Cc• aul Morris >, Vahe Stepanian Subject: Trade Update 2/5/14 [C] Date: Wed, 05 Feb 2014 14:57:53 +0000 Inline-Images: unnamed; unnamed(1); unnamed(2); unnamed(3); unnamed(4) Classification: Confidential Jeffrey - Today you executed the following: B 5,000 GILD at $792202 Be back, Tazia Tazia Smith Director I Key Client Partners - US Deutsche Bank Securities Inc Deutsche Asset 8 Wealth Management 345 Park Avenue, 26th Floor New York. NY 10154 Tel. +1 (212) 454-2889 Fax +1 646 257-3131 Mobile Email Pass-to-I,* Per From: Jeffrey Epstein leavacabon@gmaitcom> To: Tazia Smithidb/dbcom@DBAMERICAS. Date: 02/05/2014 09:52 AM Subject: Re: Gilead entry point... 5000 shares ok On Wed, Feb 5, 2014 at 9:43 AM, Tazia Smith < > wrote: EFTA01168073 Classification: Public Jeffrey - Gilead = 1.5 in your (and our suggested) US healthcare percentages Gilead reported earnings yesterday, trading -80.34 vs 82.02 prior close. DB Research reiterates the equity as one of our top picks (like big cap biotech, this and BIIB among them, analyst sees room for further multiple expansion). Earnings detail and investment thesis below. -64% implied upside to DB price target of $132 GILD US $ Q80.30 /80.37Q 8x5 At 9:39 Vol 1,891,828 81. 98 B F 82.00 0 L 80.15K Val 153 . 748M GILD US E ui 99 Save As 9$ Actions - 97) Edit 9 Line Chart 02/05/2013 02/05/2014 Last Price Line El Compare Mov. Avgs Volume III USD ID 3D M 6M YTD 1Y SY Max Daily Security/Study M Event O ± Track .! Annotate IL News O, Zoom 80.349 ■ Last Price 80.349 T High on 01/22/14 82.18 -Average 59.6771 4-70 1 Low on 02/06/13 39.91 ►60 ►40 99 • volume, 4.§93.99 •- 20M taLalantilitiriMa Mar JunSep Dec 2013 2014 Used with permission of Bloomberg Finance LP -- Forwarded by Tazia Smith/db/dbcom on 02E0St2014 09:38 AM --- From: EVS EquilyFocuskibidbcom@DBEMEA To: Dale: 02,05/2014 05:01 AM Subject: DB: GILD.OQ - Robyn Karnauskas Classification: Public Gilead Sciences (Buy, CP: $82.02, TP: $132.00, GILD.OQ, Robyn Karnauskas) 4Q13 update: light taxes create more leverage for Sovaldi 4Q13 product revenues beat consensus by -$250M led by inventory & Sovaldi Sovaldi 4Q13 sales were $139M vs. $75M consensus. Pure demand was roughly $50M in the quarter. EFTA01168074 Remainder of sales came from inventory stocking & purchase for clinical trials. On the HIV front, mgmt noted that 1Q14 will be weaker with similar trends to 1Q13. This trend is driven by increased purchasing in 4Q13 & being at higher end of inventory range before '14 price increases. '14 guidance for base biz is $11.3-$11.58. We are at $11.58. Reiterate Buy on valuation. We have increased our Sovaldi numbers in '14 by $700M to $5.7B We have taken up our numbers for US & EU Sovaldi over 2014 based on two trends 1) faster than expected launch in EU in a few countries (we previously assumed no sales in 1Q in EU) and 2) strong than expected new script trends in the US. Our new WW quarterly estimates are $1.21B, $1.91B, $1.328, and $1.278. In Gilead's early survey work, mgmt has found that the Sovaldi mix roughly reflects real world US genotypic mix (70% GT1 and 30% in GT 2 &3). We calculate every 1K new starts to Sovaldi could add $250M-$300M in revs We assume warehousing in 2Q since we expect Sovaldi interferon free combo in mid 4Q14. We assume monthly new starts declining to —4000/mo avg. in 2Q/3Q from the highs of —13K in 1Q. Mgmt color on taxes: supply arrangements allow US sales to have tax benefit Mgmt noted that every $16 of Sovaldi sales led to a lower tax rate of .75-1% irrespective of where the sales are located. Before the call, GILD had noted potential tax benefit over time from greater ex-US sales and IP in Ireland. On call today, we learned of new structuring supply arrangement that allows for US sales to flow out of Ireland manufacturing facility. These benefits will continue over a multi-year period but the magnitude of impact is greater in the near-term. The company has not given long-term tax guidance yet. We estimate '14 tax rate at 23% which could further decrease to 18% over time if Sovaldi hits our revenue estimate On core biz basis, there was no impact from tax in 2014. This one-time benefit lead to a .5-.75% hit to their tax rate. We calculate 2014 tax rate at —23.5% (28.5% core biz, then subtract 5% impact of $5.78 Sovaldi sales). This math is based on our numbers suggest an implied Sovaldi tax rate at -13% using revenue weighted calculations. This makes our weighted avg. tax rate for 2015 at -21%. Every 100bps tax rate impacts 2015 EPS by 10c (1.3% our of '14 EPS). Generic Sustiva will benefit COGS over next three years. We model COGS of 20% in '14 vs. 12% in '16 Sustiva (a component of Atripla not made by GILD) is going generic this year in Europe. In US, it will go generic in 2015. There is a step-down function of the royalty payments over three years according to mgmt. Valuation & risks — Gilead still remains our top pick in large cap We value GILD at $132/sh using 17X 2015 multiple (10% discount to its biotech peers due to patent cliff on base biz). Our new '15 EPS is $7.75/sh. Risks: weak sovaldi launch, poor base biz performance Please click on below link for full report: Regards, EVS Equity Focus Telephone: +91-124-4622312 - 19 Please ensure all mails are also sent to our shared inbox to avoid getting overlooked. EFTA01168075 This email is sent to you by Evalueserve on behalf of Deutsche Bank Diese email wurde Ihnen von Evalueserve im Auftrag der Deutschen Bank gesendet For additional Deutsche Bank research, visit our web site: Please refer to the disclaimer that applies to the research attached in this email. This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and delete this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Please refer to for additional EU corporate and regulatory disclosures. Tazia Smith Director I Key Client Partners - US Deutsche Bank Securities Inc Deutsche Asset & Wealth Management 345 Park Avenue. 26th Floor New York. NY 10154 Tel. +1 (212)454-2889 Fax +1 (646 257-3131 Mobile Email This communication may contain confidential and/or privileged information. 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 Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this EFTA01168076 communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com, and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved This communication may contain confidential and/or privileged information. 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 Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. EFTA01168077